[Crim. No. 3479. Second Dist., Div. One. Dec. 1, 1941.]
THE
PEOPLE, Respondent, v. HAROLD MARVIN, Appellant.
THE
PEOPLE, Respondent, v.
COUNSEL
Eugene L. Wolver for Appellants.
Earl
Warren, Attorney General, Eugene M. Elson, Deputy Attorney General, John F. Dockweiler, District Attorney, and Jere
J. Sullivan and H. L. Arterberry, Deputies District
Attorney, for Respondent.
OPINION
DORAN, J.
Appellants
were prosecuted under separate informations charging
violations of the Corporate Securities Act and a conspiracy to violate the same
and to commit grand theft. With their consent, appellants were jointly tried
and now appeal from the respective judgments of conviction severally rendered
against them, and from the orders denying appellants' motions for a new trial.
The information against appellant Marvin alone contained the count for
conspiracy to violate the Corporate Securities Act and to commit grand theft.
Appellant Marvin was convicted upon fourteen counts, including that of
conspiracy; and appellant Lesh was convicted on three
counts. Appellants contend that the evidence adduced at the trial is
insufficient to sustain the convictions; that errors of law were committed at
the trial, requiring a reversal of the judgments; and that misconduct of the
court and the prosecutor prevented the appellants from having a fair and
impartial trial.
[1]
Evidence adduced at the trial revealed the following. In July or August of 1937
appellant Marvin became the owner of a certain lease on property at Rozel Point,
L.
E. Marchand, one of the witnesses, was an elderly
man, age 83, and a friend of Dunn's. He testified that he was acquainted with
both appellants Marvin and Lesh and knew one Milfred R. Yant, Marvin's
associate. He first met Marvin at the apartment house where Marchand
lived in
Another
witness, Nora S. McCullough, had received 450 shares of Globe Development
Corporation stock in 1938, but appellant Marvin was acquitted of the charge as
to violation of the Corporate Securities Act relating to this transaction.
However, in or about September, 1939, Miss McCullough transferred to Marvin an
About
September 20, 1939, Marvin solicited one Mrs. K. Marie Bergez
to purchase 500 shares of stock in the above mentioned corporation. She
purchased the same with a down payment of $100, the balance to be paid out of
dividends. Shortly prior to this purchase Marvin had obtained from Mrs. Bergez the sum of $350 as a loan and had given her his
postdated check for $425. This check was never paid. About September 5, 1940, a
Mr. Lehr or Lear, whom Mrs. Bergez identified at the
trial as Milfred R. Yant,
called on her and stated that he desired to purchase her Globe Development
stock for $1250. At the time, Mrs. Bergez owned 1,000
shares thereof. Mrs. Bergez told him that she had not
received the certificate for the last 500 shares, which she had not fully paid
for. "Lear" offered to obtain it for her, stating that it would cost
$175 to obtain the same. "Lear" later returned with the stock
certificate dated September 20, 1939, for 500 shares. The certificate was
signed by Marvin as president, with the purported signature of Lesh as secretary. At this time "Lear" gave Mrs. Bergez a receipt for $178.50, the total amount paid to him
on delivery of the certificate for 500 shares above mentioned, and on the
bottom of this receipt was the notation, "Must
pick up check of H. Marvin for $350." "Lear" also gave Mrs. Bergez a written offer to purchase 1,000 shares of Globe
Development [48
The
witness Mrs. Anna Kuhn testified that she lived with her daughter, Mrs. Erna M.
Swyers, at the time she met appellant Marvin, about
November 10, 1938, and that she purchased from Marvin 300 shares of the Globe
Development Corporation stock, paying therefor 20,214 shares of American Metal
stock, which she and her daughter informed appellant Marvin was worth a penny
and a half a share. It should be noted that the permit issued by the
Corporation Commissioner provided that the stock of the Globe Development Corporation
was to be sold at par for cash, or for not less than 25% in cash. Par value of
the stock is given as $1 per share. After that, Mrs. Kuhn and her daughter made
an additional investment, Mrs. Kuhn purchasing 600 shares at $300 and her
daughter 400 shares at $200, being at the rate of 50› a share.
