Coastal Air Lines v. Dockery, 14037.
| Decision Date | 15 March 1950 |
| Docket Number | No. 14037.,14037. |
| Citation | 180 F.2d 874 |
| Parties | COASTAL AIR LINES, Inc. v. DOCKERY. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Warren E. Wood and Griffin Smith, Jr., Little Rock, Ark., for appellant.
M. F. Elms, Stuttgart, Ark., for appellee.
Before GARDNER, Chief Judge, and WOODROUGH and RIDDICK, Circuit Judges.
The appellee, Dockery, a resident of Arkansas, leased one Douglas aircraft to appellant, Coastal Air Lines, Inc., a Pennsylvania corporation, for a period of 90 days, beginning September 27, 1947, "for an hourly rental of $25.00 (Twenty-Five dollars) per flying hour, with a minimum guarantee of $1,875.00 (Eighteen hundred, and Seventy-five dollars) for 75 (Seventy-five) hours flying time for each 30 (Thirty) days payable in advance." In the lease Coastal Air Lines was granted an option to purchase the aircraft, as follows: "It is also understood and agreed that the Lessee can at any time during the term of this lease for and in consideration of the sum of $22,500.00 (Twenty-two Thousand and Five Hundred dollars) purchase the aforementioned aircraft and it is also understood and agreed that the advance payment or any other monies paid as rental for the aforementioned aircraft will be deducted from the purchase price as stated in this agreement."
The Rhode Island Insurance Company of Philadelphia, Pennsylvania, issued to appellee, Dockery, its policy of insurance against loss or damage to the aircraft in the sum of $25,000.
The aircraft was destroyed in a crash on December 23, 1947. The interested parties agreed upon a settlement of the insurance company's liability under the policy for $22,500. Dockery, as owner of the aircraft, claimed the whole fund payable under the insurance policy. Coastal Air Lines, asserting that it had exercised its option to purchase, claimed an interest in the insurance fund to the extent of its payments for rent.
Dockery instituted an action against the insurance company in an Arkansas State Court to recover the whole fund payable under the policy. The insurance company removed the case to the Federal Court where it brought an action of interpleader against Dockery and Coastal Air Lines pursuant to Title 28 U.S.C.A. §§ 1335, 1397, and 2361.
Both appellant and appellee appeared in the interpleader action, Coastal Air Lines claiming an interest in the fund in court to the extent of $5,250, the sum paid by it to Dockery under the lease, alleging that it had exercised the option to purchase the aircraft. Dockery claimed to be entitled to the whole fund, on the allegation that the Coastal Air Lines had not only not exercised its option to purchase the aircraft, but had declined to do so. Dockery also set up a cross-claim against Coastal Air Lines for rent under the lease.
At the trial appellant and appellee stipulated that the sole questions for decisions were (1) whether Coastal Air Lines had exercised its option to purchase the aircraft granted in the lease, and (2) whether Coastal Air Lines was indebted to Dockery for unpaid rent.
The District Court found that appellee, Dockery, was the owner of the aircraft at the time of its destruction and entitled to receive the full fund in court, less an allowance to the insurance company for attorneys' fees and costs; and that Coastal Air Lines was indebted to Dockery in the sum of $1,275 for rent due and unpaid. Judgment was entered in accordance with these findings.
On this appeal Coastal Air Lines contends: (1) that the trial court's finding that it had not exercised its option to purchase the aircraft is not supported by the evidence; (2) that the judgment in favor of Dockery on his cross-claim for rent is based upon an erroneous interpretation of the lease agreement and contrary to the evidence; and (3) that, in any event, the court was without jurisdiction to entertain the cross-claim by one interpleaded party against another, but was limited to a disposition of the fund in court.
Concerning appellant's first assignment of error, it is sufficient to say that the evidence relating to Coastal Air Lines' exercise of the option to purchase the aircraft is in sharp conflict, and that the court has accepted the evidence on behalf of appellee, Dockery. The second assignment is also without merit. The lease was for a period of 90 days at a rental of $25 for each flying hour, with the further provision that for each 30-day period during the term of the lease lessee should pay the lessor $1,875 in advance and $25 an hour for each hour in excess of the minimum guarantee of 75 hours. The evidence as to the number of actual flying hours in each 30-day period comes from the records of Coastal Air Lines. These records show that in the first and third 30-day periods the aircraft was flown more than 75 hours, for each hour of which, by the terms of the lease, Coastal Air Lines became liable to Dockery for $25 as rent. In the second 30-day period the aircraft was flown less than the guaranteed minimum of 75 hours. Coastal Air Lines, under the plain terms of its lease, was nevertheless liable to pay for that 30-day period the agreed rent of $1,875. We find no error in the court's computation of rent due Dockery from Coastal Air Lines under the terms of the lease.
The only decision of a Federal appellate court bearing upon the question of the District Court's jurisdiction of Dockery's cross-claim against Coastal Air Lines is Hagan v. Central Avenue Dairy, Inc., 9 Cir., 180 F.2d 502. In that case the stakeholder, confronted with adverse claims to a fund, deposited with it in escrow, by Hagan and Central Dairy, brought an action of interpleader in the United States District Court for the Southern District of California. Service was made upon Central Dairy, an Arizona corporation, in Arizona, as provided by the Federal Interpleader Act, Title 28 U.S.C.A. § 2361. Central Dairy made no appearance in the interpleader action, and the District Court awarded the sum in court to Hagan. Hagan, however, had filed a cross-claim against Central Dairy for money damages, alleging that his claim grew out of the same contract which was the subject matter of the escrow deposit. Central Dairy, appearing specially, objected to the court's jurisdiction over it on the cross-claim. Its objection was sustained, and the Court of Appeals affirmed, saying:
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