Petition for Writ of Certiorari — Fore v. United States

—_——

Ofte.S:nreme Court, U.S,

i

‘

.

a

eens:

MAR 12 1965

JOHN FT DAVis CLERK

In the

SUPREME COURT

OF THE UNITED STATES

OCTOBER TERM. 1964

we OTR

B. RAY ROBB'NS CO., INC., PETITIONER

Vv.

VALLEY NATIONAL BANK OF ARIZONA

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ALBERT SIDNEY JOHNSTON, JR..

Suite 3-5 Schwan Building,

Biloxi, Mississippi,

Counsel fo: Petitioner

A. S. JOHNSTON ITI, ESQ.,

Suite 3-5 Schwan Building,

Biloxi, Mississippi.

Oz Counse:

INDEX

Page

Opinions Below 2

Jurisdiction ! Mp bg ‘a

Questions Presented 2

Statement of the Case 3

Reasons for Granting the Writ ag

Conclusion... ; Pe oid watts Get cos ee tat caztiad 15

Appendix A—ninion Below ... ee ee ee 16

Appendix B—Jucgment Below. ......--- ; . 21

Apvendix C—Order Denying Petition for Rehearing ...—-_-22

TABLE OF CASES

Page

Appell v. Fiore, 244 F.2d 706, C.A. 5, 1957 .. Pet ee oe 7

Atlantic Coast Line R. Co. v. State of Florida, 295 U.S. 301,

58 S.Ct. 715, 70 Led P40)... . «2 ee cinta. 6

Bank of America National Trust & Savings Association v.

Merchandise National Bank, 201 F.2d 68,C.A.9,1952... 10

Bayne V. United States, 93 U.S. 642, 23 L.ed.907........... 6

Booth Fisheries Corp. v. Coe, 114 F.2d 462, 72 App. D.C. 195,

cert den 311 U.S. 691, 61 S.Ct. 72, 85 L.ed. ee eae cee

Bull v. United States, 295 U.S. 247, 55 S.Ct. 695, 79 L.ed. 1421,

reversing 6 F.Supp. 141, cert granted 294 U.S. 704, 55

S.Ct. 544, 79 L.ed.1239........... ihe

Cary v. Curtis, 44 U.S. 236, 3 How. 236, 11 L.ed. 576 .. 6

i

Citie.. Service Oil Co. v. Adair, 273 F.2d 673, C.A. 10, 1960 11

C.LR. v. Duberstein, 363 U.S. 278, 80 S.Ct. 1190 12

Copper Be'le Min. Co. v. Gleeson, 14 Ariz.548, 134 P. 285 10

Deisch v. Wooten-Agee Co., 95 Ark. 279, 129 S.W. 819. 7,9

Espy v. Bank of Cincinnati, 18 Wall. 604, 21 L.ed 947 . 6

Firestone Tire and Rubber Co. ‘v. Central National Bank, 159

Ohio St. 423, 112 N.E.2d 636 VARESE oT

First State Bank & Trust Co. v. First National Bank, 314 Il.

259, 145 N.E. 382 7,8

Gulf Oil Corporation v. Lone Star Producing Co., +322 F.2d

28, °*.A. 5, 1963 .

Henson v. Lamb, 120 W.Va. 552, 199 S.E. 459 .

Lawrence Warehouse Co. v. es 224 F.2d 493, C.A. 8,

1955 ee

Matarese V. Moore-McCormack Lines, 158 F.2d 631 C.A. 2,

1946 ey x ; 7,8

McDonald v. Robertson, 104 F.2d 945, C.A. 6, 1939 . par ae

National Bank of California v. Miner, 167 Cal. 532, 140 P.

27 ener:

Oil Screw Nogah’s Ark v. Benley & & Felton _— 332 F.2d

3, C.A. 5, 1963 . ges 12

Pullman’s Palace-Car Co. v. Central Transporation Co., 171

U.S. 138, 18 S.Ct. 808 . ae 6

Smith v. Pacific Mut. Life Ins. Co., 192 F.2d 248 C.A. 6,

1951 ; ge EE emery ange AH eyes AS Cy ae ga 1l

Squibb & Sons v. Chemical Foundation, Inc., 93 F.2d 475,

oF & 3 see Ft ein NNN Let a1 7

Stone v. White, 301 U.S. 532, 57 S.Ct. 851, 81 L.ed. 1265 . 6

Taylor v. Merrill, 104 F.2d 710,C.A.9,1939....... ... 10

Thompson v. Sioux Falls National Bank, 150 U.S. 231, 14

S.Ct. 94, 37 L.ed. 1063 . A rs OT OPO E AE 6

United States v. American Packing & Provision Co., 122

F.2d 445, cert den 314 U.S. 694, 62 S.Ct. 364, 86 L.ed.

