State v. DixState v. Dix
This case concerns the application of the Uniform Commercial Code (UCC) to the ownership elements of grand theft and burglary. Over a period of several months, William Dix bought several thousand dollars’ worth of goods—mainly power tools—from Grainger Supply on credit. On the same days he bought the goods, he pawned them. Dix was charged with grand theft and burglary, and pleaded not guilty to both counts. At trial, the State argued that Dix committed theft by obtaining the goods on credit without intending to pay for them, and committed burglary by receiving loans from the pawn shop in exchange for the goods based on false representations that he owned thеm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Dix was charged with (1) grand theft under Idaho Code sections
A two-day jury trial was held on June 14 and 15, 2017. At trial, a Grainger employee testified that Dix obtained the goods from Grainger using an open line of credit he had established on behalf of two businesses: Jamaal Al-Din Hoops, Inc., and BoiseLibrarian.com. (The State‘s attorney noted that the State did not believe these were legitimate businesses, but stated that was irrelevant to the prosecution‘s case.) The Grаinger employee added that in the fall of the previous year, a police officer asked him to provide invoices showing all the goods that Dix obtained from Grainger. These invoices were admitted, as well as several photographs of shipping labels identified as Grainger‘s. Dix ordered and picked up goods—mainly power tools—on nine occasions from November 2015 to November 2016. The total vаlue of the goods exceeded $1,000. The Grainger employee was not aware of any payments Dix had made toward these goods.
A Vista Pawn employee testified that in the fall or winter of 2016, Dix brought in tools that were all new and still in the box. Vista Pawn gave him loans for those tools. For each pawn transaction, Vista Pawn requires that the customer sign and fingerprint a pawn slip indicating that the item the customer is selling or getting a loan for is the customer‘s property. Because so many of the tools were brand new in the box, and some of the boxes had never been opened before, he “kind of got a weird taste in [his] mouth about it.” He reported his concerns to the Boise Police Department and turned over the goods that Dix had brought in. The Vista Pawn employee identified four pawn slips as Vista Pawn‘s business records of Dix‘s transactions, and these pawn slips were admitted. Together with the Grainger invoices and testimony by the Grainger and Vista Pawn employees, these pawn slips showed that Dix pawned these goods on the same day that he picked them up from Grainger.
The investigating police officer testified that he previously had contact with Dix in the spring of 2016, when an investigation revealed that Dix had bought thirteen cell phones and tablets from a cell phone store under a business license and then pawned them. No criminal charges resulted from that investigation, but he told Dix that his actions could lead to criminal charges if they continued. In October of 2016, the officer was contacted by Vista Pawn, who was concerned that the goods brought in by Dix might have been stolen. The officer was able to determine that these goods had been purchased by Dix at Grаinger, and that Dix had also pawned some of the goods at First National Pawn. However, First National Pawn had already sold the tools by the time of the investigation. Pawn slips from First National Pawn were admitted. The evidence regarding Dix‘s transactions with the cell phone store and First National Pawn, however, were admitted only for limited purposes under
At the close of the State‘s case-in-chief, Dix moved for a judgment of аcquittal on both charges under
The district court also rejected two of Dix‘s proposed jury instructions. The first proposed jury instruction cited
The jury returned a verdict of guilty оn both counts. Dix then renewed his Rule 29 motion as to the burglary charge alone. This motion was also denied.
Following a sentencing hearing, the district court issued an order withholding judgment and placing Dix on probation for eight years. Following a motion by the State and stipulation by the parties, the district court entered an order and judgment requiring Dix to pay $4,994.82 in restitution: $3,494.82 to Grainger and $1,500.00 to Vista Pawn.
Dix filed a timely notice of appeal from the order withholding judgment and order of probation, and subsequently filed an amended notice of appeal. The Court of Appeals affirmed. State v. Dix, No. 45364, 2019 WL 946821, at *4 (Idaho Ct. App. Feb. 27, 2019). This Court granted Dix‘s petition for review.
II. STANDARD OF REVIEW
When reviewing a case on petition for review, this Court gives due consideration to the decision reached by the Court of Appeals but directly reviews the decision of the trial court. State v. Gonzales, 165 Idaho 667, 671, 450 P.3d 315, 319 (2019).
After the close of the prosecution‘s evidenсe or after both sides have rested, the trial court must enter a judgment of acquittal for any offense for which the evidence is insufficient to sustain a conviction.
This Court freely reviews questions of statutory interpretation. State v. Keeton, 165 Idaho 663, 665, 450 P.3d 311, 313 (2019).
