Chad Michael Hays v. State

In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
_________________________
No. 06-11-00124-CR
______________________________
CHAD MICHAEL HAYS, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 196th Judicial District Court
Hunt County, Texas
Trial Court No. 25586
Before Morriss, C.J., Carter and Moseley, JJ.
Memorandum Opinion by Chief Justice Morriss
MEMORANDUM OPINION
By selling interests in an oil well venture called the Honey Grove 1 Single Well Joint
Venture, largely through telephone calls placed to wealthy individuals, Mack Diamond Energy
(MDE), a company headquartered in Wolfe City, successfully raised some $2.5 million to drill
the oil well. The well was never drilled.
MDE was owned and operated by Mack Hays and his son, Chad Michael Hays, and
many of the sales efforts were handled by Chad.2 As a result,3 Chad was indicted for multiple
offenses under the Texas Securities Act in three separate cases. See TEX. REV. CIV. STAT. ANN.
art. 581-29(B), amended by Act of May 18, 2011, 82nd Leg., R.S., ch. 523, § 2, 2011 Tex. Sess.
Law Serv. 1298, 1299 (West 2011). In this case—trial court cause number 25586—Chad was
1
Honey Grove is in Fannin County, which is to the north of Hunt County, where Wolfe City is situated. This is
relevant to the venue issue in this appeal.
2
Chad‘s job with MDE was described as a PR person whose job was to ―cold call‖ individuals and see if they would
be interested in investing in an oil well. Several investor-clients testified they were contacted by Chad, asking them
to invest in MDE‘s oil well project. The company‘s practice was to only contact people with net worths of at least
$1 million. The record does not reveal how the potential investors or their wealth were identified. There was
testimony Chad was aggressive in his telephone inquiries.
3
There was evidence that a significant amount of money from the investors went to salaries, office equipment, and
building payments. An investigator for the Texas Securities Board testified that only $376,403.83 of more than $2.5
million raised went to expenses for the oil well such as performing and interpreting seismologist reports and
obtaining drill permits; the drilling permits, though, were not acquired until after the drilling rig was actually placed
on the well site; and the company did not have a bond with the state Railroad Commission. Significantly, MDE had
to renegotiate its contract with the drilling company that was to perform the actual drilling to lower the payments.
Even at the lower rates, MDE could not come up with enough money for the drilling to commence. At some point,
Mack and Chad, as well as at least one other person with MDE, began to offer shares in a second well, in an attempt
to secure enough funding for the first, unstarted, well. Don Dean, MDE‘s CFO, warned Mack and Chad not to
divert investments received for the second well to the first project. Of the investors who testified at trial, most of
them invested in 2007—after Dean had renegotiated the drilling contract in December 2006. The record is not clear
as to specifics of MDE‘s demise or the beginning of criminal allegations. Investor Dwight McGee contacted
Warsing in March 2008, sending Warsing some of the communications McGee had received from Chad. The
indictments were returned April 24, 2009.
2
charged in fourteen, and convicted in eight, counts under Article 581-29(B), for sale of
unregistered securities,4 and sentenced to ten years‘ confinement.
Chad‘s appeal primarily focuses on his claim that conviction of this offense requires
proof that he knew the interests he was selling were securities and that they were required to be
registered, but were not. He also challenges the sufficiency of the evidence as to certain
investors and as to the venue of the prosecution.
We affirm the trial court‘s judgment, because (1) no proof was required that Chad knew
the venture shares were securities or that they must be registered, (2) it was not error to instruct
the jury that the State need not prove Chad‘s knowledge that the shares were securities or that
they must be registered, (3) Chad‘s counsel was not ineffective in failing to request a jury
instruction on mistake of fact, (4) sufficient evidence connects Chad to sales to the four
challenged investors, and (5) venue was proper in Hunt County.
(1) No Proof Was Required that Chad Knew the Venture Shares Were Securities or that They
Must Be Registered
Chad claims the State was required to prove that (a) Chad knew the investment offerings
he was selling qualified as securities, and (b) he knew these stock offerings had to be registered
with the Texas Securities Board. At the time of the alleged offense, the statute under which
Chad was convicted says that any person who shall
Sell, offer for sale or delivery, solicit subscriptions to and orders for, dispose of,
invite orders for, or who shall deal in any other manner in any security or
4
In a second case—trial court cause number 25587, our case number 06-11-00125-CR—Chad was charged in
fourteen counts under Article 581-29(A), for sale of securities by an unregistered person. In a third case—trial court
cause number 25588, our case number 06-11-00126-CR—Chad was charged in a single count under Article 581-
29(C) for fraud in the sale of securities. Those two cases are disposed of by separate opinions issued this date.
