Schollmeyer v. Saxowsky
| Decision Date | 01 October 1973 |
| Docket Number | No. 8885,8885 |
| Parties | Blue Sky L. Rep. P 71,119 Charles W. SCHOLLMEYER and Angaletta D. Schollmeyer, Plaintiffs and Appellees, v. Gilbert SAXOWSKY, Defendant and Appellant, The Liberty National Bank and Trust Company, Defendant. Civ. |
| Court | North Dakota Supreme Court |
Syllabus by the Court
1. If a judgment is rendered which does not adjudicate all claims and the trial court has not rendered an order under Rule 54(b), N.D.R.Civ.P., and the judgment is thereafter amended to include an adjudication of all claims, the time for appeal from the judgment does not begin to run until the notice of the entry of the amended judgment is served upon the adverse party.
2. Error is never presumed upon appeal. The burden resting upon appellant is not sustained by showing mere error; he must show the error was prejudicial.
3. Instructions to a jury must be considered in their entirety. If the effect of the whole is to outline the issues in the case fairly and correctly, an isolated improper statement contained therein will not be considered prejudicial error.
4. Clause in subordinate debenture contract that prohibits recourse by purchaser against officers or directors for payment of principal or interest on said debenture is invalid as contrary to public policy because it tends to the oppression of the rights of purchasers as expressed in § 10--04--17, N.D.C.C., and restrains the legal rights conferred by that section of North Dakota law.
5. In order for a director of a corporation to be held liable under Section 10--04--17, N.D.C.C., to a purchaser of corporate securities sold to him in violation of the Securities Act, he must have participated or aided in some way in making the sale.
6. Ordinarily, directors of a corporation are not liable to creditors of the corporation for the torts of the corporation; however, where the sale of corporate securities, which were sold in violation of the Securities Act, is concerned, a director, or directors, jointly or severally, may incur liability to the purchasers thereof irrespective of the care and diligence he, or they, exercised as a corporate director if he, or they, participated or aided in any way in making such illegal sales.
7. What constitutes participation or aid in any way in making a sale of securities cannot be determined by a fixed rule of law. Each case must be determined upon its own facts.
8. The question of participation or aid in any way in making an illegal sale of securities is a question for the jury unless the evidence is such that reasonable men can draw but one conclusion therefrom. If an inference may be drawn from the facts presented that the directors or officers, or any of them, participated or aided in any way in making such sales, and a jury so finds, liability ensues.
9. Statute providing for liability to officers and directors and others of seller of illegal securities does not require that the participation or aid in making an illegal sale by by personal contact with the buyer but is sufficient if, In any way, the directors' or officers' participation or aid made the sale possible.
10. On an appeal from an order denying a motion for judgment notwithstanding the verdict, the only grounds which will be considered are those which were assigned on the motion for a directed verdict.
11. On review of an order denying a motion for judgment notwithstanding the verdict the Supreme Court is limited to a consideration of the evidence, and if the record is such that there is some issue of fact for the jury and it rendered a verdict thereon, the order will be affirmed.
12. Upon an appeal from an order denying a motion for judgment notwithstanding the verdict or in the alternative for a new trial, the Supreme Court will review the correctness of the order with respect to properly assigned specifications of error and insufficiency of the evidence that were before the trial court.
13. For the reasons stated in the opinion, the orders of the district court denying motions for directed verdict and for judgment notwithstanding the verdict or in the alternative for a new trial were proper.
14. The trial court is expert on value of legal services and may consider its own knowledge and experience in making an appraisal of the reasonable value of legal services rendered.
15. When a trial judge presided at the trial, had knowledge of the character of the litigation, observed the skill of the presentation, received evidence of the preparation for trial, and had knowledge of the results obtained, and having considered these factors coupled with his own knowledge and experience, made an award of attorney's fees as being reasonable, such determination will not be overturned on appeal in the absence of an affirmative showing that the trial court abused its discretion.
16. For the reasons stated in the opinion, the awards in the judgment of the district court were reasonable.
17. For the reasons stated in the opinion, the judgment and orders of the district court are affirmed.
Mackoff, Kellogg, Kirby & Kloster, Dickinson, for defendant and appellant.
Freed, Dynes & Malloy, Dickinson, for plaintiffs and appellees.
