McElroy v. State

Co., The evidence shows that Texas Bitulithic Trucking Co. v. pur over Baird for (Tex.Civ.App.—Tyler exercised control S.W.2d 200 grounds, pose seeing properly rev’d on other that work was done (Tex.1981). legion The cases expeditiously. and general “This hold that manner which If, examining these five fac after independent an contractor control over tors, finds that there is conflict the court making him a servant.” does not result status of the work ing evidence as to the Employers Insurance Ass’n v. Bew Texas man, submitted to the the issue should be (Tex.Civ.App.—Hous ley, 560 S.W.2d Co., supra. How jury. Eagle Trucking writ). 1977, no ton [1st Dist.] ever, disputed, and the if the facts are not susceptible of “reasonably but evidence controlling facts We find the inference, single question whether an individual is an we determine whether employee independent and relationship of undisputed. independent contractor to is one of law contractor exists question of law which we presented This Zavala, 212; Rodriquez v. court.” Id. at properly court resolved hold that the trial (Tex.Civ.App.—San 279 S.W.2d 606-7 appellant’s partial summa- by granting the 1955, writ); C.J.S., “Master Antonio no appellee’s All ry judgment motion. Servant,” and his mo- points of error are overruled rehearing is denied. tion the trial undisputed evidence before performed trac- indicated that Baird court appellant’s motion for considering work, cutting such as sidewalks tor points that no new rehearing, we notice sites. He also driveways on construction previous- position presented view are work, dirt to and from clean-up did hauled brief. We appellant’s ly stated sites, trash. and hauled construction appellant’s motion for deny the therefore rehearing. operations, Baird During all of these consisting of two equipment his own used 452(b). TEX.R.CIV.P. For Publication. trucks; paid his own three

tractors and employees who worked on the sites, for his own paid bookkeeping and

gas. His wife did were submitted

prepared the bills which only as need- appellant. Baird worked paid usually appellant and was

ed for the set-rate, hourly or at an

either a set rate predict the he could depending on whether McELROY, Appellant, Mark T. complete a necessary to amount of time job. Texas, Appellee. The STATE job that the only control Generally, the Baird Yargo exerted over superintendent No. 05-83-00036-CR. cleared, directing needed to be what Texas, Appeals Court cut, Yargo also testified away. or hauled Dallas. operating the tractor if he saw Baird manner, him he direct in an unsafe would 23, 1984. Jan. him. The fact have fired stop, or would general some appellant exercised Baird did supervision over control or right to control appellant had the

show that Inc., Newspapers details of the work. Casualty Surety Aetna &

supra; Elder v. 611, 613

Co., Tex.

(1951). Dallas,

Randy Taylor, J. Thomas Sulli- van, Fe, N.M., appellant. Santa Wade, Henry Atty., Dist. Karen Chilton Beverly, Atty., appellee. Asst. Dist. STOREY, Justice. appeal

This is from a conviction for the misapplication of construction trust funds more, having felony a value of $250 proscribed by TEX.REV.CIV.STAT.ANN. 1982-1983). Supp. art. 5472e error,1 grounds appellant’s two of nine produced he insuffi- claims State misapplied cient evidence to that he in- or diverted the construction funds with expend- tent to defraud or to overhead ... itures were not “reasonable directly related to such construction of the project.” After careful review agree that the State neither record we requisite negated intent proved the nor argument, Appellant grounds that arti- the constitutional as we are con- maintains in three vagueness proceed. Coberly, in several re- cle 5472e is void for spects. strained to See However, dispose since we can (Tex.Cr.App.1983). S.W.2d 734 appeal sufficiency grounds, on we do not reach exception permits the use of the purposes lant used the funds for other than funds for reasonable According- overhead. labor, materials, or reasonable overhead ex- ly, we reverse and remand with instruc- pense in connection with the project. Cox tions enter an order acquittal. Balance statements on two of three accounts for the duration of the SUMMARY OP FACTS project were also introduced evidence.

The record reflects that con- The State showed that one of these ac- tracted with Mr. and Mrs. Cox to add an negative counts had a balance at the end of additional patio room and a to their resi- September and, deposit after contract, dence. The September dated payment initial from the Septem- Coxes on price $17,437 called for a and com- 29, 1978, ber certain checks and bank pletion within eighty-three days. Follow- charges paid were from the account. How- ing twenty-five percent payment, down ever, the State did not show the balance of the Coxes supposed were to—and did— payroll project account when the be- payment progressed make as work on the gan. The State did not trace the source of following schedule: project funds from this to uses other than Work Completed Amount Date Paid project. Additionally, Cox the State did Frame 25% Nov. 26 $4,359. deposits show that all in the business Roof $4,359. 25% Dec. accounts came from the Coxes. For exam- Brick 15% Jan. 18 $2,016. — ple, the State did not show the source of an 10% Completion $1,743. $6,058 deposit October 20 to one ac- days contract, Five after execution of the count. The record reflects deposit that this appellant put five or six employees to work could not payments have come out of the on the foundation. The foundation was from the Coxes. Thus the State did not completed at the end of October. On No- show that these were construction funds. vember 26 Mrs. Cox made the first The State’s evidence of diversion of the progress payment up. after the frame was construction funds consists of checks such appellant After during finished the roof following: as the part December, first Mrs. Cox wrote him a check for Appel- the next installment. PAYEES lant took some time project off from the holidays over the but returned to continue Nov. 2 Marsha $1,000 McEIroy January. work in The record shows that Nov. 13 Chivas Square progress Mrs. Cox made the payment next (N.S.F.) 300 Apartments on January (N.S.F.) 1979. Mrs. Cox testified 17 Nov. Mark 175 McEIroy (N.S.F.) Nov. Mark McEIroy January payment, that soon after the ap- Deo. 7 B & B Liquor pellant took project his men off her to work (Cashier’s Coker, on another one. a carpenter, testi- check) 1,006.64 fied that March 22 or 23 day was the last Dee. 10 Chivas Square Apartments job. on the Dec. 15 Mark McEIroy The State relied on four pay- dishonored Dec. 18 First National roll checks written on March 16 and 23 to Bank 544.82 Jan. 19 General establish the date on or about which the 228.13 Telephone offense occurred. The three workers who Jan. 26 Mark McEIroy payees were on these checks were also Mar. 7 General working on a church for (N.S.F.) around 118.74 Telephone the same time. It is unclear from the Appellant many testified that he made record whether the dishonored checks were payments his business with cash. The payment solely for on the work Coxes’ appellant surely record reflects that made house. payments some with cash because numer- purchased ous materials were which were The State introduced numerous checks paid drawn on two of not for check. The State intro- business checking appel- accounts to establish that duced these checks evidence testi- mony tors, subcontractors, materialmen, of bank officers who testified that in- these were true records of the banks. curred or to be incurred in connection However, pur- the State did not show improvements, construction and pose disposition proceeds of the of the received, for which said funds were shall checks that it claimed to be diversions or misapplied be deemed to have said Trust misapplications example, ap- of funds. For Misapplication Funds.... of Trust pellant testified that he delivered the of the Funds ... value of or over $250 $1,006 Liquor cashier’s check to B & B on punished by shall be confinement in the company’s payroll December 7 to cover his Department period of Corrections for a checks cashed at that store. State did exceeding years. not ten bring payees in the of this or of the 5472e, TEX.REY.CIV.STAT.ANN. art. other checks to show what was done with §§ 1982-1983) Supp. (emphasis proceeds of these checks. added). The State contends that [ajppellant “record reflects that the used INTENT TO DEFRAUD money expenses Coxes’ other than Appellant contends that the evi those which arose from the construction (1) respects: dence is insufficient in two It project.” Although correctly the State con- misapplied fails to show that he or diverted proving cedes that it has the burden of defraud; (2) any funds with intent to statute, misapplicationunder disagree we negate fails to that the disbursements the with the conclusion that it met that burden. State relied were reasonable overhead Under this statute the State must project. First we address the evidence payments intent to defraud in the accused’s prove culpable offered to mental state. purposes other than the construction pertinent portions pro of article 5472e project expenses. and its related vide as follows: gist

