text:
    National Bank of Oxford versus Kirk.
    1. A promissory note is void, where the consideration therefor is the promise of the payee that he will refrain from prosecuting the son of the maker for forgery.
    2. Fulton v. Hood, 10 Casey 865, distinguished.
    March 26th 1879.
    Before Sharswood, C. J., Merour, Gordon, Paxson, Woodward, Trunkey and Sterrett, JJ.
    Error to the Court of Common Pleas of Chester county: Of January Term 1879, No. 90.
    Assumpsit by the National Bank of Oxford against Joseph Kirk on the following note :
    “$5000.
    Oxford, Pa., Dec. 12, 1877.
    Four months after date I promise to pay to the order of James S. Kirk, at the National Bank of Oxford, five thousand dollars, without defalcation, value received.
    Credit the drawer.
    Joseph Kirk.
    Endorsed — James S. Kirk.”
    The pleas were non-assumpsit, payment with leave, &c.
    At the trial the defendant, who was quite aged, testified, in substance, that he was informed by Mr. Fulton, a director of the bank, that the bank held a good deal of the defendant’s paper, which the latter denied; that they went to the bank, where defendant was shown two notes with his namejm; that he declared that they were not his signatures, and asked what was to be done; that he was requested to sign the notes, which he refused to do; that he was sent for the next day, and, in company with his son Elisha, again went to the bank; that Fulton told him something must be done to straighten the matter up, and defendant told him he would do nothing; that they then said if he did not they would arrest his son, Mr. James S. Kirk, for forgery; that he replied they would have to do it; that Fulton said the best thing the defendant could do was to sign the notes, and that the matter would all be fixed without anybody knowing about it, and that if defendant would put his name to them he would not be disturbed; that defendant’s son Elisha was present when these things were said. Elisha fully corroborated the statements of his father. The note in suit was given by defendant in lieu of the notes above alluded to and to take them up.
    The president and cashier of the bank, in effect, testified that James S. Kirk stated that he had signed his father’s name on these notes, but had done so with his father’s consent; they had requested the defendant to come to the bank, when he was shown the notes; that he did not disclaim the signatures; that he was told he had better sign these notes to make them regular; that there might be some dispute about them; that he made no objection, and took the pen and signed the notes; that defendant remarked he was not making any money, and if he had to pay these notes it would take one of his farms, but if they gave his son, James S., time, he would reduce the debt.
    It was afterwards proposed to consolidate the debt of the said two notes into one note, to be endorsed by the said Joseph Kirk, and James S. Kirk was requested to ask his father to come to the bank for the purpose of endorsing the new note. Joseph Kirk came to the bank and the note in suit'was drawn for $5000.
    James S. Kirk being absent in Philadelphia at the time his father called at the bank, the new note was drawn payable to his order, and was signed by Joseph Kirk as maker. James S. Kirk subsequently endorsed the new note, and it was discounted and taken in lieu of the notes aforesaid, which were cancelled.
    In the general charge, the court, Butler, P. J., inter alia, said:
    “ Was the transaction what the defendant construes and represents it to be — an arrangement to conceal the knowledge and evidence of a crime, committed by James Scott Kirk, and to shield him from prosecution; in other words, was such the inducement and consideration for the endorsement of the old note and the execution of the new one ? Or was it simply the settlement of a dispute or uncertainty, respecting the defendant’s previous responsibility, growing out of the original endorsement of his name on the notes, and on which they were discounted by the bank ? As we have before said [if the transaction here described, and the consideration for the defendant’s acts were such as the defendant construes and represents them to have been, the consideration was unlawful and the endorsements and signatures on the new note created no obligation.] If on the other hand the transaction was simply the settlement of a dispute or uncertainty respecting the defendant’s previous liability, the consideration was lawful and good, and the defendant became bound for the debt, though he may not have been liable before, and the plaintiff may therefore recover.”
    Verdict for defendant, and after judgment, plaintiff took this writ and assigned for error the portion of the above charge in brackets.

      William Darlington and 8. D. Ramsey, for plaintiff in error.—
    There was no such duress as would avoid the contract: Fulton v. Hood, 10 Casey 365.
    The consideration is plain from the evidence. The defendant stipulated for, and the plaintiff granted time, in which the indebtedness could be discharged. The officers of the bank were informed, and had every reason to believe it true, that the endorsements were by authority, and so stated to the defendant and insisted upon it.] This gave rise to a controversy; the termination of which, by the defendant signing his name upon the notes, formed a good consideration. These considerations were all personal to the defendánt.

      Oliver Sidwell, Jr., and Wayne MaeVeagh, for defendant in error.
    It cannot be seriously contended that it was erroneous to charge the jury that an open, undisguised, and flagrant violation of the provisions of the criminal law of 'the state was an unlawful consideration for a promissory note. The only authority to -which reference is made in support of such a proposition is the case of Fulton v. Hood, 10 Casey 365. In that case the suit was upon a bond, and the defendant sought to be relieved from it upon the ground that the agent who obtained it made false representations as to the intentions of the creditors of the sons of the defendant to prosecute them. This court refused to relieve the defendant upon the ground that the representations, if false, were simply as to alleged intentions of other parties, and therefore related to matters resting on opinion, or to a fact equally open to the knowledge or inquiry of both parties; and in the second place, the statements did not relate to the interests of the defendant or affect him personally, and therefore that the falseness of the representations could not be considered as material.
    May 5th 1879,
   The judgment of the Supreme Court was entered

Per Curiam.

By the 10th sect, of the Act of March 31st 1860, Pamph. L. 387, it is provided that “ if any person having a knowledge of the actual commission of any' forgery, shall take money or promise thereof to conceal” the said crime, the person so offending shall be guilty of a misdemeanor. Now it was fairly submitted to the jury by the learned judge below, whether such a concealment was not the consideration upon which the defendant executed the note sued on. Fulton v. Wood, 10 Casey, 365, does not, as the learned counsel for the plaintiff in error contend, rule this case. That was a false representation that other persons threatened prosecution, which was held not to constitute duress per minas, and bears no resemblance to the law as applied to the facts of this case.

Judgment affirmed.


source: Caselaw Access Project

author: Mr. Justice Sterrett

license: Public Domain

text:
    Parke versus Neeley.
    1. As to time, the date of a mortgage as it appears on the registry of the mortgage is not to be conclusively taken to be the date or time of its execution, and parol evidence is admissible to show, that in point of fact, it was subsequently executed and delivered.
    2. As a general rule, a purchaser is not bound to look beyond a judgment-docket, for liens that should there appear. It is different, however, with the registry of deeds and mortgages. The chief object of recording them is to give actual as well as constructive notice to everybody of title and encumbrances thereon; and apart from notice, the only effect given to recorded instruments by the statute, is to make certified copies thereof evidence ; and in case of mortgages, to provide that they shall not be liens, until left for record, except mortgages for purchase-money, which continue to be liens from the date of their execution, if recorded within sixty days thereafter. .
    3. It is not universally true that a purchaser may content himself with an inspection of the records.. There are many facts outside the record, about which he must inquire or suffer the consequences. Whatever puts a party upon inquiry amounts to notice, provided the inquiry becomes a duty; as in the case of purchasers and creditors, where the inquiry, if pursued, would lead to knowledge of the requisite facts.
    4. A mortgage, on its face, showed that it was taken to secure purchase-money of the land therein described. It was not recorded until sixty-two days had elapsed from its execution and delivery. It appeared further, that it was not acknowledged until two days before the date of recording. There were other facts relating to the acknowledgment, from which it would be naturally inferred that the acknowledgment was on the same date as the execution and delivery. Held, that these circumstances, all of which appeared on the face of the papers, were sufficient to rebut the inference, which would otherwise have arisen from their dates, and were quite sufficient to put the purchaser at a sheriff’s sale upon inquiry and visit him with notice. Held, further, that there was no error in admitting parol evidence to prove the actual date of delivery.
    March 27th 1879.
    Before Sharswood, C. J., Mercur, Gordon, JPaxson, Woodward, Trunkey and Sterrett, JJ.
    Error to the Court' of Common Pleas of Chester county: Of January Term 1879, No. 85.
    Scire facias sur mortgage issued May 22d 1877, by Robert Neeley against The McLean & Benner Machine Company, mortgagors, and Thomas E. Parke, terre-tenant, the latter being the purchaser at sheriff’s sale of the land covered by the mortgage, under a judgment subsequent to it. The terre-tenant alone defended.
    The question was whether the mortgage was divested by the sheriff’s sale. The records in the offices of the recorder of deeds and the prothonotary showed as follows:
    Neeley, on the 11th of May 1875, was the owner of a lot (that covered by the mortgage) in Downingtown, Chester county, which on that day had been conveyed to him by the Downingtown Building and Improvement Company. He afterwards, for the consideration of $8500, conveyed the same lot to The McLean & Benner Machine Company. The deed was dated January 1st 1876, and in the conclusion it stated that it was executed “the day and year above written.” Following the signature is: “ Received the day of the date of the above written indenture, the sum of three thousand five hundred dollars, being the consideration within named.
    Robert Neeley.”
    The acknowledgment followed the receipt, and was taken .January 11th 1876. The justice who took the acknowledgment was one of the witnesses to the deed: it was recorded February 21st 187 6. The McLean Machine Company made the mortgage in suit to Robert Neeley. It is dated January 1st 1876, and is between The McLean Co. and Robert Neeley. It recites that the mortgagors by an obligation bearing even date with the mortgage were bound to Neeley in $7000, conditioned to pay $8500 on the 1st of January 1877, with interest semi-annually (the said sum being for the purchase-money of the hereinafter mentioned premises). The premises mentioned are the same as those conveyed by the deed to The McLean Company, but are recited as being the premises conveyed by the Downingtown Improvement Company to Neeley with the date of their deed, May 11th 1875.
    The conclusion was:
    “ In witness whereof, the said Machine company has caused this mortgage to be executed in its behalf by its president, and its common or corporate seal to be hereto affixed the day and year first above written.
    John McLean, President.” [l. s.]
    It was acknowledged by John McLean, President, before Alder- ' man William P. Hibberd (who was a witness to it), February 29th 1876. The mortgage was recorded March 2d 1876. On the 8th of May 1876, and subsequently, a large number of mechanics’ liens were entered against the McLean company, on the premises. The claims on which the liens were entered were filed at the time of their entry. They showed that work or materials were furnished from November 18th 1875, through December, January and February following, and afterwards. One of these claims was by James Copeland. His first item was December 15th 1875. This lien 'was assigned to'Neeley. Another was by Robert Neeley himself. His first item was also December 15th 1875. This lien was entered September 25th 1876. On the 25th of October 1876, one Graham recovered a judgment against the McLean company. On a venditioni on this judgment to January Term 1877, the premises were sold by the sheriff to Thomas E. Parke, for $1250. The sheriff’s deed to him was acknowledged March 14th 1877. An auditor was appointed to make distribution of the proceeds of the sale. They were all distributed amongst the mechanics’ lien creditors, and proved insufficient to pay them in full. Robert Neeley received a dividend on his own claim, and Copeland’s, assigned to him.
    On the trial, the plaintiff gave in evidence the mortgage and its record, and rested. The terre-tenant then gave in evidence the above-mentioned matter of record, and by oral testimony the following evidence:
    The lot, when sold to Neeley by the Downingtown Improvement Company, had on it a building, erected by them for factory purposes. Shortly before November 19th 1875, there was a meeting of the citizens of Downingtown and vicinity with officers and members of the McLean company — then an incorporated company — to start that company in Downingtown. Neeley was president. Inquiries were made as to who would subscribe for that purpose. Neeley said he would give this building (the property covered by the mortgage). At a conference afterwards of a committee on the subject with a representative of the company, Neeley said he would give the building as his share, and subscribe to paper “real estate,” naming the building at $3500; others subscribed. The company immediately commenced work for the erection of an engine-house, in connection with the factory, which they also altered; they erected another building, and also a third, called “the foundry.” The work was continued until it was complete. Neeley furnished stone for the foundation of the engine-house, and also for the foundry, commencing December 15th; for this his lien was filed.
    There was evidence showing the persons who did work and furnished materials, and the times when the work was done and materials furnished.
    In rebuttal, the plaintiff, under objection and exception, gave evidence for the purpose of showing that the mortgage had been executed and delivered on a day different from its date.
    McLean, president of the Machine company, the only witness called, testified:
    The company purchased from Neeley what was called the factory property. From about December 1st 1875, until the deed was made, the president urged him to make it; he refused to deliver it until the mortgage was made. The deed was received by the president about the 14th or 15th of January, and held by him in escrow till the 17th, when it was placed amongst the company’s papers as a delivery. This was simultaneously with the execution of the first mortgage, that is on the 17th of January, the date of the acknowledgment of the first mortgage. Upon consultation, the directors agreed to make such mortgage, and Neeley was notified. The deed was dated January 1st, at Neely’s own desire, because, as witness supposed, he wanted the mortgage to draw interest from the 1st of January. He had subscribed for $3500 worth of stock. Neeley made the date of the deed without consulting the president.

      The tenant submitted a number of points, asserting in substance : that as it appeared by the records that the mortgage was not recorded within sixty days from its execution, and as there were liens on the land prior to its date, and to the recording, the purchaser at sheriff’s sale took the land divested of the lien of the mortgage, and that its lien attached only from the day it was entered of record; that the purchaser at sheriff’s sale was not required to look further than the record,' nor was he bound by any matters in pais as to the time of the execution of the mortgage; that the mortgagee, by accepting the mortgage and putting it on record, asserted that its contents were true, and is estopped as against the purchaser at sheriff’s sale from averring that its date was not the day of its execution; that although the jury might believe the time of delivery was about the 14th of January, yet, if they believed that Neeley directed that it should be dated the 1st of January, he is estopped from averring that it was executed on a different day; that as Neely claimed from the proceeds of the sheriff’s sale dividends on the two liens which preceded the entry of the mortgage, he is estopped from saying that these liens were not pi-ior to the mortgage, the proceeds of the sale being a substitute for the legal title; and that the plaintiff was not entitled to recover.
    All these points the court refused.
    In the general charge, the court, Futhey, P. J., inter alia, said:
    “ We charge you now that if you find that the deed and mortgage — the deed made to Mr..Neeley, and the.mortgage received by him for purchase-money — were delivered at the time spoken of by witness McLean, president of the Machine company, on the 17th of January, instead of the 1st day of January, when they bear date, your verdict will be for the plaintiff. I repeat: if these instruments were delivered on the 17th of January, as testified to by McLean, instead of the 1st of January, when they bear date, and when without this testimony it would be presumed they would be delivered, your verdict will be for the plaintiff, and I must say to you there is no contradiction of Mr. McLean, the only witness who speaks to the point, and that he is positive about it that the deed was delivered on that day. I see nothing in the case to create a doubt of the accuracy of his belief, or the justness of his statement.”
    The verdict was for plaintiff for $4112.50, and after judgment thereon, the defendant took this writ, assigning for error the admission of the testimony of McLean, the refusal of the points, and the portion of the charge above noted.

      William B. Waddell and P. F. Smith, for plaintiff in error.—
    A purchaser at a sheriff’s sale is not required to look any further than the record: Mode’s Appeal, 6 W. & S. 280; Coyne v.
      Souther, 11 P. F. Smith 457; Patterson v. Forry, 2 Barr 456; Randolph’s Appeal, 5 Id. 242; Mather v. McMichael, 1 Harris 301; Loomis’s Appeal, 10 Id. 312. The policy of the law is that judicial sales shall be made clear of all reasonable doubt. There would be few bidders at such sales if all sorts of inquiries as to matters in pais were to be made where a doubt is raised as to the accuracy of the record. A purchaser cannot be bound by anything which merely puts him on inquiry as to the facts.
    The indulgence given by the Act of 1820 to purchase-money mortgages, is a reason why the mortgagee should be more strictly held to a compliance with its requisitions. One must not put on the record what actually misleads.
    The deed in this case took effect from the date of its execution. Neeley had that filled in, “ January 1,” and it was so recorded. Had money been lent on judgment, March 1st, with no notice but the deed, no mortgage having then been recorded, would not that have preceded the mortgage ?
    A deed is presumed to be delivered the day it bears date: Hall v. Benner, 1 P. & W. 407. The acknowledgment on a subsequent date does not affect the presumption: 2 Bl. Comm. 306; Judge Sharswood’s note 18; Shep. Touch. 72; 28 Law Lib. 145.
    Neeley was estopped as against the purchaser at sheriff’s sale by his assertion in the mortgage that it was executed on the 1st of January : Ayres v. Wattson, 7 P. F. Smith 360; Chapman v. Chapman, 9 Id. 214.

      Alfred P. Reid, for defendant in error.
    A record to which absolute verity is imported, applies only to judicial records which are potentially, if not actually, made up under the eye of the court. This is not true of the records in the recorder’s office: Fleming v. Parry, 12 Harris 52; Lancaster v. Smith, 17 P. F. Smith 427. The date of a deed or a recital in it, may be shown by parol evidence: Kelly v. Thompson, 7 Watts 401; Angier v. Schieffelin, 22 P. F. Smith 106; Brooke’s Appeal, 14 Id. 127; Geiss v. Odenheimer, 4 Yeates 278; McGeary’s Appeal, 22 P. F. Smith 365; Dungan v. American Life Insurance Co., 2 Id. 253. Whatever is sufficient to put a party upon inquiry, which would result in the information sought, is equivalent to notice: Angier v. Schieffelin, supra; Bancroft v. Cousen, 13 Allen (Mass.) 50; Knouff v. Thompson, 4 Harris 364; Bellas v. Lloyd, 2 Watts 401; Odgen et al. v. Porterfield, 10 Casey 191. A purchaser of real estate observing a lien of record, within a reasonable time before his deed, is bound to inquire into the incipiency of his vendor’s title. He cannot rely upon the date of the deed alone: Guthrie v. Watson, Leg. Int., Dec. 15th 1876; Cake’s Appeal, 11 Harris 187.
    When the purchaser examined this title at the time of sale, he found the deed dated, acknowledged and recorded at different dates. He foünd a mortgage between the same parties on the same premises stated to be for purchase-money, dated, acknowledged and recorded at different dates. He is presumed to know the law, that a purchase-money mortgage is a first lien, if recorded within sixty days after its execution, and that mechanics’ claims upon a prior equitable title, would come in after the purchase-money mortgage, if recorded in due time. He must presume a mortgagee for purchase-money would record his mortgage in time to secure his money.
    Would it not be his manifest duty, when the record is conclusive of nothing, but the time of recording, to inquire further as to when the legal title vested in the company ? Is there not notice to him in these things that requires him to seek further information oil the subject?' And the facts he is bound to seek are evidence upon the trial for the same reason.
    The date of a deed is only presumptive evidence of the time of delivery: Harris v. Norton, 16 Barbour 264; Elsey v. Metcalf, 1 Denio 323. In Brooke’s Appeal, 14 P. F. Smith 129, it was held that the registry could be corrected by parol proof as to the date of the acknowledgment of a mortgage. The doctrine of estoppel has no application in this case: Rhodes v. Childs, 14 P. F. Smith 25; Bigelow on Estoppel 480.
    May 5th 1879.
   Mr. Justice Sterrett

delivered the opinion of the court,

The contention of the plaintiff in error is that the mortgage, on which the scire facias in this case issued, was divested by the sheriff’s sale, at which be became purchaser of the mortgaged premises.

It is conceded that the mortgage, as expressed on its face, was given to secure purchase-money, and if recorded within sixty days from the execution thereof, was undoubtedly the'first lien on the land, and consequently not divested by the sale, unless its date raises a conclusive presumption as to the time of its execution. On the other hand, if not recorded in time, the mechanics’ liens, although subsequently entered, were first in order, because they related back to the commencement of th.e building and attached to the equitable interest which the mortgagor had acquired before the conveyance of the legal title. The deed and mortgage were dated January 1st 1876, and the latter was not recorded until the sixty-second day thereafter. In the absence of proof to the contrary, the presumption would be that they were executed and exchanged on the day they bear date. Assuming this to be so, the mortgage thus having lost its priority, was postponed to the mechanics’ liens, and consequently divested by the sheriff’s sale under the subsequent judgment. It was clearly shown, however, that the deed and mortgage were both executed after their date and within sixty days of the time the latter was recorded. This being established, it was held that the mortgage continued to be the first lien, and was not divested by the sheriff’s sale. The introduction of parol evidence to prove the actual date of execution, and the legal effect given to it by the court form the sole grounds of exception on the part of the plaintiff in error. He contends that his rights as a purchaser at the judicial sale are to be determined by the proper record of liens and by what appeared on the registry of the mortgage at the time of the sale and not by what was proved aliunde, as to the time it was in fact executed; in other words, that as to time, the date of the mortgage must be conclusively taken to be the date or time of its execution, and that parol evidence is not admissible to show that in point of fact it was subsequently executed and delivered. The exceptions relied on by the plaintiff in error resolve themselves substantially into two questions of law; the legal effect of what the records of the- court, and the registry of the mortgage exhibited at the time of the sheriff’s sale, and the question of estoppel. The mechanics’ claims filed May 8th 1876, and subsequently, might be resorted to by the purchaser for the purpose of ascertaining when the liens were filed, and how far back they related. This, in connection with information derived aliunde, would probably inform him that these liens attached to the equitable interest of the mortgagors before the legal title was acquired. So far as the record of these claims was concerned he might rely implicitly on what was there represented. Like all judicial records, made up, potentially, if not actually, under the eye of the court, the proper averments of record inported verity, and might be taken as his guide in bidding at the sheriff’s sale: Hopkins’s Appeal, 34 Leg. Int. 250. As a general rule, a purchaser is not bound to look beyond the judgment docket for liens that should there appear: Coyne v. Souther, 11 P. F. Smith 457. It is different, however, with the registry of deeds and mortgages. The chief object of recording them is to give actual as well as constructive notice to everybody of title and encumbrances thereon; and, apart from notice, the only effect given to recorded instruments by the statute is to make certified copies thereof evidence, and in case of mortgages, to provide that they shall not be liens until left for record, except mortgages for purchase-money, which continue to be liens from the date of their execution, if recorded within sixty days thereafter. In Cake’s Appeal, 11 Harris 186, the record of the mortgage did not exhibit it as a first lien. It was for purchase-money, but the conveyance was dated several months before its entry. Judgments had been obtained against the equitable title, and from the face of the record appeared to have closed in upon the legal estate, ahead of the mortgage ; and yet upon proof that the deed had been antedated, and the mortgage recorded within sixty days from the time it was actually executed and delivered, it was held that the lien of mortgage was not divested, but that it still bound the land in the hands of the purchaser. The question in that case arose on distribution of the proceeds of sale, but that is unimportant, for after refusing to permit the mortgagee to participate in the proceeds and turning him over to the land, it would come with bad grace to say that the purchaser might refuse payment and remit him to the proceeds. While it is true, as a general rule, according to Megaw v. Garrett, 11 Casey 322, and other cases, that a purchaser need not look beyond the record for liens and encumbrances, it is not universally so. There are several exceptions, and in some of them the safety of purchasers is not consulted. Generally the record furnishes no notice of mechanics’ liens until they have run for a considerable time. The existence of a purchase-money mortgage may appear at any time within sixty days after its execution, and it is not necessary even then to. disclose on its face the material fact that it is for purchase-money,. nor the time when it was executed, without which knowledge the purchaser can form no reliable judgment respecting the liens. Guthrie v. Watson is a case in which a person, after acquiring an equitable interest in the land, confessed a judgment, and months afterwards accepted a conveyance of the legal title. The record did pot show that the judgment was a lien on the land thus acquired, nor suggest anything pointing towards it. The land appeared to be subsequently acquired and unencumbered, and yet a purchaser was bound to take notice of the encumbrance and hold subject to it. So that it is not universally true that a purchaser may content himself with an inspection of the records. There are many facts outside the record, about which he must inquire or suffer the consequences. There was quite sufficient in this case to put the purchaser on notice. Whatever puts a party on inquiry amounts to notice, provided the inquiry becomes a duty, as in the case of purchasers and creditors, where the inquiry, if pursued, would lead to knowledge of the requisite facts: Milliken v. Graham, 22 P. F. Smith 490. The mortgage shows upon its face that it was taken to secure purchase-money of the land therein described, and that the mortgagee intended to preserve his lien, which could only be done by recording the mortgage within sixty days from the time it was executed and delivered. This, in connection with the fact that only sixty-two days had elapsed between the date and the entry, should have suggested inquiry, as to whether it was not antedated. It appeared further, that it was not acknowledged until the 29th January, only two days before it was recorded. While it is true that it might have been delivered before it was acknowledged, such a transaction in regard to a mortgage would be so exceptional and extraordinary as to excite inquiry. Again, the alderman before whom the acknowledgment was taken was a subscribing witness to the execution and delivery of the mortgage, from which it would naturally be inferred that the acknowledgment was simultaneous with the execution and delivery. The same may be said in regard to the deed. Its acknowledgment is of a later date than the deed itself, and the magistrate, before whom it was taken, is also a subscribing witness to the execution and delivery. These circumstances, all of which appeared on the face of the paper, were sufficient to repel the inference which would otherwise have arisen from their dates, and were quite sufficient to put the purchaser on inquiry, and thus visit him with notice. There was no error in admitting parol evidence to prove the actual date of delivery, nor in the controlling effect given to the fact which the testimony clearly established. And, in addition to this, there was quite enough on the face of the papers themselves to make it the duty of the purchaser to inquire. If he had done so, he would have been fully informed that the mortgage was the first lien, and would not be divested by the sheriff’s sale. There are no facts in the case out of which estoppel could arise.

Judgment affirmed.


author: Mr. Justice Mercur

text:
    Hughes’s Appeal.
    A court below cannot engraft on a decree of the Supreme Court an order of restitution not contained in said decree. If restitution be ordered it is a constituent part of the judgment, but if not found therein it cannot be made a part thereof by the lower court, whose duty is limited to enforcing the decree without any enlargement or change in its legal effect.
    March 27th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Woodward, Trunkey and Sterrett, JJ.
    Appeal from the Court of Common Pleas of Montgomery county: Of January Term 1879, No. 58.
    Appeal of John Hughes and others from the decree of the court directing the restitution of certain money paid to appellants as distributees of a fund. ,R appeared that on September 27th 1871, the Mutual Eire Insurance Co. of Montgomery County, which had been summoned as garnishee of Daniel S. Nippes, paid $1385 into court for distribution. Before an auditor this fund was claimed by Margaret Nippes, wife of defendant, and by the appellants, the attaching creditors. It was awarded to the latter in the following proportions: John J. Hughes, $247.50; S. E .Hartranft, $247.30, and A. J. Anderson, $681.68. The report of the auditor was confirmed, and a decree for a distribution in accordance therewith was made August 19th 1872, and no appeal having been taken therefrom, the court, on September 27th 1872, directed payment of the fund in conformity with the decree. On September 3d 1873, Daniel S. Nippes, and Margaret, his wife, appealed to the Supreme Court, and on May 23d 1874 the proceedings were returned with a certified copy of the opinion of said court and remittitur, stating: “Decree reversed at the cost of the appellees, and record remitted that the fund in court may be paid or distributed according to the principles of this opinion.”
    The case was again referred to an auditor to make distribution. Exceptions were filed to his report which the court dismissed, when Nippes and wife again appealed. On April 6th 1878, the pro- ■ ceedings were returned from the Supreme Court with the following opinion of said court:
    Per, Curiam. — “ When this case was here before it was carefully considered upon all the questions arising upon the record, as will be seen by the opinion (25 P. F. Smith 477). The decree was reversed at the cost of the appellees, and record remitted that the fund in court might be paid or distributed according to the principles of the opipion. There was nothing in the fact of the record being remitted to authorize the inference that this court contemplated another reference to an auditor, the taking of new evidence and a rehearing of the whole case. On the contrary, the plain mandate of this court was, that the fund should be paid or distributed according to the principles of the opinion, and the principles of the opinion plainly required that it should, after deducting the costs of the audit, be paid to the appellant, Mrs. Margaret Nippes. Nothing on the record, as now presented, changes the conclusion at which we then arrived.
    “Decree reversed at the cost of the appellees. And now it is ordered that the fund in court, less the costs in the court below, be paid to the appellant, Margaret Nippes.”
    On April 22d 1878, a rule was granted on Hughes, Hartranft and Anderson to show cause-why the court should not make an order on them to repay the amounts respectively paid to them. On August 10th 1878, this rule was made absolute,' and the court directed that repayment should be made within thirty days. From this decree they took this appeal.

      James Boyd, II. K. Weand and Qharles T. Miller, for appellants.
    The judgment of the Supreme Court was confined in its operation by its express words to the money in court. It was not intended that restitution of that which had been paid out should be made. Restitution is awarded only when payment has been compelled by execution on an erroneous judgment, not when paid without execution: Allegheny Bank’s Appeal, 12 Wright 334. If an order of restitution had been contemplated, it would have been included in the judgment: Duncan v. Kirkpatrick, 13 S. & R. 294. This was a voluntary payment and there being no fraud, it cannot be recovered back: Natcher v. Natcher, 11 Wright 496; Espy v. Allison, 9 Watts 462: Boas v. Updegrove, 5 Barr 516; Baldy v. Brady, 3 Harris 111; Real Estate Savings Institute v. Linder, 24 P. F. Smith 371

      J. JD. Bennett and Gr. JR. Fox, for appellants.
    The decree of the Supreme Court in 1874 taking cognisance of and deciding the appeal is conclusive. There was never any motion in the Supreme Court to quash the certiorari, dismiss the appeal, or to raise the question now made.
    May 7th 1879.
   Mr. Justice Mercur

delivered the opinion of the court,

The contention in regard to this fund is now here for the third time. It was a contest between the appellee in her own right, and the appellants as attaching creditors of her husband’s rights. The fund had been paid into court by an insurance company. The court below decreed the money to the attaching creditors. In Nippes’s Appeal, 25 P. F. Smith 472, the decree was reversed “and record remitted that the fund in court may be paid or distributed according to the principles of this opinion.” The court below thought the effect of the decree was to re-open the whole case, and therefore again referred it to an auditor, by whom additional evidence was taken. He again reported the former distribution, and it was confirmed by the court. Mrs. Nippes appealed therefrom to this court (Leg. Int. of 14th June 1878), when the following decree was entered: “ Decree reversed at the costs of the appellees. And now it is ordered that the fund in court, less the costs in the court below, be paid to the appellant, Margaret Nippes.” Since this decree, the court below, acting according to its understanding of the directions therein given, has ordered the appellants to pay into court certain moneys which it had ordered to be paid, and which were actually paid, to the appellants, nearly a year before Mrs. Nippes’s first appeal was taken. That order to pay money to the appellants was made thirty-nine days after the final confirmation of an auditor’s report decreeing it to them. The last order of the court ordering the money to be paid back, presents the error assigned.

The correctness of this order depends on the effect to be given to the last decree of this court. Its language in ordering payment to Mrs. Nippes is limited to “the fund in court.” It does not extend to or include any money or fund not “in court.” The decree did not contain any order of restitution. Whether the equities of the case would have required that it should have been done, cannot now be considered. It was not done. That decree we cannot now review nor change. We can only consider its commands and give effect to them. As restitution was not of course there is no legal presumption that it was not designedly withheld. The money which the appellants had received was not collected by them on execution, and therefore stands on a different footing: Allegheny Bank’s Appeal, 12 Wright 334; Cassel v. Duncan, 2 S. & R. 57; Kirk v. Eaton, 10 Id. 103.

When an order of restitution is made, it is not merely collateral to the judgment of reversal, but is a part of the judgment itself: Duncan v. Kirkpatrick, 13 S. & R. 294. If then restitution be ordered, it is a constituent part of the judgment of reversal. If not found therein, it cannot be a part of the. judgment. The decree of this court covered the whole case. The power of the court below was limited to enforcing the decree thus made. That being the whole judgment of this court,' the Common Pleas could not enlarge it nor change its legal effect. The 11th sect, of the Act of 16th June 1836, Purd. Dig. 1351, pi. 29, authorizes the Supreme Court whenever it shall have rendered a judgment, or made a final decree or decision in any cause, action or matter brought into the same by writ of error, certiorari or appeal, to remit the record with its judgment or decree to the appropriate court, which judgment, decree or decision said court shall duly carry into execution or effect; or the Supreme Court may order execution thereof to be done by process issuing out of the same, and thereupon remit the record. The learned judge, therefore, erred in ingrafting on a decree of this court an order of restitution.

Order reversed.


author: Mr. Justice Woodward

text:
    Buffington, to use of Mitchell versus Bernard and Hoopes.
    A., as principal, and B., as surety, executed and delivered a bond to O. for $2000. Judgment was entered thereon in 1862. In 1866 the amount of the judgment was paid to C., which payment was made by A. appropriating moneys in his hands belonging to his sisters-in-law. An assignment to them of the sum thus appropriated was endorsed on the bond, but the judgment was never marked to their use, nor was the assignment filed. It did not appear affirmatively that the sisters ever had possession of the bond, or that they knew it had been assigned to them. For some unexplained reason, in 1866, the judgment was satisfied by C. The record thus remained until 1877, when it was revived by an amicable scire facias signed only by A., who. having become embarrassed, made an assignment for the benefit of creditors the following day. In 1878, in a scire facias on the judgment, the sisters sought to recover from B., the surety. There was evidence that B. was misled by the record. Held, that as they had made no inquiry as to the disposition of their money for eleven- years, asserted no claim to the judgment and gave no notice to the surety, who was excused from vigilance by the action of C. and A., they could not call on B. to make good the loss which, in legal contemplation, was the consequence of their own default.
    March 27th 1879.
    Before Sharswood, C. J., Mercur, Gordon, P anson, Woodward, Trunkey and Sterrett, JJ.
    Error to the Court of Common Pleas of Chester county: Of January Term 1879, No. 193.
    This was a scire facias sur judgment issued April 13th 1878, at the suit of Richard Buffington to the use of Mary Mitchell and Sophia Mitchell, against Levis Bernard and Cyrus Hoopes. The defence was made by Hoopes alone. On the 1st day of April 1862, Levis Bernard and Cyrus Hoopes executed a joint bond with warrant of attorney to confess judgment to Richard Buffington for $2000. At the trial before Euthey, P. J., it appeared by the evidence that Hoopes was surety in the bond for Bernard. Judgment was entered on the bond on April 14th 1862. In the spring of 1866, Buffington demanded payment of the bond. Bernard at that time had just settled the estate of Andrew Mitchell, his brother-in-law, and had in his hands as administrator, &c., of said estate, $1600 belonging to Mary and Sophia Mitchell, the equitable plaintiffs, who were his sisters-in-law, and were living with him. He paid Buffington $400, and the arrears of interest, with his own funds, thus reducing the bond to $1600, and purchased for them, with the'$1600 in his hands, the bond from Buffington, and obtained from the latter an assignment to them, endorsed upon the bond. The assignment was not dated, but the evidence shows it to have been executed on, or about, the 28th of March 1866, which, as the receipt on the bond shows, was the day of the payment of the $400. The assignment was not marked to the use of the equitable plaintiffs on the record. On May 1st 1866, thirty-three days after the assignment, Buffington, without the knowledge of any of the parties interested, entered satisfaction upon the record of the judgment. On April 1st 1867, and annually thereafter until 1877, Bernard paid the interest on the bond to the equitable plaintiffs, in whose possession the bond remained. The lien of ‘the judgment expired April 14th 1867, and was never thereafter revived until January 11th 1877, when Bernard, by an amicable scire facias, signed only by himself, and without the knowledge of the equitable plaintiffs, revived it against himself, and the next day, January 12th 1877, made an assignment for the benefit of. his creditors. Hoopes alleged that some time in the year 1867, in searching for liens against his own property, he saw this entry of satisfaction upon the record.
    He further testified that he made inquiry of Bernard touching this entry, and that Bernard informed him that the bond was paid and satisfied. Bernard, on the contrary, testified that he never told Hoopes that the bond was satisfied, because he did not know that fact himself, until the day prior to his assignment for the benefit of creditors, in 1877; and that while he told Hoopes that Buffington was paid, he never informed him that the bond was paid.' On the 1st of April 1870, a judgment of $1150 was entered as a lien against Bernard’s property by Mary Pennock et al. On May 6th 1872, the Bank of Brandywine entered a judgment against Bernard for $3000. Other judgments were entered against Bernard between 1867 and 1877, which were satisfied before his assignment.

      In June 1875, the Bank of Brandywine called upon Bernard for payment of a portion of the $3000 judgment bond. The latter applied to Hoopes for a loan. Hoopes raised $1800 by a mortgage on his own property, paid off $1000 of the $3000 Bank of Brandy-wine judgment, took an assignment on the record of the judgment for that amount, and loaned the remaining $800 to Bernard, taking as security therefor, a judgment for $800 against Bernard’s property, which became the next lien to the Bank of Brandywine judgment. A short time previous to Bernard’s assignment in 1877, he confessed judgment to other parties. In the distribution of his assigned estate, the Pennock judgment was paid in full, as also the Bank of Brandywine judgment of $3000, with interest, and the sum of $93.66 was paid upon the $800 judgment. Hoopes’s loss on this transaction of 1875, was $706.84. A dividend on the $2000 judgment, of $168.58, was awarded to the equitable plaintiffs out of the personal estate of Bernard.
    Hoopes claimed to be relieved in this action, on the ground that he was a mere surety, and was misled by the entry of satisfaction into the belief that the debt was paid, and that he had been injured,
    First, by losing the benefit of the lien, which he might have had on Bernard’s property, if he had not rested under the belief that the debt.was paid; and
    Second, by incurring an additional liability of $1800 in 1875, for the benefit of Bernard, which he swears he would not have incurred, if he had known the Buffington bond was still outstanding, and upon which he lost $706.34 as above stated.
    The court, after setting forth, in substance, the foregoing facts, inter alia, charged:
    “ And upon them we charge you that the plaintiffs, having failed to procure the entry of the assignment on the record, or the marking of the judgment to their use, and thus allowed it to remain in the name of Mr. Buffington alone, and subject to his control, are responsible for his act in entering satisfaction upon it; and if Mr. Hoopes has satisfied you that he was thus misled, induced to believe that the debt was paid, he is entitled to relief against the plaintiffs’ claim, to the extent that he has shown you that he was injured thereby, or rather would be injured if the plaintiffs were allowed to recover their claim. * * * If you find he was misled, and that he could and would have secured the entire debt on Mr. Bernard’s property if he had not been so misled, then, if the plaintiffs were permitted to recover, the defendant’s injury ivould be equal to the entire debt, and in such case the plaintiffs should not, and must not, recover anything. The relief to which the defendant would be entitled under such circumstances would go to the entire extent of the plaintiffs’ claim. If you so find, you need go no further, but should render a verdict for the defendant.”

      The verdict was for defendant, when plaintiffs took this writ, and assigned for error the foregoing portion of the charge.

      W. P. W. T. Barber, for plaintiffs in error.
    The entry of satisfaction did not discharge the surety: Roberts v. Halstead, 9 Barr 35; Peterson et al. v. Lothrop, 10 Casey 226; De Witt’s Appeal, 26 P. F. Smith 287. An entry of satisfaction made by a party who has disposed of all his interest in an obligation, or a security, by an assignment for a valuable consideration, is void as against the assignee; and therefore no one who was bound by the obligation previous to such entry, can take advantage of the void act of the assignor to the injury of the assignee: Lancaster v. Smith, 17 P. F. Smith 427; Fleming v. Parry, 12 Harris 51; West’s Appeal, 7 Norris 341.
    Under all the circumstances of the case, it was clearly the duty of Cyrus Hoopes, upon seeing the entry of satisfaction, as he avers, in 1867, upon the record, to have informed himself by inquiring of the legal plaintiff whether said judgment had been actually paid and satisfied: Brown v. Simpson, 2 Watts 243. In the absence of such inquiry, he is not entitled to equitable relief here.

      O.liarles H. Pennypacher, for defendant in error.
    The assignment of the plaintiffs in error was not upon the record-, and the satisfaction entered upon the record was conclusive evidence of the extinguishment of the debt. Hoopes acted upon this notice and had a right to rely upon it. The negligence of the plaintiffs misled him, and he is relieved from liability upon this obligation. It was their duty to have had their assignment noted on the record: Bury v. Hartman, 4 S. & R. 175; Brindle v. McIlvaine, 9 Id. 74; Horton v. Miller, 8 Wright 256; Fisher v. Knox, 1 Harris 625; Campbell’s Appeal, 5 Casey 401; Fraley’s Appeal, 26 P. F. Smith 42; Pratt’s Appeal, 27 Id. 378; Coon & Neil v. Reed, 29 Id. 242; Gaullagher v. Caldwell, 10 Harris 302.
    May 5th 1879.
   Mr. Justice Woodward

delivered the opinion of the court,

It was most unfortunate for the two ladies who are the plaintiffs in interest here, that through a long term of years they trusted implicitly to the resources, business ability and good faith of their brother-in-law, in whose family they resided. On the 1st of April 1862, Levis Bernard, as principal, and Cyrus Hoopes, as surety, executed and delivered to Richard Buffington a bond for $2000, with a warrant of attorney attached to it. Judgment was entered on this bond on the 14th of April 1862. In the spring of 1866, the amount of the judgment was paid to Buffington. Bernard appropriated towards the payment $1600, belonging to Mary and Sophia Mitchell; and on or about the 28 th of March 1866, an assignment of that sum to them was endorsed on the bond. The judgment, however, was never marked to their use, and the assignment was never filed. For some unexplained reason,»the judgment was satisfied by Bufiington on the 1st of May ,1866. The record remained in this situation until the 11th of January 1877, when it was revived by an amicable scire facias^ signed only by Bernard, who, having become hopelessly embarrassed, made an assignment for the benefit of his creditors the next day.

At the trial of the issue, Bufiington said he had no recollection of the assignment, and could not recall the circumstances under which the judgment had been satisfied. It did not appear affirmatively that the Misses Mitchell ever had possession of the bond, or that they knew it had been assigned to them. It is probable that Bernard procured the satisfaction of the judgment by some representation that was plausible enough to give assurance to Bufiington, in order to subserve some business exigency of the hour. And it is probable also that he used the moneys of his sisters-in-law in full confidence in his ability to account for it when an account should be required. That is of course. Trust money is always applied in the first instance to the personal purposes of the trustee, with the most upi’ight intention at the right time to make it right. He paid the interest on the $1600 from year to year until the 1st of April 1876. And it was not until his insolvency was certain that he made the abortive attempt to secure the misdirected and wasted fund to his cestuis que trust by a revival of the original judgment against himself.

Hoopes was the surety of Bernard. He testified that he ascertained in 1867, that Buffington had satisfied the judgment. This was in the course of a search for liens against himself required in order to obtain a loan of $12,500 from his brother. He said he did not know until 1877, that any part of the judgment had been assigned. And Bernard said in his testimony: “I have no particular recollection of any conversation with Cyrus about the assignment. * * * I do not know that he knew that I had money of the estate (of Andrew Mitchell) due Mary and Sophia Mitchell. I cannot say that I told Cyrus how I paid this bond. I told him I had paid Richard Buffington.” In the meantime, in June 1875, Hoopes raised $1800 for Bernard. Of this sum $1000 was paid on account of an existing judgment against Bernard, receiving an assignment of that amount. For the remaining $800, Bernard gave him a fresh judgment, on which he suffered a loss of $706.34 in the sale and distribution of Bernard’s estate. Upon the trial, however, he asserted the right to be discharged from the whole amount of the Buffington judgment. He alleged that if it had remained open, or if it had been marked to the use of the plaintiffs in interest, or if he had in any way received notice of the assignment, he could have protected himself by having the lien obtained in 1862, preserved against the property of Bernard, by requiring the plaintiffs to collect it, or by paying it and reviving it himself. The jury found that he was misled, and that, with notice of the true state of the record, he could and would have been able to make himself secure. A general verdict in his favor was returned.

Whilst intimate personal relations existed between the assignees and Bernard, yet so far as this judgment was concerned, their relations in a legal aspect were adverse. In disposing of the question brought up for review, therefore, the rights of the parties must be adjusted by settled legal rules. It was decided in Bury v. Hartman, 4 S. & R. 176, and in Brindle v. McIlvaine, 9 Id. 74, that where a bond has been assigned under the Act of the 28th of May 1715, a payment made by the obligor to the obligee before notice was good. In Bury v. Hartman, Gibson,' J., dissented, but as Chief Justice, he delivered the opinion of the court in Fisher v. Knox, 1 Harris 622, in which.it was ruled that “if the assignee of a moiety of a judgment does not have his interest therein marked on the docket, the bond being subsequently in the possession of the obligee, who assigns all his interest in the judgment bond, without notice being had by the second assignee of the former assignment, and the assignment to the second assignee is marked on the record, the first assignee will be postponed in favor of the second.” These authorities were followed in Campbell’s Appeal, 5 Casey 501, and in Fraley’s Appeal, 26 P. F. Smith 42. An analogous principle was enforced in Brown v. Simpson, 2 Watts 233. Exceptions to the rule have been found in cases where the second assignee has received the judgment as a collateral security, and not for a consideration paid at the time of transfer: Pratt’s Appeal, 27 P. F. Smith 378; Coon v. Reed, 29 Id. 240. In Gaullagher v. Caldwell, 10 Harris 300, a judgment was assigned, but no note of it was made on the docket, and no notice was given to the defendant until more than twelve years after the assignment. A release obtained in the meantime by the defendant from the plaintiff for a valuable consideration, was held valid against the assignee. If the principal obligor in a bond obtain a release by fraud, and the obligee suffer several years to elapse, without bringing suit or giving notice to the surety, during which period the principal becomes insolvent, the surety is discharged in equity: Gordon v. McCarty, 3 Whart. 407. The principle of the last case is decisive of the present question. These assignees made no inquiry as to the disposition of their money for eleven years. They asserted no claim to the judgment. They gave no notice to the surety, who was excused from vigilance by the action of Buffington and Bernard. They cannot call on him to make good the loss which in legal contemplation wa the consequence of their own default.

Judgment affirmed.


text:
    Hopkins’s and Johnson’s Appeal.
    1. An insolvent corporation being indebted to its officers and directors, they executed the notes of the corporation in their own favor, and having obtained judgment by default, issued execution thereon. In the distribution ,of the proceeds of the sheriff’s sale of the personal property of the corporation, Held, that this conduct of the officers was a fraud in law, which gave them no preference over general creditors in the distribution.
    2. Under the provisions of the Act of April 7th 1870, sect. 1, where there is a sale of the personal property of an insolvent corporation, no preference is to be given to execution-creditors, but the distribution must be made as in cases of insolvency.
    3. In making distribution of the proceeds of a sheriff’s sale of the personal property of a corporation, it was agreed that the fund should be distributed, by a master, as if a bill in equity had been filed by one of the claimants against the rest. The report of the master was filed, and it was again referred to him for correction. Other creditors then asked to be made parties to the supposed bill, and the court allowed the amendment. Held, that this was not error.
    March 27th 1879.
    Before Sharswood,- C. J., Mercur, Gordon. Paxson, Woodward, Trunkey and Sterrett, JJ.
    Appeal from the Court of Common Pleas of Chester county: Of January Term 1879, No. 234.
    Appeal of Ephraim Hopkins, M. D., and William C. Johnson, trustee, from the decree of the court distributing the proceeds of a sale of personal property of the Chester Valley Wheel and Axle Company.
    The case was referred by agreement to J. Smith Futhey, Esq., as if to an examiner and master under a bill in equity, who found the facts as follows:
    The Chester Valley Wheel and Axle Company, whose works were located at Downingtowri, was incorporated under the Act of Assembly of July 18th 1863, in the month of October 1873. The stockholders were Edward Downing, Charles Downing, Dr. Ephraim Hopkins, J. Clemson Sharpless and Mrs. Martha Johnson, wife of W. C. Johnson. William C. Johnson was chosen president of the company, and so remained. Charles Downing was the first secretary and treasurer. He resigned January 1st 1874, when Dr. E. Hopkins was chosen secretary and treasurer, and so continued. The original directors were Edward Downing, William C. Johnson and J. T. Carpenter. The latter resigned January 31st 1874, and Charles Downing was elected a director in his stead. On April 15th 1875, William C. Johnson, Charles Downing, Dr. Hopkins and J. C Sharpless were elected directors. On May 29th 1875, Charles Downing resigned.
    The authorized capital of the company was $20,000, divided into shares of $25 each, of which a patent right, represented by William C. Johnson, valued at $10,000, formed part. The other stock was held as follows: Charles Downing, $500, Edward Downing, $1500, J. Clemson Sharpless, $3000, and Dr. E. Hopkins, $4850, leaving six shares untaken.
    In the summer of 1874, the company, being in need of money, Dr. Hopkins borrowed from Charles Downing $4772.38, part or all of which he put into 'the company in the shape of stock and loans. The money was paid to Dr. Hopkins in instalments, and he gave his notes to Downing for the amounts as he received them. He also gave him as collateral security a mortgage for the same amount, $4772.38, which had been given to him (Hopkins) by his mother, secured on real estate belonging to her in Harford county, Maryland. On the 28th of December 1874, Charles Downing exchanged this loan, which he had made to Dr. Hopkins, for a judgment bond of the company, which was executed by William C. Johnson as president,' and sealed with the seal of the company, and delivered in’ the presence of Dr. Hopkins, secretary, and F. B. Johnson. The notes held by Charles Downing against Dr. Hopkins were given up to him, and the mortgage referred to, which Downing held as collateral security, was assigned by him to the company, and became its property. This transaction appears to have been without any action on the part of the directors of the corporation.
    This judgment bond was payable on demand, with interest, but required five months’ notice in writing to be given to the president and secretary before it could be sued out. Judgment was entered on this bond in the Common Pleas of Chester county, January 11th 1875. On March 16th 1875, Downing gave notice according to the condition of the bond, that he required the moneys secured by it to be paid.
    The company was indebted to Dr. Hopkins, William C. Johnson, trustee, J. C. Sharpless and others.
    After this notice was given, and induced by it, a meeting of the directors of the company was held on May 13th Í875, at which the following resolution was adopted:
    “ The president was instructed to make an estimate of the indebtedness of the company, and to adjust all claims, and secure the same by notes of the corporation when demanded. On motion, the salaries of the president and secretary were fixed at eighty dollars per month, dating from February 1st 1874.” Soon after this, the precise date not being given, notes were given sealed with the corporate seal, and signed by William C. Johnson, president, on behalf of the company, and attested by Dr. Hopkins, secretary and treasurer,'as-follows: To Dr. Hopkins, dated October 27th 1875, for $4000 ; to J. C. Sharpless, dated March 23d 1875, for $500; and to William C. Johnson, trustee, dated December 22d 1875, for $3395, these being the amounts agreed upon as due to these persons. These notes, it is explained by the evidence, were intended to be rdated back as of the times when the money was due, and from which interest should be counted; but by mistake the year was written “1875” instead of “1874,” which was intended to be the year written on the notes. There were no persons present, so far as appears, at the adjustment of the amounts for which these notes were given, but the persons to whom they were given.
    Suits were brought on all these notes June 7th 1875, and on the same day the writs of summons were served on Dr. Ephraim Hopkins, as secretary and treasurer. Judgments by default were taken on June 18th 1875, and executions issued on the same day, and levied on the personal property of the company, which was subsequently advertised by the sheriff for sale.
    On the 5th of July proceedings on these executions were suspended, in pursuance of an agreement with Chas. Downing.
    On Nov. 22d 1875, alias executions were issued on these three judgments, and the personal property of the company again levied on, and advertised for sale. Execution was also issued by Charles Downing on his judgment; and on these executions, and another execution of S. O. Flagg & Co., of $146.05, the personal property of the company was sold, and the proceeds are now in the hands of the sheriff. On the affidavit of Charles Downing and Edward Downing, a rule was granted by the court to show cause why the judgments of Hopkins, Johnson (trustee), and Sharpless, on which executions had been issued, should not be opened, and the defendant let into a defence; and on the hearing of this rule, the master was appointed to hear the case, and report distribution of the moneys in the hands of the sheriff. After the hearing had proceeded to the completion of the taking of the evidence, a question arose as to the powers of the master. The decree of the court appointing the master had never been certified to him, and was lost or mislaid. Whether it had ever been filed does not appear. The master adjourned the further hearing of the case to allow a motion to be made to the court for a decree. Nothing, however, has been certified to the master, and he will proceed to determine the) matter, and make distribution according to his understanding o\ his powers and duties, as gathered from the conduct of the case before him.
    During the progress of the case, a paper, here attached in the handwriting of one of the counsel, was handed to the master. It was not agreed that this was a copy of the decree of the court, but, on the contrary, it was alleged that it was not. It embodies, however, substantially what the master conceives to be his duty; to consider the proceeding as in equity, on bill and answer, founded upon the statement of plaintiff’s claims, and affidavits of the Messrs. Downing.
    There was much controversy as to the amount due Dr. Hopkins. On a careful examination, the master is satisfied that $3000 represents the amount due him from the company, as nearly as can now be reasonably arrived at.

      The note to Dr. Hopkins on which suit was brought, was given for $4000, the additional $1000 being compensation as treasurer and secretary. This is objected to, and after examination the master is satisfied it should not be allowed. The affairs of the company, except the furnishing of money, were almost exclusively carried on by the president of the company, who was, so far as its management was concerned, the company, and the services rendered by Dr. Hopkins as secretary and treasurer were comparatively small. It appears that at a meeting of the directors, held May 13th 1875, the salaries of the president and secretary were fixed at $80 per month, dating from February 1st 1874. This, however, was at the end of the year for which the services were charged, and in view of the condition of the company at that time, should not be allowed. The master finds, however, that no fraud was intended in giving the note for $4000, and he therefore finds the, amount due to Dr. Hopkins, as already stated, to be $3000, and interest from the corrected date of the note.
    The master finds that the moneys paid into the company by William C. Johnson, $3395, were moneys which in fact he held as trustee under a deed of trust from Benjamin Johnson and wife, for their use, which trust was originally created in 1845, by Jane Johnson, grandmother of William C. Johnson. These moneys were first entered on the books of the company as stock, and this, was afterwards changed to a loan in the name of William O. Johnson, individually, and afterwards of William C. Johnson, trustee.
    The master finds that there is no sum which can be set off against this claim, and that there ist owing thereon the sum of $3395, with interest from the corrected date of the note given therefor.
    The claim of J. C. Sharpless is correctly represented by the note given him, and which took the place of a former note given for moneys loaned to the company.
    The company, in addition to the foregoing, is also considerably indebted to other persons who had dealings with it, as will appear by the schedule hereafter given.
    On the foregoing statement of facts, the question arises as to the • proper disposition of the money in the hands of the sheriff. It is claimed, on behalf of the first execution-creditors, Dr. E. Hopkins, William C. Johnson, trustee, and J. C. Sharpless, that they are entitled to the money in court, so far as it will extend to pay their respective executions. On the behalf of Charles Downing, a subsequent execution-creditor, it is contended that the first executions should be set aside and the moneys awarded to him. It will be observed that Hopkins, Johnson and Downing were all directors of the company during nearly the whole of the period of its active existepce, and that they were all stockholders. In view of the facts that Hopkins and Johnson were officers, the one president, and the other secretary and treasurer, when the suits were brought on the notes held by them respectively; that service of the writs óf summons was made on Hopkins, as secretary and treasurer, and judgment taken by default, and that they were stockholders, the master is of the opinion that they are not entitled to a preference by reason of their executions. Neither is Charles Downing entitled to a preference by reason of his execution. His judgment was entered on a judgment bond given by William C. Johnson, president of the company, without any authority from the board of directors, and not for any debt due or owing to him by the company, but it was a sale by him to the company, of the mortgage he had received from Hopkins, and the bond in question given therefor. The mortgage was, however, afterwards sold by the president of the company for $3400, and the proceeds went to the credit of the company; and this would create the company a debtor of Charles Downing, independently of the bond. Mr. Downing was also a director during ■the period when the active operations of the company were carried on, and its debts contracted, and also a stockholder, and stands in the same position, so far as any preference is concerned, as Johnson and Hopkins.
    There was no fraud by these parties, and if the executions are to be regarded as giving to those issuing them all the rights of execution-creditors, then, Hopkins and Johnson having issued theirs first in order of time, would be entitled to a preference. The whole proceeding, however, shows a scramble between Hopkins and Johnson, on the one hand, and Downing on the other — all stockholders, and virtually the owners of the company —to obtain a preference over each other in the collection or payment of the amounts due them.
    The master is of opinion, under all the circumstances of the case, that the ends of justice will be best subserved, and the manifest duty of the parties to each other, and to the creditors of the company, performed by regarding the process used as a means of disposing of the property, for the benefit of all creditors generally (except as is hereafter mentioned), and the fund thus raised as in, the hands of a receiver for distribution among them.
    The master, accordingly, after deducting the expenses of the proceeding, and the executions referred to of Sharpless, and Flagg & Co., which,'in'the opinion of the master, should be paid in full, and also the amount of rent due Edward Downing, the owner of the real estate on which the operations of the company were carried on, makes distribution of the remainder of the funds among all the creditors of the company, whose claims have been presented, ■without preference. Interest is counted to the date of the sheriff’s sale; to equalize the claims.
    The exceptions filed to this report were'dismissed, and the report ■confirmed on March 14th 1878.
    On June 24th 1878, the following agreement was filed:

      “Whereas, an agreement was made in the above cases under which the matter was proceeded with before J. Smith Euthey, Esq., as master and examiner, which has been lost. Now, it is agreed that an issue be directed to determine how much, if anything, is due said plaintiffs upon their respective judgments aforesaid, and whether the same was obtained in fraud of the creditors of said defendant; and that in lieu of a trial by jury of said issues the same be referred to J. Smith Euthey, Esq., as master and examiner, with like effect as if tried by a jury; and also that he shall make distribution of the moneys made by the sheriff’s sale as upon a bill in equity filed by Charles Downing, a creditor of said defendant, against the sheriff and said plaintiffs, charging said plaintiffs with fraud upon said creditor in obtaining said judgments, issuing said executions, and selling the property of said defendant, and withholding the proceeds thereof, in trust for the creditors and stockholders of said defendant, and an answer denying said allegations, and the right of said creditor to file such a bill.
    “ Either party to have the right to file exceptions to any finding either of law or fact of said master, and the same to be heard and determined as in ca-ses in equity.
    “ This agreement to take effect as if filed of record prior to the hearing before said examiner, and his report and the exceptions thereto, now on file in said court, to be treated as if made under this agreement.”
    On August 20th 1878, by an agreement filed, the decree of March 14th 1878, was vacated and the case was subsequently re-argued. On November 1st 1878, the court filed an opinion which set forth that as by the agreement to refer, Downing was the only creditor in the position of a complainant to the supposed bill in equity, the distribution should be made only as between him and the three preceding execution-creditors. The report was therefore referred back to the master for correction.
    On November 13th 1878, an amendment to the constructive bill was filed by J. P. Hartman and other-creditors, asking to be made parties to said bill, and a rule was granted to show cause why it should not be allowed, which rule was subsequently made absolute. An answer and replication were filed, and the amended bill and answer were again referred to Mr. Euthey, as examiner and master, to report thereon. He afterwards reported upon the whole case, and made a distribution in exact accordance with his first report. Hopkins and Johnson excepted, but the court dismissed their exceptions and confirmed the report. Erom this decree the exceptants took this appeal, assigning for error:
    1. That the court erred in confirming the scheme of distribution amongst all of the creditors ; 2. In holding that the amendment to the constructive bill was in time; 3. In holding that any but execution-creditors were entitled to share in the distribution ; 4. In not awarding the fund to the first execution-creditors.

      William JE. Barber, JR. T. Q'ornwell and William Darling-ton, for appellants.
    Directors of a corporation having just and valid claims against it, can sue for and recover them : Brinham v. Wellersburg Coal Co., 11 Wright 49; Ashurst’s Appeal, 10 P. F. Smith 314; Twinlick Oil Co. v. Marbury, 1 Otto 587. The judgments were regular, but if they were not, no one but the corporation could take advantage of such irregularity: Drexel’s Appeal, 6 Barr 272; Hauer’s Appeal, 5 W. & S. 473; Dickerson’s Appeal, 7 Barr 257; Roemer v. Denig, 6 Harris 484. These creditors had the right to acquire, by superior diligence, the first lien on the debtor’s goods: Siegel v. Chidsey, 4 Casey 288. In proceedings to distribute funds raised by a sheriff’s sale of personal property, only parties to the record can be heard: Tomb’s Appeal, 9 Barr 61; Shutze’s Appeal, 1 Id. 251; Schick’s Appeal, 13 Wright 380; Schick v. Pharo, 13 Id. 384. A judgment of a court of competent jurisdiction cannot be inquired into, except for fraud or collusion: Dougherty’s Estate, 9 W. & S. 189; Thompson’s Appeal, 7 P. F. Smith 178; Fulton’s Estate, 1 Id. 212; Yaple et al. v. Titus et al., 5 Wright 202. Where, in a contest between the first and a subsequent execution-creditor on the ground ■ of fraud or collusion, the court decides that the subsequent execution-creditor has no standing, the first execution-creditor is entitled to be first paid out of 'the fund. Where by such a decision the proceedings have been dismissed, it is not in the power of the general creditors to restore the standing of the subsequent execution-creditor by applying to be made parties to the original bill. A supplemental bill must be strictly in aid of that which the court has already done: 3 Daniel’s Ch. 159; Wilson v. Todd, 1 Myl. & Cr. 42. An amendment will not be allowed to a bill in equity which makes the case substantially a new one after the case has been argued: Snead v. McCoull, 12 Howard 407; Walden v. Bodley, 14 Pet. 156; Adam’s Eq. 662, n.

      'Alfred JP. Reid and William B. Waddell, for appellees.
    The original bill of Charles Downing charged the appellants “with holding the fund in court in fraud and in trust for all the creditors.” By so doing, Downing does not stand in the position of a lien creditor, or claim any benefit by reason of his execution, but as a creditor and stockholder files a bill with allegations that inure tc the benefit of all creditors alike. By the amended bill no new cause is raised, for it simply asks that the creditors and stockholders be formally made parties to the suit and have the benefit of the charges therein contained.
    There had been no unreasonable delay on their part. Their right had been recognised. They had been actively asserting this right all the time, though not formal parties.
    Courts of equity proceed in analogy to the Statute of Limitations, and a constructive trust may be asserted at any time within six years after the knowledge of the facts creating it: Bispham on Equity, p. 260; 2 Story on Equity Jurisprudence, sec. 1520; Ashurst’s Appeal, 10 P. F. Smith 290. And where one creditor (under a creditor’s bill) files a bill for all, the statute .will not run against any of them, but others may come in at any time. No rule of law shall be used for the purpose of protecting fraud: Bispham on Equity, p. 258. No error was therefore committed in permitting the amendment being made.
    Again, courts in equity have by statute unlimited power over corporations. Force and effect must be given to the equity branch of the court’s power and this court has done so repeatedly : Britton’s Appeal, 9 Wright 172; Kohl v. Harting, 8 Watts 328; Tindle’s Appeal, 27 P. F. Smith 204; Kelly’s Appeal, 4 Harris 59; Merkle’s Appeal, Leg. Int. Oct. 6th 1876, p. 358; Selden’s Appeal, 24 P. F. Smith 328; Bayard’s Appeal, 22 Id. 453. Directors of a corporation occupy a fiduciai’y relation to it, and they cannot, because they are directors, secure an advantage to themselves not common to other creditors: Drury v. Cross, 7 Wallace 302; Jackson v. Ludeling, 21 Id. 616; Koehler v. Black River Falls Iron Co., 2 Black 716; Cumberland Coal Co. v. Sherman, 30 Barb. 571; Butts v. Wood, 37 N. Y. 319.
    May 7th 1879.
   Mr. Justice Mercur

delivered the opinion of the court,

This contention is for a fund raised by sheriff’s sale of personal estate of the Chester Valley Wheel and Axle Company, an insolvent corporation. The appellants and one Sharpless were the sole directors of the company, at the time the judgments were obtained, on which the executions issued. Johnson was also the president, and Hopkins the secretary and treasurer. ..The notes on which the judgments were procured were signed and attested by the appellants in their respective oflicial capacity, and given to each of said three directors. The master has found as a fact “ that when these notes were given, and proceedings instituted thereon, the company was insolvent. It was embarrassed and unable to continue its operations, unless more capital or other means was secured.” The insolvency was manifestly known to the appellants, and the notes given to each of them undoubtedly with a view of giving a preference over other creditors; yet, as they were given for an existing indebtedness, the master found there was no intention to collude and commit actual fraud;” nevertheless, he was “of the opinion, that the proceedings of Hopkins and Johnson, acting together as •before stated, were, under the circumstances and in the insolvent condition of the company, a fraud in law on the other creditors.”'

The method first commenced, and pursued for sometime, to make distribution, was unusual and very irregular. But defects which might otherwise have proved fatal to the whole proceeding, were cured by agreement of parties, including the appellants. They agreed that the question, -whether their respective judgments were obtained in fraud of the creditors of the company, should be referred to a master and examiner named, with like effect as if tried by a jury, and that he should make distribution of the money as upon a bill in equity, filed by Downing, a creditor of the company, against the appellants, charging them with fraud, and with holding the money in trust for the creditors and stockholders of the company. By this agreement, signed by the appellants and certain creditors of the company, the court acquired jurisdiction of the proceeding. Although irregular in form, the parties agreed to treat it as a bill in equity. The court having entertained it as such, it became subject to amendment, like other bills, so far as to add the names of other creditors, in furtherance of the specific object of the bill. We therefore discover no error in the court having permitted an amendment, adding the names of other creditors; more especially as the claims of those creditors had, apparently -without objection, actually been considered by the master. Under all the circumstances, the amendment was in time.

The master reported that the money should be distributed among all the creditors, giving no preference to any of the execution-creditors. The court below confirmed the report, and decreed accordingly.

As a general rule, it may be conceded that between creditors claiming a fund raised by sheriff’s sale, only those who are parties to the record, and have a lien on the property, can be heard. In the distribution of the personal estate of an insolvent corporation, a different rule prevails. Prior to the Act of 7th April 1870, Purd. Dig. 291, pi. 52, the remedy to enforce execution against a corporation was by sequestration. That remedy was superseded by this act: Philadelphia and Baltimore Central Railroad Co.’s Appeal, 20 P. F. Smith 355; Bayard’s Appeal, 22 Id. 453. Although the act authorized the personal property and franchises of a corporation to be sold on a fieri facias, yet it did not intend that the whole property of an insolvent corporation should be for the sole use and benefit of the plaintiff in the execution. The levy on property of such a corporation does not give a preferred lien on the property thus seized. The proceeds are to be distributed among all the creditors, as in case of insolvency: Id. It follow’s, therefore, notwithstanding the anomalous proceeding, yet aided by the agreement of the parties, substantial justice has been done, and the decree ought not to be disturbed.

