Melton v. Pensacola Bank & Trust Co.

• Citation: 190 F. 126
• Decision Date: 12 July 1911
• Docket Number: 2,115.
• Parties: MELTON et al. v. PENSACOLA BANK & TRUST CO.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

190 F. 126

MELTON et al. v. PENSACOLA BANK & TRUST CO.

No. 2,115.

United States Court of Appeals, Sixth Circuit.

July 12, 1911

Sweeney Ellis & Sweeney (J. W. Powell, of counsel), for plaintiffs in error.

John B Baskin (R. A. Miller, Robt. S. Todd, and Blount & Blount &amp Carter, of counsel), for defendant in error.

Before SEVERENS and KNAPPEN, Circuit Judges, and SANFORD, District judge.

SANFORD District Judge.

This is an action at law brought by the Pensacola Bank & Trust Company, a Florida corporation, against R. E. Melton and other plaintiffs in error, all citizens of Kentucky, on a promissory note for $5,467.50, together with another note for $5,000.00, as to which the plaintiff was subsequently permitted to dismiss the suit without prejudice and which is not now involved. There was a trial by jury. At the conclusion of all the evidence each side moved the Court for peremptory instructions in its favor. The defendants' motion was overruled, and under peremptory instructions from the Court the jury returned a verdict in favor of the plaintiff and against the defendants for the amount of the note remaining in suit, with interest. Judgment was rendered on this verdict; and the defendants' motion for new trial having been overruled they have brought this writ of error to review the judgment.

First. The defendants have assigned various errors to the action of the trial court in overruling their motion for peremptory instructions, in not submitting the case to the jury to pass upon the facts, and in directing a verdict in the plaintiff's favor. In the court below the defendants excepted to the action of the court in overruling their motion for peremptory instructions, but did not except to the direction of the verdict in plaintiff's favor, or to the action of the court in not submitting the case to the jury for its determination of the facts.

Since, however, in this case each side moved the court for peremptory instructions in its favor, unaccompanied by requests for specific instructions in case the request for a directed verdict should be denied, this amounted to an admission by each side that there was no conflict in the evidence and no question presented for the jury, and to a request to the court to find the facts and direct the verdict accordingly. Beuttell v. Magone, 157 U.S. 154, 15 Sup.Ct. 566, 39 L.Ed. 654; United States v. Bishop (C.C.A. 8) 125 F. 181, 183, 60 C.C.A. 123; Anderson v. Messenger (C.C.A. 6) 158 F. 250, 253, 85 C.C.A. 468; American Nat'l Bank v. Miller (C.C.A. 6) 185 F. 338, 341. And when, pursuant to such requests, the court accepted these waivers, and by its peremptory instructions determined the questions of fact and law in favor of one of the parties, each is estopped from assailing its finding upon disputed issues of fact, and is limited in the appellate court to a review of the question whether there was any substantial evidence not inconsistent with the undisputed evidence in the case, upon which to support the verdict as directed, under the issues of fact and law presented by the pleadings. United States v. Bishop, supra, 125 Fed.at page 183, 60 C.C.A. 123; American Nat'l Bank v. Miller, supra, 185 Fed.at page 342.

Obviously, therefore, the assignment of errors relating to the action of the trial court in not submitting the case to the jury for its determination of the facts, must be overruled. And since the question whether the trial court was in error in overruling the defendants' motion for peremptory instructions, to which exception was duly reserved, necessarily involves the same question as that in reference to its action in granting peremptory instructions in favor of the plaintiff, the two matters being correlative, we proceed to the consideration of the fundamental question involved under this review, namely; whether there is substantial evidence in the record not inconsistent with the undisputed evidence in the case upon which to support the verdict as directed, under the issues presented by the pleadings.

The amended petition which, under order of the court, was filed as a substitute for the original petition as previously amended, alleged that on April 23, 1906, the defendants with one G. C. Scudamore by their note of said date, filed with the petition, promised to pay to the order of said Scudamore on or before May 15, 1908, the sum of $5,467.50, with interest from May 15, 1906, payable at the First National Bank of Sebree, a corporation under the National Banking Act; that after the execution and delivery of said note, before its maturity and for value, the said Scudamore endorsed and delivered the same to the plaintiff; and that the plaintiff was then the owner and holder thereof.

