Russ v. Sadler

• Decision Date: 11 July 1900
• Docket Number: 359
• Parties: Russ v. Sadler
• Court: Pennsylvania Supreme Court

46 A. 903

197 Pa. 51

Russ v. Sadler

No. 359

Supreme Court of Pennsylvania

July 11, 1900

Argued April 24, 1900

Appeal, No 359, Jan. T., 1900, by defendants, from order of C.P. Cumberland Co., making absolute a rule for judgment for want of a sufficient affidavit of defense, in case of Patrick Russ v. W. F. Sadler, W. A. Coffey, H. G. Beetem, J. L Kaufman and J. B. Kaufman. Affirmed.

Assumpsit by an accommodation indorser of a promissory note against prior indorsers. Before BIDDLE, P.J.

The note was as follows:

"$5,000.

CARLISLE Pa., Jan. 24, 1898.

"Thirty days after date I promise to pay to the order of W. F. Sadler, W. A. Coffey, H. G. Beetem, J. L. Kaufman, J. B. Kaufman, at the Commonwealth Guarantee, Trust and Safe Deposit Co., Harrisburg, Pa., $5,000, for value received, without defalcation.

"As collateral security for the payment of this note, and of any other indebtedness or liability on my part to the holder hereof, now incurred or hereafter so to be incurred, while such collaterals remain in their hands, I have deposited herewith $12,500, of bonds of the Greensburg & Mt. Pleasant St. Railway Co., Nos. 1 to 5 inclu. & Nos. 101-115 inclu. which I authorize the holder hereof or his assigns, upon the non-payment at maturity either of this note or of the indebtedness or liability aforesaid, to sell either at the Broker's Board or at public or private sale, without any previous demand on or notice to me and to apply the net proceeds, after deducting costs of sale, or so much thereof as may be required, to the payment of this note, and any such indebtedness or liability as aforesaid, or either of them, at his option, in full or partially, as such proceeds may suffice, holding me still responsible for any deficiency. And at any such sales aforesaid the holder thereof pledgee is expressly empowered to become the purchaser provided he shall be the highest bidder therefor, and all equities, rights and interests of the pledgor or pledgors in said collateral securities shall be divested thereby as fully as if such sales had been made to a bona fide purchaser other than a party hereto. Authority to sell the collaterals specified in this obligation applies with equal force to any which may be added thereto or substituted therefor. Furthermore, I agree, that so often as the market price of these and subsequently deposited securities shall, before maturity of this note fall to a price insufficient to cover its amount, with ten per cent margin added thereto, I will on demand, within twenty-four hours thereafter, deposit with the holder additional security to be approved by said holder, sufficient to cover said amount and margin; and that, in default thereof, this note shall become instantly due and payable precisely as though it had actually matured, and all the foregoing rights to sell and transfer collaterals shall at once be exercisable at my risk in case of any deficiency in realizing proceeds. Due Feb. 23.

"W. F. SADLER.

"Endorsed:

"W. F. SADLER.

"WM. A. COFFEY.

"H. G. BEETEM.

"J. L. KAUFMAN.

"JOHN B. KAUFMAN.

"PATRICK RUSS.

"Pay any Bank, Banker, Trust Co. or order. Endorsements guaranteed.

"W. STUART, Cashier.

"Farmers' Bank, Carlisle, Pa.

"The within note paid by and for the use of Patrick Russ, Apr. 24th, 1899.

"W. STUART, Cash.,

"Farmers' Bank, Carlisle."

The affidavit of defense was as follows:

That the money borrowed on the note in suit, and for which the said note was given for the use of the Greensburg, Jeannette and Pittsburg Street Railway Company, and applied to the construction and equipment of the said street railway, is an indebtedness of the same, which fact was well known to the plaintiff at the time he became an indorser with the affiants on the said note.

That the said plaintiff was a director and officer of the said street railway company at the time said note was made. That at that time and previous thereto, he was the member of a syndicate composed of a number of gentlemen, who had united in the promotion and building of said street railway. That the said plaintiff has received from the said street railway $10,000 of its first mortgage bonds of the par value of $10,000 and 300 shares of its capital stock of the par value of $15,000. That he has only paid on the same the sum of $5,000 and that the affiants are advised, affirm and believe that he is a debtor to the said street railway company to a sum much larger than the amount of said note, at least the sum of $10,000.

