author: Mr. Justice Elkin,

text:
    Commonwealth, to use v. A. B. Baxter and Company, Inc., Appellant.

      Principal and surety — Bond—Foreign attachment — Amendment — Cause of action — Damages—Different measure of damages — Judgment—Foreign corporation — Act of March 20, 18J/.5, P. L. 188 — Act of March 80,1905, P. L. 76.

    1. Tbe rule that a judgment against tbe principal in a bond is conclusive against his sureties applies to bonds of administrators and guardians, bonds of assignees for the benefit of creditors, official bonds, bonds of indemnity and other bonds of like character, but it does not apply in the case of a bond given to dissolve a foreign attachment.
    2. Where a bond is given under the Act of March 20, 1845, P. L. 188, to dissolve a foreign attachment, and the condition of the bond is to “pay the debt or damages, interest and costs that may be recovered,” the amount of the debt or damages that may be recovered from the surety is measured by the sum demanded in the affidavit of the cause of action. If after the filing of the affidavit the plaintiff thinks proper to increase his claim for damages by amendment, the sureties are not discharged from all liability by such amendment, but will be required to pay the damages liquidated by the plaintiff in the original affidavit of the cause of action, together with interest and costs.
    3. The original cause of action in a foreign attachment cannot be amended after the bond has been filed by introducing a new cause of action, or by substituting a different measure of damages.
    4. In a foreign attachment brought against a broker by his customer, where the plaintiff in his original affidavit of cause of action, claims the difference between the purchase price of stocks, and the highest price at which the same stocks sold up to the final filing of the statement, and he subsequently amends his claim so as to give him the right to recover upon the basis of the highest selling price of the stocks up to the time of trial, the sureties are not bound by such amendment.
    5. Under the Act of March 30, 1905, P. L. 76, a foreign attachment may be issued in all actions ex contractu including an action for unliquidated damages, and in actions ex delicto for tort committed within the Commonwealth. The Act of 1905, applies to foreign corporations inasmuch as it must be read into the Act of June 13, 1836, P. L. 568, the 76th section of which provides for a writ of foreign attachment against foreign corporations, although the Act of 1905 purports to amend only Section 44 of the Act of 1836.
    Argued Oct. 24,1911.
    Appeal No. 200, Oct. T., 1911, by defendants, from order of O. P. No. 4, Allegheny Co., Second Term, 1911, No. 554, making absolute rule for judgment for want of a sufficient affidavit of defense in. case of Commonwealth to use of Charles A. Gettman v. A. B. Baxter and Company, Inc., John Newell and Eugene P. Whitcomb.
    Before Fell, C. J., Bbown, Mesxeezax, Poxteb, Elkin, Siewaex and MIosohziskeb, JJ.
    Affirmed.
    Assumpsit on a bond given to dissolve a foreign attachment.
    Rule for judgment for want of a sufficient affidavit of defense.
    The facts are stated in the opinion of the Supreme Court.

      Error assigned was order making absolute ruie for judgment for want of a sufficient affidavit of defense. .

      John S. Ferguson and John G. Johnson, with them William Hunter and Eugene Mackey, for appellant.
    A surety or guarantor is a favorite of the law and has a right to stand upon the strict terms of his obligation, when such terms are ascertained: Moreland Sch. Dist. v. Picker, 14 Montg. County Law Repr. 85; St. Peter’s & St. Paul’s Greek Church v. Bohinski, 11 Kulp, 164; Bank of Washington v. Barrington, 2 P. & W. 27.
    This appellee has overreached himself and has discharged his bondsmen : Jamieson v. Capron, 95 Pa. 15; Wilhelm’s App., 79 Pa. 120; Grier Bros. v. Assurance Co., 183 Pa. 334.
    An amendment will not be permitted where it prejudices the opposing party: Riley v. Prudential Ins. Co., 12 Pa. Super. Ct. 561; Sener v. McCormick, 15 Pa. Super. Ct. 588; Good Roads Machinery Co. v. Old Lycoming Twp., 25 Pa. Super. Ct. 156.
    What was done in Gettman’s foreign attachment was to introduce a new or additional cause of action: Davis v. N. Y., L. E. & W. R. R. Co., 110 N. Y. 646 (17 N. E. Repr. 733); Hurst v. Detroit City Ry. Co., 84 Mich. 539 (48 N. W. Repr. 44); Wilson v. Jamieson, 7 Pa. 126; Hoboken v. Gear, 27 N. J. Law 265; Allen v. Allen, 23 W. N. C. 371; Moore v. Spackman, 12 S. & R. 287; Coleman’s App., 75 Pa. 441; Albany City Ins. Co. v. Whitney, 70 Pa. 248; Robeson v. Thompson, 9 N. J. Law 97; Scovill v. Blasner, 79 Mo. 449; Skowhegan Bank v. Cutler, 49 Me. 315; Liggett v. Ladd, 23 Ore. 26 (31 Pac. Repr. 81).
    Whilst there is a liberal allowance of amendments in this state in favor of plaintiffs who may have made some inadvertent mistake, no such liberality should be permitted where the same will work hardship to third persons: Willis v. Crooker, 18 Mass. 204; Weller v. Hanaur, 10 Pa. D. R. 123.

      Joseph A. Langfitt, with him H. W. McIntosh and William Kaufman, for appellee.
    The liability of the appellants for the full amount of the recognizance in suit has certainly become fixed and absolute: Fetterman v. Hopkins, 5 Watts 539; Bierce v. Waterhouse, 219 U. S. 320; Jamieson v. Capron, 95 Pa. 15; Bank of Montgomery v. Reese, 26 Pa. 143; Learock v. Paxson, 208 Pa. 602.
    An increase in the ad damnum is not a change of the cause of action: Tassey v. Church, 4 W. & S. 141; Trego v. Lewis, 58 Pa. 463; Stainer v. Royal Ins. Co., 13 Pa. Superior Ct. 25; Todd v. Quaker City Mut. Ins. Co., 9 Pa. Superior Ct. 381; Bierce v. Waterhouse, 219 U. S. 320; McNeilly v. Driscoll, 94 N. E. Repr. 273; Dunn v. Mayo Mills, 134 Fed. Repr. 804; Jamieson v. Capron, 95 Pa. 15; Hackett v. Carnell, 106 Pa. 291; Townsend Nat. Bank v. Jones, 151 Mass. 454 (24 N. E. Repr. 593); Vansciver v. Churchill, 35 Pa. Superior Ct. 212.
    February 26, 1912:
   Opinion by

