Mann v. Wakefield, Appeal, No. 70

Appeal, No. 70 | Pa. Super. Ct. | Jul 28, 1899

Opinion by

Orlady, J.,

Trembly & Company, being insolvent, on June 11,1895, executed and delivered an instrument under seal which was intended to prefer two of their creditors, and the trustee named therein took possession of the assets of the firm, collected outstanding accounts which were due and owing, and completed certain dwelling houses which were at that time in an unfinished condition. At the instance of a general creditor of the insolvent firm, proceedings were instituted to have the writing declared an assignment for the benefit of all creditors, which resulted in the Supreme Court (Mann, Moon & Co. v. Wakefield, 179 Pa. 398" court="Pa." date_filed="1897-01-04" href="https://app.midpage.ai/document/mann-v-wakefield-6244067?utm_source=webapp" opinion_id="6244067">179 Pa. 398), deciding that it was a voluntary assignment for the benefit of creditors within the meaning of the Act of April 17, 1843, P. L. 273.

The assignee, without recording the assignment or filing an inventory and bond filed an account in which he admitted having a balance of $1,743.34 for distribution. This balance was subsequently increased before the auditor, who was appointed to hear and decide exceptions, etc., and to make distribution, by the assignee agreeing to a surcharge of $6,051.46. Before the case of Mann, Moon & Co. v. Wakefield, trustee, supra, was decided by the Supreme Court, a number of creditors of Trembly & Company secured judgments and issued writs of execution attachment in which J. A. Wakefield was summoned as a garnishee; these claims were subsequently purchased by him and assignments of them were taken in the name of a third person who acted for him. Atthe time these claims were bought by Wakefield he had in his hands a large fund produced under the deed of assignment from the assets of Trembly & Company, the same claims being presented before the auditor and for which the accountant claimed that he should receive credit before any appropriation was made to the claims of the other creditors.

At the time of Trembly & Company’s assignment to Wake-field they had in process of erection several uncompleted dwelling houses, and, in order to enhance their market value, the assignee contracted with Mary Youngk, a lumber dealer, to furnish finishing lumber, doors and sash which were necessary to complete the houses and to make them salable. The material and supplies were delivered and used in the houses, which were afterwards sold, the proceeds being a part of the fund for distribution.

The auditor awarded to H. G. Wasson, Esq., an amount for counsel fees as a preferred claim, distributed the balance to the execution attachments, and held that the claim of Mary Youngk was not entitled to a preference over the other creditors.

Exceptions to the auditor’s report were filed by Mary Youngk which were overruled by the court and the report was confirmed. She is the sole appellant. The evidence clearly shows that the fund was produced largely, if not entirely, through the professional services of the counsel named. The litigation was tedious and complicated, and was resisted until the entering of a judgment by the Supreme Court. The amount claimed by H. G. Wasson, Esq., was found'by the auditor and court to be fair and reasonable. His services were instrumental in creating a fund which inured to the benefit of all, and it was proper that his claim should be paid first: Shaffer v. Spangler & Co., 144 Pa. 223" court="None" date_filed="1891-10-05" href="https://app.midpage.ai/document/shaffer-v-spangler-6353947?utm_source=webapp" opinion_id="6353947">144 Pa. 223; Hays’s Estate, 153 Pa. 328" court="Pa." date_filed="1893-01-03" href="https://app.midpage.ai/document/hayss-estate-6241306?utm_source=webapp" opinion_id="6241306">153 Pa. 328; Weed’s Estate, 163 Pa. 595" court="Pa." date_filed="1894-10-01" href="https://app.midpage.ai/document/weeds-estate-6242477?utm_source=webapp" opinion_id="6242477">163 Pa. 595; Schwartz v. Oil Company, 164 Pa. 415" court="Pa." date_filed="1894-10-22" href="https://app.midpage.ai/document/schwartz-v-keystone-oil-co-6242544?utm_source=webapp" opinion_id="6242544">164 Pa. 415.

In disposing of the claim of Mary Youngk it must be borne in mind that it is simply a controversy between her and J. A. Wakefield as assignee of the execution attachments, the fund being in court for distribution between them. He became the assignee of these claims by purchasing them with the trust funds, in which she had an interest, or by buying them at a time when he had the fund in his hands. The materials were ordered by his agent, and to give to him the benefit and advantage of the increased value of the houses by reason of her lumber being in them at the time of the sale would be a harsh application of equitable rules. No other creditor is now objecting to this claim. If, out of the trust funds in his hands, it had been paid in full at the time the material was delivered to the houses he would be entitled to a corresponding credit in his account for the expenditure as a prudent one. The app'ellee urges that if she has any rights in the matter they arise out of her contractual relations with J. A. Wakefield, and are in no way connected with the distribution of the funds in his hands as garnishee. The argument is specious but not sound, as circuity of action is particularly obnoxious to the law as tending to multiply suits. The amount of her claim is not in dispute and the distribution can be so easily made in a court with equity powers which has full control of the fund, and thus dispose of the whole controversy. It would conserve no good end to relegate her to a vexatious, expensive and uncertain action at law. His purchase of the claims against his assignors was a speculative venture and should not be used to defeat the claim of a creditor with whom he contracted on the faith of the estate in his custody.

The judgment of the court below is reversed, and it is ordered that the claim of Mary Youngk ($605.14 with interest from December 1,1895) be paid first out of said fund, after payment in full of the claim awarded to H. G. Wasson, Esq. ($1,500), the balance to be distributed in accordance with the schedule made by the auditor, the costs of this appeal to be paid by the appellee.