author: Mr. Justice Elkin, Mr. Justice Elkin,

text:
    Commonwealth, Appellant, v. Mortgage Trust Company of Pennsylvania.

      Taxation — Corporations—Trust companies — Capital stock — Tax on capital stock — Constitutional law — Apportionment of tax— Statutes— Repeal — Acts of March 30, 1811, 5 Sm. L. 228; June 8, 1891, P. L. 229, and June 13, 1907, P. L. 640.
    1. The Act of June 13, 1907, P. L. 640, relating to the taxation of the capital stock of trust companies, and providing that the actual value of each share of stock shall bo determined by adding together the capital paid in, the surplus and undivided profits, and dividing the result by the whole number of shares outstanding, is a constitutional exercise of the taxing power of the state. The fact that the method of ascertaining the value of the shares does not take into account selling value on the stock exchange or in the open market is immaterial. The fact that the selling value is not included, is a legislative and not a judicial question.
    2. The Act of June 13, 1907, P. L. 640, is not retroactive in its operation.
    3. The Act of June 13, 1907, P. L. 640, which changed the method of determining the value of shares of stock issued by trust companies, was not intended by the legislature to release such corporations from liability to pay taxes which- had accrued at the time of the passage of that act under the Act of .Time 8, 1891, P. L. 229, although the latter act was repealed by the former, and the act of 1907 did not in express terms contain a saving clause reserving the right to collect such accrued taxes.
    4. While the general rule is that when a statute is repealed without a saving clause, it is to be considered as though it never existed except as to transactions past and closed, the rule, like any other legal principle of general application, must be understood and applied, if at all, so as to give effect to the legislative intention. It is not so much what the general rule of construction is as what did the legislature intend by repealing all acts or parts of acts inconsistent with the new law.
    6. A statute repealing former laws on the same subject does not abolish all rights and remedies under the repealed acts, if the legislative intent not to abolish them appears. This rule especially applies to acts which provide for the assessment and collection of annual taxes.
    6. The Act of March 30, 1811, 5 Sm. L. 228, was in no way affected by the Acts of June 8, 1891, P. L. 229, and June 13, 1907, P. L. 640, and therefore the remedy provided by that act for the settlement and collection of taxes on the stock of trust companies was operative as to all such taxes as had accrued before the Act of June 13,1907, P. L. 640, became operative.
    7. It is competent for the taxing authorities of the commonwealth to apportion and assess a tax on the capital stock of trust companies for a period from the first Monday of November, 1906, to June 20, 1907, when the Act of June 13,1907, became operative.
    8. It is within the power of the accounting officers of the commonwealth in the first instance, or of the court on appeal in a proper case, to apportion state taxes on capital stock according to the time the stock is outstanding, or to determine the amount of tax due for that portion of the year for which taxes are claimed.
    Argued May 24, 1909.
    Reargued Jan. 11, 1910.
    Appeal, No. 10,
    May T., 1909, by plaintiff, from judgment of C. P. Dauphin Co., Commonwealth Docket, 1908, No. 446, for defendant on case tried by the court without a jury in suit of Commonwealth v. Mortgage Trust Company of Pennsylvania.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ., on reargument.
    Reversed.
    Appeal from tax settlement.
    The case was tried by the court without a jury under the Act of April 22, 1874, P. L. 108.
    Kunkel, P. J., found the facts to be as follows:
    This is an appeal by the defendant corporation from the settlement of the account against it by the auditor general and state treasurer for tax on capital stock for the period of seven and two-thirds months ending June 30, 1907, claimed to be due under the provisions of the Act of June 13, 1907, P. L. 640. It was tried by the court without a jury by agreement of the parties agreeably to the provisions of the act of April 22, 1874.
    From the evidence in the case which is without conflict we find the facts to be as follows:
    1. The Mortgage Trust Company of Pennsylvania, defendant, is a corporation of the state of Pennsylvania, chartered March 12, 1886, under the provisions of sec. 29 of the act approved April 29,1874, and its supplements. It possesses the powers, and has been and is engaged in the business, of the class of corporations commonly known as title insurance or trust companies.
    2. June 20, 1907, defendant, by its treasurer, made report to the auditor general, in a blank form prescribed by him, calling for such information as the act of June 13, 1907, requires. The report set forth that defendant’s capital stock issued and paid in was $500,000, divided into 5,000 shares of the par value of $100 each; that the actual value of each share was $40.00, and that the defendant had no surplus or undivided profits. Attached to, and as part of, the report was a statement setting forth the ownership by the company of real estate outside of Pennsylvania; that the value of said real estate was uncertain, and that the company was indebted for overdue interest on debenture bonds in the sum of $236,927.08.
    3. On October 31, 1907, the auditor general and state treasurer settled an account against defendant for a tax of five mills computed upon $500,000, set forth in the said account to be “actual value in cash of capital stock, as appraised or valued by the officers of the company, and assessed for taxation,” which statement was, however, in error, as the valuation of $40.00 per share, returned by the officers of the company, would, for the whole 5,000 shares, amount in the aggregate to only $200,000. The sum of $500,000 was arrived at as the taxable basis by adding together the capital stock paid in, the surplus and the undivided profits. There being no surplus or undivided profits, the total of $500,000 was just the amount of the capital stock paid in. The commonwealth’s officers did not feel at liberty to go beyond that, to regard the valuation of $40.00 per share, put upon the stock by the officers of the company; to give consideration to the fact that it was indebted in the sum of $236,927 for overdue interest, or to attempt to ascertain the actual value of defendant’s capital stock or shares. They felt themselves bound by the act of June 13, 1907, to treat the sum of the capital stock paid in, surplus and undivided profits as the taxable basis, regardless of any other factors or elements of value. Similar assessments were made against all other trust companies in the state.
    4. In the account or settlement, tax was charged against defendant at the rate of five mills per annum upon $500,000 for seven and two-thirds months ending June 20, 1907, said tax amounting to $1,597.22. From this account so settled against it defendant appealed to this court.
    5. Defendant had loaned large amounts of money on mortgages on real estate outside of Pennsylvania, and with those mortgages as security issued its own debenture bonds. Upon many of the mortgages the interest not having been paid, the company, under foreclosure proceedings, became the owner of the real estate. On June 20, 1907, defendant was indebted to the amount of $236,927.08 for overdue interest on outstanding debenture bonds which had been issued by it (the amount of debenture bonds does not appear from the evidence). Under an agreement between defendant and its bondholders the overdue interest is required to be paid before any dividends can be paid to stockholders. During the year ending the first Monday of November, 1906, the net earnings of the company were $4,061.03. The company had not, for a long time prior to June 20, 1907, any surplus fund or undivided profits, and has paid no dividends since May 21, 1896. There was one sale of twelve shares of stock in 1906 at $10.00 per share. The actual value of defendant’s capital stock did not, during the period for which tax is claimed, exceed $40.00 per share, or $200,000 in the aggregate, and except for the real estate which it owned outside of Pennsylvania, acquired by foreclosure of mortgage, its capital stock on June 20, 1907, would not, after deducting the deferred or overdue interest, have had any value whatever.
    6. Although the method of computing actual value for taxation by adding together the amount of capital stock paid in, the surplus and undivided profits, as prescribed in the act of June 13, 1907, produces, in defendant’s case, a result two and one-half times the actual value of its capital stock or shares, and in sundry other cases results in taxing capital stock or shares of similar corporations upon amounts largely in excess of actual value, it does in many other cases produce results very much below actual value; thus, the actual value of the capital stock of the Altoona Trust Company is $150 per share, but determined upon the basis prescribed by the statute the amount taxable is only $108.64 per share; the actual value of the capital stock of the Butler Savings & Trust Company is $310 per share, but the taxable basis only $258.05 per share; the actual value of the capital stock of the Commonwealth Trust Company of Harrisburg is $400 per share, while under the statute the taxable basis is only $329.90; the actual value of the capital stock of the Provident Life & Trust Company is $782 per share, while the taxable basis is only $548.28; in the case of the Union Trust Company of Pittsburg the actual value is $2,500 per share, while the result produced by adding together the capital stock paid in, the surplus and undivided profits, and dividing the total number of shares gives $1,611.91 as the taxable basis under the act of June 13, 1907.
    7. The act of June 13, 1907, in prescribing that for purposes of taxation thereunder “the actual value of each share of stock to be ascertained and fixed by adding together the amount of capital stock paid in, the surplus and undivided profits, and dividing this amount by the number of shares,” provides a method of computation which, among companies subject to the act, produces results in most cases different, and in many cases widely different, from actual values.
    8. In four cases, namely, those of the Pennsylvania Surety Company, Quakertown Trust Company, Union Deposit & Trust Company, and Union Trust Company of Donora, the result reached by adding together the capital stock paid in, the surplus and undivided profits and dividing the amount by the number of shares, was identical with the actual value, as shown by the evidence.
    In twenty-nine other cases there were variations of less than $1.00.
    In eighty-seven cases the result reached by the statutory method of computation was materially greater than the actual value, the excess varying from five to 300 per cent.
    In 100 cases the amount determined by the statutory method was from ten to fifty per cent less than the actual value.
    9. Prior to the passage of the act of June 13, 1907, trust companies were, as most other corporations still are, taxed upon the actual value in cash of the capital stock, appraised as required by sec. 20 of the Act of June 1, 1889, P. L. 420, as amended in sec. 4 of the Act of June 8, 1891, P. L. 229. As shown by the figures prepared by the auditor general's department, in response to a resolution of the legislature, the loss to the commonwealth by determining the taxable amount by adding together the capital stock paid in, surplus and undivided profits and dividing the amount by -the number of shares, as required by the act of June 13, 1907, is about $260,000 per annum as compared with the taxation of the trust companies upon the actual values of their capital stocks under the act of 1891, the rate of taxation being the same— five mills — under each act.
    10. As $260,000 is the tax at five mills upon $5,200,000, it follows that the aggregate amount taxable under the act of June 13, 1907, arrived at by adding together the capital stock paid in, surplus and undivided profits, is about $5,200,000 less than the aggregate actual value of the capital stocks of the trust companies, although in the cases of this defendant and some other trust companies the amounts taxable are largely in excess of their actual values.
    11. The arbitrary provision of the act of June 13, 1907, that for the purpose of taxation thereunder “the actual value of each share of stock to be ascertained and fixed by adding together the amount of capital stock paid in, the surplus and undivided profits and dividing this amount by the number of shares,” omitting, as it does, from consideration the net earnings or income, or losses, the dividends, the price obtainable in the market, the indebtedness, the franchises, and other factors or items of relevant evidence usually considered in determining the actual value of capital stock or shares, results in producing tax bases widely at variance with the actual values, and the resulting taxes are unequal, unjust and not uniform.
    12. As testified by the state official called by the commonwealth to testify in the case, the method of computing the actual value, as prescribed by the act of June 13, 1907, results in taxing the larger taxpaying trust companies upon valuations below the actual value of their shares and some of the smaller companies, like defendant, upon valuations in excess of the actual value of their shares.
    13. Under earlier laws, where they felt free to ascertain the actual value of the capital stock, the state officers considered the indebtedness of a corporation, its dividends and its net earnings or losses as important factors to be considered in determining the actual value of the shares, but under the act of June 13, 1907, they do not feel at liberty to inquire into or regard those elements or factors of value.
    On the facts found and as the result of the foregoing discussion we reach the following:
    CONCLUSIONS OF LAW.
    1. As the arbitrary requirement of the Act of June 13, 1907, P. L. 640, that the actual value of the shares of stock for taxation shall be “ascertained and fixed by adding together the amount of capital stock paid in, the surplus and undivided profits, and dividing this amount by the number of shares” produces results so widely at variance with the actual values, sometimes more, sometimes less, that the resulting taxes are necessarily lacking in uniformity, and are unequal and unjust, the act is violative of the mandate of sec. 1 of art. IX of the constitution of Pennsylvania that “ all taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax and shall be levied and collected under general laws.”
    2. For the same reason the act is in conflict with that provision of the fourteenth amendment to the constitution of the United States which declares that no state shall “ deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.”
    3. Even if the act of 1907 can be considered a constitutional and valid enactment, it cannot be construed or held to impose or justify taxation for any period prior to June 13, 1907, the date of its approval by the governor.
    4. In so far as the account settled by the auditor general arid state treasurer includes a tax upon real estate, or capital stock of defendant invested in and representing real estate located, held and owned in states other than Pennsylvania, the said account and the tax charged therein are in violation of the fourteenth amendment to the constitution of the United States which provides that no state shall “deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.”
    5. Judgment for defendant.

      Error assigned was in dismissing exceptions to adjudication.

      Frederic W. Fleitz, deputy attorney general, with him J. E. B. Cunningham, assistant deputy attorney general, and M. Hampton Todd, attorney general, for appellant on first argument.
    — The commonwealth contends that it is clearly within the power of the legislature to classify corporations for the purpose of taxation in any way, so long as the classification is a fair one, and the tax imposed is uniform upon the entire class.
    This contention of the commonwealth has been repeatedly upheld by the courts, in a long line of cases including Weber v. Reinhard, 73 Pa. 370; Kittanning Coal Co. v. Com., 79 Pa. 100; Williamsport v. Brown, 84 Pa. 438; The Germania Life Ins. Co. v. Com., 85 Pa. 513; Com. v. Delaware Div. Canal Co., 123 Pa. 594; Com. v. Edgerton Coal Co., 164 Pa. 284.

      M. E. Olmsted, with him A. C. Stamm, for appellee, on first argument.
    — This court has never hesitated to enforce the constitutional requirement of uniformity when occasion has required: Fox’s App., 112 Pa. 337; Banger’s App., 109 Pa. 79; Rockhill Iron & Coal Co. v. Fulton County, 204 Pa. 44; Com. v. Manor Gas Coal Co., 188 Pa. 195; Com. v. Lake Shore, etc., R. R. Co., 3 Dauphin Co. Reps. 172.
    The claim in suit is not authorized .even by the act of 1907: Taylor v. Mitchell, 57 Pa. 209; Dewart v. Purdy, 29 Pa. 113; People’s Fire Ins. Co. v. Hartshorne, 84 Pa. 453; Sproul v. Standard Plate Glass Co., 201 Pa. 103; Com. v. Danville Bessemer Co., 207 Pa. 302.

      John Hampton Barnes, for Girard Trust Company and West End Trust Company.

      John O. Johnson, for The Pennsylvania Company for Insurances on Lives and Granting Annuities.

      Reed, Smith, Shaw & Beal and Patterson, Sterrett & Acheson, for Union Trust Company, Fidelity Title & Trust Company, Safe Deposit & Trust Company and Colonial Trust Company, Guaranty Title & Trust Company, Pittsburg Trust Company, Land Trust Company of Pittsburg, and Dollar Saving Fund & Trust Company of Allegheny.
    On June 22, 1909, the Supreme Court handed down an opinion reversing the judgment of the court below with directions that it should hear the parties and determine the actual value of the shares of stock in accordance with the opinion. Thereafter the Mortgage Trust Company presented a petition for the modification of the order in which it was set forth:
    That the act of 1891, in so far as it imposed a tax on the capital stock of trust companies, was absolutely and unconditionally repealed by the act of 1907, with no reservation whatever of any right to collect any taxes accrued thereunder.
    That, for the fraction of the year covered by the account in controversy, no tax had accrued or was due under the act of 1891 at the timé of its repeal.
    That the act of 1891 did not require or authorize any valuation of the shares or capital stock of the petitioner, or of any other trust company, as of June 20, nor as of any date between the first Monday of November, 1906, and June 20,1907, but the said act provided only for taxation upon appraisements and valuations made annually between the first and fifteenth days of November in each year.
    That, as the claim of the commonwealth was based entirely upon the act of 1907, the question of liability under the act of 1891, after its repeal, was not argued through the assumption that the repeal contained the usual reservation for the col- • lection of taxes accrued, or accruing; whereas, in point of fact, the act of 1891 was absolutely and unconditionally repealed with no reservation whatsoever.
    The commonwealth filed an answer to this petition in which it was set up that the repeal of the act of 1891 by the act of 1907 took away no rights to collect the tax which had accrued for the portion of the year until the act of 1907 went into force, and the remedy for settling and collecting said tax remains under the act of 1811.

      A. C. Stamm, with him M. E. Olmsted, for the petition upon reargument.
    — -The appeal, which the act of 1811 gives to persons or bodies politic or corporate is not from an assessment or valuation of property, but from “the settlement of his, her or their account, by the Auditor General and State Treasurer.” It has been repeatedly ruled that, upon such an appeal, if there be no authority of law for the tax charged in the account, or if it be not based upon a lawful assessment, the account must fall. The act of 1811 does not sustain such an account, unless there is other existing law for the foundation of the tax charged: Com. v. L. V. R. R. Co., 104 Pa. 89.

      The act of 1891 was unconditionally repealed: Pacific & Atlantic Telegraph Co. v. Com., 66 Pa. 70; Philadelphia v. Kingsley, 5 Pa. C. C. Rep. 75; Com. v. Standard Oil Co., 101 Pa. 119; Com. v. Alliance Coal Mining Co., 13 W. N. C. 324.
    Proceedings commenced under the provisions of a statute are arrested by the repeal of the statute: every act done towards their completion after the repeal is void: North Canal Street Road, 10 Watts, 351; Com. v. Standard Oil Co., 101 Pa. 119; Road in Hatfield Township, 4 Yeates, 392; Hampton v. Com., 19 Pa. 329; Key v. Goodwin, 4 Moore & Payne, 341; Endlich on the Interpretation of Statutes, secs. 478-479; Lewis’ Sutherland Statutory Construction (2d ed.), sec. 282; Gurnee v. Patrick County, 137 U. S. 141 (11 Sup. Ct. Repr. 34).

