author: Sterrett, J.

text:
    May Term, 1881,
    No. 172.
    May 19th, 20th, 1881.
    Commonwealth versus The Texas and Pacific Railway Co.
    1. The sixteenth section of the act of June 7th, 1879, provides that “no foreign corporation, except foreign insurance companies, which does not invest and use its capital in this Commonwealth, shall have an office or offices in this Commonwealth for the use of its officers, stockholders, agents, or emploj-és, unless it shall first have obtained from the auditor-general an annual license so to do; and for said license every such corporation shall pay into the State treasury for the use of the Commonwealth, annually, one-fourth of a mill on each dollar of capital stock which said company is authorized to have. . . . Provided, That no license shall be necessary for any corporation paying a tax under any previous section of this act, or whose capital stock, or a majority thereof, is owned or controlled by a corporation of this State which does pay a tax under any previous section of this act.” Held, That this section does not apply to a corporation created by the Congress of the United States.
    2. A corporation created by the government of the United States cannot, with propriety, be called a foreign corporation.
    3. The words of the proviso, “ capital stock, or a majority thereof,” refer to the actual capital of the company, and not to the authorized or nominal capital.
    4. Where, therefore, a corporation was authorized by its charter to issue stock to the amount of §50,000,000, but the amount actually issued was only §7,902,500, and all of this, with the exception of a few shares, was owned or controlled by a corporation created by the State of Pennsylvania, and having its capital and transacting its business therein, which latter corporation had paid a tax under a preceding section of the act, the said first-mentioned corporation, assuming it to be a foreign corporation, is not required to obtain a license in order to have an office within the Commonwealth.
    Error to the Court of Common Pleas of Dauphin County.

    The auditor-general and State treasurer of Pennsylvania, on the 21st of October, 1880, settled an account against the Texas and Pacific Railroad Company, for office license, under section sixteen of the act of June 7th, 1879, upon the authorized capital stock of the company, which is $50,000,000. The tax amounted to $12,500, with interest from October 2lst, 1880. The defendant appealed, filing specifications t.o the effect that,
    1. The defendant is not a. foreign corporation, and not subject to the provisions of the said act.
    2. If the said section requires a license to be obtained by the defendant, it is in conflict with the act of Congress incorporating the defendant corporation and its supplements and the Constitution of the United States, and is void.
    8. The settlement charges the company with a license fee upon $50,000,000, whereas the capital stock is only $8,658,-500.
    4. The act of Assembly is in conflict with the Constitution of the State of Pennsylvania.
    5. A majority of the capital stock of the defendant was, during the whole period covered by said settlement, owned or controlled by a corporation of the State of Pennsylvania paying a tax under the fourth section of the said act.
    The case was tried under an agreement of counsel, which admitted as facts that the defendant is not a corporation created by the State of Pennsylvania, but is a corporation lawfully created and chartered by the Congress of the United States; that the said company does not invest and use its capital in this Commonwealth, except in the purchase of rails and other railroad material and supplies, but that the railway of the said company, so far as constructed, is within the States of Louisiana and Texas, and when completed is to extend thence westward to the Pacific coast; and that the said company did, during the year ending July 1st, 1880, have and maintain an office at No. 275 South Fourth Street in the city of Philadelphia, for the use of its officers, stockholders, agents, and employes, and that it did not obtain from the auditor-general of Pennsylvania any license to have and maintain said office.
    The evidence showed that the defendant company was incorporated by act of Congress, approved May 2d, 1872. Its authorized capital stock was $50,000,000, of which it had issued$7,902,500. Ofthislatteramountallexceptafewshares were held by the California and Texas Railway Construction Company, a corporation created by the State of Pennsylvania, and having its capital and transacting its business therein. This company had a capital stock of $8,221,250, valued in the tax returns at $100,000, on which it paid a tax into the treasury, of the State.
    The Court below, Pearson, P. J., found in favor of the defendant, filing the following opinion, which, after stating the facts, proceeded:
    “ This case presents two prominent points. First. Is the defendant a foreign corporation ? To constitute it such it must be set up or created by a foreign government. This corporation is created by the United States. Is that a foreign government to the State of Pennsylvania? It is not a sovereignty outside of Pennsylvania, but within it, spreading all over it, — a superior government embracing it, — the citizens of the United States constituting citizens of Pennsylvania, and the citizens of Pennsylvania being citizens of the United States; the laws of the United States governing and controlling Pennsylvania; the same courts having jurisdiction over each, dispensing justice alike for each. The neighboring States have no such authority within this State, nor over them.- If the legislature intended to exclude the United States from having power to create corporations within Pennsylvania, it certainly did not use very apt words to express the intention in speaking of foreign aorporalions. It is as much a domestic corporation as if created by a law of this State. It emanates from a power within this State. No permission would have to be asked by the government of the United States to take possession of any part of our soil required for a public purpose within the State, as for a fort, a post-office, or a custom-house. Each year is proving more and more that the jurisdiction of the courts created by the laws of both governments are concurrent, — they run together. There are not many decisions of the courts of superior jurisdiction showing that the United States is not a foreign sovereignty to the State of Pennsylvania, but the same sovereignty, but there are a few to be found. In Claflin v. Houseman, assignee, 3 Otto, 136, Bradley, J., says: ‘The United States is not a foreign sovereignty as regards the several States, but is a concurrent and, within its jurisdiction, paramount sovereignty. Every citizen of a State is a subject of two distinct sovereignties, having concurrent jurisdiction in the State.’ In Ordway v. The Central National Bank of Baltimore, Alvey, J., announces a similar doctrine. He says, at page 566 of Thompson’s National Bank Cases: ‘The laws of the United States are laws in the several States, and just as much binding on the citizens and courts thereof as the State laws are. The United States, is not a foreign sovereignty as regards the several States, but it is a concurrent and, within its jurisdiction, a paramount sovereignty. Every citizen of a State is a subject of two distinct sovereignties, having concurrent jurisdiction in the State, — concurrent as to place or person, though distinct as to subject-matter.’ Again, he says: ‘ The two jurisdictions are not foreign to each other, nor to be treated by each other as such, but as courts of the same country.’
    <■ There is no doubt of the power of the State to impose a tax on the corporation created and placed in its midst by the United States, unless for national purposes, but it must clearly describe it as it is, and exclude or tax it in express -words, not as a foreign corporation. The United States could also force it on the State, but must do it by apt words and for good and proper reasons, showing or averring the necesshy.
    “ Second. The evidence shows that a connection was formed between the Texas and Pacific Railway Company and the ‘ California and Texas Railway Construction Company ’ to carry on the work. This, as found, was a corporation created by and existing in Pennsylvania, and subject to taxation under her laws. This company had a nominal capital of $10,000,000, one subscribed of $8,221,250, and actually paid in of $7,902,500, all of which, so far as we can collect, was expended in building the Texas and Pacific Railway. Yet its capital stock was owned and controlled by a corporation of this State, and pays a tax into its treasury under this act. By the end of the year 1880 its stock was reduced to $100,000, on which it paid tax that year, yet probably during the year 1879 it held a much larger capital. Its stock was actually taxed and paid to the amount of $29,935, as per receipt. The question is, does that exonerate the defendant company ? It is very probable that the construction company would have been taxed to a much larger amount under our laws. Its tax, from 1874 down to 1879', would have been much higher, but that is not an important point. This was not a settlement for taxes on the capital stock of the construction company,’ but for a license tax against the Texas and Pacific Company. If that company was not subject to such a tax this amount as settled cannot be sustained. The evidence clearly shows that it was connected with a Pennsylvania corporation, which was subject to taxation ; therefore, by the very terms of the act, the Texas and Pacific Company could not be called on to pay a license tax. Such appear to be the words of the act, apparently introduced for the express purpose of exonerating this company. So far as we can see this charge of tax is illegal.
    “ Here our action might stop, as we can predicate nothing on the objection that the act of Assembly, on which the tax is founded, is in conflict with the Constitution of Pennsylvania. In what particular do they conflict ? The act of 1811 requires that the person appealing shall in his appeal .specify the particular in which he objects. There is no specification of objections here. Merely saying that the statute is in conflict with the Constitution is too general; it cannot be called a specification. It should certainly be sufficiently minute to direct the public officers to the objection. "We ■cannot tell whether the objection is to the title, or the subject-matter of the tax, because it is not uniform or imposed on improper objects. This Court can never travel out of the specifications ; is confined to them.
    “ Much unnecessary matter was introduced into the evidence. It was wholly unimportant whether this company purchased $1000 or $5,000,000 worth of materials manufactured in Pennsylvania. It might be a good argument to' address to the legislature to prevent the imposition of the tax, but can have no weight with the Court; is more a waste of time and labor.
    “ For reasons already given we are of the opinion that this license tax cannot be sustained. We, therefore, give judgment in favor of the defendant, and that the Commonwealth has no cause of action.”
    The exceptions of plaintiff, identical in form with the assignments of error hereinafter set forth, were overruled May 10th, 1881, and judgment entered.
    Plaintiff took a writ of error assigning as error that:
    1. The Court erred in deciding as follows:
    “There is no doubt of the power of the State to impose a tax on the corporation created and placed in its midst by the United States, unless for national purposes, and it must clearly describe it as it is, and exclude or tax it in express words, not as a foreign corporation.”
    2. The Court erred in deciding, as follows :
    “ The evidence clearly showed that it (the Texas and Pacific Pailway Company) was connected with a Pennsylvania corporation which was subject to taxation; therefore, by the very terms of the act, the Texas and Pacific. Company could not be called upon to pay a license tax. Such appear to be the words of the act, apparently introduced for the express purpose of exonerating this company.”
    3. The Court erred in entering judgment in favor of the company, and against the Commonwealth.

