Rasmussen v. Gresly
| Decision Date | 03 May 1935 |
| Docket Number | No. 10144.,10144. |
| Citation | 77 F.2d 252 |
| Parties | RASMUSSEN v. GRESLY. |
| Court | U.S. Court of Appeals — Eighth Circuit |
W. C. Fraser, of Omaha, Neb., for appellant.
B. N. Robertson, of Omaha, Neb., for appellee.
Before STONE, SANBORN, and FARIS, Circuit Judges.
This is an appeal by the trustee of the Walrath & Sherwood Lumber Company, which was adjudged a bankrupt on December 31, 1932, from an order allowing the claim filed by Mrs. J. F. Gresly. Her claim was upon a promissory note for $11,000, dated December 26, 1930, due February 1, 1932, and bearing interest at 7 per cent. per annum. The objections to the allowance of the claim asserted that Mrs. Gresly was not a creditor; that she had surrendered her note about December 6, 1930, for preferred stock of the bankrupt of the par value of $11,000, to be retired December 31, 1934; that, since that time, the bankrupt had operated at a loss and without profits or surplus from which the stock could have been redeemed; that it had, after the surrender of the note, issued financial statements which did not include the note as indebtedness; and that the creditors had no knowledge of and had never consented to the redemption of the preferred stock by the bankrupt.
The claimant's reply amounted to a denial of the grounds of objection urged by the trustee, and contained an allegation that any pretended surrender of her note for stock was unauthorized and made without her knowledge and consent, and that no stock had ever come into her possession or control.
The referee, after a hearing, disallowed her claim. Upon review, the court below entered an order vacating the order of the referee and allowing the claim as a general claim.
The issues submitted upon the hearing before the referee on the objections to the claim were whether the claimant had authorized her husband to exchange her note for preferred stock, whether she had knowledge of the exchange, and had ratified it, and whether she was estopped to deny her husband's authority. The referee found against the claimant upon all of these issues, which were issues of fact to be determined from the evidence. It was conceded that the claimant had had a note, as she alleged, and that it was her exclusive property and evidenced a loan of her funds to the bankrupt. It was also conceded that on March 18, 1931, this note was delivered by the claimant's husband to C. E. Walrath, president of the bankrupt (who, according to a recital in the findings of the court below, was dead at the time of the hearing before the referee), in exchange for preferred stock. If Mrs. Gresly had authorized this exchange, or if she had subsequently learned of and consented to it, there was no basis for her claim. The only witnesses concerning authority, knowledge, or ratification were the claimant and her husband. Both testified that she had given her husband neither general nor specific authority to deal with her note, and that she knew nothing of its exchange for preferred stock until after the bankruptcy of the lumber company. There was no evidence of any ratification of the exchange by her after obtaining knowledge that it had been made. To set out the evidence in detail is unnecessary. If believed, it is consistent only with the hypothesis that the exchange of the note for the stock was unknown to, and unauthorized and unratified by, Mrs. Gresly.
The determination of the issues of fact depended entirely upon the credibility of Mr. and Mrs. Gresly. The referee was the trier of the facts. He had these witnesses before him. In testing their credibility and the weight of their evidence, he had a distinct advantage over this court and the court below, neither of which has had before it anything more than the cold record. The frankness and fairness shown by the witnesses, their attitude upon the witness stand, and the extent to which their testimony was colored, if it was colored at all, by self-interest, were important considerations in weighing their evidence and determining their credibility. These are matters which are not fully disclosed by the record, although the self-interest of the witnesses is apparent. It is obvious that the referee did not believe that Mr. Gresly had made the exchange of his wife's note for stock without her authority, knowledge, or consent. The court below, on the other hand, by reversing the referee, took the position that the referee was obliged to accept their testimony.
The appellant contends for the application of the general rule that in resolving issues of fact depending upon the credibility of witnesses and the weight of the evidence, the determination of the trier of the facts, who had the witnesses before him, must prevail. The appellee contends that her testimony and that of her husband, being undisputed and not inherently unreasonable or improbable, was to be accepted by the referee, as the trier of the facts, as true, and that ...
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