Carpenter v. Durell, 7414.

• Decision Date: 04 June 1937
• Docket Number: No. 7414.,7414.
• Citation: 90 F.2d 57
• Parties: CARPENTER v. DURELL.
• Court: U.S. Court of Appeals — Sixth Circuit

90 F.2d 57 (1937)

CARPENTER v. DURELL.

No. 7414.

Circuit Court of Appeals, Sixth Circuit.

April 7, 1937.

On Rehearing June 4, 1937.

J. A. Fowler, of Knoxville, Tenn. (H. G. Fowler and S. F. Fowler, both of Knoxville, Tenn., on the brief), for appellant.

Frank Montgomery, of Knoxville, Tenn. (W. J. Donaldson, of Knoxville, Tenn., on the brief), for appellee.

Before MOORMAN, HICKS, and SIMONS, Circuit Judges.

SIMONS, Circuit Judge.

This case was here before under the style, Pearson v. Durell, 77 F.(2d) 465, and is a suit at law brought by the receiver of a closed national bank under section 91, of 12 U.S.C.A., to recover from a depositor, who was also a director, an amount paid on his check the day before the bank was placed in the hands of the Comptroller of the Currency for liquidation. The amended style of the proceeding results from the withdrawal by the Comptroller of the original receiver and his substitution of the present receiver.

The first trial was to the court without a jury. A judgment therein for the defendant was reversed, and the cause remanded for new trial. At the second trial the issues were submitted to a jury over the plaintiff's motion for peremptory instructions, and the jury's verdict was for the defendant. The plaintiff again appeals. The issues decided on the former appeal are again presented, together with a new defense not hitherto urged and sought to be incorporated in the case below by an amended pleading rejected by the trial judge.

The facts that gave rise to the controversy are fully recited in our former opinion, and there is no need for repetition. It is sufficient to say that the controversy there turned upon whether Durell's check had been paid by the bank after or in contemplation of the commission of an act of insolvency, whether it had been paid in the regular course of business without intent on the part of the bank to grant a preference, and whether Durell's purpose had been to obtain a preference. Upon these issues the trial judge had made findings of fact in favor of the defendant. We not only held that the evidence failed to sustain the findings, but that it clearly required contrary findings. Our decision upon these issues we deem to be the law of the case, calling for no further examination or decision on our part.

The doctrine of the law of the case has no application to questions of fact, but is limited to questions of law, and is always applied where the former decision relates to the sufficiency or insufficiency of the evidence. When the case comes up the second time and the evidence is substantially the same, a former decision is conclusive. 3 Am.Jur. §§ 997 to 1000, pp. 551, 553; Dodd v. Union Indemnity Co., 32 F.(2d) 512 (C.C.A.4); Priester v. Southern Ry. Co., 6 F.(2d) 878 (C.C.A.4); Thompson v. Maxwell Land-Grant & R. Co., 168 U.S. 451, 456, 18 S.Ct. 121, 42 L. Ed. 539; Illinois v. Illinois Central Railroad Co., 184 U.S. 77, 91-93, 22 S.Ct. 300, 46 L.Ed. 440; Messenger v. Anderson, 225 U.S. 436, 32 S.Ct. 739, 56 L.Ed. 1152; Kershaw Oil Mill et al. v. National Bank of Savannah, 209 F. 835 (C.C.A.4).

A determinating factor in the application of the doctrine is the substantial similarity of the evidence in the second case with that in the first. We have compared the two records with care. The evidence, it is true, is not identical. Some witnesses who were sworn at the first trial did not appear at the second, and others who gave evidence at the second trial were not sworn at the first. In the main, however, the case is the same with some difference in the quantum of proof on some points. The only distinction of importance urged upon us is that a bookkeeper for the bank who had sworn at the first trial that Durell's check had been referred to Ramsey, the president of the bank, before payment, did not give evidence at the second trial. Its importance is stressed because in our former opinion we indicated that whether Durell was or was not seeking a preference, Ramsey intended to give one, and it was inescapable that he knew the bank was insolvent. We do not think this difference in the evidence of importance. Ramsey's knowledge of the condition of the bank, and his efforts to secure help on the day the check was cashed is well established upon this record, and it is inconceivable that Ramsey did not know that a director's check for over $50,000, withdrawing his entire deposit, was being presented by the East Tennessee Bank. It was in respect mainly to the clearing house balance due the East Tennessee Bank that extraordinary efforts were made on the last day to avert catastrophe, including the request to the East Tennessee Bank to delay presentment, the offer to it of bonds, and finally the transfer to it of funds by wire from the Federal Reserve Bank in Atlanta. The balance of the clearing house account owing to the East Tennessee Bank was $108,000, almost half of which was represented by the check of a director. The inference drawn in our former opinion is as inescapable here as there. There is no substantial difference in the evidence on material issues between the two cases.

We are confronted, however, with a defense to the receiver's suit not available to the defendant on the former appeal, and upon it we are, of course, not foreclosed by our former decision. City of Seattle v. Puget Sound Power & Light Co., 15 F. (2d) 794 (C.C.A.9). The receiver for the bank had been asserting against its officers and directors, including Durell, liability for knowing violation of the Banking Act, sections 91 and 93 of 12 U.S.C. A., and for common-law negligence. Between the first and second trials these directors made a compromise settlement with the Comptroller for the sum of $26,000, to which Durell contributed $500. The terms of the compromise agreement provided that the amount paid by the directors should be in full settlement and discharge of their entire liability for any acts which "they, as directors may have committed, or for any neglect upon their part to perform any duties as directors imposed upon them by statute, by common law or otherwise." In accordance with the requirements of law, confirmation of the compromise agreement was sought in the court below, and a decree there entered by which it was adjudged that the receiver be authorized to accept the amount in compromise "in full release and discharge of all of their liability of every nature to petitioner by reason of acts done by them or alleged to have been done by them as members of the Board of Directors of said bank and by reason of their failure or alleged failure to perform any duties imposed upon them by law as...