author: Mr. Justice Sharswood

text:
    North American Land Company’s Estate. Lawrence’s Appeal. Phillips’s Appeal.
    A land company was organized by Morris, Nicholson and Greenleaf. Its lands were represented by shares of stock. Greenleaf sold his shares in the company to Morris and Nicholson, and received their obligations in payment of the same, the shares to be retained by Greenleaf to secure the payment of these obligations. Before their maturity, Greenleaf by deed conveyed certain property to Simpson, in trust, to secure the payment of these obligations that he had passed to different parties, and later assigned the shares to Pratt et al., successors of Simpson, in this trust; subsequently a deed was made by Greenleaf of the first part, Fox of the second part, Morris and Nicholson of the third part, and Pratt et al. of the fourth part. In this it is recited that Pratt et al. hold notes of Morris and Nicholson, i.n trust, for the creditors of Greenleaf, and that certain trusts were created to secure the same, and that the deed is made to better secure those debts, and conveys certain property to form an aggregate fund for the payment of certain obligations. The trustees in this deed became the holders of obligations referred to in the first deed. The fund for distribution is the amount that the shares transferred to Pratt et al. were entitled to from the sale of the lands of the land company: Held, that Pratt et al., trustees in the Aggregate Fund Deed, wore entitled to the fund.
    February 19th and 20th 1877.
    Before Agnbw, C. J., Siiarswood, Mercur, Gordon, Paxson and Woodward, JJ. Williams, J., absent.
    Appeals from the Court of Common Pleas, No. 1, of Philadelphia, county : Of January Term 1875, Nos. 139 and 144-J.
    These were the appeals of Henry Phillips, Jr., administrator d. h. n. e. t. a. of the estate of Robert Morris, deceased, and Edward S. Lawrence, administrator de bonis non of John Nicholson, deceased from the decree of the court confirming the reports of the auditor made in the matter of the account of the Pennsylvania Company for Insurance on Lives and Granting Annuities, substituted trustees, by appointment of tbe Court of Common Pleas, of tbe estate known as “ The 381 Trust.”
    The fund in the hands of the accountant for distribution arises from the sum of $42,343.48, received December 3d 1862, from James Dundas, as surviving trustee of the North American Land Company, being a dividend on 6119 shares of stock in said company, awarded to James Dundas, deceased, the immediate .predecessor of the accountant in the trust, by the decree of the Court of Common Pleas for the city and county of Philadelphia, on the 6th day of July 1861, confirmed by the Supreme Court of Pennsylvania, on the 8th day of November 1862 ; the opinion of the latter court being reported in 7 Wright 23.
    The material facts of the case as disclosed by the report of the auditor, Furman Sheppard, Esq., may be stated as follows : — ■
    On the 20th day of February 1795, Robert Morris, JohnNicholson and James Greenleaf established an unincorporated association, by the name and style of “ The North American Land Company.”
    The founders above named being the owners of lands in the states of Pennsylvania, Virginia, North Carolina, South Carolina, Georgia and Kentucky, vested the titles thereof in three trustees, in trust, to convey the same agreeably to the written articles of association. The capital stock of the company is described by the articles as consisting of 6,000,000 of acres of land, situate in the states above named, which were represented by 30,000 shares of 200 acres each. Every owner of a share was to become and be a member of the company during the period of his ownership of the shares, to all intents and purposes as if he had signed and sealed the articles of association. In the 23d section of the articles, Morris, Nicholson and Greenleaf agree that the dividend or dividends of the company shall not be less then six per cent, per annum in every year, and in case the cash arising from sales of the land does not amount to that sum, they promise and bind themselves, their heirs, executors and administrators to advance and lend to the board of managers of the company such sum as may be necessary in addition to what they have in hand of the company’s money, to enable them to pay $6 on each share, and to secure this undertaking, Morris, Nicholson and Greenleaf agree each to deposit in the hands of the trustees 3000 shares, making 9000 shares in all. It seems, however, that only 4,479,317J acres of land were conveyed by Morris, Nicholson and Greenleaf to the trustees, which, in the proportion of one share for every 200 acres, were represented by 22,365 shares, which was the whole number issued. These shares were issued in equal proportions to each of the three founders, being 7455 shares to each. A corresponding reduction was also made in the number of shares deposited with the trustees by the founders to secure the six per cent, dividends, each founder depositing 2485 shares instead of 3000 shares. Subsequently, on May 28th 1796, by articles of agreement entered into between James Greenleaf of the one part, and Robert Morris and John Nicholson of the other part, Greenleaf sold to Morris and Nicholson, their heirs and assigns, equally as tenants in common, his ryhole interest in the North American Land Company, for the sum of $1,150,000, one-half of AYhich sum was to be paid in negotiable orders draAvn by Morris on Nicholson, payable to the order of Greenleaf and accepted by Nicholson, and to bear date May 28th 1796. The other half of said consideration was to be paid in orders of like date draAvn by Nicholson on Morris to the order of Greenleaf and accepted by Morris. These orders were payable respectively in one, tAvo, three and four years from date, and they were to be drawn for amounts particularly specified in the articles of agreement, which further declare that “ for securing the punctual payment of all the said orders, it is agreed that the said James Greenleaf shall not be obliged to make transfer to the said Morris and Nicholson of the shares in the said Land Company, hereby agreed to be sold, until the said, orders are paid,” &g.
    Subsequent to the making of the foregoing agreement, many of the notes and engagements of Morris and Nicholson given to Green-leaf, in pursuance of said agreement, were pledged by the latter, or by others by his direction, to sundry persons, as a security for the performance of his oato engagements and the engagements of other persons entered into upon his account, and several of said orders, notes and engagements were by an indenture, bearing date September 80th 1796, assigned by Greenleaf to George Simpson, in trust, for the security of Edward Fox; the deed by Avhich said assignment was made being commonly knoAvn as the “ 391 deed.”
    On the same day, viz., September 30th 1796, Greenleaf executed another deed to the said George Simpson, in trust, reciting, inter alia, the facts just mentioned, and declaring it to be his, Greenleaf s, intention, that all persons holding or interested in said orders, notes or engagements, should have the full benefit of the securities which he had received from said Morris and Nicholson or either of them. This last-mentioned deed is commonly called the “ 381 deed.” The present accountant is the substituted trustee thereunder, and the present fund for distribution belongs to the trust created by the deed. The deed in question transfers to said Simpson all and singular the lands, tenements, hereditaments and property, and estate, both real and personal, therein mentioned, to have been received by him, the said Greenleaf, as a security for the said orders, notes, and engagements of said Morris and Nicholson, or either of them, together with the deeds and writings touching the same, and all appurtenances of every kind to the same belonging; including shares of stock, in the North American Land Company, agreed to be delivered by Morris and Nicholson to Greenleaf to secure their notes or obligations, all to be held by said Simpson, in trust upon the nonpayment of any of said orders, notes or engagements, on the request of any of the holders of said notes or engagements, to sell the property conveyed by the deed, and apply the proceeds thereof to the discharge of the said notes, orders or engagements.
    The drafts of Morris and Nicholson were not paid, and the shares were never transferred to them. On the 8th day of March 1797, James Greenleaf, by sixteen several assignments, bearing date on that day, conveyed to Henry Pratt, Thomas Willing Francis, John Miller, Jr., John Ashley and Jacob Baker, successors to George Simpson as trustees under the “ 381 deed,” the shares specified in said assignments respectively, including the 10,000 shares sold to Morris and Nicholson, subject to the conditions and appropriations made and contained in the “ 381 deed.”
    Of the shares referred to in these sixteen assignments only 6119 were transferred to Pratt and others, the trustees of the “ 381 trust” by the agents of Greenleaf.
    Subsequently, on the 26th day of June 1797, an indenture of four parts was made by and between James Greenleaf, of the first part, Edward Fox, of the second part, Morris and Nicholson, of the third part, and Pratt, Francis, Miller, Ashley and Baker, of the fourth part. This indenture recites that Pratt and others, parties of the fourth part, are possessed of notes and acceptances of Morris and Nicholson in favor of Greenleaf, which they hold in trust for certain creditors of Greenleaf, or which they purchased for the use of the trusts reposed in them under assignment from George Simpson, therein referred to, and for the better securing the debts therein intended to be secured, conveys certain property therein mentioned to said Pratt and others, in order that with the property theretofore conveyed, one aggregate fund may be constituted for the security of said indebtedness in the manner therein more particularly mentioned. In this deed Morris and Nicholson agreed that their notes and acceptances therein mentioned and enumerated in a schedule attached to the deed, should “be considered as real, boná fide debts of them the said Robert Morris and John Nicholson jointly and severally, without any plea of defalcation or set-off, either in law or equity, and that all securities of every kind heretofore given by them or either of them, for the securing the payment of the said notes and acceptances, or any of them, are hereby confirmed and made good and valid to all intents and purposes, so far as the same relates to the said notes and acceptances and no further.” The schedule attached to said deed enumerates notes and acceptances amounting to $831,500. This last-mentioned deed is known as “ The Aggregate Fund Deed.”
    The present accountant, is the successor of the original trustee under the “ 381 deed.” The fund in hand is, as above stated, the proceeds of 6119 shares of stock of the North American Land Com - pany, which have been judicially awarded to this trust, and to tne immediate predecessor of the accountant as trustee, upon a state of facts which has been judicially ascertained. The books, papers, exhibits, evidence and testimony generally, before the auditor of the first account of the North American Land Company, and reported by him to the court, and appearing in the printed paper books of that case, have been used and referred to by counsel with like effect as if given in evidence anew in the present hearing. The immediate question in the present reference is therefore solely one of distribution.
    On behalf of the Pennsylvania Company for Insurance on Lives and Granting Annuities, successor of James Dundas, deceased, late trustee of the Aggregate Fund, claim was made for such portion of the fund in hand as should be found applicable to the payment of the following notes and drafts belonging to that trust, viz.:—

