text:
    Braman’s Appeal. Ryan’s Estate.
    1. In a proceeding for distribution in the Orphans’ Court, no one can claim hut through the decedent as creditor, legatee or next of kin. McBride’s Appeal, 22 P. J?. Smith 480, followed.
    2. Where in the distribution of an estate in the Orphans’ Court, one who is neither creditor, legatee nor next of kin of the decedent, makes a claim, on the ground that the executor fraudulently received money for the estate, he cannot waive the tort of the executor, and sue the estate for money had and received, however he might have done so as against the executor accountant.

      February 6th 1879.
    Before Sharswood, C. J., Merour, Gordon, Paxson, Woodward, Trunkey and Sterrett, JJ.
    Appeal from the Orphans’ Court of Philadelphia county: Of January Term 1879, No. 54.
    Appeal of George G. Braman from the decree of the court dismissing. his exceptions and confirming the adjudication in the account of Samuel White, executor and trustee of the will of Letitia G. Ryan, deceased.
    The auditing judge, Hanna, P. J., found the facts substantially as follows: “ The decedent died in March 1872, having first made her last will and testament, whereby, inter alia, she devised to her brother (the accountant) the store and premises situate on Fourth street, between Market and Chestnut streets, and the house and premises No. 1813 Vine street, in trust, ‘ that he will suffer and permit my beloved husband to occupy or to rent either or both of said pieces of real estate, -and to receive, take, hold and enjoy the net rents, issues, profits and income thereof to his own use absolutely * * * for and during all the term of his natural life. * * * And after the decease of my said husband, one-third of the aforesaid net rents to be paid to Caroline B. Dodge, one-third to be paid to Sarah Virginia Blake, and the remaining third to be paid to Edward W. Ryan, for the term of their natural lives respectively, and from and after their decease- to vest absolutely in their heirs for ever.’
    “William Ryan, husband of textatrix, died in April 1873.
    “ It appears from the account filed that the trustee charges himself, inter alia, with the rents received from the store property mentioned in the will of testatrix, and also with the proceeds of the sale of the same premises, after deducting the amount of a mortgage existing upon the property.”
    This sum was claimed by the appellant, Braman.
    William Ryan, the .husband of deceased, was engaged in business with one Walters, trading as William Ryan & Co. In 1860, when largely indebted, and as it subsequently appeared, insolvent, he conveyed this store to the accountant, who re-conveyed it to his sister, the decedent. These conveyances were subject to a mortgage.Subsequently, judgments were obtained against William Ryan and William Ryan & Co., among which was one confessed to White, as trustee for the decedent. In 1861, Braman obtained a judgment against Ryan for $4300, which was revived in 1867, when the store was levied upon and sold at sheriff’s sale to Braman. In 1871, Braman brought ejectment against Ryan and his wife therefor. Mrs. Ryan died in 1872, and Ryan in 1873, and in 1874, on a trial of the ejectment suit the verdict was for defendants, upon which judgment was entered-June 8th 1874. In 1874, the counsel for the accountant stated to the holder of the mortgage that default would be made in the payment of the interest thereon, and that he wanted to have the mortgage sued out to make title. A writ issued April 4th 1874, and service was accepted by a member of the bar who was not then practising. The defendant in the writ had been dead several years. On April 22d 1874, judgment was entered for want of an appearance. A levari facias issued the same day, and before the property was sold the accountant, through one Powell, paid the amount of the judgment, interest and costs, and the judgment was marked to his use. The sale however proceeded, and the premises were sold by the sheriff to White, the accountant, who received a deed therefor on May 16th 1874, thirteen days before the- verdict in the ejectment.
    After the payment of the mortgage debt, interest and costs, the balance -was paid by the sheriff into court, viz.: $1017.75.
    An auditor was appointed to distribute the same, who reported that the balance, after the payment of costs, &c., should be awarded to the executor of Mrs. Letitia G. Ryan, deceased.
    The report was confirmed by the court, and the fund in court distributed in accordance therewith.
    The present claimant, George G. Braman, did not appear before the auditor, either in person or by attorney, to present any claim upon the fund for distribution.
    The auditing judge was of the opinion “that while there appeared to be an irregularity in obtaining the judgment upon the mortgage, yet there was no actual fraud upon the rights of the claimant, and the judgment was entered regularly, that is, in accordance with the practice of the court, and it was incumbent upon the claimant to protect his interests and prevent their sacrifice.
    “It was also the duty of the claimant to appear at the distribution of the proceeds of the sheriff’s sale; but that right he waived and duly omitted, although notified according to law and the rules of the court.
    “ The balance of the proceeds of the sale having been awarded to the trustee, the claimant now had neither right thereto nor interest therein. And the proper forum in -which to contest the right of the trustee to receive the same was in the court then having-jurisdiction.
    “The Orphans’ Court now being bound to respect the judgment of the late District Court, had no jurisdiction of the claim presented' by said claimant, George G. Braman, and the same was therefore disallowed.”
    Braman filed exceptions, which were dismissed, and the adjudication confirmed; the court, Penrose, J., in an opinion, saying:
    “ It was incumbent upon the exceptant, George G. Braman, after he had become the purchaser at the sheriff's sale in 1870, to see that the interest on the mortgage, subject to which he had bought, was regularly paid thereafter. He knew, and was bound to guard against the consequences of default, and, so far as he was concerned, there was no duty in this respect on the part of Mrs. Ryan, whose title, under the deed to her of March 1860, he asserted to be fraudulent and void.
