Federal Intermediate Credit Bank v. L'HERISSON

• Decision Date: 30 May 1929
• Docket Number: 8192.,No. 8191,8191
• Citation: 33 F.2d 841
• Parties: FEDERAL INTERMEDIATE CREDIT BANK OF OMAHA v. L'HERISSON (two cases).
• Court: U.S. Court of Appeals — Eighth Circuit

33 F.2d 841 (1929)

FEDERAL INTERMEDIATE CREDIT BANK OF OMAHA v. L'HERISSON (two cases).

Nos. 8191, 8192.

Circuit Court of Appeals, Eighth Circuit.

May 30, 1929.

E. F. Dougherty, of Omaha, Neb., for appellant and plaintiff in error.

O. D. Olmstead, of Winner, S. D., for appellee and defendant in error.

Before VAN VALKENBURGH and BOOTH, Circuit Judges, and MUNGER, District Judge.

BOOTH, Circuit Judge.

Both by writ of error and by appeal review is sought of a judgment in an action for damages for conversion of certain promissory notes. By reason of the statute (45 Stat. 54 28 USCA §§ 861a, 861b) abolishing writs of error and substituting appeals, the writ of error will be dismissed and the cause reviewed on the appeal.

The action was commenced by Eugene G. Barnum, as receiver of the Winner National Bank of Winner, S. D., hereafter called the Winner National Bank, against the Federal Intermediate Credit Bank of Omaha, hereafter called the Credit Bank of Omaha, a corporation organized under the laws of the United States, and the Winner Agricultural Credit Corporation of Winner, S. D., hereafter called the Winner Credit Corporation. Barnum was appointed receiver, October 24, 1925, by the Comptroller of the Currency. Subsequent to the commencement of the action the appellee herein was appointed receiver in place of Barnum, resigned, and was substituted as plaintiff. The Winner Credit Corporation made default; the Credit Bank of Omaha answered. The action was tried to the court without a jury, compliance having been had with the statutory requisites. The court made special findings in favor of the plaintiff, and judgment was entered thereon against both defendants.

The Credit Bank of Omaha alone has appealed, and the record shows no severance of the Winner Credit Corporation. We have considered the question of lack of joinder of parties appellant, since it is jurisdictional, though it has not been raised by counsel. We think, however, that the judgment, though joint in form, was in its essential nature several; so that an appeal by the Credit Bank of Omaha alone was properly taken. See 34 C. J. § 799, p. 505; 3 C. J. § 961, p. 1008; Cox v. United States, 6 Pet. 172, 8 L. Ed. 359; Winters v. United States, 207 U. S. 564, 28 S. Ct. 207, 52 L. Ed. 340; Lamon v. Speer Hardware Co., 198 F. 453 (C. C. A. 8); National Surety Co. v. Leflore County (C. C. A.) 262 F. 325, 18 A. L. R. 269. See also Hahn v. Sleepy Eye Milling Co., 21 S. D. 324, 112 N. W. 843; Merchants' Nat. Bank v. Stebbins, 15 S. D. 280, 89 N. W. 674; Black Hills Nat. Bank v. Kellogg, 4 S. D. 312, 56 N. W. 1071.

We turn to the merits. Appellant by its assignments of error has suggested very numerous questions which it desires to have considered and determined. But in accordance with well-established rules the review here must be a limited one. When an action at law is tried to a federal court without a jury, stipulation waiving a jury having been filed with the clerk, the questions open for review in the appellate court are limited, first of all, by statute. Revised Statutes, §§ 649, 700, 1011 (28 USCA §§ 773, 875, 879). The statute (section 1011) as construed by us forbids the appellate court to reverse a judgment for any error of fact. A finding contrary to the weight of the evidence is an error of fact. It follows that the appellate court will not review findings to ascertain whether they are in accordance with the weight of the evidence. Errors of law, however, may be reviewed. These may arise in connection with various questions. One such question is expressly stated in the statute: Whether the special findings support the judgment. Another is whether there is any substantial evidence to support the findings. Still other questions of law relate to rulings made in the course of the trial on motions and on the admission or rejection of evidence. But these errors of law, except the one arising out of the question whether the special findings support the judgment, are reviewable only if their occurrence is shown in a properly certified bill of exceptions, and if the particular ground for claiming error is sharply brought to the attention of the court and a ruling had.

If a party seeks to have reviewed the question whether the record contains any substantial evidence to support the findings and judgment against him, it is incumbent upon him to make a motion for judgment in his favor on that ground, or to request a declaration of law to that effect, or to take some other equivalent step, and secure a ruling by the trial court, and to take exception to such ruling.