When “intent to defraud is the Construction receipts offense, and loan the State must facts declared trust funds from which such an intent is deducible be and, yond a doubt reasonable ab moneys 1. All paid or funds to a con- proof, sence of such a convictionwill not be tractor or subcontractor ... under a con- justified.” Stuebgen v. struction improvement contract for the 29, (Tex.Cr.App.1977). example, 32 For specific property real in this state ... State, (Tex.Cr. Knapp v. 504 421 S.W.2d which are by secured ... a lien on the (on App.1974) rehearing), motion for the specific property improved to be showing court noted that the mere of a hereby declared to be Trust Funds for $1,200 taking stamps would have the benefit of ... mechanics ... or mate- deprive insufficient to show “intent been to may rialmen who ... furnish labor or stamps the of the value” of the ...; however, provided, material [State] that appropriate to them to the accused’s own moneys paid to a contractor or subcon- Knapp use. In the State showed other may tractor ... be used to reasona- intent, namely, evidence of that the ac directly ble overhead ... related to such exchanged cused the same construction contract. ... amount type stamps pickup for a at truck. Id. disbursement, Wrongful use or bar, Similarly, in 437. the case at the State retention of trust funds prove appellant gave pro did not that the person checks ceeds of the to a other than Trustee, shall, Any directly who one who was authorized to receive those indirectly, defraud, with re- intent to proceeds. example, could For the State tain, use, disburse, misapply, or other- attempted prove allegation its that have divert, funds, part wise trust $1,006 appellant wrongfully thereof, disbursed 1 as defined Section of this showing Act, Liquor the B B store what & fully paying without first and satis- items, any, appellant purchased if at the fying obligations all of the Trustee to all artisans, mechanics, Furthermore, laborers, did not contrac- store. the State 862 cashier’s $1,006 alleged check pay-

show that the that is transaction to constitute an Liquor B able to & B came out of the not permitted offense should “unless construction funds. clearly commission of other crime is proved and the accused to be the is shown Appeals The Court of Criminal State, perpetrator.” Thompson v. 615 Stuebgen gave guidance to how an some 760, Sand (Tex.Cr.App.1981); S.W.2d 761 requiring offense intent to defraud fits into State, (Tex.Cr. ers v. 604 S.W.2d scheme of mental culpable states State, Eanes v. App.1980); 546 S.W.2d TEX.PENAL 6.03 CODE ANN. Landers v. (Tex.Cr.App.1977); cf. 1974). case, Stuebgen, In forgery a under State, (Tex.Cr.App. prove the State that accused must 1974)(“It upon incumbent the State was forged knew the was instrument to show prove forgery and that such exhibit was a Hence, intent to defraud. intent to defraud it.”). that appellant was connected offenses fall the intentional or know under holding that of the Without the admission ing culpable categories. See state mental or reversi extraneous offense harmful Stuebgen, at 32. Intent S.W.2d error, proof of the ble we conclude that may defraud be shown circumstantial relevant to extraneous transaction was not evidence. Sanders, case. See in the material issue Here, circumstantially prove in 111; Landers, 519 S.W.2d at S.W.2d defraud, tent to relies vari the State of con 118. The actual misapplication payees checks ous made out to other than is a struction funds with intent to defraud However, subcontractors or materialmen. in the Proof of the material issue case. proof the checks were insufficient intent nothing proved transaction extraneous defraud State did because the not charged more of proven than was payees checks that of these received fense. did proof of these transactions proceeds they of the checks Coxes’ misapplication not of the show merely did not cash checks. Hence, funds. evidence of the extraneous proven payee if the Even State had ruling on the cannot assist in transaction pro of each of these checks received the sufficiency of the evidence. check, the State did ceeds of contractors prosecutions recent two beyond a reasonable doubt statute, the Court general under theft knew that the checks were drawn on the Appeals held the evidence construction trust funds because the State Criminal trace to the concerning did not the construction funds the use of construction alleged misapplications of them ex requisite was insufficient to establish the payments. of other of those Peterson deception. clusion sources intent for theft have intended example, appellant may For (Tex.Cr.App.1983) 645 S.W.2d 807 $6,058 deposit of on October 20 to be (en banc); Phillips v. par source of these third cases, (Tex.Cr.App.1982). In those not show the ties. State did that construction prove State had to that the payment by of this a deposit source was deception the by funds with were obtained and, Coxes, fact, payments in the three the In Peter- misappropriate intent them. to specifically to by the Coxes are traceable son, “The fact that court remarked: the $6,058 deposit. deposits other than the ap- not show unpaid there bills does were $58,000 given him the pellant did not use Similarly, the State could not as by pay to for materials homeowner] [the by showing intent to an ex prove defraud is proof the ... promised. with Consistent ap in project which traneous construction all of appellant spent possibility the that parties checks to third pellant also drew unpaid $58,000 materials, the on the fai’mg plumber to a for work while result by the on the State were bills relied proof the of performed. This is so because mentioning the Without of cost overruns.” to did not tend the extraneous transaction use as to the duty by article 5472e imposed in article 5472e with prove a violation of installments, the of contract to Proof of an extraneous tent defraud.

863 1969); v. Appeals that the Paiz 167 Tex.Cr. held Court of Criminal (1959). of prove to that the installments In the context the State failed suppliers use were for the exclusive of complex protective scheme of article more in that received the Peterson 5472e, gist of is the misuse the the offense tending pay the suppliers. not to payment purposes funds oth of the if court that even the owner directed added the project rather than mere er than the pay only suppliers out of the Peterson to Just taking money from its owner. funds, to the prove State failed that the in case of a check the State a of theft materials, spent funds on because were not the accused deception must show that ac hap to there no evidence show what purpose misappropriating complished his pened paid. of the amount total negotiating by cashing or the the funds force to point applies equal This last check, State must show under article the in proof misapplication the actually applied that the contractor 5472e did not that the case: The State pur the of the check to forbidden value from the not funds received Coxes were thereby intending deprive subcon pose labor, materials, spent and overhead on compens of their tractors and materialmen directly project. to the related Consistent ation.2 testimony with all the and exhibits (1) question arose in a possibilities: record the Where similar are the that McElroy checks the type drawn on Construction’s Florida decision under a statute of persons payable here, account and unrelated the the court reversed con involved proceeds cashed project were and the corporate the officer who had viction of project; (2) the were used on the given payment check of the endorsed the against appellant’s checks drawn own were application “the construction work because funds in third account there for which proceeds of this check was not record; was no statement in the balance proved nor was amount involved estab (3) checks these were “reasonable lished.” v. So.2d Silvestri directly project. overhead” related to the case, (Fla.Dist.Ct.App.1960). our City See v. First National also Jensen than step went a further the State Bank, (Tex.Civ.App.— prosecution to show that Silvestri 1981), Houston n.r.e. writ [14th Dist.] ref'd operat checks were drawn on the business (insuffi curiam, (1982) per 623 S.W.2d 924 payees, but ing account various involving arti cient evidence civil action application not “the State still did show 5472e). cle Silvestri, “the proceeds.” As in infer article Peterson was not an Since suscep is ence from actions [the accused’s] directly point on 5472e case and not interpretation other tible to a reasonable ” proof, we on cases under issue draw guilty participation .... Id. than his See proof other in which of the use or statutes McConnell, 201 Neb. also State proceeds appropriation of the of a check (1978). proof We conclude N.W.2d required. example, prove misappro For apparently who parties checks issued charges priation when the State theft project not related to the without were check, necessary to deception with a it is tracing proceeds of the checks will not given only check was required by support proof of intent charged, in the amount but accused 5472e. article accused the check also that cashed through the subsequently cleared OVERHEAD EXPENSES REASONABLE reducing thus the funds drawer's bank the Additionally, we that conclude Compton v. the account. See drawer’s negate not proof its because it did failed in State, 246, (Tex.Cr.App. 607 S.W.2d 252 statutory for “reasonable exception 1979) the (on banc); v. rehearing en Watkins First, 819, decided State, (Tex.Cr.App. it must be 821 overhead.” 438 S.W.2d tention, of article which is also a violation in its and at trial State relied indictment misapplication than fund re- 5472e. fund rather 864 provi- chapter procedural the overhead” has the

