author: Chief Justice Sharswood

text:
    The Kemble Coal and Iron Co. versus Thomas A. Scott et al.

    1. Plaintiffs agreed to “grant, let and lease” for the term of eleven years, “the exclusive right to mine, dig and take away the iron ore from four tracts of land“ also the right to make tramroads, erect machinery, open tunnels, deposit dirt, and do all things necessary and appertaining to the mining of said ore.” In consideration therefor, the defendants, an iron company, bound themselves and their successors to pay to the plaintiffs, their heirs or assigns, on the fifteenth day of each month, fifty cents per ton for every ton of ore mined and taken away the month previous. It was further provided, that for the first year the defendants should pay rent on as many tons as they might bo able to mine, but for any period of three years thereafter, the rent in the aggregate was not to be less than §10,000, whether ore to that extent or amount was mined or not. The agreement was under seal and duly acknowledged and recorded. At the .end of four years, the plaintiffs brought an action to recover the §10,000, for the last throe years, under the covenant in the agreement. Held, affirming the court below, that the agreement was not an executory but an executed contract; that, it was not an agreement for a lease or a license, but a present lease, and that this was not such a case as would justify the court in granting relief on equitable grounds.
    2. The covenant in the lease was express, that for any period of three years after the first year the rent in the aggregate was not to be less than §10,000. Held, that there was not a word therein to support the idea that this was amere stipulation, which might be avoided by abandonment or surrender of the contract by the lessees, or that the amount was not payable until the expiration of the entire term. Held, further, that if defendants ceased operations in 1S73 and no royalty was demanded or paid before 1876, it was not therefore to be presumed that the contract was ended by the mutual consent of the parties.
    3. In the negotiation immediately preceding the agreement, the vice-president of the defendant company, who conducted the negotiation, had written to plaintiffs that if the lease could be effoctod, defendants would take the risk of plaintiffs establishing their title to one of the tracts. Held, that it was proper to leave to the jury and for them to find “that the defendants took the tract, with knowledge of the title and at tboir own risk.”
    May 18th 1878.
    Before Agnew, C. J., Mercur, Gordon, Woodward and Trunkey, JJ. Sharswood and Paxson, JJ.j absent.
    Error to the Court of Common Pleas of Bedford county: Of May Term 1878, No. 166.
    Covenant by Thomas A. Scott, Henry A. Stiles, executor of Robert H. Gratz, deceased, Samuel L. Russell and Jonathan H. Seymour against The Kemble Coal and Iron Company, upon certain articles of agreement, the material portions of which will be found in the history of the Case below. The defendant pleaded non fecit conventiones, non fregit eonventiones, covenants performed, covenants performed absque hoc, payment with leave, &c., and that under these pleas defendant would offer in evidence at the trial: . • ,
    1. All the facts and circumstances admissible in evidence under the pleadings without notice.

      2. All the facts and circumstances mentioned in the “additional affidavit of defence,” filed October 12th 1876.
    3. That the contract sued upon is not a lease, but a “license.”
    4. That the lapse of time and acquiescence of plaintiffs have been such as to render it inequitable to enforce a specific performance of the contract,' -which was executory.
    5. That the tribunal required to be selected, by the contract, has exclusive jurisdiction in the premises.
    6. That the railroad or branch road provided by plaintiffs at and before the making of the contract has not been constructed.
    The defendant subsequently moved the court for leave and was allowed to amend as follows:
    1. Amend pleas by adding to those already filed the plea of “performance with leave.”
    2. Amend special matter by adding want of title in plaintiffs to the land described in the article upon which suit is brought.
    3. Misrepresentations and mistake as to the value, character, extent and accessibility of the iron ores supposed to be granted by the agreement.
    5. General report and belief that a branch railroad would be constructed from, at, or near Mt. Dallas, to, or near to the iron ores mentioned and granted in the agreement, and that the contract was made upon that opinion and no such branch railroad was constructed.
    6. That it was not possible, by any degree or amount of effort, to finish, tunnel and take out ore prior to the commencement of this suit.
    7. That the iron ore does not exist in the premises granted, as was supposed and believed when the agreement was signed.
    8. That defendants never took possession of the premises or any part thereof.
    9. All the facts stated in defendants’ “amended affidavit of defence,” filed October 12th 1876.
    10. All the facts stated in “defendants’ pleas” and the first six items of the “notice of special matter.”
    11. That defendants executed the agreement under a mistaken belief, opinion or understanding of its construction, having "signed the same with an honest belief that the clause requiring not less than $10,000 in any period of three years was not a covenant, but a mere stipulation ; for the non-performance of which, the contract might be revoked or cancelled by plaintiffs.
    12. Concealment in this — plaintiffs or some of them, or some person, with their knowledge, sunk a shaft upon the ore vein within or near to the premises embraced in the agreement, and found it to be small; not of sufficient quantity to justify tunnelling and other expenses necessary to reach and obtain it, and this informatiori was withheld from defendants until after the execution of the agreement in suit.

      The additional affidavit of defence above alluded to, was made by William Lauder, an agent of defendants, and averred that certain promises and representations of plaintiffs in regard to the construction of a railroad from the leased lands were part of the inducement which led the defendants to execute the contract; that the nature and character of the soil, and the rock therein were such, as to render it impossible to reach the ore so as to take out the quantity named, and that there was no evidence that there was any ore on the premises, or in sufficient quantities to justify mining and the taking of the number of tons required by the contract. And that this question had never been referred to, or decided by the tribunal provided in the contract itself.
    The material facts of the case were these:
    In 1856, William P.. Schell and S. H. Tate purchased from Frederick Mensch, the right and privilege “ to dig, take and carry away all such iron ore and other minerals as may be on, in and under that part of a tract of land owned by said Mensch,” in Black Valley, Bedford county. By sundry sales and conveyances, the title of Mr. Schell became vested in the plaintiffs. In 1872, the plaintiffs held or claimed thirteen tracts of land or ore rights, and timber or surface rights to the balance.
    In the same year, these plaintiffs granted to defendant, The Kemble Coal and Iron Company, “ the exclusive right to mine, dig, and take away the iron ore” from tracts Nos. 3, 4, 6 and 7, with the right to use timber from No. 7 and also from tract No. 2, for the period of-eleven years from April 1st 1872. This agreement was executed May 15th, May 30th, June 11th, and was delivered July 13th 1872. It required the payment of fifty cents per ton royalty for each and every ton of ore mined and taken, contained a clause compelling the grantors to allow the defendant the option to purchase the properties held by'them south of the Juniata river, some twelve tracts, at any time within one year, if defendants saw fit to do so, at and for the sum of $100,000. It also contained a clause in these words, “ For the first year of the lease the parties of the second part are to pay rent on as many tons as they may be able to mine, but for any period of three years thereafter the rent in the aggregate is not to be less than $10,000, whether ore to that extent or amount is mined or not, unless the irregularities of the ore-vein, should to the satisfaction of the said parties of the first part prove so great as to prevent the said parties of the second part- from taking out ore to that amount, and in case of a difference of opinion between the parties hereto on this point, they are to submit this matter to three disinterested referees to be selected thus: one by the parties of the first part, and one by the said parties of the second part, and the third by the two parties, so selected; but should the said parties of the second part pay rent in excess of the ore mined and taken away for any period; they are to have the privilege to take said ore during- any after-period of. and within the said term of eleven years, but not after said term has expired.”
    Mr.-L. T.-Wattson, the vice-president of the defendant company, during the negotiations which resulted in this agreement, wrote a letter to S. L. Russell, one of the plaintiffs, dated March 23d 1872, wherein he said, “ If you will ascertain whether tracts 3, 4, 6 and 7 of the Black.Valley lands will be leased together, we taking the risk of your establishing the title to No. 3, I will see what can be done towards getting a railroad.”
    In 1872, the Huntingdon and Broad Top Railroad was finished, and cars were -running thereon from Huntingdon to Mt. Dallas. The Bedford and Bridgeport Railroad was finished from Mt. Dallas to Bedford, thence to Bridgeport, where it connected with Pittsburgh and Connellsville Railroad, and thence to state line, where it connected with the Cumberland and Pennsylvania Railroad. The Kemble Coal and Iron Company had two furnaces in operation at Riddlesburg, some fourteen miles north of Mt. Dallas. The lands embraced in the agreement were about three miles south-east from Mt. Dallas. The Southern Pennsylvania Railroad was in process of construction, and the lands were near its contemplated and surveyed route. The Bedford and Bridgeport Railroad Company had-resolved to build a branch road to these lands. The Pennsylvania Railroad Company owned nearly all the stock- and all the bonds of the Bedford and Bridgeport Road. Mr. Russell was a. stockholder therein. So was the Kemble Coal and Iron Company, and L. T. Wattson, vice-president of this company, was a director as well as stockholder. Soon after the execution of the agreement, in 1872, the defendants, finding that the land leased was too high to enable them to reach the ore to advantage, purchased ten acres of adjoining and lower land. Upon this the work of driving a tunnel was at once commenced, and continued vigorously for one year, at a cost of about $5000. To have reached the ore, they alleged, would have required between three and four years of additional time, and at least $15,000 of e»pense. In the meantime, defendants, as they averred, having learned that the veins were thin and: irregular, and Barndollar and Baughman having given notice that they claimed title to one of the tracts of land embraced in the agreement, and it appearing that this tract contained at least one-third of all the ore embraced in the agreement, and that being the portion nearest the railroad, - and first to be mined, and that no branch railroad was likely to be constructed, 'ceased-.operations, and so .notified plaintiffs. No counter notice was given and no demand was made for royalty until the fourth year of the lease, when plaintiffs brought' this action.. The case was reached for trial in January 1878.

