author: Per Curiam.

text:
    O’Rourke versus West Penn Loan and Building Association.
    1. Building associations are not exceptions to the general law governing corporations, that a shareholder cannot sue at law qua shareholder. If he wishes to participate in all the profits of the association he must wait until the corporation winds up the series to which he belongs. If he is not content to await their action, his only remedy is to withdraw and bring a suit at law as a withdrawing stockholder.
    2. It seems, there may be cases where said stockholder may invoke the aid of a court of equity.
    February 27th 1880.
    Before Sharswood, G. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas, No. 3, of Philadelphia county: Of January Term 1880, No. 163.
    Assumpsit by Patrick O’Rourke against the West Penn Loan and Building Association. The defendant pleaded non-assumpsit payment, set off, with leave, &c., and specially “ that it is not true that on the 25th of February 1878, the books and accounts of said corporation would show that the assets thereof were sufficient to divide the sum of $200 to each and every member of the association for each and every share of the first series of the stock of said association held, and which had not been borrowed upon, pledged or transferred; but on the contrary, the said books and accounts plainly show that the assets of the association consist of bonds and mortgages in series subsequent to the first that are payable only in monthly instalments, and that when sufficient of these instalments should be paid in then only would the assets be sufficient to divide $200 among the said shares of stock in the first series: and that, up to this time, sufficient money has not been paid to divide the said sum of $200 among the first series stockholders.”
    Patrick O’Rourke was the owner and holder of ten shares of the first series of stock issued by the defendant, and paid up all the dues upon said stock until, in February 1878, the said series matured or “ ran out.” At the public monthly meeting of said society, held at that time, it was announced by the officers of the said society that the stock of the said first series had “run out,” and that payments of dues thereon should thenceforth eeaso. Subsequently, in November 1878, upon a report being made by the auditors of said association, said defendants printed and issued The Tenth Annual Report of the association, for the year ending October 1878, said report also showing that the said series had run out. The plaintiff demanded payment of the money due him by said association, and afterwards brought an action of assumpsit to recover the sum of $200, with interest, on each of the ten shares held by him. At the trial the plaintiff proved the above facts, when defendant moved for a nonsuit on the ground that the plaintiff was a stockholder in the defendant society, and that being such he could not sue defendant on said stock. The court granted the nonsuit, and subsequently refused to take it off, Yerkes, J., in an opinion saying:
    “ The plaintiff brought his action at law. Upon the trial ho showed that he was the owner of the stock in the building association ; that by the report of auditors, distributed at an annual meeting, in November 1878, each share of stock in the series to which he belonged was worth $200, and that thereafter the officer whose duty it was to receive monthly dues refused to receive them, on the ground that the stock was fully paid up. He was non-suited, upon the ground that the rights which he sought to enforce being those of a stockholder only, he had no remedy at law.
    “ The general principle that a stockholder qua stockholder must resort to a court of equity is conceded by the plaintiff’s counsel, hut he contends that a stockholder in a building association, as soon as his stock is announced to be fully paid, becomes a creditor and ceases to be a stockholder, or that the announcement that the stock is fully paid is equivalent to a declaration of a dividend of the par value of the shares. His proposition, as found in the paper-book, is, ‘ The stock in question increased in value, and continued to be merely stock until the series ran out, after which time it stood in the position of a declared dividend.’
    “It is true that it is the design and practice of associations to wind up as soon as can coveniently he done, after the stock becomes of the value of $200 a share. Stock and loans are cancelled, and cash is paid to the non-borrowers. There is nothing in this to change the status of stockholders. The corporation certainly exists until the final act of dissolution, and to exist there must be stock and stockholders. The argument of ■ the plaintiff would leave no corporation to be sued, and no authority to divide the funds, and the assets would be in the hands of mere individuals. It is no answer to this to say that these associations generally issue several series of stock, and that because of outstanding series the corporation would exist to wind up a series that was fully paid, although stock of that series had ceased to be stock, and its holders had become creditors instead of stockholders, for the association may issue but one series, and these corporations are of limited duration; the time must come with all of them when there will be but one series of stock outstanding. Nor can it be said that the stock of a fully-paid series retains enough of the elements of stock, and its holders sufficiently those of stockholders, to keep alive the corporation, for the purposes of suit, whilst at the same time the stock becomes a debt and the stockholder a creditor, sufficiently to bring the suit. It is not possible for either the stockholder or the stock to have the dual character ascribed.
    “ There is nothing in the acts applicable to this association prescribing the division of assets among the stockholders, nor anything changing the status of the stockholders. Of course, the Act of 1859 limits the duration of the association to twenty years. A dissolution and division must take place then and may take place before. Nothing is said or to be inferred as to the method of winding up when the stock is fully paid. The practical difficulties that are met when the stock is fully paid, were not, perhaps, anticipated in the beginning of these enterprises ; they were certainly not provided against. It is evident that the acts contemplated that all stockholders would become borrowers. If such was the case, the winding up a series would require nothing but a cancellation of the stock and loans, since one would pay the other, unless some of the borrowers had become in default, and the association had purchased the property of the defaulting borrowers on foreclosure, and still held it. It was unforeseen that some of the stockholders would refuse to borrow, and that such refusal would necessitate the loaning of money otherwise than to the shareholders in the series to which the money belonged.
    “ It was in evidence that the association had some sixteen parcels of real estate, of the aggregate value of more than $16,000. As more than half the funds of the association came from the series in question, it is fair to infer that more than half of 'this real estate belonged to that series. This fact shows the absolute impossibility of this association dividing among its non-borrowing members $200 a share immediately upon the stock reaching that value. Much remained for the corporation to do before the series could be wound up. If any of the money was loaned otherwise than upon the stock of the series, there would be another obstaole to the winding up. An immediate conversion of assets would probably result in loss, a result which the association should avoid. Tlie stockholders have the right to share equally in the assets, which would hardly be possible if the association was liable to suit and execution by every shareholder of a fully paid-up series. The assets would be so eaten up by costs of litigation and the forced sales of property, that little would be left for those who camo last.
    “We cannot see that building associations are exceptions to the general law governing corporations — that a shareholder cannot sue at law qua shareholder. It follows that if he wishes to participate in all of the profits of the association, he must wait until the corporation winds up the series to which he belongs. If he is not content to await their action, his only remedy is to withdraw, and to bring a suit at law as a withdrawing stockholder. Of course, there may be cases where he may invoke the aid of a court of equity.”
    “ The plaintiff cited the case of Gormerly v. The Association, 3 W. N. C. 11, where the demurrer was sustained. As no opinion was filed, it is difficult to say what was the exact point decided, but an examination of the bill shows plaintiff averred that he was a creditor of the association, both on account of cash paid as dues on stock and for money advanced. No equity is revealed in the bill, if the plaintiff is considered simply as a creditor. As such he had an ample remedy at law. Had ho based his claim on account of the payment of dues simply upon his rights as a stockholder, and not called himself a creditor, the decision would probably have been different. Upon this ground it seems the court was right in holding that the bill was defective.
    “ Rule to take off non-suit discharged.”
    The plaintiff took this writ, and alleged that the court erred in refusing to take off the non-suit.

      J. Joseph Murphy, for plaintiff in error.
    The claim of a holder of stock which has matured, presents a much stronger case for the exercise of a legal remedy than that of a withdrawing stockholder. When the series has run out, nought remains for the society but payment of a sum which has been declared by the corporation to be due, and which is fixed and determined by law at §200 per share. Upon maturity of the series, the holder of stock ceases to he merely a stockholder, for the reason that after the series has run out he becomes a creditor. As stockholder merely, he might have no legal or equitable remedy, except as laid down by tlie court below, to withdraw, but when the stock runs out, the possession of the stock becomes merely one of the incidents upon which his claim as creditor is based, the running out of the series being the accompanying incident, which together entitle him to demand and receive the sum of §200 per share. A holder of matured stock is not a mere stockholder, as is declared by the court below, as, from the moment the series ran out, he ceased to be entitled to any of the future earnings or profits of the corporation. No assessment or contribution can be required of him, and it has become the duty of the corporation to discontinue his claim by payment. The action was not brought by the plaintiff merely as a stockholder.

      J. Duross O’Bryan, for defendant in error.
    There are numerous cases which distinguish between the right of a creditor and of a stockholder, when these two capacities unite in the same person. That a stockholder may at the same time become a creditor, and as such, sue his corporation, there is no doubt, but it is necessary to make the distinction to entitle him to sue: Angel & Ames on Corporations, sect. 390; Pierce v. Partridge, 3 Metc. 44; Hill v. Manchester Waterworks, 2 B. & A. 545; Dunston v. Imperial Gas Co., 3 B. & Ald. 125; Marine Bank v. Biays, 4 Har. & Johns. 338; Brinham v. Coal Co., 11 Wright 49; United States Building Association v. Silverman, 4 Norris 394; Gormerly v. Association, 3 W. N. C. 11. The remedy for the enforcement of stockholders’ rights is in equity because of the violation of trust: Angel & Ames on Corp., sect. 391; Larkin’s Appeal, 2 Wright 458.
   The judgment of the Supreme Court was entered, March 15th 1880,

Per Curiam.

We affirm this judgment upon the opinion of the learned judge of the court below on the motion to take off the nonsuit.

