Full opinion text
FRANK A. KAUFMAN, District Judge. Plaintiffs, Bernard and Sevy Wassel, allege violations of the Securities Act of 1933, 15 U.S.C. §§ 77a-aa, and the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a-hh, by defendants, Edward M. Eglowsky and Stephen H. Stillerman. The latter deny liability but secondarily assert, with regard to any possible liability on their part to Wassel pursuant to Wassel’s ’33 Act contention, third-party claims for indemnification or contribution against third-party defendants Central Trust Company and Arnold J. Goldman, Esq. A lengthy non-jury trial has developed considerable conflict in testimony, thus necessitating, at the threshold, findings by this Court. FACTS On August 31, 1972, plaintiffs purchased 25,000 shares of Dyna-Mech Sciences, Inc. (hereinafter referred to as “Dyna-Mech” ) at a price of $1.00 per share. Dyna-Mech, a New York corporation, was incorporated in August 1968 by certain residents of Rochester, New York for the purpose of manufacturing an “all-terrain vehicle” (ATV). Initially, 370,000 shares were issued to William Steckerl, Dyna-Mech’s President; 161,750 to Harry Lortz, a Dyna-Mech Vice-President; and 154,750 to Sidney Berke, another Dyna-Mech Vice-President. Approximately 5500 shares were issued to others who were members of Dyna-Mech’s Board of Directors and to attorneys in a law firm which represented Dyna-Mech at the time of its incorporation. An additional 76,416 shares of Dyna-Mech were sold to a number of residents in the Rochester area seemingly pursuant to the intrastate exemption provided by section 3(a) (ll) of the Securities Act of 1933 (hereinafter referred to as the “’33 Act”). In all, as of October 1968, there were 768,416 shares of Dyna-Mech outstanding. Apparently, in March 1970, Dyna-Mech engaged in another intrastate offering of 250,000 shares, thus raising the total number of outstanding shares to 1,041,306. Soon after its incorporation Dyna-Mech ran into increasingly severe financial problems. In 1970 Steckerl was in contact with Edwin Miller, Jr., a Canadian citizen, and President of Canusa Holdings Limited, incorporated in Delaware, and also President of Canusa Holdings Limited, a Canadian corporation. Miller offered to provide Dyna-Mech with $60,000 of additional capital and to assist in arranging additional financing for Dyna-Mech. In return Canusa was issued 220,000 shares of Dyna-Mech stock on June 17, 1970 and was granted an exclusive distributorship for the ATV in Canada. The Dyna-Mech stock certificate which Canusa obtained bore the following legend: No sale, offer to sell or transfer of the shares represented by this certificate shall be made unless a registration statement under the Federal Securities Act of 1933, as amended, with respect to such shares is then in effect or an exemption from the registration requirements of such Act is then in fact applicable to such shares. Lortz had been discharged by the Dyna-Mech Board of Directors sometime previous to the transactions with Canusa and his 161,750 shares had been repurchased by Dyna-Mech for $8,000 (in settlement of certain litigation). Thus, the 220,000 shares acquired by Canusa represented more than 20% of the total of 1,099,556 of Dyna-Mech then outstanding. Subsequently, a dispute arose between Dyna-Mech and Canusa, resulting in the institution of a number of lawsuits in the New York courts in late 1970 between Canusa on the one hand and Dyna-Mech and Steckerl and Berke individually on the other hand. Those lawsuits were eventually settled in June 1973. Arnold J. Goldman, Esq., a personal friend of Steckerl, replaced Dyna-Mech’s original corporate counsel in July 1970 after the Lortz shares had been repurchased and after the contract with Canusa had been entered into. There was not any written designation of Goldman as Dyna-Mech’s corporate counsel, then, or at any time' subsequent. Seemingly, one of Goldman’s first services as Dyna-Mech counsel involved a contract with Central Trust Company, a Rochester bank, pursuant to which Central Trust agreed to continue acting as Dyna-Mech’s stock transfer agent for a fee of $500 a year. By early 1971, Dyna-Mech’s financial difficulties had worsened, and Steckerl and Berke placed advertisements in various newspapers seeking additional financing. A group from Indiana indicated interest and in February 1971 that group, the “Pitcher group”, received a total of 500,000 shares of newly issued Dyna-Mech stock. After July 1971, Steckerl and Berke ceased their active participation in Dyna-Mech’s affairs and all of Dyna-Mech’s corporate books and records as well as the ATY proto-type were moved to Marion, Indiana. However, the Pitcher group failed to pay the notes with which it had purchased the Dyna-Mech stock, resulting in litigation in the New York courts between the Pitcher group on the one hand and Steckerl and Berke on the other hand. Goldman represented Steckerl and Berke and seemingly Dyna-Mech in that litigation, which was eventually settled in 1973 at which time the Pitchers turned-over title in a building valued at $30,000 to Steckerl and Berke. In the late spring of 1972 the corporate records and books of Dyna-Mech were returned to Goldman by the Pitchers. In the spring of 1972 Miller indicated to Goldman a desire either to take over Dyna-Mech on his own behalf or on behalf of others. Goldman told Steckerl and Berke of Miller’s interest and was authorized by Steckerl and Berke to conduct negotiations with Miller. Apparently, there was also an initial proposal by a man named Birkenshaw who was brought into the picture by Miller and who was interested, for a short time, in April 1972, in gaining control of Dyna-Mech. The Birkenshaw negotiations came to naught. However, by June 1972 a plan had been worked out -by Goldman and Miller pursuant to which Miller proposed that he would negotiate the takeover of Dyna-Mech by William Thompson, a resident of California. That June plan was memorialized in a letter dated June 7, 1972 from Miller to Goldman and signed by them both, which in relevant part read: It is our understanding that you are the Attorney and have full authority to sign for the above company [Dyna-Mech] and have been instructed by its principals to negotiate an agreement to turn over control and clean up the obligations of the Company and hopefully make it successful. I represent clients who are prepared to purchase control of the above company subject to the following terms and conditions for the total purchase price of $75,000.00. * -X- X- -X- * * You Shall: 1. Immediately reserve the name of William Thompson, Incorporated and obtain the corporation’s Minute Book for evaluation. 2. As soon as practical, change the name of the Company to William Thompson, Incorporated or such other name acceptable to my clients. 3. Increase the capitalization to five million shares. 4. Deliver a minimum of one million, five hundred and twenty-two thousand shares of the capital stock of the subject company in present form. 5. As soon as you receive the balance of the first $5,000.00 and the $5,000.00 letter of credit, the present directors and officers will resign and allow my people to appoint a board of directors of their choice and provide them with full voting rights on the one million, five hundred and twenty-two thousand shares. 