555 Hii SERRA OPE GG es CIR a 7

ii

W. E. Richmond & Co. v. Security National Bank, 16 Tenn.

App. 414, 64 S.W.2d 863 . 7,10

Westgate v. Maryland Cas. Co., 147 F.2d 177, C.A. 6, 1945 7,8

W. R. B. Corporation v. Geer, 313 F.2d 750, C.A. 5, 1963 13

STATUTES

28 U.S. Code Sec. 1254(1) 2

OTHER AUTHORITIES

40 ALR2d 997 . i ho

ili

In the

SUPREME COURT

OF THE UNITED STATES

OCTOBER TERM, 1964

B. RAY ROBBINS CO., INC., PETITIONER

v.

VALLEY NATIONAL BANK OF ARIZONA

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Petitioner prays that a writ of certiorari issue to review the

judgment of the United States Court of Appeals for the Ninth

Circuit, entered in the above-entitled cause on December 9,

1964, denying petitioner’s claim to money received by respond-

ent bank from petitioner to purchase time certificates of de-

posit for customers of petitioner, and used by respondent

through mistake on the part of the respondent as security fora

loan made to a customer of the said respondent bank.

OPINIONS BELOW

The opinion of the Court of Appeals entered October 29, 1964,

is reported in 338 F2d 467. There was no formal opinion of

the District Court. Timely petition for rehearing was denied

December 9, 1964.

JURISDICTION

This Court’s jurisdiction is invoked under 28 U. S. Code

Section 1254 (1).

QUESTIONS PRESENTED

1. Whether a party in New York who transmits money

through banking channels for the purchase of time certificai 2s

of deposit to be issued by receiving bank in Arizona may re-

cover such money shown to have been wrongfully used by the

receiving bank as collateral security for loan to bank’s cust-

omer.

2. Whether a party who has paid money to another through

mistake of fact and who does not obtain what was expected in

return is entitled to restitution from the other in an action for

money had and received.

3. Whether a bank which has received money by mistzke and

made a loan to it’s customer on the unauthorized assumption

that said money was collateral for its loan, is liable to repay

said money upon receipt of timely notice: of the mistake when

said bank can recover the money by charging the account of

its customer, and reversing bookkeeping entries.

4. Whether the circumstances attending respondent’s assert-

ed change of positior are such as to render it inequitable to

require it to make restitution to petitioner.

5. Whether there was any evidence tending to prove the as-

serted chenge of position by respondent bank was detrimental

to it; that such change, if any, was material, anc finally, that

such change, if any, was irrevocable.

2

6. Whether the recipient of such money paid by mistake may

hold on to said money, in an action for money had and received,

by simply claiming it had no duty to recognize the payor of

such money, notwithstanding timely notice to it whereupon

nothing whatever was done, and no >ffort made to determine

the truthfulness of the claim of petitioner.

7. Whether respondent met, by the evidence in the record,

the burden imposed upon it under its affirmative defense of

change of position to show that it was inequitable to compel

respondent to make restitution to petitioner.

8. Whether respondent bank could be placed in statu quo by

debiting the account of its customer, the amount of his over-

draft claimed to have been paia by proceeds of a loan financed

by use of petitioner’; money, forwarded to respondent bank

for the purchase of time certificates of deposit, and rescinding

said loan and seizing or freezing, or otherwise impounding

the balance remaining to the account of the bank’s customer

at the time of receipt of written nctice of the claim: of respoud-

ent, not only tending to demonstrate but actually proving, the

payment by petit.oner to said respondent bank by mistake.

9. Whether respondent bank may keep petitioners $30,000 by

merely claiming it had no duty to investigate the subject mat-

ter of petitioner’s letter-notice received by the former seven

days after receipt of petitioner’s money, in the action by peti-

tioner to recover money received by respondent without con-

sideration, and used by respondent for a purpose foreign and

contrary to the expressed intention of petitioner.

STATEMENT OF THE CASE

‘this diversity action was brought by petitioner to recover a

»v0,000.00 deposit made with respondent bank for one purpose,

but used by said bank for a contrary purpose (Complaint).

On August 23, 1960, petitioner deposited $30,000.90 with the

Bank of New York for transmittal to respondent in Arizona

3

(Exhibit 4, p.11, R.57; Exhibit 4B, R.86)'. The deposit was made

to purchase time certificates of deposit from respondent bank;

a letter was written the same dav notifying the bank of the de-

posit and instructing it how the money was to be used (Exhibit

1, R.11, 14).

Petitioner requested respondent bank to issue certificates of

deposit to designated payees and return them to petitioner in

New York. These certificates were to be issued, “free from all

encumbrances of any kind whatsoever and not to be considered

as collateral or security for any loan now or hereafter made by

the bank,” quoting from petitioner’s August 23, 1960, letter (Ex-

hibit 1, R.11, 14).

Petitioner wrote respondent bank again on September 1,

1960, concerning the same transaction (Exhibit 2, R.12, 14).

