author: Mr. Justice Trunkey

text:
    Barzilla Stephens versus Monongahela National Bank.
    1. An accommodation maker of anote, in regard to third persons, is liable to pay it according to its tenor, and cannot successfully allege the paper was an imposition. He is to be taken pro veritate as the drawer, and having placed himself in the position of principal, he cannot escape by alleging that he was a surety. The payee having the loan of the maker’s credit, may sell or discount an antecedent note or pledge it as collateral security for debt.
    2. An endorser is something more than a surety and is liable in the first instance as a drawer. Between makers and endorsers, the relation of principal does not exist. Each prior party is a principal for each subsequent one.
    3. When the property of the principal has been taken in execution by the creditor, the lien thus acquired cannot be relinquished without discharging the surety to an extent corresponding with its value. It is more than doubtful that in Pennsylvania such result would follow a withdrawal of the execution before levy, though it was once so held in England.
    ' 4. See No. 5200 of the Revised Statutes of the United States, declares “ the total.liabilities to any association of any persons or any company, corporation or firm, for money borrowed, including in the liabilities those of the several members thereof, shall at no time exceed one-tenth of the amount of the capital stock of such association actually paid in.” Held, that it was not error to reject an offer to prove an agreement to violate this section, and that the loans in pursuance of it were in excess of the authority and power of the bank to make.
    5. Fowler v. Scully, 22 P..F. Smith 456, considered and approved.
    6. Forfeiture of the privileges and' powers of a national bank must be determined by a suit brought by the comptroller of the currency, and until determined it'may-do business ; and no person, by á conspiracy to evade its regulations, may escape liability for borrowed money loaned by it, upon personal security in the manner authorized.
    7. O’Hare v. Second National Bank of Titusville, 27 P. F. Smith 96, considered and approved.
    ■ 8. 'The remedy to recover usurious interest paid, is by a personal action. The right of action accrues when it is paid, and the Statute of Limitations .begins to run from that date.
    9. Where there has been a series of renewals for the same loan', in a suit by the bank upon the last note, the borrower is entitled to a credit for all the interest paid on the loan from the beginning and not merely the excess above the lawful rate-
    November 19th 1878.
    Before Agnbw, C. J., Sharswood, Merctjr, Gordon, Paxson and TrunHey, JJ. Woodward, J., absent.
    Error to the Court of Common Pléas of Greene county: Of October and November Term 1876, No. 110.
    This was an action on a promissory note. The jury found a special verdict, finding the facts as follows:
    That the defendant gave a note to the plaintiff, dated October 10th 1874, .calling for $10,575, payable twenty-five days afterdate. ■That $75 was charged as the interest on $10,500, from its date to maturity of said note and put in the note. That for excessive interest over six per cent, on all the transactions that Israel Stephens had with the plaintiff from April 7th 1870, there was charged to him the sum of $1907.04, and that the' note in suit was a renewal of a note given by Israel Stephens in his lifetime to said plaintiff, and .that the balance due the plaintiff at this date, less all the interest from the date of the note in suit, and the amount of excessive interest- as aforesaid, was the sum of $8592.96. . :
    Judgment for plaintiff was entered- upon this verdict.
    The court, Willson, P. J., said:
    “ In this action the Monongahela National Bank of Brownsville seeks to recover from Barzilla Stephens, the sum of $10,575, being the amount' of a note signed by Barzilla Stephens, bearing date the 10th day of October 1874, payable to the .order of R. S. Long, twenty-five days after the date of said note. The defendant does not deny having signed the note, but claims, however, in addition to the offers that were made by his' counsel and ruled out by the court, that he is entitled to a deduction from the amount of the note of $75 excessive interest included in the note as well as the interest paid in excess by Israel Stephens in other transactions between Israel Stephens and the Monongahela National Bank of Brownsville. It appears from the evidence that the Monongahela National Bank of Brownsville had a note of Israel Stephens’s for the sum of $10,500, and that before that note became due Israel Stephens died. At its maturity it became necessary that something should be done with the note, and in consequence this note was given, being signed by Mr. Barzilla Stephens, and endorsed by Azariah Stephens, R. S. Long and Barzilla Stephens. It appears further that Azariah and Barzilla Stephens administered upon the estate of their brother Israel, and hence the defendant claims that he is entitled to a credit on this note for all sums that Israel Stephens would have been entitled to if he were living and the suit was brought against him, and wo state, and instruct you, that he is not only entitled to a credit of the $75 excessive interest charged in the note, but also for all excess of interest over and above the legal rate allowed by the law of Pennsylvania, paid by Israel Stephens in other transactions with, the Monongahela National Bank of Brownsville within the last six years.
    “The act of Congress under which these banks hold their charters provides, that when they receive or reserve, or have charged a greater interest than that allowed by the law of the state in which they do business, that they shall forfeit all the interest so received or reserved. In this case it is admitted that $75 was charged to Mr. Stephens on the amount of the note for twenty-five days, at the rate of nine per cent., being three per cent, in excess of what is allowed by the laws of this Commonwealth; and hence we instruct you that the bank forfeits all that interest. And, further, that having taken or reserved that amount of interest in violation of law, that, according to the decision of the Supreme Court, it destroys the interest-bearing power of the noteso that the bank is not entitled to the interest on the note from the day it' became due up to the present time. If we had been called upon to decide this question before the decision of the Supreme Court, our instructions would have been very different. Instead of instructing you that the defendant would be allowed to default the excessive interest paid in prior transactions, we would have instructed you that the defendant could not claim aiiy deduction for excessive interest paid in other transactions by Israel Stephens; as we considered such excess could only be recovered by an action of debt brought within two years, as provided by the act of Congress. And as to the note in suit, wo would have instructed you, that the bank only forfeited the interest during the time that the note had to run — that is, it would forfeit the $75, but would be entitled to the legal interest from tbe time of the maturity of the note up to the present time. But it seems from the decision of the Supreme Court in the cases of Brown v. The Erie National Bank, and Lucas v. The Pottsville National Bank, that our construction of the law would have been erroneous, for the Supreme Court in these cases have decided that the defendant would be entitled to a credit for all the excess of interest over and above six per cent, paid in other and prior transactions within the last six years. And accordingly we instruct you as we understand the Supreme Court to have laid down the law.
    “ The defendant then is entitled to a credit for the excess over and above six per cent, paid by Israel Stephens, in other transactions than the note in suit, to the Monongahela National Bank of Brownsville. As to the amount of that excess there is no contest. In regard to the note in suit, we instruct you that the plaintiff bank forfeits the $75, and is entitled to no interest from the maturity of the note up to the present time. Deducting the $75, you have the sum of $10,500 due on this note to the bank; and from that sum you must deduct the various sums paid in excess in other transactions — that is, the sum of $1907.04. That deducted from $10,500 leaves the sum of $8592.96 now due the bank from Barzilla Stephens, and for which the plaintiff is entitled to your verdict. But in making up your verdict we want you to set forth the different deductions, so that hereafter in the trial of the other cases between the Monongahela National Bank of Brownsville and the legal representatives of Israel Stephens, it can be seen what deductions have been made in this suit; and we have directed the counsel for fhe plaintiff to prepare a special verdict for you to render in'this case.”
    The court rejected the following offers of evidence:
    That the plaintiff has recovered judgment against the said Richard S. Long, one of the real debtors, issued execution, levied on a large amount of personal property, stayed the execution, and released the personal property of said Long. That defendant notified plaintiff to proceed and collect this judgment, as he would not stand bound as surety any longer.
    That since said notice, the said R. S. Long has had a large amount of personal property which could have been sold on execution on said judgment. That the plaintiff has refused to collect the judgment of the real debtor, although said Long had sufficient real and personal property to satisfy said judgment. This, after sufficient notice from defendant to so proceed.
    That the note in suit is one of several notes discounted by plaintiff for Israel Stephens and R. S. Long, who were partners in buying and selling cattle and other stock in the west. That the note in' suit and the other notes just referred to were discounted under an agreement , entered into by and between the plaintiff bank and Israel Stephens, that as the plaintiff bank could not loan the said firm of Israel Stephens and R. S. Long, without violating the law of Congress, only one-tenth of the capital stock of plaintiff bank being paid in, nor the individual members of said firm, that said plaintiff bank would discount the notes for said Israel Stephens and Richard S. Long to evade the provisions of the 29th section of the National Currency Act of 3d June 1864 (being section 5200 of the Revised Statutes of the United States), and that the said loans and notes were in excess of the authority and power of said plaintiff to make.
    The court refused to charge that if the jury believe that, at the time of the original of the note in suit and each renewal thereof was taken, that the bank knowingly, reserved and charged interest and discount thereon in excess of the amount permitted by the National Bank Act to national banks located and doing business in this state, then each of said notes was without consideration to the extent of the sums so reserved and charged as interest and discount.
    That if the jury believe that the plaintiff knowingly violated any prohibition contained in the National Bank Act at the time it took the note in suit, and the prior notes of which it was the last renewal, then no action can be here maintained upon such contract made in violation of an United States statute.
    That the plaintiff being a national bank organized and doing business under an Act of Congress, known as the National Bank Act, this court is without jurisdiction over this case.
    Defendants took this writ of error, and assigned for error the charge, the answers of the court, and the rejection of defendant’s offers.

