THE SECURITIES ACT OF 1933

Authors

Laylin K. James, University of Michigan Law School

Abstract

In 1907 a Pennsylvania superior court stated in one of its opinions that, "'there is no reason why a man should not be a fool.' As a corollary to that saying, it may be added that there is no reason why a court should protect a fool against the result of his folly. No new feature of rapacity in the buyer is apparent in this instance [ the purchase of property worth $ 5,000 prospectively for $ 500] to make him a worse offender against the law of fair dealing than an army of Shy locks who have preceded him. The patriarch Jacob bought a large landed estate from an improvident brother for the price of a frugal breakfast and the common parent when appealed to upheld the bargain. A 'catching bargain' much later in date than that between Jacob and Essau was passed upon in Davidson v. Little, 22 Pa. 245, when the owner of land worth $8,000 conveyed his interest for $200. The court held that the transaction was suggestive of fraud, but that the contract was binding if the vendor was of full age, of sound mind, acquainted with the necessary facts and subjected to no mental imprisonment." The changes made in the applications of the fundamental common law doctrine during the twenty-six years that have since elapsed would make some of the old common law lawyers turn over in their graves. If one is to judge by the recently published statements on securities control many present-day lawyers, business men and bankers are preparing their minds for a communion of commiseration with those great stalwarts who have preceded them.

Recommended Citation

Laylin K. James, THE SECURITIES ACT OF 1933, 32 Mich. L. Rev. 624 (1934).
Available at: https://repository.law.umich.edu/mlr/vol32/iss5/3