      The trial was before Hall, P. J-. The following assignments of error, all of which are passed upon by this court, will show the various questions raised in the court below.
    1st error: The court erred in their ruling on the fourth offer of evidence, as follows: John Fulton on the stand: Defendants proposed to prove by this witness the nature, character, extent and value of the land embraced in the agreement in suit. The difference between the actual location of the ore-vein in the ground from that contained on the draft proved by Mr. Russell. Also that at the time of the agreement in suit and prior thereto it was a well-known fact that a branch railroad was about to be constructed from the railroad then in being at or near Mt. Dallas, to or in the direction of the ores leased. That this fact was well known to defendants; that it was a principal inducement for the execution of the contract; that said branch railroad was not constructed by reason of any fault of defendants. Also the character and distance of the proposed tunnel; and that by no reasonable human agency could ore have been reached prior to the bringing of this suit, and that ore does not exist in the premises in such quantity as to justify mining.
    The counsel for the plaintiffs object to the foregoing offer for the reasons following:
    1. The testimony is irrelevant to the issue. 2. It is not competent for the defendants to give evidence of rumors as to the construction of a branch railroad. 8. The offer does not allege that the plaintiffs held out the building of a railroad as an inducement to the contract. 4. In the absence of fraud or mistake the agreement must stand and cannot be contradicted. 6. There is no warranty expressed or implied in the agreement as to the nature, character or extent of the ore-veins, and the defendant took the same at its risk.
    Per Curiam. — “ It is competent to show the non-existence of 'ore in the land, or that it is in a seam too small for mining; to that extent evidence admitted. Rumors about building of a branch road with which the plaintiffs were not connected are incompetent. So, also, the representation of the supposed general course of the ore vein on the draft unless there was misrepresentation.”
    2d error: The court erred in their ruling on the sixth offer of evidence, as follows: L. McDonald on the stand: Defendants propose to prove that in the ground the ore-vein is not to be found in one entire tract of land measuring two hundred and ten rods, upon or in and through which the vein of ore is represented as passing upon the map proved by Mr. Russell. This to show a mistake calculated to mislead the defendants at the time the agreement was executed. That this is No. 10, and embraced in the offer of lands to defendants at $100,000.
    “ Objected to, for the reason that the tract referred to is not cm-braced in the lands leased for mining purposes. Rejected, and exception to defendants.”
    3d error: The court erred in their ruling of the seventh offer of evidence, as follows: William Lauder on the stand : Defendants propose to prove that the agreement in suit was executed by defendants upon the honest conviction and belief (whether correct or erroneous) that the clause relating to the payment of $10,000 in any period of three years was a mere stipulation, and could-be avoided by relinquishing the contract. And that the negotiations which led to the execution of the agreement were all so interpreted and understood by defendant.
    Per Cur. — “ The witness having stated that he was not present at any negotiations that led to lease, and had no knowledge of them from plaintiffs or any of them, the offer is rejected and bill sealed to defendants.”
    4th error: The court erred in ruling on the eighth offer of evidence, as follows: Defendants offer written opinion of Messrs. Hall and Jordan given to Messrs. Barndollar and Baughman at the time of their contemplated purchase from Frederick Mensch, in favor of the Mensch title and adverse to that of plaintiffs. This for the purpose of showing that the title of plaintiffs was not a good marketable title. Objected to as irrelevant.
    Per Cur. — “It is not made to appear upon what statement of facts this opinion is based. Rejected, and exception to defendants.”
    5th error: The court erred in their answer to defendants’ first and second points, as follows :
    1st point. That covenants are not to be presumed; that the agreement in suit contained no express covenant to pay $10,000 in any period of three years, and the language of the agreement on that subject is a mere stipulation, which may be avoided by abandonment or surrender of the contract by defendants.
    2d point. That no action can be sustained for royalty due at the end of four years, except for the price of ore actually mined. Any action for ore not taken can only be sustained after the termination of the entire term.
    Ans. “First and second points refused.”
    6th error: The court erred in answering the sixth, tenth and eleventh points submitted by defendants, as follows:
    6th point: That although there may have been no want of good faith on the part of plaintiffs, yet if the defendants placed a construction upon the agreement different from that of the plaintiffs, even if such construction of defendants was erroneous, and in so doing defendant committed a mistake which a fair and reasonable man, under the circumstances, might have fallen into, without gross ignorance or supine negligence, then no specific performance of the contract should be enforced, and the verdict should be Tor defendants.

      10th point: A contract maybe so inequitable and unjust, may contain so much of hardship on one hand and so small a consideration on the other, as to raise a legal presumption that it was not understood at the time of its execution; and if the jury believe that the defendants made a mistake at the time this agreement was executed by supposing that they could abandon the mine and thereby avoid liability in case it became impossible to find ore, or to Teach it if found, then there should be no specific performance of this contract and the verdict should be for defendants.
    11th point: That circumstances and surroundings, as they exist when an agreement is executed enter into a contract, and this one should not be enforced if entered into by defendants under an actual and honest misunderstanding on a material point.
    Ans. “We have answered these points in the general charge. You cannot assume that the defendants misconstrued the meaning of the article; the presumption is that they understood the instrument, and there is no evidence we have heard to the contrary.”
    7th error: The court erred in their answer to the seventh point of defendants, as follows : That in proportion to the severity of the terms imposed by the one party upon the other, it becomes incumbent on the former to see that the terms are explicitly stated. If the plaintiffs have used terms in the agreement which are reasonably capable of misconstruction, then the defendants may construe them in the manner most advantageous to the company.
    Ans. “ This has no application to the case.”
    8th error: The court e.rred in omitting entirely to answer defendants’ ninth point, which was as follows : That specific performance of a contract should not be decreed where it was executed by either party under an honest mistake, even though such mistake was not caused by the other party nor unless it is strictly equitable to do so, nor where the bargain is hard, unequal, unjust or oppressive, nor where it will operate in a manner different from that which was in contemplation of the parties at the time when it was executed.
    9th error:' The court erred in their answer to defendants’ twelfth point, which point and answer were as follows :
    12th point: If the jury believe that the defendants executed the agreement in.suit under the impression and belief that a branch railroad would soon thereafter be constructed, from the railroad then existing to some point at or near the iron ores granted in the agreement, and that this belief was a principal inducement to the execution of such contract; that such branch railroad was not constructed, by reason of unforeseen causes, then the. contract' is inoperative and invalid, and the verdict should be for defendants.
    Ans. “ We have answered this in the general charge. Nor if Mr. Wattson had a project for getting a branch railroad, with which the plaintiffs w.ere not connected in any way, either in fact or by making representations in the negotiations of the contract, would that entitle them to relief. Was a branch road promised by plaintiffs, which has not been built? or did they hold out any inducement of a road in any way ? Did the evidence establish this ? You cannot find it on the assertion or argument of counsel, unless there is evidence of it.”
    10 th error: The court erred in their answer to defendants’ fourteenth point, as follows: That if the jury believe that in September 1873, defendants ceased all operations, and that this fact was then or soon after made known to plaintiffs, and that no royalty was demanded or paid before March 1876, then they have a right to presume that the contract was ended by the mutual consent of the parties.
    Ans. “ Refused.”'
    11th error: The court erred in their answer to defendants’ fifteenth and sixteenth points, which points and answer were as follows:
    15. That the agreement of Frederick Mensch with S. H. Tate and William P. Schell, dated February 8th 1856, does not convey title to the iron ore contained in the land therein described; that equity will not now decree a specific performance of that contract; that the title of plaintiffs to that tract of land (106 acres), and the iron ore therein, was and is radically defective, and if the jury believe that this property was and is material. to defendants, then there should be no decree for performance, and the verdict should be for defendants.
    16. That the evidence in the case established the fact that the title of plaintiffs to the Fred. Mensch tract is not a marketable title; that it is surrounded with doubts and uncertainties sufficient to prevent a decree of specific performance, and therefore the verdict should be for defendants.
    Ans. “We reserve these points, to be determined, if necessary, • on a motion for a new trial. If you find that the defendant had full knowledge of the difficulties with regard to the Mensch title, and took it at their own risk, we will not have to determine these points; there could be no time now to do so without great inconvenience and delay to other suits. You may make a special finding on this point. You can say whether you find it affirmatively or negatively ;• that he did purchase with knowledge and at his own risk, or that he did not; if not, then was that tract essential to the contract, and did the purchasers fail to pay the balance of the purchase-money ?
    12th error: The court erred in their answer to defendants’ seventeenth point, which point and answer were as follows : That the letter of L. T. Wattson, Esq., of March 23d 1872, to Hon.- SL. Russell, does not establish the position that defendants took the risk of title to tract; No. 3. No such provision is contained in the agreement itself, which is the consummation of the contract, besides there is no evidence that plaintiffs ever did anything thereafter to establish the title to said tract No. 3.
    Ans. “ The letter of Mr. Wattson, the vice-president, is dated 23d March 1872 ; the contract was consummated soon after. It is not a contradiction of the articles. If in fact the contract was consummated on the basis of the letter, then the defendants would be bound by the offer of Mr. Wattson in the letter.”
    13th error: The court erred in their answer to plaintiffs’ second point,' as follows: That said agreement having been put upon record on the 7th day of September 1865, prior to the conveyance by Mensch to Baughman and Barndollar, of the date of November 14th 1871, they, Barndollar and Baughman, took the same, subject to whatever rights Tate and Schell had under such agreement.
    Ans. “Affirmed.”
    • 14th error: The court erred in their answer to the third point of plaintiffs’ below, which point and answer were as follows: That if L. T. Wattson was the person who negotiated the lease with plaintiffs, had knowledge of the alleged defect of title of the plaintiffs in the Mensch tract, and accepted the terms of the lease, agreeing to take the risk of the title thereto, then the defendants cannot set up said alleged defective title as a defence in this case.
    Ans. “Affirmed.”
    15th error: In answering the 4th and 6th points of defendants, the court erred in using the following language: “ And (if) the iron ore is there and in sufficient quantity, and not affected by irregularities so as to prevent taking out 20,000 tons, the verdict should be for the plaintiffs for $10,000, with interest from the time it fell due, provided you find the defendants took tract No. 3, at their own risk.”
    16th error: The court erred in not affirming the fourth point of defendants below, and directing a verdict for defendants. Said fourth point was in these words : “ That all the evidence in the case does not present such a state of facts and circumstances as would move a chancellor to decree a specific pei’formance of the contract in suit, and therefore the verdict should be for defendants.”
    The verdict was for the plaintiffs, for $11,075, “and that defendants took the Mensch tract with knowledge of the title and at their own risk.” A motion for a new trial was refused, and judgment entered on the verdict. The defendants then took this writ, alleging that the court erred, as set forth in the foregoing assignments of error.

      John Cessna, for plaintiff in error.
    The contract upon which suit was brought was certainly executory, at least on the part of defendants, and we were therefore entitled to show any facts and circumstances at the time of its execution, such as would avoid it or justify a court of equity in granting us relief. The court should, therefore, have admitted the evidence offered: Ley v. Huber, 3 Watts 367; Horbach v. Gray, 8 Watts 492; Case v. Cushman, 3 W. & S. 546; Philadelphia Ins. Co. v. Am. Life & Health Ins. Co., 11 Harris 65; Miles v. Stevens, 3 Barr 21; Boynton v. Hazelboom, 14 Allen 107. This contract was a license, not a lease: Doe v. Wood, 2 B. & Ald. 724; Johnstown Co. v. Cambria Co., 8 Casey 246; Huff v. McCauley, 3 P. F. Smith 206; Funk v. Haldeman, Id. 229; Gloninger v. Franklin Coal Co., 5 Id. 9; Dark v. Johnson, Id. 164. The court erred, as alleged, in the sixth, seventh, eighth and ninth assignments of error. Equity is a part of the law of Pennsylvania, and courts of law enforce equitable principles in actions of debt, assumpsit, covenant and ejectment : Williams v. Bentley, 3 Casey 294; Nicol v. Carr, 11 Id. 381; Piersoll v. Neill, 13 P. F. Smith 420; Graver v. Scott, 30 Id. 88. Execution of a contract will not be decreed where there was a clear mistake of fact. A marketable title was indispensable. A defect in the title of any one of the tracts defeated the right to recover. No royalty was ever paid, nor any demand ever made therefor. From this conduct of the parties it was to be presumed that the contract was ended by mutual consent. The lease was the consummation of the contract. It contained a covenant for title, and its binding force could not be weakened by the letter of Mr. Watt-son, and there was no evidence that his knowledge as to the defect in the title to No. 3 was ever communicated to defendants, or that he had authority to assume any risks. The plaintiffs should not have been permitted to recover the price of the ore in these lands unless they showed they were the rightful owners.

      Russell § Longenecker and W. S. Kooutz, for defendants in error.
    The contract was not a mere license, but the grant of a right: Moore v. Miller, 8 Barr 283; Clement & Masser v. Youngman & Walter, 4 Wright 345; Johnston v. Cowan, 9 P. F. Smith 280; Caldwell v. Fulton, 7 Casey 480; Harlan et al. v. The Lehigh Coal and Navigation Co., 11 Id. 289; Funk v. Haldeman, 3 P. F. Smith 243. The defendants were bound to pay for the ore whether mined or not: Fisher v. Milliken, 8 Barr 111; Powell v. Burroughs, 4 P. F. Smith 329; Johnston v. Cowan, 9 Id. 280.
    The evidence as to matters antecedent or subsequent to the lease did not constitute such a defence as would relieve the defendants from liability. The assignments of error as to the marketable character of the title are all cured by the finding of the jury that the defendant “ took the Monsch tract with knowledge of the title and at their own risk.” Under the evidence the jury could not presume that the contract was ended by mutual consent. There was no evidence to show that defendant did not understand the agreement or made any mistake in supposing that the mine could be abandoned, or ■ that the contract was entered into in view of the contemplated railroad. There was no state of facts such as would warrant a chancellor in releasing defendants from their contract.
    A re-argument was subsequently ordered, and the case was again heard on May 15th 1879, before Sharswood, .0. J., Mercur, Gordon, Trunkey and Sterrett, JJ. Woodward and Paxson, JJ., absent.

      John Cessna, for plaintiff in error.
    We rely upon our paper-book and argument for 1878. In our fourth point we asked that the case might be taken from the jury because the plaintiffs closed their case without offering any evidence of title. Defendants pleaded want of title in plaintiffs. This was a traverse of their averment óf performance and readiness to perform. In such an issue it was essential they should prove title: Negley v. Lindsay, 17 P. F. Smith 217; Heron v. Hoffner, 3 Rawle 400; Smith v. Webster, 2 Watts 478. Instead of compelling the plaintiffs to show title, the court permitted the jury to find that we had agreed to run the risk of title on the evidence contained in the letter of Mr. Wattson. The admission of this evidence and the instruction of the court thereon were manifestly wrong. The letter was not cotemporary with the agreement, but antedated it some time, and was clearly inadmissible’ to vary the legal effect of a contract under seal.

      L. W. Hall, for defendants in error.
    The words used in the agreement are “grant, let and lease.” These -words do not imply anything more than a covenant for quiet enjoyment: Maulé v. Ashmead, 8 Harris 482. If there was defect of title in tract No. ’3, Wattson, vice-president of the Kemble Coal and Iron Company, and the party who acted for them from the beginning to the end of this whole transaction, had full knowledge of it. This is shown by his letter to Mr. Russell, dated Philadelphia, March 23d 1872, wherein he asks, “whether tracts 3, 4, 6 and 7 Black Valley lands will be leased together, we taking the risk of your establishing title to No. 3.” The lease was shortly afterwards drawn-by Wattson, including tracts Nos. 3, 4, 6 and 7, “being contiguous tracts on the west side of Black Valley,” and it was sent by Wattson to New York for execution. Whatever covenant may have been contained in the words above quoted was only an implied one. Where the lessee has notice of the defect of title, the implied covenant is rebutted.
    A motion for a re-argument was again made, but refused.
    May 26th 1879.
   Chief Justice Sharswood

delivered the opinion of the court,

The agreement of May 30th 1872, between the parties to this action was not an executory but an executed contract. It was not an agreement that a lease should be made at a future time; but a present lease by the most apt and formal words, “grant, let and lease” for the term of eleven years from the 1st of April 1872, of • “the exclusive right to mine, dig and take away the iron ore from four tracts of land in Black Valley, West Providence township, in the county of Bedford,” “also the right to make tramroads, erect machinery, open tunnels, deposit dirt, and to do all things necessary and appertaining to the mining of the said ore.” In consideration the lessees, the Kemble Coal and Iron Company, bound themselves and their successors to pay to the lessors, their heirs or assigns, on the fifteenth day of each month, fifty cents per ton of 2240 pounds for each and every ton of ore mined and taken away the month previous. It was provided that for the first year of the lease, the lessees were to pay rent on as' many tons as they might be able to mine, but for any period of three years thereafter the rent in the aggregate was not to be less than $10,000, whether ore to that extent or amount was mined or not. The lease .was executed by the lessors under their respective seals, and by the lessees under their corporate seal duly attested by their president and secretary, acknowledged by the several parties, and recorded July 13th 1872. Under it the lessees had the unquestionable and unquestioned right to enter upon the four tracts of land mentioned, and to commence' to mine and take away the coal. It was a grant of the ore in place. This was an action at the end of four years to recover the $10,000 for the last three years, under the express covenant to that effect contained in the lease. Clearly then it was not a case in which the equitable rules and principles adopted in bills for specific performance by courts of chancery have any application. That there was iron ore in the tracts a subject-matter upon which the lease could operate, was not controverted. The learned judge in the court below, in his ruling on the fourth offer of evidence, and in his answers to the fourth and sixth points in the fifteenth error, expressly decided that it was competent for the defendants to show the non-existence of ore in the land or that it was in a seam too small for mining, or affected by irregularities so as to prevent taking out 20,000 tons. It follows that the learned judge below was entirely right in his answers to the sixth, tenth and eleventh points of the defendants below, complained of in the sixth assignment of error; in his answer to the seventh point complained of in the seventh assignment; in the answer to the ninth point in the eighth error, and in refusing to affirm the defendants’ fourth point, as complained of in the sixteenth assignment. This last-dated point was “ that all the evidence in the case does not present such a state of facts and circumstances as would move a chancellor to decree a specific performance of the contract in suit, .and therefore the verdict should be for defendants.” All these points were based on the assumption that this action was brought for the specific execution of an executory contract for a lease, and not for rent due upon a lease actually executed. Much reliance is placed by the plaintiffs in error upon •the decision of this court in Miles v. Stevens, 3 Barr 21. But that was an action brought to recover the purchase-money covenanted to be paid in articles for the sale of land, It was therefore in effect a bill by the vendor to compel the specific performance of a mere executory agreement to sell, and it was held accordingly that where such a contract is made under a mistake or in ignorance of a material fact, it is relievable in equity.

The evidence offered and rejected, which forms the subjects of the first, second and third assignments was clearly irrelevant and rightly rejected. It was not offered to be proved that any representations were made by the lessors as to the construction of any railroad; or that the building of any such road was held out by the lessors as an inducement to the execution of the lease. The fact that an ore-vein was not found in one entire tract, as represented in the maj), was immaterial, because it was not embraced in the four tracts leased for mining purposes, but in the lands of which the defendants had the option to purchase, an entirely distinct and independent agreement. William Lauder by whom the offer was made to prove that the lessees executed the lease under the honest conviction that the clause relating to the payment of $10,000 in any period of three years was a mere stipulation and could be avoided by relinquishing the contract, stated that he was not present at any negotiations which led to the lease, and had no knowledge of them from the lessors or any of them. The refusal of the court to affirm the first and second points of the defendants was unquestionably right. The covenant in the lease Was express that for any period of three years after the first year the rent in the aggregate was not to be less than $10,000, and there is not a word to support the idea that it was a mere stipulation which might be avoided by abandonment or surrender of the contract by the lessees, or that it was not payable until after the expiration of the entire term. Nor would the court have been justified on any principle in instructing the jury as they were asked to do in the fourteenth point, that if the defendants ceased all operations in September 1873, and no royalty was demanded or paid before March 1876, they might presume that the contract was ended by the mutual consent of the parties. This forms the subject of the tenth error assigned.

The remaining assignments — the fourth, eleventh, twelfth, thirteenth and fourteenth — relate to the alleged defect in the title of the lessors. Without stopping to inquire whether anything short of an eviction from all or part of the demised premises can be a defence by a lessee to an action for the rent, it was submitted to the jury to say whether the lessees did not know of the alleged defect and took the risk of it. The jury found “that defendant took the Mensch tract with knowledge of the title and at its own risk,” and we think the evidence upon which this question was submitted to them was ample.

Having thus examined all the sixteen assignments, and finding no error of which the plaintiffs have any right to complain,

Judgment affirmed.


source: Caselaw Access Project

author: Mr. Justice. Sterrett

license: Public Domain

text:
    Reed versus Marshall et al., Executors.
    1. R.. brought an action against the executors of W., for the amount of a legacy. The defendants pleaded as a set-off, two promissory notes of the plaintiff, due to the testator. The plaintiff replied the Statute of Limitations in bar of the demand proposed to be set off, and to this the defendants filed a general demurrer. The court entered judgment for the defendants on the demurrer. Held, that the replication of the Statute of Limitations was good, and that judgment should have been entered on the demurrer for plaintiff.
    2. Courtenay v. Williams, 3 Hare 539, reviewed.
    May 21st 1879.
    Before Sharswood, C. J., Mercur, Gordon, Trunkey and Stbrrett, JJ. Paxson and Woodward, JJ., absent.
    Error to the Court of Common Pleas of Adams county: Of May Term 1879, No. 171.
    Debt for a legacy, brought by John W. P. Heed against James H. Marshall and Joseph Kittinger, executors of John Waugh, deceased.
    John Waugh was a bachelor, and the owner of a considerable real and personal estate. He died in April 1874, having made his will dated November 7th 1870, which was duly proved April 28th 1874. The defendants, his executors, filed an inventory of personal estate on the 26th of May 1874, amounting to $44,482.12. In this inventory were two promissory notes, given to Waugh by the plaintiff — one dated April 1st 1864, payable two years after date with interest, for $500, the other dated September 27th 1864, payable one day after date, for $100.
    The will of John Waugh contained the following clause:
    “ Item. — I give to the children of my brother Alexander Waugh one thousand dollars each. To the children of my sister Mary, who was intermarried with John Cunningham, I give one thousand dollars each. To the children of my sister Elizabeth I give one thousand dollars each. To the son of my sister Margaret, intermarried with Rev. John Hutchinson, one thousand dollar note. If any of the foregoing nephews or nieces have died, or should die, before my decease, then, and in that case, his or her legacy shall go to his or her children.”
    Grissell Reed, the plaintiff’s mother, was a daughter of the testator’s sister Elizabeth, and, if living, would have been entitled to $1000 under his will. She died before the testator, and before the date of the will, leaving five children who claimed her legacy.
    The executors paid four of these children $200 each, but refused to pay the plaintiff his portion, alleging that he was indebted to the estate in a larger amount.
    The plaintiff filed his narr. in debt for $200, with interest from April 28th 1875. The defendants filed their plea, setting forth the two notes of the plaintiff mentioned in the inventory as a set-off and in extinguishment of the plaintiff’s claim. The plaintiff replied the Statute of Limitations in bar of the demand proposed to be set-off; and to this the defendants filed a general demurrer. The case was argued before Herman, P. J., of the ninth judicial district, who entered judgment for the defendants in an opinion, inter alia, saying:
    “ The question presented by the demurrer is, whether the executors can avail themselves of these notes as an equitable defence to the plaintiff’s action to recover, out of the assets of the testator, his share of the legacy bequeathed to the children of Grisell Reed. I can find no reported case, in Pennsylvania or any of the other states, in which this precise point has been decided. But in Courtenay v. Williams, an English case, reported in 3 Hare 539, which was a suit by a legatee to obtain payment of the legacy out of the assets of the testator in due course of administration, it was held by Yice-Chancellor Wigram, that the executor might retain so much of the legacy as-was sufficient to satisfy a debt due from the legatee to the testator) at the time of his death, although the remedy for such debt was, at the time of the death of the testator, barred by the Statute of Limitations. This is a well-considered case, and the decision rests upon the soundest principles of equity and justice. Keeping in mind that the Statute of Limitations does not extinguish the debt, but bars only the remedy for its recovery, it will require no refined process of reasoning to understand why a legatee, when he sues to obtain payment of a legacy out of the assets of the testator, although under the forms of the law, will be required to do equity by applying his debt in payment of it. He must come into court in a case like this with clean hands. I find the case of Courtenay v. Williams cited with approval by Mr. Justice Read, in Thompson’s Appeal, 6 Wright 357, where, although the six years not having fully run until after the death of the testator, the precise point was not raised or decided; yet his comments upon the case show his respect for it as an authority upon the question now béfore us. The case of Romig v. Erdman, 5 Whart. 112, may be cited as bearing upon the same question.
    “I think it is clear, both upon principle and authority, that the unpaid notes given to the testator in his lifetime by the plaintiff, are avoidable in the hands of the executors as an equitable defence to this action by the plaintiff for the recovery of his legacy, notwithstanding his plea of the Statute of Limitations, and as his debt exceeds the amount of his legacy, judgment must be entered for the defendants. Judgment is rendered for the defendants on the demurrer.”
    This action was assigned for error by the plaintiff, who took this writ.

      D. Cr. McCreary, for plaintiff in error.
    It is well settled as the law of Pennsylvania, that after the lapse of six years the statute, if invoked, works an extinguishment of all legal rights and remedies upon demands within its operation, and that there can be no recovery, unless upon proof of a new promise: Jones v. Moore, 5 Binn. 573; Levy v. Cadet, 17 S. & R. 126; Zent’s Ex’r, v. Heart, 8 Barr 337; Magee v. Magee, 10 Watts 173; Senseman v. Hershman, 1 Norris 83.
    The statute would have been a good plea in bar of a suit on these notes by John Waugh’s executors, and is equally available in reply to a plea of set-off, which is in the nature of a cross-action, and may'be used or not at the option of the defendant. In such-case the statute runs until plea filed. The equity doctrine about coming into court with clean hands aqd doing equity, is misapplied when used in relation to a suit for a legal demand: Himes v. Barnitz, 8 Watts 43; Hinkley v. Walters, 8 Id. 260; Gilmore v. Reed, 26 P. F. Smith 462.
    The authority of McClintock’s Appeal is limited-to cases of distribution in the Orphans’ Court, and other cases of pure trust enforceable in equity only, and has no application in personal actions against executors: Micheltree’s Adm’r v. Veach, 7 Casey 455; McCandless’s Estate, 11 P. F. Smith 9.

