What are the Possible Legal Issues after Sam Gets a Duplication Company to Produce Plates - Essay Example

?MEMORANDUM Sam Evening RE: what are the possible legal issues after Sam gets a duplication company to produce plates which are intended to be personally painted and signed by him and will be sold as limited edition collectibles? Question Presented What are the possible legal issues if Sam, an artist, will get the service of duplication company to produce plates which are intended to be personally painted and signed by him? What will be the consequences if Sam and Janet will sell the duplicate plates? What will happen if people will know about the duplication? Will there be legal consequences given the situation? Brief Answer One of the possible effects of what Sam Evening’s act is getting charged of theft by false pretenses. This includes false promises which are promises without intent of performance. In the case at bar, Sam Evening and Janet Evening promised to sell to the customers 1000 pieces of Limited Royal Wedding Collectibles which are handmade and personally painted and signed by the artist. The customers are being promised with the quality and the worth of the product. But selling a product made through the service of duplication company is making false pretenses and future promises about products. They are selling the products with intention to gain. Courts will require having a good materiality of misrepresentation. There should be causal relation between the swindler’s deception and the victim’s loss. The state of mind of the accused with respect to his intentions should be given great importance. In the case, Sam’s situation can be said to be a form of obtaining money by false pretenses. Another possible legal effect of Sam’s action is theft by deception. A different offense and can be define in a broader sense. This is the type of theft which uses deception to obtain property of another or service of another. This happens when a person has an intention to deceive other persons to gain. Sam Evening will also be held liable for damages under the Tort Law. These are the damages that he will eventually cause to his business partners under breach of partnership trust. Under the Tort Law, a relief is provided for those who suffered harm from the wrongful acts of others (Hg.org, Tort Law). Statement of Facts The case at bar is considering the possible legal issues that Sam Evening will face after selling products made through the service of duplication company. The products are to be sold as Limited Edition Royal Wedding collectibles. There will only be 1000 limited collectibles to be sold for $100. Janet and Sam are so confident that the plates would increase in value. The sellers decided to guarantee the increase in value by promising to buy any plate back within five years from issuance at an appreciated price of 5% annually. Sam and Janet and a friend of theirs, Largess Bucks, each contributed $1000 to cover expenses Sam began producing and signing the plates and Janet created a website to advertise and sell the plates to customers in the United States. After handpainting, signing and numbering 37, Sam got tired and felt like he was doing all of the hard work. Janet did manage the website, including processing payments and shipping products. Their other partner is Largess did nothing. Sam Evening found a plate duplication service and decided to get the service of a duplication company to finish the works of the plates. The company required a minimum order of 1000 plates in order to perform these services and a down payment of $3000 to start the order with the remaining $7000 to be paid upon delivery. Unfortunately of the $3000 that they had contributed, $1000 had been used for initial supplies, $500 to set up the website payment processing service, $185 for initial shipping supplies and $315 had been paid to repurchase three plates out of a total of ten plates that had been shipped so far. Sam thought that income from the first set of plate sales would be given at the end of April. So Sam decided to take the $1000 remaining and added $1000 of his own money. Sam was able to make the duplication company to agree to produce the plates and then get paid $8000 on delivery. But He did not tell his business partners about this. Discussion In the case of Sam Evening, his actions will constitute the elements of theft by false pretenses. In the case of Cash v. United States (No. 96-CM-58), the case defined the meaning of false pretenses: A “false pretense” is a false representation of a past or existing fact, which the defendant knows is false, and on which the owner relies in making [her] decision to give up [her] property to another. ? A false statement as to the future, by way of a promise or an opinion or an expectation, is not a false pretense. ? However, a false representation of a past or existing fact, combined with a false promise as to the future, may constitute a false pretense. The facts of Cash v. United States (No. 96-CM-58) stated that Angela King was in the process of buying a house. When her application for assistance was approved, she asked Harold Cash to inspect her prospective home to ensure its compliance with the housing code and in return, he recommended several repairs and improvements. Ms. King signed a contract with King and agreed to pay him $15,500 for home improvements. On January 28, 1995, Ms. King wrote a check worth one-third of the total amount, $5, 186. Mr. Cash asked Ms. King to pay him in cash because he needs to pay his crew but he did not tell Ms. King that the work on her house might be delayed because his crew was busy on other jobs. After few weeks, Ms. King became worried because the work on her home had not started and Mr. Cash was not returning his calls. For two months, nothing happened. Ms. King discovered that Mr. Cash was not a licensed home improvement contractor. Thus Mr. Cash was arrested and convicted. In Cash v. United States (No. 96-CM-58), the definition of the crime of theft was reiterated which Section 22-3811(b) provides: A person commits the offense of theft if that person wrongfully obtains or uses the property of another with intent: (1)?To deprive the other of a right to the property or a benefit of the property; ?or (2)?To appropriate the property to his or her own use or to the use of a third person. “The term ‘wrongfully obtains or uses' means [among other things] ? obtaining property by trick, false pretense, false token, tampering, or deception.” ?D.C.Code §?22-3811(a). Under