{ "id": 3078066, "name": "THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. DALE M. CARTER, Defendant-Appellant", "name_abbreviation": "People v. Carter", "decision_date": "1981-11-20", "docket_number": "No. 80-1851", "first_page": "796", "last_page": "804", "citations": [ { "type": "official", "cite": "102 Ill. App. 3d 796" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "283 N.E.2d 681", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "51 Ill. 2d 525", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5392199 ], "weight": 2, "pin_cites": [ { "page": "529" }, { "page": "529" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/51/0525-01" ] }, { "cite": "236 N.E.2d 698", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "39 Ill. 2d 531", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2856713 ], "pin_cites": [ { "page": "540" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/39/0531-01" ] }, { "cite": "216 N.E.2d 795", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "34 Ill. 2d 552", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2877831 ], "pin_cites": [ { "page": "555" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/34/0552-01" ] } ], "analysis": { "cardinality": 724, "char_count": 18349, "ocr_confidence": 0.917, "pagerank": { "raw": 1.1154948996168042e-07, "percentile": 0.5721103817249578 }, "sha256": "785ef54496684ee0a66dec8b32440d1ed2efe3192f4811822bf8a265d42867ce", "simhash": "1:3fa1885c4c14da47", "word_count": 2970 }, "last_updated": "2023-07-14T17:07:42.734695+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. DALE M. CARTER, Defendant-Appellant." ], "opinions": [ { "text": "JUSTICE LORENZ\ndelivered the opinion of the court:\nDefendant was sentenced to three years imprisonment after he was tried by jury and convicted of four counts of violating the Franchise Disclosure Act (hereinafter F.D.A.) (Ill. Rev. Stat. 1979, ch. 121*2, par. 701 et seq.). Several questions are presented for review, but we find that this appeal must be resolved based upon our consideration of two fundamental issues: (1) whether counts 1, 2 and 4 are void because the statutory provisions upon which they are based delegate legislative authority without providing an intelligible statutory guideline as a limitation on the exercise of the delegated power; and (2) whether the evidence is sufficient to prove defendant guilty of count 3 beyond a reasonable doubt.\nWe reverse. The following facts are material to our decision.\nDefendant was chairman of the board and shareholder in Pie Tree, Inc., a Pennsylvania corporation which was in the business of selling franchises for Pie Tree restaurants and bakeries. In February of 1978, Pie Tree\u2019s attorney, Elmer S. Beatty, Jr., sent an application to the Illinois Attorney General\u2019s Office to register the corporation under the Franchise Disclosure Act. This application was received on March 2, 1978.\nSection 16 of the F.D.A. (Ill. Rev. Stat. 1979, ch. 121*2, par. 716) provides that a registration becomes effective 20 business days after receipt of the application, unless, within the 20-day review period, the Attorney General either denies the application outright or notifies \u201cthe franchisor or its representative that the materials filed do not meet the requirements of [the] Act.\u201d\nOn March 8, 1978, the Attorney General sent notice that Pie Tree\u2019s application was unacceptable and that the 20-day review period would be tolled until Pie Tree submitted additional material. One of the 15 items specified in the \u201cstop letter\u201d was a requirement that Pie Tree submit an agreement which provided for the escrow of monies paid to Pie Tree by franchise purchasers.\nThe \u201cstop letter\u201d was sent to Beatty at his law office in Pittsburgh, Pennsylvania. The return receipt was signed by a \u201cDiana Roll,\u201d \u201cRoth,\u201d or \u201cRath.\u201d However, there is no direct evidence that Beatty received the letter or that he discussed with defendant any of the items requested by the Attorney General.\nIn June of 1978, defendant negotiated the sale of a Pie Tree franchise to Roger Collier for $45,000. This agreement authorized Collier to operate a Pie Tree restaurant in Illinois and obligated Pie Tree to provide Collier with a fully equipped restaurant.\nAlthough Collier paid $43,000 to Pie Tree, the money was not placed in escrow, and before Collier received the promised restaurant, Pie Tree went bankrupt.\nCount 1 accused defendant of failing to comply with the requirements of sections 4(1) and 16 of the F.D.A (Ill. Rev. Stat. 1979, ch. 121*2, pars. 704(1), 716) by selling a franchise in Illinois without first having registered as a franchisor. Count 2 accused defendant of failing to comply with the requirements of section 4(2) (Ill. Rev. Stat. 1979, ch. 121*2, par. 704(2)) by selling a franchise in Illinois without providing a disclosure statement to the purchaser. And count 4 accused defendant of failing to comply with the requirements of section 16.1 (Ill. Rev. Stat. 1979, ch. 121?2, par. 716.1) by selling a franchise in Illinois without first having registered each salesperson who represented the franchisor in this State.