author: Mr. Justice Sterrett

text:
    Burke’s Appeal.
    1. Where the answer of a defendant in equity is responsive to the allegations of the bill, said answer is conclusive in the respondent’s favor unless it is overcome by the satisfactory testimony of two opposing witnesses, or of one witness corroborated by other circumstances and facts which give it a greater weight than the answer, or which are equivalent in weight to a second witness.
    2. The fact that the respondent, in denying that the securities are held in the manner alleged in the bill, sets up the titles in which he does claim to hold them, is insufficient to abrogate the above rule; and this upon the ground that the respondent was bound to answer every material allegation of the bill as fully as if specially interrogated thereto; and that unless he had averred the circumstances of liis possession his answer would have failed in this particular.
    3. A. filed a bill in equity against B. to redeem securities, alleging that the same were held as collateral security for a promissory note. B. filed an answer admitting that a portion of said securities were held in the manner alleged and offering to return the same on payment of the note. As to the residue of the securities he denied the averments of the bill, and alleged, that they had been deposited with him as security for the purchase money of part of them which he had advanced. The transaction with reference to said last named securities was alleged by the answer to have taken place “ early in 1879 or thereabouts.” Testimony being taken in the cause, the complainant was the only material witness In support of the allegations of the bill. It appeared from his testimony that at the time of the deposit by him of the securities in question with respondent, the latter already held ample security for the promissory note, to secure which complainant alleged that he had made the deposit. The respondent and two other witnesses testified in support of the allegations of the answer. All fixed the date of the alleged transaction with reference to the securities in question in “the early fall of 1878.” The amount of these securities was much in excess of the debt to secure wliich respondent alleged they had been deposited. The portions of the securities admitted by~respondent to be held as alleged by the bill were redeemed by agreement and the cause proceeded as to the residue. Held, that the answer was responsive to the allegations of the bill and was conclusive in respondent’s favor, the complainant having adduced no sufficient evidence to outweigh it. Held, further, that the discrepancy between the dates alleged in respondent’s answer and those testified to by his witnesses was immaterial, inasmuch as the answer and the witnesses were in accord as to the principal fact, and that, therefore, there was no conflict of testimony in respondent’s case. Held, further, that there was no greater inherent improbability in the respondent’s story than in the complainant’s, so as to render the former less credible than the latter. Held, therefore, that the bill should be dismissed.
    January 13tb 1882.
    Before Sharswood, C. J., Mercur, Paxson, Trunkey, Steerett and Green, JJ. Gordon, J., absent.
    Appeal from tbe Court of Common Pleas, No. 4, of Philadelphia county: In Equity: Of July Term 1881, No. 97.
    Appeal by Edward T. Burke from a decree of said court requiring liim to surrender to William Torrey certain securities pledged for an alleged loan or debt.
    Tbe bill in equity, filed by William Torrey against Edward T. Burke and tlie several corporations whose stock constituted the subject of tlie pledge, set forth:
    1. That on January 2d 1877 tlie defendant Burke loaned to the plaintiff $4,000, taking his promissory note for that amount, payable twelve months after date, tlie plaintiff giving Burke, as collateral security, ten of tbe Texas & Pacific Bail way Company’s income and land grant bonds, of $1,000 each.
    2. That on January 3d 1878, tlie said loan was renewed for another year, the old note cancelled and a new note given for the same amount. The plaintiff, in compliance with the defendant’s demand for additional collateral security, assigned to defendant his interest in the partnership association of waybill & Company, limited, of wliich he was a member. Burke thereupon gave Torrey a receipt for tlie collaterals so bold by him.
    3. That in January 1879, the plaintiff was again desirous of renewing the said loan, but Burke refused unless additional collateral was given, alleging that the Texas and Pacific Bailway bonds bad depreciated in value, and that the interest in the firm of Graybill & Co., limited, was of uncertain value. The plaintiff was unable to furnish additional collateral until March 5th 1879, when he assigned to Burke certificates of preferred stock in the Odd Fellows’ Temple Association in Ashland, of the par value of $4,000; also a certificate for 191 shares of stock of the First National Bank of Ashland. The former collaterals were retained by Burke.

      4. That the plaintiff, desiring to pay the amount of his indebtedness to Burke, on or about September 30th 1880, tendered him the sum of $4,556, being more than the full amount due, with interest, and demanded a return of his securities. That Burke refused to receive the amount and return the securities.
    The bill prayed discovery; that Burke be required to accept the amount due him with legal interest, and deliver to plaintiff the said note and collateral securities; that pending the suit, Burke and the other defendants be enjoined from making or permitting any assignment or transfer of said securities; and general relief.
    Burke in his answer admitted the averments of the bill so far as they related to the making of the loan in 1877 with security, and its renewal in 1878 with the assignment of the plaintiff’s interest in the firm of Graybill & Co. as additional security. The respondent denied the averments of the bill relating to the giving of the said additional collateral security upon its renewal in 1879, in the following language :—
    “ Third. The third paragraph is untrue in every averment relative to the demand for, or the giving additional security for, the debt evidenced by the note of $4,000, or any of its renewals. The security mentioned in this paragraph was given for another debt. The plaintiff, early in 1879, or thereabouts, agreed to purchase from the defendant, and the defendant agreed to sell the plaintiff, seventy shares of stock in the First National Bank of Ashland, of which the plaintiff was then the cashier, for $8,000. For some reasons of his own, which were not explained, the plaintiff desired that the certificate should not stand in his own name, and requested the defendant to retain it, and he did so. As security for this debt of $8,000 the plaintiff requested him to keep the seventy shares, and also gave by way of pledge $4,000 preferred stock of the Odd Fellows’ Temple Association of Ashland, and one hundred and ninety-one shares of the First National Bank of Ashland.”
    The respondent further averred his willingness to receive the debt due him, and to surrender the securities; or to accept either of the debts, and surrender the securities held for each respectively.
    Upon the filing of the answer, by agreement of the parties, the complainant paid to the defendant the amount of the original loan, $4,000, with interest, and the defendant re-assigned to the plaintiff the collaterals which he admitted he held as security for that loan, viz., the ten Texas and Pacific Railway bonds and the complainant’s interest in the firm of Graybill & Co., limited; and the suit proceeded upon the issue of fact raised by the third, paragraph of the bill and answer, as above recited.
    The cause was referred to an examiner and master, before ■whom the complainant testified in support of the allegations of the bill, and denied the averments contained in the third paragraph of the answer. One other witness was examined on behalf of the complainant, whose testimony, however, did not touch the subject of the disputed transaction of 1879.
    The defendant testified in his own behalf as follows: — •
    Q. Mr. Torrey states, in his bill, that he gave you two certificates of preferred stock in the Odd Fellows’ Temple Association, and a certificate for 191 shares of stock of the First National Bank of Ashland; state when these certificates were given to you, under what circumstances, and for what purpose %

