Accepting this allegation as true, as I must, I conclude that it precludes defendants from resorting to ยง 36-498. Blue Sky Laws are designed to protect the public from fraudulent and deceptive securities practices, see Parvin v. Davis Oil Co., 524 F.2d 112, 117 (9th Cir. 1975); O'Neill v. Florida, 336 So.2d 699, 700 (Fla.Dist.Ct.App. 1976); Logan v. Panuska, 293 N.W.2d 359, 362 (Minn. 1980), and from incompetent and irresponsible dealers, Jenkins v. Dearborn Securities Corp., 42 Ill.App.3d 20, 355 N.E.2d 341, 344 (1976).
The Court finds that these are legitimate local interests supported by case law. See Stottler Stagg Associates, Inc. v. Argo, 403 So.2d 617, 618 (Fla. 5th DCA 1981); O'Neill v. State, 336 So.2d 699, 700 (Fla. 4th DCA 1976). Although Florida's interest in protecting consumers might be limited to citizens of this State, its averred intention in upholding its general commercial reputation is a legitimate exercise of its police power and is sanctioned by the Constitution.
Cases considering fractional oil and gas interests within the enveloped transactional parameters under state security civil and criminal regulatory systems include Upton v. Trinidad Petroleum Corp., 652 F.2d 424 (5th Cir. 1981), applying Alabama law; People v. Blankenship, 305 Mich. 79, 8 N.W.2d 919 (1943); and Commonwealth v. Yaste, 166 Pa. Super. 275, 70 A.2d 685 (1950). See likewise, Oil Lease Service, Inc. v. Stephenson, 162 Cal.App.2d 100, 327 P.2d 628 (1958); O'Neill v. State, Fla.App., 336 So.2d 699 (1976); State v. Walters, 244 Iowa 1253, 58 N.W.2d 4 (1953); Caldwell v. Trans-Gulf Petroleum Corporation, La., 322 So.2d 171 (1975); Prince v. Heritage Oil Co., 109 Mich. App. 189, 311 N.W.2d 741 (1981); State v. Golden, 216 Minn. 97, 12 N.W.2d 617 (1943); Gales v. Weldon, Mo., 282 S.W.2d 522 (1955); State ex rel. Day v. Petco Oil Gas, supra. See also, Hayden v. McDonald, 742 F.2d 423 (8th Cir. 1984), overruled on other grounds sub nom. Austin v. Loftsgaarden, 768 F.2d 949 (8th Cir. 1985), applied Minnesota law; Parvin v. Davis Oil Co., 524 F.2d 112 (9th Cir. 1975), applied California law; Scheve v. Clark, 596 F. Supp. 592 (E.D.Mo. 1984), applied both state and federal law; Witter v. Buchanan, 132 Ill. App.3d 273, 87 Ill.Dec. 131, 476 N.E.2d 1123 (1985); Petroleum Resource Development Corp. v. State ex rel. Day, Okla., 585 P.2d 346 (1978); State v. Pullen, 58 R.I. 294, 192 A. 473 (1937) and Kadane v. Clark, 135 Tex. 496, 143 S.W.2d 197 (1940).
The legislative purpose of the Florida Securities and Investor Protection Act was, as its title makes clear, to protect the public from fraudulent and deceptive practices in the sale and marketing of securities. State v. Beeler, 530 So.2d 932, 934 (Fla. 1988); Stottler Stagg Associates, Inc. v. Argo, 403 So.2d 617 (Fla. 5th DCA 1981); O'Neill v. State, 336 So.2d 699 (Fla. 4th DCA 1976); Nichols v. Yandre, 9 So.2d 157 (Fla. 1942). As such, it is to be given a broad and liberal interpretation to effectuate its purpose.
The public policy behind the statute was designed to prevent organizations in appellee's posture from taking advantage of this uniquely superior position. See Merrill Lynch, Pierce, Fenner Smith v. Byrne, 320 So.2d 436 (Fla. 3d DCA 1975); O'Neill v. State, 336 So.2d 699 (Fla. 4th DCA 1976). The State does not reimburse civil losses occasioned by Chapter 517 violations. It remains to private investors to bring actions for damages to enforce their rights under the Act.