III. ANALYSIS
Dix‘s conduct and the legal challenges surrounding it are nothing new. Courts have been wrestling with these kinds of issues since at least the 1700s. See Annotation, Appropriation of Property After Obtaining Possession by Fraud as Larceny, 26 A.L.R. 381, at § 1 (originally published in 1923) (collecting cases dating back to the 1700s); Annotation, Purchase of Property on Credit Without Intending to Pay for It as Larceny, 35 A.L.R. 1336 (originally published in 1925). For the reasons set out below, we reverse Dix‘s convictions.
A. The distriсt court erred in denying Dix‘s motion for judgment of acquittal for grand theft.
Dix is correct. His grand theft conviction cannot be sustained because the State did not prove that Grainger had a superior possessory interest to the goods at the time of Dix‘s alleged theft.
According to the State, Dix committed theft at the moment he gained possession of the goods. In Idaho, in order to be guilty of the crime of theft, the defendant must tаke property from its “owner“: “A person steals property and commits theft when, with intent to deprive another of property or to appropriate the same to himself or to a third person, he wrongfully takes, obtains or withholds such property from an owner thereof.”
“Owner,” for the purposes of the theft statute, is defined as “any person who has a right to possession thereof superior to that of the taker, obtainer or withholder.”
In Bennett, we held that because the theft statute‘s definition of “owner” depends on the possessory rights of the persons involved, and because the criminal code does not provide guidance on possessory rights, we must use Article 2 of the UCC to determine who had the superior possessory right when an alleged theft involved a sale of goods. Id. That case involved a charge of theft related to the sale of a travel trailer. Id. at 278, 246 P.3d at 387. Bennett bought a trailer from LeFave, who agreed to let Bennett take the trailer for a down payment and pay the remainder of the purchase price later. Id. LeFave and Bennett further agreed that LeFave would transfer title to Bennett once Bennett finished paying for the trailer. Id. Bennett made at least one payment toward the purchase price but then moved the trailer out of state. Id. at 279, 246 P.3d at 388. Bennett was charged with and found guilty of grand theft under
This Court vacated Bennett‘s conviction on the grounds that the State failed to prove beyond a reasonable doubt that LeFave was the “owner” of the trailer. Id. at 280, 246 P.3d at 389. We explained that LeFave parted with possession of the trailer by delivering it to Bennett and did not regain superior possessory rights upon Bennett‘s breach of contract for two reasons. Id. First, under the UCC, an unpaid seller of goods can sue for the unpaid price pursuant to
Bennett‘s reasoning applies with equal force in this case. Dix‘s alleged theft involved a sale of goods, so the UCC applies.
That Dix also acquired a superior possessory right to the goods at the moment of delivery is even clearer here than it was in Bennett. Here, Grainger did not even attempt to create a security interest in the goods it sold to Dix, so it cannot claim a superior possessory interest in the goods under
This result is not an anomaly. It is in line with previous decisions of this Court involving the same issues. For example, in State v. Jesser, the Court decided that title to the goods had not passed at the time of the alleged theft. State v. Jesser, 95 Idaho 43, 52, 501 P.2d 727, 736 (1972). The defendants had entered into a contract to buy grain, agreeing to pick up each load at the seller‘s granary, transport it to another location for weighing, and then pay for it. Id. at 46, 501 P.2d at 730. After the seller realized the defendants were secretly transferring some grain to another truck before weighing the remainder, the dеfendants were each charged with “petit larceny” under Title 18, Chapter 46 of the Idaho Code (now repealed). Id. at 47, 501 P.2d at 731. The Court noted that under the UCC, title passes upon the seller‘s delivery of the goods unless the parties agree otherwise. Id. at 51, 501 P.2d at 735. The general rule did not apply in this case though, the Court reasoned, because the jury could determine accurate weighing of the grain was part of the sales cоntract. Therefore, the defendants had nullified the contract by making accurate weighing impossible. Id. at 52, 501 P.2d at 736. With no enforceable contract in place, title did not pass to the defendants at the point of delivery. Id.
The Court‘s reasoning in Jesser leads to the opposite result here. For the reasons stated above, delivery was complete when Grainger made the goods available to Dix for pick-up. There were no unfulfilled conditions in Grainger‘s sales contract with Dix that nullified their agreement. Thus, the general rule applies: title passed to Dix upon delivery.
B. The district court erred in denying Dix‘s motion for judgment of acquittal for burglary.
Dix‘s conviction for burglary must also be reversed. We agree with the reasoning in the amicus curiae brief filed by Commercial Law Amicus Initiative: Dix did not commit burglary by pawning the goods because the pawn shop received goоd title to the goods.
