State v. Silverman, 146.

• Decision Date: 31 January 1936
• Docket Number: No. 146.,146.
• Parties: STATE v. SILVERMAN.
• Court: New Jersey Supreme Court

183 A. 178

STATE

v. SILVERMAN.

No. 146.

Court of Errors and Appeals of New Jersey.

Jan. 31, 1936.

Error to Supreme Court.

Samuel W. Silverman was convicted of violating statute prohibiting publication and circulation of false information respecting securities, and he brings error.

Affirmed.

On error to the Supreme Court, in which Mr. Justice Lloyd filed the following opinion :

"Plaintiff in error was convicted of violating chapter 318 of the Laws of 1913 [Comp.St.Supp. 1924, § 52—212h], which provides in part that: Any person, firm, corporation, * * * who, with intent to sell * * * securities * * * makes, publishes, disseminates, circulates, or places before the public * * * in the form of a * * * circular, * * * an advertisement of any sort regarding * * * securities * * * so offered to the public, which advertisement contains any as-sertation, representation or statement of fact which is untrue, deceptive or misleading, shall be guilty of a misdemeanor.'

"The first point argued is that the indictment is fatally defective in failing to allege that the documents issued were known to contain representations of fact which were untrue, deceptive, and misleading.

"The question is one of interpretation. The act does not by its terms make guilty knowledge a necessary element in the commission of the offence, and it is contended that, while the Legislature has power to declare the improper conduct of those subject to its jurisdiction to be criminal and subject to judicial penalties, unless the contrary legislative intent clearly appears the law will not be so construed as to make the act criminal in the absence of a criminal intent.

"The plaintiff in error was president of the New Jersey Bond & Mortgage Corporation and as such was charged with preparing for public use and advertising purposes a circular in which, according to the state's proofs, he grossly misrepresented the assets of the corporation; the circular being issued for the purpose of the sale of the bonds therein offered as an investment.

"There are cases in abundance holding that a forbidden act is completed in a legal sense when the act is done, whether with or without intent or guilty knowledge. There are other cases holding a legislative intent to make guilty purpose essential. The dividing line is aptly illustrated in such cases as Halsted v. State, 41 N.J.Law, 552, 32 Am. Rep. 247, and State v. Kuehnle, 85 N.J. Law, 220, 88 A. 1085, Ann.Cas. 1916A, 69, in the first of which the mere commission of the act was held to be criminal, and in the latter as requiring a corrupt motive.

"We think the statute in the present case comes under the former classification. In the Halsted Case the offense dealt with was that of exceeding appropriations by a board of chosen freeholders. Here it was the issuance of a circular containing assertions of fact respecting the company's financial standing. The facts stated in the circular were intended to be relied upon by the public as a basis of investment. The plaintiff in error was president of the company and these facts were or should have been within his knowledge in preparing and issuing the circular. The outside public to whom the bonds were to be offered could in the nature of things have no knowledge except that thus conveyed to them. It is to be noted that...