United States Fidelity & Guaranty Company v. Moore, EC 6759.

• Decision Date: 04 December 1969
• Docket Number: No. EC 6759.,EC 6759.
• Citation: 306 F. Supp. 1088
• Parties: UNITED STATES FIDELITY & GUARANTY COMPANY, Inc., Plaintiff, v. Rita MOORE, Gale Kenneth Nipp, Loren "Red" Brooks and the United States of America, Roy O. Parker and W. S. Moore, Applicants for Intervention, Defendants.
• Court: U.S. District Court — Northern District of Mississippi

306 F. Supp. 1088

UNITED STATES FIDELITY & GUARANTY COMPANY, Inc., Plaintiff, v. Rita MOORE, Gale Kenneth Nipp, Loren "Red" Brooks and the United States of America, Roy O. Parker and W. S. Moore, Applicants for Intervention, Defendants.

No. EC 6759.

United States District Court N. D. Mississippi, E. D.

December 4, 1969.

COPYRIGHT MATERIAL OMITTED

Charles H. McCraine, Jr., Houston, Miss., for plaintiff.

Cason Rankin, Tupelo, Miss., for intervenors.

William M. Dye, Jr., Oxford, Miss., for defendant the United States.

MEMORANDUM OPINION

KEADY, Chief Judge.

On the night of May 29-30, 1967, the Shannon Branch of Peoples Bank & Trust Company at Shannon, Mississippi, was burglarized, its vault broken into and $22,269.54 feloniously taken. On the night of June 20-21, 1967, the West Branch of Holmes County Bank & Trust Company at West, Mississippi, was burglarized, its vault broken into and $49,398.22 feloniously taken. United States Fidelity and Guaranty Company, plaintiff, insured both banks against their burglary losses, paid the sums taken and received assignments from the two banks to all rights of action against persons liable for the burglaries and to the money or property thus unlawfully taken.

In this civil suit, plaintiff has sued defendants, Rita Moore (Moore), Gale Kenneth Nipp (Nipp), Loren "Red" Brooks (Brooks), and the United States for the recovery of cash money represented by certain coins and currency in the amount of $13,160.69 in the possession of the United States and which had been seized at the time law officers arrested Moore and Nipp on July 24, 1967.¹ Also involved in the suit is a 1967 Bonneville Pontiac which plaintiff alleges was purchased with funds stolen from the two banks.

Plaintiff alleged that the seized funds had been stolen by defendants at the time of the bank burglaries, and that it was entitled to recover such proceeds, as well as the automobile purchased by defendants with part of the stolen money. Moore, Nipp and Brooks answered, denying the allegations of the complaint, alleging that Brooks had no claim to the money or automobile in question, and that Moore and Nipp, as owners of both the cash and automobile seized by the law officers, had conveyed same to Roy O. Parker and W. S. Moore, pursuant to written bill of sale dated July 27, 1967, which was attached as an exhibit to the answer. Roy O. Parker and W. S. Moore (intervenors), who had been attorneys for Moore, Nipp and Brooks in the criminal prosecution, sought to intervene and to file a crossclaim to approximately $185 in coins, $12,625 in currency and the Pontiac automobile then in the possession of the United States.

The United States answered, stating that the cash funds in question had been seized by law officers at the time of the arrest of Moore and Nipp and were taken from the Pontiac automobile in which they had just been riding and also from their persons; that all of the funds so taken had been introduced in evidence on the prosecution of Moore, Nipp and Brooks in connection with the two bank burglaries. The United States also set up that Moore, Nipp and Brooks, who had been convicted on September 29, 1967, on criminal charges, had appealed their convictions and moved the court to stay all proceedings until their appeal was decided, which was done. The government then interpleaded the various monies and automobile in question as they (excepting the automobile) were still in the custody of the court as government exhibits introduced at the criminal trial. Thereafter, intervenors were allowed to amend their cross-claim to assert that the assignment to them of defendants' (Moore and Nipp) interest in the money and automobile was actually made on September 27, 1967, which was during the course of the criminal prosecution, rather than on July 27, 1967, as first stated, and the consideration was for legal services rendered in connection with the trial then in progress.²

On September 22, 1969, the Court of Appeals for the Fifth Circuit affirmed the convictions of Moore and Nipp for burglarizing Peoples Bank & Trust Company of Tupelo, Shannon Branch, as set forth in Count II of the indictment, and also for conspiracy to commit burglary against federally insured banks, including Holmes County Bank & Trust Company, West Branch, as set forth in Count I of the indictment. The conviction of Brooks, who was indicted only on the conspiracy charge, as set forth in Count I of the indictment, was reversed and he was discharged. Brooks v. United States of America, 416 F.2d 1044 (5 Cir. 1969).