3
securities issued after September 6, 1955, unless said security or securities have
been registered or granted a permit as provided in Section 7 of this Act, shall be
deemed guilty of a felony, and upon conviction thereof shall be sentenced to pay a
fine of not more than $5,000 or imprisonment in the penitentiary for not less than
two or more than 10 years, or by such fine and imprisonment.
TEX. REV. CIV. STAT. ANN. art. 581-29(B). Analyzing the State‘s burden under the
hypothetically correct jury charge,5 the State had to prove Chad (i) sold/offered for sale/invited
offers or dealt in any other manner; (ii) any security or securities; (iii) where said security or
securities were not properly registered with the State Securities Board Commissioner. TEX. REV.
CIV. STAT. ANN. art. 581-29(B); see also TEX. REV. CIV. STAT. ANN. arts. 581-2, 581-7 (West
2012). An interest in an oil well qualifies as a security. TEX. REV. CIV. STAT. ANN. art. 581-
4(A) (West 2012). As no mental state is expressed in the statute, it must be shown Chad acted
intentionally, knowingly, or recklessly. TEX. PENAL CODE ANN. § 6.02(c) (West 2011); see
Koah v. State, 604 S.W.2d 156, 160 (Tex. Crim. App. [Panel Op.] 1980) (because Article 581-29
expresses no culpable mental state, Section 6.02 of the Texas Penal Code applies). The State‘s
indictment alleged Chad committed the offenses knowingly, thus adopting that as the required
mental state.
Chad claims that he was held strictly liable for the charged offense and that the evidence
shows only that he sold ―something.‖ Chad argues that, in contrast, the State was required, and
failed, to prove Chad knew the venture shares were securities and had to be registered. Chad
5
Sufficiency of the evidence is measured by the hypothetically correct jury charge, which accurately sets out the law,
is authorized by the indictment, and does not unnecessarily increase the State‘s burden of proof. Malik v. State, 953
S.W.2d 234, 240 (Tex. Crim. App. 1997).
4
cites Hentzner v. State, 613 P.2d 821 (Alaska 1980), and People v. Salas, 127 P.3d 40 (Cal.
2006). We find these nonbinding cases distinguishable from the situation at hand.
In Hentzner, the State alleged the defendant sold investment contracts, which the State
urged qualified as securities under Alaska law. Hentzner raised money by promising to sell gold
at a fixed price per ounce, to be delivered several months after the sale. He told prospective
investors, or purchasers of the offered interests, he would use their money to actually do the
mining, then repay them with the gold at the (below market) promised prices. While mining,
Hentzner was served with a notice from the Alaska State Troopers to cease his mining activities.
Hentzner, 613 P.2d at 822–23. The Alaska high court determined that the regulation at issue
criminalized a malum prohibitum act, not one which was malum in se—in other words, it was
illegal just because of its legislative proscription, not because it was innately immoral. See
BLACK‘S LAW DICTIONARY 1045 (9th ed. 2009). Therefore, ―consciousness of wrongdoing
should be regarded as a separate element of the offense,‖6 absent some exception for public
welfare offenses, such as ―where the penalties are relatively small and the conviction does no
great damage to an offender‘s reputation.‖ Speidel v. State, 460 P.2d 77, 80 (Alaska 1969)
(invalidating felony offense of failing to timely return rental car, since statute required no
criminal intent on defendant‘s part). The Hentzner court, however, also based its holding not just
on its previous Speidel opinion, but on another opinion where it found that a defendant‘s
6
Hentzner, 613 P.2d at 826.
5
reasonable belief his rape victim was of the age of consent was an affirmative defense.
Hentzner, 613 P.2d at 826 (citing State v. Guest, 583 P.2d 836 (Alaska 1978)).7
In Salas, the California reviewing court found the trial court erred in its instruction to the
jury regarding the defendants‘ claim of good-faith belief they were selling securities, which were
exempt from registration. The Salas court found that a seller who reasonably and in good faith
believes that a security is exempt from the statutory requirement of registration is not guilty of
the crime of unlawful sale of an unregistered security. Salas, 127 P.3d at 41. However, guilty
knowledge was not an element of the crime, but lack thereof was an affirmative defense. Id. at
41–42 (―the severity of the penalties attached to this crime persuades us that the Legislature did
not mean to impose criminal liability on defendants who lacked guilty knowledge of facts
essential to make the conduct criminal‖).
