author: Me. Justice Mestrezat,

text:
    Meanor, Appellant, v. Goldsmith.

      Boroughs — Sidewalk—Lien—Paving—Life tenant — Remainder-man.
    As between a life tenant and the remainder-man, it is the duty of the former to lay a pavement on the sidewalk in front of the lot in the boroughs of this state. If the life tenant fails to do so, and the borough makes the improvement, and files a lien therefor, the lien binds the life estate only, and a sale under it will not affect the estate of the remainder-man. The life tenant is the “owner” within the meaning of the General Borough Act of April 3, 1851, P. L. 320.
    A borough cannot enforce a lien for paving a sidewalk, unless there has been a previous demand on the owner to do the paving and a refusal on his part. Such notice should clearly and plainly be made to appear, and not be left to inference.
    Where no notice to pave has been served upon the remainder-men, and they have not been served with the scire facias issued on the lien, the judgment on the lien may be collaterally attacked by them in an ejectment brought by the remainder-men against purchasers of the property at a sale under the judgment.
    Argued Oct. 25, 1906.
    Appeal, No. 70, Oct. T., 1906, by plaintiffs, from judgment of O. P. No. 3, Allegheny Co., May Term, 1903, No. 158, on verdict for defendants in case of S. J. Meanor et 'al. v. Mary A. Goldsmith, Owner, and Mary Meyers, Tenant.
    Before Mitchell, C. J., Pell, Brown, Mestrezat, Elkin and Stewart, JJ.
    Reversed.
    Ejectment for a lot in the borough of Tarentum. Before McClung, P. J.
    The facts are stated in the opinion of the Supreme Court.
    The court gave binding instructions for defendants.

      Error assigned, was in giving binding instructions for defendants.

      John A. Meta and Ernest C. Irwin, for appellant.
    The proceeding to recover the expenses of laying a sidewalk in default of the owner to pay, is not an action strictly in rem, but has a personal aspect as well, differing in this regard from the lien filed to recover for street pavement: McKeesport Boro, v. Fidler, 147 Pa. 532; Greensburg Borough v. Young, 53 Pa. 280; Pittsburg v. Daly, 5 Pa. Superior Ct. 528; Oliver Cemetery Co. v. Philadelphia, 93 Pa. 129 ; Erie v. Church, 105 Pa. 278; Philadelphia v. Pennsylvania Hospital, 143 Pa. 367; Wilkinsburg Boro. v. Home for Aged Women, 131 Pa. 109 ; Wistar v. City of Philadelphia, 86 Pa. 215 ;Emrick v. Dicken, 92 Pa. 78; Bryan’s Appeal, 101 Pa. 389 ; Salter v. Reed, 15 Pa. 260.
    January 7, 1907:
    A municipal claim for paving a sidewalk must be borne by the life tenant: Hitner v. Ege, 23 Pa. 305; Sands’s Est., 43 Pittsburg Legal Jour. 472 ; McDonald v. Heylin, 4 Phila. 73.
    The sale on a lien filed for expenses incurred in paving a sidewalk along land in which there is a life estate passes only the estate of the life tenant : Pottsville Lumber Co. v. Wells, 157 Pa. 5; Kelso v. Kelly, 14 Pa. 204; Nashville v. Cowan, 78 Tenn. 209 ; Blackwell v. West Am well Twp., 43 N. J. L. 165; McDonald v. Hannah, 59 Fed. Repr. 977; Morrow v. Dows, 28 N. J. Eq. 459 ; Kile v. Fleming, 78 Ga. 1; Gates v. Lawson, 32 Grat. (Va.) 12; Stovall v. Austin, 84 Tenn. 700.
    Notice to both life tenant and remainder-man was necessary : West Chester v. Sahler, 8 Pa. C. C. Rep. 656.

      Nelson Mc Vicar, with him Richard A. Kennedy, for appellee.
    We contend that the judgment in this case should be affirmed, for the following reasons:
    1. That a tenant in remainder in conjunction with the life tenant, is required, under the general borough act of 1851, and according to its general regulations, to construct a sidewalk in front of their property. That a borough, after default of the owners, may construct the walk, file a lien, reduce the same to judgment and sell the property.
    2. That the judgment and title acquired at sheriff’s sale on an execution which is based on a scire facias sur municipal claim, for the debt incurred in the construction of a sidewalk by a borough, in pursuance of the power conferred by the act of 1851, is a judgment in rem and cannot be collaterally attacked: Pittsburg v. Daly, 5 Pa. Superior Ct. 528 ; Philadelphia v. Peyton, 25 Pa. Superior Ct. 350; Hartman v. Ogborn, 54 Pa. 120.
   Opinion by

Me. Justice Mestrezat,

This is an action of ejectment to recover possession of a lot of ground in the borough of Tarentum in Allegheny county.

Ann Meanor died in August, 1870, seized and possessed of the property in controversy, and leaving to survive her as her heirs at law, the plaintiffs in this case and a husband, Samuel Meanor, since dead. On a judgment obtained against Samuel Meanor, his life estate in the property was sold and conveyed by the sheriff to James Kennedy, who thus became tenant pur autre vie of the premises.

During the tenancy of Kennedy, the borough of Tarentum laid a pavement on the footwalk in front of the premises. To collect the expenses thus incurred, the borough filed a lien in the common pleas of Allegheny county on January 12, 1900, against the lot of ground for which this action was brought. The lien set forth a description of the lot, and the amount of the claim and penalty, $42.19, “ the sum aforesaid being a debt due the borough of Tarentum by James Kennedy, Sr., Samuel Meanor, Ann Meanor’s heirs and others unknown, owners and reputed owners, for work done and material furnished (with twenty per cent advance thereon, within thirty days last past, in and about the construction) grading, paving, curbing and guttering of a certain side or footwalk along said described property .... said work having been done and material furnished by said borough upon the failure of said James Kennedy et al. to do the same, and after due and regular notice to them so to do, as provided in the borough ordinance of February 25, 1898, .... the said James Kennedy and others as aforesaid being the actual or reputed owner and Isaac Johns being the occupier of said premises.” A scire facias was issued on the lien, January 12, 1900, to which the sheriff returned that he had served James Kennedy, Sr., and John B. Meanor and Isaac Johns by leaving a copy of the writ at their respective residences, and nihil habet as to Samuel Meanor and other defendants. An alias scire facias was issued to which the sheriff returned that he had served the writ on John Meanor and James Kennedy, Sr., by leaving a copy at their respective residences, and on Isaac Johns, occupier of the premises described in the writ, in the same manner, and by affixing a copy of the writ upon the door of the premises; and that he had served the writ upon Samuel Meanor, Ann Meanor’s heirs and others unknown, owners or reputed owners, by publication. Judgment was entered “ against the defendants ” in default of appearance and affidavit of defense, sec. reg. on April 19, 1900, a levari facias was issued thereon and the property was sold by the sheriff for $100 to James M. Smith who conveyed it to Mary A. Goldsmith, one of the present defendants.

This is a suit by the remainder-men, who are the heirs of Ann Meanor, deceased, to recover the premises sold and conveyed under the proceedings on the lien filed by the borough. The plaintiffs’ contention is that the claim for constructing the pavement on the footwallc is a personal debt of the life tenant, that the lien filed against the premises was to enforce payment of that debt and was not a proceeding strictly in rem, binding the interests of the remainder-men in the property, and hence the lien bound only the life interest of Samuel Meanor, and the sale on the judgment recovered on the lien sold only the estate of the life tenant in the premises. The life tenant having died, it is claimed that the remainder-men, the plaintiffs, are entitled to the possession of the lot.

The defendants contend that under the general borough Act of April 3, 1851, P. L. 320, the remainder-men as well as the life tenants were required to construct the pavement in front of the property, that the lien filed by the borough was a proceeding in rem and bound all the estates or interests in the property, that a sale on the scire facias issued on the judgment obtained on the lien conveyed all interests in the property to the purchaser, and that the judgment cannot be attacked collaterally in this action.

The court below being of opinion “that the record seems to show title in the defendant,” directed a verdict for the defendants upon which judgment was entered. The plaintiffs have taken this appeal.

The proceedings in this case resulting in a judgment and sale of the premises were taken under the general borough Act of April 3, 1851, P. L. 320, 1 Stewart’s Purdon, 494. Section 2 of the act provides, inter alia, that every borough shall have power: “ to require and direct the grading, curbing, paving and guttering of the side or footwalks by the owner or owners of the lots of ground respectively fronting thereon, in accordance with the general regulations prescribed; (and) to cause the same to be done on failure of the owners thereof, within the time prescribed by the general regulations, and to collect the cost of the work and materials, with twenty per centum advanced thereon from said owners, as claims are by law recoverable under the provisions of the law relative to mechanics’ liens; and .... the name or names of the actual or reputed owner or owners, as also of the occupier or occupiers of the premises for the time being, shall be set forth in a statement to be filed within thirty days after such expense shall have been incurred.”

