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January 2, 1951


Appeals, Nos. 83, 84 and 85, March T., 1950, from order and decree of Court of Common Pleas of Indiana County, Sept. T., 1937, No. 459, in case of Meyer Manson et al. v. First National Bank in Indiana. Order and decree reversed.


John A. Metz, Jr., with him James W. Mack, Jr. and Metz & Metz, for appellants.

James L. Jack, with him J. Wayne Tomb and Tomb & Tomb, for appellee.

Before Drew, C.j., Stern, Stearne, Jones, Ladner and Chidsey, JJ.

Author: Stern

[ 366 Pa. Page 212]


This is an appeal by plaintiffs from an order and decree of the court below entering judgment of non pros in an action of assumpsit.

[ 366 Pa. Page 213]

The suit was started in August, 1937 by the filing of a praecipe and a statement of claim. The statement set forth alleged facts which may be summarized as follows: In 1936 a petition under the Bankruptcy Act for reorganization of the Penn Indiana Brewing Company was pending in the federal court. There were then four mortgages against the Company's real estate; the first and second were held by one McGregor as nominee of defendant bank, the third was held by defendant itself, and the fourth by a New York finance company. A plan of reorganization was submitted to the creditors dependent upon the raising of additional capital in the sum of $30,000. Plaintiffs were induced to loan this sum to the Brewing Company on the verbal agreement of defendant that it would postpone a certain part of its third mortgage to a new fourth mortgage in the sum of $30,000 to be given by the Company to plaintiffs and which was to take precedence over the existing fourth mortgage; for the part of the third mortgage thus postponed defendant would take a junior lien. Defendant also agreed that in the event of the foreclosure of any of the mortgages, or in the event of bankruptcy or other judicial sale of the property, if plaintiffs should become the successful bidders at the sale defendant would continue in force the two mortgages held by it and would have have its nominee McGregor likewise continue the two mortgages held in his name. On the faith of this agreement, which was to be confirmed by letters signed by defendant and McGregor respectively, plaintiffs advanced to the Brewing Company the sum of $30,000. The reorganization plan was approved by the creditors and was put into effect but subsequently the proceedings were reopened, a trustee was appointed, and a sale of the Company's real estate was had. Meanwhile plaintiffs demanded of defendant the promised letters, but defendant announced that it would not deliver the McGregor letter nor would it

[ 366 Pa. Page 214]

    carry out its contract to continue the mortgages upon plaintiffs' becoming the successful bidders for the property; the result was that plaintiffs were financially unable to did in order to protect their loan and the real estate was sold to defendant for $35,000. Plaintiffs thereupon sued to recover the $30,000 which they had loaned to the Company in reliance on defendant's agreement.

Defendant obtained from the court 4 months' extension of time in which to file an affidavit of defense. The case was ordered on the trial list for September, 1938 and again for November, 1938; when then called for trial, and after some testimony had been taken, counsel for defendant contended that the statement of claim should be amended to add two additional persons as plaintiffs to the one originally named, and he moved for the withdrawal of a juror and continuance of the case. The court granted the motion and in March, 1939 an amended statement of claim was filed. The case was listed for trial in April, 1940, but was again continued on defendant's application on the ground that one O'Hare, alleged to be a material witness for defendant, was ill in a hospital, and defendant's counsel admits that he did not at any time thereafter inform plaintiffs' counsel that O'Hare had become available as a witness. In December, 1941 the United States entered the world war and, because of the belief of plaintiffs' counsel that they could not proceed without the testimony of one Sproul, who was in the military service until 1946, no further attempt was made to bring the case to trial until January, 1948, when plaintiffs' counsel conferred with ...

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