People v. Alison

FOX, P. J.

Defendant was convicted of violating the Corporate Securities Law (Corp. Code, § 26104, subd. (a)), in that on or about September 26,1958, in Los Angeles County, defendant did, willfully, unlawfully and knowingly, sell and offer for sale, and negotiate for sale for value, shares of capital stock without first applying for and receiving from the Corporation Commissioner a permit so to do. Proceedings were suspended and three years’ probation was granted on condition,

inter alia,

that defendant pay a fine of $750. He has appealed from the judgment (order granting probation, Pen. Code, § 1237, subd. 1).

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The complaining witness, Orion Sutton, of Loveland, Colorado, was introduced to defendant on September 24, 1958, at defendant’s apartment in South Pasadena, by Kenneth Brown, who had told him something about United Resources, Inc., in 'which defendant was interested.- Sutton went to see defendant about purchasing a franchise for a plant to be established in his home town of Loveland. Defendant advised Sutton that such a franchise was premature and too expensive.

Defendant then started “to put together a deal” for Sutton to purchase stock. He told Sutton about United Resources, Inc.; that its product was going to be Bartolith building material; that it was a sound Nevada corporation with great potential, and was based on good business principles. Defendant also told Sutton that he was the promoter of this corporation, and that the purchase of this stock was an exceptional deal and a “ground floor setup.” The stock was represented by defendant as having a value of $6.25 per share. Defendant “put a deal together” to sell Sutton 9,600 shares of this stock at $6.25 a share, totaling $60,000. Defendant also told Sutton that if he purchased these shares he could

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get a bonus of a million shares “for $10.00 and other valuable consideration.” (Just what the “other valuable consideration” was to be was not explained.) Sutton informed defendant that he would have to return to Colorado to confer with his wife before any definite decisions could be made.

The next morning defendant had breakfast with Sutton at the latter’s hotel in Pasadena, at which time they went over a rough sketch of the proposition for the purchase of these shares, which defendant wrote out in longhand. Defendant also stated “that there was a maneuver in it for stock that was issued and outstanding prior to 1931, where a buyer could be issued some of that stock and I could get my money back from the sale of that stock,” which was to be sold “through the Exchange in New York”; that “it was salable stock.”