author: Mb. Chief Justice Mitchell,

text:
    Nanticoke Suburban Street Railway Company, Appellant, v. People’s Street Railway Company of Nanticoke and Newport.

      Street railways—Municipal consent—Reasonable time—Act of June 7, 1901, sec. 1, P. L. 514.
    Under the Act of June 7, 1901, sec. 1, P. L. 514, which requires that “the consent of the local authorities shall be promptly applied for, and shall have been obtained within three years from the date of the charter,” the question as to what is a reasonable time always depends upon the circumstances. The statute fixes two years as reasonable time for obtaining consent, and prima facie any application long enough beforehand to afford fair opportunity to the municipality to consider and act upon it within the two years would comply with the statutory requirement. But on the other hand, the intent of the statute is to push forward the work, not to hold it in abeyance, and the courts are at liberty at all times to inquire into the delay for the purpose of ascertaining whether the intention is to make an effort in good faith to get consent, or merely to shut out rival competitors as long as possible.
    If municipal consent has been promptly applied for, the want of it cannot be taken advantage of in any way to the prejudice of the company until the two years’ limit has expired; and the company notwithstanding a refusal of the municipality, is entitled to the full period to overcome objections.
    Where a street railway company has within a reasonable time applied for municipal consent, but such consent has not been given, and another company has filed extensions over the route of the first company, such company has the right, if the first company fails to obtain the municipal consent within two years from the date of its charter, to step into its place, and maintain the extensions.
    Argued April 10, 1905.
    Appeal, No. 145, Jan. T., 1904, by plaintiff, from decree of C. P. Luzerne Co., May T., 1904, No. 3, dissolving preliminary injunction in case of Nanticoke Suburban Street Railway Company v. People’s Street Railway Company of Nanticoke and Newport.
    Before Mitchell, C. J., Fell, Mestrezat, Potter and Elkin, JJ.
    Affirmed.
    Bill in equity for an injunction.
    On a motion to continue the preliminary injunction Wheaton, J., found the following facts which were agreed to in this court:
    The plaintiff company was incorporated February 18, 1904, under the Act of May 14, 1889, P. L. 211, and the amendments thereto.
    The plaintiff company has made no attempt, as yet, to secure municipal consent to occupy said streets.
    The defendant company was incorporated September 27, 1892, under the act of May 14, 1889, and its supplements.
    It was chartered to build and operate a street railway from Nanticoke borough along some of the streets thereof (designated in the charter) to the village of Glen Lyon, in Newport township, and has operated a street railway on said line since November 23, 1895.
    December 10, 1903, two months and eight days before plaintiff’s charter was granted, the defendant company, by resolution of its directors, duly resolved to extend its line of railway over and upon certain designated streets and roads of the borough of Nanticoke, which resolution was duly recorded in the office for recording deeds, etc., in and for Luzerne county, on December 19,1903, in charter book No. 6, page 88, etc., and a duly exemplified copy of said record was filed in the office of the secretary of the commonwealth on December 24, 1903.
    On December 23, 1903, the borough council of the borough of Nanticoke passed an ordinance authorizing and giving municipal consent to the defendant company to use and occupy the streets named in said extension resolution with its railway, which said ordinance was duly signed by the burgess of said borough, December 24, 1903, and entered and signed in the ordinance book of said borough before January, 15, 1904.
    Among the streets thus covered by the extension proceedings and municipal consent, are nearly all of the streets after-wards set out in plaintiff’s charter.
    About March 28, 1904, the defendant company began the construction of its said extension and had constructed about 300 feet on Green street when the preliminary injunction was granted.
    Further progress of construction will bring defendant to one of the disputed streets at the next street corner.
    A third street railway company, the second in point of date of incorporation, named the Nanticoke and Hanover Street Railway Company, was incorporated February 11, 1902, under the act of May 14, 1889, and the amendments thereto, and the streets, highways and bridges upon which this company was authorized to lay and construct its railway, and which formed the circuit of its route, were, inter alia, the same as some of those upon which the defendant company seeks to extend, and the same as those upon which the plaintiff company now claims a chartered right.
    February 3, 1903, the Nanticoke and Hanover company sought the consent of the-local authorities of Nanticoke—-the borough council—to occupy, etc., the streets named in its charter.
    February 19, 1903, an ordinance to grant the franchise sought was defeated on third reading by the unanimous vote of the councilmen present and voting.
    The franchise sought was afterwards refused by the council twice—once on first reading of the proposed ordinance and once on third reading.
    The final refusal was December 17,1903.
    The municipal consent to occupy the streets, etc., was never given to the Nanticoke and Hanover company.
    The court entered a decree dissolving the preliminary injunction.

      Error assigned was the decree of the court.

      James L. Morris, Thos. D. Shea, John M. Garman and Woodivard, Darling Woodward, for appellants.
    At the time of the filing of the extension proceedings by the appellee, and until the expiration of two years from February 12, 1902,- by her own agreement, the Commonwealth was debarred from making the contract or agreement which the People’s Street Railway Company now sets up as the foundation of her right to build a street railway on some of the streets named in the grant by the commonwealth to the Nanticoke and Hanover Street Railway Company : section 1, Act June 7, 1901, P. L. 514; Homestead Street Ry. Co. v. Pittsburg, etc., Electric St. Ry. Co., 166 Pa. 162; Com. ex rel. v. Uwchlan Street Ry. Co., 203 Pa. 608; Coatesville & Downingtown Street Ry. Co. v. Westchester Ry. Co., 206 Pa. 40.
    The legal effect of the resolution of the People’s Street Railway Company to extend its railway over the streets named in the charter of the Nanticoke and Hanover Street Railway Company, followed by the recording thereof, and the filing in the office of the secretary of the commonwealth of an exemplification of the record, if of any validity or force whatsoever, was to obtain for her a charter, franchise and grant from the commonwealth, and a right to build her road upon these streets, provided the other precedent conditions necessary to her legal and lawful use thereof for these purposes had been fulfilled: Hannum v. Media, etc., Electric Ry. Co., 200 Pa. 44.
    The charter, grant and franchise claimed on behalf of the People’s Street Railway Company by virtue of her extension proceedings, were of no effect and conferred no rights or privileges upon her: Homestead St. Ry. Co. v. Electric St. Ry. Co., 166 Pa. 162; Com. ex rel. v. Ry. Co., 203 Pa. 608.
    A railway company’s right to appropriate streets for air extension of its route depends upon the conditions existing “ at the time of the filing ” of the exemplification. When “ at the time of the filing” of an exemplification an insuperable obstacle to the adoption of the extension exists the extension franchise does not vest: Com. v. Uwchlan St. Ry. Co., 203 Pa. 608.
    The extension proceedings adopted by appellee’s directors on December 19, 1903, were regular on their face. Therefore, when they were presented to the secretary of the commonwealth on December 23,1903, he had no discretionary power as to filing them: In re Pittsburg Rapid Transit Street Railway Company’s Application, 51 Pittsburg L. J. 7; West Chester St. Ry. Co. v. Griest, 27 Pa. C. C. Rep. 427.
    That there should be a clear field for the grant of a charter to another corporation was a condition precedent under the act of 1901. No circumstances could enable the company to avoid this essential prerequisite: In re Rock Glen St. Ry. Co., 10 Pa. Dist. Rep. 592; Butler Street Ry. Charters, 12 Pa. Dist. Rep., 441.
    Municipal consent cannot suffice to create a right to lay a track without being joined to a corporate existence possessing a proper franchise : Barker v. Hartmann Steel Co., 129 Pa. 551.

      Q. A. Grates, John T. Lenahan and Biohard B. Sheridan, for appellee,
    cited : Homestead St. Ry. Co. v. Electric St. Ry. Co., 166 Pa. 162; Musser v. Ry. Co., 5 Clark, 466.

      June 22, 1905:
   Opinion by

Mb. Chief Justice Mitchell,

Understanding from the agreed statement of facts that the disposal of the injunction will really decide the whole controversy and that the parties desire the case to be so disposed of, we waive our usual rule of filing no opinion in cases on preliminary hearing and proceed to consider the main question.

By the agreed statement of facts it appears that the appellant was chartered February 18,1904, that it has no municipal consent, and in fact has not yet applied for it. It has, therefore, no completed title to occupy the streets in controversy, but relies on the claim that the field was clear in February, 1904, and that by its charter at that time it pre-empted the right to occupy the streets, and cannot be interfered with during flie two years given by the statute for obtaining the municipal consent.

A preliminary question is made, whether appellant has lost any of its rights, whatever they were, by laches. The Act of June 7, 1901, see. 1, P. L. 514, requires for even the inchoate exclusive right to occupy the streets, that “ the consent of the local authorities shall be promptly applied for, and shall have been obtained within two years from the date of the charter.” The limit of time permissible under the term “ promptly ” has not been decided, nor is it in the nature of things capable of exact determination by the calendar. In Homestead St. Ry. Co. v. Pittsburg, etc., Electric St. Ry. Co., 166 Pa. 162, under the act of 1889, which did not contain the requirement of prompt application, it was held that the company was entitled to a reasonable time and could not be defeated by a rival company with a later charter which succeeded in getting the municipal consent first. What is reasonable time must always depend upon circumstances. The statute fixes two years as reasonable time for obtaining consent, and prima facie any application long enough beforehand to afford fair opportunity to the municipality to consider and act upon it within the two years would comply with the statutory requirement. But, on the other hand, the intent of the statute is to push forward the work, not to hold it in abeyance, and the courts are at liberty at all times to inquire into the delay for the purpose of ascertaining whether the intention is to make an effort in good faith to get consent, or merely to shut out rival competitors as long as possible. The delay of the appellant in the present case has been considerable, but there is no evidence before us at present to indicate want of bona fide intention to obtain consent. We cannot, therefore, say that appellant has lost any of its rights by laches.

Coming now to the main question, was the field clear when appellant obtained its charter? That depends on the status of the appellee’s charter at that date.

