Court Opinion

ID: 6249911
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:11:32.741773+00
Date Added: 2024-06-11T08:59:23.699783
License: Public Domain

Opinion by
Mr. Justice Brown,
Notwithstanding the twenty-one assignments of error and the very elaborate argument of the learned counsel for appellants, this case is a very simple one, and the only real question before us is whether the court below, with the evidence before it, properly directed a verdict against the Keystone Coal Company. The action was brought by Charles Stegmaier against that company to recover $15,000 and interest on fifteen of its coupon bonds. These, for $1,000 each, were payable to Thomas Ford or bearer and were secured by a mortgage of the company’s property and franchises to the said Ford as trustee for the bondholders. The statement of plaintiff’s claim contained an averment that the bonds were due and payable and belonged to him. The property of the coal company covered by the mortgage became vested in John A. Schmitt, and, upon his death, Victoria Schmitt, his executrix, was, upon her petition, allowed to intervene as a defendant. On her motion a bill of particulars was filed, in. which the plaintiff averred that he had become the owner of the bonds by their delivery to him by one S. L. Brown as collateral security for his. indorsement of two of Brown’s promissory notes for $5,000 each and of one of the Keystone Coal Company for $5,000; that the bonds were pledged for the indorsement of each note and its renewals, with the understanding in each case that if the plaintiff paid the note or notes the bonds should belong to him. On the trial the substituted plaintiffs, the executors of the will of Charles Stegmaier, produced and put in evidence the bonds sued upon, with proof that they were due and payable before suit had been brought. This made out a .prima facie case against the defendants, who thereupon, upon the court’s refusal to enter a judgment of nonsuit, put in evidence the plaintiffs’ bill of particulars, to show admissions by them as to the manner in which they claimed the title to the bonds had been acquired. Further testimony in the case *230tended to prove that Charles Stegmaier, at the time he brought the suit, was the bona fide holder of the bonds as collateral security for his indorsements of the notes specified in the bill of particulars, which he had been obliged to pay; that when he took these bonds there was nothing to show that he knew Brown, who had pledged them to him, had no right to do so. The court, in its opinion refusing a new trial and judgment for the defendants non obstante veredicto, properly said that ho other conclusion could be fairly drawn from the evidence in the case.
One of the contentions of counsel for appellants is that a recovery ought not to have been permitted, because of the variance between the allegations and the proofs. In the statement the allegation is that the bonds belonged to the plaintiff at the inception of the suit; the averment in the bill of particulars is that they were held as collateral security under conditions which made them, at the time suit was brought, the absolute property of the plaintiff. The proof was that they were held as collateral security, and this was proof that they belonged to Stegmaier for the purpose for which they had been pledged. If either the statement or the bill of particulars contained averments not essential to a recovery, the plaintiffs were not bound to prove them. As to this the learned trial judge correctly said: “The allegata from which the proofs must not materially vary, and with which they must be consistent, are those averments of fact contained in the plaintiff’s statement of his cause of action which, if substantiated, would entitle him to recover. If the statement contain other allegations of fact not essential to the cause of action sued upon, the plaintiff is not bound to prove them, and failure to do so would not constitute a fatal variance which would preclude recovery if the essential averments have been duly established: Grubb v. Mahoning Nav. Co., 14 Pa. 302; Sidwell v. Evans, 1 P. & W. 383; Ins. Co. v. Flynn, 98 Pa. 627; Hastings v. Speer, 34 Pa. Superior Ct. 478.”
The bonds were of the same character as commercial paper, negotiable instruments passing from hand to hand by delivery or indorsement, and being of such a character, they gave to *231the holder of them a right to sue upon them. He was not required, as in the case of the pledge of ordinary chattels, to sell them and apply the proceeds to the payment of the debt, but had the right to sue upon them and apply as much of the net proceeds collected as might be needed to pay the debt they were to secure: Lishy v. O’Brien, 4 Watts, 141; Delaware County Trust, etc., Company v. Haser, 199 Pa. 17; Union Trust Company v. Ridgon, 93 Ill. 458; Colebrook on Collateral Securities (2d ed.), sec. 117.
Whether the plaintiffs, if they should recover the whole amount of their judgment, shall be permitted to retain the same is not a question involved in this proceeding. If the bonds were held simply as collateral, and that was the understanding between the pledgor and the pledgee, the appellees will have to •account, as trustees, to the representatives of Brown or to any other legal claimant to the surplus proceeds. This will be the subject of another proceeding, if there is a liability to account. The judgment here concludes no claimant who had an equity of redemption in the bonds.
The assignments of error are overruled and the judgment is affirmed.