On December 18, 1965, Charles W. and Angaletta D. Schollmeyer (hereinafter Schollmeyers) purchased a subordinate debenture from Edward Engelhardt, who was a salesman for State Acceptance Corporation (hereinafter SAC). The Schollmeyers were not aware of the fact that the debenture they purchased was subordinate or that it contained a no-recourse clause until they received the actual debenture a few days after the purchase.
The facsimile signature affixed to the debenture was that of Gilbert Saxowsky (hereinafter Saxowsky), the president and a director of SAC.
At the time of the sale to the Schollmeyers, SAC was not a registered dealer in securities and had not been so registered since May 1, 1965, at which time Sac's registration with the North Dakota Securities Commissioner was terminated. In addition, Sac's salesman, Engelhardt, was not and never had been a salesman licensed by the Securities Commissioner to sell securities.
On November 2, 1967, after indications of bankruptcy appeared on the part of SAC, the Schollmeyers filed this action against Saxowsky and others, alleging violation of the Securities Act and seeking remedies under § 10--04--17, N.D.C.C. The complaint alleged that Engelhardt was an unlicensed salesman, that he misrepresented the character of the SAC debentures, that SAC was not an authorized dealer in securities at the time of the sale in question to the Schollmeyers, and that Saxowsky had participated or aided in the sale of the debenture to the Schollmeyers, since Saxowsky was a force behind the use of said debentures for raising revenue in his position as president and a director of SAC.
Saxowsky denies that he participated or aided in any way in the sale of a debenture to the Schollmeyers and claims he was not aware that sales of debentures were made after the registration of the debentures expired.
On February 8, 1972, pursuant to jury verdict, the District Court of Burleigh County entered judgment in favor of the Schollmeyers and against Saxowsky. The amount of said judgment was amended on December 8, 1972, to include additional interest and court costs.
Saxowsky appeals from the judgment and from the order of the district court denying his motions to dismiss, for judgment notwithstanding the verdict and in the alternative for a new trial.
Saxowsky charged eighteen specifications of error and insufficiencies of the evidence, with we have grouped into the following issues for review:
1) Whether the district court erred in refusing to grant Saxowsky's motions for dismissal at the close of the Schollmeyers' case and for a directed verdict at the close of all the evidence.
2) Whether the district court erred in failing to grant Saxowsky's motion for judgment notwithstanding the verdict and in the alternative for a new trial.
3) Whether the district court erred in failing to uphold the no-recourse clause contained in the debenture sold to the Schollmeyers.
4) Whether the district court erred in its computation of the amounts due the Schollmeyers for principal, interest, and attorneys' fees.
5) Whether the district court erred in admitting certain evidence.
6) Whether the district court erred in its instructions to the jury.
These issues will not necessarily be treated in the order just stated.
First of all, we hold that the appeal in this case was taken within the proper time, since the appeal period did not commence to run until notice of the entry of the amended judgment was served. We believe the judgment entered by the district court on February 8, 1972, was not a final judgment since it expressly left open for determination the amount of the recovery to be had.
As we held in Kack v. Kack, 142 N.W.2d 754 [N.D.1966], at paragraph 2 of the syllabus:
'If a judgment is rendered which does not adjudicate all claims and the trial court has not rendered an order under Rule 54(b), N.D.R.Civ.P., and the judgment is thereafter amended to include an adjudication of all claims, the time for appeal from the judgment does not begin to run until the notice of the entry of the amended judgment is served upon the adverse party.'
We believe that the amount recoverable was a claim in this action and that the judgment was not final and appealable until notice of entry of the amended judgment of December 8, 1972, was served.
With regard to the admission of evidence, Saxowsky claims that several exhibits and some testimony were improperly admitted into evidence. Saxowsky claims that Plaintiffs' Exhibit 6, which is a letter to the shareholders of SAC from Saxowsky, is prejudicial and confusing and misleading to the jury. Saxowsky claims that Exhibit 6 has nothing to do with aiding or participating in the sale of debentures and that its admission into evidence...
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...to enforce a contract, as against public policy, when the contract defeated the express purposes of a statute. Schollmeyer v. Saxowsky, 211 N.W.2d 377, 386 (N.D.1973). In Schollmeyer, we voided a contract provision because the no-recourse clause oppressed the rights of purchasers and defeat......
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