    “ That she did in point of fact pay during her lifetime, and that the accountant, her executor and trustee, continued to do so for some two years longer, can give the exceptant no right to complain that payment afterwards ceased, or that notice was given by the accountant to the mortgagee that it would no longer be made, or even that he requested that suit should be brought, and aided in having the judgment obtained. Irrespective of the Bankrupt Law, it has never been questioned in Pennsylvania that judgment might be confessed for an honest debt, even for the very purpose of preferring one creditor to the exclusion of all others.
    “ The exceptant was at best simply a terre-tenant. The mortgagee was not bound to make him a party, or give him notice of the suit on the mortgage ; and, had he done so, his only defence could have been that the debt was paid, or that it was not fully due. But this is not even now pretended. Nor is it pretended that from the day of his purchase to the present time the exceptant has ever paid, or offered to pay, one cent, principal or interest, on the mortgage. How then has he been hurt by the acceptance of service in the name of the mortgagor ? If this were unauthorized, the mortgagor- or his heirs alone could complain.
    “ Let it be conceded, however, that the exceptant might have availed himself of this objection. The fraud, if such it be, against him would not extend beyond the judgment, which was voidable merely on this ground — not absolutely void: Pearsoll v. Chapin, 8 Wright 9. The exceptant might either have applied to the court to open the judgment and let him into a defence, or he might have appeared in the proceedings for distribution and claimed the fund as owner of the property sold. But he did neither. It is not alleged that he had not actual notice, both of the sale and of the subsequent proceedings. He certainly had legal notice. The relations between himself and Mrs. Ryan’s estate were entirely hostile, both claiming to be the owner of the property sold; and the verdict in the ejectment was in her favor. It was certainly his duty, under these circumstances, to have made his claim at the proper time and place, and to have established it by due proof. Having suffered a decree to be made in favor of his adversary, he is bound by it. This principle was applied in the case of Commonwealth v. Trout, 26 P. F. Smith 884, where the Supreme Court, Williams, J., says: ‘ If then the plaintiff’s evidence would have shown that the defendant was guilty of fraud in making the sale, it would not have avoided the conclusiveness of the decree confirming the sale and distributing the proceeds.’ * * * ‘And what right have the plaintiffs to complain that the decrees áre held to be conclusive upon them ? They had due legal notice of the proceedings, and if they had any objection to the confirmation of the sale, on the ground of the alleged fraud, it was their duty to appear and make it known, and they would have been heard. They do not allege that they had no notice of the sale, or of the proceedings for the distribution, or that they had discovered the alleged fraud since the confirmation of the sale and the distribution of the proceeds.’ * * * ‘ Why should not the decree of the court be conclusive upon them ?
    “But a fatal objection to the claim, so far as this court is concerned, is one which, in McBride’s Appeal, 22 P. F. Smith 484, is thus stated by Judge Williams : ‘ The fund for distribution, from whatever source derived, constitutes part of the decedent’s estate, and no one is entitled to claim any portion of it in this proceeding for its distribution who does not claim it through the decedent, and as part of her estate, either as creditor, legatee or next of kin. But the appellant does not claim it either as creditor, legatee, or next of kin, nor does he claim it as part of her estate; but he claims it as his own.’ * * * ‘It is clear he cannot raise any such issue in this proceeding for distribution.’ * * * ‘ If he denies that the money belongs to the estate, * * * and claims it as his own * * * he must resort to some other form of proceeding for his remedy.’
    “ In the case before us the claim denies the title of the decedent’s estate, and is founded on an alleged tort of the accountant, and that, too, in his individual capacity.
    “ All the proceedings with relation to the mortgage were long subsequent to Mrs. Ryan’s death, and the purchase by the accountant at the sheriff’s sale was in his own name. True, when he afterwards resold at an advance of price, he gave the estate the benefit of this, and charged himself with it in his account; but this was because he chose to recognise a fiduciary relation in which the ex-ceptant has no part, and which cannot affect his rights one way or the other. His claim is against the accountant individually, as trustee ex maleficio. An estate is not liable for the tort of an executor, nor can the tort be waived and the claim made for money had and received by the executor for the use of the exceptant. In such case the only judgment possible is de bonis propriis : Rose v. Bowler, 1 H. Black. 108; Jennings v: Newman, 4 Term R. 347; Powell v. Graham, 7 Taunt. 586.
    “ As to the exceptions filed by the accountant and by the cestui que trust, so far as they relate to matters of fact, we need only say that wrhat is stated by the auditing judge is rather for the purpose of argument than as distinct findings upon the evidence.
    In the view taken, it was immaterial whether the deed to Mrs. Ryan was or was not in fraud of creditors, or was or was not based upon a valuable consideration. For the same reason we need not now consider these exceptions or determine how far it was shown that the facts were not in accordance with the verdict and judgment in the action of the ejectment.

      “The fifth exception on the part of th&.cestui que trust is answered by Bacon’s Appeal, Earp’s Appeal, Ingersoll’s Appeal, &c.
    ■ “Exceptions dismissed and adjudication confirmed.’
    From this decree this appeal was taken..

      David O. Harrington and David W. Sellers, for. appellant.—
    A judgnient cannot be entered without due process of law, unless the defendant appear by attorney or in person. And a judgment entered without authority should be stricken off: Banning v. Taylor, 12 Harris 289 ; Warter v. Perry, Cro. Eliz. 199; Godfrey’s Case, 11 Coke 44; Randal’s Case, 2 Mod. 308;- Caldwell v. Walters, 6 Harris 79; Martin v. Gernandt, 7 Id. 124; Cochran v. Eldridge, 13 Wright 370; Gilbert v. Hoffman, 2 Watts 66; Foulk v. McFarláne, 1 W. &. S. 297; Jackson v. Summerville, 1 Harris 359 ; Ilecker v. Ilaak, 7 Norris 238. The judgment was tainted with fraud and the law cannot allow it to' be used to affect a right that is in a position to question it: Bunn v. Ahl, 5 Casey 387; Streeper v. Eckart, 2 Whart. 302;. Bredin v. Bredin, 3 Barr 81; Zerbe v. Miller, 4 Harris 488; Taylor’s Appeal, 9 Wright 71; Clark v. Douglass, 12 P. F. Smith 408; Kisterbock’s Appeal, 1 Id. 485. The court erred in deciding the auditor’s report conclusive: Woolston’s Appeal, 1 P. F. Smith 452. A sheriff’s sale and receipt of the purchase-money do not prevent a party from contesting the title acquired at the sale; Foulk v. McFarlane, 1 W. & S. 297; Pendleton v. Richey, 8 Casey 63; Martin v. Gernandt, supra.

    ' The payment of full consideration for property, if the purchase is made to hinder and defeat a creditor, is void even in the hands of a purchaser — for it is assisting a party to cheat another: Cadogan v. Kennet, Cowper 434; Johnston v. Harvey, 2 P. & W. 82; Dean v. Connelly, 6 Barr 239; Ashmead v. Hean, 1 Harris 584; Tarbox v. Hays, 6 Watts 398.
    The Orphans’ Court has jurisdiction under the Act of 1836, Purd. Dig. 1104, pi. 8: Yan Dyke’s Appeal, 10 P. F. Smith 487; Loomis’s Appeal, 10 Barr 387 ; Rowland’s Estate, 7 P. L. J. 312; Heath v. Page, 13 P. F. Smith 108; Dundas’s Appeal, 14 Id. 332; Kirkpatrick v. McDonald, 1 Jones 393. Braman could waive the tort and proceed for money had and received by the executor of Mrs. Ryan : Atkins v. Humphrey, 52 E. C. L. R. 653; United States v. Daniel, 6 Howard 13; Cravath v. Plympton, 13 Mass. 454; Wilbur v. Gilmore, 21 Pick. 250; Haldane v. Duche’s Executors, 2 Dallas 176.

      George Junlcin, for appellee.
    From the date of the sheriff’s sale Braman’s attitude to Mrs. Ryan and Mr. Ryan changed. He no longer, so far as the real- estate was concerned, was Ryan’s creditor. He owned the real estate, subject to the mortgage. No law required that he should have been notified of the judgment or sale. Instead of going through the fiction of two “nihils,” service of the writ was accepted. In what way was Braman injured by this ? The real estate was then sold by the law, and brought its full value. Had Braman paid the mortgage-debt and interest, it would not have been sold. The balance, over and above the mortgage, is paid into court. An auditor gives notice of his appointment. Mr. Braman, again, has notice, and fails to appear or make any claim. There is no allegation that he did not have actual notice both of the sale and of the audit. He certainly had legal notice. Why should he not have gone to the sheriff’s sale ? Why should he not have gone into court and claimed the fund ? He was bound so to do — or thereafter for ever to be barred.
    The value of his equity of redemption was there and he neglected or refused to claim it. The trustee did and the court gave judgment in his favor. This cannot be impeached collaterally. No one can make a claim on a decedent’s estate who does not claim it through the decedent and as ■ part of the estate, either as creditor, legatee or next of kin : McBride’s Appeal, 22 P. E. Smith 484.
   The judgment of the Supreme Court was entered March 10th 1879,

Per Curiam.

In a proceeding for distribution in the Orphans’ Court no one can claim but through the decedent as creditor, legatee or next of kin: McBride’s Appeal, 22 P. E. Smith 480. Legatee or next of kin the appellant did not pretend to be. Creditor he was not. The wrong of which he complains — conceding that it was a wrong — was the act of the accountant for which the estate was not liable. The accountant having received the money for the estate was bound to account for it and could claim no indemnity for his fraud in procuring it, if any such fraud was resorted to. It follows that the appellant could not waive the tort and sue the estate for money had and received — however he might have done so as against the accountant. Of course he could not claim damages as mesne profits accruing to him since the death of the decedent.

