Smith v. United States

• Citation: 369 F.2d 49
• Decision Date: 28 November 1966
• Docket Number: No. 18428.,18428.
• Parties: Lee SMITH, Appellant, v. UNITED STATES of America, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

369 F.2d 49 (1966)

Lee SMITH, Appellant, v. UNITED STATES of America, Appellee.

No. 18428.

United States Court of Appeals Eighth Circuit.

November 28, 1966.

Lee E. Smith, pro se.

Charles W. Ehrhardt, Asst. U. S. Atty., for appellee, Donald E. O'Brien, U. S. Atty., on the brief.

Before VOGEL, Chief Judge, GIBSON, Circuit Judge, and REGISTER, District Judge.

REGISTER, District Judge.

Lee Smith, defendant-appellant, brings this appeal from an order of the district court, Honorable William C. Hanson, Judge, granting summary judgment in favor of the plaintiff-appellee. We affirm.

Action was brought by plaintiff against defendant Lee Smith and his wife Anna Marie Smith to recover on a producer's note in the principal sum of $5,830.72 executed by the defendant and his wife on November 2, 1961, payable to the Commodity Credit Corporation, and secured by a chattel mortgage covering 2,603 bushels of farm-stored soybeans owned by the defendant and his wife. The note and mortgage were duly delivered. This loan was subsequently extended to mature on May 31, 1963. Thereafter defendant and his wife refused to repay the loan or deliver the soybeans when requested by Commodity Credit Corporation. In their answer defendant and his wife, pro se, admitted the execution of the note and mortgage, and the securing of the loan, but pleaded as defenses certain issues then being litigated in the federal district court in case number 1201. Later, plaintiff filed an amendment to its original complaint, based upon non-payment of a promissory note executed by defendant and his wife on November 19, 1962, in the principal sum of $4,298.97 and payable to Commodity Credit Corporation. This note was also secured by a chattel mortgage, covering 1,963 bushels of farm-stored soybeans. To this amendment defendant Lee Smith, pro se, filed an answer admitting that the loan had been made and that the pertinent documents were true and genuine, but again alleged certain facts claimed by him to be a complete defense to the amendment. No answer to the amendment was filed by Anna Marie Smith, defendant's wife.

On July 21, 1965, the parties stipulated that the subject soybeans be sold and the proceeds realized be delivered to the clerk of the district court in the form of a check payable jointly to Lee Smith and the United States of America, to be held until judgment and decree had been entered.

May 12, 1966, plaintiff filed a motion for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure, asking for judgment in its favor and against the defendant and his wife in the sum of $11,573.10, and for an order directing delivery of the check then held by the clerk in partial satisfaction of such judgment. The motion was based upon the pleadings on file; an affidavit of Wayne E. Lund, the county Office Manager of the Agricultural Stabilization and Conservation Service, United States Department of Agriculture, reflecting the granting of the two loans and subsequent non-payment; the stipulation relating to the sale of subject beans and deposit of proceeds with the clerk; and "The judgment entered in the files of this court in the case of United States v. Merchants Mutual Bonding Company, et al., Civil Action No. 1201, Western Division." After the filing by defendant of his response to plaintiff's motion and hearing oral argument, Judge Hanson granted said motion "* * * for the reason that during oral argument in open court the defendant admitted the truth of all the allegations of the plaintiff's amended Complaint and did not contest the affidavit filed with plaintiff's brief, and for the further reason that all of the defendants' affirmative defenses and claims against the plaintiff were previously presented by him to this Court in the case of United States v. Merchants Mutual Bonding Co., et al., Civil No. 1201, Western, and therein decided and adjudicated against him, and cannot again so be raised in this case." This appeal followed.

We note that defendant's wife, Anna Marie Smith, also a defendant named in this action, did not respond to plaintiff's motion for summary judgment, and did not contest it in any manner. No appeal by her was taken from the district court's order or judgment. The only issue before us, therefore, is the correctness of the trial court's granting plaintiff's motion for summary judgment against defendant-appellant, Lee Smith.

