Publicker v. Shallcross, 6517.

• Citation: 103 F.2d 596
• Decision Date: 13 October 1938
• Docket Number: No. 6517.,6517.
• Parties: PUBLICKER v. SHALLCROSS et al.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

103 F.2d 596 (1938)

PUBLICKER v. SHALLCROSS et al.

No. 6517.

Circuit Court of Appeals, Third Circuit.

August 12, 1938.

Supplemental Opinion October 13, 1938.

Harry Shapiro, of Philadelphia, Pa., for appellant.

Edward A. G. Porter and Morris Wolf, both of Philadelphia, Pa. (Saul, Ewing, Remick & Saul and Wolf, Block, Schorr & Solis-Cohen, all of Philadelphia, Pa., of counsel), for appellees.

Before DAVIS and THOMPSON, Circuit Judges, and DICKINSON, District Judge.

PER CURIAM.

This is an appeal from a decree of the District Court vacating a decree entered by it in a prior term of court.

On September 1, 1926, Jacob W. Lang executed and delivered to the Philadelphia Company for Guaranteeing Mortgages, as trustee, hereinafter called the Philadelphia Company, a mortgage in the sum of $850,000 on the Shubert Building, located at 248-252 South Broad Street, Philadelphia, Pa., to secure a bond issue for that amount. On the same day, Publicker, the appellant, and others executed and delivered a joint and several collateral bond in the same amount to secure the same indebtedness.

Receivers in equity were appointed by the District Court, January 11, 1933, for the Philadelphia Company. In 1934, the receivers began negotiations with Publicker for a settlement of his obligations on the bond. While this was going on Publicker started proceedings in equity in Common Pleas Court No. 5 of Philadelphia County for the return of his collateral bond. Publicker and the appellees on December 3, 1935, entered into an agreement whereby the appellees, with the consent and direction of the District Court, released the bond and discontinued the suit in consideration of the payment of $8,500. This action was taken on the representation of Publicker that he was entirely without means and that the $8,500 was raised by several of his friends.

On March 2, 1937, the appellees filed a petition in the District Court alleging that Publicker had misrepresented his assets to them; that he testified falsely before referee Bachman, special master whom the court had appointed to hear the testimony and make recommendations as to the advisability of releasing the bond, and that Publicker had secured their consent to release the bond by false representations.

The District Court on the same day issued a rule to show cause why the decree of December 3, 1935, should not be set aside and the relief prayed for granted. The rule was returnable on March 15, 1937. Publicker did not file an answer on the merits, but did on March 11, 1937 file an answer raising preliminary questions of law in the nature of a demurrer to the petition and rule to show cause, "saving and reserving to himself the right to thereafter answer on the merits."

The demurrer was overruled with leave to answer on the merits within ten days. Instead of answering on the merits Publicker appealed from the decree overruling the demurrer to this court.

We think that this is a matter in which the court should be fully informed of the facts before disposing of the questions of law. It is true that technically the demurrer admits the facts, but, as we understood counsel...