    The notes and drafts mentioned in the foregoing list “A” are a portion of those secured by shares in the North American Land Company, specified in schedules D., E., F. and G. of the 381 deed, the particular notes and drafts applicable to each schedule being as stated in the above list. They also form part of the $831,500 of notes and acceptances referred to in the Aggregate Fund Deed, a list of which was annexed to that instrument.
    All o^the drafts of May 28th 1796, in the list above mentioned, amounting in the whole to $532,500, were produced at the audit by the counsel of the claimant; but of the $95,000, of the notes of Nicholson to Greenleaf, dated December ,21st 1795, therein mentioned, four only, of $5000 each [being the 13th item on the Aggregate Fund Deed list], in all $20,000, were produced, while of the $75,000 of notes of same date, of Morris to Greenleaf, four only, of $5000 each [being the 12th item of the Aggregate Fund Deed list], in all $20,000, were produced. The last two notes in said list, for United States Bank shares, valued at $52,000 each, total $104,000, were also produced, thus making the entire amount of original notes and drafts produced $676,500. Mr. Tilghman, the counsel, stated that he had no recollection of having ever seen, and had been unable to find among the papers of the Aggregate Fund Trust, the missing notes for $129,500, and that of those produced, $145,000 had been found by him on the 9th of June 1848, by mere accident, among the papers of the late Edward Tilghman, Esq., the original counsel [in 1797] of the trustees of the Aggregate Fund. He contended before the auditor, however, that sufficient proof of the title of the Aggregate Fund Trust to the whole $806,500 of notes, above mentioned, was furnished by the deed of June 26th 1797, creating that trust, and that the admission of that fact therein made by Morris and Nicholson,- as well as by Green-leaf, was at least primá facie evidence of such title at the present time, and rendered the production of the notes unnecessary.
    The auditor, however, was of a different opinion, and that nothing short of regular secondary evidence establishing the actual loss of the notes should be relied on as a substitute for their production. He accordingly entertained the claim of the Aggregate Fund Trust to the extent of $676,500 of notes given in evidence, and rejected it as respects the $129,500 of notes not produced or accounted for.
    The claim thus made in behalf of the Aggregate Fund Avas opposed by Messrs. LaAvrence and Ingersoll, who made the folloAving claims:—
    “1. Greenleaf must make good to Morris and Nicholson the 10,000 shares he sold them, or restore to them their drafts.
    “2. He must pay to them the $25,000 he agreed to pay [contained in articles of agreement between Greenleaf, Morris and Nicholson, above mentioned], with interest, less credit of amount received by Mr. Morris, $4738.

      “ 3. the trustee must account for the difference between 6119 and 10,000 shares.”
    The auditor’s conclusions were:—
    “Morris and Nicholson are parties to the Aggregate Fund Deed, and they therein and thereby declare that the notes and acceptances referred to in that deed as being held by Pratt and others, the trustees, and enumerated in the schedule attached thereto, ‘ shall be considered as real and boná fide debts of the said Robert Morris and John Nicholson, jointly and severally;’ and all securities given by them or either of them for securing the payment of said notes and acceptances, or either of them, are thereby ‘ confirmed and made good and valid to all intents and purposes, so far as relates to the said notes and acceptances and no further.’
    “As between Morris and Nicholson on the one hand, and the trustees on the other, this is a conclusive admission that the trustees are the holders of the notes and acceptances in question, so that as against the representatives .of Morris and Nicholson the title is to be regarded as in the trustees.
    “ The various views pressed on behalf of the estates of Morris and Nicholson seem to begin or terminate in what substantially amounts to a claim of performance by Morris and Nicholson of the terms of the articles of agreement of sale between them and Green-leaf. ' '
    “ In Moss’s Appeal and Halsey’s Appeal, 7 Wright 23, the Supreme Court has determined what was the legal relation to each other of the parties in that transaction. ‘ The only equitable right,’ it is said, ‘ which Morris and Nicholson could have to demand the stock must have arisen out of payment. Nothing less could ever have entitled them to specific performance. In fact they never did pay. ’ It is not pretended that they did, unless indirectly through what is called the Aggregate Fund Deed, and after a careful in ves-• tigation we have been unable to discover any evidence that the drafts were ever actually paid or in any manner satisfied.’
    “ The evidence in the present reference is the same as that before the Supreme Court as to which the above opinion was expressed.
    “As Morris and Nicholson, in the Aggregate Fund Deed, admitted the title to the drafts and acceptances in question to be in the trustees as against themselves, and as their position was analogous to that of complainants in a bill for specific performance, which would require payment on their part in order to give them an equitable standing, and it is asserted by themselves in the Aggregate Fund Deed that those are bonfi fide debts, and it appears by the evidence, and has been judicially declared, that ‘ they never did pay,’ the auditor believed it his duty to disallow the claim made in their behalf.
    “ On the other hand, the auditor allows the claim in.behalf of the Aggregate Fund Trust, and it remains to consider in what manner the balance for distribution is applicable to the various classes of the notes and drafts above referred to. It is clear from the terms of the ‘ 381 deed’ that the collaterals mentioned in each of its several schedules are a security only for the notes and acceptances mentioned in that schedule, or in other words, that the notes specified in one schedule are not secured by the collaterals mentioned in another.
    “ The present fund arises exclusively from 6119 shares of the North American Land Company, being only a portion of such shares mentioned as collaterals in the aforesaid schedules D., E., F. and Gr., and of the claims entertained and allowed by the auditor, as above mentioned.
    §20,000 are for notes secured by shares referred to in schedule D.
    20,000 “ “ “ “ “ “ “ E.
    104,000 “ “ “ “ “ “ “ E.
    532,500 “ “ “ “ “ “ “ Gr.

