McFall v. McK. & Y. Ice Co.

16 A. 478, 123 Pa. 253, 1889 Pa. LEXIS 650

• Court: Supreme Court of Pennsylvania
• Decided: January 7, 1889
• Docket: No. 157
• Status: Published

Opinion

OPINION,

Me. Justice Williams :

The mechanics’ lien, on which the scire facias in this case issued, was originally entered against the McKeesport & Youghiogheny lee Co., a corporation, B. B. Coursin, A. Inskeep, E. C. Converse, R,. G. Wood, J. F. Davitt, owners or reputed owners, and W. J. McMasters, contractor. The claim was for material furnished for the erection of an ice house on the order of McMasters. The defendants denied that McMasters was a contractor with the owners, and alleged that he was a sub-contractor under Inskeep, to whom the erection of the building had been let by them. The plaintiffs replied that the pretended contract with Inskeep was not made bona fide, but as a device hy means of which the persons named as owners sought to charge the corporation ten thousand dollars for what cost them six thousand seven hundred under their contract with Mm; that Inskeep on behalf of himself and his associates contracted with him to build the ice house, and that each of them paid his proportion of the contract price and took credit for Ms share of the difference between that price and the sum of ten thousand dollars.

It is thus apparent that the question on wMch the plaintiffs’ right to a lien depended, was whether McMaster’s contract was in fact with Inskeep only or with all the owners of the ice house. The attention of the court was drawn to tiffs question by the plaintiffs’ second point, which asked an mstruction to the jury upon.the legal effect of the facts grouped therein. These were as follows:

T. That the persons named as owners were the subscribers to the capital stock of the proposed corporation.

2. That the object of the corporation was to carry on the ice business on land owned by them at the time the corporation was formed.

8. That the articles of incorporation were not recorded until August 21, 1886.

4. That on August 17, 1886, these persons agreed to accept a proposition from Inskeep to build the ice house for ten thousand dollars in the stock of the corporation, and that he should find some builder who would take the contract for a less sum payable in cash.

5. That it was also agreed that the cost of the building should be paid by them in proportion to the stock subscribed by each, and the profit made should be divided between them in the same proportion.

Upon these facts, which sufficiently appeared in the evidence, the court was asked to say that the contract made by Inskeep with McMasters, the builder, was not made on his own behalf alone, but on behalf of all who joined in the device, who after-wards paid the money to McMasters, and divided the ten thousand dollars in stock among themselves. The court refused this instruction but submitted the question raised by the point to the jury, saying: “ I leave to you to say, under the point, if found to be true, whether it satisfies you that the contract of Inskeep with McMasters was the contract of the company.” But not one of the facts on which the prayer for instructions rested, was in controversy. It was only their legal effect that the court was asked to declare. To submit that to the jury was simply to leave to them, without instruction, the determination of a legal question with which they were not familiar and upon which they had a right to expect an explicit instruction from the court.

The 'evidence disclosed that the contract set up as a defence was not made by Inskeep on his own behalf but on behalf of all the subscribers to the stock of the ice company; it showed that the money paid to McMasters was contributed in accordance with the original agreement, by each in proportion to the stock subscribed for by him ; and that the stock which was the formal consideration of the letting to Inskeep was never issued to him nor intended to be so issued, but was divided among' the subscribers who received ten thousand dollars in stock for the six thousand seven hundred dollars paid by them. It was clear that all this was arranged for before the contract with McMasters was made, and that in carrying out the plan Ins-keep was tbe representative of bis associates as well as himself. The stockholders were the principals in the contract with McMasters, and Inskeep was the instrument or agent. Whether he disclosed his principals at the time of the contract or not, is immaterial; and it would be trifling with justice to treat this transparent device as a letting bona fide of the construction of the ice house to Inskeep, when neither he nor they so treated it at any time.

What was intended and accomplished by the arrangement was the payment of ten thousand dollars of stock subscriptions with little more than half that amount of money. The legal effect of the facts brought together in the point was to turn Inskeep into the instrument by and through whom this purpose was effected by the subscribers to the stock, and make his contract with McMasters the contract of all whom he represented. The question was whether the real parties to the contract were bound by it, or whether the thrifty scheme by which they had balanced their stock account, should now serve the further purpose of shielding them from responsibility for the materials used in the construction of their ice house. The plaintiffs were entitled to an affirmance of the point and an explicit instruction that upon the facts assumed in it the contract made with McMasters was that of all the owners.

Judgment reversed, and venire facias de novo awarded.