author: Mr. Justice Paxson

text:
    Pearson versus Carter.
    In a feigned issue, under the Sheriff’s Interpleader Act, it appeared that the claimant was employed by the defendant in the execution, which was á fishing company ; that he was charged with the care of the grounds and performed various offices for the members; that he w*is compensated therefor by an annual salary and the use of the farm attached to the club-house, and that the property claimed by him, which consisted of farming utensils, &c., was purchased by him at' full price, and had been used by him on the farm in the same manner after the sale to him as before: Held, reversing the court below, that the question whether there was such a change of possession, as the nature and oircuinstances of the case admitted of, should have been submitted to the jury together with the relation of the parties.
    March 24th 1880.
    Before Sharswood, C. J., Merctjr, Gor-
    don, Paxson, Trunkby, Sterrett and Green, JJ.
    Error to the Court of Common Pleas of Delaware county: Of January Term 1879, No. 228.
    Feigned issue under the Sheriffs’ Interpleader Act, wherein Frank Pearson was plaintiff, and Paul B. Carter, defendant.
    The facts were these: Carter having a judgment against the Tinicum Fishing Company, levied upon the following personal property which he found on the farm of the company, viz.:
    * Sorrel horse, Brown horse, Black horse.
    Three horses, $90. $50. $40. $180.00
    *One cart, ....... 40.00
    *One dearborn, pole and shafts, 80.00
    One light carriage, ...... 85.00
    One lot of harness, ...... 25.00
    One sleigh, . . . ' . 40.00
    *One wheelbairrow, ....... 4.00
    *One grindstone, ...... . 3.00
    *Two ploughs, $7 and $3, . . . ... 10.00
    One cow, ........ 40.00
    Two pigs,......! 12.00

      Lot of chickens, 12.00
    Lot of ducks, . 4.00
    Lot of ice in ice house, 25.00
    Lot of shovels, forks, &c., 2.00
    $562.00
    When the levy was made Pearson claimed that the above property belonged to him.
    At the trial he testified that he lived on the farm of the company to take care of the house and grounds; that the company paid him $400 per year, and gave him the use of the farm ; that his duties were to keep the club house and the lawn clean ; to go to the railroad station for the members when they visited the club house, and to wash the table-linen and dishes at the club house, and wait upon the members. He further testified that in 1877 he purchased all the articles in the above list marked with an asterisk from the treasurer of the company, paying cash therefor, and for which the witness produced receipts. The remaining articles he testified had been purchased from other persons at different times, and had never belonged to the company.
    The plaintiff submitted, inter alia, the following points, to which are appended the answers of the court:
    1. If the jury believe there was a bona fide sale of the sorrel horse, dearborn, pole and shafts, and the cart, and such a delivery of possession or other overt change of ownership, as the nature of the property and the circumstances of the case admitted of, their verdict must be for the plaintiff for these articles.
    Ans. “ There must have been some visible change of possession. The purchaser being a servant of the vendor could not acquire a lawful title as against a creditor without a change of possession.”
    2. The fishing company had the right to sell and deliver possession of their personal property at any time before actual levy by the sheriff, if not done to defraud creditors.
    Ans. “ They had such a right in the usual course of business, but they could not sell to a servant without an open change of possession as against a creditor.”
    In the general charge the court, Clayton, P. J., inter alia, said:
    “The poliey of'the law does not permit a person in embarrassed circumstances to sell his goods to his servant and then continue to employ the servant just as before the sale, without such a change of possession as to give full notice to creditors. If the claimant, however, bought the goods to make himself safe in his title to them, he should have removed them from the company’s grounds and completely from their control. [There is not sufficient evidence of a change of possession as to one horse, one cart, one dearborn, one wheelbarrow, grindstone and two ploughs. For these articles the verdict ought to he for the defendant.] As to the other "articles the verdict ought, in the opinion of the court, under the weight of the evidence, to be for the plaintiff. But the question of actual fraud is left with the jury. If you are satisfied there was no such fraud you should find for the plaintiff for the articles purchased from other persons than the company or its agents.
    Verdict for defendant for the articles marked with an asterisk, and for plaintiff for the rest. After judgment thereon plaintiff took this writ, alleging, inter alia, that the court erred in the answers to the above points and the portion of the charge included in brackets:

      George B. Lindsay and Wayne Mac Veagh, for plaintiff in error.
    Property already in possession of a purchaser cannot he delivered to him after the sale, and it is decided that where the subject of a sale is not capable of actual delivery a constructive delivery is sufficient; the question is, did the vendor do all he might reasonably be expected to do in the case of a real and honest sale ? McKibbin v. Martin, 14 P. F. Smith 352; Sheldon v. Sharpless, 2 W. N. C. 811.
    What the relation of Pearson to the company was should have been submitted to the jury, and the court ought not to have said he was a mere servant. As to the land he was a tenant, and the only one in possession. There was nothing in the relations of the parties which forbade him buying as he did. Under the circumstances this was the only change of possession of which the case admitted, which is all the rule of law requires. Here everything indicated ownership in Pearson. He held out to the world the sign that he was the farmer and owned everything on the premises. The owner of the fee was an invisible corporation, the only evidence of whose existence was the records of its creation and occasional trips of the members to their club house in Tinicum. It is not the case of a man, who is owner and possessor of chattels, parting with the title and retaining possession; hut it is a case where the possessor, with' all the indicia of ownership about him, completes his title by purchasing a latent interest of his landlord, which the world had no right to suppose ever existed.
    P. B. Carter and Aaron Thompson, for defendant in error.—
    For more than half a century it has been an established principle of law that the possession of chattels must accompany and follow the transfer of them. There may be no actual fraud in such transfer, and still it is fraudulent as against creditors. The leading case is that of Clow et al. v. Woods, 5 S. & R. 275. The same doctrine has been uniformly carried through our state reports, till the decisions embrace every possible attempt of insolvent debtors to part with chattels, retaining the possession without visible change of ownership. If in such cases the vendor of chattels retain possession, it is a fraud per se as to creditors. In this case there was no semblance of delivery to or an attempt to take the possession or exercise the rights of ownership on the part of the plaintiff. Nor is there in the cases of McKibbin v. Martin, and Sheldon v. Sharpless, cited by the learned counsel, the slightest variation from the settled principle laid down in Clow v. Woods.
    May 3d 1880.
   Mr. Justice Paxson

delivered the opinion of the court,

This was a feigned issue under the Sheriff’s Interpleader Act, and the only question is whether there was a sufficient change of possession of the articles of personal property sold by the Tinicum Fishing Company to the plaintiff. The court was asked to instruct the jury (see 1st assignment) that, “if the jury believe there was a bona fide sale of the sorrel horse, dearborn, pole and shafts, and the cart, and such a delivery of possession or other overt change of ownership as the nature of the property and the circumstances of the case admitted of, their verdict must be for the plaintiff for these articles.” The learned judge answered this point as follows: “ There must have been some visible change of possession. The purchaser being a servant of the vendor, could not acquire a lawful title as against a creditor without a change of possession.” The learned judge further instructed the jury (see 4th assignment): “ There is not sufficient evidence of a change of possession as to one horse, one cart, one dearborn, wheelbarrow, grindstone and two ploughs. For these articles the verdict ought to be for the defendant.” The learned judge based his ruling principally upon the fact that the plaintiff was a servant of the fishing company, the vendor, and therefore he could not acquire title without an open and visible change of possession. This was withdrawing from the jury the question of the relations between the parties. While it is perhaps true that the plaintiff was in a certain sense a servant, he was not so in the broad meaning of the term. He was employed to take charge of the fish house, at a salary of $400 per year. In addition he had the use of the farm ; this involved possession of some sort. So far as the land is concerned, it involved a possession of which he could not be deprived arbitrarily, but only in accordance with rules affecting landlord and tenant. Having a right to seed the land, he had a right to remain and gather the harvest; he was also in the ostensible possession of the property of the company. The latter was a corporation, and its members only visited the place occasionally. The plaintiff having purchased bona fide, for aught that appears, the personal property in question, what change of possession was necessary, or even possible ? The articles were in the actual possession of the plaintiff at the time of the sale; the company had the constructive possession; the plaintiff if a servant had rights upon the premises. This is not the case precisely of a sale by a party who has the indicia of ownership, and who makes no delivery of possession. The indicia of ownership for all practical purposes was in the vendee.

