Citizens National Bank of Lubbock v. Speer

• Decision Date: 30 March 1955
• Docket Number: No. 14880.,14880.
• Citation: 220 F.2d 889
• Parties: CITIZENS NATIONAL BANK OF LUBBOCK, v. John E. SPEER, Trustee in Bankruptcy of C. M. Henderson Bankrupt.
• Court: U.S. Court of Appeals — Fifth Circuit

220 F.2d 889 (1955)

CITIZENS NATIONAL BANK OF LUBBOCK, v. John E. SPEER, Trustee in Bankruptcy of C. M. Henderson Bankrupt.

No. 14880.

United States Court of Appeals, Fifth Circuit.

March 30, 1955.

Nelson & McCleskey, F. D. Brown, Klett, Bean & Evans, Robt. H. Bean, Lubbock, Tex., for appellant.

Lloyd Croslin, Croslin & Pharr, Lubbock, Tex., for appellee.

Warren E. Burger, Asst. Atty. Gen., Heard L. Floore, U. S. Atty., Fort Worth, Tex., Melvin Richter, Herman Marcuse, Dept. of Justice, Washington, D. C., filed a brief amicus curiae for the United States.

Before BORAH, RIVES and TUTTLE, Circuit Judges.

TUTTLE, Circuit Judge.

This is an appeal from an order of the trial court granting a new trial to the trustee in bankruptcy in a voidable preference suit brought against appellant, Citizens National Bank of Lubbock, Lubbock, Texas. Appellant seeks to escape the well-nigh inflexible rule that an order granting a new trial is not appealable¹ by contending that the order complained of was void as being outside the jurisdiction of the trial court.²

The only facts necessary to an understanding of the issues before us are simple:

The trustee in bankruptcy, the appellee in this Court, sued to recover a voidable preferential payment in the amount of $139,665.69 made by the debtor to the defendant Bank, the appellant in this Court. The issues were tried to a jury which was directed to make special findings on three issues pertaining to the alleged preferential payment. After the jury answered in the negative the question whether the Citizens Bank had reasonable cause to believe that the debtor was insolvent at the time the payments were made, the district court, on January 27, 1953, entered judgment for the Bank.

On February 6, 1953 — i. e., within the ten-day period provided by Rule 59(b), Federal Rules of Civil Procedure, 28 U.S. C.A., — the trustee in bankruptcy moved for a new trial. Three grounds were assigned in this motion: (a) that the verdict was against the weight of the evidence; (b) newly discovered evidence; and (c) misconduct of the jury.

On September 30, 1953, the court advised the parties by letter that the motion for a new trial was granted, because the court had "misgivings whether the jury had acted understandingly in their negative answer." A formal order granting a new trial was entered on October 8, 1953. The order recited expressly that the earlier verdict and judgment were set aside and vacated on the ground that the verdict is contrary to the greater weight of the evidence. The Bank appeals from this order.

The Bank specifies two errors to the ruling below. First, it claims that the new trial was granted on a ground not set forth in the motion for a new trial, and second, that the trustee, not having moved for a directed verdict, had forfeited its right to move for a new trial.

An order granting a new trial is not a final order and is, for that reason, not reviewable on appeal.³ Recognizing this general rule, the appellant seeks to avoid its application here by contending that, after 10 days, during which time the court may by its own initiative order a new trial,⁴ the court loses that power; that the order entered here was not based on one of the grounds included in appellee's motion for new trial; therefore, so appellant says, it was on a ground announced by the court and, thus, was on the court's own initiative, and was therefore void because entered after the 10-day period.

The fallacy of appellant's position is that the court's order granting a new trial was not on a ground thought up by the court, but was actually stated by the court in its order entered on October 8, 1953 to be on one of the grounds set out in ...