Atkins v. Payne

• Decision Date: 13 February 1899
• Docket Number: 248
• Citation: 190 Pa. 5,42 A. 378
• Parties: William Atkins and S. B. Briscoe, Receivers of the Pottsville Iron & Steel Company, v. George F. Payne and Charles G. Wetter, copartners, trading as George F. Payne & Company, Appellants
• Court: Pennsylvania Supreme Court

42 A. 378

190 Pa. 5

William Atkins and S. B. Briscoe, Receivers of the Pottsville Iron & Steel Company, v. George F. Payne and Charles G. Wetter, copartners, trading as George F. Payne & Company, Appellants

No. 248

Supreme Court of Pennsylvania

February 13, 1899

Argued January 12, 1899

Appeal, No. 248, Jan. T., 1898, by defendants, from judgment of C.P. No. 1, Phila. Co., June T., 1897, No. 74, on verdict for plaintiffs. Reversed.

Assumpsit upon a guaranty. Before BREGY, J.

At the trial it appeared that defendants had a contract to erect a building in the city of Philadelphia. Keen & Co. were subcontractors for furnishing the structural iron and steel work which they purchased from the plaintiffs. Defendants guaranteed the payment of the material furnished to Keen &amp Co. For their own protection they required Keen & Co. to produce to them receipts for money paid to the plaintiffs. Two receipts from plaintiffs to Keen & Co., one for $7,000 and the other for $4,000, were exhibited to the defendants who alleged that, relying upon the correctness of the receipts, they paid Keen & Co. $2,500.

Under objection and exception the trial court permitted the plaintiffs to show that at the time the receipts were given the amount which they represented had not been paid. [1] The giving of the receipts for money which was not actually paid was thus explained by plaintiffs: In order to enable them to realize cash upon deliveries as made, it was agreed that time drafts should be drawn by them upon Keen & Co., who should accept them; and they should be discounted by the bank for plaintiffs, and Keen & Co. should pay them at maturity; and as defendants required the production of receipts from plaintiffs before making payments to Keen & Co., it was agreed that plaintiffs would, in advance of the payment of the acceptances, give receipts for the amounts required to meet them. These receipts Keen & Co. were then to take to defendants and collect the money to meet the acceptances as they fell due. Under these circumstances, on August 15, 1896 although no money was paid, a receipt was given for $7,000 in order to enable Keen & Co. to draw from defendants the moneys to meet maturing acceptances. The receipt for $4,000 followed the same course of dealing.

Mr. Wetter, one of the defendants, in direct examination, testified:

"Q. You had the contract for the construction of this building? A. Yes, sir. Q. You built it? A. Yes, sir. Q. And completed it? A. Yes, sir. Q. Keen & Co. furnished the iron? A. Yes, sir. Q. This is your guarantee to pay the receiver? A. Yes, sir. Q. Did you pay Keen & Co. from time to time? A. Yes, sir. Q. From time to time did Keen & Co. produce to you those receipts? A. They did. Q. Did you believe those receipts to be true? A. Yes, sir. Q. Did or did not Payne & Co., after receiving those receipts, make other payments? A. We did. Q. Did you or did you not make larger payments than you otherwise would have done? A. Yes, sir."

Objected to. Objection sustained.

"Q. Will you take the receipt book and state what payments you did make from time to time? A. On June 16, 1896, we paid $650 --"

Objection to any evidence of payments except such as were made after the production of those receipts, and on those contracts. Objection sustained.

"Q. I show you two receipts, one dated August 15, 1896, for $7,000, and the other dated a month later, September 15, 1896, for $4,000, and I ask you whether you did make any payments after the receipt by you of those two receipts, and whether the payments so made were or were not induced and made because of those receipts. A. We made a payment on September 21, 1896, of $2,500. Q. And is this the check with which you made it? A. Yes, sir; we also made a payment on March 25, 1897, of $900. Q. You have seen and have produced the letter of the receivers to Keen & Co., in which they state that the agreement was that the receipts should be produced before you made payments. Was that the agreement? A. That was certainly a positive understanding. I don't know that there was a positive agreement to that point, but I refused, positively, to pay Mr. Keen any money until receipts were produced, first showing that the receipts were produced for the checks I had given him the month before. Q. Would you or would you not have made those payments, subsequent to those receipts, if you had not believed that the payments were made? A. We would not."

Objected to.

"Q. This is the check for $900 that you refer to? (Handing witness check.) A. It is. Q. I now ask you whether you have or have not paid Keen & Co. as much money as your guarantee to the receivers calls for?"

Objected to. Objection sustained.

"Q. Were there other payments which you made on the faith of their receipts?"

Objected to. Objection sustained.

"Q. Taking the statement of the witness upon the stand that $2,500 was received by them on September 2, 1896, I ask you if it is not true that if they received from Keen & Co. the $2,500 on September 2, with the check which you have produced of September 21, and the receipts which they claim are true, if the receivers have not been overpaid?"

Objected to. Objection sustained.

"Q. Will you state the amount of money that has been received by the receivers, taking the two receipts to be correct, $7,000 and $4,000, and taking the subsequent payments made by you to Keen & Co., of $2,500, made after the production of their receipts, and of the $900 after the production of their receipts?"

Objected to. Objection sustained. Exception for defendants.

Defendants offer in evidence all of the checks paid by them to Keen & Co., subsequent to the production of the first receipt of $7,000.

Objected to. Objection sustained. Exception for defendant.

By the Court, to witness Wetter: "Q. There has been produced here a receipt for $4,000. Mr. Keen says you did not pay $4,000, but only gave $2,500. Is that so or not? A. Well they produced a receipt, your Honor, showing that they had, previous to that time, over $11,000 out. That made $11,000. Q. Of that $4,000, how much of it did your firm pay to Keen & Co.? A. On that particular day we paid $2,500, but prior to that we had already paid a portion of that $4,000. Q. But you had never paid the whole of the $4,000? A. I think we had. Q. Well, look and see. You heard Mr. Keen's version of that $4,000, didn't you? A. Yes, sir. Q. Was that accurate or not? A. For that date it was all right. We only paid $2,500, but we had paid before. Q. Is Mr. Keen's account of that correct, or do you differ with him? A. I differ with him. Q. Well, what is your difference? A. That we had...