delivered the opinion of the Court.
Respondents Cole and Gould sued to recover from Brown the sum of $10,000.00 expended in an alleged purchase of securities sold to them by petitioner, Brown, in violation of Article 600a, Vernon’s Civil Statutes, and commonly known as the Texas Securities Act. Judgment in favor of respondents has been affirmed by the Court of Civil Appeals. 276 S.W. 2d 369. We agree with that result.
The facts are set forth in great detail in that opinion and we shall only summarize them as briefly as possible.
A mining operator in Mexico, Howard Fields, required funds for further development of his properties. His authorized representative, Kane, proposed that Brown and others lend $30,-000.00 to Fields for that purpose. The loan would be paid within a reasonable time with interest at five per cent. It was further proposed that Fields would convey his mining properties to a corporation, Garbo Minera S.A., and one-fourth of the capital stock of Garbo Minera would be transferred to another corporation, Industrial Ores de Mexico. The stock in the latter corporation would then be issued to the lenders of the $30,000.00 proportionately as a further consideration. Brown was at the time a salesman for Beer & Company, a dealer in securities, and a partner in the firm of Brown & Ivey. Brown and Ivey participated in the loan in the amount of $5,000.00, Gould and Cole for $5,000.00 each and others, not parties to this litigation, came in for varying amounts.
Brown presented the venture to Gould, and furnished him with a copy of a memorandum and prospectus that included a description of the properties owned by Fields, a financial statement and other information.1 Gould in turn then made known the proposal to Cole. The matter was discussed between Gould and Brown on several occasions, and upon request Gould mailed to Cole a copy of the memorandum and prospectus. Gould and Cole not being satisfied entirely as to the merits of the venture, Brown proposed that he and Cole’s auditor, Bloch, would go *627to Mexico and make a first-hand investigation. Brown defrayed the expenses of this trip for both himself and Bloch, without any agreement or understanding that the respondents, or anyone else, would reimburse him for any part of this expense.
Upon their return, Bloch’s report being satisfactory, both Cole and Gould decided to participate to the extent of $5,000.00 each, and Bloch himself invested $1250.00.
In accordance with instructions from Brown, Gould and Cole made their checks payable to E. L. Brown, Agent. Brown acknowledged receipt of the checks, writing each respondent as follows:
“This letter will acknowledge receipt of your check for $5,000.00 which will be deposited to the E. L. Brown, agent account at the Republic National Bank, Dallas, for transmittal to William G. Kane and will in turn be transmitted to Howard H. Fields. It is understood that the loan will be repaid by Fields through Kane as promptly as is advisable. This will also make it of record with Mr. Kane that your subscription is received for l/8th of all authorized stock of Industrial Ores de Mexico, S.A. De C.V., and that the total stock of the company now consists of 27,000 shares of preferred and 30,000 common — all one peso par. The total subscription cost to you will be $500.00 payable on or before July 1, 1953. It is mutually understood that this is for private investment purposes and that I am acting as agent for the group.”
Brown promptly transferred these funds to Kane, in Mexico.
Some months later the parties hereto ascertained that the affairs of these two Mexico corporations had been misrepresented to them by Fields and Kane, and it became more or less apparent that the investment would be a total loss. Later, the certificates of stock in Industrial Ores de Mexico were tendered to respondents, and by them rejected. Thereafter respondents assigned and delivered to Brown all of their right, title and interest “in and to all of the property, property rights and increment described in the attached instrument (letters of receipt from Brown, otherwise described as Exhibits 3 and 6) intending by this general description to include all of my right, title and interest in and to the $5,000.00 loan and the stock subscription rights described in Exhibit A,” thus seeking to comply with Section 33a of Article 600a, Vernon’s Texas Civil Statutes.
*628It is admitted that Brown was not registered as a dealer under the Texas Securities Act, and that the Secretary of State had issued no permit authorizing the issuanqe and disposal of the alleged securities. Therefore the question here presented for determination is whether or not petitioner Brown made a sale of “securities” to the respondents.
So far as we are aware, this is the first time a case invoking the penalties of Section 33a has reached the appellate courts, though in Smith et al v. Fishback et al., 123 S.W. 2d 771, writ refused, decided prior to the adoption of Section 33a, an exchange of stock in a corporation for oil royalties was held to constitute a sale of securities within the purview of the Securities Act requiring a permit from the Secretary of State, and the plaintiffs were allowed to cancel and rescind their contract.