There can be no question of the authority of the borough under the act of 1851 to pave a sidewalk on failure of the owner of the premises to do so, and collect the expense from him in the manner directed by the statute. The language of the act is that the borough may require the paving of the sidewalk “ by the owner or owners of the lots of ground respectively fronting thereon,” and “cause the same to be done on failure of the owners thereof .... and collect the cost of work and materials .... from said owners.” We have held that the duty of laying a pavement on a sidewalk is imposed directly on the property owner; that an ordinance requiring the owner to lay such pavement is a police regulation; and that the amount expended in enforcing the ordinance is not a tax or a municipal assessment in the nature of a tax: Wilkinsburg Borough v. Home for Aged Women, 131 Pa. 109; Mt. Pleasant Boro. v. B. & O. R. R. Co., 138 Pa. 365 ; Phila v. Penna. Hospital, 143 Pa. 367. On the other hand, we have ruled that an assessment for the construction of a sewer or for paving the roadway of a street in front of a lot is a species of local taxation: Oliver Cemetery Co. v. Phila., 93 Pa. 129; Erie v. First Universalist Church, 105 Pa. 278; McKeesport Boro. v. Fidler, 147 Pa. 532.

In the case of a sidewalk, therefore, the claim is simply a personal obligation imposed on the owner of the premises by a police regulation for which, prior to the special remedy provided by the act of 1851, an action at common law would lie, and is not a debt for which the land is in the first instance liable. But the claim for constructing a sewer or paving the roadway is in the nature of a tax for which the land itself is debtor and the collection of which could not be enforced by a suit at common law. Keeping in view these important distinctions between the claims in the two classes of cases, we may more readily understand the difference in the effect of a sale of the premises in a statutory proceeding to enforce their collection.

As between the life tenant and the remainder-man, this court has determined it to be the duty of the former to lay a pave: ment on the sidewalk in front of a lot in the boroughs of this state. That question was raised and decided in 1854 in Hitner v. Ege, 23 Pa. 305, and is no longer open to discussion. In the opinion delivered by Lewis, J., reversing the trial court, it is said (p. 307): “ By the borough ordinance it is made the duty of the owner or occupier ’ to ‘ pave the sidewalk, with brick, within three months’ after the enactment. This duty may be enforced by a penalty. As Ege, the tenant, was thus bound to pave the sidewalk, it ivas not necessary that he should await the pleasure, of his landlord in this respect. As a tenant from year to year, his term was too brief to justify the court in charging him with the expense of the improvement, while the temporary character of the work, requiring repeated renewals during a lifetime, indicated the injustice of charging it upon the remainder-men or the reversioners. Such a structure is properly chargeable upon the tenant for life.”

The person, therefore, vpho was liable in the case at bar for the expense of laying the pavement on the sidewalk was the life tenant, Meanor, or Kennedy who held Meanor’s life estate in the premises. He was the “owner” of the lot in contemplation of the act of 1851, whose duty it was to lay the pavement. In the absence of the statutory provision for enforcing payment of the claim, the borough could have brought a personal action against the life tenant, and recovered a general judgment which would have been a lien on all his real estate, and for which it could have been sold on an appropriate execution. ’ The remainder-men, on the other hand, were not liable personally for the debt, nor could their estates in the premises have been subjected in any way to the claim for laying the pavement.

But it is contended by the defendants, and this is the pinch of the case, that the estate of the remainder-men in the liened premises is made liable for the expenses of paving the walk by the provision of section 2 of the act of 1851, which provides that the borough may collect the claim “ from said owners, as claims are by law recoverable under the provisions of the law relative to mechanics’ liens.” But is that position tenable in view of the fact that the claim is a personal obligation of the life tenant and for which he alone was liable in a personal action prior to the remedy prescribed by the act of 1851? Does this provision of the act create a lien on the estate of the remainder-men, or a liability on their part for the debt of the life tenant, and also give a remedy to enforce the lien and liability against the estates of the remainder-men in the premises abutting the improvement ?

The mechanic’s lien Act of June 16, 1836, P. L/695, creates a lien as well as provides a remedy for enforcing.it against the building and ground covered by the building and appurtenant thereto for debts contracted for work done and materials furnished for the structure. A lien is a hold or claim which one person has upon the property of another as a security for some debt or charge : 2 Bouv. L. Dict. 226. The effect of the act of 1836, and prior legislation on the subject, was to make the claim a charge upon and payable out of the land itself. The land as well as the title of all persons in the land, whether leasehold, freehold, or in fee, were bound by a mechanic’s lien: Savoy v. Jones, 2 Rawle, 343; Bickel v. James, 7 Watts, 9; Holdship v. Abercrombie, 9 Watts, 52; Leiby v. Wilson, 40 Pa. 63 ; Waters v. Wolf, 162 Pa. 153. But in 1840 the legislature, believing that the construction put upon the act of 1836 which supplied all previous legislation on the subject worked injustice, enacted that “ the lien created by the act .... shall not be construed to any other or greater estate in the ground on which any building may be erected than that of the person or persons in possession, at the time of commencing the said building, and at whose instance the same is erected ; nor shall any other or greater estate than that above described be sold by virtue of any execution authorized or directed in the said act: ” Act of April 28, 1840, section 24, P. L. 461, 2 Purd. 1309. In speaking of this act in Leiby v. Wilson, 40 Pa. 63, Lowrie, C. J., said : It was not for such a case as this (lessee under an improvement lease) that the act was framed, but to correct the mischief developed in several cases (2 Rawle, 343,7 Watts, 9, 9 Watts, 52), of allowing the lien to sweep away by articles of agreement the estates of remainder-men, lessors, and vendors, who had had no part in the contract for the erection of the buildings.” And in Waters v. Wolf, 162 Pa. 153, Dean, J., delivering the opinion says (p. 167): “ So whatever may be the logical deductions from some of the decisions which, prior to the' act of 1840, held the entire estate bound by the lien, the weight of authority is, that, without violence to settled legal principles, a debt without a contract cannot be created against the owners. If it be conceded that, by mere legislative fiat, an indebtedness by one man to another may be established independent of contract,, it necessarily follows that the legislature may prohibit the debtor from relieving his property by contract from the lien of such indebtedness.”

If the claim of the borough in this case had been for work done or materials furnished to the life tenant in the construction of a building on the premises, it is apparent that without a contract with them no lien would lie against the estates of the remainder-men in the lot of ground, as they were not in possession, and their estates could not have been sold on an execution issued on a judgment recovered on the lien. Unless, therefore, a lien filed to enforce a claim against the life tenant for paving a sidewalk is to be extended so as to subject other estates than those bound by mechanics’ liens, the lien in this case would not subject the estates of the remainder-men to payment of the borough’s claim for paving the sidewalk in front of the premises sold on this lien. Here, the remainder-men were not in possession of the lot and had no right to the possession at the time the improvement was made.

There is and can be no sufficient reason assigned for extending a lien for paving a sidewalk beyond that of a mechanic’s lien, and for holding that the estates of the remainder-men in the property liened can be subjected to the payment of the claim. As we have seen, the duty to pave was on the life tenant. He was in possession of the premises and was required to make the improvement. He was the “ owner ” in contemplation of the act of 1851, as held by this court, who was required to pave the walk on request of the borough authorities. The act gives no authority to the borough to require the paving to be done by the remainder-men, for the reason, first, that it is the duty of the life tenant to pave, and, second, that the remainder-men were not in possession and had no right to the possession of the premises, and hence could not have done the paving if required by the borough. When the act of 1851 was passed, authorizing boroughs to require the owners of lots to pave sidewalks, it must be assumed that the legislature knew of the act of 1840 restricting a mechanic’s lien to the estate of the party in possession of the premises. It was therefore manifestly intended by the act of 1851 to give the borough the authority to require the owner in actual or constructive possession to lay the pavement on the footwalk, and on his refusal to do so, to enforce payment of the expenses by a lien and proceedings thereon against his estate, as provided in the mechanic’s lien law. The provision of the act of 1851 providing the procedure for enforcing a claim for paving a footwalk did not create a lien or, an indebtedness for the improvement against the remainder-men or any other owner of an interest in the premises, but simply, provided a remedy against the life tenant’s interest in the premises, in the language of the act itself, “ to collect the cost of the work and materials .... from said owners.” In fact, if we hold that remainder-men can be required to make such an improvement, and thereby perform the duty and assume the liability of the life tenant, we are confronted with the absurd proposition that they can be legally required to do something — enter upon the premises and pave — when they are not in possession of the premises, and would be trespassers if they entered to do the work. And, further, it would be recognizing as sound the principle, condemned in Waters v. Wolf, 162 Pa. 153, that the legislature has the power to compel one man to pay the indebtedness of another without a contract, express or implied, on the part of the former. Such an interpretation of the act of 1851 clearly discloses its own refutation.

There was no evidence in the case, aside from the lien itself, that the remainder-men were notified or required to pave the sidewalk and declined to do so. A demand and refusal are essential to sustain a claim under the act of 1851; and the borough has no right to collect either the cost or the penalty without a previous demand and refusal: Mt. Pleasant Borough v. B. &. O. R. R. Co., 138 Pa. 365. We do not think the lien avers notice to the remainder-men. It alleges that the claim was filed for $42.19, “ being a debt due the borough of Tarentum by said James Kennedy, Sr., Samuel Meanor, Ann Meanor’s heirs and others unknown, owners and reputed owners.” It then avers that the paving was done “ upon the failure of said James Kennedy et al., to do the same, and after due and regular notice to them so to do.” This is wholly insufficient as an averment of notice to the remainder-men. We are asked to infer that the words “et al.” refer to Ann Meanor’s heirs. But whether they mean “ and another ” or “ and others ” is indeterminable, and if either, whether they refer to other persons who have been named in the preceding part of the lien, or to persons other than those named therein. It is simply a guess as to the persons who were intended by these words in the averment. As the right to file a lien and the consequent right to take property and apply it to the payment of the debt depend upon notice to the parties sought to be charged, it follows that such notice should clearly and plainly be made to appear and not be left to inference. While it has been held that notice need not be averred in the statement or lien, yet we have distinctly ruled that notice to the owner is a prerequisite to the validity of a lien for paving a sidewalk. It is therefore essential that the borough show unequivocally and certainly that notice to pave was given the owner before it is in a position to compel him to pay for the improvement by the special remedy provided by the act of 1851. Here, the lien itself as well as the record of the trial of the scire facias issued on the lien failed to show any notice to the remainder-men to pave the footwalk, and hence the lien as to them is of no validity and is void.

