Scott v. Saunders

DONAHUE, Circuit Judge (after stating the facts as above). It is now insisted upon the part of the appellant that, notwithstanding the sole assignment of error was directed against that part of the decree in favor of the Mutual Life Insurance Company, it appears from this record there was an absence of indispensable parties in the District Court, and that, while this is not assigned as error, yet it is a plain error, which, under rule 11 (202 Fed. viii, 118 C. C. A. viii) should be noticed by this court. This claim is based upon the proposition that by reason’ of defect in parties, the decree of the court will not protect the appellant from any claims that may be made by the widow, Clara M. Saunders, or John S. Wilson, administrator of the estate of Robert M. Saunders, against the fund in his hands as liquidating officer of the Struthers Savings & Banking Company. No question was presented to the trial- court as to the absence of indispensable parties. If the allegations of the petition are true, then neither the administrator of the estate nor the widow of Robert M. Saunders, deceased, had any interest in the subject-matter. The material allegations of the petition were put in issue by the appellant, Scott, and* submitted upon evidence to the court for adjudication. The court found all of the allegations of the petition to be true, except as to a trifling difference in the amount actually received upon these policies by the Struthers Savings & Banking Company. The allegations of the petition are given at length in the statement of this case. It is sufficient, therefore, to call attention to the fact that it was averred in the petition that the administrator, John S. Wilson, the widow, Clara M. Saunders, R. W. Healey, and the Struthers Savings & Banking1 Company entered into a fraudulent collusion and conspiracy to defraud the estate of Robert M. Saunders, deceased, and to defraud the plaintiff, the mother of the defendant, of her distributive share in that estate, and that by reason of this fraudulent collusion and conspiracy the Struthers Savings & Banking Company came into possession of $25,-000 belonging to the estate of Robert M‘. Saunders, substantially one33 half of which the plaintiff was entitled to receive as her distributive share of her son’s estate; that the estate of Robert M. Saunders had been fully settled in the courts of Pennsylvania, and after the payment of all the debts of said estate Clara M. Saunders received as widow of the intestate substantially $5,000 as her distributive share, and that later she received from the appellant substantially one-half of this fund arising from these insurance policies that had been fraudulently diverted from this estate. The District Court specifically found these allegations to be true, and the evidence.fully sustains these findings. It follows, therefore, that Helen M. Saunders, the mother of the deceased, could have maintained an action at law against either one of the wrongdoers who entered into this conspiracy and collusion, without joining any of the other parties thereto. In this case, however, she brought within the jurisdiction of the court, not only a party to this fraudulent scheme, but also sufficient of the fund that had been diverted from the estate to satisfy her claim for her distributive share of the estate of the intestate. While it is true that H. E. Scott, superintendent of banks of the state of Ohio, was not a party to this fraud, nevertheless, as representing that insolvent institution, he is in no better position to defend against the claim of the plaintiff than the Struthers Savings & Bank-ring Company would be, if it were still solvent, in possession of the fund and transacting business in its own name. By reason of his official capacity he has succeeded to the possession of this trust fund. In so far as concerns the funds that came into the possession of the appellant as liquidating officer of that insolvent banking institution, his rights and liabilities must be measured by the rights and liabilities of the company he represents. We need not consider whether the court below, upon proper insistence, should have refused to make a decree until at least the widow was brought in, so as to be bound by it, or might nevertheless proceed without such party, because the bank was found in wrongful possession of plaintiff’s property. Upon such a record as this, where it has been charged and decided that the bank represented by the appellant participated in the fraud corrected by the decree, we cannot resort to rule 11 to find a basis for an otherwise unjustified reversal. For the reasons stated, the judgment of the District Court is affirmed.