That they are advised and believe that as the indebtedness created by said note was the indebtedness of the said street railway company, was borrowed for the purpose of promoting its interest and paying its obligations, and this being well known to the plaintiff, who joined with the defendants in this case in raising the money for that purpose, and the said plaintiff further being indebted to the said street railway company in a sum greater than said note, that he is not entitled to recover anything from the defendants in this case.

The court made absolute the rule for judgment for want of a sufficient affidavit of defense.

Error assigned was the order of the court.

The judgment is affirmed.

John Hays, with him Sadler & Sadler, for appellant. -- The affidavit was sufficient: Slaymaker v. Gundacker's Exrs., 10 S. & R. 83; Coburn v. Wheelock, 34 N.Y. 440.

The plaintiff being equally bound with the other indorsers on the note would at most be entitled only to contribution from each of them for an aliquot part of the sum paid by him: Cowell v. Edwards, 2 B. & P. 268; Croft v. Moore, 9 Watts, 453; State v. Shinn, 42 N.J. Law Rep. 138.

The right and duty of contribution is founded in equity; it does not depend upon contract: Shackamaxon Bank v. Kinsler, 16 W.N.C. 509; Dering v. Earl of Winchelsea, 1 Leading Cases in Equity, *100; Kennedy v. Carpenter, 2 Wharton, 362; Wells v. Miller, 66 N.Y. 255; Camp v. Bostwick, 20 Ohio 337; Rainey v. Yarborough, 2 Iredell's Equity (N.C.), 249; Allen v. Wood, 3 Iredell's Equity (N.C.), 386.

C. S. Brinton and A. R. Rupley, with them John E. Fox, for appellee. -- The affidavit should state the facts specifically and with sufficient clearness to enable the court to say whether or not they amount to a defense: Superior Nat. Bank v. Stadelman, 153 Pa. 634.

A defendant cannot set off a debt due to any one but himself; set-off can be made only by and between the parties: Longafelt v. Bartsher, 3 P. & W. 492.

The affidavit was clearly insufficient: Young v. Ball, 9 Watts, 139; Mullen v. French, 9 Watts, 96; Kaufman v. Cooper Iron Mining Co., 105 Pa. 537; Noble v. Kreuzkamp, 111 Pa. 70; Superior Nat. Bank v. Stadelman, 153 Pa. 634; Clarke v. Allen, 132 Pa. 40; Zeigler v. McFarland, 147 Pa. 610; Griel v. Buckius, 114 Pa. 187; Foster v. Collner, 107 Pa. 305; Wolf v. Hostetter, 182 Pa. 294; Quigley v. DeHaas, 82 Pa. 267; Ulam v. Boyd, 87 Pa. 477.

Before GREEN, C.J., MITCHELL, FELL, BROWN and MESTREZAT, JJ.

OPINION

MR. JUSTICE MESTREZAT:

By his promissory note of January 24, 1898, W. F. Sadler promised to pay in thirty days thereafter to the order of himself and the other defendants in this action $5,000 at the Commonwealth Guarantee, Trust & Safe Deposit Company of Harrisburg, Pa. The note was indorsed by the payees and by Patrick Russ, the plaintiff, and discounted by the Farmers' Bank of Carlisle, Pa. It was not paid at maturity and was duly protested and notice thereof given to the drawer and indorsers. On April 24, 1899, Patrick Russ paid the Farmers' Bank of Carlisle, the holder of the note, $5,353.81, the debt, interest and protest fees due thereon, and the note was delivered to him. He then instituted this suit against the defendants, as prior indorsers, to recover the amount he was obliged to pay on the note.

The affidavit of defense denies the right of the plaintiff to recover, and avers as a defense that (1) the money secured on the note was for the use, and is an indebtedness of, the Greensburg, Jeannette and Pittsburg Street Railway Company, and was applied to the construction and equipment of said railway, and plaintiff knew the fact when he...