149 A. 881 | Pa. | 1930
Wohlsen, a contractor, made an assignment on October 3, 1924, for the benefit of creditors, to Walker, and the deed was recorded on January 14, 1925. The former had agreed to build certain houses for Emerich, the defendant, the work to be performed under a contract, the terms of which had not been reduced to a signed writing and were disputed by the respective parties. The builder insisted that all costs were to be paid by the one who employed him, and, in addition, he was to receive 8% of the cost for his services, while the owner claimed the sum of $2,000 had been fixed as compensation. The dispute as to the oral understanding was submitted to the jury in the proceeding instituted by the assignee to recover the balance demanded as due, and the version of Wohlsen was accepted by it, and a verdict rendered in plaintiff's favor for the amount claimed, less certain admitted credits.
Emerich contended the cost of the buildings had been paid, and this was not disputed, but he insisted that his further liability was limited to $2,000, less payments *12 made. Though the jury found that the agreement to recompense was on a percentage basis, as the contractor claimed, yet the question remained as to the amount unpaid, assuming the 8% charge to be the proper measure of the indebtedness due. Checks were offered showing payments on account, but one for $500, dated October 10, 1924, and admittedly cashed by Wohlsen, was not received in evidence as a credit, on the theory that it was given and paid seven days after the assignment for the benefit of creditors had been executed, though the latter was not recorded for more than two months thereafter, and admittedly the defendant had no knowledge of the fact when he turned it over on account of the sum remaining unsatisfied. The learned court below was of opinion that the transfer to the assignee was effective as of its date, and moneys later delivered to the assignor were not proper subjects of credit. The correctness of this conclusion is the narrow question upon which the present appeal turns.
Chief Justice BLACK said, in Gaullagher v. Caldwell,
Though the principles stated were not controverted below, a distinction was drawn because the assignment involved was made for the benefit of creditors seven days before the payment for which credit was claimed, and the present suit was brought by the assignee in his official capacity. The position taken by the learned court below cannot be sustained. It may first be noted that state insolvent laws are enforceable notwithstanding federal bankrupt laws, which do not render the former ineffective and void (7 C. J. 21), as to those excluded from their operation, such as farmers (Miller v. Jackson,
Under the earlier Act of March 24, 1818 (7 Smith Laws 131), which the lower court conceived to have some controlling force, though expressly repealed by the Act of June 4, 1901, P. L. 404, an assignment could be made for the benefit of creditors, which, as to the assignor and assignee, or the creditors of the former, was controlling from the date of delivery (Golden's App.,
It is, however, unnecessary to refer further to the Act of 1818, above mentioned, for the first six sections, relating to insolvency, were expressly repealed by the Act of 1901. By the 9th section of the latter statute, the assignment must be recorded forthwith, and a copy filed within five days in the court of common pleas with the necessary schedules. Creditors must be given notice of this fact within twenty days (section 14). The 10th section requires the assignee also to record his instrument in other counties, where property of the assignor is located, within fifteen days, and provides, as a penalty for failure, a charge against the assignee for any amount *15 lost by outsiders as a result of neglect to do so. From this provision, the conclusion seems to have been drawn by the court below that the assignment was effective from the date of delivery as to the whole world, and that innocent third parties who might satisfy their obligations, in whole or in part, thereafter, by transferring amounts due to the assignor, before notice, could not claim credits against the estate, though the assignee might be liable for loss.
Such construction, violating the well recognized rule that such payments are valid, cannot be sustained, particularly in view of section 17 of the same act (P. L. 413), which provides "(1) No purchase or assignment of the real or personal property of such insolvent, made bona fide and for a valuable consideration, before the recording of the assignment, . . . . . . shall be invalidated or impeached thereby," and, "(2) If any person indebted to such insolvent, or having possession of any of his property, shall bona fide pay the said debt or deliver the said property to the said insolvent, without having had actual notice or knowledge of such petition or assignment, he shall not be liable to pay or deliver the same to such assignee or receiver." The provisions quoted are a plain recognition of the equitable rule always existing in this State that the obligor, who innocently pays without knowledge of a transfer of his obligation by the obligee, shall be protected.
It follows from what has been said that the check for $500, dated October 10, 1924, should have been received in evidence, and submitted to the jury. It may be, as the clerk for the insolvent testified, that this payment was in satisfaction of a labor payroll for which Emerich was responsible, but that was denied by the latter, and raised a question of fact to be solved by the tribunal provided for the solution of such questions. The evidence supporting the theory of defendant should have been received (Stafford v. Henry,
The judgment is reversed, and a venire facias de novo awarded.