author: Mr. Justice Mestrezat,

text:
    Lehigh Valley National Bank v. Ott, Appellant.

      Promissory notes — Accommodation notes — Partnership—Harmless error.

    1. In an action by a bank against a son as surviving partner of a firm composed of the defendant and his father, on a promissory note, where ft appears that the note was endorsed by the father with the firm name in his lifetime as an accommodation of the maker, a verdict and judgment for the plaintiff will be sustained, where the testimony fully warrants a finding by the jury that the firm’s business included the making of accommodation paper, and that to the knowledge of both partners such paper was frequently made by the firm, and that the note in suit was the last of several renewal accommodation notes, one of which renewal notes had been signed by the son.
    2. In such a case it is proper to admit testimony offered for the purpose of showing that the son furnished the bank a statement of the firm’s liability after his father’s death, where such statement tends to show an admission by the defendant of his liability on the note.
    3. The admission of incompetent evidence is not ground for a reversal where it has worked no injury by its admission.
    Argued March 4,1912.
    Appeal, No. 168, Jan. T., 1912, by defendant from judgment of C. P. Northampton Co., Noy. T., 1910, No. 76, on verdict for plaintiff in case of Lehigh. Valley National Bank v. Robert B. Ott, surviving partner of the firm of Robert J. Ott & Son, composed of Robert J. Ott and Robert B. Ott, Administrator of Robert J. Ott, deceased.
    Before Mestrezat, Potter, Elkin, Stewart and Mosci-izisker, JJ.
    Affirmed.
    Assumpsit against endorsers on a promissory note. Before Heydt, P. J., specially presiding.
    The facts are stated in the opinion of the Supreme Court.
    At the trial when Robert B. Ott was on the stand he was asked this question:
    Q. Do you recollect furnishing the bank with a statement of the condition of the assets and liabilities of your firm soon after your father died?
    Objected to as incompetent and immaterial.
    Mr. Doster: I propose to show now by this witness that they furnished a statement of their liabilities which amounted to $12,000, and that our note was included in that amount.
    The Court: That is, that this note now in suit was included in that statement?
    Mr. Doster: Included in that statement, although not specified, but the total indebtedness is the same, including the $2,300 note.
    The Court: Objection overruled; bill sealed for defendant. [1]
    George W. Holloway, sworn in behalf of plaintiff in rebuttal.
    Direct Ex. by Mr. Doster.
    Mr. Doster: We propose to prove by this witness that he was the assistant cashier of the Lehigh Valley National Bank; that he is now full cashier; that he has made a copy of the credit book of the bank to show the notes made by the Otts With Brown, whether straight notes or accommodation notes, from the year 1901 to the death of Robert J. Ott, September 28,1908.

      Mr. Loos: You are cashier of the bank?
    A. Yes, sir.
    Q. Do you own any stock?
    Objected to.
    The Court: Objection sustained.
    Mr. Doster: That he also made a list from the books of the bank of the accommodation notes drawn and discounted in the Lehigh Valley National Bank by Bobert J, Ott & Son, the list being the same one that was testified to yesterday by Bobert B. Ott; that on the death of Bobert J. Ott he furnished the bank with a statement of the assets and liabilities, including among them this $2,300 note, and that at no time during these conversations did Mr. Ott claim that this $2,300 note was not paid and that he was not liable on that note.
    Objected to, for the same reason, that the offer does not contain a proposition to prove that the facts were brought to the knowledge of the surviving partner during the time, and therefore would be incompetent to charge him in this suit.
    The Court: Objection overruled. Bill sealed for defendant. [3]
    Bobert B. Ott was asked this question:
    Q. Do you know how the $12,000 item of the Lehigh ‘ Valley National Bank was made up?
    Objected to, because he has twice said he don’t know.
    The Court: Objection sustained. Bill sealed for defendant. [5]
    Q. Did you pay to the Lehigh Valley National Bank all the indebtedness that you admitted as being correct?
    Objected to.
    The Court: Objection sustained. Bill sealed for defendant. [6]
    Q. Can you give us a statement of the payments made to the Lehigh Valley National Bank after the death of your father?
    Objected to; it makes no difference what payments were made on account.

      The Court: Objection sustained. Bill sealed for defendant. [7]
    Verdict and judgment for plaintiff for $¡2,652.65. Defendant appealed.

      Errors assigned were (1, 3, 5, 6, 7) rulings on evidence quoting the bill of exceptions.

      Edward J. Fox, with him James W. Fox and N. J. Loos, for appellant.
    “Where one partner endorses a note in the name of the firm for the accommodation of a third person, without express authority from his partner, they will not be bound thereby, as against the partner endorsing the note:” Berryhill v. M’Kee, 1 Humphreys (Tenn.) 31; Fielden v. Lahens, 9 Bos. (N. Y.) 436; Whitmore v. Adams, 17 Iowa 567; Elliott v. Dudley, 19 Barbou (N. Y.) 326; Bank of Ft. Madison v. Alden, 129 U. S. 372 (9 Sup. Ct. Repr. 332); Shaaber v. Bushong, 105 Pa. 514; Early v. Reed, 6 Hill (N. Y.) 12.

      W. E. Foster, for appellee.
    Even if the testimony was irrelevant or incompetent, which we deny, it was harmless, and could not affect the result: Pusey v. Ledward, 1 Del. County 185; Boyd v. Boyd, 1 Watts 365; Com. v. Irwin, 1 Clark (Pa. Law J.) 344; Closser v. Washington Twp., 11 Pa. Super. Ct. 112; Wills v. Hardcastle, 19 Pa. Super. Ct. 525; Zugsmith v. Rosenblatt, 15 Pa. Super. Ct. 296.
    March 18, 1912:
   Opinion bx

Mr. Justice Mestrezat,

We are all of the opinion that the record in this case discloses no reversible error, and that the judgment should be affirmed. The controverted question in the court below was whether Robert B. Ott, surviving member of Robert J. Ott & Son and who made the real defense in the case, was liable on the note in suit endorsed by his father, the other member of the firm, in the name of the firm for the accommodation of the maker. Robert B. Ott denied that the making of negotiable paper was within the scope of the business of the firm, and alleged that he had no knowledge of and did not' consent to the endorsement of the note in suit. The question was submitted to the jury by the court below in language to which no exception was taken. The learned judge charged inter alia as follows: “Now, I say to you that if it was a usual and customary thing within the scope of their business to make accommodation notes in order to raise money, either temporarily or for a longer term, to their clients on whose property they proposed to raise mortgage loans, and if this defendant, Robert B. Ott, knew that fact then Robert B. Ott would be liable for the endorsement made by his father. That is, if one partner signs or endorses an instrument in the firm’s name and the other partner knows it, or consents to it, or is present at the execution, then he is as much bound by the instrument as if he had signed it himself. If it was not within the usual scope of their business, but if Robert B. Ott was present when these notes were endorsed by his father and knew about it, or if it was the arrangement between them that the father was the business end of the firm and that the younger man assented to whatever the father did, then Robert B. Ott is liable upon this endorsement.” Under these instructions the jury found for the plaintiff. There is no assignment of error which raises the question of the sufficiency of the evidence to support a finding for the plaintiff on the instructions. The assignments all go to the admissibility of certain testimony. The court properly admitted the testimony offered for the purpose of showing that the defendant furnished the bank a statement of the firm’s liabilities after his father’s death, as it, with other evidence in the case, tended to show an admission by the defendant of his liability on the note. The testimony complained of in the third assignment was likewise competent for the same purpose. We cannot agree with the appellant that the proof did not connect the statement made by the defendant with the note in suit. It is true there was some discrepancy in the figures but the evidence was sufficient to warrant the jury in finding that the note was included in the $12,209.49 item of the account. The other assignments are clearly without merit and need no discussion.

It may, however, be suggested that if the testimony offered was improperly rejected it did the defendant no harm. The firm of Robert J. Ott & Son was for many years engaged at Bethlehem in the business of mortgage loans and insurance. The testimony fully warranted a finding by the jury that its business included the making of accommodation paper, and that to the knowledge of both partners such paper was frequently made by the firm. It appeared that the note in suit was the last of several renewals of an accommodation note endorsed by the firm several years prior thereto, and that, while his father usually attended to this part of the firm’s business, Robert B. Ott on one occasion at least renewed the note. The evidence was so conclusive that had the jury failed to find such to be the facts, it would have been the duty of the court to set aside the verdict. The exclusion of the evidence complained of in the assignments if technically erroneous may, therefore, be regarded as harmless error, and does not warrant the reversal of the judgment.

The judgment is affirmed.


source: Caselaw Access Project

author: Me. Justice Mestrezat,

license: Public Domain

text:
    McCoy v. Wolf Company, Appellant.

      Negligence — Master and servant — Unguarded shafting — Act of May 8, 1905, P. L. 358 — Contributory negligence.

    1. Shafting thirteen and one-half feet above the floor of a fac tory and ending in a collar upon •which is a projecting set screw, is properly guarded within the meaning of the Act of May 2, 1905, P L. 352, which provides that “shafting, set screws......shall be properly guarded,” in so far as employees on the floor of the factory are concerned; but it is not properly guarded as to an employee who is engaged at work at a scaffold ten feet nine inches above the floor and who was killed by reason of his clothes catching on the end of the revolving shaft.
    2. “Properly guarded” is a relative term or expression, and whether the statutory requirement in that respect has been complied with necessarily depends upon the facts of the particular case. Machinery may be so distant from the place where an employee is engaged, as to render it entirely safe as to him; on the other hand, it may be located in such proximity to the place he is called to perform his service that to protect him against danger an artificial guard is necessary.
    3. In an action against an employer to recover damages for the death of an employee, the question of the deceased’s contributory negligence is for the jury, where the evidence shows that the deceased did general work about the defendant’s factory, that on the day of the accident he was directed to assist a carpenter in completing certain work in the construction of a scaffold of a temporary character; that about four feet above the top of the scaffold was a revolving shaft which was unguarded, and that the deceased in performing the work which he was directed to do was caught by the revolving shaft and killed.
    Argued March 4,1912.
    Appeal No. 225, Jan. T., 1911, by defendant from judgment of C. P. Franklin Co., April T., 1910, No. 155, on verdict for plaintiff in case of Fannie G. McCoy v. The Wolf Company.
    Before Mesteezat, Pottee, Elkin, Stewaet and Moschziskee, JJ.
    Affirmed.
    Trespass to recover damages for death of plaintiff’s husband. Before Gillan, P. J.

      The circumstances of the accident are stated in the opinion of the Supreme Court.
    Verdict and judgment for plaintiff for $1,510.41. Defendant appealed.

      Error assigned was in overruling motion of defendant for judgment n. o. v.

      Sharpe & Elder and Wetzel & Hambleton, for appellant.
    The line shaft was properly guarded: Glassheim v. Printing Co., 34 N. Y. Supp. 69; Glen Falls Portland Cement Co. v. Ins. Co., 162 N. Y. 399, (56 N. E. Repr. 897); Kirwan v. Am. Lithographic Co., 108 N. Y. Supp. 805; Strode v. Columbia Box Co., 124 Mo. App. 511, (101 S. W. Repr. 1099); Harper v. R. R. Co., 115 S. W. Repr. 198; Houg v. Lumber Co., 129 N. W. Repr. 633; Belles v. Jackson, 4 Pa. D. R. 194; Gillen v. Rowley, 134 Pa. 209.
    When contributory negligence is plainly shown by the uncontradicted evidence of plaintiff’s own witnesses, defendant is entitled to binding instructions: McCauley v. Phila. Trac. Co., 13 Pa. Super. Ct. 354; Holmes v. Union Trac. Co., 199 Pa. 229; Martin v. Niles-Bement-Pond Co., 214 Pa. 616; Lee v. Dobson, 217 Pa. 349.

      John W. Hoke, with him William S. Hoerner, for appellee.
    The shaft was not properly guarded: Jones v. Caramel Co., 225 Pa. 644; Fegley v. Rubber Co., 231 Pa. 446; Valjago v. Steel Co., 226 Pa. 514.
    The appellant alone was responsible for the location, construction and dimensions of the scaffold. It was built and placed by an agent of the owner who was in charge of the work, and was therefore a vice principal: Groves v. McNeil, 226 Pa. 345.
    March 18, 1912:
   Opinion by

Me. Justice Mestrezat,

This is an action of trespass brought by the plaintiff to recover damages which she sustained by the death of her husband, caused, as she alleges, by the negligence of the defendant company. The defendant is a manufacturing company and its plant is located at Chambers-burg, Pennsylvania. The machinery on the floor of the machine shop is driven by a line shaft which is supported by hangers suspended from the ceiling. It extends east and west and is about two feet from the small tool room located in the southwest corner of the shop. The company desiring to extend the shaft eastwardly directed one Selig, in its employ, to make the extension, and in doing so it was necessary to erect a temporary scaffold. On the morning of February 7, 1910, Selig began the construction of the scaffold, and in the afternoon of that day, having asked the defendant for assistance, McCoy, the plaintiff’s husband, was directed to assist in the work. McCoy was an employee of the defendant and did general work about the plant. When he arrived at the place the framework of the scaffold was in position, and nothing remained to be done but to lay three boards on top of the structure and brace it. McCoy began his work by assisting Selig to put the plank on top of the scaffold. He and Selig then proceeded to brace the structure from the top by nailing the stays to the scaffold and to the tool room. Having completed the work, McCoy undertook to leave the scaffold, when his clothing was caught by the revolving line shaft and he was killed. His clothing remained on the east end of the shaft. The scaffold was erected for the purpose of installing the necessary hangers along the ceiling of the shop for the extension of the shaft. The shaft was about thirteen and one-half feet above the floor and about one foot below the ceiling.. It was to be extended eastwardly from the existing shaft. The scaffold was about ten feet nine inches high, from twelve to fourteen feet long, three feet wide, about four feet below the line shaft, and extended about fifteen inches west of the east end of the shaft. Hangers supported the line shaft and a screw with a square end projected about three-fourths of an inch from, the set-collars which were fastened to the shaft and were on each side of the hangers. One of the hangers was about eight inches from the east end of the shaft.

The negligence of which the plaintiff complains was the failure to have the line shaft protected as required by the 11th section of the Act of May 2, 1905, P. L. 352, 5 Purd. 5484. That section provides, inter alia, as follows : “All vats, pans, saws, planers, cogs, gearing, belting, shafting, set-screws, grindstones, emery wheels, fly wheels and machinery of every description shall be properly guarded.” The defense was that the machinery was “properly guarded” as required by the statute, and that the deceased was guilty of contributory negligence. It is contended by the defendant that the distance of the shaft from the floor was a proper guard under the statute, and that the facts not being in dispute, the court should have so declared as a matter of law. With this contention we do not agree. The purpose of the statute was, as indicated by the title, “to provide for the safety of all employees in all industrial establishments.” This can only be accomplished by guarding all machinery with which any employee may reasonably be expected to come in contact. The distance of the shaft and set-screw above the floor in the present case would be sufficient protection against any apparent danger to employees on the floor. As to such, the machinery was properly guarded, but it was not only those employees that the statute required to be protected but all those engaged in the defendant’s service in that establishment. “Properly guarded” is a relative term or expression, and whether the statutory requirement in that respect has been complied with necessarily depends upon the facts of the particular case. Machinery may be so distant from the place where an employee is engaged as to render it entirely safe as to him; on the other hand, it may be located in such proximity to the place he is called to perform his service that to protect him against danger an artificial guard is necessary. The purpose of the statute clearly discloses this distinction. The necessity for an artificial guard, therefore, depends upon the existence of certain conditions and is a question of fact for the jury. In the present case it was the duty of the defendant to protect McCoy and Selig against the danger incident to contact with the revolving line shaft. They were required to perform their work in close proximity to it. It is true that the scaffold had no connection with the operation of the revolving shaft, but that is of no consequence so far as concerns the right of the decedent to protection against the danger of the unguarded machinery. The scaffold was being erected by the defendant company, and it must be assumed that the company knew its location and its proximity to the shaft. This fact charged it with notice of the danger to the decedent necessarily incident to the performance of his work, and, therefore, imposed upon the company the statutory duty of protecting him from contact with the shaft and projecting screw by an artificial guard. The failure to furnish s.uch guard was negligence.

Whether the deceased was guilty of contributory negligence was clearly for the jury. McCoy was directed by the defendant to assist in the erection of the scaffold. He had nothing whatever to do in locating it. When he began work the scaffold was almost completed, and nothing remained to be done except to place the planks on top of the framework for the floor, and to brace or stay it. He was doing his work at the place he was required to do it. It was necessary to connect the extension with the existing shaft, and it is certainly not apparent that the work could have been done without the scaffold extending at least some distance beyond the east end of the existing shaft. There is no evidence that the scaffold was not erected in the proper place, and we cannot assume that it was not so erected. The shaft was about four feet above the top of the scaffold and the danger to the employees in nailing the brace was not so obvious or imminent that the court could declare the performance of the work under the circumstances to be negligence. There is no evidence tending to show that McCoy was directed not to brace the scaffold in the way in which he and Selig were doing it, or that he knew it could be done as well in any other way. Presumably he was performing the work in the manner in which he believed it should be done. Manifestly, Selig also thought that the braces should be nailed at the top of the uprights, and he also thought it could be done in safety. The uprights of the scaffold were toe-nailed at the bottom. It cannot be assumed that either of the men believed they were endangering their lives in the performance of the service. It was, therefore, a question for the jury whether the decedent was negligent in attempting to assist Selig in nailing the braces to the scaffold and the tool room.

The judgment is affirmed.


author: Per Curiam,

text:
    McGinley v. Central Railroad Company of New Jersey, Appellant.

      Negligence — Railroads—Defective car — Duty of inspection— Mining company.

