author: Mr. Justice Brown,

text:
    Daley v. Iselin, Appellant.

      Principal and agent — Vendor and vendee — Estoppel—Contract.
    Where a principal authorizes his agent orally to purchase land, and the agent' enters into a written agreement to purchase the land, and also in addition to the land, two options, and the principal without any knowledge of the written agreement, or of the options mentioned in it, accepts a deed for the land, and pays the purchase money therefor, he cannot be held liable for the price of the options. In such a case the acceptance of the deed and payment of the purchase money do not estop the principal from repudiating the agreement made by the agent without his knowledge or authority.
    Where the relation of principal and agent exists,before an unauthorized act of the agent can be said to be ratified by the principal, he must have full knowledge of all the material facts and circumstances attending the act; no different rule is to be applied when one is to be estopped.
    Argued April 22,1907.
    Appeal, No. 283, Jau. T., 1906, by defendants, from judgment of C. P. Clearfield Co., Sept. T., 1889, No. 320, on verdict for plaintiff in case of James J. Daley and H. A. Daley v. Adrian Iselin et al., Executors of Adrian. Iselin, deceased.
    Before Fell, Brown, Potter, Elkin and Stewart, JJ.
    Reversed.
    Assumpsit on a contract in writing. Before Smith, P. J.
    The facts are stated in the opinion of the Supreme Court.
    Yerdict and judgment for plaintiff for $4,882.89. Defendant appealed.

      Error assigned among others was in discharging rule for judgment for defendant non obstante veredicto.

      A. L. Cole and B. M. Ciarle, for appellants.
    A ratification presupposes knowledge of the act to be ratified : Zoebisch v. Rauch, 133 Pa. 532; Pittsburg, etc., R. R. Co. v. Gazzam, 32 Pa. 340; Moore v. Patterson, 28 Pa. 505; Hays v. Hays, 179 Pa. 277; Sensinger v. Boyer, 153 Pa. 628.

      Franh Fielding and Oscar Mitchell, with them W. C. Pentz, for appellees.
    Where one adopts a contract, entered into without his authority, he must adopt it altogether. He cannot ratify the beneficial part and reject the remainder : Mundorff v. Wickersham, 63 Pa. 87; McClintock v. South Penn Oil Co., 146 Pa. 144.
    June 3, 1907:
   Opinion by

Mr. Justice Brown,

Adrian Iselin, of the city of New York, verbally authorized Lucius W. Robinson, a resident of Punxsutawney, Jefferson county, this state, to purchase for him from James J. and H. A. Daley a farm of ninety-six acres situated in Sandy township, Clearfield county. On December 22, 1898, Robinson entered into a written agreement with the owners of the land to purchase it for $20,00.0. It was signed “ Adrian Iselin, per Lucius W. Robinson.” When the deed was ready for delivery Iselin accepted it and paid the purchase money. He had never authorized Robinson, verbally or otherwise, to sign his name to the agreement, and did not know of its existence when he accepted the deed and paid for the property. This clearly appears from the evidence, and the court below correctly instructed the jury that Robinson had no authority of any kind, verbal or written, to execute the agreement. After Iselin had accepted the deed and paid for the property he learned for the first time that the contract executed by Robinson included an agreement to purchase certain options from J. J. Daley and one from H. A. Daley. This suit, brought by the Daleys jointly, is for the recovery of what they allege is due them for their options. Iselin declined to take the options for the reason that he had never given any authority to Robinson to purchase them, and knew nothing about the agreement he had made. A verdict was directed for the plaintiffs upon which judgment was subsequently entered. In the opinion refusing judgment for the defendant non obstante veredicto the court held that there was no proof of Robinson’s agency, none of Iselin’s ratification of the unauthorized act, and that, as Iselin accepted the deed in utter ignorance of the contract, his acceptance of the same could not be regarded as ratification of what Robinson had done. The right to recover was put upon the distinct ground that Iselin, having verbally authorized Robinson to purchase the farm for him, and having accepted the deed for it, was estopped from repudiating Robinson’s act in including the options in the agreement of December 22, 1898. The view of the trial judge, as expressed in his own words, is : “ He was estopped from repudiating the act of his agent in including that which he did not want, after he had accepted the benefit of his agent’s act in getting what he did want, when both the subjects of contract were in the same agreement.”

If at the time he accepted the deed for the farm and paid for it Iselin knew what Robinson had done, and that the plaintiffs had sold him the property in pursuance of the written agreement, the view entertained by the court below would be correct, but, under the undisputed facts, it must be regarded as error. Iselin undoubtedly accepted the deed under the assumption that Robinson had made the purchase for him in pursuance of his verbal instructions to do so. Of the written agreement which the plaintiffs would enforce he knew absolutely nothing. When it was entered into they made no inquiry as to Robinson’s authority to execute it, and they delivered the deed to Iselin without informing him that they did so under a written contract which included the options. They dealt with one unauthorized to act as he did for Iselin, and they cannot now ask that the latter be bound by all he did simply because the deed for the farm was accepted. Its acceptance was in utter ignorance of Robinson’s written agreement. Even if he had known that Robinson had made it for the purchase of the farm there was no reason why he should have thought it included anything else. The rule which the trial judge applied has no place in this controversy. As just stated, he was of opinion that Iselin’s acceptance of the deed could not be regarded as a ratification of Robinson’s contract, because he did not know it included the options. This was correct, for where the relation of principal and agent exists, before an unauthorized act of the agent can be said to be ratified by the principal, he must have full knowledge of all the material facts and circumstances attending the act: Pittsburg & Steubenville R. R. Co. v. Gazzam, 32 Pa. 340; Mechera on Agency, sec. 148. No different rule is tobe applied when one is to be estopped. One of the weightiest elements in estoppel is knowledge of his rights by him who is to be estopped : Hays v. Hays, 179 Pa. 277.

The other questions raised by the appellant need not be considered. The judgment for the plaintiffs is reversed and the record remitted, with direction that judgment be entered for the defendant non obstante veredicto.


source: Caselaw Access Project

author: Mr. Justice Potter,

license: Public Domain

text:
    American Car & Foundry Company v. Altoona & Beech Creek Railroad Company, Appellant.

      Bailment — Sale—Contract—Lease of cars.

    An instrument in writing leasing a number of passenger cars for use on a railway at a stated rental per month with privilege to the lessee to purchase the cars, constitutes a bailment, and not a sale.

      Appeals — Record—Testimony.
    A loose paper not attached to, and not in any way identifying the stenographer’s report of the testimony, and not filed in the office of the prothonotary of the court below until after the record and the stenographer’s report of the testimony have been removed to the appellate court is not a compliance with the rule of court.

      Appeals — Assignments of error — Evidence.
    An assignment of error to the admission of a writing, which contains no reference to the page of the paper-book where the writing may be found printed, violates rule 31.
    Assignments of error to the rejection of papers are defective if the assignments do not contain a copy of the writing rejected.
    Argued April 23,1907.
    Appeal, No. 108, Jan. T., 1907, by defendant, from judgment of C. P. Blair Co., March T., 1903, No. 54, on verdict for plaintiff in case of American Car & Foundry Company v. Altoona & Beech Creek Railroad Company.
    Before Fell, Brown, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Replevin for six passenger cars. Before Kooser, P. J., specially presiding.
    The facts are stated in the opinion of the Supreme Court.

      Errors assigned were various rulings on evidence and instructions.

      Worn. 8. Hammond, for appellant.

      J. 8. Eeisenring, with him Werner de Drake, for appellee.
    June 4, 1907:
   Opinion by

Mr. Justice Potter,

The record in this case, as presented to us, is teeming with irregularities. There is no bill of exceptions, and the testimony is not certified by the judge of the court below, but has the certificate only of the official stenographer. The charge was not included even in that. In the paper-book of appellant, following the assignments of error, a certificate is printed, which is signed by the judge of the court below, which is in the form prescribed by rule 22. But this does not appear to be attached to either the testimony or the charge, or to form any part of the record. It is not noted in the docket entries, and purports to have been filed on a date subsequent to the appeal and removal of the record to this court. A loose paper not attached to, and not in any way identifying the stenographer’s report of the testimony, and not filed in the office of the prothonotary of the court below until after the record and the stenographer’s report of the testimony have been removed to the appellate court, is not a compliance with the rule: Harris v. Traction Co., 180 Pa. 184; Pool v. White, 171 Pa. 500.

The first assignment violates rule 31, for the reason that the error assigned is to the admission in evidence of a writing, and it contains no reference to the page of the paper-book where that writing may be found printed. It does refer to the page where the testimony of a witness called to prove the contract appears, but the contract itself is printed elsewhere, and that reference is not given.

The second, third, seventh, eighth, ninth, tenth, eleventh, twelfth, thirteenth and fourteenth assignments, which assign for error the rejection of certain papers and records offered in evidence by appellant, are also defective, for the reason that none of them contains a copy of the writing rejected: Hallock v. Lebanon, 215 Pa. 1. In one instance the writing rejected is not even printed in the paper-book ; in several, only a part of the record offered is printed, and in no instance is any reference made in printing the assignments to the page where the rejected writing may be found. The pages referred to are where the offers were made and ruled upon, but the documents or records offered are not set out there.

