State v. Fairchild
| Decision Date | 18 November 1982 |
| Docket Number | Nos. 15501,15580,s. 15501 |
| Citation | 171 W.Va. 137,298 S.E.2d 110 |
| Parties | , Blue Sky L. Rep. P 71,774 STATE of West Virginia v. Paul R. FAIRCHILD. STATE of West Virginia v. Roger Ames DAMRON. |
| Court | West Virginia Supreme Court |
Syllabus by the Court
1. An indictment for a statutory offense is sufficient if, in charging the offense, it substantially follows the language of the statute, fully informs the accused of the particular offense with which he is charged and enables the court to determine the statute on which the charge is based.
2. "The granting or denial of a motion for a bill of particulars ... rests in the sound discretion of the trial court, and unless it appears that such discretion is abused the ruling of the trial court will not be disturbed." Syllabus Point 7, in part, State v. Nuckols, 152 W.Va. 736, 166 S.E.2d 3 (1969).
3. "If it has been prima facie shown that [a] scheme to defraud was devised by the defendants and jointly promoted by them, then declarations in furtherance thereof, made by any one of them, though the others were not present, are competent evidence against all the parties to the scheme." Syllabus Point 6, Conway v. Bailey, 91 W.Va. 324, 112 S.E. 579 (1922).
4. Records made routinely in the regular course of business, at the time of the transaction or occurrence, or within a reasonable time thereafter, are generally trustworthy and reliable, and therefore ought to be admissible when properly verified.
5. Syllabus Point 1, State v. Starkey, 161 W.Va. 517, 244 S.E.2d 219 (1979).
6. The allowance of leading questions rests largely in the discretion of the trial court, and absent an abuse of such discretion, the trial court's ruling will not be disturbed.
7. The variance between the indictment and the proof is considered material where the variance misleads the defendant in presenting his defense to the charge and exposes him to the danger of being put in jeopardy again for the same offense.
8. To determine whether violations of W.Va.Code §§ 32-1-101(1) and (3) committed during an ongoing criminal scheme to defraud constitute the "same offense" under the double jeopardy clause, we look first to the language of the statute to determine if separate offenses, and thus multiple punishments, were intended, and next to the evidence to determine whether there have been separate crimes meriting separate punishments.
Richard A. Bush, Parkersburg, for appellant Fairchild.
Marvin A. Goldstein, and Blaine C. Myers, Parkersburg, for appellant Damron.
Silas B. Taylor, Asst. Atty. Gen., Charleston, for appellee.
Roger Ames Damron and Paul R. Fairchild, the appellants in these two consolidated cases, appeal from their convictions in separate trials in the Circuit Court of Ritchie County of violations of the Uniform Securities Act, W.Va.Code §§ 32-1-101 through 32-4-418 (1982 Replacement Vol.). Damron was convicted of two counts of soliciting the sale of securities without being duly registered as a broker-dealer, two counts of the sale of unregistered securities, and two counts of sale of securities by fraud and deceit. Fairchild was convicted of two counts of aiding and abetting in the sale of unregistered securities, and one count of aiding and abetting in the sale of unregistered securities by fraud and deceit. We affirm Fairchild's convictions in Case No. 15501, and remand Case No. 15580 for the resentencing of Damron.
In March or April of 1979 Roger Ames Damron began work as a salesman for Lurray, Inc., in Huntington, West Virginia. Lurray was in the business of selling a package deal of movie film and film processing, induced by giving customers a free camera or projector. After approximately one week on the job, Damron went to Lurray's officers with a proposal to purchase the exclusive right to market Lurray's film package in the state of Kentucky. After brief negotiations, Lurray's officers agreed to sell an exclusive Kentucky franchise to Damron for $10,000. Paul Fairchild, a friend and former business associate of Damron's, was present at one of the negotiation meetings. The negotiations ultimately resulted in a written contract signed by Damron and Lurray's officers, and a down payment to Lurray of $2,000.