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


author: Mr. Justice Paxson

text:
    Merriman versus Moore.
    1. Although the clause, in a deed of conveyance, “under and subject” to 78a mortgage is a covenant of indemnity only as between grantor and grantee 512for the protection of the former, yet such grantee may so contract with his 78| grantor as to make himself personally liable to the mortgagee, for the amount 70| of the mortgage, even though his grantor was not so liable.
    2. A. conveyed land to B., “under and subject” to the payment of a mortgage to C. The deed to A. contained no “under and subject” clause. In a suit by C. against B., to recover the amount of the mortgage, O. offered to prove that when B. took the conveyance from A., he expressly agreed that he would assume the payment of the mortgage, and that the mortgage formed part of the consideration money. Held, that such evidence should have been admitted. Held, further, that although A. was not liable, yet his contract was not without consideration, inasmuch as the price of the land was the consideration.
    3. It is a rudimentary principle that a party may sue on a promise made on a sufficient consideration, for his use and benefit, though it be made to another and not himself.
    4. The Act of June 12th 1878, is not retrospective, but was intended to apply only to future cases.
    March 27th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Woodward, Trunkey and Sterrett, JJ.
    Error to the Court of Common Pleas of Montgomery county: Of January Term 1879, No. 209.
    Assumpsit by De Forest Merriman against Edwin Moore, Margaret S. Kennedy and Jacob Highley, executors of John Kennedy, deceased, and Christopher Heebner, to recover the amount of a mortgage held by plaintiff on land taken by the defendants, under and subject to the payment of said mortgage, the lien of which had been discharged by a sheriff’s sale under a prior encumbrance. This was an appeal by defendants from the award of a board of arbitrators. The declaration averred that on November 2d 1875, Edwin R. Cochran and wife conveyed a certain lot of ground in the city of Philadelphia to defendants, under and subject to the payment of a certain mortgage of $800, given by one Milner to one Olay, of which the plaintiff was the legal holder, and that the defendants accepted the conveyance of said lot, and in consideration thereof promised the said Cochran and wife to pay to plaintiff the said mortgage, &c. There was also a count for money had and received. The defendants pleaded “non assumpserunt.” At the trial plaintiff proposed to prove by R. W. Hammel “ that he was the broker who effected the sale to Messrs. Heebner and Kennedy, and that it was expressly agreed between the parties to this deed that they were to assume the payment of both o'f the mortgages named in the deed, and that said mortgage formed part and parcel of the consideration-money.”
    The court sustained the objection to this offer. The court, Ross, P. J., directed the jury to find a special verdict, which they did, in substance, as follows : On November 2d 1875, Edwin R. Cochran and wife conveyed to John Kennedy and Christopher Heebner, certain lots for the sum of $9650. One of these lots was conveyed under and subject to the payment of two mortgages, one of which for $800 was executed by one Milner, the grantor of Cochran, and the other for $2550, by the grantor of Milnér. The deed to Cochran contained no “under and subject” clause, as to the mortgage for $800. The plaintiff came into possession of this latter mortgage by assignment. At March Term 1877, writs of scire facias were issued upon both mortgages. The- premises were sold by the sheriff for an amount insufficient to pay the first mortgage, and he stayed the writ on the one .for $800. The amount remaining due the plaintiff was $998. If the court was of opinion that plaintiff was entitled to recover, then the jury find that amount in his favor as damages; if, on the contrary, the court was of opinion that the action could not be maintained, then they find for defendants. The court entered judgment for defendants on this special verdict, when plaintiff took this writ and assigned for error this entry of judgment, and the exclusion of the evidence above set forth.

      Charles Bunsieker and Joseph W. Bunsieker, for plaintiff in error.
    The court erred in refusing to allow plaintiff to prove that the defendant had expressly agreed to assume the payment of the plaintiff’s mortgage and that said mortgage formed part of the consideration-money: Moore’s Appeal, 7 Norris 450; Samuel v. Peyton, Id. 465; Thomas v. Wiltbank, 6 W. N. C. 477. The Act of June 12th 1878, Pamph. L. 1878, p. 205, is not retrospective. If intended to apply to cases before the passage of the act, it is unconstitutional. It not only affects the remedy, but destroys the contract : McCabe v. Emerson, 6 Harris 111; Penrose v. Erie Canal Co., 6 P. F. Smith 46.

      James Boyd, B. JE. Chain and O. B. Stinson, for defendants in error.
    The offer of the plaintiff was irrelevant, for it did not tend to show any liability on the part of Cochran, against which the defendants in error agreed to indemnify him.
    The facts show that Cochran, defendants’ grantor, had not assumed and was not personally liable for this debt, and there was no offer to prove it. The holder of the mortgage, which is the subject of this suit, was no party to the deed to defendants, and was a total stranger to the transaction. There was no contract, privity, or consideration between him, the defendants’ vendor, or the defendants. The consideration in defendants’ deed and the receipt for the same show that the mortgage formed no part of the consideration-money as between the parties to it.
    The offer had reference to a consideration directly inconsistent with that mentioned in the deed. Besides, the Act of the 12th of June 1878, Pamph. L. 205, provides, that in order to make a pure chaser personally liable for encumbrances, the assumption of such personal liability must be in writing. This act does not impair the obligation of any contract, for there was no contract between the plaintiff in error, the holder of. the mortgage and these defendants.
    The act is a mere regulation as to what is sufficient evidence, a mere measure of proof.
    January 23d 1879.
   Mr. Justice Paxson

delivered the opinion of the court,

In recent cases some attempts have been made to define with as much precision as possible the mutual and dependent rights and duties of mortgagees, mortgagors, the grantees of mortgagors and the alienees of such grantees. 1. A conveyance of land “ under and subject” to a mortgage executed by the grantor, creates, as between themselves, a covenant of indemnity to the grantor on the part of the grantee. 2. If the grantee- alien by a deed containing the same “ under and subject” clause, without more, the alienee does not assume a liability to the mortgagee, or undertake to discharge ' the grantee’s covenant of indemnity. 3. It is competent, however, for the mortgagee to show by adequate evidence that the alienee has taken upon himself not only the grantor’s duty to indemnify the mortgagor, but a personal obligation to pay the mortgage-debt. 4. In all cases arising before the Act of 12th of June 1878, this adequate evidence may consist of stipulations in the deed, of written articles, outside its terms, or of a verbal contemporaneous agreement between the parties. And the fact of such an undertaking may be implied from circumstances attending and connected with the conveyance of the land: Moore’s Appeal, 7 Norris 450; Samuel v. Peyton, Id. 465, and Thomas v. Wiltbank, 6 W. N. C. 477. Is the present case within these principles ? It is an action of assumpsit brought by the assignee of a mortgagee against a grantee to enforce a promise to the grantor to pay off an outstanding mortgage, for which the grantor was not himself personally bound, made upon no other consideration than the value of the land conveyed. At the trial, an attempt was made to fasten a personal liability upon Cochran’s grantees for the amount of the $800 mortgage to Clay. The plaintiff proposed to prove by Richard W. Hammel that “ he was the broker who effected the sale to Ileebner and Kennedy, and that it was expressly agreed between the parties to this deed that they were to assume the payment of both the mortgages named in the deed, and that said mortgages formed part of the consideration.” The testimony was rejected, and afterwards, upon the facts found by the special verdict, a judgment was entered for the defendants'.

Was Cochran in a position to enable him to make a contract like that alleged, so that it may inure to the benefit of the plaintiff? The court below held that he was not, for the reason that he was bound by no personal obligation to Milner, for he had received a general conveyance of encumbered property without any stipulation it should be subject to the encumbrances. In other words, that because Cochran was under no obligation or duty to pay the encumbrances, his grantees, who had bought “under and subject” to such' encumbrances, had expressly agreed to pay them, as a part of the purchase-money, were not liable upon such promise, because without consideration. This was clearly error. The consideration was the price of -the land. It was nothing to Cochran’s vendees what the former did with the purchase-money. He saw proper to apply a portion of it to the payment of the mortgages which bound the land conveyed, although they imposed no personal liability upon . him. A vendor may direct how the purchase-money shall be paid. He may reserve it to himself, donate it to a public charity, or may make such other disposition of it as may best meet his views, and if his vendee agrees to pay it according to such directions, he cannot set up as a defence that his vendor was under no duty to apply it in such manner. The difficulty in the way of the defendants is, that the evidence rejected would go to show that they have not paid the .purchase-money. The right of the plaintiff to recover' does not depend upon privity of contract. “ It is a rudimental principle, that a party may sue on a promise made on sufficient consideration for his use and benefit, though it be made to another and not to himself:” Hoff’s Appeal, 12 Harris 200; Townsend v. Long, 27 P. F. Smith 143; Justice v. Tallman, 5 Norris 147.

The court below rejected the evidence offered by the plaintiff for the further reason that it came within the Act of 12th June 1878, Pamph. L. 205. There is nothing upon the face of the act to lead to the conclusion that the legislature intended it to be retrospective. It speaks in the future tense throughout, and evidently means only to apply to future cases. In this respect it closely resembles the fourth section of the Act of 22d April 1856, Purd. Dig. 724, which was held to be prospective, in Lingenfelter v. Ritchey, 8 P. F. Smith 485.

Judgment reversed, and a venire facias de novo awarded.

Justices Mercur and Gordon dissented.