The Nanticoke and Hanover Railway Company obtained a charter on February 11, 1902, and under the act of 1901 it had a prior claim on the disputed streets for two years from that date. But on February 11, 1904, it had not obtained the municipal consent of the borough of Nanticoke, and its rights lapsed. So far as it was concerned, therefore, it dropped out of the case and left the way clear for the appellant on February 18. But prior to the expiration of its limit the appellee, in December, 1903, had passed a resolution to extend its route over the streets in controversy and had obtained the municipal consent. It is argued by appellant that these proceedings were void and wholly inoperative by reason of the prior existing, though inchoate and defeasible, title of the Nanticoke and Hanover Railway Company. That is the only relevancy the latter corporation has to this case.

The Nanticoke and Hanover Railway Company as already said, was chartered on February 11,1902, and, therefore, under the statute, had two years until February 11, 1904, in which to obtain the consent of the borough. It is claimed, however, by the appellee that this right was terminated before the expiration of the two years, by the express and formal refusal of the borough’s consent in February, 1903. This question whether the statutory period in which to procure consent will be shortened or terminated by a positive act of refusal on the part of the municipality, or whether the full period may still be available for an opportunity to overcome objections ” was left open in Coatesville, etc., St. Ry. Co. v. West Chester Ry. Co., 206 Pa. 40. But it was said in that case that for the substantial protection of the franchise granted, “ the time for obtaining the municipal consent was enlarged (by the act of 1901) to the time allowed for building, and made an absolute right. Under this section, if municipal consent has been promptly applied for, the want of it cannot be taken advantage of in anyway to the prejudice of the company until the two years’ limit has expired. ” As we hold in the present case that an application within the two years, will prima facie meet the statutory requirement of promptness, unless the circumstances indicate a want of bona fide intention to obtain consent at all, it must follow that the company, notwithstanding a refusal, is entitled to the full period to overcome objections. There are good reasons why it should be so. Modifications of plans may be proposed, better terms offered and the public wants and convenience, the underlying consideration to the commonwealth for the grant of the franchise, may be more clearly understood. We are of opinion, therefore, that the statutory grant of two-years in which to obtain the municipal consent is not shortened by an earlier refusal.

The remaining question, whether the proceedings by which the appellee extended its route during the two years for which the Nanticoke and Hanover company had the prior and exclusive claim, were so absolutely void that no subsequent acts could give them any A'ulidity, depends on the language of section one of the act of 1901, “ no other charter to build a road on the same streets .... shall be granted to any other company within the time during which the company first securing the charter has the right to commence and complete this work.” Literally this is a positive prohibition of a second charter within two years, and necessarily of what is equivalent, the extension of routes .under prior charters.

But a consideration of the intent of the statute, and the circumstances under which it was passed, is convincing that notwithstanding the positiveness of the language of that provision, it was not intended as a literal and mandatory prohibition under all circumstances. The act of 1901, section one, was a reenactment of the same section in the act of 1889 almost in the same words. As recited in the later act, for the purpose of amendment, it occupies something over a page (at a rough estimate 500 words, P. L. 1901, 514), yet the whole intent of the act and the substantial change of the law were expressed in less than a dozen words. The act of 1889 authorized charters for companies to construct railways on any street “ upon which no track is laid, or authorized to be laid or to be extended, under any existing charter." In re-enacting this section, the Act of 1901 omitted the words “ or authorized to be laid or to be extended,” and substituted the words “ upon which no track is laid under any existing charter, and in constant daily use for the transportation of passengers.” This feature of the act was discussed in Coatesville, etc., St. Ry. Co. v. West Chester Ry. Co., 206 Pa. 40, where it was shown that the act of 1901 took away the protection previously afforded to “ mere paper routes authorized but not built and perhaps not intended to be built but only adopted to close the streets to rival companies.” But for the protection of rights acquired bona fide, and which such cases as Homestead St. Ry. Co. v. Pittsburg, etc., Electric St. Ry. Co., 166 Pa. 162, had shown were liable to certain dangers, the act of 1901 contained the provisions under discussion, giving two years for municipal consent, and prohibiting the grant of any other charter during that period. What is said in Coatesville, etc., St. Ry. Co. v. Ry. Co., 206 Pa. 40, need not be repeated here, but it is in exact line with our present view that the provision as to any second charter is not a mandatory prohibition under all circumstances, but is directory only, for the protection of prior rights, and to prevent the commonwealth from doing a vain thing by the grant of a charter which would be illusory and misleading. But if the circumstances show that the act would not be vain, as for instance if the first company had within the two years abandoned its route, or in any way the rights had ceased which the statute was designed to protect, the prohibition would no longer have any purpose to serve and might be disregarded. So also it is to be remembered that the main intent of the act was to abolish the exclusive prior claim over merely authorized routes, intended only to close the streets to others, and that its policy was to facilitate the development of transportation in the public interest. Bearing in mind also the fact that the first company’s title, while prior and exclusive, was conditional on consent, etc., and therefore incomplete and defeasible, and that the time limit is in the public interest, it is entirely in accord with the intent and policy of the statute, that a second company should be allowed to put itself, so far as practicable, in position to step into the place should the failure of the first leave it vacant. Of course the presumption is in favor of the first charter, and nothing can be permitted to be done to interfere with it, by seekers after a second place. The statute prima facie prohibits a second charter during the running of the first, and should one for any reason be issued it will be set aside on quo warranto, as in Com. ex. rel. v. Uwchlan St. Ry. Co., 203 Pa. 608. But where the first lapses, the newcomer, next in position may step into its place.

When the appellee started its proceedings to extend its route, the two years allowed the Nanticoke and Hanover company were nearing the close, and the borough of Nanticoke had twice refused consent. While there was still time for a possible change of the municipal mind, yet the presumption was that consent would not be given, and that the Nanticoke-and Hanover charter would fail. There is nothing in the circumstances, therefore, to impugn the good faith of the appellee, and when the prior charter did in fact lapse the appellee was first in the field.

Appeal dismissed.


source: Caselaw Access Project

author: Mr. Justice Potter,

license: Public Domain

text:
    Pauksztis, Appellant, v. Raeder Blank Book, Lithographing & Printing Company.

      Bailment—Contract—Agreement to insure—Custom of trade—Corporation.

    In an action against a corporation engaged in the business of bookbinding, to recover damages for the loss of books delivered to the corporation to bind, but destroyed by fire, evidence is admissible that the manager of the corporation agreed as a part of the contract of bailment to insure the books against loss by fire, and that there existed a general custom of bookbinding establishments to insure the property of patrons left with them for binding. It is reversible error to reject such evidence.
    Argued April 12,1905.
    Appeal, No. 370, Jan. T., 1904, by plaintiffs, from judgment of C. P. Luzerne Co., Jan. T., 1901, No. 431, on verdict for defendant in case of Joseph J. Pauksztis and Charles Brazis, trading as Jos. J. Pauksztis & Co. v. The Raeder Blank Book, Lithographing & Printing Company,
    Before Mitchell, C. J., Brown, Mestbezat, Potter and Elkin, JJ.
    Reversed.

      Assumpsit for goods delivered on a contract of bailment, and destroyed by fire. Before Ferris, J.
    The facts are stated in the opinion of the Supreme Court.

      Errors assigned were various rulings on evidence referred to in the opinion of the Supreme Court.

      Paul J. Sherwood with him William W. Reynolds, Jr., for appellant.
    Evidence of custom to insure is admissible: Hamilton v. Moore, 94 Ga. 707 (19 S. E. Repr. 993); Gordon v. Little, 8 S. & R. 533; Adams v. Pittsburg Ins. Co., 95 Pa. 348; Helme v. Ins. Co., 61 Pa. 107; Siter v. Morrs, 13 Pa. 218; Kelton v. Taylor, 79 Tenn. 264; Brown v. Hitchcock, 28 Vt. 452; Pittsburg v. O’Neil, 1 Pa. 342; Needy v. R. R. Co., 22 Pa. Superior Ct. 489; McMasters v. Penna. R. R. Co., 69 Pa. 374; Carter v. Coal Co., 77 Pa. 286; Silliman v. Whitmer & Sons, 11 Pa. Superior Ct. 243; Allam v. R. R. Co., 183 Pa. 174; Jacobs v. R. R. Co., 19 Pa. Superior Ct. 13; Boorman v. Jenkins, 12 Wend. (N. Y.) 566; McKeefrey v. Connellsville Coke & Iron Co., 56 Fed. Repr. 212.
    Even if a bailee were not otherwise responsible, he may make himself liable by express undertaking. The undertaking to insure was within the province of the defendant, and hence within the authority of its general manager: Tower v. Supply & Storage Co., 159 Pa. 106; Thomas v. Cummiskey, 108 Pa. 354; Smith American Organ Co. v. Abbott, 11 Pa. C. C. Rep., 319; Hoy v. Holt, 91 Pa. 88; Express Co. v. Schlessinger, 75 Pa. 246; Dixon v. Breon, 22 Pa. Superior Ct. 340; Tanner v. Oil Creek R. R. Co., 53 Pa. 411.

      B. R. Jones, with him Thomas II. Atherton, for appellee.
    A bailee in the absence of a special agreement is not an insurer of the chattel intrusted to his care and is not responsible for losses resulting from dangers necessarily incident to its use, nor from inevitable accidents or irresistible force: Story on Bailments, sec. 25; Woodruff v. Painter & Eldredge, 30 W. N. C. 396; Second Nat. Bank of Erie v. Smith, 8 Phila. 68; First Nat. Bank of Carlisle v. Graham, 79 Pa. 106; Zell v. Dunkle, 156 Pa. 353; Walton v. Colwyn Borough, 19 Pa. Superior Ct. 172,

      The bailee in the present ease not having insured plaintiffs’ property, the bailor attempted to charge the bailee with want of ordinary care by endeavoring to show that it was the general custom among establishments carrying on the same line of business as the defendant company to insure their patrons’ goods. No authority has been found in Pennsylvania for any proposition of that kind and none has been cited by appellants: Dempsey v. Dobson, 184 Pa. 588; Collins v. Mechling, 1 Pa. Superior Ct. 594; Hamilton v. Moore, 94 Ga. 707 (19 S. E. Repr. 993); Ambler v. Phillips, 132 Pa. 167; Weld v. Barker, 158 Pa. 465 ; Corcoran v. Chess, 131 Pa. 356.
    June 22, 1905:
   Opinion by

Mr. Justice Potter,

As stated in the charge of the court, the undisputed evidence in this case shows that the defendant company is, and was in 1900, a corporation-engaged in the business of printing, bookbinding and lithographing. The plaintiffs had dealt with the defendant company for some years. About July, 1899, the defendant company moved its plant, from one location to another, together with the goods and materials belonging to its customers in its possession, including some material belonging to plaintiffs. J. W. Raeder was in the same business individually before the defendant company was incorporated; and after-wards he was a stockholder, director and manager of the business. It is also conceded that he was the authorized agent for the purpose of making contracts relating to the general printing, bookbinding and lithographing business of the company. It appears that on or about August 24, 1900, a wagon was sent by Mr. Raeder to the plaintiffs’ place of business together with a letter authorizing and requesting the plaintiff to deliver to the driver of the wagon, for cartage to the defendant’s factory, the sheets or forms of printed matter which plaintiffs then had on hand and which were to be folded, stitched and covered by the defendant company with covers to be furnished by the plaintiffs pursuant to a contract previously entered into between them. A quantity of such material was delivered by the plaintiffs to the driver and by him hauled to the defendant’s place of business, and there received and placed.in the storeroom.

On November 1,1900, a disastrous fire occurred, having been started by an explosion of gas under tbe boiler in the basement of the building occupied by the defendant, and by this fire the manufacturing plant and stock were damaged and in great measure destroyed. All the material of the plaintiffs then in the'custody of the defendant, for the purpose of being bound into books, was also totally destroyed by this fire and was uninsured either by the plaintiffs or the defendant.

There was evidence upon the part of the appellant, that Raeder, for the defendant company, solicited the business from the plaintiff, and that he stated as part of the inducement, that he had insurance, which would cover the goods. In the language of the witness, speaking of this conversation with Raeder, “ He says, I got insurance ; customer insurance, which will cover yours. I told him if you agree to have insurance (on) our goods, I give a job.”

The trial judge instructed the jury that the procuring of insurance upon the goods of customers left in the care of the defendant company was not incidental to the business of binding, and that even if the agent and manager did agree to procure insurance for the goods and material of this plaintiff, it was beyond his authority and the defendant company would not be bound by it. He therefore gave binding instructions in favor of the defendant. This is assigned for error, as is also the refusal to permit proof that the general custom of the business was to carry insurance to protect the property of customers, upon the premises, and that a failure to do so was lack of due care. We think that the evidence to show that it was the general custom of bookbinding establishments to insure the property of patrons left with them for binding, should have been admitted. It was the duty of the defendant company to take every reasonable precaution for the preservation and safety of the property of plaintiff while it was in its possession under the contract of binding. “ Whatever a diligent man would deem necessary under any given circumstances for the preservation of his own property, must be done by the individual or corporation that undertakes for hire, the preservation of property for the public: ” Willey v. Allegheny, 118 Pa. 490. Proof that it was customary in the business to insure the property of customers, against fire, would be of importance in determining whether the defendant had used due care in this instance. But certainly if there was a special agreement to provide insurance, the defendant would be bound by it. We have no hesitation in saying that if Raeder, the manager, did agree to procure insurance, his agreement was binding upon the company. At this day the use of insurance to protect property against fire, is so common, that it cannot be considered as being beyond the scope of an agreement for the storage and safe keeping of property, left to be worked upon. The danger of fire was only incidental, and the procuring of insurance is the modern and most effective way of guarding against that risk. If there was an agreement, made by Raeder, to procure insurance, it would be as much in the course of the business and as much an incident thereof, as the protection of the material against the weather or against robbery. The first, second, third and fourth assignments of error are sustained, the judgment is reversed, and a venire facias de novo is awarded.


text:
    Hudson Coal Company v. Ogden, Appellant.

      Contract—Taxation—Special tax—Conveyance of coal.

    Where a corporation purchases coal property from another corporation under an agreement that it is to be free from any and all claims or liabilities whatsoever of or against the selling company “ or said property at the date of such transfer,” a special tax ordered by the court to pay a debt incurred by the township in which the property was situated, prior to the transfer, is a liability against the property which the selling corporation must pay under its .contract. The liability for the special tax is fixed by the decree of the court, and is effective from the date of the decree, although the collection of the tax was for a time suspended by an appeal to a higher court.
    Argued April 12, 1905.
    Appeal, No. 372, Jan. T., 1904, by defendants, from judgment of C. P. Luzerne Co., May T., 1904, No. 805, for plaintiff on case stated in suit of the Hudson Coal Company v. Joseph W. Ogden, Gustav E. Kissel and Leslie S. Ryman, executor of W. P. Ryman, deceased.
    Before Mitchell, C. J., Brown, Mestrezat, Potter and ■Elkin, JJ.
    Affirmed.

      Case stated to determine liability for a tax.
    The opinion of the Supreme Court states the case.

      Error assigned was judgment on case stated.

      S. J. Strauss, for appellants.

      Q-eorge B. Bedford, with him Paul Bedford and Andrew H. McQlintock, for appellee.
    June 22, 1905 :
   Opinion by

Mr. Justice Potter,

On April 18, 1902, the Hudson Coal Company purchased the property of the Algonquin Coal Company, under an agreement that it was to be “ free from any and all claims or liabilities whatsoever of or against the said Algonquin Coal Company, or said property at the date of such transfer,” etc. It appears that an indebtedness upon the part of the township in which the property was situated had been incurred, and was a liability against the township, prior to January 24, 1902. But on that day the court, by its decree, ordered a special tax, and directed that within twenty days the commissioners should prepare duplicates for a levy of eighteen mills upon the aggregate assessed valuation of the said township, to pay the indebtedness. The valuation of the property was afterwards reduced by the county commissioners, and it became necessary to increase the rate of the levy to produce the same amount by taxation. We agree with the court below that the liability of the taxable property in the township, for' the payment of the indebtedness was fixed, by the decree of the court, on January 24, 1902. This was a special tax which could, only be authorized by the court. For the ordinary and current expenses the township commissioners may levy taxes. But in this case the liability for the special tax was fixed by the decree of the court, and the duties of the township commissioners in collecting the tax were ministerial. They had no discretion in the matter, but were bound to carry out the order of the court. It is true that by the appeal to the higher courts the collection of the tax was for the time being suspended, but the assessment which had been made under the direction of the court was not suspended; and when the appeal was determined the final judgment had relation to the date of the original decree. The decree of 1903 was supplemental to that of 1902, and levied the same tax in its amount. We are not, however, so much concerned as to whether or not the decree of January 24, 1902, was technically the assessment of a tax; it is sufficient that its effect was to fix in terms the liability of the township, and of the property therein, for the payment of the indebtedness which had been created before that time. Under the terms of the agreement of sale the purchaser was to have the property for the price named, free and clear of all incumbrances, except those enumerated. And this liability for taxes, which was liquidated and fixed by the decree of January 24, 1902, was, we think, clearly a liability upon the property of the Algonquin Coal Company, at the date of the transfer, and as such was under the terms of the agreement, to be paid by it.

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


author: Mr. Justice Elkin,

text:
    Keiser, Appellant, v. Lehigh Valley Railroad Company.

      Negligence—Railroads—Running behind schedule time—Speed—Signals— Evidence—Grade crossing.

    It is not negligence for a railroad company to run a passenger train after midnight, twenty-five minutes behind its schedule time.
    It is not negligence for a railroad company to run a fast passenger train in the nighttime over a country crossing at the rate of thirty-five miles an hour.
    Where the exact rate of speed of a train shown by its schedule and fixed by the train record made by the conductor at the time shows a rate of thirty-five miles an hour, the court will consider of no value the testimony of a witness who states that the train was running very fast, but does not state how fast, nor fix any standard by which the speed of the train could be ascertained.
    In a railroad grade crossing accident case, the negative testimony of nine witnesses that they did not hear the whistle blown nor the bell rung on a stormy and windy night, amounting only to a scintilla, cannot prevail against the overwhelming and positive testimony of fourteen witnesses, which conclusively established the fact that these duties were performed. In such a case the trial judge is warranted in giving binding instructions to the jury to return a verdict in favor of the defendant.

      Argued April 13, 1905.
    Appeal, No. 99, Jan. T., 1905, by plaintiff, from judgment of C. P. Luzerne Co.; Feb. T., 1903, No. 188, on verdict for defendant in case of Mattie E. Keiser v. The Lehigh Valley Railro'ad Company.
    Before Mitchell, C. J., Brown, Mestrezat, Potter and Elkin, JJ.
    Affirmed.
    Trespass to recover damages for the death of plaintiff’s husband. Before Ferris, J.
    The facts are stated in the opinion of the Supreme Court.
    The court gave binding instructions for defendant.
    Verdict and judgment for defendant. Plaintiff appealed.

      Error assigned was in giving binding instructions for defendant.

      Paul J. Sherwood, for appellant.
    It is the duty of those in charge of a train to give notice, by whistle or ringing the bell or other device, to warn of their approach, and if they do not they are negligent: Haverstick v. R. R. Co., 171 Pa. 101; Longenecker v. R. R. Co., 105 Pa. 328; Newhard v. R. R. Co., 153 Pa. 417; R. R. Co. v. Ogier, 35 Pa. 60.
    The presumption that the trainmen of a railroad company performed their duty when a train approaches a grade crossing may be overcome by the testimony of a single witness for the plaintiff that no whistle was sounded or bell rung, if the defendant offers no evidence on the subject: Haverstick v. R. R. Co., 171 Pa. 101.

      J. B. Woodward, of Woodward, Barling £ Woodward, for appellee.
    June 22, 1905:
   Opinion bt

Mr. Justice Elkin,

The plaintiff in her statement of claim charged the defendant company with negligence in running the train which caused the accident, at an unusual time, and excessive rate of speed, and without giving due warning of its approach to the crossing. The appellee cannot be held liable in damages unless it affirmatively appears from the evidence that there was negligence in some or all of these respects. What does the evidence disclose?

