Ahl v. Ahl , 176 Pa. 466 ( 1896 )

Opinion by

Mr. Justice Williams,

There is but a single question of fact about which the parties to this action are at variance. The position and significance of that question will be readily seen by a glance at the facts that are conceded. * The firm of J. S. Ahl & Company consisted of J. S. Ahl, John A. Ahl and D. V. Ahl, residents of Cumberland county, Pa. They were engaged in the manufacture and sale of pig iron at Antietam, Maryland. They obtained much of their iron ore from a tract of land in West Virginia known as the Virginia Ore Bank. The furnace at Antietam was owned by D. V. Ahl. The tract of ore was owned by the members of the firm as tenants in common. In 1877 the firm became somewhat embarrassed, and the continuous operation of the furnace was necessary to the payment of its debts. In order to make this possible, it was agreed that Q. P. Ahl, the plaintiff, a son of one the partners, should take the lease of the iron works and conduct the business in his name for the benefit of the firm. At the same time, the stock of coke and ore on hand was transferred to him and the ore tract was conveyed to him. The business was then continued by the firm, in the name of Q. P. Ahl, and under the superintendency of William C. Bradley, until the first of April 1880 when it was closed. About the time work was begun in the name of the plaintiff, an agreement was entered into by the members of the firm for the purpose of indemnifying him against any liabilities he might incur on their account in consequence of the use of his name in what was actually their business. This was a reasonable and proper precaution for the protection of Q. P. Ahl under all the circumstances, and the weight of the evidence is in favor of the defendant’s allegation that it was duly delivered to him at the time it was prepared and signed. At all events, it is conceded that the work was carried on at Antietam by the firm, in his name, and that the money was furnished by the firm for all the expenses incident to the business. The plaintiff claimed no interest in the business as against J. S. Ahl & Co., nor as we understand did he claim royalties for the ores used. Late in the year 1877, William T. Hamilton, a creditor of the firm for a considerable sum, insisted on additional security for the money due him. To satisfy this demand, the firm offered and he accepted the Virginia ore tract; and a trust deed of it was made by the members of the firm and Q. P. Ahl to F. M. Darby for the purpose of subjecting it to Hamilton’s debt. More than seven years afterwards, the ore bank land was sold under an order of the Circuit Court of West Virginia for the payment of this debt. In 1892, D. V. Ahl died. On the sixteenth day of September 1893, or about six years after the sale of the ore bank by the sheriff, this action was brought. The position of the plaintiff now is that he became the owner of the ore tract by virtue of the conveyance of 1877, and that he paid $8,000 to the firm as purchase money therefor; that he joined in the trust deed without any consideration therefor; and that the subsequent sale of the tract for Hamilton’s debt was an appropriation of his property for the benefit of J. S. Ahl & Co. for which he has a claim upon the members of the firm for reimbursement. This claim does not seem to have been made upon the firm while it was in existence, nor upon any member of it in his lifetime, nor until a year after the last survivor was in his grave. The single question of fact raised on the trial was over the payment by the plaintiff of the purchase money for the Virginia ore tract. If tins was not paid, then the title of the plaintiff to the ore tract was like his title to the lease of the furnace, and to the coke and ores in stock, at the time the business was undertaken for the firm in his name. The defendant alleges that these titles were put in Q. P. Ahl at that time to enable the firm to continue its business, for purposes of liquidation, in his name; and that he had no ownership in anything that was so transferred except as the agent of J. S. Ahl & Co. and that the execution of the trust deed by the plaintiff was a use of the title of the ore tract in accordance with the interests and directions of the owners, and its consequent sale by the sheriff divested no property right of the plaintiff, but simply applied the proceeds of the tract to the debt of its owners.

Now it will be seen that this is not a proceeding against a trustee. If a trust ever existed it has been voluntarily executed. It is not an effort to escape the bar of the statute of frauds. It is an action in which the plaintiff claims to recover for money raised from his property, .with his full consent, and applied to the payment of the debts of J. S. Ahl & Co. The reply made by the defendant is that the property from which the money was raised did not belong to the plaintiff but was the property of the firm to whose debts it was appropriated. The question thus distinctly raised between these parties between whom confidential relations existed at the time is, did the plaintiff pay the owners for this land in 1877, or did he take it as he took everything else relating to the business of this firm for the benefit of the firm ? The points submitted on the part of the plaintiff drew the attention of the learned judge away from this question, and led him to leave on the minds of the jury the impression that to justify a verdict in favor of the defendant, it was necessary for him to establish a parol trust by evidence that was precise, full, clear and satisfactory; and that he had failed to furnish such evidence. The assignments of error from the 3d to the 7th inclusive relate to this subject. The part of the charge embodied in the seventh assignment will show the character of the instructions referred to. The learned judge said “ It has been claimed by the defendant, to a certain extent at least, that it (the ore tract) was conveyed upon a certain trust, and on behalf of the plaintiff it is contended that there is no legal proof of a trust, or that whatever trust there is being simply by parol it could not be received to establish an express trust, and in that respect we agree with the contention of the plaintiff. There is no competent evidence produced here that would establish an express trust, for two reasons, first, because it is not in writing as required by law, and, second, because it is not definite, clear and distinct, such proof as is required for the purpose.”

There is a sense in which the arrangement between J. S. Ahl & Co. and the plaintiff may be said to have created a trust inasmuch as he clearly held the iron works, the coke, the ore, and the business, simply for'the benefit of the firm; but it was a trust recognized and executed without question. The trust relation in tins sense of the word was a conceded fact in the cause. It embraced, even in the plaintiff’s own view of it, everything that came into his'hands from the firm except the ore tract. This tract he used as he would have used it if he had recognized the trust as to it. He subjected it to the debts of the firm. He practically turned it over to them by the trust deed. Now after the lapse of many years he sets up a claim to be reimbursed. The defendant answers that this ore tract was part of the property of the firm put into his hands to enable Mm to go on with the business of J. S. Ahl & Co., for their benefit. That he entered upon this trust, executed it, closed out the business, and retired from it having converted the property in Ms hands includmg the ore tract to the purposes of the firm. The reply is “ what you say is true except as to this tract. This I took for myself and paid for it.” This then is the only question. Did the plaintiff pay for this particular piece of property when the conveyance was made to him ? If he bought it and paid for it, it was his. If he did not, it was like all else that the firm turned over to him, a part of the property needed in the prosecution of the iron business and the payment of the debts of the firm; and it was used in accordance with the wishes of the real owners.

So much of the first assignment of error as relates to the admission of the ledger of the plaintiff as evidence agamst the defendant is also sustained. It was offered and received as proof of the payment of the purchase money for the ore tract to J.' S. Ahl & Co. It was clearly incompetent and we do not see that the defendant has waived the objection taken at the time by Mm.

An additional observation should be made in regard to the agreement of June 13, 1877, indemnifying Q. P. Ahl against liabilities to be incurred in the conduct of the business of J. S. Ahl & Co. TMs paper in connection with the evidence relating to the time of its preparation and delivery is strongly corroborative of the defendant’s position. It harmonises with the relations conceded to exist between the parties, and was entitled to weight on the disposition of the single question of fact in the case for the additional reason that its recitals are really inconsistent with the position now taken by the plaintiff. We agree with the learned judge that the verdict appears to be against the weight of the evidence; and we think tMs must be accounted for by the fact that the jury were led away from the single question m the case and drawn to the conclusion that having failed to establish a valid trust under the statute the defendant had failed to make a defense to the plamtiff’s claim and that the plaintiff was therefore entitled to recover. The judgment is now reversed and a venire facias de novo awarded.