author: Mr. Justice Gordon

text:
    First National Bank of Clarion versus Gruber.
    1. Neither by set-off nor original action can interest, over the legal rate, paid to a national bank, be recovered except by way of penalty as prescribed by the Act of Congress of June 3d 1864.
    2. The courts of this state have jurisdiction to recover said penalty under the provisions of the national statute above referred to. Bletz v. The Columbia National Bank, 6 Norris 87, followed.
    3. There are no state banks of issue in Pennsylvania authorized to take more than six per cent, interest, and national banks cannot therefore claim Euch privilege.
    4. Where in an action to recover usurious interest paid it appears that the plaintiff was the beneficial owner of the notes discounted, it cannot be shown that the other joint maker claimed the right to recover said usurious interest and had brought suit therefor in another court.

      October 20th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas of Clarion county: Of October and November Term 1879, No. 112.
    Debt by John Gruber against the First National Bank of Clarion.
    This suit was brought to recover from the defendant double the amount of all payments alleged to have been made by the plaintiff to the defendant as usurious interest, within two years previous to the inception of the action, and also all excess above six per cent, alleged to have been paid during the additional period of four years prior to the 4th of March 1874. The plaintiff declared specially for the double interest, and added the common counts on which to recover the excess. Cn the 24th of March 1879, defendant presented a petition to remove the same to the Circuit Court of the United States, which was refused.
    The plaintiff claimed to recover the discount on four different lines of notes; the first notes of John Gruber, the plaintiff, which began on the 29th of March 1870, and were either paid off or embraced on the 7th of January 1872, in note given by John and Henry Gruber, which constituted the second line of notes, and this line was continued by renewals until the 12th of June 1875, when it was closed by a judgment on the last of the notes, being $2238, and the judgment was not paid until- the 28th of August 1876, nearly five months after the bringing of this suit, and was then paid principally out of the proceeds of a sheriff’s sale of Henry Gruber’s property. The third line of notes were those of John Gruber, Henry Gruber and Samuel Newell, which began on the 3d of October 1873, and after a succession of renewals, on the 27 th of November 1875, was closed by a judgment in favor of the bank of $348.30, which was not paid until the 28th of August 1876, and was then paid out of proceeds of sale of real estate principally of Henry Gruber. The fourth line of notes were those of Cook & Co. and John Gruber, endorsed by E. Eulofson, which Eulofson had discounted at the bank, but charged the discount against John Gruber on a settlement Eulofson had with Gruber. On these several lines of notes, which constituted the greater part of the plaintiff’s claim, discount was charged generally at the rate of twelve per cent. Sometimes the discount was paid at the time of the purchase of the notes, sometimes it was reserved out of the amount given for the notes, and at other times it was added into the notes, and went along the line of successive renewals, till they were closed in judgments or paid. Excluding the notes of Cook & Co. and John Gruber, that Eulofson had discounted, the whole amount of discount actually paid on the several notes claimed by plaintiff between the 4th of March 1874, and the 4th of March 1876, was $217.70; the whole amount added into or reserved out of notes during the same period, was $62.50 ; the whole amount of discounts paid between the 4th of March 1870, and the 4th of March 1874, was $1064.72; and the whole amount added in or reserved out during the same period, was $264.28, and the greater part of all this was on the joint notes of John and Henry Gruber. The plaintiff in this case claimed this last line of notes was discounted for his benefit, and Henry Gruber claimed that the discount was paid by him, and had brought suit for the same discounts, which was offered to be proven by a certified copy of the record of the Circuit Court of the United States, in the case of Henry Gruber against the same defendant, but the testimony was excluded by the court.
    The defendant also pleaded specially and proved the incorporation of eighteen banks which were doing business at the time claimed for by plaintiff in this case, that were authorized by their charters to take such rates of interest as might be agreed upon by said banks and the borrowers. A copy of these charters was included in defendant’s special plea. These banks,, it was claimed on part of defendant,' were banks of issue. The rate of interest charged by the defendant in this case it was alleged was only the rate agreed upon between borrower and lender, and except that which was included in the judgments vras voluntarily paid by the person for whom the paper was discounted. The plaintiff did not personally pay any discount on the S. Newell and Gruber line of notes except what he paid on a judgment recovered on the last of the line, and that was paid on the judgment, not as discount.
    At the trial before Jenks, P. J., the court admitted in evidence the note of John Gruber and Henry Gruber, overruling an objection that it was a joint note, while this was an individual action. (First assignment of error.)
    Defendant proposed to prove “ that Henry Gruber, who was the joint maker in a line of notes for the payment of money for which the plaintiff now claims, alleges and claims that he is the party to whom the right of action for the payment of discount or usury belongs, and has actually brought suit for the same in the Circuit Court of the United States, together with- the record of the Circuit Court of the United States of the suit brought.”
    Objected to. By the court: “We will not receive the evidence unless it is followed by testimony going to show that the present plaintiff is in some way identified with making such claims; if he has we will admit the evidence.” (Second assignment.)
    The following assignments of error will show the other questions raised:
    Third assignment: The court erred in their answer to defendant’s tenth point, that there can be no recovery under the evidence as to any moneys claimed in this action, except as to the penalty.
    Ans. “We think there can be recovery for such moneys as were paid by the plaintiff as interest or discount, where such moneys so paid were in excess of 6 per cent. He would be entitled to recover the excess over 6 per cent., so paid during the four years prior to the 1st of March 1874, and he would be entitled to recover double the amount where it was received as interest or discount, and it was usurious where it was paid within two years from the time this suit was brought.”
    Fourth: In their answer to defendant’s fourth point, that as to all notes on which excessive interest may have been paid prior to the 4th day of September 1875, which were paid prior to that time, the plaintiff’s right to recover is barred by the limitation of the Act of 28th of May 1858.
    Ans. “ We decline to answer this point as requested.”
    Fifth: In their answer to defendant’s fifth point, that the hanks whose charters are set forth in defendant’s special plea, filed March 24th 1879, are banks of issue.
    Ans. “ We have already stated that we do not think they are banks of issue within the meaning of the term used in the Act of Congress. We do not think they are within the meaning of the terms used in this suit. To so hold would involve consequences which, in our opinion, it would not be just to impute to the highest legislative body in the United States. To so hold would, as in favor of national banks, operate as a practical repeal of our state usury laws. We might refer to other reasons, but we think it unnecessary at present. Suffice it to say that in our judgment, as we have already stated, they are not banks of issue within the meaning of the terms used in the Act of Congress, nor do we think they are intended to include the banks that have been given in evidence. We think .Congress used these terms as referring to banks of a different character entirely.”
    Sixth: In their answer to plaintiff’s fifth point, that the banks created by the Acts of Assembly given in evidence in this case, are not banks of issue, and not within the exception in the Act of Congress creating national banks.
    Ans. “ We answer this point in the affirmative. We do not think the banks given in evidence by the defendant are banks of issue within the meaning of the terms used in the Acts of Congress.”
    Seventh: In their answer to defendant’s sixth point, that as the banks in defendant’s fifth point mentioned are authorized by their charter to charge such a rate of interest as may be agreed upon between the parties, the defendant in this case had a right to charge at any rate agreed upon between the plaintiff and defendant.
    Ans.. “We decline to answer this point as requested, and refer to the answer to defendant’s fifth point.
    Eighth: In answer to the defendant’s eighth point, that if the defendant did not take or receive any other or greater rate of interest than was agreed upon between the plaintiff and defendant, the verdict of the jury should be for the defendant.
    Ans. “We declino to answer this point as requested, and for further answer refer you to answer to defendant’s fifth point.”
    Ninth: In their answer to plaintiff’s fourth point, that when a national bank loans money and takes a security for payment of same on time, payment of illegal or usurious interest for same, either at the time of the loan or afterwards, within two years of suit brought, such bank becomes liable for the penalty, and there can be a recovery for such penalty, even if there be no part payment of the principal.
    Ans. “ Where it receives money as interest or discount, and the same is usurious, and the same was received within two years before the commencement of this suit, they can recover it. We thus answer this point in the affirmative.”
    Tenth: In their answer to the defendant’s twelfth point, that if the several judgments with which the several lines of notes were closed up, were each larger in amount than all discounts paid by plaintiff on, or added into, the several notes in said lines, the verdict of the jury should be for the defendant.
    Ans. “We have already said that if money was actually paid as interest or discount, and the same was in excess of six per cent., or in other words was usurious, for such money actually paid or received, there could he recovery, but not where there rvas no actual payment of money in that form.”
    Eleventh: In their answer to the defendant’s first point, that the action to recover by the plaintiff from the defendant twice the amount of interest paid, under section 5198 of the Revised Statutes of the United States, is an action to recover a penalty.
    Ans. “ We decline to answer this point as requested.”
    TAvelfth: In their ansrver to the defendant’s second point, that Congress has no power to confer on the state courts jurisdiction to recover such penalty, and as to such penalty this action will not lie.
    Ans. “We decline to answer this point as requested.”
    Thirteenth: In their ansAver to the defendant’s third point, that the claim of the plaintiff for penalty under an Act of Congress, and for the recovery of excess interest are incongruous and there can be no recovery for both of said demands in this action.
    Ans. “We decline to answer this point as requested.”
    Fourteenth: In their ansAver to plaintiff’s second point, that the judgment entered by defendant against John Gruber and Henry Gruber is not a bar to plaintiff’s recovery for the penalty under the Act of Congress, or for excess of interest or discount paid, Avhen such interest and discount AYere not included in and made a part of-said judgment.
    Ans. “ We ansAyer this point in the affirmative. But where it was included in the judgment, the judgment would control. It is the amount actually paid — that the evidence shows is actually paid —can he recovered.”
    Fifteenth: In their answer to defendant’s thirteenth point, that under all the evidence in this case, the verdict of the jury should be for the defendant.
    Ans. “ We answer this point in the negative.”
    Sixteenth: The court erred in the following portion of the general charge: “ Under the instructions given, the jury can only find against the defendant; first, so much as has actually been received by them between the 1st day of March 1870 and 1874— so much as has actually been received between the 1st day of March 1870 and 1874, in excess of 6 per cent., when the sum received was received as interest or discount, and interest on that sum from the time it was paid until this date.”
    Seventeenth: In refusing to grant the prayer of defendant to remove the cause to the Circuit Court of the United States.
    Verdict for plaintiff for $1661.01, when defendant took this writ, and alleged that the court erred as set forth in the above assignments of error.

      Wilson & Jenks, for plaintiff in error.
    The action should have been joint. If any liability was incurred by the bank, it was a joint liability, and the note should have been excluded. No action can be maintained to recover back money'voluntarily paid, with knowledge or means of knowledge of the facts, and without fraud: Real Estate Savings Institution v. Linder and Wife, 24 P. F. Smith 371; Taylor v. Board of Health, 7 Casey 73; Ege v. Koontz, 3 Barr 109.
    No action will lie to recover usurious interest, except under the provisions of the Act of May 28th 1858, Pamph. L. 622, and the Act of Congress of 1864. This Act of Congress provides a specific remedy, and it is usurping the functions of legislation for a court to say that the party injured shall have an additional action for money had and received to recover back the whole or the half of the interest paid during the period which preceded the two years provided by the statute, within which action should he brought: Brown v. Second National Bank of Erie, 22 P. F. Smith 209; Overholt v. National Bank of Mount Pleasant, 1 Norris 490; Lucas v. Government National Bank, 28 P. F. Smith 292; Meloney v. Third National Bank, 5 W. N. C. 363; Bank v. Roseberry, 31 P. F. Smith 309.
    The banks set forth in defendant’s plea are banks of issue, and have the right to contract with the borrower for the rate of interest, and under the Act of Congress national banks have the same rights as these hanks of issue: First National Bank of Mount Pleasant v. Duncan & Bro., 6 W. N. C. 159; Same v. Tinstsman, Pitts. Leg. Jour., Jan’y 29th 1879; 36 Leg. Int. 228; Tiffany v. National Bank of Missouri, 18 Wall. 409.
    If the line of notes be reduced to judgment, the judgment is a bar to the recoupment of any interest, excess or payment made therein prior to the judgment. This principle is recognised in numerous cases; among others, Verner v. Carson, 16 P. F. Smith 440 ; Hopkins v. West, 2 Norris 109; Rutherford v. Boyer, 3 Id. 347; Walter v. Breisch, 5 Id. 457; 2 Potter on Corp. 552.

      William L. Corbett, for defendant in error.
    The loan was made to John Gruber and for his benefit. He paid the interest, and therefore Henry Gruber had no title on which he could recover the penalty over the borrower. Parties to contracts where illegal interest is extorted do not stand in pari delicto, the necessities of the borrower making him an easy victim of the usurer. The Act of Congress, where interest is contracted for or received in excess of the rate allowed by the laws of the state, declares such interest forfeited, and inflicts a penalty for such extortion. In such cases a prohibition of such contracts is implied: Mitchell v. Smith, 1 Binn. 110; s. c. 4 Dall. 269; 4 Yeates 84.
    A contract made about a matter prohibited by statute is void, although not expressly declared to be so: Seidenbender v. Charles, 4 S. & R. 151; Columbia Bank and Bridge Co. v. Haldeman, 7 W. & S. 233; Morris Run Coal Co. v. Barclay Coal Co., 18 P. F. Smith 173. Such contracts are void, absolutely void, and not merely voidable. The parties to the contract not standing in pari delicto, the party paying such interest is entitled to-recover: Thomas v. Shoemaker, 6 W. & S. 179; Lucas v. Government Nat. Bank, supra.

    All corporations are creatures of positive law, and derive their power from their charters or the laws under which they are created. Outside the charter or laws under which they are created, they have no power to act: Commonwealth v. Erie & North-East Railroad Co., 3 Casey 339; Diligent Fire Co. v. Commonwealth, 25 P. F. Smith 291; Bank of Kentucky v. Schuylkill Bank, 1 Parsons 180.
    The acts recited in the plea do not give any power to issue notes in the character of bank bills, for the purpose of circulation or as a currency; nor is there any power conferred from which such is necessarily implied. No claim has heretofore been made of such power by these corporations or their officers. On the contrary, they have heretofore acted as banks of discount and deposit, and have been considered by the legislature, the judiciary and the people of the state as possessing only the power of such banks. They have not claimed or exercised the powers of banks of issue.
    October 27th 1879.
   Mr. Justice Gordon

delivered the opinion of the court,

The evidence in this case establishes the fact that John Gruber was the beneficial owner of the notes produced on the trial, and that for him alone were they discounted by the bank. It hence follows that any claim that Henry Gruber might have set up to the penalty, growing out of the illegal discounts, was without foundation, and was properly disregarded.

In like manner, the learned judge of the court below, properly ruled that the banks created by the several Acts of Assembly, given in evidence by the defendant, were not banks of issue. These acts specifically define the powers of the several corporations created by them, but among them is not found the power to issue circulating notes, commonly known as bank notes. But the rule is, that as corporations are purely statutory creatures, powers not specifically granted are to be taken as withheld, and cannot be raised by implication unless they are ancillary to, and necessary for, the proper exercise of those granted. The defendant, then, having failed to show that the banks referred to were banks of issue, it cannot, under the act of Congress, claim the right of those banks to take more than six per cent, interest on loans and discounts.

All other points, put to the court below, were well answered, except the defendant’s tenth point and others involving the same principle. That point reads as follows: “ There can be no recovery, under the evidence, as to moneys claimed in this action, except as to the penalty.” The answer was: “ We think there can be recovery for such moneys as were paid by the plaintiff as interest or discount where such moneys so paid were in excess of six per cent.” By a recent decision of the Supreme Court of the United States this would seem to be error, but it is an error of this court rather than of the court below, for our decisions in Lucas v. The Bank, and kindred cases, were followed.

The case to which we refer is Barnett v. The National Bank, 8 Otto 555, a case very much like the one under consideration. . The defence, inter alia, was that Barnett and Whitesides, the drawees and acceptors of the bill in suit, were borrowers from the bank as early as January 11th 1866; that the indebtedness was continuous and unbroken from the 8th of April of that year; that it was at. no time less than $4000, and at one period amounted to $36,000; that at the time of the assignment of the drawees to Barnett & Craig, who intervened and were made parties, th.e indebtedness was $28,000 on bills of exchange; that the bank had taken not less than $5000 in excess of the legal rate of interest; that for evasion the bills were arranged in series, and that each series was terminated, from time to time, by refusing to renew and discounting a new bill, the proceeds of which were applied in payment of the prior terminating one; that the bank had received satisfaction of all the bills but the one in suit, and that there was nothing due from the defendants. On demurrer, this plea was ovei’ruled by the court below, and this ruling was affirmed by the Supreme Court. Mr. Justice Swayne, delivering the opinion of the court, in commenting upon the statute, says: “ Two categories are thus defined, and the consequences denounced:—

“ 1. Where illegal interest has been knowingly stipulated for but not paid, there only the sum lent without interest can be recovered.
“ 2. Where such illegal interest has been paid, then twice the amount so paid can be recovered in a penal action of debt, or suit in the nature of such action, against the offending bank, brought by the persons paying the same or their legal representatives.”

And further on in the same opinion: “ In the first defence the payment of the usurious interest is distinctly averred, and it is sought to apply it by way of offset or payment to the bill of exchange in suit. In our analysis of the statute we have seen that this could not be done.”

From this it appears certain that neither by set-off nor original action can interest, over legal rate, paid to a national bank, be recovered except by the way of penalty, as prescribed by the act of Congress of June 3d 1864.

We have but to add, that the case of Bletz v. The Columbia National Bank, 6 Norris 87, rules that the courts of this state have jurisdiction of suits to recover twice the amount of illegal interest, under the provisions of the national statute above referred to.

