text:
    Clyde Coal Company, Appellant, v. Pittsburg & Lake Erie Railroad Company.

      Contract — Breach of contract — Damages—Profits.
    1. Profits arising from a subsequent contract though made on the faith of the original contract and capable of definite ascertainment, are not recoverable in an action for the breach of the original contract.
    2. For the breach of a contract damages may be recovered for loss of profits, the direct and immediate fruits of the contract itself and ascertainable with'reasonable certainty, when they are the natural result of such breach, or which, under the circumstances, the parties may have contemplated at the execution of the contract as the probable result of its breach; but damages for the loss of profits for the violation of a contract may not be recovered where they are uncertain, remote or speculative, or when they grow out of a subsequent collateral or subordinate undertaking which was entered into upon the faith of the principal contract.
    3. Where a railroad company contracts with a coal mining company to furnish cars at a particular point and fails to do so, the coal company in an action for the breach of the contract, is not entitled to recover profits that would have accrued on a contract subsequently made, to deliver a definite number of tons per day to a purchaser, if it appears that the railroad company had no knowledge, at the time it made its agreement to deliver cars, that the coal company contemplated the making of such a contract.
    Argued Oct. 22, 1909.
    Appeal, No. 111, Oct. T., 1909, by plaintiff, from judgment of C. P. No. 1, Allegheny Co., June T., 1904, No. 882, on verdict for «plaintiff in case of Clyde Coal Company v. Pittsburg & Lake Erie Railroad Company.
    Before Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Assumpsit for breach of contract to deliver cars. Before Brown, P. J
    At the trial the following offer was made:
    Counsel for plaintiff now offer to prove by the witness on the stand and other witnesses, that early in January, 1903, the plaintiff company entered into a contract with the defendant company, through its vice president, Col. J. M. Schoonmaker, under and by. virtue of which contract the Pittsburg & Lake Erie Railroad Company agreed to supply cars to a hoist or coal elevator, which the plaintiff company proposed to erect on a siding which they had leased at Bunola station, a station upon the line of a branch road controlled by the defendant company. That the contract or arrangement bound the Pittsburg & Lake Erie Railroad to supply at said siding the share or proportion of the cars for distribution which would be supplied to such sidings were they connected with a coal mine upon said railroad, having the rating or capacity of the plaintiff company’s mine. That upon the faith of this contract, and with the knowledge of the defendant company, the plaintiff proceeded to erect their hoist at the siding at Bunola station, in the manner provided in the contract. That upon completion of the same, to wit, on May 2,1903, they called upon the defendant company for a supply of cars, and six cars were in fact placed upon said siding loaded with coal by the plaintiff company and shipped away, in the manner provided by the contract. That prior to 'this date, the plaintiff company had entered into a contract with the Pittsburg Coal Company for the delivery of coal to that company in the manner set forth in exhibit No. 2,.and at a price of $1.47 per ton, being a price which showed a profit over the cost of supplying coal at Bunola station. That this contract was exhibited to the vice president and general manager of the defendant company in the conversations early in May, during which the plaintiff company was endeavoring to get cars for the completion of its deliveries under its contract with the Pittsburg Coal Company. That with the knowledge of this contract, the defendant company broke its agreement with the plaintiff company, and refused to deliver any further cars beyond the first six cars, as mentioned heretofore in the offer.
    The plaintiff further offers to show accurately the cost of supplying coal to cars'at Bunola siding, the cost of transportation, and the price which would be received for such deliveries in accordance with the contract, and to show the number of cars which they should have received, in accordance with the schedule of distribution of cars by the Pittsburg & Lake Erie Railroad Company had they been registered as provided in the contract they had with that company, and by these means to show the actual loss sustained by the plaintiff company in not receiving the cars for shipment in accordance with the terms of the contract. This for the purpose of showing with reasonable certainty the profits which have been lost to the plaintiff by reason of the breach of contract sued on in this case. The objection and ruling of the court thereon are as follows:
    Objected to as incompetent, irrelevant and immaterial, and identical with the offer heretofore made, upon which the court has already ruled.
    Objection sustained and bill sealed for plaintiff. [3]
    Counsel for plaintiff further offer to show by this witness, and other witnesses, that at the time the contract made in this case, and sued upon, was entered into, there was great scarcity of coal, and the same was selling at a high price. That every effort was being made to get coal upon the market, and that it was well known to the officials of the defendant company, as well as to all other persons .engaged in or connected with the transportation and sale of coal, that coal was being sold at a very high profit over the mining rate or cost of production. That outside of the said contract shown in this case, the plaintiff company could have marketed all its coal, had it received the cars promised it by the defendant company at a considerable profit over and above the cost of supply, and that this fact was known at the time -of the entering into of said contract by the officers of the defendant company; and was also well known by them at the time of the breach of said contract. This for the purpose of showing with reasonable certainty the profits which have been lost to the plaintiff company by the breach of the contract, as claimed in this case, and that such profits were within the contemplation of the parties at the time the said contract was made.
    The objection and ruling of the court thereon are as follows: Objected to as incompetent, irrelevant and immaterial. Objection sustained and bill sealed for plaintiff. [4]
    Counsel for. plaintiff now offers to show by the witness on the stand, and other witnesses, the execution of the contract, exhibit No. 2 in this case, with the Pittsburg Coal Company, providing for the delivery to that company of 500 tons of coal per day, at $1.47 per ton, f. o. b. at Bunola station, up to September 30, 1903. That the defendant company had a sufficient supply of cars to give to the plaintiff company forty per cent of the capacity of its hoist, which would have enabled the plaintiff to deliver about 240 tons- per day, which would have earned a profit of sixty-two cents per ton over the cost of producing and loading the coal at Bunola station. That the defendant company, after delivering six cars on the siding, without legal reason or excuse, and after full knowledge on its part of the making and of the terms of the contract of plaintiff ■ company with the Pittsburg Coal Company, above referred to, refused to make further deliveries and broke its contract with the plaintiff to supply them with cars on the same basis as other mines situate upon its railroad, being the contract sued on in this case. That as a result of said breach the plaintiff company was unable to make the deliveries provided for in the contract with the Pittsburg Coal Company, and lost the profits which would certainly have been made thereon by such deliveries. That the mine of the plaintiff company being a river mine, and having no other means of transporting coal than the Monongahela river and its water connections, could make no shipment during the months covered by. the Pittsburg Coal Company contract, to wit, from May 2,1903, to September 30,1903, the said river and its connections being unnavigable for coal deliveries during the said season or period.
    That the coal mined or taken out during said period was stacked or piled on the plaintiff company's property, and, as well as the unmined coal, which would have been required to fill the Pittsburg Coal Company contract, remained unsold and undelivered until the ensuing winter, when the stage of water in the river enabled the plaintiff company to resume regular deliveries from its mine by water. That in the meantime the price of coal had fallen from the price fixed by the Pittsburg Coal Company contract, $1.47 per ton, to the price of $1.00 and less per ton, at which price the coal which the plaintiff would otherwise have delivered to the Pittsburg Coal Company was sold to other parties. The plaintiff offers the contract with the Pittsburg Coal Company in connection with the facts offered to be proved in the foregoing offer, to show the difference in price between the sales made under the contract and the sales of the same coal, as subsequently made to other parties, as the measure of damage in this case, being the loss by it of the profits which would certainly have been made had the contract with the defendant company been observed, and had it been permitted to make the deliveries therein provided for.
    January 3, 1910:
    Objected to. Objection sustained. Exception. [5]
    Verdict and judgment for plaintiff for $5,195.42. Plaintiff appealed.

      Errors assigned were (3-5) rulings on evidence, quoting the bill of exceptions.

      Thomas Patterson of Patterson, Stérrett & Acheson, with him Geo. M. & M. J. Hosack, for appellant.
    The plaintiff was entitled to recover for the loss of profits: Wilson v. Wernwag, 217 Pa. 82; Imperial Coal Co. v. Port Royal Coal Co., 138 Pa. 45.