The question whether there was such a change of possession as the nature and circumstances of the case admitted of should have been submitted to the jury, in connection with the relations of the parties ; the plaintiff’s first point should have been affirmed. There is abundant authority for this. It is sufficient to refer to McKibbin v. Martin, 14 P. F. Smith 352. Later cases affirm the same doctrine.

The judgment is reversed, and a venire facias de novo awarded.


source: Caselaw Access Project

author: Mr. Justice Gordon

license: Public Domain

text:
    Eby et al. versus Guest.
    1. The assignment of the stock of a corporation to itself, as collateral security for a loan, divests the title of the assignor so far as to prevent a sale of it under a fieri facias against him. In such case execution must be by attachment, under the Act of 1836.
    2. Before an attachment of stock, standing in the name of another, can be made under the provisions of the 32d section of the Act of 1836, it is necessary that the affidavit and recognisance required by the act should be previously filed, and if these conditions are not complied with, the writ is void.
    3. An attachment issued against stock of a building association, standing in the name of the defendant, but which had been assigned to the association as collateral security. No affidavit nor recognisance were filed, as required by the Act of 1836. A third party intervened and claimed the stock, but he likewise did not file the affidavit and recognisance. At his instance, the writ was quashed : Held, that the writ had been improperly issued: Held, further, that while the claim of the intervening party was not made in conformity with the requirements of the act, yet the attachment being improper, the court below must be affirmed.
    4. Where neither party has any standing in this court, the court below will be affirmed.
    March 24th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey, Sterrett and Green, JJ.
    Error to the Court of Common Pleas of Montgomery county: Of January Term 1880, No. 286.
    The proceedings in the court below were as follows: Eby & Co., having a judgment against John B. Guest, issued an attachment against the Enterprise Building and Loan Association, garnishee. The latter answered that Guest was the owner of seven shares of the stock of said association, but that it had been tranferred to the association as collateral security for loans made to Guest by the association, and that the stock stood in the latter’s name. A motion for judgment was made, when Edward Guest intervened, and alleged that he was the owner of the stock; and further moved the court for a rule upon said plaintiffs to show cause why said attachment of said stock should not be dissolved and writ quashed, because the plaintiffs have not filed the affidavit and recognisance required by the Act of 16th of June 1836, sect. 32, in case of stock standing in the name of another than the real owner.
    The material portions of the Act of 1836 are as follows :

      “ The proceedings to levy an execution upon stocks, debts and deposits of money belonging or due to the defendant shall be as follows, to wit: In the case of stock, if it shall be held in another name than that of the real owner thereof, the plaintiff shall file in the office of the prothonotary of the court an affidavit, stating that he verily believes such stock to be really the property of the defendant, and shall enter into a recognisance, with two sufficient sureties conditioned for the payment of such damages as the court may adjudge to the party to whom such stock shall really belong, in case such stock should not be the property of the defendant.”
    “ And if any person_ shall claim to be owner of such stock, upon filing an affidavit that the stock is really his property, and entering into a recognisance, with two sufficient sureties conditioned for the payment of such damages as the court may adjudge to the plaintiffs, if such stock should really belong to the defendant, the court shall admit him to become a party 'upon the record, and take defence in like manner as if he were made garnishee in the writ.”
    Neither Eby & Co. nor Edward Guest had filed the affidavit and recognisance as required by the act. The court granted the rule to dissolve applied for by Edward Guest. The plaintiffs then asked leave to file the affidavit and recognisance, which the court refused, and made the rule absolute. This action was assigned for error by plaintiffs, who took this writ.

      Theo. W. Bean, for plaintiffs in error.
    It is contended that the 32d section of the Act of 1836 does not apply to the case at bar, or to any case where the stock of a building and loan association is held as collateral security for loans secured by bond and mortgage on real estate. An assignment of stock as collateral security does not change the ownership of it, and as in this case, it always remains on the stock books in the name of the assignor or real owner, and to whose account all payments for dues, &c., are duly credited. In this case the stock is' in the name of John B. Guest, the defendant, on the books of the association. All payments of monthly dues are credited to him, and therefore no question arises-as to whether the stock belongs to him or some one else. But Edward Guest had no standing in court, because he did not comply with the 34th section of the act. 'He did not make an affidajv.it,. nor file a recognisance as required by the act.

      May 3d 1880.

      M. D. Pvans, for garnishees. J. PL. Hobart and H. K. Weand, for the Guests.
    The stock was clearly held in another name, to wit, that of the association. It had been formally assigned to them, and whether absolutely or as collateral, it was still not standing in the name of defendant. It was temporarily at least the property of the association, and because the old certificate was not surrendered and a new one taken out cannot alter the case: Early & Lane’s Appeal, 8 Norris 411; Mulford v. Weisegerber, 3 Luz. Leg. Reg. 99. John B. Guest was not the real owner of the stock; he could only have sold it subject to the rights of the association, and the plaintiffs could not have reached it by fi. fa. It was, therefore, one of the cases contemplated by the 32d section of Act of June 16th 1836. The process was, therefore, issued contrary t'o the terms of the act, and as the plaintiff had neglected to do that without which the prothonotary could not lawfully issue the writ, the court below very properly quashed the proceedings.
   Mr. Justice Gordon

delivered the opinion of the court,

By the second section of the Act of 29th of March 1819, the stock of a corporation, owned by any individual or body corporate, in his or its own name, was made subject to execution as ordinary goods and chattels. The third section of this same act made provision for the attachment of such stock where it was held in the name of another than the real owner. Under this section, where the plaintiff filed the required affidavit, and entered into a recognisance, with two sufficient sureties, conditioned for the payment of such damages as the court or magistrate might adjudge to the party or parties to whom the stock might, in the end, prove to belong, then and in that case process, in the nature of a foreign attachment, might issue to attach such stock. Then came the Act of 1836, which provided; in like manner, where stock was held in the name of any other than the true owner, for the filing of an affidavit and the giving of approved security, and, by the 33d section, it was further provided, that, upon the filing of such affidavit and recognisance, it should be lawful for the prothonotary to issue process, in the nature of an attachment, against such stock, with a clause of summons, &c. It is obvious, that the security required by both these acts was intended for the protection of the persons, natural or artificial, in whose name or names the stock might be held; in this they were alik'e. But the Act of 1836 differs from the Act of 1819 in this., that by the latter the writ issued as a judicial act: “ It shall and may be lawful for such court, alderman or magistrate, to cause to be issued process in the nature of a foreign attachment;” whilst in the former the act is ministerial: •“ Upon the filing of such an affidavit and recognisance, it shall be lawful for the prothonotary to issue process in the nature of an attachment.” Hence, the power .oí the officer depends upon the existence of the prescribed conditions; unless the affidavit and recognisance have been previously filed, the issuing by him of the writ is void for want of power. But the case in hand is just such a case. The attached stock was held as collateral security by the Enterprise Saving, Loan and Building Association of Pottstown, and, hence, in its name. As was held in Early & Lane’s Appeal, 8 Norris 411, the assignment of the stock of a corporation to itself, as collateral security for a loan, divests the title of the assignor so far as to prevent a sale of it under a fi. fa. against the assignor. The case in hand, falling, as it does, within the 32d and 33d sections of the Act of June 16th 1836, and the attachment having issued without the filing of the required affidavit and recognisance, this writ is ineffective and void. But it is said, that Edward B. Guest, who claims to have some interest in this stock, and at whose instance the writ was quashed, had no standing to intervene, as he did not comply with the requirements of the statute. This is true; but we do not see how it can help the plaintiff in error. There is no doubt about the rectitude of the judgment of the court below; hence, we cannot reverse. The case may be regarded as one involving a demurrer to a plea, where an examination must he had of all the pleadings, and judgment given to the one who shall appear to have the right on the whole case. The plea may be bad, and hence demurrable, but if the declaration is found to be bad also, though there be no demurrer to it, yet must the defendant have judgment. Just so here; we find that neither the plaintiff nor defendant in error has any standing in this court, and so, neither can be heard to complain of the action of the court below.