The judgment is reversed and a new venire awarded.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Watson et al. versus Wetter et al.
    Included in a promissory note were the following words, ‘‘If not paid at maturity waiving inquisition, appeals, &c.” Held, that the maker was thereby precluded from an appeal from an.award of arbitrators and a compulsory rule of reference.
    October 20th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas of Qlarion county: Of October and November Term 1879, No. 69.
    Assumpsit by H. Wetter, to use of W. C. Howe, against J. B. Watson and C. C. Brosius, on the following promissory note:
    “$1875. Clarion, Pa., June 18th 1877.
    Six months after date we promise to pay to the order of H. Wetter $1875, at the First National Bank of Clarion, Pa., without defalcation for value received. If not paid at maturity waiving exemption, inquisition appeals, without stay of execution, and with five per cent, attorney’s commission for collection, fl 7393. J. B. Watson,
    Due December 18/21. C. C. Brosius.”

      On the 2d of August 1878, the plaintiff’s attorneys entered a compulsory rule of reference Under the Act of 16th June 1836, and on the 10th of September 1878, the arbitrators filed their award, awarding to the plaintiff f2054.35, from which award the defendants took an appeal. On the 11th of November 1878, plaintiff moved the court to strike off and quash the appeal from the award of arbitrators, for the reason that “ the right of appeal was waived by defendants in note on which award was made, a copy of said note being filed along with declaration, according to rule of court, which has not been controverted by affidavit.”
    The court, Jenks, P. J., granted a rule to show cause, and after argument struck off the appeal, which was the error assigned by defendants, who took this writ.

      Knox & Moffett and Wilson & Jenks, for plaintiffs in error.—
    There was no arrangement or stipulation by which the parties agreed to make the award of arbitrators final and conclusive. A party is not held to waive a standing right except by the most clear and unequivocal language, and it must not rest upon inference or conjecture: McLain v. Boyer, 3 Norris 417; O’Nail v. Craig, 6 P. F. Smith 161; Delaware and Hudson Canal Co. v. Loftus, 21 Id. 418; Houck v. Foley, 2 P. & W. 245; Gault v. Neal, 6 Phila. 61; Bank of Pennsylvania’s Estate, 20 P. F. Smith 471.

      James Campbell and William L. Corbett, for defendant in error.
    The right to appeal may be waived in the submission to referees, and will be enforced by the courts: Bingham’s Trustees v. Guthrie, 7 Harris 423; Rogers et al., Executors of Thompson, v. Playford, 2 Jones 181—185; Messina v. Hertzog, 5 Binn. 387; Andrews v. Lee, 3 P. & W. 99; Galbraith et al. v. Colt, 4 Yeates 551; Baring v. Shippen, 2 Binn. 189.
    November 3d 1879,
   The judgment of the Supreme Court was entered

Per Curiam.

The words contained in the note sued on, “ if not paid at maturity, waiving exemption appeals without stay of execution,” must have some meaning; they cannot be rejected as insensible. They evidently looked forward to legal proceedings on the note “ if not paid at maturity.” One of these proceedings would be a claim for exemption, and another an inquisition to condemn real estate. What then did “appeals” mean? Evidently it could only mean appeals from an award of arbitration. Compulsory arbitration is so ordinary a step in the collection of debts, that it is plain the parties must have meant to agree that there should be no appeal from an award if one was made in the progress of the proceeding. We think that the agreement is clear and express within all the cases. The court below were therefore right in striking off the appeal. Order affirmed.


author: Mr. Justice Mercur

text:
    Greene, to use of Noble & Hall, versus Lycoming Fire Insurance Company.
    1. G. applied through T., an agent of an insurance company, for a policy of insurance. An application therefor was sent by T. to the general agent. Two days thereafter .a policy for G. was sent to T. which contained the clause “loss if any under policy, payable to N. & H., mortgage creditors.” T. gave a written certificate to the sheriff that G. had made application for a policy payable to N. & H., and he had procured a policy for them and in consequence a writ of execution was stayed. No part of the premium on the policy was ever paid by G. or N. & H., and the policy was not delivered to either of them. After holding it a month T. marked it “not taken” and returned it to the general agent. The latter marked it off his register and cancelled it. The mortgaged premises were subsequently destroyed by fire, and G., to use of N. & H., brought an action for the sum mentioned in the policy. The powers of the agent were limited to receiving and forwarding applications, and delivering policies sent to him on payment of the premiums. The court instructed the jury that under the evidence they should find for defendant. Held, that this instruction was not error.
    2. It was contended that the company was estopped by the act of T. in giving notice to the sheriff, thereby causing the execution to be stayed. Held, that this act was unauthorized by the company, and was not within the scope of the employment or the implied powers of the agent.
    3. Mentz v. Lancaster Fire Ins. Co., 29 P. F. Smith 475, distinguished.
    October 21st 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to tbe Court of Common Pleas of Drie county: Of October and November Term 1879, No. 223.
    Assumpsit by Elvira J. Greene, to the use of Orange Noble and L. H. Hall, against The Lycoming Fire Insurance Company.
    The material facts will be found in the opinion of this court.

      Davenport & Griffith, for plaintiff in error.
    If the company made Thompson their agent, clothed him with the power to take applications, receive and deliver policies, and receive premiums, and he has exceeded his authority by certifying to the sheriff that he had insured this house, when in fact he had not, and thereby Noble & Hall have suffered a loss, the company is estopped from denying that the house was insured, and is liable to Noble & Hall on the policy: Bigelow on Estoppel 475.
    The same rules apply to insurance companies as apply in the case of individuals, and a person who is clothed with power to act for them at' all is clothed with authority to bind them as to all matters within the scope of his real or apparent authority: Bodine v. Ins. Co., 51 N. Y. 117; Norwich Co. v. Wright, 13 Wall. 122; Clark v. Ins. Co., 8 How. 235; Gloucester Man. Co. v. Ins. Co., 5 Gray 497; Ins. Co. v. Sortwell, 8 Allen 217.

      Frank Gunnison, for defendant in error.
    A declaration made by a duly authorized officer operates as an estoppel: Mentz v. Lancaster Fire Ins. Co., 29 P. F. Smith 477. The policy was not in force until the premium was actually paid: Marland v. Royal Ins. Co., 21 P. F. Smith 393; Shaffer v. Ins. Co., 8 Norris 296.
    An indefinite promise to give time by the agent cannot be construed into a contract to bind the company. An agent cannot bind his principal by a declaration that he has done an act he had no authority to do. It was incumbent on plaintiff to show the agent had authority to bind the company: Hays v. Lynn, 7 Watts 525; Ins. Co. v. Shultz, 1 Norris 51. In Mentz v. Ins. Co., supra, cited by plaintiff in error, the agent had authority to make the endorsement which was required to be endorsed on the policy.
    November 17th 1879.
   Mr. Justice Mercur

delivered the opinion of the court,

All the assignments of error relate to the liability of the defendant for the acts of C. O. Thompson. The plaintiffs claim they establish either a contract or an estoppel. Noble & Hall held a judgment, secured by a mortgage, against Greene and wife, which was a lien on a lot, with a large frame building thereon, situate at Tidioute, the title to which was in the wife. They issued execution and levied on the premises. Greene and wife desired the time of payment extended. A written agreement, dated 9th February 1875, was thereupon entered into between the parties to the judgment, by which Greene and wife were to pay all the costs, and to cause the premises to be insured for the benefit of Noble & Hall, and the execution was to be stayed. It was further agreed that the sum of $100 should be paid on the judgment on the first day of 'each month, commencing on the first day of April following until the whole was paid. It declared “ this agreement is not to be binding on Noble & Hall until after said costs are paid, and insurance effected, and policy made payable to them in case of loss.”

On the same day Mrs. Greene applied to Thompson, agent of the defendant at Tidioute, for an insurance of $1000. An application therefor was prepared and sent by him to the general agent of the defendant at Erie. Two days thereafter a policy as requested was sent to Thompson for Mrs. Greene, containing the clause “ loss if any under policy, payable to Noble & Hall, mortgage creditors, as their interest may appear.” The agreement between the parties to the judgment was handed to the sheriff, and on the 25th February, Thompson gave a written certificate to him that Mrs. Greene had made application for an insurance of $1000, payable, in case of loss, to Noble & Hall, and that he had procured a policy for them as per application on file with the general agent at Erie. In consequence of this and of the costs being paid, the writ was stayed.

No part of the premium was ever paid by either Mrs. Greene or by Noble & Hall. The policy was not delivered to either of them. After holding it a month or more, Thompson marked it “not taken,” and about the 15th of March returned it to the general agent. The latter received it, marked it off his register, and placed it among the cancelled policies before the fire. On the 22d March the house was destroyed by fire.

After the sale of the mortgaged premises there remained due to Noble & Hall a sum greater than that mentioned in the policy, and this suit was brought in the name of Mrs. Greene for the use of Noble & Hall. Under the whole evidence the court instructed the jury to find for the defendant.

The defendant was not liable for the agreement of Thompson unless it was within the scope of his authority. He was not authorized to write policies. He did not exercise, nor did he profess to have, any such power. His agency was limited to receiving and forwarding applications, and delivering policies sent to him for that purpose, on payment of the premiums. In the application made by Mrs. Greene she covenanted and agreed in case of a loss “ to adjust the same in accordance with the by-laws of the company and the conditions of the policy.” The body of the policy contained a condition that the company should not be liable by virtue of the policy “until the premium therefor be actually paid,” and that “ no agent is empowered to waive any of the conditions of this policy either before or after a loss, without special authority, in writing, from the company.” The defendant gave no written or verbal authority to Thompson to waive any of these conditions. By sending the policy to him the company did not waive the requirement of actual payment of the premium before a delivery. Nothing in the application or in the policy indicated that Thompson could make the company liable on the policy by delivering it before the premium was paid. Still less did they indicate that he could, by any agreement to give time for its payment, make the company liable for a loss that might occur while the policy remained in his hands undelivered. If he had delivered the policy without the payment of the premium, and there had been evidence of an assent of the company thereto, either in the particular case or by its recognised general custom, a different question would be presented. In fact, he was not only not authorized to deliver the policy without payment of the premium, but he did not deliver it. He was not authorized to agree to give time for the payment thereof, before the delivery of the policy, and in the meantime make the company liable thereon or otherwise. He denies that he made any agreement to give time. Then if he did so agree, it was without any express or implied power, and the defendant was not liable on the agreement: Marland v. Royal Ins. Co., 21 P. F. Smith 393. This case must not be confounded with that class of cases in which the agent has power to act, as in Mentz v. Lancaster Fire Ins. Co., 29 P. F. Smith 475, where it is held the company is estopped by his declarations. In the present case there was an absence of power.

It is contended, however, that the defendant is estopped by the act of Thompson in giving the notice to the sheriff, thereby causing the execution to be stayed. We answer that was an act wholly unauthorized by the company. It was not within the scope of his employment, nor within any of his implied powers. It was clearly outside of and beyond any business in which the company was engaged. It was no party to the agreement between Mrs. Greene and Noble & Hall. It entered into no obligation to give any notice to the latter or to the sheriff. It made no agreement to issue a policy to Mrs. Greene for their benefit without a payment of the premium; nor to hold a policy on the property until it might suit either her or their convenience to pay the premium. As she failed to pay it, they should have done so in order to give effect to the insurance.

They now seek to recover by assuming she has a legal right, which she never acquired, to enforce equities to which they were never entitled as against the defendant. It follows that the learned judge committed no error in directing the jury to find for the defendant.

Judgment affirmed.-


text:
    Nicholson versus The Commonwealth.
    1. Where an information was for seduction under promise of marriage, it is not improper to include in the indictment therefor a count_for fornication and bastardy.
    2. In an indictment for a criminal offence the court charged the jury, “ the only safe course for you to pursue, as to the law regarding offences' which you may have given you in charge, is to receive your instructions from the court, for the reason you are not supposed to be learned in the law, and if you should commit an error therein, or counsel should be mistaken in stating the law to you, and you, relying upon their version or your own ideas, in either case should you commit an error, there is no remedy.” Held, that this was not error. The court had an undoubted right to instruct the jury as to the law, and to warn them, as they did, against finding contrary to it.
    October 21st 1879.
    Before Sharswood, O. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. G-reen, J., absent.
    Error to the Court of Quarter Sessions, of Venango county: Of October and November Term 1879, No. 306.
    Indictment of William Nicholson, for the seduction of Hessie Thorn, under the provisions of the 41st section of the Act of March 31st I860, Pamph. L. 385, and for fornication and bastardy under the 37th section of said act.
    The defendant moved to quash the second and third counts of the indictment on the grounds — ’First, that the charge of fornication is included in the count charging seduction. Second, that no information has heretofore been made charging the defendant with fornication and bastardy, nor was said charge made or indictment of fornication and bastardy found upon the return of a constable; and that said count charging fornication and bastardy was unauthorized by law.
    The court refused this motion. The defendant pleaded “ Not guilty.” At the trial the Commonwealth offered a letter from the defendant to Hessie Thorn, to show the relation which existed between them. Admitted under objection.
    In the final charge the court, Taylor; P. J., inter alia, said:
    “ The only safe course for you to pursue, so far as the law regarding offences which you may have given you in charge, is to receive your instructions from the court, for the reason you are not supposed to be learned in the law ; and if you should commit an error therein, or counsel should be mistaken in stating the law to you, and you relying on their version, or your own ideas, in either case should you commit an error, there is no remedy for such error.”
    The jury found the defendant guilty on all the counts, and after sentence he took this writ and alleged that the court erred, inter alia, in refusing to quash the count for fornication and bastardy ; in admitting in evidence the letter from defendant, and in the portion of the charge noted above.

      Mackey & McGrough, Osmer & Dale, and Dodd & Lee, for plaintiff in error.
    The information charges an offence under the 56th section of the penal code, to wit: seduction under promise of marriage. This is a distinct statutory offence, and under an indictment therefor the minor offence of fornication is, of course, included, and the jury might convict therefor. But the offence of fornication and bastardy is not included; this is a distinct substantive offence, made so by a separate and independent statute, to wit, the 52d section of the penal code: 1 Purd. Dig. 325. The latter offence partakes, essentially, of the character of civil process : 2 Whart. Am. Cr. L., 7th ed., sect. 2667; Duncan v. Commonwealth, 4 S. & R. 448; Updegraff v. Commonwealth, 6 Id. 9.
    It has been the uniform practice in Pennsylvania for yéars to require prosecutions to be instituted either upon information made before a committing magistrate, by return of constable, upon motion of the district attorney, or upon personal knowledge of the grand jury: McCullough v. Commonwealth, 17 P. F. Smith 30; Rowand v. Commonwealth, 1 Norris 405; Commonwealth v. Maloy, 7 P. F. Smith 298. Neither of the above requirements were complied with as to the second and third counts of'the indictment herein. The defendant was in fact tried as well for fornication and bastardy as for seduction. The court could scarcely have been more emphatic in their instructions to the jury — not only to disregard any comments upon the law made by defendant’s counsel, as well as any opinion of their own — than were their binding instructions assigned for error.
    The jury are the judges of the law as well as of the facts. The power of the jury to judge of the law in criminal cases is one of the most valuable securities guaranteed by the bill of rights: Sharswood, C. J., in Kane v. Commonwealth, 8 Norris 522. This case is deemed conclusive on this point.

      W. C. Rheem and C. Heydrick, for defendant in error.
    It is usual to add counts for fornication and bastardy in indictments for seduction. This was done in Commonwealth v. McCarty, the first reported case under the seduction law of 1843. In that case the defendant was acquitted of the charge of seduction and found guilty upon the count charging fornication and bastardy. Lewis’s United States Criminal Law, pages 51 to 53. See also Wharton’s Criminal Law, sect. 423; Duncan v. Commonwealth, 4 S. & R. 451; Dinkey v. Commonwealth, 5 Harris 126; Commonwealth v. Birdsall, 19 P. F. Smith 484; Harman v. Commonwealth, 12 S. & R. 69; Henwood v. Commonwealth, 2 P. F. Smith 424, and Stevick v. Commonwealth, 28 Id. 463, as to joinder of different offences.
    The portion of the charge assigned for error indicates to the jury that they may pursue one of three methods in their endeavor to ascertain what the law is. They are not restricted to any one of these methods by binding instructions, but what in the opinion of the court is the “safe course” is pointed out to them. 1. They may take the law from the court; or 2. They may take it from the counsel; or 3. They may rely upon their “ own ideas.” The first course is recommended as “the only safe” one, and a very good reason given therefor, viz.: that if they should err in that choice, there is a remedy for such error. All 'this leaves the jury the judges of what the law is.
    November 10th 1879,
   The judgment of the Supreme Court was entered

Per Curiam.

There was nothing wrong in adding the counts for fornication and bastardy to the count for seduction. They are offences of the same nature. If the Commonwealth had failed to prove the promise of marriage, the defendant might have been convicted on the other counts. A party indicted for seduction and acquitted may plead such acquittal in bar of a subsequent indictment for fornication and bastardy, founded on the same act. Dinkey v. Commonwealth, 5 Harris 126. The third, fourth and fifth errors are not assigned secundum regulas, and there were no exceptions below to the rulings of offers of evidence complained of, except to the letter of November 22d 1875, which was clearly admissible to show the previous relation between the parties. The other assignments of error to the rulings of the court below on questions of evidence, are not sustained by bills of exception, and must fall for that reason; but if they had been they would not have availed the plaintiff in error. As to the exceptions to the charge, we think there was nothing in it of which the plaintiff can rightfully complain.

