93 F.2d 196 | 5th Cir. | 1937
On an involuntary petition filed June 11, 1930, Norman H. Waters was adjudged a bankrupt on June 18, and a trustee was later appointed. On September 12, 1932, the appellant, Bankers Mortgage Building
Appellant still insists that the cross-bill praying a cancellation was a matter for a plenary suit and is not within the summary jurisdiction of the referee. Appellee, contending that the summary jurisdiction extends to ascertaining what liens are on property in the trustee’s possession, moves to strike the narrative statement of the evidence and the assignments of error raising questions of fact because the concurrent findings of referee and judge cut off inquiry into such questions. We think that the referree went too far in attempting to decree a cancellation of the mortgage summarily; but, since the evidence was all reported stenographically and went up to the judge along with the documentary proof and was fully considered by the judge, who made his own decree, the case has had just the treatment it would, have had if a plenary bill had been filed, been reported on by a master, and then considered by the court. The referee made full findings of fact and conclusions of law, as a master would do, and the appellant elaborately excepted to them as if to a master’s report. We will treat the case as a controversy arising in bankruptcy by intervention and decided by the judge, review of which on appeal as in equity opens up questions of law and fact.
The narrative of the evidence duly approved by the judge will be considered. The assignments of error are prolix and overnumerous, but we understand what questions they seek to raise. Some of the findings of fact are asserted to be without evidence to support them, or contrary to all the evidence, and we must examine them notwithstanding the presumption of correctness that attends concurrent fact findings by master and judge.
There is no dispute that the bankrupt owned the land, more than a hundred acres, and in the early part of 1928 conveyed it to his wife. An old house upon it was afterwards repaired and enlarged at a cost of over $30,000 to make a handsome home in which they lived. Part of the money to make the improvements was obtained in February, 1929, on the mortgage in controversy for $25,000 made to the Building & Loan Association by Mrs. Waters as “borrowing stockholder” but joined in by Waters as husband. As a part of the loan transaction, the insurance in controversy was required to be taken out, each policy having attached to it a-mortgage clause in favor of the Building & Loan Association and making the loss payable to it as its interest might appear.
The policies were in the name of Mrs. Waters, and presumably paid for by
It follows that, even if devious means and untrue statements were used to get the insurance money, after the bankruptcy proceeding was filed, into the hands of the Building & Loan Association and to keep it out of the bankruptcy court, as the referee found, no wrong was done the trustee. He had no right to the money. True, he represented both the bankrupt and the creditors, but neither had any right to the insurance money. The entire transaction was valid as against the bankrupt, and the only right of the creditors was to get the land itself for subjection to their debts. That the trustee has accomplished by the decree of March 25, 1932, having then relaxed his effort to pursue the insurance.
It follows, too, that if Mrs. Waters, the owner of the insurance, has been injured by any failure on the part of the Building & Loan Association to collect all that should have been collected, the right to complain is in her. It is only because the mortgage is confessedly good against his land for any balance due, and that an offset of the claim of Mrs. Waters against the Building & Loan Association might reduce that balance, thati the trustee could have any standing to complain. Assuming that he can assert her right and without making her a party, he shows no wrong done her. The Building & Loan Association collected and credited all that she was entitled to. The policies each contained a provision that in the event of disagreement as to the amount of the loss it was to be ascertained by two competent and disinterested appraisers, one each selected by insurer and insured, who themselves should select á competent and disinterested umpire, that the appraisers should estimate and appraise the loss, stating separately the sound value and damage and, failing to agree, should submit their differences to the umpire and that the award in writing of any two should determine the amount of the loss. Mrs. Waters in person, along with the representative of the insurers, signed a written nomination of appraisers under this provision. The appraisers on May 10, 1930, took a proper written oath and selected an umpire who also took a proper oath. On May 22d a written award in due form was signed by one appraiser and the umpire, fixing the sound value at $25,288.93 and the damage at $23,797.93. There was a three-quarter value clause in each policy, which made collectible $18,966.74, the amount proved for and collected by the Building & Loan Association, expressly in
This was not a true arbitration in which a formal hearing was due, but was rather an appraisement of two subject matters, of a building as sound and of the salvage left, by persons selected as experts, two of whom were acquainted with the building in its sound state and all of whom had photographs of its exterior and the floor plans and specifications by which it was built. They could and did see the salvage for themselves. There was no need to swear witnesses or the like. Their expert judgment was what was expected and what was given. The insured knew of the proceedings and furnished all the information she wished to. The result ought to stand. Phoenix Ins. Co. v. Everfresh Food Co., 8 Cir., 294 F. 51; American Steel Co. v. Fire Ins. Co., 3 Cir., 187 F. 730; Glens Falls Ins. Co. v. Garner, 229 Ala. 39, 155 So. 533. This award was not incomplete or absurd on its face as in Continental Ins. Co. v. Garrett, 6 Cir., 125 F. 589, and Aetna Ins. Co. v. Murray, 10 Cir., 66 F.2d 289. The appraisers' did not refuse information from the insured or omit important items of value as in Aetna Ins. Co. v. Hefferlin, 9 Cir., 260 F. 695, and St. Paul Fire & Marine Ins. Co. v. Tire Clearing House, 8 Cir., 58 F.2d 610. No attempt to make a compromise acceptable to the parties instead of an appraisement according to their judgment is presented, as in St. Paul Fire & Marine Ins. Co. v. Eldracher, 8 Cir., 33 F.2d 675. All these cases recognized the rule which we apply that every reasonable intendment and presumption is in favor of an award of appraisers selected to determine the value of property lost, and it will not be vacated unless it clearly appears that it was made without authority or was the result of fraud, or mistake or misfeasance of the appraisers. That the court may think it should have been for more or less is not enough. The referee’s finding that this award was not binding is, in our judgment, without evidence to support it.
No issue was tendered in the pleadings about usury, but the referee took evidence touching the corporate organization of appellant, and found that it was not a true building and loan association and not en
Judgment reversed.