Judgment affirmed.


author: Per Curiam.

text:
    Delaware County Institute of Science versus Delaware County.
    An instituteof science whose object is the “ promotion and diffusion of general and scientific knowledge among the community at large, and the establishment and maintenance of a library and museum,” but the benefits of which are restricted to members, except upon conditions prescribed by a board of managers, is not a “ purely public charity,” within the meaning of the Constitution, and is not, therefore, as such, exempt from taxation.
    March 24th 1880.
    Before Sharswood, O. J., Mercur, Gordon, Paxson, Trunkey, Sterrett .and Green, JJ.
    Error to the Court of Common Pleas of Delaware county : Of January Term 1880, No. 29.
    Amicable action in the form of a case stated, wherein the county of Delaware was plaintiff, and the Delaware County Institute of Science, defendant, to recover a county tax assessed and levied on the real estate of the defendant in the borough of Media, for the year 1878.
    It was agreed that a trial by jury should be dispensed with, and the case submitted to the court under the provisions of the Act of April 22d 1874.
    The decision of the court, Clayton, P. J., was as follows:
    “From the admissions of counsel and the evidence in the case, the following facts are found: The defendant is a corporation, duly charted by authority of the state of Pennsylvania. The object of the corporation, as declared in its constitution and by-laws, is to promote the difíusion of general and scientific keowledge among its members and the community at large; and the establishment and maintenance of a library, an historical record and a museum. The institute consists of members and correspondents. Members are admitted, after being proposed by two members at a previous meeting, by a vote of not less than three-fourths of the members present. No person shall be entitled to membership until he has signed the constitution and paid the initiation fee. The right to vote and hold office is confined exclusively to the members. Candidates for membership are voted for by secret ballots of white and black balls. The library is under the general charge of a standing committee. The committee has power, with the approval of the institute, to make rules for the regulation of the library and use of the books. Any person, not under fifteen years of age, approved by the library committee, may become a member of the library for life by the payment of the sum of $50. Such person may become an annual member by the payment of the yearly sum. of $3 in advance. Membership in the library does not entitle the person to membership in the corporation, nor confer upon him any of the rights of a corporator. Members of the institute are entitled to life membership in the library by the payment of $20, and to annual membership on the payment of the yearly sum of $2 in advance.

      “ The library committee may permit persons not members to use the library on such terms as they may prescribe, and shall' issue tickets of admission to all persons entitled to use the library. No person is entitled to enter the library or read the books without such ticket, except members of the institute, and no person shall receive such ticket who has not paid all fees, fines, &c. Those persons who were members previous to October 5th 1872, are not subject to any restrictions or conditions as to the use of the library. No person, not a member, can have the use of the library without the payment of the annual sum of $3.

      “ The corporation owns by deed in fee-simple, free from all trusts or limitations, a lot of ground and the institute buildings thereon erected; situate on the east side of South avenue, in the borough of Media, upon which a county tax of $17.50 was regularly assessed for the year 1878. Parts of the building are rented for purposes other than those of the institute, but the revenues are applied to corporate uses, such as the supply of the library, museum, repairs, &c. All donations to the institute have been absolute and without direction as to their use or application. The present membership is about two hundred.
    “ The above are all the material facts in the ease.
    “ The question is, whether under the constitution and laws of the state, the lands of the corporation are exempt from taxation ? The solution of this question depends upon the nature and character of the corporate object of the institution. If its object is the performance of a purely public charity, it is exempt from taxation; if not, no matter how meritorious or charitable its purposes, it 'must, like other owners of real estate, bear its share of the public burden of taxation.
    “ It is undoubtedly a charity, and to a large extent a public charity; but,' from the evidence before me, I cannot find it to be a purely public charity. As was decided by this court in the case of The Burd Orphan Asylum v. The School District of Upper Darby, 9 Norris 21, the Act of 1874, must be read in connection with the state Constitution, and the institutions named in that act must be construed to mean such as are founded and maintained as purely public charities, as contra-distinguished from private or partially public ones. The society of Masons, Odd Fellows, and kindred associations are undoubtedly charities, but not purely public ones, and, therefore, their real estate is not exempt from taxation. The society of Odd Fellows is not much, if any, less exclusive than The Delaware County Institute of Science. Its members are elected in the same way, and its funds are collected upon a very similar plan. The chief benefit of each is confined to its own members, and is not disseminated over the general public. The test of all public charities is their extensiveness. If the general benefits of a charity are subject to private preferences or conditions by which a large proportion of the general public will probably be excluded, it is a private charity, and therefore, not within the protection of the Act of Assembly. See School District v. Burd’s Orphan Asylum. The Philadelphia Library Co. v. Donohugh, 5 Norris 306, is the case chiefly relied upon by the defendant’s counsel.. A careful study of the opinion of Judge Mitchell, upon which the judgment was affirmed in the court above, will exhibit several marked differences in the facts, as compared with the case now under consideration. In that case the organic law required the librarian to permit ‘ any civil gentleman to peruse the books of the library in the library room.’ ‘ The books are to be used by all persons within the building, free of charge or fee of any kind.’ ‘ They can be taken out by any person, who is willing tp pay a small hire and leave a deposit, equal to the value of the book as security for its return. The library is free to all persons who wish to commute or pay an annual sum instead of a separate hire.’ In the Delaware County Institute nothing of the kind can be done, except by grace. In the Phila. Library Case, the court below says: 1 The essential feature of a public use is that it is not confined to privileged. individuals but is open to the indefinite public. It is this indefinite or unrestricted quality that gives it its public character. The smallest street in the smallest village is a public highway, and none the less so because a vast majority of the citizens will certainly never derive any benefit from its use. It is enough that they may do so if they chose.’ In the present case no person can derive any benefit from the library of the institute without being a member or a contributor, and even this privilege will depend upon the will of the library committee and the librarian. I do not wish to be understood as unfavorably commenting upon any of the regulations of the institution, on the contrary its objects are of great public importance, and are deserving of our highest commendation, and its rules appear wise and proper. All that is now decided is that it is not a purely public charity, and, therefore, not exempt from taxation.
    “In the view of the court5 no corporation or institution is a purely public charity, which is not under the control or supervision of the public authorities; or, at least, subject to public visitation; or, is founded and endowed so as to give the general public, under reasonable restrictions, an absolute right to receive its benefits, and, in case of failure of its managers to carry out the founder’s will, to compel compliance therewith by an application to the courts. In case of a dissolution of such a charity, its property must vest in the public authorities for charitable uses. No institution whose property is owned in fee, and is under no control except that of the corporation, and from the use of which the general public may be excluded, or which may be sold without power in any one to prevent it and the proceeds be diverted to other uses, according to the will of the owners, can in any reasonable construction, be .called a purely public charity. The Delaware County Institute of Science would hardly admit the right in the court to appoint an official visitor with authority to examine its management,' and enforce the will of the founders of the institution by the removal of its managers and the appointment of new ones; and yet no corporation is a purely public charity that is not subject to the exercise of such powers.
    “ An essential element of a public charity is the right of public visitation for the correction of abuses, and the enforcement of the founders’ will. I can find no power outside of the membership of this society to prevent a sale of its lands free from all trusts or encumbrances, and a distribution of the proceeds as the members may desire. They may also sell their library and divert the proceeds to other objects without the consent or interference of the general public.”
    May 3d 1880,
    Judgment for the plaintiff for $17.50, with costs.
    Defendant took this writ, and alleged that the court erred in deciding that the defendant is not a purely public charity, and in deciding that the defendant is liable to taxation.

      John M. Broomall, for plaintiff in error.
    It is submitted that an institution of learning that is open to all persons, for the diffusion of useful, scientific and literary information, that has no stock, no stockholders, and can make no profit for anybody, and that is not under the control of a sect, party or class of persons, that is neither money making, political nor sectarian, is necessarily a purely public charity. It is held in Donohugh’s Appeal, 5 Norris 318, that the exemption embraces “ private institutions for purposes of purely public charity and not administered for private gain,” and this ought to dispose of the whole question.

      H. C. Hotvard, for defendant in error.
    There is nothing whatever in the constitution of this society to prevent it from closing its doors to all except some preferred class. The fact that it does not do so now is of no consequence. In order to render it a purely public charity, there must exist somewhere in its organic law— which cannot be changed without the intervention .of a court — some provision which requires it to be maintained as a public charity. That is .to say, the institute here having nothing in its charter which compels its property to be for all time subject to the public use — the public use is not pure, and while it is undoubtedly public in the ordinary acceptation of the term, yet it is not exempt from taxation.
   The judgment; of the Supreme Court was entered,

Per Curiam.

