author: by Read, J.

text:
    The Farmers’ and Mechanics’ National Bank versus Ryan.
    1. A deposit by a corporation in a bank, is a debt by the bank to the corporation, and is liable to attachment by a judgment-creditor of the corporation.
    2. A corporation making a deposit is on the same footing with the bank as an individual.
    3. Where it is satisfactorily shown that money deposited in the name of one is the property of another, it cannot be attached as the property of the depositor.
    4. Read v. Penrose, 12 Casey 214, affirmed.
    February 11th 1870.
    Before Bead, Agnew, Sharswood and Williams, JJ. Thompson, C. J., at Nisi Prius.
    Error to the District Court of Philadelphia: No. 148, to July Term 1869.
    On the 31st of October 1868 James Eyan issued an attachment execution against The West Branch and Susquehanna Canal Company, in which the Pennsylvania Eailroad Company and the Farmers’ and Mechanics’ National Bank were the garnishees.
    They filed six interrogatories, of which the 2d and 3d were:
    2. Have you had any business transactions with the said defendant? If yea, how did your accounts stand at the time the writ in the above case was served upon you? Was there or was there not at that time, or has there been since, up to the time of your answering, a balance in your hands in favor of the said defendant ?
    3. Were you, at the time the writ in the above case was served upon you, or have you been at any time since, and when, indebted to the said defendant in any manner whatsoever; or did the said defendant hold any bill, bond, note, account, draft, check, due-bill or other instrument of writing then due, or thereafter to become due, upon which you had become in any manner liable ? State the character and amount of such indebtedness and when and how the same arose.’
    To the second interrogatory The Farmers’ and Mechanics’ ics’ National Bank answered “ No, except as to a certain deposit account kept with the said bank, styled and entitled ‘ The West Branch and Susquehanna Canal Company Construction Bonds ’ (coupon account). At the time the writ in the above case was served upon the said The Farmers’ and Mechanics’ National Bank there was due upon the said account by the said bank a balance of $1474.75. The said balance remains unchanged in the hands of the said bank, and it claims to deduct therefrom the sum of one hundred dollars as its reasonable counsel fee according to the statute and Act of Assembly in such case made and provided.”
    The Farmers’ and Mechanics’ National Bank further answered that it had been notified by the defendant that the said defendant claims that the said balance of deposit account in its hands is not liable to attachment execution in its hands, as garnishee, for the following reasons:
    1. That the same, as the said garnishee is notified, is a balance of deposit account of the defendant, .which is a corporation duly chartered under the laws of this Commonwealth, and is necessary to the exercise of its franchises, and therefore not liable to execution : and 2. That the same is a special deposit account, specially and distinctly appropriated to a particuliar purpose, viz.: to the payment of the coupons on certain construction bonds issued by the said defendants, and therefore not liable to execution.
    And the said garnishees, therefore, in these its answers to the interrogatories filed, set forth these grounds of defence, on which it is notified by the said defendants to claim that the balance in its hands is not liable to execution.
    The court refused to enter judgment against the garnishee on the answer. The garnishee pleaded “ Nulla bona.” On the trial the only evidence was the interrogatories and answers. The court instructed the jury to find for the plaintiffs, reserving the question, whether on the answers the judgment should be for the garnishees.
    The jury found for the plaintiffs, and that there were $1374.15 in the hands of the answering garnishees. The court afterwards entered judgment against the garnishees on the question reserved for that amount.
    The Farmers’ and Mechanics’ National Bank took a writ of error, assigning for error the entry of the judgment.

      R. L. Ashhurst and T. Ouyler, for plaintiffs in error.

      A. Briggs, for defendants in error.

      July 7th 1870,
   The opinion of the court was delivered,

by Read, J.

— The first ground assumed by the plaintiffs in error, is, that the deposit accounts of a corporation, however numerous, are all exempted from attachment executions by its judgment-creditors. If this were the law, then a great improvement corporation with a bank account of a million of dollars could set at defiance its small creditors. A deposit in a bank by a corporation is a debt by the bank to the corporation, the bank being the debtor and the 'corporation the creditor, which is liable to attachment execution by a judgment-creditor of the corporation.

This has been the settled law of Pennsylvania since the case of Reed v. Penrose’s Executrix, 12 Casey 214. In the court below this doctrine was affirmed to its fullest extent, in a very able opinion of the learned President Judge of the District Court. In this court Chief Justice Lowrie agreed on all points with the court below, and upon each of the points there was a majority in favor of affirmance, and the judgment was affirmed. This case decided that an execution attachment lay against the deposit of a corporation with a banker, placing the corporation on the same footing with a private individual.

The present Chief Justice and myself did not sit, having been of counsel in branches of the case below, but we both believed the decision right, and I have always regarded it as not only strictly just, but politic and wise.

The law upon the second point has been fully discussed in two cases: Bank of Northern Liberties v. Jones, 6 Wright 536, and Jones v. Bank of Nothern Liberties, 8 Id. 253; and it is clear that where it is satisfactorily shown that money deposited in the name of one person is really the property of another, it cannot be attached as a debt due the depositor. But this is not the case here, for the defendants could at any moment draw the balance out of bank on their own check, and so far as the evidence shows, no person could interpose to prevent it. If so it is liable to the attachment, and the court below committed no error.

If it was so appropriated that the defendants could not touch it, this could have been shown without difficulty, and not being done we must assume that we are in possession of all the facts. In all the cases cited the real ownership of the deposit had been satisfactorily proved. Such is not the case here.

Judgment affirmed.


source: Caselaw Access Project

author: by Agnew, J.

license: Public Domain

text:
    Palmer versus March et al.

    1. Judgment for want of an affidavit of defence may be taken in the District Court of Philadelphia, on a foreign judgment, under the provisions of the Act of March 28th 1835.
    2. Moore v. Fields, 6 Wright 467, recognised.
    February 14th 1870.
    Before Read, Agnew, Sharswood and Williams, JJ. Thompson, C. J., at Nisi Prius.
    Error to the District Court of Philadelphia: No. 103, to July Term 1869.
    This was an action of debt, by Seymour N. Marsh and Joshua Read against B. Frank Palmer and others. The writ issued April 30th 1869, and was served on Palmer only. The cause of action was a judgment recovered against the defendants in the Superior Court of the city of New York, of which an exemplification was filed in this case.
    The exemplification showed that in the New York court the claim of the plaintiffs was for commissions payable to them by the defendants, who were engaged in the manufacture of artificial limbs, under an agreement “ for a commission on each customer sent by these plaintiffs to these defendants, in pursuance of which agreement these plaintiffs sent to the defendants a large number of patients, whose orders were received and filed by the defendants to a large amount, and to the great pecuniary gain and benefit of these defendants, on account of which these plaintiffs have received no compensation whatever.” And that “ at the request and for the benefit of these defendants, the plaintiffs inserted, published and circulated the defendants’ advertisements in the advertising books, periodicals, advertisements, bills and circulars of the plaintiffs, in compliance with the request and dictation of these defendants, and to their great pecuniary advantage and gain, and at a great cost and expense to these plaintiffs.”
    The Superior Court entered judgment against the defendants for $2010.78, for the recovery of which this suit was brought.
    The defendants filed an affidavit of defence, containing a num: her of specifications not necessary to state. The plaintiffs entered a rule for judgment for want of a sufficient affidavit of defence.
    The District Court, on the 19th of July 1869, made the rule absolute, and entered judgment against the defendants for $2097.95.
    The defendants took a writ of error, and, amongst other specifications, assigned for error, that the court erred in permitting judgment to be entered for want of a sufficient affidavit of defence, when the copy filed was an exemplification of the record of the court of another state, which record did not show such a claim as would entitle plaintiffs to judgment under Act of March 28th 1835, for want of an affidavit of defence.

      July 7th 1870,

      J. T. Pratt, for plaintiff in error,
    referred to Act of March 28th 1835, § 2, Pamph. L. 89, Purd. 337, pl. 8; Lynch v. Rogers, 1 Troub. & H. 385; Reed v. Keech, Id. 384; McCleary v. Faber, 6 Barr 476; Walker v. Delaware Ins. Co., 1 Philada. R. 192; Wall v. Dovey, 10 P. F. Smith 212.

      K. Sanson and D. Dougherty, for defendants in error,
    cited McCleary v. Faber, supra; Moore v. Fields, 6 Wright 467; Luckenbach v. Anderson, 11 Id. 123.
   The opinion of the court was delivered,

by Agnew, J.

— If this were an original question, perhaps it would not be difficult to show that a foreign judgment does not fall within the District Court law as to affidavits of defence. But the case of Moore v. Fields, 6 Wright 467, is directly in point, and without overruling it we must sustain this judgment. Large interests may rest upon that case as a precedent, which would be overturned by our refusing to follow it.

