Central Bank & Trust Co. v. Cohn

• Decision Date: 17 July 1924
• Citation: 264 S.W. 641,150 Tenn. 375
• Parties: CENTRAL BANK & TRUST CO. v. COHN ET AL.
• Court: Tennessee Supreme Court

264 S.W. 641

150 Tenn. 375

CENTRAL BANK & TRUST CO. v. COHN ET AL.

Supreme Court of Tennessee.

July 17, 1924

Appeal from Chancery Court, Davidson County; John K. Aust Chancellor.

Bill by the Central Bank & Trust Company against Sam Cohn and others. From the decree rendered, all parties appeal. Affirmed as modified.

Bass & Sims and John B. Keeble, all of Nashville, for plaintiff.

Nathan Cohn, Jordan Stokes, and W. E. Norvell, Jr., all of Nashville, for defendants.

MALONE Special Judge.

The Central Bank & Trust Company filed the bill in this case against Sam Cohn, B. F. Wilkerson, Jacob May, Louis Camp sheriff of Davidson county, and T. G. McCampbell, one of his deputies.

One theory of the bill was that the defendant McCampbell, deputy sheriff, at the instigation of his codefendants Sam Cohn and Jacob May, had wrongfully levied an execution on certain moneys, the property of said bank.

The defendant Cohn and the complainant, Central Bank & Trust Company, and the defendant Wilkerson had been held liable for the conversion of a certain trust fund in a former litigation. The present litigation arises from the attempts of these parties to escape primary liability under said former decree.

The complainant, Central Bank & Trust Company, insisted that under the facts of the previous case Sam Cohn was primarily liable, and was endeavoring to have the execution creditor place the execution in the hands of an officer who would levy the execution on Cohn's property.

The defendant Cohn, learning of this, conceived the idea of having a friend purchase the judgment, who would have execution levied on the property of the bank. The defendant May undertook to assist him in this matter, and purchased the judgment at the instigation of Cohn and his counsel.

The complainant in its bill contends:

(a) That under the facts developed in the former case the defendants Cohn and Wilkerson were primarily liable, and that, since complainant's property was taken to discharge an obligation primarily resting upon said Cohn and Wilkerson, it was entitled to a decree against them.

(b) That, since the judgment was purchased by the defendant Jacob May on money raised on the assurance and guarantee of the defendant Sam Cohn that he would see the bank lending the money paid, such payment was in fact made by Cohn, one of the judgment debtors, and that the judgment was thereby satisfied in full; that the clerk of the Supreme Court had no power to issue execution on this judgment so satisfied; that the levy of the execution by the defendant McCampbell on the property of complainant was wrongful; and that the officer levying the execution, together with the defendants Cohn and May, who conspired to this end, are justly indebted to complainant for the amount of cash seized by the officer, to wit, the sum of $10,374.39, together with interest and costs.

The answers of the respective defendants controvert the material allegations of the bill.

The chancellor held that the judgment was not in fact satisfied, and dismissed complainant's bill as to the defendants Jacob May, Louis Camp, sheriff, and T. G. McCampbell, deputy sheriff. He was, however, of opinion that the defendant Sam Cohn was primarily liable for the payment of said judgment under the facts developed in the preceding case, and directed that execution be first satisfied out of his property, and secondarily out of the property of the defendant B. F. Wilkerson.

From this decree all parties have appealed and assigned errors.

First. Was the judgment paid and satisfied?

To answer this question we must first determine the facts, and then the legal conclusions flowing therefrom.

1. As to the facts:

The determinative issue of fact discussed in the briefs and arguments of counsel is whether the defendant Cohn undertook to guarantee payment of the loan made to Jacob May by the First Savings Bank & Trust Company. We shall therefore review the testimony on this point.

(a) Mr. E. J. Hamilton, a member of the Nashville bar, was one of the counsel for complainants in the preceding case, in which the judgment was recovered against Cohn, Wilkerson, and the bank. He states that on June 3, 1921, he had a conversation with Mr. Frank P. Bond, also a member of the Nashville bar, who was then acting for the defendant Sam Cohn. Mr. Hamilton, with reference to this conversation, says:

"Q. Did he say anything about whether or not the bank with which Mr. Cohn did business had agreed or offered to advance the necessary funds with which to procure the assignment from the complainants, your clients?

A. I don't think he said that. He said the bank expressed a willingness to make a loan to him for that purpose, if Mr. Cohn would secure it.

