Bierman v. Lebanon Valley College

20 Pa. Super. 133, 1902 Pa. Super. LEXIS 197

• Court: Superior Court of Pennsylvania
• Decided: April 21, 1902
• Docket: Appeal, No. 122
• Status: Published

Opinion

Opinion by

Rice, P. J.,

In this action, brought to recover a sum admittedly due the plaintiff, the defendant pleaded set off, and on the trial offered in support of its claim the following subscription paper dated June 18, 1891: “ We the undersigned do hereby for ourselves, our heirs, and executors or administrators and assigns promise and agree to pay to II. H. Kreider, within ninety days from this date the amount set opposite our respective names, provided the full sum of $2,000 be secured.”

Subscriptions for divers sums, amounting in the aggregate to $705, preceded that of the plaintiff for $50.00, then followed a subscription by another party for $270, and then another subscription by the plaintiff for $97 5, thus making the. sum of $2,000.

To meet the objection, apparent ,on the face of the paper, that it does not in terms, nor by implication, import an obligation to pay the sums subscribed to the Lebanon Valley College, for its use, the defendant attempted to show, that the purpose of the subscription was to raise money to repay a loan which H. H. Kreider, as treasurer of the college, was authorized to make to meet indebtedness then pressing, and that by mistake it was made payable to H. H. Kreider, instead of H. H. Kreider, treasurer of Lebanon Valley College. In support of this allegation the defendant proved the following facts: First, the plaintiff was president of the college and H. H. Kreider was its treasurer. Second, at a meeting of the board of trustees, held on June 16, 1891, the former reported as follows : “The financial condition of the college is embarrassing because of many persisting creditors. A careful perusal of the report of brother Haak, general manager, will not fail to furnish items for action on the part of the committee on finance and I will not prolong this report, because I feel that experience, wisdom, interest in the cause of education, and more especially in Lebanon Valley College, will enable you to determine upon under our present embarrassing conditions to make the institution a success.” Third, at a meeting of the board held on June 18, the following action, recorded on the minutes, was taken: “H. H. Kreider, I. B. Haak and C. H. Stern were appointed to push subscriptions and obligations for the immediate relief of the college, no obligation being binding until $2,000 are raised.” Fourth, at the same meeting, the plaintiff being present, the paper in question was drawn up by Mr. Stern, one of the members of the committee, and was then and there signed by some of the subscribers.

As to the foregoing facts the evidence is clear enough, but the same cannot be said of the evidence adduced in support of the allegation that the subscription was for the specific purpose of repaying a loan made by the college. Still less clearly does it show that it was the inducement for the making of such loan. True, some of the witnesses testified that Mr. Kreider was authorized to borrow $2,000 with which to pay debts of the college ; and, that he did make such loan by having a note discounted at the Annville National Bank is sufficiently established by the testimony. But no minute of the board giving such authority was offered in evidence; and the testimony of the defendant’s witnesses leaves it uncertain, when the alleged authority was given — whether at the session of J une 18 or at a previous session — as well as when the loan was made. And, whether Mr. Kreider gave' his individual note, or the note of the college, is also left in uncertainty. In his direct examination, while evidently not very clear upon the subject, he gave it as his best recollection that it was not his individual note, but upon cross examination he gave the following testimony: “ Q. Is it the fact or is it not that you and Prof. Bierman raised out of the Annville Bank on an accommodation note, signed individually, the sum of $2,000 on July 7, 1891 ? A. I don’t remember. Q. Did you and Prof. Bierman raise any other money for any other purpose ? A. I think I was on several occasions. Q. Did you at that time ? A. That I don’t know but I think we did, I don’t know though.” In the following year he submitted to the board a paper, apparently not signed as treasurer, but separate and distinct from his report as treasurer, in which he said: “ According to your instructions of last year I borrowed $2,000, and said amount of $2,000 was assumed by different persons, of which amount $360 I have paid on the note in bank $350 and leaving $10.00 on hand.” The note was renewed in bank from time to time until the plaintiff and Mr. Kreider ceased their official connection with the college, when the balance due on it, about $1,650, was merged with other notes in a single note given by the trustees, or the officers of the college. The testimony upon this matter of the merger of the note is not very clear, but it seems to be an undisputed fact that when it took place the plaintiff and Mr. Kreider were thereby released from any further liability upon it.

Two views as to the obligation intended to be assumed by the subscribers to the paper in question have been urged upon our consideration by counsel. One is that they intended to bind themselves to furnish to the college, the funds with which to discharge the loan that had been made or was then in contemplation ; in which case, it is claimed, they would still be bound notwithstanding the subsequent change in the form of the indebtedness. The other view is that they intended an obligation to H. H. Kreider personally, because of the personal liability he had assumed, or was to assume; in which case his right, whether to absolute and unconditional payment, or to indemnity only, would not pass by operation of law to the college or whomsoever might take his place upon the note in' bank. If the former view be the correct one, then the paper, which the parties designed to express their intention, does not express it, or at least does not express it accurately, and therefore, it is claimed, should be reformed or treated as reformed.

