Court Opinion

ID: 8859608
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:43:41.859388+00
Date Added: 2024-06-11T17:05:46.561271
License: Public Domain

ROSS, Circuit Judge.
I dissent. This action was brought by the plaintiff in error, as receiver of the First National Bank of Arlington, Or., to recover from the defendant in error the amount of a money judgment which that bank obtained in one of the state courts of Oregon on the 9th day of April, 1893, against a man named Cecil, in which action a writ of attachment was duly issued, and levied upon the property of Cecil, to release which the defendant in error executed a bond by which he undertook and agreed to pay to the bank the amount of anv judgment which might be rendered in its favor against Cecil. There is no controversy respecting the amount of that judgment, or respecting the fact that the defendant in error obligated himself to pay the amount of it. But the contention of the defendant in error, and the ground upon which he resists the present action, is that prior to the commencement of this suit; that judgment was assigned by the First National Bank of Arlington to the defendant in error for a sufficient consideration, and that at the time of the bringing of the present action the plaintiff in error was not, therefore, the owner thereof. That assignment was executed in the name of the bank by one J. E. Frick, who was at the time, and for years before had been, and for some time thereafter, and up to the closing of the bank, continued to be, its vice president and acting president. The circumstances under which the assignment was made were these: Prior to the bringing of the action of the bank against Cecil, to wit, November 13, 1888, the defendant in error had commenced an action in the same court of Oregon against one L. D. Hoy and one Charles Butler, as partners under the firm name of Hoy & Butler, for a sum in excess of the amount for which the bank sued Cecil, and in which action the defendant in error caused a garnish*287ment to be served on tbe First National Bank of Arlington, to release which Hoy & Butler, as principals, and Frick, as surety, executed a bond whereby they undertook and agreed to pay to the defendant in error the amount of any judgment which he should recover in that action, and thereby procured the discharge of his attachment. At the time of the service of the garnishment there was in the hands of the First National Bank of Arlington for collection a draft for SB,000 drawn by Hoy & Butler on Campbell Sc Co., of Chicago. After the rendition of the judgment in favor of the bank against Cecil, and on June 11, 1893, the defendant in error recovered judgment in his action against Hoy Sc Butler for an amount in excess of the amount of the judgment recovered by the bank against Cecil. In this condition of affairs, Frick, -who during all of the times mentioned continued vice president and acting president of the bank, and, as the testimony went to show, its real head, nrouosed, according to the testimony of the defendant in error himself, to make this sort of an exchange:
“The bank got a judgment,” said (lie witness, “and X gave it a bond, anil Frick was a surety on this other bond in the case of Robinson against Hoy & Butler; and, after the two judgments were obtained, Frick proposed to me, in May, 1898— Frick made a proposition to me to settle the judgment that way. He assigned the judgment of the bank to me, and I assigned the Hoy & Butler judgment to him, and I took his note for tlie difference. He wrote me letters to have miue ready; that he would get it fixed up and send pretty soon. Finally he did send them to me to sign and return. His was signed, and I signed mine and returned to him. The judgment I got against Hoy & Butler was the larger judgment. There was something like 81,200 difference, and Frick gave me his note for the difference. Frick represented the bank. He seemed to be manager of the bank’s affairs, and represented himself in that way. He signed the judgment, ‘The First National Bank of Arlington, by ,T. E. Frick, Vice President.’ He represented to me that lie was doing business for the bank. That was my understanding. It was all done for the bank, he assigning me that judgment. I cannot remember the date, but I have it here in black and white. It was on February 16, 1894, when the judgment and papers reached me. The agreement was made a good while before. February 16, 1894, was when 1 received it. I sent the judgment which he assigned to me to the clerk’s office at Condon. It is on file there now.”
Notwithstanding the defendant in error testified that in the transaction Frick represented the bank, and that he represented to him (the witness) that he was doing business for the bank, and that; that was the witnesses’ understanding, the written correspondence between Frick and the witness altogether fails to bear out that interpretation of the transaction. The record shows that on February 1G, 1894, Frick wrote to the defendant in error this letter:
“The First National Bank of Arlington.
“Arlington, Oregon, 2/16, 1894.
“J. L. Robinson, Walla Walla. — Dear Sir: Herewith please find judgment against Cecil, assigned, and my note dated at time judgment was taken, bearing interest, 10%, for difference between the two judgments. I made the note payable Aug. 15th, to allow plenty of time, and hope it will meet with your approval. I expect to pay before that time, and stop interest. 1 made sale of mine at Baker City. My payments are to come in monthly, about 88,000 a month, commencing April first. Mays, Wilson & Huntington say ‘that the assignments, when executed, should be attached to judgment-roll docket at the place where the judgment is entered.’ Sign and return my assignment.
“Yours, J. E. Frick.”