      Wm. M. Hargest, assistant deputy attorney general, with him J. E. B. Cunningham, deputy attorney general, and M. Hampton Todd, attorney general, contra. — The commonwealth contends:
    1. That the act of 1891, so far as it relates to trust companies, was in force until the passage of the act of 1907, to wit, June 13, 1907, and the tax for the portion of the year from November 1,1906, to June 13, 1907, is due.
    2. That while the commonwealth cannot use the method of settling and collecting the tax afforded by the act of 1891, because it has been repealed, yet the tax itself accrued, and the act of 1811 supplies the proceeding for its collection and, therefore, the order of this court remitting the case to the court of common pleas of Dauphin county is proper, and admits, under the law, of no modification.
    The accounting officers, in making the valuation are guided, not bound, by any report or valuation of the company.
    When the appeal brings the issue into the court of common pleas, the whole case comes de novo: Com. v. R. R. Co., 3 Luz. Leg. Obs. 147; Com. v. Ry. Co., 2 Pearson, 380; Com. v. Easton Bank, 10 Pa. 442.
    An act repealing former laws upon the same subject, does' not abolish all claims and remedies under the repealed statute, if it appear that the intent was not to abolish them. This is especially so where the repealing act continues the same system under new regulations: Telegraph Co. v. Com., 66 Pa. 70, as reported in 3 Brews. 517; Hickory Tree Road Case, 43 Pa. 139.
    The tax is apportionable: Com. v. R. R. Co., 3 Luz. Leg. Obs. 147; Com. v. Atlantic Refining Co., 7 Dauphin County, 189; Ebervale Coal Co. v. Com., 91 Pa. 47.
    The intention of the legislature is a controlling factor in the construction of this statute: Pacific & Atlantic Telegraph Company v. Com., 66 Pa. 70; 3 Brewster, 517; Hickory Tree Road Case, 43 Pa. 143; Wright v. Oakley, 46 Mass. 400; Com. v. Alliance Coal Mining Co., 13 W. N. C. 324.
   Opinion by

Mr. Justice Elkin,

June 22, 1909:

The tax settlement in this case is for that part of the fiscal year extending from the first Monday of November, 1906, to June 20, 1907. The principal contention of the appellee company in the court below and here is that the Act of June 13, 1907, P. L. 640, taxing the shares of capital stock of trust companies, violates sec. 1 of art. IX of the constitution, which provides that all taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax. The learned court below after giving the parties a patient hearing and the case intelligent and exhaustive consideration held the act to be unconstitutional. We, however, cannot agree with the views expressed on the controlling questions involved, nor with the conclusion reached. The act of 1907 is a revenue measure and provides for the levying of a tax upon the shares of stock of what are popularly known as trust companies. A brief recital of the legislative history of these companies and of the’ policy of the state in taxing their capital stock, together with an understanding of the basis for ascertaining the actual value of shares of stock in banking institutions proper, will be helpful in the consideration of the questions here raised. What are known as trust companies are incorporated under the general corporation act of 1874, and the original purpose for which they were created was to engage in the business of title insurance. In 1881, the legislature broadened the scope and character of their business, and in 1889 the statutory door was more widely opened to this class of corporations. They grew in public favor until the legislature in 1895 conferred upon them the power to receive moneys on deposit and issue their obligations therefor, to invest their funds in and to purchase real and personal securities, and to loan money on real and personal securities. While these acts in express language denied to companies so incorporated the right to engage in the business of banking, they were in fact authorized to do some of the things for which banks are organized. It is true they are not banks of issue, nor of discount and deposit, in the technical sense, yet in the commercial world their transactions are regarded as in the nature of banking business. The policy of the commonwealth for more than twenty years was to tax the capital stock of these companies in the same manner as other corporations created under the general corporation act of 1874 were taxed. They made their reports to the auditor general under the general revenue acts of 1879, 1889 and 1891, and other statutes, just as other private corporations did, and the valuation of their capital stock was ascertained and the tax settlement made upon the same basis. This method of taxing the capital stock of these institutions continued in force until the act of 1907 was passed. As the trust company business grew in magnitude, as it did grow after the passage of the act of 1895 which conferred quasi banking privileges, the question of the proper method of taxing the capital stock of these corporations frequently arose. It was contended in their behalf that banks were their natural competitors; that their business partook of the nature of banking; and that they should be taxed in like manner. As a result of this feeling and the agitation which followed it the act of 1907 was passed. It is apparent that the legislature intended to tax trust companies on the same basis as banks. In this connection it will be helpful to consider the policy of the commonwealth in taxing bank stocks. The old acts of 1850, 1867, 1868, 1869 and 1870, relating to the taxation of banks and shares of stock in banking institutions were superseded by the act of 1891, which provided that any bank or savings institution incorporated lay this state or by the United States may collect from its shareholders and pay into the state treasury a tax of eight mills on the par value of its shares in lieu of all taxation except upon its real estate; and upon failure to so elect to . pay a tax upon the par value as above indicated, it shall be subject to a tax of four mills upon the actual value of its shares of capital stock without any exemption. This act provided alternative methods of levying a tax on bank shares. In its practical operation it produced great inequality of burden as applied to different banking institutions. Several national banks in the city of Pittsburg raised the question of its constitutionality before the auditor general and afterwards in the courts on the ground that it was repugnant to that provision of the constitution which requires taxes to be uniform upon the same class of subjects. When that case was heard before the court of common pleas in Dauphin county the evidence produced showed many inequalities upon the basis of what was considered the actual value of the shares of stock in different banking institutions. Notwithstanding these inequalities this court held the act to be valid and the taxes levied thereunder to be uniform within the meaning of the constitution: Com. v. Merchants’, etc., Nat. Bank, 168 Pa. 309. That case was appealed to the supreme court of the United States, and every question argued in the court below and pressed here in the case at bar was then raised and considered with the result that the judgment of this court was affirmed: Merchants’, etc., Nat. Bank v. Pennsylvania, 167 U. S. 461. It is true, these cases arose under the act of 1891, which was repealed by the act of 1897. The latter act, remedial in character, was intended to correct some of the inequalities about which complaint was-made in the case above cited. The tax rate of four mills on the actual value of the shares of stock was not changed by the act of 1897, but a definite method of ascertaining the actual value of each share was provided, which method consisted in adding together the amount of capital paid in, the surplus and undivided profits and dividing the amount so ascertained by the number of shares. Each bank, however, had the right to elect to collect annually from its stockholders a tax of ten mills on the par value of its share in lieu of all other taxes, except upon real estate. The act of 1897 increased the tax rate from eight to ten mills on all banks electing to pay on the par value of their shares, but the tax rate on the actual value of the shares of those banks not electing to pay on par value remained the same as under the act of 1891. All this was done to make more nearly uniform the taxes paid by banks under this method of taxation and to correct to some extent the inequalities complained of under the old act. Certainly the inequalities of burden are not so great under the act of 1897 as they were under the act of 1891, and since that act stood the constitutional test in all the courts, it would seem as though the later act should be reasonably secure from attack on the ground indicated.

The act of 1907 under which the tax is claimed in the present case, makes what is commonly known as trust companies, a class of corporations for the purpose of taxation, and substantially re-enacts the provisions of the act of 1897, as the basis of determining the valuation of the shares of capital stock. The act of 1907 provides, as does the act of 1897, that the actual value of each share of stock shall be ascertained and fixed for the purpose of taxation by adding together the amount of capital paid in, the surplus and undivided profits and dividing this amount by the number of shares. Every argument made against the act of 1907, could as well be made against the act of 1897, which for a period of twelve years has remained unchallenged as the basis for taxing shares of bank stocks. The power of the legislature to make trust companies a class for the purpose of taxation is conceded, as indeed it must be, under the rule of our cases. The power to classify being conceded, our only concern in the present case is to determine whether the method of taxing the shares of trust company stocks under the act of 1907 is uniform upon this class of subjects. This exact question as applied to bank stocks was settled in the bank case above referred to in favor of the commonwealth and against the contention made by the appellee here. The constitutional mandate only requires taxes to be uniform upon the same class of subjects. The legislature has the power to classify taxable subjects within reasonable limits, to fix the tax rate and to provide a method by which to ascertain the taxable value in each particular class. This power was exercised in 1907 by making trust companies a class for the purpose of taxation, and a uniform tax rate and method of ascertaining taxable value applicable to the entire class were provided in that act. The method provided for ascertaining the value of shares of stock, the kind and character of the report to be made to the auditor general, the penalty for making a false return or ho return, and the rate of taxation, apply to all trust companies incorporated and doing business under the laws of the commonwealth. Up to this point at least the constitutional injunction that all taxes shall be uniform upon the same class of subjects has been fully met by this act. The only complaint that can be made, and it has been made with great force and ability by the learned counsel for the appellee, is that the statutory method of determining the actual value of the shares in practical operation produces such inequality of burden as to • offend against the constitutional provision requiring uniformity. We think this is no longer an open question in Pennsylvania. It was finally settled in the bank case above cited fourteen years ago. It is true, the act of 1891 under which that case arose did not provide a definite method of ascertaining the actual value of shares of stock, but it is equally true that the alternative method therein provided, did produce greater, inequality of burden than anything complained of in the case at bar. The contention then made was, and it now is, that the taxes levied were not uniform, because as measured by the actual value of the shares of stock upon which the settlement was made great inequality of burden .resulted. This court pointed out in that case that the inequalities complained of were due to causes that the legislature could not be required to foresee and provide against. The act was held to be a valid exercise of legislative power because the tax rates and methods of determining taxable value were uniformly applied notwithstanding the inequalities of results. The legislature has the general power to fix the valuation of shares of stock for the purpose of taxation upon the basis of actual value to be ascertained by including all elements of value, or of general market value, or of selling value between particular dates, or real intrinsic value based upon assets and earnings, or upon any other uniform basis of valuation applicable to each member of the class. We can see no reason why the legislature may not definitely provide a method to determine how the taxable value shall be ascertained. The act of 1907 provides that the actual value of each share of stock shall be determined by adding together the capital paid in, the surplus and undivided profits and dividing the result thus obtained by the whole number of shares issued and outstanding. It is doubtful whether any better method of ascertaining the real intrinsic actual value of the shares could be adopted. It has the advantage of being a definite fixed basis sustained by business experience, and in most instances is the surest test of the real value of the shares. It does not take into account selling value on the stock exchange or in the open market, and this fact is strongly urged against the act, but it was within the power of the legislature either to include or exclude such selling value as an element to be considered in ascertaining taxable value. In this instance selling value was not included, which in our view of the law is a legislative and not a judicial question. Some confusion has arisen in the consideration of the present case by making comparison between the method of ascertaining the actual value of shares of stock under the general revenue act of 1891 and the method provided in the act of 1907. A little reflection will show the error of such comparison. The act of 1891 did provide for the taxation of the shares of capital stock of corporations on the basis of actual value, and indicated the elements to be considered in ascertaining that value. Courts in construing this and other similar acts have said the legislative intention voiced therein was to require the accounting officers in ascertaining the taxable value to take into consideration all necessary elements of value, such as dividends, profits, earning power, indebtedness, value of franchise and market price. But the courts have done nothing more than to define and limit the powers of the legislature under the constitution. It is the duty of the legislature to fix a uniform tax rate and to provide a uniform method of valuation, and this was done in the act of 1907. The act of 1891 provides what elements shall be considered in ascertaining the actual value of shares of stock, and the courts have enforced the statutory requirements. The legislature, in 1907, made a new class of taxable subjects and provided in express terms a definite method of determining the actual value of the shares of stock belonging to this taxable class. It is likewise the duty of the courts to enforce this act according to its provisions, unless the constitution forbids. As has been hereinbefore stated the inequality of burden complained of is not sufficient to justify the striking down of the act. The inequalities elaborated in the court below and dwelt upon here depend upon what basis is taken for fixing the actual value of the shares. If the actual value of all the shares of a particular corporation is to be ascertained upon the basis of what a few shares may sell for in the stock market, in some instances to make a fictitious value in others for speculative purposes and in still others to obtain corporate control, of course great inequality may be figured out upon such bases. It is apparent from the record in this case that it was sales of this character that were largely considered in speaking of the actual value of the shares. Such sales are unreliable and unsatisfactory in determining real fixed actual value. As applied to trust companies generally, it is a reasonable assumption, based upon sound business judgment, that the actual intrinsic value of the shares of stock of every such institution is best measured by the amount of capital paid in, the surplus and the undivided profits. This is the basis adopted by the legislature for ascertaining the actual value of the shares of stock for the purposes of taxation in the act of 1907.