      Lyman D. Gilbert and Henry W. Palmer, attorney-general, for plaintiff in error.
    The license tax was intended to compensate the State for the protection it afforded to corporations, upon whose property it could impose no tax, because it was beyond its jurisdiction.
    The condition for the exemption of a foreign corporation from this tax is either that it made its capital stock subject to taxation by employing its capital in this State, or that one-half of its stock be taxed bjT reason of its being in the ownership or under the control of a domestic tax-paying corporation.
    A majority, at least, of all the capital stock must be taxed.

      The capital stock upon which the Commonwealth acts in regard to an alien corporation is the authorized capital stock. No kind of capital except authorized capital is mentioned in this section. The objection that this tax infringes on our Constitution is not specified as the law requires, and we respectfully submit that it raises no question upon which this Court has authority to pass. Did the legislature, by the words “ foreign corporation,” intend to tax a corporation having a congressional charter? The word foreign corporation means a corporation not created by our sovereignty: Eby v. Railroad, 7 Weekly Notes, 145 ; Eby v. Railroad, 6 Weekly Notes, 385 ; Insurance Company v. Commonwealth, 6 Norris, 173 ; Mintzer v. Montgomery County, 4 P. F. Smith, 139.
    Has the legislature power to tax a company with a congressional charter ? It has never been successfully asserted that a State can be compelled to admit within its limits a corporation created by any power except its own, and permit it to remain untaxed because it is the creation of another sovereign: Bank of Augusta v. Earle, 13 Peters, 586 ; Paul v. Virginia, 8 Wallace, 168 ; Thomson v. Pacific Railroad, 9 Wallace, 591 ; Railroad Company v. Peniston, 18 Wallace, 33.
    The exemption of Federal agencies from State taxation is dependent not upon the mode of their construction, or upon the nature of the agents, or upon the fact that thsy are agents, but upon the efiect of the tax. A tax upon their property does not necessarily hinder the efficient exercise of their power.
    Congress never intended that this corporation should have any advantage over its rivals in respect to exemption from taxation.
    It created the corporation, but left it subject to the State law.

      M. E. Olmsted for defendant in error.
    That corporations of one State are foreign to every other State, and that such other State may exclude them altogether, or may permit them to enjoy the privileges of domestic corporations upon such terms and conditions only as her legislature may see fit to impose, has been frequently decided. But it has never been held that a corporation, authorized by act of Congress to enter a State, can b.e excluded by the legislature of that State, or can be treated as a foreign corporation in that State: Bank of Augusta v. Earle, 13 Peters, 519 ; Paul v. Virginia, 8 Wallace, 168 ; Eby v. Northern Pacific Railroad Company, 6 Weekly Notes, 385 ; Eby v. Northern Pacific Railroad Company, 7 Weekly Notes, 145 ; Stetson v. City of Bangor, 56 Maine, 288 ; Casey v. Galli, Thompson’s Nat. Bank Cases, 142 ; Pittsburg v. First National Bank, 5 P. F. Smith, 45 ; Claflin v. Houseman, 3 Otto, 130.
    It is not seen how there could be ownership in that which is merely authorized but has no existence, but if there is not ownership there is control of even the authority to issue stock in this case, as it could be issued only by the vote of the shares already issued and owned by the construction company. The ease was tried by the Court below under the act of 1874 without a jury, and that Court has found that the capital stock ofithe defendant was owned and controlled by a corporation of this State which pays a tax.
    This Court will not inquire behind this finding of facts : Jamison v. Collins, 2 Norris, 359 ; Lee v. Keys, 7 Norris, 175 ; Commonwealth v. Lehigh Valley Railroad Company, not yet reported.
   The opinion of the Court was delivered by

Sterrett, J.

The sixteenth section of the revenue act of June 7th, 1879, provides that “ no foreign corporation, except foreign insurance companies, etc., shall have an office in this Commonwealth for the use of its officers, stockholders, agents, or employés, without first having obtained from the auditor-general a license to do so; for which license every such corporation shall pay annually one-fourth of a mill on each dollar of the capital stock which said company is authorized to have.” . . . . “ Provided, that no license shall be necessary for any corporation paying a tax under any previous section of this act, or whose capital stock or a majority thereof is owned or controlled by a corporation of this State which does pay a tax under any previous section of this act.”

It is admitted that the defendant company was incorporated by act of Congress for the purpose of constructing and operating a railroad from a point in the State of Texas to San Diego, California, with an authorized capital not exceeding |50,000,000, less than one-sixth of which was issued; and that the company has not invested or used its capital in this Commonwealth except in the purchase of rails and other railroad material and supplies; but during the year ending July 1st, 1880, it kept and maintained for the use of its officers^ stockholders, agents, and employés in the transaction of their business, an office in the city of Philadelphia, without having obtained a license from the auditor-general. The company having thus failed to procure a license, the auditor-general and State treasurer, in pursuance of the provisions of the act, settled an account against it for $ 12,500, with interest froin October 21st, 1880. Erom this settlement an appeal was taken by the company, and the Court of Common Pleas, in a clear and able opinion, held that it was not liable, for .the reasons that it is not a foreign corporation within the meaning of the act, and that nearly all its capital stock actually issued was held and controlled by the California and Texas Construction Company, a corporation of this State, which was liable to pay and did pay a tax under a previous section of the act, and hence the defendant was within the protection of the proviso above quoted. These are controlling points in the case, and if either of them be correct, the judgment must be affirmed.

The General Government, in its relation to that of the several States, cannot be considered a foreign government in the ordinary acceptation of that term. "Within the sphere of its delegated powers its authority extends over all the States of which it is composed, and to that extent it may be said to be identified with the government of each. Hence, a corporation created by the government of the United States cannot with propriety be called a foreign corporation. It is contended, however, that in a more comprehensive sense, all corporations not created directly by State authority may be classed as foreign, in contradistinction to those of exclusively State origin; and that such was intended to be the meaning of the word “ foreign ” as used in the act. This might be so if there was anything in the act itself indicative of an intention to use the word in that sense, but there is not. On the contrary, in the fifth section, which imposes a tax on limited partnerships, etc., they are described as ‘ partnerships organized under or pursuant to the laws of this State, or of any other State or Territory, or of the United States, or under the laws of any foreign state, kingdom, or government.” Thus clearly showing that when the legislature intended to tax associations created by the General Government they used apt words of description for that purpose. The same distinction is observed in other portions of the act, especially in the sixth section. The construction adopted by the learned pi’esident of the Common Pleas is so fully sustained on principle as well as authority, that it is unnecessary to add anything to what is so well said in his opinion.

But, assuming that the sixteenth section of the act should be so construed as to embrace corporations created by act of Congress, the judgment is still clearly right on the other ground, viz., that the defendant is within the protection of the proviso. The fact was conclusively established that nearly all of its actual capital stock was held and controlled by the California and Texas Construction Company, a Pennsylvania corporation, which paid a tax under a prior provision of the act; thus bringing the defendant directly within the terms of the proviso. In answer to this position, it is suggested that the phrase “capital stock or a majority thereof” refers to the authorized or nominal and not to the actual capital of the company. Such a construction of the proviso is unreasonable, and wholly unwarranted by anything eon-, tained in the act. When authorized or nominal capital, in contradistinction to actual capital, is intended to form the basis of taxation, it is so designated as to leave no room for doubt as to what was meant. In a ease like the present, in which less than one-sixth of the capital stock which the company is authorized to have has actually been issued, the proviso- would be inoperative if it means authorized capital. In the very nature of things, capital stock, authorized but not issued, could not be owned or controlled by another corporation. We have no doubt the words of the proviso refer to capital stock actually issued, and not to capital merely authorized.

In any view that can reasonably be taken of the case the judgment is correct.

