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District Court of Appeal, Third District, California.


Crim. 2500.

Decided: June 22, 1954

J. Everett Barr, Yreka, for appellant. Edmund G. Brown, Atty. Gen., Doris H. Maier, Frederick G. Girard, Deputies Attys. Gen., for respondent.

Appellant had been convicted of a violation of Penal Code Section 476a issuing a check without sufficient funds or credit and with intent to defraud. From the order denying his motion for a new trial and from the judgment he appeals.

Appellant admits the making and nonpayment of the check, but contends that the evidence was insufficient to sustain the jury's implied finding of fraudulent intent on his part, that the court erred in rejecting certain testimony and that the district attorney was guilty of misconduct in his argument to the jury. We shall treat of these contentions in order.

A summary of the evidence which, in the main, is not in conflict, shows that on September 30, 1950, defendant issued a check to the complaining witness, Pierre Mendiboure, in the sum of $1,000 as part payment on the purchase of certain cattle. The check was drawn on appellant's commercial account in a Healdsburg bank and was paid when presented. On October 5th appellant agreed to resell the cattle to one Lucas, the manager of a ranch near Healdsburg. Both Lucas and defendant testified that on that day they went to the Healdsburg bank and gave to the manager a check drawn by Lucas in favor of defendant in the sum of $8,000 with instructions that it subsequently was to be deposited to appellant's account for the purpose of covering a final payment check to be given to Mendiboure. This check was held in the bank undeposited until October 10th. Appellant's bookkeeper testified that on that date he went to the bank with a second check in the sum of $5,566 given him by Lucas in payment of the balance due appellant for the cattle purchased by Lucas; and that he then deposited both checks to appellant's account. In the interim and on Saturday, October 7th, appellant took delivery of the cattle from Mendiboure and gave him a final payment check for the sum of $11,260 drawn on appellant's account in the Healdsburg bank. It is this check which forms the basis of the present complaint. When it was presented for payment at the bank on October 14th it was dishonored due to insufficient funds. In the main this insufficiency was caused by the prior presentation of two other checks which appellant had drawn and which totaled more than $10,000. Appellant's bank statement was introduced in evidence and it appeared that the only time during the month of October when there were sufficient funds in appellant's account to pay his check to Mendiboure was on the 10th when, after deposit of both the Lucas checks, the balance in the account amounted to $13,572.30. The record shows that the information charging appellant with felonious issuing of the Mendiboure check was not filed until more than two and a half years after the check had been dishonored and that in the meantime appellant has paid Mendiboure $3,000 to apply against the amount appellant owed him and had delivered to him the pink slips from a number of motor vehicles which, however, for some unexplained reason Mendiboure did not attempt to capitalize. The foregoing testimony concerning the arrangements made at the bank when the first Lucas check was given to the bank manager was introduced by appellant after the People had rested.

Section 476a of the Penal Code provides that any person who wilfully with intent to defraud delivers any check for the payment of money, knowing at the time that he has not sufficient funds in or credit with the bank on which the check is drawn for the payment thereof on presentation is punishable by imprisonment in the county jail or in the State prison. The essentials of proof, therefore, are: The issuance of the check with knowledge that it is issued without funds or credit in the bank to meet it and with fraudulent intent. When the People had introduced evidence that appellant had issued his check without a sufficient balance to cover it and without having credit with the bank, that he had obtained the cattle of Mendiboure by delivering that check to him, and that the check had been dishonored, a prima facie case against appellant had been made out, for the element of fraudulent intent could be inferred from that evidence. The discussions at the bank between appellant Lucas and the bank manager regarding the use of the Lucas check to meet the anticipated draft in favor of Mendiboure did not amount to an arrangement of credit with the bank within the meaning of the statute, for the statute expressly defines credit as therein used as meaning an arrangement or understanding with the bank for the payment of the check. Of course, whether the jury would draw the inference of fraud was for the jury to decide after the case was submitted to them and their conclusion upon the issue of fraudulent intent would be based not only upon the evidence we have related as being introduced by the People, but also upon whatever additional pertinent evidence might be received bearing on the issue.