whether “reasonable eviden- exception is an or a defense. We tiary consequences sion of a defense.” TEX. exception. § that it an conclude 2.03(e) (Vernon PENAL CODE ANN. 1974). general provisions the Pe applicable to offenses defined nal Code Because concerning evidence outside the Code “unless the statute defin purpose the pay “reasonable overhead” provides ing the offense otherwise.” TEX. alleged to misappro ments be fraudulent § 1.03(b) (Vernon PENAL CODE ANN. priation in the na of construction funds is State, 1974). In Honeycutt v. 627 S.W.2d tending proof ture of inferential rebuttal to (Tex.Cr.App.1982), 417 the court found “the negate statutory of intent to the elements 1.03(b) plain only intent of to be that an [§ ] funds misapplication of the defraud and legislature may of the remove an of act purposes expenses of the than the other principles general fense from the estab project, “ground it is not a defense” in the first titles of lished three the Code.” § 2.03(e) under TEX. PENAL CODE ANN. general provisions 423. The of con Id. at (Vernon 1974). The of the offense proof here are define exceptions cern those which re calls of the same evidence for some TEX.PENAL CODE ANN. and defenses. quired exception. disprove to §§ 2.02, (Vernon 1974). Cf. 2.03 111, 199-20, Bennett, F.2d Stump 398 v. (a) pro Subsection of Section 2.02 (8th Cir.) (evidence imper- of a defense exceptions that all are labeled as fol vides missibly persuasion shifted burden exception application “It is an lows: negate indispensible elements defendant to ” (c) however, provides, of .... Subsection denied, 1001, crime), 393 U.S. cert. excep section does not affect “[t]his (1968). 483, Fur 21 L.Ed.2d 466 S.Ct. applicable prior tions offenses enacted ther, overhead” proviso “reasonable Hence, the effective date of this code.” in the definition of funds contained legislature to allow intended certain to be trust that article 5472e declares proof penal exculpatory matters of stat as stated another appears funds. It exceptions outside of code to be utes received for proper of funds application required by despite the absence of the label materials. than other labor (a). has the burden subsection The State statute, is not re Under the defendant negate exception the existence of an only to quired went to show charging and to be instrument be un It would laborers and materialmen. yond exception a reasonable doubt require a defendant reasonable applicable. TEX.PENAL is not CODE “reasonable over the use of his § 2.02(b) (Vernon 1974). ANN. prove the head” the State has to while hand, with a de On the other the direct ex funds were not used for issue, fense, raises the once evidence the “reasonable penses job. Since disprove beyond must the defense the State ground provision is not overhead” doubt, provided the court a reasonable defense, defense, and is labeled as a is not charges jury the existence of the as to provisions of general from the excluded TEX.PENAL CODE ANN. defense. code, exception. penal it must be an 1974) (Practice 2.03(d) exception as an While it is not labeled State, Commentary), in Luck v. construed 2.02, either, permits an unlabeled section (en (Tex.Cr.App.1979) 588 S.W.2d predating the code to exception in a law banc), denied, 446 U.S. 100 S.Ct. cert. language exception. Despite remain an (1980). The L.Ed.2d failure to 2.03(e), Criminal the Court section on a defense waives request an instruction recognized penal statute Appeals that a has from such failure. stemming error exceptions contain may outside of the Code (Tex.Cr. v. 495 S.W.2d White Threlkeld as well as defenses. See provides also App.1973). 2.03 Section (Tex.Cr.App.1977) penal ground of in a law defense “[a] (dictum). plainly in accordance with is not labeled Having concluded that “reason exception, eludes that overhead is an rather exception, able overhead” is an defense, it follows than a under the statute. Accord- 2.02, that under section had to ingly, compelled my I am to state in views prove payees checks to concurring opinion. GTE, Apartments, such as Chivas and First majority Neither the nor dissenting National Bank were not “reasonable over opinion construes TEX.REV.CIV.STAT. head.” We conclude that the State failed (Vernon Supp. 1982-1983), ANN. art. 5472e carry that burden it because did not states: which application show the of these For checks. moneys paid Section 1. All or funds example, the State could have introduced any to a contractor or subcontractor or evidence of the bills from GTE for which officer, thereof, agent director or under a payment. checks were The State did improve- construction contract for the prove that the allocated his specific ment of real property in this expenses overhead in an unreasonable man state, and all funds borrowed a con- ner. See North Texas Operating Engi tractor, subcontractor, owner, any or of- Masonry, F.Supp. neers v. Dixie ficer, agent thereof, director or for the (N.D.Tex.1982) (In 519-20 civil case under purpose improving property such real 5472e, overhead, definition, because in which are part by secured whole or in business, “expenses cludes of a without specific a on property lien im- to be regard outlay particular on a con proved hereby declared to be tract,” Trust expenses overhead need not be di artisans, Funds for the benefit of the rectly particular project traceable but laborers, mechanics, contractors, only reasonably need expenses reflect the subcon- fact, associated project). may with each In tractors or materialmen who labor State did not payments which were or furnish labor or material for the con- materials, labor, made for and for over house, repair any building struction or expenses, head respectively, and did not improvement or whatever such real payments came out of the however, property; provided, that mon- Coxes’ installments rather than from some eys paid to a contractor or subcontractor hold, therefore, other source. We contractor, or borrowed subcontrac- State failed to sustain proving its burden of tor, may or owner be used to reason- that the checks offered were not overhead contractor, able overhead of said subcon- expenses project.3 related to this tractor, owner, directly or related to such Accordingly, contractor, we reverse and remand contract. The with subcontractor, owner, officer, instructions to enter an order of any ac- or di- quittal. thereof, agent receiving rector or such funds, having or or control or CARVER, JJ., ALLEN and join in this same, direction hereby made and opinion. constituted a Trustee of such funds so received or under his or AKIN, Justice, control direction. concurring. Trustee, Any shall, 2. Sec. who direct- Although I judgment concur ly indirectly, or defraud, with intent majority judgment of conviction retain, use, disburse, misapply, other- or should judgment be reversed and a of ac- divert, funds, wise part trust rendered, quittal agree I cannot thereof, as defined Section 1 of this majority’s opinion majority because the Act, fully paying without first and satis- legislature fails to address the intent of the fying obligations enacting all of the Trustee to all TEX.REV.CIV.STAT.ANN. art. artisans, laborers, mechanics, 1982-1983) Supp. 5472e contrac- and be- majority opinion tors, subcontractors, materialmen, cause the incorrectly con- in- Peterson, here, Judge Additionally, ap- Onion observed that S.W.2d at 812. appears pears process much in the record it punish appellant "[f]rom the criminal law ... was used to process being shoddy utilized to workmanship. arising collect a debt out aof contract. . . .” (381 1979) Dictionary or in connection Law rev. 5th ed. curred to be incurred improvements, with the construction and phrase defines this as follows: received, for funds shall which said were to an Intent means intention to defraud misapplied be deemed to have said Trust person, to deceive another induce Misapplication Funds. of Trust Funds person, upon such other reliance such $250, hereunder, under the value of shall assume, create, transfer, deception, to punished imprisonment jail not by be right, obligation terminate a alter or or exceeding years two fine not ex- power property. with reference to $500, ceeding imprisonment or such Thus, definition, appears which under this Misapplication of Trust without fine. one, prove must to be a correct the State hereunder, of of $250 Funds the value was done that the of trust funds diversion punished by over confinement in shall be either workmen with the intent to deceive Department peri- the of Corrections for rely to [Emphasis to induce them exceeding years. od ten or materialmen so as not deception. In upon the to their detriment added]. to de- of intent applying this definition language ques- From the of this statute fraud, support a to there no evidence respect to tion exists with whether the finding such an defendant had offense is committed when the defendant the with intent contractor diverts trust funds intent were diverted. when funds the or materialmen or to defraud workmen “intent accept cannot the definition an is committed when the whether offense Guillot’s forth in Justice to defraud” set to workmen or materi- contractor fails he “in- opinion, where dissenting defines insufficient, are almen because the funds an “intent to mean tent defraud” here, such as and where certain kept must for impair which the funds purposes diverted to other previously were suppliers.” workers the benefit the statute, specified would than those definition, intent to Under Justice Guillot’s when the hold that the statute was violated any meaningless because defraud becomes any funds with contractor diverted trust any for would diversion reason of funds intent defraud either workmen mate- view, the impair my fund. the trust rialmen, regardless of the contrac- whether something require legislature’s intent ultimately paid from tor the workmen oth- of the trust fund impairment more than an Thus, any when funds are er sources. 3 of language section is shown the paying purposes diverted for other than provides: article 5472e workmen, over- materialmen or reasonable head, violated, if the statute is diver- paid, Trust Funds Where Sec. 3. defraud. Conse- sion with the intent to diverted, used, or otherwise misapplied, to prove the State had the burden quently, act consti- that such in such a manner pur- of trust funds that each diversion this Act and some tutes a violation of paying workmen and ma- poses other than the laws under punishable other offense intent to defraud terialmen was with the Texas, thus party of the State materialmen. the workmen and prosecu- amenable to offending shall be statute, language under the Since misapplica- election tion at the state’s only a diversion must Act or for trust funds under this tion of funds, imply, seems to but as the dissent may have been such other offense as also di- must defendant [Emphasis by him. committed added]. “an intent to de- the funds with verted it language is obvious From this and materialmen. fraud” the workmen mere di- than a legislature intended more Thus, presented question is what did “impairment” to constitute version or legislature phrase intend the “intent by2 the use of specified in section offense within the ambit arti- defraud” mean that such a manner language “in such “in- respect phrase cle 5472e? With Act.” of this constitutes a violation act defraud,” find I have been unable to tent phrase, legislature used this term. Black’s When defining Texas case re-emphasized that the diversion must be is a defense with the burden with the intent to defraud. respect committed adduce evidence defendant to with to his reasonable overhead. Even this dissenting opin- majority Both the prove situation the State has the burden agree evidence ions that circumstantial expenses that these “overhead” were not necessarily must be resorted to so as to project and thus is the related to the prove the intent to defraud which I the crux of the offense. would hold that justified were as such. prove failed to that each diversion § (Ver- TEX.PENAL CODE ANN. 2.02 defraud, with the intent

