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Freudenheim v. Eppley

January 25, 1937


Appeal from the District Court of the United States for the Western District of Pennsylvania; Frederic P. Schoonmaker, Judge.

Author: Buffington

Before BUFFINGTON, DAVIS, and THOMPSON, Circuit Judges.

BUFFINGTON, Circuit Judge.

In the court below, the partnership J. Freudenheim & Sons brought suit against the receivers of the Pittsburgh Hotels Corporation to recover damages suffered by the alleged negligence of the defendant in failing to safely keep some $40,000 worth of its diamonds deposited with defendant by Sol J. Freudenheim, one of the partners, who was an alleged guest of the hotel. On trial, a verdict was had for the plaintiff for $41,893.13. Thereafter motion was made for a new trial, and pending a hearing thereof, defendants presented a petition as follows:

"That at the time ofthe trial of said case the law of the Commonwealth of Pennsylvania -- more specifically the Act of April 22, 1905, P.L. 286, as amended by the Act of April 9, 1925, P.L. 221 (12 P.S. §§ 681, 682) -- authorized the courts of the state to entertain motions for judgment upon the whole record, notwithstanding a verdict of a jury providing that the trial court had reserved or declined a point for binding instructions submitted at the proper time during the trial and providing also that all the evidence introduced at the trial be certified as part of the record. Notwithstanding the Conformity Act (28 U.S.C. § 724 [28 U.S.C.A. § 724]) the practice thus authorized by state law was thought not to be permissible in the Federal Courts sitting in Pennsylvania because of a decision of the U.S. Supreme Court in Slocum v. New York Life Insurance Co., 228 U.S. 364, 33 S. Ct. 523, 57 L. Ed. 879 [Ann. Cas. 1914D, 1029] wherein the practice was challenged as being in conflict with the Seventh Amendment to the Federal Constitution. By reason of this situation your petitioners, up to the present time, have not requested the court in the instant case to certify the evidence as a part of the record, neither have they presented a motion for judgment non obstante veredicto although, as indicated above, they presented points for binding instructions during the trial of the case in accordance with the Pennsylvania practice.

"That on June 3, 1935, the Supreme Court of the United States handed down an opinion in a case entitled Baltimore & Carolina Line v. Redman, 295 U.S. 654, 55 S. Ct. 890, 79 L. Ed. 1636, wherein it modified somewhat the views theretofore expressed by it in the Slocum Case, the effect of which is believed to have eliminated, under certain circumstances, constitutional objections to motions for judgment non obstante veredicto in this court in accordance with the Pennsylvania practice."

Thereafter the court denied the motion, holding: "We cannot see that we have any authority so to amend the record as to state a fact which did not occur at the trial. The facts are that these four points were marked 'Refused.' We cannot make the record say that they were reserved for future consideration, when that is not the fact of the case," and on January 14, 1936 granted a new trial.

On January 20, 1936, counsel for plaintiff filed a stipulation as follows: "It is stipulated by counsel for the plaintiff that the said plaintiff has no objection to the Court's treating the defense point for binding instructions as if the same had been marked 'Reserved,' instead of 'Refused.' This stipulation is indicated as a waiver of all objections which the plaintiff might have to the defendant's petition requesting that the record be so amended." Whereupon the court ordered: "It is hereby ordered (1) that defendants' motion so to amend the record filed herein on July 16, 1935, be, and the same is hereby granted and the record of the case is hereby amended accordingly; (2) that the order of court filed herein January 14, 1936, granting defendants' motion for a new trial is vacated and set aside; (3) the case is now set down for reargument on defendants' motion for a new trial and for judgment on points reserved in favor of the defendants."

On February 21, 1936, in an opinion then filed, the court held:

"Our conclusion on a review of all the evidence is that plaintiffs have failed to make out a case, and that judgment should now be entered in favor of the defendants on the whole case, notwithstanding the verdict, on the first and third points of law reserved.

"'First. Under the pleadings and all the evidence in this case your verdict must be in favor of the defendants.

"'Third. The uncontradicted evidence in this case shows that Sol J. Freudenheim was not a guest at the William Penn Hotel and did not intend to become a guest at the said Hotel on the two occasions when he deposited his briefcase alleged to have contained diamonds belonging to plaintiffs, namely on December 5, 1933, in the said deposit box which he procured at the said Hotel. There is no evidence that the said Sol J. Freudenheim paid any consideration for the use of the said safe deposit box. Depositing the said briefcase in the said safe deposit box, therefore, was a gratuitous bailment and the defendants cannot be held liable for the loss of the said briefcase or the contents thereof in the absence of gross negligence on their part. There has been no proof of gross negligence on the part of the defendants and your verdict in this case must, therefore, be in favor of the defendants,'" and entered judgment for the defendants. Whereupon plaintiffs took this appeal.

Without passing on the question whether under the facts recited the court had the power to enter a n.o.v. verdict for the defendant, we are of opinion the court, under the proofs in the case, was in error in not entering judgment for the plaintiff on the verdict rendered.

Turning to the pleadings, we note that clause 6 of the statement of claim alleged that: "Sol J. Freudenheim, one of the plaintiffs been a guest in the William Penn Hotel in the City of Pittsburgh, Pennsylvania, entered and became a guest in said hotel having in his possession a large number of loose diamonds in a brief case; that at the request of said Sol J. Freudenheim the defendants by their agent, servant or employee assigned ...

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