People v. Poyet

Opinion

WRIGHT, C. J.

Defendant Roger Joseph Poyet was convicted by a jury of issuing a check without sufficient funds, a violation of Penal Code section 476a.1 It was also charged and defendant admitted that he had suffered five prior convictions for violations of the same code section. He appeals from the judgment of conviction on the ground that disclosure to the payee of the present insufficiency of funds is a defense. We agree and reverse.

It is undisputed that on August 13, 1968, defendant paid for automobile repairs at Dixon Wheel Service with a check for $139.13 drawn on the Security First National Bank, Inland Center Branch. The check which he presented the bookkeeper was dated August 15, 1968, and he explained that he did not have sufficient funds in his account at that time, *533but would deposit funds sufficient to cover the check by August 15. She accepted the check on this understanding and did not deposit it until August 14 or 15. The check was returned to the payee by the bank with the notation that the account had been closed.

Prosecution evidence indicates that, defendant opened an account at the Inland Center Branch with a $10 deposit on June 14, 1968. Two $40 deposits were made later in June, but none were made thereafter. By July 5, the bank had dishonored five checks of approximately $600 total face value. At this time the bank closed the account and sent defendant a letter notifying him of its action. The letter was returned marked “unknown.” By August 13, a total of 10 checks with an aggregate face value of approximately $850 had been received and dishonored. The last, and thirty-ninth, check was dishonored by the bank on September 23. The total face value of all dishonored checks drawn on the account of defendant during the period of approximately three months was about $1,400.

Defendant testified that after opening the account he deposited part of his paycheck every week. He was certain that the branch manager would have contacted him personally about any problem with his account. He was only aware that one check given to his landlady had failed to clear, and he denied writing at least some of the checks that had been dishonored. At the time the check for $139.13 was written, defendant thought there was about $60 in his account and he intended to deposit his $95 paycheck on Friday, August 15. When defendant asked for his paycheck on that day, he was advised that his brother had already picked it up. At no time did he notify the payee of the check, Dixon Wheel Service, of this development.

Following the presentation of all evidence at the trial, defendant moved for a directed verdict pursuant to Penal Code section 1118.1. The motion was denied. He then requested an instruction that the disclosure of the present insufficiency of funds was a defense2 to the charge. The instruction was refused by the court, and the subject matter was not covered in other instructions.

Statutes imposing criminal penalties on those who knowingly pass checks with insufficient funds on deposit in or credit with the bank on *534which they are drawn are of two general types: those which do not require an intent to defraud and those which do. Penal Code section 476a is of the latter type.3 While disclosure of present insufficiency of funds is not generally regarded as a defense to statutes not requiring intent to defraud (e.g., State v. Avery (1922) 111 Kan. 588 [207 P. 838, 23 A.L.R. 453]), such disclosure is a defense where fraud is an element. (See cases cited Annot., 35 A.L.R. 375, 383-384; Annots., 43 A.L.R. 49, 50; 95 A.L.R. 486, 494-496.)

In People v. Bercovitz (1912) 163 Cal. 636 [126 P. 479], we joined those jurisdictions holding that the fact alone that a check is postdated is not a defense, but we expressly reserved judgment on whether disclosure of an insufficiency of funds might be a defense.4 In People v. Burnett (1952) 39 Cal.2d 556 [247 P.2d 828], we held that under the particular facts of that case the jury should have been instructed that there can be no conviction under section 476a if the maker informs the payee at the time of delivery that there are insufficient funds to pay the check.5

