Quaker City National Bank v. Hepworth

21 Pa. Super. 566 | Pa. Super. Ct. | 1902

Opinion by

W. D. Porter, J.,

This is an action against the maker of a promissory note. The defendant offered evidence which, if believed, established: (1) that the note was made without consideration for the accommodation of Boulter, the payee, and that the bank had knowledge of that fact at the time it was discounted, and (2) that Boulter, who owed the bank $14,100, including the note of $1,200 in suit, and also the firm of Datz & Brother, the sum $1,400, being unable to meet his liabilities, confessed judgment to Datz as trustee in the sum of $15,500, upon which judgment an execution was issued. That after the execution and be.fore the sale by the sheriff, the defendant was assured by those having authority to represent the bank, that the amount of the note in question was included in the judgment, that he would be protected, and that it did not make any difference to him “ whether that sale brought a thousand or ten thousand dollars; there was plenty of money there to pay everybody.” The defendant testified that the cashier said to him, “ Go home and don’t worry.” All the stock of merchandise and machinery owned by Boulter were sold under this execution. There was evidence that the sale by the sheriff was conducted in such a manner as to prevent the realization of the value of the goods. Datz, the plaintiff in the execution, bought in all the stock of goods, as trustee for the bank, and in that character, with the full knowledge and consent of the bank, carried on the business for more than a year. There was evidence which would have justified a finding that the stock of merchandise and machinery was of a market value greater than the amount of the indebtedness for the payment of which it was held in trust, but because of negligence in the management of the trust, the entire property was sacrificed for a much less amount.

There had been a former trial of this action, but the judgment in which that trial resulted was reversed by the Supreme Court, which decision is reported in 192 Pa. 315. We have here the same evidence of which Mr. Justice Green, who wrote the opinion in that case, said: “Under the foregoing testimony, without considering the personal testimony of the defendant, it is not easy to see how the conclusion can be resisted that Datz, the plaintiff in the judgment, took the judgment, held it and bought in all the stock of goods, as trustee for the bank, with the full knowledge and consent of the bank, and also carried on the business as such trustee for more than a year. As it seems to us now, the jury might well find that the bank, having control of the property, through their trustee, carried on the business, and were properly responsible for the manner in which it was conducted and for its results. It seems to us a fair question, for the jury was raised, under the testimony, to inquire into the operations of the trust, and we think the defendant should be at liberty to show what the stock of goods was worth, what it sold for, what was done with the proceeds, and if he could establish facts which entitled him to claim that the bank had received, or ought to have received, satisfaction for the note in suit out of the subsequent management and disposition of the goods by the trustee, he should have the opportunity to do so.”

The learned judge of the court below, upon the present trial, charged the jury in language too plain to be misunderstood, in substance, that the defense involved the determination of these questions of fact: (1) Was the defendant an accommodation maker of this note ? (2) Did the plaintiff have knowledge of that fact at the time the note was discounted? (3) Was the note paid by the property sold by the sheriff, or ought it to have been paid by that property if the trustee had performed his duty “ as a reasonable and honest man would and as every trustee should? ” The jury were told to consider the first and second questions, and if they failed to find either that the note was accommodation paper, or that the bank had knowledge of that fact, then the Verdict must be for the plaintiff. The jury-must have understood that if the defendant had failed to satisfy them that he was an accommodation maker, and that the bank knew that fact at the time it discounted the note, the plaintiff was entitled to recover. The defendant was required to establish those facts to the satisfaction of the jury, before they were to proceed to inquire into the conduct of the trustee in the management of the property. If these preliminary questions were determined in favor of the defendant, the jury were then to inquire into the management of the property acquired by the bank under the execution. The first point presented by the plaintiff was a correct statement of an abstract principle of law, and it would have done no harm to affirm it with proper explanation. In this case, however, the defendant was not contending that it was a good defense for the maker of a note to show that it had been made for the accommodation of the payee when the suit was by the indorsee, that fact was merely an element in a theory of defense which the Supreme Court had already decided to be sound. The learned judge, in his general charge, properly instructed the jury as to the nature of accommodation paper and the liability of the maker thereof. The refusal of this point could not have prejudiced the plaintiff’s case. The first, second and third specifications of error are dismissed.

