text:
    Gruber versus The First National Bank of Clarion.
    1. Under the provisions of the 30th section of the Act of Congress of June 3d 1864, the state courts have jurisdiction of an action of debt to recover from a national bank, double the amount of usurious interest received by said bank, in violation of said section. Bletz v. The Columbia National Bank, ante, p. 87, followed,
    2. It is not a misjoinder of counts to set out in a declaration in debt counts for the recovery of a penalty for taking usurious interest, under an act of Congress, and counts to recover an excess of interest paid; such claims are not incongruous, and a recovery may be had for both of said demands in the same action.
    3. The misjoinder of counts in a declaration, ought properly to be taken advantage of by demurrer in arrest of judgment, or by an assignment of error in the judgment on account of such misjoinder.
    4. In debt for a statute penalty given wholly to the party aggrieved the judgment is quod recuperet.

    October 26th 1878.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson and Trunkey, JJ. Woodward J., absent.

      Error to the Court of Common Pleas of Clarion county: Of October and November Term 1878, No. 286.
    Debt by John Gruber against the First National Bank of Clarion.
    This action was brought by the plaintiff on the 4th of March 1876, to recover from the defendant double the amount of certain payments of usurious interest made to the bank within two years previous to the inception of the action, and also the excess above legal interest on certain other payments of usurious interest made more than two years previous to the commencement of the action, and within six years of same. The declaration filed in the case contained thirteen counts, the first ten being special ones for double the amount of payments of usurious interest made within two years of the commencement of the action; the other three were common counts for money received, money paid, and for an account stated, and were intended to cover excess of legal interest paid more than two and less than six years prior to the bringing of suit.
    Defendant pleaded the general issue, followed by a second and third plea to the jurisdiction. The plaintiff joined issue on the first plea, and on the other two demurred to the jurisdiction. The court, Jenks, P. J., sustained the demurrer, and without further pleas the cause came on for trial, when, among the points submitted by plaintiff, his first was as follows, to which is appended the answer of the court:—
    1. That the plaintiff is entitled to recover from defendant double the amount of all interest or discount paid by plaintiff within two years previous to the inception of this action, when such interest and discount were in excess of six per cent., the legal rate of interest in the state.
    Ans. “ We decline to answer this point in the affirmative.”
    Among the points submitted by defendant were the following, with the answers of the court thereto :
    1. That the action to recover by the plaintiff from the defendant twice the amount of interest paid, under section 5198 of the Revised Statutes of the United States, is an action to recover a penalty.
    Ans. “The action, so far as it is used to recover double the amount of the interest, is an action to recover a penalty, and in so far as it is sought to be thus used, cannot be maintained.”
    2. That Congress has no power to confer on the state courts jurisdiction to recover such penalty, and as to such penalty this action will not lie.
    Ans. “ We answer this point in the affirmative.”
    8. That the claim of the plaintiff for the penalty under an Act of Congress, and for the recovery of excessive interest, are incongruous and there can be no recovery for both of said demands in this action.
    Ans. “ We answer this point in the affirmative.”
    The verdict was for plaintiff for $1049.97. Plaintiff and defendant each took a writ of error, that of the defendant being reported in the succeeding case of The First National Bank of Clarion v. Gruber, post, p. 468.
    The plaintiff assigned for error, inter alia, the foregoing answers to points.

      W. L. Qorbett, for plaintiff in error.
    The state courts have jurisdiction of an action to recover double the amount of usurious interest against a national bank, under the 30th section of the Act of Congress of June 3d 1864: Bletz v. The Columbia National Bank, ante, p. 87. The claim to recover the penalty under the Act of Congress, and the claim to recover the excess of interest are not incongruous, and a recovery can be had for both of these demands in the same action: 1 Chitty’s Pleading 200; Stephen on Pleading 104; Fairfield v. Burt, 11 Pick. 244; Worster v. The Proprietors of the Canal Bridge, 16 Id. 541; Prescott v. Tufts, 4 Mass. 146.

      Wilson ‡ Jeriks, for defendant in error.
    The jurisdiction of the court is denied on the ground that the statute is penal, and that Congress has no power to confer upon the state courts jurisdiction to enforce the collection of the penalty. The counts in the declaration are incongruous. The first ten counts are for the penalties under the Act of Congress; the last three are for money had and received, for money expended and laid out and an account stated. The first ten are also in debt, and the last three in assumpsit. This misjoinder may be taken advantage of on error: Seip v. Drach, 2 Harris 352. If the counts require different judgments they are incongruous: Malin v. Bull, 13 S. & R. 441. The judgment in qui tam actions and actions for forfeitures is quod conviotus: 1 Bacon’s Abridgment 42. The judgment in the money counts is quod recuperet. See also, Smith v. Meanor, 16 S. & R. 375; Denoon v. Binns, 2 Clark 397; Wilson v. Walton, 1 Phila. 517; Bogle v. Kreitzer, 10 Wright 466; Carlisle v. Baker, 1 Yeates 471; Penna. Railroad Co. v. Zug, 11 Wright 480; Noble v. Laley, 14 Wright 281.
    January 6th 1879.
   Mr. Justice Sharswood

delivered the opinion of the court,

The first three assignments of error must be sustained. The answers of the learned court below to the first point of the plaintiff and to the first and second points of the defendants are based upon the ground that the state courts have no jurisdiction of an action to recover double the amount of usurious interest against a national bank, under the 30th section of the Act of Congress of June 3d 1864, entitled “An Act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof.” The contrary has been recently held by this court in Bletz v. The Columbia National Bank, ante, p. 87.

The answer to the third point of the defendants we also think was erroneous — that the claim of the plaintiff to recover the penalty under the act of Congress, and the claim to recover the excess of interest are incongruous, and there can be no recovery for both these demands in the same action. What the plaintiff claimed was the penalties on payments made within two years of the commencement of the suit, and the excess paid before that time within the Statute of Limitations. We see nothing incongruous in these two claims. Besides the misjoinder of counts in a declaration ought properly to be taken advantage of by demurrer, in arrest of judgment, or on error. The assignment ought to have been of error in the judgment on account of such misjoinder. But there was no misjoinder. It is a mistake to suppose that the last count in the declaration — not three counts, but one count combining three money demands — is in assumpsit. It is in debt as are the other counts. No doubt if the first ten counts had been in a qui tarn action, the judgment would have been different from that on the other counts, and, therefore, there would have been a misjoinder. Bacon Abr. Action qui tam, E. But in debt for a statute penalty given wholly to the party aggrieved the judgment is quod recuperet.

Judgment reversed and a venire facias de novo awarded


source: Caselaw Access Project

author: Mr. Justice Sharswood Chief Justice Agnew

license: Public Domain

text:
    First National Bank of Clarion versus Gruber.
    1. A bank is a private corporation and its charter a private act to be pleaded and proven as all other private acts, and unless so pleaded and proven the court will not take judicial notice of its provisions.
    2. It was contended that under the Act of Congress establishing national banks, those institutions have a right to charge and receive whatever amount of interest any banks of issue chartered by the state have a right to receive, and that there being in existence state banks of issue authorized to charge and receive more than six per cent interest, the court was bound to take judicial notice of the fact. Held, that the court was not bound to take judicial notice of such institutions unless their charters were produced and proven.
    3. What constitutes a “ bank of issue” discussed, and a review of the decisions and legislation relating to banks made by Agnew, O. J.
    October 26th 1878.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson, and Trunkey, JJ. Woodward, J., absent.
    Error to the Court of Common Pleas of Clarion county: Of October and November Term 1878, No. 38.
    Debt by John Gruber against the First National Bank of Clarion.
    The material facts are set forth in the report of the preceding case of Gruber v. The First National Bank of Clarion, which was a writ of error taken by the plaintiff to the same judgment. The questions considered and disposed of on the present writ are stated in the opinions of this court.

      Wilson f Jenks, for plaintiff in error.
    The court erred in charging that the plaintiff was entitled to recover the excess over six per cent., because the Act of Congress permitted the defendant to collect the same rate of interest or discount that under the laws of Pennsylvania others might charge. Other banks in Pennsylvania were permitted to charge over six per cent., to whatever extent the parties might agree. Vide act incorporating Franklin Bank of Philadelphia, Parnph. L. 1870, p. 737, sect. 4. The court should take judicial notice of banking acts. In Sedgwick on Statutory and' Constitutional Law, p. 119, the following language is used: “ Courts are bound to take notice of statutes establishing banks and regulating rates of exchange.” Then if the courts are bound to take judicial notice of the rates of exchange, in the case of The First National Bank of Mt. Pleasant v. Duncan Bro’s, 25 Pitts. Leg. Jour. 169, it is ruled that national banks, under the Act of Congress, may lawfully take or receive as high a rate of interest or discount as the highest under the state laws; which is largely in excess of six per cent.