Although the franchise was made between Lurray and Damron in his personal capacity, Damron planned to incorporate his business and to seek investors in the project. 1 To this end Damron contacted Fairchild, who, for a fee, agreed to supply Damron with the names of potential investors and to show Damron where they lived. On April 11, 1979, Damron and Fairchild traveled to Ritchie County to visit Clyde and Claude Swadley, twin brothers whom Fairchild had suggested might be interested in Damron's venture.
Upon arriving at the Swadleys' home, Damron parked his car out of sight and went to speak to the two brothers alone. These tactics were thought necessary because in 1973 the Swadleys had purchased some stock in an apartment building in Florida from Fairchild. The project was unsuccessful and the Swadleys had engaged the assistance of an attorney to obtain a refund of their investment. Thus, as they later testified, neither of the Swadleys would have been willing to buy stock or stock subscriptions from Damron had they known Fairchild was involved. The Swadleys apparently held no such ill feelings against Damron, even though he had accompanied Fairchild when the Swadleys bought the stock in the apartment building.
While Fairchild remained hidden in the car, Damron told the brothers of his proposed corporation, that it involved home movies and franchises, and would readily make money. He also promised that dividends would start within four months and that the investment would pay off within a year. Damron further promised the Swadleys that if the business did not attract sufficient investors, he would refund their money. Clyde Swadley agreed to purchase 50 shares of stock for $5,000. He paid by check made out to Home Movies, the name of Damron's proposed corporation.
On May 9, 1979, after a corporate charter had been issued to Home Movies, Inc., Damron and Fairchild made a second visit to the Swadleys' home. As on the visit of April 11, Fairchild remained hidden in the car while Damron spoke to the two brothers alone. On this occasion Claude Swadley, like his brother before him, agreed to purchase 50 shares of stock for $5,000, and paid by check made out to Home Movies, Inc.
On neither visit to the Swadleys did Damron mention the involvement of Fairchild. He did not tell the Swadleys that their names had been provided by Fairchild, that Fairchild had shown him the way to their home, or that Fairchild was waiting outside in the car. Further, Damron did not tell the Swadleys that a portion of their investments would be paid to Fairchild as a "consulting fee."
After each of these visits to the Swadleys, Fairchild received a $1,500 "consulting fee" paid out of corporate funds. Also after each sale of stock to the Swadleys, Damron withdrew the same amount from the corporate account as an "advance on Kentucky rights." At the time of each sale to the Swadleys, the stock of Home Movies, Inc., was not registered as a security with the State Auditor, and, although previously licensed in the past, neither Damron nor Fairchild were registered security broker-dealers, agents, or investment counselors in 1979.
In early June 1979, Damron again traveled to Ritchie County to attempt to sell the Swadleys $10,000 more worth of stock. Claude Swadley was at home alone on this occasion and refused Damron's offer to buy any additional shares in Home Movies, Inc. He did, however, provide Damron with the names of three persons who might be interested in the venture. Approximately one week later, Damron informed Claude that none of the three were willing to purchase stock in Home Movies, Inc.
When Clyde Swadley learned of Damron's visit to his brother he became concerned about Damron's apparent lack of progress with Home Movies, Inc. Consequently, Clyde contacted the Securities Division of the State Auditor's office to check into the matter. The Deputy Commissioner of Securities subsequently began an investigation into Damron's dealings with the Swadleys.
When Damron learned of the investigation he telephoned the Swadleys and offered to refund their investment if they would agree not to press their complaint with the State Auditor. In lieu of a cash refund, Damron offered to give the Swadleys some furniture. They refused this offer. Damron subsequently sent the Swadleys an unsecured promissory note for the amount of their investment. The Swadleys refused to accept the note as payment, and sent it instead to the Securities Division of the State Auditor's office.
The Deputy Commissioner's investigation ultimately resulted in the indictment and subsequent conviction of Damron and Fairchild.
Fairchild makes five assignments of error: 1) the trial court erred in overruling the appellant's motion to quash and his motion for a bill of particulars, directed to one count of the indictment; 2) the trial court erred in admitting into evidence hearsay testimony of a codefendant; 3) the trial court erred in admitting into evidence without proper foundation certain business records; 4) the State failed to prove that the securities sold were not exempt from the statutory registration requirement; [171 W.Va. 143] and 5) the State failed to prove...
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