*1 only 32-08.1-03(l)(i), can a defendant county moving deny he is from BARNES, L. Plaintiff giving where he resides without Appellee, and plaintiff and need alleged for the debt is. show Larry SUNDERMAN, Defendant that, addition, it is clear to us Appellant. more, Rayer’s to another without move al county giving security for the without Civ. 890288. leged for the is an insufficient reason debt Supreme “parte prejudgment ex issuance of writ Court North Dakota. is attachment. The fact that a defendant March about move to another without debt, alleged giving security for an without

more, among the “truly is not unusual” 1999),

(Fuentes, at

“extraordinary requiring situations ...

special protection to a state or creditor (Sniadach, 339, 89

interest” 1821).

S.Ct. at parte is

We conclude ex Rayer’s of attachment on

suance of a writ of this

property under circumstances provisions

case in accordance with the 32-08.1,

Ch. a denial constituted law,5 explained in process

of due Fuentes,

Sniadach, Mitchell, North Geor Inc., We,

gia Finishing, and Guzman.6

therefore, deny supervisory which writ its

would direct the district court to vacate

order held our statute which attachment

unconstitutional which dissolved encourage par We

writ of attachment. early

ties cooperatively seek an determi underlying

nation of the claims on their

merits. WALLE, LEVINE and

YANDE

MESCHKE, JJ., and R. VERNON

PEDERSON, Surrogate Judge, concur. PEDERSON, Surrogate R.

VERNON

Judge, sitting place GIERKE, J.,

disqualified. decided, Having parties issues about determine if 6. The have raised so need not Judge correctly proce- validity Glaser determined that under the of our attachment statutes requires notify process We, dural due an that a creditor do North Dakota Constitution. right alleged his debtor that to an immediate attempt to determine state constitution- hearing timely will be lost if not demanded al issues. exemptions process right that his to claim will be lost if not likewise exercised. *2 signed May Sunderman a

On note to Barnes in the amount of promissory $8,692.51. payment made one Sunderman note, refusing to make further on the “many of undisclosed payments because Barnes commenced an action problems.” promisso- due on the to collect the amount ry counter-claimed for note. Sunderman damages. and rescission financial condition of the bar prior disclosed to Sunderman to the facts deposition, are in conflict. In her Var- sale checking ga that the bar’s account testified on numerous occasions was overdrawn April May and and that the around pay- tax was also behind its sales bar personal- ments. She testified that she had $1,200 $1,500 ly out a loan of to taken expenses of the and cover some of bar yet that she had not been reimbursed. her Varga also claimed that the bar owed outstanding wages. She testified Varga Barnes was aware of the situation. in, bought also said that before Sunderman loan, outstanding him her she told about running short of and that bar was money. testified that he was not told

Sunderman Varga Barnes of the financial either Smith, Bismarck, Lucas and for defen- said, “I told difficulties of the bar. He was appellant; argued by and Sheldon A. dant everything caught up every- was Smith. taking thing was care of itself and Bismarck, Thompson, for Christensen & much, making money, very bar was but plaintiff appellee; argued by Maury C. Varga profit.” it had a He contends that Thompson. management him about difficul- told Sunderman contends that