Petitioner asserts that the Securities Act does not apply to this transaction, for the following reasons: (1) That he made no sale of any securities to respondents, but was merely a co-purchaser or joint adventurer with them; (2) that he was an agent only of respondents and other investors in transmitting their money to Kane for delivery to Fields; (3) that in the transaction he was not dealing with securities within the terms of the Act; and (4) that the transaction was exempt under Section 3(k) of the Securities Act.
As to the first point, petitioner argues that Kane was the seller, and Gould and Cole merely joined with petitioner and others in making the loan to Garbo Minera or Fields and the acquisition of stock in Industrial Ores de Mexico. The facts do show that Brown invested his funds along with respondents’, and, like them, sustained a total loss; that he received no profit or commission on the transaction; that he knowingly did not make any false representations of fact; and that respondents did not rely on any statements made to them by petitioner, but, on the contrary, conducted their own investigation, through their own auditor, and relied solely on the auditor’s report. Petitioner maintains that all subscribing parties to this loan were acting together as co-purchasers; that Brown merely served as the agent of respondents in transmitting their money to Kane, and that petitioner and respondents acquired equal rights from the same person and made the same investment in the same manner.
Admittedly, the Act does not undertake to regulate pur*629chasers or to protect sellers against purchasers. Only sellers and sales are regulated. Fowler v. Hults, 138 Texas 636, 161 S.W. 2d 478; Lewis v. Davis, 145 Texas 468, 199 S.W. 2d 146.
The fact that Brown also became a purchaser and a participant does not ipso facto prevent his being a seller. Obviously a dealer could purchase a part of the securities he offered for sale and sell a part to others. The provisions of the Securities Act are broad and comprehensive. Section 2(e) defines the term “sale,” or “offer for sale” or “sell” as including “every disposition, or attempt to dispose of a security for value,” and provides that “any security given or delivered with or as a bonus on account of, any purchase of securities or other thing of value, shall be conclusively presumed to constitute a part of the subject of such purchase and to have been sold for value.” The Act further defines the term “sell” as meaning “any act by which a sale is made, and the term ‘sale’ or ‘offer for sale’ shall include a subscription, an option for sale, a solicitation of sale, an attempt to sell, or an offer to sell, directly or by an agent or salesman.”
Under the terms of the Act it is true that Kane was a seller, but if that fact alone would relieve petitioner of his responsibility then Kane could have denied acting in the capacity of a seller by showing that Fields was the seller. Clearly there may be more than one. As we interpret the Act the seller may be any link in the chain of the selling process or in the words of the Act he is one who performs “any act by which a sale is made.” Suppose that Kane had agreed to pay Brown a commission on securing the participation of respondents and others in this venture, then it could hardly be denied that under the facts here shown Brown would have earned that commission because his efforts resulted in the participation by respondents.
Petitioner claims that he was acting only as the agent or intermediary of respondents in accepting the funds and forwarding them to the seller, solely for convenience and orderly handling. He says this is completely shown by all the facts and circumstances, and particularly by the letters of acknowledgment (Exhibits 3 and 6) written to respondents with the notation that he was acting for the group. In support of his position petitioner cites Herren v. Hollingsworth, 140 Texas 263, 167 S.W. 2d 735, where the Securities Act was held not to apply. In that case, however, Herren was neither to sell nor to buy. He was authorized to find a driller who would explore Hollings-worth’s ranch for oil and gas, and a contract, if agreeable to *630the driller and Hollingsworth, would then be negotiated between them. This cause of action, like that in Fowler v. Hults, supra, was not condemned by the Securities Act. Granting that Brown was the agent of respondents, as he must have been in the transmittal of the funds to Kane, that was only a part of and resulted-from dealings had theretofore with respondents. The respondents had agreed to participate in the deal prior to the time the letters of acknowledgment were written. Petitioner could not, by designating himself as agent, escape his responsibility for the negotiations with Gould and Cole leading up to their purchase. Brown himself admitted that originally the matter was submitted to him by Kane, and that it was from his presentation of the proposal to respondents that they became interested. He testified, referring to Gould and Cole:
“Q. And the entire conversations with reference to the matter were with you, were they not, with one exception of the trip to Mexico which Mr. Bloch made with you; is that correct?
“A. Yes, I should say so.”
In Michigan it is sufficient to hold one liable to the purchaser if he actively assists in the unlawful sale of the stock, by way of introducing salesmen and recommending the securities, notwithstanding the fact that he made no representations and was not the procuring cause of the sale. And this is also true though he had invested his own money, believing he would make a profit, and had received no commission on the sale. Lewis v. Bicker, 235 Mich. 656, 209 N.W. 832; Chambers v. Beckwith, 247 Mich. 255, 225 N.W. 605; Thompson v. Cain, 226 Mich. 609, 198 N.W. 249.
