Court Opinion

ID: 9644038
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:47:06.586822+00
Date Added: 2024-06-11T18:11:07.704645
License: Public Domain

SWAN, Circuit Judge
(dissenting).
I am unable to concur in my brothers’ adherence to the judgment announced in our original opinion. That opinion was based on the premise that “the market value of the preferred on the conversion date” was “found by the district judge, and, indeed, conceded by the parties, to be $364,871.” In so stating, we misinterpreted the finding of the judge and the stipulation of the parties upon which it rested. The figure $364,871 did not represent “market value”; it represented the redemption value $368,-173 ($55 per share plus dividends accrued
to March 20, 1944) discounted back to the conversion date, January 19, 1944. The complaint alleged, the answer admitted, the parties stipulated, and the district judge found that on January 19, 1944 the 8,255 shares of common into which the 6,604 shares of preferred were converted had a market value of $480,853.78.1 If that finding stands, it seems plain to me that the value of the preferred for purposes of conversion was $480,853.78, and that we are not justified in holding that its conversion value was identical with its redemption value. My brothers say that the market quotation of the common stock, as stipulated, cannot be accepted as showing the true value of that stock. That question was never litigated below.2 It was first suggested on the appeal in the reply brief of intervenor Kogan. In her motion for leave to intervene, from the denial of which she appealed, her counsel’s affidavit stated that “the movant consents to proceed to a trial of this action upon the pleadings of all the parties presently on file herein.” As already noted, both the complaint and the defendants’ amended answer alleged that the market value of 8,255 shares of common stock on January 19, 1944 was $480,853.75. If an intervenor who represents a class is to be allowed to raise an issue which he expressly disclaimed in his motion for intervention, the utmost we should do for him, in my opinion, is to send the case back for trial on that issue.

 There is a discrepancy of 3 cents; the pleadings and stipulation used the figure $480,853.75.

 The Securities and Exchange Commission, which participated as amicus curiae, were content in the court below and in their brief on tbe appeal arguing for affirmance to have the damages measured “on the basis of the market value as of the date of conversion of the common stock into which the preferred was converted,” but in the memorandum filed at the court’s request in answer to the petition for rehearing, they repudiate that position and say that their present views “represent some development in our own analysis of the problems since our original participation.”