                                         No. 84-352
            IN THE SUPREME COURT OF THE STATE OF MONTANA

                                              1985


JOHN L.THIEL and KATHRYN M. THIEL,
husband & wife,
                    Plaintiffs,
      -vs-
TAURUS DRILLING LIMITED 1980-11,
a Colorado limited partnership;
NATHAN J. EMORY; D.A. DAVIDSON &
COMPANY, a Mont. corp.; DONALD E.
METLER; J. JOE MENA; JOHN D. PRUIT;
GAYLE S. HIGBEE; JON MARCHI; JOSEPH
R SOLOMAN; and ROBERT W. PETERSEN,
 .
                    Defendants.


ORIGINAL PROCEEDING:

COUNSEL OF RECORD:
      For Plaintiffs:
           Hendrickson            &   Everson; Jim Ragain argued, Billings,
           Montana

      For Defendants:
            Hooks & Budewitz; Patrick F. Hooks argued, Townsend,
            Montana & * Dorsey & Whitney; Edward J. Pluimer argued,
            Minneapolis, Minnesota (D.A. Davidson, Jon Narchi,
            Robert Peterson)& Steven Bell of Dorsey & Whitney,
            Great Falls, Montana
            Anderson, Brown, Law Firm; Steven J. Harman, Billings,
            Montana
            Richard Vermiere; Head & Moye, Denver, Colorado &
            Hibbs, Sweeney, Colberg & Koessler; Maurice R. Colberg,
            Jr., Billings, Montana (Taurus Drilling, Nathan Emory,
            Donald Metler, J. Joe Mena, John Pruit, Gayle Higbee,
            Joseph Soloman)
      For Amicus Curiae:
           Turner C. Graybill, Great Falls, Montana (Plaintiffs in
           US Dist. Ct. Nos. CV-34-17-GF, CV-84-18-GF, CV-84-19-GF
           & CV-84-20-GF)
           Michael J Mulroney, Helena, Montana (Plaintiffs in 47714,
           47715, 47716 in L & C County Dist. Ct.)
           Thomas F. Dowling, Helena, Montana (Plaintiffs in 50566,
           50534 & CV-82-246-H)
           J. Rim Schulke, Mont. Securities Dept., Helena, Montana
           Crowley Law Firm; G. Dalthorp & P. Habein, Billings,
           Montana & * Charles Wake; Lewis, D'Amato, et al., Los
           Angeles, California (Donald Jackson, Kimble, MacMichael,
           Jackson & Upton)
           Boone, Karlberg & Haddon; Sam E. Haddon, Missoula, Montana
           (Boettcher & Co., Dain Bosworth, Edward Jones & Co., Merrill
           Lynch, Pierce, Fenner & Smith & Piper, Jaffray & Hopwood,
           Inc. )

                                         --
                                         Submitted:    September 4, 1995
                                           Decided :   October 5 , 1985



                     -   - -- -          Clerk
Mr.   J u s t i c e F r e d J . Weber d e l - i v e r e d t h e Opinion of t h e C o u r t .

        The U n i t e d      S t a t e s District             Court       for       the D i s t r i c t    of

Montana h a s c e r t i f i e d t h e f o l l o w i n g q u e s t i o n t o t h i s C o u r t :

        What s t a t u t e o r s t a t u t e s o f l i m i t a t i o n a p p l y t o
        c i v i l a c t i o n s b r o u g h t p u r s u a n t t o § 30-10-307, MCA,
        o f t h e S e c u r i t i e s Act o f Montana?

Based      upon       the    pleadings          in       this     case,        we hold           that     the

8-year       limitation         period          contained           in    §     27-2-202 (1), MCA,

applies.

        On    September            16,    1980,          plaintiffs           John      L.      Thiel     and

Kathryn M.          T h i e l p u r c h a s e d two l i m i t e d p a r t n e r s h i p u n i t s i n

T a u r u s D r i l l i n g L i m i t e d 1980-11,            a Colorado l i m i t e d p a r t n e r -

s h i p o r g a n i z e d t o e x p l o r e and d r i l l f o r o i l and g a s .                      Plain-

tiffs        purchased        the        Taurus          partnership               units        by     paying

$10,000 i n c a s h and p o s t i n g a l e t t e r o f c r e d i t f o r $46,000.