\nCount 3 accused defendant of \u201cengaging in an act, practice or course of business which acted as a fraud and deceipt [sic] upon Roger Collier, in violation of [F.D.A., \u00a76(1) (c)] to wit: failing to place the franchise fee paid by Roger Collier in an escrow account as required by the Illinois Attorney General\u2019s Office.\u201d\nSection 20, the crime-defining provision of the F.D.A. (Ill. Rev. Stat. 1979, ch. 121)2, par. 720), makes it a Class 4 felony to sell a franchise in Illinois without complying with sections 4, 6, 16 and 16.1 (Ill. Rev. Stat. 1979, ch. 121M, pars. 704, 706,716, 716.1). Even though section 20 creates a criminal law which is uniformly applicable to franchise sellers, section 12 of the F.D.A. (Ill. Rev. Stat. 1979, ch. 121)2, par. 712) authorizes the Attorney General to grant individual exemptions from sections 4 and 16, the underlying provisions upon which counts 1 and 2 of the indictment are based. However, this exemption power does not apply to section 6, and it does not expressly apply to section 16.1.\nOpinion\nI\nDefendant argues that the F.D.A violates the constitutional guarantees of due process and equal protection because section 12, when read in conjunction with section 20, authorizes the Attorney General to grant individual exemptions from the obligations of an otherwise uniformly applicable criminal statute.\nDefendant also argues that it violates the constitutional requirement of separation of powers (Ill. Const. 1970, art. 2, \u00a71; art. 4, \u00a71) to authorize the Attorney General to, in effect, rewrite the provisions of an otherwise uniformly applicable criminal statute by granting prospective exemptions from that statute.\nThe separation of powers argument presents two questions. First, can the General Assembly ever delegate authority to grant prospective exemptions from an otherwise uniformly applicable criminal statute? We have been unable to find another case in which a legislature delegated such power to an executive officer or agency, but, \u201c[i]t is an established rule that the General Assembly cannot delegate its general legislative power to determine what the law shall be.\u201d (Hill v. Relyea (1966), 34 Ill. 2d 552, 555, 216 N.E.2d 795.) Keeping this established rule in mind, compare the Attorney General\u2019s extraordinary power under sections 12 and 20 of the F.D.A. with the detailed procedures, including the check of the Governor\u2019s veto power, which the Constitution requires the General Assembly to follow whenever it seeks, by amendment, to add an exemption to an already enacted statute. Ill. Const. 1970, art. 4, \u00a7\u00a77,8 & 9.\nAssuming that this exemption power is delegable, the second question is whether the F.D.A. provides an adequate guideline or standard for use in limiting and reviewing the exercise of the delegated power. A delegation of legislative authority is an unconstitutional violation of the separation of powers if the delegated power is not limited by an intelligible statutory guideline or standard. (Hill v. Relyea.) We believe it is appropriate to consider the second question first because it presents the narrower issue of whether, in the context of section 20, section 12 of the F.D.A. contains an intelligible guideline as a limitation on the delegated power.\nSection 12 provides:\n\u201cThe [Attorney General] may by rule or order, and subject to such terms and conditions as he may prescribe, exempt any franchise, franchisor, subfranchisor, franchise broker, or salesperson from Sections 4, [or] 16 \u00b0 * of this Act if he finds that the enforcement of this Act is not necessary in the public interest * * (Emphasis added.) Ill. Rev. Stat. 1979, ch. 121)2, par. 712.\nThus the statutory \u201climitation\u201d on the Attorney General\u2019s exemption power is his or her individual determination of what is \u201cin the public interest.\u201d When read in conjunction with section 20, section 12 of the F.D.A. authorizes the Attorney General to grant individual exemptions from an otherwise uniformly applicable criminal law whenever he or she concludes that it is \u201cin the public interest.\u201d\nBut, the General Assembly has already implicitly determined that it is always \u201cin the public interest\u201d to uniformly provide that it is a crime to fail to comply with the registration and disclosure requirements of the F.D.A. Since consistent application of these registration and disclosure requirements is an important means of protecting Illinois residents from substantial losses (Ill. Rev. Stat. 1979, ch. 121)2, par. 702), it is neither clear nor comprehensible why it would ever be \u201cnot in the public interest\u201d to consistently apply the uniform criminal provisions of the F.D.A. as enacted by the General Assembly. It is, therefore, internally inconsistent for the F.D.A. to provide that the Attorney General can rule that it would be \u201cin the public interest\u201d to grant exemptions from these otherwise consistently applicable criminal provisions. We therefore conclude that the phrase \u201cin the public interest\u201d is not an intelligible limitation on the exemption power in the context of an F.D.A. criminal prosecution. Consequently, when considered in conjunction with section 20, section 12 of the F.D.A. is an unconstitutional delegation of legislative power.