But Brown displayed considerably more salesmanship activity than was shown in the Michigan cases. After he initially discussed the proposal w'th Gould a conference was held in Brown’s office with Cole, Gould and Bloch present and Brown wrote for further information. A few days later Brown called Bloch and showed him etters received in response to that inquiry. Brown then wr-. •> for further details and again talked to Bloch showing him F ..dditional information received. The trip to Mexico was then '"ie at Brown’s suggestion and at his expense. When the resp : ■ nts agreed to make the investment Brown gave instructions • to how the checks were to be made and the money remitted. ■; is clear that but for Brown’s activi*631ties and repeated efforts the respondents would not have participated in the transaction.
It is well settled that the Act does not apply to a joint adventurer and to transactions between joint adventurers. Joint adventurers and partners are not to be denied the right to recover their interest merely because of a failure to comply with the Securities Act and we think it equally true that a dissatisfied joint adventurer may not recover from other joint adventurers merely because of the failure of the latter to comply with the Act. Polk v. Chandler, 276 Mich. 527, 268 N.W. 732.
To constitute a joint adventure there must be a community of interest and participation in the profits. It is in the nature of a partnership engaged in the joint prosecution of a particular transaction for mutual profit. Holcombe v. Lorino, 124 Texas 446, 79 S.W. 2d 307.
For a joint adventure to exist there must be a community of interest both as to the profits and losses, if any. It is said in Luling Oil & Gas Co. v. Humble Oil and Refining Co., 144 Texas 475, 191 S.W. 2d 716, that whether or not such relationship exists generally depends upon the intention of the parties. In that case the relationship was held not to be a joint adventure or partnership. The contract did not authorize either party to create any liability to third parties which would have been binding on the other.. The relationship being in the nature of a partnership, losses must be shared as well as profits.
In our case, if there was a community interest it could be said to exist only in that the petitioner as well as the respondents alike invested their funds. Each was to be repaid the amount of his loan. But, in addition thereto, and as a consideration for making the loan, each was to receive his pro rata amount of the stock in Industrial Ores de Mexico. Each was at liberty to sell, dispose of, or hold that stock, as he saw fit.
An illustration of a joint adventure is given in Worth Finance Co. v. Hillard Motor Co., Tex. Civ. App. 1939, 131 S.W. 2d 416. The two defendants purchased an automobile for the purpose of selling it for a joint profit to both of them. They both expressly warranted the title, and divided the profits.
In our case it would have been possible, through the sale of the stock in Industrial Ores de Mexico, for the several investors to realize a profit in varying amounts, depending upon *632the time of sale of the stock. There was no joint control of the enterprise. Neither petitioner nor respondents were officers or directors of Industrial Ores de Mexico or exercised any authority over its operations. It was entirely under the management of Fields and Kane. We conclude, therefore, that the elements of joint adventure are not present in this case.
In support of his contention that the transaction constituted a joint adventure petitioner cites two cases from the Supreme Court of Michigan, Hathaway v. Porter Royalty Co., 296 Mich. 90, 295 N.W. 571, 138 A.L.R. 955, and Polk v. Chandler, 276 Mich. 527, 268 N.W. 732. In the latter case fourteen men desired to and actually did purchase 240 acres of land presumably to hold or develop at a profit. Because the owner would sell only to those financially responsible, the land was taken in the name of two of the parties and certificates of participation issued to all describing the interest owned by each. The court held this to be a joint adventure and the provisions of the Blue Sky Law were not applicable. In the former case a joint adventure is defined as an enterprise jointly undertaken to carry out a single project for profit with profits shared as well as the losses. In addition it was said that there must be a community interest as well as some control over the subject matter or property rights of the contract. We think neither of these cases aid petitioner in his claim of joint adventure.
Petitioner maintains that the Court of Civil Appeals erred in holding that Exhibits 1, 3 and 6 must be denominated securities within the terms of the Act. Exhibit 1 is the memorandum furnished by petitioner to the respondents, and quoted as a footnote in the Court of Civil Appeals opinion. Exhibits 3 and 6 are the letters written by petitioner to respondents acknowledging receipt of the money for transmittal to Kane. These were the papers returned by respondents when they demanded reimbursement from Brown. The petitioner insists that under no theory could these documents be termed securities, for the reason that one was simply a prospectus or a statement of the plan, and the others were merely receipts, upon which no suit could be brought and were binding on no one; that Brown could not and did not sell to the respondents the prospectus or the receipts. We think that position is untenable.
