Hodenpyl v. Hines

• Citation: 160 Pa. 466,28 A. 825
• Decision Date: 12 March 1894
• Docket Number: 125
• Parties: Hodenpuhl et al., Assignees of DeGontard & Reynolds, v. Hines et. al., Appellants
• Court: United States State Supreme Court of Pennsylvania

28 A. 825

160 Pa. 466

Hodenpuhl et al., Assignees of DeGontard & Reynolds, v. Hines et. al., Appellants

No. 125

Supreme Court of Pennsylvania

March 12, 1894

[Copyrighted Material Omitted]

Argued February 20, 1894

Appeal, No. 125, Jan. T., 1894, by Samuel Hines et al., from judgment of C.P. Lackawanna Co., Sept. T., 1892, No. 817, in favor of plaintiffs, A. J. G. Hodenpuhl, and A. B. Williams assignees of DeGontard & Reynolds, on trial by court without a jury. Affirmed.

Sheriff's interpleader.

Trial by court without jury, under act of 1874.

The following opinion was filed by ARCHBALD, P.J.:

"[1. For several years prior to May 23, 1892, the firm of DeGontard & Reynolds were engaged in the general jewelry business at Scranton, Lackawanna county, Pa. The partnership was composed of Walter DeGontard, who had his residence at Scranton, and was the managing partner, and Dr. Samuel Reynolds, who lived at Reynoldsville, Jefferson county, Pa., about 300 miles, or a day's travel, distant from Scranton.]

"[2. About six months prior to the said 23d day of May, 1892, the said firm became financially embarrassed, and was compelled to secure an extension of time from its creditors, upon an agreement to make certain monthly payments. In May, 1892, these payments had not been kept up, and the firm was at least two months in arrear. The liabilities were about six or seven thousand dollars, and the stock and fixtures were worth somewhere from seven to nine thousand dollars, but the firm had no ready money, and was not able to meet its obligations as they came due. In order to make the payments which had so far been made on the extension obtained from creditors, it had been compelled to raise money by the pledge of some of the stock and fixtures of the store, and at least one of the creditors had begun to press the firm by suit. Mr. DeGontard had also given three notes, with confessions of judgment in the name of the firm, one to Samuel Hines, one of the defendants in this issue, for $1,000, dated March 4, 1891, payable one day after date; another to James Stone, another of the defendants, also for $1,000, dated April 1, 1890, and payable in one year from its date, and the third to T. B. Byner, another of the defendants, for $249.54, dated February 5, 1892, payable in four monthly installments. These notes were outstanding, and in large part unpaid at this time.]

"[3. In view of the condition of things recited in the last paragraph, Mr. DeGontard, the managing partner, went to New York city on May 23, 1892, to consult with some of the largest creditors of the firm, who had assisted in securing the previous extension, and see what could be done. This step was taken without notifying his partner, Dr. Reynolds, or advising with him as to the situation of the business. As the result of this consultation, and under the advice of Mr Hodenpuhl and Mr. Openheimer, representatives of two of the principal creditors, Mr. DeGontard was prevailed upon to then and there execute a deed of trust in the name of the firm to Mr. A. J. G. Hodenpuhl, of New York, and Mr. A. B. Williams, of Scranton, for the benefit of creditors. This deed was a complete assignment of all the stock, fixtures, outstanding accounts and property belonging to the business of the firm, and provided that out of the proceeds of the sale of said property the following creditors should be preferred and paid in full, viz.: The Traders' National Bank of Scranton, of which Mr. Williams, one of the assignees, was cashier, $1,500; Hodenpuhl & Sons, $744.52, H. E. Openheimer & Co., two bills, one of $879.20, and one of $364.20; and other smaller creditors to the amount of about $1,700. After these preferences were paid the surplus, if any, was to be paid pro rata to certain other creditors named in the deed. Immediately after the execution of this assignment it was sent by mail to Scranton for record, and the next morning, May 24th, Mr. Hodenpuhl sent his clerk to the same place to take an account for him, as assignee, of the stock of the firm.]

"4. The deed of assignment was filed for record in the office for recording deeds, etc., at Scranton, Lackawanna county, Pa., on May 24, 1892, at a quarter before two o'clock, P.M. The same day an execution for $1,000 was issued out of the common pleas of said county, to No. 518, June term, 1892, on a judgment entered in favor of Samuel Hines v. DeGontard & Reynolds, which execution was received by the sheriff the same day at five minutes past three o'clock, P.M. Another execution for $500 was also issued the same day against the same defendants on judgment in favor of James Stone, No. 522, June term, 1892, and received by the sheriff at a quarter past five o'clock the same afternoon. These judgments were entered on the confessions of judgment referred to above in the second paragraph. Similar executions were issued the next day in favor of Martha E. DeGontard, Everett Warren, trustee, H. E. Openheimer, trustee, and H. L. Jacobs, trustee, on confessions of judgment given by Mr. DeGontard, in the name of the firm, May 25, 1892, and made payable on demand, and by T. B. Byner for a small balance due on the confession of judgment mentioned above. Under the several executions the sheriff seized upon the personal property of the defendant's firm, found in the store at Scranton, and advertised the same for sale, and these goods being claimed by Hodenpuhl and Williams, as assignees under the deed of assignment, the sheriff applied for and obtained a rule for an interpleader, and an issue was directed. This is the issue now being tried, the assignees being the plaintiffs therein, and the execution creditors defendants. Subsequently the sheriff was allowed to go on and make sale of the property under an arrangement between the assignees and the execution creditors that this should be done, and the right to the proceeds be determined by the result of the issue.

"[5. The deed of assignment referred to above was executed and delivered by Mr. DeGontard, in the firm name, without the knowledge or assent of Dr. Reynolds, his partner, but a telegram was sent from New York by Mr. Openheimer the same evening to the latter, and also a letter, notifying him that an assignment had been made. The telegram does not appear to have been received. After Mr. DeGontard got back to Scranton from New York he telegraphed to Dr. Reynolds to come on stating that the store was in the hands of the sheriff. He said nothing, however, about the assignment having been made, not understanding himself that such was the case, his idea of the trust deed being that it was merely an arrangement for still further carrying on the business. The first intimation Dr. Reynolds had that the property of the firm had been transferred to trustees for the benefit of creditors was by the letter of Mr. Openheimer, which was received by mail May 26, 1892. Prior...