author: Me. Justice Potter,

text:
    Merritt v. Poli, Appellant.

      Appeals — Assignments of error — Defective assignments — Refusal of judgment n. o. v. — Assignments as to charge — Failure to charge — Admission and rejection of evidence — Assignment containing no exceptions — Assignment embracing two points.

    1. An assignment of error that “the learned court erred in refusing to enter judgment for the defendant, non obstante veredicto,” is not complete nor self sustaining. It should set out the point requesting binding instructions, the motion or rule for judgment, and the order of the court below overruling the motion.
    2. An assignment of error which avers generally that the charge of the court below was not fair and adequate, and sets forth nineteen sub-divisions, nine alleging error in portions of the charge which are quoted, and the remaining ten criticising the charge in general terms, without quoting its language, is a flagrant violation of Rule 26, and also infringes Rule 27 which prescribes that the part of the charge assigned for error must be quoted ipsissimis verbis.
    3. Assignments of error to the effect that the court below erred in failing to call the attention of the jury to certain matters set forth in the respective assignments, are bad, inasmuch as error cannot be assigned of what was not said by the trial judge without a request so to charge.
    4. Assignments of error to the admission or rejection of documentary evidence will not be considered where the assignments do not contain in so far as may be practicable, copies of the papers referred to, although they are printed in the appendix.
    5. Assignments of error to the admission or rejection of testimony must show the offer of testimony rejected, or the testimony admitted.
    6. Assignments of error will not be considered which show no exception taken to the action of the court below in the matters of which complaint is made.
    7. Assignments of error each of which contain two exceptions are bad as violating Rule 26.
    8. An assignment of error showing only one exception, but embracing two points, violates Rule 26.
    9. An assignment of error to the refusal of the court to strike out testimony violates Rule 28 if it does not quote the evidence which the court refused to strike out..

      Mechanics’ lien — Service of notice of intention to file lien— Party in possession — Occupancy — Act of June 4, 1901, Sec. 8, P. l. m.

    10. As applied to land, the term “possession” may be employed in the sense of “occupancy.” Actual possession or possession in fact, exists where the thing is in the immediate occupancy of the part.
    11. Under the Act of June 4, 1901, Sec. 8, P. L. 431, relating to service of notice of intention to file lien, the claimants are not bound to prove that the person upon whom the notice was served was the agent of the owner. It is sufficient for them to show that he was a party in possession.
    12. In such a case the claimant is entitled to go to the jury on the question of the sufficiency of the service of the notice, by the evidence of a witness who served the notice, that he wont to the structure liened, which was a theatre, saw the ticket seller, who was the admitted agent of the owner, who told him that the owner was out of town, and pointed out a person as “his manager and representative,” and that this person who was apparently in possession of a part of the building, acknowledged himself to be the representative of the owner. The claimant is not obliged to prove that the person in question was actually the owner’s agent.

      Contract — Performance — Belay in completing worh — Penalty.
    13. Where a building contract provides a heavy penalty for delay in completing work within a time specified, and the contractors covenant that they “will be liable to above penalty for all delays caused by them,” the contractors will only be liable for delays caused by themselves, and if there is evidence, although contradicted, that the delay was owing to the failure of another contractor to erect walls in time, the question of the liability for the penalty is for the jury.
    Argued Feb. 20, 1912.
    Appeal No. 27, Jan. T., 1912, by defendants from judgment of C. P. Lackawanna Co., March T., 1908, No. 983, on verdict for plaintiff in case of Merritt & Company v. Sylvester Z. Poli, with notice to Frank Ricca, Contractor.
    Before Fell, C. J., Bkown, Pottee, Stewabt and Moschziskee, JJ.
    Affirmed.
    Scire facias sur mechanics’ lien. Before Edwaeds, P. J.
    The facts are stated in the opinion of the Supreme Court.
    Verdict and judgment for plaintiff for 1(10,836.11. Defendant appealed.

      Errors assigned, covering forty-six pages, were (1-47) to various instructions and rulings sufficiently indicated in the opinion of the Supreme Court.

      John P. Kelly, of O’Brien & Kelly, and O. P. O’Malley, of Warren, Knapp & 0 Malley, with them Welles é Torrey, for appellant.

      George Quintará Eorwitz, with him Clarence Bailentine and A. A. Vosburg, for appellees.
    No one but the jury could determine whether or not the person served was a party in possession of the structure as contemplated by the Act of Assembly: Vandevort v. Wheeling Iron & Steel Co., 194 Pa. 118; Dixon v. Daub, 17 Pa. Superior Ct. 168; Mason v. Ammon, 117 Pa. 127; Stull v. Wiegel, 20 W. N. C. 98.
    The words “possession” and “occupancy” when applied to land, are convertible terms and practically synonymous : Walker v. Converse, 148 Illinois 622; Walters v. People, 21 Illinois 178.

      April 29, 1912:
   Opinion by

Me. Justice Potter,

This proceeding is scire facias issued upon a mechanic’s lien for the sum of $13,427.14, filed hy Merritt & Company, sub-contractors, against Sylvester Z. Poli, owner, and Prank Ricca, contractor. The lien was filed against a property consisting of a brick theatre and store building, with the ground appurtenant thereto, situated in the city of Scranton. That the materials were furnished, and the work performed in accordance with the contract, except as to the time of completion, is not questioned. Nor is the correctness of the amount charged for the work disputed. The defense to the claim was two-fold. In the first place, it was alleged that the notice of intention to file the lien was not served by claimants in accordance with the requirements of Section 8 of the Act of June 4, 1901, P. L. 431; and in the second place, it was alleged that the claimants were chargeable with the sum of $50.00 per day for 273 days, or a total of $13,650, as penalties for delay in completing the work. This amount is more than the balance Claimed to be due on the contract. The trial in the court below resulted in a verdict for the plaintiffs for the sum of $8,668.89, with interest from August 31, 1907, amounting to $10,836.11. Motions for a new trial and for judgment non obstante veredicto were overruled, and judgment was entered on the verdict. The defendants have appealed, and forty-seven assignments of error have been filed, many of which are defective.

The first assignment consists merely of the statement that “the learned court erred in refusing to enter judgment for the defendant, non obstante veredicto.” It appears from the record that the defendants submitted a point requesting binding instructions in their favor. This point was refused. The docket entries show that defendants subsequently “filed rule and order for judgment non obstante veredicto,” and the court overruled this motion. The assignment of error is, therefore, not complete or self-sustaining. To make it so it should set out the point refused, the motion or rule for judgment, and the order of the court below overruling the motion.

The second assignment of error is remarkable. It avers generally that the charge of the court below was not a fair and adequate presentation of defendant’s case, and it sets forth nineteen subdivisions, extending over some six pages of the paper book, nine of the subdivisions alleging error in portions of the charge which are quoted, and the remaining ten criticising the charge in general terms, without quoting its language. This assignment is a flagrant violation of Rule 26, which requires that “each error relied on must be specified particularly and by itself”; and it also infringes Rule 27, which prescribes that the part of the charge assigned for error “must be quoted ipsissimis verbis in the specification.” This assignment will therefore not be considered.

In assignments from seventeen to twenty, inclusive, it is alleged that the court below erred in failing to call the attention of the jury to certain matters set forth in the respective assignments. These specifications, however, show no requests for such instructions and no exceptions to the failure of the trial judge to give them. In Kaufman v. Pittsburgh, Etc., R. R., 210 Pa. 440, we said (p. 445): “Error cannot be assigned of what was not said by the trial judge, without a request so to charge.” Rulings to the same effect are found in Murtland v. English, 214 Pa. 325, and Newingham v. Blair Company, 232 Pa. 511.

The twenty-second, twenty-fifth, twenty-eighth, twenty-ninth and thirtieth assignments of error, are to the admission or rejection of documentary evidence. These assignments do not contain copies of the papers referred to, although they are printed in the appendix. The proper practice is to embody in the assignment, in so far as may be practicable, a copy of the documentary evidence, the admission or rejection of which is alleged to be error.

The twenty-third assignment of error, which does not show the offer of testimony which was rejected, and the thirty-second assignment of error which does not contain the testimony admitted, are both in violation of Rule 28.

The thirty-first, thirty-seventh and thirty-eighth assignments show no exception taken to the action of the court below in the matters of which complaint is made. These assignments cannot therefore be considered: Com. v. Wilson, 186 Pa. 1; Simpson v. Meyers, 197 Pa. 522.

The fortieth and forty-seventh assignments each contain two exceptions, in violation of Rule 26.

The thirty-sixth assignment shows only one exception, but embraces two points, thus violating Rule 26; and it is also in violation of Rule 28 in that the specification does not quote the evidence which the court refused to strike out.

The remaining assignments relate to the answers to points, and to the admission, rejection or striking out of evidence. We do not deem it necessary to discuss them in detail, as the questions of importance which are pressed in the argument may be considered in the general discussion of the two principal divisions into which the defense falls.

Counsel for appellants argue, in the first place, that they were entitled to binding instructions in favor of the defendants, or to judgment non obstante veredicto, because the claimants failed to prove legal service upon the owner of the premises of notice of their intention to file the lien. In Section 8 of the Act of June 4,1901, P. L. 431, it is provided that “service (of notice of intention) may be personally made on the owner anywhere, but if he cannot be served in the county where the structure or other improvement is situate, such notice and statement may be served on his architect or agent, or the party in possession of the structure or other improvement.” The contention upon the part of the claimants is, that the owner was admittedly not within the county at the time, and that the notice was properly served on J. H. Docking, who was the agent of the owner, and was the party in possession of the structure against which the claim was filed. This question was submitted to the jury, who found by their verdict that service was made on the agent of the owner, or tie party in possession. The only question therefore which can arise upon this appeal in this respect is whether there was sufficient evidence upon this point to justify its submission to the jury.

Under the requirements of the act, the plaintiffs were not bound to prove that the person upon whom the notice was served was the agent of the owner. It was sufficient for them to show that he was a party in possession. This they undertook to do by the testimony of the witness Ingram who served the notice. He said that he went to the Poli Theatre and applied to the ticket seller for information as to the owner. - The evidence shows that the ticket seller was herself in possession, under the owner, of a part of the premises; but, according to the testimony of the witness, she designated a man in the room across the corridor as the manager and representative of the owner. This man was apparently in possession of the room, and when accosted, stated that he represented the owner, who was out of town. When the papers were handed to him he examined them and said that he would give them to the owner. Upon cross-examination the witness said that he asked the man to whom he gave the papers what his name was, and the impression of the witness was that he replied, “J. H. Docking.” We think the evidence was sufficient to sustain a finding by the jury that the person served was in possession of the premises. “As applied to land, the term (possession) may be employed in the sense of occupancy, with which it is nearly if not quite synonymous, and. which has been said to be its ordinary meaning:” 31 Cyc. 925. “Actual possession, or possession in fact, exists where the thing is in the immediate occupancy of the party:” 28 Am. & Eng. Ency. Law (2d Ed.) 238. Where, as in this case, it is shown that the ticket seller, who was the admitted agent and employee of the owner, and was on the premises, in discharge of her duty, stated that the owner, who was a nonresident was out of town, and pointed out a person as “his manager and representative,” and that person who was apparently in possession of a part of the building, acknowledged himself to be the representative of the owner, we are satisfied that the evidence was sufficient'to justify its submission to the jury on the question of whether or not the person was a “party in possession.” It is true that the trial judge submitted to the jury the question whether the notice was served on J. H. Docking. The evidence as to the identity of the man was not very satisfactory. The witness Ingram could only say that it. was his impression that the man served gave his name as J. H. Docking; but he could not be positive as to this. If the service was really made on Docking, it was unquestionably good; for he admittedly was Poli’s agent. But under the provisions of the Act of 1901, it was not necessary to show service on the agent of the owner. Service on a “party in possession” was sufficient. The act further provides that if no architect, agent or other party in possession be found, service may be made by posting the notice on the most public part of the structure or other improvement. Whether or not the man upon whom the notice was served was named Docking, was immaterial. It was a sufficient compliance with the statute if he was a party in possession. That he was such a party was established by the verdict of the jury.

While the principal contract between the owner and Ricca provided that the building should be completed by December 1, 1906, and the contract with claimants contained a similar provision, the work was not actually finished until August 31, 1907, nine months later. The contract between Merritt & Company and Ricca, provides that inasmuch as the latter must finish the building within the time specified, under penalty of fifty dollars per day thereafter, “said Merritt & Co. will be liable to above penalty for all delays caused by them.” Under this provision the defendants sought to charge Merritt & Company with penalties for delay amounting in the aggregate to more than their claim. Clearly, under the language of the contract, the penalties with which Merritt & Company may be chargeable are not for any and all delays in the completion of the work, but only for “delays caused by them.” Plaintiffs contended that the delay was owing to the failure of the principal contractor to erect the walls in time for them to put up the steel work under their contract, and also by his failure to heat the building, to remove ice and water from the cellar, to take down scaffolding, &c. Much contradictory evidence was offered in the effort to fix responsibility for the delay, and questions of fact were raised which could be determined only by the jury. It is also contended on the part of the plaintiffs that the final certificate given by the architect to Ricca, the principal contractor, is conclusive as to the right to recover without deduction for delay. It is very doubtful, however, whether the arbitral clause conferred jurisdiction upon the architect to determine the question of damages for delay. In Ruch v. York, 233 Pa. 36, it was held that under a similar clause no such authority was conferred upon the arbitrator. But we are clear that in the present case the contract imposes no penalty upon the sub-contractors, except for delay caused by themselves. The question whether or not the claimants had caused delay in the completion of the building was submitted to the jury, and the verdict was in favor of the contention of the plaintiffs, although they were not awarded the full amount of their claim. The trial judge also submitted to,the jury the question whether it did not appear from certain declarations and statements of the principal contractor that he had waived compliance with the stipulation of the contract as to the time of completion. There was evidence from which the jury might have found such a waiver, even though they were satisfied that some of the delay was chargeable to plaintiffs. The entire controversy in this respect was one of fact. The verdict rendered by the jury was for a sum somewhat less than two-thirds of the amount of plaintiffs’ claim, showing that, for some reason, a considerable abatement was made by the jury. We find in the record no substantial error, and nothing which would justify a reversal.

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


source: Caselaw Access Project

author: Mr. Justice Stewart,

license: Public Domain

text:
    Lackawanna Trust & Safe Deposit Company, Appellant, v. Gomeringer.

      Equity — Subrogation — Payment by volunteer — Mortgage.
    1. The doctrine of subrogation rests fundamentally on the equitable principle that when a party is required to pay a debt for which another is also liable and which that other in good conscience ought to pay, such payment should operate to invest the party paying with the creditor’s rights and remedies against the other debtor.
    2. Subrogation can be invoked only for the protection of one who has paid the debt of another because he had made himself legally liable in connection therewith. When under no liability himself in connection with the debt he voluntarily pays it, no equity can arise from the transaction calling for protection. In such case payment extinguishes the debt, except as the creditor received the money upon the understanding that the debt is to be assigned to the party paying. In such case the transaction being one of purchase, and not payment, the debt survives.
    3. Where a corporation purchases real estate from two of its stockholders, and assumes the payment of a purchase money mortgage previously given by such stockholders, and subsequently executes a second mortgage, on which it defaults, and thereafter foreclosure proceedings are instituted on the first mortgage to the use of certain stockholders and directors other than the two who had sold the land to the company, who had bought the mortgage, the company in tendering payment of the amount due cannot make as a condition of such payment that the use plaintiffs shall assign the mortgage to a bank which was advancing the money; and if it pays the money into court, it cannot, after the money has been distributed, compel the use plaintiff by rule to make such an assignment.
    4. In such a case, with the ultimate liability resting upon the corporation, no payment by it of the mortgage could give rise to an equity calling for subrogation, for its payment was of its own debt for which it was ultimately liable.
    5. Where in such a case the bank was an entire stranger to the whole transaction without any liability in connection therewith and paid the mortgage at the request of the company, it is a mere volunteer, and no other or higher equity resulted than would have resulted to the company had it paid the debt with its own funds.
    6. In such a case the alleged fact that the officers and stockholders who had bought the mortgage had done so for the purpose of seizing the company’s property for their own use, is wholly irrelevant, inasmuch as they are not asserting any equity, but standing on their legal rights as creditors. The case must be determined not according to their equities, but according to the equities asserted by their opponents, and as it appears that the latter had no equity to subrogation nr otherwise, the case is necessarily at an end.
    Argued Feb. 21, 1912.
    Appeal, No. 32, Jan. T., 1912, by plaintiffs from order of C. P. Lackawanna Co., Nov. T., 1911, No. 54, making absolute rule for subrogation in case of Lackawanna Trust & Safe Deposit Company, Assigned to Carl Lorenz, Frederick Glatz and W. W. Leroy v. Christian Gomeringer and Adolph Haefner, a partnership doing business as the Standard Knitting-Works.
    Before Fell, C. J., Brown, Potter, Stewart and Moschzisker, JJ.
    Reversed.
    Rule for subrogation.

      Newcomb, J., filed the following opinion:
    This motion arises out of a controversy between the Standard Knitting Works, a corporation, hereinafter called the defendant company, and its minority stockholders — three in number, hereinafter called the respondents — who have become dissatisfied with its management. Under assignment dated October 30, 1911, respondents acquired by purchase a judgment which is a first lien against the company’s plant, secured by mortgage thereon. The mortgage is collateral to a bond with confession of judgment given in 1908 by Christian Gomeringer and Adolph Haefner, co-partners, to the Lackawanna Trust & Safe Deposit Company, hereinafter called the trust company. Thereupon the mortgagors conveyed the property, subject to the payment of the mortgage debt, to the defendant company which they had organized. The debt fell due July 3, 1911. October 4, 1911, judgment D. S. B. for the face of the debt and interest from maturity was entered on the bond, and, same day, a fi. fa. ordered by the trust company with notice to defendant company as terre tenant. At that time a contest was pending between the latter and the respondents for stay of execution on a like writ issued at their instance in August on a junior judgment held for their use by the Dime Deposit and Discount Bank which is disposed of by an order in connection with opinion filed herewith. Those proceedings are to No. 691, October term, 1911, and a temporary stay was in force when respondents bought the present judgment. The considerations regarded as decisive in favor of the relief asked for in that case are in a sense controlling here; and it is noted that by agreement of counsel the testimony taken in the other case is made part of the evidence in this.
    The respondents are not only stockholders and creditors of the defendant company, but at the time they bought the judgment against it they were directors. One, indeed, was its president; another, its secretary. In the meantime they have been succeeded by new officers elected at the annual meeting November 8th.
    It will be observed that the notices for that meeting were sent out by the secretary in the usual way ten days in advance. Apparently that was on the eve of their purchase which, as already noted, purports to have been October 30th. Notwithstanding the preparation for the meeting the three absented themselves by agreement on the advice of the president in whose opinion “it wasn’t advisable for us to go to that meeting.” It is not without significance that the assignment was filed November 9th, the day following this meeting at which formal action had been taken looking to the transfer of this security to the County Savings Bank with which arrangements had been made to take it off respondents’ hands as a means of getting further time, as appears by reference to the minutes. It may be it was the prospect of this action that suggested to the president the advisability of staying away. At all events the money being thereupon tendered by the bank in full of debt, interest and costs, on condition that the transfer be made, it was refused by respondents, though a counter offer was made to transfer both of their liens upon payment of both claims; otherwise they asserted their intention to proceed to a sheriff’s sale, though admittedly in that event the corporate enterprise would collapse.
    At the request of the company, as well as of the original obligors, the bank by leave of court then paid the amount of the writ in this case to the sheriff for the use of respondents and at its instance the present rule was granted for subrogation according to the terms of its agreement with the debtors.
    Respondents took the money but they contest the motion for relief.
    It is resisted first on the theory that the bank is a mere volunteer. That supposition is believed to be erroneous. One who pays a debt at the instance of the debtor on the faith of an agreement with him for substitution of the creditor’s lien is not a volunteer: Haverford Loan & Bldg. Ass’n v. Fire Ass’n, 180 Pa. 522.
    It is further contended that, being the equitable owners of the second mortgage held by the Dime Bank, respondents have rights which would be impaired if substitution were allowed. Just how that could be is by no means made clear. They have the money which had been invested in the first lien; as to the other they stand just where they did before. True, their intended foreclosure has been frustrated; but that is not the subject of indemnity at the expense of one who has loaned the money to retrieve the company’s property from the impending sale. To all practical intents and purposes what they are asking is not that their rights shall be left in statu quo, but that their second lien shall be advanced to priority at the cost of the bank.
    If their good faith were in no way called in question the point made touching their rights as junior lien creditors might be pertinent; though there is very good authority for the proposition that in general the holder of such lien has no equity to prevent subrogation as to the first: Home Savings Bank v. Bierstadt, 61 Am. St. Rep. 146 (168 111. 618); Levy v. Martin, 48 Wis. 198 (4 N. W. Repr. 35). Some lack of harmony is noticeable in the cases on the subject. But the rule is believed to be this: The mere fact that a creditor has two liens will not in itself give rise to any presumption of injury or prejudice to the second in case of his losing control of the first by means of substitution. The question, therefore, must be essentially one of fact in any given case. But it becomes unimportant here by reason of the status of respondents and the circumstances surrounding their acquisition of the first lien.
    [They were officers of the defendant company charged with the duty of serving its interests. To the contrary thereof they bought the lien with intent to use it adversely to those interests; they bought admittedly for no other purpose than to seize the company’s property to their own personal use and advantage. True, they were creditors by virtue of the debt secured in the name of the Dime Bank on which execution had been stayed. The character of the relations of trust to defendant presents a feature here entirely analogous to that considered in connection with that execution and need not be again discussed.
    Very likely they have reason to be dissatisfied with their corporate venture and distrustful of its management. One is not unmindful of their contention that they were only seeking to protect themselves against the consequences of mismanagement, etc. But, so long as they retained the badge of office and claimed to exercise its functions, they were the guardians of its estate and could not in good faith compass its death, nor take anything by their unsuccessful attempt. Says the secretary: “We bought for our own individual interests; we didn’t consider the interests of the corporation.”
    Such directors cannot be heard to assert any equity, by reason of their ownership of the second mortgage, to prevent the subrogation now asked for.] (2)
    [The rule to show cause is made absolute and it is ordered that the judgment in this case be marked to the use of the petitioner, the County Savings Bank; and that said bank be subrogated to all and singular the rights of the Lackawanna Trust & Safe Deposit Company, Frederick Glatz, William W. LeRoy and Carl Lorenz, or either of them, in and to the underlying securities, to wit, the bond on which judgment was entered together with the mortgage collateral thereto, recorded in the proper office of this county in Mortgage Book No. 162, at page 411.] (1)

      Errors assigned were (1, 2) portions of opinion quoted above, and (8) in ordering subrogation in favor of the County Savings Bank.

      Samuel B. Price, with him Oole B. Price, for appellants.
    Subrogation will not be granted to the prejudice of another creditor. It will not be allowed to a volunteer: Coonrod v. Kelly, 119 Fed. Repr. 841; Draper v. Ashley, 104 Mich. 527 (62 N. W. Repr. 707); Hoagland v. Green, 54 Neb. 164 (74 N. W. Repr. 424); Gaskill v. Wales, 36 N. J. Eq. 527; Haverford Loan & Bldg. Assn. v. Fire Assn., 180 Pa. 522; Mosier’s App., 56 Pa. 76; Hoover v. Epler, 52 Pa. 522; Wallace’s Est., 59 Pa. 401; Armstrong’s App., 5 W. & S. 352; Webster’s App., 86 Pa. 409; Robinson v. Mailander, 2 Lack. Leg. News 168; Ætna Life Ins. Co. v. Middleport, 124 U. S. 534 (8 Sup. Ct. Repr. 625); Grace v. Kemp, 16 Pa. D. R. 815; Shinn v. Budd, 14 N. J. Eq. 234.
    Directors may take mortgage for money advanced, and enforce collection: Buell v. Buckingham, 16 Ia. 284; Whitwell v. Warner, 20 Vt. 425; Mueller v. Fire Clay Co., 183 Pa. 450; Law v. Fuller, 217 Pa. 439; Mechanics’ Bldg. & Sav. Assn. No. 2’s Est.. 202 Pa. 589; Sicardi v. Keystone Oil Co., 149 Pa. 148.

      Warren, Knapp & O’Malley, for appellees.
    Appellants had no right to buy in this mortgage for the purpose of forcing a sheriff’s sale of the corporate property : Jackson v. Ludeling, 88 U. S. 616; Hallam v. Indianola Hotel Co., 9 N. W. Repr. 111; Huntley v. Goodyear, 182 Pa. 613; Hill v. Frazier, 22 Pa. 320; Bird Clay & Iron Co. v. Humes, 157 Pa. 278; Bedford R. R. Co. v. Bowser, 48 Pa. 29.
    The County Savings Bank is entitled to subrogation: Stiger v. Bent, 111 Ill. 328; Sowers’s App., 15 Alt. Repr. 898; Farmers’ Bank v. Butterfield, 100 Ind. 229; Champlin v. Williams, 9 Pa. 341; Haverford Loan & Bldg. Assn. v. Fire Assn., 180 Pa. 522; Home Savings Bank v. Bierstadt, 168 Ill. 618 (48 N. E. Repr. 161); Emmert v. Thompson, 49 Minn. 386 (52 N. W. Repr. 31).
    It seems that even a volunteer can obtain the right of subrogation by contract: Mosier’s App., 56 Pa. 76; Cottrell’s App., 23 Pa. 294; Wilkins v. Gibson, 113 Ga. 31 (38 S. E. Repr. 374, 84 Am. State Rep. 204); Gans v. Thieme, 93 N. Y. 225; Campbell’s App., 29 Pa. 401; Whiteselle v. Texas Loan Agency, 27 S. W. Repr. 309; Levy v. Martin, 48 Wis. 198 (4 N. W. Repr. 35); Citizens’ Nat. Bank v. Wert, 26 Fed. Repr. 294; Hazle v. Bondy, 173 Ill. 302 (50 N. E. Repr. 671); Miller v. Stark, 61 Ohio 413 (56 N. E. Repr. 11); Huston’s Appeal, 69 Pa. 485; Everston v. Bank, 33 Kan. 352 (6 Pac. Repr. 605); Weimer v. Talbot, 56 W. Va. 257 (49 S. E. Repr. 372).
    April 29, 1912:
   Opinion by

Mr. Justice Stewart,

The record shows these facts. Gomeringer and Haefner, partners, with a view to establishing thereon a manufacturing plant, purchased from the Lackawanna Trust & Safe Deposit Company a lot of ground in the city of Scranton, giving in part payment therefor their bond in the sum of $3,250, secured by mortgage on the premises. Subsequently a corporation was formed under the name of the Standard Knitting Works, of which Gomeringer and Haefner were the principal promoters, to which they conveyed the lot of ground above mentioned, subject to the payment of the mortgage referred to. To supply the corporation with needed funds, certain of the stockholders and directors from time to time endorsed the notes of the corporation, and for their security took from the corporation a mortgage in the sum of $20,000, in the name of H. W. Mumford, trustee, payable in five years after date, the interest thereon payable semi-annually, with the provision that in default of payment of the semi-annual interest for a period of thirty days the entire principal and interest might be declared due and payable, and the mortgage foreclosed at the option of the holder. Mumford assigned the mortgage as additional security to the Dime Deposit & Discount Bank, the holder of the endorsed notes. Default occurring in payment of semi-annual interest due 1st July, 1911, at the expiration of thirty days thereafter, the default continuing, the bank caused execution to. issue and the property of the corporation was accordingly levied upon. On the application of the general manager of the corporation, a rule to show cause why the execution should not be stayed was granted. While this rule was pending and undetermined, the Lackawanna Trust & Safe Deposit Company caused judgment to be entered on the bond accompanying the mortgage given it as part of the purchase money for the lot conveyed to Gomeringer and Haefner, and subsequently conveyed by them to the corporation. Under this execution the property of the corporation was levied on and advertised to be sold. To avoid this sale the corporation authorized its general manager to secure funds necessary to pay off the purchase money mortgage. The latter applied to the County Savings Bank, the real party here in interest. This bank was willing to advance the necessary funds, if it .could be subrogated in the mortgage to the rights of the Lackawanna Trust & Safe Deposit Company, but not otherwise. When application was made to the latter company for its assent to such arrangement, it was discovered that certain directors of the Standard Knitting Works, Lorenz, Glatz and Leroy had become the owners of the mortgage by purchase, after the execution had issued thereon. These parties, against whom it is alleged that they were active in procuring the previous execution on the $20,000 mortgage, in which they were interested to issue, refused to make any assignment of the mortgage. The full amount of debt, interest and cost was tendered them, only on condition however that they would assign their rights in bond, mortgage and execution to the County Savings Bank, which was advancing the money; but the tender was declined because of the condition. Thereupon the money was paid into court, and then paid over to the execution creditors without contest; but at the same time a-rule was applied for and granted requiring Lorenz, Glatz and Leroy to show cause why the County Savings Bank should not be subrogated to the mortgage. This rule was made absolute, and from that decree this appeal has been taken.

