Bittenbender v. Sunbury and Erie Railroad Co.

• Decision Date: 31 October 1861
• Citation: 40 Pa. 269
• Parties: Bittenbender <I>versus</I> The Sunbury and Erie Railroad Co.
• Court: Pennsylvania Supreme Court

40 Pa. 269

Bittenbender versus The Sunbury and Erie Railroad Co.

Supreme Court of Pennsylvania.

October 31, 1861.

ERROR to the Common Pleas of Northumberland county.

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Joshua W. Comly, for plaintiff, argued that, even if the agreement of March 26th 1857, were an assignment for the benefit of creditors, the defendants were not exonerated by it from their express promise to pay the plaintiff. That they had entered into the agreement voluntarily, had put their own construction on it, and agreed, if he would do their repairs, his claim against the Philadelphia and Sunbury Railroad Company should be paid as soon as the earnings of the road should be sufficient for the purpose. On Bittenbender's part (who had not seen the agreement), the contract was complied with. He announced his terms, and they were accepted by the Sunbury and Erie Company, who cannot avoid them on the ground that they mistook the legal effect of the agreement. Nor was the agreement void under the Act of April 26th 1855: Bright. Purd. 60.

The agreement of March 26th 1857 was authorized by the Act of March 13th 1847, was valid between the companies, no matter what direction the earnings of the Philadelphia and Sunbury Railroad Company takes. Preferences in assignments were valid before the Act of 1843, and this rule remains, except so far as it is allowed by the first section of that act, which is limited to cases where the assignment is made on account of "inability to pay debts," which is not this case, as disclosed by the evidence. There was evidence of indebtedness, but none of insolvency.

The Philadelphia and Sunbury Railroad Company had a right to make this preference. Without such a contract with some one, the road would be useless, and the claims against it almost worthless. The public interest also required that the trains even on an insolvent company's road should be run without interruption, which cannot be done without repairs. The claim was most meritorious, and entitled to protection.

But the "agreement" was no assignment for creditors. Who were the trustees? The Sunbury and Erie Railroad Company have no power in their charter to act in this capacity, nor can they assume it: Columbia Br. Co. v. Kline, 6 Penna. L. J. 324. The words in the sixth section are an assignment to Bittenbender of so much of the earnings of the road as would pay his debt, and not for assigning anything to the Sunbury and Erie Railroad Company. They were an order to pay him his claim out of the earnings, accepted and assented to by all parties. The addition of the words in brackets shows this. The intention of the parties is manifest, and was both legal and honest, and should not be defeated by a construction of their agreement, which is not only contrary to their intentions, but injurious to a meritorious creditor. The court are respectfully asked to reconsider their former opinion in this case and in the case of Lucas v. The Sunbury and Erie Railroad Company, 8 Casey 458.

J. B. & S. J. Packer, for defendant in error, contended that the agreement between the Sunbury and Erie Railroad and the Philadelphia and Sunbury Railroad Companies was in effect an assignment for the benefit of creditors, and that the real meaning of an instrument was not to be so covered by an ambiguous inversion of language as to defeat the operation of the law prohibiting preference among creditors: citing Lucas v. Sunbury and Erie Railroad Company, 8 Casey 464; Dufar v. Proff. Life Insurance Company, 4 Jurist, N. S. 841; 27 L. J. Rep. ch. 817; Dreisbach v. Becker, 10 Casey 152; Englebert v. Blanjot, 2 Whart. 240; Watson v. Bageley, 2 Jones 165; Petch v. Tatem, 15 M. & W. 110; Calkins v. Lockwood, 14 Conn. 226.

If the Sunbury and Erie Railroad Company could not act as trustees, the courts have power to appoint a proper person to act in this capacity.

If this instrument was an assignment, the plaintiff cannot recover. If not, he cannot recover, for he was not a party to the contract, and was a stranger to the consideration.

There are cases which seem to sustain the principle that one for whose benefit a promise is made may sustain an action, but not broad enough to enable a stranger to a contract under seal to enforce it by an action of assumpsit: Blymire v. Boistle, 6 Watts 182; Morrison v. Berkey, 6 Id. 351. The "promise to pay the plaintiff" is assumed in the plaintiff's argument without proof; on the contrary, the agreement between the companies was referred to by Mr. Merrick as the basis of their arrangement, which the plaintiff was as much bound to understand as Mr. Merrick was. Again, if plaintiff abandons the written agreement, and relies on a verbal promise, he is defeated by the Act of April 26th 1855, which requires a memorandum, or note in writing, to make one party answerable for the debt of another.

The opinion of the court was delivered, October 31st 1861, by WOODWARD, J.

The opinion of this court, which defeated the plaintiff's recovery three years ago, when the case was here, has never been reported and is mislaid, but the grounds of our ruling may be inferred from the reported case of Lucas v. The Sunbury and Erie Railroad Company, 8 Casey 458. The plaintiff's debt was against the Philadelphia and Sunbury Railroad Company, his action against the Sunbury and Erie Railroad Company. The only assumpsit proved against the latter company, was the promise of its president to pay plaintiff's debt out of future earnings of the road, as prescribed by the written agreement between the two companies, of 26th March 1857. But we held that agreement to be, in legal effect, an assignment for the benefit of the creditors of the Philadelphia and Sunbury Company, and consequently, that the preferences therein expressed were void. The promise of the assignee to pay, according to the expressed...