Schulenberg v. Norton

• Decision Date: 04 May 1931
• Docket Number: No. 8876.,8876.
• Citation: Schulenberg v. Norton, 49 F.2d 578 (8th Cir. 1931)
• Parties: SCHULENBERG v. NORTON.
• Court: U.S. Court of Appeals — Eighth Circuit

49 F.2d 578 (1931)

SCHULENBERG v. NORTON.

No. 8876.

Circuit Court of Appeals, Eighth Circuit.

April 6, 1931.

Rehearing Denied May 4, 1931.

John Knauf and Arthur L. Knauf, both of Jamestown, N. D., for appellant.

Lemke & Weaver, of Fargo, N. D., for appellee.

Before STONE and GARDNER, Circuit Judges, and WYMAN, District Judge.

STONE, Circuit Judge.

This is an action by the administrator of Anna Smith against the receiver of the Farmers' National Bank of La Moure, N. D. The substance of the petition is that Mrs. Smith had intrusted $1,700 to the bank to be invested in 7 per cent. real estate mortgages; that the bank had failed to make such investment, but had converted the funds to its own use; that, at the time the bank became insolvent and was taken over by the comptroller, there were funds therein of more than the above amount; that the receiver had, "on various occasions," been requested to and had refused to allow this amount as a preferred claim or any claim against the bank; that this amount should be paid as a preferred claim from the assets. Subsequently, the prayer was amended to permit allowance as a general claim if the court deemed it was not preferential. The answer denied the petition, except as to appointment and qualification of the receiver, and it pleaded that the petition failed to state a cause of action. Evidence was introduced, and the court decreed that $1,700 be allowed and paid as a general claim. From this decree, the receiver appeals.

There are two general contentions here. One is that the amendment to the petition was improperly permitted. The other is that the evidence was insufficient to sustain the decree.

The objections urged here to the amendment to the prayer of the petition are that it was not to conform to the proof, and that it came too late. Amendments to pleadings are freely allowed where they are in furtherance of justice. The propriety of such amendments is a matter of discretion with the trial court, and will not be disturbed, unless it appears that such discretion has been unwisely exercised, in that the amendment allowed was not, under the crcumstances, in furtherance of justice but a detriment thereto. USCA title 28, § 777; Thomsen v. Cayser, 243 U. S. 66, 89, 37 S. Ct. 353, 61 L. Ed. 597, Ann. Cas. 1917D, 322; and the following cases in this court — Guardian Trust Co. v. Meyer, 19 F.(2d) 186, 192; Chicago, St. P., M. & O. Ry. Co. v. Nelson, 226 F. 708, 712; Bankers' Surety Co. v. Town of Holly, 219 F. 96, 102. This amendment came some time after the submission of the case, but before decision. It was not intended to affect the issues in the case but the relief. There is no contention that it could have resulted in placing appellant in any disadvantageous position by surprise or otherwise. In a sense, it was to conform to the proof, as it was designed to permit plaintiff to secure alternative relief based thereon. There was no prejudice to appellant of which he can complain. It was not an unwise exercise of discretion to permit the amendment.

The contention that the amendment "came too late" is based upon the theory that the court had lost the power to permit amendment, because, it is claimed, the term at which the case was tried and submitted had closed before the amendment was offered. While the case had been tried and submitted, it was still under such submission and undetermined when the amendment was allowed. Section 777 of title 28, USCA provides that the trial court "may at any time permit either of the parties to amend any defect in the * * * pleadings, upon such conditions as it shall, in its discretion and by its rules, prescribe." "Any time" in the above statute has been construed to mean while the court "had control of the record, it had jurisdiction to act." Mexican Central Ry. Co. v. Duthie, 189 U. S. 76, 77, 23 S. Ct. 610, 47 L. Ed. 715. It not only "covers every step of a case from summons to judgment" In re Griggs, 233 F. 243, 246 (C. C. A. 8), but amendments may be made even after judgment Norton v. Larney, 266 U. S. 511, 516, 45 S. Ct. 145, 69 L. Ed. 413; Ward v. Morrow, 15 F.(2d) 660, 662, 663 (C. C. A. 8); McDonald v. Nebraska, 101 F. 171, 177 (C. C. A. 8); Chicago, R. I. & P. Ry. Co. v. Stephens, 218 F. 535, 540 (C. C. A. 6). There is some dispute as to whether this amendment was made during the term, but that is immaterial, where no final judgment has been entered during the expired term, for the matter is yet within the bosom of the court for decision, and it has lost no control over the incidents of the trial. In fact, such an amendment may be regarded as made in the appellate court Norton v. Larney, 266 U. S. 511, 516, 45 S. Ct. 145, 69 L. Ed. 413, or the appellate court may remand with instructions to set aside the judgment but not the verdict, to permit the amendment, and to re-enter judgment thereafter Ward v. Morrow, 15 F.(2d) 660, 662, 663 (C. C. A. 8). It is claimed, also, that the amendment constituted a new cause of action. This cannot be, because the amendment made no change in the facts relied upon for recovery, but merely as the remedy or result of such facts. There was no abuse of discretion in allowing this amendment; no statement of a different cause of action; and it was not out of time in a jurisdictional sense.

The next contention is that no general claim was ever presented to the receiver and that the claim alleging preference was not filed within time. The theory of this contention is that presentation of a claim to the receiver is a necessary prerequisite to suit thereon. No authority is cited to support this proposition, and we have been unable to find such. Section 194, Title 12, USCA, requires the receiver to ratably pay "all such claims as may have been proved to his satisfaction or adjudicated in a court of competent jurisdiction." The Supreme Court has held that claims may be established in court as well as before the receiver. Bank of Bethel v. Pahquioque Bank, 14 Wall. (81 U. S.) 383, 401, 20 L. Ed. 840; Kennedy v. Gibson, 8 Wall. 498, 506, 19 L. Ed. 476. There is no statutory provision requiring prior presentation of claims to such receiver. The statute provides an easy, speedy manner of determination of claims by permitting such to be presented to a receiver appointed by the Comptroller, but this is quite different from limiting the ordinary and usual way of determining rights of...