Judgment affirmed.


text:
    Duffy versus Ogden.
    1. The general rule as to computation of time is, that when by an Act of Assembly a given number of days is allowed to do an act, or the act may be done within a given number of' days, the day on which the rule is taken or the decision made is excluded.
    2. A lease was for one year ’from the 25th day of March: Held, that under the Act of December 14th 1863 (Landlord and Tenant) notice to quit given on the 25th of the next December was in time.
    3. The landlord’s right of entry did not begin until the first moment of the 25th of March.
    4. The notice under the Act of 1863 is governed by the language of the act.
    February 14th 1870.
    Before Read, Agnew, Sharswood and Williams, JJ. Thompson, C. J., at Nisi Prius.
    Error to the Court of Common Pleas of Philadelphia: Of July Term 1869: No. 162.
    This was a proceeding instituted, April 2d 1869, before Aider-man Delaney, by Anning A. Ogden against Thomas Duffy, to recover possession of a messuage, &c., which had been leased by the'plaintiff to the defendant for one year from the 25th of March 1868. The record of the alderman showed that on the 25th of December 1868 Ogden gave notice to Duffy to deliver to him possession of the premises at the end of the term. Other necessary proof having been given, the alderman gave judgment that the defendant deliver up the premises, &c.
    The proceedings were removed by certiorari into the Court of Common Pleas, where these exceptions were filed:—

      March 7th 1870,
    “ 1. The record does not set forth that three months’ previous notice had been given by complainant to defendant of complainant’s desire to repossess said premises at the end of said term.
    <c 2. Due proof was not made before said alderman that three months’ notice to remove, had been given to defendant previously to the ending of said term.”
    The court below (Brewster, J.,) affirmed the proceedings of the alderman. Duffy took a writ of error, and assigned this affirmance for error.

      C. D. Freeman, for plaintiff in error,
    cited Act of December 14th 1863, § 1, Pamph. L. (1864) 1125, Purd. 1341, pl. 1; Marys v. Anderson, 2 Grant 446; Rich v. Keyser, 4 P. F. Smith 89; Cromelien v. Brink, 5 Casey 524.

      A. S. Smith, for defendant in error,
    referred to the same Act of Assembly and the same cases; also to Green’s Appeal, 6 W. & S. 327.
   The opinion of the court was delivered,

by Agnew, J.

— This was a proceeding under the Landlord and Tenant Act of 14th December 1863. It is objected that three months’ previous notice of the landlord’s intention to repossess himself of the demised premises was not given. The last day of the lease was the 24th day of March 1869, and the notice was given on the 25th day of December 1868. Was this three months’ notice ? There has been much clashing of opinion as to the legal period of notices, and many fine distinctions drawn which need not be noticed in this case, as the question depends on the language of the act itself for its solution. The cases will be found fully collected and considered by Justice Porter in Cromelien v. Brink, 5 Casey 522. The general rule now observed is, that when by an act of the legislature a given number of days are allowed to do an act, or it is said an act may be done within a given number of days, the day in which the rule is taken or the decision made is excluded. This is the rule stated in Gosweiler’s Estate, 3 Penna. 201, and reaffirmed in Cromelien v. Brink. Thus where a time is given for an appeal from a judgment, or for its revival, the day of the judgment is not counted. But the previous notice required by the Act of 1863 is measured by the terms of the act itself, as will be seen by its language. The proof to be made by the landlord, inter alia, is, “ that the term for which the premises were demised is fully ended, and that three months’ previous notice had been given.” Previous to what? The act answers — previous to the determination of the lease. But when does the lease fully end and determine ? Certainly not until the last moment of the last day of the term, which in this case was the 24th day of March. The landlord’s right of re-entry did not begin, therefore, until the first moment of the 25th day of March had arrived. This correspond.? with the general custom and understanding. Leases beginning on the 1st day of April expire on the 31st day of March in the following year; the old tenant giving up and the new tenant coming in on the 1st day of April without a gap in the possession. It is obvious, therefore, that the 24th day of March counted a whole day when its last moment had arrived. Counting the 25th day of December, on which the notice was given, and the 24th day of March, when the lease had expired, the three months were fully ended and expired before the landlord’s right of re-entry had accrued. The only defect of time which could be alleged is in the 25th of December, the day on which notice was given. But that is also to be regarded as a whole day, for the law takes no account of the fractions of a day in the computation of time. Service on that day was one day’s notice, and therefore the three months’ notice previous to the termination of the lease was complete and fully ended. The next day, March 25th, was the beginning of a new period.

The judgment is therefore affirmed.


text:
    Giltinan versus Strong.
    1. G. told T. that he wanted to rent her house 111 Strawberry street for a friend and would become surety for the rent. Shortly after M. went into the house, G. said he had put M. there. G. and M. were together after-wards when this paper was prepared and signed by G.8: “April 15th 1866. I hereby become surety for rent of house 111 Strawberry, at §1200 per annum, payable monthly from this date.” In an action of assumpsit against G. charging him directly for the rent, Held, that the paper was evidence.
    2. Parol evidence is admissible to prove the consideration of the original liability in an action on a written promise to pay the debt of another.
    3. S. recovered judgment against M. for the rent. Held, that the record of the judgment was not evidence in an action against G. on his promise to be surety.
    4. “Parties” includes all directly interested in the subject-matter, who have a right to defend or control the proceeding and appeal.
    5. Those not having these rights are strangers.
    6. A surety in an independent instrument is no party who could appear and control an action against his principal, or appeal.
    7. Privity is mutual or successive relationship to the same right of property.
    8. The privity of the surety with his principal is in the contract not in the action. _
    _ 9. The surety is bound for the acts or omissions of the principal for which he is pledged, and in this respect only the principal represents him.
    10. This is the criterion of the competency of the principal’s declarations or admissions.
    11. In official bonds or bonds of indemnity the surety submits himself to the acts of the principal and to the judgment as a legal consequence falling within the scope of the suretyship.

      February 14th 1870.
    Before Read, Agnew, Sharswood and Williams, JJ. Thompson, C. J., at Nisi Prius.
    Error to the District Court of Philadelphia: No. 203, to July Term 1869.
    Catharine Strong brought an action of assumpsit in the District Court of Philadelphia, to December Term 1866, against David Giltinan. The first count of the declaration was, in consideration that the plaintiff at the defendant’s request, would let to George R. Maguire a house for one year, at $1200 per annum, the defendant in writing promised that he would pay the rent if Maguire did not; that the plaintiff rented to Maguire, who did not pay. Second count was, that if the plaintiff would let the house to Maguire, the defendant promised to pay the rent; also the common counts.
    On the trial, before Hare, P. J., the plaintiff proved by one of her agents that the defendant said that he wanted the plaintiff’s house, No. Ill Strawberry street, for a friend of his; that Maguire went into the possession of the plaintiff’s house; the defendant told witness that he had put Maguire there:
    The plaintiff then offered in evidence the following paper:—
    “April 15th 1866. I hereby become surety for rent of house 111 Strawberry, at $1200 per annum, payable monthly from this date. “ David Giltinan.”
    The defendant objected to the offer; it was received, and a bill of exceptions sealed.
    Another witness testified as to the signing of the paper, and that in two or three days afterwards Maguire moved into the house and continued in it until December 1866.
    The defendant gave evidence by Maguire, that in July he had tendered to the plaintiff a surrender of the house, she said he would be satisfied with what he could pay, she would not hold him to $100 per month; the defendant then said he would no longer be responsible for the rent, and plaintiff said she would not look to him. In November witness said he would stay no longer; plaintiff said she was just as well pleased, and he sent her the key. He testified that he had paid plaintiff $420 up to September 26th 1866.
    The plaintiff in rebuttal offered in evidence the record of a suit by her against Maguire for the same rent, in which there was judgment against him for $505.93; an execution issued, and return “ nulla bona.”
    The defendant objected to the offer; it was received and a bill of exceptions sealed.
    The defendant’s points were:—
    1. The paper offered in evidence by the plaintiff is not sufficient to charge the defendant with Maguire’s debt.

      March 3d 1870,
    2. The evidence is not sufficient to maintain the action, and the verdict should be for the defendant.
    3. The record of the suit and judgment against Maguire is not evidence to establish the debt as against the defendant in this case.
    The court declined to charge as requested in defendant’s points.
    The verdict was for the plaintiff for $443.10.
    The defendant took a writ of error, and assigned for error the refusal of his points and the admission of the evidence objected to.

      Ii. P. White (with whom was George IT. Earle), for plaintiff in error.
    — A surety cannot be bound by a judgment in a suit in which he could not be heard, and the record against Maguire would not be evidence against Giltinan; it was strictly res inter alios: Gilbert’s Law of Ev. 29; Sharswood’s Starkie on Ev., § 319; 1 Taylor on Ev., § 710 : 2 Id. 1429; 1 Phillips on Ev. 526; 2 Id. 133; 1 Greenl. on Ev. 527, 538; Duchess of Kingston’s Case, 20 How. State Tr. 35; King v. Norman, 4 C. B. 884; Powell v. Layton, 2 N. R. 371; Griffin v. Brown, 2 Pick. 304; Pritchard v. Hitchcock, 6 M. & G. 151; Kip v. Brigham, 6 Johns. 158; Case v. Reeves, 14 Id. 79, 81; Maybe v. Avery, 18 Id. 352; Clark v. Montgomery, 2 Barb. 464; Douglass v. Howland, 24 Wend. 35; Coun v. Osgood, 15 Barb. 583; Snell v. Allen, 1 Swan (Tenn.) 208; Payne v. Coates, 1 Munf. 373 ; Jackson v. Veddes, 3 Johns. 8; Twambly v. Henley, 4 Mass. 441, 442; Wood v. Stephen, 1 S. & R. 175; Johnson v. Bowen, 1 Wash. R. 187 ; Cowles v. Harts, 3 Conn. 516; Sturgis v. Beach, 1 Id. 507; Turpin v. Thomas, 2 Hen. & Munf. 139, 147; Fletcher v. Jackson, 8 Vermt. 588 ; Respublica v. Davis, 3 Yeates 128; Camack v. Com’th., 5 Binn. 184; Moores’ Appeals, 10 Casey 411.
    The declarations of a principal to be evidence against a surety, must be made at the time and as part of the transaction in which the liability is incurred: Evans v. Bartlett, 5 Esp. 26; Smith v. Whittingham, 6 C. & P. 78; Cullen v. Newlin, Manning’s Dig. N. P. 137; More v. McCullough, 5 Hill 131; Jackson v. Griswold, 4 Id. 522; The King v. Norman, 4 C. B. 883; Moores’ Appeals, 10 Casey 411. The agreement was a suretyship: Allen v. Hubert, 13 Wright 260; Marburger v. Potts, 4 Harris 9.

