State v. Russell

Decision Date10 May 1978
Docket NumberNo. 50378,50378
PartiesBlue Sky L. Rep. P 71,427 STATE of Mississippi v. Clifford RUSSELL.
CourtMississippi Supreme Court

A. F. Summer, Atty. Gen. by W. D. Coleman, Deputy Atty. Gen., Jackson, for appellant.

White & Morse, George E. Morse, Gulfport, for appellee.

Before ROBERTSON, P. J., and LEE and BOWLING, JJ.

LEE, Justice, for the Court:

Clifford Russell was indicted, tried and convicted in the Circuit Court of Harrison County on the charge of selling a security without having first taken proper action to secure an exemption or certificate of authority from the Secretary of State of Mississippi in violation of Mississippi Code Annotated Section 75-71-31 (1972) (felony). After return of the guilty verdict, appellant filed a motion for new trial, and, in the alternative, motion for judgment notwithstanding the verdict. The trial judge sustained the motion for judgment notwithstanding the verdict, which resulted in the acquittal of Russell, and the State of Mississippi appeals here.

The State contends that the court erred in sustaining the motion of the defendant, Clifford Russell, for judgment of acquittal notwithstanding the guilty verdict, and that the case should be reversed and remanded to the trial court for imposition of sentence. Appellee argues that the only statutory provision for the State to appeal is Mississippi Code Annotated Section 99-35-103(b) (1972) which authorizes the State to appeal in a criminal case for decision of law questions only.

There is no factual dispute involved in the instant case. The evidence is uncontroverted that Clifford Russell was acting as a representative of Russell Finance Corporation in the sale of the security (a negotiable promissory note) referred to in the indictment. It is not challenged that the sale took place by Russell when no action had been taken to secure an exemption and was consummated at a time when no certificate of approval for the sale of such security had been issued by the Secretary of State of the State of Mississippi. The proof showed that Russell Finance and Clifford Russell were engaged in investment activity.

I.

Is it a violation of the provisions of Chapter 71 to sell or issue a negotiable promissory note without having first obtained a certificate of exemption from the Secretary of State?

The pertinent statutes applicable to the felony charge are Mississippi Code Annotated Section 75-71-31 (1972), which provides:

"It shall be unlawful for any investment company or dealer or representative thereof, either directly or indirectly, to sell or cause to be sold, or offer for sale, any stocks, bonds or other securities (except as expressly exempted herein and proper action has been taken to secure said exemption) unless and until said secretary of state has approved thereof and has issued his certificate in accordance with the provisions of this chapter, . . . "

and Mississippi Code Annotated Section 75-71-51 (1972), which provides, in part:

"The provisions of this chapter shall not apply to any of the following classes of securities (exempt securities). Any issuer, investment company, or licensed Mississippi dealer may obtain a certificate of exemption, under the provisions set out above, upon the submission of an application, under oath, to the secretary of state. The request for a formal exemption may be submitted by the issuer, investment company, dealer, or its counsel, upon a form furnished by the secretary of state. The issuance of a formal certificate of exemption by the secretary of state shall be prima facie evidence that said securities are exempted from the qualifications and registration provisions of this chapter."

Subsection (8) describes as an exempt security "negotiable promissory notes or commercial paper."

In Section 75-71-31 "proper action" to secure the exemption is not defined. The State contends that this section refers to Section 75-71-51 which sets out the proper action to be taken, to-wit, submitting an application, under oath, to the Secretary of State for a certificate of exemption. Yet, Section 75-71-51 states that the provisions of the chapter shall not apply to any of the classes of securities enumerated therein, which include the promissory note such as the one here sold by appellant. The section further sets out that the issuer, investment company, or dealer may obtain a certificate of exemption and that the request for formal exemption may be submitted upon a form furnished by the Secretary of State. The first paragraph then concludes with the statement that the issuance of a formal certificate of exemption by the Secretary of State shall be prima facie evidence that the securities are exempted.