Judgment affirmed.


source: Caselaw Access Project

author: Per Curiam :

license: Public Domain

text:
    May Term, 1881,
    No. 147.
    June 8th, 1881.
    Hall’s Appeal.
    1. Where a scire facias to revive and continue the lien of a judgment was issued within five years against the executor of the defendant, and the praecipe contained a suggestion of the death of the defendant and the substitution of the executor, and the scire facias was served upon the executor, whereupon judgment of revivor was entered; Held, that the suggestion of the death was regular, that it was unnecessary to bring in the executor and make him a party by judgment of the Court, and that the lien of the judgment was preserved.
    2. Where the will of a testator authorized and empowered his executors to ' sell and dispose of his real estate, either by public or private sale, or sales, for the best price that could be gotten for the same, and by proper deed or deeds, conveyances or assurances in-the law, duly executed, acknowledged, and perfected by them, to grant, convey, and assure the same to the purchaser or purchasers in fee simple; Held, that the executors became the terre tenants of the land, and that in order to revive a judgment which was a lien upon it, notice to them was sufficient, and it was not necessary to make the widow and heirs parties.
    Appeal of Samuel Hall from tbe decree of the Orphans Court of Clinton County, confirming the report of an auditor appointed to distribute the estate of Ezekiel Fleming, deceased.
    Ezekiel Fleming died January 10th, 1870, having made a. last will, dated December 81st, 1869, under which letters testamentary were granted to N. B. Dorey, the other executor named having renounced. The executor filed his account September 20th, 1875, and an auditor was appointed to pass upon exceptions to it and make distribution.
    Before the auditor the following facts appeared:
    On the 18th of November, 1865, Samuel welsh obtained a judgment against the testator and S. G. Wright, upon which there remained due, with costs, $1248.22, and at the time of the entry of this judgment Wright owned a tract of land in Clinton County in common with T. Wright and W. S. Woods. Fleming, the testator, bought this land subject to the lien of the judgment against S. G. Wright, January 22d, 1866. After the death of the testator, plaintiff issued a scire facias to revive the judgment, September 29th, 1870, against “S. G. Wright and N. B. Dorey, executor of E. Fleming, deceased,” which was served on the defendants therein named, alone; and on the 14th of May, 1872, judgment of revivor was entered for want of an affidavit of defence.
    The executor was not substituted by a scire facias to appear and show cause why he should not be made a party, but by an indorsement on the prascipe for the scire facias, which suggested the death and substituted Dorey as executor.
    The testator, July 13th, 1866, executed a mortgage upon this tract of land for $4000, which was afterward assigned to George Hopson, and on the 5th of November, 1867, Samuel Hall, obtained a judgment against the testator and N. B„ Dorey for $1500.
    The executor sold the land under an order of court, May 16th, 1872, and the proceeds, $5544.90, constituted the fund in court for distribution.
    The will of the testator provided, inter alia: “ I do hereby authorize and empower my said executors hereinafter named, and the survivor of them, to sell and dispose of all my personal property, and also all my real estate wheresoever situate, except the property in the borough of Lock Haven, where I now reside, either by public or private sale, or sales, for the best price that can be gotten for the same, and by proper deed or deeds, conveyances or assurances in the law, duly executed, acknowledged, and perfected by them, to grant, convey, and assure the same to the purchaser or purchasers thereof in fee simple. It is further my will that if, after the payment of all my just debts as aforesaid, there shall yet remain in the hands of my said executors so much money, they shall pay off the balance of the unpaid purchase-money on the property in which I now live, and that they shall hold the same in trust for the use of my beloved wife, Anna, during her natural life or while she shall remain my widow; and upon her decease or marrying again, it is my will that my said executors shall convey said property to my children, their heirs and assigns, share and share alike.”
    It was contended before the auditor that the proceedings for the revival of the Welsh judgment -were irregular and of no effect, and that the lien of that judgment was gone.
    The auditor found that the. Welsh judgment was entitled to be paid out of the fund for two reasons:
    1st. The will of the decedent passed the land in question to the executors, and the widow and heirs were not terre tenants.
    2d. Upon the authority of Lichty, Admr., v. Hochstetler, 37 Leg. In., p. 134, the scire facias against the executor was sufficient to keep the judgement alive for five years from the date of its issue without service upon the terre tenants, and it was, therefore, at the date of the sale a lien upon the land in question.
    He awarded $101.50 to the costs of the audit; $1243.22 to John Q. Welsh, surviving executor of Samuel Welsh; $3892.05 to the Hopson mortgage; and that the balance of $308.13 was applicable to the judgment of Samuel Hall.
    Hall filed, inter alia, the following exceptions.
    4th. The auditor erred in ruling that the lien of the judgment of John Q. Welsh, surviving executor of Samuel Welsh, deceased, against the one undivided third interest of S. G-. Wright, in the farm sold by the executor, was continued by the death of E. Fleming, the terre tenant of S. Gh Wright, as it would have been under the statute if the title to the land had been in E. Fleming, at the date of the entry of the judgment.
    5th. In ruling that the judgment of John Q,. Welsh, surviving executor, as originally entered, was a lien on the day of the executor’s sale, to wit, May 16th, 1872, on one undivided third of the land irrespective of the scire facias.

    6th. The auditor erred in finding that the will of decedent passed the land in question to the executors, and the widow and heirs were not terre tenants.
    7th. In finding that the scire facias was sufficient to keep the judgment alive for five years from the date of its issue without service upon the terre tenants, and it was, therefore, at the date of the sale, a lien upon the land in question.
    8th. In awarding to the judgment of John Q. Welsh, executor, etc., of Samuel Welsh, deceased, any portion of the fund for distribution.
    On the 31st of March, 1881, the Court below overruled the exceptions and confirmed the report of the auditor absolutely. Hall then appealed, assigning as error these rulings.

      C. S. McCormick and S. D. Ball for the appellant.
    If the widow and heirs were not terre tenants, then, by implication, the executors were, and they were not made parties in the manner provided by the 27th section of the act of February 24th, 1834. The scire facias did not issue to make them parties, but only to revive the judgment.
    Without naming the terre tenants, or directing service upon terre tenants at all, the scire facias is served on the original defendant alone, who is not in the occupancy of the land. This is not a compliance with the requirements of the act of 1798 as to service: Armstrong’s Appeal, 5 W. & S., 355 ; McCray v. Clark, 34 Leg. In., 78 ; In re Fulton, 1 P. F. Smith, 208 ; Lusk v. Davidson, 3 P. & W., 229 ; Davis v. Ehrman, 8 H., 258 ; Nicholas v. Phelps, 3 H., 36.
    The widow and heirs were the terre tenants. Until proceedings are resorted to by the administrator, or by creditors, the right of the heir is absolute: McCoy v. Scott ; 2 R., 223 ; Commonwealth v. Hilgert, 5 P. F. Smith, 236.
    Until divested by the completion of the sale the property belongs to the heirs: Erb v. Erb, 9 W. & S., 147.
    The clause of the will was only to make provision for the sale of the lands without an order of the Court. No estate vested in the executor. Blight v. Wright, 1 Phila., 549 ; Bleight v. The Bank, 10 Barr, 131.

      S. R. Peale for the appellee.
    The lien of the Welsh judgment was prior in time to all others, and had not, in fact, been discharged. Two months before its expiration the scire facias to revive was issued and served on S. G. Wright and the executor. The'objeetion that it ought to have been taken to make the executor a party should have been made in the Court below. The writ was not void, for the executor might have appeared at the return, and shown cause why he should not be substituted: Kiehner v. Dengler, 1 Watts, 424.
    The scire facias is clearly within the ruling in Lichty v. Hochstetler, 37 Leg. In., 134.
    The land having been devised to the executors, they were the terre tenants. It is not necessary to name the terre tenants in the scire facias, and service on them is sufficient. The executor, as terre tenant, was served: Colborn v. Trimpey, 36 Penna. State Rep., 463 ; Huston v. Mateer, 16 S. & R., 416.
   Per Curiam :

The only exception relied on in the oral argument was as to the lien of the Welsh judgment. We see no irregularity of that judgment. It is only when the defendant dies pending the suit, that it is necessary to bring in the executor by a scire facias, and have a judgment of the Court making him a party. The suggestion of the death of the defendant in the praecipe for the writ, when the defendant is dead when it issues, is entirely regular. It is, besides, very clear that Dorey, the executor of Fleming, was, under the will, the terre tenant of the land, and notice to him was all that was necessary to continue the lien. It was altogether unnecessary to make the widow and heirs parties. We are of opinion, therefore, that the decree of the Court below was entirely right.

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


author: Green, J.

text:
    May Term, 1881,
    No. 46.
    May 23d, 1881.
    Crowley et ux. versus Irvin.
    1. A father sold to his daughter, who was one of his household, a mare, and the payment was made by his giving her an acknowledgment in writing that he had collected §3200 rent for her, which he promised to pay, and giving on the same day a receipt for the price of the mare. She gave no receipt on account of the obligation for §3200. He owned the real estate where they lived, the household goods, the stock, and several other horses. The mare was kept in the same stable and in the same pasture with them, fed from the same rack, ate oats from the same bin, and was cared for by the father’s servant. In these respects the usage after the sale was the same as before. The mare continued to be used by father and daughter afterward as before. No witness was present at the sale, and no formal delivery of possession was proved to have taken place. Held, that in a suit in trespass by the daughter against the sheriff for levying on the progeny of the mare as the property of the father, the Court was right in directing the jury to find for the defendant.
    2. Verbal declarations of the father and the daughter subsequent to the sale that the mare belonged to the daughter are of no account in such a contention as this, and cannot suffice to create title as against creditors,
    3. Nor does the fact that the father, thirteen days before the levy, executed a lease of the farm to his daughter and her husband, the lease not being witnessed, acknowledged, or placed upon record, and there being no visible change of possession, change the title to personalty as to creditors.
    Error to Court of Common Pleas of Huntingdon County.