      A. A. Pwrman and P. A. Knox, for plaintiff in error.
    A person who makes or endorses an accommodation-note for the accommodation of a party thereto, is regarded as a surety: Baker v. Martin, 3 Barb. S. C. 634.
    The creditor having taken out execution against the debtor, is a trustee of it for all parties interested, and if without the knowledge of the sureties he withdraws the execution he thereby discharges the sureties: Rees v. Barrington, Lead. Cas. in Eq., H. & W., 3 Am. ed., p. 824.
    The maker of accommodation paper is discharged to the extent of the payments made by the endorser to the holder: Love v. Brown, 2 Wright 307; Hunt v. Breading, 12 S. &. R. 41; Assignees v. Patton, 13 Id. 346; Com. v. Haas, 16 Id. 252; Sitgreaves v. Bank, 13 Wright 364; Com. v. Miller, 8 S. & R. 452.
    Notice to the president on any subject is notice to the bank: Morse on Banks and Banking 113; Porter v. Bank of Rutland, 19 Vt. 410; Mechanics’ Bank v. Schaumburg, 38 Mo. 228; Roumage v. Mechanics’ Fire Ins. Co., 1 Green (N. J.) 110; Smith v. South Royalton Bank, 32 Vt. 341; Bank of U. S. v. Davis, 2 Hill 451; North River Bank v. Aymor, 3 Id. 262; Louisiana State Bank v. Senecal, 13 La. 525. When a person has sufficient information to lead him to a fact he shall be deemed cognisant of it: 2 Kent Com. 630; May v. Chapman, 16 M. & W. 355; Maul v. Rider, 9 P. F. Smith 167.
    The loans were in excess of one-tenth, and plaintiff cannot recover: Bank of the U. S. v. Owens, 2 Peters 538; Dill v, Ellicott, Taney’s Circuit Court Decisions 233; Maybin v. Coulon, 4 Dall. 298; Seidenbender v. Charles’s Adm’r, 4 S. & R. 150; Holt v. Green, 23 P. F. Smith 198; Morris Run Coal Co. v. Barclay Coal Co., 18 Id. 174; Bowman v. Cecil Bank, 3 Grant 36; Mechanics' Savings and Loan Co. v. Conover, 5 Phila. R. 18; and other cases referred to in Fowler v. Scully, 22 P. F. Smith 466, 467.
    The amounts being .received in violation of law cannot .be ' retained, and neither time nor contract will sanctify them or legalize the defendant’s possession as against the rightful owner: Brown v. Bank, 22 P. F. Smith 212; Lucas v. National Bank, 28 Id. 232.
    No state will act upon or enforce the penal code of another state or jurisdiction, it has neither the power nor the inclination. Congress cannot diminish the jurisdiction of a state court, and it cannot ■ compel a state to exercise a jurisdiction not required by the laws of the state: Haney v. Sharp, 1 Dana (Ky.) 442; Ward v. Jenkins, 10 Metcalf 583; 1 Kent’s Com. 403; Bingham v. Claflin, (Wis. S. C.), 7 Nat. Bankruptcy Reg. 412; and Voorhees v. Frisbie, (Mich. S. C.), 8 N. B. R. 152.

      Sayers Sayers, for defendant in error.
    Accommodation paper is a loan of the maker’s credit without restriction as to the manner of its use: Appleton v. Donaldson, 3 Barr 386. He who puts himself in the front of a negotiable instrument must abide the consequence : 12 S. & R. 382. There being no fraud or undue means charged by defendant below in the transaction, he literally has no defence against plaintiff as a holder for value before maturity: Phelan v. Moss, 17 P. F. Smith 59.
    It has been decided that the provision of our Act of March 28th 1858, which ■ provides that where the debt and excessive interest have been paid, an action will lie to recover the same within six months, does not apply: Lucas v. Government National Bank, supra.

   Mr. Justice Trunkey

delivered the opinion of the court, January 6th 1879.

The maker of a negotiable note undertakes to pay it, according to its tenor, to any holder to whom it may be due. An accommodation maker is equally liable, except to the payee. In respect to thir,d persons the law considers him just in the character he has assumed, and will not permit him to allege that the paper to which ho gave his name w'as an imposition, nor to gainsay its reality by proof that it wras a fiction. It shall be taken pro vertíate that he was the drawer, for da vertíate that was the very thing he was intended to be: Bank of Montgomery County v. Walker, 9 S. & R. 229. “ We assume this broad principle that the man who draws a promissory note for the purpose of negotiation, must stand by it. He has placed himself in the situation of a principal, and shall not escape by alleging that he was a surety” : Walker v. Bank, 12 S. & R. 382. The fact that the holder knew he had received no value will not relievo him, for, by placing himself in front, the holder had a right to suppose that he was willing to abide the consequences : Id. The payee of an accommodation note may sell or discount it, or pledge it as collateral security for an antecedent debt, for he has a loan of the maker’s credit without restriction: Appleton v. Donaldson, 3 Barr 381.

By endorsement of a negotiable note, without qualification, the endorser promises that if the maker and previous endorsers do not pay it at maturity, when duly called upon and notified, he will, and this promise is to his immediate endorsee and every subsequent one. The endorsee of accommodation paper takes more than the rights of the payee, and can recover of the maker because the note was given for this very purpose. So is an accommodation endorser liable to subsequent endorsees. The principle is a general one that the person making or endorsing a negotiable note, for the benefit of another, is liable to a third person, even with notice of the want of consideration, but is not to the person for whose benefit the paper was signed: 2 Pars, on Bills and Notes 27; Byles on Bills 237.

An endorser is something more than a surety, and is liable in the first instance as a drawer. As between maker and endorsers the relation of principal and surety exists, and each prior party is a principal for each subsequent party. In an action by one who has paid the holder, extrinsic evidence may be admissible to show that the maker, in fact, is surety for the endorser. Every surety for another is discharged from this secondary obligation if the creditor does not hold the principal debtor to his primary obligation with proper strictness. The rights and duties of endorsers and sureties are so alike that most acts which will discharge the one will also the other. But there are some distinctions important to observe lest a principle, exclusively applicable to one, be perverted. For instance, without due demand and notice, at the maturity of a note, an endorser will bo discharged — a surety continues liable upon his contract, though the creditor sleeps. A surety may spur the creditor into activity by notice to pursue the principal debtor, on pain, for neglect, that the surety will be no longer bound — not so an endorser. The latter cannot call upon the holder of a protested note to sue the drawer, and, if he refuses, thereby relieve himself, for, if he wishes instant recourse to the principal, it is his duty to pay the note and sue for himself: Beebe v. West Branch Bank, 7 W. & S. 375.

It is well settled, sustained by authorities cited by counsel for plaintiff in .error, that when the property of the principal has been taken in execution by the creditor, the lien thus acquired cannot be i relinquished without discharging the surety, to an extent corresponding with its value. It is more than doubtful that, in Pennsylvania, such result would follow a withdrawal of the execution before levy, though it was once so held in England. The distinction between the lien of the writ and lien of the levy seems to be that the latter is a technical satisfaction of the'.judgment. But it is now settled that if a judgment-creditor relinquish his levy upon personal property, leaving the same with the debtor, his debt is not paid, nor the lien' upon the debtor’s land postponed to a junior judgment. He may leave the goods in the debtor’s hands, release his levy and abandon his writ, without affecting his right as an older lien-holder, to claim the proceeds of sale of the debtor’s land. Only when the goods, by the seizure, have been lost to the debtor, is the judgment satisfied: Campbell, Bredin & Co.’s Appeal, 8 Casey 88.

Long kept his goods, and no part of the judgment against him was satisfied by relinquishing the levy and staying the writ. Were he the principal debtor, his surety might be released because of the creditor’s duty to hold the levy for benefit of the surety. A barren levy is no payment in fact, and a levy of the goods of a surety, given up, is no bar to recovery against the principal. Stephens stands just as he placed himself upon the face of the note, and indulgence to the payee, who endorsed it, will not prejudice the holder. A composition accepted from the endorser would not relieve the maker farther than the sum paid to the holder: Love v. Brown, 2 Wright 307. It follows that the offers of testimony, B, C and E, were rightly rejected.

It was earnestly pressed that the court erred in rejecting the offer to prove an agreement between the bank and Israel Stephens, to violate section 5200 of the Revised Statues U. S., which declares that “ the total liabilities to any association of any person, or of any company, corporation, or firm, for money borrowed, including, in the liabilities of a company or firm, the liabilities of the several members thereof, shall at no time exceed one-tenth part of the amount of the capital stock of such association actually paid in and that the loans, in pursuance of said agreement, were in excess of the authority and power of the bank to make. No principle is better settled than that an action cannot be maintained on a contract, the consideration’ of which is either wicked in itself or prohibited by law. This has been often discussed, and recently in an able opinion by the present chief justice, in Fowler v. Scully, 22 P. F. Smith 456, a case relied on in support of the offered testimony. Not stopping to remark upon the rule, nor upon distinctions between cases within and without, we come to consideration of the statute to ascertain if the alleged agreement prevents recovery of the money loaned.