      “ It accordingly becomes necessary to ascertain in what way the 6119 shares from which the fund is derived should be divided among the above-mentioned schedules. On this subject it appears to be established, that of the 6119 shares in question, 4970 shares appertain exclusively to schedule G. That schedule embraced the whole of Greenleaf’s original interest in the land company, which consisted nominally of 10,000 shares. Of these, however, 2545 shares were never issued, the land which they were to represent never having been conveyed to the company, and 2485 shares were at the time of issue deposited as security for dividends, and by a decree of this court, affirmed by the Supreme Court, are to be regarded as the property of the company, and therefore as merged. These reductions reduce the number of shares actually issued to or on behalf of Greenleaf to 4970.
    “ The identity of 3869 of the 6119 shares with Greenleaf’s original shares is quite evident. They consist of the 791 transferred by G. Simpson, and 500 transferred by W. T. Franklin, the 1130 transferred by Bird, Savage & Bird, 500 of the 1700 transferred by S. Bourne, and the 948 by assignment by transfer, No. 15 of those dated March 8th 1797, from Greenleaf — total 3869. The remaining 1101 shares of the 4970 are derived from 1200, the balance of the 1700 above mentioned as transferred by S. Bourne. It appears from page 16 of the North American Land Company’s journal, that of the entire 1800 shares, which on March 10th 1795 had been issued to Bourne, 600 each by Morris, Nicholson and Greenleaf, respectively, to hold in trust for them, Morris and Nicholson had equitably assigned their 1200 to Greenleaf, and recognised them as his property. From the nature of the transaction it is probable that this may be regarded as an exchange or loan of shares, and hence that so many of those shares as are needed for the purpose, to wit, 1101 shares, should be regarded as having taken the place of Greenleaf’s original shares. The auditor accordingly finds that schedule G. is to be considered as embracing such part of the fund as has been derived from 4970 shares of the North American Land Company. In regard to the other schedules, D., E. and F., the effort made to identify the particular shares embraced by them, respectively, has not been successful, and under such circumstances the auditor accordingly proposes to divide the 1149 shares among them, in the proportion of the amount of notes embraced by each to the whole amount embraced by all. Such division appears, however, to be of little, if any, practical importance as regards the present distribution, inasmuch as all the notes above mentioned, as allowed to come in upon all the said schedules, are presented by the same claimant.
    “ The auditor accordingly awarded to ‘ The Pennsylvania Company for Insurance on Lives and Granting Annuities,’ substituted trustee of the estate known as the Aggregate Fund, appointed by the honorable court on the 23d day of December 1865, in the place of James Dundas, deceassd, trustee, the following sums, viz.:—
    “ 1. On account of the amount due on the above-mentioned notes for $20,000, secured by schedule D., the sum of ...... $2304.80
    2. On account of the amount due on the above-mentioned notes for $20,000, secured by schedule E., the sum of....... 1809.44
    3. On account of the amount due on the above-mentioned notes for $104,000, secured by schedule F., the sum of ....... 3790.88
    4. On account of the amount due on the above-mentioned notes for $532,500, secured by schedule D., the sum of....... 34,193.60
    $42,098.72”
    Exceptions were filed to the report of the auditor, but before argument in the court below, the decision reported in 10 P. F. Smith 247 was made, reversing the former decision as to the liability of Morris and Nicholson under the 6 per cent, guaranty-covenant. Upon the suggestion of counsel, the court below remitted the report to the auditor, “ to enable parties supposed to be affected by the decision of the Supreme Court to be heard, without the court expressing any opinion upon the question whether the rights of the exceptants are affected by said decision.” Under this order the auditor made a special report. After discussing the extent of the special order, he reports:—
    “ The subject of present investigation being therefore regarded as restricted to an inquiry into the import and effect of the decision in 10 P. F. Smith, page 247, &c., it accordingly becomes necessary . to examine that case, and to ascertain as clearly as possible what it is that is therein adjudicated. This may, perhaps, become more evident by a brief reference to some antecedent matters.
    “ The matter came before the Supreme Court in 1862, in Moss’s Appeal and Halsey’s Appeal, reported in 7 Wright 23. In that case the court treat the six per cent, guaranty of Morris, Nicholson and Greenleaf as imposing ‘an annually recurring obligation, an obligation as long-lived as the association itself,’ and as being ‘ a fundamental regulation for distribution, an organic law of the association, stamped upon the deed of settlement by the founders themselves.’ It was there held that as Morris, Nicholson and Greenleaf claimed under the articles of the association, which included the six per cent, guaranty, they were bound' thereby, and that ‘ by no act of theirs can they deprive those who obtained certificates from them of the right to receive out of the funds of the company the dividends which the fundamental articles assured.’ The preceding case was a review, upon appeal, of the report of the auditor upon the first account of the trustees of the North American Land Company.
    “ Subsequently, in 1862, the report of the auditor upon the second account of the surviving trustee of the same company came before the Supreme Court upon appeal, and is reported and decided in 10 P. F. Smith 247, &c., being the case referred to in the order of court, and the immediate occasion of the present inquiry under, said order. In this connection it may be observed, that it is one of the facts in the history of these transactions, that the affairs of the North American Land Company, shortly after its organization, became so much embarrassed that it was found necessary to modify the original articles of association. Alterations of those articles, or supplementary articles, were accordingly proposed, and were adopted in 1807, by more than the required two-thirds vote of the stockholders, and on April 27th 1808, the trustees under the original articles conveyed the lands held under those articles to the managers appointed under the supplementary articles. The details connected with this reorganization of the company, or alteration of its articles of association, formed a part of the evidence before the auditor of the first account of the trustees of the land company, and the same evidence was before the Supreme Court when the report upon that account was reviewed and passed upon in 7 Wright 23. It should be added, also, that the same evidence was before the present auditor when he audited and reported upon the account of the trustees of the 381 trust.
    “ In the matter of the audit of the second account of the trustees of the land company, it appears from the reporter’s statement of the case in 10 P. F. Smith, p. 254, that after the argument in the Supreme Court upon the exceptions to the auditor’s report upon said second account had taken place, the report was recommitted to the auditor, to examine and report to that court ‘ what effect, if any, the adoption of the supplementary articles had on the 23d article,’ viz., the articles containing the six per cent, guaranty or covenant. The auditor made a special report in pursuance of that order, and stated his conclusions to be, that the adoption of the supplementary or additional articles had the legal effect, not only of releasing all claim against the covenantors under the six per cent, guaranty, for default in the. past, but of annulling or extinguishing the covenant itself. This view was adopted by the Supreme Court. The special report of the auditor was confirmed, and the case was recommitted to him to make distribution. The effect of the supplementary articles upon the twenty-third of the original articles, which contained the six per cent, covenant, appears to be the only subject which is considered and adjudicated in the case in 10 P. F. Smith 247, and no reference is made in the opinion of the court to the opinion in the prior case in 7 Wright 23.
    “ Having thus endeavored to ascertain the nature of the decision of the Supreme Court in 10 P. F. Smith 247, the next inquiry that arises relates to the effect of the decision upon the report of the present auditor as heretofore made. That report set forth a distribution of a fund which by the case in 7 Wright 23 had been judicially awarded by the Supreme Court to the ‘ 381 trust.’ The claims that were made upon the fund, during that audit, in behalf of the respective estates of Morris and Nicholson, are stated and set forth in the, report.
    “ Those claims were overruled, and the balance of the fund, after certain deductions, was awarded to the substituted trustee of the Aggregate Fund.
    “The learned judge, in delivering the opinion of the Supreme Court, in 7 Wright 23, states that there are four principal classes of questions in the case, and these, as enumerated on page 29 of the-report, are first, What rights, if any, were by the articles of association secured to the other shareholders as against Morris, Nicholson and Greenleaf? The second relates to the claims of Morris and Nicholson as creditors. The third question is, Into how many shares the fund for distribution is to be divided ? And the fourth relates to the ownership of the shares.
    “ These questions are discussed separately and consecutively in the opinion. As respects the first of these inquiries, the court evidently treat the six per cent, covenant as having an effective legal bearing upon the point under consideration, as giving rights to the other shareholders as against the covenantors and their representatives, and as postponing in the distribution the shares of stock held by Morris, Nicholson and Greenleaf, until the other shareholders have received their arrears of the guaranteed six per cent, dividend. This part of the ruling of the Supreme Court appears by the perusal of it to be based upon a view of the six per cent, clause, which seems to have been subsequently abandoned in 10 P. F. Smith 247.
    “ The remaining question of the four above mentioned relates to the ownership of the shares upon which the dividend was to be made, and it is this part of the opinion of the court which more immediately concerns the present reference. On page 31 the court takes up the subject of the claim of the ‘ 381 trust’ to 6119 shares. This claim was opposed by the appellants (the representatives of Robert Morris and John Nicholson, respectively), who claimed that the shares above mentioned, which stood in the name of the ‘ 381 trust,’ in reality belonged to them, the appellants. It is stated by the court that ‘ the appellants rest their title upon articles of agreement made on the 28th day of May 1796, between Greenleaf of the one part, and Morris and Nicholson of the other. By these articles it was agreed that Greenleaf should sell to Morris and Nicholson his whole interest in the North American Land Company, consisting of 10,000 shares, for the sum of fl,150,000, payable one-half in drafts of Morris on Nicholson, accepted by him, and the other half in drafts drawn by Nicholson on Morris, and accepted. The drafts were made payable in one, two, three, and four years from date. The articles stipulated that the stock agreed to be sold should not be transferred, but should be retained by Greenleaf until the drafts should mature and be paid, with a proviso that on the payment of a part, a proportional part of the stock should be transferred.’
    “It will be seen from the foregoing language enrployed by (he court, that the appellant’s claim of title was based upon the articles of agreement dated May 28th 1796. The court in construing those articles decide expressly that they do not amount to a legal transfer of the shares, but that they constituted, at most, an executory agreement, of which the appellants were in effect asking a decree for specific performance. After thus stating the general nature and character of the appellant’s claim, the court say, that as the agreement of Greenleaf' to transfer the stock was executory, the only equitable right which Morris and Nicholson could have to demand the stock, must have arisen out of the payment of the drafts, and that nothing less could have entitled them to specific performance. Thereupon it is expressly said by the court that it is not pretended that they did pay, unless indirectly through what is called the Aggregate Eund Deed. The conclusion stated by the court is, that after a careful investigation they have been unable to discover any evidence that the drafts were ever actually paid, or in any manner satisfied, and that evidence of actual payment of the acceptances utterly fails. This is the ground upon which the decision of this part of the case is based by the court, and it will be seen that it contains no reference whatever to the six per cent, covenant, and that said covenant does not in any way appear to constitute an element in the adjudication of the court. It is true, that after this statement of facts and expression of opinion, the court ask what it would avail Morris and Nicholson, even if it were conceded that they were in a position to ask specific performance in their favor ? In connection with this inquiry, the opinion of the court proceeds to say : ‘ the entire dividend on the 6119 shares would be absorbed in the debts due by them to the company, and in the claims of the other shareholders under the six per cent, guaranty, and still these debts and claims would be far from satisfied; in no aspect of the case, therefore, can a dividend upon those shares be made to the appellants. ’
    “ The auditor understands this language of the court as meaning, firstly, that under the construction given to the articles of agreement of May 28th 1796, by which they were held to be executory in their nature, and in view of the default of Morris and Nicholson in payment of the acceptances, which Avere the consideration thereof, their representatives had no valid claim to a dividend; secondly, that even if this were conceded to be otherAvise, it would not practically avail Morris and Nicholson, because the six per cent, covenant, and their debts to the company, Ayould absorb the dividend ; and thirdly, the conclusion is, that in no one of these íavo aspects of the case can a dividend upon the shares in question be made to the appellants.
    “ The inquiry by the court as to how far it would avail Morris and Nicholson, even if it Avere conceded that the prior reasons given for overruling their claim of title were erroneous, appears to be a cumulative consideration, Avhich is merely adverted to by the court as a matter affecting the result in case the decision AYere othenvise, and not brought forward as a basis of the decision. Or if it be regarded as a case in AYhich tAYO distinct and independent reasons for the judgment are assigned by the court, and it is expressly asserted that either of them is of itself amply sufficient to sustain the judgment, it cannot certainly be contended Avith success that the entire judgment falls, because subsequently one of those reasons is pronounced to be inadequate. The auditor cannot avoid the conclusion that in discussing and deciding the claim of title made in behalf of Morris and Nicholson to the 6119 shares, the existence or operation of the six per cent, covenant does not appear by the language of the court to have constituted an element of the actual ratio decidendi ; and he is therefore unable to say that the decision upon the question of title, and the aAvard made to the ‘ 381 trust’ in 7 Wright 23, Ayould have been otherwise, even if the same vieAY of the six per cent, covenant had been taken in that case Avhich Avas subsequently taken in 10 P. F. Smith 247.. The auditor is also unable to say that the case in 10 P. F. Smith 247, should have the effect of modifying the report as heretofore made by him. The passage in that report, in which the claims of Morris and Nicholson are referred to and disposed of, has been already quoted in full, in order that it may appear that the six per cent, covenant is not an element which is taken into consideration in reaching the conclusions there stated. It is not even mentioned or referred to in connection with that part of the report, as contributory in any respect to the reaching of those conclusions. That there has been a change in the view taken by the Supreme Court touching the six per cent, covenant, does not seem to be seriously disputed by any of the counsel. But the auditor is of opinion, as respects this part of the case, that such change of view does not affect the construction of the agreement of May 28th 1796, or the deductions from the evidence, in pursuance of which the Supreme Court, in 7 Wright 23, established the title of the ‘381 trust’ to the shares in question, as against the claims of title made in behalf of the representatives of Morris and Nicholson, and that consequently that title and those claims should stand in the position in which they were placed by the case in 7 Wright 23, notwithstanding the subsequent decision in 10 P. F. Smith 247.”
    Exceptions were filed on behalf of the representatives of Morris and Nicholson. The court below dismissed the exceptions and confirmed the original and special reports, Allison, P. J., delivering the opinion. After stating the history of the case and the provisions of the different deeds of trust, he says:—
    “ To the conclusion of the auditor awarding the fund in the hands of the accountants to the Aggregate Fund Trust, exception is taken on various grounds, and by different parties. Much stress is laid on the clause of the Aggregate Fund Deed Avhich excludes the 1381 deed’ and property therein mentioned from the operation of the Aggregate Fund Deed; but as w'e have seen, by quoting the express objects to . be accomplished by the creation of the latter trust to what it applied, this clause can be regarded in no other light than as guarding, by express terms of exclusion, the ‘ 381 deed’ from all benefit of the trust created by the Aggregate Fund Deed. It is no more than declaring that the property set apart in the Aggregate Fund Deed, for certain specified objects, Avholly separate and distinct from those which the ‘ 381 trust’ was created to secure, shall not be applied to the ‘ 381 trust.’ The mistake of the exceptants, under this head of objection, is in supposing that such is the effect of the award of the auditor, which is founded solely on the fact that the trustees under the Aggregate Fund Trust are the legal holders of the notes and acceptances produced by them, to secure the payment of which the 6119 shares of stock Avere set apart by Greenleaf. For whose benefit they hold is another question, which can hereafter be raised at the proper time and in the proper forum. No presumption of payment of these notes arises from the fact that they are in the hands of the present accountants, who are trustees of the Aggregate Fund Trust. This position is fully answered by the restatement of the fact that when the Aggregate Fund Deed was executed, Morris and Nicholson recognised the existence of the notes as well as their entire obligation to pay the same, and that they were, as to, the holders, the predecessors of the present accountants, wholly without defence.
    “It is also contended, against the report, that certain of the exceptants have had no day in court, the auditor, J. A. Phillips, having dismissed their claim for want of jurisdiction, holding that the proper time to present it would be on the settlement of the present account of the ‘ 381 trust.’ The report of auditor Phillips was confirmed by the Court of Common Pleas, and this it is now contended has left them without a hearing upon the merits. But the whole case, including the voluminous testimony taken before the auditor, went up to the Supreme Court, and was fully considered in Moss’s Appeal and Halsey's Appeal, 7 Wright 23. No one who reads the lengthy and well-considered opinion in that cáse can doubt that it was considered in the court upon its merits; it is decided on no technical ground, but on the broad principle that the present exceptants are without merit, that they have no standing as claimants for proceeds of 6119 shares of stock until they prove actual payment of the notes, and this the Supreme Court say they have not done. The contract of May 28th 1796 is held to be not a sale absolute for notes, with a pledge of the shares as security, but an executory contract to sell, and is incapable of any other construction. The power of the Supreme Court to go into the merits of the questions as to which the auditor and court below had decided they were without jurisdiction, is denied; and all that that court have said, under this head, in Halsey’s Appeal, is characterized as mere obiter dictum. We are invited, in the argument submitted, to hold that the Supreme Court having no jurisdiction, its decision of the £ 381 trust’ is neither conclusive in law nor in fact, and is coram non judice. To sustain this doctrine, counsel has cited Frantz v. Brown, 17 S. & R. 292; Schuylkill County’s Appeal, 2 Wright 459; Jones v. Jones, 2 Jones 355. But we do not feel free to adopt this suggestion, and thus disregard the decision of the Supreme Court, and hold that it £ can have no judicial weight with this court in now deciding the question.’ We prefer that the tribunal which decided Halsey’s Appeal should themselves first adopt this view, if the reasoning pressed upon our consideration be well grounded.
    “ Several positions were taken before the auditor by the counsel representing Halsey, administrator d. b. n. of John Nicholson, deceased, which are stated _ by the auditor in his report to be: 1. Greenleaf, represented by the accountants, must make good to Morris and Nicholson the 10,000 shares which he sold to them, or restore to them their drafts. 2. He must pay them the $25,000 which he agreed to pay by the articles of May 28th 1796, the same under which he agreed to sell all his interest to Morris and Nicholson in the land company for $1,150,000, less $4738/ 3. The trustee must account for the difference between 6119 and 10,000 shares. The auditor does not in his report reply in detail to these several positions taken in behalf of the administrator of John Nicholson, deceased, but says the various views pressed on behalf of Morris and Nicholson seem to begin and terminate in what substantially amounts to a claim of performance by them of the terms of the articles of agreement of sale between them and Greenleaf. Rut that there had not been performance was settled in Halsey’s Appeal, and there has been no attempt to show the contrary in point of fact up to this time; all subsequent effort, if such has been made, has brought no fact to the front which even tends to show actual payment, and the Supreme Court have said that to set up a presumption of payment will not suffice. In further support of the views of this exceptant, an equitable ground is assumed ; that Greenleaf, having taken to himself the benefit of the $1,150,000 of notes, those claiming under him should be postponed to the claim of Morris and Nicholson, who have never derived one cent of profit from what they thus bought and paid for. Rut what did they pay ? Promises which they never fulfilled; worth up to this hour to the holders just the value of the several pieces of paper on Avhich they are written.
    “ The answer to this position of this exceptant is, that if Morris and Nicholson claim an equitable enforcement of the agreement with Greenleaf they must first do equity. There can be no enforcement of specific performance till the party asking relief shows performance, or the tender of it, on his part. This is what the Supreme Court has already settled in this case as applicable to this very demand ; recognising the justice of this decision, we have neither the disposition nor the power to dispute or overthrow it. It stands in the way of this exceptant, so that he cannot advance a single step in furtherance of either of his propositions until he removes this barrier. To every demand which he may make, until this is done, the conclusive answer is, that as a condition precedent to the enforcement of a transfer of stock to you, you promised to pay your notes and engagements, and this you have not done; and the express agreement further was, that James Greenleaf was not to transfer until you did pay. Neither does the resulting trust, in favor of Morris and Nicholson, become effective until the notes which the stock was assigned to protect have been paid.
    “ The auditor recognises the claim of the trustees of the Aggregate Fund Deed as the holders of $676,500 of the notes produced by them, and rejects the claim set up by said trustees to other notes amounting to $129,000, because they were neither produced nor shown to be in the actual or constructive possession of the claimants. In this, we think, he decided correctly; the recognition of these $129,500 of notes in the deed of June 26th 1797 does not of itself show title in the trustees of that deed.