The inequalities of taxable burden upon which the learned counsel for appellee rely to have this act declared unconstitutional are no greater, indeed not so great, as in Com. v. Canal Co., 123 Pa. 594, or in Com. v. Brush Electric Light Co., 145 Pa. 147. ' In both of these cases this court held the acts under which the taxes were imposed to be a valid exercise of legislative power and not repugnant to the constitutional requirement as to uniformity. The authority of these cases has always been recognized and followed. There has been no departure from the principle therein laid down although the question has been frequently raised. To affirm the judgment entered by the court below would mean the overruling of these cases and would in effect declare the act of 1897 invalid for the same reason. Nothing but imperative constitutional necessity would warrant such a sweeping result, and we are not convinced that there is any such necessity.

The question has been raised whether the act of 1907 was in force during the period for which taxes are claimed in the present case. We agree in this respect with the contention of the learned counsel for appellee, which is, that the act of 1907 was not intended to be, and is not, retroactive in its operation. It was not in force during the period for which taxes are claimed under the settlement made in the case at bar. However, this is not an insurmountable difficulty for the commonwealth. It is perfectly clear that the old law was in force until the new act became operative, and either the old law or the new act covers the period in question. In point of fact, however, the act of 1891 was in force during the entire period, and the actual value of the shares should have been ascertained as required by that act. There is nothing on the face of the record to show under what authority the tax settlement was made. On appeal from the settlement made by the accounting officers of the commonwealth it was the duty of the court to determine the valuation of the shares of stock under the law in force during the period for which taxes are claimed. When, therefore, the record is remitted the court below can proceed to hear and determine the proper valuation of the shares of capital stock under the act of 1891.

Judgment reversed and record remitted with directions to the court below to hear the parties and determine the actual value of the shares of stock as above indicated.

Opinion by

Mr. Justice Elkin,

February 14, 1910:

After the opinion had been handed down and the record remitted directing the court below to proceed to determine the valuation of the shares of stock of appellant corporation under the law in force when the act of 1907 went into effect, application was made to this court for a rehearing upon the question whether a tax settlement can be made under the act of 1891 for the period in question and the amount in taxes so ascertained can be collected after the repeal of the statute.

This question was not argued when the case was first presented and the court concluded to withhold the opinion and to grant a rehearing on the single question thus raised. Additional briefs have been filed, oral arguments made, and the exact question raised is now before us for decision. It is contended for appellant that the act of 1907 unconditionally-repealed all prior acts or parts of acts relating to the valuation for taxation purposes of the shares of capital stock issued by trust companies, and that the commonwealth having failed to expressly reserve the right to collect taxes which had accrued under the repealed statutes during the period before the new law became operative has lost its right to collect such taxes at all. In other words, that the repeal of the old law without a saving clause in the new act reserving the right to collect taxes accrued at the time of the repeal, releases such corporations from liability for the taxes thus accrued but not paid. No doubt the general rule is that when a statute is repealed without a saving clause, it is to be considered as though it had never existed except as to transactions past and closed. The rule, however, like any other legal principle of general application must be understood and applied, if at all, so as to give effect to the legislative intention. It is not so much what the general rule of construction is as what did the legislature inténd by repealing all acts or parts of acts inconsistent with the new law which did not abolish taxation on this particular class of corporations but only provided a different method of ascertaining the taxable value. It certainly cannot be seriously contended that when the legislature passed the act of 1907, which only changed the method of determining the value of shares of stock issued by trust companies, it was intended to release these same corporations from liability to pay taxes which had accrued at that time. The only rational interpretation of the legislative intention as expressed in the statute is that the taxation of such shares of stock should continue after the passage of the act as it had existed for many years prior to that time except as to the basis of valuation. The act of 1907 did not provide a new system of taxation, nor did it introduce new taxable subjects. It was a revenue statute and was not intended to defeat the right of the commonwealth to collect her taxes. We think the sound rule is, especially as to acts which provide for the assessment and collection of annual taxes, that a statute repealing former laws on the same subject does not abolish all rights and remedies under the repealed acts, if the legislative intent not to abolish them appears. This view of the law finds ample support in Hickory Tree Road, 43 Pa. 139; Telegraph Company v. Com., 66 Pa. 70, and Wright v. Oakley, 46 Mass. 400. The learned counsel for appellant rely on Com. v. Standard Oil Co., 101 Pa. 119, to support the contention that no tax can be collected in the present case because of the repealing clause of the act of 1907. It is true that this case gives some color to this contention, but what was there said must be understood to have reference to the particular facts under which the right to collect a penalty was asserted. The commonwealth claimed a penalty from the corporation, and this court pointed out that the penalty had been repealed by subsequent legislation and that while the subsequent act expressly reserved the right to collect all taxes accrued under former statutes, no such reservation was made as to the penalty. From this it was argued, and this court so held, that the legislative intention to release from the liability to pay such penalty appeared in the act itself when it reserved the right to collect the taxes but not the penalties. Even that case was put upon the ground of legislative intention. In the case at bar the legislative intent to release from the payment of accrued taxes does not appear, and we think it is clear nothing of the kind was intended.

There are additional reasons why the case at bar should not be considered within the rule contended for by appellant. The accounting officers of the commonwealth in making settlements of taxes against corporations derive their authority from the act of 1811 which has been in force for almost a century. It was in force during the period for which taxes are claimed, and is still in force. The right of appeal is given under this act, and the jurisdiction of the court to hear and determine tho questions raised is conferred by the same act. This act was in no way affected by the acts of 1891 and 1907, so that the remedy for the settlement and collection of the tax in question as well as all other taxes was not changed, or modified or repealed. The remedy has remained undisturbed by any subsequent legislation. When the case came into the court below on appeal from the settlement made by the accounting officers, the whole proceeding was de novo. The court then had the power to hear and determine the questions raised and fix the valuation of the shares of stock according to the method of ascertaining that value provided by law. The case therefore being before the court on appeal under an act still in force, we think the power of the court to hear the case and to determine the valuation of the shares of stock according to the method fixed by the law in force during the period for which taxes are claimed is not open to serious qúestion in view of what has been hereinbefore stated in reference to the repealing clause.