Mr. Justice Elkin,

This is an appeal by the sureties on a bond given to dissolve a foreign attachment. The principal defendant, a foreign corporation organized for the purpose of conducting a brokerage business, was brought into the court below on a writ of foreign attachment. The amount of the bank deposit attached, expressed in even numbers, was $8,000.00; the margins called by the brokers, and paid by Gettman on his speculative account, were $23,000.00; the liquidated damages claimed, being the sum demanded at the time the writ issued, were $83,000.00; the penalty of the bond given to dissolve the attachment was fixed at $65,000.00, about double the sum demanded in the cause of action; and by reason of an amendment to the original statement of claim allowed after the bond was filed, which amendment substituted a different measure of damages, judgment was obtained for $89,000.00. In other words, Gettman, with $23,000.00 advanced as margins to his brokers, attached their bank deposit of $8,000.00, upon a specific demand for $33,000.00; was permitted to obtain a judgment for $89,000.00, and now seeks to recover $65,000.00 from the sureties on the bond given to dissolve the attachment. Can this be done? The answer depends upon several interesting questions of law. If the pleadings had not been amended the liability of the sureties would have been measured by the liquidated damages demanded when the writ issued. The questions to be determined here are (1) whether that liability can be almost doubled by what subsequently occurred without their knowledge or consent, and, (2) whether the sureties are totally discharged from any liability by reason of the amendment. At the outset, it may be remarked, that the bond in the case at bar is not an official bond, or a bond of indemnity, or a bond to insure the faithful performance of duty, or to secure a proper accounting by persons acting in fiduciary relations, and, therefore, the rule in this class of cases, that a judgment against the principal is conclusive against his sureties as to his misconduct, and failure to properly account, has no controlling force here. In the class of cases referred to, the surety submits himself to the acts of his principal as a legal consequence of his suretyship because as the courts have said it was the intention of the parties to the undertaking to assume this liability. This rule applies to bonds of administrators and guardians, bonds of assignees for benefit of creditors, official bonds, bonds of indemnity, and other bonds of like character: Com. v. McDonald, 170 Pa. 221; Com. v. Julius, 173 Pa. 322; Yung’s Estate, 199 Pa. 35; Com. v. Fidelity & Deposit Co., 224 Pa. 95; Little v. Com., 48 Pa. 337; Lindsey v. Reid, 101 Pa. 438; Masser v. Strickland, 17 S. & R. 354; Evans v. Com., 8 Watts 398. Nothing said in the present case must be understood as impairing or modifying the rule of the cases above cited and others of similar import.

