Stromberg-Carlson Telephone Mfg. Co. v. Simmons

199 F. 256, 1912 U.S. Dist. LEXIS 1171

• Court: District Court, N.D. Georgia
• Decided: August 29, 1912
• Status: Published

Opinion

NEWMAN, J.

This case is now heard on exceptions to the report of the special'master.- The report shows the character of the case, the questions involved, and the facts necessary to an understanding of these questions without restating them.

[1] There are but two questions involved as the case now stands. The first question is the right of complainant to have a reformation of the notes given to it by the defendant Simmons and an accelerating clause added, which it is alleged, it was the intention of both parties at the time the notes were made to embody in the same. The second is made by the contention of the defendant that this suit was prematurely brought. The master found against the defendant on both of these questions. As to the first question, that is the right of reformation, there can be no doubt of the duty of the court to confirm the report of the master. The issue was one largely of fact with some conflict in the evidence, and it can hardly be questioned, it seems to me, that there was evidence to sustain the master’s report.

[2] The special master’s finding, he having been selected by1" the parties and appointed by consent, is entitled to the weight of the verdict of a jury. The parties agreed on Mr. Slaton, an able lawyer, as special master, and the case was referred to him. In effect, I think the language of Mr. Justice Field, in Kimberly v. Arms, 129 U. S. 512, 9 Sup. Ct. 355, 32 L. Ed. 764, is applicable here. It is as follows:

“But when the parties consent to the reference of a case to a master or other officer to hear and decide all the issues therein, and report his findings, both of fact and law, and such reference is entered as a rule of court, the master is clothed with very different powers, from those which he exercises upon ordinary references, without such consent: and his determinations are not subject to be set aside and disregarded at the mere discretion of the court. A reference by consent of parties of an entire case for the determination of all its issues, though not strictly a submission of the controversy to arbitration, a proceeding which is governed by ■ special rules, is a submission of the controversy to a tribunal of the parties’ own selection, to be governed in its conduct by the ordinary rules applicable to the administration of justice in tribunals established by law. Its findings, like those of an independent tribunal, are to be taken as presumptively corroct, subject, indeed, to be reviewed under tlie reservation contained in the consent and order of tlie court, when there lias been manifest error in the consideration given to the evidence, or in the application of the law, but not otherwise.”

Even if it be not such a reference as there contemplated, error on the master’s part must be plain and manifest.

The simple question was, Did the parties, by mutual' mistake, omit the accelerating clause from the notes? And the master, after a full hearing of all the evidence which could throw light on the question, decided that they did. There is no legal ground for disturbing his finding.

[8] The conclusion of the master on the next question is stated by the master as follows:

“There are three deposits of bonds on which respondent claims an implied indulgence which would render the suit premature: $09,000 of bonds not covered by the contract of July 11, 1907, or the notes sued on, transferred as additional security to complainant on November 17, 1908 (see page 101 of the master’s report of the evidence); $13,000 of bonds pledged in February, 1909 (see page 101 of the master’s report of evidence); $(¡,000 of bonds transferred to complainant October 11, 1909 (see page 124 of the master’s report of evidence). Doubtless the deposits were made with the hope of indulgence, and McCanne thought such was the hope of Simmons, but McCanne denies any promise of indulgence, and the express terms of the pledge exclude indulgence. In his brief respondent claims a right, of indulgence for five years, but tlie deposit of bonds was followed up to the very date of the suit by letters from Mr. Simmons, admitting the right, of the complainant to sue for the entire indebtedness and negativing the possibility of reliance by respondent on any indulgence. The very last deposit, of $6,000 of bonds was for the purpose expressly of forcing an exchange of bonds, as provided by the agreement of July 11, 1907. I must hold that, the deposit of bonds created, neither expressly nor impliedly, any right of indulgence or extension of time of payment.”

The facts found by the master on this subject, as will be seen, are: (1) The three deposits of bonds, $69,000; $13,000 and $6,000, aggregating $88,000; (2) the further fact that Simmons made these deposits with the hope of indulgence by reason thereof; (3) that McCanne, acting for the complainant company, knew that Simmons hoped for such indulgence, but denied any promise of indulgence, and that the express terms of the pledge exclude indulgence; (4) and, finally, that letters written by Simmons, up to the very date of the suit, negative the possibility of his having relied on such indulgence.

This states succinctly the case made by the master’s report, and I am satisfied that there is sufficient evidence to justify and sustain this finding. There was clearly no express agreement for an extension, and the master seems to he supported by evidence in finding that there was nothing from which an agreement to extend could be implied. Assuming that the master has found the facts correctly, under the law there would he no right to postponement. I do not discuss the numerous authorities cited pro and con, but they are quite fully collated in 7 Cyc. 894, 893. It may be proper to remark, however, that there was some indulgence of Mr. Simmons by the complainant, because the last deposit of bonds was in October, 1909, and suit was not brought until May 17, 1910.

Very able and earnest arguments were made by both the counsel arguing this case for the defendant on this feature of the case, and I was very much impressed by them, and have consequently given the evidence and argument careful examination and much thought; but in any proper and reasonable view of the facts I am constrained to hold that the special master-was justified in finding that there was no legal obligation, expressed or implied, on the part of the complainant to forbear suit at the time the suit was brought. What occurred in connection with the coupon-clipping agreement adds nothing to the right of the defendant in this respect, so far as I can see. I am compelled to overrule the exceptions to the master’s report, and to confirm the same.

A decree of reformation will be entered in accordance with the master’s report, and also a decree for the sum named therein, less the amount to be credited by reason of the recent receipt by complainant of interest, which, in a stipulation filed by it with the court, it is conceded amounts to $13,125.