Smith, Jerome

English

University of Denver

Denver Law Review Volume 18 Issue 6 Article 2 July 2021 Obtaining a Loan Under False Pretenses . . . The Colorado Law Jerome Smith Follow this and additional works at: https://digitalcommons.du.edu/dlr Recommended Citation Jerome Smith, Obtaining a Loan Under False Pretenses . . . The Colorado Law, 18 Dicta 141 (1941). This Article is brought to you for free and open access by the Denver Law Review at Digital Commons @ DU. It has been accepted for inclusion in Denver Law Review by an authorized editor of Digital Commons @ DU. For more information, please contact jennifer.cox@du.edu,dig-commons@du.edu. Obtaining a Loan UnderFalse Pretenses ..The Colorado LawBy JEROME SMITH*A question has come up in a local criminal case which has doubtlessbeen passed upon by the various district courts, but oddly enough hasnever been before our state Supreme Court. We believe that a discussionof the question will be of interest to the members of the bar.The question is: Can one who obtains a loan of money by falserepresentations as to his financial responsibility be prosecuted under Sec-tion 305 of our Criminal Code? Section 305 reads in part as follows:"Obtaining goods under false pretenses-Penalty.-If anyperson or persons shall knowingly and designedly, by any falsepretense or pretenses, obtain from any other person or persons anychose in action, money, goods, wares, chattels, effects or other valu-able thing whatsoever, with intent to cheat or defraud any suchperson or persons of the same, every person so offending shall bedeemed a cheat, and upon conviction, shall, where the propertyobtained is over the value of twenty dollars, be imprisoned in thepenitentiary not to exceed ten years; * * *"If this section could be read alone, the answer to our question wouldbe simple indeed, for the language of the section is broad enough to in-clude the fraud of obtaining money on credit, but in Colorado we havein our Criminal Code another section in point, Section 3 16, to-wit:"False pretenses of character or responsibility in writing-Penalty.-If any person, by false representation in writing of hisown responsibility, wealth or mercantile correspondence and con-nection, shall obtain a credit thereby, defraud any person or personsof money, goods, chattels or any valuable thing, or if any personshall cause or procure others to teport falsely of his honesty, wealthor mercantile character, and by thus imposing on any person orpersons, obtain credit, arid thereby fraudulently get into possessionof goods, wares, merchandise or any valuable thing, every suchoffender shall be deemed a swindler, and on conviction shall besentenced to return the property so fraudulently obtained, if it canbe done, and shall be fined not exceeding one thousand dollars, andimprisoned in the county jail n~t exceeding six months."*Of the Colorado Bar, Greeley, Colorado.142 DICTABoth of the quoted sections have been Colorado law since the earli-est days.Is obtaining a loan of money "obtaining credit" under Section316? The courts have uniformly held that it is. (24 A. L. R. 400,citing many cases.) If then, such an offense can be prosecuted underSection 316, our next question is: Must it be? Since there is a specialstatute relating to obtaining credit under false pretenses, does the generalfalse pretenses statute become inapplicable? In at least two jurisdictionswhere there are statutes like ours this precise point has been ruled upon.(Lucas v. Illinois, 75 Ill. App. 662; Commonwealth v. Boyd, 181 Ky.382, 205 S. W. 390.)In the Illinois case one Lucas borrowed $100 from one Metcalf asthe result of Lucas' false oral representation that he was a man of certainwealth. The lower court overruled a motion to quash the indictment,but the appeal court reversed the ruling, saying in part:"As we view it, the proper construction to place upon the twosections is that section 96 [like our Sec. 305] was intended to in-clude cases where the defrauded party parted with his money insome other sense than as a loan, and that where the loan was pro-cured by the false representation of the borrower as to his solvency,the case falls within section 97 [like our Sec. 3161 provided therepresentation was in writing, of course."Since the representation was oral, the case fell under neither Section 96nor Section 97 and the court ruled that the motion to quash the indict-ment should have been sustained,In the Kentucky case, under identical facts and similar statutes, theappeal court sustained the lower court's quashing of the indictment, say-ing in part:"The latter section [like our Sec. 3161 'doubtless was dic-tated by the knowledge that criminal charges of false pretenses areoften instituted in reality tw compel the payment of debt and areeasily fabricated.' "The holdings in these cases are apparently in accord with recognizedprinciples of statutory construction:59 Corpus Juris 1056: "(d) General and Specific Statutes.Where there is one statute dealing with a subject in general andcomprehensive terms, and another dealing with a part of the samesubject in a more minute and definite way, the two should be readtogether and harmonized, if possible, with a view to giving effectto a consistent legislative policy * * *. It is a fundamental rulethat where the general statute, if standing alone, would include thesame matter as the special act, and thus conflict with it, the specialDICTA 143act will be considered as an exception to the general statute, whetherit was passed before or after such general enactment * * *."An early Illinois case well illustrates these principles of statutoryconstruction. In this case (114 Ill. 320, 2 N. E. 55) the court wasasked to determine whether the word "whoever" in a general larcenystatute was broad enough to include "constables." Reading this statuteby itself, the answer wtuld clearly be "yes." But since there was aspecial statute governing larceny by constables, the court said "no":"It is true that the word 'whoever' * * * has a broad or com-prehensive meaning; but at the same time it is unreasonable to be-lieve that the legislature intended that a constable should be prose-cuted under both sections of the statute."In passing a special act the minds of the legislators were necessarilydirected to the details of the special case and it is not probable that theyshould intend by a general act to derogate from that special intention.If one obtaining credit by false pretenses can be prosecuted under Section305, then Section 3 16 loses its meaning, both as a statute designed toprevent fabricated cases by requiring the false representations to be inwriting, and as one designed to mark the offense of obtaining credit byfalse pretenses as less serious, because of the well-recognized human fail-ing to puff and overstate one's financial position when he is in desperitecircumstances and in need of a loan, often without real criminal intent.There is but one fly in the ointment.Prior to 1891, the latter part of Sectiono305 included a concludingsentence which was omitted in the amended statute of that year. Thissentence read: "This section shall not apply to sales of property oncredit." The change of the statute in 1891 was primarily for the pur-pose of increasing the penalty for the offense of false pretenses. Whywas the quoted sentence omitted? It would seem that the omission,instead of repealing Section 3 1 6 (general statutes do not repeal specialstatutes by implication-86 Colo. 249), was either inadvertent, or in-tended to delete unnecessary language. The Kentuky statute referredto has no sich statement expressly limiting its scope, nor under the prin-ciples discussed heretofore would such an express limitation be necessary.In any event it is hiard to believe that the legislature intended togreatly increase the penalty under Section 305 (one year minimum toten years maximum) and at the same time put within the scope of thatsection for the first time cases of obtaining credit through false pretenses,when custom and justice dictate both a lighter penalty and stricter proof(characteristics of Sec. 31.6) than for the ordinary case of false pretenses.However, the law is uncertain and should be clarified by legislativeenactment or a Supreme Court decision.

Obtaining a Loan Under False Pretenses . . . The Colorado Law

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Obtaining a Loan Under False Pretenses . . . The Colorado Law

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