The condition of the bond in the present case is to “pay the debt or damages, interest and costs that may be recovered,” and follows the requirements of the act of March 20, 1845, P. L. 188. This act provides, in all cases dissolving foreign attachments, the bail shall be bail absolute, in double the amount in controversy as nearly as the same may be ascertained, conditioned as above indicated. In order to determine what the legislature intended by the requirements of this act, it is necessary to review the state of the law at the time of its enactment. At common law bail was of two kinds, bail to the sheriff, called bail below; and bail to the action, called bail above. In bail above the sureties undertook generally, or in a sum certain, that if the defendant' should be convicted he should satisfy the plaintiff, or render himself into custody. The rule as to the liability of sureties in bail above varied according to the practice in the Common Pleas and in the King’s Bench. Bail above were liable in the King’s Bench only for the amount sworn to and costs, while in the common pleas they were liable for the whole of the debt and costs without reference to the amount sworn to, not exceeding the penalty of the bond. The practice differing in the two courts, there was much discussion by the English judges as to which was the safer and more equitable rule. Many of the Common Pleas judges expressed the opinion that the practice of the King’s Bench more equitably defined the rights of sureties, although they felt bozmd by precedent to follow their own practice: Sellon’s Practice, pages 156-158, 189-190; Tidd’s Practice, 280; Mitchell v. Gibbons, 1 Bl. H. 76; Howell v. Wyke, 4 Moore 167; Martin v. Moor, 2 Strange 922; Taylor v. Wilkinson, 5 Nevile and Manning, 189. A study of these cases will show that the practice in the King’s Bench was approved by both courts, although only followed in one. This practice was best expressed in the case of Martin v. Moor, above cited. In that case the latitat was with an ac etiam for eighty pounds, the declaration was ad damnum 150 pounds, the verdict was for 104 pounds, and the question arose whether the bail should be liable pro tanto, or totally discharged. The English court, after reviewing all the authorities, decided that, as on the one hand, there was no color to subject the bail to more than they were bound in, let the demand be ever so much, so, on the other hand, there was no reason why the plaintiff should suffer by his moderation in taking bail, and, therefore, the recognizance should be considered as an agreement to pay eighty pounds, or deliver up the defendant. It is true this was the rule of the King’s Bench, and not of the common pleas, but, in our state the practice in the King’s Bench was approved by this court in Eldridge v. Robinson, 4 S. & R. 548, where ■it was held, in a foreign attachment proceeding, that the plaintiff must stand on his original affidavit, and could not file a supplemental affidavit so. as to affect the liability of sureties. This was the rule of law when the act of June 13, 1836, P. L. 568 was passed. Section 62 of this act provided that if the defendant in the attachment, shall, at any time before the money paid, put in and perfect bail to the action, in the sum demanded, or in such sum as the court shall order, the attachment shall be dissolved, and the action shall then proceed in like manner as if the same had been commenced by a capias. This section was nothing more than a legislative declaration of the existing practice as recognized by this court. In 1842, imprisonment for debt was abolished, and this necessarily abrogated the alternative condition in the bail bond, which was to surrender the body of the defendant, if the debt was not paid. This no doubt led to the passage of the act of 1845 under which the bond in the present case was given. It seems clear that the purpose of this act was to give the plaintiff bail absolute as security in lieu of the right to demand a surrender of the body of the defendant, of which right he had been deprived by the act of 1842. But, even if this was not the intention of the legislature, and the primary purpose of the act was to give the plaintiff a better security, there does not appear to be any reason for holding that it was intended to increase the liability of the bail. Under the act of 1836 the sum demanded was the criterion by which to determine the liability of the bail, while under the act of 1845 “the debt or damages, interest and costs” measure the liability. The words “debt or damages” evidently refer to the form of action, which may be indebitatus assumpsit for a specific amount, or trespass for damages in such sum as the facts warrant. But in either event these words, which are made a condition of the bond, relate to the sum demanded in the cause of action and the extent of the liability is necessarily measured thereby. Where the sum demanded is a sum certain, or where the amount of the demand is stated in the affidavit of the cause of action, or where the amount is fixed by the court on application to reduce the bail, the liability of the bail is primarily governed by the sum so demanded. The act of 1845 requires bail absolute, which means, bail to which the plaintiff has consented, or which he has approved, as contradistinguished from bail de bene esse, that is, bail put in by the defendant in the first instance, subject to exception by the plaintiff afterwards. It seems clear that the purpose of the act in requiring bail absolute was to recompense the plaintiff in some degree for depriving him of the personal security of the body of the defendant, by providing that bail should not be taken unless satisfactory to him. Nothing contained in the act of 1845 warrants the conclusion that the bail is bound to pay the judgment recovered without regard to the sum demanded; but, on the other hand, the liability of the bail is to be determined by the debt, or damages, recovered upon the demand made in the cause of action. It necessarily follows in the present case that the extent of the liability of the sureties depends upon the sum demanded in the cause of action upon which the writ of foreign attachment issued. This raises another question of law and one not free from difficulty. Can the original cause of action be amended after the bond has been filed by introducing a new cause of action, or by substituting a different measure of damages? Upon questions incidental to this inquiry there is a great variety of opinion in our American cases. All authorities agree that an entirely new cause of action cannot be introduced, and some of them hold that a different measure of damages cannot be substituted. The test of the power of courts to allow amendments under our statutes was stated by Mr. Justice Duncan in Cassell v. Cooke, 8 S. & R. 268, to be “the true criterion is, whether the alteration or proposed amendment, is a new and different matter — another cause of controversy; or whether it is the same contract or injury, and a mere permission to lay it in a manner which the plaintiff considers will best correspond with the nature of his complaint, and with his proof, and with the merits of his case.” The authority of this case has been approved by our court as late as Holmes v. Railroad Company, 220 Pa. 189; Hodges v. McGovern, 230 Pa. 368. Another test of the right to allow an amendment was stated in Rodrigue v. Curcier, 15 S. & R. 81, to be, when the merits of the case cannot be reached without an amendment, it is to be granted, provided the cause of action be not changed. The authority of this case has been recognized in many subsequent cases. According to these tests, it may be accepted as the settled rule in Pennsylvania, that an amendment of the ad damnum clause, without changing the ground of recovery relied on, does not introduce a new cause of action. While the mere increase of the ad damnum does not introduce a new cause of action, there is a question as to whether an amendment which introduces a different measure of damages may be allowed. The question has not been squarely raised and decided in our state. This court has held that where the original claim was for actual damages caused by the unlawful cutting of timber, the statement could not be amended so as to claim double or treble damages under the statute: Dunbar Furnace Co. v. Fairchild, 121 Pa. 563; Fairchild v. Dunbar Furnace Co., 128 Pa. 485. These cases were put upon the ground that a claim for double or treble damages for cutting timber is an action for a statutory penalty, not for redress of the injury committed, and the cause of action, although arising from the same subject matter, is different from that accruing at common law. In some other jurisdictions it has been held that the two tests by which to determine whether an amendment introduces a new cause of action are: (1) Whether the same evidence will support both the original and amended declaration; and (2) whether the same measure of damages will apply to both; and if both of these fail, the new pleadings must be held to.introduce a new cause of action: Burt v. Kinne, 47 N. H. 361; Scovill v. Glasner, 79 Mo. 449; Hurst v. Detroit City Railway Co., 84 Mich. 539; Schwab Clothing Co. v. Railway Co., 71 Mo. App. 241; Kramer v. Gille, 140 Fed. Repr. 682. While the authorities are at variance, the true rule seems to be that the proposed amendment must not change the nature of the cause of action, nor destroy the identity of the original transaction, and that the damages are to be ascertained by the same standard. The amount of the damages claimed may be increased in the ad damnum, if the standard by which to measure the extent of the injury remains the same. Applying this rule to the case at bar, it is clear, that the nature of the cause of action was not changed by the amendment, nor was the identity of the original transaction destroyed, but, it is equally clear, that a different standard for measuring the damages was set up. In the original claim, the difference between the purchase price of the stocks and the highest price at which the same stocks sold up to the time of filing the statement, was stated to be the measure of damages, which were liquidated by the plaintiff upon this basis. The amendment gave plaintiff the right to recover upon the basis of the highest selling price up to the time of trial and increased his damages nearly $60,000.00. The difference between these two standards of measuring damages in speculative stocks, of rapidly fluctuating values, frequently means disaster, the present case being a good illustration. However, in the view we take of this case, it is not necessary to finally decide; (1) whether the mere substitution of a different measure of damages is the introduction of a new cause of action; and (2) whether the amendment substituted an entirely different measure of damages. In none of our cases has it been held, as it has been in some other jurisdictions, that a change in the measure of damages alone, disconnected with any other change in the pleadings amounted to the introduction of a new cause of action. No exception seems to have been taken at the original trial to the allowance of the amendment, and no assignment of error in the present case raises the question here, so that as the record stands we do not feel warranted in finally disposing of it, because the extent of the liability of the sureties is not necessarily dependent upon whether the amendment was properly or improperly allowed.

