Federal Jurisdiction - Securities and Exchange Commission - Application of Rule X - 10B-5 to Transactions Involving Non-Securities

Plaintiff brought an action for damages and the cancellation of certain instruments under section 10 (b) of the Securities Exchange Act of 1934 and rule X-10B-5 promulgated thereunder by the Securities and Exchange Commission. She proved a series of interrelated acts which took place over a period of months by which the defendants fraudulently deprived her of both securities and other property. The defendants objected to the jurisdiction of the district court on the ground that rule X-10B-5 was not applicable to transactions involving non-securities. The district court retained jurisdiction on the theory that all of the acts complained of were part of a single transaction which was within the scope of the rule. On appeal, held, affirmed. Rule X-10B-5 is applicable to the securities in a single transaction or scheme involving a combination of securities and non-securities. Errion v. Connell , (9th Cir. 1956) 236 F. (2d) 447

Business Associations - Uniform Limited Partnership Act - Corporation as a Limited Partner

The Port Arthur Trust Co., a Texas corporation, sought to enter into a limited partnership agreement as a limited partner. Its capital contribution was to be three trusts established by the prospective general partner wherein the trust company had been named trustee. The secretary of state refused to file the instrument creating the limited partnership on the grounds that it was necessary for a corporation to have express charter powers before it can, enter into a limited partnership, and that a corporation is not a \u27person\u27 within the meaning of the Texas Uniform Limited Partnership Act. The corporation then applied to the Texas Supreme Court for a writ of mandamus to compel the secretary of state to file the certificate of limited partnership. Held, a writ of mandamus will be granted. A corporation qualified to act as a trustee is authorized to become a limited partner under the Texas Uniform Limited Partnership Act. Port Arthur Trust Co. v. A.M. Muldrow, (Texas 1956) 291 S.W. (2d) 312