Commonwealth v. Allen , 254 Pa. 474 ( 1916 )

Opinion by

Mr. Justice Frazer,

H. H. Dougherty by his will left his entire estate to his wife and children for their lives with remainder to his grandchildren. In 1908 the life tenants presented a petition to the Orphans’ Court asking for the sale of a certain piece of realty belonging to the estate, averring the property was greatly out of repair and depreciating in value and imposed a burdensome expense for its maintenance upon petitioners. An auditor was appointed to report the facts, who recommended the sale of the property for $1,800. The lower court approved the auditor’s recommendation and appointed Miller S. Allen trustee, who subsequently filed his bond for $3,600 with the National Surety Company of New York, defendant herein, as surety, the condition of the bond being that Allen should “faithfully discharge the duties of the said trust” and “truly account for and faithfully appropriate the proceeds of the same” according to the uses and trusts contained in the will of decedent. Previous to filing the bond Allen received a check for $450 from the purchaser as an 'advanced payment on account of the purchase-price. He subsequently received the balance of the purchase-money and paid the interest thereon to the cestuis que trust to November 12, 1912, also certain expenses amounting to $70.60, but failed to account for the balance. The heirs thereupon presented a petition to the Orphans’ Court setting forth the sale of the property and the payment of the proceeds to Allen as trustee and averring that subsequent to receiving the purchase-money Allen absconded and his whereabouts were unknown; that he had been adjudged a bankrupt by the Federal Court and indicted in the Court of Quarter Sessions for embezzling large sums of money, among which were the proceeds of the sale of the realty which he' held as trustee; and asking for his removal and the appointment of a new trustee. The court made an order of removal as prayed for on “the presentation of the foregoing petition and affidavit and other evidence brought to the attention of the court......the facts alleged in the petition being well known to the court.” This action against the surety on the bond was then commenced in the name of the Commonwealth to the use of the new trustee to recover the sum embezzled by Allen. Defendant filed a suggestion that an affidavit of defense was not required by the act of assembly, and upon a rule for judgment for want of an affidavit of defense defendants were granted leave to file an affidavit within fifteen days. Following the filing of an affidavit of defense, plaintiff entered a rule for judgment for want of its sufficiency and judgment was entered thereon for plaintiff in the sum of $1,800, with interest, from November 12, 1912, less a credit for the amount of $70.60. From the order so entered the defendant surety company has taken this appeal.

There are two assignments of error, the first being to the action of the court in entering judgment for want of a sufficient affidavit of defense and the second to the entry of judgment for plaintiff and against defendant. Both assignments violate the rules of this court in that they fail to set forth the judgment of the court below. Appellant has also disregarded Rule 39 which requires the appendix to be paged separately with the pagings followed by the letter “a.” Notwithstanding these defects, we have considered the case on its merits and find no cause for reversal.

This action was begun before the passage of the Practice Act of May 14, 1915, P. L. 483, and the necessity for an affidavit of defense must consequently be considered under the Act of May 25, 1887, P. L. 271, which requires the statement of claim to be replied to by affidavit in actions of assumpsit. While the form of action is not conclusive as to the necessity for an affidavit of defense, the rule in actions of this character is that such affidavit is required where the action sounds in contract and the demand is certain, or can be made so by proper averments or calculations. Whether an affidavit is required in an action on a bond depends upon the nature of the claim set forth in the statement. In the present case defendant contracted for liability in case the principal failed to account for the proceeds of the sale. The amount of the loss is not disputed. While the principal has committed a tort, this is a contingency upon the happening of which the surety company agreed to become iiable, and the case falls within the affidavit of defense law: Byrne v. Hayden, 124 Pa. 170; Hazle Twp. v. Markle, 175 Pa. 405; Com. v. Yeisley, 6 Pa. Superior Ct. 273.

Defendant also complains that the court below was without authority to remove the trustee without citation and the decree was therefore illegal and void and the substituted trustee not legally appointed. The Act of May 1,1861, P. L. 680, authorizes the court to remove a trustee who has failed to properly perform his duties and provides for the issuing of a citation requiring him to appear and answer the charge and authorizes the court, after hearing, to remove the trustee and compel him to pay over and deliver to his successor the property or money in his hands. While the usual practice is to issue a citation so that the trustee may have an opportunity to be heard, yet where, as in this case, the circumstances are such as to render this proceeding useless, there seems to be no valid reason why it may not be dispensed with. The petition averred, and it is not denied, that the trustee was a defaulter and a fugitive from justice and his whereabouts unknown. These facts were known to the court below, as is indicated by the decree. Under the circumstances the issuing of a citation with the knowledge that it could not be served, or if served, would be a useless proceeding, requiring the incurring of needless expense and resulting in uncalled for delay, was unnecessary and the removal of the trustee without citation is therefore not reversible error: Van Dusen’s App., 102 Pa. 224.

The reasoning which makes unnecessary the issuing of a citation to the absconding trustee to account also applies to the argument that there was no prior adjudication fixing his liability and therefore no determination of the amount for which the surety is liable. Nothing could be gained by citing him to account, for the reason that he is not within the jurisdiction, his whereabouts are unknown and his estate has become bankrupt. There appears to be nothing for which he could account if present. The amount received and paid out by him is not in dispute. The liability of the surety is measured by the amount of funds which came into his hands, less the credits which have been admitted, and which were duly allowed by the court below.

The bond on which action is brought was given to the Commonwealth of Pennsylvania and the proceedings are in the name of the Commonwealth to the use of the substituted trustee. Under the circumstances, there is no valid reason why defendant should object to the addition of the use-plaintiff on the record. The Act of May 1, 1861, permits the court to remove the trustee and to require him to deliver over and pay to his successor the goods or moneys belonging to the estate which are in his hands. The substituted trustee is therefore the proper person to receive them. Whether or not' he could sue in his own name to recover in this action on the bond of his predecessor is immaterial, since the legal party plaintiff is the Commonwealth of Pennsylvania, in whose name the bond was executed: Crawford v. Stewart, 38 Pa. 34; and a judgment in this case will fully protect the defendant from any subsequent proceeding on the same cause of action.

The payment of the sum of $450 to the trustee on account of the purchase-price of the property before the bond was filed, does not relieve the surety from liability for this amount. The bond recites the property was to be sold for the sum of $1,800 and is conditioned that the trustee shall fully account for all of the proceeds. The mere fact that a payment had already been made does not make such payment any the less a part of the proceeds of the consideration. The surety company contracted for liability for the full amount, and was not injured by the advance payment of a portion of the consideration : Com. v. Fidelity & Deposit Co. of Maryland, 224 Pa. 95.

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