Court Opinion

ID: 9674871
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:36:45.067965+00
Date Added: 2024-06-11T18:16:30.010228
License: Public Domain

AKIN, Justice,
concurring.
Although I concur in the judgment of the majority that the judgment of conviction should be reversed and a judgment of acquittal rendered, I cannot agree with the majority’s opinion because the majority fails to address the intent of the legislature in enacting TEX.REV.CIV.STAT.ANN. art. 5472e (Vernon Supp. 1982-1983) and because the majority opinion incorrectly con-eludes that overhead is an exception, rather than a defense, under the statute. Accordingly, I am compelled to state my views in this concurring opinion.
Neither the majority nor the dissenting opinion construes TEX.REV.CIV.STAT.ANN. art. 5472e (Vernon Supp. 1982-1983), which states:
Section 1. All moneys or funds paid to a contractor or subcontractor or any officer, director or agent thereof, under a construction contract for the improvement of specific real property in this state, and all funds borrowed by a contractor, subcontractor, owner, or any officer, director or agent thereof, for the purpose of improving such real property which are secured in whole or in part by a lien on the specific property to be improved are hereby declared to be Trust Funds for the benefit of the artisans, laborers, mechanics, contractors, subcontractors or materialmen who may labor or furnish labor or material for the construction or repair of any house, building or improvement whatever upon such real property; provided, however, that moneys paid to a contractor or subcontractor or borrowed by a contractor, subcontractor, or owner may be used to pay reasonable overhead of said contractor, subcontractor, or owner, directly related to such construction contract. The contractor, subcontractor, owner, or any officer, director or agent thereof, receiving such payments or funds, or having control or direction of same, is hereby made and constituted a Trustee of such funds so received or under his control or direction.
Sec. 2. Any Trustee, who shall, directly or indirectly, with intent to defraud, retain, use, disburse, misapply, or otherwise divert, any trust funds, or part thereof, as defined in Section 1 of this Act, without first fully paying and satisfying all obligations of the Trustee to all artisans, laborers, mechanics, contractors, subcontractors, or materialmen, in*866curred or to be incurred in connection with the construction and improvements, for which said funds were received, shall be deemed to have misapplied said Trust Funds. Misapplication of Trust Funds hereunder, under the value of $250, shall be punished by imprisonment in jail not exceeding two years and by fine not exceeding $500, or by such imprisonment without fine. Misapplication of Trust Funds hereunder, of the value of $250 or over shall be punished by confinement in the Department of Corrections for a period not exceeding ten years. [Emphasis added].
From the language of this statute a question exists with respect to whether the offense is committed when the defendant contractor diverts trust funds with intent to defraud the workmen or materialmen or whether an offense is committed when the contractor fails to pay workmen or materi-almen because the funds are insufficient, such as here, and where certain funds were previously diverted to purposes other than those specified in the statute, I would hold that the statute was violated when the contractor diverted any trust funds with intent to defraud either workmen or mate-rialmen, regardless of whether the contractor ultimately paid the workmen from other sources. Thus, when any funds are diverted for purposes other than paying workmen, materialmen or reasonable overhead, the statute is violated, if the diversion is with the intent to defraud. Consequently, the State had the burden to prove that each diversion of trust funds for purposes other than paying workmen and ma-terialmen was with the intent to defraud the workmen and materialmen.
Since under the language of the statute, the State must prove not only a diversion of funds, as the dissent seems to imply, but also must prove that the defendant diverted the funds with “an intent to defraud” the workmen and materialmen. Thus, the question presented is what did the legislature intend the phrase “intent to defraud” to mean within the ambit of article 5472e? With respect to the phrase “intent to defraud,” I have been unable to find any Texas case defining this term. Black’s Law Dictionary (381 rev. 5th ed. 1979) defines this phrase as follows:
Intent to defraud means an intention to deceive another person, and to induce such other person, in reliance upon such deception, to assume, create, transfer, alter or terminate a right, obligation or power with reference to property.
Thus, under this definition, which appears to be a correct one, the State must prove that the diversion of trust funds was done with the intent to deceive either workmen or materialmen so as to induce them to rely to their detriment upon the deception. In applying this definition of intent to defraud, there is no evidence to support a finding that the defendant had such an intent when funds were diverted.