\nII\nAs we already noted, section 12 expressly authorizes exemptions from sections 4 and 16, the provisions which form the underlying bases for counts 1 and 2. But before considering the extent to which the crime defining section 20 is severable from section 12, we must determine whether the exemption power indirectly applies to section 16.1, the provision upon which count 4 is based.\nThe first sentence of section 16.1 requires the registration of \u201cfranchise brokers\u201d and of the salespersons who represent such \u201cfranchise brokers\u201d in Illinois. There is no reference to section 16 in the first sentence of 16.1. However, the second sentence of section 16.1 requires a \u201cfranchisor\u201d to register each salesperson who represents the franchisor in Illinois \u201cby filing an application containing the information required by Section 16 0 * *.\u201d (Ill. Rev. Stat. 1979, ch. 121/2, par. 716.1.) Thus, the Attorney General\u2019s section 12 authority to grant exemptions from the requirements of section 16 indirectly includes authority to grant exemptions from the requirements of the second sentence of section 16.1.\nAlthough the first sentence of section 16.1 imposes obligations solely on \u201cfranchise brokers,\u201d and the second sentence imposes obligations solely on \u201cfranchisors,\u201d count 4 does not specify, by numerical designation, whether it is based on an alleged violation of the first or second sentence. However, count 4 itself accuses defendant of violating section 16.1 by selling a franchise in Illinois \u201cwithout first having registered each salesperson who represented the franchisor \u00b0 \u00b0 e.\u201d (Emphasis added.) Furthermore there is no mention of \u201cfranchise broker\u201d in count 4.\nBecause \u201cfranchise brokers\u201d and \u201cfranchisors\u201d are separate types of franchise sellers under sections 3(3) and 3(22) of the F.D.A. (Ill. Rev. Stat. 1979, ch. 12112, par. 703), it is clear that count 4 is based solely on an alleged failure to comply with the requirements of the second sentence of section 16.1. And as we already concluded, the section 12 authority to grant exemptions from section 16 indirectly includes authority to grant exemptions from the requirements of the second sentence of section 16.1.\nIII\nNext, we must consider whether section 12 is severable from the portions of section 20 upon which counts 1, 2 and 4 of the indictment are based. Ill. Rev. Stat. 1979, ch. 121/2, par. 739.\n\u201cThe settled and governing test of severability is whether the valid and invalid provisions of the Act are \u2018so mutually \u201cconnected with and dependent on each other, as conditions, considerations or compensations for each other, as to warrant the belief that the legislature intended them as a whole, and if all could not be carried into effect the legislature would not pass the residue independently o \u201e o\u00bb \u2019 [Citations omitted.] The provisions are not severable if \u2018they are essentially and inseparably connected in substance.\u2019 Fiorito v. Jones (1968), 39 Ill. 2d 531, 540, 236 N.E.2d 698.\nWe recognize that the legislature is, as it should be, usually precise in defining the scope or applicability of the criminal laws which it enacts. However, in the case of the F.D.A., it is apparent that the General Assembly believed that the applicability of the statute, as enacted, was broader than it should be, and that it was, therefore, necessary to authorize the Attorney General to grant exemptions from the provisions of the Act. Therefore, we conclude that those portions of the crime-defining provisions of the F.D.A. which are involved in this case are so closely connected with and dependent upon the unconstitutional exemption provision that they are inseparable; the legislature would not have passed one without the other. Specifically, we hold that section 20 of the F.D.A. is invalid to the extent that it makes it a crime to fail to comply with sections 4 and 16 and the second sentence of section 16.1 of the F.D.A.\nSince counts 1, 2 and 4 are based upon invalid portions of section 20, we conclude that these counts, and the convictions which are based upon them, are void. It should be noted, however, that our holdings on the unconstitutionality of section 12, and on the severability of section 20, are based on an analysis which views the exemption provision solely in the context of a criminal prosecution. We therefore express no opinion on the validity of section 12 in the context of a civil case.\nThe State notes that in People v. Vandiver (1971), 51 Ill. 2d 525, 529, 283 N.E.2d 681, the supreme court declined to consider a void-for-vagueness attack on the validity of a statute because the defendant\u2019s arguments were based on hypothetical situations which were not involved in that case. The supreme court stated that, \u201cThe hypothetical situations do not involve this defendant nor this case and the validity of the statute in light of the same will therefore not be considered.