Atkins v. Payne

Opinion by Mb. Justice Fell,

Payne & Company, the appellant, entered into a contract to erect a building, and Keen contracted with them to furnish and set up the structural iron and steel wort. Keen bought the iron and steel of the receivers of the Pottsville Iron & Steel Company, and Payne & Company guaranteed payment by him. This action was on the guarantee. The ground of defense was that the receivers, for the purpose of enabling Keen to obtain payments on account from Payne & Company, had given him receipts for payments to them which were in excess of the» amount actually received, and that in reliance on their receipts Payne & Company had been misled to their injury in paying Keen. When the case was here before, it was decided that the receipts were open to explanation, but that to the extent, if any, to which the appellants had been injured by relying on them, the receivers were conclusively estopped from denying their validity. See 190 Pa. 5 . At the second trial there was no dispute as to the accounts. Payne & Company had paid Keen in full, and Keen owed the receivers $2,875 on the guaranteed account. The only question was whether Payne & Company had relied on the receipts, and whether by so doing they had sustained a loss.

The first receipt which it is alleged misled them was for $7,000 dated August 15,1896, and in it the amounts paid were specified as follows: July 21, $2,500; July 25, $2,500; August 11, $2,000. Only the first payment of $2,500 had in fact been made. On July 25 and August 11, Keen had accepted drafts at thirty days for the other amounts mentioned. On the presentation by Keen of this receipt, Payne & Company gave him $7,000, without any stipulation as to the use he should make of the money. He at once used $4,500 of it in paying the drafts, and he subsequently paid $1,000 of it to the receivers ; the balance, $1,500, he used for other purposes. The second receipt was for $4,000, dated September 15, and on its *561 presentation Keen was paid $2,500, on condition that lie should pay it to the receivers. This lie did. There is no evidence of an intention on the part of the receivers to deceive Payne & Company. They treated Keen’s acceptances as cash payments, and receipted for them as such. On August 15, when the first receipt was given, the work was finished, and the state of the accounts between the parties was such that if Payne & Company had applied all the money due Keen to the payment of the receivers’ account against him, which they had guaranteed, they would have discharged all of the debt except $992. Because they could thus have protected themselves against a part of the loss, they claim to have been injured by reliance on the receipt for $7,000 to the extent of the difference between the present claim of the receivers, $2,881, and the amount to which their loss might have been reduced, $992.

This claim cannot.be sustained unless we give to the receipt some other effect than that of an acquittance to Payne & Company for $7,000, and this is all that it was meant to be. Their loss did not result from the fact that, relying on the receipt, they paid more than otherwise they would have been required to pay, but from their failure to secure the application of the money they paid Keen to the further reduction of the receivers’ claim. If the whole amount represented by the receipt as paid, had been paid before the receipt was given, the balance due the receivers would have "been the same that it was after the payment of the drafts. If before August 15, Keen had borrowed $4,500, instead of giving his acceptance for that amount, and had used the money to pay the receivers, the receipt would have disclosed the actual state of the account. And if, after he had received the payment from Payne & Company, he had used $4,500 of the money to pay the loan, the result to them would have been exactly the same. The balance due Keen before the payment of $7,000 was less than the receivers’ claim, and the only means by which Payne & Company coiild have protected themselves against a greater loss was by withholding the whole of the balance due on his contract. It may be that if they had known that the whole of the payment to the receivers was not in money, that they would have been more cautious, and would have taken means *562 to secure tbe application of the balance due him to the guaranteed debt. But they knew from the state of the accounts that unless Keen handed the whole of this money to the receivers, the loss which was already fixed upon them would be increased. Of this they took the chance, and all that can be said in support of their present contention is that the receipt tended to give them confidence in Keen’s ability to comply with the contract. As between them and the receivers, the receipt es-topped the latter from ever denying that they had received $7,000, and it had no effect except as an acquittance for this amount.

The $2,500, paid when the receipt for $4,000 was presented, was turned over to the receivers by Keen, and there is no ground for complaint as to it. All the money Payne & Company parted with in reliance on it, went in relief of their obligation.

The judgment is affirmed.