The defendant’s counsel argue that, as the paper was drawn at the meeting when the resolution was adopted, the natural inference is that it was drawn pursuant to the resolution, and that the intention of the subscribers was to assume the obligation which the resolution contemplated. It is to be noticed, however, that the paper makes no allusion to the resolution, that the scrivener was not called to explain how the alleged mistake was made, and that outside the resolution the evidence of what was said and done at the meeting is vague and unsatisfactory. It was clearly not competent to ask the witnesses, “ What was the intention of the parties there present at the time when this paper was drawn as to whose order it was to be made payable to ? ” Spencer v. Colt, 89 Pa. 314; Juniata Building & Loan Assn. v. Hetzel, 103 Pa. 507; Thomas & Sons v. Loose, Seaman & Co., 114 Pa. 35 ; Commonwealth to use v. Julius, 173 Pa. 322. The court properly rejected such offers. There remained the unexplained discrepancy between the resolution appointing the committee and the subscription paper, but to presume a mistake, common to all the parties, from the mere failure of the latter to agree with the former is, obviously, not an easy matter. And, surely, no such inference as that above suggested can be drawn against those subscribers who were not present at that meeting; and the evidence does not clearly show that all were present. In making this statement we have not overlooked the memorandum indorsed on the paper which seems to show that the full amount was subscribed on June 18; but it does not show that all the subscribers were present at the meeting. However, it may be as to the intention of those who were present, as to the understanding and intention of those who were not present we have no knowledge or means of knowledge except what the paper itself discloses. Without entering upon any unnecessary discussion of the general question of the validity of a gratuitous subscription, we think it clear that where such subscription was made on condition that a certain amount be subscribed, the prima facie presumption arising from the paper is, that it was intended that the prescribed amount should be subscribed for the same purpose; also, that the beneficiary was correctly named. Therefore, to reform such a paper so as to make it import an obligation to pay to a different beneficiary, and to furnish money for a different purpose from that expressed in the paper, it is, obviously, not sufficient to show that some of the subscribers intended to assume such obligation, leaving the intention of the other subscribers to be determined by the paper itself.

Considerable stress is laid by the defendant’s counsel upon subsequent declarations and admissions made by the plaintiff. I. H. Haak, one of the subscribers, as well as a member of the committee, testified that he received notice “ that the $2,000 on that subscription was now secured, consequently my subscription of $50.00 was due and payable to the treasurer,” but whether this notice came from the plaintiff or from Mr. Ereider he was unable to say. Therefore, this part of his testimony establishes no admission on the part of the plain,tiff. As to what occurred between him and the plaintiff lie testified as follows: “I went to Annville, saw Mr. Bierman, asked him to see this paper.....Q. Did he show you that paper? A. Yes, sir, I saw his subscription for $975. Q. Whose subscription? A. President Bierman’s, and I asked him how it was about this last subscription, 1975. He said it was all right; he said he will have to pay it if he can’t collect it, and on the strength of that I paid my $50.00 and turned over Von Neida’s. Q. On the strength of what? A. That representation that his subscription was bona fide.” Other declarations to other persons to the effect that the full amount of $2,000 had been subscribed, and that he was good for all his subscriptions and would pay them were also shown. These latter declarations stand on a different plane from the declarations alleged to have been made to Mr. Haak, and are effectual only as evidence of the facts admitted, not to create an estoppel. But upon the question whether there is sufficient evidence to warrant a reformation of the subscription contract, the same objection applies to both. It was well expressed by the learned trial judge as follows : “ Expressions made by the plaintiff to these different witnesses that it -was a bona fide subscription is reconcilable with tbe paper itself that it was á subscription to H. H. Kreicler.” We fail to see how-such expressions can estop him to deny his liability to Lebanon Valley College. The utmost that can be claimed for them, under the evidence, is, that they estop him to deny the validity of the paper as it was written; and that they are sufficient for that purpose, is not clear. But we need not go into that question.

A person who seeks to rectify a deed on the ground of mistake must establish, in the clearest and most satisfactory manner, that the alleged intention to which he desires it to be made conformable continued concurrently in the minds of all parties down to the time of its execution; and, also, must be able to show exactly and precisely the form to which the deed ought., to have been brought. To reform a contract, and then enforce it in its new shape, calls for a much greater exercise of-the power of a chancellor than simply to set the transaction - aside. Reformation is a much more delicate remedy than rescission. Hence, in order to justify a decree for reformation in cases of pure mistake, it is necessary that the mistake should have been mutual: Bispham’s Eq. (5th ed.) sec. 469. In view of the fact that this subscription was conditioned upon the whole amount being secured, these principles are applicable here. After a lapse of nine years an attempt to reform such a paper so as to make it import an obligation to pay to another person than the person named, for a different purpose or for a purpose not designated in the paper itself, must necessarily be attended with difficulties, and properly so. It is not the duty of the court to minimize them as far as possible and then cast the entire responsibility upon the jury. If mistake is alleged, such attempt can only be successful where the evidence of mistake is clear, precise and indubitable. To create a doubt whether the paper fully aiid accurately expresses the common intent of all the subscribers is not sufficient. It is true, under our practice in Pennsylvania, reformation or its equivalent may be accomplished by common-law forms. But the fact remains that the relief claimed is purely equitable, and the judge ought not to submit the case to the jury unless the evidence is such that he would feel himself bound as chancellor to reform the instrument: Phillips v. Meily, 106 . The learned trial judge held that the evidence was not sufficient for that purpose, and in that conclusion we concur.

All the assignments of error are overruled and the judgment is affirmed.