      George E. Shaw, of Reed, Smith, Shaw & Beal, for appellee.—
    Profits were properly disallowed: Wilson v. Wernwag, 217 Pa. 82; Wolf v. Studebaker, 65 Pa. 459; Harvey v. R. R. Co., 124 Mass. 421; O’Connor & Co. v. Smith, 84 Tex. 232 (19 S. W. Repr. 168); Kelley v. Miles, 12 N. Y. Supp. 915; Devlin v. New York City, 63 N. Y. 8; Lowenstein v. Chappell, 30 Barb. 241; Bridge v. Stickney, 38 Me. 361; Chicago, etc., Ry. Co. v. Dane, 4 Hand (N. Y.), 240.
   Opinion by

Mr. Justice Mestrezat,

In 1903 and prior thereto the plaintiff company was the owner of about 1,000 acres of coal situate on the Monongahela river, in the Fifth Pool, near Fredericktown, Washington county. The plaintiff was operating the coal with a fully equipped mine in 1903 and had a capacity for mining and shipping 1,200 tons per day. The mine was not located upon the line of any railroad and the plaintiff had to rely entirely upon water transportation for shipping its coal. During a period of about six months in each year the plaintiff was unable, by reason of the low stage of water, to ship coal from Pittsburg to points south along the Ohio river, but could ship its coal in barges and flats on the Monongahela river from the mine to Bunola, a village situate in the Third Pool of the Monongahela river on the Pittsburg, McKeesport & Youghiogheny railroad, which is operated by the defendant company. Desiring to ship coal to various places in Pennsylvania, Ohio and other states, which it could not reach by water transportation, and also wishing to have facilities for shipping its coal by railroad, the plaintiff company in January, 1903, entered into a verbal contract with the defendant railroad company by which it was agreed that if the plaintiff erected a hoist at Bunola, by means of which, after having transported its coal in barges and flats on the Monongahela river from Fredericktown to Bunola, it would transfer the same to the defendant’s cars, the plaintiff should receive cars for the shipment of its coal, and in the matter of car service it should be treated the same as a coal mine located directly upon the line of the defendant’s railroad.

Relying upon the performance of the contract by the defendant, the plaintiff, in February 1903, leased a strip of land at Bunola for a period of three years, together with the use of a railroad siding for cars in which its coal was to be loaded for shipment. The plaintiff company also erected a hoist at Bunola for the purpose of lifting its coal out of the boats and placing it on board the cars to be furnished by the defendant company. The construction of the hoist was finished about May 2, 1903, and the defendant company furnished six cars on the Bunola siding to the plaintiff for transporting its coal, but thereafter declined and refused to furnish any more cars. The plaintiff then brought this action to recover damages for the breach of the contract.

The defendant company denies that it entered into any contract or agreement to furnish cars to the plaintiff company at Bunola. On the trial of the cause this was the only question submitted to the jury, which found in favor of the plaintiff. This finding established the existence of the contract as alleged by the plaintiff. The trial judge instructed the jury that if there was a contract the measure of damages would be “the cost of this hoist less its value as dismantled and sold, and the rental loss," which, it was agreed, was $5,067.38. The plaintiff claims that the court erred as to the measure of damages, and that question is raised in the assignments which allege error in sustaining the objection to certain offers of evidence made by the plaintiff on the trial.

In the statement, the plaintiff company avers that relying upon its contract with the defendant, it, on or about April 2, 1903, entered into a written agreement with the Pittsburg Coal Company by which the plaintiff agreed to ship to the coal company all the one and one-fourth inch coal it could load from barges at the hoist at Bunola from the date of the contract to September 30,1903, at the price of $1.47 per ton; and further that should the plaintiff be able to load any lake coal after September 30 and up to the close of the season of lake navigation for the year 1903, all coal that it should be able to so load should be shipped at the above price. The coal company agreed to take 500 tons of coal per day. In view of this contract, it is averred, the plaintiff increased the force of its mine, made changes in the mine equipment and expended considerable money in preparing to mine and handle the coal required by its contract with the Pittsburg company. The statement avers that by reason of defendant's refusal to furnish the cars for transporting the coal to its destination, the plaintiff lost sixty-two cents per ton profit on each ton of coal which it sold to the Pittsburg company and which it was prepared to ship and deliver to that company in its proportion of cars which the defendant had agreed to furnish it. The aggregate amount of the loss is averred in the statement which the plaintiff claims is, in addition to the cost of the hoist and rental, the measure of its damages in this case.

As stated by the learned counsel for the appellant, the sole question to be determined is whether or not the plaintiff was entitled to recover the profits which it would have made from its contract with the Pittsburg Coal Company. This question is raised by the fifth assignment in which it is alleged that the court erred in excluding the plaintiff's offer of evidence. That offer was to show that the plaintiff had entered into the contract with the Pittsburg company as set out in the statement, that the defendant had a sufficient supply of cars to give to the plaintiff company forty per cent of the capacity of its hoist and would have enabled the plaintiff to have delivered about 240 tons per day which would have earned a profit of sixty-two per cent per ton above the cost of producing and loading the coal at Bunola siding; that as a result of the breach of the contract the plaintiff was unable to make the delivery provided for in the contract with the Pittsburg company, and lost the profits which would certainly have been made by such delivery.

The facts of the case at bar bring it within the class of cases in our own and other jurisdictions in which it is held that profits arising from a subsequent contract which though made on the faith of the original contract and capable of definite ascertainment are not recoverable in an action for the breach of the original contract. The general rule is well stated in the leading English case, Hadley v. Baxendale, 9 Exch. 341; s. c., 5 Eng. Rul. Cases, 502, where it is held that “the amount of damages recoverable from a carrier is such as would naturally result from the breach of the contract, whether as the ordinary consequence of such a breach, or as a consequence which may, under the. circumstances, be presumed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach of it.” This case is cited and the rule is approved in our own cases of Fleming v. Beck, 48 Pa. 309, and Wolf v. Studebaker, 65 Pa. 459. The same doctrine is announced by Strong, J., in Adams Express Company v. Egbert, 36 Pa. 360, wherein it is said (p. 364): “It is doubtless true, that in all actions for the breach of a contract, the loss or injury for which damages are sought to be recovered, must be a proximate consequence of the breach. A remote or possible loss is not sufficient ground for compensation. There is no measure for these losses which have no direct and necessary connection with the -stipulations of the contract, or which are dependent upon contingencies, other than the performance of the contract, and which are therefore incapable of being estimated. With no certainty can it be said that such losses are attributable to the wrongful act or omission of him who has violated his engagement. But on the other hand, the loss of profits or advantages, which must have resulted from a fulfillment of the contract, may be compensated in damages, when they are the direct and immediate fruits of the contract, and must therefore have been stipulated for, and have been in the contemplation of the parties when it was made.”

The leading American case on the subject is Masterton v. Mayor of Brooklyn (N. Y.), 42 Am. Dec. 38. It is there held that the measure of damages for a breach of an executory contract includes loss of profits growing immediately out of the contract which would have been realized from its full performance, but not loss of profits or other damages arising out of collateral undertakings entered into on the faith of the contract. Nelson, C. J., delivering the opinion of the court says, inter alia (p. 68): “It has accordingly been held that the loss of any speculation or enterprise in which a party may have embarked, relying on the proceeds to be derived from the fulfillment of an existing contract, constitutes no part of the damages to be recovered in case of breach.” The chief justice shows by a quotation from Pothier that the same rule obtains in the civil law. -The case is cited- and approved in Massachusetts in Fox v. Harding, 61 Mass. 516, where it is held that in an action for the breach of a special contract, the plaintiff may recover as part of his damages such profits as would have accrued to him from the contract itself, if it had been performed; but not those which he would have realized from other contracts entered into for the purpose of fulfilling such special contract. Bigelow, J., delivering the 'opinion of the court, says (p. 523): “ If the plaintiffs had offered to prove, in addition to this, that in consequence of the breach of the contract by the defendants, they had lost other contracts by which they would have realized large profits, and which they had entered into for the purpose of fulfilling their contract with the defendants, the evidence would have been wholly inadmissible; because such collateral undertakings were not necessarily connected with the principal contract, and cannot be reasonably supposed to have been taken into consideration when it was entered into.” The Masterton and Fox cases are cited and followed in Hoy v. Gronoble, 34 Pa. 9. The doctrine announced in Hadley v. Baxendale is recognized and declared well established by Endicott, J., delivering the opinion in Harvey v. Connecticut and Passumpsic Rivers R. R. Co., 124 Mass. 421 (26 Am. Rep. 673).

From these and other adjudicated cases the doctrine may be regarded as settled that for the breach of a contract damages may be recovered for loss of profits, the direct and immediate fruits of the contract itself and ascertainable with reasonable certainty, when they are the natural result of such breach, or which, under the circumstances, the parties may have contemplated at the execution of the contract as the probable result of its breach; but damages for the loss of profits for the violation of a contract may not be recovered where they are uncertain, remote or speculative, or when they grow out of a subsequent collateral or subordinate undertaking which was entered into upon the faith of the principal contract.

The contract in the present case by which the defendant agreed to furnish cars to the plaintiff was made in January, 1903, and its breach occurred in the following May. The contract between the plaintiff and the Pittsburg Coal Company was made in April, 1903, more than two months after the execution of the agreement between the plaintiff and the defendant, but before the defendant company had refused to furnish more cars and had thereby committed a breach of its agreement. Damages arising from profits which the plaintiff might have made on its contract with the Pittsburg Coal Company were manifestly not in contemplation of the parties when the contract between the plaintiff and the defendant was made in January, 1903. The coal company contract was not then in existence and, so far as the defendant company knew, it was not even contemplated. It was a collateral undertaking between the plaintiff and the coal company of which the defendant company had no knowledge at the time it executed the contract with the plaintiff, and therefore the defendant could not have anticipated damages resulting to the plaintiff company by reason of the loss of profits on the. coal company contract.

