American Surety Co. v. Vandegrift Construction Co.

107 A. 733, 264 Pa. 193, 1919 Pa. LEXIS 618
CourtSupreme Court of Pennsylvania
DecidedMarch 24, 1919
DocketAppeal, No. 2
StatusPublished
Cited by2 cases

This text of 107 A. 733 (American Surety Co. v. Vandegrift Construction Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Surety Co. v. Vandegrift Construction Co., 107 A. 733, 264 Pa. 193, 1919 Pa. LEXIS 618 (Pa. 1919).

Opinion

Opinion by

Mr. Justice Moschziskeb,

March 4,1915, the American Surety Company of New York, plaintiff, a judgment creditor of Joseph A. Van[197]*197degrift, the defendant, issued an attachment execution, summoning as garnishee the Ephrata & Lebanon Traction Company, and another corporation, hereinafter referred to as the “railway company.”

The attachment was duly served, and the Ephrata & Lebanon Traction Company (with whose case alone we are concerned on the present appeal) answered, denying it held any property or owed any debts to defendant. When the matter came to trial, the jury found a verdict in garnishee’s favor, upon which judgment was entered, and plaintiff has appealed.

Defendant was engaged as a contractor in the construction of a street railway for the garnishee when, in an effort to collect a ten-year-old judgment, which plaintiff held against defendant, the present attachment issued. As a result, defendant, being- unable to finance his contract, withdrew therefrom, and, at a settlement of accounts between him and the garnishee, which occurred March 11, 1915, it was discovered that he had been overpaid, in bonds of the latter, some $17,500. In other words, by the terms of the contract between defendant and garnishee, the former was entitled to receive from the lattei’, for work completed up to date of service of attachment, some $126,800, whereas, through inadvertence, he had been paid, in round figures, $144,300. So that the garnishee not only held no property or credits of defendant, but, on the contrary, he owed it the amount of the overpayment; which was refunded by the brokerage firm that had charge of marketing garnishee’s bonds, transferring from defendant’s to garnishee’s account credits from the sale of these securities, amounting to $15,312.50, the bonds having been sold at defendant’s orders prior to the attachment, although the transfer of credits (which likewise was made at the latter’s direction) did not take place till after that date.

In explanation of the overpayment, one of garnishee’s officers testified that to dispose advantageously of bonds, such as those under discussion, they must be sold in size-[198]*198able lots, within a comparatively short time. This witness suggested the bonds in question were paid defendant without strict regard to estimates, or work actually done, in order to get them on the market in such lots, “when the money would be paid out on construction work as it went along”; and that, in following this course, the overpayment inadvertently occurred.

Plaintiff contends that, since the bonds were given defendant, they belonged to him and not to the garnishee, and, after the attachment was served, neither the status of such securities nor the proceeds from the sale thereof could in any manner be changed by a settlement of accounts between defendant and garnishee in which plaintiff took no part; therefore, when either the bonds or their proceeds\were paid back to the garnishee, they were defendant’s property and, as such, immediately became subject to the previously levied attachment.

The real question upon which this branch of the case turns, however, is: Did the garnishee owe defendant a balance on the contract when the attachment was served? If it did not, then nothing in its hands became bound by the attachment; and (if as a matter of fact defendant was at that time overpaid), the balance of the account being due to garnishee, an adjustment, in good faith, of that balance, even after the date of the attachment, by paying back the proceeds from the sale of bonds inadvertently advanced to defendant, could not make the funds thus received by the garnishee subject to the attachment, for those bonds, in reality, never belonged to defendant.

The facts on all the issues involved in the accounting between the parties, and the good faith of the repayment by defendant of the balance due the garnishee, were submitted to the jury and found in favor of the latter. The trial judge, summing up the issues in hand, said: “All this testimony has a bearing only upon whether the garnishee received these $17,500 in bonds, or the proceeds of these bonds, or a credit for the proceeds, at a time [199]*199when Vandegrift did not owe them anything. If Vandegrift had been overpaid he owed them that overpayment. Now, if this amount was simply paid back to square that overpayment, then your verdict should be in favor of the garnishee in this case. On the other hand, if it was not paid back to square that overpayment, and if either these bonds, or the proceeds, or any part of the proceeds legally belonged to Vandegrift at the time of the attachment, or subsequent thereto, and were in the hands of the garnishee at the time of the service of the attachment, or subsequent thereto, then your verdict should be in favor of the plaintiff.” This practically covers what was repeated in answers to points, also complained of; and we see no error therein.

Many of appellant’s assignments criticize rulings, adverse to plaintiff, upon offers of testimony, and instructions to the jury, concerning the first payment made by garnishee to defendant on the contract.

In connection with this payment, amounting to $34,-000, it appears that the railway company (with whom defendant also had a construction contract, and who likewise was served as a garnishee) had close business, relations with the garnishee in this case. The contract between garnishee and defendant provides that the latter shall be paid a consideration of $169,625 “consisting of $34,000 in cash and $155,000 of the company’s first mortgage......bonds at a price of 87these payments to be made on “semi-monthly estimates of the proportionate amount of work performed, material and equipment delivered.” Before any substantial work had been done, this first payment of $34,000 was made by garnishee to defendant, in the following manner: August 3, 1914, a check of the railway company for $34,000 was given to garnishee, who, on the same day, gave its check to defendant for a like amount; and this, or the latter’s check for a similar amount, was, on August 5, 1914, given to the railway company. All these checks were drawn upon the same trust company; and, from such [200]*200fact, together with the further circumstance that the total capital stock of the garnishee amounted to exactly $34,000, plaintiff contends it could justifiably be found that this alleged first payment to defendant was “not in fact made”; and, hence, he insists that, in settling the accounts between garnishee and defendant, the sum of $34,000 ought to be deducted from the payments which the former claims to have been made to the latter. If this course were pursued, it would leave a considerable sum due and owing by garnishee to defendant, at the date of the attachment.

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Cite This Page — Counsel Stack

Bluebook (online)
107 A. 733, 264 Pa. 193, 1919 Pa. LEXIS 618, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-surety-co-v-vandegrift-construction-co-pa-1919.