In the court below defendants' demurrers to plaintiff's amended complaint were sustained. Plaintiff refused to further amend his complaint, whereupon defendants moved to dismiss the action. The motion was granted and the action dismissed. Plaintiff appeals. He assigns as errors the order sustaining the demurrers and the order dismissing the action. It is in substance alleged in the complaint: That defendant companies are, and at all times alleged in the complaint were, Utah Corporations; that plaintiff is, and at all times alleged in the complaint was, a statistician, analyst, and adviser of the value of stocks, bonds, and various kinds *Page 53 of securities and as such engaged in business at Salt Lake City, Utah; that at the times complained of plaintiff had a list of numerous clients to whom he was, and for two years had been, sending weekly letters advising them of his opinion and analysis of mining stocks and other securities; that during the month of April, 1932, defendant Ogden C. Chase was a director, secretary and treasurer, and defendant S.F. Hunt was a director and the president, of defendant corporation Rio Tinto Copper Company. Paragraph 4 of the amended complaint contains the allegations which form the basis for the questions which divide the parties. We quote it in full:
"That on or about the 1st day of April, 1931, the said defendant Rio Tinto Copper Company, was desirous of giving some of its shares of treasury stock to such members of the public as would receive it, upon the understanding that the Rio Tinto Copper Company would for the purpose of carrying on development of said property levy one two-cent assessment and three one-cent assessments, or as many thereof as might be necessary to finance the development of its mining property and with the understanding that the persons receiving said stock were not obligated to pay such assessments, or any of them, and on or about said date the said Rio Tinto Copper Company and the said Ogden C. Chase and said S.F. Hunt, knowing that the said plaintiff had a large number of clients residing outside of Utah who reposed confidence in the judgment of the plaintiff and who relied upon the advice of the plaintiff with reference to the value of mining stocks and other securities, entered into an agreement with the said plaintiff wherein and whereby the said defendants, Rio Tinto Copper Company, Ogden C. Chase and S.F. Hunt, agreed to and with the plaintiff that if the plaintiff would assist the said Rio Tinto Copper Company in placing its treasury stock with his clients residing outside of Utah upon the aforesaid basis, the said defendants, Rio Tinto Copper Company, Ogden C. Chase, and S.F. Hunt, would transfer, convey, and deliver to the plaintiff 20,000 shares of the Class A capital stock of the said Rio Tinto Copper Company after the aforesaid assessments or as many thereof as might be necessary, had been levied and paid; that the said Rio Tinto Copper Company levied one two-cent assessment and three one-cent assessments, assessment No. 4 having been levied on or about the 17th day of March, 1932, and the collection of said assessment having been consummated on or about the 17th day of May, 1932; that pursuant to said agreement *Page 54 the plaintiff immediately commenced upon said work, circularized his said clients frequently and wrote personal letters to about one hundred twenty-five of his clients, such circulars and letters all having been delivered outside of Utah, recommending the acquisition of the said stock of the said Rio Tinto Copper Company upon the aforesaid basis, and as a result of the efforts of the plaintiff approximately 145,000 shares of stock were accepted by plaintiff's customers; that the plaintiff duly performed all things in said contract upon his part to be performed."
It is further alleged in the complaint that in October, 1932, defendant Mountain City Copper Company acquired all of the assets and property of the defendant Rio Tinto Copper Company, and in consideration therefor agreed to exchange its stock share for share to the stockholders of the Rio Tinto Copper Company and to assume all contracts and liabilities of the Rio Tinto Copper Company; that plaintiff has made demand of defendants that they issue to him the 20,000 shares of stock which they agreed to convey to him, but defendants have failed and refused, and continue to refuse, to deliver the stock. Plaintiff prays judgment that defendants deliver the stock, or, if delivery thereof cannot be had, that he be awarded judgment for the value thereof.
