Bertha Hecht, and v. Harris, Upham & Co., a Partnership, Harris, Upham & Co., Inc., a Corporation, And

The cross appeals by Harris, Upham & Co., Harris, Upham & Co. Inc. (appel *1206 lants), and Mrs. Bertha Hecht (appellee) are from a judgment of the District Court awarding appellee $504,391.02. The opinion of the District Court is reported at 283 F.Supp. 417 (1968). The basic facts of the case are set forth there.

In January 1955 Mr. Hecht died leaving an estate of securities to his wife, the appellee, of a net value of $508,532.-00. Shortly after Mr. Hecht’s death, but before distribution of the estate, a close business and social relationship was formed between Mrs. Hecht and an investment broker, Mr. Asa Wilder (co-defendant below). Mrs. Hecht transferred her separate securities account (net value $42,000) from Walston & Co. to Hooker & Fay, with whom Wilder was then employed. When her husband’s estate was distributed to Mrs. Hecht it was likewise placed with Hooker & Fay. In May 1957 Wilder left Hooker & Fay to become a Representative and Commodities Manager of Harris, Upham & Co. at their San Francisco office. The Hecht account, valued at about $533,161.00, was then transferred to appellants.

The account remained with Harris, Upham & Co. until March 1964 when Mrs. Hecht’s…

(dissenting in part).

I dissent from the separate opinion on damages.

By taking $143,000 of the judgment away from the plaintiff the Court is adopting the formula for measure of recovery set forth in Newkirk v. Hayden, Stone & Co. CCH Fed.Sec.L.Rep. para. 91,621 (S.D.Calif.1965). There are court said: “Damages should be limited to the amount of the commissions because this is the only element of damage which was proximately caused by defendants.” In narrowing recovery for churning solely to commissions earned (plus interest on the margin account) the Majority overlooks the fact that the dealer in his zeal to earn commissions may have caused damage unrelated in amount to what he earned in commissions. 1

The trial court concluded from the facts of this case that “ * * * the excessive trading of plaintiff’s account by Wilder in both securities and commodities did constitute a single scheme. Although only $7,500 was originally deposited in plaintiff’s commodity account, *1213 Wilder was able to effect an enormous amount of commodity trading by transferring a total of $2^5,360 from her security account to the commodities account. Thus, the security and commodity transactions were…

430 F.2d 1202 Bertha HECHT, Plaintiff, Appellee and Appellant, v. HARRIS, UPHAM & CO., a partnership, Harris, Upham & Co., Inc., a corporation, Defendants, Appellants and Appellees. No. 22971. No. 23017. United States Court of Appeals, Ninth Circuit. June 8, 1970. As Modified on Denial of Rehearing September 4, 1970. 1 COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Emanuel Becker (argued), New York City, Thomas A. H. Hartwell, of Cooley, Crowley, Gaither, Godward, Castro & Huddleson, San Francisco, Cal., E. C. Mahoney, Burlingame, Cal., for appellant. 2 Donald F. X. Finn (argued), New York City, Reed H. Bement, Morris Lowenthal of Lowenthal & Lowenthal, San Francisco, Cal., for appellees. 3 Before MERRILL and DUNIWAY, Circuit Judges, and POWELL, District Judge. * 4 POWELL, ** District Judge. 5 The cross appeals by Harris, Upham & Co., Harris, Upham & Co. Inc. (appellants), and Mrs. Bertha Hecht (appellee) are from a judgment of the District Court awarding appellee $504,391.02. The opinion of the District Court is reported at 283 F.Supp. 417 (1968). The basic facts of the case are set forth there. 6 In January 1955 Mr. Hecht died leaving an estate of…