      W. L. Corbett, for defendant in error.
    The Franklin Bank, referred to by counsel for plaintiffs in error, is not a bank of issue, and it is only where banks of issue, created under state charters, are allowed by the state to take a greater rate of interest than that allowed by the general law, that the right of national banks in that respect is enlarged or extended beyond the limit fixed by the general law. It is submitted that no bank of “ issue” was, at the time of the passage of the Act of Congress of 1864, or has been since, authorized to take interest in excess of six per cent.
    January 6th 1879.
   Mr. Justice Sharswood

delivered the opinion of the court,

As the judgment in this case has been just reversed on the writ of error, sued out by the plaintiff below, and a venire facías de novo awarded, it will be unnecessary to consider in detail the fifteen errors assigned on this record. It is quite sufficient to say that under the decision of this court in Lucas v. Government National Bank, 28 P. F. Smith 228, we find no error in the answers of the learned court below of which this plaintiff has any cause to complain. The objections to evidence which were overruled, were on the grounds of variance to counts in the declaration, upon which, in the end, the court did not enter judgment. There is technically an error in the judgment, according to the view of the learned court below. The counsel on both sides assumed that the last count in the declaration was three counts from its including in one demand debt for money had and received, money paid, laid out and expended, and money found due on an account stated. The entry of judgment on the last three counts was in fact an entry of judgment on the ninth, tenth and last count; the ninth and tenth being for the penalty. The judgment is wrong and must be reversed, although if the cause had not to go back for another trial, this error might be corrected in this court.

What the learned counsel for the plaintiff in error principally insisted upon in his oral argument, as ground for a reversal without a venire de novo, was a point which does not appear to have been made below and which does not arise on this record. It is contended that under the Act of Congress establishing the national banks, those institutions have a right to charge and receive whatever amount of interest any banks of issue chartered by the state have a right to receive, and that several banks of issue were incorporated and in existence during the period that the alleged usury was paid in this case, who might lawfully make any contract with their debtors on the subject of interest. In the Circuit Court of the United States for the Western District of Penhsylvania, the point was so ruled by Justices Strong and McKennan, reversing a judgment in the District Court: First National Bank of Mt. Pleasant v. Duncan, 25 Pitts. Leg. Jour. 169. The ruling in that case was on the rejection by the District Court of an offer to show that there were state banks of issue authorized by special charters to charge and receive more than six per cent. We give no opinion upon this question. No offer was made in the court below to give such evidence. It is contended now that the court will take judicial notice of the fact. No doubt in New York and other states the court will take judicial notice of institutions organized under a general banking law. Although the general banking law of April 16th 1850, Pamph. L. 477, is undoubtedly a public act, and where the charter of any particular bank is produced and proved, the court will take judicial notice of its provisions ; yet without such proof it cannot take notice of the charter. A bank is a private corporation, its charter a private act, to be pleaded and proved as all other private acts. It has been held by the District Court of Philadelphia, in Handy v. The Philadelphia & Reading Railroad Co., 1 Phila. R. 31, that an act which declares that loans and contracts, previously made by any person with a particular corporation, shall not be deemed usurious by reason of the corporation agreeing to pay more than legal interest, is a private act.

Judgment reversed and venire facias de novo awarded.

Chief Justice Agnew

filed the following concurring opinion :

The 5197th section of the Revised Statutes of the United States providing for the rate of interest to be charged by the national banks is in these words, viz.: “ Any association may take, receive, reserve and charge on any loan or discount made, or upon any note, bill of exchange or other evidence of debt, interest at the rate allowed by the laws of the state, territory or district where the bank is located, and no more; except that where by the laws of any state, a different rate is limited for banks of issue organized under state laws, the rate so limited shall be allowed for associations organized or existing in any such state under this title. When no rate is fixed by the laws of the state or territory or district, the bank may take, receive, reserve or charge a rate not exceeding seven per centum., and such interest may be taken in advance, reckoning the days for which the note, bill or other evidence of debt has to run.” The rest of the section is not material. The intent of Congress not to interfere with the general rates of interest established by each state is manifest in the first clause of this section, and is strengthened by the next section (5198), forfeiting the entire interest in case a greater rate is charged. This was a duty the government owed to the states, in order to impair as little as possible the established policy of the state, in which its people are educated. If the state has no established policy and has fixed no general rate of interest, the third clause provides for a rate not exceeding seven per cent. But a contingency might arise, where a rate differing from the general rate, might be established by the state for its own banks of issue. This, therefore, was made the subject of the exception in the second clause. Banks of issue having the power to issue circulating notes would compete with the national associations, and their rate of interest was to be allowed to the latter, if it exceeded the general rate established by law. But what state banks are banks of issue is plainly a state question, to be decided by the laws and tribunals of the state, and to be followed by the federal judiciary.

If according to the state decision a particular state bank, or a class of banks, has not the power to issue circulating notes, the issue would be illegal and the charter of the bank might be forfeited. On the other hand if the state banks or the class have the power to issue circulating notes by state decision, the jurisdiction of the federal law over the rate of interest attaches, and national banks will be allowed the same rate. These principles, it seems to me, are piain, and determine when the decisions of the state courts must govern.

It is our province therefore to declare whether the banks of this state, termed savings and deposit banks, are banks of issue, or, in other words, have the power to issue circulating notes. That they are not, is, I think, very clear. They are, with a very few exceptions, of modern date, and have never in practice been recognised as having this power; besides all the charters I have examined, and I think I omitted none, since the passage of the general bank act of 1850, have an express provision against the power to issue bank or circulating notes.

If we examine the legislation of this state on the subject, it will be found, that only those known as “ banks,” or “ banking institutions,” in the language of the laws, are banks of issue, and they are governed by a complete system existing since 1814. This system began in the act vetoed by Governor Snyder, and repassed on the 21st of March 1814. This law was followed by the act of 25th March 1824, rechartering the banks then existing; many have failed, chartered by the act of 1814. Between the date of the act of 1824, and the passage of the general bank act of 16th April 1850, many special charters were passed, but in all, the banks were subjected to the provisions of the acts of 1814 and 1824, mostly in express words, and in some by subjecting them to all the laws relating to banks. The act of 1824 was almost a transcript of the act of 1814, with some amendments suggested by experience. When we reach the act of 1850, we find it to be almost a repetition of the acts of 1814 and 1824. Many of its sections are nearly exact transcripts. All the banks since chartered by special acts are expressly subjected to the provisions' of this act.

This history, as well as the terms of the act of 1850, proves conclusively that the first section of the act of 1850 is intended to apply to banks, such as are provided for in the acts of 1814, 1824 and 1850, viz., to banks of issue only. That section is in these words: “ That every banking corporation hereafter created by any special act of the General Assembly, and every bank hereafter rechartered, or the charter of which shall be hereafter extended or renewed by any such Act of Assembly, shall be subject to the provisions of this act.” The very language of the section, as well as the subsequent provisions to which it refers, makes it evident that it was intended to apply only to banks or banking institutions having the power to issue circulating notes as money. These provisions and many others in the fundamental articles are wholly inapplicable to savings and deposit banks.

I am therefore clearly of opinion that the general bank act of 1850 does not embrace savings and deposit banks. It is highly important that the state judiciary should preserve the manifest distinction made by the legislature between banks of issue and savings and deposit institutions, not merely as bearing on the question of the rate of interest of the national banks, but because of its important bearing on the policy and internal economy of the state in regulating her institutions. I venture to say no one familiar with the legislation of the state has ever thought the act of 1850 applied to these minor institutions, until pecuniary astuteness developed the idea.

But a more conclusive argument is found in the legislation itself relating to savings and deposit banks. I have examined many charters, and all have a provision forbidding the bank to issue its own bills in the manner of bank notes for circulation as money, and subjecting them to the penalties of the bank acts for so doing. And this is not all. A general act was passed November 6th 1856, Pamph. L. 1857, p. 797, extending the 30th section of the general bank act of 1850 to “ all incorporated banking, saving fund, trust and insurance companies,” with the proviso that nothing therein contained should “ authorize any savings bank, trust, or other company to create any bank note or certificate in the similitude of a bank note.”

But we have been referred to the charter of the Franklin Bank of Philadelphia, Act April 1st 1870, Pamph. L. 736. Whether there are others similar I do not know, having seen no other, but this is a special act, and anomalous certainly as to the provision for interest. It is evidently one of those special laws run through by influence, and without a consideration of consequences, and certainly out of harmony with all our legislation as to banks. It has but four stockholders named in the charter, and it allows the bank to lend money and discount paper “ at such rates of interest as may be agreed upon by the parties,” and again, “at such rates of interest as may be agreed upon by said bank and the borrowers.” This is the only special charter of this kind we have been referred to, and if it be held to be a means of overturning the settled policy of the state as to the rate of interest to be charged by individuals and by banks of isshe, it will be a wrong resulting from a shameful piece of legislation understood by neither the people nor the legislature itself. No court, state or federal, would allow it to be the means of introducing covertly such consequences. When properly understood, I. do not think it will lead to them.