Judgment affirmed.


source: Caselaw Access Project

author: Mr. Justice Sterrett

license: Public Domain

text:
    Linnard’s Appeal.
    1. The will of L., consisting of an original paper dated December 5th 1877, ¡ executed in the presence of two subscribing witnesses and of four codicils signed by her, but not dated or witnessed, was admitted to probate September 26th 1878. Some time after its execution the testatrix made several alterations in her will by drawing a pen transversely across the words creating some of the legacies, and one bequest in the seventh clause she altered by drawing her pen across the word “ five,” and writing over it the word “ three,” and also placing the numeral “ 3” both above and beneath the erased word. Afterwards she signed what appeared to be her first codicil. Other codicils followed in their order, without date or subscribing witnesses. The probate exhibited the erasures, and all the alterations were distinctly legible. The court below held that in the absence of proof of re-execution of the will after the alteration in the seventh clause was made, the substitution could not be sustained. Held (reversing the court below), that while the erasures in the other clauses of the will were evidently intended to operate as a cancellation of her will as to those bequests, no such intention could be inferred from the erasure and interlineation in the seventh clause, and that they were clearly not intended to revoke the legacy.
    2. Per Sterrett, J. The probate of the will, as we now find it, was an adjudication of its due execution, including by necessary implication, the republieation of the instrument, after the alteration in question was made. This established, prima facie at least, the validity of the legacy, and certainly in the absence of proof that the alteration was made after the last codicil, the legacy should have been permitted to participate in the distribution.
    February 27th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Appeal from the Orphans’ Court of Philadelphia county: Of January Term 1880, No. 153.
    Appeal of Eugene Linnard, trustee of Cornelia Purnell, from the decree of the court in the distribution of the estate of Katherine M. Linnard, deceased.
    Miss Katherine M. Linnard died September 22d 1878, leaving a will dated December 5th 1877, with sundry codicils thereto, which was duly admitted to probate, and letters testamentary issued thereon September 26th 1878.
    By said will she bequeathed in pecuniary legacies nearly $19.000, while the balance for distribution in the hands of the accountant only amounted to $13,521.81.
    By the seventh clause of her will she provided as follows: “ I give three 3 and bequeath to my nephew, Eugene Linnard, the sum of hundred dollars, in trust, to invest and keep invested the same during the life of Cornelia Purnell (Neely), and to pay over the income thereof unto her so long as she may live; and at her decease, I direct that the said sum shall become part of my residuary estate.”
    The auditing judge, Ashman J., in his adjudication in an opinion, inter alia, said: “ Some time after executing her will, the testatrix made various changes in her will by running her pen through several bequests, and in one instance by substituting a different sum for the sum originally written. She did not however re-sign or re-acknowledge the instrument.
    “What amounts to a cancelling of a will, under the thirteenth and fourteenth sections of the Act of 1833, vras carefully discussed by Judge Strong in Evans’s Appeal, 8 P. F. Smith 238. It was there held that cancellation, as distinguished from destruction, implied a preservation of the instrument, but with something on it indicating that it had ceased to be operative, and that such cancellation might be wrought by lines drawn, as in this instance, across the body of the paper. There one entire clause of the will, the signature to the will and codicil, were obliterated, and the word ‘ cancelled’ was written on the back of the paper, and the will was torn. The point is a new one, but the intention of the testatrix to cancel the legacy in the second clause to Eugene Linnard, to Stephen B. Penrose in the sixth clause, and the bequest in the first codicil, is manifest; and the means taken must be held to be effectual. At the same time her intention must be held to be restricted to the revoking of the several legacies thus obliterated, leaving the'will to stand as altered. In the bequest in the seventh clause to Eugene Linnard, the word ‘five’ was erased and ‘three’ written above it, whilst this cancellation of the original amount of the legacy must be held to revoke the legacy, the substitution of the new amount, unaccompanied with a new acknowledgment or signature, cannot be regarded as a valid bequest under the Act of 1833, and Eugene Linnard will take nothing under this clause.”
    Eugene Linnard, legatee and trustee for Cornelia Purnell, excepted to the disallowance of said legacy. After argument upon the exceptions, the court dismissed the same, Hanna, P. J., in an opinion, inter alia, saying:
    “ The will of testatrix, as admitted to probate, bears various marks of alteration of certain bequests intended by her, whereby the words of the bequests are not entirely 'obliterated, but partially obscured by parallel and transverse ink lines, still leaving the words, figures and sentences legible, In the second item, a legacy of $500; in the sixth item, a legacy of $200-; and an entire codicil are all in like manner cancelled. In the seventh item, the word ‘ five ’ is also stricken out, and the word ‘ three ’ written above, and the numeral ‘ 3 ’ both above and beneath, in these particulars only disturbing the structure of the clause as at first transcribed. The auditing judge held, and we think correctly, that the mode of cancellation adopted by testatrix, was a sufficient compliance with the provisions of the Act of April 8th 1833, Purd. Dig. 1476, pl. 16, 17, and that the legacies embraced in the items thus partially obliterated, were to be considered as revoked. Ho specific mode of cancellation is prescribed by the act, and it seems to be purely a matter of intention of the testator. If this is apparent from the means employed, the requirements of the act are fulfilled : Evans’s Appeal, 8 P. F. Smith 238 ; Will of Wm. S. Euguet, dec’d, 32 Leg. Int. 179. But the auditing judge was also of opinion, that the legacy in item seven, wherein the word ‘five’ is partially erased, and ' three ’ written above between the ruled lines, was also revoked, for the reason that the substitution of the word ' three ’ and figure ' 3,’ required a re-acknowledgment by the testatrix to render the bequest valid.
    “After a careful consideration of the subject, we have not been convinced of any error in this conclusion, and the exceptions thereto are dismissed. The testimony shows, that at the time the will was 're-signed,’ it did not contain this alteration; and when it was made by the testatrix, did not appear. From all that was shown to the contrary, it may have been made subsequent to the last codicil; and the Act of 1833 declares expressly, that no will in writing concerning real or personal estate ' shall be repealed, nor shall any devise or direction therein be altered, otherwise than by some other will or codicil in writing,’ etc.”
    From the decree dismissing his exceptions, the appellant took this appeal.

      John R. Read and Silas W. Pettit, for appellant.
    If the will of testatrix in this case cannot take effect as she wrote it, because not re-signed by her after her interlineation of the word “three” over the word “ five,” then the will must be read as originally written when the will was signed and attested by witnesses; and inasmuch as the word “five” is distinctly legible, the appellant is entitled to the legacy of that amount, viz., $500; Dixon’s Appeal, 5 P. F. Smith 427; 1 Redf. on Wills, *324, and cases cited.
    As the only requisite to a valid will in Pennsylvania is signature 44 at the end thereof,” it can make no difference when or where the testatrix made the alteration of the legacy in this case. “Under the former English statute, where personalty passed by a will not attested by witnesses, the testator could alter the same at pleasure, without the presence of witnesses.” Redf. on Wills 308 ; Martins v. Gardiner, 8 Sim. *73.
    No argument nor paper book contra.

   Mr. Justice Sterrett

delivered the opinion of the court, March 30th 1880.

The will of Miss Linnard, consisting of the original paper, dated December 5th 1877, executed in the presence of two subscribing witnesses, and four codicils signed by her but not dated or witnessed, was admitted to probate September 26th 1878, four days after her decease. The original paper was re-signed by the testatrix immediately below and in connection with the attestation clause over date of December 13th 1877. Sometime thereafter she made several changes in her will by drawing a pen transversely across the words creating some of the legacies, and in one instance she substituted a sum different from that originally written. In the seventh item she had given to her nephew, the appellant $500, in trust, to invest and pay the income to Cornelia Purnell during her life, and at her decease the principal to fall into her residuary estate. She altered this bequest by drawing her pen across the word “ five” and writing over it the word “ three,” and also placing the numeral “ 3” both above and beneath the erased word. In a similar manner she erased a clause in the second item, giving a legacy of $500 to Eugene, son of her nephew, John J. Linnard, and, in the sixth, item, a legacy of $200 to another person; and also the second paragraph to the first codicil, together with her signature thereto, in which she had made a different disposition of the $500 legacy stricken out of the second item of the will. After or in connection with the erasure of the paragraph referred to she appears to have completed and signed what now appears as the first codicil. The other codicils, without date or subscribing witnesses, follow in their order. The will as probated exhibits these erasures and alterations; the words erased in the manner above stated are all distinctly legible.