      David Wills, for defendants in error.
    Where a legatee is a debtor to the estate to an amount exceeding his legacy, it is a complete bar to any recovery of the legacy: 2 Williams on Exr’s *934; 2 Roper on Leg. 61; Jeffs v. Woods, 2 P. Wms. 128; Bacon’s Abridgment 340, note 1; Eden v. Smyth, 5 Ves. 341; Courtenay v. Williams, 3 Hare (Eng. Ch. Rep.) 539.
    The legatee, when he comes into court to demand his legacy, is obliged to do equity by applying his debt in payment of it, and it is not a ease to which the Statute of Limitations applies : Thompson’s Appeal, 6 Wright 345. The Statute of Limitations does not apply, because the defendants’ claim, by way of retainer as executors, moneys in their -own hands, which they have a right to apply in payment of the legacy: Romig v. Erdman, 5 Whart. 112. The giving of a legacy to a debtor is not an extinguishment of the debt, and the latter may be set-off by the executor against the legacy: Strong’s Ex’r. v. Bass, 11 Casey 333; see, also, Zeigler
      v. Eckert, 6 Barr 13; 2 Story’s Eq. Jur., sects. 1122-3. The Statute of Limitations does not apply to an executor to prevent him from retaining a legacy from one indebted to the estate: 2 Redf. on Wills 484, sects. 19-21; 2 Roper on Leg., sects.-1.063-7.
    October 6th 1879.
   Mr. Justice. Sterrett

delivered the opinion of the court,

The single question raised by the demurrer in this. case is whether the Statute of Limitations is a good replication to the defendants’ plea of set-off. Both notes given by the plaintiff to the testator in his lifetime, as described in the plea, were overdue and wholly unpaid for more than six years before the death of the latter ; and it is not even alleged that there was any new' promise express or implied in the meantime. Hence, it is claimed that they wefe barred by the statute, and therefore unavailable as a defence, either at law' or in equity, to the plaintiffs’ demand.

If the defendants had brought suit on the notes, it is very clear that, without proof of a new promise within six years, the statute could have been successfully interposed as a bar to their recovery ; and it is difficult to see how they are in any better position when they endeavor to avail themselves of the notes as a set-off or cross-demand. In actions at law the bar of the statute is equalty applicable to the defendants’ cross-demand as to the plaintiffs’' claim ; and there is no good reason why it should not be so. Set-off is in the nature of a cross-action, optional with the defendant, and the statute runs against it until pleaded; and so completely is it in the control of the defendant, that even when pleaded, it may be withdrawn: Gilmore v. Reed, 26 P. F. Smith 462.

As a general rule, the death of the debtor does not suspend the running of the statute, as respects the right of action, and it may be pleaded by the administrator. It was accordingly held, in Michel-tree’s Administrator v. Veach, 7 Casey 455, that an administrator may plead the statute against a debt which matured less than six years before the death of his intestate, but more than that length of time before suit brought; that the doctrine of McClintock’s Appeal, 5 Casey 360, and kindred cases, has- no application to personal actions against the representatives of a debtor. These latter are cases of direct trust, cognisable in the Orphans’ Court, which is practically a court of equity. Thus, a debt, which has accrued less than six years before the death of a debtor, but more than six years before settlement and distribution of his estate, is entitled to participate in the distribution. The right of the creditor to his just proportion of the assets of the dqpeased debtor vests at the death of the latter, and the law commits them to the care of an administrator in trust for all whose debts were valid and subsisting at the death of the intestate: McClintock’s Appeal, supra; McCandless’s Estate, 11 P. F. Smith 9. On the same principle, an assignment for the benefit of creditors does not stop the running of the statute in an action at law, yet the assignee cannot set it up when distribution is claimed from him on a debt not barred at the time of the assignment. A testamentary trust- to pay debts does not revive such debts of the testator as were barred by the Statute of Limitations at the time of his decease, but Avhen the trust is clear and explicit, and not merely implied, it suspends the running of the statute on debts due but not barred at the death of the testator : Agnew v. Fetterman, 4 Barr 56. These, and similar cases, rest upon the express trust under which the assets are held by the parties charged with their administration. All creditors who have valid and subsisting claims at the inception of the trust have a right to participate in the distribution, notwithstanding the lapse of more than six years from the maturity of their respective claims.

From what has been said, it follows that in actions at law the Statute of Limitations may be pleaded against items of set-off in the nature of cross-demands, as well as against the plaintiff’s claim; but in the distribution of assets under express trusts, cognisable in courts exercising equity jurisdiction, the statute cannot be interposed against creditors whose claims were valid and subsisting at the inception of the trust. The notes which the defendants set out in their plea, belong to the former class, and inasmuch as they were barred by the statute even before the death of the testator, the replication of the statute was good, and judgment should have been entered, on the demurrer, in favor of the plaintiff.

The'case of Courtenay v. Williams, 3 Hare 539, on which the court below appears to have mainly reste-d its judgment, is not in accord with the current of decisions under our Statute of Limitations. It arose, as the vice-chancellor says, “ under the statute 21 Jac. 1, c. 16, which takes away the remedy against the debtor, unless the action is brought within six years after the cause of action arose; but it leaves the right untouched, differing in this respect, from a more recent Statute of Limitations, by which the right as well as the remedy is barred.” From this feature of the statute, it appears to follow that if the creditor receive into his possession money or property of the debtor, he may return it in satisfaction of his claim, notwithstanding an action brought to recover-it would be barred by the -statute.

Judgment reversed and judgment, on the demurrer, in favor of the plaintiff, to be liquidated by the prothonotary of the court below.


author: Mr. Justice Gordon

text:
    Blauser versus Diehl et al.

    1. Where the real estate of a minor is sold, under an order of the Orphans’ Court, the original sureties of the guardian are not liable for the failure of the guardian to pay over the proceeds of the sale.
    2. Before the court confers the power of sale upon a guardian, it is required to see that he executes a bond, with sufficient sureties, conditioned for the faithful appropriation of the proceeds of the proposed sale. This is a collateral pi'ovision, complete in itself, and designed to be operative in cases not embraced in or contemplated by the original appointment of a guardian.
    May 21st 1879.
    Before Sharswood, C. J., Mercur, Gordon, Trunkey and Sterrett, JJ. Paxson and Woodward, JJ., absent.
    Error to the Court of Common Pleas of Adams county: Of May Term 1879, No. 130.
    Debt on a bond by M. B. Blauser, guardian of Savannah I. Hartzel, against J. H. Myers, Jeremiah Diehl and John Wolford. The material facts were these: On the 20th of August 1860, Myers was appointed by the Orphans’ Court the guardian of the person and estate of Savannah I. Hartzel, a minor child of L. E. Hartzel, deceased. On the same day, he filed a bond in the sum of $2000, made in pursuance of the Act of March 29th 1832, which was approved by the court. Diehl and Wolford were the sureties therein. The estate of the minor consisted of an undivided fourth part of a farm, and a small amount of personal' property. On August 21st 1865, upon application to the Orphans’ Court, an order was granted to the guardian to sell the real estate to provide for the maintenance and education of his ward, and for reinvestment, as the fabm was unproductive and expensive. With this application was filed a bond, conditioned for the faithful appropriation of the proceeds, which the court approved. The real estate was sold under this order, and the sale confirmed on the 28th of December 1865. Myers received the purchase-money and retained it until 1877, when he became insolvent and was removed, his account, at this time, showing a balance due his ward of $1108.70. Blauser was then appointed guardian, who brought, this suit on the original bond. No service was made upon Myers, who had removed from the county, and the defence was made by the sureties, who filed a special plea, wherein they alleged that the money sued for was the proceeds of a sale of real estate made by the order of the Orphans’ Court, and that a bond had been given to secure this portion of the estate, which bond was a valid and sufficient security. The plaintiff demurred to this plea, and issue was joined thereon. It was agreed that of the ’amount claimed, $1020.10 were the proceeds of the real estate, and $88.60 of the personal property belonging to the ward. After argument, the court (McLean, P. J.), overruled the demurrer, and entered judgment for $94.11, the amount of the personalty, with interest. .The plaintiff took this Vrit and assigned this action for error.

      M. Gr. Mg Or ear y,' for plaintiff in error.
    The bond in suit is in the form prescribed by the 8th section of the Act of March 29th 1832, and is sufficient in its amount and in its terms to embrace and secure the estate, real and personal. The change of form of the estate did not vary the liability of the sureties on the bond. The security required to be given on the sale of a minor’s land, is cumulative, not substitutionary.

      David Wills, for defendant in error.
    A distinction is evidently made in the 8th section of the Act of 1832, between property and estate, the one referring to personal property and the other to real estate. It is true, the guardian has the management of the' real estate of his ward, and receives the rents and profits; but the estate is in the minor. The bond is therefore only security for the property of the minor he receives, including rents, and profits. The case is analogous to that of an administrator, whose sureties' are in no way liable for the proceeds of the real estate: Beale v. Commonwealth, 17 S. & R. 392; Reed v. Commonwealth, 11 Id. 441; Commonwealth v. Gibson, 8 Watts 214; Commonwealth v. Hilgate, 5 P. F. Smith 286.
    June 23d 1879.
   Mr. Justice Gordon

delivered the opinion of the court,

The court refused to charge the defendants, sureties of John H. Myers,-.guardian of Savannah I. Hartzel and Lebright E. Hartzel, for the default in his account of the proceeds resulting from a sale of the real estate of his wards, under the order of December 21st 1865.