But before discussing this point, it is proper to refer to the case of the First National Bank of Mount Pleasant v. Duncan, before Justice Strong, of the Supreme Court of the United States, and Judge McKennan, Circuit Judge, found in the Pittsburgh Legal Journal, June 12th 1878, p. 169. That case was decided, not upon an actual state of fact, but upon offers of evidence refused by the District Court. The offer was to prove that many banks of issue had been organized under the laws of the state, with power to charge such amount of interest as should be agreed upon between the bank and the borrower or customer. Of course the offer was to be taken as true, so that the decision rested not on an actual state of fact, but on one supposed pro hcec vice. In the ease before us, we have no such assumed state of fact, but the simple question whether the charter of a single bank, or even of a few others, if any there be, with power to agree upon a rate of interest with the borrower, is such an alteration of the general bank law regulating banks of issue, and of the general law of the state regulating interest, as will bring the case within the national bank act and allow all national banks to agree with their customers upon, and charge a rate of interest beyond the general rate of the state allowed to individuals and to banks of issue. While I admit this to be a question for the federal judiciary, I think it will be long before its highest court will decide that so partial and anomalous a law, as the Franklin charter, will be sufficient to set aside the entire current of state legislation, and overturn its most cherished policy as to banks of issue, evidenced by all its legislation since the year 1818. I think there are good reasons for this conclusion.

In the first clause of section 5197, Congress has expressed its great and ruling intent not to interfere with stai¿e policy and legislation as to its adopted rate of interest. The second clause is but an exception, and is declared in the most definite language, and therefore is not to be carried beyond its expressly declared words, so as to conflict with the main general intent. The language is “ except that where by the laws of any state, a different rate is limited for banks of issue organized under state laws, the rate so limited shall be allowed for associations organized or existing in any such state under this title.” I have italicized the leading words of the exception to bring out its full meaning. Thus, the language, “ where by the laws, a different rate is limited for banks of issue,” certainly is general and not particular. It does not mean that where a particular person, or a particular bank is given a privilege, this privilege shall govern, but where the laws allow banks of issue as a class a different rate. So the rate of interest is a limited rate. Clearly, this cannot be said of that which is unlimited, which is no rate at all, but is a specific sum agreed upon by two parties. The very fact that both the bank and the borrower must agree upon a sum, takes from the charge the character of a limited rate. So far from its being a limited rate, it is not fixed at all — it has no limits but in the will of the parties. Clearly, it is not a rate ” but a power conferred to agree upon a compensation to be determined by themselves. The state has conferred this power on certain citizens, but where has Congress conferred upon the national bank such a power to agree upon a rate with the customer ? On the contrary, the Act of Congress confers no such power to agree, but expressly enacts that its creature can take only such rate, or standard, as the state law fixes as the rate, or standard for her own banks of issue. To my mind it is perfectly clear that no such power to agree upon a rate, or particular compensation is conferred by Congress on the national banks. Where the state allows her own banks of issue as a class the privilege of taking a higher rate of interest than is allowed by the general law, that rate may be adopted by the national banks.

These are some of the remarks of the learned justice who gave the opinion in Duncan’s case, which must have been written from mere impressions without examination. For example, that, until recently in Pennsylvania, state banks were always organized under special laws applicable solely to each bank — that no rate of interest was limited for banks as a class, &c. The reverse is true. The Act of 1814 divided the state into twenty-seven districts, and provided for the number of banks in each district, giving to each its name, and incorporating all upon one system, subject to the same general terms and provisions and fundamental articles, and provided for all the same rate of interest, viz., one-half of one per cent, for every thirty days (vide 12th fundamental article). It was at that time, probably, the most complete and perfect system for bank charters in the United States. These charters embraced all the then known banking institutions in the state, excepting one or two in Philadelphia which had been chartered before the year 1800, and limited them to the first of April 1825. This limit brought into existence the Act of 1824, which was a general law repeating substantially the provisions of the Act of 1814, and its purpose was to recharter the banks incorporated in 1814 which then remained, many having failed in the interval of great depression which followed the close of the war.

The enumeration of banks in the first section will be found to contain many of the yet leading banks of this state. I have examined all the acts of incorporation from 1824 to 1850, and find all are incorporated by reference to the Acts of 1814 and 1824, either in express terms or in general terms, which constitute those acts the fundamental provisions of their charters. The same rule has prevailed as to special acts since 1850. There are many special acts, but it is entirely inaccurate to say they were applicable solely to each bank. On the contrary, all inhere in the same system, and are subject to the same rate of interest, made a fundamental article in the system.

It will be seen, therefore, that from this inaccuracy of recollection much of the learned justice’s argument is without force. In another particular it seems to me the opinion is not convincing, when it is asserted that to allow a state bank to take a greater rate of interest is injurious to the national bank system. While uniformity in this respect is desirable, it seems to me the fact that national banks charge a less rate, is not injurious to them, certainly the tendency of the lesser rate is to draw the customers of banks to them, and not to send them away. If there be anything in competition it is to draw custom to the lower charges. True a higher rate will make more money when such rate is paid, but the question is upon the effect of the rate on the national bank system; and certainly if all the -national banks in a state are limited to six per cent., the effect will be either to draw custom from the state banks charging a higher rate of interest, or to compel them to lower their rates to a common standard. On the other hand if it be argued that the national banks should be allowed to make as much as the state banks of issue it may be conceded, and that this is the precise intent of the Act of Congress. But Congress did not intend to place them on a vantage ground over the state banks. To say that all the national banks in a state can adopt an exceptional rate allowed to a single bank in a state, or even two or three, is to place them above the state banks as a class, and contrary to the main intent of 5197th section. Clearly Congress did not intend to injure the state banks as a class. -It is hard enough to be almost taxed out of existence purposely, as conceded by Justice Strong, in Tiffany v. National Bank, 18 Wall. 413. Taxing out of existence was the very argument used by Chief Justice Marshall against the state power of taxation of federal institutions, in McCullough v. State of Maryland, 4 Wheaton 316. Neither is a fair exercise of the power. It is not a question of comparative merits between the state and national banks, or of usury or non-usury laws. These are not judicial questions. State judges are bound by her laws, and United States judges should have no desire to interpret federal laws unjustly. The true question is, what did Congress intend in the 5197th section and its predecessor, the act of 1864 ? Fair dealing requires that no advantage should be given to either state or national banks as a class. This section adopted the state rate of interest as the law, and made the exception depend on the rate of interest allowed by the state to her own banks of issue.

So, also, we should maintain our own consistency. The rate of interest for banks of issue was fixed by the Act of 1850. The public, the bar and the courts have not suspected any other rate to prevail, or other banks to be banks of issue to exist. We decide upon the true character of our own state institutions, whose powers cannot be extended by the decisions of other courts.

I think the judgment should be afiirmed on this question. It was the principal question discussed in the argument, and was considered in consultation. But the opinion of the court being now on' other grounds, in which I concur, this opinion will be filed as a concurring opinion.


author: Per Curiam.

text:
    Ulam et al. versus Boyd.
    1. “Where A., B. and C., a committee appointed “by a meeting of citizens, make a contract with D., signing the contract as a committee, and affixing their seals thereto, they make themselves personally liable under the contract.
    2. The only effect of the word “ committee” is like that of “ executor” in a personal obligation, to identify the transaction, not to qualify the act.
    October 29th 1878.
    Before Agnew, C. J., Mercur, Gordon, Paxson and Trunkey, JJ. Sharswood and Woodward, JJ., absent.
    Error to the Court of Common Pleas of Armstrong county: Of October and November Term 1878, No. 64.
    Covenant by S. S. Boyd against J. C. Ulam, J. A. Armstrong and A. M. Gosser upon the following agreement:
    “Article of agreement made and entered into by and between J. C. Ulam, J. A. Armstrong and A. M. Gosser (committee) and S. S. Boyd, all of Leechburg, Pa.,
    Witnesseth that the said party of the first part, for and in consideration of said second party repairing and strenghtening the Leechburg bridge, according to his agreement with the Bridge Co., they will pay or cause to be paid to him the sum of $8200 in manner following, to wit, $1000 on the signing of this article, $500 when the work is half completed, $500 when the work is completed, the remaining $1200 thirty days after the work is completed and taken off his hands.
    January 27th 1872. Witness our hands and seals,
    SEAL. 'seal/ 'seal/ SEAL.]’
    In the winter of 1871, certain parties proposed to erect a rolling-mill in Leechburg, provided its citizens would subscribe enough money to purchase the ground for the mill, as well as to strengthen a bridge from the railroad to the town, so that the bridge would sustain cars passing to and from the railroad to the mill. The plaintiff, the defendants, and others subscribed for this object, and at a meeting of citizens, the defendants were appointed a committee to carry out the project. Acting as such committee, they made the foregoing contract with Boyd.
    It was alleged by the defendants that the company who owned the bridge was to be the final judge of the work, and that by reason of the failure of plaintiff to complete the bridge according to his plans and specifications it had never been taken off his hands. Plaintiff denied these allegations, and brought this action of covenant to recover $1190, the unpaid balance, with.interest.

