Guarantee Trust & Safe Deposit Co. v. Craig

155 Pa. 343 | Pa. | 1893

Opinion by

Mr. Justice McCollum,

The appellant contends that he is discharged fr'om liability on the notes in suit by the agreement and action of the appellee in connection with the assignment to the latter by the William Wilson & Son Silversmith Company of all its property in trust for the benefit of its creditors. Assuming, as he claims, that he made one note and indorsed the other for the accommodation of the Silversmith Company, our first inquiry is whether he has submitted any evidence of an agreement by the appellee as purchaser of the notes which releases him from liability upon them. If the evidence fails to show such an agreement we next inquire whether it discloses any action on the part of the appellee in its administration of the trust which discharges him. If either of these inquiries is answered in the affirmative the judgment must be reversed ; if both are answered in the negative it must be affirmed.

It appears from the testimony produced by the appellant that he and Woodbury owned nearly all the stock of the Silversmith Company, and were personally liable for a considerable portion, if not all of its indebtedness; that on the 24th of March, 1886, on the report of its president that he had been unable “ to secure the §25,000 authorized at the special meeting held March 8, 1886, and that the need for immediate funds and promptness to prevent disaster to the business was imminent,” it was, on motion of the appellant, unanimously resolved by the directors that it was expedient that certain debts due and owing by the company should be protected and preferred, and that its president and treasurer should execute and deliver judgment notes of the company to certain creditors for the respective amounts due them. On the 29th of March, 1886, at a special meeting of the board of directors, the president of the company reported that judgment notes had been executed and delivered as authorized and directed and that executions had been issued for the amounts therein stated.. He then advised that an immediate assignment be made for the benefit of creditors and stockholders, and thereupon, on motion of the appellant, it was resolved “ that the president and treasurer be authorized and empowered to execute and deliver to the Guarantee Trust and Safe Deposit Company of the city of Philadelphia, or such other person or corporation as may be willing to accept the trust, a general assignment without preference, in accordance with the laws of the state of Pennsylvania for the benefit of creditors.” In pursuance of this resolution, and on the day it was passed, a deed of assignment in trust for the creditors of the Silversmith Company was made to the appellee and recorded. The entire action of the Silversmith Company in relation to the assignment appears in the resolution and conveyance to which we have referred, and in this action there is clearly no discharge of the appellant from his liability as maker or indorser of the notes in suit. Indeed, it was not within the power of the company to extinguish this liability except by payment of the notes. The holders of them by agreement with the company might have released him, but they did not. It is true that the company confessed judgments to the holders of the notes for the amounts represented by them, but the notes were not surrendered, nor was there any stipulation or understanding that the judgments should be considered as satisfaction of them. The creditor in whose favor a judgment was thus confessed was not required or invited to give up any security for his claim. The judgment was not in lieu of, but in addition to the securities he then held for it. When the appellee on the request of the appellant and Woodbury invested its own funds in these claims, it apparently succeeded to all the rights and securities possessed by the parties from whom it purchased them. In the transaction between the vendors and vendee of the claims there was no qualification of the rights or withholding of the securities pertaining to them. The vendee received and held the notes, in connection with the transfer of the judgments confessed by the company, as security for the money it expended in the purchase of the claims, and its right to so hold them was not disputed by the company or its stockholders or by any maker or indorser of the notes. Is there anything in the evidence submitted by the appellant which qualifies the apparent right of the appellee to the remedies on these securities which were open to the original holders of them ? There is certainly nothing in it to support a finding that the appellee agreed to release the appellant from his liability as maker or indorser. It shows, however, an agreement by the appellee to withdraw the levies made on the assigned property by virtue of the executions issued on the judgments confessed by the debtor company and that such agreement was promptly and strictly complied with. If anything is made clear by this evidence it is that the appellee received the property of the Silversmith Company, not as a purchaser of it, but in trust for the creditors of the assignor. Thenceforth it held and was bound to account for the property under the assignment and the laws governing the trust created by it. It does not appear that in the administration of the trust there was any want of fidelity to the interests of creditors or stockholders, or that there was any misappropriation of the assets. That the appellee lawfully accounted for the property which came to its possession under the deed is a fair inference from its offer to show its account and the adjudication upon it, and the appellant’s objection to this offer was a substantial confession that the production of the account would not afford any support for his defence. In view of the un contradicted testimony as to the cause of the delay in the administration of the trust and the appellant’s admissions respecting the agreement under which the levies were withdrawn, he has no standing to complain of either. It is proper to add in this connection that, if there were inaccuracies in the account, the time and place for their correction was in the court in which it was filed, and upon the adjudication of it.

It is probable that Woodbury and the appellant had exaggerated ideas of the value of the property and that the appellee gave undue weight to their representations on the subject. It is difficult to account ror tne action of the parties interested in the trust on any other theory. This action, however, is consistent with their mutual belief that the assets administered in accordance with the plan of the principal stockholders were sufficient to pay the debts and expenses and to leave a balance for the assignor. If this was tbeir honest belief, the withdrawal of the levies, without an intimation from the principal stockholders that they desired to be released from their personal liability for the debts of the company, is intelligible. It would hardly be expected that in connection with their representations as to the value of the assets and their demand for the withdrawal of the levies they would request to be released. It is probable that such a request from them would have resulted in a refusal by the appellee to invest its own funds in the purchase of claims against tbe company or to accept the trust.

We are clearly of opinion that the testimony submitted by tbe appellant cannot be regarded as sufficient to release him from liability on the notes in suit. We therefore overrule the specifications of error.

Judgment affirmed.