Shornhorst v. Peoples Savings & Trust Co.

Opinion by Mr. Justice Schaffer, Some of the questions propounded on this appeal were not raised in the court below and others have no relevance to the one which is controlling, which is: Whether the power of attorney given by the holders of more than fifty per cent of the bonds secured by a mortgage directing the attorneys in fact to notify the trustee therein to foreclose it is revocable. The mortgage was given by the Capon Springs Company to Peoples Savings & Trust Company of Pittsburgh as trustee. The outstanding bonds amount to $192,500. Persons holding bonds amounting to $97,500, being more than fifty per cent of those outstanding, joined in a power of attorney declaring that the mortgagor had' defaulted in the payment of interest, and named two individuals as their attorneys in fact to represent them, and to act for them in the protection of their interests in the bonds and the collection of the money due thereon. Each of the signers of the letter of attorney recited therein that he joined his claim with the other claims which the attorneys in fact had of other bondholders. The paper directed the attorneys to call upon and instruct the trustee to foreclose the mortgage in accordance with its terms, which provide for foreclosure upon default in payment of interest on demand of the holders of fifty per cent of the bonds outstanding. The parties agreed that their bonds could be used in the payment of the purchase price at the foreclosure sale and that each would pay a proportionate share of assessments made by the attorneys in fact for expenses, counsel fees and court costs. As found by the court below, each of the bondholders signing the power of attorney knew that he alone had not the required number of bonds to call upon the trustee to foreclose, and it was their *522 intention and impliedly they so agreed that they would act jointly. It appears that $30,000 worth of the bonds represented in the letter of attorney were owned by John S. Scully, Jr., one of the signers thereof, and it is claimed that since the execution of that document they have been sold by Scully to appellant Atkinson, but not delivered to him because they had been deposited with one of the attorneys in fact. Atkinson now claims the right to revoke the power. The court below decided that he cannot do so. Purchasing the bonds from Scully, with knowledge of the situation, Atkinson acquired them subject to the terms of the power of attorney under which they Avere deposited with the attorney in fact. He purchased the bonds without delivery having been made to him at the time. He thus acquired no greater right than his vendor had and since the bonds could not have been withdraAvn by the vendor, neither could they be withdraAvn by the purchaser from him. As was said by the learned president judge of the court below, the document in question is more than a mere power of attorney. It is a contract between the parties executing it and is an implied undertaking of each with the other for a consideration. “Where a letter of attorney forms a part of a contract, and is a security for money, or for the performance of any act which is deemed valuable, it is generally made irrevocable in terms, or, if not so, is deemed irrevocable in law. Although a letter of attorney depends, from its nature, on the will of the person making it, and may, in general, be recalled at his will; yet, if he binds himself for a consideration, in terms, or by the nature of his contract, not to change his Avill, the laAV Avill not permit him to change it”: Wood v. Kerkeslager, 225 Pa. 296, 303; 1 Mechem on Agency, 2d ed., section 581. See also Boyer v. Nesbitt, 227 Pa. 398. The decree of the court beloAV is affirmed at appellant’s cost.