Evans v. Goodwin

• Decision Date: 03 February 1890
• Docket Number: 36
• Citation: 132 Pa. 136,19 A. 49
• Parties: D. G. EVANS, ASSIGNEE, v. W. W. GOODWIN
• Court: Pennsylvania Supreme Court

19 A. 49

D. G. EVANS, ASSIGNEE, v. W. W. GOODWIN

132 Pa. 136

No. 36

Supreme Court of Pennsylvania

February 3, 1890

Argued January 14, 1890 [Copyrighted Material Omitted] [Copyrighted Material Omitted]

APPEAL BY DEFENDANTS FROM THE COURT OF COMMON PLEAS NO. 3 OF PHILADELPHIA COUNTY.

No. 36 July Term 1889, Sup. Ct.; court below, No. 854 December Term 1886, C.P. No. 3, in Equity.

To the term and number stated in the court below, Daniel G. Evans, assignee for the benefit of creditors of Charles N. Selser, John A. Selser, and George W. Turner, trading as Selser & Bro., filed a bill in equity against Wm. W. Goodwin. An answer having been filed and issue joined, the cause was referred to Mr. H. K. Boyer as master, who reported:

The bill alleges that the plaintiff was, by deed of assignment dated June 9, 1886, duly appointed assignee of Selser & Bro., for the benefit of their creditors, and that he accepted the trust.

That he found among the assets of the said firm certificates for 1,500 shares of stock of the Globe Telephone Company, with a receipt dated February 4, 1884, of which the following is a copy:

(EXHIBIT A.)

"Received of Selser & Bro. their notes for nine thousand dollars at four months, which I agree to use in bank, proceeds to apply to the payment of one thousand shares Globe Telephone stock at nine dollars per share; said stock to be held by Selser & Bro. in trust, and not to be sold or in any manner disposed of, unless mutually agreed upon by W. W. Goodwin and said Selser & Bro. When the stock is sold, the profit or loss to be equally divided between us. In case the stock is not sold by the time the said notes become due, the notes are to be renewed from time to time, as often as may be desired.

"W. W. GOODWIN.

"I hold myself responsible for one half of the amount assumed by W. W. Goodwin.

"C. A. BOCKHOVEN."

And also a letter dated June 12, 1884, from defendant to Selser & Bro., of which the following is a copy:

(EXHIBIT B.)

"Gentlemen: In view of the depreciation in the value of the stock of the Globe Telephone Company, and the fact that Mr. Bockhoven failed to secure a renewal of the notes, and in view of such fact that you have been compelled to raise the larger proportion of the amount necessary to pay the notes referred to in the agreement between us, I hereby send you certificate No. 1,164 for five hundred shares of the Globe Telephone Company's stock in my name; the same to be held by you as collateral security towards protecting you from any loss in the matter.

"I hereby agree that I will divide equally between you and myself the amount that the said five hundred shares may bring over and above five (5) dollars per share, as a consideration to you for having had to protect your own paper in this transaction. This stock, however, is not to be sold except upon the terms and conditions contained in the original agreement, namely, by mutual agreement.

"Please acknowledge the receipt of the stock and this letter, upon the bottom of the duplicate letter which accompanies it, and oblige,

"WM. W. GOODWIN."

That he, the plaintiff, inferred from the said exhibits, and was informed by the assignors, that the said firm and the said defendant were partners in the stock transaction referred to in the said exhibits, and that the said defendant had an unliquidated interest in the said telephone stock; that no settlement of their joint account or copartnership account has ever been had, and that the books of account of said firm of Selser & Bro. show an indebtedness of said defendant to said firm in the sum of $5,000, which amount, or so much as may be found to be due upon a properly stated account, the plaintiff belives he was entitled to as such assignee; and thereupon he prayed: 1. That said defendant answer this bill. 2. That a master be appointed, before whom the defendant shall be required to appear, and that said master take testimony and state an account with respect to said stock transaction between the plaintiff's assignors and defendant. 3. That a decree be entered authorizing said plaintiff to sell or dispose of said stock in an equitable manner, and that the defendant shall be ordered and decreed to pay to the plaintiff such sum as an account may show due by him to said plaintiff. 4. Such further equitable relief as may be necessary.

