Anderson v. Tway

v. TWAY. ANDERSON

No. 9250. Appeals, Circuit. Sixth Court of

Circuit

June SIMONS, Judge, dissenting Circuit

part ef- present case the result of recover of the bank’s receiver to fort by Tway $50,000 promissory given the bank to enable 2,000 shares the col- agreeing accept sole the stock Cincinnati, Ohio Marx, of S. Robert lateral for note. When both the Harry (Robert Wood, Marx, Frank E. S. failed, pay- and the bank refused Ginter, Nichols, Wood, Marx & Kasfir, and fol- which ment and defended the suit Ohio, for Cincinnati, brief), on the all of appellant. lowed, of giving on the that the Banco stock the note and the of single a constituted transaction into Ky. Louisville, Dawson, of Charles I. the induced to enter reason of Hobson, I. Charles (Woodward, Dawson representing falsely in fraud the bank of Conner, Joseph and Dawson, Verser J. to him its financial ing in status and conceal- the Louisville, on Selligman, Ky., all of it, impairing him material facts appellee. brief), for important being such because the facts SIMONS, McAL- HICKS, and Before greater part of Banco’s of assets consisted Judges. LISTER, Circuit sub- stock in bank. The issues were jury, a for mitted to was returned verdict upon trial, a motion for new based SIMONS, Judge. Circuit evidence, overruled, newly discovered and My agree with views all of brothers judgment followed. respect the my except expressed herein of The receiver assails the defense which, in certain evidence admission of grounds. says numerous fraud on He judgment, error to and receive there was al- proof no susbtantial prejudicial receiver to the cause of leged misrepresentations or con- fraudulent of require and remand to cause They reversal cealment; that fraud may not asserted retrial. Court District only by way a defense to a note of but that the disagree also with the view separate damages; counterclaim suit evidence discovered submitted to alleged misrepre- that sentations, concealment, knew that the upon rehearing, petition court had promotion of bearing upon re- as to material issues jury Banco and sale its ultra quire upon to the a re- its submission powers knowing- vires the of the bank and re- lollows, therefore, trial. ly participated; that in rati- event he spect my opinion is to such matters the acknowledged liability fied and be- after own will not control decision. situation; coming aware of true This the latest case to us in reach defense is barred in con- because long involving the series of controversies position flict with taken him as a de- Ken- activities National Bank of Abbott, supra, v. fendant Anderson tucky Banco-Kentucky Company, and the stockholders’ assessment suit. re- others, including, among derson, Cir., Atherton An- v. challenges ceiver also because judgment 518, 302 6 86 F.2d reversed trial errors admis- court 500; U.S. 58 82 S.Ct. Ather- L.Ed. incompetent prejudicial sion of dence, evi- Anderson, Cir., 883; ton 6 99 v. F.2d An- errors in instructions Abbott, Cir., derson re- and the court’s abuse of discretion over- 321 U.S. versed Laur- ruling upon the motion for new trial based Anderson, Cir., ent v. 70 F.2d 819. While newly discovered evidence material to the liability cited cases involve of of- involved. issues ficers and directors the bank for viola- tions the National Banking law or for principles familiar Under we con negligence, liability and double Banco- light sider the most favora Kentucky shareholders, prevailed and its party because ble who at the trial. ownership opinions Banco-Kentucky incorporat of bank Company history therein tell the July and the ed under laws of Del operations, explain pur- nature of its prospectus It issued a setting aware. forth pose plan creation, of Banco’s be exchanged and so its stock would for out necessity free us of repeating standing Kentucky much stock Bank National story as it bears the instant the Louisville Trust Com controversy. pany, represented participation trustee $4,000,- capital shares bank which showed a certificates, rate of. two $2,000,000, undivided 000, surplus with an of bank price Banco for one share profits $235,000. He approximately each subscription original $25 for- Thie- plan no information for the story as to Tway’s is that of its shares. lifelong financial bank, concerning mation of Banco or its man, president vice habitually except what derived from structure judgment friend whose representation. July prospectus matters, began and Thieman’s sought important cir- He knowledge had no of the facts him in the August to interest or purchase of 1929 respect- subsequently him cumstances disclosed stock, giving im- impaired ing the assets of the possibilities glowing description of the pairment vitally value of affected in transactions company engage able Ban- its of him shares and the value furnished therefore prohibited He to banks. renewals co executed him stock. prospectus, advised three copy a with note, one being the of his the money original because last the he did not need At involved, purchase here dated October him the entire bank would lend paid interest stock, a time the of each renewal he price security of the on the maturity. four date of He to the quarterly received had subscribed Chicago house investment the per and dividends each on 250,000 of share $400 for at $25 shares 2,000 the shares last October more, that after 1st wanted and October, his note the 1930. When renewed pay than for to' more $25 would have dividends, in- more yielded Thie- or received he had no to October stock. 