The act of the testatrix in thus striking out the words in the second and sixth items was evidently intended to operate as a cancellation of her will as to these clauses, and was quite sufficient for that purpose; but no such intention can be inferred from the erasure and interlineations in the seventh item. It is very clear that it was not her intention to cancel it, or wholly revoke the legacy. Her object was simply to reduce the amount from $500 to $300; and by holding, as the court did, that, in the absence of proof of re-execution after the alteration was made the substituted legacy could not be sustained her intention was defeated. While the Act of 1833, provides that no will in writing shall be repealed, nor shall any devise or direction therein be altered otherwise than by some other will or codicil in writing, &e., it cannot be doubted that the execution of the second or either of the subsequent codicils, after the alteration, would have the effect of confirming the will as thus altered, and would be a sufficient compliance with the act. A duly executed codicil operates as a republication of the original will so as to make it speak as of the date of the codicil: Coale v. Smith, 4 Barr 376; and, it not only operates as a new adoption of the prior will to which it refers, but also as a revocation of an intermediate will: Neff’s Appeal, 12 Wright 501. In Wikoff’s Appeal, 3 Harris 281, Chief Justice Gibson, speaking of interlineations, proved to be in the handwriting of a testatrix, says: “ The presumption is that they were made at or before the time when the -will was prepared for the final act.” So in the present ease it may fairly bo presumed that the alterations, admitted to be in the handwriting of Miss Linnard, were made before she appended her signature to the last codicil. If this be so, the testamentary paper as altered, including the codicils, speaks as of that date, and should he regarded as her will, properly executed at that time. It is stated as a fact that the alterations were not made before the original paper was re-signed on December 13th 1877 ; but it does not follow from this that they were not made before the last or some of the preceding codicils were executed. Indeed, the fair inference from the paper itself would seem to he that they were made before the second codicil. As has already been observed, the clause stricken out of the first codicil, before it was completed, refers to the cancelled legacy in the second item of the original paper, so that it may be fairly inferred that this was done before the testatrix signed what now stands as the first codicil; and it is quite probable that the alterations in the original paper were all made at the same time. But however that may be the, presumption is that she m.ade them before she affixed her name to the last codicil. Her signature to that having been duly proved should, in the absence of evidence to the contrary, be regarded as her final act.

Moreover, the probate of the will as we now find it, was an adjudication of its due execution, including, by necessary implication, the republication of the instrument after the alteration in question was made. This established, prima facie at least, the validity of the legacy; and certainly, in the absence of proof that the alteration was made after the last codicil, the legacy should have been admitted. The item containing it was not stricken out or obliterated. A single word was erased and another substituted by the testatrix, and the item as thus altered, was adjudged to be a constituent part of lier will. The clauses that were erased, and thus practically cancelled or striken out of the will, were to be regarded in a very different light. They formed no part of the testamentary paper as probated, and were to he treated as though they had never been there. In the distribution of the estate, the will was before the court for construction, and as a guide in determining who were entitled to participate in the fund; -but the question of its duo execution, in whole or in part, did not properly arise in that proceeding. That matter had been adjudicated, and no appeal had been taken. We are of opinion, that the legacy of $300 in question, should have been admitted to participation in the distribution.

Decree reversed and record remitted, with instructions to distribute the fund in accordance with the foregoing opinion. The costs of this appeal to be paid out of the fund for distribution.


text:
    Keely et al. versus Cassidy.
    The principle which governs in all cases of substitution is one of equity merely, and is to be carried out in the exercise of an equitable discretion with a due regard to the legal and equitable rights of others. As subrogation is purely an equitable right it ought to be denied in all cases where its exercise would produce injustice. .
    February 27th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas, No. 3, of Philadelphia, county: Of January Term 1880, No. 152.
    Replevin by Stephen A. Cassidy, assignee, against Robert N. Keely, landlord, and James J. Keating, bailiff.
    In 1876, Patrick Brady made an assignment for the benefit of creditors'to Cassidy, who, as assignee, gave sureties and proceeded to settle up Brady’s estate. On the 19th of January 1877, the landlord of Brady’s place of business distrained for rent which was due on the 1st of January 1877, when Cassidy, the assignee, sued out a writ of replevin. Pending this suit Brady was declared a bankrupt. Cassidy wasted the estate of Brady, and,- as his assignee, was adjudged to pay $10,666, which amount his sureties paid into court. This sum was distributed to Brady’s creditors, and the landlord was paid one year’s rent ($2400) as a preferred creditor. At the trial Keely testified that the rent was paid. The sureties of Cassidy were then subrogated to the rights of the landlord, against the objection of plaintiff. A verdict for $2600 for rent was rendered, and the plaintiff moved for a new trial, which the court granted on the ground that the subrogation should not have been allowed. (See opinion of the court below. — Rep.)
    Upon the new trial the defendants offered to prove that, October 2d 1876, Brady made a voluntary assignment for the benefit of his creditors to Cassidy, and thereunder Messrs. Horan and Thompson become his sureties. That subsequently one O’Neil became surety for Cassidy, assignee of Brady, upon the replevin bond in this case, and offered said bond in evidence prout the same. That the rent distrained for by Robert N. Keely in January 1877, then due and the subject of the present replevin, was $2400 due January 1st 1877, and there were sufficient goods of said assigned estate, upon the premises, liable to distress at that time to pay that rent. That in subsequent proceedings in the District Court of the United States for the Eastern District of Pennsylvania, Brady was adjudicated a bankrupt, and December 21st 1877, a decree was made against Cassidy, his assignee aforesaid, to pay into court $10,133.19 as the amount of said assigned estate for which he was liable, on failure to pay which sum he was placed in custody by the court, and on demand upon Messrs. Horan and Thompson, his sureties, they furnished and paid into court that sum in Cassidy’s name, and that court upon Mr. Keely’s petition claiming said rent due ordered' $2400 to be paid to him, and he received that sum out of said fund in court, being his whole claim on said distress. That this action is prosecuted by Messrs. Horan and Thompson in the name of Robert N. Keely for their use.
    Objected to by plaintiff and objections sustained. The verdict was for plaintiff, and after judgment defendant took this writ and alleged that the court erred in excluding the above evidence.
    On the motion for a new trial, heretofore referred to, the court, Finletter, J., after setting forth the facts as detailed above, proceeded :
    “From this statement it will appear that the $10,666 paid by the sureties were a debt due by the assignee to Brady’s estate ; that the rent was a debt due and paid by Brady’s estate. It was contended that the rent was indirectly paid by the sureties; that the replevin prevented the payment of the rent out of the property distrained upon, and thereby the sureties were injured by the act of the sureties upon the replevin bond; that even if they have no right to be subrogated as against the sureties upon the replevin bond, they should be subrogated as against Cassidy. The general principle upon which subrogation rests is that, whenever any one pays a debt for which he is liable as surety or guarantor, it is equitable that he should be substituted in place of the creditor : Brandt on Suretyship 351. This principle is fully recognised in our decisions, not only as against the principal debtor, but also against a subsequent surety who, by his interposition, got time for the principal debtor to the prejudice of the prior surety : 13 Wright 29 ; McCormick’s Adm. v. Erwin, 11 Casey 111; Pott v. Nathans, 1 W. & S. 155; Burns v. Huntingdon Bank, 1 P. & W. 394. In Mosier’s Appeal, 6 P. F. Smith 81, Thompson, J., extends the doctrine as applicable to all cases where a payment has been made under a legitimate and fair effort to protect the ascertained interests of the party paying, a,nd whore intervening rights are not legally jeoparded or defeated. It is, however, well settled that a mere stranger or volunteer who pays a debt cannot thus be subrogated to the rights of a creditor: Brandt on Suretyship 351; Hoover v. Elder, 2 P. F. Smith 524; Mosier’s Appeal, 6 Id. 81; Wallace’s Estate, 9 Id. 406 ; McGinnis’s Appeal,4 Harris 448 ; Irwin’s Appeal, 11 Casey 294. It is hardly practicable to define the term “ volunteer” in this regard. In Mosier’s Appeal, supra, Thompson, J., indicates classes which may not be regarded as volunteers ; and from Wallace’s Estate, supra, it may be inferred that a “ volunteer” is one who, without legal or moral obligation, pays the debt of another. The principle which governs in all cases of substitution is one of equity merely, and is to be carried out in the exercise of an equitable discretion with a due regard to the legal and equitable rights of others. It is not to he used to overthrow the equity of another and thus work injustice: McGinnis’s Appeal, 4 Harris 448; Lloyd v. Galbraith, 8 Casey 103; Zeigler v. Long, 2 Watts 206; Hancock v. Steen, 2 Miles 273; Wallace’s Estate, 9 P. F. Smith 405. It would seem from our authorities that a claim for subrogation to be successful must arise from the payment of a debt from legal or moral obligation, or interest, and must be equitable and work no injustice or hardship. How does the claim of the sureties of the assignee stand this test ? They were in no way responsible for the rent, or interested in its payment; nor did they pay it. They paid only Cassidy’s individual debt. To subrogate them would be to make Brady’s estate, or the sureties for Brady’s estate, pay for the wrongful acts of the assignee against that estate. It is claimed, however, that in any event they should be subrogated against Cassidy. If he were individually and alone interested in the application, it might be allowed, as he does not object. But he is not. He is only interested as assignee of Brady’s estate, and subrogation against him in this proceeding is subrogation against the estate. Even if he were individually interested, he is not alone interested. -It is the avowed purpose of the application, and there could be no other, eventually to make the sureties upon the replevin bond responsible. If it be successful, these sureties would be subjected to a suit, and to the liability of paying the rent. In that event they would have recourse against the estate. The result would be that the creditors of the estate would be compelled to pay for Cassidy’s appropriation of its funds for the relief of those who enabled him to plunder the estate.
    “As subrogation is purely an equitable right, we ought to deny it in all cases where its exercises would produce such injustice. Under these views we have come to the conclusion that we erred in allowing the subrogation. The rule for a new trial is made absolute.”