6. Provide a financial statement and certificate from the Company’s auditors that the Company is free of all debts and liabilities and verify the tax loss. 7. Provide an Attorney’s certificate that the Company can be traded on the over-the-counter market, and is in good standing, that there are no lawsuits or judgments pending or in force, that to the best of your knowledge and belief there is no cause for any actions to be filed and that the Company is empowered to deal in land, leases, leasing companies, motion pictures, etc. and own shares in other corporations in America or elsewhere. * * * * * * 11. Assist in help getting a market called as soon as possible on Dyna-Mech Sciences, Incorporated and to assist the new board of directors and their officers in operation of the Company until you can resolve all corporate matters (prior numbers one to ten) with no liabilities to prior management. I Shall On Behalf Of My Client: A. Pay $500.00 to Attorney Arnold Goldman for reserving the name of William Thompson, Incorporated, securing the corporation’s Minute Book and for a non-refundable six week option to purchase control of Dyna-Mech Sciences, Incorporated and if the option is exercised, pay an additional $i,500.00 on or before July 20, 1972; these monies to be used as follows: 1. Pay Central Trust all transfer fees, 2. Pay the accountant to prepare a certified financial statement as soon as practical so that an annual shareholders’ meeting can be held thereby allowing further recapitalization of authorized stock to a minimum five million shares, 3. The balance of the above $5,000.00 to be used against your legal fees. B. It is understood that out of the $75,000.00 the total legal fees are not to exceed $15,000.00, thereby allowing you $60,000.00 to clean up any and all obligations up to the date of closing including attendance at the shareholders’ meeting, place and time to be mutually agreed upon. [Emphases supplied except with regard to the words “if the option is exercised”]. * * * * -» * That document was amended by a document dated June 16, 1972 and also signed by Goldman and Miller. That amendment provided that all of the provisions of the June 7, 1972 letter agreement remained in force and effect except that the capitalization would be increased to 10,000,000 shares rather than 5,000,000 and except that two new conditions were imposed upon Goldman, namely: 12. Arrange special shareholders meeting for 1:00 p. m., July 22, 1972. 13. Provide letter stating that 280,000 shares between Mr. Edward miller and his clients and 440$00 197,206 (EM Jr.) (AG) in the hands of the public are the only free trading shares. [Emphasis supplied except with regard to the words “280,000 shares between Mr. Edward Miller”.] Furthermore, one condition was added to the column headed “Mr. Edward Miller, Jr. on behalf of client” which would appear in actuality to be an additional condition imposed upon Goldman. That condition was: G. Go with Mr. Edward Miller, Jr. to break up 220,000 share certificate into various clients names. [Emphasis supplied.] Neither of those documents was ever communicated by Goldman to either Steckerl or Berke. All that Goldman communicated was that Miller either on his own behalf or on behalf of others was interested in acquiring Dyna-Mech for $60,000. Seemingly, no mention of the $75,000 figure was ever made by Goldman to either Steckerl or Berke. During the May-July 1972 period, Goldman was given proxies by both Steckerl and Berke to vote their Dyna-Mech stock. Berke however warned Goldman that he feared that Miller did not intend to save Dyna-Mech but only intended to use it as a conduit by which Miller could sell the Dyna-Mech stock to the public. Berke instructed Goldman not to use Berke’s proxy for any purpose until after Miller had paid the $60,000 to be used to pay Dyna-Mech’s creditors. Berke had by that time given up any real hope of salvaging Dyna-Mech and only hoped that the creditors of and investors in Dyna-Mech, many of whom were his personal friends, would be able to recover a part of their investment. Goldman testified at trial that he considered the June 7, 1972 and June 16, 1972 documents he and Miller signed as purely executory and in no way binding on him. Goldman further testified that his actions after June 16, 1972 were not intended as a performance of his obligations under those documents and, in fact, that by June 23, 1972 at the latest, he considered those documents as dead. In the light of the subsequent pattern of actions by Goldman, Thompson and Miller, this Court does not accept such testimony by Goldman. Rather, this Court finds that all of Goldman’s actions taken after June 16, 1972 were fully consistent with and were taken in connection with performance of the provisions of the two documents which Goldman and Miller had signed in June 1972. On June 20, 1972, Goldman received a cashier’s check for $4500 from William Thompson. On June 23, 1972, Robert B. Potts, the Secretary of Canusa, came to Rochester with the 220,000 share certificate of Dyna-Mech stock which had been sold to Canusa in 1970. Goldman prepared a letter addressed to Central Trust dated June 23, 1972 which read: As attorney for Dyna-Mech Sciences, Inc., you are hereby authorized to reissue 279,000 shares of the common stock of Dyna-Mech Sciences, Inc., as contained in the request of Canusa Holdings Limited, dated June 21, 1972. This is not a sale but is merely a breakup of large blocks of stock belonging to Canusa Holdings Limited and of smaller shares which are being reissued to the stockholders of Canusa Holdings Limited. You are further authorized to issue these shares as requested without the investment legend which appears on the stock certificate for 220,000 shares originally issued to Canusa Holdings Limited. The request of Canusa referred to in Goldman’s letter was a document dated June 21, 1972 which Potts had brought with him to Rochester. That document, which was typed under the letterhead of Canusa Holdings, Limited and signed by Potts, read: I, ROBERT B. POTTS, Secretary of Canusa Holdings Limited certify that the attached list of individuals and firms represents stockholders of Canusa Holdings Limited, and that it is requested that 279,000 shares of the common stock of Dyna-Mech Scienees, Inc. be broken up and reissued as indicated on said list. The attached list named twenty-two persons and indicated next to each name the number of shares of Dyna-Mech each was to receive. Prior to June 23, 1972, Goldman had been told by Miller that Canusa was dissolving and that all of the shares of Dyna-Mech to be distributed by Canusa to its shareholders would actually be sold by them to William Thompson. After Potts arrived in Rochester, he and Goldman, according to Goldman’s trial testimony, went together to Central Trust where they met Daniel Atfield who was then in charge of Central Trust’s stock transfer department. Atfield, according to Goldman’s testimony, declined to transfer any shares at that time because: (1) Dyna-Mech owed Central Trust $1189 for previous services as a transfer agent, (2) Central Trust could not issue 279,000 shares in new certificates when the only certificate being surrendered to it was for 220,000, and (3) Central Trust desired an up-to-date list of Dyna-Meeh’s officers and directors and up-to-date financial statements of Dyna-Mech and of William Thompson. Goldman states that he left with Atfield both his June 23, 1972 letter and the listing of Canusa shareholders which had been given to him by Potts. On June 26, 1972, Goldman paid Steffan & Company, a Rochester