Peoples State Bank v. Drake-Ballard Co. , 164 Minn. 175 ( 1925 )

I entertain a deep-seated aversion to the manner in which the result is reached. My disagreement is confirmed by the fact that Mr. Justice Holt himself very frankly expresses some misgiving.

It is true that courts, particularly those who try facts "have to determine cases upon such evidence as the parties adduce." But it is none the less judicial duty to weigh evidence as accurately as may be, and an appellate court disregards accepted standards when it sustains a finding which, undeniably, is clearly opposed by a manifest preponderance of the evidence. That is particularly true if the conclusion sustained as against evidence preponderating the other way is favorable to the litigant having the burden of proof. That is so because of the difference between the position of a party who must produce some evidence in order to recover and the one, ordinarily the defendant, who prevails in the absence of any evidence.

In this case it has been found, in favor of the party having the burden of proof, that a very important contract was made. I consider that finding opposed by an overwhelming preponderance of the evidence. For that view the record discloses the following reasons:

1. The contract was not in writing. If made, it was made willingly by defendant. It concerned an important matter. Under such circumstances, such contracts, as a matter of sense and business practice, are always in writing, where, as here, the negotiations are conducted by counsel. It may be by informal confirmation — a letter and answer being all that is required to assure those concerned against embarrassment through a loss of or conflict in recollection.

2. It does not appear satisfactorily that the contract wasreported to plaintiff. If the contract was made, it was the turning point in a very important matter and one marking a distinct success for plaintiff's attorneys. It was such a success for them that, if made, it would have immediately been reported by letter to their out-of-town client. If reported by telephone, it would have been confirmed probably by letter. Yet, there is no letter to that effect in the record nor any suggestion of there ever having been any.

3. If the contract was made, it would have been acted uponpromptly. Mr. Mansfield said it was made about June 1. He was already in touch with the attorneys in North Dakota who were to conduct the litigation there. The suit was not commenced, apparently, until October. The delay is unexplainable upon any plausible theory and there is no attempt at any explanation of it in the record, at least I have found none.

4. The commencement of the North Dakota case, when reported todefendant by plaintiff's attorneys, was not referred to thecontract. Surely it would have been so referred if in fact there had been any such contract. On the contrary, Exhibit P, the letter written by Mr. George H. Selover, of plaintiff's counsel, on October 25, 1921, wherein for the first time he advises defendant of the commencement of the test case in North Dakota, by an implication which seems to me irresistible, negatives the existence of any such contract by its whole text.

The North Dakota case had just been commenced and if a contract had been made the author of Exhibit P participated in its making. How comes it then that the letter not only mentions no contract but, on the contrary, in requesting defendant to take the bonds off the hands of his client, puts his position solely on the ground that "We have gone into this matter carefully" with "competent advice in North Dakota" and the consequent "opinion that there is no action that can successfully be maintained to collect these warrants?"

The letter concludes thus:

"We have not intended in this letter to go into any technical questions respecting the Bank's position regarding any claim which it might have or might make against you in this connection; considering that if these warrants were spurious and illegal, the Bank received nothing for its money and as between you and it, should not be permitted to suffer."

Why so much and such general discussion if the North Dakota case had been commenced pursuant to contract? If that procedure had already been contracted for, why, in the letter advising of its initiation, is there not only silence concerning a contract basis but also a proposal so inconsistent as to negative any such basis?

5. Certainly no contract was made on May 19, 1921, as allegedin the complaint and found below. That conclusion is inescapable because: (1) Messrs. Selover and Mansfield disavow that date and; (2) the letter from Mr. Hassett, representing defendant, of May 19 (Exhibit D) negatives the then existence of the contract. It shows further that there was no contract then in contemplation which would relieve plaintiff from all of the burden of the proposed North Dakota lawsuit. That letter shows beyond any possible doubt that the object of the negotiations then pending was to interest certain contractors, to the end that plaintiff would not have to stand "the entire expense" of the attempt to collect from the city of Edgeley. This reference to the then pending efforts to get outside parties to share the expense withplaintiff certainly negatives the idea of any understanding then existing that plaintiff was to be relieved from all of the expenses.

The only suggestion, in the record, of May 19 as the date of the supposed contract, is in the complaint. There is not a word of evidence in support. The inference is that, in making the finding that the contract was entered into on May 19, the learned trial judge did not have in mind the evidence. The case was tried on January 10, 1924, submitted on briefs, and not decided until June 24, 1924. It seems to be a case where the press of other and intervening matters has had the effect, on an overworked judge, of confusing the evidence and blurring its effect. The fact remains that the finding of May 19, as the date of the contract, is not only not based upon any evidence but opposed by all of it.

6. As late as July 6, 1921, no contract had been made. Hassett's letter of that date (Exhibit F) reports the failure of his efforts to interest the contractors, in the proposed "distribution of expenses," and says that the bank may as well proceed. Proceed how? Proceed under any contract? No — for, if that had been the idea, reference would have been made to the contract.

