syndicate, and the salesman of the shares therein, and the trustee created and designated by the terms of sale of said shares in said syndicate to the subscribers thereto, who by said sale became the beneficiaries of the trust of which the said King, acting in the name of Shareholders' Syndicate, is the trustee.

"The grand jurors further say that the only evidence of the contract or agreement between the said trustee and the shareholders in said syndicate and of the plan or basis of operation of said syndicate, and the status thereof, is contained in the certificate which was issued by said trustee, the said defendant, to the shareholders in said syndicate, and which is in words and figures as follows, to wit:

666

"Louisville, Ky.

-A Trust Estate.""This certifies that Mrs. Mary L. Gray is the holder of one units

of interest, fully paid and nonassessable, in the Shareholders' Syndicate, subject to all the terms of its declaration of trust, dated September 1, 1921, and recorded in its trustee's office in Louisville, Kentucky, and transferable on the books of the organization in person or by attorney upon surrender of this certificate properly indorsed.

"In witness whereof, the said organization has caused this certificate to be signed by its trustee, and its seal to be hereunto affixed at Louisville, Kentucky, this the 22d day of December, 1921.

"Thos. M. King, Trustee. "Shareholders' Syndicate. "A Trust Estate

"'1921
"[Seal.]

"Louisville, Ky."

Units

$10.00 Each.

It is clearly apparent from the form of the certificate, as well as from what it is alleged the Shareholders' Syndicate is and is not. that it is a common-law trust of the Massachusetts type, and that it is

not therefore, strictly speaking, or technically, a corporation, a company, a copartnership, or an association. It is also clearly apparent that these denials in the indictment were not intended to, and do not, mean that it is not an investment company as defined above, or such an association of persons as is necessary in the formation or creation of a trust estate, since immediately following these negations it is alleged to be a trust estate, and an association of persons. And as defendant confessed the truth of these latter allegations, he will not, after judgment, be allowed to take advantage of the seeming but not real contradictions in the language employed in describing a trust estate, so evidently intended to be described, despite the inartificial manner in which it is done, if we must give to the denial that the Shareholders' Syndicate is a company or organization of persons the effect of annulling the allegations that it is a trust estate and such association of persons as is required to create such an organization, which is neither a corporation nor a copartnership, nor yet an ordinary company or association, but which nevertheless has some of the attributes of all these more common organizations for the co-operative employment of the means of many people in a business venture.

We may therefore dismiss without further discussion the contention that the Shareholders' Syndicate is not an investment company under the act because it is neither a person nor a corporation, and is alleged not to be a copartnership, a company, or an association.

This brings us to a consideration of whether or not a common-law trust is "a person, corporation, copartnership, company, or association" within the contemplation of the legislature in enacting this act, for, unless so, such an organization or thing is not required to have securities it may sell previously approved by the banking commissioner.

We cannot refrain from saying at the outset that, if the language employed does not include a commonlaw trust, it is in our confident judgment, in view of the evil the legislature was trying to cure, or at least mitigate, the result of inadvertence rather than design, because unquestionably the general purpose of the legislature was to forbid the sale in this commonwealth of every kind of investment contract, whatever its name and however issued, that in the judgment of the banking commissioner did not have a chance, at least, to produce income for the investor, without which it could not properly be called a "contract, stock, bond, or other security," as these terms are constantly employed throughout the act.

Conceding that, if this general purpose is not clearly expressed, there are both sound reason and eminent authority to the effect that we ought not to stretch the fair meaning of the language of this, a penal statute, to make it conform to our ideas of the general purpose the legislature had in view, we are yet of the opinion such authority is not applicable here because of a conviction that the very language employed in forming this section of

Trusts-how far

Law.

the act, fairly conwithin Blue Sky strued, includes a common-law trust, and that the general legislative purpose may be considered in construing the meaning of the language employed.

It will be noticed the definition is: "Every person, corporation, copartnership, company, or association, organized or which shall hereafter be organized in this commonwealth, whether incorporated or unincorporated, which shall either himself, themselves, or itself, or by or through others, sell or negotiate for the sale of any contract, stock, bonds, or other securities issued by him, them, or it within the commonwealth of Kentucky, shall be known for the purposes of this act as a domestic investment company."

We do not see how language could

have been more general and allinclusive, for it expressly includes individuals and all-"his, them, and it"-associations of individuals organized or that may be organized, whether incorporated or not. Besides, the legislature has, in subsequent sections of the act, carefully enumerated every kind of investment contract or security that it did not intend its issuer should have approved before offering it for sale.

