Black v. Boyd

• Decision Date: 23 September 1957
• Docket Number: 13094.,No. 13079,13079
• Citation: 248 F.2d 156
• Parties: Charles G. BLACK, Trustee in Bankruptcy, for the Butler-Foster Milling Company, Petitioner, v. The Honorable Marion S. BOYD, United States District Judge for the Western District of Tennessee, Respondent. The FIRST NATIONAL BANK OF MEMPHIS, Petitioner, v. The Honorable Marion S. BOYD, United States District Judge for the Western District of Tennessee, Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

248 F.2d 156 (1957)

Charles G. BLACK, Trustee in Bankruptcy, for the Butler-Foster Milling Company, Petitioner, v. The Honorable Marion S. BOYD, United States District Judge for the Western District of Tennessee, Respondent.

The FIRST NATIONAL BANK OF MEMPHIS, Petitioner, v. The Honorable Marion S. BOYD, United States District Judge for the Western District of Tennessee, Respondent.

Nos. 13079, 13094.

United States Court of Appeals Sixth Circuit.

September 23, 1957.

John R. Gilliland, Memphis, Tenn., Walter P. Armstrong, Jr. and J. S. Allen, Memphis, Tenn. on the brief, for Charles G. Black.

Vincent Beal, A. Longstreet Heiskell and Harry Kemker, Memphis, Tenn., for First Nat. Bank of Memphis.

Edward P. Russell, Memphis, Tenn., for Hon. Marion S. Boyd.

Before ALLEN, MILLER and STEWART, Circuit Judges.

SHACKELFORD MILLER, Jr., Circuit Judge.

Charles G. Black, Trustee in Bankruptcy for the Butler-Foster Milling Company, hereinafter referred to as the Trustee, and The First National Bank of Memphis, hereinafter referred to as the Bank, filed in this Court their separate applications for leave to file a petition for Writ of Mandamus to the Hon. Marion S. Boyd, Judge of the United States District Court for the Western District of Tennessee, directing him to set aside and vacate in certain respects an order entered by him on October 22, 1956, in a cause filed in that court by Continental Grain Company, hereinafter called Continental, plaintiff, against the Trustee and the Bank as defendants. On January 17, 1957, an order was entered by this court in each application directing that the District Judge show cause why a Writ of Mandamus should not issue directing him to vacate and set aside the said order. The District Judge has filed his response in each case and the matter is now before us on the legal issues presented by the petition and response in each case. Since the two proceedings involve the same factual situation and present the same questions of law, they will be considered together in this single opinion.

The facts out of which the controversy arises are as follows. On March 1, 1955, and prior thereto, the Butler-Foster Milling Company, hereinafter referred to as the Milling Company, was indebted to the Bank in the sum of $2,699,491.00 which indebtedness was purportedly secured by warehouse receipts for large quantities of soybeans issued by Alabama Grain Elevator Company of Mobile, Alabama. On February 28, 1955, the Milling Company sold to Continental, 1,299,839 bushels of soybeans represented by said warehouse receipts. On March 1, 1955, Continental deposited in its account at the Bank $3,300,000.00 and its agent in Memphis delivered to the Milling Company its check drawn on the Bank in the sum of $3,164,458.05. The Milling Company deposited the check in its account at the Bank and immediately thereafter gave the Bank its check for the full amount of its indebtedness to the Bank, namely, $2,699,491.00. The warehouse receipts were surrendered by the Bank and delivered to Continental's agent. It later developed that the warehouse receipts were invalid and that the Alabama Grain Elevator Company did not have in its possession the soybeans called for by the receipts. The Milling Company was adjudicated bankrupt on April 27, 1955.

Continental thereafter filed in the District Court for the Western District of Tennessee its action against the Trustee and the Bank, alleging that the Milling Company obtained the purchase price of $2,699,491.00 by fraud and under such circumstances as made it a constructive trustee. The complaint alleged that the Bank either had actual knowledge of the fraud, or had notice of such facts, which if pursued in a reasonable intelligent manner would have led to such knowledge, when its indebtedness was paid, and that the facts stated constituted the Bank a constructive trustee of the $2,699,491.00 paid to it by the bankrupt. It sought judgment against the Bank for "said sum of money."

The Trustee filed an answer and counterclaim which alleged that the Bank received the money in good faith and was not a constructive trustee as claimed by Continental. The Trustee also filed a cross-claim against the Bank in which he asserted that the payment to the Bank having been made within four months of adjudication constituted a recoverable preference for which he sought a judgment against the Bank. The Bank filed answers to the complaint and to the cross-claim denying the material allegations of each.