The powers conferred on banks must be distinguished from regulations for their business. An act done without authority, and forbidden, is not„ like one which violates a regulation. In Fowler v. Scully the action was upon a mortgage, showing on its face that it was taken to secure loans to be made, and “ to avoid the necessity of procuring the additional endorsement to said paper of a third party.” It was held that, 1. Under section 5736 banks have power to loan money on personal security, but not upon other; 2. Section 5137 authorizes them to take mortgages to secure debts previously contracted; 3. They are prohibited, by necessary implication, from lending money on the security of a mortgage. The reasoning in support of these conclusions seems unanswerable, yet so close was that case to the border beyond which a contract will not be held void for illegal consideration, that two-fifths of the judges believed it on the other side and dissented from the judgment. Here the note was in the power of the bank to take, and the security was personal. Nothing on the face of the note, nor in the plaintiff’s evidence, shows a taint of illegality. It appears as clear as any transaction within the conceded powers of the bank. The statute has many provisions for regulation of banking business. Some sections, as 5197 and 5198, relating to interest, contain clauses of forfeiture and penalty for violation. But everywhere it has been held that the bank may recover the money actually loaned upon a usurious contract. Other sections, as 5201 and 5208, for violation, subject the bank to appointment of a receiver. Nearly all the sections, including 5200, relating to liabilities of any one person to the bank, are vindicated by the provisions in section 5239, which declares that a wilful violation of any provision, shall forfeit the rights, privileges and franchises of the association. Such violation can only be determined by suit brought by the comptroller of the currency in the proper court of the United States. And in case of such violation, every director who participated in or assented thereto, shall be personally liable for all damages, in consequence of the violation, sustained by the bank, its shareholders or any other person. Until the forfeiture be determined, in the mode provided, the bank may do business; and no person by a conspiracy to evade its regulations, may escape liability for borrowed money, loaned by the bank, upon personal security in the manner authorized. In O’Hare v. Second National Bank of Titusville, 27 P. F. Smith 96, it was said, per Aunew, C. J.: “ Evidently the limitation of the indebtedness to the one-tenth in the 29th section (5200 R. S.), was intended as a general rule for conducting the business of the bank ; a rule laid down from experience to regulate its loans for its own best interest, and those of stockholders and creditors, not a rule to regulate its customers. It was, as remarked in Fowler v. Scully, a regulation to prevent these .associations from splitting on the rock which has ruined so many banks, to wit, that of lending too much of their capital to one person or firm. The intention being to protect the association and its stockholders and creditors from unwise banking, we cannot suppose it was meant to injure them by forbidding recovery of the injudicious loans. We should not interpret the section so as to carry its prohibition beyond its true purpose, and thus cause it to destroy the very interest it intended to protect by regulation. To do so would be, as said by the court below, to demand a penalty in favor of one individual for an offence against the country, and invite to dishonesty under a.pretence of a regard for the law.” If this language was not strictly necessary to disposition of that case it is apposite here, and demonstrates that a contract purposely made in evasion of that section is not void. Of course, we have considered the offer as true, namely, that there was a conspiracy between the bank and the borrower to violate the statutory regulation. The question is whether the note is invalid on general principles of policy, and not one of equity and justice between the parties. The public good is the ground of relief to a defendant who'proclaims his own turpitude in the wilful violation of a statute, and his shame in refusing payment of what he justly owes — not his worthiness. The bank is treated as a conspirator, but the fact is unmistakable that it was.its officer. It is not the intendment of the statute to provide a way by which an unfaithful officer and dishonest stranger may empty the vaults of the bank, work its ruin, to the great loss of its shareholders and creditors, and the receiver of its money, wrapped in the mantle of public policy, escape liability.

Error is assigned- to the rulings of the court limiting set-off of excess of interest, paid on other transactions, to a period within six years preceding the trial. While it may be true, that neither time nor contract will sanctify or legalize the taking and holding of usurious interest by a national bank, it is just as certain that the remedy for the owner to recover it back is -by a personal action'. The right of action accrues the very instant the usury is paid. That it is barred in six years by the Act of 27th March 1718, is too plain for remark. It is difficult to imagine a case where the statute does not begin to run from payment of the usurious money, for the owner almost necessarily has knowledge of the facts from the first. In case of fraud the statute runs from its discovery. Not a tittle was shown to toll the" statute, at law or in equity.

The rulings of the learned judge upon the question of jurisdiction need no vindication. They accord with the doctrine in Bletz v. The Columbia National Bank, 6 Norris 87.

But one other point requires special notice. Since this cause was tried in the court below, it has' been decided- that -where there has been a series- of renewal notes given to a national bank, for the continuation of the same original loan, and the bank sues to recover its debt on the last, the borrower is entitled to credit for all the intcest he has paid from the beginning, on the loan, and not merejy to the excess above the lawful rate. All interest paid, or charged and put into the notes, must be credited: Overholt v. National Bank of Mt. Pleasant, 1 Norris 490; Cake v. Bank, 5 Norris 303. Nothing can be added to the opinion of Sharswood, J., in Overholt v. The Bank. The rulings upon offers of testimony, answers to points and charge, so far as inconsistent with the principles of that case, are erroneous. And for this

Judgment reversed, and a venire facias de novo awarded.


source: Caselaw Access Project

author: Mr. Justice Mercur

license: Public Domain

text:
    Wilson versus Berg et al.
    1. The fraud which will avoid a preference or general assignment for the benefit of creditors, must be fraud or preference in the assignment itself.
    2. If prior to the assignment, the assignor had fraudulently conveyed or concealed any of his property, such acts would not impair the validity of an assignment subsequently made, if the conveyed or concealed property can bo recovered by the assignee it should be for the benefit of creditors. If he cannot recover it, then any creditor may pursue it as if the general assignment had not been made.
    3. Prior to an assignment, except as against a bankrupt law, a debtor has a right to prefer any creditor.
    4. An assignment for the benefit of creditors can be impeached only for fraud in the assignment or at the time of making it, so as to have attached to the instrument or affected its operation.
    5. An assignment may bo void, although all the forms of law may be complied with.
    November 19th 1878.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson and Trunkey, JJ. Woodward, J., absent.
    Error to the Court of Common Pleas of Butler county: Of October and November Term 1876, No. 267.
    David Kelly, on December 7th 1875, sold a farm to David Henry for 813,000, taking in payment therefor a credit of 82000, due by Kelly to Henry, and a judgment on a mortgage, given by one Guff'y to one Fry, the son-in-law of Henry, for $Uj000, which judgment was assigned to Alexander Mitchell. On December 13th and 14th 1875, and subsequently, judgments to the amount of 850,000 were entered against Kelly. Berg & Co., who held a judgment against Kelly, treated the assignment as void, and as made in fraud of creditors, and levied upon Kelly’s personal property. Wilson, the assignee, petitioned the court to set aside the writs, and Berg & Co., alleging that the assignment was void and conferred no title on Wilson, an issue was directed to try the question of title. On the trial it appeared that the farm sold constituted the greater part of Kelly’s assets; that no consideration passed from Mitchell to Kelly; that Mitchell, who was the cashier of the First National Bank of Butler, subsequently made a declaration of trust in favor of said bank, to which Kelly was indebted. It did not appear that Mitchell was present when the assignment was made, nor was there any evidence to show, that the declaration of trust was made in pursuance of any previous agreement.
    The following points w’ere submitted by defendants, to which are subjoined the answers of the court:
    1. That an assignment for the benefit of creditors is not embraced within the acts which are forbidden if done to hinder, delay or defraud creditors.
    Ans. “Refused.” First assignment of error.
    2. That no act of David Kelly done before the execution of the deed of assignment, or judgments confessed, can render void the assignment subsequently made for the benefit of his creditors.
    Ans. “All.his acts immediately before or within a short time before the assignment was made, may be taken into consideration by the jury if they throw any light upon the question as to the motive in making the assignment. He may have prepared himself, hoping to conceal a portion of his estate. If the jury come to the conclusion that was done in this case fraudulently, then the assignment would be fraudulent, and intended to hinder, delay and defraud creditors in the collection of their judgments. With this view of it, already stated in our general charge, we negative that point also.” Second assignment.
    4. That the assignment of the Fry mortgages by Kelly, and other acts done by him before the assignment, cannot affect the assignment and render it void.
    Ans. “ We refuse to so instruct you. We have instructed you to the contrary ; acts which precede the assignment may be taken into consideration if they throw any light upon his motives in making the assignment.” Fourth assignment.
    6. That the deed of assignment to Allen Wilson is in proper form, and on its face appears to have been signed, executed, acknowledged and recorded within thirty days after its execution, and is, therefore, a formal lawful deed of assignment.
    Ans. “ This point may be affirmed as a proposition of law, but it is not applicable to this case. The formality and the execution of the assignment are not called in question. That the assignment made is formal, duly executed, acknowledged and recorded within the proper time may be admitted. That is not the question in the case. This point is not applicable to the case. The formality of the execution.of the assignment is not called in question ; it is the motive that prompted the act, whether it was done with intent that was good of intent that was not good.” Fifth assignment.
    7. ■ That if Allen Wilson accepted the duties and trusts imposed by the deed and the laws, gave bonds, filed an inventory and accepted the trust, the deed of assignment is valid, and the verdict of the jury should be for the defendant.
    Ans. “ We refuse to so instruct you. We state again that the formality of the deed of assignment and the regular proceedings of the assignee are not questions coming before the jury at all, because they throw no light upon the questions or inquiry here. While it may be all true that the assignee is going on and discharging his duty under the deed of assignment legally; that still does not answer the question whether or not the assignment made by David Kelly was made with a fraudulent intent by him to hinder, delay and defraud his creditors or not.” Sixth assignment,
    9. That a debtor has the right in law to prefer a creditor, and the assignment of the Fry mortgage to Alexander Mitchell, cashier of the First National Bank of Butler, for the use of the bank, a bona fide creditor to the extent of the assignment was neither fraud or evidence of fraud, but a lawful act which Kelly had the right to do.
    Ans. “ We answer that as we have in our general charge that the mere act of making an assignment of the mortgage might not in itself be an act of fraud. This point is not applicable to this case. The inquiry here is whether there was a fraudulent intent on part of David Kelly. The mere questioh whether he had a right to assign and transfer property for the benefit of a special creditor does not come up in the case. It is not applicable to an assignment to Alexander Mitchell, because he was not a creditor, therefore this point is not applicable to this case. The point is refused as not applicable to the case on trial.” Eighth assignment.
    10. That a deed of assignment for the benefit of creditors is not foeffment, grant, alienation, bargain or conveyance of lands, tenements, hereditaments, goods, chattels or lease, rent common or other profits of the same, nor a bond, suit, judgment execution, or any act or thing forbidden as intended to delay, hinder or defraud creditors, and the verdict must be for the defendant.
    Ans. “ We would make the same remark with regard to this point, as not applicable to the case on trial, consequently we refuse so to instruct you.” Ninth’assignment.
    The fourteenth assignment of error was the following portion of the general charge:—
    “ It appears in evidence that on the 7th of December, just one week before the assignment was made (the assignment was made on the 14th of December 1875, just one week before it is in proof), Kelly made a sale; at that time no judgments had been entered against him; he sold the most important and valuable of his possessions, a farm or tract of land, for the sum of $14,000. There were no judgments on the docket, as his creditors had confidence in him. It appears that in a very few days afterwards judgments were entered against him, which would indicate that judgment-notes were out at that time, or at least debts for which judgments were afterwards entered to the amount of nearly $50,000. When, in a very few days after, he made a sale of this valuable property or tract for $14,000 or thereabouts, judgments were entered.5'
    The plaintiff offered in evidence, inter alia, the record of an entry of judgment against Kelly to January Term 1876, to which the defendant objected, on the ground that it was not all offered, but only a portion thereof. The court admitted the evidence, which was the twentieth assignment of error.
    A number of assignments of error were made to the charge, the tenor of the instructions of which was that which pervades the answers to the foregoing points.
    The verdict was for plaintiff and defendant took this writ, among his assignments of error being’those above noted.