A
witness, James Carrier, testified that on or about January 13, 1940, in
Minnie
A. Porter, another witness, testified that she first met Marvin about December
29, 1939, at which time she purchased from him 500 shares of Globe Development
Corporation stock for $350, giving a check therefor payable to Marvin. She
placed the certificate with Marvin for resale and on January 18, 1940, Marvin
returned and gave her $500. At that time Marvin said that the stock would sell
for more and wanted Miss Porter to take 2,000 shares, which she did, paying
therefor the $500 above mentioned and a check for $937.50. Marvin called at
Miss Porter's home a number of times when there was no business transacted.
Then on April 25, 1940, Miss Porter exchanged her 2,000 shares of stock for a
half interest in a 1/24th overriding royalty in the Globe Development
Corporation. Marvin held the other half interest in the royalty. In addition to
her shares of stock Miss [48
It
was also established that in November, 1939, Marvin sold one A. J. Burley 1,000
shares of stock of the Globe Development Corporation. The persons involved in
the above related transactions all appear to have been residents of Los Angeles
County, California, at the time, and the various negotiations and sales appear
to have been entered into in that county.
In
addition to the above, it should be stated that the document which evidenced
the title of Miss Porter and Marvin in the 1/24th overriding royalty was
executed by Marvin as president and Lesh as secretary
of the Globe Development Corporation. In connection with the Burley transaction
above mentioned, Mr. Burley received his certificate for the stock enclosed
with the following letter on the letterhead of the Globe Development
Corporation: "
"Dear
Mr. Burley:
"We
are enclosing Certificates No. A83 and A84 for one hundred
twenty-five and one thousand shares respectively. We regret the delay in
forwarding these certificates which has been due to confusion during the
holidays from which we are gradually getting untangled and the fact that I have
been out of town.
"Mr.
Marvin has requested me to further advise you that he has sold the 500 shares
and asks you to endorse the 1,000 [48
"We
trust that this will meet with your approval and I hope that the delay upon my
part has not caused you an inconvenience for which you will not forgive me.
"Very
truly yours,
"L.
J. Lesh, Secretary-Treasurer."
In
December of 1940, Lesh called at Mr. Burley's home
and delivered the new stock certificate in exchange for that enclosed in the
above quoted letter, and at that time stated that they were going to declare a
dividend about the 31st of December. Burley never received such a dividend,
though he appears to have received a dividend at an earlier date. Lesh also told Burley that the stock was becoming more
valuable all the time and offered to sell Burley 1,000 more shares for $750. It
appears that prior to this visit by Lesh, on the same
day Burley received over the phone what purported to be a telegraph message
from a party in San Francisco offering to purchase Burley's stock for $1.25 a
share and inquiring how many shares Burley held. Mr. Burley never received a
written telegram confirming the phone message, nor was he ever able to locate
such a telegram.
Appellant
Marvin contends that the sales of stock in which he was involved were sales of
his own stock, not that of the corporation, that the sale of the interest to Marchand was a sale of Dunn's interest in the undertaking
and not that of Marvin. Appellant Marvin disputes the sufficiency of the
evidence as to any conspiracy and as to any attempt to commit grand theft.
Evidence was offered at the trial to show that Marvin had paid cash for shares
of the corporate stock. Appellant Lesh contends that
there was no evidence to show his implication in the charges of which he was
found guilty. All such contentions serve merely to raise questions of fact, all
of which appear to have been decided by the jury adversely to appellants.
"The
rule, upon an appeal in a criminal case, is that the court must assume in favor
of the verdict the existence of every fact which the jury could have reasonably
deduced from the evidence and then determine whether or not the guilt of the
defendant is deducible therefrom. The question for
the court to pass upon is whether there were facts before the jury to justify
the inference of guilt." (People v. Hennessey, [48
Cal. App. 2d 190] 201 Cal. 568, 571 [258 P. 49].) The summary of the
evidence given above alone reveals sufficient facts to sustain the verdicts
rendered, without taking into consideration other pertinent evidence adduced at
the trial but not here discussed.
