# Amicus Curiae Brief — Caldwell v. Sioux Falls Stock Yards Co.

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386003_0274%3A4

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1917
- **Citation:** 242 U.S. 559

## Text

Sete
txt

GTi AA Bh me Sk OED Pe Rnd

IN THE

Supreme Court of the United States

October Term 1915.

No. 860.
Caldwell v. Sioux Falls Stock Yards Company.

No. 900.
Herrick v. Halsey and Company.
No. 941
Hall, etc., v. The Geiger Jones Company.
No. 942.
Hall, etc., v. Coultrap.

No. 943.

Hall, ete., et al v. Rose, et al.

#
Appeals from the Districts Courts of the United States _
of Michigan, South Dakota and Ohio.

MOTION FOR LEAVE TO FILE BRIEF
AMICI CURIAE.

Come now Grant Fellows, attorney general of Michi-
gan, George Cosson, attorney general of Iowa, and Ed- é
ward C. Turner, attorney general of Ohio, as a duly ap- ©
pointed committee of the National Association of At-

*

torneys General and respectfully seek permission to file
a brief in the above entitled causes as amici curiae.

Said causes involve the constitutionality of the so-
called Blue Sky Laws of Ohio, Michigan and South
Dakota.

More than twenty states have enacted similar legis-
islation.

After the Federal Distriet Courts of Towa and Michi-
gan had declared the original Blue Sky Laws of Iowa
and Michigan unconstitutional, ‘the National Associa-
tion of Attorneys General appointed a committee to
draft a model law. This committee which was composed
of Attorneys General Moose of Arkansas, Fellows of
Michigan, and Cosson of Iowa, reported a model Blue
Sky Law to the National Association of Attorneys Gen-
eral on December 28, 1914. This model has been fol-
lowed in the laws adopted by a number of the states, in-
eluding Michigan and South Dakota.

All of said legislation seeks to protect the citizens
of the various states from fraud in the sale of alleged
securities.

As the decision in any one of the above entitled causes
will in all probability be determinative of the validity
of similar laws in other states, we respectfully suggest
that this committee, appointed for the purpose by Hon-
orable James P. Tuttle, attorney general of New Hamp-
shire, president of the National Association of Attorneys
General, be granted permission to file a brief discussing
the general principles underlying this class of legislation.

GRANT FELLOWS,
Attorney General of Michigan.
GEORGE COSSON,
Attorney General of Iowa.
EDWARD C. TURNER,
Attorney General of Ohio.

se

E

|

WO 1A satin bay dom “ FTA niles

IN THE

Supreme Court of the United States

OCTOBER TERM, A. D. 1915

SIOUX FALLS STOCK YARDS COM-
PANY, a Corporation, WILLIAM MOR-
LEY and HARKY MORLEY,
Plointif—fs ane Re xpondents,
Vs.

CLARENCE €(. CALDWELL, as Attorney
General for the State of South Dakota
and Ex-Officio Member of the State Se-
curities Commission of the State of
South Dakota; HARRY O'BRIEN, as
Insurance Commissioner of the State of
South Dakota, and Ex-Officio Member
of the State Securities Commission of
the State of South Dakota; JOSEPH L.
WINGFIELD, as Public Examiner of
the State of South Dakota and Ex-Of-
ficio Member of the State Securities
Commission, and DAN E. HANSON, as
State’s Attorney of Turner County,
South Dakota,

Defendants and Appellants.

Appeal From the District Court of the United States,
District of South Dakota, Eastern Division.

MOTION TO ADVANCE

Now come the appellants, and move the Court to ad-
vance the above entitled cause for hearing and argument
to an early date convenient to the Court.

