PEOPLE v. BAILEY (1960)

The People appeal from and order granting the defendant's motion for a new trial (Pen.Code, § 1238, subd. 3). The defendant, Helen Bailey, and Edward J. Connery were charged by information with the theft of $3,064 of welfare funds of the County of Santa Clara. The jury returned a verdict of not guilty as to Mr. Connery but was unable to reach a verdict as to the defendant and was discharged. On the retrial of the defendant, the jury returned a verdict of guilty. Thereafter, the trial court granted defendant's motion for a new trial because it concluded that there was no basis for a criminal prosecution, and because of certain errors in the instructions to the jury.

On sppeal, it is argued that: 1) The trial court's order of a new trial was based on the erroneous legal conclusion that the defendant could not be guilty under the facts as shown. 2) The defendant was charged with obtaining property under false pretenses and the verdict should stand regardless of the validity of the regulations of the Department of Social Welfare. 3) The defendant cannot raise the issue of the validity of the regulations. 4) The regulations of the Department of Social Welfare were valid.

The facts are not in dispute. The defendant, Helen Bailey, during the relevant period of time from July 1, 1956, to December 11, 1957, had two minor children who were entitled to receive aid under the Aid to Needy Children Program (Welf. & Inst.Code, §§ 1500 et seq.). From July 1, 1956, to December 11, 1957, the defendant collected $3,064 from the Welfare Department of Santa Clara County. On June 6, 1956, the defendant wrote to the social worker in charge of her case that she was moving and that she had arranged to rent a room in her new home to ‘this fellow I go with’ for $15 a month. On March 18, 1957, the social worker visited the defendant ant at her new home at 22780 Permanente Road, Cupertino, California, and told the defendant that the county had received a complaint that a man was living in the house. The defendant admitteed that Mr. Connery was living in the home as a renter. The social worker explained to the defendant that if Mr. Connery remained in the home, it would be considered ‘a stepfather case’ and this would have to be taken into consideration in order to determine the defendant's continued eligibility for aid. On March 26, 1957, the defendant wrote a letter to the social worker stating that Mr. Connery would move out shortly. On April 3, 1957, the social worker telephoned the defendant to check on this matter. The defendant told her that ‘he had left.’

The uncontroverted evidence showed that during the period charged, Mr. Connery lived in the home and that he and the defendant deported themselves as husband and wife. Mr. Connery was employed and earned a gross pay of $11,008.37. Mr. Connery identified the defendant as Helen Connery on a life insurance policy and listed her and the two children as his stepchildren with his employer. The defendant and Mr. Connery purchased the house on Permanente Road as ‘E. J. Connery & Ellen M. Connery, his wife, as joint tenants.’ They bought a new car and registered it as Edward J. and Helen F. Connery. They also purchased a freezer and vacationed together in Mexico.

The social worker testified that if she had known that Mr. Connery was in the home, that he and the defendant were deporting themselves as man and wife, and that he had an income of $11,000, she would not have authorized payment of aid to the defendant under the following regulation of the State Board of Social Welfare:

‘Where a man (who is not the father of the aided child) and the mother of the aided child are deporting themselves as man and wife there is a presumption that the man and the mother are married, and that the man is the stepfather of the aided child.

‘The presumption and evidence of conduct are sufficient to establish the existence of marriage and the stepfather relationship for purposes of ANC even though the parties in applying for aid deny that they are married. A man and woman deport themselves as man and wife if they live together in a stable family relationship over a reasonable period of time, having represented themselves to the community as man and wife such as by maintaining joint back accounts or credit accounts, or have made statements to friends, neighbors, etc., that they are man and wife. The man or the mother may refute the presumption of marriage by sufficient evidence.’ (Dept. of Soc.Wel., Manual of Pol. & Proc., former Reg. C–364.*

The State Board of Social Welfare is required to make rules and regulations for the administration of ANC and other programs. (Welf. & Inst.Code, §§ 114, 1560.) The above regulation was made pursuant to section 1508 of the Welfare & Institutions Code, which reads as follows:

‘Where a needy child as defined in this chapter lives with his mother and stepfather , the amount of the grant made pursuant to Section 1511 of this code shall be computed after consideration is given to the income of the stepfather. The county granting aid shall determine if the stepfather is able to support the child either wholly or in part. Said determination shall be based upon a standard which takes into account the stepfather's income and expenses under regulations set forth by the State Board of Social Welfare.

‘Notwithstanding the provisions of Section 209 of the Civil Code a stepfather is bound to support, if able to do so, his wife's children if without support from such stepfather they would be needy children eligible for aid under this chapter. However, such liability for support shall not exceed the wife's community property interest in his income.

