Bratten v. Catawissa R. Co.

• Decision Date: 06 March 1905
• Docket Number: 175
• Citation: 60 A. 319,211 Pa. 21
• Parties: Bratten, Appellant, v. Catawissa Railroad Company
• Court: Pennsylvania Supreme Court

60 A. 319

211 Pa. 21

Bratten, Appellant, v. Catawissa Railroad Company

No. 175

Supreme Court of Pennsylvania

March 6, 1905

Argued January 5, 1905

Appeal, No. 175, Jan. T., 1904, by plaintiff, from judgment of C.P. No. 3, Phila. Co., Dec. T., 1901, No. 3698, on verdict for defendant in case of James H. Bratten v Catawissa Railroad Company. Reversed.

Assumpsit for breach of contract. Before FINLETTER, P.J.

The facts appear by the opinion of the Supreme Court.

The court gave binding instructions for defendant.

Verdict and judgment for defendant. Plaintiff appealed.

Error assigned was in giving binding instructions for defendant.

The court below erred in directing a verdict for the defendant. The judgment is reversed and it is now ordered that judgment be entered for plaintiff in the sum of $2,320, with interest from August 1, 1900, the date of his demand for conversion.

D Stuart Robinson, of Beck & Robinson, for appellant. -- wherever a latent ambiguity exists and words of description have a double application, resort may be had to the text or to the situation of the parties and the circumstances under which it was entered into, for the purpose, not of changing the writing, but of furnishing light by which to ascertain its actual significance: Runkle v. Burnham, 153 U.S. 216 (14 S.Ct. Repr. 837); Hurley v. Brown, 98 Mass. 545; New England Dressed Meat, etc., Co. v. Standard Worsted Co., 165 Mass. 328 (43 N.E. Repr. 112); Ellis v. Lane, 85 Pa. 265; Dixon-Woods Co. v. Phillips Glass Co., 169 Pa. 167.

Where there is a doubtful or ambiguous meaning, it will be considered most strongly against the person using the language: Noonan v. Bradley, 76 U.S. 394.

Geo. Tucker Bispham, with him Charles Heebner, for appellee, cited: Storrow v. Texas Consolidated Compress & Mfg. Assn., 87 Fed. Repr. 612; Kirk v. Nice, 2 Watts, 367.

Before DEAN, FELL, BROWN, MESTREZAT, POTTER and ELKIN, JJ.

OPINION

MR. JUSTICE DEAN:

The question is as to the interpretation of the obligation of a bond secured by mortgage, delivered by defendant to M. P. Hutchinson, June 15, 1871, and the ownership of which by regular assignment and transfer had passed to Bratten, this plaintiff. The bond is dated October 1, 1870, as the day of issue, is in the sum of $500 and one of four bonds of a like sum issued at the same time to the same payee and of which plaintiff became the owner. Each bond, after providing for semiannual payment of interest at seven per cent, contains this stipulation:

"That the holder of this bond shall be entitled at any time after fifteen (15) years from the date thereof to convert the principal sum into preferred stock of the said company at par upon surrender of this bond with the coupons not due annexed."

On July 27, 1900, plaintiff notified the company in writing that his four bonds would be due August first following and that he demanded their conversion into preferred stock in accordance with the provision in the bonds and mortgage. The company refused to comply with the request, but the 27th of November following made this proposition in writing to plaintiff: "You are herewith tendered the sum of $2,036.33 August 1, 1900, at the rate of six per cent per annum to this date." Which tender the plaintiff refused. The company had issued and there were then in the market two issues of its preferred stock, one called the "old preferred" and the other the "new preferred" each at par value of $50.00 per share and as plaintiff averred and proved selling in the market at $58.00 per share. He brought suit against defendant for damages, claiming the market price of forty shares of the preferred stock with interest from August 1, 1900, the date of his demand for conversion. The court below directed a verdict for defendant and plaintiff appeals.

At the date the bonds matured there were but two classes of stock, common and preferred, and in the fifteen years before maturity the company had issued no other. By the act of incorporation of the company, March 21, 1860, P.L. 234, it had authority to issue $3,350,000 of stock, $2,200,000 of preferred and $1,150,000 of common, each share of the par value of $50.00; of the preferred the act itself directed that 3,000 shares should be applied in discharge of a "confidential" debt to the Erie Railroad Company. All the stock, common and preferred, specifically mentioned in the act had prior to 1869 been issued, at least in the minutes of the company for that year it is called "outstanding." But in the original act was this further provision, "And the said corporation may by a vote of its preferred stockholders at a meeting duly and specially convened at which three-fourths in amount of said preferred stock shall vote in favor thereof, shall have a right to increase the amount of the preferred or common stock for real estate for use of said company or for the extension of its road."

Under this authority the company determined to extend its road to Williamsport. A meeting of the preferred stockholders was called, which meeting on September 16, 1870, resolved to execute a mortgage upon all its property to secure a loan of $1,000,000 and issue bonds to that amount in denominations of $500 and $1,000 to be used in the construction of the extension to Williamsport; the bonds to be payable, principal and interest, at the end of thirty years or be convertible at the end of fifteen years into preferred stock at the option of the holder. The plaintiff's bonds are part of those authorized by...