text:
    Martin, Appellant, v. Martin.

      Trusts and trustees — Foreign judgment — Service by publication — Jurisdiction.

    Where a testator in another state bequeaths and devises a portion of his estate to certain persons in trust for purposes designated, and such persons remove to Pennsylvania, and subsequently die in Pennsylvania, a suit in equity cannot be maintained against the representatives of the deceased trustees in Delaware, where such representatives have not appeared in the suit, and have only been served by publication. A decree entered in such suit cannot be used in a court in Pennsylvania as .the basis for an action against the representatives of. the deceased trustees.
    Argued Jan. 5, 1906.
    Appeal, No. 150, Jan. T., 1905, by plaintiff, from judgment of C. P. No. 5, Phila. Co., Dee. T., 1904, No. 1,695, for defendant on demurrer to statement in case of John E. Martin v. Emma R. Martin, Luther Martin, Jr., Robert W. Martin and Fidelity Trust Company, a corporation of the state of Pennsylvania, coexecutors and trustees under the. last will and testament of Luther Martin, deceased; the said Emma R. Martin, Luther Martin, Jr., Robert W. Martin, Ida M. Evans, Sophie M. Stelwagon, Emma M. Love and Alice M. Meredith, legatees and devisees under the last will and testament of Luther Martin, deceased.
    Before Mitchell, C. J., Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Assumpsit on a foreign judgment.
    Demurrer to statement.
    In addition to the facts set forth in the opinion of the Supreme Court, it appeared that the portion of the will of Hugh Martin, Sr., deceased, bearing upon the question involved was as follows :
    “ I give, devise and bequeath after the death of my said wife, Sophie, unto my sons Luther Martin and Edward L. Martin, and to the survivor of them one equal sixth part or share of my estate remaining after the payment of the legacies and bequests hereinbefore mentioned, both real and personal to have and to hold said equal sixth part or share unto said Luther Martin and Edward L. Martin and the survivor of them his heirs ex-editors, and administrators, as joint tenants and not as tenants in common, to and for the following intents and purposes, that is to say :etc.
    The court entered judgment for the defendants on the demurrer.

      Error assigned was the judgment of the court.

      Ruby R. Vale, with him Victor B. Woolley and J. Harvey Whiteman, for appellant.
    The courts of Delaware bad jurisdiction of the executor and trustee, and also jurisdiction of the subject-matter of the trust: Moore v. Field, 42 Pa. 467; Guthrie v. Lowry, 84 Pa. 533; Musselman’s App., 101 Pa. 165; Van Dyke’s App., 4 W. N. C. 283.
    It is a rule of law as salutary as it is settled that the jurisdiction of the court having once attached for one purpose, it will be sustained for all purposes, and that this should be the principle of law applicable to the conservation of trust, funds, cannot be questioned. If authority be thought necessary to support this principle, reference is made to Winton’s App., 97 Pa. 385; McGowin v. Remington, 12 Pa. 56; Wilhelm’s App., 79 Pa. 120; Ahl’s App., 129 Pa. 49; Hanna v. Clark, 189 Pa. 321; Allison’s App., 77 Pa. 221.
    The attention of the court is also directed to the following Delaware cases showing the extent of the jurisdiction of the court of chancery in its control over trust estates when such control attaches: Davis v. Davis, 1 Del. Ch. 256; Vinson v. Vinson, Trustee, 1 Del. Ch. 120; Rodney v. Shankland, 1 Del. Ch. 35; Lockwood v. Stradley, 1 Del. Ch. 298; State v. Griffith, 2 Del. Ch. 392; Griffith v. State, 2 Del. Ch. 421; Davis v. Browne, 2 Del. Ch. 188; Massey v. Stout, 4 Del. Ch. 274; Harker v. Reilly, 4 Del. Ch. 72; Downs v. Rickards, 4 Del. Ch. 416; Ex parte Jordan, 4 Del. Ch. 615; State v. Fleming, 3 Del. Ch. 153; Fox v. Wharton, 5 Del. Ch. 200; Doughten v. Vandever, 5 Del. Ch. 51.
    It cannot be questioned that when a will names an executor also as trustee of a trust estate therein created, the probate of such will is considered an acceptance of the trust by the trustee as well as of the executorship, and that the courts thereby acquire jurisdiction of the trustee as of the-date of the probate of such will: Martin’s Estate, 35 P. L. J. 248; Earle v. Earle, 48 N. Y. Super. Ct. 18; Sangston v. Hack, 52 Md. 173; Green v. Green, 4 Redfield (N. Y.), 357; Roberts v. Moseley, 64 Mo. 507; Barclay v. Goodloe, 83 Ky. 493; Hazard v. Durant, 19 Fed. Repr. 471; Steinway’s Estate, 37 Misc. 704 (76 N. Y. Supp. 452); Elizalde v. Elizalde, 137 Cal. 634 (66 Pac. Repr. 369); Goodell v. Buck, 67 Maine, 514; Cushman v. Goodwin, 95 Me. 353 (50 Atl. Repr. 50); Greene’s Case, 2 Connoly (N. Y.), 166; Sortore v. Scott, 6 Lansing (N. Y.), 271.

      H. Gordon McCouch, with him H. S. Drinker, Jr., for appellees,
    cited: Pennoyer v. Neff, 95 U. S. 714.
    March 19, 1906:
   Opinion by.

Mr. Justice Brown,

The appellees, the defendants below, are the co-executors and trustees, legatees and devisees under the last will and testament of Luther Martin, deceased. He was a son of Hugh Martin, Sr., late of the county of Sussex, state of Delaware, deceased, who, by his will, bequeathed and devised one-sixth of his residuary estate to the said Luther Martin and Edward L. Martin, another son, in trust for his son John Edwin, during life, the trust to determine upon the latter’s death and the estate to vest in the child or children of the cestui que trust. John Edwin Martin having died, the estate held in trust for him by his two brothers vested in his only child, John E. Martin, the appellant and plaintiff below. Luther Martin and Edward L. Martin were named as executors of their father’s will, but the one-sixth of his estate was not bequeathed and devised to them in their capacity as executors, to be held in trust for their brother. That portion of his estate passed to them simply as legatees and devisees, as it would have passed to strangers named, with the trust impressed upon it.

Luther Martin died in the year 1886, and his brother, Edward L., survived him about eleven years. Shortly after the death of John Edwin Martin, in 1901, his son, the appellant, filed a bill for an accounting in the court of chancery for Sussex county, Delaware, against the personal representatives and legatees and devisees of Luther Martin and Edward L. Martin, deceased. The bill was served by the sheriff on the representatives of the estate of Edward L. Martin, but the appellees having been non-residents of the estate of Delaware, an order of publication was made by the chancery court, directing them to appear or to suffer the bill to be taken pro confesso as to them. Upon due proof of the publication of this order and the failure of the appellees to' appear, a decree pro confesso was entered against them and a master appointed to state an account, as prayed for in the bill. Upon his report the chancery court decreed that the sum of 15,576.50 was due the complainant, and ordered the appellees to pay it to him “ out of any moneys or property in their possession, management or control, belonging to, forming a part of, or received from the estate of the said Luther Martin, deceased.” On this decree the present action-of assumpsit was brought, and the single question before us is, whether the court below properly sustained the demurrer of the appellees, for the reason that no cause of action was disclosed against them in a decree that had been entered against them in a proceeding without service of process on them and without any appearance by them.

It is to be first observed that the proceeding in the Délaware equity court was not to fix the liability of an executor over whom it may have acquired jurisdiction the moment the proper probate court of that state issued letters testamentary to him; and yet all through the argument of counsel for appellant this fallacy seems to run. In their statement of the question involved they refer to an executor and trustee appointed by the court of a sister state. As the proceeding was not against the representative of an executor, the question of the court’s jurisdiction over him is not before us. Nor was the proceeding directed against any property within the jurisdiction of the chancery court, as to which that court could have entered a valid decree, though the proceeding was in form in personam. The proceeding’was against the appellees personally, and was against property in their hands bejmnd the jurisdiction of the court. The decree was entered against them by a court that did not attempt to have its process served personally upon them; but the contention of the appellant is that, as that court had jurisdiction of Luther Martin, trustee, while living, and he was, therefore, subject to extra-territorial service of its process, the jurisdiction of that court continued as to his representatives. Luther Martin was not appointed trustee by the court in which the bill was filed against his representatives, nor by any other court in the state of Delaware, and no court in that state could acquire jurisdiction over him because it had created him trustee. He was the legatee and devisee of his father, who impressed the bequests and devisees with the trust. He was a trustee by his father’s act alone, and while accountable for the proper execution of his trust as legatee or devisee, he was personally accountable to no particular court. Any court within whose jurisdiction the trust property might have been situated would have had jurisdiction over it in a proper proceeding for its protection and conservation, and any court within whose jurisdiction the trustee might have been found would have had jurisdiction over him to compel a proper account of the trust assets in his hands. Wherever he went, his personal accountability as a trustee followed him and could have been enforced against him personally wherever found in a proper proceeding, after service of process upon him; but by the decree of no court, not having exclusive jurisdiction over him, could he have been personally bound by attempting to bring him within its jurisdiction by extra-territorial service of process. In this respect his ease is like that of any individual upon whom there is an attempt to fix liability by such process, and he would be protected by the rule laid down in Pennoyer v. Neff, 95 U. S. 714, and our own cases, among which are: Steel v. Smith, 7 W. & S. 447; Scott v. Noble, 72 Pa. 115; Coleman’s Appeal, 75 Pa. 441, and Wallace v. United Electric Company, 211 Pa. 473. If this is true of him, it is equally, if not more so, of the appellees, his representatives, who at no time were within the jurisdiction of the foreign court, but who at all times have been within the jurisdiction of the courts of this state, liable to account here whenever called upon.