In support of the motion to advance appellants re-
spectfully show to the Court:

This action was brought by respondents in the
United States District Court for the District of South
Dakota for the purpose of obtaining a permanent in-

junction against said appellants restraining said ap-

ee Dek ks Bed a

NR PD VN DB de BS tee enh Hy

~

pellants from instituting criminal actions against re-
spondents for violation of Chapter 275, of the Session
Laws of the State of South Dakota for the vear 1915.
An application was made by respondents to the Judge
of said Court for a temporary or interlocutory injunction
during the pendency of said action. A hearing was had
upon the application of respondents for such interlocu-
tory injunction under the provisions of Section 266, of
the Act of Congress entitled “An act to codify, revise and
amend the laws relating to the Judiciary,” approved
March 3, 1911’, as amended by Act of March 4, 1918
(37 Stat. L. 1013). The Judge of the District Court
called to his assistance to hear and determine the appli-
cation, two other Judges, as provided by said. statute,
namely, United States Circuit Court Judge Walter HI.
Sanborn, and United States District Judge Thos. ©.
Munger, and an order was made in said cause by the
said Judges, which granted the application of respondent
for an interlocutory injunction, and which restrained ap-
pellants from instituting and prosecuting any actions,
civil or criminal, against respondents under the afore-
said act of the Legislature of the State of South Dakota.
for alleged violations thereof, and from taking any pro-
ceedings for the enforcement of said act, against the said
respondents. From this interlocutory order of injune-
tion appellants have appealed to the Supreme Court of
the United States.

The South Dakota act in question (Session Laws of
1915, page 657) is popularly known as a “Blue Sky
Law.” It was passed at the 1915 session of the Legisla-
ture of South Dakota, was approved March 15, 1915, and
went into effect on July 1, 1915. This act creates “A
State Securities Commission’ to consist of the Public
Examiner, the Attorney General and Commissioner of
Insurance. It requires every person, corporation, co-
partnership, company or association, except those ex-
empted under the provisions of the act, before selling,
offering for sale, taking subscriptions for or negotiating
for the sale in any manner whatsoever, in the State of
South Dakota, any stocks, bonds. investnents, contracts
or other securities, of its own issue, to make application
for a license or permit, and submit certain information
and data prescribed by this statute to the said State Se-

—

AN arian

Soe imtin MORNE ite vt ae were al OP he ate ie ie

curities Commission, and to pay a filing fee prescribed
by this statute. The said State Securities Commission
shall hear such application, and if in the opinion of such
Commission the sale of such contracts, stock, bonds or
other securities would work a fraud upon the purchaser,
the Commission is authorized to disapprove the sale of
same. Lf, however, said Commission shall not find that
the proposed plan of business, or the proposed contracts,
stocks, bonds or other securities are fraudulent, or are
of such a nature that the sale of such contracts, stocks,
bonds er other securities would in the opinion of the
Commission work a fraud upen the purchaser thereof,
then it is authorized to approve the sale of the same in
the State of South Dakota, and issue its certificate to
that effect. It is made unlawful for any investment
company or dealer or representative thereof, to sell, take
subscriptions for or negotiate for the sale in any manner
whatever in South Dakota, any stocks, bonds, investment
contracts or other securities, unless and until the said
Commission has approved thereof and issued its certi-
ficaie in accordance with the provisions of the statnte:
Penalties by fine and imprisonment in the county jail are
prescribed for violations of the aet.

Respondent's Bill of Complaint and Application
shows that the complaint, the Sioux Falls Stock Yards
Company, is a corporation of the state of Colorado, and
that the complainants, William Morley and Harry Mor-
ley, are residents and citizens of the State of Towa. That
during the year 1915, beth before and after July Ist, of
that year, the Sienx Falls Stock Yards Company was en-
eaged in the business of building and constructing a
stock yards in the City of Sioux Falls, Minnehaha coun-
ty, South Dakota, and was engaged at such time in sell-
ing certain of its capital stock for the purpose of raising
sufticient capital to complete the construction of its said
stock yards in the City of Sioux Falls. That the com-
plaints, William Morley and Harry Morley were at such
times engaged in the business of selling the stock of the
Sioux Falls Stock Yards Company within the state of
South Dakota. That in October, 1915, the defendant,
Dan FE. Hanson, as State's Attorney of the County of
Turner, and State of South Dakota, at the instigation
and request of the other defendants as members of the