Chapter 71, which contains all sections of the Blue Sky Laws, authorizes the Secretary of State to adopt regulations for the enforcement of the act, and the rules and regulations promulgated by the Secretary of State specify that obtaining a certificate of exemption and the occupational certificate is a requirement under Section 75-71-51 for the sale of exempt securities. However, the authority to define crimes and provide the punishment therefor is vested exclusively in the Legislature, and it may not delegate that power expressly or by implication nor may an administrative agency enlarge the criminal liability of the statute. Howell v. State, 300 So.2d 774 (Miss.1974). Also, penal statutes are interpreted strictly against the State and are construed liberally in favor of an accused. Ratcliff v. State, 234 Miss. 724, 107 So.2d 728 (1958).

The apparent purpose of the Blue Sky Laws is to protect the public against fraud, but it is also clear that the Legislature did not intend to place an undue restriction on commercial business. As stated above, Section 75-71-31 did not define "proper action" in obtaining the exemption. The fact that appellee acquired or executed the negotiable promissory note may be sufficient to fulfill the intent of the Legislature that the exemption attached. On the other hand, the intent of the Legislature could be expressed to mean that, if a person negotiating the security failed to obtain a certificate of exemption, the burden of proving it exempt rested upon him. The intent of the Legislature could be further expressed that, by obtaining a formal certificate of exemption (prima facie evidence that the security was exempt), the burden of proof shifted to any person challenging that exemption.

We hold that under the undisputed facts of this case, appellee was not in violation of Chapter 71, and specifically, Section 75-71-31.

II.

May the circuit court entertain and grant a judgment notwithstanding the verdict of guilty in a criminal case?

At the conclusion of the State's evidence, appellee moved for a directed verdict of not guilty which was overruled. The motion was renewed at the conclusion of all the evidence and was overruled. The jury returned a verdict of guilty, and, after discharging the jury, motion for judgment notwithstanding the verdict of...

To continue reading

Request your trial
32 cases
  • McGlasten v. State
    • United States
    • United States State Supreme Court of Mississippi
    • November 4, 2021
    ...must be interpreted in favor of the accused." McLamb v. State , 456 So. 2d 743, 745 (Miss. 1984) (emphasis added) (citing State v. Russell , 358 So. 2d 409 (Miss. 1978) ; Carter v. State , 334 So. 2d 376 (Miss. 1976) ; Walton v. State , 219 Miss. 72, 68 So. 2d 87 (1953) ; Terry v. State , 1......
  • Blue v. State, 93-DP-00534-SCT
    • United States
    • United States State Supreme Court of Mississippi
    • February 15, 1996
    ...lesser crime of manslaughter"). Blue points out that this Court has declared its fidelity to the polestar of lenity in State v. Russell, 358 So.2d 409, 412 (Miss.1978) ("penal statutes are interpreted strictly against the State and are construed liberally in favor of an This Court notes tha......
  • Illinois Central R. Co. v. Fordice
    • United States
    • United States District Courts. 5th Circuit. Southern District of Mississippi
    • September 30, 1997
    ...require a strict interpretation of their plain language against the state. McLamb v. State, 456 So.2d 743 (Miss.1984); State v. Russell, 358 So.2d 409 (Miss.1978); Carter v. State, 334 So.2d 376 (Miss.1976); Walton v. State, 219 Miss. 72, 68 So.2d 87 (1953). Applying a strict interpretation......
  • Beckwith v. State, 91-IA-1207
    • United States
    • United States State Supreme Court of Mississippi
    • December 16, 1992
    ...the jury to find the defendant not guilty has the same effect as a jury-deliberated verdict of not guilty. See, e.g., State v. Russell, 358 So.2d 409 at 412-13 (Miss.1978); Agregaard v. Duncan, 252 Miss. 454 at 457, 173 So.2d 416 at 417 (1965); State v. Thornhill, 251 Miss. 718 at 726, 171 ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT