author: Mr. Ju tice Green

text:
    Welchans versus Shirk.
    A. filed a petition for a mandamus to require B. to deliver up certain moneys and books to the relator, who claimed to be treasurer and receiver of taxes of L. city. The petition set forth that the respondent had been duly elected and qualified for that office, and liad assumed possession of the money and books in controversy in right thereof, but that subsequently he had been suspended by joint resolution of City Councils, anti that the relator had been duly appointed and qualified in his place. The petition failed to set out the cause of the suspension or any other facts in relation thereto. The respondent, in his answer, averred that he had always conducted himself honestly and faithfully in his office, and that he had given, no just cause for suspension, and further denied the validity of the joint resolution of City Councils suspending him, and of the appointment of the relator to his office. To this answer the relator demurred : Reid, that since it appeared from the pleadings that there was no just cause for defendant’s suspension, he was entitled to judgment.
    May 4th 1881. Before Sharswood, C. J., Merour, Gordon, Paxson, Trunkey, Sterrett and Green, JJ.
    Error to the Court of Common Pleas of Zcmcaster county. Of May Term 1881, No. 87.
    Petition by William S. Shirk, setting forth that Edward Welchans, treasurer aud receiver of taxes of the city of Lancaster, was, during his term, suspended from his said office by resolution of the City Councils, and the petitioner was appointed by Counc'ls to hold said office during such suspension; that he had taken the oath of office and given bond; tiiat said Welchans refuses to surrender the books and moneys, &c., pertaining to said office, and praying that the respondent might be compelled l>y mandamus so to do.
    The answer averred that the respondent had conducted himself honestly in his office, and had never given auy cause for suspension, aud denied the right of Councils to suspend or remove him from office in the manner set forth in the petition. Demurrer-to answer. The pleadings are more fully set forth in the opinion of this Court, vnfra.

    The Court below, holding that the return was argumentative and inadequate, entered judgment sustaining the demurrer, and awarded a peremptory mandamus as prayed for. The respondent took this writ of error, assigning for error the judgment awarding the said writ.

      J. Hay Brown and Wm. Aug. Atlee, for the plaintiff in, error.
    The pleadings show no jurisdiction or power in the Connells to suspend the respondent. It is argued that such action is justified by the clause of the charter (Act of April 5th 1867, § 25, Pamph. L. 792), which authorizes the suspension of the city treasurer upon default iu his accounts, shown by affidavit of a majority of the standing committee of Council. But no such default is alleged in the petition, and the demurrer admits the fact, averred in the answer, that the respondent had at all times conducted himself faithfully and honestly in his office, and had never given canse for suspension. The title to the office can only be tried by quo warranto, and it being admitted that the respondent was legally elected, and that no. legal cause existed to’ warrant the resolution of suspension, the Court erred in awarding a mandamus requiring him to give up the moneys and books, &c., belonging to the office.

      Ghas. L. Zcmdis and D. G. Eshleman {Geo. M. Kline and' J. Z. Steinmetz with them), for the defendant in error.
    The law authorized Councils to suspend the city treasurer for a certain cause. It appears by the pleadings that Councils did pass a formal resolution, suspending him. It is not necessary to set forth in this proceeding all the details of the case, the presumption being that Councils proceeded according to law. The respondent admitted the fact of suspension, but denied its effect and validity as matter of law. Such denial is argumentative, and as the answer contains no responsive allegations which amount to defense, the demurrer was properly sustained. Mandamus is an appropriate remedy to compeldelivery to a municipal officer of books, papers, records, money and seal, by his predecessor or by an usurper: 1 Dillon on Mun. Corporations, § 239 (2 ed.); Tapping on Mandamus, 50, 94; People v. Kilduff, 15 Ill. 192.
    May 23 1881.
   Mr. Ju tice Green

delivered the opinion of the Court,

In this case the sole contention of the parties arises upon the pleadings. These consist of a petition for a mandamus, an answer, and a demurrer to the answer. The petition alleges that the respondent was elected treasurer and receiver of taxes of the city of Lancaster, to serve for one year from the 5th day of April 1880, subject to the right of suspension or removal as provided by law. That on January 5th 1881, by joint resolution of the City Councils, the respondent was suspended from his office, and that on January 7th following, the suspension was, by another resolution, continued until further action, and on the same day the petitioner was appointed to the same office. That the petitioner had duly qualified for the office, and that the respondent held in his possession certain moneys and books belonging to the city, which lie refused to deliver to the petitioner upon demand made, and which were necessary for the proper management of the financial interests of the city. A mandamus is asked to compel the delivery of the money and books referred to. To this petition the respondent filed an answer in which he stated his own election to the office in question, that he gave bond which was approved, took the prescribed oath, and entered upon the duties of the office, but denies that the Councils had the right to remove him. He further alleges that he at all times conducted himself faithfully and honestly in his office, and never gave any cause for suspension therefrom; tha ’he was informed of the passage of the resolution of suspension, but avers that it was inoperative and void; and that' the attempted suspension was entirely illegal and of no effect. He further alleges that he was, on January 7th 1881, and, up to the time of subscribing the answer, still was, treasurer and receiver of taxes of Lancaster city; and that the petitioner was not legally appointed to the office, and was not such treasurer and receiver. To this answer the petitioner filed a general demurrer, and the respondent filed a joinder-.'

The Court, holding the answer insufficient, gave judgment against tlxe respondent, and awarded a peremptory writ of mandamus. In this there was clear ei’roi\ The demurrer admitted the truth of the facts set out in the answei-. Both tlxe petition and the answer concuiTed in asserting the due election of the respondent to the office, and the answer averred the subsequent qualification and entry by the respondexit upon the duties of the office. He was, therefore, at the time the petition was filed, the lawfully elected, qualified and acting officer of the city. Thus holding his office lie could not be ai-bitrarily deprived of it. No right to deprive him of it except according to law is alleged, but no suspension or removal in accordance with tlxe law is in any manner averred in the petition. Nothing more is asserted than an actual suspension by resolution. Copies of the resolutions are appended to the petition, but they contain no mention of any cause of removal. Moreover, the answer alleges that the respondent at all times behaved himself ixx his office faithfully, honestly and carefully, and never gave cause for suspension from the same. The demurrer admits this to be true, and yet the Court gives an adverse judgment.

An attempt is xnade to defend the action of the Court by referring to the twenty-fifth section of the city charter (Act of April otlx 1867), which confers authority to ¡remove the tx-easurer. The -clause in qxxestion is in the following words: “The said treasurer shall verify his cash account at least once in every month, to the satisfactioxx of a standing committee of Councils, and upon the affidavit of a majority of such committee to any default tlxex’ein, the said treasurer may be suspended from office, and another appointed until the f ux’ther action of Councils,” It will be seen at once that the light to suspend only arises upoxx the affidavit of a majority of the committee being made to a default by the treasurer in the verification of his account. But no such affidavit is alleged, nor any default by the treasurer. Where then do the Councils get the power to suspend ? The fundamental facts upon which alone that power is based are neither alleged nor proved. More than that, the answer affirmatively avers that the respondent never gave any cause for sixspension, and the demnrrer admits this to be true. In order to sustain the judgment of the learned Court below, we would be obliged to presume the existence of a cause of suspension without any proof, without even an allegation to that effect, and in the face of an assertion by the respondent that there never was such a cause, which assertion the petitioner admits to be true. The mere statement of this proposition is enough. Argument is quite unnecessary. We have no authority to make any such presumption in such a state oh,the record.

Judgment reversed, and judgment is now entered here on the demurrer in favor of the respondent, with costs.


source: Caselaw Access Project

author: Mr. Justice Sterrett

license: Public Domain

text:
    Brubaker’s Appeal.
    1. Joint letters of administration should never be granted against the protest of one of tiie parlies thereto.
    2. The creation of two separate co-ordinate administrations upon the tame estate is unknown in our practice, and is a manifest irregularity.
    3. Where the class primarily entitled to administer upon a decedent’s estate consists of several persons, the register may grant letters to all jointly if they wish it, or may in his discretion select one of them and commit the administration to him. But having once exercised that discretion he cannot revoke the letters granted and issue new letters to another, except for sufficient cause.
    May 4th 1881. Before Sharswood, O. J., Mercub, Gordon, Paxson, Trunket, Sterrett and Green, JJ.
    Appeal from the Orphans’ Court of Lcmoaster coimty. Of May Term 1881, No. 75.
    Appeal by Elizabeth Brubaker, administratrix of the estate of Jacob Shaeffer, deceased, from a decree of the said Court, directing the Register of Wills to issue separate letters of administration upon said estate to the appellant’s sister, Mrs. Lavina Wolf.
    Jacob Shaeffer. died intestate, a widower, leaving to survive him two married daughters, Mrs. Brubaker and Mrs. Wolf. Shortly after his death the register granted letters of administration to Mrs. Brubaker, the elder daughter. Mrs. Wolf thereupon presented her petition to the register, setting forth that the letters had been granted to Mrs. Brubaker without the petitioner’s knowledge or consent, and contrary to the assurance of the deputy register, that, although no caveat was filed, letters should not be granted to either until both had been heard; that Mrs. Brubaker being confined to her resi-. deuce by illness, the petitioner agreed with her that nothing should be done until her recovery, but that at Mrs. Brubaker’s request the deputy register visited her at her house, and there privately administered tlie affirmation and issued the letters. The petitioner averred that she had an equal right to administration with her sister, and prayed to be joined with the latter in the administration.
    The register refused to grant the prayer of the petition, and Mrs. Wolf appealed from his decision to the Orphans’ Court. Depositions were taken under a rule to show cause, which in part sustained the allegations of the petition, and after argument the Court (Patterson, J.) filed an opinion in which he said: “ The Act of March 15th 1832, directs that, after the widow, letters shall be granted to such of the intestate’s kindred as may be entitled to the residue of his personal estate, preferring' always such as are in the nearest degree of consanguinity. These two, the only children, and sisters, are equally entitled to share the decedent’s personal and real estate, and are equally near in degree of consanguinity to the intestate. Would not, then, the granting of letters of administration to this appellant (Mrs. Wolf) only put both sisters on a perfect equality % . . . Put the Court does not feel at liberty to enjoin a joint administration between these sisters; indeed, the prevailing rule is, not to force a joint administration on unwilling parties.
    “ The Court will therefore sustain this appeal, and there having been no sufficient or valid objections to Mrs. La vina W olf, letters of administration are ordered to issue to her, on her father’s estate, upon her entering good and sufficient security with the register for the faithful performance of her duties as administratrix, providing her husband’s assent is obtaiiíed; which assent will be evidenced by his joining in the administration bond.”
    Mrs. Prnbaker thereupon took this appeal, assigning for error the above opinion and decree.

      H. O. Brubaher and A. J. Eberle, for the appellant.—
    The register having issued letters to one sister, in the exercise of a discretion reposed in him by the Act of Assembly, the Court has no jurisdiction to review his action. The register himself could not revoke his action except for cause: Sliomo’s Appeal, 7 P. F. Smith 356; Hood on Executors 64, 467; Toller on Executors 89; 1 Williams on Executors 371. The Court acknowledged that a joint administration by the sisters would be improper under the circumstances, and to escape that fell into the more serious error of awarding a separate administration to each, for which there is no warrant in law.

      8. P. Ely, for the appellee.
    The sisters were entitled to equal rights in their father’s estate, including the right of administration, and to share the commissions incident thereto, which in this case will amount to $3,000. The letters to Mrs. Brubaker were obtained by a trick, in violation of an understanding that nothing should be done until both should be heard by the register. Courts will not encourage indecent haste in securing administration by such means. As the two daughters are the only persons interested in the estate, no injustice can arise from the fact that letters were issued to each, instead of to them jointly. Such is the practice in England, and our statute does not forbid it.
    May 23d 1831.
   Mr. Justice Sterrett

delivered the opinion of the Court,

Jacob Sbaeffer survived his wife and died intestate August 14th 1SS0, leaving as his only heirs-at-law two married daughters, Elizabeth Brubaker and La vina Wolf. Ten days after his decease letters of administration on his estate were duly granted by the register to Mrs. Brubaker, the elder daughter; and on September 2d the petition of the younger daughter and her husband was presented, praying that she be joined with her sister in the administration already granted. This application was refused by the register, and thereupon the petitioners appealed from his decision to the Orphans’ Court, and a rule, with notice to Mi’s. Brubaker, was granted, to show causo why Mrs. Wolf should not be joined in the administration. Under this rule depositions were taken by both parties, and tlie Court, after hearing, on January 29th 1881, made a decree sustaining tbe appeal, and ordering letters of administration to be issued to Mrs. Wolf “ on her father’s estate, upon her entering good and sufficient security with the register for the faithful performance of her duties as administratrix, providing her husband’s assent is obtained ; which assent will be evidenced by his joining in the administration bond.”

It is contended that the Court erred in thus ordering letters of administration to be issued to Mrs. Wolf, and in forcing a joint administration, against the consent of Mrs. Brubaker, to whom letters had been previously granted.

The learned judge in Iris opinion says : “ The present administratrix and the appellant” are both equally competent to perform the duties of administrator; both stand in equal degree of relationship to the decedent; both have equal share or interest in his estate; and looking ou this appeal, we look at the whole case on its merits and the rights of the respective parties, and we are of the opinion that letters of administration should be granted to this appellant, that both may be on an equality. But tlie C'ourt does not feel at liberty to enjoin a joint administration between these sisters ; indeed, the prevailing rule is not to enforce a joint administration on unwilling parties.”

It is very evident from this that the Court recognized the impropriety of attempting to create a joint administration against the protest of one of the parties thereto. The nature of the oflice forbids it. Joint administration necessarily involves joint liability, and no one can be compelled to assume such responsibility. Due regard to individual rights, as well as the interest of the estate, require that administration should not be committed to two or more persons unless they mutually agree to accept the trust. Nor does the decree in this ease require joint administration. If it did, it would be manifestly wrong; but its effect is to create two separate, co-ordinate administrations on the'same estate, and for that reason it is equally objectionable. Such a thing is unknown to our jurisprudence, even in theory, and in practice it would be entirely impracticable. Under the English statute, the Crdinary may commit the administration to the widow and next of kin jointly, or he may grant to one exclusive administration of a particular portion of the goods of the intestate, and to the other a separate administration of the residue; but no warrant for any such practice as that contemplated by the decree of the Orphans’ Court can be found in our statute.

When the class primarily entitled to administration consists of several persons, it is the duty of the register to grant letters to such one or more of them as he shall judge will best administer the estate. lie may thus grant letters to them all jointly, if they so desire; or, in liis discretion, he may select one of them and commit the administration to him alone, to the exclusion of the others; and, when properly exercised, his discretion is not the subject of review either in the Orphans’ Court or here. lie is not bound to select the oldest in preference to the youngest of the class entitled to administration. Primogeniture gives no right of preference, so as to weigh against the wish of the majority of interests; yet, if things are precisely equal — if the scale is exactly poised — being the elder brother would indine the balance: Hood on Executors G4; 1 Williams on Executors 427. And the same principle applies to the elder of two sisters. In Shomo’s Appeal, 7 P. E. Smith 35G, it is said that among children the right does not depend on seniority ; it is entirely in the discretion of the register; but when he has exercised his discretion by selecting one of the sons, it is no longer in his power to revoke the letters elms granted and issue them to another, except for sufficient cause. Wlieu administration lias been committed to any of the next of kin, others, even in the same degree of kindred, have, during the life of the administrator, no title' to a similar grantHood on Executors, 64. In the case before us the two daughters of the intestate were equally competent to administer, and the register might have granted letters to both jointly if they liad so desired; but he was not bound to do so. In the exercise of his discretion he selected Mrs. Brubaker, who requested that letters should be issued to herself alone. Having done so, it was not in his power to revoke the letters thus granted, or to join the younger sister in the administration against the will of the other. Nor is there 'anything in the circumstances, as disclosed by the testimony, to justify the Court in reversing the decision of the register, and creating a dual adminfetration, which, if it could be permitted to stand, would undoubtedly be prejudicial to the interests of the estate.

The decree of the Ordhans’ Court is reversed and set aside, and the decision of the register is affirmed; aud it is ordered that the costs, including the costs of this appeal, be paid by the appellee.


author: Mr. Justice Gordon

text:
    Lehr’s Appeal.

    1. The Orphans’ Courts of this commonwealth have no power under the Act of Oct. 13th 1840, section 1 (P. L. 1), to open decrees confirming the ac ounts of execurors, administrators and guardians, and to re-examine said accounts, where the balance thereby found tobe due has in the meantime been actually paid aud discharged.
    2. A petition for such opening and re-examination will not be entertained unless it sets forth all the facts necessary to give the Court jurisdiction, and among others the fact that the balance found to be due by the account has not been actually paid aud discharged.
    May 4th 1881. Before Sharswood, O. J., Mercub, Gordon, Paxson, Trunket, Sterrett and Green, JJ.
    Appeal from the Orphans’ Court of York county. Of May Term 1881, No. 148.
    This was an appeal by Adam Lebr, a legatee under the will of Philip Lehr, deceased, from a decree of said Court, dismissing his exceptions to, and eoniirining the amended report of an auditor appointed to distribute the balance on the account of the executors of said Philip Lehr, deceased, of whom the said Adam Lehr is one.
    Philip Lehr, by bis will, dated May 15th 1860, proved August 7th 1865, disposed of bis estate and appointed Adam Lelir and Daniel Ileckert his executors. They filed their account July 27th 1866, which was confirmed by the Orphans’ Court, and an auditor was appointed to report distribution of the balance. The auditor filed his report November 22d 1866, which, not being excepted to, was confirmed seo. reg. The executors afterwards, oil December 29th 1866, paid to the legatees .of the testator the amounts so awarded to them, and took releases therefor.
    On May 30th 1867, John Lehr, one of the legatees, filed his petition for a review, averring that the auditor had erred in the construction of the will of Philip Lehr, whereby a less sum had been awarded to him than he was entitled to; ‘‘that he was dissuaded by his brother Adam, one of said executors, from inquiring into the matter while the said distribution was in process of being made, he being then resident about thirty miles above Harrisburg, and was assured by him that all would be right, and that in consequence the decree of confirmation went against him by defaultand he prayed the Court to open the decree of confirmation of the auditor’s report, and re-commit it to the auditor for a review, &c.
    The answers of the executors denied that Adam Lehr had dissuaded the petitioner from examining into the matter, and set forth that they had paid over the balance according to die distribution reported by the auditor and confirmed by the Court.
    After argument, the Court, on July 7th 1868, in an opinion by Fisher, P. J.,lield as follows : “ As regards the construction given by the auditor to the devise to John Lehr, in the will of Philip Lelir, we think he was in error.
    “ The difficulty about this matter is not in the construction of the will, but arises from the fact that the executors have paid out the funds in their hands, according to the decree of distribution reported by the auditor, and confirmed by the Court. Should this Court not be able for this reason to correct the report of the auditor, in our opinion great injustice will be done to petitioner. If any way can be devised that will do justice between the parties and not prejudice the executors, it ought to be adopted. We have, therefore, come to the conclusion tore-commit the report of the auditor, with directions to report a distribution according to the views of the Court expressed in this opinion.
    “ To the end that all persons interested may be made parties to the proceedings, we will also direct that the auditor issue his citation, commanding all parties interested in this matter to appear before liim at a certain, time and place to be fixed by him, and to become parties to this proceeding if they think proper, and when and whore he will re-hear this distribution. After the report is made, we will allow any persons interested to file exceptions to the same. If confirmed, we will award restitution by the executors of the part improperly awarded to them, and will direct that restitution be made by each of the other legatees of the amounts improperly awarded to them, and if not refunded will issue attachment or executions to enforce the decree. By this method we think justice may be done to John Lehr, the petitioner, without doing injury to the executors.”
    The auditor, after a re-liearing, filed an amended report December 9th 1868, in accordance with the above opinion, to which Adam Lehr filed, inter alia, the following exception :
    1. That the Court had no jurisdiction to make the order and decree dated July 7th 1868, and to order the said auditor to rehear his former report of distribution, and report a distribution in conformity to the opinion and instructions contained in said decree.
    The Court, on March 23d 1881, entered a decree dismissing the exceptions and confirming the report. No opinion was filed. Adam Lehr took this appeal, assigning for error the decree.

