text:
    Appeal of McCandless et al., Executors.
    Where upon the partition of a tract of land owelty is awarded, the same constitutes a lien upon the purpart on which it is charged, prior to that of a mortgage of his undivided interest given by the tenant of such purpart before the partition.
    October 7th 1881. Before Shabswood, O. J., Mercur, Paxson, Trunkey, Sterrett, and Green, JJ. Gordon, J., absent.
    Certiorari to and appeal from the Court of Common Pleas No. 1, of Allegheny county: Of October and November Term 1881, No. 1S3.
    Appeal by Wilson McCandless et al., executors of Robert W. Mackey, deceased, from a decree of said court dismissing their exceptions to the report of an auditor distributing the proceeds of a sheriff’s sale, and confirming the report.
    The facts material to this case were as follows: — John Adams died December 3d 1872, having by his will dated January 25th 1870, devised his real estate to his widow for life, and lie directed his executors to sell the same upon her death and divide the proceeds equally among his seven children, all of whom survived him, subject as to the share of his daughter Ann Eliza Mackey, to certain deductions. Mrs. Adams, the testator’s widow, released her life estate in the land, and the seven children, being of full age, elected in writing to take their interest as land instead of the proceeds thereof.
    By mortgage dated October 8th 1875, the said Ann Eliza Mackey (her husband, William H. Mackey, joining) mortgaged her undivided interest in the whole tract of which her father died seised, to Bobert W. Mackey, for $2,000.
    Subsequently proceedings in partition were had, wherein the interest of Mrs. Ann Eliza Mackey was fixed at $5,923.05. Equal partition being impracticable, the land was divided into seven purparts of unequal value; purpart No. 6, valued at $9,480, was allotted to Ann Eliza Mackey, charged with $3,556.95 for owelty of partition. _
    Subsequently, in 1880, the mortgage of Ann Eliza Mackey and her husband to Bobert W. Mackey for $2,000, was foreclosed by scire facias, and the property and estate bound thereby was sold at sheriff’s sale for $1,600. The sheriff made a special return, awarding the entire fund, after payment of the costs, to Bobert W. Mackey, on account of his mortgage. Exceptions being filed to the return by one of the parties entitled to owelty of partition, the matter was referred to an auditor (James C. Doty, Esq.), who reported distribution of the fund to the several parties entitled to owelty of partition, pro rata, on the ground that the lien of such owelty on the purpart acquired by Ann Eliza Mackey was prior to the lien of her said mortgage of her undivided interest. The said mortgage was not reached in the distribution.
    To this report Bobert W. Mackey’s executors filed exceptions', which were dismissed by the court, whereupon they took this appeal, assigning for error, inter alia, the dismissal of their exceptions and the confirmation of the report.

      G. W. Guthrie, for the appellants.
    When one of several co-tenants mortgages his undivided interest, and a partition is subsequently had, a distinction should be observed between the case of equal partition, and that of an unequal partition, where the co-tenant, the mortgagor, elects to take a purpart greater in value than his share, charged with owelty. In the former case the lien of the mortgage attaches, as a first lien, to the mortgagor’s purpart in severalty. In the latter case, I contend, the mortgage will continue to be the first lien on such an interest in the augmented purpart as will represent the mortgagor’s equal share, and a second lien on the excess ; and the owelty, which represents the purchase money of the excess parted with by the other co-tenants, will be a first lien on such excess, and a second lien on the original share. A sale under the mortgage passes only the original interest of the mortgagor, and of course the mortgage is entitled to be first satisfied out of the proceeds. But by the rule adopted by the court below the effect of an unequal partition is to convert the first lien of the mortgage on the original interest into a second lien on the whole acquired interest, subject to the owelty. As the mortgagee cannot be heard in the partition, the result is that, without a day in court, his first lien on the mortgagor’s original interest is taken away from him for the benefit of the parties credited with owelty in a partition had subsequent to the date of the mortgage. It is argued that the mortgagee of an undivided interest takes subject to the co-tenant’s right to a partition. True, but this right is to enforce a fair and equal partition of the land, or, if that cannot be made, to have it sold at public sale. No co-tenant can compel another to accept an augmented purpart at a valuation ; this is a privilege which one or more co-tenants may elect to accept; but, if such co-tenant has previously mortgaged his undivided interest, he has deprived himself of such privilege, unless his incumbrancer be secured. It is said a sale in partition would divest the mortgage : true, but such sale is a public sale at which the mortgagee may bid, and the lien is merely transferred to the fund; while the mortgagee can in no way protect himself against the selection by his mortgagor of an augmented purpart.
    If one of two co-tenants mortgages his undivided interest and then purchases his co-tenant’s interest, the purchase money would not be a first lien on the whole tract. Yet this is the equivalent of a selection by the mortgagor of an augmented purpart at a valuation subject to owelty. If each of two co-tenants mortgage his undivided interest, and in a subsequent partition A. takes the whole land at a valuation, the .mortgage given by B. would, according to the doctrine of the court below, be converted practically into a first lien on the whole land, and slipped under the other mortgage, as the owelty charged would be first applied to it and stand for its use. The anomalous result is reached of the lien of a first mortgage being opened up, not only to let in a prior lien, but also to become a second lien on an after-acquired interest! But how? Land cannot pass as appurtenant to land; nor by virtue of warranty, nor by any doctrine of conversion or substitution. If the owelty be paid, the result would be to give the mortgagee a better security than he had before the partition, which is equally anomalous. There is no precedent in ¡joint, but Randell v. Mallett, 14 Me. 51, is analogous in principle in favor of our contention.

      Slagle (with him John Barton, Whitesell Ǝ Son, and Wiley), for the appellees.
    A mortgagee of the undivided interest of a co-tenant takes subject to partition, with all its incidents, one of which is the right of the mortgagor take a purpart greater than his share, on the whole of which purpart owelty will be charged as a first lieu: Cubbage v. Nesmith, 3 Watts 314; Allen v. Reesor, 16 S. & R. 10. The appellant claims that a sale under the mortgage passes only the mortgagor’s first estate, leaving the second still in the mortgagor subject to the owelty. But the purpart would then be held in common, undivided and indivisible, unless by some accident both titles should become united in the same person. The tenant entitled to owelty would have a lien on an uncertain interest, and if such interest were sold on the lien, the purchaser — whether the tenant or a stranger — would hold in common, and “partition” would be defeated. It is the right of partitioned to acquire their purpart in severalty. Where the purparts are unequal the interest represented by owelty is converted into personalty, and is a fixed lien on the-entire purpart; and one co-tenant cannot by mortgaging his interest or by any other act limit or take away the rights of the others : Diermond v. Robinson, 2 Yeates 324; Bavington v. Clarke, 2 P. & W. 115; Long’s Appeal, 27 P. F. Smith 151; Wright v. Vickers, 31 P. F. Smith 1221 The lien of the owelty relates back to the inception of the co-tenancy, and the owelty is assumed to be the exact value of the accession to the original interest; therefore the value of the entire purpart subject to the owelty is the-exact equivalent of the interest mortgaged. If the mortgagee had brought ejectment or foreclosed his mortgage before partition, and bought in the mortgagor’s undivided interest he would have held-it subject to partition, and subject to the lien of owelty that might be charged on his purpart. lie can be in no better position by waiting until after partition to foreclose. The allotment of a purpart in partition is not like the acquisition of a new and independent interest, as was the case in Eandell v. Mallett, cited by the other side. The mortgagee here, after partition, had a second lien on the entire purpart; a sheriff’s sale under his mortgage passed the entire estate, and the proceeds were properly applied in satisfaction of the owelty which was the first lien: Riddle & Pennock’s Appeal, 1 Wright 177.
    October 31st 1881.
   Mr. Justice Mercur

delivered the opinion of the court,

Neither a judgment nor a mortgage lien against one tenant in common prevents a partition, either at his instance or at that of any other of the tenants. Bavington v. Clarke, 2 P. & W. 115. The mortgagee of an interest in an undivided estate, is not entitled to be made a party to a proceeding in partition : Long’s Appeal, 27 P. F. Smith, 151. He has an incumbrance only on the land : but no estate in it. He has no right whereby he can elect to take or to refuse a purpart, nor can lie give security for owelty: Id. The primary object of partition is to divide the land among the tenants according to their respective shares therein. If such a partition is not practicable without prejudice to the whole, then only, should it be partitioned into purparts of unequal value. In case of a lien on the interest of a co-tenant to whom a purpart is allotted in severalty, the lien follows the separation and attaches only to the estate so taken, but is discharged as to the other purparts: Jackson v. Pierce, 10 Johns. 414; Bavington v. Clarke, supra; Long’s Appeal, supra; Wright v. Vickers’ Adm’r, 31 P. F. Smith 122.

