text:
    Cleaver and wife versus Scheetz and wife.
    1. Cleaver gave a mortgage to Scheetz, a married woman: her husband deserted her, and she boarded with Cleaver. On a scire facias on the mortgage Cleaver could not set off the boarding, Mrs. Scheetz not being a feme sol.6 tríidor
    2. The Acts of 22d February 1718 and May 4th 1855 (Feme Sole Traders) construed in connection with Married Women’s Act of April 11th 1848.
    3. Under the Act of 1855, the rights and privileges of a married woman deserted, are not correlative with her liabilities, but are more extensive.
    4. Under the Act of 1718 extended by Act of 1855, the liability of a married woman for her debts arises from her pursuing some business at which she works for a livelihood.
    5. The Act of 1848 is not repealed by the Act of 1855.
    February 9th 1872.
    Before Agnew, Sharswood and WILLIAMS, JJ. Thompson, C. J., at Nisi Prius.
    Error to the District Court of Philadelphia: No. 318, to January Term 1871.
    To December Term 1869 of the, District Court, a scire facias sur mortgage was issued at the suit of Jacob Scheetz and Christianna his wife in her right, against Elias Cleaver and Anna M. his wife.

      The mortgage was dated February 22d 1867, given by Elias Cleaver and Anna M. his wife, to Christianna Scheetz, to secure the payment of $1600 in one year with interest.
    The defendant put in the plea of set-off.
    It appeared'upon the trial that Jacob' Scheetz and his wife were living separate and apart from each other, the husband having deserted the wife. Under these circumstances Mrs. Scheetz went to board with the defendants, the mortgagors. It further appeared that Jacob Scheetz, the husband of Mrs. Scheetz, was residing in Philadelphia, and engaged in business" for himself as an apothecary, at the corner of Fifth and Race streets. The question of the trial was, whether the defendants could set off the bill for the board of Mrs. Scheetz against the claim upon the mortgage, which was the property’ of Mrs. Scheetz. There was nó evidence that Jacob Scheetz, the husband, had been applied to for payment of the debt, or that any judgment had been obtained, or execution issued against him.
    The defendants in support of their set-off relied upon the 2d section of the Act of 4th of May 1855, Pamph. L. 430,1 Bright. Purd. 692, pi. 55, which enacts, “ that whensoever any husband from drunkenness, profligacy or other cause, shall neglect or refuse to provide for his wife, or shall desert her, she shall have all the rights and privileges secured to a feme sole trader under the Act of the 22d of February 1718, entitled ‘ An act concerning feme sole traders,’ and be subject as therein provided, and her property, however acquired, shall be subject to her free and absolute disposal during life, or by will without any liability to be interfered with or obtained by such husband, and in case of her intestacy shall go to her next of kin, as if he were previously dead:” 1 Smith’s Laws 99, 1 Bright. Purd. 692, pi. 1.
    The court (Thayer, J.) instructed the jury that the evidence of the defendants did not make out a defence to the action, and that they should find a verdict for the plaintiff for the full amount of the mortgage, with interest from February 22d 1867.
    The verdict was for the plaintiff for $1837.50.
    The defendants took a writ of error, and assigned for error that “ the court erred in instructing the jury that the evidence of the defendants did not make out a defence to the action.”

      J. Otterson, for plaintiffs in error,
    referred to Acts of 1855 and 1718; Married Woman’s Act, April 11th 1848; Pamph. L. 536, 2 Bright. Purd. 1005, pl. 13, &c.; Black v. Tricker, 9 P. F. Smith 13; Burke v. Winkle, 2 S. & R. 189.

      M. H Todd and T. Cuyler, for defendant in error.
    In an action against husband and wife, to charge the wife’s separate estate, the plaintiff must set forth in his pleadings such facts as bring the case within some one of the exceptions contained in the Act of 11th April 1848 : Murray v. Keyes, 11 Casey 384; Parke v. Kleeber, 1 Wright 251.
    Set-off must be in the same right: Darroch v. Hay, 2 Yeates 208; Potter v. Bird, 4 Watts 15; Stuart v. The Commonwealth, 8 Id. 75.
    They referred to the Acts of 1718, 1848 and 1855, and commented on them, and also to Black v. Tricker, and Burke v. Winkle, supra.

   The opinion of the court was delivered, May 13th 1872, by

Agnew, J.

This was a scire facias in right of Christianna Scheetz, the owner of a mortgage given by the defendants, Elias and Anna Cleaver. One of the pleas was set-off, under which the defendants claimed to recover a boarding bill against Mrs. Scheetz. The short plea of set-off may be presumed to be in the same right as the action of scire facias; that is, against Christianna Scheetz for her own debt. This necessarily raises the question of the right of the defendants to maintain an action against Mrs. Scheetz, which it is claimed will lie against her under the Act of 22d of February 1718, 1 Smith’s Laws 99, and the Act of 4th of January 1855, Pamph. L. 430. It is not doubted that the evidence shows such a desertion of Mrs. Scheetz by Jacob, her husband, as brings her within the provisions of the Act of 1855, and this leads into an examination of these provisions, in order to determine the question of her liability to suit for her maintenance. The Act of 1855 is much wider in its range than the Act of 1718. It is entitled an act relating to certain duties and rights of husband and wife and parents and children. The first section regulates the power of a married woman to dispose of her property by will, as between her husband and herself. The second provides for the case of husbands deserting their wives, or neglecting or refusing to maintain them, and consists of two branches. The first branch declares that she shall have all the rights and privileges secured to a feme sole trader under the Act of 1718, and be subject as therein provided. The second branch declares that her property, real and personal, howsoever acquired, shall be subject to her own absolute disposal during life or by will, and in case of intestacy shall go to her next of kin, as if he were previously dead. The third section provides for the case of children and their mother’s rights and duties, in case of their father’s neglect or refusal to maintain them. The fourth section appoints a mode of declaring a wife a, feme sole trader. Further regulations are contained in the remaining sections. A consideration of the entire Act of 1855 makes it evident that the rights and privileges of a married woman deserted by her husband or left unprovided for by him a.re not exactly correlative to her liabilities, and that the former are more extensive than the latter. The liabilities expressly provided for in the Act of 1855, are those contained in the first branch of the second section, which secures to her the privileges of a feme sole trader under the Act of 1718, and makes her “ subject as therein provided.” This sends us to the Act of 1718 to ascertain the extent of her liability. The first section declares that “ when any mariners or others are gone, or shall hereafter go to sea, leaving their wives at shopkeeping, or to work for their livelihood at any other trade in this province, all such wives shall be deemed, adjudged and taken, and are hereby declared to be, as feme sole traders, and shall have ability, and are by this act enabled to sue, and be sited, plead and be impleaded at law in any court or courts of this province, during their husband’s natural lives, without naming their husbands in such suits, pleas or actions; and when judgments are given against such wives for any debts contracted, or sums of money due from them since their husbands left them, executions shall be awarded against the goods and chattels in the possession of such wives, or in the hands or possession of others in trust for them, and not against the goods and chattels of their husbands,” &c. From the terms of the Act of 1718, it is very evident that the liability of a married woman for her own debts as a feme sole trader, arises out of the fact that she follows some trade or business at which she works for a livelihood. Indeed it is only in the prosecution of such a calling that she is likely to contract debts, or be entitled to claims, requiring the aid of the law by suits for or against her. This is one of the points decided in Jacobs v. Featherstone, 6 W. & S. 346, where issue was taken on the fa.ct whether the defendant, Mrs. Featherstone, was a feme sole trader within the meaning of the Act of 1718. The court below nonsuited the plaintiff on the evidence, and this court, in affirming the judgment, said that there is no feme sole trading by married women except as regulated by the Act of 1718. “ It is her being left to contract debts for which her husband’s person cannot be reached by process, that gives her the credit and subjects her to the responsibility of a feme sole.” Stress was laid also on the fact that the husband was resident in the same city with her when the debt was contracted. If then, as the act clearly imports, there must be a business in which credit is given to the wife out of which the rights of creditors must spring, it is manifest the wife must elect to pursue a business before any liabilities can exist under the Act of 1718. The fact that the Act of 1855, extending the provisions of 1718 to wives deserted or neglected by their husbands, provides for a certificate to be issued by the Court of Common Pleas on her petition, to declare her a feme sole trader, strengthens the position that it is only to married women pursuing a business or trade, the liabilities of the Act of 1718 extend. This certificate is not essential to her power to contract as a feme sole, as held in Black v. Tricker, 9 P. F. Smith 13. Her rights result from the fact of her husband’s desertion or neglect to provide for her, and not the certificate. But, the object, as stated by the Act of 1855, being to enable creditors, purchasers and others, to transact business with her, with safety and certainty, it evidences the understanding of the legislature that she would be engaged in some business requiring this precaution to enable creditors to deal safely with her. What we have now said is therefore entirely consistent with the opinion in Black v. Tricker. There the question arose as to the wife’s right of property under the second branch of the Act of 1855. Here the question is upon her liability for the payment of debts under the first branch of that section extending to her case the provisions of the Act of 1718 as to feme sole traders. In Black v. Tricker we held that a wife’s acquisitions, after the desertion of her husband, will be protected under the Act of 1855 from her husband’s creditors. Here we now hold that a wife is not liable for debts as a feme sole trader under the Act of 1718, as extended by the Act of 1855 to cases of desertion, or neglect or refusal of her husband to provide for her, unless she has engaged in some trade, business or employment pursued by her for a livelihood, to constitute her a trader. The evidence here shows that the husband of Mrs. Scheetz resided in the same city with his wife, and was engaged in business ; and does not show that she was ever engaged in business or worked at any trade or employment for a livelihood in the course of which the debt in question was created. The bill proposed to be set off was one for boarding, for which, so far as it now appears, her husband Was liable. To hold under such circumstances that her separate estate shall be made liable for her maintenance, would make her condition since the Act of 1855 worse than it was before. It would also contravene the Married Woman’s Act of 1848, which protects her property from execution for debts, even for her maintenance, unless the property of her husband shall have been first exhausted. The Act of 1855 does not repeal the Act of 1848 in terms, and no repeal can be implied except for plain repugnancy. Such repugnancy nowhere exists, except in the first branch of' the second section, which subjects a married woman to the law relating to feme sole traders under the Act of 1718. The Act of 1848 being a general law regulating the condition of married women as to their property, thus standing unrepealed, strengthens the position that they cannot be made liable for debts unless when engaged in trade or business, according to the terms of the Act of 1718. We think the learned judge was right, therefore, in holding that the .set-off was not good under the evidence, and the judgment is affirmed.