      Cochran & Hay, for the appellant.
    — We do not admit that the auditor’s construction of the will of Philip Lehr was erroneous. But admitting it to have been so, the Court erred in granting the petition for a review. The petitioner admitted that he knew of the hearing before the auditor and of the filing of the report, to which he filed no exceptions. lie did not aver error of law appearing in the decree, and if he intended to allege fraud, it was responsively denied. He waited until after the term had elapsed, and the money had been paid in accordance with the decree. Under the Act of October 13th 1840 (Purd. Dig. 1109, pi. 49), a petition for review must set forth that the balance found clue has not been paid over by the accountant: Russell’s Appeal, 10 Cas. 260; McNeel’s Estate, 18 P. F. Smith 412; Bishop’s Appeal, 2 Cas. 470; De Witt v. Yates, 10 Johns. 156.

      W. C. Chapman, for the appellee.
    The Court below demonstrated that the construction of the will of Philip Lehr on which the fund was distributed was erroneous. The decree confirming the report was entered pro forma under the rules, without a hearing by the Court, and as the Court was satisfied that injustice had been done to the testator as well as to the appellee, it had control over its own decree to open it, on a petition for review. The appellee seeks to wrong no one, but to reclaim his own money from those who have received it by mistake.
    June 13th 1881.
   Mr. Justice Gordon

delivered the opinion of the court,

The executors of Philip Lehr’s estate filed their account in the register’s office of York county, on July 27th 1806, which was duly presented to the Orphans’ Court and confirmed. An auditor was appointed, September 18th 1866, to distribute the balance of money found to be in their hands. On the 22nd of the succeeding November the* auditor filed his report, which was, so far as appears by the record, confirmed without opposition, and in December following the executors distributed .the money in their hands to the legatees as directed by the decree of the court. Thus was the matter fully closed up in regular order, in accordance with the terms and conditions prescribed by the Act of Assembly.

Then, on May 9th 1867, we have the petition of John Lehr, die appellee, for a review of the previous proceedings, on the gronnd that the auditor had misconstrued the will of Philip .Lehr, and that he, the petitioner, had not received as much of file estate as lawfully belonged to him. This petition was entertained by the court, which, after reviewing the former report, came to the conclusion that it was wrong, and referred it back to the auditor with directions to re-hear the parties, and make distribution according to the principles expressed in the opinion of the learned judge who delivered it. On December 9th this second report of the auditor was filed, and upon it the decree was rendered which is the subject of the present appeal.

Now, it may be that the interpretation of Philip Lehr’s' will, put upon it by the learned judge of the Orphans’ Court was the right one, and that the appellant, had he presented his claim in time, would have been entitled to the full amount awarded to him by the court’s decree. This, however, is a matter which we do not propose to discuss, since the discussion would be fruitless. The appellee’s petition for a review came too late, and it was, in itself, fatally defective, hence, it ought not to have been entertained. This proceeding is under the Act of October 13th 1819, which provides for petitions of review, and gives the judges of the Orphans’ Court power to open their decrees of confirmation and to re-examine the accounts of executors, administrators and guardians. But the proviso to that act expressly stipulates • that its provisions shall not extend to any case where the balance found due shall have been actually paid and discharged.

As, in the case in hand, distribution had been made by the executors to the parties entitled under the original decree, it is very clear, if we are to be governed by the statute, that the court had no jurisdiction to entertain the petition; hence its decree thereon was void and of no effect.

Moreover, the petition is defective in this, that it does not allege that the balance found to be due was not paid over by the accountants. The petition is in the nature of a bill in equity, and must set out all things necessary to give the court jurisdiction ; here, however, the one thing of all others, necessary to give the court jurisdiction, is omitted. This was, of itself, fatal to the plaintiff's case, and his petition, for this reason, were there none other, ought to have been refused. Bussell’s Appeal, 10 Oas. 258.

The decree of the court below is now reversed and set aside, and the petition of the plaintiff dismissed, at the costs of the appellee.


text:
    Harberger’s Appeal.
    1. The executor named in a will has a right to demand that letters testamentar}' thereon be granted to him. The mere fact that such executor resides in another county of this commonwealth than that iu which the will is admitted to probate does not authorize the register or the Orphans’ Court to demand of him a bond conditioned for the faithful performance of his duties as executor.
    2. It is only afteT letters have been committed to an executor that the Orphans’ Court obtains jurisdiction under the Act of March 29th 1832, sections 22-24 (P. L. 195), and under the Act of May 1st 1861 (P. L. 680), to discharge him or compel him to give security. Prior to that time said Court has no power to control the issuing of letters to him or to compel him to give security.
    May 5th 1881. Before Sharswood, O. J., Mercur, Gordon, Paxson, Tbunicey, Stebrett and Green, JJ.
    Appeal from the Orphans’ Court of Lcmcaster Gowrvby: Of May term, 1881, No. 98.
    This was au appeal by Louis B. Harberger, from a decree of the said court directing the register of wills only to issue letters testamentary to said Louis B. Harberger, under tlie will of liis mother, Elizabeth B. S. Harberger, upon bis filing an approved bond in the sum of $25,000.
    Mrs. Elizabeth B. tí. Harberger died May 10th 1879, having by her will, dated May 12th 1873, proved July 8th 1880, appointed her sons, Alexander J. Harberger and Louis B. ilarberger to be her executors, with power to sell her real estate without liability on the part of purchasers to see to the application of the purchase-money. Objection was made before the register to the issuing of letters testamentary to Louis B. Harberger, but he decided to grant letters jointly to the two executors named in the will. Prom this decision H. W. Harberger and Alexander J. Harberger took an appeal to the Orphans’ Court, on August 2Uth 1880, and oil the same day the court made an interlocutory order, directing the register to withhold the issuing of letters testamentary to Louis B. Harberger until the determination of the appeal; and it appearing that by some misunderstanding letters had been granted to him, the court granted a rule to show cause why the same should not be revoked, orbe be ordered to give bond with security for the faithful performance of his duty'as executor. On the same day the r-gister issued letters testamentai-y to the other executor, Alex mder J. Ilarherger, from which action Louis B. liarberger entered an appeal to the Orphans’ Court.
    The testimony showed that Mrs. Harberger, a widow, resided In Philadelphia at the time of making her will, where Louis B. Harberger also resided. She afterwards removed to Lancaster, where her son Alexander J. resided, Louis remaining a resident of Philadelphia. Much evidence was given with the view of showing that Louis B. Harberger was of weak mind, untrustworthy'-, insolvent, on had terms with the members of his family, and generally unlit to act as executor.
    After argument the court (Livingston, P. J.) filed an opinion, saying, inter alia: “We have found nothing in the testimony which requires us to reverse the decision of the register, so far as the residence, or capacity of mind, or habits of the applicant is concerned. But, inasmuch as he is a non-resident, the estate apparently large, and the will does not require the purchaser to see to the proper application of the pnrehase-mouey, but expressly relieves him from so doing, we think, as he is a man of no estate, he should give security for the performance of his duty as executor, and the proper accounting for and payment over ou distribution of all moneys which may come to his hands and possession as executor.....
    “ L. B. Harberger ¡presents here a prima faeie right to letters ; he has been appointed as such by the testatrix ; lie was as near to her as the heirs or legatees named in her will, or as the other executor, her son. Her choice should be respected and held valid by the court unless there is satisfactory proof of incompetency or unfitness on Ills part, mentally or physically. This has not been presented.
    “ Since the passage of the Act of May 1st 1861, Purd. Dig. 454, pi. 242, the removal of an executor, or other personal representative of a decedent, is a question resting in the sound discretion of the court, and it was held in Kellberg’s Appeal, 5 Nor. 129, that where it is clear that the relations between an executor and the heirs are not harmonious, and it is manifest that the interest of the executor is adverse to those of the heirs, nothing but some controlling necessity will justify his retention as executor.
    “ It is the duty of these two executors to make an honest effort, laying aside any animosity they may harbor against each other, to execute the trust committed to them — the dying request of their mother; if either, upon letters being granted to them, should refuse so to do, it will then be time enough for the court to interfere and dismiss either of them who may refuse to properly execute the duties devolving upon them as executors.”
    The court entered the following decree : “ We, therefore, order and direct the Register of Wills of Lancaster county, from whose decision this appeal was taken, to issue letters testamentary to Louis B. Ilarberger upon the estate and under the will of E. B. Stowers Ilarberger, deceased, upon the presentation of a bond by said L. B. Ilarberger, approved by this court, in the sum of twenty-iive thousand dollars. The appeal of L. B. Harberger is dismissed.”
    Louis .B. Ilarberger thereupon took this appeal, assigning for error the said decree.

