Rinaldi v. Young, 6862.

• Decision Date: 14 June 1937
• Docket Number: No. 6862.,6862.
• Citation: 67 App. DC 305,92 F.2d 229
• Parties: RINALDI v. YOUNG.
• Court: U.S. Court of Appeals — District of Columbia Circuit

67 App. DC 305, 92 F.2d 229 (1937)

RINALDI v. YOUNG.

No. 6862.

United States Court of Appeals for the District of Columbia.

Decided June 14, 1937.

Carl A. Marshall, of Washington, D. C., for appellant.

Edward F. Howrey and Thos. S. Markey, both of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, GRONER, and STEPHENS, Associate Justices.

MARTIN, Chief Justice.

This is an appeal from a decree and judgment of the United States District Court for the District of Columbia.

The appellant, who was plaintiff below, filed a bill of complaint against the receiver of the International Exchange Bank and Jerry Maiatico, alleging in substance that on June 27, 1932, plaintiff executed and delivered to the International Exchange Bank his promissory note in the sum of $3,454.93 indorsed by Jerry Maiatico and that at the time he was informed and assured by the president of the bank that this was merely a temporary arrangement and that within a short time after the termination of some litigation Maiatico would be substituted as maker of the note and there would be no liability upon plaintiff's part. Plaintiff further alleged that the litigation referred to had been terminated but that Maiatico had not taken up the note in question and plaintiff prayed for an injunction to prevent the receiver of the International Exchange Bank from attempting to enforce the note against him and that it should be delivered up and canceled or that Maiatico should be substituted for him as the maker thereof. These allegations were in substance denied by the defendant, the receiver of the International Exchange Bank, and the receiver set up the note as a valid obligation of the plaintiff and prayed for a judgment at law against plaintiff for the amount thereof. No objection was made by the plaintiff because of the fact that the defendant was undertaking by counterclaim to combine an action at law for judgment upon the note with the equity proceeding begun by the plaintiff.

A trial was had upon the evidence to the court and the court denied the right of plaintiff to the relief sought by him and entered judgment against plaintiff in favor of the bank for the amount due upon the note.

The facts disclosed by the testimony are in substance as follows:

On and prior to June 27, 1932 the International Exchange Bank held a promissory note signed by Maiatico payable to the bank in the sum of $3,454.93 secured by certain collateral second trust notes. At or about that time there was certain litigation pending concerning the title of the bank to the collateral notes. In order to "clear" such collateral, it was agreed between Maiatico and the president of the bank that his note should be put in a different form. Pursuant thereto Maiatico induced Rinaldi to execute and deliver to the bank the note now in suit. Maiatico and Rinaldi had known each other for many years and had signed notes for each other on several occasions prior to that time. On June 27, 1932, Rinaldi executed his promissory note whereby he promised to pay to the order of the International Exchange Bank on demand the sum of $3,454.93 and Maiatico indorsed the note and the same was thereupon delivered to the bank.

The delivery of the note was made pursuant to an understanding between Maiatico, Rinaldi, and the president of the bank that it would be used to pay off the note of Maiatico then held by the bank; that as soon as the litigation concerning the collateral note was disposed of Maiatico would reinstate himself as the primary debtor and then the Rinaldi note would be canceled; that assurances were given Rinaldi by the president of the bank that he would not be called upon to make any payment upon the note. Upon delivery of the note in suit to the bank on June 27, 1932, Rinaldi's account in the bank was credited with the proceeds thereof. Rinaldi concurrently drew a check in like amount against his account payable to the bank which was accepted by the bank as payment of Maiatico's indebtedness. The records of the bank show, and the president of the bank testified, that the bank received no benefit from Rinaldi's note other than the payment by it of the indebtedness of Maiatico to the bank.

The International Exchange Bank was closed by order of the Comptroller of the Currency on July 14, 1932, about three weeks subsequent to this transaction. The note in suit was included in the assets of the bank taken over by the receiver.

Afterwards on October 28, 1932, the litigation referred to concerning the collateral note was decided favorably to Maiatico and the bank, the bill being dismissed for the reason that the plaintiffs were unwilling to proceed further with the case. It also appears by the testimony that Maiatico subsequently went into bankruptcy.

Upon these facts the lower court held as follows:

"I find that the note in suit was given for the accommodation of Maiatico. See Neal v. Wilson, 213 Mass. 336, 100 N.E. 544.

"Rinaldi by giving his note held himself out as a debtor and is estopped as against the Receiver representing creditors to deny his liability. Vallely v. Devaney, 49 N.D. 1107, 194 N.W. 903."

The bill was thereupon dismissed and judgment for the amount of the note was entered in favor of the receiver of the bank against the plaintiff, Rinaldi.

We...