Black v. Denver United States National Bank

• Decision Date: 21 June 1966
• Docket Number: No. 17992.,17992.
• Citation: 362 F.2d 38
• Parties: Roe R. BLACK, Avis C. Black, Roe C. Black, Black Ranches, Inc., a Corporation, Debtor, and Thomas Hart Fisher, Appellants, v. DENVER UNITED STATES NATIONAL BANK, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

362 F.2d 38 (1966)

Roe R. BLACK, Avis C. Black, Roe C. Black, Black Ranches, Inc., a Corporation, Debtor, and Thomas Hart Fisher, Appellants, v. DENVER UNITED STATES NATIONAL BANK, Appellee.

No. 17992.

United States Court of Appeals Eighth Circuit.

May 12, 1966.

Motions to Amend and Petition for Rehearing Denied June 21, 1966.

Thomas Hart Fisher, Chicago, Ill., made argument for Roe R. Black, and others and E. H. Powell, Aurora, Neb., filed brief.

Thomas S. Nichols, of Davis, Graham & Stubbs, Denver, Colo., made argument for appellee Denver U. S. National Bank and filed brief with Richard M. Davis, of Davis, Graham & Stubbs, Denver, Colo., and Charles E. Wright, of Cline, Williams, Wright, Johnson, Oldfather & Thompson, Lincoln, Neb.

Before MATTHES and GIBSON, Circuit Judges, and HUNTER, District Judge.

MATTHES, Circuit Judge.

The district court allowed claim No. 32 as a general and unsecured claim in the amount of $7,488.90, representing unpaid interest due Denver United States National Bank, successor to The Denver National Bank (hereinafter sometimes referred to as "Denver Bank"), on the note executed by Roe R. Black and Black Ranches, Inc. on October 19, 1951, in the face amount of $192,222.68.¹ It stands without contradiction that the amount allowed has not been paid to Denver Bank. Appellants, nevertheless, contend that the payment by "Penny Poke Ranch, Inc., Marlon Brando and Marlon Brando, Jr."² of their note to Denver Bank was "a full accord and satisfaction of all moneys due and owing" under Black's note to Denver Bank.

Many of the operative facts have been discussed in our consideration of Marlon Brando, Jr.'s claim No. 21 in appeal No. 17.991, Black et al. v. Brando et al., 8 Cir., 362 F.2d 19 (opinion filed contemporaneously). More particularly, we reviewed: (a) the history of the Black note to Denver Bank for $192,222.68; (b) the execution of the guaranty agreement between Denver Bank and the Brando group; (c) Denver Bank's suit on the agreement; (d) the settlement of the suit by the Brando group giving their note to Denver Bank in the principal amount of $14,372.58; (e) the liquidation of the Brando group note by payment of the full amount, including interest, due thereon.

The circumstances attending the payment to Denver Bank of the Brando note are important. The face amount of $14,372.58 and accrued interest of $315.60 (total, $14,688.18) was paid in two installments: on March 1, 1956, in the amount of $7,391.29, and on May 3, 1956, in the amount of $7,296.89. Denver Bank's ledger sheet for "Borrower Black Ranches, Inc." shows that the first installment was applied toward payment of the unpaid principal on the Black note and that, after such payment, there remained a balance due on the principal of $1,162.10. The second installment was applied toward payment of the balance of the principal of the Black note ($1,162.10) and $6,134.71 of the interest due thereon. There appears upon the ledger sheet, on the same line of the entry showing the last payment, the words "Settlement in full". The words "Total Liability" appear in the last column of the printed form of the ledger sheet. Under these words and on the line reflecting the entry of the last payment, there appears ".00".

The entries of September 22, 1955 on the Black Ranches ledger sheet should also be noticed. The first entry is "Charged to P and L on This Day" the amount of $8,553.39, this being the balance of the principal due at that time on the Black note. Under the "Total Liability" column appears ".00". The second September 22, 1955 entry reflects that the same amount was debited to Black Ranches' account so that after the second entry the ledger sheet reflected that there still remained a balance due on the principal of $8,553.39.