      George L. Crawford, for plaintiffs in error.
    A security is entitled to subrogation against one who becomes answerable for the debt subsequently, as bail in error or for stay of execution, &c. : 2 White & Tudor’s Leading Cases in Equity, 4th Amer. ed. 280 ; 1 Id. 156. The principal in a bond being arrested gave bail, and judgment was had against the bail. The sureties in the original bond, being sued on it, paid the money and filed a bill, whereon it was decreed, that the judgment against the bail should be assigned to them to reimburse what they paid with interest and costs : Parsons v. Braddock, 2 Vern. 608, affirmed by Sir William Grant in Wright v. Morely, 11 Vesey 222.
    This is enforced on the principle that a surety paying a debt is entitled to all additional securities obtained by the creditor from the principal debtor, and that the interposition of the second security may have been the means of involving the first in the ultimate liability to pay: Burns v. Huntingdon Bank, 1 P. & W. 395; Pott v. Nathans, 1 W. & S. 155; McCormick’s Adm’r v. Irwin, 11 Casey 111; Lloyd v. Barr, 1 Jones 41 ; Ward v. Tyler, 2 P. F. Smith 398; Cornwell’s Appeal, 7 W. & S. 308.

      William Gorman and Thomas J. Diehl, for defendant in error.
    The rule of subrogation is founded upon the fact that the surety paid the debt for the principal, and having so paid, is entitled to he subrogated as against him and his rights. Who is the principal here ? Brady ? Brady’s estate owes the rent; he is the debtor ; his estate has to pay, and did pay. Now, if the sureties are subrogated, it must be against Brady and his estate; they are sureties for Cassidy, assignee of Brady’s estate, and if he is their principal, then they must occupy his place as claimants upon the fund. Can they do this ? The landlord is paid out of the assigned estate. If they are entitled to subrogation in this one instance, they are on the same principle entitled to be subrogated to all the rights of the creditors of Brady, because they aver that they paid all the money into the United States court that after-wards went to pay the landlord and the other creditors of Brady’s estate. The doctrine of subrogation, being one of mere equity and benevolence, will not be enforced at the expense of a legal right: Fink v. Mahaffy, 8 Watts 384. It will never be allowed unless the party applying for it has greater equity than the party opposing it: Neff v. Miller, 8 Barr 351; Goswiler’s Estate, 3 P. & W. 203; Himes v. Keller, 3 W. & S. 401; In re McGill, 6 Barr 504; Lloyd et al. v. Galbraith et al., 8 Casey 103; McCormick’s Administrators v. Irwin, 11 Id. 117.
   The judgment of the Supreme Court was entered March 15th 1880,

Per Curiam.

We affirm this judgment upon tho opinion of the learned judge of the court below on the rule for a now trial.

Judgment affirmed.


author: Mr. Justice Mercur

text:
    The Germania Building Association, Garnishee of Veigel, versus Neill.
    1. While a sheriff's sale on a mortgage divests its lien on the land covered thereby, and a purchase at such sale by the holder of a prior mortgage may operate to extinguish the lien of his prior mortgage on the land sold, and may prevent any further proceedings on the mortgage, yet it does not necessarily operate as a payment or extinguishment of the debt or bond which the mortgage was given to secure. Its effect depends on the agreement and intention of the parties.
    2. Y. held twenty-five shares in a building association from which he secured three loans, one of $2000 in 1875, one of $1000 in 1876 and another of $2000 in 1877. To secure the payment thereof he gave a bond and executed a mortgage for each loan, all the mortgages being on the same lands. He also transferred as collateral security his stock in said association, ten, five and ten shares on each loan respectively. While he stood in this relation to the society, N. obtained a judgment against V., and issued an attachment-execution thereon. Y. becoming in arrears to the association, it issued a scire facias on the third mortgage and sold the land subject to the first two mortgages, the association becoming the purchaser. It was contended by the attaching creditor that all the bonds and mortgages which the association held were thereby extinguished and satisfied, and the stock should revert to V. Meld, reversing the court below, that as it wan manifestly not the intention of the parties that the stock should revert to V. before the loan was actually paid, the purchase by the association did not have that effect.
    February 27th 1880.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas, No. 4, of Philadelphia county: Of January Term 1880, No. 171.
    Case stated, wherein William Neill was plaintiff and Jacob Veigel, defendant, and The Germania Building Association No. 3, garnishees.
    The case as stated was, in'substance, as follows :
    That on the 26th of’January 1878, the plaintiff obtained judgment against the defendant for $289.27; and on February 23d 1878, an attachment was issued upon this judgment against the Germania Building Association No. 3,’ and served the, same day. That before and at the time of the service of the attachment on the garnishees, the defendant owned and held twenty-five shares of stock in garnishees’ association, subject to the rights of the garnishees, as hereinafter stated.
    That on or about the 18th of February. 1875, the defendant, Veigel, received a loan of $2000, for which he had executed and delivered a bond and mortgage dated January 28th 1875, secured on two properties on the west side of American street above Columbia avenue; and on the 18th of February 1875, transferred ten shares of his stock to the association garnishees, as collateral security for said loan. That defendant about the 21st of November 1876, received another loan of $1000 from the association, for which he had executed and delivered another bond and mortgage, dated August 25th 1876, and secured upon the same two properties; and on the 21st of November 1876, transferred five shares of his stock as collateral security for said loan ; and about the 3d of January 1877, another loan of §2000, for which he delivered another bond and mortgage, dated the 15th of November 1876, secured upon same properties and certain lots of ground on Tioga street; and on the said 3d of January 1877, defendant transferred ten. shares of his stock to the association as collateral security for said loan.
    That the defendant became six months in arrears with the payment of his interest and monthly dues, on the 4th of June 1878; whereupon the said association garnishees, on the 29th of June 1878, issued a sci. fa. on the third and last-mentioned mortgage, under and by virtue of which proceedings, the said premises were sold by the sheriff, subject to the said two prior mortgages of $2000 and §1000; and the garnishees became the purchasers thereof, subject to the two mortgages, which said sale realized to the garnishees the sum of §840.24, leaving still due and unpaid by the defendant on account of his said loan, the sum of $4159.76.
    That in the month of December 1877, the withdrawal value of said twenty-five shares of stock was §1058.84, and the amount paid in by the defendant was $925.
    If the conrt be of the opinion that by the sale of the said premises as aforesaid, and the purchase thereof by the garnishees, subject to the first and second mortgages, that the debts thereby secured became paid, merged and extinguished, or that the defendant became entitled to a re-assignment of the fifteen shares of stock assigned as collateral security for the loans on the first and second mortgages, then judgment to be entered against the garnishees and in favor of the plaintiff for the amount of his judgment and costs, otherwise judgment for the garnishees.
    The court entered judgment in favor of plaintiff for $289,27, the amount of his original judgment against defendant. No opinion was filed. This action of the court in entering judgment for plaintiff was assigned for error by the association, which took this writ.

      J. P. Klinges and A. C. Selden, for plaintiff in error.
    A creditor cannot be compelled to give up his collateral unless the debt secured thereby is paid. He may hold an unlimited number of collaterals, and avail himself of any of them as long as his debt remains unpaid : Ayers v. Wattson, 7 P. F. Smith 364. The association could sue out either of their mortgages until they realized their whole claim: Taylor’s Appeal, 3 W. N. C. 75. As a merger is for the benefit of him in whom the two interests unite it will never take place when it is against his interest, or where it is most to his interest to keep the charge alive: Wallace v. Blair, 1 Grant 75; Dougherty v. Jack, 5 Watts 456 ; Helmbold v. Man, 4 Whart. 410 ; Pierce v. Potter, 7 Watts 475; Moore v. Bank, 8 Id. 138. Even if the two estates did merge it would only be an extinguishment of the one security and not a satisfaction of the bonds.

      Robert Ingram and Walter J. Budd, for defendant m error.
    The mortgages were certainly merged and satisfied, and the garnishees can have no claim upon Yeigel’s bonds for-the payment of the mortgage-debts. They being the owners of the mortgages, and purchasing the property they became the owners of the fee and the equity of redemption. The mortgage-debts therefore necessarily became extinguished or satisfied: Brown v. Simpson, 2 Watts 233; Purviance v. Lemmon, 16 S. & R. 292; Koons v. Hartman, 7 Watts 20; Fluck v. Hagar, 1 P. F. Smith 459.
   Mr. Justice Mercur

delivered the opinion of the court, May 3d 1880.

Yeigel held twenty-five shares of stock in the building association. He made three loans from the association: one of $2000, in 1875; one of $1000, in 1876 ; and one of $2000, in 1877. To secure the payment thereof, he gave a bond and executed a mortgage for each loan, all the mortgages being on the same lands. He also transfered as collateral security some stock : that is, ten shares on his first loan, five shares on his second, and ten shares on his third loan.

While Yeigel and the association sustained-this relation towards each other, the defendant in error obtained a judgment against Yeigel, and issued this attachment-execution thereon against the association. At that time the amount paid in by Yeigel was $925, and the withdrawal value of the twenty-five shares was $1058.84.

It is very clear when the attachment was served the association had a'right to hold all the stock, as well as the bonds and mortgages, to sectire the payment of the loans. Yeigel afterwards became six months in arrears in the payment of his interest and monthly dues; the association issued a scire facias on the third mortgage, and by virtue of proceedings thereon the premises were sold by the sheriff, subject to the two prior mortgages, and the association became the purchaser thereof. It realized by the sale the sum of $840.24, leaving still due and unpaid by Yeigel the sum of $4159.76.

