FIFTH AVENUE BANK OF NY v. Hammond Realty Co., 8023.

• Decision Date: 30 October 1942
• Docket Number: No. 8023.,8023.
• Citation: 130 F.2d 993
• Parties: FIFTH AVENUE BANK OF NEW YORK v. HAMMOND REALTY CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

130 F.2d 993 (1942)

FIFTH AVENUE BANK OF NEW YORK v. HAMMOND REALTY CO. et al.

No. 8023.

Circuit Court of Appeals, Seventh Circuit.

October 30, 1942.

Joseph H. Schwartz, Edward A. Cooper, and Norman H. Nachman, all of Chicago, Ill. (Schwartz & Cooper and Harry Adelman, all of Chicago, Ill., of counsel), for appellant.

Jay E. Darlington and Frederick C. Crumpacker, both of Hammond, Ind., and Walter Myers, of Indianapolis, Ind., for appellees.

Before KERNER and MINTON, Circuit Judges, and LINDLEY, District Judge.

MINTON, Circuit Judge.

The plaintiff, a New York corporation, as executor of the last will and testament of Isabel D. McHie, brought suit in the Northern District of Indiana against the Hammond Realty Company on certain past-due bonds, and against the defendant Sidmon McHie as a guarantor of the payment of said bonds under a written guaranty of April 11, 1933. The District Court found for the plaintiff and against the defendant Hammond Realty Company in the sum of $10,365.47 and costs; and declined to give judgment against Sidmon McHie and entered judgment for him on his counterclaim, holding that McHie was the equitable owner of all the property of which the testatrix died seized. Neither the plaintiff nor the defendant Hammond Realty Company appealed from the judgment against that company. The time for appeal has long since expired, and this judgment has become final and conclusive.

The plaintiff did appeal from that part of the final judgment "that plaintiff recover no judgment against Sidmon McHie," and which found for Sidmon McHie on his counterclaim that he was the equitable owner of the property. After notice of this appeal had been given, an execution was issued against the Hammond Realty Company. Under that execution there was a levy upon certain property of the company, and the marshal collected one thousand dollars from the company on said execution. The defendant-appellee Sidmon McHie has made a motion in this court that the appeal be dismissed on the ground that the plaintiff cannot appeal from a judgment under which it has received a benefit, citing an Indiana statute and numerous Indiana cases to that effect. We recognize the existence of such a rule, but there is a well-known exception thereto, and we think the plaintiff-appellant comes within that exception. The rule and the exception are clearly stated by Judge Shake of the Indiana Supreme Court in State ex rel. Jackson v. Middleton, 215 Ind. 219, 224, 19 N.E.2d 470, 472, 20 N.E.2d 509, as follows:

"The statute (§ 2-3201, Burns' 1933, Sec. 471, Baldwin's 1934) is merely declaratory of the common law rule that a party cannot accept the benefit of an adjudication and yet allege it to be erroneous. 4 C.J.S., Appeal and Error, § 216, p. 416. But, like most general rules, this has its exceptions and it is accordingly recognized that an acceptance of an amount to which the acceptee is entitled in any event does not estop him from appealing from or bringing error to the judgment or decree ordering its payment. City of Indianapolis v. Stutz Motor Car Co., 1932, 94 Ind.App. 211, 180 N.E. 497. The facts upon which the court below rendered judgment against the appellees for $249.33 were stipulated by the parties and are undisputed. The appellant has not challenged the propriety of that part of the judgment by cross-errors and, so far as the motion to dismiss the appeal is concerned, the case comes clearly within the exception to the rule stated above. Appellees' motion to dismiss is therefore denied."

See, also, City of Indianapolis v. Stutz Motor Car Co., 94 Ind.App. 211, 180 N.E. 497.

The judgment against the Hammond Realty Company became final and conclusive and was not appealed from, and the plaintiff on facts stipulated was entitled to the judgment against it in any event. What the plaintiff collected from the Hammond Realty Company was the plaintiff's just due and in no wise prejudiced Sidmon McHie. If the case was affirmed, Sidmon McHie could not be hurt because the plaintiff would be holding the proceeds for the benefit of Sidmon McHie as the equitable owner thereof. If the case was reversed and Sidmon McHie held liable as a guarantor and not to be entitled as equitable owner, then the amount collected on the judgment against the Hammond Realty Company would reduce by that much the amount Sidmon McHie would have to pay as guarantor. The motion to dismiss is overruled.

This brings us to a consideration of the judgment in favor of Sidmon McHie on his counterclaim, and the judgment that plaintiff do not recover against him as guarantor. Sidmon McHie and the testatrix were married in 1909 and lived together as husband and wife until December, 1925, when they separated. On May 12, 1919 Mr. and Mrs. McHie had entered into a written contract for reciprocal wills, each providing that if the other survived he or she would provide by will that such survivor would get the property of the deceased person. After the parties had separated, to wit, on March 22, 1926, they entered into a contract for the disposition and division of their property, and the agreement of May 12, 1919 was expressly rescinded. The contract of March 22, 1926 is a document covering five pages in the record and disposing of many hundreds of thousands of dollars worth of property between the parties. It also...