130 F.2d 300 (2nd Cir. 1942), 325, Hackner v. Morgan

Docket Nº:325.
Citation:130 F.2d 300
Party Name:HACKNER et al. v. MORGAN et al. EASTMAN v. GUARANTY TRUST CO. OF NEW YORK et al.
Case Date:August 04, 1942
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 300

130 F.2d 300 (2nd Cir. 1942)

HACKNER et al.

v.

MORGAN et al.

EASTMAN

v.

GUARANTY TRUST CO. OF NEW YORK et al.

No. 325.

United States Court of Appeals, Second Circuit.

August 4, 1942

Meyer Abrams, of Chicago, Ill., and Bennett I. Schlessel, of New York City (Shulman, Shulman & Abrams, of Chicago, Ill., of counsel), for appellant.

Page 301

Davis, Polk, Wardwell, Gardiner & Reed, of New York City (Ralph M. Carson and Francis W. Phillips, both of New York City, of counsel), for defendants-appellees.

Before CHASE, CLARK, and FRANK, Circuit Judges.

CHASE, Circuit Judge.

This suit was originally brought by three plaintiffs, Hackner, Bowman and Ballinger, as a class action for themselves and others similarly situated as one-time holders of 6% Gold Notes of the Van Sweringen Corporation. The complaint alleged that the plaintiffs had been wrongfully induced to accept an offer of the Van Sweringen Corporation made on October 29, 1931, to exchange their notes which will be described more fully below. The relief sought was an accounting, damages for the losses sustained and a receiver to distribute the proceeds to the rightful claimants.

The present plaintiff, Eastman, was not one of the original plaintiffs, but she entered the suit later upon the solicitation of Hackner. Jurisdiction was based upon diversity of citizenship, and the defendants moved for dismissal asserting that less than $3, 000 was involved in the claims of each of the three original plaintiffs. This motion was granted by the District Court and was affirmed by us as to all except the present plaintiff, in an opinion pointing out that this was not a true class action. 117 F.2d 95, certiorari denied 313 U.S. 559, 61 S.Ct. 835, 85 L.Ed. 1520. Thereupon the complaint was amended to conform to that decision and to eliminate all reference to a class suit. After the service of the answer and the filing of requested admissions, answers to interrogatories and a deposition of plaintiff, the defendants moved for summary judgment under Rule 56, Federal Rules of Civil Procedure, 28 U.S.C.A.following section 723c. Plaintiff countered with a cross-motion for summary judgment based upon defendants' motion papers. The District Court granted the defendants' motion and dismissed the case upon the merits.

Plaintiff has appealed and in connection with the appeal has moved that two of the original plaintiffs, Hackner and Ballinger, be allowed to intervene as appellants and that the record be amended to include Senate Report No. 714 Part 3, 77th Congress, 2d Session. This motion is denied in its entirety. Aside from other possible objections to the admission of the Senate Report on motion for summary judgment, the plaintiff has shown no reason why it, or the testimony upon which it was based, could not have been presented to the lower court for inclusion in the record. The intervention of additional parties as appellants under Rule 21 is improper unless they are directly affected by the judgment. Here the summary judgment was rendered only against Eastman, and in view of our former decision that this was not properly a class suit the other defendants were not prejudiced thereby, but might still attempt to show injury to themselves under the different circumstances surrounding their acceptance of the offer.

The gravamen of the complaint is the inducement of Eastman to exchange her $10, 000-worth of Van Sweringen Corporation notes for 50% cash and 50% common stock of that company. These notes were part of a $30, 000, 000 issue of five year 6% Gold Notes sold to the public in May, 1930. They were secured by a 'Trust Indenture' naming defendant Guaranty Trust Company as trustee and providing among other things that until half the issue was retired and cancelled, the Van Sweringen Corporation would maintain 'segregated assets' free from lien or pledge equal to at least 50% of the face falue of the outstanding notes. The indenture further recited a contemporaneous agreement that in the event that the value of the 'segregated assets' declined below the 50% level, Messrs. O. P. and M. J. Van Sweringen would deliver to the Van Sweringen...