This, we think, was right. A guardian has, by virtue -of his appointment, no power to alien the land of the minor or minors of whom he has charge; that power is conferred by statute, and only under and subject to prescribed conditions. It is a power entirely separate and distinct from that conferred by the appointment, the latter embracing only the management of the minor’s realty. The statute under which these proceedings were had, requires the court, before it, confers such new power upon the guardian, to see that he executes a bond, with sufficient sureties, conditioned for the faithful appropriation of the proceeds of the proposed sale. Thus we have a ■ collateral provision complete in itself and designed to be operative in cases not embraced in or contemplated by the original appointment. It thus necessarily results that one who becomes surety for a guardian, does so in view of the duties and obligations which the law then imposes upon his principal, and with the knowledge that, should a sale of land become necessary, with the grant of new power, required for that purpose, new and ample security will be provided. 'The sureties of the guardian are liable for all moneys or property that may come into his hands undér the original power, and we therefore held them to such liability where money came into his hands from proceedings in partition: Lloyd v. The Commonwealth, 35 Leg. Int. 171. But in such case there is no new power conferred upon the guardian; he takes by virtue of his original appointment.

In this, then, is the distinction; in the one case, the guardian takes the property by virtue of his original power; in the other, only by virtue of a new power, conferred by the order of sale, and this also distinguishes the responsibilities of the two classes of sureties; they are independent and their obligations are distinct.

The case of Beale’s Executors v. The Commonwealth, 17 S. & R. 392, though depending upon an administration bond, is, nevertheless, parallel to the one in hand. Both real and personal estate are, in Pennsylvania, assets for the payment of debts; reasoning from this axiom, the court below, in the case cited, held, that the sureties in an administration bond were responsible for the proceeds of real estate sold by order of the Orphans’ Court. But, in reversing the case the Supreme Court, by Rogers, J., say: “The bond is usually taken in double the amount of the goods and chattels which properly form the inventory, and of which the real estate constitutes no part, and that no surety considers himself answerable for the value of the land. That the bond required by the act justifies this construction, since the condition only requires a proper inventory of the goods and chattels of the estate and a just and legal disposition of them. That the interest of the estate requires nothing more, for it is not certainly known that the land will be wanted for the payment of debts, for though the lands are assets in the administrator’s hands they are so sub modo only, and when a sale becomes necessary and is ordered, sufficient security must be taken from the administrator for the faithful execution of the powers thus committed to him.” Every word of this reasoning can as well be applied to a guardian. His bond is conditioned only for the proper management of the property and estate of the minor under his care, and for its return upon the order of the court, and his bondsmen have no reason to believe that they -will be responsible for a sale of real estate which the guardian has no right to make. Such real estate is not assets in his hands for the maintenance of his wards, but the rents, issues and profits thereof only; it is not certainly known that a sale of land will become necessary, or that the court will order it; and, finally, if such sale is ordered, sufficient security must be taken to secure the proper disposition of the proceeds thereof. Such then being the accurate parallelism of the two cases, the one may well be permitted to rule the other, especially as, in this way, we the better reach the justice and equity of the case in hand.

The judgment is affirmed.


author: Mr. Justice Mercur

text:
    Herbst’s and Buehler’s Appeal.
    , 1. Upon a sale of real estate by an assignee for the benefit of creditors, under the provisions of the Act of February 17th 1876, a judgment, which at the-time of the sale and confirmation, was a lien and. entitled to be paid-out of the proceeds, is not deprived of the right thereto by reason of the expiration of five years from its entity, before payment of the purchase-money and delivery of the deed.
    2. The judgment-liens are discharged by the confirmation of the sale and the rights of owners of judgments attach at that time.
    3. Carver’s Appeal, 8 Norris 276, and Tomlinson’s Appeal, ante, p. 224, followed.
    May 21st 1879.
    Before Sharswood, C. J., Mercur, Gordon, Trunkey and Sterrbtt, JJ. Paxson and Woodward,. JJ., absent.
    Appeal from the Court of Common Pleas of Adams county: Of May Term 1879, No. 80.
    Appeal of Samuel Herbst, assignee of William C. Stallsmith, and C. H. Buehler, a judgment-creditor of said Stallsmith, from the decree of the court made upon-the petition of Mary Campbell, a .judgment-creditor of said Stallsmith, to have her judgment paid in full out of the proceeds of the sale of lands in the hands of the assignee in trust for creditors.
    The judgment of Mary Campbell against Stallsmith was-entered in the Court of Common Pleas of Adams county, on December 6th T872. On July 13th 1877, Stallsmith made an assignment to Herbst for the benefit of creditors. The assignee applied to the court for an order to sell the real estate discharged of liens under the provisions of the Act of February 17th 1876. The order was granted and the sale made, and on the 15th of October 1877, the assignee made return, when the sale was confirmed, the first instalment of the purchase-money to be paid on the 1st of April 1878. When the sale was made and confirmed, the judgment of Mary Campbell was a lien, but the five years expired on December 6th 1877. On the receipt of the purchase-money, on April 1st 1878, the assignee refused to pay'her judgment, on the ground that her lien had expired béfore the conversion of the property, and was not, therefore, payable out of the fund. She then petitioned the court for a rule on the assignee and the judgment-creditors to show cause why her judgment should not be paid in full out of the proceeds of the real estate. The rule was granted, and after an answer filed and a hearing, the court made it absolute. Herbst,. the assignee, and Buehler, a judgment-creditor, took this appeal, and assigned this action of the court for error.

      R. Gr. McOreary, for appellant.
    Mary Campbell’s ■ right as against the trustee grows out of the receipt by him of money to ' which she was entitled by virtue of her lien; but this can be asserted only of a lien existing and valid at the date of the actual conversion of the estate and receipt of the money. Her lien expired December 6th 1877, and the conversion was not effected by conveyance and payment until April 1st 1878. Consequently, she had no claim upon the fund except as a general creditor.
    The confirmation required by the act is the official declaration that the proceedings of the assignee have been regular and proper; but it is the sale, and not the confirmation that discharges the liens. And the contract of sale, although confirmed by the court, does not work a conversion of the estate until it is perfected by payment of purchase-money and delivery of the deeds of conveyance: Jacobs’s Appeal, 11 Harris 477; Biggert’s Estate, 8 Id. 17.
    The equitable or constructive conversion of land, by contract of sale, has never been held to affect liens on it. The contrary has been decided: Leiper’s Executors v. Irvine, 2 Casey 55.
    In judicial sales in the Orphans’ Court, as for payment of debts where sales are made on time, there is no conversion of the estate, and the title does not pass until payment and delivery of the deed: Leshey v. Gardner, 3 W. & S. 319; Hise v. Geiger, 7 Id. 273; Erb v. Erb, 9 Id. 147; Marys v. Anderson, 12 Harris 272; Biggert’s Estate, 8 Id. 17.

      W. A. Duncan, for appellee.
    The Act of February 17th 1876, relating to sales of real estate both in plain letter and intent, divests the liens of judgments upon the confirmation of the sale by the court. It was never intended by the legislature that the lien should remain undivested until the purchase-money was paid and deed delivered. The assignee becomes an officer of the court when he applies to the court for a sale of real estate under that act and executes the court’s decree. The delivery of the deed relates back to the time of the confirmation of the sale, just as the acknowledgment of a sheriff’s deed has relation back to day of sale: Hahn v. Smith, 1 P. & W. 484; Hoyt v. Koons, 7 Harris 277.
    This is in the nature of a judicial sale, and analogous to that of a sheriff, converting the real estate instantly, and at same time divesting the lien: Reed v. Reed, 1 W. & S. 239; Clarke v. Stanley, 10 Barr 472; Small’s Appeal, 12 Harris 398; Barnes’s Appeal, 10 Wright 356; Douglass’s Appeal, 12 Id. 223; Girard Life Ins. Co. v. Bank, 7 P. F. Smith 394. The courts favor com version of realty at the first practical moment: Allison’s Executors v. Wilson’s Executors, 13 S. & R. 330.
    In agreements between vendor and vendee there is an equitable conversion at time of contract: Siter, James & Co.’s Appeal, 2 Casey 178; Large’s Appeal, 4 P. F. Smith 383.
    June 2d 1879.
   Mr. Justice Mercur

delivered the opinion of the court,

This fund in contention was produced by a sale under the Act of 17th February 1876. It authorizes the Court of Common Pleas to order an assignee in trust for the benefit of creditors, to make sale of the assigned real estate, which is encumbered by liens. The assignment of error presents the single question whether a judgment which, at the time of sale and of confirmation, is a lien and would then be entitled to be paid out of the proceeds, is deprived of all right thereto by reason of the expiration of five years from its-entry, before payment of the purchase-money and delivery of the deed. That it is not, is expressly ruled in Tomlinson’s Appeal, ante, p. 224. The language and object of this Act of 17th February, are there carefully considered. It is shown that such a construction would be contrary to the manifest purpose and spirit of the act. As it expressly declares the judgment-liens are discharged by the confirmation of the sale, the rights of the owners of the 'judgments then attach to the fund. The confirmation is an act separate and distinct from a payment of the purchase-money : Carver’s Appeal, 8 Norris 296. A right vested at the time of confirmation is not divested by a postponement of the payment of the purchase-money. It is unnecessary to repeat the reasons given in Tomlin-son’s Appeal. They fully sustain the learned judge in holding that the right of the appellee was not forfeited after the confirmation of' the sale. Herbst, as assignee, has no such, interest in this distribution between creditors, as to give him a right of appeal, and his appeal is quashed as to the other appellant.