In
passing, it should be noted that the trend of events in the instant case is in
many respects similar to that in People v. Yant, 26
Cal. App. 2d 725 [80 PaCal.2d 506] (June 1938). The defendant in that case
was convicted of conspiring to violate the Corporate Securities Act and to
commit grand theft, and of violation of the act in question, all concerning
certain transactions in connection with oil lands near
Regarding
the contentions of appellants herein, it is pertinent to quote the following
from the decision in the Yant
case, affirming Yant's conviction (26 Cal.App.2d 736): "It should be
and is an established principle of law that the substance and not the mere form
of transactions constitutes the proper test for
determining their real character. If this were not true, it would be
comparatively simple to circumvent by sham the provisions of statutes framed
for the protection of the public."
[2a]
Appellants contend that it was error to admit evidence of the history of Milfred R. Yant and
evidence as to Yant's independent transactions. They object particularly
to the introduction of the evidence above referred to, elicited from Marvin
under cross-examination; also to having permitted the witness Mrs. Bergez to identify Yant as the man "Lear," who called on
her, from a photograph of Yant
of the type taken for police records. As to permitting the prosecution to
elicit from Marvin the fact that Marvin met Yant at San Quentin, upon Yant's release on
parole, and drove Yant
to Salt Lake City in order for Yant to work for the Globe Development Corporation, it should be
borne in [48 Cal. App. 2d 191] mind that Yant was named in the information against Marvin
as a co-conspirator of Marvin. It was incumbent upon the prosecution,
therefore, to establish the connection between Yant and Marvin in order to prove the fact of
conspiracy. [3] "Accordingly, it is competent for the prosecution to prove
all the circumstances bearing in any way upon the fact of conspiracy, or upon
the acts done in pursuance thereof. This proof may cover a very extensive and
varied field of inquiry, and include evidence of collateral facts in which the
defendant bore a principal part." (8 Cal.Jur.
121.) See People v. Yeager, 194 Cal. 452 [229 P. 40], holding that previous
felonious acts on the day in question were admissible in proof of a conspiracy;
and People v. Tinnin, 136 Cal. App. 301 [28 PaCal.2d
951], wherein it was held that in view of the claim of conspiracy, the trial
court did not err in admitting in evidence, for the purpose of showing a close
relationship between defendant and a co-defendant, a portion of the transcript
of defendant's preliminary examination on a robbery charge, from which it
appeared that the co-defendant acted as his attorney, and a portion of the
transcript of testimony at another trial, from which it appeared that said
co-defendant appeared as an alibi witness for defendant, and a "ticket of
leave" granted defendant when he was released from prison on parole. A
hearing was denied by the Supreme Court in People v. Tinnin,
supra. [2b] Appellants speak of Yant's "independent"
transactions; but whether the transactions of Yant brought into evidence were independent
transactions or part of a conspiracy was a question of fact for the jury.
Evidence of such transactions, therefore, was properly introduced and submitted
to the jury.
[4]
As pointed out by respondent, under the circumstances, it does not appear that
the prosecution was required to produce a more respectable photograph of Yant. In fact, it is not
shown that a more acceptable photograph was available. Appellants cite People
v.
In
support of their contentions above noted appellants rely strongly upon People
v. Gilliland, 39
Cal. App. 2d 250 [103 PaCal.2d 179], a case involving a prosecution for
conspiracy to violate and for violation of the Corporate Securities Act,
decided by this court in May, 1940. The Gilliland case is in no way applicable
to the facts of the case at bar. In People v. Gilliland, evidence had been
improperly admitted of an asserted attempt of a co-defendant to induce a
witness to give false testimony; certain other evidence in the nature of
hearsay had also been admitted, as well as much other irrelevant testimony. The
evidence there admitted could have no possible bearing upon proof of the fact
of conspiracy, and was highly improper under any circumstances.
