§708-873  Defrauding secured creditors. 
(1)  A person commits the offense of defrauding secured creditors if the person
destroys, removes, conceals, encumbers, transfers, or otherwise deals with
property subject to a security interest with intent to hinder enforcement of
that interest.



(2)  Defrauding secured creditors is a
misdemeanor. [L 1972, c 9, pt of §1; gen ch 1993]



 



COMMENTARY ON §708-873



 



  The sections dealing with theft are framed in terms of
appropriation of property of another; however, a security interest does not
make the secured party an owner and the property, by reason of the security
interest alone, is not the property of another.[1]  It is necessary, therefore,
to provide separate penalties for "debtors or conditional vendees who dispose
of property subject to a security interest in ways that may prejudice the
secured creditor."[2]  The requisite culpability is intent to hinder
enforcement of the security interest; innocent potential hindering of such
interest, such as the temporary removal of a secured chattel from the County or
State, ought not to be made subject to criminal sanctions.[3]



  The penalty provided is a misdemeanor, regardless of the
amount involved.  This differs somewhat from the theft offenses.  This
difference reflects the fact that generally offenders against a secured
interest "are less dangerously deviated from social norms than outright
thieves who take property to which they have no claim."[4]  Moreover, in
those cases where the actor intended, at the time the actor undertook the
security obligation, to violate the terms thereof, felony penalties will be
available under the theft provisions.[5]



  Previous Hawaii law provided many offenses relating to
defrauding secured creditors.  These different offenses distinguished between
the kind of property involved, i.e., whether real or personal,[6] between the
mode of fraud, e.g., whether the property is concealed or sold,[7] and the type
of security arrangement involved, e.g., whether a mortgage of personal property
or a conditional sale.[8]  The exact reason for these various provisions,
sometimes with different penalties, seems unclear.  The Code provides a single
unified offense with a single penalty for conduct which ought to be regarded by
the penal law as presenting substantially the same type of social harm.



 



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§708-873 Commentary:



 



1.  §708-800.



 



2.  M.P.C., Tentative Draft No. 11, comments at 98 (1960).



 



3.  Id. at 99.



 



4.  Id.  It should also be noted that the circumstances which
warrant the formulation of a petty misdemeanor theft offense seem generally
absent in defrauding secured creditors.



 



5.  §§708-830 to 833.



 



6.  Compare H.R.S. §745-1 with H.R.S. §745-2.



 



7.  Compare H.R.S. §745-2 with H.R.S. §745-3.



 



8.  Compare H.R.S. §745-3 with H.R.S. §745-7.