Van Antwerp v. State

Citation358 So.2d 782
Decision Date07 March 1978
Docket Number1 Div. 624
PartiesBlue Sky L. Rep. P 71,456 Garet VAN ANTWERP, alias Garet Van Antwerp, III, alias G. Van Antwerp v. STATE.
CourtAlabama Court of Criminal Appeals

Ian F. Gaston and Robert C. Campbell, III, Mobile, for appellant.

William J. Baxley, Atty. Gen. and George Beck, Deputy Atty. Gen., and Vanzetta Penn Durant, Asst. Atty. Gen., for the State.

BOWEN, Judge.

The appellant was convicted for a willful violation of the fraud provisions of Section 1 of the Securities Act of Alabama, Acts 1959, p. 1318, Act No. 542 (Code of Alabama 1940, Recompiled 1958, 1973 Cum.Supp., Title 53, § 28). The jury assessed a fine of five thousand dollars, and the trial court imposed a sentence of imprisonment in the penitentiary for eighteen months.

On this appeal there are four issues presented for reversing the judgment of conviction: (1) The trial court erred in charging the jury that innocent mistake may support a criminal conviction for fraud; (2) the trial court denied the appellant's constitutional rights in prohibiting defense counsel from arguing the law of the case to the jury; (3) questions propounded by the state to defense witnesses assumed unproved facts and constitute reversible error; and (4) a new trial is required because the grand jury which indicted the appellant and the petit jury which convicted him were selected in an unconstitutional manner.

This court has treated the factual context of this case in Manson v. State, Ala.Cr.App., 349 So.2d 67 (1977). That case contains a lengthy and comprehensive statement of the facts and a detailed analysis of the fraud involved. Much of the evidence in both cases is identical and to the same effect. The appellant has not challenged the sufficiency of the evidence on this appeal. Neither party on appeal has set forth a detailed statement of facts. With regard to each issue we have attempted to state the operative facts. A lengthy statement of the facts, which it would of necessity be, would burden the reader and serve no purpose on this appeal. We see no manner in which it would aid the appellant in the presentation of the issues raised in appealing his conviction. Therefore we will forego a detailed statement of facts in this opinion.


Initially the appellant charges that the trial court erred to a reversal in charging the jury that the appellant would be guilty of criminal fraud if he misrepresented a material fact upon which a party relied to his detriment even though that misrepresentation was made innocently and by mistake.

The objected to portion of the trial judge's oral charge is as follows:

"The third prohibited act set out under the statute, to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit on any person, sets out the words 'fraud' or 'deceit'. I would charge you that a fraud would be a false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury.

"Fraud under the Alabama law referred to under Title 7, Section 108, is this, it is misrepresentations of a material fact made willfully to deceive, or recklessly without knowledge, and acted on by the opposite party, or if made by mistake and innocently, and acted on by the opposite party, would constitute legal fraud.

"The word 'deceit' means a fraudulent and cheating misrepresentation, artifice, or device, used by one or more persons to deceive or trick another, who is ignorant of the true facts, to the prejudice and damage of the party imposed upon. Let me read that again, a fraudulent and cheating misrepresentation, artifice, or device, used by one or more persons to deceive and trick another, who is ignorant of the true facts, to the prejudice and damage of the party imposed upon. A deceit is either the suggestion, as a fact, of that which is not true, by one who does not believe it to be true or an assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true or the suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact, or it could be a promise, made without any intention of performing it. Under Title 7, Section 110, the elements of deceit are set out under this definition: The willful misrepresentation of a material fact, made to induce another to act, and upon which he does act to his injury, will give a right will create what is referred to as deceit. Mere concealment of such a fact, unless done in such a manner as to deceive and mislead, would not be deceit. In all cases of deceit, knowledge of a falsehood constitutes an essential element. A fraudulent or reckless representation of facts as true, which the party may not know to be false, if intended to deceive, is equivalent to a knowledge of a falsehood."

