Court Opinion

ID: 9766759
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:58:05.923152+00
Date Added: 2024-06-11T07:30:25.816942
License: Public Domain

STEPHENSON, Justice
(dissenting).
I would affirm the judgment of the trial court. The plaintiffs both relied upon Subdivision 23 of Article 1995, V.A.C.S., to retain venue in Lubbock County. In my opinion they discharged their burden of alleging and proving their causes of action under Section 33 of The Securities Act, against a foreign corporation, in Lubbock County. I do not find it necessary to pass upon the problems which arise when Subdivision 9 of Article 1995 is considered, as pointed out in the majority opinion.
The majority opinion turns this case upon the failure of Section 33 to specifically mention the word “corporation” in *218providing for civil liability. The basis for this argument is that Section 33 uses the word “person” and the Act does not define the word “person”. It is therefore concluded the word “person” does not include a “corporation” and defendant is home free. From a study of the statutory and case law rules of construction, I do not arrive at that conclusion.
First, as mentioned in the majority opinion, Article 23, V.A.C.S., provides that the word “person,” when used in our statutes, includes a “corporation” unless a different meaning is apparent from the context. Also, Article 10(6), V.A.C.S., under general rules for construction of laws, reads as follows:
“6. In all interpretations, the court shall look diligently for the intention of the Legislature, keeping in view at all times the old law, the evil and the remedy.”
This being a new section, we still look to the evil and the remedy. The evil being the sale of securities in violation of this Act, and the remedy being civil liability on the part of the seller.
Chief Justice Calvert, recently wrote in Southwestern Sav. & L. Ass’n of Houston v. Falkner, 160 Tex. 417, 331 S.W.2d 917, 921 (1960):
“A statute should not be shorn of its effectiveness if its purpose can be achieved by a reasonable interpretation.”
Citing Huntsville Independent School District v. McAdams, 148 Tex. 120, 221 S.W.2d 546 (1949); Haverbekken v. Hale, 109 Tex. 106, 204 S.W. 1162 (1918). To me it is not reasonable to interpret this Act to place a corporation in a preferred position and permit it to sell securities in violation of the Act without the same civil liability imposed upon an individual. This provision of the Act (Section 33) would be shorn of its effectiveness if it be construed to mean civil liability under the Act could be avoided by the mere expediency of incorporation.
In Calvert v. British-American Oil Producing Co., 397 S.W.2d 839, 842 (Tex.Sup., 1965), the Supreme Court said:
“The courts necessarily look diligently for the intention of the Legislature as the intention of the Legislature is the dominant consideration in construing a statute.”
Citing State v. Dyer, 145 Tex. 586, 200 S.W.2d 813 (1947); City of Mason v. West Texas Utilities Co., 150 Tex. 18, 237 S.W.2d 273 (1951).
Again, in Edwards v. Morton, 92 Tex. 152, 46 S.W. 792, 793 (1898), it is written:
“The intention of the legislature in enacting a law is the law itself, and must be enforced when ascertained, although it may not be consistent with the strict letter of the statute. Courts will not follow the letter of a statute when it leads away from the true intent and purpose of the legislature, and to conclusions inconsistent with the general purpose of the act.”
Also, in Texas & N. O. Ry. Co. v. Railroad Commission, 145 Tex. 541, 200 S.W.2d 626, 629 (1947):
“ * * * whenever the legislative purpose is ascertained, the significance of words used may be restricted or enlarged in order to effectuate that purpose and to give the act the meaning which the lawmakers manifestly intended.”
To the same effect is Anderson v. Penix, 138 Tex. 596, 161 S.W.2d 455, 458 (1942):
“This is because of the rule that a statute will not be construed so as to ascribe to the Legislature an intention to do an unjust or an unreasonable thing, if such statute is reasonably susceptible of a construction that will not accomplish *219such a result.” Citing Trimmier v. Carlton, 116 Tex. 572, 296 S.W.2d 1070 (1927).
The same rule is also expressed in these terms in National Surety Corporation v. Ladd, 131 Tex. 295, 115 S.W.2d 600 (1938), in syllabus 10:
“Where the intention of a statute is not clearly expressed or is so inadequately expressed that the court must resort to construction, it is proper to consider the results of any proposed construction, and the court will, if possible, place on the statute a construction which will not result in injustice, inconvenience, unreasonableness, prejudice to public interest, or absurd consequences.”