If we waive the informalities and look at the merits, it appears that during the year 1900 an order was given by the United Collieries Company, a New Jersey corporation of which Samuel P. Langdon was president, to the Jackson & Sharp Company of Wilmington, Delaware, for six cars which were partly built when, on May 8, 1901, the plant of the Jackson & Sharp Company passed into the hands of the American Oar & Foundry Company, by whom it was thereafter owned and operated. The cars ordered by the United Colleries Company were completed after the transfer to the latter company. The agreement had been that they were to be paid for in cash upon delivery at Wilmington, but the purchaser was unable to pay cash, and the manager of the American Car and Foundry Company refused to give possession of them until the cash was paid. Thereupon a new contract was entered into, put in writing and executed by the parties, being the contract of June 12, 1901, by which the cars were leased to the United Collieries Company, with the privilege of purchasing them. The court below construed this contract as constituting a bailment, the title to the cars remaining in the bailor. The cars were shipped by the American Car & Foundry Company to F. Gr. Patterson at Altoona, and delivered to him on June 16, 1901. Patterson was vice president and general manager of the Pittsburg, Johnstown, Ebensburg & Eastern Railroad Company, and of the Altoona & Beech Creek Terminal Railroad Company, which companies were lessees of the defendant company’s railroad and property. One of the plaintiffs’ employees testified that the cars were shipped on June 13, 1901, to the United Collieries Company at Altoona. The shipping receipts, which were in evidence, appear to have been lost by the jury, and are therefore not printed in the appendix. But an affidavit of counsel shows that the cars were shipped to the order of the American Car & Foundry Company, and were marked, “ Notify F. G. Patterson.”

When the cars left the shops at Wilmington there was painted upon the upper outside deck “ Altoona & Beech Creek Terminal ” or “ Altoona & Beech Creek Terminal R. R. Co.,” and the same lettering was upon them when they were replevied. There were also upon the cars, when delivered, name plates, one on each side, which were lettered, “American Car & Foundry Company, owner:” “United Collieries Company, lessee.” When the cars were returned, they did not have the name plates on, but they showed the marks where the plates had been, and the holes.

On December 27, 1901, acting under a writ of assistance issued by the court of common pleas, the sheriff of Blair county dispossessed the lessees of the railroad, rolling stock and other property covered by the lease, and put the defendant in this case, who was the lessor, into possession of the same. An appeal from the order awarding the writ of assistance was taken to this court, and on May 19, 1902, the order was affirmed: Pittsburg, etc., R. R. Co. v. Altoona, etc., E. E. Co., 203 Pa. 108. Among the cars found by the sheriff upon the railroad, and turned over by him to the lessor, were the six here in question. The uncontradicted testimony showed that no part of the three notes given by the United Collieries Company to the appellee, was ever paid, and that the option to purchase the cars was not exercised. Appellee, therefore, claimed to be the owner of the cars, and upon appellant refusing to surrender them, brought this action of replevin for their recovery. Upon the trial of the case, the court below held that the only question at issue was the title to the cars, and instructed the jury that the written contract was one of bailment, and not of sale, so that by its terms the title remained in the plaintiff; but he submitted to them the question whether the written agreement contained the real contract of the parties, or the transaction was actually a sale. The amount of damages, if any, to be awarded for detention of the cars, was also submitted to them. The jury found a verdict for the plaintiff, and also awarded $2,432.50 as damages for the detention of the cars. Judgment was entered on the verdict, and defendant appealed.

The defendant alleged that the actual transaction was a sale and purchase of the cars, not by the United Collieries Company, but by Samuel P. Langdon, the Pittsburg, Johnstown, Ebensburg & Eastern Eailroad Company, and the Altoona and Beech Creek Terminal Eailroad Company, who were lessees of the railroad, rolling stock and other property of the defendant company, and that the contract of bailment was ultra vires, so far as the United Collieries Company was concerned; and offered evidence for the purpose of showing fraudulent conduct on the part of Langdon, the United Collieries Company, and the two railroad companies towards the defendant company. There was no offer to show that the plaintiff participated in the alleged fraud.

The court below excluded all testimony, except such as bore directly upon the question whether the transaction with plaintiff was a bailment, as purported by the written agreement, or actually a sale, holding that the offer of defendant to show the other alleged matters of defense was irrelevant. ¥e think that the trial judge was entirely justified in thus confining the issue. Similar contracts have been regarded as bailments, and not as sales, or conditional sales, in many cases. It was so in Stiles v. Seaton, 200 Pa. 114, which was a contract for machinery. In Lippincott v. Scott, 198 Pa. 283, which was for a soda water fountain. In Crist v. Kleber, 79 Pa. 290, which was for a piano. In these cases, on failure to perform his part of the agreement by the bailee, it was held that the proper remedy was for the bailor to take possession of the subject of the contract by the process of replevin. In the case last mentioned, Crist v. Kleber, 79 Pa. 290, we said (p. 292): “ Possession under a mere bailment for hire is not a constructive fraud: otherwise much of the business of men would be ended, and the poorer the bailee the less would be his ability to hire the use of property néedful to him.”

Whether the United Collieries Company had or had not power to enter into the contract, could have no effect upon the title of the appellee to its cars. Nor does it appear that appellant was injured in any way by the leasing of the cars. It did not purchase them from the lessees, or spend any money upon account of them. It merely received them from the sheriff along with other property included in the lease. Whatever wrong or injury the appellant may have suffered at the hands of the lessees, and the parties in control of them, can in no way be charged against the appellee in this case. The lease of the cars into which it entered was an entirely independent transaction, not involved in any way with the relations existing between the appellant and the lessees of its railroad and other properties.

The judgment of the court below is affirmed.


author: Per Curiam,

text:
    Kurtz, Appellant, v. Campbell.

      Building and loan associations — Dues—Credits on bonds and mortgage.

    A borrower from a building and loan association has the right to elect to treat all past and future payments of dues on the stock as credits on the bond and mortgage, and to direct the officers of the association so to appropriate and credit the same. In such a case it is immaterial that the appropriation was made in the assignment of the stock rather than on the bond and mortgage, when the assignment of the stock was concurrent with the delivery of the bond and mortgage, and the whole constituted one transaction. The insolvency of the association does not affect an appropriation made prior thereto.
    Argued April 23, 1907.
    Reargued May 20, 1907.
    Appeal, No. 17, Oct. T., 1907, by plaintiffs, from judgment ,of Superior Court, April T., 1906, affirming judgment of C. P. Jefferson Co., Aug. T., 1904, No. 87, on case tried by the court without a jury in suit of T. M. Kurtz, S. Keltonik and G-. L. Glenn, Assignees of the Punxsutawney Mutual Building & Loan Association, v. Ira J. Campbell, S. K. Livingood and Rebecca M, Livingood, his wife.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed
    Appeal from Superior Court. See 31 Pa. Superior Court, 516.
    The opinion of the Superior Court, Henderson," J., was as follows :
    At the time when the defendants executed their bond and mortgage to the building and loan association they also assigned their stock in the association as collateral security for the payment of the debt. Attached to this assignment was an election to treat all past and future payments of dues on the stock as credits on the bond and mortgage, and a direction to the officers of the association to so appropriate and credit the same.
    The right of a borrower from a building and loan association to make s,uch election has been recognized in many cases, beginning with North American Building Association v. Sutton, 35 Pa. 463. In Spring Garden Association v. Tradesmen’s Loan Association, 46 Pa. 493, the right of a mortgagor to apply his payments on the stock to the mortgage debt was distinctly declared, the license to make such application being implied in the nature of building association loans. It was there stated, however, that an act of appropriation by one of the parties is necessary in order to effect an application of the. stock payments to the loan. Such-is also the doctrine of Economy Building Association v. Hungerbuehler, 93 Pa. 258.
    In Hemperley v. Tyson et al., 170 Pa. 385, the right to a lien on shares of stock of a building and loan association, by an attaching creditor, was denied for the reason that the owner of the stock had elected to apply her stock payments on her bond and mortgage for money borrowed, and the court said with reference thereto: “ This election shows that it was her purpose to make the stock fund primarily liable for the loan, and the acceptance by the association of the assignment, subject to the election, involved an agreement on its part to so regard it.”
    The cases relating to the question are reviewed in York Trust, etc., Co. v. Gallatin, 186 Pa. 150, in which the right of appropriation is reaffirmed. In the course of his opinion Chief Justice Steerett says : “Bearing in mind these principles in which all the cases substantially agree, it clearly follows that where the appropriation is made at the inception of the contract of loan, it cannot thereafter be successfully questioned.” A convincing opinion by Judge Porter in Erthal v. Glueck, 10 Pa. Superior Ct. 402, discusses the same subject and reaches the same conclusion.
    The case of Freemansburg B. & L. Association v. Watts, 199 Pa. 221, is not in conflict with the cases cited. . There was no express appropriation of payments in that case before the insolvency of the company, nor any notice given that payments were to be applied in a particular manner. The obligor’s right of appropriation is recognized, however.
    We do not deem it a controlling fact that the appropriation is made in the assignment of the stock rather than on the bond or mortgage. The assignment of the stock was concurrent with the delivery of the bond and mortgage, and its acceptance by the association made it a part of the contract under which the loan was effected. No objection was made to the appropriation by the borrower, and as it was made when the loan was obtained and the association was solvent, it cannot now be avoided. The insolvency of the company does not affect an appropriation made prior thereto : Strohen v. Franklin Saving Fund & Loan Association, 115 Pa. 273; Tork Trust, etc., Co. v. Gallatin, 186 Pa. 150.
    The condition in the bond for the payment of monthly dues on the stock does not distinguish th,e case from that of York Trust, etc., Co. v. Gallatin. The right of appropriation is not controlled by the condition of the bond, but arises out of the obligor’s control of the fund at the time of payment.
    Our attention has been called to Globe Mutual B. & L. Association v. Schutte, 29 Pa. Superior Ct. 265, as an authority in support of the appellant’s position. The controlling fact in that case was, however, that the conduct of the association and the borrower showed that, nowithstanding the election to apply the payments, they were not so applied by the parties. The payments were credited on the books of the association, and also on the pass book of the debtor, as payments upon account of dues and premiums, and the debtor was credited on his stock with the profit accruing to his shares. The pass book of the debtor in the stockholder’s possession, showed weekly credits and also profits realized on his stock, and his conduct in permitting payments to be so appropriated and credited, and in receiving his dividend, was deemed to be a ratification of the appropriation of his payments made by the association, and notice to him that the association did not recognize his election. It was not intended to be a decision that a right of election did not exist.
    In view of- the foregoing authorities, and in the light of the facts found by the trial judge, the appellees were entitled to the defense set up.
    The judgment is affirmed.

      Error assigned was the judgment of the Superior Court.

      W. W. Winslow, with him J. L. Fisher, O. Z. Gordon and W. M. Gillespie, for appellants.

      A. T. Oole, with him Jeff. G. Wingert, for appellees.

      June 3, 1907:
   Per Curiam,

This case is clearly within the rule of York Trust, etc., Co. v. Gallatin, 186 Pa. 150. The majority of the court are of opinion, that on principle that case was erroneously decided, but as it has stood in the books for nine years, and many contracts have been made in reliance on it, the principle of stare decisis should prevail, and the authority of that decision should not now be disturbed.

Judgment affirmed.


author: Mr. Justice Stewart,

text:
    Matteson v. New York Central & Hudson River Railroad Company, Appellant.

      Railroads — Damages to land — Trespass—Evidence—Opinion of witness — Cross-examination.
    Where in an action against a railroad company to recover damages for the flooding of land by reason of the construction of a bridge, a witness for the plaintiff has testified as to the flooding, and the size and extent of the gullies and depressions which had resulted, may be asked on cross-examination whether the land before the building of the bridge had not been subject to overflow, and whether at that time there were not depressions on it and ponds four or five feet deep.

      Principal and agent — Declarations—Res gestee — Statements after the event.

    What an agent says while acting within the scope of his authority is admissible against his principal as part of the res gestee, but not statements or representations made by him at any other time.

      Negligence — Evidence—Repairs made after accident.

    Repairs made after an accident do not in themselves give rise to a presumption of negligence.
    Argued May 6,1907.
    Appeal, No. 164, Jan. T., 1906, by defendant, from judgment of O. P. Tioga Go., Sept. T., 1904, No. 302, on verdict for plaintiff in case of Lucian A. Matteson v. The New York Central & Hudson River Railroad Company.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.

      Trespass to recover damages for injuries to land alleged to have been caused from the construction of a bridge. Before Cameron, P. J.
    At the trial when W. J. Ballou was on the stand, the following offer was made:
    Mr. Owlett: I want to ask this witness if from the time he first knew this land in 1870, down to the time of the flood, if there was not a depression there, and if in the earlier years of his knowledge of that field if there was not water standing in there in ponds from four to five feet deep, for the purpose of .showing this jury the character of that land and under the evidence of Mr. Matteson that it frequently overflowed there, to give them some knowledge of the true situation and value of that land.
    Objected to, for the reason it is not cross-examination. If it does anything it tends to open in this indirect way the defense in this case; the fact that twenty years ago there may have been pools of water upon this land cannot be relevant here, the witness having sworn prior to this flood there was no water course there.
    Objection sustained and evidence excluded.
    To which ruling by the court counsel for the defendant except and at their request this bill is sealed. [11]
    When the plaintiff was on the stand, the following offer was made:
    Oonnsel for the plaintiff propose to show by the witness on the stand, and the plaintiff in this case, that soon after the damage alleged in plaintiff’s statement was suffered the superintendent of - the defendant company came upon the ground in question and said to the plaintiff, “ Mr. Matteson, it looks as though we had pretty near ruined you. We expect to pay you for all the damage we have done — and we will. Just hold on and don’t be in a hurry, and we will settle with you.” This to be followed by other evidence that this corporation afterwards instructed their trestle gang, or railroad gang, to go to that ground and remove those piles as quickly as possible, as they were liable for the damages sustained by the farmers as long as they were in there. This for the purpose of showing the corporation’s own admission of their negligence. That the officer referred to as meeting Mr. Matteson on the ground is Mr. Crowley, superintendent of the Pennsylvania division of the New York Central Railroad.
    Counsel for the defendant object to this offer as incompetent and immaterial. ■ It is an effort to show a statement by a subordinate officer, or agent of the company, not shown to have any authority to bind the company for any such purpose, neither is it shown the character of the supervision which the agent or officer had. It is not shown whether he is general superintendent, division superintendent, or. the extent of his authority or that he had any authority whatever to adjust claims or to bind the company in this regard. This offer is further objected to for the reason that in the main it is an effort to show the opinion of some unknown officer or agent of the company as to facts claimed to be irrelevant to this case, and that the evidence offered is incompetent for the further reason that it is an attempt to get the opinion of a witness not shown to have authority to speak.on the subject and not shown to have been on the ground when the damage is alleged to have occurred, and, who, therefore, cannot know of the cause of the damage.
    Objection overruled. Exception. [12]
    Louis Costley was asked this question:
    “ Q. You may state to the court if he said anything about the necessity of getting those (piles) out
    Counsel for the defendant object to what was said by the supervisor of bridge work on the Pennsylvania division as being improper and irrelevant, and from no point of view being proper evidence upon the issue now trying.
    It is proposed by the witness upon the stand, who has already testified to the condition of the trestle, to now show by him, that he, as one of the employees of the railroad, helped to remove these piles; that they were directed to do so by the superintendent of that class of work of the corporation defendant. The purpose of this offer is to show that these piles were recognized by the railroad company as their property and to show that they took charge of them and caused them to be removed.
    Objected to as being incompetent and wholly irrelevant and immaterial and not in any way helping to determine the issue being tried, and for the further reason that it does not appear in the offer that the piles were removed at or about the time of the injury or that the conversation referred to occurred about that time.
    The' Court: Objection overruled for the purpose of showing the authority exercised by the man in charge of this work, and to show that he was an officer of the company.
    To which ruling by the court counsel for the defendant except, and at their request this bill is sealed. [13]
    Yerdict and judgment for plaintiff for $2,017.16. Defendant appealed.

      Errors assigned among others were (11-13) rulings on evidence, quoting the bill of exceptions.

      E. H Owlett and S. F. Channell, with them Walter Sherwood, for appellant,
    cited: Penna. R. R. Co. v. Books, 57 Pa. 339; American Steamship Co. v. Landreth, 102 Pa. 131; Giberson v. Patterson Mills Co., 171 Pa. 369; Baran v. Reading Iron Co., 202 Pa. 274; Elias v. Lancaster City, 203 Pa. 638.

      Henry A. Ashton, with him Chester H. Ashton, for appellee.
    June 3, 1907 :
   Opinion by

Mr. Justice Stewart,

The question here at issue was the defendant’s liability to respond in damages for the flooding of plaintiff’s land, claimed by the plaintiff to have resulted from the manner in which defendant company had constructed the foundation for its bridge over the Cowanesque river. The case presents no peculiar features, and does not call for a general review. It is enough to indicate the specific errors committed on the trial which require a reversal of the judgment.

W. J. Ballou, a witness called by plaintiff, testified as to how the plaintiff’s land was affected by the flooding, which he said was occasioned by the defendant’s structure, and gave his estimate of the damage. He described how it had been washed, and the size and extent of the gullies and depressions which resulted. On cross-examination it was proposed to ask this witness whether, before the building of the bridge complained of, the land was not subject to overflow, and whether there were not at that time depressions on it and ponds four or five feet deep. The offer was excluded on the ground that it was an attempt to introduce defendant’s case by way of cross-examination. However much it was in line with what defendant proposed to prove subsequently by way of defense, it was none the less entirely competent by way of cross-examination; and it was error to exclude it.

The plaintiff was permitted under objection to testify to certain admissions by the division superintendent of the defendant company at a later day, as to the cause and extent of the damage done to the land. This was not by way of contradiction, but as substantive testimony. “ The rule is well settled, ” says Sharswood, J., in Penna. Railroad Company v. Books, 57 Pa. 339, “that what an agent says while acting within the scope of his authority, is admissible against his principal, as part of the res gestae, but not statements or representations made by him at any other time. ”

Like error was committed in allowing another witness for plaintiff, under objection, to testify to certain directions given by the defendant’s supervisor of bridge work, for the removal of the piles which it is claimed caused the obstruction in the stream and the flooding of plaintiff’s land. While the avowed purpose of the offer was to show admission by the company that the piles were the property of the company, a matter not in dispute, the inference the jury would most likely have derived from it, would have been an implied admission of negligence in having the piles where they had been placed. The evidence was inadmissible for such purpose. Repairs made after an accident do not in themselves give rise to a presumption of negligence: Baran v. Reading Iron Co., 202 Pa. 274. The evidence should have been excluded. The eleventh, twelfth and thirteenth assignments of error are sustained.

Judgment reversed, and a venire facias de novo awarded.


author: Mr. Justice Fell,

text:
    Cornelius v. Central Accident Insurance Company, Appellant.

      Trial — Charge—Assignments of error.

    A charge is not to be judged by detached sentences, but is to be taken as a whole. If the charge considered as a whole presents a fair and full presentation of the issue of the facts involved, the appellate court will not reverse.

      Insurance — Accident insurance — Income of insured- — Agent of company as policy holder.

    An agent of an accident insurance company was instructed not to take applications for policies that provided for a weekly indemnity greater than three-fourths of the weeldy wages or income of the insured. He took out a policy in his own name, but neither in the application nor in the policy was there any statement as to his income. The company claimed that the insured had procured policies for himself in excess of the three-fourths limitation. It appeared that the income from the insured was from his earnings as an attorney at law, and as an insurance solicitor. It was uncertain in amount, and his weekly receipts were at times less, and at other times more than would warrant an applicatian for the’amount of indemnity for which he applied. The court charged that, if in making his application the insured acted in good faith with no intention to obtain overinsurance, or to defraud the company, he could recover, otherwise he could not. Held that the instruction was proper, and that a verdict and judgment for the plaintiff should be sustained.
    Argued May 6, 1907.
    Appeal, No. 330, Jan. T., 1906, by defendant, from judgment of C. P. Tioga Co., Sept. T., 1905, No. Séí, on verdict for plaintiff in case of Charles EL Cornelius v. Central Accident Insurance Company of Pittsburg, Pa.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Assumpsit on a policy of accident insurance. Before Omerod, P. J.
    The opinion of the Supreme Court states the case.
    Yerdict and judgment for plaintiff for $10,808.77. Defendant appealed.

      Errors assigned were various rulings on evidence and instructions, including a number of the detached portions of the charge.

      8. F. Ohannell, with him <9. W. Wisner, F. E. Watrous and II. F. Marsh, for appellant,
    cited: Elliott v. Ins. Co., 66 Pa. 22; Bahner v. Ins. Co., 127 Pa. 464.

      Robert K. Young, of Merrick <& Young, for appellee.
    June 3, 1907 :
   Opinion by

Mr. Justice Fell,

This action was on two policies of accident insurance issued to the plaintiff. The grounds of defense were (1) that the plaintiff’s injury was not the result of an accident but of a design on his part and was self-inflicted ; (2) that the plaintiff as agent of the insurance company defendant had been instructed not to take applications for policies that provided for a weekly indemnity greater than three-fourths of the weekly wages or income of the insured and that he had procured policies for himself in excess of this limitation. It is contended by the appellant that because of errors at the trial neither ground of defense was properly presented to the jury by the court. As to the first it was stated in the charge that there was nothing in the plaintiff’s testimony alone that threw any discredit on his story as to the happening of the accident and also that the defendant had offered no testimony to show that the injury was self-inflicted. It is argued that this instruction ignored the proof of facts and circumstances by the defendant which, discredited the plaintiff, and by showing motive and design warranted an inference that the plaintiff had injured himself in order to obtain the insurance money. In immediate connection with these statements the learned trial judge called the jury’s attention to the proofs of the defendant’s financial embarassment and to the circumstances relied on by the defend'ant. It was said in the charge : “ They say the circumstances surrounding the case point to a deliberate intention on his part to injure himself for the purpose of receiving the money due upon these policies to relieve him from this financial embarassraent. All this evidence has been detailed before you, and you-are to find from this evidence as to whether or not this injury was accidental; if you find it was not accidental, but was a deliberate injury inflicted upon bimself by himself, you will find in favor of the defendant, as these policies of insurance do not provide for indemnity against any such injury.” A charge is not to be judged by detached sentences, but is to be taken as a whole. Considering the whole charge there was a fair and full presentation of the issue of fact involved.

The applications of the plaintiff for insurance were made to the home office. They contained no statements as to his income and the policies contained no provisions in relation to it. If there was a breach of duty on his part, it was in making an application for a larger amount of insurance for himself than under his instructions he would have been permitted to make for another. His income ivas from his earnings as an attorney at law and as a soliciting agent of a number of insurance companies. It was uncertain in amount and his weekly receipts were at times less and at other times more than would warrant an application for the amount of indemnity for which he applied. The instruction upon the subject was that if in making his application the plaintiff acted in good faith with no intention to obtain overinsurance or to defraud the company, he could recover, otherwise he could not. This instruction was quite as favorable as the defendant was entitled to. The case was carefully submitted with clear and adequate instructions and we find no error in the record.

The judgment is affirmed.


author: Mr. Justice Elkin,

text:
    Wallace, Appellant, v. Dorris.

      Lease — Coal lease — Extension of lease — Evidence—Question for jury.

    A coal lease provided that if the lease should not be renewed at the end of the term, the lessors should pay to the lessees a certain share of the cost of coke ovens erected on the premisés by the lessees. At the end of the term the lessees continued mining coal, making coke and paying royalties. The lessors contended that the lease had been renewed, and that they were not liable years after the termination of the original term to pay any share of the cost of the coke ovens. The lessees contended that the lease had not been renewed. The evidence on the subject was conflicting. A letter was admitted in evidence written by the lessees in reference to the renewal of the lease, just before the expiration of the term. Held (1) that the letter was properly admitted in evidence; (2) that the case was for the jury; (3) that a verdict and judgment for defendants, the lessors, should be sustained.

      Evidence — Writing—Offer of whole paper.

    Where a party offers a paper in evidence he must offer the whole of it.
    Argued April 22, 1907.
    Appeal, No. 396, Jan. T., 1906, by plaintiffs, from judgment of C. P. Huntingdon Co., Sept. T., 1904, No. 22, on verdict for defendants in case of W. W. Wallace, Administrator of R. B. Wigton, deceased, W. H. Wig-ton and Prank H. Wigton, late trading as R. B. Wigton & Sons, to use of Prank H. Wigton, v. John D. Dorris et al., executors of William Dorris, deceased.
    Before Fell, Brown, Potter and Elkin, JJ.
    Affirmed.
    Assumpsit to recover a portion of the cost of a coke oven. Before Woods, Pi J.
    The facts are stated in the opinion of the Supreme Court.
    At the trial ivhen A. M. Walker was on the stand, the witness was asked this question.
    “ Q. I ask you now to read the balance of the indorsement upon the original paper which was offered and admitted.”
    Mr. Waite: Plaintiffs’ counsel object to reading the memorandum indorsed upon the lease in lead pencil, a large majority of which is effaced, so as to render it unintelligible, and for the following reasons:
    1. From an inspection of the paper itself no date appears to the indorsement, and, therefore, no one can tell to which renewal it refers.

      2. It is not signed by any person.
    3. That part which is erased might explain that part which seems to be legible upon the back of the lease.
    4. It is not signed by anybody or sealed, the plaintiffs’ counsel, therefore, declinestoread a part of this memorandum for the reason above given.
    Lastly, it does not appear to be any part of the lease or a renewal thereof.
    The Court: We will hold you to the rule of law and require you to read all the indorsements on the lease. Bill of exceptions sealed for plaintiffs. [1]

      Tbe court admitted under objection and exceptions tbe following letter: [3]
    “December 5, 1891.
    “ Mr. William Dorbis,
    “Huntingdon, Pa.

      “ Dear Sir: We bad expected before this to take up tbe matter of the Morrisdale lease, but on account of the absence of our Mr. F. H. W. the writer has been so closely confined to here and New York that it has been utterly impossible for him to get up the country in order for him to have necessary interviews with Mr. Duncan and Isett. As soon as we can get away, which we hope to be able to do next week, we will see both Moshannon and Mr. Isett and arrange the details and we will have the entire matter in shape to take up with you on the return of our Mr. F. H. W. about the 24th. In the meantime, however, we would suggest that our present arrangements with Morrisdale be carried over January 1st, as I think we can arrange the entire lease within a very short time after that date if not prior to it.
    “Very truly yours,
    (Sgd.) “R. B. Wioton & Sons.
    The court charged in part as follows:
    , [Now, gentlemen of the jury, it appears that there were coke ovens to be built by R. B. Wigton & Sons upon these terms and that they were ready and willing to build them and operate them, provided William Dorris would allow them to take the coal from this property, they to pay him a certain royalty. In the original agreement, gentlemen of the jury, there is a stipulation which reads as follows: “ To be for the term of five years from the first day of January instantthat is, the agreement was to begin on that January 1, “with the right, however, to the said Wigtons to terminate the lease at the end of any one year of the term, having given to the lessor three months’ previous notice in writing of his intention to end the same.”
    Now, gentlemen of the jury, this whole contract was in force and that clause I have just read was in force in 1892. There does not appear to have been any notice served by R. B. Wig-ton or his successors in title to this lease, on William' Dorris, except as contained in this letter, dated December 5, 1891, in which it was said: “ In the meantime, however, we would suggest that our present arrangement with Morrisdale be carried over January 1, as I think we can arrange the entire lease within a very short time after that date if not prior to it.” In other words, there was no real notice served on William Dorris by R. B. Wigton or his successors in title to this lease, that they intended to terminate the lease.] [5]
    [Now, gentlemen of the jury, we say to you here, that the only question for you to decide, and we are going to submit that question to you and leave it with you to decide, is whether this lease was renewed in pursuance to the agreement made October 7, 1886. It is the duty of the jury to say whether this lease was extended under the evidence in this case. Mr. Wigton says that there was not any extension entered into between these parties, and that is about the only evidence, outside of this letter, which the plaintiffs ask you to infer was in corroboration of his testimony, that there was not an extension of the lease, but simply a holding over until some other lease could be entered into.] [6]
    [Now, gentlemen of the jury, Mr. Dorris’ testimony has been read to you. He testifies that there was an extension, and' the defendants ask you to say that there was, because the plaintiffs entered into or rather still kept possession of the property and went on and mined the coal and burned the coke in the same manner as they had done previously to January 1, 1892. We say to you, gentlemen of the jury, that this is evidence for you to consider, the fact that they did go ahead and mined this coal and burned this coke in the same manner that they had done under the original lease, that is evidence for you to take into consideration in arriving at your verdict.] [7] ■
    Yerdict and judgment for defendants. Plaintiff appealed.

      Errors, assigned were (1, 23) rulings on evidence, quoting the bill of exceptions; (5, 6, 7) above instructions, quoting them.
    ; Leoni Melliek, of Melliek, Potter <& Deckert, with' him M. M. Waite, for appellant.
    A lease for five years cannot be made or renewed verbally, under the statutes of fraud and perjuries: Jennings v. McComb, 112 Pa. 518; McDowell v. Simpson, 3 Watts, 129; Hill v. Meyers, 43 Pa. 170; Walter v. Transue, 17 Pa. Superior Ct. 94; Whiting & Co. v. Pittsburg Opera House Co., 88 Pa. 100; Christy v. Barnhart, 14 Pa. 260.