    Trespass by Daniel Crowley, and Eliza, his wife, in the right of the wife, against Samuel H. Irvin, sheriff of the said county, for taking in execution and selling a mare and colt as the property of John McCombe, which were claimed to belong to the plaintiff. The plaintiff, Eliza Crowley, was the only child of John McCombe.
    The material facts testified to on the trial were as follows:
    February 26th, 1856, John McCombe purchased four acres of land,, containing a sand quarry, and took a deed in trust for his daughter, Eliza, which conveyance was recorded June 6th, 1857. This property he leased at the rate of $400 a year. September 5th, 1873, on which day Eliza came of age, she and her father entered into a written agreement, drawn by her and unwitnessed, in which he acknowledged having received rents for the quarry to the amount of $3200, and promised to pay it to her. As part payment, he sold to her for $100 a mare, and gave to her a written receipt of the same date for the amount. The father owned the real estate where they lived, and she had been accustomed to use the mare before the alleged sale. She was a member of his family and so remained after the sale. He owned the household goods, the stock on the farm, and other horses. The mare was in the same stable with them, and in the same pasture; she was fed from the same rack and bin; she ate the hay, oats, and pasture of the father, and was taken care of by his servant. After the alleged sale the plaintiff claimed to own the mare repeatedly, and used her, and the claim was admitted by her father. He also used her for riding and driving. It was testified to that this was with the permission of the plaintiff’, and that at times she refused to let the mare be so used. January 13th, 1875, plaintiff' married, and she and her husband remained in the house of her father. The same day the mare died leaving a mare colt. This colt, having arrived at maturity, with its colt, were the subjects of the levy resulting in this suit. In the spring of 1877, all of the personalty of John McCombe was seized in execution by a third party and was sold by the sheriff, the plaintiff becoming the purchaser. The mare and colt were claimed by the plaintiff and were not sold. August 16th, 1877,'John McCombe, by an unsealed and unwitnessed instrument of writing, leased his farm to the plaintiff and her husband for two years, at the rate of $100 per year, and they, on their part, agreed to give him boarding and washing at the rate of $100 per year.
    In 1846, John McEnally obtained a judgment in Blair County against John McCombe, which, with interest and costs, amounted, in August, 1878, to $265.44. Under a testatum fieri facias issued upon this judgment, the defendant levied upon the mare and colt and sold them, December 16th, 1878, at public sale, for $86.04, and applied the proceeds in part payment of the judgment.
    Upon this state of facts the Court below, Dean, P. J., directed the jury to find for the defendant, charging them, inter alia :

    “ Where a sale of chattels is made without a change of possession, where a change corresponding with the sale can be made, the sale is void as to the creditors of the vendor. There must be an actual delivery of the article by the party selling to the party buying.* There must be a relinquishment of the possession of the property by the one, and an assumption of the possession by the other. The possession cannot even be concurrent. A joint possession or control will not do ; the possession of the buyer must be exclusive of that of the seller. It is against the policy of the law to permit the semblance of ownership in one, and the actual but secret ownership in another. As to creditors, the ownership of personal property is presumed to follow and continue with the possession, and lasts 'as long as the possession lasts, no matter if an actual sale for a good consideration has been made. And the reasons for this rule of the law are based upon the soundest principles.
    “ The possessor of personal chattels has a credit based on the possession, if the possession is open and notorious. In the absence of recording acts with reference to personal property, the possession is the only indication of ownership to the world. The public gives credit on the appearance of ownership. The trust thus reposed ought not to be disappointed by a real ownership under a secret title in another. It is contrary to the policy of the law to thus permit those dealing in personal chattels to mislead the public. The law says to the purchaser of a chattel capable of actual delivery :
    ‘ When you buy you must take what you buy ; if you do not, you shall not assert your title successfully, no matter what you have paid, nor how honest may have been the transaction as to him from whom you bought.’ ”
    Assuming this alleged sale’ of the 5th September, 1878, by John McCombe to his daughter to have been honestly and actually made for a good consideration, was there then such a delivery, such change of possession in pursuance of the sale, as the law requires to constitute a valid sale as against the creditors of the father ?
    And further: “ But it is alleged that after the sale Eliza claimed the mare, and called her her own. As she lived in her father’s house, and had all the privileges and benefits of a daughter, we fail to see any significance in that fact which would indicate ownership inconsistent with the possession of the father. She doubtless called the bed she slept in hers, and the chair she occupied at the table hers; but such a claim from a member of the family would not lead any one to infer that the father had sold to her his household furniture. It is not unusual for the members of a family to call a favorite cow or horse or some article of property their own, and when the father, the head of the family and owner of the- property, uses the same language, and says that such or such an article is his son’s or his daughter’s, it has no significance as indicating a change of possession following a sale. Taking the evidence in its strongest aspect, it amounts to nothing more than this: A sale took place, on the 5th September, 1878, of the mare. Thereafter, so far as appeared to others, the daughter said the mare was hers, and the father said she was his daughter’s. This was not a sufficient delivery of the property as against creditors ; and such being the law, it is for us to so declare it, and so instruct you, and we direct a verdict for the defendant.”
    Plaintiffs excepted to this charge and opinion. The jury gave a verdict for the defendant, on which judgment was entered November 23d, 1879.
    A writ of error was taken by the plaintiffs, and it was assigned for error.

      First. The Court erred in charging the jury as follows, to wit.
    “ Taking the evidence in its strongest aspect, it amounts to nothing more than this: A sale took place, on the 5th September, 1873, of the mare. Thereafter, so far as appeared to others, the daughter said the mare was hers, and the father said she was his' daughter’s. This was not a sufficient delivery of the property as against creditors ; and such being the law, it is for us to so declare it, and so instruct you, and we direct a verdict for the defendant.”

      Second. The Court erred in not referring to the jury the question as to whether there had been such a delivery and change of possession under all the evidence, as the relations of the parties and the nature of the case would admit of.

      Third. The Court erred in not submitting to' the jury “ whether the change of possession was actual and bona fide,— not pretended, deceptive, and collusive; and whether such change of possession was all that could be reasonably expected of the vendor, taking into view the character and situation of the property, and the relations of the parties.”

      Fourth. The Court erred in charging the jury in the words following, to wit: “ But it is alleged that after the sale Eliza claimed the mare, and called her her own. As she lived in her father’s house, and had all the privileges and benefits of a daughter, we fail to see any significance in that fact which would indicate ownership inconsistent with the possession of her father.”

      R. B. Petrikin and M. M. McNeil, for plaintiffs in error,
    relied upon the case of McKibbin v. Martin, 14 P. F. Smith, 352, and cited McVicker v. May, 3 Barr, 227 ; Forsyth v. Matthews, 2 Harris, 100 ; Hugus v. Robinson, 12 Harris, 13 ; Dunlap v. Bournonville, 2 Casey, 74 ; Chase v. Ralston, 6 Casey, 539 ; Billingsley v. White, 9 P. F. Smith, 464 ; McMarlan v. English, 24 P. F. Smith, 300 ; Parks v. Smith, 8 Weekly Notes Cases, 415 ; Evans v. Scott, 8 Norris, 136.

      Speer & McMurtrie and John Cessna for defendant in error.
    The rule in Evans v. Scott, 8 Norris, 136, will not save the plaintiffs: Worman v. Kramer, 23 P. F. Smith, 378 ; Garman v. Cooper, 22 P. F. Smith, 32 ; Miller v. Garman, 19 P. F. Smith, 134 ; McKibben v. Martin, 14 P. F. Smith, 352 ; Billingsley v. White, 9 P. F. Smith, 464.
    The change of possession must be manifest, apparent, and open : Clow v. Woods, 5 S. & R., 286 ; Babb v. Clemson, 10 S. & R., 419 ; Milne v. Henry, 4 Wright, 352 ; Brawn v. Keller, 7 Wright, 106 ; Steelwagon v. Jeffries, 8 Wright, 412 ; Dewart v. Clement, 12 Wright, 414 ; Barr v. Reitz, 3 P. F. Smith, 258.
    This rule has always been enforced with vigor in cases of sales of horses, cattle, and outdoor stock, and that invoked by plaintiff in error has only been admitted in case of sales of household or indoor property the removal of which would be injurious.
    The doctrine that where there is a scintilla of evidence it must be submitted to the jury is exploded: Howard Express Company v. Wile, 14 P. F. Smith, 201 ; Elliott v. The Lycoming County Insurance Company, 16 P. F. Smith, 22 ; Cunningham v. Smith’s Adm’r., 20 P. F. Smith, 450 ; DeHaven’s Appeal, 25 P. F. Smith, 237.
   The opinion of the Court was delivered by

Green, J.

Upon a careful consideration of the testimony in this case we are persuaded that the action of the Court below, in taking the facts from the jury and directing a verdict for the defendant, was right. The action was trespass against a sheriff for seizing in execution a mare and colt as the property of a father, but which was claimed as the property of his daughter. It was alleged by the daughter that her father had sold and delivered to her another animal, the mother of the mare in suit, in 1873. The payment of the price, $100, was by the father giving to the daughter an acknowledgment in writing that he had collected $3200 rent for her, which he promised to pay, and on the same day giving her a receipt for $100 for a dun mare sold to her. No money was in fact paid by the daughter, nor does it appear that any receipt was given by her to her father for the payment of $100 on account of the obligation for $3200, nor that such a payment was credited thereon. At the time of the sale the father owned the real estate where they lived, and his daughter was a member of his family and lived with him. He owned and occupied the premises, and he owned and used the household goods, the stock on the farm, and several other horses. The mare in question was kept in the same stable and in the same pasture with them, fed from the same rack, ate oats from the same bin, and was cared for by the father’s servant, who also attended to his stock. In all these respects the usage after the sale was precisely the same as before. In point of fact no visible and no actual change took place in the possession of the mare, and she continued to be used by both father and daughter the same after as before. No witness was present at the sale, nor was any formal delivery of possession by the father to the daughter proved to have taken place. So far as the outside world were concerned, there was absolutely nothing to indicate any change of possession whatever. The verbal declarations of the father and the daughter subsequently to the sale that the mare belonged to the daughter are of no account in such a contention as this. They can never suffice to create title as against creditors. There could have been an actual, open, notorious delivery of possession in the presence of witnesses, but nothing of that kind ever transpired. But it is said the mare and colt in question were the natural iucrease of the one originally sold. That is true; but the title to the mother is the title to the offspring. If the parent mare was the property of John McCombe, as between him and his creditors, at the time the present animal was foaled, the foal was equally his, and so also was the progeny of the foal. It is also said that John McCombe, on August 16th, 1877, made a lease of his farm to his son-in-law and daughter, and that thereafter the entire property, real and personal, was in the possession of the lessees. The fi. fa. under which the mare and colt in question were sold, was levied on August 29th, 1877, thirteen days after the date of the lease. So far as any testimony printed in the paper-book is concerned, we can find none which indicates that the visible possession was in the least degree changed after the execution of this lease. The father, daughter, and son-in-law lived together thereafter precisely as they had before. The lease was not placed-on record. It was not witnessed, nor was it acknowledged. It does not appear that any human being knew of its existence except the parties to it. Surely, it could not be permitted that the mere execution of such a paper should of its own force suffice to change the title to personal estate as against the creditors of the lessor, where there was no change in the actual visible possession.