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7 practice notes
  • 52 F.Supp. 869 (S.D.N.Y. 1943), Driscoll v. Fitch
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • April 6, 1943
    ...with a request by one of its designated officers and an opinion of counsel selected by the issuing company. Hackner v. Morgan, 2 Cir., 130 F.2d 300, certiorari denied, Eastman v. Guaranty Trust Co., December 14,1942, 317 U.S. 691, 63, S.Ct. 266. Under the escrow agreement, the only obligati......
  • 530 P.2d 679 (Wash.App. Div. 1 1975), 2237, Grandy v. Luther
    • United States
    • Washington Court of Appeals of Washington
    • January 10, 1975
    ...a trustee to whom the fund has been turned over for administration. Solomon v. Boschulte, 200 F.2d 482 (3d Cir. 1952); Hackner v. Morgan, 130 F.2d 300 (2d Cir. 1942); Edisto National Bank v. Bryant, 72 F.2d 917 (4th Cir. 1934); In re United Cigar Stores Co. of America, 70 F.2d 313 (2d Cir. ......
  • 340 F.2d 343 (Fed. Cir. 1964), 382-61, Bar Ray Products, Inc. v. United States
    • United States
    • Federal Cases Court of Federal Claims
    • October 16, 1964
    ...States v. Kiefer, 97 U.S.App.D.C. 101, 228 F.2d 448 (1955), cert. denied 350 U.S. 933, 76 S.Ct. 305, 100 L.Ed. 815; Hackner v. Morgan, 130 F.2d 300 (2d Cir., 1942), cert. denied, Eastman v. Guaranty Trust Co., 317 U.S. 691, 63 S.Ct. 266, 87 L.Ed. 553. It would appear that the purpose of the......
  • 390 S.W.2d 16 (Tex.Civ.App.
    • United States
    • Texas Court of Appeals of Texas Court of Civil Appeals of Texas
    • March 29, 1965
    ...of fraud are representation, falsity, deception, scienter 1 and injury. Hackner v. Morgan, Circuit Court of Appeals, Second Circuit, 130 F.2d 300. There is certainly sufficient probative evidence from which the trial court, as the fact finding body, could find a complete lack of scienter on......
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7 cases
  • 52 F.Supp. 869 (S.D.N.Y. 1943), Driscoll v. Fitch
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • April 6, 1943
    ...with a request by one of its designated officers and an opinion of counsel selected by the issuing company. Hackner v. Morgan, 2 Cir., 130 F.2d 300, certiorari denied, Eastman v. Guaranty Trust Co., December 14,1942, 317 U.S. 691, 63, S.Ct. 266. Under the escrow agreement, the only obligati......
  • 530 P.2d 679 (Wash.App. Div. 1 1975), 2237, Grandy v. Luther
    • United States
    • Washington Court of Appeals of Washington
    • January 10, 1975
    ...a trustee to whom the fund has been turned over for administration. Solomon v. Boschulte, 200 F.2d 482 (3d Cir. 1952); Hackner v. Morgan, 130 F.2d 300 (2d Cir. 1942); Edisto National Bank v. Bryant, 72 F.2d 917 (4th Cir. 1934); In re United Cigar Stores Co. of America, 70 F.2d 313 (2d Cir. ......
  • 340 F.2d 343 (Fed. Cir. 1964), 382-61, Bar Ray Products, Inc. v. United States
    • United States
    • Federal Cases Court of Federal Claims
    • October 16, 1964
    ...States v. Kiefer, 97 U.S.App.D.C. 101, 228 F.2d 448 (1955), cert. denied 350 U.S. 933, 76 S.Ct. 305, 100 L.Ed. 815; Hackner v. Morgan, 130 F.2d 300 (2d Cir., 1942), cert. denied, Eastman v. Guaranty Trust Co., 317 U.S. 691, 63 S.Ct. 266, 87 L.Ed. 553. It would appear that the purpose of the......
  • 390 S.W.2d 16 (Tex.Civ.App.
    • United States
    • Texas Court of Appeals of Texas Court of Civil Appeals of Texas
    • March 29, 1965
    ...of fraud are representation, falsity, deception, scienter 1 and injury. Hackner v. Morgan, Circuit Court of Appeals, Second Circuit, 130 F.2d 300. There is certainly sufficient probative evidence from which the trial court, as the fact finding body, could find a complete lack of scienter on......
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