Crown Slate Co. v. Allen

Opinion by

Mb. Justice Fell,

These are cross-appeals and may be considered together. Allen, the appellant in the first appeal, was the owner of the principal part of the stock of the Crown Slate Company before its reorganization, and was also a member of the firm of Tins-man & Company who leased and operated its quarry. Representing the slate company he negotiated with Lane, Doney & Company, who owned an adjoining quarry, for a consolidation of the interests of both parties, to be effected by a reorganization of the company and the issuing of additional capital stock to Lane, Doney & Company in payment for the quarry they were to convey. The negotiations resulted in a written agreement for the consolidation of the properties “ with all the improvements thereon.” There was a verbal understanding that the personal property of Tinsman & Company, of which Allen had become the sole owner on the dissolution of the firm, should be appraised and purchased by the slate company. Allen became the treasurer of the slate company after its reorganization, and paid to himself the amount at which Tinsman & Company’s property had been appraised. The plaintiff’s contention at the trial was that Allen had included in the inventory certain fixtures and machinery which either were the property of the slate company, or had during the negotiations been representéd as belonging to the company, and that his payment to himself of the appraised value of these items was wrongful.

This was the issue of fact raised, and the attempt upon the part of the plaintiff to establish its claim was resisted on the ground that the written agreement fixed the rights of the parties in the absence of evidence that something had been omitted from it through fraud, accident or mistake. All the specifications of error which need be considered relate to the admission of testimony offered by the plaintiff to show that certain items should not have been included, and to the failure of the court to give adequate instruction as to the standard of evidence necessary to vary a written agreement.

It was not error to admit the testimony, and there was no necessity for instructions as to the legal standard of evidence required in order to modify or alter a writing. The attempt was not to vary a written agreement. The action was not on the agreement nor between the parties to it. The inventory was made after the agreement was executed, and the testimony-objected to was offered to show that certain articles included in the inventory and for which the defendant had paid himself with the funds of the company, after he became treasurer, came properly under the head of “ improvements,” or were represented by the defendant as being part of the improvements which passed under the agreement. It was clearly competent to identify by parol testimony the things which passed by the purchase, or as to which the defendant was estopped by his representation from asserting title in himself.

The ground of the appeal of the Crown Slate Company was the refusal of the court to sustain its claim to recover on an agreement made by Allen with the purchasers of shares of his stock in which he obligated himself to pay to the company the amount of a call on the stock when it should be made. Several months before the reorganization of the company was effected, but at a time when it was contemplated, Allen sold 250 shares of his stock to F. Hussey, and entered into an agreement in these words: “ In consideration of your purchasing from me two hundred and fifty shares (250 shares) of tbe capital stock of the Crown Slate Company, Bangor, Pa., par value fifty dollars (150) per share or twelve thousand five hundred I agree with you to pay into the treasury on each share four dollars or one thousand dollars immediately upon the call for same by the regular board of directors for the purpose of improvements, after the new organization of the said The Crown Slate Company. This four dollars per share specified is on the stock held by you, viz : 250 shares.” This agreement on its face was clearly not made for the benefit of the company, but as an inducement to Hussey to purchase the stock. He was the only party to be benefited by it, and the company was a stranger to both the agreement and its consideration, and could not maintain an action on it: Blymire v. Boistle, 6 Watts, 182; Guthrie v. Kerr, 85 Pa. 303; Adams v. Kuehn, 119 Pa. 76. It was sought by averments in the statement, to bring the claim within the rule that when the promisor has received money, or property to be converted into money, in trust for a third person, an action may be maintained by the latter. These averments were denied by the affidavit of defense, and no attempt was made to sustain them by proofs. A few days before the trial an amended statement was filed, setting ont more fully and particularly the facts which, it was alleged, gave rise to the trust, and it is now contended that as no answer was filed to the amended statement, the averments must be considered as admitted, and the trust thus established. It appears that the rules of court do not provide for an answer to an amended statement, and the practice has been for the court to specify the time for filing an answer when an amend mentis allowed. No order was made in this case, but the court on the statement of defendant’s counsel that all the averments of the amended statement were denied, directed the plea of non assumpsit to be entered. The case was not tried on the theory that the pleadings made any admission on this subject, and the point is first raised in this court. The case will be treated here as it was tried in the common pleas. The only evidence offered by the plaintiff in support of this claim was the agreement, and its right to recover depended on the legal effect to be given to it.

The. judgment is affirmed.