In order to fully understand the issue before us, it is necessary to consider the prior case referred to as Civil Action No 1201. Briefly stated, that was an action brought by the United States on a claim of the Commodity Credit Corporation for grain storage losses, to recover damages against the surety (Merchants Mutual Bonding Company) upon the warehouseman's bond furnished pursuant to Iowa law. Since the warehouseman had been declared bankrupt and there were other storage claimants and the losses exceeded the amount of the bond, all of the claimants, including Lee Smith, were interpleaded as defendants in No. 1201. An accurate and comprehensive recitation of all the facts involved in No. 1201 appears in the trial court's opinion reported at 220 F.Supp. 163, and need not be restated here. The trial court in that case determined the questions of liability of the surety to the United States and of the liability of the indemnitor to the surety on its co-indemnity agreement, but specifically ordered "* * * that all other matters relating to priority of claims and amounts and issues raised in the pleadings not herein disposed of shall be disposed of by subsequent proceedings and in accordance with the judgment herein rendered." The appeals taken from that judgment by Lee Smith, and others, were dismissed by this Court for want of jurisdiction because the order sought to be appealed from was not an appealable order or "final decision" under 28 U.S.C.A. § 1291. Smith v. United States, 8 Cir., 332 F.2d 731.

The "* * * matters relating to priority of claims and amounts and issues raised in the pleadings * * *" and not disposed of by the judgment above referred to were subsequently tried and adjudicated by the trial court, and reported at 242 F.Supp. 465. The contentions of the parties, legal and factual issues, references to the critical evidence received and considered and the ultimate findings and conclusions of the trial court are therein fully stated.

In its order granting plaintiff's motion for summary judgment in the case now under consideration, the trial court stated that all of the affirmative defenses and claims against the plaintiff raised by Lee Smith had been previously presented in No. 1201 and therein fully decided and adjudicated. We agree. A careful examination of the pleadings on file herein, and of the record in No. 1201, leads to no other conclusion. It appears that appellant, in fact, recognizes this to be true, for in their answer to the original complaint, defendants (Lee Smith and his wife) assert: "We deny that case 63-C-3033-W (the case now under consideration) is a new case; and insist that it is material directly associated with case 1201."; "We admit we were sued by the United States Government under Case 1201 and that the part of Case 1201 that pertains to us is still unruled upon and that Case 1201 is an open case requiring further settlement to clarify the positions of both the plaintiff and defendant of Case 63-C-3033-W."; "We object to any consideration of the court to rule upon Case 63-C-3033-W until all matters of Case 1201 are disposed of."; and "After the settlement of Case 1201, Case 63-C-3033-W will automatically take care of itself."

In his answer to the amended complaint, appellant, in addition to challenging the correctness of the trial court's interpretation of the applicable Iowa statute in No. 1201, alleges as affirmative defenses issues which were specifically raised, litigated and finally determined by that court in said case. In substance, these issues were four in number and all related to the validity, priority and amounts of claims. They included appellant's contention that the claim of Benson-Quinn Company was invalid; that he (Smith) was entitled to an allowance for costs against the United States; that by reason of negligence on the part of the United States it should be denied any recovery on the warehouseman's bond; and for a specific price as that applicable to the converted property.

With reference to the validity of the claim of Benson-Quinn Company (one of the interpleaded claimant-defendants) the trial court stated:

"The United States and Lee Smith have failed in every manner and in every material respect to prove that the Benson-Quinn claim is not valid under any rule of law that either party has contended for in this cause. Accordingly, the court finds that the Benson-Quinn claim has been proven to be valid in the amount of $17,262.76." 242 F.Supp., at page 468.

Appellant Smith strongly urged the validity and propriety of his claim for substantial costs against the United States allegedly necessarily incurred by him by reason of the litigation. With reference to this point the court concluded that "the impleaded parties are not entitled to costs * * *", and, following supported reasoning, "Therefore, the claim of Lee Smith for costs against the United States must be denied." 242 F.Supp. at page 468.

One of the grounds asserted by Smith for denying recovery on the warehouseman's bond to both the United States and Benson-Quinn was that both of those parties had been negligent in certain particulars. Referring to this assertion, the court stated:

"Lee Smith contends that both the Government and Benson-Quinn were negligent. Even if this be true, there is no reason to deny their recovery on the bond. However, the Court finds that there is insufficient evidence to show all the elements of negligence." 242 F.Supp. at page 469.

After discussing the price applicable to converted property in a situation of the type then...