        A p p r o x i m a t e l y 2 y e a r s l a t e r on O c t o b e r 1 5 , 1 9 8 2 , p l a i n -

tiffs      filed      a     complaint         for        rescission           of    their        purchase.

The c o m p l a i n t a l l e g e d i n t e r a l i a t h a t t h e o f f e r and s a l e o f

t h e p a r t n e r s h i p u n i t s v i o l a t e d t h e S e c u r i t i e s A c t o f Montana.

Count I o f t h e c o m p l a i n t a l l e g e d f a i l u r e t o comply w i t h t h e

securities          registration              requirements               of        55 30-10-202           and

-205,        MCA.           Count        I1    alleged           the      making           of        material

misrepresentations                  or        omissions           of       material              fact      in

connection          with      the        sale       of     securities              in   violation          of

5 30-10-301(1),             MCA.     Count I11 a l l e g e d n e g l i g e n c e and b r e a c h

of    fiduciary           duties     by       the    broker         defendants.                  Count     IV

alleged        negligence,               breach          of     contract            and         breach     of

f i d u c i a r y d u t i e s o f t h e non-broker             defendants.

        As    remedies         for       the      statutory            violations            alleged       in

C o u n t s I and I1 o f t h e i r c o m p l a i n t , p l a i n t i f f s c l a i m e d t h a t

t h e y w e r e e n t i t l e d , u n d e r S 30-10-307,                 MCA,      to rescind t h e i r

p u r c h a s e and r e c o v e r t h e c o n s i d e r a t i o n p a i d f o r t h e s e c u r i t y ,

interest        and       attorney        fees.          Defendants           f i l e d a motion t o
dismiss Counts          I and    I1 on the grounds that the                    2-year
statute of limitation in S 27-2-211 (1) (c), MCA, barred claims
based on liabilities created by statute.
      United States District Court Chief Judge Battin held
that the 2-year limitation applied to the securities regis-
tration claim and dismissed Count I of the complaint.                         Defen-
dants     filed     a     motion     for       clarification         or       further
consideration, seeking to have Count I1 dismissed as well.
Plaintiffs        asserted       that     the       8-year      limitation        of
5 27-2-202(1), MCA, applied to both counts.                     They requested
certification of the issue to this Court.
      The federal court certified the question and this Court
heard oral argument on which statute or statutes of limita-
tion apply to actions brought pursuant to 5 30-10-307, MCA,
the civil enforcement provision of the Securities Act of
Montana?
                                          I

      The legislature adopted the Securities Act of Montana in
1961.     Sec. 2, Ch. 251, L. 1961.             The Act contained substan-
tial provisions from the Uniform Securities Act promulgated
by   the Conference of Commissioners on Uniform State Laws.
Some variations were made in order to accommodate the Uniform

Act to situations peculiar to Montana.
      The   original      Securities Act            of Montana       contained     a
5-year     limitation     on    criminal prosecutions and                 a   2-year
limitation    on    private       enforcement        of    civil     liabilities.
Sections 15-2021 (1) and 15-2022 (3), R.C.M.                   1947.      The 1981
Montana     Legislature        extended       the   limitation       on   criminal
prosecutions from 5-years to 8 years after the alleged viola-
tion, or within 1 year after the date the commissioner or
prosecuting       officer       becomes       aware       of   the     violation.
Section 30-10-306 (1), MCA.
     In 1967, the legislature eliminated the 2-year statute
of limitation on civil enforcement of the Act.                  No limitation
period was substituted when the "two (2) years after the
contract of sale" language was deleted from                         $   15-2022 (3),
R.C.M.    1947.    The federal court has asked us to explore the
outer limits of this statutory black hole.
                                         I1
     The judicial function in construing and applying stat-
utes is to effect the intention of the legislature.                              In
determining legislative intent, the Court looks first to the
plain meaning of the words used in the statute.                           If intent
cannot be determined from the content of the statute, we
examine the legislative history.                Dorn v. Bd. of Trust. of
Billings Sch.       Dist.     (Mont. 1983), 661 P.2d            426, 430, 40
St-Rep. 348, 352.
     In    this    case, the       legislature omitted              the    specific
2-year-from-sa le 1imitation without substituting a different
period of limitation.            Thus, the Court's primary tool for
ascertaining legislative intent, i.e., the "plain meaning" of
the words used in the statute, is of no assistance.                        We must
turn to the legislative history.
     In 1967, Representatives James, Nutting and Cox intro-
duced House Bill No. 515, entitled "An Act Amending Section
15-2022, R.C.M.        1947, Relating to Civil Remedies Afforded
Purchasers of Securities Sold in Violation of the Securities
Act of Montana; Providing for a Cause of Action to Be Brought
Within Two (2) Years after Discovery of Violation."                           House
Bill 515 proposed to amend           $    15-2022(3), R.C.M.            as follows:
          ...        No person may sue under this sec-
         tion more- than tw6 (2) years after the -
         e e ~ t r a e t - e 4 - s e 4 e discovery of a violation
         of the ~rovisions of t h i s act                ..   ..
The rest of the language in the bill is identical to that in
the original statute.
     The House Judiciary Committee discussed H.B.              515 on
February 1, 1967.      Committee Minutes sparsely report that:
       HB 515 was discussed. Mrs. James, chief
       sponsor, could not appear. Testifying as
       a proponent was: Harry H. Jones, Invest-
       ment Department, State Auditor's Office,
       Helena, Montana.
          ...   [actions on other bills]
       HB 515:
       --       Hall moved it - -
                              DO PASS, AS AMEND-
       -
       ED. which amendment would s t z k e the
       provision of actions having to be brought
       within 2 years and the one making the
       bill  effective immediately, and      the
       motion carried. Hall also moved that the
       amendment be adopted, which also carried.
     Although the Committee Minutes indicate that Harry Jones
of the State Auditor's Office spoke as a proponent of the

