United States v. Fordyce, Cr. No. 29124.

• Citation: 192 F. Supp. 93
• Decision Date: 29 March 1961
• Docket Number: Cr. No. 29124.
• Court: U.S. District Court — Southern District of California
• Parties: UNITED STATES of America, Plaintiff, v. Merle Wilbur FORDYCE, Defendant.

192 F. Supp. 93

UNITED STATES of America, Plaintiff, v. Merle Wilbur FORDYCE, Defendant.

Cr. No. 29124.

United States District Court S. D. California, Central Division.

March 29, 1961.

The defendant Merle Wilbur Fordyce was charged in a four count indictment with the violation of § 2314 of Title 18 U.S.C.A., which reads, so far as material here, as follows:

"Whoever, with unlawful or fraudulent intent, transports in interstate or foreign commerce any falsely made, forged, altered, * * securities, knowing the same to have been falsely made, forged, altered, * * *; or

"Whoever, with unlawful or fraudulent intent, transports in interstate or foreign commerce, any tool, implement, or thing used or fitted to be used in falsely making, forging, altering * * * any security, or any part thereof"

Count 1 charged transportation, on or about August 27, 1960, in interstate commerce from Los Angeles, California to Independence, Missouri, "tools, implements and things used and fitted to be used in falsely making and forging securities, to wit:" a Diners Club Credit Card issued to George E. Mock.

Count 2 charged transportation at the same time and between the same places of "tools, implements and things used and fitted to be used in falsely making and forging securities, to wit:" a Hilton Carte Blanche Credit Card issued to the same person.

Counts 3 and 4 charged transportation, on or about September 7 and 8, 1960, from Las Vegas, Nevada, to Los Angeles, California, of two Diners Club charge slips dated respectively September 7 and 8, 1960, bearing the forged signature of George E. Mock.

It is admitted that on June 24, 1960, a number of articles were stolen from George E. Mock at Los Angeles, California, among them the two credit cards mentioned. The defendant, after obtaining them, travelled to Las Vegas, Nevada, where he bought merchandise, using the Diners Club Credit Card and the name of George E. Mock. These charge slips were forwarded to the Diners Club office at 900 North La Cienega, Los Angeles. The defendant subsequently travelled through Salt Lake City, Utah, Denver, Colorado and Kansas City, Kansas, ending his travels at Independence, Missouri, where he was arrested.

At the time of his arrest he had in his possession the two stolen credit cards. It was admitted that the defendant used these stolen credit cards to obtain merchandise and that he knew that they were stolen. The cause was tried upon these admitted facts by the Court without a jury.

Laughlin E. Waters, U. S. Atty., by Minoru Inadomi, Asst. U. S. Atty., Los Angeles, Cal., for plaintiff.

Russell E. Parsons, Los Angeles, Cal., for defendant.

YANKWICH, District Judge (after stating the facts above).

Stated, in summary, my view is, under the admitted facts, that no offense was committed by the defendant, because neither the credit cards nor the charge slips, nor the two in combination, are "securities" within the meaning of the section referred to. Nor are they "instrumentalities" for forging or altering of a type which the statute condemns. The section under which this prosecution is instituted, § 2314 of Title 18 U.S.C.A., must be read in conjunction with § 2311 of the same title, which defines "securities". This is a part of the "Stolen Property Act", in which the codifiers of the Criminal Code of 1948 tried to assemble, in the same place, many of the offenses against property that were scattered through the codes. Hence, § 2314 is a part of Chapter 113 relating to "stolen property", and § 2311 defines various words "as used in this chapter". The phrase "this chapter" includes § 2311 to § 2317 of the same title.

It is a principle of statutory construction that when the Congress does not define an ordinary term, the presumption is that the word is used in the ordinary dictionary sense. National Labor Relations Board v. Coca-Cola Co., 1956, 350 U.S. 264, 268-269, 76 S.Ct. 383, 100 L.Ed. 285. When, however, the Congress defines the terms, in a statute, the presumption is that nothing that is not conceivably covered by the specific definitions is included. See Yates v. United States, 1957, 354 U.S. 298, 304-313, 77 S.Ct. 1064, 1 L.Ed. 2d 1356. Rightly. For otherwise the Congress would not have enumerated the various matters included. In the matter before us, the Congress named every possible instrument that in the commercial world is called a "security". They then added this clause:

"* * * or, in general, any instrument commonly known as a `security' or any certificate of interest or participation in, temporary or interim certificate for, receipt for, warrant, or right to subscribe to or purchase any of the foregoing."

Webster's Unabridged Dictionary gives as Definition 3 of "security",

"Something given, deposed, or pledged, to make secure, or certain, the fulfillment of an obligation, the payment of a debt, etc.; property given or serving to render secure the enjoyment or enforcement of a right; surety; pledge; as, the security is poor. b One who becomes surety for another, or engages himself for the performance of another's obligation; a surety."

In other words, what we have here is the common acceptation of the word, that is, something which is a promise to pay, like a check, promissory note, or the like.

Definition 4, as given in Webster's Unabridged Dictionary, is

"An evidence of debt or of property, as a bond, stock certificate, or other instrument, etc.; a document giving the holder the right to demand and receive property not in his possession. Securities are: Personal, giving a claim against a particular person; * * *" (p. 2263)

A credit card is nothing more than a means of identification which tells the merchant that the holder is entitled to charge merchandise and will pay for it when a bill is presented, usually at the end of the month. If the holder does not pay when a bill is presented and suit ensues, sued for non-payment, the action would have to be as for a debt, on an open book account. So when the Congress used the word "security" it meant what we commonly call a "security", a pledge, a promise, like a promissory note, or the like.

The Supreme Court has told us that the object of this statute is to prevent fraud, but the Court has not re-defined "securities". United States v. Sheridan, 1946, 329 U.S. 379, 382-384, 67 S. Ct. 332, 91 L.Ed. 359; Pereira v. United States, 1954, 347 U.S. 1, 9-10, 74 S.Ct. 358, 98 L.Ed. 435. So we are back to the definition in the statute.

A case from the Second Circuit is very persuasive in delimiting the scope of "security" in the section before us. In United States v. Brown, 2 Cir., 1957, 246 F.2d 541, a person executed certain drafts, payable to the defendant, which could not be cashed, except upon proof that the merchandise in payment for which they were given had actually been delivered. The merchandise was not delivered. The defendant forged all the supporting documents, including the bill of lading, and the certificate of insurance on the shipment. These he took to a Mexican bank, which cashed the drafts. The bank then sent the documents to the New York bank only to find that, while the money had been obtained by means of this genuine instrument, the supporting documents showing delivery of the merchandise had been falsified fraudulently. The defendant was found guilty. The Appellate Court reversed, saying:

"The phrase `falsely made' as used in the statute relates to the execution of what is defined in Section 2311 of the same title to be a security rather than to whether its content be true or false. * * * As was said in Pines v. United States, 8 Cir., 123 F.2d 825, 828, `To "falsely make" is a crime not of changing or forming an instrument to resemble an existing genuine instrument or to represent that it is the act of a genuine and existing obligor, but rather to make an instrument which

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