      “We cannot sustain the exceptions filed by certain shareholders in the North American Land Company, represented by Mr. Wain. The exception is, that the whole fund should have been awarded to the shareholders of said company, and not to the trustees of'the Aggregate Fund Trust; but if we understand the grounds upon which this claim is based, it is that the conditions on which the ‘ 381 trust’ was executed, never having been complied with, the property did not pass under the deed, and it should go to the shareholders other than Morris and Nicholson, under the decision of the Supreme Court in Halsey’s Appeal, 7 Wright 23, as to the effect of the covenant of guarantee. . If this is the basis on which this claim rests, the decision in 10 P. F. Smith 247, which swept away this covenant, would seem to take from this claim all the support it ever possessed.
    “ But the alleged non-execution of the ‘ 381 trust’ cannot avail to set that trust aside as far as Morris and Nicholson are concerned, and reinstate them in the position in which they stood before the ‘ 381 deed’ was executed. They subsequently became parties to the Aggregate Fund Deed, which recognises the existence at that date of the ‘ 381 deed,’ and the appropriation of property therein mentioned to the uses of that trust. It is too late to raise such a question as this after actual and presumed ratification by Morris and Nicholson, or to hold, that by reason of an assumed non-execution of that trust, Morris and Nicholson, though reinstated, are to be postponed to the other shareholders of the company.
    “ These are all the questions AYliich present themselves upon the first report of the auditor on the ‘ 381 trust.’ When they were first called for argument, and, indeed, after the argument had somewhat progressed, it was suggested that an appeal was pending in the Supreme Court upon exceptions to the decision of the Common Pleas upon the report of John M. Collins, Esq., auditor appointed to distribute the balance appearing on the second account of James Dundas, surviving trustee of the North American Land Company. It was agreed to by counsel, that the exceptions should stand over until the decision of the Supreme Court should be made. After that decision had been announced, which is reported in Ingersoll’s and Dales’s Appeal, 10 P. F. Smith 247, the following order was made: ‘ It is ordered that this report (upon which wre have just remarked) be remitted to the auditor, to enable parties supposed to be affected by the decision of the Supreme Court, to be heard, &c., without the court expressing any opinion upon the question whether the rights of the exceptants are affected by said decision.’ The whole case then went back to the present auditor, which opened before him for argument the questions upon which he had originally passed. The auditor, however, upon the making up of his second report, correctly construes the order of reference as raising before him the question intended by the court, namely, to inquire and determine whether or not, if the decision in 10 P. F. Smith 247 had been made before the conclusion of the audit, or the filing of his report, it would have had such legal bearing upon the subject before the auditor as to require a modification of the conclusions as stated, or the award as made by him. Resting on this conclusion, the auditor proceeded to examine Ingersoll’s and Dales’s Appeal, in order to ascertain what it is that is therein adjudicated, so as to reach a conclusion as to the effect of that decision upon the award which he had made in his first report.
    “ Under the original articles of association, whereby the company was constituted in 1795, the.founders, as previously stated, agree that the dividends of the company shall not be less than six per cent, per annum in every year; for the payment of which they made, as they supposed, ample provision, and made themselves personally responsible to make good any deficiency arising from the sales of land to secure the payment of the dividend of six per cent, to the shareholders. In Moss’s and Halsey’s Appeal, 7 Wright 23, the Supreme Court, in 1862, decided that this guarantee imposed an annually recurring obligation as long-lived as the association itself; that as it was a fundamental article of the association, constituting a part of the original contract between the founders of the company and the shareholders, it was not avoided by long disuse and non-claim. In Ingersoll’s and Dales’s Appeal, the court held that the agreement organizing the company provided for a change in the articles, which was afterwards duly and properly made, and that the pledgors were not bound unless it clearly appeared that they had agreed to do so, to transfer or. carry over into the organization as changed their original guarantee.
    “The power to effect a change in the articles of association, and the fact that they were materially changed by a vote of the shareholders, was overlooked by the court in Halsey’s Appeal, 7 Wright 23, and it was there held, that as Morris and Nicholson claimed under the original fundamental articles which included the six per cent, guarantee, they were bound thereby, and that by no act of theirs could they deprive those who obtained certificates from them of the right to receive out of the funds of the company the dividends which those articles assured to them.
    “ This six per cent, guarantee clause having afterwards been decided to have no present standing in the case, the question presented itself in what manner does the last decision of the Supreme Court affect the questions which arose upon the report of the auditor under the 1 381 trust ?’ The auditor makes reply to this inquiry, by saying that it nowhere appears in his report that in determining between the respective claims of Morris and Nicholson on the one ' hand, and, the Aggregate Fund on the other hand, he was influenced by any considerations connected with the existence or non-existence or effect of the six per cent, guarantee clause. An examination of the report fully sustained this assertion. Nor does the opinion of 7 Wright 28 rest upon this clause of the original agreement, but upon the fact of not having paid the notes and acceptances given to Greenleaf, who, by the articles of sale of his interest in the company to Morris and Nicholson, was to retain his stock as security for the payment of the notes, and who afterwards assigned all his interest to secure his creditors. Until payment was shown, the resulting interest of Morris and Nicholson could not be made available to them, and indeed that they had no right or interest in the shares which they had agreed to purchase from Greenleaf until they paid their notes.
    “ The agreement was but executory, with no right to call upon Greenleaf to transfer his interest in the company until they had complied with their obligation, and paid the notes and acceptances, which were the consideration for the agreement on the part of Greenleaf to transfer his stock. The court add to this statement the conclusion that if the difficulty of which they had treated was out of the way, and upon which the decision rests, namely, an entire want of equitable or legal right, growing out of the fact that the notes still remained unpaid to the assignees of Greenleaf, it still would not avail to carry the stock to Morris and Nicholson, because the entire dividend on the 6119 shares would be absorbed by debts due by them to the company, and in the claims of other shareholders under the six per cent, guarantee. This was but the statement of a fact which the court held would arise to defeat the claim of Morris and Nicholson, if the ground on which the decision is based was out of the way. It becomes unimportant, therefore, to this cause that the original six per cent, covenant would no longer avail to defeat the claim of Morris and Nicholson, unless the first and more material objection, non-payment-of the notes, be also shown to be a mistake in fact or in law. If payment can even now be shown this difficulty will disappear, and Morris and Nicholson, resurrected in the persons of their legal representatives, will take the fund in controversy, but they cannot be allowed to take it on the mere presumption of pay'ment, growing out of the lapse of time ; for to allow this would be, as the court say in Halsey’s Appeal, to present the case of a chancellor, moved to decree specific performance of one who had not complied with his engagements, but had remained quiescent until he had been discharged by lapse of time. The significant question is then asked, Was ever such a foundation for an equity successfully set up ?
    “For the reasons stated, we agreed with the auditor that the change of view taken of the six per cent, guarantee by the Supreme Court does not affect the construction of the agreement of May 28th 1796, or the deductions from the evidence, in pursuance of which that court, in 7 Wright 23, established the title of the ‘ 381 trust’ to the shares in question, as against the claim of title made in behalf of the representatives of Morris and Nicholson. Thus holding, we dismiss the exceptions and confirm both reports of the auditor.”
    The assignments of error were for dismissing the exceptions and confirming these reports.

