Case Name: Vogeley's Appeal
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1888-10-29
Citations: 2 Monag. 218
Docket Number: Appeal, No. 10
Parties: Vogeley’s Appeal.
Judges: 
Reporter: Cases in the Supreme Court of Pennsylvania; being those cases not designated to be reported
Volume: 2
Pages: 218–224

Head Matter:
Vogeley’s Appeal.
On an application to open a judgment given as guaranty for a bank officer, on the ground of fraud, the court found that there was no fraud in its execution, and declined to open the judgment. Held, on appeal, that the judgment would be affirmed.
Oct. 15, 1888.
Appeal, No. 10, Oct. T., 1888, from an order of the C. P. Butler Co., discharging a rule to open a judgment of W. D. Branden, to use of the Butler Savings Bank against Geo. Vogeley, at Sept. T., 1886, No. 77. Williams, J., absent.
The averments of the petition for the rule and the answer are stated in the opinion of the court below. On the hearing of the rule, the following resolution of the bank, passed April 5, 1875, was given in evidence:
“ Resolved that E. W. Vogeley be, and is hereby, appointed --of this Bank, to serve until the annual election, upon this express condition that he prove satisfactory to. the Board, they reserving the right to terminate his duties at the end of any month; and provided further, that he give bond with approved surety in the sum of ten thousand dollars for the faithful discharge of his duties.”
It appeared by the evidence that the embezzlements occurred in the years 1883 and 1884.
The further facts appear by the opinion of the court, as follows, by Hazen, P. J.:
“ The judgment entered in this case was upon a bond, dated Feb. 17, 1885, at one year, to order of W. D. Brandon, for $10,000, with warrant of attorney to confess judgment, etc. This bond was accompanied with a mortgage on defendant’s real estate, situate in Butler, Pa., to secure payment of the debt therein recited. A writ of fieri facias was issued thereon, on June 29, 1886, for the debt, interest, commissions and co*sts. This writ was stayed on July 5, 1886, on the petition of the defendant presented in court, and this rule to show cause granted. The defendant prays the court to open this judgment and permit him to defend against the use-plaintiff’s demand, and assigns, inter alia, the following reasons, viz: That his son, Edward W. Vogeley, was, on May 6, 1875, employed as teller of the said Butler Savings Bank, and gave ‘ security in $10,000, con ditioned for the faithful discharge of his duties as teller.’ And also that he, with said Edward W., executed and delivered to said Butler Savings Bank a bond in $10,000, dated May 6, 1875, conditioned as follows, viz: ‘ The condition of this obligation is such that if the above named Edward W. Vogeley, who has been duly chosen --of the Butler Savings Bank, located in Butler, Pennsylvania, shall faithfully execute and perform all his duties as--■ of said Bank, then this obligation, to be null and void, or else to be and remain in full force and virtue.” It was signed and sealed by Edward W. Vogeley and George Vogeley.
. “ That said Edward W. remained continuously in the employ of said Bank up to February, 1885. That the employment of Edward W. was changed from that of teller to that of book-keeper or general bdt>k- keeper of said Butler Savings Bank. That the duties of said Edward W. ‘ were entirely different ’ and ' his responsibilities largely increased, and the opportunities and temptations to make false entries, embezzle the funds of said bank, and engage in outside speculations with the bank’s funds very materially enhanced, beyond, above and exceeding all possibilities in the discharge of his duties as teller.’ That it is alleged that during his said employment as book-keeper, or general book-keeper, Edward W. Vogeley made divers false entries in the books of said bank, embezzled the funds thereof and engaged in outside speculations with the said funds and became a defaulter to said bank in a large amount. That on Feb. 17, 1885, W. D. Brandon, Esq., attorney, and J. L. Purvis, one of the directors of said bank, came to the place of business of, and informed, defendant that said Edward W. was a defaulter to said bank in a large amount, and insisted upon defendant giving another bond as surety for said Edward W. That they promised defendant that if he would give a new bond and mortgage, in place of the old or original bond, dated May 6, 1875, it should not be entered and everything would be kept secret, and no exposure made of the defalcation by Edward W., and no criminal proceedings instituted against him for said defalcation. Also that they alleged, claimed and insisted that the defendant was liable on the bond of May 6, 1875, in $10,000. That they, by these representations, induced the defendant to believe he was liable on said bond. That this interview was the first information defendant had of this matter and it completely unfitted him for transacting business intelligently. ‘ That defendant then requested him to consider this proposition and consult an attorney as to what course to pursue, but that they, Brandon and Purvis, refused to give any time, but urged and insisted upon defendant at once signing the bond and mortgage, and stated that Mr. A. M. Cornelius, a notary public, was there and knew nothing of the matter. That the defendant, relying upon these representations, signed and acknowledged the bond and mortgage. Further, if Edward W. Vogeley is a defaulter, he became such as book-keeper or general book-keeper, a position for the faithful discharge of the duties of which defendant never was security. That Edward W. Vogeley never was a defaulter as teller in said bank. That, on Feb. 17, 1885, the time of executing said bond and mortgage, Edward W. was not in the employ of said bank.
