Scott, To Use v. Hough

• Decision Date: 31 October 1892
• Docket Number: 6
• Citation: 25 A. 123,151 Pa. 630
• Parties: Scott, to use, v. Hough, Appellant
• Court: Pennsylvania Supreme Court

25 A. 123

Scott, to use, v. Hough, Appellant

151 Pa. 630

No. 6

Supreme Court of Pennsylvania

October 31, 1892

Argued October 5, 1892

Appeal, No. 6, Oct. T., 1892, by defendant, E. C. Hough, from judgment of C.P. Westmoreland Co., Feb. T., 1890, No. 481 for plaintiff, John B. Scott, to use E. F. Scott, by court without jury.

Sci fa. sur mortgage.

The case was tried without a jury under the act of 1874. The court found the facts as follows, in an opinion by DOTY P.J.:

"1. John B. Scott, the legal plaintiff, on March 6, 1888, sold a certain printing press and other articles to E. C. Hough, the defendant herein, for the sum of $1,675, payable in cash $175, by mortgage $775, and secured by a lease $725.

"2. The defendant paid the sum of $175 in cash at the date of purchase.

"3. The sum of $725, with its interest was secured by an instrument of writing, bearing date March 6, 1888, which provided that the articles purchased were delivered on hire, and fixing the times of payment, and authorizing the bailor to repossess himself of the machinery and other material on default of payment.

"4. Default was alleged and an action of replevin was brought in August, 1889, by John B. Scott, against the defendant, to recover possession of the machinery and material. Possession was recovered and the same was resold by John B. Scott, and from this sale he realized about the sum of $677.

"5. On the same day he executed and delivered a mortgage to plaintiff to secure the payment of $775, payable: $200 on September 6, 1890; $200 on March 6, 1891; $200 on September 6, 1891; $175 on March 6, 1892; with interest payable semi-annually, and with the usual thirty days sci. fa. clause.

"6. The above mentioned mortgage, for a valuable consideration, was duly assigned by John B. Scott on Feb. 1, 1889, to E. F. Scott, of which assignment the defendant had notice not later than April 10, 1889.

"7. On June 5, 1888, the sum of $110 was paid on account of the mortgage. A portion of the mortgaged premises was released, and in consideration thereof the payment of $110 was made.

"8. A writ of sci fa. issued upon this mortgage on Jan. 10, 1890. The case was brought to issue, and the parties waived trial by jury and agreed to submit the matter to the court.

CONCLUSIONS OF LAW.

"The defence here is that there is a failure of consideration. That John B. Scott has received $175 of the defendant's money, and has retaken the goods and that the defendant has nothing.

"The present suit is for the use of E. F. Scott, the assignee of the mortgage. The assignment was made February 1, 1889, and of the assignment the defendant had notice. The assignment was for a valuable consideration. It does not appear that the assignee had notice of the collateral agreement, nor did he make any inquiry of the obligor.

"The property was retaken under the provisions of this agreement. The contract was a voluntary one. There is no allegation of fraud, accident or mistake, or anything which would relieve the parties from the obligations imposed in said contract.

"E. F. Scott, the assignee, would take the mortgage subject to any defence existing prior to or at the time of the assignment, but he would not be affected by any equities arising between the original parties after the assignment. Nor would he be affected by a collateral and independent agreement between the parties of which he had no notice. The defence is not in the nature of defalcation, nor does it tend to show want of consideration, [nor is it established that the agreement was an inducement to the execution of the mortgage] or omitted therefrom by fraud, accident or mistake. [It seems to have been wholly independent and collateral.] If there had been any agreement in relation to the mortgage the assignee would have been bound to inquire or would be bound by any equities or defences arising out of such agreement.

"The printing outfit was purchased for the sum of $1,675. A certain portion was paid cash; another part was secured by mortgage, and to secure the remainder the parties agreed to a hiring of the press, etc. The rent was not paid and under the terms of the bailment the property was taken. The mortgage represented the cash to be paid on the purchase. If the cash had been paid the defendant would not be in a position to recover it back, even though the printing outfit had been taken from him under the conditions of the agreement. The bargain may have been an unfortunate one for the defendant. It is certainly unfortunate that he should have lost the property, notwithstanding he had paid or secured a considerable portion of the purchase money. But he chose to make the contract, and in the absence of fraud, accident or mistake even a court of equity would not attempt to reform or rescind it."

The mortgage was given on real estate to secure payments as stated in paragraph 5 of the opinion of the court below, but made no reference to the lease, or to the property covered thereby. The lease enumerated the articles "delivered on hire," stating their whole value to be $789.50. It seems that this contains the interest on $725. The installments were payable as "rental" "without interest if paid when due." The first instalment was payable March 6, 1889, the last March 6, 1890. An affidavit of defence averred that the lease did not express the true valuation of the goods and chattels nor the valuation fixed upon them by J. B. Scott and defendant when defen...