was done 1974) “Exceptions” non defines while require trier fact rational should 2.02(a) a “Defense.” 2.03 defines Section beyond a reasonable doubt. Jackson v. (c) provide: 307, (N. 12), Virginia, 443 U.S. S.Ct. (a) exception An to an offense in this (N. 12), (1974); 2781, 2789 61 L.Ed.2d 560 phrase: is labeled the “It is code so 465, State, 654 see v. S.W.2d Wilson exception application an to the of....” (Tex.Cr.App.1983). example, For when the [Emphasis Added] deposited payment defendant the first from (c) excep- This section does not affect (the owners) the Coxes into an account that applicable pri- enacted tions offenses overdrawn, already the was the State had the date this code. effective prove that this act done burden was with [Emphasis Added] the intent to defraud the workmen on the job as well as the materialmen who fur- art. Since TEX.REV.CIV.STAT.ANN. project. nished materials for the this (Vernon 1982-1983) Supp. enact- 5472e respect, appellant may thought the at have 1967, 28, 1967, and, August ed in effective enough the time that he had from since Article 5472e is not the Texas the contract to all workmen and mate- Code, majority’s upon Penal reliance rialmen, apart from re- these funds. With provisions these to hold that overhead ex- funds, spect to each diversion of trust penses exception, are an rather than a de- prove State failed to that even one diver- fense, Instead, by precise misplaced. is sion was with the intent to defraud the 2.02, language present ques- of section workmen and the materialmen. The State tion is not determined that section. alleged in the indictment that the offense Thus, I would hold that Section 2.02 has no appellant occurred when issued insuffi- application present case. cient fund checks to three of his workmen § 2.03(e) TEX.PENAL ANN. CODE although the record is unclear as to wheth- 1974) does, however, pertain to er these checks were issued for work on 2.03(e) provides: Article 5472e. Subsection project they or whether were is- Cox “A ground penal of defense in a law that respect job. subsequent sued with to a plainly is not in accordance with labeled proof respect. The State’s also failed this chapter procedural has the and eviden- this Accordingly, majority’s I concur in the con- tiary [Empha a defense.” consequence of that the State failed to clusion Ar question Because without sis Added]. appellant diverted funds with intent to law,” “penal ticle 5472e is a the sense respect with to each diversion. defraud liberty person may deprived that a of his Although agree majority I with the statute, for the violation of that Subsection failed to the State 2.03(e) controlling dissenting opin funds with the intent to de- diverted trust correctly notes. ion Justice Guillot Goss fraud, agree majority I cannot (Tex.Cr.App. 582 S.W.2d v. exception, is an that “reasonable overhead” 1979); State, 552 Broyles v. on the State to placing thus burden (Tex.Cr.App.1977); Bocanegra v. negate charg- “reasonable overhead” (Tex.Cr.App. 131-32 ing prove beyond instrument and to a rea- 1977). true Article 5472e This is because exception inappli- sonable doubt that the over plainly label “reasonable Instead, does that the “rea- cable. would hold Accordingly, exception. provision in the statute head” as an sonable overhead” request sonably proscribed. evidence and understand burden to adduce to be appropriate jury Euclid, Ohio, instructions on reasonable v. City Palmer 402 U.S. should be the defendant 544, 546, 1563, 1564, overhead 91 S.Ct. 29 L.Ed.2d 98 statute, charged rather than the under (1971). Living rule under a of law entails State. suppositions, various one which is persons all are entitled to be informed as to