      H. M. North (with him H. B. Stoarr and J. Joseph Murphy), for the appellant.
    The court, in directing that Louis B. ilarberger should enter security as a condition precedent of the issuing of letters testamentary to him, exceeded its power. The .court professed to act under the Act of May 1st 1861, P. L. 680. But that act by its terms applies-only to cases where an executor, after the grant of letters testamentary to him, “ is wasting or mismanaging the estate under his charge, or when, for any reason, the interests of the estate or property are likely to be jeoparded by the continucmce of any such executor,” &c. In such casos the court may either require security or vacate the letters, but there is no authority in this or in any other act to require security in advance. Parsons’ Appeal, 1 Norris 465. The court based its action on the statement that Louis was a “ non-resident,” and a man of no estate. But he was not a nonresident of the state, he lived in Philadelphia; and a residence in anotner county was no bar to his qualifying as executor.- The testatrix exercised her legal right to appoint him an executor, and whether he has any estate other than that devised to him, or not, is immaterial. Equally immaterial is the question whether the estate of the testatrix is large or small.

      J. L. Steinmetz, for the appellee.
    The object of the Acts of 1832 and 1861 was to.invest the court with power to protect the estate of a decedent wherever “ for any reason the interests of the estate are lilceiy to be jeopardized,” &c. Now, suppose a case where the executor named in the will is notoriously a rascal, must the court award him letters testamentary to enable him to obtain possession of the estate, and then wait' until it is “ being mismanaged,” and, perhaps, wholly carried off, before it can require security or vacate the letters ? This case is hardly less strong. The testatrix made her will in 1873, and circn instances changed before she died in 1879. The testimony showed that Louis failed ; had judgments entered against him, which have never been paid; that he embezzled money in a position of trust; that his mother lost all confidence in him, and said she intended to die intestate; that in 1874 he wrote to her: “ I will return you the will left with me, as it is not worth the paper it is written on; you know the divine contempt I have for all my kindred.” The facts would have justified his dismissal as executor, and the court acted leniently in merely demanding security. In Pipers Appeal, 8 Harris 67, a trustee was dismissed before he had entered on his duties. The proceedings in that case were under the Act of June 14th 1836, which is similar to the Act of 1861. The facts in this case are stronger than in Kellberg’s Appeal, 5 Norris 129; McKennanUy. McCahan, 2 Phila. 215 ; McKennan’s Appeal, 3 Cas. 237; Chew’s Estate, 2 Pars. 153; Cornpropst’s Appeal, 9 Casey 537.
    June 13th 1881.
   Mr. Justice Gordon

delivered the opinion of the court,

The appellant’s right to letters testamentary was received, not from any act of the legislature, but from the will of his mother, Mrs. Harberger, and to these letters he was entitled without regard to his pecuniary circumstances.

As his mother had a right to devise to him the whole of her property, had she been so disposed, so had she the right to commit to him the charge of it, in whole or in part, as to herself might seem proper; and this right no one can be permitted to call in question.

It is only after letters have been committed to an executor that the Acts of 29th March 1832, and of May 1st 1861, become operative, and until that time the Orphans’ Court had no jurisdiction, either to control the issuing of letters to him, or to compel him to give bail.'

After that time, for any of the causes specified in the act, and for none other, the court may dismiss him or require sureties for the proper administration of the estate committed to his charge: Cohen’s Appeal, 2 Watts 175; Webb v. Dietrich, 7 W. & S. 401.

Whilst, therefore, the Court below did that which was proper in refusing to vacate the letters testamentary, issued by the register to the appellant, Louis B. Iiarberger, it did wrong in imposing upon him the giving of a bond conditioned for the faithful performance of liis duties as executor.

Such an order can only be imposed upon one “ not being an inhabitant of this commonwealth,” who claims the right to act as executor, but not upon one merely resident in a different county from that from the register’s office of which the letters testamentary must issue. If the executor indicated by the will' be an inhabitant of the state he is relieved from the necessity of giving a bond; for this reason, the decree of the Orphans’ Court must be reversed.

It is now ordered and decreed that that part of the decree of the Orphans’ Court requiring Louis B. Iiarberger to give an approved bond in the sum of $25,000, be reversed and set aside, and that that part of said decree which directs the register to issue letters testamentary to the said Iiarberger be affirmed. And it is further ordered, that the appellee pay the costs of this appeal.


text:
    McCort’s Appeal.
    1. Any person interested to contest the validity of a will of realty is a person interested to contest the probate thereof, within the meaning of the Act of April 22d 1850, P. L. 533. .
    2. Such person has, under the provisions of said act, five years from the time of probate to contest the validity thereof, and may, therefore, up to the expiration of that, time, appeal from the decision of the register admitting the will to probate.
    3. Wilson v. Gaston, 11 Norris 207, followed.
    May 5th 1881. Before Sharswood, C. J., Meeour, Goedon, Paxson, Trunkey, Steerett and Green, JJ.
    Appeal from a decree of the Orphans’ Court of Lancaster comity: Of May Term 1881, No. 112.

      The facts of this case were as follows : Daniel McCort, a resident of Lancaster, died November 16th 1875, from the effect of a stroke of paralysis. On the same day, a few hours before his death,, he executed his last will and testament, signed by a mark, in the presence of subscribing witnesses, whereby ho deviled and bequeathed to his wife, Ann McCort, all his property, real, personal, and mixed, and appointed his friend, Father Anthony F. Haul, sole executor. This will Was admitted to probate by the Register of'Wills, November 26th 1875, and letters testamentary were granted to the said executor.
    On November 13th 1880, nearly five years after the date of probate, Hugh McCort, a brother of the decedent, residing in Ireland, acting by his attorney in fact, Francis Quinn, filed an appeal from the decision of the register admitting the said will to probate, on the alleged ground that at the time of the execution thereof the testator was without testamentary capacity, by reason of paralysis. It was'averred in the appeal that the testator died without leaving to survive him father, mother,' widow, issue, sister or brother, except the appellant, who as only brother was the only person interested in the estate.
    The executor filed an answer, averring, inter alia, that the testator at the time of making his will was competent, mentally and physically, to make a will; and praying that the appeal should be stricken off the record, on the ground that no caveat had been filed, and the appeal had not been taken until more than three years- after the probate of the will.
    The court grauted a rule to show cause why the appeal should not bo stricken off, and, on December 11th 1880, after argument, made the rule absolute, on the ground that the appeal was not taken in time. Hugh McCort thereupon took this appeal, assigning for error the order of the court striking off the appeal.

      M. Brosius, for the appellant.
    Our appeal is taken under the provisions of the Act of April 22nd 185.6 (P. L. 533) the 7th section of which provides as follows: “ The probate by the register of ■ the • proper county of any will devising real estate shall be conclusive as to such realty, unless, within five years from the date of such probate, those interested to controvert it shall, by caveat, and action at law duly pursued, contest the validity of such will as to such realty.”
    This act relates only to real estate, and we do not seek to affect the personalty, which has all been disposed of under the will. The act extends the former limitation for an appeal from three years, under the Act of March 15th 1832, § 31 (Purd. Dig. 1255, pi. 19), to five years, and an appeal any time within that period is in time. The Act of 1856 is obscurely drawn, and prior to the recent decision of this court in Wilson v. Gas-'ton, decided January 5th 1881 (11 Norris 207), its .construction was the subject of much discussion among the profession ; but that decision has settled the construction of the act, and it also settles this case.

      George Nawman, for the appellee. —
    The Act of 1856 is simply a statute of limitation, limiting the time within which the probate of a will can be appealed from, as respects realty, to five years, after which the probate is conclusive. It does not repeal the Act of 1832, which made a decree of probate conclusive as to personalty, if unappealed from, for three years. Prior to the Act of 1856 a parly desiring to contest a will as to realty could do so by an action of ejectment within an indefinite time, or until barred by the common law presumption. The Act of 1856 was passed to remedy this mischief, by compelling a contestant to bring his “ action at law ” within five years: Kenyon v. Stewart, 8 Wright 179, at p. 189. Its title is, “An Act for the greater certainty of title and more secure enjoyment of' real estate.” It expressly applies only to real estate, and yet if an appeal can be taken after three years and within five years, and the will fails upon an issue devisavit vel non, it must fail as to both realty and personalty. As to realty, probate of a will is prima faeie evidence, and the burden of proof is on the contestants ; but the appellant’s contention would change this principle, because, on an appeal and an issue devisavit vel non, the proceedings are de novo. The Act of 1856 provides that probate shall be conclusive unless within five years “ those interested to controvert it shall by caveat and action at law ” 'contest its validity. This does not give an appeal, as under the Act of 1832, but relates to the former method of contesting by action of ejectment, trespass, etc. This court said, in Kenyon v. Stewart (supra), “ The word caveat is inaccurately used here. . .. . It always precedes the act, and is never heard of as a means of undoing what has been already done; but the other words, “ action at law,” are sensible, and mean an ejectment, as in this case, or any proceeding where the issue is devisavit vel non.”

    Eut if the act gave an appeal, who may contest ? The act says, “those interested.” All should join ; otherwise you must either give every party interested a separate right of appeal, no matter how numerous, or. else the rights of all may be concluded by the appeal of one.
    The case of Wilson v. Gaston, relied on by the other side, is not in conflict with our view; it merely decides that where an appeal was taken within three years after probate, and. an issue was refused, and tlie refusal was affirmed by the Supreme Court, the appellant could not afterwards maintain ejectment. The Act of 1856 may and should be construed m pari materia with that of 1832, and in harmony with the common law, giving it effect as a statute of limitation and making no other change than inquiring contestants as to realty to bring their ejectment within five years, or the probate will be conclusive.