In a summary of the argument for the appellant three cases are relied upon: Van Dyke’s Appeal, 4 W. N. C. 283; Conrow’s Estate, 13 W. N. C. 551, and Musselman’s Appeal, 101 Pa. 165. Each of these cases seems to be misunderstood in the attempt to apply it to the question raised on this appeal. What each decides is simply that the courts of this state have no power to call a foreign executor to account for the assets of his testator, -who died in a foreign jurisdiction, and from which the executor derived his authority to act, and to which alone he can account; but each of them goes a step farther and holds that, after the executor has accounted in the foreign jurisdiction, and assets of the estate have passed to a trustee who lives or comes within the jurisdiction of one of our courts, he can be called upon by it to account for his stewardship. The closing words of Paxson, J., in Musselman’s Appeal are: “ No personal action will lie against the executor of William P. Waugh for any portion of the residuary estate, or for a legacy charged thereon, until it be first shown that there is a residuary estate, and that the same passed into the hands of John Waugh as trustee thereof. That John Waugh received assets of the estate of John P. Waugh is not to the purpose. He received them as executor; his responsibility for said estate is as executor, and not as trustee of the residuary estate. The appellees must first show that there was a residuary estate, and the amount of it. This can only be done by compelling an account in the proper courts of North Carolina. When that is done, and it is legally ascertained that John Waugh had in his possession a sum of money, or certain property, as trustee of the residue under the will of John P. Waugh, they can probably sustain a suit in any forum where they can find the personal representatives of John Waugh or his property.” So here, the account of the executors, filed and approved in the proper court in Delaware, may show what assets passed from them to Luther Martin as legatee for the purpose of a trust, and if so, he in his lifetime, might have been, or his representative after his death, wherever found, may be called upon to account in a proper proceeding, of which they receive proper legal notice by process served upon them personally in accordance with the law of the state in which they are found. Extra-territorial service of process, however, is ineffectual to bring them personally within the jurisdiction of a foreign court; but the process of the court 'within whose jurisdiction they are found does do so, and, when personally brought into that court, from its judgment or decree there is no escape.

Another case pressed with emphasis upon our attention, as authority to sustain the order of publication as effectual to bring the appellees within the jurisdiction of the Delaware court, is Moore v. Fields, 42 Pa. 467; but it, too, is misunderstood. The defendants in that case had been granted letters of administration by the surrogate of New York, and, after having received by virtue of their appointment moneys belonging to the estate, came into this state without accounting for the same. As the surrogate had jurisdiction of them from the time they were appointed, the question of the validity of extra-territorial service of process on them was not in the case. Mr. Justice Woodward, in delivering the opinion of the court, says as to this: “ The surrogate had jurisdiction from the time he granted the letters of administration, and it was their legal duty to appear and settle their accounts without any summons whatever from the surrogate. The fact that his notice reached them in Pennsylvania was not, in our judgment, a circumstance of any importance.”

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


source: Caselaw Access Project

author: Mr. Justice Brown,

license: Public Domain

text:
    Camden National Bank of Camden, New Jersey, v. Fries-Breslin Company, Appellant.

      Promissory notes — Affidavit of defense — Res adjudicata — Fraud—Dividend — Corporations.
    In an action against a corporation on a promissory note given for dividends which had been adjudicated by the courts as having been regularly declared, an affidavit of defense is insufficient which avers that the dividends had not been earned, but had been made to appear as due by means of fictitious inventories. Until the judgment establishing the regularity of the dividends has been opened, modified or reversed the defendant company can make no defense in a suit to collect a note given in payment of such dividends. The fact that the defendant company had been enjoined from paying to the payee of the note certain alleged profits, is immaterial as long as the judgment declaring the regularity of the dividends stands unimpeached.

      Promissory notes — Note held as collateral.

    In an action on a promissory note held as collateral security, the holder is entitled to judgment for the whole amount due on it with liability to account for the surplus to the owner of the note.
    Argued Jan. 12, 1906.
    Appeal, No. 338, Jan. T., 1905, by defendant, from order of C. P. No. 2, Phila. Co., Dec. T., 1904, No. 508, making absolute rule for judgment for want of a sufficient affidavit of defense in case of The Camden National Bank of Camden, N. J., v. Fries-Breslin- Company.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Assumpsit on a foreign attachment. Before Wiltbank, J.
    Judgment for want of a sufficient affidavit of defense.
    The facts are stated in the opinion of the Supreme Court.
    The court made absolute rule for judgment for want of a sufficient affidavit of defense.

      Error assigned was the order of the court.

      E. Clinton Rhoads, for appellant.
    When an affidavit of defense avers that a note has been' obtained or put into circulation through fraud, the burden of proof is upon the holder to show that he is a bona fide holder without notice: Lerch Hardware Co. v. First Nat. Bank of Columbia, 109 Pa. 240; Real Estate Investment Co. v. Russel, 148 Pa. 496; Lamb v. Burke, 132 Pa. 413; Reamer v. Bell, 79 Pa. 292; Twitchell v. McMurtrie, 77 Pa. 383; Kuhns v. Gettysburg Nat. Bank, 68 Pa. 445; Hoffman v. Foster, 43 Pa. 137; Loeb v. Mellinger, 12 Pa. Superior Ct. 592; Reeper v. Greevy, 5 Pa. Superior Ct. 316; Smith v. Popular B. & L. Assn., 93 Pa. 19.
    The facts set forth in the affidavit of defense, irrespective of the fraud involved in the original making and circulation of the note, were sufficient to place the burden of proof upon plaintiff, and to require it to prove its title, and that it is a bona fide holder and without notice: Bolles’ Penna. Law of Negotiable Instruments, sec. 27, p. 56.
    Even if plaintiff should be able to sustain the position as a bona fide holder, it can recover only the amount of loan for which the note in suit was held as collateral: Cromwell v. Sac County, 96 U. S. 51; Second Nat. Bank v. Anderson, 14 Pa. C. C. Rep. 513; Beckhaus v. Commercial Nat. Bank, 12 Atl. Repr. 72; Memphis Bethel v. Bank, 101 Tenn. 130 (45 S. W. Repr. 1072); Fisher v. Fisher, 98 Mass. 303; New England Trust Co. v. N. Y. Belting, etc., Co., 166 Mass. 42 (43 N. E. Repr. 928); Continental Nat. Bank v. Bell, 125 N. Y. 38 (25 N. E. Repr. 1070).

      M. Merian Allen, for appellee.
    It is a well-known principle of law in Pennsylvania that one taking negotiable paper before maturity, as collateral security, is, for all practical purposés, the owner of it without regard to equities between the original partiés of which he has nó notice, whether arising out of the original transaction or from subsequent dealings, and that one receiving negotiable paper, as collateral security, is entitled to be protected, as a bona fide holder, to the same extent and, under the same circumstances as one who becomes the owner of such paper: Munn v. McDonald, 10 Watts, 270; Ege v. Kyle, 2 Watts, 222; Miller v. Pollock, 99 Pa. 202; Philler v. Woodfall, 2 Pa. Dist. Rep. 390; Smith v. Hogeland, 78 Pa. 252; Spering’s Appeal, 10 Pa. 235; Jones on Pledges, sec. 89, p. 61; Sloan v. Union Banking Co., 67 Pa. 470; Gray v. Bank of Kentucky, 29 Pa. 365; Knight v. Pugh, 4 W. & S. 445; Heist v. Hart, 73 Pa. 286; Mulligan v. Fitzgerald, 1 W. N. C. 375; Second Nat. Bank v. Morgan, 165 Pa. 199; Matthews v. Long, 3 W. N. C. 512; Blanton v. Craven, 173 Pa. 374.
    This case is important for the appellee in that it emphasizes the principle that there must be fraud in the putting into circulation of the note. If the note was properly issued then any questions of fraud between the parties not touching the circulation cannot put the holder upon proof. In the case at bar the note was properly placed in circulation and the facts alleged as growing out of after discoveries cannot affect it: Twitchiell v. McMurtrie, 77 Pa. 383; Kuhns v. Gettysburg Nat. Bank, 68 Pa. 445; Hoffman v. Foster, 43 Pa. 137; Merchants, etc., Bank of Columbus v. Pizor, 24 Pa. C. C. Rep. 273.
    There is nothing in the affidavit of defense which amounts to a prima facie rebuttal of the appellee’s allegation that it is a holder for value and without notice.
    Where there is no other person entitled to receive the surplus, the pledgee can recover only the amount of the debt secured: Allaire v. Hartshorne, 21 N. J. L. 665; Stoddard v. Kimball, 60 Mass. 469.
    March 19, 1906:
   Opinion by

Mr. Justice Brown,

In plaintiff’s statement there is an averment that it became the holder of the note in suit for value- before maturity, and without notice of any defense that the maker might have. The circumstances under which it obtained the note are set forth in detail. The defendant seeks to avoid liability on the obligation by averring that it was procured by fraud and that the plaintiff is not a bona fide holder for value and without notice. If the note was procured by fraud, the holder would be put to proof of consideration, that it had acted fairly, paid value, and had no notice of the alleged fraud: Hutchinson v. Boggs, 28 Pa. 294; Hoffman v. Foster, 43 Pa. 137; Reamer v. Bell, 79 Pa. 292; Lerch Hardware Co. v. First National Bank of Columbia, 109 Pa. 240; Real Estate Investment Co. v. Russel, 148 Pa. 496.