It does not concern us at this point of the case to inquire into the relations the appellants sustained to the Standard Knitting Works. For present purpose they may be regarded simply as bona fide creditors. What we are first to consider is the right of the County Savings Bank, as against the resistence of the appellees, holders of a second mortgage, to be subrogated to the rights of the latter in connection with the first mortgage which the bank has paid.

The doctrine of subrogation rests fundamentally on the equitable principle that when a party is required to pay a debt for which another is also liable and which that other in good conscience ought to pay, such payment should operate to invest the party paying with the creditor’s rights and remedies against the other debtor. And this is the mode which equity adopts to compel the ultimate payment by him who in good conscience ought to pay the debt, to the relief of him to whom none but the creditor could ask to pay. A simple statement of the principle is all that is here required; any elaboration of it would be simply a repetition of what has been said so frequently in cases where the doctrine has been discussed and applied. This much is involved in the very definition of the principle, viz, that it can be invoked only for the protection of one who has paid the debt of another because he had made himself legally liable in connection therewith. When one under no liability himself in connection with the debt voluntarily pays it, no equity can arise from the transaction calling for protection. In such case payment extinguishes the debt, except as the creditor receives the money upon the understanding that the debt is to be assigned to the party paying. In such case the transaction being one of purchase and not payment, the debt survives. It is manifest however that the transaction can take this shape only as the creditor assents. All that the debtor can demand of the creditor is a discharge of his liability upon payment. He is in no position to require a transfer of it to another. A volunteer who steps in and pays the debt has no higher rights. So it is. evident that the right to subrogation can result only when the party paying was not a primary debtor, but yet a party legally liable for the debt at the suit of the creditor. In this case the primary debtors were Gomeringer and Haefner, who contracted the indebtedness and secured its payment by their bond and mortgage. But, in accepting a conveyance of the mortgage property, the Standard Knitting Works as between it and its vendors made the debt its own and assumed to protect its vendors: Moore’s Appeal, 88 Pa. 450; Stanhope’s Est., 184 Pa. 414. Here, therefore, while the primary debtors were Gomeringer and Haefner, ultimate liability rested on the Standard Knitting Works by its own undertaking, and had payment been exacted of Gomeringer and Haefner they would have had an equity over against the Standard Knitting Works which would have entitled them to be subrogated to the mortgage. But with ultimate liability resting on the Standard Knitting Works no payment by it of the mortgage could give rise to an equity calling for subrogation, for its payment was of its own debt for which it was ultimately liable. The County Savings Bank was an entire stranger to the whole transaction, without any liability in connection therewith, and when at the request of the Standard Knitting? Works it paid the mortgage no other or higher equity resulted than would have resulted to the Knitting Works had it paid the debt with its own funds. The learned chancellor before whom the case was heard clearly recognized in his opinion the rule.that denies subrogation to a mere volunteer; but held that the hank in paying this mortgage was not a volunteer. He rests his conclusion as to this upon the case of Haverford Loan & Building Asso. v. Fire Assn., 180 Pa. 522. In that case subrogation was allowed, but on facts radically different from these we have here. There, one Dougherty, in the belief that he was.the sole owner of certain lands encumbered by a mortgage, procured from a building and loan association acting in the same belief, a loan which he secured by a mortgage upon the land. At the request of Dougherty, the association applied part of the money in payment of the earlier mortgage. It was subsequently discovered that Dougherty owned but an undivided one-fifth interest in the land as a tenant in common with four others. It was conceded that Dougherty having relieved the common estate of an encumbrance, was entitled to distribution from his co-tenants and could enforce the right by subrogation to the mortgage. The only question was whether the association succeeded to this right in Dougherty. It was in connection with this one question that the expression occurs in the opinion in that case, that the association was not “a mere volunteer,” inasmuch as it had paid the prior mortgage at the request of Dougherty. No more in this case was the County Savings Bank “a mere volunteer,” in the same sense, as against the Standard Knitting Works, for the money was applied in payment of the mortgage at its request.. The distinction is that in the one case Dougherty had an equitable right to contribution as against Ms co-tenants, and because of this fact it was determined that to these rights the association succeeded; while in the present case, the ultimate liability for the payment of the mortgage resting on the Standard Knitting Works, that company could derive no equitable rights from paying its own debt, and could look to no one for contribution or reimbursement. Having no right in itself of this kind no one could claim such right through it. Not only does the case referred to afford no warrant for. the conclusion reached by the learned chancellor, but it may be confidently asserted that in no one of our authorities is any other standing than that of mere volunteer given to one who has paid the debt of another under circumstances similar to those we have here. Out of the many cases supporting the views we have expressed above special reference need only be made to the cases of McCormick v. Irwin, 35 Pa. 111; Dollar Savings Bank v. Burns, 87 Pa. 491; Webster and Goldsmith’s Appeal, 86 Pa. 409.

We come now to the second reason given by the learned chancellor in support of the decree made. He says, “They (the appellees) were officers of the defendant company charged with the duty of serving its interests. To the contrary thereof they bought the lien with intent to use it adversely to those interests; they bought admittedly for no other purpose than to seize the company’s property to their own personal use and advantage. True, they were creditors by virtue of the debt secured in the name of the Dime Bank on which execution had been stayed.....One is not unmindful of their contention that they were only seeking to protect themselves against the consequences of mismanagement, etc. But, so long as they retained the badge of office and claimed to. exercise its functions, they were the guardians of its estate and could not in good faith compass its death, nor take anything by their unsuccessful attempt. Such directors cannot be heard to assert any equity, by reason of their ownership of the second mortgage, to prevent the subrogation now asked for.” The error here is so manifest that it needs no discussion. Admitting the facts to be as stated, what relevancy have they to this issue? The appellants are not asserting any equity, but standing on their legal rights as creditors. The case must be determined not according to their equities, but according to the equities asserted by their opponents. The whole burden is upon the latter, who alone are asking for equitable relief. They have not shown themselves entitled to any equitable interference, as we have tried to make clear, and with their failure in this regard the case was necessarily at an end. The inquiry as to the conduct of appellants as directors of the Standard Knitting Works was not only wholly foreign to the issue that was before the court, but was a matter in which the real party in interest here, the County Savings Bank, could have no possible standing to be heard. The other petitioners would have had standing had they pursued the same course with respect to the execution on the first mortgage as they pursued with respect to the execution on the second., Instead of paying the latter off they asked a stay of execution on the ground that appellants being directors of the Standard Knitting Works had acquired the mortgage and were using it to “compass the company’s death and seize its property to their own personal advantage.” Had they done this and made good their complaint as to the facts, while the equity power of the court could not have divested appellants of their property, it would have been quite sufficient to restrain the exercise of their rights in connection therewith within such limitations as would have prevented their accomplishing a purpose which the law would condemn. The present proceeding afforded the court no such opportunity, and the facts upon which the chancellor so largely relied, were wholly outside the case.

The assignments of error are sustained, and the decree is reversed at the cost of appellees.


text:
    Heckman’s Estate.

      Equity — Specific performance — Mutuality — Agreements to sell real estate — Vendor and vendee — Act of June 16, 1836, P. L. 682.

    1. Where a contract is incapable of being specifically enforced against one party to it, that party is incapable of enforcing it against the other. A contract to be enforced specifically must be mutual both as to remedy and obligation.
    2. Where articles of sale of real estate provide that if the vendee refuse to comply with the terms of the agreement the sum paid down shall be retained by the vendor, “as liquidated damages for the breach; and all other rights under this agreement shall be at an end;” the vendee, after the death of the vendor, cannot enforce specific performance against the latter’s representatives. The only remedy of the vendee in such a case is an action to recover damages.
    3. On an appeal from a decree of the Orphans’ Court enforcing specific performance of contract the appellate court will consider a question neither discussed nor raised in the court below inasmuch as it is required by the Act of June 16, 1836, P. L. 682, to hear, try and determine the merits of such cases and to decree according to the justice and equity thereof.
    Argued Feb. 26, 1912.
    Appeal, No. 231, Jan. T., 1911, by George A. Heckman, Executor of William A. Heck-man, deceased, from decree of O. C. Berks Go., Jan. T., 1911, No. 31, enforcing specific performance in Estate of William A. Heckman, deceased.
    Before Fell, C. J., Beown, Mesteezat, Elkin and Stewaet, JJ.
    Reversed.
    Petition by vendee for specific performance of contract to sell real estate. Before Bland, P. J.
    The facts are stated in the opinion of the Supreme Court.

      Error assigned was the decree of tbe court.

