People v. Phebus
116 Mich. App. 416, 323 N.W.2d 423 (1982)
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Rule of Law:
When an individual obtains property by fraudulently misrepresenting its price, such as by switching price tags, the crime committed is obtaining property by false pretenses, not larceny. The determinative factor is the owner's intent to pass title to the property; if title is intended to pass, even due to fraud, the offense is false pretenses.
Facts:
- A store detective at Meijer Thrifty Acres observed the defendant in the store.
- The defendant removed a price tag marked $1.88 from an unfinished decorator shelf.
- He then placed the $1.88 tag on a finished decorator shelf that was originally priced at $6.53.
- The defendant's wife took the finished shelf with the incorrect price tag and placed it in their shopping cart.
- The defendant and his wife proceeded to the check-out area and paid the cashier $1.88 for the shelf.
- After the transaction was complete, store detectives stopped the defendant as he was loading the merchandise into his car.
Procedural Posture:
- The defendant was charged with larceny in a building.
- Following a preliminary examination, the defendant was bound over for trial in the Jackson County Circuit Court.
- The defendant filed a motion to quash the information, arguing the evidence did not establish the elements of larceny.
- The circuit court granted the defendant's motion, finding the evidence supported a charge of false pretenses but not larceny, and quashed the information.
- The prosecution (appellant) appealed the circuit court's order to this intermediate appellate court.
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Issue:
Does a shopper commit the crime of larceny when they switch the price tag on an item for a lower-priced one and then purchase the item at the checkout, thereby obtaining both possession and title from the owner through fraudulent means?
Opinions:
Majority - Allen, J.
No. The defendant's actions constitute the crime of obtaining property by false pretenses, not larceny. The critical distinction between the two offenses lies in the owner's intent. In larceny, the owner never intends to part with title to the property, only possession. In false pretenses, the owner is fraudulently induced to part with both title and possession. In this case, the store, through its cashier, intended to pass title of the shelf to the defendant at the point of sale. Although this intent was formed based on the defendant's fraudulent misrepresentation of the price, the intent to transfer ownership was present. The prosecutor's argument that the cashier's mistake of fact prevented title from passing is incorrect, as being induced to part with title through a misrepresentation of fact is the very essence of the crime of false pretenses.
Analysis:
This decision clarifies the 'narrow margin' between larceny and false pretenses within the context of retail fraud in Michigan. It establishes that the key legal inquiry is the victim's intent to transfer title, not merely the fraudulent nature of the transaction. By holding that a price-tag switching scheme leads to a transfer of title (albeit a voidable one), the court solidifies that such acts must be prosecuted as false pretenses. This precedent forces prosecutors to choose the correct charge, as an incorrect charge of larceny for these specific facts will be dismissed, preventing a conviction on that offense.
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