The question now is whether this sale and purchase, as made, had the effect of causing the fifteen shares of stock to revert to Yeigel. In other words, whether, by operation of law, all the bonds and. mortgages which the association held against Yeigel were so satisfied and extinguished that it had no right to retain the stock longer, and Yeigel was entitled to a re-assignment. The learned judge, without filing any opinion, entered judgment on the case stated in favor of the attaching creditor.

There is not entire harmony and consistency between different parts of the case stated. Thus in one part it is expressly stated that after the sum realized by the association from the sheriff’s sale, it left “still due and unpaid by the defendant (Veigel) on account of his said loans, the sum of $4159.76.” In another part it submits to the court whether by the sale and purchase the debts secured by the first and second mortgages had not “ thereby become paid, merged and extinguished.”

While a sheriff’s sale on a mortgage divests its lien on the land covered thereby, and while a purchase at such sale by the holder of a prior mortgage may operate to extinguish the lien of his prior mortgage on the land sold, and may prevent any further proceedings on the mortgage, yet it does not necessarily operate as a payment or extinguishment of the debt or bond which the mortgage was given to secure ; its effect depends on the agreement and intention of the parties: Moore v. Harrisburg Bank, 8 Watts 138; Fleming v. Parry, 12 Harris 47. In the making of this loan the facts prove the parties thereto did not intend that the land mortgaged should be the only security. Further security was required and given. There was no agreement whereby the stock should revert to Veigel before the loan was actually paid. The manner of sale negatives all intention to give up any security hold by the association. It is further shown that after the sheriff’s sale, the sum remaining unpaid on the bond secured by the last mortgage, exceeds the value of the whole twenty-five shares of stock. The association claim to hold this stock, and that they have, in fact, applied it on the indebtedness thus due from Veigel. If the latter had brought suit to recover the value of this stock, while this last bond alone was outstanding against him, the association could have successfully defended. In view of the whole character of the transaction, and the admitted facts, we do not think the attaching creditor stands on any higher ground than Veigel occupied.

Judgment reversed, and judgment entered in favor of the plaintiff in error, according to the case stated.


author: Mr. Justice Gordon

text:
    Morrison’s Appeal.
    The firm of B. & Co. was composed of B. and L. The firm dissolved October 1st 1872, by the withdrawal of L. B. continued the business under the old name of B. So Co. At the dissolution, B. executed his bond to L. in the sum of $20,000 in full consideration of L.’s interest in the firm assets. Five thousand dollars of this sum were afterwards paid. It was further agreed that B. So Co. should, from time to time, make and deliver to L. accommodation notes and renewals thereof, L. binding himself to protect the same as they matured. At this time L. was carrying on a separate business of his own under the name of L. So W. In 1874 L. associated with him as partners T. So M., and this new firm continued the name of L. So IV. As the accommodation notes matured, they were renewed by B. & Co. in favor of L. So IV., and were discounted by various banks to the credit of L. So IV. B. So Co. made an assignment for the benefit of creditors September 1st 1876. In December 1875, L. So W. were adjudged bankrupts. Notes to the amount of $22,000 against B. & Co. were proved. From the evidence before the auditor of the account of the assignee of B. So Co., it appeared that B. & Co. had received no consideration for furnishing said notes, and that the banks were bona fide holders for value. These notes, the auditor reported, were but duplications of the $15,000 due on the bond. The banks proved the notes when M. of the firm of L. So IV., and who was the vendee of the assignee in bankruptcy of L. So IV., offered to prove before the auditor a claim for $2743.78 for merchandise of L. & IV against B. & Co. The banks objected, as the debt claimed on was represented by the notes. It appeared that M. knew of the accommodation notes, and that four of the notes discounted had been endorsed by himself. The auditor held that inasmuch as notes for more than $22,000 had been proved against B. & Co. for the accommodation, without consideration of L. & IV., the claim of L. & IV. held by Mj must be disallowed, which ruling the court sustained. Held, that this was error, that as the paper was issued originally for the benefit of L., and was afterwards, from time to time, renewed by B. So Co., and discounted on the endorsements of L. & W. for the sole purpose of lifting the originals or preceding notes, L. So IV. did not owe B. & Co. anything, and the claim of M. should have been allowed.
    February 27th 1880.
    Before Shaeswood, C. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J., absent.
    Appeal from the Court of Common Pleas No. 1, of Philadelphia county: Of January Term 1880, No. 36.
    Appeal of James F. Morrison from the decree of the court dismissing the exceptions to the report of the auditor of the account of William P. Kildare, assignee of William H. Boner & Co., for the benefit of creditors. The auditor reported the facts as follows :
    “ William II. Boner, trading as William H. Boner & Co., made a voluntary assignment for the benefit of creditors to William P. Kildare, on the 1st of September 1876.
    “ The firm of William H. Boner & Co., was formerly composed of William H. Boner and Julius Lee. On October 1st 1872, the said partnership was dissolved, by the withdrawal of Lee, Boner agreeing to continue the business under the name of the old firm. In consideration of Lee’s withdrawal, the new firm of William H. Boner & Co. executed and delivered to Lee a scire facias bond for $20,000, payable in instalments within ten years, which was the full and only consideration for the transfer of the stock and business to William H. Boner & Co. On this bond, $5000 were consequently paid by William II. Boner & Co.
    “It was further agreed by the parties, that William H. Boner & Co. should from time to time make and deliver to Lee, accommodation notes and renewals thereof, Lee binding himself to protect the same as they matured. William H. Boner & Co., in accordance with this agreement, gave from time to time their accommodation notes and renewals thereof, in favor of Lee & Walker, composed of Julius Lee, who, in the course of their business, had them discounted at various hanks.
    “ On January 1st 1874, by articles of agreement, William N. Toy and James F. Morrison became members of the firm of Lee & Walker. William II. Boner & Co. continued, whenever called upon, to give their accommodation notes and renewals thereof, in favor of Lee & Walker. On January 9th 1875, Julius Lee died, but, according to the articles of partnership, the firm of Lee & Walker continued. As the accommodation notes matured they were renewed by William 11. Boner & Co., in favor of Lee & Walker, and/were discounted by various banks, to the credit of Lee & Walker. In December 1875, Lee & Walker were adjudged bankrupts, when these notes were proved against the estate, and a small dividend was received thereon. They are now proved to the extent of $22,094.88 against William II. Boner & Co., the accommodation makers, by the Philadelphia National Bank, Commonwealth National Bank and Drexel & Co., who discounted them in the regular course of business, and placed the proceeds to the credit of Lee & Walker. From the evidence it clearly appears, that William II. Boner & Co. received no consideration for furnishing the said notes, and that the said banks are bona fide holders for value. As has already been stated, the scire facias bond for $20,000, was the full and only consideration for the transfer of stock and business to William H. Boner & Co. The accommodation notes, amounting to $22,094.88, made in pursuance of the agreement of the parties, are really but duplications of the indebtedness of $15,000 on the bond which was not entered up against William H. Boner & Co. The various banks having proved these notes, Mr. Morrison, of the firm of Lee & Walker, and the vendee of the assignee in bankruptcy of the said firm, offered to prove a claim for merchandise of Lee & Walker, amounting to $2743.78 against William II. Boner & Co. This was objected to by the banks, as the debt claimed on was represented by the notes, and had already been proved. It also appears that Mr. Morrison had full knowledge of the circumstances connected with the issuance of the accommodation notes, and that his firm had received the proceeds of them. Four of the notes discounted by the Philadelphia National Bank were endorsed by Mr. Morrison himself, and one by Mr. Toy, his partner.
    “ Now, inasmuch as notes amounting to more than $22,000, have been proved against William H. Boner & Co., on account of their accommodation without any consideration of Lee & Walker, the claim of Lee & Walker for $2743.78, held by Mr. Morrison, must be disallowed.”
    Morrison filed exceptions to this report, alleging that the auditor erred: 1. In disallowing the claim of Morrison. 2. In not reporting as a material fact proved, that the last firm of Lee & Walker, composed of Julius Lee, William N. Toy and James F. Morrison, who sold the goods for which the said claim was presented, did not assume to pay, and were not liable to pay the prior debt or liabilities of Julius Lee individually, or of Julius Lee alone, trading under the name of Julius Lee. 3. In not reporting as a material fact proved, that the notes of the banks stated in the report, were only given in renewal of notes, or for original notes upon which only Julius Lee and William H. Boner were liable, and upon which the new or last firm of Lee & Walker were not liable. 4. In not reporting as a material fact proved, that said new firm, in fact, have not received from the banks any of the moneys lent to them on their notes ; but the money lent, was by arrangement with the banks, retained and applied by the banks to pay, take up, or renew notes upon which only Julius Lee and William H. Boner were responsible ; and so that, it would appear, that although as between the banks and the parties on the notes, said Boner was apparently an accommodating party thereon, as between the firm and Boner, the firm, in fact, thereby accommodated Boner by paying, at his request, the notes on which he was liable, with their money borrowed from the banks, and without any consideration moving from Boner to the firm for that accommodation. 5. In sustaining the objection of the Philadelphia Bank, that the claim of the said James F. Morrison was paid by the notes to the bank, there being no testimony or evidence to ’warrant such conclusion, the facts being, that the claim now presented was for goods sold by the new firm to Boner, and that the notes were only given for money lent by the banks to the firm. 6. Because there was no evidence that William H. Boner, or his assignee, ever paid any of the notes of the banks as a foundation for a cross claim against Lee & Walker. 7. That the learned auditor erred in not holding, that as against what should be allowed to the banks in the shape of dividends of Boner’s estate, and the claim of that estate against Lee & Walker for that allowance (for the amount thereof), there should be set off or considered the counter claim of Julius Lee’s estate for the $15,000, balance due on said bond, as the loans to Julius Lee individually were the only consideration for the notes.

      The court, without delivering an opinion, dismissed the exceptions and confirmed the report.
    From this decree this appeal was taken.

      R. P. White, for appellant.
    The notes in question were not accommodation notes at all, but were given for a bona fide indebtedness of Boner to Julius Lee, trading as Lee & Walker, and were collateral to Boner’s bond for $20,000. Whether accommodation or not, the notes were issued to and used for the benefit of Julius Lee individually, trading under the name of Lee & Walker, whereas the claim presented by Morrison was for goods sold to a firm of the same name, but subsequently formed, and consisting of Julius Lee, William N. Toy and James F. Morrison, trading as Lee & Walker. The lattter firm was in no way responsible for the debts of the former: Babcock v. Stewart, 8 P. F. Smith 179 ; Shamburg v. Ruggles, 2 Norris 148.
    Boner received consideration for furnishing the promissory notes of $22,094.88, inasmuch as his agreement to issue and renew these notes, as required, was a part of the consideration which he gave for Julius Lee’s interest in the firm of W. H. Boner & Co.
    It was an undisputed fact in the case that the original notes of the series were made and delivered to Julius Lee, trading as Lee & Walker, No. 1, before Morrison’s firm was formed, and that all the other notes wore mere renewals, the proceeds of each being used exclusively for the purpose of taking up its predecessor, Lee & Walker, No. 2, not receiving the benefit.

      Samuel B. Huey, for appellee.
    The vendee at the assignee’s sale was not a stranger, but Morrison, the former bookkeeper, the financial partner of Lee & Walker, one of the bankrupts who signed and swore to the bankruptcy schedules, and he took such title as he has charged with the fullest possible knowledge of all the circumstances of the case.
    If Lee & Walker, No. 2, did not assume the liabilities of Lee & Walker, No. 1, and lienee did not assume payments of the notes in question, why did not Morrison & Toy charge the notes to the individual account of Julius Lee, and close the books? Why did they solicit new notes from W. II. Boner & Co., and endorse and use the same, Mr. Morrison himself endorsing four of the five of the Philadelphia Bank, and the firm receiving the proceeds of the discount of the renewals ? And why did they pay the obligations of Lee & Walker, No. 1, as they matured?
    The Philadelphia Bank proved for $7745.30, and on. January 18th 1875, nine days after the death of Julius Lee, his executor drew a check on the Philadelphia Bank for $7849.83, and gave it to William N. Toy and James F. Morrison, who endorsed and used it. This was a cash transaction, and effectually disposes of the plea of no consideration.
   Mr. Justice Gordon

delivered the opinion of the court, May 3d 1880.

If we assume as true the facts found by the auditor, both his conclusion and that of the court are correct. For if indeed the notes of Boner, amounting now to some $22,000, were made and discounted for the firm of Lee & Walker, the claim of this firm, now in the hands of the appellant, amounting to $2743.78, cannot be allowed to participate in the distribution of the funds raised from the insolvent estate of Boner, and this for the very good reason that this estate is being compelled to pay for Lee & Walker a sum much larger than their claim. This conclusion, however, depends upon the fact, already stated, that the notes of Boner & Co. (Boner), now held by the Commonwealth National Bank and others, were made for the accommodation of Lee & Walker. On the other hand, if this pap.er was issued originally for the benefit of Julius Lee, and was afterwards, from time to time, renewed by Boner & Co., and discounted on the endorsements of Lee & Walker for the sole purpose of lifting the original or preceding notes, then it is just as clear that Lee & Walker owed Boner nothing, and the appellant’s claim ought to have had its share of the fund.

How, then, are the facts? For upon them the case depends; about the law there is no dispute. We gather from the testimony and the auditor’s report the following: There was the firm of William H. Boner & Co., composed of Boner and Julius Lee. This firm was dissolved on the 1st of October 1872, by the withdrawal of Lee, Boner, however, continuing the business under the old name of William II. Boner & Co. At the time of. this dissolution, Boner executed his bond to Lee in the sum of $20,000, in full consideration of Lee’s interest in the firm’s assets ; $5000 of this were afterwards paid. Furthermore, it was agreed by the parties that Boner & Co. (Boner) should, from time to time, make, and deliver to Lee, accommodation notes and renewals thereof, Lee, on the other hand, binding himself to protect the same as they matured. At this time, Julius Lee was carrying on a separate business of his own under the name of Lee & Walker. Afterwards, in the year 1874, Lee associated with himself as partners William N. Toy and James F. Morrison, the appellant, and this new firm continued the name of Lee & Walker. The claim in controversy originated from the indebtedness of Boner to this latter firm. Again, the auditor finds, and in this he is supported by the facts of the ease, “ that the accommodation notes, amounting to $22,094.88, made in pursuance of the agreement of the parties, are really but duplications of the indebtedness of 15,000 on the bond, which was not entered up against William H. Boner & Co.” In other words, the notes now sought to be charged against Lee & Walker were in fact made for the benefit of Julius Lee, and had for their consideration, in part, the unpaid balance of the Boner bond. Originally, therefore, the company last named had nothing whatever to do with these notes.; indeed, it does not appear that it was in existence when they were issued. It follows unless on some consideration, moving from Lee or Boner, Lee & Walker assumed the payment of these notes, the auditor was wrong in his finding: Babcock v. Stewart, 8 P. F. Smith 179; Shamburg v. Ruggles, 2 Norris 148. The auditor says Morrison had full knowledge of the issuance of these accommodation notes, and that his firm received the proceeds. To be sure, Morrison and his firm knew all about these notes and their renewals, for the latter were discounted on their endorsements, but that they received the proceeds to their own use is quite another question.

The only testimony on this subject is that of Morrison himself, and he says that the present notes were renewals of former ones similarly drawn, and that the proceeds were used to pay these former notes; that the money raised on the original notes, which were drawn to Julius Lee, as Lee & Walker, went to the use of Lee alone; that the new firm endorsed the renewals in order to lift the originals, and that his firm had the use of none of the proceeds thereof, neither was there any consideration for such endorsements from either Boner or Lee. How, under this evidence, the auditor could find an indebtedness from Lee & Walker to Boner is something I cannot understand. Such indebtedness certainly could not have originated from the endorsements by that firm of Boner’s paper by which, from time to time, it was saved from protest. And yet this seems to be all Lee & Walker had to do with this paper.

An attempt has been made to make something out of the fact that, in January 1875, the executor of Julius Lee gave his check to Lee & Walker, on the Philadelphia National Bank, for some $7800. But we cannot understand how this helps the matter. Mr. Smith, the executor, says, this money belonged to the firm of Lee & Walker, and the other partners having no right to draw chocks he drew as executor. This means nothing more than that the surviving partners were put into the possession of money belonging to their own firm, but it certainly does not prove an indebtedness by that firm to either Leo or Boner. '

The conclusion, then, is irresistible, that the court below erred in adopting the auditor’s report, in so far as it excludes the claim of the appellant from a participation in the fund for distribution.

It is now ordered that the decree of the court below be reversed; that a new distribution be had in accordance with the above opinion, and that the appellees pay the costs of this appeal.


