625. 

OFFICE OF THE ATTORNEY GENERAL. OF TEXAS 

AUSTlN 

licixorable Villlau~ J. Lavson 

seore* OS 8lxbt.e 

Au&~ Tesas 

Attentionr Hr. Frank D:Wear 

Dear slrt 

opinion No. O-3937 

Re: Do any 0f the lmit~ents OS 

R6llen's lfational Club oonetltute 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 

Dement thit one Hellen of Hoaston, lexasb is 

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 RationdWub 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@erahip 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 
E6?+or6blq Yilll~m J. Y,,a~86n, page 2 

tenth progr688lon vould reoelve 504 from eaoh or 

the 1,024 member8 who would then be 6n the list, 

or an amount of- 4512. 

‘~II eOIIMOtiOII vith th0 OptIMtiOI8 Or 8Wh 

plan H6ll6n*8 Olub we8 6 pr6limlnaq applf6atlon, 

oopy or 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- 

- quested an opinion fron thla Department 88 to vhether - 

any or there lmstrum6nts oon8tltute 8 866tuey vithh 

the meaning 0r the Secmrltles Aot for the purpo80 0r 

mlb mlttlng to the g r a nd jur y l o c mp ~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 

_ 

"Qsatl6menr 

Hourton, Texa6 

.'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 R88ld6nO6 

"Oohtpation 

"Signed 

456-W 

(R-6 f.Xi m 

D-l-3-N” 
Bonorable Hilllam J. Layson, Page f 

%maton, 96X$8, jhly.16, 1941 

"Reo6lved 0r RDWARDBURRHRR 

2412 U6ntvorth Dollars 

Rl!z&Ri'S RATIOHAL 

SPiNSOR'S OOXSSSIOR ORlWT VOUOHRR 

131 

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 

!wE: 

State Readquwters--Hton, Texas 

SAVE 

3.8 the'&OWOM,'(~ 

sntitled to Oai+-;L 

- 4 

f 

w 

to be paid personally oT brfng & Readqwrters, r0r Credit. 

To the Seoretary, State 

NmFp Dlreotor 

RHTmPRIsEs 

Registbl'6d and 

,Spon8or6dbj 

&UlS -88' 

"molti zhi8 @6dit VoWher pressntsd at &mborship~Drive Re8dQ3Wt.W"-Of ROn6n'S ~tiiOnrr1 Olub e&it168 holder Of this Oredit 

rouaher to m&e applioetion ror memberShip Dev6 ?66 by pafing 

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.' 
628 

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 inolude euy ahar6, atook, treasury stook, 8toOk oertlfiOat6 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'lndebtednesa, any form of 00mmerolal paper,' oertiiloate .in 

or under a piit rhu-iog or partioipation agreem6nt, 

oertifloate or any lartrum6nt pepresentlng 8ny interest in or under an oil, gas or mining lease, fee 

or title, or any oertitioato or instrument representlng 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 slmllar 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 or 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 or 

evidence of indebtedness." 

"3eaurlty is an evidenae' of debt or of property, as a bond, stock oertificate or other lnstrument, eta.; a dooument giving the holder the r&at 

to demand and reaelve property not in hla poasesaion.' 
Honorable William J. Lawson, page.5 

"fhe t6Zm 86ouriti88 in it8 broadest 86lISO embr&OeS bonds, 06~ifl~t68 Or StOOk, and other~eviden06 Of debt or Or pro 

44 8. If. 906; 17 Zex. r 

rty. 

3 2) 

@hayer ~8. Wathen, 

“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 or 

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 

or the performan 0r a oontraot, aft a bond ror surety, 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." 

oral 

!Ehe Appellate court8 0r thie std8 have renderd soyAot.' 

oplnlons construing oertain provisions or "The Se0uritles 

3 33 

s 

BOnne Or th88e 01888 are, Atvood vs.'Btate, 121 S. W. (26) 

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; 

llu8e va. State, 132 3. W. (26) 596; Alken vs. State, 128 9. W. 
Eonomble W~lism J. Lavaon, Pq6 6 

(26) US05 Sulta Par Fpvler, 148 S, W. (2d) 249f end Oonser 

VS. Hnncohk, 149 8. If. (2d) 239. After 08l’eiullJ reading 

a686 O&SeS, 96 d0 not think th& ULy Or them f.UVOlVeS the 

QUOSti6Zl OOMidOl’Od’ iJX this OpiaioO. 

lllter owefull~ oonoli9eriug the term “aeOur*k or 

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 

*se6uritler* es that term is defined by ‘Tha, Seouriticrs Aot.’ 

Tr?llBtliig that the ror6golng hlly eu8lrer8 .your ini' 

Your8 very truly 

ATTORRRY 0RRMU.L OF TRXAS 

&Qa~~ 

Ard8llw1ll3ah 

hSSiSt&llt