The court had an undoubted right to instruct the jury as to the law and to warn them, as they did, against finding contrary to it. This is very different from telling them that they must find the defendant guilty, which is what is meant by a binding instruction in criminal cases. Judgment affirmed.


author: Mr. Justice Paxson

text:
    Drown versus Allen.
    1. In an action for slander, under the plea of “not guilty,” the defendant may show in mitigation of damages the general bad character of the plaintiff for the particular thing with which he is charged.
    2. In an action for slander, under the pleas of the general issue and justification, the defendant proposed to ask the witness, “ what is the general repxxtation of the plaintiff as to being a thief.” Upon objection the court-ruled that the question should have been, “ what is the general reputation of the plaintiff for honesty.” Held, that this was error and that the defendant was entitled to put the question in the form proposed by him.
    3. Conroe v. Conroe, 11 Wright 198, and Moyer v. Moyer, 13 Id. 210, followed.
    October 21st 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas of Brie county: Of October and November Term 1879, No. 217.
    Case by E. V. Allen against William L. Drown for slander. The material facts are stated in the opinion of this court. The verdict was for plaintiff for $410.41.

      Benison & Brainerd for plaintiff in error.
    General reputation of want of good character, in the particular in which it has been assailed, is receivable in evidence in mitigation of damages and to show want of malice: Conroe v. Conroe, 11 Wright 200; Moyer v. Moyer, 13 Id. 211. When, therefore, the alleged slander is an accusation that the plaintiff is a thief, how, upon principle or practice, can the defendant be denied the right to prove in mitigation of damages that the plaintiff had acquired a prior general reputation of being a thief?
    The defendant to avail himself of his defence properly pleaded “Not guilty,” and justification: Peters v. Ulmer, 24 P. F. Smith 404. "

      H. W. Blakslee, Geo. A. Allen and J. Ross Thompson, for defendant in error.
    In the case of Conroe v. Conroe, 11 Wright 200, relied upon by plaintiff in error, the alleged slander consisted of general charge of want of chastity, not a specific act, and, consequently the general reputation of plaintiff as to want of chastity was admissible.
    In Moyer v. Moyer, 13 Wright 211, the alleged slanderous words charged the plaintiff with perjury, and consequently evidence of a general reputation for truth and veracity was admissible. In this case the defamatory words charge a want of honesty, and the court admitted evidence as to general reputation for honesty. Surely the plaintiff in this case has no cause to complain, for the admission by the court is broader than the offer, including not only what the plaintiff in error asked, but even more, even the ordinary transactions of every-day life, in which a party may or may not have dealt honestly. As a charge of perjury puts in issue character for truth and veracity, so does a charge of being a thief the general character for honesty.
    November 10th 1879.
   Mr. Justice Paxson

delivered the opinion of the court,

This was an action on the case for slander. The plaintiff is a minister of the gospel in the Zion Church. The alleged slander consisted in the charge that he was a thief and had stolen a sheep. Pleas: the general issue and justification. Upon the trial, the counsel for defendant proposed to ask the witness upon the stand, “What is the general reputation of the plaintiff as to being a thief?” The question was objected to by the plaintiff, and the objection was sustained by the court, the learned judge holding that the proper question to be put is, “ What is the general reputation of the plaintiff for honesty ?” To this ruling the defendant excepted, and it is the subject of the one assignment of error.

Whatever may have been the rule at one time, the later cases establish the principle, that in an action for slander the defendant may show, in mitigation of damages, the general bad character of the plaintiff for the particular thing with which he is charged. Thus, if the slander consisted in a charge that the plaintiff was unchaste, evidence is admissible that the plaintiff’s general reputation for chastity is bad. And the same in respect- of any other vice or crime. This principle is distinctly asserted in Conroe v. Conroe and Wife, 11 Wright 198, and forcible and satisfactory reasons given therefor by Mr. Justice Strong. The same doctrine was reasserted by Mr. Justice Read, in the later case of Moyer v. Moyer, 13 Wright 210. We need not repeat what was so well Said in those cases. They rest upon the principle that a reputation already damaged in the very point in controversy, is not so valuable, commercially speaking, as a reputation which is unspotted. This is eminently sound and proper. I see no more reason why a damaged reputation should command the same price as an unsullied one, than that a barrel of musty flour should command the price of a sound one. When a jury is called upon to fix in dollars the amount of injury a man’s reputation has sustained by a particular act, the measure of damages must be regulated in accordance with business principles.

We need not review the older cases which apparently assert a different doctrine. So far as they apply, they must be considered as overruled. So much was said as to Long v. Brougher, 5 Watts 439, and Steinman v. McWilliams, 6 Barr 170, in Moyer v. Moyer, supra.

Of course, evidence of the character indicated could not be offered'under the plea of justification. But there is also the plea of “ not guilty,” and under this plea it is clearly admissible. It is expressly ruled in Peters v. Ulmer, 24 P. F. Smith 402, that in slander the defendant may put in both pleas.

It remains to consider how far the modification of the form of question was proper. The plaintiff, as before stated, was charged with being a thief. The declaration, after averring in the usual form that the plaintiff was of good reputation, &c., proceeds to assert that he had never committed or been suspected of committing the offence of larceny. So that it was his reputation for larceny, for stealing, for being a thief, that was in issue. Honesty is a broader term and has a different meaning. It is true, stealing may be embraced within it. A thief is always a dishonest man. But the converse of the proposition is not true. A man may be dishonest, and yet not be a thief. A man who does not pay his debts, having the means to do so, or who deals unfairly, may be regarded as dishonest, yet without more could not be called a thief. Some of the witnesses in this case testified that the plaintiff’s general reputation for honesty -was had, but qualified it b.y saying “ it arose from plaintiff’s dealings.” It is easy to see how the modification of the form of question affected the defendant. To all the evidence tending to show that the plaintiff’s general reputation for honesty was bad, the latter could reply that it was the result of other causes than stealing; that no one had 'ever charged him with that.

We are of opinion that the defendant was entitled to put the question as proposed by him and rejected by the court. How far it will avail him upon a second trial, in view of his plea of justification, and of the character of the evidence produced in support of it, can be better determined when the jury render their verdict.

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


text:
    Loomis versus Fry.
    1. A mechanics’ lien to bind the estate of a married woman must show on its face every requisite to make it a valid claim against her.
    2. If a mechanic or material man would successfully charge the estate of a feme covert for work and labor done or materials furnished, he must not only grove on the trial, but also set forth in his claim filed, that such work or material was necessary for the improvement or repair, as the case may be, of her separate estate.
    3. Kuhns et ux. v. Turner, 36 Leg. Int. 37, followed.
    October 21st 1879.
    Before Sharswood, C. J., Mercur, Gor-| don, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas of M'ie county: Of October and November Term 1879, No. 239.
    Scire facias sur mechanic’s lien issued by A. T. Loomis against Elizabeth Fry and George E. Fry.
    The lien as filed was as follows:—
    “In this case the land hereinafter described belongs to the wife, Elizabeth Fry, and she contracted for the construction of the building, and contracted for the material and became personally liable for the material furnished, as is hereinafter stated. A. T. Loomis hereby files his claim or statement of demand for material furnished for and about the erection and construction of the building hereinafter mentioned, and against the land covered by said building and so much other land immediately adjoining thereto and belonging to the said Elizabeth Fry as is appurtenant to the same. The name of the claimant is A. T. Loomis. The name of the owner is Elizabeth Fry, and her husband, George E. Fry. The name of the contractor is John Meh'l. The amount claimed to be due is as follows, to wit: $144.75 for stone, brick and sand furnished for said building within six months past. The.amount and dates are hereto attached in a schedule annexed. The store and building is built and constructed on all that certain piece of land situated in the first section of the city of Erie, Erie county, Pennsylvania, bounded and described as follows, &c. * * * The building is a two-story brick building, twenty-oné feet front and one hundred feet deep. The lien is against the said land and building, and is filed against the said Elizabeth Fry’s interest as the owner and contractor for said building and the material furnished by the claimant.
    “Witness my hand this 23d day of April 1878.
    “A. T. Loomis.”
    Then follows a bill of particulars, to which was appended the following:—
    “ The above and foregoing material was for the said building at the special instance and request of Elizabeth Fry, and the contractor and builder, John Mehl. A. T. Loomis.”

      Elizabeth Fry moved to strike off the lien for the reasons: 1. That it does not set forth that the material claimed to have been furnished was necessary for the proper improvement or repair of the separate estate of said Elizabeth Fry. 2. That the material was furnished on the credit of the building. 3. That the material was actually applied to the improvement of the separate estate of the said Elizabeth Fry.
    The court made the rule to strike off absolute, in an opinion saying
    “ To bind the separate estate of a married woman, the lien filed by a mechanic or material-man should contain all the averments necessary to bring the claim within the spirit and meaning of the Act of 11th April 1848. It is not enough to aver that the contract -was made by her and the work and material done and fur-, nished at her request, but it should appear distinctly and affirmatively that they were for the improvement of her separate estate. This is settled in the recent case of Shannon v. Schultz, 6 Norris 481. The rule is made absolute.”
    This action of the court was assigned for error by plaintiff, who took this writ.

      Benson & Brainerd, for plaintiff in error.

