{ "id": 1385584, "name": "Coleman v. McKee", "name_abbreviation": "Coleman v. McKee", "decision_date": "1924-01-28", "docket_number": "", "first_page": "90", "last_page": "94", "citations": [ { "type": "official", "cite": "162 Ark. 90" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "49 Am. Rep. 313", "category": "reporters:state_regional", "reporter": "Am. Rep.", "opinion_index": -1 }, { "cite": "60 N. H. 294", "category": "reporters:state", "reporter": "N.H.", "case_ids": [ 4479765 ], "opinion_index": -1, "case_paths": [ "/nh/60/0294-01" ] }, { "cite": "203 Mass. 311", "category": "reporters:state", "reporter": "Mass.", "case_ids": [ 5680553 ], "opinion_index": -1, "case_paths": [ "/mass/203/0311-01" ] }, { "cite": "10 Wall. 566", "category": "reporters:scotus_early", "reporter": "Wall.", "case_ids": [ 3436006 ], "opinion_index": -1, "case_paths": [ "/us/77/0566-01" ] }, { "cite": "12 A. L. R. 1060", "category": "reporters:specialty", "reporter": "A.L.R.", "opinion_index": -1 }, { "cite": "181 N. W. 102", "category": "reporters:state_regional", "reporter": "N.W.", "opinion_index": -1 }, { "cite": "99 Pac. 109", "category": "reporters:state_regional", "reporter": "P.", "opinion_index": -1 }, { "cite": "113 Pac. 447", "category": "reporters:state_regional", "reporter": "P.", "case_ids": [ 3348951 ], "opinion_index": -1, "case_paths": [ "/idaho/19/0268-01" ] }, { "cite": "159 Ark. 621", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8724080 ], "opinion_index": 0, "case_paths": [ "/ark/159/0621-01" ] }, { "cite": "49 Am. Rep. 313", "category": "reporters:state_regional", "reporter": "Am. Rep.", "opinion_index": 0 } ], "analysis": { "cardinality": 418, "char_count": 7431, "ocr_confidence": 0.42, "pagerank": { "raw": 7.454604561672698e-08, "percentile": 0.4445042934935589 }, "sha256": "8f4fc202b885f905adb094c45bbc6b12b962f786a4c7ce2ed8f4f259b8d53b4f", "simhash": "1:256c9fe771201a15", "word_count": 1239 }, "last_updated": "2023-07-14T18:20:29.396763+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Coleman v. McKee." ], "opinions": [ { "text": "McCulloch, C. J.\nAppellant filed his application with the Bank Commissioner of this State on September 29, 1922, for the issuance to him of a dealer\u2019s license to sell shares of stock in an association of trustees doing business at Wichita Phils, Texas, under the name of Wichita Royalty Company. Appellant set forth in his application the trust agreement or declaration under which the association known as the Wichita Royalty Company was operating, and also stated that he was the owner of fifty thousand shares of the stock of said association, of the par value of one dollar per share, and desired to sell the same, and asked for a license from the Bank Commissioner to permit him to sell stock in this State.\nA copy of the trust agreement, exhibited with appellant\u2019s application to the Bank Commissioner, and with the complaint in this action, shows that the agreement was a common-law trust, whereby the trustees undertook to operate the business specified in the agreement and pay dividends out of earned profits in proportion to the shares of stock issued to purchasers, and that the holders of stock should not incur any liability for the indebtedness of the association. The Bank Commissioner refused to issue a license to appellant, on the ground that \u201cthe laws of the State of Arkansas do not authorize the legal existence of an association under a common-law. agreement or declaration of trust, and for this reason the application is hereby denied without consideration pf the merits of the securities sought to be -sold, \u201d whereupon appellant instituted this action in the chancery court, as provided by the statute. Crawford & Moses\u2019 Digest, \u00a7 769.\nThe statute known as the \u201cBlue-sky Law,\u201d under which this application to the Bank Commissioner was made, defines the term \u201cinvestment company\u201d and the term \u201cdealer,\u201d and requires a license for the sale of stocks falling within that definition, and also provides a method of the issuance of license by.the Bank Commissioner. Crawford & Moses\u2019 Digest, \u00a7 750 et seq., and Acts of 1923, p. 694. . The powers and duties under this statute were transferred from the Bank Commissioner to the Railroad Commission. The section of the statute defining\u2018\u201cinvestment companies\u201d reads as follows:\n\u201cSection 751. Every person, corporation, copartnership, company, or association (except those exempt under the provisions of this act), organized, or which shall hereafter be organized, in this State, whether incorporated or unincorporated, which shall either himself, themselves dr itself, or by or through others, sell or negotiate for the sale of any contract, stock, bonds or other securities issued by him, them, or it, within the State of Arkansas, shall be known, for the purposes of this act, as a domestic investment company. Every such person, corporation, copartnership or association a resident of or organized in any other State, Territory or Government, shall be.known, for the purposes'of this act, as a foreign investment company. Crawford & Moses \u2019 Digest.