author: Mr. Justice Gordon

text:
    Hanover Junction and Susquehanna Railroad Co. versus E. Burd Grubb and Paris Haldeman, doing business as E. Haldeman & Co.
    1. After the approval of an Act of Assembly incorporating a company, conditional subscriptions to the capital stock of the company are valid, and this though made before letters patent are issued, the company having afterwards fulfilled conditions necessary to their issuance.
    2. It may be shown by the acts and declarations of the party making a conditional subscription that there has been a release or waiver of the conditions, the fulfilment of which entitled the company to a recovery at law, and it is error to refuse testimony of such character.
    3. Where the act of incorporation of a railway company provided that the minimum capital should be 5000 shares of $50 each, with the privilege of increasing, and that it might be subscribed for or disposed of “ in whole or in part, from time to time, as the board of directors may think proper,” and clothed the company with full powers of a corporation upon a subscription of ten per centum of its capital stock and payment of one dollar per share, it is not necessary that the whole amount of- the minimum capital should be subscribed to enable the company to recover from subscribers.
    4. Where the condition of a subscription of stock was that the amount thus subscribed should be devoted to the building of a designated portion of the railway and paid when the sum of §100,000 shall have been subscribed for that purpose, and the act of incorporation provided that subscriptions may be valid, by the party making the same, on the payment of one dollar to the commissioners for each share for the use of the company; and when ten per centum of the capital stock shall have been subscribed and one dollar paid on each share, letters patent should issue, such conditional subscription being within the power of the corporation to take, the stock contract, with the loss of its absolute character, lost the incident of partial payment, and such partial payment is not necessary to enable the company to recover.
    5. Any cause which may work a forfeiture ol the charter of a company is not the subject of inquiry collaterally, and is not matter of defence to an action brought by the company upon a subscription to the capital stock.
    May 3d 1876.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson and Woodward, JJ. Williams, J., absent.
    Writ of error from the Court of Common Pleas of Lancaster county: Of May Term 1876, No. 77.
    This was an action of assumpsit brought by the Hanover June-, tion and Susquehanna Railroad Company, against E. Burd Grubb and Paris Haldeman, doing business as E. Haldeman & Co., by summons issued July 21st 1874, upon a subscription made by Paris Haldeman, on the 12th of October 1872, of 400 shares of stock in his firm’s name, and for the firm, the authority to do which was not disputed.
    The Act of Assembly by which the plaintiff was incorporated, approved the 28th of March 1872, conferred all the powers necessary to construct, equip, use and manage the railway, and branches to be by them constructed, with capital stock of 5000 shares of $50 each, * * * to be subscribed for or disposed of in whole or in part from time to time as the directors deem proper, with power in the stockholders to increase the same from time to time, not to exceed 10,000 shares, * * * and the company may issue bonds in a sum not less than $100, for such sum as they deem expedient, and to secure the same by mortgage on their property and franchises.
    They had power to locate and construct their railway, with single or double track, beginning at a point at or near Hanover Junction in York county, extending to the west bank of the Susquehanna river in York county; to build a bridge across the Susquehanna, to connect with any other railroad, to extend their railroad on the west side of the river to said bridge, and across on the same to points of annexion.
    Subscriptions may be valid by the party making the same on payment of one dollar to the commissioners for every share subscribed ; when ten per centum of the capital stock, as provided by the act, was subscribed, and one dollar paid on each share, letters patent would be granted, as provided by sect. 2, Act 19th February
    They might construct branch roads, not exceeding ten miles in length, to connect with other roads or to cross at grade.
    In respect to its construction of roads, branches and extensions, it was placed under the Act of 19th February 1849, except as otherwise provided in their act.
    On the 12th of September 1872, one of the corporators resigning, Paris Haldeman was elected, and he accepted the position. On the same day he, with Messrs. Watts & Hiestand, were appointed a committee to solicit subscriptions in Marietta, Lancaster county, and vicinity. Haldeman & Oo. had two furnaces in Lancaster county, near Marietta.
    A subscription book, marked No. 1, recited the act of incorporation as authorizing the construction of a road in York and Lancaster counties, the capital stock as fixed at $250,000, ten per centum of which must be subscribed; one dollar per share paid thereon, before letters patent and legal existence, and that the subscribers desiring to carry it out in good faith, and at the earliest moment, agreed to pay for every share, as found therein affixed to their names, the sum of $50, in such manner, as the directors designated; then, as citizens of Marietta apd vicinity, they subscribed on the following condition:—
    “ That the amount thereby subscribed shall be devoted to the building and equipping of the extension of the Hanover Junction and Susquehanna railroad, according to the survey made by the Philadelphia and Reading Railroad Company, the same having been adopted at the last meeting of the Hanover Junction and Susquehanna Railroad Company, and that there should be a first class station at Marietta; * * * the said subscriptions shall only be paid when the sum of $100,000 shall have been subscribed for this, purpose by citizens residing at or near the line of the said extension in Lancaster county.”
    The court below, Livingston, P. J., directed a nonsuit, which appeared to be based upon the following propositions submitted by the defendants, no opinion having been filed.
    1. The directors had no authority to make calls, for the reason that there were not $100,000 subscribed, in compliance with the conditions under which Mr. Haldeman’s subscription was made.
    2. Because there never has been, and there is no proof of there having been, subscribed to the capital stock of the company 5000 . shares of $50 each, in all $250,000.
    3. Because there was not $1 per share paid on Mr. Haldeman’s stock at the time of subscribing, nor at any other time.
    4. Because it appears from the testimony that this call was made to carry out what witness calls the eastern division of this road, between Landisville and Marietta, which was in reality an extension of the main line authorized from Hanover Junction to the Susquehanna, no part of which had been made or put under contract.
    5. Because the provisions of the Act of 1849, embraced in the charter of this company, declare that if the main line of this road is not commenced within three years from its date, the charter shall be null and void; there having been no such commencement, no call can be made..
    The plaintiff contending that so far as these objections to payment affected the franchise of the corporation or worked its forfeiture, they could not thus be inquired into collaterally, offered to show that so far as they were -sustained by the conditions of the subscription, they were waived by the defendants, the rejection of which constituted the first eleven bills of exception. The 12th and 13th were to the direction of a nonsuit.
    In the subscription book No. 1, subscriptions to the amount of $79,200 were made.
    A subscription book No. 2 was made unconditional in its terms, dated December 30th 1872, for 600 shares, and January 4th 1873, for 3 shares, and one dollar paid on each share, upon a certificate of which, it being One-tenth, as required by the act, letters patent issued, dated December 30th 1872.
    Four hundred shares of these subscriptions were transferred to Subscription Book No. 1. Haldeman had subscribed 50 shares in No. 2, with the understanding that they should not be considered additional to the subscription of 400 in book No. 1. He paid $50 on this subscription.
    There had been also transferred into book No. 1, subscriptions from book marked N, of 30 shares, conditioned that the eastern division should be built on the line finally adopted, and three shares subscribed in No. 2, after the letters patent issued; and at this time the subscriptions in the books of the company actually amounted to $108,850. To obviate the objection that $100,000 had not been subscribed in compliance with the conditions of No.l, upon which the 400 shares of Haldeman had been subscribed, the plaintiffs offered evidence of what was said by Haldeman, while preparing a certificate for letters patent, about the subscription mentioned in the certificate and recited in the letters patent afterwards, as being considered part of the $100,000 subscription mentioned in the subscription of Haldeman & Co., of 400 shares; that Haldeman, at or about the time of preparing the certificate of letters patent, stated and agreed that the condition contained in the subscription book No. 1, should be taken and considered to be altered and modified, so that if the number of shares appearing in that book to have been subscribed, with the number of shares mentioned in the certificate should together amount to $100,000, that would be a sufficient compliance with the condition; that in the month, of December 1872, Haldeman & Co. waived the condition that $100,000 should be subscribed, and offered all three books in evidence, with evidence to show that Haldeman agreed that if the subscriptions in No. 1 and No. 2 amounted to $100,000, the condition in No. 1, as to him, should be considered complied with.
    The plaintiff also offered to prove that all the funds of the corporation, except the portion expended on the west side of the river, had been expended in the construction of this railroad from Marietta to the connection with the Reading and Columbia railroad on the east side; that the company let the contract for the construction of the eastern end of this road, from near Landisville to Marietta, and under that contract constructed over six miles of the road; that at the time of the letting of said contract, the company agreed to build the eastern end first, and appropriate the subscriptions in the books 1, 2, and N, for the construction of the eastern end, east of the Susquehanna; that the shares in the letters patent were agreed by defendant at the time of their subscription, and the making of the certificate to be additional to those in No. 1, and were to be applied to the construction of the eastern division from the Reading and Columbia railroad to Marietta; that the company were largely in debt and had issued bonds under mortgage to a large amount, which debt was incurred in the construction of the eastern division between Marietta and the junction with the Reading and Columbia railroad, and the bonds had been issued, applied and paid out for the same purpose, which debt cannot be paid except by collection of the subscriptions made for the construction of that part of the road; that at the meeting on December 3d, the defendants consented to the change that the cost of constructing the proposed new route would be some $50,000 less than the old route, which was stated in Haldeman’s presence and which he agreed to.
    These offers were all rejected by the court below, and were comprised in the first eleven bills of exception.
    The offers were classed to meet the conditions upon which the subscription No. 1 was made, and upon which recovery was sought— that the amount subscribed shall be devoted to building of the extension of the Hanover Junction and Susquehanna railroad according to the survey made by the Philadelphia and Reading Railroad Company, which had been adopted at the last meeting of the Hanover Junction and Susquehanna Railroad Company, and that they should only be paid when $100,000 had been subscribed for this purpose by the citizens residing at or near the line of the said above extension in Lancaster county.
    The conditional subscription No. 1 was made after the company had been incorporated by the Act of Assembly, and before the subscription No. 2 had been made upon which the letters patent issued, and the main point of controversy was whether there had been a waiver on the part of the defendant of the condition that $100,000 should be subscribed by the addition to it of the subscription No. 2, and whether such waiver could be shown. The court below held, by its refusal to admit the testimony, that such waiver could not be shown.