The rights of tenauts in common to make partition and to enjoy all the incidents connected therewith, are paramount to the rights of a lien creditor against any one of the tenants. If necessary to effect the legitimate purpose of partition, such a lien must yield some of its former binding force, and may even be wholly divested. Hence, notwithstanding the Act of 23d March 1867 declares that the lien of a first mortgage shall not be destroyed or in any way affected “ by any judicial or other sale whatsoever,” yet where after the commencement of proceedings in partition one of the co-tenants executed a first mortgage on his undivided interest, and the proceedings in partition resulted in a sale by the sheriff, it was held that the lien of the mortgage was thereby divested: Wright v. Vickers’ Adm’r, supra. The case was not ruled on the ground that the mortgage was executed during the pendency of the proceedings in partition; but on the broader ground of the paramount rights of tenants in common to make partition and to enjoy all the incidents • flowing therefrom. Section 38 of the Act of 29th March 1832, Pur. Big. 436, pi. 150, provides in case equal partition in value cannot be made, and the court orders the purparts to those entitled thereto, it shall award them “subject to the payment of such sum or sums of money as shall be necessary to equalize the value of said purparts according to the said appraisement thereof.” The purpart of which the proceeds are now in contention, was so allotted “ subject to the payment as owelty in partition” of sums sufficient to equalize the valuation. The lien of the recognizance- then attached to the whole estate thus taken : Long v. Long, 1 Watts 265; Cubbage v. Nesmith, 3 Id. 314.

Liens for owelty of partition in the Orphans Court in several respects stand on a different footing from liens of judgments in the Common Pleas. The former are in the line of title, and must be looked for in the proceedings of partition; liens in the latter court are outside of the line of title. A judgment docket is required to be kept in the Common Pleas for the information of subsequent lien creditors’ and purchasers. None is required in the Orphans’ Court. To ascertain in regard to a lien there, the proceedings in partition must be examined: Riddle & Pennock’s Appeal, 1 Wright 177.

A purpart taken in severalty is allotted as an entirety. Whether the tenant’s previous interest in the whole was large or small it matters not when he takes a purpart charged with owelty. He takes it as a whole. The recognizance to secure-the payment thereof- attaches to the whole. Why shall it not become the first lien thereon ? A co-tenant for whoso benefit the recognizance is taken, may be divested of his whole estate in all the land partitioned. His only security for payment is the recognizance. There is no line of separation or division running through a purpart by which it can be divided to apportion liens.

Presumably, the tenant thus taking acquires an estate in land of a value as much greater than his previous estate, as the amount of the owelty is, charged thereon. Hence, although a previous lien on an undivided interest may, in form, be displaced by the lien of the owelty in partition, yet the effect is more imaginary than real. It will practically bind land of a value equal to that on which it was a lien before partition. The partition has added to the value of the estate of the tenant a sum equal to the amount of the owelty charged thereon.

Conceding, however, that a second lien is not as desirable as a first one, yet when a person obtains a lien against the estate of a tenant in common, he assumes that risk. He knows the estate is subject to partition and all its incidents. He cannot impair any of the rights of the co-tenants. Their rights are superior to the rights of a lien creditor of one tenant. Such a lien will not deprive them of any right incident to a partition, that they might otherwise have enjoyed.

The case of Randell v. Mallett, 14 Maine 51, is not applicable to tbe present ease. That was not a partition subject to oweltycharged on a purpart. The lien there in contention was not in the line of the title; but merely an incumbrance on the land. It was therefore correctly held that it was not in the power of the mortgagor, by a sale of part of the land, and subsequent partition, to extinguish the lien on the parts sold, without the consent of the mortgagees. We have thus considered the only question urged on the argument, and discover no error in the record.

Decree affirmed, and appeal dismissed at the costs of the appellant.


source: Caselaw Access Project

author: Mr. Justice Paxson

license: Public Domain

text:
    Murphy versus Crossan.
    1. Where an employer is informed that certain machinery upon his premises, out of sight of his employés, is in a dangerous condition, and he takes steps to renew the same, but before the renewal is made, one of the employés, haviug no notice of the dangerous condition of the machinery, is injured by its breaking in the ordinary course of his employment, in a suit by the employé, the question of the employer’s negligence must be submitted to the jury.
    2. A., being the owner of a hotel, was informed by the engineer of the baggage elevator that the wire rope sustaining it was in bad condition and would have to be renewed. A. accordingly, shortly afterwards, ordered a new rope to be made. During the process of its manufacture, and before completion, the elevator was run as usual, the baggage porter in charge thereof not being informed of the condition of the rope. Said rope was so situate that the porter could neither see it nor judge of its condition. While engaged in lowering trunks on said elevator in the ordinary course of his employment, said porter was.iujured by au accident, occasioned through the breaking of the rope. Suit having been instituted by him against A. to recover damages for his injuries alleged to have been occasioned by the defendant’s negligence, — Held, that it was under the circumstances error to nonsuit the plaintiff, there being evidence of negligence on the part of the defendant which should have been submitted to a jury.
    3. In such case, the jury should have been instructed that the defendant was not an insurer of the soundness of the rope, and that the measure of his duty was reasonable care.
    October 7th 1881. Before Shaeswood, O. J., Merour, Paxson, Trunicey, Sterrett and Green, <JJ. Gordon, J., absent. '
    Error to the Court of Common Pleas No. 2, of Allegheny county: Of October and November Term 1881, No. 218.
    Case, by Terence Murphy against J. McDonald Crossan, to recover damages for injuries suffered by the plaintiff, caused, as alleged, by the defendant’s negligence.. Plea, not guilty.
    On the trial, before White, J., the plaintiff’s evidence was to the following effect: — The plaintiff was a porter in the employ of the defendant, who is the proprietor of the Monongahela House in the city of Pittsburgh. As such it was his duty to take baggage up and down in a baggage elevator, the carriage of which was raised and lowered by steam power, by means of a wire rope 165 feet long, attached to the carriage and to a revolving drum in the cellar connected with the engine. This rope was concealed from view. On April 25th 1877, the plaintiff placed upon the elevator, at an upper story, two trunks, each weighing about 350 pounds, and some small baggage, and, with an attendant, started the elevator downwards. This was not an unusually heavy load. When about 37 feet from the ground floor the rope broke, precipitating the elevator with its contents into the cellar. The plaintiff was injured, having his jaw bone broken, and suffered other injuries. He was confined to bed for about two weeks, and resumed his work at the elevator in about a month. The defendant paid all expenses incidental to the plaintiff’s illness. After remaining in the same employment for about a year, the plaintiff left and brought this suit.
    The engineer in charge of the elevator testified that it had been customary to renew the rope at intervals of about a year; that the rope in question had been in use only nine or ten months, but that it had been spliced and he did not consider it very safe; that about six or eight weeks prior to the accident he reported its condition at the office ; “ said that the rope was getting bad, and we would have to get a new one; ” that again, eight or ten days prior to the accident-, he told the defendant that “ he would have to get a new rope, for that one was worn out, and Mr. Crossan told me that he had seen it, and that he had ordered a new one.” The new rope was delivered at the hotel on the same day or the day after the accident happened.
    At the close of the plaintiff’s case the defendant moved for a nonsuit, on the ground that there was no sufficient evidence of the defendant’s negligence, and because the plaintiff had better opportunity of knowing the condition of the elevator and the rope than the defendant.
    The. court granted the nonsuit, and subsequently refused a motion to take it off, whereupon the plaintiff took this writ of error, assigning for error the refusal of the court to take off the nonsuit.

      Fitzpatrick and Parkinson (Breil with them), for the plaintiff in error.
    There was evidence of defendant’s negligence in permitting to be used a rope the defectiveness of which had been brought to his notice, and such negligence was the direct cause of the accident. In such case the question of negligence is always for the jury and not for the court: Johnston v. Bruner, 11 P. F. Smith 58 ; Paterson v. Wallace, 28 Eng. Law & Eq. Rep. 48, 51. An employer is bound to provide his laborers with safe machinery, and if he is negligent in this respect he is liable, even if the injury result from the act of a fellow, servant: Wood’s Law of Master and Servant, 681; Mullan v. Steamship Co., 28 P. F. Smith 25 ; Patterson v. P. & C. R. R. Co. 26 Id. 389; Ryan v. Fowler, 24 N. Y. 410; Oak Pidge Coal Co. v. Reed, 5 W. N. C. 3. If the tool or machinery be perishable the employer is bound to know that fact, and to renew it at proper intervals : Baker v. Allegheny V. R. R. Co., 9 W. N. C. 337.

      Thos. M. Marshall, for the defendant in error.
    The defendant provided the best elevator, and put it in charge of a skilled engineer. On notice that the rope was wearing, he ordered a new one, which arrived on the day of the accident. The safety or danger of running the old one in the meantime was a matter in the discretion of the engineer, a fellow-servant with the plaintiff. The master did his whole duty; if there was any negligence, it was by the engineer. A mere scintilla of evidence connecting the defendant with the injury is insufficient to take the case to the jury, and the court rightly granted a nonsuit. The plaintiff did not allege negligence until more than a year after the accident, when he left his employment in consequence of a-dispute with the clerk.
    October 24th 1881.
   Mr. Justice Paxson

delivered the opinion of the Court,

We think it was error to nonsuit the plaintiff. There was evidence that the defendant had been notified some time before the accident that the wire rope used for the baggage elevator was worn out: The defendant replied that he had seen it; the

rope was bad, and that he had ordered a new one. In the meantime he continued to use the old rope, and, so far as the testimony shows, without any examination to ascertain whether it would be safe to use it until the arrival of the new one, and without informing the plaintiff, who was a baggage-porter employed in taking baggage up and down on the elevator, that it was unsafe, or giving him any caution to use it with more care, or carry lighter loads. It is to be observed that the rope was so situated that the plaintiff could not see it or judge of its condition.

