Case Information
*1 625.
OFFICE OF THE ATTORNEY GENERAL. OF TEXAS AUSTlN
licixorable Villlau~ J. Lavson
seore* OS 8lxbt.e
Au&~ Tesas
Attentionr Hr. Frank D:Wear
opinion No. O-3937 Re: Do any 0f the lmit~ents OS Dear slrt R6llen's lfational Club oonetl- tute a lwourity vsthltl the
meaning o? the Seouritiee hot?
..Yonr ‘iettei requesting the opinicb of this department . on the 8bo~e stated queatim reada in part OS rollovst
i. "It‘hsa been 08uOd to the attention or this thit one Hellen of Hoaston, lexasb is Dement OpeI'8ting.in Eoueton vhat is lmolfn 88 a &lro-ten eh83.u under the name of' Eellent 'Rational Club. '2he plan operstee mnething llke the old ahainletter raoket exoept that it ia operatdd thron#h the-eals of siembershlpe tiEellen's Ration- dWub rather that& tprough a oh4.n letteri A olub Is rormed, ror example, ln Houston, vlth ten~char- 'tef~membere. Rach charter member eel18 memberships
to two other.peoplei eaoh of the86 tvo other people sell memberships to two more] eaoh of these two eellmembertipe to tvo mom, eta.
'The nsmea are added t6 the lietAn the same way ae in the 0halIl letter raoket. Out od esoh mem@er- ahip fee of 41.00, 506 goes to the Cltib or promoter etnd 504 goes to the mad vhoae name ir on the top of the lirt.
"Under the plan a8 nap in we ii the ohain la rmbroken and If eaah member eel18 to tvo more members the number one nmn oti the list at the time of the *2 E6?+or6blq Yilll~m J. Y,,a~86n, page 2
tenth progr688lon vould reoelve 504 from eaoh the 1,024 member8 who would then be 6n the list, an amount of- 4512.
‘~II eOIIMOtiOII vith th0 OptIMtiOI8 Or 8Wh plan H6ll6n*8 Olub we8 6 pr6limlnaq applf6atlon, oopy whl6h 18 8abnitted herewlthj ordia6ry r6- 06ipt, OOm Or vhbh i8 iik6Wi8e dUUitt@d, bid 8poluOi!'8 OC~R~BB~COI Oredit vouoher, ldliah,6Iitltl68 t)y&uenb~
top of the li8t to hi8 50+ iror 66oh . A OO~ 0r thin ln8tnrment 18 d80 6n61086d.
We Dl8trlot AttorPej 0r li827b Ootmty h88 re8- 88 to vhether quested an opinion fron thla Department - any or there lmstrum6nts oon8tltute 8 866tuey vithh the meaning 0r the Secmrltles Aot for the purpo80 0r mlbmlttlng to th e grand jury l o cmp~lnt &sgalEt Bellen for 86ulXQJ ueourltle8 vlthout 5 1106Ik86~'
fh8 preliminary applloatlon blank, ordimry rooelpt, 6#&8p6n80rf8 oomml88lon oredlt vou6h6r u88d by.th8 Eellen~8~Ha-, tl6nal Qub, photo8tatlo oopler 0r rlri6h ar8 attaahed to your aiqta7 m a8 r0uw8t ‘PRRLnmmY APPxmATI0H
_ Hourton, Texa6 "Qsatl6menr
.'I h6r6With &e 6pplloatian to b6'6dmltted to the ~e~elln'8 #atlonaf Club, and if aoo6$t6d agr66 to 6blde W it8 by-lav8 and rul08.~ Plea80 rind uwunt of piian du8 on m8mbemhlp drive pl6n.
Same Qddrera "Oohtpation
R88ld6nO6 456-W
"Signed
(R-6 f.Xi m
D-l-3-N” *3 Bonorable Hilllam J. Layson, Page f 1941
%maton, 96X$8, jhly.16, "Reo6lved 0r RDWARDBURRHRR
2412 U6ntvorth Dollars Rl!z&Ri'S RATIOHAL SPiNSOR'S OOXSSSIOR ORlWT VOUOHRR Veo8tlan uwh Bonw Plan RmmH’S HATI- OmB 1.001 lie Help ?iou Wh6n ton Reed it Moat-HOW; Total -' - #X?Eh RSScUtiV6 wfi668t D88 &3ti68, fOV6i
t Jpomors Cc48mi88lon Oredit Vowher ror be!%$%r?z- #l.OO# PXQi@n688
Be Provident State Readquwters--Hton, Texas SAVE !wE:
3.8 the'&OWOM,'(~ sntitled to Oai+-;L f w - 4 to be paid personally oT brfng & Read- r0r Credit. qwrters, Registbl'6d and
To the Seoretary, State ,Spon8or6dbj Dlreotor
NmFp RHTmPRIsEs
&UlS -88' "molti zhi8 @6dit VoWher pressntsd at &mborship~Drive Re8d- Q3Wt.W"-Of ROn6n'S ~tiiOnrr1 Olub e&it168 holder Of this Oredit to m&e applioetion ror memberShip Dev6 ?66 by pafing rouaher Sw6, signing appllaatlon - bokrg sp6auored w a m6mb6r &tit188 holder to two oredit 6cumalselOn vouchers rlth their xmme thereon Vhlah must be used to seoure tvo nev prorpeofAve m6mbers.' Honorable William J. Lavaon, Page 4
"The 6eourities Aot" defines the term '66aurlty" or "SeOUl'itieS a8 fO116VSl