      J oseph R. Dickinson, for appellant.
    Appellant could not have specifically enforced and there is therefore no mutuality of remedy: Bodine v. Glading, 21 Pa. 50; Meason v. Kaine, 63 Pa. 335; Ballou v. March, 133 Pa. 64.
    April 29, 1912:

      Stephen M. Meredith, for appellee.
    Where a court of equity has general jurisdiction of the subject-matter, and has assumed jurisdiction, the defendants cannot object for the first time in the Supreme Court that the plaintiffs did not allege that they had exhausted their legal rights against the defendants: People’s Nat. Bank of Pittsburgh v. Loeffert, 184 Pa. 164.
   Opinion by

Mr. Justice Stewart,

This was a proceeding in the Orphans’ Court begun by the appellee here, John Witman, a vendee, to compel specific performance of a written contract entered into between himself and one William A. Heckman, whereby the latter covenanted to sell and convey to the former a certain tract of land in Bobeson township, Berks county. Heckman having died, his personal representative was the party proceeded against. A decree for the specific performance of the contract followed, from which decree this appeal is taken. The case presents a single question, and it is only necessary to indicate the particular features of the contract, which are important in connection therewith. The contract was executed 21st October, 1910. It provides that the deed was to be delivered and possession given on or before 11th January, 1911. The consideration to be paid by Wit-man was $2,800, in manner following, $200 on the execution of the contract — acknowledged to have been paid —$1,300 on delivery of the deed, and the balance on 1st April, 1911, to be secured by mortgage on the premises. Then follows this provision: “And in the event of the second party refusing to comply with the terms of this agreement the sum paid down shall be retained by the said William A. Heckman as liquidated damages for the breach; and all other rights under this agreement shall be at an end and the said William A. Heckman, for the true performance of all the covenants of this agreement, acknowledges himself to be bound to the said party of the second part in the sum of two hundred dollars to be recovered as liquidated damages for his failure to perform the covenants herein.” With this provision in the contract, could Heckman or his representative, Heckman having died, have required specific performance against Witman, had the latter defaulted ? If in that case specific performance must have been denied, it necessarily follows that it must be denied here; for nothing is better settled than the rule that where a contract is incapable of being specifically enforced against one party to it, that party is incapable of enforcing it against the other. A contract to be enforced specifically must be mutual both as to remedy and obligation: Bodine v. Glading, 21 Pa. 50. Had the contract in this case provided simply for the forfeiture of the hand-money paid by the vendee in case of the latter’s failure to keep his covenants, the question then would have been whether the provision for the forfeiture of the f200 was intended to secure the performance of the contract, or whether it was one of two things over which the vendee had the right of election, the performance of his covenants or the loss of the money paid. If the former, the right of the vendor to enforce performance would remain; otherwise, if the latter. But, in view of the provision in the clause above quoted, that in case forfeiture occurs, “all rights under this agreement shall be at an end,” no such question can here arise. Had the default been that of the vendee, and the vendor had undertaken to specifically enforce, he would at once have been met with the answer from the vendee, “All rights under the contract are at an end. I cannot recover back the money I paid you; no more can you demand anything further of me; our contract has been fully executed in one of two ways expressly provided for.” What reply could be made to this, or what possible ground for contention could remain? There can be no other conclusion than that the parties to this contract mutually waived their right to a specific performance of it, and limited the remedy to recovery of damages.

It should be said in justice to the learned judge of the Orphans’ Court that this feature of the case was suggested for the first time on the hearing of this appeal. The point was neither discussed nor raised in the court below. We have considered it here only because the law requires it of us. The Act of June 16, 1836, P. L. 682, makes it our duty in all cases of appeal from the several Orphans’ Courts, to hear, try and determine the merits of such cases, and to decree according to the justice and equity thereof. The enforcing of specific performance of a contract is a matter resting exclusively in equity, and is allowed only when the equitable right to it has been made to appear. In this case it is evident that no such right existed, and the petition should have been dismissed. The first assignment of error complains of the decree itself. It is sustained, and the decree accordingly reversed at cost of appellant.


author: Me. Justice Brown,

text:
    City of Reading v. United Traction Company, Appellant.

      Street railways — Rate of fare — Strip tickets — Ordinance— Agreement — Equity.
    Where a street railway company and a city enter into negotiations relating to the construction of an extension or loop between two of its lines, and as a result of the negotiations an ordinance is passed granting permission for the extension and providing that “the rate of fare shall not exceed five cents for a single fare, or six tickets for twenty-five cents,” this being the rate of fare prior to the passage of the ordinance, neither the street railway company, nor another company to which it has leased all its lines, can subsequently abolish the sale of six tickets for twenty-five cents to or from points on the two lines for which the extension or loop was allowed by the city.
    Argued Feb. 27, 1912.
    Appeal No. 58, Jan. T., 1912, by defendants from decree of C. P. Berks Co., Equity Docket, 1911, No. 1053, on bill in equity in case of City of Reading v. Reading Transit Company, United Traction Company and Front and Fifth Street Railway Company.
    Before Fell, C. J., Brown, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.
    Bill in equity for an injunction. (See Reading v. United Traction Co., 232 Pa. 303.)
    Endlich, P. J., found the facts to be as follows:
    1. In 1906 the entire street railway system of the city of Reading, made up of a number of lines belonging to independent companies, was, under leases executed by them to the United Traction Co., operated as a whole by the latter, including a line on Front and certain other streets belonging to the Front & Fifth Street Railway Co., and another on Schuylkill avenue belonging to the Reading City Passenger Railway Co.
    2. Complaints made to the city authorities by residents in the vicinity of a turn-out on Schuylkill avenue near Buttonwood street about the noise occasioned at night by the reversing of cars were by those authorities brought to the attention of the United Traction Co., with a request to have the nuisance remedied.
    3. In response to this the city was by Dr. Walter A. Rigg advised, not only that the cause of complaint would, as far as practicable, be abated, but that it might be entirely removed and at the same time the convenience of the traveling public greatly enhanced by the construction, with the city’s permission, of a track connecting the two lines of railway above mentioned along and upon two intervening blocks of Windsor street, the two lines thus connected forming a so-called “loop.”
    4. This suggestion being reported to the City Councils, the matter was referred to the Railway Committee for consideration. Between it and Dr. Rigg as representing the railway companies interested there were various consultations and communications, — among the latter a letter from Dr. Rigg to the chairman of the committee, dated Oct. 6, 1906, and written upon the letter-head of the United Traction Co., in which, in the event of the grant of permission to construct the “loop,” it was stated (1) that the turn-out should be removed, (2) that there should be “no increase of fare,” and (3) that the “fare limit” should be Buttonwood street, a single fare carrying a passenger from any part of town to any point on Schuylkill avenue or around the “loop” to Front and Buttonwood streets, and as to incoming passengers a single fare being good from Schuylkill avenue and Buttonwood street and points beyond, around the “loop” to any part of the city, — the fare charged at the time by the United Traction Co. for a single trip on any part of its system being 5 cents or a ticket obtainable at the option of passengers by purchase from the conductors on the cars in strips of 6 tickets costing 25 cents.

      5. The committee on Oct. 7, 1906, largely actuated by the letter just adverted to, reported to councils upon the matter referred to it as one between the city and the United Traction Co., recommending the grant of permission to make the connection suggested as above detailed and the passage of an ordinance for that purpose. Accompanying the report was the draft of an ordinance handed to the committee by Dr. Bigg, and so drawn as to grant the privilege in question to the Front & Fifth Street Bailway Co., it having been explained to the committee by Dr. Bigg that the United Traction Co. was an operating and not a constructing company, and that therefore the grant must be made to the former. The ordinance was in due course passed with the addition of certain provisions, among which was that embodied in Sec. 2 thereof, viz, “That the rate of fare shall not exceed five (5) cents for a single fare, or six tickets for twenty-five (25) cents,” — and as passed was approved Dec. 8,1906.
    6. Within a few days thereafter the Front & Fifth Street Bailway Co. filed in the office of the city clerk its formal acceptance, required by the ordinance, of the same and “all the conditions thereof.” Thereupon the connecting line was constructed -and at once passed under the control and operation of the United Traction Co. The stipulations contained in the letter of Oct. 6, 1906, relative to the removal of the turn-out on Schuylkill avenue, the fare limit and the fare itself were carried out, the United Traction Co. accepting for a single fare from Schuylkill avenue and Buttonwood street around the “loop” to any part of the city 5 cents in cash or one of 6 tickets sold in strips for 25 cents.
    7. Throughout the negotiations and transactions above detailed the city of Beading conceived itself to be dealing with the United Traction Co., as the company in control of the entire street railway system, representing the underlying corporations and in the operation of the system to be perfected by the “loop” agreeing to be bound by tbe stipulations and conditions inducing and attached to tbe grant of permission to construct it.
    8. Tbe precise official connection of Dr. Rigg with tbe United Traction Co. and its lessor corporations, including tbe Front & Fifth Street and tbe Reading-City Passenger Railway Cos., is not established by tbe evidence. Whilst apparently not existing or defined by any explicit employment of him as an agent with designated powers of any of these companies, tbe fact nevertheless is that in tbe transactions and negotiations concerning tbe “loop,” as well as in other previous matters, be, with their knowledge and acquiescence, acted as tbe general representative of tbe United Traction Co., and through it of its various lessor corporations, in their dealings with tbe city; that bis authority in every instance and particular so to act was implicitly ■ recognized by all said companies as well as assumed by tbe city; and that tbe United Traction Co. and tbe Front & Fifth Street and Reading City Passenger Railway Cos. accepted tbe benefits and advantages secured for them from tbe city by him upon the faith of tbe representations, stipulations and conditions made or agreed to by him in their behalf.
    9. About March 18, 1910, tbe United Traction Co. discontinued tbe sale of strip tickets over its entire system, collecting a straight 5 cent fare from passengers, tbe fare limit above mentioned remaining unchanged. On March 21, 1910, tbe mayor of tbe city addressed to the president of said company a letter calling bis attention to tbe alleged duty of tbe company to sell strip tickets over its entire system, requesting compliance therewith, and advising him of tbe city's purpose in tbe contrary event to institute proceedings to compel it. Tbe answer of tbe president of tbe company to this letter, dated tbe same day, denied tbe existence of tbe duty on tbe basis of Dr. Rigg's letter of Oct. 6, 1906. Thereupon, on March 30, 1910, tbe city filed a bill to compel the sale of tickets over all the railway lines in the city. After its dismissal by the Supreme Court, July 6,1911, this bill was filed on Sept. 22, 1911.
    10. By a 999 year lease dated as of Apr. 1, 1910, acknowledged May 5, 1910, and recorded Aug. 17,1910, the United Traction Co. leased its entire street railway system, including the “loop,” to the Reading Transit Co. At the date of the filing of this bill the company in actual control of the street railways in the city of Reading, and operating them, was the Reading Transit Co.
    11. The operation of the “loop” in connection with the remainder of the system is as follows: cars leaving the car-barn on North Ninth street come in Ninth to Penn, down Penn to Fourth, out Fourth to Washington, down Washington to Front and Schuylkill avenue, out Schuylkill avenue and around the “loop” over the tracks of the Front & Fifth Street Railway Co. to Front and Schuylkill avenue, in Washington to Second, in Second to Penn, up Penn to Tenth and out Tenth to the car-barn, — or from Second up Penn to Nineteenth and Perkiomen avenue, and thence starting another circuit down Penn to Fourth, etc. In either case the circuit, covered by two fares, is about 7 miles, the trip in one direction covered by one fare being about 3¡H> miles, of which 5,850 feet are over tracks of the Front & Fifth Street Railway Co., and about 1,300 of this distance over the extension authorized by the ordinance of Dec. 8, 1906.
    12. The travel beginning and ending upon the Front & Fifth Street line is insignificant; that beginning at Schuylkill avenue and Buttonwood street, or points beyond, and ending at points along Penn street or beyond, very heavy.
    LEGAL CONCLUSIONS.
    A — The suggestion of the construction of the “loop” as something to be permitted by the city of Reading having been made by Dr. Rigg in the interest, not only of the Front & Fifth Street Railway Co., but also of the United Traction Co. as the company operating the entire street railway system of the city and with a view to its more convenient operation, — the negotiations relative thereto with the city authorities having been conducted by him in the interest of both companies with their acquiescence, — the city having treated him and with him as their authorized representative therein and acted upon his statements and promises as made in their behalf, — said companies having accepted the fruits of his dealings and negotiations and representations with and to the city, and at the time and for a number of years thereafter treated them as binding, — and the president of the United Traction Co., having subsequently so recognized his undertakings, — neither company can now be heard to dispute, on the ground of want of antecedent authority in him to represent said companies, either the fact that from the inception of said negotiations, etc., he did represent them and that through him as their representative they were both parties to said negotiations, etc., or the binding force as to both of any undertakings made by him on their behalf in the premises, which entered as an inducement into the grant of the privilege to construct the “loop.”
    B — In the light of the nature and scope of said undertakings, the circumstances surrounding the introduction and passage of the ordinance approved Dec. 8, 1906, the situation of the several parties concerned, and the manifest objects aimed at, the grant by the city of Reading of permission to construct the “loop” must be regarded as a transaction not only between the city and the Front & Fifth Street Railway Co. as the constructing company, but also between the city and the United Traction Co. as the company operating the entire street railway system of the city including the “loop,” and the terms and provisions of said ordinance are to be understood and given effect accordingly.

