Court Opinion

ID: 8743780
Source: CourtListenerOpinion
Date Created: 2022-11-26 10:58:45.454219+00
Date Added: 2024-06-11T17:00:32.781868
License: Public Domain

THAYER, Circuit Judge,
after stating the case as above, delivered the opinion of the court.
The trial court appears to have found, in accordance with the contention of Albaugh, the receiver of the First National Bank of Emporia, that the bill of sale dated March 4,1898, which is quoted above in the statement, was executed by C. S. Cross in favor of William Martindale, who at the time was vice president of the First National Bank of Emporia, as trustee for said bank, to secure the payment of a very large sum of money which Cross then owed to said bank. And the principal question which the present record presents is whether there was any legal evidence to sustain such a finding. Three disinterested witnesses testified on the trial that on a certain occasion Martindale, in whose favor all the bills of sale aforesaid were executed, had admitted or stated to them that when Cross executed and delivered to him the first bill of sale, to wit, the one dated March 4, 1898, he said to him, in substance, that he had used a large *822amount of the money of the First National Bank of Emporia, of which he (Cross) was president; that he expected to use more of its money in running his Sunny Slope farm; and that he executed the bill of sale for the purpose of protecting or securing the bank. It is claimed, however, in behalf of the appellants that these admissions or statements of Martindale were improperly admitted in evidence, that they should have been excluded, and that, if excluded, there is a dearth of evidence to sustain the decree of the lower court. As bearing upon this contention, it is to be observed that when the Fourth National Bank óf St. Louis interposed its claim to the fund in controversy, in the form of a .bill of complaint, it made the First National Bank of New York, F. Harvey, and William Martindale parties defendant to said complaint, as well as Morton Albaugh, receiver, and F. O. Newman, who was-the administrator of C. S. Cross, deceased. The New York Bank answered the complaint of the St. Louis Bank by admitting all the allegations therein contained, and joining with' the complainant in its prayer for relief. Martindale, by his answer, also admitted all of the allegations of the complaint, but further averred that the notes held by the St. Louis Bank and the New York Bank represented the individual debts of Cross, he being a mere surety for their payment. Martindale accordingly joined in the prayer for relief which was made by the two banks aforesaid, and asked that the fund now in controversy, which had been realized from the sale of the stock on the Sunny Slope farm, might be appropriated to the payment of the notes held by said banks, because of the execution by Cross of the two bills of sale aforesaid, dated, respectively, July 15, 1898, and November 15,1898. It will be seen, therefore, that the issue raised by the pleadings was whether, in virtue of the two bills of sale, Martindale was entitled to the fund in controversy for the purpose of paying his own obligations which were held by the two banks and by F. Harvey, or whether the receiver was entitled to the fund by virtue of the earlier bill of sale, dated March 4, 1898. It will also be seen that Martindale, Harvey, and the two banks claimed the fund by the same title, and that as between them there was a complete identity of interest. To sustain the issue on their part, Martindale was accordingly called as a witness, for the purpose of proving the execution and delivery of the two bills of sale upon which they relied, dated July 15, 1898, and November 15, 1898, and the circumstances attending their execution. On his cross-examination the bill of sale of March 4, 1898, was produced and identified, and the delivery thereof at the date of its execution was established. Martindale was then asked what was said by Cross contemporaneously with the delivery of the latter instrument, and in reply to such interrogatory he testified that Cross “said he wanted to use $7,500 [of the bank’s money] in the Liebfried matter, and he wanted to make a mortgage or bill of sale to cover that amount.” He was then asked if he had not previously stated, in the presence of various persons whose names were mentioned, that Cross said to him, in substance, when he delivered the bill of sale of March 4, 1898, that he had been using large sums of the bank’s money for the benefit of his Sunny Slope farm, and that he would have to use more money for the same purpose, and that he *823executed the bill of sale for the purpose of securing the bank for such advances. His reply to this question was that he did not think that he made such a statement to the persons named at the time and place stated in the cross interrogatory, but he did not otherwise deny making such a statement. The various persons referred to were subsequently called as witnesses in behalf of the receiver, eaeli of whom testified that Martindale had made such statements to them. Their testimony was to the effect heretofore stated.
ft is urged in behalf of the appellants that the receiver made Martindale his own witness by asking him on his cross-examination what Cross said with respect to the bill of sale of March 4, 1898, when the same was delivered to him; that he was accordingly bound by the statement of Martindale to the effect that it was given to secure the $7,500 used in the Liebfried matter; and that he was not entitled to contradict this statement of Martindale by showing that he had previously given an entirely different account of what was said by Cross when the bill of sale of March 4, 1898, was executed and delivered. We think that this contention on the part of learned counsel for the appellants entirely overlooks the facts to which we have heretofore adverted, namely, that Martindale was himself a party to the action, and that as between himself and the two banks, as well as between himself and F. Harvey, the' other claimant, who also held a note of Cross which was indorsed by Martindale, there was a complete identity of interest. It will be observed that the bill of sale dated July 15,. 1898, which is the one on which the appellants place their chief reliance, purports to have been made for the protection of Martin-dale; that is to say, to save him from liability on a certain bond, and “to pay himself for any paper which he and Cross had made and indorsed.” Harvey and the two banks had no right to or interest in the property conveyed to Martindale which they or either of them could assert, except such as they could assert through Martindale on the principle of subrogation. If Martindale was entitled, as against the receiver, to appropriate the fund in controversy to the payment of his own obligations which were held by Harvey and the two banks, then, and not otherwise, they were entitled to insist that he should exercise this right for their benefit and advantage as well as for his own. In view of these facts, we are of opinion that it was competent for the receiver to inquire of Martindale on his cross-examination concerning the bill of sale of March 4,1898; that by so doing the receiver did not make Martindale his own witness in any such sense as to be concluded by his statements; and that it was competent for the receiver to show afterwards, as against all of the parties who claimed adversely to Mm, the admissions which Martindale (a party to the suit, and the one in whom the adverse right to the fund was vested primarily) had made in the presence of several persons, to the effect that the conveyance of March 4,1898, was made to him, as trustee for the First National Bank of Emporia, to secure whatever indebtedness Gross then owed to the bank, or might afterwards owe to it. We think that whatever objections may have been made to such testimony, even if it be conceded that they were made in such a form as to be reviewed by this court, were properly overruled.
*824In behalf of the receiver it is contended that the decree below may be sustained upon the ground that the trial judge found that the two bills of sale upon which the appellants rely were never delivered by Cross to Martindale in the lifetime of the former, and that they were therefore ineffective; but, without entering into an investigation or a discussion of the evidence on that point, it is sufficient to say that for the reasons above stated we conclude that there was competent evidence to sustain the finding by the trial court that the bill of sale of March 4,1898, was made to secure all of the indebtedness of Cross to the First National Bank of Emporia, and that from and after the execution of that instrument all of his personal property, of every kind and description, except his personal effects, insurance policies, and the contents in his house in Emporia, Kan., stood pledged for that purpose. The-result is that the decree below was for the right party, and the same should be affirmed. It is so ordered.