    Where a railroad company, after it has had an opportunity of inspecting a car, delivers such car with a defective brake to the car crew of a mining company, and a member of such crew is injured by reason of the defective brake while the car is being moved on to a siding of the mining company for the purpose of being unloaded, the railroad company will be liable in damages to the member of the mining company’s crew who was injured.
    Submitted March 4, 1912.
    Appeal No. 325, Jan. T., 1911, by defendant from judgment of C. P. Carbon Co., Jan. T., 1906, No. 28, on verdict for plaintiff in case of John McCinley v. The Central Railroad Company of New Jersey.
    Before Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Trespass to recover damages for personal injuries. Before Heydt, P. J.
    The opinion of the Supreme Court states the case.
    Verdict and judgment for plaintiff for $110,000. Defendant appealed.

      Error assigned was in refusing binding instructions for defendant.

      Jackson E. Reynolds, Frederick Bertolette, George Holmes and Laird H. Barber, for appellant,
    cited: Spisak v. R. R. Co., 152 Pa. 281; Miller v. Ry. Co., 216 Pa. 105; White v. R. R. Co. 54 Atl. Repr. 586; Savings Bank v. Ward, 100 U. S. 195; Langridge v. Levy, 2 Mees. & Wel. 519; Loveland v. Burke, 120 Mass. 139; Goodland Mill Co. v. Oil Co., 63 Fed. Repr. 400; Bennett v. R. R. Co., 102 U. S. 577; Chicago I. & L. Ry. Co. v. Martin, 31 Ind. App. 308, (65 N. E. Repr. 591).

      J. O. Ulrich and L. G. Scott, for appellee,
    cited: White v. R. R. Co., 54 Atl. Repr. 586; Pa. R. R. Co. v. Snyder, 55 Ohio 342; Moon v. R. R. Co., 48 Minn. 106 (48 N. W. Repr. 679); Stewart v. Harvard College, 94 Mass. 58; McGinley v. Coal & Nav. Co., 224 Pa. 408; Rehm v. R. R. Co., 164 Pa. 91.
    March 18,1912:
   Per Curiam,

The defendant company is a common carrier. On December 17, 1903, it delivered one of its freight cars to the Chestnut Ridge Railway Company at Lehigh Gap. The car was taken to Kunkletown, loaded with prop timbers, returned to the Gap, where it was delivered, December 18, 1903, to the defendant company, which transported it via Mauch Chunk to Hauto, and there placed it on the delivery siding of the consignee, the Lehigh. Coal and Navigation Company. The following morning the crew of the latter company, including the plaintiff, a brakeman, removed the car into a blind siding of the consignee’s yard at Hauto. While engaged in removing the car, the plaintiff applied the brake which gave way, and he was thrown forward and fell from the car, which passed over him and cut off both legs. It appeared that the brake chain had been broken and tied with a wire which broke when the plaintiff applied the brake. This action was brought ^gainst the defendant to recover damages which the plaintiff alleges resulted from and were caused by the negligence of the defendant company in failing to inspect the car before delivering it to the consignee. The trial resulted in a verdict and judgment for the plaintiff. The defendant has appealed.

The defendant company contends that the plaintiff not being engaged in its service at the time he was injured owed him no duty to inspect the car for his protection, that it was not negligent, and that there was no causal connection between the alleged negligence and the accident. Neither of these contentions can be sustained. It is the settled law of this State that a receiving carrier must inspect all cars it transports, and is liable to its own employees for injuries resulting from a failure to perform the duty. The defendant company had the opportunity to inspect the defective car at Lehigh Gap, Mauch Chunk and Hauto before the company delivered it to the Lehigh Goal and Navigation Company at the latter place. The defendant knew when it delivered the car to the consignee’s delivery siding that it would be moved by the consignee’s crew to another place for unloading, and it owed a duty to that crew, one of which was the plaintiff, to properly inspect the car and deliver it to the consignee’s siding in a reasonably safe condition: McConnell v. Pennsylvania Railroad Company, 223 Pa. 442. The Lehigh Company is not a common carrier but a mining company and received the car simply foi? the purpose of removing the prop timbers from it. Hence there was no duty of inspection resting upon it, the failure of which imposed liability to an injured employee of that company.

The breaking of the defective brake-chain was the direct and immediate cause of the accident, and the failure, by proper inspection, to discover the effect and remedy it was properly found by the jury to be negligence.

The judgment is affirmed,


text:
    East White-Land Township, Appellant, v. Chester County.

      Road Law — Abandoned turnpike roads — Duty to repair — Township — County—Act of April 25,1907, P. L. 10J¡.

    1. A township cannot maintain an action of assumpsit to recover from a county the cost of repairs voluntarily made by the township to a turnpike road which had been partly abandoned and partly condemned.
    2. The Act of April 25, 1907, P. L. 104, relieves the township of the duty to maintain and repair such road, and imposes it upon the county. If the county fails in its statutory duty there is an ample remedy directly against it and its officials, but the township can not make the repairs and collect the cost thereof from the county.
    Submitted March 4, 1912.
    Appeal No. 151, Jan. T., 1911, by plaintiff from order of C. P. Chester Co., Jan. T., 1910, No. 36, refusing to take off non-suit in case of East Whiteland Township v. Chester County.
    Before Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Assumpsit to recover $3,448.24, representing the cost of repairing a turnpike road, partly abandoned and partly condemned. Before Butler, J.

      At the trial the court entered a compulsory non-suit which it subsequently refused to take off.

      Error assigned was in refusing to take off non-suit.

      J. Frank E. House, for appellant.

      W. W. MaoElree, for appellee.
    March 18, 1912:
   Per Curiam,

This was an action of assumpsit brought by the Township of East Whiteland to recover from the County of Chester the cost of repairs made by the township on that part of the Philadelphia and Lancaster Turnpike in East Whiteland Township that had been partly abandoned and partly condemned. The court below properly entered a non-suit. Whether the former turnpike should be kept in repair by the state or the county or a municipal division thereof was clearly a matter for legislative determination. The Act of April 25, 1907, P. L. 104, imposed on the county the duty to repair and maintain the turnpike or part thereof that had been condemned for public use or had been abandoned. The act manifestly, relieved the township of the duty to maintain and repair the highway which was imposed by former statutory enactments. Owing no duty to the public to repair the road, the township was not required to make repairs and is not liable for injuries resulting from a failure to make them. If the county failed in its statutory duty to repair, there is an ample remedy directly against it and its officials to enforce the performance of the duty, but the township is without authority to make the repairs and collect the costs from the county.

The judgment is affirmed.


text:
    Wolff v. Hafer, Appellant.

      Will — Devise—Construction—Estate in fee simple.

    Testatrix in a will written by herself and inartificially drawn stated that she was about to undergo a critical operation, and continued as follows: “Would like to say this is what I want done with my personal property and real estate.” She then made a number of bequests of money and some articles of jewelry. She continued as follows: “Row I think my home on Philadelphia (Avenue) should be sold and a small house built on my lot on Wolf Street for my sister Laura and my dear boy Eoland, house not to cost more than two thousand dollars but comfortable and the balance of all moneys put on interest for Eoland my boy, Dr. Palmer will you kindly see this is carried out, let Mr. Seiders fix this up. I have given my watch to my sister, and as stated she and Eoland are to have the bulk of everything, only the names mentioned herein. Please see that my dear boy is taken care of.” Eoland was her sister’s son and was reared by testatrix and regarded as her son. The doctor mentioned was the physician of the testatrix, and Mr. Seiders was her neighbor and a justice of the peace. Held, that Laura and her son Eoland took an estate in fee simple in the Wolf Street property.
    Argued March 5,1912.
    Appeal No. 84, Jan. T., 1912, by defendant from judgment of C. P. Franklin Co., Feb. T., 1912, No. 102, for plaintiffs on case stated in suit, of James Roland Wolff and Laura Guthrie v. R. O. Hafer.
    Before Mesteezat, Pottee, Elkin, Stewaet and Moschziskee, JJ.
    Affirmed.
    Case stated to determine marketable title to real estate. Before Gillan, P. J.
    From the case stated it appeared that Mary Bell Wolff died on July.22,1905, leaving a will which was as follows:
    “July 18, 1905. As I am about to undergo a critical operatig would like to say this is what I want done with my personel property & realstate three hundred dollers to be giving to my Brother James Grant Guthrie one hundred each to Maggie and Callie Wolff & Mrs. Ellen hassler; one hundred to my Sister who lives in Chicago ills Mrs. Frederick Tracey. Ten dollars to Miss Rebecca Leonard, my three oppal ring to Miss Ida Allison, and the one oppal to Margaret Hassler My pearls & Turquoise ring to Mable Guthrie my amethyst ring to cousin Marne Guthrie of Lancaster city Now I think my home on Philadelphia should be sold and a small house built on my lot on Wolf street for my sister Laura & my Dear boy Roland house not to cost more than two thousand d oilers but comfortable and the balance of all moneys put on interest for Roland my boy, Dr. Palmer will you kindly see this is carried out let Mr. Seiders fix this up I have given my watch to my sister and as stated she and Roland are to have the Bulk of Every thing, only the names mentioned herein. Please see that my dear boy is teaken care of & hope he will grow up a good an useful man May the Lord Bless & take care of him. Signed by me this day.
    (Sg.) Mary Belle Wolff. (Seal.)
    (Sg.) Mary Belle Wolff. (Seal.)
    Will have Roland sign his Name here as he seen me write it.
    (Sg.) James Roland Wiolff. (Seal.)” Laura Guthrie and her son Roland contracted to sell the Wolf street property to defendant. The court in an opinion by Gillan, P. J., held that they had a good title in fee simple and entered judgment in their favor for $2,000.

      Error assigned was the judgment of the court.

      William, S. Eoerner, for appellant.

      John D. Rice, for appellees.
    March 18, 1912:
   Opinion by

Mr. Justice Mestrezat,

Mary Bell Wolff died in the borough of Chambers-burg, on July 22, 1905, leaving a last will, dated July 18, 1905. The will was probated on July 26, 1905, and letters of administration were issued with the will annexed. The testatrix was a widow at tbe time of her death with no children nor other lineal descendants, and left to survive her two sisters and one brother of the half blood and a nephew, James Roland Wolff, a son of Laura Guthrie, one of the half-sisters. Wolff was reared in the home of the testatrix as her son. She owned a lot on Philadelphia avenue on which was erected a two-story brick dwelling house, her residence, and a vacant lot on Wolf street, both in Chambersburg. The decedent left an estate of about six thousand dollars after the payment of debts. The will provides inter alia as follows: “Now I think my home on Philadelphia should be sold and a small house built on my lot on Wolf street for my sister Laura and my dear boy Roland house to cost not more than two thousand dollars but comfortable and the balance of all moneys put on interest for Roland my boy.” In pursuance of an order of the orphans’ court the administrator sold the “house on Philadelphia” (avenue) referred to in the will, and with two thousand dollars of the proceeds derived from the sale erected “a small house” upon the lot of ground of the decedentsituate on Wolf street in Chambersburg. Laura and Roland took possession of the Wolf street property and have since occupied it, claiming to own it in fee simple. They entered into a written agreement with R. O. Safer, the defendant, to sell and convey the property to him in fee. They tendered a deed to Safer which he refused to accept because, as he alleged, they could not convey a fee simple title. This action was brought to recover the purchase money.

The single question in the case is whether Laura Guthrie and Roland Wolff took a fee simple title to the Wolf street property under the will of Mary Bell Wolff. The will is brief and was very inartificia'lly drawn, but there is no difficulty in ascertaining from the whole instrument the intention of the testatrix as to the disposition of her property. Anticipating that an operation about to be performed on her would be fatal, she wrote the will prefacing the dispositive part with “What I want done with my personal property and real estate,” thereby disclosing the intention to dispose of her whole estate. With this expressed intention of disposing of the entire estate, the testatrix first makes several small bequests of money and jewelry to certain relatives, and then uses the language above quoted. The manifest intention of this provision was that with the two thousand dollars of the proceeds derived from the sale of the testatrix’s resident property, a small house should be erected by her personal representative' on the Wolf street lot, and the property thus improved should belong to Laura and Boland in fee. There is no gift over of the property and no other disposition of it in the will. Equally true is it that if the clause does not carry a fee to the Wolf street property, Boland takes no title to “the balance of all moneys” given him in the same clause. Unless, therefore, the provision passes in fee the property. to the two devisees, there is an intestacy as to the larger part of the estate which, as pointed out above, does not accord with the expressed intention of the testatrix to dispose of her entire estate, nor with the settled rule of testamentary interpretation that there is a presumption against the testatrix dying intestate as to any part of her estate.

If the clause in question stood alone, unaffected by other provisions of the will, it might not be sufficient to carry a fee to the real estate. But when read in the light of the whole instrument, as it must be, the intention to devise the property in fee is clear. Immediately succeeding the language quoted above and as part of the same sentence is the following: “Dr. Palmer will you kindly see this is carried out and let Mr. Seiders fix this up I have given my watch to my sister and as stated she and Boland are to have the bulk of everything, only the names mentioned herein.” Dr. Palmer was the physician of the testatrix, and Mr. Seiders had been her neighbor for many years and was a justice of the peace. Had the testatrix used the precatory word “wish” instead of “think-should” in the clause, there could be no doubt that a fee would pass. But the language employed is stronger than if she had simply expressed a desire that her residence property should be sold and a house erected on the Wolf street lot for the two beneficiaries. The testatrix says she thinks the sale of her home should be made and the house should be built for Laura and Roland, and requests that her friend and physician “will kindly see this is carried out.” This is equivalent to a positive testamentary direction to sell the real estate and erect a house on the vacant lot for the two devisees. This was clearly a gift or devise of .a house, and hence of the lot on which it was built: Bennet v. Bittle, 4 Rawle 339; Rogers v. Smith, 4 Pa. 93.

Having made the small bequests to relatives and disposed of the real estate with a gift of the balance of her money to Roland, the testatrix declares that “as stated she (Laura) and Roland are to have the bulk of everything.” The bulk of the estate would go to them only in the event that the testatrix had devised to them the house and lot in fee. Without the real estate or with any lesser interest therein than a fee, they would not take the greater part of the estate. In fact, if the language of the clause is not sufficient to create a gift of the Wolf street real estate, it is equally ineffective to make a gift to Roland of “the balance of all moneys” of the testatrix, and as the residue of the money and the undivided half of the real estate is the only part of the decedent’s estate given to Roland, it follows that he would take nothing under the will. The whole tenor of the will contradicts any such conclusion. Roland was reared by his aunt and regarded as her son, and the will shows that he was the primary object of her bounty. The last injunction in her testament is “Please see that my dear boy is taken care of.” We think it manifest that the testatrix intended to and did give the Wolf street property in fee to Roland and his mother. It follows that they can convey a fee simple title, and that the learned court below was right in entering judgment in favor of the plaintiffs and against the defendant.

The judgment is affirmed.


author: Me. Justice Mosctiziskee,

text:
    Kyner v. Hockersmith, Appellant.

      Wills — Estate tail — Estate in fee simple — Buie in Shelley’s case —Act of April 27, 1855, P. L. 868.

    A devise, by will executed in 1884, to a daughter, of real estate to be held and enjoyed by her during her natural life, “and at her death by the issue of her body, if such there be, forever,” and if she should die without issue, then over, gives to the daughter an estate tail, which under the Act of April 27, 1855, P. L. 368, is converted into an estate in fee simple.
    Argued March 5, 1912.
    Appeal No. 91, Jan. T., 1912, by defendants from judgment of C. P. Franklin Co., Feb. T., 1912, No. 31, for plaintiff on case stated in suit of Clara J. Kyner v. S. B. Hockersmith et al.
    Before Mestrezat, Potter, Elkin, Stewart and Mosoitzisker, JJ.
    Affirmed.
    Case stated to determine marketable title to real estate. Before Gtllan, P. J.
    The court entered judgment for plaintiff in the sum of $11,876.51.

      Error assigned was the judgment of the court.

      Q. T. Mickey, for appellants.
    If there be enough apparent on the face of the will to reflect an intention to use the word “issue” in a less comprehensive sense than heirs or heirs of the body, then the court may declare it equivalent to children or other words of purchase: Robins v. Quinlivin, 79 Pa. 333; Curtis v. Longstreth, 44 Pa. 297; Woelpper’s App., 126 Pa. 562; Nes v. Ramsay, 155 Pa. 628; Leightner v. Leightner, 87 Pa. 144; Hill v. Giles, 201 Pa. 215; Powell v. Board of Domestic Missions, 49 Pa. 46; Nicholson v. Bettle, 57 Pa. 384; Dodson v. Ball, 60 Pa. 492; Hill v. Hill, 74 Pa. 173; Middleswarth v. Blackmore, 74 Pa. 414.

      S. B. Sadler, with him Sharp & Elder, for appellee.
    The word “issue” is primarily a word of limitation, and while the context may show that it is used as a word of purchase, it will not be so construed unless other language of the will requires it to carry out the manifest intention of the testator: Arnold v. Muhlenberg College, 227 Pa. 321; Grimes v. Shirk, 169 Pa. 74; Sheeley v. Neidhammer, 182 Pa. 163; Yarnall’s App., 70 Pa. 335; Williams’s App., 83 Pa. 377; Wistar v. Scott, 105 Pa. 200; Graham v. Abbott, 208 Pa. 68; Kleppner v. Laverty, 70 Pa. 70; Hileman v. Bouslaugh, 13 Pa. 344; Huber’s App., 80 Pa. 348; Carroll v. Burns, 108 Pa. 386; Steacy v. Rice, 27 Pa. 75; Eichelberger v. Barnitz, 9 Watts 447; Cocklin’s App., 111 Pa. 26; Corrin v. Elliott, 23 Pa. Super. Ct. 449; Armstrong v. Michener, 160 Pa. 21; Gast v. Baer, 62 Pa. 35; Ray v. Alexander, 146 Pa. 242; McCullough v. Coal Co., 210 Pa. 222; Wilson v. Heilman, 219 Pa. 237; Hastings v. Engle, 217 Pa. 419; Beilstein v. Beilstein, 194 Pa. 152.
    March 18, 1912:
   Qpinioñ by

Me. Justice Mosctiziskee,

This was a case stated in which the following facts were agreed upon: That James A. Beattie died seized of the farm in question, leaving a will by which he provided, inter alia, as follows: “I give and bequeath to my daughter Clara Jane Beattie the farm belonging to my estate, situated in Southampton township, Franklin county, Penna., containing 120 acres, more or less, to be held and enjoyed by ber after the death of my wife during her natural life, and at her death by the issue of her body, if such there be, forever. In the event of the death of my said daughter without issue, I direct in that event that the said farm given to my said daughter during her natural life be at her death equally divided between my brothers, Robert, William, John, and Henry, or their legal heirs then living, share and share alike;” that Rebecca Beattie, wife of James A. Beattie, died prior to the decease of the testator; that Clara Jane Beattie became intermarried with John Kyner, and that she survived her father and is the plaintiff in the present action; that the farm was sold by the plaintiff to S. B. Hockersmith, the defendant, and she has duly tendered to him a deed in fee-simple for the property; that the defendant has refused to accept the conveyance from the plaintiff or to pay the purchase money, because advised that under the terms of the will of James A. Beattie, she can legally convey but a life interest and cannot transfer the fee. It was stipulated by the parties that, “if the Court be of the opinion that the said Clara Jane Kyner can convey a title in fee-simple to the said land, then judgment to be entered for the plaintiff in the sum of eleven thousand eight hundred and seventy-six dollars and fifty-four ($11,876.54) cents; but if not, then judgment to be entered for the defendant; the costs to follow the judgment; and either party reserving the right to sue out a writ of appeal therein to the Supreme Court. The judgment was entered for the plaintiff and the defendant has appealed.

The opinion filed by the learned court below states, “This will having been executed in 1884, we are not at liberty in construing it to apply the Act of July 9,1897, P. L. 213. We are of opinion that the words, ‘at her death by the issue of her body/ must be taken to mean an indefinite failure of issue, and that the word issue as used in this will is equivalent to heirs of the body and is a word of limitation and not a word of purchase; that under the will of James A. Beattie, as to the land in dispute, there vested in the plaintiff an estate tail, which, under the Act of April 27, 1855, sec. 1, P. L. 368, was converted into an estate in fee-simple;” citing Grimes v. Shirk, 169 Pa. 74; Arnold v. Muhlenberg College, 227 Pa. 321; Walker v. Vincent, 19 Pa. 369; Kleppner v. Laverty, 70 Pa. 70.

None of the cases called to our attention by the appellant controls. Here the remainder was to pass from the first taker to her lineal descendants, and there is nothing in the will which indicates that the word “issue” was used in the sense which the law usually gives to the word “children,” or that this remainder was to be effective only if such issue were living at the time of the death of the first taker; in other words, the will does not show that the testator intended the issue to take as purchasers from' him or that he contemplated a definite rather than an indefinite failure of issue. The applicable rules of construction were recently discussed by our brother Potter in Smith v. Piper, 231 Pa. 378, 381, and are sufficiently covered in the authorities cited by the learned court below. It is only necessary to say that we agree with the construction placed upon the will and conclude that this case was properly determined.

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


author: Mr. Justice Moschzisker,

text:
    Bruch v. Shafer, Appellant.

      Contract — Joint contract — Signature of parties — Failure to sign —Parol evidence.

    Where a joint contract in writing shows on its face that it is to be signed by two persons as parties of the first part, and one person as party of the second part, and one of the parties of the first part refuses to sign after the other two persons had signed, the instrument is ineffective, and all parties are discharged. If in such a ease the party of the first part who had signed the agreement and who paid over money to the party of the second part, brings an action to recover said money, he may show by his own parol testimony that he was induced to advance his own money on the express promise of the defendant that if the written agreement should not become operative by reason of the failure of the other party of the first part to sign it, the money should be refunded. Such a parol agreement is entirely outside and independent of the written agreement.
    Argued March 5, 1912.
    Appeal No. 87, Jan. T., 1912, by defendant from judgment of O. P. Northampton Co., Sept. T., 1908, No. 32, on verdict for plaintiff in case of Grover Bruch v. Howard S. Shafer.
    Before Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Assumpsit for money had and received. Before Scott, P. J.
    The facts appear by the opinion of the Supreme Court, and by the report of Bruch v. Shafer, 15 Pa. Super. Ct. 612.
    Verdict and judgment for plaintiff for $1,577.11. Defendant appealed.

      Error assigned, among others, was in refusing binding instructions for defendant.

      W. S. Kirkpatrick, of Kirkpatrick & Maxwell, with him Robert A. 8totz, for appellant.
    The appellant’s contention that the plaintiff is not entitled, under any evidence in this case, to recover is founded upon two propositions, viz:—
    1. That the contract made verbally at the bottling house was a complete and obligatory contract, binding upon both plaintiff and defendant in all its terms, and not dependent upon the reduction thereof into Whitten form, or that its operation and binding effect was postponed until after the written instrument embodying its terms had been signed by all the parties thereto; that the contract thus made provided for the payment of $1,300 as down money that day and that, therefore, the plaintiff was already bound and obligated to pay this sum to the defendant. (2) Such being the case, the defendant’s subsequent promise (if made) to refund this down money if the brother should fail to sign the written contract was nudum pactum, not being founded upon a consideration, the obligation then already existing to pay the down money at once, and there was no advantage accruing to the defendant for that reason; and no delay, inconvenience or detriment by reason of such payment incurred by the plaintiff: Hodge v. Sublett, 91 Ala. 588 (8 So. Repr. 800); Green v. Cole, 103 Mo. 70 (15 S. W. Repr. 317); Cohn v. Plumer, 88 Wis. 622 (60 N. W. Repr. 1000); Pratt v. Hudson River R. R. Co., 21 N. Y. 305; Blight v. Ashley, 3 Fed. Cas. 699, Case No. 1541; Spayd’s Est. 15 Pa. D. R. 592; Hoke v. Ziegler, 20 York Leg. Rec. 131; Moyer v. Kirby, 2 Pears. 64.

      John G. Johnson, with him Smith, Paff & Laub, for appellee.
    When a joint instrument is drawn to be signed by several, and one fails to sign, all are discharged: Finney v. Finney, 1 Pearson 70; Jersey City Water Commrs. v. Brown, 32 N. J. Law 504; Ambler v. Whipple, 87 U. S. 546; Wharton v. Stoutenburgh, 35 N. J. Eq. 266; Congdon v. Darcy, 46 Vt. 478; Sidney Glass Works v. Barnes, 86 Hun. 374 (33 N. Y. Supp. 508); Brown v. Finney, 53 Pa. 373.

      Shafer was bound to return the money received from Grover Bruch as money had and received in anticipation of a contract which failed to become effective and impossible: Wharton v. Hudson, 3 Rawle 390; Jones v. Mut. Fidelity Co., 123 Fed. Repr. 506; McAvoy v. Title Ins. & Trust Co., 27 Pa. Super. Ct. 271;. Phippen v. Morehouse, 50 Mich. 537 (15 N. W. Repr. 895); Pettibone v. Pettibone, 5 Day (Conn.) 324; Marshall v. Lewark, 117 Ind. 377 (20 N. E. Repr. 253).
    March 18, 1912:
   Opinion by

Mr. Justice Moschzisker,

This record, viewed from the standpoint of the verdict rendered, shows a very simple case which can be summed up as follows: A and B were desirous of jointly acquiring the business of C. B by authority of A entered into negotiations with C, and they finally agreed upon terms to be reduced to a writing, which was to be executed by all the parties as the contract of purchase. The price to be paid for the business was $12,000, “the sum of $1,300 to be paid on the day of the signing” of the agreement. C was desirous of getting immediate possession of the $1,300, and B, for the benefit of C, advanced this sum out of his own funds, upon the distinct understanding and agreement that if A should refuse to sign the written contract the $1,300 would be returned to B. When the writing was sent to A he declined to accept or execute it; C refused to return the $1,300, and thereupon B brought the present suit to recover the same with interest. The verdict was for the plaintiff and the defendant has appealed.

The defendant contended that B had authority from A. to bind him, that the agreement was complete before it was reduced to writing, that the $1,300 was down money paid on the contract, and that any agreement to refund it was nudum pactum for want of consideration and could not be enforced. The issue as to whether or not there was an agreement to return the $1,300 in the event of the written contract not being signed by A, was submitted and found in favor of the plaintiff; and in this connection the jury was told that, if the alleged agreement between B and C was not entered into as a separate and distinct contract apart from the agreement of purchase, there could be no recovery, and their attention was called to the distinction which exists in law between a duly consummated verbal contract with an agreement that it shall be reduced to writing, and an oral agreement to become a perfected contract when reduced to writing. Under the verdict, we must take it that the jury determined that the defendant had entered into a separate agreement with the plaintiff that if he would advance the $1,300 in anticipation of the execution of the written contract, the defendant would agree to return it in the event of the third party declining to sign. Such an agreement, under the circumstances here present, would constitute an independent contract upon a sufficient consideration.

This case was under review on appeal once before (Bruch v. Shafer, 45 Pa. Super. Ct. 612), and the facts are fully set forth in the opinion then written. In refusing a motion for judgment non obstante veredicto, the learned judge who presided over the trial now before us states that the evidence was substantially the same as on the prior trial, and appellant has shown us nothing to the contrary. The law laid down by the Superior Court in the opinion disposing of the former appeal is the law of this case, and a thorough consideration, in the light of the argument so forcibly presented by the distinguished counsel for the appellant, has not convinced us of any error therein, or in the application of the law to the facts as adduced at the present trial.

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


author: Mr. Justice Brown,

text:
    Guarantee Title & Trust Company v. Dilworth Coal Company.

      Corporations — Mortgage—Invalid issue of bonds — Payment for stock and bonds.

    Where a corporation issues $156,000 of bonds and $156,000 of stock in payment for real estate worth only $156,000, and thereafter issues $144,000 of bonds and $144,000 of stock for which bonds and stock it receives only $144,000 in cash, so that for its whole bond and stock issue of $600,000 it has received only $300,000 in property and cash, its whole bond issue may be void in the hands of those who originally received the bonds; and if, on a scire facias on the mortgage given to secure the bonds, it appears that all of the bonds are in the hands of the original holders, the validity of the issue of the bonds is a question that must be submitted to the jury.
    Argued Oct. 9,1911.
    Appeal No. 127, Oct. T., 1911, by J. T. Blair, Trustee in Bankruptcy of Dilworth Coal Company, from judgment of C. P. Greene Co., June T., 1910, No. 40, on verdict for plaintiff in case of Guarantee Title & Trust Company, Trustee, v. Dilworth Coal Company, with notice to Joe Yetter, et al., terre tenants, and J. T. Blair, Trustee, etc.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Reversed.
    Scire facias sur mortgage. Before Inghram, P. J.
    The facts are stated in the opinion of the Supreme Court.
    The court gave binding instructions for plaintiff.
    Verdict and judgment for plaintiff for $338,625. J. T. Blair, Trustee, appealed.

      Error assigned was in giving binding instructions for plaintiff.

      E. K. Seymour, of Seymour, Patterson & Siebeneck,
      with him F. W. Downey, for appellant.
    A corporation may not give away its bonds, even if no creditors exist at the time: Gearhart v. Standard Steel Car Co., 223 Pa. 385; New Castle Northern Ry. Co. v. Simpson, 21 Fed. Repr. 533; In re Wyoming Valley Ice Co., 153 Fed. Repr. 787; Bedford R. R. Co. v. Bowser, 48 Pa. 29; Braddock Elec. Ry. Co. v. Bily, 11 Pa. Super. Ct. 144; Skrainka v. Allen, 7 Mo. App. 434; Thomson-Houston Elec. Co. v. Capitol Elec. Co., 56 Fed. Repr. 849; Baker v. Guarantee Trust & Safe Dep. Co., 31 Atlantic Repr. 174; Shellenberger v. R. R. Co., 212 Pa. 413; Mass. v. R. R. Co., 1 Mona. (Pa.) 497; Pittsburgh & State Line R. R. Co. v. Rothschild, 4 Cent. Repr. 107; Louisville, New Albany & Chicago Ry. Co. v. Banking Co., 174 U. S. 552 (19 Super. Ct. Repr. 817); Morrow v. Iron & Steel Co., 87 Tenn. 262 (10 S. W. Repr. 495); Gunniso Gas & Water Co. v. Whitaker, 91 Fed. Repr. 191.

      Willis F. McCook, with him B. J. Jarrett, Patterson, Sterrett & Acheson and A. F. Silveus, for appellee.
    All cases cited by appellant are based upon facts widely different from the facts here and upon findings that the transactions were fraudulent, hence said cases have no applications to the case at bar.
    Creditors’ right depends upon right of the corporation, and the intervening trustee in bankruptcy has no higher rights than the defendant corporation: Lyons v. Benney, 230 Pa. 117; Gitt v. Ziegler, 181 Fed. Repr. 810; Manhattan Hardware Co. v. Phalen, 128 Pa. 110; Fidelity Ins. Safe Deposit & Trust Co. v. R. R. Co., 138 Pa. 494.
    A corporation can lawfully sell its bonds to its stockholders: Gloninger v. R. R. Co., 139 Pa. 13; Philadelphia Sunbury R. R. Co. v. Lewis, 33 Pa. 33.
    The constitution of the state and the decisions of the court make it lawful to pay for stock and bonds in a corporation by the transfer of property: American Tube & Iron Co. v. Hays, 165 Pa. 489; Shannon v. Stevenson, 173 Pa. 419; Gamble v. Water Co., 123 N. Y. 91 (25 N. E. Repr. 201); American Tube & Hon Co. v. Gas Co., 165 Pa. 489.
    It is a universal doctrine and supported by cases decided in almost every state in the Union that the mere over-valuation of property taken to pay stock subscriptions or given for bonds is not of itself sufficient to successfully assail the transaction. Actual fraud must be averred and shown: Rickerson Roller Mill Co. v. Farrell Fdy. & Mch. Co., 75 Fed. Repr. 554; Whitehill v. Jacobs, 75 Wis. 474 (44 N. W. Repr. 630); Young v. Erie Iron Co., 65 Mich. 111 (31 N. W. Repr. 814); Woolfolk v. January, 131 Mo. 620 (33 S. W. Repr. 432); Bickley v. Schlag, 46 N. J. Eq. 533 (20 Atl. Repr. 250); Coffin v. Ransdell, 110 Ind. 417 (11 N. E. Repr. 20); In re Baglan Hall Colliery Co., Law Reports, 5 Ch. App. 346; Brant v. Ehlen, 59 Md. 1; Troup v. Horbach, 53 Neb. 795 (74 N. W. Repr. 326); Lloyd v. Preston, 146 U. S. 630 (13 Super. Ct. Repr. 131); New Haven Horse Nail Co. v. Linden Springs Co., 142 Mass. 349 (7 N. E. Repr. 773).
    Bonds of a corporation cannot be declared null and void except in a proper proceeding instituted for that purpose and making the bondholders parties. Such bonds cannot be attacked in a proceeding by sci. fa. upon the mortgage where the bondholders have not been made parties and served: Yetter v. R. R. Co., 206 Pa. 485.
    April 8, 1912:
   Opinion by

Mr. Justice Brown,

This proceeding is on a corporation mortgage, instituted in pursuance of a provision in it that, on default in payment of interest on the bonds secured by it, the trustee, upon request of the holders of one-third of the bonds, might proceed by scire facias on the mortgage and prosecute it to judgment, execution and sale of the property. The mortgage was given by the Dilworth Coal Company, which was adjudged a bankrupt after the writ was issued, and J. T. Blair, its trustee, was allowed to intervene for the purpose of making the defense that the bonds were still in the hands of the original owners and had not been paid for. This defense was regarded as unavailing by the learned trial judge, whose direction to the jury was that, if they should find there had been default in the payment of interest for a period of ninety days, and the trustee had been requested, in writing, by the holders of one-third of the bonds to proceed for the collection of the amount due on all of the bonds secured by the mortgage, their verdict should be for the plaintiff. A verdict was accordingly rendered in its favor for $338,125, and from the judgment entered thereon the defendant’s trustee in bankruptcy has appealed.

