Assigned Estate of Jones ( 1900 )

Opinion by

Beaver, J.,

The several questions presented by this appeal arise out of the distribution of a fund in the hands of the assignee of W. K. Jones under a general assignment made February 24, 1894, in trust for the benefit of creditors. Prior to the.date of said assignment, to wit: on the 28thof February, 1890, one, William Dent, as principal, and W. K. Jones, the assignor, and H. J. 'Olmsted, as sureties, entered into a bond to F. H. & O. W. Goodyear in the sum of $10,000, conditioned to make good the title to certain hemlock logs sold by the said Dent to the said F. H. & G. W. Goodyear, one of the recitals in said bond being that “ the said Dent has agreed to guarantee a good title to the said logs and to indemnify the said F. H. & C. W. Goodyear from any claim, damage, suit, decree or expenses whatsoever which shall be suffered by them by reason of their taking said logs.” Subsequently in a suit by one Huntley against the said Goodyears, decided by Supreme Court in 182 Pa. 613, it was determined that Huntley “ had a clear title and right to possession of the logs in dispute in this issue, ” which, it is admitted, were those sold by Dent to the Goodyears. The damages in that case were subsequently assessed by the referee at $11,590, being an amount greater than the penalty of the bond given by Dent and his sureties to the Goodyears. Upon the final distribution of the assigned estate of Jones in the hands of the assignee, claim was made by the Goodyears (Dent being insolvent) upon the fund for their distributive share upon the amount of said bond. The auditor disallowed their claim but, upon exceptions to the report and argument in the court below, the claim was allowed, the report referred back to the auditor for amendment and distribution made accordingly. The confirmation absolute of this amended report is the ground work of the present appeal, two questions being raised thereby, the first as to the matter, and the second as to the manner of the decree. It is claimed by the appellants that the legal rights of the creditors of Jones were fixed by the assignment in 1894, and that, inasmuch as the bond upon which J ones was surety, given by Dent to the Goodyears, was at the most a contingent liability, the amount of said liability not having been fixed and determined until four years after the date of the assignment, the holders of the bond are not entitled to participate in the distribution of Jones’s assigned estate. This .is the principal question and is fairly and regularly raised by the appeal from the decree of the court confirming the amended report of, the auditor.

What was the character of Jones’s liability under the provisions of the bond, and when did his liability become fixed? Dent’s undertaking under the bond was “ to guarantee a good title to the said logs and to indemnify the said F. H. & C. W. Goodyear from any claim, damage, suit, decree, cost or expenses whatsoever which shall be suffered by them by reason of their taking said logs.” It is ingeniously argued by the appellants that this undertaking was by an agreement verbal or otherwise previously made, but it is evident from the nature as well as from the wording of the bond that the writing constitutes the agreement as fully as if the words “hereby agrees ” had been added. If Dent had no title to the logs, as was eventually determined by the final judgment of the Supreme Court, the liability under the bond was instant. Suit against the Good-years for the recovery of the logs was brought in 1891 and, although not finally determined until 1897, the rights of the parties were fixed as of the date of the suit, if not as of the date of the bond. In Reading Iron Works’ Estate, Sweatman’s Appeal, 150 Pa. 369, the company became insolvent and made an assignment for the benefit of creditors in May, 1889. The premises occupied by them were vacated on July 31,1889, to which time rent was actually paid. A considerable portion of their lease, however, was unexpired and it was claimed by the owner of the property that he was entitled to share in the distribution of the assigned estate, not for rent unpaid but for damage sustained by him by reason of the failure of the iron works to comply with the terms of their lease, and it was in reference to these facts that Mr. Justice Williams, in his opinion, said: “ The present value of the loss to be sustained for the remainder of the term may be ascertained and the damages liquidated. This the auditor has done. For these damages the lessor has a present cause of action (Lothrop v. Reed, 95 Mass. 294), and for that reason, a right to share in the fund. That damage is not for rent eo nomine, for under the agreement, the lessor has rented the premises to others. It is for the loss he suffers by reason of the difference of the rentals now obtainable in consequence of the peculiar arrangement and construction of the premises and the rental agreed upon as an inducement to him to make the investment for the use of the company.” The owner of the premises was, therefore, allowed to share in the distribution of the assigned estate.

If that is certain which is capable of being rendered certain, then it is true in this case, as in the one above quoted, that “in the distribution of a fund the general rule undoubtedly is that those are entitled to share who have a definite demand against it or a cause of action’ capable of adjustment and liquidation upon trial.” In this case, suit against the Goodyears for the logs had been brought three years before Jones’s assignment. The final issue of that suit, as already intimated, determined the title as in Huntley, and, therefore, as never having been in Dent. The amount of the damages exceeded the amount of the bond, aiid hence Jones’s liability under the bond was the full amount thereof and attached as of its date. Oyster v. Short, 177 Pa. 601, recognized the right of a creditor to participate in the distribution of an assigned estate for the amount of notes maturing after the assignment upon which the assignor was indorser. In a sense the liability was contingent, that is, if the maker paid the notes the indorser would not be liable, and that would be the case here as between Dent, the maker of the bond, and Jones, the surety; but, in both'cases, there was liability which was capable of being rendered certain as of the time when the obligation was entered into. We can. see no difference in principle between this case and the one which we are now considering. Jones’s obligation to the Good-years, therefore, was fixed as of the date of the bond, although the amount of the liability was to be determined thereafter.

The question as to the manner in which the decree of the court was finally entered is purely technical. There is no allegation that the auditor’s report, as originally made to the court, was not in all respects regular. All parties presumably were heard upon the exceptions filed thereto. The court sustained the exceptions and merely referred the report back to the auditor for correction. It does not seem to us that notice of the refiling was necessary, but in any event the appellants are not harmed, inasmuch as the court allowed an exception to the decree confirming the report absolutely, which brings up the entire record, and the questions raised therein, as covered by the several assignments of error, have been considered by us upon their merits.

This sufficiently disposes of all the questions involved, and, as we see no error, the assignments are all overruled and the decree affirmed.