author: Per Curiam,

text:
    Maloney’s Estate.

      Executors and administrators — Partnership between executor and testator — Accounting for profits.

    Where an executor, who was the partner of his testator, has the deceased partner’s interest in the partnership appraised, but does not immediately sell it, and then continues the business until the expiration of the contract which was the firm’s only business, when he sells the decedent’s interest to his own son, and thereafter enters into a new partnership with his son to carry on a new business under an entirely new contract, and none of the estate’s money is used in the new business, the executor will be charged with a share of the profits to the deceased’s estate up to the formation of the new partnership, but will not be liable for any profits to the estate thereafter.
    Argued Oct. 16, 1911.
    Appeal, No. 22, Oct. T., 1911, by The Fidelity Title & Trust Company, Guardian of John J., Edward D., Anne V., and Agnes C. Maloney, Minors, from decree of O. C. Allegheny Co., Jan. T., 1910, No. 112, dismissing exceptions to adjudication in Estate of John Maloney, deceased.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Exceptions to adjudication.
    Miller, J., filed the following opinion:
    The principal question is whether the accountant, who was also, the surviving partner of the decedent, should be surcharged with the profits arising out of the partnership business, which he continued to conduct without a distinct settlement of the partnership business, and if so, for what length of time.
    At the decedent’s death, October 28, 1908, he was a half partner with the accountant, whom he made his executor, in the business of selling coke, under the firm name of T. D. Maloney & Company.
    This business was based entirely on a subcontract the partners had with one who had an original contract from the Philadelphia Gas Company. Their place of business was on the property of said gas company, the use of which was a right incidental and necessary to the coke contract.
    The contract existing at the time of decedent’s death, expired by limitation on June 1, 1909, having run some four or five years before. After the decedent’s death the accountant changed the name of the firm, striking out “and company,” and leaving the business in his own name. He so carried the bank accounts and transacted the business until after June 1, 1909, when he took in his son as a partner, obtained a new contract similar to the former one, and operated the business under the firm name of T. D. Maloney & Son.
    He did not close the partnership account after the death of John Maloney, nor did he as surviving partner settle the partnership affairs. After he took his son into partnership, he transferred to him the interest of the decedent for $2,000, taking his son’s note; this interest the son has been, and is paying out of his share of the profits of the business. Under date of July 2, 1909, he caused an appraisement to be filed in the register’s office of the estate of decedent which came into his hands, wherein it appears that the decedent’s half in the firm of T. D. Maloney & Company was appraised as to capital in the sum of $2,000, and as to other assets consisting of horses, wagons and other general partnership assets, at $412.05. He mingled the assets of this partnership business after the death of his partner with his own, keeping all bank accounts in his own name. For a part of the funds which he collected and charged himself, it is admitted that interest should be added at the same rate that he was receiving interest from the banks, to wit, three per cent.
    It was the custom of the partners to make quarterly settlements between themselves and divide or charge off their net profits; this last settlement was made as of October 1, 1908, and John Maloney received his share of the profits to that time.
    The net profits made by the accountant after the death of the decedent are as follows:
    For the months of October, November and December, 1908,......$1,500.05
    For the months of January, February and
    March, 1909,.....’ 1,423.25
    For the months of April, May and June, 1909, being the termination of the contract existing at the . time of the death of John Maloney, . . . . . . . . 2,249.09
    A total of.....$5,172.39
    After June, 1909, under the new contract made when he took in his son as a partner, and charged himself with the inventory value of the half interest of John Maloney, the profits to April 1, 1910, are admitted to be $13,183.23.
    If the accountant, as surviving partner, had followed the usual and prescribed course, he would have duly settled the partnership as between himself, the surviving partner, and as the executor of the deceased partner: Williams’ Est., 23 Pitts. Leg. J. 118.
    In such settlement, conceding that the death of John Maloney dissolved the partnership, yet it was the duty of the surviving partner to obtain the fullest benefit and advantage of all decedent’s contracts, which were a part of the assets of the partnership; he would not have been justified in treating the unexpired contract, the sole assets of this partnership, as.of no value to anyone but himself.
    Having failed to adjust the partnership as surviving partner, having seen fit to conduct the business of the partnership with the partnership assets, and not having caused either the settlement of the partnership, nor an appraisement of the partnership, of the deceased partner’s interest to be made and filed until July of 1909, the conduct of the business by him in this manner, during this period, must in equity be treated as a partnership business, and the estate has a right to elect, sharing in the profits during the period rather than demanding interest on the capital of the deceased partner. Accountant will be surcharged with one-half of the admitted profits under the old contract, viz.: $5,172.39, and with interest thereon from July 1, 1909.
    During the period from decedent’s death until the termination of the contract, the survivor carried on the business practically with the partnership funds and is accountable to the estate of the deceased partner for a share of the profits: Brown’s App., 89 Pa. 139.
    The appraisement of the decedent’s interest in the partnership, and the transfer thereof to his son at the appraised price, must be treated as a termination of the accountant’s liability as surviving partner; the new partnership began an entirely new contract; it is immaterial that it was made between the same parties, or that its terms are similar to the old contract; as a fact it was not a part of the old partnership assets; therefore the estate is not entitled to a share in the profits after June, 1909, made by the new firm, under the new contract.
    On exception to the adjudication, Miller, J., filed the following opinion:
    In so far as the accountant had not put the appraised value of decedent’s interest in a separate account and kept it in his individual name with his own funds, it was, strictly speaking, commingled; but in view of the fact that he did not use this fund, or any part of it, in the business of the new firm after June 1,1909, that he charged himself with it; held it for the benefit of this estate, and accounts for it, as of the time of the appraisement, no basis is furnished for the claim, that after death had dissolved the partnership, after the accountant is made to settle for profits up to the termination of the single contract, constituting this entire partnership business, he is further bound to account for profits made by the new partnership, on the new contract.
    It is immaterial on what terms or to whom he sold the deceased partner’s interest, if in the absence of fraud he obtained full value therefor; charging himself with the amount thereof relieves the estate of concern as to how he will be paid, whether he is paid at all, or whom he sees fit to take into partnership.
    In Brown’s App., 89 Pa. 139, there was a general partnership business, continued by the representatives of the deceased partner for many years, with a distinct use of the partnership funds during that period. The facts here show a partnership limited to one thing, dealing with one customer under a distinct contract that expired at a specified time, and the funds of the estate were not used by the new partnership.
    The new contract afterwards made by the accountant had no connection with the dissolved partnership; it was not a continuance of the former partnership business with partnership funds; no right of renewal on the coke contract is shown, either in the estate, or in the surviving partner, after June 1, 1909. Certainly the law does not compel or require accountants of decedents’ estates, in the absence of testamentary authority, to embark in new business ventures with trust funds.
    January 2, 1912:
    Nor is this the case of a tenant’s right in a renewal of a lease as an asset incident to an existing lease: Johnson’s App., 115 Pa. 129. Even conceding that the expectancy of renewal was an asset, and that it was accountant’s duty to renew, Johnson’s App., 115 Pa. 129, the exceptants furnished no evidence of the value of this expectancy in the nature of good will, or otherwise. It is not apparent that the profits made by the new partnership, under the new contract, are any evidence of the value of the expectancy of renewal.
    The exceptions must therefore be dismissed.

      Error assigned was in dismissing exceptions to adjudication.

      William A. Jordan, with him Thos. D. Chantler and W. H. McClung, for appellants.
    If the survivor of a partnership carries on the concern and enters into new transactions with the partnership funds, he does so at his peril, and is accountable to the estate of the deceased partner for the capital, with a share of the profits, or with interest: De Haven’s App., 34 Pitts. Leg. J. 211; Hermes v. Hermes, 36 Pitts. Leg. J. 265; Heager’s Est., 15 S. & R. 65; Johnson’s App., 115 Pa. 129.
    The chance or opportunity of renewal of the old contract is, in itself, a distinct asset: Johnson’s App., 115 Pa. 129; Mueller’s Est., 190 Pa. 601; Brady’s Est., 21 Pa. Superior Ct. 397; Graeser’s Est., 230 Pa. 145; Heager’s Est., 15 S. & R. 65; Brown’s App., 89 Pa. 139; Lindsay’s Est., 210 Pa. 224; Harbster’s App., 125 Pa. 1.

      W. B. Rodgers, with him D. C. Reardon, for appellee.
   Per Curiam,

The decree of the orphans’ court is affirmed for the reasons stated in the opinion of Judge Miller.


source: Caselaw Access Project

author: Pan Curiam,

license: Public Domain

text:
    Bank of Millvale v. Ohio Valley Bank, Appellant.

      Banks and banking — Stockholders—-Lien on stock — Statutes—Repeal— Acts of May IS, 1876, P. L. 161, and June £4,1895, P. L. £58.

    1. The lien which a state bank organized under the Act of May 13, 1876, P. L. 161, has upon the shares of capital stock owned by its stockholders has been taken away by the Act of June 24, 1895, P. L. 258.

      Constitutional law — Title of statute — Banks and banking — Act of June £4,1895, P. L. £58.

    2. The Act of June 24,1895, P. L. 258, entitled “An Act relating to and regulating the issue and transfer of certificates of stock by companies incorporated under the laws of the commonwealth,” is sufficient in its title to embrace the repeal of the lien on shares of capital stock of state banks given by the Act of May 13,1876, P. L. 161.
    Argued Oct. 16, 1911.
    Appeal, No. 24, Oct. T., 1911, by defendants, from judgment of C. P. No. 1, Allegheny Co., Sept. T., 1910, No. 905, for plaintiff on case stated in suit of Bank of Millvale v. Ohio Valley Bank, a Corporation, W. D. Sharp, President, and J. H. Bragdon, Cashier.
    Before Fell, C. J., Brown, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.

      Case stated in mandamus proceedings to compel the transfer of stock.
    From the case stated it appeared that W. H. Graham owned twenty-five shares of the stock of the Ohio Valley Bank, a bank incorporated under the banking laws of the state of Pennsylvania. On March 27, 1900, Graham pledged these shares as security for a loan. Subsequently he defaulted on the loan, and the certificate was sold and became the property of the Bank of Millvale. On April 2, 1900, Graham made a promissory note to the Ohio Valley Bank upon which he defaulted. The Ohio Valley Bank claimed a lien upon Graham’s stock, and refused to transfer it to the Bank of Millvale. The latter bank thereupon instituted these proceedings.
    Ford, J., filed an opinion which was in part as follows: The question involved is whether or not a state bank organized under the general banking act of 1876 has a lien upon the shares of capital stock owned by a stockholder to the bank, or whether the lien to which banks are entitled pursuant to sec. 21 of the act of 1876 has been repealed and taken away by the provisions of the act of 1895.
    The Act of May 13, 1876, P. L. 161, under which the plaintiff and defendant banks are incorporated, is entitled:
    “An Act for the incorporation and regulation of banks of discount and deposit.”
    The act authorizes and directs the appointment of a president and cashier, and by sec. 21 provides that:
    “No shareholder shall sell or transfer any shares in the capital stock held in his own right so long as he shall be liable either as principal, debtor, surety or otherwise to the corporation, for any debt without the consent of a majority of the directors, nor shall such shareholder when liable to the corporation for any debt that is overdue and unpaid be entitled to receive any dividend, interest or profit on such shares, as long as such liability shall so continue overdue, but all such dividends, interest and profits shall be retained by such corporation to discharge such liabilities.”
    This section should be considered in connection with sec. 10 of the Act of April 16, 1850, P. L. 477, which provides that “no stockholder indebted to the bank for a debt actually due and unpaid shall be authorized to make a transfer or receive a dividend until such debt is discharged or security to the satisfaction of the directors given for the same.”
    It was held in Klopp v. Lebanon Bank et ah, 46 Pa. 88, that the Act of April 16, 1850, P. L. 477, was intended mainly for the security of the bank. “The right of a bank to prevent such transfer or payment became absolute as soon as any such debt became due and payable and the legal title to the stock remains in the bank for its own security until payment.”
    It is conceded that the defendant bank may refuse a transfer and as security retain title to the stock, unless the provisions of sec. 21 have been repealed by the Act of June 24, 1895, P. L. 258.
    The act 'of 1895 is as follows:
    “Section 1. Be it enacted, etc., That any stockholder of any company incorporated under the laws of this Commonwealth shall be entitled to receive a certificate of the number of shares standing to his, her or their credit on the books of the corporation, which certificate shall be signed by the president or vice president or other officer designated by the board of directors, countersigned by the treasurer and sealed with the common seal of the corporation, which certificate or evidence of stock ownership shall be transferable on such books at the pleasure of the holder, in person or by attorney, duly authorized as the by-laws may prescribe, subject, however, to all payments due or to become due thereon; and the assignee or party to whom the same shall have been so transferred shall be a member of said corporation and have and enjoy all the immunities, privileges and franchises and be subject to all of the liabilities, conditions and penalties incident thereto, in the same manner as the original subscriber or holder would have been. And upon a sale of such stock in satisfaction of any debt for which it is pledged the purchaser shall have the right to compel a transfer of such stock upon the. corporation books and the delivery of a proper certificate therefor.
    “Section 2. That all laws or parts of laws inconsistent herewith be and the same are hereby repealed.”
    In Sproul v. Standard Plate Glass Co., 201 Pa. 103, the defendant was a manufacturing corporation and claimed a lien upon stock to which Sproul was entitled, for a debt contracted prior to the passage of the act of 1895. It was held that the act had no retroactive effect so as to change the rights of the parties prior to the passage of the act, but Mr. Justice Mitchell, in construing the act, said:
    “ The Act of June 24, 1895, P. L. 258, provided for the transfer of certificates of stock at the pleasure of the holder as the by-laws may prescribe, 'subject to all payments due or to become due thereon,’ and then contained the provision in regard to purchasers of sales, in satisfaction of debt. . . . The only repealing clause is the general one of all laws inconsistent herewith, but as the act of 1895 is upon the same subject and in a large part in the same words as sec. 7 of the Act of April 29, 1874, P. L. 73, but gives an absolute right of transfer inconsistent with the necessity of consent by the board of directors, this requirement of the act of 1874 is necessarily repealed.”
    In the present case the question differs from the question in Sproul v. Plate Glass Company in that the stock is that of a bank of discount and deposit organized under the act of 1876 and not under the general corporation act of 1874.
    Prior to the act of 1895, corporations, including banks of discount and deposit, were vested with lien upon their stock for an indebtedness owing by a stockholder to the corporation. The act of 1895 favors the sale and transfer of stock and avoids anything tending to hamper such transactions. The act regulates the issue and transfer of stock by companies incorporated under the laws of the commonwealth. Company and corporation are commonly used as interchangeable terms. Manifestly “companies” used in connection with the words “incorporated under the laws of this Commonwealth” related to corporations and included banks of discount and deposit.
    It has not been the policy of the law to encourage loans by banks of discount and deposit to its stockholders. It is specifically provided that a bank shall not take as security for any loan or discount a lien on any part of its capital stock, but the same security, both in kind and amount, shall be required of persons shareholders and non-shareholders.
    Clearly the purpose of the act of 1895 was to facilitate the transfer of stock, not only to a purchaser in ordinary course, but to a pledgee and to a purchaser at a sale had upon a pledge given in security for a debt. It gives “an absolute right of sale” inconsistent with the right of the bank to refuse a transfer or to retain the stock until the dividends, interest and profit shall discharge an indebtedness due by the stockholder, and the provisions of sec. 21 of the act of 1876 are necessarily repealed.
    The defendant bank further contends that if the act of 1895 is construed to affect the rights of lien given banks of discount and deposit it is unconstitutional that the title gives no notice of such legislative purpose.
    The title is as follows:
    “An Act relating to and regulating the issue and transfer of certificates of stock by companies incorporated under, the laws of the Commonwealth.”
    When enacting clauses are within the title, it follows that a clause respecting general acts inconsistent with the whole is germane. In Com. v. Moir, 199 Pa. 534, Mr. Justice Mitchell said:
    “It is further said that the act has more than one subject and one not expressed in the title. This is based'on the last section of the schedule which is a repealing clause. It is enough to say at present that the repeal of previous acts on the same subject is always germane to the title.”
    A subsequent statute affecting the whole subject of a former statute and evidently intended as a substitute for it, although it contains no express words to that effect operates as a.repeal. The subject of the legislation is the issuance and transfer of certificates of stock and is upon the same subject as secs. 5 and 21 of the act of 1876. Section 5 directs that the capital stock shall be divided into shares, “which shall be deemed to be personal property and transferable upon the books of the company in such manner as may be prescribed by the association.” Section 21 prohibits the sale or transfer of his stock by a stockholder indebted to the company without the consent of a majority of the directors. The title gives notice of the subject of the act so as reasonably to lead to an inquiry into the body of the bill and is sufficient.
    We are of opinion that the plaintiff and C. G. Kiskaddon are entitled to a transfer of the twenty-five shares of stock of the Ohio Valley Bank evidenced by certificate No. 14 of the Ohio Valley Bank on its books and to a new certificate therefor.
    Now, October 5, 1910, it is ordered that judgment be entered on the case stated in favor of the plaintiff and against the defendant and that a writ of peremptory mandamus be issued in behalf of the plaintiff, requiring the defendants upon the surrender of certificate No. 14 to transfer the twenty-five shares of stock on its books to the plaintiff bank and to issue a new certificate therefor.

      Error assigned was the judgment of the court.

      R. T. M. McCready, for appellants.

      C. E. Theobald, for appellee.
    January 2, 1912:
   Pan Curiam,

The. judgment is affirmed on the opinion of Judge Ford.


author: Mr. Justice Brown, Me. Justice Moschziskee

text:
    Walters, Appellant, v. American Bridge Company.

      Negligence — Independent contractor — County bridge — Judgment n. o. v. —Public works.

    1. In an action against a bridge company to recover damages for personal injuries sustained by the plaintiff while crossing a county bridge which the defendant had contracted to repair, a judgment for defendant n. o. v. will be affirmed where the written proof at the trial shows that the work at the point at which the plaintiff was injured was under a contract which the defendant had sublet, and the uncontradicted parol proof showed that the independent contractor was doing the work at the time of the accident, and that the defendant had no part in it. In such a case it is immaterial that there was an agreement between the county and the defendant that the contract was not to be sublet, and it is also immaterial that the contract was one for public works.
    2. In a negligence case where the oral testimony on the part of the defendant as to an independent contract under which the work was done is not in itself improbable, is not at variance with any proof or admitted facts or with ordinary experience, and comes from witnesses whose candor there is no ground for doubting, a jury ought not to be permitted to indulge in a capricious disbelief of their testimony and binding instructions for the defendant are proper: Lonzer v. Lehigh Valley R. R. Co., 196 Pa. 610, followed.

      Practice, C. P. — Judgment for defendant n. o. v. — Rule for new trial.

    3. Where there is a rule for a new trial pending at the timé the trial court grants a motion for judgment non obstante veredicto, the rule for a new trial must be discharged, inasmuch as no ease is ripe for judgment with a rule for a new trial undisposed of. If such action is not taken by the trial court, the appellate court will remit the record with directions to dispose of the rule.
    Argued Oct. 17, 1911.
    Appeal, No. 40, Oct. T., 1911, by plaintiff, from judgment of C. P. No. 2, Allegheny Co., Oct. T., 1906, No. 275, for defendant non obstante veredicto in case of John T. Walters v. American Bridge Company.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Trespass to recover damages for personal injuries. Before Shafer, J.

      The facts are stated in the opinion of the Supreme Court.
    At the trial the jury returned a verdict for plaintiff for $7,500. Subsequently the defendant took a rule for a new trial, and moved for judgment non obstante veredicto.
    The court entered judgment for defendant non obstante veredicto, but took no action on the rule for a new trial.

      Error assigned was in directing that judgment be entered for defendant non obstante veredicto.

      Frederic W. Miller, with him John S. Robb, Jr., for appellant, cited:
    Allen v. Willard, 57 Pa. 374; Homan v. Stanley, 66 Pa. 464; Hookey v. Oakdale Boro., 5 Pa. Superior Ct. 404; Second Nat. Bank v. Hoffman, 229 Pa. 429.

      David A. Reed, of Reed, Smith, Shaw & Beal, for appellee, cited:
    Erie v. Caulkins, 85 Pa. 247; Thomas v. Altoona, etc., Ry. Co., 191 Pa. 361; Hookey v. Oakdale Boro., 5 Pa. Superior Ct. 404; Wray v. Evans, 80 Pa. 102; Lonzer v. R. R. Co., 196 Pa. 610; Patton v. Ry. Co., 179 U. S. 658 (21 Sup. Ct. Repr. 275).
    January 2, 1912:
   Opinion by

Mr. Justice Brown,

The accident which resulted in the injury to the plaintiff below was a peculiar one. He was crossing a county bridge over Chartiers creek, in the borough of Carnegie, about eleven o’clock at night on October 8, 1904, when he saw a street railway car coming towards him on one of the two tracks upon the bridge. He was on the track upon which the car was approaching and stepped over onto the other track when he heard a car coming behind him. He thereupon stepped up from the track onto a water main which was upon the cartway of the bridge, and, to steady himself while in that position, placed his hand upon a latticed railing, which, for some time, had been in an upright position between two beams, the bottom of it resting upon the ends of boards which constituted a part of a sidewalk on the bridge. Sometime before the accident the county of Allegheny had entered into a contract with the American Bridge Company, the appellee, for the reconstruction of this sidewalk, and the old boards constituting the same had been removed, leaving the latticed railing to rest practically in equilibrio on an iron cross beam or girder. It had thus rested for several days, and, when the plaintiff below placed his hand upon it to steady himself, the one end tilted up and his hand was caught between one of the upright beams and the railing as it slipped into the creek below, resulting in the injuries for which he seeks damages in this action. The defense was threefold: 1. No negligence was shown which was the cause of plaintiff’s injury. 2. He was guilty of contributory negligence. And, 3, the work of repair at the bridge was being done by an independent contractor. The case went to the jury under instructions that each of the questions raised by the defense was for them, and a verdict was returned for the plaintiff. Subsequently a motion for judgment for the defendant non obstante veredicto was sustained, for the reason that, under the undisputed evidence in the case, the work was being done by an independent contractor at the time the plaintiff was injured, and he was, therefore, not entitled to recover from the appellee. The court at the same time intimated a doubt as to whether any negligence had been shown which caused the injuries sustained.

The contract with the appellee for the reconstruction of the sidewalks on the bridge was in writing, but at the time it was executed the appellee was under a written contract or agreement with a partnership known as the Nelson & Buchanan Company, by the terms of which that partnership or firm was to do all bridge work within a specified territory, including the borough of Carnegie. The execution of this agreement was admitted on the trial. On June 23, 1904 — seven days after the appellee had made its contract with the county of Allegheny — it - notified the Nelson & Buchanan Company in writing that, though it had taken the contract in its own name at the request of A. H. Nelson, one of the firm, its interest in the work to be done was limited to the furnishing of the steel material required, and requested the firm to send a formal order for the sidewalk brackets. On June 27, 1904 — four days later — the Nelson & Buchanan Company, recognizing the existence of the contract between it and the American Bridge Company, wrote that company and inclosed, as requested, an order for the sidewalk brackets. There was thus before the court unmistakable written evidence that the Nelson & Buchanan Company had assumed to do all the work in connection with the reconstruction of the sidewalks on the bridge; and that it actually did the work as an independent contractor was clearly established by the testimony of A. H. Nelson and J. J. Acklin, the latter being foreman of the Nelson & Buchanan Company. These 'were two entirely disinterested witnesses, and the jury could have had no reason for doubting their candor or questioning their credibility. They testified positively that the work was done by the Nelson & Buchanan Company; that no work was done by the American Bridge Company; that it did not have any men on the work, and took no part in the same. Under the uncontradicted written evidence and the unimpeached parol testimony of disinterested witnesses, there was no question that the work on the bridge was being done by an independent contractor at the time the appellant was injured, and the learned and careful trial judge in his opinion directing judgment for the defendant n. o. v. corrected the error into which he had temporarily fallen in giving the jury an opportunity to return a verdict against the defendant. It is vain for the learned counsel for appellant to insist that, under the rule as to parol testimony, the case was one for the jury, and the plaintiff is, therefore, entitled to judgment on the verdict. There was no evidence that any employee of the defendant company was ever on or about the bridge or had ever done any act in connection with the work of repair; while on the other hand, the oral testimony on the part of the defendant as to the independent contractor was not in itself improbable, was not at variance with any proof or admitted facts or with ordinary experience, and, having come from witnesses whose candor there was no ground for doubting, the jury ought not to have been permitted to indulge in a capricious disbelief of their testimony: Lonzer v. Lehigh Valley R. R. Co., 196 Pa. 610. All that was established by the oral testimony in the case was that a subcontract, contemplated by a written agreement between the appellee and the Nelson & Buchanan Company, and assumed in writing by that firm, was performed by it.

Nothing urged by counsel for appellant can take this case out of the rule as to the liability of an independent contractor for injuries resulting from his negligence in performing his contract. Contracts for public works are within the rule: Painter v. Pittsburg, 46 Pa. 213; Erie v. Caulkins, 85 Pa. 247; Susquehanna Boro. v. Simmons, 112 Pa. 384. Some stress is laid upon the clause in the contract between the appellee and the county of Allegheny that it was not to be sublet, but of this the appellant can take no advantage. If he had a cause of action against any one, it was against the party whose negligence caused it, and not against another, having had, as a matter of fact, nothing at all to do with the prosecution of the work at the time of the accident.

In directing judgment to be entered for the defendant n. o. v. the court below failed to dispose of the rule for a new trial. This is not a proper practice. When we called attention to it on the argument of this appeal, the statement was made that the court below had probably followed Dalmas v. Kemble, 215 Pa. 410. Nothing said in the concluding words of that opinion justifies the holding of a rule for a new trial when a court below undertakes to enter judgment on the verdict or for the plaintiff or defendant n. o. v. No case is ripe for judgment with a rule for a new trial undisposed of. The present case well illustrates this. If we should reverse the judgment and direct judgment to be entered for the plaintiff on the verdict, our reversal could be set at naught upon return of the record, if the rule for a new trial, still sub judice, should be made absolute. Hereafter, when it appears that a rule for a new trial has not been disposed of by the trial court, the record will be remitted, for a discharge of a pending rule for a new trial is a prerequisite to the entry of judgment. We affirm this judgment on the assumption that the learned court below will discharge the rule as of the date it directed the judgment to be entered.

Judgment affirmed.

Me. Justice Moschziskee

concurring:

Under the evidence in this case, I would not affirm on the theory that the defense of independent contractor was a matter of law for the court; I would, however, on the ground that no negligence was proved. The defendant company could not reasonably have anticipated the happening of the events which resulted in the plaintiff’s injury, for the railing which gave way was never intended for the use to which he put it.


author: Mr. Justice Moschzisker,

text:
    Kann v. Bennett, Appellant.

      Arbitration — Building contract — Award of architect — Incomplete award

    1. An award of an arbitrator which is not final, or is not complete as to all the matters included in the submission, is void altogether, and is not admissible even as an account stated.
    2. Where a building contract provides that matters in dispute shall be referred to the architect, whose decision shall be final and conclusive, and the architect in making his award certifies that he had not included certain items of materials furnished, as to which mechanics’ liens had been filed, the award is incomplete and cannot be sued upon.
    3. In such a case the owner might have waited until the mechanics’ liens had been adjudicated, or he might have waived his rights as to the items omitted, or with the acquiescence of the contractor he might have waived the submission of such items, but as he did none of these things, he is not entitled to sue upon the incomplete award.
    4. Where the parties to a building contract select the architect as the person to whose final decision they are willing to submit the preliminary question of the contractor’s default, and the ultimate one of the determination of the account between the parties, the award of the architect on these subjects is final so long as he acts independently and without fraudulent collusion with the owner. Partiality and some improper conduct on the part of the arbitrator in making the award will not impeach it, unless the party benefited thereby be implicated in the misconduct.
    5. Where the award of an architect in a building contract is attacked for fraud, mere general allegations of fraud without stating the facts which sustain them are not sufficient. The facts upon which the charge is made must be shown, inasmuch as fraud is largely a conclusion of law from facts stated.
    6. The rule that the award of an architect as to matters expressly made subject to his decision will not be disturbed does not at all apply beyond the express covenants of the contracting parties. Thus where a contract provides that, upon the default of the contractor, the owner may dispossess the contractor and complete the contract at the latter’s expense, and that the decision of the architect as to matters in dispute shall be final, the architect has no power to allow the owner at the expense of the contractor the rental value of the building from the date allowed by the contract for completion of the building to the date of actual completion. In such a case, however, an item allowed by the architect to the owner for the supervision of the completion of the building is within the architect’s cognizance.
    Argued Oct. 17, 1911.
    Appeal, No. 43, Oct. T., 1911, by defendant, from judgment of C. P. No. 2, Allegheny Co., Jan. T., 1903, No. 862, on verdict for plaintiff in case of William L. Kann v. William B. Bennett.
    Before Fell, C. J., Brown, Mestrezat, Potter, Stewart and Moschzisker, JJ.
    Reversed.
    Action of assumpsit brought December 20, 1903, by William L. Kann, the owner, against William B. Bennett, the contractor, upon an award of an architect made under a building contract between the parties to the suit dated February 26, 1901. See same case, 223 Pa. 36.
    The contract provided, for the construction and erection of a dwelling house in the city of Pittsburg and contained, inter alia, the following stipulations: “1. The contractor shall .... perform and finish under the direction and to the satisfaction of William Henry Sims, architect (acting as agent of said owner), all the work. ... 2. . . . In event of any doubt or question arising respecting the true meaning of the drawings or specifications, reference shall'be made to the architect, whose decision thereon shall be final and conclusive. ... 3. Should any alterations be required in the work shown or described by the drawings or specifications, a fair or reasonable valuation of the work added or omitted shall be made by the architect (without exception or appeal). ... 4. The contractor shall .... after receiving written notice from the architect .... proceed to remove .... all materials condemned by him, .... or take down all portions of the work which the architect shall condemn as unsound or improper, or as in any way failing to conform to the drawings and specifications, and to the conditions of this contract. ... 6. The contractor shall and will proceed with said work .... in a prompt and diligent manner, and shall and will wholly finish the said work .... on or before the 21st day of September, in the year 1901 .... and in default thereof the contractor shall pay to the owner fifty dollars for every day thereafter that said work shall remain unfinished, as and for damages. . . . 7. . . . The architect shall award and certify the amount of additional time to be allowed. 10. The owner agrees to provide all labor and material not included in this contract in such manner as not to delay the material progress of the work, and in the event of failure to do so, hereby causing loss to the contractor, agrees that he will reimburse the contractor for such loss; and the contractor agrees that if he shall delay the material progress of the’ work so as to cause any damage for which the owner shall become liable (as above stated), then he shall make good to the owner any such damage — over and above any damage for general delay herein’ otherwise provided; the amount of such loss or damage, in either case, to be fixed and determined by the architect, whose decision shall be final, binding and conclusive without exception or appeal. 12. Should the contractor at any time refuse or neglect to supply a sufficiency of properly skilled workmen, or of materials of the proper quality, or fail in any respect to prosecute the work with promptness and diligence, or fail in the performance of any of the agreements on his part herein contained, such refusal, neglect or failure being certified by the architect, the owner shall be at liberty, after three days’ written notice to the contractor, to provide any such labor or materials, and to deduct the cost thereof from any money then due or thereafter to become due to the contractor under this contract; and if the architect shall certify that such refusal, neglect or failure is sufficient ground for such action, the owner shall also be at liberty to terminate the employment of the contractor for the said work and to enter upon the premises and take possession of all materials thereon, and to employ any other person or persons to finish the work, and to provide the materials therefor; and in case of such discontinuance of the employment of the contractor he shall not be entitled to receive any further payment under this contract until the said work shall be wholly finished, at which time, if the unpaid balance of the amount to be paid under this contract shall exceed the expense incurred by the owner in finishing the work, such excess shall be paid by the owner to the contractor, but if such expense shall exceed such unpaid balance, the contractor shall pay the difference to the owner. The expense incurred by the owner as herein provided, either for furnishing materials or for finishing the work and any damage incurred through such default, shall be audited and certified by the architect, whose certificate thereof shall be conclusive upon the parties, and binding, without exception or appeal. 13. . . . The final payment shall be made within thirty days after this contract is completely finished; provided, that in each of the said payments the architect shall certify in writing that all of the work upon the performance of which the payment is to become due has been done to his satisfaction; and provided further, .... that if at any time there shall be any lien or claim, for which, if established, the owner of said premises might be made liable . . . ., the owner shall have the right to retain .... an amount sufficient to completely indemnify him against such lien or claim. . . . And should there prove to be any such claim after all payments are made, the contractor shall refund to the owner all moneys that the latter may be compelled to pay in discharging any lien on said premises, made obligatory in consequence of the former’s default. 14. . . . No certificate given or payment made under this contract, except the final certificate or final payment, shall be conclusive evidence of the performance of this contract, either wholly or in part, against any claim of the owner; and no payment shall be construed to be an acceptance of any defective work.”
    The plaintiff claimed that the contractor was unduly delaying the construction of the building, and on August 31, 1901, the architect certified in writing to the plaintiff, that the defendant had “failed, refused and neglected to supply a sufficiency of properly skilled workmen or materials in the construction of said building, and that he has failed to prosecute the work with promptness and diligence;” and further that “such neglect, refusal and failure on the part of the said contractor is sufficient ground, if you so desire, for your terminating said contract.” On September 3, 1901, the plaintiff notified the defendant that unless he remedied the default so certified by the architect within three days after the receipt of the notice, “that I will deem it my privilege to provide such labor and material as may be necessary, under the terms of the contract, for the erection of the said building.” The defendant failed to comply with this notice; the plaintiff on or about September 8, 1908, terminated the employment of the contractor, entered into the possession of the premises and proceeded to finish the building under the supervision of the architect. On October 16, 1902, the plaintiff wrote to the architect that in pursuance of his certificate of August 31, 1901, he, the plaintiff, had terminated the employment of the contractor and finished the building, and, “I do hereby request you to audit and certify the expense incurred by me, either for furnishing material or finishing the work required to be done under said contract, and all damages incurred by me through the default of the said Bennett, in accordance with the power and authority conferred upon you by the twelfth paragraph of the said contract.” On October 17, 1902, pursuant to this request the architect notified the defendant that he would sit, “for the purpose of auditing and certifying the expense incurred by said Kann, either through furnishing materials or finishing said work, or damage incurred through your default,” at a designated place upon a certain day and at an hour fixed, and “for the purpose of hearing the parties and their witnesses, at which time and place you may be present and be heard.” The architect proceeded with the hearing as appointed, and on December 15, 1902, he made the written award sued upon in this case. In this award he certified that $5,083.84 was due from the defendant to the plaintiff. .This included “damages caused by delay in completion of contract for dwelling, .... at rental value of same from September 21, 1901, when same should have been completed, as per contract, to June 1, 1902 — 252 days less 35 days extra time granted to contractor by architect — 217 days at $1,800 per year — $1,070.14,” and for “supervising construction — W. H. Sims — $1,013.30.” The balance of the award was made up of items for labor and material. In the award the architect referred to the taking of testimony, and certified that, “under and by virtue of the terms of the twelfth paragraph of the said contract .... the said William L. Kann terminated the employment of the said contractor by reason of certain defaults on his part, which were duly certified by me as sufficient ground for such action .... and the said William L. Kann took possession of the premises .... on or about the 7th day of September, 1901, and employed other persons to provide' materials and finish the work required under said contract to be performed by said contractor and did fully finish and perform the work required to be done under said contract by said Bennett. He further certified that the amount due by the defendant to the plaintiff did not include any sum for which the former might be hable by reason of materials furnished to the latter by a certain lumber company and a certain plumbing company prior to the termination of the contract, and for which mechanics’ liens had been filed, nor did it include “the amounts claimed by J. W. Jacobs & Son, subcontractors, for the brick work for said house, by reason of any materials furnished or work done for and on behalf of said William B. Bennett prior to the termination of his employment by the said W. L. Kann.”
    At the trial the plaintiff offered the award and the other documentary evidence already referred.to, also certain averments in the statement of claim which were not denied in the affidavit of defense, and rested. The defendant made various offers of proof, all of which were refused, and the court gave binding instructions to find a verdict for the plaintiff in the sum of $5,083.84 with interest, less certain admitted credits; making the net amount due to the plaintiff $6,625.75. Judgment was entered upon the verdict thus rendered, and the defendant has appealed.

      Errors assigned were to the rulings of the court upon the admission and rejection of evidence; and the last two, to the refusal of binding instructions for the defendant and the giving of such instructions for the plaintiff.

      John C. Bane, with him J. McF. Carpenter and C. L. Stevenson, for appellant.
    — An agreement as to arbitration is not to be extended by implication beyond its plain words: Somerset Borough v. Ott, 207 Pa. 539; Chandley Bros. & Co. v. Cambridge Springs Borough, 200 Pa. 230; Murphy v. Orne, 185 Pa. 250; Lauman v. Young, 31 Pa. 306.
    The defendant’s right to introduce the evidence referred to in his offers is fully sustained by the decision of this court in Hunn v. Pennsylvania Institution for the Instruction of the Blind, 221 Pa. 403.

      John S. Ferguson, for appellee.
    — It makes no difference that Sims, the architect, was styled in the contract, as the agent of the owner: Haley v. Bellamy, 137 Mass. 357; Kennedy v. Poor, 151 Pa. 472; Kihlburg v. U. S., 97 U. S. 398; Sweeney v. U. S., 109 U. S. 618 (3 Sup. Ct. Repr. 344); Martinsburg & Potomac R. R. Co. v. March, 114 U. S. 549 (5 Sup. Ct. Repr. 1035); Robbins v. Clark, 129 Mass. 145.
    The findings cannot be impeached by this appellant' except for fraud: Johnson’s App., 9 Pa. 416; McCrelish v. Churchman, 4 Rawle, 26; Gates v. Steele, 58 Conn. 316; Cohn v. Goldman, 76 N. Y. 284.
    If fraud is the defense, it must be shown in what it consisted: Sterling v. M. M. Ins. Co., 32 Pa. 75; Brown v. Street, 6 W. & S. 221; Moore v. Somerset, 6 W. & S. 262; Walker v. Geisse, 4 Whart. (Pa.) 252; Lord v. Ocean Bank, 20 Pa. 384; Marr’s App., 78 Pa. 66.
    January 2, 1912:
   Opinion by

Mr. Justice Moschzisker,

When the plaintiff offered the architect’s certificate upon which he was suing, the defendant objected, inter alia, upon the ground that it was not a complete award; but it was admitted in evidence. This is complained of in the third assignment of error. The objection should have been sustained, for the award itself shows that the architect did not consider or pass upon at least three items within his cognizance, namely, the claims of the lumber company and the plumbing company, and the Jacobs claim for brick work. In Hamilton v. Hart, 125 Pa. 142, we said, per Mr. Justice Mitchell, “It is well settled that an award which is not final or is not complete as to all the matters included in the submission, is void altogether, and is not admissible even as an account stated;” citing authorities to the effect that “the motive from which the arbitrator resolved to abstain from determining the matters omitted seems to be immaterial,” and that, though the arbitrator might declare he abstained from taking a certain item into consideration “for the reason that a suit in chancery was pending in regard' to that account,” it would not save the award. We further stated that “an award which leaves something still to be done by the arbitrator himself before the existing cause is determined, cannot be said to be final. . . .” The rule there laid down controls this case. If such a partial award as the one here present could be sued upon, we might have the same matter in court over and over again as the omitted items were severally disposed of. The plaintiff should have waited until the mechanic’s lien cases had been finally adjudicated, or, had he seen fit, he might have waived all his rights against the defendant as to the three items omitted by the architect, or, with the acquiescence of the defendant, he might have waived the submission of those items; but he did none of these things. We must take the case as we find it, and it is clear that the award was not final; hence it was not ripe to be sued upon and should have been excluded.

This litigation was here before (223 Pa. 36), and while there is nothing to show that the parties at that time mutually agreed to disregard the award, it appears from the report that the then counsel for the plaintiff conducted his case along different lines from those pursued at the last trial. Speaking by Mr. Justice Potter we said: “Under the theory upon which the cause was tried, the important question which lay at the threshold of the inquiry was whether the plaintiff had failed to furnish sufficient workmen and proper material for the erection of the house, and whether he had prosecuted the work with due diligence.” In the trial now under review the plaintiff proceeded upon the theory that the architect had passed upon those points and that his decision was final and conclusive. The contract provides: “Should the contractor at any time refuse or neglect to supply a sufficiency of properly skilled workmen, or materials of the proper quality, or fail in any respect to prosecute the work with promptness or diligence or fail in the performance of any of the agreements on his part herein contained, such refusal, neglect or failure being certified by the architect, .... and, if the architect should certify that such refusal, neglect or failure is sufficient ground for such action, the owner shall be at liberty to terminate the employment of the contractor for said work and to enter upon the premises .... and .... finish the work. . . . The expense incurred by the owner and any damage incurred through such default, shall be audited and certified by the architect whose certificate thereof shall be conclusive upon the parties and binding without exception or appeal.” Thus the architect was made the arbiter as to the neglect or refusal to proceed with the work, and also to decide whether or not such neglect was sufficient ground for the termination of the contractor’s employment; he did so certify, and the plaintiff, by the unequivocal act of going upon the premises and taking possession, put an end to the employment. The contract required no special form of notice to terminate the employment, and the fact that the plaintiff had previously given notice to the defendant that “I will deem it my privilege to provide such labor and material as may be nécessary, under the terms and provisions of the contract,” instead of saying that he intended to put an end to the employment, fell far short of showing an election not to terminate.

If the contract be regarded as a whole it is apparent that the parties selected the architect as the one to whose final decision they were willing to submit both the preliminary question of the contractor’s default and the ultimate one of the determination of the account between them; and under our cases that is a bar to a common-law action (Hostetter v. Pittsburg, 107 Pa. 419); the fact that the architect was referred to as the agent of the owner; or that the defendant did not see fit to present his evidence, would not make any difference in this respect: Kennedy v. Poor, 151 Pa. 472; English v. Wilmerding Boro. School Dist., 165 Pa. 21. So long as the architect acted independently without fraudulent collusion with the owner, his decision was final in all matters within the scope of his authority under the contract. ‘ ‘ Although an award, like a judgment, may be impeached for fraud, yet the fraud must be actual and not constructive. Partiality and some improper conduct on the part of the arbitrator in making the award would not impeach it, unless the party benefited thereby be implicated in the misconduct. General allegations of fraud without stating the facts which constitute them are not sufficient:” Hostetter v. Pittsburg, supra; Com. v. Pittsburg, 206 Pa. 379. The defendant’s attempt to attack the integrity of the award did not amount to more than a general allegation of fraud. Many of his offers of evidence contained no facts at all, and those stated in the other offers, if proved, were not sufficient to justify an inference of fraud of the character required to be shown in order to avoid such an award. An offer to show fraud should indicate the facts upon which the charge is predicated, for fraud is largely a conclusion of law from facts stated, and it must be made clear to the mind of the court that, the inferences being drawn in favor of the party making the offer, the facts, if believed, would be sufficient to sustain such a finding: We cannot say that the court below committed error in refusing so to view the offers of the defendant.

As to one item awarded the plaintiff we feel that the architect exceeded the scope of the submission. The twenty-third and twenty-fourth assignments of error relate to the item- of 11,070.14, the rental value of the house, allowed as damages for 217 days’ delay; these assignments should have been sustained. The plaintiff might have held the defendant to the completion of the work and claimed the damages for delay allowed in the award. But as we construe the contract it did not contemplate the payment of such damages in the event of the dispossession of the contractor and the taking over of the property before the date allowed for completion: Crawford et al. v. Becker, 13 Hun, 375. Although we recognize the well-established rule that the award of an architect, in matters by contract expressly made subject to his decision, will not be disturbed, yet we have laid it down that “the rule should not at all apply beyond the express covenants of the contracting parties:” Hunn v. Pennsylvania Institution for the Instruction of the Blind, 221 Pa. 403, and that “such an agreement is not to be extended by implication beyond its plain words:” Somerset Borough v. Ott, 207 Pa. 539; Chandley Bros. & Co. v. Cambridge Springs Boro., 200 Pa. 230; Murphy v. Orne, 185 Pa. 250.

We have gone into this case at some length in the hope of defining the rights of the parties so that the controversy may be brought to an end. It is not necessary to discuss the other assignments of error further than to say that the-item of $1,013.30, allowed W. H. Sims for supervising the completion of the building for the owner, was within the cognizance of the architect and his decision thereon is not subject to review. As before pointed out, the award sued upon was not final; but the agreement is in force, and should the architect make a valid award, the plaintiff’s remedy is still open to him: Hamilton v. Hart, supra.

The third, twenty-third, twenty-fourth and the last two specifications are sustained. The judgment is reversed, without prejudice.


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    Commonwealth ex rel. v. Egan, Appellant.

      Public officers — Burgess—Interest in sales to borough — Stockholder of a corporation — Act of May 28,1907, P. L. 262.