      MeQandless Grreer, for plaintiff in error.
    A general assign- • ment of all the property owned by an insolvent debtor for the benefit of creditors, is not embraced in the acts which are forbidden, if done to hinder, delay and defraud creditors. The voluntary assignment of property to hinder, delay and defraud creditors prohibited by law, is an assignment of the whole or a part of an insolvent’s property to a particular person, in order to prevent his creditors from having execution of it, and not a general assignment of all his property for the benefit of all his creditors.
    The evidence in the case shows that the only acts done by David Kelly, before the general assignment was made to Allen Wilson, was giving of judgment-notes to all his creditors, or nearly so, and the assignment of the Ery judgment and mortgage to Alexander Mitchell for the bank, all of which were lawful and proper acts, and done some time before the general assignment — on the 14th of December 1875. Therefore the second and fourth points of plaintiffs in error should have been answered in the affirmative.
    It is wholly immaterial with what intent or design David Kelly made the general assignment of all his property to Allen Wilson, for the benefit of all his creditors.
    In this case the deed of assignment is a general one of all Kelly’s property, in the usual and lawful form, executed and delivered to the assignee, Allen Wilson, for the benefit of all his creditors. The duties of the trust entered upon by the assignee — deed recorded, inventory filed, $300 set apart to Kelly under an order of court, and sale made of the personal property under the deed, the assignee cannot be affected by the intent of David Kelly in making the assignment.
    The judgments of the First National Bank of Butler, offered in evidence by the plaintiff unassailed, show that the bank, was a bona fide creditor of David Kelly to the whole amount of the judgment and mortgage assigned to Alexander Mitchell for these debts. Kelly had the right to make this assignment of the mortgage, and the bank through Mitchell had the right to receive it; and the transaction was neither fraud nor evidence of fraud, and the ninth point should have been affirmed.
    The assignment by Kelly of all his estate vested the title to the same in Wilson, the assignee, for the benefit of all his creditors; title thereby vested in all the creditors pro rata in the property assigned, and the intent with which Kelly made the assignment cannot defeat their title.

      Lewis Z. Mitchell, for defendants in error.
   Mr. Justice Mercur

delivered the opinion of the court, January 6th 1879.

This was an issue to try the validity of an assignment made by David Kelly to the plaintiff in error. The defendant alleged it was made fraudulently, with intent to hinder, delay and defraud the creditors of the assignor.

The assignment was general and for the benefit of all his creditors. It was regularly executed and acknowledged, and duly recorded on the same day. The entire good faith of the assignee is conceded. The effect is to impeach it by evidence of the acts and declarations of the assignor. Ilis acts and declarations are, undoubtedly, evidence in so far as they prove he has unduly controlled or changed the legal effect of the assignment. Beyond that they are not evidence. The statutory intent, given to the assignment, is to pass to the assignee, all the property of every kind, which the assignor owned at the time of the assignment. A preference, on the face of the assignment, of any creditor, other than those preferred by Acts of Assembly, would be void. An agreement with the assignee, at the time of its execution, that any of the property, which, legally or equitably, ought to pass by the assignment, should bo excluded from the inventory, and be left for the benefit of the assignor, would be fraudulent. This because the assignment itself would be contrary to the statute. If, prior to the assignment, the assignor had fraudulently conveyed or concealed any of his property, such acts would not impair the validity of a general assignment subsequently made. If the conveyed or concealed property can be recovered by the assignee, it should be for the benefit of creditors. If ho cannot recover it, then any creditor may pursue it in like manner as if the general assignment had not been made. The subsequent assignment does not condone any previous misconduct of the assignor. The Act of 1836 permitted preferences in assignments. The Act of 1843 declared preferences void, except as to claims of laborers. ' It has, however, been held that the confession of a judgment to one creditor, just before making a general assignment, and with a view of preferring such creditor, did not defeat the prior lien which he thereby acquired to the prejudice of other creditors: Blakesley’s Appeal, 7 Barr 449; Worman v. Wolfersberger’s Executors, 7 Harris 59. Hence, although the intention of the debtor was to remove from the operation of the subsequent assignment, a portion of his estate and his conduct produced that result, yet the validity of the assignment is not thereby impaired. The preference was not in and by the instrument, through and by means of which the debtor surrendered to his creditors all dominion over his property: Id. No law compels a debtor to make an assignment for the benefit of his creditors. It permits him so to do, and directs as to its effect when done. Prior to such action, except as against a bankrupt law, he has an undoubted right to prefer any of his creditors, by a conveyance or transfer of property or by a confession of judgment, although he may thereby hinder or for ever prevent his other creditors from collecting their just demands. In case of a general assignment,- the law contemplates that the assignor shall pass over all his estate of every kind which he then owns. When that is done the assignment is in accordance with law, and the effect given to it by law, cannot be in fraud of any of his creditors. ' Although the claims of some of his creditors may be ripe for execution, and the debtor have property out of which they might be collected; yet an assignment by which they will receive only a pro rata share with other claims, not even due, works no legal fraud. The fraud that is forbidden arises from acts done contrary to law or equity. It may result from a disregard of proper forms, or, if they be .observed,'from doing the acts with the intention of reaching a result not sanctioned by the authorities. As the law implies no fraud in a debtor transferring property to one creditor,, to the exclusion of his other creditors, before an assignment, and with a view of making it, so no inference of fraud, in the assignment, can arise from a transfer at any time, of all the property he then has, for the benefit of all his creditors. The policy of the law regulating assignments is that the property of an insolvent debtor shall be divided among all his creditors, rather than pay some in full, and others nothing. So effectual is an assignment for the benefit of creditors that if it be placed by the assignor or any one interested, in the office of the recorder of deeds of the proper county, within the prescribed time, it takes full effect, although the assignee is ignorant of it or refuses to accept the trust: Marks’s Appeal, 4 Norris 231.

If an -assignment be made in the form and manner provided by law, and duly recorded, so as to pass all the property of the assignor, we cannot see how the motive existing in his mind can affect its validity. If in morals the motive be a bad one, yet in law, it produces no forbidden result. In so far as it hinders or delays creditors, it is a lawful hindrance- and delay, and cannot be held fraudulent. The commission of a lawful act is not made unlawful by the ■fact that it proceeded from a malicious motive: Jenkins v. Fowler, 12 Harris 308; s. c. 4 Casey 176 ; Glendon Iron Co. v. Uhler, 25 P. F. Smith 467 ; Smith v. Johnson, 26 Id. 191.

Tlie conduct of the assignor which the learned judge appeal's to have thought the strongest evidence of fraud was a separate and distinct transaction occurring one week before the assignment was executed. It was the sale of a valuable tract of land to persons to whom he was indebted in a sum much less than he received for the land. There was also some evidence tending to prove his fraudulent concealment of the residue of the purchase-money. We think, however, that an assignment for the benefit of creditors can be impeached only for fraud in the assignment, or at the time of making it, so as to have attached to the instrument or affected its operation. An erroneous view of the bearing of this transaction on the validity of the assignment pervades the whole charge and controlled all the rulings of the court.

