Defendant was convicted of three counts of larceny by conversion, MCL 750.362; MSA 28.594, as a result of his use of progress payments, made by complainants for modular homes erected by defendant’s company.
Defendant owned and operated Washtenaw Active Homes, Inc., which sold and erected modular or prefabricated homes. Washtenaw Active Homes purchased the modular homes from the manufacturer, Active Homes of Marlette, and then sold the homes to purchasers who qualified for financing by the Farmers Home Administration.
Each of the three complainants entered into sales agreements and construction contracts with defendant’s company after qualifying for FHA financing. Under the FHA program, a bank account containing the loan money was set up by the FHA and the complainants were given a checkbook. Each check required the signatures of the complainants and of Mr. Kominek of the FHA.
Under the terms of the construction contract, partial payments not to exceed 60% of the value of the work in place were to be made to defendant as he required them. Defendant would submit a statement to the purchaser listing the amount owed for materials and labor. The purchaser, if satisfied that the work was done, would make out a check for up to 60% of the bill and forward it to Kominek. Kominek would then inspect the property to insure that the work listed on the bill was done, at his option, request a waiver of lien, and cosign the check.
During the course of constructing complainants’ houses and after certain progress payments had been made, defendant ceased work on the houses because he was experiencing financial difficulties. *86He subsequently filed for bankruptcy and was adjudicated bankrupt. Because certain progress payments of complainants had not been specifically forwarded to Active Homes of Marlette, but rather had been used to pay other debts, the defendant was charged with larceny by Conversion of these progress payments.1
The sole issue on appeal is whether the trial court properly denied defendant’s motion for directed verdict in which defendant contended that he was not guilty of larceny by conversion as a matter of law.
Larceny by conversion is "one of the crimes provided by statute law to occupy the no-man’s land surrounding the offenses against property at common law”. People v Doe, alias Meyer, 264 Mich 475; 250 NW 270 (1933).2 The purpose of the larceny by conversion statute is to cover one of the situations left unaccounted for by common-law larceny, that is, where a person obtains possession of another’s property with lawful intent, but subsequently converts the other’s property to his own use.3
*87As with common-law larceny, larceny by conversion is a crime against possession and not against title; one cannot convert his own funds. People v Martin, 116 Mich 446; 74 NW 653 (1898); People v Long, 409 Mich 346; 294 NW2d 197 (1980). Thus, if an owner intends to part with title as well as possession, there can be no crime of larceny.4
In the instant case, it must first be determined whether title as well as possession of the progress payments passed to defendant. Under the terms of the construction contract, defendant was entitled to progress payments for up to 60% of the value of work in place. The borrower was charged under the contract with the responsibility of making on-site development inspections as the work progressed. Another clause of the contract provided that acceptance of completed work and payment by the owner to the contractor did not relieve the contractor of his obligation to the owner to discharge any and all liens for the benefit of subcontractors, materialmen or any other laborers.
At trial, complainants did not testify that the items listed on defendant’s statements, approved by them and approved by Kominek, were not properly payable as work in place. There is no testimony that there was not sufficient work in place, as listed on defendant’s statements, to justify the amount of the progress payments.
Although the FHA provided Active Homes of Marlette with a letter of commitment requiring it to remit sums directly to Active Homes of Marlette, the payments were made to defendant. There *88is no testimony that defendant represented that the checks would go directly to Active Homes of Marlette rather than Washtenaw Active Homes. Moreover, defendant is not charged with conversion of funds belonging to Active Homes of Marlette. See People v Bayer, 352 Mich 564; 90 NW2d 656 (1958).
Of the three progress payment checks involved here, and the waivers of lien accompanying them, two were made out to Washtenaw Active Homes and only one was made out to "Active Homes”. Although Kominek may have been acting under the misconception that Washtenaw Active Homes was an agent of Active Homes of Marlette, it is clear from Kominek’s testimony that this misconception was never conveyed to Kominek by defendant. In any event, there is no testimony that the complainants misunderstood the status of defendant’s company vis-á-vis Active Homes of Marlette. They knew that payments were being made to Washtenaw Active Homes and there is no evidence that complainants intended to retain any title to the progress payments.
Thus, we conclude that title and possession of the progress payments passed to defendant and, accordingly, there can be no crime of larceny by conversion on these facts.