bill, there is no evidence as to what Mr. Jones said.          No one
spoke in opposition.    There was no record why Rep. Hall moved
to strike the "2 years from discovery" limitation or why the
original "2 years from sale" limitation was deleted.
     House Bill 515 passed both houses in this amended form
and was signed into law by the Governor in 1967.          The current
civil liabilities provision,     $   30-1.0-307, MCA, contains no
time limitation.


     Since neither the plain meaning of the statute nor the
legislative history     sheds any    light on     the   legislature ' s
intent in deleting the original limitation, we look next to
the circumstances surrounding the change in the law.
     In    1964, the Administrator     of   the   Seattle Regional
Office of the Securities and Exchange Commission publish.ed an
article that sharply criticized both the federal and state
statutes of limitation in civil cases.
            Both a c t s p r o v i d e f o r a v e r y s h o r t s t a t -
            u t e of l i m i t a t i o n s .   I n f a c t , t h i s period
            i s s o s h o r t a s t o n e g a t e much o f t h e
            b e n e f i t designed t o accrue t o i n v e s t o r s .
            The Montana             Act      provides a            two-year
            p e r i o d from d a t e o f s a l e .           The F e d e r a l
            A c t p r o v i d e s f o r o n l y o n e y e a r from d a t e
            of sale f o r violations of t h e registra-
            t i o n requirements.             In t h e case of fraud
            t h e Federal A c t extends t h i s period t o
            o n e y e a r from d i s c o v e r y , w i t h a maximum
            of three years.              The Montana A c t makes no
            such d i s t i n c t i o n .

            This short        s t a t u t e o f 1-imitations provid-
            e d by t h e       a c t s unquestionably precludes
            effective         use of t h e civil l i a b i l i t i e s
            provisions        by p u r c h a s e r s . .  ..
                                                      A c t and I t s
Newton, - - - - a t t h e Montana S e c u r i t i e s - - - R e l a t i o n
        A Look

- -e
t o th      Federal Securities A c t ,

P l a i n t i f f s and s e v e r a l a m i c i c u r i a e c o n t e n d t h a t t h e Montana

L e g i s l a t u r e d e l e t e d t h e 2-year     l i m i t a t i o n i n response t o such

criticism.           Defendants a s s e r t t h a t p l a i n t i f f s '        idea t h a t t h e

2-year         limitation        was     under       siege      is    historical         fiction.

         Nothing        in the       l e g i s l a t i v e minutes     indicates that             any

committee o r i n d i v i d u a l r e f e r r e d t o M r .           Newton's        article in

d i s c u s s i n g t h e change i n t h e law.            W e draw no c o n c l u s i o n from

the fact that t h i s a r t i c l e existed prior t o the legislature's

amendment o f t h e s t a t u t e .