It is not sufficient to impose liability on the defendant company, that it had knowledge of the contract between the plaintiff and the Pittsburg Coal Company prior to the breach of the contract between the plaintiff and the defendant. This is an action upon the original contract, and the defendant is liable for only such profits as would naturally result from a breach of that contract and were in contemplation of the parties at the time the contract was executed. The action is not brought upon the original contract as subsequently modified after the defendant had notice of the Pittsburg Coal Company contract. At the time the original contract was entered into, it does not appear that the defendant was notified that the plaintiff had any contract with any person or company to furnish coal, or that the contract was executed on the part of the plaintiff with the view of furnishing any certain or definite amount of coal to anyone or had any agreement to do so. The Pittsburg Coal Company contract and any other agreements of a similar kind which the plaintiff may have intended to make, if any, were wholly unknown to the defendant company at the time it entered into the contract with the plaintiff on which this action is brought. It is clear, therefore, we think, that conceding the plaintiff’s ability to show definitely the profits which it would have made on the Pittsburg Coal Company contract, yet it is manifest that the parties did not contemplate their loss as a consequence of a breach of the contract, and under all the authorities they cannot be recovered in this action.

The controlling question in the present case did not arise in Wilson v. Wernwag, 217 Pa. 82. In that case the damages arose out of the contract between the parties, and there was no claim for a loss of profits on a collateral or subordinate contract. The loss there was the direct loss caused by the breach of contract between the parties, and therefore the damages resulting from the breach were in contemplation of the parties at the time they made their agreement. Here, the loss of profits arises out of a collateral undertaking which the defendant company could’not anticipate and of which it had no knowledge at the time it entered into the agreement with the plaintiff.

The assignments of error are overruled and the judgment is affirmed.


source: Caselaw Access Project

author: Per Curiam,

license: Public Domain

text:
    Cambria & Clearfield Railway Company, Appellant, v. Blandburg Water Company.

      Railroads — Eminent domain — Right to condemn water — Acts of February 19, 1849, P. L. 79, and April 9, 1856, P. L. 288.
    1. A bill in equity filed by a railroad company to enjoin a water company from appropriating the waters of a stream is properly dismissed where the trial court finds as a fact that there had been no appropriation of the waters of the stream by the railroad company.
    2. Not decided whether the general railroad Act of February 19, 1849, P. L. 79, the Act of April 9, 1856, P. L. 288, or any other act relating to railroad companies gives authority to such companies to appropriate water and water rights for operating purposes.
    Argued Oct. 25, 1909.
    Appeal, No. 167, Oct. T., 1909, by plaintiffs, from decree of C. P. Cambria Co., June T., 1908, No. 4, dismissing bill in equity in case of Cambria & Clearfield Railway Company and the Pennsylvania Railroad Company v. Blandburg Water Company.
    Before Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Bill in equity for an injunction.
    O’Connor, P. J., filed the following opinion.
    The plaintiff company filed a bill in equity to the above number and term of this court with a view to prevent the defendant water company from appropriating the waters of Sandy Run in Reade township, this county, which the plaintiff railroad company claims to have previously appropriated for its use in the operation of its railroad under what it conceives to be its right of eminent domain, in this behalf.
    Two questions are involved in this controversy — one is a question of law and the other is a question of fact. If the court shall decide the legal question against the contention of the plaintiff, the question of fact becomes immaterial. Upon the other hand, the question of fact will become material, if the court should hold the legal question to be against the contention of the defendant.
    The plaintiff company is operating a steam railroad under the general railroad Act of February 19, 1849, P. L. 79, and its supplements. In the operation of this road it becomes necessary to use a certain amount of water for steam purposes. This water, the plaintiff company claims that it has a right to appropriate under and by virtue of the power of eminent domain, which it contends is given by the Act of February 19, 1849, which said act it is alleged received legislative construction at the hands of the legislature of this state on April 9, 1856.
    The Pennsylvania Railroad Company is incorporated by the act of assembly approved April 13, 1846, P. L. 312. The section of the general railroad act approved February 19, 1849, in which it is alleged the authority to condemn and appropriate the water of streams for general railroad purposes is contained is identical with sec. 11 of the act of 1846 incorporating the Pennsylvania Railroad Company with the exception that the act of 1846, authorizing similar acts to be done in the construction of railroads, contains the additional provision that the same acts may be done for maintenance or repair of the road. If the language of sec. 10 of the general railroad act approved February 19, 1849, gives to railroad companies the right to appropriate and condemn waters of a stream for its use in the operating of its railroad, the act of 1846, incorporating the Pennsylvania Railroad Company, then gave to it the right of eminent domain for the like purpose. It has not been pointed out to us that the Pennsylvania Railroad Company ever conceived that the right of eminent domain for the purposes in question was given to it by the act under and by virtue of which it was incorporated. On the contrary, it was found necessary in order that it might enjoy such privilege to add to legislation already in existence, and accordingly in 1859 an act was passed by the legislature of this state giving the right to appropriate and condemn water for such use.
    It is urged, however, on part of the plaintiff company that the Act of April 9,1856, P. L. 288, embodies the legislative construction of the act of 1849, and attention is called to the fact that the act contains the authority to appropriate “water and water rights.” The purposes of the act of 1856 were: first, to construe the act of 1855, extending the right of trial by jury in certain cases; second, to regulate practice of tendering “adequate security” required by the act of 1849; and, third, to regulate the practice in appeals allowed by the act of 1855. There is no intimation that it was the purpose of the legislature to then construe the act of 1849, or to enlarge upon the act of 1849, and thus give the right of eminent domain or so extend that right as to authorize railroad companies to appropriate water and water rights for the purpose of maintaining and operating a railroad; and if such a purpose was intended, the language employed is not sufficient for the purpose. The use of the words “water” and “water rights” indicate that the legislators were mistaken concerning the powers of eminent domain granted in the act of 1849, and were either careless or misled as to the language of the act. The act of 1849 was, therefore, in this particular neither added to nor subtracted from by the act of 1856.
    “An Act of Parliament does not alter the law by merely betraying an erroneous opinion of it so as to make it accord with the misconception ”: Endlich on Interpretation of Statutes, p. 519. “The only inference that a court can draw from such superfluous provisions is that the Legislature was either ignorant or unmindful of the real state of the law. . . . and if the law be different from what the Legislature supposed it to be the implication arising from the Statute can not operate as a negation of its existence, and any legislation founded on such a mistake has not the effect of making that law which the Legislature assumes to be”: Endlich on Interpretation of Statutes, sec. 374.
    It is urged, however, on part of plaintiff that the right of eminent domain for the purpose in question was held to exist by the late Judge Ewing in Smithko v. Ry. Co., .5 Pa. Dist. Rep. 543, and that the act of April 9, 1856, was there held to be a legislative construction of the act of 1849, in this, that the legislature meant to include in the right to construct water stations the right to take water and water rights under the power of eminent domain.
    Had the question of the right to appropriate water been before Judge Ewing in the case referred to, his decision would at least be persuasive and we could be excused for following it if the reason supported the conclusion. The right to appropriate land for the storage of water was before him, and he held that the right to appropriate land for water stations included the right to appropriate land for a reservoir, a reservoir being necessarily a part of a water station; and the expression of opinion upon which the plaintiffs rely is, therefore, mere dicta, was unnecessary for the determination of the case, and, therefore, not binding upon this court as being persuasive,
    Any doubt arising from the construction of legislation as to corporate powers granted therein must be resolved against the -corporation. This doctrine was announced by the late Chief Justice Black, and has never since been questioned.
    Judge Ewing, in his opinion in the case above stated, would seem to justify his dicta on the ground that water is a material in one sense of the word, just as gravel and timber. If any weight were to be attached to the intimation that water may be appropriated as material under the act of 1849, entry upon lands for this purpose could be had for the construction of bridges, viaducts and other buildings, and this power is separate and distinct from other powers to appropriate land. It, follows, therefore, that if water could be appropriated as “material" it could not be appropriated for general railroad purposes as attempted in this case.
    January 3, 1910:
    We cannot find in the act of February 19, 1849, or any supplemental legislation, that which we can construe as giving authority to railroad companies to appropriate water and water rights for operating purposes, and, therefore, we decide that this right or power does not belong to the plaintiff.
    Having concluded that the plaintiff has not the right of eminent domain with the power of appropriating water and water rights for use in the operation of its road, the question whether or not it attempted to exercise such powers, or did so exercise, in the premises becomes immaterial; however, we are not persuaded that at the time the alleged action of appropriation was taken in behalf of the plaintiff company that such action was prompted by the belief that the right of eminent domain was enjoyed by the plaintiff company in this behalf; and we, therefore, find as a fact from the evidence in the case that no sufficient act of appropriation was had on part of plaintiff that would amount to an appropriation under the right of eminent domain, and that its rights in the premises rise no higher than that of riparian owner.
    From the foregoing it follows that the bill must be dismissed at the costs of the plaintiff.

      Error assigned was decree dismissing the bill.

      John G. Johnson, with him John W. Kephart, for appellant.

      A. V. Barker, with him Chas. S. Evans and John E. Evans, for appellee.
   Per Curiam,

The decree is affirmed on the finding by the learned judge of the common pleas that there was no appropriation by the. plaintiff.


text:
    Juniata Water & Water Power Company v. Wilson Electric Company, Appellant.

      Equity — Equity practice — Injunction—Injunction affidavits — Bond.
    A decree granting an injunction without the filing of injunction affidavits and the entering of security, is in direct violation of equity rules 81 and 82, and of the principles governing practice in such a case, and such a decree will be reversed on appeal, although the court below made a subsequent order directing that the injunction should not issue until the plaintiff filed a bond and injunction affidavits.
    Argued Oct. 25, 1909.
    January 3, 1910:
    Appeal, No. 288, Jan. T., 1909, by defendant, from decree of C. P. Huntingdon Co., Feb. T., 1909, No. 153, awarding an injunction in case of The Juniata Water & Water Power Company v. Wilson Electric Company.
    Before Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Bill in equity for an injunction.
    The opinion of the Supreme Court states the case.

      Error assigned was in awarding a preliminary injunction.

      James S. Woods, with him W. H. Woods and Charles C. Brewster, for appellant.

      William S. Wallace, with him H. H. Waite, for appellee.
   Per Curiam,

The prayer of the bill was for an injunction to restrain the defendant from operating its works so as to draw from the plaintiff’s works more than the maximum electric power agreed to be supplied under a contract between the parties. A demurrer to the bill was overruled, and the defendant was granted twenty days within which to answer. At the same time the court of its own motion issued an injunction in accordance with the prayer of the bill. No injunction affidavits had been filed and no security was required. A motion to dissolve the injunction was overruled, but the decree was amended by providing that the injunction should not issue until the plaintiff filed a bond and injunction affidavits.

The granting of an injunction without the filing of injunction affidavits and the entering of security was in direct violation of equity rules 81 and 82, and of the principles governing the practice in such cases: Kincaid’s App., 66 Pa. 411; Gilroy’s App., 100 Pa. 5. In these cases it was said that a general affidavit to the truth of the averments in the bill was entirely insufficient and that it was clearly error to grant a preliminary injunction where no affidavits had been filed with the bill supporting the facts therein stated. This is conceded in the argument for the appellee, but it is sought to sustain the decree on the grounds that the error in awarding the injunction in the first instance was cured by the subsequent order of the court requiring affidavits to be filed before an injunction should issue. This view would justify a decision against a party without competent proofs on the faith of evidence to be produced afterwards.

The decree of the court is reversed at the costs of the appellee.


author: Mr. Justice Brown,

text:
    Joyce, Appellant, v. Black.

      Negligence — Fall of ornamental bracket on sidewalk — Presumption— Evidence — Res ipsa loquitur.

    1. In a suit against the owner of a building by a person injured by the fall of an ornamental bracket from the front of the building, the mere fact of the fall of the bracket does not raise the presumption of negligence and the rule res ipsa loquitur does not apply.
    2. In such a case it is error not to permit the plaintiff to lay a foundation for affirmative proof of negligence by the testimony of witnesses who examined the building five months after the accident, as to the manner in which the bracket had been fastened, where it has been shown that the conditions at the place where the bracket had been fastened remained the same during the five months.
    Argued Oct. 25, 1909.
    Appeal, No. 149, Oct. T., 1909, by plaintiff, from order of C. P. No. 4, Allegheny Co., Third Term, 1907, No. 822, refusing to take off nonsuit in case of Joseph F. Joyce v. A. W. Black.
    Before Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Trespass to recover damages for personal injuries. Before Carnahan, J.
    At the trial when John P. Brennen, a witness for plaintiff, was on the stand, he was asked this question:
    “Q. I ask you whether or not, when you examined it that day you noticed that there was anything to hold it up in the way of fastening it to the front of this building?”
    Objected to by counsel for the defendant, Ihe witness having already been asked that question, which was objected to, and in the light of his testimony and what he could testify to, it was sustained. It assumes that there ought to have been some fastenings there.
    The Court: That is a proper assumption in one respect.
    Mr. Brennen: I am asking how it was fastened and what it was fastened with, if anything.
    Mr. Shaw: That is what he says he does not know.
    Objection sustained. Exception to plaintiff. [1]
    Daniel F. Crawford was asked this question:
    “Q. Without stating how it was fastened, state why you say you are able to tell how it was fastened, from having examined this place five months after the bracket fell down? A. In all things pertaining to building, I have gained considerable knowledge from tearing down old places, remodelling old fronts and making them new. They all have signs showing how it was constructed. In that way we know how to take our bearings. They generally leave some mark to work by. In that way I know what to expect when I start to tear out or build up.”
    Mr. Brennen: “Q. In other words, every building is built on a design, all designs leading into the same result? A. Yes, sir, we can tell what is an ornament that holds something— what is an ornament that was put there to hold something. They all show you how they were put on and how we are to get
      them off. Q. And does it show, also, how they were held in place? A. Yes, sir, I have taken similiar fronts to this out, and replaced them with modern fronts.”
    The Court: “ Q. Are you able to state from what you saw positively how that was fastened, or are you simply able to give an opinion how it was fastened? A. To give an opinion how it was fastened.”
    Objection sustained, and exception noted to plaintiff. [5]
    Mr. Crawford: “Q. I understood you to say yesterday that you had frequently seen this building and this front? A. Yes, sir. Q. And I now ask you if you can state, as a matter of fact, how that cornice or bracket was held on the front of that building? A. I can answer. Q. How was it held?”
    Objected to by counsel for defense, as the witness did not see the bracket or cornice until five months after the accident.
    “Q. Did you see it before this accident? A. I saw the building before this accident. Q. Well, the front of the building? A. Yes, sir.”
    The Court: The witness has testified that his first examination was five months afterwards, although he had seen it frequently before, but he never made any examination until five months after the accident. We will sustain the objection and note an exception to the plaintiff. [6]
    Mr. Crawford: “Q. From your examination of that building in November after this accident, could you not as well tell how that bracket was attached to that frame and held in place as if you had seen it half an hour afterwards? A. Yes, sir. Q. Or prior to its falling out? A. I could tell the manner and mode of construction and what they depended on to hold it there, by looking at it, because I know the way they do it. Q. How was this one done? Was it done in the same way that others of that kind are? ”
    Objected to by counsel for defense, as the same question. Objection sustained. [7]
    F. J. Osterling, an architect, was asked this question:
    “Q. When you worked on the building, did you also look at the bracket when you were fixing the building up? A. Yes, sir, looked at it in a general way. Q. Mr. Osterling, your office was close by this building, was it' not, for a number of years? A. Yes, sir, I had an office in the building adjoining this one at one time. Q. And from that will you state whether or not you had any knowledge from the fact that your office was close by, and that you have remodelled this very front, and your examination of it at that time, can you say how that bracket was held at that time? Can you tell, that is the question.”
    Mr. Shaw: I have no objection to the witness saying whether he can express an opinion or not, but I object, as incompetent and irrelevant, to the witness basing his opinion upon an examination made five or six months after the accident.
    The Court: He can answer yes or no to that question. Just answer it yes or no, or with any qualifications you may wish; but do not state your opinion until we come up to that question.
    “A. Yes, I can.”
    Mr. Brennen: “Q. Now, I ask you how it was held?”
    Objected to by counsel for defendant, as incompetent and irrelevant. Objection sustained. [8]
    Mr. Osterling: “ Q. Tell us how that bracket or cornice was held in place on the front of this building, over the door on the left-hand side as you go in the door going upstairs.
    Objected to by counsel for defendant, as incompetent and irrelevant. Objection sustained. [9]
    The court entered a compulsory nonsuit, which it subsequently refused to take off.

      Errors assigned were (2) refusal to take off nonsuit; (3, 5-9) rulings on evidence, quoting the bill of exceptions.

      W. J. Bremen, for appellant,
    cited: Fisher v. Ruch, 12 Pa. Superior Ct. 240; Shafer v. Lacock, Hawthorn & Co., 168 Pa. 497; Kane v. Philadelphia, 196 Pa. 502; McCafferty v. R. R. Co., 193 Pa. 339; Spear v. P., W. & B. R. R. Co., 119 Pa. 61; Penna. R. R. Co. v. Miller, 87 Pa. 395; Penna. R. R. Co. v. Weiss, 87 Pa. 447; Allen v. Willard, 57 Pa. 374; Hungerford v. Bent, 55 Hun, 3; Murray v. McShane, 52 Md. 217; Welfare v. Ry. Co., L. R. 4 Q. B. Cases, 693; Coupland v. Hardingham, 3 Camp. 398; Salisbury v. Herchenroder, 106 Mass. 458; Reg v. Watts, 1 Salk. 357; Riegert v. Thackery, 212 Pa. 86; Booth v. Dorsey, 208 Pa. 276; Webster v. Coal & Coke Co., 201 Pa. 278; Corbin v. Philadelphia, 195 Pa. 461; Homan v. Stanley, 66 Pa. 464; Mullen v. St. John, 57 N. Y. 567; Byrne v. Boadle, 2 Hurlst & C. 722; Scott v. London Dock Co., 3 Hurlst & C. 596; Dehring v. Comstock, 78 Mich. 153 (43 N. W. Repr. 1049); Mintzer v. Greenough, 192 Pa. 137.
    January 3, 1910:

      George E. Shaw, of Reed, Smith, Shaw & Beal, for appellee,
    cited: Oil Co. v. Torpedo Co., 190 Pa. 350; Kepner v. Traction Co., 183 Pa. 24; Smith v. Electric Light Co., 198 Pa. 19; McKenna v. Paper Co., 176 Pa. 306; Reardon v. Thompson, 149 Mass. 267 (21 N. E. Repr. 369); Weaver v. Steel Co., 223 Pa. 238.
   Opinion by

Mr. Justice Brown,

On the evening of June 8, 1906, the appellant was sitting on a chair on the pavement in front of a building No. 602 Liberty avenue, Pittsburg. While sitting close to this building and near the adjoining one — No. 600 — an ornamental bracket from that building fell and struck him, and this suit is for the recovery of damages for the injuries sustained, due, as is alleged, to the failure of the appellee to ’have the bracket prop.erly and safely fastened to the building. The learned trial judge properly refused to sustain the contention that the fall of the bracket was in itself evidence of negligence.

There was no negligence in having the bracket for ornamental use on the front of the house, and its mere fall raised no presumption that it would not have fallen except for the negligence of the owner of the property in not having it safely attached to the building. The rule res ipsa loquitur is not in the case, and affirmative proof by the appellant of the appellee’s negligence was essential to a recovery. Such proof might have been submitted, but by the exclusion of the offers which are the subjects of the third, fifth, sixth, seventh, eighth and ninth assignments of error the appellant was not permitted to lay a foundation for the support of his charge of negligence. John P. Brennen, assistant superintendent of the bureau of building inspection for the city of Pittsburg, examined the front of the building about five months after the bracket fell. He testified that he had passed the building almost daily from the time the accident occurred up to the day he made the examination and there was no change whatever at the point from which the bracket fell. Pie was then asked whether when he examined the building he found there had been anything to hold up the bracket and fasten it to the building, but was not permitted to answer. D. F. Crawford, a contractor and builder, who also examined the building about the same time as Brennen, testified that he could see the way in which the bracket had been attached, but when asked to tell how, his answer was excluded. F. J. Osterling, an architect, and third witness, who had examined the building was asked whether, from his examination of it, he could say how the bracket had been held, but he, too, was not permitted to answer. .The reason given for not permitting these three witnesses to answer was that their examination of the building had been made five months after the accident, but the court evidently overlooked the testimony of Brennen that he had passed the property almost daily from June until December and that there had been no change in the front of it at the point where the bracket had been attached. In addition to this, though called after the foregoing three witnesses, Samuel W. Black, the appellee’s agent in charge of the building, stated that from' June to December there had been no change in the front of the building at the point stated. Under this state of facts Brennen, Crawford and Osterling were qualified to tell the jury how the bracket had been attached, and this would have been the first particular in the proofs required from the plaintiff to establish his allegation of negligence.

After having shown how the bracket had been attached, it would have been competent for the appellant, if able to do so, to submit proof that the way in which it had been attached and maintained was improper and unsafe, rendering it liable to fall at any time, and that the owner of the building so knew, or ought to have so known. He might not have been able to come up to this measure of proof, but it was his right to have the opportunity to do so, if he could, and that right was taken away from him when he was not allowed to take the first step towards it. The third, fifth, sixth, seventh, eighth and ninth assignments of error are sustained and the judgment is. reversed with a procedendo.


text:
    Bain v. Petroleum Iron Works Company, Appellant.

      Negligence — Master and servant — Evidence as to employment — Independent contractor — Case for jury.

    1. In an accident case where the question is whether the plaintiff was employed by the defendant or by a person who had a contract with the defendant, which on its face was an independent contract, and the evidence on the subject is conflicting, the case is for the jury and this is especially so if there is testimony from which the jury might infer that, if the contract set up had gone into effect, it had been abandoned.
    2. Where there is a reasonable doubt as to the facts or the inferences to be drawn from them, the case is necessarily for the jury.
    Argued Oct. 25, 1909.
    Appeal, No. 159, Oct. T., 1909, by defendant, from judgment of C. P. No. 3, Allegheny Co., Nov. T., 1905, No. 410, on verdict for plaintiff in case of Thomas Bain v. Petroleum Iron Works Company.
    Before Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Trespass to recover damages for personal injuries. Before Evans, J.
    The facts appear by the opinion of the Supreme Court, and by the previous report of the case in 223 Pa. 96.
    Verdict and judgment for plaintiff for 12,370. Defendant appealed.

      Error assigned was in refusing binding instructions for defendant.

      January 3, 1910:

      John C. Bane, with Mm B. G. Hughes and H. B. Hughes, for appellant.

      H. Fred Mercer, for appellee.
   Per Curiam,

In reversing a former judgment in this case on an appeal by the defendant it was said: “The evidence in the case called for a submission to the jury of two questions of fact: first, was the plaintiff injured in consequence of negligence on the part of Ms employer? and, second, was the defendant the employer?” The ground of reversal was the failure to submit the second question: see 223 Pa. 96. At the second trial the main question was whether the plaintiff was employed by the defendant or by a man who had been its foreman but had a contract for doing the work on wMch the plaintiff was engaged, wMch on its face was an independent contract'. The evidence on tMs subject was conflicting, but there was testimony from wMch the jury might infer that, if the contract set up had gone into effect, it had been abandoned, and that the work was being carried on by the defendant. The question could not have been withdrawn from the jury. It was submitted in such a manner as fully to protect. every interest of the defendant. Where there is a reasonable doubt as to the facts or the inferences to be drawn from them, the. case is necessarily for the jury: Howett v. R. R. Co., 166 Pa. 607.

The judgment is affirmed.


text:
    First National Bank of Allegheny v. Joseph Fleming & Son Company, Incorporated, Appellant.