\nThe section defining \u201cdealer\u201d is as follows:\n\u201cSection 758. Any person, firm, copartnership, corporation or association, whether domestic or foreign, not the issuer, who shall, in this State, sell or offer for sale any of the stocks, bonds or other securities issued by any foreign or domestic investment company, except the securities specifically exempted in this act, or who shall, by advertisement or otherwise, profess or engage in the business of selling or offering for sale such securities, shall be deemed to be a \u2018dealer\u2019 in such securities within the meaning of this act, and no dealer within the meaning of this act shall sell or offer for sale any such securities, or profess the business of selling or offering for sale such securities, unless and until he shall have filed a list of the same in the office of the Bank Commissioner, as in this act, provided. The term \u2018dealer\u2019 shall not include an owner, nor issuer, of such securities^ so owned by him, -when such sale is not made in the course of continued and successive transactions- of a similar nature, nor one who, in a trust capacity created by law, lawfully sells any securities embraced within such trust.\u201d Id.\nThe reason stated by the Bank Commissioner in refusing to grant a license to appellant is in direct conflict with the decision of this court in the recent case of Betts v. Hackathorn, 159 Ark. 621. We held that the trustees under a common-law trust -may do business in this State under general statutes other than those regulating limited partnerships and corporations. Appellant\u2019s application was, however, presented to the Bank Commissioner and denied before our decision on this subject.\nThe section of the statute defining \u201cinvestment companies\u201d seems to embrace individuals and ordinary copartnerships as well as corporations and limited partnerships, but we need not undertake to decide now the extent of this statutory definition, for the reason that the securities sought to be sold by appellant in his application to the Bank Oommmissioner fell within our decision in the case cited above.\nWe are of the opinion that the chancery court erred in refusing* to grant relief against the wrongful refusal of the Commissioner to issue the license. This decision, however, does not reach to the question of the merits of the case in determining the value and bona fides of the securities offered by appellant, which can be inquired into by the Railroad Commission on renewal of the application.\nThe decree of the court is therefore reversed, and the cause remanded with directions to enter a decree in favor of appellant, declaring* his right to receive license upon proving to the Railroad Commission the value and bona fides of his securities, in accordance with the statute. It is so ordered.", "type": "majority", "author": "McCulloch, C. J." } ], "attorneys": [ "Horace Chamberlin, for appellant.", "Gordon \u00e9 Combs, for appellee." ], "corrections": "", "head_matter": "Coleman v. McKee.\nOpinion delivered January 28, 1924.\nLicenses \u2014 authority op dealer to sell stock op common-law trust. \u2014Under Crawford & Moses\u2019 Dig., \u00a7 750 et seq. and Acts 1923, p. 694, requiring licenses for the sale of stock of an \u201cinvestment company\u201d by a \u201cdealer,\u201d the Bank Commissioner improperly refused a dealer\u2019s license to sell stock in a common-law trust, under the ground that the laws of the State did not authorize such an association.\nAppeal from Pulaski Chancery Court; John E. Martineau, Chancellor;\nreversed.\nHorace Chamberlin, for appellant.\nThe instrument under consideration here created a trust, and its existence as a legal entity is not prohibited by the laws of the State. Appellant\u2019s application for a dealer\u2019s license was made in conformity with, the statute, C. & M. Digest, \u00a7\u00a7 750-771. Section 751, Id., specifically recognizes the existence of a trust, and names the person acting therefor as an investment company, if he shall himself, or through others, desire to sell, in this State, stocks issued by him. Appellee and his successor in office should be required to hear appellant upon the merits of his application.\nGordon \u00e9 Combs, for appellee.\nA company operating under a declaration of trust has no legal existence in this State, is not a legal entity, and cannot issue anything of value. 113 Pac. 447; 19 Id. 268; Ann. Cas. 1.912-B, 1344; 99 Pac. 109; 181 N. W. 102, 12 A. L. R. 1060; 20 R. C. L. 882; Id. 912; 1 Purdy\u2019s Beach on Corporations, 162; 3 Id. 1.397; 20 R. C. L. 1061; 10 Wall. 566, 19 L. ed. 1029; 20 R. C. L. 808; 203 Mass. 311; 133 A. S. R. 296; 60 N. H. 294; 49 Am. Rep. 313." }, "file_name": "0090-01", "first_page_order": 114, "last_page_order": 118 }