      James Ryon, G-. M. Dallas, George Nay,man, P. D. Baher and W. TI. Sensei, for plaintiffs in error. —
    Waiver may be proved by words, writings, acts, even silence: Shaw v. Turnpike, 2 P. & W. 461. The defendants had agreed when $100,000 were subscribed in two books they should be liable; had encouraged fellow directors and stockholders to build the road in the belief that they were liable, the company agreeing to appropriate more than $100,000 to the building of their part of the road; had induced the contracting of a large debt for that purpose; and Haldeman as director had voted for a resolution to place the road from Landisville to Marietta under contract as soon as subscription to stock amounted to $100,000; they were therefore estopped from asserting the $100,000 were not subscribed — for even if fraudulently induced to subscribe,' these facts, with their other acts, would have been evidence against them : Ogilvie v. Insurance Co., 22 How. 380.
    1. No authority to make calls because the conditions upon which $100,000 were subscribed were not complied with. Being before letters patent the conditions were void, and the subscription therefore was absolute: Bavington v. Railroad Co., 10 Casey 362; Bedford Railroad Co. v. Bowser, 12 Wright 34; Railroad Co. v. Biggar, 10 Casey 455; Pitts. & Con. Railroad Co. v. Stewart, 5 Wright 58. Haldeman could not make this defence after attending a meeting of stockholders, voting on his 400 shares for a resolution recommending president and directors to put the road from Landisville to Marietta under contract as soon as subscription to stock amounted to $100,000; attending meeting of board, noting the amount of stock to be $60,000, and declaring that when $100,000 are subscribed he had a man to take $100,000 of 7 per cent, bonds; examining the contract let between those places; hearing a resolution passed at a previous meeting which declared $100,000 had been raised, and having been appointed and serving on a committee to assure Mr. G-owen that $100,000 had been subscribed: Hays v. Pitts. & Steub. Railroad Co., 2 Wright 89.
    2. That the full amount, 5000 shares, should be subscribed under this charter not necessary: Minor v. Mechanics’ Bank, 1 Pet. 84; Railroad Co. v. Chapman, 21 Am. Law Reg. 80 (N. S., vol. 12); Caley v. Philadelphia & Chester Railroad Co., 2 Weekly Notes 313 ; Plankroad Co. v. Thatcher, 11 New York (1 Kern.) 107; United States Digest 1874, 223, pl. 22; Reese v. Bank of Montgomery, 7 Casey 78; Curry v. Scott, 4 P. F. Smith 270.
    3. One dollar per share had not been paid. Turnpike v. Henderson, 8 S. & R. 219, has not been followed except where requirement of the act was the same. Corporation, may take subscriptions without payment: Plankroad v. Brown, 1 Casey 156; Commonwealth v. West Chester Railroad Co., 3 Grant 201; Lake Ontario Railroad Co. v. Mason, 16 N. Y. 451. Estopped by subsequent acts as corporator and director : Garrett v. Dillsburg & Mechanicsburg Railroad Co., 2 Weekly Notes 63 ; Grayble v. Turnpike Co., 10 S. & R. 272; Ryder v. Alt. & Sang. Railroad Co., 13 Ill. 516 ; Highland Turnpike Co. v. McKean, 11 Johns. 98.
    4. The call was for the purpose of building extension, the main line not having been touched-. Defendants are estopped by their acts, cases cited supra; Plankroad Co. v. Brown, 1 Casey 156; Railroad Co. v. Stewart, 5 Wright 58; Clark v. Mon. Nav. Co., 10 Watts 364; Bavington v. Railroad Co., 10 Casey 364 ; Hayes & Black v. Railroad Co., 2 Wright 89 ; Railroad Co. v. Bowser, 12 Id. 34; Railroad Co. v. Johnson, 30 N. H. 407; Railway Co. v. Lacey, 3 You. & Jer. 86 ; Crossman v. Ferry Bridge, 2 Casey 71. Forfeiture for the state alone: Commonwealth v. Pittsburgh, 5 Wright 282; Coil v. Pitts. Fem. Coll., 4 Id. 439; Buck Mountain Coal Co. v. N. & C. Co., 14 Id. 91; Sparhawk v. Union Passenger Co., 4 P. F. Smith 401; Cumberland Valley Railroad Co.’s Appeal, 12 Id. 227.
    5. Under Act of 1849, the main line not commenced within three years from its date, charter void. Some work had been done on the main line. Under the act the part built was as much the main line as any other. Charter cannot be attacked collaterally: Cochran v. Arnold, 8 P. F. Smith 404, and cases cited supra.

      Thomas H. Franklin, George M. Kline, O. J. Dickey, H. M. North and S. H. Reynolds, for defendants in error. —
    1. The minimum capital must be subscribed in stock before recovery: Bedfield on Railways, section 18, p. 7, section 51, p. 175; Green’s Brice’s “Ultra Vires,” p. 105; Littleton Manufacturing Co. v. Parker, 14 N. H. 543 ; Contoocook Valley Railway Co. v. Barker, 32 Id. 363; N. H. C. Railroad Co. v. Johnson, 10 Foster 390; O. & L. Railroad Co. v. Veazie, 39 Maine 571; Penobscot Railroad Co. v. Dummer, 40 Id. 172; Same v. White, 41 Id. 512; Gray v. Portland Bank, 3 Mass. 364; Prop. N. Bridge v. Story, 6 Pick. 45 ; Salem Mill Dam Co. v. Ropes, 9 Id. 187; Central Turnpike Co. v. Valentine, 10 Id. 142; S. Branch Railroad Co. v. Gould, 2 Gray 277; T. & G. Railroad Co. v. Newton, 8 Id. 596 ; C. & W. Springfield Bridge Co. v. Chapin, 6 Cush, 50; W. & N. Railroad Co. v. Hinds, 8 Id. 110; Atlantic Cotton Mills v. Abbott, 9 Id. 423; Lex. & W. Cam. Railroad Co. v. Chandler, 13 Met. 311; Harlem Canal Co. v. Seixas, 2 Hall 504; Same v. Spear, 2 Id. 510; R. & W. Plankroad Co. v. Wetsel, 21 Barb. 56; Bend v. Susquehanna Bridge Co., 6 Har. & Johns. 128 ; Hughes v. Antietam Manuf. Co., 34 Md. 316; Haun v. M. & J. G. Road Co., 33 Ind. 103; Hain v. N. W. G. Road Co., 41 Id. 196; Fox v. Allensville Co., 46 Id. 31; Shurtz v. Schoolcraft Railroad Co., 9 Mich. 269; P. & R. I. Railroad Co. v. Preston, 35 Iowa 115. 2. That $1 per share had not been paid on the shares at the time of subscribing. 3. No power to make calls, as the $100,000 had not been subscribed. 4. No part of the main line had been put under contract. 5. Work had not been commenced within three years.
   Mr. Justice Gordon

delivered the opinion of the court, May 29th 1876.

The subscription of the defendants, to the stock of the plaintiff’s road, was properly treated as conditional. By their contract they obligated themselves to pay only when the subscriptions amounted to one hundred thousand dollars, and, by the same contract, the moneys so raised were to be applied exclusively to the building and equipping the proposed extension as surveyed by the Philadelphia and Beading Eailroad Co. These subscriptions were made after the approval of the Act of March 28th 1872, by which this company was incorporated, and under which it was organized. It follows, that that class of cases, of which Bavington v. The Pittsburgh and Steubenville Railroad Co., 10 Casey 358, is a representative, does not apply to this controversy, for we have here an existing corporation clothed with sufficient power to make any contract which it may deem proper for its own welfare; hence, the governing cases are those of which The Pittsburgh and Connellsville Railroad Co. v. Stewart, 5 Wright 54, is a type. It is true, the plaintiff was to have its letters patent only when ten per centum of its capital stock had been subscribed, but these letters were not essential preliminaries of the company’s organization, for that had been effected by the act itself, but were rather ancillary and supplemental to it.