      D. W. Sellers and O. I). Freeman, for defendant in error.—
    In a written promise to pay the undertaking of another, the consideration of the original undertaking need not appear: Leonard v. Vildenburgh, 8 John R. 29; Shively v. Black, 9 Wright 345.
   The opinion of the court was delivered,

by Agnew, J.

— The memorandum signed by David Giltinan for the payment of the rent of the house in Strawberry street, related directly to the subject-matter of the action, and was not irrelevant. There being no special objection to its effect that became a matter of instruction of the court to the jury.

Under the evidence, we cannot say the writing was not sufficient to support the action. The first count in the declaration charges a direct promise of the defendant to pay the rent, and there was evidence to go to the jury in support of it. The agent of Mrs. Strong testified that the defendant asked him whether there was a tenant in the house, and said he wanted it for a friend. Both Giltinan, the defendant, and Maguire, were together when the memorandum was signed at Mrs Strong’s. A few days afterwards Maguire went into possession, and Giltinan told the witness that he had put Maguire there; the evidence tended to show that the lease to Maguire was made at Giltinan’s request. The language of the paper is not inconsistent with a primary liability on the part of Giltinan: I hereby become surety for the rent of house in Strawberry St., at $1200 per annum, payable monthly from this date.” No person is named or referred to as the principal, nor is the rent stated to be that of another. The language 'can as well apply to a primary contract of Giltinan for a lease made at his request, as to a promise to pay the debt of another. Though the word surety is used, it is obvious from the absence of any other name or reference to the debt of any other person, that the writing is not necessarily a promise to pay the debt of another. It needs parol evidence to show that it is. The evidence of direct liability carried the writing properly to the jury. Arnold v. Stedman, 9 Wright 186, is sufficient authority for this; see also Paul v. Stackhouse, 2 Wright 305; Malone v. Keenan, 8 Id. 107. If parol evidence to prove consideration he needed, it can be adduced: Schively v. Black, 9 Id. 345.

But we think the court erred in holding that the record of the judgment against Maguire was competent evidence against Giltinan. If the liability is direct and primary, it is clear this is so, and if the writing is viewed as a mere undertaking of suretyship, still it was error; Giltinan was no party to that action, had no notice to defend it, and could not be brought into defence of it by the plaintiff. The plaintiff’s remedy against him could he only on his own promise. A surety may give notice to his principal who owes him this duty to defend him, but it would be a novelty if the principal could call in his surety who owes no such duty, to defend him. Giltinan was therefore in no sense either a party ¡or privy to that action. Under the term parties (says Mr. Greenleaf, in his Law of Evidence, § 524), “ the law includes all who were directly interested in the subject-matter, and had a right to make defence or to control the proceeding, and to appeal from the judgment. The right involves also the right to adduce testimony, and to cross-examine the witnesses adduced on the other side. Persons not having these rights are regarded as strangers to the cause.” A surety in a separate and independent instrument is no party who could appear and control the separate action against his principal or appeal from the judgment. Nor is there a legal privity. Privity, says Mr. Greenleaf, § 189, denotes mutual or successive relationship to the same right of property. In none of the classes enumerated, as in estate, in blood, and in law, does the case of a surety fall in reference to a creditor’s action. It is the right to represent, which creates privity in law as between ancestor and heir, decedent and administrator, &c., but clearly the principal, in an action against himself alone, cannot represent his surety. If he could, then he could bind his surety for an extinguished or paid debt by a confession or a default. The privity of the surety with his principal is in the contract alone and not in the action. For the acts or omissions of the principal to which the surety pledges himself in his contract, he is bound, and it is only in this respect the principal represents his surety. This is the criterion of the competency of the principal’s declarations or admissions. Where these form a part of the acts or omissions of the principal for which the surety is bound, they constitute portions of the res gestee, and may be evidence against the surety. But beyond this line clearly the surety cannot be affected by the acts or admissions of his principal, for he is not represented by him: 1 Greenleaf’s Ev., § 187. The acts or omissions, or admissions of the principal in an action at law against himself, clearly do not represent the surety in any wise. The liability of the surety is only for the unpaid rent in this case. Now clearly, the principal cannot, by any act, admission or omission in such action, increase the surety’s liability beyond that extent. Nor are the interests of the principal and surety always identical. If the interest of the principal induce him to withdraw a payment made to the rent and apply it to another debt, the judgment against the principal would not represent the true balance against the surety. In the very case before us the payments proved would reduce the judgment against the principal more than one hundred dollars. If we analyze the judgment we discover that it cannot affect the surety. It speaks simply the voice of the evidence, and is but the determination of the tribunal of the result of the evidence. But clearly the principal does not rep*resent his surety in marshalling and controlling the evidence. His interest, we have seen, may be different from that of his surety, and induce him to withhold evidence to which the surety would be entitled.

No argument can be drawn from the cases founded on official bonds, bonds of indemnity, &c. They arise from the terms of the bond, or terms of the indemnity, whereby the surety submits himself to the acts of the principal and to the judgment, as itself a legal consequence, falling within the scope of the suretyship. Such are the cases of Masser v. Strickland, 17 S. & R. 354; Musselman v. Commonwealth, 7 Barr 240; Commonwealth v. Evans, 1 Watts 437; and others of similar character. The dissenting opinion of Gibson, J., in Masser v. Strickland, while ineffectual against the peculiar terms of a constable’s bond, is conclusive as an argument against the competency of the judgment as evidence in an ordinary case of suretyship. If we look for decisions more germane to the present case we shall find them in Cannuke v. Commonwealth, 5 Binn. 184; Moore’s Appeal, 10 Casey 411; see also 1 Greenleaf, §§ 522, 523, 524.

We think the court erred, therefore, in admitting the judgment against Maguire as competent evidence against Giltinan, of the sum due upon the rent.

Judgment reversed, and a venire de novo awarded.


author: Sharswood, J.

text:
    Wright versus Burbank.
    1. A principal instructed agents conducting his plantation: “it is expressly understood that your purchases shall be for cash.” This was communicated to a merchant with whom the agents dealt. Held, that goods sold by him to the agent on credit, were sold on the personal credit of the agent.
    2. The principal might ratify the act of the agent.
    3. The principal knowing that goods had been purchased by the agent, for-his plantation on credit, authorized another agent to settle the claim. JHdcl, to be evidence of ratification.
    4. Circumstances in this case evidence of ratification.
    February 14th and 15th 1870.
    Before Read, Agnew, Sharswood and Williams, JJ. Thompson, C. J., at Nisi Prius.
    Error to the District Court of Philadelphia: Of July Term 1869, No. 207.
    This was an action of assumpsit brought by Edward W. Burbank against - James A. Wright, for goods, &c., furnished by the plaintiff to Taylor and Bacon, agents of the defendant in the cultivation of two plantations in Louisiana, known as “ Orange Grove ” and “ Fazende,” which the defendant held by lease. The bill of particulars filed by the plaintiff exhibited a claim for $6815.85, “ balance due on book account .for goods sold and delivered, money advanced and expended by plaintiff to Taylor and Bacon, agents of the defendant James A. Wright, &c., between February 15th 1865 and May 9th 1866.”
    The agency was constituted by the following letter:
    Philadelphia, Feb. 11th 1865.
    Messrs. Taylor & Bacon, New Orleans, Gents.
    A party of friends having agreed to raise the sum of $20,000, in addition to the stock of horses, mules and agricultural implements which may be left over from the enterprise of 1864, for the purpose of cultivating cotton lands in the state of Louisiana, I do now and hereby confirm your appointment as my agents to carry out the above-named purpose. My chief object in this agency being to raise a crop of cotton on the lands leased, you will therefore limit your action chiefly to that, making no purchases or sales or contracts save such as are closely connected with, or will aid and promote said purpose, it being expressly understood that your purchases shall be for cash, and that you shall pay promptly on delivery of all goods purchased. In pursuance of the purpose above named, you will, if not already done, procure on lease in suitable locations, a sufficient quantity of land suitable for the culture of cotton, and in quantity to suit the stock on hand, thoroughly prepare the land, plant the same in cotton seed for the crop, and in such cereals as may be desirable for the use of the stock and hands to be employed. I cannot at this time and at this distance from the scene of operations, give you very specific instructions for your government, but you must keep full and accurate accounts of all your receipts and expenditures, and from time to time transmit me copies of the same by mail, and you will by letters, at intervals not exceeding two weeks, keep me fully informed of your proceedings, and for your good and faithful services your compensation shall be such as has heretofore been agreed upon. Tours respectfully,
    Jambs A. Wright.
    Burbank the plaintiff was a grocer in New Orleans. In March
    1865, Taylor being at Burbank’s was asked by him where he intended to procure his plantation supplies. Taylor told him his instructions were to buy exclusively for cash. He asked Taylor to make his purchases of him, and he would open an account on a cash basis, “ to be retired at any moment when the money was wanted.” Taylor told him the money was to come from a party of gentlemen in Philadelphia, of whom he named the defendant as one. Taylor and Bacon afterwards bought goods in the name of both plantations under the arrangement spoken of. There was evidence that the letter of the defendant of February 11th 1865, to Taylor and Bacon had been shown to the plaintiff.
    E. A. Yorkewas afterwards appointed agent for the defendant, by the following letter:
    “Philadelphia, Jan. 29th 1866.
    Edward A. Yorke, Esq., New Orleans.
    Dear Sir: I had the pleasure on the 25th of stating that I would send you instructions in regard to the disposition of property mules, agricultural implements, &c., &c., most of which are on the two plantations of ‘Orange Grove’ and ‘Fazende,’ which have been managed by my agents Messrs. Taylor and Bacon for about two years past. I now enclose you an inventory, &c. * * * The whole property as you will observe amounts to $23,187.94. Mr. Taylor does not hesitate to say that the property is worth fully this amount; but if he and Mr. Bacon or either of them arrange so that we shall receive $20,000 for this property, * * * you are authorized to dispose of it to them, or whichever of them is able to make this arrangement.
    “ Mr. Taylor, when here, reported debts due to three parties in New Orleans, Messrs. Weed, Witters & Co., Wallace & Co. and E. W. Burbank, in all about $8000, mostly to the latter. If in the above arrangement this indebtedness is paid off or satisfied as between the three firms named above and Messrs. Taylor and Bacon, agents for ‘ Orange Grove’ and ‘ Fazende’ plantations, against whom I suppose the charges appear, so that there may remain no claim against me or any of the other parties associated with me in interest, then that amount may be considered as equivalent to cash. * * * I enclose you herein a paper signed by the different parties interested confirming the authority which I herein give as treasurer and manager.”
    Burbank, on 28th of May 1866, wrote to Wright as follows:—
    “ You are aware, I suppose, of your business transacted with me by your agents, Messrs. Taylor and Bacon, of the Orange Grove and Fazende Plan. I have rendered the accounts of both places to Mr. E. A. Yorke, and I think are ere this in your possession. Being at. the present time very much in need of funds, I would request of you to remit balance of accounts, say
    Orange Grove .... $3763.94
    Fazende ..... 2638.51
    $6402.45
    and interest thereon as per accounts. Mr. Taylor thought at one time that there would be enough to sell on both places to liquidate the debt. Undoubtedly there would have been enough had the sale been made at a much earlier period, but it not having been so, the property sold and payments of all not having been collected yet, leaves the above amount now due.” * * *
    To which Wright, the defendant, replied June 15th 1866 :—
    “ Your letter of 28th ult. is received and contents noted; I can only say in reply that up to the present time I have no evidence whatever that the bills alluded to by you were made on my account. When Mr. Taylor was last here he stated that some debts had been incurred but the amounts he named, and those of the bills rendered so widely differ, that it is impossible to believe that there is not some mistake, and I have therefore directed Mr. Yorke to pay no more money upon any of them until further advised. Neither Mr. Taylor nor Mr. Bacon ever had any authority from me to contract debts; on the contrary they received special written instructions to pay cash for everything they purchased on my account.” '
    Yorke testified that the accounts of the plaintiff with Taylor and Bacon came under his notice; that on the 19th of April. 1866 he paid Burbank, on account of Taylor and Bacon’s indebtedness $700, and on the 27th of October 1866 he paid $800; the money was derived from cash and notes delivered to him by Taylor and Bacon; he received authority from the defendant to settle this claim, and to effect an amicable settlement of the account between the plaintiff and Taylor and Bacon ; the plaintiff and Yorke sold the stock, &c., of the plantations, the cash realized was paid to Burbank and another New Orleans creditor; Yorke pledged to the plaintiff the crop of 1866, from the Eazende plantation, in payment of his claim, and if that should not be sufiicient, the proceeds of stock and implements which Yorke sold to Taylor.
    The court' (Stroud, J.) charged:—
    “ The claim is for goods furnished to these plantations. Mr. Wright conceived the design of carrying two plantations in Louisiana. Such an enterprise required the agency of some one on the spot. Who should be that agent was a very important matter. Mr. Wright had the right to limit the power of his agents, and if the instructions to his agents were made known to the person the agent dealt with, he was bound by them. Now these instructions were contained in the letter of Wright to Taylor and Bacon. This letter of instructions governed the agents, and having received it, Taylor details in his deposition what he did under it. He had become connected with the plaintiff in some previous transactions, and he either exhibited the letter of instructions to him, or at least fully informed him of the nature of it, and particularly that he was limited to buy only for cash: and the first thing the plaintiff did was to offer to sell on ninety days’ credit. The question for you to consider is, what was the understanding at the outset; it was to be an open account with Taylor and Bacon, and so to continue to the end of the chapter. You will consider whether any such authority was given to the agents to allow them to buy on credit. [But Mr. Wright might ratify their unauthorized act. The plaintiff says that these acts have been ratified by what defendant has done; he received the products of the plantations — this would not ratify. I leave it to you to say further, by the fact of appointing Mr. Yorke the agent, and his acts. You will have the document to see if you can draw from it any evidence of ratification. I leave the whole matter of ratification to you.”]
    The verdict and judgment were for the plaintiff for $6924.39.
    The defendant took a writ of error, and assigned the portion of the charge in brackets for error.

      A. S. Letchworth, for plaintiff in error.
    — To ratify the unauthorized act of an agent it must be done with a full knowledge of the facts: Orwing v. Hall, 9 Peters 09.

      C. H. Hornor, for defendant in error.
    — The defendant knew the manner in which his agents did business with the plaintiff, and not having repudiated them, is estopped: Hill v. Epley, 7 Casey 334; Story’s Agency, §§ 85, 253, 258; Beaty v. Lycoming Ins. Co., 2 P. F. Smith 456.
   The opinion of the court was delivered by

Sharswood, J.

— The defendant below employed Taylor and Bacon to lease and conduct for him, and others associated with him, one or more cotton plantations in Louisiana. He instructed them to make their purchases for supplies only for cash, and this instruction was communicated to the plaintiff, from whom, however, the agents procured goods on credit. It is not to be questioned, under these circumstances, that the plaintiff thereby is to be considered as having looked to the personal credit of the agents and not to the principal for payment. Their unauthorized act, however, was susceptible of ratification, and the only point arising upon this record is the exception to the charge of the learned judge in leaving that question to the jury. It is contended that there was no evidence which would justify such an inference. That what took place would amount to a ratification is evident if the principal was fully aware of all the facts. Without such knowledge it must be conceded that it would be unavailable: Orwing v. Hall, 9 Pet. 609. That he knew that the goods were obtained on credit is very clear. In his letter of January 29th 1866 to Mr. Yorke he said: “ Mr. Taylor, when here, reported debts due to three parties in New Orleans, Messrs. Weed, Witters & Co., Wallace & Co., and E. W. Burbank, in all about $8000, mostly to the latter.” Mr. Burbank wrote to him under date of May 28th 1866, informing him of the amount of his demand, and requesting him to remit. In his answer, June 15th 1866, he says, “ Up to the present time I have no evidence whatever that the bills alluded to by you were made on my account;” and then proceeds to deny any authority of Taylor and Bacon from him to contract debts. With the knowledge then of this claim upon him, grounded on his liability for the contracts of Taylor and Bacon as his agents, he subsequently authorized Mr. Yorke, according to the testimony of that gentleman, to settle it. Mr. Yorke made payments to Mr. Burbank on account, as he said, of alleged indebtedness of Orange Grove and Fazende plantations, belonging to Mr. Wright. Indeed it does not appear to have been questioned that the supplies furnished by the plaintiff went to these plantations. After the knowledge that debts had been incurred by bi's agents for them, be authorized a settlement, and the settlement or part of it was, according to the testimony of Mr. Yorke, that “ the Eazende plantation was allowed to go on raising a crop, Mr. Taylor taking the stock and impleménts belonging to the same at a certain amount, for which he gave James A. Wright a lien on the cotton crop of 1866; also on the stock and implements aforesaid. This was done with the knowledge and consent of E. W. Burbank: I giving him a verbal promise that the whole proceeds of the cotton crop of 1866, and if that was not sufficient, then the stock and implements should be sold, and the amount so collected paid to E. W. Burbank to liquidate the alleged indebtedness of Orange Grove and Fazende plantations, prior to 1st January 1866.” It is urged, however, that this is no evidence — that he knew that the debt had been incurred on his credit contrary to his instructions. This does not seem to be absolutely necessary. It is quite sufficient that he knew it had been incurred by his agents in the course of his business for his benefit; and having received that benefit, if he recognised the claim as fairly entitled to be paid out of his property, a jury might well infer a ratification of the contract made by his agents, though originally without authority. We think, therefore, that the learned judge committed no error in submitting the question to the jury.

Judgment affirmed.


text:
    Wolf versus Commonwealth ex rel. Schleiffer.
    1. The Act of June 14th 1836 (Mandamus) does not give jurisdiction to the Court of Common Pleas in cases of unincorporated associations.
    2. The jurisdiction of the Court of Common Pleas is limited to the cases mentioned in the act.
    February 15th 1870.
    Before Read, Agnew, Sharswood and Williams, JJ. Thompson, 0. J., at Nisi Prius.
    Error to the Court of Common Pleas of Philadelphia: Of July Term 1870, No. 212.
    The proceedings in the court below, which commenced July 21st 1869, were by the Commonwealth, ex relatione Abraham Schleiffer, against John E. Wolf, Jacob Ihrig and Adam Ihrig, Trustees, &c., of Columbus Grove, of the United Ancient Order of Druids.
    The proceedings were in the first instance originated by a case stated, in which Schleiffer individually was the plaintiff against the same defendants.
    In order to give the court jurisdiction, it was agreed that proceedings by mandamus should be substituted, a petition filed and return made as to an alternative mandamus issued in accordance with the prayer of the petition.
    The relator, therefore, filed a petition setting forth the existence of a beneficial association known as the United Ancient Order of Druids, composed of a Grand Grove and divers subordinate groves, of which Columbus Grove is one; that said Grove is governed by certain rules, &c.; that the object of the Order is .by weekly contributions and dues to be paid by each member, to establish a fund and pay weekly benefits to members in good standing during sickness; that Columbus Grove is unincorporated; that the petitioner had been a member of the Grove in good standing since 1854; that in September 1868 the petitioner had by the Grove been suspended and excluded from his rights and privileges as a member; that before his suspension he was sick and entitled to a weekly sum of $4, from September 24th 1868, which the Grove refuses to pay. He prayed that he might be restored to membership, and that a mandamus issue to the defendants and the other officers and members of Columbus Grove to restore him to membership, and grant him all his rights, benefits, &c.
    The return set out the constitution, &c., of the order and of Columbus Grove, that the petitioner had been suspended for twelve months by Columbus Grove, from which he appealed to the Grand Grove, which sustained the action of the Columbus Grove; the return also set out the minutes of the Grand Grove and Columbus Grove, showing the grounds of the suspension. The statement of these grounds is not necessary to an understanding of the decision of the Supreme Court.
    The following agreement was made by the parties to the proceeding :—
    “ If the court should be of opinion that its jurisdiction extends to adjudication upon these facts, and that the plaintiff is lawfully entitled to receive the said benefits, judgment shall be entered for the plaintiff for a sum equal to the amount of four dollars per week to be computed from the 24th day of September 1868, until the day of judgment. But that if the court be of opinion that the said plaintiff is not lawfully entitled to receive the said benefits, judgment shall be entered for the defendants with costs.”
    The court decided that the “ petitioner be restored to all his rights and privileges as a member of said Columbus Grove, &c., and that the respondents do pay to the petitioner the sum of $168, being the amount of damages sustained by him, the petitioner, by reason of said suspension from membership by Columbus Grove.”
    On writ of error by the defendants, they assigned the decree for error.

      J. S. Sloan (with whom was J. Goforth), for plaintiff in error.—
    The power of the Court of Common Pleas, under the Act of June 14th 1836, § 18, Pamph. L. 626, Purd. 688, pl. 1, does not relate to unincorporated societies.
    July 7th 1870,

      F. K. Fitman, for defendant in error.
   The opinion of the court was delivered,

by Agnew, J.

— This anomalous case appeared in the Common Pleas first in the form of a case stated for the opinion of the court. It was then converted into a petition for a writ of mandamus, the case stated to stand as a return to the writ, and thereupon a final judgment was rendered, restoring the plaintiff to his membership in the Columbus Grove, No. 3, of the United Ancient Order of Druids, and awarding payment of his dues in arrear.

The Columbus Grove is an unincorporated association, and does not fall within the jurisdiction of the Court of Common Pleas. The 18th section of the Act of 14th June 1836, Pamph. L. 621, confers on the Court of Common Pleas the power “ to issue writs of mandamus to all officers and magistrates elected or appointed in and for the respective county, or in and for any township, district or place within such county, and to all corporations being or having their chief place of business within such county.” This delegation of jurisdiction is specific, and unlike that to the Supreme Court, which gave to the latter, “ besides the powers hitherto possessed,” the power to issue such writs to any other court or tribunal constituted by the authority of the laws of this Commonwealth, in all cases where such interposition shall, in the discretion of the said court, be necessary to the advancement and due administration of justice: § 10, art. 16, June 1836, Pamph. L. 787. The power of the Common Pleas is, therefore, limited to the cases mentioned in the act.

I find no instance of a writ of mandamus issued by the Court of Common Pleas to individuals in their private relations, or to associations having no chartered powers, which has reached this court and been supported. The writ in this case was not within the power of the court, and the judgment was therefore erroneous.

Judgment reversed.


author: by Sharswood, J.

text:
    McCalla versus Ely.
    1. A mortgage dated in 1839 was “ to pay 55000 lawful silver money with lawful interest.” Judgment for the amount due “ in lawful silver money of the United States” was proper.
    2. A mere agreement that such mortgage should be paid in legal tenders was without consideration.
    3. Interest is to be paid in the same kind of money as the principal.
    4. Unless the contrary is expressed, interest is a mere portion of the principal debt.

      February 15th 1870.
    Before Read, Agnew, Sharswood and Williams, JJ. Thompson, C. J., at Nisi Prius.
    Error to the District Court of Philadelphia: No. 68, to January Term 1870.
    This was a scire facias sur mortgage, issued July 3d 1869, by William Ely, assignee, &c., against Edwin H. McCalla, administrator, &c., of W. L. Stickney, deceased, with notice to the terretenants.
    The mortgage and the bond accompanying it were dated in February 1839 ; the bond was conditioned for the payment of “ $5000 lawful silver money of the United States, on February 26th 1840, together with lawful interest for the same, to be paid half-yearly.” McCalla himself became the owner of the land covered by the mortgage in January 1869. On the 17th of September 1869, McCalla, as terre-tenant, filed an afSdavit of defence, “ that he purchased said property at sheriff’s sale in January last, subject to a mortgage of $5000. That the interest on said mortgage had been paid and received in legal tender notes of the United States for several years before his said purchase, and that shortly after his purchase he received a note from the plaintiff’s attorney, that payment must be made of the principal. That on the 25th day of January last, he paid to plaintiff’s attorney the six months’ interest which fell due on January 1st 1869, by a cheek upon the Western National Bank, which was paid in legal tender notes, and obtained his receipt for said six months’ interest. That he asked for delay in the payment of the principal, which was granted till May; and it was understood and agreed that the principal should then be paid in legal tender notes, and that no demand for silver or specie was then made or any intimation that it would be required.”
    A rule for judgment for want of a sufficient affidavit of defence was made absolute, and the debt was assessed, September 21st 1869, at $5216.66 “lawful silver money of the United States.”
    On a writ of error by the terre-tenant, the error assigned was that the judgment was entered “in silver money,” &c., and not generally.

      W. B. Whitman, for plaintiff in error.
    — There was no condition to pay the interest in silver. When there is no kind specified the debtor may elect: Bronson v. Rodes, 7 Wallace 229.

      Q-endell and B. S. Miller, for defendant in error.
    — The defendant having bought subject to the mortgage, became personally liable: Campbell v. Shrum, 8 Watts 60; Blank v. German, 5 W. & S. 36; Woodward’s Appeal, 2 Wright 322; Burke v. Gummey, 13 id. 518. The attorney at law has no authority to compromise his client’s case: Stokeley v. Robinson, 10 Casey 315. An agreement to accept a smaller sum in satisfaction of a larger, is void : Cumber v. Wane, 1 Strange 426. One executory agreement cannot be substituted for another, unless the security be of a higher degree. Mere readiness to perform, or even tender of performance, is insufficient: Diller v. Brubaker, 2 P. F. Smith 504; Keen v. Vaughan, 12 Wright 477; Blackburn v. Ormsby, 5 Id. 97; Reed v. Martin, 5 Casey 175.
    February 28th 1870,
   The opinion of the court was delivered,

by

Sharswood, J.

— The plaintiff in error did not allege in his affidavit of defence in the court below that he assumed a personal liability for the mortgage-debt in legal tender notes. If he had there might be something in the argument, that the terms of the original mortgage were changed by an agreement on sufficient consideration. Even then it may well be doubted whether an attorney at law could bind his client by such an engagement. All that' is said is “ that he asked for delay, which was granted till May, and that it was understood and agreed that the principal should then be paid in legal tender notes.” The subject was the mortgage which was payable in silver, and upon the true construction of the affidavit, the agreement was that the mortgage should be payable in legal tender notes, not that the terre-tenant would personally pay it. This was clearly without any consideration.

