Case Name: A. David RUBINSTEIN, Appellant, v. Abraham H. GOLDKIND and Helen Goldkind, Appellees
Court: United States Court of Appeals for the District of Columbia Circuit
Jurisdiction: United States
Decision Date: 1958-03-20
Citations: 255 F.2d 530
Docket Number: No. 14036
Parties: A. David RUBINSTEIN, Appellant, v. Abraham H. GOLDKIND and Helen Goldkind, Appellees.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 255
Pages: 530–534

Head Matter:
A. David RUBINSTEIN, Appellant, v. Abraham H. GOLDKIND and Helen Goldkind, Appellees.
No. 14036.
United States Court of Appeals District of Columbia Circuit.
Argued Jan. 21, 1958.
Decided March 20, 1958.
Mr. Herman Miller, Washington, D. C., for appellant.
Mr. Mark P. Friedlander, Washington, D. C., for appellees.
Before Washington, Danaher and Bastian, Circuit Judges.

Opinion:
PER CURIAM.
The complaint in this case was filed to substitute trustees under and to "reinstate" a deed of trust. As gleaned from the depositions and the pleadings below the following facts do not seem to be seriously in dispute:
In September 1954 the defendants Mr. and Mrs. Humble, owners of certain real estate in the District of Columbia, borrowed $3,000 through the defendant Henry Berman, gave in return a note in that amount to the order of one Laifsky, and executed a deed of trust to secure the same. The trustees named in the deed of trust were unaware that they had been so named; likewise Laif-sky did not know that he had been named payee in the note. The note was purchased by appellant Rubinstein from Berman, who had endorsed Laifsky's name without Laifsky's knowledge. Rubinstein deposited the note with his bank for collection.
In advance of the full maturity of the note Berman, without Rubinstein's knowledge, accepted payment of the full balance due on the note and forged the names of the two trustees to a release of the trust. This release was dated January 19, 1955, and was recorded the following day. The amount received by Berman was never paid to Rubinstein, except that Berman himself made several payments on the note as payments became due, keeping for himself the remaining proceeds of the payment. The note was never surrendered and cancel-led by Rubinstein or his collection agent after the balance due was paid to Ber-man.
On January 20, 1955 (the same day the forged release was recorded), the Humbles borrowed $5,000 from one Cook and executed to Cook a note in that amount secured by a deed of trust. This deed of trust was recorded on January 20. Shortly thereafter the Humbles defaulted, and the trustees of the last-mentioned deed of trust, after public notice, sold the property to appellees Mr. and Mrs. Goldkind. The trustees' deed was recorded on March 31, 1955. On July 20, 1955, the Goldkinds conveyed the property to one Foxx taking in return a note for $6,225.62 secured by a deed of trust appearing to be subsequent only to the first trust as, from the record, it appeared that the old second trust securing Rubinstein had been released. Foxx and the trustees under the January 20 and July 20 deeds of trust were named as defendants and answered the complaint. It does not appear from the record that Cook, also named as a defendant, was served with or answered the complaint.
The Goldkinds' answer claimed that Rubinstein did not have legal title to the $3,000 promissory note, and therefore that Rubinstein could not maintain this action. That note, they claimed, had been made payable to Laifsky, and Laifsky had neither endorsed nor delivered it to appellant, nor had Laifsky authorized the endorsement. The Gold-kinds claimed that they were approached to purchase a second trust note secured by the property involved, and that the record title then showed that the property was subject only to a first trust, the old second trust (under which appellant claims) having been released by a deed of release duly acknowledged and recorded. As noted above, the Humbles subsequently abandoned the property and, although named as parties, have neither been served nor appeared in this action.
After taking depositions, the Gold-kinds moved for summary judgment on the ground that the depositions conclu sively showed that the Laifsky note had not been properly transferred to Rubinstein and further that, if Laifsky were a "straw party," Rubinstein was guilty of usury such as to bar his action for equitable relief. Appellees' motion for summary judgment was granted without any statement by the District Court of its basis for ruling in favor of appellees. This appeal followed.
We believe that the case should have gone to trial and been determined on proper findings, if only because it does not appear on the present record that Berman's signing of Laifsky's name made the note a nullity for all purposes. True, Laifsky says he knew nothing of the insertion of his name in the note as payee. But we have heretofore held that a drawer's intent that the payee named shall have no interest in an instrument makes the instrument payable to bearer although the drawer knows the payee to be an existing person. See Callaway v. Hamilton National Bank of Washington, 1952, 90 U.S.App.D.C. 228, 195 F.2d 556; Norton v. City Bank & Trust Co., 4 Cir., 1923, 294 F. 839; Britton, Bills and Notes § 149 (1943). Whether Laifsky was a fictitious payee or whether his endorsement was forged must be the subject of proof and findings.
We think it preferable, in the light of this disposition, to allow the other questions presented to abide the proof at trial.
Reversed and remanded.
. There was a first deed of trust on the property which is superior in estate to either of the trusts hereinafter referred to, and which is not involved in these proceedings.
. Referred to variously as Laifsky, Lafsky, and Laefsky.