text:
    Mellon National Bank v. People’s Bank, Appellant.

      Practice, C. P. — Evidence—Restricted offer — Offer of statement and affidavit of defense.

    1. Where at the trial of an action of assumpsit the plaintiff offers in evidence a statement of claim and affidavit of defense “for the purpose of showing the facts which are averred in the plaintiff’s statement upon which the plaintiff seeks to recover which are not denied by the affidavit of defense,” the effect of the offer is to restrict the affidavit as a matter of evidence within the one purpose assigned, and it becomes part of plaintiff’s case for no other.
    2. In such a case where none of the facts averred in plaintiff’s statement are traversed by the affidavit of defense, and the defendant offers no evidence in support of the averments in the affidavit of defense alleged as matters of defense, the plaintiff’s case is a prima facie one, and calls for binding instructions.

      Banks and banking — Statement of claim — Prima facie case — Checks.
    3. In an action to recover the amount of two checks averred to have been included in an account stated between the plaintiff and defendant, two banks, the statement of claim makes out a prima facie case which avers that the checks were drawn by the cashier of the defendant bank to the order of an individual; that the plaintiff had received these checks in the course of business from a bank duly indorsed by such bank, that the plaintiff added its own indorsement and transmitted the checks to the defendant; that notwithstanding the checks were without the indorsement of the original payee, the defendant accepted them and credited plaintiff therewith; that defendant advised the plaintiff of each of the said credits as it was entered, and that relying upon the credit given it by the defendant, the plaintiff paid the amount of the checks to the bank which presented them.
    Argued Oct. 14, 1909.
    January 3, 1910:
    Appeal, No. 105, Oct. T., 1909, by defendant, from judgment of C. P. Washington Co., May T., 1909, No. 25, on verdict for plaintiff in case of Mellon National Bank of Pittsburg v. People’s Bank of California.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Assumpsit to recover the amount of three checks included in an account stated. Before Taylor, J.
    The opinion of the Supreme Court states the case.
    Verdict and judgment for plaintiff for $6,262.91. Defendant appealed.

      Errors assigned were in giving binding instructions for plaintiff and in overruling motion for judgment for defendant non obstante veredicto.

      John C. Bane, with him Owen C. Underwood and B. H. Meloy, for appellant.

      B. W. Irwin, with him Beed, Smith, Shaw & Beal, Birch & McCreight and J. A. Wiley, for appellee,
    cited on the question of practice: Neely v. Bair, 144 Pa. 250.
   Opinion by

Mr. Justice Stewart,

If this were an appeal from a judgment for want of a sufficient affidavit of defense, the questions discussed upon the argument and upon which the case was supposed to turn, would be for our consideration; but it is an appeal from the refusal of the court to enter a judgment non obstante; and therefore brings before us nothing but the sufficiency of plaintiff’s case, as established on the trial, to justify the verdict which the jury rendered under binding instructions. The plaintiff submitted its case on the statement of claim filed and the affidavit of defense, both of which it offered and then rested. The defendant offered no evidence in support of the averments in the affidavit of defense, and nothing which was at variance with the facts appearing in the plaintiff’s statement. The facts set out in the statement, if admitted, established a prima facie case unquestionably. The demand was based on an account stated, which was set out with particularity. It became simply a question of the proper application of an admitted rule of court, which is as follows: “Rule 3: If the plaintiff shall file, on or before the return of the writ, a specification of the items of his claim, and statement of facts necessary to support it, verified by affidavit, such items of the claim and material averments of fact as are not directly traversed or denied by the affidavit of defense, shall be taken as admitted. The same rule shall apply to a specification of set-off and statement filed by the defendant, the plaintiff’s counter affidavit to be filed within ten days after notice.” We are concerned with the affidavit of defense only to discover from it the extent of the burden left on the plaintiff to prove the facts averred in the statement. What it did not deny, it admitted. The material averments in the statement were, that the amount sued for was the balance on the stated account; that into this account there entered three checks drawn by the cashier of the defendant bank to the order of one M. L. Burd; that the plaintiff had received these checks in the course of business from the Monongahela Bank of Brownsville, duly indorsed by the bank last mentioned; that the plaintiff added its own indorsement and transmitted the checks to the defendant; that notwithstanding the checks were without the indorsement of the original payee, the defendant bank accepted them and credited the plaintiff therewith; that defendant advised the plaintiff of each of said credits as it was entered, and that relying upon the credit given it by the defendant, the plaintiff paid the amount of the checks to the Monongahela National Bank. Not one of these averments was denied. What was claimed by way of defense was, first, that in giving credit to plaintiff for the cheeks, defendant relied upon the guarantee of the indorsement by the plaintiff; and second, that M. L. Burd, the payee named in the checks, never received any part of the money called for by the checks; and third, that at the time plaintiff claimed to have charged the defendant with the amount of the checks in its books, plaintiff had knowledge of such fact. Had the defendant offered evidence to support these averments, and a verdict for plaintiff had been directed notwithstanding, the questions which they suggest would necessarily arise. Instead of doing this it relied wholly upon the fact that plaintiff had offered the statement and affidavit of defense, and insisted that because it had so introduced it, the statements it contained were to be taken as admitted. Plaintiff’s offer was accompanied with this statement of purpose, “ For the purpose of showing the facts which are averred in the plaintiff’s statement upon which the plaintiff seeks to recover in this case which are not denied by the affidavit of defense.” The effect of this was to restrict the affidavit as matter of evidence within the one purpose assigned, and it became part of plaintiff’s case for no other. “The defendant’s abstract having been offered and admitted for a specific purpose, was before the jury for no other purpose. No particular instrument or averment contained in it became part of the plaintiff’s case so as to relieve the defendant from making out his own title:” Page v. Simpson, 172 Pa. 288. None of the facts appearing in plaintiff’s statement being traversed by the affidavit of defense, and these establishing a prima facie case, with nothing whatever in the way of evidence introduced by the defendant, it was a case calling for binding instructions. This disposes of the only question before us. No question as to the effect of plaintiff’s indorsement of checks unindorsed by the payee therein named arises in this case. The defendant’s liability on the check is nowhere denied. If the plaintiff’s indorsement implied a warranty that plaintiff was the legal holder of the checks, it will be time enough to assert the warranty when the defendant bank shall have been required to pay them by the payee notwithstanding the previous payment to the plaintiff.

The assignments are overruled and judgment is affirmed.


source: Caselaw Access Project

author: Mr. Justice Fell,

license: Public Domain

text:
    Reagan, Appellant. v. Curran.

      Equity — Evidence—Parol license to use real estate — Estoppel.
    1. The testimony to establish an irrevocable parol license to occupy the land of a testator for an indefinite period should be of the same character as that required to take a parol sale or gift followed by posession and improvement out of the operation of the statute of frauds. If the claim to such right is set up by a child of the testator he should be held rigidly to the proof by direct, positive and unambiguous evidence of all the facts which courts of equity regard as equivalent to written contracts.

      Will — Construction—Ambiguity—Legacy—Extrinsic evidence.

    2. Where a testator bequeaths “a five hundred dollar interest” in land occupied by his son-in-law to his son-in-law, upon which land the latter had constructed a building, and there is nothing in the will to create an ambiguity, extraneous evidence will not be admitted to show that it was the intention of the testator to give this whole estate in the land to his son-in-law.
    Argued Oct. 14, 1909.
    Appeal, No. 152, Oct. T., 1909, by plaintiff, from judgment of C. P. Washington Co., May T., 1908, No. 93, on verdict for defendants in case of John T. Reagan, Guardian of Marcella Chambers, a Minor, v. P. A. Curran and Julia B. Curran.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Ejectment for land in Cecil township. Before McIl-VAINE, P. J.
    The facts are stated in the opinion of the Supreme Court.
    Verdict and judgment for defendants. Plaintiff appealed.

      Errors assigned were various instructions indicated in the opinion of the Supreme Court.

      Norman E. Clark, with him Winfield Mcllvaine, for appellant.
    In a case between parent and child, as in the case at bar, the evidence of the contract, arrangement or agreement must be clearer and stronger than between strangers, and the evidence to support it must be direct, positive, express and unambiguous. Not only must the terms and conditions of the contract and its subject be well and clearly defined, but the contracting parties must have been brought together face to face: Wright v. Nulton, 219 Pa. 253; Harris v. Richey, 56 Pa. 395; Shellhammer v. Ashbaugh, 83 Pa. 24.
    January 3, 1910:
    A contract is not to be inferred from the declarations of one of the parties. If it could be, it might be enforced against one party and not against the other. See Taylor v. Henderson, 38 Pa. 60; Ackerman v. Fisher, 57 Pa. 457; Edwards v. Morgan, 100 Pa. 330; Burgess v. Burgess, 109 Pa. 312; Derr v. Ackerman, 182 Pa. 591.
    Some reliance is placed upon the improvements made by the defendant, but, having been made without an actual gift, and only on the expectation or promise of a gift, they do not avert the rule of the statute: Poorman v. Kilgore, 26 Pa. 365.