Hearing nothing in response to its letters petitioner telephoned

respondent on September 12, 1960, inquiring further about the

deposit. At this time petitioner was told that the bank em-

ployee handling the transaction was sick and no one was on

hand who could answer petitioner’s questions. The party tak-

ing the call at the bank advised petitioner to call later in the

week (Exhibit 4, p.17, R.57). Petitioner telephoned respondent

on September 16, 1960, only to learn that the bank employee

was still sick and had not returned to work, arid that no one

was available who could give any information concerning peti-

tioner’s money (Exhibit 4, p.18, R.57).

Failing in all its attempts to obtain the $30,000.00 or the certi-

ficates of deposit, petitioner filed suit in the District Court of

Arizona tc recover the money deposited for one purpose, but

used by respondent bank for a contrary purpose (Complaint).

Respondent bank defended on the grounds it had no agree-

ment with petitioner concerning the deposit, and that prior to

receipt of petitioner’s letter of instructions respondent had

changed its position to its detriment by making a loan to one

of its customers, using petitioner’s money as collateral (An-

swer).

,

1. Appeal is on “original papers;

script

references are to Reporter’s Tran-

Within a few months after suit was filed against both re-

spondent and the customer, the cutomer was adjudged a bank-

rupt, and the cause proceeded to trial against respondent alone

(R.4).

On the trial the evidence showed that respondent’s customer

owed respondent some $68,900.00 in unsecured Irans at the

time _‘ this transaction, $18,000.00 of which was in the form of

an overdraft in his business account (R.50, 52, 65), and that the

ioan proceeds were used to clear the overdraft and leave a

credit balance of $12,000.00 (Exhibit 3, R.65, 66). When respond-

ent received petitioner's letter of August 23, 1960, the status of

this account remained the same as it had been immediately

after the loan was made: the overdraft had been cleared, and

there remained a credit balance of $12,000.00 (Exhibit 3, R.51,

52, 118).

No action was taken by respondent bank upon receipt of

petitioner’s letter (R.43, 44, 56, 57). No attempt was made to

determine the customer’s right to use petitioner’s money as

collateral (R. 106), or tc freeze the customer’s account to pre-

vent his use of the $12,000.00 remaining therein (Frhibit 3, R.

51, 52). Nothing was done to cancel the loan as made or to re-

verse the bookkeeping entries so as to debit the customer’s ac-

count the amount of the overdraft. (Exhibit 3, R.51, 52, 118-121,

127).

Respondent argued at the trial that petitioner’s claim to the

deposit should be defeated on two grounds: (1) there was no

showing of timely delivery of the instructions; and £2) respond-

ent had no duty to recognize petitioner’s claim to the money (R.

91).

The District Court denied relief to petitioner and on appeal

this decision was affirmed. The Court of Appeals for the Ninth

Circuit held that the findirgs of the trial judge were supported

hy substantial evidence, were not clearly or at all erronéous,

and since respondent bank had changed its position by making

the loan to its customer before petitioner’s letter reache:. the

bank, it was under no duty to act when the letter arrived.

5

REASONS FOR GRANTING THE WRIT

if

The decision of the Ninth Circuit is patently and squarely in

conflict with this Court’s decisions in Espy v. Bank of Cincin-

nati, 18 Wall. 604, 21 L.ed. 947; and Pullman’s Palace-Car Co. v.

Central Transporation Co., 171 U. S. 138, 18 S.Ct. 808; and

Thompson et al. v. Sioux Falls National Bank, 150 U. S. 231, 14

S.Ct. 94, 37 L.ed. 1063. See also the following cases of this

court directly in point, viz: Bull v. United States, 295 U. S.

247, 55 S.Ct. 695, 79 L.ed. 1421, reversing 6 F.Supp. 141, cert

granted 294 U. S. 704, 55 S.Ct. 544, 79 L.ed 1239; Atlantic Coast

Line R. Co. v. State of Florida, 295 U. S. 301, 55 S.Ct. 713, 79

L.ec. 1451, reversing 11 F.Supp. 36; Bayne v. United States, 93

U. S. 642, 23 L.ed. 997, holding assumpsit will lie whenever the

defendant has received money which is the property of the

plaintiff and which the defendant is obliged by natural justice

and equity to refund; Stone v. White, 301 U. S. 532, 57 S.Ct. 851,

81 L.ed. 1265; Cary v. Curtis, 44 U. S. 236, 3 How. 236, 11 L.ed.

576.

In Espy v. Bank uf Cincinnati at 21 Led. 949, the Court said:

“The principle that money so paid under a mistake of the facts

of the case can be recovered back is weli settled * * *.”