         The     legislature         i s presumed t o h a v e f u l l knowledge o f

e x i s t i n g laws.      Department o f Revenue v. B u r l i n g t o n N o r t h e r n ,

Inc.      ( 1 9 7 6 ) , 169 Mont.      202, 2 1 1 , 545 P.2d           1083, 1088.          A t the

time      the      2-year        limitation         was       deleted       from      S 15-2022,
R.C.M.,        t h e R e v i s e d Code c o n t a i n e d f o u r a l t e r n a t i v e s t a t u t e s

of     l i m i t a t i o n t h a t might      apply      to    civil     securities          cases:

            93-2601.            Periods of        l i m i t a t i o n pre-
            scribed.         The p e r i ~ d s ~ r e s c r i b efd r t h e
                                                                     o
            commencement o f a c t i o n s , o t h e r t h a n f o r
            t h e r e c o v e r y o f r e a l p r o p e r t y , are a s
            follows:



            93-2603.     Within e i g h t y e a r s .     Within
            eight    years:     An     action         upon   any
            contract,    obligation,          or       liability,
            founded e d upon a n i n s t r u m e n t i n w r i t i n g .



            93-2606.       Within - years.
                                    kwo -                 W i t h i n two
            years:      ...   ( 2 ) An a c t i o n u p o n a s t a t -
            u t e , o r upon an u n d e r t a k i n g i n a c r i m i n a l
            action, for a forfeiture o r penalty t o
            the state.

            93-2607.              Two-year l i m i t a t i o n .     Within
            two y e a r s :     ...       ( 4 ) An a c t i o n f o r r e l i e f
            on t h e ground o f f r a u d o r m i s t a k e , t h e
            c a u s e o f a c t i o n i n such c a s e n o t t o b e
            deemed t o h a v e a c c r u e d u n t i l t h e d i s c o v -
            e r y by t h e a g g r i e v e d p a r t y o f t h e f a c t s
            c o n s t i t u t i n g t h e fraud o r mistake.



            93-2613.         Actions f o r r e l i e f not herein-
            before provided -               for.        An a c t i o n f o r
            r e l i e f n o t h e r e i n b e f o r e provided f o r must
            be commenced w i t h i n f i v e y e a r s a f t e r t h e
            c a u s e o f a c t i o n s h a l l have- a c c r u e d . -

Similar 8,          2 and        5 year        limitations a r e contained today i n

S S 27-2-202 (1), - 2 1 1 (1), -203 a n d - 2 1 5 ,                  MCA.

        A    statute         of     limitation          is    the        legislature's         rough

approximation of                " t h e p o i n t a t which t h e i n t e r e s t s i n f a v o r

o f p r o t e c t i n g v a l i d c l a i m s a r e o u t w e i g h e d by t h e i n t e r e s t s i n

p r o h i b i t i n g s t a l e ones.    l1     Johnson v.         R a i l w a y E x p r e s s Agency

( 1 9 7 5 ) , 4 2 1 U.S.     4 5 4 , 463-64.

        Because       there        i s no       statute       of   limitations           for   civil

enforcement a c t i o n s under 5 1 0 ( b ) , o f t h e Federal S e c u r i t i e s

Exchange        Act     of       1934,        federal     cou'rts        apply     the    relevantP



s t a t u t e from e a c h forum s t a t e .            C a h i l l v.    Ernst    &   Ernst     (7th

Cir.    1 9 8 0 ) , 6 2 5 F.2d       151, 153.          S e l e c t i o n o f " t h e most analo-

gous"       statute        of     limitations           is.   governed       by     the    courts1

characterization o f t h e claim.                        B o a r d o f R e g e n t s v.    Tomanio

( 1 9 8 0 ) , 446 U . S .       478,     488.     The c h o i c e o f w h i c h s t a t u t e o f

l i m i t a t i o n s u l t i m a t e l y a p p l i e s rests upon a d e t e r m i n a t i o n o f

which s t a t u t e w i l l b e s t e f f e c t u a t e t h e c o n g r e s s i o n a l p o l i c i e s

underlying t h e federa 1 A c t .
         The u n d e r l y i n g p o l i c y and p u r p o s e s o f M o n t a n a ' s S e c u r i -

ties A c t a r e expressed i n               §    30-10-102,        MCA:

            P a r t s 1 through 3 of t h i s chapter s h a l l
            be construed t o :

            (1) p r o t e c t t h e i n v e s t o r , p e r s o n s en-
            gaged i n s e c u r i t i e s t r a n s a c t i o n s , and t h e
            public interest;

            (2)      promote u n i f o r m i t y among t h e s t a t e s ;
            and

            ( 3 ) e n c o u r a g e , p r o m o t e , and           facilitate
            c a p i t a l i n v e s t m e n t i n Montana.

