McCruden v. Jonas , 173 Pa. 507 ( 1896 )

Opinion by

Mr. Justice McCollum,

The fund for distribution was created by a receiver’s sale of the property of the Parisian Cloak and Suit Company. It is not sufficient to pay the debts of the company in full, and we are therefore required to consider and determine on this appeal whether Yetta Greenboum is entitled to participate in it on the footing of the other creditors. To substantiate her claim that she is, she presents three notes, made by the Parisian Cloak and Suit Company on the 15th of April, 1893, to the order of I. Jonas and Company from whom she received them, duly indorsed as collateral security for their pre-existing indebtedness to her. It is conceded that the notes represent a bona fide indebtedness of the makers to the payees and that she has by virtue of them the same rights in the distribution of the fund in question that they gave to the parties to whose order they were drawn. In order to make her position in the distribution clear it is necessary to state the material facts affecting it and these are as follows: The place of business of I. Jonas and Company was in Chicago, Ill., and that of the Parisian Cloak and Suit Company was in Pittsburg, Pa. All the members of the firm of I. Jonas and Company were members of the Parisian Cloak and Suit Company and liable for the debts of the latter as well as for the debts of the former. In the latter there was hut one person who was not a member of the former, and he was not intrusted with the management of the finances of his firm nor authorized to sign bills and notes for it. These powers were vested in the other members of his firm who, as we have seen, constituted the partnership of I. Jonas and Company. William Greenboum, the husband of Yetta Greenboum, was a member of both firms, and after his death in October, 1891, their daughter Mrs. Estelle Sommers purchased the interest of his estate in each of them, and thenceforth possessed and exercised the rights and powers in the management- of them that he had and exercised in his lifetime. Isador Jonas was a son-in-law of Mrs. Yetta Greenboum, and as she had a daughter and son-in-law in each firm it is not surprising that she had the knowledge respecting the management and status of both firms that she evinced in her deposition. As she was a creditor of I. Jonas and Company and held the notes of the Parisian Cloak and Suit Company as collateral security for their debt she was interested in acquiring this knowledge, and her possession of it may have had some connection with the fact that she did not accept the notes in payment or satisfaction of the debt which the payees therein owed her. Two of the notes were expressly payable at the store of the makers in Pittsburg and the other was impliedly so. True, the place of payment was not named in it but the omission to name it was under the circumstances surrounding the transaction presumably an inadvertence. The notes were made and dated at the same time and place, with the same purpose in view, and they were promptly passed by the payees to their creditor who knew that the place of business of the makers was in Pittsburg. It is said in vol. 2, p. 328 of Am. & Eng. Ency. of Law that “ if no place of payment is named in the note it is understood to be the place of residence of the maker,” and that “ it cannot be presumed that the place of payment is the place of date, though some cases hold that in the absence of any express provision on this point the intent was prima facie to pay where the note was made. In Oxnard v. Varnum, 111 Pa. 193, it is said that “ the making and dating of a note at a particular place is not equivalent to making it payable there,” but it is proper to state that the action was by the second indorsee against the first indorser, and involved the duty of the holder in regard to presentment and demand at the residence or place of business of the maker. If however, there is a presumption that, in the absence of an express provision on the subject, the place of date is the place of payment we agree with the learned auditor and the learned court below that it cannot prevail against the facts and circumstances connected with and surrounding the execution and delivery of the note in question. We conclude therefore that Mrs. Greenboum occupies no higher ground in the distribution than I. Jonas and Company would have occupied had they retained the notes, and that her claim upon the fund must be passed upon in accordance with the laws of Pennsylvania, governing the distribution of the assets of an insolvent partnership.

The learned court below in awarding to Mrs. Greenboum the balance of the fund remaining after paying thereout the claims of the other creditors in full gave her all that she was entitled to, and all that the parties to whose rights she succeeded could possibly have received from it. As they were liable for all the claims of the other creditors they could not have participated in the distribution until those claims were satisfied. This is a proposition in accordance with equity and well sustained by the decisions of this court: Erb’s Appeal, 2 P. & W. 296; Himes v. Barnitz, 8 Watts. 39; Worral’s Appeal, 41 Pa. 524, and Datesman’s Appeal, 77 Pa. 243. There is nothing in the act of April 14, 1838, which sustains the contention that an insolvent partnership composed of three of the four members of another insolvent partnership can as a creditor of the latter share equally with its other creditors in the distribution of its assets. This act has been severely and justly criticised in most if not all of the cases in which it has been considered but it has never yet produced such results as are contended for in this case: Tassey v. Church, 6 W. & S. 465; Pennock v. Shayne, 6 W. & S. 239, and Allen v. Erie City Bank, 57 Pa. 129.

Decree affirmed and appeal dismissed at the costs of the appellant.