Koah v. State
| Decision Date | 16 July 1980 |
| Docket Number | No. 57019,No. 3,57019,3 |
| Citation | 604 S.W.2d 156 |
| Parties | Blue Sky L. Rep. P 71,619 Chester B. KOAH, Appellant, v. The STATE of Texas, Appellee |
| Court | Texas Court of Criminal Appeals |
Michael R. Gibson, El Paso, for appellant.
Steve W. Simmons, Dist. Atty., and Douglas Gelo, Asst. Dist. Atty., El Paso, Robert Huttash, State's Atty., Austin, for the State.
Before DALLY, W. C. DAVIS and CLINTON, JJ.
This is an appeal from a conviction for sale of unregistered securities pursuant to Article 581-29, V.A.C.S., commonly referred to as the Blue Sky Law. Punishment was assessed at confinement for one year.
Inasmuch as appellant's first six grounds of error pertain to alleged error in the indictment, it is necessary to first set out the indictment, which states in pertinent part:
". . . on or about the 30th day of June, A.D., 1973, and before the presentment of this indictment, in the County and State aforesaid, Chester B. Koah did then and there unlawfully and intentionally engage in the business of a dealer in securities, and was then and there a dealer in securities by selling, offering for sale, soliciting subscriptions to and orders for securities, and did then and there unlawfully and intentionally sell and offer for sale to DALE AND MONICA JOHNSON and did then and there unlawfully and intentionally solicit of and from DALE AND MONICA JOHNSON a subscription to and order for a certain security, to wit:
AGREEMENT
This agreement entered into this 30th day of June, 1973, between Dale Johnson hereinafter referred to as Investor and K-I-S Research, hereinafter referred to as Company.
In consideration of the sum of $1000 00 Investor does hereby own 1/4 of 1 per cent of said Company.
1. Company agrees to proceed with the necessary research and development for the manufacturer (sic) and sale of the various items when warranted by capitalization of said Company.
2. It is understood this is a venture capital investment in the Company and not limited to a few specific items.
3. The Company agrees to continue to research and develop various new
products for the consumer and to invest and diversify within the various segment of the capital investment field.
4. Company agrees Investor will be named to the Board of Directors when ownership reaches or exceeds (2%) two percent.
5. Company agrees that a minimum of ten percent (10%) of net profit accrued in each Fiscal Year will be disbursed to owners of record.
6. It is further understood that investor agrees as follows. No sale of investors holdings in said Company shall be made without prior written notice to the Chief Executive Officer, Mr. Chester B. Koah at the Company address. The Company shall have a ninety (90) day option to purchase said holdings.
This agreement executed this 30th day of June, 1973, in the City of El Paso, County of El Paso, State of Texas and authorized by Chester B. Koah, and/or Samantha Koah, designated officers of K-I-S Research.
Investor
Chester B. Koah
Chester B. Koah
Chief Executive Officer
Samantha Koah
Witness
and said security was issued after September 6, 1955, and was then and there not registered by notification by and with the Securities Commissioner of the State of Texas, and said security was then and there not registered by coordination by and with the Securities Commissioner of the State of Texas, and then and there no permit for the sale of said security had been granted by the Securities Commissioner of the State of Texas, all as is provided by law in such cases and the said security was not then and there a duly registered security, duly registered as such by and with the Securities Commissioner of the State of Texas;
And the Grand Jurors aforesaid, upon their oaths aforesaid in said County and State, at said Term, do further present to said Court that Chester B. Koah on or about the 30th day of June, A.D., 1973, and before the presentment of this indictment, in the County and State aforesaid, did then and there unlawfully and intentionally engage in the business of a dealer in securities, and was then and there a dealer in securities by selling, offering for sale, soliciting subscriptions to and orders for securities and did then and there unlawfully and intentionally sell and offer for sale to DALE AND MONICA JOHNSON and did then and there unlawfully and intentionally solicit of and from DALE AND MONICA JOHNSON a subscription to and order for a certain security, to wit:
(Agreement)
without the said Chester B. Koah having first been duly registered as a dealer in securities by the Securities Commissioner of the State of Texas as is provided by law in such cases, and he, the said Chester B. Koah was then and there not a duly registered dealer in securities, duly registered as such by and with the Securities Commissioner of the State of Texas;
and the Grand Jurors aforesaid, upon their oaths aforesaid in said County and State, at said term, do further present to said Court that Chester B. Koah on or about the 30th day of June, A.D., 1973, and anterior to the presentment of this indictment, in the County and State aforesaid, did unlawfully and fraudulently sell and offer for sale to DALE AND MONICA JOHNSON a security, to wit:
(Same Agreement)
and the said Chester B. Koah did then and there commit fraud upon the said DALE AND MONICA JOHNSON by willfully, fraudulently and knowingly representing that:
(1) K.I.S. Research had the necessary toolmaking capability and complete manufacturing and package facility to begin full-scale production; and
(2) Returns on the investment of about 20% would be received in about 18 months.