      Frank Gunnison, for defendants in error.
    November 3d 1879,
   The judgment of the Supreme Court was entered,

Per Curiam.

It has been uniformly held by this court that a mechanic’s lien to bind the estate of a married woman must show on its face every requisite to make it a valid claim against her. In Kuhns and Wife v. Turney, 6 Norris 497, our brother Gordon, after an exhaustive review of the cases, says, in the opinion of the court delivered by him : “ It follows that if a mechanic or material-man would successfully charge the estate of a feme covert for work and labor done, or materials furnished, he must not only prove on the trial, but also set forth in his claim filed, .that such work or material was necessary for the improvement or repair, as the ca§e may be, of her separate estate.” In this respect the lien filed in this case was defective, and the court below therefore were right in striking it from the record.

Judgment affirmed.


text:
    Appeal of the City of Erie.
    Where the indebtedness of a city exceeds the limit fixed by article 9, sect. 8, of the constitution, it cannot create a new debt.
    October 22d 1879.
    Before Shars-wood, O. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Appeal from the Court of Common Pleas of Mrie county: Of October and November Term 1879, No. 350. In Equity.
    Bill in equity filed by William P. Rindernecht against the Mayor and Select and Common Councils of the city of Erie, and the bill of William L. Scott and others against the city of Erie, which by agreement of the parties was made supplemental to the above bill, to restrain the defendants from paying over any money in pursuance of a contract for the erection of a market-house in said city of Erie.
    The other material facts are sufficiently set forth in the following opinion of Wetmore, P. J., of the Thirty-seventh Judicial District :
    “ The bill charges in substance that the defendants, on the 28th of August 1879, executed a contract with the executrix and executors of the estate of Charles M. Reed, deceased, by which said executrix and executors are to build a market-house in the city of Erie in a place designated’in the contract, and insure the same. In consideration therefor the said city is to pay a renta] equal to six per cent., on the entire cost of the building and the value of the real estate, which is to be determined at a fixed rate per foot. The agreement is for the term of twenty-five years, with an election on the part of the city to purchase the property during said term, in the manner specified in the agreement. The bill further alleges that the liability thus incurred will be $1500 per annum. The prayer of the bill is that the defendant be restrained by injunction from carrying out said contract, and that the plaintiff may have such other relief as may be required in the premises. The defendant, the city, by its attorneys, files a general demurrer to the bill, alleging that plaintiff has not shown any reason in the law why the said contract is not -within the power conferred on the defendant by the constitution and laws, nor why the said contract should not be carried out according to its terms and conditions. The demurrer is, in substance, an allegation by defendant, which, admitting the matters of fact stated by the bill to be true, as they are therein set forth, are insufficient for the plaintiff to proceed upon, or to oblige the defendant to answer. It therefore demands judgment of the court whether any other or further answer shall be compelled to plaintiff’s bill.

      “ The Constitution of 1873, art. 9, sect. 8, provides, inter alia, as follows: The debt of any city, except as herein provided, shall never exceed seven per centum upon the assessed value of the taxable property therein. But any city, the debt of which now exceeds seven per centum of such assessed valuation, may be authorized by law to increase the same three per centum in the aggregate at any one time upon such valuation.
    “Does the contract set forth in the bill create a debt within the meaning of the constitution ?
    “ The legal acceptation of debt is a sum of money due by certain and express agreement, as a bond for a determinate sum, a bill or note; a specific bargain; as a rent incurred upon a lease: Black. Com., book 3, p. 154. Any claim for money: Bouvier’s Law Dic., vol. 1, p. 436. The definition of the word debt in Webster’s Dictionary is, that which is due from one person to another, or that which one person is bound to pay or perform to another. It was forcibly urged in the argument by attorneys for defendant that, by the legislation of May 23d 1874, power is given to erect or establish market-houses and market-places, and to regulate and govern the same, and to contract for the erection and regulation of market-houses and market-places, on such terms and conditions and in such manner as the councils may prescribe, and raise all necessary revenue therefor, and generally to make all ordinances and by-laws, rules, regulations and resolutions not inconsistent with the laws of the state, as may be deemed expedient; that in carrying on a city government a market-house is one of the necessary and usual institutions, and that the rent accruing therefor under the contract is one of the necessary disbursements required in the due and proper regulation and management of thé city. It was further urged in argument that, without regard to the amount of indebtedness, the government, in its councils, police, streets, fire department, &e., must be carried on, that the funds therefor must be collected and disbursed, and that without power to do these things the government of the city would cease. '
    “ And that in their views the amount provided tobe paid as rent in said contract is not a debt within the true words of the constitution. Other considerations were presented which we do not now consider. The status of the city when the indebtedness reached and passed seven per centum will doubtless permit the raising of the necessary revenue to carry on the municipal operations, and discharge the obligations consequent thereon; but this does not include engagements in new enterprises and incurring obligations therefor requiring permanent additional annual payments. To adopt the reasoning of defendant’s attorneys in its ’application to the facts, as stated in the bill, would tend to results plainly within the constitutional restriction. If this argument is sustained other contracts can be made for other market-houses, larger or smaller, on longer or shorter terms of lease, with more or less rental than in this one, and with a present indebtedness of over seven per centum the obligations of the city may be largely increased. The word debt as used in the constitution can only have its natural form and effect, when the maximum of seven per centum has been reached, by declaring void all obligations which on their face permanently increase the amount of money required for municipal purposes. The proceedings and debates in the constitutional convention, as reported in volume 3, 6 and 7, and the discussions before the people when the work of the convention was submitted for ratification, all disclose the purpose to limit and control the power of municipal corporations in the creation of debts. Seven per cent, is the limit for cities, and no plea of necessity or convenience can legally carry it beyond that point, except as therein provided. From the bill we are not ablé to understand whether, at the adoption of the constitution, the debt of the city was more or less than seven per centum. If more than that amount, then it may be authorized by law to increase the same three per centum in the aggregate. Whether the necessary legal authority has been granted or now exists, and whether proceedings in accordance therewith have been had, we are not informed by the pleadings.
    We, therefore, order, adjudge and decree, that an injunction issue restraining defendants as prayed for, on filing a bond by plaintiffs with sureties in the sum of $2000, with conditions required by law.”
    From this decree the city of Erie took this appeal.

      T. A. Lamb, John P. Vincent and J. C. and F. F. Marshall, for appellant.
    We contend that the debt proposed is not such a debt as was in contemplation of the framers of the constitution, but that they intended only permanent debts created by loans, and to be paid at some future fixed time, and not to current liabilities to be provided for and paid from year to year or month to month. There are manifestly two kinds of indebtedness which a city may “incur:” one its ordinary current expenses, incurred in the government of the city and in providing for its annual recurring wants and necessities ; the other, that permanent kind of indebtedness which is created by borrowing money for public use, which is to be paid at the end of a term of years, and forms no part of the current expenditures of the municipality for the current needs or convenience of its people.
    The mischief to be remedied by sect. 8 of art. 9, was the reckless increase of the permanent debts of municipal corporations, created by borrowing money to carry on vast schemes of public improvement by the municipality itself, or to aid others in making improvements, which it was thought, or at least hoped, would benefit the.people of the municipality. This disposition had become an evil to be checked, and this constitutional provision was made for that purpose, and such was the declared intention, not to prevent the creation of an annual liability for the carrying out of any purpose within the powers of the municipal government.
    The city of Erie has not yet incurred any debt under the contract of August 26th 1879. It is all prospective, and can he provided for by appropriations as required by law, when the proper time comes to do it, viz.: in the annual appropriation for annual liabilities.

      E. Camphausen, G. A. Allen and L. Rosenzweig, for appellees.
    Debt is a matter of contract, and includes in its meaning all forms of implied or express obligation to pay money in the future, and is the only word that can be used to express all kinds and forms of indebtedness. When it is to be used in its limited sense the word must be qualified by the word temporary, permanent, funded, bonded, and consequently our law-makers have uniformly used these when debt was intended to be used in its limited or restricted sense.
    What is an ordinary current expense of a city government? Current expense is an expense for something now in existence; something that has been received by the people and established, and is now running along from year to year. Current expense implies a current revenue or tax to meet the current expense. A new enterprise contracted to be paid for in the future, and requiring a new fund from additional revenue or tax to meet the debt, is not a current ordinary expense, but the creation of a new debt. Erie city has no market-house, and since almost time immemorial has not had any such thing. Such a thing is now no part of her ordinary annual expense, and hence she has no money, revenue or tax to meet such an expense. To accomplish this new enterprise the city has gone in debt, and given her promise to pay so much money, in semi-annual instalments, within twenty-five years, from a stated time.
    November 10th 1879.
   Mr. Justice Gordon

delivered the opinion of the court,

It is admitted that the present indebtedness of the city of Erie is largely in excess of seven per centum on the assessed valuation of its taxable property, and that by the terms and conditions of the agreement into which the city has entered with those representing the estate of Charles M. Reed, deceased, for the building of a market-house, the city will become liable if said contract is carried out, for an annual sum of money equal to six per cent, upon a valuation of from $25,000 to $50,000. In other words, the intent is to fix upon the corporation an obligation to pay each and every year, for the period of twenty-five years, the sum of $1500 or $3000, depending upon the cost of the structure to be erected.