      The defendants pleaded non est factum, covenants performed, absque hoc, and a special plea which set forth, “that the covenant or personal obligation of the said defendants declared upon of the date of 27th of January 1872, is not the covenant of either of them, but that the said defendants, in making the aforesaid contract, were acting simply as a committee to disburse a certain sum subscribed on a certain paper, dated the 11th of November 1871, a true copy of which is hereto annexed and made a part of this plea, and the said contract was not designed or intended, either by the said defendants or said plaintiff, to bind these defendants, or either of them, personally or individually — all of which was well known and agreed to by said plaintiff, he the said plaintiff being then and there a subscriber upon the said paper, and having taken an active part in getting up said subscription."
    The defendants submitted, inter alia, the following point, to which is appended the answer of the court:—
    1. That it is for the jury to determine, under all the evidence in the cause, the nature and character of the contract between the plaintiff and the defendants; and whether it is their personal covenant according to the agreement and understanding of the parties at the time of the execution thereof, or whether the defendants merely executed the paper, with the knowledge and consent of the plaintiff, in order to carry out the arrangements between the citizens and the bridge company. And if the jury find from the evidence that the contract was executed for the latter purpose, and not as an individual covenant, and that the plaintiff so assented and agreed, the plaintiff cannot recover in this action, and the verdict of the jury should be for the defendants.
    Answered negatively, as explained in the general charge, wherein the court, McDermitt, P. J., inter alia, said:
    “ The plaintiff alleges, the testimony shows, that the defendants, under their individual names and seals, signed a written contract. Although it recites, and although all the evidence may show, that they signed it as a committee, acting for others as well as themselves, still they signed and sealed it in their own individual names. This makes them personally responsible.”
    Verdict for plaintiff for $1206, and after judgment defendants took this writ, among other errors assigning the refusal of the foregoing point and the portion of the charge noted.

      (rolden f Patton, for plaintiffs in error.
    The evidence in the case, including the contract itself, was perfectly conclusive that the defendants wrere merely performing a duty, common to all the citizens of Leechburg, but imposed upon them by a public meeting, as a mere matter of convenience, and that, too, without compensation or reward, and they asked the court to permit the jury to determine from the whole evidence the nature and extent of their liability. This the court refused, but charged as a matter of law that the defendants were responsible upon a personal covenant to pay, and thus in effect withdrew all the evidence of the circumstances,- under which the contract had been made, from the consideration of the jury. This we say was a manifest error. The addition of the seals to defendants’ names did not, as matter of law, make them individual covenantors and deprive them of the privilege of showing that such was not the intention or the real contract of the parties: Coles v. Coles, 1 Am. Lead. Cas. 505, 507; Sharpe v. Bellis, 11 P. F. Smith 69; Lippincott v. Whitman, 2 Norris 244.
    J., Q-ilpin, for defendant in error.
    The mere fact that defendants were acting as a committee of a mass-meeting would not relieve them from liability, even if their contract had been, by parol: Eichbaum v. Irons, 6 W. & S. 68. But they did more than promise by parol; they, by a written contract, under their hands and seals, covenanted and agreed to pay, which this court has decided in Quigley v. DeHaas, 1 Norris 267, creates a personal liability.
    November 4th 1878,
   The judgment of the Supreme Court was entered

Per Curiam.

The defendants below clearly made themselves responsible personally under their contract with the plaintiff. Their describing themselves a committee” did not change the very express language of the agreement which in every part of it is personal to themselves, and not applicable to any principal, and which they confirmed by their own seals. If we were sent out in search of a principal, to whom could we go ? The subscription-list created no joint responsibility, and the plaintiffs could not be remitted to thirty or forty suits for small sums. The only effect of the word “ committee” was like that of “ executor” in a personal obligation, to identify the transaction, not to qualify the act. The defendants expressly promised payment for themselves, and witnessed the promise by hand and seal. Judgment affirmed.


text:
    Lauffer et al. versus Cavett.
    Where a deed of land is made to A., B. and 0., “ doing business as A., B. & Co., their heirs and assigns,” the grantees take the legal estate in joint tenancy, and a judgment confessed by all of them in their individual names, with the same words “ doing business, &c.,” added thereto, is a lien upon the land and will bind it in the hands of subsequent purchasers from the firm.
    October 29th 1878.
    Before Agnew, C. J., Mercur, Gordon, Paxson and Trunkey, JJ. Sharswood and Woodward, JJ., absent.

      Error to the Court of Common Pleas of Westmoreland county: Of October and November Term 1878, No. 301.
    Scire facias by Robert M. Cavett against Lauffer, Hurst & Co., with notice to David R. Jones and others, terre-tenants, to revive a judgment.
    At the trial it appeared that in 1870 S. D. Lauffer, J. J. Hurst, J. S. Cunningham and H. O. Tinstman were in partnership in a foundry business. In that year they purchased from John Irwin a certain lot of ground, the deed for which was made to S. D. Lauffer, J. J. Hurst and J. S. Cunningham, “ doing business under the style of Lauffer, Hurst & Co.,” their heirs and assigns. On April 17th 1872, they confessed a judgment to Cavett for $5000, the note being signed by each partner, and under the signatures was written “ doing business under the style of Lauffer, Hurst & Co.” The deed was not recorded until 1874. Subsequently the land was divided up into lots and sold to tenants, who made the defence in the present case. The question as to whether the plaintiff had the right to revive the judgment against the terre-tenants was reserved by the court, and a verdict given for the plaintiff against Lauffer, Hurst & Co., who made no defence. After argument the court subsequently gave judgment as against the terretenants, in an opinion, saying:—
    “The giving of the original judgment to Cavett was the joint act of all the members of the firm at the time, whilst no one of the members of the firm, or any number less than all, had the right to encumber the partnership realty. Manifestly all had, otherwise partnership realty would be beyond the control of the firm itself. Partnership equities must be worked out through the partners. Here the partners by the just act of all the members dedicated this realty to the security of a firm loan; this they had a right to do. Again, the defendants stand on no higher plane than does the plaintiff. He holds a judgment which is the joint act of all. The deeds which they hold are no more or less the joint acts of all. The firm gave the judgment, and it did not lie with the firm to convey away this land so as to discharge the lien of the judgment. Motion for judgment on the reserved question for the defendants non obstante veredicto denied and leave given to enter judgment on the verdict.”
    This entry of judgment on the verdict was the error assigned by defendants, who took this writ.

      H. I). Foster, for plaintiffs in error.
    The deed to the firm made the land personal firm assets, and no question of conversion can therefore arise in order to create that which has already been created. The judgment, therefore, was not a lien upon the land, and as to the terre-tenants, could not be revived: Ridgway’s Appeal, 3 Harris 177; Lcfever’s Appeal, 19 P. F. Smith 122 ; Lancaster Bank v. Myley, 1 Harris 544; Ebbert’s Appeal, 20 P. F. Smith 79.

      II. O. £ J. A. Marehand, for defendants in error.
    The deed did not convert the realty into personalty. The words “ doing business,” &c., were merely descriptive of the grantees. It is clearly distinguishable from the deed in Lancaster Bank v. Myley, supra, which recited that the conveyance was to the firm as such, and that the firm paid the consideration. The partners, in giving the judgment to Cavett, and in conveying in lots, treated the land as realty.
    November 4th 1878,
   The judgment of the Supreme Court was entered

Per Curiam.

Though the description of the parties to the deed in this case identifies the property as belonging to the partnership, yet the conveyance is to the persons named and their heirs and assigns, creating a legal title in joint-tenancy, while the judgment is against the same persons as individuals described in like manner as partners. The single bill being the act of each under hand and seal, the judgment necessarily became a charge upon the legal title thus existing with a right to sell it upon exemption. The case is not one of distribution between creditors, some partnership and some individual, and therefore claiming in diverse rights, but is between the plaintiff and terre-tenants. Clearly, the terre-tenants can set up no question of power over partnership assets, but taking the land as they do, by ordinary conveyances from the partners, as individuals joining in a deed, they take subject also to the liens against the property.

Judgment affirmed.


author: Mr. Justice Mercur.

text:
    Shannon versus Shultz.
    1. To charge the separate property of a married woman with a mechanic’s lien, it is necessary that all the requirements of the Act of 1848, should be complied with and the claim should aver not only the contract of the wife, but that the work was done, or materials furnished, for the improvement or repair of her real estate, and substantially, that the application was so made.
    2. As against one sui juris it may be conceded that an averment of ownership of a building would prima facie extend a mechanic’s claim to the ground on which it was erected and the curtilage, but no such presumption can be applied to create a lien on the real estate of a married woman.
    October 29th 1878.
    Before Agnew, C. J., Mercur, Gordon, Paxson and Trunket, JJ. Sharswood and Woodward, JJ., absent.
    Error to the Court of Common Pleas of Somerset county: Of October and November Term 1878, No. 257.
    Scire facias sur mechanics’ lien by Daniel Shultz against Eleanor F. Shannon, owner, and Michael Shannon, contractor.