    A. These were given to me the last of February, or beginning of March, 1879; in the early fall of 1878 Mr. Torrey having told me that he was buying the shares of the First National Bank of Ashland, I called him in one day, and asked him to buy my seventy shares of stock in the First National Bank of Ashland; he said he would do so, but that he had no money to pay for them at the time; I told him I did not require the money, that all I wanted was security for the same, and that I would give it to him at the rate of six per cent., from J anuary 1st 1879 ; the amount stipulated for the stock was $8,000; he said that he would take it and would guarantee the stock wo,uld pay dollar for dollar, and more; the expression I used was, “ Then it is all right, Will, as yon run no risk in giving me the security.” I did not receive the securities until the following March, I think just before his going to Texas, when he gave me the Odd Fellows’ stock and 191 shares of stock of First National Bank, which were both assigned to me ; and also told me to keep my seventy shares of stock as collateral security, and any difference, if it didn’t pay the amount, he promised me that the other securities would make me safe.
    Q. What was the condition of the bank at the time of this contract ?
    A. It was in liquidation; in the hands of a receiver, I think.
    Q. Was there any prosecution pending or threatened against Mr. Torrey at the time of this contract in relation to transactions of the bank ?
    (Objected to by Mr. Brewster.)
    A. I believe there was.
    Mrs. Emma M. Burke, wife of the defendant, testified as follows:—
    Q. Have you ever heard any negotiations, or conversations between Mr. William Torrey and your husband in reference to the sale and purchase of certain shares of stock in the First National Bank of Ashland; if so, state all that you heard said by both the parties upon the subject, when it occurred, and where it occurred ?
    A. I have heard a statement of the facts in our house in the latter part of August, or beginning of September, when Mr. Burke offered Mr. Torrey his stock for the amount of $8,000, and Mr. Torrey said he would fake it at that; Mr. Torrey said then that the stock in the bank would bring dollar for dollar, and more; Mr. Burke said to him, “ Will, you will run no risk in taking mineMr. Burke wanted to transfer his shares over to him, Mr. Torrey objected, said he was not ready to take them, and wanted Mr. Burke to keep them, so that he could act as director of the bank, as before. Mr. Torrey said he would give him additional security in his own stock, but could not then, as they were then out as collaterals, but he would get them as soon he could shape it, or something of that kind. Mr. Burke then said by giving him additional security, for the $8,000, and by paying six per cent, from the 1st of January 1879, he could have it until such time, as he was able to pay ; Mr. Burke did not get those securities until the coming March, my husband handed them to me; I have his securities in my charge.
    Cross examined: The date of the conversation between Mr. Torrey and my husband was the latter part of August, or the beginning of September 1878, as near as I know it.
    Mrs. Julia C. Wilford, a sister of Mrs. Emma M. Burke, testified that she was present during a part of the conversation above referred to, and that it took place “in the summer of 1878.”
    The master reported, inter alia, as follows: “ The only issue remaining for consideration is, were the securities which are retained by defendant held as security for the loan of $1,000, which has since been paid ?
    “ The defence set up in the answer is that the $1,000 Odd Eel-lows’ Temple Association stock and the one hundred and ninety-one shares of the stocck of the First National Bank of Ashland, were not assigned to defendant, Burke, as additional collateral security for the payment of the $1,000 note, but as collateral security for the payment of the purchase-money of seventy shares of said bank stock alleged to have been sold by Burke to Tori’cy for $8,000, but which had never been transferred or delivered.
    “ The improbability of this alleged contract appears upon the evidence. Mr. Burke and Mr. Torrey were both connected with'the First National Bank of Ashland: Mr. Burke as director and president, and Mr. Torrey as cashier. In February 1878, while Mr. Burke was a director, the bank was declared insolvent.....
    “ The contract set up by defendant would amount to this, that Torrey bought for $8,000 seventy shares of stock, par value only $1,000, which lie knew, and Burke must have known, were not worth more than $2,800 or $3,000 : and that Torrey transferred as collateral security for the purchase money thereof, 191 shares of the identical bank stock, and also $4,000 of Odd Fellows’ Temple stock, and all this without delivery of the article or stock alleged to have been sold.
    <£ From the testimony of the defendant and his two witnesses, it appears that the answer is not supported by the evidence, in fact, that it is contradicted by them. The answer says:— £ The plaintiff, early in 1819, or thereabouts, agreed to purchase from the defendant, and the defendant agreed to sell 70 shares of stock in the First National Bank of Ashland, of which the plaintiff was then cashier, for $8,000.’
    “ The defendant. Burke, in his testimony, says it was in the early fall of 1878 that Torrey agreed to purchase the said 70 shares of stock. Mrs. Burke, the wife of defendant, and Mrs. "Wilford say that it was the latter part of August, or beginning of September 1878, when Mr. Burke offered Mr. Torrey his stock for $8,000. They also say that no securities were mentioned, and that they were not present when any securities were handed by Torrey to Burke.
    “ If these witnesses testify truly when they say the contract was made in 1878, then the answer which says the contract to purchase the said 70 shares was made in 1879 is untrue; hut if the answer is true, then it is unsupported by any of the evidence.
    ££ From a careful consideration of all the evidence the master is satisfied that the facts stated in the plaintiff’s bill are true.”
    The master therefore reported a decree that the defendant deliver and surrender to the plaintiff the said stock in the Odd Fellows’ Temple Association, and the 191 shares of stock in the First National Bank of Ashland.
    The plaintiff filed the following exceptions to the master’s report:—
    1. That the master has misstated or misapprehended tho rule for the application of the evidence to the issue. He has assumed that the defendant was bound to maintain the claim to hold the collaterals for a debt due for the sale of stock to the plaintiff. Whereas the answer being responsive to the bill to redeem the collaterals, it lay on the plaintiff to disprove the existence of the right under which the defendant claimed to hold the collaterals.
    2. If the plaintiff was hound to disprove the averment in the answer, then there was no proof to countervail the effect off the answer.
    3. The master has erred in the finding of the facts. Tho evidence of the plaintiff that the collaterals were given as additional security for the original loan, being supported by the plaintiff’s testimony alone, and the defendants’ claim to hold them as security for another debt contracted at a subsequent time, and before the pledge was made, being supported by the oaths of three witnesses.
    The court, after argument, overruled the exceptions, Thayer, P. J., filing an opinion, in which he said :—
    “We have read every word of the evidence taken by the examiner in this case, and approve the finding of the master. . . . One witness with corroborating circumstances was sufficient to establish the plaintiff’s case, while the allegations upon which the defence rests are so exceedingly improbable as to be altogether incredible, unless sustained by the clearest proof. . . . No one but a lunatic would have made such a contract. The motive insinuated rather than alleged by the defendant, that a prosecution was threatened, is not supported by a scrap of credible evidence, for surely no weight can be attached to the defendant’s feeble answer, “I believe so,” to the question of counsel on page 13, unaccompanied by any explanation or statement of particulars, or by the slightest corroboration. Yery clear and satisfactory evidence would be necessary to sustain such a story as that which the defendant sets up. The fragments of conversation sworn to by the defendant’s wife and sister-in-law are totally inadequate to convince our judgments of the truth of it, particularly when we consider the relations of •those persons to the defendant, the natural influence which the defendant would have over them, and the contradictions of them contained in the defendant’s answer and in the proofs presented by the plaintiff. That the burden of proving these extraordinary statements rested upon the defendant admits of no doubt, for when the answer sets up affirmative allegations in' opposition to or avoidance of the plaintiff’s demand and is replied to by the plaintiff, the answer is of no avail in respect to ■such allegations, and the defendant is as much bound to establish the allegations so made by independent testimony, as the plaintiff is to sustain his bill. . . . The defendant has not removed this burden from his shoulders by any satisfactory or convincing evidence, and as he admits that the securities in controversy belong to the plaintiff, and „has failed to establish by any sufficient proof that he holds them as a pledge under the remarkable contract which he sets up, the decree must be for the plaintiff.
    “Exceptions dismissed, and it is ordered that a decree be made for the plaintiff in the form reported by the master.”
    The defendant took this appeal, assigning for error, substantially, the dismissal of his exceptions, the confirmation of the master’s report, and the decree of the court.

      B. C. MeMurtrie, for the appellant. —
    The answer was directly responsive to the bill. The fact that, in addition to denying that the collaterals in question were held as security for the $1,000 loan, it set forth affirmatively the other indebtedness, for which they were held as security, did not make it the less responsive, nor deprive the respondent of the benefit of the rule, that being responsive, it is conclusive, unless contradicted by two witnesses or by one witness and corroborating facts. This is directly decided in Eaton’s Appeal, 16 P. F. Smith 483, and is consistent with the general rule as laid down in Gresley’s Eq. Evidence 4, and all the authorities. The slight discrepancy in date between that averred in the answer and the recollection of the defendant’s two witnesses, is immaterial, they having supported the answer as to the main transaction. “ Inherent improbability ” and the apparent “ absence of motive ” are insufficient to discredit a sworn answer, but when it is remembered that the plaintiff, as an officer of the insolvent bank, was at the time threatened with a criminal prosecution, his motive in buying up the shareholders stock is sufficiently apparent.

      F. Carroll Brewster, with him F. F. Brewster and F. C. Brevoster, Jr., for the appellees. —
    The averments of the bill were supported by the testimony of one credible witness and eorrob orating cir cum stances.
    The testimony of the defendant being in conflict with his answer, the effect is to impeach and overthrow the answer : Spencer and Newbold’s Appeal, 30 P. F. Smith 317.
    The burden of proof was shifted upon the defendant below to maintain his allegations by satisfactory proof. For, although the answer was positive in its denial, yet it set up an affirmative case in opposition to that of the plaintiff below, and where the answer sets up affirmations in opposition to or in avoidance of the plaintiff’s demand, and is replied to by the plaintiff, the answer is of no avail in respect to such allegations. In such a case the defendant is as much bound to support his affirmative averments by independent testimony as the plaintiff is to sustain his bill: Daniell’s Oh. Pr. 984; Pusey v. Wright, 7 Casey 395 ; Adams Eq. 21; Swift v. Dean, 6 Johns. 522; Olason v. Morris, 10 Id. 524; Atkinson v. Marks, 1 Cow. 691.
   Mr. Justice Sterrett

delivered the opinion of the Court, February 20th 1882.

The question of fact upon which the ease hinged in the court below was whether the stocks in controversy, one hundred and ninety-one shares of First National Bank of Ashland, and one hundred and sixty shares of Odd Fellows’ Temple Association, were pledged as additional security for $4,000, borrowed money, or as collateral security for $8,000, the consideration for seventy shares of bank stock which appellant alleged he had sold to appellee.

In the bill filed to redeem these stocks and other collateral securities, the appellee substantially avers that in January 1877 he borrowed from appellant $4,000, for which he gave his note at one year, with ten Texas and Pacific Railway Company’s bonds, of $1,000 each, as collateral security; that in January 1878, the note was renewed for one year with the same collateral, and shortly thereafter he assigned his interest in the limited partnership association of Graybill & Co. as additional collateral security; that when thedast mentioned note matured he again desired to renew the loan, but appellant was unwilling to do so unless additional collateral was given, assigning as a reason therefor that the Texas and Facific Railway bonds had depreciated, and that the interest in the firm of Graybill & Co., theretofore assigned to him, was of uncertain value; that he was compelled to comply with appellant’s demand for additional security, but was unable to furnish it until March 1878, when he gave him the one hundred and ninety-one shares of bank stock and one hundred and sixty shares of Odd Fellows’ Temple Association stock first above mentioned; and thus the loan of $4,000, was again extended for one year from January 1879, but the note of January 1878, instead of being renewed, was held by appellant with all the before-mentioned collaterals as security for the payment thereof.