The question has been raised whether this annual tax can be apportioned so as to be collected for a fractional part of the year. The established practice is to treat taxes of this character as apportionable when the equities or necessities of the case so require. We can see no legal objection to this method of procedure, especially in view of the fact that the tax is imposed “at the rate of five mills upon each dollar of the actual value of its capital stock.” There is much force in the argument of learned counsel for the commonwealth that when in a contract it is provided that interest shall be paid “at the rate of six per cent per annum,” it means'that interest shall only be paid at that rate for the fractional part of the year when the contract was in force. It frequently happens that corporations are formed in the middle or near the close of a fiscal year, and it is apparent that in such cases the commonwealth should not lose the tax for that part of the year during which the capital stock was outstanding, and it would be unfair to impose the tax for the whole year upon a corporation which was in existence only for a few months. This is why the practice has grown up of apportioning the tax to the time the capital stock was outstanding. This practice is founded on equitable principles and just considerations, and we can see no legal reason why it should be disturbed. It is within the power of the accounting officers of the commonwealth in the first instance, or of the court on appeal in a proper case, to apportion the tax according to the time the stock is outstanding, or to determine the amount of tax due for that portion of the year for which'taxes are claimed.

After due consideration we have concluded that the court has the power to ascertain the value of the shares upon the basis indicated in our first opinion and that the order then made should not be disturbed. Record remitted so that the value of the shares may be ascertained according to the views hereinbefore expressed.


source: Caselaw Access Project

author: Per Curiam,

license: Public Domain

text:
    Knight, Appellant, v. Press Company, Limited.

      Sunday law — Contract—Illegal contract — Distributing papers on Sunday — Act of April 22, 1794, 3 Sm. L. 177.
    A contract to distribute newspapers on Sunday is an illegal contract and unenforceable, inasmuch as it involves a wordly employment on Sunday prohibited by the Act of April 22, 1794, 3 Sm. L. 177.
    Argued Jan. 11, 1910.
    Appeal, No. 135,
    Jan. T., 1909, by plaintiff, from judgment of C. P. No. 3, Phila. Co., Dec. T., 1898, No. 691, for defendant non obstante veredicto in case of John S. Knight v. Press Company, Limited.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Assumpsit for work and labor done.
    At the trial the jury returned a verdict for plaintiff for 81,817.20.

      Subsequently the court entered judgment for defendant non obstante veredicto, Ferguson, J., filing the following opinion:
    The service for which the plaintiff claims compensation was rendered by him on Sundays. He was employed by the defendant and working during the week, and the present suit is for compensation for the Sundays during which he worked and for which he says he was not paid. There is a presumption that one who is paid by the week and receipts for his weekly wage is paid for all the services which he may render in the week, but the plaintiff testified to a special contract for compensation for his work on Sundays covering the period employed. The considefation rendered by him and for which he contends the defendant promised to pay him, was rendered on Sunday. It was not a contract which was executory, having its incipiency on Sunday and its conclusion on a secular day, but was to be performed on Sunday and, presumably, to be paid for each Sunday as the work was done. In Weeks v. Lippencott, 42 Pa. 474, Mr. Justice Woodward, delivering the opinion of the court, said: “Contracts which offend against the common law and public policy are void.” In Smith on Contracts, (3d Am. ed.,) it is stated (p. 71): “Though it is unnecessary to show on what condition a deed is founded, the party sued upon it is always on his part allowed to show it was founded on illegal or immoral consideration, or that it was obtained by duress or by fraud.” And the note (on page 73) quotes the remarks of Lord Mansfield as follows: “The objection that a contract is immoral or illegal as between the plaintiff and defendant sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed, but it is founded on the general principles of policy, which the defendant has the advantage of, contrary to the real justice as between him and the plaintiff, by accident, if I may so say. The principle of public policy is this: ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act. If from the plaintiff’s own statement, or otherwise, it appears that the causé of action arises ex turpi causa or the transgression of a positive law of this country then the court says he has no right to be assisted. It is upon that ground the court goes, not for the sake of the defendant, but because they will not lend their aid to such a plaintiff.” In 9 Cyc. 465, it is said: “An illegal agreement will not be enforced, and hence is not a contract according to the definition of a contract. ... It is immaterial, so far as the effect of the illegality is concerned, whether the object of the agreement is forbidden by the common law of by statute, or whether the thing forbidden is malum in se or malum prohibitum.”
    By the Act of April 22, 1794, 3 Sm. L. 177, sec. 1, worldly employment on the Lord’s day, commonly called Sunday, is prohibited, and it has been held that selling newspapers on Sunday by a carrier is a performance of worldly employment within the meaning of the said act. See Com. v. Matthews, 152 Pa. 166. And in that case it was held that such employment did not come within the exceptions of the act of 1794, in that it was not a work of charity or necessity.
    It is the plaintiff’s contention that he was employed to distribute newspapers on Sunday. The work, therefore, for which he alleges he was employed being a service held to be one prohibited by the act of 1794, it was an illegal contract and unenforceable, and judgment must, therefore, be entered for the defendant.
    The motion for judgment non obstante veredicto is granted, and an exception is allowed the plaintiff.

      Error assigned was in entering judgment for defendant non obstante veredicto.

      De Forrest Ballou, for appellant.

      John G. Johnson, with him James Wilson Bayard, for appellee.
   Per Curiam,

February 14, .1910:

The judgment is affirmed on the opinion of Judge Ferguson on entering judgment for the defendant non obstante veredicto.


text:
    Green’s Estate.

      Wills — Construction—Vested and contingent interest.

    Testatrix gave a portion of her estate to a trustee in trust to pay a fixed sum out of the income to her grandchildren, naming them, being the children of a son, A. The will further provided as follows: “ Should the said children or any of them depart this life during the life time of their said father” the amount of income directed to be paid to such child or children should be paid “to their father, the said A. for and during the full term of his natural life;” and “upon the death of the said A. then in trust to pay out of said net interest and income the sum of one hundred and fifty dollars unto each of his said children that may then be living during their minority .... and upon their attaining the age of twenty-one years respectively then in trust to pay over to each of said children respectively so attaining the age of twenty-one years one equal part or share of said moiety or half part of all the residue of my estate absolutely.” Held, that the ultimate gifts to the grandchildren were contingent upon their surviving their father.
    Argued Jan. 11, 1910.
    Appeal, No. 137,
    Jan. T., 1909, by Elwood J. Turner, Administrator, from decree of O. C. Phila. Co., March T., 1883, No. 77, dismissing exceptions to adjudication in Estate of Maria Green, deceased.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Exceptions to adjudication.
    From the record it appeared that Maria Green died in 1876 leaving a will, the material portion of which is as follows:
    “Item. One full equal moiety or half part of all the residue reversion and remainder of my Estate both real and personal whatsoever and wheresoever of which I may die seized possessed or in any way entitled to I give devise and bequeath unto my nephew George H. Kirkham in trust for the following uses and purposes that is to say in Trust to keep the same invested at interest with power to change the securities from time to time as he shall think proper and to collect and receive the interest and income thereof and to pay out of the \ said net interest and income the sum of one hundred and fifty dollars per annum unto each of my grand children, Sarah English Green, Maria Green and William Warder Green, children of my son Penington Green for their support and maintenance during the lifetime of their said father and / to pay the residue of the said net interest and income when and as the same shall be received unto my son the said Penington Green for and during the full term of his natural life for his own use and behoof without being subject to or liable for his debts contracts or engagements: And should the said^ children or any of them depart this life during the lifetime of their said father then in trust to pay the share or income hereinabove given to said child or children to their father ,¡ the said Penington Green for and during the full term of his/ natural life for his own use and behoof without subject to or liable for his debts, contracts or engagements: And upon the \ death of the said Penington Green then in trust to pay out ^ of the said net interest and income the sum of one hundred and fifty dollars per annum unto each of his said children-that j, may then be living during their minority for their support and maintenance and upon their attaining the age of twenty-one years respectively then in trust to pay over to each of said children respectively so attaining the age of twenty-one years one equal part or share of the said moiety or half part of all the residue of my estate absolutely clear free released and discharged from all trusts. Whatever may fall to my said grandchildren under this my will I direct shall during their minority be retained in the hands of the said George H. Kirkham to be by him applied to such amount and in such manner as he shall deem proper for the interest and benefit of my said grandchildren without the intervention of any guardian or other person.”
    William Warder Green, one of the grandchildren, died on April 23, 1907, intestate, leaving a widow and three minor children him surviving. Letters on his estate were granted to the appellant. Penington Green, the son of the decedent, died on June 25, 1908.

      The auditing judge, Penrose, J., refused to award any share of the principal to the appellant, but awarded the whole of it to Sarah English Green and Maria Green.
    Exceptions to the adjudication were dismissed by the court, Anderson, J., filing the following opinion:
    While it is true that courts favor the interpretation most in accordance with the rules of inheritance, and that every intendment will be made in favor of the heir, yet this can only be as a makeweight when there is a doubt as to the testator’s intention, and never where that intention is plainly to the contrary. In the present case, it is clear from the language of the will, that the gifts are confined to the children of the testator’s son who might be living at his death, gifts, necessarily contingent upon their survival to that event. That testator’s thought was not beyond his grandchildren is evidenced not only from the language of these gifts in remainder, but also from the prior gifts of income to his grandchildren which fell in upon their deaths, irrespective of their leaving issue, or dying without. That the words “ then living ” imply a contingent remainder, has been decided so often and so recently that it will be sufficient to refer to a few of the late cases on the subject: Scott’s Est., 37 Pa. Superior Ct. 342; Mulliken v. Earnshaw, 209 Pa. 226; Rudy’s Est., 185 Pa. 359; McGlensey’s Est., 37 Pa. Superior Ct. 514.
    Exceptions dismissed.

      Error assigned was the decree of the court.

      John G. Johnson, with him Owen J. Roberts and James S. Williams, for appellant.