      David I. Krébs and Thomas H. Murray, with them Thos. F. Bailey, for appellees.
    The statute of frauds is only to be invoked for the benefit and for the protection of an alleged lessor or grantor, and all the cases cited by the learned counsel for the appellant lay down this principle in unmistakable language.
    The statute of frauds and perjuries can have no application here, for the reason that the verbal arrangements are corroborated by the writings in the case, the indorsement and the letter.
    The statute of frauds and perjuries has no application for the reason that there is no new lease created, but the renewal simply of the previously uncontradicted existing contract, and such a renewal is not within the purview of the statute. The court, therefore, was clearly right in admitting this oral testimony in connection with the other testimony in the case: Rohbock v. McCargo, 6 Pa. Superior Ct. 134.
    June 3, 1907:
   Opinion by

Mr. Justice Elkin,

The agreement for the extension of the term entered into in 1886 contained the following covenant: “ If at the expiration of the said extended term of five years from January 1, 1887, this lease shall not be renewed, the said William Dorris shall pay to the said R. B. Wigton & Sons the four-tenths of the value of the coke ovens upon said tracts at the time. ” This suit was brought on the ground that the lease was not renewed, by reason of which failure liability attached to pay four-tenths of the value of the coke ovens. The defendants deny the averment and positively assert that the lease was renewed as contemplated in the agreement. The liability of appellees depends solely upon whether the lease was renewed or not. Here, then, is a sharply defined issue of fact, and the only questions which can arise are those which relate to the admission or rejection of testimony and whether the evidence produced was sufficient in law to constitute a renewal. There is no doubt about the intention of the parties. It appears in the agreement. Coal was to be mined and coke manufactured and for this purpose coke ovens were to be built. The lessees undertook the burden, but, foreseeing that the coal might not-be exhausted or all the coke manufactured, before the expiration of the extended term, provided against the contingency of failure to extend the lease by requiring the lessor to pay his proportionate share of the cost of the coke ovens left on the premises. The extended term to which this covenant applied expired January 1, 1892, at which time, if the lease was not extended or if satisfactory arrangements had not been made for its renewal, lessees had the right to demand from Dorris his proportionate share of the cost of the coke ovens. That no demand was made for a period of ten or twelve years after the liability was supposed to attach, is strongly persuasive that the parties themselves did not consider such a liability to exist at the time of the expiration of the extended term of 1892. This can only be accounted for on the ground that both parties considered the lease renewed within the meaning of their covenant. Lessor and lessees after the expiration of the extended term dealt with each other on the basis of a continuing lease under which the operations were conducted. Coal was mined, coke was manufactured, royalties were paid, and accounts rendered in the same manner as theretofore for several years thereafter. In the very nature of things, it does not seem possible that these relations could have existed between careful business men in a transaction involving large sums of money in the absence of an agreement extending the term and defining the rights of the parties. The appellees contend that the agreement to renew the lease was evidenced in writing and by parol. At the trial a large amount of testimony was introduced in support of this position. The first and second assignments seek to convict the trial judge of error because, against the objection of appellant, he instructed counsel to read the indorsement on the back of the 1886 agreement to the jury. It was necessary for plaintiff to offer this agreement in evidence because it was the foundation of his suit. He did so, and cannot now complain that some part of it may have done him harm. Nothing is better settled than when a party offers a paper in evidence he must offer the whole of it. If some parts of it require explanation, the burden is upon him to explain : Cary v. Cary, 189 Pa. 65. The agreement with the indorsement thereon was in the possession of plaintiff and had been for many years. When it was produced at the trial'and offered in evidence, it was entirely within the rights of the defendants to insist that all of it, including the indorsement, should be read to the jury, and it was the duty of the trial judge, upon request made, to so order. It was a single item of evidence relevant to the issue which, taken in connection with other testimony, was proper for the jury to consider.

The third assignment relates to the letter bearing date December 5,1891, written by the Wigtons to Dorris in reference to the renewal of the lease, then soon to expire. We can see no reason why this letter should not. have been introduced in evidence. It did not conclusively establish any fact, but it was an item of evidence tending to show that the parties were negotiating for a renewal of-the lease before the expiration of the term. It also tended to show the intention of the parties with respect to the renewal of the lease, and was in corroboration of the testimony of Air. Dorris. The effect of it, of course, was for the jury.

A large number of the assignments go to the question whether this case comes within the statute of frauds. It is urged with .much force and ability that a lease for five years cannot be either made or renewed by parol because in violation of the .statute. The general rule on this question has become elementary in the law of real estate, but its application to the facts of a particular case, or whether it has any application at all, is often difficult to determine. It must not be overlooked, however, that in the present case this question is not raised for the purpose of ascertaining the rights or liabilities of the parties in the lease “verbally extended.” The parties after January 1, 1892, treated the lease as subsisting and neither party stopped to inquire whether it had been renewed in writing or by parol. The lessees mined the coal and manufactured the coke, and the lessor received the royalties under the terms of the original lease and its subsequent extensions as they had always done before. No one denied the existence of the lease or raised any question as to the term being properly and legally extended. This question was not raised until many years after the coal was exhausted.or until mining1 operations had ceased under the lease, and then offiy in a collateral proceeding. The covenant in the agreement of 1886 requiring Dorris to pay four-tenths of the value of the coke ovens if “this lease shall not be renewed ” at the expiration of the term, is silent on the method of renewal or the length of the term for which it was to be renewed. The most reasonable interpretation of the contract is that it was to be renewed in a manner satisfactory to the parties and for such a length of time as might subsequently be agreed upon. It might be for two, three, five or ten years. Any length of term and any conditions, satisfactory to the parties at the time of renewal, would be a compliance with the covenant. The covenant did'not in express terms nor by necessary implication, require that the lease should be renewed for a term of five years or longer, and the courts will not read into the agreement what the parties themselves did not insert. This court held in Moore v. Miller, 8 Pa. 272, that a parol agreement to enter upon the land of another for the purpose of digging ore, erecting buildings and doing other necessary things in the prosecution of the work, paying for the privilege a certain fixed royalty for each ton of ore mined and removed was a contract of lease and could be enforced. It was said in that case that where there was evidence on both sides in relation to the alleged contract the court was not bound to take it from the jury, whose province it was, under proper instructions by the court, to determine the duration and character of the lease. There are many questions in which matters of law and fact are so closely blended that they must of necessity be submitted to the jury with instructions by the court. The case at. bar belongs to this class. The testimony was conflicting, but was sufficient, if that offered by the defendants was believed, to justify the jury in finding as a fact that the lease had been renewed in a manner and for a term satisfactory to the parties. The jury have found in favor of the defendants and we see no reason to disturb their finding. Again, it is conceded that the' lessees remained in possession of the leased premises, mining coal and manufacturing coke, for a period of years, and having thus enjoyed the benefits of the contract, they cannot now repudiate it by saying that no-such contract ever legally existed. They cannot accept all the benefits of the contract and then repudiate its obligations. Equity treats the contract thus executed as determining the rights of .the parties, and will not permit one of the parties to repudiate it after he has enjoyed all of its substantial benefits. The lessees, in the present case, treated the lease as renewed, as did the lessor, both parties accepting the benefits resulting therefrom and either party will be estopped, many years after operations had ceased under the terms of the lease, from denying that in contemplation of law it ever existed.

After careful examination of the twenty assignments brought to our attention, we have concluded that none of them constitute reversible error.

Judgment affirmed.


text:
    American Car & Foundry Company, Appellant, v. Alexandria Water Company.

      Principal and agent — Evidence—Authority of agent — Cross-examination.

    In an action against a corporation on a contract where the plaintiff has called the district manager of the plaintiff for the purpose of proving the contract, the witness may be cross-examined as to his authority to execute the contract in question, and its ratification and performance^ but it is clear error to permit the defendant to go further and cross-examine the witness as to his general authority. Such authority must be proven by affirmative testimony.

      Principal and agent — Authority—-Province of court and jury.

    The fact of agency and the scope of the authority of an agent are questions for the court, where the authority is created by an instrument in writing, but where such authority is to be implied from the conduct of the parties, or where the agency is to be established by witnesses, the fact and scope of the agency are for the jury.
    As a general rule when a corporation entrusts a principal officer or manager with the general supervision of a particular branch of its business, it clothes such officer or manager with the authority of a general agent coextensive with the business intrusted to his care, and private instructions limiting his ostensible powers will not protect the corporation from liability for the acts of the agent done within the scope of his ostensible authority, although the specific act may be in excess of private instructions.
    In an action on a contract where witnesses for the defendant testify in positive terms that certain notes had been executed and delivered to the district manager of the plaintiff company in full payment and satisfaction of the claim, it is proper to permit the district manager to testify in rebuttal that this was not the agreement between the parties; but letters between the district manager and treasurer of his company relating to such notes, are not admissible.
    While in such a case it may be the better practice to require the defendant first to affirmatively prove the ageiicy and scope of the authority of the district manager, before offering testimony as to the execution of the notes and matters incidental thereto, such is not an imperative requirement. The order of evidence to be given in such a case is within the discretion of the court.
    Argued April 23, 1907.
    Appeal, No. 129, Jan. T., 1907, by plaintiff, from judgment of C. P. Huntingdon Co., May T., 1904, No. 23, on verdict for defendant in case of American Car & Foundry Co., Subcontractors, v. Alexandria Water Company, Owner, or Reputed Owner, and William M. Powell & Company, Contractors.
    Before Fell, Brown, Potter, Elkin and Stewart, J.J.
    Reversed.
    The facts are stated in the opinion of the Supreme Court.
    At the trial when W. F. Lowery, district manager of the plaintiff wras on the stand, he was asked on cross-examination, this question:
    “ Q. Then the contract was made and concluded by you % ”
    Mr. Waite: We object to this examination for the reason that it is not a cross-examination of the witness. We have proved a contract entered into by the witness between William M. Powell & Company and the American Car and Foundry Company, and he was not asked with regard to how that contract came to be made, or whether he communicated with the home office before he entered into it or not. The fact is that contract is now involved in the controversy and it is not cross-examination.
    Mr. Bailey: I wish to inquire what the authority of the district manager is and for that reason I wish the jury to understand that the contract was made without conference with the home office ; in that light the question is proper.
    The Court: Objection overruled. Evidence admitted. Bill of exceptions sealed for plaintiff. [1]
    “ Q. What did you do with those notes ? A. Forwarded them to the treasurer at St. Louis. Q. For what purpose? A. For him to rule on the matter.”
    Mr. Bailey : It is objected to that what transpired between William F. Lowery and the other officers of the American Car & Foundry Company with regard to those notes is not evidence against the defendant, the Alexandria Water Company, the only question being with what understanding they were received by William F. Lowery, who is a witness in this case, holding the position of district manager of the American Car & Foundry Company, and the American Car & Foundry Company cannot now excuse itself of liability by any juggling of the notes or transmitting them from one officer to another of the American Car & Foundry Company.
    2. What occurred between the witness and any other officer of the American Car & Foundry Company is not rebuttal.
    The Court: The second objection as to this not being rebuttal is sustained ; evidence rejected and bill sealed for the plaintiff. [9]
    Mr. William F. Lowery on the stand.
    Mr. Waite : I propose to prove by the witness on the stand that when Mr. Mandeville and Abner Smith were at the office at Berwick, Pa., on December 29, 1903, and suggested the giving of promissory notes for the balance due the plaintiff company from William M. Powell & Co., the witness told them that he could do nothing more than receive the notes, and sent them to the home office at St. Louis for approval or rejection by the company ; that in pursuance of that conversation a day or two after the notes were sent to him by mail from Hazleton, Pa., signed by William M. Powell & Co., and not in evidence; that he immediately sent those notes to the home office in St. Louis, and that he received a letter in reply thereto from S. S. Delano, the treasurer of the American Car & Foundry Company, which is as follows:

      “ January 4, 1904.
    “ Mr. Wm. F. Lowerv, District Manager, Berwick, Pa.
    “ Dear Sir : Replying to your favor of the first inst., inclosing three notes signed by Messrs. William M. Powell & Co., covering the account. Before accepting these notes I would thank you to advise me if, under the state laws of Pennsylvania, the time limit for filing builders’ lien on the" construetion into which this material entered has expired. We prefer to see that .our interests are legally protected before being forced into accepting these notes.

      “ S. S. Delano, Treasurer.”
    That in reply to this letter William F. Lowery, on January 6, 1904, wrote to S. S. Delano, of St. Louis, the following letter : '
    “ Berwick, Pa., January 6, 1904.
    “ Mr. S. S. Delano, Treasurer, St. Louis, Mo.
    “ Dear Sir : I am in receipt of your favor of the 4th instant, account William M. Powell & Co. The law of Pennsylvania requires a notice to be given ninety days from time of furnishing the materials, and the filing of the lien ninety days after such notice, a total of six months from the time of furnishing the materials until the lien itself expires. It is important, however, that the notice be given in ninety days. If you so instruct, I will have our local attorney, Mr. Charles C. Evans, to take care of this feature which would probably give us a good position on the October and November shipments.
    (Signed) “Wm. F. Lowert.”
    To which letter S. S. Delano made the following reply :
    “ January 23, 1904.
    “ Mr. William F. Lowery, District Manager, Berwick, Pa.
    “ Dear Sir: Inclosed I beg to hand you the three notes of Messrs. William M.' Powell & Co., which were tendered in settlement of their account. Since we have made other arrangeménts to protect our interests we are forced to return these notes. I will thank you to advise me from time to time as anything develops on this account.

      “ Yours very truly, S. S. Delano, Treasurer.”
    In reply to which William F. Lowery wrote the following :

      “ Berwick, Pa., January 26.
    “ Mr. S. S. Delano, Lincoln Trust Building, St. Louis, Mo.
    “ Dear Sir : I am in receipt of your favor of the 23d inst. inclosing William M. Powell & Co.’s notes. Owing to the disarrangement of railroad traffic in this region on account of high water and ice gorges, our attorney, C. C. Evans, has been unable to go to Alexandria yet. We have, however, received an acknowledgment of our notice from, the treasurer of that company, and Mr. Evans will visit Alexandria the earliest date possible. Pending his return I retain the notes here under his advice, and will communicate with Powell & Co. under our attorney’s directions after the visit above referred to.
    (Signed) “ William P. Lowery.”
    We also offer in evidence letter written January 1, 1904, in which the following is stated :
    * • “ Berwick, Pa., January 1, 1904.

      “ Mr. S. S. Delano, Treasurer A. M. C. Co., St. Louis, Mo.

      “ Dear Sir : Referring again to my letter of the 30th, W. M. Powell & Co., I hand you herewith copy of letter from this concern under that date (30th), the three notes therein mentioned and copy of special report from Dunn relative to the concern. I see the notes are written covering interest to maturity, but do not care of the back interest from due date of account to date of the notes themselves. I have not written Messrs. Powell & Co. anything regarding this matter, and will not do so until you have passed upon the facts presented. The mutual acquaintance to whom I have referred says he has been away from Hazleton too long to be in close touch with the movements of Mr. Powell, and, therefore, is not in position to give information of value. Our sales agent will be in Hazleton within a few days, and will study the question from that standpoint. Aside from the fact that the transaction has not been conducted so as to give us legitimate returns from the work into which our material entered, on the surface the account would seem to be good, only slow in adjustment. Awaiting your favor.
    (Signed) “ William P. Lowery.”
    This offer is for the purpose :
    1. Of corroborating the witness in his testimony with respect to what occurred in the office at Berwick with Mr. Mande ville and Mr. Smith.
    2. Por the purpose of showing that the witness has no authority or power to enter into such a contract as Mr. Mandeville and Mr. Smith testified to at the time the notes were given. This is to be followed by proof that the witness in all such cases is required by the company to forward to the home office in St. Louis any application or applications, such as were given to the plaintiff company in this case, for the approval or rejection of the treasurer, S. S. Delano.
    Mr. Bailey: Counsel for defendants do not object to that part of the offer which proposes to show what occurred between the witness in his office at Berwick, Pa., and Abner Smith and Mr. Mandeville. It is objected, however, that the balance of the offer is immaterial, irrelevant and inadmissible for the following reasons :
    1. For the reason that what occurred between William F. Lowery, one of the officers of the American Car & Foundry Company, and other officers, with relation to those notes is utterly immaterial to this issue, it being in evidence that William F. Lowery had authority, and complete authority, to make this contract with William M. Powell & Co., and that he did make it; that they manufactured the materials sent to Alexandria, and the American Oar & Foundry Company cannot now seek to escape the consequences of this contract by any secret limitation of the authority of William F. Lowery ; they cannot take advantage of the profit derived from this contract, or-of this power to make the contract and then repudiate his authority to settle for it.
    2. It is not rebuttal. The question of his authority to receive these notes in payment having been ruled upon by your honor in the case in chief.
    3. Generally irrelevant and incompetent, and the letters on their face show that they were not all the correspondence, but the letters, together with all the rest of the testimony after the testimony as to what took place at the office at Berwick, is utterly immaterial and irrelevant.
    The Court: The conversation which took place between the witness on the stand and with the witness on the part of the defense, Abner Smith, is evidence in rebuttal. The balance of the testimony offered is rejected and bill of exceptions sealed for plaintiff. [10]
    Mr. Waite : I propose to prove by the witness on the stand that he is not clothed with power and authority to receive notes in settlement of accounts ; that as soon as cash, checks or notes are received by him they are forwarded to the home office in St. Louis, Mo., and that all collections for the sale of goods from the factory at Berwick, Pa., are made through the home office at St. Louis, and this has been the practice ever since the witness served as district manager at Berwick, Pa.
    Mr. Bailey : It is objected to that the court has already ruled in chief that the limitations put upon the authority of the witness are utterly immaterial, irrelevant and incompetent, it having been proved that the witness was general agent and clothed with authority to make contracts anywhere in this country from his office at Berwick, that under the same powers he was clothed with authority in the settlement of contracts. The evidence is, therefore, immaterial and incompetent and cannot be used to the injury of the third party..
    The Court: The plaintiff having already produced testimony to the effect that it sought to and did obtain a judgment note to secure this claim, the offer is not rebuttal to the proposition offered on the part of the defendant. Evidence rejected. Bill of exceptions sealed for plaintiff. [11]
    Mr. Waite : “ Q. Were the notes returned to you ? A. Yes, sir. Q. From the home office in St. Louis ? A. Yes, sir; rejected.”
    Mr. Bailey : We object. What became of the notes after-wards was excluded by the court.
    The Court: It is ordered stricken out.
    Mr. Waite : I propose to ask the witness if they were rejected at the home office in St. Louis and rejected by him.
    Mr. Bailey: That is objected to as immaterial, irrelevant and incompetent. Exception. [12]
    Yerdict and judgment for defendant. Plaintiff appealed.

      Errors assigned among others were (1, 9, 11, 12) rulings on evidence, quoting the bill of exceptions.

      H. E. Waite, with him O. O. Brewster, for appellant.
    Third parties dealing with agents cannot rely upon the agent’s assumption of authority, but are regarded as dealing with the power conferred upon them and they must at their own peril observe that the act done by the agent is legally identical with the act authorized by the principal: Mecham on Agency, p. 242, sec. 398; New York Iron Mine v. Negaunee First Nat. Bank, 39 Mich. 644; McCullough v. Moss, 5 Denio (N. Y.), 567; Sewanee Mining Co. v. McCall, 40 Tenn. 619; London Savings Fund Society v. Hagerstown Savings Bank, 36 Pa. 498; Beyer v. Rathfon, 23 Lanc. 251; Bangor, etc., Ry. Co. v. American Bangor Slate Co., 203 Pa. 6; Stoystown, etc., Turnpike Co. v. Craver, 45 Pa. 386; Mundis v. Emig, 171 Pa. 417; Deacon v. Greenfield, 141 Pa. 467; Mange-Wiener Co. v. Drug Co., 27 Pa. Superior Ct. 315; Good Hope Bldg. Assn. v. Amweg, 22 Pa. Superior Ct. 145.