      Corporations — By-laws—Powers of officers — Checks.
    The proceeds of a note discounted by a bank were passed to the credit of a corporation engaged in a wholesale liquor business. The bylaws of the corporation provided that checks should be signed by the secretary or treasurer, and countersigned by the president or vice president. The president and secretary executed a power of attorney in the name of the company empowering a person described as a “manager” to sign checks on the company’s account. There was no resolution of the directors authorizing this act. It appeared that the so-called manager conducted a business of selling imported beer for his own account under the name of “Manager of Foreign Beer Department,” preceding the name of the corporation. He used the name of the corporation in his business, and the directors knew that he did so. The object of this arrangement was to conceal the fact that the so-called manager was violating the liquor laws by selling liquor without a license. Held, that the bank which had paid out moneys on the “manager’s” checks, had a right to assume that such person was conducting a department of the corporation’s business, and that in checking out money he was checking the money for the corporation.
    Argued Oct. 25, 1909.
    Appeal, No. 154, Oct. T., 1909, by defendant, from judgment of C. P. No. 3, Allegheny Co., May T., 1905, No. 181, on verdict for plaintiff in case of First National Bank of Allegheny v. Joseph Fleming & Son Company, Incorporated.
    Before Fell, Brown, Mestrezat, Pot- ' ter, Elkin and Stewart, JJ.
    Affirmed.
    Assumpsit against the indorser of a promissory note.
    At the trial the jury returned a verdict for plaintiff for $1,752.79.
    On motion for judgment for defendant non obstante veredicto, Evans, J., filed the following opinion:
    The facts in this case are not in dispute. On July 9, 1904, one E. Heineman executed his promissory note and delivered the same to George S. Fleming, and said note, indorsed by George S. Fleming, and E. Bluthardt and by Joseph Fleming & Son Company, incorporated, by George S. Fleming, president, and E. T. Heineman, manager, was discounted by the plaintiff bank, and the proceeds of the note placed to the credit of Joseph Fleming & Son Company, incorporated, imported beer department. The note was not paid at maturity, to wit, October 10, 1904. On July 16, the plaintiff received a power of attorney in writing signed by Joseph Fleming & Son Company, incorporated, by George S. Fleming, president, and J. J. Holland, secretary, impowering E. T. Heineman, manager foreign beer department, to sign checks on the account representing the proceeds of this note, and with the exception of a balance of 158.00 the entire amount was checked out on checks so signed by Heineman. There was no resolution of the board of directors authorizing George S. Fleming, as president, to so indorse the note, and there was no resolution of the board of directors authorizing Fleming and Holland, as president and secretary, to execute the power of attorney. E. T. Heineman was conducting the business of selling imported beer for his own account under the name of manager of the foreign beer department, Joseph Fleming & Son Company. He conducted this business for several months, but was never authorized to so conduct the business by resolution of the board of directors of Joseph Fleming & Son Company. The by-laws of Joseph Fleming & Son Company on the powers of the president and secretary, so far as they relate to the questions involved in this case, are as follows: “All checks of the Company shall be signed by the Secretary or Treasurer and countersigned by the President or Vice-President. Bills payable and bills receivable of the Company shall be signed'and indorsed by the President or the Vice-President.”
    For the purposes of this case, we might pass by the question as to whether the president of the defendant corporation had authority to indorse the note that was discounted by the plaintiff bank, upon which suit is brought in this case. The proceeds of that note were placed to the credit of the defendant corporation, and the acceptance of the proceeds of that note, if nothing else intervened to relieve, the corporation, would seem to be a ratification of the act of its president in indorsing the note, and make the corporation liable for its payment. But it is alleged that the corporation never authorized the’ president and secretary to execute a power of attorney to E. T. Iieineman to check out the proceeds of that note, and that the bank ought to have known that the power of attorney was a misappropriation of the funds of the defendant corporation by its president and secretary. The by-laws of the corporation authorize the president and secretary to sign checks, and if the president and secretary had authority to draw this money out of bank on checks signed by them, they certainly had power and authority to delegate the power to some other person to sign these checks. But was there any misappropriation of funds, so far as the defendant corporation is concerned, by the secretary and president, authorizing E. T. Heineman, “Manager foreign beer department, ” to sign checks on the proceeds of this note? Joseph Fleming & Son Company was engaged in the wholesale liquor business. E. T. Heine-man was conducting a business without a license, which consisted in the sale of imported beer. He was conducting that business under the name of Joseph Fleming & Son Company, and, so far as the public knew, was conducting it as manager for that corporation. He was protected from prosecution for violation of the liquor laws by the license of Joseph Fleming & Son Company. Conducting Ins business under the name of “Manager of foreign beer department, Joseph Fleming & Son Company,” was unquestionably done for the purpose of evading prosecution for the violation of the liquor laws. It is true he was not authorized by resolution of the board of directors to conduct that business, as he did, but he conducted that business for several months, with an office at Joseph Fleming & Son Company's place, sending out stationery and bills with the name of “Joseph Fleming & Son Company, Incorporated” upon them, and the members of the board of directors knew that he was so conducting his business. This was peculiarly a case, where the public had a right to assume that a man who was so conducting a business with his office at the defendant's place of business, was, in fact, conducting that business for the defendant, and the bank had the right to assume that the foreign beer department, conducted by E. T. Heineman, was a department of the defendant corporation, and that the checking of the money by Heineman was a checking of the money for the defendant company. •
    January 3, 1910:
    The motions for judgment non obstante veredicto and for new trial ex parte defendant are refused.

      Error assigned was in refusing binding instructions for defendant.

      Leonard 8. Levin, for appellant,
    cited: Millward-Cliff Cracker Co.’s Est., 161 Pa. 157; Worthington v. Ry. Co., 10 Pa. Superior Ct. 117.

      J. B. Orr, for appellee,
    cited: Turnpike Co. v. Pass. Ry. Co., 194 Pa. 144; New York, etc., R. R. Co. v. Schuyler, 34 N. Y. 30; North River Bank v. Aymar, 3 Hill (N. Y.), 262; People’s Bank v. Kurtz, 99 Pa. 344; Manhattan Hardware Co. v. Phalen, 128 Pa. 110; Gunster v. Scranton, etc., Co., 181 Pa. 327; Bryan v. Bank, 205 Pa. 4; Franklin Ins. Co. v. Bradford, 201 Pa. 32; Brindley v. Walker, 221 Pa. 287.
   Per Curiam,

The judgment is affirmed on the opinion of the learned-judge of the common pleas.


author: Mr. Justice Elkin,

text:
    Federal Street & Pleasant Valley Passenger Railway Company, Appellant, v. Pittsburg.

      Taxation — Municipalities—Street railways — Real estate — Pittsburg and Allegheny City — Acts of January 4,1859, P. L. 828, and February 7, 1906, P. L. 7.
    1. While taxation is an incident of sovereignty absolutely necessary to maintain government, the authority to impose taxes depends upon express legislative grant and' not upon incidental governmental power. There is no such thing as taxation by implication. The burden is always upon the taxing authority to point to the act of assembly which authorizes the imposition of the tax claimed.

      2. The real estate of a public or quasi public corporation such as a street railway company, essential to the exercise of its corporate franchises, is not subject to assessment and taxation for local purposes in the absence of legislative authority imposing such taxes.
    3. There is nothing either in the Act of January 4, 1859, P. L. 828, or in the Act of February 7, 1906, P. L. 7, or any other act, which authorizes the consolidated city of Pittsburg to tax the real estate of a street railway company situated in the city of Allegheny, and necessary and essential for the exercise of the franchises of the company for local purposes.
    4. The consolidated city of Pittsburg has the power to levy and assess taxes upon all taxable subjects just as those subjects of taxation existed at the time of the consolidation, but has no power to extend the territorial limits of the local act of 1859 so that a new subject of taxation will be created and property made taxable in a locality where neither by general or local laws was such property ever taxable before.
    Argued Oct. 25, 1909.
    Appeal, No. 108, Oct. T., 1909, by plaintiffs, from decree of C. P. No. 2, Allegheny Co., April T., 1909, No. 1,021, dismissing bill in equity in case of Federal Street & Pleasant Valley Passenger Railway Company and Pittsburg Railways Company v. City of Pittsburg and John F. Steel, Treasurer, and L. R. Goshorn, Delinquent Tax Collector.
    Before Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Bill in equity for an injunction to restrain the city of Pitts-burg from collecting taxes on real estate of the plaintiffs situated in the city of Allegheny, and having erected thereon a power house. Before Shafer, J.
    A demurrer was filed to the bill and sustained by the court.

      Error assigned was decree dismissing the bill.

      Samuel McClay, of Reed, Smith, Shaw & Beal, for appellants.
    The act of 1859 is confined to the territory of the city of Pittsburg as it existed at that date, except where extended by special acts: Wheeler v. Philadelphia, 77 Pa. 338; Vulcanite Portland Cement Co. v. Allison, 220 Pa. 382.
    Special and local acts of the character of those of 1859 and 1870 are territorial in effect: Parsons v. Winslow, 1 Grant, 160; Clifford v. Belsterling, 2 S. & R. 108; Irwin v. McCallin, 28 P. L. J. 322; Malloy v. Com., 115 Pa. 25; Nissley v. Lancaster County, 215 Pa. 562.
    Since the adoption of the constitution of 1874, the legislature could not pass a law extending the act of 1859 beyond the limits of the city of Pittsburg, as it existed at the adoption thereof: Evans v. Phillipi, 117 Pa. 226.
    The car barn of the appellant was not taxable for city purposes prior to the consolidation of the two cities, and is not taxable now unless under the Act of January 4,1859, P. L. 828: Philadelphia v. Traction Co., 208 Pa. 157; New York & Erie R. R. Co. v. Sabin, 26 Pa. 242; West Chester Gas Co. v. Chester County, 30 Pa. 232.