Pullman’s Palace-Car Co. v. Central Transporation Co., supra,

involved an illegal contract between the parties. The Court

awarded judgmert in favor of the Central Transporation Com-

pany for a reduced amount, and held that courts, while refus-

ing to allow actions upon unlawful contracts, always strive to

do justice between parties and permit property or money part-

ed with cn the faith of unlawful contracts to be recovered and

that in such cases the action is not maintained upon the un-

lawful contzact but upon an implied contract of the defendant

to return o> make compensation for, the property or money

which it had no right to retain.

In the Thompson et al. v. Sioux Falls National Bank case,

supra, at page 99, 14 S. Ct. Reporter, this Court said:

6

“While it is true tne plaintiff bank credited the

bondsmen with the amount of the check on its receipt,

it parted with nothing uron the faith of it until nearly

a week thereafter. If it fad cancelled the check on the

evening of tne 13th, as it was requested to do, it would

have done no more than the law required of it. The

mere credit “i 4 check upon the books of a bank, which

may be cancelled at anytime, does not make the bank a

bona fide purchaser for value. if after such credit,

and before payment for value upon the faith thereof,

the hoider receives notice of the invalidity of the

check, he cannot become a bona fide holder by subse-

quent payment.” citing Dresser v. Construction Co., 93

U. S. 92; and state court cases.

In the case at bar respondent has the duty to pay back peti-

tioner’s money on the basis of an imp]'7d contract to return

that which it had no right to use in the first place, and now has

no right to retain.

II

The decision of the Court of Appeals for the Ninth Circuit is

in conflict with decisions of the Second Circuit in Matarese v.

Moore-McCormack Lines, 158 F.2d 631, and Squibb & Sons v.

Chemicai Foundation, Inc., 93 F.2d 475; the Fifth Circuit in Ap-

pell v. Fiore, 244 F.2d 706, and Gulf Oil Corporation v. Lone

Star Producing Co., 322 F.2d 28; the Sixth Circuit in Westgate

v. Maryland Cas. Co., 147 F.2d 177; the Eighth Circuit in Law-

rence Warehouse Co. v. Twohig, 224 F.2d. 493; the Tenth Cir-

cuit in United States v. American Packing & Provision Co., 122

F.2d 445, cert den, 314 U. S. 694, 62 S.Ct. 364, 86 L.ed 555.

This decision is also in conflict with the following state court

cases: Deisch v. Wooten-Agee Co., 95 Ark. 279, 129 S.W. 819;

National Bank v. Miner, 167 Cal. 532, 140 P. 27; Firestone Tire

and Rubber Co. v. Central National Bank, 159 Ohio St. 423, 112

N.E.2d 636; and W. E. Richmond & Co. v. Security National

Bank, 16 Tenr. App. 414, 64 S.W.2d 863, collected in the An-

notation in 40 ALR2d 997; and First State Bank & Trust Co. v.

7

First National Bank, 314 Ill. 269, 145 N.E. 382; Henson v. Lamb,

120 W.Va. 552, 199 S.E. 459.

In each of the cited cases, the courts dealt with factual situa-

tions analogous to petitioner’s case.

In Matarese v. Moore-McCormack Lines, supra, 158 F.2d 631,

the Second Circuit declared that the doctrine of unjust enrich-

ment or recovery in quasi-contract obviously does not deal with

situations in which the party to be charged has by word or

deed legally consented to assume a duty ioward the party seek-

ing to charge him, and said:

“Instead, it applies to situations where as a matter of

fact there is no legal contract, but where the person

sought to be charged is in possession of money or prop-

erty which in good conscience and justice he should

not retain, but should deliver to another,”

citing cases, and holding that:

“Where this is true the courts impose a duty to re-

fund the money or the use value of the property to the

person to whom in good conscience it ought to belong.”

(citing Restatement, Restitution, Sec. 1(a); and Pull-

man’s Palace-Car Co. v. Central Transporation Co., 171

U. S. 138, 152, 18 S.Ct.808, 43 L.ed. 108).

All ot the cited cases squarely hold that money paid under a

mistake of fact can be recovered. The right to recover in these

cases is based upon equitable principles; the plaintiff is merely

required to show that money was obtained under such circum-

stances as in equity and good conscience it should be returned.

The Sixth Circuit in Westgate v. Maryland Casualty Co.,

supra, 147 F.2d 177, 180, said:

“Unjust enrichment as a cause of action falls under

indebitatus assumpsit. It is grounded on the equitable

principle that one who has been unjustly enriched at

the expense of another is requ’red to make restitution.”

8

Lawrence Warehouse Company v. Twohig, supra, 224 F.2d

493, 498, was an action for restitution. Here the Eighth Cir-

cuit said:

“The term ‘benefit’, for purposes of restitution, de-

notes any form of advantage received, which is capable

of having its value measured, ar. i’. accordingly in-

cludes the advantage of being saved from an expense.

or loss. Restatment, Restitution, Sec. 1, Comment b.