wes

Me my Tk

RR ai aang

Lalas a aaa uianad, 4 an . .
ee eee z PEIN ale PIED ont uct: Hiya ane 924 a owe

4

State Securities Commission, caused to be instituted
against the complainants criminal proceedings for the
Violation of the provisions of said Chapter 275, Session
Laws of South Dakota for the year 1915, and that the
defendants intend and will continue to prosecute the
complainants for violations of said statute so long as
complainants sell or offer for sale any stock of the Sioux
Falls Stock Yards Company within the state of South
Dakota. The complainants desire to continue the sale
of the securities and stocks of the said Sioux Falls Stock
Yards Company within the State of South Dakota, and
that the business of said corporation cannot be promoted
Without the continued sale of its stock. That the acts
of defendants under said chapter 275 are depriving com-
plainants of the right to sell the capital stock of said
Sioux Falls Stock Yards Company within the State of
South Dakota, and deprives them of their property with-
out due process of law in violation of Section 1 of Article
14 of the Constitution of the United States and Section
2 of Article 6, Constitution of the State of South Da-
kota; that there is thereby denied to the complainants
the equal protection of the laws as guaranteed to them
by the Fourteenth amendment to the Federal Constitu-
tion; that the law imposes a burden upon and practically,
prohibits interstate commerce, contrary to Section & of
Article 1, of the Constitution of the United States, and
said statutes attempt to vest and delegate to the said
State Securities Commission judicial powers unauthor-
ized by law.

The hearing for the interlocutory injunction was
had upon the Bill of Complaint, which constituted the
showing and application for the complainants. The ap-
pellants conceded the correctness of the facts alleged by
complainants but contended that same did not constitute
grounds for an injunction, thus in effee¢t demurring to
the application of complainants. The Covrt rendered no
formal opinion but in the interlocutory injunction Order
hereinbefore described, made a finding that Chapter 275,
Session Laws of South Dakota for the vear 1915, was
violative of the Constitution of the United States, basing
such finding in the order upon the decisions in Alabama
& No. Transportation Co. vs. Doyle, 210 Fed. 173, Win.
R. Compton Co, vs. Allen et al, 216 Federal 537, and

Bracey vs. Darst. 218 Federal 482. The issue upen the
appeal to this Court as made by the pleadings and record
and the decision of the lower Court, is as to the consti
tionality under the Federal Constitution of the said
South Dakota Statute.

As reason why it is especially urgent and desirable
that the cause in this Court be advanced to an early
hearing, appellants enumerate the following:

1. That the issues and questions invelyed in’ this
appeal are matters of public concern to all the people of
South Dakota in that they involve the validity of the
statute regularly passed and approved, and designed .ty
protect the public against fraud,

2. That public officers of the state are charged with
the administration and enforcement of this statute, and
such administration and enforcement is) seriously em-
barrassed by the question as to the validity of such stat-
utes raised by the decision of the Federal District Court.

3. That such officers are compelled to take the risk
of enforcing an invalid statute, or of allowing a valid
statute to remain ignored and uninforced until its: va-
lidity is determined,

4. That such officers believing in the validity and
constitutjonality of the statute are insisting upen its en-
forcement except as they have been restrained by the
Court as to the complaints in this case.

>. That investment companies and persons dealing
in stocks, bonds and other securities within the State of
South Dakota, are being compelled to submit to the
provisions of a statute which may be determined to he
unconstitutional and void, or to determine for themselves
at their peril that same iy unconstitutional and void, and
take the risk of subjecting themselves to the penalties
provided therein.

6. That the situation during the pendency of this
appeal, and until the validity and constitutionality of
said statute is finally determined, is such as will likely
create a multiplicity of suits because of the uncertainty
with reference to the validity of the law.