The facts of this case are such that no extended examination of authorities is necessary. The case of Evans v. Scott, 8 Nor., 136, chiefly relied on by the plaintiffs, is much short of the requirements of their case. There the actual possession of the premises in which the carpets were laid was as much the possession of the vendee as of the vendor, and the decision was put upon that ground. On p. 138, Paxson, J., says: “The house in which the carpets were put down was in the joint occupancy of the two brothers. It was the home of each, and each contributed to the payment of the rent.” Of course, in such circumstances there never was a time when the exclusive possession was either really or apparently in the vendor. But here the actual possession was originally in the vendor, and there never was a change in the apparent possession, and hence, as to his creditors, there was no change of title. This disposes of the first four assignments, and we see no error in those which remain.

Judgment affirmed.


text:
    May Term, 1881,
    No. 160.
    May 24th, 1881.
    Appeal of the Mifflin County National Bank.
    1. The assignee of a judgment or mortgage takes it subject to all the defencesof the obligor against the obligee, but npt subject to the secret equities of third' persons.
    2. One who discounts a promissory note is not entitled to the proceeds of a judgment given by the maker as indemnity to the indorser, against a bona fide assignee of the judgment for value.
    3. That the assignee, at the time of his purchase, did not inquire of all the obligors uniting in the judgment is immaterial.
    Appeal of the Mifflin County National Bank, from the decree of the Court of Common Pleas of Mifflin Countyr, making distribution of the fund in Court arising from the sheriff’s sale of the personal property of the Screw Mower and Reaper Company.

      The fund in court arose from the sale, under a writ of jfieri facias, of the persotml property of one of the defendants, and amounted to $955. This writ was issued on a judgment upon a warrant of attorney in a judgment note, dated August 22d, 1876, for $5000, payable one day after date, given by “ The Screw Mower and Reaper Company, Adam R. Reese, Henry M. Seiple, Thomas Reese, Jr., and Godfrey R. Reese, doing business under the name of the Lewistown Engine and Brass Company,” to “ Andrew J. Earrand or his assigns.” It was signed on behalf of the Screw Mower and Reaper Company by Peter V. Staats, president, and John W. Bean, secretary, and by the others in person, and was duly sealed. Judgment was entered upon it, August 24th, 1876, against all the parties doing business under the name and firm of the Lewistown Engine and Brass Company. This company was a partnership, constituted as stated in the judgment note, and it executed, April 15th and 19th, 1876, respectively, two promissory notes to the Mifflin County National Bank, for $5000 in the aggregate, with 5 per cent, collection fees. Adam R. Reese, A. J. Earrand, and T. B. Reese were the sureties on these notes. The judgment note above set forth ■was given to A. J. Earrand to indemnify him, A. R. Reese and T. B. Reese, as such sureties. January 1st, 1877, Farrand assigned this judgment together with another he had against the same parties for $7000 to John M. Weldon. He had previously transferred to Weldon property to the value of $2500 or $2800 that he had realized upon the judgment by the sheriff’s sale of the personal property of the Lewistown Engine and Brass Company. For these transfers Weldon paid $3500, the sum of $1000, or $1500, in cash and the balance in notes. At the time of the purchase of the judgment by Weldon there were present John W. Bean, secretary of the Screw Mower and Reaper Company, H. M. Seip]e, Thomas Reese, Jr., and Godfrey R. Reese, as well as Earrand. Adam.R. Reese Avas not present. Weldon inquired of those present whether the judgment was all right, and was assured by Bean and Farrand that it Avas. No in•quiry Avas made as to the consideration of the judgment. Earrand and the LeAvistown Engine and Brass Company made an assignment for the benefit of creditors, August 25th, 1876, and the entire claim of the Mifflin County .National Bank remained unpaid.
    The auditor to Avhom the fund was referred for distribution awarded it to the Bank, holding that it is a Avell-settled •equitable principle, that where a surety, or a person standing in the situation of a surety for the payment of a debt, receives a security for his indemnity, and for the discharge of such indebtedness, the principal creditor is, in equity, entitled to the full benefit of that security, and that Weldon, not having inquired of Adam R. Reese, he was not a bona fide holder for value'without notice, every purchaser of a chose in action not negotiable taking it subject to all the equities which the debtor may then have if not previously inquired of concerning defences.
    Exceptions to this award were filed by Weldon and were sustained by the Court below, Bucher, J., who said: “ The purchaser, mindful of the rule of law, which declared to him that if he bought a chose in action not negotiable without inquiry from the obligor, he took it subject to any defence he might have against the obligee, he seeks to protect himself against any defence the obligor may have to the judgment. Like a prudent man should do he gathers all the members of the partnership about him, save one, who were the obligors in the judgment, and puts the inquiry to them: Is the judgment all right? This, too, before he parts with his money, and upon his being assured that it was, he enters into the contract of purchase with the obligee, pays his money, and takes the assignment. Then when he claims that he is an innocent purchaser without notice, he is met with the retort: No, you are not; you were guilty of negligence. You inquired of all the partners but one; but you should have inquired of all to bind the firm. The mere statement of the proposition confutes it: It is scarcely necessary to cite authorities for the proposition that the declarations of one partner are binding upon the firm, and that inquiry of one partner was sufficient to bind the partnership. . . . We have it, then, undeniably established that Weldon inquired of the obligor before he parted with his money, and that he bought and paid for the judgment upon the faith of the assurances given him by the obligors that it was all right. This made him an innocent holder for value, and he took the obligation free from all equities between the original parties to it, and, a fortiori, from the secret equities of third parties. If he had bought without inquiry, and was not an innocent holder, he could have taken the obligation subject only to the secret equities of the obligor or debtor, and not to those of strangers of which he was ignorant.”
    The bank appealed and assigned this finding of the Court as error.

      A. Reed for the appellant.
    The record shows that on August. 24th, 1876, all the property of the firm was sold on execution, and that on the 25th of August, 1876, it made an assignment for the benefit of creditors. Either of these facts worked a dissolution of the firm, ipso facto: Cochran v. Perry, 8 W. & S., 262 ; McKelvy’s Appeal, 72 Penna. State Reps., 409 ; Reppert v. Colvin, 12 W r., 248 ; Collier on Partnership, p. 109.
    The partnership then being dissolved long before the assignment of the judgment by Earrand to Weldon, an inquiry by Earrand of some of the late partners of that firm, or rather an inquiry in their presence, will not bind those who were not there, and not represented: Burns v. McKenzie, 23 Cal., 101 ; Gleason v. Clark, 9 Cowen, 59 ; Baker v. Stackpoole, 9 Cowen, 434 ; Robbins v. Willard, 6 Pick., 464 ; Miller v. Neimerick, 19 Ill., 172 ; Schoneman v. Fegley, 7 Barr, 433 ; Bispham v. Patterson, 2 McLean, 87. The Court has clearly demonstrated that Weldon would have been postponed but for the fact of his inquiring of some of the obligors on the bond, and as he did not inquire of the Screw Mower and Reaper Company, or of Adam R. Reese, they are unaffected by the assignment.

      Woods and McKee for Weldon, the appellee.
    While it is true that when a party purchases and takes an assignment of a judgment against another without inquiring of the debtor whether he has any defence to it that he takes subject to the secret equities of -the debtor, it is equally true that in Pennsylvania he does not take it subject to any secret equities of strangers of which he was ignorant: Mott v. Clark, 9 Barr, 399 ; Taylor v. Gitt, 10 Barr, 428 ; McConnell v. Wenrich, 4 Harris, 365 ; Hancock’s Appeal, 10 Casey, 156.
   The opinion of the Court was delivered by

Green, J.

It was found as a fact by the learned judge of the Court below, and is not denied, that Weldon paid a valuable consideration for the judgment of Farrand against the Lewis-town Engine and Brass Company. It was also found that before, or at the time he purchased the judgment, he inquired of several of the parties, who, as partners composing the defendant company, executed the confession of judgment in question, whether the judgment was all right, and was assured by them that it was. It is not pretended that Weldon had any actual notice of any equity existing in the appellant, or in A. R. Reese, to have the judgment applied to the benefit of either of them. In point of fact, neither the company defendant, nor any of the parties who signed the confession of judgment, have any defence whatever against its payment. Weldon holds, by valid assignment, the entire title of the plaintiff in the judgment. The fund in court is the proceeds of an execution issued on this judgment, and it has been claimed by, and has been awarded to, Weldon as the assignee of the plaintiff Farrand.