accounting firm, $1500 to provide up-to-date financials for Dyna-Mech. On June 30, 1972, Goldman paid Central Trust the $1189 which Dyna-Mech owed to Central Trust. Goldman testified that both of those payments were made from the $4500 he had previously received from William Thompson. On July 5, 1972, according to Goldman, a “one man meeting” of the Dyna-Mech Board of Directors was held. Only Steekerl and Goldman were present. At that meeting Steekerl resigned as President and William Thompson was elected as the new President of Dyna-Mech. Berke testified that he only learned of that meeting when he received a copy of an undated letter to Dyna-Mech shareholders signed by William Thompson as “Chairman and President”. That letter read in part as follows : At a recent special meeting of the Board of Directors of your company, I was elected President, effective immediately. As you know, Dyna-Mech Sciences, Inc. has been dormant for the past year. A group which I represent and which has extensive financial interests believes that the company can be revived and has an exciting future. I am, therefore, happy to outline some of our agressive [sic] and dynamic plans for the company whose name we plan to change to William Thompson Incorporated, hopefully after the special stockholders’ meeting described in the attached notice. Attached to that letter was a list of the new officers and directors of Dyna-Mech. Steckerl and Berke did not appear on that list. Robert B. Potts, listed as “Secretary and Director of Canusa Holdings Limited”, appears on that list as the new Dyna-Mech Secretary. Also attached to that letter was a notice of a special stockholders’ meeting of Dyna-Mech to be held on July 22, 1972 in Fort Erie, Ontario. That notice was dated July 5, 1972 and was signed by Robert B. Potts as Dyna-Mech’s Secretary. The shareholders’ meeting announced by the notice of July 5, 1972 did in fact take place on July 22, 1972 in Fort Erie, Ontario, the headquarters of Canusa and the residence of Miller and Potts. Although there is some dispute as to the details of what occurred at that meeting, its basic outline is clear. After a buffet luncheon paid for by William Thompson, and a brief presentation, including the showing of a portion of a film which a company controlled by William Thompson was then in the course of producing in California, the Dyna-Mech shareholders assembled separately by themselves in another room. There, at a meeting chaired by Goldman, four proposals were adopted. First, Dyna-Mech’s name was changed to William Thompson, Incorporated. Second, the number of authorized shares of stock was increased from two to ten million shares. Third, the articles of incorporation were amended to broaden the authorized scope of Dyna-Mech’s operations. Fourth, the shareholders elected a new Board of Directors. Those proposals were only adopted after Berke vehemently opposed the increase in the number of shares. In so doing, Berke emphasized that William Thompson had not yet put any money into Dyna-Mech and that any increase in the number of shares should await evidence of Thompson’s good faith. Berke, however, did vote in favor of the other three proposals. At that July 22, 1972 meeting, approximately 750,000 of the 1,776,306 shares of Dyna-Mech th(en outstanding were voted. Miller voted the 220,000 shares of Dyna-Mech which Canusa held, for all four propositions. Steckerl was not present, but Goldman similarly voted the latter’s proxy for 370,000 shares in favor of all four of the propositions. Neither of those blocks separately amounted to a majority of the shares represented at that meeting, but together those 590,000 shares amounted to over 78% of the 750,000 represented. After the shareholders’ meeting was concluded, Dyna-Mech’s new Board of Directors, which did not include Goldman, adjourned to the Canusa offices which were in another building. At that meeting, Philip Sehreiber, Esq. was designated as Dyna-Mech’s corporate counsel, although no resolution was passed removing Goldman from that position. Goldman testified that he was not aware that he had been replaced as Dyna-Mech’s corporate counsel until late August, 1972. After the July 22, 1972 meeting, William Thompson took Dyna-Mech’s books and records with him to California. At some time after July 22, 1972, 1,000,000 shares of Dyna-Mech stock were issued to William Thompson and 150,000 to his brother Larry Thompson. It is against that background of Dyna-Mech’s corporate history that the transaction involving Wassel, the plaintiff herein, and the defendants, Stiller-man and Eglowsky, must be viewed. At some time in early July 1972, Eglowsky and Stillerman placed the following advertisement in the Wall Street Journal: CAPITAL WANTED LAND DEVELOPMENT COMPANY specializing in recreational acreage ready to go public. Will accept a few additional investors. 212-867-2541 Wassel, after reading that ad in the Friday, July 21, 1972 edition of that newspaper, called the indicated telephone number, a number which in fact was that of an answering service, and left his Baltimore, Maryland phone number with the answering service. A day or two later, Stillerman and Eglowsky returned Wassel’s call, and inquired of Wassel as to how much money he had to invest. Wassel testified that he replied that he only had $30,000 to invest. Eglowsky, on the other hand, testified that Wassel responded that he (Wassel) managed an investment syndicate as well as having funds of his own to invest. In this instance at least, this Court finds Eglowsky’s testimony to be more credible and finds that Wassel held himself out as having considerably more funds to invest than he actually had or controlled. During that telephone conversation, defendants described four investment opportunities which they were ready to make available to Wassel. One involved “Tiderock”, a corporation which owned certain real estate and whose stock was privately owned. Defendants told Wassel that Tiderock was going to go public soon but before it could so do its financial statement required strengthening by the input of new cash. Defendants offered Wassel the opportunity to buy stock of Tiderock. Another opportunity defendants mentioned related to the stock of a bankrupt corporation, which corporation was being acquired by a solvent corporation which was going to place valuable assets into the bankrupt shell and accordingly cause the stock of the bankrupt to rise considerably. The other two opportunities were not clearly specified or otherwise described during the trial of this case. Wassel told Stillerman and Eglowsky that his business dealings often took him to New York and he would call them before he next came to New York. Sometime previously, Eglowsky and his father-in-law had purchased 25,000 shares of Dyna-Mech stock at $0.10 per share from a Leon Nassar. During July 1972, Eglowsky was aware that Dyna-Mech had been a dormant company for at least a year. On July 9, 1972, Stiller-man and Eglowsky were contacted by Miller who said that he had 130,000 shares of free-trading Dyna-Mech stock available at $1.25 per share. Miller confirmed that offer by a letter dated July 10, 1972 to which he also attached a copy of the notice to Dyna-Mech’s stockholders of the upcoming July 22nd Dyna-Mech shareholder meeting. Eglowsky and Stillerman responded by asking Miller for more information about Dyna-Mech and about William Thompson. After Miller supplied additional information, Eglowsky