. Undoubtedly, even ih this case, these letters could not have been obtained except upon the exhibition of absolute subscriptions to the stock of this company, equal to ten per centum of its capital, and upon which one dollar per share had been paid; but this was done, and the patent obtained; thus this corporation was clothed with all the powers necessary to accomplish the object of its creation. As the company was only in a situation to demand payment, when the conditions in the contract with the defendants had been fulfilled, it was incumbent on it to show, either the accomplishment of these conditions, or a release or waiver of them by the parties in interest. Now, whilst the plaintiff neither did nor proposed to prove a strict fulfilment of that stipulation in the agreement, which provided that the subscription should be paid only when the sum of one hundred thousand dollars had been subscribed, nevertheless, much testimony was given to show that Paris Plaldeman, who subscribed for the firm of which he was a member, by his acts and declarations, did waive the performance of the above-named stipulation. This testimony should have been submitted to the jury. From the evidence, it appears, that the company has expended much money upon the very branch road, for the building of which, this subscription, among others, was made, and this would form a consideration sufficient to support a waiver of the condition, if the jury should find such waiver was made. To this end, also, the offers of evidence, as set forth in the plaintiff’s specifications of error, numbered from one to eleven inclusive, should have been admitted, for they were all designed to show that which was pertinent to the plaintiff’s case, to wit, such acts and declarations of Haldeman as would estop him and his firm from setting up the condition to defeat the plaintiff’s claim, and also what, in connection with this, was equally material, the acts and expenditures of the company in the letting and construction of that part of the road, to promote which these conditional subscriptions were made. Upon what theory the court acted, in directing the entry of the judgment of nonsuit, we know not, as no opinion was filed; but we suppose that that theory is embraced in one of the several points made in the argument for the defence as submitted to us. We will review them seriatim. They are, 1. That as the act of incorporation provides for a minimum cajiital of $250,000, and as that amount has not been subscribed, the plaintiff is not qualified to enforce the subscriptions now made.' Much learning and research have been displayed, by the counsel for the defence, in the collection of authorities in order to fortify their case. We are, however, saved the trouble of reviewing'them from the fact that they are not applicable to this controversy, for, as the act of incorporation is the supreme law of the case, we must follow its terms. That instrument provides, that the capital stock of 5000 shares, of fifty dollars each, may be subscribed for or disposed of, “ in whole or in part,” from time to time, as the board of directors may think proper. This, certainly, empowers them to contract for the sale of part of their stock, and, if they may make a contract, surely it must be implied that they may enforce such contract when made, otherwise it would involve the absurdity of the grant of a power that could not be executed. In this connection it may be pertinent to inquire why is this company, by the fourth section of the act, clothed with the full powers of a corporation, upon a subscription of ten per centum of its capital stock, if, notwithstanding, it must remain at a dead lock until the whole of that stock is disposed of? What does this grant of plenary power mean if it cannot be exercised ? To resolve these questions on the theory of the defence is quite impossible. But if we concede that the directors have the power to dispose of and collect the money for so much of the company’s stock as they may find market for, and, from the proceeds, put their road in such a state of forwardness as that they may mortgage it for the money necessary for its completion and equipment, the statute becomes clear and unambiguous and its wisdom apparent.

2. The argument here presented is, that the plaintiff cannot enforce the payment of this subscription because one dollar per share was not paid thereon at the time it was made. But if this subscription is conditional, as the defendants contend it is, how is it that one dollar per share became payable absolutely ? Certainly nothing of that kind is found in the contract, and the power of the company being ample to make such contract, it follows that neither party can insist upon anything not found in it, and the converse is also true, that either party can insist upon the performance, by the other, of what is found in it. This contract might have been, as was the case in the Railroad v. Stewart, payable in materials to- be delivered at a future period, and then, we may presume, it would not have been contended that one dollar per share was payable in cash. But we cannot see that the principle is altered by the fact that the contract is for money wholly payable on the happening of some future contingency; both are conditional, and pari ratione, if the one be good so is the other. The error consists in the supposition that the company could not receive subscriptions wholly conditional, but that they must be in part absolute '; but as the partial payment was to be made only on the absolute stock taken to secure the patent, it follows that when the stock contract lost its absolute character, it also lost the incident of partial payment, for, under the act, the one is necessarily dependent on the other.

The third point we pass over as involving questions of fact upon which the jury must pass; only saying that if the company cannot show to the satisfaction of that tribunal, that Haldeman agreed that all the subscriptions, absolute and conditional, might be considered in making the sum of one hundred thousand dollars, or that he waived, as already stated, by his acts or declarations, or by both together, that condition annexed to the contract, it will not be entitled to the verdict.

The fourth and fifth points of the argument for the defendants raise the question as to the validity of the plaintiff’s charter. The allegation is, that the charter has lapsed through the malfeasance or misfeasance of the company since the bringing of this suit. To support this, it has been shown that the plaintiff had confined its operations to one of its branches, and that it has done little or nothing upon its main stem, hence, it is argued that as there has been no bond fide commencement of the principal improvement within the period of three years, as prescribed by the Act of 1849, to the provisions of which this corporation was made subject, the charter, by the terms of that statute, has become null and void, and that, therefore, this company is not in a condition to maintain this or any other suit. We are not prepared to adopt this view of the case. Granted that the plaintiff has done that in consequence of which its charter may be forfeited, nevertheless we cannot, in this collateral proceeding, inquire into such matters. As was said by Justice Rogers in Irvine v. The Lumbermen’s Bank, 2 W. & S. 204, “.If there be anything settled beyond all cavil or controversy, it is- that the violation of a charter of incorporation cannot be made the subject of judicial investigation in a collateral suit.” McCully v. The Railroad, 8 Casey 25, has been cited as overruling the above-named and cognate cases. If, however, such were the intention, Mr. Justice Woodward, who delivered the opinion in that case, adopted an unfortunate method of expressing himself when he said, “ It is not only true as asserted in that case” (Irvine v. The Bank), “that the legality of an existing corporation cannot be inquired into collaterally, but, as has been held in many cases, the inquiry when directly made, can only be initiated by the attorney general or some other prosecutor who represents the people.” That case turned upon questions wholly different from those found in the present suit. Not only had the Pittsburgh & Connellsville Railroad Company not commenced operations within the period prescribed, but it had made no calls upon its stock subscriptions within six years; furthermore its project was formally abandoned, and the money of many of the subscribers who had paid was returned to them. On these facts it was held, firstly, that the company was bound, from analogy to the Statute of Limitations, to call in payments on its stock subscriptions within six years after their date or a presumption of abandonment would arise. Secondly, that all the facts taken together warranted the conclusion of an actual abandonment. In the present case it is not pretended that there has been any default of the company plaintiff, except that it has done its work upon the branch, for the making of which the defendants stipulated in their subscription, instead of upon the main line, but this, so far as the present inquiry is concerned, is no default at all.

The judgment is reversed and a venire facias de novo is awarded.


source: Caselaw Access Project

author: Mr. Justice Paxson

license: Public Domain

text:
    The American Life Insurance and Trust Co. versus Shultz.
    1. The death of the agent through whom a contraot has been effected does not exclude the testimony of the party dealing with him, under the Act of 1869, in an action against his principal.
    2. In an action brought against a life insurance company for the violation of an alleged contract to give a “ paid up policy” after the third payment upon a life policy, not expressed in the policy, evidence of the powers of the agents generally is inadmissible.
    3. Where a life policy has been issued upon proposals signed by the insured, and an action is brought against the company upon a contemporaneous verbal agreement to issue a “ paid up policy” after the payment of the third premium, it is error to reject evidence, on the part of the company defendant, of the powers of the agent through whom the insurance was effected.
    4. In an action brought against an insurance company with whom a life insurance has been effected, upon a contract to deliver a paid up policy after the third annual premium has been paid, the measure of damages is, not the amount of the premiums paid, since the action is not in disaffirmance of the contract, but the difference between the value of a paid up policy and the life policy held by the plaintiff.
    5. It is error to reject evidence of the difference of rates of insurance for a paid up policy and for a life policy where the question is whether a verbal contract had been made by an agent of an insurance company contemporaneously with the execution of proposals and delivery of a life policy, to deliver a paid up policy for the premiums paid, with participation in profits, offered to show the inherent improbability that such a contract was made.
    May 8d 1876.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson and Woodward JJ. Williams, J., absent.
    Error to tbe Court of Common Pleas of Lancaster county: Of May Term 1876, No. 69.
    This was an action of assumpsit, brought by David Shultz against The American Life Insurance and Trust Company to recover damages for the refusal on the part of the company to issue to him a paid up policy, after the payment of the third premium upon a life policy effected.
    The defendant company pleaded non assumpsit and payment with leave, &c., non assumpsit infra sex annos.

