Casillas v. State

• Decision Date: 02 July 1986
• Docket Number: No. 304-84,304-84
• Citation: Casillas v. State, 733 S.W.2d 158 (Tex. Crim. App. 1986)
• Parties: Arturo CASILLAS, Jose Aguilar and Omero Luna, Appellants, v. STATE of Texas, Appellee.
• Court: Texas Court of Criminal Appeals

Page 158

733 S.W.2d 158

Arturo CASILLAS, Jose Aguilar and Omero Luna, Appellants, v. STATE of Texas, Appellee.

No. 304-84.

Court of Criminal Appeals of Texas En Banc.

July 2, 1986.

Gerald H. Goldstein, John Convery, Warren Weir, Mark Stevens, San Antonio, for Casillas and Luna.

Albert A. Pena, III, Corpus Christi, for Aquilar.

Ronald Earle, Dist. Atty., and Terrence Keel, Asst. Dist. Atty., Robert Huttash, State's Atty., Austin, for the State.

Before the court en banc.

OPINION ON APPELLANTS' PETITION FOR DISCRETIONARY REVIEW

MILLER, Judge.

Arturo Casillas, Jose Aguilar, Omero Luna, Robert Amaya, and Fernando Hernandez were convicted by a jury for the offense of misapplication of fiduciary property in an amount exceeding $10,000. See V.T.C.A. Penal Code, § 32.45. The jury assessed Amaya's punishment at ten years confinement in the Texas Department of Corrections and a $10,000 fine; the other four appellants each were assessed confinement in the Texas Department of Corrections for a period of twelve years and one day and a $10,000 fine. The appellants were tried jointly, and their appeals were jointly submitted to the Austin Court of Appeals. That court affirmed the judgments of conviction in an unpublished opinion. Casillas, et al. (Tex.App.--Austin, Nos. 3-82-216-CR(T)--3-82-220-CR(T), delivered Nov. 30, 1983). We granted appellants' petitions for discretionary review to examine the Court of Appeals' holdings: (a) that the evidence was sufficient to support the convictions; and (b) that the trial court's refusal to submit requested limiting charges concerning the existence of a conspiracy and the co-conspirator exception to the hearsay rule was not error. We will affirm the decision of the Court of Appeals and the convictions of Casillas, Aguilar and Luna in this opinion. We reverse the convictions of Amaya and Hernandez for insufficiency of the evidence in a companion opinion. See Amaya v. State, 168 S.W.2d 733 (Tex.Cr.App.1986).

I. FACTS

The facts of this case are rather complex, involving many characters and numerous acronyms. We summarize them here, and elaborate further in our discussion of the sufficiency of the evidence.

In 1969 the Mexican American Council for Economic Progress (MACEP) was formed as an anti-poverty, non-profit organization in Austin, Texas. In 1973, MACEP prepared and submitted to the Office of Economic Opportunity (OEO) a grant proposal, pursuant to which MACEP received a $419,000 grant for the economic development of migrant and other seasonally employed farmworkers under Title IIIB of the Economic Opportunity Act of 1964, 42 U.S.C.A. §§ 2861 et seq., repealed, 42 U.S.C.A. § 9912 (West 1983).

Of the $419,000 grant, $150,000 was originally designated to establish an equity loan fund, for purposes of lending "seed" money to farmworkers who wanted to start their own businesses. Rather than establishing the originally proposed loan fund, it was decided by the OEO representative, at the suggestion of appellant Casillas and another MACEP representative, Mr. Harmon Lisnow, to establish a Minority Enterprise Small Business Investment Corporation (MESBIC), to be licensed and regulated by the Small Business Administration (SBA). The MESBIC was named Tejas Investment Corporation (Tejas), and was licensed on January 24, 1975. The $150,000 was adjusted to $155,000, which MACEP used to purchase 51% of the voting stock in Tejas.

Establishing the MESBIC under SBA regulations required private matching funds of $150,000, which took some time for MACEP to accumulate. Because of the delay, the MESBIC was unable to get its SBA license during the original grant period between June 1, 1973 and May 31, 1974. Therefore a second grant of $350,000 was made to MACEP for the period from June 1, 1974 and May 31, 1975. Meanwhile the OEO was absorbed into the Department of Labor (DOL) in 1973, making DOL the grantor agency of government.

Appellant Casillas was involved in securing the original grant for MACEP, in his capacity as president of MACEP. Appellant Aguilar was vice-president at that time, and appellant Luna was vice-president at a later time. Hernandez was MACEP's bookkeeper, while Amaya was initially a MACEP employee and later became director of the Austin Minority Economic Development Corporation (AMEDC), an organization with informal ties to MACEP.

