{ "id": 3374135, "name": "The People of the State of Illinois, Defendant in Error, v. Charles W. Gillett, Plaintiff in Error", "name_abbreviation": "People v. Gillett", "decision_date": "1926-12-29", "docket_number": "Gen. No. 30,819", "first_page": "41", "last_page": "54", "citations": [ { "type": "official", "cite": "243 Ill. App. 41" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "237 Ill. App. 117", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5509559 ], "opinion_index": 0, "case_paths": [ "/ill-app/237/0117-01" ] }, { "cite": "229 Ill. App. 616", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3079104 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ill-app/229/0616-01" ] }, { "cite": "82 Pa. St. 472", "category": "reporters:state", "reporter": "Pa.", "case_ids": [ 1047944 ], "opinion_index": 0, "case_paths": [ "/pa/82/0472-01" ] }, { "cite": "21 Tex. 656", "category": "reporters:state", "reporter": "Tex.", "case_ids": [ 2119012 ], "opinion_index": 0, "case_paths": [ "/tex/21/0656-01" ] } ], "analysis": { "cardinality": 877, "char_count": 28093, "ocr_confidence": 0.506, "pagerank": { "raw": 7.474140541606369e-08, "percentile": 0.4453564667283691 }, "sha256": "d35dd42978a2cd8a982e4aaa358ba1c8c732e76de70736927a132fecf3e5c066", "simhash": "1:8a56d05b60c36b0b", "word_count": 4876 }, "last_updated": "2023-07-14T16:40:43.470699+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "The People of the State of Illinois, Defendant in Error, v. Charles W. Gillett, Plaintiff in Error." ], "opinions": [ { "text": "Mr. Justice O\u2019Connor\ndelivered the opinion of the court.\nOn December 20, 1924, two informations were filed in the municipal court of Chicago, charging the defendant with a violation of the Illinois Securities Law [Cahill\u2019s St. ch. 32, [254 et seq.], a jury was waived, the two causes submitted to the court and, after hearing, the defendant was found guilty as charged and a fine of $5,000 was imposed in each case.\nThe information in the instant case contains three counts: The first count alleges that the defendant \u201cbeing an agent, solicitor or broker of a certain corporation to-wit: Midland Power Company or one Adam F. Weckler,\u201d unlawfully offered to sell to one G-odding, Class \u201cD\u201d securities as defined by the Illinois Securities Law and that the issuer of such securities had not filed in the office of the secretary of State the statements and documents required by the statute; that the securities so offered for sale were 7 per cent gold bonds of the face value of $15,000 of the Midland Power Company. The second and third counts are the same, except that in the second count the defendant is charged with unlawfully selling the securities and in the third count with unlawfully authorizing, aiding or assisting in the sale of the securities.\nThe defendant contends that his motion to quash the information should have been sustained for the reason that each count was bad for duplicity, in that each charged the defendant with the commission of two distinct offenses. In support of this it is said that each count of the information charges the defendant with being the agent, solicitor or broker of the Midland Power Company, the issuer of the bonds or that the defendant was the agent, solicitor or broker of Weckler, the owner of the bonds, and that, under the statute then in force, the penalty for the sale of securities by one as agent or broker for the issuer of such securities was more severe and different than the penalty where the sale was made by the agent or broker for the owner of securities when the owner was not the issuer of them. It is true that the penalties provided by the statute are as the defendant contends. These sections are 29 and 30, Cahill\u2019s 1923 St. ch. 32, H 29, 30, p. 925.\nIn support of the contention that each count of the information is bad for duplicity, counsel for the defendant cite State v. Dorsett, 21 Tex. 656; Hutchison v. Commonwealth, 82 Pa. St. 472, and other eases. In the Dorsett case, the defendant was charged with \u201cwilfully and negligently permitting one to escape.\u201d The court said that \u201cVoluntary and negligent escapes are made by the Statute distinct offenses, created by different sections, annexing different punishments. The former may be a felony. The latter can only be a misdemeanor. The indictment charges that the defendant did wilfully and negligently permit the escape.\u201d And it was held that since the indictment charged two offenses, it was bad for duplicity.\nIn the Hutchison case the defendant was charged with embezzlement as \u201ctrustee and agent.\u201d And it was held that embezzlement by a trustee was one offense and embezzlement by an agent was another offense, and indictable under a different section of the code, and the court there held that the indictment was bad for duplicity. But in the instant case the defendant is not charged with two offenses. He is charged with selling or offering to sell, etc., securities which are designated by the statute as Class \u201cD\u201d securities without the issuer of such securities having filed in the office of the secretary of State certain statements and documents required by the act. This is the charge in the information and the allegation as to the ownership of the bonds which were sold, or offered f\u00f3r sale, by the defendant was unnecessary and may be treated as surplusage. Durham v. People, 4 Scam. (Ill.) 172. The information is not bad for duplicity.