    Elisha Geiger was the agent of the company at Lancaster, and some time in the spring of 1866, upon his solicitation, Shultz signed an application for a mutual policy for the sum of $10,000 for the benefit of his wife.
    The terms for one of Shultz’s age were $81.80 per thousand per annum, with the provision that “ when the premium amounts to $50 or more, annually, one half may be paid in a note at twelve months with interest.”
    Shultz elected to avail himself of this provision, paid in cash $409, and gave his note payable in twelve months for $409 with interest. This was done each year, and the interest on the notes added to the cash payments of each year.
    Shultz alleged that Geiger said, when he made the application, whenever Shultz would pay up the third payment he could get a paid up policy for the premiums he had paid, and get dividends out of the concern whatever it would pay.
    Shultz also alleged that when Geiger brought him the policy and he made the payment, Shultz refused to take the policy because it was not according to the contract. Geiger replied, “ If you don’t take the policy, we will keep your money; you can’t get your money back; you had better go on and pay up the third payment and then you will get your paid up policy.”
    Geiger died soon after and Mr. Gara was appointed agent. Sub? sequent to the first transaction as above detailed, all of the business was conducted by Gara. Shultz continued his payments until after the third payment. Before this payment he told Gara he would demand a paid up policy; written on the back of an advertising card of the company signed by Gara, was “After this payment, you can get a paid np policy for the whole amount you have paid.” After several months and repeated solicitations Gara told him the company had changed their rules and -he could not get it.
    The fourth and fifth premiums were paid because he was told he would lose all he had paid. After the fifth, the premiums were paid under protest that they were paid because he did not wish to run the risk of forfeiture.
    On the 12th of December 1873, after making eight payments of $409, which, with the interest paid on the notes, amounted to $3869.01, he brought suit; the jury, finding for the plaintiff, awarded that amount as damages for the breach of the contract.
    On the trial of the cause the plaintiff offered himself as a witness, and was objected to because Geiger, the agent for the company, with whom the contract of insurance was made, was dead. He was admitted and this was the first error alleged.
    The defendant below offered to prove the powers of the agents of the American Insurance Company, and again what were Geiger’s powers during the alleged contract, both of which were rejected, and are the 2d and 3d errors.
    The defendant offered to prove “ What were the rates in 1866 for such a policy as Mr. Shultz testifies Geiger agreed he should have,” which was rejected, and is the 4th error.
    The 5th and 6th assignments of error are contained in the 7th.
    7th error. Instruction. “ If you find that it was part of the original contract for the policy, that after paying the third payment, the plaintiff would get a ‘ paid up policy ’ if he required it, and that the plaintiff was induced to sign the proposals by the representation of the agent of the company, that that condition would be part of and contained in the written contract, in the proposals when he signed them, and paid the first premium on the policy, and was omitted from the policy, and when the agent came to deliver the policy Shultz said he would not receive it, because it was not according to contract, and the agent replied, ‘ If you don’t take the policy we will keep your money; you can’t get the money back, &c.; further, you had better go on and pay up the third payment, and then you will get your policy, a paid up policy,’ then this omission of the special contract alleged should not be attributable to any fault of the plaintiff and you should find for the plaintiff whatever premiums or money he has paid, without interest; the plaintiff asks no more in this suit.”
    The 8th and 9th assignments were to the measure of damages “ the money paid” with 7th.
    The remaining assignments were to the answers to the defendant’s points.
    10th. 1st point. The acceptance of a policy agreeing with proposals signed, the retention of it and payment of premiums for some years without objection, debars disaffirmance of the contract and recovery of premiums paid. Affirmed with the qualification that a verbal promise made by the agent to obtain insurance and execution of the proposals, contemporaneously with the original contract, may be given in evidence to the disaffirmance of the contract in the proposals and policy.
    11th. 2d point. No suit can be brought to recover premiums paid until the policy has been delivered to the company. Affirmed if the jury find that a paid up policy was never demanded, or tendered on condition such demand be complied with, or tender refrained from because of the refusal to give a paid up policy.
    12th. 3d point. Payment of premium without objection for years without demand for a non-forfeitable policy, was in law a ratification and acceptance in its present form of the policy, and precludes recovery. Affirmed if plaintiff since its date paid premiums without making such demand, the alleged original special contract to deliver a paid up policy after the third payment would be deemed in law abandoned, and preclude recovery, this in submitting a question of fact of which there was no evidence.
    13th. 4th point. Local agents have no authority to .conclude absolutely a contract of insurance, nor can they alter one already made which the court declined to affirm, as assuming a fact not proved by any evidence in the case.
    14th. -5th point. If the contract was broken, it was broken when the policy of insurance was delivered, and action is barred by the Statute of Limitations. Negatived. The statute would not commence running until payment of third premium.
    15th. 6th point. No evidence can be given of the contract except the policy of insurance, unless on ground of fraud, accident or mistake. Negatived.
    16th. 7th point. Under the law and evidence defendant entitled to verdict. Negatived.

      Won: Aug. Atlee and Isaac HazWiurst, for plaintiff in error.—
    Within the spirit of the Act of 1869, Shultz incompetent: Karns v. Tanner, 16 P. F. Smith 305 ; Hanna v. Wray, 27 Id. 27. Rejection of evidence of powers of agents : Hays & Wick v. Lynn, 7 Watts 525; Moore’s Ex’rs v. Patterson, 4 Casey 512; Fire Association v. Williamson, 2 Id. 198. The policy defines rights of parties: West Branch Ins. Co. v. Helfenstein, 4 Wright 296 ; Hays & Wick v. Lynn, 7 Watts 525 supra; Moore’s Ex’rs v. Patterson, 4 Casey 512; Greenleaf’s Ev., vol. 2, sect. 59 ; Junction Railroad Co. v. Pennsylvania Railroad Co., 2 Weekly Notes 277 ; Irvine v. Buckaloe, 12 S. & R. 37 ; Fire Ins. Co. v. Massey, 9 Casey 225 ; Jordan v. Stewart, 11 Harris 247 ; Bank v. Bank, 1 Parsons 246. As to measure of damages, submit the following tabulated statement:—

    Defendant’s 1st and 3d points: Mecke v. Insurance Co., 8 Phila. R. 6; Leg. Int. 1871, p. 5. 6th point: Weisenberger v. Harmony Ins. Co., 6 P. F. Smith 442; Lee v. Guard Life Ins. Co., U. S. C. C. California Ins. L. J., January 76, p. 26; Bush v. West Chester Fire Ins. Co., 63 N. Y. 531.

      D. Cf. Rshleman, O. J. Dickey and S. H. Reynolds, for defendant in error. —
    As to evidence of-agent’s authority : Bennett v. Judson, 21 N. Y. 238, 239; Udell v. Atherton, 7 Hurlst. & N. (Exch.) 171; Mal. Iron Works v. Insurance Co., 25 Conn. 465 ; 1 Smith’s Lead. Cases 329, 6 Am. ed.; Bebee v. Hartford M. F. Ins. Co., 25 Conn. 51; Beale v. Park Ins. Co., 16 Wis. 241; Keeler v. Niagara Co., Id. 525; Insurance Co. v. Wilkinson, 13 Wall. 222; Adams Express Co. v. Schlessinger, 25 P. F. Smith 246; Tanner v. Oil Creek Railroad Co., 3 Id. 411; Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 517, 527; Powelton Coal Co. v. McShain, 25 P. F. Smith 238. As to the Statute of Limitations : 3 Am. Law Times 28, February No. 1876; Marton v. Ætna Life Ins. Co., s. c. Tenn. Ins. L. J., December 1875.
   Mr. Justice Paxson

delivered the opinion of the court, May 29th 1876.

We do not see any merit in the first assignment of error. There is nothing in the Act of 15th of April 1869, which in terms excludes the plaintiff below as a witness. But it is contended that he comes within the spirit of the act, which was intended to produce equality, and not to open the lips of one party while those of the other were closed. The answer to this is that the deceased person, Mr. Geiger, was not a party to the contract nor to this proceeding. He was merely the agent of the insurance company, and a competent witness prior to the Act of 1869. Said act makes no one incompetent who was competent before. It was manifestly intended to enlarge, not to restrain the admission of evidence. A person, natural or artificial, who contracts through an agent, necessarily loses the benefit of his evidence in case of the death of such agent. Such event-has never been held to close the mouth of the party dealing with the agent. It may be his misfortune, but it is one which we are powerless to remedy, and for which the Act of 1869 does not provide.

We are not prepared to say that the court erred in rejecting the evidence offered to show the powers of the defendants’ agents generally. But it was manifest error to exclude an inquiry as to the powers of Mr. Geiger, the agent with whom the plaintiff contracted. His acts could only bind the company within the scope of his authority, hence proof of his authority was material even for the plaintiff. The burden of proof lies on him to establish the agency and the extent of it: Hays v. Lynn, 7 Watts 525. The plaintiff having given some evidence to show that Geiger was agent for the company, but without any definite or accurate statement of his powers, it was clearly competent for the company to show what his powers were; or that he had exceeded his authority, or to deny the agency itself. The extent of an agent’s powers depends upon the authority under which he acts. This may be shown by his written-instructions or his course of dealing^ It is true the public are not always bound by the private instructions of the agent; and may hold the principal responsible, though the particular acts done are in excess of his private instructions. This was asserted in Adams Express Co. v. Schlessinger, 25 P. F. Smith 246. It applies to cases where the agent has been held out to the world as such by the principal, allowed to exercise enlarged powers from time to time, and his acts therein have been ratified by his principal. But this doctrine in no sense conflicts with the right of the principal to show that his agent in a given case exceeded his authority. The effect of such evidence when received is for the jury.

It was also error to exclude the evidence offered to show the company’s rates of insurance. The plaintiff’s action is for a breach of contract in not giving him a paid up policy. It was certainly competent for the company to show that the rates for a paid up policy were higher than the rate the plaintiff paid. If competent for no other purpose it would be entitled to go to the jury as tending to throw discredit upon the plaintiff’s statement. Eor if the amount of premium upon a paid up policy was largely in excess of the premium charged for a life policy, it would be a question for the jury whether there was not an inherent improbability in the plaintiff’s testimony as to the contract between the agent and himself.

