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United States v. Canton

decided: December 19, 1972.


Friendly, Chief Judge, and Medina and Anderson, Circuit Judges.

Author: Anderson

ANDERSON, Circuit Judge:

Following a jury trial in the Eastern District of New York. Arthur Canton was convicted on nine counts of transporting falsely made and forged securities across state lines in violation of 18 U.S.C. § 2314,*fn1 and on one count of conspiring to do so, 18 U.S.C. § 371. For the purpose of giving color of title to purchasers of stolen cars, the appellant had paid one Cynthia Wharton, on at least nine occasions, to prepare fraudulent New York state motor vehicle registration certificates and take them from New York to New Jersey, where they were exchanged for New Jersey state registration certificates.

In prosecuting Canton, the Government relied on the assumption that a New York motor vehicle registration is either "a certificate of interest in property" or a document or writing "evidencing ownership of goods, wares, and merchandise" and, therefore, a "security" within the definition of that word as set forth in 18 U.S.C. § 2311.*fn2 We conclude that it is neither of these nor is it included within any of the other instruments representing interests in property, mentioned in the statute.

A "certificate of interest" in property is a specific type of instrument issued to participants in joint ventures as evidence of the extent of their participation.

"These certificates are like common shares in that they represent an interest in property not measured in dollars; and they may have a 'par' value, just as a common share usually has."

Empire Trust Co. v. Hoey, 103 F.2d 430, 432 (2 Cir. 1939). Its meaning does not encompass a motor vehicle registration certificate, the purpose of which is to show that the motor vehicle may rightfully be operated on public highways.

With respect to the assertion that it is a document or writing "evidencing ownership of goods, wares, and merchandise" it is necessary first to consider how it is used and regarded for legal purpose in the State of New York and then relate it to the wording, purpose and application of 18 U.S.C. §§ 2311 and 2314.

The State of New York, prior to its adoption of the Uniform Vehicle Certificate of Title Act,*fn3 which became effective July 1, 1972, did not issue certificates of title for motor vehicles; and a registration certificate was the only officially issued document which stated the name of the presumed owner. The placing of the name on the registration, however, created only a rebuttable presumption that the person named was the actual owner of the car. The registration did not, in and of itself, constitute a certificate of title, Ferris v. Sterling, 214 N.Y. 249, 108 N.E. 406 (1915); Bogorad v. Dix, 176 App.Div. 774, 162 N.Y.S. 992 (1917); Pugh v. Hartford Insurance Group, 68 Misc.2d 1014, 328 N.Y.S.2d 872 (Sup.Ct.1972). It has been explicitly recognized "that the certificate of registration was never intended by the [New York] legislature as a certificate of title," Paglia v. State, 278 App.Div. 281, 105 N.Y.S.2d 597, 600; (1951), aff'd 303 N.Y. 821, 104 N.E.2d 369 (1952), and the "transfer of registration is not necessary to effect transfer of title in an automobile," Pugh v. Hartford Insurance Group, supra, 328 N.Y.S.2d at 875.

As the record in the present case indicates, a New York certificate of registration was not sufficient alone to obtain a certificate of motor vehicle registration in New Jersey. Cynthia Wharton, appellant's accomplice, was required to submit in addition tracings of each car's motor vehicle identification number.

Moreover, the adoption of the uniform Vehicle Certificate of Title Act in addition to the existing statutes on motor vehicle registration fairly implies that the legislature did not consider a certificate of registration to be the equivalent of a certificate of title as evidence of ownership.

The applicable federal statutes, 18 U.S.C. §§ 2311 and 2314, had their primordial roots in the National Motor Vehicle Theft (Dyer) Act, 41 Stat. 324 (1919), now codified at 18 U.S.C. §§ 2312, 2313. Thereafter in 1934 Congress enacted the National Stolen Property Act, 48 Stat. 794, "to extend the provisions of the National Motor Vehicle Theft Act to other stolen property," S. Rep. No. 538, 73d Cong., 2d Sess. 1 (1934); H.R.Rep.No.1462, 73d Cong., 2d Sess. 1 (1934); 78 Cong.Rec. 5082, 6981, 8136 (1934). This Act introduced the definition of securities now codified at 18 U.S.C. § 2311 and, inter alia, made it a federal crime to transport stolen securities worth $5,000 or more in interstate commerce. As originally proposed the definition of "securities" included bills of sale, but those instruments were deleted on the floor of the Senate upon the recommendation of the Senate Judiciary Committee. S.Rep.No.538, supra, at 1; 78 Cong.Rec. 6981 (1934). It appears also that the establishment of a $5,000 minimum jurisdictional amount was a deliberate effort to avoid overfederalizing state crimes. S.Rep.No.538, supra, at 2; H.R.Rep.No.1462, supra, at 2 (1934).

In 1939 Congress again extended the Act, 53 Stat. 1178, by making its provisions applicable to the interstate transportation of falsely made, forged, altered, or counterfeited securities, H.R.Rep.No.422, 76th Cong., 1st Sess. 1 (1939); and defined the value of securities as "the face, par, or market value, whichever is the greatest." As originally proposed, and initially passed by the House of Representatives, the bill required a minimum value of forged securities in the amount of $5,000 as a jurisdictional requirement; but, upon the recommendation of the Attorney General and "several large issuers of securities," the Senate Judiciary Committee advised the deletion of the monetary limitation for counterfeit securities. S.Rep.No.674, 76th Cong., 1st Sess. 1 (1939), and the law was ultimately enacted without it. See also S.Rep. #674, supra, at 2, Committee's Report; and debate, Senators King and O'Mahoney, 84 Cong.Rec. 9411-9412 (1939).

While the history of these statutes discloses no legislative debates or committee discussions or reports which expressly state whether or not a "security," for the purpose of § 2314, in the form of an "instrument or document or writing evidencing ownership of goods, wares, and merchandise" was intended to include a writing which, at best, shows only a prima facie ownership in a person named and which does not stand for an obligation for the payment of money or represent a particular interest in goods or property, and has no value in itself, nevertheless, there are several things in the history and wording of the statute which show that such a ...

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