author: Chief Justice Sharswood

text:
    Haines et al. versus Commonwealth.
    1. At common law no bills of exception were permitted in criminal cases. The provisions of the statute of Westminster the Second, 13 Edward I., c. 31, with reference to bills of exception, have therefore, at common law, no application in such cases.
    2. The right of the defendant in an indictment for any criminal charge, other than murder or voluntary manslaughter, to a bill of exceptions, rests solely on the provisions of the Act of May 19th 1874, Pamph. L. 219. By virtue of the provisions of the said Act the defendant is entitled to his bill of exceptions as in civil cases.
    3. The provisions of the said act may be considered to extend the provisions of the statute of Westminster the Second, 13 Edward I., c. 31, to such cases.
    4. The court is not bound, in such cases, as it is on indictments for homicide and voluntary manslaughter, to file the charge in writing, with answers to points, and the rulings on questions of evidence.
    5. According to strict practice, exceptions should be presented and sealed in such cases, as they formerly were in civil cases, during the trial. And although the courts have relaxed their strictness in such cases, only requiring that the exception shall be taken, and noted at the time, there is nothing to prevent a return to the old strictness under the statute of Westminster the Second.
    6. Tire courts may pass rules in criminal, as in civil cases, requiring a bill of exceptions to be presented and settled within a certain time after the trial. If not presented within such time, the court is not obliged to set its seal to such bill.
    7. Such rules are intended as well for the protection of the judge, as of the Commonwealth, and cannot therefore be waived by the district attorney.
    8. Where a writ is issued by the Supreme Court to a judge under the provisions of the statute of Westminster the Second, 13 Edward I., c. 31, commanding him cither to confess or deny the matters therein set forth, and if he confess the same to set his seal to certain exceptions, the return made by the judge is conclusive, and cannot be contravened, whether the ease be civil or criminal in its nature.
    January 21st 1882.
    Before Sharswood, C. J. Merour, Gordon, Paxson, Trunket, Sterrett, and Green, JJ.
    In the Supreme Court of Pennsylvania.
    Charles C. ITaines, William E. Mislcey, Jr., and Henry G. Clement, filed their petition, averring, inter alia, that upon the trial of a certain indictment in the Court of Quarter Sessions of the county of Philadelphia, before the Honorable Thomas K. Pinletter, an associate justice of said court, wherein tiie petitioners were indicted for conspiracy, and were convicted and sentenced, tbe defendants, by their counsel, had taken certain exeeptions in writing to rulings and the charge of the court, which exceptions the said judge refused to seal; and praying this court “ to award a writ conformably to the statute in such case made and provided (Statute Westm. 2d, 13 Edw. 1. c. 31*) directed to the Honorable Thomas K. Finletter, commanding him to appear at a certain day, either to confess or deny the matters herein set forth, and if he confess the same to affix his seal to said exceptions, or to so much of the same as he shall so confess; and to award such other relief as by law tbe petitioners may be entitled to.”
    A writ was thereupon issued, by direction of the court, in the stjde following, to wit:—
    “ Eastern District ok Pennsylvania, set.
    “ The Commonwealth oe Pennsylvania to IIon. Thomas K. Finletter. Greeting.
    “ Whereas, by statute, among other things, it is provided that in any suit before the justices, where an exception is taken, if the said justice, before whom the same is taken refuse to allow the same, and the party making the «exception puts the same in writing and requires the justice to put his seal thereto, in testimony of the same, if he refuse so to put his seal, it shall be affixed as in said statute is set forth.
    “ And whereas, Charles O. Haines, William F. Miskey, Jr., and Henry Gr. Clement have filed their petition before the Justices of the Supreme Court of Pennsylvania, complaining that lately in a certain case in the Court of Quarter Sessions for the city and county of Philadelphia, to April Sessions, 1880, and No. 194, before you, tbe said Thomas K. Finletter, between the Commonwealth of Pennsylvania and the said Charles C. Haines, William P. Miskey, Jr., and Henry G. Clement, various exceptions were taken and alleged to certain rulings and your charge, and those exceptions have been put in writing, for that you refuse to allow the same, and have been repeatedly required and prayed to affix your seal to those
    * The Statute of Westminster 2, provides as follows :
    “When one that is impleaded before any of the justices doth allege an exception, praying that the justices will allow it, which if they will not allow, if he that alleged the exception do write the same exception and require that the justices will put to their seals for a witness, the justices shall so do, and if one will not, another of the company shall.
    “And if the king upon complaint made of the justices cause the record'to come before him and the same exception be not found in the role, and the plaintiff show the exception written with the seal of a justice put to, the justice shall bo commanded that he appear at a certain day, either to confess or deny his seal, and if the justice cannot deny his seal they shall proceed to judgment according to the same exception, as it ought to be allowed or disallowed.” exceptions according to the form of the aforesaid statute. Yet so it is, that you have objected, and still do object and refuse to affix your seal to the aforesaid exceptions, to the grievous injury and manifest prejudice of the said Charles O. Haines, et al.', aiid the said Charles C. Haines, et al., did pray said justices to provide a remedy for them.
    “ And because we are desirous that the aforesaid statute be strictly observed, and that justice be done to the said Charles C. Haines et al., in the premises, we command you that, if so it be, that on or before Saturday, the fourteenth day of January, 1882, you affix your seal to the aforesaid exceptions thus had before you, in the aforesaid suit by the aforesaid Charles C. Haines,' et al., in writing, according to the form of statute aforesaid. And herein fail not, under the penalty in such cases impending.
    “Witness the Honorable George Siiarswood, Doctor of Laws, Chief Justice of our said Supreme Court, at Philadelphia, the ninth day of January, in the year of our Lord one thousand eight hundred and eighty-two, and of the Commonwealth the one hundred and sixth.
    [seal.] “Charles S. Greene, Prothonotary.”
    Judge Finletter filed a return to the writ, to which return the petitioners, by leave of the court, filed exceptions, and they prayed leave, if the exceptions' should be disallowed, to file a traverse and demand an issue.
    The petition narrated the matters complained of, and contained, among other statements, the following: The verdict was rendered February 9th 1881. In accordance with the practice in Philadelphia county, although the several exceptions were demanded, taken and noted at the trial, no formal bills of exception were then drawn up, presented or sealed, but within ten days after the trial the petitioner’s counsel prepared a full bill of exceptions and presented it to Judge Finletter, who indorsed it “ Presented,” with his signature, and returned it to petitioners’ counsel, “ stating when he did so, that he did not hold parties to a cpiestion of time.” Petitioners’ counsel then left it with the district attorney for correction or,approval, and after some correspondence and delay, counsel on both sides appeared in court before Judge Finletter on Hay 4th 1881, to settle the bill. As to many of the exceptions counsel agreed ; as to others they differed. The judge replied: “Leave the matter with me, and I will dispose of it.” On the following day the judge refused to seal the bill, stating that it contained erasures and interlineations. Petitioners’ counsel then had the bill engrossed and sent the copy with the original to the district attorney for approval. He retained it for a considerable period of time, during which petitioners’ counsel wrote several times requesting him to return it. Several appointments were also made during this period to meet the judge, but for various reasons no such meeting was held until November 23d 1881, •when the engrossed bill was presented to Judge Finletter, who made the following indorsements thereon: — ■
    “November 23d 1881, Lewis C. Cassidy, Esq., counsel for defendants, presents the within papers, as, and for, a bill of exceptions, and requests to have the same settled, and sealed.
    “ The Rules of Court are as follows:
    “ Rule 4th. 'Bills of Exceptions.
    “ Section 4. ‘ In every case where a bill of exceptions is tendered, the same shall bo prepared in form, and presented to the judge within ten days after the verdict.’
    “ Section 5. ‘ In every case of a bill of exceptions, it shall be the duty of the party presenting the bill, within twenty days thereafter, to have the same settled by the judge before whom the case was tried, on forty-eight hours’ notice, with a copy of the bill served on the opposite party, otherwise the judge shall not be required to seal the same.’
    “ The verdict in this case was rendered by the jury, and entered of record February 9th 1881.
    “ It is manifest that this application is not made within the time prescribed by the rules of court. No reason or excuse for this disregard of the rules of court has been assigned. I, therefore, decline to examine, or seal, papers as a bill of exceptions.
    “ T. K. Finletter.”
    Tlie bill of exceptions, together "with the points submitted and answers thereto, was thereupon filed, so marked by the clerk, and entered on tlie minute book.
    On December 7th 18815 the clerk wras directed by the court to erase and cancel the entries of the filing of the said papers.
    The petitioners’ counsel, on November 28tb 1881, filed their demand, and had also requested Judge Finletter, in writing, to file the notes taken by him on the trial, containing the exceptions made by the defendants from his rulings, together with his charge, as reduced to writing and delivered.
    The petitioner’s counsel had, prior to December 7th 1881, directed that tlie record should be made up, in order that they might inspect the same, and have the same amended, by tlie court, if necessary, before return thereof to the Supreme Court. On applying to the deputy clerk for said record, answer was made that tlie judges had had it taken before them, had certified to it, and had ordered it to be taken at once to the Supreme Court. As thus made up, the record was imperfect; and petitioners’ counsel at once filed their affidavit, setting forth the defects in said record, and on said affidavit, Judge Elcock, granted a rule, December 6th 18S1, to show cause why the clerk should not perfect the the record. After the entry of said rule, Judge Finletter asked the clerk why the record had not been sent to the Supreme Court. The clerk replied, that a rule was pending to show cause why the record should not be perfected. The judge then repeated his order, that it should be sent up at once. In obedience to this positive direction, the clerk caused said record to be returned to the Supreme Court, although the rule was pending to perfect the same.
    Petitioners’ counsel then demanded of the clerk, a certified copy of the entry on the minute book, dated November 23d 1881, of the filing of the bill of exceptions and points. This was refused in pursuance of the following order of the court:—
    “ And now, December 10th 1881, the clerk of this court having applied to the court for direction as to his duty in restoring the indorsements made by him authenticating certain papers left with him November 23d 1881 (to wit, a paper, purporting to be a bill of exceptions, with an indorsement thereon of the'jjudge, declining to examine or seal it; another paper, purporting to ffie a bill of exceptions, indorsed by the judge as presented; and another paper, purporting to be the defendant’s points for charge, with judge’s answers thereto) as having been filed in his office, which indorsements have been since erased and cancelled by him, under the direction of this court. And also as to his (the said clerk’s) duty in furnishing to said defendants a certified copy of an entry erroneously made upon the minute book of the said court (Book W. É. L, page 119) in reference to said papers. It is ordered,