The train was running after midnight about twenty-five minutes behind its schedule time. This is neither unusual nor exceptional, and is not negligence within the meaning of the law so as to make,the defendant liable in damages. Nor does the testimony show that the train was running at an excessive rate of speed. The witnesses of the appellant did not fix the rate of speed.. It is true one witness testified that the train was running very fast, but inasmuch as he did not say how fast, nor fix any standard by which the speed of the train could be ascertained, his testimony is without value in this respect. The exact rate of speed shown by the schedule and fixed by the train record made by the conductor at the time showed the rate of speed to be a little over thirty-five miles an hour. It was a fast passenger train with two locomotives, and this rate of speed is not excessive for such a train. It is clear, therefore, that the appellant failed to establish her allegations of negligence that the train was running at an unusual time or at an excessive rate of speed.

The only question left for us to consider in reference to the alleged negligence of the defendant is whether through its employees it failed to give due warning of the approach of the train to the crossing. The appellee contends that it performed its duty in this respect by providing headlights, for its engines, by ringing the bell and blowing the whistle at the proper places before reaching the crossing where the accident occurred. The appellant contends that these signals were not ■given. There is no serious dispute about the headlights. The evidence shows that they were lighted and in their proper places. The appellant undertook to show that the whistle was not blown nor the bell rung. Nine witnesses testified that they did not hear the bell ring nor the whistle blow. The testimony of all of these witnesses was negative in character, and cannot prevail against the positive and conclusive testimony of the appellee, which clearly showed these duties to have been performed. This case comes under the rule stated by Mr. Justice Paxson in Urias v. Pennsylvania Railroad Company, 152 Pa. 326, wherein it is said : “ One witness who hears the ringing of a bell is worth more than the testimony of a dozen witnesses who did not hear it, unless in some manner their attention had been especially called to it. The witness who heard the bell either tells the truth, or he tells a deliberate and wilful falsehood, while the witness who did not hear the bell may be, and is probably truthful. The bell may be rung or the whistle blown without attracting the attention of persons who are familiar with such sounds.” In Culhane v. New York Central, etc., Railroad Co., 60 N. Y. 133, the following rule is stated: “ A mere, ‘ I did not hear ’ is entitled to no weight in the presence of affirmative evidence that the signal was given, and does not create a conflict of evidence justifying a submission of the question to the jury as one of fact.”

While our cases have not stated the rule so broadly as the New York case cited, yet this court has frequently said that where the negative testimony amounts only to a scintilla, a jury cannot be allowed to disregard the positive and conclusive testimony which establishes-the controverted fact. The presumption is that the trainmen of a railroad company perform their duty in these respects when a train approaches a crossing: Pittsburg, etc., Railway Company v. Dunn, 56 Pa. 280. In the case at bar, in 'addition to the presumption that the trainmen performed their duty, the defendant produced fourteen witnesses who testified in the most positive terms that the signals were given at the proper places before the train reached the crossing. The engineer who blew the whistle and started the automatic ringer, the engineer of the second engine whose duty it was to listen for the signal so that if the first engineer failed or neglected to blow the whistle it was his duty to do so, the man who was pulling the rope that rang the bell, the man sitting in the cab and on whose shoulder the bell rope rubbed every time it was pulled, and ten other witnesses whose duty it was to watch for these signals, all testified in positive terms that these signals were given. Of the nine witnesses produced by the plaintiff and who testified that they did not hear the signals, one was shut up in a water tank, another in a boiler house, another in a dwelling house near the switch about 2,200 feet from the whistling post shut off by an, intervening hill, another was in an engine house, another in a caboose of the freight train nearly half a mile away, another stood near the water tank close to the passing freight train, and none of them had any duty to perform which called their attention to the signals. The night was stormy, liigb winds were blowing, and the weather conditions such as to make it difficult for these witnesses to hear the signals. Under such circumstances, the negative testimony of these witnesses amounted only to a scintilla, and must give way to the overwhelming weight of the positive testimony produced by the defendant.

In Lonzer v. Lehigh Valley Railroad Co., 196 Pa. 610, this court said: “ The verdict should have been set aside as in direct disregard of the evidence, and where that is the case, the court may refuse to submit it at all and direct a verdict accordingly.” Under these circumstances the learned court below was justified in refusing to submit the question to the jury and in saying that the plaintiff had failed to establish the negligence complained of. This view of the case being conclusive of the questions involved in this controversy, it is unnecessary to discuss the alleged contributory negligence of the appellant.

Judgment affirmed.


text:
    Shellenberger v. Altoona & Philipsburg Connecting Railroad Company et al., Appellants.

      Corporations—Railroads—Bonds—Fraud—Act of May 7, 1887, P. L. 94, sec. 3.
    The presumption is that holders of negotiable railway bonds are bona fide holders for value, but if fraud in the inception of the bonds is shown, the holder, to be entitled to protection as a bona fide holder, must show that he is such; his mere possession of the bonds is insufficient.
    Where bonds of a corporation have been illegally issued and have been pledged for a debt, the amount of which is much less than the face value of the bonds, stockholders of the corporation who have knowledge of the illegality of the bonds, and the circumstances under which they were pledged, cannot, after they have purchased the bonds from the pledgee for substantially the amount required for their redemption, recover from the corporation more than the amount thus paid.

      Equity—Equity practice—Multifariousness—Demurrer—Answer.

    Objection that a bill in equity is multifarious must be raised by demurrer before answer filed.
    Argued April 17, 1905.
    Appeal, No. 166, Jan. T., 1901, by defendants, from decree of C. P. Clearfield Co., Sept. T., 1903, No. 5, on bill in equity in case of W. L. Shellenberger et al. v. Altoona & Philipsburg Connecting Railroad Company, The Union Trust Company (now intervening plaintiff), The Philipsburg, Johnstown, Ebensburg & Eastern Railroad,Company, The New York & Pittsburg Central Railroad, and Samuel P. Langdon.
    Before Dean, Brown, Mestrezat, Potter and Elkin, JJ.
    Reversed.
    Bill in equity to foreclose a mortgage. Before Love, P. J.
    The court’s findings of fact and conclusions of law were in part as follows:
    We find that the Altoona & Philipsburg Connecting Railroad Company was duly incorporated and organized July 11, 1892. That it executed its mortgage in due form of law, June 1, 1893, to secure the bonds of the said company in the sum of $400,000, said bonds being of the denomination of $1,000 each. That said mortgage was executed and delivered to the Union Trust Company, of the city of Philadelphia, as trustee. That said Union Trust Company assumed the trust at once and duly certified 330 of said bonds and delivered 299 of them to the said railroad company, or its president and manager, at that time Samuel P. Langdon. That the said mortgage is a first lien upon said railroad, its franchises, rolling stock, cars and equipments, as described therein, and that it also pledges the net resources and income derived from the operation thereof to the payment of said bonds and interest thereon as the same mature. In case of default in payment of interest for a period of six months, then, upon the request of one half the holders of the bonds outstanding and unpaid, upon written notice to said railroad company, the principal and interest of all bonds intended to be secured by said mortgage shall become due and payable. That fifteen of the said bonds were sold to the following named holders thereof: One to W. L. Shellenberger, four to W. S. Lee, two to S. J. Westley, one to W. J. Heinsling, five to John Loudon estate and three to Wm. Lou-don estate, avTio are the present holders and owners thereof. Thirty-one of the bonds are held as security for certain advances and liabilities incurred on behalf of said Altoona & Philipsburg Connecting Railroad Company by the said Union Trust Company, the cash balance due being a debt due the trust company of $175 and a probable liability of $5,500.
    Two hundred and seven of said bonds, together with most of the stock of said railroad company, had been placed as collateral, with certain notes, in the hands of George Philler, who had advanced large sums of money thereon. The notes were not paid, and Samuel P. Langdon, who had placed the bonds as collateral, was duly notified by Mr. Philler that he would sell the bonds, under the collateral agreement, and he did sell, through lion. D. L. Krebs, who conducted the negotiations, the 207 bonds to O. L. Schoonover, Charles G. Avery, John G. Platt, James A. Passmore and C. H. Rowland, for a valuable consideration, who are the present holders and owners of the same.
    Thirty-four of the bonds which have been held by Levis & Company were sold at public auction and bought in for said O. L. Schoonover, Chas. G. Avery, John G. Platt, James A. Passmore and C. H. Rowland, who are the present holders and owners of 241 of said mortgage bonds.
    That the said Altoona and Philipsburg Connecting Railroad Company and its assigns have defaulted in the payment of the interest due on said bonds for a period of more than six months, and that the holders of more than one half of the bonds outstanding and unpaid, and secured by said mortgage, requested tbe Union Trust Company, trustee in said mortgage, to proceed to enforce the paj^ment of said interest and bonds. The other forty-three of the 299 bonds delivered over to Samuel P. Lang-don, then president of the Altoona & Philipsburg Connecting Railroad Company, would seem yet to be in his possession or that of the company, there being no evidence that they are outstanding in the hands of third parties.
    THE LAW OE THE CASE.
    The answer and tbe first request of defendants is that the bill should be dismissed because it is multifarious, as to parties defendant and subject-matter. The bill involves but one subject-matter or a single transaction—the rights of the bondholders and the mortgage trustee to enforce the payment of the bonds and interest due under the conditions and provisions of the mortgage.