Although the reference to a mortgage might seem facially to remove the instrument from Chapter 517's definition of a "security," thus suggesting that Clifford did not violate the statute, that mere possibility should not have been dispositive of the charge against him. As was stated by the fourth district in O'Neill v. State, 336 So.2d 699, 701 (Fla. 4th DCA 1976), "In determining whether the document is a security requiring registration under the Sales of Securities Law and whether the Defendant as a seller or dealer was required to register, we look not to the form but to the whole of the transaction, to the content of the document." Indeed, as this court noted in Farag v. Nat. Databank Sub., Inc., 448 So.2d 1098, 1101 (Fla, 2d DCA 1984) (citing SEC v. W.J. Howey Co., 328 U.S. 293, 66 S.Ct. 1100, 90 L.Ed. 1244 (1946)), "a security is not always an easily recognized creature.
We note that our interpretation is consistent with the overwhelming weight of authority in other jurisdictions which have considered the matter. (See Oil Lease Service, Inc. v. Stephenson (1958), 162 Cal.App.2d 100, 327 P.2d 628; Trustees of the Protestant Episcopal Church v. Equitable Trust Co. (1942), 26 Del. Ch. 427, 24 A.2d 327; O'Neill v. State (Fla. App. 1976), 336 So.2d 699; State v. Walters (1953), 244 Iowa 1253, 58 N.W.2d 4, cert. denied (1954), 346 U.S. 940, 98 L.Ed. 427, 74 S.Ct. 380; Caldwell v. Trans-Gulf Petroleum Corp. (La. 1975), 322 So.2d 171; People v. Blankenship (1943), 305 Mich. 79, 8 N.W.2d 919; Prince v. Heritage Oil Co. (1981), 109 Mich. App. 189, 311 N.W.2d 741 (interpreting successor statute); State v. Golden (1943), 216 Minn. 97, 12 N.W.2d 617; Gales v. Weldon (Mo. 1955), 282 S.W.2d 522; Hummel v. Kranz (N.D. 1964), 126 N.W.2d 786; State ex rel. Day v. Petco Oil Gas, Inc. (Okla. 1977), 558 P.2d 1163; Commonwealth v. Yaste (1950), 166 Pa. Super. 275, 70 A.2d 685; State v. Pullen (1937), 58 R.I. 294, 192 A. 473; Kadane v. Clark (1940), 135 Tex. 496, 143 S.W.2d 197; see also Upton v. Trinidad Petroleum Corp. (5th Cir. 1981), 652 F.2d 424 (interpreting Alabama law). But see Smith v. Wedding (Ky. 1957), 303 S.W.2d 322; State v. Allen (1939), 216 N.C. 621, 5 S.E.2d 844.) We have relied upon these well reasoned opinions to guide us thro
Wiener v. Brown, 356 So.2d 1302, 1306 (Fla.App. 1978). See also O'Neill v. State, 336 So.2d 699, 701 (Fla.App. 1976). In substance this was to be, and was a sale of tangible assets, and not of a security.
The purpose of the present Florida Securities Act, as with its predecessors, is to protect the public from fraudulent and deceptive practices. O'Neill v. State, 336 So.2d 699 (Fla. 4th DCA 1976); McElfresh v. State, 151 Fla. 140, 9 So.2d 277 (1942). Chapter 517 requires registration of securities. ยง 517.07, Fla. Stat. (1981).
The Florida Legislature enacted the Sale of Securities Act to protect the public from fraudulent and deceptive practices in the securities market. O'Neill v. State, 336 So.2d 699 (Fla. 4th DCA 1976). To effectuate these remedial purposes, the Legislature broadly defined those transactions and instruments which constitute a security in section 517.02(1), Florida Statutes (1973), to include: