author: Mr. Justice Meecue

text:
    Riddle and Wife versus Hall.
    1. An agreement in consideration of stifling or compounding a cnmi«al prosecution or proceeding for a felony or misdemeanor of a public nature is void.
    2. Where a mortgage is executed ■with an understanding by the parties that a part of the consideration thereof is that certain criminal proceedings shall be stopped, the agreement vitiates the mortgage, and this irrespective of the question whether the criminal proceedings are stopped or prosecuted to judgment.
    3. Where a mortgage is executed without any express agreement on the part of the mortgagee that in consideration thereof criminal proceedings shall not be instituted, and yet there are allegations and representations in relation to such criminal proceedings made by the mortgagee which are intended to and actually do deceive the mortgagor, and in consequence said mortgagor, relying on said mortgagee’s statement that no criminal proceedings will be instituted, executes the mortgage, the subsequent institution of such proceedings will relieve the said mortgagor from liability.
    4. A. was the president of an unincorporated savings bank, whereof his son B. was cashier. Both A. and B. were guilty of embezzlement of the bank’s funds, whereupon on complaint of the directors an indictment was found against B. and criminal proceedings also threatened against A. At a meeting of the stockholders to raise a fund for the. payment of depositors and creditors, C., another son of A., subscribed $4,000 himself, and $2,000 on behalf of his mother D., without the latter’s authority. These subscriptions O. made at the request of E., a director of the 'bank, who stated that he believed and. was satisfied it would stop the prosecutions against A. and B., if O. could get his mother, D., to pay the sums subscribed. O. having subsequently notified D. of his subscription on her behalf, D. said she would agree to it if it would stop the prosecutions. E. subsequently called upon D. to induce her to execute a mortgage to him for $6,000. D. stated that she would not sign the mortgage till the criminal matters were fixed np. E. replied that if she signed it he firmly believed it would settle the whole criminal business, and if she did not it would be the worst thing she ever did. D. then signed the mortgage with the understanding that the bank would not appear against her son B. or prosecute her husband A. If she had not so understood she testified that she would not have executed the mortgage. Afterwards a nolle prosequi was entered in the prosecution against B. and on complaint of the bank an indictment was found against A. and B., for conspiracy, on which they were tried, convicted and sentenced. The mortgage being subsequently assigned by E. to the trustee of the bank, a scire facias was issued thereon against D. Held, that it was for the jury to say whether an agreement to desist from the criminal prosecutions did not constitute part of the consideration of the mortgage, in which event the mortgage would be vitiated because based on an illegal consideration. Held, further, even if this were not the case, that it was for the jury to say whether the plaintiff had not induced the defendant to execute the mortgage by representing that the criminal prosecutions would not bo pushed, in which event the actual pushing of such prosecutions would relieve the defendant from liability. Held, further, that under the circumstances the assignee of the mortgage occupied no higher ground than the assignor.
    5. "Whore an assignment is made by an unincorporated society to a trustee in trust to pay all its creditors, it is not necessary for the trustee in suing out a mortgage belonging to the assigned estate to prove that there are creditors of the society who are unpaid.
    6. The defendant in the case above set forth requested the court to charge that il' she executed the mortgage under moral constraint, being influenced by the language used by E., she was not bound by her act. The court refused so to charge. Held, that under the circumstances this was not error.
    November 4th 1881.
    Before Sharswood, C. J., Mercur, Gordon, Trunkey, Sterrett and Green, JJ. Paxson, J., absent.
    Error to the Court of Common Pleas No. 1, of Allegheny co'unty: Of October and November Term 1881, No. 274.
    Scire facias sur mortgage, by James W. Hall, for use of D. MacFerron, trustee of the Franklin Savings Bank, an unincorporated partnership association, against George B. Biddle and Mary A. Biddle, his wife. The mortgage in suit was given by the said defendants on real estate of the wife, to secure the husband’s bond. Plea, payment with leave, etc.
    On the trial, before Bailey, J., the defendant, Mary A. Biddle, alleged that the mortgage was procured from her by undue influence and duress per minas, exercised by the plaintiff, Hall, and others, composing a committee of the said Franklin Savings Bank, the use plaintiff; further, that the mortgage was invalid because given solely for the illegal consideration of suppressing a criminal prosecution then pending against her son, and a similar prosecution threatened against her husband, for embezzlement and misuse of the funds of said Savings Bank, of which her husband was president and her son cashier. The facts, as developed on the trial, are recited in the foregoing syllabus, and more fully in the opinion of the court.
    The defendants presented the following points:
    1. If the jury believe from the evidence that the defendant, Mrs. Biddle, refused to execute the mortgage in suit unless a then pending prosecution against her son, James II. Biddle, for embezzlement, were withdrawn, and a threatened prosecution of her husband for the same, or a like offence, avoided; that she so stated to James W. Hall, the plaintiff, and Hr. Mowry, her intimate friends and a committee? from plaintiff partnership to get a mortgage from her, and was then assured by them that it was their belief that if she executed said mortgage all said prosecutions pending and threatened would be avoided ; that, relying on that statement, she executed said mortgage for the purpose of avoiding said prosecutions; and if the jury, furthermore, believe the defendant’s evidence, that she was frightened by the statement made to her by Mr. Hall at the same time (if he did make it), that “ if she refused to execute said mortgage it would be the worst thing that she had ever done in her life,” or something to the same effect, then their verdict should be for the defendant. Refused. (Second assignment of error.)
    2. The evidence in the case being uncontradicted, that the purpose for which the plaintiff secured the mortgage in suit was to pay creditors of the plaintiff partnership, and there being no evidence that any creditors of said partnership remain unpaid, the plaintiff cannot recover. Refused. (Third assignment.)
    3. If the jury believe from the evidence that Mrs. Biddle executed the mortgage in suit under moral constraint, and influenced thereto by fright, resulting from language used to her by the committee of plaintiff partnership, who came to her to secure from her said mortgage, then she is not bound by said act, and the verdict should be for the defendants. Refused. (Fourth assignment.)
    The plaintiff presented this point:
    Under all the evidence in the case the verdict must be for the plaintiff, for full amount of the debt unpaid, to wit, $5,300, with interest 'thereon from June 3d 1819, to date. Affirmed. (Fifth assignment.)
    The court charged the jury as follows : “Without occupying your time to tell you what my views are as to this case, except the conclusion which I have reached, I will say that I refuse the three points presented, as drawn, of the defendants, and affirm the point of the plaintiff, ‘that under all'the evidence in the case the verdict must be for the plaintiff for the full amount of the debt remaining unpaid, to wit, $5,300, with interest thereon from June 3d 1819, to date.’” (Sixth assignment.)
    Yerdict, accordingly, for the plaintiff for $5,901.20, and judgment thereon. The defendants took this writ of error, assigning for error, inter alia, the answers to the above points and the charge of the court.

      Dalzell and 8. II. Geyer (Hcmvpton with them), for the plaintiffs in error. —
    There was ample evidence to be submitted the jury (1) that the mortgage was executed by Mrs. Piddle, under- duress per minas, and (2) that its only consideration was to suppress the criminal prosecutions. In either case it was avoided, and the court erred in directing the jury to find for the plaintiff: National Bank v. Kirk, 9 Norris 49; Chitty on Contracts 188; Olubb v. Ilutson, 18 O. B., N. S. 414, and note; Porter v. Havens, 37 Barb. 343 ; Kimbrough v. Lane, 15 Am. L. Peg. 289 ; Partridge v. Hood, 120 Mass. 403; Atwood v. Fisk, 10Í Mass. 363. Even conceding that the understanding between Mrs. Piddle and the plaintiff, Hall, and those who acted with him, fell short of an actual contract to suppress the criminal proceedings, her impression and belief, derived from them, that such would be the result if she executed the mortgage, would warrant the jury in finding for the defendants. The vice of the transaction lies in the corrupt intent, not in its successful accomplishment: Prevail v. Fitch, 5 Wharton 331; Porter v. Havens, supra. Less than actual duress will avoid the mortgage of a married woman : 2 Groonleaf on Ev. § 301, n ; Schrader v. Decker, 9 Barr 14; Michener v. Cavender, 2 Wriglit 337; Louden v. Blythe, 3 Casey 22; McCandless v. Engle, 1 P. F. Smith 309 ; Griffith v. Sitgreaves, 9 Norris 161.

      West Mg Murray and 8. Schoyer, for the defendant in error. —
    The authorities relied on by plaintiff in error are not disputed, but they only decide that the illegality which will vitiate a contract must, by agreement, be the consideration. In the present case no agreement to stifle the prosecution was proved. While Messrs. Hall and Mowry told Mrs. Piddle that they were almost certain the bank officers would not prosecute her son and her husband if she executed the mortgage, they were careful to say that they had no authority to make any agreement, and that they had no control over the prosecution, which was by the Commonwealth, and could not guarantee that the prosecutions would not be pressed. They were her personal friends and advisers, although also acting as a committee for the hank. In order to avoid a contract, on the ground that it was made to compound a crime, the defendant must show, first, the actual commission of the crime, and, secondly, an agreement by the plaintiff to refrain from prosecution : Swope v. Jefferson Insxirance Co., 8 W. N. C. 481. The real consideration of the mortgage was the securing of the prior subscription, which was valid and bona fide, and made before the happening of the alleged representations, fear and oppression. There was no evidence of fear or duress sufficient to rehut the presumption arising from the notarial certificate of acknowledgment by Mrs. Piddle that the execution of the mortgage was her free and voluntary act: Ileeter v. Glasgow, 29 P. F. Smith 83. The court, therefore, rightly withdrew the evidence from the jury and directed a verdict: Hyatt v. Johnston, 10 Horns Í96; Ryder v. Wombwell, Law Rep., 4 Exch. 39.
   Mr. Justice Meecue

delivered the opinion of the court, January 2d 1882.