      Eleanor F. Shannon was the wife of Michael Shannon, and owned a lot of ground upon which her husband erected a house upon which Shultz did certain work, and furnished certain materials, and for which he filed the following lien:—
    Daniel Shultz v. No. 11. January T., 1876. Eleanor Shannon, owner, 1 and M. L. D., D. S. B. $258. Michael Shannon, contractor.^
    And now, to wit, 29th December 1875, the plaintiff, Daniel Shultz, filed his claim by his attorney, for the payment of the sum of $258, against all that certain two-story house and back-building, 22 by 40 feet, with back-building, &c., &c. And the lot or piece of ground and curtilage appurtenant to said building.
    The sum aforesaid being a debt contracted for work done and material furnished by said claimant within six months last past, in and about the erection of the said building, of which the said Eleanor Shannon, wife of Michael Shannon, was and is the owner or reputed owner, and the architect, builder and contractor thereof, at whose instance and request the said work was done and the materials furnished. And the said Daniel Shultz claims to have a lien on the said building and lot or piece of ground and curtilage appurtenant to said building from the commencement thereof for the sum aforesaid, according to the Act of Assembly in such cases made and provided.
    And the said claimant hereto annexes a bill of particulars of the amount of his said debt, showing the nature, kind and amount of work done and materials furnished, and the time when the work was done and the materials furnished.
    To the scire facias on this lien Eleanor Shannon made defence on the grounds:
    First, that her husband had no authority to bind the lot by a mechanic’s lien. Second, that the lien was defective in the following particulars:
    1st. It does not allege that the work and materials were done and furnished for and about the improvement of the wife’s separate estate.
    2d. It does not allege that the work done and materials furnished were actually applied to the improvement of the wife’s separate estate.
    3d. It does not allege that the work done and materials furnished were necessary for the use and enjoyment of the wife’s separate property.
    4th. In the title Eleanor Shannon is named as owner and Michael Shannon as contractor, and in the body of the claim Eleanor Shannon is named as both owner and contractor. The lien is therefore void for uncertainty.
    At the trial before Hall, P. J., it appeared that the materials were not ordered by Mrs. Shannon, but by her husband, and that she knew ‘the house was being erected on her lot and made no objection. Shannon testified that he built the house on the lot because he wanted it there. The materials were charged to Michael Shannon on the books of Shultz.
    The defendant requested the court to charge that “ under all the evidence in the case the verdict must be for the defendant,” which the court refused, saying the questions of fact were for the jury, and further said:
    “ Under the Act of 1848 a wife is entitled to her own separate property. The husband cannot bind it for his debts, nor encumber it without her consent in writing duly acknowledged. But she herself, in person or by another authorized so to do, may make her property liable for debts for the improvement of it. And she may make her husband her agent to act for ber. If she authorized him to erect this dwelling-house for her on her lot, and in so doing he contracted this debt with her knowledge and consent for materials used in the erection of the building, and which were furnished on the credit of the building, we think the property would be subject to the mechanic’s lien. It makes no difference that Shultz charged the bill to Michael Shannon or took Shannon’s judgment note and entered it, provided he furnished the materials on the credit of the building and continued to hold the building as his security. The facts we leave to you.”
    Verdict for plaintiff, when defendant took this writ and assigned for error the refusal to charge as requested and the foregoing charge.

      Goffroth JRuppel, for plaintiff in error.
    The Act of 1848 hav-
    ing provided a way in which a married woman’s property may be encumbered, it cannot be done in any other manner: Hines v. Ellis, 12 Harris 255; Stoops v. Blackford, 3 Casey 213; Moore v. Cornell, 18 P. F. Smith 323; Barto’s Appeal, 5 Id. 386; Finley’s Appeal, 17 Id. 459. All the facts essential to the validity of a mechanic’s lien against a married woman must'appear on the face of the claim : Finley’s Appeal, supra; Dearie et ux. v. Martin, 28 P. F. Smith 55; Lloyd v. Hibbs, 31 Id. 308; Schrifer v. Saum, Id. 388. Where the lien is filed against 'the property of a married woman, it must allege that the materials were actually applied to the improvement of her separate estate: Schrifer v. Saum, supra; Heugh v. Jones et ux., 8 Casey 432.
    The claim does not allege that the work done and materials furnished were necessary for the use and enjoyment of the wife’s separate property.
    This is a defect that is not merely technical; for if the improvement was not necessary then the lien is void, and there can be no recovery ; and if it was necessary, it should be so stated on the face of the claim: Mahon v. Gormley, 12 Harris 82; Lippincott v. Hopkins, 7 P. F. Smith 328; Finley’s Appeal, 17 Id. 457; Dearie v. Martin, 28 Id. 57; Lloyd v. Hibbs, 31 Id. 306: Schrifer v. Saum, Id. 388; Parke v. Kleeber & Bro., 1 Wright 251.

      Baer Baer, for defendant in error.
    The lien filed charges that the debt was contracted for work done and materials furnished, &c., in and about the erection of the said building, of which Eleanor Shannon, wife of Michael Shannon, was and is owner, &c., and contractor. This discloses the fact that the “ work was done and materials furnished for and about the improvement of the wife’s separate estate,” quite as fully as if stated in these words.
    The same words used in the lien also clearly and substantially charge that the work done and materials furnished were actually applied to the improvement of the wife’s separate estate; and the lien, in like manner, substantially discloses, so far as is necessary, the fact that the work was done and materials furnished for the use and enjoyment of the wife’s separate property.
    The naked lot of the wife, by the erection of a dwelling upon it, must certainly be taken to have been improved as her separate property. A lot with a dwelling thereon surely must be taken to be more necessary for the use and enjoyment of her separate property than the naked lot.
    January 6th 1879.
   Mr. Justice Mercur.

delivered the opinion of the court,

This case involves the sufficiency of the claim filed to charge the separate property of the wife. Three principal objects were secured by the Act of 11th April 1848. 1. To protect the property of a married woman against her husband and his creditors. 2. To give her capacity to bind her estate by contract for necessaries. 3. To authorize her to dispose of her property by will. The act gives no express authority to a married woman to bind her separate estate by contract, for the improvement or repair of her real estate. This power is only constructively within the act: Heugh v. Jones, 8 Casey 432; Murray v. Keys, 11 Id. 384; Findley’s Appeal, 17 P. F. Smith 453.

To sustain a common-law action against a husband ■ and wife, with a view of charging the separate estate of the wife for necessaries furnished for the support and maintenance of her family, facts must be averred in the narr., and proved on the trial, sufficient to bring the case within the act. It is not sufficient that a cause of action against the wife be proved, it must also be set forth in the declaration: Mahon v. Gormley, 12 Harris 80; Murray et al. v. Keys et al., supra; Parke et al. v. Kleeber et al., 1 Wright 251. When the object is to charge the real estate of the wife with a lien, it is quite as necessary that all the requirements of the statute be complied with: Lloyd v. Hibbs, 31 P. F. Smith 306. The claim should aver not only the contract of the wife, but that the work was done or materials furnished, for the improvement or repair of her real estate, and substantially, that the application was so made: Heugh v. Jones, supra; Schrifer v. Saum, 31 P. F. Smith 385.

The claim in this case does not allege that the wife was the owner of the land on which the building was erected, nor that the building was for the improvement of her real estate. It makes no averment in regard to the ownership of the ground on which, the building was placed. It does allege that she was the owner or reputed owner of the building; but the attempt is to charge not only the building, but also the ground of the wife, on which it stands, and the curtilage appurtenant thereto. A mere tenant for years has no such interest as will be bound by a mechanics’ lien. As against one sui juris it may be conceded that the averment of ownership in the building would prima facie, extend the claim to the ground and curtilage. No such presumption can be applied to create a lien on the real estate of the wife. When she is made liable it is not merely by reason of the erection of the building; but it is -mainly because she has thereby improved her real estate, the land on which it stands. The present claim, as set forth, is wholly consistent with the wife having no such estate in the land as could be bound by a mechanics’ lien. If she had an estate to be bound, the fact on which to predicate that conclusion, should have been stated. The claim lacks the essential requisites to charge the lien on the separate estate of the wife. As this view is fatal to the lien, it is not necessary to consider the other assignments. The learned judge should have affirmed the first point submitted by the defendant below, and the first assignment is sustained.

Judgment reversed.


text:
    Kline et al. versus Keiser.
    Where in an assignment of a specialty hy endorsement, the words “ with recourse” are added, the endorsers are liable.
    October 29th 1878.
    Before Agnew, C. J., Mercur, Gordon, Paxson and Trunkey, JJ. Sharswood and Woodward, JJ., absent.
    Error to the Court of Common Pleas of Somerset county: Of October and November Term 1878, No. 61£.

