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NIEMAN v. SOLTIS

October 15, 1938

NIEMAN
v.
SOLTIS



The opinion of the court was delivered by: KIRKPATRICK

This is a suit at law by the receiver of a closed bank against a stockholder to recover an assessment of the par value of his stock. An affidavit of defense has been filed, and this rule challenges its sufficiency.

The statement of claim alleges the defendant's ownership of the stock, the closing of the Bank, the appointment of several successive conservators and receivers (the last of whom is the present plaintiff), the assessment and demand upon the stockholders by the Comptroller of the Currency, notice to this defendant, his refusal to pay, and the bringing of the suit under authorization of the Comptroller.

 The statement sufficiently sets forth a cause of action.

 The first four paragraphs of the statement of claim, which include the averment of the defendant's ownership of 20 shares of stock of the Bank, are all admitted.

 The fifth to the tenth paragraphs, inclusive, covering the appointment of the conservators, the finding of insolvency of the Bank by the Comptroller and the appointment of the two successive receivers, are denied, but under the statutes and decisions governing the Pennsylvania practice the denials are insufficient and must be taken as equivalent of admissions.

 The paragraphs answering the sixth to the tenth paragraphs inclusive, contain the same averment of want of knowledge and reasonable investigation, plus an averment that "* * * the means of proof of the facts alleged in said paragraph are under the exclusive control of the plaintiff and of the Comptroller of the Currency of the United States of America under whose direction the plaintiff avers he is acting in the prosecution of the suit," etc. These paragraphs follow the language of the Pennsylvania statute governing the sufficiency of affidavits of defense.

 The Act of 1931, P.L. p. 557, provided "that if either the defendant or the plaintiff has no knowledge, and after reasonable investigation is unable to ascertain, whether or not the facts alleged by the opposing party are true, or if means of proof of the facts alleged are under the exclusive control of the party making the allegation, it shall be a sufficient answer to allege that either or both such conditions exist and to demand proof of such alleged facts by the opposite party, but in no event shall either party be required to allege or prove that he has inquired of the opposite party as to, or investigated, alleged facts, the proof of which is under the exclusive control of the opposite party."

 It will be noted that this Act gives a defendant who can not make an explicit denial under oath the right to put the plaintiff to proof of a fact pleaded by him, where either one or both of two conditions exist -- (a) if the defendant has made a reasonable investigation and can not find out whether or not the fact is true, and (b) if the fact is of such kind that the plaintiff has exclusive control of the means of its proof, in which latter case it is not necessary that the defendant make any investigation whatever. The distinction between the two, however, is carefully preserved, and the right to put the plaintiff to proof of facts not within the plaintiff's exclusive control but unknown to the defendant depends upon the defendant being willing to say under oath that he has investigated and failed to obtain the necessary information.

 This Act was amended in 1935, P.L. 666, 12 P.S.Pa. § 390, by adding the following proviso: "In no event, shall the party demanding proof of such alleged facts be required to state, specifically or otherwise, or to prove what reasonable investigation he has made to obtain the information of which he alleges he has no knowledge."

 This proviso was added after the decision of the Supreme Court of Pennsylvania in Bank of America Nat. Trust & Sav. Ass'n v. Sunseri, 311 Pa. 114, 166 A. 573, and was intended to make a change in the law to meet one part of the rule laid down in that opinion. The Court, in the Sunseri Case, said, among other things, that a statement in the exact language of the Act of 1931 to the effect that the defendants "have no knowledge of the facts set forth therein and that after reasonable investigation they are unable to ascertain whether or not the facts alleged therein are true," [page 574] was not a sufficient compliance with that particular branch of the statute, this because the allegation that a reasonable investigation had been made was a mere conclusion of law. The Court held that to bring himself within the terms of this privilege the defendant must particularize and aver exactly what he did, so that the Court could determine whether the investigation was reasonable. Otherwise it was only a matter of opinion. This was the ruling which was met by the amendment of 1935, 12 P.S.Pa. § 390. Its effect is merely to relieve the defendant of the necessity of particularizing, as a matter of pleading, the steps which he took in the course of his reasonable investigation.

 The Sunseri decision, however, covered other points which the Amendment of 1935 did not touch. The Court dealt with certain other denials of the affidavit of defense in that case, made under the other branch of the Act of 1931, to the effect that the means of proof of the facts alleged were under the exclusive control of the plaintiff and said, in effect, that where such statements were obviously false they would not be sufficient to prevent judgment. This ruling was not based upon any failure to comply sufficiently with the requirements of the statute but involved a much broader principle, namely, that no court will permit its process to be trifled with and its intelligence affronted by the offer of pleadings which any reasoning person knows can not possibly be true. This general principle applies just as well to the want of knowledge and reasonable investigation branch as to the exclusive control and means of proof branch of the statute, and the fact that the statute has been fully complied with does not affect the situation.

 It is still the law and is unaffected by the Amendment of 1935. Broderick, Supt. etc. v. Allis, 26 ...


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