[5]
Appellants complain that it was error for the trial court to instruct the jury
in the language of section 778a of the Penal Code that whenever a person, with
intent to commit a crime, does any act within this state in execution or part
execution of such intent, which culminates in the commission of a crime, either
within or without this state such person is punishable for such crime in this
state in the same manner as if the same had been committed entirely within this
state. Appellants contend that the instruction misled the jury "since
several acts were committed in
[6]
Appellants contended that the court erred in instructing the jury that the
documents referred to as securities in certain of the overt acts of the count
on conspiracy and in the other counts of both informations
were securities. A security is defined in the Corporate Securities Act as
follows (sec. 2, subd. 7, Act 3814, Deering's General Laws): [48 Cal. App. 2d 193]
"The word 'security' shall include any stock, bond, note, treasury stock,
debenture, evidence of indebtedness, certificate of interest or participation,
certificate of interest in a profit-sharing agreement, certificate of interest
in an oil, gas or mining title or lease, collateral trust certificate, any
transferable share, investment contract, or beneficial interest in title to
property, profits or earnings, guarantee of a security and any certificate of
deposit for a security." There can be no question that the documents,
shares and participating interests covered by the above mentioned instruction
came within the definition of a security contained in the Corporate Securities
Act. It was therefore within the province of the trial court to instruct the
jury that the documents referred to constituted securities as a matter of law. (People v. McCalla, 63 Cal. App. 783 [220
P. 436]; People v. Dutton, 41
Cal. App. 2d 866 [107 PaCal.2d 937].) In this connection, appellants
complain that the above mentioned instruction as to certain documents being
securities omitted "the element of selling or issuing as a necessary
requisite to a criminal act." The element of selling or issuing a security
plays no part in the statutory definition of a security. As to the necessity of
finding that the defendants sold or issued securities in order to find them
guilty of violating the Corporate Securities Act, it should be noted that the
trial court gave the following instructions:
"It
is unlawful for any company or any individual to knowingly sell, offer for
sale, or take subscriptions for any security of the company's or of his own
issue until such individual or such company shall have first applied for and
secured from the Commissioner of Corporations, a permit authorizing such sale
or subscription."
"You
are instructed that the term 'sale' or 'sell' as used in the Corporate
Securities Act shall include every disposition or attempt to dispose of a
security or interest in a security for value and shall include a contract of
sale and exchange and attempt to sell, an option of sale, a solicitation of a
sale, subscription or an offer to sell."
"You
are instructed that where a corporate security is delivered to a person who
pays therefor no consideration, nor does the person delivering or transferring
the same to him or her receive any consideration for such delivery or transfer,
such security is not sold or issued for value." [48
The
above quoted instructions, together with other instructions given, indicate
that the question of the necessity of selling or issuing securities was fully
and fairly covered by the trial court in its instructions to the jury.
[7]
The trial court instructed the jury that good faith or advice of counsel
affords no immunity to one accused of a violation of the Corporate Securities
Act and is not a defense. While appellants concede that such an instruction
would be proper upon an issue of whether a permit to issue a security were
necessary, and advice of counsel were relied on in this regard (People v. McCalla, supra), yet it is the contention of appellants
that the instant case is one within the rule of People v. Flumerfelt,
35
Cal. App. 2d 495 [96 PaCal.2d 190], and that the situation in the instant
case is the same as that in Russell v. Ruffcorn, 132
Cal. App. 215 [22 PaCal.2d 597, 23 PaCal.2d 1014]. People v. Flumerfelt, supra, was concerned with the factual
existence or non-existence of a permit and advice of counsel as to such
existence. Appellants here argue that the instruction complained of was
inapplicable principally because of the situation governing the issuance of the
20,000 shares of stock to James Carrier, as alleged in overt act 21 of count I
in the information against Marvin. Marvin testified that these 20,000 shares
represented 20,000 shares of stock that Marvin put up in escrow in
[8]
Appellants complain of an instruction to the effect that "if, while said
permit was in full force and effect, the defendants made any sales of stock contrary
to or in violation of the provisions of said permit then and in that event he
or they would be guilty of a violation of the Corporate Securities Act the same
as if no permit had been granted." Appellants argue that the permit was
issued to the corporation and it was not what Marvin received on the sale of
the stock but what the corporation received that determined whether or not the
permit was violated, and as long as the corporation issued the stock in
accordance with the terms given it there was no violation of law. Such argument
assumes that the evidence uncontrovertibly showed that the corporation had
received par value for the shares issued and that the sales here in question
were those of defendants' own personal stock. It has already been pointed out
that the jury in arriving at its verdicts presumably found the opposite to be
true. In this connection, reference should here be made again to the quotation
from People v. Yant
above given. It should also be pointed out that the jury could not have been
misled by the instruction here complained of, since the court also instructed
the jury that the bona fide owner of stock who sells his stock for his personal
benefit or who gives away his stock is not subject to the provisions of the
Corporate Securities Act, and may sell or give away his stock without the
necessity of obtaining a permit from the Commissioner of Corporations.
