33 Ga. App. 802 | Ga. Ct. App. | 1925
Trustees Loan & Savings Company brought suit in’ the municipal court of Atlanta against Charles'E. Witt upon a subscription for stock in Class “D,” under the “securities act” (Ga. L. 1930, p. 350). The subscription was made on February 30, 1933. The case resulted in a directed verdict in favor of the plaintiff, a certiorari was dismissed by the superior court, and the defendant excepted.
The plaintiff, at the time of taking the subscription, had applied for and obtained from the securities commission a license to soli its stock, under the securities act. The defendant, however, pleaded among other things that the plaintiff had not complied with section 13 of the act, and contended then and still contends that a failure by the plaintiff to comply with this section before taking his subscription rendered the subscription void, notwithstanding the license or permit. In support of this defense he offered in evidence a certified copy of the application as filed with the com-’ mission, disclosing that the facts were as the plea alleged. Thu offered also oral testimony to the same effect. All of this evidence was rejected as being irrelevant and immaterial, and this ruling is assigned as error.
In the opinion which we entertain with respect to the question, thus presented, and in view of the record, we do not deem it necessary to decide or state other points which the plaintiff in error has insisted upon, it appearing to be an undisputed fact that the plain
Section 13 of the original act provides that no securities in Glass “B” shall be sold or offered for sale until there shall have been filed in the office of the commission certain specified statements and documents, including a statement (subsection 4) of the names, addresses, and prior occupations, during not less than eight years next preceding, of the officers, directors, or trustees of the applicant if a corporation (as was the plaintiff), giving details as to time, place, and addresses of their employers, and reasons for discontinuance of employment. The effect of the court’s ruling was to hold that the noncompliance with these requirements would not constitute a defense to the suit upon the subscription. In our opinion this ruling was error. Section 35 provides that every sale and contract of sale made in violation of any of the provisions of the act shall be void at the instance of the purchaser at any time within twelve months from the date of the purchase or contract of purchase. The defense was interposed within the time limit prescribed. It matters not that the plaintiff may have obtained a license to sell the securities, or that the sale of the same without a license is made criminal. According to the clear and unequivocal language of the act, as expressed in the two sections just mentioned, a sale of securities in Class “D” may be voided by the purchaser, within twelve months if there was a failure to comply with the requirements of section 13, without reference to whether a license to make the sale has been granted or not.
The identical question seems to have been decided by the Supreme Court of Tennessee in Dixie Rubber Co. v. McBee, 148 Tenn. 168, 170 (253 S. W. 353). The contention of the plaintiff there, as here, was that the permit or license issued (in that State) by the secretary of State, authorizing it to sell its stock, was conclusive that the plaintiff had in all respects complied with the requirements of the statute to entitle it to offer its stock for sale. The defendant, on the other hand, insisted that the • failure to comply therewith rendered the. sale void, irrespective of the previous granting of the license,..-The court said: .“The act'in question [Public Acts of Tenn., First & Second Extra Sessions 1913, p.
“It will be observed that to entitle, the secretary of State to
The Georgia securities law is very much more elaborate than the Tennessee act, and it is true also that the statutes are materially different in certain particulars. But there is little, if any, difference in the effect of the provisions of the two statutes relative to matter such as was relied on as a defense respectively in the case before us and in the Tennessee case from which we have quoted. .While some things said in decision in the Dixie Rubber Company case would be amiss under the language of the Georgia statute, the
It is our opinion that evidence of noncompliance with the provisions of section 13 of the securities law of this State would have established a valid defense, and that the rejection of such evidence was error. Tbe superior court erred in dismissing the certiorari.
Judgment reversed.