Washington & Canonsburg Ry. Co. v. Murray

BUFFINGTON, Circuit Judge. [1] In the court below, the plaintiff, Murray, receiver of the Cosmopolitan ■ National Bank, sued the Washington & Canonsburg Railway Company to recover on a note. By stipulation a jury was waived and the case tried by the judge. He found a verdict for- the plaintiff for the balance due on such note. On entry of judgment thereon defendant sued out this writ. Where, as here, a case is tried by a judge, the findings of fact by a court are conclusive, unless there was no evidence to support them. Hathaway v. First Nat. Bank, 134 U. S. 494, 10 Sup. Ct. 608, 33 L. Ed. 1004. We have, however, carefully considered all the proofs in this case, and we see no reason to differ from the conclusions reached by the judge below in his full and careful opinion. The negotiable note in question was given by the defendant company to its own order and was indorsed by it. Its execution and indorsement was by Hagan, as treasurer of the company, which office, as well as that of secretary, he held. The bank received it before maturity, and therefor surrendered notes of other companies it then held. There being evidence tending to' show the bank was a holder for value before maturity, the court’s finding to that effect is conclusive. [2] Such being the case the bank was, as held by this court in Young v. Lowry, 192 Fed. 825, 113 C. C. A. 149, entitled to recover, unless it was shown that in the transaction by which title was obtained, it had knowledge of facts which would render it invalid, or was guilty of bad faith, and the burden of proving such defense rests on defendant. [3] In that regard it is alleged the note was invalid because it was signed by the treasurer of the defendant, that a by-law of that company provided that notes'could only be executed under the joint signatures of the president and treasurer, and only when authorized by the board of directors, and that the note was an accommodation note for which defendant received no value. We are satisfied, however, that there was evidence before the court tending to warrant the finding the court made, namely: “The evidence in this case does not prove that the said bank had any actual knowledge or notice of any infirmity in said note, or defect in the title of T. Lee Clark, who was negotiating the same, or knowledge of such facts as made the act of the bank in taking tie said instrument amount to bad faith.” The by-law was not known to the bank; it was never acted on by the company; the bank had for two years held a note of the defendant signed in the same way; several hundred notes executed in the same way to third parties, and paid by the defendant, were given in evidence. Messrs. Kennedy and Torrance, who owned practically all of the stock of the defendant, and who were directors and president and vice president, respectively, of the company, indorsed this note, and at the same time executed a sealed guaranty thereof to the bank. The proof was that no meetings of the directors or stockholders were held; the whole operations of the company being directed by the two said [448] stockholders. Far from showing any knowledge by the bank of an infirmity in this paper we think that all the facts that were known by it were calculated to inspire confidence in the integrity of the note. What we have said, we think, justifies our conclusion that the judgment should be affirmed, and avoids our entering into a protracted discussion of all the evidence.