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decided: June 22, 1971.


Appeal from judgment of sentence of Court of Common Pleas, Criminal Division, of Allegheny County, Jan. T., 1969, No. 439, in case of Commonwealth of Pennsylvania v. Robert P. Schad.


Allen N. Brunwasser, for appellant.

J. Kent Culley, Assistant District Attorney, with him Carol Mary Los, Assistant District Attorney, and Robert W. Duggan, District Attorney, for Commonwealth, appellee.

Wright, P. J., Watkins, Montgomery, Jacobs, Hoffman, Spaulding, and Cercone, JJ. Opinion by Hoffman, J.

Author: Hoffman

[ 218 Pa. Super. Page 360]

Appellant was convicted of fraudulently converting $1,100 in handmoney given to him by a Mr. and Mrs. LeJeune. In 1967 the LeJeunes sought to purchase a house and lot from appellant, a building contractor. A written agreement was signed and the purchasers paid appellant $1,100 in handmoney.*fn1 This money was to be applied to the purchase and erection of a house on a certain lot.

After this agreement was signed there was considerable delay culminating in a change in lots. A second agreement was prepared, but it may never have been signed. Much confusion as to the status of the various agreements between the parties remains. In any event, the LeJeunes finally hired an attorney and

[ 218 Pa. Super. Page 361]

    repeated attempts were made to effect a closing. Appellant, however, was not able to produce good title to the lot in question. Finally, the LeJeunes' attorney sent appellant a letter stating that the negotiations were at an end and demanding the return of the $1,100. Appellant refused this demand. He was subsequently indicted for fraudulent conversion.*fn2 After trial by jury he was convicted and this appeal followed judgment of sentence.

The only issue which we need consider at this time is whether the trial court correctly instructed the jury as to all the elements of the crime of fraudulent conversion, and especially as to whether appellant had the requisite fraudulent intent. The court charged the jury, in pertinent part as follows:

"This case is a criminal case. I want to impress upon you this isn't a civil case. This is an action where the Commonwealth is the prosecuting party and the Commonwealth says that the defendant has committed a crime of fraudulent conversion, in other words that he by use of fraud converted to his own use the property of Mr. and Mrs. LeJeune or particularly, as the indictment states, the property of John R. LeJeune and because of this is guilty of a crime.

"This is the only dispute which you have before you at this time[:] Did the defendant hold for the LeJeunes the sum of $1100 and did he hold it with the intent and understanding that the $1100 would be used and applied for the purpose of purchase of lot 146 and building a house thereon and turning it over to the LeJeunes in accordance with their agreement, and having failed to do this, did he then keep the money and convert

[ 218 Pa. Super. Page 362]

    it and use it for his own purposes, contrary to the agreement between the parties, and after demand had been made by the LeJeunes, Mr. LeJeune, for its return.

"If you are convinced that he did, then you would find him guilty; if you are convinced that he did not, you would find him not guilty.

"Consider all the testimony. Consider the totality of the evidence presented in this courtroom and determine, one, are you convinced beyond a reasonable doubt that the defendant Mr. Schad fraudulently converted to his own use the sum of $1100 which he held for the LeJeunes for the purpose of getting this property and building a house on it, all of which was contrary to their agreement and to the law as I have mentioned. If you are so convinced, then find him guilty; if you are not so convinced, find him not guilty. I think this is the only issue before you."

In evaluating this charge, it is necessary to determine whether the trial court adequately described the elements of the offense of fraudulent conversion. The gist of this offense is not mere retention of another's property, but is rather "the withholding of another's property with the intent to defraud or deprive that other person of the use and benefit of his property and to convey or apply the same to defendant's own use or benefit as against the owner's." Commonwealth v. Spiegel, 169 Pa. Superior Ct. 252, 255, 82 A.2d 692, 694 (1951). The test in a case such as this is not whether the appellant had a right to withhold the money, "but whether in good faith he believed he had such a right." Commonwealth v. Wiener, 340 Pa. 369, 375, 17 A.2d 357, 360 (1941); Commonwealth v. Souder, 176 Pa. Superior Ct. 523, 108 A.2d 831, 833 (1954).

[ 218 Pa. Super. Page 363]

Though specifically asked to charge on this point,*fn3 the court did not do so. This is especially significant in light of the provision of the first contract between the parties (which may possibly have been incorporated into any later contract between the parties) concerning liquidated damages.*fn4 We believe that the jury should have been instructed to consider whether appellant believed in good faith that he had a right to retain the LeJeunes money. If he had such a good faith belief he would be entitled to be acquitted of the charge of fraudulent conversion.

We therefore reverse the judgment of sentence and remand the record for a new trial.


Judgment of sentence reversed and record remanded.

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