‘A natural father is not relieved of any legal obligation to support his children by the liability for their support imposed upon their stepfather by this section. (Added Stats.1951, c. 1349, p. 3256, § 1, as amended Stats.1953, c. 1182, p. 2678, § 1; Stats.1955, c. 1681, p. 3068, § 8.)’

The trial court granted defendant's motion for a new trial because it had concluded that there was no basis for a criminal prosecution under the facts of the instant case, and as a result concluded that certain instructions based on the above quoted regulation (People's Instructions Nos. 15 and 16), as well as an instruction on the intent to defraud based on CALJIC 426 were erroneous. The trial court said:

‘* * * Certainly where there is no obligation, as far as the man is concerned, to take care of the children, I can't see where there's any basis for a criminal prosecution. Even assuming that he lived under the same roof, and even assuming that he had money to spend and he did spend money on her, if he has no obligation whatsoever to support those children, they could still be needy, and, another thing, that as far as the Welfare Department is concerned, if your position was correct, I mentioned this before, and I mention it again, I can't get away from the fact that she's still on relief.’

The determination of a motion for a new trial rests so completely within the trial court's discretion that its action will not be disturbed unless a manifest and unmistakable abuse of discretion clearly appears, and the order will be affirmed if it may be sustained on any ground, although the reviewing court might have ruled differently in the first instance. Shaw v. Pacific Greyhound Lines, 50 Cal.2d 153, 159, 323 P.2d 391. The presumptions on appeal are in favor of the order and review is limited to the inquiry whether there was any support for the trial court's ruling (3 Witkin, Cal.Proc., p. 2054, § 10(d).) The State argues that this is one of the rare instances of an abuse of discretion, as the court erred on a point of law, namely, that under the facts, there was no basis for a criminal prosecution. The State also argues that in reaching this conclusion, the trial court erroneously considered the State Department of Social Welfare regulation quoted above, which regulation, as well as the instructions based on it, according to the State, are all irrelevant here. We cannot agree.

Under the circumstances of this case, whether or not the defendant can be charged with a criminal defense hinges on both the validity of the regulation and its application in this case. Neither the validity of the State Department of Social Welfare regulation which places on any man living in the home the same responsibilities as a stepfather has, nor the validity of section 1508 of the Welfare & Institutions Code on which the regulation is based, have been construed by an appellate court.^** People v. Neal, 4 Crim. 1277, filed July 1, 1960, is not here in point because there the evidence clearly showed that the defendant misrepresented her financial status in that she was receiving money from the man living with her. We are not unaware of the difficult history of this particular provision of section 1508 (see 42 Cal.L.Rev., pp. 458, 478–485) nor of the many peculiar and difficult problems presented to the State Department of Social Welfare in the fair administration of ANC and other programs. (42 Cal.L.Rev., pp. 458–485; 45 Cal.L.Rev., pp. 241–303; 46 Cal.L.Rev., pp. 331–375.) However, the department is required to ‘establish rules and regulations, not in conflict with law.’ (Welf. & Inst.Code, § 114(b).) (Emphasis supplied.)

The Aid to Needy Children Program is established by sections 1500 et seq. of the Welfare & Institutions Code in coordination with the federal program. Merced County v. Dept. of Social Welfare, 148 Cal.App.2d 540, 541, 307 P.2d 46. There is no question that the defendant was entitled to aid for her two minor children under these provisions. Section 1507 provides that the provisions of the Aid to Needy Children Program are to be liberally construed to effect its stated objects and purposes. One of the objects of this legislation is to keep needy children in the family group whenever possible (§ 1503). As indicated above, section 1508 provides that a stepfather is bound to support, if able to do so, his wife's children, if without support from such stepfather they would be needy children. The ceiling placed on his obligation does not exceed the wife's community property interest in his income. A step-father is defined as ‘the husband of one's mother by virtue of a marriage subsequent to that of which the person spoken of is the offspring.’ (Black's Law Dictionary (4th ed.) p. 1584); or the ‘husband of one's mother by a subsequent marriage’ (Webster's New Collegiate Dictionary (2nd ed.) 1959, p. 830). It is uncontroverted that Mr. Connery was not the husband of the defendant. Therefore, he could not be the ‘stepfather’ of her children within any accepted meaning of the term. The effect of the application of the Welfare Department's regulation to the instant case, was to put Mr. Connery, the person acting as a spouse, in the same position as if he were legally married to the defendant and thereby the stepfather of her children. From the application of the regulation in this manner, it followed that she was not entitled to the benefits she had received and, therefore, the State argues, she could properly be found guilty of the criminal offense charged.