\nWe think the evidence discloses that the following facts are shown beyond a reasonable doubt: That the defendant was a broker conducting his business in Chicago and had been so doing for about 30 years; that one Allen was employed by him in making sales and exchanges of securities; that in January, 1924, one Weckler went to the defendant\u2019s place of business with a view of borrowing money on bonds issued by the Midland Power Company, a corporation organized under the laws of the State of Delaware, and which corporation was conducting business in the State of Minnesota, and had issued 7 per cent gold bonds of the face value of $65,000; that Allen told Weckler that the defendant would not loan money on the bonds, but that Weckler might obtain such a loan from Byllesby & Company of Chicago; that Weckler then went to Byllesby & Company, having been introduced by Allen, and after a few days obtained a loan from that company in the sum of $15,000. Weckler gave his note for that amount, dated January 19, 1924, due 90 days after date, and the bonds were put up as collateral security to the note. It further appears that prior to that time Weckler had borrowed $6,500 from the State Bank of Chicago, putting up the bonds as collateral to secure the payment of that sum; that when Weckler borrowed the money from Byllesby & Company, the State Bank was paid and the bonds given to Byllesby & Company. On February 7, 1924, the defendant loaned Weckler $19,000. Out of this sum the Byllesby loan was paid and the bonds placed by Weckler with the defendant as collateral security for the $19,000. Weckler authorized the defendant to sell the bonds and Allen shortly thereafter went to see Jared W. Fox and Charles B. Codding, who were engaged in business on South Water Street under the firm name of Fox & Codding, with a view of disposing of the bonds. Allen had some time prior to this sold certain stocks to Fox and to Codding. After Allen had presented the matter to Fox and Codding, it was finally agreed that they would give these stocks in exchange for some bonds. Weckler authorized the exchange to be made and shortly thereafter bonds of the face value of $15,000 were given by the defendant to Fox in exchange for certain shares of stock which Fox owned and at the same time a similar number of bonds were given to Codding for stock which he owned. Shortly after the exchange was made, Cillett, the defendant, upon authority from Weckler, sold the stock which he had received from Fox and Godding, applied the proceeds thereof in payment of his loan to Weckler, gave the balance to Weckler and delivered to him the balance of the bonds. This was done February 14, 1924.\nIt further appears from the evidence that some time thereafter a receiver was appointed by a Minnesota court for the Midland Power Company and an ancillary receiver was appointed by the superior court of Cook county. The evidence further shows that the Midland Power Company did not file, in the office of the secretary of State of Illinois, the documents and statements required by the Illinois Securities Act [Cahill\u2019s St. ch. 32, H 254 et seq.]. The evidence further shows that the Midland Power Company was operating an electric light plant at Fosston, Minnesota; that it authorized the issuance of the $65,000 bonds and to secure the payment of them executed its trust deed or mortgage conveying \u201cAll right, title and interest of the company in a lease agreement and franchise to supply electric energy for lighting, heating and power purposes within th.e corporate limits of Fosston, Minnesota, entered into by and between L. M. Bartlett of Minneapolis, Minnesota, and the village of Fosston, Minnesota, under date of December 6th, 1920 and continuing in force and effect until December 6th, 1940, said agreement and franchise having been transferred by assignment to the Midland Power Company by said L. M. Bartlett under date of March 19, 1923.\u201d Also all its right, title and interest under a written contract with the Bed Biver Power Company; \u201call structures, buildings, power stations, substations, distribution systems, transmission lines * * * together with all apparatus, fixtures, equipment and machinery, including dynamos, generators, wires, cables, poles,\u201d and all the other property, real or personal, tangible or intangible, then owned or after acquired by the company. No evidence was offered either as to the financial history of the Midland Power Company or as to its -assets or liabilities, its solvency or insolvency, or as to the character of the bonds in question. The evidence also shows that the defendant in February, 1924, sold one bond of the face value of $1,000 of the Midland Power Company to one Magnuson.