Subsections           (1) and         (3) w e r e       added       by   the    legislature         in

1983.            Prior    to    that       time,    the       Act     contained      one     policy

statement:            " P a r t s 1 through 3 o f t h i s chapter s h a l l be s o

c o n s t r u e d a s t o e f f e c t u a t e i t s g e n e r a l p u r p o s e t o make u n i -

form      the      law    of     those      states       which        enact     it."       Section

30-10-102,          MCA     (1981).          Since       the    Act      no    longer      has     one

primary purpose,               e a c h o f t h e t h r e e d e c l a r e d p u r p o s e s must b e

ba l a n c e d    against       the    others.           In     choosing        an   appropriate

s t a t u t e o f l i m i t a t i o n s f o r c i v i l s e c u r i t i e s c a s e s i n Montana,

w e k e e p e a c h o f t h e s e p u r p o s e s i n mind.
        Each       party       and    amicus       curiae       has      a   preference       as    to

which      genera1        limitation         i s most         appropriate t o          the    case.

Plaintiffs            contend           that        the        8-year          limitation           of

S 27-2-202(1),             MCA,       is    most        appropriate.             That      section

provides :

            The p e r i o d p r e s c r i b e d f o r t h e commence-
            ment o f a n a c t i o n upon any c o n t r a c t ,
            o b l i g a t i o n , o r l i a b i l i t y founded upon a n
            instrument i n writing i s within 8 years.

Counsel          f o r t h e Montana        S e c u r i t i e s Department o f         the State

Auditor's          Office       asserts          that   securities            transactions         can

b e s t b e d e s c r i b e d a s b i l a t e r a l , e x e c u t o r y c o n t r a c t s , and t h a t

t h e c i v i l remedy f o r v i o l a t i o n s o f t h e S e c u r i t i e s A c t i s t h e

t r a d i t i o n a l c o n t r a c t remedy of r e s c i s s i o n w i t h i n t e r e s t minus

income r e c e i v e d .
     Defendants     contend   that   the    2-year   limitation on   a
"liability created by statute" applies.         Section 27-2-211(1),
MCA, provides:
       Within 2 years is the period prescribed
       for the commencement of an action upon:
       (a) a statute for a penalty or forfei-
       ture when the action is given to an
       individual or to an individual and the
       state, except when the statute imposing
       it prescribes a different limitation;


       (c) a liability created by statute other
       than:
       (i) a penalty or forfeiture; or
       (ii) a statutory debt created            by   the
       payment of public assistance.
Defendants point out that Count I of plaintiffs' complaint
alleges registration violation of      §§   30-10-202 and -205, MCA.
Defendants argue that the registration requirement did not
exist at common law, and that claims of registration viola-
tions cannot be construed as a contract action.             Defendants
contend that the 2-year limitation also applies to Count I1
because (1) plaintiffs' complaint recites statutory violation
and seeks statutory remedies, and (2) liabilities created by
the sale of a security by "fraud or misrepresentation" under
the Act are vastly different from those imposed in a common
law fraud action.


     Under certain circumstances, potential liability in tort
may coexist with a liability in contract.             When the facts
warrant either form of action, an injured party has the right
to elect which form of action he will pursue.              Garden City
Floral Co. v. Hunt (1953), 126 Mont. 537, 543-44, 255 ~ . 2 d
352, 356.   The general rule applied to situations falling
within the twilight zone of contract and tort law is that
doubt      must        be    resolved     in    favor      of    an     action       based      upon

contract.             Unruh v . B u f f a l o Bldg. Co.          (Mont. 1 9 8 1 ) , 633 P.2d



        It is, of course, possible t o allege several, individual

c a u s e s o f a c t i o n b a s e d upon t h e same i n j u r y .            A c o u r t may b e

o b l i g a t e d t o s e g r e g a t e p l a i n t i f f ' s v a r i o u s c l a i m s and a p p l y

separate statutes of                l i m i t a t i o n s t o each.         Mu1 t i p l e p e r i o d s

o f l i m i t a t i o n c o u l d a p p l y t o t h e same c a s e .         Construing t h i s

t h e o r y o f e l e c t i o n of r e m e d i e s w i t h r e f e r e n c e t o s t a t u t e s o f

limitations,             the   United      States       Supreme         Court      has      stated:

            ...         I f t h e choice of t h e s t a t u t e of
           limitations            were        dependent          upon     the
           particular facts o r the precise legal
           theory of             each claim,              counsel      could
           almost always argue, w i t h c o n s i d e r a b l e
           f o r c e , t h a t two o r more p e r i o d s o f l i m i -
           tations          should        a p p l y t o e a c h § 1983
           claim.         Moreover, u n d e r s u c h a n a p p r o a c h ,
           d i f f e r e n t s t a t u t e s o f l i m i t a t i o n s would
           b e a p p l i e d t o t h e v a r i o u s S 1983 c l a i m s
           a r i s i n g i n t h e same S t a t e , and m u l t i p l e
           p e r i o d s o f l i m i t a t i o n s would o f t e n a p p l y
           t o t h e same c a s e .           T h e r e i s no r e a s o n t o
           b e l i e v e t h a t C o n g r e s s would h a v e s a n c -
           tioned           this        interpretation              of    its
           statute.

Wilson      v.    Garcia        (1985),               U.S.              ,   103 S . C t .      1938,

1946.       W e appreciate the logic of                    t h i s a n a l y s i s and see no

reason      why       it    should n o t be        followed        in    securities cases,

where c l a i m s o f f r a u d , s t a t u t o r y v i o l a t i o n , b r e a c h o f f i d u c i -

ary d u t y , and b r e a c h o f c o n t r a c t may a l l s p r i n g from t h e same
injury.

        The c h o i c e o f which s t a t u t e o f l i m i t a t i o n s s h o u l d a p p l y

u l t i m a t e l y r e s t s on a c h a r a c t e r i z a t i o n o f t h e e s s e n c e o f t h e

claim.           In     determining        which      limitation            should      apply      to

claims under t h e f e d e r a l S e c u r i t i e s A c t ,            the federal courts

select t h e s t a t e s t a t u t e o f l i m i t a t i o n s t h a t w i l l b e s t e f f e c -

tuate       the        congressional           policies         underlying             the      Act.

Likewise,         in        characterizing        plaintiffs'           claims        here,       the

l e g i s l a t i v e purposes o f uniformity,                i n v e s t o r p r o t e c t i o n , and

p r o m o t i o n o f i n v e s t m e n t must b e weighed i n t h e b a l a n c e .
          Only two Montana S e c u r i t i e s A c t c a s e s have r e a c h e d t h i s

Court:         S t a t e v.     Duncan           ( 1 9 7 9 ) , 181       Mont.      382,     593 P.2d

1026,       and     Brown       v.     Merrill,         Lynch,         Pierce,       Fenner,        Etc.

( 1 9 8 2 ) , 197 Mont.         1 , 640 P.2d          453.       I n Duncan, w e a f f i r m e d a

criminal          conviction           for       deceptive          practices        and      sale      of

unregistered          securities.                I n d e t e r m i n i n g w h e t h e r an i n v e s t -

ment      contract        s e c u r i t y was       sold,      w e adopted t h e            following

b r o a d d e f i n i t i o n o f " s e c u r i t y " from t h e U n i t e d S t a t e s Supreme

Court:

            The t o u c h s t o n e [ o f an i n v e s t m e n t con-
            t r a c t ] i s t h e p r e s e n c e o f an i n v e s t m e n t
            i n a common v e n t u r e p r e m i s e d on a r e a s o n -
            a b l e e x p e c t a t i o n o f p r o f i t s t o be derived
            from t h e e n t r e p r e n e u r i a 1 o r m a n a g e r i a l
            e f f o r t s of others.

Duncan,        1 8 1 Mont.      a t 392,          593 P.2d          a t 1032, q u o t i n g u n i t e d

Housing F o u n d a t i o n , I n c . v . Forman ( 1 9 7 5 ) , 421 U.S.                     837, 852.

S e c t i o n 30-10-103(11),            MCA,       includes "investment c o n t r a c t " i n

its       definition       of        "security."              Our     opinion       i.n    Duncan,       a

criminal          case,    is relevant here only                       in    that      it d i s c u s s e s

security i n contract t e r m s .

