FS Bowen Electric Co. v. JD Hedin Construction Co.

• Decision Date: 14 February 1963
• Docket Number: No. 17136.,17136.
• Citation: 114 US App. DC 361,316 F.2d 362
• Parties: F. S. BOWEN ELECTRIC CO., Inc., Appellant, v. J. D. HEDIN CONSTRUCTION CO., Inc., et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

114 US App. DC 361, 316 F.2d 362 (1963)

F. S. BOWEN ELECTRIC CO., Inc., Appellant, v. J. D. HEDIN CONSTRUCTION CO., Inc., et al., Appellees.

No. 17136.

United States Court of Appeals District of Columbia Circuit.

Argued December 14, 1962.

Decided February 14, 1963.

Mr. Michael A. Schuchat, Washington, D. C., for appellant.

Mr. Thomas S. Jackson, Washington, D. C., with whom Messrs. Robert M. Gray, John L. Laskey and Austin P. Frum, Washington, D. C., were on the brief, for appellees. Mr. Darryl Wyland, Washington, D. C., also entered an appearance for appellees.

Before BAZELON, Chief Judge, and WILBUR K. MILLER and BURGER, Circuit Judges.

WILBUR K. MILLER, Circuit Judge.

On February 23, 1962, F. S. Bowen Electric Company filed in this action, then pending in the United States District Court for the District of Columbia, a second amended complaint¹ against J. D. Hedin Construction Company, Peter R. Cella, Jr., Karl K. Spriggs, David B. Nicholson, New Amsterdam Casualty Company, and Morris and Rose Abrams. It alleged that, in order to hinder, defraud and delay Bowen and other creditors, they caused certain real estate (alleged to be the principal, if not the only, asset of Hedin) to be conveyed on April 27, 1961, to Cella and on July 27, 1961, to Spriggs and Nicholson; that on October 17, 1961, Spriggs and Nicholson conveyed the realty to Morris and Rose Abrams, as a result of which "Spriggs received approximately $211,509.67 which purportedly represented the equity of defendant Hedin in said property"; that on or about October 26, 1961, Spriggs paid this sum to New Amsterdam "in order to further hinder, delay and defraud creditors of defendant Hedin."

To establish its own status as a creditor with standing to complain, Bowen alleged it obtained a judgment against Hedin for $30,000 in the District Court on November 24, 1958; that on appeal this court "remanded to reassess the awarded damages," and that on October 24, 1961, the District Court entered judgment in its favor for $34,151.86.²

Bowen's prayer was that the conveyances from Hedin to Cella and to Spriggs and Nicholson be adjudged fraudulent, and "that defendants be required to pay the amount received for this property into this Court to be disbursed as this Court shall direct;" and that a receiver be appointed to conserve the assets of Hedin for the benefit of its creditors.

Morris and Rose Abrams filed on April 2, 1962, a motion to dismiss the second amended complaint as to them and filed in support the affidavit of Morris Abrams that he and his wife had bought the realty for a valuable consideration as a result of arms-length negotiation with a real estate agent acting for Spriggs, that the consideration paid was the fair market value, that he and his wife had acted without collusion with anyone, and that they bought the property as a personal investment.

All the defendants moved for summary judgment, relying on the affidavit of Spriggs theretofore filed in support of the motion to dismiss the original complaint, and on the affidavit of one Robert J. Murray attached to the motion. The averments of the affidavits of Spriggs and Murray, combined and summarized, were that prior to November 25, 1959, New Amsterdam had become surety for Hedin on sundry contractors' performance and payment bonds, and had guaranteed the payment of $480,000 which Hedin had borrowed from a bank to discharge indebtedness which had arisen out of contracts for which it had executed performance and payment bonds; that to secure New Amsterdam in its guarantee of the bank loan and "sundry other liability and debts" to New Amsterdam, Hedin on November 25, 1959, executed and delivered to Spriggs and Nicholson as trustees a deed of trust on the realty involved here, which was recorded in the proper office on December 28, 1959.

The affidavits stated that on October 4, 1961, by which time New Amsterdam had paid or become obligated to pay more than a million dollars as surety for Hedin, New Amsterdam authorized and directed the trustees to convey the realty described in the deed of trust to the Abrams for $400,000, its fair market value, and that the net amount realized therefrom — $211,509.67 — was paid to New Amsterdam and applied on Hedin's secured indebtedness to it. Both affiants supported the Abrams affidavit.

Bowen filed no affidavits or other material in opposition to the motion for summary judgment. After considering the second amended complaint and the affidavits described above, the District Court granted the Abrams' motion to dismiss as to them, and awarded summary judgment to the other defendants.

On this appeal Bowen argues that the Spriggs and Nicholson affidavits were based on information and belief and not on personal knowledge, and that therefore the District Court erred in considering them as support for the motion for summary judgment. It also urges that anyway the District Court erred in granting summary judgment to the defendants.

Subsection (e) of Rule 56 of the Federal Rules of Civil Procedure, which has to do with summary judgment, includes the following:

"Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. * * *"

Spriggs said in his affidavit that "in all matters * * * herein referred to he acted as attorney for New Amsterdam Casualty Company, and as its agent and trustee." But his factual statements, made in one sentence more than two pages...