In neither Burnett nor the two underlying decisions (In re Griffin (1927) 83 Cal.App. 779 [257 P. 458]; People v. Wilkins (1924) 67 Cal.App. 758 [228 P. 367]) was there independent evidence of fraudulent intent. In the instant case, however, there is abundant evidence that defendant did not intend to make the promised deposit. Accordingly, the language in Griffin and Wilkins and in the controlling cases of several of our *535sister jurisdictions (e.g., State v. Ellis (1948) 67 Ariz. 7, 12 [189 P.2d 717]; State v. Bell (1949) 69 Idaho 485, 486 [210 P.2d 392]) indicating that disclosure negates fraudulent intent is potentially misleading if not read in context. Clearly, with disclosure there can be no deception of a present insufficiency of funds. We also agree that mere failure to keep a promise to deposit sufficient funds, standing alone, is not evidence that a check was issued with intent to defraud. It does not follow, however, that such a promise may not have been made with intent to defraud. (Cf. People v. Ashley (1954) 42 Cal.2d 246, 262 [267 P.2d 271].) If the only issue in the case at bench were the sufficiency of the evidence to show an intent to defraud, we would have no difficulty sustaining this conviction.

Only a few courts have directed their attention to the problem raised by a bad faith promise to deposit sufficient funds after disclosure of present insufficiency. In People v. Jacobson (1929) 248 Mich. 639 at pages 642-643 [227 N.W. 781], the court stated: “The false representation, either express or implied incident to the giving of a check, that the maker then has funds on deposit from which the bank will pay the check on presentation, with intent thereby to perpetrate a fraud, is the wrongful conduct for which this statute provides a penalty. It is not possible to thus perpetrate a fraud if the check is given by the maker and accepted by the payee with the latter’s full knowledge that the maker does not then have either a deposit or credit at the bank which will result in payment of the check on presentation. Such knowledge negatives the possibility of the payee being defrauded in the manner penalized by this statute. That he may have been defrauded in some other manner will not sustain a prosecution under this statute. The defendant’s promise to make a deposit on the following day with which to meet this check was no more than a promise to pay on the following day. Notwithstanding under certain circumstances promises made in bad faith as to future conduct may be the basis of a charge of fraud, such is not the offense embodied in this statute.” (See also State v. Zent (1963) 92 Ariz. 334 [376 P.2d 861]; State v. Creachbaum (1970) 24 Ohio App.2d 31 [53 Ohio Ops.2d 117, 263 N.E.2d 675].)

In Hubbard v. Commonwealth (1959) 201 Va. 61 [109 S.E.2d 100], the court stated: “It is undisputed that the defendant drew and uttered the worthless check, knowing at the time that he did not have sufficient funds in, or credit with, the bank on which it was drawn. As we shall presently see, there is sufficient evidence to warrant the finding that he did this with intent to defraud Reynolds Pontiac, the payee of the instrument. But the evidence also shows, and the lower court so found in its opinion dictated from the bench, that the check was not given for a *536‘present consideration,’ and that there would be some delay in its payment. Indeed, it is clear from Reynolds’ testimony that he knew when he received the check that it was not then collectible and would not be ‘good’ until the defendant had made further arrangements with the bank on which it was drawn.

“ ‘The general rule is that the making and delivery of a check amounts to a representation that the check is good and that a representation extrinsic to the check itself is not a necessary element of an offense under worthless check acts.’ 22 Am. Jur., False Pretenses, § 64, p. 477. Indeed, Code, § 6-129, in terms, dispenses with the proof of such ‘express representation.’ . . .

“Conversely, it is universally held that where, as here, at the time the check is drawn or delivered to' him, the payee has knowledge, or an understanding, that it is not then good or collectible, the offense prohibited by statutes of this character has not been committed. [Citations.] This is so because there is then no false representation that the check is good, which is a necessary element of the offense at which the statute is directed.” (201 Va. at pp. 64-65.)

We agree with the foregoing analyses. Penal Code section 476a, as similar statutes elsewhere, is directed at the specific representation, implicit in the making, drawing, uttering, or delivering of a check or draft, that at the time of making, drawing, uttering, or delivery the maker then has sufficient funds in or credit with the bank for payment of that check or draft and all other checks or drafts then outstanding. With disclosure of the insufficiency, the essential underlying misrepresentation no longer exists and the crime cannot be committed. No matter how fraudulent the promise to make a deposit sufficient to cover the check, disclosure of the present insufficiency of funds precludes conviction under this section.