From a careful examination of the affidavit of defense it is clear that there is no such allegation of fraud in connection with the procurement of the note by Fries, the payee, as would be sufficient to prevent judgment if the suit had been brought on it by him, instead of by the present plaintiff. The alleged fraud upon which the appellant relies for a reversal of the judgment is thus set forth: “ Frederick Fries, John M. Carroll, T. J. Breslin, and others were stockholders in the Fries-Breslin Company, a corporation created by and existing under the laws of the state of New Jersey, with its principal offices at Camden, N. J., and the said Frederick Fries claimed, on or before November 25, 1901, that the said Fries-Breslin Company was indebted to him for dividends in a large sum of money. This was denied by the defendant company, chiefly on the ground that the said dividends had not been regularly or formally declared. After suit in the courts of the state of New Jersey it was adjudged that the said dividends were regularly declared, and thereupon the note in the aforesaid suit was given, together with several other notes.” This is an admission by the defendant that the note in suit was given in payment, or part payment of the dividends to which it had been judicially determined Fries was entitled. The affidavit of defense then proceeds to aver: “ After giving the said note it was discovered by the stockholders of the said company that the said dividends had not been earned, but had been made to appear as due by a fraudulent conspiracy among Frederick Fries and Thomas J. Breslin, whereby, by means of fictitious inventories, dividends were made to appear as earned, when as a matter of fact they had not been earned.”

It is to be noted that there is no averment by the defendant that the judicial determination of the regularity of the award of dividends to Fries does not still stand as a judgment that he is entitled to them, and, this being so, his right to receive them cannot be attacked in this proceeding. Until the judgment establishing their regularity has been opened, modified or-reversed, the defendant can make no defense in a suit to collect a note given in payment of them. In the suit brought to determine the regularity of the dividends and the right of Fries to receive them every question relating to them was raised, or ought to have been raised.

There is a further averment in the affidavit of defense that the same state of affairs exists regarding a claim of Breslin against the said Fries-Breslin Company; that on July 9,1904, a bill in equity was filed in the United States circuit court for the district of New J ersey, praying that the said Breslin be enjoined from collecting his claim by reason of the alleged fraud perpetrated by him and the said Fries; that thereafter, on July 30, 1904, an injunction was awarded by the said court enjoining the said Fries-Breslin Company from paying Fries and Breslin any sum of money on account of alleged profits of said company alleged to be due to them, and from paying said Breslin any sum of money on a certain judgment recovered by him against the said company in the supreme court of the state of New Jersey, or through any process issued thereon, and restraining Breslin from collecting the same. But there is nothing in this averment to show that the company was enjoined from paying to Fries the dividends judicially found to have been regularly awarded to him, and in payment of which the company gave the note in suit. There is no allegation that the company was enjoined from paying him his dividends, or that he was enjoined from collecting the note in suit. In short, in this last averment nothing appears as a reason why the company should not pay the note to Fries or to the present holder. Breslin has been enjoined from collecting his judgment, and the Fries-Breslin Company has been enjoined from paying him and Fries any money on account of alleged profits, are the averments of the affidavit of defense; but there is no averment, as stated, that the company has been enjoined from paying the dividends to Fries, or the note given for them. The affidavit of defense must lie taken most strongly against tbe defendant which made it, and as there is no averment that Fries has been enjoined from collecting the dividends awarded to him, it is to be assumed that the defendant could not make it.

There is nothing else in the affidavit of defense requiring notice, for nothing else appears that can be regarded as a defense. Though the plaintiff holds the note as, collateral security, in the absence of any defense against it, even if it was still in the hands of the payee, the appellee is entitled to judgment for the whole amount due on it, with liability to account for the surplus to Fries, for whom the bank will hold said surplus as trustee: 4 Am. & Eng. Ency. of Law, (2d. ed.), p. 347.

Judgment affirmed.


author: Mr. Justice Elkin,

text:
    De La Vergne Refrigerating Machine Company v. Kolischer, Appellant.

      Corporations — Foreign corporations — Authorized registered agent — Commercial agent — Contract—Act of April 22, 1874, P. L. 108.
    The same person may be the authorized, registered agent of a foreign corporation as provided by the Act of April 22, 1874, P. L. 108, and also the commercial agént of the same corporation; but if he resigns his position as commercial agent without taking any steps to have his appointment as registered agent canceled or annulled, he continues as registered agent, and the corporation cannot be charged after such registration with doing business in this state without a registered authorized agent, so long as the public record of his appointment remains unchanged.
    Where a person becomes both the authorized registered agent and the commercial agent of a foreign corporation, and subsequently resigns as commercial agent, but permits the record of his authorized agency to remain without amendment and unaltered, and thereafter enters into a contract with the corporation, he cannot, in order to invalidate the contract, aver that the corporation was doing business in the state without an authorized agent.

      Arbitration — Referee’s finding of fact.

    A referee’s finding of fact when confirmed by the court below, will not be reversed except for manifest error.
    Mestkezat, J., dissents.
    Argued Jan. 16, 1906.
    Appeal, No. 268, Jan. T., 1905, by defendant, from order of C. P. No. 3, Phila. Co., Sept. T., 1900, No. 1,657, M. L. D. overruling exceptions to referee’s report in case of De La Vergne Refrigerating Machine Company v. Theodore Kolischer, Reputed Owner and Contractor.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Scire facias sur mechanic’s lien.
    Exceptions to report of M. Hampton Todd, Esq., referee.
    The facts are stated in the opinion of the Supreme Court.
    The referee reported in favor of the plaintiff for $120,082.06.
    The defendant filed, inter alia, the following exceptions to the referee’s report.
    19. The learned referee erred in his answer to the defendant’s fourth request for finding of law, which request and an-' swer are as follows :
    Registration after the making and completion of the contract in question is not sufficient. Nothing short of a registration before the contract that a foreign corporation seeks to enforce is made can give it a right of action. . Answer : Under the facts in this case I decline to so find. [15]
    20. The learned referee erred in declining to find as requested in defendant’s seventh request, which request and answer are as follows :
    Even though the plaintiff had never done any work in Pennsylvania other than that done under the contract on which this lien is based, yet as that contract involved the purchase of materials and the payment for labor in Pennsylvania and the continuous, work there for a period of eight months, it could not be claimed as an isolated transaction, but as a “ doing of business ” within the meaning of the act of April 22, 1874. Answer: I decline to so find. [16]
    21. The learned referee erred in declining to find as requested in defendant’s eighth request, which request and answer are as follows :
    The uncontradicted testimony being that in the erection and completion of the plant in Philadelphia the plaintiff carné into this state with its agents and workmen and for a period of eight months was engaged in the continuous prosecution of its ordinary business, employing part of its capital here, and creating new obligations day by day; that during that period half a dozen of the employees of the plaintiff company were employed here and working on the plant continuously under a resident erecting foreman; that about thirty or forty other men, residents of Philadelphia, were employed on the work by the plaintiff during three months of that time, all earning wages in Pennsylvania; that the plaintiff had been engaged continuously in the same business in Pennsylvania for twelve years preceding the making of the contract; 'that it had an office in Philadelphia, and a resident agent, whose principal business was to solicit contracts for the erection of ice plants in this state; that it had an erecting foreman resident in this state, whose business it was to superintend the erection of ice plants in this state ; and that it had erected and constructed a very large number of similar plants within this state, both before this contract was made and between the time that it was made and the date on which this lien was filed ; such being the case, the plaintiff company was engaged in doing business in Pennsylvania within the meaning of the act of April 22,1874. Answer : I decline to so find. [17]
    22. The learned referee erred in declining to find as requested in defendant’s ninth request, which request and answer are as follows:
    The uncontradicted evidence being that Mr. Koliseher’s official or agency relations with the plaintiff company ended on September 1, 1899; that after that date Kolischer owed no duties to the plaintiff; that he was not thereafter on its pay roll, and that he was not thereafter in charge of its office in Philadelphia and made no use of that office; that between September 1, 1899, and June 11, 1900, the plaintiff had no registered agent in Pennsylvania who was authorized to transact business for it there ; that there was no break in the carrying on of business by the plaintiff company in Pennsylvania at September 1, 1899, since Humes, the agent who succeeded Kolischer, was securing contracts and the plaintiff was erecting plants in Pennsylvania continuously after September 1, 1899, the same as had been done before that date; and the contract on which the work was done having been executed on September 16,1899, and declared completed by the plaintiff company on May 28,1899, the plaintiff company failed to comply with the provisions of the act of April 22, 1874, prior to the making of the contract and the doing of work thereunder which is the basis of the lien filed, and hence no recovery can be had by the plaintiff in this action. Ansiver: I decline to so find. [18]
    23. The learned referee erred in declining to find as requested in defendant’s tenth request, which request and answer are as follows:
    The uncontradicted testimony being that the ice plant erected by the plaintiff for the defendant in this case was never completed, or substantially completed, in New York; that many essential parts and materials going into its construction were bought by the plaintiff in Pennsylvania and delivered at Philadelphia ; that the parts and materials which came from New York were sent to Philadelphia in several thousand pieces; that the work of constructing the plant in Philadelphia out of the-materials thus collected from New York and from various parts of Pennsylvania covered a period of some eight months; that during this eight months half a dozen of the plaintiff’s employees were over from New York and working constantly in Philadelphia at the job, and that from thirty to forty men living in Philadelphia were there employed by the plaintiff and worked constantly on the job for a period of three months; that the plaintiff had control of the materials sent to Philadelphia after their arrival there, and until the completion of the plant, and it could either put them into the plant or substitute other similar materials for them; that the plaintiff had a regular branch office, an authorized agent, and a resident erecting foreman in Philadelphia, and had bad for several years prior to the making of this contract; the plaintiff was not engaged in interstate commerce within the protection of the federal constitution, but-was doing business in the state of Pennsylvania, and amenable to the provisions of the act of April 22, 1874. Answer: I decline to so find. [19]
    24. The learned referee erred in declining to find as requested in defendant’s eleventh request, which request and answer are as follows :
    When an article which is to be delivered in Pennsylvania is completed there and essential parts of it manufactured there, and when the article contracted for is for the first time put ' together and constructed there, as regards the commerce clause of the federal constitution, the origin of a part of the materials and machinery out of which it is constructed “ cuts no figure ” (118 Fed. Rep.) the prohibition of the act of 1874 being against the doing of business in this state and not against the importation of the materials and machinery. Answer : I decline to so find. [20]
    25. The learned referee erred in declining to find as requested in defendant’s twelfth request, which request and answer are as follows:
    If the business carried on by the plaintiff in this state included something more than the sale and delivery of goods to be brought into this state upon orders taken either in or out of the state, the act of April 22, 1874, is applicable, and it is entirely competent for the state of Pennsylvania to prescribe the registration of the agents or offices as a condition upon which such interstate business may be carried on by a foreign corporation. Answer: I decline to so find. [21]
    26. The learned referee erred in his answer to the defendant’s thirteenth request, which request and answer are as follows :
    The uncontradicted evidence being that the contract between the plaintiff and defendant was signed by the plaintiff in New York, mailed to Mr. Kolischer in Philadelphia on September 15, 1899, signed by Mr. Kolischer in Philadelphia, and mailed-by him to the plaintiff from Philadelphia, on September 16; 1899; the contract in question was made and executed in Philadelphia Avhen Mr. Kolischer deposited it’in the mail box in Phil a,delphia. Answer: Refused. [22]
    28. The learned referee erred in declining to find as requested in the defendant’s seventeenth request, which request and answer are as follows:
    Under all the facts in this case, by reason of the act of April 24, 1874, the plaintiff cannot recover in this action. Answer : I decline to so'find. [23]