and Stillerman, on July 17, 1972, made a tentative offer to Miller to purchase at $1 per share 80,000 of the 130,000 shares which Miller had offered and to acquire an option on the remaining 50,000. Two conditions were seemingly placed upon that offer: (1) the stock must be “free trading”; and (2) in the event that Dyna-Mech was not listed in the “Pink Sheet” [sic] — i. e. quoted as publicly trading in the OTC market — by October 31, 1972, the transaction would be rescinded. Miller was no stranger to Stillerman and Eglowsky — or vice versa — in July 1972. There had previously been a number of “deals” between Miller, on the one hand, and Stillerman and Eglowsky, on the other. Further, there have been a number of additional deals between them since the transactions considered herein took place. Indeed, there were other deals going on between them in 1972 simultaneously with the Dyna-Mech transaction. In fact, Canusa had originally been a corporation named American Franchise Development Corp. which was controlled by Gilled Industries, Inc. which in turn was controlled by Stiller-man and Eglowsky, who caused control of American Franchise Development to pass to Miller. It appears that as a result of a number of complicated transactions which took place during the summer and fall of 1972 Miller owed Stiller-man and Eglowsky a minimum of $40,000, excluding the effect of the Dyna-Mech transaction. In connection with one of those transactions Miller had given Stillerman and Eglowsky a check for $9,300.06 which had twice, after deposit by Stillerman and Eglowsky, failed to clear. In late July 1972 Wassel telephoned Stillerman and Eglowsky from Baltimore to say that he would be going to New York within the next day or two and wished to meet and speak with them about the investment opportunities which they had previously mentioned. They told Wassel that he could not invest in Tiderock since the office of the Attorney General of New York had informed them that their ad in the Wall Street Journal might constitute an illegal public offering if any sales were made pursuant to it, but that they still had several other attractive opportunities available. One or two days after that telephone conversation Wassel and Eglowsky met in a New York hotel near the train station. According to Eglowsky, Wassel told Eglowsky that he headed an' investment syndicate which had $100,000 available to invest; and Eglowsky told Wassel that he could not participate in the Tiderock deal for the reason he had previously given Wassel, but that Stillerman and he were investigating an investment in a bankrupt company which was being taken over by a solvent one. Also, according to Eglowsky, he said that a group was. being formed to purchase all or almost all of the free trading shares of the bankrupt and that he expected that the stock of the bankrupt company would increase greatly in value; and he (Eglowsky) offered to let Wassel into the group in return for 25% of any profit which Wassel might make from the transaction. The meeting broke up with Eglowsky telling Wassel that he would get in touch with Wassel once the bankrupt company transaction had moved ahead. This Court accepts Eglowsky’s account of that meeting. Not too many days thereafter Miller arrived in Stillerman’s and Eglowsky’s New York office with a certificate for 220.000 shares of Dyna-Mech in the name of Canusa and with an attached blank stock power, signed by Potts as Canusa’s Treasurer, witnessed by Goldman and dated September 13, 1971. That stock certificate bore upon it the restrictive legend set forth supra at p. 1336. When Eglowsky asked Miller how many shares of Dyna-Mech Miller owned in total, Miller said that he owned 130.000 shares himself and that Zertel Holdings Company, the stock of which he (Miller) owned, held another 140,000 shares. Miller said that all of those shares had originally been owned by Canusa but that they had been given to him and to Zertel during the previous year in satisfaction of loans of $200,000 to $300,000 which he had personally made to Canusa. Eglowsky said that, subject to verifying that Miller’s shares were free trading, he and Stillerman were willing to put together a group to purchase the 130,000 shares, but that they wanted some sort of control over the other 140,000 to prevent Miller from selling them in the market and depressing the price. Miller assured them that the shares were free trading and gave them Goldman’s name. Goldman, Miller said, was counsel for Dyna-Mech and either had written or was in the process of writing an opinion letter to the transfer agent stating that all of the shares Miller and Zertel owned were free trading and that the restrictive legend could be removed. Miller also assured Eglowsky and Stillerman that Dyna-Mech would be listed in the Pink Sheets by the end of October. Miller agreed to let Eglowsky and Stillerman “hold” the 140,000 shares of Dyna-Mech which belonged to Zertel while Eglowsky and Stillerman were putting together a group to buy the 130,000 shares which Miller owned in his own name. Miller then left the 220,000 share certificate with Eglowsky and Stillerman with the understanding that the latter would take the certificate to the transfer agent, Central Trust, in Rochester, in order to have those shares reissued in the “street name” of Otto Weinmann, a New York brokerage firm, in smaller certificates and without any restrictive legend upon them. Within the next day or two Eglowsky called Goldman to verify that the shares were free trading. Eglowsky testified that he told Goldman that he was forming a group to buy those shares. Goldman, according to Eglowsky, said that those shares were free trading and that he was sending a letter to that effect to Central Trust. Eglowsky testified that he then called Central Trust to verify that the Canusa shares were free trading. Atfield, who was then in charge of Central Trust’s stock transfer department, does not remember such a call. For reasons discussed, it may not be important whether any such conversation took place. But if it did, it was at best a perfunctory conversation in which Eglowsky was told that certain shares could not be reissued without a restrictive legend upon them unless a letter of corporate counsel was received, and that Goldman had indicated that he expected to submit such a letter to Central Trust in the near future. After Eglowsky’s conversation with Goldman he sent the 220,000 share certificate to Manjit Shukla, an employee of Otto Weinmann, and told Shukla that he (Eglowsky) had been told by Goldman that the shares were free trading and that those shares could be reissued in street name without the restrictive legend upon them as soon as Goldman’s letter arrived at Central Trust. Shukla was to wait until that letter did arrive and then go to Rochester and get the shares reissued. Shukla then began to call Goldman repeatedly. Otto Weinmann’s telephone records for August 1972 indicate that Goldman’s Rochester telephone number was called three times on August 7, 1972 and five times on August 8, 1972. Shukla indicated in a deposition taken in connection with this case that he definitely spoke with Goldman and asked him if his opinion letter had been sent and if the stock was now free trading. Goldman admits that Shukla or someone from Otto Weinmann called his office repeatedly during that period of time but states that he never spoke with anyone, that no message was ever given to him and