      James I. Brownson, with him T. F. Birch, for appellees.-
    -The doctrine of irrevocable licenses is firmly established in Pennsylvania, and there is a long line of cases recognizing and enforcing it: Le Fevre v. LeFevre, 4 S. & R. 241; Rerick v. Kern, 14 S. & R. 267; McKellip v. McIlhenny, 4 Watts, 317; Swartz v. Swartz, 4 Pa. 353; Ebner v. Stichter, 19 Pa. 19; Cumberland Valley R. R. Co. v. McLanahan, 59 Pa. 23; Lacy v. Arnett, 33 Pa. 169; Thompson v. McElarney, 82 Pa. 174; Pierce v. Cleland, 133 Pa. 189; Hopkins v. Stoneroad, 21 Pa. Superior Ct. 168; Cole v. Power Co., 216 Pa. 283.
    Should it be considered that there is any plausibility in the construction advanced by the appellant, there would then be two possible interpretations, and testimony showing such facts as would enable the court to stand in the testator’s position, and see which of the two things he did intend, would be admissible and proper to take into account in putting a construction upon his language: Gilmor’s Est., 154 Pa. 523; Dutton v. Suplee, 8 Pa. C. C. Rep. 92; Postlethwaite’s App., 68 Pa. 477; Stambaugh’s Est., 135 Pa. 585; MacConnell v. Wright, 150 Pa. 275.
   Opinion by

Mr. Justice Fell,

This was an action of ejectment in which the plaintiff claimed title for his ward under the following clause of her father’s will: “unto P. A. Curren my son in law I will and bequeath a five hundred Dollar Interest in what is known as the

(Bought from Sadia a Clark)

property with a Hotel Building situated there on and I further will that the Remaind of said property go to My Daughter Marcella Chambers and her Aunt J. B. Karlskint to own the same accept that they be Bound by this will to Pay for a suitable Monument to be placed at the graves of Robert Chambers and his wife the Cost of said Monument not to exceed four hundred dollars ($400) the remainder of said property to owned and enjoyed by the said Marcella Chambers and J B Karlskint ”

The defendants, P. A. Curran, the son-in-law, and Julia B. Curran, the daughter of the testator, set up by their answer two grounds of defense to the action: (1) that the testator three years before his death entered into a parol agreement with them, whereby he authorized them to enter upon the ground in question, which consisted of two vacant lots, and to improve the same by erecting buildings thereon, and promised and agreed that in consideration of their so doing he would devise the premises to them in fee simple; that on the faith of this agreement they took open, notorious and exclusive possession of the premises, and with the knowledge and approval of the testator erected a substantial hotel building; that for their outlay they could not be adequately compensated in damages, and that the agreement was so far performed that its rescission would be against equity; (2) that the testator by his will, whereby he bequeathed “a five hundred Dollar Interest” in the property to P. A. Curran, intended to carry out and perform his part of the parol agreement by devising to P. A. Curran for the use of himself and his wife the whole interest which he, the testator, owned at the date of his will, to wit, “the title to the naked lot, which lot was and was regarded by the testator as being of the value of $500; a'nd by the said will the said title to said premises was devised to the defendant.”

There was no adequate proof at the trial of a parol agreement to devise the land. The learned trial judge so found and so instructed the jury, and this ground of defense was abandoned. But it was contended by the appellants that they erected the hotel building at their own expense and for their own use on the land of the testator with his permission, and that by reason of their expenditure of money on the faith of the permission to occupy the land, there arose in their favor an irrevocable license to continue in occupation of the ground for the life of the building; and also that they had acquired title by virtue of the will, the true intent of which, construed in the light of surrounding circumstances, was that it devised to P. A. Curran the testator’s title to the ground occupied by the building and the curtilage. Testimony was admitted to show the value of the ground at the date of the execution of the will, and that the testator owned other land bought of Sadie A. Clark, to which the words, “the Remaind of said property go to My Daughter Marcella Chambers and her Aunt J. B. Karlskint” might be applied. And the jury were instructed that if the testator gave to P. A. Curran the land in dispute and put him in possession thereof to the end that he should erect a hotel building thereon at his own expense and for the benefit of himself and wife, and the building had been so erected; if the testator owned other land bought of Sadie A. Clark; and if the value of the land on which the hotel building was erected was not at the date of the will more than $500, the proper construction of the will devised the legal title to the land to P. A. Curran. They were directed, if they so found, to render a verdict for the defendants.

We do not find in the will an ambiguity that warranted the introduction of extraneous evidence to determine the intention of the testator. His meaning is inartificially expressed, but we think it clear that his intention was to give to his son-in-law a money legacy to be charged on the lots devised to his daughter and her aunt. As first written, the property was described as “the Sawyer property with a hotel building situated thereon.” When the mistake in the use of the word Sawyer” was discovered, the word was crossed out and the words “Bought from Sadie A. Clark” substituted in describing the property. In giving to his daughter and her aunt “the remainder of said property” he had reference to this particular property and not to some other property of which it was a part.

Whatever contrariety there is in the decisions on the subject in other jurisdictions, it is settled in this state by a line of decisions following La Fevre v. La Fevre, 4 S. & R. 241, and Rerick v. Kern, 14 S. & R. 267, that a parol license relating to the use or occupation of real estate executed by the expenditure of money and labor may be irrevocable where the continued enjoyment of the license is the only adequate remuneration for the expenditure made. These decisions rest upon the principle of equitable estoppel to prevent the legal title from being used as a means of injustice: Huff v. McCauley, 53 Pa. 206. But the right set up is an equitable one, and the rules of evidence that apply are those that prevail in chancery. “A chancellor is judge both of the equity and the facts. It is in his discretion whether he will send an issue to a jury. And if he does their verdict is only advisory. It is not conclusive upon him. Whenever, therefore, upon the trial of an ejectment founded upon an equitable title, the court is of opinion that the facts proved do not make out a case in which a chancellor would decree a conveyance, it is their duty to give binding instructions to that effect .to the jury:” Todd v. Campbell, 32 Pa. 250. “Every right founded upon a claim that is strictly equitable, whatever the form of procedure, should be supported by evidence that would satisfy a chancellor:” Juniata Building & Loan Assn. v. Hetzel, 103 Pa. 507. See also Nicolls v. McDonald, 101 Pa. 514; Baldwin v. Taylor, 166 Pa. 507, and cases cited in the opinion of Judge Hemphill on which the judgment was affirmed. The right set up by the defendants was an irrevocable license to occupy the land of the testator for an indefinite period. The testimony to establish such a right should be of the same character as that required to take a parol sale or gift followed by possession and improvement out of the operation of the statute of frauds. Admittedly it was insufficient to do that. It fell far short of the higher standard of proof essential where the alleged agreement is between parent and child. The latter should be held rigidly to the proof by direct, positive and unambiguous evidence of all the facts which courts of equity regard as equivalent to a written contract: Harris v. Richey, 56 Pa. 395; Shellhammer v. Ashbaugh, 83 Pa. 24; Erie, etc., R. R. Co. v. Knowles, 117 Pa. 77.

The judgment is reversed with a procedendo.


author: Mr. Justice Stewart,

text:
    Monongahela National Bank, Appellant, v. First National Bank of California, Pennsylvania.

      Banks and banking — Checks—Agency—Surrender of money after payment of check — Contract—Illegal contract — Fraud.
    1. Where a collecting bank receives payment of a check, and on the same day pays back the money on notice that the check was a fraudulent one, and returns the check to the bank which sent it without giving any notice that the check had been in fact paid and the money returned, the collecting bank in a suit against it by the transmitting bank to recover the proceeds of the check which had been paid, cannot set up as a defense the fact that the cashier of the transmitting bank had knowledge of the fraudulent character of the check.
    2. It is never a defense to an action by a principal for money collected by his agent for the latter to show that in equity and good conscience the money belonged to a third party. He cannot deny his principal’s title.
    3. If an agent has received money from third persons for his principal by his authority, which money accrued from an illegal transaction between the principal and such third persons, who have no connection with the agent, the principal may recover it from his agent, for, as between them, the receipt of the money for the principal is upon a legal contract, although the money itself accrued under a former illegal transaction.
    Argued Oct. 14, 1909.
    Appeal, No. 172, Oct. T., 1909, by plaintiff, from judgment of C. P. Washington Co., Aug. T., 1908, No. 64, on verdict for defendant in case of Monongahela National Bank of Brownsville v. First National Bank of California, Pa.
    Before Mitchell^ C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.

      Assumpsit to recover the proceeds of a check. Before Taylor, J.
    The facts appear by the opinion of the Supreme Court.
    Verdict and judgment for defendant. Plaintiff appealed.

      Error assigned was in refusing binding instructions for plaintiff.

      T. Jeff. Duncan, with him O. 8. Chalfant, Boyd E. Warne, B. W. Irwin, and Jas. A. Wiley, for appellant.
    If the collecting bank surrenders the check to the bank on which it is drawn, and accepts a cashier’s check or other obligation in lieu thereof, its liability to its depositor is fixed as much so as if it had received the cash. It has no right, unless specially authorized to do so, to accept anything in lieu of money: Fifth Nat. Bank v. Ashworth, 123 Pa. 212, 219; Marine Bank v. Fulton Bank, 69 U. S. 252; Hazlett v. Com. Nat. Bank, 132 Pa. 118; Paul v. Grimm, 165 Pa. 139, 150; Graydon v. Patterson, 13 Iowa, 256.
    An agent, who collects money for his principal, holds it for the principal and cannot lawfully dispute the principal’s title or do anything to deprive the principal from taking it into his possession: Order of Active Workers v. Smith, 1 Pa. Superior Ct. 1.
    Having received settlement in money or its equivalent from the People’s Bank, the defendant became, eo instante, the plaintiff’s debtor and liable to the plaintiff in an action of assumpsit for the 15,000: Long v. Rhoads, 126 Pa. 378; Paul v. Grimm, 165 Pa. 139; 1 Tr. & H. Prac., sec. 32; 2 Tr. & H. Prac., sec. 1492; Brown v. Delk, 132 Pa. 152.