      “ 1. That the said papers are no part of the record of this court and were improperly marked filed, with the said clerk, and that the said indorsements, so cancelled, shall not be restored by him.”
    “ 2. That the said entry in said minute book was improvidently, and improperly made, and that inasmuch as it has been stricken off by the express oyder of the court, it is not a part of the judicial proceedings of this court, and it is the duty of the said clerk to refuse to give a copy thereof, or of the said order striking off the same, certified by him under the seal of this court. T. JL Finletter.”
    The petitioners then further alleged that'the certificate on the back of the writ of error, returning said record, and the order to the clerk to send the record up" to this court, and the order to erase the entries of filing, and the order to withhold a certified copy of said entries from the minute hook, were all made by Judge Finletter when he was not holding a court of quarter sessions, nor assigned under the rules to hold such court. Further, that the said judge did not file the original bills of exceptions and charge as requested, hut has retained them in his possession, and that he refused to seal the formal copy thereof, tendered to him for that purpose, which copy the petitioners annexed to their petition. The petitioners averred that the record, as returned to this court, was in these respects incomplete and deficient, and prayed for a writ under the statute of Westminster II., which was awarded as above.
    Judge Finletter’s answer or return to the writ set forth, in substance, as follows: Within ten days after the*verdict was rendered, a bill of exceptions was presented to and indorsed by the respondent, but neither then nor at any other time did respondent say that he did not hojd parties to a question of time, or anything from which that might be inferred. That respondent fixed several times for hearing the defendant’s counsel, but that no application to seal the bill was made by them to him until May 4th, when the bill was presented to him for that purpose. That respondent then considered it his duty not to seal the hill; one of his reasons (in writing) being: “ The bill of exceptions was not presented to me for settlement within the time prescribed by the rules of court. There may be such explanations of this delay as will satisfy me that I ought not to let it prevent me from signing a proper bill.”
    That after this, several times, in all twelve or fifteen, wrnre fixed for meeting the defendants’ counsel, at all of which respondent was present, but that no application was made until November 23d 1881, when certain papers were presented to liim, which he refused to seal as a bill of exceptions. Respondent averred that he had no knowledge of any correspondence between the defendants’ counsel andtlie district attorney in relation to those papers. Respondent further averred that the rule of court applicable in the case was adopted at a meeting of the Board of Judges, held December 2Sth 1874, by which the rules of the late District Court, as to bills of exception, were adopted as the rules of the Quarter Sessions and Oyer and Terminer, of which rules the defendants’ counsel had notice; that the entries on the minute book were made by the clerk without authority, and subsequent, moreover, to the service on respondent of the writ of error, on November 22d 1881; and that twenty-seven of the thirty-two alleged exceptions were either not taken, or if taken, not noted; that only three were correctly stated; but that notwithstanding the lapse of time, respondent was ready to seal a true bill of exceptions. He would not, however, he averred, seal the one tendered by defendants’ counsel, which contained, he alleged, sundry alterations from, and additions to, the first bill presented to him.
    The respondent filed, as an additional answer, the printed rules of the court of Quarter Sessions.
    The petitioners excepted to the return for the following reasons:— ■
    Because the respondent had not sealed those exceptions which he admitted to be true. Because the petitioners denied the legal existence of the Rules of Court relied on by respondent. Because the following averments were not answered, viz: that the papers admitted to have been presented in due time, were left with the district attorney for correction; that the district attorney’s attention was repeatedly called to the subject to avoid allegations of delay; that he retained the engrossed bill until November, 1881; and that respondent directed the court cleric to return an incomplete record to the Supreme Court, though a rule was pending to show cause why said record should not be perfected. Because the return did not confess or deny the bill of exceptions attached to the petition, but attempted to answer the assignments of error noted therein. Because the answers of the respondent in his own writing to the points presented, returned to the Supreme Court with the record, advised the said court of the ambiguity of the return that “ the exceptions are not truly stated in the petition,” which return was, petitioners averred, insufficient, the writ commanding the respondent to confess or deny the same.
    • The cause came on for argument upon the exceptions to the return, and also upon motion for leave to file a traverse to the return.

      F. Carroll Brewster and Lewis C. Cassidy {J. H. Ileverin with them), for the exeejfiants. —
    Mandamus is a special remedy which may always be invoiced where there is a right and no specific remedy. The writ provided by the Statute of Westminster 2d is mandamus, and both in England and in this country has been allowed in such cases as this: Buller’s Nisi Prius, 315-16; 2 Coice’s Institutes; High on Mandamus 158, § 201; Ex parte Crane, 5 Peters 190; Sikes v. Ransom, 6 Johns. 279; People v. Judges, 1 Caines (N. Y.) 511; Same v. Same, 2 Caines 97; Same v. Same, 2 Johns. Oas. 118; Same v. Same, 4 Cow. (N. Y.) 73; Tweed v. Davis, 47 How. Pr. (N. Y.) 162; Miller v. Roger, 9 Humphreys (Tenn.) 231; State v. Hall, 3 Coldwell (Tenn.) 255; People v. Baker, 35 Barb. 105; Ins. Co. of N. Y. v. Wilson, 8 Peters 291; Ex parte Bradstreet, 7 Peters 634; People v. Pearson, 2 Seammon (3 111.) 189. The time of sealing bills of exception taken at the trial, is not material. Statutes and rules of court regulating the practice in this respect are directory merely: People v. Lee, 14 Cal. 510; Crowfut-y. People, 19 Mich. 254; Strader v. Alexander, 9 Porter (Ala.) 441; Pool v. R. R. Co., 5 Ala. 237; Ilixon v. Weaver, 9 Ark. 133; Stewart v. Bank, 11 S. & R. 267; Morris ». Buckley, 8 S. & R. 211; Burk v. McMullen, 4 Barr 317.
    This court has original jurisdiction in cases of mandamus to courts of inferior jurisdiction : Const, of Penn. art. V. § 3.
    The return to a mandamus must conform to the general rules of pleading, and exceptions may, according to our practice in Pennsylvania, be filed thereto. In Conrow v. Schloss, 5 P. F. Smith 41, counsel applied for leave to file a demurrer to the return, but, under direction of the court, presented exceptions thereto.
    The return is defective in the following respects among others. It does not say specifically whether the exceptions, as set forth in the bill of exceptions, annexed to the petition, are or are not correct, but evasively states that certain statements thereof, as recited in the petition, are not literally true. The petition, as in Conrow v. Schloss, contains a narration of our complaint, in the nature of an assignment of errors, but the writ commands the respondent to confess or deny the bills of exception. It does not confess or deny our alleged exceptions to the charge; and to the refusal of our points. It admits that certain exceptions were taken, and that the same have not been signed. The ground of' excuse is, that the bill was not presented in -time, according to certain alleged rules of court, which, however, are not to be found in the published and certified rules.
    The constitution gives the right to a writ of error in criminal eases to remove the record and all proceedings, to the Supreme Court for review (Art. V. § 24). This includes the charge, and the points presented, with the answers 'thereto. But the judge refused to file his charge (which he had written out in full), and directed the clerk to erase the entries of the filing of other parts of the proceeding, and himself directed the record to be removed to this court in an incomplete state. The correspondence submitted shows that the delay which occurred between the first presentation of the bill of exceptions, and its presentation after being agreed to by the district attorney, was caused, not by the petitioners, but by reason of tlio press of public business in the district attorney’s office. Counsel on both sides having settled the bill, there l’emained nothing for the judge to do but to seal it. It is the first time that a judge in Pennsylvania has refused to seal a bill of exceptions in a criminal case on a technical question of time. The charge alone, if filed, will show sufficient grounds of reversal.

