Legate v. Maloney

• Decision Date: 02 July 1965
• Docket Number: No. 6287.,6287.
• Citation: 348 F.2d 164
• Parties: William H. LEGATE, Claimant, Appellant, v. J. Joseph MALONEY, Jr., Receiver, et al., Appellees.
• Court: U.S. Court of Appeals — First Circuit

348 F.2d 164 (1965)

William H. LEGATE, Claimant, Appellant, v. J. Joseph MALONEY, Jr., Receiver, et al., Appellees.

No. 6287.

United States Court of Appeals First Circuit.

July 2, 1965.

Marcien Jenckes and Choate, Hall & Stewart, Boston, Mass., for New York Stock Exchange, appellee, on motion.

Mark M. Horblit and Samuel H. Kalish, Boston, Mass., for William H. Legate, appellant, on memorandum in opposition to motion.

Before ALDRICH, Chief Judge, and WOODBURY, Senior Circuit Judge.

ALDRICH, Chief Judge.

This case began as a somewhat unusual one, and we have now an even more unusual matter before us, a motion to recall mandate on the ground of error in our opinion, reported 334 F.2d 704. Movant is New York Stock Exchange, hereinafter the Exchange. Review was previously sought, unsuccessfully, by petition for rehearing, and by petition for certiorari, 379 U.S. 973, 85 S.Ct. 664, 13 L.Ed.2d 564. Some months after the latter denial the Exchange filed the present motion, citing cases that had been decided in other circuits subsequent to our refusal of rehearing.

As recited in our earlier opinion, the Securities and Exchange Commission petitioned into receivership in the district court a brokerage partnership, hereafter the firm. One Legate was a limited partner and also a creditor of the firm. He appeared in the receivership proceedings in both a defensive and offensive capacity. The firm held membership in the Exchange. For internal reasons the Exchange paid off the claims of the so-called public creditors, which excepted Legate, taking assignments in substantial amounts. Through its nominee, a Mr. Jenckes, a member of the Massachusetts bar, it appeared in the receivership proceedings to recover whatever might be realizable upon the claims. Part of what was realizable were charges against Legate in his capacity as limited partner. Besides seeking to avoid the claims against him, and to establish various claims of his own against the estate, Legate filed a claim for damages against the Exchange. This alleged, in substance, that he had become a partner and had suffered loss due to sundry malfeasance and nonfeasance of the Exchange. The district court dismissed this claim for want of jurisdiction. It pointed out that the Exchange had not been served with process, and stated that prosecuting assigned claims through a nominee did not cause it to be present. It added that to permit Legate to prosecute an independent claim against the Exchange would "hinder the receivership." S. E. C. v. duPont, Homsey & Co., D.C., 204 F.Supp. 944, at 946. On appeal, inter alia, we reversed this ruling and ordered further proceedings which, apparently, have not yet been had.

The only appearances on appeal were Legate and the receiver, both by counsel. As we noted in a footnote, leading counsel for the receiver was Jenckes. We noted also that Jenckes, in his fiduciary capacity as the Exchange's nominee, was a principal, if not the principal party in interest in the receivership proceedings. The receiver's brief, insofar as it dealt with this aspect of the case, contended that the Exchange had not been served with process, was not doing business within the jurisdiction, and could not be identified with Jenckes. It also argued that Legate's claim against the Exchange lacked legal merit. No mention was made of any of the Rules of Civil Procedure, or, more specifically, of Rule 13 dealing with cross-claims and counter-claims. Pointing out that the district court was in error in reciting that "the Exchange is asserting no claim against the assets of the receivership," 334 F.2d at 708, fn. 6, we held that the Exchange could not come in and prosecute claims by nominee...