Court Opinion

ID: 9763961
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:04:21.676472+00
Date Added: 2024-06-11T07:29:51.483420
License: Public Domain

Dissenting Opinion by
Mr. Justice Roberts:
The majority has decided this case upon two wholly erroneous assumptions: (1) that, when the garnishee on February 2, 1965 paid the amount of the judgment plus interest and costs to date, the appellant acquired an unqualified right to have that judgment marked satisfied of record regardless of any action taken by appellant and (2) federal bankruptcy law not only deprives this Court of jurisdiction to award interest to appellee but also mandates that appellee was the author of his own injury.
I believe that the court below correctly concluded that it was bound to accept as admitted appellee’s allegation that appellant’s actions effectively tied up the *96garnished funds and made them unavailable for distribution.1 Esslinger, the moving party below, elected not to take depositions but rather to proceed on the petition and answer. Under Pa. R. C. P. 209(b), in .this procedural posture “all averments of fact responsive to the petition and properly pleaded in the answer shall be deemed admitted. . . (Emphasis supplied.)
It is therefore necessary to proceed upon the assumption that, though the trustee received sufficient funds through the garnishment action to satisfy the outstanding judgment, appellant prevented the trustee from utilizing or distributing these funds. It has been the: rule since Miller v. Bank of New Orleans, 5 Wharton 502 (1840), that only a bona fide tender of the amount due stops the running of interest. This rule flows directly from the function performed by the grant of interest. We said in Kelsey v. Murphy, 30 Pa. 340, 341 (1858), and reiterated in Carbondale City School District v. Fidelity and Deposit Company of Maryland, 346 Pa. 491, 492, 31 A. 2d 279, 280 (1943), that: “ ‘Interest has been defined “to be a compensation allowed to the creditor for delay of payment by the debtor,” and is said to be impliedly “due whenever a liquidated sum of money is unjustly withheld.” ’ ” Appellee’s allegation, admitted by appellant, that appellee was unable to distribute the funds received demonstrates that payment by the garnishee was, in fact, no payment at all.
Appellant’s sole contention is that the trial court, confronted with a petition under the Act of 1876, must *97enter an order directing that the judgment be marked satisfied if it appears that the judgment has been “paid.”2 In light of appellee’s allegation that the federal court litigation prevented distribution of the funds to the bankrupt’s creditors, I fail to see in what manner the judgment can be said to have been paid. Although the trustee did have possession of the funds, under the admitted state of facts the judgment was not paid until appellant relinquished its claim. To conclude, as does the majority, that the proceeds of the garnishment action constitute payment is to ignore both the admitted facts and appellant’s subsequent actions. The proverbial rabbit has never been better concealed.
The majority raises the spectre that the lower court decision would permit a fiduciary who has been paid the full amount of his judgment to refuse to satisfy that judgment. Of course, given the admitted set of facts, the trustee here has not been paid. Furthermore, the trustee’s position is not analogous to that of an ordinary exceptant to an account in the orphans’ court or other complainant to a fiduciary’s accounts. In such situations the usual rules that interest runs from the date a liquidated sum becomes due and from the date of judgment on an unliquidated sum would apply. gee, e.g., Crawford’s Estate, 313 Pa. 127, 169 Atl. 438 (1933). In the instant case, the crucial distinction *98is that the federal court proceedings began after the rendition of judgment while exceptions would be filed prior to judgment and would thus not present a situation requiring the accrual of interest.
The majority places substantial reliance upon the 1963 amendment to §47(a) (2) of the Bankruptcy Act permitting the trustee with court approval to deposit funds of the bankrupt in interest bearing accounts. The briefs and the opinion of the court below contain not a hint that federal bankruptcy law is here relevant. Our precedents are legion that a matter not asserted1 as either a theory of recovery or a matter of defense cannot be successfully asserted for the first time upon appeal. See cases cited and discussed in 2 P. L. E., Appeals §§81-85. Apparently the majority justifies its sua sponte treatment of §47(a) (2) on the theory that “the courts of Pennsylvania have no jurisdiction to im> pose sanctions upon a disputant in a federal bankruptcy case.” Although I can agree with this general proposition, I can find no authority in the Bankruptcy Act, the federal cases or our decisions for the bald majority assertion that the lower court’s order would intrude upon the federal domain. Nor can I find a shred of support for the majority’s conclusion that appellee’s sole remedy is upon the bond posted in the federal courts. Even if §47(a) (2) were applicable, it would merely decrease the amount of interest recoverable for it is highly unlikely that any deposit approved by a federal court would have returned the legal rate of interest which appellee is, in my view, entitled to receive. Therefore, with interest still owing, the lower court properly refused to order the judgment satisfied of record.
Nor can it be said with certainty that the trustee was the author of his own injury because he failed to petition the court for permission to deposit the garnished funds in interest bearing accounts. Prior to *99the 1963 amendment the trustee was subject to surcharge if funds were not deposited in designated, non-interest bearing, depositories unless all creditors consented to an interest bearing deposit. See Huttig Mfg. Co. v. Edwards, 160 Fed. 619 (8th Cir. 1908) ; In re Dayton Coal & Iron Co., 239 Fed. 737 (E.D. Tenn. 1916); 1963 United States Code Congressional and Administrative News 634, reprinting Senate Report No. 147 to accompany HJR. 2849, 88th Cong., 1st Sess. The federal courts have yet to construct standards governing those situations in which the trustee should apply for permission to utilize an interest bearing deposit. Absent those standards, it is pure conjecture to assume that the trustee would have been able to procure the necessary court approval and thus obtain interest.
Reduced to its essentials, the majority opinion holds that a debtor with one hand may pay his debt while with the other simultaneously deprive his creditor of the use of those funds and yet have the judgment satisfied. This is a proposition I cannot accept and must therefore dissent.
Mr. Justice M u sm a n no and Mr. Justice Eagen join in this dissenting opinion.

 Paragraph 7 of appellee’s answer states: “Pillion [the bankruptcy trustee] avers further that the funds paid by the garnishee as a result of the attachment execution were effectively tied up by petitioner’s proceedings before the referee, the District' Court and the Court of Appeals, and since said funds were not available for distribution in the bankrupt estate solely because of petitioner’s actions, interest should run thereon.”

 Cited for this proposition are Atkinson v. Harrison, 153 Pa. 472, 26 Atl. 294 (1893) ; Melan v. Smith, 134 Pa. 649, 19 Atl. 738 (1890) and Felt & Co. v. Cook & Hackett, 95 Pa. 247 (1880). None of these cases support appellant’s theory that the lower court is confined merely to an examination of whether the garnishee actually paid the judgment. In Atkinson we held that the Act of 1876 is applicable only in clear cases of undisputed payment; in Melan that the trial court cannot investigate the original equities or apply cross demands; and in Felt that evidence which might be admitted to show payment in a pending adversary proceeding prior to verdict is not admissible under the act.