text:
    City of Allentown versus Hower.
    1. Where the registration of a lien for water taxes recites neither the location nor the description of real estate, it is defective and insufficient to support a scire facias.
    2. Registration, for the purpose of notice, as well as remedy, should contain at least a brief description, including location, of the property assessed, giving the name of the owner or reputed owner, the amount of the assessment, its date and for what assessed.
    3. To make a proceeding by scire facias available it is necessary that the property, against which the lien is sought to be enforced, should be designated with such certainty as to enable the sheriff to execute the levari facias, but it is unnecessary to conform strictly to all the requisites of a mechanic’s lien. The name of the contractor or material man need not be given, nor is a bill of particulars necessary.
    4. The Act of April 21st 1858 is a general act under which amendments are allowable. Such acts are to be liberally construed, and while amendments are not matter of right, they should be allowed where it can be done without prejudice to intervening rights.
    March 1st 1880.
    Before Sharswood, C. J., Mercur, Gordron, Paxson, Trunkey, and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas, of Lehigh county: Of January Term 1880, No. 67.
    Scire facias sur municipal claim by the City of Allentown against Harrison Hower for water-frontage tax.
    The City of Allentown was incorporated under a special act of Assembly, approved March 12th 1867. On September 8th 1874, the city surrendered its charter, and accepted the provisions of the act entitled “An Act dividing the cities of this State into three classes,” he., approved May 23d 1874. In the year 1875, the Avater commissioners of the city passed a resolution providing for the extension of the water-pipes of AllentoAvn. In pursuance of said resolution, during the year 1875, the water-pipes were laid along Walnut street in front of the premises of the defendant, and the number of feet of main pipe laid through said street was filed in the department. At the same time the clerk of the said department made out a list of the OAvners of all the houses, lots and buildings on each side of said street, and charged each of said owners such rate per foot as had been fixed by ordinance. The tax was then placed in the hands of the city treasurer for collection, and the names of such persons as had not paid the tax within six months were handed over by the city treasurer to the city solicitor, who, in January 1876, had said amount of taxes registered against the parties who had refused to pay. On March 8th 1876 a scire facias was issued by the city solicitor, upon which scire facias judgment was entered May 6th 1876. On April 29th 1876, the court granted a rule on plaintiff to show cause why the writ of scire facias, sur lien No. 1011, should not be quashed. On July 3d 1876, the court (Judge Longaker then presiding) quashed all the proceedings had upon said scire facias. On the 13th of January 1879, a rule was granted upon the plaintiff to show cause why the lien for the tax should not be stricken off; and July 8th 1879, a rule was taken by the present city solicitor to show cause why lien should not be amended as per petition filed. The rule to amend and the rule to strike off the lien were argued together, on October 10th 1879. On the 24th of October 1879, the court, Albright, P. J., made the rule to strike off the lien absolute, and discharged the rule, in an opinion, inter alia, saying:
    “ It is well known, that lots in an incorporated city are liable to various charges. It would have been equally convenient to have provided, that the books in the proper office of the city government, should furnish the information as to whether or not certain charges had been paid. It is hardly necessary to multiply arguments on this point. The claim filed in the prothonotary’s office, is enforcible by an action of debt or by scire facias, as in the case of a mechanic’s lien. If the proceeding is by sci. fa. it is a proceeding in rem. But so far as the record of this claim is concerned, where is the thing which is proceeded against ? Nothing can be included in a scire facias except what the record shows; that is, the matters contained in the claim filed. The levari facias must follow the sci. fa., or it must command the levying of the debt from the land or a portion thereof, which the record shows is subject to the said debt.
    “ These claims should contain a.11 the matters essential to constitute a valid claim under the mechanic’s lien laws ; dates, amounts, names of owners, description of ground charged, &c. It has been said often, that where an extraordinary remedy is given by statute, which is in derogation of the right of the parties at common law, such as claims for work or materials, for wages, &c., the statutory provisions must be strictly pursued.
    “ The form of claim which the city solicitor seeks to substitute for the one first filed, seems to be such as the law contemplates. But there is nothing to amend by. The very substance of a valid claim is wanting, i. e., the thing to which it is to attach.
    “ It has been intimated, that even if the claim filed is insufficient to support a sci. fa., that it might stand as a foundation for an action for debt. This position is not tenable. The purpose of the statute is, that the claim shall be such as will support a proceeding in either form.”
    The city took this writ and alleged, that the court erred in striking off the lien as asked for by the defendant; and, in not allowing the amendment prayed for by the plaintiff.

      R. E. Wright, Jr. and J. M. Kessler, City Solicitor, for plaintiff in error.
    The court below erred, when it decided that the registry of the tax which Harrison Ilower owes the city of Allentown, was not such a registry as was contemplated by the Act of

      May 23d 1874; and in deciding, that before a city tax can become a lien upon real estate situate within its bounds, the city must file a lien in the nature of a mechanic’s lien. Should we be wrong in this position and the court below right, it is contended, that the court below erred in saying, that the registration could not be amended under the Act of April 21st 1858, which indubitably gives that right of amending; and in applying the same close discrimination and strict laws of interpretation in the construction of the charter, made for the benefit of a municipality, that are wont to be used in determining the meaning of laws applying only to individuals.

      Edward Harvey, for defendant in error.
    The registry shows the name, date and amount; but no location — no street — no ward —and it does not show that any pipes were laid along the property. If the sheriff could not find the lot to levy upon, except by conjecture, how could a judgment be entered in the proceeding that would enable him to sell it ?
    The lien was fatally defective: City v. Wood, 4 Phila. 156; Pittsburgh v. Cluley, 16 P. F. Smith 449 ; Commissioners v. Flanigan, 3 Phila. 458.
    The right to amend, is based on section 9 of the Act of April 21st 1858, Pamph. L. 385. That act is supplementary to the act incorporating the city of Philadelphia. The preamble, and seven sections of the act refer, in terms, to that city alone. Section 9 íefers to “ municipal claims ” without limiting them to any particular city. The amendment was a matter of grace not of right. But there was nothing to amend by. The lien, as filed, had none of the essential elements of a lien in rent.

    A mechanic’s lien cannot be amended after the statutory period for filing it: Dearie and Wife v. Martin, 28 P. F. Smith 55 ; Russell v. Bell, 8 Wright 47. Nor can it be amended by an alteration of the description of the premises: Armstrong v. Hallowell, 11 Casey 485.
   Mr. Justice Sterrett

delivered the opinion of court, May 3d 1880.

The claim against the defendant was for “ water-frontage tax ” regularly assessed for water-pipe laid in front of his property on the south side of Walnut street. The tax, not having been paid within the time required, was registered in the city lien docket; but the defendant contends that the registration was so fatally defective that the court was right in striking off the claim.

The municipal corporation act, providing, among other things, for extending the supply of water, requires the clerk of the department to make a list of all the owners of houses, lots and buildings on each-side of the street through which water-pipes are extended, and charge each respectively such rate per foot front as may he fixed by ordinance. The charge so made is to be collected as city taxes, and if not paid within the time prescribed, the same shall be registered in the manner provided for registering unpaid city and school taxes on real estate, with like force and effect as to lien against such property, and subject in all respects to like mode of" procedure and remedy for recovery of the same: Purd. Dig. 1925, pl. 144 — 45. The 36th section of the act, providing for the annual levy and collection of city taxes, directs the treasurer to receive and collect taxes until and including the first day of January, after which he shall furnish a correct and detailed statement of delinquent taxes respectively due upon real estate to the city solicitor, who shall cause the same to be registered on the city lien docket in the prothonotary’s office, in the name of the city and against the person or persons charged therewith; and all taxes so registered shall be and continue to be liens on the real estate upon which they have been assessed for the term of five years from the date of the levy: Purd. Dig. 1916, pl. 96 — 7. The next section provides that recovery may be had on claims for taxes, water-frontage tax, &c., in the Court of Common Pleas, “ by action of debt * * * or by scire facias, as in the case of mechanics’ claims;” and the claims so registered shall be prima facie evidence of the amount thereof, and of the same being due and owing, &c.

While no particular form is prescribed, the registration should, for the purpose of notice as well as remedy, contain at least a brief description, including location, of the property assessed, corresponding with that which the clerk of the department is required to make when frontage tax is assessed, giving the name of the owner or reputed owner, the amount of the assessment, its date and what it was for. If the claim is for “water-frontage tax,” it may be designated by that name as the act provides. If these matters are briefly noted in the claim, the registration will furnish at least constructive notice to purchasers and subsequent encumbrancers of the nature, extent and duration of the lien. One of the remedies given is a proceeding purely in rem, by scire facias, as in the case of mechanics’ claims. To make this available, it is necessary that the property against which the lien is sought to be enforced should be designated with such certainty as to enable the sheriff to execute the levari facias ; but it is unnecessary to conform strictly to all the requisites of a mechanic’s lien. The name of the contractor or material-man need not be given, nor is a bill of particulars, &c., necessary. In Pittsburgh v. Cluley, 16 P. F. Smith 449, it was said that the mechanics’ lien act furnished only a general and not a specific rule of proceeding. The special act under consideration in that case required the lien to be “filed in the same manner as mechanics’ liens,” and authorized writs of scire facias and levari facias to “ be issued thereon as in the case of mechanics’ liens,” and yet it was there shown to be unnecessary, and in some respects impossible, to conform to all the requirements of the mechanics’ lien law. The municipal corporation act contains no such binding directions as to how the claim shall be registered, nor does it require that it should be even in the form of a mechanic’s claim. It simply directs that' the claim shall be registered, and provides that one of the remedies for its collection may be “ by scire facias, as in the case of mechanics’ claims.”. The manner of assessing or charging water-frontage tax is specially prescribed, as we have seen. The amount of the claim against each particular lot is thus fixed and determined, and hence it is unnecessary to set forth the particulars in detail. The claim, however, should be stated with such certainty and precision as to answer the purpose of notice, and at the same time support the proceeding that is authorized as one of the remedies for enforcing payment.

The court was clearly right in holding that the claim as registered was defective and insufficient to support a scire facias, &c.; but under the ninth section of the Act of April 21st 1858, Purd. Dig. 70, pi. 5, which the court properly held to be a general law, we think it was amendable, and an amendment should have been allowed. That section provides, " that municipal claims for taxes, liens, public assessments or charges may be amended at any time before or at the trial, on notice given the defendant under rule of court, Provided, that if made on the trial, a continuance may be granted by the court on the application of the defendant.” Such acts as this should be liberally construed, and while amendments are not a matter of ri'ght, they should be allowed where it can be done without prejudice to intervening rights. So far as appears there were none in this case. The assessment of water-frontage tax against the defendant’s property, which was no doubt made as directed by the act, would furnish all the data necessary for the amendment.

The order of court striking the claim from the record is reversed and set aside, the rule to amend reinstated, and record remitted for further proceedings.