The learned judge also erred in his instructions as to the measure of damages. The case was tried in the court below upon the theory of a rescission of the contract of insurance. But the record is not so. The declaration is in assumpsit for breach of contract in not issuing a paid up policy. The plaintiff does not seek to recover the specific sums of money paid as premiums. It is true they are set out by way of inducement. But the damages claimed are for a non-compliance with an alleged agreement to deliver a paid up policy. The proper measure of damages is the difference between the value of a paid up policy, and the life policy held by the plaintiff. To permit him to recover under this declaration as for a rescission, would be to give him all his premium money back again, and yet leave the company exposed to the hazard of a claim upon his policy in ■case of his death. I say a claim, for the declaration is not so clearly ■drawn as to render its interpretation easy or certain. But I regard this as the most reasonable construction of it, and in this view the measure of damages as adopted by the learned judge of the court •below was erroneous.

If, however, the plaintiff goes for a rescission, he is met with the fatal obstacle of his payment of premium after suit brought. He cannot rescind the contract and yet hold it. That the payment was made under protest amounts to nothing. There was no such duress as would give force and effect to such protest. Payments may be made under protest for duties in order to obtain possession of goods; or for taxes to avoid an impending seizure and sale of property. But this is a mere matter of a breach of private contract. The plaintiff either had or had not a right to rescind the contract. If he had such right there was no reason why he should continue the payments of premium on his life policy. It was an act utterly inconsistent with rescission.' It was not induced by any legal duress or constraint on the part of the company, but was the exercise of his own free will. If he had not the fight to rescind, then the payment of premium prevented his policy from falling pending this litigation. This may have been the reason why the payment was made. It was perhaps a prudent course, but fatal to a rescission of the contract. The plaintiff cannot avail himself of his protest merely to try an experiment in litigation.

What has been said covers the first, second, third, fourth, seventh, eighth and ninth assignments of error, and rules the important questions of this cause. We see no serious error in the remaining assignments.

Judgment reversed and a venire facias de novo awarded.


author: Mr. Justice Mercur

text:
    Hossler versus Hartman.
    1. It is a sufficient compliance with the. rule that “ the plaintiff shall file with his declaration or statement, an affidavit of claim,’] that they be both filed at the same time, and this is not affected by their being detached, or by the place of deposit in the office.
    2. An action brought by the assignee of a judgment, afterwards avoided by due proceedings had, against the assignor to recover the money paid for it, where the assignment was without express guaranty, is not such as requires an affidavit of defence under the Act of 9th April 1868.
    May 4th 1876.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson and Woodward, JJ. Williams, J., absent.
    Error to the Common Pleas of York county: Of May Term 1876, No. 8.
    This was an action of assumpsit, brought by Granville Hartman against Jacob Hossler.
    Jacob Hossler had obtained a judgment in the Court of Common Pleas.uf York county, against Jonas Hossler, entered by virtue of a warrant of attorney, on 4th of August 1869, for the sum of $300, with interest from date.
    Jacob Hossler assigned the judgment to Hartman by the following entry on the docket, “February 4th 1871. This judgment is now three hundred dollars with interest, from April 1st 1870. For value received I assign the same to Granville Hartman. Jacob Hossler.”
    On the 11th of April 1871, Jonas Hossler obtained a rule to open the judgment, which was made absolute, and an order on plaintiff in the judgment to file a declaration within twenty days, which was directed to be served on the plaintiff and Hartman, and in default thereof judgment of nonsuit was entered.
    Hartman brought this suit against Jacob Hossler in assumpsit to recover the amount he had paid him for the judgment, $265, and filed a narr. in the common counts, for money lent, paid, laid out and expended, had and received, and account stated, and at the same time filed an affidavit of claim, alleging that he had purchased the judgment for $265, and although Hossler had expressly declined to guarantee the judgment, he had assured him that it would be recovered from Jonas; that the judgment was perfectly good and all right, that the money was due; that there was no defence or set off, and it had been given for full value; that the assignment had been written with a guaranty, but was stricken out; that Jonas had applied to the court, alleging that the judgment was improperly obtained, without consideration, and that he did not owe the money; of this Jacob had notice, failed to sustain the judgment and it was avoided on the grounds set forth; that the deponent, Hartman, then demanded of Jacob $265, which he had paid him for the judgment, with interest, and Jacob refused.’
    The narr. and affidavit of claim were on separate pieces of paper. The prothonotary filed the narr. in the usual place for them, and the affidavit in a pigeon hole labeled “affidavits,” though it was usual to file them together.
    ■ The docket entry of this was, “ April 20th 1872, affidavit of plaintiff of cause of action filed, same day narr. filed.”
    May 23d 1872, judgment was entered sec. reg. for $284.52, for want of an affidavit of defence, liquidated by the prothonotary.
    A rule was obtained to show cause why judgment should not be opened on the ground,
    1. That, the affidavit was not filed with the narr.

    2. The affidavit did not disclose such cause of action as came within the rule allowing a judgment to be taken for want of an affidavit of defence.
    The rule of the Court of Common Pleas of York county is as follows:—
    “ The judgment to be taken for want of an affidavit of defence under the provision of the 1st sec. of an act entitled ‘ An Act in relation to pleading, &c., approved 9th April 1868, may be entered in the prothonotary’s office as of course at any time after the expiration of thirty days, from the returning of the writ, or the service of the notice mentioned in said section, on compliance with the provisions of said section, the judgment to be liquidated when necessary, and entered by the prothonotary in like manner as in open court.’ The words of the act in point are £ on claims for the loan or advance of money, whether the same be reduced to writing or not,’ ‘and on contracts for the loan or advance of money not in writing, an affidavit setting forth the terms of said loan or advance, with date and amount thereof, the plaintiff shall * * * file in the office of the prothonotary with his declaration or statement.’ ”
    The court below, Fisher, P. J., refused to open the judgment because the defendant had not disclosed a defence, and held that the action was within the rule.
    Error was assigned,
    1. To the entry of the judgment for want of an affidavit of defence.
    2. To the discharge of the rule.
    3. To the ruling that the plaintiff could take judgment for want of an affidavit of defence.

      W. C. Chapman and II. L. Msher, for plaintiff in error. —
    The act refers to the place quite as much as to the time of filing. Refusal to strike off a judgment entered irregularly or without authority is subject of error: Rabe v. Heslip, 4 Barr 139 ; Lytle v. Colts, 3 Casey 193; Garrard v. County of Allegheny, 2 Crumrine 338; Banning v. Taylor, 12 Harris 293; Adams v. Bush, 5 Watts 289. Relief where irregularity is dehors the record: Knox v. Flack, 10 Harris 338. An action on an implied contract to pay money not within the rule: Woodwell v. The Bluff Mining Co., 1 Casey 365; Barr v. Duncan, 26 P. F. Smith 395. Money paid for purchase of a judgment not a loan or advance of money.

      John JBlaehford and V. K. Keesey, for defendant in error. —
    No writ of error lies to a refusal to open judgment: Jones v. Dilworth, 13 P. F. Smith 447; Gump’s Appeal, 15 Id. 478. The testimony on rules to open judgments not before this court: Kirk’s Appeal, 4 Casey 186 Spring Garden Road, 7 Wright 144. The rule in Woodwell v. Bluff Mining Co., 1 Casey 365, was, in all actions on contracts for loan of money, under the act, all claims.

   Mr. Justice Mercur

delivered the opinion of the court May 4th 1876.

This judgment was taken for want of an affidavit of defence under the first section of the Act of 9th of April 1868, Pamph. L. 780. It authorizes judgment to be so taken, inter alia, in actions “uponbills, notes, bonds, records or other instruments of writing for the payment of money, and on claims for the loan or advance of money, whether the same be reduced to writing or not.” It further declares, “but no judgment shall be entered unless the plaintiff shall, on or before the return day of the original process, file in. the office of the prothonotary with his declaration or statement * * * a copy of the instrument of writing, book entries, record or claim on which the action has been brought; and on contracts for the loan or advance of money not in writing, an affidavit setting forth the terms of said loan or advance with the date and amount thereof.”

This action is in assumpsit. The narr. contains common counts only. The docket shows that the affidavit of plaintiff’s cause of action and the narr. were both filed on the same day. The record entry of the filing, of the affidavit immediately precedes the like entry of the narr.

It is urged, however, inasmuch as they were not written on one piece of paper, nor attached together, and each was deposited in a separate pigeon-hole in the office, that the affidavit was not filed “with the narr.” It is claimed that “with” in the act, means connected with or attached to the narr., so that the two must be kept together and deposited in the same place.

We cannot concur in that construction of the statute. We think it only means that they shall be' filed at the same time. This view gives full effect to the whole intent of the statute. It does not profess to direct the prothonotary in regard to his subsequent care or mode of keeping them.

They were filed at the same time. Being so filed, each was filed with the other. By so filing them the plaintiff discharged his whole duty. He cannot be affected by the fact that the prothonotary deposited them in different localities. Besides, the entry on the docket gives actual notice of the filing more readily than a search among the files. Any examination of the docket to see if the narr.- was filed could not fail to disclose that the affidavit was also filed.