The appellant in his answer admits all the material averments as to the original loan of $4,000, and the first renewal thereof; but he denies that he either demanded or received a,ny additional security for that loan when it matured in January 1879, or at any time thereafter, and says the bank stock and Odd Fellows’ Temple Association stock were pledged by appellee for another debt, which he alleges was contracted and secured as follows : — “ The plaintiff, early in 1879, or thereabouts, agreed to purchase from the defendant, and the defendant agreed to sell the plaintiff seventy shares of stock in the First National Bank of Ashland, of which the plaintiff was then cashier, for $8,000. For some reasons of his own, which were not explained, the plaintiff desired that the certificate should not stand in his own name, and requested defendant to retain it, and defendant did so. As security for this debt of $8,000, the plaintiff requested him to keep the seventy shares, and also gave, by way of pledge, $4,000, preferred stock of the Odd Fellows’ Temple Association of Ashland and one hundred and ninety-one shares of the First National Bank of Ashland.” He also avers he is and always has been ready and willing to surrender the securities aforesaid on payment of the debts for which they were respectively pledged.

By mutual agreement, immediately after the answer was filed, the loan of ¿4,000 was paid, and the collaterals, which appellant claimed to hold as security therefor, were surrendered to the appellee. The issue Was thus narrowed down to the question of fact first above stated.

The learned master found that the stock was pledged as security for the loan, and not for the alleged debt of ¿8,000, and the court accordingly entered a decree in favor of the plaintiff below. It is contended there was error in thus finding the controlling fact against appellant, and that this resulted from the refusal of the court to consider the answer, in this respect, as responsive to the bill, and in not giving due weight to appellant’s testimony.

If the answer, denying that the stock in question was ever given as additional security for the loan, and averring that it was specifically pledged for the debt, is responsive, the appellant was clearly entitled to the benefit of the rule that makes it conclusive evidence in his favor unless it is overcome by the testimony of two witnesses, or one witness and corroborating circumstances: Horton’s Appeal, 1 Harris 67; Pusey v. Wright, 7 Casey 387, 395; Story’s Eq. Jurisprudence, § 1528. In the latter, it is said that the answer of the defendant to any matter stated in the bill, and responsive to it, is evidence in his own favor. It is not only proof as to the matters of fact of which the bill seeks a disclosure from him, but it is conclusive in his favor, unless it is overcome by the satisfactory testimony of two opposing witnesses, or of one witness corroborated by other circumstances and facts which give it greater weight than the answer, or which are equivalent in weight to a second ■witness. Thus where the defendant, in express terms, negatives the allegations of the bill, and the evidence is only of one person, affirming what has been so negatived, the court will dismiss the bill. The reason of the rule, as stated by the learned author, is this: The plaintiff calls upon the defendant to answer an allegation of fact, which he makes; and thereby lie admits the answer to be evidence of that fact. If it is testimony, it is equal to the testimony of any other witness; and, as the plaintiff cannot prevail, unless the balance of proof is in his favor, he must either have two witnesses, or some circumstances in addition to a single witness, in order to turn the balance. In so far as the answer contains an express denial of the allegation that the stock was pledged as security for the loan, it is undoubtedly responsive. If the burden of overcoming a responsive answer, as to the cardinal fact in his case, was on the plaintiff, his own testimony alone was clearly insufficient for that purpose; and we fail to discover any other evidence, facts or cii’cumstances to corroborate his statement in that respect.

Roth parties agree, that in March 1879, the stock was given as collateral, but they disagree as to the specific purpose for which it was pledged. One of them asserts, as the foundation of his equity, that it was additional security for the loan; the other avers that it was collateral to the alleged debt. It is not pretended that it was the subject of contract between them at any other time, or for any other than one of the purposes above mentioned. The appellant was required to answer every material allegation in the bill as fully as if sjaecially interrogated thereto; and it was his right, as it was clearly his duty, to make full disclosure of all the facts and circumstances connected with and forming a part of the transaction in which the stock was pledged, without doing so, how could he conscientiously swear that the facts stated in his answer were true? If the stock was not his, and he did not hold it in his own right absolutely, it was not only his duty to say so, but also to state fully the terms and conditions on which it was received and held by him. This is what he did; and it appears to us that his answer cannot be fairly regarded in any other light than as responsive to the controlling averment of the bill. In this respect, the case cannot be distinguished in the principle from Eaton’s Appeal, 16 P. F. Smith 483, in which the distinctive features of a responsive answer are clearly pointed out by the present chief justice. The bill in that ease, for the settlement of a partnership composed of three persons, averred that they were equal partners. One of the defendants, in his answer admitting the partnership, alleged that his own interest in the firm was four-ninths instead of one-third, and that of the plaintiff was only two-ninths. The answer was held to be responsive to the bill, and therefore entitled to the weight assigned to it by the well settled, rule of evidence in equity. The leading eases there cited, fully sustain the principle. In Allen v. Mower, 17 Vermont 61, it is said that everything in the answer, as to the creation of the original liability charged in the bill, must be taken together as part and parcel of one entire transaction. In Dunham v. Jackson, 6 Wend. 22, the bill, filed to redeem stock, charged that it had been pledged for a certain sum. The answer alleged it was pledged at the same time for an additional sum, and it was held to be responsive. The learned judge, in that case, speaking of the defendant’s answer, said: “ Whether he has gone beyond what he was required to do may be tested by supposing an interrogatory, inserted in the bill, pointing to the very matter which he has answered, and he had refused to answer. Would the court have compelled an answer ?. Interrogatories are not a necessary part of a bill, nor are they to be answered unless they are sucb as are warranted by the premises and allegations of the bill. If the respondent had stopped after denying that the stock was pledged for the loan of, $500, and refused to answer an interrogatory as to the amount for which it was pledged, because such interrogatory was not warranted by the bill, there would have been, it appears to me, very little difficulty in showing the answer to be insufficient. The defendant is bound to admit or deny the facts stated in the bill, with all their material circumstances, without special interrogatories for that purpose.” But further reference to authorities, sustaining 'the principle contended for by appellant, is unnecessary. They are cited and discussed at length in Eaton’s Appeal, supra. Enough has been said to show that upon principle, as well as authority, the answer was responsive, and appellant should have had the benefit of the rule above stated.

But aside from this, we are of opinion that due weight was not given to the testimony introduced by the appellant in support of his answer.

The learned master came to the conclusion that the answer was not only unsupported, but was actually contradicted by the testimony of appellant and his witnesses. This was an error into which he appears to have been led by attaching too much importance to a discrepancy, more apparent than real, between the answer and the testimony, as to the time appellee agreed to purchase the seventy shares of bank stock. It is alleged in the answer that it was “ early in 1879, or thereabouts.” In his testi.mony the appellant says it w’as in the early fall of 1878 : and his wife testifies it was in the latter part of August, or beginning of September 1878. The important fact was the agreement to purchase the stock, not the precise time it was originally concluded or subsequently recognized by the parties. If made at all, it was a verbal contract in which further action was not contemplated before January 1879; 'and, if appellant’s testimony is believed, final action thereon was postponed, at the instance of appellee, and for his convenience, until March following. The discrepancy as to dates was comparatively immaterial, and altogether insufficient to cast discredit on the testimony of appellant and his witnesses.

An additional reason assigned for discrediting the answer and testimony, was the inherent improbability of the allegations upon which the defence was based. The learned judge of the Common Pleas appears to have regarded this as conclusive against the appellant. It must be conceded, that the circumstances connected with the alleged purchase of the bank stock, indicate great folly on the part of the appellee, but it does not necessarily follow that witnesses are unworthy of credit merely because their testimony tends to establish unreasonable or foolish contracts. The motives which prompt such transactions cannot always be discovered. There is nothing in the appellee’s version of the transaction to specially commend it to credence, on the score of inherent probability. The $4,000 loan was already secured by the Texas-Pacific bonds and the interest in the firm of Graybill & Co. — collaterals then worth about $6,000— and yet, according to bis statment, be gave the stock in controversy, worth probably twelve or thirteen thousand dollars, as further and additional security for the loan. 'While it is possible that collaterals, worth fifty per cent, more than the amount of the loan, inay have been supplemented by additional security worth double .that amount, the transaction is not one that a prudent man would be likely to make. Indeed, the inherent improbability of such a transaction is nearly if not quite as great as .that involved in appellant’s version of the matter.

A careful consideration of the bill, answer and testimony leads us to the conclusion, that due weight was not given either to tbe answer or tbe testimony by wliicli it was supported, and that the bill should have been dismissed.

