SEC v. Howey (Supreme Court, 1946)

Using the U.S supreme court case above, answer the questions below, in detail:

1) Case Facts

2) Procedural History

3) Issue(s) in Question

4) The Court's Holding

5) Explanation of Final Disposition

6) My Opinion

*Here is an example below. It is the exact same case but please your own words, using detailed, formal language like in the example.

SECURITIES & EXCHANGE COMMISSION v. W.J. HOWEY CO. ET AL. 328 U.S. 293; 66 S. Ct. 1100; 90 L. Ed 1244; 1946 U.S. LEXIS 3159; 163 ALR 1043 Decided: May 27, 1946 Opinion issued by: Justice Murphy Case Facts: The relevant facts were stipulated by the parties. Respondents W. J. Howey Co and Howey-in- the-Hills Service, Inc. (\"Howey\") are Florida corporations owning large tracts of citrus acreage. Howey, over the past several years, plants 500 acres annually, keeping half of the acres for itself and offering the other half to the public. The lot sales are as little as 0.65-acre narrow strips of land arranged such that an acre consists of a row of 48 trees. Prospective customers are offered both a land sales contract and a 10-year service contract, both being offered as investing in the grove without the service contract is not feasible. The customer is free to contract with other service companies, however about 85% of the acreage sold was covered by a Howey service contract. 42 of the 51 contracts used the Howey service contract. The purchasers are mostly non-Florida residents, and it was admitted that the mails and instrumentalities of interstate commerce were used on the sale of the land and the service contracts. It was also stipulated that no registration statement or letter of notication had ever been led with the SEC pursuant to the Securities Act of 1933 (the \"Act\"). Section 2(1) of the Act denes a security to include documents traded for investments or speculation. An \"investment contract\" is undened in the Act but is a common term in many state \"blue sky\" laws and has come to mean a contract or scheme for the \". . . placing of capital or laying out money in a way intended to secure income or prot form its employment.\" State v. Gopher T ire & Rubber Ca, 146 Minn. 52, 56, I 77 NW 93 7, 938. Procedural History: The Circuit Cout of Appeals, 151, F.2d at 717, sustained the lower District Court's nding that the contracts were separate agreements and therefore did not require a registration under the Act. The nding of the lower courts was that the existence of an \"investment contract\" had to be made independently by the District Court, and the District Court had found against its existence. The District Court decided that the lack of a requirement to purchase the service contract would prevent the requirement to register as a security. Issue(s) in Question: 1. Do the circumstances of the sales contract (the land sales contract, the warranty deed, and the service contract) constitute an \"investment contract\" within the meaning of Section 2(1) if the Act therefore requiring registration under Section 5(a) absent any exemptions under Section 3(b). The Court's Holding Yes. The Court held that the totality of the sales contract constituted an \"Investment Contact\" as covered under the Act and would require registration absent an exemption. The Appellate decision was reversed. Explanation of Final Disposition The Court determined that Howey was offering something more than a Fee Simple interest in the land and something different from a services management contract. I believe the Court was correct in its assessment that Howey was in fact offering an opportunity to invest money and share in the profits of a large citrus operation that was partly owned by Howey. Those who were purchasing the investment had no specic desire to occupy the land or personally work and farm the land and the units sold were of such a limited size that any independent farming would have been impractical. All these factors show that the elements of a prot-seeking business venture were present where the promoters (Howey) managed, controlled, and operated the enterprise. The fact that the service contract was not required did not persuade the Court as the Act prohibit the \". . .offer as well as the sale of unregistered, non-exempt securities.\" The Court believed it was sufficient for the Respondent to merely offer the essential elements of an investment contract. The Court determined the test for a security would be \"...whether the scheme involves an investment of money in a common enterprise with prots to come solely from the efforts of others\