The remaining question is whether the cause of action is such as to -require an affidavit of defence under the Act of Assembly cited.

The plaintiff in error sold and assigned to the defendant in error, a certain judgment of $300 and interest in the Gommon Pleas of York county. The defendant in the judgment afterwards applied to -the court and got it opened on the ground that it was “without consideration and had been improperly obtained.” By due course of proceedings had, and for the. reasons alleged, the judgment was annulled and avoided.

On the sale by the plaintiff in error, there was no express guaranty of the validity of the judgment, nor any express agreement to pay back the consideration money under any circumstances. The action rests on an implied agreement that the judgment was á valid one for the amount shown on its face. Not that it Avas worth that much, but that it was what it purported to be, a judgment against which there was no legal defence. The claim was to recover the consideration paid with interest.

The question is not as to the right to recover under the facts alleged. That must be conceded: Lyons v. Divelbis, 10 Harris 185 ; Elynn v. Allen, 7 P. F. Smith 482 ; but whether an affidavit of defence was required.

The defendant in error contends that his demand is substantially “ a claim for the loan or advance of money” under the Act of 1868, supra. But his affidavit shoAvs that it was neither a loan nor an advance of money. It is therein averred to have been paid in the purchase of a judgment, and was the consideration for the sale thereof. The invalidity of the judgment is the cause of complaint. In selling the judgment, the law assumes the vendor’s implied con- ■ tract of its validity, as in like manner it assumes the vendor’s implied warranty of his title on á sale of any personal property. Hence, on the purchase of a horse, and a failure of title, with just as much propriety might it be said, the money paid therefor, Avas “a loan or advance,” as to so claim in the purchase of this judgment.

This action is not to recover money paid on the ground of fraud and deceit, but is to enforce an implied contract in the sale. Suppose we should concede that there was an implied promise, which the affidavit does not aver, to repay the money in case the judgment was invalid; yet even then it does not present a case in which an affidavit of defence is required. This conclusion is fully sustained by Dewart v. Masser, 4 Wright 302 ; Woodwell v. Bluff Mining Co., 1 Casey 365, and Barr v. Duncan, 26 P. F. Smith 395.

It follows, therefore, there was error in entering the judgment, and the learned judge should have stricken it off.

Judgment reversed, and a procedendo awarded.


author: Per. Curiam. —

text:
    Bowser versus Bowser.
    1. Where a wife purchased the real estate of her husband at a sale of the same by the sheriff, the title vested in her as her separate estate, though she had no estate before marriage, nor did any accrue to her from any other source than through her husband, or her own earnings, during coverture.
    2. Purchase by the husband in the name of the wife is presumed to be a gift to her, and her title cannot be attacked on the ground of a conveyance in fraud of creditors by others than creditors, nor as a trustee by reason of the payment of the purchase-money, inasmuch as she did not stand in the relation of a stranger.
    May 4th-1876.
    Before Agnew, C. J., Shabswood, Mercur, Gordon, Paxson and Woodward, JJ. Williams, J., absent.
    Error to the Court of Common Pleas of Yorh county: Of May Term 1876, No. 51.
    This was an action of ejectment.
    Lillie Bowser, plaintiff in error, defendant below, was the second wife of Samuel B. Bowser.
    Emma Bowser, the plaintiff below, and defendant in error, was the daughter and only surviving child by his first wife, still a minor and suing in the name of her guardian, John Peeling.
    The case was referred, under the Act of the 9th April 1868, to William Hay, Esq., who filed his report awarding the premises to Emma Bowser, the plaintiff below. Exceptions were filed, dismissed by the court below and judgment entered on the report.
    Samuel Bowser bought the premises m dispute, which consisted of about thirty acres, from Nathan T. Meads, for the sum of $2600, paid $600 in cash, and gave a judgment for the balance of the purchase-money, $2000, payable in annual instalments of $500 each. Meads assigned the judgment to Thomas W. Wantland. Bowser at once entered into possession of the premises, residing there with his first wife Ellen, until her decease. He commenced to keep a store on the premises, did a good business and seemed prosperous, and was himself an energetic and industrious man. He however made default in the first instalment, and Wantland’s administrators issued execution on the judgment, the land was seized, condemned and sold by the sheriff to Ellen Bowser, the defendant’s wife, for #2275, a deed executed by the sheriff, acknowledged, delivered and entered on record. To pay the purchase-money, she borrowed #1100 from Jonathan Neff, for which she gave a note or due bill to him, which she afterwards paid, Neff receiving part from her personally, and part from her husband, saying that she had sent it. The balance of the money she obtained from the Shrewsbury Bank on notes endorsed by her friends.
    The wife Ellen had no estate of her own, either before her marriage or coming to her after her marriage. After the sale, the sign of the store “Samuel Bowser” remained, but the books, business, bills, &e., were in her name. She at times attended in the store, but was sickly, and the business prospered in and by the hand of her husband.
    Ellen, the first wife, died on the 12th of June 1862, leaving two children, Emma, the plaintiff, and Frank, who died intestate, unmarried and without issue. Subsequently Samuel Bowser married Lillie, the defendant below, with whom he lived upon the premises until his decease, leaving four children by this marriage. After his marriage with Lillie, Samuel built upon the premises a barn, warehouse, carriage-house, wood-house, corn-crib and other buildings, and conducted the business of storekeeping until his decease. Lillie continued to reside there, and Emma brought this ejectment to recover the premises as heir of her mother.
    The referee held that the title vested in the first wife Ellen by gift from her husband, and though the title would not be good as against the creditors of her husband, it was good as against him, his heirs and all other persons. It was conceded that the present value of the property was about #3000.
    Exceptions were filed to this report, which were dismissed by the court and the report confirmed; and this action was assigned for error.

      W. C. Chapman and James Kell, for plaintiff in error,
    cited Hallowell v. Horter, 11 Casey 375; Robinson & Co. v. Wallace, 3 Wright 129; Baringer v. Stiver, 13 Id. 129 ; Bucher v. Ream, 18 P. F. Smith 426, that where a wife had no separate estate, she could acquire none by her earnings during coverture. That the policy of the law is in favor of an equal distribution : Weaver’s Appeal, 13 P. F. Smith 309. A conveyance that denudes a husband of all his property is more than a reasonable provision for his wife: Shepard v. Shepard, 7 Johns. Ch. 57; Benedict v. Montgomery, 7 W. & S. 238 ; Stickney v. Borman, 2 Barr 67; Coates v. Grerlach, 8 Wright 43.

      AT. L. Msher, for defendant in error. —
    It is a question not affecting rights of creditors; therefore the cases cited not applicable. Wife may acquire separate property by gift from her husband: McKennan v. Phillips, 6 Whart. 575; Clanecy on Rights of Mar. Women 259; 1 Fonblanque Eq. 97; 2 Roper on Husband and Wife 152; Lucas v. Lucas, 1 Atkins 270.
   The judgment of the Supreme Court was entered May 15th, 1876,

Per. Curiam. —

This is not a case between a wife and her husband’s creditors. The only question is whether the wife of Samuel B. Bowser was in the deed from the sheriff to her of the estate of her husband Samuel B. Bowser, a trustee for her husband. This must be alleged either on the ground that he purchased the property in her name to defraud his creditors, or that he paid the money for his own use. But he cannot allege his own fraud as a ground of title; and on the ground of payment of the purchase-money, his wife did not stand in the relation of a stranger. Purchasing in the name of his wife the presumption is that it was a gift to her, and this was corroborated by his after conduct. Neither he nor she did any act to question her title.

Judgment affirmed.