Decree reversed, and hill dismissed; and it is ordered that the costs, including the costs of this appeal, he paid by the appellee.


source: Caselaw Access Project

author: Chief Justice Sharswood

license: Public Domain

text:
    Pleasonton’s Appeal.
    1. A testator by his will bequeathed to his sister, Ms niece and Ms niece’s husband, certain annuities. He also bequeathed to Ms niece annuities for the maintenance and education of her children till they attained majority, and on their attaining majority bequeathed to each of them certain annuities until his estate should be divided. After the death of his sister, his niece and her husband, and so soon as the youngest surviving child of his said niece should attain majority (and not before), testator directed his estate to be divided among the then surviving children of his said niece, and the children or lawful issue of any of them that might then be dead. Held, that testator intended to postpone the period for distributing his estate until the death of the last of the three annuitants, his sister, his niece and his niece’s husband, and that the interest of each of said niece’s children was contingent upon their outliving said event, and that the children or issue of said children took on a like contingency.
    2. Where the gift of a legacy is, by a testator, postponed to a future time, but in the interim interest, either by way of maintenance or otherwise, is given to the legatee, as a general rule the legacy is deemed to vest at the death of the testator. Where, however, the gift of interest or maintenance is distinct, and the direction is to pay or transfer the principal sum at the specified age or upon the condition named, the legacy is contingent.

      3. Where, in such case, the gift, by way of maintenance, is in the shape of an annuity for the life of the legatee, the legacy is to be deemed contingent.
    4. A trustee of real estate who, in pursuit of a bona fide policy adopted by him for the management of the trust, demands such large rentals that ho is unable to procure tenants, is not liable to be surcharged in the amount of income he might have received had he adopted another course. A trustee can never be surcharged for a loss arising from mere error of judgment and from no willful default.
    January 16th 1882.
    Before Sharswood, O. J., Mercub, Gordon, Paxson, Trunicby, Sterrett and Green, JJ.
    Appeal from a decree of the Orphans’ Court of Philadelphia county : Of January Term 1882 No. 67.
    This was an appeal by Gertrude Pleasonton, administratrix of Augustus Pleasonton, deceased, from a decree of the said court, dismissing exceptions to, and conforming the adjudications of the judge auditing the account of Augustus J. Pleasonton, Chapman Biddle and Robert Toland, trustees under the last will and testament of Joseph Dugan, deceased.
    The facts of the case, as they appeared on the audit before Hanna, P. J., were as follows: — Joseph Dugan, the testator, died May loth 1815, having first made his last will and testament bearing date September 12th 1837. It was duly admitted to probate on May 17th 1815. By this will testator bequeathed, inter alia, to his -niece, Caroline Pleasonton, wife of Augustus J. Pleasonton, an annuity of $1,000, to be increased to $8,000 if she survived testator’s sister, Ann Dugan. He also bequeathed to his said niece the sum of $500 per annum for each of her children who should be twelve years old at the time of testator’s deatli, or should afterwards attain that age, for their clothing and education. And upon reaching the age of twenty-one years he bequeathed to each of said children an annuity of $1,000 “ to be continued until the period hereinafter appointed for the division of my estate, unless sooner determined by the death of such child.” Testator further bequeathed an annuity of $2,000 to his niece’s husband Augustus J. Pleasonton, to be increased to $5,000 if lie survived his wife.
    After the legacies and annuities mentioned, testator gave and devised his real and personal estate unto his executors as trustees, in trust: “ After the death of my sister, Ann Dugan, and of my niece, Caroline Pleasonton, and of my niece’s husband, Augustus James Pleasonton, and so soon as the youngest surviving child of my said niece Caroline, shall attain twenty-one years of age (and not befare), to divide the personal property with all its accumulations and to make partition of all the real estate in equal parts and shares, share and share alike, to and among the then surviving children of my said niece, Caroline, and the children or lawful issue of any child of my said niece, who may then be dead, having left children or lawful issue, him or her surviving; such children or lawful issue of a deceased child, to take among them, the same share (neither more nor less) and interest which their parent would have taken if then alive. And if my niece, Caroline, shall leave no children her surviving, or if her children who do survive her shall all die before the age of twenty-one years, and leaving no children nor lawful issue them surviving, then in trust to divide my said estate, real and personal, in equal shares, share and share alike, between my grand-niece, Ann Eck, and my grand-nephew, Joseph Eck ; and if either of them should be dead, leaving lawful issue, such lawful issue to take among them the share of the deceased parent; but if no such lawful issue, then the whole to go to the survivors or the lawful issue of such survivor.”
    Testator appointed as his executors Augustus J. Pleasonton, Clement C. Biddle and Edward O. Dale. Testator’s sister, Ann Dugan, died before him. Caroline Pleasonton, testator’s niece, .died November 25th 1855. At the time of said niece’s death she had living six children, Anna Josephine, Antoinette, Augustus, Alfred, Francis S. and Edward Eodney. The last named, being the youngest of the six, attained his majority on November 21st 1876. The accountants, Chapman Biddle and Eobert Toland, were substituted trustees in the place of Clement C. Biddle and Edward C. Dale. .It appeared, .however, that Augustus J. Pleasonton had alone performed the active duties of the trust from the time of testator’s; death.
    The most productive part of the testator’s estate consisted of thirty-six houses situated at and near the intersection of Walnut and Thirteenth streets in the city of Philadelphia.
    The first account of the trustees embracing the income from those houses, was filed December 26th 1854, and was referred to Peter McCall, Esq. He found that the estate had been very judiciously managed by the trustees, and that, by their careful management and the rise in the value of city property, the rental of the estate had been considerably increased since the time of the testator’s death. This report was confirmed by the court July 20th 1855.
    On May 24th 1873, a second account was filed, which was also referred to Mr. McCall, who again reported that there had been a considerable increase in the rental, which he thought was no doubt largely due to the rise in the value of real estate, but was also in no small degree to be attributed to the skill and judicious management of the trustees.
    The present account was filed November 26th 1876, arid covered the period from the filing of the last account. It appeared that a number of the houses had in the interim remained vacant, and were of course unproductive owing to the high rents demanded for them by Augustus J. Pleasonton. The children of said accountant claimed, that he should be surcharged in the amount of the rents which he might have realized therefrom. Upon this point the auditing judge reported as follows: — ■
    “ It also appeared that a number of the houses belonging to the estate are now and have been vacant, for periods of timo varying from months to years, yet the evidence showed this was the result not of carelessness or supine negligence, on the part of the trustees or their agent, but of the policy adopted by them for the management of the trust from its inception, and which they, from their experience and according to their best judgment, believed, under all the circumstances, beneficial and advantageous to the estate. The wisdom of the plan pursued by the trustees may be doubted, and it is clear it does not meet the approval of the parties entitled to the estate in remainder, nor harmonize with the opinions of experts in real estate business, who were examined as witnesses. Yet that is not now the question to be determined. Much of the testimony would be very material, if an application had been made to remove the trustees; but the effort now is to surcharge them personally for an alleged neglect and default, thus presenting an entirely different question, and to be decided by principles not applicable to the former case. "While it may be thought that the trustees have adopted a mistaken policy, and a different mode of renting the houses of the estate would have produced larger results, yet; that is but a conjecture. ' We are now dealing with facts developed by the evidence, and these show that the course of the trustees, not complained of prior to filing of the present account, has been productive of increased revenue; that they have kept the properties in repair, paid all taxes, water rents, etc., collected the rents, paid the annuities, and promptly invested surplus income; one of the trustees, Augustus J. Pleasonton, bestowing his entire time and attention to the business of the estate, personally collecting the rents and keeping its accounts with care and exactness.
    After a careful examination of the entire evidence, the auditing judge is unable to discover any supine negligence and mismanagement on the part of the trustees, or either of them, as would justify the surcharge sought to be imposed upon them.”
    The children of Augustus J. Pleasonton further contended that the youngest of them having attained majority, the corpus of the estate, together with the accumulated income, should be distributed to them. The auditing judge was, however, of opinion that testator’s intent was that such distribution should not take place until the death of Augustus J. Pleasonton, the last annuitant, and found accordingly.
    Exceptions were filed to the adjudication by the children of Augustus J. Pleasonton, which were dismissed by the court, and a decree entered confirming the adjudication. Gertrude Pleasanton, administratrix of Angustus Pleasanton, one of said children who had in the meantime died, thereupon took this appeal, assigning for error the decree of the court dismissing, inter alia, the exceptions to those parts of the adjudication refusing to surcharge the accountant with possible rentals, and refusing to distribute the estate among the children of the accountant.

      JolmJ. Eidgway, Jr., for appellant. —
    The evidence showed that the rents demanded by the accountant were so exorbitant, and his continuauce in the policy of demanding them was so persistent and so disastrous, that he ought to be surcharged.
    The intention of the testator clearly was to vest the estates in the residuary legatees and devisees on the youngest of them coming of age, and not to render such estates contingent on outliving the last annuitant: Womrath v. McCormick, 1P. F. Smith 504 ; Manderson v. Lukens, 11 Harris 31; Fassitt’s Estate, 2 W. N. C. 572; Birshong’s Estate, 33 Leg. Int. 412; Provenchere’s Appeal, 17 P. F. Smith 463 ; Crawford v. Ford, 7 W. N. C. 532 ; Letch-worth’s Appeal, 6 Casey 175. The remainder over to the Ecks, in the next clause of the will, is upon a contingency which implies such vesting, and its direction to divide the estate among them, upon the death of all Caroline’s children before reaching majority without issue, demonstrates clearly' the intention not to postpone the division until the death of the last annuitant; for if the contrary construction be the proper one, then, if all the children having attained twenty-one years die without issue before the death of General Pleasonton, there will be an intestacy, for no one will then be in existence entitled to take, which could not have been the intention of the testator : Hawkins on Wills, *227, 240; Randal v. Doe, 5 Dow 202; Bull v. Pritchard, 5 Hare 571; Rivers v. Tripp, 4 Rich. Eq. 576; Welles •0. Ritter, 3 Wharton 208; Robert’s Appeal, 9 P. F. Smith 70.
    There are two inconsistent periods of time referred to in the will for the division of the estate; first, after the death of all the annuitants; and second, as soon as the youngest surviving child of his niece shall attain twenty-one years of age. In such cases the estate vests upon the happening of the first: Andrew v. Andrew, L. R. 1 Oh. Div. 410; Hodgson v. Gemmill, 5 Rawle 99; King v. Wilkins, Gilbert’s Eq. 27; Betty Smith’s Trusts, L. R. 1 Eq. 78.
    The estate being vested, even though the principal be not divisible, the present income is payable to those in whom it is vested: Whitter v. Bremridge, L. R. 2 Eq. 736; Phipps v. Ackers, 9 01. & Fin. 583; Snow v. Poulden, 1 Keen 186; Montgomerie v. Woodley, 5 Vesey 522 ; Blease v. Burgh, 2 Beav. 221; Josselyn «. Josselyn, 9 Simons 63; Masden’s Estate, 4 Wliart. 428.
    The will expressly provides that there shall be a division “ so soon as” the youngest surviving child attains majority. If the children must wait until the death of the last annuitant there can be no division “ so soon as ” the youngest child attains majority. It is clearly evident that the testator anticipated the death of all the annuitants before this event would happen, and his desire, as expressed by the “ not before ” inserted, was that no division should take place until then : Doe d. Hunt v. Moore, 14 East 601 ; Archer v. Jegon, 8 Simons 447 ; Re Wollaston’s Settlements, 27 Beav. 642; Benyon v. Madison, 2 Bro. Oh. O. 75 ; Olney v. Bates, 3 Dr. 319.
    No intent is shown to delay a division beyond the attainment of majority of the youngest child with any view to the benefiting them. The only reason for thus delaying, is the existence of the annuities. It is well settled that where postponement is for such a reason, the vesting of the estate is not to be deferred : Packhaim Gregory, 4 Hare 398 ; Curtis v. Luben, 5 Beav. 156.

      George W. Biddle and A. Sydney Biddle (with whom was FM 1C. Pri.ee), for the appellee. —
    The accountant, having acted in perfect good faith in the management of the estate, and according to the best of his judgment, cannot be held liable: Dilwortli v. Sinderling, 1 Binn. 494 ; Zebach v. Smith, 3 Binn. 73 ; Knight v. Lord Plimouth, 3 Atk. 480; Ilammon v. Cottle, 6 S. & R. 290; Gelbacli’s Appeal, 8 S. & R. 205 ; Bonsali’s Appeal, 1 Rawle 266 ; Bouman’s Appeal, 3 Watts 369; Konigmachor v. Kimmcl, 1 P. & W. 207; Pimm v. Downing, 11 S. & R. 67 ; Johnson’s Appeal, 12 S. &R. 317 ; Stem’s Appeal, 5 Whart. 472 ; McNair’s Appeal, 4 Rawle 148 ; Cahoun’s Estate, 6 Watts 185; TwaddelPs Appeal, 5 Barr 18; Moor’s Appeal, 10 Barr. 435 ; Springer’s Estate, 1 Smith 342 ; Neff’s Appeal, 7 Smith 91; Pleasant’s Appeal, 27 Smith 356. It is clear that the period of distribution is postponed until the death of the last of the testator’s annuitants, and also until the arrival of the youngest of said distributees to the age of twenty one years. The share of each distributee is contingent on liissurviving these events: Abbott v. Jenkins, 10 S. & R. 296 ; Seibert’s Appeal, 1 Harris 501; McBride v. Smyth, 4 P. & F. Smith 245 ; Morris’s Estate, 2 W. N. C. 522 ; Nicholson v. Bettle, 7 P. F. Smith 386; Delbert’s Appeal, 2 Norris 462; Harris v. McElroy, 9 Wright 216; List v. Rodney, 2 Norris 483; Moore v. Smith, 9 Watts 403; Gee v. Liddell, L. R. 2 Eq. 341.
    Such is the import of the phrases employed: Stapleton v. Cheales, Prec. in Ch. 317 ; Leake v. Robinson, 2 Merivale 363 ; Hanson v. Graham, 6 Ves. 239; Bull v. Prichard, 5 Hare 567.
    N o distribution should therefore now be made.
   Chief Justice Sharswood

delivered the opinion of the Court, January 30th 1882.

We have no doubt that under the will of Joseph Dugan the period of final partition and distribution of his estate was postponed until the death of Gen. Pleasonton, and was not to take place upon the arrival of the youngest child of his niece, Mrs. Pleasonton, at full age. The words of the clause providing for such partition and distribution are distinct, and unsusceptible of any other construction. After the death of my sister, Ann Dugan, and of my niece, Caroline Pleasonton, and of my niece’s husband, Augustus James Pleasonton, and so soon as the youngest surviving child of my said niece, Caroline, shall attain twenty-one years of age (and not before),” then to make distribution and partition to and among the then surviving children of my said niece Caroline and the children or lawful issue of any child of my said niece.” The interest of Augustus Pleasonton, one of these children, of whose estate the appellant is administratrix, was contingent upon his surviving Gen. Pleasonton. His children or issue take upon the same contingency. There is no clause or provision in the will, from which it can be' inferred that it was intended that the interest in the meantime should vest. The annuities to these children were for life. It was shown in Provenchere’s Appeal, 17 P. F. Smith 463, that, as was the case there, where interest, either by way of maintenance or otherwise, is given to the legatee in the meantime, the legacy, notwithstanding the gift itself be postponed, vests on the death of the testator, yet there is a recognized exception in England, that when the' gift of interest or maintenance is distinct, and the direction is to pay or transfer the principal sum at the specified age or upon' the condition named, the legacy is contingent; and Chief Justice Gibson, in King v. King, 1 W. & S. 207, considered a bequest of dividends as a clear exception to the general rule. An annuity for the life of the legatee is a still clearer exception. The learned counsel for the appellant with all his research was able to produce no case which would rule that anything contained in this will would show that the legacy here was vested, either on the death of the testator or the coming of age of the youngest of the children of Caroline Pleasonton. Hntil it was ascertained by the death of Gen. Pleasonton, who were the survivors then living, it could not be known to whom it would ultimately belong, and of course it was contingent. It may be that if the testator had thought of what has occurred, he would have made a suitable provision for the maintenance and education of the children or issue of a child of his niece dying before the period of distribution. But he has not done so, and we have no power to supply the gap by making a will for him.

It follows, necessarily, that the appellant has no standing in this court, and we might dismiss this appeal at once, on that ground, without any opinion upon the question of surcharge. But we think it better to consider that question without waiting for the substitution of the guardian of the minor children of Augustus Pleasonton. An amendment to that end would be allowed, of course, even at this stage of the proceedings. Augustus Pleasonton in his lifetime filed exceptions to the confirmation of the adjudication of the auditing judge on this ground, and it does not appear by the record that they were withdrawn, though it is stated in the opinion on the final decree that they were abandoned on the oral argument. The infants are not bound by such an abandonment. Ve think it most advisable to dispose of the whole case.' The mode in which the surviving trustee managed the estate was certainly very peculiar, and it seems that if the ordinary mode of managing the estate had been pursued, a large amount would have been added to the accumulations. Had ah application been made to remove him as mismanaging the estate, and that were the question now before us, there would be strong reason for dismissing him. But the question of surcharge is different. It is plain that the trustee acted on an honest though perhaps mistaken opinion, lie faithfully accounts for every dollar he has received. Having a very large number of houses belonging to the estate under his care, he thought it the wisest policy to keep up the rents at a high figure, even though the result might be that many of the houses would be vacant for a greater or less period, that the gain on the whole would exceed the loss on the few. Some such policy has often been pursued by large ship-owners, like Mr. Ciirard, who very rarely, as it is said, insured his vessels, as he saved money by being his own insurer. It is clear that such a principle could never have even an appearance of reason unless where a trust estate was composed of a very large number of houses, as was this case. A trustee can never be surcharged for a loss arising from a mere error of judgment, and for no willful default. The trustee appears to have acted throughout under the advice of counsel, and his first and second account having been referred to Mr. McCall, as auditor, he reported that the increase which had taken place in the income of the estate while no doubt largely due to the rise in value of real estate was also in no small degree to be attributed to the just and judicious management of the trustees.”

