Peterman v. Hamilton Trust Co.

Opinion by

Head, J.,

The plaintiff, a subcontractor, entered into a written agreement with a general building contractor for the performance of certain work in the construction of a number of buildings in the city of Philadelphia. By the terms of that agreement he was to receive about eighty per cent of the stipulated price in cash, payable as the work progressed. For the remaining twenty per cent he agreed to accept the promissory note of the general contractor, payable three months after its date, with the privilege to the maker to renew the same once for a like period. As a *531security for the payment of the note, the general contractor conveyed to one of the officers of the defendant company the title to a described piece of real estate which was then subject only to a first mortgage of $1,500. The agreement provided that upon a failure to pay the note when it became due, the trust company’s officer “shall deliver to the said Joseph Peterman a good and sufficient deed for the within mentioned property free and clear of all mechanics’ liens and municipal claims, subject only to a first mortgage,” etc. The defendant company notified the plaintiff that, in pursuance of this stipulation, title had been conveyed to it and that such title would be held for his protection according to the terms of the agreement quoted.

The plaintiff proceeded with his contract until a very considerable portion of the work had been performed, but stopped work before the contract had been completed. He contended that the cause of his apparent default was the failure of the contractor to supply him with money when and as the agreement provided. He received the promissory note and renewed it once, as he had agreed to do. Upon the failure of the maker to pay at maturity, suit was brought on the note and a judgment recovered in favor of the plaintiff. He likewise obtained a separate judgment for the balance of the cash due him at the time the work was stopped. He thereupon demanded from the defendant the conveyance of the title which had been placed in the hands of the latter for his protection. The trust company refused to convey, and the only reason advanced for such refusal was that the general contractor and his bondsman had requested that such action be taken.

The plaintiff thereupon brought this action to recover the amount of his note. At the trial he produced evidence tending to prove that at the time the conveyance was demanded, the equity of redemption in the hands of the trust company had a greater value than the amount of his note, and thus established a sound basis for a recovery.

The pleadings disclosed some discrepancy between the *532copy of the contract, already referred to, filed by the plaintiff, and the one attached by the defendant to its affidavit of defense. The learned trial judge held that in the determination of the real issue between the parties this discrepancy became immaterial for the sufficient reason that the obligation of the plaintiff, under either contract, was an entire one, and unless he could show substantial performance oh his part, or that his failure to perform resulted from the default of the other party, he could not recover in this action. He was thus .required again to prove, in a contest with the defendant, that his failure to completely perform was legally justified. This was according to the defendant every advantage which it might reasonably expect. When it undertook the trust created by the agreement between the plaintiff and the general contractor, it became its duty to execute that trust according to its terms. It owed no greater duty to the general contractor than it did to this plaintiff. So far as the record shows, its refusal to convey the title which it held in trust was altogether arbitrary and unwarranted. As the jury has found under the submission that the plaintiff suffered by this refusal his right to recover the market value of the equity, or the amount due on his note, would seem to be clear.

We are of opinion the case was properly tried and that the defendant has no just cause to complain of the judgment from which it appeals.

Judgment affirmed.