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


source: Caselaw Access Project

author: Mr. Justice Mercur,

license: Public Domain

text:
    Brice’s Appeal.
    The Act of April 21st 1855, declares that all new buildings in the city of Philadelphia, shall front upon a street, of not less than twenty feet in width and have an open space attached thereto, of at least twelve feet square. A back building of a house was raised, two of-its walls were changed from frame to brick and a number of alterations were made in the interior, so. as to fit the whole for four cheap tenement houses. Held, that these alterations constituted anew building within the meaning of the act. Held, further, that under the terms of the act, the court might restrain the continuance of the work, and order the removal or change of so much of the building as came within the prohibition of the law ; but its power did not extend to controlling the use or enjoyment of it; that upon the building being made to conform to the law, the right of the owner to let it to one or several tenants must remain unimpaired.
    February 6th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Woodward, Trunkey and Sterrett, JJ.
    Certiorari to the Court of Common .Pleas, No. 8, of Philadelphia county: Of July Term 1878, No. 81. .
    The proceedings in the court below commenced by petition of Robert N. Bowers, one of the' building inspectors of the city of Philadelphia, praying for an injunction against Conrad Bachle and William Brice. The petition set forth, that in November 1877, Bachle took out a permit from the Board of Building Inspectors for the erection of a three-story addition to the back building of a house on Beach street; that Brice is the owner, and Bachle is the builder making the alterations; that petitioner, upon an inspection of said alterations made under color of said permit, is satisfied that said brick building is converted into four separate tenement houses which will front on a seven-feet wide yard, without any open space attached to them in the rear or at the side, equal to at least twelve feet square, as required by the Act of April 21st 1855, Pamph. L. 265. The petition therefore prayed for an order on Brice and Bachle commanding them to close up such new doors and windows as have been opened or constructed in the rear building of said house, and to place the rear building in the same condition as it was before the issue of the permit, except as to the one three-story addition to said back building as covered by said permit, within five days, or show cause.
    The answers of both Brice and Bachle denied that any new building had been erected within the meaning of the act.
    The following facts were agreed upon :—
    1. The question is, whether or not an alteration of the back building of housq, 1084 Beach street, with a new entry-way therefrom through the main building in the front part of the house, is or is not within the provisions of the Act of Assembly, requiring every new dwelling-house to have an open space attached to it in the rear or at the side, equal to at least twelve feet square, because it is admitted that if said alteration is within the act and constitutes four new buildings, there is not such an open space attached to each, or in the rear or side thereof, inasmuch as the said back building fronts on a yard but seven feet wide, and has no other open space attached to it, or to said four dwelling-houses. The question as to the frontage on a seven-feet wide alley or passage-way is also submitted.
    2. Externally the alteration consists in the demolition of two frame walls of the rear room of said back building, leaving the two brick walls thereof standing, and the erection in place of the two demolished walls of two new brick ones, and in adding one new story in height to the whole rear building, which was formerly only two stories high, except the rear room, which was formerly only one story high, and which is now three stories high, and a cellar.
    3. Internally the alteration of said back building as constructed, is in making four instead of three rooms, by a partition in one of the four rooms.
    Formerly there were only two stairways in said back building, and the hall stairway. That now there are four stairways and the hall stairway, each of the said stairways extending to the third story. That formerly there were but two ranges in said back building, but now there are four, each of the ground rooms having one. That formerly there were but two outside doorways in said back building, but now there are four, each of the ground rooms having one outside doorway. That formerly all of the three rooms of the back building had communicating doors on the first floor, but that now one of those rooms has been divided by a studding partition, which has an opening for a doorway, with jams, &c., but said door is at present nailed up, and is not hung on hinges. It would require not more than fifteen minutes to tear off the strips by which the door is nailed up, and to swing it on hinges. The two rooms next to the main building communicate by open doors, but the door between the rear rooms on the ground floor is nailed up similarly to that in the new partition. That on the second floor none of the rooms are communicating. That on the third floor none of the rooms are communicating. That the only entrance and exit to and from the second and third floors is by the staircase leading from the rooms on the first floor directly below, except as to the first and third floor rooms next to the entry, where there are doorways to the entry.
    The court made a decree : “ That the defendant, William Brice, owner of the property described in the petition, open communication from room to room, on each of the three floors of the back building of said property or dwelling described in said petition, and keep open said communication; and that he shall not lease, use, or allow to be used, the subdivisions of said back building as separate dwellings or tenements, unless they, or either of them so leased or used shall be made to front upon a street, alley, or court of at least twenty feet in width, and have attached in the rear or side to each subdivision so leased or used, at least twelve feet square of open space.”
    From this decree Brice took this appeal.

      John Or. Johnston, for appellant.
    There is but one building fronting on Beach street, and it complies with all the requirements of the Act of 1855. The back building constitutes, with the main building, into which it opens by the hallway, and to which it is physically attached, but one entire structure. It is not necessary that the main back buildings should each have an open space in the rear or at the side, “equal to at least twelve feet square.” The back building, by reason of its being raisedi one story, is not a “new building” within the meaning of the act: Miller v. Oliver, 8 Watts 514; Landis’s Appeal, 10 Barr 379; Miller v. Hershey, 9 P. F. Smith 65. The court erred in treating the main building and the back building as two distinct buildings, and in requiring the open space in front of both. Because the back building as altered may be separately used by different parties, does not make it a new structure. Had the interior been altered to fit it for such separate occupancy without altering the exterior, would the whole structure have been liable to demolition under the Act of 1855? The use of the building was not intended to be restricted. Prior to the alterations, the various subdivisions had been leased as tenement houses.