Q. You mean make a loan to Col. Bond to have the judgment assigned to him if Mr. Cohn would secure it?

A. That is right.

Q. Did Col. Bond say whether or not he was going to have the judgment assigned to him, and if not, why not?

A. I cannot recall if he said he would not do that, but he said he did not think that would be the proper way to do it, some expression just about like that."

Mr. Bond, whose deposition was taken thereafter in the case, was not questioned with reference to this testimony of Mr. Hamilton's, and says nothing on this point.

(b) Mr. C. H. Litterer, cashier of the First Savings Bank & Trust Company of Nashville, from which the money was procured to pay the judgment, says that Sam Cohn telephoned him about the matter on June 3, 1921. This was a bank holiday, and Mr. Litterer was at his residence. He testifies that Cohn first asked him to buy the judgment, but that he refused to do so, and that possibly an hour afterwards he had another conversation, on this occasion with Mr. Bond. He testifies:

"Q. Well, what was the substance of that conversation?

A. My recollection is that Col. Bond communicated with me the next time, and asked me if I would be willing to lend the money to some one else?

Q. What did you tell him?

A. I told him I would, provided Sam Cohn guaranteed it.

Q. Did you have any other conversation with him that day?

A. Later they called me up again and had Mr. May there, and asked me to tell Mr. May over the phone that I would let him have the money.

Q. Now you say they called you--who was present, as you understand?

A. Well, I don't remember now whether it was Sam Cohn or Col. Bond talked.

Q. They did the talking?

A. Yes.

Q. Did you understand that both of them were at the other end of the line?

A. I thought so.

Q. Well, did you agree to let Mr. May have the money?

A. I did.

Q. State whether or not there was any understanding as to whether or not Mr. Cohn would see that the money was paid, or do you know? (Objected to.)

A. Yes; he guaranteed me that he would stand between us and any trouble in the matter.

Q. Mr. Cohn did?

A. Yes, sir.

Q. Then did you agree to let Mr. May have the money?

A. Yes, sir."

On cross-examination Mr. Litterer testifies that Sam Cohn did not sign the note either as indorser or surety, nor did he execute any separate paper guaranteeing payment of the note; that he knew the object in borrowing the money was to buy the judgment.

He further testifies:

"Q. Just state, please, what Mr. Cohn did say to you?

A. Well, he just merely stated that he would guarantee me against any loss, if I let Jacob May have this money to buy this judgment with.

Q. You took no written obligation?

A. No, sir.

Q. You knew at the time, did you not, that an obligation to stand as security for another was of no legal effect, did you not, just a verbal agreement?

A. Yes, yes, I knew that.

Q. Why, then, did you not have Mr. Cohn to give you a written paper of some kind showing that he was going to see the note paid? Was it not because you knew the money was to buy the judgment, and Cohn was a defendant in the judgment, and that would be collected that way?

A. No; I knew that if Sam Cohn said he would stand behind it that he would, regardless of anything in writing."

On re-examination he testifies:

"Q. Would you have loaned this money to Mr. May, on his own application alone, if Mr. Cohn had not requested it and guaranteed its payment?

A. No; because we were not under any obligations to lend Mr. May any money, not doing business with him."

Mr. Litterer states that the note executed by Mr. May was a demand note, dated June 4, 1921, and that on the same day a cashier's check in the sum of $10,000 was issued, payable to Mr. May's order.

(c) Thereafter Mr. Frank P. Bond's deposition was taken on behalf of defendant Cohn. After stating that he conferred with other counsel of the Nashville bar as to the propriety of having some one purchase the judgment who would be friendly to Mr. Cohn, he says:

"A concurrent view from these gentlemen gave me the courage of my own conviction, and I went to Mr. Cohn, and I said to him, 'You must get some friend of yours to buy this judgment.' I explained to him that his friend who bought the judgment would be entirely within the limitations of the law, if he did it simply as a matter of accommodation, but that he must use his money entirely, and not one cent of Mr. Cohn's money must go into the purchase. Mr. Cohn proposed to interest Mr. Roger Caldwell in securing his assistance as an act of friendship. I was advised he was out of the city. Mr. Litterer was then approached, and it resulted in my getting in touch with Mr. Louis Leftwich, his attorney, who advised Mr. Litterer it was undesirable, as there might possibly be litigation and result in unpleasantness between the banks. Mr. Cohn then stated to me that Jacob May, who was worth half a million dollars, was his friend, and he was quite sure he would be glad to

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