ties bar. ERICKSTAD, following Chief Justice. after the he learned of the problems with the bar: Larry appeals Sunderman from a wages 1. That substantial back judgment awarding Terry Barnes Dorothy Varga; owing to $8,534.12 plus statutory interest and costs $1,200.00 owing Dorothy 2. That was promissory dismissing on a note Sun- wages; Varga in addition to her back derman’s counterclaim. We affirm. obligation an Doro- 3. That there was Terry fifty percent Barnes owned of the thy Varga pay for severance Inc., Page, operated interest in Front which $5,000.00; Bismarck, liquor establishment North personal payments 4. That interest on Dakota, commonly known as the Front being gross re- loans were made out (the bar). Upon learning of Barnes’ ceipts; bar, Larry to sell his desire interest Terry That Barnes owed a bar bill Dorothy Varga, Sunderman contacted $900.00; manager, to obtain more information about operation. Terry May the bar This occurred in 6. That Barnes’ insistence that he (Sunderman) $5,000.00 inject into the cor- poration law, the fact Under North account was based Dakota securities purchaser outstanding is entitled to that there were bad checks rescission and dam- ages if signed the seller of a directly Barnes had behalf indirectly Inc., money this makes untrue *3 Page, of Front and that statement of a material fact or all omits “to state a was needed to clear some or of these material necessary in checks; order to make the state- fact made, light ments in the the circum- agreement buy-sell 7. That there awas made, stances they under which are not between Barnes and Dan Undem misleading.” [Emphasis Section added.] permission and that was not ob- Dan’s 10-04-15(3), A N.D.C.C.2 fraudulent intent required; tained as required provision is not under that of our represented 8. That Barnes that Doro- law, securities law. our Under contract when, thy Varga manager the would be however, the omission definition of actual fact, Dorothy Varga in Barnes knew that fraud is an act committed “with intent to way on the out. was deceive another party thereto or to induce Sunderman testified that before he him to enter into the contract: ... The in, bought attempted he had to some- have suppression of that which is true one one look the books and records of the having knowledge or belief of the fact.” bar, Varga but that had told him to contact 9-03-08(3), Section N.D.C.C. get permission. Dan Undem to Sunderman Barnes contends that the securities Undem, attempted contends he to reach but apply law does not because was not unsuccessful, was and because of a time attempting securities, sell but was pressure problem, opportu- did not have an trying to sell his in Page. interest the Front nity to see the books.1 Because of this theory, This known the “sale of busi situation, Sunderman contends he had to test, ness” doctrine or the Howey was rec rely on statements made Barnes and ognized by Supreme the Court of the Unit Varga. Co., ed Howey States S.E.C. v. W.J. 328 Barnes testified that he unaware of was 293, 1100, U.S. 66 S.Ct. 90 L.Ed. 1244 any outstanding debts of the bar at the To be a transaction under Varga time of the had control of the test a transaction must involve books, deposits, the made the and that he (1) (2) money;” “an investment of “in a relied on her financial for his information (3) enterprise;” profits common “with about bar. solely come of others.” efforts 301, 1104, Howey, 328 U.S. at 66 S.Ct. at appeal, On Sunderman contends that L.Ed. at 1251. applies North Dakota securities law that he is pair companion entitled to rescission because he In a more recent cases, proved Landreth, has that there were material mis- Landreth Timber v.Co. omissions; 2297, and, 681, 105 statements or in the alter- 471 U.S. 85 L.Ed.2d 692 S.Ct. native, (1985), that he is entitled to Ruefenacht, rescission be- and Gould v. (1985), proved

cause he has that he was defrauded 105 S.Ct. 85 L.Ed.2d 708 purchased corporation. Supreme when he into the indicated that the Court How- rectly indirectly, 1. Sunderman contends that he was told that the to make untrue liquor up beginning license was for renewal the statement of a material fact or to omit to of June 1988 and that therefore he had to final- necessary fact in order to state a material 31, 1988, by May get ize the deal in order to his made, light make the statements liquor name license. they under which are the circumstances misleading.” 10-04-15(3), 2. Section reads as fol- lows: practice "It shall be a fraudulent and it shall be unlawful: any person, '3. For in connection with the offer, sale, purchase any security, di- exempt any dealer or