      Errors assigned among others were (15-23) refusal of above exceptions.

      W. A. Glasgow, Jr., and HG. Gordon McCouch, with them Henry S. Drinker, Jr., for appellant.
    There can be no recovery upon the lien filed because the De La Vergne Company failed to comply with the provisions of the Act of April 22., 1874, P. L. 108, prior to the making of and during the completion of the contract. on which it is based: Citizens’ Trust, etc., Co. v. McCanna, 6 Pa. Dist. Rep. 25; Delaware River Quarry, etc., Co. v. Bethlehem, etc., Pass. Ry. Co., 204 Pa. 22; Building Loan & Savings Assn. v. Berlin, 15 Pa. Superior Ct. 393; Leisy v. Hardin, 135 U. S. 100 (10 Sup. Ct. Repr. 681); Schollenberger v. Penna., 171 U. S. 1 (18 Sup. Ct. Repr. 757); Austin v. Tennessee, 179 U. S. 343 (21 Sup. Ct. Repr. 132); Cook v. Marshall County, 196 U. S. 261 (25 Sup. Ct. Repr. 233); Emert v. Missouri, 156 U. S. 296 (15 Sup. Ct. Repr. 367); Osborne v. Florida, 164 U. S. 650 (17 Sup. Ct. Repr. 214); New York v. Roberts, 171 U. S. 658) 19 Sup. Ct. Repr. 58).

      H. B. Gill and William A. Jenner with them John R. Read, Silas W. Pettit and Louis B. Runk, for appellee,
    cited: Blakeslee Mfg. Co. v. Hilton, 5 Pa. Superior Ct. 184; Mearshon v. Pottsville Lumber Co., 187 Pa. 12; Crutcher v. Kentucky, 141 U. S. 47 (11 Sup. Ct. Repr. 851); Osborne v. Florida, 164 U. S. 650 (17 Sup. Ct. Repr. 214); Louisville & Nashville R. R. Co. v. Eubank, 184 U. S. 27 (22 Sup. Ct. Repr. 277); Kilgore v. Smith, 122 Pa. 48; New Jersey Steel Tube Co. v. Riehl, 9 Pa. Superior Ct. 220; Milsom Rendering & Fertilizer Co. v. Kelly, 10 Pa. Superior Ct. 565; Wolff Dryer Co. v. Bigler, 192 Pa. 466; West Jersey Ice Mfg. Co. v. Armour, 12 Pa. Superior Ct. 443; Pavilion Co. v. Hamilton, 15 Pa. Superior Ct. 389; Bldg. Loan & Savings Assn. v. Berlin, 15 Pa. Superior Ct. 393.
    March 19, 1906:
   Opinion by

Mr. Justice Elkin,

From 1892 to 1899 appellant was the authorized and registered agent of appellee, a foreign corporation, as required by the act of 1874. Just when the agency relation terminated, if at all, is an important, and in some respects, the decisive question raised by this appeal. It is conceded on all sides dhat.it continued up to September 1, 1899, but the views differ as to what was the legal status of the parties from and after that date,. .The referee and.tha learned .court below held that, the agency of the appellant terminated as of that date, Arid" that appellee had no registered agent at the time the substituted contract was formally executed two weeks later. Notwithstanding these views of the law, the contract was held to be valid on the ground, and for the reasons pointed out, that the act of 1874 did not apply.

The second, fifteenth, sixteenth, seventeenth, eighteenth, nineteenth, twenty-first, twenty-second and twenty-third assignments of error broadly raise for review all questions relating to the act of 1874 as applied to the agency of the appellant. The original contract between the Standard Ice Manufacturing Company of New Jersey and appellee was entered into July 29,1899, at which time appellant was the duly authorized registered agent of appellee as required by law. It is clear, therefore, that while the negotiations were going on which led to the execution of the original contract and on the date when executed, all parties to same had a legal status to make a valid contract. If the situation at this point had remained unchanged the question of an authorized agent under the act of 1874, could not have been raised. The situation, however, did not remain unchanged, and hence this appeal.

The New Jersey corporation having been incorporated to erect and operate an ice plant in the city of Philadelphia, was advised by counsel that it could not hold real estate in Pennsylvania, and as a result a change in the manner of taking title and organizing a new corporation was deemed necessary. Appellant being the principal executive officer of the New Jersey corporation, suggested that title to the real estate which it was proposed to purchase, should be taken in his name and held by him until a Pennsylvania corporation could be incorporated for the purpose of taking it over. This plan was agreed to and title to the real estate was so taken. It was then deemed advisable by appellant and his New Jersey corporation to substitute another contract for the one already entered into with appellee so that the new contract should stand in the name of the holder of the legal title to the real estate. At the instance and for the convenience and benefit of appellant and the New Jersey corporation, the change was made, and a new contract embodying the terms of the old was executed in the name of appellant on or about September 16, 1899.

We must now consider what happened between July 29,1899, at which time all parties had a legal status to make a valid contract, and September 15, following, the date of the execution of the substituted contract, when it is contended appellee did not have an authorized registered agent as required by the act of 1874. The testimony shows what did happen. On September 1, appellant offered his resignation, which was accepted as of that date, thus severing his commercial and business relations with appellee. He did nothing more in this connection. He took no steps to have his appointment as registered agent canceled or annulled. The public record of his appointment as such in the office of the secretary of the commonwealth remained unaltered. The certificate of his appointment hung on the wall of the office of appellee in the city of Philadelphia for the inspection of the public as it had done for several years prior thereto. The office, or place of business, which appellee had established and maintained for a period of ten or twelve years remained unchanged and was kept open as theretofore. There was no change in the situation except that appellant took a private office in another part of the same building.. Two weeks later the substituted contract was executed and appellant now claims there was no authorized registered agent at that time, in consequence of which it is claimed to be illegal and void.