•Decree affirmed and appeal dismissed, the costs of this appeal to be paid by the estate, including the cost of the appellant’s paper book and one hundred dollars to her counsel.


author: Mr. Justice Baxson

text:
    Auer versus Penn.
    1. A surrender of demised premises by the tenant during a term, in order to be effectual so as to release the lessee from liability to pay rent, must be accepted by the lessor, and the burden of proof is upon the lessee to prove such acceptance.
    2. Where a lessee vacates premises during his term, delivering the keys to the lessor, who retains them, but notifies the lessee that he will hold him for the rent, there is no room for the presumption of such a surrender as will relieve the lessee from liability on his covenant to pay rent.
    3. Where, in such case, the landlord puts a bill upon the vacated premises and rents the same to another tenant, having first notified the lessee of his intention so to do, said lessee is not relieved from liability except for the amount of rent received by the landlord from the new tenant during the lessee’s unexpired term.
    January 17th 1882.
    Before Shabswood, O. J., Mercur, Gordon, Paxson, Trunkey and Sterrett, JJ. Green, J. absent.
    Error to the Court of Common Pleas No. 1, of Philadelphia county : Of July Term 1881, No. 18.
    Covenant, by Joseph Penn against John Auer, upon a contract of suretyship annexed to a lease. Upon a former writ of error, a judgment entered for plaintiff for want of a sufficient affidavit of defence was reversed, and a procedendo awarded : See 11 Norris 444.
    On the trial, before Biddle, J., the following facts appeared : On October 15th 1875, the plaintiff leased a certain house to one Jacob Brown, for the term of five years, at the yearly rent of $360, payable in equal monthly payments of $30 each. The lease contained the usual covenants on the part of the lessee to pay the rent as due, &c. At the foot of the lease was the agreement of suretyship, signed and sealed by the defendant, John Auer, whereby he covenanted that the lessee should faithfully perform all the covenants in the lease on his part to be performed, otherwise immediate recourse may be had against the surety without any prior proceedings against the lessee.
    The lessee entered, paid his rent regularly to January 1877, and moved out, without notice to his landlord, on February 13th 1877, because, as he alleged, of defective drainage; after removal he took the keys to the landlord’s agent, J. McGeogh. McGeogh testified that he declined to receive them, and stated that he would hold his surety for the rent, whereupon Brown threw them on the floor and went out. Brown testified that McGeogh took the keys, saying it was all right, but he admitted that McGeogh said he would hold John Auer, the surety, for the rent.
    McGeogh sent to Auer the following letters on the days of their date.
    “Philadelphia, February 17th 1877.
    “ Office 2228 North Fifth street.
    “John Auer, Esq. Dear Sir: — The rent of No. 1836 Germantown avenue was due on the 15th instant, and I would like you would call up and pay it. Brown, the tenant for whom you are security, having removed, of course we will have to hold you for the rent. Yours, respectfully,
    “ J. McGeogh.”
    “ February 21st 1877.
    “John Aijior, Esq. Dear Sir: — The tenant of 1836 German-town avenue having removed, and as under the lease you are security, I shall look to you for the payment of the rent. If you desire it, I shall place a bill on the house and rent it for you ; but in no case will we release you until the expiration of the lease. You will take notice that unless I hear from you in this matter within a few days, I shall proceed to rent the house at your risk, holding you, of course, for the rent until the expiration of the lease. Yours, respectfully,
    “ James McGeogh,
    “Agent for Jos. Penn, 2228 North Fifth street.”
    “February 23d 1877.
    “John Auer, Esq. Dear Sir: — If I do not hear from you to-day, I shall put a bill on the property 1836 Germantown avenue to-morrow, still holdiug you, as before stated, for rent until the expiration of the lease. Yours, respectfully,
    “ J. McGeogh, Agent for Joseph Penn.”
    “ Philadelphia, March 1st 1877.
    “John Auer, Esq. Dear Sir: — A party named Frederick Metzger is desirous of renting 1836 G-ermantown avenue ; he is willing to pay thirty dollars per month. If you have any objection please let me know. If I do not hear from you by tomorrow morning, I will rent it to Mm, and still bold you as security. . Yours, respectfully,
    “ Jas. McGeogh, Agent for Joseph Penn.”
    “Philadelphia, September 15th 1877.
    “John Auer, Esq. Dear Sir: — Frederick Metzger, present occupant of 1836 Germantown avenue, is removing. John Riehl, a former occupant of the place, desires to rent it. Unless I hear from'you to the contrary, I shall rent it to him, still holding you, of course, for the rent as security on the lease.
    “Yours, respectfully, James McGeogh,
    “Agentfor Joseph Penn, 2228 North Fifth street.”
    “January 2nd 1878.
    “ John Auer, Esq. Dear Sir : — Store 1836 Germantown avenue is again vacant; there is a .party named Sylvester Kreider who wishes to rent it as a barber shop. If you have no objections I will rent it to him, still holding you, of course, as security under the lease. Yours, respectfully,
    “ J. McGeogh,
    “ Agent for Joseph Penn, No. 2228 North Fifth street.”
    “ January 21st 1878.
    “John Auer, Esq. Dear Sir: — Premises 1836 German-town avenue being idle, I shall put a bill on the same, to rent, unless I hear from yon to the contrary, holding you, of course, as security under the lease. Yours, respectfully,
    “ J. McGeogh, 2228 North Fifth street.”
    “May 13th 1878.
    “ John Auer, Esq. Dear Sir: — There is a party named William Piersons, who desires to rent the house 1836 German-town avenue, for a saloon. I can not get any more than $25. If I do not hear from you by to-morrow morning I shall rent it, holding you of course under the lease as security.
    “ Yours, respectfully,
    “ J. MoGeogh, 2228 North Fifth street.”
    'No answers were received to these communications. Mc-Geogh rented the premises to various tenants from time to time, credited the lessee with the rents received from them, leaving a balance due, at the expiration of the term, of $355, for which this suit was brought.
    The defendant presented the following points :—
    1. “ That if the jury find that the premises leased were unhealthy and untenantable by reason of impure air, arising from defective drainage, which, existed when the lease was made; that this fact was known to the plaintiff, and he refused to remedy the defect, and fluff the tenant removed in consequence -thereof, the plaintiff cannot recover in this suit. The tenant is not bound to repair defects existing when he leases the premises.”

      Answer. “ I was going to say that that is a proposition of law, which it does not seem to me necessary to answer, in one way or another, here, because there is no testimony to that effect; on the contrary, the testimony on both sides has been that the house was perfectly satisfactory at the time it was leased, that Mr. Brown lived in it about a year afterwards. I do not think the state of facts arises here which makes it necessary for me to answer the point.”
    2. “ If the landlord took possession of the premises, and used or occupied the same, either personally or by a second tenant, .he will be estopped from collecting the rent for the same period of the former tenant, unless otherwise agreed between them.”

      Answer. “ The phraseology there is a little ambiguous. 1 If the landlord took possession of the premises.’ If that means that if the landlord accepted the surrender of the premises and agreed to release the tenant, the proposition is true; but the mere factj as I have said to you, of the landlord’s taking possession of the premises and renting them, after the other party had refused to remain upon them, does not produce the effect that is here asked for. If that is the meaning of the point, I refuse to affirm it.”
    The learned judge charged the jury, inter alia, as follows: ■ — “ The rule of law is perfectly well settled in this state, that a landlord is not liable for repairs unless there is a special stipulation to that effect in the lease. Any man lias a right to take the premises of any other man if he pleases, making any covenant or agreement with the landlord that he pleases, but it is settled that he cannot withhold the payment of the rent on account of the bad condition of the premises.
    “ The second point that he makes is, that he surrendered possession of these premises. A contract .to lease a house, or a contract to take a house, is like any other agreement. After you have made it, one party has no right to put an end to it. No man, after you have made an agreement or contract with him, can come to you and say, ‘ I will give up this contract.’ Unless both parties assent to the giving up of the contract, the contract cannot be broken in that way. Undoubtedly, if the landlord and tenant come together, and a landlord agrees to accept a surrender of the premises, that would end the lease and responsibility of the tenant; but a tenant has no right to go into a landlord’s office and say, ‘ I have done with the house,’ and throw the key on the floor of the landlord’s office. The landlord is not bound to let the key remain on the floor; he has a perfect right to hang it upon a nail without it being evidence that he accepts the surrender. ... On the contrary, he says, ‘ I will hold yojur surety responsible.’ It does not constitute a surrender or an acceptance by the landlord that he takes possession of the property and looks after it, and rents it, because that is for the benefit of both parties.
    “ [If a man refuse to continue your tenant, gives up the house into your hands, why then you have a right to put a bill upon the house, and try to rent it, because if you rent it, it is so much saved to Mr. Auer, so much saved to the surety, or the tenant, because you have to give an account of every cent you make out of the house, and certainly it is much better for the tenant that the landlord should rent the house and get something for it than to simply lock the door, and lay by and sue the tenant or the surety for the whole amount of the rent for the whole term for which he has taken it, so that, being for the benefit of both parties, it is no presumption that the landlord has accepted a surrender that he has taken and leased the house.]

      “ [In regard to the leasing .in the name of Mr. Penn, I see no pertinence in that, one way or the other. I do not see what right he would have to use Mr. Auer’s name as landlord any more than he had to use the name of any one of us, and rent any projDerty for us. He did the best — lie was bound to do the best he could for the property — it was quite immaterial under whose name he rented it.] ”
    Yerdict and judgment for the plaintiff, for the amount claimed. The defendant took this writ of error, assigning for error the answers of the court to his points, and the portion of the charge above quoted in brackets.