Hence it seems to us too plain for argument that the definition of an investment company literally and necessarily includes a common-law trust, the distinguishing features of which are too well understood to require explanation, even though in this state they have not been so frequently encountered as they would be in the immediate future, if appellant's contention should be upheld by this court in the face of the unanimous opinion of many courts that have rejected it as unsound in construing almost identical language in similar statutes. See People v. Clum, 213 Mich. 651, 15 A.L.R. 253, 182 N. W. 136, and Home Lumber Co. v. Hopkins, 107 Kan. 153, 10 A.L.R. 879, 190 Pac. 601, directly in point; and the following cases, more or less related: Re Girard, 186 Cal. 718, 200 Pac. 593; State v. Gopher Tire & Rubber Co. 146 Minn. 52, 177 N. W. 937; McCamey v. Hollister Oil Co.Tex. Civ. App., 241 S. W. 689; Schmidt v. Stortz, 208 Mo. App. 439, 236 S. W. 694.

2. The argument in behalf of the contention that the act so construed abridges the right to own property and freely contract with reference thereto, in contravention of rights declared to be inalienable and guar- law-forbidding anteed to all per- sale of securities sons by the state of banking and Federal Con- commissionerstitutions, is in our judgment wholly lacking in merit.

Constitutional

without approv

validity.

This could not possibly be true. with regard to a common-law trust without being true with reference. to individuals and unincorporated

associations; nor is the law more restrictive of inalienable rights than are laws universally recognized as within the police power of the state, requiring that individuals, for the common weal, before practising the profession of law, or medicine, or what not, shall prove their fitness to and procure a license from a designated tribunal.

There is no claim that the state banking commissioner is vested with arbitrary power, or that the act, if within the legislative power of the state, is unfair, arbitrary, or unreasonable in its terms or the manner or methods provided for enforcing it.

The whole contention is that the state is without power to enact any law regulating or restricting the power to contract of an individual or association of individuals who do not, like corporations, receive the power to contract from the state, upon the sole ground that to do so would deprive such individuals of their inalienable and constitutional rights of life, liberty, and property without due process of law, etc.

There is nowhere among free people any doubt of or disposition to contest the right of the individual to freely contract with reference to his property, or that this right is fully protected by the state and Federal Constitutions; but, as one individual's absolute right of freedom in all matters ends where another's begins, it is universally recognized that, in order to secure the right to all and for the common good, the sovereign state within its indefinable police power may, and often must, prescribe reasonable regulations for the exercise thereof.

There being, as before stated, no claim that any administrative feature of the law is arbitary or unreasonable, we need not devote space to prove it to be a valid exercise of

the police power, since like laws enacted in most of the states have been upheld, and the contention of defendant denied, not only by the state courts without exception, but by the Supreme Court of the United States as well.

We therefore deem it a sufficient answer to defendant's contention to cite without further elaboration the case of Hall v. Geiger-Jones Co. 242 U. S. 539, 61 L. ed. 480, L.R.A. 1917F, 514, 37 Sup. Ct. Rep. 217, Ann. Cas. 1917C, 643; the many cases cited in the comprehensive note following that case as reported in L.R.A.1917F, 514; Merrick v. N. W. Halsey & Co. 242 U. S. 568, 61 L. ed. 498, 37 Sup. Ct. Rep. 227; Caldwell v. Sioux Falls Stockyards Co. 242 U. S. 559, 61 L. ed. 493, 37 Sup. Ct. Rep. 224-with all of which we heartily agree in so far as they are involved here, and hold that a state, under its police powers, may regulate the sale of investment securities by individuals, or any kind of association of individuals, as does our Blue Sky Law, without infringing upon any personal or property right guaranteed by the state or Federal Constitution.

Judgment affirmed.

NOTE.

"Blue Sky Laws" are the subject of annotation in 15 A.L.R. 262, and 24 A.L.R. 523, which are supplemented in the annotation following STATE V. EVANS, post, 1169. Specifically, as to the applicability of those laws to Massachusetts trusts, see subd. III. of the annotation in 24 A.L.R. 523, 528.

The general subject of "Massachusetts trusts" is treated in the annotations in 7 A.L.R. 612, and 10 A.L.R. 887, supplemented by the annotation following Betts v. Hackathorn. A.L.R.