text:
    Thompson versus Adams et al.
    1. The constitution and articles of a voluntary association, such as the Philadelphia Board of Brokers, are law as to its members.
    2. A seat in the board of brokers is not property in the eye of the law, and cannot be seized in execution for the debts of the members. It is the mere creation of the board, and is to be used and enjoyed with all the limitations and restrictions which the constitution of the board chose to put upon it.
    3. Tinder the constitution and by-laws of said board, an equitable owner of a seat, who is unknown to the association, cannot share in the proceeds* of the sale of the seat, upon the death of the legal owner, as against members of the board who are creditors of the legal owner.
    January 8th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Woodward, Trunkey and Sterrett, JJ.
    Error to the Court of Common Pleas, No. 4, of Philadelphia county: Of January Term 1878, No. 84.
    Case stated for the opinion of the court wherein Samuel Gustine Thompson was plaintiff and Bushrod Adams and others, members of the Philadelphia Stock Exchange, late Philadelphia Board of Brokers, were defendants.
    The following facts have been agreed upon as a case stated, as if found, by a special verdict of a jury, with liberty to the court below, and the court above to draw the same inferences of fact as a jury might draw, and with leave to either party to sue out a writ of error, the judgment entered to be in the nature of a judgment on a special verdict.
    The Philadelphia Stock Exchange (late Board of Brokers) is an unincorporated association, governed by a constitution and by-laws, reference to the material parts of which is hereby made a part of this case stated.
    Originally a seat in the board of brokers (i. e. the collective privileges of a full member of the board) was valuable only during the life or membership of its owner; subsequently, by the said constitution, members were allowed, under certain conditions, to transfer their seats for value, and subsequently to that a clause was added to the constitution giving value upon certain conditions to a member’s seat after his death.
    Section 12 of the constitution is as follows :
    “ * * any member shall have the right to sell his membership under the following provisions :
    “ When any member wishes to sell his membership, the name of the proposed purchaser shall be submitted to the standing committee of the board, and on the approval of two-thirds of said committee the transfer may be made, provided the member selling has no unsettled contracts or claims against him for stock differences or borrowed money. But any member may demand a vote on such admission, and the applicant shall then be received, provided not more than fifteen black-balls be cast against him, and that not less than fifty balls be cast.
    “ When a member dies his seat may be sold by the secretary, and after satisfying the claims of the members of the board, the balance shall be paid to his legal representatives.”
    Sect. 11 of the by-laws is as follows:

      “ Any member who fails to comply with his contracts, or who becomes insolvent, shall immediately inform the president of the board of the fact, whose duty it shall be to give notice forthwith, from the chair, of the failure of such member, and in case of the refusal or neglect of such delinquent to make such report to the president it shall be the duty of any member having the knowledge of the fact to report the same forthwith to the standing committee or the president, who shall thereupon appoint a committee of three members, to inquire into the fact and report thereon without delay; and if said committee report the charge to be true, and the board confirm the report, said member shall be suspended; and it shall furthermore he the duty of the standing committee upon receiving information thereof, or having, directly or indirectly, any knowledge of such failure on the part of any member to comply with his engagements, as above stated, to report the same without delay to the president, and ask for the appointment of a committee, as before provided. And in case of the insolvency of any member he shall, within three days, make good to the full amount thereof all friendly loans of cash or stock from members or any overdraft on any bank. But seven days shall he allowed him in which to settle stock contracts.
    “ On application for re-admission, a suspended member may he restored to his seat by ballot, provided not less than fifty votes are cast, and not more than fifteen black-balls appear against him; but such application shall first be referred to the standing committee, whose duty it shall be to ascertain that the applicant has settled and arranged his affairs to the satisfaction of his creditors, and that his present situation affords a reasonable security in future transactions.
    “It is expected from the applicant that he will give the committee full explanations on any disputed or unsatisfactory transactions, and at their request free access to his books and papers for that purpose.
    “A suspended member shall, if reinstated, pay all fines due at the time of his suspension.
    “ A suspended member presenting a certificate of discharge in full of his debts under the United States Bankrupt Law, becomes eligible under the rules reinstating suspended members.
    “ If any suspended member fails to settle with his creditors within one year from the time of his suspension from the hoard, his seat shall be sold by the secretary, and the proceeds shall be paid pro rata to his creditors in the board.
    “ Ño expulsion or suspension of a member shall affect the rights of creditors as provided for in the constitution and by-laws.”
    Section 9 of the constitution is as follows:
    “ On the first Monday of January of each year there shall be elected a standing arbitration committee, to consist of seven members, whose duty it shall ho to investigate and decide all claims and matters of difference arising between members of the hoard, and also to adjudicate such claims as may be preferred against members by non-members when such non-members agree in writing to abide by its decision. The decision of this committee shall be final, except in cases involving a difference of five hundred dollars, or over, when either may appeal within three days to the board for final adjudication; provided further, that upon the application of three members of the committee, any decision shall he referred to the hoard for final action.”
    Subsequently to the passage of the foregoing sections of the constitution and by-laws, on the day of 187 , 'Samuel A. Richards became a member of the board of brokers, a seat having been duly transferred to him by a then member of the board of brokers upon the payment to the latter of a valuable consideration for the same.
    The said Richards remained a member of the board until his death, which occurred on the day of May 1876. Shortly prior thereto and at the time of his death, he was indebted to various members of the board of brokers, in the sum of $5377.17.
    The seat of said Samuel A. Richards was duly sold the day of 187 , to , for the sum of . Upon the request of Mr. John Moss, Jr., member of the board of brokers, and a creditor of said Richards, a meeting of the standing arbitration committee was held on the 1st day of June 1876, pursuant to notice, at the Philadelphia Exchange Building, notice having been duly given to Mr. Richards's personal representatives, and to Mr. Samuel Gustine Thompson, the plaintiff, who was present and represented himself. Business was transacted at the said meeting as follows, as appears by the following copy of the minutes of the said meeting:
    “In the matter of the seat of Samuel A. Richards, deceased, sur claim of creditors.
    “ June 1st 1876.
    “ The committee met at the request of John Moss, Jr., Esq., a creditor of said Richards, deceased, at 3 o’clock p. m., notice having been duly given to Samuel G. Thompson, who was present for himself, and to the personal representatives of Mr. Richards. Mr. A. Sydney Biddle was present as the attorney of the Philadelphia Stock Exchange (late Board of Brokers).
    “ Mr. Biddle stated that Mr. Richards had recently died, owing to various members of the Stock Exchange (late Board of Brokers), $3190.88, which was the balance due his creditors in the board, after deducting from the sum $5377.17, the whole amount owing by him to them — the sum of $2186.29, which latter sum had been placed in his (Moss’s) hands, as treasurer of the creditors of Mr. Richards.
    “ Mr. Samuel G. Thompson then stated that the money with which the seat of Mr. Richards had been purchased, had been furnished by him — Mr. S. G. Thompson’s brother being a partner of Mr. Richards. When the firm of Richards & Thompson was dissolved, Mr. Richards was given permission by him, Mr. S. G. Thompson, to use the seat for one year, and at the end of that time this permission was renewed, Mr. Richards at the dissolution of the partnership having given a bill of sale of the seat, and a power of attorney to transfer to Mr. S. G. Thompson, which the latter still held. The seat had until Mr. Richards’s death, always been in Mr. Richards’s name, and no notice that the seat did not belong to said Richards, or claim that it belonged to any one else, or that it had been paid for with the money of another, had ever been brought to the attention of any of the officers or members of the board, or was known to any member or officer of the society except to the said Richards. Mr. Thompson desired that the committee should not take jurisdiction of the case, but that it might be settled in court, before it bad been settled by the standing arbitration committee.
    “The committee decided, however, to hoar the claim of the creditors of S. A. Richards, and to allow Mr. Thompson to make any claim before them if he desired to do so. Mr. Moss, on behalf of the creditors of Mr. Richards, submitted a detailed statement showing in an itemized form the sums due by Mr. Richards at his death to his various creditors in the Board, amounting in all to $5377.18, to the liquidation of which said Richards ’had paid $2186.29, leaving a balance due by him to his creditors of $8190.88. On motion of Mr. Baekman, the committee unanimously decided that the claims, so as aforesaid presented by Mr. Moss against Mr. Richards’s seat were correct, separately and in the aggregate, and decided that the said Samuel A. Richards, at his decease owed these sums respectively, to the various creditors mentioned in the statement, subject to the aforesaid ci edits, amounting to $2186.29, paid by him as aforesaid, making a total indebtedness, by him at his death to members of the board, of $3190.88. On motion of Mr. Stevenson, a member of said committee, it was
    “ ‘ Resolved, that committee has passed upon these claims with the full knowledge that Mr. S. O. Thompson claims to be the equitable owner of the seat of Mr. S. A. Richards, deceased.
    “ A copy of the statement of the debts and credits presented as aforesaid by Mr. Moss to the committee is hereunto annexed, and forms part of minutes of this meeting. John S. Capp,
    Secretary.’ ”
    “ In reality Mr. Samuel Gustine Thompson, the plaintiff, had advanced to Mr. Richards the sum, to wit, $1000, with which tho latter’s seat in the board was purchased, and the seat had been allowed to continue in the name of Mr. Richards without notifying any officer or member of the board of brokers, that he, Thompson, was the owner of said seat, or that Mr. Richards had not paid therefor out of his own money. In fact no member or officer of the board of brokers except Mr. Richards, knew, or supposed or had any ground to suppose, that the said Richards was not, in every respect, the owner of said seat, or that he had not paid for the same wholly out of his own money.
    “In July 1873, upon the dissolution of the firm, consisting of the said Richards and William E. Thompson, brother of said Samuel Gustine Thompson, a power of attorney authorizing a transfér of, and a bill of sale of said seat were handed by said Richards to the said plaintiff, dated July 3d 1873. No notice of this transfer of these documents, or any allusion thereto, was ever made by the said plaintiff, or by any one else to any member or officer of the board of brokers, until after the death of the said Richards, at which time the aforesaid debts.found to be due by the arbitration committee had fully accrued, nor until that time was the fact known to or suspected by any member of the board of brokers.
    “ The administratrix of said Richards has duly received notice of all the facts herein contained, and waives any right to interfere in this proceeding, and hereby by her attorney expressly agrees and assents, that the said seat or the proceeds arising from the-sale thereof may go to and become the property of said Samuel Gustine Thompson, if this court shall be of opinion that he is entitled to the said seat or to the proceeds thereof, as against Richards’s aforesaid creditors in the board of brokers.
    “ The question for the decision of the court is, whether or not upon the above facts the said plaintiff is entitled to the proceeds or any part thereof, of the said seat either in full or pari passu with the other creditors of said Richards, who, at his decease, were members of the board of brokers, or whether the latter’s claims are paramount to, and until satisfied, exclusive of any claim of said plaintiff.
    “ If the court shall be of opinion that the plaintiff is entitled to any portion of the said proceeds of the said seat, then judgment shall be entered in his favor for that amount with interest from June 1st 1876. But if the court be of contrary opinion, the judgment shall be entered for the defendants. The costs of the case including the price of printing the case stated, and paper-books, if a writ of error be taken, to be paid for by the unsuccessful party.”
    The court entered judgment for the defendants, Elcock, J., delivering the following opinion :
    “The case shows that plaintiff, about 1873, gave to Samuel A. Richards, who was a partner with William E. Thompson in the business of stock brokers, the sum of $1000 to purchase a seat in the board of brokers. The seat was purchased by Richards, and he continued to hold it by plaintiff’s permission, without knowledge on part of the board of any other ownership or title, until his death in May 1876. At that time he was indebted to various members of the board in the sum of $5477.17.
    “ Under sect. 12 of the constitution of the board, ‘ when a member dies his seat may be sold by the secretary; and, after satisfying the claims of the members of tbe board, the balance shall be paid to the legal representatives.’
    “ The seat was accordingly sold by the secretary, and the question raised is, whether or not plaintiff is entitled to the proceeds, or any part thereof, either in full or pari passu with the other creditors of said Richards, who, at his decease, were members of the board of brokers, or whether the latt-er’s claim is paramount to, and, until satisfied, exclusive of any claim of said plaintiff.
    “ lias plaintiff such an equitable title to said seat as would save it from the duties and liabilities attaching by the constitution and by-laws of the board to the legal holder of the title and the acting member of tlie board ?
    “ The defendants are an unincorporated association, governed by a constitution and by-law's for the mutual advantage of buying and selling stocks in an open exchange or market, and for their mutual protection and advantage in securing settlements or paying for tlie same.
    “ By sect. 12 of the constitution, a member shall have the right to sell his membership under the provisions that the name of the proposed purchaser shall he submitted to the standing committee of the board, and on the approval of two-thirds of said committee, the transfer may be made, provided the member selling has no unsettled claims against him for stock differences or borrowed money.
    “ Under this Richards purchased tbe seat of a former member, and was accepted by the standing committee.
    “ By tbe 11th by-law it is provided, upon tbe failure or insolvency of a member, that he shall be suspended, and shall, within three days, make good to the full amount all friendly loans of stock from members, or any over-draft on any bank, and in seven days settle all stock contracts. If a suspended member fails to settle with his creditors within one year from the time of his suspension, his seat shall be sold by the secretary, and the proceeds shall be paid pro rata to his creditors in the board.
    “ By sect. 9 of tbe constitution, a standing arbitration committee of seven members is provided, whose duty it is to investigate and decido all claims and matters of difference arising between members of the board, and also to adjudicate such claims as may be preferred by non-members, when such non-members agree, in writing, to abide by its decision, and where tbe differences exceed §5500, provides for an appeal to the board for final adjudication.
    “ The ownership of a seat or membership by a person other than the occupier thereof, or the actor in the business, is not contemplated either from the nature of the business or the constitution and by-laws of the board. If the association was to permit such a holding, one of its great objects would be gone, and tbe mutual protection given to the claims of members in case of failure, insolvency or death of a co-member, would be defeated.
    “Membership can only be constituted in accordance with the constitution of the board. Richards was, therefore, the member holding the legal title to the seat, and by reason of such legal membership, subject to all the duties and liabilities attaching thereto.
    “ A seat in the board is a species of property, encumbered with conditions. It is not a matter of absolute purchase, for it never was freed from the conditions and duties of the constitution and by-laws.
    “ The plaintiff’s title can be but an equitable one, and, as between himself and the board of brokers, his title would be subject to all claims against it created by the laws’ of the association by reason of Richards’s legal membership. His equitable title cannot rise above the legal, or be freed of the duties or liabilities imposed upon it.
    “ It would have been impossible for plaintiff to have had a transfer either by agreement or by legal enforcement, except under the terms of art. 12 of the constitution, which provides that the sale shall receive the assent of two-thirds of the committee, and that all contracts or claims against Richards for stock differences or borrowed money should be settled.
    “A secret holding could not affect the rights of the board, with- ' out whose authority the seat or membership could not be held or transferred.
    “ It is ingeniously argued by plaintiff’s counsel that, under rule 9, the arbitration committee can investigate and decide only upon ‘differences arising between members of the board,’ that this cannot relate to cases where members have died, thus leaving no authority to determine the claims of' the co-members. This might have some weight were it not for the portion of sect. 12 of the constitution, which provides: ‘ Where a member dies, his seat may be sold by the secretary, and after satisfying the claims of the members of the board, the balance shall be paid to his legal representatives.’
    “ In Singerly v. Johnson, 3 W. N. C. 541, Allison, P. J., decided in a case somewhat similar that the decision of the arbitration committee was final as to the existence, validity and amount of the creditor’s claim.
    • “ The jurisdiction of the courts cannot be ousted by contract, but any person may covenant or agree that no right of action shall accrue until a thrid person has decided on any difference that may arise between himself and the other party to the covenant. The leading case upon this subject, and followed in Pennsylvania, is Scott v. Avery, 5 H. of L. C. 811.
    “ This doctrine is particularly applicable to membership in associations; and whore a by-law provides for a disposition of the seats on the death of a member by action of a committee, or of the whole association, it becomes the law controlling the estate or interest passing to the legal representatives.
    “ The power to make sale of the seat is in the board, and even a judicial sale of the seat could not divest the claims of the board upon the proceeds, for their claim is a condition attached to the property and membership. The legal representatives have no claim upon any proceeds until the full duties of .membership have been complied with in the payment of all debts due members.
    “ It is argued that the power of the secretary to make sale of the seat is limited to the assent of the legal representatives of the deceased member. The word may in the section of the constitution should, doubtless, be read must, because the settlement of the debts by the sale is compulsory. This right, of course, is subject to all the legal requisites of a fair sale.
    “ The power of the Orphans’ Court is restricted by the laws of the association over the balance remaining after payment of the debts due members of the board, the legal representatives being only entitled to that, and having no right to active membership, or to make sale of the seat, except in the manner pointed out by the constitution. The debts are not regarded as liens upon the seat, but their payment in a condition under which the membership was sanctioned or granted.
    “ In Evans v. Wister, 32 Leg. Int. 354, the Supreme Court held that an attachment would not lie against the board of brokers for the proceeds of the sale of a seat of a member, he being indebted to the amount of the proceeds.
    “ This was an affirmance of Leech v. Leech, reported in 31 Leg. Int. 212.
    “ And in Singerly v. Johnson, supra, it was held that the death of the member did not revoke any of the rules applied to membership.
    “ In Hyde v. Woods, 4 Otto 523, s. c. 15 Nat. Bank Reg. 518, the Supreme Court of the United States determined that a provision in the constitution of the California Stock Exchange Board (similar to the one in question), that in sales of seats of delinquent members the proceeds should be applied to the benefit of the members of the board, exclusive of outside creditors, was valid, and that such claim was not a lien, but a condition of membership.
    “ The plaintiff invested his money, trusting to the integrity of Richards. He permitted him to exorcise the rights of membership, and thus to become liable to its penalties.
    “ The indebtedness of Richards exceeding the proceeds of the sale of the seat, judgment must be entered in favor of the defendants on the case stated.”
    The plaintiff took this writ, alleging that the eourt erred in ■ entering judgment for defendants.

      F. Carroll Brewster, for plaintiff in error.
    It is argued a lien is created by sect. 12 of the constitution, -which provides, that “ When a member dies his seat may be sold by the secretary, and after satisfying the claims of the members of the board, the balance shall be paid to his legal representatives.” This section does not create a lien in favor of creditors in the board. The language is, that the secretary may sell. It simply permits him to make the sale with the assent of the legal representatives of the deceased member. The preceding part of the section requires a member, when he wishes to sell his seat, to submit the name of the proposed purchasers to a committee, and the transfer shall be made on the approval of two-thirds of the committee ; but when death occurs, the secretary may, without reference to a committee, on the request of the representatives of the deceased member, sell the seat. It was intended to obviate the necessity of referring to a committee in the event of death.
    The representative of Richards never authorized or assented to a sale of the seat. If there was no sale of the seat, this section would not create a lien ; and if the secretary has no authoi’ity from the representatives of the owner to make a sale, his making one without authority will not create a lien. Has the secretary absolute power over the seat and the distribution of its proceeds ? Clearly not. The seat is recognised as property in the case stated, and if the secretary has the power claimed, he becomes an Orphans’ Court, with power to sell the decedent’s property, and distribute the proceeds without the assent of the representatives of the deceased member.
    The Orphans’ Court alone has jurisdiction : Linsanbigier v. Gourley, 6 P. F. Smith 172; Hammett’s Appeal, 2 Norris 392. The seat at Richards’s death -was free from any lien. The title at his death was, it is admitted, in plaintiff below. It follows, then, that as there was no lien upon the seat at the date of his death, and none was created by his death, and as the title was in plaintiff below, he holds it free from any claims of the creditors of Richards in the board. If they have claims, they must make them against Richards’s estate.
    Hyde v. Woods, 4 Otto 523, is relied on by the learned judge to sustain the judgment of the court. This was a controversy between the vendor’s assignee in bankruptcy and his transferree. The assignee alleged the transfer was a preference, and therefore void. Article 15, of the constitution of the Board of San Francisco, provides “ in sales of seats for account of delinquent members, the proceeds shall be applied to the benefit of the members of the board exclusive of outside creditors, unless there shall be a balance after the payment of the. claim of members in full.”
    The owner was a delinquent, and he authorized a sale of his seat under this article. It was clearly not a preference. The learned judge said, “ The question turns solely on the validity of that article of the association.” The position taken was that there was no reason why the stock board should not make membership subject to the rule in question.
    The present case is one where no act is done by Richards as a member, because by reason of death, his membership has been dissolved and his representatives have not directed or requested a sale. If the seat be properly, as held in Hyde v. Woods, the simple by-law that the secretary may sell, cannot create a lien. Suppose he does not sell; it cannot be said a lien exists.

      N. Dubois Miller and A. Sydney Biddle, for defendants in error.
    It is clear, that in this form of action, there can bo no recovery. The plaintiff, who claims to have been (and, in a certain sense, was as between himself and the decedent), the equitable owner of Richards’s seat, brings a common-law action against whom ? Not against his debtor’s (Richardses) personal representatives, but against a third person whom, at best, he can only regard as a garnishee.
    The creditors of the decedent, members of the board of brokers, are the owners of the proceeds of sale of the seat, and till sold have a lien upon it, to the extent of their claims, ascertained in accordance with the terms of their constitution, which instrument alone creates the property. The proposition is not for a moment advanced that an agreement between parties can oust the court of its jurisdiction to enforce it, or punish for its violation. “ When a member dies his seat may be sold by the secretary;” where there were debts owing, the word may must be read as equivalent to the word shall. In the words of the court below, the word may in the section of the constitution should, doubtless, be read must, because the settlement of the debts by the sale is compulsory. When a member dies his seat may be sold by the secretary, and after satisfying the claims of the members of the board, the balance shall be paid to his legal representatives. In other words, the balance of the new member’s entrance-fee is to be paid to the deceased member’s legal representatives. What balance ? The balance that remains after satisfying the claims of the members of the board. The seat has originally no monied value. A monied value is given to it, not through its intrinsic nature, but by an agreement of the club-members, but this value is the balance; not the whole of the new member’s entrance-foe.
    This view has been taken in all the cases cited in tho opinion of the court below. To the oases there mentioned may be added one recently decided by the Court of Common Pleas, No. 3, and on writ of error now in this court: Pancoast v. Houston, 5 W. N. C. 36. It was there held, that an outside creditor could not sell the seat of a member of the Philadelphia Stock Exchange, against his will and that of the exchange. Until the owner’s liabilities to the other members were settled it was their property. The owner was only entitled to a balance.
    Ño authority was ever assumed as to matters arising subsequent to the death. It is difficult to see how a question of the indebtedness of a deceased broker to a fellow broker, for business transaction, is other than a claim arising between members of. the board. (See next case, Pancoast v. Gowen et al. — Rep.)
   The judgment of the Supreme Court was entered, January 27th 1879,

Per Curiam.

The constitution and articles of a voluntary association, such as the Philadelphia Board of Brokers, are law as to the members. The plaintiff below was not a member, but had furnished the money by which Richards obtained a seat. His contention is that he was the equitable owner of the seat, and had title to what was received for it, and that the defendant had no right to apply the proceeds to debts due by Richards to other members, in pursuance of the terms of the constitution of the club. But why not ? Richards was the member of the board, the legal owner of the seat, and the plaintiff an entire stranger, unknown to the association. The members gave credit to each other in part, no doubt, upon the faith of the liability of a member’s seat to them for his debts. There is nothing unlawful or unreasonable in this regulation. The seat is not property in the eye of the law, it could not be seized in execution for the debts of the members. It is the mere creation of the board, and, of course, was to be held and enjoyed with all the limitations and restrictions which the constitution of the board chose to put upon it. Judgment affirmed.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Pancoast versus Gowen et al., Garnishees.
    A seat in the Philadelphia Stock Exchange is not property subject to execution in any form. It is a mere personal privilege or license to buy and sell at the meetings of the hoard. It cannot he levied on or sold under a fieri facias or attachment-execution.
    January 27th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Woodward, Trunkey and Sterrett, JJ.
    Error to the Court of Common Pleas, No. 1, of Philadelphia county: Of July Term 1878, No. 82.
    Attachment-execution by S. Pancoast against Henry Gowen and others, trading as The Philadelphia Stock Exchange, garnishees.
    Upon a judgment obtained by Pancoast against Joseph L. Houston, an attachment execution was issued and served upon Gowen and others, trading as The Philadelphia Stock Exchange, as garnishees. The answers of tho garnishees to the interrogatories filed admitted that Houston, the defendant in the judgment, owned a seat in the stock exchange, against which there were no claims by the members of that body at the time the attachment was issued, but they alleged that claims had since been presented, and that Houston held his seat subject to the following conditions :
    “ No election of new members shall take place until two weeks at least have elapsed after- the application or nomination shall have been laid before the stock exchange, and the applicant shall then, upon a favorable report of the standing committee, or where, if unfavorable, the committee’s report has been reversed by the stock exchange, as provided in sect. 8, be balloted for and admitted to membership, provided that not more than fifteen black-balls be cast against him, a.nd that not less than fifty balls arc cast.
    “ Any member shall have the right to sell Ms membership subject to the following conditions :
    “ When a member wishes to sell his membership, tho name of the proposed purchaser shall be submitted to the standing committee, and on the approval of two-thirds of said committee, and after the usual two weeks’ notice to the exchange, the applicant shall be balloted for, and if elected, the transfer shall be made, provided the member selling has no unsettled contracts with or claims against him by any member of the stock exchange, for transactions arising in or relating to the business of banking or a stock or exchange broker. Where the arbitration committee shall determine that such claims or contracts existed, the standing committee may, except in cases of insolvency, refuse to permit the seat to be sold, until such claims or contracts are in its opinion satisfactorily settled.
    “ The proceeds of the seat, if sold, shall belong to its owner’s creditors, who are members, of the stock exchange, in proportion to the amount of their respective claims, determined by the arbitration committee, as hereinbefore provided in sect. 9. The claims of members so ascertained shall first be paid in full, and what remains, if anything, of the proceeds of the seat shall then be paid to the owner.
    “ When a member dies, his seat shall, within six months thereafter, be sold or transferred, and all claims against the deceased by members of the stock exchange (determined as hereinbefore provided in sect. 9, in disputes between living members) shall be paid to them in full, after which, if anything remains, it shall be paid to the personal representatives of the deceased.
    “ The seat of a deceased member shall ho liable for all assessments which may be made by the exchange, from the day of his death until such time as his seat is sold and transferred.

      “In case any member shall have begun legal proceedings against the exchange, and shall not have prosecuted the same to a successful termination, all expenses incurred by the exchange, in and during the prosecution of the suit, including counsel fees, costs of court, printing, &c., shall constitute a charge against the seat of the said member, the collection of which shall be enforced in the same manner as that now provided for the collection of fines; and upon the sale of the member’s seat during his lifetime, or after his death, the said charge shall in all respects be treated as an ordinary fine.
    “Uo member of the exchange shall be allowed to take as partner any member suspended for a violation of these rules, (during the period of his suspension), or to form a partnership with any insolvent person.
    “ Any member who fails to comply with his contracts, or who becomes insolvent, shall immediately inform the president of the exchange of the fact, whose duty it shall be to give notice forthwith of the failure of such member ; and in case of the refusal or neglect of such delinquent to make such report to the president, it shall be the duty of any member having a knowledge of the fact to report the same forthwith to the standing committee or the president, w'ho shall thereupon appoint a committee of three members to inquire into the fact and report thereon without delay; and if said committee report the charge to be true, and no apjieal from said report be taken within seven days, or where an appeal having been taken, the report shall have been confirmed by the stock exchange, said member shall ■ be suspended ; and it shall furthermore be the duty of the standing committee, upon receiving information thereof, or having directly or indirectly any knowledge of such failure on the part of any member to comply with his engagements as above stated, to report the same without delay to the president, and ask for the appointment of a committee, as before provided. And in case of the insolvency of any member, he shall within three days, make good, to the full amount thereof, all friendly loans of cash or stocks from members, or any over-draught on any bank. But seven days shall be allowed him in which to settle stock contracts. All his outstanding, unprotected contracts shall be adjusted by the prices of the Exchange; if the failure occurs in the morning, at the second session, and if in the afternoon, at the first session of the next day.
    “ On an application for readmission, a suspended member may be restored to his seat, provided his name shall have been posted for two weeks, and that upon a ballot not less than fifty votes are cast and not more than fifteen black balls appear against him ; but such application shall first be referred to the standing committee, whose duty it shall be to ascertain that the applicant has settled and arranged his affairs to the satisfaction of his creditors, and that his present situation affords a reasonable security in future transactions ; and unless and until the said committee report in favor of readmitting the said suspended member, he shall be held to be still in default, and no vote to restore him to his seat shall be had.
    “It is expected from the applicant that he will give the committee full explanations of any disputed or unsatisfactory transactions, and, at their request, free access to his books and papers for that purpose.
    “ A suspended member shall, if reinstated, pay all the fines due at the time of his suspension.
    “Any member who shall become a bankrupt by his own act, or that of his creditors, shall defacto be suspended from the stock exchange; but a suspended member presenting a certificate of discharge under the United States Bankrupt Law becomes eligible under the rules reinstating suspended members.
    “ If any suspended member fails to settle with all his creditors within one year from the time of his suspension from the stock exchange, his seat shall be sold by the secretary, and the proceeds shall be paid pro rata to his creditors in the stock exchange. That amount due said creditors shall be determined by the arbitration commitee, in the manner hereinbefore provided in section IX. of the constitution.
    “No expulsion or suspension of a member shall affect the rights of creditors, as provided for in the constitution and by-laws.”
    The answers further set forth : “ The garnishees are of opinion, and so aver, that at the service of this writ they held no property of any kind, attachable at the suit of the plaintiff, belonging to Joseph L. Houston, the seat belonging to him not being property, except between members of the Philadelphia Stock Exchange.”
    Two rules were taken, one by the plaintiff, against the garnishees for judgment on the answers, and the other by the garnishees on the plaintiff to show cause why the attachment should not be dissolved. After argument of both rules, the court discharged the first, and made the last absolute, “ so far as the seat or membership of the defendant in the Philadelphia Stock Exchange is concerned.” Subsequently, the plaintiff filed a written admission that the garnishee was not in possession of any property of the defendant, liable to attachment sur judgment, other than the defendant’s seat or membership in the Philadelphia Stock Exchange. Whereupon, on motion of counsel for garnishees, the court, Allison, P. J., made absolute the rule to dissolve the attachment, in an opinion, saying : “ The words of the constitution of the stock exchange show that the seat, or right of membership, is property, since it is held as security for payment of debts due members of the board. But it is the property of the Philadelphia Stock Exchange until all questions of claims against its owner by members of the board are settled. Until we have some means of knowing that all such claims have been fully settled, or that none exist, we do not think an attachment could be lawfully issued against the board, or the privilege sold.”
    The plaintiff took this writ, alleging that the court erred in making absolute the rule dissolving the attachment.

      P. F. Rothermel, Jr., for plaintiff in error.
    The seat of a member of the' Philadelphia Stock Exchange is property and not a mere personal right. By the terms of the constitution of the stock exchange, which forms the contract between that institution and the owners of seats therein, it is provided that “ any member shall - have the right to sell his membership subject to the following conditions.” This provision of itself determines that it is property; the fact that the seat is the subject of purchase and sale, that it may be transferred from one person to another, conclusively establishes that it is not a mere personal right. In fact the point has been recently decided in the United States Supreme Court, in Hyde v. Woods, 4 Otto 523, where the learned judge, who delivered the opinion of the court, speaks of a seat in the San Eran cisco Stock and Exchange Board, subject to conditions similar‘to those attached to the one in question.
    If the seat is personal property it would seem to follow as a necessary consequence, that it is liable to execution. The policy of the law is certainly opposed to exempting the property of a debtor from execution. The only question therefore remaining to be considered is, whether the conditions annexed to ownership are such as to defeat this natural implication. The effect of these provisions is simply to render the seat a pledge in the hands of the stock exchange, as security for liability of the owner to that body and the other members of it; and it is by reason of this effect that under the Act of Assembly the seat is the subject of attachment-execution: Act of June 16th 1836, Purd. Dig. 630, pl. 32,
    N. Dubois Miller, A. Sydney Biddle and George W. Biddle, for defendants in error.
    It cannot be contended that the purely personal privilege of belonging to a certain club or association of individuals for any purpose, whether of a- social or business character, is in any sense property which is liable to be taken in execution. The constitution does not say that a member shall be entitled to the proceeds of a seat. It distinctly says that “ the proceeds of the seat, if sold, shall belong to its owner’s creditors who are members of the stock exchange;” and the only property that the member can have at all is the balance of the proceeds, if any such exists. There may never be any balance; then there will never be any money due the retiring member, and no debt which can possibly be attached. The seat has not been sold. Clearly, then, there is no balance of money due, no debt owing to the debtor. Have the members of the stock exchange any of his property, any goods or chattels pawned or pledged with them ? The record discloses none. Has he any right of action under any contract ? No ; the only contract that exists is one by which they mutually agree that for each other’s benefit they will trade in certain ways and with certain people, and the contract has not yet been broken; there is not, therefore, even a right to damages for breach of contract. The decision of the lower court is in keeping with the line of decisions: Evans et al. v. Wister, 1 W. N. C. 181; Singerly v. Johnson, 3 Id. 341; Leech v. Leech, Id. 542. This case is ruled by Thompson v. Adams, ante, p. 255.
   The judgment of the Supremo Court was entered, Februarv 24th 1879,

Per Curiam.

— 0A seat in the board of brokers is not property subject to execution in any form. It is a mere personal privilege, perhaps more accurately, a license- to buy and sell at the meetings of the board. It certainly could not be levied on and sold under a fi. fa. The sheriff’s vendee would acquire no title which he could enforce, nor is it within either the words or the spirit of the Act of June 16th 1836, sect. 35, Pamph. L. 767, providing for attachment on judgment. Whether the proceeds of the sale of the seat in the hands of the treasurer of the board, and payable to the defendant, according to the regulations and by-laws of the board, could be thus reached is an entirely different question. This, and no more, is what we understand to have been decided by the Supreme Court of the United States, in Hyde v. Wood, 4 Otto 525, where Mr. Justice Miller says, “If there had been left in the hands of the defendants any balance after paying the debts due to the members of the board, that balance might have been recovered by the assignee” in bankruptcy.

Order dissolving the attachment affirmed.


author: Mr. Justice Gordon

text:
    City, to use of O’Rourke, versus Hays.
    _1. To a scire facias on a municipal claim, the defendant pleaded that the highway department had contracted with the claimant without complying with the provisions of the ordinance under the provisions of which the contract was made. The claimant replied that under a subsequent ordinance all such contracts were ratified and approved. The defendant demurred on the ground that the contract having been invalid it could not be thus ratified as against defendant: Held, that judgment should have been entered for claimant on the demurrer.
    2. Although the agent of the city exceeded his authority, as the contract was one which the city might have authorized, it could waive the irregularity and adopt the contract after it was made. The question of adoption is one exclusively for the city, and with which the citizen has nothing to do.
    3. McKnight et al. v. City of Pittsburgh, 10 Norris 273, followed; City of Philadelphia v. Phila. & Reading Railroad Co., 7 Norris 314, distinguished.
    January 30th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas, No. 4, of Philadelphia county: Of July Term 1879, No. 96.
    Scire facias by the City of Philadelphia, to the use of Michael O’Rourke against John Hays, owner, or reputed owner, on a municipal claim for paving in front of a lot on Lehigh avenue, “ having been done pursuant to a contract made under the authority of an ordinance of the city of Philadelphia, approved December 30th 1873, after the claimant had been selected by the owners in accordance therewith, for which sum of $53.37, with interest thereon, a lien is claimed upon the above-described premises, pursuant to divers statutes enacted and provided.”
    To the scire facias the owner pleaded, “That by the ordinance of the city of Philadelphia, approved December 30th 1873, providing for the paving of Lehigh avenue, between Richmond street and Erankford road, the Department of Highways was .only authorized to enter into a contract for such pavin-g (for a portion of which the claim upon which this suit has been brought was filed) with a paver, or pavers, to be selected by a majority of the owners of property fronting on Lehigh avenue, between Richmond street and Erankford road, and the defendant, in fact, says that the said Michael O’Rourke was not, when he applied to said Department of Highways for the contract to do the said paving, and when the said contract was awarded to him, a paver selected by a majority of the owners of property fronting on Lehigh avenue, between Richmond street and Frankford road.”
    And for a further plea, “ That by certain ordinances of the city of' Philadelphia, approved December 31st 1862 and March 24th 1871, it- was provided that before any contract for paving any street or streets should he entered into by the Highway Department, the person or persons applying for such contract should give notice of such application, setting forth, inter alia, the name and residence of each person signing for the contractor making such application; and the said defendant, in fact says, that the said Michael O’Rourke did not give any notice of his application for the contract for paving the cartway of Lehigh avenue, setting forth the name and residence of each person alleged to have signed his application for said contract.”
    To these pleas the plaintiff filed the following replication: “ That nothing therein contained bars a recovery for the work done as in said claim set forth, because that by an ordinance of the city of Philadelphia, approved December 3d 1878, it is expressly provided that ‘ all contracts for paving streets entered into by the Department of Highways under which work has been done under resolution or ordinance authorizing the same, be, and the same are, hereby ratified and approved,’ and this plaintiff, is ready to verify.”
    To this replication the defendant demurred, for the following reasons:
    As the contract entered into between the City of Philadelphia and Michael O’Rourke for the paving of the market plots in Lehigh avenue, referred to in the claim upon which this suit is brought, was an utterly void contract, the same could not be and was not legally ratified and approved as against this defendant by the said ordinance of December 3d 1878.
    The councils of the city of Philadelphia had no power, right or authority as against this defendant to pass an ordinance ratifying or approving an invalid contract theretofore made and thereby to impose upon the property of this defendant a lien to which it was not previously thereto subject.
    The said contract between the said city -and Michael' O’Rourke was an absolute nullity, and no ordinance of councils or proceeding thereupon could over validate the same or impose any lien or liability arising therefrom as against the defendant or his property.
    The said ordinance was not intended to ratify and approve absolutely void contracts theretofore made between it, the said city, and a contractor not chosen in accordance with the ordinance authorizing the paving,, such as that made between the said city and the said Michael O’Rourke.
    The said ordinance was intended to ratify and approve invalid or void contracts only as between the said city and the contractor, and not as against the property owners along the line of the streets paved.
    Because the said ordinance has no application to the contract between the said city and Michael O’Eourke, referred to in the claim in this cause.
    And also because the said replication is in other respects uncertain, informal and insufficient.

      David W. Sellers, for plaintiff in error.
    The ordinance of December 3d 1778 set forth in the replication, it is believed, cured all contracts under which the work was done, and the only question is, whether the city could ratify work done by a volunteer upon which no adjudication had taken place.
    The paving created a lien, not the contract therefor. The claim was filed within six months from the time of the work done. No law conferred upon the owner the right of selection; that wholly depended upon the pleasure of the city. If a volunteer should have paved, and used her name in filing claims, a lien would have been created, though defeasible and avoidable by showing a want of authority. Until this should be done, however, the remedy was subject to cure, and this is exactly what was done in the case before the court.
    The principle governing this case was settled in Bolton v. Johns, 5 Barr 145

      Thomas Hart, Jr., for defendant in error.
    The contract referred to in the claim made between the city and O’Eourke for the paving of the market plots upon Lehigh avenue, has been decided by this court to be utterly void, and the liens filed against the properties of owners of ground along Lehigh avenue have been declared invalid : City of Philadelphia v. Philadelphia and Reading Railroad, 7 Norris 314.
    This is an attempt to override that decision by the application of the ordinance of December 3d 1878. It is not necessary for this defendant to consider how far the ordinance of 1878 may have imposed any liability upon the city. It is sufficient for him that the ordinance cannot, as against him, validate the contract with O’Eourke, and make, by its mere enactment, that a good lien which was none before.
    In the present case there is no repeal of the original ordinance, and no dispensation with the requirement thereof, that the nominee must be the choice of a majority of the property owners. There is no purpose to provide for a new contract with anybody else; nothing but the attempted validation of an inherently and incurably bad one.
    Nor is the case of Bolton v. Johns, supra, cited by the plaintiff, in point. The debt there was good, and all the legislature attempted to do was to give a new and more efficient remedy for the collection thereof. See Mr. Meredith’s argument that the power of the legislature to validate void contracts is confined to matters of mere informality. A contract which has become void by force of its inherent conditions cannot be reinstated by an Act of Assembly: Plank Road Co. v. Davidson, 3 Wright 435.
   Mr. Justice Gordon

delivered the opinion of the court, March 1st 1880.

The Act of February 2d 1854, clothes the city councils with full power to order the paving of streets and foot-ways, and to charge the expense to the owners of the ground in front of which the work is done. Thus the first part of this act gives them the unqualified power to pave the streets, and this they may do by contract or otherwise, as to them may seem proper, whilst the latter part prescribes the method of taxation by which the means may be raised to pay for the work. It is not, indeed, pretended that any Act of Assembly requires the property owners to be consulted, either as to the character of the work proposed to be done, or as to the contractor who shall execute that work. As was held in Dickinson v. Peters, 6 W. N. C. 458, the councils may, in the face of their own ordinance, order a contract to be awarded to ono not the choice of the property owners.

The case of the City v. The Railroad Co., 7 Norris 314, did not turn upon any want of power in the city to make the contract as it was made, but on the fact that its agent, the Highway Department, had exceeded its authority in making the contract with O’Rourke, notwithstanding the fact that a majority of the property owners had refused to indicate him as their choice. Therefore, this contract could not be enforced against the lot-holders, for the reason that it was not binding on the city. It was on this ground alone, and not because of any equity in themselves, that they were enabled to resist payment. But under the powers vested in the city councils, already referred to, there is no doubt that they could have approved and accepted the work, and so have bound the city. And whether it was proper so to do or not, was a question for them, and not for the property owner. His right was to have a good pavement in front of his premises, and personally he had no other right. When, therefore, by the ordinance of December 3d 1878, the councils ratified the contract with O’Rourke, the city became bound, and the defence by the property owners, on that ground, was, of course, "no longer available.

In principle this case is the same as McKnight v. City of Pittsburgh, 10 Norris 273. The defence to the lien in that case was, that the contract was invalid in that the city engineer, by whom the contract was executed on part of the city, had exceeded his authority in adopting a grade different from that prescribed by ordinance. But the power of the councils to ratify the contract, thus rendered void by the act of the agent making it, was by this court sustained, in the language following : " Such being the case, the engineer exceeded his authority when he disregarded that grade and adopted a new one, and the city, at any time before the adoption, by it, of the work done by the contractor, might have repudiated the act of its engineer and avoided the contract.’ But it could not do this after such adoption; for, as in the case of a private person, it having the power to contract, the power to adopt a contract, made for its benefit, is necessarily involved in the original power. It is, indeed, but a question of power that we have to consider; that being determined all is determined. Hence, we repeat, the city having the undisputed power to establish grades, and to make contracts for paving, the correlative power of adopting grades and contracts made by its officers, for its own benefit, necessarily follows.”

In the case in hand, as in the one above cited, the agent exceeded its authority, but as the contract was one which the city might have authorized, it could waive the irregularity, -and adopt that contract after it was made. The question of adoption, however, as we have already said, was one exclusively for the city, and with which the citizen had nothing to do. That the cost of the work is to be assessed on his property does not alter the case, for the assessment is, after all, but a municipal tax, and, we presume, were this a repaving, and, therefore, payable by general taxation, no one would contend that a citizen could defend against the payment of his tax on the ground that the contract, under which the work had been done, though approved and adopted by the city, had been originally void, or voidable, by reason of a want of authority in the agent by whom it was executed. Thus, if we leave out of view, as we should do, the peculiar method of the assessment and collection of the tax by which the work is to be paid for, the matter becomes very clear and obvious. The doubt and obscurity arise only when we treat these paving contracts as somehow made with or for the lot-owner, and therefore requiring his ratification for its validity.

The judgment of the court below is reversed, and it is now ordered that judgment on the demurrer be entered for the plaintiff, for the amount of the claim filed with interest and costs; liquidation to be made by the prothonotary of said court.


author: Mr. Justice Mercur

text:
    Fritz versus Heyl.
    1. An action upon a promissory note was improperly brought in the name of one who was not the owner of the note. By consent the record was amended, so that the action stood in the name of the original plaintiff to the use of the real owner. The defendant then offered to prove that the legal plaintiff had no interest in the suit, and it had been brought without his knowledge, which offer the court rej eeted. Held, that this was not error.
    2. The proper amendment would have been to strike the name of the original plaintiff from the record, but as the amendment was a formal one, which the court below was authorized to make, the Supreme Court will regard it as having been made.
    January 9th 1880.
    Before Sharswood, G. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas, No. 1, of Philadelphia county: Of July Term 1878, No. 107.
    Assumpsit by Walter Heyl against Peter Eritz, on a promissory note, made by the defendant to the order of J. R. Casselberry, by whom the same was endorsed. After the cause was at issue, a rule was granted to show cause why the record should not bo amended so that it would read, “ Walter Heyl, to the use of A. L. Bonaffon v. Peter Fritz,” which rule was by consent made absolute.
    At the trial, before Biddle, J., the plaintiff gave in evidence the note and rested. The defendant then offered to prove “ that Heyl, the legal plaintiff, had no right, title or interest in the note produced, at the time this suit was instituted, or since, and that the suit was brought in his name, without his knowledge or consent, and that the note was never delivered to him, or accepted by him, or on his account.”
    The plaintiff objected, and the court sustained the objection. The verdict was for plaintiff, and after judgment thereon, defendant took this writ, and alleged, inter alia, that the court erred in refusing his offer.

      Arthur C. Selden and George S. Selden, for plaintiff in error.
    Long after the cause was at issue, the record was amended so as to read, “ Heyl, to the use of Bonaffon.” The effect of this amendment was merely to show that Bonaffon was the beneficiary, and in no wise changed the status of Heyl. It was certainly competent for the defendant to show upon the trial that Heyl had never had the title to the note in suit, and that ho had never authorized the suit to be brought in his name. If he did not have any title, then there could be no recovery in the suit: Railroad Co. v. Wilcox, 12 Wright 68 ; Chambers v. Davis, 3 Whart. 48 ; Armstrong v. City of Lancaster, 5 Watts 68 ; Insurance Co. v. Smith, 1 Jones 124.

      John D. Yarrow and John O. Bowman, for defendant in error.
    Title to the note passed by mere delivery after it had been endorsed in blank by the payee, and the defendant could not question the title of the plaintiff, except to protect himself from a subsequent suit, by some one having a better title, who had not acquiesced in the suit. This is a well-established rule : Austin v. Birchard, 31 Vt. 593; Ellicott v. Martin et al., 6 Md. 509. In Gage v. Kendall, 15 Wend. 640, it was held that the holder of negotiable paper may bring suit in the name of a person having no interest in it, and it is no defence that the suit be thus brought without the knowledge or authority of the nominal plaintiff. The same rule is established in many other cases: Golder v. Foss (1 Ludden) 43 Me. 364; Richards v. Betzer, 53 Ills. 466 ; Gushee v. Leavitt, 5 Cal. 160.
    The defendant below was not injured, nor deprived of any defence he could have to the payment of the note, .by having suit brought in the name of Heyl. This was done at the instance of the real owner. Heyl did not object to the use of his name, and it was certainly not in the power of the defendant to object for him.
   Mr. Justice Mercur

delivered the opinion of the court, January 26th 1880.

This was a suit against the plaintiff in error on a promissory note drawn by him to the order of Jacob B. Casselberry, and endorsed by the latter. It was brought in the name of Heyl. An affidavit of defence was filed alleging the note was not the property of Heyl but belonged to A. L. Bonaffon, to whom it had been paid. A rule was then taken to show cause why the record should not be so amended as to read Heyl to the use of Bonaffon. This was made absolute by consent.

After the note had been given in evidence without objection, the plaintiff in error, by several offers, in substance, offered to show by Ileyl that he did not get the note from Casselberry as alleged in the declaration, and never had the possession or ownership of it, and that the suit was brought without his knowledge or consent. The counsel for the defendant in error admitted that Heyl had no interest'in the note, and that Bonaffon was the real owner. The court rejected the offers of the plaintiff in error. The rejection is assigned for error.

It must be conceded, the suit should have been brought in the name of one who had some interest in the note, or consented that his name be so used; but through the action of the plaintiff in error and for his benefit the name of Bonaffon was added to the record as the real party. The alleged defence was thereby made clearly admissible. Both parties agreed that Bonaffon wás the actual owner of the note. He so stood on the record. Fritz was not shut out from' any defence he might have made if the case had stood in the name of Bonaffon alone. On motion the name of Heyl could have been stricken from the record. Regularly it should have been done. As it could have been so amended we may consider it as having been done. No new or different cause of action is introduced. No substantial benefit was denied to the plaintiff in error. The amendment under all the circumstances, is a formal one, and gives no just cause of complaint.

Judgment affirmed.


text:
    Bisbing versus The Third National Bank.
    1. Where the plaintiff in an execution, in good faith sells the personal property of the defendant in order to protect himself and acquire a good title to the property, ho may leave the goods in the possession of the defendant without thereby making them subject to the latter’s debts. A change of possession is not necessary to give validity to a judicial sale.
    2. Goods wore thus left, after a sale, with the defendant in an execution, with the understanding that they might he repurchased upon payment of the amount of the judgment. There was no evidence of any fraudulent understanding prior to the sale. Held, that they could not he seized in execution and sold by a subsequent judgment-creditor.
    3. The omission of the court to charge upon a particular point, for which there is no request, is not assignable for error, yet if the language of the court, taken in connection with the circumstances of the case, may have misled the jury as to the law, or if the tendency of the charge was to mislead them, it is ground for reversal.
    January 14th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Paxson and Trunkey, JJ. Sterrett and Green, JJ., absent.
    Error to the Court of Common Pleas, No. 2, of Philadelphia county: Of January Term 1880, No. 19.
    Feigned issue, wherein John M. Bisbing was plaintiff and the Third National Bank defendant.
    On October 5th 1876, Bisbing purchased at sheriff’s sale, made by virtue of an execution issued by him on his own judgment, against the firm of James E. Packer & Sons, certain goods for $211. His judgment was for some five hundred and odd dollars, cash loaned. After the sale he did not remove the property, which consisted of machinery in a small machine shop, but allowed the Packers the use of it, so they might earn money to pay him back. Sometime after the present defendants, the Third National Bank, levied upon the same goods, upon which Bisbing claimed them, a sheriff’s interpleader was framed, and James Miller became surety upon the claimant, Bisbing’s bond. Subsequently, difficulties again arising in Packers’ business, Bisbing sold these goods at auction for $800, and the money was placed in Miller’s hands to indemnify him on his bond. Miller, however, paid over to Bisbing $430, and he relinquished his claim to the remaining $370 in favor of the Packers.
    At the trial, before Hare, P. J., the plaintiff offered in evidence the record of the judgment of Bisbing v. Packer & Sons, and called Bisbing, who testified, “ I am the plaintiff in this case; I owned these goods ; I purchased them at sheriff’s sale of Packer & Sons for $211, and received a bill of sale from the sheriff. The note on which the sale was had was given in 1874 for $500. I entered up the judgment because I saw the Packers were going down hill. I issued execution and sold them out to protect myself. I left the goods there for them to use, the understanding being that they might buy them back if they could, that is, if they could pay me what was actually due me on the note, but they were unable to do so. There was due me on the note a little over $400 and some interest. Packer & Sons had paid me $100 on the note before I entered judgment. The goods, subsequently to this inter-pleader, were sold at auction on my account. They brought $800, which was paid to Miller, my surety in this interpleader.' Miller paid me the balance due me on my note, $430 in full. I have no claim on the $870 remaining in his hands ; it is the Packers’. If this case goes in my favor, it is to go back to the Packers as their money. All the goods purchased by me were not sold at the auction; some of them had been previously sold at private sale. I cannot tell how much was realized for them. Packer & Sons got the money.”
    The court charged the jury as follows: “ If the arrangement under which the sale took place was that the property should remain in the hands of Packer & Sons, with a right on their part to pay it back, on payment of balance due to plaintiff, that would be a right of property or ownership which they might enforce against the plaintiff, and which might also be enforced by their other creditors. And the jury should render a verdict for the defendants.”
    After consultation, the court instructed the jury, who had proposed to render a verdict for $370, that “ the jury shall proceed to render a verdict under the instructions already given.”
    The verdict was for defendant, when plaintiff took this writ and alleged that the court erred in the above charge to the jury, and in not directing a verdict for plaintiff.

      E. M. Hunt, for plaintiff in error.
    The charge did not state the law correctly. There was no evidence that Bisbing bought with any understanding with the Packers. The evidence was that after the purchase he left the goods for them to use. The inference is that such leaving was an act of benevolence, and the law does not repel such charity by any presumption of fraud : Maynes v. Atwater, 7 Norris 496. The court erred, therefore, in saying that there was a right of property, an equity of redemption, so to speak, that the debtor or his other creditors could enforce.
    The language of the court also tended to mislead the jury: Kissinger v. Thompson, 12 S. & R. 44; Hersheaur v. Hocker, 9 Watts 455; Relf v. Rapp, 3 W. & S. 21; Wenger v. Barnhart, 5 P. F. Smith 303; Gregg Township v. Jamison, 5 Id. 468; Railroad Co. v. Berry, 18 Id. 272; Stall v. Meek, 20 Id. 181.

      Francis A. Osbourne and George P. Rich, for defendant in error.
    Under all the evidence in the case, not merely what was said but was done'by the parties, the conclusion is irresistible, that either this sheriff’s sale was, from its inception, a fraud, or else that at the time of our levy on these goods, there was in defendants some right of redemption, which they could have enforced against plaintiff, and a fortiori which their creditors could enforce, and so the jury have found: Scholt v. Chancellor, 8 Harris 195. Of the case of Mayne v. Atwater, relied upon by the plaintiff, it is sufficient to say that that was a case of a compulsory nonsuit, and it was held to be error, because the question of intention with which the plaintiff had left his goods in the debtor’s possession should have been submitted to the jury.
   Mr. Justice Mercur

delivered the opinion of the court, May 3d 1880.

This issue was to determine the ownership of certain personal property. It had previously been sold on execution in favor of the plaintiff in error, as the property of Packer & Sons, and purchased by him. After his purchase he suffered the goods to remain in possession of the former owners. The defendant in error subsequently levied on the same goods as the property of Packer & Sons. On the trial of the issue the plaintiff was the only witness sworn. It appeared by the record evidence, and by his testimony, that all the forms of law, requisite to make a valid sale, were observed. That portion of his evidence which appears to have controlled the opinion of the court was in these words, “I issued execution and sold them out to protect myself. I left the goods for them to use, the understanding being that they might buy them back if they could, that is if they could pay me what was actually due me on the note; but they were unable to do so.”

Two questions arise under this evidence. The one the object in making the sale; the other the arrangement under which the goods remained in possession of Packer & Sons. The plaintiff had an undoubted right to sell for the purpose of protecting himself, and for a like purpose to buy at the sale and acquire a good title to the property. If he did thus acquire such a title, he might leave the goods in the possession of the former owners without thereby making the property subject to their debts. A change of possession is not necessary to give validity to a judicial sale: Myers v. Harvey, 2 P. & W. 478 ; Craig’s Appeal, 27 P. F. Smith 448; Lothrop v. Wightman, 5 Wright 297. The witness does not testify that there was any understanding, prior to the sale, by which he was to purchase the goods, or leave them in possession of the former owners; nor that they, after the sale, agreed to purchase. It was a mere offer to sell on terms which they were unable to accept. The charge of the court is very brief. It wholly omits to call the attention of the jury to the difference -between an arrangement made after the sale, and one made before it. It is true, the mere omission to charge upon a particular point for which there was no request is not assignable for error, yet, if the language of the court taken in connection with the circumstances of the case may have misled the jury as to the law, or if the tendency of the charge was to mislead them, it is ground for reversal: Railroad Co. v. Berry, 18 P. F. Smith 272; Stall v. Meek, 20 Id. 181; Fire Ins. Co. v. Rosenberger, 3 W. N. C. 16. In the hurry of the trial the learned judge appears to have ignored the view that the arrangement under which the goods were left might have been made after the sale, and impliedly appears to have assumed that it was prior. As a whole, we think the charge was inadequate, and calculated to mislead the jury from the true point of inquiry.

Judgment reversed, and a venire facias de novo awarded.


author: Mr. Justice Paxson

text:
    Wright’s Appeal.
    A testator died February 18th 1875, leaving a will dated October 18th. 1873, wherein he directed, inter alia, as follows: “ I have loaned sundry amounts of money to my children, as hereinafter set forth, which loans I wish to be considered as advances, and to be taken as money due from them to me, and in the distribution of my estate amongst them to be deducted from his, her or their share thereof. To this time I have loaned to my * * * son, John O. Wright, $7200. * * * Should I make any further advances to them, or any of them, I will charge the same in my memorandum or account book as heretofore.” No such memorandum book was ever found. When the will was made the testator held the bond of his son, John G. Wright, for $3500, dated January 23d 1869, payable in three years. The executors of testator in their account included John’s bond as assets of the estate, and contended that he should be charged with the amount of the bond as well as the sum charged in the will, which contention the court sustained. Held, that this was error; that it was the purpose of the testator to make the charge for advances substantially equal to the debt John owed him ; that the word “ loaned” and the word “ advanced” were used interchangeably ; that the bond should be treated as an advancement, and that the charge against John for advancements should be limited to $7200.
    January 19th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey, and Sterrett, JJ. Green, J., absent.

      Appeal from the Orphans’ Court of Philadelphia county: Of July Term 1879, No 22.
    Appeal of John C. Wright from the decree of the court in the adjudication of the executors’ first account in the matter of the estate of Isaac K. Wright, deceased.
    The testator, Isaac Wright, died February 18th 1875. By his will, dated October 18th 3873, he directed, inter alia, as follows: “ I have loaned sundry amounts of money to my children and some of my grandchildren, as hereinafter set forth, which loans I wish to be considered as advances to them, and to be taken as money due from them to me, and in the distribution of my estate amongst them to be deducted from his, her or their share thereof.
    “ To this time I have advanced to my daughter, Sarah Kenderdine, the sum of three thousand dollars ; to my daughter Mary W. Marple, four thousand four hundred dollars; to my daughter Rachel, eighteen hundred dollars; to her children, Elizabeth Mason, five hundred dollars ; James F. Mason, one hundred dollars ; Joseph 11. Mason, three hundred dollars.
    “To my son, David H. Wright, the sum of four thousand dollars, which sum I direct shall be deducted from his children’s share; to my son, John C. Wright, seven thousand two hundred dollars; to my son, George Wright, four thousand dollars; and to my daughter, Tacy Ann, wife of Samuel B. Chapman, three thousand dollars. Should I make any further advances to them, or any of them, I will charge the same in my memorandum account-book as heretofore.”
    When the will was made the testator held notes of his son George, dated April 8th 1869, at ten days from date, one for $2554.89 and the other for $650. These notes had been given in place of other notes held by testator against his son, given in part, and it would seem chiefly for moneys loaned, and in part for coal sold ; but the exact proportions of loan or sale did not appear.
    He also held the bond of his son, John C. Wright for $3500, dated January 23d 1869, payable in three years, with John Russell as surety. This bond was given for the purchase of one-half of testator’s interest in the coal business, carried on in the name of I. K. Wright & Son; the other half being purchased at the same time by his son-in-law, Samuel B. Chapman, who gave a similar bond, with the same surety. By a codicil dated February 6th 1874, the amount charged to his daughter, Mrs. Marplo, was reduced from $4400 to $400. A later codicil, dated September 9th 1874, republished the will as of that date without further change as to the advancements. Upon George’s notes an endorsement, in the* testator’s handwriting, stated that interest had been paid in full to October 8th 1870. Another endorsement, also in his handwriting, was as follows: “ No more interest to be charged on the within notes. 2 Mo. 4, 1875. I. K. Wright.” This date was just two weeks earlier than that of -his death. hTo memorandum-book, such as that spoken of in the will, was ever found. The executors appointed were testator’s sons, John and George, and His sons-in-law, Samuel B. Chapman and Joseph R. Kenderdine. The two last-named executors claimed that the provisions in the will were intended to embrace such indebtedness only as arose from loans not endorsed by note or other security; and that it did not include, for this reason, the notes and bond above mentioned, which were, therefore, and also because they did not represent loans, to be charged against George and John respectively, in addition to the sums mentioned in the will as chargeable to them. They accordingly (John and George not assenting to the right so to do) included the notes and bond in the inventory, and introduced them into the account as part of the assets of the estate, to be charged in distribution to the debtors. Interest on the bond was paid for some time after testator’s death (to February 1st .1877); no interest was paid on the notes after the date of the first endorsement.
    The auditing judge, Penrose, J., in an opinion, inter alia, said: “ Taken literally, and in its narrowest sense, the language of the will would, perhaps, exclude all indebtedness to the testator except that which originated from a loan. This would throw out the whole of John’s bond and some part of George’s notes. But too minute a stress is not to be laid on the strict and precise signification of words. . ■
    “The object of the provisions in the will was doubtless to secure equality in the distribution of his estate, and to prevent controversy as to the amount of indebtedness with which each child was to be charged. The object would be only partially accomplished, if not wholly defeated, if it was limited to a single species of indebtedness only. The words ‘loaned’ and ‘loans’ occur only in the introductory part of the clause relating to the subject. The word read in immediate connection with the charge is ‘ advanced,’ which would include a gift or sale of property as well as money. The bond of John was for a specific liquidated sum. It was overdue for more than a year when the will was drawn. It represented money, and it was not unnatural' to speak of it as an advance or a loan, although in strictness such was not its character.
    “ John’s circumstances were prosperous, and it does not appear that he stood in need of loans or assistance from his father. Yet the amount charged to him is larger than what is charged to George, who had failed in business, and who was constantly receiving gifts or loans. And it will he observed that the excess is just about the amount of this bond--the amount charged against Mrs. Marple, against Daniel and against George, being four thousand, while that against John is seven thousand two hundred.
    “ It seems extremely improbable that he should have ‘ loaned’ • to John and taken no note or memorandum of the indobtnoss, so much more than he did to those of his children, who would naturally require more from him. It is clear, therefore, the testator intended to embrace John’s bond in the amount charged to him.”
    Exceptions were filed to this adjudication, among which wore the following: That the learned judge erred in declining to treat the said bond of John C. Wright as one of the assets of said estate, and in adjudging that said bond should not be charged against the said John O. Wright in addition to the loan of §7200 specified in decedent’s will in the distribution of the estate; and in deciding that the said John O. Wright was not indebted to the said estate in the amount of said bond, to wit: §8500, with interest thereon from February 1st 1877, in addition to the loans made to him as mentioned in decedent’s will.
    The Orphans’ Court sustained the exceptions to the adjudication, and made a decree that the amount of the bond of John C. Wright he restored to the debits in the account filed by the executors, Ashman, J., in an opinion, inter alia, saying:
    “ The legal intendment, as applied to wills, is that tho testator uses technical words in their technical sense. And whore, in the will itself, such technical words have a clearly defined object upon which to operate, no extrinsic evidence is allowed to he brought in to limit or extend their application. The authorities on this point are numerous; it is sufficient to refer to Yundt’s Appeal, 1 Harris 575. In the present case, tho testator says: ‘ I have loaned to my children, as hereinafter set forth, which loans I wish to bo considered as advances to them.’ And he immediately adds: ‘ To this time I have advanced * * * to my son, John C. Wright, §7200.’ In language as accurate as can well he framed, the testator declares that the loans which he has made to his children are tho sole subjects of advancements. It is proposed, however, to go outside of the will, and to make, as a part of tho subject of this advancement, a debt due by one of the sons, which in no proper sense can be characterized as a loan. The bond of John, which is claimed to be embraced in the loans spoken of by decedent, was given in payment of a purchase from the father, and interest was regularly exacted upon it up to tho date of decedent’s death. It was not protended that interest was demanded or paid upon a single loan. There is nothing in the mere relation of parent and child to impress upon this transaction a character which it certainly would not have borne as between strangers. As if to exclude such a presumption, the parties agreed upon an instrument in wilting, which stamped the purchase by the son as the highest form of debt known to the law. He now seeks to annul the terms of his own bargain, and to give to a contract invested with peculiar solemnity, and accompanied with peculiar remedies, the character of a simple loan. The evidence which was offered for this purpose tended not to explain, but to defeat the will of the testator, and the exceptions taken, therefore, must be sustained.”
    From the above decree this appeal was taken.

      Henry R. Edmunds, for appellant.
    The plan of this will is plainly an endeavor by the testator to distribute his whole estate armmg the beneficiaries equitably. When he made the will, he says that he could not make this equitable distribution until he first turned to his account book, and ascertained what each beneficiary owed him. In that book there was charged to John C. Wright, the appellant, the sum of $7200, and the testator directs that John shall have one-seventh of his estate, less this sum of $7200.
    It is now sought to charge John with $3500 additional, because, as it is alleged, this $3500 was secured by a bond given for one-' half of testator’s business, and it was therefore a debt; but the other son’s indebtedness (that of George) was secured by promissory notes, given partly for merchandise sold, and yet this court has already decided, Wright’s Appeal, 8 Norris 67, that the testator intended that George’s indebtedness should be included in the amount charged to his share in the will, notwithstanding the technical language of the will.
    Technical rules of construction must yield to the express intention of the testator: Reck’s Appeal, 28 P. F. Smith 432; Musselman’s Estate, 5 Watts 9; Schott’s Estate, 28 P. F. Smith 40 ; Middlewarth’s Adm’rs v. Blackmore, 24 P. F. Smith 414.

      George W. Thorn and Joshua Pusey, for appellees.
    The testator did not intend the amount of the bond in question to be an advancement. He meant it to be a debt to be paid him sooner or later. It was a most solemn obligation, rendered the more important by the taking of security for its payment. That its character and importance had not escaped his memory at the time the will was made and afterwards, is evidenced by the fact that he required interest to be paid on the bond up to the last semi-annual payment preceding his decease. It is submitted that the consideration of the bond for $3500 having not been a loan or advance, the onus of proving it to be within the terms of the will was cast upon the appellant. He offered no proof in the court below that it was one of the debts or loans referred to by the testator; and in the absence of such proof it must be held that the testator’s intention was to leave this bond as a debt unaffected by the provisions of the will, which meant to refer to advances of money simply.
   Mr. Justice Paxson

delivered the opinion of the court, March 1st 1880.

This appeal is from the same decree as George Wright’s Appeal, decided at the last term in this district. The case will he found reported in 8 Norris 67. We are unable to see any substantial difference between the cases. They arise not only under the same will, but the same clause in the will. In George Wright’s Appeal, the question was, whether the appellant’s notes held by his father at the time of the death of the latter, were to be included in the sum charged in the will as advancements, or to be treated as assets in the hands of the executors. In the present case, the same question arises as to the bond of John C. Wright, also a son of the testator, for $3500.

We need not review the questions so carefully considered in the opinion of our late brother Woodward. It was contended, that the ruling in that case does not apply to the appeal of John C. Wright, because: 1. The bond in question was not a loan of money, but was given in payment of a business purchased by the appellant from his father; and, 2. The said bond was secured by one John Russell joining therein as co-obligor. Beyond this, there is no essential distinction between the cases;

We do not regard these matters as important. In George Wright’s Appeal, the consideration in part for the notes was coal sold George by the testator. To this extent, they no more represented a loan of money than did the bond of John. And the fact that the latter had given personal security, does not affect the question of advancement. The bond was given to the testator several years before the will was made. The taking of security at that time may have been for prudential reasons, and is not inconsistent with hjs subsequent intention of treating the bond as an advancement.

It was said in the opinion of the court in Wright’s Appeal: “ It has been strongly urged on behalf of the appellees, that as the testator declared that he had ‘ loaned ’ certain moneys to his children and grandchildren, debts owing by them to him were not intended to be included in the amounts severally specified. But the word advanced ’ was used in immediate connection with the schedule, in which the appellant’s liability to account in the distribution was declared. Besides, the notes were given mainly for money lent. They were in existence long before the will was executed, and the description of such moneys as ‘ loans'’ or as ‘ advancements,’ was not absolutely inapt. Under all the circumstances surrounding these parties, and in the light of the precedents by which cognate questions have been settled, it must be held, that it was the purpose of the testator to make the charge for advances substantially equal to the debts the appellant owed him. The word ‘ loaned ’ and the word advanced,’ were used interchangeably.” This language applies with equal force to the present contention.

The amount of advancements charged by the testator to his son John (appellant) is $7200. To add to this the bond in suit, would make John’s indebtedness $10,700, a sum largely in excess of the testator’s advancements to any of his other children. There are no circumstances in the case to account for this excess. On the contrary the auditing judge finds : “ John’s circumstances were prosperous, and it does not appear that he stood in need of loans or assistance from his father. Yet the amount charged to him is larger that what is charged to George, who had failed in business, and who was constantly receiving gifts or loans. And it will be observed, that the excess is just about the amount of this bond; the amount charged against Mrs. Marple, against- David and against George being four thousand, while that against John is 3even thousand two hundred.”

We need not pursue the subject further. The reasons given by the auditing judge of the court below, are ample to vindicate his decree, which in our opinion, should not have been set aside by the Orphans’ Court. We repeat what was said in Wright’s Appeal, that “ while it cannot be said positively that any charge beyond $4000 (here $7200) would be unjust, it may be said positively, that such a charge would be unsafe.”

Decree reversed and the record remitted ; and it is now adjudged and decree, that in the re-distribution of the-estate of -Isaac K. Wright, deceased, the bond of John C. Wright, the appellant, for $3500, shall be treated as an advancement; and that the charge against the said appellant for advancements be limited to $7200; and that the costs of this appeal be paid out of the funds of the estate.