      M. Arnold ( Wm. W. Ker with him), for the plaintiff in error. —
    While a landlord may take possession of premises surrendered or abandoned by his tenant, without discharging the tenant from his liability to pay rent, yet if he goes farther and leases to a new tenant he thereby necessarily accepts the surrender of the former tenant. He cannot have two tenants at the same time, holding under independent leases : Pratt v. Jewelry Oo., 19 P. E. Smith 53 ; Auer n. Penn, 11 Norris 444; Smith v. Niver, 2 Barb. 182; Murray v. Shave, 2 Duer 183 ; Stobie v. Dills, 62 111. 432 ; 2 Starkie on Ev. 342; Schieffelin V. Carpenter, 15 Wend. 407. So, if a landlord takes possession of the ruins of a burned building for the purpose of rebuilding, without the tenant’s consent, it is an eviction: if with the tenant’s consent, it is a rescission of the lease, and in either case rent is suspended : Magaw v. Lambert, 3 Barr 4TL

      Wm. Gorman, for the defendant in error,
    cited Marseilles v. Kerr, 6 Wliar. 500; Breuckmann v. Twibill, 8 Nor. 58.
   Mr. Justice Baxson

delivered the opinion of the Court, February 13th 1882.

Nothing is better settled in Pennsylvania than that a tenant for years cannot relieve himself from his liability under his covenant to pay rent by vacating the demised premises during the term, and sending the key to Ms landlord. The reason for it is that in the absence of fraud, one party to a contract cannot rescind it at pleasure. And the landlord may accept the keys, take possession, put a bill on the house for rent, and at the same time apprise his tenant that he still holds him liable for the rent. All this, as was said by Mr. Justice Rogers in Marseilles v. Kerr, 6 Wharton 500, is for the benefit of the tenant, and is not intended, nor can it have the effect, to put an end to the contract and discharge him from rent. A surrender, a release, or an eviction will undoubtedly relieve a tenant, and it was said by Chief Justice Gibson, in Fisher v. Milliken, 8 Barr 111, that nothing less would do so. This remark, however, was without the authority of the court, and must be regarded as dictum. The case in hand does not require us to assert so broad a proposition. There was neither a release nor an eviction here, but the surety claimed to be discharged because after the tenant, who was his principal, sent the keys to the landlord, the latter leased the property to another tenant. Yet there is no pretence that the landlord accepted a surrender; on the contrary the proof is clear that he declined to do so, and notified the defendant below that he would hold him for the rent. This notice was repeated on more than one occasion when he was about to lease the property to another tenant. Yet it was urged by the defendant below that such subsequent leasing by the landlord, and the acceptance of rent from the tenant, raised a presumption of a surrender. A surrender of demised premises by the tenant during the term, to be effectual, must be accepted by the lessor. The burden of proof is upon the tenant to show such acceptance. lie sets it-up to relieve himself from his covenant, and must prove it. When, therefore, the lessor retains the keys, and at the same time notifies the lessee that he will hold him for the rent, there is no room for the presumption of a surrender.' Nor does the renting of the premises to another tenant under such circumstances raise such presumption, for the reason that it is manifestly to the lessee’s interest that they should be occupied. The landlord may allow the property to stand idle, and hold the tenant for the entire rent; or he may lease it and hold him for the difference, if any. It was said in Breuckmann v. Twibill, 8 Norris 58, that “ taking possession, repairing, advertising the house to rent, are all acts in the interest and for the benefit of the tenant, and do not discharge him from his covenant to pay rent.” Much more is it to the interest of the tenant for the landlord to rent the premises. If at the same rent, the tenant is entirely íelieved; if at less, he is liable only for the difference.

Upon the trial in the court below the learned judge instructed the jury, as set forth in the second assignment of error, as follows: “If a man refuses to continue your tenant, gives up the house into your hands, why, then, you have a right to put a bill upon the house and try to rent it; because, if you rent it, it is so much saved to Mr. Auer, so much saved to the surety of the tenant, because you have to give an account, of every cent you make out of the house; and certainly it is much bettet for the tenant, that the landlord should rent the house and get something for it, than to simply lock the door and lay by and sue the tenant or surety for the whole amount of the rent for the whole term for which he'has taken it; so that, being for the benefit of both parties, it is no presumption that the landlord has accepted a surrender, that he has taken and leased the house.”

' We see no error in this. It is good sense as well as good law.

We are not aware of any authorities in this state which are-in conflict with the foregoing views. Those cited on behalf of the defendant below certainly are not.

The remaining assignments do not require discussion. The fifth does not fully state the ruling of the court below. As it appears in the bill of exceptions it is entirely correct.

Judgment affirmed.


author: Mr. Justice Mercub

text:
    Tagg, to use, versus Bowman.
    1. Where the cause of action in a case is the failure of the defendant to fulfil an official or fiduciary obligation, caunot set off a personal debt due him from the plaintiff arising out óf a transaction disconnected from his official or fiduciary position.

      %. A., being seised of a piece of real estate subject to several mortgages, executed an additional mortgage thereon to B., giving to B. at the same time a warrant of attorney to collect the rents, which were to be applied to payment of taxes, water rent and the interest upon the several mortgages according to the order of their priority. B. afterwards entered judgment against A. upon the bond accompanying his mortgage. Subsequently, by virtue of his warrant of attorney, lie collected the rents of the premises, all of which ho himself retained. In an action by A. against B. to recover the amount of said rents, B. attempted to set oil the judgment entered up by him upon his bond. Held, that the set-off was inadmissible.
    3. Where the use plaintiff in a case is the purchaser of the claim in suit for value and in good faith, the defendant alleging a set-off against the legal plaintiff is not entitled to a certificate for the balance due him from shell legal plaintiff over and above the amount of the claim in suit.
    January 17th 1882.
    Before Siiarswood, C. J., Mfsrcur, Gordon, Paxson, Trunkey, and Sterrett, JJ. Green, J., absent.
    Error to the Court of Common Pleas No. 1, of Philadelphia county; Of January Term 1882, No. 69.
    Assumpsit, by John T. Tagg, to use of Horace F. Weeks, against Jonas Bowman. The narr. contained only the common, counts. Pleas, non assumpsit, payment, payment with leave, &c., and set-oil with leave, &c.
    On the trial, before Peirce, J., the following facts appeared: On January 31st 1877, the plaintiff, Tagg, executed to the defendant his bond and mortgage, on the premises at the southeast corner of Tenth aud Pine streets, to secure the sum of §4,666.66. The said premises were already subject to several prior mortgages, viz.: — two to the Philadelphia Saving Fund Society, amounting to $6,000, and one to the St. Andrew’s Building and Loan Association, for $2,500.
    On the same day, January 31st 1877, Tagg executed the following letter of attorney to Bowman, who accepted the same: — ■
    “ I, John T. Tagg, of the city of Philadelphia, do hereby constitute Jonas Bowman, of Montgomery county, Pennsylvania, my true and lawful attorney, for me, and in my name, to collect and receipt for the rents due, and to become due, from Thomas R. Kemp, tenant of the property at the south-east corner ef Tenth and Pine streets in the city of Philadelphia, during the present lease thereof, and out of such rents to pay first the taxes and water rent on said 'property; then the interest upon the mortgage thereon in the Philadelphia Saving Fund Society ; then the interest and dues on the mortgage of $2,500, thereon, in the Saint Andrew’s Building Association ; and then the interest on the mortgage of $4,666.66 thereon given to the said Jonas Bowman, as the said interests become due; aud the balance of said rents, if any, to pay over to me.”
    Bowman did not act under this letter of attorney for a period of twenty months, but then collected the rents from September 1878 to April 1879, when the premises were sold at sheriff’s sale, under the mortgage held by the St. Andrew’s Building Association. In the meantime, a claim for taxes had been filed against the premises, under which a sheriff’s sale was threatened in December 1878, when Bowman paid the claim, about §500, and had the same marked to his use. This amount he collected from the sheriff, out of the proceeds of the said sheriff’s sale. Bowman had entered judgment on the bond accompanying his mortgage on August 18th 1877. The sheriff’s sale did not produce enough to pay either the building association mortgage or Bowman’s mortgage, both of which were discharged by the sale. Bowman therefore appropriated the balance of rents in his hands towards' the payment of his judgment, and refused to comply with plaintiff’s demand to pay them over to him.
    The plaintiff, having proved the collection of rents by defendant under the power of attorney, and that he had not applied them to the payment of taxes and interest on the mortgages as therein provided, rested.
    The defendant, under his plea of set-off, offered in evidence the judgment entered on his bond. Objected to. Objection overruled. Exception.
    The court charged the jury that they should find a verdict for the defendant, and certify the amount due to him by the plaintiff. Yerdict for the defendant, and certificate in his favor for §4,678.33. Judgment having been entered on the verdict, the plaintiff took this writ of error, assigning for error the admission in evidence of the said judgment held by the defendant, as a set-off.