“ In answer to the rule, in this case, the use-plaintiff traverses every material allegation raised in defendant’s petition. This presents the issue, and what then are the facts ? The rule of law throws the burthen of proof upon the petitioner — defendant in the judgment. Then, has defendant made out, by the preponderance of evidence, such a case as would justify the court in entering a decree that this bond and mortgage are void by reason of fraud, want of lawful consideration or mistake ? If not so clearly made out, then defendant’s prayer must be refused and proceedings dismissed and this judgment suffered to stand, though it work a very great hardship®to defendant. After careful examination of the voluminous testimony offered for and against this rule, I find the following facts, viz:
“ 1st. That, on May 6, 1875, the Butler Savings Bank, organized under the laws of said state, was doing a general banking business in Butler, and had no officer known as teller, whose duties were specifically designated as such, but that it had employees under different names whose duties varied from time to time.
“ 2nd. That said Edward W. Vogeley was employed by said bank on ‘ May 6, 1875,’ as a bank clerk, to do such work in said bank as might fall to his lot from time to time, and that his said employment was sometimes designated or known as that of ‘ teller,’ and at other times as ‘ book-keeper,’ and that the general character of his services changed but little, if any, while so employed, and that he remained continuously in the employ of said bank as a ‘clerk,’ ‘ teller,’ or ‘ book-keeper,’ as his employment might happen to be called, up until February, 1885.
“ 3d. That, while so employed, he made numerous false entries in the books of said bank and appropriated to his own use, without the knowledge of the officers of said bank, large sums of money belonging to said bank, to-wit: to the amount of $42,000, and upwards, with intent to cheat and defraud said bank of the same.
“4th. That the bond of Edward W. Vogeley and George Vogeley, dated May 6, 1875, given to said bank in $10,000, as security for his faithful discharge of the duties of his position in said bank, remained in the custody of said bank, valid and subsisting security, according to its conditions and intent, when executed and delivered. [3]
“ 5th. That, on Feb. 17, 1883, said George Vogeley executed and delivered to W. D. Brandon, Esq., and J. L. Purvis, acting for said bank, the bond and mortgage in suit, together with the declaration of trust accompanying same, and, at his request, received the bond of May 6, 1873.
“ 6th. That said bond and mortgage were executed and delivered to said W. D. Brandon, Esq., and J. L. Purvis, with said dec laration of trust, in settlement of his, George Vogeley’s liability to said bank on said bond of May 6, 1875, and breach of its conditions by said Edward W. Vogeley. [4]
“ 7th. That defendant’s allegation that said bond and mortgage and declaration of trust, of Feb. 17, 1885, was executed and delivered by him on the faith, strength and credit of a certain promise, claimed by him to have been made to him at that time by said W. D. Brandon, Esq., and J. L. Purvis, that it should not be entered, and that everything would be kept secret, and no exposure made and no criminal proceedings would be instituted against said Edward W. Vogeley for said defalcation, is not sustained by the proofs adduced. This very material allegation of defendant is not supported in any wajf save by his own testimony, and, in .an immaterial matter, by Geo. W. Pillow, Esq. But, on the contrary, this allegation is contradicted by the positive testimony of W. D. Brandon, Esq., J. L. Purvis, A. M. Cornelius and Geo. W. Pillow, Esq., in part, and the papers in this case, the bond, mortgage and declaration of trust.