      C — So understood, the grant of said permission and the acceptance of the terms thereof involved a contract between both said companies and the city to the effect that in the operation of the railway lines including the one circuit the extension perfecting the “loop,” the fare-limit should be the intersection of Schuylkill avenue and Buttonwood street; that a fare paid at that point or any point beyond should entitle the passenger to carriage to any part of the city reached by the car on which it was paid or any to which he might be transferred; that such fare should be, at the option of the passenger, 5 cents cash or one of 6 tickets to be sold him on the car for 25 cents; that payment of his fare by ticket should entitle him to the same transportation as payment by 5 cents in cash; and that this contract established a condition of the grant of the permission to construct the “loop,” to be performed in its operation, as such accepted by the Front & Fifth Street Railway Co. and impliedly assented to by and obligatory upon any company operating said line, immediately or mediately under the Front & Fifth Street Railway Co., in connection with any portion of the remainder of the street railway system of the city, with said “loop” forming and operated as a continuous circuit, and therefore binding upon the Reading Transit Co.
    D — The plaintiff is entitled to a decree enforcing the contract and condition mentioned in the foregoing conclusion in accordance with their terms and effect as there stated and with prayers I and 2 of plaintiff’s bill.
    E — The costs of this proceeding are to be paid by defendants.

      Error assigned was decree in favor of the plaintiff.

      Isaac Hiester and G. H. Ruhl, with them R. L. Jones, for appellants.
    Corporate rights are not to be frittered away by loose and unauthorized declarations, made by persons who, at the time, had no authority to bind the corporation; and this principle applies as well to individual directors and employees of the corporation as to strangers: Allegheny County Workhouse v. Moore, 95 Pa. 408; Investment Co. of Phila. v. Eldridge, 175 Pa. 287; Junction R. R. Co. v. Penna. R. R. Co., 2 W. N. C. 277; Twelfth St. Market Co. v. Jackson, 102 Pa. 269; Copeland v. Stoneham Tannery Co., 142 Pa. 446.
    April 29, 1912 :
    Tickets, commutation books, etc., like transfers at certain points are details of management which the company may alter from time to time as circumstances require subject in this case to the expressed limitation of the price of tickets: Philadelphia v. Philadelphia Rapid Transit Co., 224 Pa. 544; Phila. v. Phila. Rapid Transit Co., 228 Pa. 325.

      Henry P. Reiser, City Solicitor, for appellee.
    In construing the ordinance, such construction should be made strictly against the company exercising the same and in favor of the public: Edgewood Borough v. Scott, 29 Pa. Superior Ct. 156; Southwestern State Normal School, 213 Pa. 244; Johnson v. Philadelphia, 60 Pa. 445; West Bloomfield Township v. Detroit United Railway Company, 146 Mich. 198 (109 N. W. Repr. 258).
   Opinion by

Me. Justice Brown,

The question before us in Reading v. United Traction Company, 232 Pa. 303, was whether the right of the Reading Transit Company, the successor of the United Traction Company, to discontinue the sale of strip tickets at the rate of six for twenty-five cents, good on all of its lines, had been taken from it by the ordinance of December 8, 1906, and it was held that such right had not been affected by the ordinance. In so holding we said that nothing in the letter from Dr. Rigg to the chairman of the railways committee of the city councils “nor in the ordinance can be construed into an agreement by the United Traction Company to continue the general sale of strip tickets, and its right was, and the right of the Reading Transit Company, its successor, is, to charge a fare of five cents for every passenger riding on its lines, except as it may be committed by the ordinance of December 8,1906, to continue to sell six tickets for twenty-five cents, good to or from points on the Schuylkill avenue and Front and Fifth street railway lines. That question, however is not to be passed upon until it is properly raised.” The question which we declined to consider in that case, because it was not before us, was properly raised -in this proceeding, and, in passing upon it, the learned chancellor below regarded it, as we intended it to be regarded, if raised, as an open one. He disposed of it just as we should have disposed of it, if it had been before us on the former appeal, and to his correct legal conclusions, following his properly found facts, but a word need be added.

The United Traction Company was bound by the provisions of the ordinance of December 8, 1906, and its lessee and successor, the Reading Transit Company, is now so bound. That ordinance provides that “the rate of fare shall not exceed five (5) cents for a single fare, or six tickets for twenty-five (25) cents.” These words certainly mean something; but in their breach of good faith with the city of Reading, those in control of the affairs of the Reading Transit Company now assert that they mean nothing. The ordinance related to the Front and Fifth Street and Schuylkill Avenue lines. At the time it was passed the rate of fare on these lines was five cents, or a passenger, at his option, could purchase six tickets for twenty-five cents, each of which gave to him the same transportation rights and privileges as were given by paying a five-cent fare. The negotiations between Dr. Rigg and the chairman of the street railways committee of councils which led to the passage of the ordinance related to the two lines just mentioned, and it is trifling with judicial patience to contend that both parties so negotiating did not understand and intend that, upon the completion of the loop, the mode of paying a fare should remain unchanged on the two lines and should continue to give a passenger the same transportation rights. The ordinance passed, in pursuance of these negotiations became a contract between the city and the two lines and their lessee, and a fare paid on either line by a passenger with one of six tickets issued to him, at his option, as provided by the ordinance,'entitles him to the same transportation as if he had paid a cash fare of five cents. No other conclusion could have been reached by the learned president judge below under the undisputed facts in the case, and the decree is affirmed at appellants’ costs.


author: Me. Justice Beown,

text:
    Crawford, Appellant, v. Dollar Savings Fund & Trust Company.

      Principal and agent — Stock brokers — Be-hypothecation of securities of customer — Stock — Certificate of stock — Blank assignment.

    1. Where a stock broker calls upon a customer for additional margin, and the latter instead of putting up the cash, gives to the broker certificates of stock, and instead of signing the blank power printed on the back of the certificates, executes and delivers with the certificates in accordance with the custom of brokers, blank powers on other pieces of paper, and the broker pledges the certificates to a bank, the bank is under no duty to make inquiry as to the authority of the .broker to pledge the securities, because the assignment printed on the back of the certificate had not been signed by the owner.
    2. In such a case the bank may hold the certificates as an innocent purchaser for value as against the customer of the broker, although at the time they were pledged they were received as additional collateral for a pre-existing indebtedness of the broker, if it appears that thereafter the bank relying upon the security of the stock thus pledged, surrenders other valuable securities to the broker without receiving anything in lieu of them,

      Argued Nov. 2, 1911.
    Appeal No. 230, Oct. T., 1911, by plaintiff from decree of C. P. No. 1, Allegheny Co., June T., 1908, No. 838, dismissing bill in equity in case of William J. Crawford v. Dollar Savings Fund & Trust Company.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Bill in equity for an injunction and for the delivery of certificates of stock. Before Macfarlane, J.
    The facts are stated in the opinion of the Supreme Court.

      Error assigned was decree dismissing the bill.

      John P. Eibnter, with him Walter Lyon, for appellant.
    The release of the Plate Glass Company’s stock did not make the defendant a purchaser for value, without notice, of Crawford’s stock: Cummings v. Boyd, 83 Pa. 372; Gould v. Farmers’ Loan & Trust Co., 23 Hun. 322.
    The defendants are not purchasers for value without notice: Bughman v. Central Bank, 159 Pa. 94; Tainter v. Hyneman, 6 Phila. 202; McNeil v. Tenth Nat. Bank, 46 N. Y. 325.
    The appellee, having received this stock as collateral for a pre-existing indebtedness, is not a holder for value in due course: King v. Mellon Nat. Bank, 227 Pa. 22; Ashton’s App., 73 Pa. 153; Callendar v. Kelly, 190 Pa. 455; Morse v. Godfrey, 3 Story 364; Cummings v. Boyd, 83 Pa. 372; Royer v. Keystone Nat. Bank, 83 Pa. 248; Linnard’s App., 3 Atl. Repr. 840; Gould v. Farmers’ Loan & Trust Co., 23 Hun. 322; Weaver v. Barden, 49 N. Y. 286; McNeil v. Tenth Nat. Bank, 46 N. Y. 325; Tompkins v. Morton Trust Co., 91 App. Div. 274 (86 N. Y. Supp. 520); Bank of New York v. Vanderhorst, 32 N. Y. 553; Goodwin v. Mass. Loan & Trust Co., 152 Mass. 189 (25 N. E. Repr. 100).