and the said Chester B. Koah then and there knew that said representations were false and the said Chester B. Koah made said false representations for the purpose of inducing the said DALE AND MONICA JOHNSON to purchase said security and the said false representations were misrepresentations of material fact;
against the peace and dignity of the State."
In grounds of error two and four, appellant claims that the indictment is defective for failure to allege a culpable mental state. The indictment states that appellant intentionally sold unregistered securities and appellant maintains that the proper culpable mental state should be "knowingly." It is the appellant's position that the intentional selling of an unregistered security is not an offense unless the actor had knowledge that the security was unregistered. Article 581-29(A), (C), supra, does not prescribe a culpable mental state, nor does it plainly dispense with any mental element. See V.T.C.A. Penal Code, Sec. 6.02, Subsections (c), (d) and (e) of Section 6.02 provide:
"(c) If the definition of an offense does not prescribe a culpable mental state, but one is nevertheless required under Subsection (b) of this section, intent, knowledge, or recklessness suffices to establish criminal responsibility.
(d) Culpable mental states are classified according to relative degrees, from highest to lowest, as follows:
(1) intentional;
(2) knowing;
(3) reckless;
(4) criminal negligence.
(e) Proof of a higher degree of culpability than that charged constitutes proof of the culpability charged."
This indictment, which alleges the highest culpable mental state, is sufficient to charge a culpable mental state. 1 Compare with indictment in Shappley v. State, 520 S.W.2d 766 (Tex.Cr.App.1974). Both grounds of error are overruled.
In ground of error number one, appellant contends that the trial court erred in refusing to grant his motion to quash the indictment on the basis that the State alleged three offenses in one indictment, in violation of Article 21.24, Vernon's Ann.C.C.P. The penal provisions of the Blue Sky Law are found in Article 581-29. This Article provides, in part:
"Any person who shall:
A. Sell, offer for sale or delivery, solicit subscriptions or orders for, dispose of, invite offers for, or who shall deal in any other manner in any security or securities without being a registered dealer or salesman or agent as in this Act provided shall be deemed guilty of a felony, and upon conviction thereof shall be sentenced to pay a fine of not more than Five Thousand Dollars ($5,000) or imprisonment in the penitentiary for not more than ten (10) years, or by both such fine and imprisonment.
B. Sell, offer for sale or delivery, solicit subscriptions to and orders for, dispose of, invite orders for, or who shall deal in any other manner in any security or securities issued after September 6, 1955, unless said security or securities have been registered or granted a permit as provided in Section 7 of this Act, shall be deemed guilty of a felony, and upon conviction thereof shall be sentenced to pay a fine of not more than Five Thousand Dollars ($5,000) or imprisonment in the penitentiary for not more than ten (10) years, or by both such fine and imprisonment.
C. Engage in any fraud or fraudulent practice in the sale, offering for sale or delivery of, invitation of offers, or dealing in any other manner in any security or securities shall be deemed guilty of a felony, and upon conviction thereof shall be sentenced to pay a fine of not more than Five Thousand Dollars ($5,000) or imprisonment in the penitentiary for not more than ten (10) years, or by both such fine and imprisonment."
This indictment alleges three offenses: (1) selling unregistered securities, (2) dealing in securities without being a registered dealer and (3) fraudulently selling and offering to sell a security. These alleged offenses all arose out of a single transaction.
The State may allege, in a single indictment, two or more offenses in separate counts, if the offenses arise out of the same incident, act, or transaction. Crocker v. State, 573 S.W.2d 190 (Tex.Cr.App.1978); Vannerson v. State, 408 S.W.2d 228 (Tex.Cr.App.1966). See Steambarge v. State, 440 S.W.2d 68...
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