1st 2,- con- concerning formation bank and its agreed to take the and importunities man’s was dition than had at the time he transaction Banco. The 000 shares original and note. there the stock executed his bank. at the consummated blank, subscription ex- signed a bank, improvident by The loans made the for bank note to the months’ ecuted a four permitted Ken- great to the the overdrafts with $50,000, assignment Company, tucky the the Wagon Manufacturing it, a and attorney power to transfer Company, others, Herald Post and Banco-Kentucky payable to check Company, counter Realty to Consolidated loans were $50,000. papers All of the for Wakefield, Club, be- Kentucky Jockey and clerk who the discount handwriting of National yond by limit authorized payee name of stamped the Law, detailed elsewhere Banking are purpose kept for a stencil check with Anderson, (Atherton supra), and need stamped Banco’s bank, thereon and by the reports So are the not be of the National Tway’s purchase also restated. The bank credit- the bank. to prior endorsement to Bank examiners pro- with the account Tway’s checking ed Banco and the the note; charged with it ceeds of the check; by warning sent bank letters of Deputy to the with Banco’s account and credited Treasury. Comptroller power subscription and $50,000. Tway’s know, warnings, reports and we These were bank, by bank to attorney delivered were Brown, president concealed Company Banco’s as Louisville Trust from officers from the directors and certificates as temporary agent, transfer It is conceded in his confidence. bank, per- to the delivered were issued knew of them nothing Thieman substituted, certificates, manent impugned. Tway knew good faith is not never the bank. delivered also exchanged his Thieman himself They the certificates. possession Banco participation certificates own stock in bank un- possession remained many and had shares subscribed receiver, and appointment til the thereafter exchange to those received in addition possession passed to Indeed, proof for certificates. dis- receiver. par- exchanged that Thieman closes bank Banco ticipation and directors of the certificates for officers They Banco. for an additional 6480 shares formation of subscribed promoted argued by re- participation per certifi- it is share. So exchanged their $25 all in- of them since actionable fraud must stock and most ceiver that clude an cates Tway’s only in- its intention to deceive as shares. one of additional bought elements, en- bank condition of as fictitious to the formation reputation can reputation, tity, have such intention general itswas directors, because of deceit statements of be attributed its officers Thieman Thieman, published agents, fail. statement the defense must and the repre- reality, worthless In Banco received to deceive did intend Wagon Company which noth- concealment, asset sentations or realized, ultimately transaction ing was could not. —a characterized bank examiner now, very general It is adding assets “washed sale” nothing knowledge may attributed ly held that permitted of Banco. was also representations persons making false later, October, year show that duty their where it circumstances $600,000 Banco borrowed representations are true whether such know Mur- the worthless means they false, have or where or ray Company debenture notes Rubber p. 127. knowing truth. Am.Jur. $20,000 participation one in the note immunity Culpable furnishes ignorance Humphrey insolvent, who had died representations concealment. false worthless, proved these also assets 883, up Anderson, 99 F.2d In Atherton v. having transaction been to be a fraud held cases, held many we on the consideration Ban- a suit the receiver of duty the directors been it to have against Ban- co bank. receiver of the facts have known the the bank to Kentucky co Co.’s Receiver v. National they ex they them had known would have Bank Kentucky’s Receiver, Ky. activi proper supervision over ercised permitted S.W.2d 357. He was also Upon there the record ties of the bank. 1929, November, show that in officers they permitted to excuse were not disclosed of bank borrowed for New Banco in negligence charge of themselves from $1,000,000 York on its collateral which it they What by deceived. saying were did, did not need but which bank con representations is Thieman’s or true of money deposited caused the to be in the published equally true is of the cealment bank to the credit of Banco. He fur- was offi in the statements issued name permitted ther show to losses oc- which proclaiming and directors of bank cers after curred of Banco bank stock con its sound condition. Since purchase by Banco of in part of greater of the assets stituted Brighton Company Bank and Trust and the Banco, financial condition knowledge of the Company Pearl Bank Market and Trust Tway. to The the bank was vital real Cincinnati, which substantial losses from Thieman, unknowing, though facts resulted. But neither Thieman nor