STATE OF FLORIDA, APPELLANT,
v.
W. ROBERT SMITH, APPELLEE
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Florida appeals the quashing of an indictment charging W. Robert Smith with selling unregistered securities in violation of state law. The court affirms the quashing because the indictment failed to allege scienter (knowledge or criminal intent), which the court implies as a necessary element of the crime despite the statute's silence on the matter.
The indictment is fatally defective for failing to allege scienter. Although the statute does not expressly include knowledge or criminal intent as an element, scienter is an implied element of the crime of selling unregistered securities, and the indictment must allege and the prosecution must prove this element to satisfy due process requirements.
“We have no difficulty in construing the subject statute to impliedly require a charge and proof of scienter.”
The court's holding that scienter is an implied element of the securities sales statute, citing Cohen v. State and establishing the principle that scienter must be alleged and proven even when the statute does not expressly require it.
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Join FLexlaw to unlock all legal intelligenceSmith was indicted on fourteen counts for selling unregistered securities in violation of Florida Statutes sections 517.07 and 517.30. The indictment …
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The sole question under consideration is the propriety of the action of the Circuit Court of Marion County in quashing an indictment which alleged in fourteen counts that W. Robert Smith sold unregistered securities in violation of the law. The statutes allegedly violated are F.S. Section 517.07, F.S.A. which provides:
“No securities except of a class exempt under any of the provisions of § 517.05 or unless sold in any transaction exempt under any of the provisions of § 517.06 shall he sold within this state unless such securities shall have been registered as hereinafter defined. * * * ”
and F.S. Section 517.30, F.S.A., which provides :
“Whoever violates any of the provisions of this chapter shall be guilty of a felony and upon conviction thereof shall be punished by a fine of not more than five thousand dollars, or by imprisonment in the state penitentiary for not more than five years. * * * ”
The crime of selling unregistered securities is further defined by Section 517.02, in a lengthy technical definition of the word “security”, by Section 517.05 listing ten classes of exempt securities, and by Section 517.06 listing fourteen types of exempt transactions. These statutes do not specify scienter as an element of the offense and the indictment did not allege scienter.
Appellee strongly urges that the complexity of the chapter makes it impossible for an ordinary person to determine what acts are prohibited and punishable thereunder and the failure of the statute to designate knowledge or criminal intent as an element of the crime is a denial of due process rendering the statute unconstitutional.
The wide latitude granted to lawmakers to declare an offense and to exclude elements of knowledge and criminal intent have long been recognized although the existence of a mens rea is the rule of, rather than the exception to, the principles of Anglo-American criminal jurisprudence. The power of lawmakers to exclude mens rea is limited by the requirements of due process and equal protection of the laws and such power has been held not to exist in cases where the conduct declared criminal is wholly passive or impinges on a. constitutional guarantee.1
In the instant case since the sale of securities, like the sale of books and periodicals, is not malum in se, this Court is bound by the broad application of the rule as applied by the Florida Supreme Court in Cohen v. State2 which held that scienter was an implied element of the statute making the sale of obscene literature a felony and the information was fatally defective for want of an averment that the defendant sold the literature knowing it to-be obscene. In that case the Supreme Court speaking through Justice O’Connell said:
“We have no difficulty in construing the subject statute to impliedly require a charge and proof of scienter. As-indicated above we so construed statutes in State v. Slaton, supra, Brent v. State, supra, and State v. Diez, supra. We have done so more recently in the case of Cramp v. Board of Public In*891struction of Orange County, Fla., 125 So.2d 554.3
'‘‘As set forth in the last cited case we can so construe the subj ect statute without being guilty of ‘a judicial amendment of the statute.’ See Lerner v. Casey, 357 U.S. 468, 78 S.Ct. 1311, 2 L.Ed.2d 1423; Adler v. Board of Education, 342 U.S. 485, 72 S.Ct. 380, 96 L.Ed. 517, 27 A.L.R.2d 472; Garner v. Board of Public Works, 341 U.S. 716, 71 S.Ct. 909, 95 L.Ed. 1317; Gerende v. Board of Supervisors, 341 U.S. 56, 71 S.Ct. 565, 95 L.Ed. 745.”
Having concluded that the indictment was fatally defective for not averring scienter, an implied element of the crime which must be averred and proven, we find it unnecessary to consider the many other points argued in this appeal.
Affirmed.
CARROLL, DONALD K., Chief Judge, and STURGIS, J., concur.
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Leithauser v. Harrison, 168 So. 2d 95 (Fla. 2d DCA 1964)…ties Law, Chapter 517, Florida Statutes, F.S.A., is to protect investors from fraud. See State, by Knott v. Minge, 1935, 119 Fla. 515, 527, 160 So. 670, 675. One who knowingly violates the act is guilty of a crime. See State v. Smith, Fla.App. 1963, 151 So. 2d 889. The act makes a sale of securities in Florida, unless registered or exempt, voidable and renders the person making any such sale and every director, officer or agent of the seller who personally participates or aids in any way in making the sale jo…
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State v. Houghtaling, 181 So. 2d 636 (Fla. 1965)…which forbids one who is not registered as a dealer or salesman with the commission to engage in the business of selling securities. On motion of the respondents, the trial court quashed the information, on authority of State v. Smith, Fla.App.1963, 151 So. 2d 889, which held that scienter was a necessary element in prosecutions under Sec. 517.07. On appeal, the District Court of Appeal, Third District, in its opinion and decision, reported at 173 So. 2d 748, Fla.App.1965, reluctantly followed the authority…
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State v. Houghtaling, 173 So. 2d 748 (Fla. 3d DCA 1965)…nd with selling securities without having registered as a dealer or salesman therefor, in violation of § 517.12, Fla.Stat., F.S.A. The trial court quashed the information for failure to allege scienter, on authority of State v. Smith, Fla.App.1963, 151 So. 2d 889, decided by the first district court of appeal. We affirm the quashal order as it relates to the first count, charging sale of unregistered securities in violation of § 517.07, on the authority of State v. Smith, supra, which expressly held that sc…
Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited (11 total)
- Smith v. California, 361 U.S. 147 (U.S. 1959)
- Lambert v. California, 355 U.S. 225 (U.S. 1957)
- Adler v. Bd. of Educ. of the City of N.Y., 342 U.S. 485 (U.S. 1952)
- Garner v. Bd. of Pub. Works of Los Angeles, 341 U.S. 716 (U.S. 1951)
- Gerende v. Bd. of Supervisors of Elections of Baltimore, 341 U.S. 56 (U.S. 1951)
- Lerner v. Casey, 357 U.S. 468 (U.S. 1958)
- Sol I. Cohen v. State, 125 So. 2d 560 (Fla. 1960)
- Brent v. State, 127 Fla. 626 (Fla. 1937)
- Cramp v. Bd. OF Pub. Instruction OF Orange Cnty., 125 So. 2d 554 (Fla. 1960)
- State v. Diez, 97 So. 2d 105 (Fla. 1957)