      W. Nelson L. West, for appellees.
   Per Curiam,

February 14, 1910:

The order of the orphans’ court dismissing exceptions to the adjudication is affirmed on the opinion of Judge Anderson.


text:
    Woodward’s Appeal.

      Interest — Contract—Custom- —Surety company.

    Where a surety company requires as a condition for a bond guaranteeing the completion of a building operation, that a certain sum shall be deposited with it to be paid out by it to the builders on the certificate of the architect as the work progressed, and there is nothing in the agreement relating to interest, and there is no evidence of a custom to pay interest on deposits of the kind, the surety company will not be liable for interest on the deposit.
    Argued Jan. 11, 1910.
    Appeal, No. 244,
    Jan. T., 1909, by William H. Woodward, from order of C. P. No. 5, Phila. Co., June T., 1905, No. 2,040, dismissing exceptions to auditor’s report in case of Commonwealth ex rel. Hampton L. Carson, Attorney General, v. The City Trust, Safe Deposit & Surety Company of Philadelphia.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Exceptions to report of John M. Scott, Esq., and Ziba T. Moore, Esq., auditors.
    The case is stated in the opinion of the Supreme Court.

      Error assigned was in dismissing exceptions to auditor’s report.

      Limner Beeber, with him Francis V. Lloyd, for appellant.

      John Kent Kane, with him Murdock Kendrick, for appellee.
   Per Curiam,

February 14, 1910:

This appeal is from an order dismissing exceptions to the report of the auditors of the account of the receiver of the City Trust, Safe Deposit & Surety Company. The principal claim of the appellant at the audit was for interest at two per cent on $200,000 deposited with the trust company under these circumstances. The appellant had purchased land on which he intended to build an apartment house. In order to pay for the land and the building, he secured a loan of $400,000 on condition that the person advancing the money should be given a bond in the sum of $300,000 guaranteeing the completion of the building. The City Trust, Safe Deposit & Surety Company agreed to give its bond, but required a deposit of $200,000 to be paid out by it to the builders on the certificate of the architect as the work progressed.

In carrying out his purpose the appellant had the land conveyed to a straw man, who entered into a contract for the erection of the building. This contract was guaranteed by the trust company on the deposit with it of $200,000 by the appellant. The deposit was under the management of the surety department of the trust company, which was distinct from its banking and trust business, and it was governed entirely by the terms of the agreement between the parties, under which it was made.

The learned auditors found that there was no agreement to pay interest, and that there was no evidence of a custom to pay interest on deposits of the kind. These findings were sustained by the testimony and have been approved by the court. We find nothing in any of the assignments of error that calls for a reversal. They are all dismissed and the order of the court is affirmed at the cost of the appellant.


text:
    Pottstown Iron Company v. Glasgow Iron Company, Appellant.

      Contract — Lease of iron works — Rental—Minimum, rental.

    A lessee of an iron works agreed to pay to the lessor an amount “equivalent to fifty per cent of the total amount of the net profits accruing from the operation of the said works. . . . And it is also understood and agreed that the minimum rental to be paid by the party of the second part shall be at the rate of one thousand dollars per month during the time of possession or occupation, whether the one-half of the profits above recited shall equal that sum or not. . . . Settlements of the rentals due hereunder and payment of the same shall be made in the months of January and July of each year.” It was also provided that in case of a partial destruction of the works, such part should be rebuilt, “and during the time of such repairing or rebuilding, the minimum rent payable by the said party of the second part shall be reduced,” to an amount to be ascertained by referees. Held, that the lease should be construed so as to mean that the lessee was to pay $6,000 rental every half year, except when the net profits exceeded $12,000, and that in such an event the rental was to be fifty per cent of the profits.
    Argued Jan. 12, 1910.
    Appeal, No. 167,
    Jan. T., 1909, by defendant, from order of C. P. No. 4, Phila. Co., June T., 1908, No. 1,986, making absolute rule for judgment for want of a sufficient affidavit of defense in case of Pottstown Iron Company v. Glasgow Iron Company.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Assumpsit for rentals.
    Rule for judgment for want of a sufficient affidavit of defense.
    Audenried, J., filed the following opinion:
    The plaintiff leased its iron works to the defendant for the term of twenty years from December 31, 1900. As rental for the property demised, the defendant agreed to pay the plaintiff a sum equivalent to fifty per cent of the total amount of the net profits accruing from its operation, but it was stipulated that “the minimum rental to be paid shall be at the rate of one thousand dollars per month during the time of possession or occupation whether the one half of the profits above recited shall equal that sum or not; ” and it was provided that “settlements of the rentals” and “payments of the same shall be made in the months of January and July of each year.”
    At the end of each period of six months up to June 30, 1907, the defendant accounted to the plaintiff for its profits and paid half of what its statements showed had been earned. These payments aggregated $422,229.40. At the minimum monthly rate fixed by the lease the total rental to the date named would have amounted to but $78,000.
    In January, 1908, the defendant asserted that in the last preceding half year it had made no profits whatever, and refused to make any payment to the plaintiff. The sums already paid by the defendant up to that time slightly exceeded an average of $5,000 per month.
    The plaintiff has brought this action to recover the sum of $6,000 as rental for the second half of the year 1907, upon the basis of the minimum rate fixed by the lease.
    The defendant argues that it is not bound to pay the minimum rental at the monthly rate provided for by the lease so long as the aggregate of its payments of rent since the beginning of its term amounts to the sum of $1,000 for each of the several months that have elapsed since that date. That conclusion is based upon the proposition that the only requirement of the lease on this point is “that the rental shall average at least $1,000 per month during the whole term, not that it shall average at least $1,000 per month for every semiannual period.”
    The plaintiff contends that the lease must be interpreted as meaning that the tenant is to pay $6,000 rental every half year except when its net profits from the operation of the iron works exceed $12,000, and that in such an event the rental paid is to be fifty per cent of the profits.
    The question of construction thus presented is not without difficulty. After considerable thought, however, we have determined that the interpretation put upon the lease by the defendant cannot be sustained, and that judgment must be entered for the plaintiff for want of a sufficient affidavit of defense.
    According to the fourteenth paragraph of the lease, the minimum sum of $1,000 per month is to be paid as “rental.” It is provided by the seventeenth paragraph of the lease that settlements of the rentals thereunder and payments of the same shall be made in the months of January and July of each year. There is no indication in the latter clause that at the settlement of the rent payable at the end of each half year the payments made in previous half years shall be brought into the account. On the contrary, the use of the words “settlements” and “payments” in this connection implies, we think, a requirement of finality in the accounting that can be attained only by the absolute segregation of each period of six months as well from that portion of the term that has preceded it as from that which is to follow it.
    That the minimum rental should be paid every six months, and not at the end of the term by way of equating the income of the lessor under the lease to a minimum monthly average of $1,000 for the 240 months of which the term consists, seems to be established by the sixteenth paragraph of the' lease, by which provision is made for, inter alia, the case of a partial destruction of the works demised. Here there appear the words, “And during the time of such repairing or rebuilding the minimum rental payable by the said party of the second part shall be reduced,” etc. The parties manifestly contemplated the payment of the minimum rental by the tenant every half year. It is true that the “minimum rental,” so called, is, in respect of the fact that the full use of the works cannot be made by the lessee, to be equitably reduced, but the reduction is to operate on the minimum rental unaffected by the fact that in previous half years the lessor may have received payments from profits whose amount exceeded the sum of $1,000 per month.
    To the defendant’s argument, based on the use of the words “during the time of possession or occupation,” that occur in the fourteenth paragraph of the lease where the provision for the payment of the minimum rental is made, little weight can be attached. The words referred to were, in our opinion, introduced by the draftsman for the purpose of limiting the liability of the lessee to the payment of the minimum rental there covenanted for to the time that it should remain in actual possession or occupation of the property demised. The parties evidently had in mind the possibility of the total destruction of the works through some one of the causes enumerated in the sixteenth paragraph of the lease and the termination of the leasehold before twenty years should have elapsed from the date of its creation, and attempted, in somewhat awkward phraseology, it is true, to preclude all chance of claim on the tenant for the minimum rent in respect of the period between the time when it might, under such circumstances, abandon the property and the end of what would, normally, have been the full term of the lease.
    The precedents cited by the defendant in support of its theory as to the true interpretation of the provisions of the lease on the subject of the payment of a minimum rental are not in point.
    In the contract under consideration in the case of the Phœnix Silk Mfg. Co. v. Reilly, 187 Pa. 526, there was nothing that called for annual settlements between the parties thereto. This significant and important fact was pointed out in the opinion of the court below. In the case at bar there is provision made by the lease for semiannual settlements and payments.
    The case of Homet v. Singer, 35 Pa. Superior Ct. 491, was one in which the plaintiff was endeavoring, most inequitably, to enforce the forfeiture of a lease, and which was decided against him on the application of principles strictissimi juris. By the lease whose construction was there in dispute the minimum rental to be paid by the tenant was fixed by a clumsy reference to a yearly average. No time was fixed, however, for the payment of rent, and on this ground alone the case must be distinguished from that now before us.
    The rule for judgment is made absolute.

      Error assigned was the order of the court, making absolute rule for judgment for want of a sufficient affidavit of defense.

      James Collins Jones, for appellant.