Any benefit received by one person as against another

is entitled to be regarded as an unjust enrichment, ‘if

the circumstances of its receipt or retention are such

that as between the two persons, it is unjust for him to

run i

In National Bank of California v. Miner, 167 Cal. 532, 140

P. 27, the bank argued it had changed its position and parted

with value when it credited its customer’s account with the

deposit of a cashier’s check obtained as a result of a mistake on

the part of another bank. The court pierced this argument in

the following manner:

“(A)11 that (the bank) did, after the receipt of the

check and within the hour before its notification of

the mistake, was to credit the amount of the check

upon the overdue note of (its customer) which it held.

= & *

It was the mere bookkeeper’s stroke of the pen where-

by (the customer’s) commercial account was lessened

by the transfer of a credit upon his promissory note.

* * * The entries which it thus made were all subject

to its control and could be changed without injury or

detriment to it to comport and comply with the truth.”

The court concluded that the bank parted with no value and

changed its position only by a stroke of the pen, which another

stroke could restore (citing Thompson v. Sioux Falls National

Bank. 150 U. S. 231, 14S Ct. 94, 37 L.ed. 1063, and other cases).

Desich v. Wooten-Agee Co., 95 Ark. 279, 129 S.W. 819, was an

9

action to recover a payment made in error. The court held that

crediting the payment on an account of the payee was not a

prejudicial change of position:

“It is only when the payee has changed his position

to his prejudice because thereof and cannot be put in

statu quo by the payor that money paid under a mis-

take of fact cannot be recovered.” :

To \« same effect see W. E. Richmond & Co. v. Security

National Bank of Jackson, 16 Tenn. App. 414, 64 S.W.2d 863;

and Firestone ‘Tire & Rubber Co. v. Central National Bank, 159

Ohio St. 423, 112 N.E.2d 636

In Bank of America National Trust & Savings Assn. v. Mer-

chandise National Bank, 201 F.2d. 68, C.A. 9, 1952, where de-

fendant bank allowed its depositor to overdraw his account, ii

later received from plaintiff an advice of credit with respect to

checks collected for depositor, credited the account and re-

duced the overdraft, the bank’s bookkeeping entries, while

constituting a change of position, were held not a change to

the detriment of the defendant. The Court cited in support of

this proposition National Bank of California v. Miner, 167 Cal.

532, 140 P. 27, supra.

Ill

The judgment of the Court of Appeals :s at variance with, and

contrary to, Arizona law, as announced in Taylor v. Merrill, 104

F.2d 710, C.A. 9, 1939, cert den 308 U.S. 593, 60 S.Ct. 122, 84 Led,

496; and Copper Belle Min. Co. v. Gleeson, 14 Ariz. 548, 134 P

285.

In Copper Belle Min. Co. v. Gieeson, supra, the Arizona Su-

preme Court said:

“Assumpsit for money had and received is of an

equitable character, and it may in general be maintain-

ed by any legal evidence showing that the defendant

has received or obtained possession of money of the

plaintiff which in equity and good conscience he ought

to pay over to the plaintiff (citing cases).”

10

~—

To reconcile the opinion of the Ninth Circuit in the instant

case against petitioner, it is necessary to read into the record

evidence of change of position to the detriment of respondent,

contrary to the indisputable and uncontradicted facts of the

case.

The uncontradicted evidence shows respondent had know-

ledge of facts which placed it in a position where it was en-

abled to enrich itself unjustly at the expense of petitioner.

Possessed of both notice and knowledge, respondent chose to

do nothing. Respondent.is charged before this Court with

knowledge of all it could have discovered as a result of notice

‘from petitioner, ‘including the fact that Robbins’ $30,000.00 was

not intended to collateralize its customer’s note but was to pur-

chase time certificates of deposit to ‘be returned to petitioner in

New York. On the question of notice, the decision of the Ninth

Circuit is contrary to the following cases: Booth Fisheries

Corp. v. Coe, 114 F.2d 462, 72 App. D. C. 195, cer den 311 U. Ss.

691, 61 S.Ct. 72, 5 L.ed. 447; Cities Service Oil Co. v. Adair, 273

F.2d 673, C.A. 10, 1960; Smith v. Pacific Mut. Life Ins. Co., 192

F.2d 242, C.A. 6, 1951; McDonald v. Robertson, 104 F.2d 945,

C.A. 6, 1939.

IV

The District Court made no finding concerning the failure

of respondent to investigate the subject-matter of the letter-

notice of August 23, 1960, that respondent ignored repeated

telephone calls from petitioner to inquire about its money and

the requested certificates of deposits. Petitioner proved the

transmittal of the money.and receipt by respondent. It proved

the purpose and intended use of such money. Without findings

concerning these matters the effect and duty of respondent

bank to investigate the matter, and the “actual knowledge”

with which such bank is charged under the law by this timely

“notice” the judgment of the Court of Appeals is not put upon

a basis adequate to support it.