According to the principle of Bronson v. Rodes, 7 Wallace 229, the judgment of the court for the principal in lawful silver money of the United States in the terms of the mortgage was right. And that the interest must be in the same kind of money as the principal is very plain. Lawful interest is six per centum of the principal in whatever money the principal is payable, for it follows the principal as the shadow does the substance.. Instead of the rule being that the interest must he made payable in like lawful money,” though those words are sometimes introduced ex majori cautela, it is evident that unless the contrary is expressed it is a mere proportion of the principal debt.

Judgment affirmed.


text:
    Wiltbank’s Appeal.
    trust fund ivas stock in two corporations. One ordered an increase of stock, to be distributed to the old stockholders on payment of $75 per share; the trustee sold the privilege to subscribe. The other corporation made a similar order, the trustee advanced money, subscribed for the stock, sold it at an advance and carried what was received in both cases to the trust account. Held, that these items were income and not capital. 1. A testatrix gave her estate in trust' to pay her daughter $1400 annually from the income, and the remainder of the income to her son. Bart of the
    2. The right to subscription belonged to the trust estate/

      3. The price obtained by the trustee was equivalent to a premium on a sale of the stock.
    4. Earnings or profits of stock of a decedent made after his death are income, though in theform of capital, by the issue of new stock.
    5. Earp's Appeal, 4 Casey 368, compared and approved.
    February 16th 1870.
    Before Read, Agnew, Sharswood and Wiiliams, JJ. Thompson, C. J., at Nisi Prius.
    Appeal from the decree of the Court of Common Pleas of Philadelphia: In Equity : No. 16, to January Term 1870.
    The bill in this case was by William B. Wiltbank against The Pennsylvania Company for Insurance on Lives, &c. It set forth that the plaintiff was the only son of Maria Carleton, who died March 2d 1865, owning, amongst other estate, SOO shares of the stock of the New Haven Gas Light Co., of the par value of $25 per share; and of 20 shares of the stock of the New York and New Haven Railroad Co., of the par value of $100 per share; leaving surviving her the plaintiff and an only daughter, Julia V. Wiltbank, and having made her will, whereby she gave in manner following: “All the rest, &c., I give and bequeath to the Pennsylvania Company for Insurance on Lives, &e., upon the following trusts: First, to collect and receive the income, &c., of the whole estate held by the said trustee, and to pay over in quarterly instalments to my daughter, Julia V. Wiltbank, the sum of $1400 per annum for life, &c. Secondly, and upon this further trust after payment of said income to my daughter Julia, and after payment of all taxes expenses of said trust estate, to pay the remainder of the income of said trust estate to my son William B. Wiltbank for the term of his natural life, &c.: that the defendant accepted the trust; that the New York and New Haven Railroad Co., on the 22d of January 1866, authorized an increase of their capital to $5,000,000, and allotted “ to each stockholder 40 per cent, in stock, in addition to the amount standing in his name on the books of this company on January 27th instant, by the payment to the company of $75 on each share so allotted ;” that the defendants as trustees aforesaid, under this authority became entitled to subscribe for 8 shares of this stock for $75 per share, and that they sold the privilege of thus subscribing for $157.50 and charged themselves in their trust account of Mrs. Carleton’s estate with that sum; that the New Haven Gas Light Co., on the 1st of January 1867, increased their capital by an addition of 2000 shares at $25 each and ordered the directors on the payment of $25 for each share of stock “ to distribute said new stock to and among the old stockholders ; so as to give one share of new stock for every five shares of old stock held by such stockholder on the 25th day of March 1867;” that the defendants as trustees aforesaid advanced $1500 and took 60 shares of the stock, the amount to which they were entitled, and afterwards sold the same, realizing a profit of $412.80, with which they charged themselves in their account of Mrs. Carleton’s trust estate; that on the 19th of November 1868 the same company authorized another addition of 4000 shares, at $25 per share to their capital stock, and instructed the directors on the .payment of $25 per share “ to distribute the same to and among the old stockholders, so as to give one share of new stock for every three shares of old stock held by such stockholders on the 26th day of December 1868that the defendants as trustees of Mrs. Carleton’s estate advanced $2500 and took 100 shares of stock, the number to which they were entitled as such trustees, and afterwards sold it at a profit of $574.44 with which they charged themselves in their trust account; that the income of the trust estate, independently of the sums so received as profit on said stocks has been and is more than sufficient to pay Julia Y. Wilt-bank the sum of $1400 per annum.
    February 28th 1870,
    The prayer of the bill was that the plaintiff be declared to be entitled to receive from the defendants the above-mentioned sums derived from the sales of the stocks as income of the said trust estate.
    The defendants, by their answer, admitted the foregoing alie- ' gations, but declined to pay the sums claimed, because they were advised and believed these sums were capital and not income.
    The court below (Ludlow, J.) decreed that these sums were capital and not income, and dismissed the bill.
    The plaintiff appealed to the Supreme Court, and assigned this decree for error.

      W. W. WiltbanJe, for appellant.
    — The stock of the New York and New Haven Railroad was an adventitious profit arising from the sale of a mere right. There was no dividend of stock or of the capital fund. The new stock was not issued gratuitously; it was not part of the capital, and therefore was income: Earp’s Appeal, 4 Casey 373. The trust is to be guarded as much for those in remainder as for those who have the immediate benefit: Hill on Trustees 384; Paris v. Paris, 10 Vesey 185; Clayton v. Gresham, Id. 288; Wills v. Steere, 13 Id. 363; Bardey v. Wainwright, 14 Id. 66; Hooper v. Rossiter, 13 Price 774; Price v. Anderson, 15 Simons 473; Plumb v. Neild, 6 Jurist N. S. 529 ; McClaren v. Stanton, 3 De Gex, F. & J. 202.

      W. JF. Judson, for appellees,
    cited Hartley v. Allen, 4 Jurist N. S. 500.
   The opinion of the court was delivered,

by Agnew, J.

— Mrs. Maria Carleton, by her last will, created a trust of her estate, making the defendants trustees, and directing that they should pay to her daughter Julia the sum of $1400 per annum, out of the income and profits, and to her son, the plaintiff, the remainder of the income. After the death of Mrs. Carleton, two corporations in which she owned stock, constituting a part of the trust estate, resolved to increase their capital by an issue of new stock to be subscribed and paid for by the stockholders. The defendants, as trustees, sold the fight to subscribe for stock in one company, and subscribed and paid with their own money for stock in the other company. They sold the stock subscribed for at a premium, and credited the trust fund with the sums made in both cases. The question is, whether the profits made by the trustees belong to the capital or to the income of the trust. The court below thought it was capital. We think this was an error.

The new stock issued by the New York and New Haven Railroad Company, and by the New Haven Gas Light Company, was not a part of the capital of the old stock, but a mere product of an advantage belonging to it, to wit, a right to subscribe for the new stock.' The new stock is added capital represented by the cash which paid for it. This cash belonged to the parties who paid it, and formed no part of the trust estate. Had the companies sold the new stock in the market instead of permitting it to be subscribed for by the stockholders, it is obvious, the new stock would have had no connection with the owners of old stock. The premium of the sales of the new stock would have gone directly into the treasury of the corporations, and would have found its way into the pockets of the stockholders only by means of future dividends. The dividends thus declared, manifestly would have been no part of the capital of the trust estate, but would be a profit earned by the corporation after the death of Mrs. Carleton, and paid to the trustee as income.

Had the defendants purchased at a sale and paid their own money, 'it is evident that they would have been entitled to any profit they might have made for themselves. The liability to account for the profit is founded on the fact that the right of subscription belonged to the trust estate. The defendants had no personal right to subscribe for the new stock, but could subscribe only qua trustee. In so far as this brought an advantage, it accrued, therefore, to the trust, and not to themselves. But this advantage is manifestly a profit, as it consists only of the excess made by the trustee’s sale of the stock for a premium over and above the capital paid in by the trustee at par. This capital belonged to the trustee, the residue only, less expenses, was profit, and belonged to the trust. The sale of the right of subscription, (instead of making ah actual subscription and selling the stock), stands precisely on the same footing. The price obtained for it is the profit, and is the equivalent of the premium on the sale of the stock itself.

The new stock was neither a stock dividend nor a dividend of a surplus fund. It was not paid for out of either capital or income, but with the money' of the trustee or subscriber. It in no sense represents either income or capital of the old stock. The price brought by the sale of the subscription right, and the premium of the subscribed stock, are, therefore, an incidental, and in one sense an accidental profit, following the ownership of the old Stock, as the product of an advantage belonging to it.

The case is not within the decision in Earp’s Appeal, 4 Casey 368, though falling clearly within its principle. There the actual earnings of Robert Earp’s stock made before his death, were held to constitute a part of his capital at his decease, while the earnings made afterwards were income only. The principle established in that case is, that the earnings or profits of stock made after death are income and not capital, even though in form of capital by the issue of new stock. Equity, seeking the substance of things, found that the new stock was but a product, and was, therefore, income. Precisely so it is here, equity discovers the subject of controversy is a mere product; a right incidental to the stock, and is therefore income.