      James I. Brownson and Owen C. Underwood, for appellee.—
    It has uniformly been held in Pennsylvania that money paid on a mistake of facts may be recovered back, provided the mistake has not injured (or the rectification of it by the recovery back would not injure) the party to whom the payment was made: Girard Trust Co. v. Harrington, 23 Pa. Superior Ct. 615; Meredith v. Haines, 14 W. N. C. 364.

      January 3, 1910:
    We would, of course, admit that if the People’s Bank had no right to demand repayment, the defendant would have no right, without plaintiff’s consent, to make the repayment; but when the paying bank has a right to demand repayment, the collecting bank (although merely an agent for collection) has a right to comply with such a demand, and then set up as a defense against its principal the rights of the bank which made the payment by mistake, because these rights are superior to and override the rights of the principal: Allen v. Fourth National Bank, 59 N. Y. 12; Tradesmen’s Bank v. Third Nat. Bank, 66 Pa. 435.
   Opinion by

Mr. Justice Stewart,

The Monongahela National Bank of Brownsville, plaintiff, on November 7 or 8, 1907, transmitted to the First National Bank of California, defendant, for collection, from the People’s Bank of California, a check of which the following is a copy:

“$5000.00 California, Pa., July 16, 1907.

“PEOPLES BANK OF CALIFORNIA, PA.

“ Pay to the order of W. L. Lenhart

“ Five Thousand Dollars

“Cashier’s Check

“ O. F. Piper, Cashier

“ Indorsed:

“Monongahela Natl. Bank

“Brownsville, Pa.”

The check was received by the defendant bank on the morning of November 8, and was promptly presented by it, on the same morning, at the counter of the People’s Bank. It was as promptly redeemed by that bank and marked paid, the defendant bank receiving upon its surrender payment in full. It is wholly immaterial that the payment was made by a draft. It is agreed that the draft was the equivalent of cash, and it is unnecessary for the purposes of the case to follow its history. During the afternoon of the same day the People’s Bank made demand on the defendant bank for a return of the money paid to it on the check, alleging that payment had been made through mistake; that the bank had discovered, since payment, that the check was fraudulently issued by Piper its cashier, and that it represented no indebtedness of the People’s Bank. The defendant thereupon returned to the People’s Bank the money paid, and received back the check, which it promptly returned to the plaintiff bank with notice that payment was refused. The action was brought to recover from the defendant bank the amount it received from the People’s Bank as the plaintiff’s collecting agent. The defense set up was that the cashier’s check had been issued by Piper to Lenhart in fraud of the People’s Bank, and that the plaintiff bank was chargeable with notice of the fraud before its acceptance of the check. The case was submitted to the jury with the following instruction, which was an affirmance of one of defendant’s points. “ If the jury find that the cashier’s check for 15,000 was issued by O. F. Piper to W. L. Lenhart without the receipt by the People’s Bank of California of any consideration therefor, and in fraud of said bank; that at the time it was taken by the cashier of the Monongahela National Bank, he knew or had reason to believe the fraudulent character of the check; that at the time the assistant cashier of the People’s Bank gave to the First National Bank a Pittsburg draft in payment for said check, he was ignorant of the fact that it had been issued without consideration, and fraudulently; that later in the same day and while the money so received by the First National Bank was still in its control, demand was made upon it by the People’s Bank to return said draft and take back the cashier’s check on the ground that the payment thereof had been made by a mistake of fact, and in compliance with such demand the First National Bank thereupon did return said draft and take back the cashier’s check; that thereupon said cashier’s check was protested and returned as unpaid to the plaintiff bank, which with knowledge of the fact that the First National Bank had so given back the Pittsburg draft and taken back as unpaid the cashier’s check, retained said check after getting it on November 9, 1907, until the bringing of this suit on June 8, 1908, the verdict should be for the defendant.” No complaint is made with respect to this submission of the case, other than that there was not sufficient evidence to support a finding that at the time plaintiff’s cashier accepted the check from Lenhart, it knew or had reason to believe that the check had been uttered fraudulently. The plaintiff’s contention is that the evidence on this branch of the case was insufficient. Plaintiff asked instruction that under all the evidence in the case the verdict should be for the plaintiff. This was refused, and the refusal is made the subject of the twelfth assignment of error. Had the action been against the People’s Bank on the cashier’s check, the defense here set up would have been entirely proper, and conclusive if established by the evidence. But it by no means follows that because proper in that case it is available in this. The cause of action not being the same in one case as in the other, the parties defendant necessarily stand in different rights. Here the action is not based on the check, and the liability that is asserted against the defendant arises out of a fact occurring after defendant’s agency in connection with the check had ceased. After the defendant had surrendered the check, it had in its hands money which it had received for the plaintiff, and it is for the recovery of this that this action for money had and received was brought. Therefore it is, that if the defense set up here can avail the defendant, it must be for other reasons than because it would avail the People’s Bank in a suit on the check. We think it equally clear that any other that could be suggested would be quite as insufficient. Since the defendant stood toward the plaintiff, with respect to the money in his hands, as agent, and since its liability did not arise directly from the check, and did not in any way depend on the integrity of the transaction from which the money resulted as between the plaintiff and the party who paid it over, the issue warranted no inquiry with respect to the origin of the check or the manner in which plaintiff acquired title to it. In allowing defendant to enter upon such inquiry a settled rule of law was disregarded. An agent may not be allowed to deny the title of his principal to the subject-matter of the agency. The check was not the subject-matter of the agency, for agency with respect to it terminated when the check was surrendered; it was the money which the agent had received for its principal which was the subject-matter. More than this; admitting the facts with respect to the check to be as claimed, that it was issued in fraud of the People’s Bank and that the plaintiff in accepting it was chargeable with notice of the fraud, these facts would establish no legal defense to plaintiff’s demand. Nothing but payment to the plaintiff, or what would be its equivalent, payment to another under legal compulsion, could acquit the defendant of liability. It is never a defense to an action by principal for money collected by the agent, for the latter to show that in equity and good conscience the money belonged to a third party. Of course it is open for the defendant to show that the subject-matter of the agency was an illegal or immoral transaction, or that it was founded in fraud; and when either of these is shown the principal will not be allowed redress against the agent touching the transaction; but here nothing of this kind could be alleged of the subject-matter of this agency, which was money had and received by the agent. The taint that was upon the check was not communicated to the money that was paidjior its redemption. The distinction is made very clear in Story on Agency, p. 279, editor’s note, from which we quote, “But, where the recovery from an agent is not sought through or upon, the illegal contract, but upon the new collateral contract, not illegal, there it may be recovered. Thus, if an agent has received money from third persons for his principal by his authority, which money accrued from an illegal transaction between the principal and such third persons, who have no connection with the agent, the principal may recover it from his agent, for, as between them, the receipt of the money for the principal is upon a legal contract, although the money itself accrued under a former illegal transaction.” That the principle here stated has received general recognition in the courts of this country abundantly appears from the list of cases cited in 31 Cyc. of L. & P., pp. 1483-1484, in support of the following text: “An agent cannot be compelled to account for funds or property received by him for his principal in the course of an illegal transaction where the right of recovery and the illegal transaction are so closely connected that the principal cannot enforce his right without showing the illegality. But where the illegal transaction has been completed, and the principal relies for his right to an accounting upon a collateral and independent obligation not connected therewith, the agent may be compelled to account for the funds or property so received, although arising out of the illegal transaction, and will be precluded from setting up the illegality of the transaction as a defense.” Our own authorities are quite as explicit as to the only test to be applied when such defense is set up. It is only necessary to refer to Swan v. Scott, 11 S. & R. 155, where it is said: “The test whether a demand connected with an illegal transaction, is capable of being enforced at law, is whether the plaintiff requires the aid of the illegal transaction to establish his case. If a plaintiff cannot open his case without showing that he has broken the law, a court will not assist him, whatever his claims in justice may be upon the defendant, and if the illegality be malum prohibitum only, the plaintiff may recover, unless it be directly on the forbidden contract.” There is no question here of ratification by the plaintiff of the unauthorized act of its agent in repaying the money to the People's Bank. The check was returned to the plaintiff with notice of protest for nonpayment, without any intimation that it had been once paid, and that the money had afterwards been refunded. There was evidence to the effect that several persons connected with the People’s Bank had told plaintiff’s cashier that the check was a fraud on the bank, and that the bank would not redeem it; but it nowhere appears that the fact that the check had actually been paid to its agent, and the money refunded by the latter was even brought to the attention of the plaintiff. It follows from what we have said that plaintiff was entitled to an affirmance of its third point, which was that “ under all the evidence in the case the verdict should be for the plaintiff.” The refusal of the point is the subject of the twelfth assignment of error, and this assignment is, sustained. The judgment is reversed and judgment is now entered for the plaintiff.


text:
    Leonard’s Estate.