Under these circumstances we think the defendant, assumed the risk of the breaking of the rope. It is true he was not an insurer of its soundness. He is to be held to the rule of reasonable care, and may be able to satisfy a jury that he has done all that such a rule requires. All we decide is that the evidence was sufficient to carry the case to a jury.

Judgment reversed, and a venire facias de novo awarded.


text:
    Cauley versus Pittsburgh, Cincinnati & St. Louis Railway Company.
    1. In an action by a boy seven years of age against a railroad company to recover damages for an injury alleged to have been occasioned by the negligence of defendant’s servants, plaintiff offered to prove that he being in company with some older boys playing upon a flat, car loaded with sand which stood upon a switch of the defendant’s railroad on the outskirts of a city, the said car was shifted by defendant’s servants to another switch a few yards distant, and that while said car was in motion, defendant’s servants by threats compelled the plaintiff and his companions to jump off, in doing which plaintiff fell and was run over, receiving the injury, to recover damages for which suit was brought. Held, that conceding that the plaintiff had not been guilty of contributory negligence, the offer entirely failed to show any negligence on the part of the company defendant, and that, therefore, the evidence was rightly excluded.
    2. An offer to prove that the car was at the time the plaintiff was forced to jump therefrom in the above case, in rapid motion, was held to have been rightly refused, as it was a physical impossibility that the car could have attained rapid speed in being moved from one switch to another only a few yards distant.
    3. An offer to prove an improbable thing must be received. But an offer to prove a fact which can only exist by the suspension of natural laws, does not come within this rule.
    4. Cauley v. Pittsburgh, Cincinnati & St. Louis Railway Company, 14 Norris 398, reiterated.
    October 7th 1881. Before Sharswood, O. J., Mercur, Paxson, Trunket, Sterrett and Green, JJ. Gordon, J., absent.
    Error to tlie Court of Common Pleas No. 2, of Allegheny county: Of October and November Term 1881, No. 180.
    Case, by John H. Cauley, a minor, by his father and next friend John Cauley, against the Pittsburgh, Cincinnati and St. Louis Railway Company, to recover damages for an injury to plaintiff, alleged to have been caused by the negligence of the defendant company’s servants.
    The plaintiff’s father brought an action at the same time against the same defendant, to recover damages for the loss of his son’s services, &c. Both cases resulted in judgments for the defendant.
    One writ of error was taken to the supreme court in both cases, which was quashed, on the ground that a separate writ should have been taken in each case. The facts of the case, the rulings of the court below, the arguments of counsel and the opinion delivered by Mr. Justice Paxson, quashing the writ of error but expressing an opinion on the merits of the cases, will be found reported in 14 Norris 398. The record in both cases was remitted to the court of Common Pleas. Subsequently the plaintiff took the present writ, assigning the same errors as upon the first writ of error.

      A. M. Watson, for plaintiff in error.

      Hampton and JDalzell, for defendant in error.
    January 3d 1882.
   Mr. Justice Paxson

delivered the opinion of the Court

This case has been twice argued. There were two suits brought against the defendant company to recover damages for the injuries complained of; one by the father, in his own right,' the other, which is the present case, by the boy who was injured. They were argued together, and the writ in each case quashed, for the reason that but one writ was issued to bring up the two cases. As they were fully argued we deemed it proper to express our opinion upon the merits. No fault was found with our view of the case in which the father sued in his own right, but as to the present case the learned counsel for the plaintiff was of opinion that we had not given due consideration to the distinction which exists between children and adults in the matter of contributory negligence. A second writ of error was accordingly sued out, and was heard at the last terna in the western district.

A re-consideration of the case, aided by the second argument, has failed to satisfy us of any error in the former opinion. The distinction referred to was not lost sight of. It is true we did not discuss it then, nor do we propose to do so now, for the reason that, conceding all that is claimed for it, no negligence was shown or offered to be shown, on the part of the defendant company. All the conductor did was to order the plaintiff off the car. This was his duty to do. The boys were trespassers, and their removal from the car was not in itself a cause of complaint. Was there anything in the manner' of their removal which would render the defendant company liable in damages ? The plaintiff was not thrown off. lie was not touched by the conductor or any railroad employe. He was told to get off a sand car which was being shifted from a siding to a switch a few yards distant. Had the conductor any reasonable -ground to believe when he told the boys to get ■ off that any of them would be injured in doing so ? Before the company can be held liable it must appeal1 that the injury to the plaintiff was the natural and probable result of the conductor’s order: such a consequence as he might and ought to have foreseen at the time: Hoag v. The Railroad Company, 4 Norris 293. A sand car is a low flat from which an ordinary boy between seven and eight years of age can jump with perfect safety. If, as was alleged, and offered to lie shown, the plaintiff was frightened at the order he received, it is difficult to perceive how such fact can impute negligence to the defendant. If the brakeman approached the boys in a manner indicating an intention of enforcing the conductor’s orders, it only shows they had refused to comply with his previous request. It was urged, however, and there was an offer to prove,‘that the car was going at “ a rapid rate of speed ” when the plaintiff was told to get off. As a general rule, when an offer of evidence is rejected, we must assume tile facts to be as stated in the offer. But in the present instance the plaintiff’s own statement of his case shows this portion of the offer to have been a physical impossibility. The history of the case, which we have a right to assume to be correct, contains this statement: “ On the 20th of September 1879, John H. Cauley, the minor son of John Cauley, and of plaintiff in this suit, about 9 o’clock a. m., in company with a number of small boys but little older than himself, were playing on a car laden with sand, upon a side track of defendant’s road, which car formed part of a-1 train that the defendant’s employés, under the direction of one of the freight conductors in charge, were shifting, in order to run the same upon a switch a few yards distant. These boys had been playing upon this sand car, and after the train began to move towards the switch with increased speed, the conductor ordered them to get off the car.” That this sand car, in being shifted from a side track tó a switch but a few’ yards distant, could afcquire a “ rapid rate of speed,” is such a physical impossibility as to render the use of those words in the offer of no significance. An offer to prove an improbable thing must be received, but an offer to prove a fact which can only exist by tbe suspension of natural laws does not come within "the rule.

From the best consideration we can give this case we are of opinion the judgment must be Affirmed.

Tbunkey and Sterrett, JJ., dissented.


author: Mr. Justice Sterrett

text:
    Robb’s Appeal.
    1. A widow cannot testify in support of claims against her husband’s estate, with regard to confidential communications made by him to her. •She may, however, testify in such case, with regal'd to ordinary business transactions and conversations in which others have participated.
    2. Where a claim for wages is presented by a domestic servant against the estate of a decedent, the widow of the decedent is a competent witness to testify as to conservations between her husband, herself and the claimant, which resulted in the contract of hiring.
    3. Where the findings of fact upon which decrees either of the Orphans’ Court or of the Common Pleas are based, are not especially assigned as error, they are not reviewable by the Supreme Court.
    October 7th 1881. Before Sharswood, C. J., Merour, Paxson, Tbunkey, Sterrett and Green, JJ. Gordon, J., absent.
    Appeal from the Orphans’ Court of Allegheny cownty: Of October and November Term 1881, No. 121.
    Appeal of John Robb and others, brothers and distributees under the intestate law, of David Robb, deceased, from the decree of the said court dismissing their exceptions to the adjudication in the matter of the distribution of the balance appearing on the account of Jane Robb, widow and administratrix of the said decedent.
    Before the auditor, Mary Steen, a sister of the accountant, presented a claim of $1,582 for wages as a domestic servant from October 1st 1870, until the death of the decedent, September 10th 1877. She alleged an express contract of hiring made by the deceased at the rate of $3 per week, afterwards increased to $3.50 per week. The claimant proved the performance of services during the time named, and that they were worth at least $3.50 per week.
    In order to prove the alleged express contract, the claimant called as a witness Jane Robb, the widow and administratrix, who was objected to as incompetent to testify against the estate of her deceased husband. Objection overruled. Exception. The witness testified that at the time Mary Steen was employed by her husband, she was living with a Mrs. Dean in Allegheny, and. getting $3 a week wages; that her husband (the decedent) said that as they required some help, they might as well pay helas a stranger, and he would pay her whatever she got from .strangers; that Mary Steen accepted that arrangement, and came to live with them; that Mrs. Dean afterwards offered her $3.50 a week, if she would go back to her, and that Mr. Robb said she was worth all to him she was to any one else, and he agreed to give her $3.50 a week. The appellants alleged that Miss Steen, being a sister-in-law of the decedent, lived with him and was provided for as a member of his family, without wages. They also interposed the statute of limitations as a bar to that part of the claimant’s demand, which accrued more than six years prior to the death of the decedent.
    The court, without referring to this objection, decreed to the claimant the sum of $1,466.70, being the entire fund for distribution. John Robb and others took this appeal, assigning for error the admission of Jane Robb as a witness, and the entering of said decree.
    Whitesell, Jr. and Wier ( Whitesell, Sr. and Gibson, with them), for the appellants.
    All the facts testified to by Jane Robb were learned by her from her husband during coverture, in consequence of her domestic relation. She was, therefore, improperly admitted to disclose the knowledge thus acquired : Hitner’s Appeal, 4 P. F. Smith 117. In view of the relationship existing between the parties, there could be no recovery except on the basis of an express contract, and Mrs. Robb was the only witness called to prove such contract. Her, knowledge thereof, derived from her domestic relation, was within the class of communications of a confidential nature, to which the wife is not permitted to testify : Cornell v. Vanartsdalen, 4 Barr 374. The statute of limitations was clearly a defence to the earlier portion of the appellee’s claim, but the court ignored that branch of our defence.

      Thomas M. Marshall, for the appellee.
    The knowledge of the widow was in uo sense confidential, and she was clearly a competent witness under Peiffer v. Lytle, 8 P. F. Smith 392, and Cornell v. Vanartsdalen, 4 Barr 374.
    October 31st 1881.
   Mr. Justice Sterrett

delivered the opinion of the court

It is contended that, on grounds of public policy, the widow of the decedent was incompetent to testify to the contract on which appellee’s claim for wages is based; that the disqualification incident to coverture continued after the death of her husband, and is not limited to what occurred in their confidential intercourse, but extends to all facts and transactions which came to her knowledge during their marital relations. While the. principle, thus broadly stated, has sometimes been recognized, the better and more generally received opinion is that the disqualification is restricted to communications of a confidential nature, and does not embrace ordinary business transactions and conversations in which others have participated. This appears to be the principle recognized in our own cases: Cornell v. Vanartsdalen, 4 Barr 364; Peiffer v. Lytle, 8 P. F. Smith 386. The Orphans’ Court, adhering to this view of the law, permitted the widow to testify to conversations between her husband, herself and the appellee, which resulted in a contract of hiring, in pursuance of which the latter entered the service of Mr. Iiobb in October 1869, and continued therein until his death on September 10th 1877. These conversations, as shown by the testimony, are not, in any proper sense of the term, confidential communications, and there was therefore no error in permitting the witness to testify.

From the evidence properly before him the learned judge found, among other things, that when the appellee first entered the service of the decedent, he agreed to pay her $3 per week, u but subsequently increased her wages to $3.50 per week. He paid her nothing, and no demand was made. The matter, however, was discussed, and the contract was distinctly recognized as in existence. She did not need the money, and he was allowed to have the use of it.” In the absence of any exception to the finding of these or any other facts in the case, it must be conclusively presumed that the appellee entered the service of the decedent under a contract for wages at $3, which was shortly afterwards increased to $3.50 per week; that while the existence of the contract relation was distinctly recognized, she neither demanded nor received any of her wages, but, for the reason stated, permitted the same to remain in the hands of her employer for his use and benefit. These facts necessarily led to the conclusion that the appellee’s claim against the estate exceeded the net balance for distribution, and in the absence of any other valid claim the whole fund was awarded to her, on account. Li other words the decree is based upon and fully sustained by the facts distinctly found by the auditing judge, and not excepted to or assigned for error. The findings of fact, upon which decrees, either in the Orphans’ Court or Court of Common Pleas, are based, are not reviewable here unless they are specially assigned as error.

Aside from the evidence of an express contract, which was found by the court, tile testimony, returned with the record but not printed in full by appellants, clearly shows that the services, rendered by the appellee from October 1869 to the death of Mr. Robb, were reasonably worth at least $3.50 per week. It was shown that, in addition to her general household duties, she did all the family washing, attended to the cows, and at times cleaned the stable, and rendered other services outside the ordinary work of a female domestic. The lowest estimate placed on the value of her services by any of the witnesses is $3.50 per week.

The complaint in the second assignment is that, “ The court erred in overruling the defence of the statute of limitations.” If in point of fact this was done, it would be error. tTpon the facts of the case, as disclosed by the testimony, the statute of limitations was undoubtedly a bar to so much of appellee’s claim as was due and payable more than six years’ prior to the death of the intestate. In other words, her right to recover was limited to the six years’ services immediately preceding his death, with the interest thereon from the time her weekly wages were due and payable. The court found that shortly after the original contract was made, her wages were increased to $3.50. At that rate her claim, including interest, would be about $100 more than the net balance for distribution. This was doubtless the reason why the court took no notice of the defence under the statute of limitations. It was apparent that her claim for that portion of her services not barred by the statute, computed, according to the terms of the contract, would exceed the fund for distribution, and therefore the question as to the bar of the statute became wholly immaterial.

There is nothing in any of the assignments of error that requires further notice.

Decree affirmed and appeal dismissed at the costs of the appellants.


author: Chief Justice Sharswood

text:
    Appeal of Aultman et al. Appeal of Fawcett et al. Hopkins’s Appeal.
    ■ 1. By the constitution and laws ¿of the state of Ohio, the stockholders of a certain corporation incorporated under the laws of that state, were made personally liable to the creditors of the corporation in an amount equal to the stock subscribed. Said corporation having become hopelessly insolvent, and all its assets, real and personal, being exhausted, and all the stockholders thereof residing within this commonwealth, and capable of being served with process. — Held, that the courts of this Commonwealth had jurisdiction to enforce against said stockholders the personal liability above-mentioned in favor of the creditors of the corporation.
    2. Bank of Virginia ¶. Adams, 1 Parson’s Eq. 534, distinguished.
    3. A bill in equity was filed against the above-mentioned corporation to enforce the said personal liability of the stockholders by a complainant who averred that be, with the assistance of others, bad purchased and taken to himself an assignment of all tbeindebtedncsss of the corporation, thereby constituting himself the sole creditor of the corporation in trust for himself and the other purchasers. He prayed, therefore, that an account should be taken, and that each stockholder should contribute to the complainant on account of said indebtedness. Subsequently, after answers filed, the court permitted an amended bill to be filed, wherein all the purchasers of the corporation’s indebtedness, who were thereby declared to be stockholders of the corporation, were joined as' complainants, the prayer being that each of the stockholders should contribute and pay to the original complainant as trustee, his or her just proportion of the debts purchased. Held, that there was no change in the cause of action, but merely a formal change in the ground on which the complainant’s equity was rested. In the original bill, he claimed as a creditor; in the amended bill, lie claimed as a stockholder who had paid more than his share of the debts, and sought contribution from the other stockholders. In either ease the decree would be the same. Held, therefore, that the action of the court in permitting the amended bill to be filed was not error.
    4. Where there is a legal plaintiff either at law or in equity it is not essential that his cestui que trust, if he be a trustee, should be named in the action or proceeding. If, however, the court order such cestui que trust to be made a party to the record, it is not error calling for reversal, since the defendant cannot be harmed thereby. He is indeed benefited, as be has additional security for costs.
    5. Where at the request of the directors of a corporation the creditors thereof grant an extension of time for the payment of their'debts, such extension will not release the stockholders of the corporation from a personal liability for such debts where such liability is imposed by statute.