One of the principal questions of law upon which the parties divide is whether or not the alleged agreement relied upon by the plaintiff is or is not void. Defendants contend that the alleged agreement was and is unenforceable and void because inhibited by the provisions of Laws of Utah 1925, c. 87, p. 171, which act is sometimes referred to as the Securities Act, and is commonly known as "the Blue Sky Law." Plaintiff contends that the agreement pleaded in his complaint did not involve a sale, and therefore was not within the provisions of the act.
In the main, the present law touching the matter in hand is the same as it was at the time plaintiff alleges that he entered into the agreement sued upon. Rev. St. Utah 1933, title 82, chap. 1, p. 981 (82-1-1 et seq.). We quote from chapter 87, Laws of Utah 1925, such provisions of the act as we deem bear upon this controversy: *Page 55
"When used in this Act the following terms shall, unless the text otherwise indicates, have the following respective meanings: * * *
"`Sale' or `sell' shall include every disposition, or attempt to dispose, of a security or interest in a security for value. Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing, shall be conclusively presumed to constitute a part of the subject of such purchase, and to have been sold for value. `Sale' or `sell' shall also include an exchange, an attempt to sell, an option of sale, a solicitation of sale, a subscription or an offer to sell, directly or by an agent, or a circular, letter, advertisement or otherwise.
"`Dealer' shall include every person other than a salesman who in this State engages either for all or part of his time directly or through an agent in the business of selling any securities issued by another person or purchasing or otherwise acquiring such securities, from another for the purpose of reselling them or of offering them for sale to the public, or offering, buying, selling or otherwise dealing or trading in securities as agent or principal for a commission or at a profit, or who deals in futures or differences in market quotations of prices or values of any securities or accepts margins on purchases or sales or pretended purchases or sales of such securities provided that the word `dealer' shall not include a person having no place of business in this State who sells or offers to sell securities exclusively to brokers or dealers actually engaged in buying and selling securities as a business.
"`Issuer' shall mean and include every person who proposes to issue, has issued, or shall hereafter issue any security, Any natural person who acts as a promoter for and on behalf of a corporation, trust or unincorporated association or partnership of any kind to be formed shall be deemed an issuer.
"`Salesman' shall include every natural person, other than a dealer, employed or appointed or authorized by a dealer, or issuer to sell securities in any manner in this State. The partners of a partnership and the executive officers of a corporation or other association registered as a dealer shall not be salesmen within the meaning of this definition." Section 2.
"All securities required by this Act to be registered before being sold in this State, and not entitled to registration by notification shall be registered only by qualification in the manner provided by this section." Section 7.
"No dealer or salesman shall engage in business in this State as such dealer or salesman or sell any securities including securities exempted in Section 3 of this Act, except in transactions exempt under Section 4, of this Act unless he has been registered as a dealer or *Page 56 salesman in the office of the commission pursuant to the provisions of this section." Section 10.
"Any person, issuer, dealer, agent or salesman, who, not being at the time exempt or registered pursuant to the provisions of this Act, in any manner or by any means shall issue, sell, assign, transfer or offer to or negotiate for the issuance, sale or assignment, or transfer, of any securities said securities not being exempt or registered at the time of such issuance sale assignment or transfer, pursuant to the provisions of this Act, shall be guilty of a felony and upon conviction thereof shall be punished by a fine of not less than $100.00 or more than $10,000.00, or by imprisonment in the State prison for a term of not more than ten years, or by both such fine and imprisonment." Section 27.