      Lee C. Beatty, with him C. A. O’Brien, for appellees.
    The corporate existence, and all the corporate powers, of the city of Allegheny ceased upon its annexation to the city of Pittsburg: Mt. Pleasant v. Beckwith, 100 U. S. 514.
    The power to tax real estate of railroads under the special Act of January 4, 1859, P. L. 828, relating to the city of Pitts-burg, is a corporate power, and not an act limited to its territorial limits at the time of the passage of that act, and its power to tax extends to that portion of the city which was formerly the city of Allegheny: Pennsylvania R. R. Co. v. Pittsburg, 104 Pa. 522; Penna. R. R. Co. v. Pittsburg, 221 Pa. 90; Hewitt’s App., 88 Pa. 55; Pittsburg’s Petition, 217 Pa. 227; Norristown v. Pass. Ry. Co., 148 Pa. 87; Greenfield Ave., 191 Pa. 290; Emsworth Borough, 5 Pa. Superior Ct. 29; New Brighton Borough v. Biddell, 201 Pa. 96; Pinkerton v. Traction Co., 193 Pa. 229.
    This power to tax real estate of railroads extends to a tax levied by the present city of Pittsburg on railroad property in the former city of Allegheny, for the purpose of paying the pre-existing indebtedness of the former city of Allegheny: Mt. Pleasant v. Beckwith, 100 U. S. 514.
    This power to tax real estate of railroads also extends to a tax levied by the present city of Pittsburg, for the purpose of raising money for the use of the central board of control having in charge the Allegheny city school district: Com. ex rel. v. Pittsburg, 209 Pa. 333; Com. v. Shaw et al., 96 Pa. 268; Mellor v. Pittsburg, 201 Pa. 397; Com. v. Macferron, 152 Pa. 244; Com. v. Wyman, 137 Pa. 508.
    January 3, 1910:
    The car barn of a street railway company is taxable as real estate under said act of 1859: Philadelphia v. Traction Co., 206 Pa. 35; Penna. R. R. Co. v. Pittsburg; 221 Pa. 90.
   Opinion by

Mr. Justice Elkin,

A statement of a few rules and principles of law about which there is and can be no dispute will be helpful to a proper understanding of the questions involved in this proceeding. While taxation is an incident of sovereignty absolutely necessary to maintain government, the authority to impose taxes depends upon express legislative grant and not upon incidental governmental power. There is no such thing as taxation by implication. The burden is always upon the taxing authority to point to the act of assembly which authorizes the imposition of the tax claimed. Taxation is a sovereign state governmental power not possessed by municipalities or municipal divisions unless delegated to them. In other words, municipalities have no implied power of taxation and must look to the statutory grant for such authority as they possess in the imposition of taxes. In Pennsylvania it has been uniformly held that the real estate of a public or quasi public corporation essential to the exercise of its corporate franchises is not subject to assessment and taxation for local purposes in the absence of legislative authority imposing such taxes. Prior to the consolidation of the two cities the property in question was not subject to assessment and taxation as real estate. It was located in what was. formerly the city of Allegheny, and no act of assembly, general or local, was ever passed subjecting property of the kind involved in tins proceeding to taxation as real estate in that city. This is not an attempt to evade the payment of taxes upon property which other like corporations throughout the commonwealth are compelled to pay, but appellants complain that they should not be subjected to taxation upon property never taxed before and which is not taxed in any other part of the commonwealth unless located within the limits of some district in which prior to the adoption of the new constitution the legislature had expressly provided that property of the kind here involved should be a subject of taxation for local purposes like other real estate in the locality affected. No exemption is claimed from the payment of taxes expressly imposed by statute and ordinarily paid throughout the commonwealth, but resistance is made to the imposition of new burdens limited to the local district and not generally borne by other like corporations in other parts of the state. With these facts, axiomatic and fundamental principles in mind, let us proceed to a consideration of the merits of the controversy here involved. While in the preparation and consideration of the case by counsel and court many collateral, incidental and material matters have been discussed, the real question is within narrow limits. It is all a question of authority for the imposition of the new burden. If the consolidated city of Pittsburg has the authority to tax the property in question that is an end of the case; but if it does not possess such power its right to impose the taxes in question does not exist. There is no general tax statute subjecting the property here involved to taxation, and we must look elsewhere for the authority if in fact there be any. The contention of the city is that by the consolidating Act of February 7, 1906, P. L. 7, and the local Act of January 4,1859, P. L. 828, applicable to the old city of Pittsburg, such power was either expressly conferred upon the municipality or results by necessary implication. The answer to this position must be found in the acts themselves. Some confusion has arisen by an indefinite and somewhat loose use of the term governmental powers. Of course if the city has been delegated the municipal governmental power to create new subjects of taxation or to extend old ones no one could question its right to exercise the power so possessed. This is the pinch of the case. Governmental power is a broad and comprehensive term, the extent and degree of which depend upon the authority asserting it. Sovereign state governmental power is one thing and delegated municipal power quite another. The first is only restrained in its exercise by constitutional limitations, the second is entirely restricted by its grant and does not extend beyond the limitations imposed by the statute conferring it. Sovereign power is state wide while municipal power is limited to the localities affected. The act of 1859 was local, applicable only to the city of Pittsburg, and was passed for the purpose of enabling that city to raise additional revenue. It seems to have been carefully drawn, and the draughtsman evidently had in mind the distinction which has always been made between the power to levy and collect a tax and the power to create a new subject of taxation. This thought is clearly expressed in that act. By the first, second and fourth sections the power to levy, assess and collect certain licenses and taxes is expressly conferred upon the select and common councils of said city. In the third section no such power is conferred, but the legislature giving expression to the sovereign power of the state created a new subject of taxation within the territorial limits of that city for certain purposes. This is what the legislature did, and the city obtained no greater right than the statute gave which was the authority to treat certain kinds of property not theretofore' taxable as a subject of taxation. The authority to levy and assess a tax against the property thus subjected to taxation was not conferred upon city councils by the act of 1859, which only provided as to real estate belonging to railroads that it shall be subject to taxation for city purposes like other real estate in said city. Other real estate in said city was not taxable under that act but under other general statutes which also gave authority to levy and assess. It seems perfectly clear, therefore, that the old city of Pittsburg never had conferred upon it the municipal power to create property of the kind in question into a taxable subject. The legislature had the power prior to the adoption of the constitution of 1874 to subject this kind of property to taxation either in local districts or throughout the commonwealth. In this instance it exercised the power in the old city of Pittsburg as it had the right to do, but it is important to keep in mind that the legislature exercised the power directly and did not delegate it to the municipality to be exercised as the councils thereof might deem proper. There is good reason for the legislative distinction made between section three and the other three sections of the act of 1859. From the beginning of our state government real estate has been considered a primary source from which necessary revenues may be derived. Real estate is everywhere and is the basis of taxation in every municipal division, large or small. The right to use, enjoy and possess real estate lies at the foundation of the peace, comfort and happiness of our people. This right and the burdens which accompany it should be defined and fixed by general laws applicable as nearly as may be throughout the whole commonwealth. For this reason it has been the policy of our state to subject real estate to taxation by general statutes so that it will everywhere be treated upon the same basis. If it were not so and the policy prevailed of the state delegating this power to municipalities much confusion would arise and no uniformity could be maintained. If municipalities had this power to exercise, each one would act from the standpoint of its own necessities, requirements and ideas of local governmental conditions in the creation of taxable subjects, and we would have new and different subjects of taxation at every municipal division line. Such a condition would be deplorable and it never has been the policy of our state to confer such power upon municipal governments except in rare and exceptional instances, and when so done the power was expressly conferred by the statute. Real estate (throughout the commonwealth is made subject to taxation by the acts of 1834 and 1844 and other supplemental legislation of a general character. Prior to that time real estate was taxed under general laws now repealed. The authority to levy and assess a tax is a very different thing from the power to create a taxable subject. Levy and assessment have to do with the rate and valuation and the method of fixing the amount of the tax, while the taxable subject is the res, that is, the property or thing upon which the levy and assessment operate and against which the tax is levied. The act of 1859 did not delegate to the select and common councils of the city of Pittsburg the power to provide by ordinance or otherwise that real estate m general and the kind here involved in particular should be made a taxable subject, nor did it authorize city councils to levy and assess taxes against such property. All it did was to provide that property such as is here involved should be subject to taxation within the limits of that city, subject, of course, to the municipal power granted by other statutes to levy and assess taxes against it in the same manner as taxes were levied and assessed against other real estate. We therefore hold that no municipal governmental power was conferred upon the councils of the city of Pittsburg by the act of 1859 to subject property of the kind in question to taxation, and that such property only became a subject of taxation by the exercise of the sovereign power of the state through the legislature. This is the answer to the very able argument made by learned counsel for appellees in which it is contended that the city possessed this governmental power, which expanded with the expansion of the city. A power never possessed can not expand. It is clear from what has been said that the act of 1859 is a local act subjecting certain kinds of property to taxation within the territorial limits of the locality affected. If it expanded it was not by reason of the expansion of a governmental power but because the territorial limits of the city expanded. This view does not seem to be very confidently pressed. If it be the rule that a local act limited at the time of its passage to a particular city, or county, or township, expands with municipal expansion, it would follow as of course that it contracts with the contraction of territorial limits, for if the rule be sound it must work both ways. In other words, if the two cities involved in this case had been consolidated by annexing the old city of Pittsburg to Allegheny, under the rule sought to be invoked here, all local acts in the annexed city would be inoperative because the municipality to which they applied would then no longer exist. Such a result is not necessary under any proper rule of construction, and no decided case has been called to our attention to warrant such a conclusion. Or, again, let us assume that within constitutional limitations it were possible to divide one county into four counties and that the division was affected while a local act was in force in the parent county, what would result as to the application of the local act under such circumstances? Would it apply only in that part of the original county left after carving out the three new counties, or would it still apply to all of the territory included in the parent county unaffected by the division? The safer and sounder rule is that it applies to the entire territory, no less and no more, to which the legislature made it applicable, and that these territorial limits are not affected by subsequent changes of municipal division lines. This is the doctrine of Parsons v. Winslow, 1 Grant, 160, and Clifford v. Belsterling, 2 S. & R. 108. This has also been the recognized rule in dealing with local prohibitory liquor laws. It is sound and should not be disturbed. Then in addition there are the constitutional barriers that no local act shall be passed regulating the affairs of counties, cities, townships, wardsj boroughs and school districts; also that other provision that so much of any law as may be revived, amended, extended or conferred shall be re-enacted and published at length, which was not done in this case. The legislature could not have done directly what is claimed to have been done indirectly in the case at bar, that is, extend the operation and territorial limits of a local act by a general statute. It is'true that the territorial limits of the act of 1859 were extended several times prior to the adoption of the new constitution when additional territory was added to the city of Pittsburg, but this result was accomplished by the express provisions of the acts authorizing the consolidation and extensions. The taxation of this kind of real estate under the act of 1859 was purely local, and we find nothing in the consolidating act of 1906 which in any way affected its purpose or attempted to extend its territorial limits. So far as the consolidating act is concerned it left all subjects of taxation just as they were at the time it was passed and as they existed when the consolidation was effected. The consolidated city is now as it was before the consolidation took place, a city of the second class with power to levy and assess taxes conferred upon such cities, but without power to create a taxable subject in certain lands of real estate not made taxable by general law. The argument of convenience and the suggestion of confusion are advanced as a reason for holding that the provisions of this local act should be extended into new territory never covered by it. It is suggested that by so holding the constitutional requirement of uniformity in taxation would be more nearly approached, but this is a two-edged sword because if uniformity is the goal to be attained this result can best be accomplished by the repeal of the local act of 1859 and then this kind of property would be uniformly taxed throughout the commonwealth. However, the argument of convenience cannot prevail when the legal rights of parties are involved. Many embarrassing questions arise out. of the consolidation of different municipalities and districts when governed by local and inconsistent laws, but these are the burdens and inconveniences assumed in the accomplishment of greater things. The consolidated city has the power to levy and assess taxes upon all taxable subjects just as those subjects of taxation existed at the time of consolidation, but has no power to extend the territorial limits of a local act so that a new subject of taxation will be created and property made taxable in a locality where neither by general or local laws was such property ever taxable before. For the reasons herein-before stated and others that might be added- we think the city was without authority to tax the property of appellants located in the city of Allegheny, that is the particular property involved in this proceeding for city purposes under the act of 1859.