Now, the question is, will the execution of this contract increase the city indebtedness? Will it impose a debt upon the municipality within the purview of the 8th sect, of the 9th art. of the constitution ? That section reads :—

“ The debt of any county, city, borough, township, school, district or other municipality or incorporated district, except as herein provided, shall never exceed seven per centum upon the assessed value of the property therein.”

Now, a debt means a fixed and certain obligation to pay money or some other valuable thing or things, either in the present or in the future. Let us suppose, then, this contract to be executed on part of Reed’s estate; the market-house is built and ready for use; is the city now under a fixed and certain obligation to pay at the end of one year the sum of $1500 ? And if this sum is not so paid, will the city indebtedness be increased by just that amount? It certainly does not require a very astute intellect to answer these questions.

Here is an agreement to pay, and that agreement to pay must be provided for by a taxation over and above what is now necessary for the current expenses of the municipality. But this is just what the constitution was intended to prevent; to prevent the citizen from being overburthened with municipal taxation. It is idle to urge that the restriction includes only a bonded indebtedness, for such is neither the constitutional letter nor spirit. A floating debt usually ends in a bonded debt, and the former is just as obligatory as the latter. What difference does it make to the overtaxed citizen whether the debt his property is confiscated to pay is called floating or bonded ?

But it is said the Act of Assembly empowers the city to build or rent a market-house, and that a market-house is necessary for the convenience of the people. Let it be so; corporations, like natural persons, must do without conveniences when they have not the money to pay for them. If the ordinary revenues of the city of Erie aré not sufficient to meet its legitimate wants, and if it must continually take upon itself new obligations for that purpose, it is clear that bankruptcy and financial ruin must occur sooner or later, and Avhen these do occur, it must learn, nolens volens, to live within its revenues. Therefore, it would seem to be true Avisdom to grapple with this evil at once, for it only assumes a greater magnitude by procrastination. Be this, however, as it may, and conceding that in the sight of municipal officers this kind of wisdom is but foolishness, nevertheless it is the foolishness of the constitution of this Commonwealth, and so it must prevail.

Many authorities have been cited for the defence, none of which seem to us to bear upon the point in issue. There is one, however, Avhich we notice because of its general pertinency. In Dill. on Mun. Corp., sect. 88, the learned author cites an Iowa case, involving the validity of a contract by a city for a supply of water, in which it is said: When a contract made by a municipal corporation pertains to its ordinary expenses, and is, together with other like expenses, within the limit of its current revenues and such special taxes as it may legally and in good faith intend to levy therefor, such contract does not constitute the ‘ incurring of indebtedness’ within the meaning of the constitutional provision limiting the power of municipal corporations to contract debts.” This, we hesitate not to say, is a sound constitutional interpretation, and in a similar case might well be adopted in the construction of our own constitution. If the contracts and engagements of municipal corporations do not overreach their current revenues, no objections can lawfully be made to them, however great the indebtedness of such municipalities may be; for in such case their engagements do not extend beyond their present means of payment, and so no debt is created.

Had the defendant in the bill before us, instead of demurring, made answer that its annual revenues were sufficient, over and above the r ^ment of the interest of its indebtedness and the ordinary ex' .ases of the city government, to meet the rent proposed to be paid, a very different case would have been presented for consideration. But the demurrer, admitting, as it does, the allegations of the bill, raises the single question of the power of the city to contract a new debt, notwithstanding its present indebtedness exceeds the constitutional limit, and this without reference to its resources or present ability to meet and pay the contract intended to be entered into. As we have seen, without a violation of the supreme law of the Commonwealth, this cannot he done.

Decree affirmed and appeal dismissed at costs of appellant.


author: Mr. Justice Trunkey Per Curiam.

text:
    Overseers of the Poor of Harmony Township versus County of Forest.
    1. Uuder the provisions of the Act of April 22d 1863, proceedings were had ex parte and an order made for the removal and support of a lunatic pauper and an adjudication filed as to his settlement, but no legal notice was given to the township where his settlement was decided to be, that such order and adjudication had been made and filed. The county afterwards brought suit against said township to recover the amount expended for said pauper’s support. Held, that the Act of 1863 should not be so construed as to preclude the district from defending on the ground that the insane person did not reside therein. Held further, that it was competent and relevant for the county to show that he had a legal settlement in said township.
    2. Where an indigent insane person has no legal settlement in the Commonwealth, then his place of residence should be held to be his place of settlement; and if the evidence fails to show a settlement, but a residence be proved in a poor district, said district is liable for expenses incurred in said pauper’s behalf, which liability can only be thrown off when such district discovers and adduces proof of his place of legal settlement.
    3. Where a person lives in a house with its lessee, and by agreement with the lessee, contributes a proportion 'of the rent to the amount of twenty dollars per annum, he obtains a settlement in'the township where such house is located.
    4. It was not error to admit a deposition taken by the clerk of the county commissioners, in a suit by the county.
    October 22d 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas of Forest county: Of October and November Term 1879, No. 331.
    Assumpsit by the county of Forest against the Overseers of the Poor of Harmony township.
    Defendants pleaded non assumpserunt, payment with leave, &c.
    At the trial, before Wetmore, P. J., it appeared that at the regular term of the Court of Quarter Sessions of Forest county, held in September 1875, the case of Michael Calinan, an alleged lunatic pauper, was brought before the court, and there was an order of removal made to the West Pennsylvania Hospital on the 27th, and in the order of removal it was adjudicated that the legal settlement of said insane person was in the township of Harmony, in Forest county.
    This adjudication was entirely ex parte and without notice to the proper authorities of Harmony township, and it was so admitted at the trial. This order of removal was without prejudice to the rights of said township in any question that might arise as to the legal settlement of said Calinan.
    The expenses of maintenance of this lunatic pauper were regularly paid by Forest county. Suit was brought by the county against the defendants as overseers of the poor of Harmony township, to recover from the township the amount so paid.

      The order of removal and adjudication was offered in evidence by plaintiff’s attorney and it was objected to by defendants as being ex parte and without notice to defendants, that they could not be affected by it, and that it was incompetent generally. The objections were overruled and the record admitted. (First assignment of error.)
    During the progress of the trial the deposition of Mrs. Calinan, wife of the alleged lunatic pauper, taken before J. T. Brennan, Esq., was offered for the purpose of showing that the place of settlement of M. Calinan was in Harmony township. The admission of this deposition was objected to by defendants for the reason that the person before whom the deposition was taken was the clerk of the county commissioners, and in the employ of the plaintiff and incompetent to take the testimony, but the principal objection was that it was incompetent in this suit to try the question of settlement of a pauper as that was exclusively cognisable in the Quarter Sessions, and not a question for a jury to pass upon. The objections were overruled. (Second assignment.)
    Plaintiff offered several witnesses to show that said pauper had obtained a legal settlement in Harmony township by living in said township with his daughter and son-in-law, the latter being the lessee of the premises, but the pauper contributing $20 as his portion of the rent, which sum was paid by the daughter to the landlord.
    Objected to, on the grounds that the settlement offered to be proved was purely cognisable in the Court of Quarter Sessions; that it was collateral to the issue, incompetent and irrelevant.
    The objections were overruled and the evidence admitted. (Third assignment.)
    The defendants’ first point, with the answer of the court, was as follows:—
    The order of removal of the alleged lunatic pauper to the West Pennsylvania Hospital, and the adjudication as to his settlement in Harmony township, contained in the record in this case, without notice as required to the overseers of the poor of Harmony township, and adjudication of the settlement being expressly made “without prejudice” to the said Harmony township, said adjudication of settlement is not binding or conclusive upon said township, and without any force or effect in this suit, and the plaintiff cannot recover.
    Ans. “Affirmed, except the following words: ‘ and the plaintiff cannot recover.’ ” (Sixth assignment.)
    In the general charge, the court, inter alia, said: — ■
    “ If you find that Calinan had a residence within the construction that we have given the Act of Assembly, we say that the township is liable to the county for the legal expenses incurred by the county and paid by them to the hospital for the maintenance of Calinan, including the amount that was necessarily expended in removing him from Tionesta to the West Pennsylvania Hospital for the Insane at Dixmont.” (Thirteenth assignment.)
    Verdict for plaintiff for $686.75, and after judgment defendants took this writ, and alleged that the court erred, inter alia, as set forth in the above assignments of error.

      S. T. Neill, M. J. Heywang and S. D. Irwin, for plaintiffs in error.
    Brennan was the clerk of the county commissioner's, and was thereby disqualified to take a deposition in a suit in which the county was concerned. The Act of April 22d 1863, Pamph. L. 539, 2 Purd. Dig. 974, pi. 34, requires notice to be given to the authorities having charge of the poor. The proceedings in the Quarter Sessions were ex parte, and no notice having been given as required by the above act, thev were not admissible in evidence: McKee v. McKee, 2 Harris 237.
    The Common Pleas has no jurisdiction to determine the question of settlement. That question can only be decided- in the Quarter Sessions: Point Township v. Overseers of Lycoming Township, 2 Rawle 26. The evidence to establish the settlement of the pauper in Harmony township was insufficient.

