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Baurhenn v. Fidelity and Deposit Co.

Decided: January 10, 1935.

LOUIS P. BAURHENN, PLAINTIFF-APPELLANT,
v.
FIDELITY AND DEPOSIT COMPANY OF MARYLAND, DEFENDANT-RESPONDENT



On appeal from the Supreme Court, Essex Circuit.

For the appellant, Patrick H. Harding.

For the respondent, Fred G. Stickel, Jr.

Campbell

The opinion of the court was delivered by

CAMPBELL, CHANCELLOR. This is an appeal from a judgment in favor of the defendant below entered upon a verdict directed in its favor.

One Lyon and two others associated with him had been apprehended on a criminal charge and brought before a magistrate in Philadelphia who fixed bail for all three in sums aggregating $3,100. To secure his immediate release in the custody of his attorney, one Frye, a member of the Pennsylvania bar, Lyon deposited a diamond ring and turned over the possession of an automobile.

Lyon then appealed to his friend, the plaintiff below, to aid him in securing proper bail bonds for himself and two associates and induced him to deposit $3,100 with the defendant company. This was accomplished by a draft for that amount upon the Howard Savings Institution of Newark and deposited at the defendant's branch office in Newark.

The bail bonds were duly furnished by the defendant company which, thereupon, entered into an indemnity or collateral security agreement with the plaintiff respecting the $3,100 that had been deposited by the latter with the former. This bears date January 9th, 1933. It provides, inter alia:

"Eighth. That the surety shall upon its being furnished at its home office with evidence satisfactory to it of the termination of said bond or bonds without claim thereon or without the surety's having any notice or knowledge of facts tending to indicate a claim thereupon and without loss, costs, damages, expenses, attorney's fees, or liability therefor, as aforesaid, and upon the payment of all premiums, and of all other indebtedness, as aforesaid, surrender to the owner, said collateral upon the return of this instrument with a receipt endorsed hereon."

On February 28th, 1933, while the bail bonds were still in effect, but when a settlement of the criminal proceedings against Lyon and the other two defendants was apparently imminent, the plaintiff wrote the defendant respecting the repayment and distribution of the $3,100 he had deposited, as follows:

"Gentlemen: With reference to the bond of $3,100 on deposit for Nelson F. Lyon, Leroy Stager and one other will you kindly arrange to pay Michael C. Goglia, Philadelphia lawyer, the sum of $500 as his fee, providing Nelson F. Lyon, Leroy Stager and one other, have been cleared of all charges by the Commonwealth of Pennsylvania and return the balance of $2,600 to me after they have been released by the Commonwealth of Pennsylvania."

In some unexplained manner the fee of $500 to Goglia, above referred to, seems to have been split so that $150 was to go to one Cahill and the balance of $350 to Goglia. Just what positions Goglia and Cahill occupied or who they represented does not definitely appear. There is, however, no suggestion that they, in any manner, represented the plaintiff. The letter of February 28th, 1933, before referred to, was returned by the defendant to the plaintiff to be authenticated before a notary. This the plaintiff did and turned it over to Lyon who it appears placed it in the possession of his attorney, Frye, who delivered it to the defendant.

Later, and in the month of April, 1933, when it appeared that the criminal charges against Lyon and others would be dismissed and the bail bonds furnished by the defendant would be released, Frye was advised by the latter that there must be obtained from the plaintiff the security agreement in his possession with the receipt attached thereto executed. Plaintiff signed the receipt and placed the agreement in the hands of Lyon who turned it over to Frye who presented it to the defendant and it being satisfied with the genuineness of plaintiff's signature upon the receipt returned the paper to Frye, directing him that the paper should be at hand for delivery to its representative at the Magistrate's Court at the time the charges were dismissed and the bonds discharged.

On April 18th, 1933, there was an appearance before the city magistrate in Philadelphia and there were in attendance Nelson Lyon, his brother, and one Stager, being the three defendants for whom the bail bonds were furnished, Henry A. Frye, Lyon's attorney, John J. Cahill, an attorney for the pastor of some church who probably was the complaining

witness in the criminal proceedings, Michael C. Goglia, an attorney, a Mr. Barrett, representing the defendant company and Magistrate O'Hara.

The magistrate announced that Lyon and the other defendants were discharged.

Barrett, the representative of the defendant company, had four of its checks; one payable to Goglia for $150 and by him endorsed over to Cahill; one payable to Goglia for $350; one for $62, for the premium due for the issuing of the bonds; and one for the balance of the deposit amounting to $2,538 to the order of the plaintiff, and upon the discharge of the defendants he made delivery of these checks to the parties to whom they respectively belonged except the check to the order of the plaintiff for $2,538 which he delivered to Henry A. Frye.

As the parties were leaving the Magistrate's Court Nelson F. Lyon was served by a constable with a warrant under another criminal charge in which Father Thomas F. Ryan, of St. Columbus Church, of Philadelphia, was the complainant, and he was again taken into custody. The magistrate fixed his bail at $2,500 but finally it was agreed to settle the matter for $1,500. Frye asked George A. Butler, the attorney for Father Ryan, to take Lyon's check for this amount but he declined to do so. Frye says that it was then suggested that he endorse and deposit the check of the plaintiff for $2,538 to his own account and draw against it and deliver his own check to the attorney of Father Ryan for $1,500. Frye further says that Lyon said he would telephone to the plaintiff and seek his authority for so doing. That Lyon repaired to a telephone booth and later returning told Frye it was all right. Lyon knew the plaintiff was then ill and so told Frye. There appears to be no doubt but that Lyon did telephone the home of the plaintiff, who was ill and confined to his bed; that his daughter took the message which ...


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