Show MORTUARY PLAN IS 5 UNDER FIRE Sale of Deseret Certificates cates Held Up By State Board The Deseret Mortuary company has no right to sell c until the company receives receive a per per- permit per permit mit from the State Securities com corn commission mission according to the tho opinion received by the Ogden Chamber o of Commerce late yesterday y evening Salesmen for the Deseret Mor Mor- Mortuary company have been active In Ogden during during- tho the pa pat past t few da del s sellIng Service Certificates Certificate said 1 certificates giving the owner I a aright aright right to receive all service ma- ma materials materials ma material and supplies excepting clothing required In connection with the funeral burial or remo remo- removal removal val vat of the human dead on the thc cost plus 10 per cent plan The Ogden Chamber of Com Corn Commerce Commerce merce has been Investigating the sale of these certificates and was wu wa Informed by Heber C Hicks di- di director di director rector of the Utah State Securities Securities Securities ties commission that the tho Deseret Mortuary company will wilt not be permitted permitted per per- to sell any ens more cates until the company 1138 has ha r re- re re received a permit from front the Securities Securities Securities ties commission Mr Hicks lUcks further stated th that t the he does doel not look with favor tavor upon the tho selling of these certificates sunder under the plan now used by the thc Mortuary company compan In view of ot the fact that ther there is no that the certificates will be rc- rc re redeemed deemed and that under the pres pros present present ent system officials of the tho Mor Mor- Mortuary Mortuary Mor- Mor Mortuary com company pan could decide to to go out of business and divide the as- as aset Bet set et leaving the tho certificate hOl hoid- hoid hold holders ers era with no no- noone one to redeem th certificates The opinion of ot Harvey H II attorney general was written at atthe the tho request leet of the State Securities Securities ties commission Mr Hicks was Instructed by the commission to Inform the officials of the Mortuary company that they must Immediately quit selling felling certificates cates until such Buch time as they re- re a The opinion opinion of Attorney General duff Cluff follows follow GeneralI I CLUFFS CLUFF'S OPINION Replying to your our letter of of Au- Au August August Au August gust in which you call my attention to the tho articles of Incorporation incorporation Incorporation of the Deseret Mortuary company and the certificate of oC service said company Is fa sellinG and ask for my opinion as to whether or not this seT ser Ice certificate certificate can be classed as a II security security ity lIy under the state slate law I 1 beg bee to advise you ou as a follows s I I I h have ve given this careful con con- consideration consideration con consideration and have also over the articles of Incorporation of the said Bald company I find from the articles and the certificate that th the holder Iolder of such certificate ate has bas basno no voice whatever In the tho manage manage- management management ment of the affairs of the tho company com company pany and It is provided In article 13 of the articles of of said sald company that it may i by byan tan an an affirmative vote voto of ot a D ma- ma ma majority I of the outstanding made at any regular meeting or special meeting held lel l for tor the tho pur- pur purpose pur purpose pose lose sell assign mortgage convey conveyor conveyor or otherwise Ise dispose of all the property and n assets sets of ot the corpor corpor- corporation corporation atlon The articles also provide that the private property of the stock stock- stockholders stockholders stockholders holders shall not be bo liable for tor the tho debts of the corporation TE ANALYZED The certificate of ot service a sample of which you submitted gives the owner thereof a II right to receive all services materials and except clothing requIred In connection with funeral burial or removal of ot the human dead on the tho cost basis plus ten percent per pcr cent plan Of course the corn com company com company pany has the right to fix the cost and also to say what the Is worth This certificate there therefore fore Is In my opinion an evi evidence dence of Indebtedness or of Inter lter Interest est cst in a sharing profit agreement other other Iii In other words the company Is- Is issuing Is Issuing suing this tins certificate Is bound to furnish the holder Iolder with the things s above mentioned at cost plu plus tel ten per cent cont so that the certificate Is Isan Isan Inan an evidence of oC Interest in the tho company compau at least and is to that extent a D security for the holder to secure secure the things agreed upon Subdivision 1 of section 2 1 o of the state law as passed by the 19 legIslature defines security as tol- tol follows fol follows lows Security shall Include any note stock treasury stock toek bOll bond debenture evidence of Indebted Indebted- Indebtedness Indebtedness ness fleas certificate of interest or par Par- participation certificate of Interest iii ina II a sharing profit-sharing agreement certificate cab cate of ot Interest In an oil gas 01 or mining lease collateral trust cor- cor pre subscription s tion any share investment con con- contract contract contract tract or beneficial Interest In or title to property profits profit or earn earn- earn earn- ings logs earnings or other Instrument any com corn commonly known as a II security In- In n- n eluding any plan Illan or scheme here here- hereIn In town lots or acreage acre acre- age or any other in fact or In lease leasehold hold shall be used In connection with the gift or sale salo of any security as herein defined TIE RE E WORTHLESS The holder of oC this may wait walt any numbers of years year years 2 25 G 30 or even more before h he would have bave occasion to call uj upon on the com company pliny for tor hI his rights and privileges under the certificate and If C In the meantime the company were to do as Its articles author author- i I izod namely Dispose of ait all Its and go out of business this 1 would be absolutely worthless There seem Beem to ba no basic assets bael back of the certificate except the hope bope or promise that thai p h e company will continue the bu business and be able to perform the tho promises and agreements in inthe inthe inthe the certificate It If the certificate were sold Bold for tor torII fora ora II a nominal fee of oC say which would be ample consideration for lit it In my judgment judg there could be no ho special objection but If It any considerable sum Is 1 paid for It there should be some sort lort of Guar guar guar- guarantee I antee other than appears from the th papers apers you furnished me mo that the service will be bo forthcoming when when- whenever whenever ever needed It Js is not like IlkI a II com corn company company pany pany that is 19 dealing lit Iii II commod Ity Ity that Is used every ov ry day such as as gasoline fc for fer example where the tho holder of o the certificate might dally daily secure lecure the benefits In view of oC all al althe the facts In ii Incon In con con- connection connection con connection with this company the tho provisions of the articles of incorporation and the certificate which Is being sold I am of oC tho the opinion that the tho same does come within the provisions of said ald section of our law above referred to and that the commission should a as assume aCme sume me jurisdiction over this com corn compan company pany pan Yours truly Signed HARVEY IL H CLUFF Attorney General |