# Petition for Writ of Certiorari — General Motors Acceptance Corp. v. Eason > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385607_1725%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1974 - **Citation:** 416 U.S. 960 ## Text IN THE } Supreme Court of tye GQnited S OCTOBER TERM, 1973 ' Ee tates GENERAL MOTORS ACCEPTANCE CORPORATION AND DAVE WAITE PONTIAC, INC.. Petitioners. vs. WILLARD D. EASON, M. O. SATROM. anpD JEAN M. SATROM., Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT ALAN W. BOYD HENRY J. PRICE 1313 Merchants Bank Building Indianapolis. Indiana 46204 DAVID B. HUGHES Room 800, 130 East Washington Street Indianapolis, Indiana 46204 Attorneys for Petitioner General Motors Acceptance Corporation JAMES M. SECREST 1100 Circle Tower Building Indianapolis. Indiana 46204 Attorney for Petitioner Dave Wain Pontiac, Inc. FRAZER F. HILDER LAWRENCE W. MIDDLETON JOHN J. HIGGINS General Motors Acceptance Corp. 767 Sth Avenue New York, New York 10022 Of Counsel Gunthorp-Warren Printing Company, Chicago e 346-1717 SESE ES LIE SI OT ER a SS ES TS PEP STE Re = 5 ae — SN at a wall ll We a en OR Nae Rn ae are ee ec RT ania PAGE Opinions nigh eee Le ak eee ae SRA Se 1 NR en ae ce ge wire he ae Nie gel es 2 NE cas chk kn ckns ch Whee vee ee aes 2 Statute and Regulation Involved ................-:. 2 Statement of the Case, Including Basis for Federal ER ga ow in Indiana. GENERAL Motors ACCEPTANCE Cor- | No. IP 71 C 613 PORATION and DavVE WAITE! (Care J. HOLDER. PonT1ac, INC., Judge. Defendants-A ppellees. . Argued October 19, 1973—-Decided December 28, 1973 BEFORE KILEY and STEVENS, Circuit Judges. and WyYZANSKI, Senior District Judge.* STEVENS, Circuit Judge. Plaintiffs are shareholders of a corporation which purchased a car leasing business from one of the defendants. In connection with the transaction, the corporate purchaser issued 7,000 shares of its stock to the seller, and the plaintiffs individually guaranteed certain liabilities as- sumed by the purchaser. Plaintiffs accuse both defendants of * Senior District Judge Charles Edward Wyzanski, Jr. of the District of Massachusetts, is sitting by designation. Sf RAT RE SE SEER A2 fraud and seek relief under § 10(b) of the Securities Exchange Act of 1934,' 48 Stat. 891, 15 USC § 78j(b), and Securities and Exchange Commission Rule 10b-5.7 The question presented is whether their claim is foreclosed by the so-called “Birnbaum rule” which limits private relief for a violation of Rule 10b-5 to persons who were either purchasers or sellers of a security. The appeal is from an order dismissing plaintiffs’ third amended complaint and denying leave to file a fourth. The es- sential facts are quite simple. Prior to October 31, 1969, one of the defendants (Dave Waite Pontiac, Inc.) operated a Pontiac dealership and also an automatic leasing division. Purchases of cars for the leasing business were financed by General Motors Acceptance Corporation, the second defend- ant. Bank Service Corporation, a company in which the plain- tiffs owned stock, entered into an agreement to purchase the leasing business. As consideration for the business, Bank Service issued 7,000 shares of its stock to Waite and assumed 1. Section 10(b) of the Act provides: “It shall be unlawful for any person . . . [t]o use or employ, in connection with the purchase or sale of any security regis- tered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.” 2. Rule 10b-5 provides: “It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities ex- change, “(a) To employ any device, scheme, or artifice to defraud, “(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circum- stances under which they were made, not misleading, or “(c) To engage in any act, practice, or course of busi- ness which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.” 17 CFR § 240.10b-5. Se - ee ee ee ee) ee we ee Al6 APPENDIX II UNITED StTaTEs District Court Southern District of Indiana Indianapolis Division WILLARD E. Eason, M. O. SATROM > and JEAN M. SATROM vs. . No. IP 71-C-613 GENERAL MOTORS ACCEPTANCE | Corp., DAVE WAITE PonrTIAC, INC. Entry for June 20, 1972 HONORABLE CALE J. HOLDER, Judge This cause came before the Court upon the defendant Gen- eral Motors Acceptance Corporation’s motion to dismiss the third amended complaint and each paragraph thereof and the Court being duly advised in the premises now SUSTAINS the motion to dismiss and the action is dismissed as to G. M. A. C. The plaintiffs have no standing to maintain the action against G. M. A. C. under Section 10(b) of Securities Exchange Act of Rule 10(b)5 promulgated thereunder. (Brinbaum v. New- port Steel Corporation, 2 Circuit, 193 F. 2d 461; and Jachi- miec, etc. V. Schenley Industries, Inc., 7 Circuit (Feb. 26, 1965) Cause No. 15027. (C. R. No. 1, p. 25-A.) Reh ae SE Al7 UNITED StTaTEs District COURT Southern District of Indiana Indianapolis Division WILLARD D. EAson, et al. VS. No. IP 71-C-613 GENERAL MOTORS ACCEPTANCE CORPORATION, and Dave WAITE | PonTIACc, INC. | Entry for June 20, 1972 HONORABLE CALE J. HOLDER, Judge This cause came before the Court on the plaintiffs’ motion for leave to file fourth amended complaint and for an extension of time to file a notice of appeal. The Court. after considering said motion and being duly advised in the premises, now denies the same. This cause also came before the Court on the plaintiffs’ motion for default. The Court. after considering said motion and being duly advised in the premises. now denies the same. This cause also came before the Court on the motion of Defendant Waite to dismiss plaintiffs’ third amended complaint as to Dave Waite Pontiac, Inc. The Court. after considering said motion and being duly advised in the premises, now SUS- TAINS the same, and the action is dismissed without prejudice with costs assessed against plaintiffs. This cause also came before the Court on the objections of Defendant General Motors Acceptance Corporation to filing of fourth amended complaint. The Court, after considering said objections and being duly advised in the premises, now sustains the same. and the action is dismissed without prejudice with costs assessed against plaintiffs. (C. R. No. 1, p. 29-A.) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385607_1725%3A1. Public record. Not legal advice.