      6. Semble, that a stockholder of a corporation holding by transfer from a subscriber may relieve himself from liability for unpaid installments upon his stock by a transfer duly entered on the books and accepted by the corporation. An original subscriber cannot, however, thus relieve himself from liability.
    7. A stockholder in. a failing corporation cannot by transferring his stock relieve himself from his liability thereon as provided by law.
    8. Whore stock is transferred as collateral and stands in the name of the pledgee, the liability of such pledgee in respect to the stock is the same as though he were the beneficial owner.
    9. By the constitution of the state of Ohio all stockholders in corporations chartered under the laws of that state are made subject to a certain individual liability for all stock “ owned” by them. Held, that said liability exists not only in respect of stock subscribed for, but also in respect of stock distributed as a stock dividend.
    10. Where certain stockholders of an insolvent corporation buy at a public sale property of the corporation they are not entitled to any advantage over the other stockholders in respect thereof, and where there has been no laches they will be held obliged to account to such other stockholders for any profits they may have realized.
    October 8th and 10th 1881. Before Sharswood, O. J., Mercur, Gordon, Paxson, Trunket, Sterrett and Green, JJ.
    Appeals from the Court of Common Pleas No. 2, of Allegheny cotmty: In equity : Of October and November Term 1881, Nos. 11, 279 and 252.
    These were separate appeals fi’om the same decree. The bill was filed by Thomas Eawcett, plaintiff, against E. Ball & Oo., a corporation chartered under the laws of the state of Ohio, O. Anlttnan, James II. Hopkins, and numerous others, defendants, being all the stockholders in said corporation.
    The bill, as originally filed, set forth that “E. Ball & Co.” was an Cliio corporation for manufacturing agricultural implements, having a capital stock of five thousand shares each of the par value of $100. That on September 17th 1870, the company was insolvent, and indebted to the extent of $930,234.48, the greater part of which was evidenced by negotiable paper, indorsed for accommodation by tbe plaintiff Eawcett, a part of which he was subsequently compelled to pay. That the property of the company was sold at public sale, by resolution of tbe trustees, for tlie sum of $110,500, which was applied towards the payment of said indebtedness. That complainant, with tlie assistance of others (afterwards known as the Pittsburgh syndicate), purchased and took an assignment to himself of all the company’s indebtedness, amounting to $427,272.56, thereby constituting him the sole creditor of the company, in trust for him-. self and the other members of the syndicate. That under - the laws of Ohio, each stockholder is individually liable, over and above the amount of stock owned by him to a further sum equal in amount to such stock. The bill prayed an account to ascertain what amount each defendant should pay and contribute to the plaintiff on account of such indebtedness, and that payment thereof be decreed.
    Answers were filed by some of the defendants, and the bill was taken'pro confesso as to others. A replication was filed, and the cause was referred to an examiner and master to take testimony and report.
    Subsequently, on motion of the plaintiff, the court, under objection and exception by defendants, permitted the replication to be withdrawn, and an amended bill to be filed.
    The-bill, as amended, named as complainants (instead of defendants) all the members of the syndicate, for Whom the plaintiff was trustee, nine-tenths of whom, in value, resided in Pittsburgh, where the principal business of tlje corporation was transacted. The prayer of the bill, as amended* was : “ That each one of the defendants contribute an^^^^plaintiff, as trustee, his or her just proportion of saidmlnHnd or purchased by plaintiff and those for whom he<RRHnsP§| in trust.”
    The answers to the amended lsHnsSrfortli, inter alia, that certain of the defendants had transferred their stock before the filing of the original billaverred a combination between plaintiff and the members of. .the syndicate to buy in certain of the property of the coauaration at the sale thereof, whereon they had realized agjflHpuid claimed, that the plaintiff should account for said proJTT'as assets for the payment of the company’s debts. The answers also denied the jurisdiction of the court, and averred that the amendment to the bill was unadvisedly allowed.
    It appeared that the defendant Hopkins was an original subscriber to the stock of the company. In 1868, the company declared a stock dividend, 17 shares being awarded to him. The certificate therefor was sent to him by the officers of the company, without his request, and after receiving it he did nothing with it. Very shortly afterwards, in 1868, while the company was solvent, he sold and transferred bona fide his original shares. The purchaser claimed the stock dividend certificate, but Hopkins refused to recognize the claim, and the certificate for the seventeen shares remained in Hopkins’s possession.
    It appeared that the stock standing in the name of the defendant Aultman on the books of the company was not owned by him absolutely, but had been transferred to him in fact as collateral security for a debt due him by the owner thereof. He surrendered the certificate to the company in November 1870 (after their insolvency) and. anew certificate was issued to the former owners.
    The master in his final report held, in substance, that those of the defendants who had assigned their stock before the filing of the bill were not liable to contribute, but that those who held stock when the bill was filed, were liable to contribute their pro rata share of the amount which the plaintiffs (the members of the syndicate) had actually paid for or on account of’the company’s indebtedness; bnt that the. latter must account, in the settlement, for the profit realized by them on the property of the company which they had purchased.
    Exceptions were filed to the master’s report, and, after argument, the court, in a learned opinion by White, J., held that under the constitution of Ohio, Art. xiii, § 3, and the statute passed in pursuance thereof, as well as under the rule established by the weight of American authorities, stockholders who had transferred their stock after the insolvency of the company, though before the filing of, the bill, were liable to contribute to the payment of the company’s debts. In other respects the court dismissed the exceptions, confirmed the master’s report, and entered a decree against all of the defendants (naming them) for contribution at the ascertained rate of $62 for each share.
    Fawcett and the other complainants appealed from the decree, assigning for error the decision of the court that they account for the profits realized by them on that portion of the assets of the corporation purchased by them.
    Aultman and other defendants appealed from the decree, assigning for error, inter alia, want of jurisdiction, the permitting of the amendment to the bill, and the decree for contribution by them respectively.
    ' Hopkins took a separate appeal, assigning for error the dismissal of his exception to the master’s report, to the effect that he not having been a subscriber to the 17 shares, which were awarded to him as a stock dividend, without request or action on his part, was not liable to contribution in respect thereto.

      Hill Burgwin (G. G. Burgwin with him), for Aultman and others, appellants.
    The amendment of the bill changed the cause of action from a creditor’s bill by Fawcett, claiming payment, to a stockholder’s bill by the members of the syndicate, claiming contribution from co-stockholders. This is never permissible : Chambers v. Waterman, 1 Leg. Gaz. Rep. 60, per Sharswood, J.; Wilhelm’s Appeal, 29 P. F. Smith 120 ; Brown v. Idley, 6 Paige 52; Rawlings v. Lambert, 1 Johns. & Hemming’s Rep. 466; Verplank v. Ins. Co., 1 Edw. Ch. 46. The amendment changed the parties by making a number of the defendants in the original bill complainants in the amended bill. It came too late, after replication and testimony taken before an examiner. It was allowed unadvisedly, without affidavit, and without costs, and the testimony taken under the original issue was treated as taken under the amended issue: Story’s Eq. Pl. 891, 887; Equity Rule 10, § 50 ; Jones v. Wadsworth, 4 W. N. C. 514; Rodgers v. Rodgers, 1 Paige Ch. 424; Abingdon v. Butler, 1 Ves. Jr. 206 ; Bosanquet v. Marsham, 4 Sim. 573.
    The appellants who.transferred their stock absolutely before the suit was commenced, to parties who were accepted by tire company (whether such transfer was for the purpose of escaping liability or not) are not liable to contribute. Bindley on Part. 1125-27 and passim, citing English authorties. Most of the English cases are under the “Winding-up Acts,” but while these Acts provide an easy mode of winding up insolvent corporations, they do not alter the legal or equitable relations of the parties. Mr. Thompson, on the Liability of Stockholders, states the American rule to be otherwise, but the cases he relies on do not bear him out. There are but two limitations : where the stockholder deceived the company into accepting a transferee; and when the transferor retains secretly some interest. The American cases cited on the other side were by creditors seeking payment of debts, who may undoubtedly hold the outgoing stockholder liable; but this principle does not apply as between stockholders seeking contribution and former stockholders who have transferred absolutely. In Pennsylvania, the line of decision is that the relation of stockholders to creditors is secondary, not primary; it is in the nature of suretyship, and the usual results of that relation follow, viz.: proceedings against the corporation are an indispensable prerequisite, and if the creditor gives time to the principal debtor the surety is discharged: Boschert v. Brown, 22 P. F. Smith 372; Wright v. McCormack, 17 Ohio St. 86; Patterson v. Wyomissing Co., 4 Wright 117; Means’s Appeal, 4 Norris 75 ; Moyer v. Penna. Slate Co., 21 P. F. Smith 293; Brinham v. Wellersburg Co., 11 Wright 43; Hoard v. Wilcox, 11 Wright 51; Bank v. Adams, 1 Pars. Eq. Gas. 534; Suydam v. N. W. Ins. Co., 1 P. F. Smith 394.
    There can be no grounds, in law or equity, why Aidtman should contribute, as he did not own any stock, but merely held stock, assigned to him as collateral security for a debt due by the owner. He held merely as trustee. Even that was transferred in 1870. The test of liability to contribute is the right to share in the profits : Bindley on Part. 1081.
    The court had no jurisdiction. The courts of this state will not entertain a bill to compel the stockholders of an insolvent foreign corporation, residing here, to pay up their unpaid subscriptions to meet the debts of the company : Bank v. Adams, 1 Pars. Eq. Cases 534. Especially will they not exercise such jurisdiction to enforce a liability imposed by a statute of the foreign state in excess of the amount of the stockholder’s actual subscription — a liability in derogation of the common law and the law of this state. This has-been decided in New Hampshire, in a recent case arising under this same Ohio statute : Rice v. Merrimack Co., 56 N. H. 114. Foreign corporations may'sue here only by comity — a comity which is never extended where the end sought is repugnant to our state interests or policy. The courts of one state will not act as administrator of an insolvent corporation of another state, nor give effect to a foreign statute of this penal character. The creditor is required to pursue his remedy in the state where the statute was passed, which gave rise to the liability: Paul v. Virginia, 8 Wallace 168, 181; Erickson v. Nesmith, 4 Allen (Mass.) 233 ; Halsey v. McLean, 12 Allen 438 ; Erickson v. Nesmith, 46 N. H. 371. An additional reason in this case is that the Ohio charter was obtained for this corporation, which transacted' its business in Pennsylvania, for the express purpose of avoiding Pennsylvania taxation. The proof of this fact was uncontradicted.

