I dissent for the reason expressed in the former opinion of this court filed March 12, 1954, which read:
From an order granting defendants’ motion to set aside an information charging (1) both defendants with violating the Corporate Securities Act, and (2) defendant Sears in seven counts with grand theft, the People appeal.
Viewing the evidence as we must in the light most favorable to supporting the action of the trier of fact, the rule being established that unless an appellate court “is able to say that a clear abuse of discretion is made to appear, it will not divest the trial court of the discretionary power reposed in it. It will rather be presumed in favor of the action of the court that its discretion was properly exercised, and the burden rests on the appellant to show an abuse.” (4 Cal.Jur.2d (1952), Appeal and Error, § 592, p. 469.)
The record discloses that on November 25, 1949, defendant Sears made an application to the Corporation Commissioner of the State of California to sell stock in Western Research Laboratories, Inc., of which said defendant was a director and chairman of the board. An amended application was also filed on December 13, 1949, with the California Corporation Commissioner. The commissioner proposed to issue what was known as a “closed permit,” meaning that stock could not be sold to the general public but only to certain persons named in the permit, and on the conditions therein set forth. Before any permit was issued, however, the applicant requested that the application be withdrawn and an abandonment order was issued on April 26, 1950. On February 15, 1950, articles of incorporation of the Sierra Nevada Oil Company were filed in Nevada, defendants being the organizers thereof.
Thereafter the complaining witness and a representative of other persons living in and near Artesia contacted defendants, stating they desired to purchase stock in the Sierra Nevada Oil Company. They were each informed that defendants had no authority to sell such stock but that on the contrary, it would be necessary for anyone desiring to invest money in the company to write directly to Nevada in order to obtain such certificates of stock.
As an example, Mr. Harm Bensema, the manager of the United Dairymen’s Association, located in Artesia, California, stated that the fact oil was being drilled for was “common *856talk” in the community, and he approached defendant Kiers because he had heard so much about the drilling and wanted to tell Mr. Kiers he was willing to take some of the stock even though he knew Mr. Kiers could not sell it; that he went to the well site and at that time met defendant Sears, but to the best of his recollection did not speak to Mr. Sears about stock, but immediately upon returning home from the well site he purchased stock in the Nevada corporation; that he was too busy to write a personal letter, but asked defendant Kiers to “do the errand” for him.
There is no evidence that any representations were made to Mr. Bensema relative to the stock and so far as the record indicates he purchased the same under his own volition without discussing the matter with anyone, sending his check and order to Nevada.
After a period this same general situation obtained as to the other stockholders in the corporation.
Thereafter the various stockholders in California met on several occasions at the home of Mr. Vogel, one of the investors. These individuals had a long distance telephone conversation with defendant Sears at one of these meetings. Subsequently Mr. Vogel, Mr. Bensema and the other stockholders loaned sums of money to defendant Sears, receiving the latter’s personal notes therefor, and with the knowledge that defendant Sears was to lend the money to the Sierra Nevada Oil Company and that no stock could be issued therefor, but that possibly in the future they might be able legally to obtain shares of stock in payment1 of the money they had advanced if they so desired. If at such time they did not want the stock, the money would be repaid. The money was loaned by defendant Sears to the Sierra Nevada Oil Company and used in the course of its business.
In June of 1951 the affairs of the company were brought under the jurisdiction of the United States District Court of Nevada, pursuant to Chapter X of the Bankruptcy Act, and all rights, claims and disputes were amicably adjusted by all the parties concerned with the help of the court and the representatives of the Securities and Exchange Commission. Since then the affairs of the Sierra Nevada Oil Company have been supervised by the Reorganization Court in Nevada, and everyone interested has been represented before that court. Proceedings were long and complicated and a plan of reorganization has been approved and confirmed.
*857During this extended period all contentions were aired in open court before representatives of the various interests involved. The Security and Exchange Commission was at all times aware of and participated in the proceedings in Nevada and knew of the California Corporations Commissioner’s activities. The complaining witnesses in the present case were represented, among others, before the United States District Court and participated in the proceedings. All of the loans involved in the present case were disposed of as direct obligations of the corporation debtor with the consent of everyone concerned.
Since from the foregoing evidence it is clear that all the investors knew that the Sierra Nevada Company could not sell stock in California and were so advised by defendants, the evidence sustains the finding that neither defendant solicited the sale of the stock of the Sierra Nevada Company in California. The trial court’s finding that each defendant had been indicted without reasonable or probable cause to show a violation of the Corporation Securities Act is sustained by the evidence.
' Turning to the counts charging defendant Sears with grand theft, the record discloses that defendant Sears informed the borrowers he could not sell stock in the Sierra Nevada Oil Company; that the money which they advanced to him was a personal loan and his wife would sign the notes. The record also discloses that Mrs. Sears did not sign the notes. So far as appears from the record this was a mere inadvertence and no witness at the preliminary examination seemed to attach any importance to her failure to do so. The reason is apparent. In the present case the notes, which would form the basis of the grand theft count as stated above, were recognized in the bankruptcy proceedings as obligations of the corporation because Mr. Sears had advanced the money to the corporation and each lender was found to be an unsecured creditor of the oil company.
A certified copy of the order of the United States District Court, acting as a reorganization court, that all of the lenders, including the complaining witnesses herein, would look to the debtor corporation, Sierra Nevada Oil Company, for payment of the loans, was before the trial court on the motion from which an appeal has been taken. Clearly the trial court in the instant case was justified in holding that the evidence did not support a finding that there was reasonable or prob*858able cause to believe that defendant Sears had committed grand theft.
B. C. Turf & Country Club, Ltd. v. Daugherty, 94 Cal.App.2d 320, 329 et seq. [210 P.2d 760], is in accord with the views expressed herein.
Respondents’ petition for a hearing by the Supreme Court was denied May 27, 1954.