Section 2

Citation: Section 2
Parent Document: United Housing Foundation, Inc. v. Forman, 421 U.S. 837 (1975)
Jurisdiction: United States (federal)
Effective Date: 1975-10-06
Original Source: https://www.courtlistener.com/opinion/109272/united-housing-foundation-inc-v-forman/ ↗

Full Text

1,411 chars

Respondents’ reliance on Joiner as support for a “literal approach” to defining a security is misplaced. The issue in Joiner was whether assignments of interests in oil leases, coupled with the promoters’ offer to drill an exploratory well, were securities. Looking to the economic *850inducement provided by the proposed exploratory well, the Court concluded that these leases were securities even though “leases” as such were not included in the list of instruments mentioned in the statutory definition. In dictum the Court noted that “[instruments may be included within [the definition of a security], as [a] matter of law, if on their face they answer to the name or description.” 320 U. S., at 351 (emphasis supplied). And later, again in dictum, the Court stated that a security “might” be shown “by proving the document itself, which on its face would be a note, a bond, or a share of stock.” Id., at 355 (emphasis supplied). By using the conditional words “may” and “might” in these dicta the Court made clear that it was not establishing an inflexible rule barring inquiry into the economic realities underlying a transaction. On the contrary, the Court intended only to make the rather obvious point that, in contrast to the instrument before it which was not included within the explicit statutory terms, most instruments bearing these traditional titles are likely to be covered by the statutes.15

Other Sections in This Document (195)

Full Text