      Hill Burgwin and Thomas C. Lazear, for the appellant, Hopkins.
    The decree against this appellant was clearly erroneous, as he never subscribed to the shares of stock, on which he was assessed. The double liability of stockholders under the Ohio statute being in derogation of the common law, the statute must be strictly construed, and be confined to subscribers.

      D. T. Watson, (Knox and Reed with him), for Fawcett et al., appellants in Fawcett’s Appeal and appellees in the other appeals.
    We contend that the court erred in holding these appellants liable to account for the profits made out of the syndicate’s purchase of a portion of the assets of E. Ball & Go., on the ground that such purchase was upon a constructive trust for 1 heir co-stockholders. Even a purchase by a trustee at his own sale is not absolutely void; it may be voidable if impeached within a reasonable time : Ashhurst’s Appeal, 10 P. F. Smith 314; Twin-Lick Oil Co. v. Marbury, 1 Otto 587. Here the sale -was a public sale, made iu 1870, under the order of the trustees of the creditors, after full notice, and . without taint of fraud. The evidence shows that we asked the other appellants to join with ns in the purchase and they refused; that again in 1876, we invited them to come in on the same basis with ourselves, and they replied, through their counsel, “ that it is a little too late to try to induce others to put their necks in the halter; that they prefer to stand on their legal rights.” No claim was ever formally made against us on this ground, but the credit for such profits was allowed of the gratuitous motion of the court. If we had made a loss instead of a profit, the other appellants would not have been liable with us — why then, after we alone risked $40,000, should they participate in our profits ?
    The original bill, as shown by its prayer, was filed in the double aspect of a creditor’s bill to compel payment and a stockholder's bill to enforce contribution. The court suggested the amendment. We did not think it necessary, but as it would do no harm we complied with the suggestion. The cause of action was not changed; no additional burden was put on the appellants; no new parties were brought in. The transfer of the names of the members of the syndicate from defendants to plaintiffs was purely technical. Fawcett was originally made sole plaintiff, because the legal title was vested in him, and his cestuis que trustent who were originally made defendants, were by the amendment 'not improperly named as co-plaintiffs with him: Wilhelm’s Appeal, 29 P. F. Smith, 120; Danzeisen’s Appeal, 23 P. F. Smith 65; Darlington’s Appeal, 5 Norris 513; Edmund's Appeal, 18 P. F. Smith 24; 1 Daniel’s Ch. Practice pp. 383 and 418; Story’s Eq. Pleadings § 891. The suit affecting only the trust property, and not the relations between the trustee and the cestuis que trustent, tin? latter were not necessary parties at all: Carey v. Brown, 2 Otto 172; Kerrison v. Stewart, 3 Otto 155; Horsley v. Fawcett, 11 Beavan 565.
    Fawcett, being accommodation indorser on the notes representing the indebtedness of the company, was a surety; he and his co-members of the syndicate were legally liable to pay every dollar of it, and when they purchased such indebtedness of the company, they became entitled to be subrogated to the rights of the creditors and to recover against their co-stockholders not on the basis of what they actually paid, as contended for on the other side, but on the amount of the original debts: Croft v. Moore, 9 Watts 451; Hess’s Estate, 19 P. F. Smith 272; Cheeseborough v. Millard, 1 John. Ch. 409; Scribner v. Hickok, 4 Johns. Ch. 530 ; Liddendale’s Ex’rs v. Robinson, 12 Wheat. 594; Cuyler v. Ensworth, 6 Paige, 32. The extension of time for payment given by the creditors to the principal debtor did not release the stockholders, because the liability in such case is not secondary: Brown v. Hitchcock, 36 Ohio St. Rep. 667. This case also settles the principle that stockholders cannot escape liability by transferring their' stock after insolvency.
    As to the jurisdiction. The liability under the Ohio statute is purely contractual, not penal: Brown v. Hitchcock, supra; Merrimac Mining Co. v. Levy, 4 P. F. Smith 227; Price v. Gates, Pitts. Leg. Jour., April 9th 1870; Hawthorne v. Calef, 2 Wallace 10 ; Flash v. Conn, 26 Amer. Rep. 721; Thompson on Liability of Stockholders, § 82 ; Ochiltree v. Railroad Co., 21 Wallace 249; Norris v. Wrenschall, 34 Maryl. 492; Hager v. Cleveland, 36 Maryl. 476 ; Moss v. Oakley, 2 Hill 268; Corning v. McCullough, 1 N. Y. 47; Story v. Furman, 25 N. Y. 222 ; Derrickson v. Smith, 3 Dutcher 169; Wehrman v. Reakirt, 1 Cin. Sup. Ct., 231; Halsey v. McLean, 12 Allen 440 ; Derickson v. Smith, 3 Dutcher 166; Sachet’s Harbor Bank v. Blake, 3 Rich. Eq. 225; McDonough v. Phelps, 15 Howard Prac. 372; Paine v. Stewart, 33 Conn., 517; Ex parte Van Riper, 20 Wend. 616 ; Cameron v. Seaman, 69 N. Y. 396 ; Williams v. Hanna, 40 Ind. 535; Bank v. Price, 33 Maryl. 487. The decision of Judge King in Bank v. Adams, was upon the ground, inter alia, that the Virginia corporation was not in court. Being contractual, why will not the courts of this state enforce it ?
    January 2d 1882.
   Chief Justice Sharswood

delivered the opinion of the court

These are appeals from the same decree, and may’ be considered and disposed of together, as the principal questions raised are the same in all. The facts, which are not in dispute, are very succinctly and clearly, stated in the opinion of the learned court and need not be repeated here. We have had the advantage of very able and elaborate arguments by the counsel, both in the printed paper book and orally at the bar.

The first question is as to the jurisdiction of a court of this state to enforce the obligation enforced upon the defendants - as stockholders of the corporation of E. Ball & Co., by the constitution and laws of the state of Ohio. The constitution, Art. xiii, § 3, provides, “Dues from corporations shall be secured by such individual liability of the stockholders and by other means as may be prescribed by law; but in all cases each stockholder shall be liable over and ■ above the stock by him or her owned and any amount unpaid thereon, toa further sum at least equal in amount to such stock.” And the statute under which the corporation of E. Ball & Co. was organized provides, in conformity to the constitution, “ that all stockholders of any .... joint stock company organized under the provisions of this act shall be deemed and held to an amount equal to their stock subscribed in addition to said stock for the purpose of securing the creditors of said company.” It has been earnestly contended that the individual liability thus imposed on the stockholders is a penalty, and that the courts of one state will not enforce the penal laws of another. This is undoubtedly so; but was this liability thus provided for in any sense a penalty ? The defendants beqarne owners of their stock either by original subscription or by assignment from subscribers, and assumed voluntarily all the obligations imposed upon them as owners. It was a contract, express or implied, to pay not only for the stock owned or subscribed, but so much in addition as would be necessary for the purpose of securing the creditors of the company. This contract could be enforced in any state in which the defendants were amenable to the process of the courts. Upon the construction of this statute we are bound to respect if not to follow implicitly the decisions of the courts of Ohio. It has been held expressly by this court in Merrimac Mining Co. v. Levy, 4 P. F. Smith 227, that in a suit arising under a charter of another state, the decisions in that state are the best evidence of the rights and duties of the stockholders under it. In what appears to be the last decision of the supreme court of Ohio, Brown v. Hitchcock, 36 Ohio St. Rep. 667, throughout the opinion delivered by White, J., the obligation in question under this same statute is treated as a part of the contract of the owner or subscriber to the stock, and the opinion is sustained by Hawthorne v. Calef, 2 Wall. S. C. 10, in which it was held by the supreme court of the United States that a state statute repealing a former statute which made_the stock of stockholders in a chartered company liable for the corporation debts is, as respects creditors existing at the time of the repeal, a law impairing the obligation of contracts and therefore void. We have no difficulty, then, in holding that the courts of this state have jurisdiction to enforce this contract.

Assuming this, there can be no doubt that the case presented on the bill below was proper for the cognizance of a court of equity. It is not like t-he4case of Bank of Virginia v. Adam, 1 Parsons Eq. 534, the correctness of the ruling in which it is not necessary to discuss. It was there held that a court of equity can exercise no jurisdiction to compel the stockholders of a foreign corporation residing here to ]iay the stock subscribed to such company on the application of a creditor. That was a bill by the Bank of Virginia, a creditor of the Rappahannock Mining Company, on behalf of itself and such other creditors as should come in and contribute to the expense of the suit, against thirty-four stockholders. It was not alleged that the Rappahannock Mining Company was insolvent, nor was it made a party. The prerequisite of such a proceeding was the refusal or neglect of the corporation to enforce the subscription. “ If stockholders in one state,” says Judge King, “could be so proceeded against, so might they lie in every state of the Union of wliose^ jurisprudence English equity formed a part. Such proceedings might even be simultaneous and certainly could not fail to present strange conflicts of decision.” The record before us presents an entirely different case. The plaintiff is alleged to be the holder of all the indebtedness of the corporation E. Ball & Go., that corporation is a party, and the bill has been taken against it pro confesso — it is utterly insolvent, and all its assets, real and persona], are exhausted — and the defendants are all the stockholders ; they reside within the jurisdiction; were served with process, some appearing and taking defense, and the bill taken pro confesso against such as did not plead, answer or demur under a rule upon them for that purpose which was duly served. It is evident that the court had full grasp of the whole case. They could make no decree which they were not fully competent to enforce. They were not required to settle up the business of a foreign insolvent corporation. It was all settled up — the creditors paid, as far as its assets would go, by the sale of all its real and personal property. We are not called upon to say how it would be if the case were not so. The reasons against a court of equity assuming jurisdiction over the affairs of a foreign corporation are certainly very cogent, and will have to be maturely considered if such question should hereafter arise. We do not now say that the court ought not in the exercise of a sound discretion to decline to interpose at the suit of some of the creditors against some of the stockholders of such a corporation.