“ 8th. That defendant’s allegation that he was not allowed time to consider the proposition, and consult an attorney, of W. D. Brandon and J. L. Purvis, to execute the papers at once, and did so execute and deliver them, is not sustained by the proofs, but, on the contrary, is contradicted by the positive testimony of W. D. Brandon, Esq., J. L. Purvis, and, in part, by A. M. Cornelius, Esq., and Geo. W. Pillow, Esq.
“ 9th. That there was no promise made to the defendant to the effect that Edward W. Vogeley would not be prosecuted, to induce him, defendant, to execute said bond and mortgage, and that there was no fraud or false representations made to secure the same, but that the transaction was open, fair and j ust.
“ 1 oth. That it was quite as much the interest of the defendant, being surety for Edward W., to watch him as it was his employers, and if his said employer was over-reached by confiding in his honesty, it is no good ground of complaint now, or reason for releasing his security. Bank v. Martin, 1 Ches. Co. 374.
“ From this state of facts, I am constrained to hold that there is not enough in the testimony of defendant to justify the opening of this judgment and submitting the case to a jury, but, on the contrary, I am fully satisfied that the weight of evidence is clearly against granting the prayer of petitioner defendant. The proofs adduced by defendant certainly would not, in the light of the whole case, justify a jury in rendering a verdict for defendant, therefore the prayer of defendant should be refused, and rule discharged.
“And now, Sept. 20, 1887, rule discharged at costs of defendant.”
The assignments of error specified the action of the court, 1, in making the order refusing to open the judgment; 2, in not making absolute the rule to open the judgment and let the defendant into a defence; 3, the fourth finding of fact by the court, quoting it; and, 4, the sixth finding of fact by the court, quoting it.
Charles McCandless, with him Williams & Mitchell, for appellant.
When the nature of the employment of the principal is so altered by the act, either of his employer or of the Legislature, that the risk of his surety is materially altered, the surety has the right to say: “ I did not bargain for this risk; I am discharged.” Brandt on Suretyship, page 609; Brez v. Warner, 9 W. N. C. 45 ; North Western National Bank of Minneapolis v. Keen, 8 W. N. C. 283.
Where a bond is given by an officer of an association conditioned for the faithful performance of his duties, the condition is to be confined to the period of appointment or election for which the bond was given. Mut. B. & L. Asso. v. McMullen, 1 Penny. 431; Kingston Mut. Ins. Co. v. Clark, 33 Barb. 196; Manufacturers and Mechanics’ Savings and Loan Co. v. Odd Fellows’ Hall Association of Spring Garden, 48 Pa. 446; North Western National Bank of Minneapolis v. Keen, supra; Add. on Contracts, 126; Mayor, etc. of Cambridge v. Dennis, 27 L. J. Q. B. 474; Lord Arlington v. Merricke, 2 Saunders, 411; Liverpool Waterworks v. Atkinson,6 East, 507; Barker v. Parker, 1 Term, 295 ; Peppin v. Cooper, 2 B. & Aid. 431; Com. v. Baynton, 4 Dali. 282; Com. v. West, 1 Rawle, 31; Com. v. Reitzell, 9 W. & S. 109 ; Brandt, Suretyship, pp. 196, 489, 607,609.
The law requires that, in dealing with bail, the principals must disclose all material facts within their knowledge to the surety, before they can take a new binding security from him, or in any way enlarge his original liability. The resolution of April 5, 1875, employing Edward Vogeley and stating that he was to serve to the next annual election, and limiting the bail’s liability to that time, never was communicated to George Vogeley, the bail.
The inference of fraud is easily and almost inevitably drawn where there is a suppression or concealment of material circumstances and one of the contracting parties is knowingly suffered to deal under a delusion. 2 Kent, pp. 668, 669; Lancaster Co. Bank v. Albright, 21 Pa. 228; Templeton v. Shakely, 107 Pa. 377; Brant, Suretyship, 492; Doughty v. Savage, 28 Ct. 146.
