Giblin v. Beeler
| Decision Date | 20 June 1968 |
| Docket Number | No. 9517-9519.,9517-9519. |
| Citation | 396 F.2d 584 |
| Parties | Frances H. GIBLIN, Appellant and Cross-Appellee, v. Robert BEELER, Appellee. Wilma BEELER and Juliette Beeler, Appellees and Cross-Appellants, v. Floyd LAMPERT and First National Bank of Beloit, Kansas, a corporation, Cross-Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
B. L. Pringle, Topeka, Kan. (Terence M. O'Brien, Kansas City, Mo., and John S. Dean, Jr., Topeka, Kan., were with him on the brief), for appellant, Frances H. Giblin and cross-appellees, Floyd Lampert and The First Nat. Bank of Beloit, Kan.
Jerry W. Hannah, Topeka, Kan. (T. D. Relihan, Terry E. Relihan, Smith Center, Kan., Clayton M. Davis, Mark L. Bennett, Sr. and Mark L. Bennett, Jr., Topeka, Kan., were with him on the brief), for appellees and cross-appellants.
Before MURRAH, Chief Judge, LEWIS, Circuit Judge, and CHRISTENSEN, District Judge.
This is a diversity action arising in the District of Kansas by the complaint of plaintiff Giblin as the holder of five promissory notes each executed by one or more of the defendants Beeler. Plaintiff, principal stockholder in and chairman of the board of the First National Bank of Beloit, Kansas, obtained the notes through the efforts of Lampert, president of the bank and admittedly plaintiff's general agent in the transactions. Each of the notes was negotiable in form, payable to the bank, and in an amount varying between $15,000 and $51,377.96. Plaintiff sought recovery against the defendant makers as follows:
After the principal complaint was filed, defendant Wilma Beeler was given leave to file a third-party complaint in which she sought indemnity from the bank and its president and agent, Lampert, for any amount which she was found owing the plaintiff Giblin should the latter be granted judgment.1
Trial of the issues was to a jury. The court directed a verdict in favor of plaintiff and against Robert Beeler on each of the notes to which he was a signatory and no appeal is taken from that aspect of the case. The remaining issues were submitted to the jury through special interrogatories and general verdict as provided for by Rule 49(b), Fed.R.Civ.P. The jury answered the interrogatories and returned general verdicts in favor of Juliette Beeler on Note 2, in favor of Wilma Beeler on Notes 3 and 4, and in favor of plaintiff and against Wilma Beeler on Note 5.
After entry of judgment on the jury verdicts, the plaintiff moved for judgment notwithstanding the verdict against Juliette Beeler on Note 2 and against Wilma Beeler on Notes 3 and 4, and defendant Wilma Beeler moved for judgment on the special interrogatories, the answers to which were alleged to be inconsistent with the general verdict on Note 5. The trial court granted each of these motions and entered judgment accordingly. Thereafter each party filed a motion for a new trial on each aspect of the judgment which then stood adverse to the respective party. All such motions were overruled and this appeal and the cross appeals inevitably followed.2
Each of the subject notes was taken by the bank during the course of a continuing arrangement with Robert Beeler for the financing of a cattle-buying operation. In simple summary, Robert Beeler was purchasing cattle and paying for them with a check drawn upon the bank, covering the check with a sight draft drawn on anticipated or actual purchasers of the cattle from him for which the bank gave him immediate credit pending honor of the draft. Thus, a continuing float of credit was extended to Robert Beeler which collapsed when various sight drafts were dishonored. The bank then called on Robert Beeler to cover his overdrafts and, in separate transactions, the subject notes were executed by the parties and were applied by the bank for that purpose. The evidence pertaining to the execution and delivery of each instrument must be separately considered.