*288On February 23, 1894, Frick wrote to the defendant in error, inclosing' him a draft for ¡§12.40, as the “amount you [Robinson] claim as difference between the amount of my judgment and Jiote and your judgment.” February 26,1894, the defendant in error wrote to Frick, in which letter the defendant in error claimed that after deducting from the amount of his judgment against Hoy & Butler the amount of the Cecil judgment, and the amount of Frick’s note to the defendant in error, and the amount of $12.40 transmitted in Frick’s letter of February 23, 1894, there was still a balance due him (Robinson) of $8.04; and the writer added:
“I have waited a long time on this matter, and have not crowded you in any way; and I think that, if you will figure this matter up, you will see I am right. If I am not, I am ready to make it right.
‘■Yours, truly, J. L. Robinson.”
March 6,1894, Frick wrote to the defendant in error this letter:
“The First National Bank of Arlington.
“Arlington, Oregon, Mcfi. 6, 1894.
“J. L. Robinson, Esa., Walla Walla — Dear- Sir: Herewith jilease find 8.04, amount due you as difference our judgments and note. Please assign and return my judgment. You had better send yours also to Lucas to be filed.
“Yours, J- E. Frick.”
In answer to which the defendant in error replied as follows:
“Walla Walla, Wash., March 19, 1S94.
“Mr. .T. E. Frick, Arlington, Oregon — Dear Sir: Your letter on receipt of deposit just received. It has been in the office here, but you did not have it directed right, and by chance I got it to-day. Will send you your judgment all signed.
“Yours, truly, J. L. Robinson.”
It is plain, I think, from this correspondence between the parties, that the assignment from the defendant in error to Frick of the judgment against Hoy & Butler, thereby releasing Frick of his obligation to pay it, was an assignment to Frick as an individual, and was not intended by either of the parties for the benefit of the bank. If so, why was it not made to the bank? There was no difficulty in the way. The assignment could have been made to the bank just as easily as to Frick, if it had been intended for the bank, and certainly that would have been the natural and ordinary course in such event. But what removes any doubt that might otherwise attach to the transaction is the written correspondence between the parties. Not only was the difference between the amount of the two judgments covered by the personal note of Frick and two small sums of money paid by him, but in his letter of February 16, 1894, inclosing his personal note for that difference in part, he explained to the defendant in error why he made the note payable August 15th, and from what source he expected to pay it. That source was not the bank, but Frick’s mine. “I made the note,” said Frick in his letter to the defendant in error, “payable August 15th, to allow plenty of time, and hope it will meet with your approval. I expect to pay it before that time, and stop interest. I made sale of mine at Baker City. My payments are to come in monthly, about $3,000 a month, commencing April first.” This and the other correspondence above quoted between Frick and the defendant in error cannot be reconciled with the *289claim that tlie assignment from tlie defendant in error of his judgment against Hoy & Butler was to Frick for the benefit of the bank; but, on the contrary, it unmistakably shows, iu my opinion, that the assignment by tlie defendant in error to Frick of the Hoy & Butler judgment was to him as an individual, and was so intended by both parties thereto, Such an assignment to Frick did not. constitute any consideration for an assignment by Frick, for the bank and in its name, of its judgment against the defendant in error. The court below therefore erred in instructing the jury as it did that:
“To constitute a sufficient consideration to give validity to the contract, it is necessary that tlie bank should have received consideration, or that Robinson should have parted with something that would constitute a consideration. There must have been either something moving to the bank, or something moving from Robinson, to constitute a good consideration io make the transfer legal, and it is immaterial whether it is one or the oilier, it must be one; hut, if Robinson parted with something of value in consideration of this transfer, it lias the same effect, in law. whether tJhe bank received it or not, that it would if tlie bank received something."’
It is not pretended that Frick was expressly authorized to make the assignment to the defendant in error of the bank’s judgment against Cecil. Such authority was attempted to be shown by showing that he had the management of the affairs of the bank, and that he was permitted by the directors to appear to the public as the head of the institution; and, moreover, that the board of directors, by its silence and failure to repudiate the assignment, in effect ratified it. The answer to all of this is that the defendant in error was not an innocent party relying upon ostensible authority in Flick, and in good faith accepting through his hands the bank’s judgment, for value given tlie assignor; but, as has been seen, the very proposition made to the defendant in error by Frick for the exchange of the judgments, and afterwards (’inbodied in the correspondence between the parties, carried notice t o I he defendant in error not only of the possible want of power in Frick to mala» the assignment of the bank’s judgment, but direct and positive notice of such want of power; for he knew that: the assignment he made to Frick of his judgment against Hoy & Butler was to Frick for his own individual benefit, and the law thereupon charged him with notice that such an assignment constituted no consideration for an assignment bv Frick of a judgment belonging to the bank, of which he was the vice president and acting president. Wee, in this connection, West St. Louis Sav. Bank v. Shawnee Co. Bank, 95 U. S. 557; U. S. v. City Bank of Columbus, 21 How. 356; Bank v. Dunn, 6 Pet. 61; Flannagan v. Bank, 56 Fed. 959. For the reasons stated, I think the judgment should be reversed, and the cause remanded to the court below for a new trial.