\u201d (51 Ill. 2d 525, 529.) But, unlike Vandiver, the unconstitutional feature of the statute under which defendant was prosecuted is pervasive. Moreover, the defendant in this case does not rely upon remote hypotheticals to support his attack on the F.D.A. Therefore, we conclude that the prudential rule of judicial self-restraint invoked in Vandiver is not applicable to the present case.\nIV\nSection 6(1) (c) of the F.D.A. provides:\n\u201cIt is unlawful for any person, in connection with the offer or sale of any franchise, to directly or indirectly * 6 \u201d (c) Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.\u201d Ill. Rev. Stat. 1979, ch. 121?2, par. 706(1) (c).\nViolation of section 6 is a crime, under section 20; but section 12 does not authorize the Attorney General to exempt franchise sellers from the prohibitions on fraudulent practices which are established by section 6. Our holdings on the validity of the other counts of the indictment are, therefore, not controlling on the question of the validity of this count.\nCount 3 accused defendant of violating section 6(1) (c) by \u201cfailing to place the franchise fee paid by Roger Collier in an escrow account as required by the Illinois Attorney General\u2019s Office.\u201d The State\u2019s theory of criminal liability under count 3 is that, although it might ordinarily be lawful under section 6 for a franchisor to fail to use an escrow, this omission became a felony because of the requirement in the \u201cstop letter\u201d that Pie Tree submit an escrow agreement.\nDefendant initially argues that section 6(1) (c) is void for vagueness on the grounds that it does not give reasonable notice of what conduct is made criminal. Instead of defining what is meant when the terms \u201cfraud\u201d and \u201cdeceit\u201d are used in section 6(1)(c), the definitions section of the F.D.A. merely exacerbates the vagueness by stating that, \u201c \u2018[f]raud\u2019 and \u2018deceit\u2019 are not limited to common law fraud or deceit.\u201d Ill. Rev. Stat. 1979, ch. 12m, par. 703(11).\nHowever, we need not address the question of the constitutional validity of section 6 because we agree with one of defendant\u2019s alternative contentions: that the evidence is not sufficient to prove him guilty beyond a reasonable doubt.\nThe State does not dispute that, under its own theory of the case, it was obligated to prove beyond a reasonable doubt that defendant knew that the \u201cstop letter\u201d sent to Pie Tree\u2019s attorney required Pie Tree to submit an escrow agreement.\nAlthough there was direct evidence, including Collier\u2019s testimony, that defendant knew Pie Tree\u2019s Illinois registration had not been approved at the time the franchise agreement with Collier was executed, there was no direct evidence to show that defendant knew about the demand that Pie Tree submit an escrow agreement. Instead, the State relied solely upon circumstantial evidence to prove this element of its case. This circumstantial evidence consisted of showing that the \u201cstop letter\u201d was sent to Pie Tree\u2019s attorney, and on the fact that defendant knew the Illinois application had not been approved.\nAccording to the State, \u201cThis evidence, coupled with Collier\u2019s testimony that defendant knew of the Illinois franchise application, is more than sufficient for the jury to infer that defendant knew full well the contents of the March 8,1978, \u2018stop letter.\u2019 \u201d\nWe disagree because this circumstantial evidence is not sufficient to exclude every reasonable hypothesis for the facts which is consistent with innocence.\nEven if we infer that Beatty received the \u201cstop letter\u201d and informed defendant that more paperwork was needed on the Illinois application, Beatty did not testify at trial, and there is no way of knowing whether Beatty discussed, with defendant, all the contents of that letter. It is, of course, possible that Beatty discussed the escrow requirement with defendant. But it is equally possible that Beatty did not. We simply cannot conclude that this evidence of a mere possibility is sufficient to prove, beyond a reasonable doubt, that defendant knew about the Attorney General\u2019s escrow requirement. Consequently, we find that the evidence is not sufficient to prove defendant guilty of count 3 beyond a reasonable doubt.\nFor all the preceding reasons, defendant\u2019s conviction is reversed.\nReversed.\nMEJDA and WILSON, JJ., concur.", "type": "majority", "author": "JUSTICE LORENZ" } ], "attorneys": [ "Donald Page Moore and Jo-Anne F. Wolfson, both of Chicago, for appellant.", "Tyrone C. Fahner, Attorney General, of Chicago (Donald Townsend and Greig R. Siedor, Assistant Attorneys General, of counsel), for the People." ], "corrections": "", "head_matter": "THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. DALE M. CARTER, Defendant-Appellant.\nFirst District (5th Division)\nNo. 80-1851\nOpinion filed November 20, 1981.\nRehearing denied December 23, 1981.\nDonald Page Moore and Jo-Anne F. Wolfson, both of Chicago, for appellant.\nTyrone C. Fahner, Attorney General, of Chicago (Donald Townsend and Greig R. Siedor, Assistant Attorneys General, of counsel), for the People." }, "file_name": "0796-01", "first_page_order": 818, "last_page_order": 826 }