This brings us to a consideration of the requirements of the act of 1874, and the constitutional provision upon which it is based. Section five of article sixteen of the constitution ordains that no foreign corporation shall do any business in this state, without having one or more known places of business, and an authorized agent or agents in same, upon whom process may be served.” The act of April 22, 1874, P. L. 108, was passed to enforce this constitutional provision. It makes it unlawful for a foreign corporation to do business in this state without having a place of business and a registered authorized agent. It requires a statement under the seal of the corporation to be filed in the office of the secretary of the commonwealth, showing the name and purpose of the corporation, the location of its offices, and the name or names of its authorized agent or agents. This becomes a public record for information of all persons. In addition, the act requires a certificate to be issued by the secretary of the commonwealth setting forth the facts as they appear of'record in his office, which must be preserved for public inspection in the place of business designated by the foreign corporation.- In the construction-of this act this court has held that its purpose is to bring foreign corporations doing business in this state within the reach of legal process, .which purpose is not accomplished by a registration at the pleasure of its officers, or when it may be to their interest to appeal to our courts, and that nothing short of a prior registration.can give such corporation a legal standing to enforce a contract. It has also been.held that a contract made by a.foreign corporation before establishing a place of business and registering an authorized agent as required by the act, is void and cannot be enforced in our courts: Thorne v. Insurance Company, 80 Pa. 15; Lasher v. Stimson, 145 Pa. 30; Delaware River Quarry, etc., Co. v. Pass. Ry. Co., 204 Pa. 22.

We do íiót question the authority of these cases. The rule therein stated is the settled law of this commonwealth. It, however, does not follow that the rule applies to the facts of the case at bar.. The act requires a place of business to be designated and an authorized agent to be registered. Both of these requirements had been 'fully met by appellee for many -jmárs-'prior to the- execution of the contract in question. The place of business continued in -the same office and the saíne building after as before the date of the contract, and hence the requirements of the act in this respect had been fully complied with. We need give this branch of the case no further consideration.

It must now be determined whether the private arrangements by which appellant severed his business relations with appelle.e ipso facto annulled his appointment as registered agent under the law. In other words, did the resignation of appellant as commercial agent of appellee annul his appointment as authorized agent under the act ? We think not. To so hold necessarily implies that in order to comply with the act every authorized registered agent, must also be the commercial and business agent of. the corporation. . This is not a reasonable interpretation of the statute. As was said in the latest utterance of this court on the question in Delaware River Quarry, etc., Co. v. Pass. Ry. Co., 204 Pa. 22, by Mr. Justice Fesll: “ Tbe purpose of the act is to bring foreign corporations doing business within this state within the reach of legal process.” The place designated and the agent registered are of importance primarily in the serving of legal process upon and in the transaction of legal business with the foreign corporation. It .ivas not the purpose of the act to regulate the commercial business of a foreign corporation. It is true the authorized registered agent maybe, and often is, the commercial business agent, but it does not follow that in order to comply with the act a registered agent must perform commercial duties. Foreign corporations frequently appoint attorneys at law as their authorized registered agents and name their offices as places of business. Tn such cases it is not contemplated that the registered agent is the commercial business agent, or that his office is the place to make contracts and display goods, but he is.' the agent with whom, and his office is the place where, the legal business, such as the service of process and any other legal matter, may be made or transacted. This is the sense in which the word “agent” and the phrase “ place of business ” are used in the constitution and the act of 1874.

As applied to the present case, this means that the appointment of appellant as registered agent gave him a legal status as an authorized agent, disconnected Avith and independent of the performance of his commercial duties as the business agent of appellee. When, therefore, he resigned as commercial agent on September 1, he did not by that act annul bis appointment as registered agent. To sustain the contention of appellant in this respect, it would be necessary to hold that a foreign corporation must not only have a place of business and an authorized registered agent, but to make the sendee of process legal and the business lawful, the registered agent must be physically present in the place of business Avhen the process is served or the details of the business transacted. Such a construction of the act is not only unnecessary to effectuate its purpose, but would surround it with restrictions and limitations never intended. There must be at least one place of business and one registered agent in every case. There must also be as many, registered agents as there are places of business,, and each registered agent must have his headquarters at the designated place of business. When these conditions are complied with, the requirements of the act are met. After that the details of the commercial business and the service of legal process may be transacted or made, in the place of business, or outside of it, as in every other case of agency. At the time of the resignation of appellant as commercial agent of appellee the public record of his appointment as registered agent remained the same as before. He did not withdraw as- registered' agent, gave no notice of a change in his relation as such, and under these circumstances it cannot be doubted that if legal process had been served on him after September 1 it would have been good. The act imposes duties on the agent as well as the principal. The third section makes it a misdemeanor for the agent to do business in the state without having complied with its provisions, thus imposing imperative duties to be performed by him. Appellant accepted the appointment as registered agent, held himself out to the public as such for many years, permitted the record of his agency to remain without amendment, took no steps to have it altered, and cannot now deny his legal relation in order to invalidate a contract to which he is a party. The requirements of the act of 1874 are wise and wholesome provisions of law, intended as a protection to our citizens, and neither the principal nor the registered agent can deny the agency and thus defeat the purpose of the act so long as the public record establishing the relation remains unchanged in the office of the secretary of the commonwealth.

We are of opinion that appellee had a place of business and a registered agent within the meaning of the act of 1874 when the substituted contract was entered into, and all the assignments of error relating to this question are overruled.

There are other meritorious grounds upon which to affirm the judgment, but in our view of the law no useful purpose can be served by discussing them. On the questions of fact raised by the appeal the findings of the learned referee are conclusive unless manifest error was committed. We have examined with care the report of the referee, and the testimony relied on by appellant to sustain the assignments, but except as to registered agent, have not been convinced that there was manifest error.

Assignments of error overruled and judgment affirmed.

Mestrezat, J., dissents.


text:
    MacDonald, Appellant, v. Schroeder.

      Malicious prosecution — Probable cause — Malice—Reversal of conviction.

    A verdict of guilty returned by a jury, then set aside by the court, a new trial granted followed by a second trial, and a verdict of not guilty, is not conclusive evidence of probable cause.
    Where one commences a criminal prosecution for the purpose of compelling his debtor to pay a just debt, it is prima facie evidence of want of probable cause and of malice, and shifts the burden of showing it was not so, on the defendant.
    Argued Jan. 16, 1906.
    Appeal, No. 203, Jan. T., 1905, by plaintiff, from judgment of Superior Court, Oct. T., 1904, No. 134, reversing judgment of C. P. No. 1, Phila. Co., March Term, 1903, No. 3,223, in case of David S. MacDonald v. Jay N. Schroeder.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Appeal from judgment of Superior Court.
    The facts appear by the opinion of the Supreme Court and by the report in 28 Pa. Superior Ct. 128.

      Error assigned was the judgment of the Superior Court.

      Thomas D. Finletter, with him Charles Lex Smyth, for appellant,
    cited: Graham v. Noble, 13 S. & R. 233; Grohmann v. Kirschman, 168 Pa. 189; Witham v. Gowen, 14 Me. 362; Munns v. Dupont, 1 Am. Leading Cases, 200.

      C. E. Montgomery, for appellee.
    March 19, 1906:
   Opinion by

Mr. Justice Elkin,

This action is based on an alleged malicious prosecution. The question to be determined is whether a verdict of guilty returned by a jury, then set aside by the court, a new trial granted, followed by a second trial and a verdict of not guilty, is conclusive evidence of probable cause.

An information was made by Schroeder, charging MacDonald with having obtained money from him by false pretenses. The criminal case was tried in the court of quarter sessions of Philadelphia county, and a verdict of guilty was rendered by the jury, .whereupon the trial judge set aside the verdict and granted a new trial. When the case came for trial the second time, the prosecutor, his witnesses and counsel being present in court, offered no testimony, and a verdict of not guilty was rendered by the jury. No further proceedings were taken on the criminal side of tbe court. MacDonald, the defendant in the criminal case, then instituted this action for a malicious prosecution. The court below submitted the questions of fact to the jury, and a verdict in favor of the plaintiff was rendered. The Superior Court on appeal reversed this judgment oil the ground, that the verdict ’ of guilty in the first trial was conclusive evidence of probable cause. The correctness of this ruling is denied by appellant.

Upon the subject of the conclusiveness of a verdict of guilty on the question of probable cause there has been diversity of opinión among the text-writers and in the courts. Indeed, it may be conceded that the views of this court as expressed in our earlier and later cases have been somewhat modified. In some of the earlier cases, under facts and circumstances entirely different, it was held that a verdict of- guilty was conclusive evidence of probable cause, but a careful examination of all our cases has failed to disclose a-single instance in which this court has held that a verdict of guilty set aside, followed by a new trial and a verdict of not guilty, was conclusive evidence of probable cause. It is true that Chief Justice Gibson in Herman v. Brookerhoff, 8 Watts, 240, said: “ Whether the prosecution before the justice be treated as a criminal or civil one, plaintiff has no case. The conviction established the existence of a cause of action.” In that case the conviction was appealed from, but the judgment was not set aside or reversed. The case was discontinued at the instance of the prosecutor. While it was there held that the. existence of probable cause was conclusively established by the conviction, the question of rebutting the conviction by introducing evidence showing that it was obtained by fraud or corrupt or undue means was not raised. The learned Chief Justice who wrote the opinion .cited with approval the case of Reynolds v. Kennedy, 1 Wils. 232, mainly relied on to support the contention of appellee here. In commenting upon the rule announced in the latter case, Mr. Justice Sharswood in Mayer v. Walter, 64 Pa. 283, said: “ I question very much if the case would have been so decided had it not arisen under the revenue laws and been influenced by a governmental policy for the protection of informers, but, however that may be, the case goes much too far for the qualified doctrine here maintained.” After an exhaustive review of the cases bearing on this question the court qualified the doctrine of the earlier cases in the following language : “We cannot, therefore, consider Reynolds v. Kennedy as sufficient authority to establish it as law in this state, that the judgment of a magistrate under which a man has been arrested, his property seized and sold, or he has been turned out of possession of his house and home, when that judgment has been reversed on certiorari or appeal, shall conclude him in an action against the opposite party, in which he is able to prove that the plaintiff was actuated by malice, and had no reasonable or probable ground, for the proceeding.” This rule sustains the contention of appellant here.