Appellant sought to meet the State's case not by proof that he had not drawn the check without funds or credit or that it had not been dishonored when presented, but by showing that when he issued the check he had not done so with the requisite fraudulent intent; and he argues here that he conclusively proved the absence of such intent by the testimony he introduced. That testimony was most persuasive. It consists of the testimony of himself, Lucas and his bookkeeper about the conversation with the bank manager concerning the holding of the first Lucas check by the bank manager until the bookkeeper came in with the second Lucas check and deposited both. The action on the part of the bank manager was exactly in accordance with the arrangements which appellant and Lucas testified they made with the bank. The effect of this testimony is not lessened by that of the bank manager that he could not so long after the transactions took place remember that conversation nor how he had handled the checks. He said it could well have been as testified to by appellant's witnesses. Appellant argues that his rebuttal evidence was such as to bar the jury as a matter of law from inferring fraudulent intent. This contention cannot be sustained. On this subject matter the Supreme Court in Blank v. Coffin, 20 Cal.2d 457, 460, 126 P.2d 868, 870, spoke as follows:

‘An inference is a conclusion as to the existence of a material fact that a jury may properly draw from the existence of certain primary facts. [The material fact we are here concerned with is fraudulent intent.] * * * If a jury can reasonably infer from these primary facts that the material fact exists, the party has introduced sufficient evidence to entitle him to have the jury decide the issue. The jury is not compelled to draw the inference, however, even in the absence of contrary evidence and may refuse to do so. Whether a particular inference can be drawn from certain evidence is a question of law, but whether the inference shall be drawn, in any given case, is a question of fact for the jury. * * *

‘Usually, the opposing party introduces evidence as to the nonexistence of the fact in issue, and the jury must then determine the existence of nonexistence of the fact from all the evidence before it. If the evidence contrary to the existence of the fact is clear, positive, uncontradicted, and of such a nature that it can not rationally be disbelieved, the court must instruct the jury that the nonexistence of the fact has has been established as a matter of law. * * * The jury, however, is the sole judge of the credibility of the witnesses * * * and is free to disbelieve them even though they are uncontradicted if there is any rational ground for doing so. * * * In most cases, therefore, the jury is free to disbelieve the evidence as to the nonexistence of the fact and to find that it does exist on the basis of the inference.’

The argument of appellant, therefore, is that the testimony of the witnesses on which he relies was such as to establish the nonexistence of fraudulent intent as a matter of law. But if we apply the usual tests we think it cannot be said that appellant's evidence can be so evaluated. Appellant himself was, of course, a vitally interested witness and his bookkeeper might also fairly have been considered to be interested in his behalf. Even Mr. Lucas could have been thought by the jury to have wanted to establish his good faith as the purchaser of the Mendiboure cattle. All three men were testifying after the lapse of about three years of time. Finally, if the testimony of all three be accepted, it does no more than furnish in turn the foundation for an inference of good faith on the part of appellant when he issued the Mendiboure check. Opposed to the drawing of this inference are the facts shown by the People's witnesses, plus the depletion of appellant's bank account by two other checks with no explanation by appellant as to when they were drawn, what was the consideration, or why adequate deposits were not made for their payment without depleting the balance built up for the claimed purpose of honoring the Mendiboure check. As to when these checks were drawn appellant himself said he could not remember. The checks were not produced. They would, of course, under the normal course of business, have been returned to appellant and he tendered no explanation as to where they were. On the whole he appears to have been either quite forgetful or deliberately evasive as to the time, circumstances, consideration and the like, attendant upon the issuance of these two checks which depleted his account to the point where the Mendiboure check went unpaid. It was for the jury to determine in this case whether to infer fraudulent intent on the one hand or good faith on the other. They found that fraudulent intent existed and that finding is supported by the record.