that he paid no attention and took no special interest in the eight long distance calls within 48 hours. This Court simply cannot accept Goldman’s story and finds that Goldman did speak with Shukla and that Goldman knew that the Otto Weinmann brokerage house was eagerly awaiting the-issuance of Goldman’s opinion letter. Goldman testified that by August 8, 1972 he had completed the investigation necessary for him to issue a new opinion letter which would state that the restrictive legend could be removed from the 220,000 share certificate. Although Goldman testified that one of the major objections which Central Trust had raised in the June 23, 1972 meeting had been the lack of up-to-date Dyna-Mech financials, and although Goldman did not receive the Dyna-Mech financials he had ordered from Steffan & Company until August 15, 1972, nonetheless on August 8, 1972 Goldman sent a letter to Central Trust, accompanied only by a listing of the new officers and directors of Dyna-Mech and up-to-date financials of William Thompson International, Inc. and William Thompson Productions, Inc., two other corporations the stock of which was apparently owned or controlled by William Thompson. That letter read in part: -X- * X X X X You are hereby authorized to transfer 220,000 shares of the common stock of Dyna-Mech Sciences, Inc. as represented by the certificate which now stands in the name of Canusa Holdings Limited and to reissue a certificate as requested without the investment legend which appears on the original stock certificate. It is our opinion that more than two years having elapsed since the stock was originally issued that the stock has now come to rest. X X X X X X On the next day, Shukla appeared at Central Trust with the certificate. Central Trust broke it down into a large number of 500, 1000 and 5000 share certificates and reissued all of those certificates in the name of Otto Weinmann, with no restrictive legend upon them. On August 16, 1972, Miller having delivered the additional 50,000 shares of Dyna-Mech stock which he controlled to Eglowsky and Stillerman, and the latter having given them to Shukla, Shukla journeyed again from New York City to Central Trust in Rochester and had those certificates reissued free of restriction, and in Otto Weinmann’s name. All 270,000 shares of Dyna-Mech issued in that name and received by Shukla in Rochester were turned over by the latter to Eglowsky and Stillerman. Since neither Goldman nor Central Trust played any significant role in events subsequent to August 16, 1972, it is appropriate at this point in this opinion to set forth findings of facts concerning their respective roles. Goldman, as Dyna-Mech’s corporate counsel, played a prominent and a key role in the negotiations leading up to the take-over of Dyna-Mech by William Thompson. Pursuant to the June 7 and June 16 documents Goldman committed himself to getting the restriction removed from the Canusa shares. As a result of the Eglowsky and Shukla telephone calls Goldman was aware that those shares were not simply being sold to the Canusa shareholders or to William Thompson, who by this time had issued to himself 1,000,000 shares of additional Dyna-Mech stock, but rather that those shares were being sold to strangers not on the list of Canusa shareholders and that a New York City brokerage house was eagerly awaiting the issuance of his opinion letter pursuant to which certain of Dyna-Mech’s stock would be free trading and reissued minus a restrictive legend. Goldman, who had been paid no legal fee before the summer of 1972 for his work as Dyna-Mech’s counsel since his retention as counsel in July 1970, was to receive, pursuant to the June 7 and June 16 documents, a $15,000 legal fee if all arrangements were completed. Goldman chaired the July 22, 1972 meeting and voted 370,000 shares at that meeting in favor of William Thompson’s assumption of control over Dyna-Mech. In an affidavit dated July 23, 1973 in connection with another proceeding Goldman stated in part: * * * [0]n July 22, 1972, in Fort Erie, Ontario, a special shareholders’ meeting was held at which time control of the corporation passed to a group headed by Mr. William Thompson of Los Angeles, California. Your deponent . further states that Mr. Thompson was only interested in the corporate shell of Dyna-Mech Sciences, Inc. and any tax loss carry forward. * * * shortly thereafter it became apparent that Mr. Thompson had suffered severe financial setbacks and that his taking control of Dyna:Mech Sciences, Inc. was mere window-dressing and would in no way affect Dyna-Mech Sciences, Inc.’ insolvency. * * * The evidence in this case clearly and convincingly establishes that on August 8, 1972 Goldman rendered his quoted opinion letter to Central Trust as part of a comprehensive agreement reached between Goldman, Miller and Thompson who between them were clearly planning and controlling Dyna-Mech’s destiny; and that Goldman was well aware on August 8, 1972 that the Canusa shares were going to be offered for sale to the public as soon as the restrictive legend had been removed and new certificates issued, but that nonetheless he wrote and delivered his August 8, 1972 letter in pursuance of the June documents. Central Trust’s position is quite different. This Court finds that Central Trust did not remove the restrictive legend from the Dyna-Mech stock represented by the certificate in Canusa’s name until (1) it received an opinion from Goldman whom Central Trust believed in good faith and with good reason was corporate counsel fbr Dyna-Mech and (2) until it received from Otto Weinmann, in whose name the new shares were issued, a signed “letter” of “representations and warranties” which was grossly misleading. In view oí all of the circumstances including the size of its fee and the practical realities as to how much independent investigation a transfer agent can be expected to make, Central Trust neither knew nor should have known on August 8, 1972 of any improprieties in the transfer of Canusa stock nor was it guilty of any culpably negligent practices in its conduct of its duties as stock transfer agent. As stated supra, neither Goldman nor Central Trust played any role in the subsequent events after August 9, 1972 involving Wassel and the latter’s attempted and/or accomplished wheelings and dealings with Eglowsky and Stiller-man and later Thompson. After August 9, 1972, Eglowsky and Stillerman had in their possession 270,000 shares of unrestricted Dyna-Mech stock in small denomination street-name certificates, and felt sufficiently confident to “purchase” from Miller on August 15, 1972 25,000 shares at $1.00 per share and an option for another 50,000 shares. Purchase is perhaps not an exact description of what really occurred since only $4700 of the purchase price was paid in cash and the rest was covered by three post-dated checks, two bearing dates of September 4, 1972 and signed by Eglowsky, and one check being for half the purchase price, i. e., $12,500 signed by Stillerman, bearing the date of November 2, 1972. In view of the amount of the then outstanding debt Miller owed to Eglowsky and Stillerman and the nature of the previous dealings among the three, a check dated that far in the future could hardly be considered the real equivalent of immediate payment. Nonetheless, on August 15, 1972, according to Eglowsky’s testimony, Miller executed an undated “Bill of Sale” to Eglowsky and Stillerman for 25,000 