It is hardly conceivable that the jury, if they had been permitted to do so, would have failed to find that not a single bond issued under the mortgage, in pursuance of the scheme adopted and carried out for the organization of the Dilworth Coal Company, had been paid for either in property or money. The facts as developed seem to clearly show this. In June, 1901, H. P. Dilworth and George M. Dilworth purchased from W. P. Dilworth for $63,622 his half interest in one hundred and thirteen acres of coal land situated in Jefferson township, Greene county. They owned the other half, and the total value of the whole, based upon what was paid for W. P. Dilworth’s half, was $127,244. The purchasers immediately took steps to organize the Dilworth Coal Company. An organization agreement, which has been lost, was signed by them and others, who are the beneficial plaintiffs below. That agreement — its contents having been established by parol testimony — provided that the Dilworths’ coal land should be valued at $156,-000, and for turning it over to the corporation they were to receive $156,000 in stock and $156,000 in first mortgage bonds of the company. The agreement further provided that the capital stock should be $300,000, and that a first mortgage should he placed on the property for $300,000, to secure the $156,000 of bonds which the Dilworths were to get, and $144,000 of bonds which were to be issued to others who were to contribute $144,000 as the balance of the capital stock. Each contributor was to be put on an equality with the Dilworths, and for every $1,000 cash contributed he was to receive $1,000 in stock and $1,000 in bonds secured by the $300,000 mortgage. The sum of $144,000 was contributed by different persons, and each one, for every $1,000 paid by him, received twenty shares of the capital stock of the company, at a par value of $50 per share, and a bond for $1,000. Just what the agreement was as carried out appears from the following taken from the testimony of H. P. Dilworth, one of the witnesses called by the plaintiff: “Q. What were the terms of this contrapt? A. My brother George, and myself put a value of $156,000 on the coal lands we owned, and we were to get $160,000 in bonds or $156,000 rather, and also were to get the same amount of stock of the Dilworth Company. Q. And what else was contributed to the company? A. To anybody else who paid $1,000 they were to get a $1,000 bond and $1,000 par value of the stock for their $1,000 cash. We made an assessment of a' $1,000. Q. This agreement provided for the payment of $144,000 cash— cash to the extent of $144,000, took with it bonds and the same amount of stock? A. Yes, sir. Q. What were the parties contributing that to get? A. They were to get $il,000 worth of bonds which would entitle them to $1,000 in stock, equal amount of bonds, equal amount of stock. Q. For $144,000 in cash they were to receive bonds to the extent of $144,000, and also to the extent of $144,000 in stock, — now who were the parties who came into this agreement originally, — the Dilworth Coal Company? A. Eugene O’Neil, $10,000; Calvin Wells, $20,000; F. E. Richardson, $20,000; Pennock Hart, $10,000; Newton Hemphill, $12,000;- J. H. Lockhart, $10,000; Henry Buhl, $15,000; J. M. Lockhart, $10,000; C. B. McLean, $20,000; G. A. McLean, $10,000; James Black, $4,000 and myself $8,000.” This witness further testified as follows, when cross-examined by counsel for plaintiff: “Q. Mr. Dilworth, how did you pay for your stock? A. I gave my property. Q. Your property was duplicated in value, — that is, for $156,000 worth of property you received $156,000 worth of bonds and $156,000 stock?. A. Yes, sir.”

“No corporation shall issue stock or bonds except for money, labor done, or money or property actually received ;” Const., Art. XYI, Sec. 7. What the organizers of the Dilworth Coal Company did was done in the face of this provision, but the jury were not permitted to pass upon the validity of the bonds issued to the subscribers to the capital stock of the company, even though they were still in the hands of the original holders. The question of the rights of innocent holders does not arise in this controversy, and there is no merit in the contention of the appellee that the validity of the bonds cannot be questioned because the bondholders did not have their day in court. The holders of the bonds who gave the notice to the trustees to proceed on the mortgage were those to whom $107,000 of the bonds had been issued under the agreement giving them $1,000 in stock and $1,000 in a bond for each $1,000 subscribed, and their holdings were unchanged from the time they received them. They cannot, therefore, be said to have been denied their day in court, for they themselves caused this proceeding to be instituted. H. P. Dilworth testified that he was still the owner of the $81,000 of bonds originally issued to him, and had acquired the $78,000 originally issued to his brother George. E. M. O’Neil, who had received $10,000 of the bonds, was represented on the trial by his general agent, who testified that he still held the bonds. It thus appeared that original holders of $276,000 of the bonds had notice of this proceeding. Of the remaining bonds it was testified that C. B. McLean was still the owner of the $20,000 of bonds originally issued to him, and an unchallenged statement of counsel for appellant is that James Black, an original subscriber to $4,000 of the bonds, which he still held, was present at the trial. All the original holders of the bonds with the possible exception of C. B. McLean, seem to have had notice of this proceeding, and there was ample evidence to justify the jury in finding that the entire issue was void.

If it had affirmatively appeared that cash or property to the value of $600,000 had actually been turned over to the coal company, a different situation would be presented; but, from what appeared on the trial, the conclusion seems to be unavoidable that all the company got was property and money amounting in value to but $300,000, and that all the parties to the scheme of organization understood this. Of a situation very similar to the one before us Mr. Justice Lurton, now of the Supreme Court of the United States, aptly said: “Whether this ‘basis of organization’ be construed to be a contract whereby each subscriber to the stock was to be given a bond as a bonus, or each subscriber to the bonds was to be given paid up stock as a bonus, or as an agreement by which each contributor to the capital stock was to receive the obligation of the company, secured by a primary mortgage, that he should be repaid the amount of his subscription, with interest, such an agreement would clearly be illegal and ineffective as to existing or subsequent creditors of the corporation, upon the ground that the payment for the stock was unreal and simulated, or that the bond had been issued upon no consideration: 2 Morawetz, Priv. Corp. § 824; Sawyer v. Hoag, 84 U. S. (17 Wall.) 610; Scovill v. Thayer, 105 U. S. 143. * * * It was an arrangement whereby the franchise was to be secured, and at the same time deprive the public of the security which by law they are entitled to have, and upon which the grant of the franchise depends. Whatever the real motive and purpose of the promoters of this arrangement may have been, its legal effect, if valid, would have been to throw all the risks and hazards of the business upon the public who should deal with it; while the contributors were to reap all possible gains, and should be secured against loss in the event the enterprise prove unprofitable. Is a contract by which a corporation agrees to repay to the contributors of its capital stock their several contributions, and whereby such contributions are converted into corporate debts, valid even as against the corporation? Upon what consideration does such an agreement rest? And what power has a corporation to bind itself by such a contract?”: Morrow v. Nashville Iron, Steel & Charcoal Co., 3 L. R. A. 37.

The validity of the bonds issued by the Dilworth Coal Company was clearly for the jury.

All of the assignments of error are sustained and the judgment is reversed with a venire facias de novo.


author: Ms. Justice Stewart,

text:
    Lovell v. Women’s Pennsylvania Society for the Prevention of Cruelty to Animals, Appellant.

      Corporations — By-laws—Officers■—Legislative charter.

    A corporation organized under a legislative charter and having as its object a purpose in which the public alone was interested was given by its charter power to make by-laws “for electing its officers and members, and for the general regulation and management of its affairs.” The charter also provided that the incorporators should meet and “elect a president, ten vice presidents, a recording secretary, a corresponding secretary, and t'wenty-four persons who shall form a board of managers; all of these officers shall constitute an executive committee, and in them shall be vested the control and management of the affairs of the said corporation, and the executive committee may appoint such other officers as may be necessary for the transaction of the business of the society.” The corporation adopted a by-law which provided thaf “the business of the society shall be administered by a president, ten vice presidents to represent the city of Philadelphia, and one, or as many more as may be considered desirable, for each county in the state.” The by-law further provided for the election of the other officers prescribed by the charter, and concluded with the words “who together shall constitute an executive committee.” After the adoption of the by-laws the corporation increased the number of its vice presidents from ten to twenty-two, twelve of these representing different counties in the state. Held, (1) that all of the vice presidents thus increased in number were members of the executive committee and entitled to vote at its meetings; (2) that the provision in the charter giving the executive committee power to appoint other officers than those enumerated in the charter was sufficient to sustain the by-law and to authorize an increase in the number of vice presidents; (3) that there was no intent shown by the legislature to make a distinction among the vice presidents, and that therefore they were all entitled to act as members of the executive committee.
    Argued Jan. 12,1912.
    Appeal, No. 307, Jan. T., 1911, by defendant, from order of C. P. No. 3, Phila. Co., March T., 1911, No. 4610, awarding writ of mandamus in case of Mrs. George S. Lovell et al. v. Women’s Pennsylvania Society for the Prevention of Cruelty to Animals, a Pennsylvania Corporation, and Caroline Earle White, President, and Elisabeth A. Somers, Recording Secretary, of said Corporation.
    Before Fell, C. J., Briown, Mestrezat, Stewart and Moschzisker, JJ.
    Reversed.
    Petition for mandamus.
    On plaintiff’s petition an alternative writ of mandamus was issued requiring the defendants to show cause why they should not reconvene the executive committee of the defendant corporation and why the president should not declare a certain resolution to have failed of passage.
    The petition for the writ alleged that the resolution had been carried by the votes of three vice-presidents who were not legally members of the executive committee because the act of incorporation prescribed ten vice presidents, whereas the executive committee was composed inter alia of ten vice-presidents for Philadelphia and a number of vice-presidents from other counties among whom were the three above-mentioned. The answer denied that the act of incorporation limited the number of vice-presidents to ten; averred that the corporation had by its by-laws provided for more than ten; that for thirty years and upwards executive committees had been elected composed, inter alia, of more than ten vice-presidents and that the objection to the votes of the three vice-presidents had not been made until after the result of the vote had been announced.
    Plaintiffs demurred.
    The court below sustained the demurrer and awarded a peremptory mandamus. Defendants appealed.

      Error assigned was in awarding writ of mandamus.

      John G. Johnson, with him Joseph H. Taulane, for appellants.
    It is submitted that the code of by-laws, which for forty years has been the rule of government of the corporation was not in contravention of its charter, but was made by virtue of a power given by that charter, and that therefore the executive committee which was elected in accordance with that code, was legally elected and its members duly qualified.

