Thomas v. State

3 S.W.3d 89, 1999 Tex. App. LEXIS 6486, 1999 WL 652494
Court of Appeals of Texas·Decided August 27, 1999·No. 05-92-01844-CR·Published·Cited by 5 cases

Opinions

OPINION ON REMAND

FRANCES .MALONEY, Justice.

The jury found Jimmy Wayne Thomas guilty of securities fraud. The trial court assessed a ten year sentence and $5000 fine, suspended the sentence, and placed appellant on ten years probation. On original submission, appellant contended in five points of error (1) the trial court erred in including the civil definition of “evidence of indebtedness” in the jury charge and allowing the State’s expert witness to testify to legal conclusions, and (2) the evidence is insufficient to show he offered to sell or sold an “evidence of indebtedness.” On remand, in three points of error, appellant complains (1) the evidence is legally and factually insufficient to show appellant sold or offered to sell a security or that the alleged security was of the type required by the Texas Securities Act (the Act),2 and (2) the trial court erred in allowing the State’s expert witness to testify to legal conclusions. Because we hold the Act requires an “evidence of indebtedness” to be in writing, we reverse the trial court’s judgment and enter a judgment of acquittal.

BACKGROUND

Appellant was developing and marketing electronic kiosks to dispense videotapes through his company, United Media Group, Inc. (United). Appellant originally approached complainant about becoming a salesman for United.3 Appellant next convinced complainant to invest in United to secure additional funding for United’s expenses. Appellant told complainant he could expect his principal’s return in thirty to sixty days and would receive five times his original investment within several months and an additional five times his investment within a year. During June 1991, complainant invested $50,000 in United.

In late July or early August 1991, appellant told complainant that “another $20,000 [was] available if he wanted to invest.” Appellant explained that a Tennessee family needed its money back quickly. On August 2, 1991, complainant invested another $10,000 under the same terms as his previous investments. United neither issued any shares of stock to complainant, returned his principal, nor paid him any profits on his investments.

The grand jury indicted appellant for violations of the Act. The indictment alleged two theories of fraud in the sale or offer for sale of a security on or about August 2, 1991. The first paragraph alleged fraud by appellant’s failure to disclose that he had previously spent funds invested in United for purposes unrelated to United. The second paragraph alleged fraud by appellant’s failure to disclose that he had filed for personal bankruptcy. Both paragraphs alleged the “security” at issue was an “evidence of indebtedness.” The jury convicted appellant of fraud in the sale of a security under the first paragraph of the indictment.

On original submission, this Court, in a plurality opinion, reversed the trial court’s judgment and entered a judgment of acquittal.4 See Thomas v. State, No. 05-92-01844-CR, 1994 WL 605946 (Tex.App.—[92]*92Dallas Oct.31, 1994) (not designated for publication), vacated, 919 S.W.2d 427 (Tex.Crim.App.1996). As author, I concluded that the trial court erred in charging the jury in a criminal case with the broad Searsy civil definition of “evidence of indebtedness.” See Searsy v. Commercial Trading Corp., 560 S.W.2d 637, 641 (Tex.1977).

On discretionary review, the court of criminal appeals vacated this Court’s judgment, holding that the Searsy definition applied to criminal prosecutions. See Thomas, 919 S.W.2d at 432. The court remanded this cause to this Court for “consideration consistent with [its] opinion.” Id. Because the court commented in its remand that this Court “did not address the question of whether or not a writing is required under the Act,” we first address whether an “evidence of indebtedness” requires a writing.

SUFFICIENCY OF THE EVIDENCE

In his first and second points of error, appellant asserts that no or insufficient evidence exists to show that he sold or offered to sell a security within the meaning of the Act. Specifically, appellant argues that the August 2, 1991 transaction did not involve an “evidence of indebtedness” because an “evidence of indebtedness” must be a written instrument, and the State failed to prove any such instrument existed.5

The State responds that a written instrument is unnecessary because requiring an “evidence of indebtedness” to be in writing defeats the Act’s purpose of protecting investors and allows those persons who induce others into fraudulent investment transactions to avoid penalty by not providing a writing to the investor. Alternatively, the State argues it produced sufficient writings at trial to constitute an “evidence of indebtedness.”

1. Standard of Review

In reviewing a challenge to the legal sufficiency of the evidence, we view the evidence in the light most favorable to the prosecution to determine whether any rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979); Jones v. State, 833 S.W.2d 118, 122 (Tex.Crim.App.1992), cert. denied, 507 U.S. 921, 113 S.Ct. 1285, 122 L.Ed.2d 678 (1993). The factfinder resolves conflicts in the testimony, weighs the evidence, and draws reasonable inferences from basic to ultimate facts. Dumas v. State, 812 S.W.2d 611, 615 (Tex.App.—Dallas 1991, pet. ref'd). The factfinder is the exclusive judge of the witnesses’ credibility and the testimony’s weight. Tex. Code Crim. Proc. Ann. art. 38.04 (Vernon 1979); Bonham v. State, 680 S.W.2d 815, 819 (Tex.Crim.App.1984), cert. denied, 474 U.S. 865, 106 S.Ct. 184, 88 L.Ed.2d 153 (1985); Dumas, 812 S.W.2d at 615. The factfinder may accept or reject any or all evidence. See Saxton v. State, 804 S.W.2d 910, 914 (Tex.Crim.App.1991). That the appellant presents a different factual version does not render the evidence insufficient. Anderson v. State, 701 S.W.2d 868, 872-73 (Tex.Crim.App.1985), cert. denied, 479 U.S. 870, 107 S.Ct. 239, 93 L.Ed.2d 163 (1986).

2. Applicable Law

The Act is penal in nature, and we must strictly construe its provisions. [93]*93Thomas, 919 S.W.2d at 430 (citing Bruner v. State, 463 S.W.2d 205, 215 (Tex.Crim.App.1970)). Thus, the statute must clearly prohibit a forbidden act. Id.

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Thomas v. State, 3 S.W.3d 89, 1999 Tex. App. LEXIS 6486, 1999 WL 652494 (Tex. Ct. App. 1999).

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