shares of Dyna-Mech stock. There were differences in testimony at trial as to whether Wassel next contacted Stillerman and Eglowsky or vice versa, but in any event Stillerman and Eglowsky mailed to Wassel on August 24, 1972 a copy of Miller’s “Bill of Sale”. An accompanying cover letter signed “Ed and Steve” ended: “We look forward to seeing you next week.” Shortly thereafter, Wassel called Stiller-man and Eglowsky and said that he was interested in the Dyna-Mech transaction and would come to New York to discuss it with Stillerman and Eglowsky if they paid his expenses to New York including his air fare from Baltimore. Stillerman and Eglowsky agreed to pay Wassel’s expenses but insisted that he travel to New York by train rather than plane. On August 30, 1972, Wassel did arrive (via train) in New York. He immediately went to the office of Stillerman and Eglowsky where he stayed for approximately five hours. At trial Wassel insisted that he was shown absolutely no written material relating to Dyna-Mech. Eglowsky testified, however, that he showed Wassel a number of documents including promotional material concerning the motion picture which William Thompson was in the process of producing as well as various financial statements of William Thompson and Dyna-Mech. Eglowsky’s testimony that, as an eager seller, he waved every piece of paper he could find in the face of a potential buyer like Wassel is much more credible than Wassel’s testimony that he simply sat and listened to Stillerman and Eglowsky talk about Dyna-Mech over a period of five hours, without once being shown any written support for their claims. There was also considerable dispute about Eglowsky’s oral statements to Wassel on August 30, 1972 concerning the Dyna-Mech transaction. Wassel testified that Eglowsky promised that Wassel’s money would triple in three weeks. Eglowsky testified that he gave a rather straightforward though optimistic evaluation of the transaction. The truth would seem to lie somewhere in between. Undoubtedly, Eglowsky painted a very attractive picture of the Dyna-Mech transaction. On the other hand, Wassel’s over-eagerness caused him to view that glowing picture in an even more attractive light than painted by Eglowsky. In particular, Eglowsky seems to have emphasized that there was a limited number of free trading shares of Dyna-Mech outside of the Miller shares. Also, Eglowsky apparently implied or even perhaps rather explicitly stated that the fact of the revitalizing infusion of Thompson’s assets into the Dyna-Mech shell was not widely known and was “inside” information to which Eglowsky and Stillerman were privy because of their dealings and association with Miller. Wassel construed those comments by Eglowsky as meaning that Stillerman and Eglowsky could and did intend to “finagle” (Wassel’s own word) the price of Dyna-Mech for their own profit. Seemingly, Wassel had no objection thereto as long as he also was a beneficiary of the finagling. In addition to the Dyna-Mech transaction Wassel also inquired during his August 30, 1972 meeting with Stillerman and Eglowsky about any other “deals” which Stillerman and Eglowsky were then putting together in which he (Wassel) might participate. In particular Wassel asked if he could participate in the Tiderock transaction, but Stillerman and Eglowsky repeated what they had earlier told Wassel, namely, that the New York Attorney General’s statement that the Wall Street Journal ad possibly constituted a public offer had made them decide not to sell any participation in Tiderock to any person who had responded to that ad. Wassel then inquired about Gilled Industries, Inc. Eglowsky told Wassel that any shares of Gilled purchased from Eglowsky and/or Stillerman who were respectively President and Vice President of Gilled would be restricted but that unrestricted, i. e., free-trading, shares of Gilled could possibly be purchased from Peter Stone who was an attorney who had previously done some legal work for Gilled and had been paid for that work in Gilled stock. Wassel also indicated a desire to participate with Stillerman and Eglowsky in the option which they held to purchase an additional 50,000 shares of Dyna-Mech from Miller. Eglowsky testified that he telephoned William Thompson from his office on August 30, 1972, that he put Wassel on the telephone with Thompson, that Wassel and Thompson then spoke for approximately twenty minutes, and that after the phone call Wassel seemed impressed with Thompson’s plans for Dyna-Mech. Seemingly, on that date, August 30, 1972, Wassel, Eglowsky and Stillerman reached agreement upon a number of investments Wassel was to make. However, Wassel did not sign any documents on August 30, 1972, but indicated that he would return the next day with Robert Howard, Esq., a New York Attorney with whom Wassel had previously participated in an unrelated investment transaction involving the purchase by a group including Wassel and Howard of some bonds. As Wassel put it, he wanted Howard “to check the wording” before he, Wassel, signed any documents. The next morning, August 31, 1972, Wassel called Howard from Stiller-man’s and Eglowsky’s office and asked Howard to come over. When Howard arrived Wassel took him aside and told Howard that he (Wassel) “was making a terrific deal” and that “the deal was all set”. Essentially, Howard’s role at the August 31, 1972 meeting was to draw up necessary documents to effectuate properly the transactions which Wassel, Eglowsky, Stillerman and Stone had already agreed to. The first of those transactions was that Wassel was to purchase 25,000 shares of Dyna-Mech at $1.00 a share from Miller, which shares were to be pooled with the 25,000 Eglowsky and Stillerman had previously purchased from Miller, and were to be kept in street name with Otto Weinmann. Stillerman and Eglowsky were to have discretionary authority for a four-month period to sell those shares with all sales to be allocated equally between Wassel’s shares and Stillerman’s and Eglowsky’s shares. It was also agreed that Wassel was to have a 25% interest in the option held by Stillerman and Eglowsky to purchase the additional 50,000 shares of Dyna-Mech from Miller. In a separate transaction Gilled was to grant Wassel an option to purchase on or before September 29, 1972, 50,000 shares of restricted Gilled stock at $0.46 per share. Apparently Wassel did not pay anything extra for that option. Finally, Wassel was to purchase from Stone for $3,000 an option to purchase, on or prior to November 30, 1972, 18,411 shares of unrestricted Gilled stock for $1.00 per share owned by Stone. The Gilled option for 50,000 shares contained a provision that should Wassel not exercise the option to purchase Stone’s shares by September 29, 1972, then Gilled would pay Wassel $3,000 for that option. Wassel testified that the plan underlying those arrangements was the expectation that a large, short-term profit would be realized by Stillerman, Eglowsky and Wassel in the Dyna-Mech stock as soon as public trading in Dyna-Mech began, and that Wassel’s share of the profit would be available to enable him to pick up the options on the additional 50,000 shares of Dyna-Mech, the 50,000 shares of Gilled, and the Stone option. Wassel testified that Stillerman and Eglowsky assured him that he, Wassel, would be a rich man within a short time and would make $300,000 to $400,000 from his investment of a total of $28,000. On August 31, 1972, before he