      Orphans’ court — Auditor’s findings of fact — Guardian and ward— Sale of real estate.

    An auditor’s finding of fact that a guardian did not sell his ward’s real estate for an inadequate price, when based upon sufficient evidence, and confirmed by the orphans’ court, will be accepted as conclusive by the appellate court, unless manifest error is made to appear.
    Argued Oct. 15, 1909.
    January 3, 1910:
    Appeal, No. 192, Oct. T., 1909, by-Maude C. Leonard, now Maude C. Manon, from decree of O. C. Washington Co., May T., 1908, No. 62, dismissing exceptions to auditor’s report in Estate of Maude C. Leonard, now Maude C. Manon, a Minor.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Exceptions to report of H. B. Hughes, Esq., auditor.
    The opinion of the Supreme Court states the case.

      Errors assigned were in dismissing exceptions to auditor’s report.

      R. W. Irwin, with him J. A. Wiley, for appellant.

      James P. Eagleson, for appellee.
   Opinion by

Mr. Justice Fell,

This appeal is from a decree of the orphans’ court confirming the report of an auditor appointed to pass upon exceptions filed to the account of a guardian. It was sought at the audit to surcharge the guardian for selling the undivided interest of his ward in real estate at an inadequate price. It is conceded that the. exceptions to the guardian’s account could not be sustained without proof of actual fraud or gross negligence, and that this appeal cannot be sustained without overruling the findings of fact by the auditor, approved by the court. There was no evidence of actual fraud, and the auditor reported that the undivided interest of the ward at the time of the sale was under the testimony at best but a matter of conjecture; that the guardian acted in good faith and under the advice of reputable counsel and that, although the price at which the sale of the undivided interest was made was at a less rate per acre than the whole tract would have sold for, it was not, under the circumstances, grossly inadequate. The court upon a review of the findings of the auditor and of all the testimony was of opinion that the guardian acted in entire good faith, and that the most that could be charged against him was a mistake in judgment. It would require very clear evidence of error to lead to a reversal of these findings. It has been repeatedly said that the findings of fact by an auditor, approved by the court, will be accepted as conclusively established unless manifest error is apparent: Plankinton’s Est., 212 Pa. 235.

The decree is affirmed.


author: Mr. Justice Mestrezat,

text:
    Byers, Appellant, v. Hempfield Township.

      Equity — Injunction—Inadequate remedy at law — Taxation.
    1. Equity has jurisdiction, to restrain by injunction an attempt on the part of the supervisors to enforce the collection of a road tax which they have no power to impose. If the tax is a lawful one, but the manner of collecting it is oppressive or unfair, the taxpayer injured has an adequate remedy at law by an appeal.
    2. A bill in equity by taxpayers against supervisors to enjoin the collection of road taxes will be sustained where the bill specifically avers that there was not sufficient valid legal indebtedness in making a levy of two mills for debt; that a one and one-half mills cash tax for state roads was excessive and much greater than the sum required for that purpose; and that the levy of a one-half mill cash tax for roadmaster’s salary and expenses was without authority of law.
    Mr. Justice Elkin dissents.
    Argued Oct. 15, 1909.
    Appeal, No. 2, Oct. T., 1910, by plaintiffs, from decree of C. P. Westmoreland Co., No. 652, In Equity, dismissing bill in equity in case of A. R. Byers et al., for themselves and other citizens and taxpayers of Hempfield Township, v. Hempfield Township and W. F. Holtzer et al., Supervisors, and Joseph Barclay, Treasurer of said Township.
    January 3, 1910:
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Bill in equity for an injunction. Before Doty, P. J.
    The facts are stated in the opinion of the Supreme Court.

      Error assigned was in dismissing the bill.

      John E. Kunkle, with him Edward E. Robbins, for appellants.
    The court had jurisdiction: Dunne v. Deegan, 43 Pa. 334; Childs v. Brown Twp., 40 Pa. 332; Conner’s App., 103 Pa. 356; Arthur v. School Dist., 164 Pa, 410; Light & Heat Co. v. Elk County, 191 Pa. 465; Payne v. School Dist., 168 Pa. 386; Miller v. German, 38 Pa. 309; Mitchell v. Kearns, 16 Pa. Superior Ct. 354.

      Róbt. W. Smith, with him W. S. Rial and James S. Moor-head, for appellees,
    cited: Frick Coke Co. v. Mt. Pleasant Twp., 222 Pa. 451; Moore v. Taylor, 147 Pa. 481; Van Nort’s App., 121 Pa. 118.
   Opinion by

Mr. Justice Mestrezat,

This bill was filed by the plaintiffs, citizens and taxpayers of Hempfield township, Westmoreland county, against the township and its supervisors and treasurer to restrain them from collecting a special cash road tax of five mills, or such part thereof as should be determined to be illegal and without authority of law. The bill averred, inter alia, that the supervisors had levied a work road tax for 1908 of three mills, and a cash road tax of five mills for the following purposes: “two mills for debt, one and one-half mills for construction of state roads; one-half mill for roadmasters’ and other salaries, etc., and one mill for maintenance and improvement of roads;” that there was not sufficient legal debt to warrant the levy of a two mill cash tax; that one and a half mills for construction of state roads is excessive and is not necessary; that the levy of one-half mill for roadmasters’ salaries and expenses is without authority of law; and that one mill for maintenance and improvement of roads is illegal. It was also averred that to permit the collection of the cash road tax would cause irreparable injury to the taxpayers in contemplation of the law and that the plaintiffs are without legal remedy. The defendants filed an answer to the several allegations contained in the bill, and averred that the court was without jurisdiction, the plaintiffs having a complete and adequate remedy at law. The learned court below sustained the objection to the jurisdiction and dismissed the bill. This raises the only question which we think is necessary to be disposed of on the present appeal.

In Frick Coke Co. v. Mt. Pleasant Twp., 222 Pa. 451, relied on by the court below, the plaintiff company filed a bill to restrain the defendants from collecting road taxes for the year 1907. The company contended that the tax should be levied upon the valuation of 1906 which, it claimed, was the last adjusted valuation. The taxing authorities levied the tax upon the valuation for 1907, which was finally adjusted after the date required by law for laying the tax. The taxing officers gave the plaintiff notice to pay the tax on the adjusted valuation of 1907, and the bill was filed to restrain the collection. The common pleas held that an injunction bill would lie, and, on appeal, was sustained by this court. In the opinion of this court, however, the well-settled doctrine was. recognized that if the property owner had an adequate remedy at law he must pursue it and could not invoke the assistance of a court of equity to redress his grievances. If the rate or assessment in that case had been irregular, or had been unfairly or improperly-imposed, or the valuation was too high, or the acreage assessed to the owner was too great, or for any similar reason was illegal, and an opportunity to appeal had been afforded, the owner would have been compelled to resort for relief to an appeal under sec. 36 of the Act of April 15, 1834, P. L. 509, 2 Purd. (12th. ed.) 1998. But the time for taking an appeal under the act of April 15, 1834, had passed before the taxing authorities had levied the tax and demanded payment of the plaintiff, and it was, therefore, held, as was manifestly apparent, that the statute did not afford the plaintiff company a remedy, and equity would take jurisdiction. We did not undertake to determine in what cases a party who was aggrieved by the “rate” or “assessment” could be relieved under the statute; we held that under the facts of the case presented for review the statute afforded no adequate remedy for the redress of the plaintiff’s grievances.

The bill filed by the plaintiffs in the present case specifically avers that there was not sufficient valid legal indebtedness of the township to warrant the supervisors in mailing the levy of the two mills cash tax; that the one and one-half mills cash tax to pay for state roads is excessive and a much greater sum than is required to meet the cost of such state roads; and that the levy of one-half mill cash tax for roadmasters’ salaries and expenses is without authority of law. It must be conceded that if these averments be sustained, the supervisors are not authorized to levy and collect a tax to pay such indebtedness. The bill does not aver that the acreage assessed to the owners is too great, or that the valuation is too high, or that the millage was irregularly or improperly fixed, the remedy for which is an appeal to the quarter sessions, but that the taxing officers are without authority of law to assess and collect the tax. The right of the supervisors to levy and collect taxes is conferred by statute for the purpose of paying the legal indebtedness of the township, and where there is no such indebtedness or the supervisors attempt to levy and collect taxes beyond what is necessary to meet the indebtedness, they are without jurisdiction and their acts become a nullity. In such cases the power to assess and collect taxes does not exist, and it is the duty of the chancellor, at the instance of one or more taxpayers, to enjoin the officers from collecting them. We think in such case there can be no doubt of the jurisdiction of equity.

In delivering the opinion in Arthur v. School District, 164 Pa. 410, Williams, J., said (p. 414): “When they (taxing officers) do this (attempt to enforce the collection of a tax which they have no power to impose) the taxpayer has a clear right to relief by injunction to restrain the illegal act. When the act of the taxing officers complained of is lawful, but is done in an oppressive or unfair manner, the remedy is by appeal. But if the.officers are without jurisdiction and the act is illegal, as in the case before us, the proper remedy is by injunction.”