Why should he not have it? The only reason urged is, that the appellant, having discounted certain paper, given by the company defendant, indorsed by A. E. Eeese, A. J. Far-rand, and T. B. Eeese, had an equity to have the judgment applied to its use, because it was given to indemnify the indorsers against their liability as such. The claim is pressed upon the ground that Weldon made no inquiry of A. E. Eeese when he took the transfer, and that the latter was not bound by the declarations of his co-obligors, because the partnership was then dissolved. We do not perceive the materiality of this contention. The appellant’s claim is in no sense whatever a defence against the judgment. On the contrary, it is a claim to hand the fruits of the judgment over to the appellant. In other words, the appellant claims the ownership of the judgment, not by force of any transfer or assignment, but because of its equitable right as a creditor, to have securities given by the debtor to protect the indorsers, applied in satisfaction of the debt. This would be all very well as between the bank and Farrand, if they only were the parties to the controversy; but how can such a claim aifect an innocent purchaser from Farrand, for value actually paid, and without any notice of the equity set up by the appellant ? It is very true that the assignee of a judgment or mortgage takes it subject to all'the defences of the obligor against the obligee; but it is equally true that he does not take it subject to the secret equities of third persons. This is very familiar doctrine, and has been repeatedly enforced by this Court. In Davis v. Barr, 9 S. & R., on page 140, it was said by Gibson, J.: “ It certainly is not a general principle of equity, that a purchaser for valuable consideration of the legal title to any kind of property, should take it subject to an equity of which, he had not notice.” And again, on page 141: “But with any agreement between the original parties inconsistent with the purport or legal effect of the instrument, the assignee has nothing to do. No such agreement is within the purview of the act, and the assignee is not bound to call on the obligor for information about matters, the existence of which he has no reason to suspect, the necessity of inquiry being limited, as I have said, to want of corn sideration and set-off.”

In Mott v. Clark, 9 Barr, on page 404, it was said of the assignee of a bond and mortgage: “ He takes it subject to all the equity of the mortgagor, but not to the latent equity of a third person. To subject him to such an equity, he must have express or constructive notice at the time of the assignment.”

The same doctrine has been held in the eases of Taylor v. Gitt, 10 Barr, 428 ; Wetherill’s Appeal, 3 Grant, 281 ; McConnel v. Wenrich, 4 Harris, 365 ; and Twitchell v. McMurtrie, 27 P. F. S., 383. As A. R. Reese had no defence against the judgment, it was not necessary to apply to him to learn whether he had any secret agreement with the appellant that the judgment was to be held for the benefit of the latter. In any point of view, "Weldon was not subject to the duty of inquiry for such latent equities as it is sought to set up against him, and can stand upon his clear legal title to the judgment and its fruits.

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


author: Per Curiam:

text:
    Gibbs & Sterrett Manufacturing Company versus Goe.

      A feme sole trader, having capital and tools of her own, may employ her husband to superintend the business and have the benefit of his skill and labor ; and additional property produced by means of such skill and labor belongs to her, and cannot be levied upon by his creditors. The property acquired is the result of the original investment, and her husband’s creditors have no more right to levy upon it than the creditors of any other person employed by her as a clerk or servant.
    Error to the Court of Common Pleas of McKean County.

    Eeigned issue under the sheriff’s interpleader act by Mrs. N. D. Goe against the Gibbs & Sterrett Manufacturing Company to determine the ownership of certain goods levied upon by the defendant as the property of N. D. Goe, husband of the plaintiff.
    Upon the trial in the Court below before Wilson, A. L. J., the following facts appeared:
    On March 26th, 1880, judgment was entered against N. D. Goe et al. by the Gibbs & Sterrett Manufacturing Company, and a levy made upon, inter alia', one cable, one auger stem with jars attached, one auger stem, two sinker bars, and two bits.
    The plaintiff in the feigned issue presented a petition to the Court, May 19th, 1879, asking to be declared a feme sole trader, under the act of April 3d, 1872, and her application was granted.
    Her husband was feeble and unable to work. In 1879 his brother proposed to her that if she would become a feme sole trader that he and another brother of the husband would give her a set of tools for drilling oil-wells. She then made the application as above, and they gave her the tools. Her husband had a knowledge of the business, and though he was unable to do any manual labor, he could oversee and take charge of the work. He took contracts in the name of his wife, acting as her agent, which she fulfilled by using the tools. It became necessary to have them repaired, and to get additional tools. On the strength of her credit W. II. Tinsman let her have about $2000 worth of tools, and he made repairs to the value of $40. He made for her the auger stem with jars attached, one of the sinker bars and the two bits, and repaired the other auger stem and the other sinker bar. The second auger stem and sinker bar Goe testified he bought for her on credit from James O’Neill.
    John C. Backus testified that the plaintiff had entered into a contract to drill a well for him, and that he bought the cable and charged it to her on the price of the drilling.
    Counsel for defendant asked the Court to charge:
    1. If the articles in question were acquired by the skill and superintendence of the husband even while acting ostensibly as the agent of the wife, that she cannot hold them as against the husband’s creditors.
    2. That even if the wife did own a set of drilling-tools and afterwards allowed the husband, who was indebted, to make contracts, manage the property, and by means of the labor, skill, and management of the husband in procuring contracts and managing the set of tools new tools were purchased, yet the husband was the owner of this newly acquired property in favor of his creditors.
    The Court charged the jury as follows:
    “[The plaintiff in. this case, to sustain her action, has called Mr. Tinsman for one of her witnesses, and he tells you that prior to 1879 he had been dealing somewhat with N. D. Goe, and that in 1879 he learned that Mrs. Goe had made an application to the Court to become a feme sole trader, as it is termed; and we find by the evidence that Mrs. Goe did make, the application in May, 1879, and the Court granted her the right under the statute to become a feme sole trader. This statute was passed in 1872, and reads as follows : (The Court then read the statute.)
    “ If this act of Assembly has any construction at all, it must be construed to mean that after a married woman has had the benefit of the act by the granting of her application, she is then to be in the same situation as a single woman, and this may be shown by the records of the Court. If any person desires to issue an execution against the husband they can ascertain her situation by coming to the records, and then everybody is presumed to know the situation of the woman from the time that application is granted and it is filed. Then from the time that Mrs. Goe filed her petition in this Court and it was allowed, she stood to all the world and to her husband as a business woman, entitled to the control of all her property, the same as a single woman, and the only distinction is that when the wife is brought into Court in case when the ownership of property is in dispute, then it becomes the duty of the woman claiming such title, and she is compelled in the first instance, to show title to the same.]
    “ This woman has shown that she is entitled to the benefits of this act, and she is now in Court claiming title. Has she shown title ? That is the question for the jury. If she has not, she is not entitled to recover.

      % 5£ % sfc
    “ The simple question before you is whether this plaintiff was a bona fide purchaser of this property. She is in the situation of a single woman, so far as the law is concerned, to control her property and. to do with it the same as any person, except when she comes into Court she must prove to the satisfaction of the Court that she is the owner of the property. You will say whether you find that these goods are the goods of the plaintiff, Mrs. Goe, or not. If you find so you will make such return. You will return whether the title to the following goods are in the plaintiff; a list wall be furnished you. [It is a question of fact entirely for you to say whether she has introduced evidence here to satisfy you that this was a bona fide transaction.] If there is any evidence in this case to satisfy you that this is a concocted scheme by fraud between the husband and wife to defraud the creditors of the husband, and not a bona fide transaction, then you will say that these are not the goods of the wife. But you must remember that whoever alleges fraud must prove fraud to the satisfaction of the jury. If there is evidence in this case that satisfies the jury that there is fraud, and that this was not a bona fide transaction, then you will find against her. But if you find that this was a bona fide transaction by the woman for the purpose of taking care of and supporting herself and family, and that this purchase was honest, then the goods were not subject to the execution of her husband’s creditors at all.....
    “ Answer to the defendant’s first point:
    “ We negative this point, and say we refuse to charge- as requested, because we regard this whole thing as a question of fact for the jury.
    “ Second point. That point we negative. We do not regard it as a good proposition in law. But the main reason we negative the proposition is that it is a question of fact for the jury to determine whether this set of tools was bought by the woman in good faith, and whether she has given you such evidence as satisfied you of that fact. If the jury believe that this woman bought in good faith this property under the act of Assembly, and that it was not with a view to defraud or cheat creditors, then you say she is entitled to recover. But if you do not so find, you will render a verdict against her.”
    Defendant excepted to the charge and the answers to the points.
    Verdict for the plaintiff for the articles named, on which judgment was afterwards entered.
    Defendant took out a writ of error, assigning as error those portions of the charge within brackets, and the answers to the points as above.

      J. V. McIntyre and Sterrett & Rose for plaintiff in error.
    The act of April 3d, 1872, does not increase the power of a married woman to incur indebtedness : Ward v. Whitney, 5 W. N., 492. It merely gives them the right to retain and have control of their property of which they are the owners in their own right at the time of making their application, and their separate earnings, and not the earnings of their husbands. It did not open new doors for her to purchase property, contract debts, and increase her liabilities. The husband would be liable for any debts so contracted : Keeney v. Good, 9 H., 349 ; Robinson v. Wallace, 3 Wr., 129. The newly acquired property belonged to the husband, and was subject to his debts.

      Backus & Gorton for defendant in error.
    The judge of the Court of Common Pleas, in Ward v. Whitney, 5 W. N., 492, erred in his construction of the act of April 3d, 1872: Silveus v. Porter, 24 P. F. Smith, 448 ; Seeds v. Kahler, 76 Penna. State, 262 ; Musser v. Gardner, 66 Penna. State, 242 ; Brown v. Pendleton, 60 Penna. State, 419 ; Rush v. Vought, 55 Penna. State, 487 ; Wieman v. Anderson, 42 Penna. State, 311 ; Welch v. Kline, 7 P. F. Smith, 428 ; Flick v. Devries, 14 Wr., 266 ; Sixbee v. Bowen, 10 Norris, 149.
   Per Curiam:

This case was fairly submitted to the jury with proper instructions. The defendant,, who was a married woman, had, according to the evidence, a set of drilling tools given to her by her brothers. She engaged in the business and employed her husband to superintend it. He had the right to give her his labor and skill, and his creditors could not levy upon her property produced by means of such labor and skill with her original capital. All that she acquired was the result of her original investment, and her husband’s creditors had no more right to levy upon it than the creditors of any other person employed by her as a clerk or servant.

Judgment affirmed.


text:
    May Term, 1880,
    No. 231.
    Janes versus Emery Oil Company.
    1. Defendant leased from the plaintiff a tract of land for the purpose of mining petroleum, and covenanted to commence operations within ten days, to complete a well within four months, “ and if a well is not completed within eight months, then this lease is to be void and end. A second well to be drilled upon the farm if the first well is large enough to justify it.” Evidence was also given to show a contemporary parol agreement by defendant, not inserted in the lease, to put down wells to develop the land and protect the lines, and to offset the wells put down in adjoining lands. Held, that all the agreements, except that with reference to the first well, were mere covenants, and that the breach of any or all of them could not be construed to operate as a forfeiture, to enforce which ejectment would lie.
    2. Hamilton v. Elliott, 5 S. & B., 375, distinguished.
    Error to the Court of Common Pleas of McKean County.

    Ejectment by Heman Janes against Lewis Emery, Jr., and L). McKelvey, doing business under the firm-name of the Emery Oil Company, to recover possession of a tract of land leased by tbe grantor of the plaintiff' to the defendants, because of alleged forfeiture.
    Upon the trial of the case in the Court below, before Williams, P. J., the following facts appeared:
    The plaintiff claimed, under a contract of sale made to him January 7th, 1878, by Truman Stoddard and Lydia his wife, for $2500, which sum had been paid.
    On the 26th of April, 1876, Stoddard and wife demised the land in question to Lewis Emery, Jr., one of the defendants, for ten (?) years, for the purpose of mining and excavating for petroleum, etc. Emery covenanted to deliver to Stoddard one-eighth of the product, and the latter was to fully use and enjoy the premises for the purposes of tillage. The lease further provided: “ The party of the second part (Emery) covenants to commence operations for said mining purposes within ten days from the execution of this lease, or thereafter pay to the party of the first part-dollars per annum until work is commenced, and to complete a well withiu four months from this date, and if not finished at the time specified, to pay to the first party the sum of fifty cents a day, until'the well is finished, for each day of delay after the expiration of the four months; and if a well is not completed withiu eight months, then this lease is to be void and end. A second well to be drilled upon the farm if the first well is large enough to justify it.”
    Emery put down a well, which was completed in October or November, 1876. It averaged from five to ten barrels per day, and the royalty was paid to Stoddard. No other wells were drilled on the land.
    Plaintiff produced three witnesses, who testified to the effect that, at the time- of the execution of the lease, the agreement was that Emery should put down wells to develop the land and protect the lines, and to offset the wells put down on adjoining lands. These terms were not inserted in the lease. The lease was drawn by the attorney for Emery, who read it to Stoddard' while the latter held a copy. He read it fast, and Stoddard told him that he could not follow him. The lease was then signed.
    Berry, the attorney for the defendant, testified on his behalf that he read the lease the second time to Stoddard, and that, according to his recollection, the conversation as to the development of the land occurred after the execution of the lease.
    There was also evidence that the defendant had two oil wells on his own land adjoining the Stoddard farm, on the north, and other parties one on land to the west; and expert testimony that these wells were reducing the value of the farm by taking the oil out of it; and that at least two more wells ought to have been drilled on the farm to protect its lines.
    On the 6th of April, 1878, Stoddard drew an order requesting the United Pipé Line to transfer the royalty, after April 1st, to Janes, the plaintiff.
    They went together to Emery to get his consent to the transfer. He refused, and said of Janes: “ Let him get his oil, if he can. I will never give him a barrel.”
    This action was commenced April 12th, 1878. Counsel for plaintiff asked the Court to charge:
    1. That if the jury believe that, contemporaneous with the execution of the written lease, there was a parol agreement made by defendants with Stoddard, providing for the drilling of a sufficient number of wells on the leased premises to develop the land, and to protect the same for oil purposes, within a'reasonable time, it was the duty of Emery to carry out said agreement, without which he acquired no title to the land for oil purposes, and the plaintiff is entitled to recover.
    2. That if the jury believe that Stoddard and wife were induced to sign this lease by the promises of Emery to develop the land for oil purposes, and to put down a sufficient number of wells to protect the same from wells on contiguous territory, that a neglect and a refusal to carry out such promise would be a fraud, and vitiate the lease so obtained.
    3. That the true construction of a lease for oil purposes, without any special covenants therein expressed is, that property so leased shall, within a reasonable time, be worked, and oil produced on so much of the land as is capable of producing oil in paying quantities.
    4. That this lease is a license to occupy the land for oil purposes, and the right to retain possession is dependent upon the performance of the agreement to produce oil according to the terms of said agreement.
    5. That a refusal to pay the royalty to the owner of the soil is a forfeiture of the right to "occupy the land in controversy.
    The Court charged the jury, inter alia, as follows :
    “•If this question of what the contract was is submitted to you, and you should find that the lease reads just as the plaintiff alleges it ought to read, we still think that, upon the provisions of this agreement, the plaintiffs have brought their action prematurely. The only condition or stipulation in this lease which'looks towards a forfeiture, is that which relates to the first well. The lessee agrees to put down the first well in four months, and if not finished in eight months, his estate is defeated. Beyond that the penalty for this failure to perform is not stated. If Emery agreed to do what was necessary to protect the lines, he ought to have done it. He ought, at least, to have put down the second well provided for in this lease, and the eight months in which this well should have been put down expired on the 26th day of December, 1876. This suit was brought in about fifteen months afterwards. During this time this well was producing and the royalty regularly paid to Mr. Stoddard, who was in possession. The evidence does not disclose that Mr. Stoddard thought or communicated to Mr. Emery that any further work was necessary on that lease. There was no request on his part to proceed with the development of the land, or notice that other wells were needed along the line to protect the land. Therefore there was no refusal on the part of Emery, except that which grows out of the single circumstance that these wells were not put down during the period of fifteen months. If Mr. Emery’s attention had been called to this, and he had expressly declared, ‘ I am not going to perform this lease,’ there might have been something to submit to the jury. But Mr. Emery put down the first well contemplated by this agreement; he has continued to deliver, or did, until about the time of bringing this action, the royalty realized; and while it may be that an action upon these covenants may not be an adequate remedy, yet the plaintiff very clearly had a right to such an action ; and we are inclined to hold that if he brings an action of ejectment, instead of relying upon these covenants, he ought to notify his lessee to proceed to perform the covenants relating to development, or he will elect to treat the contract as at an end. For this reason we are of the opinion that the plaintiff is not entitled to recover. We come to this conclusion very reluctantly. We have tried to see our way to a submission of this case to the jury, but we cannot give this question to the jury.
    “ Under the view that we entertain, gentlemen, there is nothing for the jury in this case. We have disposed of the case upon this legal question. We will therefore direct the clerk to take your verdict from the box in favor of the'defendant.”
    The Court answered the points submitted by the plaintiff’s counsel as follows:,
    1. This, in the language in which it is put, we deny. Mr. Emery had acquired title to this land by the drilling of the first well, according to the terms of the agreement; and that title could only be divested by legal proceedings based upon non-performance or a refusal to perform some other portion of the contract.
    2. It would be a fraud, but we are not prepared to state, on the evidence in this case, a forfeiture of the lease would necessarily follow, the first well having been completed in accordance with the lease.
    3. We think that is correct. But the mode of enforcing a covenant of that kind is a question upon which we are not required by this point to express an opinion.
    4. This fourth point we charge qualifiedly. Our answer to this is, that this lease was a license to enter until after the first well was down; the instrument then took effect as a lease, and Mr. Emery was bound, in accordance with its terms, to render the royalty agreed.
    5. There being no evidence which we feel justified in submitting to the jury on that question, we do not feel called upon to give any expression upon the point.
    Plaintiff excepted to the charge and answers to the points.
    Verdict for defendants, upon which judgment was entered.
    The plaintiff then took out a writ ofhrror, assigning as error the answers and charge as above set forth.