    Under the Act of May 28, 1907, P. L. 262, a burgess of a borough will be ousted from his office, if it appears that he was a stockholder and president of a corporation at a time when the corporation sold supplies to the borough, and this is the case although the burgess may have had no knowledge of the sales until warrants were issued for the same, and he was called upon to indorse and did indorse such warrants as president of the corporation.
    Argued Oct. 17, 1911.
    Appeal, No. 63, Oct. T., 1911, by defendant, from judgment of C. P. No. 2, Allegheny Co., Oct. T., 1910, No. 712, awarding ouster in case of Commonwealth ex rel. William A. Blakeley, District Attorney of Allegheny County, v. Fred W. Egan.
    Before Fell, C. J., Brown, Mestrezat, Potter, Stewart and Moschzisker, JJ.
    Affirmed.
    Quo warranto to oust defendant from office of burgess.
    Shaper, J., filed the following opinion:
    The proceeding is a quo warranto against the burgess of the borough of East Pittsburg, to oust him from his office by reason of his alleged violation of the act of May 28,1907, relating to borough officers. The suggestion alleges that the defendant was the duly elected burgess of the borough of East Pittsburg; that he was, at and after the time of his election, interested in the Egan Plumbing & Constructing Company as stockholder and as manager; and that while he was burgess and so interested in the company, that company sold to the borough certain goods.
    The answer of the defendant to the suggestion denied that he was financially interested in the Egan Plumbing & Contracting Company at the time of his election and at the time of the purchases alleged to have been made; admitted that the Egan Plumbing Company did sell the goods in question, part of them for the use of the lockup, the goods being purchased by the chief of police and the street commissioner, under circumstances requiring haste in the procurement thereof; and that the sales were made without his knowledge and against his order; to which a replication was filed and the case set down for trial.
    Upon the trial the jury found a special verdict, that at the time the purchases were made from the Egan Plumbing Company the defendant was a stockholder in that company and was president of it; and they further found that when the purchases were made he did not know of them until after the goods had been delivered and the work done, and had knowledge of them only when warrants were issued for the same and of the payment of the warrants, and that if upon this state of facts the court should be of opinion that the plaintiff was entitled to recover, then to find for the plaintiff, and otherwise to find for the defendant.
    The act in question makes it unlawful for the burgess or other officers of a borough to be interested either directly or indirectly in any contract for supplies to be furnished for the borough, and for any burgess to be a member of any partnership, or stockholder and officer in any corporation, or agent or employee of any individual,, partnership or corporation in any way interested in any contract for the sale and furnishing of any supplies for the borough, and provides that any person violating these provisions or any of them, shall forfeit his office.
    It is urged upon us by counsel for the defendant that it was not the intention of the act to deprive a man of his office because some employee of a company of which he was a stockholder took it upon himself, without the knowledge of the stockholder, or perhaps against his express order, to sell some small item to an officer of the borough for the use of the borough, and we are not prepared to say that there may not be cases within the broad and literal terms of the act to which it should be held not to apply. In the present case, however, there were a number of small sales at different times, as admitted by the defendant in his pleadings, and he knew of them when warrants were drawn for their payment, and knew of the payment of the warrants, and although it is not so found in the special verdict, it appeared from the evidence that he indorsed these warrants himself as president of the company. These facts show not a repudiation of the contracts when they came to his knowledge, but an adoption of them. It has been frequently held that the amount involved in such cases makes no difference, and that the intention of the party is also immaterial. The act makes certain relations between the officer and the borough unlawful without reference to whether they are knowingly or corruptly entered into, and the legislature has undoubted power to make such a provision, as the deprivation of an office of this kind does not affect the liberty or property of the official.
    It is therefore ordered that judgment be entered on the verdict for the plaintiff, and that the defendant, Fred W. Egan, be ousted from office of burgess of the borough of East Pittsburg.

      Error assigned was the judgment of the court.

      W. S. Maxey, for appellant.
    — The sales or furnishings of supplies in the reported cases appear to have been made with the knowledge of the defendants and in this case the sales and furnishings of supplies was made without the knowledge of the defendants: Com. ex rel. v. Paul, 15 Pa. Dist. Rep. 677; Com. v. Johnston, 5 Pa. Superior Ct. 585.

      Charles B. Prichard, for appellee, was not heard.
    January 2, 1912:
   Per Curiam,

The judgment is affirmed on the opinion of Judge ' Shafer.


author: Mr. Justice Potter,

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    St. Clair Borough, Appellant, v. Souilier.

      Road, law — Report of viewers — Exceptions—Time for filing — Acts of May 16,1891, P. L. 76, and April 2,1903, P. L. m.

    1. When a statute fixes the time within which an act must be done, the courts have no power to enlarge it, although it relates to a mere question of practice. This rule is applicable to the provision of the Act of May 16,1891, P. L. 75, as amended by the Act of April 2, 1903, P. L. 124, providing that exceptions to a report of viewers must be filed within thirty days.
    2. Where road viewers are appointed “to ascertain the cost, damages and expenses and assess the benefits by reason of said improvements,” they sufficiently comply with their order of appointment if they report no damages to be awarded, and no benefits to be assessed. They are not required to award damages or assess benefits if they find as a matter of fact that the properties were neither damaged nor benefited by the improvement.
    3. Where three road viewers qualify by taking the necessary affidavit, and all join in the notice of the first meeting, and the language of their report indicates that all three inspected the line of the. improvement, heard the testimony and joined in the findings, their report cannot be attacked on the ground that only two of the viewers acted, because only two of them signed the report.

      Appeals — Road law — Exceptions—Final order.

    4. In a road proceeding an order which merely states “the exceptions are sustained,” is not a final order from which an appeal will properly lie; but if an appeal is taken from such an order and the appellate court finds that the exceptions should have been dismissed, it will reverse the order and dismiss the exceptions without resorting to the circuitous proceeding of sending the record back for a proper order and a second appeal.
    Argued Oct. 17, 1911.
    Appeal, No. 65, Oct. T., 1911, by plaintiff, from order of C. P. No. 4, Allegheny Co., Second Term, 1909, No. 353, sustaining exceptions to report of viewers in case of St. Clair Borough v. Magdelena Souilier.
    Before Fell, C. J., Brown, Mestrezat, Pottee, Stewart and Moschzisker, JJ.
    Reversed.
    Exceptions to report of road viewers.

      The opinion of the Supreme Court states the case.

      Errors assigned were in sustaining exceptions to report of viewers.

      Chas. T. Moore, for appellant.
    — The exceptions were too late: Du Bois Opera House Co. v. Du Bois Borough, 16 Pa. C. C. Rep. 210; Williams Street, 191 Pa. 472.

      T. H. Davis, for appellee.
    January 2, 1912:
   Opinion by

Mr. Justice Potter,

On the petition of the borough of St. Clair the court below appointed three viewers to award damages and assess benefits for the locating and opening of Burr street from Ormsby avenue to Mountain avenue in that borough. On August 25, 1909, the report of the viewers was filed and confirmed nisi. The viewers reported that there were no damages to be awarded, and no benefits to be assessed. Two of the viewers only signed the report, but the exhibits attached show that all the viewers qualified, and signed the notice of the first meeting. On December 11, 1909, more than three months after the filing of the report, counsel for Magdelene Souilier filed exceptions, and moved that the proceedings be set aside. The only reason then assigned was that the report of the viewers did not conform to the order of court appointing them. More than a year afterwards, on December 23, 1910, an additional exception was filed by leave of court, suggesting that while three viewers were appointed, only two of them had acted. The exceptions were sustained, but the court below has filed no opinion and given no reason for its action. The proceedings are under the Act of May 16, 1891, P. L. 75, as amended by the Act of April 2, 1903, P. L. 124. The amendment provides that upon the report of the viewers, or any two of them, being filed in court, any party interested may file exceptions thereto within thirty days; and it further provides that in case no exceptions are filed within thirty days, the prothonotary shall enter a decree (as of course) that said report is confirmed absolutely. It is apparent that all the exceptions in the present case were filed too late. The first exceptions were filed more than three months after the filing of the viewers’ report, and the last exception was not filed until more than a year afterwards. “When a statute fixes the time within which an act must be done, the courts have no power to enlarge it, although it relates to a mere question of practice:” Harris v. Mercur, 202 Pa. 313, and other authorities there cited. The same rule is illustrated and applied in Dunmore Boro. School District v. Wahlers, 28 Pa. Superior Ct. 39, and in Wingert v. Teitrick, 31 Pa. Superior Ct. 187.

Furthermore, these exceptions seem to be entirely without merit. In the first two, it is alleged that the report of the viewers is not in conformity with the terms of their appointment. But it appears that the viewers were appointed by an order of court made in answer to a petition which prayed for their appointment “to ascertain the costs, damages and expenses, and assess the benefits by reason of said improvements, in the manner and subject to the provisions contained in” the act of 1891. The report of the viewers stated that they “have ascertained, estimated and determined, and do ascertain, estimate, determine and report the said damages, costs and expenses, as hereinafter set forth, as also the damages allowed, and the assessment of benefits made.” The report further states that the schedule attached to it “shows the damages, costs and expenses of the improvement, and damages allowed and to whom payable and the benefits assessed and against whom.” This certainly indicates full compliance with the order of court. The fact that the viewers found, that in this case there were no damages to be awarded, and no benefits to be assessed, and that the schedule shows the same thing, does not affect the validity of their findings. They were not required to award damages or assess benefits, if they found as a matter of fact that the properties through which the street was to be opened were neither damaged nor benefited by the improvement.

