text:
    McClurkan versus Byers.
    1. An association desired to raise money, individual members made notes in large sums for that purpose and placed them in the hands of Hostetter, one of the association. The amounts being too large to negotiate, he gave his individual notes in smaller sums and retained the large notes as security for himself. Evidence tending to prove the ratification of his acts by the other members of the association was admissible in a suit upon the original notes by a holder.
    2. The original notes were negotiated by an unincorporated firm of which Hostetter was a member; Held, that Hostetter’s knowledge of the circumstances, &e., of the notes was to be imputed to the firm.
    November 12th 1873.
    Before Read, 0. J., Agnew, Sharswood, Williams and Mercur, JJ.
    Error to the Court of Common Pleas of Allegheny county: No. 34, 35, 36, 37, to October and November Term 1873.
    Four actions of- assumpsit were brought September 20th 1871, against Alexander M. Byers, Alexander Nimmick, William K. Nimmick and Joseph Fleming, trading as Byers & Co., to December Term 1871 of the court below. ' In Nos. 168 and 171 Samuel McClurkan, in trust for the Fort Pitt Banking Company, was plaintiff, and in Nos. 169 and 170 Samuel McClurkan was nlaintiff. No. 168 was on the following note :—
    “$50,000. Pittsburg, Pa., December 3d 1869.

      Sixteen months after date we promise to pay to the order of Dr. D. Hostetter fifty thousand dollars, without defalcation, for value received. Byers & Co.
    Endorsers:—
    D. Hostetter,
    Lockhart, Frew & Co.,
    D. Hostetter.”
    No. 169 was on the following note:—
    “$50,000. Pittsburg, December 13th 1869.

      Sixteen months after date we promise to pay to the order of Dr. D. Hostetter fifty thousand dollars, without defalcation, value received. Lockhart, Frew & Co.
    Endorsed:—
    D. Hostetter,
    Byers & Co.,
    Samuel McClurkan.”
    No. 170 was on the following note :— •'
    “$50,000. Pittsburg, December 11th 1869.

      Sixteen months after date we promise to pay to the order of Messrs. Lockhart, Frew & Co., fifty thousand dollars, without defalcation, for value received. Byers & Co.
    Endorsed:—
    Lockhart, Frew & Co.,
    D. Hostetter,
    Samuel MoClurkan.”
    No. 171 was on the following note :—
    “ $50,000. Pittsburg, December 16th 1869.

      Sixteen months after date we promise to pay to the order of Dr. D. Hostetter fifty thousand dollars, without defalcation, for value received. Lockhart, Frew & Co.
    Endorsed:—
    D. Hostetter,
    Byers & Co.,
    D. Hostetter.”
    The four cases were tried together January 18th 1872, before Sterrett, P. J.
    The plaintiff gave the notes and protests in evidence, and rested.
    For the defendants, A. Nimmick, one of them, testified that in the fall of 1869 there was a “ firm association known as the Pitts-burg Petroleum Oil Company, composed of Byers & Co., Kirkpatrick & Lyons, Lockhart & Frew, Samuel Lewis, D. Hostetter and A. Hertz & Co. Their business was to buy and sell'oil. In the fall of 1869 the association proposed to borrow money in Philadelphia to be used in their business. For this purpose six notes for $50,000 each were drawn, in which the day of month and time they had to run were left blank; two were drawn by Byers & Co., two by Lockhart & Frew, and two by D. Hostetter .& Co. Four of these notes were those in suit. Witness signed for Byers & Co., and Frew for Lockhart & Frew. They hoped to borrow on four months time, but lest they should have to make the time shorter, the blanks were left. About the 18th of December 1869 witness and Hostetter went together to Philadelphia, and, finding that they could not negotiate the notes on account of their large amount, they made an arrangement with Charles Lennig, by which they could obtain the money on notes of $10,000 each; witness drew in the name of Byers & Co. ten $10,000 notes to the order of Lockhart, Frew & Co., and delivered them to Hostetter to have negotiated; Hostetter agreed not to use their two $50,000 notes; witness gave as collateral to Lennig forty-three bonds of the Allegheny Valley Railroad Company, which had been borrowed by the Pittsburg Petroleum Company; they received on that day through Lennig from $40,000 to $50,000, and also from Warden, Frew & Co. $50,000, all which witness deposited in Iron City Bank at the .disposal of the Pittsburg Petroleum Company, of ■which Mr. Frew was the disbursing agent; witness next heard of the notes of Byers & Co. a few days before they were due, about sixteen months afterwards; witness never authorized Hostetter to fill the blanks or negotiate the notes; the Pittsburg Petroleum Company were to take up the notes which were negotiated.
    Joseph Fleming, a defendant, testified, corroborating Nimick as to the making the blanks, &c., of the $50,000 notes and their purpose; he also testified that he returned with Hostetter on Christmas 1869, went to Lockhart & Frew’s office, which was closed, and they could not get in; they went to the Iron City Bank and left some money there, and afterwards Frew and witness were at Lockhart & Frew’s office when Hostetter came in; Frew asked him if he had the $50,000 notes with him ; Hostetter said he had not; they were in his satchel, and he would return them the first time he came up. Witness never authorized Hostetter to fill up and negotiate the notes; the first he heard of them was about the time they were falling due.
    William Frew testified that he was the purchasing agent of the company; money was paid to him as it was needed; that he got $98,500 from Hostetter on the 21st of December 1869, and gave him a receipt, which was produced. At the interview with Hostetter at the office of Lockhart & Frew on Christmas, Hostetter said he could not use the $50,000 notes in Philadelphia; he had to send for collaterals; that he had the notes at his office and would return them shortly.
    W. H. Nimick, a defendant, testified that in 1870 there was considerable amount of accommodation paper for the use of the company made and endorsed by the members of the association. In November 1870, it was arranged that each of the partners should take up $100,000 of this outstanding paper, a portion of which Hostetter was to pay at the Mechanics’ Bank in Pittsburg. There had been a quarrel amongst the partners in May or June 1870, which still continued. Byers & Co. did not pay either note of $50,000, which was allotted to them to pay; Hostetter sued them on one and recovered. There was evidence that the paper allotted to Hostetter to take up, was in Philadelphia, and in the Mechanics’ Bank in Pittsburg, four pieces maturing there in December 1870; the day before these were due, Hostetter said he would not pay them.
    The defendants called the plaintiff. He testified that he was president of the Fort Pitt Banking Company, which was not incorporated ; Hostetter was a member of the company and a director. In 1869 witness knew there was some difficulty in the Petroleum Company about the oil Hostetter was to get; Hostetter about then informed him that there was difficulty about some paper of the company that was out; that there was an arrangement between Lockhart & Frew, Byers & Co. and himself, by which each, was to take up $100,000 of the paper, some of which was in the Mechanics’ Bank, and which he would like to have taken out of the bank, as he did not wish Mr. Holmes, the president of the bank, to have any trouble; witness bought the notes from the Mechanics’ Bank on the last day of grace. The notes in suit were discounted by the Fort Pitt Bank December 29 th 1870; the blanks were filled at the time of discount in the banking-house; the proceeds of the notes were placed to Hostetter’s credit. Hostetter told witness that the defendants had failed to pay the notes, and that he held the four $50,000 notes as collateral security for other notes which he had substituted for them in Philadelphia; “ he went into a short history, telling me what Mr. Nimick stated about taking them on there, and their not being able to use them.”
    The defendants gave other evidence for the purpose of showing that the plaintiff took the notes from Hostetter with such knowledge of the circumstances connected with them as that he was not a holder without notice.
    In rebuttal the plaintiff called Charles Lennig, who testified that in December 1869, he was applied to by some of the parties connected with the Petroleum Company to raise money for them, and he agreed to raise $100,000 ; they gave him. ten notes of Byers & Co. of $10,000 each, payable to the order of Lockhart, Frew & Co., and endorsed by Hostetter, and some $140,000 of Allegheny Yalley Railroad bonds, as collateral. About ten days afterwards they made a second application for more money, and there were left with him, ten other notes drawn to the order of Lockhart &Frew; he raised $81,500 on these notes about the middle of January; the ten $10,000 notes on which he advanced the money were in his possession until they were paid; he issued his own notes, and these notes and the bonds were left with him as collateral; there had been received by him twenty $10,000 notes of Byers & Co., payable to the order of Lockhart & Frew, and the aggregate amount of Byers & Co.’s paper held by him was $181,500.
    D. Hostetter testified that the $50,000 notes were made to raise money for the Petroleum Company (he produced the notes); the six notes were executed in Pittsburg, before witness and A. Nimick left Pittsburg on the 19th of December 1869, for Philadelphia; Nimick got the money through a negotiation with Lennig of ten $10,000 notes, and deposited it in the Iron City Bank; witness finding that he could not advantageously negotiate notes of $50,000, issued his own notes in sums of $10,000, $20,000 and $80,000, and deposited the proceeds in the Iron City Bank to the credit of Frew, the disbursing agent of the Petroleum Company, and took his receipts; he had negotiated in the whole up to that time $404,000 for the Company. Mr. Fleming, one of defendants, and witness came from Philadelphia together on Christmas day; went to Lockhart & Frew’s office, found it closed, went to Fleming’s office, left their valises there, and deposited the money they had in the Iron City Bank. Witness said he did not on that day promise Frew or Fleming to return the $50,000 notes; he promised no one to return them; no one ever asked him to return them. “ They knew what I held them for; they all knew I had issued my own notes and held these as collateral security. I explained to them that I had issued my own paper for the purpose of raising money; that I issued my own paper instead of these $50,000 notes; * * * the blanks were left, so that they could be filled up when I found a customer to take them, either for 4, 5, 6, 12 or 18 months; I was not limited as to that.” Witness denied that there was any thing said at Lockhart & Frew’s office that day about the $50,000 notes being in his satchel, and that he would return them; he was not in Frew’s office that day. Notes to the amount of $404,000 being shown to the witness, he identified them as notes drawn by him. The witness testified that the first arrangement was “ that we were to pay the debts and divide the oil. When I found I was paying more than my oil amounted to, I insisted on getting the Bell tank. Byers opposed my getting that and said Frew should give it out of the Brilliant Works. * * * I received 38,000 barrels, and to go on with the arrangement I was to have 8000 or 10,000 barrels in the Bell tank. This was refused. I had been paying regularly until they refused me the oil, and that was the occasion of my stopping payment of what I had agreed to pay the Mechanics’ Bank.”
    The testimony for the plaintiff from Hostetter and others was very- voluminous, detailing the transactions in relation to the notes in suit and their discount by the plaintiff.
    By offer “ G,” plaintiff proposed to give in evidence the notes amounting to $404,000, identified by him as having being issued by him in Philadelphia in lieu of the notes in suit. This was objected to by defendants, rejected by the court, and a bill of exceptions sealed.
    By offer “I,” he proposed to give in evidence the receipt of Frew, the disbursing agent of the Petroleum Company, for the proceeds of Hostetter’s notes for $404,000 issued and discounted in Philadelphia.
    By offer “ J,” he proposed to show by Hostetter that he paid and took up with his own funds, and by his own notes in renewal, all his notes for $404,000, which he had had discounted in Philadelphia, and that he had paid the notes given in renewal of the original paper; be followed by evidence that the Petroleum Company and the defendants ratified all he had done in issuing his ntftes for $404,000, and the Petroleum Company received and used the proceeds of the notes with the consent of the defendants and of Lockhart & Frew.

      The offers were objected to by the defendants, rejected by the court and a bill of exceptions sealed.
    By offer “K,” plaintiff proposed to show by Hostetter that the proceeds of the discount of the four $50,000 notes in suit by the Fort Pitt Banking Company, were applied to pay the debts and take up the paper issued for the accommodation of the Petroleum Company, which that company was bound to take up.
    The offer was objected to by defendants, rejected by the court and a bill of exceptions sealed.
    By offer “L,” the plaintiff proposed to show by Hostetter that he discounted the notes at the Fort Pitt Banking Company to meet the notes of the Petroleum Company and notes issued by him for their accommodation, at the instance of the company and the defendants, and that he applied the proceeds to take up these notes.
    The offer was objected to by the defendants, rejected by the court and a bill of exceptions sealed.
    Offer “ H ” of plaintiff was as follows :—
    “ In connection with the testimony of the witness on the stand— Dr. David Hostetter — that it was a part of the arrangement between himself and Byers & Co., and Lockhart & Frew for taking up the paper of the Pittsburg Petroleum Oil Company, he (Hostetter) was to be made equal in oil belonging to said company with the other parties to the said arrangement. The plaintiffs now offer to show by the said witness that Byers & Co. took possession of and retained about 76,000 barrels of said oil, worth about $450,000; that Lockhart & Frew took possession of and retained about 74,000 barrels, while said Hostetter received only about 38.000 barrels; that said Hostetter was short in oil not less than 25.000 barrels, which he was entitled to receive and ought to have received from Byers & Co. and Lockhart & Frew under said arrangement; that said Hostetter called upon Byers & Co. and Lockhart & Frew for his full share of said oil, but they refused to let him have the same, and that this call and refusal were before the maturity of the notes at the Mechanics’ Bank.”
    This offer was objected to by defendants, rejected by the court and a bill of exceptions sealed.
    There was other evidence admitted and offers rejected; what is given with the answer to the defendants’ fifth point, will sufficiently present the case and the questions decided by the Supreme Court.
    The 5th point of the defendants which was affirmed was:—
    The Fort Pitt Banking Company being a private partnership and not a corporation, notice to or knowledge of any one of the stockholders or partners, is notice to or knowledge of the said banking company.
    Judge Sterrett in his charge said : * * * 9

    “ There is another matter suggested by one of the defendants’ points, to which I have not yet adverted.

      “ It is in proof and not controverted, that in two of the. cases before you the beneficial plaintiff, the ‘ Fort Pitt Banking Company ’ is a private copartnership, unincorporated, composed of Samuel McClurkan, Dr. Hostetter and others. In these cases the company stands in no better position than Dr. Hostetter himself would. If he could not enforce payment of these notes, as against the defendants, he could not transfer them to the copartnership of which he is a member, and then unite with them in maintaining a suit. In other words, if the defendants have a good defence as against Dr. Hostetter, the same defence is available to them as against the firm of which he is a member, the Fort Pitt Banking Company.” * * *
    The verdict was for the defendants in each case.
    The plaintiff took a writ of error and assigned for error, amongst others, the ruling of the court on the offering of evidence before stated, the answer to the fifth point of the defendant and the portion of the charge above given.

      J. Barton and T. M. Marshall, for plaintiff in error.

      T>. T. Watson and Gf. Shiras, for Byers & Co., defendants in wror.

      J. H. Hampton and B. Woods, for Lockhart & Frew.
   The opinion of the court was delivered, January 5th 1874, by

Agnew, J. —

In these cases, if we assume the fact to be conclusively proved that Dr. Hostetter, after failing to negotiate the four $50,000 notes in Philadelphia, was to return them to Byers & Co. and Lockhart & Frew, the rulings of the court below upon the plaintiff’s offers of evidence were correct. The evidence of the defendants did establish this fact, and also the express promise of Dr. Hostetter, after his return to Pittsburg, to surrender the notes. But when the plaintiff, in turn, came to rebut this evidence, and show a different version of the affair, he had a right to give the evidence to establish his version, and to strengthen that already before the court. It was the right of the plaintiff to have the jury and not the court to pass upon the preponderance of the evidence. But by ruling out the evidence offered by the plaintiff, tending to prove ratification and acquiescence of the defendants of Dr. Hostetter’s acts, the court in effect passed upon the facts.

The defendants had themselves called McClurkan to the stand, and in the direct examination, had extracted from him the statement of Dr. Hostetter, that the defendants had failed to pay him, and that he held these four $50,000 notes as collateral security for other notes he had substituted in place of them. Hostetter himself testified that the four notes of $50,000 were made for the purpose of raising money for the Pittsburg Petroleum Oil Company, a firm composed of Byers & Co., Lockhart & Frew, and himself; that the date was left blank, so as to date the notes to suit their maturing; and the place of payment was left blank because it was uncertain where the money could be had; that no arrangements were made as to the place where they were to be discounted or sold, and that it was left to his discretion to fill up the blanks as to the time, date and place of payment. He also testified that these notes being too large, he was unable to negotiate them at the same rate he could his own paper; that he issued his own notes to the amount of $404,000 in sums of $10,000, $20,000, and $30,000, and held these notes as collateral security for the payment of his own paper, and that the money he thus raised he paid over to Frew, the disbursing agent of the company, taking his receipt for the same, and specifying in it the proceeds and identical amount of each note. He further testified that he was never asked to return these $50,000 notes, and never promised to do so; that the defendants knew what he held them for — they all knew he had issued his own notes and held these as collateral securities ; that he explained to them that he had issued his own paper for the purpose of raising the money, and they knew he had issued his own paper in lieu of the $50,000 notes. He at the same time produced the notes he had thus issued. The plaintiff had also given the testimony of Charles Lennig, of Philadelphia, attempting to impugn the accuracy of Mr. Nimick’s testimony as to the ten $10,000 notes, negotiated by Mr. Lennig, and to show that Nimick was mistaken or his memory was at fault.

After all this testimony had gone before the jury, the plaintiff made the following offers in support of its truth, to give it effect, and to enable the jury to draw the conclusion that Byers & Co. and Lockhart & Frew had ratified or acquiesced, in Dr. Hostetter holding the $50,000 notes, in security for his own notes substituted in their place and the proceeds of which they had received. The plaintiff therefore offered in evidence the receipt of Frew, the treasurer, for the money — the notes themselves amounting to $404,000— and to show that he paid all these notes with his own funds, and that the defendant and the Petroleum Oil Company ratified and approved of all that Hostetter had done in making and issuing the $404,000, and received and used the proceeds. This was all rejected. He offered also to show that he discounted the $50,000 notes with the Fort Pitt Banking Company for the purpose of paying and meeting the notes he had issued for the accommodation of the defendants, and that he applied the proceeds to their payment. These offers were also rejected. (See I, Gr, J, K, L.) Now it seems to be clear that if the $50,000 notes were given to Dr. Hostetter to raise money upon, at any time or place, for the benefit of the defendants and the Petroleum Oil Company, and because of their large sums, he was compelled to substitute his own paper, raised the money, paid it over to the treasurer, took his receipt, specifying the very notes he had issued, and if he made this known to the defendants and they ratified and approved of what he had done, and enjoyed the benefits of the proceeds and knew he retained the $50,000 as his own security, and suffered him so to retain them, and to pay off his own notes out of the proceeds of the $50,000 notes which he had discounted for this purpose, it presents such evidence of consent to his right to hold the notes as his security as ought to have gone to the jury, and would have justified a verdict for the plaintiff, unless overturned or borne down by the weight of the defendants’ evidence. This was a question for the jury; but by excluding all the confirmatory evidence contained in the several offers the court prevented its consideration, in effect taking the decision of the facts into its own hands. Of course this is error.

We think the court erred also in refusing the rebutting evidence of the plaintiff contained in offer H. The defendants had gone into evidence of a subsequent arrangement to divide the paper among all the parties, each to pay $100,000, and to show that Hostetter refused to pay his $100,000. The relevancy of this evidence to the action on the $50,000 notes by the plaintiff, McClurkan, is not very clear. Perhaps it was intended to infer from it that the subsequent arrangement was inconsistent with the claim to the $50,000 notes by Hostetter, as his security; and his refusal afterwards to comply was owing to a change of purpose on his part and a determination to hold the $50,000 notes which be had retained. If relevant at all, the defendants having proved his refusal to perform, as a step towards a new claim on his part, it certainly became the right of the plaintiff to rebut this evidence for the purpose of showing that Hostetter’s refusal was not owing to a new determination on his part to hold the $50,000 notes, but to the refusal of the defendants to let him have his share of the oil on hand, which was the consideration, as he avers, of the arrangement by which he undertook to pay his proportion, to wit, $100,000.

There is a question, that of notice to the Fort Pitt Banking Company, not without difficulty. My first impression was that Hostetter’s knowledge, as a partner in the company, was not that of the company. He seemed, in the transaction of discounting the $50,000 notes, more as a customer dealing with the company at arms’ length, and his knowledge, therefore, not to be imputed to the company. But further reflection leads to the conclusion that the learned judge of the Common Pleas was right in holding that this being an unincorporated partnership, Dr. Hostetter could not put the partnership in a better position than that he himself held — that he could not transfer to his’ partners for the benefit of the whole firm, a right he himself had not, to recover upon the notes, and then unite with them in maintaining the suit. It is not just that a partner should conceal facts known to him, which would defeat a recovery, and then transfer a title founded in his own want of good faith. Between himself and his partners a relation of confidence exists, which does not between him and a stranger whose note he holds unjustly. As between them and the innocent stranger, it would seem to be just that they who made their partner their agent in copartnership transactions, and confided in his integrity and good faith in Ms transactions with them, should rather suffer the loss than one who had intrusted him with no confidence. And they are in a better position to remedy his breach of good faith. They can charge him with the loss in his account, and hold his interest in the partnership liable to reimbursement of the money he had obtained from them by his wrong. And it is inequitable to permit Mm, after parting with the notes to his partners, through the wrong, to reap the fruits of his iniquity. In the case of a corporation which does business, not through its stockholders, but through officers, and which sues in a corporate name, the knowledge of a stockholder may stand on a different footing as to notice to the corporation, as held in some other courts, but on this point we give no opinion.

For the errors in excluding pertinent testimony, the judgment must be reversed.

Judgment reversed, and a venire facias de novo awarded.


source: Caselaw Access Project

author: Mercur, J. —

license: Public Domain

text:
    Middleswarth’s Adm’r. versus Blackmore et al.

    1. A devise was to “ my son Jonathan * * * out of which I direct him to pay to my wife the above $500 in 10 annual instalments,” and after several bequests to his daughters testator directed “ if there should not be funds enough to pay said pecuniary legacies Jonathan is directed to pay the same at $25 per annum unto each till the deficiency is made up; * * * in ease Jonathan should die without leaving any legitimate issue it is my will the real estate bequeathed to him shall he sold and after the payment of all the specified sums,” then of the balance $1500 were to be paid to two benevolent societies, and the balance to all testator’s “ legitimate grandchildren, now or hereafter born; ” but if any should be guilty of offences, which were specified, they were to be debarred from any bequest under his will and their share to “ be equally divided amongst their brothers and sisters whose life and conversation is free from reproach.” Held, that Jonathan took a defeasible estate which terminated at his death without .issue.
    2. The intention of a testator is not to be ascertained by considering the language of the devise only ; the construction must be that which is consistent with the whole scheme of the wilb
    3. “ Die without leaving legitimate issue” standing alone in a will means issue indefinitely.
    4. A devise may be restrained by subsequent expressions and afee simple thus be converted into an inferior estate.

      5. “ Issue” in a will primfl, facie means heirs of the body : — but this will be different, if on the face of the will there be sufficient to show that the word was to have a less extended meaning.
    6. The devise over is to be considered in determining whether the estate should vest on the death of the first taker. '
    November 13th 1873.
    Before Bead, 0. J., Agnew, Sharswood, Williams and Mercur, JJ.
    Error to the Court of Common Pleas of Allegheny county: No. 88, to October and November Term 1873.
    This was an action of ejectment for a tract of two hundred acres of land, commenced May 4th 1871, by John Hickman, administrator d. b. n. c. t. a. of Moses Middleswarth, deceased, against James Blackmore. The land in controversy belonged to Moses Middleswarth, the decedent, who died seised of it about July 1842, having made a will dated January 14th 1841, and proved July 23d 1842. Letters testamentary were issued to the executors named in the .will; they having died, administration d.-b. n. c. t. a. was granted . to the plaintiff.
    The testator left to survive him hi.s wife, Elizabeth Middleswarth ; seven children, viz., Jonathan, Mary, Sabia, Euphemia, Anne, Betsy and Hannah. All the daughters were married, and had children at the date of the will. He also left a grandchild, the daughter of a son who had died before the date of the will, this daughter being then born. Jonathan was about forty-two years old at the date of the will, and was unmarried.
    The land in dispute was devised to Jonathan Middleswarth in thé terms mentioned in the will, which will be given hereafter. On the assumption that his devise was an estate tail he executed an appropriate deed to bar it, and the land having been reconveyed to him on the 7th of July 1853, he conveyed it by deed in fee simple to Thomas Blackmore, under whom the defendant claimed.
    Jonathan died June 8th 1869, without issue, never having been married.'
    . By the words of the will the executors were directed to sell the land on Jonathan’s death without issue; the plaintiff alleging that Jonathan’s estate was defeated by his death without issue, brought this ejectment.
    The will is as follows: — •
    “ After the payment of all just debts and charges, I devise and bequeath unto my beloved- wife Elizabeth, during the term of her widowhood, my house and farm whereon I now reside, &c., * * * and also $500 to be paid to her in the manner hereinafter mentioned.
    “ Second, I devise and bequeath unto my son, Jonathan Middleswart, the Ramsey place or farm, &c. * * * out of which I direct him to pay to my beloved wife Elizabeth the above specified $500, to be paid in ten annual instalments of $50 each, and if not
      all paid in her lifetime, she is to have the disposal of it to who or whom she shall think best. After the marriage or death of my wife Elizabeth I direct that the real estate devised to her during her widowhood, shall be disposed of as soon as circumstances will admit, and I further direct that the proceeds arising from the sale of this portion of my real estate shall be equally divided amongst the legitimate children of my son, Jessey Middleswart (now deceased), the legitimate children that is or may be born by my daughter Zabia Henry, Mary Chess, Euphemia Coulter, Anne Fryer, Hannah Coulter and Elisabeth Middleswart to share and share alike.
    “Third, I devise and bequeath unto each of my daughters, Zabia Henry, Mary Chess, Euphemia Coulter, Anne Fryer, Hanna Coulter, Elisabeth Middleswart, the sum of $2500, to be paid to them in one year after my decease. I devise and bequeath unto my daughter Elisabeth, in addition to the above bequest, the interest of $1000, to be paid to her from the first day of April 1834, until one year after my decease, &c. * * *
    “I do hereby appoint and constitute Samuel Stewart, &c., executors of this my last will and testament, and I hereby authorize and empower my executors to sell, dispose and convert into cash all the balance of my estate, real, personal or mixed, whatsoever or wheresoever situate, and whether in possession or otherwise, and out of the proceeds of the same to pay the pecuniary legacies hereinbefore specified, and if there should be any surplus, I direct it to be divided equally among my said daughters, or their legal representatives; if there should not be funds enough to pay the said pecuniary legacies, my son Jonathan is directed to pay the same at the rate of $25 per annum to each of my daughters until the deficiency is made up. * * * And-1 further direct that in case my son Jonathan should die without leaving any legitimate issue, then it is my will that the real estate herein bequeathed to him shall be sold, and after the payment of all the specified sums hereinbefore mentioned (which is enjoined on him to pay), then it is my desire and will, that of the balance remaining, $1000 shall be paid by my executors (or the surviving ones of them), to the Foreign Missionary Society of the Presbyterian Church, and $500 to the General Assembly’s Board of Education, as soon as convenient, and the balance remaining after this, I direct to be equally divided amongst all my legitimate grandchildren, that is now or may hereafter be born, to share and share alike. And now I wish it distinctly to be understood, that any of my grandchildren who shall be guilty of having an illegitimate child, or is guilty of the sin of intemperance, or that do wickedly and irreverently profane God’s holy name, that he, she, or .they do, by such conduct, for ever debar themselves from the benefit of any bequeath herein made by me to them, and the share or shares of such one or ones shall be equally divided amongst the brothers and sisters of such one or ones whose life and conversation is free from reproach.”
    The case was tried May 16th 1872, before Sterrett, P. J., who upon the foregoing facts directed a verdict for the plaintiff, reserving the following question:—
    “ Whether, under the will of Moses Middleswarth — in connection with the proceedings had for the purpose of barring the entailment — Jonathan Middleswarth acquired a title in fee simple to the land in controversy?”
    The jury accordingly found for the plaintiff. The court after-wards entered judgment for the defendants, non obstante veredicto.

    The plaintiff removed the record to the Supreme Court by writ of error, and assigned for error the entering judgment for the defendant.

      T. Ewing and R. M. Gibson (with whom were J. G. Bryant and H. W. Weir), for plaintiff in error. —
    Courts will look at the circumstances under which the devisor makes his will, as the state of his property, of his family, and the like: 2 Jarman on Wills 742; 2 Powell on Devises 6. In a construction which harmonizes all the testator’s dispositions and accomplishes all his intentions, is the true will of the testator: Earp’s Will, 1 Parsons 457; Barclay v. Lewis, 17 P. F. Smith 320. The gifts over after Jonathan’s death without issue, must take effect within a limited time, therefore the failure of issue contemplated must be definite : Barnfield v. Welton, 2 Bos. & Pul. 324; Porter v. Bradley, 3 T. R. 143; Pells v. Brown, Cro. Jac. 590; Eichelberger v. Barnitz, 9 Watts 450; Taylor v. Taylor, 13 P. F. Smith 485; Fahrney v. Holsinger, 15 Id. 392; Smith’s Exec. Interests 559, 560; 2 Jarman on Wills 440, 441; Hauer v. Shitz, 3 Yeates 235; Johnson v. Currin, 10 Barr 498; Curran v. McMeen, 5 P. F. Smith 489; Hawkins on Wills 206, 209; McCullough v. Fenton, 15 P. F. Smith 418.

      G. P. Hamilton and R. Woods (with whom was S. Woods), for defendants in error. —
    The first words of the devise give a fee simple-to Jonathan: Wills Act, April 8th 1833, sect. 11, Pamph. L. 388, 2 Br. Purd. 1475, pi. 10. But if they give him but a life estate the subsequent words make it an estate tail: James’s Case, 1 Dallas 47; Evans v. Davis, 1 Yeates 332; Mills v. Beecher, 1 Wash. C. C. 369; Haines v. Witmer, 2 Yeates 400. The phrase “ without leaving issue ” does not prevent an estate tail from vesting, and a devise over is too remote: 4 Kent’s Com. 277; Clark v. Baker, 3 S. & R. 478; Ogden’s Appeal, 20 P. F. Smith 501. The provision here embraces an indefinite range of persons, 'and therefore the devise over is not restrained to a limited period: 2 Jarman on Wills 246, 449; Campbell v. Harding, 2 Russell & M. 390. If the interests of the grandchildren be vested so as to pass to their representatives, the general rule will not give way: 2 Jarman on Wills 450. These interests are vested: Price v. Watkins, 1 Dallas 8; Kerlin v. Bull, Id. 189. The legal as well as the actual intent was that Jonathan should take an estate of inheritance: 2 Jarman on Wills 178; Wills Act, sect. 11. Such intent will override technical rules : Redfield on Wills 433, 434. Devises by implication may be rebutted by contrary implications : 1 Jarman on Wills 464 and cases cited: Taylor v. Taylor, 13 P. F. Smith 481; Middleswarth v. Collins, 1 Phila. R. 139.
   The opinion of the court was delivered, January 5th 1874, by

Mercur, J. —

It is an unquestioned rule that the intention of the testator shall govern in the construction of every devise, whenever that intention is clearly manifested, and is not inconsistent with the established principles of law. The intention, however, should not be ascertained by considering the language of the particular devise only, which is sought to be construed, but should be gathered from the whole instrument. The construction vgiven should be such as is consistent with the whole scheme of .the will. If a general intent, and a particular intent, are inconsistent with each other, the latter must yield to the former.

The question presented is, what estate had Jonathan Middleswarth, in the land in question, under the will of Moses Middleswarth? The court below held it to be an estate tail. The plaintiff contends it was a defeasible estate, terminable upon his dying without leaving legitimate issue living at the time of his death.

We will first seek to discover the intention of the testator. He left surviving him a widow, six married daughters, one grandchild, who was the child of a deceased son,-and one son. The son, Jonathan, was about forty-two years of age and unmarried.

The testator devised to his wife, certain real estate “ during the term of her widowhood,” and directed that upon her marriage or death it should be disposed of, and the proceeds arising from the sale thereof, be equally divided among the legitimate children of his deceased son, and the legitimate children that were or might be born of his six several daughters, share and share’ alike. He also bequeathed to his wife five hundred dollars, to be paid to her in ten annual instalments of fifty dollars each, and provided that if it should not all be paid in her lifetime, she might dispose of the same to whom she thought best. He directed these $500 to be paid by his son, Jonathan, out of the land devised - to him. He bequeathed to each of his six daughters $2500, to be paid in one year after his decease; to the Foreign Missionary Society, of the Presbyterian Church, $500, to be paid in ten annual instalments; and to two other persons, $100 each; to his son Jonathan he devised the land in question. He authorized his executors to sell and convert into cash all the residue of his estate, real, personal or mixed, and out of the proceeds to pay the pecuniary legacies specified. If the funds should be insufficient to pay the same, Jonathan was directed to pay them, at the rate of twenty-five dollars per annum to each daughter.' He further directed, “that in case my son Jonathan should die without leaving any issue, then it is my will that the real estate herein bequeathed to him shall be sold, and after the payment of all the specified sums hereinbefore mentioned (which is enjoined upon him to pay), then it is my desire and will that.of the balance remaining, one thousand dollars shall be paid by my executors ■ (or the surviving ones of them) to the Foreign Missionary Society of the Presbyterian Church, and five hundred dollars to the General Assembly’s Board of Education, as soon as convenient, and the balance remaining after this, I direct to be equally divided amongst all my legitimate grandchildren, that is now or may hereafter be born, to share and share alike.”

As a general rule and standing alone, the language “ die without leaving any legitimate issue,” must be understood to mean issue indefinitely. That the estate created would, in such case, have been one in tail, is recognised by numerous English and American authorities. The principle is affirmed in Clark v. Baker et al., 3 S. & R. 470; Eichelberger v. Barnitz, 9 Watts 447; Criley v. Chamberlain, 6 Casey 161; Taylor v. Taylor, 13 P. F. Smith 481.

Does the whole will establish a different intention ? It is well settled that a testator may restrain the generality of a devise by subsequent expressions, and convert that which otherwise would have been a fee simple, into an inferior interest; and more frequently in this mode than in any other is a particular estate given: Haldeman v. Haldeman, 4 Wright 29. The word “issue” in a will means primá; facie the same thing as “heirs of the body,” and in general is to be construed as a word of limitation; but this construction will give way, if there be on the face of the instrument sufficient to show that the words were to have a less extended meaning, and to be applied to children only, or to descendants of a particular class, or at a particular time: Taylor v. Taylor, supra.

Did the testator, when limiting the estate over, contemplate an indefinite failure of the issue of the first taker ? Or did he mean that the contingency upon which the devise-over is made to depend, was to happen, if at all, at the time of the death of Jonathan? If the former was the intention, Jonathan took an estate tail; but if the latter intent can reasonably be collected from the whole will, he took an estate in fee • simple, liable to be defeated upon the contingency of his dying without leaving issue at the time designated: Eby v. Eby, 5 Barr 461; Jessup v. Smuck, 4 Harris 327.

The declaration that in case Jonathan died “ without leaving any legitimate issue, then” the real estate devised to him should be sold by the testator’s executors, and the proceeds be distributed by them, evidently points towards a definite failure of issue. It manifestly indicates that this failure will occur during the lifetime of some one of his executors named..

The land in which his wife had a limited estate, after the termination of that estate, was to be sold by his executors, and the proceeds thereof be distributed among the testator’s grandchildren. In like manner, upon the death of Jonathan without leaving legitimate issue, the land given to him was to be sold, and the proceeds be distributed by the testator’s executors; the residuary portion thereof to be divided among his grandchildren. It is very clear that the testator had the same beneficiaries in his mind in each case. All the authorities concur in saying that the devise over should be considered in determining whether the estate should vest on the death of the first taker. In distributing the proceeds of the land in which his wife had a limited use, he gave the names of the several parents of his grandchildren who were to take; thus fixing beyond any question that the recipients should be no further removed from him. In the latter distribution he does not unnecessarily repeat the names of the parents of his grandchildren, but evidently had the same pei’sons in view. This excludes the idea that the issue of Jonathan had reference to some remote period of the future. The intention to refer to a definite failure of issue is further shown by the fact that he had in his mind the contingency of Jonathan’s dying before all the legacies given to the testator’s daughters had become due, or had been paid out of the residuary estate devised for that purpose. Again, in for ever debarring from the benefit of any bequeath made “ any of my grandchildren who shall be guilty of having an illegitimate child, or is guilty of the sin of intemperance, or that do wickedly and irreverently profane Hod’s holy name,” and in giving it to those of them “whose life and conversation is free from reproach,” he manifestly had in his mind his immediate grandchildren, and excluded the idea of a more remote future, when the character and habits of his beneficiaries should be inquired into. This view is most fully sustained by Johnson v. Currin, 10 Barr 498. There the devise was to testator’s daughter, her heirs and assigns, and “ if any of my daughters die without heirs of their body, their part to be equally divided between the survivors of them, and my grandchildren. Held, an executory devise to the grandchildren and surviving daughters, and not a remainder which could be barred by the first taker. The cases of Lapsley v. Lapsley, 9 Barr 130, and Criley v. Chamberlain, supra, are urged as leading to a different conclusion. Each of those cases was decided under its peculiar circumstances. Neither of them denies that if the whole will clearly indicates a different intention, full effect shall not be given to such intention. The rule is clearly stated in Smith ,on Executory Interests 505, ch. 13, rule 2: “If there are any ^expressions clearly showing that by issue the testator meant children, or particular individuals among his descendants, or any expressions indicative of an intent absolutely inconsistent with or not included in any estate tail in the ancestor, then the word issue'will be construed a word of purchase, if the issue may take as purchasers consistently with the rule against perpetuities; and the ancestor will take an estate for life, with a contingent or vested remainder, as the case may be.” The correctness of this rule is clearly recognised in Sheets’s Estate, 2 P. F. Smith 257; Taylor v. Taylor, supra; Fahrney v. Holsinger, 15 P. F. Smith 388; McCullough v. Fenton, Id. 418; Yarnall’s Appeal, 20 Id. 335.

An examination of the whole will satisfies us that Jonathan took a defeasible estate, which terminated at his death. The learned judge, therefore, 'erred in entering judgment in favor of the defendants on the reserved question.

Judgment reversed, and judgment entered in favor of the plaintiff on the question of law reserved.


text:
    Pittsburg, Allegheny and Manchester Passenger Railway Co. versus Caldwell.
    1. The plaintiff, a child of five years, with another of eleven, got on the front platform of a street railway car ; the driver allowed them to continue there and in attempting against the remonstrance of the driver to get off whilst the car was in motion the plaintiff was hurt. Held,, that it was negligence in the driver to allow children so young to ride on the platform and the company were liable.
    2. It was the driver’s duty to compel them to go inside or to stop and put them off.
    3. Negligence cannot be imputed to one not of sufficient capacity or discretion to understand the danger and guard against it.
    4. There was evidence that the elder child put the plaintiff off; — Held, that her negligence was not to be imputed to plaintiff, the other being a companion and plaintiff not in her charge.
    5. The rules of the company for conductors and drivers were given in evidence ; the court- allowed a schedule of rules containing these and others which did not bear on the issue to go out with the jury, against a general objection to the paper. Held not to be error, being within the discretion of the court.
    6. As'the rules which had not been given in evidence could do no harm, judgment would not be reversed for a technical error.
    November 15th 1873.
    Before Read, C. J., Agnew, Sharswood, Williams and Merour, JJ.

      Error to the District Court of Allegheny county: No. 118, to October and November Term 1878.
    This was an action on the case for negligence brought July 15th 1872, by Kate Caldwell, by her next friend, James Caldwell, against The Pittsburg, Allegheny and Manchester Passenger Eailway Company.
    The cause of action was the negligence of the defendant’s servant, by which one of their cars passed over the leg of the plaintiff, and so injured it as to render her permanently a cripple.
    The case was tried June 2d 1873, before Hampton, P. J.
    The plaintiff was a child of about five years of age.
    The evidence of the plaintiff was that by permission of an elder sister, she accompanied another child, Amanda Lappe, who was about eleven years old, on a walk ; that as they were returning the car came along and stopped; they asked the driver permission to get on the car; he gave it to them and they got on the front platform; when they approached near the home of the plaintiff, she jumped from the car and it ran over her leg; Amanda had her arms around plaintiff, who pulled her arms apart and jumped off; Amanda had never been in the habit of taking charge of plaintiff. One of plaintiff’s witnesses testified that Amanda “ threw the child out from the car; when the little girl jumped, Amanda caught her by the dress; she had made a spring ;* * * she swung her by the dress a short distance.”
    The plaintiff gave in evidence the following rules of the defendants : — For their conductors:
    4. “ Conductors are required to stop their cars to let children off, and when the children are small to help them to the sidewalk.
    10. “ Passengers must be requested not to crowd the rear platform when there is room inside the car. Children must not be allowed to get on or off'the front platform.”
    And rule 6, for their drivers, viz.:—
    6. “ Drivers must ring the bell when any person gets on the front platform, or passes into the car from the front, unless they are sure the conductor sees said person getting on. Also, ring the bell for the conductor when a switch is out of order. ”
    Plaintiff gave other evidence in support of her case, of the same general character as that stated, and rested.
    The driver of the car testified, that Amanda did not ask him to allow her to get on; when he first saw them, she and the plaintiff were sitting on the platform, and in reply to his question what she was doing on, she said she wished to ride home; he knew where they were going and intended to let them off when they got there; Amanda “ shoved ” the plaintiff off; when he saw she was pushing her off he “ put on the brake and checked in the team as quick as it was possible to do it,” but was not able to stop before the wheel passed over the plaintiff; neither of the children gave him notice they were going to get off that way; he told the children to remain on and he would let them off at their own corner; when they got on he did not notify the conductor, nor do anything to remove them from the platform; he gave them no permission to ride.
    The plaintiff’s first point as affirmed was:—
    The plaintiff, Kate Caldwell, a child of tender years, cannot be charged with negligence, and even if Amanda Lappe was guilty of negligence, the negligence of said Amanda cannot affect the right of said Kate to recover, unless the driver did all that ordinary prudence and reasonable care required after he knew they were seated on the platform.
    The defendants’ first and third points with their answers were:
    1. If the jury find from the evidence that the injury complained of in this suit was not the result of carelessness or negligence of the conductor of defendant’s car, but from the improper conduct of the girl Amanda Lappe, whilst she had charge or care of plaintiff, either in assisting or pushing her from the platform, or permitting her to jump off whilst the car was in motion, the-plaintiff is not entitled to recover.
    Answer: “If the injury sustained by the plaintiff was not caused by the negligence of either of the defendant’s officers, viz. the driver or conductor, then the plaintiff will not be entitled to recover in this action, and your verdict will be for the defendant.”
    3. If the jury find. from the evidence that the cause of the injury to plaintiff was not the riding on the platform, but in improperly jumping off the car whilst it was in motion, plaintiff cannot recover.
    Answer : “ If it was the duty of the driver or conductor to prevent children from riding on the platform of the car, and if the injury complained of was caused by the neglect of either of these officers to do their duty, then the plaintiff will be entitled to recover in this action.”
    The plaintiff asked that the jury should take out with them a paper containing the printed rules of the company which had been given in evidence and also a number of other rules prescribing the duties of conductors and drivers, but not bearing upon any questions considered in this case.
    The defendants objected to the request; it was allowed by the court,, and a bill of exceptions sealed.
    The verdict was for the plaintiff for $2500.
    The defendants took out a writ of error; they assigned for error the'answers to the first point of plaintiff, the first and third point's of the defendants, and allowing the printed rules of the company to go out with the jury.

      A. M. Brown, for plaintiff in error. —
    Negligence is not to be presumed: Phila. & Read. R. R. v. Hummell, 8 Wright 375; Kay v. Penna. R. R., 15 P. F. Smith 269. The plaintiff having been pushed off by the other child, she is. without remedy, notwithstanding her tender years: Phila. & Read. R. R. v. Spearin, 11 Wright 300. The driver, in permitting the children to ride, acted out of the range of his employment, and the defendants are not liable: Flower v. Penna. R. R., 19 P. F. Smith 210; Penna. R. R. v. Books, 7 Id. 339.
    As to the paper sent out with the jury, he cited Morrison v. Moreland, 15 S. R. 61; Frazier v. Funk, Id. 26; Hall v. Rupley, 10 Barr 231; Carson v. Watson, 4 Phila. Rep. 88.

      S. M, Raymond (with whom was O. B. M. Smith), for defendant in error. —
    The court was not informed of the grounds of objection to the rules; sending them out was a matter of discretion ; those not given in evidence could do defendants no harm: O’Hara v. Richardson, 10 Wright 385; Riddlesburg Coal Co. v. Rogers, 15 P. F. Smith 416.
   The opinion of the court was delivered, April 2d 1874, by

Williams, J. — It is clear from ad the evidence in this case, and under the instructions of the court, the jury must have found that the accident which resulted in the loss of the plaintiff’s leg, would not have happened if she had not been permitted to ride on the front platform of the defendant’s car. If the rules of the company had not forbidden it, there can be no doubt that it was gross negligence for the driver'to allow children as young as the plaintiff and her companion, to get on the front platform and to ride there. If they got on without his permission, instead of consenting that they might remain on the platform, it was his duty to compel them to go inside the car, or to stop and put them off; and if the plaintiff was injured by his negligence in allowing them to ride on the platform, the company is clearly liable for the injury, unless the plaintiff’s negligence contributed to produce it. But negligence cannot be imputed to one who has not sufficient capacity or discretion to understand the danger "and to use the proper means to guard against it. In this case it is conceded that' negligence is not imputable to the plaintiff, who was an infant of tender age, and not of sufficient capacity to foresee the danger to which she was exposed. What matters it, then — even if the evidence would warrant the inference — that the plaintiff’s companion, who was a child only eleven years old, may not have done all she could to prevent the plaintiff from jumping off the platform while the car was in motion? or that, when she saw her in the act of jumping, she may have been guilty of indiscretion or carelessness in pushing or swinging her from the car, and that her negligence in this respect may have contributed to the accident ? The plaintiff was no more responsible for the conduct of her companion than she was for her own; and the negligence of her companion — even if negligence could be imputed to a child of her age — cannot be regarded as the negligence of the plaintiff, for she was not in her custody or subject to her control. The plaintiff was in her company, but not in her keeping. The only relation which these girls sustained to each other was that of companionship. The older girl was sent on an errand, and the plaintiff, without the consent or knowledge of her parents, went with her. As they were returning home, both got on the front platform, while the car stopped for passengers; and if they did not get on with the driver’s permission, as testified by the older girl, they were allowed to remain and ride there with his knowledge and consent. The driver was guilty of culpable negligence, as already suggested, in allowing them to ride on the front platform, whether he gave them permission to get on or not; and the co'mpany is responsible for the driver’s negligence if it was the cause of the plaintiff’s injury. In answer to the defendant’s points the court instructed the jury that, “ if the injury sustained by the plaintiff was not caused by the negligence of either of the defendant’s officers, viz.: the driver or conductor, then the plaintiff will not be entitled to recover. * * * If it was the duty of the driver or conductor to prevent children from riding on the platform of the car, and if the injury complained of was caused by the neglect of either of these officers to do their duty, then the plaintiff will be entitled to recover in this action. * * * If the injury was caused by Amanda Lappe pulling this child under the wheel, and not by any negligence of the officers of the company, then the plaintiff will not be entitled to recover, and your' verdict will be in favor of the defendant.” These instructions were more favorable than the company had any right to ask, and there was no error in refusing to charge as requested. Under the facts disclosed by the evidence no instructions could have rightfully been given that would have shielded the company from liability for the injury occasioned by the driver’s negligence in allowing the plaintiff to ride on the front platform of the car. It is high time that the directors of a passenger railway company should' understand that it is their duty not only to make and publish rules forbidding their conductors and drivers from allowing children to get on and off the front platform,” or to ride there,'but to see that these rules are rigidly enforced by their employees. Under no circumstances should they permit children to get on and off the front platform of a street car, much less to ride in a place of so much danger to life and limb. If they do, negligence is imputable to the company, and it will be held responsible for any injury occasioned thereby.

There was no error in allowing the printed rules of the company given in evidence by the plaintiff to be sent out with the jury. 'It was clearly a matter within the discretion of the court. If the paper had been objected to because it contained other rules than those given in evidence, the objection would doubtless have been sustained. But the other rules had no hearing whatever upon the issue, and, even if they were read by the jury, they could not possibly have done the defendants any harm. The judgment, therefore, ought not to be reversed for a technical error which did no injury.

Judgment affirmed.


author: Agnew, J. —

text:
    Duquesne Bank’s Appeal.
    1. Brady lent on bond and mortgage usuriously, be sold and assigned to a bank. Held, that the bank stood in no better position than he, as the securities were not negotiable.
    2. The bank having knowledge of the usury or of faots to put them on inquiry, the debtor was not estopped by certificates of “ no defence,” given by him to Brady when the loan was made and produced to the bank when the securities wex’c sold.
    3. The securities were for $40,000 payable with interest annually in eight years and collectible after default of payment of interest for sixty days. The court ordered the bank to reduce the securities and their liens to the amount lent, $28,800, and restrained the bank from collecting any portion till the reduction was made.
    4. Under the Act of May 28th 1858, usury is both illegal and contrary to equity; and the law should be maintained by all courts.
    November 17th 1873.
    Before Read, C. J., Agnew, Sharswood, Williams and Mercur, JJ.
    Appeal from the Court of Common Pleas of Washington county: In Equity. No. 10 of October and November Term 1873;
    On the 21st of September 1871, William White, assignee by several assignments for the benefit of creditors of Samuel Cowen, John D. Cowen and William H. Cowen, filed a bill against James T. Brady and the Duquesne Savings Bank. The bill set out:—
    2 and 3. About September 20th 1870, Samuel, John D., William II. 'and S. C. Cowen negotiated a loan with Brady, and on that day gave him a joint judgment-obligation, conditioned for the payment of $40,000 in eight years, with interest payable annually, the principal to become due in default of payment of interest for sixty days after it was payable. Judgment was entered on the obligation in the Court of Common Pleas of Washington county to December Term 1870. For the further protection of the loan, and to designate the liability of each of the Cowens, they gave to Brady a judgment-obligation and a mortgage on separate tracts of land owned by them respectively: Samuel Cowen’s obligation was for $10,000, John Cowen’s for $12,000, William Cowen’s for $9000 and S. 0. Cowen’s for $9000 — making in the whom $40,000. Samuel received from Brady but $7200, John but $8640, William but $6480 and S. 0. $6480 — making in the whole $28,800.

      4 and 5. These securities were transferred, on the 4th of February 1871, to the Duquesne Savings Bank, without the knowledge of the debtors and without any inquiry having been made of them; and at the time of the negotiation of the loan and of the execution of the securities, Brady was President of the Duquesne Savings Bank, David Campbell was treasurer and S. C. Fetter-man was a director. During the negotiations Brady advised with Campbell and Fetterman, and secured the loan for the bank.
    6. The assignments for the benefit of creditors were made by the Cowens on the 13th of July 1871. The plaintiff averred that the loan was usurious, and was made by Brady for the use of the bank; and the assigned estates should not be charged with more than had actually been received by the four Cowens.
    The prayers were:—
    1. For discovery by the defendants and Campbell and Fetterman.
    2.. That the bank be restrained from proceeding on the mortgages and judgments until such reasonable time as the court might fix, and that the forfeiture he not énforced until that time.
    3. That the joint judgment be reduced to $28,800, payable September 20th 1878, and bearing annual interest from September 20th 1870.
    4, 5, 6. That the judgments of the three Cowens be reduced respectively to $7200, $8640, $6480, payable September 20th 1878, and bearing interest from September 20th 1870.
    7. That the bank be restrained from collecting any part of the judgments until they had reduced- their liens to the amounts above indicated, and that the bank be ordered to make the reduction.
    8. Further relief.
    The bank answered, admitting paragraphs 1 and 2, and -denying knowledge of the allegations of paragraphs 3 and 6.
    4. The securities were assigned to the bank October 17th 1870, by endorsement on them, and entered on the records of Washington February 4th 1871. Before the assignment, certificates of the four Cowens were produced, setting forth that they had no defence to the payment when the money should be due.
    . 5. Denied knowledge of the time of negotiating the loan with Brady; admitted that Brady had been president of' the bank and Campbell the treasurer ever since its organization ; denied that Fetterman had been a director until January 10th 1871, and that Brady, during the negotiation of the loan, had advised with the treasurer or any director of the bank, or that he had obtained the loan for the bank.
    7, 8. The bank was incorporated April 21st 1870, and was empowered to invest in bonds, mortgages, &e. All loans and investments.' must be approved by the board of directors or an investing committee, consisting of three directors.

      9, 10, 11. The securities of the Cowens were offered for sale to the bank in October 1870, as other securities of like character were constantly offered. On the 10th of October they were submitted to a full board, who agreed to purchase them, if well secured and the terms of sale satisfactory. On the 17th of October they were bought by the bank for $30,690, and were transferred as before stated. They were purchased from James T. Brady & Co., in the usual course of business. They were not negotiated by Brady for the bank, and there was no agreement with him, express or implied, at the time of the negotiation, by which the defendant was to purchase the securities. They were purchased in good faith, as above stated, and the sum of $30,690 paid by the bank for them. The answer was signed and sworn to by Campbell, the treasurer.
    Brady answered, admitting and denying substantially as in the answer of the bank. He further answered, that at the time the loan was made, he was one of the firm of James T. Brady & Co., bankers in Pittsburg; that about September 1st 1870 he was applied to by the Cowens, through their broker, George B. Hill, for a loan, and agreed to let Hill have it at 9J per cent, per annum, the excess to cover Hill’s commission and other expenses about it; James T. Brady & Co. dealt largely in such securities; Brady informed the Cowens, at the time of making the loan, that he intended to sell the securities; “ on or about the time they had drawn all the money coming to them thereon, they severally voluntarily gave said firm certificates setting forth that they had executed said securities, and that they had no defence to the payment thereof, when the same should become due and payable; which certificates bear date September 28th 1870.”
    After consummating the loan, he offered the securities to the bank; and the board of directors, after discussing the matter at several meetings, agreed to purchase them, and paid the firm of James T. Brady & Co. $30,690 for them; although president, he had no vote on the subject.
    He denied that the loan was usurious, and averred that the “ bank was nothing more than the purchaser of the securities while they were in the market.” The profit realized by James T. Brady & Co. out of the loan, after paying $902.18 for commissions to Hill and other expenses, was about $1000 for their time and trouble in handling said securities.
    Mr. Eetterman answered, denying that he was a director of the bank at the negotiation of the loan or the assignment of the securities; that all his connection with the transaction was as attorney at law to examine the title of the Cowens and prepare the securities, for which he was paid by Brady and the Cowens.
    A replication was filed, and John L. Gow, Esq., was appointed examiner and master.