'm t6l'm '86ClWit~' Or 'S~OtWitieS' Shl11 in- olude euy ahar6, atook, treasury stook, 8toOk oertl- fiOat6 under a voting tru8t agreement, collateral : trwt oortifloat6, equl*ent tru8t csrtifloate, free orgtisation 06tiiilOSt6 or receipt, subsarlptlon or reorgeniration oertifioate, note, bond, dsbfjnture, mortgage oertiiiante or OthW6Vld6&6'0f'lndebted- nesa, any form of 00mmerolal paper,' oertiiloate .in or under a piit rhu-iog partioipation agreem6nt, oertifloate or any lartrum6nt pepresentlng 8ny in- terest in or under an oil, gas or mining lease, fee or title, or any oertitioato or instrument represent- lng or 8eOurOd by an lntePert in any or all or the oapltal, property, asset8, profits or e-8 or any o~mpany, inveetment oontraot, or any other II+ strument uomnonly kuown as a security, whether slml- lar to there herein rererred to or not. l l l " It will be noted that the ,term 'SeOurltfor "8eo~ltl8s" . lnolude a number 0r instrument8 or things SpeOiflOtily mentioned therein and any other inrtrmnent oomonly known 88 a seourlty vhether similar to those rererred to not, in the Aat. Ae the Becuritiee Act mentions any other instrument
commonly known as a security, we dlreot your attentlon'to some 0r the general derinitSon8 0r the uord "8eOxMties' found in Words end F+hrmes, Perm. Ed., Vol. 38, p. 469 and the following pages I '8ecurltlea ar8 generally defined aa written
asnurenoea for the r6turn or repayment of money evidence of indebtedness."
"3eaurlty is an evidenae' of debt or of prop- erty, as a bond, stock oertificate or other lnstru- ment, eta.; a dooument giving the holder the r&at to demand and reaelve property not in hla poases- aion.'
Honorable William J. Lawson, page.5
"fhe t6Zm 86ouriti88 in it8 broadest 86lISO em- br&OeS bonds, 06~ifl~t68 Or StOOk, and other~evi- den06 Of debt or Or pro rty. @hayer ~8. Wathen, 44 8. If. 906; 17 Zex. r 3 2)
“Oenerell~, any r0m 0r *8trm8ibt wed ror purpose or rinrnoing end prcaPoting enterpalsos, de&lgned.ror lnYe8tment, 18 8 SOOilPity vlthin Stat- , tat6 authoriring inveetigoti&s by Attorno$+'Oenerrrl
0r apparent rraud la dale or reauritles."
liebster defines seotiity to be something to be giVeri or dspOSitOd.tO &t&k6 Oertain the fu.UllUent, or an obllgatlon~ the observauoe or a provision ror .the payment of a debt. Re ale0 says it may mean any _ evldenae of a debt.. A oontraot which seourea olearly asoerteina the amount Of money due on 'the ' performuce of a certaia work or the fU!nlsh~ or certain material is a seourlty in law."
"The tOEa 86ouTicy SigniiieS ~that vhloh make6 seoqe or oertalni In its proper use it relates to _ peo*isry matters, and often oonb~s 0r a promise or right uneljtended with possession of the thing upon whioh It repoaes.~ St Implies in' its oommon aooeptatlon that whloh prevents loss or makes safer Dr. Johnson deflms It as anything given as a pledge or sstltion. Dean Svlft uses it as sopongmoua ulth 86fety.or oertalnty. Webster defines it as anything g&n or depOSited to 8eoure the payment of a debt the performan 0r a oontraot, aft a bond ror sure- ty, a mortgage, the endorsement of a resporislble m8n or 8 pledge. It is that whloh renders 8 matter sure; an Instrument vhioh render8 oertain the performanoe of' the aontraat." !Ehe Appellate court8 0r thie std8 have renderd soy- oplnlons construing oertain provisions "The Se0uritles
oral BOnne Or th88e 01888 are, Atvood vs.'Btate, 121 S. W. (26) Aot.' 3 33 Satlth vs. Fishbaok, 123 3. W. (26) 77l; Eadane va. Olark, 1 3 a. w. (26) 197; Culver vs. Cockburn, 127 9. x. (26) 328; s
llu8e va. State, 132 3. W. (26) 596; Alken vs. State, 128 9. W.
Eonomble W~lism J. Lavaon, Pq6
(26) US05 Sulta Par Fpvler, 148 S, W. (2d) 249f end Oonser VS. Hnncohk, 149 8. (2d) 239. After 08l’eiullJ If. reading a686 O&SeS, 96 d0 not think th& ULy Or them the f.UVOlVeS QUOSti6Zl OOMidOl’Od’ iJX this OpiaioO.
lllter owefull~ oonoli9eriug the term “aeOur*k 8wawltLes" aa dofIned by "The 8eaur:t:aa Aat' vo do pot :. think .th&t Bny Of the above wnti@Md inStl’U’Uellt8 u8& by )' ~6~~‘8 )I&tiOti%&Ub OODLI) rithb the tOl’I8 •86iXll’it~m OC is defined by ‘Tha, Seouriticrs Aot.’ *se6uritler* es that term
Tr?llBtliig that the ror6golng hlly eu8lrer8 .your ini' Your8 very truly ATTORRRY 0RRMU.L OF TRXAS &Qa~~ Ard8llw1ll3ah hSSiSt&llt