Opinion ID: 2609751
Heading Depth: 1
Heading Rank: 2

Heading: individual liability of stock

Text: Stock contends that the evidence was insufficient to support the jury verdict as to his individual liability. Stock was the president of Stock & Grove, Inc. which owned and operated the Sprucewood Trailer Court. Both parties cite City of Cincinnati v. Duval [36] as setting forth the applicable standards for determination of individual criminal liability of a corporate officer. In that case, Duval was president of a corporation which owned a cafe. He took no part in the operation of the cafe, day-to-day management being entirely in the hands of a manager. Duval was accused of violating Cincinnati's anti-noise ordinance due to loud noise emanating from the cafe on a night when he was away in New York. The court discussed the liability of a corporate officer stating: The fact that a person is an officer or agent of a corporation does not, of itself, impose criminal liability upon him for the violation of a criminal statute by the corporation... . [B]efore a corporate officer can be guilty of the violation of a penal statute, it must appear that he was either actively engaged in the performance or direction of the act complained of, or that he knew of the violation or proposed violation of the law, and that although he had the authority to prevent its occurrence or continuance he failed to do so.... [37] Because there was no evidence that Duval knew of the likelihood of a violation of the ordinance, nor evidence of a course of conduct in violation of the statute, and since Duval was away at the time of the offense, it could not be said that he actively participated in the prohibited conduct. Accordingly, the judgment of conviction was reversed. The court in Stock's case instructed the jury in part as follows: If you find that the defendant acted in his capacity as President of Stock & Grove, Inc., you may not find him guilty unless you determine he commanded, directed or consented to the prohibited act [Instruction 12]. If you find the defendant acted personally, in his own behalf or on behalf of another person or entity and knowingly ordered or performed the prohibited acts, you must find him guilty [Instruction 13]. No objection was taken to those instructions, and Stock does not contend that they incorrectly stated the law. [38] He argues that there was no evidence to sustain his conviction. We have stated the standard of review of a finding of guilty in a criminal case as follows: [T]he evidence and the inferences to be drawn therefrom are to be viewed in a light most favorable to the state. The question, then, is whether the finding of guilt is supported by substantial evidence, that is, such relevant evidence which is adequate to support a conclusion by a reasonable mind that there was no reasonable doubt as to appellant's guilt. [39] The jury was charged to convict Stock only if the state had demonstrated that he commanded, directed or consented to the prohibited act. The state does not contend that the facts demonstrated a command or direction. Thus the test for sufficiency must be based upon consent. Though somewhat ambiguous, consent necessarily implies both knowledge of the illegality and affirmative agreement to it. Thus the test is slightly more favorable to Stock than the Duval rule which may be satisfied by pure inaction in the face of knowledge. The evidence was undisputed that Stock was principal stockholder and president of Stock & Grove, Inc., and thus had authority to act on its behalf. He was living in the trailer park at the time of the violation. His letter to the department explaining efforts to correct the condition indicated his knowledge of its existence and his authority to take steps to alleviate it. Although Stock did not participate in the daily affairs of the trailer court, he did have the authority to supervise the manager and his letters indicate that he took an active part in the matter in question. There might be some question as to Stock's ability to abate the condition were it not for the fact that it became worse with the passage of time. On July 13, 1972, the ditch into Duck Creek was closed. On July 27, the date on which the violation was charged, the ditch had been dug open. Since Stock, well aware of the problem and admittedly taking steps towards correction of it, was living at the trailer court at the time, the reasonable inference is that he had knowledge of the reopening of the ditch permitting pollution of Duck Creek and consented to the condition. There was sufficient evidence and inferences therefrom to support a conclusion by a reasonable mind that there was no reasonable doubt that Stock consented to the violation, in the sense that he had the power and authority to abate the nuisance, but permitted it to worsen.