Yangtsze Rapid SS Co. v. Deutsch-Asiatische Bank

• Decision Date: 24 June 1932
• Docket Number: No. 6637.,6637.
• Citation: 59 F.2d 8
• Parties: YANGTSZE RAPID S. S. CO., Federal Inc., U. S. A., v. DEUTSCH-ASIATISCHE BANK.
• Court: U.S. Court of Appeals — Ninth Circuit

59 F.2d 8 (1932)

YANGTSZE RAPID S. S. CO., Federal Inc., U. S. A., v. DEUTSCH-ASIATISCHE BANK.

No. 6637.

Circuit Court of Appeals, Ninth Circuit.

May 16, 1932.

Rehearing Denied June 24, 1932.

Pillsbury, Madison & Sutro, of San Francisco, Cal., for appellant.

Schuhl & Lurton, of Shanghai, China, and Chickering & Gregory, Donald Y. Lamont, and Blair S. Shuman, all of San Francisco, Cal., for appellee.

Before WILBUR and SAWTELLE, Circuit Judges, and ST. SURE, District Judge.

SAWTELLE, Circuit Judge.

This is an appeal from a judgment of the United States Court for China.

The pertinent facts, as embodied in the narrative "Findings of Fact" of the court below, are substantially as follows:

On or about July 6, 1928, at Shanghai, China, appellant, the Yangtsze Rapid Steamship Company, entered into a contract in writing with one A. C. Seidel, whereby the latter as "seller" undertook to design, construct, and build for the appellant as the "buyer" one twin screw Diesel motorship in accordance with the specifications attached to said contract for the sum of Tls. 190,000.00. This contract provided, among other things, that the ship so constructed should be delivered to the appellant on July 1, 1929, and that payment therefor should be made as specified in said contract. On March 25, 1929, a supplemental contract in writing was entered into by the respective parties whereby the cost of the construction of said vessel was to be increased from Tls. 190,000.00 to Tls. 212,400.00. In the latter part of June, 1929, the work on the vessel was about 90 per cent. completed, and the appellant had paid to Seidel, under said contracts, the sum of Tls. 175,000.00 in cash and materials furnished, leaving a balance of Tls. 37,400.00 to be paid by the "buyer" one week after the delivery of the ship in accordance with the terms of the contract.

On or about June 25, 1929, Seidel called upon Lansing Hoyt, the president of the Yangtsze Rapid Steamship Company, and informed him that he (Seidel) was financially embarrassed and did not have sufficient funds available with which to complete the ship under his contract, and requested that the Yangtsze Rapid Steamship Company advance to him funds for such purpose. Hoyt refused to do this, and informed Seidel that he would have to make other arrangements for financing the completion of his contract. Seidel then consulted the officers of the appellee, the Deutsch-Asiatische Bank, with a view to securing a loan, and was advised by the bank that if he (Seidel) would secure from the Yangtsze Rapid Steamship Company an assurance in writing that the balance which he was to receive under his contract, namely, Tls. 37,400.00, when such contract should be completed, would be paid direct to the bank by the Yangtsze Rapid Steamship Company, the bank would make cash advances to Seidel to the extent of Tls. 37,400.00.

Seidel reported to Hoyt the result of his conference with the officers of the bank, and on June 25, 1929, Hoyt, on behalf of the appellant, wrote a letter to the bank which said:

"This confirms that we will pay to Messrs. Seidel and Company the sum of Tls. 37,400.00 sixty days after they have turned over the M. V. `Ichang' ready for operation on the Yangtsze River.

"We have already paid them Tls. 75,000.00 under our contract, and have opened a confirmed credit covering the Koerting motors for G$65,000. The sum first mentioned is the balance due Seidel & Company after we have thoroughly tried out the vessel."

When the bank received this letter, it considered it insufficient security for the advances which Seidel was requesting them to make. Thereupon the bank sent the letter to Seidel stating that the Yangtsze Rapid Steamship Company must obligate itself to pay the sum of Tls. 37,400.00 directly to the bank, and requested Seidel to obtain from the appellant a confirmation of such suggested obligation on its part. When the matter was again brought to Hoyt's attention by Seidel, Hoyt added the following postscript to his letter of June 25: "P. S. We confirm that this payment of Tls. 37,400.00 will be made direct to you for Seidel & Company's account. (Signed) L. M. Hoyt, President."