known, being concealed should have from guarantor bank was a financial suc- justiciable defense to arose a venture, cess neither of the Banco note, an issue of payment with charged knowledge could be with future thereon, and reliance concealment fact as to The could events. transactions narrated far, we jury. So be submitted to to become material fraud charge of agreed. all are upon proof only pursu- they in were previously ance plan of a conceived however, beyond to in- proofs, The went far corporate Banco and to utilize for the bank and Banco the condition 1, purpose, execution of a fraudulent and it October his stock on aspect with this permitted record that I now show that to myself. concern November, the Wakefield line by through over the bank was taken Banco Tway’s original contention that $2,000,000 of a note the execution he was defrauded not concealment Wakefield, purchase of the to Brown from him bought time he $2,000,000, Wakefield from of the true condition of the obligation paid its of which Wakefield out organized pur- that Banco was per- $550,000 bank. He was fraud, to poses including pur- therein a Ken- show that Banco took the pose to mitted tucky Wagon to remove bank from the its bad as- indebtedness Works through out use sets of the funds of Ban- 100,000 by delivering shares of bank co. This undertook to show the re- par $1,000,000, petition suit, with a value of ceiver’s its stock director’s $2,500,000, reports a market value to Cald- in bank by statements examiners’ Company agreement under obviously hearsay, well and pur- based would turn to organization acquisi- the shares over Banco’s pose Caldwell Kentucky Bank of ex- the National assets. tion of such This evidence was against for the bank’s claim change challenged ground on the that the unveri- liquidate Company, to Wagon allegations that claim of a bill are fied not admissible proceeds pleader turn over the net action, to Banco. against another 100 re- from examiners’ doubtful removed assets were also on the subsequent records, operations not com- the bank ports, are though official preconceived made Banco plan, by those who furtherance of petent unless identified cross-ex- the bank restored shares would them in themselves submitting True, the Banco’s but assumed them to have. value he amination. unsound, position might remain had been the rule While it possessed im- than when more so ad bill are not allegations of a unverified paired plan to bank shares. Neither the County suit, Delaware in another missible bank nor remove doubtful assets from the Co., 133 U. & Lock Com’r v. Diebold Safe consummation anything added 674; Rankin 10 33 L.Ed. S. alleged subtracted anything Heirs, 488, Am.Dec. Ky. 12 v. Maxwell’s 9 fraud, and neither Thieman the bank nor where a suit modern is that view charged knowledge can be un- prosecuted in full reliance has been the subsequent manipulations sound of Banco they petition, become allegations aof Tway’s Tway’s purchase. Nor does pleader. Am. against admissible present repudiation dependence on the Farnsworth, 536; City Rockland v. Jur. as fraudulent removal unsound assets party who 36 A. 989. Me. washed Brown’s prejudice cure is, permitted pleading made the subterfuge created sales and must have allegations that his were erroneous. show jury. the minds of the Jarnvagsstyrelsen v. Dexter Kunglig 195; There was no substantial evidence Cir., Nat. Carpenter, First operations subsequent Ex’rs, Ky. Bank v. Wisdom’s Tway’s purchase fur- of its opinion in Atherton 461. Since the S.W. plan on previously conceived therance of the organize Anderson, supra, adjudication part directors of the fraudulent that there was no intent in purpose a fraudulent Banco for Banco, should organization of the receiver of the doubtful assets or to transfer bank it, to by means permitted, been have by and unlawful Banco unsound to allegations in the the error demonstrate manipulation of the funds assets Tway that pleading. his now contends he purpose, A its con- Banco. fraudulent like Ban- allegation upon rely that did riot rules, summation, must, be under familiar purpose re organized co clear, and is by established evidence that That bank. from the assets moving bad that convincing. I the conclusion arrive at was, to submitted issue subsequent to operations the Tway’s that evi there can be and dence doubt inad- purchase were of its prejudicial. thereon was bearing mani- evidence, and that such missible as exam in the hearsay statements with So permitted go to to pulations as were records as official reports. While iner’s they by upon though now relied jury, even not facts to show such may be admissible rights of prejudicial Tway, so were knowledge of the personal within the as are require trial. a new the receiver admissibility re their examiner, doubt I clearly indicated as spect statements should, my the case Since informants, accuracy is whose those important becomes judgment, be retried it Cir., States, 2 Nagle v. United guaranteed. grievances receiv other of the to consider admis statements are 302. If 145 F. light most er. Since breath of rumor faintest then sible that Banco indicates favorable to legitimized evidence may be scandal by was formed officers directors official re it in an by including