Hentzner and Salas are not controlling for this Court and we do not find them persuasive.
While we do not conclude that the Securities Act creates strict liability, 8 several cases note that
the purpose of the statute is the protection of the public: ―The legislative intent clearly was to
impose criminal sanctions for almost any dealing in securities without a license.‖ Shappley, 520
7
Such a defense is not available in Texas. See Johnson v. State, 967 S.W.2d 848, 849 (Tex. Crim. App. 1998);
Vasquez v. State, 622 S.W.2d 864, 866 (Tex. Crim. App. [Panel Op.] 1981); Byrne v. State, 358 S.W.3d 745, 747
(Tex. App.—San Antonio 2011, no pet.).
8
However, see Shappley v. State, 520 S.W.2d 766, 769 (Tex. Crim. App. 1974) (―As long as the bonds are
unregistered, strict liability is imposed regardless of how many securities are involved.‖).
6
S.W.2d at 768; see also Bridwell v. State, 804 S.W.2d 900, 906 (Tex. Crim. App. 1991); see
generally Kadane v. Clark, 143 S.W.2d 197 (Tex. 1940).9
Closer to home, Hays cites L.B. Foster Co. v. State, 106 S.W.3d 194 (Tex. App.—
Houston [1st Dist.] 2003, pet. ref‘d). There, the defendant was convicted of illegally disposing
of used motor oil in violation of the Texas Water Code. Chad directs us to the appellate court‘s
statement:
The used oil offense involved here requires two separate, culpable mental states.
The first is that the actor knowingly disposed of used oil. TEX. WATER CODE
ANN. § 7.176(a)(2). The second is that the actor knew the object of the disposal is
―used oil.‖ With regard to the conduct elements, to commit the offense of illegal
disposal of used oil, a person must act knowingly with respect to both the nature
of his conduct (i.e., the disposal) and the circumstances surrounding his conduct
(i.e., that what he is disposing of was used oil).
Id. at 212. Chad claims this language supports his argument that, here, the State was required to
prove Chad knew the interests he was selling were securities and that he knew he was not a
registered agent or dealer of securities. At issue in Foster was the defense‘s complaint that the
trial court‘s charge did not require the jury to find the required mental state as to the nature of the
company‘s conduct, but rather allowed the jury to find that the crime was committed if the jury
found Foster had the requisite mental state regarding the circumstances surrounding the conduct.
Foster does not support Chad‘s argument. The court there did say, as quoted by Chad,
that the Texas Water Code statute at issue in that case requires knowledge of the disposal and of
9
The State cites us to a Kentucky case, Commonwealth v. Allen, 441 S.W.2d 424 (Ky. 1969), where the court
considered the appellant‘s contention that the proof was required to show he knew he was selling unregistered
securities. ―[I]t is immaterial that he had no actual knowledge, as he was presumed to have and is chargeable with
knowledge of the laws under which he was undertaking to do business.‖ Id. at 427. Citing the ―universal‖ rule of
law that all persons are charged with knowledge of the law, the court found Allen could be convicted of willfully
selling unregistered securities. Id.
7
the circumstances—that is, used oil was disposed of. But the complaint at issue in Foster was
the jury charge: Foster wanted a more detailed recitation of what had to be proved. The
reviewing court found no abuse of discretion in the trial court‘s refusal of the requested charge.
The trial court‘s charge instructed the Foster jury to find the defendant company guilty if the jury
found the defendant did unlawfully and knowingly dispose of used oil on land. According to the
appellate court, in the application paragraph ―knowingly‖ ―directly modifie[d] the phrase
‗disposes of.‘‖ Id. at 213. Chad relies on Foster‘s holding that the Texas Water Code offense
required a culpable mental state as to the disposal and the condition of the oil—or as to the
nature of the conduct and the circumstances around the conduct. We do not find the statute at
issue in this case requires a culpable mental state as to the circumstances of the offense.