Ex turpi contraetu non oritmr actio, is a well-recognized maxim of common law. In this case the claim is to enforce a mortgage executed by husband and wife, against the real estate of the wife. It is undoubted law that a married woman may by joining with her husband make a valid mortgage of her separate estate to secure his debt or that of a third person. Conceding the general power, the defence alleges the turpitude of the consideration, and the undue influence exercised on the wife in procuring the execution of the mortgage. The court, being of the opinion that the evidence was insufficient to submit to the jury, gave them peremptory instructions to find for the plaintiff below.

It is elementary law that an agreement in consideration of stifling or compounding a criminal prosecution or proceedings for a felony or a misdemeanor of a public nature, is void: Chitty on Contracts (ed. 1874) 992. An action will not lie on a bon'd when part of the consideration is an agreement not to prosecute for malicious mischief: Id. in note citing Cameron v. McFarland, 2 Car. Law Rep. 414. So a mortgage given in consideration of an agreement that an indictment found for obtaining mules by false pretences, should be dismissed and the prosecutor not appear, was held void : Kimbrough v. Lane, Court of Appeal of Ky. vol. 15, N. S. Amer. Law Reg. 389. It was held in Harris v. Carmody, by the Supreme Court of Mass., 113 Mass. 51, that a note and mortgage given by a father to the plaintiff, under threats to prosecute and imprison his son for an alleged forgery of the father’s name, may be avoided by the father on the ground of duress. Where any part of the consideration of a promissory note is a promise by the payees to abstain from prosecuting the son of the maker for forgery, the note is void: National Bank of Oxford v. Kirk, 9 Norris 49.

The Franklin Savings Bank was not incorporated. Each of the plaintiffs in error, and their two sons James H. Riddle and George D. Riddle were stockholders therein. George R., the husband of Mrs. Riddle, was the president, and James H., her son, was the cashier thereof. Through the improper use of the funds of the bank by these officers, it failed. On complaint of the directors of the bank, an indictment had been found against her son James for embezzlement, and a criminal prosecution was also threatened by them against her husband. A meeting of the stockholders was afterwards held, at which subscriptions were made to raise a fund for the payment of depositors or creditors of the bank. George D. Piddle at first subscribed 02,000, and afterwards increased it to $4,000. He also subscribed 02,000 in the name of his mother. He testified substantially that his increased subscription, and the one in the name of his mother, were made at the request of Hall, the defendant in error, who was a director of the bank, and on his statement that he believed and was satisfied, it would stop the prosecutions, if the witness would get his mother to pay the sums subscribed. Without authority from his mother he subscribed in her name, with that understanding, and was to so inform her. On his notifying her, she answered, if it would stop the criminal prosecutions, she would agree to it.

Hall and Dr. Mowry were appointed by the bank a committee to call on Mrs. Piddle to induce her to execute the mortgage for the $6,000. George D. accompanied them. He testifies that she said to them that she would not sign the mortgage until the criminal matters were fixed in black and whitethat Dr. Mowry told her he was satisfied this would settle the whole criminal trouble,” and Hall said, I firmly believe, if you would sign this mortgage, that it will result in settling all this criminal trouble, and if you do not sign it, it will be the worst thing you ever did.” Thereupon she agreed to execute it, and did so the next day. That she agreed to the subscription with the understanding that they would not appear against her son nor prosecute her husband. The evidence of Mrs. Piddle substantially corroborates that of the son; but she states some other facts. She says, while Hall said he would not guarantee that those men would not go on with the prosecution, as he had no right to, yet he was almost certain they would not, and that on his telling her if she did not sign the mortgage it would be the worst thing she ever did, “ that frightened me, and I signed it against my own will and judgment.” She further testified that she signed it for the purpose of saving her son and her husband, and would not have signed if she had known the prosecutions were to go on anyhow.” She expected the prosecutions -would go on if she did not sign, but would not if she did sign.

Hall testified in chief, that at the interview referred to with Mrs. Piddle the matter of the criminal prosecutions was introduced, and that he said to her he thought if the subscriptions made were carried out in good faith, it would end these troubles, although he had no authority from any person to say so. On cross-examination he testified, “We talked about the criminal prosecution, and it was generally including the whole, that all those difficulties, prosecutions, whatever they might be, that they would end.” lie further told her if she executed the mortgage or carried out the subscription, that would be the end of the matter. It was proved that after the execution of the mortgage a nolle prosequi was entered in the prosecution against James, and o'n complaint of the directors of the bank an indictment was found against him and his father, the son and husband of Mrs. Riddle, for conspiracy, on which they were tried, convicted, and sentenced.

Some of the facts narrated are denied by -the witnesses of the defendant in error; but the credibility of the witnesses and the weight of the evidence are questions for the jury. The main complaint is that the jury was not permitted to pass on the evidence.

It is an undoubted fact that Mrs. Riddle was induced to give this mortgage on her land to secure the payment of subscriptions for which she was not legally bound to pay anything. There is certainly some evidence that the operative inducement and controlling consideration in her mind were to stop and prevent the prosecutions begun and threatened against her son and her husband. Her confidence and assurance that such would be the effect of giving the mortgage were derived from the two persons who acted as a committee from the bank. To such an extent did Hall assume power and authority to stipulate in regard to all the conditions on which she should give a mortgage that it was given to him. He it was, that she testified, used the strongest assurance that on her giving it, all prosecutions would be stopped, and who frightened her by suggesting alarming consequences if she refused.

A mortgagee is not the purchaser of an estate. He is simply a lien creditor, holding the mortgage as security for the payment of the bond therein recited. This mortgage was assigned by Hall to the trustee of the bank. Although it was originally designed for the benefit of the latter, yet for all purposes of defence connected with the giving of the mortgage, the bank stands on no higher ground than Hall occupied. Not only is he the legal party of record: but when the bank seeks to enforce a contract made by its agent, for its benefit, it is bound by the acts of the agent which affect the validity of the contract in the making thereof: Swope v. Jefferson Fire Ins. Co., 8 W. N. C. 481.

If this mortgage was executed in consideration of an agreement to stifle or desist from a criminal prosecution against’ the husband and son of Mrs. Riddle, or against either of them, or if that was a part of the consideration, it was an illegal consideration which destroys the validity of the mortgage. To constitute a defence on this ground, the agreement must be found. Whether there was such in this case is to be decided by a consideration of all the facts and circumstances given in evidence. The fact that Mrs. Kiddle was under no legal liability to give the mortgage or to pay the debt therein referred to, and the reasons urged"by Hall and Mowry to induce her to _give it, are proper to consider. The inquiry need not stop with a critical view of the words used by Hall and Mowry; but due regard should be given to the meaning they were intended to convey, and reasonably did convey.

If they used the language stated with the intention of thereby assuring Mrs. Kiddle that all criminal proceedings would be stopped if she would give the mortgage, and she, relying on that assurance, and in consideration thereof, did give it, the question is for the jury to find whether that did not enter into and form a part of the agreement under which the mortgage was given: National Bank of Oxford v. Kirk, supra. Was or was not it understood by both parties to the mortgage that a part of the consideration was that the criminal proceedings should be stopped % If it was, it matters not whether they were stopped or prosecuted to judgment. The agreement itself vitiated the mortgage as it rested on an illegal consideration.

If, however, neither Hall nor Mowry did agree that no criminal proceeding should be had against either her husband or her son; yet, if their allegations and representations relating thereto were intended to deceive and did deceive Mrs. Kiddle, and she, relying on their statements that none would be had, and by reason thereof, did execute the mortgage, the subsequent proceedings against her husband and son released her from its payment.

It"was said by Mr. Chief Justice Gibson, in Frevall v. Fitch, 5 Whar. 325, “ It is an elementary principle that an agreement founded in a false conception1 is a nullity in respect to the party who misconceived, because he assented to it, not absolutely, but on a condition not verified by the event.”

In the present case the rights of no third persons have intervened, so as to exclude any defence Mrs. Kiddle may have, arising from the facts and circumstances under which the mortgage was given.

We discover no sufficient reason for rejecting the evidence covered by the first assignment: but substantially it was after-wards received, so no harm resulted from the first rejection. We discover no error in the third assignment; nor, under the evidence, do we see error in refusing to affirm the point covered by the fourth assignment. The fifth and sixth assignments are sustained, and the second so far as the error therein alleged is in conflict with this opinion.

Judgment reversed, and a venire facias de novo awarded.


