Request By:
Mr. John L. Arnett
Elizabethtown City Attorney
128 West Dixie Avenue
Elizabethtown, Kentucky 42701
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Robert W. Hensley, Assistant Attorney General
This is in response to your letter in which you ask: "Could you please give me an Opinion as to whether or not the acceptance of partial payment of a check by a merchant or person defrauded would cause the offense not to be a violation of this chapter if the other requirements of theft by deception i.e. the issuance of a cold and worthless check, are met?"
First, we quote the relevant sections of the statute which you cite in the heading of your letter, KRS 514.040:
(1) A person is guilty of theft by deception when he obtains property of another by deception with intent to deprive him thereof. A person deprives when he intentionally:
* * *
(e) Issues or passes a check or similar sight order for the payment of money, knowing that it will not be honored by the drawee.
* * *
(4) For purposes of subsection (1), an issuer of a check or similar sight order for the payment of money is presumed to know that the check or order, other than a postdated check or order, would not be paid, if:
(a) The issuer had no account with the drawee at the time the check or order was issued; or
(b) Payment was refused by the drawee for lack of funds, upon presentation within thirty days after issue, and the issuer failed to make good within ten days after receiving notice of that refusal.
(5) Theft by deception is a Class A misdemeanor unless the value of the property is $100 or more, in which case it is a Class D felony.
As we construe your question, it has to do with whether or not a criminal charge can be legally brought when a person, often a merchant, accepts a part payment as an installment to cover the face amount of a check when that check was actually a "cold check", i.e., a check written against a non-existent account or insufficient funds. Thus you are asking whether the offer and acceptance of the installment insulates the "cold check" writer from criminal sanctions.
We have been unable to find a Kentucky case which precisely addresses this issue.
However, in C.J.S. False Pretenses § 21 (at p. 835) it is stated: "Under a number of worthless-check statutes, the crime is complete, if it has been committed at all, when the making, delivery, or uttering of the check takes place." At this point a Kentucky case is cited in the footnote, Hatcher v. Commonwealth, 5 S.W.2d 882 (1928).
In Hatcher, supra, a conviction under the then "cold check" law was reversed for failure of the trial court to submit an instruction to the jury embodying the defendant's defense that the payee of the check promised to hold it to enable the defendant to procure funds to meet it. In the case, however, the Court stated at 5 S.W.2d p. 883:
If at the time he gave the check, he knew that he had no money on deposit in the bank out of which it could be paid and he obtained goods from the payee named in the check, the offense was complete when the worthless check was given with the intent to defraud. Therefore, the question of whether there was any notice that the check had been dishonored by the bank is not material except in so far as the law in force at that time gave the maker of the check 20 days after receiving notice of the dishonor in which to pay the check.
Thus the language in Hatcher supports the general proposition from C.J.S. False Pretenses.
Again, we have been unable to find a Kentucky case precisely dealing with the insulating affect or lack thereof, by an installment payment by the issuer of a check to cover the face amount of the check which, when written, was a "cold check." However, in a former opinion of this office, OAG 67-176 (copy included) we opined: "Assuming that a worthless check was given with intent to defraud in violation of KRS 434.070 a prosecution would not be barred by partial restitution since the statute does not provide that restitution is a defense to the action."
Concerning our former opinion's citation to KRS 434.070 we would note that KRS 434.070 has been supplanted by KRS 514.040. See the COMMENTARY (1974) to KRS 514.040 wherein KRS 434.070, the "cold check" statute, is listed as one of the prior statutory offenses covered in whole or part by KRS 514.040. The COMMENTARY (1974) may be found in the CRIMINAL LAW OF KENTUCKY (1971), the CRIMINAL LAW OF KENTUCKY (1975) and the CRIMINAL LAW OF KENTUCKY (1978). Therefore, we are of the opinion that OAG 67-176 is dispositive of your question.
Also, as additional support for our position that OAG 67-176 is controlling, we would note that the sentence we were quoting from C.J.S. before we digressed to consider the Hatcher opinion continues: "[A]nd it is immaterial whether payment or restitution is subsequently made." However, C.J.S. cites no Kentucky cases at this point.
Before we conclude we would note that KRS 514.040 (4) (b) gives the issuer of a check which has been dishonored for insufficient funds within thirty (30) days of its execution ten (10) days to make it good after receiving notice of the refusal. As a further discussion on this point, we are including a copy of OAG 78-292.