It also stands undisputed that upon payment by Brandos of the balance due on the principal of the Black note, Denver Bank placed this stamp on the face of the note:

May 3, 1956 D N B Discount

and delivered the note to Marlon Brando. As shown in our opinion in No. 17,991, this note formed the basis of Brando, Jr.'s claim No. 21.

Appellants do not suggest the existence of any direct evidence to prove their theory. They rely, however, upon the circumstances and argue, in effect, that the only logical inference that may be drawn from the circumstantial evidence is that the parties intended that the payment by the Brando group would constitute full satisfaction of debtor's obligation to Denver Bank.

Appellants mistakenly assert that Judge Delehant "totally ignored" the accord and satisfaction issue. The Judge came to grips with this question in his memorandum opinion (pages 171 through 173) of the printed record in this language:

"Similarly, upon factual bases, the court has announced its finding of the want of support for the objections to the allowance, in whole or in part, of the claim".

The Judge then summarized paragraphs 1 and 2 of the objections in which it was alleged that Denver Bank knew that the Black promissory note had been executed as an accommodation for Marlon Brando, Jr. and others in connection with the financing and purchase of the cattle owned by Marlon Brando, Jr. Paragraph 3 of the objections was disposed of by Judge Delehant as follows:

"The payment and satisfaction in full of the obligation asserted in Proof of Claim No. 32. (In this connection, the court has had constantly in view a position of the objectors, not strictly pleaded, but advanced in their briefs, that the stamped impression of the word, DISCOUNT, supra, upon the note on the payment of the balance of its principal sum, is to be interpreted in such wise as to amount to a release or abandonment of any actual deficiency in the payment of interest. That position is incorrect, honestly enough, perhaps, but incorrect, neverless. The use of the word DISCOUNT was and is a device to identify the department of the bank through which that transaction was cleared. It had and has no connotation of forgiveness. The evidence conclusively so shows, even without resort to the judicial awareness that such indulgence is not a common practice in the banking fraternity.)"

The Judge noted that, in paragraph 5, the objectors asserted that, upon the payment of the Brando note, the Denver Bank satisfied all obligations of Black Ranches, Inc.

In this court, appellants rely upon Restatement of Contracts, § 421, and cases which stand for the proposition that a payment by a third person can result in an accord and satisfaction.

Section 421 of Restatement provides, in pertinent part:

"A payment or other performance by a third person, accepted by a creditor as full or partial satisfaction of his claim, discharges the debtor\'s duty in accordance with the terms on which the third person offered it." (Emphasis supplied).

Tarascio v. Mancuso, 141 Neb. 225, 3 N.W.2d 400 (1942) and Murphy v. Omaha Loan & Building Ass'n, 141 Neb. 230, 3 N.W.2d 403 (1942) cite with approval the foregoing section of Restatement. Cf. also, Grouf v. State National Bank of St. Louis, 76 F.2d 726 (8 Cir. 1935); Moers v. Moers, 229 N.Y. 294, 128 N.E. 202, 14 A.L.R. 225 (1920). The key element of accord and satisfaction is the intention of the parties, which as a rule presents a question of fact. But it becomes a question of law if the evidence, directly or through reasonable inferences, creates no conflict as to intention. See, Pitts v. National Ind. Fisheries Co., 71 Colo. 316, 206 P. 571, 34 A.L.R. 1033 (1922); Pring v. Udall, 95 Colo. 23, 31 P.2d 1113 (1934); Swanson v. United-Greenfield Corporation, 239 F.Supp. 299, 305 (D.Ct. Conn.1965).

We are not inclined to believe that the evidence establishes, as a matter of law, that the parties intended that the payment to Denver Bank of the Brando note was to operate as full satisfaction of the Black note. To be sure, the records of the bank and its failure to retain the Black note in its possession are circumstances which lend vitality to appellants position. However, there are additional facts which the trial court was entitled to, and did,...