Decree reversed, bill reinstated and record remitted with directions to enter such decree in accordance with the views herein expressed as will protect the rights of the parties. Costs* to be paid by appellees.


text:
    Pittsburg, Allegheny & Manchester Traction Company, Appellant, v. Pittsburg.
    Argued Oct. 25, 1909.
    January 3, 1910:
    Appeal, No. 109, Oct. T., 1909, by plaintiffs, from decree of C. P. No. 2, Allegheny Co., July T., 1908, No. 9, dismissing bill in equity in cas:e of Pittsburg, Allegheny & Manchester Traction Company and the Pittsburg' Railways Company v. City of Pittsburg, John F. Steel, Treasurer, and L. R. Goshorn, Delinquent Tax Collector.
    Before Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.

      Samuel McClay, of Reed, Smith, Shaw & Beal, for appellants.

      Lee C. Beatty, with him, C. A. O’Brien, for appellees.
   Opinion by

Mr. Justice Elkin,

This case is on all fours with the preceding one, and is controlled by the same rules and .principles. The only difference between the two cases is the character of the real estate involved. It is therefore unnecessary to discuss the question raised by this appeal. For the reasons stated in the opinion filed in th'e former case, ante, p. 419, the decree entered by the court below must be reversed.

Decree reversed, bill reinstated and record remitted with directions to enter such decree as will protect the rights of the parties as indicated in the opinion filed in the preceding case. Costs to be paid by appellees.


text:
    Beatty v. Safe Deposit & Title Guaranty Company, Appellant.

      Appeals — Interlocutory decree — Trusts and trustees — Accounting— Act of June 24,1895, P. L. 243.
    Where on a bill in equity against a trustee for an account the defendant’s answer admits a liability to account, but seeks to limit the period of accounting by alleged settlements covering only part of the account, a decree directing an account cannot be appealed from under the Act of June 24, 1895, P. L. 243, which allows an appeal by a defendant in a proceeding in equity for an accounting when, on his part, “ there is a denial of liability to account.”
    Argued Oct. 26, 1909.
    Appeal, No. 8, Oct. T., 1910, by defendant, from decree of C. P. Clarion Co., May T., 1908, No. 2, on bill in equity in case of John K. Beatty v. Safe Deposit & Title Guaranty Company in its own right and as Trustee et al.
    Before Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Bill in equity for an account:
    The material portions of the defendant’s answer were as follows:
    3. In answer to the sixteenth paragraph of said bill, defendant says that there remained in its custody, as trustee, at the 'time of the service of the said bill upon it, the sum of $1,510.64, the net proceeds of the sale of lots, subject to deductions for fees and commissions to which it is entitled, and which said sum belongs to the said defendant, and the cestui que trustents, in proportion to their ownership in the lands described, and which was at that time the only fund in the hands of this defendant, as trustee, in which the plaintiff is interested, or out of which he is entitled to a distributive share.
    4. In answer to seventeenth paragraph of said bill, defendant says: “That after having paid the note of $6,000 and interest, therein mentioned, according to the terms and conditions of the declaration of trust designated as exhibit ‘A,’ it continued to act as trustee, and to sell and dispose of the real estate described in plaintiff’s bill, with the full knowledge, consent, agreement and approval of all of the cestui que trustents, and from time to time paid to them, and to each of them, their full shares of all of the profits arising from the sales of said land, in excess of said note and interest thereon, which said payments or distribution of funds was paid by this defendant and received by each of the cestui que trustents as settlements in full to the several dates of said payments, the last payment by it so made being on or about September 11, 1906, at which time it, the said defendant, had no knowledge or notice of any conveyance or assignment of the interest of Florence M. Bailey and J. D. Bailey, her husband, to the plaintiff in this case, nor any claim by the plaintiff that he owned an interest therein, and it denies that it was its duty to convey to the plaintiff, or any of the other cestui que trustents, the balance of the land remaining unsold until it was requested so to do, and it further avers that it has not-at any time been requested by the plaintiff to convey to him any interest in the said lands.”
    5. In answer to the eighteenth paragraph of said bill, this defendant says: “That it has in its possession the sum of $1,510.64, and that said sum, after deducting for commissions and fees due to this defendant, is the only sum in its hands, any portion of which is due or owing to plaintiff.”
    The court entered a decree directing an account.

      Error assigned was the decree of the court.

      F. J. Maffett, with him H. M. Rimer, for appellant.
    An appeal to this court by any of the defendants who may be aggrieved by the order or decree to account is clearly allowed by the act: Lauer et al. v. Lauer Brewing Co., 180 Pa. 593.

      Don C. Corbett and R. A. McCtdlough, with them H. E. Rugh and John Gates, Jr., for John K. Beatty, appellee.

      C. E. Harrington, with him G. G. Sloan, for Jefferson R. Leason et al., appellees.

      January 3, 1910:
   Opinion by

Mr. Justice Brown,

This appeal is from an interlocutory decree ordering an accounting by the appellant. It is taken under the act of June 24, 1895, P. L. 243, which allows an appeal by a defendant in a proceeding in equity for an accounting when, on his part, “there is a denial of liability to account.” To entertain this appeal would be to stretch the act beyond its plain intendment. Where there is a denial of liability by a defendant to account, and the preliminary decree is adverse to him, the purpose of the act is to enable this court to determine whether, under the pleadings and proofs, the plaintiff is entitled'to-an account, and, if not, to direct the bill to be dismissed, saving the parties to the proceeding further tedious and useless litigation. Where there is no denial by the defendant of liability to account no appeal lies by him from the decree ordering him to account merely because, during the period over which his account is to extend, settlements were made by him with those entitled to the account. It is not our province under the act of 1895 to determine as a preliminary question what period the account shall cover. That remains for the court below, as if the act had not been passed. If upon final decree an account as confirmed by the lower court is erroneous for any reason, and the defendant is aggrieved by it, it can be corrected on appeal. The situation now before us is an admission by the appellant in the third, fourth and fifth paragraphs of the answer of its liability to account to the appellee; but we are asked to modify the decree because it had made settlements up to a certain date, back of which it ought not to be compelled to go in its accounting. It may be that settlements were made, back of which the appellee cannot go, but this is not a question for our determination on this appeal. The only right of the appellant now is to be heard on the decree ordering it to account. If such liability were denied, it would be our duty under the act of assembly to pass upon it, but in the face of the appellant’s admission of the liability, its appeal must be dismissed.

Appeal dismissed at appellant’s costs.