The plaintiff in error, so far from being a purely public charity, is not a public charity at all. It is a private corporation for the benefit of its members, as much so as any other beneficial or literary society. It might permit others than members to use the library, but nobody could call it to account for refusing such permission. It is clearly not within the principles settled by the court in Donohugh’s Appeal, 5 Norris 306.

Judgment affirmed.


author: Mr. Justice Sterrett

text:
    John E. Leonard’s Appeal.
    1. Where inquiry becomes a duty, the party who neglects to perform il should bo visited with at least constructive notice of the facts that probably would have been brought to light if it had been duly made.
    2. As a general rule, inquiry of the obligor is sufficient to ascertain whether there is any defence to the payment of a judgment entered on a note, but where the obligor has assigned all his property for the benefit of creditors, and the assignee, by accepting the trusts, has undertaken to pay the creditors, as far, at least, a's the assets in his bands will reach, inquiry should be made of him also.
    March 25th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Trunkey and Sterrett, JJ. Paxson and Green, JJ., absent.
    Appeal from the Court of Common Pleas of Chester county: Of July Term 1878, No. 81.
    Appeal of John É. Leonard from the decree of the court confirming the report of the auditor in the matter of the petition of Lewis Davis.
    The proceedings in the court below and the facts are set forth in the following portions of the report of the auditor —
    “John R. Stapleton and wife, on the 12th of August 1869, executed and delivered to Lewis Davis a deed of voluntary assignment in trust for the benefit of creditors. Lewis Davis accepted the trust, and on the 13th day of August filed his petition for the appointment of appraisers, and on the 9th of September 1869, an inventory of the assigned estate. On the 15th day of November 1870, a. second bond (the first one being defective in form), in which Robert Neeley and Alexander Martin were sureties, was filed and approved by the court. On the 20th day of May 1871, the assignee filed an account to which, on the 13th day of June, exceptions were filed by W. B. Maitland, and other exceptions by John R. Stapleton, and on the same day a petition was presented to the court for an auditor to distribute the balance standing on the account. George M. Rupert, Esq., was appointed auditor upon the exceptions, and also to make distribution. The report of the auditor was filed on the 18th day of December 1871, and the same day the court made an order that the assignee pay in accordance with said report. The claims upon the fund were presented to the auditor on the 21st 'day of October 1871. The claims were handed in by Rees Davis, Esq., who was acting as principal counsel for the assignee, and among them was the following, viz.: “ Judgment in favor of John E. Leonard entered November 19th 1868, in judgment docket E, page 453 :—
    For.........$3000.00
    Int. from September 9th 1869, to December 1st 1871, 401.00
    Total claim, ....... $3401.00

