Clark v. Sigua Iron Co.

• Court: U.S. Court of Appeals — Third Circuit
• Citation: Clark v. Sigua Iron Co., 81 F. 310 (3rd Cir. 1897)
• Decision Date: 01 June 1897
• Parties: CLARK et al. v. SIGUA IRON CO.

81 F. 310

CLARK et al. v. SIGUA IRON CO.

United States Court of Appeals, Third Circuit.

June 1, 1897

Joseph S. Clark and Richard C. Dale, for plaintiffs in error.

George Tucker Bispham, for defendant in error.

Before ACHESON, Circuit Judge, and BUTLER and BUFFINGTON, District judges.

BUFFINGTON District Judge.

This case arises on a writ of error to the circuit court of the United States for the Eastern district of Pennsylvania, sued out by Edward W. Clark and others, defendants in a suit brought against them by the Sigua Iron Company. That court made absolute a rule to enter judgment for want of a sufficient affidavit of defense, and its action in so doing is here assigned for error. The statement of claim averred the plaintiff company on January 6, 1894, recovered judgment against F. F. Vandervort in the court of common pleas No. 3 of Allegheny county for $3,855.21, which judgment was subsequently affirmed by the supreme court of Pennsylvania (164 Pa.St. 572, 30 A. 491); that on February 4, 1894, the plaintiff company was placed in the hands of a receiver by the United States circuit court for the Eastern district of Pennsylvania; that on January 5, 1895, the defendants in the present suit received from Vandervort, for the use of the plaintiff, the amount of said judgment and interest; that 'having so had and received the said moneys for the use of the plaintiff, the defendants became and are liable to pay the said moneys to the said plaintiff, with interest' that demand for such payment was made before suit brought and refused. It will be noted that by the plaintiff's statement its right to recover is based upon the receipt by the defendants 'for the use of the plaintiff' of the amount of its judgment against Vandervort, and that, having so received it, and refused to pay it over, a right of action accrued to the plaintiff. It would, therefore, appear that the liability of defendant to pay arises from the averred fact that defendant received the moneys for the plaintiff's use, for, if they did not so receive it, no other grounds of legal or equitable liability are set forth. In the affidavit of defense filed this averment is traversed in the most explicit language, to wit: 'And the statement contained in the plaintiff's statement of claim that said money collected under said judgment and paid to the defendants was due and received by the defendants on behalf of the plaintiff is absolutely false.' This explicit traverse placed in issue the question of fact upon which, by the plaintiff's only showing, its right to recover rested, and was in itself sufficient to prevent judgment.

It is said, however, that the foregoing traverse was merely the defendants' deduction or conclusion, based upon the written contract between the parties, a copy of which defendants filed with their affidavit. As the court below based its action upon the construction of the contract, we deem it proper this court should express its views upon that point as well. By the recitals of such contract, which was between the Sigua Iron Company, the plaintiff, and E. W Clark & Co., the defendants, it appears that on its date, June 15, 1893, the defendants held $24,500 of the Sigua Iron Company's bonds as collateral security for the payment of $30,000 owing to them on that company's demand note. The company had claims aggregating $24,500 against certain named shareholders in designated sums for unpaid capital stock, among others F. F. Vandervort, who owed $30 per share on 100 shares. Clark & Co. agreed to surrender the $24,500 collateral bonds 'upon the terms and conditions hereinafter set forth,' which terms, as pertinent to the present question, were as follows:

'First. Messrs. E. W. Clark & Co. will release the aforesaid twenty-four thousand five hundred (24,500) dollars of bonds when and as the same are needed for sale or pledge by the Sigua Iron Company, the amounts realized from said sales or pledges to be deposited with Messrs. E. W. Clark & Co. to the credit of the Sigua Iron Company, to be held subject to be drawn out at will, from time to time, by the Sigua Iron Company on its check or checks. Second. The Sigua Iron Company agrees to pursue the aforesaid stockholders, to wit, Messrs. Greene, Vandervort, Berlin, and Loring, and use every effort to collect the amounts unpaid on the stock standing in their names respectively, and by litigation, if necessary. This litigation shall be placed in the hands of such attorneys as may be appointed for the purpose by Messrs. E. W. Clark & Co. Any sums collected by the company from these stockholders shall be received by the company for the benefit of Messrs. E. W. Clark & Co., and shall be paid to said Clark & Co. And any judgment which may be recovered against any or all of said stockholders shall, at the request of Messrs. E. W. Clark & Co., be assigned to them. Any sums of money realized by said Clark & Co. out of any such judgment or judgments, or any money collected by the company from the said stockholders, and paid over to said Clark & Co., shall be received by said Clark & Co. as part payment of the aforesaid note of thirty thousand (30,000) dollars.'

The affidavit recites that by the contract the iron company assigned and transferred to the defendants its claim against Vandervort; the fact that the suit against him was instituted by the iron company for the benefit of the defendants under the terms of the contract, and that the money was collected paid over to Clark & Co. as their...