John T. Porter Co. v. Java Cocoanut Oil Co.

4 F.2d 476, 1925 U.S. App. LEXIS 3016
CourtCourt of Appeals for the Ninth Circuit
DecidedFebruary 16, 1925
DocketNo. 4139
StatusPublished
Cited by8 cases

This text of 4 F.2d 476 (John T. Porter Co. v. Java Cocoanut Oil Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
John T. Porter Co. v. Java Cocoanut Oil Co., 4 F.2d 476, 1925 U.S. App. LEXIS 3016 (9th Cir. 1925).

Opinions

RUDKIN, Circuit Judge.

By an instrument in writing, bearing date April 26, 1920, Warren R. Porter pledged to the John T. Porter Company 120 shares of the capital stock of the Pajaro Valley Savings Bank and 60 shares of the capital stock of the Pajaro Valley National Bank to secure the payment of his indebtedness to the Porter Company, amounting to the sum of $19,000, evidenced by a promissory note bearing date December 12,1919. The original date of the note was December 12, 1920, but this was changed to December 12,1919. On the 14th day of September, 1920, both blocks of stock were attached by the United States marshal for the Northern district of California, under and by virtue of a writ of attachment, issued out of the District Court of the United States for that district in a certain action therein pending, wherein Warren R. Porter was plaintiff and plaintiff herein was defendant. On the 25th day of January, 1922, the plaintiff herein became the purchaser of the stock of the two banks at an execution sale under a judgment in favor of the defendant and against the plaintiff in the action wherein the writ of attachment issued. On the 27th day of January, 1922, the Porter Company served written notice on the plaintiff herein that it would sell the stock of the two banks under and by virtue of the pledge agreement to satisfy the indebtedness of Warren R. Porter to that company.

[477]*477’ The present suit was thereupon instituted to enjoin the sale under the pledge agreement, for a decree adjudging the plaintiff the owner of the stock in the two banks, for 'a mandatory injunction commanding the two banks to issue certificates to the plaintiff for the stock so purchased, and for general relief. Upon final hearing the court, by its decree, adjudged that the plaintiff was the owner of the stock in controversy, enjoined the sale under the .pledge agreement, granted á mandatory injunction commanding the banks to issue certificates to the plaintiff for the stock in the respective banks, and further commanding the banks to pay to the plaintiff all dividends declared or made payable on the stock after the levy of the writ of attachment on September 14,1920. From this decree the defendants have appealed, and for convenience the parties will be designated here as in the court below.

The sole issue in the case, as presented at the trial, was the question of priority between the attachment levy and the pledge agreement. The court below determined that issue in favor of the plaintiff, and in so deciding ruled that the burden of proof was on the defendants to establish the priority and validity of the pledge. The ruling of the court imposing the burden of proof on the defendants is now assigned as error by them, and they further contend that they were entitled to prevail on the facts regardless of the question of the burden of proof. After setting forth the title of the plaintiff under the execution sale, the complaint averred on information and belief that the defendant Porter Company had no right, title, or interest in the stock, as pledgee or otherwise, and averred on like information and belief that the defendants had conspired together, to the end that the Porter Company would assert a pledge of the stock for the purpose of defrauding the plaintiff. After denying the foregoing allegations, the answer of the defendants set forth affirmatively the claim of the Porter Company under the pledge agreement.

Such was the issue presented by the pleadings. If both parties were here claiming title to the same property, the one under an assignment from the owner and the other under an execution sale against him, it may 'well be that the burden of proof would rest Upon the plaintiff to establish its title by a preponderance of the testimony, because ordinarily a plaintiff must recover on the strength of his own title, and not on the weakness of that of his adversary. But a different situation was here presented; forj notwithstanding the pledge or the date of the pledge, the general property in the stock remained in the pledgor, and that general property passed to the plaintiff by the execution sale. The general owner of the property was claiming it as against one who claimed only a special property therein, or a lien thereon, and in such eases the claim of the general owner will prevail, unless the one claiming the special property, or lien, establishes his claim by a preponderance of the testimony. The rule as to the burden of proof is one of substance, and not of form. It does not depend upon the alignment of the parties, the manner in which they were brought before the court, or the form of the pleadings. For these reasons the general owner of the property was entitled to prevail, unless the special owner established his claim, or pledge, and the court below did not err in so ruling.

We will next consider briefly the sufficiency of the testimony to support the decree. There were but two witnesses to the execution of the pledge agreement, and there was no direct contradiction of their testimony. Both of these witnesses were interested in the result of the suit. Of course, the eourt would not be warranted in arbitrarily rejecting their testimony for that reason alone, nor was the court compelled to accept it implicitly. It was the duty of the court to weigh their testimony in the light of all the testimony in the ease, and give to it such consideration as it was entitled to under all the circumstances. A reference to the opinion of the court below shows very clearly that the latter course was pursued. It is claimed on the one hand that the two witnesses were corroborated, and on the other hand that they were discredited and impeached. No doubt there is a presumption that an instrument was executed on the date it bears, as claimed by the defendants;. but the presumption is easily overcome. The same presumption attached to the promissory note which the pledge was given to secure, yet it is conceded on all hands that that note was not in fact executed on the date it bears. There was testimony to the effect that third'persons had been informed of the pledge before the present litigation arose; but, aside from the inherent weakness of that class of testimony, the court below rejected it as unworthy of belief. It is further claimed that the witnesses were corroborated by entries in the books of the Porter Company.

On the other hand; there was testimony tending to show that the date of [478]*478the Porter note was not changed at the time of its execution as claimed; that there were erasures and alterations in the books of the Porter Company; that there was a failure on the part of the Porter Company to report the pledged stock for the purposes of taxation; that there was no reference to the pledge of the stock in a report made to the United States marshal on October 2, 1920, by one of the witnesses to the execution of the pledge agreement, while his later report made reference to the pledge; that dividends on the stock were paid to the pledgor for some time after the execution of the pledge, and many other circumstances are referred to which it is claimed corroborated or impeached the testimony of the two witnesses. But, without going into further detail, we think it is apparent, from what we said, that the question involved was purely one of fact for the consideration of the trial court, and that the findings of that court, based on conflicting testimony taken in open court, will not be disturbed on appeal: Boss v. United States (C. C. A.) 290 F. 167; Taylor v. Nevada Humboldt Tungsten Mines Co. (C. C. A.) 295 F. 112.

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Bluebook (online)
4 F.2d 476, 1925 U.S. App. LEXIS 3016, Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-t-porter-co-v-java-cocoanut-oil-co-ca9-1925.