In Banger’s App., 109 Pa. 79, we held: “When a tax is lawfully assessed, and there are mere irregularities in the valuation and assessment, the court of equity will not restrain its collection by injunction. But where there is a want of power to tax, or there is a disregard of constitutional provisions in the mode of assessment, equity will interfere by injunction to restrain its collection.” In St. Clair School Board’s App., 74 Pa. 252, Mr. Justice Mercur, delivering the opinion said (p. 256): “That a court of equity may enjoin against the collection of a tax levied without authority of law is undoubted. Even when legislative authority is given to tax for a certain purpose, yet if the tax levied is clearly in excess of the sum required for that purpose, its collection may also be enjoined.” This case was followed and appi'oved in the Appeal of Conners, 103 Pa. 356.

If there was no legal debt to authorize the levy of the two mills tax the supervisors were without jurisdiction and could not levy the tax. If they attempted to levy the tax beyond what was necessary for the construction of state roads, their act was without authority of law and cannot be sustained. It goes without saying that if they levied a tax to pay salaries and expenses which were not authorized by law, they had no jurisdiction and their act is void. These are the averments in the bill, and we think they are. sufficient to confer jurisdiction on a court of equity to determine the authority of the taxing officers to levy and collect the five mills cash road tax.

The decree of the court below is reversed with a procedendo.

Mr. Justice Elkin dissents.


text:
    Commonwealth v. Lee, Appellant.

      Criminal law — Murder—Insanity—Charge of court.

    1. On the trial of an indictment for murder it is reversible error for the court to charge the jury that they might acquit the defendant if they believed from the evidence that at the time of the killing he was insane, but that they “should be fully satisfied of defendant’s insanity.”
    2. On the trial of an indictment for murder, it is manifest error for the court to charge as follows: “The burden of reducing the crime from murder to manslaughter where it is proved that the prisoner committed the deed lies on him, but it is incumbent on the commonwealth to satisfy you beyond a reasonable doubt of those facts and circumstances which constitute a crime of murder in the first degree. If you are satisfied beyond a reasonable doubt that malice did not exist, then the killing would be manslaughter.”
    3. Where on the trial of an indictment for murder the prisoner presents a point which is not applicable to the case under the evidence, a wrong answer to the point is of no consequence except it be shown that the defendant was prejudiced thereby.
    Mitchell, C. J., Potter and Elkin, JJ., dissent.
    Argued Oct. 18, 1909.
    Appeal, No. 310, Jan. T., 1909, by defendant, from judgment of O. & T. Mifflin Co., Jan. T., 1909, No. 1, on verdict of guilty of murder of the first degree in case of Commonwealth v. Frank Lee.
    Before Mitchell, C.J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Indictment for murder. Before Woods, P. J.
    At the trial the prisoner introduced evidence tending to show that he was insane at the time of the killing.
    The prisoner presented the following points:
    6. That if the jury believe from the evidence in the case that the mind of the defendant was so affected by rage and passion arising from the provocation given as to be incapable of resisting the impulse of the moment, when the defendant fired the fatal shot, even though he intended to kill, he is but guilty of manslaughter. Ansiuer: If the intention to kill exists and the weapon was selected and the deed committed, it would be murder either of the first or second degree, unless you believe, gentlemen of the jury, that the defendant was insane. [3]
    8. The burden of proof never shifts but rests on the prosecution throughout, so that if the jury cannot find from the evidence malice beyond a reasonable doubt, such reasonable doubt is sufficient to reduce the grade to voluntary manslaughter. Answer: The burden of reducing the crime from murder to manslaughter where it is proved that the prisoner committed the deed, lies on him; but it is incumbent upon the commonwealth to satisfy you beyond a reasonable doubt of those facts and circumstances which constitute the crime of murder in the first degree. If you are satisfied beyond a reasonable doubt that malice did not exist, then the killing would be manslaughter. [4]
    10. If the jury believe from the evidence that at the time of the homicide the defendant was insane, he must be acquitted. Answer: This point is affirmed, but you should be fully satisfied of defendant’s insanity before you should acquit him of all crime. [6]
    Verdict of guilty of murder of the first degree. Defendant appealed.

      Errors assigned were (3, 4, 6) above instructions, quoting them.

      F. W. Culbertson, with him R. W. Patton, for appellant.—
    The prisoner’s eighth point should have been affirmed: Tiffany v. Com., 121 Pa. 165; Pannell v. Com., 86 Pa. 260; Com. v. Gerade, 145 Pa. 289; Coyle v. Com., 100 Pa. 573.
    The court erifed in its answer to the prisoner’s tenth point as the same placed upon the prisoner a greater burden in making out his defense of insanity than the law required of him: Pannell v. Com., 86 Pa. 260; Meyers v. Com., 83 Pa. 131; Com. v. Gerade, 145 Pa. 289; Coyle v. Com., 100 Pa. 573.

      L. J. Durbin, with him J. C. Houser, district attorney, for appellee.
    Where the killing is admitted and insanity or want of legal responsibility is alleged as an excuse, it is the duty of the defendant to satisfy the jury that the insanity actually existed at the time of the act, and a doubt as to such insanity will not justify the jury in acquitting him upon that ground: Lynch v. Com., 77 Pa. 205; Sayres v. Com., 88 Pa. 291; Com. v. Wireback, 190 Pa. 138; Com. v. Heidler, 191 Pa. 375.
    January 3, 1910:
   Opinion by

Mr. Justice Stewart,

Defendant was charged with the crime of murder. On the trial of the case this instruction was asked for on his behalf, “ If the jury believe from the evidence that at the time of the homicide the defendant was insane he must be acquitted.” The point was answered in this way, — “This point is affirmed, but you should be fully satisfied of defendant’s insanity.” In Meyers v. Com., 83 Pa. 131, where a like defense was set up, the instruction was that the defense could avail only as the jury were “satisfied beyond a reasonable doubt” that the prisoner was insane at the time the act was committed. We there held that the instruction was too stringent; that it threw the prisoner upon a degree of proof beyond the legal measure of his defense; that all that is required is proof which is satisfactory, such as flows fairly from a preponderance of the evidence; and the judgment was accordingly reversed. In Coyle v. Com., 100 Pa. 573, the instruction was that the defense of insanity must be established “by clearly preponderating evidence.” This was held to be error on the ground that it was practically saying that the defense was to be established beyond all doubt or uncertainty; and a reversal there followed. In Com. v. Gerade, 145 Pa. 289, the instruction was that the insanity relied on as a defense “must be clearly proved.” This was held to be error, and the judgment was reversed. In this latter case it was said, “As applied to the degree of proof required to rebut the presumption of sanity, and sufficiently prove the existence of insanity, there is no appreciable difference between the expression “clearly proved,” and “proved by clearly preponderating evidence.” If there is any difference the former calls for the higher degree of proof. It is almost equivalent to saying “ proved beyond a reasonable doubt,” because, if any doubt as to the existence of a particular fact exists, it cannot be said to be “clearly proved.” So here, the expression “fully satisfied of defendant’s insanity” can only be understood as meaning that the evidence must be so convincing as to leave the minds of the jury without doubt as to the existence of the fact alleged; for one cannot be said to be fully satisfied of the existence of a fact except as he is free from doubt on the subject. True, a reasonable doubt of the fact of insanity will not operate to acquit when this defense is set up; but then on the other hand, the fact that a doubt may remain in the mind does not necessarily convict, for as said in Meyers v. Com., 83 Pa. 131, when the evidence raises a balancing question, and the mind is brought to determine its preponderance, there may be a doubt still existing in the mind, yet the actual weight may be with the prisoner; and this proof should be considered satisfactory. We find nothing in the general charge which corrects in any way the error that is here committed. Repeatedly in the course of the charge the jury were told that in order to acquit on the ground of insanity, the evidence must satisfy the jury that this was the defendant’s mental condition. This in itself was correct enough; and it was repeated with a frequency that must have impressed the jury. But as an instruction it was inadequate, since in not a single instance where the instruction occurs, was the jury informed that what the law requires in such cases, in order to acquit, is that insanity be made to appear by a preponderance of the evidence; nor did the instruction conflict in the slightest with that given in the answer complained of. If there was error in the answer, as there certainly was, the charge did nothing to correct the mischief.

Still more pronounced was the error which is made the subject of the fourth assignment. In answer to a point submitted the court ruled as follows, “The burden of reducing the crime from murder to manslaughter where it is proved that the prisoner committed the deed lies on him, but it is incumbent on the commonwealth to satisfy you beyond a reasonable doubt of those facts and circumstances which constitute a crime of murder in the first degree.' If you are satisfied beyond a reasonable doubt that malice did not exist, then the killing would be manslaughter.” The error here is so manifest that it need not be particularized, much less discussed. The subject of the third assignment is the answer of the court to defendant’s sixth point. The point might well have been refused without more, since we see nothing in the evidence which makes it applicable to the case. That a wrong answer — in the sense that it was not responsive — was given, is of no consequence except it be shown that the defendant was prejudiced thereby. The answer was not responsive to the point; but the point was without correspondence to the case. When one withdraws from a fight and goes a half square away to his home, there gets a gun and coming back to the scene of the fight enters his antagonist’s house and shoots him, the law is not so indulgent to the infirmity of human nature as to extenuate the offense committed. And that was this case as presented in the evidence. It did not call for instruction as to the law governing cases where the defendant, while engaged in actual combat, or immediately upon sufficient provocation and in the heat of blood kills his antagonist. It is unnecessary to refer to the other assignments of error; an answer to each is to be found in what we have already said. The judgment is reversed and a venire de novo awarded.