ey test does not across-the-board. salesman stocks, sale of the Court relation to the participating an isolated sale from simpler adjudicator test: announced a registering in accordance section must first determine whether instru 10-04-10, exemption nor shall this possesses “stock” ment denominated available in connection with sale “ significant ‘some of the characteristics good not made faith but rather for typically with’ stock.” Lan associated purpose evading registration dreth, 471 U.S. at requirements imposed chapter under 697, quoting Housing L.Ed.2d at United 10-04. Forman, Found., Inc. v. *4 2060, 621, 2051, 44 L.Ed.2d 95 S.Ct. (1975). If “the instrument involved is tra Any pursuant 9. a. transaction to an [tjhere is no need ditional stock ... ... by offer directed the offeror to not beyond the characteristics of the in look (other twenty-five persons more than strument to determine whether [Securi 5) designated than those in subsection Landreth, apply.” 471 U.S. at Acts ties] during any period this state 690, 2304, 85 L.Ed.2d at 700. 105 S.Ct. months, twelve consecutive ... say agree on to “we cannot Court went respondents that the Acts in only ‘passive tended to cover investors’ and Provided, however, that the commis- negotiated privately transactions in order, may by any sioner rule or as to volving ‘entrepre the transfer of control to security any type or ” transaction or Landreth, 692, neurs.’ 471 U.S. at security transaction, or withdraw 2305, S.Ct. at 85 L.Ed.2d exemption, further condition this in- defining statute Because the federal a crease or decrease the number of of- “security”3 substantially is similar to the permitted, ferees or waive the condi- definition of a under our securities in paragraphs tions and 3 with or

law,4 corporate conclude that the stock without the substitution of limitation involved this transaction is traditional on remuneration.” stock and that Dakota North securities law apply. does Barnes contends that this transaction is exempt provisions 10-04, of Ch. Barnes also contends this transac- only because Sunderman was exempt tion is from the North Dakota secu- person involved in the transfer of stock. 10-04-06, N.D.C.C., rities law section However, introductory we note that which, part, in relevant reads: clause to section 10-04-06 indicates which “Except as hereinafter in this section requirements applicable to such 10-04-04, expressly provided, sections transactions. The sections mentioned all 10-04-07, 10-04-07.1, 10-04-08, and 10- registration requirements, relate to and not 04-10 shall not of the fol- provisions the antifraud of sections 10-04- lowing transactions: referring 15 and 10-04-17. In to the Uni- form Securities Act of we note that Any any security isolated sale of exempt the comment to section made or on behalf of a bona fide section, securities states that: account, owner for the owner’s such exemptions “1. The in Sections 401 issuer, being owner not an underwrit- operate exemptions only and 402 er, dealer, or salesman and such sale registration requirements securities being made in the course of re- (Section 301) peated filing and successive of sales litera- transactions of a (Section 405). like character. This requirements subsection shall ture "security" "security” 3. For the definition of a under federal 4. For the definition aof under North statute, statute, 10-04-02(13), 77b(l). Dakota C.C. see N.D. see 15 U.S.C. section clear, “7. That the Plaintiff did “It should be not make exemptions from the anti- representations there are no false or fraudulent 501; provisions of Section those fraud concerning the financial condition of the apply to all securities and transactions Front to the Defendant.” offer, sale, purchase involving the Findings governed by of fact are security.” clearly erroneous standard of review. Therefore, exempt the transaction is not Zinke, Holcomb v. 365 N.W.2d provisions of section from the antifraud (N.D.1985); 52(a), Rule N.D.R.Civ.P. A 10-04-15, N.D.C.C. finding when, clearly of fact is erroneous that North Dakota Because we conclude although there support is some evidence to Sunderman, apply, securities law does it, court, reviewing on the entire evi rescission, entitled to need order to be dence, is left with a definite and firm con Barnes, prove in connection with the viction that a mistake has been made. stock for omitted to state offer of his Mertz, (N.D. Mertz v. necessary in order to make a material fact 1989); Federal Land Bank St. Paul v. light of the the statements *5 Overboe, (N.D.1987). they circumstances under which misleading. See section 10-04- indicated, court, county As the after 15(3), N.D.C.C., may the text of which seeing hearing the witnesses who testif in found footnote 2. ied,5 evidence, assessing all the found Barnes, ruling county in the favor of that Barnes “did not make false or court, part, in found: relevant representations concerning fraudulent the purchasing “3. That before Plaintiff’s Page financial condition of the Front to the interest, the Defendant checked with the county Defendant.” While the court’s find Page manager Front bar about the condi- ings do not the mention omission of a mate purchasing tion of the bar and Plaintiffs rial fact definition of fraud found in section interest. He was informed that the busi- 10-04-15(3), N.D.C.C., recog the court did management in ness was trouble and had opinion nize in its memorandum that Sun- problems. testimony derman’s “indicated that there purchasing “4. Plaintiff’s That before part plaintiff’s was a failure on the interest, the met the Defendant with problems disclose financial which existed in the of the Plaintiff discuss condition Also, alleged omissions the business.” Page Front and the terms of the sale. and the relevant securities statutes were The Plaintiff informed the Defendant of referred to in trial brief. We Sunderman’s the condition of the bar to the best of his therefore, assume, county knowledge pro- information based took the “omission” standard into consider manager. vided the bar in ation its decision. purchasing “5. That Plaintiff’s before amply supports case The record this interest, the Defendant failed to make county findings and the memo- court’s inquiry investigation further into opinion of the court that Sunder- the Front randum

