Edward E. Buhler Co. v. Chidester

• Decision Date: 17 July 1918
• Docket Number: 44
• Citation: 262 Pa. 130,105 A. 52
• Parties: Buhler Company, Appellant, v. Chidester
• Court: Pennsylvania Supreme Court

105 A. 52

262 Pa. 130

Buhler Company, Appellant, v. Chidester

No. 44

Supreme Court of Pennsylvania

July 17, 1918

Argued March 28, 1918

Appeal, No. 44, Jan. T., 1918, by plaintiff, from judgment of C.P. No. 1, Philadelphia Co., Dec. T., 1913, No. 3226, for defendant in case of Edward E. Buhler Company v. David D Chidester. Reversed.

Assumpsit on a promissory note. Before PATTERSON, J.

The opinion of the Supreme Court states the facts.

Verdict for defendant and judgment thereon. Plaintiff appealed.

Errors assigned were answers to points, the refusal of the court to direct a verdict for the plaintiffs and to enter judgment for plaintiffs n.o.v.

The ninth and tenth assignments of error are sustained, the judgment is reversed and the record is remitted with direction that judgment be entered for the plaintiff non obstante veredicto for $3,000, and the charges of protest and interest from June 26, 1912.

Joseph P. McCullen, with him James B. McGrane, for appellant. -- In the hands of the complainant the note was more than a mere pledge or a mere collateral security for indebtedness. Plaintiff acquired the note in due course for conditional payment: Lishy v. O'Brien, 4 Watts 141; Depeau v. Waddington, 6 Wh. 220; Munn v McDonald, 10 Watts 270; Work v. Kase, 34 Pa. 138.

Defendant being the principal debtor is not discharged by a composition of a holder with the accommodated endorser, but would equitably be entitled to the benefit of an actual payment by the latter or to any reduction in the debt for which the note was held: Love v. Brown, 38 Pa. 307.

John C. Gilpin, for appellee. -- In the absence of an express agreement to the contrary, the presumption of law favors the creditor; that the note received by a creditor is held only as collateral security.

Before BROWN, C.J., POTTER, MOSCHZISKER, FRAZER and WALLING, JJ.

OPINION

MR. CHIEF JUSTICE BROWN:

In April, 1911, the Atkinson Construction Company owned the Edward E. Buhler Company, the appellant, $9,474.85. On the 26th of that month Davitt D. Chidester, the appellee, gave to his friend, George H. Atkinson, his promissory note for $3,000, payable to the order of Atkinson some days after date. The note was made for the accommodation of Atkinson, to enable him to give it to the Edward E. Buhler Company on account of the indebtedness to it of the Atkinson Construction Company, of which Atkinson was treasurer. He endorsed the note as an individual and as treasurer of the construction company, and delivered it to the appellant. It was renewed from time to time, and this action is on the last renewal, dated March 26, 1912. The defense made in the court below was that the original note had been given merely as security for a portion of the indebtedness of the Atkinson Construction Company to the appellant, and as the same had been paid or discharged, there was no further liability on it. This defense, allowed by the trial judge, prevailed in the court below, and from the judgment on the verdict in favor of the defendant, there is this appeal by the plaintiff, whose just contention is that, under the evidence, a verdict should have been directed in its favor.

The appellant dealt only with Atkinson in the negotiations which led up to his giving it the original note of the appellee, in April, 1911. From Atkinson's own testimony, which we quote at length as conclusive upon the appellee, who called him as his main witness, it most clearly appears that the note was endorsed to the appellant by Atkinson, as a partial payment of its claim against the construction company "Q. We want to take up the situation as it existed when this original note was given, 1911? A. At that time we owed Buhler $9,000, which he said was more than they could carry without some assistance. I asked Mr. Chidester Q. What sort of business was the Buhler Company in, in 1911? A. They were supplying us with cement on the railroad right-of-way contract -- the cement business. Q. What work was the Atkinson Construction Company doing at that time? A. Doing the right-of-way work on what was called the Merritt & Gilbert contract of the New York, Westchester & Boston Railroad, out of Pelham, just outside of New York City. Q. This railroad was in process of construction at that time? A. Yes, a new railroad. Q. And you had become responsible to Buhler & Company to the extent of some $9,000 for cement? A. About that amount; yes -- about $9,000, and I obtained this $3,000 accommodation note for them to use, to get money at their Sherman bank. Q. It enabled you, under your arrangement with Buhler, to carry your account? A. To get more cement, and carry the account; yes. . . . Q. Now you say that you gave the original note to Mr. Entwisle. Do you recall what was said between you and Mr. Entwisle when this note was to be given, as to why it was to be given, and what it was to be used for? A. Well, that the account was larger than it had been, and that they did not want to extend further credit unless we could make some payments on account. I got this note for them, and gave them $2,000 cash, as their statement shows at that time -- $5,000 payment. Q. There is no question about the fact in your mind that this note was given to secure the cement bill owing them. (Objected to.) Q. Just tell us what if any relation there was between the delivery of this note and the payment of this cement bill. A. That note was given as a check would be...