It is further claimed by the deféndants that the lien and judgment thereon cannot be attacked collaterally in this action. But it is difficult to see that any judgment was entered or could be entered against the remainder-men on the scire facias. The judgment, as noted above, was entered against James Kennedy, Sr., Samuel Meanor, and Ann Meanor’s heirs. The remainder-men are alleged to be the heirs of Ann Meanor, deceased, but their names do not appear in any of the proceedings from the filing of the lien to the deed to the sheriff’s grantee. And none of them was served with notice to lay the pavement or was made a party to or served with the scire facias or alias scire facias issued on the lien. A judgment was very properly entered against Kennedy, who owned the life estate, as he had due notice of every step throughout the entire proceedings. Upon the judgment against the life tenant, his interest in the real estate could properly be sold. The proceeding on the claim was, as we have seen, to enforce a personal debt due the borough from him and not from the remainder-men. If they had been duly notified and had refused, and a judgment had been obtained against them upon a scire facias duly served, there would be some grounds for the defendants’ contention that they were concluded by the judgment and sheriff’s sale of the premises. Or if this was strictly a proceeding in rem for paving the roadway or the like and the claim was a lien on the lot itself, it might well be that the judgment, obtained upon a constructive service of the sci. fa., would be suificient to authorize a sale of the property. But here, there was no notice to the remainder-men to pave the walk and no service of the sci. fa. on the remainder-men. To permit a judgment to stand and be the basis of the sale of the defendants’ real estate under such circumstances, would be to deprive a party of his property without due process of law. By failure to serve the remainder-men, the court could acquire no jurisdiction over them, and hence a judgment entered against them would be void. Although this was a statutory proceeding to make the owner’s real estate liable for a debt, it was simply for the purpose of enforcing a claim due from him to the borough, and not a debt imposed upon the land which was sold on the lien. This distinction, as suggested above, is material in determining the validity of the sale upon which it is claimed the interests of the remainder-men in the property were sold.

We have not overlooked the sheriff’s return to the scire facias which shows that a copy of the writ was left at the residence of John B. Meanor, nor the return to the alias scire facias which shows a similar service of the writ on John Meanor. But there is nothing in the case whatever showing that either of these men, if different individuals, was a remainder-man, or that either of them was J. B. Meanor, a remainder-man and one of the plaintiffs in this action. Hence, there is nothing in this record to show that J. B. Meanor, one of the heirs of Ann Meanor, deceased, and a plaintiff here, was notified to lay the pavement on the footwalk or was served with any writ of scire facias issued on the lien filed against the property. The record shows that no judgment was entered against J. B. Meanor on the scire facias issued on the lien. These facts make it apparent that his interest in the property was not subjected to the lien by the borough, nor bound by the judgment on which the property was sold.

For the reasons above stated, we are of opinion that the lien filed by the borough to enforce the payment of the claim for paving the sidewalk in question was without validity as to the heirs of Ann Meanor, deceased, the remainder-men; that the judgment thereon was not entered against them and did not bind their interests or estates in the land; and that the sale and conveyance by the sheriff on the judgment did not sell or convey their interests or estates in the land to the purchaser. It follows that the learned trial judge erred in directing a verdict for the defendants in this action, and that under all the evidence in the case the verdict should have been for the plaintiffs.

The judgment is reversed, and judgment is now entered for the plaintiffs and against the defendants for that part of the premises described in the writ to which no disclaimer was entered by defendants, with six cents damages and costs.


source: Caselaw Access Project

author: Per Curiam,

license: Public Domain

text:
    Holmes v. Howler, Appellant.

      Deed — Incumbrances—Railroad siding — Specific performance — Equity.
    Where an owner of land on which there is a railroad siding leases the same for a term of years, reserving the use of the siding, but giving to the lessee an option to purchase the land “the title to be a fee simple title, clear of all incumbrances,” the lessee in exercising the option has a right to a deed in fee simple without any reservation as to the siding.
    Argued Oct. 25, 1906.
    Appeal, No. 77, Oct. T., 1906, by defendant, from decree of O. P. No. 2, Allegheny Co., July T., 1902, No. 677, on bill in equity in case of W. M. Holmes now for use of the Crown Wall Plaster Company v. Eli R. Dowler.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.
    Bill in equity for specific performance. Before Frazer, P. J.
    Prom the record it appeared that on November 19, 1897, defendant executed a lease of certain land in the borough of Braddock to William M. Holmes for the term of five years at an annual rental of $500. The lease contained, inter alia, the following:
    “ Provided, however, and it is expressly agreed by both parties hereto that said Dowler reserves unto himself, his heirs, executors, administrators and assigns, the right to occupy, maintain, use and operate the railroad siding extending from the Pittsburgh, McKeesport and Toughiogheny Railroad across the northeasterly corner of said lot where said railroad siding is now located. And it is expressly further agreed that said Holmes, his heirs, executors, administrators and assigns, shall not and will not in any manner nor at any time blockade or in any manner obstruct the said Dowler and the said Pittsburgh, McKeesport & Toughiogheny Railroad Company in the use and operation of said railroad siding as and where now located. The said Holmes to have and to hold the said tract of ground and all and singular the premises hereby demised with the appurtenances (subject to the reservation aforesaid) from, the date hereof for and during the term of five years.” It was further provided'that Holmes should have the right and first option of buying the leased premises at any time within 2-J years from the date of the agreement at the price or sum of $10,500, or at the price or sum of $11,000 at any time after the expiration of 2-3,- years and prior to the expiration of the term of the lease, and in the event of a purchase by Holmes or his assignee it was provided that “ the title to be a fee simple title, clear of all encumbrances.”
    The agreement was subsequently assigned, with the consent of defendant, to the Crown Wall Plaster Company, a corporation of the state of Pennsylvania.
    The Crown Wall Plaster Company on May 3, 1902, elected to purchase the lot, and defendant thereupon tendered to it a deed in which there was a reservation of the use of the siding. The plaintiff refused to accept the deed on the ground that it was entitled to a deed free of all incumbrances.
    Frazer, P. J., after stating the facts, found the following conclusions of law:
    1. The defendant’s contention is that plaintiff is not entitled to have the land free from the defendant’s railroad siding, because that siding was there at the time of the execution of the lease, and its existence was known to lessor. In other words, that this case is ruled by the line of cases which hold that a purchaser of land, in the absence of an express reservation to the contrary, takes the property subject to any apparent existing servitude.' This is undoubtedly the rule where the servitude is for the benefit of a third party, but where the servitude is for the benefit of the grantor, and no one else, it seems to us a conveyance of the property will extinguish the servitude, unless the same is expressly reserved. In this case, the defendant did not reserve the railway siding in the event of a sale of the premises ; on the contrary, he bound himself to convey by “ title, clear of all encumbrances,” which, as we understand it, means an absolute, entire and unincumbered estate. That such was intended by the parties is further indicated by the fact that the agreement specifically reserves to defendant the use of the siding during term of the lease, and follows that reservation by the clause providing a fee simple title, clear of all incumbrances, in the event of a purchase by the lessee. With the railway siding upon the premises, and the right remaining in defendant and his heirs and assigns to maintain and operate it, the deed tendered does not convey an absolute and unincumbered estate.
    2. The contention of defendant that the deed should be reformed because of the mistake of the scrivener in omitting to reserve the railway siding in the event of the sale of the property, has not, in our opinion, been established. To warrant the reformation of a written instrument, the testimony establishing a mistake must be clear, precise and indubitable, and must establish the fact beyond a reasonable doubt. Here we are unable to say from the testimony that beyond a reasonable doubt there was a mistake made in drawing the agreement. Two gentlemen, both reputable, testify positively on that question. One says there was an omission; the other says there was not. Under those circumstances, the agreement must stand as written.
    January 7, 1907:
    3. That the plaintiff is entitled to specific performance, as prayed for.

      Error assigned was the decree for specific performance.