      The mortgage being a first lien upon the property, real and personal, and the franchises of the Altoona & Philipsburg Connecting Railroad Company, and which also by its provisions pledges the net income and revenues of said railroad to the payment of the interest, anyone operating said railroad and being in possession thereof, does so subject to the provisions of the mortgage. Especially is it so in this case, because as soon, or a short time after the road was constructed and equipped, it was leased to Samuel P. Langdon, who almost immediately assigned the lease to the Pittsburg, Johns-town, Ebensburg & Eastern Railroad Company. By the terms' of the lease the lessee was to apply the net income and revenues of the railroad to. the payment of the interest upon $325,000 of the bonds as provided for in the mortgage. The lessee therefore became a party to said mortgage, to the extent of the liability assumed.
    It is true the answer in paragraph six, admits the lease to the Pittsburg, Johnstown, Ebensburg and Eastern Railroad Company, but avers that the lease was cancelled July 6, 1899, and that the lease is not in force since then. There was no proof offered in support of this averment. Yet, in paragraph seven of the answer, it avers that there was read at the sale of the thirty-four bonds by Levis & Company a notice by the Pittsburg, Johnstown, Ebensburg and Eastern Railroad Company, that said company was a creditor of the Altoona, Philipsburg Connecting Railroad Company, “and is in possession of the said railroad.”
    Which averment is to be relied upon? If not in possession under the lease, under what right or authority is it in possession ? It being in possession and operating the road was a proper party defendant. We do not think the bill is multifarious as to subject-matter or parties defendant; to take advantage of a bill being multifarious it should be done by demurring to the bill before answer filed and before the day of trial: Persch v. Quiggle, 57 Pa. 247. The principal question involved is whether the. Union Trust Company, trustee and the present holders and owners of the bonds in question, are entitled to a decree for the payment thereof. The principal defense set up, is that the mortgage and bonds issued by the Altoona and Philipsburg Connecting Railroad Company are void, because issued in violation of the provisions of the Act of May 7, 1887, P. L. 94.
    The tenth paragraph of the answer avers that the railroad and appurtenances of all kinds cost approximately $640,000. That a portion of this money was raised by the Altoona and Philips-burg Railroad Company by using its said bonds as collateral. That it obtained from Samuel P. Langdon, $27,086.99, and from Samuel P. Langdon, trustee, approximately $493,261.48.
    The defendants offered the deposition of Mr. George Philler, who testified that 207 of the bonds and most of the capital stock of said railroad company. were pledged by Samuel P. Langdon, as collateral on certain demand notes to him, for large sums of money advanced by him thereon.
    Samuel P. Langdon, as president of the road at that time, having control of nearly all the stock of the company, financed the construction, building and equipment of the same.
    Whether he realized from the bonds and stock the alleged $493,261.48 that the answer avers he put into the road as trustee, does not appear in the evidence. But it might be assumed that he did. In any event from the pleadings and evidence in the cause Samuel P. Langdon was the active manager and controller of the Altoona and Philipsburg Connecting Railroad Company from its inception to the present time, whether in his own name or that of the Pittsburg, Johnstown, Ebensburg and Eastern Railroad Company, or the New York and Pittsburg Central Railroad Company. When he pledged the bonds and stock of the railroad company, to raise money for its construction, there is no allegation or scintilla of proof that the mortgage and bonds were issued in violation of law. The Union Trust Company, trustee, in the mortgage, had no such knowledge or intimation of it. It is not alleged that Mr. George Philler had any such knowledge, and there was nothing upon the mortgage or bonds, but what was apparently regular and legal.
    When the notes for which the bonds were given as collateral were not paid, in accordance with the terms of the collateral agreement, then the holders of the bonds were, or became, the holders thereof bona fide, and had a right to sell them. Mr. Philler claimed to be the owner, which claim was not denied by Mr. Langdon. Mr. Philler testifies that he gave due notice to Mr. Langdon that he would sell the bonds; that Mr. Langdon knew of the sale. That he had the right to sell them must be accepted as conclusively proven, because Mr. Langdon, the other party to the transaction, was not called to contradict Mr. Philler. And it was alleged that the collateral agreement was in writing, but it was not produced to show that its terms had been violated. Then we must conclude that when Mr. Philler sold the bonds under the collateral agreement he, as a bona fide holder, had the right to sell them and passed a good title thereto to the purchasers thereof. The same with the bonds held and sold by Levis & Company.
    Can it be held that a railroad company can issue its stock and bonds, and raise money upon them, either by sale or pledging them as collateral, and use the money to build, construct and equip its road, then turn around and say that its securities are void and worthless because they were issued in violation of law ? Can it be permitted to say that the securities it has pledged as collateral, and upon which it has realized the money for building its road are worthless and void so as to prevent the holder thereof from realizing a fair value therefor, and thus make use of its own turpitude to reform others ? Can it keep the money realized thereon, and the property both ? Surely not. The proposition is one that courts of law and equity will not countenance or approve.
    It is unnecessary to cite authorities in support of a principle so well established as the one that a railroad company cannot defend against a contract of which it has received the benefit, on the ground of ultra vires and that it was Aroid because it had no authority or right to make it. That a railroad company is not permitted to set up as a defense to its mortgage and bonds, that have passed into the hands of third parties for a valuable consideration, a violation of the provisions of the act of May 7, 1887, has been decided by the Supreme Court in the case of Reed’s Appeal, 122 Pa. 565; Fidelity Ins., etc., Co. v. West Penn., etc., R. R. Co., 138 Pa. 494. The provisions of said act of 1887, cannot be invoked in a proceeding of this kind. It provides how and in what manner stockholders or others interested may proceed through the attorney general of the commonwealth, and what method must be employed: See Yetter v. Delaware Yalley R. R. Co., 206 Pa. 485.

      The transferee of a coupon bond is presumed to be a bona fide holder for value: Gibson v. Lenhart, Receiver, 101 Pa. 522.
    We therefore are of the opinion that the mortgage and bonds secured thereby, issued by the said Altoona and Philipsburg Connecting Railroad Company to the Union Trust Company, trustee, is not void as to the plaintiffs and bondholders in this suit, but that the same is valid and is a first lien upon the property of said railroad company, real and personal, its franchise, equipment, etc., as mentioned and described in said mortgage.
    The court entered the following decree:
    1. That the mortgage in the bill of complaint mentioned, dated June 1, 1893, executed by the Altoona and Philips-burg Connecting Railroad Company to the Union Trust Company, trustee, is the first lien upon the railroad tolls, franchises, estates and premises and property, real and personal, therein mentioned, referred to or described, and is effectual and binding thereon; and [that the holders of the bonds secured by said mortgage, namely, O. L. Schoonover, Chas. G. Avery, John G. Platt, James A. Passmore, Charles H. Rowland, W. L. Shellenberger, W. S. Lee, S. J. Westley, W. J. Heinsling, the administrator of John Loudon and William Loudon, according to their respective holdings, are entitled to the benefit of all the rights and securities thereby conferred.] [118]
    [2. That the principal of the bonds secured by said mortgage outstanding and unpaid in the hands of bona fide owners, is the sum of $256,000, and that on December 1, 1903, there were coupons on the said bonds due and unpaid,......$110,450
    Coupons matured June 1, 1904, . 6,400
    Face of bonds, .... 256,000
    Total of . $372,850] [119]
    [3. That the said Altoona and Philipsburg Connecting Railroad Company do pay 'to the Union Trust Company, the trustee in said mortgage, the sum of $372,850.00 on June 1, 1904.] [120]

      [4. That in default of such payment being, made on June 1, 1904, to the Union Trust Company, trustee in said mortgage, that the trustee do expose to public sale the said railroad,' estate, premises and property, real and personal, with the franchises and appurtenances conveyed to said trustee by said mortgage, under such order and reference as to terms and cpnditions of sale and distribution of the proceeds thereof as shall ac the expiration of said period be made'by this court on the application of the said trustee; that the costs of this proceeding be paid by the Altoona and Philipsburg Connecting Railroad Company.] [121]

      Errors assigned among others were (1) in not dismissing the bill because of multifariousness; (114) in awarding to any of the persons found to be the owners of 241 bonds any sum in excess of what they paid for them ; (115) in making any award to the owners of the fifteen bonds ; (118-121) portions of decree as above, quoting them.

      S. V. Wilson and Thomas H. Greevy, with them Harry Boulton, for appellant.
    If fraud is shown in the inception of the bonds the holder, to be entitled to protection, as a bona fide holder, must show that he is such ; his mere possession is insufficient: Simmons v. Taylor, 88 Fed. Repr. 682; Louisville, etc., Ry. Co. v. Ohio Valley Improvement, etc., Co., 57 Fed. Repr. 42.
    If a party seeks to set aside a transaction on the ground of fraud, he must himself be free from any participation in the fraud, and on the same principle equity will not lend its aid in the harsh assertion of legal rights, and where one of several confederates to a fraudulent transaction has acquired the result of his fraud, equity will not aid the others in obtaining their share of the spoils : Gannett v. Albree, 103 Mass. 372; Farley v. St. Paul, etc., Ry. Co., 14 Fed. Repr. 114; Musselmen v. Kent, 33 Ind. 452; Hunt v. Rowland, 28 Iowa, 349; Bispham’s Principles of Equity, sec. 42.
    The law is imperative that the holders must pay value for the bonds, and if they do not they cannot claim protection as a bona fide purchaser: Baker v. Guarantee Trust, etc., Co., 31 Atl. Repr. 174.