7. The letters of plaintiff's attorneys, who were also its onlywitnesses, negatives the contract. Mr. Selover's letter of October 25, 1921, to defendant, has been referred to. If there was any contract, it was made long before that letter was written and it is asking too much of reason to suggest that, whether made by Mr. Selover or Mr. Mansfield, the former did not know all about it. What rational deduction is there from his letter except that, at the time it was written, its author had never heard of any suggestion of a contract?

The letter was replied to, under date of October 25, by Mr. Williams for defendant, asking that the matter be postponed until the return of Mr. Hassett, who was out of the city. Under date of November 5 (Exhibit Q) Mr. Selover acknowledged receipt of the Williams letter, and then proceeded to suggest for the first time that his client, plaintiff, had a right to recover on the ground of fraud — an unlikely suggestion if the client was alreadyassured against loss by the contract supposed to exist.

There are other letters from defendant to plaintiff's attorneys which continue to refute the claim of contract. Their language makes impossible the conclusion that the parties to the correspondence had then ever heard of the supposed contract upon which recovery is now sought. That is clear because, without any denial from Mr. Selover or Mr. Mansfield, they were told in two letters (Plaintiff's Exhibit J and K) that defendant's "policy"had not yet been decided upon. That is true as late as December 17 (Exhibit K). If there had been a contract such as claimed, plaintiff's attorneys are too shrewd and too experienced, both as lawyers and business men, not to have called attention to the fact of its existence and to have suggested that it was a very substantial determination of "policy" and "attitude."

A pertinent concluding observation as to this correspondence is that there is not a word in it to suggest the contract and that, as a matter of common experience, we must conclude that, if it had existed, the contract would have been referred to at least once in some way in so extended a correspondence.

8. Finally, the explanation in respondent's brief of thediscrepancy between testimony and letters is impossible. Reference is made to this: "The actual agreement was made a considerable time after the date of that letter (Mr. Selover's of October 25), and in fact after all of the letters referred to by appellant written by the firm of Selover, Schultz Mansfield to the Ballard-Drake Company were written." That statement of plaintiff's attorneys, to this court, is in direct conflict with the testimony of the two who furnished their client with the testimony necessary to success. But they proceed with this astounding statement, which cannot stand with the one just quoted: "It is clear from all of the testimony that the agreement was made before the test suit was brought in North Dakota." Any attempt at a reconciliation of the two statements is futile for the plain fact is that the letters now in question, those of October 25, 1921, and subsequent dates, were written, most obviously after the North Dakota test case was commenced. So, if the contract was made before the suit was brought, it could not have been after the letters were written.

These facts and inferences, some of them of small and some of great persuasiveness but the whole compelling conviction, explain my disagreement. The majority opinion achieves a welcome result, in that it relieves us from the necessity of deciding the troublesome point (one that might also lead to affirmance), whether, under the circumstances of this case, there was a warranty, express or implied, in connection with the sale of the bonds to plaintiff. Agreement on that point, although not assured, is possible.

It has been a painfully embarrassing thing to discuss, from the standpoint of its credibility, the testimony of two members of our bar. But other high-minded men have been known to be as badly mistaken and similar persistence in honest error is well known to common experience. However, the practice of attorneys of furnishing from their own lips and on their own oaths the controlling testimony for their client, is one not to be condoned by judicial silence. We have had here of late too many cases of it. The good name and deservedly high standing of the Minnesota Bar require that the practice be stopped, for nothing short of actual corruption can more surely discredit the profession. And their seeming acquiesence, through silence, will as surely discredit judges.

While the embarrassment of the situation is ours, the responsibility for it is not. By appearing in the dual capacity of counsel and witness, and then necessarily by argument urging upon the judge, as trier of the facts, the truth of their own testimony, two of counsel for plaintiff have subjected themselves to the results which automatically attend such a spectacle, for a lawyer "occupying the attitude of both witness and attorney for his client, subjects his testimony to criticism if not suspicion." Ross v. Demoss, 45 Ill. 447 (449). "In most cases, counsel cannot testify for their clients without subjecting themselves to just reprehension." Potter v. Ware, 1 Cush. (Mass.) 519 (524).

There can be no reasonable dissent from the following declaration by a Louisiana judge: "It is always desirable, for the harmony of the profession, the independence of the bench, and the public confidence in the administration of justice, that an attorney should not be a witness, except in extreme cases, when all other means of proof are impossible." Succession of Harkins, 2 La. Ann. 923, 927. See also Onstott v. Edel, 232 Ill. 201,83 N.E. 806, 13 Ann. Cas. 28; Frear v. Drinker, 8 Pa. St. 520.

There are cases, particularly where an attorney is so much engaged with the affairs of one client as to have acquired a superior knowledge of them, when emergency may compel him to testify and also deny him both right and opportunity of withdrawal. Again, there are occasions when, without impropriety, counsel may testify to an incidental or formal matter such as the identity and genuineness of a document. But the case before us does not fall within any exception to the rule of impropriety, of which there is present so much that in my opinion judicial silence concerning it is not permissible.

My conclusion is that an affirmance cannot be put upon the supposed contract dealt with in the majority opinion. Whether there can be an affirmance upon the ground of warranty, express or implied, we have not attempted to determine. In view of the conclusion of the majority, investigation of that point is uncalled for.