While appellant's bookkeeper was on the stand appellant sought to elicit testimony from him as to the status of appellant's business as reflected by his books of account. After showing that the books were kept in the regular course of business by the witness or others acting under him, this question was asked: ‘Q. Mr. Smith, from an examination of that record are you able to tell us what the accounts receivable were * * * in the month of July [1950]?’ Objection was made that the offered testimony was not relevant and appellant's counsel replied that since the issue of intent to defraud was in the case he wished to show the condition of appellant's business prior to the issuance of the check as negativing a wrongful intent. The court said: ‘I think you are wrong on the nature of the charge ‘without having made arrangements or credit for it being paid’. If it is necessary I think we will take a short recess. I, personally, don't see the materiality.' Counsel for the appellant replied: ‘We will not press the issue, if Your Honor please; may I proceed? The Court: Yes.’ Respondent points out that the court did not rule out the testimony sought to be introduced. On the contrary, says respondent, the appellant voluntarily abandoned his course. These observations are pertinent, but even if it be assumed that the court refused to allow the situation shown by appellant's books to be proven there was no showing by offer of proof or otherwise as to what that situation was. The question objected to was asked as to entries in the books as of July, some three months before the Mendiboure check was issued. We cannot say from the record that even as of that remote date the condition of appellant's business would have been shown to be such as to materially affect the issue of intent. Error in respect to that contention has not been shown.

During the argument the district attorney referred to checks which he indicated or asserted appellant had drawn in favor of the Modoc Auction Yard, which checks, arriving in the bank prior to the Mendiboure check, depleted appellant's account. Appellant urges that there was no evidence to show that appellant had written checks to the Modoc Yard. This contention is not borne out by the record. Appellant, upon cross-examination, said that he had issued a check for $3,701 at the ‘Modoc Sales Yard’ and appellant's bank account showed that a check in that size had been paid and debited to appellant's account. Again, when asked if he recalled issuing a check to the Modoc Yard in the amount of $6,670.25 appellant's reply was that he did not remember that date, but believed the date was sometime in October. He was then asked: ‘Q. And this was in the amount of $6,670.25, you remember the amount? A. I don't remember the exact amount, but I believe that is pretty close. Q. You state you think you issued that to the Modoc yard a week after you gave the check to Mr. Mendiboure? A. I believe that's right, I am not sure.’ There was other testimony by appellant with reference to these two checks and to their being made payable to the Modoc Auction Yard sufficient to rob the charge of misconduct on the part of the district attorney in argument of any validity.

In his closing brief, for the first time appellant advances the contention that the court should have instructed the jury as to the meaning of specific intent. In support of this contention appellant refers to an instruction given by the court as follows:

‘In the case of certain crimes it is necessary that in addition to the intended act which characterized the offense the act must be accompanied by a specific or particular intent without which such a crime may not be committed. The crime charged in this case is such a crime and before you can find the defendant guilty a specific intent to defraud must be proved to have existed in the mind of the defendant at the time the check was made, drawn, uttered, or delivered.’

Appellant says that the term ‘specific intent’ has a definite and precise legal meaning and that the court ought, therefore, to have defined the words. We think the court did sufficiently define the words as meaning ‘a specific intent to defraud’, which definition followed the use of the term ‘specific intent’ in the same instruction. The instruction given followed one in which the crime charged was defined as including the element of intent to defraud. Under these circumstances we think the instructions are not subject to the criticism directed at them.

The judgment and the order appealed from are affirmed. This Court, by order heretofore made, granted bail to appellant pending appeal. It is ordered that upon the going down of the remittitur appellant surrender himself to the Sheriff of the County of Lassen to abide the further orders of the trial court.

VAN DYKE, Presiding Justice.

PEEK and SCHOTTKY, JJ., concur.

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