      John G. Johnson, with him John Sparhawk, Jr., for appellee.
   Per Curiam,

February 14, 1910:

The judgment is affirmed on the opinion of Judge AudenRIED.


text:
    Bullitt, Appellant, v. Hinchman.

      Equity — Injunction—Laches—Building restriction — Covenant—Deed.
    Where an owner of land permits fourteen houses to be erected and completed upon adjoining land in violation of a building restriction in his own deed, and rests upon his rights for a period of one year after he has knowledge of the violation of the restriction, he is not entitled to a mandatory injunction to compel the demolition of the houses.
    Argued Jan. 12, 1910.
    Appeal, No. 307,
    Jan. T., 1909, by plaintiffs, from decree of C. P. No. 3, Phila. Co., March T., 1908, No. 3,823, dismissing bill in equity in case of William C. Bullitt et al., surviving and substituted trustees under the will of John C. Bullitt, deceased, v. Charles S. Hinchman.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Bill in equity for an injunction.
    Ferguson, J., filed the following opinion:
    This is a bill in equity to which an answer has been filed and the case was heard on bill and answer. In point of fact, the record shows a demurrer to the answer which may be treated as surplusage. The submission of the case on bill and answer is an admission by defendant of the truth of the facts alleged in the bill which are not denied in the answer, and an admission by complainants of the truth of all relevant facts alleged in the answer and wherein there are contradictions between the bill and answer, those alleged in the answer are conceded to be true.
    The facts, therefore, may be briefly stated as follows: The Walnut Street Land Company on December 14, 1860, by deed conveyed to Charles F. Leisen a lot of ground on the south side of Chestnut street fifty-two feet ten inches west of Fifty-fifth street, containing in front on Chestnut street forty-one feet one inch, and in depth southwardly at right angles to Chestnut street, two hundred twenty feet two inches; that said deed contained a restriction or condition to the effect that the owner should not erect on said premises any dwelling houses of a less width in front than seventeen feet; that said premises, by divers mesne conveyances, vested in John C. Bullitt, and the complainants are the trustees under his will. The Walnut Street Land Company, on November 9, 1860, conveyed to Charles Dagit in fee a lot of ground on the south side of Chestnut street and the west side of Fifty-fifth street, containing in front on Fifty-fifth street, 220 feet, and in depth westward between parallel lines fifty-two feet two inches. This lot of ground immediately adjoins the lot of ground above referred to and conveyed to Leisen. The last-named conveyance contained a similar covenant and restriction with regard to the frontage of dwelling houses to be erected on said lot. On April 30,1907, the complainants discovered that fourteen houses were in course of erection on the last named lot of ground, and were nearing completion; whereupon they communicated with the then registered owner, John T. Gregory, and as a result of negotiations which followed, Gregory entered into a contract for the purchase from the complainants of the first mentioned lot of ground. This agreement was entered into on July 9, 1907, and provided for a settlement on October 1 of that year. Gregory conveyed the premises to D. F. McConnell on'July 1, 1907, and on the thirteenth day of the same month, McConnell conveyed the premises to Charles S. Hinchman, the defendant. Gregory failed to complete the purchase of complainants’ lot of ground, and on April 23, 1908, the bill was filed. At that time, the fourteen houses were completed. Hinchman, the defendant, knew nothing of the notice to Gregory or the agreement to purchase the complainants’ lot. The bill avers that the restrictions as to frontage were imposed on both properties for their mutual benefit and that they have been violated by the erection of the houses, causing irreparable damage to complainants’ land; and prays for an injunction restraining the defendant from permitting the buildings to remain erected upon the said lot of ground in violation of the restriction.

      Upon these facts, we are of opinion that the complainants are not entitled to equitable relief. Their laches defeat any right which they might otherwise have had. The complainants were aware of the violation- of the restriction in April, 1907. In July of that year, defendant became owner. While it is true he purchased with notice of restriction which was upon record and that necessarily the houses as erected violated that restriction, there was the accompanying fact that they had been erected without concealment and had been in course of erection in violation of the restriction necessarily for a considerable period of time. He had no knowledge of the negotiations had between the complainants and his predecessor in title with reference to the purchase of the complainants’ land as a settlement of the controversy as to the restriction if it was such as a settlement, and as such purchaser of the houses he received no complaint with regard to the restriction until the bill was filed on April 23, 1908. The notice to defendant of the violation is not so material to the issue as the notice to the complainants. They permitted fourteen houses to be erected and completed in violation of the restriction and rested upon their rights for a period of one year less seven days. They permitted the defendant to become the owner of the premises and to continue as such without complaint or action from July, 1907, to April, 1908, during which time the houses were completed. In High on Injunctions, sec. 1159, the law is stated as follows:
    “In considering applications for relief by injunction against the breach of restrictive covenants contained in conveyances of real property, the courts require due diligence upon the part of the plaintiff seeking the relief and laches or acquiescence on his part in the violation of the restricted covenant will ordinarily defeat his application. Indeed, equity requires the utmost diligence in this class of cases upon the part of him who invokes its preventive aid, and a slight degree of acquiescence is sufficient to defeat the application since every relaxation which plaintiff permits in allowing erections to be made in violation of the covenant amounts pro tanto to a disaffirmance of the obligation. Where, therefore, plaintiff lies by for a period of four or five months permitting the defendants to go on with their erections in disregard of the covenant he will be denied relief by injunction.”
    The principle thus stated is conclusive of the questions involved in this case. The complainants have rested too long upon their rights to entitle them to the extraordinary relief of requiring the demolition of fourteen dwelling houses, and if they are damaged they must have recourse to a proceeding at law.
    The bill is, therefore, dismissed.

      Error assigned was decree dismissing the bill.

      Henry S. Drinker, Jr., with him James McMullan and Samuel Dickson, for appellants.
    — To warrant relief by injunction in the case of a covenant restricting erections upon' the premises conveyed, it is not essential that the plaintiff should show any actual damage resulting from the breach of covenant of which he complains, and if a clear breach be shown equity may interpose its preventive aid regardless of the question of damage, since the covenantee is entitled to the benefit of his covenant: Lord Manners v. Johnson, L. R. 1 Ch. Div. 673; Collins v. Castle, L. R. 36 Ch. Div. 243; Steward v. Winters, 4 Sandf. Ch. 587; Com. v. R. R. Co., 24 Pa. 159; St. Andrew’s Church’s App., 67 Pa. 512.
    The complainants are not precluded from the aid of a court of equity by reason of their laches: Hays v. St. Paul M. E. Church, 196 Ill. 633 (66 N. E. Repr. 1040); Knight v. Simmonds, L. R. 1896, 2 Ch. 294; Payson v. Burnham, 141 Mass. 547 (6 N. E. Repr. 708); Jackson v. Stevenson, 156 Mass. 496 (31 N. E. Repr. 691).
    There has been no such change in the character of the neighborhood as to make it inequitable to allow complainants the relief prayed for in the bill: Sayers v. Collyer, L. R. 28 Ch. Div. 103; Duke of Bedford v. British Museum, 2 M. & K. 552; Orne v. Fridenberg, 143 Pa. 487; Muzzarelli v. Hulshizer, 163 Pa. 643; Landell v. Hamilton, 175 Pa. 327.

      John G. Johnson, with him James Wilson Bayard, for appellee.—
    Upon the facts shown by the pleadings complainants’ laches is such as to debar them from equitable relief: Orne v. Fridenberg, 143 Pa. 487; Carroll v. Asbury, 28 Pa. Superior Ct. 354; Payson v. Burnham, 141 Mass. 547 (6 N. E. Repr. 708); Jackson v. Stevenson, 156 Mass. 496 (31 N. E. Repr. 691); Linzee v. Mixer, 101 Mass. 512; Chartiers Block Coal Co. v. Mellon, 152 Pa. 286; Keeling v. Ry. Co., 205 Pa. 31.
   Per Curiam,

February 14, 1910:

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


text:
    Batchelder v. Standard Plunger Elevator Company, Appellant.

      Master and servant — Wrongful discharge — Disobedience—Intoxication.

    1. Whether a master has waived a breach of contract by his servant by retaining him in service after knowledge of such breach is a question of fact. Prima facie such retention is a waiver and condonation is presumed; but if there are circumstances shown that tend to establish a reasonable and proper reason for the delay in discharging it is for the jury to say whether in fact the breach was condoned.
    2. Where an employee is guilty of acts of disobedience and of being somewhat under the influence of liquor, but the employer continues him in his employment for a year and a half after the last disobedience of orders and for nearly two years from the time of the alleged intoxication, the employer will be presumed to have condoned the offenses and cannot allege them as grounds for the discharge of the employee.
    3. Where an employee uses some of his own time and the time of his employer’s other workmen in helping for a brief time another contractor engaged in working on the same building as the employer and his men, and it appears that the employer made no objection to such act of the employee until over a month later, a finding by a referee that such delay was a waiver of the right to discharge the employee, will not be reversed, where there is sufficient evidence to sustain the finding and there is no manifest error.

