Sloan v. Johnson

• Decision Date: 10 July 1902
• Docket Number: 1-1903,103-1902
• Citation: 20 Pa.Super. 643
• Parties: Sloan v. Johnson, Appellant
• Court: Pennsylvania Superior Court

20 Pa.Super. 643

Sloan v. Johnson, Appellant

Nos. 103-1902, 1-1903

Superior Court of Pennsylvania

July 10, 1902

Argued April 28, 1902 [Syllabus Matter] [Syllabus Matter]

Appeal by plaintiff and defendant, from judgment of C.P. Fayette Co.-1900, No. 222, on verdict for plaintiff in case of George B. Sloane v. Daniel J. Johnson.

Assumpsit on warehouse receipts, to recover the value of fifty barrels of whiskey. Before Reppert, P. J.

The facts are fully stated in the opinion of the Superior Court.

The court charged in part as follows:

In 1894 the defendant, Mr. Johnson, became the proprietor of the Moss Distilling Company, and operated a distillery situate at Port Royal in Westmoreland county, and in the summer of 1895 these certificates were issued. They all bear the date of July 9, 1895, and each is for five barrels of whiskey, and the total number of proof gallons of these fifty barrels is 2,387.66. So far as the payee, what we may call the payee, in these certificates is concerned, the place where the payee's name should be written is left blank. [Where certificates of that kind are issued and circulated from hand to hand, any holder may write his name in the blank space left in the certificate as payee. He would have a right to do that.] And being the holder and the payee, he would have the right to demand of the maker of the certificate the property called for in the certificate, if the maker of the certificate had no just or legal defense to that demand.

[Now where such certificates as these in suit have been obtained or put in circulation by fraud, as between the maker of such certificates and an innocent holder who has paid value, the loss must fall on the maker. He must bear the loss, and not the innocent holder. If Mr. Sloan didn't know anything about any fraud that may have been practiced upon Mr. Johnson by Preyer and Hart & Company, and if Sloan paid value for them, then Johnson must bear the loss, and your verdict must be for Sloan for the value of these certificates.]

Now, in that view of the case, it is necessary for you to pay particular attention to the testimony of Mr. Sloan, and I will refer to it somewhat at length, just as I referred to the testimony of Mr. Johnson somewhat at length. He says he got these certificates July 24, 1895, from J. B. Hart, and the circumstances under which he got them are about as follows: Hart was running a restaurant with bar attached, and advertised for a clerk or cashier. Mr. Sloan answered that advertisement. Hart demanded a deposit of $ 1,000 as security for his honesty and good faith. Mr. Sloan says he put up the deposit with Hart, or paid Hart the $ 1,000, and as security for his $ 1,000 Hart turned over to him these certificates -- ten certificates calling for fifty barrels of whiskey. He says he never knew Hart until he met him in pursuance of his answer to the advertisement, and that he obtained the certificates some three or four days after he met him, when they had struck their bargain in regard to Sloan entering Hart's employ. He declares that they have been in his possession ever since, and that he has no knowledge of their having been obtained wrongfully or in any wrongful way from Johnson; that he met Preyer while he was working there for Hart & Company, or for Hart, but that he had nothing to do with him in regard to these warehouse receipts. Now, on cross-examination -- his testimony is somewhat lengthy, but I will refer to it as briefly as I can -- he says, that prior to his accepting these receipts as security for his $ 1,000, and while negotiations for employment with Hart were going on, Hart and Sloan went to an attorney's office and there an agreement for employment was drawn up which the parties executed, and these certificates, Sloan says, were submitted to the attorneys for their opinion as to their being good and legal security for the $ 1,000, and their opinion being favorable, and having made an investigation of the certificates, he accepted the certificates as security for the $ 1,000 in cash which he had turned over to Hart. Hart fell behind in the wages which he had agreed to pay Sloan, and instead of remaining the three months which the agreement of employment called for, he remained only ten weeks. His connection with Hart then, as an employee of Hart, was severed by reason of his wages becoming in arrears. He dropped in two or three times, he says, in order to get his wages, and they were not paid, and he says he also demanded his $ 1,000; but he doesn't say that he made any specific offer to return the ten certificates for the fifty barrels of whiskey. Now he would have a right, until his $ 1,000 was repaid, to retain these certificates, and would have a right to sue on them. So far as their being simply security for $ 1,000 is concerned, that wouldn't affect his right to demand the goods for which the certificates stand, and on refusal of them to sue for them.