\nThe defendant contends that he did not offer to sell nor did he assist in the selling of any of the bonds in question; that the evidence shows that the bonds were exchdnged for stock of Fox and Codding which was but a single transaction, and that being but a single transaction, it was exempt as an isolated transaction under the provisions of section 5 of the act [Cahill\u2019s St. ch. 32, [258]. In support of this it is said that the proof shows that the defendant never talked with Fox or Codding about the transaction, but that all the dealings they had were with Allen personally, who had sold securities to them over a period of years when he was not representing the defendant but other parties. We think it would serve no useful purpose to discuss the evidence in detail on this point for we are clearly of the opinion that whatever Allen did in the matter was as a representative of the defendant. The' evidence shows Allen was employed by the defendant to sell securities on a commission basis and that defendant received part of the commission for disposing of the bonds to Fox and Codding. Nor do we think there is any merit in the contention that the transaction with Fox and Codding did not constitute a sale within the meaning of the act. By section 2 of the act [Cahill\u2019s St. ch. 32, [[ 255] it is provided that \u201cThe term \u2018sale\u2019 means and includes contracts and agreements whereby securities are sold, traded or exchanged for money, property or other thing of value.\u201d In People v. Revesz, 229 Ill. App. 616, we held that the exchange of promissory notes for certificates of stock was a sale within the meaning of the Illinois Securities Law.\nWe are also of the opinion that the evidence shows there were three separate and distinct sales of the bonds made by the defendant. Bonds of the par value of $15,000 were sold by the defendant\u2019s representative to Fox in exchange of stock owned by Fox; that bonds of the face value of $15,000 were likewise sold to God-ding in exchange for stock owned by Godding and although these two exchanges took place at the same time, they were two separate and distinct transactions. The evidence also shows that the defendant sold one of the bonds of the face value of $1,000 to Magnuson, although after this sale it appears the evidence shows Magnuson who had been a customer of the defendant became dissatisfied and returned the bond to the defendant. It follows that section 5 [Cahill\u2019s St. ch. 32, [f 258], which applies to an isolated sale, even if it could be applied to this case under any circumstances, is not applicable, there being three separate and distinct sales.\nBut the defendant further contends that the judgment is wrong and should be reversed because there is no proof in the record that would show beyond a reasonable doubt that the bonds of the Midland Power Company were Class \u201cD\u201d securities within the purview of the act as alleged in the information. We think this contention must be sustained.\nThe act divides securities into four classes: Section 3 [Cahill\u2019s St. ch. 32, [[256] provides:\n\u201c (1) Securities, the inherent qualities of which assure their sale and disposition without the perpetration of fraud, which shall be known as securities in Class \u2018A\u2019;\n\u201c(2) Securities, the inherent qualities of which, or in the nature of one or both parties to the sale thereof, assure their sale and disposition without the perpetration of fraud, which shall be known as securities in Class \u2018B\u2019;\n\u201c (3) Securities based on established income which shall be known as securities in Class \u2018C\u2019;\n\u201c(4) Securities based on prospective income, which shall be known as securities in Class \u2018D.\u2019 \u201d Section 4 [Cahill\u2019s St. ch. 32, [[ 257] of the act provides in more detail what may be included in Class \u201cA\u201d securities, among which in paragraph 7 are notes or bonds secured by a mortgage lien upon real estate or leasehold (other than oil, gas, and mining leases) \u201cin any state or territory of the United States or in the Dominion of Canada: (a) when the mortgage is a first mortgage on real estate and when the aggregate face value of such notes or bonds * * * does not exceed the fair market cash value of such real estate * # * provided, that in case of a junior mortgage lien on real estate or a mortgage lien on a leasehold, the mortgage and notes or bonds secured thereby * * * shall each bear across the face and text thereof a legend in red letters not less than one-half inch in height, stating (1) that the mortgage is a junior mortgage, if that be the case, and (2) that the mortgage is on a leasehold, if that be the case.\u201d\nSections 5 and 6 [Cahill\u2019s St. ch. 32, ][[[ 258, 259] provide in some detail what shall constitute Class \u201cB\u201d and \u201cC\u201d securities, respectively. Section 8 of the act [Cahill\u2019s St. ch. 32, [j261] provides: \u201cAll securities other than those falling within Class \u2018A\u2019, \u2018B\u2019 and \u2018C\u2019, respectively, shall be known as securities in Class \u2018D\u2019.