The next question is as to the amendment of the bill allowed, or rather advised, by the court and made by the plaintiff. It is most strenuously contended that it was an entire change of the cause of action, and therefore ought not to have been allowed. We are of a different opinion. There was no change in the cause of action, though the ground upon which the plaintiff’s equity was rested was formally changed. The original bill was by him claiming as a creditor. By the amended bill he claimed as a stockholder having paid more than his share of the debts and seeking contribution from the other stockholders. In either case the decree would have been the same. As a creditor, as is now conce'ded, he could not have recovered more than he had actually paid. A surety or accommodation jndorser, which the plaintiff originally was, who compromises with the creditor, cannot recover of his principal more than he is actually out of pocket. It appeared by the bill as originally filed that the jdaintiff, with the assistance of others, did purchase and have assigned to him all the outstanding indebtedness of the corporation. The allegation, however, of any trust in the plaintiff was wholly unnecessary. Where there is a legal plaintiff, either at law or in equity, it is not essential that his cestui que trusteed. — if he is a trustee — should be named in the action or proceeding. They are in no sense parties, except to enforce against them a liability for costs. If the plaintiff recovers, the court cannot settle the equities between him and his cestnis que trustent. That must be the subject of another proceeding between him and them. The order directing the use plaintiffs to be placed on the record was unnecessary. But it did the defendants no harm. Indeed, it gave them an additional security, as it disclosed the names of parties liable for the costs if the plaintiff’s bill was dismissed or the costs were finally for any reason imposed upon him. The defendants might perhaps have required it to be done, but they certainly have no ground to complain of it.

It has also been urged that the obligation of the stockholders under the statute was collateral only — nota primary but secondary liability — in short, that they were guarantors or sureties, and therefore, the extensions granted by the creditors to the company released them. It is not necessary to inquire into the circumstances under which these extensions were granted. Such a liability under a similar statute is said, indeed, in Patterson v. Wyomissing Co., 4 Wirght 122, to be “analogous to a case of guarantee.” That is, as there explained by Mr. Justice Loweie, “ to be enforced if the regular px-ocess in the px-incipal contract proves fruitless or if the corporation becomes insolvent.” But the analogy can be pushed no further. Nullum simile quatuor pedibus eurrit. The dii’ectors are the representatives of the stockholders in all their dealings with creditors. When they asked and accepted an extension it was an act binding on the stockholders. It was their assent. Besides which,- when the extension expired, the debt, being unpaid, was revived, and was theix a debt newly contracted as far as the then existing stockholders were concerned — and for which their liability under the statute then accrued.- The ground upon which the surety is discharged by time given by the creditor on a binding contract without his assent, is that he is thex’eby deprived of his x-iglxt to pay the debt and bi'ing suit immediately against his principal. It is evident that such a remedy would have been entirely impracticable in a case like the present.

We come now to consider the cases of those of the appellants who- claim that an exception should be made in their favor for the reason that they had assigned their stock to others before these px'oceedings were commenced. We might hold it as the law of Pennsylvania that a stockholder holding by transfer ftoxn a subscriber xnay relieve himself from liability for unpaid installments to the coi’pox-ation by a transfer duly entered on the books and accepted by the corporation, but not an original subscribei*. His obligation is débitum in jprcesenti, sol/oendum m futuro: West Philadelphia Canal Co. v. Innis, 3 Whart. 198; Pittsburg & Connelsville R. R. Co. v. Clarke, 5 Casey 146. But, however this may be, we think it very clear that a stockholder, whether original or holding by transfer, cannot rid himself of his responsibility to creditors after the corporation lias become insolvent. We think that Mr. Thompson in his Treatise on the Liability of Stockholders has correctly summoned up the doctrine of the American cases; “ A transfer of shares in a failing corporation, made by the transferor with the purpose of escaping his liability as a shareholder, to a person who from any cause is incapable of responding in respect of such liability, is void as to creditors of the company and as to other shareholders, although as between the transferor and the transferee the transfer may be out and out.” Section 215. See the cases cited by him, to which may be added our own case of Everhart v. West Chester and Philadelphia Railroad Company, 4 Casey 339. The case before referred to in the Supreme Court of Ohio — Brown v. Hitchcock (supra) — goes much further, holding that the liability of the stockholders under the statute attaches at the time the debt is contracted or the liability incurred by the corporation, and that, after such liability attaches to a stockholder, it is not discharged by the subsequent assignment or transfer of liis stock. It is upon the faith of the existing liability of the stockholders that the creditors must be presumed to trust the corporation and to allow them to get rid of their liability by a transfer of their stock would be to render the remedy of the creditor illusory. In the event of the corporation getting into financial difficulty, threatening insolvency, all the stockholders -would hasten to transfer their stock to irresponsible parties, and the creditors would be practically set at bay. W e think, then, as to Bid well, Stewart, McKee and McKee’s executors the decree was right.

In reference to Aultunln’s Appeal, it is now too well settled to be any longer a question, that when stock is transferred to a man as collateral and stands in his name, he incurs liability as a stockholder, just as if he was the actual benelicial owner: National Bank v. Case, 9 Otto 628. Most especially is this just and right as to creditors who trust to his name and have no notice of the secret trust upon which the stock is held.

The special exception of J ames H. Hopkins rests on a verbal criticism which cannot avail him. He was awarded a stock dividend which he knew in December 1868. He refused to surrender it to another party who claimed it and he still holds it. He contends that the liability under the Ohio statute is con lined to stock subscribed, and as his stock was not subscribed, ho is not responsible. Tho language of the constitution of Ohio, as we have seen, is stock. owned,” and it is plain that the statute is subordinate to the constitution, and must be construed in conformity with it.

It remains to consider Fawcett’s Appeal. He urges that the court below was in error in holding that as representing the Pittsburgh syndicate, he was bound to account for the profits of the purchase of the personalty made in the names of Breed and Frew, at the sale of the assets of E. Ball & Co. It is not a matter in dispute that the sale of these assets by the authority of the directors was proper and even necessary — that the nature of these assets, being principally small debts scattered over all the states of the Union, was such that they could not practically have been realized in any other way — that the sale was fair and open — that it was largely advertised — special notice sent to every stockholder — and full oppportunity given to every one to bid. If there is any case in which such a sale can be upheld as against cestuis que trusteüt, it would seem to be this case. Aslihurst’s Appeal, 10 P. F. Smith 290, is strongly relied on by the counsel for the appellant. That case, however, was decided on its peculiar circumstances — principally the laches and long-continued acquiescence of the cestuis que trustewk There the sale was in 1857 and the bill to impeach it not filed until .1865. It was held that if a trustee to sell becomes the purchaser, the purchase is.generally voidable, but the cestiii quo trust .must move in a reasonable time. Here the sale was March 31st 1874, and this bill filed March loth 1875. Non constat that the appellants knew before, that the purchase by Breed and Frew was for the Pittsburgh syndicate. But the principle that a purchase by a trustee at his own sale may, at the election of the cestui que trust, be treated as made for his benefit, is too important to be frittered away by nice distinctions. It is not in dispute that this purchase was made by the Pittsburgh syndicate. It was composed of a number of the stockholders who had associated and advanced money to settle the debts of E. Ball & Co., looking to the liability of all the stockholders for their reimbursement. The other stockholders may not have had the ability to contribute their proportion to make up the large sum of money necessary for this purpose. It ought not, therefore, to prejudice them that they had been repeatedly asked, and oven before the master, to join this syndicate, and had declined. All the authorities show that it is not a question of the honesty and fairness of the transaction, but it is put solely on the ground of policy : Webb v. Dietrich, 7 W. & S. 401; Chronister v. Bushey, Ibid. 152 ; Chorpenning’s Appeal, 8 Casey 315. Even in the case of a purchase at a public judicial sale, the same principle applies where the trustee has had any hand in bringing about the sale : Parsball’s Appeal, 15 P. F. Smith 224. The members of the Pittsburgh syndicate were joint owners with the other stockholders of the property of P. Ball & Co. They stood in such a relation to them as to forbid their taking any advantage of their position and ability to purchase : Gibson v. Winslow, 10 Wright 380. It is strongly urged on behalf of the appellant that if it had turned, out that the sale was for more than could be realized from the assets — that the purchase eventuated in a loss instead of a profit to the buyers — they could have liad no claim to call upon the stockholders to make it good. It is undoubtedly so; but this is the case in all such transactions. The trustee must bear the loss if any, though the cestui que trust is entitled to the profit.