The defendant answered the bill, and stated:

That he had no knowledge or information concerning the said assignment. That he admitted the execution of the papers, exhibits A and B, but that said papers did not express the whole contract between defendant, Mr. Bockhoven, and plaintiff's assignors, alleging that the said papers were executed under circumstances and subject to contingencies thereinafter mentioned. He denied all knowledge concerning the said 1,500 shares of stock, excepting 500 shares, which he said was presumably the stock referred to in exhibit B. He then says he is advised that the bill is defective in not joining as a party defendant, C. A. Bockhoven, who was in fact, he alleges, a partner in the transaction.

He then denies that he was a copartner generally with plaintiff's assignors in any purchase and sale of stock, as averred in the third paragraph of the bill, but admits that he was a party to an agreement with them and C. A. Bockhoven, by which he was to share to the extent of one quarter in any profit or loss on the purchase and sale of 1,000 shares of said stock, to be bought by Mr. Selser. That the paper, exhibit A, was prepared by Mr. Selser. That he never received or indorsed the said notes, which he believed were delivered to Mr. Bockhoven; and among other things, averred that the said 1,000 shares of stock were not those originally purchased under said agreement, and that said firm suffered no loss thereon. He denies being indebted to plaintiff's assignors, or that they had ever made a demand on him, and averred that the letter, exhibit B, with the stock therein referred to, were obtained from him by misrepresentations of the actual facts.

It will be observed that the defendant admits the execution of the papers, exhibits A and B, but says they do not express the whole contract, and avers that they "were executed under circumstances and contingencies hereinafter mentioned." These circumstances and contingencies he does not mention, however, nor does he anywhere in the answer set forth that part of the contract not expressed in the writings, viz.: exhibits A and B.

He denies that he was "a partner generally with plaintiff's assignors in any purchase and sale of stock as averred in the third paragraph of the bill." There is no such charge; the allegations therein refer wholly to the single transaction. Again, in the fourth paragraph of his answer, he admits a partnership, but claims that one C. A. Bockhoven was also interested therein, which is one of the questions in dispute. He denies that the said 1,000 shares of stock were purchased with the proceeds of the discounted notes, or that they were the assets of the adventure under the agreement, exhibit A.

Therefore, the only questions in dispute under the pleadings are five: . . . .

1. Was Bockhoven a partner with Selser & Bro. and Goodwin in the said adventure?

The master then considered the testimony bearing upon the foregoing question and proceeded:

Mr. Turner's testimony agrees with Charles N. Selser's; so that we have the testimony of John A. Selser, Charles N. Selser, and George W. Turner, all testifying clearly and emphatically that Mr. Bockhoven had no interest of any kind with them, but that he was acting throughout wholly as the agent and representative of Mr. Goodwin. And in addition to this, the exhibits in evidence all tend to confirm the plaintiff's views and contradict the defendant; so that the master has no difficulty in reaching the conclusion that C. A. Bockhoven was not a party to the contract with Selser & Bro.

2. Are the said 1,000 shares of stock which are in evidence the shares bought with the proceeds of the discounted notes for joint account of Selser & Bro. and W. W. Goodwin?

The defendant in his answer says, that he has reason to believe, and so avers, that if the plaintiff's assignors bought the 1,000 shares of said stock, in pursuance of the agreement of February 4, 1884, they did not continue to hold the same, and suffered no loss thereon. This denial is quite feeble, but is quite as strong as plaintiff's averment, and is sufficient to put plaintiff to the proof of the fact.

After discussing the testimony relating to this subject, the report proceeded:

In view of testimony of this kind no doubt is left in the mind of the master that the stock in evidence is the same purchased with the proceeds of the discounted notes.

The other certificate, No. 1164, in evidence, for 500 shares, dated February 27, 1884, in name of William W. Goodwin, and by him assigned in blank June 12, 1884, is, without a doubt, and so admitted by defendant, the same certificate which the defendant sent to Selser & Bro., June 12, 1884, enclosed with the letter, exhibit B, as security, as stated in the letter.

3. Has there been a loss?

The defendant says in his answer "that said firm suffered no loss thereon." The evidence is that the said stock is now of little value; that it was worth about twenty-five cents a share at the time the bill was filed. It cost $9 a share, a loss of $8.75 a share. . . .

4. Did the plaintiff or plaintiff's assignors ever make a demand for payment on the defendant before the plaintiff filed this bill?

The evidence is that not only did the plaintiff request of defendant a settlement of this matter, but that the assignors also urged the defendant to pay one half of the money invested, which he failed to do. . . .

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