It is suggested in the argument for appellants that it was necessary for the plaintiff to liquidate his damages before instituting the foreign attachment proceeding because the action would not lie in tort for unliquidated damages. If it was necessary for the plaintiff to liquidate his damages in order to secure the writ of foreign attachment, and he did so, it would follow as of course that all parties to the litigation, including the sureties on the bond, were bound by what the law requires, and the extent of their liability would be measured accordingly. Prior to 1905 the law was that a writ 0‡ foreign attachment would not lie for unliquidated damages arising from tort or breach of contract; but would lie in actions ex contractu when the amount of the demand was ascertained, or, though not liquidated in the strict sense, was susceptible of ascertainment by some standard referable to the contract itself, sufficiently certain to enable the plaintiff by affidavit to aver it, or a jury to find it: Carland v. Cunningham, 37 Pa. 228; Girard Fire & Marine Insurance Co. v. Field, 45 Pa. 129; Strock v. Little, 45 Pa. 416. As late as 1902 this court held in Wood v. Virginia Hot Springs Co., 202 Pa. 40, that a foreign attachment would not lie on a claim founded on tort for unliquidated damages. In this state of the law the act of March 30, 1905, P. L. 76, which amends section 44 of the act of 1836 was passed. This act povides that a writ of foreign attachment may be “issued in all actions ex contractu, and in actions ex delicto for a tort committed within this commonwealth.” The title to the act was amended “so as to make all the provisions of said act apply to certain actions ex delicto as well as to all actions ex contractu.”

While the title made it apply “to certain actions ex delicto,” the body of the act provided that it should apply to actions ex delicto “for a tort committed within the commonwealth.” As both the title and the body of the act express the intention that a writ of foreign attachment may be issued in all actions ex contractu, and in certain actions ex delicto, meaning torts committed within the commonwealth, in which latter case the damages must of necessity be unliquidated, it would seem to necessarily follow that the act means what it says, and that the writ may be issued in all actions ex contractu, including an action for unliquidated damages, and in actions ex delicto for a tort committed within the commonwealth. The legislative history of the passage of the act as well as the express language of its provisions show conclusively that this was the intention of the legislature. Again, it has been suggested, that the writ will not lie against a foreign corporation even for a tort committed within the commonwealth under the act of 1905. To sustain this contention it is argued that foreign corporations were not within the purview of section áá of the act of 1836, which was amended by the act of 1905, but were governed by section 76 of the act of 1836, which was not amended. This is an erroneous view of the effect to be given the act of 1836 as amended by the act of 1905. It is true that section 76 of the act of 1836 did provide for the issuance of a writ of foreign attachment against foreign corporations, either aggregate or sole, but this was merely declaratory of the existing law at that time. The action of foreign attachment in Pennsylvania is based upon one of the customs of London: Laws and Privileges of London, 113-110; Brandon on Foreign Attachment. The purpose of the custom was to compel the appearance of the defendant and this is also true in our state: Fitch v. Ross, 4 S. & R. 557; Albany City Insurance Co. v. Whitney, 70 Pa. 248. Both by the custom and by our statutes the writ lay against a foreign corporation. Under the custom a writ of foreign attachment lay to attach a debt owing to a corporation aggregate: Hamburgh Co., 1 Mod. 212; Mayor & Aldermen of London v. London Joint Stock Bank Co., L. R. 6 App. Cas. 393. In Bushel v. Insurance Co., 15 S. & R. 173, this court held, under our act of 1705, 1 Sm. Laws 45, that a writ of foreign attachment lay against a foreign corporation. This case was decided in 1827, nine years before the act of 1836 was passed, and no doubt this act was passed to make the rule of that case the express statute law of the state. Independently, therefore, of the act of 1836, the writ lay against a foreign corporation. Again, sections 43 to 79 inclusive, of the act of 1836, relate to the practice and proceedings on a writ of foreign attachment, any one section of which is necessarily connected with and dependent upon the other sections. These sections form practically a single statute and deal with one subject of legislation. It is a settled rule of construction that an original statute and all its amendments must be read together, and be viewed as if forming a single act: Morgan v. Hedstrom, 164 N. Y. 224; McKibben v. Lester, 9 Ohio St. 627; Harrell v. Harrell, 8 Fla. 46; Holbrook v. Nichol, 36 Ill. 161. Consequently, the act of 1905 must be read into the act of 1836 and be viewed as forming a part of it. When so understood section 76 will apply in all cases of foreign attachment in which by the amendatory act of 1905 that writ now lies.

It is strongly urged here that the allowance of the amendment about which complaint is made had the effect of discharging the sureties, and the cases cited by both sides relate very largely to this question. We have examined with care all of the cases cited, and many not cited, and have reached the conclusion that the weight of authority is against the contention of appellants, that the sureties are totally discharged by allowing the amendment which resulted in very largely increasing the damages. There is a great variety of opinion on the question and very good authority may be cited in support of either side of it. Much said by the courts in the discussions relate to cases in which a total discharge of the sureties was claimed. No doubt the courts did not look with favor upon a rule, somewhat technical, which had the effect of discharging-sureties from any responsibility whatever, and this may account for the trend of decision relaxing the old rule and holding bail to liability commensurate with the extent of their undertaking. But whatever the reason the weight of authority in modern cases is against the doctrine that the sureties in a case like the one at bar are entirely discharged from any liability because the plaintiff thought proper to increase his claim for damages. In Langley v. Adams, 40 Me. 125, and in several cases in other jurisdictions, it was held that an amendment increasing the ad damnum, had the effect of discharging the bail from all liability. We cannot accept this as a sound rule. If the liability of bail is not increased by such an amendment, it does them no harm, and there is no just ground upon which they can claim to be discharged; on the other hand, the plaintiff should not be debarred from receiving the full amount to which he is entitled on the contract of suretyship, because he may have erroneously or otherwise increased his demand in the cause of action. In its ultimate analysis the real question is what was the contract of the parties. In the present case the condition of the bond is for the payment of the “debt or damages, interest and costs that may be recovered,” but the amount of the debt or damages is measured by the sum demanded in the affidavit of the cause of action. It is upon that amount the penalty of the bond is calculated, and this in right and equity should fix the liability of the bail. If, in the present case, the claim subsequently introduced by way of an amendment had been originally included in the statement the bond demanded would have been $180,000, instead of $65,000. It cannot be assumed that bail who are willing to enter into a bond of $65,000 would have been willing to execute a bond for $180,000; and it would seem to be an act of gross injustice to make them liable for an amount of damages not in contemplation of the parties at the time the bond was given, which they had no reason to anticipate, and of which they had no notice. ' The appellee elected to liquidate his damages by demanding a specific sum in his cause of action and upon this demand the amount of the bond was fixed. Under these circumstances the sum demanded must be regarded as the basis of the contract of suretyship, and the liability of the bail is to be measured by the amount thus demanded. This conclusion is supported by reason and authority and it gives force and effect to the real intention of the parties. Under this rule the appellants are not discharged from all liability, but will be required to pay the damages liquidated by the plaintiff in the original cause of action, together with interest and costs. This was what the sureties undertook to do and they are bound according to their undertaking.