We are not unmindful that it has been suggested negotiation of a check does not necessarily represent that there are currently sufficient funds in the bank but only that in the ordinary course of business the, check will be honored upon presentation. (People v. Rubin (1963) 223 Cal.App.2d 825, 834 [36 Cal.Rptr. 167, 9 A.L.R.3d 707]; People v. Griffith (1953) 120 Cal.App.2d 873, 880 [262 P.2d 355].) Those cases held that where the maker had a reasonable expectation that in the ordinary course of business there would be sufficient funds or credit with the bank, there was no intent to defraud even though the present insufficiency of funds was not disclosed. Without questioning the validity of their precise holdings, we disapprove of the language in Rubin and Griffith to the extent that it is inconsistent with our decision today.

*537The People concede that the present insufficiency of funds was disclosed to the payee. Thus, the evidence to support a conviction was insufficient as a matter of law. Accordingly, the trial court should have granted an acquittal on its own motion under Penal Code section 1118.1 at the completion of the prosecution’s case. Clearly, denial of the defendant’s motion for a directed verdict was improper. Had there been any dispute in the evidence as to whether there had been, a disclosure of the insufficiency of funds, the requested instruction, though ungrammatical, would have been proper and should have been given in substance.

We do not condone defendant’s conduct nor do we feel that it was lawful. “[A] promise made without intention to perform is a misrepresentation of a state of mind, and thus a misrepresentation of existing fact, and is a false pretense within the meaning of section 484 of the Penal Code.” (People v. Ashley, supra, 42 Cal.2d 246, 262.) In Ashley, we did caution against applying section 484 to ordinary commercial defaults. The evidence here, however, is more than sufficient to show that the failure to keep the promise was not merely a commercial default and that a conviction could have been sustained upon a proper charge under Penal Code section 484.6

Since proceedings on a correct charge may not now be commenced (Pen. Code, § 800), we need not reach the remaining contentions on appeal. The judgment is reversed.

Peters, J., Tobriner, J., Mosk, J., and Sullivan, J., concurred.

Defendant was acquitted of two counts of forgery.

The requested instruction provides: “You are instructed that if you find the defendant informed the payee at the time of delivery that there were insufficient funds on deposit to pay the check and the payee consented to accept the check, you must return a verdict of not guilty to the charge of violation of section 476a, regardless of the fact the defendant may have subsequently failed to carry out a promise to subsequently deposit such funds."

“(a) Any person who for himself or as the agent or representative of another or as an officer of a corporation, willfully, with intent to defraud, makes or draws or utters or delivers any check, or draft or order upon any bank or depositary, or person, or firm, or corporation, for the payment of money, knowing at the time of such making, drawing, uttering or delivering that the maker or drawer or the corporation has not sufficient funds in, or credit with said bank or depositary, or person, or firm, or corporation, for the payment of such check, draft or order and all other checks, drafts or orders upon such funds then outstanding, in full upon its presentation, although no express representation is made with reference thereto, is punishable by imprisonment in the county jail for not more than one year, or in the state prison for not more than 14 years.

“(d) The word ‘credit’ as used herein shall be construed to mean an arrangement or undertaking with the bank or depositary or person or firm or corporation for the payment of such check, draft or order. it

(Italics added.)

In Bercovitz the evidence indicated the payee was unaware the check was postdated from Saturday to the following Monday. There was also apparently an express false representation that the maker had sufficient funds on deposit to cover the check. We declined to determine whether a postdated check was properly categorized as a check or a draft since both are covered by section 476a. Similarly, we need not reach the issue in the instant case.

In Burnett the jury asked whether disclosure would be a defense. The trial judge replied in the negative.

Penal Code section 484 defines theft and includes within such definition the following: “(a) Every person . . . who shall knowingly and designedly, by any false or fraudulent representation or pretense, defraud any other person of money, labor or real or personal property, ... is guilty of theft. . . .”