      W. B. Chapman Son, C. B. Curtis, and John P. Vincent for plaintiff in error.
    If Emery, at the time he obtained this lease upon the faith of the contemporary parol agreement, did not intend to perform it, it was secured by fraud; and if afterward he neglected to protect the line and develop the land, it is no less a fraud: Coal Co. v. McShain, 25 P. F. Smith, 245.
    Notice to defendant of non-performance or forfeiture was not necessary, agreements for concurrent occupancy being always construed as conditional: Hamilton v. Elliott, 5 S. & R., 375 ; Sheaffer v. Sheaffer, 1 Wr., 525.
    Destroying the value of the land is such a fraud that receiving the royalty would not confirm the lease: McHugh v. County of Schuylkill, 17 P. F. Smith, 396 ; Chamberlain v. McClurg, 8 W. & S., 36.
    The omission from a written contract of a verbal promise, which was the inducement for its execution, is a fraud: Graver v. Scott, 30 P. F. Smith, 94 ; Greenawalt v. Kohne, 4 Norris, 369.

      Berry & Elliott and A. G. Olmstead for defendants in error.
    Ejectment to recover the land cannot be maintained though covenants are broken: Soper v. Guernsey, 21 P. F. Smith, 223 ; Perry v. Scott, 1 P. F. Smith, 119 ; Garver v. McNulty, 3 Wr., 473 ; Cook v. Trimble, 9 Watts, 15.
    Evidence of fraud or mistake should be clear, precise, and indubitable: Stine v. Sherk, 1 W. & S., 195 ; Miller v. Smith, 9 Casey, 386 ; Martin v. Berens, 17 P. F. Smith, 459 ; Brawley v. The United States, 6 Otto, 173.
   Per Curiam:

The case of Hamilton v. Elliott, 5 S. & R., 375, so much relied on by the learned counsel of the plaintiff in error, was a grant upon an express condition. It was held that, upon breach, the estate reverted without the necessity of re-entry, as the grantor was in possession. There was but one condition in the lease in this case, — that the lessee should commence a well in ten days and complete it in four months, but if not completed in eight months the lease should be forfeited. All the other agreements, both those in the writing and those set up by the. parol evidence, offered and received as contemporaneous, were mere covenants, and the breach of any or all of them could not be construed to operate as a forfeiture. The answers of the learned judge to the points, and his instructions to the jury, give the plaintiff no good ground of complaint.

Judgment affirmed.


text:
    Blair versus Peck et al.

    1. In a lease of an oil tract the lessee covenanted and. agreed “ to continue with due diligence and without delay to prosecute the business to success or abandonment, and, if successful, to prosecute the same without interruption for the common benefit of the parties aforesaid.” A later clause provided that “ the party of the second party covenants to drill and have a well ready for pumping within six months from this date, and commence operations within thirty days from the date of this instrument. If said second party shall cease operations at any time for the term of three months, it shall work a forfeiture, and said first party shall have the right and privilege to take full possession, as if this lease had never been made. Time is the essence of this contract.” Held, in an action of ejectment by the lessor to recover possession, one well having been drilled within six months, and there being no cessation of operations as to it, that a neglect to drill other wells during a period of two years did not work a forfeiture of the lease.
    2. The remedy for any breach of the covenant to prosecute the business for the common benefit is not by ejectment, but by an action of covenant.
    Error to the Court of Common Pleas of McKean County.

    Ejectment by James E. Blair against L. G. Peck, Wesley .Chambers, J. T. Jones, L. F. Freeman, John M. Coburn, and the Bradford Oil Company (Limited), to recover possession of a tract of land in said county, leased by plaintiff to L. G. Peck, one of the defendants, upon the ground of alleged forfeiture.
    Upon the trial before Williams, P. J., plaintiff proved the following facts:
    The plaintiff and Peck entered intoan agreement, July 17th, 1875, by the terms of which the former leased to the latter his farm of one hundred and fifty-four acres, more or loss, Peck to have the sole and exclusive right to bore for oil, salt, water, coal, iron, minerals, etc., and gather and collect the same for twenty years from the date of the agreement, for which he was to pay the plaintiff one-eighth part of all the product. The material portions of the agreement were as follows:
    “ The party of the second part covenants and agrees at all times to permit the party of the first part, or his agent, to enter the premises for the purpose of inspecting the operations, examining the books, and ascertaining how much oil has been pumped, or other product obtained ; and also to continue with due diligence, and without delay, to prosecute the business to success or abandonment, and, if successful, to prosecute the same without interruption for the common benefit of the parties aforesaid.
    “ And the party of the second part, for himself, his heirs, executors, administrators, and assigns,further covenants and agrees with the said party of the first part, his heirs, executors, administrators, and assigns, that, upon the completion of the drilling or boring of any -well upon said premises, the same shall be immediately tubed and seed-bagged below the lowest fresh water vein or course therein, in a proper manner to exclude the surface or fresh water from the lower part of such well, and thoroughly pumped and tested for oil; and that the party of the second part, his representatives, assigns, or those holding through, under, or for him, shall not at any time remove the tubing or seed bag from any well on said premises in such a manner as to aifect or interfere -with the flowing or production of oil from any other well, without the consent of the said party of the first part, his representatives, assigns, or the person or persons holding interests under or through said first party; and that all wells on said premises shall at all times be kept tubed or seed-bagged, as above provided for, in such a manner as to exclude the surface or fresh water from the lower part thereof. The party of the second part covenants to drill and have a well ready for pumping within six months from this date, and commence operations within thirty days from the date of this instrument. If said second party shall cease operations at any time for the term of three months, it shall work a forfeiture, and said first party shall have the right and privilege to take full possession as if this lease had never been made. Time is the essence of this contract.”
    The lease was soon afterwards assigned to defendants, who entered into possession under it. They commenced drilling about the close of July, 1875, and finished a well about the last of the succeeding October. It produced from ten to thirty-five barrels of oil a day, and was at first a flowing well, but was afterward pumped. In May or June, 187(1, the defendants drilled another well, which was a pumping-well, and produced, the plaintiff testified, rather more than the first. Nothing else was done in the way of drilling for oil down to the time of the commencement of this suit, September 6th, 1878. Testimony was given to show that wells for oil were in the meantime drilled by the Bradford Oil Company and others on lands surrounding the farm in question, and so near to it as to draw the oil from it. Plaintiff received his proportion of oil from the wells drilled.
    January 12th, 1877, the plaintiff served a written notice on the defendants, requiring them to commence within sixty days three wells in described localities on the farm, and “also to continue with due diligence, and without delay, to prosecute the business of boring for oil on said Blair farm, for the common benefit of both parties, in accordance with the stipulations and conditions of a lease or contract, dated July 17th, 1875, ... or else abandon said Blair farm, so that said Blair may prosecute said work, and protect his interests.”
    The Court directed a judgment of nonsuit to be entered, and subsequently discharged a rule to strike it off the record,
    The plaintiff took out a writ of error, assigning as error the refusal of the Court to set aside the judgment of non-suit.

      R. Brown, B. D. Hamlin, A. G. Olmsted, G. A. Berry, and M. F. Elliott for plaintiff in error.
    According to the view taken by the Court below, the defendants, having drilled the one well within six months from the date of the lease, and not having neglected or refused for three mouths to receive the oil Sowing therefrom, had not forfeited their rights under the lease, though they had refused for two years to proceed to develop the farm as agreed upon. If this is correct, they could hold the possession, without doing more for the entire period of the lease,, and destroy the value of the farm for oil purposes.
    If plaintiff cannot recover in ejectment, he is without remedy. The damages could not be ascertained in covenant.
    Independent of the express covenants in the lease, where a lease is made for oil purposes only, and for a limited time, it is’apparent that the parties contemplate a full and complete development of the lands.
    The clause providing that the work shall be prosecuted with due diligence without interruption has no reference to the first well, nor does the clause providing that if the-lessee shall cease operating for three months the lease shall' be forfeited, refer to that well. The purpose of these clauses' was to insure continuous development after it had been ascertained that the farm contained oil in paying quantities.
    Time was made of the essence of the contract: Brown v. Vandergrift, 30 P. F. Smith, 148.

      J. B. Brawley and Henry King for defendants in error.
    The plaintiff’ claims that the clause providing for a prose* cution of the business without interruption means the constant sinking of wells, and that the clause created a condition, the breach of which worked a forfeiture. No just construction- can place such meaning upon the words or convert it into a condition, much less a condition the breach of which would work a forfeiture : 2 Cruise on Real Property, 2 ; 4 Kent Com., 130 ; 1 Wash. Real Prop., 316 ; Paschall v. Passmore, 3 Harris, 307 ; McKnight v. Kreutz, 1 P. F. Smith, 232.
    To limit the word “ operations ” to mean only “ sinking wells ” would give the word a narrow and restricted meaning in favor of the lessor. That construction would lead to absurd results: Rynd v. Oil Co., 13 P. F. Smith, 402.
   Per Curiam :

The lease in this case contained these provisions : “ The party of the second part covenants to drill and have a well ready for pumping within six months from this date, and commence operations within thirty days from the date of this instrument. If said second party shall cease operations at any time for the term of three mouths, it shall work a forfeiture.” A previous covenant provided that “ if successful ” he should “prosecute the business without interruption for the common benefit of all the parties.” It is not denied that the well had been drilled, and that it was in operation without ceasing, but it was contended that the defendant was bound to drill and operate other wells so as to prevent the oil from being exhausted by wells on contiguous property. This might have been provided for by conditions similar to the one recited, but in their absence the learned judge was entirely right in holding that there was no forfeiture. The remedy on the covenant to prosecute the business for the common benefit was not by ejectment, but an action of covenant.

Judgment affirmed.