      “ On this claim the auditor awarded to John E. Leonard as follows, viz.:—
    From personal property, .....$ 299.16
    From real estate, ....... 2457.60
    Total award, ...... $2756.76”
    “ On the 19th day of June 1873, an action of debt was brought in the Court of Common Pleas of Chester county, on the official bond of Lewis Davis, assignee of John R. Stapleton, the case being as follows, viz.:—
    The Commonwealth of Pennsylvania, ^ at the suggestion of John E. Leonard, v. Lewis Davis, Robert Neely and Alexander Martin.
    In the Common Pleas of Chester county, No. 85 to August Term 1873.
    Summons Debt.
    “The plaintiff’s statement, filed at the time of issuing the praecipe, exhibited a copy of the said bond, and also of the distribution reported by the auditor as above stated, and demanded the said sum of $2756.76, with interest thereon from the 18th day of December 1871. The sheriff returned that he had summoned Lewis Davis personally, and the other two defendants by leaving a copy of the writ at tbeir respective homes on the 27th of June 1873. On the 3d day of July 1873, Lewis Davis filed an affidavit of defence, alleging payment on or about the 10th of April 1871, of the judgment above mentioned, a copy whereof accompanied this report. On the ninth day of August 1873, the plaintiff filed a narr., and on the same day entered a rule to plead. The defendant on the 18th and 29th days of August filed their plea of nil debet, whereby the case was put at issue. At this stage of the proceedings, the defendant, Lewis Davis, on the 11th of September 1873, presented his petition to the court asking for relief, by having the report of auditor referred back to him for correction, and the court so referred it for hearing upon the matter alleged in the affidavit.
    “ Mr. Davis alleges that about the 1st day of April 1871, Mr. Leonard demanded payment of the judgment in question, and took steps to enforce his demand by legal processthat thereupon he raised the money and paid off the debt, and took up the hill single, which represented it; that subsequently he handed this bill single to his attorney, Rees Davis, to be presented to the auditor in Stapleton’s estate, under the belief that that was the proper course to be pursued, and that the money awarded thereon belongs rightfully to him, and not to Mr. Leonard. On the other hand, Mr. Leonard alleges that, although about the 1st of April 1871, lie demanded payment of the judgment, and sought to enforce it, yet that Mr- Davis at first resisted payment, and afterwards entered into an arrangement whereby it was postponed for the time being; that he, Leonard, on or about the 8th day of April 1871, sold and transferred the obligation to Rees Davis, and about the 16th day of June following, repurchased it from him; and that ever since he has been the owner of it, and is justly entitled to the money awarded to him by the auditor as aforesaid. * * *
    “ We find the following facts: That John E. Leonard, being the holder of the Stapleton note for $3000, gave notice to Lewis Davis, the assignee, through Rees Davis, Esq., his attorney, sometime in March 1871, that he would require payment of the same at the 1st of April following. That Lewis Davis, in consequence of that demand, on the'27th day of March 1871, sent to Rees Davis the sum of $1549,88, and on the 3d of April, the further sum of $1110, and about the 10th of April, the additional sum of $590.60, an aggregate of $3250.48, which moneys were directed by him, and were received by Rees Davis, to be applied to the payment of the note in question. That, on the 3d day of April 1871, Mr. Leonard, not having received, any moneys in response to his demand for payment, issued a pluries fi. fa. on the judgment entered upon this note. * * * That on the 5th or 6th of April 1871, Rees Davis paid over to Mr. Leonard, on account of the Stapleton note, a check of $600, andón the 7th of April, in cash, $1000; and on the 8th of April, a check for $800, and in cash, $175. He also gave to Mr. Leonard, on the 8th of April, his own judgment-note for $75, payable in two days, $25 of which was to be applied towards the payment of the Stapleton note, and the balance was intended to cover the costs of the execution above mentioned.
    “ He further gave to Mr. Leonard, at the same time, his own judgment-note for either $400 or $500, payable in two months (for which he transferred the Whiteside bond as collateral), making a total of $3000 or $3100, which Mr. Leonard then accepted in full payment, satisfaction and discharge of the Stapleton note, and thereupon delivered the same over to him, which he, on the next day, the 9th of April, carried up to his father and delivered over to him. On the 10th of April, Rees paid to Mr. Leonard the $25 balance on the Stapleton note and the costs of execution, and took up the $75 note which he had given two days before; that on the 8th of April Mr. Leonard executed a blank assignment of the Stapleton note and judgment, which he delivered over to Rees, along with the note itself, but whether this assignment passed into the hands of Lewis Davis, along with the note, does not satisfactorily appear. That during the first half of the month of June 1871, Rees Davis got the Stapleton note from his father, upon the pretext that it was necessary he should have it to lay before the auditor, who had been, or was about to be, appointed to report distribution in the assigned estate of Stapleton. That Lewis' Davis parted with its possession upon this representation and for that purpose, and without any knowledge or understanding on his part, that it was to be used for any other purpose whatever; and he -was, in fact, not aware that any other use had been made of it until so informed by Mr. Leonard, in the spring of 1873. That on the 16th of June 1871, Rees being unprepared to pay off the note which he had given on the 8th of April, at two months, gave in lieu thereof, his note for .$500, payable on the 1st day of April 1872, and at the same time he gave Mr. Leonard another note for $1500, also payable on the 1st of April 1872, and received from Mr. Leonard, in consideration thereof, a check for $1120, the difference of $380 being discount on the two notes, at the rate of two per cent, a month, retained for the use of the money. At the same time, and as a part of thé same transaction, papers were made and delivered, and Mr. Davis then passed over to Mr. Leonard the Stapleton note, together with the blank assignment which the latter had executed on the 8 th of April previously; but whether the words, ‘ collateral for Stapleton and Whiteside bonds,’ were put on the notes at that time, or not until afterwards, the auditor is unable to determine, as the two witnesses who alone have knowledge on the subject stand diametrically opposed to each other.
    “ That Lewis Davis was not privy to this transaction of the 16th of June, and did not become fully cognisant of the facts until they were developed in the course of the present investigation. * * * That when the audit for distribution in the Stapleton estate was held in the fall of 1871, the judgment entered on the note in question participated therein, being awarded $299.16 out of the personal property, and $2457.60 out of the proceeds of real estate — the latter sum being the balance of such proceeds, after paying prior liens in full; and it appears that this judgment was presented along with the other claims against the assigned estate by Rees Davis, as attorney for the assignee, and the dividend was awarded to Mr. Leonard, because the judgment stood upon the record in his name. That Mr. Leonard made no demand upon the assignee for payment of the dividend so awarded to him, until the month of April 1873, at which time Rees Davis had disappeared from West Chester, and his whereabouts W'ere unknown.
    “ There was a collateral issue raised during the investigation respecting the genuineness of the signatures of a paper purporting to be an acknowledgment of no set-off to the Stapleton note by the assignee. This paper purports to have been signed by Lewis Davis, as maker, and by Rees Davis as a witness. * * * There is no presumption, legal or otherwise, in favor of the genuineness of these signatures, and the burden is upon Mr. Leonard, who offered them in evidence, to establish their verity. This, we think, in view of all the evidence, he has failed to do. It must not be understood, however, that we pronounce them to be forgeries. That is not the issue. We simply find that they have not been proved to be genuine. We might, perhaps, find upon the same evidence that they had not been proved forgeries; but as that is not the issue, we are not called upon to record our opinion.”
    The auditor then proceeded :
    “ Now, was the taking up of this obligation a payment or a purchase on the part of Lewis Davis? We have already seen that payment was what Mr. Leonard demanded and sought to enforce ; and we have also observed that the money was forwarded by Mr. Davis, accompanied by a stipulation that it was to be used in making payment of the obligation. But it is said this purpose which both parties had in view was not carried into effect, and that a transaction, essentially different in its consequences was substituted in its place. Why should this intention of the parties be so changed ? And would it not be a fraud upon' Lewis Davis to so act ? And could anyone privy to the transaction reap any advantage from it subsequently ?
    “ It is clear, so far as Lewis Davis is concerned, payment was what he intended should be made, and payment was what after-wards had been made. And it is also clear he believed at that time he had enough trust funds in his hands to pay 'off the obligation in full; and he actually had enough, and more than enough, before taking out his commissions as assignee. There was no motive or inducement to purchase which did not exist also to pay, or was superior in the former to the latter case. The moneys employed to take up the obligation were the trust funds belonging to Stapleton’s estate, and we are persuaded Mr. Leonard had knowledge of that fact' at the time the transaction was consummated ; at least the probabilities are in consonance with this opinion. * * * There was no consideration whatever for this contract for sale, and the delivery of the note in contract for sale, and the delivery of the note in question, and the blank assignment of the judgment, except what, if any, is to be found in the $1120 which Mr. Davis received from Mr. Leonard on the $1500 note. The design and real purpose was that these judgments should be pledged as collateral for the $1500 note; and the words on the note, “ collateral for the Stapleton and Whiteside bonds,” are a perversion of the truth, the fact being precisely the reverse of the statement therein contained. We are conscious that this finding in the face of the writing itself, may seem strange, but an acquaintance with all the facts makes the conclusion inevitable.
    Recurring now to the transaction in April, we are of opinion, from a careful consideration of all the facts and evidence in the case, that it should be regarded as a payment of the obligation, and not as a purchase thereof.. Indeed, it might well be doubted, as before intimated, whether the assignee could huy up the obligations of the assignor, and thus put himself in a more hostile attitude towards the estate or' its creditor, than he had previously occupied. He certainly could not do so with the trust funds, and it is very questionable whether he could do so with his own funds, unless some equity was to be enforced by reason of the proceedings. * * * Being a payment, the effect was an extinguishment of the debt — an absolute wiping it out of existence. And it was thenceforth incapable of being used for any purpose whatever. It follows, of course, that any attempt thereafter to sell or assign or pledge the security, would be invalid and fruitless. No title can be acquired to a dead security. But it may be contended that whilst payment with the trust funds would at law be an extinguishment of the debt, and the judgment could not afterwards be kept on foot without the consent of persons interested, yet in equity, the judgment would still exist, to enable the payor to indemnify himself in the marshalling of the assets or to obtain an order in his favor in the distribution, and that if he chose to assign or to allow an agent or attorney to assign to another, whatever sum he might be entitled to in distribution, there is no principle of law or equity will interfere to prevent it. * * * But Mr.- Leonard could not obtain title through this fraudulent proceeding; even if he were an innocent purchaser for value he would acquire no title. The fraudulent vendor having no title, he could not invest his vendee with any. * * * But we do not think Mr. Leonard is to be regarded in exactly the light of an innocent purchaser for value. There was enough in the case and in the manipulation of this particular security to have put him on inquiry. He was entirely acquainted with the transaction of 1871, and he knew or ought to have known that the bond had been taken up by Lewis Davis with trust funds. Whilst we do not imagine that he was cognisant of the fraud that was being perpetrated, or was lending a willing and knowing assistance thereto, we nevertheless think that he did not exercise that caution and make that inquiry which his knowledge of the circumstances and of the relation of the parties made it incumbent upon him to exercise. In other words, he was in default in accepting this transfer without first endeavoring to ascertain Bees Davis’s status in connection with the obligation. This is not to his discredit, but it is unfortunate for his claim.” * * * •
    The auditor then reported that the sum of $2756.76 was improperly paid to Mr. Leonard, in the distribution of the Stapleton estate, and that the said sum should have been awarded to Lewis Davis.
    Exceptions were filed to the report of the auditor, which the court dismissed, whence this appeal.

      Wayne Mac Veagh and Joseph J. Lewis, for appellant.
    The report of the auditor shows that Rees Davis was the attorney and agent of Lewis Davis, his father, and managed the business of the trust with unlimited authority. He did as he pleased in every respect without being subject to question or inquiry. Being thus the agent of his father, it is necessary to consider what are the consequences of that relation. The rule which applies to principal and agent is thus stated by Mr. Bispham, in his treatise on Equity, sect. 368, p. 334, 2 ed., as deduced from the best authorities. “ Notice to an- agent is notice to the principal, and it is considered, as far as the principal is concerned, as constructive notice, because the principal and agent as to matters within the scope of the latter’s authority, are regarded in the eye of the law as one.”
    Having allowed Rees Davis for two years to manage this business, in his own way, and to represent himself as the owner of the claim which he put into his hands with the power to transfer it at his option, without supervision or inquiry on his own part, it is certainly not for the appellee to say, now that circumstances have wholly changed, and the fraudulent agent has become a pennyless outcast, that Mr. Leonard ought, before taking a re-transfer of the claim, to have gone beyond the agent and inquired of the principal, personally, -whether the appearances which he himself had created, were true, and the powers which he had himself conferred, were about to be abused. It is evident that the negligence imputed by the court to Mr. Leonard, not only does not appear, but that he was fully warranted in treating Rees Davis as the owner of the claim, and that if Lewis Davis was imposed upon by his son and agent, he had his own gross negligence and utterly misplaced confidence to thank for it.

      R. T. Cornwell and William Waddell, for appellee.
    When an assignee, for the benefit of creditors, takes an assignment of a judgment against his assignor, it is a payment of the debt and not a purchase of the obligation: Wood v. Van Arsdale, 3 Rawle 401; Keller v. Leib, 1 P. & W. 220 ; Hill v. Frazier, 10 Harris 320.
    The debt being paid, it was utterly gone — wiped out of existence. The assignee, by right of subrogation, would be entitled to the dividend awarded to the judgment lien from the estate; but that would be an equitable right, wholly apart from any ownership in the lien itself. Once gone, the debt could not be restored. No transfer of the worthless obligation which once represented it, could give it new life. Lewis Davis himself could not sell' it back to Leonard, much less any one else. If the bond was stolen from the assignee, or obtained by misrepresentation of the purpose for which it was to be used, and fraudulently passed back to the original holder without notice of the fraud, or the merger and extinction of the debt, the latter could take nothing by it from the estate. He could only look for damages to the man who perpetrated the fraud.