signed any documents, Wassel spoke with Miller over the telephone and discussed the Dyna-Mech transaction with him. Wassel then signed the agreement drafted by his attorney, Howard, and previously agreed to by Wassel, Eglowsky and Stillerman, which provided that Wassel was to purchase 25,000 shares of Dyna-Mech from Miller at $1.00 per share and was to have a 25% interest in the option to purchase 50,000 shares which Stillerman and Eglowsky had acquired from Miller. Wassel wrote and signed a check for $25,000 made out to Miller and gave it to Stillerman and Eglowsky. Then Wassel went with Stillerman to Stone’s office where he signed an option agreement seemingly drafted by Stone and wrote out a cheek for $3,000 payable to Stone. Additionally, a Gilled corporate resolution which gave Wassel an option to purchase 50,000 shares of Gilled was drafted by Howard and typed in Howard’s office the next day, September 1, 1972. On August 31, 1972, after the above transactions were completed, Eglowsky wrote Wassel a cheek on Gilled’s account to pay for Wassel’s trip expenses to and in New York. Wassel then returned to Baltimore. Some days later, after some initial confusion, Wassel received a receipt from Otto Weinmann indicating that 25,000 shares of Dyna-Mech were being held for his account in street name at Otto Weinmann. After his purchase of the Dyna-Mech stock, Wassel eagerly anticipated its opening for public trading and during September 1972 repeatedly called Stiller-man and Eglowsky to ascertain why the Dyna-Mech stock had not yet appeared in the Pink Sheets. Stillerman and Eglowsky told Wassel to be patient and that the OTC trading of Dyna-Mech stock had been temporarily delayed. Later in September 1972 Wassel was contacted directly by Miller who offered him a package investment in which for $50,000 Wassel would receive 20,000 shares of unrestricted Dyna-Mech stock and 100,000 shares of Anusound Corporation which apparently was one of the Canusa companies under a new name. Wassel accepted Miller’s offer to pay Wassel’s expenses for a trip to New York City, journeyed to that city, talked to Miller, but did not enter into any transactions with Miller as a result of that trip. Wassel testified at trial that after that meeting with Miller, he “felt that he had been lied to” by Eglowsky and Stillerman because he (Wassel) then recalled that Eglowsky and Stillerman had previously assured him that Wassel’s 25,000 shares, the 25,000 shares owned by Eglowsky and Stillerman, and their jointly held option on 50,000 shares represented all of the outstanding “tradeable”, i. e., unrestricted, Dyna-Mech stock. However, although Wassel has testified that he felt during his trip to New York City which was paid for by Miller that he (Wassel) had been previously lied to by Eglowsky and Stillerman, Wassel did not at that time confront Stillerman and Eglowsky with that alleged lie on their part, but rather kept calling them to find out when public trading in Dyna-Mech would begin. In early October 1972 Wassel received a telephone call from William Thompson in California. Thompson indicated that he wished to offer some investments to Wassel. Wassel agreed to go to Los Angeles to meet with Thompson, but only after Thompson agreed not only to pay Wassel’s expenses in Los Angeles and between Los Angeles and Baltimore, but also to pay the entire cost of a ten-day far-western vacation for Wassel and his wife in San Francisco and Las Vegas after Wassel left Thompson in Los Angeles and before Wassel and his wife returned to Baltimore. During September Wassel not only made a number of telephone calls to Eglowsky and Stillerman to determine when Dyna-Mech would be listed in the Pink Sheets, but Wassel also called and was called by Otto Weinmann repeatedly for the same reason. Otto Weinmann’s telephone records indicate that on September 22, 1972 a six-minute call was made from Otto Weinmann to Wassel, on September 25, -1972 an eleven-minute collect call was accepted by Otto Weinmann from Wassel, on September 29, 1972 a seventeen-minute collect call from Wassel was accepted, on October 2, 1972 a thirteen-minute call was placed to Wassel, and on October 3, 1972 a one-minute call was placed to Wassel. On October 4, 1972 Dyna-Mech appeared in the Pink Sheets and began trading publicly at a price of $1 bid and $1 % asked. On the same day, i, e., October 4, 1972, at 9:06 A.M., a two-minute telephone call was made from Otto Weinmann in New York to Wassel’s home telephone in Pikesville, Maryland. Wassel testified that he did not receive that call nor did he receive any message from any person that Otto Weinmann had called that morning. In view of Wassel’s admission at trial that he had repeatedly called Otto Weinmann during September to see if Dyna-Mech was trading publicly and in view of the fact that Wassel’s testimony herein has not proven to be credible in a number of other instances, this Court does not attach credibility to Wassel’s said denial and finds that on October 4, 1972 Wassel was told by Otto Weinmann that Dyna-Mech had begun to trade publicly at a price equal to or higher than that at which Wassel had purchased his Dyna-Mech stock. On October 6, 1972 Wassel and his wife flew from Baltimore to Los Angeles at Thompson’s expense. While Wassel was in California Thompson offered Wassel two investments. One involved the purchase by Wassel of 300,000 shares of restricted Dyna-Mech stock for $50,000. The second related to the purchase by Wassel of a 25% interest in a television program which Thompson was attempting to produce and sell. Wassel testified that his sole purpose in accepting Thompson’s invitation to California was to find out more about Dyna-Mech from the man who was then running it. Wassel also testified that it was only upon his arrival in California on October 6, 1972 that he obtained a copy of the report to Dyna-Mech shareholders signed by Thompson and dated September 8, 1972. However, deposition testimony given by Wassel prior to trial contradicts that assertion. Wassel’s explanation at trial of the conflict in his statements was evasive and unconvincing, and leads this Court to find that Wassel as a Dyna-Mech shareholder received from Otto Weinmann a copy of that September 8, 1972 letter on or shortly after that date. Wassel, even though he, by his own account, knew at the time he did so that Dyna-Mech was a bankrupt company, signed a “Memorandum of Agreement” dated October 6, 1972 with Thompson. That document reads as follows: MEMORANDUM OF AGREEMENT William Thompson, Inc., hereby agrees, in consideration for the sum of $1.00 (One dollar), to sell to Dr. Bernard V. Wassel the sum of 300,000 (Three hundred thousand) shares of restricted investment stock for the total sum of $50,000.00 (Fifty thousand dollars) payable on or before November 30, ’72. This transaction has been approved and agreed to by the board of Directors of William Thompson, Inc., at a special meeting held on September 30, 1972, at Lake Dallas, Texas. ,/s/ William Thompson, Inc. [SEAL] William Thompson, Inc. William Thompson, President Agreed and Accepted by: /s/ Bernard Wassel Dr. Bernard V. Wassel Witnessed by: /s/ Calvin Ward Calvin Ward October 6, 1972. At trial Wassel, a non-lawyer, characterized that “Memorandum” as an “option” and testified that he had no intention of investing a single penny in Dyna-Mech stock at the time he signed the “Memorandum” and that, by signing it, he (Wassel) was only attempting