STEPHENS, J., joins opinion. in this what the State commands forbids. Pa Jacksonville, pachristou City WHITHAM, Justice, concurring. 156, 162, 839, 843, U.S. 92 S.Ct. 31 L.Ed.2d express in the result. I write concur (1972). put by 110 As of Court Crimi my view that TEX.REV.CIV.STAT.ANN. Halsted, Appeals nal in Ex Tex. Parte 147 (Vernon 1982-1983), Supp. 5472e is un- art. 453, 479, (1944): S.W.2d 482 Cr.R. 182 constitutionally vague on its face because government, system Under our of following provision in of Section of pass any legislature power has the to the Act: may proper, it and all laws which to seem however, [Pjrovided paid that monies to long provisions no so as same violate or bor- a contractor or subcontractor subcontractor, A by rowed a contractor or our State or Federal Constitutions. may pay or owner be used to reasonable sufficiently must definite that its law be contractor, of said subcontrac- known, overhead may un- provisions terms and be tor, owner, directly or related to such derstood, applied. An Act and [Emphasis construction contract. add- violates either of said legislature which ed.] Constitutions, vague, or an Act that is so indefinite, I Accordingly, incapa- would sustain uncertain as to be and ground acquit. understood, first error and is void and un- being ble of A void law affords no enforcible [sic]. Under Article 5472e the trust prosecution. basis for a criminal “may be used to reasonable overhead directly ... related” to the contract. Arti- Granviel, 561 And later in Ex Parte cle 5472e does not define “reasonable over- (en 503, (Tex.Cr.App.1978) directly head” or overhead re- “reasonable banc), quoting from Halsted: Ap- lated such construction contract.” sufficiently a must definite ... “law be argues the statute is unconsti- pellant provisions may its terms and vague in that fails to delineate tutionally known, understood, applied. An Act and payment can extent to which be made legislature violates either which apart par- ongoing business costs from Texas], or said Constitutions or [Federal given job. I overhead incurred on ticular indefinite, and vague, an Act that is so agree. being incapable of uncertain as to be with penal A statute must be drafted understood, is void and unenforcible” clarity to enable the individual to sufficient [sic]. pro what conduct is exactly understand at “reasonable” is issue Where word if it is to withstand constitutional scribed per- person’s actions am a measure of a scrutiny. Connally v. General Construc reasoning Libby- suaded Parks 385, 393, 46 S.Ct. Company, tion 269 U.S. Co., 360 Ill. Owens-Ford Glass 126, 128, (1926). 70 L.Ed. 322 A statute (1935), in which the statute N.E. requires doing which either forbids before the court was held unconstitutional- vague so that men of of an act terms ly vagueness: void intelligence necessarily must common “provide reasonable expression The meaning differ as to its guess its at devices, means or methods approved application violates the first essential of prevention such industrial for the process Connally of law. at due occupational diseases as are incident principle is underlying at 127. The S.Ct. appears the last process” work or respon such criminally no held that man shall be employer of part Each not rea- of section 1.... which he could sible conduct place judg- labor must his own construction remanded with instructions enter a upon general acquittal. these words without ment of guidance. purport does Section not whereby VANCE, J.,

fix joins opinion. a standard of conduct an in this employer may any degree of cer- with GUILLOT, Justice, dissenting. duty tainty know the that rests him respectfully majority dissent from the under it. A device deemed reasonable and the concurrence. employer one might well be considered unreasonable another. ... re- basic fallacy majority’s first employer required sult is that each pur reasoning very is that it overlooks the determine, at peril, his what is reasona- pose of art. TEX.REV.CIV.STAT.ANN. approved device. court ble and If a or a 1982-1983) Supp. 5472e is to jury subsequently determines the make general contractors of state ap- device used was not trustees, reasonable trustees—involuntary trus but proved subject he is liability unlimited tees nevertheless. As a result of the stat judgment. for his mistake An ute, honest general fiduci contractors owe a attempt comply will the law ary duty suppli to their subcontractors and of itself afford him a defense. ers good and must act towards them with Dougherty Roofing faith. Tucker v. See In my view present the trustee in the Co., 884, (Tex.Civ.App.— 137 S.W.2d guess case must to as what the statute dism’d). Dallas writ means it when refers to “reasonable over- directly head ... related” to the fallacy contract. The in majority’s second basic the Therefore, the is statute not drafted with reasoning requires is that it to the State clarity sufficient to enable an individual to trace proceeds the of checks issued the exactly pro- understand what conduct is general in order contractor to establish vague, indefinite, and scribed is so and of payees the checks received the as incapable being uncertain to be proceeds under- than rather cashed the checks. stood. That required the statute lacks the necessary, says, This is to show intent to clarity impose to criminal sanctions is un- require defraud. But the statute doesn’t derstandable. The statute is contained in tracing in prove of checks order to intent. statutes, the civil not the criminal code. required simply What is to a dis show obviously The statute way bursement, use, retention, found its into misapplication, the civil statutes in order impress upon to or other diversion trust funds with the persons certain necessity paying the intent often to defraud. Intent most Nevertheless, their debts—or else. I proven can- circumstantially. Proof of similar agree that invoking when the “or else” emerging schemes from extraneous of may place persons the State of Texas those fenses is often most the method used. See in position guessing the State, (Tex.Cr. the amount of Crawley v. 513 S.W.2d 62 directly “reasonable overhead ... related” App.1974); Albrecht v. 486 S.W.2d to a construction contract will (Tex.Cr.App.1972). meet To the demonstrate judge jury approval going with and to fallacy of con majority’s reasoning, the penitentiary they guess wrong. if folly sider the sheer attor district my opinion precisely investigator that is what the mi- ney’s asking someone at Gen nority permits the State of Texas to do. Telephone eral if the for checks $228.13 appellant were cashed them for $118.74 It I follows that would hold Article 5472e they payment phone or if for a bill. were vague unconstitutionally on face its and Therefore, thus void and unenforceable. basic fallacy majority’s third denouncing there exists no law as de- reasoning analysis valid a is its of intent to against appellant. charged crime the acts fraud must in and what Accordingly, concur the trial court’s order to establish it. The most difficult judgment problem interpreting must be reversed and the case in the statute is the

meaning (Tex.Cr.App. “intent to defraud.” Does it 486 S.W.2d trustee, 1972). mean that the at the time of each separate misapplication, necessarily must I conclude evidence is sufficient his pay suppli- intend not to workers and to convince a rational trier fact so, meaning If little ers? the statute has beyond reasonable doubt the practical no and effect because under that misapplied and diverted trust funds with