      Charles Henry Hart and JEdward Ingersoll, for appellant, . Henry Phillips, Jr., administrator, &c., of Robert Morris.

      William J. MeJElroy and Benjamin Harris Brewster, for Edward S. Lawrence, administrator of John Nicholson, deceased, the other of the appellants.

      JE. Spencer Miller and William M. Tilghman, for appellee.
   Mr. Justice Sharswood

delivered the opinion of the court, May 7th 1877.

The question presented on these appeals is one of distribution. The fund to be distributed arises from the proceeds of 6119 shares of stock of the North American Land Company. This fund it is net disputed has been raised under the trusts of a certain deed of September 30th 1796, James Greenleaf to George Simpson, recorded at Philadelphia in Deed Book No. 55, p. 381, and therefore called the “ 381 trust,” to distinguish it from another trust under a deed of the same date between the same parties recorded in the same book at page 391. The first mentioned, or “ 381 deed,” recites several conveyances by Robert Morris and John Nicholson to George Simpson, to secure the payment of orders drawn by them and endorsed by James Greenleaf in several classes, and recites also that James Greenleaf was desirous “that all persons holding or interested in said orders, notes or engagements should have the full benefit of the securities mentioned.” The trust is, “ that any of the said orders, notes or engagements, being due and unsatisfied,” the trustee., on the request of thje holder or James Greenleaf, should make sale of the property conveyed, and that as soon as all the said notes, orders and engagements shall be paid and satisfied, then to reconvey to James Greenleaf. It is clear that the holders of said notes and engagements are the eestuis que trustent to whom the fund is to be distributed.

The appellees, to whom the fund was awarded in the court beiow, are the successors of Henry Pratt et al., to whom James Greenleaf, Edward Pox, Robert Morris and John Nicholson, by deed dated June 26th 1797, conveyed certain property to form an Aggregate Fund, in trust (after certain provisions not now material), to pay all the notes, endorsements, and other engagements made by Edward Pox for or on account of James Greenleaf, amounting with interest to about $900,000, for which Robert Morris and John Nicholson were to give their obligations, and also to pay the trustees for certain notes and acceptances which they had purchased for the use of the trusts of the “ 391 deed,” $4725. George Simpson, the grantee in the “ 391 deed,” on the 23d of March 1797, conveyed to the same persons, the trustees of the Aggregate Fund, all the real estate, notes and acceptances, held by him under that deed, in trust, to secure Edward Fox. Attached to the Aggregate Fund Deed is a schedule containing a list of notes and acceptances of Robert Morris and John Nicholson, amounting to $831,500. Morris and Nicholson were to give their obligations for the payment of these notes and acceptances, payable one-half on the 26th of December 1798, and the other half on the 26th of December 1799. Then follows a covenant in these words: “ The said Robert Morris and John Nicholson, and each of them, agree to and with the said Henry Pratt, Thomas W. Francis, John Miller, Jr., John Ashley and Jacob Raker, and to and with the survivors and survivor of them, and to and with the heirs and assigns of them, and of the survivors and survivor of them, that the several notes and acceptances, hereinbefore mentioned, endorsed by James Greenleaf, and now held as aforesaid by them or any other persons for their use, amounting to $831,500, a particular list of all which notes and acceptances is hereunto annexed, shall be considered as real, bond, fide debts of them, the said Robert Morris and John Nicholson, jointly and severally, without any plea of defalcation or set-off either in law or equity, and that all securities of every kind heretofore given by them or either of them for the securing the payment of the said notes and acceptances or any of them are hereby confirmed and made good and valid to all intents and purposes, so far as the same relates to the said notes and acceptances and no further.”

The appellees, claiming as the trustees under the Aggregate Fund Deed, produced before the auditor notes to the amount of $676,500, identical with those described in 'the .schedule attached to the deed. The question — and it is really the only question— presented on these appeals, is whether they have entitled themselves as boná fide holders under the trusts of the “ 38T deed.” The holders of these notes are certainly within the terms of that trust, and unless something has been shown to impeach the primá facie title arising from mere possession, are entitled to the benefit of it. It was earnestly contended that the appellees could not' have rightful possession of them under that deed as trustees, as it contained no words conveying anything but the lands and real estate described in it. This is undoubtedly true. Indeed, that deed expressly recognises the fact that these notes were all then in the possession of these trustees, or of other persons for their use. It is clear that the shares of North American Land Company stock, the proceeds of which constitute the fund in court, did not pass by that deed. They were already vested in the trustee under the “ 381 deed.” The trustee under that deed was no party to the Aggregate Fund Deed, and to preclude all question, it expressly declares that the “ 881 deed” and “property therein mentioned is not included herein, nor influenced in any degree, nor forms any part of this indenture.” It will be observed that all the property which was conveyed by Greenleaf to Simpson by the “ 381 deed” was property of Morris and Nicholson, pledged by them to Greenleaf for the security of his acceptances, as specified in the several schedules attached to that deed. On the other hand, the property conveyed by the “ 391 deed” to Simpson was exclusively property of Greenleaf. Morris and Nicholson were no parties to that deed. All that property, as we have seen, had been conveyed by Simpson to the same gentlemen, who were made trustees under the Aggregate Fund Deed, and as that deed rvas a conveyance of a large amount of property belonging to Morris and Nicholson, this, with the 'property of Greenleaf, already transferred to them, constituted w£at was properly called an “Aggregate Fund,” intended more especially for the security of Edward Fox. Hence the Aggregate Fund Deed provides that “ the whole property hereby conveyed by the said Robert Morris and John Nicholson, either jointly or severally, together with all the real estates and the legal and equitable interests and titles thereto heretofore conveyed and assigned to the said Henry Pratt et al. by any or all of the hereinbefore mentioned indentures, shall form and be considered as one aggregate fund.”