If a party desires to have reviewed the question of the admissibility of evidence, he should at the proper time on the trial make his objection or his offer of proof as the case may be, and state the ground therefor, and secure a ruling of the trial court.

And finally, if a party wishes to have reviewed questions touching the admissibility of evidence, the assignments of error relating thereto must conform to the rules of the court, if any, regarding the same.

The foregoing rules of practice which have application to the case at bar have been enunciated and applied in a legion of cases. A few typical cases from this circuit are given in the margin.¹ Decisions of other circuits are in accord.

Applying these rules to the case at bar, it is evident that there can be no review of the question whether the findings or any of them are against the weight of the evidence, by reason of the statutes above cited.

There can be no review of questions as to the admission or rejection of testimony, because compliance has not been had with Rules 11 and 24 of this court; and no sufficient reason appears for waiver of the rules.

The question whether there is any substantial evidence to support the findings of fact is properly for consideration, since a motion for judgment in favor of defendant was made covering this ground, and assignments of error present the question for review.

The question whether the special findings support the judgment is, of course, open to review by virtue of the statutes above cited.

Among the facts found by the court are the following:

The Winner National Bank was, prior to October 23, 1925, engaged in business at Winner, S. D. On that day the board of directors of the bank passed a resolution declaring the bank to be insolvent, and on the next day a receiver was appointed by the Comptroller of the Currency.

The Federal Intermediate Credit Bank of Omaha was, during the time involved in the action, doing business in Omaha.

The Winner Agricultural Credit Corporation was, during the times in question, doing business in Winner, S. D., negotiating loans on agricultural paper and rediscounting such paper exclusively with the Credit Bank of Omaha.

M. P. Dougherty was the president of the Winner National Bank and of the Winner Credit Corporation; but the Winner National Bank was in no way benefited or interested in the transactions of the Winner Credit Corporation with the Credit Bank of Omaha.

Prior to July 28, 1924, the Winner National Bank was the owner and in possession of some 30 promissory notes made by various parties and amounting to $36,135.76.

Prior to the same date, the Winner Credit Corporation had negotiated loans, amounting in the aggregate to $84,997.52, and had rediscounted the same with the Credit Bank of Omaha.

Prior to the same date, the Credit Bank of Omaha had investigated these loans and had learned that some of them were poor, with inadequate security; that in case of some others the debtors had been selling the mortgaged property and not applying the proceeds upon the debt; that in case of still others the debtors had made payments to M. P. Dougherty to be applied upon their notes which they had executed to the Winner Credit Corporation; that these collections amounted to over $9,000.

On learning these facts, the Credit Bank of Omaha with the approval of its officers sent the following telegram to Mr. Dougherty July 7, 1924:

"Unless you wire us tomorrow, July 8th, that you have started for Omaha and that funds are available here to take up all matured obligations and to pay us proceeds of sales of mortgaged property we will institute drastic action immediately."

A few days later one of the same officers of the Credit Bank of Omaha told Mr. Dougherty over the telephone that unless he came to Omaha and took up all of the obligations of the Winner Credit Corporation, the Credit Bank of Omaha would deny them the privilege of rediscount.

On July 15, 1924, the Credit Bank of Omaha sent to its local attorneys at Winner twenty-four mortgage notes which had been rediscounted with it by the Winner Credit Corporation, with instructions to prepare immediately the necessary papers in foreclosure suits of the several mortgage notes, with attachments or garnishments against the Winner National Bank. This letter of instructions was shown to Mr. Dougherty by one of the local attorneys, and it was agreed between them that the local attorney should arrange a meeting between Mr. Dougherty and officers of the Credit Bank of Omaha for the following Tuesday, at Omaha. Mr. Dougherty went to Omaha, and first met Mr. Newcomb, one of the officers who had sent him the telegram of July 7th; and was told by him of the investigation; and was further told, "You have got to get the bank behind this corporation if we continue to carry this paper." The bank referred to was the Winner National Bank. Mr. Dougherty tried to raise funds in Omaha to take up the notes of the Winner Credit Corporation which had been rediscounted to the Credit Bank of Omaha, but was unable to do so. Mr. Newcomb then told him, "If you will go ahead and put up the Winner National Bank notes, we will carry this over until you can liquidate the Winner Agricultural Credit Corporation. If not, we are going to instruct our attorneys to carry out our instructions in our letter." Mr. Newcomb further told Mr....