The stock here involved is not one of the kinds of securities which are exempt from the provisions of the Securities Act. Appellant does not contend otherwise. What he does contend is that the act merely regulates the sale of securities and has no application whatever to securities which are given away. It will be observed that "sale or sell" is 1 defined as every disposition, or attempt to dispose, of a security or interest in a security for value. The words "for value" are descriptive of, and constitute a limitation on, the kind of transactions which the Securities Act was intended to regulate. It is a cardinal rule in the construction of a statute that, when possible, effect must be given to all of the language used in an act. If the Legislature had intended that the words "sale or sell" should include "gift or give," it would not have limited the former words to such disposals, or attempted disposals of securities as are made for value. The second sentence of section 2, subd. 3, further indicates a legislative intention to limit the act to transactions where securities are disposed of for value. It provides that, if one security is transferred for value and another shall be given or delivered as a bonus, the latter "shall be conclusively presumed to constitute a part of the subject of such purchase." The provision of the act last quoted was evidently intended to prevent evasion of the act by one or more of the parties to a transaction involving *Page 57 the transfer of security from contending that such transfer was a gift in a transaction where the transferor may have received value for the stock disposed of by him. Had the lawmaking power intended that the act should apply to gifts of securities, it would have been a simple matter to have so provided. In such case there would have been no occasion for the provision with respect to the giving or delivering of security as a bonus "on account of, any purchase of securities or any other thing," being "conclusively presumed to constitute a part of the subject of such purchase."
It will also be observed that the provisions of the act defining a dealer, an issuer, and a salesman are confined to those who have to do with the disposal of securities by means of a sale, and is silent as to such persons as may participate in the disposal of securities by gift. So also the only securities which the act requires to be registered are such as "shall be sold within this State." Section 5. To hold that the act applies to securities which are given away would be to read into the act a meaning which is not expressed or implied by the language used. On the contrary, the clear implication to be drawn from a number of the provisions of the act is that gifts of securities were not intended to be covered by the act.
It will be noted that it is in substance alleged in the complaint that plaintiff was employed to assist in giving the stock of the defendant Rio Tinto Copper Company to such members of the public as were willing to accept it; that the stock was so given with the understanding that the 2-6 company would levy assessments for the development of its mine, but that the persons securing the same were under no obligation to pay such assessments. It is contended by respondents that in giving away the stock with the knowledge that assessments would be levied thereon, and with the hope that such assessments would be paid by the donees, was, within the meaning of the Securities Act, an attempt to sell the stock. If, in the transaction under review, the transferees had agreed to pay the future *Page 58 assessments when levied, it would seem reasonably clear that the transaction would have been a sale. The allegations of the complaint, however, alleged that there was no such agreement. In the absence of an agreement to pay assessments, the transferees of the stock were not obligated to pay the assessments. The law is settled in this jurisdiction that, when the articles of incorporation provide that the stockholders thereof shall not be liable for the corporate debts, the owner of full paid stock of such corporation is not liable for an unpaid assessment. The only means of enforcing the assessment is by a sale of the stock or so much thereof as may be necessary to pay the assessment. Dotson v. Hoggan, 44 Utah 295, 140 P. 128. In light of the allegations of the complaint that the persons to whom the stock was given assumed no liability to pay assessments, it is to be assumed the articles of incorporation of the defendant Rio Tinto Copper Company contain a provision that the stockholders thereof were not liable for its debts. Such a provision is usually contained in the articles of incorporation of mining companies. If the allegations of the complaint are true, which we must assume for the purpose of demurrer, it follows that there was neither a sale nor an attempt to sell the stock in question. A mere hope or anticipation that the transferees of the stock would pay the assessments if and when levied may not be said to be a disposition or an attempt to dispose of the stock for value within the meaning of the act. A gift does not become a sale merely because the donor hopes to receive something for the gift.
Counsel for the respective parties have at considerable length argued two other questions, viz.: Assuming the transaction alleged in the complaint was a sale within the meaning of the Securities Act, may the defendants avail themselves of such fact to escape liability? Was the transaction alleged in the complaint interstate commerce and as such not subject to the provisions of the Act? Having reached the conclusion that the transaction as alleged by plaintiff is not covered by the provisions of the Securities Act, it becomes *Page 59 unnecessary to determine the other questions presented. We therefore express no opinion concerning them. From what has been said, it follows that the judgment dismissing the action should be, and it accordingly is, reversed.
This cause is remanded to the district court of Salt Lake county with directions to reinstate the action and overrule the demurrers. Appellant is awarded his costs.
FOLLAND, MOFFAT, and WOLFE, JJ., concur.