Vigil v. State
| Decision Date | 15 February 1977 |
| Docket Number | No. 75--602--CR,75--602--CR |
| Citation | 76 Wis.2d 133,250 N.W.2d 378 |
| Parties | Albert T. VIGIL, Plaintiff in Error, v. STATE of Wisconsin, Defendant in Error. |
| Court | Wisconsin Supreme Court |
Jack E. Schairer, Madison (argued), for plaintiff in error; Howard B. Eisenberg, State Public Defender, on the brief.
Betty R. Brown, Asst. Atty. Gen. (argued), with whom on the brief was Bronson C. La Follette, Atty. Gen., for defendant in error.
On February 11, 1975 the plaintiff in error (hereinafter defendant) was convicted in a trial before the court of violation of secs. 553.21(2), and 553.52(1), Stats.1973 which are part of the Wisconsin Franchise Investment Law. 1
Sentence was withheld and the defendant was placed on probation for three years and ordered to pay restitution to the alleged victim. The trial court denied post-conviction relief under sec. 974.06, Stats. Writs of error were issued by this court to review the judgment of conviction and the order denying post-conviction relief.
The principal questions on appeal are whether the evidence at the preliminary hearing was sufficient to bind the defendant over for trial; whether sec. 553.21(2) is unconstitutionally vague and overbroad; whether the defendant was denied due process of law by the trial court's refusal to grant a continuance to obtain private counsel; whether the trial court properly convicted the defendant notwithstanding its failure to use the word 'guilty' in its finding of violation of the statute from the bench; and whether the evidence was sufficient to sustain the conviction of guilt.
On July 1, 1974, the defendant was charged in a complaint of being 'a person in control of a franchisor' who willfully sold a registered franchise in violation of an order of registration issued by the Commissioner of Securities pursuant to sec. 553.27(2) 2 Stats. The order required the defendant to deposit proceeds from the sale of franchises in an escrow account within forty-eight hours of their receipt. Violation of the order is a felony under sec. 553.52(1). At the preliminary hearing the court refused to permit the defendant to call a witness the defense claimed would rebut the testimony of a state's witness. An offer of proof was made to this effect. The defendant was bound over and pleaded not guilty to the information on August 28, 1974. Defense requests for a continuance to retain private counsel to replace the Legal Aid attorney furnished by the court were denied.
The defendant organized the Wisconsin Private Carriers Corporation (WPCC) the purpose of which was to distribute advertising door-to-door through a network of franchised dealerships each of which was to contain ten routes. A dealership cost $10,000 and a route cost $1,000. Income was to be generated by the sale of both advertising and dealerships. In March, 1973 WPCC applied to the Wisconsin Commissioner of Securities to obtain an order of registration permitting the corporation to sell dealerships. An order was issued effective April 17, 1973 and contained four conditions, one of which was that all franchise fees and other consideration obtained in connection with the sale of franchises were to be put in escrow within forty-eight hours of receipt and held until ordered released by the commissioner. An escrow account was established April 16, 1973 between the defendant as president of WPCC and Midland National Bank in Milwaukee. Neither deposits nor withdrawals were ever made. WPCC had difficulty borrowing money. An application for a Small Business Administration loan was denied. On May 12, 1973 the defendant resigned his position as president of the corporation and in addition gave up his stock for $6,000. This netted out to $4,702 after deduction of amounts he owed to the corporation. The defendant remained active in the corporation's affairs. On May 12 the defendant entered into an agreement with the corporation in which he was made exclusive sales agent for the corporation's franchises, doing business as 'Barterer's Ltd.' WPCC elected Mrs. Blanca Cardona president. She was the state's principal witness against the defendant.