      Assumpsit by Hertz Keiser against Max Kline and Otto Frey, trading as M. Kline & Co., endorsers of Daniel Cams.
    On the 5th day of May 1875 Daniel' Cams executed and delivered three judgment notes under seal, each for $122.16, payable respectively at three, five and seven months, to M. Kline & Co.
    Before maturity of the said notes M. Kline, one of the firm, transferred the notes for value, to Hertz Keiser by endorsement in the following words :
    “ The within for the use of Hertz Keiser with recourse.
    M. Kline & Co.”
    At maturity Daniel Cams was insolvent. Keiser brought his suit against M. Kline & Co.
    The defendants requested the court to charge that this endorsement was at most but a simple assignment of the note, and that the words “ with recourse” do not qualify the assignment and have no legal meaning or operation. The court, Hall, P. J., refused to so charge, and the verdict being for plaintiffs, the defendants took this writ and assigned this refusal for error

      Baer Baer, for plaintiffs in error.
    The recovery here must, if it can be justified at all, be on the ground that the notes were guaranteed. But we allege there is nothing in the endorsement or extrinsic evidence in the ease to warrant any express or even implied guarantee. 'If the notes were bought on a guarantee, it was quite simple and possible to have written a guaranty on the notes, which would have shown the character of the transaction.
    Not only was this not done,' but there is not a particle of extrinsic evidence in the case to show that the notes were guaranteed. And in the absence of such extrinsic proof, the assignor’s liability can only be measured by the endorsement itself: Barto v. Schmeck, 4 Casey 447 ; Lang v. Fegenbush, 2 Phila. R. 20; Alter v. Langabartel, 5 Id. 151; Jackson v. Barnes, Id. 33.

      W. 3. Koontz and John K. TJhl, for defendant in error.—
    The legal import of the words “ with recourse” is to create a liability in the nature of a guaranty: Overton v. Tracy, 14 S. & R. 325; 1 Parsons on Contracts 495
    November 4th 1878,
   The judgment of the Supreme Court was entered

Per Curiam.

An assignment of a specialty “ with recourse” certainly meant something. Without these words it is clear the assignee could not come back upon .the assignor to make good the debt in the .event of the insolvency of the obligor. If it had been an endorsement of a note, on which recourse could be had at law, “without recourse,” certainly every one would understand the expression as intended to relieve the endorser from a legal liability. Why then should not “ with recourse” be interpreted to mean a liability by contract, when none existed in law ? The literal meaning of the word is to run back, so that in the assignment it must be held to mean to run back or have recourse upon the assignor in case of non-payment. We find no error in the record.

Judgment affirmed.


text:
    Daily’s Appeal.
    It was not error in the Orphans’ Court to set aside a sale made under a testamentary power, although for a full price, where it appeared that there had not been a due execution of the power of sale by both executors.
    October 30th 1878.
    Before Agnew, C. J., Mercur, Gordon, Paxson and Trtjnkey,. JJ. Sharswood and Woodward, JJ., absent.
    Appeal from the decree of the Orphans’ Court of Westmoreland county: Of October and November Term 1877, No. 129.
    Appeal of Jeremiah Daily from the decree of the court setting aside a sale made to him by the executors of Peter Soxman, deceased.
    At the time of his death Peter Soxman was seised, inter alia, of a farm of seventy-eight acres, underlaid with coal, in Derry township, Westmoreland county. By his last will and testament he provided, inter alia, in these words: “I will and direct that the executors of this, my last will and testament, have power to sell any of my property, at such time or times, in such quantities, and in such manner as to them may seem best, and of greatest benefit to my heirs; provided, however, if any.property is sold on credit, the amount thereof shall be secured in such manner as is usual in like cases, to insure its full and punctual payment.”
    Pursuant to this grant of power, on March 27th 1875, the executors of Soxman entered into an agreement, whereby the said farm of seventy-eight acres was sold and conveyed to Jeremiah Daily, the appellant, for the price of $200 per acre, to be paid, $1000 in cash on the execution of the agreement, and the balance upon the attainment of their majority by the minor children of the testator. Interest on the deferred payments was to be paid annually, and principal and interest were to be secured by the bond of the purchaser, and a mortgage on the property sold, as also on other property owned by him.
    This agreement was signed by only one of the executors, but it was alleged that it was assented to by the other. This agreement Daily put upon record. He paid the $1000 of hand-money, and went into possession of the property. The bond and mortgage required by the agreement were duly tendered to the executors, and interest was also tendered on the deferred payments, as and when it became due. No deed, however, was made by the executors to the purchaser. On the contrary they executed and delivered a deed on May 1st 1875 to Mathias Soxman, Jr., a son of decedent, for the same land sold to Daily, for the sum of $175 per acre.
    On the 12th of June 1875 Henry Omsler, guardian of the minor children of Peter Soxman, deceased, presented a petition to the Orphans’ Court, praying for a rule on Mathias Soxman, Sr., and Sebastian Rear, executors of Peter Soxman, deceased, and on Mathias Soxman, Jr., to show cause why this sale by the former to the latter should not be set aside.
    On October 2d 1875 a rule was granted on respondents to plead, answer or demur on ten days’ notice, and on November 13th 1875 a commissioner was appointed to take testimony, which was filed February 9th 1876. On March 24th 1876 a rule was granted on Daily to show cause why the sale to him should not be set aside, and on May 13th 1876 the following order was made by the court:—
    “And now, to wit, May 13th 1876, it is ordered that the sale made by the executors of Peter Soxman, deceased, of the premises described in the petition, be avoided and set aside and the deed therefor and the securities given by the purchaser for the purchase-money thereof be cancelled and annulled, and as to the sale of the aforesaid premises negotiated wnth J. Daily by Soxman, Sr., one of the executors of said decedent, at the price of $200 per acre, it is ordered that the same be confirmed and approved, and the executors of Peter Soxman, deceased, to wit, Mathias Soxman, Sr., and Sebastian Bear, execute and consummate such sale by due and proper conveyance upon receipt of the money and securities conr tracted to be given therefor, unless within twenty days from this date a bond with sufficient sureties approved by the court in the sum of $5000, conditioned that upon a re-sale of the premises on such terms and at such times as shall hereafter be ordered by the court, there would be realized the sum of $800 over and above the price agreed to be paid by J. Daily, be filed, in which event the said sale as aforesaid agreed to be made to the said Jeremiah Daily shall be set aside, and a sale ordered at public outcry, at such times and upon such terms as shall hereafter be directed. Order as to costs suspended.”
    On June 24th 1876 the following order was made:—
    “ The foregoing decree amended by adding after the words “ over and above the price agreed to be paid by Jeremiah Daily,” the words “ inclusive of accrued interest from the date and as provided in the article 29th March 1875, between M. Soxman, Sr. and Jeremiah Daily,” and the time for filing the bond is enlarged ten days from this date and to be approved before one of the judges on notice.”
    On March 21st 1877, the executors filed a petition reciting the decree of May 13th 1876, and praying for an order to sell the real estate of decedent, and on the same day the court ordered the executors to expose the property to public sale, the terms to be $1500, to be paid on confirmation of the sale, and the residue in three equal payments when the minor children of decedent respectively attained the age of twenty-one years, interest on said payments to be paid annually, and to be secured by bond and mortgage on the real estate sold, and also on other unencumbered property of the value of $10,000.
    On April 21st 1877, Daily appealed from the decree of the 13th of May 1876, setting aside the sale by the executors to him, and also from the decree of March 21st 1877,. directing a sale of the property.
    On June 11th 1877 the executors reported that they had, in pursuance of the order of court on the 21st day of May 1877, exposed the real estate therein mentioned to public sale, after having given due notice thereof, and having received no higher bid than $150 per acre for same, and Mathias Soxman, Jr., in accordance with the condition of his bond as directed by court, having offered for the same the sum of $20,381.48, and to give the security required in'the said order, they, the said executors, sold the said real estate to him, and prayed the court to confirm the sale and direct them, to execute and deliver to him a deed for the same upon his compliance with the terms of said sale.
    On the 11th June 1877; “ the foregoing return being presented, the court decree that the sale be confirmed, and that the executors within named be authorized and empowered to execute and deliver to Mathias Soxman, Jr., a deed -for the premises upon his compliance with the terms of sale, and Mathias Soxman, Jr., the purchaser, to the better securing the payment of the purchase-money, offers a mortgage on thirty acres of land belonging to him, in addition to the usual mortgage on the premises sold, and the same is hereby approved, unless exceptions be filed within six days.
    Exceptions were filed on June 30th 1877; and the court ordered that upon the return of sale being signed by the executors, the order of confirmation should be suspended until the determination of this appeal to the Supreme Court.

