The People v. Gould , 363 Ill. 348 ( 1936 )

William E. Gould and Sam D. Burge were convicted in the circuit court of Henry county on an indictment charging them with obtaining the property of Richard Naseef by means and by use of the confidence game. The cause is here on writ of error.

The principal ground urged for reversal is that the evidence does not show that defendants were guilty of the confidence game, and that if any crime was proven it was the obtaining of Naseef's property by false representations.

Defendants for a number of years had been officers of the Savings Bank of Kewanee. At the time of the transaction for which they were indicted Gould was president and Burge was cashier. They also conducted in the banking room a farm-loan business under the name of Fischer, Gould Burge. The business had been in existence for more than twenty years prior to Fischer's death, in August, 1926. Thereafter it was continued under the same name until a receiver was appointed, in November, 1927. The bank closed in September of that year. Naseef was engaged in the confectionery business. He is of foreign birth and reads or writes but little English. He was a customer of the bank, and also of the co-partnership, for more than twenty years. The transaction with the defendants upon which the charge is based was an exchange on November 12, 1926 of mortgage notes aggregating $9000 held by him for notes of the same amount but secured by a later trust deed upon the same land. The land consisted of a farm of 440 acres in Henry county. Henry J. Ringel, the owner, made a trust deed to Cairo A. Trimble in 1919 to secure an indebtedness of $35,000. Later in the same year he executed two junior trust deeds to John Fischer, trustee, one for $16,000 and the other for $17,500, to secure money borrowed from defendants' firm. The junior trust deeds were foreclosed and the land was sold subject to the senior encumbrance of $35,000. A master's deed was issued to Stanley M. Ringel for a purported consideration of $31,550.04, and on November 12, 1923, he executed notes of that date aggregating $30,000, payable to himself three years thereafter, with interest at six per cent. The notes recited that they were secured by trust deed of even date to John Fischer, trustee, on Henry county land. They were endorsed by the maker and the co-partners. On the same day Stanley M. Ringel quitclaimed the premises to Sam Burge. Burge re-conveyed to Ringel. It appears that the trust deed was not executed until March 8, 1924, and was not recorded until December 10. Thereafter Ringel again quit-claimed to Burge. While Burge held the record title he executed two trust deeds to Trimble, one for $25,000 and the other for $10,000 to replace the senior mortgage, which was thereupon released. This left the $30,000 trust deed subject to the Trimble encumbrances of $35,000. On January 3, 1924, Naseef purchased from the partnership $9000 of the notes out of the $30,000 issue secured by the junior trust deed. It does not appear from the record, and it is not claimed, that Naseef was misled in any way by defendants into the belief that the notes were secured by the first mortgage or trust deed. On November 12, 1926, Burge again executed a quit-claim deed to the land to Ringel, and Ringel executed a trust deed securing notes for $40,000, due five years after date. Ringel then conveyed the land to Burge. Stanley M. Ringel had no interest in the land. He held title for the benefit of the defendants and occupied the farm under a lease from Burge, and the trust deeds executed by him were with an understanding between him and defendants that he should not be liable. The words, "Please do not publish," appear in Burge's handwriting upon the outside of the several deeds and trust deeds mentioned.

Naseef testified that he went to the office of defendants on November 17, 1926, and demanded payment of his notes, stating that he had decided to purchase an apartment building. He first talked to Gould, who called Burge into conference. In the latter's presence Gould told Naseef he was foolish to buy real estate when his farm loans paid six per cent each year, and reminded him that they had been paying the interest on the notes he held. At that time they paid him all the interest then due on his notes. Gould told Burge to get some notes which they had for sale, and Burge brought in a pile of them and placed them on a table. Gould said: "Mr. Naseef, we have the best farm loans in Henry county close to Kewanee. It will draw you six per cent interest, first mortgage notes, just as good as government bonds; and besides that, we have these notes endorsed by Fischer, Gould Burge. Another thing, the Savings Bank of Kewanee is behind those notes. What better investment would you want?" Both Gould and Burge assured him the notes were first farm mortgage loans, and Burge stated they did not sell any other kind. Naseef told them, "If that is what you promise, I will give up my real estate and buy that note from you. But one thing I am afraid of. Nine thousand dollars in one piece of land I don't like very well." Gould then said, "You won't go wrong Mr. Naseef; it is better than government bonds, that investment." Naseef relied upon their statements and did not know that the notes he received were secured by the same land as the notes he surrendered. He then turned his $9000 in notes over to plaintiffs in error and received new notes for a like sum out of the $40,000 notes secured by the trust deed of November 12, 1926. Nine thousand dollars had been paid on Trimble's $10,000 trust deed, leaving an aggregate of $26,000 unpaid on the Trimble prior liens. In November, 1928, Trimble acquired the property under strict foreclosure.

