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THOMSON & MCKINNON v. MINYARD

October 21, 1968

THOMSON & McKINNON, a Limited Partnership, Plaintiff,
v.
Judson T. MINYARD, Defendant


Herlands, District Judge.


The opinion of the court was delivered by: HERLANDS

HERLANDS, District Judge:

Defendant moves pursuant to 28 U.S.C. § 1404(a) (1964) for an order transferring the above-entitled action to the United States District Court for the District of South Carolina, Greenville Division. Defendant is a resident of that district; thus the action "might have been brought" in the proposed transferee district. The only question before this Court, therefore, is whether the standard determinants of transfer have been so clearly demonstrated to favor the District of South Carolina, that plaintiff's choice of forum should be disturbed. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947). Weighing all these factors pro and con, the Court concludes that transfer is warranted.

 Defendant owns an automobile agency in Anderson, South Carolina. He had initiated many securities transactions through a Mr. Joe Weber, who at the time of the transaction in question was a registered account representative employed by plaintiff brokerage firm. Mr. Weber resides in South Carolina and maintains his office there.

 On March 21, 1968, defendant executed an order with Weber to sell either 2,000 shares of Hyatt Corporation of America as defendant claims, or of Hyatt Corporation of Delaware *fn1" as plaintiff contends. Defendant received a confirmation from plaintiff that 2,000 shares of Hyatt Corp. of America had been sold at $45.00 per share; and defendant delivered to plaintiff at its Greenville, South Carolina branch Certificate #U682 representing 2,000 shares of Hyatt Corporation of America stock. A receipt for these delivered shares was given to defendant. Plaintiff then mailed defendant a check, dated March 27, 1968, in the amount of $89,070.00, representing the net sales proceeds. This check indicated that it was in payment of 2,000 shares of Hyatt Corp. of America.

 Plaintiff alleges that the order it received in New York was for the sale of 2,000 shares of Hyatt Corp. (which was Hyatt Corporation of Delaware and not Hyatt Corporation of America) and that in fact it sold 2,000 shares of Hyatt Corp. of Delaware for defendant's account to Mitchum, Jones & Templeton, Inc., a California brokerage firm. Plaintiff claims that a coding clerk erred in processing the order, with the result that the confirmation incorrectly detailed a sale of Hyatt Corporation of America instead of Hyatt Corporation of Delaware.

 Plaintiff seeks evidentiary support for its position in the circumstance that Hyatt Corporation of America had, in September or October, 1967, changed its name to Hotel Equities Corporation and effected a 5-for-1 stock exchange, whereby one new share of Hotel Equities was issued for every five shares of Hyatt Corporation of America tendered. Since the price of Hotel Equities was approximately $20.00 per share (reflecting $4.00 per share of Hyatt Corporation of America) plaintiff reasons that manifestly there could be no mistake as to which stock was sold.

 As evidence tending to substantiate his claim that he had sold Hyatt Corporation of America stock and not Hyatt Corporation of Delaware stock, defendant points to the fact that, at the time of the transaction in March, he owned less than 350 shares of Hyatt Corporation of Delaware stock; and, thus, defendant argues he could not have ordered plaintiff to sell 2,000 shares of that stock long. Defendant further contends that, upon notification by plaintiff that Hyatt Corporation of America had changed its name and had effected this reverse five-four-one split - a time after the March 21, 1968 transaction - defendant purchased through an unnamed San Francisco broker 2,000 shares of Hotel Equities stock, at an undisclosed price, in order to enable defendant to deliver to plaintiff 1,600 additional shares of Hotel Equities stock plus totaling 2,000 shares which defendant says he was obligated to deliver pursuant to the March 21, 1968 sale.

 To addle the story further, the San Francisco broker apparently delivered to defendant 2,000 shares of Hyatt Corporation of Delaware stock. On the face of the certificate representing these 2,000 shares a pencil line is allegedly drawn through the engraved name; and the name "Hotel Equities" is substituted in pencil across the face of the certificate.

 Finally, defendant attempts to buttress his factual and legal positions by emphasizing plaintiff's long delay between the confirmation date and the time defendant was notified of plaintiff's alleged error and, therefore, of defendant's failure to deliver the 2,000 shares of Hyatt Corporation of Delaware stock.

 This confusion is compounded by still other complications. This suit was commenced originally in the New York state courts on June 7, 1968 when plaintiff obtained an order of attachment against defendant's New York property. On June 14, 1968, before substituted service upon defendant was effected, defendant Minyard started an action against Thomson & McKinnon in the South Carolina state courts seeking, in effect, a declaratory judgment as to his rights and liabilities arising out of the same transaction that is involved in the case at bar.

 The South Carolina state action was removed by Thomson & McKinnon on July 3, 1968 to the United States District Court for the District of South Carolina. The New York state action was removed to this Court (the United States District Court for the Southern District of New York) on August 1, 1968. Thus, two lawsuits involving the same subject matter and the same parties are now pending.

 Defendant in the New York action has also asserted three counterclaims: (1) a claim for a declaratory judgment based on the same facts; (2) a claim for damages arising from plaintiff's refusal to execute any securities transactions involving securities owned by defendant in plaintiff's custody; (3) a claim for damages arising from plaintiff's attachment of defendant's account with Harris, Upham & Co. The record in this Court does not indicate whether the action now pending in the District of South Carolina also involves the above-indicated counterclaims "(2)" and "(3)".

 By way of affidavits, counsel for both plaintiff and defendant have detailed the prospective trial testimony. Each side has stressed the inconvenience of the other's choice of forum. There is no pat formula by which the question of witness convenience can be answered. The problem is one of particularized judgment based on the unique features of the specific case. S.E.C. v. Golconda Mining Co., 246 F. Supp. 54, 57 (S.D.N.Y.1965), petition for writ of mandamus denied sub nom. Golconda Mining Corp. v. Herlands, 365 F.2d 856 (2d Cir. 1966).

 In formulating that judgment, the Court should not be persuaded merely by the number of prospective witnesses, but rather by the materiality and importance of their anticipated testimony. See, e.g. Wright v. American Flyers Airline Corp., 263 F. Supp. 865, 867 (D.S.C. 1967); S.E.C. v. Golconda Mining Co., ...


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