As an assignment may be fraudulent, although all the forms of law are complied with, the first, sixth and ninth assignments are not sustained. Nor do we discover any error in the recital of the evidence covered by the fourteenth assignment.

The general rule is that when part of a record is given in evidence, the whole shall be received, yet the rule is not so inflexible as to apply in all cases. It was stated by the judge, and not contradicted by the evidence, that the declaration of trust by Mitchell, although on the docket, was executed long after the assignment of the judgment to him. As he is not shown to have been present when that assignment was executed, and the declaration of trust is without date, and is not shown to have been executed in pursuance of a previous agreement, we cannot say there was error in its rejection. It appears that all other parts of the record were afterwards given in evidence. The twentieth assignment is not sustained. All the remaining assignments partake of one common error, and in so far as the alleged errors are in conflict with this opinion the assignments are sustained.

Judgment reversed, and a venire facias de novo awarded.

Chief Justice Agnew dissented.


author: Per Curiam.

text:
    Scott’s Appeal.
    A partner who goes out of a partnership and for a valuable consideration is indemnified by his partners against all debts and liabilities of the firm, stands in the attitude of a stranger as against a creditor of one of the partners for his individual debt, where judgment has been obtained since his outgoing, and is entitled to subrogation for a debt of the firm paid by him for which he was not liable as between himself and partners, at the time of leaving the firm.
    November 21st 1878.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson and Trunkby, JJ. Woodward, J., absent.

      Appeal from the Court of Common Pleas of Greene county: Of October and November Term 1878, No. 807.
    Appeal of Samuel W. Scott, Receiver of the National Bank of Waynesburg, from the decree of the court dismissing his exceptions to the report of the auditor appointed to make distribution of the proceeds of the sheriff’s sale of the real estate of Godfrey Gordon.
    The auditor found that B. E. Elenniken, who had been a member of the firm of Gordon, Campbell, Courtney & Co., during a period of about six months, retired from the firm in June 1872, leaving Gordon and Campbell still members, Courtney having also retired about the same time. That Elenniken’s withdrawal was entirely voluntary, with the mutual consent of the remaining partners, and with the agreement that he was to go out of the firm without profit, and that Gordon and Campbell, the remaining members were to pay the debts of the firm, including the rent of the store-room and warehouse which they had rented in December 1871, when the partnership was formed, from John Hays, in the city of Pittsburgh. That John Hays brought suits in the Common Pleas of Greene Co., Pa., to Nos. 298 December Term 1873, and 180 June Term 1874, for two quarters’ rent of the store-room and warehouse, and judgments obtained against Godfrey Gordon, B. E. Campbell and B. E. Elenniken, no service being had upon Courtney. The judgment of the appellant, Scott, against Gordon was to No. 212, June Term 1875. On April 6th 1874, and January 25th 1875, respectively, Elenniken paid the two judgments of Hays, and took assignments thereof. The auditor decided that Elenniken, holding these two judgments, was entitled to be subrogated to the rights of Hays as against Gordon and Campbell, and to share in the proceeds of Gordon’s property. Scott filed exceptions to this report which the court dismissed, and hence this appeal.

      Wyly, Buchanan Walton, for appellant. —
    If Elenniken upon the facts of the case, was not entitled to subrogationj the assignments would not give him that right: Himes v. Keller, 3 W. & S. 401; Fleming v. Beaver, 2 Rawle 132. And we contend that upon the facts he was not entitled to subrogation: Wallace’s Estate, 9 P. F. Smith 401; Lloyd et al. v. Galbraith et al., 8 Casey 103; Goswiler’s Estate, 3 P. & W. 200.

      O. A. Black, for appellee.
    Had Elenniken paid the Hays judgments without the formality of an assignment he would have been entitled to subrogation: McCormick’s Adm’r v. Irwin, 11 Casey 111; Frow, Jacobs & Co’s Estate, 23 P. F. Smith 459.
   The judgment of the Supreme Court was entered November 28th 1878,

Per Curiam.

A partner who goes out and for a valuable consideration is indemnified by his partners against all debts and liabilities of the firm, stands in the attitude of a stranger, as against- a creditor of one of the partners for his individual debt, whose judgment has been obtained since his outgoing. He is therefore entitled to subrogation for a debt of the firm paid by him for which he was not liable as between himself and partners at the time of leaving the firm.

Decree affirmed, with costs to be paid by the appellant, and appeal dismissed.


author: Mr. Justice Paxson

text:
    Lee versus Keys.
    1. Where a ease is submitted under the Act of May 14th 1874, providing “ for the submission of civil cases by agreement of the parties, to a referee, learned in the law,” as under the Act of April 22d 1874, “ to provide for the submission of civil cases to the decision of the court, and to dispense with trial by jury,” a writ of error brings up only questions of law, arising upon the rulings, relating to the evidence or to the law of the case, and the court cannot go behind the findings of fact, except where in a common-law trial before a jury, the assignment of error is such as can be heard and determined ; the writ brings up no question as upon a motion for a new trial.
    2. Jamison v. Collins, 2 Norris 259, followed.
    November 21st 1878.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson and Trunkey, JJ. Woodward, J., absent.
    Error to the Court of Common Pleas of Washington county: Of October and November Term 1878, No. 150.
    Joseph Keys sued out a writ of foreign attachment in assumpsit against J. G. C. Lee, summoning John W. Seaman as garnishee, and filed a declaration, setting forth, in the first count, a promissory note, and followed by the common counts for money had and received, &c. The defendant pleaded non assumpsit, and after-wards confessed judgment in favor of the plaintiff for $101.05, as of date September 21st 1876, which was entered accordingly. By agreement filed, the cause was referred to D. F. Patterson, Esq., as referee, under the Act of May 14th 1874, Pamph. L. 166. The facts of the case, as reported by the referee, are as follows:—
    Joseph Keys, the plaintiff,' executed a mortgage upon his real estate in Smith township, Washington county, Pennsylvania, in the penal sum of $14,000, conditioned for the payment of $7000, in three years from date, with interest semi-annually.- This mortgage, bearing date May 18th 1871, ivas to John S. Lambie, as mortgagee. It had endorsed upon it an assignment from John S. Lambie to Joseph Dilworth, trustee of J. G. C. Lee, dated May 18th 1871, and was recorded in the recorder’s office of Washington county on May 20th 1871. On September 21st 1876, the plaintiff paid the final payment in satisfaction of the mortgage to said John W. Seaman, attorney in fact for the defendant, and on the same day issued this attachment, claiming that he received only $6370 on account of his mortgage; that he paid his semi-annual instalments of interest about the time they fell due; that after the maturity of the mortgage he paid interest for one year, at the rate of ten per cent., upon the balance of the unpaid principal; and that he paid nine per cent, on the balance of the mortgage from May 1875 until it was satisfied.
    The defendant admitting the receipt of interest in excess of legal rate after the maturity of the mortgage, had confessed judgment for the excess of $101.05, and did not deny that the sum received by the plaintiff for the mortgage was $6370, but contended that having purchased the mortgage through George A. Berry, without knowledge that it was tainted with usury, if it really was so, and in full reliance on the plaintiff’s certificate of no defence, the plaintiff'could not recover.
    The referee found for the plaintiff the sum by him overpaid on the mortgage, viz., $971.32, with interest from the date of its payment, amounting to $1060.68.
    The following exceptions by the defendant to the finding of the referee, and here re-assigned for error as overruled by the referee, sufficiently indicate the material facts in the controversy:—
    1. The referee erred in finding the fact that George A. Berry acted as the agent of the defendant in the purchase of the mortgage of the plaintiff to Lambie, or in the negotiations preceding such purchase.
    2. The referee erred in -finding that Keys, the plaintiff, was not estopped from making any claim for usury against the defendant by his certificate of “no defence,” which accompanied the mortgage made to Lambie, which certificate with the mortgage was transferred by Lambie to the defendant’s trustee, there being nothing in the evidence to show that either. the defendant or his trustee had any knowledge of'the usurious character of the transaction between Keys and Berry.
    3. The referee erred in finding that there was due from the defendant to the plaintiff the sum of $971.37, of date 21st September 1876.

      Doug an ¿- Todd and James P. Sterrett, for plaintiff in error.—
    Exceptions to the finding of facts by auditors are frequently determined in this court. The referee having made the testimony a part of his report, we have excepted to the correctness of his finding that Berry was the agent of Lee, in the purchase of the mortgage and in the negotiations which preceded the purchase.

      L. Me Carr ell, for defendant in error.
    The question' of fact as to whether Berry was acting as the agent of the defendant in this transaction, and tlio extent of his authority, was submitted under the evidence to the referee; his findings thereon are as conclusive as the verdict of a jury in a case tried before the court, and will not be reviewed by this court: Fall Creek Coal and Iron Co. v. Smith, 21 P. F. Smith 230; Jamison v. Collins et al., 2 Norris 252. In the case at bar there are no rulings made by the referee during the hearing before him now before this court by proper exceptions, and his findings, to which exceptions are made, are conclusive and not the subject of review.
   Mr. Justice Paxson

delivered the opinion of the court, January 6th 1879.