Mrs. Cardona testified that after the defendant's resignation as president of WPCC, he continued to run the corporation in all respects other than title. More specifically, he solicited the sale of franchises and distributed the proceeds from one such sale. Prior to becoming president, Mrs. Cardona was the vice-president and route manager for the corporation. She acted as the defendant's interpreter with spanish-speaking people in Milwaukee. She had had one year of college education but no business experience. After she assumed formal control of the corporation, it was agreed that the defendant would teach her how to run the business. Everything that she did as president between mid-May and June 1 was done with the defendant. She made no business decisions without him. He continued to call and conduct business meetings and he also participated in the sale of a franchise to Angel Rosado. At the time of trial, Mr. Rosado, a factory worker with an eighth grade education and the father of ten children, testified he first learned of WPCC through an insurance agent, Mr. Pedro Hernandez. Mr. Rosado's first brief contact with the defendant was at the office of the defendant's attorney Mr. Roger Murphy. The meeting was brief because at that time the defendant was relinquishing the corporate reins at a board of directors meeting.
About June 1, 1973, Mrs. Cardona and the defendant went to Mr. Rosado's house to explain the WPCC prospectus. Mrs. Cardona functioned mainly as an interpreter. The defendant explained the franchise and 'how good it was,' according to Mr. Rosado's testimony, given through a court interpreter, because Mr. Rosado spoke Spanish. Mr. Rosado agreed to buy a franchise. Mrs. Cardona and the defendant returned to the Rosado home the next day to get two cashier's checks totaling $2,500 as a downpayment on a franchise. This was the first cash received for a dealership by WPCC. The defendant wrote out the receipt which Mrs. Cardona signed and it was given to Mr. Rosado. The checks were handed to Mrs. Cardona but by the time she returned to the car with the defendant, he had taken possession of the checks.
The defendant testified that he and Mrs. Cardona then proceeded directly to attorney Murphy's office and were told by attorney Murphy that the money must be escrowed if it was for sale of a franchise. There was disagreement as to what occurred following this meeting. The defendant testified that h did not deposit the checks in the escrow account because Mrs. Cardona and Mr. Hernandez, the insurance broker, advised him that Mr. Rosado had changed his mind and now wished to become a stockholder in WPCC rather than a franchise holder. Mr. Hernandez did not testify at the trial. Mrs. Cardona and Mr. Rosado testified that no such conversation ever took place.
The defendant and Mrs. Cardona then spent about a week visiting various banks, showing them the Rosado checks in an attempt to obtain loans. Later the checks were deposited in the regular WPCC checking account. The defendant was still authorized to draw on that account. Some money was drawn by the defendant to pay corporate expenses. The defendant also made disbursements from the corporate funds on his own behalf alleging them to be money owed to him by the corporation. 3
The state contends that questions concerning sufficiency of the evidence of the preliminary hearing were waived by the failure to challenge such sufficiency prior to entering a plea to the information. 4 The information was filed October 26, 1974 and a not guilty plea was entered on August 28, 1974. A motion to dismiss was filed September 6, 1974 and was not argued until the day the trial commenced, February 10, 1975, when it was argued on its merits and denied by the trial court. 5 Because the trial court considered the motion, which it could do under sec. 971.31(2), Stats., we may review the finding. We hold the trial court was correct in its conclusion that there was sufficient evidence to warrant the bindover.
The defendant argues that the state failed to show that the defendant was in control of the corporation, that a sale of a franchise was involved or that the defendant was responsible for escrowing the funds after he resigned his formal position with WPCC.
A preliminary hearing must establish to a reasonable probability that a crime has been committed and that the defendant had probably committed it. 6 Defendant argues that there is no showing that he committed a crime. The crime charged here is a felony punishable by a fine of not more than $5,000 or imprisonment of not more than five years or both. The conduct proscribed is offering to sell or selling any registered franchise in violation of the statute or a rule or order under that statute of which a defendant has notice. It covers, 'any franchisor whose franchises are registered under this chapter, or any person in control of . . . the franchisor . . ..' The Commissioner of Securities is specifically empowered under sec. 553.27(2) to order the escrow of franchise fees and other funds paid by the franchisee. 'Order' is defined in Sec. 553.03(9). 7
At the time of the alleged offense, the defendant was neither an officer nor a director of the company. The definition of a 'person in control' of a franchisor has not been previously considered by this court. If the statutory language is unambiguous, the court must arrive at the intention of the legislature by giving the language its ordinary and accepted meaning. The popular or reasonable import of words should be given effect, if possible. 8
It is significant that the class of persons subject to the legislative proscription is not confined to the franchisor alone. Any...
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