The sam*e rule applies to the case where a party pays money, in ignorance of circumstances with which the receiver is acquainted, and does not disclose, and which, if disclosed, would have prevented the payment. 2 Kent, pp. 669, 670; Heane v. Rogers, 9 B. & C. 577; Dewey v. Field, 4 Mete. 381.
Concealment or fraud by an agent is as fatal as if practiced by the principal. Chitty, Contract, 679; 1 Arch. N. P., 119.
A mortgage whose consideration in whole or in part is the stifling of a prosecution for conspiracy to defraud and for embezzle ment of a bank officer, is void. Pearce v. Wilson, m Pa. 14; Riddle v. Hall, 99 Pa. 116.
George Vogeley, the bail, was in no way or manner liable to the bank on the old bond at the time he gave the new obligations, Feb. 17, 1885. There was, therefore, no consideration for the new obligations and they ought not to be enforced. Smith v. Phila. Bank, 14 Pa. 525; Lancaster Co. Bank v. Albright, 21 Pa. 228.
The power of the court of common pleas in relation to the opening of judgments is most ample, and policy requires that it should be liberally used. Kalbach v. Fisher, 1 Rawle, 323.
Jas. Breden, with him L. McQuistionJor appellee.
The burden of proof is on the petitioner to open a judgment, and he is to be held strictly to the rule requiring two witnesses, or one witness and corroborating circumstances, where his allegations are denied under oath, and especially when the only witness is the petitioner himself. Knarr v. Elgren, ig W. N. C. 531; English’s Ap., 21 W. N. C. 298 ; Phillips v. Meily, 106 Pa. 536.
Want of consideration cannot be set up. This is a bond, a sealed instrument importing consideration, which requires no consideration to give it validity, even in a court of equity; and one, from which, from the performance of its condition for the payment of money, a court of equity will not relieve an obligor on the ground merely of defect of consideration.
Moreover, there is here an extension of time by the obligee; an acceptance of the several bond of the surety in lieu of the joint and several bond of principal and surety, and a surrender of such joint bond to the surety at his request. By the surrender of the original bond, the position in which affairs stood when this bond was taken has been so materially altered that the statu quo cannot be restored, and, in fact, there has been no offer to return the joint bond, or attempt made at such restoration.
The decisions referred to by appellant have no bearing on this case. This was the settlement of a liability or supposed liability of a surety already incurred, not the entering into a suretyship where material facts, known to the creditor, which, if revealed, would have likely deterred the surety from assuming a responsibility for future transactions between the principal and the creditor, or from taking on himself the burden of an existing liability of the principal for which he was not bound, were concealed from him. There were no confidential relations between the bank and the surety, as to such settlement, that required the bank to make examinations or consult lawyers to learn whether the surety had been released or discharged from the condition of his obligation by the acts of its officers.
The case of Smith v. Phila. Bank, quoted by appellant, held correctly that endorsers of a promissory note, relieved from liability as such by the acts of the holder, did not renew their liability by the subsequent endorsement of a draft, not negotiable, though drawn to pay said note. The latter endorsement was a nullity, so far as liability was concerned, and from the former they had been released. Both were lifeless, neither could revive the other.
Oct. 29, 1888.
In Lancaster Co. Bank v. Albright, the attempt to avoid the effect of fraudulent conduct on the part of the creditor, which released the endorser, by showing that the endorsement was merely the renewal of a prior endorsement, was met by proof that the endorser had been discharged therefrom by want of notice of nonpayment.
In neither of these cases was the consideration a question. In one there was no promise; in the other a fraud had been committed.
If a court of equity can in any case relieve against a mistake of law, where the defendant has been guilty of no fraud or unfair practice, which is at least very doubtful, it must be in a case in which the defendant has in reality lost nothing whatever by the mistake, and where the parties can be restored substantially to the same situation in which they were at the time the mistake happened. Crosier v. Acer, 7 Paige, 137.

Opinion:
Per Curiam,
According to the finding of the learned judge who tried this case, by which we are bound, the rule was properly discharged. We may also add that an examination of the evidence leads us to believe that those findings were substantially correct. As a consequence, none of the assignments can be sustained.
The decree is affirmed at the costs of appellant.