Caskie v. State Corp. Comm.

• Decision Date: 23 September 1926
• Citation: 145 Va. 459
• Parties: K. R. CASKIE AND C. J. GRAVETT v. STATE CORPORATION COMMISSION.
• Court: Virginia Supreme Court

Page 459

145 Va. 459

K. R. CASKIE AND C. J. GRAVETT v. STATE CORPORATION COMMISSION.

Supreme Court of Virginia, Wytheville.

September 23, 1926.

1. BLUE SKY LAW — Sale of Lands Outside of the State by Bona Fide Owners. — There can be no question that the definition of speculative securities given in the blue sky law section 3848(27) of the Code of 1924, by its terms includes deeds, contracts and subscription agreements by which persons may be sold title to lands outside of this State, which are divided or to be divided into town or suburban lots, and that lots located in Alabama cannot be sold in Virginia without a permit from the Virginia State Corporation Commission, unless the owners of such lots are excluded from the operation of the statute by the proviso contained in clause 7 of section 3848(27) of the Code of 1924, which reads: "Provided that this clause shall not be construed to include the bona fide owners of any such lot or unit who may sell same for his own account and not as a part of or in furtherance of any promotion.

2. BLUE SKY LAW — Sale of Lands Outside of the State by Bona Fide Owners — Case at Bar. — In the instant case, an appeal from the order of the State Corporation Commission requiring a partnership to reduce, by one-half, the prices at which they were offering for sale in Virginia lots in Alabama, the record showed without contradiction that the partners were the bona fide owners of the lots in Alabama; that they were the makers or issuers of the deeds or contracts made in connection with the sale of the lots, and that they were selling them for their own account and in the usual and ordinary course of business. The partnership maintained that the lots were not being sold as a part of or in furtherance of any promotion.

Held: That the sale of the lots in question was not within the purview of the blue sky law.

3. WORDS AND PHRASES — Promotion — Promotor. — Generally speaking, a "promoter" is a person who engages in the promotion of a plan or scheme by which it is hoped to insure or add to the success of some business venture. The term "promoter" is not a term of law, but of business, usefully summing up in a single word a number of business operations familiar to the commercial world by which a company is generally brought into existence.

4. BLUE SKY LAW — "Promotion" — Section 3848, (27) of the Code of 1924. — There can be no promotion within the purview of the blue sky law (section 3848(27) of the Code of 1924), on the part of the bona fide owner of real estate who, himself without the intervention of agents, sells the same for his own account without any promise of future development and does not resort to any scheme or device to defraud or to induce prospective purchasers to pay prices far in excess of the price they would probably pay were the land sold in the ordinary course of business.

5. BLUE SKY LAW — Sale of Lands Outside of the State by Bona Fide Owners — Case at Bar. — In the instant case, an appeal from an order of the State Corporation Commission requiring a partnership to reduce, by one-half, the prices at which they were offering for sale in Virginia lots in Alabama, the evidence disclosed no fraud or misrepresentation on the part of the partnership. They were bona fide owners of the land in fee simple and there was no encumbrance on the title. They were selling the lots, without the assistance of agents, for their own account "in the usual and ordinary course of business." They made no future undertaking or promise to the purchaser. When a lot was sold and the deed was made and delivered to the purchaser, the transaction was forever ended.

Held: That the Commission should have dismissed the proceeding on the ground that the sale of lots under the circumstances was not within the purview of the blue sky law.

6. BLUE SKY LAW — Jurisdiction of the Corporation Commission — Sale of Lands Outside of the State by Bona Fide Owners. — The Corporation Commission has jurisdiction to hear and determine the question whether the owner of land in another State, which has been divided into town or suburban lots, shall secure from the Commission the permit required by the statute (section 3848(27) of the Code of 1924) before he can sell the lots in this State. But, when it is made to appear, as in the instant case, that the party is a bona fide owner, selling his own lots for his own account and not as a part of or in furtherance of any promotion, the proceeding should be dismissed.

7. BLUE SKY LAW — Order of the Corporation Commission — Effect of Failure to Appeal from Order. — Where the Corporation Commission had jurisdiction of the parties and general jurisdiction of the subject matter, and no appeal was taken from the order of the Commission, the order will be permitted to remain in full force and effect.

Appeal from an order of the State Corporation Commission.

The opinion states the case.

Caldwell & Chaney, Jackson & Henson, for the appellants.

John R. Saunders, Attorney General, Lewis H. Machen, Leon M. Bazile, Assistant Attorneys General, and William R. Shands, for the appellees.

WEST, J., delivered the opinion of the court.

This is an appeal from an order of the State Corporation Commission requiring K. R. Caskie and C. J. Gravett, trading as Shoals-Ford Division Company, to reduce, by one-half, the price at which they were offering for sale in Virginia lots in "Shoals-Ford Division," Lauderdale, Alabama, and suspending the authorization previously granted them to sell the lots in Virginia, until they file with the Commission a new price list in accordance with its order.

The agreed statement of facts is as follows: "That K. R. Caskie and C. J. Gravett, trading as Shoals-Ford Division Company, although advised by their counsel such was unnecessary, filed a petition with the State Corporation Commission May 14, 1924, asking for authority to sell in Virginia under provisions of sections 3848(27) of the Code of Virginia, otherwise known as the blue sky law, lots located in a subdivision known as Shoals-Ford Division," Muscle Shoals District, Florence, Alabama. That the Commission granted the Shoals-Ford Division Company, on May 27, 1924, the right to sell lots of a total selling price not to exceed $20,000 according to price list filed with the Commission.

"That on October 31, 1924, the Commission summoned the Shoals-Ford Division Company to a hearing in Richmond to be held on November 28, 1924 to show cause, if any, why the Commission should not cancel or suspend, as it might see fit, the authorization granted the Shoals-Ford Division Company on May 27, 1924.

"A hearing was held in Richmond November 28, 1924, and a final order was entered by the Commission on April 10, 1925, ordering K. R. Caskie and C. J. Gravett, trading as Shoals-Ford Division Company, to reduce, by one-half, the prices asked for the lots in `Shoals-Ford Division,' as shown by the price list filed with the Commission May 17, 1924, and suspending the authorization granted on May 27, 1924, until the provisions of such order were complied with. Very little of the twenty thousand dollars worth of the property had been sold when...