      Id. Haverstick and J. P. Rhoads, for the plaintiff in error.
    —The power of attorney, constituted Bowman Tagg’s special agent to collect and apply the rents to the payment of taxes, and interest on incumbrances, according to their priority, among which the interest on Bowman’s mortgage was to be paid last. Bowman accepted the trust and collected the rents, but did not apply them as directed, claiming to retain them towards the payment of his mortgage. But it is well settled that an agent or attorney, who has received money in his agency, cannot, when called upon by his principal to account, set off a debt due to him in a matter not arising out of his agency. By accepting the trust, the defendant waived any claim to set off. There is no mutuality between the two debts, the same not being due in the same right or capacity; this is essential to set off : Turnpike Road v. Watson, 1 Rawle 330; Smullor v. Canal Co., 1 Wright 68; U. S. Bank v. Macalester, 9 Barr 475; Simpson v. Pinkerton, 10 W. N. C. 423; Ardesco Oil Co. v. Mining Co., 16 P. E. Smith 379; Carman v. Garrison, 1 Harris 158; Note to Rose v. Hart, 2 Sm. Leading Oases *320.

      J. Q. Hwrmcker, for the defendant in error.
    At the time of the sheriff’s sale of the property under the building association mortgage, the property was in debt to Bowman for the taxes paid by him to prevent a sheriff’s sale. He, therefore, had no rents in hand with which to pay the interest on the building association mortgage, and prevent the sheriff’s sale, which was inevitable. When it took place, it ipso facto terminated the agency, and changed the relation between Tagg and Bowman to one simply of debtor and creditor, leaving a large balance due to Bowman. The doctrine, contended for by the plaintiff in error, that an agent may not set off a debt due him in his own right is, therefore, inapplicable.
   Mr. Justice Mercub

delivered the opinion of the court February 13th 1882.

This suit was for money defendant had collected under a letter of attorney from the legal plaintiff. It authorized him to collect of a certain tenant of the plaintiff, the rents of a property specified, and directed him to pay the same to lien creditors named, designating the order of payment, and to pay the residue, if any, over to the plaintiff. The defendant collected rents, but failed to pay the same according to directions. He held a judgment against the legal plaintiff, aud on the trial of this cause was permitted to set it off, and recover a judgment against Tagg, for the amount which it exceeded the rents in his hands. The allowance of this judgment, as a set-off, is assigned as error.

While a liberal construction is given to the Act of 1705 allowing set-off and defalcation of a debt of a proper character, yet, as a general rule, the debt must be due in the same right. It is inadmissible when the plaintiff’s cause of action is for a breach of contract to fulfill an official, or a fiduciary obligation. Although the debt may be between the same parties, yet it is not due in the same right within the true meaning of the statute. Hence the treasurer of a corporation, vdien sued for money in his hands as treasurer, cannot set off a debt due him from the corporation: Russell v. Church, 15 P. F. Smith 9. So in an action by a collector of school taxes, for taxes assessed on the defendant, the latter cannot set off a debt due him from the board of school directors: McCracken v. Elder, 10 Casey 239.

A party may also, by agreement, debar himself from pleading a set off: Hennis v. Page, 3 Whar. 275; United States Bank v. Macalester, 9 Barr 475; Carman v. Garrison, 1 Harris 158. The agreement need not be express, but may be implied; Ardesco Oil Co. v. N. A. Mining and Oil Co., 16 P. F. Smith 375.

By accepting the letter of attorney the defendant assumed the obligation, and assented to the terms, therein, imposed on him. It thereby became his duty to collect the rents and pay over the same to the several persons, in the amount therein specified. ITis right to retain any portion thereof, or to apply it to the debt due him was expressly limited to the interest thereon. PLis power to collect was coupled with the specific trust prescribed in the same instrument. Having received the money under authority of the plaintiff for a specific purpose, he cannot apply it to the payment of a previous indebtedness. It cannot thus be diverted from its legitimate purpose: Jarvis v. Rogers, 15 Mass. 397; Turnpike v. Watson, 1 Rawle 330. The parties being competent to contract, and the terms thereof not contrary to any law, there is no just reason why they shall not be faithfully observed. An agent cannot avail himself of an advantage given by his agency to apply it to his own benefit to the injury of his principal: Parkist v. Alexander, 1 Johns. Ch. 397.

The evidence fails to disclose under what circumstances Weeks, the use plaintiff, acquired the claim. If for value, and in good faith, no judgment should be recovered against the legal plaintiff, in this suit, as it then is not prosecuted for his use or benefit. The assignments are sustained.

Judgments reversed, and a venire facias de novo awarded.


author: Mr. Justice Mercur,

text:
    Biddle versus Black.
    ■ 1. An affidavit filed by the plaintiff in a cause setting out that “defendants fraudulently contracted the debt and incurred the obligation for which this claim is begun,” to which is appended a statement of account containing no further specification of the goods in question than “ merchandise” and “ goods returned,” is insufficient to warrant the issuing of a writ of attachment under the provisions of the Act of March 17th 1869, Pamph. L. 8.
    2. Where, however, such a writ is issued and personal service is effected on the defendant, and subsequently on his motion the attachment is dissolved, it is error to quash the writ. Though the property attached is released, the suit goes on.
    January 18th 1882:
    Before Mercur, Gordon, Paxson, Trunkey, Sterrett, and Green, JJ. Sharswood, O. J., absent.
    Error to the Court of Common Pleas No. 3, of Philadelphia county: Of January Term 1882, No. 26.
    On July 9th 1881, James C. Biddle and Ernest Weiss, trading as Biddle & Weiss, procured to be issued a writ of attachmentj under tlie act of March 17th 1869 (Purd. Dig. 53, pi. 71), wherein II. W. Black and---Moody were named as defendants.
    The plaintiff’s affidavit on which the attachment issued averred. an indebtedness due by defendants to plaintiffs, on a book account, for goods sold and delivered. The only averment charging fraud was the following: >l The defendants fraudulently contracted the debt, and incurred the obligation, for which this claim is begun.” Appended to the affidavit was a statement of account, consisting of eleven items: “ To merchandise,” amounting to §576.54, and one entry, “By goods returned, §419.60,” showing a balance of $156.94.
    The writ was returned: “ Attached, as commanded, certain goods, as per schedule.....Made known to [various parties] garnishees, and to II. W. Black, defendant, and nihil habet as, to Moody, defendant.” A copy of the book entries was filed July 30th 1881, and on September 3d 1881 the defendant filed an affidavit of defence.
    The defendant then entered a rule to dissolve the attachment and quash the writ, under -which rule depositions were taken.
    The court subsequently entered the following order:
    “ And now, September 22d 1881, this cause came on to be heard before the court in banc, upon the defendant’s motion to dissolve tlie attachment, and quash tlie writ in the above ease : Whereupon tlie plaintiffs, offered in evidence the depositions.....And counsel having been heard for the plaintiffs
    and defendants, the court, upon consideration of the evidence above stated, dissolved the attachment and quashed the plaintiff’s writ.”
    The plaintiffs thereupon issued a certiorari, and a writ of error, assigning for error, inter alia, the action of the court in dissolving the attachment and quashing the writ.

      O. Stuart Patterson, for the plaintiff in error,
    argued that the affidavit was sufficient, being in the terms of the z\et, and that depositions showed a clear case of fraud under the Act of 1869. At tlie time the defendant purchased our goods, he was not only hopelessly insolvent, but the sheriff was actually in possession of his goods under an execution: Mackinley v. McGregor, 3 Wli. 895.

      William Henry Peace, for the defendant in error. —
    The affidavit on which the attachment originally issued was clearly insufficient under the Act. In such case the attachment was a nullify, and the action of the court was right in quashing the writ,- as well as dissolving the attachment — notwithstanding service had been made on the defendant. It is only where the attachment was properly issued in the first instance, that the suit goes on, after appearance and dissolution of the attachment, as though commenced by a summons. In any case, the depositions were insufficient to support the attachment, and the dissolving of the attachment was proper. Mere insolvency of the buyer, though known to himself, is not a fraud: the goods must have been obtained by artifice, trick or false pretence: Rodman v. Thalheimer, 25 P. E. Smith 232; Smith v. Smith, 9 Harris, 367. Even if the writ should not have been quashed, the attachment should not be reinstated by reversing the order, but the order should be modified.
   Mr. Justice Mercur,

delivered the opinion of the court January 30th 1882.

The learned judge committed no error in dissolving the attachment. . The affidavit is defective. It does not set forth specifically, the fraudulent acts of the defendant: nor is it made in the words of the statute. It does not sufficiently describe the kind of property, and is wholly silent as to the time the merchandise was purchased. The evidence did not establish that possession of the goods was obtained by artifice or false pretences, indicating an intention to defraud the vendors. Mere insolvency and knowledge of it by the vendees do not establish fraud in the purchase: Rodman v. Thalheimer, 25 P. F. Smith 232, and cases there cited. It was error, however, to quash the writ. There had been a personal service on the defendant. While the property was justly released, yet the suit goes on: Sharpless v. Ziegler, 11 Norris 467.

As to so much of the judgment as quashed the writ, judgment reversed and a procedendo is awarded.