Court Opinion

ID: 9735577
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:24:40.932431+00
Date Added: 2024-06-11T18:27:00.105572
License: Public Domain

Dissenting Opinion by
Mr. Justice Musmanno :
It may be that the defendant Edward Mason is an unparagoned swindler with as many financial sins on his head as have been posthumously attributed to Serge Eubenstein. It may be that he' is an imposter of the first water and, from a moral point of view, richly deserves some mundane punishment. I am afraid, however, that in the understandable' desire on the part of the lower court, the Superior Court and the Majority of this Court to' punish a presumed malefactor they are laying down law which will ensnare in the future somé perfectly honorable business men engaged in entirely innocent and legitimate' transactions.
The "superstructure, of Section 22(b) of the Penn..sylvania. Securities Act .is" built on. the' word- “induce,” .. but. “induce” in. itself '.does :.not ■ denote or connóte evil. *315One may induce another to go to dinner, to take a trip, to buy a house, or exchange securities with no evil purpose in mind and with no resulting harm to the person who accepts the dinner, embarks on the journey, purchases the house or exchanges the securities. Inducement is not extortion, it is not deception, it is not fraud. In fact, the whole business world revolves on the axis of inducement. Advertising is inducement, salesmanship is inducement, letter writing is inducement. Remove inducement from current life, and the ■rivers of commerce would shrink, the reservoirs of investment would stagnate, the wheels of industry would rust. In every conference, convention and consultation someone is trying to induce someone else to do something, and so long as the inducement speaks with the lips of honesty and appears on the table of forthright dealing, there can be no wrong. But under this decision almost any meeting between business men on the subject of securities may fall under the shadow of suspicion and the participants may be liable to' prosecution under Section 22(b) of the Securities Act.
If it was the purpose of the Securities Act to absolutely prohibit dealers and salesmen from taking any part in the business of securities unless registered, the Act should have so stated. But it does not so state. Tt merely says that if one engages in the business of inducing others to do certain things not in themselves criminal he will be guilty, of a misdemeanor. ..As I read the record in this case, there is nothing to show that the defendant Mason “engaged in the business of inducing holders of securities to effect-the sale-thereof.” The record shows-.a 'meeting.between. Christian Martin and Edward- Mason-,-repeated on. two...occasions, to.:exchange- securities. ■ How does- this become '.“engaging in business?” Engaging in • business, -means ..holding oneself out to buy, sell;; barter or exchange generally *316with the whole world or with a special clientele — not merely one person.
The record contains no evidence that Christian R. Martin was deceived, overreached or defrauded. As to the first exchange of securities he testified: “Q. That was an even trade, wasn’t it? You traded that stock for that oil stock? A. Certainly. Q. And there was no force used to compel you to do it? A. No. Q. You did it willingly? A. Yes.”
As to the second transaction, he testified: “Q. And you made an even trade for that stock? A. Yes. Q. And there was no force or inducement used to get you to do it? You did it willingly and cheerfully? A. I did it, myself.”
He concluded his testimony as follows: “Q. And that was done under the same circumstances as the other? A. Yes. Q. And you still have those leases? A. Yes. Q. And you are perfectly satisfied with the whole 3 transactions? A. Yes. Q. Now, Mr. Martin, you knew when you did this these were securities from the State of New Mexico, oil leases in the State of New Mexico, they were New Mexico securities? A. Yes.”
The securities given by Martin to Mason were not printed in the record, but the appellee endeavors to show in its brief that the leases which Martin received were inferior in value to the stock which he delivered to Mason in exchange. Thus the appellee says in its brief: “It is submitted that the values of the shares of stock are so readily determinable as matters of common knowledge that this Court could take judicial notice of such values; . . .”
I cannot take judicial knowledge of such values. I do not know what they are. Stock values are not unchangeable. On the contrary, they are as Variable as the weather, as inconsistent as the waves of the sea* as unpredictable as Latin-American politics. To con*317vict a man on so unstable a foundation is to build a policy of law on quicksand.
Tbe section of tlie statute under wbicb this conviction has taken place is a scattershot weapon. While presumably aiming at a specific target it can hit anybody. Today it strikes Mason who may be a wolf in sheep’s clothing. Tomorrow it may hit a real sheep.
Despite some conventional misimpressions in this direction, business men are generally engaged in an honest, honorable calling and should not be hamstrung, badgered and harassed by vague, rambling and indecisive legislation.