the 1982 act, the use of any one of these methods-trick or false pretense or false token or tampering or deception-to obtain the property of another constitutes theft Cash v. United States (No. 96-CM-58). In the case at bar, Sam Evening can be said to be guilty of the crime of Theft by False pretenses. Together with his business partners, Largess and his sister Janet, they can be held liable for this crime. A false representation of a past or existing fact added with false promise as to the future will constitute a false pretense. But as also stated in the case of Cash v. United States (No. 96-CM-58), they can also be charged of theft by deceit. As stated in the case, “Deception” is any act or communication made by the defendant which [he] knows to be untrue or false, and on which the owner relies in making [her] decision to give up [her] property to another. Deception is said to be broader in sense and can even encompass false pretenses. The Court has decided that it is very important to check if the defendant knows the falsity of the representation or conduct. Theft by false pretenses restricts misrepresentations to present or past fact (Cash v. United States, No. 96-CM-58). Theft by deception covers these misrepresentations. The following are the requisites before the government can convict a person of second-degree theft: (1) he wrongfully obtained the property of another, (2) that at the time he obtained it, he specifically intended “either to deprive a person of a right of a property or a benefit of the property or to make use of the property for himself without authority or right, (3) that the property had some value (Cash v. United States, No. 96-CM-58). In the case of Cash v. United States (No. 96-CM-58), the government had to prove that the appellant specifically intended to take and keep it to himself. The court found this intent based on Ms. King’s testimony that Mr. Cash intended to keep the money without any intention to perform the task. Thus, in the case of Cash v. United States (No. 96-CM-58), the court convicted Cash of theft by deception. The word “deception”, as used in the statute, includes misrepresentation as to the future, as well as the past or present. In applying this to the case of Sam Evening, there should be evidences to be presented to convict him and his partners. It should be proven that Sam Evening and his partners used the service of duplication company to benefit themselves and sell the limited edition plates or collectibles as personally painted and signed by the artist. The buyers are without any knowledge that the plates or collectibles they bought were duplicates. The buyers thought that they are buying the personally made and designed collectibles by the artist. The value of each plate which is $100 is good for the genuine work of the artist. The intent to deceive must be proven. The next possible legal issue to be faced by Sam Evening is the violation of Tort Law. Tort law is defined “as a body of rights, obligations, and remedies that is applied by courts in civil proceedings to provide relief for persons who have suffered harm from the wrongful acts of others (Hg.org, Tort law).” When a person sustains injury or suffers pecuniary damage, the person accountable for inflicting injury or damage is liable for the injuries and damages. The law provides that partnerships are bound by partner’s breach of trust (Justia.com, 2010 New York Code PTR). The partnership is bound to make good the loss: 1. Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and 2. Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership. The case of Sam Evening can be said to have breached the trust of partnership. In the given requisites above, he is guilty of misapplying the money of their partnership. The money was intended not for duplication services. Aside from misapplying the money, he kept this to himself. He did not inform his partners of the situation. The money was in the custody of the partnership. Sam can be held liable for the damages caused to his breach of contract in the partnership with his sister Janet and his friend Largess. In line with this breach of trust of partnership, Sam can be held liable of the damages that will be caused to Janet and Largess. He will be responsible for the injuries of Janet and Largess because of his wrongful act of deceiving both his partners and the customers. Torts are considered civil wrongs and these are recognized by law as grounds for lawsuit (Legal Information Institute, Tort). Even if some torts are punishable by imprisonment, the purpose of this law is to provide relief of damages incurred (Legal Information Institute, Tort). Conclusion Therefore, there are a number of possible legal issues that Sam Evening can face given the facts above. First, when it comes to the customers, Sam and his business partners can be held liable for theft by false pretenses or theft by deception. It is important that there is intent to gain by deception or false pretenses. The difference between the two is that false pretenses restrict misrepresentation to present or past facts which the theft by deception encompasses. Sam can also be held liable for the future damages or injuries to his partners for breach of contract trust. His misuse of partnership money and deception for the products which he kept from Janet and Largess can a ground for civil case. Recommendation I recommend that Sam Evening should inform Janet and Largess about the situation. And if it is still possible to retract the services of the duplication company, he should take care of this matter. Their product is intended to be sold as limited edition Royal Wedding collectibles and they promised their customers of the personal and handmade painting of the artist in the collectibles, thus they should sell what they advertised regarding the product. Another option is to inform the customer of the true quality of their product that the design is made by the artist but the plates were reproduced through the service of the duplication company. The customers should know what kind of product they are buying. So Sam Evening and his partners should sell what had been advertised. References: “2010 New York Code PTR.” http://law.justia.com. (n.d.). Web. 3 May 2011 Cash v. United States, No. 96-CM-58. (1997) “Theft-False Pretenses and Fraud.” http://law.jrank.org. (2011). Web. 2 May 2011 “Tort.” Legal Information Institute. Cornell University Law School, 19 August 2010. Web. 3 May 2011 “Tort Law.” www.hg.org. (n.d.) Web. 2 May 2011 Read More