the financial condition of that the bar was “in trou- other than the conversations with the man was aware manager, although thought proper Plaintiff and the bar ble” and that opportunity he had an to do so. management, problems could be straightened are not left with a out. We “6. That the Defendant understood that a mistake definite and firm conviction buying he was a business that was not findings. in its doing was made the trial court well. evidence, Varga's testimony documentary or inferences from other was offered into evidence in deposition. explanatory facts, credibility the form of note on determinations.” There- 52, N.D.R.Civ.P., points out that fore, "[a] to Rule give court’s we credence to the permissible of the choice between two views Varga’s credibility based on her assessment of clearly evidence is not erroneous when the trial deposition. findings physical either court’s are based above, per- I findings As I have noted am not conclude, We that, ease, clearly under the facts this erroneous. suaded depart Howey test. we should Accordingly, affirm. notes, Furthermore, majority opinion as the found, effect, that there trial court LEVINE, J., in the result. concurs of material facts and were no omissions WALLE, (specially con- Justice VANDE need not decide whether or therefore we curring). apply to this securities statutes not the the securities I am not convinced transaction. NDCC, 10-04, applies to trans- law, chapter by the in the result reached I concur in which one before us such as the actions majority opinion. to trans- the transaction is purpose ownership of the business fer only incidentally stock is

transfer of MESCHKE, JJ., concur. GIERKE ownership. prefer I would evidence of the decision S.E.C. W.J. to adhere to Co., 293, 66 S.Ct. of this Under the facts

L.Ed.

case, reason for I can divine no rational transfer of a

distinguishing between the incorporated and which has been

business by an individual or

one which is owned incorporated in- partnership who have not Gary and Denise ANDERSON *6 intent is concerned. sofar as fraudulent Anderson, Plaintiffs and aware, majority opinion I as the am Appellees, notes, of the United that recent decisions v. subsequent to Supreme Court How- States securi might appear the federal ey COMPANY, OTIS ELEVATOR to transactions such as this one. ties laws Appellant. Defendant and However, many those cases were decided No. 890304. Civ. years after North Dakota enacted its secu rities statutes. had been decided Dakota. Supreme Court of North 10-04-15(3). North Dakota enacted when § N.D.S.L.1959, ch. 10. Where a See March jurisdiction statute is taken from another change, adopted without we assume Legislature adopted our it with the con placed

struction that statute jurisdiction of last resort of the Kisse,

whence the statute came. State v. (N.D.1984). N.W.2d 97 But in constru

351

ing adopted language a statute which jurisdiction, of another we are

of a statute by decisions of the courts of that

not bound

jurisdiction Legislature tendered after our Although

enacted the statute. Id. subse

quent jurisdiction may decisions of that

persuasive authority, they binding. Conrad, Corp.

Amerada Hess (N.D.1987); Magrum,

N.W.2d Loken v. (N.D.1986); Wells,

380 N.W.2d 336 State v. (N.D.1979), denied, cert. 61 L.Ed.2d 300