It is not denied that the plaintiff in error after the maturity of the mortgage, received more than six per cent, interest. His confession of judgment in the court below for the sum of $101.05, is an admission of this fact. But it was contended that as to the sum of $630, the difference between the face of the mortgage and the amount the mortgagor received therefor, the taint of usury does not attach for the reason that the plaintiff’ purchased said mortgage in the market of a broker, and upon the faith of a certificate signed by the mortgagor that he had no set-off or defence to the mortgage. The difficulty in the way of this view of the case is that the referee has distinctly found that Berry was the agent of the plaintiff in error in the transaction, and that it was a direct loan by plaintiff through his agent, to the defendant in error at a usurious rate of interest. The whole case turns upon this question of fact. Error has been assigned to the finding of the referee upon the facts. But this is a writ of error under the Act of 14th May 1874, Pamph. L. 166, the third section of which provides that proceedings under it “shall in like manner and to the same extent, be subject to exceptions and writs of error or appeal, as in cases submitted in like manner to the court.” Jamison v. Collins, 2 Norris 359, was a. writ of error under the Act of 22d April 1874, Purd. Dig. 1939, Pamph. L. 109, entitled “ An act to provide for the submission of civil cases to the decision of the court, and to dispense with trial by jury.” It was held in that case, that in a writ of error under said act, this court could hear and determine only questions of law arising upon bills of exceptions to the rulings of the judge relating to the evidence or to the law of the case; that we cannot go behind his findings of fact, except where, in a common-law trial before a jury, the assignment of error is such as can be heard and determined by this eourt, and that the writ of error brings up no ques-. tion as upon a motion for a new trial. This is decisive of the present contention. The grounds assigned for error might be operative as reasons for a new trial in a case before a jury, but they raise no question of law for our consideration.

Judgment affirmed.


text:
    Pittsburgh, Virginia and Charleston Railway Co. versus Bentley.
    1. When a railroad company enters upon land, for the purpose of constructing its road, it is proper for the court to lay down a rule as to the value of a life estate therein, as an independent estate entitled to damages. Harrisburg v. Crangle, 3 W. & S. 460, followed.
    2. The true rule for valuing the damages as a whole, is the difference between the value of the property before the.making of the road, and its value after the road is made, as affected by it, and of this difference the life-tenant is entitled to the proportion of the whole, which the value of the life-estate bears to the whole difference.
    3. The net annual value of the premises, multiplied by the years of the life-tenant’s expectancy of life, and reduced by calculation to a present cash value, is not an incorrect mode of determining the value of .the life-estate as compared with the value of the remainder in fee.
    4. Permanent injuries, arising from severing parts of a farm that have necessary relation to each other and inconvenience are clearly elements in considering the value of the entire farm.
    November 21st 1878.
    Before-' Agnew, C. J., Sharswood, Merour, Gordon, Paxson and Trunkey, JJ. Woodward, J., absent.
    Error to the Court of Common Pleas of Washington county: Of October and November Term 1878, No. 259.
    This was an appeal from an award of viewers under the General Railroad Act.
    The Pittsburgh, Virginia and Charleston Railway Company was incorporated under the name of the Monongahela Valley Railroad Co., by Act of Assembly approved 8th April 1867. It had power “ to construct its railroad, with single or double track, from a point at or near the city of Pittsburgh, by such route as the board of directors may determine, to a point at or near Monongahela City, Washington county, and thence, up either branch of the Monongahela river, to a point at or near what is known as Rice’s Landing.” It may “extend its railroad to the West Virginia state line, whenever the board of directors may deem it expedient and necessary, and there connect the same with any railroad, or railroads, authorized by the state of West Virginia.”
    In pursuance of these powers this company completed its road to Monongahela City, and then endeavored to1 secure the necessary privileges in order to continue its construction up the Monongahela river.
    The plaintiff, Sarah J. Bentley, is the life-tenant of a tract of land containing 100 acres, situated in Union township, Washington county, Pennsylvania, and on the line of the road between Pittsburgh and Monongahela City.' The company, by its agents, .engineers, &c., entered upon this land in June 1872, and located their road, and completed its construction some time during that year. They occupy 2.7 acres by their, appropriation, and run through it a distance of 1970 feet. The road divides the farm, leaving 20 acres of bottom land between it and the river, upon which is erected the mansion-house, spring-house and other necessary buildings; and 77.3 acres across the road, from the river, part of which is bottom land. The county road is located above the railroad, and runs nearly parallel with it, at a distance of about 200 feet. The barnyard and barn of the plaintiff are situated on this part of the land lying between the county road and the railroad. The mansion-house is situated probably 100 yards, and the barn probably 50 yards from the line of the railroad. The frontage of the tract on the river is not very great, and the twenty-acre tract lies in the shape of a parallelogram, the distance along the river being from one-half to two-thirds greater than the distance from the river to the railroad, which ranges from 500 to 700 feet. The road passes through the farm by means of a “cut,” the extreme depth of which is nine feet, ranging from that to grade. The company have constructed a good and substantial crossing at the point where the road crosses the lane which leads from the mansion to the county road and to the barn, the .lane remaining the same as before the location of the railroad.
    As the defendants are subject, under the terms of their charter, to the provisions of the General Railroad Act of 1849, the plaintiff presented her petition to the Court of Common Pleas asking the appointment of viewers to assess her damages. The court entertained the petition and appointed viewers, who subsequently reported that the land appropriated amounted to 2.7 acres; that the annual value thereof was $8.15 per acre, and the aggregate value during the lifetime of the petitioner was $440, and that the petitioner had sustained a total damage, including the value of the land taken, of $900. From this award the defendant appealed. On the trial of the appeal the plaintiff testified that her age in June 1872, the date of the entry, was 52 years, and life-tables showing that her expectancy of life was 18.4 years, were offered in evi- - dence. She claimed the annual value per acre of the land appropriated for this period of time, and in addition the sum paid by her for the building of the fence along both sides of the appropriation, which she said amounted to $500. She also claimed damages for the inconvenience of “crossing at the lane,” stating, “We have to cross a great many times a day; cows are fed and kept at the barn and have to be brought to the house in the morning and evening to be milked. Trains have to be watched.” Also, for the cutting off of -water from one of her fields which fronts on the Monongahela river, and for the loss of drainage from the barnyard. She produced evidence that “six passenger trains passed each day;” that it would be “quite a difficulty and disadvantage to bring the cows to milk,” and that “the delay caused by having to halt or stop in crossing” the railroad was a great inconvenience, &c. The estimates upon these several items varied somewhat, but the average amount fixed by her witnesses upon this last item — “ the danger of ! .crossing the track”-^-was $25 to $30 per annum. The defendants endeavored to exclude this testimony by. asking the court, to charge the jury that damages for such possible loss or inconvenience, could , not enter into their verdict, but this the court refused to do, and |-this refusal formed the subject of one of the exceptions'filed.
    Several witnesses also testified that they grounded .their opinion as to the damage done to the plaintiff in part upon the fact that there was danger from fire being communicated by defendants’ locomotives. One says, “the barn was close to the road, and straw cannot be used below barn to feed stock.” Another says, “I thought the barn was in danger. Could not feed straw in barnyard.” The 'defendants requested the court to say to the jury that this element of possible loss could not enter into and form part of their verdict. This the court refused to do, and the refusal was laid as a ground for reversal.
    The defendants contended that, inasmuch as the plaintiff had herself fixed her expectancy of life at 18.2 years, and claimed dam? ages for injuries inflicted upon a term of that duration, the question .for the jury to consider was simply whether the rental value of her property taken as a whole had been depreciated by the construction of the railroad through it; that if the evidence showed that a term of that length would have brought as much after the construction as before, then the plaintiff could not recover. The court, drawing a distinction between.the “market value’-’ and the “rental value” refused to so charge, and this was assigned as error.
    The plaintiff, among others, submitted the following points, to which are appended the answers of the court, Hart, P. J.
    5. If the jury find that the plaintiff as tenant for life under her husband’s will, was in the actual possession and occupancy of the land at .the time the defendant company entered thereon and constructed their railway; and that there was no existing tenancy .or leasehold of any part thereof taken by the railway company for the purposes of their road, then the measure of damages for the appropriation of such land will be the fair annual value of the land so actually taken, during the period of her life expectancy, qualified ■ on the principle,of present payment, as of the time of the injury.
    Ans. “ We affirm this point.”
    7. That in addition to the compensation allowed to the plaintiff for the value of her interest in the land taken, the jury are to take into consideration and make just allowance under the evidence for injuries done to the plaintiff’s interest in the land not taken— the cutting off the communications of the farm — of the barnyard • and bam — the increased difficulties of access and inconvenience caused by the cut through the land — the shape and position of the fields — the cutting off of water — the obstructing of flow of manure-water into the meadow, &c.