      Edwin O. Lewis, for appellees.
    A by-law which conflicts with the charter is invalid: Thayer v. Thompson, 220 Pa. 241; Curry v. Cemetery Association, 5 Pa. Super. Ct. 289; Diligent Fire Co. v. Com., 75 Pa. 291.
    April 8, 1912:
   Opinion by

Ms. Justice Stewart,

Corporation by-laws are simply prescribed rules for the government of the body, and the right to make them is incident to every corporation. The charter may be absolutely silent with respect to by-laws, nevertheless the right in the corporation to ordain them for the regulation of its own affairs, provided always that they offend against no law, is quite as unquestionable as though the subject of an expressed grant. The right of course may be abridged and qualified in its exercise by the charter; and this occurs where the charter expressly Avithholds the right to regulate by means of by-laws certain matters in connection with the business of the corporation which otherwise the corporation would have a right to regulate for itself; or, it can occur when the charter expressly indicates and enumerates the matters and things which may be regulated through by-laws. In the latter case, by judicial construction, resting on the principle of expressio unius exclusio est alterius, what is not expressly given is excluded from the grant. In the case Ave have to consider the grant is in these words: “Section 5. The said Society, for fixing the terms of admission of its members, for the government of the same, for electing its officers and members, and for the general regulation and management of its affairs, shall have poAver to form a code of by-laws, not inconsistent with the laws of this State, or of the United States; Avhich code, when formed and adopted, at a regular meeting, shall, until modified or rescinded, be equally as binding as this act upon the society, its officers and members.” Clearly this grant withholds nothing either by express terms or by implication. A more extensive or comprehensive grant of power with respect to the making of by-laws could not well be constructed. The particular by-law adopted by the society, Avhich is here challenged on the ground that it is ultra vires, reads as follows: “The business of the Society shall be administered by a President, ten Vice-Presidents, to represent the City of Philadelphia, and one, or as many more as may be considered desirable, for each county in the State; a Treasurer, a Recording Secretary, a Corresponding Secretary and twenty-four Managers, who together shall constitute an Executive Committee. Said Committee shall have power to fill vacancies in its own body.” If there be any inconsistency between this bylaw and the charter, it is manifest that the point of conflict must be looked for elsewhere than in the fifth section above quoted, for its inclusion within the term of the power given in that section is too obvious for dispute. It is quite certain that we will find nowhere any express abridgement of the power there given. And so our attention is directed to the third section of the charter, which reads as follows: “Section 3. It shall be the duty of the corporators whose names are mentioned in the first section of this act, or any five of them after notice published in a newspaper printed in the city of Philadelphia, to meet together, and to elect a president, ten vice-presidents, a recording secretary, a corresponding secretary, a treasurer, and twenty-four persons, who shall form a Board of Managers; all these officers shall constitute an Executive Committee, and in them shall be vested the control and management of the affairs of the said corporation; and the Executive Committee may appoint such other officers as may be necessary for the transaction of the business of the society.” The section next following provides for the election of officers for said society, and the qualifications of those who are to be allowed to vote. In order that the real question in the case may appear, a brief statement of the facts is here necessary. Acting under the authority given in the last clause of section 5, the corporation increased the number of its vice-presidents from ten to twenty-two, twelve of these representing different counties in the state. The title of these additional vice-presidents to their office, as vice-presidents, is not disputed; but they were allowed membership in the executive committee ex officio; and here is the point of controversy. Several of them at a meeting of the executive committee participated in a vote upon a certain resolution affecting a policy of the society, with the result that the affirmative side of the resolution prevailed because of their votes. These votes were challenged on the ground that the charter had limited the membership of the committee, and it was beyond the power of the society to increase it; that while the persons whose votes were challenged were vice-presidents, they were not members of the committee. The challenge not having been sustained, this mandamus proceeding was resorted to with a view of having new action upon the resolution, to be particpated in by no more than ten of the whole number of vice-presidents. Upon final hearing the court awarded a peremptory mandamus requiring the corporation to reconvene the executive committee, and compel the president to declare that the resolution had failed of passage. The appeal is from that decree. The question thus presented for our determination is a very narrow one, and turns upon the legislative purpose in connection with section 3 of the charter. The plaintiffs in the bill insist that “although the author of the incorporating statute may have been somewhat unfortunate in framing section 3,” nevertheless, an intent to prescribe a complete and permanent system of government by an executive committee composed of those holding the particular offices of the society designated in the charter, and in addition a fixed and certain number of those not otherwise in office, each class to be limited in number as there indicated, may be fairly inferred; and it is urged in support of this contention, that to give any other meaning to the section “would be to extend and enlarge the powers of the society beyond those possessed by other corporations, both under special and general corporation laws of the commonwealth, in that it could vary at will the membership of its governing body or board of directors.” Conceding that a construction such as is here contended for, would not offend against the strict letter of the charter, the argument advanced in its support is not convincing that it is the better or more natural one; certainly, it is by no means an obvious one. Inasmuch as we are here dealing with a special act of incorporation, it is of no consequence that under our general incorporation laws the directorate of every corporation is limited in its membership. It is not to be questioned that under its general power the legislature, when it passed the act under consideration, could have committed to the corporation the power of determining in its by-laws how many should compose its body of managers without any restriction whatever, and we have no reason to think that in doing so it would have entrusted any unusual or extraordinary power to the corporation. Any discussion of the question before us must start with the fact, that by section 5 of the charter the unqualified and unrestricted right is given the corporation to make by-laws for the general regulation and management of its affairs. That this, standing by itself, would allow the corporation to determine how many should constitute its board of managers, is manifest. It requires no strained construction of the earlier section, No. 3, to allow this grant of power to operate to the fullest extent, but simply that construction which to our mind is the more reasonable of the two suggested. The view taken by appellants would limit section 3 in its operation to the primary organization of the society, leaving such organization to be thereafter changed in its details by the society itself. We think this view quite as extreme as that asserted by the appellees. The charter clearly contemplates a permanent management of the society through an executive committee composed in a certain way. The manner of the composition of the committee is clearly indicated, the classes entitled to representation therein, official and unofficial, are clearly indicated as well; and while there is no express limitation upon its number as a whole body, yet the number of unofficial representatives is expressly indicated, and those entitled to membership virtute officii are ascertainable from preceding enumeration. Were there nothing else in section 3, we would feel compelled to accept the section as abridging the right of the society through its by-laws to increase the membership of the committee beyond the number indicated. The act expressly refers to the persons composing the committee as officers of the society. The language is “all these (those previously enumerated) officers shall constitute an executive committee, and in them shall be vested the control and management of the said corporation, and the executive committee may appoint such other officers as may be necessary for the transaction of the business of the society.” It is conceded that under this provision it is entirely competent for the society to elect other officers than those specifically referred to in the preceding clause, and that it may elect vice-presidents in excess of the number mentioned; but it is contended that no more than ten of those elected may be members of the executive committee. It is quite evident we think that in providing for ten vice-presidents of the society, it was no part of the purpose to thereby limit the number composing the executive committee, no more than it was in providing for one recording secretary and one corresponding secretary. These offices were created as essential to the successful conduct of the corporation, and the persons holding them were, virtute officii, to become members of the executive committee. It is not reasonable to suppose — the right to elect more than ten vice-presidents being conceded — that the legisture intended a distinction between the functions and powers of persons holding the same office. We think the better view is that what was contemplated was, that the entire official body, however extended, was to become an integral part of the directing and controlling body. This view is strengthened by the fact that those on the committee are designated officers, and power is expressly given to elect other officers than those specifically named. An increase in the number of vice-presidents being permissible under the charter, had the legislative purpose been to allow but ten to act on the executive committee, it is only reasonable to suppose that section 3 would have contained an express restriction, and that it would have made some provision indicating how the ten were to be selected out of the greater number. We see no reason to suppose that the legislature intended a distinction between the vice-presidents of the society; that some should be members of the executive committee and some not; that no more than ten out of the whole number should ever have a voice in determining what should be the governing rules of a society which not only had for its field the entire state, but which could only efficiently act throughout the state by admitting into its councils residents of the several counties in the state capable of rendering work in their respective districts. Any such construction would be so manifestly prejudicial to the efficiency of the corporation, and confine its beneficent work within narrower limits than were ever intended, that except as it is too obvious to admit of any other, it should be rejected; particularly so, when it is sought to derive from such construction an implied restriction and qualification upon a right given elsewhere in the charter, which, if allowed to operate according to its letter, would make such construction impossible. It is to be remembered that we are here not dealing with a charter containing private grants to individuals of power and privileges to be exercised for their own advantage, and therefore to be construed strictly against the grantee, but with a charter which has as its object the attainment of ends in which the public at large alone are interested. Charters of the latter character are to be construed liberally and beneficially for the purpose for which they were granted. If by this charter it was intended that the vice-presidents were to be members of the executive committee virtute officii, as we think it certainly was, it follows that, if rightfully holding and exercising that office, the persons whose votes were challenged were duly qualified as members of the committee, and that their votes were properly received and counted. This construction removes all apparent inconsistency between the several parts of the charter, allows each to operate according to its own terms, and gives, as we believe, a fair construction of the legislative intent. This being our conclusion of the charter privileges of the corporation, it is unnecessary to consider the other point urged upon our consideration in the appeal.

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