      J). L. Krebs and W. 8. Hammond, with them J. B. MoHnally and A. L. Oole, for appellee.
    The bill is not multifarious, nor was the objection made in time, even if it was : Ward v. Cooke, 5 Mad. 122; Oliver v. Piatt, 44 U. S. 333-412; Persh v. Quiggle, 57 Pa. 247.
    The defendant cannot attack the validity of the mortgage: Reed’s App., 122 Pa. 565; Fidelity Ins., etc., Co. v. R. R. Co., 138 Pa. 494; Woodbury v. Allegheny, etc., R. R. Co., 72 Fed. Repr. 371; Manhattan Hardware Co. v. Roland, 128 Pa. 119; Manhattan Hardware Co. v. Phalen, 128 Pa. 110; Wood v. Corry Water-Works Co., 44 Fed. Repr. 146; Watts’s App., 78 Pa. 370, 394.
    The defendant’s claim is without merit on the facts on every contention presented: McElrath v. R. R. Co., 55 Pa. 189; Wade v. R. R. Co., 149 U. S. 327 (13 Sup. Ct. Repr. 892); Moore v. Baird, 30 Pa. 138; Cromwell v. Sac County, 96 U. S. 51; Railway Co. v. Sprague, 103 U. S. 756; Thompson v. Perrine, 106 U. S. 589 (1 Sup. Ct. Repr. 564); Morgan v. United States, 113 U. S. 476 (5 Sup. Ct. Repr. 588).
    A corporation cannot take the benefit of a loan and then refuse to pay it, on the plea that it had no power to borrow the money: Jones v. National Bldg. Assn., 94 Pa. 215; Manufacturers’, etc., Saving & Loan Co. v. Conover, 5 Phila. 18; Railroad Co. v. Schutte, 103 U. S. 118-144; Allen v. Dallas, etc., R. R. Co., 3 Woods (U. S.), 316.
    Possession is prima facie evidence of ownership: Carr v. LeFevre, 27 Pa. 413; Rice v. Southern Penn. Iron & R. R. Co., 9 Phila. 294.
    . The rule, that the holder of the bonds who had purchased them for value, is entitled to recover the whole amount, irrespective of what he paid for them, applies in favor of a purchaser who has bought at a pledgee’s sale : Wade v. Chicago, etc., R. R. Co., 149 U. S. 327 (13 Sup. Ct. Repr. 892); Morris Canal & Banking Co. v. Lewis, 12 N. J. Eq. 323.
    June 22, 1905:
   Opinion by

Mr. Justice Potter,

On June 1, 1893, the Altoona and Philipsburg Connecting Railroad Company executed and delivered to the Union Trust Company of Philadelphia, trustee, a mortgage upon all of its property and franchises to secure bonds of the company in the sum of $400,000, said bonds being of the par value of $1,000 each. The trustee certified 330 of the bonds of which 299 were delivered to the president of the railroad company, Samuel P. Langdon. One of these bonds was sold to W. L. Shellenberger, four to W. S. Lee, two to S. J. Westley, one to W. J. Heinsling, five to John Loudon and two to William Loudon, in all fifteen. Two hundred and seven of the bonds were pledged as collateral for a loan to George Philler of Philadelphia and were sold by him, after due notice, to O. L. Schoonover, Charles S. Avery, John G. Platt, James A. Pass-more, and C. H. Rowland. Thirty-four bonds were pledged to Levis & Company and sold by them at public sale, when they were purchased by the same parties, making their total bolding 241 bonds. The trustee held thirty-one bonds as security for certain advances and liability incurred on account of the railroad company, and the balance of the bonds apparently were not negotiated.

On August 20, 1903, the holders of the fifteen bonds filed a bill in equity against the railroad company, the Union Trust Company, the Pittsburg, Johnstown, Ebensbui'g and Eastern Railroad Company, the New York and Pittsburg Central Railroad, lessees of the Altoona, etc., Company, and Samuel P. Langdon, alleging default in the payment of interest on the bonds and the insolvency of the company, and praying for a decree of foreclosure and the appointment of a receiver for the railroad. On September 13, 1903, the court appointed a receiver, but this decree was appealed from and superseded. On December 17, 1903, upon its own petition, the Union Trust Company, trustee, was permitted to withdraw the answer it had filed and to intervene as a party plaintiff.

Defense to the bill was made in behalf of the railroad company upon three grounds : (1) that the bill was multifarious; (2) that under the Act of May 7, 1887, P. D- 94:, sec. 3, the issue of bonds was void and of no effect and therefore neither the bondholders nor the trustee had any standing to maintain this action; and (3) that the holders of these bonds had purchased them with full knowledge of the fact that they had been illegally issued and were only pledged as collateral and had paid for them a sum much less than the face value.

The court below held that the bill was not multifarious and even if it had been, the objection should have been raised by demurrer before answer bled, citing Persch v. Quiggle, 57 Pa. 247. This forms the subject of the first assignment of error, but appellants do not press it in their argument.

Many of the assignments of error are not in accordance with our rules, and are open to the objection suggested by the appellees. But the appellants have met these objections in part at least by filing additional assignments, and among these are a sufficient number to properly raise the questions of importance in this appeal.

Upon the second ground of defense it was contended that under sec. 3, of the act of 1887, the bonds were void because at the time of their issue the amount subscribed for capital stock had not been fully paid. The fact of the nonpayment of the stock was conceded, but the court held that the railroad company, having received the benefit of the sale of the bonds, could not defend against its contract on the ground of ultra vires. Citing Reed’s App., 122 Pa. 565, and Fidelity Ins., etc., Co. v. R. R. Co., 138 Pa. 494. This was undoubtedly true to the extent to which the railroad company actually received the proceeds of the bonds. But it was shown that- 207 bonds held by O. L. Shoonover et al., were purchased from George Philler for $62,250, and the thirty-four from Levis & Company for $10,300. Defendant offered to show that at the time of the purchase of these bonds, the purchasers were stockholders of the railroad company and had full knowledge of the fact that the bonds were illegally issued and also that the parties from whom they purchased were not absolute owners of the bonds, but that the company held an equity of redemption in them. The court excluded the testimony, which is the subject of a number of the assignments of error. In the final decree of the court below, the purchasers named above were adjudged to be bona fide holders of the bonds for their face value, $256,000, with accrued interest, $116,850, making a total of $372,850 due upon the mortgage.

We think the trial court was mistaken in the position it took in this respect. If the defendant could show that these bondholders were not bona fide holders for value, it was entitled to do so. “ The presumption is, that holders of negotiable railway bonds are bona fide holders for value, but if fraud in the inception of the bonds is shown, the holder, to be entitled to protection as a bona fide holder, must show that he is such; his mere possession of the bonds is. insufficient: ” 23 Am. & Eng. Ency. of Law, 838.

“ The doctrine which validates securities within the apparent powers of the corporation, but improperly and therefore illegally issued, applies only in favor of bona fide holders for value. A person who takes such a security with knowledge that the conditions on which alone the security was authorized were not fulfilled, is not protected, and in his hands the security is invalid; though the imperfection is in some matter relating to the internal affairs of the corporation, which would be unavailable against a bona fide holder of the same security:” Hackensack Water Co. v. DeKay, 36 N. J. Eq. 548, where an elaborate discussion of the authorities is to be found.

In the present case, the court below quotes from the syllabus in Gibson v. Lenhart, 101 Pa. 522, that “ the transferee of a coupon bond is presumed to be a bona fide holder for value.” But the language of Justice Sterrett in the opinion in that case is (pp. 527,528) : “ The last taker is presumed to be a bona fide holder for value and may maintain his possession against everybody until the contrary be successfully established by those who undertake to assail his possession.”

The rule to be applied in such cases has been thus stated in the federal courts. The question of the validity of railroad bonds is to be determined by the well-established rule that “ if fraud or illegality in the inception of negotiable paper is shown, an indorsee, before he can recover, must prove that he is a holder for value. The mere possession of the paper under such circumstances is not enough:” Simmons v. Taylor, 38 Fed. Repr. 682.

We are of opinion that the testimony tending to show that the present holders were not bona fide holders for value without notice, should have been admitted; and, if it be established that they were not such, then the amount of the recovery should be limited to the actual amount expended in the purchase of the bonds, with interest thereon. The equity of this course will be especially manifest, if the proof sustains the averments of the answer, that the holders of these bonds purchased them with knowledge of the irregularity of the issue, and that they had only been pledged as collateral, and that the sum paid for them was substantially the amount required for their redemption.

The assignments of error numbered 114, 115,118,119, 120 and 121, are sustained.

The decree of the court below is reversed, and the costs of this appeal are to be paid by the appellees. And it is ordered that the record be remitted to the court below for further proceedings in accordance with this opinion.


author: Mb. Justice Potteb,

text:
    McPherran's Estate
    (No. 1).

      Deeds—Receipts—Evidence.

    Receipts, whether contained in deeds or elsewhere, are not conclusive of the payment of money, but only prima facie proof and always open to explanation. Thus, an acknowledgment of the purchase money in the body of a deed and a receipt indorsed, are not conclusive evidence of such payment. A receipt for the purchase money indorsed on a deed is only prima facie evidence and may be rebutted by evidence.
    Where a deed makes no mention of a mortgage which is a lien on the land conveyed and the receipt in the deed is for the full amount of the purchase money, a finding of fact by an auditor and the court below that the mortgage was part of the consideration mentioned in the deed, will not be reversed by the appellate court, where the finding was based on sufficient widence, and there was no manifest error.

      Executors and administrators—Sale—Discretion of court. ■

    The matter of allowing an administrator to purchase at his own sale, is one which addresses itself to the sound discretion of the orphans’ court, and the Supreme Court will not revise that discretion where there is nothing to show that it has been abused.

      Executors and, administrators—Surcharge—Raising of fund—Counsel fee.

    Where in proceedings in the orphans’ court, a creditor succeeds in surcharging the accountant, and it does not appear that the accountant was guilty of bad faith or gross neglect, such creditor will not be entitled to the whole amount of surcharge as against other creditors; and another creditor will not be excluded from the benefits of the surcharge merely because his attorney was also attorney for the accountant.

      Executors and administrators—Promissory note—Possession of note.

    Mere possession by an executor of a note or bond payable by the decedent to the executor will not prevent a recovery. In such a case in the absence of fraud it is not necessary for the executor to prove negatively that he did not hold the note in his individual right.

      Executors and administrators—Orphans’ court sale—Purchase by administrator.

    When an administrator purchases lands at his own sale, by permission of court and the sale to him is confirmed by the court, he acquires a title in fee simple and is not responsible to the estate for any profits be may realize on the transaction.
    A finding of fact by an auditor, based upon sufficient evidence and confirmed by the orphans’ court, that trust moneys in the hands of a decedent had been invested in real estate standing in decedent’s name, will not be reversed by the Supreme Court in the absence of manifest error.
    Argued April 19, 1905.
    Appeal, No. 65, Jan. T., 1905, by W. Scott McPherran, from decree of O. C. Huntingdon Co., No. 17, of 1905, confirming report of auditor in Estate of Porter W. McPherran, deceased.
    Before Dean, Bbown, Mestrezat, Potter and Elkin, JJ.
    Affirmed.
    Exceptions to report of John D. Dorris, Esq., auditor.
    The facts are stated in the opinion of the Supreme Court.