merely pro bank, all of whom were interested law. be the This cannot port. organization, the officers moting its that of the de- the same as those above were only was the Banco Not but, scribed, incompetent, bank, insofar as the its office was office of impaired Tway bank bank, assets transaction was com removal fraud, entirely I constitute the have within alleged pleted the bank and materiality. conten agents es- receiver’s as to doubt grave purchase of Tway’s fraud was he that the Banco stock claim of tion the sence were, from the bank of the stock loan in the value was deceived law, separate independ the bulk of the assets of matter of as a constituted transactions, impaired by fail. sold stock been must The bank Banco, that this ent provided improvident him the stock with the it. Without the bank’s loans him reason buy Clearly, money with which to if these overdrafts. negligent

101 purchase. 578, 420; 25 have made L.Ed. 5 4290. But loan lie would not tile Williston disposes receiver’s con- likewise never had the Un- This stock certificate. obliged Tway had a der such that because balance he was not tention circumstances prior being required credited to return Nor return the bank to his it. he loan, his and because the avails dividends. Even in actions affirmative rescind, Page balance to check to Banco did not exhaust his as in v. Belting Co. Co., augmented, purchase loan must Prince 77 N.H. 91 A. transactions, by Taylor regarded independent Lounsbury-Soule Co., v. 106 Conn. applying deposit 159, plaintiff 137 to the withdrawal A. need tender considered, first-in there first-out rule. So return of dividends is entitled where demonstration, get is urges, used back considerably Here the more. money part payment proofs his own Banco show that in- paid out in portion and a loan other terest far more than the amount of purposes. were, The avails of the loan dividends. however, so clearly identified and allocated The fact the bank’s assets purchase to the of the Banco shares depleted not, were loan does application is no room for itself, compel the conclusion that theory. first-in first-out required is to pay the note. There is no novelty in the doctrine that one is who stock, atlhough Banco later guilty of fraud compelled reim valueless, had and market both intrinsic though defrauded party burse even value at the time it was through has not himself benefited the fraud. Tway. The Company, Louisville Trust Oppenheimer v. Harriman Nat. Bank & shares of represented Co., Trust 57 U.S. 81 L. participation exchanged certificates 1042; City Carter, Ed. National Bank v. Banco solvent, and Banco had Cir., 940; City 14 F.2d Wasmann v. Nat. Moreover, Tway cash and other stocks. Bank, Cir., 705; Williams alleged admits before he discovered the Green, Cir., 23 F.2d 796. The case of fraud he could sold his shares have Bank, Ky. 764, Beck v. First Nat. 63 S. profit on the market and realized a important W.2d not determina but $18,000. so, being This the receiver con present tive of issues. That case was Tway, having tends that received value suit given for the investment, his should be allowed to re assigned cover, anything, only if damages at the the bank Kentucky to another bank. The purchase, namely, time of the differ was of court the view was that paid ence between what he atid the value proof by ig fraud Thieman was since he purchase. the time of Hind- bank. norant of true condition of Bank, Cir., man 931, v. First Nat. 6 112 F. however, appear, that the fact does not It Perhaps 57 L.R.A. 108. this would be culpable ignorance that Thieman’s was Tway true if had elected to affirm the con or brought to the attention the court tract damages by and sue for reason of the by Finally, it. is clear was considered it He fraud. could also have elected re decidendi in that case was that ratio scind and equity have sued in for the re National Bank was a that the First holder note, turn though of his he could not do agreed note in due course. is of the It not, both. Such however, election was his promotion beyond Banco was that remedy. exclusive Having neither affirmed powers legitimate of the ul and nor rescinded, he interpose was entitled to Greaney, Deitrick v. tra 309 vires. U.S. upon the defense fraud to a suit 190, 694; D’Oench, 480, 84 60 L.Ed. S.Ct. Contracts, 1523, 5 note. Williston on §§ Deposit Corp., & Co. v. Federal Ins. Duhme 1525; 292, 8 Moreover, 587. § Am.Jur. 62 86 315 U.S. S.Ct. L.Ed. charged being concealment, fraud deceit or Deposit Corp. Vest, Federal Ins. and 6 effect continues until discovery of the Cir., cases, 122 765. F.2d These were all true facts. agreements where secret to evade urges The receiver also provisions that Banking of the National Act Tway is barred from recovering sought agree his were be enforced. Such failure to surrender upon the stock illegal or return ments are considerations dividends. It is true policy. that if he public had Here is but re claimed that it ceived value, consideration which which, retained in a participated transaction he required would be experience, beyond return through it if he knew still in to be possession. his Langdon, authority Pence v. 99 of the bank. U.S. de- But 102 receiv- question was tion. The records knowledge, are nied in errors possession. er’s If there are jury. one for the be doubtless summary White’s there would re that who the law one It is them point opportunity, retrial, upon after payment a note news makes out. may inter defenses be knowledge, of jury to An permitting instruction them, H. collection, E. posed to its waives consider Thieman’s statement whether Bank, 6 Nat. Taylor, Jr., First & Sons v. 250,000 Chicago for fraudulent, brokers had subscribed Flannagan, 898; Cir., Fitzpatrick v. 212 F. shares of Banco was upon 211; L.Ed. 1 27 106 U.S. In probably retrial. would avoided be payments interest. this extends Thie- good view conceded faith 411, 173 Kaplan, Mass. 273 Rosenbloom v. clearly prejudi- man was it erroneous McGowan, 522; N.E. Brummett v. charged cial. Thieman be However upon in reliance Okl. 980. It is P.2d affairs, knowledge of the bank’s urges fraud this rule that receiver Chicago records of transaction when to have been waived also room not available him. There his several renewals made opinion whether the as to difference payments interest several thereon. merely taken had an brokers offer or made is, however, waiv doctrine familiar option. In state- an Thieman’s event convincing proved er clear must competent respect could ment respect provisions only if made with intent to deceive or with contract, frequently it has been held disregard From both truth. recldess consideration, supported by waiver must be jury have he was The should not absolved. Co., Fidelity Surety & Reynolds v. Detroit allowed been to consider the statement 110; Cir., Fidelity Burlew v. F.2d alleged an element fraud. Cir., de Casualty Co., knowledge of fraud at come, then, nied times question I to the final paid interest. case, his note or renewed whether the receiver therefore, one question, became granted should have been a new trial on the con general verdict must be ground whose discovered evidence. Aft- fraud finding that Tway, to include strued er verdict was discovered that fides had not waived. bona been Doubt purchasing some two months after the Ban- ignorance part protestation shares, assigned them co R. C. n newspaper had read con Company, one who articles corporation Coal Sales charges against taining comptroller’s which he controlling stockholder bank, past who but in there were substantial officers other familiar in and with the interests. The receiver