      H. M. Worth, in reply.
    There is no more difficulty on the question of the effect on personalty of an appeal after three years than of an ejectment after three years, under the old law. A verdict against the will in an issue devisavit ml non on an appeal will not affect personalty any more than would a verdict against the will in an ejectment. The distinction between ai appeal and an ejectment was not pressed in the court below; the only ground on which the decision rested was that vs e were not in time; and that question is settled in our favor by Wilson v. Gaston, which also decides that an issue devisavit vel non is-an “ action at law ” within the meaning of the act.
    June 13th 1881.
   Mr. Justice Gordon

delivered the opinion of the court

The will of Daniel MeCort relates to and disposes of his real as well as his personal property, and, so far as it does relate to realty, it is subject to the provisions of the Act of the 22nd of April, 1856. Hence, the court erred in striking off the appeal from the register’s sentence, or decree, entered by the appellant on the 13th of November 1880.'

The act inferred to makes the decree of the register before whom probate of any will, devising real estate, is made, “ conclusive as to such realty, unless within five years from the date of such probate, those interested to contest it shall, by caveat and action at law, duly pursued, contest the validity of such will, as to such realty.” Three things herein stated require our notice : 1. The’judicial and conclusive character of the register’s decree ; 2. The fact that five years is given within which to controvert such decree and contest the validity of such will; 3. That the act is limited to a devise of realty, hence it in no way affects the probate of a will, so far as it concerns personal property; as to it the limitation as found in the Act of 1832 continues to apply.

Now, as we endeavored to show in the case of Wilson v. Gaston, 11 Norris, 207, in order to harmonize this incongruous statute with itself, and give it the force obviously intended by the legislature, we are obliged to construe the words “ caveat and action at law,” as the beginning and ending of the procesa by which the register’s decree is to be controverted. Without an interpretation such as this we make the statute one of limitation only; we refuse to the sentence of the register the force of a judicial decree ; wo must strike out the word caveat as meaningless, repudiate the idea of a controversy involving the sentence of probate, and limit the contest to any action at law which may involve the issue of devismitwl non. Yet it is obvious that the framer of the act had all the while in his mind ■a contest over the validity of the probate, for such probate shall be conclusive unless “ those interested to controvert it” shall, by caveat, etc., contest the validity of such will. From this, it would seem clear, that the right to contest, the will is limited to those who may be interested to controvert the probate. This, however, can have force only on the hypothesis that the will, after probate, cannot be attacked except by a contest over the decree admitting it to proof. We can, indeed, readily imagine a case, as that of a purchaser after such decree, who may have no interest whatever in the probate, and is yet interested to contest the will. How, then, is all this to be harmonized and reconciled ? Certainly only by the construction recognized in Wilson v. Gaston — that is, by making all persons who may, within the five years, happen to be, or to become, interested in the will, interested also in the probate. In this way no right, unless perchance it be one purely technical, is taken from any person, and, at the same time, the provisions of a valuable statute are saved.

We conclude, therefore, that under the Act of 1856, though it might be different did the Act of 1874 apply to this case, the appeal of the appellant, being within live years from the date of the probate, was iu time, and the court ought not to have stricken it off.

The decree of the Orphans’ Court is now reversed at the costs of the appellee ; the appeal of the appellant reinstated, and a procedendo awarded.


author: Mr. Justice Trunkey

text:
    Burkholder versus Markley.
    1. The rule that lines actually run aud marked upon the ground are the true survey, and that they will control the calls for natural or other fixed boundaries, and also constitute the boundaries of a grant where they differ from those of the courses and distances stated in.tbe conveyance, applies as well in cases of grants by individuals as in cases of grants by the Commonwealth.

      2. Wherever, therefore, the boundary of a tract of land is in dispute, evidence is admissible to show that a line actually marked upon, the ground was at the time of the conveyance surveyed and fixed upon by the grantor and the grantee as the true boundary, and the line so fixed upon surveyed and marked will control the calls, courses and distances specified in the conveyance.
    May 5th 1881. Before Siiarswood, C. J., Mercue, Gordon, Paxson, Tbunkey, Sterrett and Green, JJ.
    Error to the Court of Common Pleas of Lancaster county: Of May Term 1881, No. UL
    Trespass viet cwm.is, quare clausum fregit, by Jacob Markley against M. J. Burkholder, for entering on the plaintiff’s land and tearing down a fence. 'Blea not guilty, and liberum tenem,entum.

    On the trial, before Livingston, P. J., the following fads appeared : The plaintiff and the defendant' were owners of adjoining tracts of land, the location of the division line between which was the subject of this dispute. Both claimed title by mesne conveyances from Samuel Moyer. The descriptions in all the deeds, under which both parties claimed, contained, inter alia, the following courses and distances: u Thence by other hmd of said Samuel Moyer, north, seventy-five degrees west, three perches and four-tenths, to a post, thence by the same north nineteen degrees east, twenty-three perehes cmd fioe-tenihs, to a stone in said road,” etc. The part in italics is the division line in dispute. This was a straight line, upon or near to which a feuce was erected prior to the time of the conveyances from Moyer, and which had remained standing until a portion of it was torn down by the defendant. It was not, however, alleged in the nar-r. to be a line fence.
    Upon a recent survey of the Burkholder tract, it was found that the line as described in the deeds runs through the corner of a shed annexed to a hotel building on the land of Burk-holder, both of which buildings had been erected by Moyer.
    The defendant offered to prove by Isaac Gingrich, ids predecessor in title and the immediate grantee from Moyer of the defendant’s tracf, that by the agreement of purchase between himself and Moyer the hotel and shed were wholly upon the tract purchased by him, and the boundary 1-ine in question was fixed upon 1 lie ground by Moyer and himself from twelve to eighteen inches outside the said shed, so that the water falling from the roof of the shed would fall upon Gingrich’s (now dei'endant’s) land; that the end of the said line, as then run by the surveyor on the ground, was marked by a -stake and not a stone; and that the line, as subsequently described in the deeds, differs from that line as so fixed and marked on the ground. Objected to; objection sustained and offer rejected ; exception.
    The defendant also offered in evidence the deposition of Samuel Moyer, and the court, upon objection, ruled out the portions of it which corroborated the facts stated in the above offer.
    Yerdict, guilty; damages assessed at $25, and judgment thereon. The defendant took this writ of error, assigning for error the rejection of said offer, and of the portions of the deposition.'

      W. W. Brown (S. Price with him), for the plaintiff in error.
    —The court erred in rejecting evidence of the lino and marks agreed upon between Moyer and Gingrich at the time of the purchase, and then actually run by the surveyor. It is well settled that lines run and marked on the ground control the courses and distances'as described in the deed, and that where the two differ parol evidence of the actual line is admirsible in either ejectment or trespass: Hetherington v. Clark, 6 Casey 393; Poth v. Anstatt, 4 W. & S. 307 ; Souder v. Morrow, 9 Casey 83; Willis v. Swartz, 4 Casey 413; Bartle v. Vosbury, 3 Grant 277; Craft v. Yeaney, 16 P. F. Smith 210; Blasdell v. Bissell, 6 Barr 258; Lodge v. Barnett, 10 Wright 477.
    The deposition of Moyer, which was excluded, showed that he proposed to put in a stone, but in fact put a stake, which still exists in place on the land, and that the stone was placed in the mid lie of the road, about twenty feet from the stake, to mark the corner of another tract, where it was found.

      8. P. Eby and J. L. Steinmetz, for the defendant in error.—
    The attempt was to contradict by parol an unambiguous description in the deed of a line which was marked and identified by a corner-post, a fence and a stone. Burkholder was satisfied with this true line until he found that running between the two termini it would cut off a part of his shed. We admit that landmarks control courses and distances, but here the landmarks and the courses and distances agree. The fact that a corner of a shed was over the line when Markley bought his tract may subject him to the easement of allowing it to stand, but it is no reason for changing the true line and shifting it six feet on his line for the whole distance. This is not a question of title, or of reformation of the deed in equity. The position of the line is a question of- fact in the issue whether a trespass was committed. All evidence relating to the actual marks on the ground was admitted. Such evidence as was excluded came within the rule that parol evidence can only be admitted to contradict, explain or reform a deed on the ground of fraud or mistake. Miller v. Smith, 9 Casey 386; Buck v. Fisher, 4 Wharf. 517; 1 Greenleaf on Evidence, § 275.
    June 20th 1881.
   Mr. Justice Trunkey

delivered the opinion of the court,

Samuel Moyer, by deed dated April 10th 1865, conveyed part of a tract of land to Isaac Gingrich, whose title has been vested in Burkholder. On the 10th of May following, Moyer conveyed another part of said tract to David Ober, which part is now vested in Marbley. The line between these parcels, being the one in dispute, is described in the deeds as fanning from a post north nineteen degrees east, twenty-three perches and five-tenths, to a stone in the road. Both parties agree that this is a straight line. They also agree that a shed, built before Moyer conveyed, is still standing where it did at the time of the conveyances. Markley claims that the line, ascertained from the courses and distances set out in the deeds, passes through that shed so that a portion of it is on his land. Burkholder claims that after Moyer had orally agreed to sell to Gingrich, and before he made the deed to him, there was an actual survey,. that the line ran from a post direct to a stake, not less than twelve nor more than eighteen inches from the shed, and that the land was sold and bought by the parties with reference to said line. If Burkholder’s claim be true, then, so far as the courses and distances in the deeds show a line differing from that, they must yield.

The lines run and marked on the ground are the true survey, and when they can be found will control the calls for a natural or other fixed boundary; and also constitute the boundaries in the grant where they differ from those produced by the courses and distances stated in the patent. This well-settled rule in cases of lands' granted by the commonwealth, applies to grants by individuals : Blasdell v. Bissell, 6 Barr 258 ; Craft v. Yeaney, 16 P. F. S. 210. In Craft v. Yeaney the testimony of the original grantor was received, the court below saying, While it is true the deed cannot be'changed, or construed, or affected by parol, it is competent to prove outside the deed that the calls in the deed are not on the ground, or that a line or boundary called 'for in the deed is in a different place from that contracted for by the parties, or that what is called the eastern line of warrant Do. 4019 is not at the place sold and bought to.” And that was held not to be error.