      The certificates of “ no defence,” referred to in the answer, were in evidence before the examiner, and were in this form:—
    “I, William H. Cowen, the obligor and mortgagor above named, do hereby certify and declare that I have' no set-off or defence of any kind whatever, to the payment of the above bond and mortgage, and that the whole amount thereof is justly due and payable, as above stated. Witness my hand and seal, this 28th day of September, A. D. 1870.
    “Wm. H. Cowen. [seal.]”
    The evidence before the examiner from both parties was that the amount of money received by the Cowens from Brady was as set out in the bill.
    Oh the part of the plaintiff there was evidence that the commissions to Hill, the broker, had been paid by Brady without any agreement between Hill and them ; also, that Campbell, the treasurer of the bank, had been present in Brady’s banking-house during the negotiation for the loan, and made inquiries of J. D. Cowen in regard to the form of the securities, and that the Cowens never had any knowledge that the bank was about to purchase the securities.
    For the defendants, Brady testified that, he would not pay the money to the Cowens without certificates of “no defence;” that no one but his firm had anything to do with making the loan or advising about it. Campbell had been intimate at the office of the firm for many years, and frequently came in there; neither he as treasurer, nor Brady as president, had any power to negotiate loans for the bank.
    “I offered these mortgages for sale to the Duquesne Bank. They were open to the best bidders. When they were offered to the Duquesne Bank, the matter was fully and elaborately discussed by the board, and as there was some hesitation on the part of some of the members of the propriety of the bank purchasing the mortgages, I stated to them that I did not care whether they took the mortgages or not. They finally agreed to purchase, at three per cent, per annum, discount off, allowing James T. Brady & Co. for the use of the money while they held the mortgages; the price paid by the bank to us being the sum of $30,690. James T. Brady & Co. made as profits $607.18, the additional interest being paid us, making our total profit about $1000. The bank voted to buy the mortgages. As president of the bank I had no vote in the matter. James T. Brady & Co. paid the attorney’s expenses for examining title, and the commission to Greo. B. Hill. Mr. C. S. Fefterman had nothing whatever to do with the matter, except to examine the title and to see that the papers were executed properly. * * * No money of the Duquesne Savings Bank was used in the negotiation for these mortgages. These mortgages were not taken by James T. Brady & Co. for the use of or in trust for the Duquesne Savings Bank or any other bank. The Duquesne Savings Bank was not concerned or connected in any manner or form in the negotiation and acceptance of the mortgage, nor was any other bank. We, James T. Brady & Co., took the risk ourselves. * * * The style of our firm is James T. Brady & Co., composed of James T. Brady and Calvin Adams. * * * ITe is not in any way concerned in the Duquesne Bank.
    “ Mr. Adams, my partner, is a resident of this city. He does not take an active part in our business ; puts it all on me, unless I send for him specially. He sometimes comes in. Unless some matter of unusual importance comes up, he leaves everything to me. He does not consult with me in buying bonds and mortgages. Don’t know that I ever said a word to him in regard to this transaction. Interest was allowed the Cowens — $72.09 on the bulk of the account. I find by an examination of the books, that on the day prior to receiving the certificates, there is charged to John D. Cowen $12,987.22; this of date 29th September 1870.”
    Campbell testified: “ The only conversation I ever had with Mr. Cowen was when I incidentally went into the banking-house of James T. Brady & Co., and was introduced by Mr. Brady to Mr. Cowen, and was asked the question as to the probable value of land in Washington county. I answered the question by stating that in my judgment lands were worth from seventy to eighty dollars per acre. Mr. Cowen then commenced to open a conversation with me regarding a negotiation with James T. Brady & Co. I stopped him by saying that I had no connection with Mr. Brady’s .house, and did not desire to know anything in reference to his business negotiations. I did this because I thought Mr. Cowen was under the impression that I was connected with the banking-house. On the 17th day of October 1871, the mortgages, certificates of no defence and prothonotary’s certificates were all before the bank. The assignment of the bond was made there, that day by Mr. Brady, for his bank, and the memoranda on the mortgages made by Mr. Brady, agreeing to have the mortgages assigned to the bank on the record of Washington county. Previous to the purchasing of these securities by the bank, I had no conversation or understanding with James T. Brady & Co., regarding their probable purchase by the bank; nor do I know of any director or other officer of the bank having any such understanding. * * * On the 10th day of October 1870, at a meeting of the board of directors, the treasurer, as is the custom, informed them that he had considerable funds to invest in proper securities, and as a large portion of the money was payments on the capital stock of the bank, it would not be checked against. He thought it advisable to make an investment in some long loan. Mr. James T. Brady then stated to the board that he had some mortgages which had eight years to run, or nearly. He made a statement of the amounts respectively, and they aggregated f40,000. The matter of making so large an investment in a single transaction was fully discussed by the members of the board. Seven of the nine members were then present, one or two of the members offering objections to these particular securities- because the lands securing the loan were situated in a county other than Allegheny county, Pa. But after a free discussion, their objections were withdrawn, and the board agreed to make the negotiation, provided the titles were good, and the terms satisfactory. These securities were taken precisely in the same form and the same manner that we now, and ever have, taken securities for the bank. * * * The bank had no knowledge of what James T. Brady & Co. made by the negotiation of these securities. Speaking about the bank I mean myself, for I presume no other member of the board would have any knowledge. These were not negotiated differently from all other securities taken by us. I' know distinctly and positively that the securities were not taken by Mr. Brady in trust for the Duquesne Savings Bank, or for the bank. The connection of this bank with that of the firm of James T. Brady & Co. is of the same character as that held with our eastern correspondents, namely, that we keep a deposit account there, and eheclt upon it regularly as we do with other banking institutions with which we have accounts; and James T. Brady, of the firm of James T. Brady & Co., has no more to do with this bank, than the other directors and stockholders have. * * * I don’t think that any officer of the bank made inquiry of the Cowens as to whether they had any set-off or defence to the payment of these securities, because the bank had in their possession the certificates to that effect, signed by the Cowens respectively, and therefore took it for granted that they had no set-off to- the payment of the same. To the best of my recollection and knowledge the bonds, mortgages, certificates of prothonotary, and certificates of no defence, were delivered into the custody of the bank at one and the same time, by Mr. Brady, or by some one for him.”
    Mr. Fetterman testified: “Mr. Cowen came to Pittsburg to make arrangements about drawing the balance of the money. James T. Brady wrote one check or order on their firm, and I wrote three for Mr. Cowen to take to the country to have his father and brothers and himself sign, in order to get the balance of the money, At the same-time I wrote the four certificates of no defence, of which the papers attached hereto are copies, and gave ¿hem to John D. Cowen in presence of James T. Brady, in the banking-office of Brady & Co., and explained to him fully and carefully their object and what we wanted them for, telling him that in case Mr. Brady wanted to spll these securities, that whoever would wish to buy them, would require a certificate from the parties executing the papers, setting forth that they had no defence to the payment of them, and that they could not he sold without their having those certificates, and that he had better have them signed at once by his brothers and father whilst the matter was going on, so that Mr. Brady would not have to go to the country or send to have them signed after having sold them. Mr. Cowen took the certificates with the checks or orders home with him and returned them in four or five days, signed by all the parties. The certificates were brought to me by Mr. Cowen, and I pronounced them properly signed, and gave them to Mr. Brady; and it was done while Mr. Brady held the bonds and mortgages in his own name.” * * *
    The master, in addition to the undisputed matters, found : that the delivery of the certificates by the Cowens was contemporaneous with the receipt of the money by them and was a condition precedent to the consummation of the loan; that the bank had no knowledge of the transaction before October 10th 1870. He decided that the transaction between Brady and the Cowens was usurious; and that the bank as assignee of the securities was in no better condition than Brady, unless it had taken the proper steps to protect itself.
    He further reported :—
    “ No inquiry was made of the Cowens by the bank, at the time of the assignment of the securities, as to whether they had any defence to the whole or any part of the obligation, but it is claimed on the part of the bank that it is ■ properly protected against any defence then existing, by the reception by them of the certificates of no defence, given by the debtors, notwithstanding the fact that they were executed and delivered at the time of the original transaction. The question then presents itself whether the certificates of no defence, given contemporaneously with the execution of a mortgage which is usurious, will avail in the hands of an assignee who makes no inquiry of the debtors of any kind, at the time of the assignment. Bonds are expressly made transferable by an Act of Assembly, and as such are an article of commerce. A man may bonfi fide purchase any security he can at the lowest possible price, and not be liable for the penalties of usury. But by the Act of Assembly the obligor is bound to pay only what is justly due at the date of the assignment, unless the obligee has protected himself by inquiry or notice. * * *

      “ The general rule is that the assignee takes subject to the equities of the assignor. The exception is, where inquiry is made and a defence precluded. Such conduct virtually makes a new contract. The original transaction being usurious, no act of the parties can affect its character as between themselves; to hold otherwise would render void the statute against usury. It is settled that any transaction, however artificial it may be, the effect of which would be an evasion of the statute, may be set aside in so far as it is usurious. The certificates' of no defence were entirely nugatory, so far as James T. Brady & Co. were concerned, had the obligors refused to pay its usury and gave no right to James T. Brady which was not already given by the mortgage. Any right to enforce the usurious contract which the Duquesne Bank might have, cannot be claimed through James T. Brady & Co. The firm not possessing that right, have hot assigned such a right to the bank. To hold that the certificates protected the bank because of their new tradition by James T. Brady to the bank, he not having any right under them, w.ould stamp the instruments with some of the characteristics of negotiable paper, which they do not and cannot possess. The certificates, having been given by the Cowens to James T. Brady & Co., and by Brady transferred to the Duquesne Savings Bank, the bank has no better title than James T. Brady & Co. had. They were not an estoppel in favor of Brady, and it cannot be claimed that by the assignment the assignee takes a better title than James T. Brady had himself. * * * The assignment of the certificates, thereforet, if they are held to work an estoppel, operate with this effect on a new contract to which the Duquesne Bank and the debtors are -the original parties. * * *
    “ Is the bank a boná fide holder, without notice ? Mr. Brady, as president of the bank, was certainly bound by any notice he would receive of a matter affecting its interests. He is a member of its board, and is one of its executive officers ; service upon him would be service upon the bank, and knowledge derived by him from any source, is knowledge by the bank under his care. As a party to the original transaction, he had personal knowledge of the fact that the loan was usurious. The,fact that James T. Brady offered these securities to the Duquesne Bank a short time after they were given by the Cowens, for $30,690, was sufficient to have put the Duquesne Bank on its guard and inquiry. The fact that James T. Brady presented to the bank certificates of no defence dating back to the original transaction,' should have suggested the prudence of an investigation. These circumstances were sufficient to put the bank on inquiry. * * *
    “ This constructive notice the bank certainly had. Positive information would have resulted from inquiry. But in this ease there was also direct notice to the corporation through James T. Brady, its president. The management and government of the bank is effected by its president and board of directors, or by those specially authorized. When a fact, gleaned from any source, is stated before the board by a member of it, and made a subject of conversation during the very transaction, it is impossible to doubt that the bank is to be affected, because knowledge of the fact material to be known is a part of the [res gesta. There cannot be a doubt, therefore, that knowledge imparted to the board by a director at a regular meeting is notice to the. bank. * * * When the mortgages were offered to the bank, the matter was fully and elaborately discussed by the board. * * * The fact that the securities were purchased at three per cent, per annum discount off, taken in connection with the fact that interest was allowed James T. Brady for the short period he held, would have afforded a ready means of ascertainment of facts from James T. Brady himself, and was constructive notice, even if no express notice was given to the bank by James T. Brady & Co., in its computation of the interest. But James T. Brady, when selling the securities for his own benefit, and being president of the bank, should be regarded as agent for the bank in his transactions with it, as well as for it; and as knowledge of the agent is knowledge of the principal, the Duquesne Bank should be regarded as having express notice. * * *
    “ Notice to the president or cashier, or other agent of the bank, is notice to the bank. Had James T. Brady not been a party to the original transaction, but fully aware of its usurious nature, and of the fact that his bank was about to purchase, could it be claimed that the bank had not notice, or that his silence would not affect it ? That he occupied a position in the transaction which was adverse to the bank, cannot relieve it from the consequences of his silence, when the bank has confided to him, as its chief officer, the duty of protecting its interests. As James T. Brady was president of the Duquesne Bank, knowledge by him of the usurious character of the securities was knowledge by the bank. The bank is not therefore an innocent holder without notice. * * *
    £‘ But in case the Duquesne Bank had neither actual or constructive notice of equities, is there, by virtue of the certificates held by it, an estoppel against the debtors and in their favor ? The Duquesne Bank having knowledge of and the relying upon certificates of no defence given to James T. Brady, claims that the debtors are thereby estopped from setting up any defence, or from making any prayer for relief by abatement of the amount of the mortgages, as against the bank. The Oowens had no knowledge of the intention to transfer the securities to the Duquesne Bank, and it cannot therefore be claimed that the certificates were given for the purpose of influencing the bank to purchase. Unless it can be shown that they wilfully misled the Duquesne Savings Bank in •inducing the purchase, the certificates are not an estoppel in favor ■of the bank. * * *

      “ What would be the effect if certificates like those in question •would work an estoppel in favor of an assignee? Under the pressure of his creditors, or of circumstances which were impending, what will a man not do to relieve himself or get further respite ? While the negotiation is pending through which alone the relief can be had, the creditor is generally master of the ■situation, and can impose the hardest and most oppressive terms, because tbe desperate circumstances of tbe debtor would either seem to make it prudent on the part of^the lender, or the opportunity is afforded him, to profit by the borrower’s necessities. If certificates could, as in this case, protect against the consequences of usurious transactions, the precaution, is an easy one, and would soon become the rule among usurers. The statute of May 28th 1858 was designated for the relief and protection of that class of persons whose poverty is their destruction, and who are a prey to their necessities, and should be construed in such a way as to give effect to that intention. Judge Woodward, in 3 Wright 40, speaking of the statute for the recovery of usury, says that ‘ it is entitled to a liberal and beneficial construction, and should be held to encourage great prudence and thoroughness of investigation.’
    “ It is admitted that the certificates were a part of the original transaction; were executed and delivered before the payment of the money, and were demanded as a condition upon which only the money could be obtained. .They must be treated as if included in the mortgage; and how could it be claimed that by such certificates, so inserted that a third party, by an assignment without inquiry, would be in any better position than his assignor to protect himself in a usurious contract?

