Porter v. F.M. Davies & Co.

• Decision Date: 11 March 1915
• Docket Number: 4314.
• Citation: 223 F. 465
• Parties: PORTER v. F. M. DAVIES & CO. [d]
• Court: U.S. Court of Appeals — Eighth Circuit

223 F. 465

PORTER v. F. M. DAVIES & CO. ^[d]

No. 4314.

United States Court of Appeals, Eighth Circuit.

March 11, 1915

Howard Babcock, of Sisseton, S.D., and Frank McNulty, of Aberdeen S.D., for plaintiff in error.

H. V Mercer, of Minneapolis, Minn., for defendant in error.

Before ADAMS and CARLAND, Circuit Judges, and AMIDON, District Judge.

CARLAND Circuit Judge.

Porter as receiver of the elevator company, commenced this action in the circuit court for Grant county, S.D., against Davies &amp Co., to recover the sum of $29,300 which he alleged was the amount of money belonging to the elevator company which had been unlawfully paid to Davies & Co. between January 31, 1908, and October 22, 1909, by one A. J. Norby, secretary of the elevator company, acting individually for himself in payment of losses sustained by him in speculating on the future price of wheat at Minneapolis, Minn.; it being also alleged that Davies & Co. knew at the time it received the money that Norby was speculating on his own account, and that the money it received belonged to the elevator company. The action was removed to the federal court on the ground of diversity of citizenship; the receiver being a citizen of South Dakota, and Davies & Co., a corporation, organized under the laws of Minnesota. Davies & Co. answered in the federal court by denying the allegations of the complaint and alleging that whatever transactions it had with Norby were lawful; that Norby acted therein as the agent of the elevator company; and that the transactions in which the money was paid were in fact the business of the elevator company, which had full knowledge thereof and either authorized or ratified the same. A jury was waived, and the action tried to the court. At the close of all the evidence counsel for the receiver moved the court for findings and judgment in his favor. The court denied this motion and made a general finding in favor of Davies & Co. Judgment was subsequently entered in accordance with this finding. The receiver has brought the case here both by writ of error and appeal.

The appeal must be dismissed as the action is at law. It was commenced as such and tried as such. No equitable relief is asked for. Counsel for the receiver refers us to Arthurs et al. v. Hart, 58 U.S. 6, 15 L.Ed. 30, as outlining the practice of this court on the present writ of error. Since the decision cited, section 700, R.S.U.S. (Comp. St. 1913, Sec. 1668), has been enacted, and the decisions of the Supreme Court and of this court in relation thereto now govern the practice. The following cases decided in the Supreme Court and in this court fully explain the practice: Stanley v. Supervisors, 121 U.S. 535, 7 Sup.Ct. 1234, 30 L.Ed. 1000; Santa Anna v. Frank, 113 U.S. 339, 5 Sup.Ct. 536, 28 L.Ed. 978; Lehnen v. Dixon, 148 U.S. 71, 13 Sup.Ct. 481, 37 L.Ed. 373; Boardman v. Toffey, 117 U.S. 271, 6 Sup.Ct. 734, 29 L.Ed. 898; Norris v. Jackson, 9 Wall. 125; Cooper v. Omohundro, 19 Wall. 65, 22 L.Ed. 47; Martinton v. Fairbanks, 112 U.S. 670, 5 Sup.Ct. 321, 28 L.Ed. 862; Betts v. Mugridge, 154 U.S. 644, Appx. 14 Sup.Ct. 1188, 25 L.Ed. 157; Insurance Company v. Sea, 21 Wall. 158, 22 L.Ed. 511; Wilson v. Merchants' Loan & Trust Co. of Chicago, 183 U.S. 121, 22 Sup.Ct. 55, 46 L.Ed. 113; in this court Mercantile Trust Company v. Wood, 60 F. 346, 8 C.C.A. 658; United States Fidelity & G. Co. v. Board of Commissioners, 145 F. 144, 76 C.C.A. 114; National Surety Co. v. United States, etc., 200 F. 142, 118 C.C.A. 360; Seep v. Ferris-Haggarty Copper Mining Company, 201 F. 893, 120 C.C.A. 191; Eastern Oil Co. v. Holcomb, 212 F. 126, 128 C.C.A. 642.