been interested moved for a new statements published financial trial if sold presently equivalent owner of the stock’ consideration entertained, legal paid, damage if constitutes no what even he suffered no precluded supported setting a verdict and was from availing aside himself basis defense of fraud. affida- evidence. vit, replied he stock as that the are to assent ar We unable to the agent for Coal Com- undisclosed the the es- Tway that gument the receiver is of legal and made pany, the contention that as because, claiming topped one fraud as agent undisclosed he alone could be sued Abbott, in Anderson of defendants v. the and, note, sued, rely up- on could supra, or he had asserted that principal. an all defenses available to his True, legitimate purpose. for a he ganized Restatement, 334, Agency 738. The mo- §§ changed position, has has now his so but new trial was denied ground for tion on also True it is that the receiver. did not substantially that new Abbott, findings Anderson that Banco support receiver’s view that purpose, legitimate for a organized and sold bought the stock for his own ac- findings these set aside. But not been have count. decision of basis were not the granting denying Action liability. a mo toas stockholders’ Supreme Court new trial for errors of fact I will retried would be tion were If the case not ordinarily challenge not be reviewed in a federal the receiver’s concerned Glass Cub Fairmont Works v. Fork report the Abbott court. of the accountant 474, 252, Co., 287 U.S. being case, accountant called as Coal L. without frequent A reason that subjected is to cross-examina- Ed. and a witness $218,000 his $473,000 and is motion denying of granting or that Company overdrafts with Sales the court. within the discretion matter purpose $461,000 that 1930. In reaching States, 217 U.S. Holmgren v. United obliged, in order case found himself Ann. 30 S.Ct. L.Ed. against the penalty assessed recover note, how important Cas. 778. It is 25% Company Sales of undistributed because up ever, relied testified he had profits, Judge District and to convince the Thieman, personal friend as his organized us Company the Sales advisor, as an officer of business bank; but merely to purpose for a business and not knowledge of had no permit Tway In the to evade surtaxes. notwithstanding condition of the bank light history I am unable comptroller’s against direc accusations ig- ignore, and which the court should press, notwith tors, published in concededly nore, Tway’s explanation his affairs his own in its standing interest representations receiver, and stock; false to the ownership reason of his trial concededly his untrue evidence sought set-offs that he obtained might below, wholly well' special deposits be incredible obligation his claim; thought jury. Since of be his longing corporation and members concealment, own, upon fraudulent family they reliance though as his his the- ignorance his the infirmities in categorically asserted at trial notwithstanding published purchaser position bank’s that he himself was the his notice- which came to criticisms it shares. interest, renewals, prior payment to his are all matters material These acceptance dividends, entirely rest charge fraud of waiver and in denial its upon per- his own word should be note, payment renewal of inter- appraise accuracy of mitted to his mem- thereon, acceptance est and the divi- ory credibility and the bear- of his evidence upon sup- They dends Banco stock. are in the ing upon issues of case vital ported solely the assertions I light newly discovered facts. himself, jury’s and the verdict ex- granted the think the court should have plained acceptance motion for new trial. accuracy credibility a witness whose memory upon. be relied indicated, could It now already my As are of brothers develops special belonged that the account view were no substantial er- to the R. C. Coal not to evidence, rors in admission and no Company, Tway bought and that Sales abuse of discretion the denial of the company trial, shares for as its undisclosed wherefore, new motion for response agent, and not for himself. In Judgment below must and it is af- petition rehearing, Receiver’s firmed. newly this based discovered Tway, by affidavit, explains habitu- McAllister, judge. circuit ally corporation referred to activities as do, Concurring as I with the result an- they though own were his because of by Judge SIMONS, nounced and with all controlling corporation, interest in the expressed opinion, his views ex- was neither so there intention to deceive cept noted, appears proper therein actually deception in nor substantial examine the claimed error of court his evidence. refusing grant a retrial on Judge accepted The District expla- this discovered evidence. peti- nation in denial of the receiver’s filed, When motion tion for new trial. He the for was not new trial as familiar was are, it ground newly as we in was based the view of the records de- that which, cisions in this discovered my judg- Tway evidence court in revealed that ment, purchased not had the we but Banco stock should take for his un- notice, principal, corporation judicial disclosed Tway’s the extent of a in which stockholder; previous principal in securities and he was the transactions his where- as, experience in demonstration trial predi- of the rela- the defense on had the been tionship