Where a deed was for fifty acres of land, the quantity intended by both parties, described by existing lines on three sides, and called for a south “ line to be ran so far south from the north line, and paralled therewith, as to include fifty acres of land,” it was held competent to prove that the line agreed upon by the parties as the south line was a fence, though it differed from the one produced by the description in the deed. The grantee objected to the deed because she did not know that, fifty acres would run to the fence, but the grantor assured her that fifty acres would reach the fence, that the deed embraced it, and she accepted the deed. It was said to be of no consequence whether the grantor was aware that he was making a misrepresentation, if by it the grantee did what she would not have done and was injured: Bartle v. Vosbury, 3 Grant 277. That decision rests on the principle that a line on the ground, fixed by the parties as the one sold and bought to, controls calls or distances stated in the deed, wherever there is fraud or mistake. The cases enforcing and illustrating the application of this principle are numerous ; it would be idle to cite additional.

It may frequently occur that the location of a line which was agreed upon, cannot be determined for want of evidence. In such case the location js settled by the deed. The lines produced by the calls, courses and distances in the deed, are taken as correct, unless there be proof of a different line on the ground, which the grantor and grantee fixed as the true one.

At the trial of this case considerable evidence was rightly received, tending to show that the parties fixed a line at the time of the sale, and its location on the ground. Other pertinent and material evidence for the same purpose was rejected, and for this the judgment must- be reverend. We are of opinion that all of the offers of testimony, set forth in the several assignments of error, should have been admitted.

Judgment reversed, and venire facias de novo awarded.


text:
    Commonwealth Mutual Fire Insurance Company versus Huntzinger.
    1. In an action upon a policy of insurance, where the defense is a breach of warranty upon the part of the insured, it is immaterial whether the insured in making the warranty acted in good or bad faith, or whether he beli-.ved the facts warranted to be true or not. If the facts ■warranted were false, the insured cannot recover.
    2. Knowledge by the insurer or by him and the insured of a breach of a warranty at the time it is made does not relieve the insured from the consequences of the breach, and is no basis for reforming (he policy, though equity will reform it in the case of mutual mistake of fact.
    3. An applicant for a policy of insurance, in answer to a question in the application, with reference to the amount of insurance already placed upon his premises, answered, $1,500 or $3.000. The agent of the company, who was Along up (he application, said the exact amount should bo fixed. The applicant replied that he had not his policy with him, but he thought, the amount was $1,500. The agent, agreeing that this was the amount., inserted it iii the application. The real amount was $3,000. The applicaiion was. by the terms of the policy issued in pursuance thereof, made a part of said policy, and every fact therein stated was warnin'ed to be true. A loss afterwards occurring under the policy, suit was brought by the insured against the company, who defended on the ground of breach of warranty: Held, that the defendant was en til led to judgment.
    4. Where a policy of insurance provides that notice of'additional insurance, or of any change in existing insurance, shall be given to the company by the insured in writing, and he acknowledged in writing by the secretary, the mere knowledge of the company’s agent as to such subsequent insurances, or change in existing insurance, is not such notice to the company as will bind it.
    May 6th 1881. Before Sharswood, C. J., Merour, Gordon, Paxson, Trunkey, Sterrett and Green, JJT.
    Error to tiie Court of Common Pleas of Lancaster county: Of Muy Term 1881., No. 80.
    Debt, by F. Huntzinger to use, etc., against tbe Commonwealth Mutual Fire Insurance Company, upon a policy of insurance for $1,200 issued by the defendant, insuring from üre a stock of goods in a frame’store in Tremont, Schuylkill county. The goods were totally destroyed by tíre during the life of the policy.
    „ On the trial, before Patterson, J., the plaintiff put in evidence the application and policy. The former contained the following: “ This application shall form part of this policy
    of insurance, cmd all the statements herein made shcill constitute warranties on the part of the insured. . . . Q. What amount is there insured on the property, in what company and in whose name? A us. $1500, Pennsylvania Mutual, of Columbia, Pa. — Applicant’s.”
    The policy contained the following: “Reference being had to the application of the .insured for a particular description and which shall form part of this policy. . . . And provided further, that in case the insured shall have already any other insurance against loss by fire on the property hereby insured, not notified to this company in writing, then this insurance will be void and of no effect.”
    In point of fact the answer to the above question in the application was untrue, the prior insurance in the Pennsylvania Mutual Company being $2,000, instead of $1,500, as stated. The plaintiff proved, under objection, by the agent of the (i'ompany defendant, who effected tiie insurance, that in preparing the application the plaintiff, in reply to the said question answered, Either $1,500 or $2,000, in the Pennyslvania Mutual, he wasn’t sure which, but was under the impression that it was $1,500.” The agent said, ‘‘ We ought to know for sure,” but put it down $1,500. The testimony on this subject is' more fully recited in the opinion of this court.
    The defendant presented a point, which, with the answer thereto, was as follows: — ■
    “ The plaintiff’s answer, ‘-$1,500, Pennsylvania Mutual, of Columbia, Pa.,’ ” to the question, ‘ What amount is t-hei’e insured on the property, in what company, and in whose name?’ in the application signed by the plaintiff, making all the statements in said application warranties on the part of the insured, when in' f ict the insurance in said Pennsylvania Mutual, of Columbia, Pa., was $2,000, prevents the plaintiff from recovering on the policy sued on, and the verdict must be for the defendant.”
    Answer. “ The' court answers this point by sayiug, that the law of the point is determined .by the finding of the fact or, facts by the jury. Mr. liuntzinger’s testimony, as stated in this point, does not exactly accord with the testimony as given —the plaintiff having made the application to and with the defendant’s agent, acting within the scope of his authority, and therefore binding his principal — the evidence as to such agent’s authority, showing no limitation of authority, and with the knowledge by the plaintiff, that the same agent was also the agent of the Pennsylvania Mutual, of Lancaster county, who hud insured the' applicant to the sum of $2,000, and not-$1,500. If the answer of plaintiff to the question put by the said agent was made in good faith, and the agent replied, ‘ We will put it down $1,500, because I think it was thatif there was no collusion between plaintiff and the agent to defraud the Commonwealth Mutual Eire Insurance Company in the procurement of the policy; and if, as the uncontradicted testimony shows, this company — defendant—as late as Nov. 4ih 18SÓ, have, by its board of directors, actually assessed the premium note of Huntzinger, given on this policy, here sued upon ; and as the condition of this policy, or one of them, was that the applicant must reveal any and all prior insurance; if you believe the evidence of Jas. W. Ziebach, the agent, and believe that he and Huntzinger at the time of the application, had honestly, and bond fide, entirely forgotten the fact, as to the exact amount insured prior in the Pennsylvania Mutual Company, then the mistake was mutual — both dealt- under a mutual mistake in respect to that matter of fact — it will not vitiate in itself, this policy, in the absence of all fraud ; and the defendant has nó defense in this suit, but the proof of fraud, and we decline to affirm this point of defendant. The testimony of the whole case must go to the jury.”
    Verdict for the plaintiff for $1,350, and judgment thereon. The defendant took this writ of error, assigning for error,inter alia, the answer to the point above given.

      Cottrell and H. M. North, for the plaintiff in error.
    The sole question in this case is the effect of the warranty in the application, as distinguished from a mere representation. The court, in their answer to onr point, negatived the absolute and binding effect of the broken warranty, as a bar to the plaintiff’s recovery. It is not disputed that the statement as to the amount of insurance existing in the other company was a warranty, and that it was untrue, and there is no allegation of fraud or deception by the agent in filling up the application. "Whether plaintiff acted in good faith or not is immaterial. He deliberately warranted the truth of a material fact, which was untrue. On general principles of law, as well as under the express prorision of the policy, such breach of warranty is a bar to the plaintiff’s recovery on the policy : Cooper v. Farmers’ Mut. Fire Ins. Co., 14 Wright 299 ; Eilenberger v. Protective Fire Ins. Co., S Norris 464 ; McClure v. Watertown Fire Ins. Co., 9 Id. 277 ; Birmingham Fire Ins. Co. v. Kroegher, 2 Id. 64; Lancaster Fire Ins. Co. v. Lenheim, 8 Id. 497; Pottsville Mut. Fire Ins. Co. v. Horan, 8 Id. 438; Smith v. Ins. Co., 12 Harris 320. The case is unlike those where the agent of the company intentionally or negligently wrote in the application a false answer, when a true one had been given by the applicant.