Likewise the District Court ignored, and made no finding on

the effect of respondent bank’s use of the money to discharge its

customer’s overdraft at respondent bank, and the effect, if any,

such bookkeeping entry had on the right of petitioner to re-

11

cover all, or at least part, of its money. No finding was made

on the obligation and duty imposed on respondent bar:k to

“freeze” and otherwise seize and impound, and prevent the use

of, the balance remaining in the customer’s account at the time

and on the date respondent had, and is charged with, “actual”

knowledge of the true facts of petitioner's case, that it forward-

ed $30,000.00 to respondent to purchase certificates of deposit.

With these suggested additional findings, unquestionably

sustained by the uncontradicted evidence in the record, as for

example the ietter-netice of August 23, 1960, the follow-up

letter of September 1, 1960, and the telephone calis to respond-

ent bank by petitioner, the conclusions of law necessarily to

follow would strongly argue for, if not dictate, a judgment in

favor of petitioner Robbins. At least, in the exercise of its

supervisory jurisdictior. this Court should rernand this cause

for further findings.

As said by this Court, inC. I. R.v. Duberstein, 363 U. S. 278,80

S.Ct. 1190, 1199, 1200 (1960) on page 1200, 80 S.Ct. Rep.,

“A finding is ‘clearly erroneous’ when aithough there is

evidence to support it, the reviewing court on the entire

evidence is left with the definite and firm conviction that a

mistake has been committed.’ United States v. United

States Gypsum Co., 333 U. S. 364, 395, 68 S.Ct. 525, 542, 92

Led wert?

The opinion of the Ninth Circuit obviously overlooks these

matters, and its holding that the findings of fact of the district

court are supportea by substantial evidence and are not clearly

or at all erroneous and that the court’s conclusions of law there-

from are proper,” is without support in the record, and is con-

trary to the overwhelming weight of the evidence, and the

indisputable character of the evidence.

Adopting the language of Circuit Judge John R. Brown, of

the Fifth Circuit, in Oil Screw Noah’s Ark v. Bentley & Felton

Corp., 322 F.2d 3 (1963), at pages 5 and 6, we urge upon the

Court the position that in this cause “(t)here is still the quali-

12

~

tative factor of the truth and right of the case, the impression

that a fundamentally wrong result has been reachec,” and refer

to W. R. B. Corporation v. Geer, 313 F.2d 750, 753 (1963), where

the same scholarly judge again dealt with a similar problem,

i.e., the right and duty of courts of appeal of the United States

to review findings of district courts, and said:

“In view of this we cannot indulge any assumption that

the Judge was using ‘substantial evidence’ as the equiva-

lent of ‘clearly erroneous.’ To pass that test the evidence

must, of course, be substantial. But unlike the Judge’s

function in passing on the sufficiency of the evidence in a

jury case, it does not end there. As does the appellate

Court in reviewing like findings of a District Court, the

clearly erroneous concept of F.R. Civ. P. —2 (a) requires

findings to be set aside if the Court is left with the im-

pression that the result is not the truth and right of the

case. In this sense, at least, the two terms are not synony-

mous, an? the Judge had the obligation to determine that

this record and the attacked findings satisfied that mean-

ing as well. 2B Barron & Holtzoff, Federal Practice &

Procedure Sec. 1135 (Wright ed. 1961) citing this Court’s

decision in Sanders v. Leech, 5 Cir., 1946, 158 F.2d 486;

United States v. Kaplan, 5 Cir. 1960, 277 F.2d 405; Manu-

facturer’s Cas. Ins. Co. v. Instrusion-Prepakt, Inc., 5 Cir.,

1959, 264 F.2d 758; Slattery Co. v. United States, 5 Cir., 1956,

231 F.2d 37; Western Cottonoil Co. v. Hodges, 5 Cir., 1955,

218 F.2d 158.”

‘The Fifth Circuit, in W. R. B. Corporation v. Geer, supra, at

p. 753, went on to say that essential as is the Court’s depend-

ence on counsel to pinpoint

“both the specific issues under attack and the relevant

portions of the record demonstrating the asserted pres-

ence or absence of evidence, * * * it cannot escape the

judicial travail incident to the objections by putting

the burden on counsel alone.”

.

In the quoted case, the Court vacated the judgments appeal-

ed from, and remanded the causes.

13

In the instant case, Counse) for petitioner is bold to assert he

believes petitioner is entitled to have the court gran: certiorari,

docket the case, and after argument and hearing, render judg-

ment in favor of petitioner. But surely he has shown entitle-

ment to further findings and conclusions of law, and then to

judgment according to the law and the evidence.