author: Mr. Justice Sharswood

text:
    Kreiter versus Bomberger.
    1. Upon a question of fact raised as to whether a party plaintiff had agreed to look to the maker of a note and not call upon his co-endorsers, representations made by the plaintiff as to the means of the maker, are relevant and admissible.
    2. Where a party to a suit is a witness in his own behalf, his admissions out of court, though contradicting his evidence, may be proved, without first calling his attention to them, as in the case of other witnesses.
    3. Where a sale of land is consummated by payment of the consideration and delivery of the deed, there can be no recovery for deficiency without proof of fraud or mutual mistake. Deficiency, if it be very great, though evidence of fraud, is not of itself sufficient.
    May 4th 1876.
    Before Agnew, C. J., Sharswood, Merour, Gordon, Paxson, and Woodward, JJ. Williams, J., absent.
    Error to the Court of Common Pleas of Lancaster county: Of May Term 1876, No. 82.
    This was an action of assumpsit, brought by J. M. Kreiter, against I. F. Bomberger, for contribution.
    The note, the foundation of the suit, was in form as follows:—
    $2200. Litiz, January 26th 1871.
    Sixty days after date I promise to pay to the order of John S. Hostetter, Isaac Bomberger, Charles R. Kreiter and J. M. Kreiter, at “TheLitiz Deposit Bank,” twenty-two hundred dollars, without defalcation, for value received. C. W. Kreiter.
    Credit the drawer. ,
    John S. Hostetter,
    Isaac E. Bomberger,
    Charles R. Kreiter,
    J. M. Kreiter.
    Endorsed: “John S. Hostetter, Isaac E. Bomberger, Charles R. Kreiter, J. M. Kreiter.”
    The note was discounted by Bair & Shenk, bankers, unpaid at maturity, protested, lifted and paid by J. M. Kreiter, and suit brought by him against the defendant Bomberger for one-fourth in contribution.
    On the trial, before Livingston, P. J., the defence set up was two-fold.
    1st. That Kreiter promised Bomberger before he endorsed the note, that he, Kreiter, would pay the note at maturity, and that Bomberger should not be called on for contribution.
    2d. By way of set-off, that Kreiter had sold Bomberger a piece of ground in Warwick village, containing, as represented by Kreiter in the deed, 242 feet 4 inches front, and in depth 200 feet, containing one acre and a half, more or less, which upon actual measurement contained 52 feet 8 inches less in front, the deficiency extending through its entire length, reducing the area to less than an acre, for which he paid $6000, and claimed damages for the deficiency. It was a sale consummated by payment, delivery of deed, and possession of the vendee under it.
    There was conflicting testimony as to the first point, and in the course of the trial the testimony of Hostetter was admitted as to representations made by the plaintiff as to the means of the maker of the note, to which exception the first was taken.
    It seems that it was a conversation that took place while Bomberger was not present, yet being declarations as to his opinion of the maker’s means and ability to meet the note, were held relevant and admissible upon the question of fact raised as to whether the plaintiff had agreed to look to the maker and not call upon his co-endorsers, and that without his attention having been first called to them in his examination.
    The jury} however, found for the plaintiff upon this fact, that he , had not done so, but allowed the set-off of damages for deficiency of land, reducing the verdict from $676.24, as it would have been upon the first finding, to $215.59, for which amount they gave a verdict for the plaintiff. The plaintiff took this writ of error.
    The error assigned to the ruling of the court below was to the admission of the evidence of the sale of the lot and its deficiency of area, and the instruction of the court thereupon, that if the jury should find the difference between the represented
      and real quantity very great, so great as to be a fraud upon the defendant, they should ascertain what damage the defendant sustained by reason of such deficiency and allow as a set-off such sum as they found such damage amounted to. There was no other evidence of fraud than such as might be inferred from the extent of the deficiency.

      D. McMullen, for plaintiff in error. —
    Where lands are described by courses and distances, and also by adjoiners, the latter, where there is a discrepancy, govern: Cox v. Couch, 8 Barr 147 ; Petts v. Gaw, 3 Harris 222; Brolaskey v. McClain, 11 P. F. Smith 163.

      William It. Wilson, for defendant in error. —
    The evidence under the first error was clearly admissible to contradict the plaintiff’s testimony, tending to prove in effect that at that time the drawer had been insolvent. Neither vendor nor vendee having been in possession of so much of the lot as was lacking, this was a constructive eviction pro tanto: Rawle on Covenants 157; Marston v. Hobbs, 2 Mass. 433; Wilson v. Cochran, 10 Wright 229. It is matter of set-off: Hunt v. Gilmore, 9 P. F. Smith 450. Rule as to discrepancy applies whether contract is executed or executory: Coughenour’s Adm’rs v. Stauft, 27 P. F. Smith 195. More or less: 1 Sugden on Vendors, notes to p. 490; Smith v. Fly, 24 Texas 345; 4 Kent 467. Equity will relieve in case of gross mistake as to quantity.
   Mr. Justice Sharswood

delivered the opinion of the court, May 22d 1876.

The first assignment of error might be dismissed with the remark, that as the jury found for the plaintiff upon his claim for contribution on the note of which the defendant was a joint payee and endorser with him, it evidently did him no harm. Yet as the case must go back for another trial, it may be proper to say that upon the question of fact raised by the defence, that the plaintiff had agreed to look to the maker and not call upon his co-endorsers for contribution, his declarations as to his opinion of the maker’s means and ability to meet the note were relevant and admissible. It is clear that though a party has been examined in his own behalf as a witness, his admissions out of court, though contradicting his evidence, are admissible without having first called his attention to them, as is necessary in the case of other witnesses. Such admissions constitute independent evidence of themselves, and are not admissible merely for the purpose of impeaching the credibility of the party as a witness, although incidentally they may also have that effect.

The remaining assignments relate to the admission of the evidence of set off, claimed by the defendant and the instruction of the court to the jury upon that subject.

The right of a vendee to be allowed to recover for an alleged deficiency in the quantity of land purchased by him, as described in his deed or articles of agreement, may arise in three different classes of cases.

The first is when the agreement is entirely executory. I cannot find in our books any case in point, but in most of those which have been decided where the agreement has been carried out by a conveyance, and the giving of securities for the purchase-money, so much stress is laid upon the execution of the deed as to produce the impression that a vendee, where the articles are entirely executory, would be allowed for any considerable falling off in the quantity. Chief Justice Tilghman declined to express any opinion upon the question in Smith v. Evans, 6 Binn. 102. As the action to recover the purchase-money may be regarded as equivalent to a bill in equity to enforce the specific performance of the contract, it may well be concluded that the vendee ought not to be compelled to pay for more land than he actually receives, unless it appears that he understood and meant to take the risk that the quantity was as represented. The case is much plainer when the agreement is at the price of so much per acre; .and even where it is for a round sum, and the quantity is qualified by the words “more or less,” the deficiency should be a reasonable one, as in the old case of Day v. Finn, Owen 133, cited in 9 Vin. Abr. 343, pl. 10, where it is held that “ sive plus sive minus ” shall be intended of a reasonable quantity. Certainly very much ought to depend upon the extent of the purchase and the value of the land. This, however, is not the case which we have before us, and we do not intend to express an opinion upon it.

The second class of cases is however the more usual one: namely, where the contract has been carried out by the execution of a deed and of bonds or other securities for the purchase-money. The question has there arisen upon actions to recover on these securities. In such cases the law is well settled, that where the contract was for a round-sum, or even by the acre, the vendee will not be allowed for a deficiency in the quantity, where the number of acres in the deed is stated with the qualification more or less, unless there be fraud, or, as is said, the difference is so very great as to show an evident mistake. The rule was stated by Mr. Justice Sergeant, in Galbraith v. Galbraith, 6 Watts 112, in these words: “ An examination of the numerous decided cases in our own reports will, I think, show that in the common case between vendor and vendee, in a conveyance of a tract of land bounded by adjoining owners, and described as containing so many acres, be the same more or less, at a certain price per acre, where there is no stipulation for admeasurement, nor any malafides proved, redress cannot, after the bargain is closed, be given to either party for a surplus or deficiency subsequently appearing.” This rule was adopted and confirmed in Hershey v. Keemborts, 6 Barr 128 ; Chief Justice Gibson adding, “ The vendor is answerable in respect of -the quantity only for mala fides.” There are indeed many dicta that the difference in the quantity may be so great as to be evidence itself of fraud or deceit, or of great misapprehension between the parties, and then equity will relieve. Though no ease is to be found of an actual application of this doctrine in favor of the vendee, or to show what must be the extent of the difference to raise the presumption, yet perhaps it may be fairly conceded, that in an action to enforce the payment of purchase-money, a deduction under such circumstances will be allowed. Such is the weight of extrajudicial opinions: Boar v. McCormick, 1 S. & R. 166; Glen v. Glen, 4 Id. 488; Bailey v. Snyder, 13 Id. 160; McDowell v. Cooper, 14 Id. 296; Ashcom v. Smith, 2 Penna. R. 219; Frederick v. Campbell, 13 S & R. 136; Haggerty v. Fagan, 2 Penna. R. 633; Coughenour’s Adm’rs v. Stauft, 27 P. F. Smith 191.

The third class of cases to which the -one now under consideration belongs, is where the contract is fully executed and the purchase-money paid. We are of the opinion that in this class, the transaction cannot be ripped up, without actual proof of fraud or mutual mistake. Upon this question the greatness of the difference may be evidence, but not sufficient of itself. There must be other circumstances. Cases of this class very rarely arise. I can find but one instance in our books. That is the case of Large v. Penn, 6 S. & R. 488. There the difference was very great in reference to the extent of the premises. The quantity conveyed was described as 2£ acres, and without the words “more or lessthe actual quantity was, 1 acre, 148 perches. Yet the vendee was denied relief; Chief Justice Tilghman remarking, “ It is the boundaries to which the grantee must look; he has a right to all the land within them. The quantity is matter of calculation, and be it more or less passes. There is no express covenant that the quantity in this case shall amount to 2£ acres. Nor is there any implied covenant, because the quantity is introduced not by way of covenant, but of description.” So in Smith v. Evans, 6 Binn. 102, which was a proceeding on a mortgage, to recover unpaid purchase-money, where upon a conveyance of 991£ acres, more or less, the quantity fell short 88 acres, 48 perches, and the vendee was refused relief; Mr. Justice Yeates, in his dissenting opinion, says: “ And yet I freely confess that if, under this state of facts, the whole money had been paid, and the transaction closed, I know of no legal mode whereby any of the money could be recovered back.” This distinction between cases where the purchase-money has been fully paid and the demand is to recover back part, and cases where the vendor is proceeding upon his securities to enforce full payment, is well sustained by the general principles upon which courts of equity proceed. They will not rescind a contract fully executed without clear proof of fraud or mutual mistake in an essential point. They proceed upon different principles in the enforcement of contracts.

