225 Pa. 503 | Pa. | 1909
Opinion by
On. February 28, 1901, the appellant gave to Newton Jackson a written option to purchase his mill, situated in Cumberland county, subject to a mortgage of $3,500. Jackson was the promoter of an enterprise for the consolidation of a number of mills in eastern Pennsylvania. By the terms of the option the appellant agreed to execute a deed to him, or to a corporation to be designated by him, and to accept as payment for his property $10,500 in six per cent preferred stock of the Eastern Milling and Export Company, or such other company as might be organized by Jackson to acquire the said property, and, in addition, $10,500 in common stock of such company. The option provided that the deed should be deposited in escrow with the Union Trust Company of Philadelphia on or before March 15,1901, and, upon Jackson’s delivery to the appellant of the said preferred and common stock, the deed was to be recorded in the office for the recording of deeds at Carlisle and the mill was to become the property of Jackson or of some company to be 'designated by him. The option further provided that the preferred stock issued by the Eastern Milling and Export Company should be limited to such an amount as might be necessary to purchase milling properties; that no preferred stock should be issued for profit to any attorney, underwriter, promoter or trust company; that Jackson or the purchasing company should pay to the appellant cash for his stock of grain, flour and feed on hand at the time of the transfer, and that if Jackson should fail to comply with the terms and conditions of the option, as above set forth, on or before June 1, 1901, the said trust company was to return the deed to the appellant. He executed a deed for his property to one Murphy, a grantee substituted with his consent, and took it to the trust company, with a receipt for the same prepared by his attorney, setting forth certain terms and conditions in addition to those appearing in the option under which the deed was to be deposited in escrow. The president of the trust company refused to sign this receipt, but gave one in the following form:
*507 “No. 1901.
“Received of George C. Gochnauer, depositor, deed dated March 25th, 1901, from George C. Gochnauer and wife to Joseph C. Murphy for property situated in Monroe Township, Cumberland County, Pa., to be held in escrow under terms of agreement dated February 28th, 1901, between the depositor and Newton Jackson.
“The Union Trust Company.”
Having been notified that the stock which he had agreed to take for his property was ready for him, the appellant accepted the same on May 15, 1901, and surrendered the receipt which had been given to him by the trust company. The enterprise which Jackson had undertaken to promote met the common fate of most of such ventures, and the appellant in time became dissatisfied with the stock which he had taken in exchange for his property. Having ultimately found it to be worthless, he brought this suit against the Union Trust Company to recover $10,500, the supposed cash value of the stock at the time he accepted it. His allegation is that his loss is due to the failure of the trust company to perform its duty to him. In support of his claim he insists that certain promises were made to him by Jackson as the inducements to him to give the option; that these promises were that there would be placed on the consolidated mills a mortgage securing bonds, the proceeds of which would be used solely for working capital; that whenever it might become necessary to furnish money to pay off the indebtedness on mills, Jackson and those interested with him would furnish the money and take preferred and common stock in place of the mill owners, that the scheme of consolidation might not be interfered with; that the deeds for all of the properties would be deposited in a trust company which would hold the same until Jackson and those interested with him would carry out their part of the plan, in which event the deeds would be delivered and recorded, but if the plan was not carried out, they would be returned to the owners; that the foregoing promises, which did not appear in the op
The appellant admits that when he took the deed to the trust company he had with him a receipt prepared by his attorney, which set forth terms and conditions in addition to those in the option, upon which the trust company was to accept the deed in escrow. These differed materially from those appearing in the option, and.the president of the trust company not only refused to sign the receipt, but declined to give one in any other form than the one which the appellant accepted. It recites that the deed would be held in escrow under the terms of the agreement with Jackson of February 28, 1901. By that agreement no duty was imposed upon the trust company in connection with the issuing of the stock of the Eastern Milling and Export Company, or to supervise in any manner the management of its finances. The duty of the trust company was to hand over the deed whenever the appellant received the stock which he had agreed to take for his property. There was no attempt to prove that the stock which was given to him had not been regularly issued, but, whether it had been or not, it was his duty to see that it had been so issued at the time he accepted it. His acceptance ended the escrow tested by the written option.
At a meeting of the stockholders of the Eastern Milling and Export Company held in July, 1901 — early in July is the time fixed by the appellant — he heard from a written report read by C. L. Harper, a director of the company and the president of the Union Trust Company, the appellee, that the promises of Jackson, which had induced the execution of the option, had not been kept. The learned trial judge was of opinion that there was proof of a failure on the part of the appellee to keep its promise to have Jackson’s agreements carried out, and that but for what the appellant did after he learned that this promise had not been kept, the question of the appellee’s liability would be for the jury. We express
