People v. Ashley

George Ashley (defendant) managed a corporation. Ashley asked Mattie Russ and Maude Neal to loan the corporation money for building a movie theater. Ashley promised Russ that her loan would be secured by a specific piece of property that he claimed the corporation already owned. Ashley promised Neal that (1) her loan would be secured by the theater building that would be purchased with her money and (2) the corporation had sufficient assets to pay back the loan. Based on Ashley’s promises, the two women lent their money to Ashley. However, the corporation did not own the property that Ashley had promised as security for Russ’s loan. Further, the corporation never bought the building that Ashley had promised as security for Neal’s loan, and the corporation was struggling financially. Ashley never provided the promised security interests to either woman, nor did he use the money as promised. Instead, the money from both loans went into the corporation’s operating accounts. Ashley used these operating accounts to buy a nice car for his own use and to pay expenses for his own activities. Ashley was charged in state court with grand theft for stealing Russ’s and Neal’s money, which included the crime of theft by false pretenses. A jury convicted Ashley, and the state appellate court affirmed the convictions. Ashley appealed to the California Supreme Court.