Mitchell, C. J., Potter and Elkin, JJ., dissent.


author: Mr. Justice Potter,

text:
    Bannerot, Appellant, v. Davidson.

      Equity — Jurisdiction—Specific performance — Contract.

      1. A court of equity will not enforce a contract unless it can be enforced as an entirety, and if by the acts of a party or by reason of the circumstances it has become impossible to carry it out as a whole, the court will leave the parties to their remedies at law.
    2. Where three adjoining landowners agree in writing to open a private way across the extreme ends of their lots, and the writing is not recorded, and one of the owners sells his lot without giving notice of the agreement to the purchaser, who refused to be bound by it, equity will not enforce the contract as between the other two owners.
    Fell and Mestrezat, JJ., dissent.
    Argued Oct. 18, 1909.
    January 3, 1910:
    Appeal, No. 211, Oct. T., 1908, by plaintiff, from decree of C. P. No. 2, Allegheny Co., Oct. T., 1907, No. 651, dismissing bill in equity in case of Frederick G. Bannerot v. H. M. Davidson and Samuel Holmes.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Bill in equity for an injunction. Before Frazer, P. J.
    The facts are stated in the opinion of the Supreme Court.

      Error assigned was decree dismissing the bill.

      W. H. S. Thomson, with him Frank Thomson and Dunn & Moorhead, for appellant.
    This is an easement created by grant and not a mere license.
    Even a license may become an agreement on valuable consideration and irrevocable, as where its enjoyment is preceded by the expenditure of money: Rerick v. Kern, 14 S. & R. 267.

      George E. Alter, with him M. L. Thompson, for appellees.—
    The court properly held that the alley was destroyed by the sale of the Naylor lot and the repudiation of the agreement by the purchaser: Guest v. Homfray, 5 Ves. Jr. 818; Heaphy v. Hill, 2 Sim. & St. 29; Watson v. Reid, 1 Russ. &M. 236; Walker v. Jeffreys, 1 Hare, 341.
    The principles which have been applied where a right of common, extending over the lands of several persons, has been extinguished as to the land of one person, seem to be applicable to this case: Rotherham v. Green, 1 Cro. Eliz. 593; Tyrringham’s Case, 4 Co. 36.
   Opinion by

Mr. Justice Potter,

This was a bill in equity filed by Frederick G. Bannerot against H. M. Davidson and Samuel Holmes, praying for an injunction to restrain the defendants from excavating and grading, or erecting a building, upon land over which the plaintiff claimed a right of way. After hearing on bill, answer and proofs, the trial judge recommended that the bill be dismissed without prejudice to any right the plaintiff might have 'to proceed at law against either or both the defendants. Exceptions to the findings of the trial judge were dismissed, and plaintiff has appealed.

From the findings of facts by the trial judge, it appears that Bannerot, Davidson and Naylor owned three adjoining lots of ground in Allegheny, extending along Perrysville avenue from Richey avenue to Dunlap street. Upon October 16,1905, for their mutual advantage, they agreed in writing to create a private alley, or right of way, eight feet wide, across the extreme end of said lots, extending from Richey avenue to Dunlap street, for the purpose of affording access to all three of the lots from the rear. They also agreed, in case of sale by any of them to convey the property subject to the terms of this agreement. For some reason best known to themselves they further stipulated that the written agreement should not be recorded for a period of two years from its date; and it was not recorded. Afterwards Naylor sold his lot to H. M. Lindsay, without giving him notice of the agreement for the creation of the right of way above referred to, and Lindsay consequently refused to be bound by it or to recognize its terms, so that it became impossible to open the right of way extending through at the rear of the three lots from street to street, as had been provided for in the contract between the original parties.

On July 19, 1907, Davidson, the defendant here, served upon plaintiff, Naylor and Lindsay, a written notice requiring them to open the foadway or easement eight feet wide, provided for in the agreement, extending from Richey avenue to Dunlap street, and also to build the retaining wall referred to therein, and further notifying them that in case of their failure to do so within ten days from the date of the notice, he would construct the retaining wall at his own expense, and close the roadway over his lot, and would consider the agreement null and void. No action was taken, in response to this notice, and after the expiration of the time specified, Davidson began the erection of a brick stable at the rear end of his lot, close to the line of plaintiff’s lot, and directly across the right of way provided for in the agreement, Samuel Holmes, the other defendant, having the contract for the work.

From August 15, 1907, until September 5, 1907, the defendant and plaintiff were neighbors, residing on their adjoining lots, the properties involved in this suit, the work upon the stable proceeding from day to day from the time it was commenced until its completion. Plaintiff was aware of the building being constructed, and on September 5, 1907, when the brick walls were almost ready to have placed thereon the ceiling joists, filed the bill in this case and made application for a restraining order, defendant at that time having obligated himself to contractors for the expenditure of about 11,400 in and about the erection and construction of the stable, plaintiff making no objection or protest against the building until the bill in this case was filed.

Plaintiff’s contention is, that defendant by the erection of the stable referred to, is violating the provisions of the agreement of October 16, 1905, and depriving him of the right of way provided for therein. Defendant’s contention is, that the agreement was rendered void, first, in the conveyance by Naylor and wife to Lindsay'which deprived defendant' of the use of that portion of the right of way intended to afford him access to Dunlap street; and, second, because of the failure of plaintiff and Naylor to construct the retaining wall along the property of Mrs. McCall, as provided for in the agreement.

In his conclusion of law, the learned trial judge points out that the agreement to provide the right of way might have been made binding upon purchasers as well as upon the parties, had the paper been recorded; that presumably the advantage of access to all the properties from either street was one of the controlling reasons for the agreement; and that, as the case now stands, the agreement cannot be carried out as a whole. His final conclusion is, “As the whole scheme contemplated by the parties to the agreement of October 16,1905, cannot be carried out by reason of the failure by one of the parties to abide by its terms, the others are relieved of its provisions.” In other words, the proposition is, that a court of equity will not enforce a contract, unless it can be enforced as an entirety, and if by the acts of a party or by reason of the circumstances, it has become impossible to carry it out as a whole, the court will leave the parties to their remedies at law. Authority to support this proposition may be found in Bispham’s Equity (8th ed., 1909), sec. 376, in the suggestion that where the real intention of the parties can no longer be carried into effect, or if it cannot be enforced in its entirety, specific performance will be refused. Also in 2 Beach on Mod. Eq. Jurisp. (1892), sec. 623, where it is said that, “The general rule is that the court must be able specifically to execute every part of the contract and at the time the interposition is called for.”

The rule is so reasonable and just, that no extended quotation of authority to sustain it need be made. Where there has been a failure, or a partial failure of the consideration for a contract, a court of equity ought pot to compel specific performance of a part of the contract, for this would be to require the performance of something not agreed upon by the parties. A contract cannot properly be enforced by piecemeal. The only consideration moving to Davidson in this matter was the advantage of access to his property from the rear, and in driving through from street to street. When the possibility of that means of access was destroyed by one of the parties, in the sale of his lot without giving notice of the agreement to the purchaser, the consideration for the contract wholly failed, in so far as Davidson was concerned, and it would be an injustice to enforce the opening of the right of way over his lot, when it could not be opened from street to street. The agreement made by the parties was not for a right of way, or easement, over one lot, or over two lots, but it was for a right of way over the three lots, as a complete thing, and for the specific purpose of permitting passage from street to street, and in either direction. It may be further suggested that this agreement could hardly have been intended by the parties to have certain and lasting effect from its date, for they voluntarily left the way open for its possible annulment, by providing that it should not be placed upon record within two years, thus taking the chance of a sale by any of the parties within that time, to a stranger without notice. And as it turned out, the very contingency which they thus made room for did occur.

We think that a court of equity should not now interfere in this case; in favor of one of the parties, since it is not possible to do justice to the other party, by enforcing the entire contract according to its terms. Under this view of the case, it becomes unnecessary to consider whether or not the plaintiff was guilty of such lachps as would prevent him from invoking the aid of equity.

The decree of the court below dismissing the bill is affirmed, and this appeal is dismissed at the cost of the appellant.

Fell and Mestrezat, JJ., dissent.


text:
    First National Bank v. Colonial Hotel Company, Appellant.

      Corporations — Treasurer—Power to sign commercial paper — By-laws —Evidence.

