Schollmeyer v. Saxowsky

211 N.W.2d 377, 1973 N.D. LEXIS 129
CourtNorth Dakota Supreme Court
DecidedOctober 1, 1973
DocketCiv. 8885
StatusPublished
Cited by17 cases

This text of 211 N.W.2d 377 (Schollmeyer v. Saxowsky) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schollmeyer v. Saxowsky, 211 N.W.2d 377, 1973 N.D. LEXIS 129 (N.D. 1973).

Opinion

PAULSON, Judge.

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 Schollmey-ers, 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 Saxow-sky 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 *383 notwithstanding the verdict and in the alternative for a new trial.

Saxowsky charged eighteen specifications of error and insufficiencies of the evidence, which 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 Saxow-sky, 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 is ground for a new trial. We believe that this exhibit, though not the most relevant, is far from prejudicial and confusing to the jury and that its admission into evidence could be considered nothing more than harmless error.

Plaintiffs’ Exhibit 7 is a letter from The Liberty National Bank & Trust Company of Dickinson, which is another defendant in the actions brought by the Schollmeyers, and which letter states that the Bank resigns as the trustee for the debenture holders of SAC. This letter relates to the case against The Liberty National Bank & Trust Company of Dickinson and has no bearing on the instant matter.

Saxowsky charges error in admitting the testimony of the present State Securities Commissioner, since such testimony contained interpretations of the law which varied from the interpretations given to SAC by a former Securities Commis *384 sioner. The variance is that the former Securities Commissioner said that a qualified officer of SAC could sell securities under the dealership of SAC without being licensed individually. The former Securities Commissioner wrote a letter to Matt G. Koffler, executive vice president and general manager of SAC, stating that he, Koffler, was the only officer so qualified to sell SAC securities. This letter made no reference to Mr. Engelhardt who negotiated the sale in the instant case to the Schollmeyers. Since the present Securities Commissioner’s testimony did not conflict with the prior Commissioner’s interpretation of the law on Engelhardt’s authority to sell securities, we find the testimony to be admissible for the purpose of showing when the registration of the debentures expired and of showing that Engelhardt was never a licensed securities salesman.

Plaintiffs’ Exhibits 8 and 9 are letters from the legal counsel for the former Securities Commissioner to Mr. Koffler and to Mr. Engelhardt. The letters are dated May 26, 1965, and July 15, 1965, respectively, and state that the registration of SAC as a dealer in securities had expired and that the registration of the subordinate debentures had also terminated. Saxowsky claims that these exhibits do not relate to aid or participation in the sale to the Schollmeyers and therefore should not have been admitted.

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Bluebook (online)
211 N.W.2d 377, 1973 N.D. LEXIS 129, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schollmeyer-v-saxowsky-nd-1973.