In September of 1975, with MACEP owning and voting its controlling 51% interest in Tejas, a new board of directors was elected for Tejas. The board consisted of all appellants and one other person, Minnie Briones. At that point Aguilar, Luna and Casillas were also directors of MACEP, and voted MACEP's controlling votes in Tejas; Aguilar was also an officer of MACEP. The new Tejas board of directors responded to a critical withdrawal of private funds by deciding to surrender their MESBIC license, reorganize Tejas into a private investment corporation, and create an additional corporation called Perceptions, Inc. The new Tejas transferred $106,000 to Perceptions, Inc., which in turn made unsecured loans with this money to the individual appellants, who started or purchased their own businesses.

II. SUFFICIENCY OF THE EVIDENCE

In reviewing the sufficiency of the evidence to support a criminal conviction, we view all of the evidence in the light most favorable to the verdict and determine whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979); Anderson v. State, 701 S.W.2d 868 (Tex.Cr.App.1985).

Appellants challenge, in various ways, the sufficiency of the evidence to show a misapplication of fiduciary property under V.T.C.A. Penal Code, § 32.45, which provides:

"(a) For purposes of this section:

(1) 'Fiduciary' includes:

(A) trustee, guardian, administrator, executor, conservator, and receiver;

(B) any other person acting in a fiduciary capacity, but not a commercial bailee; and

(C) an officer, manager, employee, or agent carrying on fiduciary functions on behalf of a fiduciary.

(2) 'Misapply' means deal with property contrary to:

(A) an agreement under which the fiduciary holds the property; or

(B) a law prescribing the custody or disposition of the property.

(b) A person commits an offense if he intentionally, knowingly, or recklessly misapplies property he holds as a fiduciary or property of a financial institution in a manner that involves substantial risk of loss to the owner of the property or to a person for whose benefit the property is held."

A. Misapplication

Appellants Casillas and Luna argue that no misapplication was shown because no dealing contrary to an applicable agreement or law was demonstrated. First, the only proof of an agreement was that between MACEP and OEO/DOL, while the indictment alleges a misapplication of property owned by Tejas. They argue that Tejas was not a grantee, MACEP and Tejas were separate organizations, there was no showing that Tejas was privy to the agreement with MACEP, and Tejas was governed by its own by-laws but those were not in evidence. Second, Tejas surrendered its SBA license prior to the time the loans were made so SBA regulations prohibiting self-dealing did not apply, and no other law "prescribing the custody or disposition of property," § 32.45(a)(2)(B), supra, was applicable.

At trial, the State approached the misapplication issue by both available avenues, with evidence of the MACEP grant agreement as well as evidence of two laws that were allegedly violated by appellants. ¹ The Court of Appeals found that the evidence was sufficient to show that the funds were dealt with contrary to the terms of the government grant. The State argues to this Court, and we agree, that the most cogent theory for misapplication is that appellants violated the applicable conflicts of interest regulation governing SBA licensees, 13 CFR 107.1004 (1975). The regulation was discussed by a State's witness, and a copy of it was in evidence for the jury. It provides, in part:

"A Licensee shall not, directly or indirectly, provide Financing to any of its Associates."

Appellants do not challenge the applicability of this restriction to Tejas as a licensee and themselves as associates, prior to September 26, 1975, and there was testimony that the regulation applied to them. They argue instead that the SBA license was surrendered on that date and that the conflict of interest prohibition no longer applied on November 1, 1975, the date of misapplication alleged in the indictment.

On September 26, 1975, all five appellants were serving on the board of directors of Tejas when the decision was made to revoke the MESBIC (SBA) license and reorganize Tejas into a private investment company with no license. Casillas and Luna were authorized to sign checks for the new Tejas, and Luna was named president to replace Mr. Raul Medina, who was asked to resign. On September 30, Casillas wrote to the SBA in his capacity as president of MACEP to inform them of the decision to revoke the license. Appellants' second communication to the SBA regarding the surrender of the MESBIC license was a letter on November 3, 1975, signed by Luna, Casillas and Aguilar in their capacities as officers of Tejas, which purported to provide "the information required by SBA to surrender a MESBIC license." The letter clearly suggests its authors' recognition that the license could not be revoked unilaterally, as it provides the information required by SBA regulation for the surrender of a license, 13 CFR 107.105 (1975). ² Finally, the State's witness from the SBA Mr. Cyr, testified that the license was subsequently surrendered on November 7, 1975, and stated that the letter (State's Exhibit No. 10) was in compliance with a request by the SBA to Tejas as a condition required for surrender of a license. We conclude that the license was not surrendered until November 7, 1975, and that 13 CFR 107.1004, supra,...