Lincoln Nat. Bank v. CONTINENTAL & COMMERCIAL NAT. BANK
| Decision Date | 29 August 1928 |
| Docket Number | No. 3691.,3691. |
| Parties | LINCOLN NAT. BANK OF PITTSBURGH et al. v. CONTINENTAL & COMMERCIAL NAT. BANK OF CHICAGO. |
| Court | U.S. Court of Appeals — Third Circuit |
Davis, Fruit & Anderson, of Sharon, Pa., and Calvert, Thompson & Berger, of Pittsburgh, Pa. (George B. Berger, of Pittsburgh, Pa., and Eugene E. Anderson, of Sharon, Pa., of counsel), for appellants.
Alter, Wright & Barron, of Pittsburgh, Pa. (A. J. Barron, of Pittsburgh, Pa., of counsel), for appellee.
Before WOOLLEY and DAVIS, Circuit Judges, and BODINE, District Judge.
This is an appeal from a decree of the District Court, dismissing exceptions to the master's report and discharging the rule to reopen the report, allowing $50,000 damages to the appellee for a breach of contract by J. S. & W. S. Kuhn, Inc., hereinafter called the Kuhn Company.
On June 16, 1913, the Kuhn Company sold to the Continental & Commercial National Bank of Chicago, appellee, Hydro-Electric Company 6 per cent. interim certificates, valued at par at $250,000, at 98½, making a total purchase price of $246,250. The Kuhn Company agreed to repurchase these certificates from the appellee at the same price on December 16, 1913. The Kuhn Company became financially embarrassed, and on July 7, 1913, less than one month after the sale of the certificates, a receiver was appointed for the company. On December 16, 1913, the Chicago bank offered the certificates to the receiver of the Kuhn Company and demanded that he perform the contract of the Kuhn Company and purchase from it the certificates at the stipulated price. The receiver declined to do so.
On March 19, 1914, the bank and the receiver, with the authority of the court, agreed to exchange these Hydro-Electric certificates for notes of the West Penn Traction Company, which notes were to be "subject to all the same rights and obligations, if any, of the respective parties hereto." J. Wood Clark, Esq., was appointed special master on October 19, 1915, to pass on the claims of the creditors. On December 4th following the bank presented its claim to the master, and prayed that it be awarded $246,250, the purchase price of the original certificates, with interest, with a delivery by it to the receiver of the West Penn Traction Company notes, or that it retain the notes and be awarded damages of $146,250, with interest from December 6, 1913, for the breach of the contract of the Kuhn Company or its receiver in not repurchasing the certificates.
On October 5, 1916, the master filed his report, wherein he found the market price or value of the certificates at the time of the breach, December 13, 1913, to be $78½ and accordingly allowed the bank $50,000 damages. This allowance was confirmed by the court on January 26, 1917. There was no appeal by any party from the decree confirming this allowance. The notes of the West Penn Traction Company began to increase in value, and on April 1, 1917, they were called and paid in full, with a premium of $30 per note. The bank thus received the full face value of the notes of $250,000 and $7,500 premium.
On May 5, 1917, the same term of court in which the master's report awarding the $50,000 damages to the bank was confirmed, the appellants filed their petition for a rehearing of the claim of the bank. This was denied by the master. The appellant filed exceptions to his report, and a petition to reopen the report in so far as it allowed $50,000 damages. The exceptions were dismissed, and the rule allowed on the petition was discharged.
The breach by the Kuhn Company to repurchase the certificates is admitted, and the substantial question here is the proper measure of damages. But before we reach that question the appellee says there is a technical one which is dispositive of the case:
No exceptions were filed to the master's report until after the term had ended in which it was filed. The report allowing $50,000 damages to the bank was filed October 25, 1916, in the May term of court of that year. No exceptions were filed or objections made to the report within that term. The report was confirmed. On May 5, 1917, two days before the November term of 1916 closed, appellant filed a petition to open the report. Equity rule No. 66 provides that:
While exceptions were taken to a number of other claims adjudicated and allowed by the master, "there was no exception of any kind taken by any creditor to the allowance of the claim of the Continental & Commercial National Bank." As no exceptions were filed to the separate adjudication and allowance of damages to the bank within 20 days after the report was filed, the report stood confirmed as to that item as of the date filed. The court dismissed the exceptions to other claims and confirmed the report in full. An appellate court will not review an alleged error not brought to the attention of the trial court by a proper exception seasonably taken. Wyss-Thalman v. Maryland Casualty Co. of Baltimore (C. C. A.) 193 F. 53; Blisse v. United States (C. C. A.) 263 F. 961; Insurance Co. v. Folsom, 85 U. S. (18 Wall.) 237, 21 L. Ed. 827; Michigan Ins. Bank v. Eldred, 143 U. S. 293, 12 S. Ct. 450, 36 L. Ed. 162; O'Connell et al. v. United States,...
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