      J. S. Gobin (with him A. J. Kauffman, and A. J. Eberly), for the defendant in error.
    It is admitted that this was a fair and honest loss, and the evidence shows that the company has levied and collected an assessment to meet it. The sole defense is the technical one resting on the effect of the warranty, and the Cooper case, 14 Wright 299, is chiefly relied upon to defeat the plaintiff’s claim. But this case is clearly distinguishable. There the question was as to the existence of incumbrances on the property, and the answer was “Not any.” In the present case the plaintiff’s answer was true, so far as it went — that $1,500 was insured in the Pennsylvania Mutual Company — but omitted to state that $500 additional was so insured. The applicant honestly expressed to the company’s agent, who was filling up the application, his uncertainty as to whether the amount was $1,500 or $2,000, thus putting the agent on inquiry, but the latter was satisfied to accept the plaintiff’s impression that it -was $1,500, instead of verifying the amount, or insisting on the plaintiff’s doing so. A bona fide answer thus given is very different from a total denial of the existence of incumbrances. The agent here was acting within the scope of his employment by the company, which was not defined and limited in writing, as in the Cooper case. That his testimony was admissible, and the company was bound by his act, is shown by the following authorities: Watertown Fire Ins. Co. v. Simons, 37 Legal Intel]. 503 ; Insurance Co. v. Wilkinson, 11 Amer. L. Reg. 483; May on Insurance, § 462; Eilenberger v. Ins. Co., 8 Norris 464; Smith v. Ins. Co., Id. 287; Howard Ins. Co. v. Bruner, 11 Harris 57; Conn. Gen. Life Ins. Co. v. McCurdy, 8 Norris 372. .
    June 20th 1881.
   Mr. Justice Trunkey

delivered the opinion gí the court,

The application and policy evidence the contract between these parties, and it is stipulated that “ this application shall form a part of this policy of insurance, and all the statements herein shall constitute warranties on the part of the insured.” One of the statements is, that the amount insured on the property is $1,500 in Pennsylvania Mutual, of Columbia. In fact, the amount of insurance was $2,000. To avoid the consequences of a breach of his warranty, Huntzinger called James W. Ziebach, who testified that he was agent for the company defendant, and also for the Pennsylvania Mutual, of Columbia ; that the defendant did not furnish him blank policies to write and issue; that he received the application, sent it to the company, and if it accepted the risk, the policy was forwarded .to him and he delivered it to the insured. When he took this application he read the question, “ What amount is there insured on the property, in what company, and in whose name ?” Huntzinger “Said he had $1,500 or $2,000insurance in the Pennsylvania Mutual, he didn’t know wliich. He thought it was $1,500. I said, ‘ We ought to know for sure.’ He said, ‘ My policy is at the house.’ He didn’t have it in the store, and he was not sure about it. He was under the impression it was $1,500, and put it down $1,500. I said, we would put it down $1,500 because I thought it was that. And he signed the application.”

It is clear beyond question that the plaintiff intended to make the statement as written when he signed the paper, and knew just what he was doing. There was no mistake or fraud by the agent in writing one thing when the answer was another. The oral and written testimony entirely accord. Each kind shows that Huntzinger stated the amount of insurance was $1,500 and that the true amount was $2,000. The plaintiff must have known that the policy was not issued by the agent, but by the company, after its acceptance of the risk. There is not the slightest evidence that he was induced to sign the application by tlie agent’s deceit. If honest, neither remembered the amount of insurance, but the policy was in the applicant’s house. If a fraud was perpetrated, it was participated in by both agent and insured, for they agreed upon the same thing. However, under the charge of the court, it may be taken as settled by the verdict, that the plaintiff committed no fraud, but on the contrary acted in good faith when lie warranted a statement which he did not know to be true and could have ascertained it was false by looking at his policy. The court charged that if Huntzinger and Ziebacli had forgotten “ the exact amount insured prior in the Pennsylvania Mutual Company, then the mistake was mutual — both dealt under a mutual mistake in respect to that matter of fact — it will not vitiate in itself this policy, i'n the absence of fraud ; and the defendant has no defense in this suit, but the proof of fraud.” If this ruling be correct, nothing can be of less value than the warranty of a representation — the representation would be just as good without its warranty.

The distinction between a representation and a warranty is too broad and well-defined to require remark. For an injury arising from a false representation, the remedy is in case for tlie deceit, bad faitli lying at its foundation; for an injury by a breach of ivarranty the action is upon the contract, and it is immaterial whether the defendant did or did not believe the fact be warranted. Precisely the same principles apply in making a defense on the ground of the plaintiff’s false representation, or breach of warranty, as would in sustaining an action on such ground. Hero, no question was raised as to false representations by Huntzinger which involved fraud or bad faith on his part. The testimony adduced by himself plainly revealed his broken warranty, and the chief question was as to the effect of that upon his claim under the policy. It is not material whether the agent knew of the breach. Mere mutual knowledge by the assured and the agent of tlie insured of the falsity of a fact warranted, is entirely inadequate to induce a reformation of • the policy so as to make it conform with the truth. It is rather evidence of guilty collusion between tlie agent and the assured, from which the latter can derive no advantage.” Knowledge by the underwriter, or by him and the assured, of the breach of awarranty, at tlie time it is made, does not relieve the assured from the consequences of the breach, and is no basis for reforming the policy, though equity will reform it, in the case of mutual mistake of facts. It is not true that the rule which prevails in sales of personal property, namely, that a warranty does not embrace defects known to the purchaser, is also extended to warranties contained in policies of insurance. The purpose in requiring a warranty is to dispense with inquiry and cast upon the assured the obligation that the facts shall be as represented. A representation and a warranty are essentially different things, and call for the application of different rules of law. Knowledge that the answer was untrue might relieve against a false or imperfect representation : State Mutual Fire Ins. Co. v. Arthur, 6 Casey 315. This doctrine, enunciated in that case, has not since been doubted in Pennsylvania.

In Cooper v. Farmers’ Mutual Ins. Co., 14 Wright 299, it was held'that that which is a warranty in a policy of insurance by its terms, cannot be shown by parol evidence to have been inserted by mistake. ' This certainly is sound, if understood with reference to such mistakes of the assured as when he makes a false statement, believing it to be true, without having been deceived and misled by the other party. No principle of law will enable a party who guarantees a fact upon which a contract for insurance is based, which fact is afterwards found not to exist, to enforce the contract. He agrees to answer for the truth of the fact, and cannot escape on the ground of his mistake as to its existence. But if by a fraud or mistake 'of the other party, or of the agent of the other party while acting within his authority, he be induced to sign a statement which he did not make and did not intend to make, such statement is not only void as to himself, but he shall not lose the benefit of a contract for which he paid the stipulated consideration, and held without knowledge of the mistake or fraud. If an agent for an insurance company, intending to write an answer to his question as made, by the applicant, write something else, and the paper is signed, both believing the answer correctly written, there is a mutual mistake, and the policy may be reformed. Where the answer is written as made, there is no mutual mistake, and no relief for him who warranted it, unless the agent deceived him into the making of it.

The cases of Smith v. Farmers and Mechanics’ Mutual Fire Ins. Co., 8 Nor. 287, and Eilenberger v. Protective Mutual Fire Ins. Co., Id. 434, are not at all in conflict with prior decisions as to the effect of a warranty actually made; they relate to the admissibility of evidence to show fraud or mistake by an agent of the company, of which the assured had no knowledge till after his loss, and his right, to recover upon his- policy, notwithstanding such fraud or mistake. Of like purport is the decision in Insurance Co. v. Wilkinson, 11 Amer. L. Register 485, where it is said, in the opinion, that the insured did not intend to make the representation when lie signed the paper, did not know he was doing so, and liad refused to make any representation on the subject; it was held that the answer written by the agent was his, not the applicant’s, and his principal, the company, was bound by it.

We are of opinion that plaintiffs fifth point should have been refused, and the defendant’s point affirmed. If the jury believed the evidence of Ziebach, the plaintiff was not entitled to recover. The facts assumed in the defendant’s point were shown by written evidence, and were not disputed.

The conditions of insurance provide that notice of additional insurance, or of any change in existing insurance, shall be given to the company by the insured in writing, and shall be acknowledged in writing by the secretary; and no other notice shall be binding or have any force against the company. In absence of evidence of waiver of the notice required in this stipulation, we do not think the jury would be justified in inferring that the knowledge of the agent will bind the principal of notice of subsequent insurance or surrender of previous insurance.” The parties agreed that written notice should be given, and in like manner acknowledged by the secretary; mere knowledge of an agent is not the equivalent of that.

Judgment reversed.


text:
    Philadelphia Contributionship for Insurance, etc., versus Commonwealth.
    1. The annual tax imposed by the Act of January 7th 1879, § 10 (P. L. 118), upon certain classes of corporations therein named, is not laid upon the money and receipts of such corporations, but upon their franchises, the amount of the net earnings or income being resorted tc simply as a just measure of the tax that should be paid for the enjoyment of those franchises.
    2. All corporations coming within the provisions of the above act are therefore bound to pay annually to the Commonwealth the fixed per centum rate upon all their income, even though part thereof may be derived from loans of the United States, or from loans of this Commonwealth, which by the acts authorizing their issue are expressly made payable free of State taxes.
    I 3. Such corporations are not entitled to deduct from the amount of income upon which taxation is payable by them, the difference between the amount expended several years before in the purchase of a security, and the par value at which such security has within the current year been redeemed. This cannot properly be regarded as a loss;'even it be so, the capital only is decreased thereby, aud this does not necessarily diminish the annual net earnings which have alone been adopted as the measure of the tax imposed.
    May 16th 1881. Before Sharswood, C. J., Mercur, Gordon, Paxson, Teunket, Sterrett, and Green, JJ.
    Error to the Court of Common Pleas of Dauphin county: Of May Term 1881, No. 155.
    Case stated, showing the following facts: The Auditor General and State Treasurer, in settlement of tax under the Act of January 7th 1879 (which is in this respect a re-enactment of the Act of May 1st 1868), charged the corporation with a tax of three per cent, on the amount of its net earnings or income received from all sources during the year ending October 31st 1879. The corporation appealed from the settlement on the following grounds: 1. Because it imposes a tax on income derived from loans of the United States : 2. Because it imposes a tax on income derived from loans of the State of Pennsylvania, which, by the terms of the acts which authorize their issue, were expressly made payable free of State taxes: 3. Because it disallows the claim of the company, in estimating its net income, to deduct from its gross receipts its loss on United States securities, purchased above par'and paid off by the government at par.
    The court held that the tax imposed by the above-mentioned acts is a tax not on the property but on the franchise of the corporation, to bo computed at the rate of three per cent, on its net income from all sources, including non-taxable bonds of the United States or of Pennsylvania. The court, therefore, overruled the first two grounds of appeal. As to the third objection, the court said, in an opinion by Henderson, J., “But there is a farther contention — the corporation defendant, iu estimating its net earnings, claimed to deduct from its gross receipts its loss on United States securities, purchased above par and paid off by the government at par. This claim was disallowed by the accounting officers. The argument in form of this proposition is not without some plausibility. It is crude aud difficult to answer. If a man gets less for a thing than he paid for it, he meets with a loss, and it impairs his capital. But it is the annual net earnings that are taxed. A diminution of capital does not necessarily diminish the annual net earnings. To adopt the rule here contended for would be to east an uncertain factor into the account. For this is purely a matter of speculation. The tax is assessed upon the net earnings, it rises and falls with them, not with the capital; with the net earnings, not with the earning capacity. If the corporation is inactive or its capital lies idle, it produces no basis of taxation.
    “ But it seems to mo that the fallacy of the argument is m the assumption that a depreciation in the value of the bonds is a loss to be deducted from the gross receipts. Clearly not, except as the depreciation affects the a/nnual net earnings. We should prefer to say that the premiums paid for the bonds should have been deducted when the investment was made, and might properly have been accounted for and taken from the gross receipts. But certainly the State cannot now settle a profit and loss account running through several years and many transactions. The law requires an annual settlement producing an annual tax, and upon an annual basis.”
    The Court entered judgment on the case stated in favor of the commonwealth, and subsequently overruled exceptions filed to the decision, whereupon the defendant took this writ- of error, assigning for error the decision of the Court overruling the defendant’s specifications of appeal from the settlement, and the entry of judgment for the commonwealth.