Even if we were to accept the argument that defendant was not the intended owner of the progress payments and that he was merely a trustee of the funds,5 we do not find that the element of conversion has been established. The prosecutor contends that conversion is established by the fact that the complainants gave the money to defendant for a specific purpose, i.e., to pay for *89the home or for site preparation, but defendant did not use it for that purpose.6
In People v Bayer, supra, in reversing defendant’s conviction of larceny by conversion, this Court stated:
"More applicable to our present case is the holding of this Court in a civil action alleging tortious conversion of funds:
" 'It should be noted that defendant was not required to deliver to plaintiff the specific or identical moneys which he collected for merchandise sold or on accounts receivable, but was only required to pay plaintiff the invoiced price for merchandise delivered to him. Therefore, as plaintiff was not entitled to the specific or identical moneys collected by defendant from his customers, he was not entitled to a judgment in tort for conversion. * * *
"' "There can be * * * no conversion of money, unless there was an obligation on the part of defendant to deliver specific money to plaintiff.” 65 CJ, Trover and Conversion, § 24, p 23.’ Garras v Bekiares, 315 Mich 141, 147, 148 [23 NW2d 239 (1946)].” 352 Mich 595. See, also, People v Chapman, 305 Mich 516; 9 NW2d 697 (1943).
It is clear in this case that defendant used partial payments for work in place to pay debts that were not the specific debts incurred in construction of the work in place. He subsequently was unable to pay the latter debts because of his impending bankruptcy. However, there was no agreement that defendant apply the specifíc funds he received from complainants for particular work *90to pay the laborers and materialmen responsible for that work. There was no requirement that defendant establish a separate trust account for each complainant in which he would deposit that particular complainant’s funds.
It is beyond dispute that defendant had the contractual obligation to pay the debts of the work in place for which he received progress payments from the complainants. However, there was nothing to preclude defendant from paying for those debts with funds other than the identical moneys he received from complainants. The fact that defendant’s bankruptcy intervened to preclude such payment does not render defendant guilty of larceny by conversion.
Although the facts of this case may support civil actions against defendant by complainants and Active Homes of Marlette, they do not support a conviction of larceny by conversion.
Reversed.
Coleman, C.J., and Kavanagh, Williams, Levin, and Ryan, JJ., concurred with Fitzgerald, J.One progress payment from each complainant was alleged to have been converted, amounting to $5,100, $5,500 and $10,000.
For an interesting history of the development of larceny in the common law see Perkins, Criminal Law (2d ed), pp 231-233; LaFave & Scott, Criminal Law, pp 618-622, 673-678.
A felonious taking or "trespass” is essential to establish the crime of larceny at common law. People v Taugher, 102 Mich 598; 61 NW 66 (1894). Consequently, larceny was not the proper charge at common law if a person lawfully acquired possession of property belonging to another and subsequently converted it to his own use. However, courts held that if the defendant had a felonious intent at the time of acquiring possession of property and subsequently converted the property, the initial fraud would supply the element of trespass. People v Shaw, 57 Mich 403; 24 NW 121 (1885); Anno: Distinction between larceny and embezzlement, 146 ALR 532. Under our present larceny by conversion statute, MCL 750.362; MSA 28.594, the character of the delivery of property, whether induced by legal or wrongful means, is not an element. People v Doe, alias Meyer, 264 Mich 475; 250 NW 270 (1933).
If the owner is induced to part with both possession and right to ownership by fraudulent representations of one who receives the property with felonious intent, the proper charge is false pretenses. People v Long, 409 Mich 346; 294 NW2d 197 (1980); People v Martin, 116 Mich 446; 74 NW 653 (1898). See, also, Clark & Marshall, Crimes (7th ed), p 857; Perkins, supra, pp 247, 296.
The prosecutor neither charged nor argued the applicability of the building contract fund act, MCL 570.171 et seq.; MSA 26.331 et seq., in this case.
The prosecutor also contends that this fact demonstrates that complainants did not intend to part with title. We do not agree for the reasons which follow in the text. Assuming, arguendo, that such evidence does support the prosecutor’s theory of reservation of title by complainants, we still find that the element of conversion has not been established for the reasons which follow in the text.