The finding of the trial court in the present case has the same effect as the verdict of a jury. Section 649, R.S.U.S. (Comp. St. 1913, Sec. 1587). The request of counsel for the receiver at the close of the evidence for findings and judgment in his favor had the same effect as a request for an instructed verdict. The finding in favor of Davies & Co. must stand if there is any evidence to sustain it. After a careful consideration of the evidence, we are not prepared to say there is no evidence to support the finding, and therefore must hold that the assignment of error based upon the finding must fail. While no assignment of error is made raising the question of jurisdiction, counsel for the receiver insist that there is a lack of jurisdiction appearing upon the record. We think counsel have misapplied the authorities cited in the brief upon the question of jurisdiction.

The claim is made that this suit is but ancillary to the suit in which the receiver was appointed now pending in the circuit court of Grant county, S.D.; that the state court has constructive possession at least of the money claimed to be due the elevator company from Davies & Co.; and that therefore the case was not removable to the federal court because such a proceeding would be an interference with the possession of the state court over property in its possession. The case of First National Bank v. Turnbull & Co., 16 Wall. 190, 21 L.Ed. 296, is cited in support of this contention. That was a case where certain cotton was levied upon under an execution issued upon a judgment of the state circuit court for the county of Alexandria, Va., in favor of the First National Bank at Alexandria and against Abijah Thomas. Certain persons, to wit, Alexander and John Turnbull, citizens of the state of Maryland, with Alexander Reach, a citizen of the state of New York, trading together as Turnbull & Co., asserted a claim as owners of the property thus levied on, and thereupon the sheriff, before proceeding further under his levy, demanded of the plaintiff in the execution an indemnifying bond, which demand was complied with. Turnbull & Co. then executed what may be called a forthcoming bond. The circuit court for Alexandria county under authority of the statute entered an order directing an issue to be tried by a jury, to determine the right to the property thus levied on. Before this issue was tried, Turnbull & Co. removed the case thus constituted to the Circuit Court for the United States for the District of Virginia. It was held by the Supreme Court that where a proceeding in a state court is merely incidental and auxiliary to an original action there-- a graft upon it, and not an independent and separate litigation-- it could not be removed into the federal court. The other cases cited by counsel are along this line, and there can be no doubt as to the correctness of the rule established. The present suit, however, is an independent action brought by the receiver a citizen of South Dakota against Davies & Co., a corporation of Minnesota. The receiver is pursuing his remedy in this court the same as in the state court. The state court has never obtained possession of the property sought to be recovered, and, if the plaintiff in this action is successful, the receiver recovers the property in his character as receiver just the same as if the case was being prosecuted in the state court. The case was removable under the law and there is no merit in the contention.

It only remains to consider the numerous assignments of error based upon the admission and exclusion of evidence during the trial of the case. In order to properly understand the errors assigned, it is necessary to take a brief view of the state of the case when the rulings which are alleged to be erroneous were made. It had appeared at the trial that between January 31, 1908, and November 1, 1910, one Norby, who was the secretary of the elevator company, had paid to Davies & Co. by checks, either on the Northwestern National Bank or the Scandinavian American National Bank, both of Minneapolis, signed 'Independent Elevator Company, by A. J. Norby, Secretary,' payable to Davies & Co., $29,800. Sometimes the words 'by L. Baker' followed the words 'A. J. Norby, Secretary.' Miss Baker was the bookkeeper for Norby and the elevator company. The account of the transactions on the books of Davies & Co. appeared in the name of Norby. It was claimed by Davies & Co. that the account was so kept as a matter of convenience, as the license to trade on the floor of the Minneapolis Chamber of Commerce had been granted to Norby. The claim of Davies & Co. also was that the transactions were wholly between itself and the elevator company, while the receiver claimed that the transactions were those of Norby individually with which the elevator company had nothing to do. Norby was dead, and the receiver called as a witness at the trial Mr. R. J. Healy, who was the secretary of Davies & Co., and of course interested in the success of the defendant. He was asked by counsel for the receiver for Davies & Co. the following question:

'During this time did Mr. Norby ever raise any objection to this dealing on behalf of the company with your company?'

Counsel for plaintiff objected on the ground that it assumed and stated facts not shown by the evidence, that it was incompetent, irrelevant, and immaterial, and assumed that the Independent Elevator Company was dealing with the defendant. The objection was overruled and an exception taken. The answer was, 'No, sir.'

Counsel for Davies & Co. then asked the witness this question:

'Did Frank McNulty ever raise any objection to your company on any ground to keep you from trading with the Independent Elevator Company?'

The same objection was made to this question as the preceding one. The objection was overruled and an exception allowed. The answer was, 'No, sir.' Counsel for Davies & Co. then asked the witness the following question:

'Did Mr. Porter ever make any such objection?'

To which question there was the same objection and the same ruling. The answer was, 'No, sir.'

Counsel for ...