interpretation permit him the statute would in he intent to defraud did not intend expects divert funds if he to borrow keep the trust funds intact for the bene- get money, or from another money suppliers job. fit of his workers and on this pay job to his bills labor and materials job question. language of on the fallacy majority’s The final basic was intended to the statute shows that it reasoning is that it concludes that “reason trustee of the make each contractor a exception able overhead” constitutes an require job from each and funds received disagree rather than defense. intact, except for keep him to those funds majority’s characterization of evidence of suppliers, until workers and being “reasonable overhead” the nature paid. suppliers all his workers inferential rebuttal. In civil actions an stop Clearly, legislative purpose funds, misapplication of trust use practice of some contractors to plead job pay bills must that his funds from one construction trustee ex administering or to the contractor’s penses due for another the trust were rea all workers and living expenses own before necessary. Corpus sonable See paid. to de- suppliers been “Intent Roberts, have Bank Trust Christi & fraud,” therefore, to im- must mean intent (Tex.Civ.App.—Corpus kept for the pair the which must be 1979), fund modified, Christi aff'd suppliers. A (Tex.1980). In'short, of the workers and benefit he must account trust misapplies or diverts trustee who use of funds. use of The trust ground be excused on may administering funds not monies in a trust is a defense not to cause his really he did intend in civil law and also in criminal law. With Consequently, the any loss. in beneficiary this brief review of the basic errors defraud, opinions, need concurring in intent to I address proving majority trustee, at the time of appellant’s grounds establish that the error. funds, no intention to diverting the had of error, appel- grounds first three In his from other source. pay his workmen some his is void conviction lant contends divert, knowledge of with The intent art. TEX.REV.CIV.STAT.ANN. because fund, intent is sufficient impairment of the (Vernon Supp.1982-1983)is unconsti- 5472e defraud. perti- In tutionally vague and overbroad. evi- is If this intent not shown follows: reads as part, article 5472e nent diversion of concerning appellant’s dence receipts payments and loan Construction clear job, that intent is from the Cox trust funds declared is considered enough this evidence when moneys paid 1. All or funds Section appellant’s han- along with the evidence any or subcontractor contractor or to a Wesley-Rankin Commu- dling job of the at thereof, officer, agent under a or director same time. at about the nity Center improve- for the contract Wesley-Rankin that on the shows evidence specific property real in this ment a similar followed appellant’s conduct job state, by a con- all funds borrowed pur- to other of funds pattern: diversion subcontractor, any tractor, or offi- owner workmanship, failure to com- poor poses, thereof, cer, agent for the or director work, pay expenses and failure plete the property such real improving purpose theory of this job. The on the incurred part by or secured whole that, if one instance proof extraneous is to be im- property specific on the a lien intent, pattern of not establish does declared to be Trust hereby proved are in- or more by two shown similar conduct artisans, for the benefit v. Funds so. Albrecht enough to do is stances laborers, mechanics, contractors, 839, (1972); subcon- 92 S.Ct. L.Ed. 110 Con may or Co., tractors materialmen who labor nally v. General Construction or furnish or for the con- labor material (1926). U.S. 46 S.Ct. 70 L.Ed. 322 repair house, any building struction or Regulatory governing statutes business improvement or whatever such real activity greater leeway are to be allowed however, property; provided, mon- applying the fair notice Such test. statutes eys paid to a or contractor subcontractor automatically vague are not invalidated contractor, or borrowed a subcontrac- difficulty in determining because of wheth tor, or owner may be used to rea- er marginal offenses fall within lan their contractor, sonable overhead of said sub- guage. Pennington Singleton, See contractor, owner, directly or related to (Tex.1980), S.W.2d 682 and cases cited such construction contract. con- Furthermore, therein. fact a stat tractor, subcontractor, owner, any or of- requires specific given ute has intent been ficer, thereof, agent receiving director or weight by rejecting vague courts void for funds, having such or or con- challenges. enacting ness Id. at 689. a same, hereby trol or direction made statute, (1) presumed it is compliance that: a and constituted Trustee of such funds with the constitutions this state and the so received or or under his control di- (2) intended; United States is entire rection. effective; (3) statute is intended to be Wrongful disbursement, use or retention intended; just (4) and reasonable result is of trust funds intended; result feasible of execution is Trustee, shall, Any Sec. 2. who di- (5) public interest is favored over rectly indirectly, or with intent to de- private interest. TEX.REV.CIV.STAT. retain, use, fraud, disburse, misapply, 5429b-2, ANN. Supp. art. 3.01 divert, funds, or otherwise any trust or 1982-1983); see Parr v. thereof, part as defined Section 1 of 522 (Tex.Cr.App.1978). Act, without fully paying and first satisfying obligations all of the Trustee Appellant’s ground first of error is that artisans, mechanics, laborers, to all con- unconstitutionally vague by article 5472e tractors, subcontractors, materialmen, give failing to notice of what conduct is incurred or to be incurred in connection proscribed adequately because does not improvements, construction and (1) “use, following define the terms: dis received, for which said funds were shall burse, divert”; (2) misapply, otherwise misapplied be deemed to have said (3) “obligations”; and “reasonable over Misapplication Trust Funds. of Trust head.” I note a is uncon that statute not hereunder, Funds under the value of stitutionally vague because the words or $250, punished by shall imprisonment be specially terms are not defined. Koah v. jail exceeding in not years by two and (Tex.Cr.App.1980); 604 S.W.2d 156 $500, exceeding not by fine or im- such (Tex.Cr.App. Floyd v. prisonment Misapplication without fine. 1978). a Terms not defined in statute are hereunder, of Trust Funds of the value plain given ordinary to be their mean and punished of or be over shall $250 ing, and words defined in dictionaries and confinement in the of Department Cor- meanings to so well known as be period exceeding rections a not ten person ordinary a of intelli understood years. [Emphasis added]. gence vague be and are not to considered vague penal For a statute to void for be Floyd, indefinite. at 23. ness, must require either forbid or “use, disburse, regard phrase With doing vague an act in of terms so that men divert,” appellant or misapply, otherwise intelligence necessarily of common must argues a that the statute fails to create guess meaning at its differ to and as its priorities. alleged scheme The constitu- application, violating the thus fair notice is not deficiency tional is that the trustee requirements process Papa of due of law. Jacksonville, to order in the differ- City christou U.S. advised as construction, e.g., expenses include ent costs of material the continuous of a busi- wages, paid. are to opposed as be regard particular costs to to a ness without con- is I conclude that article 5472e not uncon- Inc., Masonry, F.Supp. tract. at Dixie The for this reason. trustee is stitutional 519. term “reasonable” was used to obligated both materials and place on the amount of a limitation over- wages, protects both and statute expenses be allocated a head that could equally. Appellant classes beneficiaries particular construction contract. Id. why fails one of beneficiar- to indicate class expenses readily Overhead that cannot be preferential ies should accorded treat- be particular directly contract are traced a ment, and, further, any I not have found if job related could not have been ob- compels logic in that such a reason law completed tained or without them. at Id. vague scheme. The statute is not this Thus, general administration ex- respect. penses of a business can be shown to be Next, complains article directly particular to a overhead related fails distin- vague 5472e is because it project. “obliga- legal non-legal guish between and Masonry, the court in Dixie As noted His argument tions.” statute is 5472e, provision and article Inc. exclude from deficient because it does not whole, discourage contrac- were enacted liability criminal situations which the job’s expenses paying tors from the last lawfully payment, e.g., trustee withholds financing. require- job’s with the next per- employee when an or subcontractor directly ment that overhead inis forms substandard work and breach is to as- related to a construction contract disagree. to obtain a contract. order nonfraudulently sure that funds would be conviction, requires the statute ongo- applied expenses associated with misapplication use funds result- trust projects. Masonry, Dixie ing construction ing obliga- of such nonsatisfaction Inc., F.Supp. I conclude that at 520. tions be done with “intent defraud.” challenged phrase is not unconstitution- payment or re- When a trustee withholds dispute ally vague. a legitimate funds tains because due, lawfully payment is then over whether whole, I cannot Viewing the statute as present a viola- intent to defraud incapa- any of the terms used are say that tion has not occurred. For statute being by persons of com- ble of understood reasons, I hold that the statute these would ordinary intelligence. I conclude mon or legal distinguish does effect between on fair notice that the defendant would be non-legal obligations. (1) proscribed was the conduct argument under his Appellant’s third funds misapplication of construction trust ground first of error is that article 5472e is obligations all (2) fully paying without first because, using term “reasona- vague (3) statutory beneficiaries owed to the overhead,” to ade- the statute fails ble defraud. would over- with the intent to to which trust quately define extent ground of error. appellant’s first rule pay ongoing can be used to business appellant contends ground, In his second directly particular related to costs 5472e is unconstitutional be- that article project for which the funds received. penalty give notice cause it fails Again, disagree. The I statute clearly conduct group proscribed which the into “may used to trust funds be states argues penalty Appellant that the directly relat- will fall. overhead ... reasonable contract.” be inter- provision ambiguous ed to such construction and can preted to that the difference between mean this I the construction of agree with ei- punishment is felony and misdemeanor by the court in North phrase formulated .misappro- sum of trust funds ther the total Health Bene- Operating Engineers Texas misap- act of priated or amount of each Inc., Masonry, 544 Fund v. Dixie fit disagree. 2 Section propriation or fraud. (N.D.Tex.1982). “Overhead” F.Supp. to first the trustee requires article 5472e generally term understood broad satisfy obligations all ground owed all benefici states that of defense in a “[a] so, If aries. the trustee fails to do then it penal plainly law that is not labeled in proof is a matter of as to the amount of chapter proce accordance with this has the funds that were received the trustee but evidentiary dural consequences and of a purposes used for expenses other than for Schope State, defense.” See particular related to the construction con (Tex.App.—Houston 1982, [14th Dist.] essence, tract. In the concern is with one pet. ref’d); State, Memet v. 642 S.W.2d 518 involving offense several transactions or (Tex.App.—Houston 1982, pet. [14th Dist.] instances of misapplication resulting in the 'd) (conviction ref reversed on other failure to meet payroll obligations. See grounds). Furthermore, I would hold that State, (Tex.Cr. McCaleb v. 537 S.W.2d 728 all elements of the offense could be estab App.1976); State, McClelland v. proof negates lished without which the ex denied, S.W.2d 777 (Tex.Cr.App.1965),cert. issue, and, thus, istence of the defensive 928, 307, 382 U.S. 86 S.Ct. 15 L.Ed.2d 340 was plead not incumbent the State to (1965). To proper penalty determine the prove the nonexistence of the defense. range, I would hold that the total amount State, 527, Baker v. 132 Tex.Cr. misapplied of funds respect given to a (1937); S.W.2d see Kirk v. construction contract is controlling. 194 n. 8 (Tex.App.—Austin ground error, In his third appellant 'd). pet. ref contends that article 5472e is unconstitu- In ground error, his next appellant tionally overbroad because it authorizes contends that the evidence is insufficient to conviction for activity. lawful This is es- support his appellant’s conviction because sentially the argument same made with testimony established, conclusively at trial respect to the failure of article 5472e to defense, defense, whether affirmative define the term “obligations.” In this exception, that all of the funds received ground, appellant may contends that he Thus, were used on reasonable overhead. prosecuted for legally withholding payment appellant argues that the State has failed wages for or materials. previously As dis- intent I disagree. defraud. cussed, the requires statute intent to de- that, The record reflects fraud, and, September on thus, I would hold that article 28, 1978, appellant entered into 5472e a contract is not Again, overbroad. withhold- required him ing to remodel a payment home lo- legitimate because of a dis- Branch, cated in pute Texas, Farmers is, fact, over whether payment for a due total $17,437.00. equal Upon does not cost of signing fraud. the con- would overrule tract, ground. third the homeowners made án initial down payment by giving appellant a check for grounds error, two appellant con- $4,359.25. The check deposited into tends that his conviction is void because it appellant’s business Irving account at Bank (1) is based on: a fundamentally defective September check, on 1978. From this indictment which negate fails to a statuto- $3,311.25 received in cash result- ry exception offense; (2) evi- ing $1,048.00. deposit a net At the dence which negate fails to the statutory time of deposit, appellant’s account had exception. grounds Both rely on the as- negative balance of $4.63. Cleared that, sumption under TEX.PENAL CODE against (1) deposit negative were: (Vernon 1974), ANN. 2.02 the State must $4.63; (2) balance of charge a $16.00 plead misapplied checks written before the date of the con- were not used to pay reasonable overhead funds; tract and returned for insufficient directly related to the construction con- (3) Telephone a check to General however, tract. The has no such 27, 1978; September (4) dated language $517.09 burden because the of article payroll specify 5472e does not check to Jose B. Flores in the whether this defen- defense, and, exception September sive issue is an amount of dated $157.69 or a § thus, 2.03(e) TEX.PENAL CODE ANN. 1978. The also introduced evidence (Vernon 1974) 2.03(e) controls. Section that the proceeded work on the house in an 874 manner; Next, appellant contends that his