      Argued Jan. 12, 1910.
    Appeal, No. 341,
    Jan. T., 1909, by defendant, from order of C. P. No. 2, Phila. Co., Dec. T., 1906, No. 640, dismissing exceptions to report of referee in case of Albert E. Batchelder v. Standard Plunger Elevator Company.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Assumpsit to recover damages for an alleged wrongful discharge of plaintiff by defendant, his employer.
    Exceptions to report of referee.
    The referee, Chester N. Farr, Esq., found as follows:
    FINDINGS OF FACT.
    1. That the plaintiff possessed the necessary mechanical skill and executive ability to carry out the work of employment in the office of outside foreman for which he had contracted to serve the defendant.
    2. That there is no evidence that his capacity for doing work deteriorated as time went on in the service of the defendant company.
    3. During the entire time that the plaintiff worked for the defendant he showed executive skill and efficiency of an order reasonably sufficient to comply with the conditions of the contract.
    4. There were no inefficient acts on the part of the plaintiff that resulted in any detriment or loss to the defendant company.
    5. The plaintiff employed a man named Tupper as a driller on the work on the Wanamaker building during the fall of 1904. At that time the defendant company had discharged Tupper, who had previously been working in the Pittsburg district. The plaintiff was aware of this discharge, and that the company had notified him not to re-employ Tupper; and in making this appointment the plaintiff violated the instructions given him by the company.
    6. The plaintiff, while on the Wanamaker building was directed by the assistant president of the company to keep a diary of the progress of' his work. This he did not do.
    7. The plaintiff was asked at the commencement of the work on the Wanamaker building to prepare a list of the tools which it would be necessary for him to have for the purpose of the elevator construction. This order he disobeyed, and he did not prepare such a list.
    8. The plaintiff was on several occasions, while working upon the Wanamaker building, late in his arrival at the work, getting there at 8 o’clock instead of 7:30. On these occasions his lateness was due to the fact that he had stopped at the office of the company for other business in connection with the company’s work. There were subforemen and timekeepers on the work, however, and the effect of his lateness was not to delay the commencement of the work until his arrival, it being stalled in his absence.
    9. The plaintiff was on two occasions while on the work upon the Bellevue-Stratford Hotel, in Philadelphia, somewhat under the influence of liquor. One of these was the instance narrated by himself, when he had attended the funeral of a friend; but it does not appear that at that time he appeared at his work under the influence of liquor. The other occasion was in the evening of a working day at a test made of one of the elevators of the Bellevue-Stratford Hotel then in process of construction. On this occasion the plaintiff, while perceptibly under the influence of liquor, operated and tested the elevator for some considerable time during the evening.
    10. On February 2, 1906, while the plaintiff was engaged in superintending the elevator construction of the Knickerbocker Hotel in New York City, he was requested by Spellman, the plumbing contractor for the Knickerbocker Hotel construction, to use the men and appliances of the Standard Plunger Elevator Company for the purpose of lowering into the basement of the building a pump which Spellman was to use in his work. Plaintiff used for this purpose, six men who were then in the employ of the defendant company, the work being begun at 1 o’clock in the afternoon and continued until 10 o’clock that night. Four of the men so used worked during the afternoon hours, which time would otherwise have been devoted to the defendant’s service, and all six worked in the evening. The main part of the rigging, ropes and tackle used for this purpose were the property of Spellman, the plumbing contractor. For this work the plaintiff received from Spellman the sum of $40.00, of which he used $26.00 in paying the six men who had worked under him, and retained $14.00 for himself. The plaintiff then turned into the company, for the purpose of having it recorded upon the time sheet, information which charged the company with eight hours, or a full day’s work for each of the six men so employed. On the following morning the plaintiff, before he was aware that any complaint was made by the defendant company, came to the defendant’s timekeeper and directed the erasure of the figures showing full time on the time sheet and the insertion of the correct figures.
    11. On March 7, 1906, the plaintiff was discharged from the defendant company’s employ, by a letter alleging that he had not complied with the terms of the contract, had given unsatisfactory work, and referring specifically to the Spellman incident, the facts of which have been above set forth.
    FINDINGS OF LAW.
    The referee has found the plaintiff guilty of acts of disobedience as follows: The employment of Tupper, the failure to keep a diary, and the failure to prepare a list of tools. The referee, however, is of opinion that if these acts of disobedience could be regarded as sufficient to justify the rescinding of the contract by the defendant company they were waived and condoned by the long lapse of time which took place between their commission and the final dismissal. The last one of them occurring during the fall of 1904, and the plaintiff not being dismissed until one and one-half years thereafter.
    Incompetency and unfitness cannot be condoned, inasmuch as they are continuing in their character: Glasgow v. Hood, 57 S. W. Repr. 162, but this does not apply to specific acts of disobedience, and in this case the waiver or condonation may be presumed by the retention in employment of the employee after the discovery of the disobedient acts. Unless there are circumstances shown which show a cause for the delay, the acts will be presumed to be condoned: Jonas v. Field, 83 Ala. 445 (3 So. Repr. 893); Newman v. Reagan, 63 Ga. 755; Refining Co. v. Grey, 102 S. W. Repr. 934.
    The referee is of the opinion that this same reasoning would apply to the findings of intoxication, for these instances occurred while at work upon the Bellevue-Stratford Hotel, which was nearly two years prior to the plaintiff’s dismissal.
    The action of the plaintiff on February 2, 1906, in using the defendant company’s men for the purpose of lowering the pump into the basement of the Knickerbocker Hotel for the plumbing contractor, and the plaintiff’s acceptance of money therefor present a more serious question. By the contract of employment, the plaintiff agreed that he “would not engage in or become interested in any other business or calling which would require his personal attendance during business hours, and would not engage in any business, calling or enterprise which is or may be contrary to the welfare, interest or benefit of the business” of the defendant. The referee does not regard the language “business or calling” as covering the work which the plaintiff did in lowering the pump, this being a single specific act, and in no sense the undertaking of any “business or calling.” The remaining language above quoted includes the word “enterprise”; but a fair construction of the whole language would seem to be that it referred to some permanent occupation or employment which might be prejudicial to the interest of the defendant company, either by the plaintiff being employed in a competing business or by his employment in a business which would take away from the defendant his services for a large portion of the working hours which he should have devoted to the defendant’s interests. It does not appear to the referee that any language of the contract covers a mere solitary instance of a few hours’ work for the benefit of a fellow contractor. However, such an act might possibly be regarded as a breach of the contract which would justify the plaintiff’s discharge, since it is scarcely conceivable that the plaintiff could, with propriety, engage in an operation of this character in which he not only gave his own services, but used the services of men in the defendant’s employ, unless he had received permission to do this from the defendant company itself. No such permission was ever asked for. The referee, however, is of the opinion that under the authorities above cited, the fact that the plaintiff was not discharged by the defendant until over a month later, when the plaintiff’s violation of his duty had been known to him the day after its occurrence, would indicate a waiver of whatever breach the plaintiff might have committed and a condonation of the offense. One month’s delay without explanation thereof would seem to be an unreasonable time to wait before exercising the right to discharge after an offense of this character. The insertion of it as a reason for discharge in the letters written dismissing the plaintiff, seemed to be more or less of an afterthought.
    The referee therefore finds that the defendant’s discharge of the plaintiff was not justified.
    The referee awards to the plaintiff, the sum which he would have earned from the date of his discharge, March 6, 1906, until the end of his contract, October 1, 1907, with interest thereon to date, less the amounts which the testimony shows the plaintiff earned during the interval, together with interest on these amounts to date:
    Balance due under the contract.................... $4,693.00
    Interest thereon to date...... 642.24
    Total.................. .$5,335,24
    Amount earned during 1906. . $87.50
    Interest thereon to date...... 14.44
    Amount earned during 1907.. 737.10
    Interest thereon to date...... 82.93
    Total.................. . $ 921.97
    Balance due............................ $4,413.27
    Which sum is awarded to the plaintiff.

      Error assigned was order dismissing exceptions to report of referee.

      John G. Johnson, with him James E. Hood, for appellant.

      Owen J. Roberts, with him John J. McDevitt, Jr., for appellee.
   Per Curiam,

February 14, 1910:

Under the first four findings of fact by the referee, the appellant had no right to discharge the appellee for inefficiency. If his acts of disobedience and his intoxication constituted causes for his discharge, they were clearly condoned by the appellant by continuing him in its employ for a year and a half after his last refusal to obey an order and for nearly two years from the time he was somewhat under the influence of liquor while at work. If the use of the defendant’s men on February 2, 1906, to assist another contractor gave the appellant the right to discharge the appellee, the learned referee has found that the right was waived and in so holding says: ‘'The fact that the plaintiff was not discharged by the defendant until over a month later, when the plaintiff’s violation of his duty had been known to them the day after its occurrence, would indicate a waiver of whatever breach the plaintiff might have committed and a condonation of the offense. One month’s delay without explanation thereof would seem to be an unreasonable time to wait before exercising the right to discharge after an offense of this character. The insertion of it as a reason for discharge in the letters written dismissing the plaintiff, seemed to be more or less of an afterthought. The referee therefore finds that the defendant’s discharge of the plaintiff was not justified.”

Whether a master has waived a breach of contract by his servant by retaining him in service after knowledge of such breach is a question of fact. Prima facie such retention is a waiver, and condonation is presumed; but if there are circumstances shown that tend to establish a reasonable and proper reason for the delay in discharging, it is for a jury to say whether in fact the breach was condoned: Wood’s Law of Master & Servant, sec.. 123. The finding of fact by the referee that the appellee’s breach of duty was waived by the appellant was in effect a verdict of a jury, based upon sufficient evidence, and therefore is not to be disturbed.

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