          Brown was        a    civil        action      by    two      individual          investors

a g a i n s t a brokerage firm.                  Although. S e c u r i t i e s A c t v i o l a t i o n s

purportedly          occurred,          plaintiffs           chose t o        frame t h e i r       com-

plaint       in    tort     causes          of     action      of     negligence          and     fraud,

p r a y i n g f o r a c t u a l and p u n i t i v e damages.                Brown, 197 Mont. a t

7    &   10-11,     640 P.2d          a t 456 & 458.                The S e c u r i t i e s A c t d o e s

n o t a l l o w f o r p u n i t i v e damages.                S e e S 30-10-307,           MCA.       The

Court       addressed          each of       plaintiffs'              five    causes of          action

s e p a r a t e l y i n d e t e r m i n i n g w h e t h e r summary judgment                 i n favor

of       defendants       had        been    properly          granted.           No      statute      of

limitations o r choice of                        remedy i s s u e was r a i s e d           i n Brown.

          N e i t h e r Duncan n o r Brown o f f e r g u i d a n c e a s t o t h e manner

i n which p l a i n t i f f s '       claims should be characterized                            in this

case.
        Count        I    alleges          violations           of     the       Units'          Order      of

Registration             and        securities       registration                requirements,              in

that     defendants             failed      to    deliver         a       copy       of    the        Private

P l a c e m e n t Memorandum t o p l a i n t i f f s p r i o r t o s a l e ,                     failed t o

file a        copy o f         t h e map      and    other        geological               and    economic

i n f o r m a t i o n u s e d a s s a l e s l i t e r a t u r e , and f a i l e d t o d i s c l o s e

defendant Davidson's                  o w n e r s h i p i n t e r e s t i n t h e common s t o c k

of   Taurus O i l .             Count      I1 c o n t a i n s    allegations of                   fraud o r

deceit a s w e l l a s violations of the Act.                                   Count 111 a l l e g e s

n e g l i g e n c e and b r e a c h o f f i d u c i a r y d u t i e s on t h e p a r t o f t h e

broker-dealers                and    agents.          Count          IV     alleges         negligence,

b r e a c h o f c o n t r a c t and b r e a c h o f f i d u c i a r y d u t i e s on t h e p a r t

of     the    officers,          directors          and    general             partners          of    Taurus

Drilling.

        The c o m p l a i n t s p e c i f i e s t h a t p a r a g r a p h s 9 t h r o u g h 20 a r e

incorporated             by     reference        into      each           of    the       four        counts.

A l l e g a t i o n s o f m a t e r i a l m i s r e p r e s e n t a t i o n s and u n t r u e s t a t e -

ments o f         f a c t a r e c o n t a i n e d i n p a r a g r a p h s 9 t h r o u g h 20.               We

a l s o note        that,       a l t h o u g h Counts      I11 and             IV     do n o t        allege

s p e c i f i c s t a t u t o r y v i o l a t i o n s , t h e S e c u r i t i e s A c t o f Montana

i m p l i c i t l y e s t a b l i s h e s a code o f        conduct t o be                  f o l l o w e d by

brokers       and        others       involved       in    the        s a l e of          any    security.

S e c t i o n 30-10-301,            MCA;    Brown,        197 Mont.             a t 9,      640 P.2d        at

457.         We    find       t h a t each count o f            plaintiffs'                complaint i n

t h i s c a s e can b e i n t e r p r e t e d a s s o u n d i n g i n t o r t , c o n t r a c t o r

statutory violation.

        Where t h e r e i s a s u b s t a n t i a l q u e s t i o n a s t o which o f two

o r more          statutes of          limitations          should             apply,       the       genera1

rule     i s t h a t t h e doubt should be resolved                               i n favor of             the

s t a t u t e containing t h e             longest        limitations.                 Akada v .         Park