The Trustee seasonably demanded a jury trial of the issues raised in his answer and counterclaim to the complaint and also of the issues raised in his cross-suit against the Bank. The Bank in its answer to the complaint demanded a jury trial of the issues raised by the complaint and its answer thereto.

Continental filed motions (1) to strike the Bank's demand for a jury trial, (2) to strike the Trustee's demand for a jury trial of the issues presented by the complaint and the Trustee's answer and counterclaim, (3) for a separate trial of its suit against the Bank and the Trustee and to sever its suit for trial purposes from the cross-claim of the Trustee against the Bank, and (4) that the Trustee's cross-claim against the Bank be held in abeyance and postponed until after the trial of the Continental suit against the Bank and the Trustee.

On October 22, 1956, the District Judge entered the order which is the basis for the controversy herein, which sustained Continental's motion to strike the Trustee's demand for a jury trial of the issues between Continental and the Trustee, raised by the complaint and the Trustee's answer and counterclaim, and Continental's motion to strike the Bank's demand for a jury trial of the issues raised by the complaint and the Bank's answer thereto. He also ordered the Trustee's demand for a jury trial of the issues between him and the Bank raised by the Trustee's cross-claim against the Bank and the Bank's answer thereto stricken, although no party had moved to strike this demand for a jury trial. He overruled the motions for a severance and a separate trial and ordered that all issues in the case as between all parties thereto be tried before the Court without a jury.

The present applications for a Writ of Mandamus set out the foregoing pleadings, motions and order and state that Continental's complaint, the Trustee's answer and counterclaim thereto, the Bank's answer thereto and the Trustee's cross-claim against the Bank raised certain legal issues upon which the parties were entitled to a trial by jury as a matter of right upon demand seasonably made, that the order of the District Judge denying a jury trial of any of these issues was in contravention of their rights provided by the Seventh Amendment of the Constitution of the United States, that there is no statutory or other method of appeal available to the petitioners to obtain for them a trial by jury to which they are entitled, and that there is no adequate remedy other than the Writ of Mandamus which is necessary for the protection of the appellate jurisdiction and in aid thereof. Petitioners ask that the writ issue directing the District Judge to set aside and vacate the order denying them the right of trial by jury and to order the trial of all issues embraced in the cause by a jury.

The order denying jury trial is interlocutory and not appealable, although it is subject to appellate review later after a final judgment is entered in the cause. Sections 1291, 1292, Title 28 U.S.Code; City of Morgantown, W. Va. v. Royal Insurance Co., 337 U.S. 254, 69 S.Ct. 1067, 93 L.Ed. 1347. Whether petitioners can obtain a present review of the order by a mandamus proceeding against the District Judge, notwithstanding the fact that the order is not an appealable one, is the initial question presented.

Petitioners claim the right to the mandamus herein applied for under Section 1651(a), Title 28 U.S.Code, usually referred to as the "All Writs" statute. It provides: "The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law."

The following principles have become well established with respect to the construction and application of that statute. Since the jurisdiction of the Court of Appeals is appellate, its authority to issue writs of mandamus is restricted to those cases in which the writ is in aid of that jurisdiction. The power to issue them is discretionary and is sparingly exercised. The traditional use of the writ in aid of appellate jurisdiction has been to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so. Where the District Court has jurisdiction in the case before it and there has been no refusal on its part to adjudicate the issues properly presented to it, ordinarily mandamus may not be resorted to to review a ruling of the court where a statutory method of appeal has been prescribed. Federal appellate procedure is based upon the finality of the judgment or order being reviewed, which means that appellate review of most interlocutory rulings must await final determination of the case in the court below. Sections 1291, 1292, Title 28 U.S.Code; Cobbledick v. United States, 309 U.S. 323, 324-325, 60 S.Ct. 540, 84 L.Ed. 783. Except in extreme cases, mandamus will not be used to review an interlocutory order, the effect of which would be to circumvent the well-settled rule against piecemeal appeals. The fact that this procedure may require the aggrieved party to undergo a lengthy, costly and inconvenient trial, which might be avoided by a review of the interlocutory order complained of, is not sufficient to overcome the Congressional policy expressed by statute that only final judgments should be reviewable and in the way prescribed by the statute. Roche v....