Goldmann, Freund and Conford. The opinion of the court was delivered by Goldmann, S.j.a.d.
This is an appeal from a judgment of conviction entered against defendants in the Union County Court on an indictment charging them with obtaining money under false pretenses, N.J.S. 2 A:111-1.
Early in 1956 defendants, under the name of Royal Shackamaxon Country Club, Inc., purchased from the trustee in bankruptcy of the Shackamaxon Country Club, Inc., all of the real and personal property assets of the bankrupt, including the goods and chattels listed in the official appraisal, consisting of some 464 separate items. It appears that defendants immediately entered into possession of the premises and set about preparing the club for operations during
the 1956 season. Shortly thereafter defendant Harold Samurine, the president and, for all practical purposes, sole owner and manager of Shackamaxon, was twice compelled to utilize the services of Modern Funding Corporation, a money broker, to obtain operating capital. There were three real estate mortgages on the country club property, and Modern Funding specifically knew, as a result of an earlier loan made in February, that the personalty acquired by the corporation at the bankruptcy sale was encumbered by a chattel mortgage given in July 1954. In fact, its employee, Bukarest, a New Jersey attorney who described himself as a negotiator of loans and administrator, had seen a copy of that mortgage.
By the end of February 1956 the country club venture was in a critical financial condition. A $22,000 monthly installment on a third mortgage was due and the mortgagee was pressing for payment. Samurine phoned Modern Funding on March 2, 1956 and requested that it arrange for another loan. It got in touch with the complaining witness Metrick, a New York lawyer who, as a sideline, had engaged in financial ventures of one kind or another during the past several years. On the afternoon of that day, a Friday, Bukarest and Kroland, a "trouble shooter" for Modern Funding and manager of its New Jersey office, drove Metrick from New York City to the country club in Summit, N.J. to meet Samurine and to inspect the premises. Metrick testified that when Rothman, president of Modern Funding, had spoken to him that morning he had assured him there were only three real estate mortgages on the club property, but no chattel mortgage.
Upon arrival at the country club Metrick was introduced to Samurine who took him on a 10-15 minute inspection tour of the premises and of the personal property which was to be given as partial security for the proposed loan. He says that Samurine assured him the chattels were free and clear; however, Bukarest and Kroland were not present at the time. (This was in contradiction to what Metrick had testified to in the course of another proceeding in the Chancery Division, but accorded with testimony by Bukarest and Kroland that they had not heard Samurine make any such
representation.) Following the inspection, Metrick authorized Modern Funding to proceed with arrangements to consummate the loan, including the preparation and execution of whatever instruments were necessary to secure it. He left his personal check of $23,000 with Kroland, payable to the order of Modern Funding. The loan on its face was for $24,000 -- $1,000 was a bonus to Metrick, $1,000 was to cover the expenses, commissions and bonus of Modern Funding, and $22,000 eventually went to the country club.
The appropriate papers were promptly drawn up by Modern Funding's attorney and delivered to Bukarest for execution by defendants. He presented himself at defendants' home during noon-hour, Monday, March 5, and proceeded to have the papers executed. The picture we get from Mrs. Samurine's testimony is that her husband was in a state of great anxiety because he had promised to have the payment on the third mortgage at the bank by that hour. He hastily looked at the papers, signed them, took Modern Funding's $22,000 check from Bukarest, and departed for the bank. Bukarest and Mrs. Samurine had something to eat and she signed the papers without reading them. Bukarest's account of what happened is as unsatisfactory as was the rest of his testimony, which was vague and shot through with evasiveness, claimed loss of memory and, indeed, with outright false answers -- proved false when he was time and again confronted with contradictory testimony given in the Chancery Division action.
Among the papers signed at the Samurine home on March 5 were the $24,000 note, the chattel mortgage, a loan agreement, and an assignment of Samurine's interest in a number of valuable lots as further collateral security. The chattel mortgage included the following typewritten clause:
"And the parties of the first part do hereby specifically affirm and represent that the said chattels herein are not affected by any liens of record or by any liens created by them since their acquisition of all of the issued and outstanding capital stock of the Royal Shackamaxon Country Club, Inc."
However, the instrument did not include a list of the mortgaged personalty, but simply incorporated by reference all of the chattels set out in the bankruptcy appraisal.
The loan agreement recited the execution and delivery of the chattel mortgage as additional security for the $24,000 loan, covering the chattels set out in the bankruptcy appraisal, which chattels, the agreement went on to say,
"* * * [defendants] specifically claim to be presently unencumbered and not affected by any of the liens appearing of record or created by them since their acquisition of all of the issued and outstanding capital stock of the said Country Club, all of which information is peculiarly within the personal knowledge of the borrowers herein, and substantiation of which the said borrowers represent can be determined by examination of their records of the transaction with the Referee in Bankruptcy, and which representation the Lender herein accepts as true without the opportunity of independent investigation thereof by reason of the urgency of consummation of the within loan * * *."
Neither Metrick nor any other person on his behalf or the broker's, Modern Funding, conducted any search of the public records to determine whether there were any existing liens on the chattels being mortgaged, despite the fact that the broker had learned some three weeks before that there was then a chattel mortgage of record.
The trial court had insisted that the State establish that the chattels covered by the March 5, 1956 mortgage were the same as those included in the bankruptcy schedule. The State was able to prove that only ten items of the 464 listed in the appraisal, having a value of only $1,490 as against the grand total of $33,312.55, were actually covered by the 1954 mortgage.
There was a motion for judgment of acquittal at the end of the State's case. It was denied. The jury returned a verdict of guilty as to each defendant. A motion for a new trial was denied. Thereafter the trial court sentenced Harold Samurine to serve six months in the county jail and pay a $300 ...