company proposition was, between himself on his cated individually, the that operations. learned, stock; in owner stock market We in the testimony quoted C. Tway United States v. R. certain of his Coal Sales was in an Co., Cir., that Tway supporting which, was motion in a affidavit the big operator monthly interrogation, to in answer an stock invest- he had —his ments, name, averaging carried in his own stated that there was no doubt in his its tomarily ordinarily to time referred at the the mind owned stock that he in own, filed and to the Moreover, brief transactions as his purchase. been question, having emphasized receiver, as or as it his for counsel him; and, corpora- bought showed the because newly that the discovered substantially by Tway for owned tion by him, controlled and purchased that stock was the there for that he had considered Counsel principal. his undisclosed fact and, any actual between the squarely before was difference Tway met this issue appears testimony as motion, given. and his sus- a brief to hearing the filed the owner of that he was substantial no the make proposition would tain the that it case, tends company, strongly and the evidence disposition of difference agent purchased to show he the stock as himself purchased for whether had corporation. true that for the It is principal, his undisclosed or on behalf a balance of the bank closed and there was agent an undis- for reason that account, to he which desired his $80.82 all assert entitled to principal was closed against given set off might assert. principal his defenses that claim, stating that proof a filed sworn unques- appears to proposition This personal property and that the fund his ap- but, by appellant; receiving on tioned person any in- corporation had no other or motion, im- appellant pellee’s brief on the although that, terest therein. The fact is and claimed mediately changed theory his name, un- belonged his it stood his it to newly evidence showed that discovered This, would principal. disclosed indi- purchased that had the stock regard with to have made difference thereafter, had, it transferred vidually and claim, if his statement allowance of the question. had corporation in If this profit per- for his own or made not benefit, fact, de- Tway would be without been the object or effect sonal or that, The trial held fense to the suit. court deceiving receiver, it prejudicing upon by if it facts relied considered.the it be fraudulent. difficult to see how would receiver, warrant submission sufficient to claim would have been established The jury, question to with reason be- to it, individually, or whether asserted might honest minds differ lieve that on Ap- agent principal. as undisclosed his obliged matter, grant new it would feel to trial, pellant, proceedings for new trial; that, opinion, was not' it support take testimony asked to to that reasonable that believe motion, and, counsel, set affidavit of case, jury, tried another would or that that issue could forth facts in appellee pur- find that time an examination determined without individually; chased the Clark, Tway’s Tway and an officer com- negatived all circumstances such con- pany. Thereupon, counsel for con- opinion, In the trial tention. court’s it deposition taking sented to the support stated there was little to these witnesses on two different occasions. sup- so much receiver’s contention and to Appellant’s counsel declined then contention, port appellee’s court they upon, insisted theretofore retry would be concluded to futile rely saying they chose not merely entire to submit fact case this statements, and, self-serving aft- witnesses’ question. Such a view seems reasonable. right demanding er to cross-examine Appellant that, now claims view they opportunity refused the offered newly evidence, discovered he has the advantage Such refusal take them. right show that referred cross-examination, proffered well could his stock and stock own, claimed it his the trial court that was no convince trial, contrary present merit in the contention of counsel for re- assertion that for his undis- ceiver. most could be said Appellant, therefore, principal. closed con- present receiver’s contention is that tends is entitled a new trial on Tway’s would affect credibil- new evidence newly discovered that, me, ity matter seems incidental. Tway’s credibility affects a wit- Tway’s answer evi ness. Where discovered the motion trial, principal new included a witness im contradicts affidavit dence portant points, credibility showed that and his wife were and attacks his as the own- corporation witness, in question, ers retrial granting of a the a exception of certain shares of stock evidence of a contradic discovered character, employees, tory matter impeaching names of com- is a pletely managed the company in the sound discretion of the that he cus- rests re- will not court, determination and its discretion. abuse of that without versed Cir., 151. Anderson, Chambers v. tends Newly discovered credibility weight and merely to affect the basis proper not constitute evidence does Timber Butler Morton new trial. for a 884. States, Cir., F.2d v. United Co. case, it of this Under circumstances denial of appear to me does ground of trial on the motion for new would newly discovered way, T abuse credibility of was an affect the district part discretion on the court. opinion. joins