Section 55 of the Civil Code of this state provides: ‘* * * Consent alone will not constitute marriage; it must be followed by the issuance of a license and solemnization as authorized by this code * * *.’ Since the 1895 amendment to this section, it has been held that there is no common law marriage in this state. Norman v. Thomson, 121 Cal. 620, 54 P. 143, 42 L.R.A. 343; In re Estate of Elliott, 165 Cal. 339, 132 P. 439; Temescal Rock Co. v. Industrial Acc. Comm., 180 Cal. 637, 182 P. 447, 13 A.L.R. 683. The State Department of Social Welfare cannot alter the legal relations and responsibilities by its regulation. As we have already pointed out, the code specifically provides that its rules and regulations shall not be in conflict with the law. (See Welf. & Inst.Code, § 114(b), quoted above.)

At times, the particular problems and needs of the welfare program require a change in the law. If so, this must be done by legislation, not administrative regulation. For example, section 209 of the Civil Code provides that a husband is not bound to support his wife's children by a former husband. When section 1508 of the Welfare & Institutions Code was enacted, to make stepfathers liable for the support of the wife's children of a former marriage, this departure was clearly indicated. (See Welf & Inst.Code, § 1508 quoted above.)

The State argues that the regulation is based on section 1963 of the Code of Civil Procedure which creates a disputable presumption: ‘That a man and woman deporting themselves as husband and wife have entered into a lawful contract of marriage.’ The difficulty with this argument is that in the instant case, such presumption was admittedly rebutted. The defendant told the social worker that she was not married to Mr. Connery and the social worker acted on this presumption.

It is a weel recognized maxim of the law that what cannot be done indirectly cannot be done directly. The State Board of Social Welfare cannot create common law marriage in the absence of express statutory provisions; neither, could it by regulation in the instant case, create a stepfather.

The State further argues, however, that the invalidity of the regulation is an irrelevant issue in this case, as the defendant was properly charged with obtaining property under false pretenses, and that as a person who was cheating the county, she cannot raise the issue. As indicated above, however, this argument is devoid of merit as whether or not the defendant could properly be charged with a criminal offense depended on whether or not the regulation was valid and validly applied to the defendant to determine her eligibility. The State relies on United States v. Kapp, 1937, 302 U.S. 214, 58 S.Ct. 182, 82 L.Ed. 205. In that case, the defendant was charged with misrepresenting the identity of hog producers in order to obtain benefits under the Agricultural Adjustment Act, 7 U.S.C.A. § 601 et seq. The defendant argued that the misrepresentation as to the source of the hogs ceased to be a material fact when the Agricultural Adjustment Act was held void. The Supreme Court said at pages 217 and 218 of 302 U.S., at page 184 of 58 S.Ct.:

‘Such a construction is inadmissible. It might as well be said that one could embezzle moneys in the United States Treasury with impunity if it turns out that they were collected in the course of invalid transactions. See Madden v. United States, (C.C.A.) 80 F.2d 672, 674. Appellees were not indicted for a conspiracy to violate the Agricultural Adjustment Act but for a conspiracy to violate the statute protecting the United States against frauds. It is cheating the government at which the statute aims and Congress was entitled to protect the government against those who would swindle it regardless of questions of constitutional authority as to the operations that the government is conducting. Such questions cannot be raised by those who make false claims against the government. See Langer v. United States, (C.C.A.) 76 F.2d 817, 824, 825; Madden v. United States, supra; United States v. Harding, 65 App.D.C. 161, 81 F.2d 563, 568; United States v. MacDonald, (D.C.) 10 F.Supp. 948.’

It is clear, however, that in the Kapp case, the defendant would not have been entitled to the benefits claimed, regardless of the constitutionality of the A.A.A. In the instant case, defendant's relationship with Mr. Connery could not in the absence of a statute so providing, be considered material in determining her eligibility to benefits under the Welfare & Institutions Code.

Furthermore, under the Federal False Claims Statute (then 35 Stats. 1095, as amended 40 Stats. 1015), under which the defendant was prosecuted, the mere making of a false application is a criminal offense, regardless of the result. For example, in United States v. Schneider, D.C.E.D.Wis.1942, 45 F.Supp. 848, the defendant was charged with making a false application for work relief under the Federal Emergency Relief Appropriation Act of 1941, in that he concealed the fact that he was a communist. As the court ruled the non-communist requirement inoperative, the defendant's misrepresentation did not affect his eligibility. He was, however, found guilty of a criminal offense under the Federal False Claims Statute, 62 Stats. 749 (1948), 18 U.S.C. § 1001 (1952).