Within a few days thereafter Hoyt left China for the United States and did not return to Shanghai until the latter part of October, 1929. In the meantime, the appellee, relying upon the assurance of Hoyt as president of the appellant company that it would pay direct to the bank the sum of Tls. 37,400.00 sixty days after Seidel & Co. turned over the motor vessel Ichang ready for operation on the Yangtsze river, made certain cash advances, amounting to Tls. 37,400.00, to Seidel, between June 25, 1929, and October 25, 1929. All the money so advanced to Seidel was expended by him in an attempt to complete the vessel in accordance with the terms of his contract with the appellant.

When Hoyt returned to Shanghai in the latter part of October, 1929, he learned that the vessel was still under construction and uncompleted, and that an additional expenditure of a large sum of money would probably be necessary in order to complete the ship in accordance with the specifications. Without any notice to the bank and without the bank's knowledge, either actual or constructive, the appellant and Seidel entered into a contract with the New Engineering & Shipbuilding Works, Limited, on November 7, 1929, whereby the last-named company agreed to perform certain services and furnish certain material toward the completion of the vessel for the agreed price of Tls. 28,800.00. This contract provided that the Yangtsze Rapid Steamship Company should "be responsible for payment for all accounts of work performed by the New Engineering & Shipbuilding Works directly to them," and by the same contract the New Engineering & Shipbuilding Works specifically disclaimed all responsibility "for the running of main machinery, any auxiliaries, for the attainment of the contract speed, draught or dead weight carrying capacity, stability and trim and steering quality."

Before this contract was entered into with the New Engineering & Shipbuilding Works, Seidel, at the request of Hoyt, on or about October 31, 1929, executed and delivered to the appellant a bill of sale of the vessel in question, and at Hoyt's request had removed the uncompleted vessel from Seidel's shipbuilding plant in Shanghai to the shipyard of the New Engineering & Shipbuilding Works in that city.

Between November 7, 1929, and February 7, 1930, Seidel & Co. furnished materials and did certain specified work to complete the ship, and the New Engineering & Shipbuilding Works did likewise according to the terms of the contract.

On February 7, 1930, Seidel & Co. and the New Engineering & Shipbuilding Works jointly turned over the vessel to the Yangtsze Rapid Steamship Company ready for operation after it had been thoroughly tried out, and the ship was accepted by the appellant. Thereafter the appellant paid the New Engineering & Shipbuilding Works the sum of Tls. 38,980.00 for services rendered and materials furnished under its contract with Seidel & Co. and the Yangtsze Rapid Steamship Company for the completion of the vessel.

After the vessel had been accepted by the steamship company, the appellee demanded payment of Tls. 37,400.00 for Seidel & Co.'s account. Such payment having been refused, this suit was instituted on April 19, 1930. The lower court entered judgment against the appellant in the sum of Tls. 37,400.00 with interest at the rate of 6 per cent. per annum from April 7, 1930, to the date of the entry of judgment, July 11, 1931, or a total of Tls. 40,205.00 and costs. Therefrom comes this appeal.

At the outset we are confronted with the fact that there is no proper bill of exceptions. Rule 10 of this court provides in explicit language: "2. Only so much of the evidence shall be embraced in a bill of exceptions as may be necessary to present clearly the questions of law involved in the rulings to which exceptions are reserved, and such evidence as is embraced therein shall be set forth in condensed and narrative form, save as a proper understanding of the questions presented may require that part of it be set forth otherwise."

Here there has been an elimination of things immaterial to an appeal, but all the evidence presented is in dialogue form, not in the narrative condensed form prescribed by the rule. The manner in which the bill has been prepared is similar to that in the case of Wheeling Terminal Ry. Co. v. Russell (C. C. A. 4) 209 F. 795, 797, in which the court said: "The rule Rule 10, identical with Rule 10 of this court which has been quoted above was adopted after full consideration. It is believed that compliance with it will not only save useless printing but will enable the court much more intelligently to pass upon the real issues involved. We know that counsel are usually busy. Some time may be saved by turning over the preparation of the bills of exception to stenographers and clerks. Such saving may not, after all, be worth what it costs. It is not impossible that some writs of error would not be sued out at all if counsel took the trouble to extract from the stenographer's notes the precise points upon which they must rely. In almost all cases such a preliminary analysis would make the work of brief making and of oral argument both easier and more effective. The court must require compliance with the rule." See, also, Tingley v. United States (C. C. A. 10) 34 F.(2d) 1, 3; Caldwell v. United States (C. C. A. 10) 36 F.(2d) 738, 739; Smith v. United States (C. C. A. 10) 38 F.(2d) 632, 633; Hard & Rand, Inc., et al. v. Biston Coffee Co. (C. C. A. 8) 41 F.(2d) 625; Hurst v. Killits, 58 F.(2d) 903, decided by this court on May 2, 1932.

This same rule applies to appeals from the United States Court for China. In the case...