People v. Sears

• Decision Date: 29 April 1954
• Docket Number: Cr. 5048
• Citation: 124 Cal.App.2d 839,269 P.2d 683
• Court: California Court of Appeals Court of Appeals
• Parties: , Blue Sky L. Rep. P 70,231 PEOPLE v. SEARS et al.

Page 683

269 P.2d 683

124 Cal.App.2d 839, Blue Sky L. Rep. P 70,231

PEOPLE v. SEARS et al.

Cr. 5048.

District Court of Appeal, Second District, Division 2, California.

April 29, 1954.

Hearing Denied May 27, 1954.

Edmund G. Brown, Atty. Gen., William E. James, Deputy Atty. Gen., S. Ernest Roll, Dist. Atty., Jere J. Sullivan, Deputy

Dist. Atty., Robert Wheeler, Deputy Dist. Atty., Los Angeles, for appellant.

Gendel & Raskoff, by Bernard Shapiro, Los Angeles, for respondents.

MOORE, Presiding Justice.

Respondents were accused of having violated the Corporate Securities Law as incorporated in sections 25009 and 26104 of the Corporations Code. The information contains 19 counts. The first count charges them with a criminal conspiracy under which twenty overt acts are declared. Each of counts II to XIII, inclusive except XII, charges respondents jointly with crimes of 'Violation of Corporate Securities Law' in that respondents in Los Angeles County sold and issued to designated persons for specified sums of money, shares of stock in the Sierra Nevada Oil Company, a corporation organized under the laws of the State of Nevada for profit, without first having applied for and secured from the Commissioner of Corporations of California a permit so to do. By count XII and by each of counts XIV to XIX, respondent Sears is alleged to have committed the crime of Grand Theft in that, in Los Angeles County, California, on a date specified 'said Louis A. Sears did * * * feloniously take' a designated sum of money from a party named. After respondents had been arraigned, they filed a motion under section 995 of the Penal Code to set aside the information on the ground that respondents had been committed without reasonable or probable cause. After a hearing on the motion, the trial court granted the demands of respondents and their bonds were exonerated. The matter is here on the appeal of The People.

The question for decision on a motion to dismiss an information under Penal Code section 995 is not whether the accused is guilty of the crime charged, but only whether the evidence received by the Committing Magistrate was sufficient to establish a reasonable cause to warrant the filing of the information. This means that if the proof heard at the examining trial would lead a man of ordinary caution or prudence to believe, and sincerely entertain a strong suspicion of the guilt of the defendant, even though there be some doubt, and that there is reasonable cause for committing him, the information must be filed. People v. Platt, 124 Cal.App.2d 123, 268 P.2d 529; Lorenson v. Superior Court, 35 Cal.2d 49, 56, 216 P.2d 859; People v. George, 95 Cal.App.2d 425, 429, 213 P.2d 33. In the light of the foregoing we turn to the record of the Committing Magistrate for a view of the proof made.

The Evidence

In proof of each overt act alleged under count I and of the remaining 18 counts of the indictment, it was proved by Deputy Corporation Commissioner Harshbarger and exhibits from the files of the office of the Commissioner of Corporations that after the Department had refused to grant an 'open' permit to Western Research Laboratories, Inc., on the application of respondent Sears filed November 25, 1949, and the abandonment of the application on April 26, 1950, both respondents turned their attention to the Sierra Nevada Oil Company of Nevada, herein designated 'oil company' or 'the company.' Its Articles of Incorporation were filed in Nevada on February 15, 1950 at the request of Louis A. Sears. The latter and his wife were two of the original directors. Respondent Sears whose home was at Altadena, California, was president on September 11, 1952, Victor C. Rose of Bellflower was vice-president, and Rex H. Kaylor of Long Beach, secretary. No mention of the oil company was made by anyone to Mr. Harshbarger prior to the abandonment of the application of Western Research Laboratories. But on March 23, 1951, the Corporation Commissioner of California issued a 'Desist and Refrain Order' and forwarded a copy thereof to the oil company at Las Vegas, Nevada, and to the respondents. It forbade them and the oil company 'to sell or offer for sale, negotiate for the sale of or deal in any of the shares or other securities of Sierra Nevada Oil Company, a Nevada Corporation, in the State of California, for the reason that the Sierra Nevada Oil Company * * * has no permit' etc. Forms of application for stock in the oil company had been printed and given by Sears to prospective buyers of shares. The witness Bremner saw them in Sears' home in Altadena between April and June 1950. At the foot of such form letter was the note: 'Please note--the check is payable to Sierra Nevada Oil Co., and is being sent air-mail special. Please return stock certificates registered mail.'