      “ Throughout this investigation, the statute of 1858 is continually staring us in the face; and so long as it stands, its intention must not be defeated, unless the debtor chooses to give away his rights under it to an assignee in the clearest, most deliberate and voluntary manner.
    “ The master is of opinion, therefore, that the certificates of no defence are no estoppel in favor of the Duquesne Savings Bank, and that the amount due the said bank from the Cowens is the amount of money actually received by them^on said securities, viz., $28,800, with interest, and a decree is suggested in accordance therewith.”
    Exceptions were filed by the defendants to the master’s report.
    After argument, they were overruled and the report confirmed.
    The court (Acheson, P. J.) decreed:—
    “ 1. The joint judgment be reduced to the sum of $28,800, payable September 20th 1878, and bearing annual interest from September 20th 1870.
    “ 2. The judgment against Samuel Cowen be reduced to $7200, payable September 20th 1878, with annual interest from September 20 th 1870.
    “ 3. The judgment against John D. Cowen be reduced to the sum of $8640, payable September 20th 1878, with annual interest from September 20th 1870.
    “4. The judgment against W. H. Cowen be reduced to the sum of f6480, payable September 20th 1878, with interest from September 20th 1870.
    “ 5. That the Duquesne Savings Bank be restrained and enjoined from the collection of any'portion of said judgments or mortgages until they have entered credits reducing the amounts of their liens to the sums above indicated, and an order of cancellation is hereby made to the extent of such reduction.”
    The defendants appealed to the Supreme Court, and assigned the decree for error.

      O. 8. Fetterman and N. P. Fetterman, for appellants. —
    Notice to the president was not notice to the bank. The cashier is the general executive officer to manage its concerns in all things not particularly committed to the directors by the charter, and he is the agent of the corporation, and not of the directors : Bissell v. First National Bank of Franklin, 19 P. F. Smith 419; Bank of the United States v. Davis, 2 Hill 451; National Bank v. Morton, 1 Id. 572; Ins. Co. of Md. v. Ins. Co. of Balt., 10 Maryland 517; U. States Ins. Co. v. Shriver, 3 Md. Ch. 381; Commercial Bank v. Cummings, 24 Pick. 270; Winchester v. Balt. & Susq. R. R., 4 Md. 231. A fair purchase may be made of a bond or note, even at a great discount, without incurring the penalties of usury: Musgrave v. Gibbs, 1 Dallas 217; Wycoff v. Loughead, 2 Id. 92. By delivering the certificates to Brady & Co., the Cowens enabled Brady to sell: and where two innocent persons must suffer, the one whose acts or admissions led to the injury, must bear the loss: Pickard v. Sears, 6 Ad. & Ell. 474. All the essentials of an estoppel are found in this case: Eldred v. Hazlett, 9 Casey 307; Herman on Estoppel, sect. 331: 323, 328, 333-342, 390, 459; Dalzell v. Odell, 3 Hill 219; Rudy v. Wenner, 16 S. & R. 18; Graff v. Pittsburg & Steubenville R. R., 7 Casey 489; Mitchell v. Reed, 9 Cal. 204; White Mount. Bank v. West, 46 Maine 15; Quick v. Thomas, 6 Mich. 76; Carey v. Clark, 13 La. 465; Scott v. Sadler, 2 P. F. Smith 211; Ashton’s Appeal, 23 Id. 153; Chamberlain v. Townsend, 26 Barb. 611; Edgar v. Kline, 6 Barr 327.

      J. W. Ponnan (with whom was D. 8. Wilson), for appellee.—
    The right to a reduction on account of excessive interest could not be waived by a contemporaneous instrument: Bosler v. Rheem, 22 P. F. Smith 54. Nor can a usurious contract be confirmed so as to make it available to the lender: Chamberlain v. McClurg, 8 W. & S. 31. When a fact is stated before the board by a member of it, and made a subject of conversation during the very transaction, the bank will be affected: Bank of Pittsburg v. Whitehead, 10 Watts 402. Notice to the president on any subject is notice to the bank: Morse on Banks and Banking 113; Porter v. Bank of Rutland, 19 Vt. 410; Mechanics’ Bank v. Schaumburg, 38 Mo. 228; Roumage v. Mechanics’ Fire Ins. Co., 1 Green (N. J.) 110; Smith v. South Royalton Bank, 32 Vt. 341; Bank of U. States v. Davis, 2 Hill 451; North River Bank v. Aymar, 3 Id. 262; Louisiana State Bank v. Senecal, 13 Louisiana 525. When a person has sufficient information to lead him to a fact, he shall be deemed cognisant of it: 2 Kent Com. 630; May v. Chapman, 16 M. & W. 355; Maul v. Rider, 9 P. F. Smith 167. The assignee of a bond or mortgage takes it subject to all equities existing between the original parties: Rudy v. Wenner, 16 S. & R. 18; Weaver v. McCorkle, 14 Id. 304; Eldred v. Hazlett, 9 Casey 307. As to estoppel they cited Commonwealth v. Moltz, 10 Barr 527; Clark v. Sission, 22 N. Y. 312; Herman on Estoppel, sect. 445; 2 Smith’s Leading Cases 750; Bigelow on Estoppel 484; Mechanics’ Bank v. N. Y. & N. H. R. R., 13 N. Y. 638; Wilcox v. Howell, 44 Id. 403; Crawford v. Lockwood, 9 How. 547; Knettle v. Newcomb, 31 Barb. 169; Hutchens v. Hibbard, 3 N. Y. 24; Hepburn v. McDowell, 17 S. & R. 383; Crest v. Jack, 3 Watts 238; Hill v. Epley, 7 Casey 334; Alexander v. Kerr, 2 Rawle 83; Brubaker v. Okeson, 12 Casey 522. So long as the negotiation is incomplete, the borrower is the slave of the lender, and is bound to submit to the terms which oppression and his necessities impose upon him. The statute of May 28th 1858 was passed for the benefit of this class of persons, and should be so construed that no contract however framed would hold good, if the ultimate effect of it would be to secure more than the legal rate of interest: Fitzsimons v. Baum, 8 Wright 32; Evans v. Negley, 13 S. & R. 218; Greene v. Tyler, 3 Wright 361.
   The opinion of the court was delivered, January 5th 1874, by

Agnew, J. —

The fact that the judgment and mortgages of the Cowens were usurious is proved beyond a doubt. The Cowens received from Brady & Co. but $28,800 for their judgment in the sum of $40,000, and mortgages to secure the same, due in eight years, with annual interest. The Duquesne Bank, as assignee of Brady & Co., stood in no better position than they, these securities not being negotiable. The bank, however, sets up certificates given by the Cowens to Brady & Co., a part of the machinery to enable them to effectuate the usury, declaring that they have no set-off of defence to the payment of the judgment and mortgages, and that the whole sum is justly due and payable. The bank alleges that the Cowens are estopped by the certificates from setting up the usury. The Cowens in reply prove that the bank itself paid , but $30,690 to Brady & Co. for the debt of $40,000, and allege that it had notice of the fact of usury, and therefore has no equity.

Tbe master finds actual notice to tbe bank, or rather actual knowledge of the usury of Brady & Co. He finds this from a variety of circumstances: the relation of James Brady as president of the bank; the intimacy of Campbell, the treasurer, with the firm of Brady & Co., his frequent visits there; the practice of Brady & Co. in selling their claims to the bank, and the discount at which Brady sold this claim; the testimony of Brady that when the mortgages-were offered by him to the bank, the matter was fully and elaborately discussed in the board of directors, and the hesitation on part of some of the members; his telling them he did not care whether they took the mortgages or not, and their final agreement to purchase at three per cent, per annum discount off, allowing Brady & Co. for the use of the money while they held the mortgages; the price paid by the bank to Brady & Co., $30,690 ; Brady & Co.’s profits, $607.18, and the additional interest paid them, making a profit of about $1000. These are significant facts, making it highly probable the bank knew that Brady & Co. had advanced on these securities a sum less by their profits than the sum paid by the bank. Looking at the relations between Brady and Brady & Co. and the bank, the discussions about the purchase, the difficulty among the members of the board, the amount of the securities, $40,000, the time the debt had to run, and the sum paid by the bank, $30,690, and allowing Brady & Co. for the use of the money while they held the securities, included in a calculation of the profits of Brady & Co., it cannot be believed that the bank supposed for a moment Brady & Co. had advanced to the Cowens the full $40,000. The master has found the knowledge of the bank, and the court has confirmed his finding. We cannot say there was plain mistake in this finding ; indeed the probabilities are with it; and we must take the fact to be true that the bank knew of the sum paid to the Cowens by Brady & Co., and consequently knew of the usury. The defence is one under a statute which lays its hands upon the usury as an illegal act; contrary therefore to equity also; and it becomes the duty of all courts to maintain the law. The bank taking the securities with a knowledge of the usury, it cannot set up the certificates given to Brady & Co. as an estoppel. If by such a device the usury can be upheld, the law may be avoided in a most easy manner.

The decree of the Common Pleas is affirmed, with costs.