Dix had good title to the goods at the time he pawned them. The State alleged that Dix obtained the goods fraudulently by purchasing them on credit without intending to pay. Assuming that is true, Dix‘s title to the goods was voidable by Grainger. 17A Am. Jur. 2d Contracts § 210. But voidable title is good title unless and until the seller elects to reject the sales contract. See Voidable, Black‘s Law Dictionary (11th ed. 2019) (defining “voidable” as “[v]alid
Buyer gave a check to Seller in payment for the purchase of goods. Seller gave Buyer possession of the goods even though the check had not yet cleared. Upon presentment to the payor bank, Buyer‘s сheck was returned for insufficient funds. By the time that the check was returned to Seller, Buyer had already sold the goods to Purchaser. Even though Buyer has no right to retain the goods as against Seller, Buyer had the power to transfer a good title to the goods to Purchaser under U.C.C. § 2-403(1)(b).
3A Anderson U.C.C. § 2-403:45 (3d. ed.) (emphasis in State‘s response brief). However, the sentence that precedes this example makes clear that the buyer hаs no such right if the seller voids the sales contract, because the buyer‘s title is voidable, not void: “U.C.C. § 2-403(1) provides a rule under which a person who has voidable title to goods can transfer a good title to the goods to a good faith purchaser for value.”
The State also cites the following excerpt from a footnote from a Wyoming case: “When, because of his fraud, the accused obtains voidable title to property, he may sell them to a good-faith purchaser for value; he just does not have superior title to that of the true owner.” Bohling v. State, 2017 WY 7, ¶ 29 n.8, 388 P.3d 502, 509 n.8 (Wyo. 2017) (emphasis in State‘s response brief). However, this statement is dicta. Bohling involved a charge of obtaining property by false pretenses arising from а county official‘s use of a county credit card to purchase camera equipment for personal use. Id. ¶ 11, 388 P.3d at 505. Because the county was the buyer—not Bohling—Bohling never acquired even voidable title. See Id. ¶¶ 38-44, 388 P.3d at 512-13. Moreover, nothing about this excerpt suggests that the seller would be relieved from having to take some action to divest the purchaser of voidable title or that the seller would have a superior рossessory right to the property. Additionally, accepting the State‘s argument that Dix‘s fraudulent intent rendered his purchase of the goods void would promote lawlessness in the sense that it would allow sellers to physically retake goods from buyers who fail to pay.
Because Dix had voidable title to the goods, he was able to transfer good title to Vista Pawn. Under the UCC, “[a] person with voidable title has power to trаnsfer a good title to a good faith purchaser for value.”
The good faith purchaser rule serves important policy interests. It promotes fairness by placing the risk of loss on the party in the better position to avoid it: the seller, who could have demanded payment on delivery. Additionally, placing the risk on good faith purchasers would impede commerce by requiring purchasers to conduct substantial due diligence in order to assure themselvеs, to the extent possible, that the original purchaser did not defraud the seller. Other courts have recognized this rule and its rationales. See, e.g., Tempur-Pedic Int‘l, Inc. v. Waste to Charity, Inc., 483 F. Supp. 2d 766, 774 (W.D. Ark. 2007) (explaining that the purpose of the good faith purchaser rule is to “promote finality in commercial transactions and thus encourage purchases and to foster commerce“).
In this case, there was no suggestion that Vista Pawn was not a good faith purchaser for value. Even the State concedes that “[a]s between Grainger and Vista Pawn, Vista Pawn is protected as a ‘good faith purchaser of goods.‘” Therefore, Dix transferred good title to Vista Pawn. (To be precise, he transferred the lesser property interest of “rights to the goods in pawn.” When he later failed to redeem the goods, Vista Pawn became the full owner, or title holder, pursuant to its agreement with Dix.)
Because Vista Pawn received what it bargained for, Dix did not commit burglary by pawning the goods. However, for the first time on appeal, and contrary to its statements to the trial court, the State argues that Grainger could be the victim of Dix‘s burglary even if Vista Pawn was not. Even if this argument was preserved, the State does not explain why Grainger would be entitled to the proceeds of the pawn transaction. As noted abоve, Grainger could sue Dix for the unpaid purchase price of the goods once that became due, but that does not mean it would be entitled to proceeds from the pawn transaction. Therefore, whether the victim of Dix‘s alleged burglary is considered to be Vista Pawn or Grainger, Dix‘s burglary conviction cannot be sustained.
IV. CONCLUSION
We reverse Dix‘s convictions and remand the case to the district court with instructions to enter a judgment of acquittal on both counts.
Chief Justice BURDICK, and Justices BEVAN, STEGNER, and MOELLER CONCUR.