Maxfield v. United States

• Decision Date: 22 April 1966
• Docket Number: 8209.,No. 8208,8208
• Citation: 360 F.2d 97
• Parties: Reed R. MAXFIELD and John R. Christopher, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

360 F.2d 97 (1966)

Reed R. MAXFIELD and John R. Christopher, Appellants, v. UNITED STATES of America, Appellee.

Nos. 8208, 8209.

United States Court of Appeals Tenth Circuit.

April 22, 1966.

Ronald C. Barker, Salt Lake City, Utah, for appellant John R. Christopher, Clifford L. Ashton, Salt Lake City, Utah, for appellant Reed R. Maxfield (Robert W. Hughes, Salt Lake City, Utah, with them on briefs).

David K. Winder, Salt Lake City, Utah (William T. Thurman, U. S. Atty., Salt Lake City, Utah, David B. Bliss, Washington, D. C., and Seymour Glanzer, with him on brief), for appellee.

Before MURRAH, Chief Judge, and BREITENSTEIN and SETH, Circuit Judges.

MURRAH, Chief Judge.

Appellants Maxfield and Christopher separately appeal from a judgment and sentence pursuant to a jury verdict on eight inexcusably prolex and redundant counts of an indictment, each of which charges separate violations of the anti-fraud provisions of the Securities Act of 1933, 15 U.S.C. 77q.¹ In identical language (except the specific charge of separate fraudulent sales to different individuals) they charge the defendants with having devised an unlawful scheme to sell the stock of Uinta National Life Insurance Company by means of untrue statements and omissions to state material facts. Each count charges the same sixteen specific misrepresentations and nineteen concealments of material facts.

In his instructions to the jury Judge Christensen epitomized the charges to the effect that during the period referred to in the indictment, Maxfield served as President, Chairman of the Board and controlling person of both Uinta Finance Company and Uinta National Life Insurance Company and he also organized, dominated and controlled Western States Underwriters and Mid-America Securities of Utah; that during the same period referred to in the indictment, Christopher served as Sales Manager and salesman and, together with Maxfield, dominated and controlled the business affairs of Uinta National, Mid-America and Western States; that upon the organization of Uinta National in May, 1958, Maxfield personally acquired, either directly or through others under his control, 10,000 shares of the 76,250 authorized shares of Uinta National at a cost of $14.775 per share in consideration of promotional services; that he and Christopher offered, sold or caused to be offered and sold to investors through the services of Uinta Finance and Western States all of the 10,000 shares at prices ranging from $40 to $70 per share.

With characteristic thoroughness and fairness, the trial court guided the jury through the complexity of the allegations in the indictment, explaining the meaning of both the applicable law and the charging language. The court interpreted the essential and basic elements of the Government's allegations as the offer and sale of the Uinta National Life Insurance Company stock through the Western States Underwriters by misrepresenting the identity of the parties beneficially interested in said stock, particularly Maxfield's interest therein, or concealing such interest; by representing the non-availability of the stock to the general public and its preferential availability to stockholders by means of preferment or entitlement certificates; by misrepresenting the increasing value of the stock and its deliverability when paid for by the particular investor.

At the conclusion of the instructions, counsel for Christopher excepted only to the court's failure to give all requested instructions not given and to all instructions given as requested or suggested by the Government. We have said that this form of generalized objection is insufficient to distinctly state the matter objected to and the grounds for the objection as required by Rule 30, F.R. Crim.P., 18 U.S.C. See Burns v. United States, 10 Cir., 286 F.2d 152. Counsel for Maxfield's only exception was that "inasmuch as the complaint charged that Maxfield was a controlling person in Western States, the court should have instructed the jury that it must so find."

Apparently without contending against the sufficiency of the evidence to go to the jury on the existence of a fraudulent scheme, Maxfield insists that the evidence is entirely insufficient as a matter of law to sustain the allegations in the indictment to the effect that he dominated and controlled the Western States Underwriters or that he had anything whatsoever to do with the sale of Uinta National stock as alleged in the indictment. Instead he points to his strenuous objection to Christopher's operation of Western States and to his protest to the Utah Securities Commissioner. In sum he contends that although he sold no stock, employed no salesmen, supplied no information to the public, and received no money from the sale of stock, he was nevertheless found guilty of all the misdeeds charged to Christopher, with whom he had been found not to have conspired. He says that acquittal on the mail fraud and conspiracy charges required acquittal on the other eight counts. But, as we have recently held following established authority, since each count in an indictment is a separate offense, consistency in the verdict is not necessary. See Burns v. United States, supra; Thomas v. United States, 9 Cir., 227 F.2d 667.

The basic facts are that Maxfield, his brother and others organized and promoted Uinta Finance by a public offering of its stock within the state of Utah. Maxfield was President, Chairman of the Board and dominant officer. Christopher was Sales Manager during part of the stock offering. In May, 1958, Maxfield and at least some of the incorporators of Uinta Finance formed Uinta National Life Insurance Company with a $10,000 paid-in capital structure. The incorporators apparently gave notes for their respective stock subscriptions, and Maxfield thereafter acquired the 9,600 shares of non-voting incorporators' stock. About five months later, he borrowed $125,000 from Uinta Finance to pay for the stock and qualify the insurance company in Utah as a legal reserve company. The insurance company public stock offering was completed in the latter part of 1958. The last block of stock was sold to a former stock salesman for Uinta Finance and Uinta National who in turn sold it to Mid-America Securities.

Early in 1959 Maxfield divided 6,050 shares of his incorporators' stock into 242,000 units and sold it to Uinta Finance for $242,000. His loan account with the insurance company was credited with this amount. It thus appears that the incorporators' stock which Maxfield purchased for the sum of $125,000 was resold to the finance company for $242,000.

Mid-America had been organized by appellant Maxfield's brother in 1955 and apparently thereafter sold to Norman Hays. In 1958 Maxfield negotiated the resale of the company to his brother for the sum of $2,500, paid by a Uinta Finance Company check. Christopher registered as a dealer for Mid-America and apparently became its Sales Manager. Early in 1959 Maxfield negotiated the resale of the company to Hays for $1,500 and arranged with Hays for Mid-America to sell some of the stock which he had sold to Uinta Finance by depositing the stock in a safety deposit box for delivery as and when sold. But, on advice of counsel Hays finally declined to participate in the sale of the stock. Maxfield objected to the competency of these transactions, but the evidence was apparently admitted to show Maxfield's continued interest in the sale of his insurance stock to the public and also as a nexus with the Western States activities. We think it was admissible for that purpose. See Roe v. United States, 5 Cir., 316 F.2d 617.

In the Fall of 1958 Christopher had resigned as Sales Manager for Uinta National and early in 1959 with his wife and others he organized Western States Underwriters. It immediately entered into a contract with Uinta Finance for the sale of Uinta National stock which Maxfield had sold to the finance company. Thus, Christopher was Sales Manager for Uinta Finance when its stock was being offered directly to the public by the company. He was Sales Manager for Uinta National when its stock was being sold directly to the public. After the offering was completed, he became a registered salesman and Sales Manager for Mid-America. He then became Sales Manager for...