source: Caselaw Access Project

author: Asnew, J.

license: Public Domain

text:
    Ogden’s Appeal.
    1. A testator directed the residue of his personal estate to be divided into eight parts, and gave three to trustees to hold for the sole use and benefit of his three daughters in equal parts during their lives respectively; to pay them the interest, and their receipts, whether sole or married, to be the discharge, no part of the investments to be the changed without the daughters’ consent; he made no disposition of the personal estate after their death ; he directed his real estate to be divided into eight parts, and gave throe to the trustees to hold for the sole use and benefit of the same daughters, with authority to lease for years or on ground-rent in fee, with the consent in writing of each particular daughter, her part not to be redeemed before her death, and pay the rent to such daughter, whether sole or married, her receipt to be a discharge; on the death of either daughter to such persons as she should direct by will and in default of a will to her lawful issue in equal shares, and in default of such issue to her brothers and sisters in equal shares, and the lawful issue of such as might then be deceased. “ To avoid all doubts,” he declared that the daughters should have power, whether “sole or married,” by will to dispose of all their “ estates, real and personal, hereby vested in the said trustees.” The will was dated in 1838 and proved in 1841, one of the daughters then being a minor and no marriage contemplated ; she married in 1845 ; a bill was filed in 1871 by daughter and husband against the trustee for an account and payment of personal estate and conveyance of the real estate. Held, that the daughters each took an estate in fee tail free from any trust and an absolute interest in the personal estate.
    2. Active trusts are sustained even as to cestuis que trust sui juris, where the donor intends them to answer some legal and useful but temporary purpose, not obnoxious to the law against perpetuities.
    3. A trust for coverture, there being no immediate marriage contemplated, cannot take effect.
    4. An aetive trust having no object for the benefit of the cestui que trust will not be continued for the mere benefit or pleasure of the trustee. The object of the donor having failed, the law will execute the use.
    5. A devise to the lawful issue of the first taker primfi, facie creates a fee tail; even where the devise to the first taker is for life.
    fi. Words of distribution or tenancy in common, without more, will not reduce the inheritance to a life estate.
    7. The devise over in this case to the brothers and sisters in default of issue did not restrict the estate to one for life, the failure of issue being indefinite.
    February 16th 1878.
    Before Agnew, Shakswood and Williams, JJ. Thompson, C. J., at Nisi Prius.
    Appeal from the decree of the Court of Common Pleas: In Equity: No. 129, to July Term 1871.
    This case arose on the will of Cadwalader Evans, who died in 1841. The will was dated March 3d 1838, and proved November 15th 1841; it is as follows:—
    * * * “ I give, &c., to my dear wife, to hold so long as she shall continue my widow, the ho'use in which I now reside, situate on the north side of Mulberry street, &c., in Philadelphia, together with the lot of ground upon which the same is erected, containing, &e., and also all my household and kitchen furniture. And I do also give and bequeath unto her, two thousand dollars a year, so long as she shall continue my widow, out of the rents and profits of my real estate, or personal, or both, as she may at .any time, within one year from the time of my decease, designate, elect and choose, the same to be in full of dower. And from and after the determination of my widow’s estate in the premises, I give, &c., the said house, &e., with the household and kitchen furniture, above mentioned, to my daughters Julianna, Margaret and Harriet; or to such of them as may be and remain unmarried, to hold to them respectively so long as they, or any of them may remain unmarried. And after the determination of my said daughters’ interest in the premises, the said house and lot of ■ground and the household and kitchen furniture shall be sold and the net proceeds thereof shall be equally divided amongst such of my children as may be then living, and the lawful issue of such as may be then deceased; the issue to take amongst them such share as their parent would have taken were he or she living. And I do hereby authorize my executors, or the survivor of them, to sell and convey in fee simple, the said house and lot of ground as soon after the determination of my daughters’ estate in the premises as may conveniently be done, and I do also authorize and empower them to sell and convey in fee simple my lands, &c., in Chester county and in Berks county, at such time or times as they may think favorable, and the moneys arising from all these sales shall be divided, and pass to, as is hereinafter directed, respecting my personal estate.
    “ And it is my will, that whatever real estate, ground-rents or personal property of any that shall be selected by my dear wife for the payment of the annuity hereinbefore bequeathed to her, shall be vested in the said trustees, and the rents, &c., thence arising, shall be paid to her as the same becomes due. And immediately after her decease, the real estate, as well as the personal, shall be divided amongst my sons and daughters, severally, in equal shares. But my daughters’ shares shall be vested in the said trustees, in the same manner, and for the same purposes as is herein directed with respect to their share of the residue of my personal estate.”
    He then directed the education of his minor children, to be paid for out of his estate, and a fund for that purpose to be set apart before dividing his personal estate.
    “ All the residue, &c., of my personal estate not hereinbefore disposed of, of whatever kind, shall be divided into eight equal parts;” one of these parts he gave to each of his five sons, “ and the three remaining parts I give and bequeath to my executors (whom I do hereby constitute trustees for the purposes mentioned in this my last will), and the survivors and survivor of them in trust, &c., that they will hold the said three equal shares for the sole use and benefit of my three daughters, Julianna, Margaret and Harriet, in equal parts during their lives, respectively, and will pay over to them respectively, the interest, &c., * * * and the receipts of my daughters respectively, whether they be sole or married, shall be a sufficient discharge for the same ; and it is also my will that my stocks of various kinds shall be divided (after setting aside those which shall be selected by my dear wife) amongst my five sons and the said trustees for the purposes above mentioned, and no part of what is vested in the said trustees shall be sold or disposed of by them without the consent of my wife or daughters respectively being first had in writing ; nor then, unless it be for the purpose of investing the proceeds in some other productive property, to be held in trust as aforesaid, for the benefit of my said wife and daughters respectively.” Loans, &c., which might be paid in, to be reinvested for the same uses.
    The testator then provided that his otherwise undisposed of real estate, situate in Philadelphia county, should, upon the arrival of his youngest child at the age of twenty-one years, be divided into eight equal parts by referees, to be chosen by his children, and that one of these parts should be given to each of his five sons.
    The remaining three parts he devised as follows:—
    “ And the three remaining parts I give, &c., to the trustees herein named, and the survivors and survivor of them, &c. But in special trust that they and the survivors and survivor of them, shall and will hold the said three parts for the sole use and benefit of my three daughters, Julianna, Margaret and Harriet, each one part in severalty. And it is further my will that either or all of the three parts hereby vested in trustees for the use or benefit of my said daughters may (by and with the consent of my said daughters respectively, first had in writing) be let for a term of years, or on ground-rent for ever; but may be redeemed at any time after the decease of the daughter to whom such part may have been allotted, but shall not be redeemed before her decease; such rents to be paid to the said trustees, or the survivor of them, in trust and special confidence that they will pay them, without delay, only to my daughters, respectively, whether they be sole or married, and whose receipts only shall be their discharge; and in further trust and confidence, that at, or immediately after the decease of either of my daughters they will convey all the rights and interests vested in them, in trust, for the use of such deceased daughter, to such person or persons as she by her last will and testament may direct, and in default of such will and testament, then to her lawful issue, in equal shares, and in default of such issue, then to her brothers and sisters, in equal shares, and to the lawful issue, if any there be any, of my children who may then be deceased ; such issue to take what their parent would have taken had he or she been living.”

      “And' to avoid all doubts which might arise, I do hereby declare that it is my intention that my said daughters respectively shall have full power and authority, whether they or either of them be sole or married, to dispose of by testament and last will, in such manner as they may think proper, all their respective shares of the estates, real and personal, hereby vested in the said trustees.”
    Harriet Y. Evans, a daughter, was a minor at her father’s death, not contemplating marriage.
    The youngest child arrived at age on the 2d of September 1842, and in 1843 partition of the real estate was made by referees in accordance with the will.
    Harriet V. Evans married Grouverneur M. Ogden, May 22d 1845.
    On the 11th of June 1866, Manlius' Gr. Evans was substituted trustee for Harriet in the place of the then surviving trustee.
    On the 18th of April 1871 Ogden and wife filed a bill in the Court of Common Pleas against Manlius Gr. Evans, setting out the foregoing facts, and also that the complainants had applied to the trustee to make to the said Harriet V. Ogden a transfer of the personal property, and a conveyance of the real estate held in trust for her, which they were informed and believe she is entitled to hold absolutely; and that the said trustee had refused to do this, except under the direction of the court, &c.
    The prayers were: An account of the personal property, the payment of the balance in the trustee’s hands, and a conveyance of the real estate in fee simple.
    The answer admitted the averments of the bill, alleged the trust to be a subsisting and valid one, and asked that the bill be dismissed with costs.
    The case was heard on bill and answer in the Court of Common Pleas.
    The court (Ludlow, J.) dismissed the bill.
    The plaintiffs appealed to the Supreme Court, and assigned the dismissal of their bill for error.

