State Reserve Bank v. Swift & Co.

• Decision Date: 18 April 1929
• Docket Number: No. 8190.,8190.
• Citation: 32 F.2d 590
• Parties: STATE RESERVE BANK v. SWIFT & CO.
• Court: U.S. Court of Appeals — Eighth Circuit

32 F.2d 590 (1929)

STATE RESERVE BANK v. SWIFT & CO.

No. 8190.

Circuit Court of Appeals, Eighth Circuit.

April 18, 1929.

P. D. Gardiner, of Wichita, Kan. (J. R. Mayall, of Valley Center, Kan., on the brief), for appellant.

Earle W. Evans, of Wichita, Kan. (R. R. Vermilion, Joseph G. Carey, W. F. Lilleston, and Henry V. Gott, all of Wichita, Kan., on the brief), for appellee.

Before KENYON, Circuit Judge, and JOHNSON and McDERMOTT, District Judges.

JOHNSON, District Judge.

In the prayer of its complaint filed in the court below against appellant and others as defendants, plaintiff appellee here, among other things prayed: "That the court determine in such manner as it may deem proper and adequate the value of said premises and the amount of rentals to be paid by plaintiff therefor during the six-year period of time commencing on the first day of April, 1926." And that it have "such other and further relief as to the court may seem consistent and equitable in the premises."

An order pro confesso was taken against appellant, and later a decree pro confesso was entered upon the allegations of the complaint fixing the rental of the premises referred to in the prayer for the six-year period beginning April 1, 1926, and ending March 31, 1932, at $515 per month. Prior to the entry of the decree pro confesso, appellant filed a motion supported by affidavit of counsel asking that the order pro confesso taken against it be set aside. The motion was denied and the decree pro confesso entered. Appellant has assigned the refusal to set aside the order pro confesso as error; also, the entry of the decree pro confesso.

So far as necessary to state them, the facts as alleged in the complaint are as follows:

On or about the 1st day of April, 1914, appellee entered into the possession of a certain building in Wichita, Kan., under a lease from Charles Phillips, the owner, for a term of six years ending March 31, 1920. This lease was renewed for a second term of six years ending March 31, 1926. After the renewal of the lease, another story was added to the building and leased by Charles Phillips to appellee for the remainder of the term ending March 31, 1926. Both leases contained a provision for renewal for another six-year term ending March 31, 1932. These provisions were duly complied with by appellee on the 29th day of December, 1925, and the lease thereby renewed for said term ending March 31, 1932. Instead of a definite sum stipulated to be paid as rent for the premises during the term beginning April 1, 1926, the leases contained provisions for its ascertainment. The first lease provided that the annual rental to be paid during the terms beginning April 1, 1920, and April 1, 1926, "shall be on the basis of ten (10) per cent. of the value of the property which shall be ascertained and determined by three (3) different disinterested appraisers: one selected by party of the first part and one selected by party of the second part; these two (2) to select the third. Said appraisers shall determine the value of the land and add thereto cost of constructing said building and repairs to same less two and one-half (2½%) per cent. per annum depreciation computed from the date of completion of said building."

The provision contained in the second lease is that the annual rental for the term beginning April 1, 1926, "Shall be on the basis of ten (10%) per cent. of the value of the property, which shall be ascertained and determined by three different disinterested appraisers — one selected by the Lessor and one selected by the Lessee; these two to select a third. Said appraisers, from the cost of constructing said additional story and repairs to same, shall deduct two and one-half (2½) per cent. per annum depreciation computed from the date of completion of said additional story. It is further understood that if the general taxes on the real estate covered by this lease and the lease dated October 31, 1913, on March 31, 1926, are higher or lower than what they are for the year following the completion of the additional story provided for herein, that the renewal privilege provided for herein shall be on the further condition that one-fourth of the increase or decrease in said general taxes at that date shall be charged to the Lessee in case of an increase and rebated by the Lessor in case said taxes are decreased."

The defendant Charles Phillips was the owner of the premises at the time the first lease was executed. The defendant Lillian Phillips, his wife, acquired said premises by deed from her husband after the execution of the first lease but before the execution of the second. She had in writing ratified and confirmed both leases before the suit was commenced. The defendant and appellant, the State Reserve Bank, claimed an interest in the premises at the time the suit was brought as holder of two certificates of purchase issued by the sheriff of the county on sales made by him of said premises under mortgage foreclosures in the state court. After futile negotiations to fix the rental to be paid for the new term, appellant in May, 1926, selected an appraiser as provided in the leases, and gave each of the defendants written notice of such selection and demanded that defendants select an appraiser as provided in the leases to fix the rent to be paid for the term ending March 31, 1932. No appraiser was ever selected by defendants or any or either of them. On December 2, 1926, appellee commenced this action.

On March 17, 1927, the order pro confesso above referred to was taken against appellant. On January 17, 1928, appellant filed the motion above mentioned to set aside the order pro confesso. The motion was supported by an affidavit of counsel wherein certain matters were stated tending to excuse the failure of appellant to plead in the action before the entry of the order pro confesso and tending to excuse the delay in filing the motion to set aside the order pro confesso.

In opposition one of counsel for appellee made and filed an affidavit in which certain of the matters stated in the affidavit of appellant's counsel tending to excuse the delay in moving to vacate the order pro confesso were controverted.

The trial court, as already said, denied appellant's motion and refused to set aside the order pro confesso.

It is sufficient to say that no explanation was given in the affidavit of counsel of appellant for the failure of appellant to apply before the entry of the order pro confesso for an enlargement of time in which to plead to the complaint, and no answer was tendered with the motion to set aside the order pro confesso.

It is obvious on the record before us that the refusal of the court below to set aside the order pro confesso was well within the limits of sound judicial discretion.

The court immediately upon denial of the motion to set aside the order pro confesso made and entered the following decree:

"This cause comes on on this seventeenth day of January, 1928 for hearing (a) on the motion of defendants, Charles Phillips and Lillian M. Phillips, for additional time to plead and (b) final decree, and it appearing to the court by statements of counsel that the said defendants, Charles Phillips and Lillian M. Phillips, no longer have any interest in the subject-matter of this proceeding, their said motion is by the court hereby overruled.

"The court finds that a decree pro confesso was entered herein to-wit, on the 17th day of March, 1927, against each and all of the other defendants herein,...