      Ans. “We answer this in the affirmative.”
    The following were among the points of defendants, with the answers of the court thereto :
    5. That the plaintiff is not entitled to recover any damages arising from inconvenience of crossing the defendants’ tracks, or damages that may be done by sparks from defendants’ locomotives, and that any estimate made by the witnesses in this case based upon such inconveniences must be disregarded by the jury, it being in evidence that the defendants have already constructed a good crossing, upon this property.
    Ans. “ This point is denied. The plaintiff is entitled to damages for the inconvenience resulting from the crossing, and for inconvenience of access to the farm.”
    8. That in estimating the damage to the plaintiff’s interest in this land, the jury are to take the fair market value of said interest in the entire property, at the time of the appropriation by the defendant unaffected by the expected location of the railway, as compared with the fair market value of said interest in said property, taken as a whole, immediately after the completion of the defendants’ railway through it; and that the difference in these values is the true estimate of the damage sustained by the plaintiff.
    Ans. “ The eighth point is affirmed.”
    9. The plaintiff having shown that her expectancy of life at the time of the completion of defendants’ railway through this property was eighteen years, and claiming damages in this issue for a term of that extent, the jury are to find whether this property, taken as a whole, would rent for as much for such term immediately after the construction of the defendants’ railway, as affected by such construction, as it would have rented for, for such term, before location of defendants’ railway; and if they believe from the evidence that it would rent for as much after as before, their verdict must be for the defendants.
    Ans. The true test is the market value, of which the rental value is evidence.”
    In the general charge the court, inter alia, said:
    “ Owing to the peculiar, and I may say, novel, character of the case, we have admitted evidence, which, though not bearing directly upon the issue, does yet shed some light, and may help the jury somewhat in arriving at a just conclusion. For instance, we have admitted testimony to show the comparative value of the land immediately before the construction of the defendants’ road, and as unaffected by it, and the value of the same land immediately after, and as affected, by the building of the road. Now, this affords only an imperfect standard, by which to judge of the injury done to the plaintiff’s life estate, or of the advantages accruing to it from the railroad. For example, one result of the construction of the road might be to obstruct the mining for coal, stone or other minerals, in a way to cause serious detriment to the estate in remainder, but none at all to the life-estate; because the life-tenant has no right to open mines and work them. The same thing might be true of valuable timber taken by the company, to the injury of the fee— though not to the detriment of the life-tenant, who has no right to use any more timber than is necessary for house use, or for repairing and fencing. So, on the other hand, the construction of the road might greatly benefit the estate in remainder, without any advantage to the life-estate.
    “We have also admitted evidence as to the rental value of the whole tract.
    “ A great, deal of testimony has been received also in regard to the mariner in which the road traverses the land; the cost of necessary fencing; the cutting off of plaintiff’s supply of water for her residence, and the consequent inconvenience to her; the cutting of the land in the vicinity of the road into small fields; the inconvenience resulting from the road passing between the house and outbuildings ; the cutting off of springs which supplied some of the fields; the draining of the barnyard into the railroad cut.
    “ Now all this evidence was admitted because, in the judgmént of the court, it all shed more or less light upon the question which you are to decide. That question is, what, if any damages, is the plaintiff entitled to for injury to her life-estate, resulting from the construction of defendants’ road through the land devised to her for life ? Where the plaintiff owns the land in fee simple, the measure of damages has been held by the Supreme Court in a great number of cases, to be the difference between the value of the land before the road was built, and its value after the road is finished.
    “By analogy the measure of damages in this case would be the difference in value of the plaintiff’s life-estate before and after the road was built. The difficulty is how to apply this rule. It will be for you to do so; and to ascertain from all the evidence whether or not the value of the life-estate was enhanced by the building of the road, and, if you find it was so enhanced, then you will set that advantage off against any actual damage done to the plaintiff ’s life-estate. If the advantages exceed in value the amount of ddmage done, then your verdict would be for the defendant. But, if the damages exceed the advantages, then your verdict would be in favor of the plaintiff for the difference, after subtracting one from the other, with interest on that difference to the date of your verdict.
    “ In determining this question, you will allow the plaintiff for the value of her life-estate in 'the 2.7 acres appropriated; also for what damages you may think she is entitled to, on account of the various inconveniences of which I have spoken; you will then determine whether her life interest has been enhanced by the construction of the road, and if so, to what extent.
    “ We are asked to say to you, that you are to take into the account only such damages as are special to this particular property. That is true; but then advantages, if proved to have accrued to this property, are to be allowed, although there may be evidence that similar advantages have resulted to other land in the vicinity.
    “ Evidence has been laid before you, of the life expectancy of the plaintiff at the date of the construction of the road.
    “ She was then fifty-two years of age, and her expectation of life was at that time, eighteen and four-tenths years. Now, this evidence was admitted in order to furnish you an additional mode or rule, by which to estimate the damages, in case you should find damages for the plaintiff beyond advantages. It is also applicable to an estimate of the value of the life estate. Perhaps it will furnish you as good a guide as anything else in the case to enable you to reach a satisfactory conclusion.”
    The verdict was for plaintiff for $1349.58, and after judgment thereon, defendants took this writ and assigned for error the answers to the above points of plaintiff, and to the eighth and ninth points of defendants.

      A. M. Todd, for plaintiffs in error.
    If judicial authority can fix any rule, the series of adjudged cases, from Thoburn’s case, 7 S. & R. 411, down to Harvey’s case, 11 Wright 434, has established the measure of damages for building a railroad through a man’s land to be the difference between the value of the land before the road was built, and its value after the road is finished: Hornstein v. A. & G. W. Railroad Co., 1 P. F. Smith 87; Turnpike Road v. Brosi, 10 Harris 29.
    By reason and analogy, the rule as to the measure of damages done to the interest of a life-tenant, would be the difference between the "rental value of the term before the road was built and its value after the road is finished.
    This being the proper question for the jury, of what importance was it whether the 2.7 acres of land appropriated were worth annually to the tenant $10, $15 or $50, provided the rental value of the remaining 97.3 acres was equal to, or greater than, the rental value of the entire one hundred acres before the location of defendant’s road?
    The contention is that, admitting the loss of land and the existence of inconvenience, the rental value of the remaining 97.3 acres is largely enhanced fey reason of the facilities afforded by the railway, and the loss and inconvenience more than compensated. The unqualified affirmance of the plaintiff’s fifth and seventh points established a different rule as to the measure of damages than that contended for, and tended to confuse and mislead the jury.

      The inconvenience of crossing defendants’ tracks, is not a proper subject for the assessment of damages: Watson v. P. & C. Railroad Co., 1 Wright 473; E. P. Railroad Co. v. Hiester, 4 Id. 53; Patten v. N. C. Railway Co., 9 Casey 426; Boyd et al. v. Negley, 4 Wright 377.
    The other proposition contained in the defendants’ fifth point is equally true, to wit: that the plaintiff cannot recover for possible loss from fire communicated by sparks from passing locomotives: Sunbury & Erie Railroad Co. v. Hummell, 3 Casey 99; Boyd et al. v. Negley, 4 Wright 377; Lehigh Valley Railroad Co. v. Lazarus, 4 Casey 203: Patten v. The Northern Central Railroad Co., 9 Id. 426.
    It is true that the court did charge the jury, in answer to points presented, that the difference in the market value of the plaintiff’s • interest in the land, before and after the location of the road must be considered by them; but it is urged that the refusal to charge as requested in the ninth point presented by the defendants (fourth -assignment), tended to confuse and mislead the jury, and the denial of that point, coupled with the affirmance of the plaintiff’s fifth and seventh points (first and second assignments), gave to the jury two rules for their guidance; and if it be urged that the rule as laid down in answer to the defendants’ eighth point is correct (as it undoubtedly is so far as it goes), then the second rule is clearly incorrect. And if the jury ignored the correct and adopted the incorrect rule then the case stands as though no correct rule had been given.
    To ascertain whether the jury adopted the rule as insisted upon by the plaintiff and approved by the court, it is only necessary to ■look at the amount of their verdict and segregate it in accordance with the plaintiff’s testimony.

      Thomas H. Baird and J. L. Judson, for defendant in error.—
    - The vice of the argument on the other side is, that it seeks to obliterate all distinction between a life-tenancy and a term for years. As tenant for life, Mrs. Bentley held a peculiarly valuable interest in this land,- inasmuch as it was precisely commensurate with her need, and was identified with all the accumulated comforts and advantages of a lifelong home. For all these we are well aware she could recover no damages. But under her tenancy, she could either rent the land, house, &c., and pursue some other occupation to add to her means of living, in which case the rental value of the land would have been her measure of damage perhaps, leaving her lessee to recover for injuries to his use and enjoyment of it: Ripka v. Sergeant, 7 W. & S. 9; injuries to crops, fences, &c., and by occupation of land: Plank Road v. Thomas, 8 Harris 91; Turnpike v. Brosi, 10 Id. 29; loss of term, &c.: North Pennsylvania Railroad Co. v. Davis, 2 Casey 238. Or, she could — as in fact .she did— retain the land, employing upon it the necessary capital in agricultural implements, teams, cattle, and other stock; hiring labor of others and using her own capabilities in carrying on business, and thus realize for herself the profit of the tenant in addition to that of the landlord, and be entitled to corresponding damages for loss of both.
    No rule is more firmly established in cases of this kind, than that which requires all estimates of values to be made as of the time of the injury: Thoburn’s Case, 7 S. & R. 411; Shrunk v. Schuylkill Navigation Co., 14 Id. 71; Zimmerman v. Union Canal Co., 1 W. & S. 346. And in the cases where the amount of damages depends on the length of a life in being, the rule is, to ascertain the value for a year, as of the time of the injury, and when the annual money value has been found, to give as damages its present worth, according to the expectation of life, as ascertained by the mortuary tables of well-established reputation: Macon & Western Railroad Co. v. Johnson, 38 Geo. 409; How v. How, 48 Maine 428 ; Sedgwick on Damages 460, note 3; and see Thompson v. Stevens, 21 P. F. Smith 161, 169.
    While we freely admit that there can be no damages allowed for crossing the tracks of a railroad laid at grade, either on a farm or in the streets of a town, yet a very different rule prevails where such track is laid in cuts or upon embankments: Railroad Co. v. Boyer, 1 Harris 497; Watson v. P. & C. Railroad Co., supra; W. P. Railroad Co. v. Hill, 6 P. F. Smith 460; W. & R. Railroad Co. v. Stauffer, 10 Id. 374; Hoffer v. Penn’a. Canal Co., 6 Norris 221.
   The judgment of the Supreme Court was entered November 28th 1878,

Per Curiam.