The case of Cooper v. Hart, 147 Pa. 594, cited by the Superior Court and confidently relied on by appellee, does hold that a verdict of guilty, even when reversed, is conclusive evidence of probable cause. That opinion rested mainly, if not altogether, on the ground that the writ under which the defendant in the criminal prosecution was arrested had been directed to be issued by the trial judge in the exercise of his judicial function. This fact is commented on at length in the opinion of the' court. In the case at bar this important fact is wanting. In this case, the trial judge would not receive the verdict of guilty, but ordered it to be set aside and granted a new trial. It was done in such a manner as to indicate that the' trial judge believed the verdict had been secured by improper testimony or undue means. The fact that the prosecutor neglected or refused to proceed at the second trial, although defendant' was in court ready for trial, supports the contention of appellant that the prosecution had not been'instituted for proper purposes and in good faith. Under these circumstances,’it would be carrying the doctrine too far to hold that appellant was concluded from showing that appellee was actuated by malice and had no probable cause for the prosecution..

In Grohmann v. Kirschman, 168 Pa. 189, which is- one of. the latest utterances of' this court on the question involved, Mr. Justice Fell stated the rule as follows: “ A verdict of guilty is evidence of probable cause. A verdict of acquittal is evidence, though it may be slight, of want of probable cause. Courts have differed as to the conclusive effect of a conviction. The true principle seems to be that in the trial of an action of malicious prosecution or false arrest a verdict of guilty is strong prima facie evidence of probable cause, but it may be rebutted by proof that it was obtained by corrupt or undue means: Munns v. Dupont, 1 Am. Leading Cases, 200.”

The rule herein stated so clearly supports the contention of appellant that no useful purpose can be served by further dis-mission of it. ’’ The general rule on this question, recognized by text-writers, as well as by the courts of many states, is that a conviction in criminal proceedings is conclusive proof of probable cause unless procured by false or fraudulent testimony or other unlawful means: 19 Am. & Eng. Ency. of Law (2d ed.), 666. The only difference between the general rule stated and that of Grohmann v. Kirschman, supra, is, that the one holds a conviction to be conclusive, while the other only makes it prima facie evidence of probable cause. But in any view taken of the rule, whether it be considered conclusive or only prima facie evidence of probable cause, it is proper on an action of malicious prosecution, to show it had been obtained by false and fraudulent testimony, or other unlawful means. No decision of this court has gone so far as to hold that a verdict obtained under the circumstances of the, case at bar was conclusive evidence of probable cause. The best that can be said of it under the most favorable circumstances is that it was persuasive evidence, which the defendant had a right to offer and did offer at the trial, but under the facts of this case it was not very persuasive, as the verdict of the jury would seem to establish.

There is another ground upon which this case must be decided in favor of appellant. At the trial the defendant was asked whether he had not made an effort to settle the ease through his counsel by accepting $500, to which he replied: “ That is what I wanted. Q. That is what you brought the prosecution for, as I understand it? A. For what? Q. To get your $500 back? A. That is all I brought it for, certainly.”

Nothing is better settled by our cases than that where one commences a criminal prosecution for the purpose of compelling his debtor to pay a just debt, it is prima facie evidence of want of probable cause and of malice, and shifts the burden of showing it was not so, on the defendant: Prough v. Entriken, 11 Pa. 81; Schofield v. Ferrers, 47 Pa. 194; Schmidt v. Weidman, 63 Pa. 173. To the same effect is Work’s Appeal, 59 Pa. 444; Mayer v. Walter, 64 Pa. 283; Fillman v. Ryon, 168 Pa. 484.

The defendant having’ admitted that he commenced the criminal prosecution for the purpose of getting his money back and thereby attempting to enforce payment of a debt, is within the rule of the cases just cited, and the burden was on him to show that he had probable cause and was not actuated by malice.

Judgment of the Superior Court reversed and judgment of the court of common pleas No. 1 of Philadelphia county affirmed.


author: Mr. Justice Stewart,

text:
    Stokes, Appellant, v. Pennsylvania Railroad Company.

      Nuisance — Negligence—Damages.
    In an action for damages occasioned by maintenance of a nuisance, the question of negligence is not involved.

      Nuisance — Injury to lands — Definition of nuisance-.

    Anything which causes hurt or damages to lands or tenements of another, or interferes with the reasonable employment of the same, is a nuisance.

      Nuisance — Injury to lands — Negligence—Railroads—Statute of limitations.

    In an action of trespass against a railroad company where the plaintiff in his statement declares that his land was injured by the negligent flow of acids from a tower house, and the testimony shows that the defendant’s employees discharged the contents of vessels containing acids on plaintiff’s land, and that these acts were constantly repeated, and that some of them had occurred within six years before the bringing of the suit, it is error for the court to enter a nonsuit.

      ■ In such a case the amount of damage recoverable is not ah element to be. considered in connection with a nonsuit; if entitled to merely nominal damages that would be enough to sa.ve the plaintiff’s case from such fate.
    Mitchell, C. J., and Bbown, J., dissent.
    Argued Jan. 9, 1906.
    Appeal, No. 145, Jan. T., 1905, by plaintiff, from order of O. P. No. 3, Phila. Co., June T., 1901, No. 3,608, refusing to take off nonsuit in case of Samuel Stokes v. Pennsylvania Railroad Company.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, J J.
    Reversed.
    Trespass to recover damages for injuries to land. Before Finletter, J.
    The plaintiff’s statement of claim was as follows :
    This is an action of trespass for the maintenance of á nuis-' anee and damages for the injury resulting therefrom, brought by Samuel Stokes, plaintiff, against the Pennsylvania Railroad Company, defendant.
    The plaintiff, on March 1, 1885, became the lessee .of sixty acres of land, in the city of Philadelphia, bounded northward by Rahn street, southward by a certain building know as Barton’s Paper Mills, eastward by State road, and westward by roadbed and tracks of the Pennsylvania Railroad,' defendant.
    That immediately after leasing the said land he, the said plaintiff, at considerable expense to himself, fertilized said ground for farming and pasturing purposes, and raised thereon, up to the time of the committing of the grievances hereinafter complained of, vegetables,, grass, etc.
    That during the year 1886 the defendant erected, along the western side of plaintiff’s ground, a certain tower house, where certain automatic signals are operated and through-the negligence and carelessness of the defendant, and its" servants, certain vitriol, acids and other deleterious matter has been permitted to flow from said tower house into and upon the ground of the said plaintiff. That said vitriol, acids and other deleterious matter is, and has been since the erection of the said towér house, by the negligence and carelessness of the defend^ant and its servants, allowed to flow upon plaintiff’s land and to percolate and drain in the soil and ground of the.plaintiff; whereby ten acres of said land has, for the period of six years last past, been rendered absolutely worthless for pasture or the raising of produce.
    The plaintiff further says, that by reason of the defendant’s wantonly and willfully allowing vitriol, acids and other deleterious matter to flow upon his ground from certain holders or wells erected and maintained by the said defendant along the bed of its said road, the said ground of the plaintiff has for a like period been rendered absolutely worthless to the plaintiff.
    The plaintiff further says that before becoming acquainted with the fact that the defendant had, through its wanton and willful negligence allowed said vitriol, etc., to flow upon his ground, placed thereon for pasture and other purposes, cattle of the value of $3,825, which became poisoned and subsequently died as the result of eating the grass upon the soil in which said acids, etc., had percolated, and from drinking acids, etc., thereon.
    That by reason of the aforesaid premises the plaintiff has been compelled to suffer loss by reason of his not being able to use said ground for farming and pasturing purposes, and in addition thereto has been compelled, in order to retain possession of certain other ground adjoining the aforesaid ten acres, and which is part of the same tract, to pay a rental of $100, though the same has been useless to him, as aforesaid.
    And the plaintiff further says that by reason of the aforesaid conduct of the defendant he has, during the six years last past, suffered damages to the amount of $20,000 at least, to recover which he has brought this, his suit.
    The facts developed by the testimony are stated in the opinion of the Supreme Court.
    The court in entering a nonsuit said:
    “ This is substantially a claim for damages for real estate and personal property. The allegation is that the injuries to the plaintiff arose from the negligence of the defendant. I do not see any evidence in this case to show that the defendants were negligent in the exercise of their right to operate their tower. I must, for several reasons, enter a nonsuit in this case.”

      Error assigned was refusal to take off nonsuit.

      Robert B. Kelley, for appellant.
    As this was an action for damages arising out of a nuisance, the plaintiff was not under any necessity to show negligence: Pottstown Gas Co. v. Murphy, 39 Pa. 257; Hauck v. Tidewater Pipe Line Co., 153 Pa. 366; Rogers v. Traction Co., 182 Pa. 473; Tuckachinsky v. Coal Co., 199 Pa. 515; Sparhawk v. Union Pass. Ry. Co., 54 Pa. 401.