Despite the 'desist order' neither the oil company nor either respondent ever obtained or applied for a permit to sell the company shares in California.

Also, respondents pursued their objective of selling the shares of the oil company. The witness Dr. Kaylor of Long Beach was invited to attend a meeting at Sears' home in 1950. He there met respondents for the first time. Subsequently on October 14, 1950, Dr. Kaylor forwarded from Long Beach a cashier's check in the sum of $800 to the oil company at Las Vegas, Nevada. In doing so, he used the form-letter, Exhibit H, supplied by Sears at his home. He received from the company its certificate 399-a for 800 shares signed by Louis A. Sears, president. It was made to Dr. Kaylor and his wife, and came by mail to his office. On the occasion of the doctor's visit to Sears' home, he met about fifty people, including the witnesses Van Laar and Jacobs. Respondents both made use of maps, talked about money and an oil company and its lands near Worland, Wyoming. On November 4, 1950, Dr. Kaylor forwarded a cashier's check for $300 with the application form letter, Exhibit H, to the oil company at Las Vegas, Nevada, and received through the mail a certificate for 300 shares of its stock. Again, on November 20 he forwarded a cashier's check for $500 to the oil company accompanied by an application for stock on the H form letter supplied to him by Sears. He received by mail the company's certificate for 500 shares. On a second visit to the Sears home he found respondents and the same group who had attended his first meeting; the conversations were about oil. But Dr. Kaylor did not confine his investments to purchases of stock. In April 1951 after a meeting at Vogel's home and telephone conversation with Sears in Worland, he purchased cashiers' checks for $9,000 and mailed them to Sears at Worland. Two months later he received at his home in Long Beach Sears' note for $9,000. He never received money or stock for the $9,000.

After meeting both respondents in Las Vegas, Mr. Rex Kaylor met with Kiers at the home of Mr. Vogel at Bellflower. He told Sears by telephone he would loan the oil company $10,000 and Sears said he would sign the note and promised 'that at some future date when and if it became legal that we should receive stock dollar for dollar.' Sears told the witness that the latter could not get stock immediately; it was not legal then to give stock. On the next day, April 16, Mr. Kaylor sent by mail to Sears at Worland a cashier's check for $10,000. It bears stamp of Security First National Bank in Altadena, April 23, 1951. While visiting Sears at Worland in May 1951, Mr. Kaylor agreed to loan a second $10,000 and on his return to Long Beach on June 2 he purchased a cashier's check for that amount payable to Louis A. Sears and mailed it to the payee at Worland. Sears promised Mr. Kaylor at Worland that on his return to Altadena, he would give Kaylor a note for the money. When he arrived home in late June he forwarded his promissory note to Kaylor, dated April 16, 1951, for $20,000. Immediately thereafter Kaylor was appointed treasurer of the company. On Sears' visit to the Kaylor home in June, he made another loan of $4,250 and received Sears' promissory note for that sum. He never received either stock or cash in payment of the notes. While the loans were to Sears, he told Kaylor it was to be used for the company.

The witness Van Laar from his home at Downey, California, forwarded by mail six separate cashier's checks or money orders to the oil company at Las Vegas and at his home received by mail six separate certificates for shares of the company's stock, made to Van Laar or to members of his family aggregating 1450 shares.

By use of the mail and by applications on the H-form letter, the witness Vogel from his home in Los Angeles County forwarded to the company at Las Vegas or Worland, seven applications for its shares and made two loans of $1,000 and $1,350. Also, by mail he received certificates for the total of 2050 shares of its stock and Sears' note for $2,350.

The witness Jacobs lived at South Gate, California. Early in 1950 Kiers told him of the oil company. He visited the drill site in Cajon Canyon. He purchased shares in June, July, August and September, a total of 2100. All was accomplished by sending cashier's checks to the office of the company at Las Vegas and receiving the shares by mail at South Gate. He attended eight meetings at Sears' home and a stockholders' meeting in Las Vegas. On February 17, 1951, he forwarded by mail from Lynwood, California, to the company at Las Vegas, a money order for $500 for its shares and received a certificate for 500 shares. When he attended a meeting at Sears' home about March 15, 1951, both respondents were present. At the meeting of April 1, 1951, Sears told him that the corporate funds were tied up; that he needed money to keep the field at Worland in operation; that he would execute his note for moneys loaned and give the money to the corporation. April 16, 1951, he mailed his check for $1,000 to Sears at Las Vegas and in return received Sears' promissory note for...