      As to our right to file a traverse to the return. It is said that, under Drexel v. Man, 6 W. & S. 397, and Oonrow v. Scliloss, 5 P. E. Smith, 28, our only remedy is an action for a false return. But both those cases were civil cases : the remedy there may be adequate; the defendant is free to sue, his damages may be measured. But there is no analogy in a criminal case. Of what advantage t'o a prisoner in jail is the 1’ight to sue for a false return ? Why shall not an issue be granted ? Because a fallible man is invested with the office of judge, shall other citizens be deprived of liberty by his mistaken or willfully erroneous acts, without a remedy ? The right to traverse returns to mandamus is expressly given by the Act of June 14th 1836, §§ 21, 25, Purd. Dig. 990, pi. 4, 8. Proceedings on mandamus are assimilated to those in common law actions. The return should be verified by affidavit (Lamb v. Lynd, 44 Pa. St. 336), and the right to sue for a false return does not exclude the right to a traverse and an issue. See High on Mandamus, 327, 328, §458.

      Wm. A. Porter and Henry M. PhilUjps, for the respondent. —
    It is a sufficient answer to the writ to say that the bill of exceptions which was tendered, was not correct, and was not tendered and settled in accordance with the rules of court, and the respondent, therefore, refused to seal it.
    So far as this court is concerned, if the judge of the court below denies matters of fact alleged in the petition, the return must be taken as verity. The only remedy is an action for a false return. There is no right to traverse; and to send an issue to another county for a jury to try whether a judge has told a deliberate falsehood, would be indecent and not to be tolerated. We deny the proposition that when counsel have agreed to a bill of exceptions, the judge is bound to seal it. We submit that the petition should be dismissed, and the petitioners be remitted to obtain what they can, by the favor of the court below, or otherwise.
   Chief Justice Sharswood

delivered the opinion of the court, February 6th 1882.

A writ has been issued in this case in accordance with the provisions of the statute of Westminster, 13 Edw. I., c. 31 (Roberts’ Dig. 92), to Thomas K. Finletter, one of the judges of the Court of Quarter Sessions of Philadelphia county, founded upon the complaint of the plaintiffs in error, that on the trial before him various exceptions were taken and alleged to certain of his rulings, and to his charge, and that he had refused to affix his seal to those exceptions, commanding him to affix his seal thereto. To this writ Judge Finletter has filed an answer.

It is beyond all question that the statute of Westminster was never held to apply to proceedings in criminal courts. In Middleton v. Commonwealth, 2 Watts 285, it was decided by this court that when the judge had actually sealed the bill it would not be considered. Gibson, C. J., said: “ It is not pretended that the judges were bound to seal these bills of exceptions, but it is said that as they have voluntarily done so, we are bound to inspect the matter supposed to be thus put on the record. But the statute sanctions nothing which it does not enjoin; and as it has been held in Sir Harry Vane’s case according to the report of it in 1 Levinz 68 and Kelynge 18, to be inapplicable to any criminal matter whatever, the case before us stands precisely as it would have stood before the statute.” The same thing was decided in Schœppe v. Commonwealth, 15 P. F. Smith 51. At common law no bills of exception were permitted in criminal cases, nor did the evidence, rulings and charge of the court form any part of the record: Ibid. It is clear, then, that the right to. a bill of exceptions depends entirely upon the Acts of Assembly. The Legislature, on the 6th day of November 1856 (Pamph. L. 1857, Appendix 795), passed “An Act allowing bills of exceptions and writs of error in criminal cases.” The provisions of this Act were incorporated with the Criminal Procedure Act of March 31st 1860, Pamph. L. 440. As,1 however, they are confined to trials on any indictment for murder or voluntary manslaughter, they are inapplicable to the case now before ns. They provide that the defendant “ may except to any decision of the court upon any" point of evidence or law, which exception shall be noted by the court and filed of record as in civil cases:” § 57. And also that the court may be required to give an opinion upon any point submitted, and stated in writing, “ which point and answer shall be filed with the records of the case.” On the 19th day of May 1874, was passed the Act entitled “ An Act to provide for review in the Supreme Court in criminal cases,” Pamph. L. 219. After providing “ that on the trial of all cases of felonious homicide, and in all such other criminal cases as are exclusively triable and punishable in the courts of Oyer and Terminer and general jail delivery, exception to any decision of the court may be made by the defendant, and a bill thereof shall be sealed in the same manner as is provided and practiced in civil cases,” and “ in all other criminal cases exceptions as aforesaid may be taken.” This is all the legislation on the subject, and it is clear that a marked difference is made between eases of homicide and voluntary manslaughter and other cases. In the former, the court is bound to file of record its rulings upon points of evidence or law, and also its answers to points submitted. In all other criminal trials exceptions may be taken as in civil cases. This may be considered as extending the statute of Westminster to this class of proceedings. The court is not bound to file the charge in writing, or the answers to points, or the rulings on questions of evidence. In all these matters the defendant is remitted to his bills of exceptions. In strictness these ought to be presented and sealed during the trial, and such was formerly the practice in civil cases.

The courts, however, have relaxed this strictness, and all that is required now is that the exception should be taken, and noted at the time: Stewart v. Huntingdon Bank, 11 Serg. & R. 267. There is nothing in any Act of Assembly, to prevent the courts from returning to the old strictness under the statute of Westminister. But it is very plain, that this new practice required to be regulated by rules of court, and a reasonable time fixed within which the court should be called on to seal the bill. It ought to be within such time, as that the matter may be still fresh in the recollection of the court. Accordingly, the civil courts have generally adopted rules to the effect that the bill should be presented to the court within a certain period, and finally settled and sealed within a defined time thereafter.

There is no reason why criminal courts should not adopt the same rules. Indeed, it may well be doubted whether under the general and comprehensive terms of the Act of 1874 these rules in civil cases would not be applicable. However, it is unnecessary to decide that question here, as it appears by the answer of the respondent with a copy of the record, that they have been expressly adopted by the judges for the courts of Oyer and Terminer and Quarter Sessions of Philadelphia county. They ought certainly to be enforced. It is a mistake to suppose that they can be waived by the district attorney for the Commonwealth. They are intended for the protection of the judge, as well as for the Commonwealth. The idea put forth in the oral argument, that where the parties have agreed to a bill of exceptions, the court is bound to seal it, is certainly something new under the sun. The answer shows clearly that whatever the district attorney may have done, the respondent never waived his right to insist upon the enforcement of the rule. When he was first requested to fix a time for settling the bill, which was long after the time prescribed by the rule had expired, he raised the objection, but fixed a subsequent time to hear the application. At the time fixed he was in court, as also the • district attorney and two of the defendant’s counsel, but no application was made. Other times were appointed, but the bill was not presented until several weeks after, when he refused distinctly on the ground that it was not presented for settlement in time, and gave his reasons in writing, but added, “ there maybe such explanations of this delay as will satisfy mo that I ought not to let it prevent me from signing a proper bill.” He afterwards fixed several times, but no application was made until November 23d, nine months after the trial, when a paper was presented to be settled which had not indorsed any note signed by him to show that it had ever been presented. He very properly then refused to seal the bill. A bill of exceptions must be settled within the specified time or it will be disregarded: Kirkpatrick v. Lex, 13 Wright 122.

Nothing further need be added. There can be no traverse of the respondent’s return : Conrow v. Schloss, 5 P. F. Smith 29. If there exist any reasons why this rule should not apply in criminal cases it is for the legislature to annul it, and provide a remedy. It is very evident that we have no power to order the respondent to file liis charge, or his answers to the points, of his notes of testimony.

It is ordered that the respondent go, without day.


source: Caselaw Access Project

author: Mr. Justice Merour

license: Public Domain

text:
    Appeal of Andress, et al., Executors.
    1. The Statute of Limitations begins to run against a due-bill, payable on demand, from the date of the bill and not from the time of demand for payment.
    3. A due-bill payable on demand was given bearing date August 1st 1867. The maker died May 16th 1879. The payee died in November 1870, find letters of administration were granted upon his estate on January 18th 1871. On March 8th 1881, on the audit of the account of the executors of the maker, the administrators of the payee presented a claim upon the due bill. Reid, that the claim was barred by the Statute of Limitations.
    January 23d 1882.
    Before Sharswood, C. J., Merour, Gordon, Trunkey, Sterrett and Green, JJ. Paxson, J., absent.
    Appeal from tlie Orphans’ Court of Philadelphia eomdy : Of January Term 1882, No. 47.
    This was an appeal by Michael B. Andress and' George II. Dale, executors of Conrad B. Andress, deceased, from a decree of said court dismissing their exceptions to the adjudication of the auditing judge upon tlieir account as executors.
    Conrad B. Andress died May 16th 1879. His executors duly filed their account, upon the audit of which, on March 8th 1881, Thomas D. Andress, administrator de bonis non of William Andress, deceased (a brother of Conrad B. Andress), presented a claim upon the following due-bill:—

      “Philadelphia, August 1st 1867.
    “Due William Andress, four hundred dollars, payable on demand, for money loaned.
    “ C. B. Andress, 640 N. 12 th street.”
    William Andress died in November, 1870, intestate, and letters of administration were granted upon his estate January 18th 1871, to William B. Connell, who was afterward discharged, and letters of administration de bonis non were, in 1880, granted to the claimant, Thomas D. Andress.
    The claim was objected to by the accountants, on the ground' that the due-bilí was barred by the Statute of Limitations. The auditing judge, in his original adjudication, sustained the objection, saying, “No evidence of any demand or promise to pay by decedent within six years was offered, and in the absence of this, the claim is barred and must be rejected: See Byles on Bills, § 173, p. 409 (ed. 1856) and cases in note ; Dorrance v. Morrison (D. C. Phila., June 17th 1848), 2 Brightly’s Dig. 1647 ; Laforge v. Jayne, 9 Barr 410.”
    Exceptions having been filed to this ruling, the account was, after argument, re-committed to the auditing judge, who subsequently filed an amended adjudication, in which he overruled the objection, and allowed the claim, saying :—
    “In view of the authorities presented at the argument of the exceptions filed to the disallowance of the claim, it appears that the ruling of the cases relied upon by the auditing judge-is-not now the law of this state, and it seems to be settled that as to a due-bill payable in money on demand, the Statute of Limitations will not begin to run until after demand made. Then the right of action accrued to the holder, and the statute applies, not to the debt, but to the remedy: See Einkbone’s Appeal, 5 Morris, 368; Marsteller v. Marsteller, 8 W. N. O. 553. It follows that the claim should be allowed, with interest, from time of demand, which in this case is the date of the prior audit, viz., March 8th 1881, when the due-bill was presented as a claim against the estate.”
    To this adjudication the accountants filed exceptions, which were dismissed by the court, and the adjudication, as amended, was confirmed; whereupon the accountants took this appeal, assigning for error the decree dismissing their exceptions, and the allowing of said claim.

