Opinion ID: 1675388
Heading Depth: 1
Heading Rank: 5

Heading: definiteness of the exemptive provision

Text: During oral argument in this case, counsel for defendants raised the issue of due process notice requirements of a criminal statute. It is contended that even if we hold that these instruments were not exempted from the registration requirements of the Uniform Securities Act as commercial paper, it would be a denial of due process to impose this interpretation retroactively and sustain defendants' conviction. Defendants argue that the record in this case provides evidence that even those charged with the enforcement of the state's securities law were of the view that if these instruments fit within the Uniform Commercial Code concept of commercial paper, they would be exempt from registration. There is support for that contention in the record of Mr. Hueni's testimony. Because these instruments fit within an acceptable definition of commercial paper, it is contended that the defendants were free to rely on such a definition unless the statutory language clearly indicated otherwise. The constitutional requirement of definiteness is violated by a criminal statute that fails to give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden by the statute. The underlying principle is that no man shall be held criminally responsible for conduct which he could not reasonably understand to be proscribed. United States v Harriss, 347 US 612, 617; 74 S Ct 808; 98 L Ed 989 (1954). A criminal statute must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties. Connally v General Construction Co, 269 US 385, 391; 46 S Ct 126; 70 L Ed 322 (1926). No one may be required at peril of life, liberty or property to speculate as to the meaning of penal statutes. Lanzetta v New Jersey, 306 US 451, 453; 59 S Ct 618; 83 L Ed 888 (1939). [A]mbiguity concerning the ambit of criminal statutes should be resolved in favor of lenity. Rewis v United States, 401 US 808, 812; 91 S Ct 1056; 28 L Ed 2d 493 (1971). Exemptions and provisos within a criminal statute must be defined with the same specificity as the prohibitive language of the statute. Cline v Frink Dairy Co, 274 US 445; 47 S Ct 681; 71 L Ed 1146 (1927). This court is not able, within the bounds of due process, to interpret a criminal statute which contains an ambiguous exemption such that it results in conviction of the defendant charged in the specific case. That is not the fair warning demanded by the Constitution. It is true that interpretations of statutory provisions by a court may add a clarifying gloss to otherwise unclear words, and thereby provide constructive notice to future defendants, but an unforeseeable judicial enlargement of a criminal statute, applied retroactively, operates precisely like an ex post facto law    and    the effect is to deprive [the defendant] of due process of law in the sense of fair warning that his contemplated conduct constitutes a crime. Bouie v City of Columbia, 378 US 347, 353, 355; 84 S Ct 1697; 12 L Ed 2d 894 (1964). While we are persuaded, therefore, that the clarifying gloss we have placed upon the commercial paper exemption in this opinion is correct when the purpose of the Uniform Securities Act is thoroughly considered, we are also persuaded that the term commercial paper standing by itself was not sufficiently definite to allow this conviction to stand. The objection of vagueness is twofold: inadequate guidance to the individual whose conduct is regulated, and inadequate guidance to the triers of fact. The former objection could not be cured retrospectively by a ruling either of the trial court or the appellate court, though it might be cured for the future by an authoritative judicial gloss. Freund, The Supreme Court and Civil Liberties, 4 Vand L Rev 533, 541 (1951). (Emphasis added.) The fact that the instrument involved in this case was not of the type intended to be exempted from the Act's registration provisions does not allow a different result in this case. There is no doubt that if this instrument had read payable to the order of Gerald N. Schultz, it would be a negotiable promissory note. Section 402(a)(9) exempts negotiable promissory notes from the Act's registration provisions. Thus, it would appear that Mrs. Dempster could not be convicted for failure to register the instrument. This would be the case despite the fact that this negotiable promissory note would certainly not be of the type intended to be exempted from the Act's registration provisions. It would be no more prime quality paper of a type not ordinarily purchased by the general public    than the instrument involved in the present case. Without a prior clarifying gloss or a clear definition of the special kind of negotiable promissory note intended to be exempted under the statute, or perhaps some form of prior actual notice that the instruments are not of the type exempted from registration, [11] a conviction could not stand for failure to register such a negotiable note. To determine that a case is within the intention of a statute, its language must authorize us to say so. It would be dangerous, indeed, to carry the principle, that a case which is within the reason or mischief of a statute, is within its provisions, so far as to punish a crime not enumerated in the statute, because it is of equal atrocity, or of kindred character, with those which are enumerated. United States v Wiltberger, 18 US (5 Wheat) 76, 96; 5 L Ed 37 (1820). Thus, while the construction we have placed on the commercial paper exemption is valid for the future, it may not be applied retroactively, any more than a legislative enactment may be, to impose criminal penalties for conduct committed at a time when it was not fairly stated to be criminal. Bouie v City of Columbia, supra, 362. See also, Douglas v Buder, 412 US 430; 93 S Ct 2199; 37 L Ed 2d 52 (1973). As we recently said in People v Bloss, 394 Mich 79, 81; 228 NW2d 384 (1975): We are persuaded that defendant's conviction cannot stand for the reason that at the time he did the act complained of this Court had not construed the    statute    to proscribe such conduct.