unsupervised and unworkmanlike convic- $15,693.30 of tion is void because it is based on a receiving a total funda- that after in mentally he defective indictment that it al- appellant project; the that abandoned leges separate three and distinct offenses checks made out to payroll failed to honor house; single paragraph. Appellant’s in a conten- on employees three who worked the is that TEX.CODE CRIM.PROC.ANN. tion jobsite another un- and that his actions at 21.24(b) (Vernon Supp.1982-1983), art. supervision substantially simi- der his were joinder, precludes has been violated lar. because the indictment names three work- in Appellant testified his own behalf and unpaid for services ers who remain ren- received were used for stated all funds in connection with the dered or labor in connection with the materials disagree. alleg- project. The indictment using remodeling He project. denied defraud, that, appel- es with the intent to purposes other than funds reasonable misapplied lant excess of $250.00 directly overhead related to the construc- received: project. Appellant attempted tion to ex- for the “under a construction contract shortage and failure to plain the of funds improvement specific property, real complete by claiming he project the Queens Chapel, Farmers to-wit: 14260 cost. He admitted be- under-estimated the Texas, Branch, fully paying first without ing complete the financially unable to obligations satisfying all of the said project. artisans, laborers, mechan- Trustee all provision Since the reasonable overhead ics, contractors, sub-contractors, and ma- defense, 5472e of a is the nature terialmen, Saleh, Gary James to-wit: producing the evi had burden Coker, Coker, incurred in and Walter the the issue dence to raise defense. Once with construction and im- connection raised, per is has burden of the State provements for were which said funds disprove suasion and must the defense. received ...” (Tex.Cr. State, Ramos v. 478 S.W.2d plead evidence required The State is not App.1972); Sckope, 647 at 681. S.W.2d on, and, indictment relied when the tracks However, require the State to this does not statute, it is a language of the rare controverting evi introduce affirmative exception legally it insufficient to theory. John dence to rebut defensive charged offense. provide notice State, (Tex.Cr.App. son v. (Tex.Cr.App. May 618 S.W.2d 333 1978). vacated, 1981) banc), (en 454 U.S. Appellant’s testimony has raised defen- (1981), aff'd, L.Ed.2d 374 on S.Ct. issue, but, record, I sive based on remand, (Tex.Cr .App. 632 S.W.2d 751 has carried its 1982); would hold that the State S.W.2d 929 Phillips v. judge of the jury is the sole (Tex.Cr.App.1980). burden. I would hold may accept credibility language of the stat- witnesses indictment tracks the testimony ute, and, stating names of the three reject any part or all of the Johnson, laborers, evidence merely pleading given by any witness. allegation that support all relied on at 173. The State’s evidence clear- obligations have not been $250, to all laborers funds, in excess of ly shows that satisfied. to clear project for the were used received obliga- given payment checks his con- Appellant further contends that prior date of the con- incurred tions is void because the State failed viction appel- specific The evidence also shows charge tract. him with the more properly obligations check, to labor- failed to fulfill all as stated lant of theft offense jury CODE ANN. project. on the of TEX.PENAL ers who worked version § and un- explana- Supp.1982-1983) defendant’s 31.03 free to disbelieve funds, and, thus, 31.06 ANN. der TEX.PENAL CODE shortage tion of check, (Vernon 1974), of a or issuance bad ground. overrule this would ant_” TEX.PENAL CODE ANN. 32.41 I appellant’s would overrule fi- 1974). Appellant argues ground. that the nal evidence merely he

shows that issued bad checks I would affirm the conviction. and that there was no evidence he improperly any diverted trust funds. I dis- GUITTARD, SPARLING, ROWE and agree. noted, previously As the evidence STEWART,JJ., join in opinion. clearly appellant shows that used funds for SPARLING, Justice, dissenting. purposes other particular than for the con- join dissenting. I Furthermore, struction contract. I believe gist that article 5472e specifically applies appel- to the The of this offense is that the construction, circumstances of lant appellant money this case in that received and laborers, fraudulently defrauded his he persons the class of failed to disburse these protected 5472e, by misap- laborers—despite article funds to his duty his as a short, plying construction In fiduciary trust funds received in to do so. the State must prove laborers, connection with particular project on he didn’t his rather persons which those spend worked. than how he money. See Jones v. did State, (Tex.Cr.App.1977). 552 S.W.2d 836 I majority1 imposed Yet the has an un- would overrule this contention. precedented duty2 upon the State to trace