Section 6.03 of the Texas Penal Code sets out three ―conduct elements‖ that may be
involved in an offense: (1) the nature of the conduct; (2) the result of the conduct; and (3) the
circumstances surrounding the conduct. TEX. PENAL CODE ANN. § 6.03; McQueen v. State, 781
S.W.2d 600, 603 (Tex. Crim. App. 1989); Lugo-Lugo v. State, 650 S.W.2d 72, 74 (Tex. Crim.
App. 1983). Where specific acts are criminalized because of their very nature, a culpable mental
state must apply to committing the act itself. See, e.g., TEX. PENAL CODE ANN. § 47.02 (West
2011) (gambling offenses). Conduct which is criminalized because of its result requires
culpability as to that result. Kelly v. State, 748 S.W.2d 236 (Tex. Crim. App. 1988) (injury to
elderly individual); Alvarado, 704 S.W.2d 36, 39 (Tex. Crim. App. 1985) (injury to child);
Lugo–Lugo, 650 S.W.2d at 81 (murder). Where otherwise innocent behavior becomes criminal
because of the circumstances under which it is done, a culpable mental state is required as to
8
those surrounding circumstances. McClain v. State, 687 S.W.2d 350 (Tex. Crim. App. 1985)
(theft). An offense may require knowledge both as to the nature of the conduct and the
circumstances around the conduct. McQueen, 781 S.W.2d at 604 (unauthorized use of motor
vehicle).
We find that the crime of sale of unregistered securities is a nature-of-conduct offense,
akin to gambling or indecency with a child. Here, the nature of the conduct itself is criminal, as
contrasted with achieving a certain result.10 We reach this conclusion partially because the
purpose of the Securities Act is the protection of the public.
The Securities Act was ―enacted solely to protect the interests of the public,‖ who had
been ―notoriously imposed upon, and ofttimes people were defrauded out of their life‘s savings‖
by unscrupulous parties selling worthless securities in the oil business. Kadane, 143 S.W.2d at
199; see Shappley, 520 S.W.2d at 768 (―The legislative intent clearly was to impose criminal
sanctions for almost any dealing in securities without a license.‖); Bridwell, 804 S.W.2d at 906.
Hays cannot hide behind claimed ignorance of the requirement that securities must be registered.
See TEX. PENAL CODE ANN. § 8.03 (West 2011); Crain v. State, 153 S.W. 155 (1913)
(―Ignorance of the law excuses no one.‖).
10
Having said this, we point out a sister court found a Securities Act violation ―is not a ‗nature of the conduct‘
offense.‖ Cook v. State, 824 S.W.2d 634, 638 (Tex. App.—Dallas 1991), pet. ref’d, 828 S.W.2d 11 (Tex. Crim.
App. 1992). The Cook court, though, was addressing a Securities Act violation alleging fraud: ―Selling securities
under certain circumstances, i.e. by fraudulent means, is forbidden. Thus, a violation of the Securities Act is an
offense dealing with the ‗circumstances surrounding the conduct,‘ and the culpable mental state of ‗knowingly‘ must
apply to those surrounding circumstances.‖ Id. at 638–39 (citing McQueen, 781 S.W.2d at 603). We address
Chad‘s conviction for fraud in connection with the sale or offer of sale of securities in our opinion in cause number
06-11-00126-CR.
9
We find helpful Tovar v. State, 978 S.W.2d 584 (Tex. Crim. App. 1998). The Texas
Court of Criminal Appeals upheld Tovar‘s convictions for violating the Open Meetings Act.11
Where the defendant claimed the State had to prove the defendant knew a closed meeting was
prohibited under the law, the Texas Court of Criminal Appeals found the language of the
statute—defining the offense as a member of a governmental body calling, aiding in calling, or
organizing a closed meeting, and providing no exceptions—required a culpable mental state only
as to the calling, aiding in calling, or participating in the meeting, not as to the fact that the
closed meeting was not permitted. Id. at 587. Likewise, the law at issue here criminalizes
selling a security which is unregistered. The statute does not include a culpable mental state, so
one is ascribed by Section 6.02(b) of the Texas Penal Code. In the instance of the statute‘s
prohibition of selling unregistered securities, it is the nature of the conduct which is
criminalized.12 The State‘s indictment and the trial court‘s charge alleged Chad knowingly
offered for sale unregistered securities.13
The State had to prove Chad knew he was selling venture interests in an oil well prospect;
the State did not have to prove Chad had knowledge of the statute‘s defining them as securities
or the requirement that those securities be registered. There was evidence the interests in the oil
11
See TEX. GOV‘T CODE ANN. § 551.144 (West 2004).
