(dissenting).
I am of the opinion that the proofs disclose that the sale of the securities in question were made within the State of Michigan, to residents of the State of Michigan by appellants, residents of the State of Michigan and doing business therein. There was no interstate sale of securities.
The Securities Exchange Act, 48 Stat. 906, exempted from its provisions, “Any security which is a part of an issue sold only to persons resident' within a single State or Territory, where the issuer of such security is a person resident and doing business within or, if a corporation, incorporated by and doing business within, such State or Territory.”
It is held in the prevailing opinion that the issuer of the securities was not doing business within the State of Michigan. The issuer was a life-long resident of the State of Michigan. He operated and staffed an office from which he offered and sold the securities in question. This office was maintained also for the transaction of business in the oil and gas industry; and the business and management relating to the leases and oil wells in Ohio, here involved, were conducted from this office. Many of the purchasers of the securities inspected the oil wells in Ohio, or had their legal and tax counsel do so; others were experienced in the investment in oil securities; and others were personal friends of the issuer. All investors were provided either with information concerning these securities, substantially the same as that required by the Securities and Exchange Commission’s General Instructions for the Use of Schedule D, used in the sale of working interests in oil and gas leases; or such information was readily available to them. None of the investors was solicited through the mails or by use of any advertising media.
In order to be subject to the jurisdiction of the court, there must be interstate trade or commerce in the securities or transportation, or communication relating to the securities among the several States or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or *161within the District of Columbia. 15 U.S.C.A. Section 77b (7).
There was no interstate commerce in securities in the above case. There was no interstate transportation relating to the securities in question; and there was no interstate communication relating to trade or commerce in such securities.
Although Securities Act Release No. 4434 is cited in support of the proposition that substantial operational activities must be performed in the state of incorporation in order that the securities of such corporation be exempt from the provisions of the Federal Securities Exchange Act, no language in the Act, itself, purports to provide that performance of substantial operational activities is an essential to a corporation’s “doing business” in the state of its incorporation. One can sustain an exemption from the provisions of an Act by merely showing that no language of the Act, specifically or by implication, applies to him.
As stated in the prevailing opinion, the proponents of the Act made it clear that it was not designed to apply to those securities which were being supervised effectively by State regulation; and nothing appears in this case to show that the securities issued were not being supervised effectively by State regulation, or would not be so supervised effectively in the future.
It is remarked in the prevailing opinion that this case presents a good illustration of the type of security transactions to which the Act was intended to apply due to the difficulty of supervision through State regulation, and that “Even assuming that most of the books and records of the issuer were available to the Michigan Securities Commission for inspection, the income producing operations are located beyond the reach of the Michigan Commission’s jurisdiction. Effective regulation of the offering might well have required inspection of the oil and gas wells located in Ohio, the questioning of persons engaged in drilling operations in Ohio, and familiarity with the geology of Ohio.” This and similar arguments do not appear persuasive. The Michigan law provides for such an inspection, and for the questioning of the aforementioned parties; and the Michigan Commission has jurisdiction over the income-producing operations of the oil and gas wells located in Ohio.
In the Blue Sky Law of Michigan (Uniform Securities Act) of 1964, (Section 19.776(401), (a) of the Michigan Statutes Annotated) C.L.Mich.1948, § 451.801(a) [P.A.1964, No. 265], it is provided:
“ ‘Administrator’ means the Michigan corporation and securities commission, or any other agency authorized by law to enforce the provisions of this act.”
In Section 19.776(407) of the Michigan Statutes Annotated, C.L.Mich.1948, § 451.807 [P.A.1964, No. 265], it is provided that such administrator in its discretion:
(1) May make such public or private investigations within or outside of this state as it deems necessary to determine whether any person has violated or is about to violate any provision of this act or any rule or order hereunder, or to aid in the enforcement of this act or in the prescribing of rules and forms hereunder.
(2) May require or permit any person to file a statement in writing, under oath or otherwise as the administrator determines, as to all the facts and circumstances concerning the matter to be investigated.
(3) May publish information concerning any violation of this act or any rule or order hereunder.