There is a difference between the crime of confidence game and that of obtaining money or property by false pretenses. On account of the multitude and diversity of means employed to fraudulently obtain the confidence of a victim, the term "confidence game" can hardly be defined in a manner that will cover and segregate all cases of that nature from those constituting the offense of obtaining money or property by false pretenses. Obviously, false pretenses of some sort are employed in a confidence game. The crimes are separate and distinct and are differentiated by the facts and circumstances of the transactions. The difference between the two offenses may be found in the many expressions of this court where the question has been at issue. By those cases it is well established that any designed misrepresentation of an existing fact or condition by which a party obtains the money or goods of another is a false pretense under the statute making it a crime to obtain money or property by false pretenses. (People v. Peers, 307 Ill. 539; Jackson v. People, 126 id. 139.) The confidence game statute was designed to reach that class of offenders known as confidence men, who practice upon unwary victims swindling schemes as various as the mind of man is suggestive. As the name of the crime implies, the gist of it is the obtaining of the confidence of the victim by some false representation or device. (People v. Snyder, 327 Ill. 402;People v. Parker, 356 id. 138; People v. Heinsius, 319 id. 168;People v. Harrington, 310 id. 613; People v. Peers, supra;People v. Santow, 293 Ill. 430.) A swindling operation which is not connected with the element of confidence fraudulently obtained for the purpose of the swindle does not constitute the crime of confidence game. (People v. Peers, supra; People v.Rallo, 293 Ill. 304; People v., Santow, supra.) It is not enough to show that money or property was obtained by false pretenses. (People v. Peers,supra; People v. Koelling, 284 Ill. 118.) It is well settled that in order to constitute the crime of confidence game it is necessary that there be more than confidence reposed in the swindler. Where the confidence of the injured party is honestly obtained through a course of regular business dealings and the one in whom the confidence is reposed breaches that confidence to the injury of the one reposing it, the statute defining and punishing the confidence game is not violated. (People v.Snyder, supra; People v. Benton, 324 Ill. 331; People v.Perlmutter, 306 id. 495.) Where the property is obtained by unlawful means other than by fraudulently obtaining the confidence of the victim and abusing the confidence so obtained, a conviction for the crime of confidence game cannot stand. (People v. Snyder, supra; People v. Benton, supra;People v. Perlmutter, supra.) Where the property is obtained by unlawful means other than by fraudulently obtaining the confidence of the victim and abusing the confidence so obtained, a conviction for the crime of confidence game is not warranted. (People v. Snyder, supra; People v. Ingravallo,309 Ill. 498; People v. Koelling, supra; People v.Gallowich, 283 Ill. 360.) Expressions may be found in some opinions of this court indicating that the crime of confidence game is established by proving, merely, the obtaining of money or property by a swindling scheme, but whenever the issue as to the difference between the two crimes has been clearly presented we have adhered to the principles announced here.

If Naseef had confidence in defendants it arose from the long course of honest business dealings between them and him over a period of more than twenty years. There is nothing in the testimony to indicate that such confidence was inspired by anything which was said or done in connection with the trade of his old notes for new ones. If his testimony is true, defendants were guilty of obtaining his property by false pretenses, and they were subject to the penalties of the statute relating to that offense. Such a showing, without the element of confidence fraudulently obtained for the purpose of the swindle, is not sufficient to support a conviction under the confidence game statute. That statute being penal, we are not authorized to extend its meaning or provisions by implication. The proofs are insufficient to bring defendants within its terms.

The judgment of the circuit court is therefore reversed.

Judgment reversed.