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


author: Mr. Justice Sterrett

text:
    In re division of Gettysburg into wards.
    In a proceeding under the Act of May 14th 1874, to divide a borough into wards, it is not necessary for the petitioners to ask for division into a definite number of wards and suggest the boundaries thereof. The proper practice is to ask for a division, leaving the details as to the number of wards and the boundaries thereof, to the judgment of the commissioners under the supervision of the court.
    May 21st 1879.
    Before Sharswood, C. J., Mercur, Gordon, Trunkey and Sterrett, JJ. Paxson and Woodward, J.J., absent.
    Certiorari to the Court of Quarter Sessions of Adams county: Of May Term 1879, No. 74.
    On the 30th of August 1877, the requisite number of freeholders, resident in the borough of Gettysburg, presented their petition to the Court of Quarter Sessions, setting forth, “ that it would promote the interest of your petitioners, and the taxpayers generally of said borough, to have the said borough divided into wards.” On the 1st of September 1877, the court appointed three commissioners, and issued an order to them “ to inquire into the propriety of granting the prayer of the petitioners.”
    On the 12th of November 1877, the commissioners made report to the court, that after having given legal notice, &e., “ they proceeded to inquire into the propriety of granting the prayer of the said petition,, and that in the opinion of the said commissioners it would be proper to grant the prayer of the said petitioners, and the said commissioners hereby recommend and report that the said borough shall be divided into three wards, and the lines and boundaries of which, shall be as follows.” The report then set out by metes and bounds the lines of the proposed wards, but was not accompanied with a draft or plot. On presentation of the report, November 12th 1877, the court confirmed it nisi.

    Exceptions were filed thereto on the 28th of January 1878, for the following reasons:
    I. That the proceeding is defective in that the petition does not designate the number of wards proposed nor their boundaries. 2. That no' draft was returned. 3. That the order of court was to inquire into the propriety of granting the prayer of the petitioners.” 4. That the petition does not ask for any order for any definite purpose. '
    On the hearing of said exceptions, the court, on the 12th of April 1878, recommitted the report to the commissioners, to submit a plot or draft with their report, On the 18th of April 1878, the commissioners submitted an amended report, in substance the same as the first, but accompanied with a plot or draft of the wards, which was, the same day, confirmed nisi by the court.
    To this amended report exceptions were again filed August 17th 1878, the same in substance as the first exceptions, leaving out the second in reference to a plot or draft, and inserting in lieu thereof, that the draft or plot of the boundaries of the borough of Gettysburg was not correct.
    On the 16th of August 1878, without any order of court, or authority, and after the duties of the commissioners had ceased, and their order had been expended and returned, they filed, in the office of the clerk of the Court of Quarter Sessions, a supplemental report, with a plotchanging the boundaries of the wards proposed.
    On the 23d of December 1878, the court made the following order and decree, endorsed on the original report: “Exceptions dismissed and report confirmed absolute.”
    To this order and decree of the court this certiorari was issued •December 30th 1878.

      J. A. Kitzmiller, David Wills and 72. Gr. McOreary, for plain tiffs in error.
    THe petition is too indefinite. The tax-payers and citizens have a right to know from the record what-the commissioners are to inquire into. The Act of the 15th of April 1834, Pamph. L. 539, relating to the division of townships, is the same as the Act of 1834 relating to boroughs, and contemplates that the proposed division should be set out in the petition: Green Township, 9 W. & S. 22; Sewickley District, 9 Casey 297; Harrison Township, 5 Barr 447; Wetmore Township, 18 P. F. Smith 340.
    The Act of Assembly makes it imperative on the commissioners to accompany their report with a plot or draft of the proposed wards. The court referred the report back to the commissioners for amendment in this particular, and the commissioners made an' amended report, accompanying it with a draft, but the court did' not make the final order on this amended report.

      J. O. Neely, W. A. Duncan and D. M. Wilson, for defendants in error.
    There is no necessity, and there would be no propriety,' in having the number of wards and their boundaries designated in' the petition. This is a matter left entirely to the Court of Quarter Sessions, through their sworn ofScers, the commissioners.
    This proceeding is analogous to that provided for by the Act of April 15th 1834, for the erection of hew townships, &c. The same language is used as to the duties of the commissioners. It is held not to be essential in such cases that the lines of the new township should be designated in the petition. See Macungie Township, 3 Rawle 459; Harrison Township, 5 Barr 447; Limestone Township, 1 Jones 270; Bethel Township, 1 Barr 97; Conneaut Township, 6 Pitts. Law Jour. 121.
    June 23d 1879.
   Mr. Justice Sterrett

delivered the opinion of the court.

The first assignment of error presents the question, whether, in a proceeding to divide a borough into wards, it is necessary for the petitioners to ask for division into a definite number of wards and suggest the boundaries thereof. The answer to this question must depend on the provisions of the statute by which alone the proceeding is authorized and regulated.

The Act of May 14th 1874, Pamph. L. 159, prescribing “ the manner by which the courts may divide boroughs into wards,” empowers-the several courts of Quarter Sessions within their respective counties to divide boroughs into wards; to erect new wards out of parts of two or more adjoining wards; to divide any ward already erected into two or more wards; to alter the lines of any two or more adjoining wards, so as to suit the convenience of the inhabitants thereof; and, for the purpose of effecting either of these objects, to cause the lines or boundaries to be ascertained and established. By the supplement of March 24th 1877, Pamph. L. 47, the further power is conferred, of erecting two or more wards, or parts of two or more wards, into one ward.”

The second section of the original act provides that upon application by petition of at least twenty freeholders, resident in the borough or ward, for any of the purposes above specified, the “ court shall appoint three impartial men to inquire into the propriety of granting the prayer of the petition. And it shall be the duty of the commissioners so appointed, or any two of them, to make a plot or draft of the borough or wards proposed to be divided, of the proposed new wards, and the division lines proposed to be made thereon, or of the lines proposed to be ascertained and established, as the case may be, if the same cannot be fully designated by natural lines'and boundaries; all of which they or any two of them shall report to the next Court of Quarter Sessions, together with their opinion of the same.”

The petitioners in this case represented that their interest and that of citizens and tax-payers of the borough would be promoted by a division thereof into wards, and prayed the court to appoint three impartial men to inquire into the propriety of making a division, but they did not propose any specific number of wards into which it should be divided, nor did they make any suggestion as to the boundaries thereof. It is contended that the omission to do this rendered the petition fatally defective. We do not think so. While the course contended for by the plaintiff in error, may perhaps be pursued without vitiating the proceedings, there is nothing in the act requiring it to be done. On the contrary we think the proper- practice, as indicated by the act, is to ask for a division, as was done in the present case, leaving the details as to the number of wards and the boundaries thereof to the judgment of the commissioners, under the supervision of the court. After the parties interested have been duly notified, the first duty of the commissioners is to inquire into the propriety of making a division. If they or any two of- them are of opinion that it is proper, it is made their duty to prepare a plot or draft of the borough, indicating thereon the wards into which, in their judgment, it should be divided and report the same with their opinion to the court. The order issued to the commissioners in this case conforms to this view of the act. It directs notice, inquiry into the propriety of division, the making of a plot of the borough with “ lines and boundaries of the wards, if any, which they may see fit to erect and designate, if the same cannot be fully designated by natural lines and boundaries,” &c. An opportunity is thus afforded to all parties interested to appear before the commissioners and be heard for or against, division,' as well as in relation to the number of wards and the boundary lines thereof, to be ascertained and established. In this way the commissioners are enabled to reach a result, on all the questions involved, that will be more generally satisfactory to the people of the borough, than if the details of their work were suggested by the petitioners. After the report has been presented, exceptions thereto may be filed and disposed of on evidence, as the court shall deem just; with the further right to a review, if, in the opinion of the court, it may be necessary to secure a fair adjudication of the matter. The most ample provision is thus made for obtaining the views and consulting the wishes of all concerned, and in the end reaching a just and proper conclusion.

The action of the court in recommitting the report to the commissioners was entirely proper. They had inadvertently omitted to attach the required plot or draft, and no injury could result to any one from allowing them to supply the omission.

There is no merit in the exception that the final confirmation was endorsed on the first report. The amended as well as the supplemental report and corrected plot are to be considered as forming a part of the first and only report of the commissioners, which, as thus amended and corrected, was approved by the court. There is no such irregularity as calls for setting aside the proceedings.

