The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1922-07-14
STATE BLUE SKY
LAW HELD INVALID
MEASURE Is NULLIFIED BY
s SUPREME COURT
DECISION MADE TODAY
Tribunal Holds Statute Cannot
Be Extended To Include
Cases Omitted
ASSOCIATED Press Dispatch. ]

st. Paul, July 7-Minnesota's
blue sky law was virtually nullified
by a decision handed down by the
state supreme court today lold-
ing that the state blue sky law
does not prohibit a person who is
the absolute owner or stock issues
by company which does not en-
gage in the business within the
state of selling its stock or secur-
ity, from selling such stock.
The courts decision was made in
the case of Walter ]. Gutterson of
New York against members Of the
State Securities Commission Who
sought TO prevent him from dis
posing in Minnesota of 5000 shares
of stock of the New England Ger
cal company. ,
The securities commission held
that the blue sky" law prohibited
Gutterson from selling the stock
without the APPROVAL of the commits
sion and that he must defray the
cost of investigating the affairs
approval could be given. Gutterson
brought action in the Hennepin
county district court p to adjoin the
members of the commission from
interfering with the sale of the
stock. The case was dismissed and
he applied to the supreme court.
The decision clears the "blue
sky statute to be a penal one
which cannot be extended by the
courts to include cases omitted by
the legislature.
Now Up To Legislature
ITS up to the state legislature.
we might as well close up shop"
was the statement made at the
commissions office today following
the decision.
The courts decision, as inter-
preted by attorneys at the capitol,
removes tae securities commission
from any Jurisdiction over the
stock, bonds or security of corpor-
atoms outside Minnesota, who have
in no way endeavored to sell their
stock within this state. 1t also re-
moves any one trying to sell such
stock from the class Of dealers, and
the stock may be sold without in
reference by the commission.
The attorneys declare that as thi
The attorneys declare that as this
is in fact the real purpose of any
blue sky law, the Minnesota stat
ute is practically wiped from the
books and only further action by
the legislature can give Minnesota
investors the protection intended
by blue sky legislation.
Statue Plain and Explicit d..
The supreme court held that the
New England Cereal company is
Connecticut corporation, which has
never sold or offered for sale with
in the state of Minnesota any of its
stock, bonds or other securities,
and that the blue sky law does not
apply to such company, nor to a
person who merely sells the stock
in such a company which he has
purchased outright and has paid for
in full. -.
"The statute in question, is plain
and explicit" the supreme court
says. I'm unmistakable language.
the legislature has pointed out those
statute is too limited in it's scope
to accomplish the purpose intended,
the remedy must come from the leg
islature. Only the legislative power
can make acts criminal which are
lawful until declared criminal. The
courts cannot extend penal statutes
beyond the limit fixed by the leg1s
lature."
The attorney generals office,
which handles the case for the Sc
curities commission, today estimat-
ed that the supreme courts decision
would eliminate 80 percent of the
commissions effectiveness. 1t was
suggested that a warning should he
issued to the public. that the gates
are omen"