Gibson v. Erie
| Decision Date | 07 May 1900 |
| Docket Number | 132 |
| Citation | 196 Pa. 7,46 A. 102 |
| Parties | Gibson v. Erie |
| Court | Pennsylvania Supreme Court |
Argued April 25, 1900
Appeal, No. 132, Jan. T., 1900, by defendant, from judgment of C.P. Erie Co., May T., 1898, No. 21, on verdict for plaintiff in case of Susan Gibson v. City of Erie. Affirmed.
Assumpsit upon municipal bonds. Before WALLING, P.J.
The facts appear by the opinion of the court below infra.
The court gave binding instructions for plaintiff.
Verdict and judgment for plaintiff for $11,041.66.
The court refused a new trial, WALLING, P.J., filing the following opinion:
This suit was brought to recover on ten municipal coupon bonds for $1,000 each, issued by defendant January 1, 1887, and being numbered from 31 to 40, inclusive. Said bonds were made payable at the Keystone National Bank of Erie, Pa., on January 1, 1907, and each of said bonds contains a clause as follows: "Redeemable at the pleasure of the city of Erie on and after the first day of January, A.D. 1897." The proper officials of defendant city in November, 1896, elected to redeem the bonds in suit, and certain other bonds of the same issue, on January 1, 1897, and duly issued a call therefor stating that the city would redeem said bonds on January 1, 1897, and that the interest would cease on above date, which call was duly published in three local papers and in two New York city papers, and, so far as possible, the defendant's city controller notified the original purchasers by letter. It does not appear that the defendant had any knowledge that the plaintiff was the owner of the bonds in suit, or that the plaintiff, who resides at Jamestown, Pa., had any actual notice or knowledge of said call. The plaintiff became the owner of the bonds in suit in 1887, and continued such owner down to the time of the trial of this case, and on September 26, 1887, the plaintiff made a special deposit of the bonds in suit, and $20,000 of other Erie city coupon bonds, in said Keystone National Bank of Erie for safekeeping, at which time plaintiff took a receipt from said bank as follows, viz:
Which bonds remained in said bank until after the failure of the bank, which occurred in June, 1897, and the defendant paid the semiannual interest on said issue of bonds through said bank up to January 1, 1897. The evidence shows that the plaintiff was in the habit of writing to said bank at the end of each six months and each time asking it to send her, or give her credit for, the semi-annual interest on said bonds which was done. The bank never had any interest in the bonds in question or authority over them, except as such special deposit, and except the special authority which plaintiff gave the bank from time to time to remit her or credit her with the semi-annual interest on said bonds. There is no evidence tending to show that Mrs. Gibson ever gave the bank any general authority to collect interest on the bonds for her, or any authority whatever to collect the principal of the bonds. The bank never assumed to collect the principal of said bonds, and, so far as appears, neither the city of Erie nor any of its officers had any knowledge that the Keystone National Bank had possession of the bonds in controversy.
After the failure of the bank the receiver, owing it would seem to a controversy which had arisen between Mrs. Gibson and the city of Erie, declined to surrender the bonds to plaintiff and she obtained them by a writ of replevin.
On December 31, 1896, the defendant deposited $40,000 in said bank for the redemption of the bonds which had been called in, and took a receipt therefor as follows:
The call was for $50,000 of bonds and the defendant had an arrangement with the bank to furnish the balance when needed.
The bank paid $31,000 in redemption of such of said bonds as were presented prior to the failure of the bank in June 1897, at which time the remaining $9,000 stood on the books of the bank to the credit of the city. Although I infer that the money had been placed with the general funds of the bank and used for other purposes.
After the plaintiff obtained the custody of her bonds she did on January 12, 1898, demand payment of the same from the defendant, which was refused, except that the city offered to pay one of the bonds, which plaintiff declined to accept. And this suit was subsequently brought to recover the amount of the ten bonds.
At the trial the jury, under instructions from the court, found for plaintiff for the $10,000 and lawful interest from the date of such demand. I am still of the opinion that the verdict is correct.
The city paid this $40,000 to the bank as its agent. And in the redemption of these bonds the bank was clearly acting as the agent for the city and not the agent of the bondholders: Williamsport Gas Company v. Pinkerton, 95 Pa. 62; and it is also there held that there is no obligation on the holder of the bond to present and demand payment upon the same within a reasonable time. And that such holder could not lose by the insolvency of the bank.
The city in the present case was not misled. It had no knowledge that the bank had the custody of plaintiff's bonds. This depositing of the $40,000 in the bank was not a payment of any of the bonds, and was not so intended. It was placed there that the bank might pay off the bonds for the city as they should be presented. Enough was not deposited to pay all the bonds, and certainly the city did not appropriate it or direct its appropriation to the payment of any particular part of the $50,000 call. There was $40,000 of this call of bonds not held by plaintiff, and had all of such other bonds been presented to the bank it would have been plain duty of the bank to have redeemed such other bonds when presented, although that would have exhausted the deposit and left plaintiff's bonds unpaid. In fact the bank did expend $31,000 in redemption of such other bonds. How can it then be successfully urged that the remaining $9,000 actually paid that amount of Mrs. Gibson's bonds; for if the city's placing the $40,000 in the bank operated as a payment of any of plaintiff's bonds it paid them all, which is not contended.
Had the city found these bonds in the possession of the bank and paid the amount to the bank in redemption of the bonds the case would be entirely different.
The fact that the replevin suit, by which plaintiff recovered possession of the bonds from the receiver of the bank had not been terminated when this case was called for trial is not material. The evidence...
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First State Bank of New Castle
... ... William ... McElwee, Jr., for appellant. -- The claimant was a depositor: ... Salem Twp. Road, 103 Pa. 250; Gibson v. Erie, 196 ... Pa. 7; Fogg v. Tyler, 82 A. 1008; South Philadelphia ... State Bank v. Nat. Surety Co., 288 Pa. 300; Whitney ... v. Boardman, 118 ... ...