      S. S. Hollingsworth and G. W. Biddle, for appellants.
    As to real estate: The gift to the daughters gives them each a legal estate. Express trusts that have been sustained in this state can be classified under these heads:—
    1. Special trusts for married women: Lancaster v. Dolan, 1 Rawle 231; Pullen v. Rianhard, 1 Whart. 520; Thomas v. Folwell, 2 Id. 11; Wallace v. Coston, 9 Watts 137; Cochran v. O’Hern, 4 W. & S. 95; Nice’s Appeal, 14 Wright 143; Wells v. McCall, 14 P. F. Smith 207.
    2. Trusts to preserve property from creditors of cestui que trusts. “ Spendthrift eon trusts,” as they are sometimes called : Fisher v. Taylor, 2 Rawle 33; Holdship v. Patterson, 7 Watts 547; Ashhurst v. Given, 5 W. & S. 323; Vaux v. Parke, 7 Id. 19; Brown v. Williamson, 12 Casey 338; Shankland’s Appeal, 11 Wright 113; Keyser’s Appeal, 7 P. F. Smith 236; Rife v. Geyer, 9 Id. 393.
    3. Trusts where active duties are imposed on the trustees: Barnett’s Appeal, 10 Wright 392; Sheets’s Estate, 2 P. F. Smith 257; McBride v. Smyth, 4 Id. 245; Bacon’s Appeal, 7 Id. 504; Wickham v. Berry, 5 Id. 70.
    The trust is void, as a trust for the separate use of a married woman, because not made in immediate contemplation of marriage: Smith v. Starr, 3 Whart. 62; Hamersley v. Smith, 4 Id. 126; McBride v. Smyth, 4 P. F. Smith 250; Wells v. McCall, 14 id. 207.
    The devise does not create an active trust requiring a legal estate in the trustees during the lives of the daughters. The direction to the trustees to convey after the decease of the daughters to the uses of their wills, or in default of a will to their issue, will not keep the trust alive: Barnett’s Appeal, 10 Wright 392; Nice’s Appeal, 14 Id. 143; Bacon’s Appeal, 7 P. F. Smith 513. The direction to pay the rents to the cestui que trust will not of itself make the trust an active one: Rife v. Geyer, supra. The intention of a testator was to create a trust for the sole and separate use of a married woman, and such a trust only as shown by the language of the will: Lee v. Prieaux, 3 Brown’s Ch. 382; Goulder v. Carum, 1 De Gex, Fisher & Jones 146; Jamison v. Brady, 6 S. & R. 467.
    By the use of apt technical words to create an estate for the sole and separate use of a married woman': Adamson v. Armitage, 19 Vesey 416; Ex parte Ray, 1 Maddock 115; Inglefield v. Coghlan, 2 Coll. Ch. 247; Lindsell v. Thacker, 12 Sim. 178; Ex parte Killick, 3 Montagu, Deacon and De Gex 487; Hawkins on Wills 116-118; Lewin on Trusts 240-241; 22 Law Lib. 122 and notes; Snyder v. Snyder, 10 Barr 423; Hamersley y. Smith, supra; Dodson v. Ball, 10 P. F. Smith 497; Jones’s Appeal, 7 Id. 369; Koenig’s Appeal, Id. 352; Froyvogle v. Hughes, 6 Id. 228; Megargee v. Naglee, 14 Id. 216.
    The gift to the daughters gives them each an estate in fee simple absolute. Where an estate is given to a person generally or indefinitely, with a power of disposition, it carries a fee, and the only exception to the rule is, where the testator gives to the first taker an estate for life only, by certain and express words: Jackson v. Robins, 16 Johns. 587; Flintham’s Appeal, 11 S. & R. 23; Smith v. Starr, supra; Pepper’s Will, 1 Pars. 441; Girard Life Ins. Co. v. Chambers, 10 Wright 490; Church v. Disbrow, 2 P. F. Smith 219; Freyvogle v. Hughes, 6 Id. 230.
    The limitation, after the decease of the first taker, in default of a will, “ to her lawful issue in equal shares,” makes the daughters tenants in tail: Hayes on Real Estate 17; 2 Jarman on Wills 329 et seq.; Hawkins on Wills 189; Eichelberger v. Barnitz, 9 Watts 447; Taylor v. Taylor, 13 P. F. Smith 481. The addition of the words “in equal shares,” will not change this primd facie meaning: Hayes on Real Estate, table I. 39; table III. 69, 70; Doe v. Applin, 4 Term R. 82; Doe v. Cooper, 1 East 229; Harrison v. Harrison, 7 Man. & Gr. (49 E. C. L. R.) 938. Super-added words of limitation alone, will not make “ heirs of the body” words of purchase: Hawkins on Wills 184; 2 Jarman 337; Jesson v. Wright, 1 Bligh 1; Criswell’s Appeal, 5 Wright 291; Paxson v. Lefferts, 3 Rawle 59-75; George v. Morgan, 4 Harris 95. Nor will superadded words of distribution: Moore v. Brooks, 12 Grattan 135; Maurer v. Marshall, 4 Harris 377; Hawkins on Wills 190; Cannon v. Rucastle, 8 C. B. (65 E. C. L. R.) 876; Haldeman v. Haldeman, 4 Wright 29.

      B. Evans, for appellee.
    The devise created an active trust : Vaux v. Parke, 7 W. & S. 23; Barnett’s Appeal, 10 Wright 393; Ashhurst v. Given, 5 W. & S. 328; Pullen v. Rainhard, 1 Wharton 521; The Girard Life and Trust Co. v. Chambers, 10 Wright 486; Shankland’s Appeal, 11 Id. 113; Sheets’s Estate, 2 P. F. Smith 257; Wickham v. Berry, 5 Id. 71; Bacon’s Appeal, 7 Id. 504; Rife v. Geyer, 9 Id. 396. The use will not be executed where it is apparent that the intention of the testator was otherwise : Ashhurst v. Given, 5 W. & S. 328; Rife v. Geyer, 9 P. F. Smith 395; Fisher v. Taylor, 2 Rawle 37. The daughter was married before the Married Women’s Act of 1848, which does not affect the vested rights of a husband: Burston’s Appeal, 10 Harris 167; Bachman v. Chrisman, 11 Id. 163. The limitation, in default of appointment, is good by way of executory devise: 2 Black. Com. 173; Jackson v. Robins, 16 Johns. 587; Ide v. Ide, 5 Mass. 500; Ramsdell v. Ramsdell, 21 Maine 293; 1 Jarman on Wills 792, note; Fearne on Rem. 226; 2 Sugden on Powers 4; 1 Id. 127. “ Issue” is not a proper technical word of limitation: 2 Black. Com. 115; Taylor v. Taylor, 13 P. F. Smith 483; Montgomery v. Montgomery, 3 Jones & Lat. 47; Sibley v. Perry, 7 Ves. 532; Redfield on Wills, part II. 360. The gift to the issue in equal shares makes them take as purchasers : Hockley v. Mawbey, 1 Ves. Jr. 149; Fearne Cont. Rem. 154 and 197; Findlay v. Riddle, 3 Binn. 139; Abbott v. Jenkins, 10 S. & R. 297; Guthrie’s Appeal, 1 Wright 9; Powell v. The Board of Missions, 13 Id. 46; Walker v. Milligan, 9 Id. 180. An estate tail is not subject to the Intestate Act, but descends as at common law: Guthrie’s Appeal, 1 Wright 16; Chew’s Appeal, Id. 24; Reinhart v. Lantz, Id. 488; Hawkins on Wills 193.
   The opinion of the court was delivered, May 13th 1872, by

Asnew, J.

If the trust for Mrs. Harriet V. Ogden, under the will of her father, Cadwalader Evans, be active, as decided by the learned judge of the Common Pleas, his decree was right. This, therefore, is the real question. Since the decision in Barnett’s Appeal, 10 Wright 392, overruling Kuhn v. Newman, 2 Casey 227, active trusts are sustained even as to cestuis que trust sui juris, where the intent of the donor is to make the trust answer some useful and legal but temporary purpose, not infringing upon the law of perpetuities: Wells v. McCall, 14 P. F. Smith 212. The subject of active trusts is discussed and some of their purposes adverted to in Rife v. Geyer, 9 P. F. Smith 395-6, and Dodson v. Ball, 10 Id. 496-7. The trust stated in Barnett’s Appeal, supra, affords an illustration of an active trust for a son sui juris, and the means of contrasting with it the trust in this case, and thus defining the true character of the latter. The following cases decided since Barnett’s Appeal may also be referred to as instances of active trusts, and will be useful in determining this case: Shankland’s Appeal, 11 Wright 113; Sheets’s Estate, 2 P. F. Smith 266-67; McBride v. Smyth, 4 Id. 245; Wickham v. Berry, 5 Id. 70; Bacon’s Appeal, 7 Id. 504; Rife v. Geyer, 9 Id. 393; Springer v. Arundel, 14 Id. 218.

In each one of these cases the intent of the donor or testator to clothe his trustees with a control over the estate and prevent it from passing into the hands of the cestui que trust is clear, and in each his purpose wTas lawful, to accomplish an object not inconsistent with law, nor with that general policy which forbids unnecessary restraints upon alienation. In view of the principles regulating active trusts, it is obvious that the first question to be asked upon the will of Cadwalader Evans is, what purpose had he in view in the creation of the trust made for his three daughters of the real estate devised to them. The answer is immediate. None is disclosed except that which is to be inferred from these expressions, viz.: his devise to their “sole use and benefit;” the .payment of the rents to them “ whose receipts, whether they be sole or married, shall be a discharge;” and the power “whether they or either of them be sole or married, to dispose of their share by will.” No other expressions are to be found in this will from which a purpose can be inferred in the creation of the trust. These expressions, therefore, disclose the testator’s purpose to provide a trust for coverture, and to preserve the estates of the daughters against the authority and title of their husbands, as the law stood at the date of this will. This being the case, the next question is, whether the trust for coverture took effect at the death of Mr. Evans. The date of his will is March 23d 1838, and he died in the autumn of 1841, his daughter Harriet then being a minor and not contemplating marriage. She did not marry Mr. Ogden until May 1845. These facts are averred in the bill and admitted in the answer. The trust for coverture not being in immediate contemplation of marriage, never took effect: see the authorities collected in Wells v. McCall, supra. The active duties referred to by the court below having sole reference to this supposed trust, necessarily fell with it. An active trust having no object to accomplish for the benefit of the cestui que trust, clearly will not be continued for the mere benefit or pleasure of the trustee. The object of the testator having failed, or ceased, the law will execute the use: Freyvogle v. Hughes, 6 P. F. Smith 228; Koenig’s Appeal, 7 Id. 353; McBride v. Smith, 4 Id. 245; Dodson v. Ball, 10 Id. 433; Magargee v. Naglee, 14 Id. 216; Yarnall’s Appeal, decided at this term (antea 335).