      William P. Messiele, for appellee.
    The provisions of the law cannot be evaded by calling this tenement one building when the physical changes made showed that it was intended for use by separate families. The law was enacted to break up a custom of having tenement houses built on small alleys; of taking a building fronting on a street and connecting the side-yard into a court, and subdividing the back building into separate tenement-houses which, being thus deprived of light and air, were nests of disease : Shultz v. Doak, 4 Phila. R. 151.
   Mr. Justice Mercur,

delivered the opinion of the court May 5th 1879.

Section 6 of the Act of 21st April 1855, Pamph. L. 265, relating to the city of Philadelphia, declares “ that no new dwelling-house or other building within said city shall front upon any street, alley or court which shall be of less width than twenty feet, or without being made to recede so that such street, alley or court shall be of that width, the buildings on each side equally receding; * * * Every new dwelling-house shall also have an open space attached to it, in the rear or at the side, equal to at least twelve feet square.” By section 5 of the Act of 7th May 1855, Pamph. L. 464, it is made the duty of the building inspector to visit and inspect each building that is in course of erection, construction or alteration within his district, and see that it is being erected, constructed or altered according to the act, and all acts and ordinances in force in said city. Section 18 of the same act provides that when he inspects, condemns and notifies, and his condemnation and notice are disregarded, he shall petition the Court of Common Pleas, which is authorized to make a decree restraining the continuance of the work and the removal of so much of the building as may have been constructed contrary to law. By virtue of these Acts of Assembly, and in pursuance of their provisions, the decree in this case was made. •

The work complained of was the alteration and substantial change of the back buildings of a house, the main part of which fronted on Beach street. The question is whether the alterations and changes as made create a new dwelling-house or other building, within the true meaning and spirit of the act.

The changes were both external and internal. Prior to the alteration one part of this back building was two stories high, another part only one story. The main exterior alteration was made by tearing down two frame walls and erecting brick walls in their places, and by extending them so high as to make the whole building three stories. This necessarily required the other Avails to be elevated.

Formerly there were three rooms only on the ground floor, two stairways in addition to the hall stairway, two ranges, two outside doors, communicating doors between all of the three rooms on the first floor. The alteration consisted in putting in a partition on the first floor, thereby creating four rooms, and making such further changes that now there are four stairways, besides the hall stairAvay, each extending to the third story; four ranges, each room on first floor having one; an outside doorway to each of said four rooms; two of the doorways between adjoining rooms on this floor are nailed up; and none of the rooms on either the second or third floor are communicating.

This construction and arrangement shows a clear intention to make four separate dwelling-houses. Although a part of the old building is retained, yet new and distinct dwelling-houses are built where they did not stand before. Each by itself has the necessary formation and appointments to constitute a cheap tenement house for a family.

The object of the act was to secure and protect health and life, by furnishing each family Avith a sufficient quantity of light and pure air, and with a reasonable facility for escape in case of fire. It should be so construed as to give due effect to its wise sanitary provisions.

We think the learned judge was clearly right in holding the changes and alterations constituted a neAV building within the meaning of the act. It is conceded that if the buildings are within the act, there is not such an open space attached to each or in the rear or side thereof, as the statute requires, for they all front on a yard only seven feet wide, and have no other open space attached to them.

In so far as the decree orders the appellant to open communication between the rooms on each floor, and keep them open, so as to destroy the separate character of the houses, we see no error; but we are unable to find any warrant in the statute to sustain the other part of the decree which restricts the appellant’s right to lease a part of his building separately, or permit it to be so occupied. The power of the court under this act seems to be limited to restraining the continuance of the work, and to ordering the removal or change of so much of the building as may come within the prohibition of the law; but extends not to controlling the use and enjoyment of it. On the building being made to conform to the law, so that it may remain, the right- of the owner to let it to one or to several tenants must remain unimpaired. This part of the decree is reversed and so modified, the other part of the decree is affirmed.

And now, May 5th 1879, this cause having been duly argued by counsel, it is now on due consideration thereof, ordered, adjudged and decreed that the appellant, William Brice, owner of the property described in the petition, open communication from room to room on each of the three floors of the back building of said property or dwelling in said petition described, and keep said communication open.

It is further ordered, that the costs in the court below, and one-half of the costs of this appeal be paid by the appellant, and the other half of the costs of the anpeal be paid by the appellee.


author: Per Curiam.

text:
    Fareira versus Gabell.
    1. A wagering contract is one in which the parties stipulate that they shall gain or lose upon the happening of an uncertain event in which they have no interest except that arising from the possibility of such gain or loss.
    2. Whether a contract is a wagering one is a question for the jury.
    3. Notes given to a broker to cover losses incurred, in stock gambling operations are void.
    4. Where a broker advances money to pay losses incurred in such opera-rations he cannot recover the amount advanced, nor even the commissions for his services, as the whole transaction is unlawful.
    5. It does not vary the legal aspect of the case that some of the parties with whom the broker dealt were actual buyers and sellers and did not intend to gamble.
    6. Brua’s Appeal, 5 P. F. Smith, 294, and Smith v. Bouvier, 25 Id. 325, followed.