      R. C. Duncan, with him E. J. Smail, for appellant. —
    Where an incumbrance is such as affects the physical condition of the property, it is presumed: (a) that the grantee bought with notice of it; (b) that it was in contemplation of the parties, and that the price was fixed with reference thereto: Patterson v. Arthurs, 9 Watts, 152; Wilson v. Cochran, 48 Pa. 107; Memmert v. McNeen, 112 Pa. 315; Friend v. Oil Well Supply Co., 179 Pa. 290.
    Where a continuous and apparent easement or servitude is imposed upon land, a purchaser of the servient property, in the absence of an express reservation or agreement on the subject, takes the property subjéct to the easement or servitude : Seibert v. Levan, 8 Pa. 383; Kieffer v. Imhoff, 26 Pa. 438; Phillips v. Phillips, 48 Pa. 178; Penna. R. R. Co. v. Jones, 50 Pa. 417; Cannon v. Boyd, 73 Pa. 179; Zell v. Universalist Society, 119 Pa. 390; Geible v. Smith, 146 Pa. 276; Grace M. E. Church v. Dobbins, 153 Pa. 294; Ormsby v. Pinkerton, 159 Pa. 458; Friend v. Oil Well Supply Co., 179 Pa. 290; Manbeck v. Jones, 190 Pa. 171; Held v. McBride, 3 Pa. Superior Ct. 155 ; Koons v. McNamee, 6 Pa. Superior Ct. . 445 ; Stuart v. Line, 11 Pa. Superior Ct. 345.

      B. A. Balph, with him James Balph, for appellee.
   Per Curiam,

Decree affirmed ofi the conclusions of law in the opinion of the court below.


author: Mr. Justice Fell,

text:
    James McMillin Printing Company v. Pittsburg, Carnegie & Western Railroad Company, Appellant.

      Railroads — Eminent domain — Leasehold estate — Extension of lease— Damages — Measure of damages — Evidence.
    Where a railroad company attempts to condemn a building under the right of eminent domain without municipal consent, and, before such consent is obtained, a lease of a part of the building is extended, the company will bp liable to make compensation to the tenant for the term as extended, and not merely for the original term.
    In an action by a tenant whose leasehold interest has been taken under the right of eminent domain, the railroad company cannot complain that the tenant was permitted to recover the cost of removing machinery as a separate item in addition to the value of the lease, where the case was tried by both sides on the theory that there could be such a recovery.
    Where a building is condemned by a railroad company, the cost to a tenant-of removing machinery may be considered not as a substantive element of damage, but as bearing upon the value of the leasehold interest.
    Argued Oot. 25, 1906.,
    Appeal, No. 80, Oct. T., 1906, by defendant, from judgment of C. P. No. 8, Allegheny Co., Feb: T., 1904, No. 140, on. verdict for plaintiff in case of James McMillin Printing Company v. Pittsburg, Carnegie & Western Railroad Company.
    Before Mitchell, C. J., Fell, Brown, Mbstrezat, Elkin and Stewart, JJ.
    Affirmed.
    Appeal from report of jury of view. Before Kennedy, P. J.
    The court charged in part as follows:
    ' [If they are entitled to recover here, they are entitled, as I have already intimated to you, to recover the value of that lease, its fair market value, at the time it was appropriated by the railroad company. They are entitled, in addition to that, to the actual expenses necessarily incurred through this enforced removal from one place to another. The first item of damages is this matter of the expenses of the enforced removal. They are entitled under that item for the actual expenses necessarily incurred, as I have already stated, in removing from one building to the other. You have the figures making up the different items of expenses, making the total amount some $1,600. You have heard the various items making up that amount, and you have heard the objections or answers to some of them. You will consider the testimony with reference to all the items going to make up that amount claimed here, and for such expenses as you believe or find the plaintiff company actually incurred in that enforced removal, for that amount you will allow them compensation by your verdict.] [6]
    [Now, one item is the difference in the rent they had to pay for the new premises, more than they paid for the old. That item is not submitted to you, and it is not claimed they are entitled to that as a matter of damages, but the difference is submitted here as showing that the lease was of material value. You are to ascertain from all .the testimony, if you can, what this lease ivas worth, what it was actually worth, what was its market value, and you will consider all the circumstances with reference to the lease and the premises there, and the occupation of them, and if you can find out, from this testimony, what that lease was actually worth in dollars and cents, for such amount you will allow the plaintiff, in addition to the cost of removal.
    There is no question in regard to the cost of removal from one place to the other, as I have already told you. They are to be allowed for that, and your verdict must be for that amount in any event. But this question of the value of the lease is submitted for your serious consideration, and all the testimony in regard to it. .1 have mentioned one item, the loss of the rent, and the claim for the actual expense or loss in the stoppage of the machinery; that element is submitted. They say that the stopping of their business, or the stopping of their machinery during the timé of removal was an expense to them.] [2]
    [Then they claim to have lost by the difference in the terms of the lease with reference to the power to be furnished. You have heard a great deal of testimony about the power that was furnished for the running of this business, the printing establishment of the plaintiff company. In the lease from Bair & Gazzam to the plaintiff company there was a provision fixing certain terms upon which they could use the power out of ordinary business hours, at night for instance, while they obtained no such privilege by the lease made in the new quarters. It appears, however, from the testimony, that they were to be allowed the use of the power at night, or at any time outside of the usual working hours, on the payment of a larger sum of money,- — -instead of $1.00 an hour as in the old premises, it was $5.00 for the first hour and $1.00 an hour afterwards. That is claimed as a valuable provision in the first lease which they did not have in the lease for the new premises. From the testimony it appears that they did not use it at night in the new premises, and hence they have not suffered any loss. I think one witness said they used it two or three times, at any rate they used it very little, if any, so that an actual loss has not been incurred by this plaintiff company in the failure to. have this provision in the lease.' That illustrates.to you the mistake you would make if you would allow this plaintiff company for the loss of these various items, .the amounts that have been stated here as the amounts of the loss incurred to this plaintiff company. In other words, it shows the necessity of your not considering these various items of damages,, or items going to make up the measure of damages which you are to allow the plaintiff, but only to consider them in finding out, if j^ou can, what the fair market value of this lease was. Was that lease of value over and above the conditions which the tenant, the plaintiff, were obliged to perform; what was its fair market value? I only mention this matter in regard to the difference in the cost of the power to be furnished outside of the regular working hours, as illustrating to you the mistake you would make in allowing the plaintiff these items which he claims, ■ the various items he claims to have lost by reason of this destruction of the lease, except the item of actual expense incurred in moving. That is an item constituting a measure of damages, do not make a mistake in that. But as to the other items you are only to consider them in your efforts to ascertain what market value this lease had, if any. Counsel for plaintiff has properly said to you that he does not claim them as items going to make up the measure of damages, yet they are items for you to consider in ascertaining the market value of this lease, if any. I need not go over the other items, for they are all of the same nature, — one is the difference in the operation of this machinery on one floor instead of on two, as in the new building.] [3]

      Plaintiff presented this point:
    2. In estimating the value of the plaintiff’s leasehold, the jury should take into consideration the costs of removal to and the fitting up their printing plant in the new location, the loss and interruption of its business during the removal, the increase of rent including the increased cost of power, the loss of the privilege of power for working at night, the inconvenience and increased costs of doing business at the new location, and any other facts and circumstances in evidence injuriously affecting plaintiff’s property as the direct and necessary result of the appropriation of their leasehold by the defendant. Answer : This is affirmed. This is, as you will observe, if you notice carefully its meaning, in the line of my instruction to you ; not that you are to take those items, except the item of the cost of removal, as a measure of damages, but only for your consideration in ascertaining what, if anything, was the fair market value of this lease, which the plaintiff has lost. Has he lost anything by it 1 It would seem, from the testimony, that the machinery is substantially as good as it was before the removal, but the loss there, as it turns out from the claim made afterwards, was not actual loss, or the injury to the machinery in moving, but the loss which they claim in the operation of the machinery on the two floors instead of the one. But those are simply matters for your consideration in ascertaining if this lease has a market value, and if so what. [9]
    Defendant presented these points:
    1. It appearing from the evidence that the defendant railroad company, by due corporate action, had by resolution of its board of directors, adopted July 29,1901, appropriated the property of Henry C. Bair for railroad purposes, and on November 22, 1902, the court of common pleas No. 1 of Allegheny county, Pennsylvania, at No. 182, December Term, 1902, approved absolutely a bond to Henry C. Bair, conditioned to pay him his damages occasioned by the appropriation made July 29, 1901, as aforesaid, the defendant company acquired a complete title to the property of Henry C. Bair for railroad purposes, subject to the right of the various lessees and sub-lessees therein to compensation for the value of the then current term of their several leases, if any ; and, subject to such leases and subleases, the right of entry and exclusive possession of the entire property, as of date November 22,1902. Answer : Refused. [10]
    2. That by virtue of the adoption by the board of directors of the defendant company of the resolutions of July 29, 1901, appropriating the premises at the southwest corner of Ferry street and Third avenue, first ward, city of Pittsburg, then owned by Henry C. Bair and in the possession of ■ said Bair, his lessees and their sublessees, said premises became the property of, and title therein vested in the defendant railroad company, subject only to the payment of, or securing to, the parties interested, the damages accruing by reason of said appropriation, and any lease made subsequent to that date would be invalid as to the defendant railroad company. Answer: Refused. [11]
    4. There being no evidence offered in this case, upon the part of the plaintiff, of the value of the unexpired term of the leasehold of the plaintiff in the Bair building, alleged to have been appropriated by the defendant, the measure of damages, under all the testimony, — if the plaintiff is entitled to recover at all, — is the actual amount shown to have been necessarily expended by the plaintiff in the removal of the machinery and other property of the plaintiff from the Bair building to the Imperial building; and if the jury should find that the plaintiff is entitled to recover, your verdict should be for that amount. Answer: Refused. [13]
    Yerdict and judgment for plaintiff for $3,093.79. Defendant appealed.

      Errors assigned were (6-11, 13) above instructions, quoting them.

      Willis F. McCook, for appellant. —
    The rule of measure of damages where property is appropriated under eminent domain is the same whether the assessment of damages be to the tenant in fee, for life or for years: Phila. & Reading R. R. Co. v. Getz, 113 Pa. 214; Warden v. Philadelphia, 167 Pa. 523.
    By his contract of lease, plaintiff was bound to remove and bear the expense of removal at the end of his term : Emery v. Boston Terminal Co., 178 Mass. 172 (59 N. E. Repr. 763).
    It was error to give plaintiff the value of the lease and in addition the cost of removal: Moudy Mfg. Co. v. Penna. R. R. Co., 212 Pa. 156; Cobb v. Boston, 109 Mass. 438 ; Becker v. R. R. Co., 177 Pa. 252; In re New York Central & Hudson River R. R. Co., 35 Hun, 306 ; Ranlet v. Concord R. R. Corporation, 62 N. H. 561; Dyer v. Wightman, 66 Pa. 425.
    January 7, 1907:

      Levi Bird Duff, with him L. B. D. Reese, for appellee.
    The appellee was an owner and party interested and entitled to compensation for its leasehold: Railroad Co. v. Davis & Leeds, 26 Pa. 238 ; Railroad Co. v. Eby, 107 Pa. 166 ; Railroad Co. v. Getz, 113 Pa. 214; Pittsburg v. Ry. Co., 205 Pa. 13.
   Opinion by

Mr. Justice Fell,

This action was by a subtenant to recover the loss sustained by the taking of the leased property by the defendant in the construction of its road. The plaintiff conducted a printing establishment on the third floor of a building owned by H. C. Bair, who had leased the whole building to the Bair & Gazzam Manufacturing Company for a term of ten years expiring April 1, 1907. The manufacturing company leased the third floor to the plaintiff for a term which expired April 1, 1903, and on January 28, 1903, extended the lease to April 1, 1907. A bond to secure the owner of the building was approved November 22, 1902. At this time municipal consent to enter the city of Pittsburg had not been obtained. Proceedings had been instituted by the city to enjoin the construction of the road and it was decided January 5, 1903, that municipal consent was necessary ; see Pittsburg v. Ry. Co., 205 Pa. 13. Consent was obtained in February, 1903, and the defendant by direction of the court of common pleas filed another bond to secure the owner. This bond was approved April 28,1903. A bond to secure the plaintiff in this case was approved June 6, 1903.

The time of the appropriation of the owner’s interest in the building became of importance because of the contention of the defendant at the trial that the extension of the plaintiff’s lease on January 28, 1903, was made after the whole building had been appropriated; that the plaintiff acquired no additional right by it, and that the term for the taking of which it could recover ended April 1,1903, and not April 1,1907. The answer to this contention is that the extension of the plaintiff’s lease antedated any valid proceedings by the defendant to appropriate the owner’s interest in the building. Until consent had been obtained, it had no right to enter the city and it could not appropriate any property therein. The court was therefore right in holding that there was no appropriation until the approval of the second bond, and that the plaintiff’s term extended to April 1, 1907.

The instruction as to the measure of damages was that the plaintiff was entitled to recover the value of its lease and in addition thereto the reasonable cost of removing the machinery, and that in determining the value of the lease the increased rental it was required to pay and the actual, direct loss occasioned by the stopping of its machinery might be taken into consideration. That the cost of removing the machinery was submitted as a distinct item for which there could be a recovery and not merely as evidence of the value of the right of which the plaintiff was deprived, is a matter of which the appellant should not now complain. The case was tried by both sides on the theory that there could be a recovery of the cost of removal in addition to the value of the lease. The appellant’s counsel asked the court to instruct the jury that, there being no evidence of the value of the unexpired term of the lease, the measure of damages under all the testimony was the actual amount shown to have been expended in the removal of the machinery and other property from the building, and that the verdict should be limited to that amount. "When a case has been tried on the ground taken by the appellant at the trial, he should not be heard to question its correctness: Carpenter v. Lancaster, 212 Pa. 581.

Whether in an action by a tenant whose leasehold interest has been taken under the right of eminent domain, the cost of removing machinery used in the business in which he was engaged and losses directly resulting from interruption of the business can be considered, is a question on which the decisions are not harmonious. The market value of the land taken is the test universally applied in an action by an owner, and it is as accurate a measure of his loss as any that can be set up. What he is entitled to is the value of the land ascertained by a fair appraisement, and of this value the selling price of land similarly situated is prima facie the best evidence. But market value is an unsatisfactory test of the value to a tenant of a leasehold interest. It is really no test at all, because a lease rarely has any market value. Generally it is not assignable at the will of the tenant, and he pays in rent all that the right of occupation is worth. The right of which he is deprived and for which he is entitled to full compensation is the right to remain in undisturbed possession to the end of the term. The loss resulting from the deprivation of this right is what he is entitled to recover. The value of the right he is forced to sell cannot ordinarily be measured by its market price, for there is no market for it, nor can it always be measured by the difference between the rent reserved and the rental value if the lease should be a favorable one. If, as was the case here, a tenant engaged in a business requiring the use of heavy machinery and appliances should secure a new place equally well adapted to his business and at the same rent, he wonld still be at the expense of removal and at a loss because of the stoppage of his business. These are matters to be considered in connection with others, not as substantive elements of damage, but as tending to prove the value of the leasehold interest.

This subject was considered in Getz v. Railroad Co., a case twice before this court, reported in 105 Pa. 547 and 113 Pa. 214, in which a part of the leased property, used as a marble mill, was taken, compelling a removal of the tenant’s business. It was held that in ascertaining the damages to the tenant the value of the lease and also of the machinery and fixtures in place were to be taken into consideration and that, as tending to show the difference in value of the machinery and fixtures before the taking of the property and their value to be removed and applied to the same or other use, the expense of removal was evidence. In Kersey v. Railroad Co., 133 Pa. 234, a part of the tenant’s coal yard was taken in building a railroad. Evidence was admitted to show the cost of reconstructing appliances used in the business, the increased cost of handling coal, and the increased waste resulting from breakage, as affecting the value of the leasehold. In Ebret v. Railroad Co., 151 Pa. 158, the plaintiff used the leased premises in carrying out a contract to remove daily from the city gas works large quantities of coal tar, and evidence was received to show the additional cost necessarily incurred in performing the contract. In none of these cases was there a departure from the rule that the tenant’s recovery is restricted to the value of the unexpired term. The evidence was admitted to show this value. Becker v. Railroad Co., 117 Pa. 252, is not in conflict with these cases. The plaintiff there was the owner of the building taken, in which he carried on the business of a merchant tailor. The attempt at the trial was to show the difference between the value of his goods in the store to be sold to his customers and their value if removed and sold elsewhere. This difference was the profit of his business and it had no bearing on the question at issue, the value of the real estate.

The judgment is affirmed.


text:
    Shipley v. Pittsburg, Carnegie & Western Railroad Company, Appellant.

      Railroads — Eminent domain — Leasehold estate — Extension of lease— Damages — Measure of damages — Evidence—Notice to quit.

    In an action by a tenant against a railroad company to recover damages for the loss of a leasehold, it is error to submit to the jury the depreciation in value of fixtures in place, and the reasonable cost of removal, as separate and independent items for which a recovery may be had; but if it appears that no objection to such submission was made and that no specific instructions on the subject were asked for at the trial, the judgment will not be reversed.
    A railroad company which condemns a building in the possession of a tenant under a lease, and at the same time the leasehold interest, cannot exercise the right reserved by the landlord in the lease to require the tenant to vacate the building on ten days’ notice. If such a notice was served before the bond to secure the owner was filed and approved, it was given at a time when the company had no right in the property; if given after the bond to secure the tenant was filed, the status of the parties had become fixed, and the defendant could not, in relief of its obligation, destroy the value of the thing taken.
    Argued Oct 25, 1906.
    Appeal, No. 106, Oct. T., 1906, by defendant, from judgment of O. P. No. 1, Allegheny Co., Dee. Term, 1902, No, 599, on verdict for plaintiff in case' of Ewing H. Shipley and Sherman Massingham, trading as Shipley-Massingham Company, v. The Pittsburg, Carnegie & Western Railroad Company.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.
    Appeal from report of jury of view. Before Brown, J.
    Defendant presented, inter alia, the following points :
    1. It appearing from the evidence that the lease for the appropriation of which the plaintiffs seek to recover in this case contained a clause authorizing the landlord at his option to terminate the term of said lease on ten days’ notice, and that the plaintiffs had more than ten days’ notice before the railroad company entered upon the premises of its intention to so enter, the term of the lease was then and there terminated and the plaintiffs are entitled to no damages on account of any claim founded upon said lease or the unexpired term thereof. Answer: As a whole (under the evidence) this point is refused. [16]
    2. The evidence showing certain amounts expended partly for services in connection with the business of the plaintiffs and partly in connection with the moving of the plaintiffs from the premises, there being no distribution or separation of the said items so as to indicate substantially what was expended by the plaintiffs in moving from their location at No. 418 Liberty street to the new location at Seventh street and Liberty avenue, the jury cannot find for any sum on account of the plaintiffs on account of expense of moving. Answer : This point as a whole is refused, because there is some evidence (if believed by the jury) that of the wages earned and charged (during the removal period of three weeks) at least ninety per cent thereof represented the actual necessary time and wages employed and earned in such removal of plaintiffs’ stock from the old location to the new. [II]
    3. The term of the plaintiffs under the lease having expired by notice from the railroad company at least ten days before they entered upon the premises, the plaintiffs are not entitled to recover the expenses of moving. Answer: Refused. [18]
    5. It appearing from the testimony that the fixtures at No. 418 Liberty avenue were not removed from those premises and set up in the same way at the new premises, there is no evidence upon which to found a verdict for the plaintiffs on account of depreciation of fixtures. Answer : Refused. [19]
    January 7, 1907:
    Yerdict and judgment for plaintiff for $2,942.58. Defendant appealed.