source: Caselaw Access Project

author: Mr. Justice Trunkey

license: Public Domain

text:
    Louise Jones’s Appeals.
    1. Distribution accounts should not be blended with administration accounts. An administration account properly settled shows nothing more than the balance due legatees or distributees under the intestate laws, after payment of the debts and expenses of settling the estate.
    2. The Act of October 13th 1840, Pamph. L. (1841) 1, fixing five years as the limitation of time within which a bill of review will be granted, applies equally whether the review be demanded for error in law apparent in the decree, or for new matter which has arisen since the decree, or for new proof that has come to light since the decree.
    3. It is the duty of an administrator in distributing the estate of his decedent under the intestate laws to take from the distributees refunding bonds, and if he fails to do so he will be adjudged guilty of a devastavit and held personally liable to a creditor of the decedent for the whole amount thus paid out.
    4. The fact that such creditor omitted to appear and except to the distribution upon the settlement of the administrator’s account is not such laches as will exempt the administrator from such liability.
    5. Where an administrator’s account is filed combined with a distribution account, the decree of the court confirming the same will not be held to authorize distribution by the administrator without taking refunding bonds in the manner provided by law.
    6. Whether in such case the confirmation of the account is an adjudication of the distribution, not decided.
    7. An order of the Orphans’ Court to the effect that a decree confirming an account shall be opened and set aside and a rehearing had, is not a final decree from which an appeal can be taken.
    November 4th 1881.
    Before Sharswood, C. J., Mercdr, Gordon, Trunkey, Stekrett, and Green, JJ. Paxson, J., absent.
    Appeals from the Orphans’ Court of Allegheny county: Of October and November Term 1881, Nos. 164 and 255.
    These were appeals of Louise Jones, administratrix of the estate of Samuel Jones, deceased, from two decrees of the Orphans’ Court of Allegheny county, one opening and setting aside the appellant’s account as administratrix, the other surcharging her with the sum of $22,567.70.
    The facts of the case were as follows: — On October 30th 1852, Samuel Jones became surety upon an official bond filed by H. B. Wilkins and £L Hepburn as guardians of the estate of Mary C. Livingstone and Eugene Livingstone in the sum of $20,000. On September 24th 1862 said Jones died intestate leaving a widow Louise and five minor children, viz., Beverly, Stella, Howard, Carrie and Jesse. Letters of administration upon the estate of said Jones were duly granted to his widow. On Decetnber 5th 1870 Mrs. Jones filed her final account as administratrix, which was confirmed nisi, and on December 16th 1870 confirmed absolutely.
    That account showed some $56,550 of personal property in the hands of the accountant, out of which she had paid debts and liabilities of the estate some $33,982.30, and showed a distribution of the remaining $22,567.70 among the widow and children according to the provisions of the intestate law. The shares of two of the children, Beverly and Stella, who had come of age between the death of their father and the filing of the account, had been paid in full to them, and the shares of the other children had been paid to their guardian. Mrs. Jones took no refunding bonds for the amounts thus distributed.
    Eugene Livingstone had died intestate in 1862, leaving to survive him his sister the said Mary O. Livingstone and his father Eugene Livingstone. His said father released all his interest in his son’s estate unto the said Mary, whereby the said Mary became solely entitled to said estate. Said Mary after-wards intermarried with Maturin L. Delafield.
    On April 28th 1876 LI. B. Wilkins, as surviving guardian of the said Mary C. Delafield, filed his final account. Exceptions were filed to said account, and by decree of the Orphans’ Court entered September 7th 1878 said Wilkins was found to have in his hands the sum of $115,905.87 belonging to liis ward, which he was ordered and directed to pay over to her. Said Wilkins failing to pay said sum, and being insolvent, suit was instituted upon his official bond whereon Jones was surety. This was the first notice or knowledge that Mrs. Jones had of the existence of such bond.
    This action was so proceeded in, that a final judgment for the amount of the penalty of said bond, $20,000, was on November 1st 1879, obtained against Mrs. Jones, as administratrix of the estate of ¡S. J ones, deceased.
    Subsequently, on March 20th 1880, in the Orphans’ Court, Delafield and wife filed their petition, setting forth the recovery of the foregoing judgment, that Mrs. Jones as administratrix declined to pay the same, and asking a citation against her and the heirs of S. Jones. Their prayers for relief were: (1st) That Mrs. Jones as administratrix should be ordered to pay the amount of said judgment. (2d) Or that Mrs. Jones, Beverly Jones, Stella Jones, Howard Jones, Carrie Jones, and Jesse Jones be ordered to refund and pay to the administratrix $20,000 with interest, and that the administratrix be ordered thereupon to file an account in the Orphans’ Court for the purpose of having the amount so paid to her distributed to the parties entitled thereto, and that said widow and heirs be restrained and enjoined from parting with or incumbering any real estate that had descended to them from S. Jones, their father.
    To this petition and citation Mrs. Jones answered that she had not in her hands, as administratrix, any moneys or personal property of the estate of S. J ones, deceased, that she had filed her final account of said estate nine years before, which account and distribution shown thereby, had been duly confirmed by the court, on December 16th 1870; that the moneys and personal property, in accordance with said account, had been long since paid over to and distributed among the widow and heirs of said Jones. She also set up in her answer the laches and long delay of the petitioners in making known their claim; that Mrs. Delafield had been of full age several years before said final account and distribution of the Jones estate had been made, and had neither excepted thereto, nor given any notice of the existence of said bond, or of any supposed liability thereunder. The heirs filed answers containing similar averments.
    After the filing of these answers the petitioners obtained leave of court to amend their petition by praying that Mrs. Jones’s account as administratrix be opened and set aside, and that the account be reaudited and that petitioners be permitted to prove their claims.
    Upon the hearing, the Orphans’ Court decreed that the decree of confirmation of the account of Mrs. Jones, administratrix of S. Jones, deceased, as to the moneys and property divided among the widow and children, should be opened and set aside, and that the clerk should have due advertisement made according to law, of said account, and that the same should be reaudited.
    From this decree Mrs. Jones took the first of the present appeals, assigning the decree for error.
    On August 24th 1881 Delafield and wife filed exceptions in the Orphans’ Court to the account of Mrs. Jones, administratrix, which continued to stand just as when filed and approved in 1870. Under these exceptions testimony was adduced by both parties, showing the same state of facts substantially as above set forth, and on August 25th 1881 the court, in' an opinion by Hawkins, P. J., entered a decree surcharging Mrs. Jones, administratrix of S. Jones, deceased, with the sum of $22,567.70, and awarding the sum of $22,000 to the said judgment of Delafield and wife.
    Mrs. Jones thereupon took the second of the present appeals, assigning for error the decree of the court.

      George 8hiras, Jr., for the appellant. —
    An administrator’s distribution account confirmed by a decree of the Orphans’ Court can only be disturbed by a bill of review within five years: Hendrickson’s Estate, 2 Pitts. Rep. 360 ; Commonwealth v. Severn, 3 W. N. C. 303; Kline’s Appeal, 5 Norris 367; Charlton’s Appeal, 7 Norris 476.
    In the present case, the decree of the Orphans’ Court, confirming the account filed by the administratrix of S. Jones, deceased, which account exhibited a distribution of the personal property of the decedent, among his widow and children, was a final decree of distribution within the scope and meaning of the authorities. The fact that the decree was confirmatory of a distribution already made does not deprive it of its character as a, definitive and final decree. Ratification by a court of an act which the court would, on application, have approved or directed, is of the same legal efficacy as if it had preceded the act.
    Assuming, then, that this was a decree that protected Mrs. Jones, and that the appellees could not have been heard to impeach the decree except by a bill of review, there were four reasons why the court below erred in entertaining the bill of review.
    1st. More than five years had elapsed from the decree of confirmation of Mrs. Jones’s account; and hence the court had no power to open it. Hendrickson’s Appeal, supra.
    2d. It distinctly appears, that the balance, with which it is now sought to surcharge Mrs. Jones, had been actually paid and discharged by her years before the filing of the petition or bill of review. Russell’s Appeal, 1Ó Casey, 258 ; Cramp’s Appeal, 2 W. N. C. 391; Stewart’s Appeal, 5 Norris 149.
    3d. Even if the application had been made in time, and even if it appeared that the original decree had not been executed by the payment of the balance before the bill of review was filed, yet the' court should have refused the application to open the decree, because made too late and not for ecpiitable reasons.

      (a.) The petition does not disclose that there is any error apparent on the face of the decree. It is true that the combination of an administrator’s account and a distribution account has been censured by thq Supreme Court, but until very lately it has been the universal practice to make such combinations where the estates are solvent. It is, at any rate, merely bad practice, and not such an error in law as affords ground for a bill of review.
    (A) The allegation of after-discovered evidence or facts is not sustained. To say that the discovery of the dereliction of Wilkins is an after-discovered fact is a begging of the question. What is meant by after-discovery of a material fact is discovery, after entry of the decree, of a pre-existing-fact, which, if known to the court, would have affected the decree. But nobody ever heard it suggested that the subsequent taking place of a fact would authorize a court to set aside a previous final decree— particularly when such previous decree had been executed by the payment of moneys to those thereby declared to be entitled to them.
    (<?.) But, at all events, the court will not disturb a decree of such long standing unless constrained to do so by strong equities. And in the present case, the equities are with the widow and children of the decedent. He was merely a surety. The default of his principal did not take place during his life, nor till years afterward.
    The distribution and decree relied upon were not made till years after the death of the surety, and when the existence of the bond, and of any liability on account of it were not dreamed of. The laches was that of the exceptants, and not that of the accountant.
    Lastly, there was neither error of law apparent on the face of the decree, nor after-discovered evidence; and hence there was error in opening this decree.

      Hill jBwgwm and D. T. Watson, for the appellees. —
    The appellant did not take refunding bonds as she should have done, and was therefore guilty of a devastavit. Musser v. Oliver, 9 Harris 362; Swearingen v. Pendleton, 4 S. & R. 394. The decree of the court confirming her account as administratrix cannot be construed to authorize a distribution without taking refunding bonds: Tams v. Lewis, 6 Wright, 410; Lewis and Nelson’s Appeal, 17 P. F.' S. 165 ; Pry’s Appeal, 8 Watts 254; Sergeant’s Heirs v. Ewing, 12 Casey 163; Whelen’s Appeal, 20 P. E. S. 428; Keech v. Rhinehart, 10 Barr 242; Thomas v. Riegel, 5 Rawle 266. Appellant is personally responsible for the amount of her devastavit. It was error to combine the administration and distribution accounts, and the decree of the court thereupon must be considered as referring only to and being only confirmatory of the administration account : Rittenhouse v. Levering, 6 W. & S. 200; Keech v. Rhinehart, 10 Barr 242; Elory v. Becker, 2 Barr 470; Yundt’s Estate, 6 Barr 36; Ake’s Appeal, 9 Harris 320; App v. Dreisbach, 2 Rawle 287; McLenachan v. Commonwealth to use, 1 Rawle 360; Hendrickson’s Estate, 2 Pittsburgh Rep. 360; Commonwealth ex rel. v. Severn, 3 W. N. C. 303; Whelen’s Appeal, 20 P. E. S. 428; Stewart’s Appeal, 5 Norris 150; Charlton’s Appeal, 7 Norris 476. ' The decrees of the court were therefore clearly right.
   Mr. Justice Trunkey

delivered the opinion of the court, January 2d 1882.

Samuel Jones died in 1862, leaving a widow and five children. In 1870 the administratrix of his estate filed her account, which was confirmed by the court, showing that a large amount of personal property had come into her hands, out of which she had paid certain debts and liabilities, leaving a balance of 822,567.70, which she had distributed to the widow and heirs. On November 8th 1852, Jones became surety upon a guardian’s bond in the sum of $20,000. By final decree in 1878, it was determined that the guardian had in his hands the sum of $115,905.87 of the money of Mary C. Delafield, which sum he wras ordered to pay to her. .He was insolvent. In 1879, Mrs. Delafield obtained judgment against the administratrix of Samuel Jones, deceased, for the amount of the bond. The administratrix had no knowledge or notice of the existence of this debt until in the year 1877.