      John G-. Johnson {Albert L. Wilson with him), for the appellants. —
    The statute of limitations applies to causes of action “ founded upon any lending, or contract without specialty,” &c. A due-bill payable on demand, evidences a “ lending ”— in this case the due-bill expressly states on its face “ for money loaned.” — and by the law of Pennsylvania, as well as by the law of every other state, and of England, the statute runs on such a due-bill' from its date, and not from demand: Byles on Bills, (ed. 1856) 409, and cases cited in Sharswood’s note; 2 Parsons on Notes and Bills, 639 and cases cited ; Dorrance v. Morrison, D. O. of Philadelphia, MS. Brightly’s Dig. 1647; Laforge v. Jayne, 9 Barr 410; Taylor’s Admrs. v. Witman’s Admrs., 3 Grant 138. The cases of Finkbone’s Appeal, 5 Nor. 368, and Marsteller v. Marsteller, 8 IV. N. O. 553, cited on the other side, are inapplicable, for the former was a case of bailment for safe keeping, and in the latter there was no right of action by reason of disability from eovertui’e.

      Joseph De F. Junhm (George JunMn with him), for the appellee. —
    The due-bill in question not being negotiable, the rules and authorities relating to commercial paper have no application, and the intention of the parties, as expressed by the words “payable on demand” is to govern. This intention was, that the maker should have the use of his brother’s money, without interest, until demand for payment, the due-bill being “ a continuing soenrity, so that on the one side, the maker is not deemed in default until the money is actually demanded, while on the other, the holder may make demand when he pleases, and is not chargeable with neglect if he does not make it within any particular timo:” Merritt v. Todd, 23 N. Y. 28.
    The statute of limitations begins to rim from the time when a complete cause of action accrued. A due-bill “payable on demand,” is not payable until demand ; and, as interest is payable only from the time the principal ought to have been paid, such a due-bill does not bear interest until demand made: Bi’eyfogle v. Bookley, 16 8. & 11. 264; llayne v. Guthrie, Add. 137; ergo, until demand made, no cause of action arises, and the statute does not run. It is the remedy, not the debt, that the statute regulates : Marsteller v. Marsteller, 8 IV. N. C. 555. The authorities cited on the other side relate to commercial paper, except Laforge v. Jayne, 9 Barr 410, which was overruled in principle in Girard Bank v. Bank of Penn Township, 3 Wr. 92, and expressly ovemzled in Finkbone’s Appeal, 5 Norris 369. There are many reasons why in the case of a negotiable instrument made payable on demand the statute z’uns from its date, — among others, the necessity for some certain time at which to charge indorsers, — but where the contracting parities are alone to be affected, a contract to pay on demand is not converted by technical rales of law into one to pay immediately. Even in the case of negotiable paper payable on demand the authorities are not uniform that the statute runs from the date. The following cases are to a contrary effect: Brooks v. Mitchell, 9 Mees. & Weis. 15; Merritt v. Todd, 28 N. Y. 28; Barongh v. White, 4 Barn. & Cress. 325; Yreeland v. Hyde, 2 Hall Sup. Ct. 429 ; Byles on Bills, (ed. 1876) p. 388.
   Mr. Justice Merour

delivered the opinion of the court, March 20th 1882.

At what time is a due-bill payable on demand barred by the statute of limitations? Does the statute begin to run at its date, or not until payment is demanded ? It is a well-recognised rule of law, that the statute begins to run on a promissory note, whether negotiable or not, whenever a cause of action accrues thereon : that is, from the time the holder has a right to demand the thing claimed: Bucklin v. Ford, 5 Barb. 393; 2 Parsons on Notes & Bills 641-2. The words “on demand” in a note do not make the demand a condition precedent to a right of action.; but import the debt is due and demandable immediately, or at least that the commencement of a suit therefor is a sufficient demand: Byles on Bills *342; Taylor’s Adm’rs v. Witman’s Adm’rs, 3 Grant 138; Milne’s Appeal, decided at the- present term (post, p. 483). A promise in writing to pay a note “ at any time within six years from this date” was held a promise to pay on demand, and the statute ran from its date: Young v. Weston, 39 Maine 492. The attempt was made on the argument to subject this due-bill- to the rule applicable in case of a promise to return specific property or securities on demand, as in Finkbone’s Appeal, 5 Norris 368; and of a deposit in bank as in The Girard Bank v. The Bank of Penn Township, 3 Wright 92. The due-bill now in question does not admit the application of that rule. It reads “due William Andress, four hundred dollars, payable on demand.” It was signed by the appellant’s testator, and dated August 1st 1867. The maker died on the 16th May 1879. Thus he lived nearly twelve years after the statute began to run against the claim. The payee died in November 1870, and letters of administration on his estate were granted on the 18th January 1871. So there was a party to sue, as well as one to be sued. As, then, the due-bill was barred by the statute long before the maker thereof died, the appellants did not take nor hold any of the assets of his estate in trust for its payment. There was no evidence of any promise to pay other than that contained in the due-bill, nor of any demand for payment until it was presented at the audit, March 8th 1881. The statute of limitations was then interposed, and the learned judge erred in not disallowing the claim.

Decree reversed, the exceptions to the allowance of the claim are sustained, and it is ordered that distribution be made conformably with this opinion.