      Errors assigned among others were (16-19) above instructions, quoting them.

      Willis F. McCook, for appellant.
    Clearly when defendant appropriated Laird’s reversion and gave approved security for the damages, the title to the reversion fully vested in defendant. It then possessed all of Laird’s rights under the lease, including the right to terminate the lease and have the reversion on ten days’ notice: Dyer v. Wightman, 66 Pa. 425; Lyons v. Ry. Co., 209 Pa. 550; Emery v. Boston Terminal Co., 178 Mass. 172 (59 N. E. Repr. 763); Corrigan v. City of Chicago 144 Ill. 537 (33 N. E. Repr. 746); Chicago, etc., R. R. Co. v. Catholic Bishop of Chicago, 119 Ill. 525 (10 N. E. Repr. 372).

      J. P. Patterson, with him Boyd Crumrine, for appellees.
   Opinion by

Mr. Justice Fell,

The plaintiffs were engaged in the wholesale drug business and were the lessees of a building which was taken by the defendant in the construction of its road. The lease was for one year from April 1, 1901, with the right in the lessees to extend it for two years from April 1, 1902. They had exercised this right by giving the notice provided for by the lease, and sixteen months of their term was unexpired at the date of the approval of the bonds given to secure them and the owner. The questions raised as to the measure of damages are practically the same as those considered in the preceding case: The James McMillen Printing Company v. The Pittsburg, Carnegie & Western Railroad Company, ante, p. 504. The testimony as to the expense of taking down and replacing of fixtures in the new location, to which some of the assignments of error relate, was eliminated by the charge, and the elements of damage submitted to the jury were the value of the unexpired term, the depreciation in value of the fixtures in place, and the reasonable cost of removal. The last two should not have been submitted as separate items, for which a recovery could be had, but as evidence of the value of the right of undisturbed possession to the end of the term which had been taken from the plaintiffs. No objection, however, was made on this ground and no specific instructions on the subject were asked for at the trial.

The main question in the case was whether the appellant could exercise the right reserved by the landlord to require the tenant to vacate the building on ten days’ notice. The lease contained the following clause: “ And the said parties of the second part covenant and agree that they will remove from and give peaceable possession of the premises hereby leased within ten days after he shall have received from the lessor notice to vacate the premises.” Under the facts of this case, the defendant acquired no right under this clause. The bond to secure the owner and the bond to secure the tenants were approved the same day. The only notice proved was a written notice of the time when a bond to secure the tenants would be presented to the court for approval, and an oral statement made by the agent who served it that the plaintiffs would have to look out for a new place. There was an attempt to give to this notice the effect of a notice given under the lease, but there was neither proof nor offer of proof of a notice given under the lease. If such a notice had been given, it would not have reduced the term from sixteen months to ten days. If given before the approval of the owner’s bond, it was given at a time when the defendant had no right in the property; if given after the owner had been secured, since both bonds were approved at the same time, it was given after the appropriation of the tenant’s interest had been completed and the status of the parties fixed. The tenant’s term of sixteen months had been taken, and the obligation to pay for it had been incurred. In relief of its obligation the defendant could not destroy the value of the thing taken.

The judgment is affirmed.


author: Mr. Justice Mestrezat,

text:
    Klein v. Pennsylvania Savings Fund & Loan Association, Appellant.

      Building and loan association — Loans—Competitive bidding — Evasion of the law — Usury.
    Where the members of a building and loan association are informed by the officers of the association that they will be required to pay on all loans six per cent premium per annum in addition to legal interest, and, in accordance with instructions, members make written application for .loans on such terms, giving a power of attorney to an officer or employee of the association to submit the bid, and the board of directors pass upon the applications according to their priority without any bidding or competition, the association acts clearly in violation of the law, and a member may set ofí against the principal of his loan all premiums paid in excess of the legal rate of interest.
    Me. Chief Justice Mitchell dissents.
    Argued Oct. 26, 1906.
    Appeal, No. 12, Oct. T., 1906, by defendant, from decree of C. P. No. 2, Allegheny Co., July Term, 1903, No. 815, on bill in equity in case of Eobert Klein v. The Pennsylvania Savings Fund & Loan Association.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.
    Bill in equity for an account.
    Frazer, P. J., filed an opinion which was in part as follows:
    The purpose of the bill in this case was to secure permission for plaintiff to pay into court a balance claimed to be due by defendant from plaintiff on a mortgage against certain property owned by plaintiff, also, to have the mortgage satisfied and allow plaintiff to contest defendant’s right to the balance claimed by it. From the bill, answer and proofs we find the following facts:
    FINDINGS OF FACT.
    1. Defendant is a corporation of the state of Pennsylvania, organized in the year 1891, under the building and loan association act, approved April 29, 1874, P. L. 73, its principal office being located in the city of Pittsburg.
    2. Plaintiff, as a member of defendant corporation, subscribed for forty shares of its capital stock and borrowed thereon the sum of $4,000. • [At the time of making his application for the loan he was informed at the office of defendant by a person in the office at the time that a premium of six per cent on his loan would be necessary, and that thereupon he signed a written application for the loan], [1] together with a power of attorney authorizing W. A. Hemphill, an employee of the association, to represent him at a meeting of defendant company to be'held July 12,1894, and bid for him a premium of six per cent per annum for preference or priority of loan. The paper signed by plaintiff is as follows:
    “ I Robt. Klein, of Pittsburgh, County of Allegheny, State of Penna., being a member of the Pennsylvania Savings Fund & Loan Association, and desiring to borrow therefrom the sum of $4,200, do hereby appoint W. A. Hemphill of Pittsburgh, to attend a meeting of the members of said association and there to bid for me and in my name and place a premium of six per cent per annum for preference or priority of loan, to be paid by me in monthly installments in addition to the interest of six per cent on the sum borrowed.
    “Witness, my hand this 10th day of July, A. D. 1894.
    “ (Signed) Robert Klein.”
    “ I, W. A. Hemphill, being personally present at a meeting of the members of the Pennsylvania Savings Fund & Loan Association held this 12th day of July, 1894, at the principal office of said association, Pittsburgh, Pa., by virtue of the foregoing appointment, have at the said meeting, for and in the name of the said Robert Klein, bid six per. cent, premium for priority of loan.
    “ (Signed) W. A. Hemphill.
    “ Attest:
    “Harvev Henderson.”
    8. At the meeting at which plaintiff’s loan was granted there were altogether fifteen applications for loans, each applicant being represented either by Mr. Hemphill, who represented Klein, or by Mr. Black, the general manager of the defendant association, under powers of attorney similar to that signed by plaintiff. [The applications and bids were handed in one at a time by the person representing the applicant, and thereafter were taken up by the board and passed upon in the order of priority of date. There was no bidding or competition whatever between the persons representing those members desiring to become borrowers.] [2]