      April 29, 1912:

      Willis F. MeCooh, with him B. J. Jarrett and Jas. W. Collins, for appellee.
    Considering the circumstances and the purposes of the delivery of the shares of stock in controversy by plaintiff to Whitney & Stephenson- he conferred upon them the right of re-hypothecation: Markham v. Jaundon, 41 N. Y. 235; Skiff v. Stoddard, 63 Conn. 198; Furber v. Dane, 203 Mass. 108 (89 N. E. Repr. 227).
    The subsequent release by defendant to Whitney & Stephenson, of securities pledged, at less than their value, and its release of the Pittsburgh Plate Class stock without any payment, relying on the security of the stock in controversy, constitutes a consideration and makes defendant a holder for value of said coal stocks: Linnard’s App., 2 Sadler 195.
   Opinion by

Me. Justice Beown,

Whitney & Stephenson, a firm of brokers, doing business in the city of Pittsburgh, were carrying certain stocks for the appellant. On March 17, 1907, they called upon him for more margin. He was not able to give them any money, but they agreed to take from him, as additional security, four hundred shares of the capital stock of the Pittsburgh & Westmoreland Coal Company, for which he held four certificates for one hundred shares each. He delivered these certificates to the brokers, but did not sign the assignment and power of attorney printed on the back of each. He, however, gave them, along with the certificates, four blank powers of attorney, which he had duly signed. On March 18, the day before the brokers received the certificates of stock from the appellant they were called upon by the appellee to give it additional collateral for a large loan it was carrying for them, and, on the same day they received the four certificates of the Pittsburgh & Westmoreland Coal Company stock from the appellant, they re-hypothecated them to the appellee, pinning to each certificate one of the blank powers of attorney signed by Mm. The court below found that there was nothing in the relation existing between the appellant and his brokers which authorized this re-hypothecation of his securities, and, as the appellee had received them from the brokers for their pre-existing indebtedness to it, the delivery of the stock was without consideration, and the appellee was, therefore, not a holder for value; but the court further held that, as the appellee, in reliance upon its right to hold the stock in controversy for the indebtedness of Whitney & Stephenson, had subsequently surrendered to them certain securities at less than their market value and twenty shares of certaiu stock without receiving anything therefor, it had become a holder for value of the four certificates, and appellant’s bill, praying for a delivery of the same to him upon payment to the appellee of $56.84, the amount of his indebtedness to the bankrupt firm of brokers, was dismissed.

The first contention-of the appellant to be noticed is that the appellee ought to have made inquiry as to the authority of Whitney & Stephenson to pledge the securities, because the blank assignments and powers of attorney printed on the certificates had not been signed by the appellant, and the undated blank power of attorney pinned to each certificate was sufficient to put the appellee on notice that the brokers had no right to pledge the stock. ■ If the blank assignments and powers of attorney on the backs of the certificates had been signed by the appellant, there would have appeared on each of them the indicia of ownership in the brokers who held them, and the delivery by the brokers to a purchaser would have passed a good title. The appellant is estopped to deny that this is not true of the four certificates as he pledged them to his brokers. He signed the four blank powers of attorney and delivered them to the brokers along with the certificates of stock, with the undoubted intention of clothing his brokers with power to sell or transfer the stock. He intended that the blank powers of attorney should be as effectual for the purpose of transferring title as if he had signed the assignment and power of attorney on the back of each certificate, and, when they were pinned to the certificates by the brokers, the very use was made of them that the appellant intended, and the appellee, in dealing with the brokers, was justified in so presuming. Another reason why the appellee was not bound to inform itself as to the authority of Whitney & Stephenson to pledge the stock was, that the custom — quite general, especially on brokers’ accounts — in the banking institutions of this country, is to have a power of attorney on a separate piece of paper, so that, when the debt for which the stock is pledged is paid, the certificate can be redelivered to the owner and the power of attorney destroyed, thus leaving the certificate without any evidence upon it of its ever having been pledged or transferred. The second conclusion of law by the court below was correct, and the eleventh assignment of error is dismissed.

At the time the appellee received the certificates of stock from Whitney & Stephenson it received them as additional collateral for a pre-existing indebtedness of the brokers, and, not having been given or surrendered anything for them, it was not a holder for value: Ashton’s Appeal, 73 Pa. 153; Maynard v. Sixth National Bank of Philadelphia, 98 Pa. 250; Callendar v. Kelly, 190 Pa. 455; King v. Mellon National Bank, 227 Pa. 22. Whether, as is contended by counsel for appellee, under the terms of the agreement between Whitney & Stephenson and the appellee, relating to its loan to them, it became a holder for value as soon as it received the stock, we need not decide.

When the appellee received appellant’s stock, the situation continued to be just the same as if it had remained in the hands of the brokers, so far as the rights of the appellant were involved, and that situation continued as long as the appellee did not become a holder for value; but, as the court below found, relying upon the security of this stock, which Whitney & Stephenson had pledged to it with all the indicia of ownership in themselves, it subsequently returned to them securities at less than their market value, and, on October 10, 1907, gave up twenty shares of Pittsburgh Plate Glass Company stock, without receiving anything in lieu of it. If these securities had been surrendered by the appellee at the time the brokers pledged appellant’s stock to it, he could not now assert any claim to the same in the hands of the appellee: King v. Mellon National Bank, supra. What the brokers might have done with the stock of March 19, 1907, they unquestionably could subsequently have done; and, while it is to be conceded that the appellee did not become a holder for value at the time it received the stock, why did it not subsequently become so? Until it did become a holder for value, its custody of the stock was, in legal contemplation,, but the custody of Whitney & Stephenson, so far as the rights of the appellant were concerned; but what was to prevent it from afterwards becoming a holder for value? If it had returned the stock to the brokers, and they had subsequently called upon it and asked to substitute the same stock for other securities which they asked to be released, and their request had been granted, the appellee would certainly have become a holder for value, and the claim of the appellant’s ownership in the stock could not prevail against it. This, in effect, is just what was done. Holding in its hands certificates of stock with all the indicia of ownership in Whitney & Stephenson, who had pledged it, the appellee according to the uncontradicted testimony of its secretary and treasurer, released and surrendered to them securities of a market value of $16,435 in excess of what they paid for the release of the securities, and later it surrendered to them twenty shares of stock without getting anything in return. When the first of the securities were returned to the brokers by the appellee, at their request, in reliance upon the stock of the appellant as security for their indebtedness, the transaction was, in legal contemplation, the same as if the brokers, up to that time, had continued to hold the stock, for, in the interval, as just stated, the custody of the appellee was but their custody, and the appellant having clothed them with all the indicia of ownership, they could have pledged it to any one for value. This is what was done with it by the brokers when they asked for a release of other securities belonging to them, which were returned to them by the appellee, in reliance upon its right to hold the four certificates in dispute. There is no recognizable distinction, so far as the rights of the appellant are concerned, between such a transaction and a pledge that the brokers might have made of his stock on March 19, 1907. In principle they are identical.

As to the contention of the appellant that, if the appellee is to be permitted to hold his stock, it can do so only to the extent of protecting itself up to the value of the securities which it surrendered, a sufficient answer is that there was no evidence of the actual value of the stock in controversy, and the appellant’s admission is that there was no evidence of the value of the twenty shares of Pittsburgh Plate Glass Company stock.

The assignments of error are all overruled and the decree is affirmed with costs.


author: Mr. Justice Brown,

text:
    Countess de Noailles’ Estate.

      Taxation — Collateral inheritance tax — Trusts and trustees— Situs of securities — Foreign resident.

    Where a widow domiciled in France dies without lineal descendants, the State of Pennsylvania cannot collect a collateral inheritance tax on bonds, mortgages and other securities held by a trustee in Pennsylvania, under a deed of trust executed sixty years before the decedent’s death, where it appears that the deed created a mere, passive trust and that the bonds, mortgages and securities, seven-eighths of which represented accumulations, were always at the decedent’s absolute disposal, and constituted part of her personal estate which passed directly to the ancillary administrators of her estate in Pennsylvania, and not to any beneficiaries, under the deed of trust.
    Argued March 18, 1912.
    Appeal, No. 325, Jan. T., 1912, by the Commonwealth of Pennsylvania, from decree of O. C. Phila. Co., April T., 1911, No. 739, dismissing exceptions to adjudication in Estate of Anna Maria Helena (Countess de Noailles) deceased.
    Before Fell, C. J., Brown, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Exceptions to adjudication.
    The facts are stated in the opinion of the Supreme Court.

      Errors assigned were in dismissing exceptions to adjudication.

