Bunday v. Huntington

TRIEBER, District Judge [ 1 ] (after stating the facts as 'above). While the court, sitting as a jury, made only a general finding of all the issues in favor of the plaintiff, the request for special findings made on behalf of the defendants, and which was by the court refused, and proper exceptions saved, enables us to review the evidence for the purpose of determining whether it was of such a nature as to make it the duty of the court to make these findings, and whether the refusal to do so is reversible error. It is only in the absence of any request’to find facts specifically, or to find for the plaintiff in error generally, that a general finding by the court, sitting as a jury, has the effect of a general verdict by a jury. National Surety Co. v. United States, for use, etc., 200 Fed. 142, 118 C. C. A. 360. As the defendants, the plaintiffs in error, requested special findings, which, if made by the court, would entitle them to a judgment, it is our duty to examine the evidence for the purpose of determining whether the court erred in refusing to make these findings, or such of them as would entitle the defendants to a judgment in their favor. It will be noticed that the findings asked by the defendants are/eally in the nature of conclusions of law. There were other requests for findings of facts made by the defendants which, in view qf the conclusions reached by us, it is unnecessary to notice in this proceeding. [2] If, upon an examination of all the evidence, the judgment of the trial court was for the right party, it is the duty of the appellate •court to affirm it, even if a wrong reason was assigned therefor. Latting v. Owasso Mfg. Co., 148 Fed. 369, 78 C. C. A. 183. The insolvency of the bankrupts at the time this transaction took place, and that the defendants had reasonable cause to know that fact, is not disputed. [3] The original contract made on April 14, 1909, between the defendants and the-bankrupts, provided for a mortgage to secure the unpaid purchase money, amounting to $5,000, on the stock of. goods sold, and that 15 per cent, of the amounts realized from sales of said goods should be applied on the note; that this 15 per cent, should be paid by the bankrupts to the defendants on the 1st day of each month until the same is fully paid or until such time when the note shall become due and payable in full. It also contains a provision that the bankrupts shall insure said stock of goods to the amount of $5,000; also, that “the stock in said store shall not be reduced more than $2,000 in value of the stock of goods now on hand, and that no goods shall be sold except in the ordinary course of retail trade, as shall be provided in said mortgage.” The note was to become due five years after date. [853] Each of the parties was to deposit in the Bank of Bruce, S. D., $200 to be forfeited by either party “not living up to this contract.” The trade was finally consummated on April 26, 1909, $3.,000 being paid in cash and a note for $5,107 executed by the bankrupts, and the mortgage, hereinbefore set out, executed by them for the purpose of securing the note for the unpaid purchase money. It will be noticed that the mortgage differs in several material respects from the agreement, and is much more favorable to the defendants than the terms of the original contract entitled them. It contains every obligation agreed to be assumed by the bankrupts under the contract except the promise to insure the stock of goods for the benefit of the defendants. It contains the following provisions not required of them in the executory contract: While the contract only requires a mortgage on the goods sold, the mortgage includes all after-acquired goods of the bankrupts. Under the contract only 15 per cent, of the amount of the sales of “said goods” was to be applied to the payment of the note on the 1st day of each month, and that the stock of goods should not be reduced more than $2,000 in value of the stock now on hand, the mortgage provides that: “The mortgagors shall make daily deposits of all moneys and proceeds from said sales, and shall on tlie first day of each month make a just and true account to the mortgagees of all sales made, and the proceeds of all sales shall on the first day of each month he applied to the extinguishment of the mortgage indebtedness mentioned herein, provided, that out of said proceeds the mortgagors shall replenish the said stock of goods and keep the said stock of goods at its present value; provided further, that if the said stock of goods be reduced below its present value of §8,107.00' all of the proceeds of such sales shall bo applied to' the extinguishment of the mortgage indebtedness, and provided further, that at no time shall less than 15 per cent, of the monthly sales be applied to the payment of this mortgage.” The mortgage therefore varies in several respects from the contract, and is much more favorable to the defendants, but, as before stated, omits the obligation on the part of the mortgagors to insure the goods for the benefit of the mortgagees. Assuming, without deciding, that the provision to insure contained in the contract gave the defendants an equitable lien on the proceeds of the insurance policies, and that this equitable lien is superior to the rights of the plaintiff as trustee in bankruptcy, although the mortgage', which was of record (the contract was not recorded), fails to show it, the judgment of the court is, in our opinion, correct. Whenever an executory contract is executed by a new contract in writing, the latter is presumed to express the final agreement of the parties, and conditions in the former agreement not included in the last, nor reserved or continued by its terms, are, in the absence of fraud, or mistake, deemed waived. 'And this is especially true when the last contract is more favorable to the party complaining than was the preliminary contract. Andrus v. St. Louis Smelting Co., 130 U. S. 643, 647, 9 Sup. Ct. 645, 32 L. Ed. 1054; American Colortype Co. v. Continental Colortype Co., 188 U. S. 104, 108, 23 Sup. Ct. 265, 47 L. Ed. 404; Grand Trunk W. Ry. Co. v. Chicago, etc., R. R. Co., 141 Fed. 785, 73 C. C. A. 43; Wheeden v. Fiske, 50 N. H. 125; Ford [854] v. Smith, 25 Ga. 679; Ellis v. Lockett, 100 Ga. 719, 28 S. E. 452; Parmly v. Buckley, 103 Ill. 119; Slocum v. Bracy, 55 Minn. 249, 56 N. W. 826, 43 Am. St. Rep. 499; Hubachek v. Brown’s Estate, 126 Minn. 359, 148 N. W. 121; Keator v. Colorado Coal, etc., Co., 3 Colo. App. 188, 32 Pac. 857. [4] In addition to this, the construction of the mortgage by both parties evidently was that there was to be no insurance for the benefit of the mortgagees; for, although more than a year had elapsed since the execution of the mortgage, none of the insurance policies were made for the benefit of the defendants, but all were made payable to the bankrupts. This was a practical construction of the last contract by the parties and will be given effect by the courts, even if there was an ambiguity. Barber Asphalt Paving Company v. City of St. Paul, 224 Fed. 842, - C. C. A. -, decided at the present term of this court. The judgment is affirmed.