Begnaud v. White

• Decision Date: 25 October 1948
• Docket Number: No. 10554.,10554.
• Citation: 170 F.2d 323
• Parties: BEGNAUD et al. v. WHITE.
• Court: U.S. Court of Appeals — Sixth Circuit

170 F.2d 323 (1948)

BEGNAUD et al. v. WHITE.

No. 10554.

United States Court of Appeals Sixth Circuit.

October 25, 1948.

John D. Martin, Jr., of Memphis, Tenn. (Bertrand W. Cohn and John D. Martin, Jr., both of Memphis, Tenn., on the brief), for appellants.

Benj. Goodman, Jr., of Memphis, Tenn. (Benj. Goodman, Jr. and Walter P. Armstrong, both of Memphis, Tenn., on the brief), for appellee.

Before HICKS, Chief Judge, and McALLISTER and MILLER, Circuit Judges.

MILLER, Circuit Judge.

Appellants, who brought this action to recover on a note executed by the appellee, appeal from a judgment sustaining appellee's motion for summary judgment and dismissing the action on its merits.

The Complaint states that on November 1, 1930 the appellee, in consideration of borrowed money, executed and delivered to Canal Bank and Trust Company his promissory note in the principal sum of $110,000 due 75 days after date; that the appellee paid upon the principal amount of the note the sum of $50,779.22, leaving a principal balance due and unpaid in the amount of $59,220.78; that the appellee repeatedly acknowledged said indebtedness and made repeated unconditional express or implied promises to pay the same; that he expressly waived the statute of limitations applicable to said note, but is now asserting the defense of said statute of limitations; but that by his conduct and acts he is equitably estopped from pleading or relying upon the statute.

The following facts are shown by exhibits filed with the complaint, stipulation between the parties, and affidavits both in support of and in opposition to the motion for summary judgment. The maturity of the note was January 15, 1931. The 6-year Tennessee Statute of Limitations, Code § 8600, was applicable to an action to reduce the note to judgment. On January 12, 1937, appellee White, a resident of Tennessee, wrote to the bank in New Orleans, Louisiana, then in liquidation, referring to the note and its unpaid balance and stating as follows:

"In consideration of your not instituting suit against me on said note at this time, I hereby agree that I will not plead, nor will I rely on, any statute of limitations in any suit instituted before January 15, 1939, to recover on the note; and for said consideration I hereby expressly waive the statute of limitations on said note.

"I appoint Harry G. Thompson as my Attorney in Fact to endorse on said note the following:

"`For a valuable consideration I hereby waive the statute of limitations on the within note if suit be instituted before January 15, 1939.'"

The note bears the following endorsement on its back:

"Jany. 15, 1937.

For a valuable consideration I hereby waive the statute of limitations on the within note if suit be instituted before January 15, 1939.

WILLIAM WHITE By H. G. THOMPSON (Signed) HARRY G. THOMPSON Attorney-in-Fact."

Thereafter White wrote successive letters to the bank, each in practically identical terms to the one above referred to, with the exception of a different and later date, dated January 3, 1939, April 4, 1939, June 1, 1939, September 7, 1939, November 8, 1939, January 5, 1940, March 7, 1940, September 9, 1940, December 9, 1940, February 4, 1942, January 25, 1943, January 26, 1944, January 10, 1945 and January 19, 1946. Following each letter an endorsement in the same terms as the one above referred to with the exception of a new date, was placed upon the back of the note. In the last letter of January 19, 1946, the new date referred to was February 15, 1947, and the endorsement on the back of the note dated January 23, 1946 read — "For a valuable consideration, I hereby waive the statute of limitations on the within note if suit be instituted before February 15, 1947."

On or about December 3, 1946, the President of the Union Planters National Bank and Trust Company at Memphis, Tennessee, at the instance of White, requested the bank to give considerate treatment of White in assisting him to work out a settlement of his indebtedness for a lesser amount. H. G. Thompson Special Agent of the State Bank Commissioner in the liquidation of the bank replied that a pending offer of $1,000 plus $500 for attorneys' fees was purely nominal and could not be considered. Shortly prior to January 6, 1947, White's attorney in Memphis went to New Orleans and interviewed Thompson relative to a settlement of the note. Following his return to Memphis, he wrote Thompson under date of January 6, 1947, that he had discussed the matter fully with White who was anxious to make every effort to effect a settlement of the claim on a basis satisfactory to Thompson, and that he would appreciate it if Thompson and his associates would give the matter further careful consideration and fix a suggested basis of settlement if possible at a figure of something less than $10,000, and to allow a short period in which White would have an opportunity to endeavor to raise the necessary funds to effect settlement. Under date of January 11, 1947, Thompson answered this letter stating that he would discuss the matter with his associates some time during the next week and let him hear from him. Under date of February 15, 1947, Thompson wrote White's attorney stating that he had discussed his letter with his associates and they had concluded that if White would raise the necessary funds to offer $10,000 cash to compromise the settlement in full they would recommend the acceptance, subject to the approval of the State Banking Department, and the Court, and the furnishing of a satisfactory financial statement by White. White's attorney was out of the city when this letter arrived and his partner answered the letter under date of February 17, 1947, stating that since suit had not been filed against White by the bank prior to February 15, 1947, White had the right to interpose the statute of limitations against any further demand by the bank and would do so, and, accordingly was not interested in the making of any offer of settlement. The present action to reduce the note to judgment followed. White thereafter, and before filing any answer to the complaint, filed his motion for summary judgment dismissing the action, in that it affirmatively appeared from the complaint that the right of action did not accrue within six years next before the commencement of the action, and in that White was not equitably estopped to rely upon the statute of limitations. The motion was supported by affidavits. Appellants also filed a motion for summary judgment with affidavit of Thompson both in support of the motion and in opposition to appellee's motion, contending that under the facts shown by the affidavits and appellee's admission that there was no genuine issue of material fact, the right of action was not barred by the statute and the appellee was in addition equitably estopped to rely on it. The District Judge overruled appellants' motion and upheld both of appellee's contentions, dismissing the action.

Under Rule 56(a), Federal Rules of Civil Procedure, 28 U.S.C.A., before the present amendment which was not then effective, appellants' motion was premature since answer had not been filed, and was...