      Thomas F. Bailey, with him Samuel 1. Spylcer, for appellee.—
    We contend that this case is directly in line with the cases so numerous in this state, where it has been held that as to the public, it is the apparent scope of the general agent’s authority which is to govern: Grafius v. The Land Co., 3 Phila. 447; Williams v. Getty, 31 Pa. 461; Adams Express Co. v. Schlessinger, 75 Pa. 256; Anderson v. National Surety Co., 196 Pa. 288; Thrall v. Wilson, 17 Pa. Superior Ct. 376; Fees v. Shadel, 20 Pa. Superior Ct. 193.
    The receipt of a negotiable promissory note operates to extinguish a prior existing debt, if so intended between the parties, and this is a question of fact for the jury upon the evidence : Seltzer v. Coleman, 32 Pa. 493; Shaw & Leigh v. First Associated Reformed Presbyterian Church, 39 Pa. 226; Buck v. Wilson, 113 Pa. 423.
    June 3, 1907 :
   Opinion by

Mr. Justice Elkin,

The pivotal point in the decision of this case is the authority of the district manager, Lowery, to accept the three negotiable notes, and the collateral judgment note in full satisfaction and payment of the balance due by the contracting firm on account of pipe and other materials furnished for the construction of the water plant. If the plaintiff company clothed its district manager with thegeneral power to superintend the manufacture and sale of these materials, together with the right to enter into contracts in the name of the company, fixing prices and terms of payment, including the authority to employ sales agents to transact business generally throughout the state or elsewhere under his direction, he would be a general agent within the meaning of tb e law in that branch of the business over which he exercised supervision. If these facts were established by competent testimony, it is clear the district manager would have powers coextensive with the business intrusted to his care. Unfortunately, in the trial of the case in the court below it seems to have been assumed that he had all of these powers and the evidence offered is so meager as not to enable this court in reviewing the case to determine what his general powers were.

The first assignment of error raises the question whether on cross-examination it was proper for the defendant to show the general authority of the district manager who was offered as a witness for plaintiff, to prove the execution of the contract relied on to sustain the lien. It was proper to ask on cross-examination any question which related to the authority of the district manager to enter into the particular contract in question, and for this purpose it was clearly competent to ask whether the contract was made and concluded by him without any correspondence with the home office during the progress of the negotiations or in reference to the execution of the contract. All of these facts would tend to show that in the execution of this particular contract the district manager had the authority to bind the plaintiff company. The ratification of the contract thus made, the furnishing of the materials in accordance with the terms thereof and the acceptance of part payment of the price agreed upon, conclusively show the authority of the district manager to execute the contract and fix the terms of payment. Every fact pertaining to this contract could be properly developed on cross-examination, because the plaintiff had offered this witness for the purpose of proviug the contract. It was clear error, however, to permit the defendant on cross-examination to go further and attempt to establish the general authority of the district manager. This should be done by affirmative testimony. It may be that upon a new trial of the case such facts may be shown as would warrant a jury in finding as a fact that it was within the general scope of his authority to accept the notes in payment of the claim. The fact of agency and the scope of the authority of an agent are questions for the court where the authority is created by an instrument in writing, but where such authority is to be implied from the conduct of the parties, or where the agency is to be established by witnesses, the fact and scope of the agency are for the jury: Singer Manufacturing Company v. Christian, 211 Pa. 534. It may be conceded as a general rule that ívhen a corporation intrusts a principal officer or manager with the general supervision of a particular branch of its business it clothes such officer or manager with the authority of a general agent coextensive with the business intrusted to his care, and that private instructions limiting his ostensible powers will not protect the corporation from liability for the acts of the agent done within the scope of his ostensible authority, although the specific act may be in excess of private instructions: Adams Express Company v. Schlessinger, 75 Pa. 256; Anderson v. National Surety Company, 196 Pa. 288. The difficulty about the present case is that the evidence produced at the trial did not clearly show the kind and character of the business intrusted to the supervision of the district manager, the manner in which it was conducted and the scope of the authority exercised by him. This could have been shown by calling as a witness an officer of the company who had knowledge of the facts, or by the district manager himself, or by proving such facts in the conduct of the business generally as to show an implied authority to do the particular act relied on to defeat a recovery in this case.

The ninth, tenth, eleventh and twelfth assignments of error relate to the refusal of the court to admit the testimony of Lowery, the district manager, in reference to the notes which it was alleged were taken in payment of the claim, and in refusing to admit certain correspondence between the treasurer of the company at the home office in St. Louis and the district manager at Berwick. It was competent for the plaintiff to show in rebuttal what these notes were taken for and what disposition was made of them. The district manager should have been permitted to testify that he did not receive these notes in payment of the claim, but with the understanding' that they would be forwarded to the home office for approval or rejection by the company. This was the exact issue of fact in the case. The witnesses for defendant testified in positive terms that the notes had been executed and delivered to the district manager in full payment and satisfaction of the claim, and it was certainly competent for him to testify that this was not the agreement between the parties. There being a conflict of testimony, it was for the jury to determine the fact. I do not agree, however, that in this connection it was competent to offer in evidence the letters which passed between the district manager and the treasurer of the company. These were private communications between the officers of the plaintiff company about which the other parties to this controversy had no knowledge, and their rights could not be prejudiced by these private communications and the court properly refused to admit them in evidence. It was competent, however, for the district manager to testify as to the verbal agreement between himself, Mandeville and Davis at the time it was agreed to accept the notes. It was also proper for him to testify to the fact that he had received them and forwarded them to the home office at St. Louis, and that the notes were returned to him rejected. He should also have been permitted to testify what he did with the notes after they had been returned to him. .All of these facts were in corroboration of his testimony that the notes were not taken in payment of the claim, but only as additional and collateral security for the same. The contention of the appellant that it was the duty of the appellee to first affirmatively prove the agency and the scope of the authority of the district manager before offering any testimony relating to the execution of the notes, and other matters incidental thereto, may be conceded to be the better practice, but this is not an imperative requirement. The order of evidence to be given in such a case is within the discretion of the court: Telephone & Supply Company v. Thompson, 112 Pa. 118.

After a careful consideration of this case we have concluded that when the facts as to the scope of the agencjq somewhat irregularly shown at the trial in the court below, and upon which theory the case was tried, are properly established when the case again comes up for trial, it will be a question for the jury to determine whether, under the general scope of his authority, the general manager could bind his principal in making the alleged contract to accept the notes in payment of the claim. In so holding we are not unmindful of the general rule that all sales, whether of real or personal property, by an agent appointed generally to sell, must be for a consideration in money, and such an. agent cannot bind his principal by receiving payments in bonds, notes or other paper ; or that an agent to collect and receive payment can receive nothing but money in satisfaction of the claim. This general rule is freely conceded, but in our judgment its application to the facts of the present case is unwarranted. Here the district manager was intrusted with the supervision, control and management of a large plant belonging to the plaintiff company. Under his direction all the materials are manufactured, and by his authority they were sold. He employed agents to make sale of the manufactured materials^ and executed contracts in the name of the company without authorization from any other or higher source. He determined prices at which the materials were sold and fixed the terms of payment. Indeed, so far as the record shows, he exercised absolute authority in these respects. When the contract was first entered into, so far as the facts of the present record disclose his authority, he might have agreed to accept notes in payment of the claim, and, if he had done so, there can be no question that under the general scope of his authority his act would have been binding on his principal. If he had authority to make such a contract in the first instance, why may he not exercise a similar power after the materials have been furnished and the balance remains unpaid ? ' However, all of these things depend upon the general scope of his authority, and this is a question for the jury to determine.

The first, ninth, tenth, eleventh and twelfth assignments of error, except as to the admission of the correspondence between the treasurer and the district manager, which correspondence for reasons hereinbefore stated cannot be admitted in evidence, are sustained. The remaining assignments are overruled.

Judgment reversed and a venire facias de novo awarded.


author: Me. Justice Elkin,

text:
    Carlisle Gas & Water Company v. Carlisle Borough, Appellant.

      Municipalities — Borough—Supply of water and gas — Right to alienate property.

    A borough, or other municipal corporation has the incidental or implied right to alienate or dispose of its property real or personal, of a private nature, held for the emolument and advantage of the municipality, unless restricted by charter or statute.
    A borough which has undertaken to supply water to its inhabitants acts in a private, and not a public capacity.
    A borough which has purchased the stock of a corporation organized to supply the inhabitants of the borough with gas and water, may sell such stock, unless prohibited from doing so by charter, or by statute. A provision in the ordinance authorizing the purchase of the stock to the effect that so long as the borough held one-third of the stock, it was to have the right to appoint three managers of the company, in no way operates to prevent an alienation of the stock. Even if it should be held that the borough’s relation with the company was one of partnership, still it would have the right of a partner to dispose of its interest, subject to the rights, liabilities and equities of the partnership.
    Argued April 29, 1907.
    Appeal, No. 13, Jan. T., 1907, by-defendant, from decree of C. P. Cumberland Co., March T., 1906, No. 1, on bill in equity in case of Carlisle Gas & Water Company and Jacob Livingston v. Carlisle Borough.
    Befoi’e Mitchell, O. J., Fell, Mestrezat, Potter and Elkin, JJ.
    Reversed.
    Bill in equity for an injunction.
    The facts are stated in the opinion of the Supreme Court.

      Error assigned was in awarding an injunction to restrain the sale of stock of the Carlisle Gas & Water Company owned by the borough of Carlisle.