\u201d And by sections 7 and 9 [Cahill\u2019s St. ch. 32, [f1[ 260, 262], it is provided that before securities in Class \u201cC\u201d or Class \u201cD\u201d are sold, a statement giving certain information in reference to the company whose securities it is proposed to sell, must be filed in the office of the secretary of State.\nCounsel for the People in their brief contend, as we understand it, that since the People proved that no statement had been filed by the Midland Power Company in the office of the secretary of State as provided by sections 7 and 9 of the act, which have to do with Class \u201cC\u201d and \u201cD\u201d securities, they thus established the fact that the bonds of the Midland Power Company in question were not Class \u201cC.\u201d In this connection counsel say that the People have proved that the bonds in question were not Class \u201cC\u201d securities, because \u201cbefore any security may become a Class \u2018C\u2019 security the statements and documents required by section 7 must not only have actually been presented to the Secretary of State for approval but must have been stamped \u2018filed\u2019 by that official in the manner prescribed by section 2 of the Act.\u201d It is obvious that this argument is unsound. The filing of the statement required by section 7 and section 9 of the act in the office of the secretary of State has no tendency to prove or disprove whether any securities belong to one class or the other. It is only when the facts show that the securities fall within Class \u201cC\u201d or \u201cD\u201d that the provisions of sections 7 and 9 [Cahill\u2019s St. ch. 32, TfTI 260, 262] are applicable and if the evidence discloses that the securities sold or offered to be sold belong to Class \u201cC\u201d or Class \u201cD,\u201d then to prove a violation of the act it.is necessary to prove that the statements required by sections 7 and 9 [Cahill\u2019s St. ch. 32, ][[[ 260, 262] have not been filed.\nIn the Revess case we pointed out that where there was no evidence as to the history of the company whose securities had been sold, and no evidence as to its assets or liabilities that the proof failed to show that the securities were Class \u201cD\u201d securities. And we there said (p. 627): \u201cWe may be justified in strongly suspecting that they belong to Class \u201cD,\u201d but that is not enough; that is not proof beyond a reasonable doubt of a material fact.\u201d So in the instant case we may be justified in strongly suspecting that the bonds in question belong to Class \u201cD,\u201d considering the fact that they were issued by the Midland Power Company to raise money and that apparent difficulty was had in disposing of them, but this does not warrant us in holding that, beyond a reasonable doubt, the stock belonged to Class \u201cD.\u201d We think there is no merit in the contention of the People that the burden was upon the defendant to prove that the bonds in question belonged to either Class \u201cA,\u201d \u201cB\u201d or \u201cC.\u201d The burden was upon the People to prove beyond a reasonable doubt that they were not in either of those classes, and thereby establish that the securities in question belonged to Class \u201cD\u201d as alleged in the information and having failed to make such proof, the judgment is erroneous. People v. Revesz, supra; Piot v. Chartrand, 237 Ill. App. 117.\nHowever, the People also contend that there is other proof in the record showing conclusively that these bonds were not Class \u201cC\u201d securities. The record does show that the property of the Midland Power Company \u201cconsists of a power line and equipment\u201d extending from Fosston to Terrebonne, Minnesota, and that the company began the construction of that power line \u201cabout July 15, 1923,\u201d and being in need of funds for that purpose negotiated for the sale of bonds secured by a first mortgage on its property. The bonds here involved were part of that issue. It thus appears affirmatively that these bonds did not belong to Class \u201cC\u201d for such proof shows that they were not \u201cissued by a person, corporation, firm, trust, partnership or association owning a property, business or industry which has been in continuous operation not less than two years and which has shown during a period of not less than two years prior to the filing of the statement\u201d provided for in the statute \u201caverage annual net profits,\u201d as specified in the statute [Cahill\u2019s St. ch. 32, H 259], because the sales involved in this case took place on February 7,1924, less than seven months after the company began the construction of its power line.\nWhile we are of the opinion that the proof just referred to made out a case in behalf of the People, to the effect that these securities did not belong to Class \u201cC,\u201d and while it was apparent from the face of them that they did not belong to Class \u201cB\u201d as defined in section 5 of the act [Cahill\u2019s St. ch. 32, f\u00ed 258], we are further of the opinion that the People failed to show that the securities did not belong to Class \u201cA.\u201d The decree entered in the circuit court of Cook county, in a suit by the ancillary receiver against Weckler and the Power Company, found that the property of the company consisted of \u201ca power plant and equipment.