      Hampton Dahell, for appellant.
    Mathias Soxman, Sr., by writing, under seal, sold and conveyed the land in controversy to the appellant. So far as the record shows, it' is not disputed that this sale was assented to by the other executor. The testimony taken in the case shows this, and the first order of the court assumes it. This, then, was a good execution of the power in the will. A power to sell, unshackled by particular directions for its execution, may be executed by parol sale.
    A parol sale, under such power, by. two of three executors, subsequently ratified by the third, is valid: Silverthorne v. Mc-Kinster, 2 Jones 69.
    Daily was not made a party to any proceeding whereby his title could be divested. The proceeding in the court below was between the guardian and the executors. It does not appear at whose instance the rule on Daily was granted, and it was wholly irregular. The proceedings in the Orphans’ Court should be by petition and answer, not by rule to show cause: Seffy’s Appeal, 26 P. F. Smith 94.
    Whence then did the court derive jurisdiction ? Concede that the Orphans’ Court may review a sale made under a square power to the executors by name in a will, can it review such sale unless some cause is shown whereby the court acquires jurisdiction ? Must there not be alleged fraud, mala fides, inadequacy of price, or some other equitable ground for subordinating the discretion that the testator gave to his executors to the control of the court ? Can the Orphans’ Court, ex mero motu, and without cause, set aside an executed contract for the making of which its prior authority and approval was not necessary ?

      JEdgar Qowan, for appellees.
    Daily had no title, equitable or otherwise, and supposing he had a title, the court had the right to exercise the judgment they did in regard to the estate.
    The title of Daily stands simply upon his agreement with one of the executors, and the payment of the handsel. This is clearly distinguishable from the case of Silverthorne v. McKinster, 2 Jones 69.
    The court had jurisdiction of the subject-matter of the testamentary trust, had all the parties in interest, executors, guardian, and rival purchasers before it, and had heard their allegations, and under such circumstances they had clearly the power to set aside a sale and order a resale of real estate made under a testamentary power: Dundas’s Appeal, 14 P. F. Smith 331.
    November 4th 1878,
   The judgment of the Supreme Court was entered

Per Curiam.

If the contract of Jeremiah Daily had been made by both of the executors under the power in the will of Peter Soxman, deceased, or had it been executed by their deed, the Orphans’ Coui’t would scarcely have been justified in setting it aside. There is no doubt of the jurisdiction of the Orphans’ Court over testamentary powers, as held in Dundas’s Appeal, 14 P. F. Smith 325. But when the power is committed to the executors by name or description, they exercise it by virtue of the will of the testator, and not by a power acquired under the order of the Orphans’ Court. In such a case, therefore, there must be abuse or great improvidence in the exercise of the power to justify the interference of the court by setting aside the act of the executors. In this case, however, the sale was invalid because of a want of a due execution of the power of sale by both executors; and therefore, though for a full price, we cannot say the Orphans’ Court erred in setting aside the sale. Whether the other executor hereby assented to the sale is a disputed fact, and there is no evidence on the record to support.

Decree affirmed, with costs to be paid by the appellant, and the appeal is dismissed.


author: Mr. Justice Gordon

text:
    The Dollar Savings Bank, for use, &c., versus Burns.
    1. Where one purchases at sheriff’s sale a property subject to a mortgage, and subsequently pays off the mortgage, it is an extinguishment of the debt, and he cannot take an assignment of it and enforce it against the mortgagor.
    2. B. borrowed a certain sum from the bank and gave therefor his bond and mortgage, which was duly recorded and became the first lien on certain land of B. M. subsequently obtained a judgment against B. on which this land was sold to M. The bank obtained judgment on its mortgage and issued a levari facias. Before sale M. paid the amount due the bank and from it an assignment to himself of the bond and mortgage. Then on the levari facias in the sheriff's hands the property was sold and bid off by M. He then sent the bond to another county and there caused judgment to be entered upon it. On the petition of B. the court opened the judgment and let him into a defence, and afterwards on the trial holding that the payment by M. extinguished the mortgage, and that he took nothing by the assignment, directed a verdict for B. Held, that this action of the court was not erroneous.
    October 31st 1878.
    Before Agnew, C. J., Mercur, Gordon, Paxson and Trunkey, JJ. Sharswood and Woodward, JJ., absent.
    Error to the Court of Common Pleas of Indiana county: Of October and November Term 1878, No. 270.
    Debt upon a bond by the Dollar Savings Bank, for use of the executor of Samuel McClurkan, deceased, against James M. Burns.
    This was an action of debt on a bond, conditioned for the payment of $2000, made by defendant, James M. Burns, in favor of The Dollar Savings Bank, which was given for borrowed money. Burns did not deny that he executed the bond and got the money thereon, but he alleged that the bond was paid. He did not claim that he paid it himself, but said the bond was secured by a mortgage, which was the first lien on his property in East Birmingham; that McClurkan, a subsequent judgment-creditor, purchased this property at sheriff’s sale on his own judgment; that afterwards he purchased the bond and mortgage from The Dollar Savings Bank and had them assigned to him, and that this purchase and assignment paid and satisfied the debt.
    McOlurkan on the other hand claimed that the bond was not paid; that it is true he purchased the East Birmingham property at sheriff’s sale, encumbered by a mortgage in favor of The Dollar Savings Bank, which being the first lien was not discharged by the sale, but that he never agreed or assumed to pay the mortgage, nor did he in any way incur liability on account of it; that the property was liable for its payment, if sufficient, for that purpose, but if the property failed to bring an amount sufficient to pay the mortgage at sheriff’s sale, other property of Burns’s would be liable for such deficiency, and not himself; that the East Birmingham property was exhausted by a fair public judicial sale, and not having brought a sum sufficient to satisfy the mortgage, Burns was liable on his bond for the balance.
    The court, Blair, P. J., inter alia, charged
    “When McOlurkan purchased the land under an execution issued on his own judgment, he became substantially the owner of it. He knew at that time of the existence of the mortgage, which was the first lien, and the land would be in the first instance liable for its payment. It is true that the bank was not bound to sell the land first. It could sell any other property of Burns under an execution on a judgment entered on the bond, but if it did Burns would be entitled to subrogation to the right of the bank in the mortgage as against McOlurkan, who had purchased his equity of redemption to the end that the land mortgaged, which was primarily liable for the debt, might be made to bear the burden properly belonging to it. [If McOlurkan can shift this burden to other property of Burns, it is plain that he would be getting the land of Burns without payment of the price he assumed to pay. How is such a result produced ? By calling the payment of the money to the bank a conditional purchase of the securities. But calling it a purchase does not change the essential character of the transaction. It was a payment of the debt, and from thenceforth it ceased to exist. When the bank was about to sell on her mortgage, McOlurkan came in and did what as between him and Burns it was his duty to do, paid the debt. From that moment the debt was extinguished, and although he took an assignment of it and carried on the execution as if nothing had happened, the sale was nevertheless powerless to give him any better title than he already had. The sale was unnecessary to discharge an encumbrance already extinguished.] If McOlurkan could show some equity in himself that required us to treat the mortgage-debt as surviving its payment, a different question would be presented. As a general principle, when the legal and equitable estate unite in the same person, a merger is the necessary result. And when a vendee of land pays off a lien or encumbrance on the title of his vendor, that is undoubtedly the end of it, unless there is some special equity <in the vendor rendering it necessary that it should be kept alive. Zeigler v. Long, 2 Watts 205, and Moor v. Harrisburg Bank, 8 Watts 138, are instances in which the lien survives, notwithstanding payment by the owner of the land. These are exceptional instances dependent on some equity; the general rule being that when the owner of the land acquires the title of a mortgage, the latter is merged in the former. It is frequently said that such merger will not take place when it is the interest of the owner that the lien should survive. But this does not mean his interest in the sense of a mere speculation, or in the sense of some unfair advantage over the debtor. Equity keeps it alive as a shield against injustice to the owner, and for no other purpose. [It has not been suggested how any wrong can be done to McClurkan by treating his payment of the mortgage as an extinguishmént of the debt. When he gave the money to the bank the effect of this act was to pay the debt, and the assignment of the bond and mortgage to him must be treated as invalid.] It is urged that extinguishment of the debt ought not to follow payment by McClurkan, but that he should be permitted to hold the bond and mortgage and proceed to have the mortgaged property sold by the sheriff, and ascertain by such sale whether it would bring a sufficient price to pay the debt, and if it did not, he should then be permitted to treat the bond as subsisting security for the balance, and collect it from other property. [But he settled what he would give for the land in 1869, when he first purchased it at sheriff’s sale. That price was his bid, with the mortgage added. To allow him recourse now to other lands for the purpose of making up this deficiency would be at the best permitting him to recompense himself for a bad bargain at the expense of Burns. The effort on the part of plaintiff is to put himself, with regard to the bond and mortgage, in the same position as the bank. We do not think this can be done.] A mortgage is but a security for a debt. If the bank had sold under it, and the sale did not produce a sufficient sum to pay the debt, it could proceed on the judgment-bond for the difference. If the sale under the mortgage produced more than enough to pay the debt, the surplus would go to Burns if he had continued to own the equity of redemption at the time of the sale, and there were no other valid liens to absorb it. As he was not the owner, the surplus would go to McClurkan, who stood in his place. Now if McClurkan can call upon Burns for this deficiency, it would seem but fair that he should give him the surplus, to the end that all the advantages might not be on one side. Then again, if McClurkan can be allowed to test the value of the land by a sheriff’s sale, with the view of holding Burns for the difference between the mortgage-debt and the price at which it happens to be knocked down, when should this test be applied ? There was an interval of four years between the time when he purchased under process issued on his own judgment, and the time of his purchase under that of the bank. We think he could not allow the interest on the mortgage to run on and then at any indefinite time in the future throw the chances of the market on Burns. The price of land might fall greatly in the meantime, but this would not affect McOlurkan if he may cast the loss on Burns. [If the question could arise at all between these parties it would be, what was the value of the land when McOlurkan first bought it, for the debt secured by the mortgage was then due, and if the value of the property was to be tested by a sheriff’s sale with the view of charging the mortgagor with this difference, it was the duty of McOlurkan to apply the test then. The case is not distinguishable in principle from Cooley’s Appeal, 1 Grant 401. You will observe, from the charge, that we are of the opinion the law is against the plaintiff, and that he cannot recover. Other reasons might be urged against his position, but we have said enough to indicate the principal grounds of our opinion. Your verdict should be for the defendant. ”J
    The verdict was for the defendant accordingly, when plaintiff took this writ, assigning for error the foregoing portions of the charge in brackets.