At the time he obtained these certificates Sloan says that the whiskey was worth fifty-five cents per gallon. He says he doesn't know how Hart got possession of the certificates. He doesn't know now what has become of Hart. The last time he saw him was two or three years ago. The firm name was J. B. Hart & Company, but he says Hart told him that there wasn't any firm; that the firm of J. B. Hart & Company consisted of J. B. Hart simply. He says he never got the question of wages adjusted with Hart.

[Now, if you believe this statement of the plaintiff as to how and in what manner these certificates came into his hands, that he was acting in good faith and paid value, then your verdict must be for this plaintiff, without regard to the character of the dealing between Preyer and Hart & Company and Johnson.]

Now it is your duty to credit his testimony if there is no good reason to the contrary. Is there sufficient other testimony in the case, are there any statements in regard to what took place, of such a contradictory character as to satisfy you that the statement of Sloan is not correct? The credibility of the witnesses is for you. You will take into consideration anything that may affect their credibility, their manner on the stand, the corroboration of their testimony by other testimony in the case, any contradictions that you may detect in their testimony, as well as their interest in the case.

[Now, in case you find that Mr. Sloan was an innocent holder, for value, of these certificates, even if in the first place they were put in circulation by a fraud and imposition upon Mr. Johnson, then you will ascertain the value of the goods which these certificates call for, and return a verdict for him to that amount.]

Verdict and judgment for plaintiff for $ 770.06. Both defendant and plaintiff appealed.

Errors assigned by defendant were above instructions, quoting them.

Error assigned by plaintiff among others was that the charge distracted the attention of the jury from the single point in the case namely, the market value of the whiskey.

A. D. Boyd and Edward Wilson Boyd, for defendant. -- Sloan, the plaintiff, took these warehouse receipts subject to the equities existing between Hart, his vendor, and Johnson, the defendant.

The fundamental error of the court in trying this cause was in treating the warehouse receipts in question as though they were promissory notes or bills of exchange -- the symbols or representatives of money -- instead of treating them as the symbols or representatives of merchandise, and in holding that Sloan, therefore, took them freed from the equities existing between Hart and Preyer, and Johnson: Empire Transportation Co. v. Steele, 70 Pa. 190; Decan v. Shipper, 35 Pa. 243.

The receipts in question here were procured from Johnson by fraudulent misrepresentations made by Preyer, acting in collusion with Hart. Preyer had neither title nor authority to sell otherwise than for cash: Easton v. Worthington, 5 S. & R. 130; Lecky v. McDermott, 8 S. & R. 500; Guerreiro v. Peile, 3 Barn. & Ald. 616; Kingsford v. Merry, 1 Hurl. & Norm. 503; Brower v. Peabody, 3 Kernan, 121; Shaw v. R. R. Co., 101 U.S. 557.

Edward Campbell, with him R. P. Kennedy, for plaintiff.

Before Rice, P. J., Beaver, Orlady, W. W. Porter and W. D. Porter, JJ.

OPINION

WILLIAM W. PORTER, J.

This action is brought for the value of fifty barrels of whiskey. The plaintiff's claim is founded upon ten warehouse receipts issued by the defendant, who is a distiller and warehouseman. The receipts were issued in blank in respect to the person on whose account the whiskey was held, and no indorsement appears on the receipts. The plaintiff sues as transferee of the goods by purchase of the receipts. He has obtained a verdict and judgment. Appeals have been taken by both defendan...