Tuesday, February 21, 2017

Obtaining Property by False Pretenses

Obtaining property by false pretenses is the obtaining of property by intentionally misrepresenting a past or existing fact.


The elements of false pretenses are: (1) a false representation (2) of a material past or existing fact (3) which the person making the representation knows is false (4) made for the purpose of causing (5) and which does cause (6) the victim to pass title (7) to his property [3] False pretenses is a statutory offense in most jurisdictions; subject matter covered by statute varies accordingly, and is not necessarily limited to tangible personal property - some statutes include intangible personal property and services. For example, the North Carolina false pretense statute applies to obtaining "any money, goods, property, services, choses in action, or any other thing of value ..."[4] Under common law, false pretense is defined as a representation of a present or past fact, which the thief knows to be false, and which he intends will and does cause the victim to pass title of his property. That is, false pretense is the acquisition of title from a victim by fraud or misrepresentation of a material past or present fact.

a false representation - there must be a description or portrayal of something that is false. If a person makes a statement about something that he mistakenly believes to be untrue there is no false representation. For example, if a person represents that the ring is a diamond solitaire when he believes that is in fact made of cubic zirconium he is not guilty of false pretenses if it turns out that the ring was in fact a diamond. The representation must be false at the time title passes. Thus if the representation was false when made but is true at the time title to the property passes there is no crime. For example, representing to a seller that you have funds available in your bank account to pay for the goods when in fact your account has a zero balance is not false pretenses if at the time the transaction takes place adequate funds are present in the account. The representation may be oral or written. The misrepresentation has to be affirmative. A failure to disclose a fact does not fit this misrepresentation in common law, unless there is a fiduciary duty between the thief and victim. Moreover, opinion and puffing are not considered misrepresentation as they color the facts but do not misrepresent them.

of a material past or existing fact - the representation must relate to a material past or existing fact. A representation concerning a future state of facts is not sufficient. Nor is merely an expression of opinion.

which the person making the representation knows is false - A mistaken representation about some past or existing state of facts is not sufficient for false pretense.

made for the purpose of causing and which does cause - It is essential that the victim of the false pretenses must actually be deceived by the misrepresentation: the victim must transfer title to the property in reliance on the representation; and the victim being deceived must be a major (if not the only) reason for the victim's transferring title to the defendant. Simply making a false promise or statement is not sufficient. It is not a defense to false pretenses charge that a reasonable person would not have been deceived by the false representation. No matter how gullible the victim, if he/she was in fact deceived the offense has been committed. On the other hand, the offense requires the victim believe the representation to be true. If the person to whom the representation has been made has doubts or serious misgivings about the truth of the representation but nonetheless goes through with the transaction he has not been deceived - he has basically assumed the risk of a false representation.

Title passes - False pretense is conventionally referred to as a crime against “title” and "title" must pass from the victim to the perpetrator for the crime to be complete. However, this is not to be taken literally for the simple reason that a person who obtains ownership of property by deceit does not obtain full title to the property; only a voidable title. False pretense applies to situations where the wrongdoer by deceit obtains “title or ownership – or whatever property interest the victim had in the chattel, if it was less than title.” If the victim has an interest is the property less than full title the acquisition of that interest through false representation can be false pretenses unless the only interest the person has is possession of the property. In such case the crime would be larceny by trick rather than false pretenses. Larceny by Trick also applies to situations where the wrongdoer by deceit obtains possession only, with the victim retaining ownership or some superior interest in the chattel.[5] Determining whether the victim obtained title or possession can present problems. Generally a sell or conditional sell is sufficient to pass title for purposes of false pretenses whereas lending property does not involve a transfer of title. Note that if property is falsely obtained for a specific purpose - for example money to buy a car that does not exist - the crime is larceny by trick rather than false pretenses because the victim intended to pass title to the money only upon completion of the transaction; until such time the victim intended to deliver possession only. The essential distinction between false pretenses and larceny and embezzlement is that false pretenses requires that the victim pass title to the defendant whereas the other offenses do not. The determination as to whether the offense is larceny or false pretenses can have significant effect on the ability of true owner to reclaim the appropriated property. If false pretenses, a bona fide purchaser for value would acquire title superior to the victim; whereas, if the crime is larceny a purchaser from the wrongdoer, bona fide or otherwise, would not acquire any title to the property and would have to return the property to the victim.

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