Nashville Interurban Ry. v. Barnum

• Citation: 212 F. 634
• Decision Date: 11 March 1914
• Docket Number: 120.
• Parties: NASHVILLE INTERURBAN RY. v. BARNUM.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

212 F. 634

NASHVILLE INTERURBAN RY. v. BARNUM.

No. 120.

United States Court of Appeals, Second Circuit.

March 11, 1914

The plaintiff is a corporation organized under the laws of the state of Tennessee. The defendant is a resident of the city and state of New York and president of Lawrence Barnum & Co. a corporation organized under the laws of the state of New York. The case was tried by the District Judge sitting without a jury, pursuant to a written stipulation signed by the plaintiff and the defendant. An attempt by the plaintiff to review the judgment by notice of appeal resulted in an order of this court, entered on November 20, 1913, dismissing the appeal.

The Nashville Interurban Railway had projected a line of railway out of the city of Nashville, Tenn., and had entered into a contract with the Central Construction Company for its construction. On March 20, 1907, the officers of these companies met in New York City with the defendant, who was and is the president of Lawrence Barnum & Co., and entered with him into certain agreements on behalf of their respective corporations. The railway company was represented by its president, H. H Mayberry, and the construction company by its president Judge Pitts. Two agreements were signed by these corporations; the signatures being affixed by their respective presidents. One of these was called an underwriting agreement, the other a collateral agreement.

The contention of the plaintiff was as follows: That the defendant was told that there were 15 directors of these two companies, but that only 5 of them had any financial interest, and that the financial interests in the companies were held by these 5 and by 1 outside man who was not a director of either company, the names of these 6 gentlemen being given, viz., Pitts, Mayberry, Baxter, Landis, and the two Franks, one of whom was, and one not, a director. The defendant stated that he would be satisfied if the guaranty provided for in the collateral agreement for the performance of certain features thereof should be signed by these six men, and he was assured by Mayberry that without doubt he (Mayberry) could get them to sign it.

On the 20th of March the parties negotiating the transaction signed the papers and executed the notes, and handed to defendant a draft for $37,500, which was the amount of his commission, payable in cash. Mayberry took the carbon copy of the underwriting agreement and the original copy of the collateral contract and left with defendant the carbon copy of the collateral contract and the original of the underwriting agreement, together with the notes and draft. The contentions of the plaintiff were: That the papers were deposited with him personally, and not as representing Barnum & Co., and that Mayberry was to proceed at once to procure the signatures of the four interested parties, who were absent, and upon doing so that the contracts were to be exchanged and the deal go into effect; that the draft defendant was at liberty to have cashed, and in case of miscarriage, the money was to be returned along with the other papers; that there was a miscarriage, and that Mayberry was never able to obtain the signatures of the other directors, so that the papers never became effective.

The defendant's contentions were as follows: That he told Pitts and Mayberry that he would accept their guaranty alone as satisfactory, and that the papers went into effect at once; that Mayberry was told that he was at liberty to obtain the guaranty of the other four persons interested, and that if their guaranty was obtained, the defendant agreed that he would exchange the papers, otherwise the matter stood as final in its then form; that an immediate delivery of the papers was made, and that Lawrence Barnum & Co. is entitled to retain the $37,500 and the notes (aggregating altogether $150,000) for services rendered in lending its credit by signing the underwriting agreement.

Dallas Flannagan, of New York City (Martin W. Littleton and Dallas Flannagan, both of New York City, of counsel), for plaintiff in error.

Hornblower, Miller & Potter, of New York City (William B. Hornblower, Charles A. Boston, George S. Hornblower, and Frank B. Washburn, all of New York City, of counsel), for defendant in error.

Before LACOMBE, COXE, and ROGERS, Circuit Judges.

ROGERS Circuit Judge (after stating the facts as above).

The plaintiff in this case claims to have deposited in escrow with the defendant a sight draft for $37,500. It admits that defendant was authorized to collect the proceeds of the draft at once, but asserts that he was to hold the amount when collected on the same terms and conditions, and subject to the same escrow agreement, as certain other papers and contracts deposited by it with defendant. The defendant, however, turned the money over to Lawrence Barnum & Co., and that corporation is still in possession thereof. The terms and conditions of the escrow agreement not having been complied with as understood by the plaintiff, the action was instituted to recover the amount of the draft. The defendant claims that in turning over the draft to Lawrence Barnum & Co. he was acting in accordance with the original agreement. This case was tried to the court without a jury. There was a special finding of facts, accompanied by a conclusion of law, and upon these there was a judgment for defendant, dismissing the complaint with costs. The plaintiff took exceptions to the findings and also excepted to the conclusion of law on the ground that the findings of fact did not sustain the conclusion of law.

We are confronted with the question of the power of this court to consider the findings of fact made by the court below.

The Revised Statutes, Sec. 566, provided as to the District Courts, as follows:

'The trial of issues of fact in the District Courts, in all causes except cases in equity and cases of admiralty and maritime jurisdiction, and except as otherwise provided in proceedings in bankruptcy, shall be by jury.'

It will be conceded that the District Courts were originally without authority to decide a question of fact without a jury. Whenever they undertook to do so by consent of parties waiving a jury, the proceeding was not judicial in its nature, but amounted to an arbitration. And in such case the court's action was not subject to re-examination in an appellate court.

Mr. Justice Taney, speaking for the court in 1858 in Campbell v. Boyreau, 21 How. 223, 226 (16 L.Ed. 96), stated the law on this subject, and the reason for it, as follows:

'The finding of issues in fact by the court upon the evidence is altogether unknown to a common-law court, and cannot be recognized as a judicial act. Such questions are exclusively within the province of the jury; and if, by agreement of parties, the questions of fact in dispute are submitted for decision to the judge upon the evidence, he does not exercise judicial authority in deciding, but acts rather in the character of an arbitrator. And this court, therefore, cannot regard the facts so found as judicially determined in the court below, nor examine the questions of law, as if those facts had been conclusively determined by a jury or settled by the admission of the parties. Nor can any exception be taken to an opinion of the court upon the admission or rejection of testimony, or upon any other question of law which may grow out of the evidence, unless a jury was actually impaneled, and the exception reserved while they were still at the bar. The statute which gives the exception in a trial at common law gives it only in such cases. And as this court cannot regard the facts found by the judge as having been judicially determined in the court below, there are no facts before us upon which questions of law may legally and judicially have arisen in the inferior court, and no questions, therefore, open to our revision as an appellate tribunal.'

The Supreme Court has recently announced the same doctrine in Campbell v. United States, 224 U.S. 99, 105, 32 Sup.Ct. 398, 56 L.Ed. 684 (1911).

But the Revised Statutes provided as to the Circuit Courts as follows:

'Sec. 648. The trial of issues of fact in the Circuit Courts shall be by jury, except in cases of equity and of admiralty and maritime jurisdiction, and except as otherwise provided in proceedings in bankruptcy, and by the next section.'

'Sec. 649. Issues of fact in civil cases in any circuit court may be tried and determined by the court, without the intervention of a jury, whenever the parties, or their attorneys of record, file with the clerk a stipulation in writing waiving a jury. The finding of the court, upon the facts, which may be either general or special, shall have the same effect as the verdict of a jury.'

It thus appears that as respects the Circuit Courts, express provision was made for a written waiver of a jury. In those courts when a jury was waived by written stipulation and the case was tried to the court, the proceeding remained judicial, not being converted into an arbitration....