It is not pretented that Samuel Jones, if living, would have a defence, at law or in equity, against the payment of the debt; nor it is alleged that it is a debt which his administratrix was not bound to pay out of the moneys of the estate. But it is claimed that, under the Act of October 13th 1840, the confirmation of the account more than five years prior to the presenting of the petition by Mrs. Delafield protects the administratrix, and, also, that the laches of the petitioner in bringing-knowledge of the existence of the debt to the administratrix relieves her from the consequences of the devastavit.

In passing it is sufficient to note that the blending of a distribution account with an administration account has often been condemned; an administration account, properly settled, show's nothing more than the balance due legatees, or distributees under the intestate laws, after payment of the debts and expenses of settling the estate. For the purposes of this ease, it may be taken that the court approved the distribution set forth in the account.

As the petition, answer and pleadings, in proceedings in the Orphans’ Court, are regarded as forming part of the decree, so is an administration account. The Act of October 13th 1840, not only gives the right of review' to a party in interest upon proper showing, but fixes a limitation to petitions of review. It is none the less a limitation, because it does not begin to run in favor of an accountant who has perpetrated a fraud upon au interested party until discovery of the fraud by such party. Nothing in the facts of this case shows fraud, or other matter which tolls the limitation. Whether the review is demanded for error in law apparent in the decree, or for new' matter which has arisen after the decree, or for new proof that has come to light since the decree, the statutory limit applies. The error in blending the distribution and administration accounts appears in the decree. If a decree, or part thereof, be void, it would be so treated without reference to this statute.

The right of creditors to be paid out of a decedent’s goods was recognized, both at common law and by statute, long before the right of succession was secured to his children and kindred. When a man dies in Pennsylvania, his estate, real and personal, comes within the jurisdiction of the Orphans’ Court, to be administered, first of all for the benefit of his creditors, and next for legatees, devisees, and heirs: Horner & Roberts v. Hasbrouck, 5 Wr. 169. The personal estate is the primary fund for the payment of debts, but both personalty and realty are carefully hedged by statute against their appropriation to the prejudice of creditors. Before the kindred of a decedent shall be entitled to receive the proceeds of the sale of his real estate, they shall give refunding security as directed by § 45 of the Act of February 4th 1834, and § 2 of the Act of May 23d 1871. § 38 of the Act of 1834, P. L. 80, provides that no administrator shall be compelled to make distribution of the intestate’s goods until after one year from the granting of the letters. Sections 39,40 provide for distribution of assets, after deducting all demands which have been made known to the administrator, under the direction of the Orphans’ Court, and § 41 declares that before any person shall be entitled to receive any share in the distribution, he shall give security to be approved by said court, with condition that if any debt or demand shall afterwards be recovered against the estate of the decedent, he will refund the ratable part of such debt or demand, and of the costs and charges attending the recovery of the same.” Where such security shall be taken the administrators “ shall not be liable for the assets so paid or distributed, in respect to any claim or demand upon the decedent not previously made known to them § 57. Administrators may make distribution, without application to said court, upon such security as may be satisfactory to them, nevertheless, at their own risk: § 58.

Refunding bonds are not required of a creditor to entitle him to receive his debt. Where a decree of distribution is made to and among creditors, though a creditor of record who had not given the administrator actual notice of his claim, was omitted, the administrator may safely pay the assets in accordance with the decree: Cramp’s App., 31 P. F. S. 90. The bond is not for the benefit of legatees, or distributees under the intestate laws. Where money has been paid by an administrator in pursuance of an order or decree of the Orphans’ Court, a person entitled to a distributive share, or legacy, cannot charge the administrator personally for such money, nor is he entitled to a review as respects money so paid: Russell’s Administrator’s App., 10 Casey 258; Stewart’s App., 5 Nor. 149; Charlton’s App., 7 Nor. 476; Hendrickson’s Estate, 2 Pitts. R. 360.

Compliance by administrators with the Act of 1834 secures creditors of the estate in receiving their claims, notwithstanding payment of assets to legatees or distributees. “ The object of the statute hi requiring refunding bonds was to protect claims that might arise through mistaken or fraudulent settlements, as well as such that had not yet come to light. The only safe line of conduct for executors or administrators to follow is, to obey all the requisitions of the law. Governed by its directions, they will be protected by its shield. Disobeying its mandates, they must suffer its penalties Musser v. Oliver, 9 Har. 362. It appeared in that case that Jacob Moltz, who was guardian of Barbara Mann, after she became of age in 1835, settled with and took her receipt in full; Moltz died in 1838; his administrators settled their account in 1843 and distributed and paid the balance to the widow and heirs; in 1844 a petition in behalf of said Barbara was presented to the Orphans’ Court, praying that Moltz’s administrators be cited to settle an account of their intestate as guardian, resulting in a decree that a balance was due her of $1,972; and the administrators were fixed with a devastavit. Prior to 1834, there was a similar statute, under which administrators who distributed the assets without taking refunding security were held personally liable to creditors. Among the cases recognizing such liability are Thomas v. Riegel, 5 R. 266, and Pry’s App., 8 Watts. 253. Whenever the question has arisen in this state, it has been ruled that the payment of assets to distributees under the intestate laws, without taking security to refund as prescribed by statute, is so contrary to the duty of administrators as to render them personally liable to creditors to the extent of such payments. Their liability under these circumstances is fixed by the plain terms of the statute. The security required is specially for protection of creditors whose claims are unknown by the administrators; and, before they were authorized to take such security, there was no mode by which they could distribute to heirs and relieve themselves of liability to such creditors.

It is unnecessary to consider whether the confirmation of the account was an adjudication of the distribution. Conceding that it was, the decree must be interpreted in the light of the statute. There is no conflict, no inconsistency between the statute and the decree. Had the administratrix taken security, approved by the court, her liability would have- ceased. She paid without security, and it was at her own risk. It would be absurd to infer, from anything in the account and its confirmation, that the court directed the money to be paid without security and in violation of law. If the meaning of the decree were doubtful, which it is not, it should be understood in the sense which is lawful, not that which is wholly outside the power of the court. The decree merely directed the distribution; the law-declared the terms upon which the distributees were entitled to receive the money and the administratrix could pay it without risk.

The petitioner’s judgment is conclusive of the legality of the claim against the estate. No statute of limitation bars it. No presumption of payment arises from lapse of time, or other thing. The law secures to creditors as full right to recover their claims against the estate of a decedent, as they would have if he -were living. If the administratrix still had the assets in her hands, her duty to pay could not be denied. It is no fault of the petitioner that the assets have been distributed without refunding bonds. No act or laches on her part, exempts the administratrix from-the consequences of the devastavit. Long established principles impel us to the conclusion reached by the court below. It may be a hardship upon the widow and children of the decedent to pay this debt, but it is the inevitable result of his executing the bond, the guardian being insolvent.

In an action at law against the administratrix to charge her personally with the debt, the admitted facts would be decisive. The better place to enforce the right is in the Orphans’ Court, which has jurisdiction of the accounts of administrators, and of the estates of decedents for creditors. It is well settled that a creditor may enforce payment of a debt owing by a decedent’s estate in the Orphans’ Court.

Although we are of opinion that the petition was too late for a review of the decree confirming the account, yet without review the petitioner’s right that the administratrix be charged with the assets improperly distributed, to the amount of her judgment, is clear’, and the mode of doing it which was adopted reached the same result as if the order had been made upon the original petition. That form of procedure prejudiced no one’s rights and is no cause for reversal.

Two appeals were taken: one to the decree ordering a hearing, and the other to the final decree. In the view we have taken, the case has been considered upon the appeal to the final decree, and this would have been so had we thought the review was rightly granted. The Act of 1810, P. L. 1, gives “ like right of appeal to the Supreme Court as in other cases, except that the appeal shall be taken under the provisions of this act within one year after the decree made on the petition of review.” The granting of a rehearing of so much of an account as is alleged to be error, is preliminary to the inquiry respecting such errors, and if the decree be against the petitioner, the original decree stands as it did before the petition and during tbe time of tbe rebearing. If tbe order for a rebearing be called a decree, it is merely interlocutory. The refusal to grant a rehearing is final against tbe petitioner; but if a rebearing be granted, the questions therein are heard and considered, and then tbe decree is made upon tbe petition, from which tbe aggrieved party may appeal within tbe time limited. It is not the intendment of the statute to allow an appeal to an interlocutory decree, or order. '

Decree affirmed, and appeal dismissed at the costs of tbe appellant.


author: Mr. Justice Green

text:
    McCutcheon’s Appeal.
    1. By virtue of the provisions of the Act of April 15th 1868, § 1, Pampli. L. 103, where any person makes provision for his family or dependent relatives by taking out a policy of insurance on his own life in their name and for their benefit, the title vested in such beneficiaries is good notwithstanding the claims of the creditors of the insured. The question of good faith or fraud upon the rights of such creditors by the insured does not arise and cannot be raised in such case.

      2. Elliott’s Executors’ Appeal, 14 Wright 75, commented on and distinguished.
    3. Where, however, a person takes out a policy of insurance upon his own life in his own name and subsequently assigns the same to his wife, child or other dependent relative, the title of such assignee may under the terms of the above statute be attacked by the assignor’s creditors, if the assignment has been made in fraud of their rights.
    4. The mere fact that the assignor in such case is insolvent at the time of making the assignment dobs not warrant the inference that the assignment was in fraud of creditors. It may, notwithstanding, have been made in good faith and without fraud.
    5. A. took out a policy of insurance on his own life payable to his wife, and becoming subsequently indebted to various parties, induced her by fraud and coercion to assign said policy to B. as collateral security for an antecedent debt duo from A. to B. B. was ignorant of the fraud and coercion, and paid several premiums on the policy, and afterwards, A. proving insolvent, was active in inducing A.’s creditors to sign a composition agreement which was accordingly effected. B. concealed the fact that the policy had been assigned to him, and there was no evidence that the other creditors of A. knew it. Afterwards A. died, in a contest between his widow and B. for the amount of the policy, Held, that B. was not to bo regarded as an innocent purchaser for value, and was therefore entitled only to a return of the premiums paid by him with interest thereon, and that the widow of A. was entitled to the fund. Held, further, that as none of A.’s other creditors had attacked the validity of the assignment to B., it was not affected by the circumstance that B. concealed the fact of the assignment from such other creditors.

