Central Paper Co. v. Southwick, 5832.
| Decision Date | 08 March 1932 |
| Docket Number | No. 5832.,5832. |
| Citation | 56 F.2d 593 |
| Parties | CENTRAL PAPER CO. v. SOUTHWICK. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Arthur W. Penny, of Muskegon, Mich. (Wallace Foote, of Muskegon, Mich., on the brief), for appellant.
Jay H. Hoag, of Duluth, Minn. (Theo. Hollister, of Duluth, Minn., H. W. Bryant, of Grand Rapids, Mich., Lathers & Hoag, of Duluth, Minn., and Knappen, Uhl, Bryant & Snow, of Grand Rapids, Mich., on the brief), for respondent.
Before HICKS and HICKENLOOPER, Circuit Judges, and HAHN, District Judge.
For several years prior to October 22, 1927, appellant Central Paper Company (defendant below) had contracts with Fred W. Roedter, of Duluth, Minn., who agreed to furnish and deliver pulp wood to be used in the manufacture of paper by appellant. On that date appellant entered into a like contract with Roedter for the season 1927-1928. To meet appellant's requirements, Roedter, on December 6, 1927, entered into a contract with De Witt Southwick, of Duluth, Minn., appellee (plaintiff below). This contract provided for the delivery of pulp wood at various stations and sidings of railway companies. Southwick was not a producer, but he in turn entered into contracts with John O. Jacobson, of Chisholm, Minn., Benjamin H. Sherman, of Angora, Minn., and others. The latter and others were producers, and also purchased pulp wood from their neighbors.
The wood was cut during the fall and winter seasons and hauled to the main road sides and railway stations during the winter and spring seasons. To enable the producers to pay their helpers, their wood was scaled and advancements made to them to the extent of 50 (or 60) per cent. of its value. To enable Roedter to make these advancements, appellant's contract provided for advancements to him "during the winter of 1927 and 1928, providing reports by his representative or representatives warrant such advances." The contract also recited that $26,000 of advancements had already been made. The evidence establishes that this amount represented arrearages of previous years.
In the spring of 1928 complaints came to appellant that Roedter was not turning over to producers all of the advancements made to him under his contract. Thereupon on April 6, 1928, with the consent of Roedter, appellant determined to make such advancements direct to producers through its own representative, A. H. Shaughnessy, of Fort William, Ontario. If all of the advancements did not reach the producers, or if they were not paid in full, it was likely that the wood would be incumbered with liens for wages and the final amounts due the producers, and Roedter would be unable to complete deliveries to appellant under his contract.
Thereupon Shaughnessy, Johnson, Riley, and Nadeau, all agents or officials of appellant, appeared upon the scene at various times, although Shaughnessy appears to have been there almost continuously until he became ill late in the fall of 1928, when he was superseded by Johnson.
Appellant claims that the only authority vested in Shaughnessy or in any of its agents was to make advancements based upon a percentage of production; that payment of such advancements was to be made only by checks bearing certain printed indorsements hereinafter set forth, and that the liability for final payments remained with Roedter or Southwick.
As to the assigned claims of Jacobson and Sherman, the controversy below was as to the liability of appellant for the payment of the entire purchase price. Appellee and his assignors claimed that Shaughnessy and appellant's other agents not only had the authority admitted by appellant, but that these agents, and particularly Shaughnessy, with appellant's knowledge, so completely took over and dominated the situation that they had apparent authority to make agreements for the payment of the entire amount due upon the wood delivered to Central Paper Company; and that, having such apparent authority, they advised Southwick, Jacobson, and Sherman that their dealings were direct with the Central Paper Company, and on its behalf agreed that it would pay the entire amount due from Roedter or Southwick for the wood.
The question of the character and extent of the actual and apparent authority of the agents of appellant, particularly Shaughnessy, was by the trial judge submitted to the jury under appropriate instructions and requests to charge on behalf of both parties. The instructions and requests so given were well within the principles announced in the decisions of this court.1 Upon this issue the jury found against appellant, and that its agents had authority to make agreements to pay the full purchase price for the wood, and that such agreements were in fact made by these agents.
The view which we take of the case makes it necessary to consider only two of the claimed grounds of error:
1. Did the matter in controversy in this action exceed, exclusive of interest and costs, the sum or value of $3,000?
Plaintiff in the court below offered evidence in support of his individual claim and six assigned claims. Plaintiff's individual claim was made up of the following items:
Balance due for services rendered ... $1,563.38
For monies advanced to Jacobson
and Sherman, and .................. 500.00
A claim for damages on account of
an alleged breach of a contract
for the purchase of timber products
for appellant during the
year 1929, in the amount of ....... 5,000.00
The six assigned claims were in the amounts following:
Sherman ....................... $2,394.47
Jacobson ...................... 950.71
Johnson & Carlson ............. 734.77
Isaacson ...................... 1,120.19
Lamppa ........................ 156.05
Sillanpaa ..................... 887.10
Upon the point of lack of jurisdiction of the court below it is urged that Southwick's claim for damages ($5,000) was not to be considered in the court below in determining the jurisdictional amount because he did not recover, and to a legal certainty had no reasonable expectation of recovering, any amount of damages.2
As to the claims assigned to Southwick it is asserted (a) that the claims of Lamppa, Isaacson, Sillanpaa, and Johnson & Carlson were assigned to Southwick for the purpose of collection only, in contravention of the Act of March 3, 1875, section 5, now Judicial Code § 37, 28 USCA § 80; and (b) that each of the assigned claims being less than the required jurisdictional amount the "assignee clause," 28 USCA § 41 (1) prevented the court from entertaining jurisdiction as to them, separately or in aggregation.
These questions of jurisdiction are subject to review here. Teel v. Chesapeake & O. Ry. Co. (C. C. A. 6) 204 F. 918, 919, 47 L. R. A. (N. S.) 21. We consider them in their reverse order.
So far as applicable here 28 USCA § 41 (1) provides: "No district court shall have cognizance of any suit * * * upon any * * * chose in action in favor of any assignee * * * unless such suit might have been prosecuted in such court to recover upon said * * * chose in action if no assignment had been made."
The appellee contends that the only purpose of the "assignee clause" is to prevent creation of diversity of citizenship by assignment, and that it has no application so far as the amount of an assignor's claim is concerned. It may be conceded that a literal reading of the clause would make it applicable to restrict and limit the jurisdiction of the federal courts, both on account of lack of diversity of citizenship and insufficiency in amount of the assigned claim. However, the decisions of the Circuit Courts of Appeals and the District Courts uniformly have been to the contrary.3
In Bowden v. Burnham (C. C. A. 8, 1894) 59 F. 752, at page 755, it was said, in referring to the assignee clause:
The cases uniformly hold that Congress did not intend that the assignee clause should restrict or limit the jurisdiction of the federal courts as to assigned claims upon the ground that such claims were below the jurisdictional amount. The cases also uniformly hold that an assignee of claims below the jurisdictional amount, the same having been assigned absolutely, and the assignors being nonresidents of the state, may aggregate his assigned claims to make up the jurisdictional amount. There is not a discordant note in the decisions.
Further, it appears that the present statute embodies the fourth re-enactment of substantially identical language.4 It is well settled that, where there has been such a uniform construction of a statute by judicial decision, it is presumed that Congress, in re-enacting such legislation after judicial construction, adopted and acquiesced in such judicial construction unless a contrary intent appears, which is not the case here. The...
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