12
Cf. Cook, 824 S.W.2d 634 (violation of Securities Act by fraud is circumstances-of-conduct offense).
13
Chad tries to distinguish Tovar by characterizing that case as involving a mistake of law defense, but we do not
read either the Texas Court of Criminal Appeals‘ or lower court‘s opinion to indicate Tovar urged a mistake of law
defense, which is not allowed in Texas. We find no distinction in Chad‘s assertion that he was not aware of the
―circumstance‖ of his alleged crime (i.e., that the securities had to be registered) and Tovar‘s claim that proof was
required he knew his closed meeting was not permitted.
10
wells Chad was selling were securities. Even if Chad were not charged with knowledge of the
statute‘s definition of ―security,‖14 there was evidence he could be found to have knowledge that
the interests in the wells constituted ―securities‖ in the common meaning of the word. The
dictionary definition of ―security‖ includes ―an instrument of investing in the form of a document
(as a stock certificate or bond) providing evidence of its ownership.‖ MERRIAM-WEBSTER‘S
COLLEGIATE DICTIONARY 1123 (11th ed. 2006).
Among the State‘s exhibits at trial were documents provided to investors by MDE, which
included application agreements, including language indicating the investor is contributing a
dollar amount as ―initial capitalization.‖ The documents also recite that the investor is able to
―bear the economic risk‖ of his or her contribution and that the contribution is in exchange for a
specified percentage of the oil exploration. One of these documents included a note signed by
―Chad Hays.‖ There are also letters on MDE letterhead, signed by Mack, acting as receipts for
the parties‘ ―investment.‖ These exhibits, and the testimony from several witnesses that Chad
was an integral part of the sales operation of the company are evidence the interests in the well
were securities, and the jury could find Chad knew he was selling securities, even if that were
required. As for the unregistered nature of the securities, there is no requirement Chad had to
know the statute required the securities be registered with the appropriate Texas agency. Rather,
Chad had only to possess the mental state of ―knowingly‖ as it related to the nature of his
conduct, i.e., selling the interests. Joseph Oman, Assistant Director of Enforcement for the
Texas Securities Board, testified there was no record of any security offered by MDE being
14
See TEX. REV. CIV. STAT. ANN. art. 581-4(A).
11
registered with the Board. The State admitted into evidence a certificate from the Texas State
Securities Board stating that no securities issued by MDE were registered, and no permit had
been granted for any such securities. Oman also testified that the interests in the oil wells
constituted securities and that, to be liable under the statute, one merely had to be aware one was
selling an investment.
We find the statute prohibited the knowing sale of investments that happen to be
unregistered securities; and there was sufficient evidence Chad knowingly engaged in the
prohibited conduct. This point of error is overruled.
(2) It Was Not Error to Instruct the Jury that the State Need Not Prove Chad’s Knowledge
that the Shares Were Securities or that They Must Be Registered
Chad also complains the trial court erred in overruling Chad‘s objection to an instruction
in the charge that the State was not required to prove Chad knew the interests he offered to
potential investors were securities; and the State was not required to prove Chad knew such
securities had to be registered with the Texas Securities Board. Chad alleges this error in the
beginning of his appellate argument on the issue of proof of culpability, discussed above. He
offers no specific legal authority or argument why the trial court‘s jury instruction was error.15
15
If a point of error is inadequately briefed, we will not address it. Vuong v. State, 830 S.W.2d 929 (Tex. Crim. App.
1992). We will not brief a defendant‘s case for him or her. Heiselbetz v. State, 906 S.W.2d 500, 512 (Tex. Crim.
App. 1995). However, based on the discussion of point of error one, we overrule Chad‘s second point.
12
For the reasons in the preceding section, we find no error in the instruction.16 Finding no error in
the charge, we overrule this issue.
(3) Chad’s Counsel Was Not Ineffective in Failing to Request a Jury Instruction on Mistake
of Fact
Chad claims his trial counsel should have asked for a jury instruction on mistake of fact,
and asserts that failure to request such an instruction was ineffective assistance of counsel.17
There is nothing in the appellate record reflecting a motion for new trial or that any effort was
made to produce a record revealing trial counsel‘s strategy or reasons for his actions or inactions.