We can find nothing on the record to sustain the allegation that while three viewers were appointed, only two of them acted. The record shows that all three of the viewers qualified by taking the necessary affidavit, and that all joined in the notice of the first meeting. The language of the report also indicates that all three visited and inspected the line of the improvement and heard the testimony and joined in the findings. In Springbrook Road, 64 Pa. 451, 453, Mr. Justice Shabswood said: “It has often been held in this court that it need not appear on the face of the report that all the viewers were present at the view.” In Greenwood Twp. Road, 27 Pa. Superior Ct. 549, 551, Rice, P. J., said: “It is urged that the report is defective because it does not show that the re-reviewers met at the time and place designated in the notice. But as the statute does not require that this fact be specifically set forth in the report, the presumption that the viewers did their duty in that regard will prevail unless there is something on the face of their report from which an inference to the contrary may legitimately be drawn, or the fact that they did not meet at the time and place appointed be established by evidence.” It was certainly not essential that all of the viewers should sign, for the act of assembly permits any two of them to make the report.

The case, as disclosed by the records, is in an unsatisfactory shape. The act of April 2, 1903, above quoted, authorizes an appeal from the final decree “within thirty days after the confirmation, modification, changing or correcting of any report.” But in this case, no such decree appears. The order made is merely, “The exceptions are sustained.” This is not a final order from which an appeal will properly lie: Griffiths v. Monongahela R. R. Co., 232 Pa. 639. This appeal might very well be quashed for that reason; and, under ordinary circumstances, it would be. But the effect would only be to send the record back to the court below, where a final decree might be entered, from which another appeal could be taken. Without advantage to anyone, this would only result in delaying the determination of the questions here sought to be raised. The defects are apparent. In so far as the proceedings are based upon the exceptions filed in behalf of the appellee, they are without warrant. The assignments of error are sustained.

The order of the court below, sustaining the exceptions, is reversed, and it is now ordered that the exceptions be dismissed.


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    Marcello to use v. Concordia Fire Insurance Company. Marcello v. Williamsburg City Fire Insurance Company. Marcello v. Western Insurance Company. Marcello v. Rochester German Fire Insurance Company. Marcello v. Westchester Fire Insurance Company, Appellants.

      Insurance — Fire insurance — Change of ownership or possession — Receiver in bankruptcy.

    Where a policy of fire insurance provides that the policy shall be void “if any change, other than by the death of an insured, take place in the interest, title or possession of the subject of insurance (except change of occupants without increase of hazard) whether by legal process or judgment, or by voluntary act of the insured, or otherwise,” the policy is not rendered void by the fact that a receiver in involuntary. bankruptcy of the assured takes custody of the premises, places a watchman in charge of them, takes out insurance in his own name, and advertises the personal property for sale, the insured being permitted to continue his residence in a dwelling on the property.
    Argued Oct. 17, 1911.
    Appeals, Nos. 76, 78, 79, 80 and 81, Oct. T., 1911, by defendant, from judgment of C. P. No. 4, Allegheny Co., Fourth Term, 1909, Nos. 773, 774, 775, 776, 778, for plaintiff on case stated in suits of Yitti Marcello, now for use of South Side Trust Company, Trustee in Bankruptcy for said Marcello, v. Concordia Fire Insurance Company, Williamsburg City Fire Insurance Company, Western Insurance Company, Rochester German Fire Insurance Company and Westchester Fire Insurance Company.
    Before Fell, C. J., Brown, Mestrezat, Potter, Stewart and Moschzisker, JJ.
    Affirmed.
    Case stated to determine liability on policies of fire insurance.
    Carnahan, J., filed the following opinion:
    The plaintiff, Marcello, was the owner in 1908 of a lot of ground near Bridgeville, Allegheny county, having thereon a two-story frame, slate-roof building, occupied by him as a storeroom and dwelling, and a three-story frame, slate-roof building, with addition, also occupied as a storeroom and dwelling. On June 2, 1908, the defendant company, in consideration of a premium paid, issued to him its policy of fire insurance for $1,500 on the three-story building “while occupied as a private dwelling house and storeroom,” and on August 29, 1908, the same company, in consideration of a premium paid, issued to him its policy of fire insurance for $1,000 on the. two-story building “while occupied as a grocery and dwelling house.”
    Each of these policies was for a period of one year from its date, and in each other insurance was permitted.
    The buildings were destroyed by fire on December 25, 1908. Proofs of loss were duly furnished, payment was refused, and an action of assumpsit was brought to recover on the policies. An affidavit of defense was filed, and a rule was taken for judgment for want of a sufficient defense, which rule was duly heard and discharged.
    The parties now submit a case stated.
    Each of the policies provided (inter alia) that it should be null and void, and of no effect, “if, with the knowledge of the insured, foreclosure proceedings be commenced, or notice given of sale of any property covered by this insurance by virtue of any mortgage or trust deed; or if any change, other than by the death of an insured, take place in the interest, title or possession of the subject of insurance (except change of occupants without increase of hazard) whether by legal process, or judgment, or by voluntary act of the insured, or otherwise, or if this policy .be assigned before a loss, or if illuminating gas or vapor be generated in the described building (or adjacent thereto) for use therein.”
    No waiver or modification of any of the above provisions and conditions was ever made.
    On December 9, 1908, an involuntary petition in bankruptcy was filed by creditors of Marcello against him in the United States court for the western district of Pennsylvania. On December 12, 1908, Marcello, in writing, waived service of a subpoena in bankruptcy. On December 17, 1908, a petition for the appointment of a receiver of the property of Marcello was filed, and as respects said petition, there was a second written waiver by Marcello of the service of a subpoena or notice upon him. On December 17, 1908, the South Side Trust Company was appointed “Receiver of all the assets and property, of every kind and character, belonging to said bankrupt.” On December 18, 1908, the receiver gave bond, which was duly approved and filed on the same day, and thereupon, December 18, 1908, the receiver took possession of the property covered by these two policies of insurance, and placed a watchman upon it. On December 19,1908, the receiver took out policies of fire insurance issued by various companies, to the amount of $9,000, upon the same property covered by these two policies. Marcello, before the filing of the petition in bankruptcy, had, in addition to the two policies in suit, taken out other policies of several companies on said property, his entire insurance on the same being $9,000. On December 21, 23 and 24, 1908, the receiver advertised the personal property of Marcello for sale on December 31, 1908. On December 25, 1908, the buildings and their contents were destroyed by fire. The receiver’s watchman was on the property at the time of the fire, and Marcello was living in one of the dwellings, not having been dispossessed by the receiver. Marcello’s policies, including the two in suit, had not been canceled.
    On December 29, 1908, Marcello was adjudged a bankrupt. No notice of the bankruptcy proceedings, nor of the appointment of a receiver, was given to the defendant company, nor did it ever consent to the “changed conditions,” as set forth in the case stated.
    The sole question in the case is whether there was such a change in the interest, title or possession of the subject of insurance as to terminate the policies. It does not appear among the facts, submitted, and expressly agreed to, that the change was “a change of occupants without increase of hazard,” or otherwise; nor does it appear that the receiver had no such title as to enable it to take out new policies of insurance; nor that it was not empowered to sell and dispose of the personal property, as it had announced its intention by advertisement to do.
    The bankruptcy act of 1898 authorizes the appointment “of receivers, or the marshals, upon application of parties in interest, in case the courts shall find it absolutely necessary for the preservation of estates to take charge of the property of bankrupts, after the filing of the petition, and until it is dismissed, or the trustee is qualified.”
    The title to the property of the alleged bankrupt remains in him until adjudication; subject to the control of the court, to be exercised either by a receiver, or the marshal, if otherwise the interests of the creditors are not sufficiently protected: In re La Plume Condensed Milk Co., 145 Fed. Repr. 1013.
    The duty required, and the power conferred, clearly are that the receiver, or the marshal, should take possession of property that would otherwise go to waste, and hold it and preserve it, so that it might come to the trustee, when selected, without needless injury: Boonville Nat. Bank v. Blakey, 107 Fed. Repr. 891.
    As a general rule, no order of sale should be made until after adjudication, unless the property is of such a nature that a sale is necessary to preserve its value: In re Kelly Dry Goods Co., 102 Fed. Repr. 747; In re Garner & Co., 153 Fed. Repr. 914; In re Harris, 155 Fed. Repr. 216.
    A receiver in bankruptcy is a mere custodian, and has no title to the property of the bankrupt: 2 Foster, Fed. Practice (4th ed.), 1815.

      “ In general, the receiver in a bankrupt proceeding is a caretaker and custodian of the property of the bankrupt, and is not a trustee for the creditors. ... In an involuntary proceeding, the duty of the receiver, who conducts the business of the bankrupt, is to maintain as far as possible the continuity of his affairs, so that, if no adjudication is made, his property and business may be returned to him with the least possible damage:” Alderson on Receivers, 361.
    From the above recited authorities, it appears that, while the receiver might be justified in advertising for sale and selling the personal property, and doubtless would be, if so authorized and directed by order of the court, it would have no authority to sell the real estate; and that as respects title to the real estate, it was in the bankrupt at the time of the destruction of the buildings by fire, and until adjudication. Whether or not the receiver had such insurable interest in the buildings, as to enable it to take out new policies of insurance on them as it did, is not a question which calls for decision in this case.
    Had the fire occurred after the adjudication of Marcello as a bankrupt, and especially after the appointment of a trustee for the benefit of creditors, qualification of the trustee, and that taking of actual possession by the trustee, the question here presented could not have arisen. But under the circumstances, it cannot be said that it is one which involves mere technicality. It comes naturally from the contracts of insurance and the facts agreed upon, and the insurance company is entitled, to have it fully considered, and passed upon by the courts.