      February 7th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Woodward, Trtjnxey and Stbrrbtt, JJ.
    Error to the Court of Common Pleas, No. 2, of Philadelphia county: Of January Term 1879, No. 64.
    Assumpsit by John Fareira against George T. Gabell on five promissory notes drawn by Gabell to the order of plaintiff.
    At the trial defendant gave evidence to show that he employed plaintiff to operate in stocks for him; that'the contracts made through the agency of plaintiff were simply wagering contracts; that the transactions covered about two years; that in 1875, defendant gave three of the notes in suit, amounting to $7000, as “margins on stock contracts,” and two months thereafter the other two notes in suit, amounting to $5000, which was for an indebtedness then appearing to be due.
    In rebuttal, the plaintiff gave evidence that in November 1875, upon a settlement the defendant admitted there was due plaintiff the sum of $14,794.67; that the defendant not having fulfilled his stock contracts, plaintiff had, with defendant’s assent, advanced the money to cover his losses ; that in some instances the stock was delivered to the purchasers, and in some it was not.
    The court, Hare, P. J., in charging the jury said
    “Was this a gambling or wagering operation which the law does not sanction, and will not carry into effect ? Now, a wager may be defined as a contract in which the parties stipulate that they shall gain or lose upon the happening of an uncertain event, in which they have no interest except that arising from the possibility of such gain or loss.
    “ This' may be illustrated by an ex&mple :
    “ A. and B. agree, in consideration of a premium paid by B., that if a certain ship is lost at sea, A. shall pay B. the value of the ship. If B. has no interest in the ship, it is a wagering contract, but if B. has an interest, and will be loser if the ship is wrecked, it is a contract of indemnity and not a wager. So, if two men agree that if coffee rises in price, one of them shall pay a sum of money to the other, it is a wager, if they have no other interest in the coffee than that growing out of the contingency about which they stipulate. But it does not follow that every contract which produces such a result is a wager; the question is one of intention, as deduced from the facts and circumstances.
    “. Let us suppose that A. agrees with B. to buy a thousand bushels of wheat, at $2 per bushel, to be delivered and paid for at the end of thirty days. If wheat rises in value, A. will be a gainer, and if it goes lower he will lose; but inasmuch as the apparent object of the contract is an actual purchase of the wheat, it is not a gaming contract. Nor could such a contract be justly regarded as a wager, although when the time for the delivery of the wheat arrived, it was agreed that B. should, instead of forwarding the wheat to A., pay him the damages to which he would be legally entitled for a refusal to deliver; that is to say, the difference between the stipulated price and the actual value of the wheat at the time fixed for the fulfilment of the contract. Such a settlement of the difference would not, if there was nothing more, be a sufficient ground for inferring that the contract was a gambling contract, or contrary to law. But the case would be materially different if the evidence, taken as a whole, showed that A. and B. did not really intend to buy and sell; that there was no intention on the one hand to deliver, or on the other to receive, the wheat, and that their real purpose was to make a wager in the form of a contract of sale. Hence, if A. and B. were to deal with each other in the way supposed, during a series of months or years, and it appeared in evidence that B. did not, in any single instance, forward the wheat, or have it in readiness for delivery, and that when the time arrived for the fulfilment of these successive contracts, they were always settled by the payment of a sum of money answering to the rise and fall in price, the question would then be one of fact for.the jury, whether the .parties really intended to buy and sell, or to make a wager on the price of grain. v
    “A like question arises for the consideration of the jury in this case — that is to say, whether the intention was that the defendant should become an actual buyer and vendor of stocks through the agency of the plaintiff, or whether the plaintiff expressly or impliedly agreed to act as the defendant’s agent in gambling sales and purchases of stocks, which the defendant had not the means to deliver, and which it was no part of his intention to receive. If the jury find that the transaction was a gambling one on Gabell’s part, and known to be such by Fareira, and that the services and advances Avhich constitute the cause of action were made and rendered in carrying it into effect, their verdict should be for the defendant; and it does not necessarily vary the legal aspect of the case, that some, or the greater number of the persons with whom Fareira dealt, on Gabell’s account, wrere actual buyers and sellers, and did not intend to gamble; although, if such be the fact, it may be taken into view by the jury in determining the true nature of the contract as between Gabell and Fareira.
    “It is, however, contended, by the plaintiff’s counsel, that even if these were gambling operations on Gabell’s part, and so understood by Fareira, he should still, in equity and good faith, be paid for the services which he rendered as Gabell’s agent, and Gabell cannot rely on a fault which was common to both as a defence; and it is said in support of this proposition,- that one who lends money, knowing that the borrower intends to gamble with it, may recover it back. This may, perhaps, be true as between such a borrower and lender, but I am clearly of opinion that one who should undertake to make a bet or wager for another, and advance the money staked would have no right of action against his principal in the event of loss; and I can see no difference between such a case and that of an agent who renders services and expends money in conducting any other gambling operation.”
    The plaintiff excepted to this charge “ because, although the jury should believe that the plaintiff had no interest in said stock contracts other than that of his commissions as a broker, yet the said charge was equivalent to a binding instruction for defendant.”
    The verdict was for defendant. Plaintiff took this writ and assigned the above charge for error.
    .Z7. Cooper Shapley, David W. Sellers and Ceorge W. Biddle, for plaintiff in error.
    If the plaintiff can make out his case irrespective of the prohibited subject he can recover, and the defendant cannot set up a prior invalid consideration to defeat him. To prevent a recovery the very contract sued on must be void or illegal. The notes themselves, when in evidence, were sufficient to warrant a recovery: Eaikney v. Reynous, 4 Burr. 2069 ; Petrie et al. v. Hannay, 8 Term R. 418; Tenant v. Elliott, 1 Bos. & Pul. 3; Farmer v. Russell, Id. 297; Buhners, Ex parte, 13 Yesey 315; Montefiori v. Montefiori, 1 Wm. Black. R. 362; Osborn v. Moss, 7 Johns. 161; Biddis v. James, 6 Binn. 329; Swan v. Scott, 11 S. & R. 155; Fairbanks v. Blackington, 5 Pick. 93; Bredin v. Kingland, 4 Watts 420 ; Armsti-ong v. Toler, 11 Wheat. 258; Tel-ford v. Adams, 6 Watts 433; Lestaspies v. Ingraham, 5 Barr 81; Thomas v. Brady, 10 Id. 169 ; Fox v. Cash, 1 Jones 207 ; Eyrick v. Hetrick, 1 Harris 488; Scott v. Duffy, 2 Id. 20; Ex parte Pyke, Law Rep. 8 Ch. Div. 754 : Smith v. Bouvier, 20 P. F. Smith 325.