It is true, as the state argues, that the legislature may, in enacting a statute for the ultimate protection of society and aimed at preventing its exploitation, forbid the doing of an act and make its commission criminal without regard to the intent or knowledge of the doer. Smith v. State, 223 Ala. 346, 136 So. 270 (1931); Allen v. State, 33 Ala.App. 70, 30 So.2d 479 (1947); Leonard v. State, 38 Ala.App. 138, 79 So.2d 803 (1905); Haywood v. State, 280 Ala. 171, 190 So.2d 728 (1966); State v. Southern Express Co., 200 Ala. 31, 75 So. 343 (1917); Fiorella v. City of Birmingham, 35 Ala.App. 384, 48 So.2d 761 (1950); McKinney v. State, 50 Ala.App. 271, 278 So.2d 719, cert. denied, 291 Ala. 789, 278 So.2d 724 (1973). However, under an indictment charging a violation of the Alabama Securities Act the state has the burden of showing that the conduct was willful and unlawful. This is "the language of the statute, chosen deliberately by the Legislature". Manson v. State, Ala.Cr.App., 349 So.2d 67, 81, cert. denied, Ala., 349 So.2d 86 (1977).

Title 53, Section 28, Code of Alabama 1940, Recompiled 1958 (1973 Cum.Supp.), provides that "(i)t is unlawful for any person, in connection with the offer, sale or purchase of any security, directly or indirectly" to imply, make, or engage in any fraudulent or prohibited practice. Title 53, § 44(a), states that

"Any person who willfully violates any provisions of this chapter, shall upon conviction be fined not more than $5,000.00 or imprisoned not more than three years, or both." (Emphasis added)

Thus the statute employing the term "willful" requires proof of the guilty knowledge or mens rea. Dixon v. State, 40 Ala.App. 465, 115 So.2d 262 (1959). A "willful" act may be described as one done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Padgett v. State, 36 Ala.App. 355, 56 So.2d 116 (1952). This excludes the concept of criminal liability for a misrepresentation made innocently and by mistake in a prosecution for securities fraud under Title 53, Section 28, Code.

Having determined the intent required we must now examine the oral charge of the trial court. In reviewing the propriety of a trial court's jury charge, it is the responsibility of this court to consider the charge in its entirety and as a whole without isolating statements or sentences out of context. See cases cited at 6A Alabama Digest, Criminal Law, k822(1).

In reviewing the entire charge we find that the following instructions were given after the objectionable definition of fraud quoted above.

"The penalty section that I have just read to you, Section 44, sets out that the violation must be willful. I, therefore, charge you that willful means proceeding from a conscious motion of the will or voluntary. Willful means intending the result which actually comes to pass. Willful means designed, and willful means intentionally as opposes to accidentally or involuntarily. A willful act has been defined as being one done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently.

"The definition of 'willful' has the word 'intentional'. I would charge you that what intend means is design or resolve or determination with which a person acts. Intent being a state of mind, is rarely susceptible of direct proof, but must ordinarily be inferred from the facts.

"I would charge you that willfulness could exist where an ordinary person under similar circumstances should have known or could have known by the exercise of reasonable diligence that the statements were false or willfulness could exist where a defendant has demonstrated a reckless disregard or an indifference to representing the truth or did not use the means at hand to determine the true facts."

When this portion of the charge is read in conjunction with the objected to portion it is clear that the jury was instructed that they could convict only if they found that the fraud was willful. Any error or tendency to mislead contained in the definition of fraud was cured by the subsequent instructions. Foster v. State, 46 Ala.App. 344, 241 So.2d 903 (1971); Langston v. State, 16 Ala.App. 123, 75 So. 715 (1917).

The rule of review in this regard is that the general charge of the court must be considered and construed as a whole and in connection with the evidence, and if, when so construed it asserts a correct proposition applicable to the evidence, a disconnected part or sentence is not reversible error, although it may not express all the necessary constituents of the offense. Johnson v. State, 33 Ala.App. 159, 31 So.2d 667, cert. denied, 249 Ala. 433, 31 So.2d 670 (1947).

The trial court also gave the following written requested charges of the...

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