California Supreme Court
267 P.2d 271 (1954)
Ashley (defendant), the business manager of a corporation, obtained a loan from a 70-year-old Mrs. Russ by promising that the loan would be secured by a first mortgage on certain improved property owned by the corporation and used to build a theater on other, separate property owned by the corporation. However, the corporation did not own the improved property and no theater was ever built. Ashley used the money to pay some of the corporation’s operating expenses. After Ashley received the money from Mrs. Russ, she frequently argued with him over his failure to deliver the promised first mortgage. Russ finally received a note of the corporation secured by a second deed of trust on some of its unimproved property. Russ later testified that she accepted the security because Ashley had told her to “take that or nothing.” Additionally, Ashley obtained $13,590 from a Mrs. Neal, stating that the corporation intended to use the money to purchase a theater. Neal was told that the loan would be secured by a deed of trust on the theater building and that she would have good security for her loan because the corporation was worth a large sum of money when in fact it was financially struggling. After receiving the money from Neal, Ashley issued her a note of the corporation for $13,500. Thereafter, Neal loaned the corporation an additional $4,470, receiving a note for $17,500 in exchange for the previous note. Neal later testified that when she hesitated in making the additional loan, Ashley placed a gun on his desk and verbally threatened her. The corporation never bought the theater and Neal never received a deed of trust. The money was deposited into the corporation’s account. Ashley was convicted of grand theft under § 404 of California’s Penal Code. At trial, evidence showed that Ashley drew no salary from the corporation but drove an expensive car purchased by the corporation and drew numerous checks for the payment of expenses. The trial court denied Ashley’s motion for a new trial, and Ashley appealed.
Rule of Law
Holding and Reasoning (Traynor, J.)
Concurrence (Schauer, J.)
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