Direct appeal is usually an inadequate vehicle for raising a claim that trial counsel was
ineffective, because the record is generally undeveloped for this purpose. See Freeman v. State,
125 S.W.3d 505, 506 (Tex. Crim. App. 2003); Fuller v. State, 224 S.W.3d 823, 828–29 (Tex.
App.—Texarkana 2007, no pet.). When reviewing alleged deficient performance of counsel,
counsel‘s conduct is reviewed with great deference, without the distorting effects of hindsight,
where the record is silent as to counsel‘s reasons for failing to do something. Thompson, 9
S.W.3d at 813. Usually, the trial attorney should be given the opportunity to explain the
representation at trial, before a court finds that he or she rendered ineffective assistance.
Rylander v. State, 101 S.W.3d 107, 111 (Tex. Crim. App. 2003); Fox v. State, 175 S.W.3d 475,
16
If no error is present in the jury charge, there is no need to conduct an analysis under Almanza v. State, 686 S.W.2d
157 (Tex. Crim. App. 1985) (op. on reh‘g). See Taylor v. State, 332 S.W.3d 483, 489 n.12 (Tex. Crim. App. 2011);
Posey v. State, 966 S.W.2d 57, 60 (Tex. Crim. App. 1998).
17
To succeed on a claim of ineffective assistance of counsel, an appellant must establish that counsel rendered
constitutionally deficient performance, and the appellant was prejudiced by such deficiency. See Strickland v.
Washington, 466 U.S. 668, 689 (1984); Thompson v. State, 9 S.W.3d 808, 812 (Tex. Crim. App. 1999). The record
must affirmatively demonstrate the alleged ineffectiveness. Bone v. State, 77 S.W.3d 828, 835 (Tex. Crim. App.
2002). Failure to satisfy either part of the Strickland test is fatal. Ex parte Martinez, 195 S.W.3d 713, 730 (Tex.
Crim. App. 2006).
13
485 (Tex. App.—Texarkana 2005, pet. ref‘d). There is a strong presumption that counsel‘s
conduct falls within the wide range of reasonable, professional assistance, motivated by sound
trial strategy. See Jackson v. State, 877 S.W.2d 768, 771 (Tex. Crim. App. 1994). The
defendant must rebut that presumption. Id. If the record is silent as to an attorney‘s particular
course of action, we ordinarily must find that the defendant did not rebut the presumption.
Thompson, 9 S.W.3d at 814. We find nothing in the record indicating a motion for new trial was
filed or that Chad took any steps to memorialize trial counsel‘s strategies or reason for his trial
decisions.
Chad‘s appellate argument is that his trial counsel should have requested a jury
instruction on mistake of fact, where the purported mistake of fact was that Chad mistakenly
thought the interests he was offering for sale were not required to be registered. Even if Chad
were unaware of the requirement that securities offered for sale be registered with the Texas
Securities Board, this would not change his mental state of knowingly offering for sale the
venture interests. To qualify for a mistake-of-fact defense under Section 8.02(a) of the Texas
Penal Code, the mistaken belief must ―negate[] the kind of culpability required for the
commission of the offense.‖ TEX. PENAL CODE ANN. § 8.02(a) (West 2011). Cf. Celis v. State,
354 S.W.3d 7, 29 (Tex. App.—Corpus Christi 2011, pet. granted) (defendant‘s alleged belief he
was licensed to practice law in Mexico did not negate culpable mental state for unlawful practice
of law); Ingram v. State, 261 S.W.3d 749, 753 (Tex. App.—Tyler 2008, no pet.) (belief that
structure was abandoned not triggering mistake-of-fact instruction regarding structure as a
habitation). Because we have found the crime of sale of unregistered securities is a nature-of-
14
conduct offense, any mistake of fact as to the ―non-exempt‖ status of those securities, as Chad
puts it in his brief, would be relevant to the circumstances of the conduct, which did not require a
mental state. See Gardner v. State, 780 S.W.2d 259, 263 (Tex. Crim. App. 1989) (―A mistake of
fact defense goes not to the ‗act,‘ but, instead, to the attendant circumstances.‖) (addressing
unauthorized use of motor vehicle allegation).
As discussed above, there was evidence that Chad knowingly offered the interests to
various potential investors. There was evidence the interests were investments. There is no
claimed mistake as to the investment nature of the venture interests, or that Chad did not know
what he was selling, just that he was mistaken as to their nature as a security or their registration
status. That does not trigger a mistake-of-fact instruction. Any alleged mistake of fact on
Chad‘s part would not negate the culpability required of the charged offense. As Chad was not
entitled to a mistake-of-fact instruction, trial counsel was not ineffective for not requesting such
an instruction.
