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Schencks Appeal. Miller versus Schenck

Supreme Court of Pennsylvania1880-05-03
94 Pa. 37

Summary

Holding. The court affirmed the lower court's refusal to open the judgment, finding that Schenck's prior application to open a related judgment settled the matter, and that in any event, Schenck's deliberate execution of new notes in settlement constituted a ratification that estopped him from later asserting fraud.

John Schenck, who had executed a judgment note as surety for Thomas May, petitioned to open the judgment on grounds of fraud. Schenck claimed that an agent named Martin had misrepresented that a receipt from Detrick would serve as adequate security for his surety obligation. The court found that Schenck's own testimony undermined his fraud claim—he acknowledged that Martin had merely stated the papers were good for what they purported to be, without actively deceiving him. More significantly, even if Schenck had initially been misled, he had deliberately ratified the original contract by executing two new judgment notes fifteen months later in exchange for an extension of payment time. By doing so, he became bound by the original agreement and could not later claim fraud as grounds to reopen the judgment.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a surety may reopen a judgment based on alleged misrepresentations by an agent
  • Effect of ratification on a fraud claim when the obligor executes new notes in settlement
  • Whether a receipt could serve as valid collateral security for a surety obligation

Procedural posture

Schenck appealed the lower court's denial of his petition to open a judgment entered on a warrant of attorney executed as surety.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Mr. Justice Gordon

delivered the opinion of the court,

This was a petition by John C. Schenk, the appellant, to open a judgment entered on a warrant of attorney which he had executed as surety for Thomas May. The court below refused this application on the ground that a like petition had been previously heard and disposed of. If this were correct, if the appellant had had, in this particular, his day in court, and had neglected or refused to appeal from its decree, that certainly ought to end the controversy. He ought not to be permitted to renew his application whenever an attempt was made to collect the judgment by execution. It is, indeed, not strictly correct to say, that disposition was made of an application to open the very judgment in hand, for the rule was to open one of two judgments, subsequently given by the appellant and his son in settlement of the one now in controversy. Nevertheless the effect is the same; for though the appellant might have been induced by the representations of Martin, Miller’s agent, to sign the one thousand dollar note, yet if, after he had full time to inform himself of the character of those representations, he, in consideration of an extension of the time of payment, settled with, and executed new notes to Miller, he .would, thereby, most certainly be concluded and estopped from setting up the fraud of the agent in the original transaction

The complaint is, that through Martin’s representations, the appellant was induced to believe that the assignment of a certain receipt, given by one Detrick to Charles May, on a judgment against Thomas May, would answer to secure him as surety of Thomas May. It was supposed that this receipt would have the effect of an assignment, or would have the effect of subrogating Charles May to the right of Detrick in the judgment. Now, in the first place, whether this representation, if made, was false or not, we have no means of judging, for neither the paper itself nor proof of its contents is before us.

Then again, we have further, the testimony of.Schenck himself that, however much he might • have been deceived as to the value of the receipt, Martin had no part in the work of deception. He says, at the time he signed the. note in controversy, May was to make him a present of $50, assign to him a claim he had against Hathaway and May, which he valued at $740, and the Detrick receipt. He further says he asked Martin if those papers were good for what he signed, and that he answered that they were good for what they called for. He also testifies that neither Miller nor Martin held out guy inducements in order to obtain his signature to either of the three notes. Finally: the judgment in controversy was dated November 23d 1876, payable at one year; on the first of April 1878, some three months after the judgment became due, the parties came together, and in consideration of an extension of one and two years, two new judgment notes were executed by the appellant and his son in settlement of the original judgment. Now, it may be that Schenck was a very ignorant man, and did not know that a receipt would amount to nothing as collateral security; yet this plea of ignorance is, in itself, hardly sufficient to account for a delay of three years in time; to remove the effect of his own testimony, and set aside his deliberate ratification of the original contract, fifteen months after he had entered into it.

The decree or order of the court below is affirmed.