      Errors assigned (1-30) sufficiently appear by the opinion of the Supreme Court.

      W. E. Woods and James S. Woods, with them Samuel 1. SpyJcer, for appellant.
    It is incumbent on a party, who seeks to recover against a receipt, or other document, to make out his case clearly: Chapman v. R. R. Co., 7 Phila. 204; Kelly v. Dunlap, 3 P. & W. 136; Barclay v. Morrison, 16 S. & R. 129; Lehn v. Lehn, 9 S. & R. 57.
    The accountant should be surcharged with interest on all money he used and all profits that he made: Baker’s App., 120 Pa. 33; Norris’s App., 71 Pa. 106.
    Where a creditor raises a fund for the common benefit, his counsel are entitled to a fee out of the amount distributed to the quiescent creditors and also are to be allowed for the expenses incident to raising the fund: Neill’s Estate, 19 W. N. C. 380; Winton’s Appeal, 87 Pa. 77; Freeman v. Shreve, 86 Pa. 135; Pleasanton’s Appeal, 99 Pa. 362; McKelvy & Sterrett’s Appeal, 108 Pa. 615.

      An executor who is the payee of the note of his decedent, which is overdue at the time of his death, must show clearly that he held the note by a title hostile to the decedent: Hoffer’s Est., 156 Pa. 478; McMahon’s Est., 132 Pa. 175; Ike’s Est., 200 Pa. 202.
    W. M. Henderson, for appellee.
    The finding of an auditing judge is equivalent to the verdict of a jury, and where it is approved by the court below, it will not be reversed by the Supreme Court: Mayhew’s Estate, 155 Pa. 94; Lewis’s App., 127 Pa. 127; Prouty v. Prouty & Barr Boot & Shoe Co., 155 Pa. 112; Penn Bank’s Est., 152 Pa. 65.
    Where a claim is presented against an estate and it appears that there is an account due the estate from the claimant, the orphans’ court can determine the existence of the indebtedness due the estate for the purpose of offsetting the claim against the estate, but it cannot go further and decide that the claimant or distributee is indebted to the estate beyond his claim or share.
    The surplus beyond the share of the person advanced is not different from a claim against any other debtor: Robinson’s Est., 12 Phila. 170; Springer’s App., 29 Pa. 208.
    The fact that several years after an orphans’ court sale, the purchaser at such sale sells the real estate at an advance, does not justify the conclusion that the value of the property then was the same as when sold under order of court: Immendorf’s Estate, 190 Pa. 590.
    There is no warrant for the proposition that at law an attorney’s claim for services for a sum not judicially ascertained nor assented to by other claimants is a lien upon the fund as against such claimants : Patrick v. Bingaman, 2 Pa. Superior Ct. 113.
    June 22, 1905:
   Opinion by

Mb. Justice Potteb,

The thirty assignments of error in this case have been grouped by counsel, in the argument, so as to raise six independent questions.

1. Fourth and sixth assignments. On January 20, 1895, John P. MePherran and wife conveyed to Porter W. McPherran, the decedent, certain real estate in Harrisburg known throughout these proceedings as the “ Eby lots ” for a consideration of $7,500. The deed was an absolute deed in fee simple containing the words “ grant, bargain, sell,” and also contained a receipt signed by the grantor for $7,500, the consideration mentioned. There was no reference in the deed to any incumbrance, but in point of fact the land was subject to a mortgage created by the grantor, upon which there was still due •when decedent died, the sum of $4,128.25. When the administrator sold the Eby lots, the sale was made subject to this mortgage and the administrator has accounted only for the purchase money in excess of the mortgage, which was $1,800. The appellant asked the auditor to surcharge him with, the amount of the mortgage on the grounds (1) that by the terms of the deed the decedent was entitled to receive an indefeasible estate in fee simple free'from incumbrances and therefore at the time of his death he had a right of action against the grantor for the amount due upon the mortgage; and (2) the grantor being administrator, and indebted to the estate as claimed, should have charged himself in his account with the amount of his indebtedness.

The only evidence of the payment of the full consideration money by decedent was the receipt for $7,500 contained in the deed. The auditor held that this receipt was merely a formal matter and would not interfere with the assumption of the mortgage by the grantee as part of the $7,500, and the burden was upon the appellant to show payment of the full consideration. He found that appellant had failed to show that decedent had paid or obligated himself to pay the full sum of $7,500 and that the facts and circumstances of the case pointed the other way. He therefore declined to surcharge the accountant as requested.

The auditor also calls attention to the fact and counsel for appellee bases an argument upon it, that no exception was filed to the account on this ground, and that therefore under a rule of the orphans’ court of Huntingdon county it cannot be considered. It appeared that an exception was filed nunc pro tunc on January 7, 1904, after final decree. Appellee claims that this exception was not in proper form, because it raised a question of fact and was not verified by affidavit as required by rule. Appellee also alleges that leave of court was not obtained for filing the exception nunc pro tunc; but the exception itself recites that it is filed by leave of court. However this may be, we have the finding by the auditor, that as a fact the mortgage was part of the consideration mentioned in the deed. This finding was sustained by the court, and we will not disturb it: Mayhew’s Estate, 155 Pa. 94; Prouty v. Prouty & Barr Boot & Shoe Co., 155 Pa 112; Lewis’s Appeal, 127 Pa. 127.

In Nichols v. Nichols, 133 Pa. 438 (454), Justice Green said: “ It is perfectly well settled law that receipts, whether contained in deeds or elsewhere, are not conclusive of the payment of money, but only prima facie proof and always open to explanation. Thus, an acknowledgment of the purchase money in the body of a deed and a receipt indorsed, are not conclusive evidence of such payment. A receipt for the purchase money indorsed on a deed is only prima facie evidence and may be rebutted by evidence.” •

2. First, second, seventh, eighth, ninth, thirteenth and twenty-sixth assignments. Two properties of the estate, known as the North Sixth street property and the Eby lots, were purchased by the administrator by leave of court at his own sale. It was alleged that he had actually paid for these properties with the funds of the estate and had subsequently sold them at a considerable profit, and the auditor was asked to surcharge him with the amount of this profit, and also with interest and the amount claimed by him for commissions on the sales. The auditor found that the testimony failed to establish these conclusions of fact, or that the administrator used the funds of the estate for his own purposes. He further found, as a conclusion of law, that when-an administrator purchases lands at his own sale, by permission of court, and the sale to him is confirmed by the court, he acquires a title in fee simple and is not responsible to the estate for any profits he may realize on the transaction. He also found as a fact, that the evidence did not show a profit at this stage to the administrator.

The matter of allowing the administrator to purchase at his own sale, was one which addressed itself to the sound discretion of the orphans’ court, and we see no reason whatever in this case, why we should attempt to revise that discretion. Nor will we disturb the findings of fact alluded to in these assignments..

3. Eleventh, twelfth, twenty-fifth, twenty-seventh and twenty-ninth assignments. By the efforts of counsel for appellant, the accountant was surcharged in certain amounts.. The counsel for the guardian of Frank P. Beam who was also counsel for the administrator, gave no assistance to appellant’s counsel in this contest but on the contrary opposed the surcharges. The appellant claimed (1) that he alone should be given the benefit of these surcharges; and (2) if the auditor should deny him such preference, then he is at least entitled to an allowance out of the fund realized by the efforts of his counsel for their compensation. The auditor refused to award the entire fund to the appellant or to make any allowance for his counsel.

His reasons for declining to allow the claim of W. S. Mc-Pherran to be given the benefit of the entire surcharge, to the exclusion of other creditors, were, first, because he had found no bad faith or gross neglect on the part of the accountant, and, secondly because in his opinion the fact that the attorneys for the guardian of Beam also represented the accountant does not exclude the former from the benefits of any surcharge that has been made. We think these reasons are sound.

The claim for an allowance of counsel fees does not appear to have been made at the audit, and was not considered by the auditor in either of his reports, and the question apparently was first raised by the twenty-third exception to the supplemental report.

4. Third and twenty-first assignments. The accountant, John P. McPherran, presented a claim upon a promissory note for $1,371.77, made to his order by the decedent, dated January 20, 1895, at one day. Decedent died September 13, 1896. The note was objected to, on the ground that it had been overdue at date of decedent’s death and was presented by his administrator, without any proof that it had not been paid and surrendered to the maker, or that it was in the possession of the payee at the time of the maker’s death. It was claimed that under the circumstances a presumption arose that it had been in decedent’s possession and the claimant had found it among his papers after his death. The auditor allowed the claim for the reason that the note was included in the schedule of debts annexed to the petition to sell the real estate of decedent, and its validity was attacked in an answer filed by tbe appellant to such petition, and the order of sale was made by the court notwithstanding.

As the auditor has found as a fact that nothing in the circumstances would indicate anything like fraud, it was not necessary for the administrator to prove negatively that he did not hold the note in his individual right. Mere possession by an executor of a note or bond payable by the decedent to the executor, will not prevent a recovery: Kuhlman’s Estate, 178 Pa. 43.

The execution and delivery of the note by P. W. McPherran, the deceased, does not seem to have been questioned, before the auditor, and we see nothing in the evidence which would prevent this claim from participating in the distribution.

5. Seventeenth assignment. This assignment relates to the finding of the auditor that 13,000 of the money of the minor, Frank P. Beam, was invested by his guardian, the decedent, in the Sixth street properties and in awarding that sum in full out of the proceeds of the sale of those properties. This appears to have been purely a question of fact for the auditor. Appellant contends that this finding depends upon the admissibility of the testimony of the accountant. But there is sufficient evidence to warrant such finding without considering the testimony of the accountant.

We do not see that the testimony of John P. McPherran is in any way adverse to the estate of P. W. McPherran. It did not charge that estate with any more money than it was admittedly responsible for, by reason of P. W. McPherran having been the guardian of Frank P. Beam. The testimony only went to trace the fund, and show where it had been invested.

