Speed v. Transamerica Corporation, Civil Action No. 480.
| Decision Date | 09 May 1947 |
| Docket Number | Civil Action No. 480. |
| Citation | 71 F. Supp. 457 |
| Parties | SPEED et al. v. TRANSAMERICA CORPORATION. |
| Court | U.S. District Court — District of Delaware |
Arthur Frank, of New York City and Daniel O. Hastings and Ayres J. Stockly (of Hastings, Stockly, Walz & Wise), both of Wilmington, Del., for plaintiffs.
Hugh M. Morris and Edwin D. Steel, Jr. (of Morris, Steel, Nichols & Arsht), both of Wilmington, Del., for defendant.
Roger S. Foster, Sol., Robert S. Rubin, Associate Sol., Sidney H. Willner, Asst. Sol., Alexander Cohen and Herman D. Levinson, Attys., all of Philadelphia, Pa., for the Securities and Exchange Commission, amicus curiae.
The first count of the complaint is based on a common law action of fraud and deceit. Judgment for defendant will be had on this count in accordance with my decision in the Geller case.1
Counts 2, 3 and 4 charge that in acquiring the stock of public security holders (plaintiff is one), defendant as an insider did not make disclosure of facts materially affecting the value of such stock; and hence defendant has violated § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j (b), and Rule X-10B-5 promulgated thereunder.2 Defendant contends that the Act gives no private right of action for civil liability as it was the congressional intent that parties injured by its infraction should be left to their common law remedies; but, says defendant, if the Act does apply the record shows this is not a case of violation.
While previously doubt has been expressed that a private right of action exists in these situations,3 in several cases involving fraudulent purchases already consummated, the Securities and Exchange Commission has enforced compliance by suggesting voluntary restitution, dismissals on stipulation and consent decrees. The first court decision that an individual right of action exists for damages resulting from a violation of § 10(b) and Rule X-10B-5 is Kardon v. National Gypsum Co., D.C., E.D.Pa., 69 F.Supp. 512. While I propose to follow Judge Kirkpatrick's opinion in the Kardon case, yet I wish to point out I think Downing v. Howard, D.C.Del., 68 F.Supp. 6, is not inconsistent with Kardon.4 There remains, then, for the purposes of disposing of defendant's motion for summary judgment, a narrow issue.
The theory of the complaint is that defendant as dominant stockholder of Axton Fisher from the time it bought into that stock planned to capture the profit exclusively to itself which would probably arise from increased inventory value of leaf tobacco which Axton Fisher had on hand in 1942. The pleadings before me show defendant makes categorical denial and goes beyond that; apologia is made. This question is the very vitals of the present litigation. And, while the pleadings make it possible to draw inferences, the case is not such as to be disposed of on a motion for summary judgment. It calls for the close scrutiny of a nisi prius judge. Plaintiffs have alleged the ultimate fact of violation of the statute. I think plaintiffs must prove their allegation of an express or implied misrepresentation and its form, viz., that at the time defendant bought its stock it intended to merge, liquidate, dissolve, etc., but it expressly or impliedly represented that it did not. This is prerequisite proof under Counts 2, 3 and 4.
An order may be submitted granting defendant's motion for summary judgment on Count 1 and denying it on Counts 2, 3 and...
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Tobacco and Allied Stocks v. Transamerica Corp.
...Corp., D.C., 63 F.Supp. 243, reversed 3 Cir., 162 F.2d 36, 172 A.L.R. 495; Speed v. Transamerica Corp., D.C., 5 F.R.D. 56; Id., D.C., 71 F.Supp. 457; Id., D.C., 103 F.Supp. 47; Friedman v. Transamerica Corp., D.C., 63 F. Supp. 247; Id., D.C., 5 F.R.D. 115; Speed v. Transamerica Corp. (Fried......
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Speed v. Transamerica Corp.
...v. Transamerica Corp., D.C.Del., 63 F.Supp. 247; Id., 5 F.R.D. 115; Speed v. Transamerica Corp., D.C.Del., 5 F.R.D. 56; Id, D.C., 71 F.Supp. 457.2 Plaintiffs have sued defendant, Transamerica Corporation, for having purchased from them Class A and Class B stock of the Axton-Fisher Tobacco C......
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Goodman v. Poland
...of New York v. Bankers Life & Casualty Co., 404 U.S. 6, 13 n. 9, 92 S.Ct. 165, 169 n. 9, 30 L.Ed.2d 128 (1971); Speed v. Transamerica Corp., 71 F.Supp. 457 (D. Del.1947), 99 F.Supp. 808 (D.Del.1951); Kardon v. National Gypsum Co., 69 F. Supp. 512 Defendants, however, contend that the Maryla......
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Taussig v. Wellington Fund, Inc.
...Co., 3 Cir. 1949, 174 F.2d 799; Speed v. Transamerica Corp., 3 Cir., 1956, 235 F.2d 369, aff'g D.Del.1951, 99 F.Supp. 808, Id., D.Del.1947, 71 F.Supp. 457. We hold, therefore, that the district court had federal question jurisdiction over the cause of action asserted under section 35(d) of ......
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Rounding the peg to fit the hole: a proposed regulatory reform of the misappropriation theory.
...sell a company's assets with as yet unrecognized value), supplemented by 83 F. Supp. 613 (E.D. Pa. 1947); Speed v. Transamerica Corp., 71 F. Supp. 457, 457-58 (D. Del. 1947) (finding that an officer violated [sections] 10(b) by buying the plaintiff's stock with foreknowledge that the compan......