      November 5th 1881.
    Before Sharswood, C. J., Mercur, Gordon, Trunkey, Sterrett and Green, JJ. Paxson, J., absent.
    Appeal from a decree of tbe Court of Common Pleas No. 1, oí Allegheny comity: Inequity: Of October and November Term 1881, No. 294.
    This was an appeal by Clarissa McCutcheon from a decree overruling her exceptions to the report of a master and confirming the same.
    A bill in equity for an interpleader was filed by the .¿Etna Life Insurance Company against Clarissa McCutcheon, and Sarah Ann Wilson, executrix of John Wilson, deceased, to determine the title, as between the defendants, to a fund due by the said insurance company upon two policies of life insurance, upon the life of William McCutcheon, deceased. The defendants filed separate answers, and, after hearing, the court entered a decree of interpleader, ordered the fund in controversy to be paid into court, and appointed an examiner and master (S. A. McClung, Esq.) to take testimony and report the facts and a decree. The master found the facts to be substantially as follows:
    In 1865 or 1866 William McCutcheon, being then solvent, effected an insurance on his life in the JEtna Life Insurance Company for $10,000 in favor of his wife, Mrs. Clarissa McCutcheon. On July 5th 1871, he surrendered the said policy to the company and received in exchange therefor two policies of insurance on his life, one a paid-up policy for $835, the other for $10,000 upon an annual premium, both in favor of his wife. At the time of this exchange of policies in 1871, McCirtcheon was insolvent.
    On September 7th and 12th 1872, William McCutcheon procured from his wife assignments of these policies to John Wilson, to secure an antecedent indebtedness of McCutcheon to Wilson. Notice was given by Wilson to the company, and the premiums upon the $105000 policy were paid by John Wilson and by his executors after his death.
    Soon after the assignment of the policies to Wilson, he attended a meeting of the creditors of McCutcheon, and, representing himself to be the largest creditor, promoted and joined in a composition, whereby McCutcheon was released from such portion of his debts as his assets could pay. He did not make known to the other creditors the fact that he had received these assignments, and they did not know it.
    William McCutcheon died July 14th 1879. His widow immediately notified the insurance company that she claimed the proceeds of both policies of insurance on the ground that tlie alleged assignments to Wilson had been procured from her involuntarily by coercion on the part of her husband and without any consideration therefor. The master reported that her allegation of coercion was established by the evidence.
    Sarah Ann Wilson, executrix of John Wilson (who had died before McOutcheon), also demanded payment from the insurance company of the amounts of both policies. The insurance company thereupon filed their bill for an interpleader.
    The master awarded to Mrs. McOutcheon the proceed of the $835 paid-up policy, on the ground that the assignment thereof by Mrs. McOutcheon to Wilson, having been obtained by fraud and coercion and without consideration, was void, and passed no title.
    The master awarded the proceeds of the $10,000 policy to Sarah A. Wilson, executrix of John Wilson, deceased, on the ground that McOutcheon, having been insolvent at the time he effected it, could not by talcing it out in the name of his wife, withdraw it from the claims of his creditors, of whom Wilson was the only one now claiming the fund. The master reported: “The first section of the Act of April 15th, 1868, P. L. 103, is broad in its terms, but is of course not intended to cover a case of actual fraud. If it covers such a case as this, then a man hy borrowing money and investing- it in life policies for the benefit of his family, and trusting to the Act to protect the policy against even the creditors who loaned him the money to pay the premiums, can enrich his family by a remarkably simple process.”
    The master refused to rule, as contended by Mrs. McOutcheon, that the conduct of Wilson in the composition proceeding estopped him and his personal representatives from claiming as against Mrs. McOutcheon any part of the proceeds of these policies.
    Exceptions filed by Mrs. McOutcheon to that portion of the master’s report awarding the proceeds of the $10,000 policy to Sarah A. Wilson, executrix, were overruled, and a decree entered confirming the report, and distributing the fund in accordance therewith, from which decree Mrs. Clarissa McOutcheon took this appeal.

      George Shims, Jr. (O. G. Dieltey, with him), for the appellant. —
    The master and the court below failed to give effect to the Act of April 15th 1868, § 1 (Purd. Dig. 802), which provides : “ All policies of life insurance, or annuities on the life of any person which may hereafter mature, and which have been or shall be taken out for the benefit of, or bona fide assigned to the wife or children or any relative dependent upon such person, shall be vested in such wife or children or other relative free and clear from all claims of the creditors of such person.”
    Even in the absence of such a statute, this policy could not have been successfully attacked for fraud by creditors. The case of Elliott’s Executors’ Appeal, 14 Wright, 75, which was decided in 1865, before the passage of the Act, holds, it is true, that where an existing policy, in terms payable to the personal representatives of the assured, is by him, when insolvent, assigned to his wife and the premiums subsequently paid by him, such assignment will be deemed fraudulent as respects creditors. But the court was careful to say that the decision must not be understood as holding that if the policy had been by its terms made payable directly to the wife, such policy would be void, because the husband, when he paid the premiums, was insolvent.
    The fact found by the master, that the assignment of both policies was procured by fraud and coercion, cannot now be questioned. Mrs. MeOutcheon’s rights, therefore, are the same as if it had never been executed. Even if the assignment had passed any title to Wilson, he was estopped from asserting it by his conduct at the creditor’s meeting: Cullingworth v. Loyd, f'2 Beavan 385; Ex parte Sadler & Jackson, 15 Vesey Jr. 52; Russell v, Rogers, 10 Wendell 473.

      John Q. Bryant, for the appellee. —
    The evidence showed that McOutcheon gave his note for the first premium due on the policy, on which he paid only $156. It was subject to lapse, and of no value, when Wilson, a bona fide creditor, lifted McOuteheon’s note for the premium and received the assignment from Mrs. McOutcheon, knowing nothing of any coercion by her husband. Wilson and his executrix paid on the policy altogether nearly $5,000 in premiums. He was a bona fide purchaser for value without notice. The present value of the policy accrued solely by virtue of the payment of premiums by Wilson; Mrs. McOutcheon, who was entitled, at most, only to the value of the policy at the date of the assignment (which was nothing), cannot now claim its' fruition.
    . The Act of 1868 cannot be invoked to maintain such a claim. The rights of the parties are to be determined upon equitable principles as upon a bill to cancel the assignment. The decree was equitable, and should not be disturbed even if the master based it on erroneous grounds.
   Mr. Justice Green

delivered the opinion of the court, November 21st 1881.

In Elliott’s Executors’ Appeal, 14 Wr. 75, it was carefully said that we did not intend the doctrine of that case to apply to the case of policies effected directly to the wife. Head, J., on p. 83, used the following language, We are to be understood in thus deciding this case that we do not mean to extend it to policies effected without fraud directly and on their face for the benefit of the wife and payable to her; such policies are not fraudulent as to creditors, and! are not touched by this decision.”

The policies in that case were effected in the name of the husband and by him assigned to a trustee for his wife at a time when he was totally insolvent. They were held to be valuable dioses in action, the property of the assured, liable to the payment of his debts, and hence their voluntary assignment operated in fraud of creditors, and was void, as against them, under the statute of 13th Elizabeth.

Here, however, the policy was effected in the name of the wife, and in point of fact, was given under an agreement for the surrender of a previous policy for the same amount, also issued in the wife’s name.

Now the Act of 15th xlpril 1868, Purd. Dig. p. 802, expressly provides that, “ All policies of life insurance, or annuities on the life of any person, which may hereafter mature, and which have been or shall be taken out for the benefit of, or bona fide assigned to, the wife, or children, or any relative dependent upon such person, shall be vested in such wife or children, or other relative, free and clear from all claims of the creditors of such person.” The plain meaning of this language is that protection shall be given to the wife, children, or dependent relative of the assured in two distinct classes of cases. First, those in which the policy was originally issued, or taken out, for the benefit of the persons named: and, second, those in which policies previously issued shall be, in good faith, assigned to those persons. The question of good faith, or fraud, only arises in the latter class: that is, when the title of the beneficiary arises by assignment. When it exists by force of an original issue, in the name, or for the benefit, of the beneficiary, the title is good notwithstanding the claims of creditors. In other words, the very object and purpose of the act was, to enable insolvent persons to make provision in this way for their families or dependent relatives, which should be good and effective as against, and free and clear of, all claims of creditors. There is no anomaly in this, nor any conflict with the letter or spirit of the statute of Elizabeth, because in such cases the policy would be at no time the property of the assured, and hence no question of fraud in its transfer could arise, as to his creditors. It is only in case of the assignment of a policy that once belonged to the assured that the question of fraud can arise under this act. If the assignment was made in good faith and without fraud it would prevail, even against creditors, but if not, they could avoid it. It was just here, in failing to observe this distinction, that the learned master and court below fell into error. The master inferred the fraud from the mere fact of insolvency, but that inference, as we have seen, is not warranted in such a case as this. In all other respects, the findings and conclusions of the master were in favor of the appellant, and we concur in their correctness.

No appeal has been taken from the finding that the assignment by the appellant to Wilson was obtained by undue influence and coercion of her husband, and, therefore, that fact must be now considered as conclusively determined. Nor do we see any reason to doubt the correctness of the master’s finding on this subject, even if it were an open question. We consider that he is equally correct in his conclusion that Wilson cannot be regarded as an innocent purchaser for value. He merely took the assignment as collateral security for a pre-existing debt or liability. He paid the maturing premiums voluntarily, and is of course entitled to have them returned with interest from the time of their payment. The master also rightly determined that as none of McCutcheon’s creditors were impugning the validity of the assignment to Wilson, it was not affected by the circumstance that he concealed the fact of his holding it from them, when the composition was effected. It follows that the decree of the court below must be reversed and modified.