On April 26, 1963, Robert Beeler had dishonored sight drafts at the bank in the sum of $51,377.96 which he was called upon to cover by the bank president Lampert. Beeler did so by delivering to the bank his note of equal amount, Note 2, and purportedly secured by a chattel mortgage. Juliette Beeler had signed both note and mortgage in blank and the instruments were thereafter filled out and completed at the bank by Lampert and Robert Beeler.
Juliette Beeler testified that some weeks prior to April 26 Lampert had been informed that she and her husband contemplated summer pasturing cattle upon their farm and that Lampert had stated that special arrangements for the financing of such cattle would have to be made. She further testified that she signed the note and mortgage in blank, at her home, gave them to her husband to deliver to Lampert, and that her "husband had the authority to have Mr. Lampert to make arrangements to loan us enough money to put some cattle on our pasture." In May she called Lampert and requested the return of the note and mortgage and then found out that the instruments had been used for another purpose. No livestock had ever been placed on the farm.
In submitting the issues of Note 2 to the jury the trial court correctly instructed on the liability of one who executes a negotiable instrument in blank.3 The jury found as a fact that plaintiff was not a holder in due course and, indeed it is apparent as a matter of law that plaintiff's rights could rise no higher than the rights of the bank or the knowledge of her general agent, Lampert.
As we have indicated, the jury returned a verdict for Juliette Beeler and the trial court set it aside and entered judgment n. o. v. for plaintiff. We hold the court erred in so doing.
Note 2 is the only note involved in the case that was signed by Juliette Beeler and the only one that was accompanied by a chattel mortgage. Lampert knew that the instruments had been signed in blank for he completed them. He knew that the note was being taken to cover Robert Beeler's overdrafts and for no other purpose. He knew that the chattel mortgage, purporting to mortgage specific cattle on the Beeler farm, was a complete sham in form and substance. Although the jury's verdict is dependent upon the credibility of Juliette Beeler's testimony and the necessary implication that she was financially betrayed by her husband, we believe the total circumstances such as could properly lead reasonable men to believe that she was similarly betrayed by the bank. The evidence must here be viewed in the light most favorable to the party having received a verdict, and so viewed, the jury was justified in finding that Lampert knew, or should have known, that he was taking and using Juliette's note contrary to her intended purpose. In such case the granting of judgment notwithstanding the verdict was improper. Stringer v. Dilger, 10 Cir., 313 F.2d 536.
As defenses to plaintiff's claims on Notes 3 and 4 Wilma Beeler alleged that these notes were obtained from her by Lampert through breach of a fiduciary relationship to her, that the bank's title to the notes was defective by reason of failure of consideration, fraud, misrepresentation or mutual mistake of fact and that she signed the notes as an accommodation to the payee. The trial court instructed on these issues in general and submitted a number of special interrogatories to the jury including the following:
Subsequent to the verdicts of the jury favoring Wilma Beeler on these notes the trial court, after review of the evidence, concluded that he had erred in submitting a factual issue on the question of the existence of a fiduciary relationship between Lampert and Mrs. Beeler and on the other enumerated claimed defenses. Stating that the "evidence is well nigh conclusive" that Mrs. Beeler executed the notes at the request of and for the accommodation of her son, the court held that plaintiff had been entitled to a directed verdict on the issues and entered judgment accordingly and notwithstanding the jury verdict. The factual setting surrounding the execution of Notes 3 and 4 indicates this was a proper disposition in the case.
On March 13, 1963 Lampert called defendant Robert Beeler and advised him that his account was overdrawn some $50,000. The two notes in question were drawn up by Lampert and taken by Robert to his mother Wilma Beeler's home where she signed them and Robert returned them to the bank for deposit in his account. Also on the same day an additional deposit was made sufficient, when added to the notes, to cover the checks which had resulted in the overdraft.
Attendant to the signing of these notes was a phone call to Wilma Beeler from Lampert, but the record is not clear whether it occurred before or after their execution. In response to the question whether she had discussed the notes with her son, Mrs. Beeler gave the following self-contradicting statement:
The trial judge found no credible evidence to...
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