In the Borough of Harrisburg v. Crangle, 3 W. & S. 460, it is held that where there is a life-estate, and a remainder in foe, each owner is entitled to damages for his own estate and security. Hence it wras proper for the court to lay down a rule as to the valuation of the life-estate in this case as an independent interest entitled to damages. Wo cannot say that the net annual value of the premises multiplied by the years the life-tenant’s expectancy of life, and reduced by calculation to a present cash value is an incorrect mode of determining the value of the life-estate as compared with the value of the remainder in fee. This is all we understand the court did in the answers to the points. But the court gave the true rule for valuing the damages as a whole, which is the difference between the property before the making of the road and its value after the road is made, and as affected by it. Of this difference the life-tenant is entitled to the proportion of the whole which the value of the life-estate bears to the whole difference. In this way the owner of each estate is paid his just proportion.

We do not understand that the court, in the answers assigned for error, intended to contradict the general rule as to the measure of value, or sum of the entire damages, after a consideration of advantages and disadvantages, but merely to say what may enter into the consideration of the jury, as elements in considering the advantages and disadvantages, and arriving at a general result. Clearly permanent injuries arising from severing parts that have a necessary relation to each other, inconveniences and other matters, are elements in considering the value of an entire farm.

Judgment affirmed.


text:
    Brown et al. versus Torrence.
    1. Without a contract or some relation of privity as to the use to he made of land sold, the vendee stands to his vendor just as he does to others, and the maxim applies sio utere tuo ut alienum non Icedas.

    2. Where land is injui-ed by negligence in mining coal underneath it, or the crops and vegetation thereon are injured by the heat and smoke ■from coke ovens, the owner is entitled to a verdict for such damages as the jury believe from the evidence he has thereby sustained.
    November 21st 1878.
    Before Agnew, C. J., Sharswood, Mercur, Gordon, Paxson and Trunkey, JJ. Woodward, J., absent.
    Error to the Court of Common Pleas of Fayette county: Of October and November Term 1878, No. 106.
    Case by David M. 'Torrence against Samuel S. Brown, impleaded with J. M. Schoonmaker, administrator of the estate of William H. Brown, deceased.
    At the trial before Willson, P. J., it appeared that on the 14th day of June 1870, John K. Ewing sold and conveyed to David M. Torrence, the surface of a tract of land situate in Tyrone township, Fayette county, containing ninety-eight acres j for $7000. Prior to this, in 1867, Ewing had sold the coal underlying this surface to William H. Brown, deceased, one of whose administrators is plaintiff in error. Before the sale by Ewing to Torrence, William H. Brown had erected coke-ovens on a portion of the surface sold from the original tract of which the Torrence purchase was a part, and was engaged in the manufacture of coke at the time of the sale by Ewing to Torrence, using coal from under the Torrence surface. On the 14th day of June 1870, David M. Torrence conveyed to John M. Cochran five acres and fifty-eight perches, from the western pai’t of his land, for the purpose, as the plaintiff in error alleged, of erecting coke-ovens thereon to be used in the manufacture of coke. For this he received $200 per acre. These five acres and fifty-eight perches John M. Cochran subsequently conveyed to Brown & Cochran, a firm of which the said William H. Brown was a member. Between two and three hundred coke-ovens were erected by Brown & Cochran on these five acres, in 1871 and 1872, and they have since been almost continually used in the manufacture of coke. The first-mentioned ovens and improvement are known as Sterling Mines, the latter as the Jimtown Works.
    Torrence brought this action for damages for alleged injury, by' the cracking and sinking of the surface of his land, by the mining of the coal underneath it, and the loss thereby of a surface stream ; for the pollution of Hickman run, above his land, by the sulphar water from the pit’s mouth, and by the ether and refuse from the ovens on the five-acre-tract; and for the injury to all vegetation upon his farm by the smoke, gas, and heat from the ovens at both Sterling Mines and Jimtown Works.
    The plaintiff, inter alia, submitted the following points, to which are appended the answers of the court:—
    3. That if the jury believe, from the evidence, that defendants’ intestate mined the coal under plaintiff’s land, and removed the same, without leaving proper and sufficient ribs or pillars to support the surface, or, in lieu of ribs and pillars, set up posts or other supports of insufficient number and strength to support said surface in consequence of which said surface fell in, cracked and sunk to the damage thereof and of the other property of plaintiff, then the plaintiff is entitled to a verdict for such damages as the jury believe, from the evidence, he has sustained, not. only in the injury to land actually fallen, sunken or cracked, but the effect thereof uoon the whole of plaintiff’s land.
    Ans. “Affirmed.”
    6. That if the jury believe, from the evidence, that the water of Hickman run, where it passes over plaintiff’s land, has been corrupted, fouled and polluted, and rendered unfit for use, by reason of the water, ashes, dirt, &c., from defendants’ intestate’s mines and coke-works being discharged and emptied into said run, then the plaintiff is entitled to recover damages therefor to such an amount as the jury believe, from the evidence, said plaintiff has sustained.
    Ans. “If defendants’ intestate polluted Hickman run, the plaintiff is entitled to recover at least nominal damages, and if there is any evidence showing specific damages with reference to the injury done plaintiff by defendants’ intestate polluting that run, then the plaintiff would be entitled to more than nominal damages.”
    7. That if the jury believe, from the evidence, that the land or crops of said plaintiff, or any portion thereof, have been injured by the heat, smoke or dirt from the coke-ovens of the defendants’ intestate, the plaintiff is entitled to a verdict for such damages as the jury believe, from the evidence, he has sustained thereby.

      Ans. “Affirmed.”
    Defendants’ sixth point, which the court refused, was as follows:
    That if plaintiff’s vendor, before the sale to plaintiff, had sold a part of his land and the coal under the residue to the defendants’ intestate, and if, at that time, there were some coke-ovens in use on ’ that part of the land so sold, and the defendants’ intestate had erected others before the sale to plaintiff, and was then using them in the making of coke, the plaintiff cannot recover in this action for any damage done to his land by the smoke and heat caused by the continued use of said ovens in an ordinary and proper manner.
    Verdict for plaintiff for $1150, and after judgment thereon, defendants took this writ, assigning for ■ error, inter alia, the answers to the foregoing points.

      William IT. Playford and Charles E. Boyle, for .plaintiffs in error. — We contend that Torrence had no right to recover for injury done his crops and fruit-trees by the smoke produced by the manufacture of coke from coal sold from under his land for that purpose by his vendor, and with the business actually going on at the time of his purchase.
    [Chief Justice Agnew. — Do you mean to say that when he bought he had notice that the coke was to be burned ?]
    We say that the coke was being burned when he bought, and he did so with his eyes open.
    [Chief Justice Agnew. — Was there any evidence to sustain the seventh point ?]
    There was.
    In Sanderson v. The Pennsylvania Coal Co., 5 Norris 401, this court laid considerable stress on the fact that Sanderson, before he purchased the tract of land, traced Meadow brook to its source, and that its purity was one of the inducements to his purchase. This was several years before the establishment of the colliery from which the water came that polluted Meadow brook. In the language of the opinion in this case, is not the one at bar exceptional in its surroundings and facts ? From necessity, must not the principles of that case be relaxed ? In our case the coal was sold out before Torrence purchased, to be mined. To mine it, was to discharge the sulphur-water held by the coal; if the right to discharge it was an incident to the grant, the natural flow of it after it left the pit’s-mouth could work no injury making Brown & Cochran answerable in damages.

      Nathaniel Ewing, for defendant in error. —
    We claim that if defendants wish to carry on this business, they must either purchase the adjoining lands or pay for the privilege of carrying it on, to the lando.wner, and to sustain this position we rely upon the following authorities: Richards’s Appeal, 7 P. F. Smith 113; St. Helen’s Smelting Company v. Tipping, 11 H. L. Cas. 642; Bainbridge on Mines, § 468; Smith v. Phillips, 8 Phila. 10, and cases there cited; Sanderson v. Pennsylvania Coal Co., supra.

    [Justice Sharsavood. — There is nothing in the testimony here to show the nature of the damage done ?]
    We claim that the vegetation on seven or eight acres near the mine was destroyed, as well as the trees, by the heat and sulphurous smoke.
   The judgment of the Supreme Court was entered, November 28th 1878,

Per Curiam.

The verdict of the jury establishes the fact that the surface of the plaintiff’s land was injured by the negligence of the defendants’ intestate in mining the coal underneath, and that the grass and vegetation have been injured by the deleterious gases thrown off from the coke-ovens of the defendants’. It does not appear from the evidence that the plaintiff stood in any relation of contract or of privity to justify these injuries. The mere fact that one man sells land to another cannot of itself justify any use the vendee afterwards chooses to apply his land to. He stands to his vendor without a contract, or some relation of privity, just as he does to others, and the maxim applies sic utere tuo, ut alienum non Icedas. Judgment affirmed.