(b) For the purpose of any investigation or proceeding under this act, the administrator, or any officer designated by it, may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of any books, papers, correspondence, memoranda, agreements or other documents or rec*162ords which the administrator deems relevant or material to the inquiry.
(c) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the circuit court for the county of Ingham, upon application by the administrator, may issue to the person an order requiring him to appear before the administrator, or the officer designated by it, there to produce documentary evidence if so ordered or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt of court.
(d) No person is excused from attending and testifying or from producing any document or record before the administrator, or in obedience to the subpoena of the administrator, or any officer designated by it, or in any proceeding instituted by the administrator, on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which he is compelled, after claiming his privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying.
Other sections of the statute here applicable are set forth in the margin.1
These provisions of the Michigan Statutes disclose that the Michigan Corporation and Securities Commission may require inspection of the oil and gas wells located in Ohio; may question persons engaged in drilling operations in Ohio, and persons who are familiar with the geology of that State; and conduct a completely adequate investigation to secure a full disclosure of the affairs of the company whose income-producing operations are in another state; and the Michigan Commission has, not only the sub-peona power but, the power to make a public or private investigation outside the state, administer oaths, compel attendance of witnesses, take evidence, issue cease and desist orders, and refer violations to the Attorney General of *163Michigan, who may institute the appropriate criminal proceedings under the Act.
Instead of being an example of the difficulty of supervision through State regulation as compared to supervision through federal regulation, it would seem that the Michigan Corporation and Securities Commission, dealing with a Michigan corporation, could better investigate, inspect, regulate, and supervise the security transactions relating to the oil wells in Ohio than the Federal Securities and Exchange Commission. A state commission, having jurisdiction, could ordinarily deal with greater dispatch in such a ease than a federal commission. It would commence with a more intimate knowledge of the business transactions between citizens of the same state than a federal commission. Moreover, it would not be burdened with so many investigations, inspections, and such supervision as a federal commission. There is no reason in this case why it should be assumed that the securities and business of a Michigan company could be more effectively supervised by a federal commission than by the Michigan Corporation and Securities Commission. The State has a long history of Blue Sky legislation, and it has a competent staff, which has had much experience in these matters.
The mere circumstance that the drilling of an oil well is done in the State of Ohio does not detract from the fact that the appellant in this case — a life-time resident of Michigan- — was doing business within the State of Michigan, since appellant operated and staffed the office in Michigan from which he offered and sold the securities in question to residents of Michigan, and carried on from this office the business in the oil and gas industry and the business and management aspects of the leases of the oil wells which were located in Ohio.
In my opinion, the judgment of the District Court should be reversed.
. Section 19.776(408) of the Michigan Statutes Annotated, C.L.Mich.1948, § 451.808 [P.A.1964, No. 265] provides:
“ [Cease and desist order; injunction; mandamus; appointment of receiver or conservator.] Sec. 408. Whenever it appears to the administrator that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this act or any rule or order hereunder, it may in its discretion issue a cease and desist order or bring an action in the circuit court for the county of Ingham to enjoin the acts or practices and to enforce compliance with this act or any rule or order hereunder. Upon a proper showing a permanent or temporary injunction, restraining order, or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant’s assets. The court may not require the administrator to post a bond.”
Section 19.776(409) of the Michigan Statutes Annotated, C.L.Mich.1948, § 451.809 [P.A.1964, No. 265], provides:
“[Violation; punishment; prosecution.] Sec. 409. (a) Any person who wilfully violates any provision of this act except section 404, or who wilfully violates any rule or order under this act, or who wil-fully violates section 404 knowing the statement made to be false or misleading in any material respect, shall upon conviction be fined not more than $5,000.00 or imprisoned not more than 3 years, or both.
(b) The administrator may refer such evidence as is available concerning violations of this act or of any rule or order hereunder to the attorney general or the proper prosecuting attorney, who may, with or without such a reference, institute the appropriate criminal proceedings under this act.
(c) Nothing in this act limits the power of the state to punish any person for any conduct which constitutes a crime by statute or at common law.”