      W. W. Montgomery, for the plaintiff in error.
    It is admitted that a State cannot tax the property of corporations inv’ested in United States securities. But the Act of January 7th 1879, imposes a tax on income “ from all sources.” It is clear that as to so much of the “income” Avhich is derived from United States securities, the act is unconstitutional. A tax on the income is a tax on the debt, for as soon as the interest is due it becomes part of the debt. It has frequently been decided that in Avhatever form or in Avhatever terms, direct or indirect, a State law- attempts to reach United States bonds for taxation, the act is invalid : McCulloch v. State of Maryland, 4 Wheat. 316; Weston v. Charleston, 2 Peters 449 ; Bank of Commerce v. New York City, 2 Black 620; Bank Tax Case, 2 Wallace 200; Opinion of the Justices, 53 N. H. 640; Bank of Kentucky v. Commonwealth, 9 Bush 46 ; Monroe Savings Bank v. City of Rochester, 37 N. Y. 365. The case of State Tax on Railway Gross Receipts, 15 Wallace 284, is inconsistent in principle Avith the previous authorities, and should be restricted to the point actually decided.
    The court below adopted the refined distinction that the tax ivas on the corporate franchise, measured by net income, but the act does not say so, and if it did, it would be an attempt to do indirectly what cannot be done directly. Neither statutory implication nor judicial construction can evade the constitutional prohibition by calling United States securities “ a measure for taxing tlie franchise.” In fact they are no measure of the exorcise of the franchise. Our franchise is to insure houses from fire, but our income from the bonds remains constant, whether we insure much or little or not at all. The same argument applies to the Pennsylvania non-taxable bonds. To tax them thus indirectly is repudiation pro tanto: Newark City Bank v. The Assessor, 30 N. J. L. 16.
    We were entitled, in estimating net income, to deduct from gross receipts the loss suffered by receiving less for loans paid off than we paid for them. If we had received more than we paid, the profit would have been included in the taxable fund, and why shall not the loss be deducted ?

      Lyman D. Gilbert, deputy attorney-general (with him Henry TV. Palmer, attorney-general), for the commonwealth.
    There is a distinction between a tax on the franchise of a corporation and a tax on its property. In the former case the tax may be constitutional, even though a portion of the corporation’s capital is invested in United States securities, or other non-taxable property: Savings’ Society v. Coite, 6 Wallace 594; Provident Institution v. Massachusetts, Id. 611; Insurance Co. v. Loud, 99 Mass. 146. There is also a distinction as to the liability to taxation of property itself, according to its different stages of existence. Thus, in the State Freight Case, 15 Wallace 232, the Supreme Court held that a tax upon freight transported from State to State was invalid; biit at the same term, and in the next succeeding case, the same court held that a State tax upon the gross receipts of railroad companies is valid, though the gross receipts are largely made up from freight transported from State to State : State Tax on Gross Receipts, 15 Wallace, 284. The ground of the decision was that after the money lias come into the treasury of the company it has lest its distinctive character as freight by having been incorporated into the general mass of tlip company’s property. So, although certain imports in original packages are non-taxable, yet when the articles imported have been incorporated with the mass of property in the country, they lose their exemption: Brown v. Maryland, 12 Wheat. 439, 441; Waring v. Mayor, 8 Wallace 122; Pervear v. Commonwealth, 5 Wallace 479. So also the change from net earnings into dividends creates a new kind of property, subject to another kind of tax: Jones & Nimick Man’fg. Co. v. Commonwealth, 19 P. F. Smith 137.
    In this case the tax is not on the United States bonds, nor on the interest thereof, nor on the gross receipts arising in part therefrom, but is' measured by the “ annual net earnings ” — the residuum of gross receipts after expenses met — an entirely different kind of property, and a legitimate subject of taxation, without reference to the source whence it is derived. Such property springing from one source may thus be differently taxable in its several stages, as gross receipts, net earnings or dividends.
    The company suffered no “ loss ” by the payment at par of bonds which they purchased at a premium. The premium was the price of the extra security of the investment. Each year diminished the annual proportion of premium originally paid, and if any abatement should be made, it should only be the proportion chargeable during the tax year of 1879, and that would be merely speculative. But if it be a loss, it is a loss of capital, and cannot be deducted in computing a tax upon net earnings for any one year. A diminution of capital does not necessarily diminish the annual net earnings.
    June 13th 1881.
   Mr. Justice Sterrett

delivered the opinion of the court,

By the 10th section of the Revenue Act of 1879, — which is substantially a re-enáctment of the 6th section of the Act of May 1st 1868, — certain individuals, companies and corporations, therein mentioned, are required to make report to the Auditor General, setting forth the entire amount of net earnings or income received by them, from all sources, during the preceding year,, and pay a tax of three per centum thereon for the uso of the Commonwealth: P. L. 118.

The corporation, plaintiff in error, being clearly within the provisions of the act, made its return of earnings or income for the tax year ending October 31st 1879, and included therein $28,615.73, interest on United States bonds, and $15,375, interest on Pennsylvania bonds; both of which items, however, it claimed rvere exempt from taxation. It was also claimed that, in ascertaining its net earnings or income, the difference between the par value of $307,000 United States bonds whicli were called in and paid during the year, and the price at which they were purchased several years before, should be treated as a loss and deducted from its gross receipts. The accounting officers having refused to allow any abatement on account of either of these three items, the tax thereon, amounting to $2,068.19, was paid under protest and an appeal taken from the settlement. The decision of the court below was also adverse to the plaintiff in error on the points in controversy. The questions thus presented by the record are, whether, the income derived from either class of bonds, is exempt from taxation; and whether the difference between the price paid for the United States bonds and their par value, should be regarded as a loss and deducted from the gross receipts.

It may be conceded that the bonds, as such, are not taxable by the Commonwealth; but the tax in question is not laid on. the bonds. It is a tax on the corporate franchise of the plaintiff in error, measured by its net earnings. The right of the state to impose a tax on the franchise of any corporation that is indebted to it for existence and protection, is too clear for argument. If the right exists, as it undoubtedly does, the manner of its exercise must be left to the wisdom of the legislature : and, perhaps no standard or measure of taxation can be adopted that will operate more justly and equitably than a per centum on net earnings or income.

The interest received by the company on the bonds undoubtedly formed a part of its income, and while the bonds themselves are exempt from taxation by virtue of the laws under which each class respectively was issued, it does not follow that the same immunity adheres to the money paid from time to time in discharge of the interest due on the securities. When so paid it loses the non-taxablo characteristic of the bond on which it accrued, and should thenceforth be treated as any other species of income derived from other sources. But,'as already intimated, the tax is not laid on-the money and other receipts of the company. Its net earnings or income is resorted to simply as a just measure of the tax to be paid for the enjoyment of its corporate franchise.

There is an obvious difference between a direct tax on the property of a corporation and a franchise tax, measured by its earnings which, proximately at least, represent either the value ■ of the franchise granted or the extent of its exercise. The distinction has been repeatedly recognized by both Federal and State courts. In Society for Savings v. Ooite, 6 Wall. 594,-corporations, of the class to which the plaintiff in error in that case belonged, were required to pay annually a sum equal to three-fourths of one per cent, on the total amount of their deposits, and it was held that this was a valid franchise tax, and not a tax on property, and that the society had no right to claim exemption therefrom, to the extent of its deposits invested in non-taxable securities of the United States. Under a similar law in Massachusetts it was held that a savings institution having a portion of its deposits invested in Federal securities was liable to a tax on such deposits as fully as on account of other deposits, nothwithstanding the securities were declared by the act of Congress, under which they are issued, to be exempt from taxation under State authority : Provident Institution v. Massachusetts, 6 Wall. 611.

A distinction somewhat similar in principle is made in the cases of State Freight Tax, and State Tax on Railway Gross Receipts, 15 Wall. 232 and 284; in the latter of which it is held that a .statute imposing a tax on the gross receipts of railway companies is not repugnant to the Constitution of the Uni tec! States, though the receipts are made up in part of the freights received from inter-state transportation of merchandise.

The difference between the amount paid for the United States bonds and their par value cannot in any proper sense be regarded, as a loss, but if it were otherwise the plaintiff in error is not entitled to the deduction claimed. A decrease of capital does not necessarily diminish the annual net earnings. It is the latter that has been adopted as a just measure of the tax imposed on the franchise. The contention of the plaintiff in error on this point has been so fully answered by the learned judge of the Common Pleas, in the concluding portion of his opinion, that further comment is unnecessary.

Judgment affirmed.