    1. If the directors of a corporation acquiesce in the acts of its treasurer in executing or indorsing commercial paper while holding himself out to the public as having authority so to do, they thereby constitute him the general agent of the corporation to make such indorsement; and when the treasurer is thus made its general agent for such purpose, the corporation will be bound, though the indorsee had no knowledge of any previous indorsement.
    2. In an action against a corporation on a promissory note signed by the treasurer of the company, the burden is upon the plaintiff to show the authority of the treasurer to sign the note on behalf of the company. If the by-laws neither authorize nor forbid the treasurer to sign commercial paper, the plaintiff may offer testimony to show his authority, to the effect that the treasurer was a director of the company, owned three-fourths of its stock, was manager of a hotel operated by the company, kept the account of the corporation in bank in his name as treasurer, signed checks in his name as treasurer, had previously signed notes for the company, including one to the plaintiff, all of which had been honored and paid, where there was nothing to show that the company did not receive the proceeds of the note, except the failure of the books of the company to show that it did.
    Argued Oct. 18, 1909.
    Appeal, No. 12, Oct. T., 1909, by defendant, from judgment of C. P. No. 4, Allegheny Co., Fourth Term, 1907, No. 88, on verdict for plaintiff in case of First National Bank of Pittsburg v. Colonial Hotel Company.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elicin and Stewart, JJ.
    Affirmed.'
    Assumpsit on a promissory note. Before Carnahan, J.
    The note in suit was as follows:
    “14,316.78 Pittsburg, Pa., Apr. 22, 1907.
    “Thirty days after date we promise to pay to the order of Union Potteries Company Forty-three hundred sixteen seventy-eight Dollars at 2126 Farmers Bank Bldg., Pittsburg, Pa.
    “Without defalcation, for value received.
    “The Colonial Hotel Co.,

      “ F. C. Smith, Treas.
    “No............Due May 22-07.
    “Union Potteries Co.,
    “F. W. Fowler,
    “ President.
    “Paid % within note May 27-07, One thousand Dollars.”
    At the trial the court admitted under objection and exception the note in suit, also proof that F. C. Smith was a director of the company defendant, owned three-fourths of its stock, and had signed various notes of the company which had been paid [1-4].
    Defendant presented the following points:
    1. That under all the evidence in the case, the verdict must be for the defendant. Ansicer: That point is refused, because we have submitted to you the question of authority on the part of the treasurer. [8]
    2. That the jury must find a verdict for the defendant, because the plaintiff has shown no authority on the part of the treasurer of the defendant company to execute the note sued upon, nor any value received by said defendant corporation, by reason of such note. Answer: That point is refused, because I have already said the question of authority is for the jury. [9]
    4. The jury is instructed that before the plaintiff can recover in this case, it must show that before it acquired the note sued upon, it had knowledge of the making and signing by Smith, as treasurer of the defendant company, of the two notes at the Diamond National Bank. Answer: That point is refused. The question is, Did he have authority? — not whether that knowledge was brought home to the plaintiff company, but, did he or did he not have such authority? [10]
    Verdict and judgment for plaintiff for $3,512.39. Defendant appealed.

      Errors assigned among others were (1-4) rulings on evidence, quoting the bill of exceptions, and (8-10) above instructions, quoting them.

      Eugene Mackey, with him Cornelius D. Scully, for appellant.
    The treasurer of a corporation is charged only with the duty of receiving and caring for its funds; the office does not carry with it the implied power of incurring indebtedness or executing notes for the corporation. • If the treasurer attempts any such power, the burden is upon him who claims through such notes to prove express authority from the directors of the corporation for him so to do: Clark & Marshall on Corporations, sec. 793; Millward-Cliff Cracker Co.’s Est., 161 Pa. 157; Worthington v. Ry. Co., 10 Pa. Superior Ct. 117; Worthington v. Ry. Co., 195 Pa. 211.

      M. W. Acheson, Jr., of Patterson, Sterrett & Acheson, for appellee.
    Only where there is a by-law forbidding the corporate officer to sign his company’s name to corporate commercial paper is the holder restricted to proof of a prior course of dealing between himself and the corporation.
    January 3, 1910:
    Accordingly, Smith’s authority to make notes for his company was proved by satisfactory evidence which was uncontradicted.
    The plaintiff’s evidence was competent and ample: Culver v. Ice Co., 206 Pa. 481; Mining Co. v. Bank, 104 U. S. 192; Valentine v. Packer, 5 Pa. 333; Com. to use v. R. R. Co., 1 Grant, 329; Patterson v. VanLoon, 186 Pa. 367.
   Opinion by

Mr. Justice Mestrezat,

This is an action of assumpsit brought by the holder against the maker of a promissory note. The note was dated April 22, 1907, payable thirty days after date to the order of Union Potteries Company and signed: “The Colonial Hotel Co., F. C. Smith, Treas.” It was indorsed by the Union Potteries Company, and before maturity and for a valuable consideration was duly discounted in the ordinary course of business by the plaintiff bank, the present holder thereof.

On the trial of the cause, the defendant resisted a recovery on the ground that F. C. Smith had no authority to make the note, and that therefore it was not the note of the defendant corporation. This is the principal defense and the only one we need consider on this appeal. The learned court below submitted the question to the jury under a fair and adequate charge and a verdict was returned in favor of the plaintiff. Judgment having been entered on the verdict, the defendant has taken this appeal.

In the very recent edition of Thompson on Corporations it is said (vol. 2, sec. 1564): “If the directors of a corporation acquiesce in the acts of its treasurer in executing or indorsing commercial paper, while holding himself out to the public as having authority so to do, they thereby constitute him the general agent of the corporation to make such indorsement; and when the treasurer is thus made its general agent for such purpose, the corporation will be bound, though the indorsee had no knowledge of any previous indorsement.” The ground on which a business corporation is held liable on commercial paper made or indorsed by its treasurer in the absence of express authority conferred on him is stated by Bigelow, C. J., in delivering the opinion of the supreme judicial court of Massachusetts in Lester v. Webb, 83 Mass. 34, as follows (p. 36): “The rule is well settled that if a corporation permit their treasurer to act as their general fiscal agent, and hold him out to the public as having the general authority implied from his official name and character, and by their silence and acquiescence suffer him to draw and accept drafts, and to indorse notes payable to the corporation, they are bound by his acts done within the scope of such implied authority.”

The defendant company denies that Smith as treasurer had express or implied authority to make the note in suit. It is contended that the by-laws of the corporation define the powers and duties of the treasurer of the company, and that they confer no authority upon the treasurer to execute or indorse commercial paper. It is further claimed that Smith had no implied power by virtue of his office to execute the note; and that the plaintiff or the payee of the note had no prior course of dealing with Smith which would justify any implication that he had authority to execute and deliver the note.

Plaintiff concedes that Smith had no power by virtue of his office to bind the company by the execution of commercial paper, but contends that the evidence shows he was empowered to execute notes for the company; that it is only where there is a by-law forbidding the corporate officer to sign the company’s name to commercial paper or the authority is vested by a by-law in another officer that the holder is restricted to proof of a prior course of dealing between himself and the corporation; and that in this case there being no by-law delegating the authority to any officer to execute notes for the company or denying Smith’s power to exercise such authority, whether he had such authority or not was a fact to be proved to the satisfaction of the jury, and if so proved made the defendant liable on the note.

The Act of May 14, 1891, P. L. 61, amending sec. 5 of the general corporation Act of April 29, 1874, P. L. 73, which conferred a like power, authorizes corporations to enact by-laws which shall prescribe “the powers and duties of its officials.” The defendant corporation enacted certain by-laws prior to the negotiation of the note sued on, but they delegated to no officer the authority to make, indorse, or negotiate commercial paper. Nor did they prohibit the treasurer of the corporation from acting for it in dealing with commercial paper. We are, therefore, not called upon to determine what the liability of the company for Smith’s action would be if a by-law of the company had denied his authority to borrow money and execute notes therefor, or had conferred such authority upon another official of the company. In the cases relied on by the appellant, the by-laws expressly deprived the officer of the authority to act for the corporation.

The defendant corporation having under its charter the. power to borrow money, it necessarily had the authority to give an obligation therefor. The authority must have been vested in some official of the company. Who was he, and how would the payee of the note have obtained this information and the extent of the officer’s authority? He could not get it from the by-laws, nor would he have been justified in accepting the unofficial declaration of any of the directors as to the proper officer to execute the paper. It necessarily follows that as the by-laws were silent as to what officer of the company was authorized to execute a note for the corporation, it became a question of fact, and the burden was upon the plaintiff bank, before it could sustain its action, to show that Smith, the treasurer, possessed the authority to make the note in suit. It assumed the burden, and introduced evidence to sustain it. From the evidence the jury was justified in finding that the defendant was operating a hotel in the city of Pitts-burg; that the note in suit was made on April 22, 1907; that Smith was the treasurer of the corporation from its organization in 1903 till May, 1907; that during the same time he was a member of the board of directors of the company, and was the owner of 4,660 of the 6,420 shares of stock; that he was the manager of the hotel; that the company’s account was kept at the Diamond National Bank of the city of Pittsburg from June 2,1905, to May 1,1907, was in charge of Smith, and stood on the bank’s books: “Colonial Hotel Company, F. C. Smith, Treasurer,” a duplicate of the signature to the note in suit; that checks on the bank account were signed in the same way; and that in 1905 and 1906 other notes were signed by Smith in the same way and were discounted at the Diamond National Bank. Some of the notes were renewed and all of them were honored and paid. The evidence also disclosed the fact that on May 1, 1907, shortly after the plaintiff had received the second note, and. Smith had resigned and Dickson had been elected treasurer, the secretary of the defendant company transmitted to the Diamond National Bank the following resolution passed by its board of directors: “On motion duly made, seconded and unanimously carried, it was agreed hereafter that all notes must be duly signed by the treasurer and attested by the secretary and all bills must be approved by him and all checks and vouchers countersigned by both secretary and treasurer.” In view of the other facts recited above, this is substantially a declaration that prior to the adoption of the resolution the treasurer was himself authorized to perform these duties for the company.

