author: Agnew, J. WiLiLAMS, J.,

text:
    Gass and others’ Appeal.
    1. A German Reformed congregation and a Lutheran congregation built a church together, in which by their articles of association “ Divine Service ” only was to be held ; for many years there were no meetings in it except for public worship: Held, under the facts in this case, Sabbath Schools were not included in “ Divine Service.’’’
    2. The meaning of “ Divine Service,” like a word of art, is to be determined by the sense in which it was used by the parties.
    3. Courts must interpret written instruments, but they follow the meaning attributed to the terms by those whose custom it is to use them.
    4. "Where a contract may have two interpretations courts will follow that which the parties have put upon it and acted upon.
    5. Two congregations built a church for their joint use in Divine Service; against the protest of one and their articles of association,the other introduced a Sabbath School into the church. Held, that equity had jurisdiction to restrain the latter congregation.
    6. Parties in such case are not governed by the ordinary rules of a tenancy in common.
    January 31st 1873.
    Before Bead, C. J., Agnew, Williams and Merour, JJ. Sharswood, J., at Nisi Prius.
    Appeal from tbe Court of Common Pleas of Northumberland county: In Equity: Of September Term 1872.
    This was a bill filed December 5th 1870, by Joseph Gass and Charles Haas, deacons; Joseph Gass and Philip Benn, elders; and George Keefor, trustee, of the German Beformed Church and Congregation of Lower Augusta, against Joseph Emerick, trustee ; Bev. L. G. Eggers, pastor; and John Sterner, superintendent of Sabbath School; Abraham Sterner and Alexander Zartman, deacons; and Daniel Zartman and Jacob Beck, elders, of the Evangelical Lutheran Church and Congregation of Lower Augusta.
    The object of the bill was to restrain the defendants from using a church building held for both congregations by “ transferring to the said church the Sunday school, or using the same for the purpose of holding therein a Sunday school, or for any other purpose not stipulated in the articles of association.”
    The articles of association were as follows:—
    “ Pursuant to an agreement, the members of the German Be-formed and Evangelical Lutheran churches, in the vicinity of Samuel Lantz’s, Lower Augusta township, Northumberland county, Pennsylvania, assembled together in Mr. Samuel Lantz’s schoolhouse, on the 5th day of June 1847, for the erection of a German Beformed and Evangelical Lutheran church, on the east side of Mr. Michael Arnold’s lot, on the property of Mr. Samuel Lantz, now the property of Mr. John Sterner. It was agreed to erect a brick building, 40 by 35 feet, at one side, with a gallery. The members came together again, and after, on each side, church councils were chosen and were consecrated by the ministers, they formed themselves into congregations, and on the 8th of April 1848, agreed on the following articles:—
    “Art. 1. The church to be erected shall be and remain a German Reformed and Evangelical Lutheran church, under the name of ‘Emanuel’s Church.’
    “Art. 2. No preacher can serve as pastor of this church who is not a member of the German Reformed or Evangelical Lutheran Synod, and a supporter of the so-called old measures.
    “Art. 3. It shall be allowed to any member of both congregations, in case of a'funeral, to choose the preacher, and it shall be allowed the preacher to deliver the funeral sermon in the church.
    “Art. 4. If any one, who is no member of the congregation, desires to have his dead buried in the burying-ground, he shall always ask permission of the trustees, and it shall then be allowed to each minister, of good standing, to deliver the funeral sermon in the church.
    “ Art. 5. Each congregation shall elect its own preacher, by a majority of the male members who are present.
    “Art. 10. No one can be a member of this congregation who does not subscribe to this canon law.
    “Art. 11. The preachers of this congregation, if required by the church council, must subscribe to this canon law.
    “ Art. 12. This canon law shall be read at least once a year, by the minister in charge.
    “ Art. 13. Each congregation shall have equal right to the property of the church, and each pastor shall so arrange his divine service, as not to interfere with the pastor of the other denomination.
    “ Art. 15. It shall be allowed to hold divine service in two languages, in English and German ; but German divine service shall be held, from time to time, as long as there are four members who desire it.”
    The bill set out:—
    1. The articles of association, and averred that by their stipulations the church “ was to be used by each congregation for Divine Service.”

    2. “ Divine Service,” at the time of the articles, was and always since had been understood to be “ the regular preaching service of the respective congregations.”
    3. In addition to the articles, it was agreed at the time of building that the church was not to be used by either congregation for Sunday Schools or any purposes, except funeral services and the regular preaching services.
    4. The practice, for a long time after the church was erected, proved that only the regular preaching services of the- church were intended by the term “ Divine Service.”
    5. Until recently the church had never been opened or used for other purposes than those above named; the Sunday Schools were held in a school-house near the church, and upon the supposition that only the regular services of preaching were to be-held in the church, the citizens built, and afterwards repainted, papered and otherwise improved the interior of the church.
    6. John Sterner, a defendant, “ in violation of the said usage, understanding and agreement, has transferred his Sabbath School, or the Sabbath School of the Lutheran congregation into the church, and against the consent, and in opposition to the protests of the German Reformed congregation, and the covenants and well-established uses to which the said church had been dedicated and used.”
    7. Averred damage by the children of the school bringing dirt into the church, defacing and otherwise injuring the church, and making it in a great degree unfit for holding the regular “ Divine Service,” for which it was intended.
    8. The defendants, after notice to cease the use of the church for Sabbath Schools, continued to so use it, “to great annoyance, damage and inconvenience of the plaintiffs, and of the German Reformed Church and congregation.”
    The prayer was for an injunction to restrain the defendants as above stated, and for further relief.
    The defendants answered, that by virtue of the articles of association between the above congregations, the Lutherans have the right to hold this Sabbath School in the said church, providing that they will not interfere with the German Reformed Sabbath Services. That Divine or God’s Service, in accordance with the translation from the German into the English, does include Sabbath Schools.
    The ease was referred to L. W. Ease as examiner and master.
    The articles of association were in the German language; the word which was translated “ Divine Service ” was “ Gottesdienst.”
    For the plaintiffs: J. J. Reimensnyder testified that in his opinion the word “includes all that belongs to the preaching of a sermon, such as singing and prayer, reading of the text, &c., * * * I don’t think that the word ‘ Gfottesdienst ’ could be translated literally ‘Public Worship.’ From the reading of the 18th article I would say the words ‘ Divine Service ’ in it meant preaching.”

    Philip Renn testified: “ The understanding at the time this canon law was signed was nothing very particularly but that the church was to be used by both congregations, so as as not to interfere with. the regular times for preaching of each, except one thing; there was nothing else to go on but preaching, and that is what I call ‘Divine Service.’ Nothing said at the time about Sunday Schools. None in existence in the county at the time to my knowledge. It was talked over, and understood that there were to be no prayer meetings; no night meetings to be held in the church; nothing to he held in the church hut preaching; it was considered catechising was a part of the Divine Service, and it has been held ever since, and this was stipulated at the time to be held in the church in both languages. I think the people put the construction upon the words ‘ Divine Service ’ that it was preaching service. This was never disputed until about two years ago, that the preaching service was the only service to be held in the church. An effort was then made to put a Sunday School in the church; both congregations objected because the church was not built for that purpose. The effort was then abandoned, and when this last effort was made the Lutheran congregation put their Sunday School in against the protest of the German Reformed congregation.”
    There was other evidence on behalf of the plaintiffs corroborating the foregoing as to the understanding of the parties and the practice in the use of the church.
    The defendants called Rev. S. J. Milliken, a Presbyterian minister, who testified that he could not read the German language; “ In the more extensive use of the, term, ‘ Divine Service’ includes the performance of any duty running out of our obligations to God; in the more restricted sense, acts of religious worship. My translation of £Divine Service' or ‘ Grod Service’ would include Sabbath Schools; I do not think the service of the Sabbath School conducted by any Evangelical Church would be in violation of the words ‘ Divine or God Service.”
    Rev. Mr. Hemperly, a minister of the Lutheran church, testified, that he had some understanding of the German. “ I understand by £ Divine or Grod Service ’ all the exercises of a worshipful character practised in the denominations. A Sabbath School would come within the above definition most emphatically.”
    The defendants gave evidence that there had been no injury. done by the scholars to the church since the school went into the building, and that regulations had been made by the authorities of the school to prevent injury.
    The master reported; * * * !
    ££ The bill and evidence in the case presented substantially the following state of facts :
    ££ 1. That in the years 1847 and 1848, the German Reformed and Evangelical Lutheran congregations of Lower Augusta erected a church under the name of Emanuel’s Church, each congregation having an equal right of property therein.
    ££ 2. That each congregation was to regulate its divine service and church government in accordance with the articles of association between the two congregations, dated April 8th 1848.
    ££ 3. That divine service only was to be held in the said church. Each congregation so to arrange its divine service as not to interfere with that of the other.
    “ 4. That by the common understanding of both congregations no meetings other than those for divine service could be held in said church.
    “ 5. That funerals and funeral services, by members of both congregations, in the said church, were a right reserved to the members of each respectively, and to those who were not members by asking the consent of both congregations.
    “ 6. That for a period of over twenty years no other meetings than those for public worship, or preaching the Gospel, were held in the said church.
    “ 7. That a Union Sabbath School, organized and kept up by both congregations, was for á number of years held in the schoolhouse close by the said church.
    “ 8. That the Lutheran congregation a short time ago withdrew from the said Union Sabbath School, and established a Sabbath School of their own, under Lutheran officers, in the audience-room of the said church.
    “ 9. That the dividing of said Union Sabbath School, and the establishing of a Lutheran Sabbath School in said church, was done in opposition to and without the consent of the German Reformed congregation.
    “ The difficulty between the two congregations is caused by the respondents holding a Sabbath School in the church, the property of both congregations, in opposition to the protests of the complainants, and as they allege in violation of the article of agreement under which it was built.
    “ The case seems in some measure to rest upon the construction given the words, ‘Divine Service.’ * * * Divine Service, from information derived from the testimony, and as understood by the master, signifies a special service purely of a religious character, dedicated to God, such as singing and prayer, preaching the gospel, praise and adoration, thanksgiving and the like, and would also, in the master’s opinion, include Sabbath Schools, properly conducted, singing and prayer, praise and adoration, thanksgiving, &c., are a part of the services in these schools. The young are taught the Scriptures and other religious instruction, and in this way early in life, lead to praise, adore and worship God. Any service of a religious character having for its object the promotion of God’s Holy cause, would be divine service, and the term in its broad and most comprehensive sense would certainly include the Sabbath Schools of the present day.
    “ But in what sense did members of these two congregations, upwards of twenty years ago, at the time the articles of association were entered into, hold divine service to.be ? Sabbath Schools, as it appears from the testimony, were not in existence in that neighborhood, nor even thought of at that time. Surely the strong inference is, that the only service contemplated, talked over and agreed upon by them, was ‘a ‘preaching service;’ and this inference is made doubly strong from the fact, that from that time up to within a year or two of the present, both congregations have rigidly adhered to this view of the case, always maintaining that preaching the gospel only could be allowed in the church. Singing schools, prayer meetings and the like, were forbidden the use of the church. Only two years ago an attempt to hold a Sabbath School in this church failed upon the ground that it was unauthorized by the articles of association, a- position taken at that time by members of both congregations. I am satisfied from the articles of association and the testimony in the cause, that preaching the gospel only, was what was understood by the members of both congregations, to be the divine service, mentioned in the articles of association at the time they were written; and it seems to me, therefore, that they must be binding upon the parties now, in the sense they were then understood, they were adopted as their ‘ canon law,’ and the pastors in charge enjoined to read them at least once a year to their respective congregations. Trustees, one from each of the said congregations, were to be elected annually, in whose care the church property was intrusted. The choosing of their respective pastors, deacons, elders, terms of preaching, stipulating especially for the holding of divine service in both the English and German language, are all regulated by these articles of association, or ‘ canon law.’ • .
    “ The master therefore, after a careful consideration of all the testimony in the cause, is of the opinion that the defendants (the Lutheran congregation) can claim no right under the articles of association, nor from the established uses of the church, to hold a Sabbath School within the body of said church, and therefore recommends an order or decree restraining the respondents from using the said church for the purpose of holding a Sabbath School therein.”
    Exceptions were filed to the report of the master: the court (Rockefeller, P. J.) sustained the exceptions and decreed that the bill be dismissed with costs.
    The plaintiffs appealed to the Supreme Court and assigned the decree of the court for error.

      S. P. Wolverton (with whom was T. S. Purdy}, for appellants.

      G. W. Ziegler, for appellees.
   The opinion of the court was delivered, March 27th 1873, by

Agnew, J.

This bill on behalf of a German Reformed con-

gregation, was to enjoin an Evangelical Lutheran congregation from holding Sunday schools in the church building. These congregations built a church for common use, and on the 8th of April 1848, adopted a “ canon law,” as they called it, for the government of its use by the two bodies. By the first article of this canon, the church was to be and remain a German Reformed and Evangelical Lutheran church, under the name of' “ Emanuel’s Church.” The third and fourth articles provide for funerals and burials in the burial-ground, from which it appears a graveyard was to be used in connection with the church. The thirteenth declares, that each congregation shall have equal right to the church property, and each pastor shall so arrange his divine service, as not to interfere with the pastor of the other denomination. The fifteenth article provides that it shall be allowed to hold divine service in two languages, in English and German.

The master finds, that divine service only was to be held in the church, and that by common understanding of both congregations, no meetings other than those for divine service could be held in it, and that, for a period of over twenty years, no other than meetings for public worship or preaching the Gospel were held there ; that a Union Sunday school, organized and kept up by the congregations, was held for many years in á school-house close by the church. A short time ago, the Lutheran congregation withdrew from the Union Sunday school, and established one of their own in the audience-room of the church, in opposition to, and without the consent of the German Reformed congregation.

This bill is to prevent this unauthorized and continued use of the audience-room for the Sunday school. The master finds, that Sunday schools were not in existence or thought of in this neighborhood at the time of the union of these congregations, and adoption of their rules; that both congregations understood, and rigidly adhered to the understanding, that a “ preaching service ” only was to be maintained in the church, and that singing schools, prayer meetings, and the like, were forbidden to be held there. He concludes by saying, he is satisfied, from the articles of association, and the testimony in the cause, the preaching of the gospel only was understood by the members of both congregations to be the “ divine service ” mentioned in th,e articles. In the-court below, the controversy was not upon the facts reported, but upon the meaning of the terms “divine service;” the defendants holding that they embraced Sabbath schools. The witnesses agree, that the German word G-ottesdienst, used in the articles of union,means in English, divine service ; and the court below decided that this included Sunday-school service. That prayer and praise, and, indeed, oral as well as written instruction in religious matters, by laymen, are used in Sunday-school service, is true, and in a general sense it may be .said to be divine service. Indeed, the Reverend Samuel J. Milliken did say, in his testimony, that the more extensive use of the term divine service, includes the performance of any duty arising out of our obligations to God; but in the more restricted sense it is used to signify acts of religious worship. This would give two significations to these words. Like words of art, the sense in which they have been used by the parties must, therefore, be sought for. It is the duty of courts to interpret the language of written instruments; but in doing this they always follow the meaning attributed to the terms by those whose custom it is to use them. Therefore, when a contract is capable of two different interpretations, that which the parties themselves have always put upon it, and acted upon, especially as here for a long series of years, a court will follow, because it is the true intent and meaning of the parties which are to be sought for in the language they use. However right it may be to view, as the court did, the Sunday school as a most useful institution in instructing youth in the knowledge and worship of God, and their duties to mankind, this praiseworthy view cannot change a written contract. We cannot engraft on a contract for one thing an agree-' ment for a different thing, though the fruit of the scion be even better than that of the natural stock.

These congregations never so understood or acted upon their agreement of union. They built their church for divine worship, by prayer, praise, and the preaching of God’s word. Its use was to be congregational worship, not school instruction. Their worship was to be led by pastors, who should regulate their appointments in due regard to mutual harmony, and was not to be the instruction of youth, even though part of it were in divine things, led by individual laymen. There are reasons, also,.why a chamber or audience-room, dedicated to public congregational worship, should not be thrown open to thoughtless, giddy, sometimes vicious youths, to deface and soil it. We think the court erred in deciding the case according to the general meaning of the words “divine service,” as testified to by some of the witnesses, instead of confining their signification to the sense in which the congregations understood it when they entered into the agreement, and afterwards practised upon it.

A doubt has been suggested as to the jurisdiction of the court in such a case, but, we think, without a solid ground. As unincorporated associations, the parties fall directly within the fifth equity head of the Act of 16th June 1886, conferring on the Supreme and Common Pleas Courts jurisdiction in the supervision and control of unincorporated societies or associations and partnerships : Foley v. Tovey, 4 P. F. Smith 130, is in point, opinion by the present Chief Justice. The number and relations of these parties, and the subject and nature of the injury, also, make the case one for the peculiar jurisdiction of equity. The number of the members of each congregation, and the uncertainty in their identity and connection with the congregation, make a remedy at law neither convenient nor certain. There would be some difficulty in moulding a common-law action to remedy the perverted use. The subject of the use is also peculiar. Such congregations are not governed by the ordinary rules of tenancy in oommon. It has been decided there can be no partition of a church or a graveyard held by two congregations, precisely as these two hold their property: Brown v. The Lutheran Church, 11 Harris 495. The language of Woodward, J., is forcible and just, in which he shows the sacrilegious character of a proceeding that would sell the altar and the graves; that a church cannot be divided; and that the policy of the state has always been to protect the resting-places of tbe dead. A sale is the only mode of partition in such a case; and what, he asks, would these graves, of inestimable value to surviving relatives, fetch in the market ? This, case, therefore, does not, on this ground, fall within the principle of North Pennsylvania Coal Company v. Snowden, 6 Wright 488.

The nature of the injury, too, is to be noticed. It is not an act of wrong or injury to the property itself, nor is it an ouster from possession, or wrongful withholding of the possession by one congregation from the other, but a mere perversion of its use; and here again it differs from The North Pennsylvania Coal Company v. Snowden, and from Tillmes v. Marsh, 17 P. F. Smith 507. In those cases the bills were-what is termed an ejectment bill — a bill to obtain possession and enforce rights under a legal title. Here the injury consists in a perversion of the right of the congregation, a misuse of its privileges under the articles of union, and it is continuing in its nature. It involves a series of injurious acts of misuse, and therefore can have no adequate remedy at law, if an action for damages could be conveniently sustained. This brings the case directly within the letter and spirit of the fifth head of equity, in the second branch of powers contained in the Act of 1836, to wit: “The prevention or restraint of the commission or continuance of acts contrary to law, and prejudicial to the interests of the community, or the rights of individuals.” The congregation defendant is not only an unincorporated association, and thus within the control of the court, but the congregation plaintiff is composed of individuals, whose rights are prejudiced by the defendants, and therefore entitled to the exercise of the restraining power of the court. In either way jurisdiction attaches. The right of the plaintiffs is not disputed, which takes the case out of the rule that the court will not enjoin upon a disputed title till it is settled at law. It is only the illegal acts of the defendants that are the subject of dispute, and they are clearly contrary to law, as we interpret the agreement of union. The disposition of this court has been not to deal with these equity powers in a narrow spirit”, but to make them serve all the purposes of justice to which they can be made applicable. In Wesley Church v. Moore, 10 Barr 280, Chief Justice Gibson remarked, that “the equitable jurisdiction conferred by these statutes is a valuable, indeed indispensable one, and ought to be extended by every interpretation of which the words are susceptible.” The same opinion has found utterance in subsequent cases: Kirkpatrick v. McDonald, 1 Jones 393; Yard v. Patton, 1 Harris 282.

The actual exercise of this valuable power of restraint has been sustained in numerous and analogous cases, which may be briefly noticed, premising that in the same clause is found the supervision and control of partnerships following directly after the supervision and control of unincorporated societies and associations, subjects analogous in the unincorporated membership, and the close and confidential relations of the members in each class. Thus in Stockdale v. Ullery, 1 Wright 486, a partner was restrained from pawning or pledging the notes of the firm for his own debts. So a partner may be restrained from doing acts prejudicial to the estate of a deceased partner: Holden’s Admin’r v. McMakin, 1 Pars. 284. And a person may be restrained from doing business contrary to a lawful agreement not to do so: Palmer v. Graham, 1 Pars. 476. So to restrain the use of a party-wall before payment of a moiety of the cost: Sutcliff v. Isaacs, 1 Pars. 494. To prevent the holder of a legal- title from conveying it away contrary to equity: O’Neil v. Hamilton, 8 Wright 18. To restrain associates from denying the right of one chosen by a publishing company as the editor of a paper, and preventing his publication of it: Peacock v. Cummings, 10 Wright 434. To prevent a usurpation of power by a portion of a body which should be a unit, as the Common Council of Philadelphia: Kerr v. Trego, 11 Wright 292. To restrain an unlawful sale under execution of the property of the wife for the debt of the husband: Lyon’s Appeal, 11 P. F. Smith 15. Without further citation, Kisor’s Appeal, 12 P. F. Smith 428, may be instanced as a case in point. There a deed was made of a church property to trustees, for the use of two congregations, with a provision for division in a certain manner, if conducive to the interests of the parties. One congregation took exclusive possession. Held to be a dispute between members of an unincorporated society in relation to their rights and privileges, and not merely as tenants in common of real estate, and equity had jurisdiction to restore the excluded party to their rights. Sutter v. Trustees of First Reformed Dutch Church, 6 Wright 503, is also an authority on this point. The decree of the court below, dismissing the bill, is therefore reversed, and the bill restored, and report of the master confirmed, and it is hereby ordered and decreed, that the defendants named in the bill of the plaintiffs, be enjoined and restrained perpetually from using the said church described in the bill, for the purpose of holding Sunday or Sabbath schools therein, and that the defendants pay the costs.

WiLiLAMS, J.,

dissenting. — I concur in the construction given to the articles or canons in this ease, but I dissent from the decree on the ground that the evidence does not show that any such injury has arisen, or is likely to arise from the act complained of, as warrants the interposition of a court of equity to restrain it by injunction.


source: Caselaw Access Project

author: Williams, J.

license: Public Domain

text:
    Vought versus Sober.
    1. Y ought sued Sober before a justice on anote; both parties appeared on the return-day and the case was continued on the application of defendant: parties again appeared and by “common consent” continued until May 7th, when, plaintiff not appearing, the justice entered “judgment in favor of the defendant by nonsuit.” Held not to be a judgment on the merits nor a bar to another action.
    2. The failure of plaintiff to appear on the day of continuance was the same as if he had failed to appear at the return.
    3. Act of March 20th 1810, sect. 6, authorizes a justice to nonsuit a plaintiff for failure to appear on a continuance.
    January 31st 1873.
    Before Bead, C. J., Agnew, Williams and Mercur, JJ. Sharswood, J., at Nisi Prius.
    Error to the Court of Common Pleas of Northumberland county: Of September Term, No 23.
    This was an action of debt, commenced October 29th 1868, by John Nought against Isaac J. Sober. The cause of action was this note:—
    “100
    Six months after date, for value received, I promise to pay to the order of Wm. M. Ellis one hundred dollars, without defalcation or stay of execution.
    Dated, Paxinos, June 8th 1867.
    Isaac J. Sober.
    Endorsed — Wm. M. Ellis.”
    A suit on the same note had been previously instituted before a justice of the peace; the following are the docket entries in the case:—
    “John Nought v. Isaac J. Sober. Summons issued April 7th 1868, returnable April 16th 1868, at 4 o’clock p. m. And now, April 16th, 4 p. M., plaintiff appears by his attorney, Greo. D. Haughawout. Defendant present. Plaintiff claims, by his attorney, on note given by defendant to Wm. M. Ellis, and by him transferred to John Nought, for $100. Defendant denies signature and asks contihuance. Plaintiff grants it. Continued until Saturday, April 21st, at 1 o’clock p. M. And now, April 25th, parties appear. Plaintiff’s witness not present. By common consent agreed that suit be continued until May 7th, at 7 P. m. And now, May 7th, 7 P. M., defendant appears. Plaintiff not appearing, defendant asks and justice grants nonsuit; judgment in favor of defendant by nonsuit, plaintiff for costs of suit, -and $1 for defendant’s reasonable costs and trouble in attending the suit. Plaintiff appeals. Transcript given May 22d 1868.”
    The case was tried March 28th 1872, before Rockefeller, P. J.
    The plaintiff gave the note in evidence with some testimony to support it, and rested.
    The defendant then gave in evidence the foregoing docket entries of the justice and proved that the suit was on the same note.
    The justice also testified that the defendant was called by the plaintiff before him and examined as a witness “ in reference to this suit. He was examined pretty fully about the merits of this note. This was after the case Ivas opened on the first appearance of the parties. The examination was with reference to the signature; the defendant said he never signed the note. The amount claimed was $100.”
    The court charged the jury that if they believed from the evidence that former suit before Joseph Ramsey, Esq., a justice of the peace, was for the same cause of action, that is to say, on the same note given in evidence by the plaintiff in this case; that the parties, both plaintiff and defendant, having once appeared, as appears from the transcript of the justice and the other evidence in the ease, and the plaintiff having made his claim for one hundred dollars, the amount of the face or principal of the note only, before the said justice, which was denied by the defendant, the justice of the peace afterwards had no right to enter a judgment of non-suit against the plaintiff, and that he having done so, the effect of it was a judgment in favor of the defendant, from which the plaintiff’s only remedy was by an appeal, and their verdict should be for the defendant.
    The verdict was for the defendant. The plaintiff took a writ of error and assigned the charge of the court for eiwor.

      L. H. iTfflse (with whom was S. P. Wolverton), for plaintiff in error,
    cited Act of March 20th 1810, sect. 6, 1 Br. Purd. 852, pl. 51; Haws v. Tiernan, 3 P. F. Smith 193; Carmony v. Hoober, 5 Barr 307 ; Fisher v. Longecker, 8 Id. 410.

      W. A. Sober, for defendant in error,
    cited Gould v. Crawford, 2 Barr 89; Lawver v. Walls, 5 Harris 75; Haws v. Tiernan, 3 P. F. Smith 193.
   The opinion of the court was delivered, May 17th 1873, by

Williams, J.

The judgment of nonsuit rendered by the justice in the previous suit, brought on the same note, is no bar to the action in this case. It was not a judgment on the merits, after-hearing the proofs and allegations of the parties, but a judgment of nonsuit in default of the plaintiff’s appearance on the day to which the hearing of the case had been continued. It is immaterial that the plaintiff appeared by attorney on the return-day of the summons, if he* was guilty of such subsequent neglect as authorized the judgment. It was as much his duty to appear on the day to which the hearing'of the case was adjourned, as to appear on the return-day of the writ; and for his default in not appearing, no judgment except that of nonsuit could be properly rendered against him. Why then should it be regarded as final and conclusive of the rights of the parties ? It was not rendered after hearing their proofs and allegations, as was the judgment of nonsuit in Crawford v. Gould, 2 Barr 89, whjch was consequently held to be final, regardless of its form; nor was it entered after the appearance of the parties on hearing, as in Lawver v. Walls, 5 Harris 75, because the plaintiff was not able to substantiate his claim. If it had been, then it might be regarded as equivalent to a judgment that the plaintiff had no cause of action. But it was, as the docket entries show, a judgment of nonsuit in default of the plaintiff’s appearance; and in his absence no other judgment could be rightfully entered against him. It is conceded that if the judgment had been rendered in default of the plaintiff’s appearance on the return-day of the writ, it would not be conclusive of the rights of the parties. Why then should it be when entered in default of his appearance on the day to which the hearing was continued ? The default in the one ease is the same as in the other; why then should not the judgment be the same ? It would be a narrow construction of the act to hold, if the plaintiff appears on the return of the writ and the hearing of the case is continued to a subsequent day, that the justice has no power to enter a judgment of nonsuit against him under its provisions, if he fails, to appear at the time appointed for the hearing; and it would be a harsh construction to hold that a judgment of nonsuit against the plaintiff, that such default is conclusive of the rights of the parties and a bar to any subsequent suit for the same cause of action.

The act is susceptible of a more reasonable construction. It undoubtedly authorizes the justice to give judgment against the plaintiff by nonsuit in default of his appearance either on the day appointed by the summons, or on any subsequent day to which the hearing may be continued. The justice, therefore, had power to enter the judgment of nonsuit, and its only effeet was to put an end to the action without concluding the rights of the parties. It follows that the court below erred in charging the jury that the parties having once appeared, the justice of the peace afterwards had no right to enter a judgment of nonsuit against the plaintiff, and that, having done so, the effect of it was a judgment in favor of the defendant, from which the plaintiff’s only remedy was by an appeal, and their verdict should be for the defendant.

Judgment reversed, and a venire de novo awarded.


author: Agnew, J.

text:
    McNinch and Wife versus Trego.
    1. J. and E., partners, purchased two lots which were paid for by firm goods. The deed was made to I. He, his widow and a minor child, continued in possession for more than seven years: and the widow made improvements with the knowledge of E., who afterwards recovered in ejectment against a tenant of the child. The child brought ejectment against E. Held, that without an acknowledgment in writing of a trust in E., or notice of his claim, the limitation in the Act of April 22d 1856, sect. 6, barred E., although in possession at the issuing of the writ.
    2. When the cestui que trust is in possession during the running of the statute, the limitation does not apply, the possession being a continued claim of the trust.
    3. Clarke v. Trindle, 2 P. P. Smith 492, recognised.
    January 81st 1873.
    Before Reap, Oi J., Agnew, Williams and Mercur, JJ. Sharswoop, J., at Nisi Prius.
    Error to the Court of Common Pleas of Northumberland county: No. 19, of September Term 1872.
    This was an action of ejectment, brought October 23d 1865, by Marian Trego, by her next friend, &c., against E. Skiles Trego for a house and lot in Milton, Northumberland county, being the westermost of the two lots hereafter mentioned. During the pendency of the case the plaintiff having attained age, and intermarried with William McNinch, the record was amended by inserting the names of William McNinch and Marian his wife as plaintiffs.
    The case had been before tried, and resulted in a verdict for the plaintiffs ; the judgment having been reversed by the Supreme Court it was tried the second time, March 18th 1872, before Rockefeller, P. J.
    The title to the premises in dispute in 1845 was in Dr. William McCleery.
    The plaintiffs gave in evidence deed dated February 1st 1850, from McCleery to Jacob K. Trego for two lots of ground, Nos. 4 and 5 in McOleery’s addition to Milton, for the consideration of $500, recorded June 22d 1853. Deed for the same lots dated March 25th 1850, from Jacob K. Trego to Eli Trego, his father, for the consideration of $1500, recorded June 22d 1853. Deed for same lots dated April 9th 1850, Eli Trego to Elizabeth Trego, wife of Jacob K. Trego, consideration “ natural love and affection,” recorded June 22d 1853. Will of Elizabeth Trego, dated March 1st, and codicil dated March 20th 1858, proved June 29th 1858, devising to her daughter Marian (plaintiff) the interest of all testatrix’s real estate till she arrived at twenty-one years, and then the whole of her real estate in fee
    The plaintiffs here rested.
    The defendant gave evidence by A. J. Chapin that Jacob Trego and the defendant were in partnership as foundrymen in 1845 under the firm name of E. S. Trego & Co.; that about that time Jacob Trego told witness he had purchased the two lots of Dr. McCleery ; he intended to build on one, and the other he intended for the defendant; Jacob built on the one lot; he was then in feeble health; defendant had lived on the western lot about ten years.
    There was evidence by a number of other witnesses of a similar character.
    There was evidence also that Jacob principally kept the books of the firm, the defendant having access to them; Jacob said the houses were to be built principally out of the foundry; McCleery got castings from the foundry in payment of the purchase-money of the lots; the lots were paid for by castings.
    Defendant gave evidence for the purpose of showing that the conveyance to Eli Trego, the father, was not boná, fide, but for the purpose of defrauding the defendant and the creditors of'Jacob. Jacob died in June 1853.
    He gave evidence that Rebecca Caldwell rented the property from Elizabeth Trego, the widow of Jacob Trego, and occupied it under her in 1858 and 1859. In 1859 the defendant brought an ejectment for the lot against Mrs. Caldwell, in, which she alone defended; the attorneys who appeared for her by leave of the court withdrew their appearance, and on “ an agreement filed April 3d 1860,” judgment was entered for the plaintiff in that suit; from that time the defendant had been in possession.
    He gave in evidence the account of McCleery with the firm of E. S. Trego & Co; the charges amounted to $1105.10; the credits were to the same amount; one of them was “by J. K. Trego, $500.”
    The defendant, who was examined as a witness, testified that “Dr. McCleery paid these two lots on that account.”
    In rebuttal the plaintiffs gave evidence by Mrs. Caldwell that she had rented the house whilst she lived in it from Mrs. Trego, the widow.
    Mary Critzer testified that she lived with Jacob for eighteen months from the fall of 1851; there was no partition fence between the lots; Jacob used the western lot the same as he did the other; the defendant had not used the lot during that time.
    Peter O. Campell testified that he built a house for Mrs. Trego on the premises in 1853, and completed it in 1854; the defendant lived near the lot during the time ; it was built against the house of Jacob ; on the west end of it; the building was paid for by Mrs. Trego; the lintels for the house were of iron, and were cast by the defendant, he knowing that they were for the house; witness told defendant he was going to build an addition to Mrs. Trego’s house; defendant was there frequently whilst witness was building the house; defendant could not come out of his house without seeing the building going up; Mrs. Trego moved into the house in the fall of 1854.
    There was additional evidence from a number of witnesses that the defendant knew of the building going up ; that when he was told that he should have given notice to Mrs. Trego, he replied that he did not know then that he had title. Also, that Mrs. Trego had occupied the house by herself and tenants up to her death; and Mrs. McNinch by tenants under her guardian until the recovery against Mrs. Caldwell in 1860.
    They gave in evidence the accounts of the defendant and Jacob Trego from the firm books.
    The balance against the defendant was $3850.61. The balance against Jacob was $3352.63. In his account under date of June 13th 1851, was this charge: “ To William McCleery, $500.”
    The plaintiffs’ first point was:—
    The plaintiffs have shown a perfect legal title to the lot in dispute, that the deed from Dr. William McCleery to Jacob K. Trego, that from. Jacob K. Trego and wife to Eli Trego, and that from • Eli Trego and wife to Mrs. Elizabeth Trego were put upon record in the recorder’s office in Northumberland county, on the 22d of June 1853, and if the jury believe that Mrs. Elizabeth Trego, in August or September 1853, entered upon the lot in dispute, and made valuable improvements upon the same, and kept possession thereof from that time until her death in 1858, and that after her death the lot remained in possession of Rebecca Caldwell, to whom she had leased in her lifetime, as the tenant of her daughter Marian, until the 21st day of March 1859, the date of the writ of ejectment by Eli S. Trego against Mrs. Caldwell, without any title or interest in the said Eli S. Trego having been acknowledged to exist by the said Elizabeth at any time during her said possession, or by any guardian of the said Marian, after the death of her said mother, then the 6th section of the Act of the 22d of April 1856, prevents the defendant from setting up his alleged equitable title against the said legal title of the plaintiff, Marian McNinch, and the verdict of the jury should be in favor of the plaintiffs.
    The court answered: “We cannot answer this point as requested. The plaintiffs have shown a perfect legal title to the lot in dispute; the deed of Dr. William McCleery to Jacob K. Trego, that from Jacob K. Trego and wife to Eli Trego, and that from Eli Trego and wife to Mrs. Elizabeth Trego were put upon record in the recorder’s office of Northumberland county, on the 22d of June 1853; but under the evidence in this cause we cannot charge ‘ that if the jury believe that Mrs. Elizabeth Trego, in August or September 1853, entered upon the lot in dispute, and made valuable improvements upon the same, and kept possession thereof from that time until her death, in 1858, and that after her death the lot remained in possession of Rebecca Caldwell, to whom she had leased in her lifetime, as the tenant of her daughter Marian, until the 21st day of March 1859, the date of tie writ of ejectment by Eli S. Trego against Mrs. Caldwell, without any title or interest in the said Eli S. Trego having been acknowledged to exist by the said Elizabeth at any time during her said possession, or by any guardian of the said Marian, after the death of her said mother, then the 6th section of the Act of the 22d of April 1856, prevents the defendant from setting up his alleged equitable title against the said legal title of the plaintiff, Marian McNinch, and the verdict of the jury should be in favor of the plaintiffs.’
    “ The said 6th section of the Act of the 22d of April 1856, provides that ‘No right of entry shall accrue, or action be maintained for a specific performance of any contract for the sale of any real estate, or for damages for non-compliance with any such contract, or to enforce any equity of redemption after re-entry made for any condition broken, or to enforce any implied or resulting trust as to realty, but within five years after such contract was made, or such equity or trust accrued, with the right of entry, unless such contract shall give a longer time for its performance, or there has leen in part a substantial performance, or such contract, equity of redemption or trust shall have been acknowledged in writing to subsist by the party to be charged therewith within the same period — provided, &c.: Purd. Dig. 654-5, pi. 13. I instruct you that if you find from all the evidence in the cause that in 1846 the two brothers E. Skiles Trego and Jacob K. Trego were partners, that they purchased from Dr. William Mc-Cleery -two lots of ground adjoining each other, for which he was to receive from the firm, and was subsequently paid, five hundred dollars in work at their foundry — that Jacob K. Trego immediately took possession of the eastern lot, and E. Skiles Trego of the western lot of the two thus purchased — that these lots were paid for by castings out of the foundry, that Jacob K. Trego, without the knowledge of E. Skiles Trego, took the deed for the two lots, then the said E. Skiles Trego became the equitable owner of the western lot (being the lot in dispute in this case), and of a resulting trust to him for the same. This was so decided when this case was before the Supreme Court, in my opinion, and I so charge you that if you find the facts as here stated, there has been in part a substantial performance, within the meaning of the said 6th section of said Act of Assembly, and the mere fact that Mrs. Elizabeth Trego, after the death of her husband, Jacob K. Trego, took possession and held it from 1853 to 1858, and by her tenant from that time to the 21st of March 1859, will not prevent the defendant setting up his equitable title against the legal title of the plaintiffs.”
    There were other points submitted by each party, not necessary to notice here.
    The jury found a verdict for the defendant. The plaintiffs took out a writ of .error and, with others, assigned for error the answer to their first point.

      J. W. Qomly (with whom was J. W. Brown), for plaintiffs in error,
    referred to Act of April 22d 1856, sect. 6, Pamph. L. 532, 2 Br. Purd. 930, pl. 14; Rider v. Maule, 10 Wright 376.

      S. P. Wolverton and Q-. P. Miller (with whom was J. Porter), for defendant in error.
    The limitation under the Act .of 1856, in relation to a parol trust does not apply to cestui que trust in possession : Smith v. Tome, 18 P. F. Smith 158; Clark v. Trindle, 2 Id. 492; Richards v. Elwell, 12 Wright 361.
   The opinion of the court was delivered, March 17th 1873, by

Agnew, J.

When this case was here before, the only question was whether under the facts then in evidence a trust arose for E. S. Trego under the purchase by his brother Jacob. These facts, as stated in the opinion of the present Chief Justice, were that the brothers, partners in a foundry, purchased two lots of Dr. Wm. McCleery for $500, to be paid in castings out of the foundry. The purchase-money was so paid. Jacob took possession of the eastern lot, and Eli of the western lot, and Jacob without the knowledge of Eli took the deed in his own name. In answer to a point the court below instructed the jury against the trust, and this court .reversed the judgment on this point alone, being of the opinion that a trust for Eli S. Trego did arise under the circumstances. In the present case a new question is brought up arising on these facts. The original purchase of McCleery was in 1846, and the deed was made to Jacob in February 1850. In March 1850 Jacob conveyed the lot in dispute {inter alia) to his' father, Eli Trego, who with his wife conveyed this lot in April 1850 to Mrs. Elizabeth Trego, wife of Jacob Trego. Jacob was then in declining health: and the partnership was dissolved sometime afterward, perhaps in 1852 or 1853. The precise date is not given, but under the last date, 1851, the accounts of the partners appear to have been balanced, exhibiting in Jacob’s account a balance against him of $3352.63 and against Eli a balance of $3850.61. In Jacob’s account he was charged with $500 by Wm. MeOleery, being just the amount of the purchase-money of the two lots, and in the account of Dr. Wm. McCleery, he was credited with the same sum $500 by Jacob Trego. Thus with this charge against Jacob for the purchase-money, the balance against Eli S. Trego in the partnership account was, including subsequent entries, much greater than that against Jacob. Jacob died in June 1853, the deeds were recorded in that month, including the deed from Mr. Eli Trego and wife to Mrs. Elizabeth Trego, wife of Jacob. In the same year Mrs. Trego being in the possession of the lot went on to build upon it. She built a good brick house immediately in sight from Eli S. Trego’s door and of the foundry, where he must have seen it from day to day. He gave no notice of any claim of title on his part during the progress of the building, and suffered Mrs. Trego to retain possession by herself and her tenants until the year 1859, when he brought the first ejectment, in which he obtained judgment by default against her tenant and upon this judgment turned out the tenant, Mrs. Trego having died in 1858. Thus Mrs. Trego being possessed of the legal title adversely to the trust under which Jacob had held, in the first instance, for Eli, was suffered to place valuable improvements on the property and to remain in possession for more than five years after 1853 and more than two years after the passage of the Act oí 22d April 1856, without any acknowledgment on her part of the trust either verbal or written, and indeed without any assertion of the trust by Eli S. Trego. Under these circumstances the plaintiffs in their first point asked the court to charge that the 6th section of the Act of 22d April 1856, there being no acknowledgment of the trust, was a bar to the defendant’s claim by way of a resulting trust. The learned judge in the court below seems to have misconceived the bearing of the point, or else relying too confidently on what he supposed was the decision of this court in the former writ of error, did not charge upon the question of limitation under the 6th section of the Act of 1856, but charged in substance and effect, that if the jury found the existence of the trust under the former opinion of this court, and that Eli S. Trego had gone into possession under it, his equitable title was sufficient and would prevail against the legal title of the plaintiffs. But the error of the learned judge was this, that the point conceded the trust and asked the court to charge that it was barred by the limitation contained in the 6th section of the Act of 1856, because there had been no acknowledgment of the trust by Mrs. Trego as required by that section for more than five years after the legal title had been vested in her, while he refused the instruction and rested the case on the mere existence of the trust. It is true he seems to have thought that the limitation contained in the 6th section was inoperative on the ground that Eli S. Trego had gone into possession: and in this court the charge has been endeavored to be supported on the same ground, under the decision in Clark v. Trindle, 2 P. F. Smith 492, and other cases. There is no question of the soundness of these decisions, that when the cestui que trust is in possession during the running of the statute, the limitation does not apply, the possession being a constant assertion and continual claim of the trust. But the plaintiff’s point assumed, and the evidence very clearly established the fact of Mrs. Elizabeth Trego’s possession under the legal title, and Eli S. Trego’s non-claim of the trust during a greater period than five years from her taking possession and even more than five years after she had built her house. To meet this the 6th section of the Act of 1856 requires that the trust shall be acknowledged by writing to subsist, otherwise no right of entry shall accrue or action be maintained to enforce the trust. The court below ought to have affirmed the first point and submitted the facts on which it rested to the decision of the jury.

Judgment reversed, and a venire facias de novo awarded.


text:
    Bank of Commerce’s Appeal.
    1. The members of a building association were entitled to a loan on each share. One assigned his stock in the association and delivered the certificate to a bank for a loan, with power of attorney to transfer. He borrowed from the association the full amount to which he was entitled and transferred his stock to it. the bank still holding the certificate. The stock was not transferred to the bank on the books of the association — there was no provision in the charter for such transfer. The association expired and the assets were distributed by the officers amongst the stockholders shown by their books, including the association, without notice from the bank. Held, that the officers were not liable to the bank on the certificates held by it.
    2. As between a corporation and corporator, the stock-book is evidence of their relation ; the certificate is secondary evidence.
    3. Assignment of a certificate is only an equitable transfer and must be produced to the corporation and a transfer made.
    January 8th 1873.
    Before Read, C. J., Agnew, Williams and Mercur, JJ. Sharswood, J., at Nisi Prius.
    Appeal from Nisi Prius: In Equity: No. 37, to January Term 1869.
    This was a bill filed December 19th 1868, by the National Bank of Commerce against Henry Troemner (President), John H. Wahl (Vice President), Augustus 0. Miller (Treasurer), Henry Eggeling (Secretary), Frederick Stacke and others, directors of the Citizens’ Building and Saying Fund Association.
    The bill set out:
    1. The incorporation of the association on the 1st of December 1856, to continue'for ten years; the articles of association were made part of the bill.
    2. The association organized by the election of their officers, and issued 2000 certificates of stock.
    3. Payments of $1 per share were made monthly!
    4. The defendants were officers of the company, as above stated, and as such the whole “ business and assets” of the association were confided to them.
    5. John P. Persch became owner of 36 shares of the stock of the association, and in 1861, after he had paid $50 on each share, he transferred the same to the plaintiffs, and the plaintiffs subsequently applied to Eggeling, the secretary, to enter the transfer on the books of the association. He declined to do so; plaintiffs still owned those shares.
    6. Whilst plaintiffs were owners of the 36 shares of stock, the defendants, without notice to them, and without their knowledge and consent, divided and distributed among themselves and other stockholders, to the exclusion of the plaintiffs, all the assets of the association.
    7. The period for which the • association was incorporated had expired, and the association had ceased to do business; the assets amounted to more than enough to pay the debts of the association, but although the plaintiffs were entitled to a. share of the assets in proportion to the number of shares of stock owned by them, they had received no part of the balance of the assets, and had not been able “ to procure or examine any account or statement in relation to their receipts and payments,” &c.
    The prayers were:
    1 and 2. That the defendants should make a discovery of the business and assets of the association and the doings of the officers, and account for their receipts and expenditures on account of the association.
    3. - That the liabilities of the association be ascertained, and defendants pay plaintiffs their share of the surplus.
    4. That the association be wound up under the direction of the court.
    By the articles of association it was declared, that its object was the accumulation of a fund by the savings of its members, to enable every stockholder to invest his savings and purchase real estate; every stockholder, for each share that he should hold, to pay $1 initiation fee and $1 every month, until the value of the whole stock should be sufficient to divide to each share $200, and when $200 should have been paid on each share, the “ association shall determine and close.” Every stockholder should be entitled to have a loan for each share held by him.
    Loans were to be taken by the stockholders in the manner specified in the articles, such loans to “ be secured by the transfer of the certificate of stock to the association, as collateral security, or by bond and warrant and mortgage on real estate.” A stockholder obtaining a loan was to secure it by bond and mortgage, and transfer to the association “ as collateral security, the same number of shares as he shall loan from said association,” and on repayment, all the securities to be retransferred to him. Should he fail to repay, the securities to be sold, and the balance, if any, after deducting his indebtedness, to be paid to him. A stockholder in arrears to the association not to be entitled to any loans.
    All transfers of shares shall be made by the secretary; the stock to consist of no more than 2500 shares.
    The answers of defendants averred that Persch owned 80 shares of the stock of the association, on which $50 per share had been paid; that he owed the association $7200 on 36 shares of the stock, which were transferred to the association, that afterwards from July 10th 1861, to September 15th 1862, he borrowed on the rest of his shares $7803, and when the payments of instalments by stockholders ceased, Persch was indebted to the association $697.50; no notice was given to the association of the transfer of Persch’s stock to plaintiffs until 18 months after the expiration of the charter : at the close of the association there were no assets to be divided, but aboutNovember 1866, the association in accordance with its articles had wound up its affairs, and all stockholders known to the defendants, or holding stock on the books of the company, with the exception of a few shares, having received for each share $200, a committee was appointed to collect the outstanding assets, and appropriate them to the payment of those shares. The plaintiffs did not Npply during the continuance of the charter to have the stock' transferred on the books; nor did they comply with the requirements of' the charter as stockholders, and they were not entitled tp be recognised as stockholders.
    A replication was filed, and testimony taken by an examiner. On the filing of his report, John B. Grest, Esq., was appointed master. He found the facts substantially as set out in the bill and answer.
    He further found, that there was nothing in the charter of the association, nor on the face of the certificates, providing any mode for transferring stock; but the company kept a book in which transfers were entered, and these were noted on the back of certificates when presented. In 1861 Persch became the owner of 80 shares of the stock, which were transferred to him on the books of the association, and the transfers noted by the secretary on the back of the original certificates, which were not surrendered.
    He obtained loans from the association to as large an extent as his stock entitled him, and continued to pay the dues on said shares until they were paid up. On some of the shares loans had been granted to prior owners thereof, which loans he assumed to pay. These loans commenced in the year 1858, and continued until August 1865: the loans for 30 of said shares being after the assignment to complainants.
    To; secure some of these loans, Persch gave security on his real estate, and also transferred to the association 20 shares of stock of the Jefferson Eire Insurance Company, and gave judgment bonds for the whole. He also offered to give the 80 shares of its stock as security, and they were accepted. There was no evidence of any actual assignment of the 80 shares of stock to the association. * * *
    On the 14th day of November 1862, Persch transferred to the Bank of Commerce for value received, 36 shares of the stock of the association, and delivered to the bank a formal assignment thereof and the certificates for the 36 shares, which have ever since been held by the bank.
    The assignment was absolute and purported to be for value; in the same instrument was a power of attorney irrevocable to transfer, with blank for the attorney’s name.
    The association under its charter expired December 1st 1866; the defendants were then officers of the association. As such officers, defendants, after the expiration of the charter, collected the outstanding assets of the association, and have divided the proceeds among the stockholders whose names appeared on the books, and were not indebted to the association for loans to the amount of the stock held by them. The association was never during the period of its charter, notified of the assignment of the 36 shares to complainants: but in the year 1868, a demand was made by complainants’ counsel, of Henry Eggeling, the secretary, to have the transfer entered on the books; this was declined.
    The defendants treated the whole 80 shares in the name of John P. Persch, as still being his, and as being more than repaid to him by the amount of the loans obtained by him, which exceeds the value of the stock.
    1. The master reported that the assignment to the plaintiffs, dated November 14th 1862, gave them a good title to the 36 shares of stock. It is absolute in its form, purported to be for a valuable consideration, and is unimpeached by any evidence in the cause. There is no reason why such a chattel should not pass by assignment. It is true that the bank did not cause the transfer to be noted on the books of the association, and did not obligate themselves in writing to pay the monthly dues, interest and fines, and to fulfil the requirements of the constitution of the company. No dues and fines are claimed to be due upon the stock. * * *
    2. Had the building association a lien on the 36 shares for the loans made to Persch ? * * *
    It is to be observed in the first place, that the building association were certainly as much bound to have the certificates of stock transferred to them when they lent money to the holder, as the bank could be.

      They did not take this precaution, either by the negligence of their officers, or because they were satisfied with the other securities received, they permitted Persch to retain the certificates and use them. * * *
    As the charter provides that security for loans may be either the transfer of the certificates of stock to the association, or, bond and warrant, and mortgage on real estate, did not the possession of the certificates by Persch warrant the bank in assuming that no loan had been then made on the security of these shares, or could be made afterwards, the certificates being in their own possession ? * * * The charter of the association gives it no lien on the stock for loans, except by a transfer.
    The master reports that no such lien exists in this case.
    The master recommended a decree:
    1. That the plaintiffs, since the 14th day of November 1862, have been the lawful owners of 36 shares of the stock of the Citizens’ Building and Saving Fund Association.
    2. That the association had no lien upon the said shares, for moneys lent to John P. Persch by the association.
    3. That the defendants were trustees for the stockholders of the association, in winding up the affairs thereof, and in dividing or otherwise disposing of its assets ; and that the plaintiffs were entitled to have received as the holders of 36 shares, their proportion of the assets coming into the hands of defendants.
    4 and 5. That it be referred to a master to take an account, &c.; and the defendants pay to the plaintiffs the amount, if any, due to them.
    Exceptions were filed to the master’s report.
    On hearing at Nisi Prius the bill was dismissed with costs.
    The plaintiffs appealed to the court in banc and assigned for error the dismissal of their bill.

      F. Seyer and Gr. M. Fallas, for appellants.
    The certificates in the hands of the plaintiffs were not subject to the equities between the association and Persch; they were practically negotiable securities: Bank v. Lanier, 11 Wallace 369; Railroad v. Lewis, 9 Casey 33; N. York & N. H. R. R. v. Schuyler, 34 N. York R. 30; Bridgport Bank v. N. York & N. H. R. R., 30 Conn. 231.

      W. J. Aldrich and S. R. Warmer, for appellees.
    The plaintiffs were bound to take notice of all the provisions of said charter: Union Bank v. Laird, 2 Wheaton 390; Sabin v. Bank of Woodstock, 21 Vermont 355; Rogers v. Huntingdon Bank, 12 S. & R. 77; Morgan v. Bank, 8 Id. 73; Mechanics’ Bank v. Earp, 4 Rawle 384; Grant v. Mechanics’ Bank, 15 S. & R. 140.

      Until a transfer upon the books, the assignee has -a mere equitable claim, and is liable to every equity subsisting against the assignor : Bayard v. The Farmers’ and Mechanics’ Bank, 2 P. F. Smith 232; Farmers’ Bank v. Inglehart, 6 Gill 50; Walsh v. Stille, 2 Pearson 17 ; Bury v. Hartman, 4 S. & R. 175 ; Gourdon v. Ins. Co. of N. A., 1 Binney 430; Wheeler v. Hughes, 1 Dallas 23; Wardel v. Edwards, 2 Johns. Cas. 260; Brindle v. McIlvaine, 9 S. & R. 74; Angell & Ames on Corporations, § 779 ; James v. Woodruff, 10 Page N. Y. Ch. R. 541; s. c. 2 Denio R. 474.
   The opinion of the court was delivered, January 27th 1873, by

Agnew, J.

This bill is to make the officers of an expired corporation responsible for alleged negligence in the settlement of the affairs of the corporation and the distribution of its assets, on the ground that the complainant is the holder of an outstanding certificate of stock under an assignment, but without a transfer on the books, or notice to the corporation or these defendants, that the plaintiff held the stock. In point of fact, notice was not given for nearly three years after the dissolution of the corporation and the settlement of its affairs. As between a corporator and the corporation, the records of the corporation, or its stock-book, as it is called, is the evidence of their relation. Meetings of the stockholders, elections and dividends, &c., are regulated by this record. The certificate is but secondary evidence, and is never demanded, except when the stockholder de^ls with the corporation in a contract relation. Such was the case of the Building Association v. Sendmeyer, 14 Wright 67. The assignment of the certificate is only an equitable transfer of the stock, and to be made available must be produced to the corporation and a transfer demanded. As between adverse claimants of the certificate, the possession of it with the transfer upon it is often the test of the title. But when the corporation itself is not dealing with its stockholder on the security of his stock, and is merely performing a corporate duty, its own record is all it needs to consult, for whoever would demand the privileges of a stockholder should produce the evidence of his title and ask to be permitted to participate. These defendants acted officially as the trustees of the expired corporation, to settle its affairs under the powers conferred by the law, and in doing so made their distribution, according to the record of the corporation, which exhibited the membership of its corporation. In doing this, without any notice from the plaintiff of his equitable assignment of the stock, clearly they were not guilty of any negligence, while the loss of the plaintiff was attributable to his own negligence, and negligence on their part is the only ground of his bill. The decree of the Court of Nisi Prius dismissing the bill is affirmed, with costs to be paid by the appellant. .


author: Askew, J.

text:
    Danzeisen’s Appeal.
    1. The plaintiff being embarrassed, upon defendant’s advice conveyed to him real estate, on defendant’s parol promise that he would obtain from a building association, on the security of the real' estate, a loan, with which he would pay plaintiff’s liabilities, repay the loan from the rents and reconvey to plaintiff- when the loan should' be repaid. Held, that the transaction was a mortgage.
    2. The purpose not being to sell, but convey as security, it is immaterial that defendant was to procure the money at a future time and from a third person.
    3. The defendant received the deed without consideration, except his promise to raise the money for plaintiff; if it was not intended to be raised it would be a fraud and the defendant a trustee ex maleficio.

    4. The plaintiff’s bill charged that defendant held in trust for him; did not allege that-he was mortgagee, and prayed for account and reconveyance; it was dismissed below on the ground that there was no trust. The facts set out showing it to be a mortgage, the Supreme Court sustained the bill, to reach the justice of the case, disregarding the use in the bill of inappropriate terms.
    5. Barnet v. Dougherty, 8 Casey 371, distinguished. Haines v. Thomson, 20 P. F. Smith 434 ; Harper’s Appeal, 14 Id. 320: Sweetzer’s Appeal, 21 Id. 264, followed.
    January 10th 1873.
    Before Bead, C. J., Agnew, Williams and Mercur, JJ. Sharswood, J., at Nisi Prius.
    Appeal from the decree at Nisi Prius: No. 23, to January Term 1870.
    The bill was filed December 14th 1869, by John Frederick Danzeisen, against August 0. Miller and Harry E. Miller, and set out:
    1, 2, and 3. Two lots of land on Apple street, Philadelphia, belonging to John Q-. Keyser, were on the 6th day of January and the 6th day of September 1847, respectively, conveyed by Keyser to the plaintiff.
    4 and 5. In 1855 and 1856 the plaintiff having become pecuniarily embarrassed, consulted.with A. O. Miller (defendant) as to a mode for his relief. A. 0. Miller promised that if plaintiff would convey his real estate to him (Miller) he would purchase shares in a building association, apply the rents of the real estate to pay the dues, and on the security of the real estate borrow money, and thus discharge the plaintiff’s liabilities. On the determination of the association he would reconvey the real estate to the plaintiff.
    6 and 7. The plaintiff relying on A. C. Miller’s promises, “ and upon his discharging with fidelity the trust,” on the 30th of October 1856, conveyed the real estate to him without consideration, but upon his agreement and “ upon the trust that he would obtain money upon the security of the real estate, discharge the plaintiff’s liabilities, apply the rents of the real estate to the payment of the borrowed money, and reconvey the property to the plaintiff when the rents were sufficient to satisfy the loan, whereby the- said August C. Miller became the trustee of the real estate for said purposes.”
    8 and 9. A. C. Miller obtained money from a building association on the security of the real estate, paid all the liabilities of the plaintiff, collected the rents sufficient to pay the building association the dues on the loans from them; the association had determined under its charter, and all dues and loans had been repaid.
    10, 11 and 12. The plaintiff had requested A. C. Miller to render him “an account of his said trust,” and reconvey the real estate to him. Miller had refused to do so, but in violation of his trust had conveyed the real estate to his son, Harry E. Miller, the other defendant, without consideration, and with the knowledge by H. E. Miller that A. 0. Miller held in trust for the plaintiff.
    The prayers were for an injunction restraining the defendants from encumbering or conveying the premises; for an account by A. C. Miller of his “ trusteeship;” that they reconvey the real estate to the plaintiff, and for further relief.
    A. C. Miller answered, admitting “ the conveyance to him, but denying the allegations in the bill in relation” to borrowing from the building association, paying the dues from the rents, and that he would reconvoy to the plaintiff on the determination of the association.
    He averred that the plaintiff, being much embarrassed, and his real estate encumbered to its full value, and being in danger of having other judgments recovered against him, solicited the respondent to purchase the real estate for the amount of the liens, $5000, a larger amount than it would have produced at sheriff’s sale. The respondent yielded to the solicitations of the plaintiff, and on the 30th of October 1856, the plaintiff conveyed to him the real estate for $5000. There was no understanding at the time of the conveyance that the respondent should obtain money to discharge the plaintiff’s liabilities, pay the loans, &c., from the rents, and reconvey, &c. He never became plaintiff’s trustee; no money had been borrowed by respondent from any building association. Respondent had frequently offered to reconvey to the plaintiff upon the payment of all moneys laid out by respondent, with interest, which plaintiff was not willing to do, and respondent had since conveyed, “for a good and valid consideration, ” to Harry E. Miller, who has ever since been the sole owner of the property.
    Harry E. Miller, the other defendant, denied knowledge “of any transactions, statements, promises and agreements, between the plaintiff and August C. Miller,” touching the real estate. He averred that plaintiff had instituted two actions of ejectment for the real estate, in which this respondent had been made co-defendant in the same by leave of the court, as he had become owner “by conveyance for good and valid consideration, from A. C. Miller, by deed of March 18th 1867; and that the suits are still pending and undetermined.”
    Replications having been filed, an examiner was appointed. Upon the coming in of his report, George M. Dallas, Esq., was appointed master. He reported the facts as follows:—
    “ The plaintiff conveyed the property in question to August C. Miller, by deed dated October 30th 1856. The deed was in the usual form, contained no words of trust, and was expressed to be for the consideration of $5000.
    “ At the. time of the making of this conveyance, and for some time previously, the plaintiff was in circumstances of pecuniary embarrassment, of which he had informed the said August 0. Miller, who, as a means of relief to the plaintiff, suggested the making of the said conveyance, which was made in consequence of that suggestion, and upon the parol promise of said August C. Miller to use the property for the purpose of obtaining a loan from a building association, to apply the rents to the repayment of such loan, to use the money to be so borrowed for the payment of the plaintiff's liabilities, and finally, to .reeonvey the property to the plaintiff when the loan to be obtained as aforesaid should be repaid.
    “ August C. Miller, by deed dated March 18th 1867 (expressed to be for the consideration of $16,000), conveyed the property in question, together with several other properties, to his son Harry E. Miller. There was in fact, no valuable consideration paid for the said conveyance.”
    After reviewing the facts and discussing the law, the master, in his opinion said:—
    “ The conclusion of the master is that August C. Miller took the property in question as trustee for the plaintiff) that the conveyance thereof to Harry E. Miller did not transfer it to him discharged of the trust, but that he took only the naked legal title, and the equitable estate remains in the plaintiff; and that the plaintiff is entitled to an account and reconveyance as prayed in this bill, and to a decree accordingly.”
    Exceptions were filed to the master’s report.
    After hearing, the court at Nisi Prius dismissed the bill, Sharswood, J., delivering the following opinion:—
    “ I am by no means so clear as to either the facts or the law of this case as to justify me in sending these parties to a long and expensive account before it is finally settled that there is a liability to account. Upon this principle I invariably act in this place. A decree for an account is interlocutory and not the subject of appeal, by which the whole question can be carried up and finally settled by a decree dismissing the bill.
    “ The law is very clearly laid down in Barnet v. Dougherty, 8 Casey 371, that since the Act of April 22d 1856, Pamph. L. 533, a trust by implication or construction of law is raised only from fraud in obtaining the title or from payment of the purchase-money when the title is acquired; a subsequent payment of the purchase-money or a subsequent fraud is not sufficient.
    “Mr. Justice Strong said : ‘It is fraud in the purchase which makes the holder of the title a trustee. Subsequent fraud, if any exist, no more raises a trust than does subsequent payment of the purchase-money.’ He adds, ‘of course setting up the sheriff’s deed as an absolute conveyance of both legal and equitable interest was not a fraud from which the law implies a trust. It was nothing more than a violation of an alleged promise, either implied or expressed, which is of' no avail to induce a chancellor to decree the purchaser to be a trustee.’ I do not understand Beegle v. Wentz, 5 P. F. Smith 369; as laying down any other rule. Mr. Justice Agnew says: ‘ The trust in such cases arises ex maleficio, on the principle that equity will not permit one to deprive another of a title he actually has by such a promise not intended to be performed.’ There must be some evidence of fraud in the purchase that the party obtained the title on a promise which he did not intend to perform. To hold that whenever a deed is made by one man to another upon a parol promise to hold it for the benefit of the grantor and to reconvey it — the subsequent breach of that promise is evidence of original fraud in the promise — would be most effectually to repeal the 4th section of the Act of 1856.
    “ Now, upon the facts of this ease, I have very great doubt whether there is anything more established than a subsequent breach of a parol agreement when A. C. Miller took the title for these lots. It is to be observed that the conveyance was upon the consideration that Miller undertook to pay Danzeisen’s debts, to the extent of the agreed price. No evidence was given to show that $5000 was not a fair price. It does clearly appear from the plaintiff’s own examination that Miller did pay $3611.48-100ths of his debts, and the property was subject to two building association mortgages of $1000 each. One of them -was said to have pretty near run out. The other I infer from nothing having been said, was new. Now it may be conceded that at the time of the transaction Miller made to Danzeisen the promise that when he was reimbursed what he undertook to pay off, of debts and encumbrances, he would reconvey. There is not a syllable in the proofs that there was any relation of debtor and creditor created by the agreement, that Miller was to make advances to Danzeisen and hold the property as security. If the property had turned out to be an insufficient security, Miller could not have recovered the money of Danzeisen. The bill is not indeed framed upon any such idea. It is not a bill to redeem a mortgage but to establish ■a trust. If this were all, it must be admitted, I think, that the case would be entirely bald of any evidence to establish a trust ex maleficio.

    “ There is'indeed some evidence upon which my mind has hesitated, as to whether Miller did not represent to Danzeisen and his wife, that the deed executed by them was a deed of trust. The witnesses appear to use this phrase without any clear idea of its meaning. There was no evidence of what occurred at the execution of the deed to contradict what appears on its face. The conveyancer, who is one of the subscribing witnesses, was examined. He could not tell the particular circumstances of the execution of this deed, but he states that his invariable rule was, especially when the parties could not read, to be satisfied that they understood what they were doing, and that .his partner since deceased, understood the German language, the plaintiff being a German and having an imperfect knowledge of English. An alderman of very high character as a gentleman of intelligence and integrity, certifies that the contents of the deed were made known to Mrs.. Danzeisen. How much the testimony on the subject is to be relied on may be gathered from the fact he denies having ,acknowledged the deed before an alderman at all. Had the deed been without consideration there might have been very strong reasons for holding the evidence sufficient to show that the grantor executed the deed upon the false representation that it was a deed of trust, but in the face of the admitted and indisputable fact that the grantee assumed to pay debts of the grantor to the full amount or very near the full amount of the consideration named in the deed, and that he faithfully fulfilled the undertaking, and that Danzeisen has never been called upon for any of those debts, it seems to me that it would be very dangerous to hold that a trust ex maleficio can be established by the loose kind of testimony given in this case. Had Mr. Miller paid down to Danzeisen the $55000 in cash, it would not have been any stronger.”
    The plaintiff appealed to the court in bane, and assigned for error, not confirming the master’s report, and dismissing the bill.

      JE. R. Worrell, for appellant.

      Gr. RemaJc, for appellees.
   The opinion of the court was delivered, January 27 1873, by

Askew, J.

The transaction between Danzeisen and the elder Miller in this case, was a mortgage. The former conveyed his property to the latter expressly as a security for money to be obtained to pay his debts. Miller agreed to take the property, raise the money through a certain building association, apply the rents to a repayment of the loan, and to reconvey when the building association expired. In Harper’s Appeal, 14 P. F. Smith 320, where the difference between a mortgage and a trust is very clearly shown by our brother Sharswood, and that the former is not within the Act of 22d April 1856, he says, whenever there is in fact an advance of money to be returned within a specified time, upon the security of an absolute conveyance, the law converts it into a mortgage, whatever may be the understanding of the parties. Here the intent to deliver the deed only as a security for money to be borrowed on the faith of it, is very clear, and the time for repayment is equally distinct.

In such a case, where the purpose of the parties is not to sell, but to make the deed a mere security, it cannot be material that Miller was to procure the money from an association whose business it was to lend money on real estate security. The fact that the parties, who were Hermans, called it a trust, cannot overcome the distinct terms of their agreement, that it was to be a security only. Indeed, their use of the term trust, giving to it an ordinary signification, only confirms the intent not to make an absolute conveyance. It is very evident that the deed was a mortgage, or a trust ex.maleficio would arise; for when the deed was delivered no consideration passed. Miller procured the estate without payment of any purchase-money, and therefore stood in no better situation in point of fact than one in whose name a deed is taken by another who pays the purchase-money.

In equity the estate should remain in Danzeisen, who had received nothing but a promise to raise money for his use, unless the promise to raise be the equivalent of the money when raised. If the promise was not intended to be performed by Miller, the deed was obtained by a deceit, and it was a fraud at the time it was delivered.

Rut if the promise be performed, the true intention of the parties is executed, and the deed should stand as a security for the money. It would be different had the deed been intended to enable Miller to raise money by a sale, for then Danzeisen would intend to pass an absolute estate, and to trust the promise of Miller to apply the proceeds to his use; a breach of such a promise would not convert Miller into a trustee, and the case in principle would resemble that of Barnet v. Dougherty, 8 Casey 371. But W'here no sale is intended, and the conveyance is only to be a security for a loan to be obtained on it, the parting with the title must be by way of mortgage, or the deed is procured by false pretence. The law, however, rather treats the deed as a mortgage, than to impute a fraud to Miller. In equity, where the estate is conveyed without consideration, and for the special purpose of security for a loan, what difference can it make that the money was not paid on the delivery of the deed ? The grantor’s intent in its delivery is the same in either event, while every breach of faith in the grantee partakes of a fraud.' To say, therefore, that the relation of debtor and creditor did not arise, because no money passed at the time of delivery, is to stand on a hard technicality, and ignore the true intent and relation of the parties.

Miller’s intent to raise the money, which was the effective means of procuring the title, must be viewed as the equivalent of the money, when it is raised and applied to Danzeisen’s use. Then the purpose of the deed is executed, and then it should stand as a security to reimburse the money borrowed on the faith of it. It is plainly a mortgage, therefore, and equity will so regard it, and compel a reconveyance when the money shall have been refunded. As was said in Haines v. Thomson decided in February 1872, 20 P. F. Smith 434, in all the cases the sum of the matter has been to determine by the true nature of the transaction, whether the conveyance was an actual sale, or a mere security for money. But without further discussion, the case of Sweetzer’s Appeal, decided last year, is an authority in point, that even a sheriff’s sale will be converted into a mortgage when it is made an instrument to carry out the agreement of the parties to raise money by way of loan, and when the loan is subsequent to the deed: 21 P. F. Smith 264.

At Nisi Prius this case was treated as a question of trust. The draftsman of the bill evidently looked at it in that light, and( in that light the bill was dismissed. But a careful examination of the bill discloses all the essential facts to support it as a bill to redeem a mortgage, and it prays for an account and a reconveyance. With these substantial averments and appropriate prayers, and with the ample power of amendment possessed by the court to do equity and reach the justice of the case, we cannot turn the plaintiff out of court by reason of inappropriate terms used in the bill, indicating a trust instead of a mortgage.

Treating the bill as substantially one to redeem a mortgage, we are of opinion the evidence clearly proves the conveyance by Danzeisen to Miller to be a mere security for money to be borrowed for the use of Danzeisen, and therefore it was a mortgage in law, and that Henry E. Miller was not a bond, fide purchaser for a valuable consideration without notice of the nature of the deed. The decree of the Court of Nisi Prius is therefore reversed, the plaintiff’s bill restored, a decree for an account to be taken between the plaintiff and the defendants is ordered, and G-eorge M. Dallas, Esq., is appointed a master to take the account and report the same to the court, together with the proper form of a final decree, in accordance with the rules and practice in equity.