Decree reversed, and record remitted for further proceedings, and it is ordered that the fund in the coiu’t below be distributed by awarding to Sarah Ann Wilson, executrix of John Wilson, deceased, the full amount of all premiums paid by him and by his said executrix, together with interest on such payments from the time they were respectively made, and the remainder of the fund to (Jlarissa McCutclieon, the appellant, the costs of this appeal to be paid by the appellee.


text:
    McAleer’s Appeal.
    A. held certain real estate in trust for his wife for life and after her decease or remarriage in trust for her children by him. The deed of trust contained a power of sale to A. as the natural guardian of his children “ for such sum or sums of money as lie might deem best for the interests of his said children.” It also specially provided that A.’s wife should have no power of sale nor any right to dispose of the profits of the land in any other matmor than that specified by the deed of trust. A. and his wife afterwards executed a mortgage of the land, and A. then died. The mortgage being subsequently sued out, the property was sold thereunder, producing an amount greater than the mortgage debt. In a contest for the balance over and above the amount of the mortgage debt between the judgment creditors of A. and the trustee who had been substituted in A.’s place under the deed of trust. Held, that A. having executed the mortgage solely by virtue of the power of sale conferred upon him by the deed of trust the proceeds of sale under said mortgage were to be considered as belonging to the same persons and to be subject to the same trusts as the land itself, and not to A. individually, and that therefore the fund should bo awarded to the substituted trustee.
    November 7th 1881.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey, Sterrett and Green, JJ.
    Appeal from a decree of the Court of Common Fleas No. 2, of Allegheny county: Of October and November Term 1881, No. 288.
    This was an appeal by Mary Ann McAleer, trustee, from a decree of the said court, dismissing her exceptions to, and confirming the report of an auditor in the distribution of the proceeds of a sheriff’s sale of real estate.
    The facts were as follows: By indenture dated January 27th 18(H), Daniel McAleer and wife conveyed certain real to John Callaghan, who immediately re-conveyed the same to the said Daniel McAleer upon the following trust, to wit: “ In trust, nevertheless, and for the uses following, and none other, that is to say, for the sole and separate use of Mary Ann McAleer, wife of the said Daniel McAleer, while she continues the wife of the said Daniel McAleer, and in the event of bis decease before her, while she remains bis widow and unmarried, so that she alone or such person as she shall appoint, shall take and receive the rents, issues and -profits thereof, to be used and appropriated as she many deem advisable for her maintenance and the maintenance and education of the children begotten and hereafter to be begotten by the said Daniel McAleer on the body of the said Mary Aim McAleer, and in the event of the decease of the said Mary Ann McAleer, before the said Daniel McAleer, or her marriage after the decease of the said Daniel McAleer, then in trust for the children of the said Daniel McAleer aud Mary Ann McAleer, begotten and to be begotten as aforesaid, and their heirs, to take and receive the rents, issues and profits thereof, to be used and appropriated during their minority for and to their maintenance and education, and upon tlieir arrival at the age of twenty-one years, to them and their heirs forever, with power, nevertheless, to the said Daniel McAleer, the natural guardian of his said children, at any time hereafter to sell and convey in fee simple the whole or any part of the aforesaid premises and appurtenances, to any person or persons, and for such sum or sums of money as he may deem best for the interests of his said children and their heirs. And, provided, nevertheless, that nothing herein contained shall be taken and construed to authorize the said Mary Ann McAleer to sell and convey said premises and appurtenances or any portion thereof, nor to sell and convey, or otherwise, than as herein mentioned, to dispose of the rents, issues and profits aforesaid, but the same to be used and disposed of as herein limited and appointed.”
    The consideration named in said deeds was nominal, and it was admitted that the said Daniel McAleer at the time of making this voluntary settlement was possessed of considerable other estate, and was not indebted or contemplating indebtedness, so as to render it fraudulent as against creditors.
    On August 25th 1869, the said Daniel McAleer and wife, mortgaged the premises in question to Samuel Roberts, Sr., for $1,100, and subsequently, in 1871, they executed a second mortgage to him thereof for $2,800.
    Daniel McAleer died in 1873 and letters of administration upon his estate were granted to James P. Quinn. Mrs. Mary Ann McAleer was appointed by the court substituted trustee under the said trust deed.
    In 1878, John C. Bindley obtained a judgment against Quinn, administrator of Daniel McAleer, deceased, for $914.90.
    In 1879, the said first mortgage on said premises, for $1,100, was sued out, and the premises were sold at sheriff’s sale upon a levari facias for $8,000.
    Before the auditor appointed to distribute this fund, John C. Bindley claimed payment of his judgment against Daniel McAleer’s estate, with interest. This claim was contested by Mary Ann McAleer, trustee, who claimed the entire fund as trustee.
    The validity of the mortgage, under the power of sale contained in the deed of trust, w;as not questioned. But the contention arose upon the true construction to be given to the paid clause containing the power of sale — counsel for Bindley contending that the power of sale was reserved to Daniel McAleer for his own individual benefit, and counsel for the trustee claiming that the power of sale was part of the trust, and, if exercised, the proceeds were affected with the same trusts as attached to the original real estate.
    The auditor reported on this question as follows: “ As before said, the deed must speak for itself, and any trust not found in its words or necessary implications does not exist. It will be observed that the trust in the first instance is that Mary McAleer shall £ take and receive the rents, issues and profits,’ and in case of her death in the lifetime of Daniel McAleer or re-marriage afterwards, to the children £ to take the rents, issues and profits.’ This language is applicable to real estate, and could not be construed to refer to the proceeds of the same. The deed does not pretend to dispose of the proceeds in case Daniel McAleer should choose to sell the property. There is no direct trust as to them, and the words used could not bo construed as applicable to such proceeds, aside from the difficulty of raising a trust as to this fund. From the inference that the proceeds were to stand in place of the property, it is a convincing argument that the power to sell was not in execution of the trust, but intended to be used by Daniel McAleer for his own benefit and at his own will. If such bo the case, it falls within the principles of Tobin v. Gregg, 10 Casey, 446.
    “ I therefore find that J'. C. Bindley is entitled to the balance of the fund in court after paying the mortgages and costs, including costs of audit, and that the special return of the sheriff so amended should be confirmed.”
    Mrs. McAleer, trustee, excepted “to the finding of the auditor that the power of sale given in the deed wras for the benefit of Daniel McAleer and to the award to J. C. Bindley of the amount due on his judgment against Daniel McAleer’s administrator. The court, after argument, dismissed the exceptions and confirmed the report of the auditor, from which decree Mrs. McAleer, trustee, took this appeal.

      Bruce and Negley, for the appellant. —
    -Daniel McAleer’s purpose in making the voluntary settlement was to provide for his wife and children. There is nothing in the deed that intimates that the power of sale was to be exercised for bis own personal benefit. On tbe contrary, the power is vested in “ the said Daniel McAleer, the natural guardian of his said children,” to be exercised “ as he may deem best for the interest of said children and their heirs.” If Daniel McAleer in his lifetime had exercised the power of sale and endeavored to retain the proceeds as his own, a chancellor would have compelled him, under tbe terms of the trust deed, to account to the cestuis que trustcnt for the money.

      Knox <& Reed for the appellee. —
    The power of sale reserved in the trust deed is a general power, without any direct -trust expressed as to the proceeds. In such case, if the power be exercised, the proceeds form part of the assets of the settlor, subject to the demands of bis creditors: 2 Sugd. on Powers, 21; Mackason’s Appeal, 6 "Wr. 330; Tallmadge v. Sill, 21 Barb. 34; Johnson v. Cushing, 15 N. JET. 306; 4 Kent Comm. *319. There was no evidence to show that the money was raised by the mortgage for the purposes of the trust, or that Daniel McAleer used it otherwise than for his own personal benefit. He thus, by virtue of the power, exercised such acts of ownership over the property as to make the equity of redemption assets for the payment of his debts. He could not by any device put the estate beyond the reach of his creditors and still remain a beneficiary : Johnston <o. Harvy, 2 Penrose & Watts 82.
   Mr. Justice Trunkey

delivered the opinion of the court, November 21st 1881.

By deeds executed January 27th 1866, the naked legal title to the land was vested in Daniel McAleer, in trust that his wife, Mary Ann, should have the rents, issues and profits during her life, unless in case of her widowhood she should marry again, and, after her decease, or such marriage, their children shall have the rents and profits during their minority, and on their arrival at the age of twenty-one years to them and their heirs. Power was given to the trastee to sell and convey the whole or any part of the land, at any time, and for such prices as he should deem best for the interest of his children.

McAleer had previously owned the land, and it is admitted that he was not indebted or contemplating liabilities so as to make the deed void as to creditors. It is conceded that he had the right to create the trust in favor of his wife and children, and himself be the trustee. He mortgaged the premises, and he could have done this only by virtue of the power contained in the trust deed. The fund in controversy arises from sale of the mortgaged premises, and the appellee claims that in reality McAleer owned the land at and before the time of the sale.

McAleer was a mere trustee, without interest in the premises, and had no power other than to sell. He made an absolute gift of the land to his wife and children. In equity the entire estate was vested in the children of “ said Daniel McAleer and Mary Ann McAleer, begotten,” subject to the use of their mother during her life or widowhood. We are unable to adopt the view of the learned auditor, to wit: In case she survived her husband and died unmarried, there is no provision in the deed for the children, and the estate would then revert to Daniel McAleer’s heirs.” This is too strict a reading of the deed, avoiding its plain intent and the clear meaning of the language used, namely, that the children shall take the use immediately after their mother’s death, or before, should she become a widow and marry. Had McAleer’s wife died before him, and the power not exercised, at once they would have come into the enjoyment and use of their estate, and so will they if the widow marries, by the express terms of the deed; the necessary implication is, that they shall have it if the widow dies unmarried.

