People v. Love

• Decision Date: 08 February 1924
• Docket Number: No. 15570.,15570.
• Citation: 310 Ill. 558,142 N.E. 204
• Parties: PEOPLE v. LOVE et al.
• Court: Illinois Supreme Court

310 Ill. 558

142 N.E. 204

PEOPLE

v.LOVE et al.

No. 15570.

Supreme Court of Illinois.

Dec. 19, 1923.

Rehearing Denied Feb. 8, 1924.

Error to Winnebago County Court; Fred E. Carpenter, Judge.

Malcolm A. Love, Ernest E. Lewis, and Charles F. Buman were convicted of violating the Illinois Securities Law, and they bring error.

Affirmed.

Thompson, J., dissenting.

Harry B. North, Early & Early, William D. Knight, and B. J. Knight, all of Rockford, for plaintiffs in error.

Edward J. Brundage, Atty. Gen., William Johnson, State's Atty., of Rockford, and Edward C. Fitch, Asst. Atty. Gen. (A. B. Louison, of Rockford, of counsel), for the People.

STONE, J.

Plaintiffs in error, Malcolm A. Love, Ernest E. Lewis, and Charles F. Buman, were indicted in the circuit court of Winnebago county for selling and offering to sell securities known as class D under the Illinois Securities Law (Smith-Hurd Rev. St. 1923, c. 121 1/2, §§ 96–137) withoutcomplying with that law. The cause was certified to the county court of that county for trial and comes here for review, a constitutional question being involved.

Plaintiffs in error Love and Lewis were president and secretary of the American Engineering & Development Company. The indictment consists of three counts. The first charges that plaintiffs in error, as agents of the American Engineering & Development Company, a corporation, the issuer of certain securities in class D, unlawfully sold and offered to sell to John W. Howard 10 shares of the capital stock of said corporation without compliance with the provisions of the Illinois Securities Law. The second count charges the sale of such stock to Howard. The third count is in substance the same, except that it charges more fully the failure to comply with the Securities Law on the part of the corporation. A motion to quash the indictment was overruled. A bill of particulars was ordered filed. This described the American Engineering & Development Company more in detail, alleging also that the defendants employed Marion F. Ambrosius, of Rockford, Ill., to act as their agent and the agent of the corporation in the sale and disposition of the stock, and that the defendants in various ways aided, abetted and assisted Ambrosius to sell to Howard the 10 shares of capital stock referred to in the indictment and received the proceeds from such sale; that the stock was signed by Love as president and Lewis as secretary; that, while the purported face value of the stock was $10 a share, it was, in fact, at the time of the sale of no market value, but was purely speculative and worthless.

The contentions of the plaintiffs in error are, that paragraph 5 of section 37 of the Securities Law (section 132) is unconstitutional as applied to criminal cases, that the facts did not bring the sale within the prohibition of the statute, and that the court erred in instructions to the jury and in the admission of evidence. The form of the certificate of the secretary of state appears not to have been objected to.

Concerning the first contention, it is argued that the act denies a defendant the right to be confronted by the witnesses against him and gives to the secretary of state the right to prove defendant guilty without testifying; that he may thereby decide the ultimate fact in dispute without appearing in court. The certificate of the secretary of state put in evidence stated that he is the keeper of the records filed under the Securities Act, and further as follows:

‘I have searched the said records and documents and find that the American Engineering & Development Company has not complied with the provisions of the Illinois Securities Law * * * respecting its securities and has not filed the statements and documents specified and required in and by said acts.’

Paragraph 5 of section 37 provides that:

‘In any prosecution, action, suit or proceeding before any of the several courts of this state based upon or arising out of or under the provisions of this act, a certificate under the seal of state, duly signed by the secretary of state, showing compliance or noncompliance with the provisions of the Illinois Securities Law, respecting the securities in question or respecting compliance or noncompliance with the provisions of the act by any issuer, solicitor, agent, broker, dealer or owner, shall constitute prima facie evidence of such compliance or of such noncompliance with the provisions of this act, as the case may be, and shall be admissible in evidence in any action at law or in equity to enforce the provisions of this act.’

The certificate required by the act does not call for the secretary's conclusions concerning the guilt or innocence of one accused of a breach of the law, but is a certificate of the condition of the records in his office concerning the documents required to be filed and is to be taken as prima facie evidence of such state of his records. By this section the Legislature said, in effect, that the certificate of the secretary of state shall be taken as prima facie evidence of the facts therein stated. Its evidence purpose is to avoid the necessity of transporting the records from one part of the state to another, or calling individuals out of the office of the secretary of state to travel to different parts of the state to act as witnesses in cases brought under the law. To so require would place an unreasonable burden upon the state.

The act requires that the filing of certain statements specified therein shall constitute compliance with the act, and, unless they are such statements as the act requires, the secretary of state is not allowed to file them. His certificate, therefore, in cases where the documents required by the act have not been filed, is to the effect that the records in his office do not show the filing of the statements required by the statute. If, on the other hand, the statute has been complied with, a defendant in a criminal or other case is entitled to have the certificate of the secretary of state as to statements filed. Conclusions of the secretary of state as to whether or not statements and documents filed in his office by the officers of any corporation constitute a compliance with the law have no place in the certificate here referred to. If the statements comply with the law, the secretary of state is required to file them; if they do not, the statute provides that they shall not be filed. Section 2 of the act (section 97) provides that the word ‘file’ or ‘filing’ shall mean the indorsement of the word ‘filed’ on any statement or document received, for the purpose of showing that in the opinion of the secretary of state the provisions of the act have been complied with. The discretion required to be exercised by him lies in determining, before filing, whether the statements offered are such as the act requires. By section 18 of the act (section 113) his decision may be reviewed by the circuit court of Sangamon county. Until such statements are filed no one has any right to sell class D stock of such corporation.

Plaintiffs in error do not contend that they filed with the secretary of state the documents required by law. They say they delivered papers to one James A. Davis in Chicago, who told them to go ahead and sell their stock, and if they had any trouble to come and see him. He was not shown to be connected with the office of the secretary of state or authorized to receive papers for filing in that office. One Arthur G. Davis testified that he had searched the records of the office of the secretary of state and found no documents specified in the act to be filed. There is no evidence of such filing. The certificate of the secretary of state in this case contains a conclusion, and was not in that condition competent as evidence, and should not have been admitted in that form. As noncompliance with the statute is obvious from the undisputed evidence in the case, we are unable to see wherein defendants were injured by the admission of that part of the certificate offering a conclusion. Though it was error to admit the certificate in the form presented, we are of the opinion that this error is not sufficent to require a reversal of the judgment in this case.

While the Legislature does not have power to declare what shall be conclusive evidence (People v. Rose, 207 Ill. 352, 69 N. E. 762), no one has any vested right in a rule of evidence either in a criminal or civil case, and there is no constitutional prohibition against the Legislature changing it so long as it leaves to a party either in a criminal or civil case a fair opportunity to make his defense and to submit all the facts to the jury. The fact that the statute makes the certificate of the secretary of state prima facie evidence of the facts therein stated does not make such act void, as contravening the Constitution. People v. Beck, 305 Ill. 593, 137 N. E. 454;People v. Falk (No. 15527) 141 N. E. 719;Johnson v. Pendergast, 308 Ill. 255, 139 N. E. 407. Nor is the section void as depriving the accused of a right to meet witnesses face to face. Such doctrine has no application to documentary evidence of this character. Sokel v. People, 212 Ill. 238, 72 N. E. 382;Tucker v. People, 122 Ill. 583, 13 N. E. 809. The certificate of the secretary of state is an official act under the seal of the state, required...