A different purpose, perhaps, might be imputed to the testator in this instance, if the devise of his real estate had been to his daughter for life only; for then it might be inferred that the trust was not merely for coverture, but to preserve the contingent remainders to the brothers and sisters and their issue. This, therefore, gives rise to another question, to wit, the quantity of estate or interest vested in the three daughters. There is no express limitation to them for life. The intention of the testator must therefore be derived from the entire scope of the will: Sheets’s Estate, 2 P. F. Smith 263-4; Freyvogle v. Hughes, 6 Id. 230; Haldeman v. Haldeman, 4 Wright 29. The first point to be noticed is that this will was made after the passage of the act relating to wills,' on the 8th of April 1833, the 9th section of which declares that all devises of real estate shall pass the whole of the estate of the testator in the premises, although there be no words of inheritance or of perpetuity, unless it appears by a devise over or by words of limitation or otherwise, in the will that the testator intended to devise a less estate. The trust “ for the sole use and benefit of my three daughters, Julianna, Margaret and Harriet, each one part in severalty,” would therefore import a fee, unless we can discover an intent to restrict it. We cannot infer a restriction for life in the direction to the trustees to convey the share of a “ deceased daughter to such person or persons as she may by her last will and testament direct, and in default of such will and testament, then to her lawful issue in equal shares.” The will being made before the passage of the Act of 1848 relating to the property of married women, it was necessary to confer the power to devise or will in order to escape from the title and authority of the husbands of the daughters; the act relating to wills having excepted married women out of the persons who can dispose of their property by will, unless under a power legally created for the purpose, or with the assent or license of their husbands, in the case of personal estate. The clause as to the lawful issue of the daughters, it is true, restricts the fee, but does not restrict the interest to a life estate; It is well settled that a devise to the lawful issue of the first taker is primá, facie a limitation to the heirs of the body of the devisee, and therefore vests a fee tail; and this is the case even where the devise to the first taker is expressly for life: Taylor v. Taylor, 13 P. F. Smith 481; Haldeman v. Haldeman, 4 Wright 29; Physick’s Appeal, 14 Id. 128; Nice’s Appeal, 14 Id. 143. It requires more than mere words of distribution to limit this primá facie effect of the phrase. The words “in equal shares,” without something else to^ indicate the intention of the testator, will not reduce the inheritance to a mere life estate. Even the words “ as tenants in common” will not of themselves limit the entail: Smith on Executory Interests, § 475; Cresswell’s Appeal, 5 Wright 288-291. Nor does the devise over to the brothers and sisters in default of issue of the daughters restrict their interest to an estate for life; for the failure of issue on which the devise over rests is indefinite, and the devise over is therefore uncertain «in point- of time, and entirely contingent. The only expression in the will that gives any color to the notion of a life estate in the daughters, is that which provides for a redemption of the estates let for a term of years or on ground-rent for ever, “ at any time after the decease of the daughters to whom such part may have been allotted, hut shall not be redeemed before her death.” In a doubtful case the inference from this provision might turn the scale, but there is no doubt arising in other parts of this will, while the provision itself can be fairly attributed to the intent of the testator to strengthen the trust for coverture he supposed he was creating, and thereby to prevent the redemption-money from passing into the control of the husbands of his daughters as the law then stood. In view of all the provisions of the will, our conclusion is, that each of the daughters took an estate of inheritance in fee tail, freed, as we have seen, from any trust for coverture or otherwise.

The daughters also took an absolute interest in the personal estate. At first blush the will seems to direct otherwise, for the trust is, “ that they will hold the said three equal shares for the sole use and benefit of my three daughters, Julianna, Margaret and Harriet, in equal parts during their lives respectively, and for no other use or purpose whatever; and will pay over to them respectively the interest, dividends and profits on their several shares, as the same becomes due and is received; and the receipts of my daughters respectively, whether they be sole or married, shall he a sufficient discharge for the same.” But a closer examination of all the parts of the will discloses a different intention. And first, it is observed that the intent of the testator in this item of his will is similar to that in the item relating to the real estate, to wit, to provide a trust for coverture to preserve the estates of his daughters. Hence, when he says, “ and for no other purpose whatever,” he evidently refers to the sole and separate character of the use and not to the extent of it as contained in the words during their lives respectively.” Then, when we examine the general provisions of the will, we find that this item is a residuary clause, wherein he divides all the residue and remainder of his personal estate not before disposed of, and of whatever kind, into eight equal parts, giving to each of his five sons one equal part, and to his executors as trustees the remaining three equal parts in trust for his three daughters, as above stated, without any limitation over, or other disposition of them after the death of his daughters or any of them.

The intent to make a final and equal disposition of all the residue of his personal estate among his eight children is therefore clear, while it is equally obvious that the trust was interposed for the lifetime of his daughters, as a protection merely against any husbands they might take. And then what makes this intent conclusive is found in#the general clause following the next succeeding item relating to the real estate, in these words : “ And to avoid all doubts which might arise, I do hereby declare that it is my intention that my said daughters respectively shall have full power and authority, whether they or either of them be sole or married, to dispose of by testament and last will, in such manner as they may think proper, all their respective shares of the estate, real and personal, hereby vested in the said trustees.” Therefore the personal estate in question being itself only an undisposed residuum, the intent of the testator to make his children equal being manifest, the mention of the life estate being only for a special purpose, there being no bequest over, the disposition being analogous to that of the real estate, and finally, the full and absolute power to dispose by will of all the shares vested in the trustees, leave in our minds no doubts of the intention of the testator to vest these three shares in his three daughters absolutely

The decree of the court below dismissing the bill of the plaintiffs is therefore reversed, and the bill is ordered to be restored, and it is ordered and decreed that the defendant, Manlius Gr. Evans, do account for the personal property held by him as alleged trustee for the sole use and benefit of Harriet Y. Ogden, and pay over to her whatever the amount shall be found to be ' in his hands to which she is entitled under the will of Cadwalader Evans, deceased, and that the said Manlius Gr. Evans, as such alleged trustee, make a valid transfer and conveyance to the said Harriet Y. Ogden, in fee tail general of the real estate which he holds for her sole use and benefit; and further, that the record be remitted to the court below, with directions to proceed and carry this decree into effect.


author: Sharswood, J.

text:
    Spering’s Appeal.
    1. Directors in a stock corporation, as to the stockholders, are not technical trustees, but are as mandatories, and are bound to apply no more than ordinary skill and diligence.
    2. Directors are not liable for mistakes of judgment, although so gross as to appear absurd, if honest and within the scope of their powers: especially where acting under direction of legal counsel.
    3. Directors are responsible to the stockholders for losses from fraud, embezzlement, wilful misconduct, breach of trust: gross inattention or negligence, by which fraud has been perpetrated, by agents, officers or co-directors.
    4. The responsibilities of directors in a stock corporation considered in this case. 1
    January 10th and 11th 1872.
    Before Thompson, C. J., Agnew and Sharswood, JJ. Williams, J., at Nisi Prius.
    Appeal from the decree at Nisi Prius: No. 8, to July Term' 1867.
    The bill in this case was filed April 18th 1867, hjt Joshua Sparing, assignee*of the National Safety Insurance and Trust Company,' against James B. Smith, Samuel H. Ashton, C. Landreth Munns, Joseph B. Barry, F. Carroll Brewster, Edward L. Carter, Benjamin W. Jones, Henry L. Churchman, Francis Lee, Thomas B. Smiley, Stephen Coulter, Joseph Yerkes, Henry Diffenderfer, James L. Stevenson, William J. Reed, Peter Glasgow, Henry L. Benner, administrator, &c., of Henry L. Benner, deceased, and Michael A. Byrne, administrator, &c., of Robert Selfridge, deceased.
    The National Safety Insurance and Trust Company became ^insolvent in the winter of 1860-1861, and losses, to a large amount were sustained by its depositors. They made an assignment for the benefiifof "creditors on fhe 18th of April 1861, to Henry L. Benner, Stephen Coulter and John Derbyshire. Spering, the plaintiff, was afterwards appointed trustee in their place. This bill was brought by the trustee to compel the directors and others, alleged to be connected with them, to make good the losses, on the ground of fraudplenLmisma.nag;ement.
    The_biU..set out: The NationalhSafet?.Insurance and Trust Company was incorporated by Act of April 17th 1841> under the nameoNThe Equitable and Life Insurance, Annuity and Trust Company, with the powers of the Philadelphia Eire, &c., Insurance Company, and were expressly restrained from exercising banking privileges.
    The Philadelphia Insurance Company, by several Acts of Assembly, were empowered to make fire and marine insurance, to lend money on bottomry and respondentia, as the American Insurance Company, by their acts of incorporation, were authorized to do; and were to have also the privileges and be subject to the restrictions under a supplement of February 26th 1886, to the act incorporating The Pennsylvania Company for Insurance on Lives,&c; the capital to be $250,000, in 5000 shares of $50 each. By Act of April 1st 1842, there were given to The Equitable Insurance, &c., Company all the powers and privileges conferred on The Pennsylvania Company for Insurance on Lives, &c., by Act of March 10th 1812, and its supplements. These powers, &c., were to make insurance on lives, grant annuities, and make all kinds of contracts, involving casualties on lives and interest on money, to receive money in trust and pay interest not exceeding legal interest; the moneys to be invested in the debt of the United States or any municipal corporation of Pennsylvania, or in the stock of a bank, canal, bridge or road company, in ground-rents or mortgages, or on any good and sufficient security or real estate taken in execution for debt.
    On the 28th Of May 1850, books were opened for subscription to the stock of the company; the 5000 shares were subscribed and directors were elected June 3d 1850; shortly afterwards the Court of Quarter Sessions of Philadelphia changed the name of the corporation to the “National Safety Insurance and Trust Company ;” this change of name was afterwards confirmed by Act of Assembly. The company opened an office mainly for the purposes of a savings fund and also for life insurance; the risks of life insurance were in 1854 transferred to another company, the savijigs fund business Eeing.thereafter the.main business of_the company. " ~