The State also relies on People v. Howard, 135 Cal. 266, 67 P. 148, which is equally distinguishable. In that case, the defendant brought approximately twelve thousand squirrel tails from Alameda County to Tulare County, in order to take advantage of a Tulare County ordinance which provided a three-cent bounty for squirrels killed in Tulare County. The defendant's claim was accompanied by an affidavit which stated that the tails were from Tulare County squirrels. A warrant was drawn to pay the claim when it was discovered that the ordinance authorizing payment of the bounty was invalid. The court held that the defendant was guilty of obtaining property under false pretenses even though Tulare County had no legal right to pay the bounty. The court pointed out that the fact that the county had no legal right to pay was irrelevant as the defendant thought they did—and formed the criminal intent to deceive and carried it into execution knowing that if he disclosed the true source of the squirrels, his claim would not be allowed. However, in the instant case, if the true relationship between the defendant and Mr. Connery had been known to the county, the county could not have properly presumed that Mr. Connery was the stepfather and, therefore, legally obligated to support the defendant's children and the defendant remained eligible. Under such circumstances, it cannot be said that the defendant's receipt of ANC funds was caused by her misrepresentation. An individual cannot be guilty of obtaining money by false pretenses if the false statement was not the cause of the fransfer (2 Wharton Criminal Law (12th ed., 1932), § 1441). Reliance is an essential element of the offense. People v. Robertson, 167 Cal.App.2d 571, 334 P.2d 938; People v. Andrews, 165 Cal.App.2d 626, 332 P.2d 408; People v. Krupnick, 165 Cal. 332 P.2d 408; People v. Krupnick, 165 Cal.App.2d 755, 332 P.2d 720. of the defendant, nor are we unaware of the difficulties presented by fact situations like the instant one in the administration of the Aid to Needy Children and other welfare programs. However, as has been pointed out by an eminent authority, the problems presented by the welfare system do not always fit well into accepted legal doctrines. (See 42 Cal.L.Rev., pp. 458–459). This simply is another instance of such a situation. In other jurisdictions, problems of this kind have been met by legislation which specifically authorize the recovery of aid improperly or fraudulently granted. (See statutory provisions collected in 50 N.W.Univ.L.Rev., 739, 751, notes 53 and 54.) Even in other jurisdictions, there are few authorities for prosecutions like the instant case. State v. Wilkerson, 1887, 98 N.C. 696, 3 S.E. 683, simply held that the word ‘person or corporation’ in the code, included a board of county commissioners. In that case, unlike the instant one, the applicant had ceased to be eligible for relief, but a third party, the defendant, continued to draw the monthly benefits. The few remaining cases are based on specific statutory provisions which authorize prosecutions for obtaining assistance by false statements, representation or other fraudulent device. See State v. Becker, 1951, 39 Wash.2d 94, 234 P.2d 897; State v. Allison, 1952, 173 Kan. 107, 244 P.2d 176. Similarly, in order to prevent false claims under the Unemployment Compensation Code, our own legislature enacted section 2101 which reads as follows:

‘It is a misdemeanor to wilfully make a false statement or representation or knowingly fail to disclose a material fact to obtain, increase, reduce, or defeat any benefit or payment under the provisions of this division, whether for the maker or for any other person, or for the purpose of lowering or avoiding any contribution required of the maker or any other person, or to avoid becoming or remaining subject to this act. (Stats. 1953, c. 308, p. 1528, § 2101.)’

In view of the above and more particularly the novelty of the question presented, it is clear that there could not have been an abuse of discretion by the trial court.

Order affirmed with directions to the trial court to take further proceedings not inconsistent with this opinion.

FOOTNOTES

FOOTNOTE.  This is the regulation which was in effect until August 1, 1956, when the following regulation was adopted: ‘Where a man living in the household is assuming the role of spouse to the mother of eligible children, the income for the eligible children shall be determined by the method prescribed for stepfather cases. * * *’ This in turn was superseded by the current regulation, C–155, which reads in part: ‘* * * 2. A man living in the home assuming the role of spouse to the mother of the needy child has the same responsibility as that of a stepfather for the mother and the needy children.’ Regulation 212.62 of the current manual provides that the income of a stepfather or other man in the home assuming the role of spouse to the mother of the eligible children, is to be used in determining his ability to pay.

FOOTNOTE.  The same appears to be true in other jurisdictions. See 50 N.W.Univ.L.Rev., p. 739.

KAUFMAN, Presiding Justice.

DRAPER and SHOEMAKER, JJ., concur.