      May 3d 1880.
   Mr. Justice Sterrett

delivered the opinion of the court,

The learned auditor, after careful consideration of the testimony, found that the transaction in April 1871, between the appellant and Rees Davis, as attorney for the assignee, was in reality a payment of the judgment. While this finding of fact was not reversed by the court, it was considered somewhat doubtful and open to controversy whether the transaction was understood by the parties to be a payment or a purchase. We have no means of satisfactorily solving the doubt except by what appears upon the face of the report itself. The testimony on which the auditor based his conclusions is not before us. It is a safe rule, and one that should be adhered to, that the facts found by an auditor should be accepted as true until the contrary is clea2’ly shown; and we are unable to say that this has been done in the present case. If the transaction was in fact a payment, as the auditor found, .the appellant has no reason to com plain. But, assuming the auditor was mistaken, and instead of being a payment, it was, as appellant contends, a purchase of the judgment, how would the case stand? If the appellant received the full amount of his judgment in cash and a note of $4.00, as the auditor finds, and surrendered the original judgment-note with an assignment of the judgment in blank, he of course ceased to have any interest in the claim. It belonged exclusively to his assignee, who was then in a position to accept payment from or make terms with the obligor or any one on whom the duty of discharging the obligation devolved. The mattet- stood in this condition for over two months, when the appellant negotiated for a .re-assignment of the note and judgment to himself. In taking the re-assignment he claimed that he had procured a certificate of no defence from the appellee, Lewis Davis, but the genuineness of that paper was disputed, and the auditor found that it -was not established. In approving this finding, the court says: “We agree with the auditor tliat an unbiassed view of all the testimony fails to satisfy the mind that Lewis Davis signed the paper intentionally or otherwise.” The certificate of no defence being thus properly out of the case, there was not a particle of testimony to show that any effort was made by appellant, or any one on his behalf, to ascertain from either the obligor or the trustee of his assigned estate whether there was any defence to the payment of the judgment. It cannot be doubted that it was his duty to make such inquiry: Eldred v. Hazlett, 9 Casey 307; Ashton’s Appeal, 23 P. F. Smith 153. As a general rule, inquiry of the obligor is sufficient; but where, as in this case, he has assigned all his property for the benefit of his creditors, and the assignee, by accepting the trust, has undertaken to pay them, as far at least as the assets in his hands will reach, inquiry should be made of him also. The reason of this is so obvious that a bare statement of the proposition is sufficient. He has not only the right, but it is his duty, to discharge the obligations of his assignor, and, as a general rule, to make any defence that might be interposed -by the latter. The appellant was fully aware that the appellee was the person to whom he had to look for the payment of his judgment before he assigned it; and the fact that, in taking a re-assignment of it two months thereafter, he claimed to have procured from- him a certificate of no defence, which he sought to use for his own protection, shows conclusively that he understood both the duty and importance of making inquiry, and arming himself with evidence that would estop the trustee from setting up any defence to the payment of the judgment. Having failed to prove the genuineness of the paper, he was left without any evidence of inquiry or proof of facts that would estop the trustee from interposing any defence he might have. Where inquiry becomes a duty, the party who neglects to perform it should be visited with at least constructive notice of the facts that probably would have been brought to light if it had been duly made. Applying this rule to the appellant, what would have been the result if before taking a re-assignment of the judgment he had gone to the trustee, Lewis Davis, and inquired of him whether he had any set-off or dtefence to its payment ?• In view of the facts found by the auditor it is reasonable to conclude he would have been informed that, in the early part of April preceding he had furnished money to his son, Rees Davis, to take up the claim, and that the latter had done so ; that he had recently given the note to Rees-for the purpose of presenting the claim before the auditor, and obtaining a credit or dividend to which, as trustee, he was entitled, and that Rees had no authority whatever to otherwise dispose of the claim thus intrusted to him.' This would have terminated the negotiation with Rees Davis, and averted the unpleasant controversy that has ensued. As between Rees Davis and his father, it is very clear that the former never had any right to the judgment or its proceeds. He was furnished with money for the express purpose of taking up the claim, not for his own benefit but for his father, and it was of little consequence whether it was done in the form of a purchase or by actual payment. If the proper inquiry had been made by appellant he undoubtedly would have obtained information on which he could have acted with safety to himself and others. Having neglected to do so he is responsible for the consequences. But it is strenuously contended that, having b.ut a short time before sold and transferred the judgment to Rees Davis, and finding the papers in his possession, in the same condition they were when delivered, there was no necessity for further .inquiry. This position is clearly untenable. There was nothing in the relations between Rees Davis and his father, or anything else in the case to relieve the appellant from the duty of making the usual inquiry; and the fact already adverted to, that he claimed to have procured a certificate of no defence shows that he not only recognised the duty, but fully appreciated its importance.

We are satisfied that the conclusion reached by the court was correct, and the appeal should he dismissed.

Decree affirmed, and appeal dismissed at the cost of the appellant.


author: Mr. Justice Mercur

text:
    Booth versus Heist.
    H. furnished lumber to erect certain houses. B. advanced the money to M. to erect the houses.' The lumber was delivered to M., but charged to B. H. said to B., I am furnishing this lumber and charging it to you, and if it is not all right I want you to say so. B. said it was all right, provided he got a certain deed of one of the houses that had been built. H. informed M. of the conversation and continued to furnish the lumber. M. testified that the deed was delivered to B., and that he left money in the hands of B. to pay the bills for the lumber. In an action against B., held, that B.’s promise was not to pay the debt of another, but an original undertaking, and that the plaintiff could recover.
    March 25th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Trunkey and Sterrett, JJ. Paxson and Green, JJ., absent.
    Error to the Court of Common Pleas of Montgomery county : Of July Term 1879, No. 62.
    Assumpsit by George D. Heist against Edwin G. Booth.
    This suit was brought to recover the money due for lumber delivered for the erection of buildings at Chestnut Hill. When applied to for this lumber, in May 1875, by Samuel Meredith, the contractor or builder, and after a small quantity had been furnished and charged to the defendant, the plaintiff called upon the defendant and informed him that he was furnishing lumber for the- construction of these buildings, and charging the same to, him, and he‘ was asked if this was right, saying, “ If it is not all right I want, you to say so.” Defendant then replied that it was right, provided he got a certain deed for property there — one of the properties that had been built. Plaintiff then left defendant and called upon Mr.. Meredith.
    After proving these facts on the trial, witness was then asked, “Did you communicate to Meredith what Booth said?” To this, defendant objected, but the court overruled the objection. This forms the first exception. Witness then answered, “ I did.”.
    Meredith was then called as a witness, and testified that the deed to which defendant referred in his interview with the plaintiff was by him delivered to the defendant. He further testified that he had left money in defendant’s hands to pay the bills charged to him.

      On cross-examination, this witness was asked by defendant’s counsel, “ What conversation did you have with Heist (the plaintiff) when you first went to him about the lumber?” Objection was made to this question as not being cross-examination, and sustained. This formed the second exception.
    Plaintiff’s books containing the original entries against defendant were then received in evidence without objection.
    Defendant then offered a building agreement made between himself and Meredith, by which it appeared that he was to advance $2200 on each house as it was erected, and by which it also appeared that defendant, at the time the lu'mber was furnished beside the money left by Meredith in his hands to pay bills charged to him as above mentioned, had a sum of money in his hands payable to Meredith from which he was to pay plaintiff.
    The defendant presented the following point:
    “ That there is no such clear and explicit evidence of a promise by the defendant to pay the debt as entitles the plaintiff to recover, and their verdict should be for the defendant.”
    The court, in answer to this point, said: “ I decline to charge as requested,” and further said: “If you believe the evidence of the plaintiff, the plaintiff is entitled to recover, and the verdict should be in his favor.”
    Verdict for plaintiff for $559.51, and after judgment defendant took this writ and alleged that the court erred in their rulings on the above evidence and in the answer to the foregoing point.

      Charles F. Corson and E. G. Booth, P. P., for appellant.—
    Booth had nothing to do with the contract of sale, and knew nothing about it until several months afterwards.
    It was the duty of the court to have charged the jury that there was no sufficient evidence of a promise by defendant to entitle the plaintiff to a verdict.
    Even if the court was right in charging the jury that it was an original undertaking on the part of defendant, no recovery could be had, because there was no consideration for the promise.