The answers admitted that the defendants had signed this note with Scudamore, but denied that at the time of signing and delivery there was any payee named in the note or that it was payable at the First National Bank of Sebree, or that Scudamore before its maturity, had, for value, endorsed or delivered the same to the plaintiff, or that the plaintiff was the owner or holder of this note; and further averred that this note was signed and delivered by them to Scudamore for the purpose of being used by him for borrowing money from some bank in Nashville, Tennessee, with which to buy land for them in Florida; that the notes were signed and delivered to Scudamore with the name of the payee left blank, with the understanding that this blank should be filled in by the name of the bank lending the money for the purchase of the land which was the sole consideration for the execution of the note; that Scudamore did not purchase the land in Florida or borrow any money on the note for the defendants, and they never received any consideration therefor; that when Scudamore failed to discount the note for the purpose for which it was given he fraudulently and without defendants' knowledge inserted his own name as payee thereof and negotiated a loan for himself from the American National Bank of Nashville, Tennessee, and to secure such loan fraudulently hypothecated the note in suit as collateral security and endorsed the same without the knowledge or consent of the defendants; that this was the only endorsement which Scudamore ever made upon the notes and was made for this sole purpose; that thereafter said Scudamore paid his loan to said American National Bank and the note in suit which had been deposited by him as collateral was returned to him by said bank; that Scudamore had never delivered this note to the plaintiff and it had never owned said note or had it in its possession or any right, title or interest therein, and that if it had been delivered by Scudamore to the plaintiff it was delivered after its maturity, and only with the endorsement that he had originally made to the American National Bank; and that it was at the date of such delivery a non-negotiable note subject to all defenses allowable against such note.

The plaintiff filed replies in the nature of a general denial of the matters in confession and avoidance relied on in the answers. The plaintiff subsequently filed a pleading entitled an 'Amended Petition,' in which 'amending the petition to conform to the proof' it alleged that Scudamore (who is shown by the proof to have been the cashier of the plaintiff at the time of these transactions) had discharged his obligation to the American National Bank for which the note in suit had been deposited as collateral by his individual check drawn on the plaintiff, and that while he then had no funds to his credit with the plaintiff and the plaintiff was not indebted to him in any sum, had, without the knowledge and consent of the plaintiff, paid his said individual check to the American National Bank with the funds of the plaintiff and thereby discharged his obligation to the American National Bank and obtained the surrender of the note in suit deposited with it as collateral. This 'Amended Petition' concludes: 'Wherefore plaintiff prays as in the petition as amended. ' The answer of the defendants to this 'Amended Petition' was in the nature of a general denial.

The material evidence introduced at the trial, so far as the same need be recited, was substantially as follows:

The original note, which was filed with the plaintiff's petition, was produced at the trial and exhibited in evidence. It has, by agreement, been sent up as a part of the record, and shows on its face that it was executed on a printed blank designating the Peoples' Bank of Sebree as the place of payment, but that the name 'Peoples' Bank' has been erased by drawing an ink line through it and the name 'First National Bank' inserted in lieu thereof, with a stamp. It was further shown by officers and employees of the American National Bank that this note was deposited with said bank as collateral by Scudamore on April 26, 1906, to secure a loan then made Scudamore by said bank; that this loan was finally paid by Scudamore on August 14, 1907, by check drawn on the plaintiff, the note in suit which had been deposited by him as collateral being then returned to him by the American National Bank.

There was also evidence, though of a somewhat indefinite character, as to the pledging by Scudamore to the plaintiff as security for loans made to him, of the defendants' note in suit before its maturity, with the other $5,000.00 note of the defendants originally sued on.

J. B Perkins, who was plaintiff's cashier up to August 1, 1907, but who then resigned, returning as cashier about Thanksgiving, 1907, proved the execution by Scudamore of two notes to the plaintiff, one dated June 28, 1907, for $6,300.00 due ninety days after date, and the other dated November 2, 1907, for $5,500.00 due sixty days after date, and testified...