[9]
Appellants also contend that the court's failure to give certain requested
instructions was prejudicial to the [48
[10]
Appellants requested an instruction upon the situation as presented in Russell
v. Ruffcorn, supra, discussed above. Such an
instruction as that requested could only be applied where the facts showed that
stock in escrow was the personal property of an individual. The ownership of
the stock here in question was a fact to be determined by the jury, and the
jury does not appear to have decided the question in appellants' favor. Under
the circumstances, failure to give the requested instruction could not be held
prejudicial error, even assuming that the proposed instruction correctly stated
the principle of law involved.
[11]
Appellants' request that the jury be instructed that it was necessary to find
the existence of a conspiracy both to violate the Corporate Securities Act and
to commit grand theft in order to find appellant Marvin guilty of the charge [48
Cal. App. 2d 197] of conspiracy, contained in the first count against him,
was properly refused. The proposed instruction went on to state that if the
jury found that Marvin had conspired only to violate the Corporate Securities
Act or to commit grand theft, Marvin should be found not guilty of the charge.
Appellants' contention with regard to the refusal of their requested
instruction is fully answered in People v. Yant, supra, at pages 729 et seq.
[12]
Appellants complain of the refusal of the court to give a requested instruction
to the effect that in regard to the charge of conspiracy certain conversations
of and acts of alleged co-conspirators, including letters and instruments
written by such co-conspirators were allowed to be introduced into evidence and
that the introduction of such conversations or acts must not be considered by
the jury in determining whether a conspiracy in fact existed; that before
considering such conversations or acts of co-conspirators, the jury must find
that the existence of a conspiracy has been proven beyond a reasonable doubt.
The substance of this request was covered by an instruction given at the
request of defendants, as follows: "You are instructed that acts and
declarations of an alleged co-conspirator made during the period of a
conspiracy and in furtherance thereof, are admissible against other
co-conspirators only if other evidence warrants the finding beyond a reasonable
doubt that a conspiracy actually existed. The acts and declarations of an
alleged co-conspirator, however, are not binding upon any other alleged
co-conspirator unless and until, independent of such declarations and acts a
conspiracy has been shown beyond a reasonable doubt to exist and in no case may
such declarations be received as proof of the conspiracy." The instruction
quoted, together with others given, amply covered the matter contained in the
requested instruction and there is no basis for appellants' complaint with
respect to the refusal of the court to give the particular instruction
requested.[13] Indeed, the instructions given went
further than the rule requires, for proof beyond a reasonable doubt, before
evidence of the acts and declarations of a co-conspirator may be considered, is
not required.
Other
requested instructions, refusal of which by the court is cited as error, were
either covered in substance by instructions [48
[14]
Appellants' assignment of misconduct on the part of the trial judge is without
merit. Such assignment is based largely on remarks of the trial judge made in
an apparent attempt to point out that certain testimony being elicited on
behalf of the defendants and certain documents sought to be introduced in
evidence in their behalf were not necessary. The court does not appear to have
overstepped the bounds of its discretion in the remarks made. The record merely
reveals an effort on the part of the court to lessen, if possible, the amount
of purely cumulative matter, where the same appeared to the court unnecessary
to the defense. In one instance, on request by defendants' counsel, the court
ordered its remarks stricken. In that instance the court had referred to a
certain payment as a dividend. The implications appellants seek to attach to many of the court's remarks are not readily apparent from
a reading of the record and would require a strained construction to be placed
on the remarks in question. In any event, it cannot be said that the defendants
were prejudiced by the court's action in this regard.
[15]
As to misconduct on the part of the prosecutor, if some of the conduct and
remarks of the prosecutor might be viewed as overzealous, in no instance could
it be said to have resulted in prejudice. When the prosecuting attorney spoke
of Marvin and Yant
as "dear old pals" and remarked that it would be more appropriate to
refer to them as "dear old cell mates," his reference to cell mates
was stricken upon objection.
For
the foregoing reasons the judgments and orders are affirmed.
York, P. J.,
and White, J., concurred.