Judgment reversed and record remitted to the court below for the purpose of having judgment entered in accordance with the views herein expressed.


source: Caselaw Access Project

author: Mr. Justice Elicin,

license: Public Domain

text:
    Bank of North America, Appellant v. Penn Motor Car Company.

      Sale — Contract—Change of possession — Rights of creditors— Bailment.

    1. When a vendee or a pledgee, takes title to personal property without taking possession of it, he takes the risk of the integrity and solvency of his vendor or pledgor when the rights of subsequent bona fide purchasers, or of levying creditors, arise.

      Bankruptcy — Federal Act — Bailment—Pledge of automobiles— Possession — Replevin—Act of Congress of June 25, 1910, 86 Stat. at L. 888, amending Section JJ7 of Bankrupt Act.

    2. Where a bank, which has loaned money to the owner of automobiles under an agreement to hold the title to the automobiles as a pledge in the nature of collateral security for the money loaned, permits the automobiles to remain for a time in possession of the borrower, but a few days before bankruptcy proceedings are instituted against the borrower, takes possession of the machines by a writ of replevin, it is not entitled to retain possession of the machines as against the trustee in bankruptcy of the borrower. Under the Act of Congress of June 25, 1910, 38 Stat. at L. 838, amending See. 47 of Bankrupt Act, the trustee has the right to take possession of the machines.
    3. In such a case the trustee in bankruptcy has the same right during the period of four months immediately preceding the filing of the petition in bankruptcy, which an unsatisfied execution creditor would have had, if such creditor had issued an execution and levied upon the automobiles while they were in the possession of the pledgor.
    Mr- Chief Justice Fell and Me.. Justice Brown dissent.
    Argued Jan. 10, 1912.
    Appeal, No. 305, Jan. T., 1911, by plaintiff from order of C. P. No. 1, Phila. Co., Sept. T., 1910, No. 3410, dismissing exceptions to referee’s report in case of Bank of North America v. Penn Motor Car Company.
    Before Fell, C. J., Brown, Mestrezat, Elkin and Stewart, JJ.
    Affirmed.

      Exceptions to report of Richard S. Hunter, Esq., referee.
    From the record it appeared that the action was one in replevin instituted against the Penn Motor Car Company, a few days before its bankruptcy to obtain possession of eighteen motor cars of the alleged aggregate value of $23,080. Of these eleven were taken by the sheriff upon the writ and delivered to the appellant. One was claimed by Oscar Isenberg et al., trading as Roman Automobile Company, who gave security and retained it. The others were returned as eloigned. The National Security Bank and the Tradesmen’s Trust Company then intervened, each claiming title to some of the motor cars which had been delivered to the appellant. Subsequently, William S. Miller intervened first as receiver, and then as trustee in bankruptcy of the Penn Motor Car Company, claiming title to all the motor cars which had been replevied by the appellant.
    By agreement the case was referred to Richard S. Hunter, Esq., as referee, who took testimony and filed his report, finding that as against all the intervenors except William S. Miller, as receiver and trustee in bankruptcy of the Penn Motor Car Company, the appellant was entitled to possession of the cars in question; but that the title of the trustee in bankruptcy was superior to that of the appellant. He also found the value of the cars delivered to the appellant to be $10,368.51. Upon exception he reduced this valuation to $9,978.51; but refused the appellant any further relief. The court below, upon the argument on the exceptions, affirmed the referee’s report without opinion.

      Error assigned was order dismissing the exceptions.

      John G. Johnson, with him James Wilson Bayard, for appellant.
    The title of a pledgee or vendee of personalty who takes possession thereof before any creditor of the pledgor or vendor obtains a lien thereon by-execution is not open to attack in Pennsylvania by such creditor under the subsequently issued execution: Hineman v. Matthews, 138 Pa. 204; Post v. Berwind-White Coal Mining Co., 176 Pa. 297; Davis v. Crompton, 158 Fed. Repr. 735; First Nat. Bank of Pittsburgh v. Guarantee Title & Trust Co., 178 Fed. Repr. 187; Powell v. Clawson, 38 Pa. Super. Ct. 245; Durr v. Replogle, 167 Pa. 347.
    The trustee in bankruptcy of a pledgor or vendor of personalty which, before bankruptcy, has passed into the possession of the vendee thereof, has no title to such property superior to that of the pledgee or vendee: York Mfg. Co. v. Cassell, 201 U. S. 344 (26 Super. Ct. Repr. 481); First Nat. Bank v. Pennsylvania Trust Co., 124 Fed. Repr. 968.