A reasonable construction of The Securities Act, as a whole, is that its purpose is to regulate the sale of securities so that generally both the securities and the seller of the securities must be registered. It is apparent that the Legislature, in Section 33, intended to provide a specific form of legal remedy so that the amount paid, interest and exemplary damages in some instances may be recovered by the purchaser, when the provisions of the Act are not complied with by the seller. As said by the Supreme Court in Kadane v. Clark, 135 Tex. 496, 143 S.W.2d 197 (1940), this Act “was enacted solely to protect the interests of the public.”
Section 12, together with the entire Act makes it clear that a corporation may sell securities in Texas. Section 13 provides for the means for registration as a dealer, and has specific requirements for a corporation. Section 22 of the Act, on advertising, is good evidence that the Legislature intended to include a “corporation” when it used the term “person.” In Subdivision A, it is provided that it is unlawful for a person to advertise unless such section is complied with. Then, under Subdivision B, it is said:
“(1) If such person, company, dealer, agent or salesman shall have been registered as in this act provided; * * * ”
demonstrating that, even though at the outset of Section 22 only the word “person” was used, later it is written “such person, company, [etc.]” was the meaning intended by the use of the word “person.”
To paraphrase the Ladd Case, supra, I would not place a construction upon Section 33 which would result in an injustice, prejudice to public interest, and absurd consequences. Under Article 23, V.A.C.S.,
I do not conclude that it is apparent from the context of Section 33 that the Legislature did not intend to include a corporation when it used the word “person.” Other cases in which the word “person” has been construed to include a corporation, under Article 23, V.A.C.S., are: State v. Country Club, 173 S.W. 570 (Tex.Civ.App.-Austin, 1914), reversed on other grounds, 110 Tex. 40, 214 S.W. 296 (1919); City of Tahoka v. Jackson, 115 Tex. 89, 276 S.W. 662 (1925); Allison v. Richardson, 171 S.W. 1021 (Tex.Civ.App.-Dallas, 1914), reversed on other grounds, 213 S.W. 252 (Tex.Comm.App., 1919); James N. Tardy Co. v. Tarver, 120 Tex. 591, 39 S.W.2d 848 (1931); Ginther v. Southwest Workover Company, 286 S.W.2d 291 (Tex.Civ.App.-San Antonio, 1955, no writ); City of Corpus Christi v. Atlantic Mills Serv. Corp., 368 S.W.2d 640 (Tex.Civ.App.-San Antonio, 1963, error ref. n.r.e.).
Plaintiffs have discharged their burden by pleading and proving venue should be maintained in Lubbock County under Section 23, Article 1995, V.A.C.S. Plaintiffs plead that defendant had violated the Texas Securities Act by selling securities in Texas which had not been registered. Proof was made that the securities were sold to plaintiffs by defendant’s agent in Lubbock County, and that such securities were not registered. Non-registration was proved in accordance with Section 30 of Article 581-1. Each of the salesmen making the sales complained of testified that they were licensed to sell stock only through defendant, and that they sold stock in Devillier Nuclear Corporation to plaintiffs through solicitation in Lubbock Coun*220ty. McQueen v. Belcher, 366 S.W.2d 670 (Tex.Civ.App.-Amarillo, 1963, no writ).
Defendant’s brief contained no points of error complaining of the action of the trial court on the ground that proof of noncompliance through that use of Section 30 would not overcome defendant’s right to a transfer under the plea of privilege. This matter was raised by supplemental brief at the invitation of Justice Keith at the time of oral argument. This new concept as to proof of a prima facie cause of action in a venue case is set forth at length in the majority opinion in Southwestern Transfer Company v. Slay, 455 S.W.2d 352 (Tex.Civ.App.-Beaumont, 1970, no writ). I dissented in that case, and here again call attention to my contentions in that regard. Assuming, arguendo, that the majority was correct in a “res ipsa loquitur case,” I feel it would still have no application to the present situation. The Legislature, under the Act in Section 30, has specifically provided a method of proving non-compliance. In the eyes of the majority, the Legislature made one fatal mistake, and that was the use of the term “prima facie evidence.” The first part of the paragraph from Section 30 quoted by the majority is as follows :
“In any prosecution, action, suit or proceeding before any of the several courts of this state based upon or arising out of or under the provisions of this Act, j}c * * »
That provision is, without question, broad enough to include a plea of privilege, and plaintiffs were required to do no more than is set forth in Section 30 to prove non-compliance. In my humble opinion, a reasonable construction of the use of the term “prima facie evidence” in Section 30 means that the fact of non-compliance is established by the certificate unless the defendant offers evidence to the contrary to raise a question of fact. This the defendant made no effort to do in the case before us.