The power having been exercised, the proceeds of the land belong to the same persons, subject to the same uses, as did the land itself. The interest, or use, of the money belongs to them who were entitled to the rents, or use, of the land, and the omission to express in the deed that in ease of sale, the same persons should receive the interest of the money, who were entitled to the rents of the land, will not defeat the purposes of the trust. Conversion gave the trustee no interest, in the money, no power of appointment, no right of disposition for his own benefit, and will not deprive the owners of their property.

Decree reversed, and it is now considered and decreed that the money in court, less costs of audit, be paid to Mary Ann McAleer, trustee. Costs of appeal to be paid by the appellee, J. C. Bindley.


text:
    Mackey’s Heirs versus Adair et al.
    1. An attorney at law conducting an action of ejectment on behalf of his client has no right witiiout the client’s authority to enter into a compromise whereby a certain line is fixed upon, as the boundary between the respectivo tracts of the parties litigant, and deeds of release, or assurance by said parlies are provided for.
    2. Where an attorney in such ease does enter into such an agreement of compromise, his client is not bound thereby.
    November 7th 1881.
    Before Siiarswood, C. J., Mekcub, Gordon, Trunkey, Sterrett and Green, JJ. Paxson, J., did not sit.
    Error to tlio Court of Common Pleas No. 2, of Allegheny county: Of October and November Term 1881, No. 295.
    Ejectment, by Mary Adair, John Irwin, Jr., and others, heirs of John Irwin, deceased, against William Coleman, and others, heirs of Eobert W. Mackey, deceased, for a tract or parcel of land situate in Allegheny city, lying between South Avenue, School street and the Allegheny river.
    On the trial, before White, J., the plaintiffs, having put in evidence their abstract of title, which was undisputed, except as to the division line between the plaintiffs’ and the defendants’ land, offered in evidence, for the purpose of establishing said boundary line, the record in an ejectment suit between J. Iv. Moorhead, Eobert W. Mackey and others, plaintiffs, and the City of Allegheny and the heirs of John Irwin, deceased (the plaintiffs in this case), defendants, in the Court of Common Pleas No. 2, of Allegheny county to November Term 1874, No. 350, for a tract of land, known as Kilbuck Island. It thereby appeared, inter alia, that the controversy in that ease, as between the plaintiffs and the heirs of John Irwin, was only one of boundary, and the defences of the Irwin heirs and the City of Allegheny were antagonistic; and further, that on the trial of said ejectment, the several counsel engaged therein, representing the said parties plaintiffs, and the heirs of Irwin defendants, entered into a compromise agreement for the settlement of said disputed boundary, as between themselves, whereupon the trial proceeded against the City of Allegheny, the principal defendant. The case resulted in a verdict and judgment for the plaintiffs for part of their claim, which judgment was affirmed on writ of error. (See Allegheny City v. Moorhead, 30 P. E. Smith 118.)
    The defendants objected to the admission of said record, as irrelevant, and because it did not show any verdict or judgment in favor of the Irwin heirs. Objection overruled; exception.
    The plaintiffs then offered the above mentioned agreement, which was as follows :
    “ Moorhead et al. j versus I Common Pleas No. 2, The City of Allegheny, " No. 350, November T. 1874. John Irwin et al. J
    “ It is agreed between the plaintiffs in this case and the heirs of John Irwin, defendants, in order to compromise the question between them, that a verdict shall be entered in favor of the said heirs of John Irwin, and against said plaintiffs, for all the land described in said writ lying east of a line commencing at a point on Bank lane, now South avenue, 136 feet eastwardly from the eastern line of Borland alley, and running thence on a line parallel with School street, to the Allegheny river.
    “ And in case said plaintiffs shall succeed in establishing a title to the land described in said writ, not included in the claim of said Irwin’s heirs, or to any part thereof adjacent thereto, the said Irwin’s heirs shall release or otherwise assure to said plaintiffs, all their interest in all land described in said writ west of said line. And said plaintiffs shall -release or otherwise assure to said Irwin’s heirs, all their interest in all land described in said writ east of said line. The intention of this agreement being to ñx a division line between said parties, in case said plaintiffs shall establish a title to any part of the same adjoining said Irwin’s claim, and in case of failure so to establish tlieir title, not to conclude Irwin’s heirs as to their title, or the extent of their claim against any other parties.
    “ Hampton & Dalzell, Attorneys for Plaintiffs.
    S. H. Cteyee, Attorney for Plaintiffs.
    S. Schoyee, Attorney for Plaintiffs.
    B. S. Woods, Plaintiffs’ Attorney.
    David W. Bell, and Slagle & Wiley,
    Attorneys for Irwin’s heirs.”
    Objected to, as incompetent, and “ because it was not within the power of the attorney for B. W. Mackey to make such a compromise.” Objection overruled ; exception.
    The testimony of F. M. Magee, Esq., who was of counsel for plaintiffs in said suit was, substantially, that, although he did not sign the said agreement, he assisted in drawing it and was a party to it on behalf of his clients, and he was still willing to abide by it; that he supposed, at the time of entering into the agreement (as did all the other counsel in the case), that he represented Bobert W. Mackey, one of the plaintiffs in said ejectment, although Mr. Mackey, who resided in Philadelphia, was not present at the trial; but that, when he told Mr. Mackey of it after the trial, “ he repudiated it, said that he hadn’t any attorney in the case, that he wouldn’t pay any attorneys, and wouldn’t live up to the compromise — that he had his patent and was going to look out for his interest in it.”
    The court charged the jury as follows:
    “ If the compromiso agreement in evidence was made during the progress of the trial of the case of Moorhead et al. v. Allegheny City et ah, No. 350, November Term 1874, by the counsel representing all the plaintiffs in that action, and was authorized and sanctioned by the plaintiffs present in court conducting said action for themselves and the other plaintiffs, it is binding upon Mr. Mackey’s heirs, although he may not have been actually present or known of the agreement at the time, and may, after the trial, have said he repudiated said agreement.”
    Verdict for the plaintiffs for the laud claimed, up to the boundary line fixed by the said compromise agreement, and judgment thereon. The defendants thereupon took this writ of error, assigning for error the admission in evidence of the record of the said ejectment suit, and of the said compromise agreement made therein.
    Rodgers, (Oliver with him) for the plaintiffs in error. —
    As-summing that Mr. Mackey was represented by counsel, and that his counsel was a party to the compromise agreement, can that agreement be enforced in an action of ejectment ? An attorney at law is authorized to do those things only which pertain to the conducting of the suit; he has no power to compromise his client’s cause, without the client’s sanction or authority. Stokely v. Robinson, 10 Casey 315 ; Housenick v. Miller, 8 W. N. C. 346 ; Holker v. Parker, 7'Cranch 452. He has no power to make a compromise by which land is to be taken instead of money. Huston v. Mitchell, 14 S. & R. 307; Stack-house et al. v. O’Hara’s Exrs., 2 Harris 88. This being so, how can he agree, as in this case, that his client “ shall release or otherwise assure,” to any. one, a portion of the land which his client employs him to recover ? If such an agreement be good for six acres, why not for sixty, or the whole claim ? The court erred in admitting the agreement in evidence, and in charging that Mr. Mackey was bound by it notwithstanding he • never authorized it, was not present when it was made, and promptly repudiated it when he learned of its existence.

      Slagle c& Wiley, for the defendants in error. —
    The agreement was made during the trial, in the conduct of the suit, and under these circumstances was clearly within the scope of an attorney’s power. Wilson v. Young, 9 Barr 102; Babb v. Stromb'erg, 2 Harris 397; Evars v. Eiamphaus, 9 P. E. Smith 379 ; Coxe v. Nichols, 2 Yeates 547. The cases cited by the plaintiffs in error are distinguishable. In Stokely v. Robinson, the attorneys were not attorneys of record; there was no cause pending, and they acted as arbitrators without any submission. Housenick v. Miller was an agreement after judgment. In Holker v. Parker, the agreement of counsel was set aside as being unconscionable, though it amounted to a confession of judgment, which an. attorney undoubtedly has the right to make. In Huston v. Mitchell, the attorney Burnside was not attorney of record, and undertook to accept land instead of money.
    The agreement in fact resulted favorably for the plaintiffs in the suit in which it was made, for they thereby obtained more land than the jury awarded. The numerous co-tenants of Mi\ Mackey, plaintiffs in that suit, have never objected to the action of their counsel in making the agreement, and Mr. Mackey and his heirs, having participated in the advantage thereby gained in the former ejectment, are estopped from denying in this suit that they are bound by it.
   Mr. Justice Trunkey

delivered the opinion of the court, November 21st 1881.

R. W. Mackey and others brought ejectment against the City of Allegheny and the heirs of John Irwin, for a tract of land, the whole of which was claimed by the city, and a defined part by Irwin’s heirs. At the trial, the respective attorneys for the plaintiffs, and for the heirs of Irwin, in order to compromise the question between them, agreed, that a verdict should be entered in favor of said heirs for all the land lying east of a specified line; and, if the plaintiffs should recover the land not included in said Irwin’s claim, they should release to said Irwin’s heirs all their interest in the land east of said line; and said heirs should release to the plaintiffs all their interest in 1 he land west of said line. It was intended to fix a division line between the parties, in case the plaintiffs should establish title to any part of the land adjoining Irwin’s claim, and in case of their failure, not to conclude Irwin’s heirs, as to their title, or the extent of their claim against other parties.

The court instructed the jury, that the agreement is binding upon Maclcey’s heirs, although he was not present and did not know of it, at the time, and, after the trial, may have said, he repudiated it; and this ruling constitutes the alleged error.