      Thomas J. Diehl, for defendant in error.
    This ease falls within that class of actions which the court has decided to be “ wagering contracts, ’ ’ and the process of the law cannot be invoked to enforce it. The propositions advanced by plaintiff in error are well considered in the case of Ham v. Smith, 6 Norris 63.
   The judgment of the Supreme Court was entered, March 10th 1879.

Per Curiam.

The questions in this case were fairly submitted to the jury in a full and accurate charge by the learned president of the court below. The principles enunciated by him we consider as entirely settled in Brua’s Appeal, 5 P. F. Smith 294, and Smith v. Bouvier, 20 Id. 325. In no view of the charge as a whole was it equivalent to a binding instruction for the defendant.

Judgment affirmed.


author: Mr. Justice Paxson

text:
    Knorr’s Appeal.
    Article 10 of the act of incorporation of the Philadelphia Saving Fund Society provides that “ a book shall be kept at the office in which every depositor shall be at liberty to appoint some person or persons, to whom in the event of his or her death, the moneys shall be paid if not otherwise disposed of by will.” By a rule of the society “ In case of the death of a depositor, payment can be made only to his or her executor or administrator producing the the book, unless an appointment shall have been made by such depositor, in the book of the society, of a person to receive the same agreeably to the 10th article of the constitution of this society.” The book thus alluded to opens: “We who have hereunto subscribed our names; depositors with the Philadelphia Saving Fund Society, do hereby in conformity with the tenth of fundamental articles of the constitution of the said society, and in conformity with the act of the legislature of the Commonwealth of Pennsylvania, incorporating the same, passed the 25th of February 1819, appoint and direct that all moneys deposited by us respectively, with the interest thereon, which shall be to our respective credits on a balance of our accounts in the books of said society, at the time of our deaths respectively, shall be paid to the several and respective persons and uses as hereinafter declared and sot forth opposite to our respective signatures, unless otherwise disposed of by will.” Meld, that the act of incorporation was within the recognised powers of the legislature, and an appointment in pursuance of it was valid.
    February 10th 1879.
    Before Sharswood, C. J., Mercur, Gordon, Paxson, Woodward, Trunkef and Sterrett, JJ.
    Appeal from the Orphans’ Court of Philadelphia county: Of July Term 1875, No. 120.
    Appeal of George T. Knorr from the decree of the court confirming the report of the auditor in the matter of the account of Susan Knorr, administratrix of the estate of George Knorr, deceased.
    The facts are stated in the opinion of this court.

      Thomas Q-reenbanlc, for appellant.
    The act of incorporation contemplated the keeping of small savings for sickness or distress, and in case of death the depositors are allowed to appoint in a book kept by the society the person who shall draw the same, doubtless to pay small debts or to defray the expense of burial. No such reason can apply to the depositor- of thousands of dollars, and it cannot be conceived that the legislature intended to allow bequests of large sums of money to pass in this manner. A wide door would thus be open to fraud, and the courts ousted of their jurisdiction over the estates of such decedents. By the use of the word “ appoint” the legislature did not intend a gift or bequest, but the creation of a trust for the receipt and distribution of the money.
    The intention of the act seems to be that small sums should not lie in the fund undisposed of for want of administration, but may be received by the appointee, unless otherwise disposed of by will or administration. And so the officers of the society have construed it; never paying to the appointee when letters were issued to another.
    It is submitted that the writing in evidence is a disposition of his property by George Knorr, to take effect ofter his death, and therefore, a will, but not being in conformity to the Statute of Wills, nor the tenth section of the act, is invalid. George Knorr thus died intestate, and his property descended to his heirs, among whom the fund should have been distributed by the auditor after deducting the widow’s third.

      John Plint, for appellee.
    By the writing in evidence, George Knorr, the decedent, in his life set apart and directed all moneys deposited by him in the savings fund to his credit should be paid over to his wife at the time of his death, by the Saving Fund Society, without the necessity of taking out letters of administration on his estate, the necessity for which could only arise where the deposit was general, and the depositor died intestate, or made his last will and testament under the rules and regulations relating to payments to depositors. <•

   Mr. Justice Paxson

delivered the opinion of the court, March 3d 1879.