6. Eighteenth assignment. The appellant offered to show that the date in decedent’s account book had been changed from January 20, 1890, to January 9, 1890, by the administrator, after decedent’s death. But the auditor held, "and we agree with him, that the alteration if made, was entirely immaterial, so that this assignment is without merit.

All the assignments of error are dismissed, and the report of the auditor, as sustained by the court below, is approved.


text:
    McPherran’s Estate
    (No. 2).

      Judgment—Decedents’ estates—Fraud,—Creditors.

    A judgment recovered against a decedent’s estate on a note given by the decedent in his lifetime, will not be disallowed as a claim against the estate at the instance of a creditor, on the ground that the note was without consideration, where an auditor, confirmed by the court below, finds as a fact that the note was not given to defraud creditors.

      Decedents’ estates—Guardian and ward—Auditor—Findings of fact.

    An auditor’s finding of fact that a decedent had invested none of his ward’s money in real estate standing in the decedent’s name, when such finding is confirmed by the court below, and is based upon sufficient evidence, will not be reversed by the Supreme Court in the absence of manifest error.
    Argued April 19, 1905.
    Appeal, No. 66, Jau. T., 1905, by Frank P. Beam, from decree of O. C. Huntingdon Co., No. 17, of 1905, dismissing exceptions to report of auditor in Estate of Porter W. MePherran, deceased.
    Before Dean, Brown, Mestrezat, Potter and Elkin, JJ.
    Affirmed.
    Exceptions to report of John D. Doris, Esq., auditor. Before Woods, P. J.
    The facts are stated in the opinion of the Supreme-Court.

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

      H. H. Waite and T. F. Bailey, for appellant.
    Creditors were not concluded by the proceedings in the common pleas : Williams v. Williams, 34 Pa. 312; Second Nat. Bank’s App., 85 Pa. 528; McNaughton’s App., 101 Pa. 550; Meckley’s App., 102 Pa. 536.
    If there is no actual debt, the confession of judgment stands upon the same plane as a voluntary conveyance, and is void as to creditors, under the statute of 13th Elizabeth C. 5. -If voluntary, a fraudulent intent results as a conclusion of law: Shontz v. Brown, 27 Pa. 123; Handy v. R. R. Co., 1 Phila. 31; Clark v. Douglass, 62 Pa: 408; Brandt v. Stevenson, 3 Phila. 205; Davis v. Charles, 8 Pa. 82; Miller v. McAlister, 178 Pa. 140.

      Samuel I. SpyTcer and W. H. Woods, with them J. S. Woods, for appellee.
    A judgment of record cannot be assailed in a collateral proceeding, except for collusion and fraud, and then only by the party whom it is intended to defraud.
    June 22, 1905:
   Opinion by

Mb. Justice Potteb,

The first and second assignments of error relate to the allowance of the claim of W. S. McPherran upon his judgment for $12,556.67. The facts in regard to this claim are as follows :

On September 10, 1898, W. S. McPherran brought an action of assumpsit against John P. McPherran, administrator of P. W. McPherran, deceased. By his statement the plaintiff claimed to recover the amount of a judgment note for $10,000 dated February 7, 1895, to the order of plaintiff signed by the decedent and payable one day after date. The administrator pleaded non assumpsit, and non est factum; issue ivas joined, and a trial resulted in a verdict on May 11, 1899, in favor of the plaintiff for the full amount of the note, with interest, upon which judgment was subsequently entered.

The record of the judgment was offered in evidence before the auditor, and was objected to by counsel for the present appellant, a creditor of the estate, for the alleged reason that the judgment note was signed and delivered to claimant by the decedent without such a consideration as would entitle it to participate in the fund for distribution until after payment of the just debts of the estate. Testimony was offered to show that the note ivas without consideration, but the auditor held that “ after a closely contested contest in court the note was sustained by the verdict of the jury and in the absence of any evidence of fraud and collusion he does not feel justified in inquiring back of the judgment on the ground that it was without consideration, especially since its validity has been established by the verdict in court.” He therefore allowed the claim.

It is stated in the appellant’s paper-book that the questions tried in the action at law were whether (1) the note was a forgery; and (2) whether there was a good consideration for it as between the original parties.

The court, upon exceptions, referred the report back to the auditor to hear additional testimony and find the facts on three questions, one of- which was whether the judgment note was or was not given without an adequate legal consideration. After hearing the testimony the auditor found that the facts shown constituted an adequate legal consideration for the note in the absence of fraud and collusion, and that the evidence failed to show fraud and collusion as to creditors in the giving and receiving of the judgment note.

The only direct evidence as to consideration was in the testimony of A. G. McPherran, a son of the claimant, to the effect that he was present when the note was signed ; that he filled it up at the request of decedent, who signed it and gave it to his mother and told her to give it to his father ; that no money passed but decedent told witness that he gave the note in payment of a debt he owed witness’s father; that decedent also told witness that when his grandfather’s estate was settled witness’s father had not received his just dues “ and my father intended to make trouble about it and get his honest dues, and he said to leave it go and he would make it good and he gave that note to make it good. . . . He said he owed it to him as a debt, because he hadn’t got his rights in settlement of his father’s estate.”

There was no testimony in direct contradiction of this witness, who was called on behalf of the accountant. Counsel for the latter offered to show the amount of the estate of claimant’s father to contradict the witness, but the evidence was excluded. Certain letters of the claimant to decedent were also offered to show financial relations between the brothers, apparently inconsistent with the existence of this indebtedness.

The court overruled exceptions to the auditor’s report and sustained his allowance of the claim on the note. This is assigned as error.

The auditor was controlled by the fact that he found no evidence of fraud or collusion; and that being the case, he followed the principle in Dougherty’s Estate, 9 W. & S. 189, where the syllabus reads: “ On an appropriation of the proceeds of a sale of real estate by the sheriff, judgment creditors may avail themselves of a right to set aside a judgment given and obtained by a collusion for the purpose of defrauding them; but they cannot thus attack a judgment on the ground that the defendant in it was overreached or taken advantage of by the plaintiff witli regard to its consideration.” And Second Nat’l. Bank’s Appeal, 96 Pa. 460, where the syllabus reads: “ A judgment in the absence of fraud cannot be collaterally impeached, and it is error for an auditor, appointed to distribute the proceeds of a sheriff’s sale, to go behind a judgment regularly entered upon adverse proceedings without fraud or collusion.” And in Thompson’s Appeal, 57 Pa. 175, where Justice Strong said: “ Judgment creditors may attack a judgment collaterally when it is a fraud upon them, as when there has been collusion between the debtor and the creditor ; but they cannot set it aside merely because it is a fraud upon the debtor.” And again in the case of Hawley v. Griffith, 187 Pa. 306 (313), the court below in an opinion approved by the Supreme Court says, that if the parties had no fraudulent intent, then the judgment was not collusive, and that it is well settled that creditors have no right to impeach a judgment on any other ground than collusion.

The principle upon which the auditor stood, was also sustained in Woods v. Irwin, 141 Pa. 278 (293), where Justice Mitchell said: “ In Clark v. Douglass, 62 Pa. 408, this court, through Sharswood, J., said, that it was now fortunately well settled that creditors have no right to impeach a judgment on any other ground than collusion, and in Meckley’s App., 102 Pa. 536, it was held that a judgment honestly confessed to a wife by an insolvent was good against creditors. If not for more than was due, it was not fraudulent either in fact or in law, though there had been no agreement for interest on the money advanced by the wife and such interest had been included in the judgment.”

In was then held (Woods v. Irwin) that where the executrix liad confessed judgment to the alleged creditor, other creditors could not interpose to have the judgment opened for the purpose of pleading the statute of limitations. It is further said (p. 295) : “ This result is not at all affected by the fact that the creditors in the orphans’ court will have the fund diminished by the judgment. ... As already shown, the debtor himself might confess judgment no matter how much it diminished the creditor’s chance of payment and his representative stands in this respect in his place.”

It will be remembered that in the case now under consideration, tbe administrator did not confess judgment, but contested tbe suit.

And again in Page v. Suspender Co., 191 Pa. 511, tbe present Chief Justice states the rule as follows (p. 519) : “ There must be fraud, and the creditor must be party to it, to avoid the judgment at the suit of other creditors. In Mecldey’s App., 102 Pa. 536 (543), it was said by our late Brother Clai-ík : ‘ It is doubtless true, as said by Mr Justice Shakswood in Clark v. Douglass, 62 Pa. 408, that “a judgment confessed voluntarily by an insolvent or indebted man for more than is due is prima facie fraudulent within the statute of 13 Eliz. c. 5; ” but then it is only prima facie fraudulent, and as the auditor has specifically and expressly found from the evidence that, in fact there was no dishonest or fraudulent purpose to cheat or defraud, delay or hinder the creditors, that prima facie presumption is by the auditor’s finding fully rebutted.’ So here, we do not think the rules of law are to be so applied as to compel us to hold that to be a fraud which the court has on the evidence found to have been done honestly and in good faith.”

Under these authorities the finding of the auditor, confirmed by the court below, that the evidence fails to show fraud and collusion, must be accepted as conclusive of the fact.

The third and fourth assignments relate to the refusal of the auditor to find that the decedent, as guardian of the appellant, had invested $2,000 of his ward’s money in certain real estate in Harrisburg, known as the Eby lots, and to award to appellant the sum of $1,800, being the proceeds of the sale of those lots. The auditor did find that $3,000 of appellant’s money went toward the purchase of other real estate by decedent and awarded it accordingly out of the proceeds. But as to the Eby lots, he reports that he is of the opinion “ that the weight of the evidence fails to establish the fact that any portion of Frank P. Beam’s money went into their purchase by P. W. McPherran.” This finding was approved and confirmed by the court below.

By the testimony offered b}'- claimant the $3,000 was directly traced into the Sixth street properties, but this was not the case as to the Eby lots. The finding of the auditor in this respect, approved as it is by the court, must be respected.

• The fifth assignment of error was not argued by appellant and the sixth was merely to the decree of the court dismissing appellant’s exceptions and confirming the auditor’s report.

The assignments of error are all dismissed, and the report of the auditor, as confirmed by the court below, is approved.