I am of the opinion that the legislature did not intend that the term "investment contract" as set forth in Minn. St. 1941, § 80.01 (Mason St. 1927, § 3996-1), should extend to and include contracts for the sale of real estate in individual lots, whether for cemetery purposes or for residential purposes in a platted and dedicated city addition. If the legislature intended otherwise, it would have so expressed itself and not left it to individual speculation to determine whether the sale of cemetery lots, either outright or by contract for deed, such as is here involved, constituted the sale of "investment contracts" resulting in violation of the act if such sales were not first registered thereunder.
I do not feel that State v. Gopher Tire Rubber Co.146 Minn. 52, 177 N.W. 937, and like cases are applicable to the situation here presented. In the Gopher Tire Rubber Co. case, we held that the sale of a "certificate" entitling the purchaser to participate in the profits of a corporation constituted an "investment contract" under the act. In the instant case, there is involved merely the sale of lots under contracts for deed, and the purchaser, after payment of the purchase price and delivery of the deed, is vested with title to the real estate so sold. Any expectation of profit does not relate to his participation in the profits of the cemetery association as such, but rather to the general rise in the value of his real estate independent of the association and unrelated thereto.
The fact that the seller of such lots agrees to set aside ten percent of the proceeds of all sales for maintenance and improvement of the cemetery, in my mind, does not distinguish such sales from the sale of lots in newly platted additions wherein the deeds contain covenants that the grantors shall maintain water supply or sewage *Page 375 systems or other like projects. See, Country Club D. S. Co. v. Village of Edina, 214 Minn. 26, 8 N.W.2d 321. The sale of lots in such an addition beyond the immediate residential requirements of the purchaser, in the hope that such purchase may lead to future profits, can scarcely be held to subject all sales in the addition to the requirements of the act. Nor does the fact that in the instant case the contracts for deed contained certain restrictions as to use or subsequent sales differentiate such sales from the sale of residential lots in city additions such as above described, where like restrictive provisions are set forth in the deeds thereto, particularly insofar as use of the property, building requirements thereon, and subsequent sales thereof are concerned.
As stated in State v. Ogden, 154 Minn. 425, 427,191 N.W. 916, 917:
"* * * The purpose [of the sale] was not to convey undivided interests in the land. The purchasers did not intend to become freeholders or landowners. * * * the unit holders were to participate in profits in proportion to their holdings and were to be interested in the same proportion in the corporation holding the title and operating. * * * The paternalisticpurpose of the statute is to prevent offering to the public,not land contracts, but investment contracts, evidencing aright to participate in the proceeds of a venture, without the commission first ascertaining whether there is behind the venture something so tangible that a sound policy of regulation permits exposing the investing public to them. This is an investment contract within the statute." (Italics supplied.)
In the instant case, there are involved land contracts which do not evidence a right of the purchasers thereof to participate in the proceeds of the venture, or in the profits of the association, or to a beneficial interest therein, and, in consequence, under the above definition, it would seem that such contracts are not subject to the terms and provisions of the act.
There is no claim that defendant here was guilty of fraud. The cemetery is now being maintained in accordance with all the *Page 376 covenants set forth in the conveyances. None of the purchasers have resold their lots or offered to do so. Apparently they still feel that their purchases are good and that ultimately they will gain therefrom. Defendant is an ex-serviceman with an honorable overseas record in World War I. He has been active in service organizations and has at no time been involved in any violations of the law. In justice to him it would seem that before he be held guilty of a criminal act in the sale of these lots the language of the securities act should have clearly and definitely set forth that the sale of cemetery lots fell within the classification of "investment contracts" and hence constituted a violation of the provisions of the act.