author: Mr. Justice Paxson

text:
    Ellen E. Wright’s Appeal.
    1. A., the president of a railroad company, induced B., a stockholder therein, to surrender to him her shares of stock, together with blank power’s of attorney to transfer the same, by means of certain false representations that the same were needed to aid the company. A. had no express authority to borrow tiie stock, and the corporation had sufficient funds. A. gave to B. his individual due-bill, transferred the stock, and embezzled the proceeds. Subsequently, he fraudulently combined with the other officers of the company, to issue stock in excess of the charter limit. Of this over-issued stock he awarded to B. a number of shares, equal to the number of shares of valid stock entrusted to him by her. In a proceeding in equity to determine the relative rights of B. and the company as to said last named shares, — Held, that the company was not liable for the acts of its president, A., in the above transaction ; that ho was to be considered as having acted therein as the agent of B., as much as the agent of the company ; that B., therefore, must bear the loss resulting from his embezzlement, and that the over-issued shares in her hands were invalid and valueless.
    2. Two elements among otliee-s must be present in order to constitute an estoppel in pais; the party to whom the representation is made, must have been ignorant of the truth of the matter, and have been induced to act upon if.
    3. In the above case it appeared, that after the transfer by A. of the original valid shares intrusted to him by B., the company continued to pay dividends on such shares to B. Held, that B. was chargeable with knowledge of the fact that her shares had been transferred, and that, on account of this fact, and also because it appeared that she had not been induced to act to her prejudice, or to part with anything on the strength of such dividends, the company was not estopped from denying its liability to her.
    January 24, 1882.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkev, Sterrett and Green, JJ.
    Appear from the Court of Commom Pleas No. 2, of Philadelphia, county: In Equity: Of January Term 1881, No. 112.
    Appeal of Ellen E. Wright from a decree of said court, dismissing her exceptions to tlie report of a Master in the matter of a cross-bill filed by her, in a cause wherein Sarah Swain and William M. Baugh were complainants, and the West Philadelphia Passenger liailway Company, its officers and directors and others, were the defendants.
    The original bill in equity, filed October 20th 1877, set forth that the complainants were stockholders in the West Philadelphia Passenger Railway Company; that eight thousand shares of stock of the par value of $50 each, had been issued by the said corporation, pursuant to its charter; that in the year 1869, a combination was made between the president, treasurer and secretary of the said company to issue fraudulent certificates of stock, and that, in pursuance of said conspiracy, an unknown number of certificates were issued, for which the company had received no consideration, and that its said directors were about to recognize the validity of such issue.
    The bill prayed a decree that the certificates of such over-issued stock be declared null and void, and be surrendered to the company to be canceled.
    The answer of the defendant company and its directors admitted the averments of the bill, made discovery of the names of the holders of the over-issued stock, so far as they had knowledge, and averred that the directors deemed it expedient, if the company be responsible to any holder of said over-issued stock, to treat them as holders of genuine stock.
    The railway company afterwards filed a cross-bill against the parties who had appeared by counsel (among them Ellen E. Wright, the appellant in this case), setting forth that the certificates of over-issued stock, though fraudulently issued, were in form regular, sealed with the seal of the corporation, and duly attested by the proper officers; that if any liability existed on the part of the corporation to the holders of such fraudulently issued certificates, it was either an obligation to treat them as holders of valid stock, or to compensate them to the extent of the value given by them therefor, and submitting themselves to the order of the court in the premises.
    Ellen E. Wright thereupon filed both an answer and a cross-bill, the latter averring that she owned 1722 shares of the capital stock, and held, as evidence of her title, eight certificates issued by the company in the usual form, taken out of the certificate book, and all under its seal duly attested by the genuine signatures of its president, secretary and treasurer; that the certificates for 1677 of the said shares were handed, on February 25th 1876, to her by John S. Morton, president, in lieu of other certificates for various amounts which she had previously held, a considerable number of these former certificates having been for a small number of shares ; that the company had paid her dividends on these shares to the amount of $34,220 ; that recently the corporation had refused to recognize her shares as valid on account of frauds committed upon the corporation; that the plaintiff was ignorant of any such frauds, and that her title to such shares is in no way affected thereby. The cross-bill prayed a decree that complainant is the absolute owner of the 1722 shares of stock, and that the corporation be compelled to recognize her as such.
    The case was referred to. David W. Sellers, Esq., as Examiner and Master, who reported the facts to be as follows : Ellen E. Wright, the defendant, -who is the paternal aunt of John S. Morton, delivered certificates to him in all for 1780 shares óf valid stock, taking his individual due-bill therefor, in cases in which the same have been produced, for 551 shares on February 21st 1867 ; for 443 shares on January 15th 1867, and for 511'shares on July 8th 1867. These certificates were accompanied with executed powers of attorney in blank irrevocably constituting an attorney to sell, assign, and transfer. Under these powers, 1380 shares, which are now the number in dispute, were sold and transferred to parties who are holders for value and without notice. The delivery of those certificates was explained by defendant as follows : “ The first ho [Morton] ever got, I think, he borrowed money for me on my stock, and then 1 paid oil the loan, and he asked me if he should have it for a while, and I told him yes, he should, and then he gave me securities of different kinds. At different times he borrowed from me in that way. He said he wanted to pay for the cars and for the improvements on the road. I had no idea that it was for himself; I never thought such a thing. lie would tell me all about how much he was laying out on the road, and then he would ask me for the securities. I thought it was for the road; I never thought it was for anything else.”
    The manner in which she received the present certificate was thus explained by her : — •
    lie [Morton] came to see me. N o one know that he had my securities. We were alone together, and I said that 1 would like to have my securities back, that I thought it was time. Well he says, Aunty, I will give thorn to you; you have some very small certificates ; would yon not like to have them changed? I said, no, that I would rather not have them changed, as they had my husband’s name on them, but he over-persuaded me, and I said yes, you ma,y change them, and put them in a large certificate, and so I gave them to him — 200 or 300 shares. They were all in small certificates; they were a good many of $50 each. The next morning he gave me all the certificates back.”
    The Master’s report concluded as follows :—

      “ The Master finds as a fact that this defendant delivered the certificates upon the belief that Morton would use them for the benefit of the railway company, and that this belief was confirmed by the fact that she almost always received the dividends thereon by the corporate checks up to the last time before the crime of Morton became known, and when she received individual checks she was informed that ‘ the company would be short of money.’
    “ The Master finds also as a fact that the company had not authorized Morton to borrow certificates for its use, and that its treasury was sufficient for its needs, and that the money realized in the sale of the valid shares was not applied to corporate uses.

      “ As the powers in blank for the transfer of stock are valid (Association v. Sendmeyer, 14 Wright 67), the title of Ellen E. Wright thereto was divested by the intervention of a purchaser without notice (Turnpike Co. u. Ferree, 2 O. E. Greene 117; McNeil v. Bank, 46 New York 325 ; Finney’s Appeal, 9 P. F. Smith 398), and the corporation incurred no liability by permitting the transfer: Pennsylvania Railroad Appeal, 5 Norris 81. Mrs. Wright having, therefore, authorized the sale of the valid certificates, she is bound in law as though she received the money which her attorney received, and therefore she is not a holder for value of the present certificates to the extent of 1380 shares, as she had given nothing therefor. The valid certificates for 294 shares which she gave Morton immediately before the receipt of the present certificates have" been substituted by certificates which to that extent are recognized. No loss, therefore, has accrued to her by the representation contained in the present certificate held by her.
    “ It is, however argued the embezzlement of the proceeds of sale should be borne by the company, inasmuch as the securities were obtained from her on the statement by Morton made and by her believed that the same were for the use of the company ; although the Master has found the fact to be that such statement was made and such belief existed, yet he holds that unless there was affirmative proof that Morton had authority to borrow securities for his company, his conduct in that regard is wholly outside of his agency. She was in law bound to know this, and an inquiry of an individual officer would have been unavailing.
    “Nothing- short of a by-law or resolution of the board of directors would have in law justified the loan at the risk of the corporation. There was no corporate act shown her on which she could have acted under the shield of an equitable estoppel. It is only where the act relied upon is within the usual powers of the office]1 that the abuse is at the peril of his principal: all conduct outside of his powers is individual, and creates no other right or remedy than he can individually afford.
    “ The Master, therefore, will decree formally that all of the certificates held by her be surrendered, and that the railway company issue to her a certificate for 342 shares of the valid stock of the company.”
    Exceptions to the Master’s report was filed by Mrs. Wright, but were dismissed, the Court saying: “We have been impressed with the very great hardship of Mrs Wright’s case, but think that Mr. Morton was as much her agent as that of the company, and that the burden of his fraudulent acts must be left where he placed it.”
    The following decree was entered:—

      “ That the exceptions filed by Ellen E. Wright be dismissed ; and that as to the cretificates of stock of the said West Philadelphia Passenger Railway Company, numbered 1951, 1952, 1953, 1951, 1955, 1956, 2020 and 2048, for seventeen hundred and twenty-two shares thereof, now standing in the name of Ellen E. Wright, a certain portion, viz. : three hundred and forty-two of said shares, are component parts of the capital stock of said W est Philadelphia Passenger Railway Company, and the latter upon surrender for cancellation of certificates for the like number of shares shall give a new certificate therefor ; that as to the residue, viz. : thirteen hundred and eighty of said shares, the company never received any value therefor nor authorized their issue ; that the same were procured by the said John S. Morton for the said Ellen E. Wright, acting as her agent and not as agent for the said railway company, in lieu of certain other shares previously held by her ; that the said Ellen E. Wright is not a purchaser for value of said shares,' and shall, forthwith, deliver the certificates for said shares to to the said Passenger Railway Company to be cancelled, and that she be enjoined from transferring or in any way disposing of the same, or making any claim against the said Passenger Railway Company by reason thereof.”
    Mrs. Ellen E. Wright thereupon took this appeal, assigning for error the above decree.

      Sarrmel O. Perkins, and George Junkin, for the appellant. —
    -Morton, the president of the corporation, in borrowing the appellant’s stock expressly for the purposes of the corporation, was acting within the scope of his powers as agent of the corporation. A corporation has, in matters of agency, the same liberty of action as belongs to a natural person capable of business. It is bound by the parol contracts of its duly constituted agents, just as individuals are bound. And it is not necessary that there should be the seal of corporation in order to evidence the power to act. Nor need the party dealing with such officer require a resolution of the board of directors, or a by-law: Wharton on Agency, §§ 59, 670, 671. The corporation is liable for a loan to a president of a corporation, when the lender is induced by the representation of the president to believe that the transaction is with the corporation and for a purpose within the scope of its business, even though he had no authority to make such representation : Central Bank v. Empire Co., 26 Barb. (N. Y.) 23; Mitchell v. Deeds, 49 111. 416; Dougherty v. Hunter, 4 P. F. Smith 380. The master found that for a series of years, the directors of the corpoi’ation intrusted all the financial matters of the company to Morton, including the borrowing of money. In such case, the corporation is bound as if authority to borrow had been expressly conferred : Phillips v. Campbell, 43 N. Y. 271. No inquiry by Mrs. Wright would have informed her of the want of Morton’s authority, for the treasurer and secretary, to whom she would have been referred, were co-conspirators with Morton.
    But the company are estopped from denying the validity of the certificates by the fact that for years after the fraudulent over-issue, the company paid her numerous dividends on such over-issued stock held by her by their own regularly drawn checks. The company tlius ratified Morton’s original borrowing and the subsequent issue of certificates to her, and lulled her to security, by their continuing affirmation that she was lawfully entitled to the stock evidenced by her certificates. It is not necessary that Mrs. Wright, to claim the benefit of the equitable estoppel, should have acted affirmatively upon it. It is enough that she was deprived of the opportunity to retrieve her position: Knights v. WifEen, Law Eep. 5 Q. B. 660; Bassett v. Holbrook, 24 Conn. 453; Cocks v. Masterman, 9 Barn. & Cress. 902; Bidwell v. Pittsburgh, 4 Norris 412; Farmers’ and Mechanics’ Bank v. Bank, 16 N. Y. 125 ; N. Y. & N. II. Eailroad Co v. Schuyler, 34 N. Y. 30; Willis v. Darby E. E. Co., 6 W. N. C. 461; Bank of Kentucky <v. Schuylkill Bank, 1 Pars. Eq. Oases 180; Blair v. Wait, 69 N. Y. 113.