      4. [Previous to the month of February, 1894, under the bylaws of defendant association, then in force, borrowers were required to pay a fixed premium of fifty cents per share, which amounted to six per cent per annum.] [3] In February, 1894, however, the by-laws were amended by striking therefrom the
    ' requirement for a fixed premium. At the time plaintiff procured his loan each applicant bid a premium of six per cent per annum, there being no bids for either a greater or less amount. Subsequently loans were made for a time at a premium of
    4.8 per cent per annum, and afterwards at three per cent per annum. "While no action by the board of directors, or the stockholders of the association,'was taken requiring borrowers to pay a fixed premium, it, however, appears from the testimony to be a fact that no loans were made without the payment of a six per cent premium during a certain period, and
    4.8 per cent premium during a subsequent period, and a three per cent premium during a still later period.
    5. Borrowers were seldom present at meetings at which their applications for loans were passed upon, it being [the universal custom to have the application presented by a representative of the borrower, who usually was either an officer or employee of the association, the application and authority to the representative to bid in all cases being similar to that signed by plaintiff.] [4]
    6. On July 21, 1902, plaintiff made application in writing to defendant association requesting that the premium of six per cent per annum for priority of loan be reduced to one per cent per annum, and interest to five per cent per annum, which request was granted by the board of directors on that day, and that thereafter plaintiff was charged with interest and premium at this reduced rate.
    7. Upon his loan plaintiff has made the following payments to defendant association, viz.:
    96 monthly installments of premium at $20 . $1,920
    103 monthly installments of interest at $20 . 2,060
    105 monthly installments of dues at $20 . . 2,100
    Total.......$6,080 Plaintiff’s claim is that the above payments are ample to fully discharge his indebtedness to defendant on account of his loan.
    8. Defendant claims the sum of $1,601.78 to be still due it on account of plaintiff’s indebtedness.
    * *• * * * * *• *
    CONCLUSIONS OF LAW.
    2. [In this case defendant is a building and loan association and plaintiff a stockholder thereof. Was the law complied with in bidding for preference. At the time plaintiff received his loan there were fifteen applications for loans. It does not appear that a single applicant was present in person at the meeting. Each had signed an application prepared by the association and had appointed an officer of the association his representative to bid for him a definitely fixed premium of six per cent per annum. These applications were virtually an agreement upon the part of the borrower to pay a premium of six per cent in addition to legal interest, and the power of attorney attached merely authorized the applicant’s representative to convey that offer to the association. It does not appear to have been the intention of the parties that there should be competition between the borrowers. On the contrary, the conclusion is irresistible that just the opposite was intended. Instead of bidding, i. e., competing at auction for priority, these offers were handed to the directors of the association by the representative of the applicant, and were thereafter acted upon according to priority of date. In construing the statute permitting premiums on loans our appellate courts have in no uncertain language laid down the course to be pursued to make such charges valid.] [5]
    * * * * * * * -x-
    3. [In this case we have found as a fact that at the time plaintiff received his loan there was no competitive bidding. That finding, it seems to us, is clearly warranted by the evidence and the surrounding circumstances. ' Plaintiff testifies, and the testimony of at least one other witness tends to support him, that he was informed by an employee of the association that a six per cent premium would be necessary to secure a loan, and it also appears that at the time plaintiff received his loan, and for some time both before and after, no loans were made by defendant association to borrowers for either a greater or less premium than six per cent. These circumstances, together with the fact that every applicant for a loan at the meeting of July 12, 1894, received a loan at the uniform premium of six per cent and also that the applications were acted upon by the directors in the order of their date, show conclusively that.the money for loan was not offered in open meeting and awarded to the highest bidder for priority, as the law directs. It, therefore, follows that the premium charged plaintiff previous to July 21, 1902, the time at which the premium and interest were reduced, is usurious and illegal.] [6]
    January 7, 1907:
    [4. Plaintiff having paid defendant association as dues, interest and premiums the sum of $6,080, which amount is more than sufficient to fully pay and cancel his loan of $4,000, together with legal interest thereon, it follows that he is not indebted to defendant in the sum of $1,601.78, or any other amount, and that the money in court, less prothonotary’s commissions, should be paid to him.] [7]
    A decree was entered in accordance with the opinion.

      Error assigned was the decree of the court and findings of fact and conclusions of law as above.

      W. B. Rodgers, for appellant.

      W. H. Lemon, for appellee.
    The premium to be lawful must be one bid for right of precedence at a competitive sale, and where there was no such sale or bid there can be no lawful premium. It is so held in the following cases: Stiles’s Appeal, 95 Pa. 122; Land Title & Trust Co. v. Fulmer, 24 Pa. Superior Ct. 256; Bates v. People’s Savings & Loan Assn., 42 Ohio, 655 ; State v. Greenville Bldg. & Saving Assn., 29 Ohio, 92; State v. Oberlin Bldg. & Loan Assn., 35 Ohio, 258.
   Opinion by

Mr. Justice Mestrezat,

The single question raised by this appeal is whether Klein obtained his loan from the defendant association, by competitive bidding. The learned trial judge has found that at the time Klein’s loan was granted there were fifteen applications for loans, that the application and bids were'handed in one at a time by the person representing the applicant and thereafter were taken up by the board and were passed upon, in order of priority of date, that there was no bidding or competition whatever between the persons representing those members desiring to become borrowers.

On these findings of fact, the court’s conclusion of law is as follows: “Was the law complied with in bidding for preference? At the time plaintiff received his loan there were fifteen applications for loans. It does not appear that a single applicant was present in person at the meeting. Each had signed an application prepared by the association and had appointed an officer of the association his representative to bid for him a definitely fixed premium of six per cent per annum. These applications were virtually an agreement upon the part of the borrower to pay a premium of six per cent in addition to legal interest, and the power of attorney attached merely authorized the applicant’s representative to convey that offer to the association. It does not appear to have been the intention of the parties that there should be competition between the borrowers. On the contrary, the conclusion is irresistible that just the opposite was intended. Instead of bidding, i. e., competing at auction for priority, these offers were handed to the directors of the association by the representative of the applicant, and were thereafter acted upon according to priority of date.”

These conclusions of fact and law are amply justified by the testimony and the authorities cited in the opinion of the court. The finding that plaintiff was told that he must bid six per cent premium is sustained by the testimony, and we think the testimony also shows that his information came from some person authorized to speak for the company. Kleeb, a bookkeeper of the association during part of the time the plaintiff was a stockholder, testified that during the four years he was in the service of the association — up to 1903 — the borrower was told the amount of premium he had to pay. This is supplemented by the testimony of' the plaintiff that he was told in the office of the association that his loan would cost him six per cent interest and six per cent premium, and by the further fact that the fifteen applicants for loans all bid the same amount of premium, six per cent, at the meeting-at which the loans were granted.

As tending to show that, at the time the plaintiff secured his loan, the association had adopted a fixed premium and disregarded the statutory requirement that money should be loaned to the highest competitive bidder, it was competent for him to introduce evidence to show that immediately prior to granting his loan the association had a fixed premium, that it was in effect at the time his loan was granted and was continued thereafter, and that it was the universal custom of the association to have the application for a loan presented by a representative of the borrower who usually was either an officer or employee of the association. Such testimony tended to establish not only the fact that the association had a fixed, definite premium for all loans, but that, as the plaintiff alleges, his loan and the loans of the other stockholders whose applications were considered at the same time were granted for a premium previously fixed by the association.

At the meeting at which the plaintiff was granted his loan, there was no bidding at auction, nor crying bids, nor but a single bid for any loan secured. Each applicant for a loan offered a certain premium which he had been informed was necessary to obtain a loan, and without any other bid, greater or lesser, he obtained the loan. Such action on the part of the defendant association clearly shows that it was not conducting a legitimate building and loan association business, but was using its charter as a device or cover for the purpose of evading the usury laws. As said by Burgess, J., in Meroney v. Atlanta B. & L. Assn. (N. C.), 47 Am. St. Rep. 841, in construing a similar statute where a like attempt was made to evade the usury laws, such an association “is merely a money lending, dividend paying corporation to which, for some purpose, some features of a building and loan association’ have been attached.” Our act of 1874 under which the defendant was incorporated points out explicitly the manner in which the business of such associations shall be conducted, and protection of needy borrowers requires the courts to compel a strict compliance with its, provisions. The language of the act is mandatory as to the manner in which loans shall be made, and provides that the money of the association “ shall be offered for loan in open meeting, and the stockholder who shall bid the highest premium for the preference of priority of loan shall be entitled, to receive a loan.” Failing to observe this positive command of the statute the defendant association cannot invoke the aid of its charter to protect it from the penalty of usury. The privileges and immunities of such corporations are secured by adhering strictly to the law of their creation, and when, as here, they violate that law, they cannot shield themselves from the consequences which the laws of the commonwealth justly inflict upon the usurer.

The decree is affirmed.

Mitchell, O. J., dissents.


author: Mr. Justice Stewart,

text:
    Neeld, Appellant, v. Cunningham.

      Ejectment — Second ejectment — Statutes—Retrospective laws — Act of May 8, 1901, P. L. 142.
    The Act of May 8, 1901, P. L. 142, which provides “that where one verdict shall, in any writ of ejectment between the same parties, be given for the plaintiff or defendant, and judgment be entered thereon, no new ejectment shall be brought, but such verdict and judgment shall be final and conclusive and bar the right,” is not retrospective in character, and does not apply to verdicts and judgments recovered before the date of the act.
    Statutes are prima facie prospective in their operation; and retrospective laws being in their nature odious, it ought never to be presumed the legislature intended to pass them, where the words will admit of any other meaning.

      Ejectment — Right to recover for improvements — Act of April 12, 1842, P. L. 262.
    Where a judgment has been entered against a defendant in an ejectment, and no question has been raised as to improvements, the defendant may thereafter, in a second ejectment brought by himself as plaintiff, recover the value of the improvements made on the land, as provided by the Act of April 12, 1842, P. L. 262.
    Argued Oct. 26, 1906.
    Appeal, No. 115, Oct. T., 1906, by plaintiff, from judgment of O. P. No. 1, Allegheny Co., Sept. T., 1903, No. 937, on verdict for defendants in case of Hettie EL Neeld et al. v. John T. Cunningham et al.
    Before Mitchell, O. J., Pell, Brown, Mestrezat, Elkin and Stewart, JJ.
    Reversed.

      Ejectment for land in the nineteenth,ward of the city of Pittsburg. Before Macfarlane, J.
    The opinion of the Supreme Court states the case.
    Verdict and judgment for defendants. Plaintiffs appealed.

      Error assigned was in giving binding instructions for defendant.