In addition to the notes and acceptances included in the “391 deed, ’ ’ it is recited that the trustees, Henry Pratt et al., “are possessed of other notes and acceptances of them, the said Robert Morris and John Nicholson, and of each of them separately, which are made payable to and endorsed by the said James Greenleaf, which they hold in trust for certain creditors of James Greenleaf, and are also possessed of other notes or acceptances of them separately, which are made payable to and endorsed by the said James Greenleaf, ■which they- purchased for the use of the trusts in them reposed by the said indenture from George Simpson.” The deed sebsequently proceeds to provide that the trustees shall be reimbursed $4725, money paid by them for these last-mentioned acceptances and notes. Yet these very notes seem included in the general words of the covenant before referred to, “the several notes and acceptances hereinbefore mentioned, endorsed by James Greenleaf, and now held as aforesaid by them or any other persons for their use.” No list of the notes thus purchased was in evidence, and the counsel on both sides say that they are not aware of the existence of any such list, nor of evidence from which such a list could be made out. I conjectured at one time that the $145,000 found by mere accident among the papers of Edward Tilghman, the original counsel of the trustees of the Aggregate Fund, might have been these notes, but the conclusive answer to this or the suggestion that having been cancelled (as it would certainly seem that they ought to have been), they were the $129,500 not produced, is that all these notes are in the schedule and recognised as existing debts of Morris and Nicholson.

We return then to the covenant.- Had it been a mere recognition of the existence and bona fides of these notes in the possession . of the trustees, there would be very great force in the contention that they were recognised merely as claims on the Aggregate Fund, which the trustees of that fund were thereby authorized to apply to their payment. With such a construction of the covenant it would be entirely congruous to hold, that the notes were paid and extinguished as claims against Morris and Nicholson, their bonds and the Aggregate Fund being appropriated to their payment, and the trustees, as holders, and those who surrendered to them and took certificates agreeing to look only to the bonds and the fund. A creditor may undoubtedly accept a collateral wdthout giving up his original claim, but if he surrenders the evidence of that claim and takes a new security, the presumption is the other way. It is impossible, however, to give such a restricted construction to the covenant in question. Its language is too broad and comprehensive, and there is no reason why full effect should not be given to it as against Morris and Nicholson or those claiming under them. “All securities of every kind heretofore given by them, or either of them, for the securing the payment of the said notes and acceptances, or any of them, are hereby confirmed and made good and valid to all intents and purposes,' so far as the same relates to the said notes and acceptances and no further.” This certainly was not the language of men whose intention was to limit the security of the notes to the bonds and the Aggregate Fund. That there were other securities then existing, particularly the shares of North American Land Company stock, which had been pledged by Morris and Nicholson for the payment of these and other liabilities, and which were then held under the “ 381 trust” for that purpose, is a position beyond all controversy. Why then shall not these notes, thus recognised distinctly as secured, be entitled to the proceeds of these land shares ? It is maintained with great zeal and earnestness by the able counsel of the appellants, that they are precluded by that clause of the Aggregate Fund Deed before adverted to, which declares that the “ 381 deed” and property therein mentioned is not included therein, nor influenced in any degree, nor forms any part of that indenture. These words seem to have been inserted ex majori cautela. The property vested in the “ 381 trust” could not, if they- had wished to do so, been made a part of the Aggregate Fund. The trusts of the “ 381 deed” were for all holders of notes and acceptances of Morris and Nicholson which had been endorsed by Greenleaf, as well those upon which Fox had become liable as others. George Simpson, the grantee of that deed, or any assignee from him, was no party to the Aggregate Fund Deed. Undoubtedly the holders of the $617,500 notes, not scheduled in that deed, would be entitled to come in pro rata with the $532,500 on the 4970 shares which the auditor finds to appertain to schedule G. — the $1,150,000 for which the interest of Greenleaf was purchased by Morris and Nicholson- — and to secure the payment of which the legal title remained in him by the agreement of May 28th 1796, and which he transferred to George Simp: son by the “ 381 deed.” Morris and Nicholson would not have been estopped by their covenant from contesting the validity of those $617,500 notes, or the bona fides of the holders, as they are as to the scheduled notes. But surely there is nothing in all this to shut out the $532,500 notes from their right to claim. Nor can it be pretended that the non-production of the $617,500 gives the representatives of Morris and Nicholson any right in law or equity to stand in the shoes of the holders, much less to insist upon the exclusion of the scheduled notes as to which they had expressly covenanted that all securities of every kind theretofore given should be good and valid.

The great aim of Morris and Nicholson evidently was, as honest and honorable men, to appropriate their property for the payment of their notes and acceptances in the hands of bond fide holders. Whatever may have been their defence as .against Greenleaf, they surrendered it as far'as the scheduled notes were concerned as to the trustees, whom they recognised to be bond, fide holders. It is evident that at this late day we cannot understand all the circumstances of the case so as to feel sure of doing entire justice between the parties. It is not improbable that many of these notes were bought in the market for merely nominal sums. Three cents on the dollar is reported by the auditor to have been about their market price in 1797. It is better for us to rest on the conclusion that the parties understood their case much better than we can now do, and to give effect to their agreement according to its plain language.

Decree affirmed; the costs of this appeal, including the printing of the paper-books of all parties, and a fee of one hundred dollars to each of the counsel of the appellants, to be paid from the fund.


source: Caselaw Access Project

license: Public Domain

text:
    Monocacy Bridge Company versus American Iron Bridge Manufacturing Company.
    1. A bridge company advertised for proposals for a bridge, the proposals to specify the greatest strain to which the metal would be subjected in sustaining a weight of one ton to each lineal foot. A bridge manufacturing company sent in proposals, in writing, with such specifications. These proposals were accepted and an agreement entered into between the two companies, wherein it was stipulated that the bridge should be built “ in accordance with the annexed specifications.” . The only specification annexed was a printed copy of the advertisement for proposals pasted on the back of the agreement. The manufacturing company built the 'bridge and brought covenant for the contract price. At the trial the court below refused to admit the letter containing the proposals, to explain the reference in the specifications, and also rejected an offer to show that before the contract was awarded plaintiffs’ president had made certain declarations to defendants which had induced the making of the agreement. Held, that this evidence should have been admitted.
    2. Where parts of a covenant are waived by the defendant, the waiver does not render it a new contract, and the remedy is by action of covenant.
    3. If there has been substantial performance the plaintiff is entitled to recover, but not necessarily the whole contract price. There may be defeots in the fulfilment of such a nature as,to preclude the plaintiff from recovery, from which the jury would have a right to make a deduction as compensation to defendant.
    4. The declarations and admissions of an agent, when not within the scope of his authority, which is merely for a special purpose, are not admissible in evidence to affect his principal.
    February 26th 1877.
    Before Aunew, C. J., Sharswood, Mercur, Gordon, Paxson and Woodward, JJ.
    Error to the Court of Common Pleas of Berks county: Of January Term 1876, No. 219.
    Covenant by the American Iron Bridge Manufacturing Company against the Monocacy Bridge Company.
    Defendants pleaded covenants performed, absque hoc. The facts were these: On the 22d of April 1870, the defendants advertised for proposals to be received on the 7th of May following for the erection of a bridge of wrought iron over the Schuylkill river near Monocacy Furnace. By the terms of this advertisement the bridge was “ to be of sufficient strength and warranted to carry a load of one ton to each lineal foot, proposals to specify the greatest strain per square inch in pounds to which the metal will be subjected in sustaining the weight required, viz., one ton to each lineal foot.” On the 4th of May, the plaintiffs, in a letter by James McCarty, the president of the Iron Bridge Manufacturing Company, to the secretary of the Monocacy Bridge Company, sent in proposals, which stated that they would “guarantee the bridge to bear a rolling load of one ton to a lineal foot,” and added, “ the calculation is as follows for the strength of the bridge: ten thousand pounds allowed per square inch for tensile strain, and eight thousand pounds for compression strain.”
    These proposals were accepted, and on the 7th of May an agreement was entered into between the two companies, which provided that “ the American Iron Bridge Manufacturing Company, of the' first part, do hereby agree with the Monocacy Bridge Company, of the second part, to build and erect for them, over the river Schuylkill, in said county, near Monocacy Furnace, on abutments to be furnished by said parties of the second part, a wrought-iron bridge, according to the specifications of the parties of the second part, hereunto annexed. The said bridge to be of three spans, each one hundred feet long and eighteen feet wide in the clear. The floor beams or joists to be of white oak, and fourteen inches wide by four inches thick, and the flooring to be of white oak plank three inches thick; and the structure to be built and erected in a good, workmanlike manner, and of good materials, and is to be completed and ready for use on or before the 1st day of November 1870, in accordance with the annexed specifications.
    “And the said parties of the second part do hereby promise and agree for themselves and their successors in office, that in consideration of the covenants and agreements above set forth, they will furnish all necessary abutments and masonry for said bridge on or before the 7th day of September 1870, and will pay or cause to be paid to said parties of the first part, or their assigns, for said bridge, the sum of $7800, in the following manner: One-half when the bridge is put on walls, and the remaining one-half within sixty days thereafter.”
    The only specification annexed was a printed copy of the advertisement for proposals which was pasted on the back of the agreement.
    Of the contract price $3754.96 were paid by defendants, and plaintiffs brought this suit for the balance.
    On the trial before Yan Reed, A. L. J., defendants offered in evidence the written proposal dated May 4th 1870, of the plaintiffs to the defendants, for the construction of the bridge as part of the transaction, and as explaining the reference in the specification which required “ proposals to specify the greatest strain per square inch in pounds to which the metal will be subjected in sustaining the weight required,” and supplying the deficiency in the specification ; to be followed by evidence that before the defendants awarded the contract to plaintiffs, their president appeared before the defendants’ board and explained his proposal, and said the bridge should be built of the strength specified, “ will guarantee it to bear a rolling load of one ton to the lineal foot. The calculation is as follows for the strength of the bridge: 10,000 pounds allowed per square inch for tensile strain, and 8000 pounds for compression strain.” And that in consideration of these promises and representations the contract was awarded to plaintiffs, and the agreement entered into.