Proceedings affirmed.


text:
    Bower versus Fenn and Wife.
    Iu the sale of the stock, lease and fixtures of a drug store, the vendee, who had no knowledge of the business, relied upon the truth of the vendor’s statements as to the value of the store. A mortgage was given for a portion of the purchase-money, and in ejectment thereon, held, that if the statements made by the vendor of the value of the property were false in fact, his belief that they were true was of no consequence, and did not preclude the vendee from setting up their falsity as a defence : that if the vendor permitted the vendee to contract with him on the faith of his statements of value, he was bound not merely to believe, but to know they were true. Held, further, that a conditional verdict is not proper, in an ejectment upon a mortgage.
    May 22d 1879.
    Before Sharswood, O. J., Merour, Gordon, Trunkey and Sterrett, JJ. Paxson and Woodward, JJ., absent.
    Error to the Court of Common Pleas of Dauphin county: Of May Term 1879, No. 155.
    Ejectment by Robert S. Bower against James V. Fenn and Rebecca J. Fenn, his wife, to enforce the payment - of certain money due upon a mortgage given by Fenn and his wife, upon the property of the wife, to ^ecure the payment of $9000.
    It appeared that Boiler, who was a druggist of many years’ experience, offered for sale the stock, fixtures, lease and good-will of his drug store at Eighteenth and Market streets, Philadelphia. Fenn, who lived in Harrisburg and who had no knowledge of the drug nusmess, entered into negotiations for its purchase. Rower represented to Fenn that the stock and fixtures alone were worth $9000, and first asked $12,500 for the establishment, but finally agreed to take $10,500 therefor. Fenn, relying upon the representation of Bower, made but a slight examination of the store, and no inventory of the stock was taken, Bower objecting on the ground that he did not want his clerks or customers to know that he contemplated a sale, and because' it would involve too much time and trouble. The whole establishment was subsequently sold at sheriff’s sale for $2000. At the time of the purchase Fenn paid Bower $1500 in cash and gave a judgment-bond for the balance, secured by a mortgage on his wife’s land. Several instalments being unpaid, this action was brought upon the mortgage. At this time $7500 were still due on the mortgage, and plaintiff contended he was entitled to recover the land mortgaged, and hold it until the debt was fully paid.
    At the trial before Pearson, P. J., the following, among other points, was presented by plaintiff, to which is appended the answer of the court: Even if the jury should believe that Fenn relied upon the statements as to the value of the stock made by plaintiff, yet if they were made in good faith and constituted the latter’s real opinion as to such value, though the estimate might have been too highy it will be no ground of defence in this action, especially as defendant had full opportunity to verify the statements, and might have declined the purchase unless an inventory was taken.
    Ans. “In case of misrepresentation by one who had long and well known the value of goods to one.who was ignorant of the value, the contract should be rescinded early after the fraud is discovered. If not discovered until afterwards, when it was out of the power of the defendant to return the goods, the price may be reduced in cases of actual fraud practised on him in the sale.”
    In the general charge the court, inter alia, said: “ It is contended by plaintiff’s counsel that if any money was due when the action was commenced, they are entitled to a verdict and to hold the land till debt, interest and costs are paid. We can see no good reason why the plan recommended by the Supreme Court in actions to enforce payment on articles, should not be applied in such cases, by having the jury fix the amount and time of payment ; and on default that the title should be forfeited; or what is said to be much better, that a writ should issue to the sheriff to sell the land, and thus avoid. a forfeiture, and obtain what would be nearer its full value. You have it in your power to render a conditional verdict. This, with the answers to the points, will meet every question raised in the case.”
    ; y The jury rendered a verdict “in favor of plaintiff for the land mortgaged, and claimed in the ejectment to be released on payment of $500 on the first day of June 1879 ; $500 on the first of April 1880, and $500 on the first of April 1881, all to bear interest from March 22d 1879, to be in full of the money called for in the mortgage. If any instalment is not paid when due, the plaintiff to issue a writ of levari facias to sell the property for payment of the whole sum we find to be payable on the mortgage.”
    Judgment was entered on this verdict, when the plaintiff took this writ and alleged that the court erred in their answer to the above point, and, in the instruction to the jury that they might find a conditional verdict.

      II. M. Gray don, for plaintiff in error.
    We asked the court to instruct the jury that if plaintiff’s statements as to the value of the store were made in good faith, and constituted his real opinion,there would be no fraud even though his estimate might have' been too high. The answer has no reference whatever to the proposition submitted. To sustain the defence here set up, there must be an intentional misrepresentation, on which the party relied when he had no means of discovering its falsity: Phipps v. Buckman, 6 Casey 401; Watts v. Cummins, 9 P. F. Smith 84; Clark et al. v. Everhart et al., 13 Id. 347; Weist & Myers v. Grant, 21 Id. 95; The jury had no right to render a conditional verdict: Fluck v. Replogle, 1 Harris 405.

      Fleming §■ McOarrell, for defendants in error.
    Even if the answer to the plaintiff’s point was not directly responsive, the charge of the court fairly met and affirmed it, when they said, “ If there was no misrepresentation and over-reaching, no taking ■ advantage of the purchaser’s ignorance by falsehoods, there can be no deduction. There must, as a general rule, be either fraud or warranty to avoid a sale, some deception practised on the purchaser by misrepresentation, by which he is deceived. You must judge whether such was the case here.” The conditional verdict was proper.
    June 2d 1879.
   Mr. Justice Gordon

delivered the opinion of the court,

The only assignment of error that has particularly drawn our attention in this case, is that embracing the answer to the plaintiff’s fifth point. 'Complaint is made that the answer is not responsive to the point, and this, we think, is well founded. It only remains for us to consider whether the plaintiff wras entitled to an affirmative answer, for if not, if it might have-been negatived or refused; then he has nothing of which to complain. The point is as follows: “Even if the jury should believe that Fenn relied upon the statements as to the value of the stock, made by the plaintiff, yet if they were made in good faith, and constituted - the latter’s real opinion as to such value, though the estimate might have been too high, it will be no ground of defence in this action, especially as the defendant had full opportunity to verify the statements, and might have declined the purchase unless an inventory was taken.”

It will be observed that this point is put upon the ground that Eenn relied upon the statements concerning the value of the property, made by 'Bower, and, consequently, that he dealt upon the faith of those representations. ■ This, of course, means that Fenn was induced to depend upon Bower’s knowledge of the stock, and to trust to that knowledge rather than to information which he might have" acquired by an inventory,'or by other means. This statement of the questipn, however, settles the controversy adversely to the point put,‘for\iff, as the jury have found, the statements, made by the plaintiff, of the value of the property, Avere false in fact, his belief, that they were true, was of no consequence; for, because of such belief, they were none the less false, neither was Fenn the less deceived thereby. If BoAver chose to permit Fenn to contract wdth him, on the faith of his statements of value, he was bound not merely to believe, but to know, that they Avere true. 'This very point is ruled in the case of Fisher v. Worrall, 5 W. & S. 478, Avherein it was held, that a misrepresentation by a vendor of an occult quality in land, though it may have been made in ignorance of the truth, and although the vendee agreed to run the risk of this, Avas, in an action for the recovery of the purehase-money, a decisive objection to the plaintiff’s recovery. Here, as in-the case in hand, the contract resulted from the plaintiff’s representations, Avhich, in the end, turned out not to be true; without these, the contract never would have been made; hence, without regard to his belief, the plaintiff Avas responsible for their verity. -IThe best,. indeed, that can be said for Bcjvíer is, that he asserted for truth Avhat he did not know to be so, but this, as is ruled in the case.-above cited, is equivalent to the assertion of a knoAvn falsehood, v''

Weist v. Grant, 21 P. F. Smith 95, and Watts v. Cummins, 9 Id. 85, have been cited in support of the point under consideration, but in both these cases Fisher v. Worrall is recognised as authority, and the cases are so clearly distinguished, by Mr. Justice Agneav, Avho delivered the opinions in the two first named, that it is unnecessary for us to attempt a re-discussion of the subject.

The conditional verdict, as directed by the court, and the judgment entered thereon, are wrong and must be corrected. As was said in Fluck v. Replogle, 1 Harris 405, “ There is no necessity for a conditional verdict. Indeed it would be unjust for the jury to prescribe conditions by delaying the payment of money already due, and thereby impairing the security.” It is, indeed, difficult to see hoAv the verdict, as rendered in this case, can be enforced. It gives the plaintiff no right to enter upon the premises, neither could default in payment bar the defendant’s equity of redemption. It is true, the verdict provides for a levari facias on the' non-payment of any one of the instalments, but this, in effect, substitutes the writ of ejectment for a scire facias, or for a bill in equity, but as no such use has been heretofore made of this writ, in the case of a mortgage, its legality may well be doubted. As, however, the verdict fixes the amount 'due the plaintiff, the conditional part of it may be treated as surplusage; for the court has the right to mould a verdict according to the requirements of law: Byrne v. Grossman, 15 P. F. Smith 310. We therefore direct that the verdict be amended as above directed, and that judgment be entered for the plaintiff for the land described in the mortgage, to be by him possessed and held until the net rents, issues and profits thereof pay the amount of the said verdict ($1500), with interest from the 22d of March 1879, and costs.

Subject to the amendment as above stated, the judgment is affirmed.