\u201d The trust deed executed by the company to secure these bonds conveyed, with other property, \u201call structures, buildings, power stations, sub-stations, distribution systems, transmission lines, farm line branches and service lines, * * * and all other property and appurtenances used in connection therewith, of any nature whatsoever, in which the company has any right, title and.interest,\u201d and also \u201call other property of a nature to that hereinabove described, real or personal, * * * now owned or that may be hereafter acquired by the company.\u201d In the course of the provisions contained in that deed, the company covenanted that \u201cit is well seized of all the tangible property hereby conveyed, both real and personal.\u201d With such a showing in the record it would seem clear that the Midland Power Company was seized of some real estate but how much or of what value the record does not show. From all that appears in the record it may well be that its real estate conveyed by the deed above referred to, and thus made security for these bonds, had a value equal to or greater than the aggregate value of the bonds issued. In that case the bonds might qualify as Class \u201cA\u201d securities. If that were true the bonds could not belong to Class \u201cD\u201d as alleged in the complaint. Such being the situation, the People failed to prove such facts, as, in our opinion, were necessary to establish the offense charged.\nThe People further contend that the evidence discloses that the bonds were Class \u201cD\u201d securities within the purview of the act because the evidence shows that the bonds in question were secured by a mortgage upon a leasehold interest, and since they did not have upon their face the legend, in red letters, as required by paragraph 7 of section 4 of the act [Cahill\u2019s St. ch. 32, 257, subd. 7], they were not Class \u201cA,\u201d \u201cB\u201d or \u201cC\u201d securities. With this contention we are unable to agree. Paragraph 7 of section 4 (above quoted) provides that where the securities are bonds, the payment of which is secured by a mortgage lien on a leasehold, the mortgage and bonds secured thereby shall bear across the face and text thereof a legend in red letters not less than one-half inch in height, stating that the mortgage is on a leasehold. We think the meaning of this provision is that where a mortgage given to secure the payment of bonds is on a leasehold interest of real estate, that the bonds and mortgage shall bear the legend mentioned. But that this does not apply where the leasehold covered by the mortgage is not a leasehold of real estate. In the instant case we think it appears from the mortgage given to secure the bonds in question that it does not cover a leasehold of real estate or a leasehold of any other kind because the trust deed provided that part of the property conveyed is a \u201clease agreement and franchise\u201d to supply electric energy, which agreement and franchise was entered into between Bartlett and the village of Fosston. This mortgage we think does not come within the purview of paragraph 7 of section 4 above quoted, therefore the statute did not require that the bonds and trust deed in question bear the legend mentioned in the act.\nComplaint is made that the amount of the fine imposed against the defendant is so excessive under the circumstances of the case as to warrant a reversal of the judgment on that ground. Section 29 of the Illinois Securities Law [Cahill\u2019s St. ch. 32, [282] provides for the penalty in the instant case. By that section it is provided that where an agent, solicitor or broker sells securities of Class \u201cD\u201d without the provisions of the act having been complied with, he shall be deemed guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not less than one hundred dollars ($100) and not more than five thousand dollars ($5,000) for the first offense. In the instant case the penalty imposed was the maximum provided by the statute. The evidence shows that before the defendant sold the bonds in question application was made to him by Weckler to loan him money with the bonds as collateral. This the defendant refused to do. The evidence further shows that the State Bank of Chicago had loaned Weckler $6,500, taking the $65,000 of bonds as collateral security; that afterwards upon some investigation Byllesby & Company loaned Weckler, on these bonds, $15,000, and after this the defendant loaned Weckler $19,000 on them. This indicates that the defendant had considerable faith in the value of the bonds, and we think this fact should have been taken into consideration by the court in fixing the penalty in the instant case, although it has been held that where the punishment imposed is within the limits prescribed by the statute, the judgment ought not to be reversed, because the amount of the penalty is committed to the discretion of the trial judge. But we think that in the instant case the defendant ought not to have been given the maximum penalty when all of the evidence is considered even if it had been such as to warrant a finding of guilty.