      Henry N. Wessel, with him Francis G. Adler and Alfred Aarons, for appellee.
    A bill of sale of personal property alleged to have been made as collateral security for a loan, must be accompanied by delivery of possession to make it a valid pledge: Reinheimer v. Hemingway, 35 Pa. 432; Swope v. Crawford, 16 Pa. Superior Ct. 474 ; Clow v. Woods, 5 S. & R. 275; Martin v. Mathiot, 14 S. & R. 214; Duplex Printing Press Co. v. Clipper Pub. Co., 213 Pa. 207; In re Beihl, 176 Fed. Repr. 583; White v. Gunn, 205 Pa. 229; American Can Co. v. Preserving Co., 183 Fed. Repr. 96; American Exchange Nat. Bank v. Nat. Bank, 226 Pa. 483; Sholes v. Asphalt Block & Tile Company, 183 Pa. 528.
    Where a creditor does not take possession of personal property, alleged to have been pledged as collateral security for loans such creditor will not be permitted to secure and assert a lien as well as a preference over other creditors by obtaining possession of such property by legal proceedings within a week of the filing of a petition in bankruptcy and without a new consideration after admitted knowledge of facts showing insolvency: In re Sheridan, 3 Am. Bankcy. R. 554; In re McLam, 3 Am. Bankcy. R. 245; In re Mandel, 10 Am. Bankcy. R. 774; In re Hickerson, 20 Am. Bankcy. R. 682; Torrance v. Winfield Nat. Bank, 11 Am. Bankcy. R. 185; In re Foley, 14 Am. Bankcy. R. 829; Allen v. McMannes, 19 Am. Bankcy. R. 276; Roberts v. Johnson, 18 Am. Bankcy. R. 132; Security Warehousing Co. v. Hand, 206 U. S. 415 (27 Super. Ct. Repr. 720); Knapp v. Milwaukee Trust Co., 216 U. S. 545 (30 Super. Ct. Repr. 412); Girard Trust Co. v. Mellor, 156 Pa. 579; Fourth Street Nat. Bank v. Millbourne Mills Co., 172 Fed. Repr. 177; Security Warehousing Co. v. Hand, 19 Am. Bankcy. R. 291; First Nat. Bank v. Title & Trust Co., 178 Fed. Repr. 187; Frost v. Latham, 181 Fed. Repr. 866; In re Hartman, 26 Am. Bankcy. R. 76; Guarantee Title & Trust Co. v. Bank, 26 Am. Bankcy. Rep. 85; In re Hymes Buggy & Implement Co., 130 Fed Repr. 977; In re Forbes, 26 Am. Bankcy. R. 355; Skilton v. Codington, 15 Am. Bankcy. R. 810; Dunn Salmon Co. v. Pillmore, 19 Am. Bankcy. R. 172.
    February 26, 1912:
   Opinion by

Mr. Justice Elicin,

This case was tried without a jury under the act of May 14, 1874, P. L. 166. The referee has found all the material facts and has clearly and comprehensively stated them in his report. The questions involved have received most intelligent consideration and the reasons given for the conclusion reached are indicative of a thorough understanding of the legal principles upon which the rights of the parties depend. The contract entered into between the appellant bank and the motor car company was a perfectly proper one, binding upon the parties according to its terms. Under the contract appellant held title to the automobiles as a pledge in the nature of collateral security for the loans negotiated by the motor car company with the bank. The situation of the parties, the scope and character of their business relations, and the nature of their transactions, clearly indicate that it was the intention of the parties to pledge the motor cars as a security for moneys advanced by the bank to pay for cars purchased by the motor car company from the manufacturers. In this respect the case is clearly within the rule of Western National Bank v. York Silk Manufacturing Company, 225 Pa. 442. The bank held title to the automobiles under the agreement and as against the motor car company had the right to take possession of them with or without the aid of a writ of replevin. As to creditors, the situation is different, and contracts, valid as between parties, are frequently declared invalid as to creditors. This position is not questioned by either party and both sides agree as to the general principles of law applicable to cases of this character. While in later years the courts have recognized exceptions to the rule as laid down in Clow v. Woods, 5 S. & R. 277, the exceptions having become as well established as the rule itself, that case has stood as an authority in Pennsylvania from that time to the present. The rule there announced is that a sale of personal property, leaving the vendor in possession and without doing anything to indicate a change of ownership, is fraudulent as against creditors. The decision was put upon the ground that it would be dangerous to the public to countenance such transactions. It may be conceded, indeed it must be, that the rigor of this rule in later years has been somewhat relaxed, but the rule itself still remains the law of our state. When a vendee, or a pledgee, takes title to personal property, without taking possession of it, he takes the risk of the integrity and solvency of his vendor, or pledgor, when the rights of subsequent bona fide purchasers, or of levying creditors, arise: White v. Gunn, 205 Pa. 229. Appellant does not deny the rule, but insists that it should not be applied to the facts of the present case. It is contended that the rule does not apply because a few days before the motor car company was adjudged a bankrupt, appellant took possession of the cars in dispute, which under its contract it had the right to do, even without seizure by writ of replevin, and that having possession when the bankrupt proceedings were instituted, no matter by what process obtained, the case at bar is distinguished from Clow v. Woods and all the cases that have followed it. Such a distinction can be made, and the argument in support of it has merit, but we are not prepared to say, and for the purposes of the case at bar it is not necessary to finally say, that such a distinction should be made. Primarily, this is a controversy between the trustee in bankruptcy, representing the creditors of the bankrupt estate, and the bank claiming title to the automobiles as pledgee. The rights of creditors, the question of preferential liens, and the rules of procedure, under the bankruptcy laws, must necessarily prevail. The bankruptcy act of 1898 provides, inter alia, “That all levies, judgments, attachments or other liens obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt.....” The act contains many other provisions relating to liens created and transfers of property made for the purpose of giving a preference after insolvency has become known and within the four months’ period. For the purposes of the present case we do not deem it necessary to discuss or determine whether what was done by the parties constitutes a preferential transfer of property within the meaning of the act. This is primarily a question for the federal courts, and, as we do not deem it vital in the determination of the rights of the parties here involved, it may be passed without further discussion. It may also be conceded that in the present case there was no levy, or judgment, or attachment, or other lien obtained through legal proceedings against the bankrupt within four months prior to the filing of the petition in bankruptcy. It is doubtful to say the least whether taking possession of the motor cars by means of a writ of replevin constitutes the obtaining of a lien upon which the act has placed the seal of its disapproval. But the courts have uniformly taken the view that these provisions of the act were intended to prevent preferences and to secure equality in the distribution of bankrupt estates. This has been the underlying thought of all the courts called upon to interpret the bankruptcy act of 1898, and we think it has an important bearing upon the effect to be given the amendment of 1910. This amendment added to section 47 of the original act the following clause: “And such trustees as to all property in the custody, or coming into the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies and powers of a creditor holding a lien by legal or equitable proceedings thereon; and also as to all property not in the custody of the bankruptcy court shall be deemed vested with all the rights, remedies and powers of a judgment creditor holding an execution duly returned unsatisfied.” The manifest purpose of the amendment was to enlarge the rights, remedies and powers of a trustee in bankruptcy, and it had the effect of vesting in the trustee the rights, remedies and powers of a judgment or other creditor having a lien, and of an unsatisfied execution creditor without a lien at the time of instituting bankruptcy proceedings. In other words, the trustee was given the power to assert every right which such creditors could have asserted during the period of four months immediately preceding the filing of the petition in bankruptcy. If a judgment creditor had issued an execution and levied upon the automobiles while they were in the possession of the motor car company, his rights would have been superior to those of the pledgee, and they could have been sold as the property of the pledgor in satisfaction of the debt of the levying creditor. As to the motor cars in dispute here the rights of the parties must be determined as they existed during the entire four months period. If appellant had obtained a judgment on the notes held by it and had issued execution thereon within that period, all proceedings thereunder would have been deemed null and void when the insolvent company was adjudged a bankrupt. It is difficult to see how upon any equitable or legal grounds it should occupy a more advantageous position because it caused a writ of replevin to be issued a few days before the petition in bankruptcy was filed, and, after it must have known of the insolvency of its debtor. When the insolvency became known each creditor did what he could to protect his own interests, and no blame can attach to any one for so doing, but as we view it, appellant did not act soon enough to take the property of the bankrupt out of the grasp of general creditors. The purpose of the original bankruptcy act, as well as the amendment of 1910, was to enforce equality of distribution among all the creditors, to strike down secret liens, and to avoid preferential transfers of property, and as we read the decisions of the Federal Courts the conclusion is irresistible that they so understand and construe the law. This general purpose of the acts would be defeated if the contention of appellant should be sustained in the present case. While the rights of appellant could be asserted under its original contract against the motor car company, they cannot prevail against the general creditors of the bankrupt under the circumstances of this case.