      Directors were elected as follows:
    William J. Reed, in the year 1850, annually until 1852.
    Peter Glasgow, 1851, 1854.
    B. W. Jones, 1852, 1854.
    J. B. Smith, 1852, 1857.
    H. L. Churchman, 1855, 1857.
    H. Diffenderfer, 1858, 1859.
    H. L. Benner,
    S. K. Ashton,
    R. Selfridge,
    J. B. Barry,
    1850, 1861.
    F. C. Brewster, “ 1851, “ “ 1861.
    E. L. Carter, “ 1852, “ “ 1861.
    C. L. Munns, “ 1853, “ “ 1861. '
    F. Lee, “ ■ 1855, “ “ 1861.
    J. Yerkes, “ 1858, “ “ 1861.
    J. L. Stevenson. “ 1860, « “ 1861.
    H. L. Benner was elected president in 1851, and was continued until the assignment was made.
    The company commenced the savings fund business, advertised extensively, and made statements in the pass-books of depositors, setting out the character of the investments, &c., and asserting the safety of the deposits, &c. The deposits in 1850 were $11,596.52, and with the exception of 1857 and 1858, annually increased until 1860, when they amounted to $1,313,819.21; in 1861 amounted to
    / That the defendants, instead" of paying for their stock, gave notes]" which lay over fór aJñumb'ér~of years, and some-were never paid; they borrowed money on collaterals and took up the colla- ¡ terals without paying the money borrowed; the expenses of the company were wasteful; many of the investments were of a char-. acter forbidden by law; those that were legal were made when I there had been no profits; an over-valuation of assets was made, to ’ show profits; the assets were sacrificed instead of enforcing pay-1 ment of unpaid stock subscriptions; the account books were so ¡ confused, that the transactions of the company could not be ascer- j tained.
    Shortly after the original subscription of the stock, 750 shares of it were transferred to the company, and at the time of the assignment they held 964 shares; two assessments, together amounting to $10 per share, were made in 1850, to pay losses on life insurance. The most of these assessments were paid in notes of the stockholders, and dividends declared were applied to the payment of interest on these notes and to the principal; in December 1853, the amount unpaid on these assessments and the original subscriptions was $27,598.91; this balance was carried to account of Bills Receivable, and tbe mode of final settlement tbe plaintiff could not'ascertain. If the company bad loaned at legal interest, tbe excess beyond 5 per cent, interest wbicb was paid on deposits, would bave been tbeir profit, and tbeir expenses should bave been limited to that; this excess, from 1850 until tbe assignment, would bave amounted to about $58,000, wbicb was exceeded by the expenses and dividends. Tbe directors discounted at usurious rates; at tbe date of tbe assignment, the assets were:
    Real estate, $112,080
    Mortgages, 46,634
    Ground-rents, 47,159
    Stocks, 470,433
    Bills receivable. 217,415
    Discounts and making loans were controlled by tbe finance committee, and were mostly nominally made to tbe defendant Coulter, commencing in 1853 and continuing till the assignment; tbe committee’s books were contradictory; Coulter was in fadt tbe agent of tbe company, be doing an usurious business for them, with tbeir money, “without restraint or responsibility.”
    In 1852 until December the company held $900 of Coulter’s liabilities; at that time they held $160,000; the amount of Coulter’s notes varied, diminishing and increasing until November 1860, at which time a run commenced on tbe company ; tbe notes were mainly Coulter’s; when tbe assignees’ inventory was filed none of bis notes appeared; tbe transactions with him had at first been entered in tbe books as at legal rates of interest, and afterwards be made acknowledgments in writing of extra interest, of tbe amount of wbicb there is no statement; fictitious entries or loose estimates were made in tbe accounts; large amounts of accumulated interest were carried to tbe credit of Bills Receivable, and Coulter gave bis note for tbe amount. Tbe business of tbe company was usurious at various rates, some as high as 3 per cent, per month. Tbe real estate, ground-rents, mortgages, &c., were of doubtful value, some being collaterals to favor debtors; tbe value of assets was frequently increased on tbe books to show profits not earned; three-fourths of tbe investments were in bills receivable, although advertised to be in real estate and other solid securities; they invested also in forbidden securities, such as stocks in gas companies out of tbe state, real estate not taken in execution, &c. Tbe insolvency arose, amongst other causes, from large expenses, unwarranted dividends, securities of a character wbicb bad to be sacrificed when a run was made on tbe company; there were false entries in tbeir books for tbe purpose of deceiving, showing tbe assets greater and tbe liabilities less than in reality they were; loans were improperly made to directors, and whilst notes of defendants Ashton, Carter, Munns, Barry and Smith were unpaid, tbeir collaterals were returned to them; tbeir notes were in “ Bills Receivable,” but not in the inventory. Early in 1861 depositors brought suit, judgments were recovered, executions compromised or stayed upon deposits of collaterals; real estate and other property were fraudulently transferred to Coulter; the assets at the assignment according to the books should have amounted to $896,711.65; some had been recovered by the plaintiff, hut assets of value had been assigned by the directors between the run in 1860 and the assignment; the amount recovered by plaintiff was not sufficient to pay interest to the depositors; debtors of the company when sued had defended on the ground of the illegality of the debt; others would probably do the same; the defendant Reed held the office of secretary and treasurer of the company, and Smiley that of actuary, they were acquainted with its condition, and assisted the other officers in the fraud and mismanagement.
    The prayers were for a decree against the defendants, to pay the plaintiff sufficient to make good the liabilities of the company, and for general relief.
    By amendments to the bill the plaintiff charged that the defendants, during their respective terms of office, had entire control of the affairs of the company; that the frauds charged continued from 1854 until April 8th 1861; that each defendant participated in them, or by negligence permitted and encouraged them.
    A decree was taken pro confesso against the seven defendants last named.
    The appearing defendants filed demurrers interposing the statute' of limitations; the demurrers were overruled as to all but Churchman and Smith. Judgment was entered for them on their demurrers; oh Churchman’s demurrer the following opinion was delivered by Thompson, C. J.Y

      “ Directors in a corporation may in some sense be regarded as trustees for parties pecuniarily interested in its operations, but this results from the nature of the duties they are to perform. They are not technically trustees. An attorney in fact, bears a close resemblance to such a position, or perhaps an attorney at law is still nearer being an official representative. It is settled that, in these cases, the Statute of Limitations is applicable. Constructive trusts, it is well settled, are within the statute: 4 Barr 56;. 2 Grant 278.
    “ The trust claimed to exist in this case, is of this nature in my opinion. Nine years after the demurrant, Churchman, had ceased to be in the direction of the National Safety Insurance and Trust Company, he is called upon by this bill, to answer an allegation of gross negligence in regard to the affairs of the company, during some period of his official incumbency as director. This I regard as the charge. The bill sets forth that he and the directors participated in frauds, or by the most gross and culpable negligence, permitted and encouraged corrupt and negligent dealings with, and mismanagement of the moneys and assets of said company. The particulars of the fraud are not set out, and only the last branch of the alternative is sufficiently stated, if indeed either be. This negligence was a breach of duty, and might have made the party liable on the instant, or certainly when discovered. But if parties or the corporation, lie by nine years without evincing that they have been injured, the statute of repose in a common-law form would protect, and by assimilation, so in equity: 2 Daniels 43,44.
    “ If nine years would not protect, nineteen would not. Had he continued a director, it is probable a different rule would be applicable. If no statute or lapse of time will protect a party once a director, nobody ought to serve as such. In addition, I see not any reason why the Act of 28th March 1867 should not apply in this case, although I do not place the case upon it. The demurrer to the bill by the defendant, Churchman, is sustained on the ground of the lapse of time alone, after he ceased to be a director and before bill filed.”
    Other defendants denied committing fraudulent or illegal acts ; averred that they always took collateral security with ample margin for loans; publications were made by the executive officers not authorized by directors ; but the statements in them were believed to be true ; they all gave stock-notes but Lee, and most of them had been paid at the time of the assignment; the collateral for money Borrowed by them was changed only when excessive or the loans reduced; they had acted under legal advice ; the investments were not forbidden by law; dividends were not declared when there were no profits; the assets were not over-valued, but would have been much in excess of the liabilities, if it had not been for the pressure of the late war; when the run commenced, just before the war, they believed it would be temporary, and under legal advice, they acted so as to preserve the existence of the institution when ordinary experience was at fault; if it had been possible to preserve the assets, the debts would-have been paid; up to the time of the Avar the capital Avas sufficient without calling in all the instalments; all the stock was subscribed, but some Avas forfeited to the company; there was no confusion in the accounts; usurious loans Avere not made; the loans were under the control 6f the finance committee; Coulter was agent of the company; defendants were not connected with him in any fraudulent transactions ; the assets had been committed to Coulter to sell to sustain the company in the crisis in 1860-1861 ; there were no fictitious entries in the books; nothing had been done to deceive depositors. Suits had been compromised under legal advice ; assets had been transferred to secure certain deposits; none of these defendants had possession of the assets; all the affairs of the company were laid before the stockholders.