Plaintiff has now moved for summary judgment in its favor upon supporting affidavits and offering the transcript of evidence on the criminal trial. Intervenors resist said motion by affidavits. The matter is now before the court for decision upon summary judgment.

Summary judgment may be granted only when the pleadings, affidavits and other materials properly before the court show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.³ Affidavits must be sworn to, must be made on personal knowledge and must contain facts that would be admissible in evidence if testified to at trial.⁴

It is to be noted that defendants Moore and Nipp have failed to submit any affidavits or evidentiary material tending to show that the funds and automobile seized by the law officers had no connection with funds burglariously taken from the two banks. Affidavits submitted by intervenors, however, recite that Moore and Nipp have at all times maintained to intervenors that they were innocent of burglarizing the banks or of conspiring to commit burglary, and that the money and car in question were not the proceeds of criminal activity.⁵

Obviously statements of what was told to the intervenors by Moore and Nipp are hearsay and would be inadmissible. This does not at all comply with Rule 56(e), F.R.Civ.P.,⁶ requiring affidavits to "be made on personal knowledge". To this extent, the court may not consider intervenors' affidavits on motion for summary judgment. Maddox v. Aetna Cas. & Surety Co., 259 F.2d 51 (5 Cir. 1958); De Pinto v. Provident Security Life Ins. Co., 374 F.2d 50 (9 Cir. 1967). The remainder of intervenors' affidavits that the assignment was taken from Moore and Nipp in payment of an attorneys' fee, that their clients had no other funds with which to pay them for legal services, and that they are bona fide purchasers for value of Moore and Nipp's interest in the car and money, are statements based upon affiants' personal knowledge, and, even though conclusory, might be admissible at trial and may be considered on this motion for summary judgment.

Evidentiary materials offered by plaintiff in support of its motion consist of sworn affidavits of Harvey L. Campbell, Floyd White, Sheriff, James Bishop, FBI Agent, Ralph Gardner, search warrant, inventory of items seized pursuant to search warrant, certified copy of grand jury indictment and jury verdict of conviction and, by reference, the entire transcript of testimony in the criminal prosecution. The affidavits offered by plaintiff are in proper form and, having been made upon personal knowledge of affiants, would be admissible in evidence. It is error to contend that affidavits must be made on the personal knowledge only of a party to the litigation. The remainder of the documents, being the record of testimony or a part of the proceedings in the prior criminal prosecution are not testimonial in nature and do not qualify as affidavits. Nevertheless, this court may take judicial notice of those proceedings, inasmuch as the prior criminal case in this same court involved substantially the same parties or their privies as in the present case and the issues in both cases are so closely intertwined and related. Under these circumstances, it is proper, in accordance with well-established federal practice, for a federal court to take judicial notice of its own record in a prior criminal case.⁷ The application of this rule is particularly appropriate in the case sub judice because intervenors are the same attorneys who represented Moore and Nipp in the criminal prosecution and had full opportunity for cross-examining any person who testified adversely to defendants' interests. Even though a contrary state rule might preclude application of judicial notice,⁸ this court will follow the federal rule which is in favor of admissibility of evidence.⁹ That conclusion is especially fitting since the present suit, ancillary to the prior criminal action, has "direct relation to property or assets actually or constructively drawn into the court's possession or control" by the former action, Fulton National Bank v. Hozier, 267 U.S. 276, 278, 280, 45 S.Ct. 261, 69 L.Ed. 609 (1929), and ancillary jurisdiction here exists, irrespective of the citizenship of the parties, to determine all questions affecting the title to the impounded property.¹⁰

Having ascertained what evidence is before the court, we shall now determine whether the affidavits raise a genuine issue as to any material fact.

Plaintiff argues that it is entitled to summary judgment because the verdicts of guilty in the prior criminal cases are conclusive as to the ownership of the money and the automobile in question. Intervenors assert in reponse that they took an assignment of defendants' interest in both money and car in good faith and without notice of any defect in defendants' title, and that since the assignment took place before the conviction, a good title passed to intervenors from defendants, and plaintiff cannot now attack intervenors' title to either the money or the car.

While it is true that an ackowledged thief can pass to a bona fide purchaser without notice good title to cash or negotiable instruments,¹¹ and probably even a good title to an automobile lawfully purchased with stolen money,¹² intervenors here may not be considered bona fide purchasers without...