Judge HICKS this McCamey, Pittsburgh, Harold E. Pa. (Dickie, McCamey, Robinson Pitts- Pa.,

burgh, brief), appellant. on the Bloom, George Washington, Pa., appellee, argue. did not a file brief McLAUGHLIN, Before DOBIE and KALODNER, Judges, Circuit District Judge. PENNSYLVANIA SPORIA al. GREY- et LINES, HOUND Inc. DOBIE, Judge. Circuit No. 8497. Sporia (hereinafter Sporia) Pete called Appeals, Third Circuit. Court Circuit Stephen (hereinafter Kosana called Kosana), co-plaintiffs, brought civil a Argued May 1944. against Pennsylvania Greyhound action Lines, Incorporated (hereinafter called Decided 1944. June defendant, Greyhound) in the Common County, Washington Pleas sylvania. Court Penn- sought This action to recover damages injuries alleged to have been Sporia suffered and Kosana as the re- sult of a collision between an automobile Sporia, driven in which Kosana was riding guest, Grey- an auto bus of Greyhound hound. removed the action in- Court the District of the United States Pennsylvania. for Western District of Court, Greyhound sought In the District (or ac- severance of the claim cause of Greyhound tion) Sporia against action) (or cause of of Kosana the claim against Greyhound, Greyhound asked party Sporia he made defendant to (or action) claim cause of Kosana Greyhound. agaiust Court denied the District relief Judge stated: “As sought. Schoonmaker already party Sporia to this Pete action, opinion are of the that he can- we brought on the record as an addi- Grey- defendant.” F.R.D. tional

Case Details

Case Name: Anderson v. Tway

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Jun 12, 1944

Citation: 143 F.2d 95

Docket Number: 9250

Court Abbreviation: 6th Cir.