      John Hampton Barnes, for appellee.
    The appellant failed to show that the damage of which he complained, occurred within six years of the issuance of the writ. This alone was fatal to his case: Owen v. Western Saving Fund, 97 Pa. 47; Binney’s Appeal, 116 Pa. 169; Lehigh Coal & Navigation Co. v. Blakeslee, 189 Pa. 13.
    The appellant could not recover for the rental value of the premises if the injury was a continuing one, because he voluntarily remained on the jmemises after the damage commenced.
    March 19, 1906:
   Opinion by

Mr. Justice Stewart,

The action here was trespass, and the complaint as set out in the statement was, that the defendant and its servants had negligently permitted vitriol, acids and other deleterious matter to flow from the tower house upon the line of defendant’s roadway, used for operating automatic signals, and from certain holders and wells along said roadway, over and upon the adjacent land of the plaintiff, thereby poisoning the herbage growing thereon, and causing the death of certain of plaintiff’s horses and cattle, and greatly damaging said land for agricultural purposes. It was complained that this condition of things thus created and maintained by defendant was a nuisance. On the trial of the case, little account seems to have been taken of the specific averments in the statement, and the difference between the allegata and the probata is rather marked. There was not a word of testimony in support of the averment that defendant bad any holders or wells along the line of its roadway, or that there had been a flow of any kind from its tower house upon the land of plaintiff. The plaintiff testified that he had seen persons whose employment was in or about the tower house, discharging the contents of large jars or vessels, each containing as much as two gallons of material used in connection with the batteries employed in the tower house upon his land; that sometimes the jars were carried over upon his land and there discharged, that sometimes they were discharged across the fence, and at other times he had seen the same ma-. terial as that contained in the jars swept under the fence and over upon his land; that the acts thus complained of were being constantly repeated against his protestations, and that it had been habitual up to the bringing of this action. One other witness testified that he had frequently seen these persons emptying the vessels upon defendant’s land. No objection was offered to this testimony on the ground of variance, and it was therefore in the case for what it was worth. It was followed by evidence as to the extent of the loss and injuries sustained in consequence. Maintenance of a nuisance was what was complained of in plaintiff’s statement. The learned trial judge in directing a nonsuit at the close of plaintiff’s ease, used this language : “ This is substantially a claim for damages on real estate and personal property. The allegation is that the injuries to the plaintiff arose from negligence of the defendant. I do not see any evidence in this case to show that the defendants were negligent in the exercise of their right to operate their tower.” This was manifestly a misapprehension of the issue being tried. True, the statement filed in this case averred that the acts complained of had been done negligently, but this did not make negligence a material question; the action being for damages occasioned by maintenance of a nuisance, the question of negligence was not involved. The Pottstown Gas Co. v. Murphy, 39 Pa. 257; Hauck v. Tidewater Pipe Line Co., 153 Pa. 366. The questions in the case were, first, were the continuous hurtful acts complained of committed? and, second, if so, to what extent did they injure plaintiff’s property with respect to its reasonable use ? The learned trial judge having expressed himself as above, concluded with these words: “ I must for several reasons enter a nonsuit in this case.” The only reason for the nonsuit specified was the one we have referred to; the others were not discussed upon the argument, nor have we been able from an examination of the case to discover them. In view of the nature of the action and the statement filed, the reason expressed was wholly inadequate. That the acts testified to, if committed, would constitute a nuisance, requires no discussion. Anything which causes hurt, or damage to the lands or tenements of another, or interferes with the reasonable enjoyment of the same is a nuisance. It was suggested, and indeed urged, upon the argument that the evidence failed to establish loss or damage to the plaintiff' within the statutory period prior to the bringing of the action, and that this justified the nonsuit. But the facts will not support this contention. The plaintiff’s claim of loss was made up of many items. True, the evidence did not show with sufficient clearness to warrant a finding, that the most serious loss claimed for was sustained within this period ; but the evidence as to the discharge of the deleterious matter upon plaintiff’s land within"this period to the injury of the herbage and the land itself, was both full and explicit. The amount of damage recoverable is not an element to be considered in connection with a nonsuit; if entitled to merely nominal damages that would be enough to save the plaintiff’s case from such fate. Whether the plaintiff was entitled to a verdict for any amount was for the jury to say under proper instructions from the court. All we now decide is, that the reason assigned for the nonsuit was inadequate, and no sufficient reason therefor has been called to our attention. From all that has been made to appear, the plaintiff was entitled to have the jury pass upon the question of his injury and defendant’s liability therefor.

The exception to this action on the part of the court is sustained, and the judgment is reversed with a venire facias de novo.

Mitchell, C. J., and Brown, J., dissent.


author: Mr. Justice Stewart, Mitchell, C. J.,

text:
    Bartlett v. Rothschild, Appellant.

      Insurance — Marine insurance — Agent—Personal liability of agent — Act of May 1, 1876, sec. 48, P. L. 53.
    Under the Act of May 1, 1876, sec. 48, P. L. 53, an agent of a foreign insurance company which has not complied with the laws of Pennsylvania, is personally liable on all contracts of insurance made by or through him on behalf of such company; and it is immaterial that the contract of insurance was not made in this state.
    In an action against an agent of a foreign insurance company which has not complied with the laws of this state, to enforce the personal liability of the agent under the act of May 1, 1876, the fact that the property insured was within the stat.e when the contract of insurance was made, is sufficiently established by evidence that the property insured was a vessel, that the residence of the owners of the vessel was in Pennsylvania, and that the vessel sailed from a Pennsylvania port on the voyage during which it was lost.

      Practice, C. P. — Direction of verdict for plaintiff — Evidence—Province of jury.

    In an action of assumpsit upon a contract it is never permissible for the court to direct a verdict for the plaintiff, except where the evidence is exclusively documentary and admittedly correct. Where plaintiff’s claim rests upon oral testimony the credibility of the witnesses is always a matter to be passed oñ by the jury, and the court cannot relieve them of it.
    Argued Jan. 11, 1906.
    Appeal, No. 191, Jan. T., 1905, by defendant, from judgment of C. P. No. 5, Phila. Co., March T., 1902, No. 659, on verdict for plaintiffs in case of Ezra S. Bartlett and George W. Shepherd, Jr., copartners, trading as Bartlett & Shepherd, v. Jacob Rothschild.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    Assumpsit to enforce personal liability of an agent of a foreign insurance company under the Act of May 1, 1876, sec. 48, P. L. 53. Before Davis, J.
    The facts are stated in the opinion of the Supreme Court.
    Under binding instructions from the court, the jury found a verdict for the plaintiffs for 12,888.40, subject to the point reserved, whether there is any evidence to go to the jury in support of the plaintiffs’ claim. Subsequently, on May 31, 1905, the court refused a motion for judgment in favor of the defendant non obstante veredicto on the reserved point, and entered judgment for the plaintiffs on the verdict.

      Error assigned was in entering judgment for plaintiffs.

      James C. Sellers, for appellant.
    It is manifest that sections 47 and 48 of the act of 1876 must be considered together. They must also be construed with reference to the entire system of insurance legislation in Pennsylvania: Com. v. Hammer, 11 Pa. Superior Ct. 138.
    These sections, being penal legislation, must also be construed strictly, section 48 no less so than 47: Adler-Weinberger S. S. Co. v. Rothschild, 123 Fed. Repr. 145; Merchants’ Bank v. Bliss, 13 Abb. Pr. (N. Y.) 225; Potter’s Dwarris on Statutes, 245; Bucher v. Com., 103 Pa. 528.
    The evidence does not show that appellant transacted business in Pennsylvania as the agent of an unauthorized insurance company of another state: Com. v. Standard Oil Co., 101 Pa. 119; Kilgore v. Smith, 122 Pa. 48; Com. v. American Tobacco Co., 173 Pa. 531; Mearshon v. Pottsville Lumber Co., 187 Pa. 12; Wolff Dryer Co. v. Bigler, 192 Pa. 466; Hovey’s Estate, 198 Pa. 385; People’s Bldg. Loan & Saving Assn. v. Berlin, 201 Pa. 1.
    It was incumbent on appellees to prove not only that appellant “ transacted business ” for an unauthorized company, but that he did so “ within this commonwealth: ” Com. v. Hammer, 11 Pa. Superior Ct. 138.
    Appellees were further bound to show that the particular contract of insurance upon which they sued was made within this commonwealth: Allgeyer v. Louisiana, 165 U. S. 578 (17 Sup. Ct. Repr. 427).
    It is submitted that the contract of insurance in this case was made either in Delaware or in New York. It is immaterial in which state. The material fact is that it was not in any sense a Pennsylvania contract: Hardiman v. Fire Assn., 212 Pa. 383.
    There is another ground upon which the court below should have entered judgment for the defendant! An examination of the insurance statutes of this state from the act of 1873, establishing an insurance department, down to the present time, will demonstrate that the entire system is intended to regulate insurance, as expressed in the Act of April 26,1887, P. L. 61, “ upon property within this commonwealth.” Such an examination was made by the United States circuit court of appeals for this circuit in a recent case involving the construction of the sections of the act of 1876 now under discussion: Rothschild v. Adler-Weinberger S. S. Co., 130 Fed. Repr. 866.
    If any evidence had been adduced of appellant’s agency, of the transaction of business by him in this state on behalf of the insurance company, or of the making of the contract of insurance by him in this state, then such evidence ought to have gone to the jury: Mayne v. Fidelity & Deposit Co., 198 Pa. 490.