      S. B. Sadler and D. M. Graham, for appellant.
    The fractional proportion of stock owned by the borough is not held for a public trust: Penn Iron Co. v. Lancaster, 25 Pa. Superior Ct. 478 ; Western Saving Fund Society v. Philadelphia, 31 Pa. 185; Baily v. Philadelphia, 181 Pa. 594; Brumm’s App., 22 W. N. C. 137; Jolly v. Monaca Borough, 216 Pa. 315; Grant v. City of Erie, 69 Pa. 420; Carr v. Northern Liberties, 35 Pa. 324.
    A municipality may sell unless expressly forbidden : Terre Haute v. Terre Haute Water Works Co., 94 Ind. 305; Newark v. Elliott, 5 Ohio St. 113; La Grange, etc., R. R. Co. v. Rainey, 47 Tenn. 420; Collner v. Greig, 137 Pa. 606; Brown v. Beecher, 120 Pa. 590; McCarty v. Emlen, 2 Hall. 277.

      John Hays, of Hays <& Hays, for appellees.
    The relation was a contractual one : Carlisle Gas & Water Co. v. Carlisle Water Co., 182 Pa. 17; Norristown v. Citizens’ Pass. Ry. Co., 118 Pa. 87.
    The combination of the borough and the company cannot be arbitrarily ended by either : Philadelphia & Reading R. R; Co. v. River Front R. R. Co., 168 Pa. 357.
    June 3, 1907 :
   Opinion by

Me. Justice Elkin,

This is an appeal from the decree of the court below making permanent an injunction to restrain the appellant borough from making sale of the shares of the capital stock held by it in the appellee company. The appellant was created a borough by special act of assembly April 13, 1782, 2 Sm. L. 17, and became subject to the provisions of the general borough act of April 3, 1851, P. L. 320, in the manner provided by law. The appellee company was incorporated by the special act of April 19, 1853, P. L. 578, under which its powers, duties and privileges are defined. It had an authorized capital stock of $100,000, but at the time of its organization by agreement only $75,000 of this amount was to be issued. Twenty-five thousand dollars of the original stock were subscribed and paid for by the appellant, and the remaining $50,000 were either taken, or authorized to be taken, by individuals. The twelfth section of the act authorized the borough in its corporate capacity to subscribe for any number of shares of stock in the appellee company it might choose to take, and in the event that it was concluded to take one-third or more of the capital stock it was provided that the town council should have the right to annually appoint three managers out of a total of nine, the number fixed by the statute. The borough through its town council at a meeting held June 2, 1853, passed an ordinance authorizing and directing the president of council to subscribe for 1,000 shares of the capital stock of the par value of $25.00 each, upon the terms and conditions stipulated in the charter, and a bond issue to. raise the money was provided for. In the fourth section of the ordinance it was stated that the action of council was predicated on the understanding that not more than $75,000 of the whole capital stock should be issued, so that the subscription made by the borough shall amount to one-third of the actual capital stock issued in order that it should not be deprived of its right to appoint three managers on the board. The borough now desires to sell the shares of stock held by it, and has provided by ordinance that said stock shall be advertised for sale, and that written proposals for the purchase of the same in whole or in part be received and considered at a special meeting of council atva time therein designated.

* It was successfully contended by appellee in the court below that the borough could not divest itself of ownership of its stock by sale or otherwise, because it was held by the learned judge, sitting as a chancellor, that by the original act of incorporation and the ordinance authorizing the borough to subscribe for stock in pursuance thereof, a contractual relation was created between the parties, and that a sale by the borough of its holdings would- be in violation of that relation. It is evident the decision was based upon the understanding of the learned jurist who heard the case of the legal effect of the opinions delivered by this court in Carlisle Gas & Water Company v. Carlisle Water Company, 182 Pa. 17, and Carlisle Gas & Water Company v. Carlisle Water Company, 188 Pa. 51. The rules laid down in these and other water company cases are now settled law and will not be disturbed, but there is no reason, legal or equitable, why the doctrine of those cases should be extended so as to include collateral matters not necessary to their decision. It is conceded, as it must be, that the issue involved in this proceeding was not considered nor determined in those cases. It was argued in the latter case that the borough had a right to sell its stock at a fair price, but Mr. Justice Dkan, who delivered the opinion, said this question was not raised and would not- be answered. The exact question, therefore, raised by this appeal is before this court for the first time and will be so treated. It is familiar law that a borough, or other municipal corporation, has the incidental or implied right to alienate or dispose of its property, real or personal, of a private nature, held for the emolument and advantage of the municipality, unless restricted by charter or statute: Brumm’s Appeal, 22 W. N. C. 137; Baily v. City of Philadelphia, 184 Pa. 594. In a late decision of this court it was expressly held that a borough which had undertaken to supply water to its inhabitants acted in a private and not a public capacity : Jolly v. Monaca Borough, 216 Pa. 345. If the supply of water, as in the case last cited, or the supply of gas, as in Baily v. Philadelphia, 184 Pa. 594, by the municipality is construed to be the act of the borough or city as a business corporation and of a private nature, with what reason can it be said, or upon what authority asserted, that the act of a private corporation, as in the present case, in supplying water for the same general purpose is of a public nature ? To state the proposition is to answer it. Of course, the act of the private corporation, as of the municipality, is of a private nature.

We come now to the consideration of the question whether the right of alienation was restricted by statute or contract. There is no such restriction in the general borough act of 1851, nor is there any provision in the act of 1853 which in express terms, or by necessary implication, limits the right of stockholders, individual or municipal, to alienate their stock holdings. On the other hand, the.right of stockholders to sell their stock is expressly recognized in sec. 5, -and the method of making transfers thereof is therein provided. By this section it is made the duty of the board of managers to procure certificates of stock, to be signed by the president and treasurer with the corporate seal attached, and then delivered to each stockholder, who shall have the right to transfer the same at pleasure. There is not even a suggestion of a limitation upon the right to sell, but the express power so to do is conferred in the act creating the corporation. It is argued that this only applies to the shares held by individual stockholders, and not to those owned by the borough. But it is not so written in the law, and there is nothing within the four corners of the act to warrant such a conclusion. Why should there be ? Here was a private corporation about to engage in an enterprise for the emolument of its stockholders and the advantage of the borough and its inhabitants. It needed money to accomplish its corporate purpose. Evidently a sufficient amount could not be secured by private subscription, and the legislature authorized the borough to become a subscriber. It did so, and received a certificate for the shares of stock purchased. These shares are the private property of the borough, which it has the right to alienate when proper municipal authority so to do has been given, just as the individual shareholder may sell and transfer his stock. When a municipal corporation engages in things not public in their nature it acts as a private individual, and is as much bound by its engagements as a natural person : Western Saving Fund Society v. City of Philadelphia, 31 Pa. 185. If it acts as an individual in acquiring the stock, it may as an individual dispose of it. The right to acquire, there being no statutory restriction as to alienation, includes the incidental power of sale.

It thus appearing that there is no provision in the general borough act of 1851 or in the act of 1853, providing for the incorporation of the appellee company, denying the right to sell the stock for which the borough was authorized to subscribe, the only remaining question to be determined is whether by contract the appellant borough has denied itself this right. It is contended for appellee that section four of the ordinance of. June 2, 1853, providing that the capital stock of the water company shall not exceed $75,000 so that the subscription of the borough shall amount to the one-third thereof in order that the borough shall not be deprived of its right to name three managers, was in the nature of a contract, which in legal effect must be held to mean that the borough thereby covenanted not to sell its stock, but to always hold the same for the purpose of securing its representation on the board of managers. The ordinance cannot by any reasonable construction be held to mean this thing. At most it was only a convenient and equitable arrangement, sanctioned by the legislature, for the purpose of securing sufficient representation on the board in order that the rights of the borough should be properly protected. Again, in the section of the ordinance relied on to sustain the contention of appellee, it is expressly provided that nothing therein contained shall be so construed as to prevent the borough from making any modification or alteration which it may afterwards deem just and reasonable to make. The water company was therefore notified in the ordinance itself that the arrangement for representation was subject to modification and alteration by the borough. With what reason, therefore, can it be argued that this arrangement was to continuously and permanently restrict the right of the borough to modify or alter that relation when it is otherwise provided in the ordinance ? The legal effect of the ordinance was that so long as the borough held one-third of the capital stock it was to have the right to annually appoint three managers of the company. But this right only existed so long as the stock was held by the borough. If at any time the borough chose to exercise its undoubted right to sell its stock, it could no longer exercise the power of appointment, and the somewhat peculiar relation thus established would terminate. There were no provisions in the acts of assembly, nor in the ordinance, to prevent an alienation by the borough of its shares of stock: Terre Haute v. Terre Haute Water Works Co., 94 Ind. 305; Newark v. Elliott, 5 Ohio St. 113. The suggestion that the relation of the parties established by ordinance was one of partnership and that the stock of the borough must be held in perpetuity, cannot prevail, because if such a relation in contemplation of law did exist and the works and property of the appellee company were so held, the right of a partner to dispose of his interest in the partnership property cannot be questioned, subject, of course, to the rights, liabilities and equities of the partnership : Brown v. Beecher, 120 Pa. 590; Collner v. Greig, 137 Pa. 606. Nor is there any merit in the intimation that injustice.may be done the appellee company or its stockholders if a severance of the relation existing with the borough is permitted, because it has been frequently held by this court that a borough was authorized to adopt one of two methods to supply itself with water, that is to say, it could construct and operate its own works by municipal taxation, or it could contract with a private corporation to construct works and supply water. It was also decided that both methods could not be in operation at the same time, the' selection of one being within the meaning of the law the rejection of the other method so long as the first continued the supply according to law: Wilson v. Rochester Borough, 180 Pa. 509; Welsh v. Beaver Falls Borough, 186 Pa. 578; Carlisle Gas and Water Co. v. Carlisle Water Co., 188 Pa. 51. Under the rule of these cases, the appellant borough having already exercised its power by entering into a contract with the appellee company for its water supply, it cannot adopt any other method, or contract with any other company so long as appellee continues to supply water according to law.

The opinion of the learned judge who heard the case in the court below is an able and exhaustive presentation of his view of the law, as applied to the facts of this case, but in our opinion a wrong conclusion was reached and cannot be sustained.

Decree reversed and injunction dissolved at the cost of the appellee.