V

The questions presented are of vital concern to the Banking

trade, and business generally. If permitted to stand. the de-

cision of the Ninth Circuit against petitioner could have a far-

reaching effect on business by mail, and could mean the end of

large and important transactions unless the parties sit across

table and deal with each othe. face tc face. One could never

know when a receiving bank would credit moneys transmitted

by mail, and pursuant to instructions via mail, to another’s ac-

count and use the sender’s money to wipe out “overdrafts,” ard,

by failing to respond to repeated requests for information con-

cerning the sender’s money place such funds as collateral for

loans to a receiving bank’s impoverished and need, customers,

especially those already indebted to said banks. Opportunities

for gross wrong-doing could easily be multiplied.

14

CONCLUSION

To give lasting and permanent effect to this Court’s decisions

and resolve the conflict between the decision of the Ninth Cir-

cuit and contrary decisions of the Second, Fifth, Sixth, Eighth

and Tenth Circuits; and the state Supreme Court eases cited

herein, the petition for a writ of certiorari should © granted.

Respectfully submitted.

Counsel for Petitioner.

A. S. JOHNSTON III, ESQ.,

Suite 3-5 Schwan Building.

Biloxi, Mississippi,

Of Counsel.

15

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

B. RAY ROBBINS CO.,

Appeiiant,

VS.

No. 19,195

VALLEY NATIONAL BANK OF ARIZONA,

Appellee.

(October 29, 1964)

On Appeal from the United States District Court

for the District of Arizona

Before. HAMLIN, JERTBERG and DUNIWAY, Circuit

Judges.

HAMLIN, Circuit Judge

B. Ray Robbins Co., a New York corporation, appellant here-

in, filed an action i. the United States District Court for the

District of Arizona against Valley National Bank of Arizona, «

national banking association, appellee herein, and Anthony

Vaccaro, seeking to recover the sum of $30,000. After the filing

of said action Vaccaro was adjudicated a bankrupt and the ac-

tion was stayed as to him.

After a trial to the court, a jury having been duly waived,

the district court rendered a judgment in favor of appellee. A

timely appeal was taken to this court which has jurisdiction by

reason of 28 U.S.C. Sec.1291 et seq.

The facts show that Anthony Vaccaru was indebted to appel-

lee by reason of certain jioans theretofore made to him by ap-

pellee. He was seeking a further loan from appellee and was

informed by appellee that such loan would not be granted un-

less such further loan was secured. It appears that Vaccaro

then talked by telephone to one McCabe in New York concern-

ing a method of raising money. McCabe mentioned a time de-

16

posit. Vaccaro told McCabe to talk to Nesbitt, a vice president

of appellee, and that he (Vaccaro) would do whit Nesbitt told

him. On August 10, 1969, Nesbitt wired McCabe as follc s:

“We will accept a time deposit in the amount of $30,000 ior

a term of one year bearing interest at 3% per annum pledged

as security on a loan in like amount for Anthony Vaccaro.

H. W. NESBITT

Vice President

Valley National Bank”

It appears further that thereafter McCabe talked with appel-

lant in New York concerning the transaction. Thereafter on

August 23, 1960, appellant without contacting Vaccaro or ap-

pellee delivered a certified check in the sum of $30,000 to the

Bank of New York in New York, with which bank appellee had

an account. On the same day the Bank of New York wired

appellee that it was creziting appellee in its bank with $30,000

by order of Anthony Vaccaro.

On receipt of this wire appellee contacted Vaccaro, granted

him a $30,000 loan, isued a $30,000 certificate of deposit in his

name which Vaccaro endorsed in blank and returned it to ap-

pellce as security for the loan. On Vaccaro’s signing a note for

$30,000 this sum Was deposited in Vacearo’s account which

prior to that time had been overdrawn in the sum of approxi-

mately $17,000. This transaction was completed between ap-

pellee and Vaccaro not later than August 24, 1960. About a

week later, on August 30, 1960, appellee received a letter from

appellant dated August 23, 1960, addressed to Mr. Nesbitt,

which stated that it thar day had delivered to the Bank of New

York a certified check in the sum of $30,000 to be deposited to

appellee’s account and that

“Negotiable Certificates of Deposit, paying 3% per annum

maturing in twelve months, are to be issued, free from all

encumbrances of any kind whatsoever and not to be consid-

cred as collateral or security for any loan now or hereafter

made by the bank, in the names of the following:

17

Principal Investing Corp. $ 5,000

Inez Russo 10,000

Floyd B. Gregory or Letha M. Gregory 5,000

Gold Pure Food Products Co., Inc. 10,000

Please mail all Certificates to us.”

This was the first contact between appellant and appellee.

At the time of the receipt of this letter by appellee the transac-

tion between Vaccaro and appellee had been completed, and at

the time of the completion of the transaction appellee had no

knowledge of appellant or of its interest or participation in the

transaction. Also as of August 23. 1960, neither appellee nor

Vaccaro had requested appellant to furnish a compensating bal-

ance.