The defense was not based on an'allegation that the plaintiff held collateral securities for this debt. The allegation was that the collateral had been realized upon, and that the debt had either been paid, or that it ought to have been paid if reasonable care had been exercised in the management of the property. The decision of the Supreme Court upon the former appeal clearly recognized the right of this defendant to set up the misconduct of the trustee and the sacrifice of the trust property as a defense to this action. The fourth, fifth, sixth, seventh, eighth, ninth, tenth, eleventh and twelfth specifications of error are dismissed.

That part of the charge in which the learned judge instructed the jury as to the duty of the trustee to see that the sheriff’s sale was so advertised, so conducted and the goods so arranged as to bring the very best possible price, is the subject of the thirteenth and fourteenth specifications of error. We are not satisfied that it was the duty of this trustee to do any advertising other than that which is required by law in proceedings of like character, which is to be done by the sheriff. There was no evidence in this case that the sale had not been properly advertised, and the presumption is that the sheriff did his duty. This instruction, however, worked no harm to plaintiff’s cause, for none of the goods were sold to outside parties ; all became at the sale the property of the trustee, and subject to the trust. The plaintiff was not, therefore, required to account for the value of goods which had been permitted to escape from the grasp of the trust through the sheriff’s sale. The manner in which the case was submitted to the jury relieved the plaintiff from liability to account for anything but the manner in which the property was disposed of after title had been acquired through the sale by the sheriff. The thirteenth and fourteenth specifications of error are dismissed.

The instruction of the court as to the final question in the case, the manner in which the trustee was bound to manage the property after he had gotten possession of it, and the grounds upon which the bank could be charged for a failure to realize what the property was worth, embodied the language which is complained of in the fifteenth, sixteenth and seventeenth assignments of error. Had the jury been left upon this point without other instruction than that included in these assignments of error, we would have been inclined to the Opinion that the standard of duty upon the part of the trustee thereby indicated was too high, and that the jury might, also, have been misled into assuming that the burden of proof was upon ■the plaintiff as to this point. But the part of the charge here assigned for error was accompanied by instructions as to the nature of the duty of the trustee and the manner in which that duty was to be discharged. They were in effect told that the duty of the trustee was to conduct the business “ as a reasonable and honest man would,” under the circumstances. The learned judge stated the question of fact, upon the determination of which this branch of the case must turn, to be: “ If by reason of Datz, the trustee, not exercising proper and reasonable care in all the branches of this business from the time he became trustee down to the last moment, then the plaintiff cannot recover, if, by reason of that want of attention upon the part of the trustee the property sold for less than the $15,500, which included the note for $1,200.” The whole tenor of this part of the charge was to the effect that the plaintiff was entitled to recover, unless the jury were satisfied that the market value of the goods, at a fair and full sale, was equal to or more than the $15,500, and that the reason that amount was not realized was because of the failure of the trustee to give the business reasonable care and attention and the default of his agents to honestly and fairly administer the trust. - The fifteenth, sixteenth and seventeenth assignments of error are without merit.

The eighteenth, nineteenth, twentieth and twenty-first assignments of error violate Rule 16, of this court, and cannot be regarded. An assignment of error to the admission or exclusion of testimony must quote the questions or offers, the objections thereto, and the ruling of the court thereon. The ruling of the court is necessarily upon the sufficiency of the objection, and an assignment of error which does not show the ground of an objection does not make clear what the ruling of the court was: Gish v. Brown, 171 Pa. 479.

The twenty-second assignment of error is but a repetition of the seventh, which has already been considered.

The judgment is affirmed.