      Bell $ Banks, for plaintiff in error.
    McOlurkan merely purchased the property charged with an encumbrance for which it was liable and could be exhausted to satisfy. His purchase of the bond and mortgage did not produce a merger. Why, then, should he be excluded from purchasing that bond and mortgage, and acquiring the right of the bank to them, just the same as any other person. There is no allegation of fraud in this case, or of irregularity in any of the proceedings, but it is claimed as a matter of law, independent of fraud or irregularity, that the legal effect of the purchase' of the bond and mortgage by McOlurkan, was to pay and satisfy the debt. This case differs from all others cited by defendants in this, that before the other property of Burns is sought to be held for this debt, the mortgaged property was exhausted, and credit given on the mortgage for the amount realized from the sale. It was exhausted by the only means it could be, an open, public, judicial sale. Burns cannot now complain if his property did not bring enough to satisfy the mortgage. There is neither extinguishment nor merger in this case, and there could have been no subrogation.

      Silas M. Olark, for defendant in error.
    The debt was extinguished by the sale.
    [Agnew, C. J. — Was this so to the extent of more than the value of the property ?]

      The land makes it a payment, just as in Cooley’s Appeal, 1' Grant 401.
    [Agnew, C. J. — That was not the case here.]
    If it was not, no sale could have been made.
    [Agnew, O. J. — Then there could be no merger of title.]
    That was already done, for when the sale took place McClurkan had the absolute title. I contend that the debt was paid by the sale. This arises by presumption of law: Fisher v. Clyde, 1 W. & S. 544. After the sale of the equity of redemption to Mc-Clurkan, the bank did not sell the property. The rights of the parties were fixed, and the assignment of the mortgage to Mc-Clurkan after the payment of the debt by him, and the sale of the property by him gave him no rights on the mortgage which was extinguished, because when he took the title it was his duty to pay it.
    November 11th 1878.
   Mr. Justice Gordon

delivered the opinion of the court,

From the history of this case we gather the following: James M. Burns, the defendant, borrowed from the Dollar Savings Bank, on or about the 10th of October 1864, the sum of $2000. To secure this amount he executed to the bank his bond and mortgage. This mortgage, being duly recorded, became the first lien on certain real estate of the mortgagor, situated in the borough of East Birmingham. Afterwards, Samuel McClurkan, the plaintiff, obtained a judgment against Burns, on which execution was issued, and, in due course, this same property was levied upon and sold to the plaintiff for the sum of $2700.

After McClurkan had, in this manner, acquired the defendant’s title to the property, the bank obtained judgment on its mortgage and issued a levari facias. Before sale, however, McClurkan paid the amount due the bank, and took from it an assignment to himself of the bond and mortgage. Then, on the 10th day of the same month, on the levari facias already in the sheriff’s hands, the property was offered for sale and bid off by McClurkan for $300. He then sent the bond to the county of Indiana, and there caused judgment to be entered on it to December Term 1876. On the petition of the defendant, the court opened this judgment and let him into a defence. When the case came on to trial, the court, holding that the payment by McClurkan extinguished the mortgage and that he took nothing by the assignment, directed a verdict for the defendant. Whether this action of the court was right or wrong is for us now to consider.

When McClurkan bid off the property at the sale, on his own judgment, he bid subject to the mortgage of the bank, and what he acquired by the sheriff’s deed was Burns's equity of redemption. The mortgage, by the Act of 1880, being a charge upon the land, 'the bid of the plaintiff, on the sale on the subsequent judgment, necessarily included this charge, and it became part of that bid. It is, therefore, obvious that as long as McClurkan chose to retain the premises he had acquired at the official sale, he could, by no process, direct or indirect, compel Burns to pay any part of the mortgage-debt, for that he had agreed to do himself. But more than this, had Burns been compelled to pay this debt, he would have been entitled to subrogation to the rights of the bank in the mortgage: Hansell v. Lutz, 8 Harris 284. And why this ? Answer, in order that he might be enabled to enforce the mortgage against the land, which was the primary fund for its payment, otherwise the purchaser would unjustly escape the payment of the full amount of his bid. When, therefore, McClurkan paid the bank, he only did what he had agreed to do by his bid; the payment was in relief of his own land, and hence the assignment was fruitless. Suppose, upon payment, the bank had refused to assign, could the plaintiff have gone into court and compelled a subrogation ? Certainly not, for that was a right which the mortgagor would have had, had he paid the bank, and that in order that he might enforce it against the purchaser at the sale, on the subsequent lien; how then can this purchaser claim the right to enforce a debt against the mortgagor which the mortgagor could have compelled him to pay ? If, however, he was not at law entitled to subrogation, then the assignment could give him no right as against the mortgagor, for it was, after all, but subrogation by the voluntary act of the bank. Whatever equity he had arose from the payment of the mortgage, and as that act gave him no equity as against Burns, the transfer by the mortgagee did not better his condition.

And in this there is no hardship put upon McClurkan; he was not obliged to pay the mortgage; he was not personally bound by it; he might have abandoned his position as owner ®f the equity, and might have allowed the bank to proceed upon its mortgage and sell the premises. He then could have bought in the property for any price at which the bank might choose to let it be knocked down, but in that case, to be sure, he would have had to bid against the bank, and it is not probable he would in that event have obtained the premises for the paltry sum of $300, the amount for which they were sold, to himself, after he had obtained the control of the writ.

He did not, however, see fit to adopt this course; he chose rather to stand in Burns’s right to retain the possession of the property and exercise his privilege as owner of the equity of redemption, and, having thus made his choice, he cannot now be permitted to abandon that choice, clothe himself with the powers of the mortgagee and pursue the mortgagor for money which he of right ought to pay and did pay to disencumber his own property.

The conclusion thus arrived at is supported by abundant authority. Mr. C. J. Black, delivering the opinion of the court in Carpenter v. Koons, 8 Harris 222, says: “ The Act of 1830 provides that if the oldest lien be a mortgage, and the land be sold on a judgment, the sheriff’s vendee shall take it subject to the mortgage. When the defendant made his purchase, therefore, he had, manifestly, no claim either on the mortgagor or anybody else, to pay off the whole mortgage and relieve him entirely from what was, probably, the most burdensome part of his contract. His share of the mortgage formed a part of the price he agreed to pay for the land. The statute of 1830 entered into and made one of the elements of his contract. There is,” continues the learned justice, “a wide and palpable difference between one who buys land subject to a mortgage and has a reduction in the price equal to the amount of the lien, and another who pays its full value and stipulates for a title clear of encumbrances. Such a distinction is anything in the world but a theoretical subtlety.” The like doctrine is held in Hansel v. Lutz, already cited. And in Cooley’s Appeal, in 1 Grant 401, where certain persons who had purchased an estate at sheriff’s sale, encumbered by prior mortgages, paid off those mortgages and took an assignment, it was held they were not entitled to be paid out of the assigned estate of the mortgagor. The court there said, citing Hansel v. Lutz, that the purchasers bought subject to the prior mortgages, and that when they paid them they did nothing more than their duty, and that the taking of an assignment to themselves was wholly fruitless.

So then, on authority, when McClurkan paid the mortgage he did no more than, under the Act of 1830, was his duty to do. His assignment was fruitless and gave him no right when executed, and the force of a sale afterwards certainly did not help the matter. If, by force of that assignment, he had no right as against the mortgagor, nothing that he could afterwards do would put into that paper what was not there when it was made.

The judgment is affirmed.