People v. Woodson

WILSON, J.

The question raised by this appeal is not, as stated by appellant, whether a partnership can be organized without a permit from the Corporation Commissioner, but is whether an individual or a partnership may offer for sale or sell securities of his or its own issue without a permit.

Appellant was charged with four separate violations of the Corporate Securities Act, was tried without a jury, and was convicted on three counts and acquitted on one. The appeal is from the judgment of conviction.

The applicable sections of the Corporate Securities Act (2 Deering’s Gen. Laws, 1944 ed., Act 3814, p. 1418) are as follows: Section 2, subdivision 3: “The word ‘company’ includes all . . . partnerships of every kind, . . . and also individuals as hereinafter defined.” Subdivision 6: “The word ‘individual’ in so far as it is included in the definition of a ‘company,” includes only persons selling, offering for sale, negotiating for the sale of or taking subscriptions for any security of their own issue.” Subdivision 7: “The word ‘security’ shall include any stock, bond, note, . . . evidence of indebtedness, certificate of interest or participation, certificate of interest in a profit-sharing agreement. ...” Subdivision 8: “ ‘Sale’ or ‘sell’ shall include every disposition, or attempt to dispose, of a security or interest in a security for value. . . .” (Stats. 1945, ch. 399, p. 853.)

Section 3: “No company shall sell any security, ... or offer for sale, negotiate for the sale of, or take subscriptions for any security of its own issue until it shall have first ap

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plied for and secured from the commissioner a permit authorizing it so to do. . . .” (Stats. 1941, ch. 615, p. 2064.)

Section 17: “Every company which shall directly or indirectly offer for sale, or negotiate for the sale of or sell, or issue, or cause to be issued any security contrary to the provisions of this act, . . . shall be guilty of a public offense and shall be punishable by a fine not exceeding ten thousand dollars.” (Stats. 1931, ch. 423, pp. 937, 950.)

Appellant’s method of operation varied but little in dealing with the several persons from whom he obtained money. He placed an advertisement in a newspaper reading: “Assoc. Sportsman, Club & cattle ranch. Nom. inv. Box A-84, Times.”