      They furtner averred, that the plaintiff had no cause of action ; because, that was in the creditors alone; anything recovered would not enure to the corporation; the corporation had suffered no injury; if there had been a cause of action it would be barred by the Statute óf Limitations. They denied the averments in the amendments.
    F. C. Brewster pleaded the Statute of Limitations and that he had ceased to be a director in 1858. He also filed an answer in support of his plea. Replications were filed to the answers and pleas. George Bull, Esq., was appointed Examiner and Master.'
    The testimony taken was very voluminous, covering a vast amount of documentary evidence as well as oral testimony, presenting the affairs of the corporation, its assets from time to time, its management, &c.
    The Master made a separate report in Judge Brewster’s case; he sustained his plea of the statute upon the evidence and found also that he had ceased to be a director after 1858, and had not participated in the management of the corporation in any way after that time and was not liable.
    In reporting as to the other defendants, the Master says: “ It appears in the evidence that the defendants always acted upon legal advice, as to the mode of doing business, and making investments. No important step was taken without first obtaining the advice of the solicitor.”
    After an elaborate and thorough examination of the evidence and authorities, he reports his conclusions, viz :
    “ * * * Each act charged against defendants must stand by itself, and they are not ‘continuing’ or joined together so as to constitute one whole. Directors are not technical trustees cognisable only in equity. The primary condition of directors is that of agents or gratuitous mandatories of the corporation. * * * The plea of the statute will apply to each separate act, and all prior to six years will be barred unless there is fraud a.nd concealment.
    “There is no difficulty in determining the question of fraud and concealment. It appears by the facts reported, that there was no actual fraud whereby the defendants sought to obtain a personal advantage at the expense of the corporation. One fact is quite clear — that none of these defendants have ever made any. profit out of their transactions which was not common to all the stockholders. * * * Their actions were governed by an honest desire to make money for the corporation. At each annual meeting of the stockholders, statements were laid before the meeting. * * * Among other items we find the ‘accumulated interest,’ set out as an asset. The valuations are all put down, so that any one might detect the fact if they were above the real' value. In fact, all the information required to show the exact nature of their business was there, and if the stockholders made no further inquiry, they can hardly allege concealment, and will be presumed to have assented. * * * The Master is clearly of the opinion that there is nothing like fraud and concealment. Consequently, in pursuance of the views above expressed, everything dating more than six years prior to the commencement of this suit will be barred. * * * This of course confines the whole case to a period of about three months prior to the date of assignment. * * *
    “ The final run upon the National Safety Insurance and Trust Company, which continued until the failure, commenced soon after the presidential election of 1860, and was caused by the great panic, which the apprehension of trouble in the South brought about. During the whole of that run no investments were made, except the purchase of the Winslow House. The whole attention of the officers was directed to efforts made to sustain the institution. There can be no question that the defendants who participated in that struggle, acted in good faith. They thought that the panic would soon pass away and that they would be able to weather the storm. The result showed that they were mistaken in, this. But this was an error of judgment for which they cannot be held responsible. * * * They were bound to take the same care of the company’s interests that a prudent man would of his own, and in doing this they were entitled to use the same discretion. If they believed that they could sustain the credit of the institution, and prevent its failure and the consequent loss, it was their duty to do so. That they did so believe is shown by the fact which is in evidence before the Master, that even at the very last, the defendants presented to the creditors a proposition in writing, whereby they agreed to become personally responsible for all the debts of the concern, if the creditors would agree to give them three years’ time, the defendants in the meantime to have entire control of the assets. This proposition or agreement was signed by about one-half of the creditors. In making this offer they must have entertained confidence that the assets, by careful nursing, could be made to pay the debts of the institution. It will be remembered that some of the defendants were men of means, and their guaranty was of great value.
    “ The manner in which the defendants undertook to raise money at that time, is complained of. The company did not appear in the market as a borrower; to have done so would have hastened the catastrophe which they were trying to avert. Coulter was the agent and broker of the company, and in that capacity negotiated loans upon the collaterals. By this means the fact that the corporation was a borrower remained a secret. In some cases where it was deemed advisable, securities were sold, but most of them were hypothecated. The mode of transacting the business at that time was really an advantage to the corporation, because it prevented the loss of credit, which would have resulted from a general knowledge in the market that the concern was negotiating loans to such an extent. * * *

      “ At the outset of this crisis, two alternatives were presented to these defendants; first, to make an assignment; second, to make a bold stand against the storm, and endeavor to save the institution. If they honestly believed that they would be able to save the company from destruction, it was their duty to accept the second alternative, and make the effort, and in doing this they were justified in making any reasonable sacrifice that the necessity of the case demanded. The latter course was the one pursued, and the mode in which they undertook to raise money was probably best for the institution. They might have gone into the market and sold their securities absolutely; instead of doing this, they resorted to a system of hypothecation, intending in this way to carry the company over the crisis, and afterwards redeem them. That this was by all odds the wisest course was proved by subsequent events. * * *

      “ The Master has been unable to find anything in the history of the company, during the time covered by this case, that can avail to render any of the defendants liable. If they were guilty of anything, it was too much anxiety to make money for the company, and to preserve its credit. The conclusion is that the plaintiff has no grounds for recovery, and his bill must therefore be dismissed with costs.”
    Exceptions were filed to the report. The court at Nisi Prius overruled the exceptions, and made a decree confirming the report.
    From this decree and the decrees on the demurrers the plaintiff appealed to the Supreme Court in banc, and assigned the decrees for error.

      J. II. Q-endell and JS. 8. Miller (with whom was O. B. Penrose), for appellant.

      B. 0. MeMurtrie, for Churchman, appellee.
    6r. W. Biddle (with whom was J. Starr), for Brewster, appellee

      Cf. Biddle and Z. P. Dobson, for other appellees.
    July 2d 1872,
   The opinion of the court was delivered,

by

Sharswood, J.

This bill was filed by the appellant as the assignee of the National Safety Insurance and Trust Company,” against the defendants, who were directors of the corporation, alleging fraudulent, illegal*and improper management of its affairs, extending over a period of more than ten years, from 1850 to 1861. The case upon the bill, answers and proofs was referred to a Master, who reported that the bill should be dismissed and a pro forma decree was entered accordingly.---- '

Upon a careful examination of the record and paper-books, which make up nine hundred and sixty-six printed octavo pages, we have come to the following conclusions of fact, which are supported also by the opinion of the Master. First, That no fraudulent conduct-is imputable to any one of the defendants, at any period of time during their administration of the trust. No pecuniary advantage, to the amount of a dollar, was ever realized or sought by any one of them. There was no embezzlement or misappropriation of the funds by any officer or agent of the corporation. There is no pretence that the defendants are liable to account upon either of these grounds. “ One fact,” says the Master, is quite clear — that none of the defendants have made any profit out of their transactions which was not common to all the stockholders.” Second, That in regard to investments, and the mode of transacting the business — the legality of which under the charter is questioned — the defendants uniformly acted under legal advice. “ U appears in the evidence,” says the report]"athat the defendants always acted upon legal advice, as to the mode of doing business and making investments. No important step was ever taken without first obtaining the advice of the solicitor.” Third, Looking at the history of the institution in the light of subsequent events, its direction was unwise and unfortunate. The money of the depositors was not invested in first-rate and perfectly safe securities, as they engaged to do, and as the funds of such a charity unquestionably ought to be. Loans were largely made upon very doubtful collaterals. Their investments in real estate were injudicious. They lost from a failure to insure. They sought to realize Targe profits at usurious rates of interest. The..crash came in 1860, just before the breaking out of the civil war. All doubtful securities fell in the market. Their debtors went to the wall. In the vain attempt to sustain their credit they sacrificed securities and collaterals. Had they stopped and made an assignment at once, a large amount of the loss which subsequently fell upon them would undoubtedly have been prevented. The story might be much amplified by entering into a detail of particulars: but the conclusion would be the same. Such is a brief resumé of the facts. It is not the history of this institution alone, but of many others in this country.

The broad question then is, whether upon such a state of facts, the directors of a corporation can be made to account for losses arising from mismanagement merely.

~~JA is by no means a well-settled point what is the precise relation which directors sustain to stockholders. They are undoubtedly said in many authorities to be trustees, but that as I apprehend is only in a general sense, as we term an agent or any bailee intrusted with the care and management of the property of another. It is certain that they are not technical trustees. They can only be regarded as mandataries — persons who have gratuitously undertaken to perform certain duties, and who are therefore bound to apply ordinary skill and diligence, but no more. Indeed, as the directors are themselves stockholders, interested as well as all others that the affairs and business of the corporation should be successful, when we ascertain and determine that they have not sought to make any profit not common to all the stockholders, we raise a strong presumption that they have brought to the administration their best judgment and skill. Ought they to be held" responsible for mistakes of judgment or want of skill and knowledge ? They have been requested by their co-stockholders to take their positions, and they have given their services without compensation. We are dealing now with their-responsibility to stockholders, not to outside parties — creditors and depositors. It is unnecessary to consider what the rule may be as to them. Upon a close examination of all the reported cases, although there are many dicta not easily reconcilable, yet I have found no judgment or decree which has held directors to account, except when they have themselves been personally guilty of some fraud on the corporation, or have known and connived at some fraud in others, or where such fraud might have been prevented had they given ordinary attention to their duties. I do not mean to say by any means that their responsibility is limited to these eases, and that there might not exist such'a case of negligence or of acts clearly ultra vires, as would make perfectly honest directors personally liable. But it is evident that gentlemen elected by the stockholders from their own body ought not to be judged by the same strict standard as the agent or trustee of a private estate. Were such a rule applied, no gentlemen of character and responsibility^ would be found willing to accept such places^ The authorities I think fully endorse these views.