      Miles W. Tate, for defendant in error.
    The record and record papers in No. 4 September Sessions 1875, were properly admitted. This court does not-review the record of commitment, and it is presumed that record is right: Lower Augusta Township v. Northumberland County, 1 Wright 143.
    The failure of the court to give the notice required by the first section of the Act of 1863 would be no defence here, by the terms of the act itself. But we have distinct authority to the effect that the county is here subrogated to the rights of the hospital in a suit of this kind: Danville Poor District v. Montour, 25 P. F. Smith 37.
    Notice given, does not create the liability of the district. Settlement of the pauper lunatic therein does. This being the proper forum (Lower Augusta Township v. Northumberland County, 1 Wright 143; Danville, &c., Poor District v. Montour, 25 P. F. Smith 37), the district could avoid the liability by showing in the civil court, “ that some other district was the true place of settlement of the lunatic:” Shenango v. Wayne, 10 Casey 184. And this is all the law requires here. The evidence touching the legal settlement of the lunatic pauper in this case was therefore relevant, and the submission of that question to the jury was not error.
    The evidence of the legal settlement of Michael Calinan in Harmony township is sufficient. He paid rent beyond the value of $10, and dwelt in the house more than a whole year with his family: Beaver v. Hartly, 1 Jones 259.

      November 17 th 1879.
   Mr. Justice Trunkey

delivered the opinion of the court,

Before a person shall be entered on the poor book of any district, an order for his relief shall be obtained from two justices of the peace of the county. Act June 13th 1836, Pamph. L. 541. Under that act no claim for necessaries furnished a pauper, however pressing his wants, can be recovered from the district, unless such order be issued prior to commencement of the action; but, in proper cases, it may be procured after the pauper has been relieved. Warrants for the removal of a pauper from the district when he becomes chargeable, to the one w'here he has a legal settlement, must be issued in like manner. From the orders of the justices an appeal may be taken, by an aggrieved party, to the Court of Quarter Sessions. It is contended on the part of the plaintiffs in error, that the county had no right of action, because the place of settlement of Michael Calinan had not been determined, as required by the statutes for relief of the poor; and this is the main question presented in the numerous assignments. Calinan was committed to the West Penns3rlvania Hospital by the Court of Quarter Sessions of Forest county, and it was certified by said court that he had a legal settlement in Harmony township; but notice of the inquiry, or of the adjudication, was not given to the overseers of the poor of that district.

The first section of the Act of April 22d 1863, Pamph. L. 539, makes it the duty of the court to inquire and ascertain certain facts, and if the insane person be declared in indigent circumstances, to certify to the managers of said hospital the legal settlement of such insane person, if he have any, and if he have no legal settlement in this Commonwealth, then to certify the place of residence of such insane person, which place shall then be held to be his place of settlement; and the county wherein such indigent insane person had his settlement or residence shall be liable to said hospital for the expenses of the care an'd maintenance and removal, and in case of death, of the funeral expenses of such insane person, with remedy over against the proper poor district. Section 14 of said act declares that a certified copy of the commitment shall be evidence in any suit brought by the hospital to recover the amount due; and no defence shall be taken by any county or poor district in any suit against them to recover the amount of such expenses, on account of any defect or informality in such 'commitment or record thereof, nor by reason of the failure of the court making such commitment to give the notices or certificates required by the first and eleventh sections of the act. By section 12, the county where such insane person had a legal settlement or residence, or from which he was sent, is made liable to said hospital for the expenses incurred in his care, as provided by law, and “ in all such cases the county so chargeable shall have remedy over against the proper township, city, or poor district where, by existing laws, such township, city, or poor -district is liable for the support of such insane persons, or against any relative required by law to maintain him or her; and the overseers or guardians of the poor of any such township, city, or poor district shall also have remedy over against the property of such insane person, or against any relative required by law to support or maintain hinj or her.” Where the indigent insane person has no legal settlement in the Commonwealth, then his place of residence shall be held to be his place of settlement; and, if the evidence fails to show a settlement, but a residence be proved in a poor district, said district is liable for the expenses, which liability can only be thrown off when such district discovers and adduces proof of his place of legal settlement.

Remedy is provided for the county against the district, liable by existing laws, for the support of the insane person, in like terms as is given against his relatives who are legally liable for his support. This is by action at law: Danville Poor District v. Montour, 25 P. F. Smith 35. The law declares the requisites of a legal settlement, and when mere residence shall be deemed a settlement for the purpose of support, and prescribes the modes of procedure for relief of paupers. The procedure is not the same for the indigent insane, when originally commenced in courts of record, as for others, and ought not to be. Laws relating to the hospitals for the care and custody of these unfortunate persons, provide the remedy for recovering the expenses from their relatives, or the proper poor district. When the county has paid the hospital, neither reason nor anything in the statute which binds the county to pay, permits the district, liable for the expenses, to defend against an action by the county, in any other way than it could have done had it been sued by the hospital. ■ No part of the statute requires the county to wait some procedure before two justices of the peace before bringing suit; nor any additional adjudication by the Quarter Sessions.

Previous notice to the authorities of a poor district of an inquiry respecting the settlement or residence of the insane person is not required; but notice is directed to be given to said authorities and to the county commissioners of what has been adjudicated and certified. Here the act differs from that of 1845, which relates to the Pennsylvania State Lunatic Hospital, and provides, That the settlement or residence of any such person shall not be so certified until after due notice shall have been given to the constituted authority having charge of the poor in the district to be charged thereby.” •Nor does anything in the acts relating to that hospital have similar import as the 14th section of the Act of 1863: Danville Poor District v. Montour, supra, was a case to which the Act of 1845 applied.

Although the Act of 1863 makes the certificate evidence, when notice was not given, it ought not to be construed as precluding the district defending on the ground that the insane person did not reside therein. The 14th section specifies the defences which shall not be made, and the ex parte adjudication as to settlement is not declared to be final against the district. For some purposes, the record of the proceedings of the Court of Quarter Sessions in the matter of the lunacy of Michael Calinan was evidence; it was not relied on to prove his settlement in Harmony township. Other proof of that was given which, if not sufficient to show a legal settlement, was to establish residence, but we think it was rightly submitted on the question of settlement.

We are of opinion that the rulings of the learned judge were within the intendment of the statute relating to the West Pennsylvania Hospital. Whether the poor district, after an adjudication and certificate, by the Court of Quarter Sessions, of the settlement or residence of an insane person, if aggrieved, can demand relief in that court, is not a point raised in this case.

It is not alleged that the magistrate, before whom the depositions were taken, acted unfairly, and the mere fact that he was clerk for the county commissioners was not fatal; the first assignment cannot be sustained. Judgment affirmed.

Justices Mercur and Gordon dissented.

A motion was made on November 24th 1879 for a re-argument for the following reasons:

1st. That the controversy in this suit was not between the West Pennsylvania Hospital and Harmony township, the plaintiff in error, and, therefore, the 14th section of the Act of 22d April 1863, had no application to this case.

2d. The commissioners of Forest county should have first procured an adjudication, by the Court of Quarter Sessions of said county, as to the legal settlement of the pauper by rule on the township, where the settlement is supposed to be, to show cause, &c., and this can, under the authorities, be done as well after an order of removal as before.

3d. That the Act of 22d of April 1863 (the West Pennsylvania Hospital Act), is not inconsistent with the Act of 13th of June 1836 (Poor Laws), and does not repeal it, and should be construed in connection with that act, and in conformity' to its provisions in determining the legal settlement of a pauper, whether sane or insane.

4th. The Act of 1845 (the Pennsylvania Lunatic Hospital Act), and that of 1863 (the West Pennsylvania Hospital Act), are in pari materia, and both acts, in letter and spirit, require notice to be given to poor districts before they can be charged with the expense of keeping and maintaining paupers sent to said hospital.

5th. The plaintiff in error was entitled to notice in this case of the order of removal, and adjudication of settlement of the lunatic pauper at the time, for it could then have shown that his proper relatives were able to maintain this pauper.

6th. A jury of twelve men is not the proper tribunal to pass upon the question of the legal settlemént of a pauper.

7th. Under the authority of Point Township v. Lycoming Township, 2 Rawle 26, and Danville v. Montour, 25 P. F. Smith 35, the defendant below was advised that no evidence could be heard before a jury as to the legal settlement of the pauper, and an opportunity should be given in a new trial to said township to show that the legal settlement of said pauper was not in said township.

8th. If evidence is admissible in the Common Pleas, before a jury, as to the legal settlement of a lunatic pauper, no adjudication of settlement is necessary or requisite in an order of removal to the hospital.

Per Curiam.

And now, January 5th 1880, motion for re-argument refused.