7. That the business of dealing in stocks, bonds and
securities of investment companies is very extensive
threnghout the state of South Dakota; that the number
of people engaged in selling stocks and securities of in-

YRS

7 a ee DOE ae TT) ra Fee ay ee a Oe nee eee

FA PO

ite

Se

6

vestment companies is large, all of whom will be directly
affected in the determination of the question of the va-
lidity of such law. That the business of selling such
stocks and securities reaches throughout the entire state
in all sections thereof, and extends to all classes of peo-
ple, and the administration of the law affects the entire
people of the state.

8. That more than twenty states of the United
States have passed blue sky laws in some form. That the
question as to the power of the states to protect its peo-
ple from fraud in the sale of stocks and securities under
these laws is a new question but one of the greatest im-
portance to the people throughout all of these various
states. That the demand and need for legislation alone
this line is shown by the passage of laws to this end in
sO many states. That it is important and urgent in
order to protect the public from fraud that the scope of
the authority of the states under the Federal Constitu-
tion to legislate along these lines. be determined to the
end that power and valid legislation may be secured as
far as possible from the states, and to the end that the
people, through Congress may supply the needed legist-
tion along these lines where the power to legislate is
denied the states.

WHEREFORE, Appellants respectfully submit their
Motion together with the foregoing reasons in) suppert
thereof,

CLARENCE C. CALDWELL,
Attorney General,
BYRON S. PAYNE,
Asst. Attorney General,
Solicitors for Appellants.

The plaintiffs and respondents in the above entitled
action hereby join in the foregoing motion to advance,
and respectfully ask that said motion be granted. and
they hereby waive all notice of hearing of the same.

R. J. GAMBLE, FE. E. WAGNER, and
GEORGE J. DANFORTH,
Solicitors for Respondents

4
:
&

ata ent a eae Oe ge ee

560 OCTOBER TERM, 1916.
Argument for Appellees. 242 U.S.

constitutional and its effect, if the business be continued in disre-
gard of it, will be to visit him with repeated criminal prosecutions
involving heavy fines and imprisonment, the remedy at law is not
adequate.
A suit to enjoin state officials from instituting criminal proceedings in
enforcement of such a statute is not a suit against the State.
Reversed. For decree below see 230 Fed. Rep. 236, note.

THE case is stated in the opinion.

Mr. Clarence C. Caldwell, Attorney General of the State
of South Dakota, with whom Mr. Byron S. Payne, <As-
sistant Attorney General of the State of South Dakota,
was on the brief, for appellants.

Mr. George J. Danforth, with whom Mr. Hugh S. Gamble,
Mr. Frank McLaughlin and Mr. Edward E. Wagner were
on the brief, for appellees:

The act denies to the appellees due process of law, in
violation of the Fourteenth Amendment and the South
Dakota constitution, § 2, Article 6.

A complete analysis of its provisions shows that this
is not a law to prevent fraud in the sale of stocks and
bonds. It is a law designed for the sole purpose of regu-
lating the control of the sale of stocks and bonds to a point
of absolute prohibition. The stocks and bonds that are
sold under the permit given by the commission are no
more protected against the fraud and deceit of the agent
in selling them than are those that are sold without a
permit. The law is purely an attempt to regulate profit
and loss and to try to guarantee the citizens of South
Dakota against a possible mistake in judgment. It is
simply an effort to prevent the citizens of this State from
entering into a legitimate enterprise for gain, if they so
desire, and to guard their pocketbooks. The law does not
provide any penalty for fraud, but simply contains a
prohibition against and provides a penalty for tendering
for sale an article of commerce, however honestly it may

PRRs sci snes no nttnen wiv co Pee any a AB AA 2D
CALDWELL ». SIOUX FALLS STOC ‘KK YARDS CO. 561
242 U.S. Argument for Appellees.

be tendered. Herein lies the vice of the statute, and
herein does it differ from all laws regulating commercial
transactions, which have been upheld by the court under
the guise of police regulations.

The State Securities Commission is not merely an ad-
ministrative board vested with certain discretionary
powers, but is rather a court before which evidence must
be taken, examined and weighed, and with authority
greater than was ever conferred upon any judicial tribunal
in this country.

