Quaker City Chocolate & Confectionery Co. v. Delhi-Warnock Building Association
| Decision Date | 30 June 1947 |
| Docket Number | 3052 |
| Citation | 53 A.2d 597,357 Pa. 307 |
| Parties | Quaker City Chocolate and Confectionery Company, Appellant, v. Delhi-Warnock Building Association et al |
| Court | Pennsylvania Supreme Court |
Argued May 27, 1947
Appeal, No. 205, Jan. T., 1946, from order of C. P. No. 5 Phila. Co., June T., 1943, No. 739, in case of Quaker City Chocolate and Confectionery Company v. Delhi-Warnock Building Association et al. Order reversed.
Assumpsit.
Defendants' affidavit of defense raising points of law sustained and judgment entered for defendants, opinion by SMITH, P.J Plaintiff appealed.
The order entering judgment is reversed, and the record is remitted with direction to permit plaintiff to amend its statement of claim within a limit of time to be prescribed by the court.
Earl Jay Gratz, for appellant.
C Brewster Rhoads, with him Theodore E. Nichterlein Henry Arronson and George G. Chandler, for appellees.
Before MAXEY, C.J., DREW, LINN, STERN, PATTERSON and STEARNE, JJ.
In this action of assumpsit plaintiff's statement of claim is patently defective in form. The court below deemed it also deficient in substance, sustained an affidavit of defense raising questions of law, and entered judgment in favor of defendants.
The statement avers that in certain prior proceedings there were "finally and conclusively determined and adjudicated" the following facts: That in the period between August 1, 1924 and March 1, 1929 plaintiff loaned sums of money aggregating $25,000 to Warnock Building Association and received in return the Association's notes payable to plaintiff (the terms of the notes are not set forth). That on or about March 1, 1929 plaintiff delivered these notes to Warnock and received from it certificates of its full-paid stock as collateral security for payments of the loans, "this having been intended as a temporary arrangement" (the terms of the arrangement are not set forth). That by various payments the loans were so reduced that the balance owing to plaintiff on or about March 1, 1931 was $14,400, payment of which was collaterally secured by 72 full-paid shares of Warnock. That in 1932 Warnock was about to merge with Delhi Building Association, whereupon plaintiff filed a bill in equity against Warnock to recover $14,400 alleged to be the value of the 72 shares, and on August 8, 1932 obtained judgment against Warnock in the amount of $9,103.68, (which Warnock had admitted to be the value of the shares) without prejudice to plaintiff's right to proceed for recovery of the remainder of its claim. That the merger between the two Associations was effected, the consolidated corporation being named Delhi-Warnock Building Association. That in November or December of 1936 an arrangement was entered into whereby plaintiff received $695.42 on account of the loans, "that is, in partial payment of said judgment," surrendered the 72 shares to Delhi-Warnock, and received in lieu thereof 66 1/2 full-paid shares of that Association. That on June 10, 1937 Delhi-Warnock, under the threat of execution being issued on the judgment, paid plaintiff $50 on account of the judgment and loans. That on August 7, 1937 plaintiff revived the judgment by sci. fa. proceedings and on July 24, 1940 issued an attachment execution thereon. That on July 29, 1940 the liquidating trustees of Delhi-Warnock (which had commenced voluntary liquidation in October, 1937), filed a bill in equity to have the judgment marked to their use. That on August 13, 1940 they entered a rule to open the revived judgment and on February 18, 1941 a rule to set aside the lien thereof. That by orders and decrees of June 17, 1942 the court discharged defendants' rules, made absolute a rule of plaintiff for judgment against the garnishee in the attachment execution proceedings, and dismissed defendants' bill in equity, and these orders and decrees were affirmed on appeal ( Quaker City Chocolate and Confectionery Co. v. Warnock Building Association, 347 Pa. 186, 32 A.2d 5). The statement of claim then proceeds to aver that on or about December 7, 1943 defendants completed payment of the judgment of $9,103.68, that plaintiff's loans were, as of May 1, 1932, in the principal amount of $14,400, and that, after credit for payment of the judgment, the balance due by defendants, "the liability of defendants for which has been finally and conclusively determined and adjudicated in said prior proceedings", is $5,296.32, with interest thereon from May 1, 1932. The present action is brought to recover that amount.
Disregarding for the moment the form of the statement of claim which, instead of categorical averments of the making of the alleged loans, the terms thereof, and the subsequent modifications and arrangements between the parties in regard thereto, merely states that the "following facts and matters... were in issue and were finally and conclusively determined and adjudicated," it is clear from an examination of the "prior proceedings" relied upon by plaintiff and incorporated by reference thereto in the statement of claim, that, as was rightly held by the court below, there has not been any determination or adjudication of the facts upon which plaintiff's present claim depends. The only action heretofore instituted by plaintiff was its bill in equity filed in 1932, but that proceeding was brought by it, not as a creditor of Warnock, but as an "owner" of 72 shares of Warnock stock expressing disapproval of the proposed merger with Delhi and, as a dissenting shareholder, demanding, in accordance with familiar principles of corporation law, that it be paid the value of its shares. Nothing was there claimed or involved in regard to any debt due from Warnock to plaintiff by reason of loans, nor was there any allegation that the 72 shares were held by plaintiff as collateral for any loans. The judgment of $9,103.68 was entered because Warnock admitted that that was the value of the shares, and plaintiff was granted the right to proceed for the remainder of its claim for the greater value of the shares which it asserted in its bill in equity. [1] All that this proceeding involved, therefore, was, in effect, a forced purchase or redemption of these shares by Warnock, since the law did not compel plaintiff to become a shareholder...
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