      Upon objection, the court rejected this evidence, which was the first assignment.
    Defendants offered letter dated December 14th 1870, from James McCarty to J. 0. Wright, president Monocacy Bridge Company, authorizing Moseley to consult with defendants’ engineer and settle all matters about the bridge, and saying whatever agreed to by him will be satisfactory; to be followed by telegrams, James McCarty to Joseph 0. Wright, naming time to meet General Moseley— the first dated December 14th 1870, and the second December 16th 1870; to be followed by proof that Moseley did meet the defendants’ board and engineer, and that he then admitted that the bridge was not of the strength required by contract, and that they never intended to build a bridge of the. strength specified in contract, and that he himself owned the majority of the plaintiffs’ stock.
    The rejection of this evidence constituted the second assignment.
    There being proof that General Moseley was the engineer of the plaintiffs and the patentee of the bridge; that the bridge in controversy was planned and designed by him, and under his direction, the defendant offered a letter dated the 14th December 1870, from the president of plaintiffs to J. C. Wright, president of the defendants, constituting Moseley their agent “to consult with defendants’ engineer and settle all matters about the bridge,” and expressly stipulating that whatever should be agreed to by him “should be satisfactory,” to be followed by evidence of the representations, declarations and admissions of Moseley respecting the subject-matter, viz., the bridge, made at the time he met the defendants, under the authority contained in the letter, and whilst he was transacting the business of the plaintiffs, entrusted to him by the plaintiffs.
    The rejection of this evidence was the third assignment.
    The defendants proposed to ask Mr. Wright, its former president, “ wherein, if at all, does the bridge as built by plaintiffs differ from the bridge required by contract ? What, if anything, is the difference in cost and value of the bridge erected and the bridge required by contract?” And to ask Mr. Lorenz, the plaintiffs’ expert, “If one were required to calculate the strength of a bridge which was to bear the weight specified for this bridge, and the builder had made it optional with the other party to take either lattice bars or suspension rods, would you calculate the strength of lattice bars to ascertain its practical strength ? Would not this bridge be subjected to a compression strain of more than 8000 pounds, and a tensile strain of more than 10,000-pounds, in carrying a moving load of one tonto each lineal foot?”
    All of which proposals were rejected and constituted the fourth, fifth, sixth and seventh assignments of error, respectively.
    The defendants submitted the following points, with which are given the answers of the court thereto :—

      1. This is an action of covenant. The declaration avers complete performance ; therefore if the jury believe that the bridge was not constructed eighteen feet wide, and completed by the 1st of November 1870, as stipulated in the contract, there can be no recovery in this form of action.
    Answer. “ In the affirmative, with this qualification: that if the jury believe that the plaintiffs were deterred from making the bridge of the required width, and from completing it by the 1st of November 1870, by the defendants, or that these two conditions were waived by the defendants, then these two circumstances' would not prevent the plaintiffs from recovering.”
    2. That as the plaintiffs admit and contend that the width of the bridge was changed with the consent of defendants, the whole contract became parol, .on the well-known principle “ that any alteration of a specialty by parol makes the whole contract parol, and covenant cannot be maintained upon it;” the verdict must be for defendants.
    Answer. “ If the jury find that plaintiffs were deterred or prevented from making the bridge of the required breadth, by the interference of the defendants, or that the defendants waived their right to have it just eighteen feet wide, then the contract has not become a parol contract, and covenant can be maintained.”
    3. That if the jury believe the bridge was not built of the width, nor of the strength, nor within the time stipulated in contract, there can be no recovery.
    Answer. “ This point is answered in the affirmative, with the limitation as to width and time of completion, as contained in the answer to the first and second points.”
    4. That time was of the essence of this contract; and the plaintiffs cannot recover unless the bridge was finished on or before the 1st of November 1870 ; and even if time was waived, there is no averment in the declaration to explain it, and there can be no recovery.
    Answer. “If the jury find as in the answer to the first point, then no averment in the declaration was necessary, and this would not prevent a recovery.”
    5. That as the plaintiffs have only shown part performance of the contract, there can be no recovery in this action, and the verdict must be for defendants.
    Answer. “ This point is answered in the affirmative, excepting in so far as the plaintiffs were prevented by the defendants, or that strict performance was waived by defendants, if they find that fact, or the deviations from the contract were of a trifling nature.”
    These answers of the court constituted respectively the eighth, ninth, tenth, eleventh and twelfth assignments of error.
    In their charge to the jury the court said: “In order to entitle the plaintiffs to a verdict at all in this action, they must have satisfied you that they have substantially performed tbeir part of the contract; without this they cannot recover, and your verdict should be for the defendants; but if you shall find that they have substantially fulfilled it, then your verdict should be in their favor for the balance due them upon the contract price, with interest to this time.”
    This portion of the charge was the thirteenth assignment.
    The verdict was for the plaintiffs for $5101.45, and the defendants took this writ, and alleged that the court erred as indicated in the foregoing assignments.

      George F. Baer, for plaintiffs in error.
    — The proposal was an essential part of the contract, and it was evidence for the purpose of furnishing the data on which to calculate the strength of the bridge and was admissible as part of the res gestee: Miller v. Fichthorn, 7 Casey 252; Hollingshead v. Allen, 5 Harris 275 ; Martin v. Berens, 17 P. F. Smith 462. Parol evidence was likewise admissible for the purpose offered: Chalfant v. Williams, 11 Casey 215.
    Where the acts of the agent will bind his principal his declax’ations will: Story on Agency, § 134-137; Robeson v. Schuylkill Navigation Co., 3 Grant 189; Hannay v. Stewart, 6 Watts 487; Shelhamer v. Thomas, 7 S. & R. 106; Magill v. Kauffman, 4 Id. 317; Hough v. Doyle, 4 Rawle 291; Dick v. Cooper, 12 Harris 217 ; Bank of Northern Liberties v. Davis, 6 W. & S. 285.
    The plaintiff cannot recover upon an avex*ment of genex-al pex’formance. He may recover for part performance, if prevented from full performance by the act of defendant, but in such a case he must declare specially: Harris v. Ligget, 1 W. & S. 301; Alexander v. Hoffman, 5 Id. 382 ; Jordan v. Cooper, 3 S. & R. 564.
    An alteration of a specialty by parol makes the whole parol and covenant cannot be maintained thereon: Carrier v. Dilworth, 9 P. F. Smith 406; Vicary v. Moore, 2 Watts 451; Luciani v. Fire Insurance Co., 2 Whart. 167; Spangler v. Springer, 10 Harris 459 ; McManus v. Cassidy, 16 P. F. Smith 262; Lawall v. Rader, 12 Harris 283.
    The court evidently sought to apply the doctrine of Preston v. Finney, 2 W. & S. 53, and Danville Bridge Co. v. Pomroy, 3 Harris 158, to the facts of this case ; that where a party, acting honestly, and intending to fulfil his contract, perfox’ms it substantially, but fails in comparatively slight particulars, he may recovex', subject to a reduction for the imperfections, and damages sustained by not strictly complying with the contract. Had the -doctrine of these cases been applied, the jury could have passed upon the merits of this controversy. But the court laid down a new rule, viz.: That if the plaintiffs substantially fulfilled the contract, the verdict should be in their favor for the balance due them upon the contract price, with interest to this time.