The very right to make a contract is taken away from
the individual unless the individual or corporation or asso-
ciation receives the stamp of approval of the commission
upon the contract.

For a century or more the business of trading in horses
has been recognized as a line of business in which fraud
was frequently practiced. There would be just as much
sense in having the State Securities Commission put its
stamp of approval upon every horse trade as there would q
be to have it set up its judgment against the skilled in- ;
vestor, simply because an occasional person has lost his
money by reason of a stock transaction. Ex parte Hawley,
22 8. Dak. 23. ;

The act is an unlawful interference with interstate com- ;
merce. Catlin & Powell v. Schuppert, 110 N. W. Rep. 818;
Hatch v. Reardon, 204 U. 8. 152 ; International Textbook
Co. v. Pigg; 217 U.S. 91.

The statute denies to the appellees the equal protection
of the law. It exempts state and national banks and loan
associations and certain other classes.

The act attempts to delegate both legislative and judi-
cial power to the State Securities Commission, and is not
an inspection law. Phenix Insurance Co. y. Perkins, 101
N. W. Rep. 1110; Stour Falls v. Kirby, 6 S. Dak. 62;
Hewitt v. Board of Medical Examiners, 84 Pac. Rep. 39;
Mathews v. Murphy, 63 8. W. Rep. 785.

a te a

PE NEL Fs LOGIN

562 OCTOBER TERM, 1916.
Opinion of the Court. 242 U.S.

In the case at bar, the law distinctly provides that all
that is necessary for the Securities Commission to find is
that in its opinion the sale of stocks, bonds, ete., might
work fraud upon the purchaser. A pure and absolute
discretionary power is given to the commission. First,
as to the granting of the permit, and, Second, as to the
revocation of the permit after it is granted. There is no
standard fixed to guide the commission in granting the
permit, nor is there any standard prescribed as the reason
for the revocation of the permit.

Mr. George Cosson, Attorney General of the State of
Iowa, and Mr. Walter C. Owen, Attorney General of the
State of Wisconsin, by leave of court, filed a brief as amici
curie on behalf of the National Association of Attorneys
General of the United States.

Mr. Justice McKenna delivered the opinion of the
court.

This case was argued and submitted with Nos. 438, 439
and 440, just decided, ante, 539, and with No. 413, post,
568, which concerns a statute of Michigan of like kind, the
opinion in which is to follow. It involves the same general
questions as those cases and is presented to review a decree
of the District Court enjoining appellants from enforeing a
statute of the State of South Dakota relating to the sale of
securities. The act ($ 23) makes violations of its provi-
sions a misdemeanor and criminal prosecutions under the
act were the particular actions of the officers of the State
that the appellees prayed to be enjoined.

After a consideration of the pleadings and argument the
court, consisting of three judges, expressed the view that
the statute violated the Constitution of the United States,
and cited in confirmation Alabama & N.O. Transportation
Co. v. Doyle, 210 Fed. Rep. 173; Wm. R. Compton Co. v.

CALDWELL »v. SIOUX FALLS STOCK YARDs CO. 563
242 U.S. Opinion of the Court.

Allen, 216 Fed. Rep. 537, and Bracey v. Darst, 218 Fed.
Rep. 482.

The court decreed that the appellants be enjoined from
instituting and prosecuting any actions, civil or criminal,
against complainants (appellees) under the statute for
alleged violations thereof, and from taking any proceed-
ings for its enforcement except such as might be deemed
proper by them in the criminal actions already pending.

The Sioux Falls Stock Yards Company is a Colorado
corporation, having its principal place of business at the
City of Denver, and the Morleys are residents and citizens
of Iowa.

The Stock Yards Company was at the times mentioned
in the bill engaged in building and constructing a stock
yard in Sioux Falls, South Dakota, and in selling a certain
amount of its capital stock for raising sufficient capital for
that purpose. The Morleys, at such time, were engaged in
the buying and selling of stock and especially in selling the
stock of the Stock Yards Company to various farmers and
other purchasers, such sales being necessary to complete
the construction of the stock yard and also necessary to
enable the Morleys to earn a livelihood.

