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Mohr v. APEX Terminal Warehouses Inc.

February 11, 1970


Major, Senior Circuit Judge, and Fairchild and Kerner, Circuit Judges.

Author: Major

MAJOR, Senior Circuit Judge.

This diversity action was instituted on August 18, 1967, by John Mohr & Sons (hereinafter called plaintiff or Mohr), as lessor, against Apex Terminal Warehouses, Inc. (hereinafter called Apex or the corporate defendant), as lessee, to recover rent, damages for injury to property and attorney's fees under a grain terminal lease dated November 4, 1965, effective as of October 1, 1965. The same recovery was sought against the president and owner of Apex, O. W. Martin, by virtue of a contemporaneous written guarantee of the Apex obligations.

Diversity jurisdiction was challenged by both defendants, and Apex sought damages by way of a counterclaim for property installed by it during its tenancy but which Mohr claimed and took possession of on reentry.

The case was tried to the court without a jury, and the court concluded (1) that diversity jurisdiction existed as to both defendants; (2) that Mohr was entitled to recover $30,000 of unpaid rent, $4,259.25 attorneys' fees and $540 damages for loss or injury to property (this item not involved on this appeal), and (3) that Apex was not entitled to recover on its counterclaim.

Judgment in favor of Mohr was entered accordingly, from which Apex and Martin, after denial of their motion for a new trial, appeal to this court.

The case was tried by Honorable Jesse E. Eschbach, a United States District Judge, who rendered a lengthy opinion in which he discussed every facet of the case and expressly stated that the opinion contained his findings of fact and conclusions of law pursuant to Rule 52(a), Federal Rules of Civil Procedure.

The trial judge considered a large amount of testimony, both documentary and oral, much of the latter of a controversial nature. It was his function to resolve conflicts in the testimony and make findings of fact. A study of defendants' presentation here shows that they have largely ignored the findings of the trial court and would have us substitute our judgment instead. This, of course, as has often been stated, is not within the province of a reviewing court. In the recent case of Brennan v. Midwestern United Life Insurance Co., 7 Cir., 417 F.2d 147, 149, we stated:

"Our function is to ascertain, after considering the record in its entirety, whether the inferences drawn by the trial judge have a sufficient evidentiary basis so that it can be said they are reasonable, that is, could have been arrived at by logical deduction. In performing that function, we may not resolve testimonial conflicts or attempt to judge the credibility of witnesses."

A study of the record is convincing that the findings contained in Judge Eschbach's excellent opinion (not published) are adequately supported and must be accepted by this court. We also agree with his conclusions of law predicated upon the facts as found.

The contested issues as stated by defendants are:

"1. Whether the district court erred in holding that it had jurisdiction of this case based on diversity of citizenship of the parties.

"2. Whether the district court erred in permitting the plaintiff to recover judgment on the instruments sued on.

"3. Whether the district court erred in denying defendant Apex recovery on its counterclaim for the reasonable value of its trade fixtures converted by plaintiff to its own use."

It is our judgment that we can do no better than adopt as the opinion of this court that portion of Judge Eschbach's opinion which is relevant to the issues as presented. It is as follows:


Lafayette Grain Terminal, Inc. (hereinafter LGT Inc.), an Indiana corporation, owned the terminal in question in 1961. LGT Inc. was owned one-half by a Mr. Barnes and his family and one-half by plaintiff, which acquired its interes in 1961. At that time, Barnes and his son were two of the four directors. In 1963, Barnes and his son resigned and two officers of plaintiff were elected to the board of directors. It appears that holding these two directorships was sufficient to control the affairs of the corporation. When plaintiff's officers were elected, an employee of plaintiff was assigned to Lafayette to manage the terminal.

In 1964, mortgagees of the terminal buildings instituted foreclosure proceedings against LGT Inc. An insurance company held the first mortgage and plaintiff the second. Plaintiff was the successful bidder at a United States marshal's foreclosure sale and became the record owner of the warehouse on September 8, 1964, by virtue of a marshal's deed. Plaintiff took, however, subject to the insurance company's first mortgage. After the foreclosure ...

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