The defendant company introduced no evidence to meet the plaintiff’s case. No director or other officer took the witness stand to deny the authority of Smith, as the agent of the company, to conduct its affairs or to execute commercial paper in its name. It did not attempt to show that the proceeds of this note were applied to Smith’s personal use, and the only evidence that the company did not receive the proceeds of the note is the failure of the books of the corporation to show that it did. This is not conclusive evidence of the fact. As suggested by the learned counsel of the appellee, Smith was the manager of the hotel and the note might have been given to the potteries company for china or other wares used in the hotel without the transaction being entered on the company’s books.

We think it was entirely competent for the plaintiff to show that Smith was the company’s agent for executing commercial paper; and that the evidence submitted was sufficient to justify the jury in finding, not only that fact, but that he was the general agent of the company with authority to transact any of its business affairs. Smith owned three-fourths of the stock of the company which was organized for the purpose of operating a hotel, was the manager of the hotel, and executed and delivered the only other notes given by the corporation and they were honored and paid. He was not only treasurer but also a director of the company. These and other facts alluded to above were known, or presumed to be known, by the board of directors, Mining Co. v. Anglo-Californian Bank, 104 U. S. 192, and their silence and acquiescence in Smith’s conduct must be accepted as their approval of it. It is the duty of the board of directors of a corporation to manage its affairs, and in the absence of anything being shown to the contrary, it will be presumed that they did so. It was for the jury to determine under the evidence submitted, whether in executing the note in suit Smith acted in pursuance of authority conferred by the directors: Com. v. Ohio & Pennsylvania R. R. Co., 1 Grant, 329.

The plaintiff is not relying upon a prior course of conduct between it and the treasurer of the company to hold the defendant liable on the note in suit. One other note in addition to the note in suit is the only paper of the corporation the plaintiff ever had. It therefore cannot rely upon any previous course of conduct to create an estoppel and sustain its action; but, as we have said, it rests its case upon the fact, which it alleges it has shown, that treasurer Smith was duly empowered by the corporation to make the note. As evidence of this authority, the plaintiff had the right to introduce evidence to show that Smith had executed other notes in the same way which had been duly honored and paid by the corporation. Likewise the other evidence offered by the plaintiff to show Smith’s relation to the company, the duties he performed, and the authority he assumed with the permission of the directors was competent and properly admitted.

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


text:
    Gunzburger v. Rosenthal, Appellant.

      Trover and conversion — Right of action — Principal and agent — Possession — Parties.
    1. As against a stranger possession alone is sufficient to maintain an action of trover and conversion, and in such case, the plaintiff need prove no more than possession.
    2. A salesman who delivers goods of his principal in his possession, to an intending purchaser under an agreement that the latter shall return them if the sale is not approved by his house, may maintain an action of trover and conversion to recover the goods if they are not returned according to the agreement.
    3. In such a case a memorandum of the items and the prices of the goods given by the agent to the intending purchaser, is not conclusive evidence of a sale and delivery of the goods in view of the agent’s testimony as to the agreement under which they were delivered, and his testimony that he had no authority to sell upon the terms proposed by the defendant and had so informed the latter.
    Argued Oct. 18, 1909.
    Appeal, No. 15, Oct. T., 1909, by defendant, from judgment of C. P. No. 4, Allegheny Co., Fourth Term, 1907, No. 556, on verdict for plaintiff in case of Max Gunzburger v. Miles Rosenthal.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Trespass in the nature of trover to recover damages for the conversion of goods delivered by plaintiff to defendant. Before Carnahan, P. J.
    The facts appear by the opinion of the Supreme Court.
    At the trial the defendant presented the following points:
    1. If the jury find from the evidence that the plaintiff, Max Gunzburger, had not the right of possession to the goods in question at the time of the bringing of this suit, their verdict must be for defendant. Answer: Refused. The evidence is that he had such right of possession as entitles him to prosecute this claim. [1]
    2. Unless the jury find from the evidence that the plaintiff had some title to the goods in question, and the right to the possession thereof, at the time of suit brought, their verdict must be for defendant. Answer: Refused. The evidence is that he had such title and right of possession as entitles him to prosecute this claim. [2]
    8. If the jury find from the evidence that the title to the goods in question, and the right to the possession thereof, were in Fred Kaufman & Co., or someone other than the plaintiff, at the time suit was brought, the verdict should be for the defendant. Answer: Refused as stated. See answers to first and second points. [8]
    9. Under all the evidence in the case the verdict of the jury should be for defendant. Answer: Refused. [9]
    Verdict and judgment for plaintiff for $2,179.14. Defendant appealed.

      Errors assigned were (1, 2, 8, 9) above instructions, quoting them.

      W. W. Stoner, with him A. C. Stein, for appellant.
    Plaintiff had no standing to maintain the action: Wells v. Stewart, 5 Binney, 325; Root v. Muhr, 19 W. N. C. 403; Steamboat Co. v. Atkins & Co., 22 Pa. 522; Com. v. Gas Co., 6 Luz. Leg. Reg. 328; Fox v. Pray, 2 Miles, 333; Brownell v. Manchester, 18 Mass. 232; Ludden v. Leavitt, 9 Mass. 104; Coggs v. Bernard, 1 Sm. Leading Cases, 199.

      Joseph Stadtfeld, for appellee.
    No title passes on delivery pending a final settlement of terms: Landry v. Thomas, 3 Phila. 300; Henderson v. Lauck, 21 Pa. 359; Miller v. Munhall, 34 Legal Int. 321.
    Plaintiff was a bailee of the goods, with no authority to deliver the amount of goods selected by defendant and, under his contract of employment, personally responsible to his firm for the goods so left with defendant: Edwards on Bailments, sec. 103; Hale on Bailment, pp. 150, 151; Wells v. Stewart, 5 Binney, 325.
    The bailee may recover full value: Lyle v. Barker, 5 Binney, 457; Harris v. Smith, 3 S. & R. 20.

      January 3, 1910:
   Opinion by

Mr. Justice Potter,

This was an action of trespass brought to recover the value of certain jewelry which plaintiff alleged had been unlawfully converted by the defendant to his use, and to which plaintiff claimed the right of possession as bailee of the owner. The cause of action being the alleged wrongful conversion of the jewelry which had come lawfully into the hands of the defendant, the rules governing the common-law action of trover and conversion apply. Counsel for both parties concede this in their agreement. The testimony of the plaintiff was to the effect that the goods which áre the subject of the suit were left with the defendant upon the express agreement that they were to be held until plaintiff could communicate with his employers, and if they did not approve of a sale upon the terms offered, the goods were to be returned; that the terms of sale were not approved, and that defendant after being so notified refused to return the goods when demand was made for them. That this testimony, if believed by the jury, was sufficient to maintain an action of trover, was not denied. The contention of appellant is that the plaintiff had no such interest in the goods as would enable him to maintain an action to recover them, or damages for their conversion. We do not agree with this contention; for, under the evidence, the plaintiff had actual possession of the chattels, and he also had such special property in them as entitled him to hold them against everyone except his principals. As against a stranger, possession alone is good, and in such case, the plaintiff need prove no more than possession. The authorities abundantly sustain this principle. Thus, in 3 Elliott on Evidence (1905), sec. 2664, it is said: “A sufficient right of property may appear when the plaintiff shows that he has gained an apparently rightful possession. Such a possession is evidence of property, and whoever, by force or fraud, intercepts it without being able to show any right in himself, is liable to this action (trover);” and in 2 Cooley on Torts (3d ed., 1906), 851, sec. 520, appears this statement: “When it is said that the plaintiff in trover must have had, at the time of the conversion, the right to the property, and also a right of possession, nothing more can be intended than this: that the right of which he complains he has been deprived must have been either a right actually in possession or a right immediately to take possession; it is not enough that it be merely a right of action or a right to take possession at some future day. If, then, the plaintiff shows that property in his possession has been taken and converted, he shows prima facie his right to maintain the suit.”

In the present case the plaintiff as agent was intrusted with the possession of the goods by his principals, for the purpose of sale, and this gave him a special interest in them, which entitles him to maintain this action for their conversion.

In the light of the evidence explaining the conditions under which it was issued, there is no merit in the suggestion that the memorandum given by plaintiff to defendant was conclusive evidence of a sale and delivery of the goods described in it. Plaintiff testified that this memorandum was given to defendant upon condition that his employers would agree to the terms offered. If the jury believed his statement in this respect, there was no basis upon which they could find that the memorandum was evidence of a sale. Plaintiff further testified that he had no authority to sell upon the terms proposed by the defendant, and that he so informed him at the time. Under the evidence of the plaintiff the memorandum was nothing more than the statement of an offer by the defendant, to be submitted by the plaintiff to his principals for approval.

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