Finally, appellant complainant contends that the trial funds from the ap- pellant account, to, court committed appellant’s reversible error in bank admit- ting through, persons. evidence of an the hands of extraneous offense. third argues He would hold that the State has no such State failed to show Therefore, sufficient burden. similarity the fact that the charged between the imperfectly offense tried to do that and the which was not justi- extraneous offense to required fy consequence. is of no its admission to scienter or state event, would the liquor what records of the State, mind. See Albrecht v. store, apartment complex, telephone or (Tex.Cr.App.1972). believe, however, company realistically proved? have If the pat- evidence an shows identical records indicated that cash had been re- tern of events in connection with another from, instance, telephone ceived project construction appellant under- company, the information would have been took. An payment initial from the owner valueless unless the proved State further deposited was in appellant’s bank account spent. how the cash was If telephone satisfy obligations and was used to unrelat- records indicated check ed to the project. The record paid bill, telephone that too would have (1) further shows: that the work was im- been valueless unless the calls were traced properly poorly supervised; (2) done and purpose to determine that their was not plumbing that a subcontractor remained project. related to this construction unpaid for services rendered in connection majority imposed has an unrealistic burden project; (3) with the was upon the State. paid the full complete amount of his bid to project. I would hold that the trial Further, viewing instead the evidence admitting court did not err in this evidence verdict, light most favorable to the scheme, plan, design to show and intent. the majority apparently championed has jury properly charged only con- espoused by appellant. the defense For sider determining this evidence “in the in- example, they “Appellant write: testified tent, scheme, design many of the Defend- pay- that he made of his business Although actually majority 1. there is (Tex.Cr.App. no in this Watkins v. 438 S.W.2d 819 case, opinion 1969), I use the word in reference to the by majority, both cited these but cases Storey. Associate Justice only require that the State that the check deposited—nothing was cashed or more. Tracing required Compton of funds is (Tex.Cr.App.1979), 607 S.W.2d 246

876 cash,” appel- example, merits with and sufficient to “For intent “without other $1,006 lant testified that he delivered the (emphasis or knowledge” evidence intent Liquor check B B cashier’s to & ...” mine). (1) We are reminded that the Thus, appears majority it the has case; (2) present case not a is theft there is sufficiency from viewed the of the evidence language requires no in article 5472e that appellant’s perspective—ignoring the the knowledge; “other” evidence of intent or jury fundamental truth that the does not (3) is, law, fiduciary. the a appellant to the ap- have believe to which anything however, If a case in which intent sum, pellant appears testifies. may act, not be inferred from the criminal swapped its for a majority the has robe may an to extraneous offense be admitted badge. jury State, prove intent. Albrecht v. 486 empa- example majority’s Another of the 97, 100 Yet, (Tex.Cr.App.1972). S.W.2d the thy may with the accused be found in their majority has that an extraneous concluded statement, appel- “The record reflects that offense—the similar conduct surely lant made some with cash plumber, failing pay to a his subcontrac pur- numerous materials were because proof no of intent.5 In so hold tor—was paid for by chased which were check.” ing, ignored majority effectively a the has Again, majority appellant’s tes- adopts the long jurisprudence line of criminal timony. just It is as for the reasonable ap- State, the jury contrary. believe from evidence that v. Rogers 598 S.W.2d 258 materialmen, path pellant unpaid left a State, (Tex.Cr.App.1980); Reger v. 598 unpaid majori- he Yet the did laborers. (Tex.Cr.App.1980); 868 S.W.2d Christian proceeds the ty chooses assume that State, (Tex.Cr.App. 42 sen v. apartment from a check written to an State, 1979); Crawley v. 513 S.W.2d 62 may up house have ended in the hands a State, (Tex.Cr.App.1974); v. 632 White lumberyard. (Tex.App.—Dallas no 5.W.2d majority further declares insuffi- pet.). cient the evidence of “intent defraud.” I reread that encourage the reader to and, intangible excep- Intent with few opinion declaring portion majority of the tions, spoken from is inferred words “excep- “reasonable overhead” be an may done. inferred from acts Intent a tion” rather than “defense.” find no prohibited the performing the overt acts of case cited nor rationale offered would case, receipt present conduct—in logically one to that conclusion. lead money the trustee the subse- overhead is not an conclude that reasonable quent beneficiary failure to labor- does not la- exception because the statute upon by The “intent” cases relied ers. exception and bel overhead” “reasonable cases,3 distin- majority are theft which are “exceptions” in only there are two because because of the guishable from this offense code,6 penal the entire which indicates deception”4 language “by of the theft stat- place hesitancy legislature that states that the accused’s failure to ute “exception” on issue. It promising perform is in- label a defensive perform after State, price, Stuebgen resulted in a majority about the same and likewise 3. does cite v. appellant (Tex.Cr.App.1977), passing was confront- a case of mess. When S.W.2d 29 forged structural invoice, instrument, ap- impose plumber unpaid an ab- which does ed with an paid pellant’s intent response normal burden (not been "[I haven't] far, however). require- tracing, yet,” Thus although 100% of had received Stuebgen have not been extended be- ments of price. lie is evidence of fraud- the contract This yond particular offense. Phillips S.W.2d v. ulent intent. (Tex.Cr.App.1972), Golden v. (Ver- 31.01(2)(E) 4. TEX.PENAL CODE ANN. (Tex.Cr.App.1972). 1974). non 37.10(b), 38.04 §§ TEX.PEN.CODE ANN. See also "offense” was a remodel- 5. This extraneous (Vernon 1974). time, occurring ing job, same about majority is a credit to the to have arrived at imaginative

such an conclusion. LAPSLEY, Trustee, Brad N. et al., Appellants, fails, concurring opinion If else all has .

declared the statute unconstitutional. We presume

must a statute to be constitutional TATUM, Jr., Appellee. John C. way uphold it in a and construe its No. 05-82-01240-CV. constitutionality. Ely v. Texas, Appeals Court of (Tex.Cr.App.1979). That we are Dallas. by precedent defining not benefited “rea- sonable overhead” does not mean that we Jan. incapable understanding its mean- ing. nothing I unconstitutionally see

vague about the statute. we, professional

Sometimes fault-find-

ers, perfection look for when none exists. majority, opinion, in its has created

precedent impossible that makes it all but prosecute a case under article 5472e. believe,

One is majority led to from the

footnote, purpose of 5472e is “debt

collection”7 or a “shabby recourse for Thus,

workmanship.8 I feel that it is the

statute, case, not this that most offends the

majority. repeal would hold that a

article performed by 5472e would best be legislature, by judicial rather than

emasculation. majority opinion dissent from the

would, accordingly, affirm.

STEWART, J., joins opinion. in this view, my quote Judge "shabby workmanship," 7. This is a Chief Onion 8. The footnote tending as a circumstance by deception relevant to facts in a case that related theft complainant’s money did not use of intent in which there was no “other evidence put "quality” into the structure. To the con- knowledge.” overwhelming trary, evidence that the there was was an unfinished mess. structure

Case Details

Case Name: McElroy v. State

Court Name: Court of Appeals of Texas

Date Published: Jan 23, 1984

Citation: 667 S.W.2d 856

Docket Number: 05-83-00036-CR

Court Abbreviation: Tex. App.