      B. F. Chain, for defendant in error.
    The plaintiff, being a lumber merchant, when applied to for his merchandise, very naturally inquired who wanted it and to whom it was to be charged. Not satisfied, he went to the person on whose account it was purchased and obtained from him the information sought.
    The conveyance to which defendant referred, as to be made to him by Meredith, was delivered to him. The consideration for the promise by Booth is thus shown to be complete. The undertaking then was an original one made upon a full consideration. Besides Meredith left money in the hands of Booth to pay the claim. Booth also had large sums of money in his hands belonging to Meredith when this bill was contracted.
    May 3d 1880.
   Mr. Justice Mercur

delivered the opinion of the court,

This suit was to recover for lumber furnished by Heist in the erection of certain buildings. They were erected on land conveyed to Meredith by Booth. At the time of sale of the land the latter agreed to advance to Meredith $2200 on each house, which he covenanted to build thereon, to secure the purchase-money and advances to Booth. The lumber was delivered to Meredith but charged to Booth. Heist testified that after he had furnished a little lumber to Meredith he saw Booth, and they talked the matter over. That Booth said “ he expected to do considerable building and to get the lumber of me. I told him I would be pleased to furnish him with the lumber. Less than a month thereafter I saw Mr. Booth at his office. I told him that I was furnishing lumber and charging it to him, and wanted to know if that was right. His answer was evasive. I went down stairs. I went back again and said to him, Mr. Booth I am furnishing this lumber and charging it to you, and if it is not all right I want you to say so. He said it was all right provided he got a certain deed of property there — one of the properties that had been built.” He informed Meredith of the conversation with Booth, and “went on to deliver lumber.”

Meredith testified “the deed was executed to Mr. Booth, to . which he referred in his conversation with Heist. Mr. Booth' paid me $500, leaving a balance of $600 in his hands. Bills were charged to Mr. Booth, and I left that money there to pay them.”

This evidence was clearly sufficient to submit to the jury as tending to prove two things: the one, that sufficient money was left in the hands of Booth to pay for the lumber, and that it was left for that purpose, the other, that the lumber was delivered on Booth’s credit, and on his express agreement to pay therefor. If the evidence was believed it .did not show a promise to assume and pay the debt of another. It was an original promise and undertaking by Booth. It was never charged to Meredith or delivered on his credit. It was no transfer of an obligation to Booth that had once attached to Meredith. The evidence then was most ample to submit to the jury to find whether Booth was not the original and sole debtor. The case was fairly submitted in a charge as favorable as the plaintiff in error was entitled to. We see no error in any of the assignments.

Judgment affirmed.


text:
    T. F. Leonard’s Appeal.
    An award was filed in favor of E, on the 8th of June 1875, and at the expiration of twenty days thereafter the judgment became absolute, and execution was issued thereon. In September following, the court granted a rule to show cause why the award should not be stricken off, and on the 6th of November, the rule was made absolute. On the 19th of the same month, the court reconsidered its action and reinstated the rule. It afterwards discharged the rule; but in pursuance of agreement of counsel, allowed an appeal from the award. On the final trial E. recovered judgment. L., as administrator, recovered a judgment against the same defendant on the 28th of June 1875, and one in his own right on the 9th of November, following. Held, that the lien of E.’s judgment was not postponed to that of the two judgments in favor of L., by the action of the court.
    March 29th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Appeal from the Court of Common Pleas of Lackawanna county: Of January Term 1880, No. 195.
    Appeal of T. E. Leonard from the decree of the court in the distribution of the fund arising from the sheriff’s sale of the real estate of Martin McLean.
    On May 3d 1875, J. M. Everhart brought an action of debt against Martin McLean. On June 8th 1875, he obtained an award of arbitrators in his favor for $2306.96. On June 28th 1875, T. E. Leonard, as administrator of the estate of Michael Mahon, deceased, entered a judgment against Martin McLean in the sum of $1949. November 9th 1875, T. E. Leonard entered another judgment against McLean in the sum of $2206.46, and upon the same day entered another in favor of the firm of Leonard Brothers in the sum of $163.41. In September 1875, McLean, by his counsel obtained a rule to show cause why the award of arbitrators should not be stricken off. In pursuance of this rule, depositions were taken by both parties. On the 6th day of November 1875, the rule was regularly argued, after which the court made the same absolute.
    In pursuance of an agreement of counsel, on the 19th of November the court reinstated the award, discharged the rule and allowed an appeal from the award.
    On the 21st of December 1878, the McLean real estate was sold by the sheriff to T. E. Leonard, for the sum of $4650, which amount was paid into court. February 13th 1879, the court appointed A. A. Chase, Esq., an auditor, to distribute the fund arising from the sale. The auditor, after deducting the costs, distributed the fund to the Leonard administration judgment and the Leonard personal judgment. To this J. M. Everhart filed exceptions, and the court, Hand", A. L. J., reversed the distribution as made by the auditor, and distributed the fund to the Everhart judgment in preference to the judgments of Leonard, in an opinion, inter alia, saying:

      “What is the effect of striking off and reinstating the judgment of Everhart ? Has the lien of that judgment been disturbed so far as regards the Leonard administrator judgment and the Leonard judgment? (1546, October Term 1875, and 814, November Term 1875,)
    “ We think not. After careful examination we are compelled to differ from the auditor in his conclusions. So far as the judgment docket is concerned, no entry has been made to change the appearance or give notice of any change in the order of liens. The award of arbitrators was entered the 8th of June 1875. The rule to strike it off was not obtained till September 1875. The judgments of Leonard, administrator, and of Leonard, were obtained the 28th of June 1875 and the 9th of November 1875 ; so that before the. application to strike off, the Everhart judgment became an absolute judgment. The judgment was stricken off on the 6th of November and reinstated November 19th 1875. The action of the court was, 1st. The reconsideration of their judgment made on the 6th of November. 2d. The judgment of the cour-t on that reconsideration and reinstating of the rule. 3d. Their judgment on that rule and its discharge. All these are judgments of a court of competent jurisdiction. Further, we find the defendant had another hearing. On the 27th of November 1875, when he appealed, he obtained a rule to vacate all the foregoing judgments of the court, which rule was afterwards discharged, as he record shows, on the 8th of September 1876. All tnese acts of the court are conclusive, unless appealed from and reversed. In all these cases the court made no order saving the rights of third parties, supposing that there are intervening third parties in the case.
    “ The Leonard (administrator) judgment did not intervene between the striking off the award and its restoration. It came in after the award, when it was a lien, and before even the application to strike it off. The Leonard (personal) judgment came in, it is true, between the striking off and the restoration. Whether this is entitled to precedence over the Everhart judgment will be considered further on in our conclusions. Leonard, administrator, when he took his judgment, knew that the Everhart judgment was a lien. He is not an intervening lien-creditor for value without notice, but with full notice. He was no party to the proceedings in the Everhart judgment. That was a matter between the plaintiff and defendant, and what transpired between them in this suit should not avail to promote him above a just debt, which the court have finally solemnly adjudged upon a verdict to be a judgment. A court has power to reconsider and correct its judgments. The reasons upon .which they may do this are various, either on the application of counsel to convince the court of error, on the agreement of counsel that the court may so do, or by the court itself. The reasons upon which it acts are not to be inquired into by another court, not of appellate jurisdiction, nor in a collateral proceeding. (See principles and cases cited in Hoffman v. Costen, 2 Whart. 468.) We think the auditor erred in attempting to ascertain the reasons for the judgment of the court. The record shows a reconsideration by the court, not simply an agreement of counsel, a reinstating by the court (not by counsel), and a judgment by the court. The judgments of a court are held to be conclusive. It is a rule to which there is no exception, that when a judgment is given by a court or judge having jurisdiction of the subject-matter, its regularity cannot be inquired into in a collateral proceeding: Billings v. Russell, 4 Casey 191. Now, what was the judgment of the court ? A reinstating of the first rule and discharge of it. So emphatic is our law in sustaining the judgment of a court of competent jurisdiction in a collateral proceeding that they will not vary from it, although sustaining a bad precedent, as in the case of Hamilton v. Seitz, 1 Casey 226. We cannot deny in this proceeding what this record asserts. It asserts .a reconsidering, a reinstating and a discharge of the first rule obtained. This is a decision that the judgment entered on the award is a valid lien, and has not been disturbed. It would possibly have been competent if the court had considered it a case requiring it, by reason of bona fide rights having attached with other parties on the faith of the action of the court in making the rule absolute, to have saved the rights of such third party, as in the case of Crouthamel v. Silberman, 1 W. N. C. 181, and Murry v. Cooper, 6 S. & R. 126; but the court did not so do, and if they had, we do not discover that the plaintiff in judgment No. 1546, October Term 1875, is such an intervening judgment-creditor.
    “In regard to judgment No. 814, November Term 1875, in favor of Thomas E. Leonard, we think, upon the inherent power of a court of competent jurisdiction to reconsider its decision, and the fact that this power was exercised within a short time (thirteen days) after thé rule was made absolute, and no entry was made upon the judgment-docket, in pursuance of the decision of the court striking off the award, that the lien of the judgment in favor of Everhart was undisturbed: Moore v. Kline, 1 P. & W. 129. Under such a state of the record, it would he incumbent on the holder of judgment No. 814, November Term 1875, to show either that he acquired his rights on the faith of the- proceeding in the Everhart judgment, or such a state of facts as wmuld warrant him in assuming from the record that no lien was in existence. This is not the case of a bona fide purchaser, mortgage or lien-creditor, with a deceptive record. We therefore conclude that it is not entitled to preference over the Everhart judgment.”
    From this decree this appeal was taken.