Six informations were filed against appellees at the
instigation of appellants for violations of the statute and
it is alleged that appellees will be prosecuted immediately
under such informations and will be further prosecuted.

The statute, it is alleged, is an infraction of the Four-
teenth Amendment of the Constitution of the United
States and imposes a burden upon and practically amounts
to a prohibition of interstate commerce and hence offends
the commerce clause of the Constitution of the United
States; and “that it attempts to vest in and delegate to
the said so-called State Securities Commission judicial
powers unauthorized by law.”

Against the bill appellants urge, besides asserting the
validity of the statute, three defenses: (1) That com-

Peo ee

So ates eee D TR RS

504 OCTOBER TERM, 1916.
Opinion of the Court. 242 U.S.

plainants have a plain, speedy and adequate remedy at
law; (2) the suit is one against the State; (3) that the plea
of the unconstitutionality of the statute was made in the
criminal actions.

The three defenses are without merit. Six informations
have already been filed against appellees and as many
more may be brought as there may be violations of the
statute, and a conviction of each may bear a fine of $1000
or imprisonment, or both.

The suit manifestly is not one against the State, and
the decree appealed from does not enjoin criminal actions
commenced before the filing of the bill. We therefore
pass to the merits.

A summary of the statute is all that is necessary. Its
purpose as declared in its title is to prevent fraud in the
sale and disposition of stocks, bonds or other securities
sold or offered for sale within the State. It creates a com-
mission called the State Securities Commission, of which
the appellants—except Hanson, who is prosecuting attor-
ney of Turner County—are members.

Those dealing in securities—and they may be persons,
corporations, co-partnerships, companies or associations,
incorporated or unincorporated—shall be known, it is
provided, ‘‘as a domestic investment company.”’ Those
resident of or organized in any other State, Territory or
government shall be known ‘‘as a foreign investment
company.”

Certain securities are exempt from the provisions of the
act and information as to those to which it applies must
be furnished to the commission as follows: If the securities
are of the dealer’s own issue a statement must be filed with
the commission showing in full detail (1) the plan upon
which it proposes to transact business, (2) a copy of all
contracts, stocks and bonds which it proposes to make with
or sell to contributors or customers, together with a copy
of its prospectus and of the proposed advertisements of its

<a

_ euamaaammenemrsss ————

CALDWELL v. SIOUX FALLS STOCK YARDS CO. 505
242 U.S. Opinion of the Court.

securities; which statement shall also show its name and
location and main office; (3) the names and addresses of
its officers and an itemized account of its financial condi-
tion and the amount of its assets and liabilities; (4) such
other information as the commission may require; (5) if a
foreign corporation, a copy of the law under which it was
incorporated; (6) a copy of its charter and certain other
papers relating to its constitution and organization. A
filing fee is provided for of not less than $10 nor more than
$100. The described papers are to be verified and, if of
record, certified to. Ifa foreign corporation, the applicant
must file its irrevocable consent to suits against it by serv-
ice of summons upon the public examiner.

The commission is authorized to require further infor-
mation than that mentioned above and to make an
appraisal of the property of the applicant at the expense of
the applicant.

If the commission find from the statements filed and the
reports of the investigations conducted by it that the
securities or investment contracts offered for sale would
in its opinion work a fraud upon the purchaser, the com-
mission shall disapprove of their sale and notify the com-
pany by registered mail of its findings and disapproval,
and it shall be unlawful for the company to sell such
securities and they shall not be sold in the State. If, how-
ever, the proposed plan of business and the securities are
not of that character their sale shall be approved and a
certificate issued of permission to sell.