      The receiver did take possession of the premises. It placed a watchman upon them. The watchman was there, in personal charge of the property — both real estate and personalty — at the time of the fire.» The receiver did not lease them to a tenant; it did not dispossess the bankrupt, who was living upon them. He was allowed to remain, and he was there at the time of the fire. As a further act of possession, it reinsured the property in its own name for creditors; and as a further act of possession, it advertised the personal property for sale. Its possession was complete in the sense that it had absolute charge of the property, and actually occupied it without notice to, or knowledge of, this defendant.
    The safety of the insurer is dependent much upon the character of the assured, not alone upon his integrity and good faith, but upon his habits of carefulness, of prudence, and vigilance. It is obvious that the danger of fire may be much less when the assured is a man watchful and provident than where he is heedless and negligent, as well as dishonest. The provision, therefore, which requires assignment of a policy to be made with the consent of the insurers, and to be approved by them, is not unmeaning. Nor is its purpose to stipulate for a new contract with the assignee. It is designed rather to afford substantial protection to the underwriters, by enabling them to preserve, during the continuance of the risk, the safeguards which existed at its origin; those found in the honesty and watchfulness of the assured. It was for this reason that it was early laid down that a fire policy could not be assigned pending the risk, so as to give to the assignee any interest in it whatsoever, either legal or equitable: Lord Chancellor King, Lynch v. Dalzell, 4 Bro. P. C. 431. Such a policy has indeed in some of the later cases been held assignable in equity, with the subject itself, when it contained no provision to the contrary, and it is on that account that the prohibition to assign has been generally introduced: State Mutual Fire Insurance Co. v. Roberts, 31 Pa. 438.

      It was not contemplated by the parties to the contracts that mere change of occupancy should vitiate them, because change “in the interest, title or possession” is expected in case of “death of an insured,” and likewise, “change of occupants without increase of hazard.” The word “possession,” as used in the policies, seems to have a broader significance than any that could be gathered from the words “occupant,” “occupancy,” or “occupation.” Such is the view taken by the Superior Court in a case involving the consideration of a policy of insurance, which contained this provision: “This entire policy . . . . shall be void .... if any change, other than by the death of the insured, takes place in the interest, title or possession of the subject of insurance (except change of occupants without increase of hazard), whether by legal process, or judgment, or by voluntary act of the insured, or otherwise.” The court says (inter alia): “We are not aware that the precise question here involved has been decided in this state. But there is a decision in Rumsey v. Phœnix Insurance Co., 1 Fed. Repr. 396, by the United States circuit court of appeals for the northern district of New York, opinion by Judge Wallace, which seems to decide this question. In that case the policy provided that it should be void ‘if the property be sold or transferred, or any change take place in the title or possession, whether by legal process, judicial decree, voluntary transfer, or conveyance.’ The court said in that case, ‘The fact that Zimmer moved out of the dwelling house, and let it to tenants, is not a defense within the conditions that avoid the policy if any change takes place in title or possession. The change of possession contemplated is something more than a change of occupation; it is a change effected by legal process, judicial decree, voluntary transfer, or conveyance; one which refers to his possessory right, and not to the occupancy of the insured. The possession of Zimmer’s tenants was his possession within the meaning of the policy.’
    ‘ In our opinion the proper legal, as well as reasonable, construction of the word ‘possession,’ as used in the policy in the present case, limits it to legal possession, or possessory right. . . .
    “ 'Where the terms of a policy are susceptible, without violence, of two interpretations, that construction which is most favorable to the insured, in order to indemnify him against loss sustained, should be adopted:’ Humphreys v. National Benefit Assn., 139 Pa. 264.
    “In the present policy the word ‘occupant’ seems to be used to indicate actual possession or occupancy, and the word ‘possession,’ as used with the words ‘interest’ and ‘title’ in the clause in question, seems to mean legal possession, or possessory right, and, in accordance with the doctrine above quoted, these words should be so construed as to indemnify the insured against the loss sustained. . . . We do not find that there was any change in the possession except the physical occupancy of the premises, which is not forbidden by the term of the policy of insurance:” McGinnis v. St. Paul Fire & Marine Insurance Co., 38 Pa. Superior Ct. 390.
    We regard the above quoted authority as decisive of the question now submitted; and therefore, the receiver having no possessory right, but being merely a caretaker, pending adjudication in bankruptcy, the plaintiff is entitled to judgment. The bankruptcy proceeding was involuntary on his part, and it is not material that he had knowledge of it, or that he waived the service of notices connected with its progress.
    The decision here reached can hardly be said to work a hardship upon the defendant company. It is not deprived of any right or privileges contemplated at the time the policies were issued. It is not claimed that the hazard was increased. On the contrary, it seems to have been lessened, or at least the tendency was to lessen it. The occupancy of the insured was not disturbed, and both he and the receiver’s watchman were on the premises at the time of the fire. What was said in this respect in Fuller v. New York Fire Insurance Co., 184 Mass. 12 (67 N. E. Repr. 879), namely: “The rights and obligations of the receiver tend to add to, and not diminish the care and oversight of the insured property, and could in no way increase the risk, or alter it to the detriment of the insurer,” is quite applicable here, although in that case the assured had been adjudged a bankrupt and a receiver, who had been designated, had not qualified, nor had he taken actual possession. Later he did qualify, and still later, a trustee was appointed.
    In further support of the views here entertained are the cases of Fuller v. New York Fire Insurance Co., 184 Mass. 12, and Fuller v. Jameson, 98 N. Y. App. Div. 53 (90 N. Y. Supp. 456). As against them, the defendant cites, and confidently relies upon, a case entitled, In re Hamilton et al., decided by the United States district court in Arkansas, and reported in 102 Fed. Repr. 683. The policy of insurance there considered contained provisions respecting a change in the “interest, title or possession” of the subject of insurance, similar to the provisions of these policies; and in the opinion of the court are certain dicta in which are expressed substantially the view taken by defendant here; namely, that possession of the receiver before adjudication in bankruptcy was such a change of possession as brought about a cancellation of the policy. But the policy, which was a renewal, was assigned by the assured to the receiver, with the written consent of the insurance company, and the question before the court was, whether a bank, which had received the original policy as a pledge for the payment of a debt by the assured, was entitled to claim the renewal as a continuation of the pledge under the terms of the original agreement with the assured. The point decided was that “the assignment of the policy to the receiver, with the consent of the company, operated as a new and substantive contract by which the rights of the bank, as pledgee, were terminated.”
    We do not regard this case as an authority upon the question presented here, but if we are mistaken in this respect, it need only be said that the decisions of our own state are binding upon us.

      Error assigned among others was the judgment of the court.

      William A. Jordan, with him W. S. Maxey, for appellant.
    — The receivership surely places a cloud upon the title to the property in the case of which the plaintiff, Mar-cello, could not have sold his property, and under those conditions the ownership was not sole and unconditional. His ownership and interest in it was changed by virtue of the interest which the receiver had when he assumed and actually took possession of the property: In re Hamilton, 102 Fed. Repr. 683; Bronson v. New York Fire Ins. Co., 63 S. E. Repr. 283; New Kensington Lumber Co. v. Ins. Co., 35 Pa. Superior Ct. 32; State Mut. Fire Ins. v. Roberts, 31 Pa. 438; McGinnis v. Ins. Co., 38 Pa. Superior Ct. 390; Starkweather v. Cleveland Ins. Co., 22 Fed. Cases, 1093, Case No. 13,309; In re Dean, 7 Fed. Cases, 291, Case No. 3,700; Adams v. Rockingham Mut. Fire Ins. Co., 29 Maine, 292; Perry v. Ins. Co., 61 N. Y. 214; Com. Ins. Co. v. Berger, 42 Pa. 285; Ins. Co. v. O’Maley, 82 Pa. 400; Grandin v. Ins. Co., 107 Pa. 26.

      E. Y. Breck, for appellee.
    — There was no change of ownership or possession: In re La Plume Condensed Milk Co., 145 Fed. Repr. 1013; Fuller v. Ins. Co., 184 Mass. 12 (67 N. E. Repr. 879); Fuller v. Jameson, 98 N. Y. App. Div. 53 (90 N. Y. Supp. 456); Keeney v. Ins. Co., 71 N. Y. 396; Thompson v. Ins. Co., 136 U. S. 287 (10 Sup. Ct. Repr. 1019); Com. Ins. Co. v. Berger, 42 Pa. 285; Collins v. Assur. Corp., 165 Pa. 298; McGinnis v. Ins. Co., 38 Pa. Superior Ct. 390.
    A receiver in bankruptcy is a mere custodian and has no title to the property of the bankrupt: In re Kelly Dry Goods Co., 102 Fed. Repr. 747; Boonville National Bank v. Blakey, 107 Fed. Repr. 891; In re Winship, 120 Fed. Repr. 93; In re Kolin, 134 Fed. Repr. 557; In re Benedict, 140 Fed. Repr. 55.
    January 2, 1912:
   Per Curiam,

The facts and the law applicable thereto in each of these cases are the same. The judgment in each is affirmed for the reasons stated in the opinion of Judge Carnahan.