The leading case is The Charitable Corporation v. Sutton, 2 Atk. 400, which was treated by Lord Hardwicke as a case of fraud entirely. Five of the managers or committee-men entered into a confederacy to loan out money to their own storekeeper, upon whom was devolved the duty of putting an estimate upon the value of the pledges; the others connived at the fraud. “ It is such a notorious fraud or at least gross inattention,” said the Lord Chancellor, “to suffer him, who.was to set a value on all the pledges, to borrow money upon them himself, that I shall direct those who appear to be guilty of it to make good the loss. Committee-men are most properly agents to those who employ them in the trust and who empower them to direct and superintend the affairs of the corporation. If some persons are guilty of gross .non-attendance and leave the management entirely to others, they may be guilty by this means of the breaches of trust that are committed by others.” So accordingly -in The York & North Midland Railway Company v. Hudson, 16 Beavan 495, the chairman of a railway company appropriated unallotted shares to the use of various persons, whose names he did not mention, in order to secure or reward services which he declined to state, but which it was insinuated was in the nature of “secret service money;” it was held that if the defendant had applied the property of the company in a manner which would not bear the light, he must suffer the consequences, and that being charged with the receipt of the money, he could not discharge himself by the suggestion of such an application. In Williams v. Page, 24 Beavan 661, Sir John Romilly said, in treating a director as a trustee: “ The trust no doubt is a peculiar one.” In Great Luxembourg Railway Co. v. Magnay, 25 Beavan 592, he held that if a director enters into a contract for the company he cannot personally derive any benefit from it. So also in Ex parte Bennett, 18 Beavan 339, directors of a public company are trustees for the shareholders, and their private interests must yield to their public duty wherever they are conflicting. In Turquard v. Marshall, 3 Equity (Law Rep.) 127, which is the last English case on the subject, Lord Romilly, M. R., held directors liable, first, for not calling a meeting of the shareholders under a clause of the charter requiring them to do so, on the exhaustion of their surplus fund, and second, for loaning money to one of themselves without security. He used however this language: that if directors have been guilty of gross and palpable breach of trust, which cannot be set right by a public meeting of the company, they may be made responsible for their misconduct. On appeal, however, the decree of Lord Romilly, holding the directors personally liable, was reversed by Lord Chancellor Hatherley, 5 Chancery Appeals (Law Rep.) 386. He said: “ There was no fraud alleged, nor was it alleged that the directors applied the funds of the company to their own use, or in any way except in what they thought was for the benefit of the company,- however incorrect their course might have been.” Then as to the loan to Higgins (the co-director): “ The statement of this in the bill was only as part of the general misconduct of the directors, and the loan was only mentioned as one of the losses incurred. There was no specific allegation of any impropriety in lending the money to him, nor was any specific relief prayed in this respect. It was within the powers of the deed to lend to a brother director, and however foolish the loan might have been, so long as it was within the powers of the directors, the court could not interfere and make them liable.' They were intrusted with full powers of lending the money, and it was part of the business of the concern to trust people with money, and their trusting to an undue extent was not a matter with which they could be fixed, unless there was something more alleged, as, for instance, that it was done fraudulently and improperly and not merely by a default of judgment. Whatever' may have been the amount lent to any- j. body, however ridiculous and absurd their conduct might seem, it J was the misfortune of the company that they chose such unwise ¡ directors; but as long as they kept within the powers of their' deed, the court could not interfere with the discretion exercised; by them.”

To pass now from the English to the American cases: Koehler v. The Black River Falls Iron Co., 2 Black S. C. 715, was a case of fraud. Mr. Justice Davis said: “ Instead of honestly endeavoring to effect a loan of money advantageously for the benefit of the corporation, these directors, in violation of their duty and in betrayal of their trust, secured their own debts to the injury of the stockholders and creditors. Directors cannot thus deal with the important interests intrusted to their management. They hold a place of trust, and by accepting the trust are obliged to execute it with fidelity, not for their own benefit, but for the common benefit of the stockholders of the corporation.” In Scott v. Depeyster, 1 Edw. Ch. Rep. 513, the object of the bill was to make the directors liable for money embezzled by their secretary on the ground of their negligence. So, Robinson v. Smith, 3 Paige 222, the bill alleged that the directors had engaged in a gambling speculation in stocks, wholly unauthorized by the charter, which was carried on to subserve their own individual interests and purposes. On demurrer to the bill, it was of course held that the directors of a corporation, who wilfully abuse their trust or misapply the funds of the company by which a loss is sustained, are personally liable as trustees to make good that loss, and they are also liable if they suffer the corporate funds to be lost or wasted by gross negligence and inattention to the duties of their trust. In the same category is Taylor v. Miami Exporting Company, 5 Hammond (Ohio) 162; Verplanck v. Mercantile Insurance Co., 1 Edw. Ch. Rep. 84; Bank of St. Mary v. St. John, 25 Alab. N. S. 566; Butts v. Wood, 38 Barb. 181; s. c. 37 New York 317. In The Franklin Fire Insurance Co. v. Jenkins, 3 Wend. 130, which was an action on the case in which the declaration alleged against directors “want of care and attention,” and also corrupt and wilful mismanagment,” a demurrer was sustained Sutherland, J., remarking: “These are very different allegations and require distinct and different answers.” Lexington & Ohio Railroad Co. v. Bridge, 7 B. Monroe 556, was a bill by creditors against directors for making a dividend when no profits existed. “We are satisfied,” say the court, “that if they were guilty of negligence to any extent it is not of that gross and palpable character that would render their conduct so reprehensible as to subject them to the imputation of a personal or even a legal fraud.” In Godbold v. Branch Bank at Mobile, 11 Alab. 191, it was decided that the directors of a bank are not responsible for an injury to the bank caused by their act, originating in an error of judgment, unless the act be so grossly wrong as to warrant the imputation of fraud or the want of the necessary knowledge for the performance of the duty assumed by them on accepting the agency. In Hodges v. New England Screw Company, 1 Rhode Island 312, in dismissing the bill, Greene, C. J., observed : “ It does not appear that the directors sought or secured to themselves any benefit or advantages which was not common to all the other stockholders of the Screw Company.” See also Neall v. Hill, 16 California 145.

It seems unnecessary to pursue this investigation any further. These citations, -which might be multiplied, establish, as it seems to me, that while directors are personally responsible to the stockholders for any losses resulting from fraud, embezzlement or wilful misconduct or breach of trust for their own benefit and not for the benefit of the stockholders, for gross inattention and negligence by which such fraud or misconduct has been perpetrated by agents, officers or co-directors, yet they are not liable for mistakes of judgment, even though they may be so gross as to appear to us absurd and ridiculous, provided they are honest and provided they are fairly within the scope of the powers and discretion confided to the managing body.

In regard to the question last adverted to, whether the defendants should be held responsible for any of their acts and investments as ultra vires, it might be sufficient to notice the fact that the charter of this corporation was a very complicated one, made up by comparing together no less than sixteen different acts of incorporation or supplements/!; The ingenuity of the young gentlemen of counsel for the defendants has been exercised in presenting to the court a genealogical map or pedigree, tracing the Acts of Assembly, from one to another. To have mistaken the extent of their powers under such circumstances would not have been matter of surprise even in the most timid and cautious. We may adopt upon this point the language of C. J. Greene in Hodges v. New England Screw Co., 1 Rhode Island 312. “ In considering the question of the personal responsibility of the directors we shall assume that they violated the charter of the Screw Company. The question then will be, was such violation the result of mistake as to their powers, and if so did they fall into the mistake from want of proper care, such care as a man of ordinary prudence practises in his own affairs. For, if the mistake be such as with proper care might have been avoided, they ought to be liable. If, on the other hand, the mistake be such as the directors might well make, notwithstanding the exercise of proper care, and if they acted' in good faith and for the .benefit of the Screw Company, they ought not to be liable.” J'We may say in this case, conceding that the directors did violate the charter, it was a question upon which with all due care they might have made an honesty mistake ; and moreover, it appears by the evidence, and is' so re-1 ported, that they acted throughout by the advice of their counsel. It is well settled that trustees Will be protected from responsibility ¡ under such circumstances: Lewin on Trusts 595; Vez v. Emery, 5 Ves. 141; Calhoun’s Estate, 6 Watts 189.

The view which we have thus taken of the facts and the principles of law applicable to them, renders it unnecessary to consider whether there is anything in the case of the defendant Brewster to distinguish his liability from that of the others. It also dispenses with the necessity of discussing the operation of the bar of the Statute of Limitations, except in the cases of the defendants Churchman and Smith, who having raised their defence by demurrer the bill was separately dismissed as to them. Upon the point as made in their case, each_ of them having entirely ceased to be a director, more than six years before the bill was originally file.dj we entirely concur in the opinion of the Chief Justice in Churchman’s case.