These were the only instruments issued to the respondents and clearly recited the nature of the tranaction. They must be construed as “evidence of indebtedness.” The term “security” is broadly defined in the Act, in part, as any preorganization *633certificate or receipt or note or other evidence of indebtedness. Art. 600a, Sec. 2(a). The definition sufficiently covers and includes receipts of the character here given. Under the Federal Securities Act of 1933 the giving of a promissory note or an evidence of an indebtedness in exchange for the personal loan is held to be a sale of securities in purview of the Act. Llanos v. United States, 206 F. 2d 852.2 At any rate the stock in Industrial Ores de Mexico to be issued to respondents as a part of the consideration for the loan was a “security.” That stock was not delivered to the respondents at the time they gave their checks to Brown because it had not been issued by the corporation. Later the certificates of stock were tendered to the respondents and rejected. The actual consideration for the money paid by the respondents was the promise to repay and to assign to each one-eighth of the total capital stock in Industrial Ores de Mexico.
Petitioner argues, however, that the recited consideration for this stock was an additional payment of $500.00 and that the $500.00 was never paid. The facts are that Brown suggested, that the sum of $500.00 be agreed upon as an arbitrary figure set for tax purposes only. The $500.00 was not to be paid by the parties for the stock but was to be retained by the Industrial Ores de Mexico out of funds received from Garbo Minera. The only and total consideration on the part of Gould & Cole was the $5000.00 each remitted to Brown.
We conclude that the transaction did constitute a sale from Brown to respondents and that respondents sufficiently complied with the provisions of Sec. 33a of the Act by reconveying to Brown all of the interest purchased by them and all evidence of indebtedness.
Petitioner argues that if he is to be stamped as a seller then likewise Gould made a sale to Cole and Cole in turn made a sale to Bloch and that all this would lead to “a complete standoff and interminable and inconclusive litigation” the result being that they were all one at the same time, sellers as Well as purchasers. This argument is unsound first because a violation of the law by one person would not excuse another’s violation. If Gould had sold to Cole it would not relieve Brown on his sale to Gould. In the second place we think, so far as the sales made to Gould and Cole were concerned, Brown was the *634principal actor. While he had little, conversation with Cole he did deal directly with Bloch, who was Cole’s auditor and agent.
The last Point is that the Act did not apply to the transaction described because it came under an exemption in Subdivision (k), reading:
“The sale of an interest in any partnership, pool, or other company, not a corporation, the total membership of which does not and will not after such sale exceed ten (10) and the organization expenses of which do not or will not exceed two (2%) per cent of the total invested capital of such company.”
There seems to be some dispute as to whether or not the total membership exceeded the stated number of ten, and we do not find any testimony as to whether or not the organization expenses exceed two per cent of the total invested capital of the company. It would seem to be the burden resting upon petitioner to prove the facts which would exclude him from the operation of the Act. But, at any rate, it appears that the interest sold in this case was in a corporation, — namely, Industrial Ores de Mexico, and therefore the exemption does not apply.
True enough to hold Brown liable to respondents is a harsh penalty and a rather inequitable result. The respondents were not misled by Brown who made no profit or commission and likewise sustained a total loss of his investment. The respondents knew that it was a speculation and presumably at the time considered that they stood to lose. Naturally if the venture had turned out to be in their favor no doubt they would gladly have accepted the profit. On the other hand, the case is not one dealing with equitable pi wles, but with the application of the Securities Act that wasp-:-' ¿s^ed to prevent the very thing that happened here, namely, 1 ' • lie of worthless stock. Despite our natural sympathy for tl "itioner under these circumstances we must sustain respond; ■ ' cause of action which may be summarized as follows:
1. Petitioner was an icensed “dealer” in securities.
2. Petitioner made a de” of a security to respondents.
3. Petitioner failed to secure a permit for the sale of the security.
*6354. Petitioner is liable to respondents for the full purchase price of the security, plus interest.
The judgment of the Court of Civil Appeals is affirmed.
Opinion delivered March 28, 1956.
This memorandum is shown in full as a Note to the Court of Civil Appeals opinion, 276 S.W. 2d 371.
Compare Federal Securities Act, 15 U.S.C.A., 77b, (1) (3) with the Securities Act, Art. 600a, Vernon’s Ann. Civ. Stats., Sec. 2, (a) (e).