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    Jennings versus Pennsylvania Railroad Co.
    1. In the absence of evidence to show that the locomotive from which fences, hay and grass caught fire was improperly constructed, and had not an approved spark-arrester, the court was right in directing the jury to find a verdict for defendant in an action to recover damages for the loss thereby occasioned.
    2. It cannot be held that the fact that the fire thus took place is prima facie evidence that the spark-arrester was defective, and that therefore the ease should he submitted to the jury.
    October 30th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Trunkey and Sterrett, JJ. Paxson and Green, JJ., absent.
    Error to the Court of Common Pleas of Westmoreland county : Of October and November Term 1878, No. 264. (Western District.)
    Case by John Jennings against the Pennsylvania Railroad Company, to recover damages for the loss of bay in the meadows of plaintiff, alleged to have been set on fire by sparks from one of the locomotives of defendant.
    The facts are sufficiently stated in the following opinion of the court below : “ The material portions of the testimony on the part of the plaintifi’, in relation to this question of negligence, are that his premises, on the 4th and 9th of July — at least on the 4th— were fired in several spots. There is no evidence that the fire extended any great distance along the route of the road; nor does the evidence, as we recollect it, show that there was an unusual or extraordinary number of sparks emitted from the engine. But there is evidence showing that the field was fired at several places, and that the grass and hay, according to the quantity as testified to by the several witnesses in the case, wore burned by reason of these sparks. That is one item of the evidence upon which the plaintiff may rely to show the existence of negligence, namely, the fact that the field was fired apparently by the same engine at different points. The plaintiff also relies upon the steepness of the grade, and insists that there is evidence tending to show that the engine was overworked, or worked to its utmost capacity, and that from the circumstances" the jury would he authorized in inferring the existence of negligence. On the part of the defendant it is shown that the best approved spark-arresters were used and attached to the smoke stack ; and the evidence shows that the devices or apparatus employed by tho company for the suppression of fires and the avoidance of danger from that element were of an efficient character, were of the quality used by other railroads, and adapted to the purposes for which they were intended. The evidence of the fitness and adaptation of the apparatus for the preventing of fire is uncontradicted; and there is no specific testi
      mony, as we recollect in the case, to show that there was any want of care, or vigilance, or skill in the management of the locomotive. These are the positions of fact presented hy the evidence, and the question is one which it is the duty of the court to determine whether under all the circumstances the case is of such a character as ought to go to the jury; in other words, whether or not it is the duty of the court to give or withhold the evidence of negligence from the consideration of the jury. Some points have been presented by the counsel for the plaintiff, the answers to which will indicate the opinion of the court upon this question.
    “ 1. We have been asked to instruct you that if the jury believe that the cause of the fire in this case was sparks and pieces of ignited coals thrown out of the chimneys of the defendant’s locomotives, and that the reason that the engines threw the sparks and coals out at this point — Jennings’s farm — was the heavy grade of the road and the necessity of working the engines to their utmost capacity, then the defendant was guilty of negligence in overloading the engines, or not putting on more of them so as to prevent fires — then the plaintiff is entitled to recover damages for the injury done him.
    “ In this point the plaintiff rests his case upon the assumption that the defendant was guilty of negligence in overloading the engine, or in not putting on more engines before passing his fields where there was a heavy grade. We think there is not sufficient evidence in the case to satisfy the' jury that the capacity of the engines was too severely tried. There is no direct evidence that we recall as to.the length of the trains or their weight. There is no direct evidence tending to show that the trains were moving at an unusual rate of speed, or of want of skill in the management of the engines That they were subjected to a test too severe is rather an inference sought to be drawn from the fact that the hay lying on the ground and the grass were set on fire. The evidence, however, is uncontradicted that the best spark-arresters were attached to the engines; and when this is the case, and there is no sufficient evidence of a want of care and vigilance in the running of the engines, and therefore no sufficient evidence of negligence beyond the mere fact that the hay and . grass were burned, the loss suffered by the plaintiff is a misfortune for which the defendant is not responsible. It is not easy to tell -when the evidence of negligence is such as to justify the court in submitting it to the jury. In Pennsylvania Railroad Company v. Hope, 30 P. F. Smith 373, a recovery was allowed; but in that case the company had piled up dry grass with other rubbish on its roadway from which the fire was communicated to the plaintiff’s fields. In Philadelphia & Reading Railroad Company v. Hendrickson, Id. 182, the thing burned, subject of complaint, was a barn, and there was evidence that the train was running at a very high rate of speed, and that an extraordinary quantity of sparks were thrown from the engine— a perfect streak of fire, as one of the witnesses expressed it, and this extended all along the line of the road for a distance of three miles, burning the grass and the fences all along, as well as the plaintiff’s barn. It was said in that case, which was affirmed by the Supreme Court, that the burning of grass along the line of a railroad in the ordinary use of the road is not unusual, and is not of itself an act of negligence; nor does it establish by inference negligence in respect to the burning of the barn. In Philadelphia & Reading Railroad Co. v. Yerger, 23 P. F. Smith 121, houses were burned at a distance of sixty feet from the line of the road. There was evidence that sparks were thrown from the engine even beyond the houses, and that it was making extraordinary noise indicating distress in consequence of the heaviness of the load, and that the wheels went around without moving. But the coxxrt below was reversed for not granting a nonsuit. The engine in this case being provided with the best approved spark-arresters, it was held by the Supreme Court error to submit the question to the jury on the mere surmise that there may have been negligence on. the part of the defendant. There must he evidence upon which the jury may reasonably and properly conclude that there was negligence, and when the evidence is not of sxxch character it is the duty of the court to withdraw it. We have some hesitation a.s to what we should do in the present instance, but guided by the spirit and leaning of these decisions we are inclined to think that the evidence of negligence is insufficient. For this reason, and in view of the cause of action as sot forth in the plaintiff’s declaration, this point is refused.
    “ 2. That if the jury believe that the spark-arresters on the defendant’s engines on the 4th and 9th days of July 1874 were broken, .worn out or burned out, and thus failed to arrest the sparks, then they were guilty of negligence, and the plaintiff is entitled to recover his damages.
    “ Aside from the fact that the grass and hay were burned by the sparks there is no sufficient evidence that the spark-arresters were inadequate or in bad condition. So far as we have evidence on the subject, it is the other way. If there was sufficient evidence of the fact stated in the point, and the fact alleged was believed, notwithstanding the countervailing proof, it would entitle the plaintiff to recover compensation for the injury sustained.
    “We have been asked on the part of the defendant substantially to instruct you that the evidence in the case is insufficient. That point, in our answer to the points on the part of the plaintiff, yoxt will obsei’vo, is substantially affirmed. We are of the opinion on the whole that the evidence in the case is not of such a character as would properly, and should properly and reasonably satisfy the jury of the existence of negligence; and for the reasons stated in the answers to the points and in the general charge we instruct you that your verdict should be in favor of the defendant.”
    The plaintiff took this writ, and alleged that the court erred in this action.

      Cowan Stewart, for plaintiff in error.
    The plaintiff showed the fire originated from the engine of the defendant, and he went further, he showed they might have avoided it; that the engine must have been rendered dangerous in some way, either by removing the spark-catchers or knocking holes in them after they left Altoona or Derry, or that they were loaded too heavily for the grade at this point, and being overstrained, the spark-arresters were rendered ineffectual. It was shown that it was only on this heavy grade that fire was thrown out, and only on going up it; and the reason given was, that it took a fiercer fire to make enough of steam, and to get a fiercer fire there must be a stronger draft up the smoke-stack, which would drive out, and did drive out, coals of fire as large as a hickory nut or a walnut. These were the coals that made the fires, and according to the position of the company such coals could not escape through the spark-catchers. But suppose they did escape, was it not fair to infer that the latter had been taken out or tampered with ? We think the court below dwelt too much upon the mere fact of the engines having been provided with spark-catchers at Altoona and Derry, and that it was incumbent upon the plaintiff to show such was not the case. How else was he to do it except by showing that the sparks were not caught and the reason of it ?

      H. D. Foster and H. C. & J. A. Marchand, for defendant in error.
    In the absence of all testimony on the part of the plaintiff tending to show that there was negligence for want of sufficient spark-arresters, and the fact proved by defendant’s witnesses that they were in good condition, and were of the most approved kind, it was the duty of the court to withdraw the question from the jury, and decide as they did. [See Philadelphia & Reading Railroad Co. v. Schultz, post, page 341. — Rep.]
   The judgment of the Supreme Court was entered November 10th 1879, •

Per Curiam.

This case cannot be distinguished from the Philadelphia and Reading Railroad Company v. Yerger, 23 P. F. Smith 121, which was followed in Erie Railway Company v. Decker, 28 Id. 293, in which it was held that evidence to prove defects in other engines of the company was irrelevant, and should have been excluded. In the case now before us there was no evidence to show that the locomotive from which the plaintiff’s fences, hay and grass caught fire, was improperly constructed, and had not an approved spark-arrester. There was some evidence that on some occasions sparks larger than common issued from engines on the road, but not from this particular engine. On the other hand, the evidence on behalf of the defendants showed that this particular engine was without fault, and had been inspected not long before the occurrence. To hold that the fact of the fire having taken place, was prima facie evidence that the spark-arrester was defective, and therefore, that the case ought to have been submitted to the jury, would be practically to hold railroad companies liable for all fires ; for it is notorious that no spark-arrester has yet been invented to prevent all sparks, and a little spark may kindle as largo a conflagration as a larger one, it depending very much on the dryness or humidity of the atmosphere, whether a spark will go out before reaching the ground, and whether what it roaches is in a condition to be easily ignited. The learned judge below was therefore entirely right in directing the jury to find a verdict for the defendants. Judgment affirmed.