12-01 Corp.              (Wash.      1 9 8 5 ) , 6 9 5 P.2d          994,       995.        Where d o u b t

e x i s t s a s t o the nature of                   the action,                c o u r t s l e a n toward

application of                the    longer period           of       limitations.                    Shew v .
Coon Bay Loafers, Inc.              (Wash. 19691, 455. P.2d          359, 366,
citing Hughes v. Reed           (10th Cir. 1931), 46 F.2d            435, 440.
         This [general rule] serves the legisla-
         tive intent of protecting defendants from
         stale claims, yet provides an approach of
         liberality which affords a plaintiff
         party-litigant maximum free access to our
         court system.       Although statutes of
         limitation are primarily designed to
         assure fairness to defendants because
         they prevent claims from being brought
         when the relevant evidence is so old that
         it is unreliable, the policy of repose is
         outweighed when the interests of justice
         require ot.herwise.
Williams v.         Lee Way Motor Freight           (Okla. 1984), 688 P.2d


       As    discussed       above,     the     legislature       deleted     the
2-years-from-sale limitation from the Act at the same time it
rejected     a proposed        limitation      of     2-years-from-discovery-
of-violation.         Limitations longer than 2 years are found in
5 s 27-2-202(1)       &   -215, MCA.     An action founded upon an in-
strument in writing must be commenced within 8 years.                        Sec-
tion 27-2-202 (1), MCA.            An action for relief not otherwise
provided for must be commenced within 5 years after the cause
of action        accrues.      Section      27-2-215, MCA,        is Montana's
"catch-all" statute of             limitation.         No federal court has
applied a state catch-all limitation period to any claims
made under the federal Securities Act.                      Cahill v. Ernst     &

Ernst (7th Cir. 1980), 625 F.2d 151, 155.
       Application of the          longer limitation period            comports
with the Act's purposes of protecting the investor and en-
couraging capital investment.                 We recognize that the other
purpose of promoting           uniformity       among      the   states is not
promoted     by     our application of the             8-year limitation in
Montana.       Most       state securities acts contain statutes of
limitations in the 2 to 4 year range.                 See e.g., ~ l a s k aStat.
s   45-55.220 (f) (1980); Colo.Rev.Stat.               §   11-51-125 (8) (Supp.

1984);      Idaho    Code    5 30-1446 (3)      (1980); Nev.        Rev.    Stat.
s   90.200 (5)      (1979); N.M.      Stat.    Ann.     5 58-13-42(A)      (Supp.

                                       13
1983) ; Okla. Stat. Ann. tit. 71, S 408 (a)(2) (e)(Supp. 1985) ;
Utah Code Ann. S 61-1-22 (5), (Supp. 1983) ; Wash. Rev. Code
Ann.    S 21.20.430 (4) (b)   (1983);   Wyo.   Stat.   S 17-4-122 (e)

(1977).     The legislature deleted the 2-year limitation from
the Montana Act.     It is for that same body to harmonize our
securities law with the laws of other states, should it chose
to do so.
       Based upon the pleadings and the facts presented to us
by the federal court in this case, we hold that the 8-year
limitation period contained in 5 27-2-202(1), MCA, applies to
civil actions brought pursuant to S 30-10-307, MCA, of the

Securities Act of Montana.




We concur:


Chief Justice
Mr. Justice L.C. Gulbrandson, dissenting.
        1 respectfully dissent.

        I agree with the majority that the selection of the
appropriate      statute        of     limitations       rests       on    the
characterization of the essence of the claim, with an effort
to effectuate the declared legislative policies.                 In my view,
the majority     has    failed to characterize the claims, and
instead has found "that each count of plaintiffs' complaint
can    be   interpreted    as    sounding      in   tort,   contract,      or
statutory violation," and the majority then proceed to adopt
the    statute   of    limitations     containing     the       longest   time
period.
       This Court in Anderson v. Applebury               (1977), 567 P.2d
951 at 955 stated:
             [p]laintiffsf    amended    complaint.             ..
             seeks recovery of damages and penalties
             for    alleged    statutory    violations.
             Applicable to such claims is the two year
             period of limitations.
       Relying upon that authority, I would hold that United
States District Court Judge Battin correctly applied the two
year limitation to the securities registration claim.
       The histories of the Securities Act of Montana and the
Uniform     Securities Act      suggest that claims brought under
those Acts are based on fraud.             Relying upon those histories,
the declared purposes of the Montana Legislature in enacting
the    Securities Act,     and       the   allegations     of    plaintiffs'
complaint, I would characterize the remainder of the claims
as    sounding in tort, and would             apply the two year from
discovery     time    period     of    limitations    as    expressed      in
S 27-2-203, MCA, and as interpreted in Mobley v. Hall (Mont.

19831, 657 P.2d 604, 40 St.Rep. 49.