(4) Sufficient Evidence Connects Chad to Sales to the Four Challenged Investors
Chad further claims that there was insufficient evidence to prove the transactions with
four of the named investors. The indictment charged fourteen counts, each alleging Chad offered
for sale and sold an unregistered security to different individuals. On appeal, Chad argues that
Morris Cates, Dwight McGee, Mike Brown, and Susan DeJong, four of the investors alleged in
the indictment and all of whom made investments in MDE‘s oil well plan, testified they spoke to
Chad or someone representing himself to be Chad, only on the telephone. Chad claims there is
no other evidence proving the person on the telephone with these investors was actually Chad,
15
and thus, there is insufficient evidence to connect him to the sales of securities to those four
parties. We disagree.
There was additional evidence linking Chad to the sales calls, beyond the mere
identification of a caller named ―Chad Hays.‖ Documentary evidence designates Chad as an
officer for MDE and connects Chad to MDE‘s Honey Grove venture for which the caller named
―Chad‖ was soliciting investors. The well venture is noted as being located in Fannin County.
Chad was identified in open court. It was noted that Chad made the solicitation calls. Sufficient
evidence connected Chad to these charges.
Chad claims in his brief that the testimony of the investors was hearsay, but most of his
briefing complains of the lack of evidence to prove that the person to whom the witnesses spoke
was indeed Chad. However, he lodged no authentication challenge to the witnesses‘
identification of Chad as the person who called them and offered to sell them interests in the oil
wells. See TEX. R. EVID. 901. Failure to object to evidence results in admission of that evidence
for all purposes. See Hammock v. State, 46 S.W.3d 889, 895 (Tex. Crim. App. 2001) (evidence
admitted without limiting instruction is in for all purposes and requires no limiting instruction).18
This point of error is overruled.
18
See also TEX. R. EVID. 802 (―Inadmissible hearsay admitted without objection shall not be denied probative value
merely because it is hearsay.‖); Poindexter v. State, 153 S.W.3d 402, 406 (Tex. Crim. App. 2005) (―[O]nce the trier
of fact has weighed the probative value of unobjected-to hearsay evidence in its factfinding process, an appellate
court cannot deny that evidence probative value or ignore it in its review of the sufficiency of the evidence.‖);
Hankey v. State, 231 S.W.3d 54, 58 (Tex. App.—Texarkana 2007, no pet.) (failure to object to hearsay testimony
rendered testimony admissible for all purposes).
16
(5) Venue Was Proper in Hunt County
Chad finally contends that there is insufficient evidence in the record to establish proper
venue in Hunt County. If no specific venue provision is stated, offenses are properly prosecuted
in the county where the offense was committed. TEX. CODE CRIM. PROC. ANN. art. 13.18 (West
2005). Venue is not an element of the offense and need be proved by only a preponderance of
the evidence, not beyond a reasonable doubt. See TEX. CODE CRIM. PROC. ANN. art. 13.17 (West
2005); Murphy v. State, 112 S.W.3d 592, 604 (Tex. Crim. App. 2003). Absent affirmative
record evidence showing the contrary, we presume venue to have been proper in the trial court.
TEX. R. APP. P. 44.2(c)(1); see also State v. Blankenship, 170 S.W.3d 676, 681 (Tex. App.—
Austin 2005, pet. ref‘d) (presume venue proven unless disputed at trial or record affirmatively
negates venue). In the absence of any record evidence that the offenses were not committed in
Hunt County, the presumption prevails establishing Hunt County as the venue.
Several witnesses testified MDE‘s office was in Wolfe City. Further, the application
agreements presented by MDE to the investors stated the agreement was performable in Wolfe
City, Hunt County, Texas, and any disputes or controversies are to be litigated in the courts in
Hunt County. Morris Cates visited Chad and other members of the company in their office in
Wolfe City; so did David Harper‘s son. There was sufficient evidence to establish venue.
Because venue was proper in Hunt County, we overrule the final point of error.
17
We affirm the trial court‘s judgment.
Josh R. Morriss, III
Chief Justice
Date Submitted: April 3, 2012
Date Decided: June 11, 2012
Do Not Publish
18