\nFor the reason that the People failed to prove that the securities which the defendant sold were Class \u201cD\u201d securities, the judgment of the municipal court of Chicago is reversed and the cause remanded.\nReversed and remanded.\nTaylor, P. J., and Thomson, J., concur.", "type": "majority", "author": "Mr. Justice O\u2019Connor" } ], "attorneys": [ "Brundage, Landon, Holt & Boord and William Friedman, for plaintiff in error; Floyd E. Britton, of counsel.", "Robert E. Crowe, State\u2019s Attorney, for defendant in error; Edward H. Taylor, Edward E. Wilson and Mortimer C. Grover, of counsel." ], "corrections": "", "head_matter": "The People of the State of Illinois, Defendant in Error, v. Charles W. Gillett, Plaintiff in Error.\nGen. No. 30,819.\n1. Corporations \u2014 when information charging violation of Securities Law not bad for duplicity. An information against a broker, under Cahill\u2019s St. eh. 32, If 282, for sale of Class D securities contrary to law, was not bad for duplicity as charging that defendant was acting both for the issuing maker and for the bond owner and hence an offense under paragraph 283 also, since the allegations as to ownership may be disregarded as surplusage.\n2. Corporations \u2014 responsibility for illegal sale of securities through agent. A conviction under Cahill\u2019s St. eh. 32, 1f 28.2, against a broker for the sale of Class D securities contrary to law, will be sustained though the evidence showed the one actually making the sale was the broker\u2019s agent.\n3. Corporations \u2014 exchange of securities as a violation of the Securities Act. The exchange of securities issued without complying with the Blue Sky Law for other securities constitutes a \u201csale\u201d within Cahill\u2019s St. eh. 32, If 282, imposing a penalty therefor, since, under paragraph 255, the word \u201csale\u201d includes \u201cexchange.\u201d\n4. Corporations \u2014 what is not an isolated transaction within the Securities Law. On a prosecution under Cahill\u2019s St. ch. 32, If 282, against a broker for sale of Class D securities contrary to law, the transaction is not within the exemption of paragraph 258 as an isolated transaction when the evidence showed two exchanges, and a sale for cash afterwards rescinded.\n5. Corporations \u2014 necessity for showing class of securities in prosecution under Securities Law. In a prosecution for the sale of securities in violation of the Securities Act, it is only where the facts show that the securities fall within Class C or D that the provisions of sections 7 and 9, Cahill\u2019s St. eh. 32, 1f*|f 260, 262, are applicable, and if the evidence shows that the securities sold belong to Class C or D, to prove a violation it is essential to prove that the statements required by these sections have not been filed.\n6. Corporations \u2014 burden of proof i/n prosecution under Securities Law. Under Cahill\u2019s St. eh. 32, f[ 282, the burden is on the State, in a prosecution of a broker for sale of Class D securities contrary to law, to prove beyond a reasonable doubt that the securities were in the class described in paragraph 256, subd. 4, and paragraph 261, as Class D securities.\n7. Corporations \u2014 when classification' of securities as Class D not established. In a prosecution for selling Class D securities issued without complying with the Securities Law, the classification of the securities as Glass D is not established beyond a reasonable doubt where, under the evidence they might appropriately be within the classification, hence where the evidence shows that they were secured in part at least by real estate and nothing is shown as to the value of such realty, they cannot be regarded as Class D securities, by a process of eliminating the other classifications.\n8. Corporations \u2014 when securities not required to hear the legend as to leaseholds. Under Cahill\u2019s St. eh. 32, K257 subd. 7, bonds secured by a \"lease agreement and franchise,\u201d not being a leasehold on realty, are not required to bear the legend required for leaseholds on realty so that lack thereof does not entitle the State to claim that such bonds are Class D securities in a prosecution of a broker under paragraph 282 for unlawful sale of bonds.\n9. Corporations \u2014 when fine for violation of Seeurities Law excessive. A fine of $5,000, imposed on a broker prosecuted under Ca-hill\u2019s St. ch. 32, f 282, for unlawful sale of bonds, would be excessive in view of his proved belief in their value.\nError by defendant to the Municipal Court of Chicago; the Hon. Arnold Heap, Judge, presiding. Heard in the third division of this court for the first district at the March term, 1926.\nReversed and remanded.\nOpinion filed December 29, 1926.\nBrundage, Landon, Holt & Boord and William Friedman, for plaintiff in error; Floyd E. Britton, of counsel.\nRobert E. Crowe, State\u2019s Attorney, for defendant in error; Edward H. Taylor, Edward E. Wilson and Mortimer C. Grover, of counsel." }, "file_name": "0041-01", "first_page_order": 73, "last_page_order": 86 }