The person who is authorized to sell the securities
designated in the act is termed a “dealer” in them, and
he shall not sell or offer them for sale until he shall have
filed a list of the same in the office of the commission. The
term “dealer,” it is provided, shall not include an owner
nor issuer of securities when the sale of them is not made
in the course of continued and successive transactions of
2 similar nature, nor one who in a trust capacity created

ie aS ae de

BE PT eas

eee haa soe. SOR

sha

, ae

Dei dial saab ta ie ilar oa bt labia Chas eal cadens |

ALOE URNA NAGE AS RELOAD RA Oe Sees up Peet nars

566 OCTOBER TERM, 1916.
Opinion of the Court. 242 U.S.

by law lawfully sells securities ‘‘impressed with such
trust.”” A ‘‘dealer”’ is required to furnish practically the
same information as that required of corporations. <All
authorized agents of a ‘“‘dealer’’ or investment company
shall be registered with the commission and if the ‘‘dealer”
be a nonresident or a corporation other than a domestic
corporation he shall at the time he registers with the com-
mission file with it a written, duly authenticated appoint-
ment of the public examiner of the State as his or its agent
in the State upon whom process or pleadings may be
served for or on behalf of the ‘‘dealer,’”’ which appointment
shall be irrevocable. Upon compliance with the terms of
the act the commission shall issue to such “‘dealer’’ a
license which shall be good until revoked by the commis-
sion for good cause upon notice to the “‘dealer” and after a
hearing duly had.

There is a provision for keeping accounts, payment of
fines and other details, and it is provided that if, after
permission has been issued authorizing the sale of the
designated securities it shall be made to appear to the
commission from an examination of an investment com-
pany that the further sale of the securities would work a
fraud upon the purchaser, the commission may make an
order revoking the license of the company and, pending
the hearing, suspend the right of the company.

It is unlawful for a dealer or investment company to sell
or offer for sale securities other than those approved by the
commission or to transact business on any other plan than
that set forth in the statements and papers required to be
filed with the commission; or to circulate advertisements
or other documents in the State differing in any way from
the copy filed with the commission; or until the same has
been approved by the commission. And no dealer shall
sell or offer for sale securities of an investment com-
pany until such company has complied with the act.
He may, however, if such investment company has not

CALDWELL v. SIOUX FALLS STOCK YARDS CO. 567
242 U.S. Opinion of the Court.

itself complied with the act, make application for a
license.

Records of the commission shall be publie records and
they shall be so arranged and preserved as to facilitate
their examination, except that the commission may in its
discretion withhold information relating to the private
affairs of persons or corporations when in its judgment the
same shall not be required for the public welfare, or any
information relative to any matter that may be at issue
in any court, unless upon an order of the court. Except as
so provided the commission may furnish to those who may
apply therefor any information regarding any investment
company or its affairs.

Annual statements are required to be filed by invest-
ment companies, domestic or foreign, in such form and
containing such information as the commission may de-
mand; and failure to do so forfeits its permit.

The Supreme Court of the State upon petition of any
person aggrieved may review by certiorari any final order
or determination of the commission. The issue of the writ
shall not, however, unless specifically ordered by the
court, operate as a stay of proceedings.

Violations of the act are made misdemeanors punishable
by a fine of not more than $1000 or imprisonment for not
more than one year, or both fine and imprisonment. And
it is provided that if any section of the act be declared un-
constitutional or unauthorized the other sections shall not
be vacated thereby.

The statute of South Dakota differs in some details
from the statute of Ohio, but in its purpose and general
provisions it is the same. There is urged against it, as was
urged against the Ohio statute, that it violates the Four-
teenth Amendment and the commerce clause of the Con-
stitution of the United States. The argument to support
these contentions, while affluent in citation of cases, is
not so circumstantial as that which is presented against

iia

ELIE AE LES Re DE

eerecer sence

ey

58 OCTOBER TERM, 1916.

Syllabus. 242 U.S.
the Michigan statute. Therefore, we shall rest this case
upon our opinion in Nos. 438, 439 and 440, reserving to the
Michigan case our reply to the more specific objections.

Decree reversed and cause remanded for further proceedings
in conformity with this opinion.

Mr. Justice McREYNOLDs dissents.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386003_0274%3A4. Public record. Not legal advice.