      William Ward and Samuel L. Young, for defendants in error.—
    The letter of McCarty and his alleged representations, written and made previous to the execution of the contract, are not admissible to vary it. The evidence was not offered for any of the purposes for which parol testimony is admitted to affect a written contract, viz., fraud, accident, mistake, trust, to rebut the presumption of an equity or to explain ambiguities.
    The declarations of Moseley could only bind his principal when within the scope of his authority. 'He was but a special agent for a particular purpose and his declarations were not made at the time of these transactions, but were in relation to a past occurrence and therefore inadmissible: Fawcett v. Bigley, 9 P. F. Smith 411; Pennsylvania Railroad Co. v. Books, 7 Id. 339; Stewart v. Huntingdon Bank, 11 S. & R. 267.
    The opinion of Mr. Wright as to the difference in cost and value of the bridge erected and the bridge required by contract was inadmissible for the same reasons. As Mr. Wright understood nothing of bridge building,- he was not competent to give an opinion as to cost and value. Even if an expert, his opinion would not have been admissible. Where a price is expressly agreed upon for the manufacture of an article, the actual cost or value of the article is not in question.
    As to what is sufficient performance to support an averment of performance, we take the rule to be, that if the party, acting honestly and with a bond, fide intention of fulfilling the contract, perform it substantially: — although there is a variance in some comparatively slight particulars — the plaintiff is entitled to recover on the contract. If the other party is injured by such variance, he is entitled to a deduction therefor from the contract price, but if he assents to such variance with the understanding that no deduction is to be made from the contract price in consequence, and he accepts the work and uses it, no injury was done and the question of a reduction of price does not arise. And it is the same if one party is deterred or prevented from complete performance by the other party : Preston v. Finney, 2 W. & S. 53; Wilhelm v. Caul, Id. 26; Chambers v. Jaynes, 4 Barr 39; see opinion of Judge Grier in this case; Danville Bridge Co. v. Pomroy, 3 Harris 151; Huntingdon & Broad Top Railroad Co. v. McGovern, 5 Casey 78. The action must be covenant unless the specialty has been so altered by parol as to make it a new contract.
   This case was originally argued at Harrisburg, on the 3d of June 1876, Sharswood and Williams, JJ., being absent. An opinion therein ivas delivered by Gordon, J., on the 6th of November following, affirming the judgment. On the 24th of the same month the plaintiffs in error asked for a re-argument, which on the same day was ordered, Mercur and Gordon, JJ., dissenting. The case was re-argued on the 26th of February 1877, by the same counsel, and on the 7th of May 1877 Mr. Justice Sharswood delivered the following opinion:—

We are of opinion that there was error in the rejection of the evidence which forms the ground of complaint in the first assignment.

It appears that on the 22d April 1870, the plaintiffs in error advertised for proposals to be received on the 7th of May following, for the erection of a bridge of wrought iron over the river Schuylkill, near Monocacy Furnace. According to, the terms of this advertisement the bridge was “ to be of sufficient strength and warranted to carrry a load of one ton to each lineal foot. Proposals to specify the greatest strain per square inch in pounds, to which the metal will be subjected in sustaining the weight required, viz., one ton to each lineal foot.” Other particulars are specified not necessary to be now referred to. On the 4th of May, the defendants sent in proposals, which, among other things, stated that they would “ guarantee the bridge to bear a rolling load of one ton to the lineal foot.” They add: “The calculation is as follows for the strength of the bridge: 10,000 pounds allowed per square inch for tensile strain, and 8000 pounds for compression strain.” These proposals were accepted. On the 7th of May the contract was executed, which provided, so far as is material to the question now before us, that the structure was “ to be built and erected in a good, workmanlike manner and of good materials, and is to be completed and ready for use on or before the 1st day of November, A. D. 1870, in accordance with annexed specifications.”- The only specification annexed was a printed copy of the advertisement for proposals. It is plain that the annexing of this advertisement instead of the proposals or a specification drawn up from them was a mistake. The reference in it to the proposals made them a part of it, and the fact that they were to be in the future is explained by the date of the advertisement, and that they were to be received on the 7th of May, the day of the date of the contract. The proposals should have been received in evidence. The parol evidence, that the president of the Bridge Manufacturing Co., the corporation of the defendants, appeared before'the plaintiffs’ board before the award of the contract, and explained the written proposal, and that it was upon that basis the contract was awarded and the agreement entered into, was competent and ought to have been admitted. It infringed no rule which has ever been laid down on the subject of parol evidence to vary written instruments. It did not vary the agreement. It only rendered complete what was apparently deficient on its face. The paper annexed to the agreement as a specification was manifestly incomplete without the proposal, and it required the parol evidence to show that the proposals were in- point of fact the basis of the contract. The - case scarcely requires a resort to the well-established principle that parol evidence can always be given to prove mistake in a written contract, but, if it does, that rule fully covers it. But, in truth, the offer was not to vary the agreement by evidence of a mistake, but to identify and prove a paper which was a part of and incorporated in it by the reference in the specification.

The second and third 'assignments of error are not sustained. The declarations and admissions of Moseley were not within the scope of his authority, which was merely to make a settlement with the plaintiffs. As to the fourth and fifth assignments, the questions proposed to be asked of the witness Wright were not sufficiently specific to justify us in convicting the learned court of error in not allowing them to be put. The witness was not ah expert, and though there are many things palpable to the senses which it does not require an expert to prove, yet in this case the questions should have been so framed as not to involve in the answers opinions which none but an expert would be competent to express. As to the sixth and seventh assignments, no doubt the learned judge would have allowed the questions objected to to be put had the proposals been in evidence. As the case then stood upon the evidence there was no error in the rejection of them. We find no error in the 8th, 9th, 10th, 11th and 12th assignments, but we think there was good ground to complain of that part of the charge which forms the subject of the thirteenth assignment. Undoubtedly if there has been substantial performance the plaintiffs are entitled to recover, but not necessarily the whole contract price. There may be defects in the fulfilment of such a nature as not to preclude the plaintiffs from recovering, but for which the jury would have a right to make a deduction as a compensation to the defendants.

Judgment reversed, and venire facias de novo awarded.


author: Mr. Justice Gordon

text:
    Adams et al. versus Bachert.
    1. In a judgment note containing a waiver of the §300 exemption law, the waiver stands upon no higher plane than the rest of the note.
    2. One who has signed such a note can defend an action on it only on the ground that his signature to it had been obtained by fraud or through some mistake.
    3. B. gave A. his judgment note with a waiver of all exemption from execution, in payment of a pre-existing debt; in an action on the note, at the trial of which B. testified that he did not know, when he signed the note, that it contained such a waiver, the court charged that B. could not have been held to have waived the exemption, unless knowledge of the waiver was brought home to him at the time he signed the note, and that the plaintiff must prove such knowledge by stronger proof than all opposing proof on the defendant’s part: Eeld, to be error, and that B. could only defend on the ground that his signature to the note was obtained by fraud or through mistake.
    February 27th 1877.
    Before Agnew, C; J., Sharswood, Mercur, Gordon, Paxson and Woodward, JJ.

      Error to the Court of Common Pleas of Lehigh county: Of January Term 1877, No. 146.
    This case arose out of proceedings to.open a judgment entered on a judgment note given by George Bachert to Adams, Hal deman & Co. The facts are given in the opinion of the court. On the first question raised in the issue the jury found for the plaintiffs; on the second, they found for the defendant — that he did not know that the note contained a waiver of the $300 exemption law. After judgment on the verdict the plaintiffs took this writ of error.

      W. P. Snyder and Butz £ Schwartz, for the plaintiffs in error.

      Bdwin Albright, contrd.

   Mr. Justice Gordon

delivered the opinion of the court, March 26th 1877.

On the 7th day of November 1874, George Bachert executed and delivered to the plaintiffs, Adams, Hal deman & Co., his judgment note containing, inter alia, a clause waiving the benefit of the Act of Assembly exempting property from execution, and agreeing that all his goods and effects might be taken in satisfaction of the debt, in said note mentioned. Judgment was entered thereon and a fi. fa. issued. Afterwards the court, on motion to open the judgment and stay the writ, directed an issue to try: 1. “ Whether or not the defendant confessed the above judgment2. “ Whether or not the defendant waived the benefit of the law exempting property from execution.” Upon the trial of this issue the learned judge of the court below charged as follows: “ The defendant could only avoid the judgment note by showing that there was some fraud practised upon him in the obtaining of his signature to the note. There is no fraud, because there is no testimony in the case from which you will be warranted to find such a fraud, and, therefore, I instruct you that, as regards the issue to determine whether or not it be the defendant’s act or deed, you must find that in the affirmative. A different question, however, arises as to whether or not the defendant waived the three hundred dollar law. This is a personal privilege given to the defendant under the statute, and I have declared the law to be, in cases tried heretofore, that no man can be held to waive a privilege unless he is informed of that fact. He cannot be held, in law, to have waived the three hundred dollar exemption law, unless knowledge was brought to him at the time he signed the note; and the question then for your determination is: did the defendant know, at the time he signed this note, that it was an exemption note, or, in other words, that he had waived the privilege which the statute conferred upon him ? The plaintiffs assert that the defendant did know this fact. The plaintiffs must prove this by stronger proof than all opposing proof on the part of the defendant.”

That part of the charge which we have italicised is wrong. That part of the note which waived the exemption stood on no higher plane than any other. It was a contract the defendant had a right to make, and it went into the note as part of the consideration: Bowman v. Smiley, 7 Casey 225. When the plaintiffs proved the execution of the obligation, they made out their case — a case that could only be impeached by proof that the signature thereto had been obtained by fraud, or through some palpable mistake or misapprehension of the parties. Neither of these proofs, however, was made. What if Bachert did not know that the paper he executed contained an agreement to waive exemption ? He did not know because he did not inquire. (We speak from his own testimony.) There Avas no fault on part of the plaintiffs or their agent, and they got nothing from the defendant that was not lawful and proper for them to take. Under such circumstances and as against creditors, who are justly entitled to have paid to them the debt represented by the note, the defendant has no standing in either law or equity: Greenfield’s Estate, 2 Harris 496.

The verdict and all proceedings in the issue in this case are reversed and set aside, and it is noAV ordered that the record be remitted to the court beloAV for further proceedings according to law.