Truby v. Mosgrove

• Decision Date: 03 January 1888
• Docket Number: 118
• Citation: 118 Pa. 89,11 A. 806
• Parties: SIMON TRUBY, JR., v. JAMES MOSGROVE ET AL
• Court: Pennsylvania Supreme Court

11 A. 806

SIMON TRUBY, JR., v. JAMES MOSGROVE ET AL

118 Pa. 89

No. 118

Supreme Court of Pennsylvania

January 3, 1888

Argued October 13, 1887

ERROR TO THE COURT OF COMMON PLEAS OF ARMSTRONG COUNTY.

No. 118 October Term 1887, Sup. Ct.; court below, No. 236 June Term 1883, C.P.

This was an action of assumpsit brought on May 5, 1883, by Simon Truby, Jr., assignee for the benefit of the creditors of D A. Ralston, against James Mosgrove and William Pollock administrators of J. E. Brown, deceased. The pleas were non-assumpsit, payment with leave, etc.

At the trial on September 27, 1886, before HENRY W. WILLIAMS, P.J fourth district, holding special term, it appeared: That in 1880, upon three several contracts in writing, James E. Brown agreed to loan to D. A. Ralston $75,000, each contract being for $25,000. United Pipe Lines certificates were to be delivered as collateral security. As Ralston received the money Brown took negotiable notes at four months for the amount received, deducting interest at seven per cent., which he marked on the margin of each note.

The contracts and the notes, with their indorsements, were in the following form:

KITTANNING, March 18, 1880.

James E. Brown agrees to loan D. A. Ralston twenty-five (25) thousand dollars under following conditions:

D. A. Ralston to pay at rate of four (4) per cent. interest on above amount or any part thereof, until he, Ralston, draws or uses the same; when Ralston draws the above amount, or any part thereof, he then to pay Mr. Brown at rate of seven (7) per cent. per annum as long as he retains it, not to be less than four (4) months, and Ralston to have the privilege to retain the money until United Pipe Lines certificates are worth in open market, at rate of one dollar and fifteen cents ($1.15) per barrel. When Ralston draws above amount, or any part thereof, he to deliver to Mr. Brown United Pipe Lines certificates as collateral security at rate of one thousand barrels of oil for one thousand dollars received, Ralston to pay all storage, shrinkage, and fire assessments on said collateral oil. Witness our hands and seals this the 18th day of March, 1880.

J. E. BROWN. [L.S.]

D. A. RALSTON. [L.S.]

$25,000.

KITTANNING, PA., 2d October, 1880.

Four months after date I promise to pay to the order of D. A Ralston, Esq., twenty-five thousand 00-00 dollars at Iron City National Bank, Pittsburgh, without defalcation for value received.

No. 6.

609.58

D. A. RALSTON.

[Indorsed.]

United Pipe Lines certificates 25406, 25407, 25408, 25409, 25410 for five thousand barrels each transferred to J. E. Brown by D. A. Ralston and to be held by him as collateral security as per contract March 18, 1880.

J. E. BROWN.

D. A. RALSTON.

Under these contracts, Ralston received from Brown $60,000, and gave Brown his notes aggregating that amount. Brown died on December 27, 1880, and soon thereafter Ralston made a general assignment to the plaintiff for the benefit of his creditors. Subsequently, Mosgrove and Pollock, Brown's administrators, sold the oil represented by the United Pipe Lines certificates held as collateral, and, having paid all storage, fire assessments, etc., on November 20, 1882, he returned the notes to Ralston.

The jury found a special verdict:

We find that D. A. Ralston borrowed from James E. Brown at different times in 1880, money amounting together to sixty thousand dollars; that he secured this loan by the pledge of United Pipe Lines certificates as collateral security, at the rate of one thousand barrels of oil for each $1,000 borrowed; that said certificates were sold by the defendants about the 20th November, 1882, who realized therefrom $870,31 in excess of the said debt and six per cent. interest thereon; that when said loan was made it was agreed in writing that Ralston should "pay seven per cent. as long as he retains the same, not to be less than four months, and Ralston to have the privilege to retain the money until United Pipe Lines certificates are worth in the open market $1.15 per barrel."

If upon these facts the court be of opinion that the reservation of seven per cent. interest is usurious, then we find for the plaintiff the sum of $1,074.45, being the amount of said excess with interest thereon. If the court be of opinion that the reservation of said rate is not usurious upon the facts of this case, then we find for the defendant.

On March 7, 1887, the court filed an opinion directing judgment to be entered in favor of the defendants. The plaintiff then took this writ, assigning the order as error:

Judgment affirmed.

Mr. M. F. Leason (with him Mr. J. H. McCain), for the plaintiff in error:

1. The decisions of this court upon § 2, act of May 28, 1858 P.L. 622, have been numerous and invariably against all attempts to evade the true intent and meaning of the act. The act is construed in unmistakable language in Schutt v. Evans, 109 Pa. 628. Spain v. Hamilton, 1 Wall. 604, originated in the District of Columbia, and has no bearing on our statute. Phila. & R.R. Co. v. Stichter, 11 W.N. 325, is of weakened authority by reason of the dissenting...