      Joseph B. Bhoads and John G. Johnson, for the appellees.
    —The master found as a fact that Morton was Mrs. Wright’s agpnt, and that the company had not authorized him to borrow hdr certificates for its use. This is not the case of an implied power to an officer of a corporation to borrow money. Morton borrowed Mrs. Wright’s railway stock as he borrowed United States bonds and other securities, giving his individual due-bill therefor. This was entirely out of the ordinary course of business of the corporation, and the case falls within the rale laid down in Bank of Kentucky v. Schuylkill Bank, 1 Pars. Eq. Cases 248, and Penna. E. E. Co.’s Appeal, 5 Norris 80.
    There was no estoppel, because the appellant did not act or in any way alter her position by reason of the supposed admission by the company of the validity of the stock by the payment of dividends thereon, nor was she misled to her injury : Bigelow on Estoppel (2 ed.) 437; ITelser v. McGrath, 2 P. F. Smith 534; Musser v. Oliver, 9 Harris 362; Dewey v. Field, 4 Mete. 381.
   Mr. Justice Paxson

delivered the opinion of the court, February 27th 1882.

The amount involved in this case is large, and it is apparent that a heavy loss must fall upon one of two innocent parties. Both appear to have reposed blind confidence in John S. Morton, who is the central figure in the unpleasant story of speculation and dishonor which this record unfolds.

The learned counsel for the respective parties have furnished us with able and exhaustive arguments upon the points presented, and we have no difficulty in arriving at our conclusions upon the law of the case.

The assignments of error raise but two questions: 1st, was Morton the agent of the company or of the appellant ? and, 2d, are the company estopped from denying the validity of the shares for which the fraudulent certificates were given to appellant %

The learned court below, while recognizing the great and admitted hardship of the appellant’s case, held, nevertheless, that “ Mr. Morton was as much her agent as that of the company, and that the burden of his fraudulent acts must bo left where he placed it.”

This view was quite as favorable to the appellant as she had a right to expect. Morton was undoubtedly her agent. The learned .Master finds and reports as a fact, that she delivered to Morton 1780 shares of valid stock, taking his individual due-bill therefor. These certificates with executed powers of attorney in blank irrevocably constituted an attorney to sell, assign and transfer the same. Under these powers, 1380 shares, the number in dispute, were sold and transferred to parties who are holders for value and without notice. It is, therefore, too clear for argument that as to the shares thus sold, Morton was her agent and attorney expressly authorized in writing under seal, to sell or pledge the stock. And having sold it, he was liable to account to her for the proceeds. But it is said he borrowed the stock for the company of which he was the president, and that he was the agent of the company for that purpose. Upon this subject the master finds “ that the company had not authorized' Morton to borrow certificates for its use, and that its treasury was sufficient for its needs, and that the money realized in the sale of the valid shares was not' applied to corporate uses.” It was not alleged that this finding of fact was not correct. Indeed it was not attempted to be shown that .Morton had any express authority from the company to borrow the appellant’s stock, or that one dollar of the proceeds thereof had ever gone into its treasury. It was contended, however, that he possessed such implied power; that, from either the assent or the supineness of the directors, he had, as president of the corporation, drawn unto himself all of its powers, and directed all of its affairs without control or restraint from any one. There is no doubt that in the management of the business of the corporation, Mr. Morton was permitted to exercise large powers. It is also true that the powers of a president to bind his company are broad, and such powers may be implied, like those of any other agent, from a known course of dealing. Thus it has been repeatedly held that if a- corporation permits its agent to exceed his powers from time to time, and subsequently ratifies his acts, it cannot afterwards set up such excess of authority as against a person who has been deceived by it. This principle is so familiar that a reference to the cases is unnecessai’y. No such course of dealing existed in this case. There is no evidence that Mr. Morton ever borrowed a dollar for the company. He did not even borrow the appellant’s stock for the company. He borrowed it for himself, and gave his individual note therefor, with his own securities as collateral. It is true, as the Master finds, he told the appellant that he intended to use the money for the company, but this naked falsehood did not alter the legal effect of the transaction, however much the appellant may have been deceived and misled by it. Had this, in fact, been a loan for the corporation, though unauthorized, and had the money gone into its treasury, we would have had an entirely different question before us.

The implied powers of the president or agent of a corporation, must be considered in connection with the usual and legitimate business of such corporation. Had Mr. Morton made a contract for the lease of an office, as in Steamboat Company v. McCutcheon, 1 Harris 13, or to purchase horses, cars or material needed for the purposes of its business, it might have been binding upon the corporation because it would have been among the implied powers of its president. So far the cases go; but I know of no authority which holds that where he borrows money for himself upon his own note he can bind the corporation therefor by falsely representing that he wants the money for his company. The authorities are the other way. It is sufficient to cite Angelí & Ames on Corporations §§ 220 to 297; Martin v. Great Falls Manufacturing Co., 9 N. H. 451.

This brings us to the second branch of the case. Was the company estopped? The appellant contends that because the dividends continued to be paid upon her stock, it was a recognition by the company of her ownership of it.

This may be disposed of in a few words. The case lacks the essential elements of an estoppel. A party is not estopped or concluded by his own admissions unless another person has been induced by them to alter his condition: Heane v. Rogers, 9 B. & C. 577; Newton v. Liddiard, 12 Q. B. 925. In Bigelow on Estoppel, p. 437, it is laid down that the following elements among others must be present, in order to work an etoppel: 1. The party to whom the representation was made must have been ignorant of the truth of the matter; and, 2. The other party must have been induced to act upon it. Both these essential elements are lacking in this case. The appellant to whom the dividends were made is chargeable with knowledge of the fact that Morton, her agent and attorney, had transferred the stock. And secondly, there is no evidence that the appellant was induced to act on account of the dividends. She parted with nothing on the strength of them. Her stock was gone, hopelessly gone, in the ruin which overtook John S. Morton. There is no evidence that her condition was in any way changed by the receipt of the dividends. If changed at all, it was for the better by just their amount.

Aside from this, until the discovery of Morton’s frauds the appellant was entitled to the dividends. The stock was pledged, not sold. In such case the dividends are paid to the pledgor. This is the case, even if the pledgee has had the stock transferred into his own name. He collects the dividends and pays them to the pledgor. Morton from time to time received orders for the dividends from the pledgees, and when presented to the company the latter was in duty bound .to pay them to the appellant. It will be observed there was no double payment — to the appellant and to the pledgees.

It does not help the case of the appellant, that Morton subsequently gave her certificates of stock signed by the proper officers and attested by the seal o± the company, for those he had borrowed and converted to his own use. Such new certificates were a fraudulent over-issue, and the result of an unlawful and criminal conspiracy between Morton and the other officers concerned therein. The appellant gave the company no value for them. The case is one of clear embezzlement on the part of Morton; and much as we regret the loss it will entail upon the appellant, we see nothing that would justify us in throwing the consequences of her misplaced confidence upon the appellees. The cases of Association v. Sendmeyer, 14 Wright 67; Finney’s Appeal, 9 P. F. S. 398; and Pennsylvania Railroad Company’s Appeal, 5 Norris 102, show where the loss should fall in such a-case as this.

The decree is affirmed, and the appeal dismissed at the costs of the appellant.


