                                                                            625.


            OFFICE OF THE ATTORNEY           GENERAL. OF TEXAS
                                    AUSTlN




licixorable
         Villlau~J. Lavson
seore*   OS 8lxbt.e
Au&~   Tesas
Attentionr      Hr. Frank D:Wear
                                       opinion No. O-3937
Dear slrt                          Re: Do any 0f the lmit~ents OS
                                       R6llen's lfationalClub oonetl-
                                        tute a lwourity   vsthltl the
                                        meaning o? the Seouritieehot?
             ..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.inEoueton vhat is lmolfn88 a &lro-ten
     eh83.uunder the name of'Eellent 'RationalClub.
          '2he plan operstee mnething llke the old
     ahainletter raoket exoept that it ia operatdd
     thron#h the-eals of siembershlpetiEellen's Ration-
     dWub    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.peopleieaoh 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 0halIlletter raoket.  Out od esoh mem@er-
     ahip fee of 41.00, 506 goes to the Cltibor promoter
     etnd504 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 otithe list at the time of the
    E6?+or6blq                 page 2
             Yilll~m J. Y,,a~86n,


        tenth progr688lonvould reoelve 504 from eaoh or
        the 1,024 member8who 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 8abnittedherewlthj ordia6ry r6-
        06ipt, OOm Or vhbh i8 iik6Wi8e dUUitt@d, bid
        8poluOi!'8OC~R~BB~COIOredit vouoher, ldliah,6Iitltl68
        t)y&uenb~      top of the li8t to hi8 50+ iror 66oh
                      . A OO~ 0r thin ln8tnrment18 d80
        6n61086d.
              We  Dl8trlot AttorPej 0r li827b       Ootmty h88 re8-
-       quested an opinion fron thla Department       88 to vhether   -
        any or there lmstrum6ntsoon8tltute8 866tuey vithh
        the meaning 0r the SecmrltlesAot for the purpo80 0r
        mlb mlttlng to th e g r a nd ju r y l o c mp ~lnt &sgalEt
        Bellen for 86ulXQJ ueourltle8vlthout 5 1106Ik86~'
              fh8 preliminaryapplloatlon blank, ordimry rooelpt,
    6#&8p6n80rf8 oomml88lonoredlt vou6h6r u88d by.th8 Eellen~8~Ha-,
    tl6nal Qub, photo8tatlooopler 0r rlri6har8 attaahed to your
    aiqta7 m    a8 r0uw8t
                           ‘PRRLnmmY      APPxmATI0H
          _                                      Hourton, Texa6
        "Qsatl6menr
        .'I h6r6With &e  6pplloatianto b6'6dmlttedto 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                    456-W
        "Signed
                  (R-6 f.Xi
                          m
                                                        D-l-3-N”
BonorableHilllam J. Layson,    Page   f




                                %maton,     96X$8, jhly.16,     1941
       "Reo6lved 0r          RDWARDBURRHRR
                             2412 U6ntvorth                   Dollars

                                          Rl!z&Ri'SRATIOHAL


                 SPiNSOR'S OOXSSSIOR ORlWT VOUOHRR
                                                                 131
                              Veo8tlan uwh Bonw Plan
                               RmmH’S HATI-      OmB
                   1.001 lieHelp ?iouWh6n 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            State Readquwters--Hton,     Texas
SAVE              !wE:
                                               3.8the'&OWOM,'(~
                                              sntitled to Oai+-;L f
                                                  - 4    w
                        to be paid personally oT brfng & Read-
  qwrters,    r0r Credit.

To the Seoretary, State          Registbl'6dand
NmFp       Dlreotor              ,Spon8or6dbj
         RHTmPRIsEs
                                 &UlS     -88'
"molti zhi8 @6dit VoWher pressntsd at &mborship~Drive Re8d-
Q3Wt.W"-Of ROn6n'S ~tiiOnrr1Olub e&it168 holder Of this Oredit
rouaher to m&e applioetionror memberShip Dev6 ?66 by pafing
Sw6, signing appllaatlon- bokrg sp6auoredw a m6mb6r &tit188
holder to two oredit 6cumalselOnvouchersrlth their xmme thereon
Vhlah must be used to seoure tvo nev prorpeofAvem6mbers.'
                                                                      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 in-
    olude euy ahar6, atook, treasury stook, 8toOk oertl-
    fiOat6 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'lndebted-
    nesa, any form of 00mmerolal paper,' oertiiloate .in
    or under a piit    rhu-iog or partioipation agreem6nt,
    oertifloate or any lartrum6nt pepresentlng 8ny in-
    terest in or under  an oil, gas or mining lease, fee
    or title, or any oertitioato or instrument represent-         -
    lng or 8eOurOdby 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 slml-
    lar 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
     asnurenoeafor the r6turn or repayment of money or
     evidence of indebtedness."

          "3eaurlty is an evidenae' of debt or of prop-
     erty, as a bond, stock oertificate or other lnstru-
     ment, eta.; a dooument giving the holder the r&at
     to demand and reaelve property not in hla poases-
     aion.'
Honorable William J. Lawson, page.5


         "fhe t6Zm 86ouriti88 in it8 broadest 86lISOem-
    br&OeS bonds, 06~ifl~t68 Or StOOk, and other~evi-
    den06 Of debt or Or pro rty. @hayer ~8. Wathen,
    44 8. If.906; 17 Zex. 3r2)
         “Oenerell~, any r0m 0r *8trm8ibt wed ror
    purpose or rinrnoingend prcaPotingenterpalsos,
    de&lgned.rorlnYe8tment,18 8 SOOilPity    vlthin Stat-
  , tat6authoriringinveetigoti&s by Attorno$+'Oenerrrl
    0r apparent rraud la dale or reauritles."

          liebsterdefines seotiity to be something to be
    giVeri or dspOSitOd.tO&t&k6Oertain 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 asoerteinathe amount Of money due on 'the   '
    performuce of a certaiawork or the fU!nlsh~ or
     certain material is a seourlty in law."
           "The tOEa 86ouTicy SigniiieS~thatvhloh make6
    seoqe or oertalni In its properuse 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
    aooeptatlonthat whloh prevents loss or makes safer
    Dr. Johnson deflms It as anything given as a pledge
    or sstltion.    Dean Svlft uses it as sopongmouaulth
    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,afta bond ror sure-
    ty, a mortgage, the endorsementof a resporislble    m8n
    or 8 pledge. It is that whloh renders 8 matter sure;
    an Instrumentvhioh render8 oertain the performanoe
    of'the aontraat."
          !EheAppellate court8 0r thie std8 have renderd soy-
oral oplnlons construing oertain provisions or "The Se0uritles
Aot.' BOnneOr th88e 01888 are, Atvood vs.'Btate,121 S. W. (26)
3 33 Satlthvs. Fishbaok, 123 3. W. (26) 77l; Eadane va. Olark,
1s3 a. w. (26) 197; Culver vs. Cockburn, 127 9. x. (26) 328;
llu8eva. 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:aaAat' vo do pot
:.   think .th&tBny 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   .yourini'

                                                          Your8 very truly
                                                       ATTORRRY 0RRMU.L OF TRXAS

                                                       &Qa~~
                                                                  Ard8llw1ll3ah
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