      Charles K. Robinson, with him William B. Rodgers for appellants.
    The act of April 12, 1842, is not limited in its application to any class of land or to any particular defect in title. The language of the act is “ in all cases whatever.”
    The act applies to seated as well as unseated lands: Lynch v. Brudie, 63 Pa. 206.
    The history of the law shows that the act was passed to counteract the effect of the decisions of the court in McCall v. Larimer, 2 W. & S. 107; s. o., 4 W. & S. 133 ; which case denied the right to recover the value of improvements on seated lands under the act of March 13, 1815, 6 Sm. L. 299. An act will if possible, be so construed as not to give it a retroactive operation: Ogle v. Turnpike Road .Co., 13 S. & R. 256.
    Legislation which effects rights will not be construed to be retroactive until it is so declared in the act: Kille v. Iron Works, 134 Pa. 225; Lane v. White, 140 Pa. 99; Byers v. Penna. R. R. Co., 18 Pa. C. C. Rep. 187.
    A second tidal in ejectment is a matter of right and therefore one verdict and judgment is not conclusive on the parties : Gehr v. Miller, 8 Atl. Repr. 926.
    The four following cases have, under the provisions of the act of 1842, held the tax purchaser entitled to the value of his improvements : Liggett v. Long, 19 Pa. 499; Steele v. Spruance, 22 Pa. 256; Pendleton v. Richey, 32 Pa. 58; Lynch v. Brudie, 63 Pa. 206.
    And the right was recognized in the case of Fricke v. Safe Deposit & Trust Company, 183 Pa. 271.

      Jesse T. Lazear, with him Thomas C. Lazear, and Charles P. Orr, for appellees.
    There is no vested right in a remedy; the legislature may enact laws altering, modifying or taking away remedies: Grim v. Weissenberg School Dist., 57 Pa. 433.

      January 7, 1907 :
    The act of 1901 and its amendment excludes all exceptions not mentioned therein, and refers to writs pending, not controversies or future actions: Warfield v. Fox, 53 Pa. 382; Land Co. v. Weidner, 169 Pa. 359.
    The legislature has the power to pass retroactive laws: Kiskaddon v. Dodds, 21 Pa. Superior Ct. 351; Hepburn v. Curts, 7 Watts, 300 ; Grim v. Weissenberg School Dist., 57 Pa. 433; Satterlee v. Matthewson, 16 S. & R. 169; O’Conner v. Warner, 4 W. & S. 223.
    Where one recovers by judgment in ejectment and is put in possession, the defendant cannot afterwards maintain an ejectment to recover compensation for improvements made while in possession of the condemned title: Paull v. Eldred, 29 Pa. 415 ; Fricke v. Safe Deposit & Trust Co., 183 Pa. 271 ; Doak v. Wiswell, 33 Maine, 355 ; Jenkins v. Scranton, 205 Pa. 598.
    The Act of April 12, 1842, sec. 20, P. L. 262, is not applicable to this case: Fricke v. Safe Deposit & Trust Co., 183 Pa. 271.
   Opinion by

Mr. Justice Stewart,

This was the second ejectment suit between the same parties, for the same premises. The first, finally concluded January 9,1901, was brought by the appellees here against appellants who were in possession under a tax title, and resulted in a verdict for the plaintiffs, who thereupon acquired possession. The present action was begun by appellants August 29, 1903. On the trial of the case the Act of May 8, 1901, P. L. 142, which directs that one verdict and judgment thereon in actions of ejectment shall be final and conclusive, was pleaded in bar. The learned trial judge was of opinion that the act operated retroactively, and accordingly directed a verdict for the defendants. Was this a true interpretation of the act? The determining consideration to the mind of the court was the provision in the third section of the act,.as amended, which reads as follows : “ Nothing in this act shall be construed to apply to lands or tenements as to which any writ or writs of ejectment were pending, and final judgment not entered, at the time of the approval of the act hereby amended.” Apart from this provision, there is nothing in the act that affords the slightest warrant for supposing that the act was intended to apply to verdicts and judgments previously rendered. The language used in the first section — that part of the act which bars the right of a second action — imports prospective operation solely. The words are: “ Where one verdict shall be given.” With nothing else in the act but this to indicate the extent of its application a retroactive construction would be impossible. To overcome this necessary meaning, so plainly indicated by the language used, nothing short of an equally plain, positive and unambiguous expression to the contrary will suffice. This would be true though no questions of policy were involved ; by so much the greater reason should a positive, unambiguous expression of purpose contrary to that clearly derivable from the enacting language be required, where the effort is to' accomplish by construction a result which the law for equitable reasons desires to avoid whenever it can. “ Statutes are prima facie prospective in their operation, and retrospective laws being in their nature odious, it ought never to be presumed the legislature intended to pass them, where the words will admit of any other meaning: ” Underwood v. Lilly, 10 S. & R. 97. “ Retrospective laws generally if not universally work injustice, and ought to be so construed only when the mandate of the legislature is imperative : ” Taylor v. Mitchell, 57 Pa. 209. The absence of any express direction in the act under consideration, that it should apply as well to cases in which verdict and judgment had been rendered, ought to be sufficient in itself to save such cases from its operation. In order to derive from the third section a purpose to make it relate back, resort is had to artificial construction. Because exemption from the provisions of the act is allowed in cases of writs pending at the time of the enactment, it is argued that no other exemptions were intended, under the rule expressum facit cessare taciturn. But the rule is without application here. The act by its express terms looks to the future and not to the past. The first section has regard to verdicts and judgments that shall be rendered, and none other, and out of these, not out of all verdicts and judgments whensoever rendered, but out of those to be rendered, it excepts cases then pending, and as to these future verdicts and judgments it says they shall be exempt. The exception is in favor of a class of cases which, but for the third section, would clearly fall within the terms of the act. Prior judgments and verdicts were in no such danger. Por anything contained in the act the appellants were entitled to maintain their action, and the assignment of error that relates to the court’s action in this regard is sustained.

Since the case must go back for another trial, the remaining question raised by the assignments requires an expression of view. On the trial of the case plaintiffs sought to recover as well for the value of the improvements made by those under whom they claimed title. The court held that this right attached only in connection with the first ejectment, and refused to submit the claim. The Act of April 12, 1812, P. L. 262, provides that a recovery for improvements shall be an incident in all cases whatsoever where a recovery is had against a purchaser at a sale for taxes, or other person claiming under him. In the former suit between these parties it was averred in defendants’ abstract of title, that the person under whom defendants claimed had not only paid all the taxes assessed during his occupancy, but had erected ten dwelling houses on the land during this period, at a cost of from $25,000 to $30,000, and that these expenditures had been made with both constructive and actual notice to the plaintiffs. The evident purpose in setting this out in the abstract, however inefficacious, was to estop the plaintiffs in their action. Certainly there was nothing in the record of the case, so far as we are permitted to see it, that shows that any claim for compensation was made, or that any claim of this character was considered in the adjudication. It was not in the case. Are the defendants, in that action, now that they are the plaintiffs in this second ejectment, precluded from asserting such claim here ? Ve think not. The act is too explicit in its terms to admit of any other conclusion than that a party claiming under a tax title has a right to one adjudication of his claim for improvements, and that this right may be exercised, once for all, in any action brought by his adversary or himself where the legal title to the land in question is the subject of the dispute. It expressly provides that he may assert this right whether he be in or out of possession, whether he be plaintiff or. defendant in the action. The full significance of this provision seems to have been overlooked. The party claiming could have made no improvements except he had been at one time in possession under his tax title. If out of possession, the presumption must be that he was dispossessed in consequence of an adverse verdict. Yet, being out of possession, his statutory right to assert his claim remains, and this could only be in a second or third ejectment, as the case might be.

The act gives one process for the enforcement of the claim when recovered by a defendant in possession, and quite another when recovered by a plaintiff out of possession. The clear implication is that the claim may be asserted upon either ejectment as the claimant may elect. This right of election gives the claimant no undue advantage; on the other hand, restricting his right to the first action, would obviously result in some cases at least in prejudicing, and perhaps defeating, his statutory right to a second impartial trial on the question of a legal title. In holding to the view here expressed we are not running counter to anything said in Pauli’s Executors v. Eldred & Hill, 29 Pa. 415, or in Ericke v. Safe Deposit and Trust Company, 183 Pa. 211. In the former, the act of April 12, 1842 was not under consideration. True, it was a second ejectment, and the right of' the holder of the tax title to recover for the improvements made thereunder was denied; but the circumstances were so unlike what we have here, that the case furnishes no present authority. The second ejectment there was not brought to try the legal title, but was avowedly and exclusively for the recovery of compensation for improvements made during possession under the condemned title. The right to recover for a claim of this character was more than doubted by the court; but the right being conceded, for the purposes of the argument, it was held that since no claim of title was asserted, the action was to be regarded as in the .nature of a bill in equity for the enforcement of the equitable lien incident to, and depending upon, the possession of the premises, inasmuch as it could only be enforced, if at all, by permitting the defendant to retain the possession until it was paid, and such remedy could not avail a plaintiff out of possession. The present case proceeds on a very different basis ; it is a second ejectment brought by the holders of the tax title, in the exercise of a statutory right, to recover possession. The right to the action cannot be denied; nor can the right to recover in an ejectment suit for the value of the improvements be questioned : both rest alike upon statutory authority. With respect to the latter, it is not a question of equitable interference to avoid inequitable results, but a statutory proceeding for the enforcement of statutory rights. All that was said in Ericke v. Safe Deposit and Trust Company, 183 Pa. 271, was that the plaintiff who had recovered on his legal title could not afterwards be brought into equity, and made to account for the value of improvements; that the statute which created the right provided the remedy as well. We are of opinion that in the pending action plaintiffs had a right to have their claim for improvements adj udicated.

The assignments of error are sustained. The judgment is reversed and a venire facias de novo awarded.