It follows that there was error committed by the learned judge below in admitting and submitting to the jury the deed from Kreiter to Bomberger, as in itself sufficient evidence of fraud or mistake, if they should think the difference very great. If it was sufficient of itself, it was a question of law for the court and not of fact for the jury. There was no evidence besides the deed to show fraud in Kreiter or mutual mistake of the parties. The vendee was well acquainted with the lot, within the boundaries described in the deed. That was the lot he bought. There was no representation by the vendor of the quantity of acres it contained. The description in the deed was most probably copied from the prior conveyances to him recited in it. Both parties made and concluded the bargain with their eyes open. The vendee threw out no anchor to windward as to quantity as he did as to title by his covenant of general warranty. If within any period short of six years from the time of the transaction, a contract of purchase and sale, fully executed by delivery of .the deed and payment of the purchase-money, can be overhauled and materially changed, very disastrous consequences will ensue not only to vendors called upon to refund what they had every reason to believe was their own and had a right to deal with accordingly, but to the public at large, by sowing the seeds of an abundant crop of lawsuits.

Judgment reversed and venire facias de novo awarded.


author: Per Curiam. —

text:
    Berkheimer versus Geise et al., Administrators of Geise.
    1. Payment of money into court is an admission of record that the amount brought in is due and owing to the plaintiff.
    2. Under a plea of tender, followed by payment of the amount tendered into court, an award of arbitrators in favor of the plaintiff, even for a less amount, imports a finding against the tender.
    3. In an action by B. against G., the latter pleaded tender and paid $200 into court under a rule; afterwards arbitrators made an award in favor of the plaintiff “ of $158.40 and costs,” whereupon the court below made an order that the defendant be allowed to take out of court the excess of the $200 over the award and costs to the time of payment into court. Held, that such order was erroneous.
    May 4th 1876.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson and Woodward, JJ. Williams, J., absent.
    Error to the Court of Common Pleas of Yorlc county: Of May Term 1876, No. 49. _ _
    _ _ Assumpsit by John Berkheimer against Solomon and Daniel Geise, administrators of John Geise, for services rendered to him during his last illness, and for services at his funeral.

      The narr., filed on December 22d 1874, contained the common counts; February 4th 1875, the defendant pleaded, among other pleas, tender before suit brought; and on the same day obtained a rule on the plaintiff to show cause why the defendants should not be permitted to pay into court the sum of $200, legal tender money, being the amount which the defendants admit to be due to the plaintiff, and tendered to plaintiff by defendants before suit brought. This rule was made absolute, and the $200 was paid into court the same day. Arbitrators were chosen under a rule taken by the plaintiff, who on May 20th 1875, made the following award: “We find in favor of the plaintiff, and against the defendants, the sum of $158.40 with costs.”
    On the same day the plaintiff’s bill of costs, amounting to $126.30, was filed.
    It does not clearly appear whether the question of tender before suit was raised before the arbitrators or not. The plaintiff in error alleged that it was fully heard by them, and found against the defendant, while the defendant in error alleged that the fact of a tender before suit was taken for granted at the hearing, and that there was no controversy in regard to the subject. The evidence taken before the arbitrators did not appear on the paper-books. The rule to pay the $200 into court and the affidavit upon which the following rules were taken were both based upon the fact of a tender before suit.
    Upon a later day, the court granted the following rules upon the plaintiff:—
    1. Why judgment should not be entered on said award without costs.
    2. Why said award should not be set aside so far as the same relates to costs of suit.
    3. Why judgment should not be entered on said award for defendants.
    4. Why the money paid into court should not be impounded to answer the defendants’ costs in this suit.
    5. Why the amount of money paid into court over and above the amount found by the arbitrators to be due to plaintiff should not be impounded to answer the defendants’ costs incurred in said suit.
    And further ordered and directed all proceedings on the award to stay in the meantime.
    Afterwards, on the 15th day of December 1875, the court (Me-. Lean, P. J.), after argument, directed that the prothonotary tax the costs in this case up to the 4th day of February 1875, and that judgment be entered in favor of the plaintiff for the amount of the award of the arbitrators, with costs of suit incurred up to said 4th day of February 1875, and that the defendants take out of court the balance of the money paid into the same after deducting said debt and costs.
    No other disposition was made of the above rules.

      The plaintiff thereupon took this writ of error, assigning for error, that,
    1. The court erred in directing judgment to be entered in favor of the plaintiff for the amount of the award, with costs of suit incurred up to February 4th 1875.
    2. The court erred in ordering the defendants to take out of court the balance of the money paid into the same after deducting said debt and costs.
    3. The court erred in not entering judgment for plaintiff on the award of the arbitrators, with full costs of suit. -

      H. L. Fisher, for plaintiff in error. —
    The award of the arbitrators was for the plaintiff, and purported a finding against the fact of tender: Wheeler v. Woodward, 16 P. F. Smith 158. The defendants, after placing themselves upon the Act of 1705, and having failed in proving a tender, sought to rely upon the common-law practice of paying money into court (after suit brought); but to do this, they ought to have paid costs up to the time of payment into court, which, in this case, they did not do: Harvey v. Hackley, 6 Wright 265. Payment into court, irregularly made, cannot be recognised: Harvey v. Hackley, supra ; Thompson v. White, 4 S. & R. 141. The defendants relied upon proof of a tender before suit, and having failed in this their remedy was by appeal. In any case payment into court is an acknowledgment of the plaintiff’s right to recover the entire amount so paid.

      L. Maish and J. Blaehford, for defendants in error. —
    There was no 'conflict of evidence before the arbitrators as to tender before suit. The tender was made before suit under the Act of 1705, 1 Br. Purd. 488, pl. 2. The defendants having made a tender before suit are not liable for costs: Weidermuth v. High, 5 Rawle 321; Leutz v. Stroh, 6 S. & R. 39; Lewis v. England, 4 Binn. 5. They pursued the proper practice under the Act of 1705; Cornell v. Green, 10 S. & R. 17; Seibert v. Kline, 1 Barr 38; Sheridine v. Gaul, 2 Dallas 190. Their remedy was not by appeal: Sheets v. Rudebaugh, 2 Rawle 149; Fitzsimmon v. Leckey, 2 P. & W. 112. To be correct in form the award should perhaps have been for defendants; but this informality of the award cannot prejudice the rights of the defendants, who have met the requirements of the statute and the practice under it. Harvey v. Hackley only decided that payment into court under a plea of tender is irregular when done without a rule. Even supposing there was not a tender before suit, still payment into court of $200, which is more than the amount of the award and the costs to the time of payment into court, should relieve the defendants from subsequent costs.
   The judgment of the Supreme Court was entered, May 15th 1876,

Per Curiam. —

It is said that the practice of paying money into court in cases where no tender had been made before suit, originated in the time of Charles the Second, when Kelyngfe was Chief Justice, to avoid the hazard and difficulty of pleading and proving a tender: 1 Tidd’s Practice, 4 Am. ed., by Fish, 619; 1 Penna. Practice by Fish, part 1, 436. It is well settled under this practice that the payment into court must be under a rule of the court, and that the money paid in is admitted to belong to the plaintiff, and in no event can be recovered and paid back to the defendant, even though the plaintiff goes on to a trial to recover a greater sum: 1 Tidd 619; 1 Penna. Pr. 436. At the time of bringing the money into court the defendant is bound also to pay costs up to that time. When that is done, if the plaintiff recover no greater sum than that brought into court, he cannot recover costs. Though analogous, this practice is not on the same footing as a tender before suit brought, followed by bringing the money into court under a rule. Yet in each case the money brought in is admitted to be due and owing to the plaintiff. The Act of 1705, second section (1 Purdon 488), and the Act of 12th of March 1867 (2 Purdon 1395), are both founded on the fact of atender, the former before suit brought, and the latter after suit and before trial. Under the terms of the Act of 1867, the tender must be of the admitted debt, and the costs already incurred. The same effect must necessarily be given to the Act of 1867, when the money is paid into court, as when it is paid in under the common-law practice, that is to say, that the payment is an act of record which admits the money to belong to the plaintiff, and therefore that the defendant cannot take it back.

In this case the rule for bringing the money into court shows that it was paid in under the Act of 1705, because it alleges that it is “ the amount which the defendant admits to be due to the plaintiff, and tendered to plaintiff by defendant before suit brought.” No costs were paid in along with the sum thus admitted. The case was referred to arbitrators, who reported an award for the plaintiff with costs, which imports a finding against the tender, for otherwise the award would have been for the defendant, the tender being a good plea in bar if sustained. The case, therefore, was left to rest simply on the payment of money into court, which put it out of the power of the defendant to take it back. We think that the court below erred in allowing the defendant to take out of court the excess of the sum paid into court above the sum of the award and the cost incurred up to the time of payment into court. This excess is $29.85.

The order of the court is therefore reversed, and it is now ordered that the defendant refund to the plaintiff the sum of $29.85, with interest from the date of the order, viz., December 15th 1875, and the record is directed to be remitted with instructions to carry this order into effect.