The effect of the issue of the new stock upon the market value of the old, does not alter the principle of the case, however it may possibly influence the administration of the equity in ascertaining the actual profit realized from the advantage of subscription belonging to the old stock. There has been no serious diminution in the value of the old stock caused by the new issue, and therefore, this possible question is not before us. In a case of what is termed the “ watering” of stock merely — an increase of the nominal oapital, without any addition, or only a partial addition to the actual capital — there might be a difference possibly, though we do not assert it now. Here the trustee has credited the trust with the profits made, and the only question is, whether it is income or capital. We are of opinion it is income, and to be distributed as such under the will of Mrs. Carleton. The decree of the Court of Common Pleas is reversed, and a decree ordered to be entered in favor of the appellant with costs, the decree to be drawn up and submitted according to rule.


text:
    The Pennsylvania Company for Insurance on Lives, &c. versus Dovey.
    1. Where an instrument is formally sealed and delivered and there is nothing to qualify the delivery but keeping the deed in the hands of the executing party, or to show that he did not intend it to operate immediately, it is an effectual and valid delivery, and delivery to the party who is to take by it is not essential.

      2. D. mortgaged his leasehold, he afterwards assigned it to H., who took in trust for a company thereafter to be formed, and covenanted to secure by mortgage to D. on the leasehold, the sum in the first mortgage which D. had paid: the company was organized; and a mortgage was executed by them leaving at the request of D. a blank for the name of the mortgagee, to be filled when D. should furnish the name: the mortgage remained in the hands of the company’s attorney; the company gave another mortgage, which was recorded. D. afterwards had the blank filled up with his own name, not knowing that the other mortgage was recorded. Held, he was not bound to accept the mortgage. •
    3. It did not matter that the delay was at the request of D. and for his accommodation, and that the company was ready and. willing at all times to complete the securities when he should demand it.
    4. H. should have procured a tender by the company of the mortgage in the name of D.
    5. When a debtor wishes to discharge himself from an action, an actual tender in the legal sense of the term, is necessary unless dispensed with.
    6. A grant of the profits of the land is a grant of the land.
    February 16th 1870.
    Before Read, Agnew, Sharswood and Williams, JJ. Thompson, C. J., at Nisi Prius.
    Certificate from Nisi Prius: No. 193, to July Term 1868.
    This was an action of covenant, brought July 20th 1868, by William Dovey against The Pennsylvania Company for Insurance on Lives, &c., administrators, &c., of William .Hunter, Jr., deceased.
    On the trial, before Sharswood, J., it appeared that on the 1st of May 1863, Jacob Alter and others leased a colliery to the plaintiff, he to mine, &c., at least 50,000 tons every year, ending November 30th, and pay to the lessors on the 10th of each month 25 cents per ton, &c. It was covenanted also that the lessee might retain one half of the rents less $10,000, and apply the same to the payment of $33,208 to the Philadelphia and Reading Railroad Company until that sum should be fully paid.
    On the 1st of July 1863, Dovey the plaintiff, mortgaged the leasehold to the railroad company, covenanting that “from time to time, and whenever and as often as any sum or sums, the payment wh.ereof is secured by this mortgage, shall have been due and payable for thirty days,” the mortgagees may “issue a writ of scire facias, and have ' execution of the said premises for the amount so due with interest from the time the same ought to have been paid, in the same manner as if the whole debt secured by the said mortgage had been fully due and payable for the space of one whole year.”
    There was authority also for the confession of judgment for the amount which might be due at any particular time.
    On the 14th of May 1864 the plaintiff contracted to sell to William Hunter, Jr., Josiah Caldwell and William Schafer, “ to hold in trust for a company to be organized,” the aforesaid leasehold, with the breakers, &c., and .certain other real estate of the plaintiff for $171,000, of $25,000 which were paid down, Hunter and the others agreeing to assume the contracts with the railroad company. A supplemental contract of June 1st 1864, provided for the transfer of the leases to the purchasers, and until then the plaintiff was to work the mines, and that when the transfers were executed Dovey should deliver possession to E. C. Bates and J. T. Bates, trustees, to whom the profits of working the mines from “ this date” should be paid; Hunter and the other trustees first named to pay the plaintiff interest on $146,000, the remainder of the purchase-money.
    On the 8th of July 1864, an indenture was executed between William Hunter, Jr., and Josiah Caldwell, of the first part, and the plaintiff of the second part. The deed recited the agreement to sell and transfer the leasehold, the' purchasers to assume the contracts of the plaintiff with the railroad company, including the mortgage to that company of July 1st 1863, securing the payment of $33,208 out of the rents reserved in the original lease; and that it had been agreed that if the plaintiff would pay the same, the purchasers would secure the repayment thereof to him in the manner stipulated in the mortgage to the railroad company, and would pay to the plaintiff semi-annually interest on said sum, which agreements were “to be secured by bond and mortgage on the said leasehold,” and would covenant for the payment of the principal sum and interest as above stated; it also recited that the $33,208 had been paid to the railroad company. The deed then covenanted as follows : — ■
    “First. That until the corporation called the Mammoth Vein Consolidated Coal Company, which is about being organized, and to receive an assignment of the said leasehold property and premises, shall have received such assignment, and given to the said William Dovey or Ihis assigns its obligation that there shall, in each and every year, be payable and paid to him, his executors, administrators or assigns, for and on account of the principal sum so paid by him, secured by a mortgage on the said leasehold estate, not less than $2360, until the whole of the principal sum of $33,208, with interest, shall have been fully paid and discharged, which obligation shall be given upon the organization of the said corporation, they, the parties of the first part, do jointly and severally covenant to and with the said William Dovey, his executors, administrators and assigns, that such sum shall be payable and paid to him or them, for and on account of the principal sum as aforesaid.
    “ Second. That when such obligation is given by the said the Mammoth Yein Consolidated Coal Company, then the said parties of the first part do jointly and severally covenant with the said William Dovey, his executors, administrators and assigns, that the said company shall and will faithfully perform their said obligation, and pay the said several sums of money at the time and in the manner therein stipulated, and also the interest on the said sum of $33,208 at the times and in the manner stipulated in the mortgage of the parties of the first part, to him the said William Dovey.”
    The foregoing covenants are those on -which their action is founded.
    On the same day (July 8) Hunter and others entered into a mortgage with the plaintiff. The mortgage recited the original lease, the stipulation to pay the $33,208 to the railroad company; the mortgagors then covenanted that if any of the money should be due for thirty days, the mortgagee might issue a scire facias and have execution of the premises for the amount then due with interest, and that with warrant of attorney, &c., to confess judgment against the mortgagors for the amount then due, and levy the same out of the premises, &c.
    The Mammoth Vein Consolidated Coal Company, the contemplated corporation, was incorporated August 22d 1864.
    For the purpose of carrying out the stipulations of the agreement of July 8th 1864, between the plaintiff and Hunter and others, Caldwell, the plaintiff’s counsel, on the 14th of April 1865, prepared a bond and mortgage, which on that day were executed by the coal company, with a blank for the name of the obligee and mortgagee, the plaintiff being desirous that the blank should be filled with the name of John J. Dovey. The papers were left in the hands of the attorney for the coal company until the consent of the lessors of the plaintiff could be obtained for the substitution of the name of John J. Dovey. The company authorized their attorney to insert the name when it should be agreed upon, and to put the mortgage on record.
    On the first of August 1865 the Coal Company entered into an agreement with Charles Gr. Nazro and others, which recited a resolution of the company to issue bonds for $500,000, payable in five years, and assigned to Nazro and his associates “ all the net revenue and income of them, the parties of the first part, and all. the coal mined and to be mined from their coal estates, &c., and all the interest which they have and may lawfully assign in the coal breakers, &c. * * * In trust to receive all the net revenues and income, except such as may be necessary, in the judgment of the directors, to be retained for the proper management and development of the mines and apply them to the payment of interest on the bonds; to invest certain specified sums from time to time for the use of the bondholders, and to apply the surplus to pay dividends on stock. It being agreed that the trustees shall faithfully apply the moneys ; and that the company shall mine and work their coal estates and collieries in accordance with the covenants in their leases, &c.

      This agreement was recorded in Schuylkill county, September 26th 1865.
    In November 1865, Mr. Gibbons, the attorney of the company, handed the mortgage to .Mr. McMurtrie, the attorney of the plaintiff, and authorized him to fill in the blank with the plaintiff’s name, he not having been able to obtain the consent of the lessors to the substitution; the blank was thus filled.
    Mr. McMurtrie, at tbe same time, gave Mr. Gibbons this paper:
    “Memorandum. Mr, Charles Gibbons has given me the mortgage of the Mammoth Vein Coal Company to William Dovey for <§33,200, to be recorded, and when it is ascertained there are no encumbrances on the mortgaged premises prior to the date of the recording of the mortgage, and the bond and warrant recited in the mortgage are delivered, I will surrender, cancelled, and will cause to be entered satisfaction on the mortgage from William Hunter and others to said Dovey, which has been thereby substituted. R. C. McMurtrie.
    November 16th 1865.”
    This mortgage was recorded November 29th 1865, in Schuylkill county.
    On the 1st of December Mr. McMurtrie notified Mr. Gibbons that on sending the mortgage to be recorded, he found that the coal company had given a mortgage for $500,000 on their property, and he therefore could not satisfy the mortgage of July 8th 1864 from Hunter to the plaintiff.
    On the 29th of the same month Mr. McMurtrie again wrote to Mr. Gibbons, referring to his memorandum and to the entry of the $500,000 mortgage, and saying:—
    * * * “ I am compelled to decline accepting this mortgage of the company as a substitute for the one held by Mr. Dovey, and as a performance of the contract in reference thereto, by which the purchasers from Mr. Dovey were to be absolved from their personal undertaking with him. * * * I must, therefore, give you notice on Mr. Dovey’s behalf, that he declines accepting the proposed substituted mortgage, and will continue to look to the mortgage and other securities he received from the persons purchasing the leasehold from him. I therefore return the mortgage of the company which you propose to substitute under the contract, and will have such steps taken to relieve the company from the recording thereof as you may advise, consistent with the preservation of our existing mortgage.”
    On the 13th of January 1868, the plaintiff obtained judgment against the defendants on the mortgage of July 8th 1864 to him, under which the property was sold to Alter and others, the original lessors, for $100.
    The defendants submitted five points, which it is not necessary to give.