      Edward F. Pugh, with him Henry Flanders, for appellees.
    Assuming to act for an unlicensed company in this state, Rothschild became personally liable to the plaintiffs, even independently of the act of 1876. He is responsible at common law: Lasher v. Stimson, 145 Pa. 30; McBride v. Rinard, 172 Pa. 542.
    It is of no consequence whether this contract is a Pennsylvania contract or not; it is in direct violation of the laws of Pennsylvania, and being upon Pennsylvania property, owned by Pennsylvania citizens, its provisions are enforceable here: Swing v. Munson, 191 Pa. 582.
    It is settled law that the residence of the owners of a vessel fixes her status as of the place where they reside : “The Rattler,” Taney, 456; “The Mary Bell,” 1 Sawyer, 135; “The Island City,” 1 Lowell, 375; “The Chelmsford,” 34 Fed. Repr. 399; Crapo v. Kelly, 83 U. S. 610; Clyde S. S. Co., 134 Fed. Repr. 95; International Nav. Co. v. Lindstrom, 123 Fed. Repr. 475; “La Bourgogne,” 139 Fed. Repr. 433.
    March 19, 1906:
   Opinion by

Mr. Justice Stewart,

Bartlett and Shepherd, a Philadelphia trading firm, obtained from The Commercial Fire Insurance Company of Wilmington, Delaware, a corporation foreign to the state of Pennsylvania, and unauthorized to do business therein, a policy of insurance on their barge, “ Raritan.” The vessel having been lost at sea and the insurance company proving insolvent, this action was brought against the appellant to recover from him individually the amount of the policy, on the ground that it had been obtained through him in Philadelphia, while he was there acting for and in behalf of the insurance company as its agent. The claim was asserted under the provisions of the act of May 1, 1876, supplementing the act of April 4, 1878, establishing an insurance department and regulating the business of insurance; the forty-eighth section of which reads as follows : “ The agent of any insurance company, of any other state or government which does not comply with the laws of this Commonwealth, shall be personally liable on all contracts of insurance made by or through -him, directly or indirectly for or on behalf of such company.”

That the insurer in this case was a company foreign to this state; that it had not complied with the provisions of any of the statutes entitling foreign corporations to do business within the state ; and that all the conditions of the policy had been met by the insured, were facts admitted upon the record. It remained for the plaintiff to establish prima facie, that the defendant was agent of The Commercial Fire Insurance Company, and that the contract of insurance was made by or through him acting as such agent within this state. A very brief reference to only some of the testimony will show how the plaintiffs attempted to meet the burden that was upon them. The witness, Frank B. Hall, testified that the plaintiffs residing in Philadelphia made applications through him to Frank B. Hall & Company, an insurance brokerage firm in New York with which witness was associated, for an insurance on the barge subsequently lost; that he in turn, applied to the defendant in Philadelphia, as the agent of The Commercial Fire Insurance Company, of Wilmington, Delaware, and negotiated with him for the policy; that he remitted the amount of the premium on the policy by check of plaintiffs, drawn to the order of The Commercial Fire Insurance Company, to the defendant in Philadelphia, whose indorsement appears thereon as treasurer of the company; that the policy was forwarded to his firm in New York, and by it forwarded to the plaintiffs in Philadelphia. He further testified in express terms several times repeated, that the defendant was the general agent of the insurance company in Philadelphia, and that on other occasions he had done business with him as such agent. There was other testimony to the effect that notwithstanding this was a foreign company, it transacted'nearly all its business in the office of the defendant in Philadelphia, and that defendant had admitted not only that he was the agent of the company, but that in point of fact he was the owner as well.

No attempt was made by the defendant to meet this testimony or impeach it in any way ; and upon the conclusion of the evidence, by direction of the court, a verdict was taken for plaintiff, subject to the question reserved — Whether there was any evidence to be submitted to the jury in support of the plaintiffs’ claim. Subsequently judgment for the defendant on the point reserved was moved, but refused, and judgment was entered for the plaintiffs on the verdict. That the burden of proving defendant’s agency was fully met, needs no discussion ; its sufficiency is apparent. It was quite as fully met with respect to all other facts which are made material by the language of the section of the act above quoted, imposing liability upon the agents of foreign insurance companies. It is contended, however, that this section is to be construed in the light of, and in connection with, the other sections of the act, especially the next preceding one, which makes it a misdemeanor for any person to transact business within this state as the agent of an insurance company of any other state or goverment, withoxrt a certificate of authority as required by law. This much conceded, it is argued that the words “ transacting business within this commonwealth,” must be read into the forty-eight section; and that being there, the effect is to so qualify the general terms of the section, as to make the latter apply only to agents of foreign insurance companies transacting business here. All this may be admitted without introducing any other material fact than those fully met in the plaintiffs’ evidence. Counsel very ingeniously, but to very little.purpose in view of the decisions of this court, derive as a conclusion from the construction contended for, that it is essential that it appear that the contract of insurance was made within this state. The very contrary to this has been expressly decided. In Swing v. Munson, 191 Pa. 582, the insurance policy was issued by a company in the state of Ohio and forwarded by that company to the insured in this state. The effort was to have it declared an Ohio contract. In delivering the opinion of this court, Mr. Justice Djsan, while holding that it was not an Ohio contract, proceeds to dispose of the question here raised : “ But,” he says, “ that we may meet a more important question because it affects the interest of all foreign insurance companies that seek to do business in this state, we prefer to assume that the contract was made in Ohio and is lawful there. It was a contract, however, in direct violation of the laws of this state ; it was the indemnification of a citizen of Pennsylvania against loss by fire on property wholly within Pennsylvania; without regard to where the contract was made, the subject of it was property within this state; it is the attempt of a foreign insurance company to do business in this state in violation of the.laws of the state.”

Equally fatal is the case just cited to the other contention of appellant’s counsel, that what is shown to have been done in connection with this policy was not transacting business within the meaning of the statute. It is unnecessary to repeat the facts of that case here; they are so closely like what we have in this that what was said there is entirely applicable here, and the decision is directly antagonistic to the position here taken. Admitting that the case lends support to the contention that the property insured must have been within the state when the contract of insurance was made, and assuming that to be the law, the evidence was quite sufficient on this branch of the inquiry. The residence of the owners of the vessel was in Philadelphia, and it was admitted that the vessel sailed from Philadelphia on the voyage during which she was lost. It is a well settled principle of maritime law, that the sovereignty of the state extends to. vessels of the state to which they belong: In re Clyde S. S. Company, 134 Fed. Repr. 95. This principle consists with the general rule that the situs of personal property follows the‘domicil of the owners.

It follows from what has been said that the first two assignments of error which deny the sufficiency of the evidence must be overruled.

The third assignment charges error in directing a verdict to be taken for plaintiffs subject to the point reserved, “ whether there is any evidence to go to the jury in support of the plaintiffs’ claim.”

It is never permissible in an issue of this kind for the court to direct a verdict for the plaintiff, except where the evidence is exclusively documentary and admittedly correct. Where plaintiffs’ claim rests upon oral testimony, the credibility of the witnesses is always a matter to be passed on by the jury, and the court cannot relieve them of it. In Reel v. Elder, 62 Pa. 308, the instruction by the court took the case from the jury. Speaking to this point, the court there say: “ Setting aside the Tennessee record, which in this part of the charge the judge excludes from consideration, so far from there being any conclusive evidence, which would justify the court in withdrawing the case from the jury, it was all oral testimony, depending not only on the credit to be given to the witnesses, but on the construction to be put on their language. However clear and indisputable may be the proof, when it depends upon oral testimony, it is nevertheless the province of the jury to decide under instructions from the court, as to the law applicable to the facts, and subject to the salutary power of the court to award a new trial if they should deem the verdict contrary to the weight of evidence.” Again in Grambs v. Lynch, 20 W. N. C. 376, a case cited and applied later in Harlow & Co. v. Homestead Boro., 194 Pa. 57, it is declared to be “ settled law that when a case depends upon oral testimony, such testimony must be submitted to the jury.” Here the plaintiff’s case rested almost wholly upon oral testimony ; if believed by the jury, it established a prima facie case, and entitled the plaintiff to a verdict; but the jury alone could say through their verdict, whether the condition had been met. While we have no reason to think that any different result would have been reached had this case been submitted to the jury, yet because this well-established rule was'not observed, we are compelled to reverse the judgment.

Judgment reversed and a venire facias de novo awarded.

Mitchell, C. J.,

concurring:

I concur in the reversal of this judgment because it should have gone to the jury. But I would go further and hold that if the jury should find that the contract of insurance was made in New York, as the evidence ratber tends to establish, it would be a good defense to this action. It is not within the power of a statute of Pennsylvania to add a penalty or impose an additional liability to a contract made in another state, and valid there.

When Swing v. Munson, 191 Pa. 582 was decided, I was of opinion that it stretched the authority of the Pennsylvania statute beyond its legitimate province. Further discussion and consideration of the subject have strengthened that conviction. The only valid color of justification for that decision, was that the courts of this state would not aid the enforcement of a contract opposed to its declared statutory policy. In this case it is proposed to go a step further and add to a contract not made in this state, a liability not based on anything in its .terms, and not enforceable anywhere else. I do not think this can be done without violation of settled and fundamental legal principles. In Com. v. Biddle, 139 Pa. 605, it was conceded that the commonwealth might make any act criminal if done in this state, but that was the limit of the concession, and marked the true limit of the commonwealth’s jurisdiction.