Judgment affirmed.

Mr. Chief Justice Fell and Mr. Justice Brown, dissent.


author: Mr. Justice Mestbezat,

text:
    Mutual Trust Company v. Stern, Appellant.

      Promissory notes — Agreement as to extension — Affidavit of defense — Banks and banking.

    1. In an action upon a promissory note, an affidavit of defense is insufficient which sets up a violation by the plaintiff, a trust company, of an agreement to renew the note, without any averment that the plaintiff’s executive officer, who was alleged to have made the agreement had any authority to do so.
    2. The discounting of commercial paper is a function of the directors of the bank and cannot be delegated to a single officer.
    3. In an action by a trust company on a promissory note, which the company had discounted, and the proceeds of which discount the defendant had received, the defendant cannot set up as a defense that the plaintiff had exceeded its corporate powers in doing a banking business, and discounting the note in suit.
    4. In an action on a promissory note where the affidavit of defense sets up that the defendant was not liable for protest fees as there was no endorser on the note, and the plaintiff then withdraws this item, the matter is de minimis the court may enter judgment against the defendant, if it finds that the affidavit of defense is otherwise insufficient.
    Argued Jan. 12, 1912.
    Appeal, No. 272, Jan. T., 1911, by defendant from order of C. P. No. 1, Phila. Co., June T, 1911, No. 5587, making absolute rule for judgment for want of a sufficient affidavit of defense in case of Mutual Trust Company v. Bernard Stern.
    Before Fell, C. J., Beown, Mestrezat, Stewaet and Moschziskee, JJ.
    Affirmed.
    Assumpsit on a promissory note. Before Beegy, P. J.
    Rule for judgment for want of a sufficient affidavit of defense.
    In addition to the averments of the affidavit of defense set forth in the opinion of the Supreme Court, there were, inter alia, the following averments:
    “Defendant is advised and believes that in no case can he be held liable for the protest fees of this note, inasmuch as there was no endorser other than the maker and the protesting of said note was an unnecessary expense and charge to the defendant. * * * *
    “The defendant is advised that the action of the plaintiff in discounting the defendant’s note as aforesaid was in direct and distinct violation of the Constitution and laws of this Commonwealth; and that said plaintiff company is prohibited by the law from doing a banking business; and that the discounting of the note in suit was against public policy and that the contract, in pursuance of which this note was discounted by the plaintiff, was also against public policy, and that the plaintiff cannot in law recover upon the note so discounted in accordance with this agreement even if the defendant had not the legitimate and equitable defence herein set forth.”
    The court made absolute rule for judgment for want of a sufficient affidavit of defense.

      Error assigned was the order of the court.

      A. 8. AsKbridge, Jr., for appellant.

      Charles H. Edmunds, for appellee.
    February 26, 1912:
   Opinion by

Mr. Justice Mestbezat,

This is an action of assumpsit brought on a promissory note made by the defendant, payable to himself, and by him endorsed and delivered to the plaintiff company. The defendant filed an affidavit in which he sets up two defenses: (a) the plaintiff company violated a contemporaneous parol agreement for the further discounting of his paper, and (b) it was acting beyond its corporate powers in discounting the note in suit.

The learned court below held the affidavit insufficient and entered judgment against the defendant for want of a sufficient affidavit of defense. The affidavit avers that the plaintiff, through its executive officer, entered into an oral agreement to discount the defendant’s note for $2,000 and to discount the notes of other persons; and that it was agreed between the plaintiff and the defendant that any notes so discounted should be from time to time renewed as they matured by payment of five per cent, on the face value of the notes by giving a new note for the balance. This averment is insufficient to prevent judgment. The note in suit was discounted by the board of directors, the authority duly authorized to make the discount. Prima facie the plaintiff’s executive officer, alleged to have made the oral contract to renew and further discount the defendant’s paper, had no authority to make the contract, and there is no averment in the affidavit of defense that he had such authority. The discounting of commercial paper is a function of the directors of a bank and cannot be delegated to a single officer: Bank of United States v. Dunn, 31 U. S. 51, Stewart v. Huntingdon Bank, 11 S. & R. 267. The averment that the plaintiff agreed to extend the time of payment and renew the discounted notes is insufficient in not stating with whom the agreement was made, or that the party who made the alleged agreement was invested with the authority by the bank to make it. It is not sufficient for the defendant to aver generally an agreement between him and the plaintiff corporation to renew the paper. He must set out the facts so that the court, and not he, may determine the existence of the agreement.

