Court Opinion

ID: 8788311
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:42:11.104445+00
Date Added: 2024-06-11T17:03:12.071299
License: Public Domain

DENISON, Circuit Judge
(after stating the facts as above). We ássume, without deciding, that Amberg is in no better position than the defendants whose rights were considered in the Gray Case, and we come to the critical question, as one of fact, whether- the transactions which took place relating to the different certificates were in truth and in fact surrenders of stock by Amberg to the association, and withdrawals of investment by Amberg from the association, or whether they were sales of his stock by Amberg to other individuals. The former conclusion imports liability; the latter, nonliability.
[1] 1. One certificate is in exceptional position. What purports to be the original, issued to Amberg, is found in the books of the association permanently filed among the surrendered and canceled certificates. It was, upon the argument, conceded that, if we were satisfied that this was in fact one of the original certificates issued to Amberg, the decree, so far as based on that certificate, viz., for $1,000 and interest, could not be disturbed. While some suspicion may attach to this document we think no inference is justified by the proofs, save that it is what it purports to be, and accordingly the decree must be to this extent affirmed.
[2] 2. The remaining eight certificates may be further classified, with the aid of the association books. The history of the association and the conduct of its general manager are such as to make doubtful the truthfulness of its records, and the technical admissibility of these books, as against Amberg, is challenged; but we pass, by these things *501and assume the accuracy of the hooks, so far as concerns this controversy. All the payments to Amberg were made by the association check, signed by Wemple. All eight certificates (save one) were later found in the possession of other individuals, and indorsed with due and formal assignment from Amberg to the holder. Several of these belong to one Godfrey, and his name may be used to typify the holders. The association books show when payments were made by the association to Amberg, and when payments were received by the association from Godfrey. In five instances, the payment to Amberg was earlier than that by Godfrey; in three instances, later. Apparently the District Court considered this the controlling feature in deciding whether each instance was surrender or assignment.
A discussion of the evidence would be profitless. There is, in the main facts, nothing necessarily inconsistent with the theory of either party. Though the money was received by Amberg directly from the association treasury, and though Wemple was the secretary of the association, yet he might well have acted as agent for Amberg, and the fact that, when Wemple sold a certificate, he passed the money through the association books from Godfrey to Amberg, would not be very significant: on the other hand, preserving the identity of the original certificate and avoiding the form of surrendering and reissuing might be matter of mere form, not of substance. LJpon all the testimony, we conclude that the receiver has not satisfied the burden of proof resting on him to show that there was a surrender of even the five certificates.
Observing, first, that the identity of each certificate was carefully preserved, and that there was no actual surrender or cancellation or any actual issue of a new certificate to Godfrey, and_that there was a written assignment of the certificate from Amberg to Godfrey, we observe, further, that Amberg had no right to demand a withdrawal, because he did not give the necessary notice, and that the association had no right to issue a new certificate of this kind to Godfrey, because the by-laws had then been amended so as to forbid 7 per cent, certificates. Even if it is true that Wemple unlawfully used the association moneys to pay Amberg,, or to take. in Amberg’s certificate, doing so in anticipation of a sale of the same certificate, which he had negotiated or expected to make, this would not convert into a cancellation, a surrender, and an issue of a new certificate, a transaction which none of the parties intended should have that character, and which could not lawfully take that character.
We observe, also, that as the net result of the whole transaction the association treasury was not depleted. It paid $1,000 to Amberg, hut it received $1,000 from Godfrey. Except upon the theory that it would have done what it did not do and could not do, viz., issue a new 7 per cent, certificate to Godfrey, the association is just as well off as though it had paid Amberg nothing and he had kept his certificate. Clark v. Clark Machine Co., 151 Mich. 416, 424, 115 N. W. 416; First Nat. Bk. v. Watch Co., 191 Ill. 128, 60 N. E. 859.
It follows that the receiver was not entitled to recover the amount of five of the certificates for which he had judgment, and, a fortiori, *502that he was not entitled to anything on account of the three certificates for which judgment went against him. Upon the amount of the one certificate, interest should run from the date of the specific demand, or, in default of such demand, from the date of commencing suit.
The decree below will be reversed, with costs of this court to appellant, and the record remanded for further proceedings in accordance with this opinion.