      • Judge Sharswood charged :—
    * * * “If Mr. Hunter was desirous for any reason that his own obligation, or covenant and mortgage, should be changed into an obligation and mortgage by the corporation, as to which however, when executed and accepted, he would still continue liable for the fulfilment, it was incumbent on him to prepare and tender to Mr. Dovey an obligation and mortgage by the corporation, pursuant to the terms of the covenant. This there is no evidence that he did; nor is there any evidence that such tender was dispensed with till after September 25th 1865, when an instrument, dated August 1st 1865, was recorded in Schuylkill county, executed by the Mammoth Company, which assigned to trustees, as security for the payment of bonds to the amount of $500,000, ‘ all the coal mined and to be mined from their coal estates in the counties of Schuylkill and Northumberland.’ [After the execution and recording of that instrument, Mr. Dovey was not bound to accept the mortgage and obligation of the Mammoth Coal Company.] By so doing, he would necessarily have surrendered and released the mortgage he already held of July 8th 1864, from Mr. Hunter to him, which was a prior lien, and the new mortgage taken would have been second and subordinate to that executed in favor of the trustees for the bondholders.
    “ I say to you, therefore, that [there is no evidence that Mr. Hunter tendered to Dovey prior to September 1865, any mortgage or obligation pursuant to the terms of that covenant.] It appears, from the admitted facts, that on April 14th 1865, a bond and mortgage prepared by the counsel of Mr. Dovey, were executed by the corporation, with a blank for the name of the obligee and mortgagee; but these papers, by amicable arrangement, were left in the possession of the Mammoth Yein Company undelivered and unaccepted, until Mr. Dovey should be able to secure the consent of the lessors for the substitution of the name of John J. Dovey, as obligee and mortgagee, instead of that of William Dovey. The Mammoth Coal Company never tendered a mortgage and obligation to William Dovey until November 1865, when he refused to accept it. It is clear to my mind, that [the transaction amounted to nothing on the part of the corporation until November 1865.] They agreed all around to wait; and if, in the meantime, by their own act, in the execution of the assignment of August 1st 1865, they had incapacitated, themselves from making such a mortgage as was contemplated by the covenant, the consequences must fall on Mr. Hunter, who had covenanted that they would execute such a mortgage.
    “ It is not surprising, perhaps, that this apparent indifference about the completion of the matter was manifested. The position, neither of Mr. Hunter nor the Mammoth Yein Company, was materially changed by the giving of the bond and obligation. Mr. Hunter, under his covenant, would still continue responsible as before, and the Mammoth Coal Company, who had received an assignment of the leasehold, subject to the mortgage of Hunter to Dovey, was undoubtedly liable. The only interest was on Mr. Dovey’s side, for he would thereby procure the direct obligation of the company to him so far as that and the accompanying mortgage might be available for sale in the market.
    February 28th 1870,
    l£ There was nothing then done till November 16th 1866; and what was then done, or offered to be done, was not a compliance with the covenant.
    “ I instruct you, therefore, to render a verdict for the plaintiff for the amount of the instalments due upon the covenants at the time of the commencement of this action, with the semi-annual payments of interest on the whole sum due and unpaid at that time. As this instruction covers the whole case, it is unnecessary that I should answer the several points on which I have been requested to charge by the plaintiff and defendants.”
    The verdict was for the plaintiff for $7283.92.
    The defendants took a writ of error. They assigned nine errors: the 1st, 2d and 3d, were the portions of the charge included in brackets.

      W. F. Judson and C. Gibbons, for plaintiffs in error.
    — The question of the delivery of the mortgage was for the jury: Critchfield v. Critchfield, 12 Harris 102; Allen v. Getz, 2 Penna. R. 310. Retaining the mortgage by the counsel of the mortgagor did not conclusively rebut the presumption of delivery arising from its execution and acknowledgment: Blight v. Schenck, 10 Barr 285; Garnons v. Knight, 5 B. & C. 671; Lloyd v. Bennett, 8 Id. 124; Wheelwright v. Wheelwright, 2 Mass. R. 452; Murray v. Earl of Stair, 2 B. & C. 82.

      R. 0. MoMurtrie, for defendant in error.
   The opinion of the court was delivered,

by Sharswood, J.

— The 4th, 5th, 6th, 7th and 8th alleged errors not being assigned according to rule must be dismissed. Indeed, none of them have been insisted on here, as the principles upon which they rest are involved in the first three assignments. These present only two questions. First. Whether there was any evidence that Hunter had tendered to Dovey prior to September 1865, or had procured to be tendered a mortgage and obligation of the Mammoth Vein Coal Company, pursuant to the terms of his covenant of July 8th 1864, as set forth in the declaration ? Second. Whether Dovey was bound to accept the mortgage and obligation tendered in November 1865 ?

Had the obligation and mortgage, executed and acknowledged by the Mammoth Vein Coal Company on April 14th 1865, been complete and perfect instruments, then indeed the principle of Blight v. Schenck, 10 Barr 285, might have required that the question, whether there had been a delivery or tender, should be submitted to the jury. That case recognised the doctrine that where an instrument is formally sealed and delivered, and there is nothing to qualify the delivery but the keeping of the deed in the hands of the executing party, nothing to show that he did not intend it to operate immediately, that it is a valid and effectual deed, and that delivery to the party who is to take by it, or any other person for his use, is not essential. But the instruments executed and acknowledged in this case were imperfect — not such as Dovey was bound to accept — and no presumption of his having accepted them could therefore arise, as in Wilt v. Franklin, 1 Binn. 502. A blank was left for the name of the obligee and mortgagee. It would have been necessary to show an express agreement to accept them in this imperfect state. There was no evidence of this, but, on the contrary, the evidence was that the papers were left in the hands of the counsel of Hunter to be perfected thereafter, when Dovey could obtain the assent of the original lessors, which was necessary to the substitution of some other name than his own. This, however, he failed to procure. It matters not that this was at Dovey’s request, and for his accommodation, and that the company were ready and willing at all times to complete the securities whenever he should demand it. If Hunter wished to bring the matter to a close, he ought to have procured the company to tender the instruments filled up with the name of Dovey, according to the stipulation of his covenant. Readiness and willingness were not enough. “ Where a debt is due on a contract executed,” says Lewis, C. J., “ and the party to whom it is payable is entitled to it without the performance of anything on his part, and the object of the debtor is to discharge himself from an action for it, an actual tender, in the legal sense of the term, is necessary unless dispensed with:” Williams v. Bentley, 3 Casey 294.

We may assume that there was an actual tender November 16th 1865, but the memorandum of Mr. McMurtrie, as counsel for Dovey, shows that there was then no acceptance. The only question, therefore, is whether there was any right to refuse ? It appears that on August 1st 1865 the Mammoth Vein Coal Company had executed a mortgage to certain persons in trust to secure bondholders of all their “net revenue and income, and all the coal mined and to be mined from their coal estates in the counties of Schuylkill and Northumberland,” which mortgage in the mean time had been duly recorded. This mortgage was without any question an encumbrance on the leasehold interest included in that of April 1864, tendered in November 1865 to Dovey. A grant of the profits of the land is a grant of the land itself: 1 Inst. 4 b. It has been contended, however, that the execution and delivery of a new mortgage, effectual as a lien, was not required by the terms of the covenant. The words are, “ its obligation secured by a mortgage on the said leasehold estate.” It is said that as Dovey was not required to satisfy the existing mortgage for the same debt held by him, it would still have remained as a security for the new obligation. But the fallacy of this argument is apparent. The mortgage of July 8th 1864 was to secure the obligation of Hunter as principal debtor: the substituted obligation was that of a different party, for whom he was to stand as guarantor. The first obligation would have been at an end by the delivery and acceptance of the second, and it is very plain that the first mortgage, being merely accessary and collateral, would have followed the fate of the principal obligation, and indeed could not by the agreement of the parties by parol have been converted into a mortgage or security for the second, and perhaps even a written and recorded covenant to that effect could not have kept it alive as against intermediate purchasers and mortgagees: Bowers v. Oyster, 3 Penna. Rep. 239; Metz v. Dieffenbach, 3 Barr 233.

Judgment affirmed.