      J. Lee Patton, for appellant.
    It has long been held that the situs of intangible personal property held by resident trustees, for nonresident cestui que trustent, is in that state, where the trustee in whom is vested the legal title and ownership, is domiciled: Guthrie v. Railway Co., 158 Pa. 433; Price v. Hunter, 21 W. N. C. 306; West Chester School District v. Darlington, 38 Pa. 157; Carlisle Borough v. Marshall, 36 Pa. 397; Orcutt’s App., 97 Pa. 179; Com. v. Kuhn, 2 Pa. C. C. R. 248; Lewis’s Est., 203 Pa. 211; Singer v. Guarantee Trust & Safe Deposit Co., 24 Pa. Superior Ct. 270.
    April 29, 1912:

      John G. Johnson, with him Maurice Bower Saul, for appellee.
    It is argued by the Commonwealth that personalty can have a situs other than its legal situs, for the purpose of taxation. The authorities, however, negative the Commonwealth’s contention. As early as 1881 the court denied the power of the Commonwealth under existing laws to tax personalty of a nonresident: Orcutt’s Appeal, 97 Pa. 179; Shoenberger’s Est., 221 Pa. 112; Lines’s Est., 155 Pa. 378; Williamson’s Est., 153 Pa. 508; Coleman’s Est., 159 Pa. 231; Handley’s Est., 181 Pa. 339; Vanuxem’s Est., 212 Pa. 315; Dalrymple’s Est., 215 Pa. 367; Lamberton’s Est., 440 Pa. Superior Ct. 548.
   Opinion by

Mr. Justice Brown,

The domicile of the decedent at the time of her death was in Prance. She was a widow and left no lineal descendant. She owned real estate in this state which was appraised at $17,500, and, as there was no conversion of it into personalty by the terms of her will, its liability to collateral inheritance tax was conceded. In 1853 she placed a certain fund in the hands of trustees in the city of Philadelphia, and when she died it was held by their successors. Seven-eighths of it represented accumulations, and the whole of it consisted of bonds, mortgages and obligations of individuals and corporations. Prom the disallowance of the Commonwealth’s claim to collateral inheritance tax on this personal fund it has appealed.

The deed of trust executed by the decedent does not seem to have been before the court below, and we are ignorant of its terms and provisions. It does appear, however — apparently by admission — that she could have terminated the trust at any time and taken possession of all the trustees held for her. Aside from mere compensation for their services, they had no beneficial interest in the fund, even though the legal title to the securities may have been in their names. During all the nearly sixty years’ duration of this passive trust the decedent was the real owner of the securities, and she died as such owner while domiciled in a foreign country. Up to the time of her death everything held by the trustees was at her absolute disposal and constituted part of her personal estate. At the time of her death what was the situs of this fund? If it was in Prance, which was her home, it is not taxable here. The earnest contention of the learned counsel for the Commonwealth is that its situs was here. As just stated, we do not have the benefit of any light which the deed of trust might throw upon this question, and, with the admitted right of the decedent to absolutely control the fund at all times, was it, at the time of her death, within the rule or maxim, mobilia sequuntur personam? We are of opinion that it was.

While as a general rule the situs of personal property follows the owner, some species of personalty may, for particular purposes, have a situs distinct from the legal one. This was recognized in Small’s Estate, 151 Pa. 1, because the property of the limited partnership in this state, in which the foreign decedent held stock, “was largely made up of lands, merchandise, flour, grain and other personal property which had a visible and tangible existence and an actual situs in this state.” Great reliance seems to be placed on this case as an authority sustaining the claim of the Commonwealth for collateral inheritance tax on the bonds, mortgages and obligations which were held here for the Countess de Noailles; but, in relying upon it, counsel seem to overlook what was further said by Mr. Chief Justice Sterrett : “As a general rule, intangible personal property of a nonresident, such as bonds, mortgages and other choses in action, is governed, as to its situs, by the fiction of law above noticed, and hence such property is not subject to collateral inheritance taxation under our laws, because it is not ‘situated within this state.’ ” Lewis’s Estate, 203 Pa. 211, is also pressed upon us as a controlling authority for the Commonwealth, and it is proper that we should show it is not. We have heretofore said of it that it was decided upon its own peculiar facts and is not to be stretched: Shoenberger’s Estate, 221 Pa. 112. One of the two reasons given by the court below in Lewis’s Estate for holding that it was liable to collateral inheritance tax here was that, as the executor and legatees had requested and consented that a complete administration and distribution of the whole estate comprehended in the account should be had in Luzerne county, under Pennsylvania laws, by a Pennsylvania court, and not as is usual in mere ancillary accounting, transmitted to a foreign forum, they could not have the benefit of this departure from the general rule without taking that benefit with its burdens. It was for this reason that the decree was affirmed. The first reason given by the court below was not sustainable, as clearly appears from what was decided in Lines’s Estate, 155 Pa. 378. Lines died in the city of Easton and had been domiciled there for thirty years before his death. In 1887 he executed and delivered to the Union Trust Company, a New York corporation doing business there, a deed of trust, which included one hundred and eighteen mortgage bonds of $1,000 each, issued by a Missouri railroad company, and two hundred and eighty-one shares of the capital stock of a New Jersey corporation doing business there. These securities were delivered to the trustee, and, on the books of the two corporations, were transferred to “The Union Trust Company of New York, in trust for Jesse Lines and others.” According to the provisions of the deed, the trustee was to hold the securities, collect the interest and income thereof and pay the same to Lines during his natural life, and, upon his decease, divide the bonds and stocks by transferring one-half of them to certain of his nephews and nieces and the other half to a putative son. The trust deed contained a clause which gave to Lines the right and power to alter, change, modify or revoke the disposition to be made of the property after his decease; but this right was never exercised. The trustee collected and paid over to Lines the income of the trust securities during his/life, and after his decease divided and distributed the corpus of the estate, consisting of the said securities, to beneficiaries entitled thereto according to the provisions of the deed. In holding that the Commonwealth had a right to collect a collateral inheritance tax on these securities, it was said: “Mr. Lines was not only the beneficial owner of the securities prior to and at the time of his decease, but under the reserved power of modification, revocation, etc., he had absolute control of the disposition to be made of the securities upon his decease. At any time prior thereto, he could have modified or revoked the trust in favor of the beneficiaries named in the deed. It is true the legal title to the securities was in the trust company, but aside from mere compensation for its services, as custodian of the property, the company had no beneficial interest therein. In any proper sense of the term, the securities were the personal property of Mr. Lines. They were his to enjoy during his lifetime, and his to dispose of, in any manner he saw fit, at any time prior to his decease. He chose to leave the trust in favor of the beneficiaries unaltered and unrevoked, and, as he intended, it took effect, in enjoyment, immediately after his decease. Moreover, the securities were that kind of personal property, the situs of which follows the owner.” If Lines had been domiciled in New York, and the securities had been held for him by a trustee here, they would not, on the correct reasoning of Mr. Chief Justice Sterbett, have been liable to collateral inheritance tax here. The estate of the Countess de Noailles in the hands of the trustees here is more than the converse of the Lines estate. The deed of trust was subject to her revocation at any time, and the entire fund, made up largely of accumulations, did not pass to any beneficiaries named in the deed, but directly to the ancillary administrators of her estate.

Decree affirmed at appellant’s costs.


author: Me. Justice Stewart,

text:
    Rist v. Philadelphia Rapid Transit Company, Appellant.

      Negligence — Street railways — Passenger alighting from car— Presumption.

    In an action against a street railway company by a passenger to recover damages for personal injuries sustained by plaintiff while alighting from a car at a usual stopping place, which was in an unsafe and dangerous condition, no presumption of negligence on the part of defendant arises from the mere happening of the accident. The burden is upon the plaintiff to prove negligence, and an instruction to the contrary is reversible error.
    Argued March 19, 1912.
    Appeal No. 14. Jan. T., 1912, by defendant from judgment of C. P. No. 2, Phila. Co., Dec. T., 1909, No. 835, on verdict for plaintiff in case of Josephine E. Rist v. Philadelphia Rapid Transit Company.
    Before Pell, C. J., Brown, Potter, Elkin and Stewárt, JJ.
    Reversed.
    Trespass to recover damages for personal injuries. Before Wiltbank, J.
    The opinion of the Supreme Court states the case.
    Verdict and judgment for plaintiff for $2,000. Defendant appealed.

      Error assigned, among others, was answer to defendant’s point quoted in the opinion of the Supreme Court.

      April 29, 1912:

      Bernard J. O’Connell, for appellant.
    The pláintiff on whom was the burden of proof, furnished no evidence whatever to substantiate the negligence charged: Beck v. B. & O. R. R. Co., 233 Pa. 344.

      Maurice V. Daniels, for appellee.
   Opinion by

Me. Justice Stewart,

The plaintiff received her injuries while alighting at night-time from the car in which she had been a passenger. The car, upon the plaintiff’s signal, had come to a full rest at the accustomed place of stopping, the intersection of two streets. In descending from the step of the car she stepped into a depression on the street which caused her to fall upon a pile of paving blocks immediately before her. The negligence complained of was plaintiff’s discharge from the car at a point where the street was in an unsafe and dangerous condition. There was evidence that extensive alterations and improvements in connection with the change of grade of the street at that point had been in progress for some time previous, and that when this accident occurred, and at the place where it did occur, the street was in a bad and unsafe condition. The case was submitted to the jury, and resulted in a verdict for the plaintiff. That it called for a submission is, we think, clear. Error is complained of in the manner of its submission, and it is only necessary to advert to the one assignment which challenges its correctness. On behalf of the defendant company this point, among others, was submitted: “No presumption of negligence on the part of defendant company arises by reason of the fact that the plaintiff had been a passenger upon its car and was in the act of alighting under the circumstances of this case.” The learned trial judge answered the point as follows: “The circumstances of this case require that I should decline to affirm that point, and I so do.” The point should have been unequivocally affirmed. The mere happening of this accident under the circumstances did not raise any presumption of negligence on the part of the company. The cause of the accident as charged was failure on part of defendant company to provide a safe place at this accustomed stopping point for the discharge of passengers. The burden of showing negligence in this regard, and that such negligence was the proximate cause of plaintiff’s injuries, was upon the plaintiff. In answer to another and later point, the learned trial judge did say, “that the burden is upon plaintiff to establish that her alleged injuries were received in consequence of some act of negligence on the part of the defendant company;” but, so far as this instruction conflicted with the answer to the earlier point, it left the jury without any positive instructions as to the law of the case.

The first assignment of error must be sustained, and the judgment is accordingly reversed, and a venire de novo awarded.