author: Mr. Justice Gordon

text:
    Vinton’s Appeal.
    1. Where a corporation sells part of its original franchise and property, and distributes the proceeds of the same, as a dividend, among its stockholders, said dividend will be regarded, as between a life-tenant and remainderman of part of the stock, as capital and not as income.
    2. The St. L. Gas Company was incorporated with an exclusive right to supply gas to the city of St. L. The owner of certain shares of stock in said company transferred the same to a trustee in trust to pay over all issues, profits and dividends accruing therefrom to A. for life, and at her death to transfer said shares to B. Some years after, the said company became involved in litigation with another gas company as to its exclusive right to supply the' city of St. L. with gas. It finally compromised this litigation by transferring to said other company the exclusive right to supply a certain part of the city of St. L. with gas, and also all its pipes, mains, etc., in said portion of said city. Said pipes, mains, etc., had been originally paid for, partly from the capital stock, and partly from the earnings of the company. In consideration of said transfer the St. L. Gas Co. received the sum of $650,000, which its directors proceeded to distribute in the shape of a dividend to its stockholders. Ztdd, that the amount received by the trustee for A. andB. on account of the said dividend belonged to the capital of the trust estate, and should not be distributed as income to the life-tenant.
    8. The rule laid down in Minot®. Paine, 99 Mass. 101, — that cash dividends are to be regarded as income, and stock dividends as capital,— disapproved.
    January 24th 1882.
    Before Siiarswood, O. J., Merour, Gordon, Paxson, Trunkey, Sterrett, and Green, JJ.
    Appeal from the Court of Common Pleas No. 3, of Philadelphia county : Of January Term 1881, No. 254.
    Appeal by Mrs. Sarah Yinton from a decree of said court dismissing her exceptions to the report of an auditor appointed to audit, settle and adjust the account of the Pennsylvania Company for Insurance on Lives, &c., trustees for said Sarah Vinton, under a certain deed of trust, and confirming the report.
    The facts were as follows ; — By indenture dated May 19th 1856, James Martin assigned and transferred to the Pennsylvania Company for Insurance, &c., one hundred shares of the capital stock of the St. Louis Gas-Light Company, then standing in the name of the said James Martin as trustee for Mrs. Sarah Vinton, in trust, “ to receive all issues, dividends and profits accruing therefrom, and to pay over the same to Sarah Vinton during her natural life, to and for her sole and separate use,” &c., and “ at the death of said Sarah Vinton, to transfer said stock to Frederick Vinton, or his legal representatives.”
    Dividends were received from time to time, on said stock, by the trustees and by them paid over to Mrs. Vinton. On May 23d 1873, tlie, trustees received from the company a cash dividend of $4,995 which they paid over to Mrs. Vinton.
    Before the auditor of the trustee’s account, counsel for Frederick Vinton objected to the credit claimed in the account for such payment, on the ground that the so-called dividend of $1,995 was capita] and not income. The facts as shown before the auditor were these :—
    The St. Louis Gas-Light Company was incorporated by Act of the General Assembly of Missouri, approved February 4th 1837, to manufacture and sell gas in the city of St. Louis and vicinity. Section 23 of said act vested in the company the “ sole and exclusive privilege of vending gas-lights and gas fittings in the city of St, Louis and its suburbs to such persons or bodies corporate as may voluntarily choose to contract for the same.” Section 24 authorized the company “ to lay pipes, conduits, &e., in any of the roads or avenues of the subui'bs, and in any of the streets or alleys of the city of St. Louis.” The company was also authorized to contract with the city of St. Louis for the lighting of the city with gas.
    By an indenture dated January 8th 1841, and a supplement dated January 9th 1846, the company made a contract with the city corporation to light the city with gas; and the city corporation undertook to grant and confirm to the company “ tlie sole and exclusive privilege of lighting the streets, alleys, wharves, public buildings, and other public places of St. Louis, and of providing and furnishing the fittings and materials of all kind necessary.”
    Owing to the large growth of the city of St. Louis, its corporate limits were from time to time extended, so as to include what were formerly suburbs.
    Subsequently, on March 7th 1857, the Laclede Gas-Light Company was incorporated by the General Assembly of Missonri, with power to make, manufacture and vend gas “ with in all that portion of the limits of the city of St. Louis not embraced within the corporate limits of said city, as established by the Act of February 8th 1839,” and to lay dowir mains, pipes, &c., for that purpose, “ and to have the sole and exclusive privilege and right of lighting the same.”
    Meanwhile, difficulties arose between the St. Louis GasLight Company and the city of St. Louis as to the contracts of 1841 and 1846, the latter refusing to pay for the gas under the contracts, and claiming that it was an illegal contract.
    The Laclede Company began to construct its works, and to lay down its mains in the portion of the present city as authorized by its charter, and claiming that it had the exclusive right, under its charter, so to do, and denying the exclusive rights claimed by the St. Louis Gas Company.

      The result of these rival claims was litigation.
    Finally, in 1873, a compromise was effected, which was consummated by a tripartite agreement executed by the city of St. Louis, the St. Louis Gas Company, and the Laclede Gas Company, dated February 28th 1873, whereby the St. Louis Gas Company “ waives, abandons and forever surrenders to the city of St. Louis, irrevocably, any and all claims and pretence of claims of exclusive right to have gas works, lay or have pipes or other appliances, vend or furnish gas, or do business as a gas company,” in a certain part of the city of St. Louis; and covenanted with the city and the Laclede Company, that it would not, within said district assert any claim or right to hinder or prevent any one from making gas, laying down pipes, &c., in that district. The Laclede Company, in like manner, abandoned any exclusive right and claim or pretence of claim of sole and exclusive privilege of lighting, making gas, &c., in any part of the city. '
    ' It was then agreed between them, that the Laclede Company should furnish gas to the district north of the southern line of Washington avenue, being more than one-third of the whole city territory, and the St. Louis Company should occupy the rest of the city, and furnish the gas there.
    The city agreed to [ray, within two years, the overdue gas-bills to the St. Louis Gas-Light Co., which amounted to nearly $600,000.
    In consideration of this contract the Laclede Gas-Light Company agreed to pay the St. Louis Gas-Light Company $650,000; and the St. Louis Gas-Light Company sold and delivered to the Laclede Gas-Light Company, all its mains, pipes, connections, lamps, lamp-posts, brackets, meters and all other of its property and effects which are situated and being within all that portion of the city of St. Louis north of the southern line of Washington avenue.
    The said pipes and other property of the St. Louis GasLight Company within the territory above mentioned, were originally paid for by the St. Louis Gas-Light Company, partly from the capital stock of the company, and partly out of the earnings of the company.
    On the first day of March, 1873, the Laclede Gas-Light Company executed their note for $650,000, the amount to be paid to the St. Louis Gas-Light Company for said property and priyileges, payable on or before the first of May, 1873.
    At a meeting of the directors of the St. Louis Gas-Light Company, held April 23d 1873, the following resolution was adopted: Ordered, that if the money to be paid “ by the Laclede Gas-Light Company, shall be paid by the 3rd or 5th of May next, the president and secretary are directed to have a dividend of $600,000 entered on the books of the company, and to cause private circulars to be sent to the respective stockholders informing them of the amount of dividend then standing to their credit, and to pay the same on demand.”
    Accordingly, after the payment of the said note by the Laclede Gas-Light Company, $50 per share was paid in accordance, with the above resolution, and the accountants received the sum of $4,995, being the amount awarded to the 100 shares of stock of the St. Louis Gas-Light Company held in trust by them of the $600,000, received by the last named company of the Laclede Gas-Light Company.
    It wras in evidence before the auditor that the stock of the St. Louis Gas-Light Company sold at $156 per share, six months before the $600,000 dividend was declared, and that on June 30th 1873, being about a month and a half after the said dividend was paid, the stock sold for $170 per share.
    There was no evidence to show what was the intrinsic value of the stock, by the company’s books, before and after the said dividend was declared.
    This dividend of $4,995, of May 13th 1873, differed from ordinary dividends in this : the former was a division of the proceeds of a sale of pipes, lamps, lamp-posts, brackets, meters, &c., and the privilege of lighting the district of the city named in the tripartite contract, while the latter were declared out of the earnings of the company for every six months. In declaring dividends of the latter character the usual form of the resolutions of the hoard was as follows: “Resolved, that a dividend of $6.00 a share be declared out of the earnings of the company for the last six months ending November 30th payable oil and after tlie fifteenth day of December next.”
    The auditor reported that, in his opinion, the said dividend of $4,995 is a portion of the corpus of the trust estate, and not “ issues, profits and dividends accruing from said stock ” within the meaning of the provisions of the deed of trust; and that said trustees are required to retain the said sum as principal, invest the same according to law, paying the income received therefrom to Sarah Yinton during her life, and after her death to Frederick Yinton or his legal representatives. The auditor therefore surcharged the accountants with the said sum of $4,995.
    Exceptions filed by Mrs. Sarah Yinton to the auditor’s finding were dismissed by the court, Finletter, J., filing the following opinion:—
    “ The St. Louis Gas Company sold their claim to the exclusive right to furnish gas to about one-lialf of the city of St. Louis, together with the pipes, lamps, &c., for supplying the gas, for $650,000; which sum they divided among their stockholders as a dividend. Was this dividend profits or capital? The company sold a part of their franchise, a part of their business, and a part of the machinery necessary to carry on that business,' and make the franchise available and valuable.
    “ The capital of a company is not merely the value of the shares. Everything which is necessary to carry into effect the purposes of the company is capital. Even when profits assume this character they become capital, and cannot be treated as profits, nor can they cease to be capital. Capital is necessarily a homogeneous whole. If this were not so, it might be converted piecemeal into profits or something else, and be extinguished.
    “In a gas company, surely, the right to sujaply gas, and the pipes and lamps by which it is supplied, must be regarded as capital, as much as the budding in which the gas is manufactured. Even if it were shown that the whole $650,000 were paid alone for the pipes and lamps, and that they were purchased by the profits, their character as capital is not changed. When profits are used to extend enterprises of this kind, they become capital as much as when they are used to purchase raw material. The fund in controversy was, therefore, properly distributed by the Master as capital.
    “ The exceptions are dismissed, and the report confirmed.”
    Mrs. Sarah Yinton thereupon took this appeal, assigning for error the decree dismissing her exceptions and confirming the auditor’s report.