to acquire documentary evidence which he could take back with him to New York and show to Eglowsky and Stillerman who, he (Wassel) had come to believe, by October 6, 1972, had “swindled” him. Wassel’s alleged lack of interest in purchasing shares of restricted Dyna-Mech stock at 170 apiece on a day when shares of unrestricted Dyna-Mech were being publicly traded at U/j-l1/^ bid and l%-2 asked is skeptically noted. On October 6, 1972, in addition to signing the aforementioned Memorandum, Wassel also contracted to purchase a 25% interest in a television program which Thompson was producing. That action is noteworthy in the face of Wassel’s testimony at trial that when he was with Thompson in California in October 1972 he (Wassel) had neither the capital nor the intention to enter into any further investments whatsoever. Not only is Wassel’s account of his dealings with Thompson in California inherently incredible, but it is also directly contradicted by the testimony of both Eglowsky and Calvin Ward, a Vice-President of Dyna-Mech under the Thompson regime and the man who witnessed the execution of the October 6, 1972 Memorandum by Thompson and Wassel. Eglowsky testified that during October 1972 Thompson telephoned him in New York and told him that Wassel had bought an additional 300,000 shares of Dyna-Mech. Eglowsky then telephoned Wassel and, after some initial dissembling, Wassel admitted buying the additional Dyna-Mech shares and the 25% interest in the television program. Wassel indicated to Eglowsky that he believed that he, Wassel, had pulled off an investment coup in buying the Dyna-Mech stock from Thompson and offered to let Stillerman and Eglowsky participate with him in the transaction. Eglowsky’s testimony that Wassel bought the Dyna-Mech stock outright is supported by Ward who was present when Wassel and Thompson signed the “Memorandum”. Ward testified that from Wassel’s statements and from the general tone of the discussion at the time of the signing, it was his (Ward’s) impression that Wassel was buying the Dyna-Mech shares outright rather than acquiring an option to buy them. After Wassel signed the Memorandum and signed another document relating to the television production, Wassel and his wife continued their vacation in San Francisco and Las Vegas, spending a total of ten days in those two cities. Their expenses for the entire trip were paid by Thompson. Wassel testified that once he saw the September 8, 1972 letter to shareholders and realized that Thompson was willing to offer 300,000 shares of Dyna-Mech at less than $0.17 per share he realized that he had been swindled by Stillerman and Eglowsky. Even if this Court were to accept that testimony at face value, there would be no apparent explanation for Wassel’s spending ten days vacationing before making any effort to contact the two men whom he now believed had swindled him. But in any event, this Court rejects Wassel’s testimony regarding his California trip, and finds that Wassel, who had been told by Otto Weinmann on October 4, 1972 that Dyna-Mech stock had begun publicly trading at above the $1 per share price which Wassel had paid for his shares, went to California and signed the “Memorandum” and other document with Thompson fully intending to meet his obligations under those documents before the date of November 30, 1972 specified in the Memorandum, by using the profits he (Wassel) expected to realize from the various transactions he had entered into with Stillerman, Eglowsky and Stone. After Wassel left Los Angeles and while he and his wife were on the vacation portion of their far-western trip, Dyna-Mech continued to trade publicly with bid prices in the range of 1 to 1%. On October 16, 1972, however, the day Wassel returned to Baltimore, Dyna-Mech’s price began to drop. On October 17, 1972, Dyna-Mech’s bid price was only i/2 • After October 17, 1972, and during the remainder of the period relevant herein, the bid price for a share of Dyna-Mech never rose above %. Wassel then contacted Stillerman and Eglowsky and arranged a meeting with them to be held on October 24, 1972. On that day, Stillerman, Eglowsky and Wassel met with Howard present. During the course of that meeting, after Wassel indicated that he had no intention of exercising the Stone option, Eglowsky wrote Wassel a $3,000 check. Wassel testified that at the outset of the meeting he accused Stillerman and Eglowsky of swindling him, and demanded the return of all of his money. Wassel testified that Stillerman and Eglowsky agreed to return all of Wassel’s money, i. e., $28,000, and that the $3,000 was only an initial payment. Eglowsky testified that the sequence of events was quite different. He testified that when Wassel appeared at the office with Howard, he was accompanied by Ward, as mentioned previously a Vice President of Dyna-Mech, who told Stillerman and Eglowsky that Wassel had asked Ward to collect from them the money that Wassel owed Thompson for the Dyna-Mech and television production transactions. Eglowsky told Ward that they were not interested in any investments with Thompson and would not give Ward any money. Howard then said that Wassel had decided not to exercise the Gilled option and, as provided in the Gilled corporate resolution which Howard had drafted, Eglowsky then wrote Wassel a check for $3,000. This Court accepts Eglowsky’s testimony that the $3,000 was in payment for the option and rejects Wassel’s testimony that the $3,000 was a down payment on the return of $28,000. That conclusion is supported by Eglowsky’s endorsement of the back of the check which read: On behalf of Gilled Industries for op- . tion on 18,411 shares Wassel’s handwritten endorsement was written on the back of that check directly below that of Eglowsky. Wassel conceded at trial that he read that endorsement at the time at which Eglowsky wrote it. Wassel also testified that he waited until he had received the said $3,000 check before he (Wassel) accused Stillerman and Eglowsky of swindling him and before he demanded the return of all of the rest of his money. Eglowsky and Stillerman refused and apparently either they and/or Howard suggested that some effort be made to see if Dyna-Mech could be saved as a viable company. The October 24, 1972 meeting then broke up with Wassel storming out of Stillerman’s and Eglowsky’s office and threatening to complain about them to the office of the Attorney General of the State of New York and to the federal Securities and Exchange Commission (SEC). Over the next six or seven weeks Wassel conducted a seemingly continuous campaign to persuade Stiller-man and Eglowsky to return Wassel’s $25,000. . Seemingly at no time did Wassel ever even try to contact Miller to whom his check for $25,000 had been made out. Wassel’s campaign by his own admission did include complaints to the New York Attorney General’s office, and to the SEC. Wassel also admitted making calls to Eglowsky’s wife and to Stillerman’s father for the purpose, Wassel testified, of persuading Dr. Stillerman and Mrs. Eglowsky to assist him in his obtaining the return of his money. On December 7, 1972, Wassel instituted the present action against Stillerman and Eglowsky. PLEADINGS Wassel’s original complaint, filed pro se, named Eglowsky, Stillerman and Stone as defendants, and alleged that Wassel had replied to an advertisement in the Wall Street Journal, and subsequently had received in Baltimore a telephone call placed to him from New