Appellant has advanced several theories to support his claim,

none of which is supported by the evidence or by the court’s

findings.

In the complaint appellant alleged that it “was requested to

make and did so make a compensating balance deposit with”

appellee. If this was intended to allege that appellee made

such a request, there is no evidence in the record to support

such a claim. In the trial cour? appellant then argued that Mc-

Cabe was appellee’s agent and that he made a ynaterial misre-

presentation to appellant to induce appellant’s action. Appel-

lant has pointed to ne evidence in the record which would show

that McCabe was appellee’s agent. The district court found

that McCabe was “acting on behalf of someone other than de-

fendant Bank” (appellee). The evidence supports this finding.

On appeal appellant argues that it can recover under Restate-

ment, Restitution Sec. 28(c) (1936) on the ground that the mis-

take was induced by material representation of McCabe who

purported to be an agent of appellee. Section 28 reads as fol-

lows:

“A person who has paid money to another because of a mis-

take of fact and who does not obtain what he expected in

return is entitled to restitution from the other if the mistake

is induced: (a) by the fault of the payee, or (b) by his innocent

and material misrepresentation, or (c) by the fraud or mate-

18

rial misrepresentation of a person purporting to act as the

payee’s agent, or (d) by the fraud or material misrepresenta-

tion of a third person, provided that the payee has notice of

the traud or representation berore he has given or promised

something of value.”

The record does not show that McCabe ever purported to be

acting for appellee. Section 28 (c) therefore cannot apply. Sec-

tion 28{d) also is completely inapplicable because yellee

made a loan to Vaccaro before it received notice of any claimed

mistake.

Among other findings made by the district court were the

following:

“14. That at no time material to the issues of this case was

there an agreement between plaintiff and defendant Banx

that said Thirty Thousand and no/100 Dollars ($30,000.00)

should be used as a compensating balance by defendant

Bank, and certificates of deposit issued by defendant Bank in

accordance with plaintiff's instructions.

“15, That defendant Bank was not at any time material to

the issue of this case acting under a mistake as to its under-

standing with the defendant Vaccaro.”

From its findings of fact the district court made certain con-

clusions of law which are set out in the margin.’

We hold that the findings of fact of the district court are sup-

ported by substantial evidence and are not clearly or at all

erroneous and that the court’s conclusions of law therefrom are

proper.

Judgment affirmed.

1CONCLUSIONS OF LAW

1. That plaintiff was acting under a mistake as to the terms and condi-

tions of the understanding between the defendant Vaccaro and the

defendant Bank; that defendant Bank was not acting under any mis-

take; that the defendant Bank made no misrepresentation regarding

this transaction to any one concerned with this transaction; that there

was no ainbiguity in the terms of the understanding between the de-

fendant Bank and defendant Vaccaro; that the defendant Bank had no

19

rotice prior to acting that the plaintiff had made a mistake; that the

eefendant 3ank acted in good faith.

se *

4. That the defendant Bank was under no duty to rescind the trans-

action at the time it received plaintiff's letter of instructions dated

August 23, 1960 (Plaintiff's Exhibit 1); nor was defendant Bark under

a duty to seize the money remaining in defendant Vaccaro’s checking

account at the time it received said letter.

5. That the defendant Bank has materially changed its position in good

faith and in reliance upon the advice of credit received from said Bank

of New York; and that the defendant Bank cannot be restored to its

original position.

6. That at no time material to the issues of this case was there any con-

tract, agreement or understanding between plaintiff and defendant

Bank concerning the disposition or use of the said Thirty Thousand

and no/100 Dollars ($30,000.90).

7. That the said Bank of New York was not acting as the agent of the

defendant Bank at al.y ‘ime material to the issues of this case.

8. That the said McCabe was not acting as the agent of the defendant

Bank at any time material to the issues of this case.

aon

APPENDIX B

Judgment

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

R. RAY ROBBINS CC.,

Apvellant

vs.

VALLEY NATIONAL BANK

OF ARIZONA, \

Appellee

No. 19,195

APPEAL from the United States District Court for the Dis-

trict of Arizona.

THIS CAUSE came on to be heard on the Transcript of the

Record from the United States District Court for the District of

Arizona, and was duly submitted.

f

ON CONSIDERATION WHEREOF, It is now here ordered

and adjudged by this Court, that the judgment of the said Dis-

trict Court be, and hereby is affirmed.

Filed and entered October 29. 1964.

21

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE NI°.TH CIRCUIT

Excerpt from Proceedings of Wednesday, December 9, 1964.

Before: HAMLIN, J ERTBERG AND DUNIWAY, Circuit

Judges.

ORDER DENYING PETITION FOR REHEARING

d by direction of the Court, ITIS

f appellants filed November 27,

herefor by rule of court, for a

is denied.

On consideration thereof, an

ORDERED that the petition 0

1964, and within time allowed t

rehearing of above cause be, and hereby