      George Jvmkin, for the appellant. —
    The dividend in question was income and not capital of the trust estate, for several reasons. There is nothing to show that it represented the proceeds of the sale of the franchise, pipes, mains, &c., to the Laclede Company, any more than it represented the accumulated income due by the corporation of St. Louis for lighting the streets, which amounted to about $600,000, and which, by the agreement, the city was to pay within two years. The payment by the Laclede Co. enabled the St. Louis Co. to distribute this amount at once. The auditor inferred that it represented the former, and that it was the proceeds of a sale of a part of the franchise and capital, viz : the exclusive right to sell gas within a portion of the city. The company had no such monopoly to sell, for no legislative body has power to grant such monopoly by charter; but if they had such a monopoly, they did not, by the tripartite agreement, sell it to the Laclede Co., but surrendered it to the city of St. Louis. By the same agreement, the Laclede Co. abandoned its claim to an exclusive right as to the whole city. The company did sell to the Laclede Co. all its mains, pipes, lamps, meters, &e., in a certain portion of the city, which mains, &c., were paid for, partly at least,, out of income. The auditor and court below fell into error in supposing that income once capitalized could never he again treated as income. On the contrary, when it is no longer required as capital, the company may, provided they do not impair the original capital, and do not injure creditors, again treat it as income, sell it, and again distribute the proceeds as a dividend. In this case, the capital of the company was not impaired; on the contrary] its market-value increased after the transaction. The earnings of a corporation are capital until divided. A dividend is that amount of. capital which is officially declared to be unnecessary to the carrying on of its business. It may be that the wisest as well as the simplest rule is that adopted in Massachusetts, viz : to regard cash dividends, however large, as income ; and atóele dividends, however made, as capital: Minot v. Paine, 99 Mass. 101; Daland v. Williams, 101 Mass. 571; in He Hopkins’s Trust, Law Pep. 18 Eq. 697. In case of an attempt by the corporation to divide corpus, the remedy of the remainder-man would be in equity, to restrain such illegal action. It should not be the duty of a trustee on receipt of any dividend, to ascertain at his peril whether it was declared out of earnings or capital of the corporation. In most eases, this would be impossible. Under tlie Pennsylvania rule, as established in Earp’s Appeal, 4 Casey 368; Wiltbank’s Appeal, 14 P. F. Smith 256 ; and Moss’s Appeal, 2 Nor. 264, it is only his duty to ascertain whether the corpus of the trust estate, as it existed at the creation of the trust, is impaired by the dividend. And we have shown in this case that it was not.

      J. G. Johnson and Jidward Shippen, for the appellees. —
    At the time this trust Avas created the stock assigned in trust had a certain earning power, based on the property possessed by the corporation, and the monopoly claimed by it. Whether this monopoly was a laAvful or an unlawful one is immaterial, as the state alone could impeach it if unlaAvful. The voluntary abandonment and sale of one-half of this earning poAver, was the real consideration for the $650,000; the sale of the pipes, &c. Avas hut an incident. It cannot be that the portion of this fund belonging to the trust estate goes to the life-tenant as income, because if the corporation should sell the remaining half of its earning power that would, on the same principle, go to the life-tenant, and there avoaaM he nothing left for the remainder-man. The right of directors of a corporation to declare a dividend, whether out of capital or income, does not affect the respective rights of a life-tenant and a remainder-man in respect thereto. It is impossible to ascertain how much, if any, of the earnings of the company since the creation of the trust, are represented in this dividend, and the only safe rule is to treat it all as representing capital unless it is clearly shown to the contrary.
   Mr. Justice Gordon

delivered the opinion of the Court, February 20th 1882.

The court below having ascertained, beyond doubt, that the money in controversy was derived, not from the annual earnings or accumulations of the St. Louis Gas Company, but from a sale of part of its franchise and permanent property, thought it ought, of right, to belong to the corpus of the trust estate, and thereupon refused to award it to the life-tenant. If we are to follow our own decisions as found in Earp’s Ap., 4 Ca. 368; The Pennsylvania Co. v. Dovey, 14 P. F. S. 260; Moss’s Ap., 2 Nor. 264, and Biddle’s Ap. [ante, 278], the opinion in which was delivered by Mr. Justice Merour, but a few days ago, we must affirm this conclusion. All these cases are similar to the one in hand; a gift of the income of stocks for life to one person, and the corpus over to another, and by all these we are instructed that in order to ascertain and settle the rights of these parties, we must endeavor to discover what is principal, or capital, as distinguished from earnings or dividends resulting from the use of capital.

More than this: following these authorities, we must go even farther, and capitalize, in favor of the remainder-man, the surplus profits which may have accumulated in the treasury of the corporation, prior to the date of the creation, of the trust. The present case, however, does not carry us to this extent, for the money in eonti’oversy comes from a sale of a part of the original franchise and property of the gas company ; in fact, part of the very corpus represented by the stock shares which form the principal of the trust created by the deed of James Martin.

The charter of this company clothed it with powers and privileges, not only very extensive, but very valuable. By this charter it had “ the sole and exclusive privilege of vending gas lights and gas fittings in the city of St. Louis and its suburbs,” and it was also empowered to “ lay pipes, conduits, etc., in any of the roads and avenues of the suburbs, and in any of the streets and alleys of the city.” Also, by indenture of the 8th of January 1841, between the city and the company, the sole and exclusive privilege of lighting the streets, alleys, wharfs, public buildings and other public places of the city of St. Louis, and of providing and furnishing the fittings and materials of all kinds, necessary for that purpose. The result of these grants, and a careful use of them, was great prosperity to the company, and a corresponding rise in its stock. But this very prosperity begat opposition and danger. The city refused to abide by its contract, and to pay up its dues. Another company sprang up, the Laclede, which’ disputed the exclusive right of the old company to the territory mentioned in its charter. This led to the tripartite agreement of February 8th 1873, between the city of St. Louis, the Laclede Gas Company, and the St. Louis Gas Company, by which, among other things, the latter company agreed to withdraw from about one-third or ono-half of its former territory in favor of the Laclede, and also to sell to it all its mains, pipes, connections, lamps, lamp-posts, brackets, meters and all other of its property and effects situated and being within the territory from which it had agreed to withdraw.

In consideration of this sale and transfer, the Laclede Company agreed to pay to the St. Louis Company the sum of $650,-000. A dividend of $600,000, of this money, was ordered by the directors, and of this, $4,995 came into the hands of the Pennsylvania Co. as trustee of the one hundred shares of stock conveyed to it by the deed, or power of attorney, of James Martin. It is thus manifest that the money in dispute comes, not from the annual earnings of the company, but from a sale of part of its property; part of that very corpus which the stock shares represent, and without which those shares have neither substance nor value. If, therefore, the life-tenant is entitled to this money, thus derived from the capital of this corporation, so, in the end, may she come to be entitled to the whole corpus of the trust. For the accomplishment of this result, it is only necessary that the St. Louis Gas Company should effect a sale of the balance of its property, and order a distribution of the money so raised among its shareholders. But, logically, the effect of such a doctrine is to defeat the whole object of tbe trust. Instead of securing for Mrs. Vinton a sure income for life, it gives her the principal to use at her pleasure, whilst the gift over to Frederick Vinton is wholly defeated.

A rule, such as this, which may operate disastrously on a large and important class of our trusts, we cannot agree to adopt. It is, indeed, true, as said by Mr. Chief Justice Chapman, in Minot v. Paine, 99 Mass. 101, that the rule, which regards cash dividends, however large, as income, and stock dividends, however made, as capital, is a very simple and convenient one, and may relievo trustees and courts of much trouble, but it is certainly not one that commends itself for its justice and equity, neither does it at all regard the facts of a case like that of Earp’s Appeal, or like the case in hand. To us, it seems like a bungling rule of law that, at one time, would give what is indisputably income to the remainder-man, and, at another, what is as clearly capital to the life-tenant. It is, however, enough for us that our own authorities repudiate such a rule. In the ease last referred to, it was held, that dividends from a corporate surplus fund, accumulated before the testator’s death, must be regarded as part of the stock forming the trust fund, whilst after accumulations, though distributed in the shape of stock, must be treated as income, and go to the life-tenant. In like manner it was held, in Wiltbank’s Appeal, that the earnings, or profits, of the stock of a decedent, made after his death, were income, though put into the form of capital by the issue of new stock, and it was there said, that equity, seeking the substance of things, found that the new stock was but a product, and was, therefore, income.” So may we say in this case; equity seeking, not mere convenience, but the substance of things, finds the dividend, in controversy, to be part of the actual capital of the company; .money raised by a sale of part of its original franchise and realty; •that which its stock most specifically and directly represents, hence, it awards the product to him in whom the stock is finally to vest. Assume the contrary doctrine, and that which we have already pointed out may at any time occur; on a sale of the entire franchise and property of the gas company, with a like order by its directors for a distribution of the money so raised, the dividends must go, regardless of the equities of the parties, to the life-tenant, and nothing whatever be left for the remainder-man. This might be very convenient for trustees and courts, for, as it would definitely close out the trust, there would be no further trouble about it; nevertheless, the justice of such a disposition of the trust would be more than doubtful. Again, this same doctrine which makes a cash dividend income, and a stock dividend capital, would often work with equal harshness upon the interest of the life-tenant. Eor corporate earnings might be retained for an indefinite length of time, and then be distributed in the shape of stock shares, which the rule contended for would at once pronounce to be capital, and thus would the beneficiary be deprived of his or her income.

Than this, far better is our Pennsylvania doctrine, admirably stated by our brother, Mr. Justice Paxson, in Moss’s Appeal, as follows: — “ .But .where a corporation, having actually made profits, proceeds to distribute such profits amongst the stockholders, the tenant for life would be entitled to receive them, and this without regard to the form of the transaction. Equity which disregards the form and grasps the substance, would award the thing distributed, whether stock or moneys, to whomsoever was entitled to the profits.”

Decree affirmed, with costs.

Shxrswood, C. J., and Paxson and Trunkbt, JJ., dissented.