Decree affirmed, and appeal dismissed at the costs of the estate in the hands of the appellants.


author: Williams, J.

text:
    Speakman’s Appeal. Morton’s Estate.
    1. An auditor’s finding, if not supported by evidence, will be set aside or disregarded, but like a verdict, must stand unless clearly against the weight of evidence.
    2. A widow, administratrix of her husband, married soon after his death; she made a contract for purchase of land for the second husband, to whom it was conveyed, she alleging the purchase-money belonged to him ; there was no positive evidence that it belonged to the decedent; the auditor found it did not belong to him: Held, that the administratrix was not chargeable with the money.
    3. Prior to 1848 the wife’s father gave her $25, with which she purchased fowls and materials for sewing; by sale of fowls, her labor on the materials and other work she accumulated money : Held, that the $25 and accumulations belonged to the decedent’s estate.
    4. She did not enter this money in the inventory or administration account, claiming it as her own: Held, not to be fraud, so as to prevent her from receiving $300 exemption.
    5. The money was in gold; she was chargeable with its premium and $300 exemption was payable in currency.
    6. The costs under all the circumstances in this case imposed on the accountant.
    February 7th 1872.
    Before Agnew, Siiarswood and Williams, JJ. Thompson, C. J., at Nisi Prius.
    Appeal from the decree of the Orphans’ Court of Philadelphia: No. 271, to January Term 1871. In the estate of Lewis Morton, deceased. The decedent died June 8th 1863, leaving a widow and mother to survive him, but no children. Administration of his estate was granted to his widow, Margaret Morton; within thirty days she filed an inventory, amounting to $287.50. In the same month she sold the personal property; the vendue list, which, was not filed, amounted to $439.20. In April 1864 the widow married William Knorr.
    The mother of the decedent died in September 1865, and administration of her estate was granted to Thomas H. Speakman, the appellant in the case.
    In answer to a citation the administratrix of Lewis Morton filed an account of her administration, November 14th 1867. She charged herself with the amount of the inventory only; the account showed a balance of $37.50 in her favor. Exceptions were filed to the account by the administrator of the mother. It was referred to an auditor. After his report, an issue was directed to the Common Pleas to ascertain certain facts. The jury found in favor of the administratrix. The court awarded a new trial; this trial was waived by the parties and the whole matter referred to D. W. Sellers, Esq., as auditor.
    He stated in his report that the administrator of the mother of decedent asked a surcharge, viz.:
    1. The value of gold claimed by the widow to be hers, $400. 2. The value of gold claimed to be the property of William Knorr, the present husband, $700. 3. The value of the personal estate (as well that in the inventory as some not included), which is thought to be established as of the value of $1000.
    He reported that the $400 in gold had been obtained from the personal labor of the administratrix, during the life of the decedent, her husband, by “sewing and raising chickens and eggs, * * and washing.” The decedent was a man of intemperate habits; so much so, that on some occasions she had to go to his slaughterhouse and kill sheep for him. Her husband had become so improvident that in 1841 her father gave her $25, with which she bought turkeys and chickens and raised them, and also bought remnants of calico, which she made into quilts and sold the quilts. The gold was neither in the inventory nor the account. These things being the earnings of the wife, the auditor was of opinion that the gold, their proceeds, belonged to the estate of the husband, except the $25 received from her father. The' auditor was further of 'opinion that under the exemption laws the widow could retain “$300, in gold dollars, by the count.”
    He decided that notwithstanding the administratrix had not introduced the gold into the inventory or account, she should not therefore be deprived of her $300. “ These omissions were, however, for the reason that she considered it as her own. She had earned it. No money coming from her husband was a part of it. She might well be pardoned the error of belief which she entertained. As there were no creditors she could have contemplated no fraud on them, still less could she have supposed that the mother of her husband would have contested her right to these earnings. Few would have done so.”
    The auditor allowed her the $25 received from her-father and charged her with $75 in gold at $2.60, the price at which she sold it, with interest from October 1864, the time of the sale.
    On the second head the auditor reported :
    “ On this head, I find no evidence that the gold first known to be in the possession of the second husband was that of the first. The decedent, according to the weight of the testimony, was an unthrift, and in the latter years of his life wholly without the habits which acquire or save. Without the frugality and commendable industry of his wife, I cannot see but that his life towards the close would have been one of squalor and penury. She did all the work. - In the garden, the slaughter-house, behind the bar, with the needle, and at the wash-tub; often after the labors of the day should have been over, had her domestic duty to be performed.
    “ It is nothing to the purpose that we do not know where the present husband got the money. We have no legal right to inquire. * * * On the day appointed for the argument, the counsel asking the surcharge said he would make no objection to his examination, but he was not then present, and the counsel for the administratrix might well hold that it was unnecessary, as no evidence in any way tended to show that any of the money belonged to the estate of the dead.”
    On the third head the auditor reported:

      “ I find no controlling evidence, that the value of the property was different from that at which it was appraised, except -that at a sale of a greater part of it in September the sum of $815 above expenses was realized. * * * If the mother, when the appraisement and inventory were filed, had then doubts of its -integrity, she had time before the sale in September to have prepared herself to support this surcharge. She has not done so, and I cannot supply the omission. * * *
    “ The black mare and colt, appraised at $50, were sold at $70. I surcharge the $20, with interest from September 1st 1868, as it was sold before the sale.
    “ In this case the accountant did not file in the office of the register a just and true account of the articles sold at public auction, and the prices and purchasers thereof, as required by § 11, Act of February 24th 1834, Pamph. L. 74. Here then was a sale, and there was a vendue list made out. If this list had been produced before, much of this litigation might have been avoided, and as the same has always been in the possession of the accountant, the expense of this reference must be borne by her. I shall disallow the commissions, because she did not surcharge herself with the amount realized from the sale, as she ought to have done.
    “ As much of the litigation on this account has arisen in the effort to surcharge to an amount largely unjust, I allow H. M. Dechert, Esq., $50 for professional services.
    The following is the adjustment of the account:
    Appraisement, . . . . $237.50
    Realized at public sale, in excess, . . 77.50
    Sale of mare and colt, . . . . 20.00
    $335.00
    Interest from September 1st 1863 to June 1st
    1870,...... 134.00
    - $469.00
    Surcharge of $75 in gold, at premium of $2.60, $270.00
    Interest from Oct. 1st 1864 to June 1st 1870, 91.80
    -^ 361.80
    $830.80
    The credit allowed by the former auditor, with the deduction of commissions, . . $251.06
    Interest from Sept. 1st 1863 to June, . . 100.40
    Expenses of the former audit, . . 125.62
    H. M. Dechert, Esq., .... 50.00
    - 527.08
    Net balance for distribution, .... $303.72
    Awarded to Thomas H. Speakman, Esq., administrator of Margaret Morton, . . $151.86
    Margaret Knorr, wife of Wm. Knorr, the sum of 151.86
    Expenses of reference:
    Clerk of Orphans’ Court, '. . . . $10.00
    Auditor, ..... . . 120.00
    $130.00
    Exceptions to the report of the auditor, in the Orphans.’ Court were “ dismissed, except as to so much as applies to the allowance to the widow of $300, with the premium of 260 per cent. The allowance should have been for $300, less the premium.”
    The administrator of the mother appealed to the Supreme Court.
    The errors assigned were the decree of the court confirming the report of the auditor, with the exceptions stated in it.

      T. IT. Speakman, appellant, p. p.

      H. M. Deehert, for appellee.

      February 26th 1872,
   The opinion of the court was delivered, by

Williams, J.

Unquestionably the finding of an auditor, if not supported by the evidence, may be set aside or disregarded by the court; but like the verdict of a jury it should be allowed to stand, unless it is clearly against the weight of the evidence. In this case the auditor found that the administratrix is not chargeable with the proceeds of the seven hundred dollars in gold which she paid to James Miller, in part consideration of the property purchased of him in October 1864, and which is alleged to have belonged to her present' husband, to whom the property was conveyed. The appellant complains of the auditor’s finding in this respect, but we fail to discover any sufficient evidence to justify us in ■ setting it aside, and charging the administratrix with the proceeds of the gold in question. There is no positive evidence that the money belonged to her deceased husband. It was not shown to have been in his possession at any time during his life, nor in the possession of the administratrix until some months after his death. How then can we say that the auditor erred in not finding that it was the decedent’s money, in the face of the positive testimony of the administratrix that it belonged to her p'resent husband and that she received it from him after their marriage ? The question is not whether the evidence leaves any doubt as to his ownership, but whether it shows with reasonable certainty that it belonged to the decedent. We think it does not, and the finding of the auditor must, therefore, be allowed to stand.

The auditor rightly decided that the earnings of the wife belonged to the husband, but he should also have charged the administratrix with the money received from her father in 1841. If it was a gift from her father, as alleged, then, as soon as it was received by the wife, it became the absolute property of the husband, without any act on his part, unless he waived or relinquished his right to it, of which there is no evidence. The administratrix is therefore bound to account for the proceeds of the gold derived from her own earnings and the gift of her father. But she is entitled to retain three hundred dollars out of the proceeds, unless, as the appellant contends, she is estopped by having fraudulently claimed the money as her own. It does not follow that she was guilty of intentional fraud in claiming the money. She may honestly have supposed, as it was the product of her earnings and the gift of her father, that she was entitled to it in her own right, and was not liable to account for it as the property of her husband. And this we think is the reasonable presumption from the evidence. Claiming the money as her own, under the circumstances of this case, is not in itself such evidence of fraud as should prevent the administratrix from retaining the amount allowed by the exemption acts. But we discover no sufficient reason for allowing the administratrix credit for the expenses of the former audit, and a fee of fifty dollars to her counsel for professional services; and these items must, therefore, he stricken out of the account. The administratrix, as the auditor has found, sold a part of the personal estate at public vendue, but she did not file in the office of the register a just and true account of the articles sold and the prices and purchasers thereof, as required by the Act of 1834; nor did she charge herself with the amount realized from the sale of the property in excess of its appraised value. Having thus failed in the performance of her duty, and having presented an account of her administration of the estate, which she must have known to be incorrect, she is not entitled to an allowance for any of the expenses incurred by the audit.

Correcting the account in accordance with the foregoing opinion and adding interest to date, the balance for distribution in the hands of the administratrix is shown by the annexed statement to be twelve hundred and ten dollars and three cents ($1210.03), and for this amount the decree must be entered.

And now February 26th 1872, the decree of the Orphans’ court is reversed and modified in accordance with the statement hereto annexed, exhibiting a balance of twelve hundred and ten dollars and three cents ($1210.03), at which sum the account is finally confirmed : and the said balance is ordered to be distributed according to law. And it is further ordered that all the costs be paid by the appellee.

Hr.

Amount of appraisement and amount realized at public sale in excess, as per report of auditor, ...... $335.00

Int. from Sept. 1st 1863 to Feb. 24th 1872, 170.51

_ $505.51

Surcharge of $400 in gold sold at $2.60, $1040.00

Deduct amount allowed administratrix under exemption act,..... 300.00

$740.00

Int. from Oct. 1st 1864 to Feb. 24th 1872, 343.36

- 1083.36

$1588.87

Or.

Amount allowed by auditor, less commissions, $251.06

Int. from Sept. 1st 1863 to Feb. 24th 1872, 127.78

378.84

Balance,........$1210.30