An attorney at law has very extensive powers and may do those things which pertain to the conducting of the suit. Unless otherwise expressly instructed by his client, he may use bis own judgment in selecting the form of action, and in shaping the issue, also, whether it shall be tried by a jury, by the court, or some other tribunal provided by law. On a mere question of boundary, when title is not involved, in open court, he may agree to its submission to the final determination of arbitrators: Evars v. Kamphaus, 9 P. F. S. 379. He may refer his client’s cause to arbitrators with an agreement, that the award shall be final; but the client may revoke the submission, and, in a proper case, he may have relict' by application to the court: Wilson v. Young, 9 Barr 101. In Pennsylvania, from an early day, arbitration has been a favorite mode of trial, and it may be implied by the relation, that the attorney has authority to make such agreements' for reference; but it does not follow, that he can make compromise agreements for his client, or settle a boundary himself.

An attorney has no authority to make a compromise, by which his client shall take laud instead of money : Huston v. Mitchell, 14 S. & R. 307. Where the attorneys of the respective parties make an agreement in the form of an award, settling an ejectment, it will not authorize judgment accordingly : Stokely v. Robinson, 10 Casey 315. In that case Woodward, J"., held that counsel have no power to compromise their client’s case, without the client’s authority or sanction.

Here, the agreement is a compromise, and provides for deeds of release, or assurance to be made by the clients. It is doubtful, whether oral authority would enable an attorney to make such a contract respecting land, though, if the client were present at its making, or afterwards recognized and acted upon it, he would be bound. It was not in the course of the conduct of the suit, nor could such agreement be anticipated by the client as likely to be made in any issue of fact, or of law, or in any known mode of trial. Authority to make it, cannot be inferred from the relation. No precedent has been cited in this state, or elsewhere, which sustains a compromise of this nature, by an attorney without his client’s authority, or subsequent ratification; and, we are of opinion, that it would be dangerous to clothe the attorney with such power over his client’s property.

Judgment reversed, and venire facias de novo awarded.


author: Mr. Justice Mercur

text:
    Allegheny National Bank’s Appeal.
    1. Owelty of partition constitutes a first lien on the purpart of the former tenant in common, and is entitled to the priority over a mortgage of his undivided interest given by him before partition.
    3. McCandless’s Appeal, 3 Out. 489, followed.
    3. A testator directed his real estate to be sold and divided equally among his children; but in the distribution he directed, that §1,000 should be deducted from the share of his daughter, A. E., and also any amount of money, that he might pay on account of indorsements, or otherwise. The children elected to take the land as land, and proceedings in partition were accordingly instituted. Testator had in his lifetime indorsed a note for $1,000, given by A. E.’s husband to B., which note was never paid. Equal division of the tract being found impracticable, a certain part of it was accordingly awarded to A. E., subject to certain sums charged as owelty of partition, among them, a charge of $1,000 in favor of B. The tract, thus awarded to B., being subsequently sold under an execution and realizing a sum insufficient to meet all the charges of owelty thereon, SelcL, that the charge in favor of B. had no priority over the other charges, but must share with them pro rata.
    November 8th 1881.
    Before Sharswood, C. JT., Mercub, Gordon, Paxson, Trunkev,. Sterrett and Green, JJ\
    Appeal from the Court of Common Pleas No. 1, of Allegheny county: Of October and November Term 1881, No. 182.
    This was an appeal by the Allegheny National Bank of Pittsburgh, from the same decree mentioned in the case of McOandless’s Appeal, 2 Out. 489.
    The facts material to this case, were as follows: — John Adams died September 3d 1872, having, by his will, dated January 25th 1870, devised his real estate to his widow for life, directing that, after her death, the same should be sold, and the proceeds divided equally amongst his seven children, all of whom survived him; and, he further directed, “ that in the payment of the distributive share of my daughter, Ann Eliza, $1,000 shall be deducted, for the lot already conveyed to her, and also any amount of money, that I may pay on account of indorsement, or otherwise, or that my executors may have to pay after my decease.”
    At the time of his death, John Adams was an indorser upon a promissory note of W. H. Mackey, the husband of said Ann Eliza, for $1,000, held by the Allegheny National Bank.
    Mrs. Adams, the testator’s widow, released her life estate in the real estate, and the seven children, being of full age, elected in writing to take their interest as land, instead of the proceeds thereof.
    On October 8th 1875 the said Ann Eliza Mackey, together with her husband, William II. Mackey, mortgaged her undivided interest in the land so devised by her father, to Robert W. Mackey for $2,000.
    In 1876 a bill in equity for partition, was filed by John W. Adams, one of the devisees, and the cause was referred to a master, who found, inter alia, that the said indorsement of the testator of the $1,000 note, held by the Allegheny National Bank, was, under testator’s will, a charge on the share of the said Ann Eliza Mackey, but without preference over other charges thereon created by the testator. Equal partition being impracticable, the land was divided into purparts, one of which, valued at $9,455, was allotted to Ann Eliza Mackey, subject to certain sums, charged as owelty of partition, among which was the sum of 81,000, with interest, payable to the Allegheny National Bank for said indebtedness of the testator. The master’s report was confirmed by a final decree of the court, which was not appealed from.
    Subsequently, in 1880, the said mortgage of Ann Eliza Mackey for 82,000 was foreclosed by scire facias, and the tract, allotted in the partition to Ann Eliza Mackey, was sold at sheriff’s sale for $1,600. The sheriff made a special return in favor of the mortgage creditor, and, exceptions being filed thereto, the matter was referred to an auditor, who reported distribution of the fund to the several parties entitled to owelty of partition, pro rata (the fund being insufficient to pay said owelties in full), including a proportional share to the Allegheny National Bank. The bank filed exceptions to the report, claiming, that the auditor should have awarded payment of its claim in full, with interest, on the ground that the same, having been expressly charged upon the distributive share of Ann Eliza Mackey by the clause of John Adams’ will, hereinbefore quoted, was entitled to a preference over all claimants on the fund for owelty of partition.
    The court, after argument, overruled the exceptions, and confirmed the report, from which decree the Allegheny National Bank took this appeal.

      George Shiras, Jr. {Charles C. Dieleey with him), for the appellant. —
    The $1,000 note, held by the appellant, was a testamentary charge on the distributive share of Ann Eliza Mackey, under her father’s will. This was judicially settled by the decree in partition. The only object of the partition was to divide the land between the parties entitled thereto, subject to owelties, as between themselves. The share of Ann Eliza, being already subject to the testamentary charge, as a first lien, the owelties, charged thereon in favor of the devisees, were also subject thereto. The testator’s intention, as expressed in his will, was that his land should be sold, and the $1,000 note paid by his executors out of the proceeds, the amount thereof to be deducted, in the distribution, from Ann Eliza’s share of such proceeds. The fact, that the devisees elected to take land, instead of money, cannot affect the intention of the testator. Nor can the fact, that the Allegheny National Bank’s claim was treated, in the partition, as in the nature of owelty. This was irregular, and was done only for convenience sake. Such charge as “ owelty” could not, however, reduce its prior testamentary lien to an equality with the lien of the owelties, which arose out of the partition itself. The testamentary lien, having been discharged by the sheriff’s sale of Ann Eliza’s purpart, is payable out of the proceeds in preference to liens created by Ann Eliza on her undivided interest before the partition, or to liens, which originated in the partition itself: Tower’s Appropriation, 9 "W. & S. 103; McFait’s Appeal, 8 Barr 290. The court, therefore, erred in awarding distribution to the appellants, pari passu with the other claimants on the fund.

      Slagle (with him Wiley, Jolm Barton and Whitesell <& Son), for the appellees. —
    The $1,000 note was not, as claimed, a testamentary lien on Ann Eliza’s share of the testator’s real estate, because her interest under the will was personal, and the debt was only to be regarded in the matter of distribution among the legatees. Even if a general lien on the testator’s real estate at the time of his death in 1872, such lien had expired at the time of the sheriff’s sale in 1880. It was only because the appellant’s debt remained unpaid, and because the devisees elected to take land instead of proceeds, that the claim was admitted in the partition, without contest, as equitable owelty. The bank’s claim then, as a lien, takes its rise in the partition, and, standing on the same plane with other owelty, must participate ratably therewith. The decree in the partition suit necessarily settled this, and, being unappealed from, is con-elusive on the bank. The recent decision of this court on the appeal of McOandless, executor of Kobert W. Mackey, from tiie same decree to which this appeal is taken, also to some extent rules this case.
   Mr. Justice Mercur

delivered the opinion of the court, January 3d 1882.

This fund in contention was produced by a sheriff’s sale of the land of Mrs. Annie E. Mackey. It was allotted to her in the partition of the estate of her father John Adams. In his devise to her of a distributive share, he directed that certain debts and claims should be deducted therefrom, thus practically making them a charge on her portion for the benefit of the estate. The claim of the appellant is one of those referred to in the will. In the partition this claim was charged as owelty of partition on the purpart allotted to Mrs. Mackey. The appellant claims by virtue of the decree so charging it. The appellee claims on a mortgage executed by Mrs. Mackey and her husband on her interest in the whole land, before partition.

The decree, imposing the sum charged as owelty, on the purpart allotted to Mrs. Mackey, is in an unusual form, and rather irregular; but it stands as a final decree. In this collateral proceeding its validity and conclusive effect cannot be questioned. It does, however, appear on the facts found by the auditor, that the decree -was equitable between all the parties thereto, and worked no injustice to her creditors. Full effect must then be given to the claim of the appellants as one of owelty. Whether it constitutes a lien prior to that of the mortgage is the question.

The precise question was before us in the recent case of McOandless’ Appeal, 2 Outerbridge 489. The authorities were fully examined and considered. We there held that owelty of partition constitutes a first lien on the purpart of the former tenant in common, and is entitled to priority over a mortgage on his undivided interest, given by him before partition. That case is fully sustained by the authorities. It is unnecessary to cite them now, or repeat the argument there presented. We adhere to it as a settled rule of law. In so far as the first and third assignments might be understood as giving to the claim of the appellant a preference over other claims of owelty secured by the decree in partition, they are not sustained. With all such its lien stands on an equal footing. The second assignment is sustained.

Decree reversed, and record remanded with instructions to decree distribution conformably with this opinion, and that the costs of this appeal be paid out of the fund.