It is believed that we have thus considered and disposed of all the points of any importance in these appeals.

Decree affirmed, and appeal dismissed at the costs of the appellants.


author: Mr. Justice Trunkey

text:
    Huckenstein and McKee versus Love.
    1. Where a scire facias issued upon a mortgage is made known and subsequently pleas are entered and issue joined, and afterwards the mortgaged premises are conveyed to a third person, it is error for the court on motion of the plaintiff to amend the record by adding the name of such third person as a party defendant.
    2. Where such third person is so made a party defendant, judgment cannot be entered against him upon two returns of nihil habet.
    3. A. executed a bond and mortgage to B., who subsequently assigned the same to C. A suit was instituted by B. to C.’s use against A. upon the mortgage, wherein issue was joined. Afterwards the mortgaged premises were sold under a junior incumbrance and purchased by D., who was thereupon made a party defendant to the suit on the mortgage. On the trial defendants set up usury in the mortgage and offered to prove that B., the mortgagee, had no interest in the transaction, the money being in reality advanced by O. at a heavy discount. Plaintiff objected to the admission of this evidence on the ground that D. was the real defendant and could not set up the defence of usury to the mortgage subject to which lie bought. The court sustained the objection and overruled the offer. Held, that this was error. A. was also a party defendant, and directly interested in the result. It was necessary that he should set up and establish the defence of usury in the suit on the mortgage in order to enable him to set up a like defence in any suit that might subsequently be brought against him upon the accompanying bond. The evidence should, therefore, have been admitted.
    4. In the above case, defendants also offered to prove that D. had purchased the property at the sheriff’s sale for and on behalf of A. and with A.’s money. This offer, being objected to, was also excluded. Held, that this also was error in view of the previous ruling in the case. Had the evidence been admitted all ground for objection to the prior offer of evidence by the defendants would have been removed.
    October 10th 1881. Before Sharswood, O. J., Merour, Gordon, Paxson, Trunkey, Sterrett and Green, JJ.
    Error to the Court of Common Pleas. No. 2, of Allegheny county: Of October and November Term 1881, No. 87.
    Scire facias sur mortgage, issued November 30th 1877, by C. IT. Love, for use of W. C. Comingo, against John Huckenstein, on a mortgage executed by defendant to the legal plaintiff for $8,000. The defendant filed an affidavit of defence setting up usury, and subsequently pleaded usury, and payment with leave; and the cause was put at issue December 13th 1877. On January 10th 1880, the plaintiff presented a petition setting forth that in March 1879, the mortgaged premises, or a portion thereof, were sold at sheriff’s sale to one Thomas McKee, to whom a deed was delivered June 18th 1879, and praying to amend by making said McKee a party defendant. The court granted the prayer of the petition, and directed process to issue to bring in McKee, whereupon a scire facias issued to him which was returned nihil; an alias sci. fa. was also returned nihil; whereupon judgment was entered against McKee in default, sec. reg., for $4,563.87. The plaintiff’s attorney, by leave of the court, directed this judgment to be stricken off, but afterwards obtained an interlocutory unliquidated judgment against him in default, sec. reg., “without prejudice to the rights of plaintiff to have final judgment against said Thomas McKee and his co-defendant, J ohn Huckenstein.”
    When the case was called for trial, January 15th 1881, McKee, who had been subpoenaed as a witness for the plaintiff, learned for the first time that he had been made a party defendant, whereupon he moved the court to strike off his name as a co-defendant, on the ground that his alleged title did not accrue until after suit brought, and that judgment had been taken against him by default on two returns of nihil, without service or notice to him. The court thereupon made the following order:
    “ And now, January 17th 1881, the above motion is refused, but if Mr. McKee desires to defend in this action, he being now in court and his counsel also present, if he will make a motion to open or set aside the judgment against him, so as to let him into a defence, such motion will be sustained and he will be allowed to defend. His counsel declining to make such motion, it is ordered that the jury be sworn against John Huckenstein, with notice to' Thomas McKee, terre-tenant, and to assess as against him the balance due on the mortgage.”
    The plaintiff offered to show devolution, of title to McKee. Objected to, on the ground that McKee’s alleged title accrued after suit brought, and because it covers only a portion of the mortgaged promises. Objection overruled; exception.
    The defendants, under their plea of usury, offered to prove that Love, the mortgagee, had no interest in the mortgage, and that the money was advanced directly by Mrs. Comingo, at a heavy discount. Objected to, on the ground that McKee is the real defendant, and cannot set up the defence of usury to the mortgage, to which he bought subject. Objection sustained; exception.
    The defendants then offered to show, that McKee acted for Huckenstein in purchasing at the said sheriff’s sale a portion of the mortgaged premises, that Huckenstein paid the amount of the bid, and that McKee claimed no beneficial interest ortitle in the premises. Objected to, objection sustained; exception. (Fifth assignment of error.)
    The jury, in pursuance of the direction of the court, found a verdict for the plaintiff for $4,697.98 “ and find the balance due on the mortgage against Thomas McKee in the same amount.” Judgment on the verdict. The defendants took this writ of error, assigning for error the action of the court in making McKee'a party defendant and in refusing to strike off the judgment entered against him on two returns of nihil; and the rulings on evidence as above set forth.

      John Barton, and Thomas O. lazear, for the plaintiffs in error.

      J. M. Stoner, for the defendant in error.
    October 3d 1881.
   Mr. Justice Trunkey

delivered the opinion of the court

When this action was commenced and until more than a year after the issue was formed by the pleadings, McKee was a stranger to the title of the mortgaged premises. Therefore, his name was not omitted by mistake — it would have been a mistake to have included it. He purchased the premises at sheriff’s sale pending the suit, and if he acquired the title he took subject to the mortgage and all the consequences of a judgment in the action. The plaintiff had no interest in making McKee a party defendant, for this was unnecessary to a trial on the merits. It could not forestall Iiuckenstein’s defence. Nor would it prevent the plaintiff giving in evidence the fact of the sheriff’s sale to repel a defence which such sale would repel, to omit making the purchaser a party to the record. The amendment was not within the letter or spirit of the statute. And, had McKee’s name been properly added, there was no service to authorize judgment against him in default of appearance. By a curious growth in the law of practice, two returns of nihil upon writs of scire facias, whether the mortgagor be living or dead, authorizes judgment in default, but this has not been extended so as to embrace persons who are not parties to the mortgage. Although but little injury may have been done to McKee" he was put to some trouble to ascertain if the vexatious and irregular judgment would injure him. He had right to demand that it be stricken off, for it was erroneously entered. It differed from a regular judgment, which, being without error in the proceeding, will not be struck off, bpt may, in the discretion of the court, be opened.

At the trial Huckenstein proposed to prove that Love, the assignor of the mortgage, was merely the broker, and that Mrs. Comingo, the assignee, was the real lender of the money. This offer was overruled for the reason that Huckenstein’s title to the premises had been vested in McKee, and the testimony was irrelevant and incompetent. Then the defendant proposed to prove that at the sheriff’s sale McKee was acting for and purchased for Huckenstein; that he paid the bid to the sheriff with Huckenstein’s money; that he agreed that no title should pass to him and he claimed none; and that he had acted in the matter to assist Huckenstein, who was physically unable to attend to it himself. This also wras rejected. If true, McKee had only a naked legal title and could have been compelled to convey to Huckenstein, had he refused to convey on demand. He w;as a trustee without interest, and with no duty, except to convey the legal title to the actual owner of the land.

Huckenstein had filed an affidavit of defence setting out the alleged usury and facts entitling him to defalk it. He pleaded usury, and payment with leave to prove the facts stated in the affidavit. The issue related to the usury in the plaintiff’s claim, and the burden of proof was upon the defendant. The offers of testimony aforesaid, especially the first, were pertinent to the issue, and the refusal of the first for the reason given, made the second material. Unless the defendant adduced proof tending to establish that Mrs. Comingo loaned the money to Huckenstein, his defence would fail. His affidavit averred this fact. The offer to prove it could only be understood with reference to the parties and the issue. The plaintiff’s counsel understood it, and, with his objections, proposed to stipulate that the judgment in this case should not bar the defence of usury in a suit on tlie bond. It would have been useless for the defendant to have formally offered proof of the usury after the groundwork for its reception had been rejected. The fourth and fifth assignments must be sustained.

In view only of the prior rulings in the case, can it be said that the offer set out in the fifth assignment was admissible. In truth, Huckenstein was the defendant in the issue and was interested in the result, even if the title had passed to McKee. The doctrine in Miners’ Trust Co. B. v. Rosebury, 31 P. F. Smith 309, does not apply to an action against the mortgagor. How could he defend for usury in a suit on the bond after an adjudication that its whole amount was due upon the mortgage?

Judgment against Thomas McKee reversed, and judgment against defendant Huckenstein, reversed, and venire facias de novo awarded.