I cannot accept the definition of “intent to defraud” as set forth in Justice Guillot’s dissenting opinion, where he defines “intent to defraud” to mean an “intent to impair the funds which must be kept for the benefit of the workers and suppliers.” Under Justice Guillot’s definition, intent to defraud becomes meaningless because any diversion of funds for any reason would impair the trust fund. In my view, the legislature’s intent to require something more than an impairment of the trust fund is shown by the language of section 3 of article 5472e which provides:
Sec. 3. Where Trust Funds are paid, misapplied, used, or otherwise diverted, in such a manner that such act constitutes a violation of this Act and some other offense punishable under the laws of the State of Texas, the party thus offending shall be amenable to prosecution at the state’s election for misapplication of trust funds under this Act or for such other offense as may have been committed by him. [Emphasis added].
From this language it is obvious that the legislature intended more than a mere diversion or “impairment” to constitute the offense specified in section 2 by the use of the language “in such a manner that such act constitutes a violation of this Act.” When the legislature used this phrase, it *867re-emphasized that the diversion must be committed with the intent to defraud.
Both the majority and dissenting opinions agree that circumstantial evidence must necessarily be resorted to so as to prove the intent to defraud which is the crux of the offense. I would hold that the State failed to prove that each diversion was done with the intent to defraud, which any rational trier of fact should require beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319 (N. 12), 99 S.Ct. 2781, 2789 (N. 12), 61 L.Ed.2d 560 (1974); see Wilson v. State, 654 S.W.2d 465, 471 (Tex.Cr.App.1983). For example, when the defendant deposited the first payment from the Coxes (the owners) into an account that was already overdrawn, the State had the burden to prove that this act was done with the intent to defraud the workmen on the job as well as the materialmen who furnished materials for the project. In this respect, the appellant may have thought at the time that he had enough funds from the contract to pay all workmen and mate-rialmen, apart from these funds. With respect to each diversion of trust funds, the State failed to prove that even one diversion was with the intent to defraud the workmen and the materialmen. The State alleged in the indictment that the offense occurred when the appellant issued insufficient fund checks to three of his workmen although the record is unclear as to whether these checks were issued for work on the Cox project or whether they were issued with respect to a subsequent job. The State’s proof also failed in this respect. Accordingly, I concur in the majority’s conclusion that the State failed to prove that the appellant diverted funds with intent to defraud with respect to each diversion.
Although I agree with the majority that the State failed to prove that the appellant diverted trust funds with the intent to defraud, I cannot agree with the majority that “reasonable overhead” is an exception, thus placing the burden on the State to negate “reasonable overhead” in the charging instrument and to prove beyond a reasonable doubt that the exception is inapplicable. Instead, I would hold that the “reasonable overhead” provision in the statute is a defense with the burden upon the defendant to adduce evidence with respect to his reasonable overhead. Even in this situation the State has the burden to prove that these “overhead” expenses were not related to the construction project and thus were justified as such.
TEX.PENAL CODE ANN. § 2.02 (Vernon 1974) defines “Exceptions” while § 2.03 defines a “Defense.” Section 2.02(a) and (c) provide:
(a) An exception to an offense in this code is so labeled by the phrase: “It is an exception to the application of....” [Emphasis Added]
(c) This section does not affect exceptions applicable to offenses enacted pri- or to the effective date of this code. [Emphasis Added]
Since TEX.REV.CIV.STAT.ANN. art. 5472e (Vernon Supp. 1982-1983) was enacted in 1967, effective August 28, 1967, and, since Article 5472e is not in the Texas Penal Code, the majority’s reliance upon these provisions to hold that overhead expenses are an exception, rather than a defense, is misplaced. Instead, by the precise language of section 2.02, the present question is not determined by that section. Thus, I would hold that Section 2.02 has no application to the present case.
TEX.PENAL CODE ANN. § 2.03(e) (Vernon 1974) does, however, pertain to Article 5472e. Subsection 2.03(e) provides: “A ground of defense in a penal law that is not plainly labeled in accordance with this chapter has the procedural and eviden-tiary consequence of a defense.” [Emphasis Added]. Because without question Article 5472e is a “penal law,” in the sense that a person may be deprived of his liberty for the violation of that statute, Subsection 2.03(e) is controlling as the dissenting opinion by Justice Guillot correctly notes. Goss v. State, 582 S.W.2d 782, 784 (Tex.Cr.App.1979); Broyles v. State, 552 S.W.2d 144, 147 (Tex.Cr.App.1977); Bocanegra v. State, 552 S.W.2d 130, 131-32 (Tex.Cr.App.1977). This is true because Article 5472e does not plainly label “reasonable overhead” as an exception. Accordingly, the *868burden to adduce evidence and to request appropriate jury instructions on reasonable overhead should be upon the defendant charged under this statute, rather than the State.
STEPHENS, J., joins in this opinion.