This was an appeal from the decree of the Orphans’ Court, confirming the report of the auditor in the matter of the account of Susan Knorr, administratrix of the estate of George Knorr, deceased. It appears that upon the death of the decedent, in 1874, he had on deposit to his credit with the Philadelphia Saving Fund Society the sum of $3742.80, and that in the month of April 18G1, he had made an entry in the books of said corporation by which he directed said money to be paid to his wife, Susan Knorr, in case of his death. The society, however, refused to pay it to her unless she first took out letters of administration. This was done, and the money paid over to her. The question for our determination is, whether upon the settlement of her administration account she is entitled to retain this money by virtue of her husband’s appointment upon the books of' the society, or whether it must be distributed under the intestate laws. The court below awarded it to her, from which decree this appeal was taken by one of the children of George Knorr, by a former wife.

The Act of 25th February 1819, Pamph. L. 32, incorporating the Philadelphia Saving Fund Society, provides (see art. 10, sect. 2), that “ a book shall be kept at the office in which every depositor shall be at liberty to appoint some person or persons to whom in the event of his or her death the money shall be paid, if not otherwise disposed of by will.” It also appears by the rules and regulations of said society respecting payments to depositors, that “ in case of the death of a depositor, payment can be made only to his or her executors or administrators producing the book, unless an appointment shall have been made by such depositor in the book of the society of a person to receive the same, agreeably to the tenth article of the constitution of this sooiety.” The book of said society prepared under this article, opens as follows: “We, who have hereunto subscribed our names, depositors with the Philadelphia Saving Fund Society, do hereby in conformity with the tenth of the fundamental articles of the constitution of the said society, and in conformity with- the act of the legislature of the Commonwealth of Pennsylvania incorporating the same, passed the 25th day of February, A. D.' 1819, appoint and direct that all moneys deposited by us respectively, with the interest thereon, which shall be to our respective credits on a balance of our accounts in the books of said society, at the time of our deaths respectively, shall be paid to the several and respective persons and uses as hereinafter declared and set forth opposite to our respective signatures, unless otherwise disposed of by will.” Following this upon the said book, appears the name of George Knorr, the decedent, and that of' his said wife as his appointee, under date of April 4th 1861, and witnessed by the treasurer of the'society. The object of the above provision in the charter, and the rule of the society adopted in pursuance of it, is obvious.

The Philadelphia Saving Fund Society was originally a voluntary association of a number of the citizens of Philadelphia and vicinity for “the sole purpose of receiving and investing in public stocks or substantial security on real estate, such small sums as may be saved from the earnings of tradesmen, mechanics, laborers, servants and others, and of affording to industrious persons the advantages of security and interest.” The purpose of the society was not changed by its incorporation in 1819. It still continued to be a place for the deposit of the savings of the humble. Art. 14 of its charter limited the deposits of a single depositor to $500 in any one year, and provided that the aggregate deposits should not at any one time exceed $30,000. The individual deposits being in small sums it was seen that unless some method should be devised by which the deposit money could be paid over in case of the death of the depositor without the expense of administration upon his estate, such deposits would in many instances be wholly swallowed up in costs and charges. It was doubtless to remedy this evil that art. 10 was introduced into the charter. It enables the society to pay with safety, and the appointee of the depositor to receive without expense. It was contended, however, on behalf of the appellant, that the reason for this provision fails when large sums are deposited; that to enforce it in such cases would be to open the door to frauds upon creditors, upon the rights of the widow, and of the state as to the collateral-inheritance tax. We have none of these questions before us. When an attempt is made to defraud creditors, the widow or the state, in this manner, it is probable some means will be found to prevent it. For the present it is sufficient to say that the charter of the company having imposed no limit to the amount of the deposit which may be disposed of in this manner, we have no power to do so.

It is said, moreover, that the terms of- the tenth article do not import a bequest or gift of the money; but that the same shall be paid to the appointee, not for his or her own use, but to be held-in trust for the depositor’s personal representatives. The answer to this is that no trust is expressed on the face of the writing, creating the appointment, nor will any trust be implied from a direction to pay a sum of money to another upon the death of the person giving such direction. The obvious presumption is that it was for the use and benefit of the appointee. In the appointment itself, the power appears to have been reserved to make some other disposition of the money by will. As the decedent died intestate, it is to be presumed he was satisfied that the appointment should stand for the use of his wife.

It was further objected, that the writing referred to was a disposition of his property by George Knorr, to take effect after his death, and therefore a will, and not being in conformity to the Statute of Wills, is invalid. This might be so but for the Act of Assembly which expressly authorizes it. Said act being within the recognised power of the legislature, the appointment in pursuance of it is necessarily valid.

We have no doubt the decedent intended this money as a provision for his wife. That it constituted the whole of the estate has no bearing upon the legal effect of his act. He could have accomplished the same result by making a will. He preferred to appoint and direct the money to be paid to his wife after his death, upon the books of the society. The latter would have been justified, in my opinion, in paying the money over to her without administration. Such is the manifest object and meaning of the tenth article of its charter.

The decree is affirmed, and the appeal dismissed at the costs of the appellant.