      May 3d 1880.

      C. Smith and PC. W. Palmer, for appellant.
    When the Ever-hart award was stricken from the record, subsequent liens advanced to its position. The position thus acquired by subsequent liens became a vested right: Gunn v. Barry, 15 Wall. 610. Had the court power, by any order or decree made between the parties to the award, to dislodge the subsequent liens from their position, acquired as a legal consequence of the fact that the award was stricken from the record ? Certain it is, that the legislature would have no such power: Gunn v. Barry, supra. The court has no power to amend a mere clerical mistake so as to affect the rights of subsequent lien-creditors : Zimmerman v. Briggans, 5 Watts 186; Black v. Dobson, 11 S. & R. 97; Crutcher v. Commonwealth, 6 Whart. 349; McCormack v. Wheeler, 36 Ill. 114; Ligon v. Rogers, 12 Geo. 289; Perdue v. Bradshaw, 18 Id. 287; Pearce v. Bruce, 38 Id. 451; Lea v. Yeates, 40 Id. 56. It is a most remarkable position to hold that a court has power to affect the rights of a subsequent lien-creditor by an amendment reinstating an award. In Crutcher v. Commonwealth, 6 Whart. 349, this court says: “We do not doubt their power to do so, as between the parties themselves, but it cannot be seriously urged that the court can allow an amendment to affect the rights of a subsequent judgment-creditor. In Black v. Dobson, 11 S. & R. 97, the doctrine is expressly asserted that the court cannot, by amendment, deprive subsequent creditors of their legal advantage which they may have obtained. This principle is so obviously just as hardly to need the aid of authority.’

      Paul R. Weitzel and W. H. Jessup, for appellee.
    This was a collateral proceeding before the auditor. He could not attack this judgment of Everhart except for fraud. No fraud was alleged. Hence, the auditor was bound by the judgment-roll as it appeared upon the certificate of liens presented to him by the appellee: Hauer’s Appeal, 5 W. & S. 474: Drexell’s Appeal, 6 Barr 272; Dickerson’s & Haven’s. Appeal, 7 Barr 256; Watson v. Willard, 9 Id. 89; Cyphert v. McClune, 10 Harris 196. When the first judgment of the appellants was entered, the award of the appellee had ripened into a judgment which was undisputed; and when, on the 9th of November, the next judgments were entered, the lien docket, the only place where he was bound to look, showed the same judgment with nothing to impeach or call it in question.
   Mr. Justice Mercur

delivered the opinion of the court,

This fund in contention was produced by a sheriff’s sale of real estate. The appellee had the first lien by virtue of his award, unless it was postponed by the action of the court relating thereto. The aw-ard was filed'on the 8th June 1875. At the expiration of twenty days thereafter, the judgment became absolute, and execution was afterwards issued thereon. In September following, the court granted a rule to 'show cause why the award should not be stricken off. On the 6th November the rule was made absolute. On 19th of same month the court reconsidered its action and reinstated the rule. It afterwards discharged the rule, but in pursuance of agreement of counsel, allowed an appeal from the award. On the final trial, the plaintiff therein recovered the judgment to which this money w-as applied. The appellant, as administrator, recovered a judgment against the same defendant on the 28th June 1875, and one in his own right on the 9th November following. He now claims the lien of the appellee’s judgment was postponed as to his two judgments by the action of the court. If such be the effect, it is dealing very harshly with the rights of the appellee. He had an absolute judgment regular on its face, when the court assumed to inquire into the validity of the award on which it was entered. The record of the judgment fails to show the ground on which the rule to strike it off was granted. In this distribution, the auditor found it was “on account of misbehavior on the part of the arbitrators.” There was no charge “ that the award was procured by corruption or other undue means” of the plaintiff therein, or of any other person. It is unnecessary now to decide as to the power of a court to strike off an award on application made after the judgment thereon has become absolute, without alleging any fraud, and for a cause known to the applicant on the trial. No undue practice was charged on the plaintiff therein. He had not done anything to prejudice the just fruits of his award. Thirteen days after the court made the rule absolute, and presumably at the same term, it reversed its action, and with the concurrent agreement of counsel, reinstated the award. Had the previously vested rights of the appellee, by operation of law, become lost in the meantime ?

In the final disposition of the rule the court made no order indicating that any previously existing right of lien by virtue of the award should be impaired, any further than to allow the appeal in pursuance of the agreement of counsel. The design and legal effect of discharging the rule was to leave unaffected the lien created by the award. A court has power to strike off a decree improvidently entered: Newcomer’s Appeal, 7 Wright 43. In the exercise of its sound judicial discretion it may enter judgment, as of a time when it ought to have been entered: Murray v. Cooper, 6 S. & R. 126; Fitzgerald v. Stewart, 3 P. F. Smith 343. It undoubtedly has this power at the term when it directed the judgment or decree to be entered. Conceding this power, as between the parties to á judgment or decree, yet the appellant contends no such effect shall be given to the discharge of the rule in this case as to affect his liens. This we think depends on his showing superior equities. The lien of the appellee was prior to the first judgment of the appellant. That judgment is in no wise displaced from the relative position it then had. The other judgment was obtained after the rule to strike off the award had been made absolute. No entry, however, had been made on the lien-docket affecting the validity of the appellee’s lien. It remained there unchanged, notice to all of a subsisting lien. It is the record notice which is recognised as the best notice of the amount and date of a lien: Bear v. Patterson, 3 W. & S. 233; Mann’s Appeal, 1 Barr 24; Hance’s Appeal, Id. 408; Ridgway’s Appeal, 3 Harris 177. The record to which a purchaser or subsequent lien-creditor must look gave no indication that the lien of the appellee was not in full force. There is no proof that the appellant looked at any other or had any knowledge of the action of the court in regard to the award. If then he looked to the lien-docket only, and had no knowledge beyond it, there can be no pretence that he entered his judgment on any assumption that the 'prior lien had been removed. We do not mean to say that a judgment entered after the award was stricken off, and before it was restored, might not under some circumstances have superior equities, but we do not discover such here. The Act of Assembly requires the money, produced by sheriff’s sale of real estate, shall be distributed “ according to law and equity;" 1 Purd. Dig. 645. It has often been held this requires due effect to be given to the equity branch of the court’s power: Kelly’s Appeal, 4 Harris 59: Selden’s Appeal, 24 P. F. Smith 323; Tindle’s Appeal, 27 Id. 201. In view of all the facts, and the principles of equity applicable thereto, we see no irregularity in the proceedings affecting the award sufficient to destroy its prior lien, or to postpone it as against the subsequent judgments: Hauer’s Appeal, 5 W. & S. 473; Drexel’s Appeal, 6 Barr 272; Roemer v. Denig, 6 Harris 482.

Decree affirmed and appeals dismissed at the costs of the respective appellants therein.