The defense of ultra vires to the note in suit cannot be sustained. It is rather singular that it should be interposed under the facts of this case to defeat a recovery on the note. The defendant received the money and has applied it to his own use. He now alleges that the plaintiff company had no authority to make the loan in suit, and avers the wholly inconsistent defense that in pursuance of its agreement the company must continue to exercise powers which it does not possess by renewing the note in suit and making additional loans aggregating four thousand dollars. If the plaintiff had no authority to discount the note in suit, it clearly cannot renew the note or grant an additional loan. Aside from this consideration, however, the defendant having received the money on the discounted note is not in a position to question the authority of the plaintiff to make the loan or to discount the paper. The defendant has received the benefit of the contract, and he cannot now deny the authority of the plaintiff to make it. Having the proceeds of the note in his pocket, neither the law nor common honesty will permit the defendant to avail himself of the plea of ultra vires. In National Bank v. Matthews, 98 United States 621, Mr. Justice Swayne announcing the uniformly accepted doctrine on this subject says (p. 629) : “Where it is a simple question of authority to contract, arising either on a question of regularity of organization or of power conferred by the charter, a party who has had the benefit of the agreement cannot be permitted in an action founded upon it to question its validity. It would be in the highest degree inequitable and unjust to permit a defendant to repudiate a contract, the benefit of which he retains.” Under the facts of this case, the state, and not a private party dealing with the company, may call the latter to account for exceeding its corporate powers.

The matter of the protest fees is de minimis. The plaintiff having withdrawn in the court below the small item from its claim, it was eliminated from the claim and, hence, the rule was properly taken for judgmen for want of a sufficient affidavit of defense. The averment of damages sustained by the defendant by reason of the alleged misconduct of the plaintiff is too general and indefinite to require consideration.

The judgment is affirmed.


author: Mr. Justice Moschzisker,

text:
    Centennial and Memorial Association of Valley Forge.

      Trusts and trustees — Charitable use — Valley Forge — Corporations — Shares.
    1. The Centennial and Memorial Association of Valley Forge incorporated as a corporation of the first class under the Act of April 29, 1874, P. L. 73 “to purchase, improve and preserve the lands and improvements thereon occupied by General George Washington at Valley Forge, and maintain them as a memorial park for all time to come,” was engaged in a public work and its funds, accruing partly from general contributions, and partly from payments made by the State in condemnation proceedings under the Valley Forge Park Act of April 7, 1905, P. L. 117, were properly awarded upon the formal dissolution of the association to the Commissioners of the Valley Forge Park appointed under the Act of May 30, 1893, P. L. 183 “for the purpose of perpetuating and preserving the site upon which the Continental Army under General George Washington was encamped in winter quarters at Valley Forge.”
    2. The fact that the Centennial and Memorial Association of Valley Forge had issued shares of stock was held immaterial in such case where it appeared that such shares lacked the essential features of shares of stock, giving to their owners no rights to dividends, and contemplating no rights to share in the property.
    3. On the dissolution of a charitable association the property of the association does not revert to the donors, nor may it be divided among the members of the association, but it must be appropriated to the purposes most nearly akin to the intent of the donors under the direction of the court.
    4. A charity in a legal sense may be.defined as a gift to be applied consistently with existing laws for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works, or otherwise lessening the burdens of government.
    5. Under the law no public trust or charitable use can fail for want of a trustee.
    Argued Jan. 29, 1912.
    Appeal, No. 314, Jan. T., 1911, by Henry J. Stager and Henry J. Stager, Trustee, from order of C. P. Montgomery Co., June T., 1910, No. 32, dismissing exceptions to auditor’s report In the Matter of the Audit of the Account of the Centennial & Memorial Association of Valley Forge.
    Before Fell, C. J., Brown, Potter, Stewart and Moschzisker, JJ.
    Affirmed.
    Exceptions to report of W. F. Dannehower, Esq., auditor.
    The opinion of the Supreme Court states the case.

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

      James H. Wolfe, for appellant.
    The money was not given gratuitously in this case; it was given for stock, a thing of value, which was sold by the Association and purchased by the exceptants. The money was not given in relief of public burdens or for the advancement of the public good. The public found a burden, not relieved, but imposed, by this Association, in the form of a charge of ten cents per individual, every time a part of the public sought admission to Headquarters of General Washington at Valley Forge, whilst prior to the acquisition of the property by the Association, any person may possibly have been admitted free to the Headquarters by merely asking the owner. How did this Association promote the welfare of the community or of mankind at large, or advance the public good by its ownership of the Headquarters? The public was not the beneficiary when it paid ten cents per capita for admission to the Headquarters, any more than it is the beneficiary when paying five cents per capita to enter trolley cars for a ride in Philadelphia.
    Charity is understood to refer to something done or given for the benefit of our fellows or the public: Knight’s Estate, 159' Pa. 500.

      Samuel W. Pennypacker, with him Richmond L. J ones and J. P. Hale Jenkins, for appellee.
    While the certificates issued were called stock, this was done only for convenience. They had none of the features of stock, except that the holders were entitled to elect directors. They were in effect certificates that the holder had contributed one dollar for the purposes of the 'charity, and were made handsome so that they could be framed as an evidence of patriotic interest: Neiler v. Kelley, 69 Pa. 403.
    This case is controlled by Donohugh’s Appeal, 86 Pa. 306.
    Where a corporation is organized for charitable purposes as for “the protection of the property of our fellow citizens from fire” and not for the private gain of its members, a trust inheres in the property, and the proceeds cannot be divided among its members: Bethlehem Borough v. Perseverance Fire Co., 81 Pa. 445; Boyd v. Insurance Patrol of Phila., 113 Pa. 269; Humane Fire Company’s Appeal, 88 Pa. 389; Riddell v. Harmony Fire Co., 8 Phila. 310; Commonwealth v. Hibernia Fire Engine Co., 1 W. N. C. 187; Thomas v. Ellmaker, 1 Parsons Eq. Cas. 98; Jones v. Renshaw, 130 Pa. 327; Fire Ins. Patrol v. Boyd, 120 Pa. 624.
    February 26, 1912:
   Opinion by

Mr. Justice Moschzisker,

The Centennial and Memorial Association of Valley Forge having been formally dissolved, the question is raised as to the proper distribution of its assets; and this depends upon whether or not the association was a public charity. The fund consists of moneys in the treasury of the corporation paid into Court after its dissolution.. The association was a corporation of the first class created by a decree of the Court of Common Pleas of Montgomery county, July 5, 1878, under the .act of April 29, 1874, P..L. 73, the charter purpose .being, “To purchase, improve and preserve the lands and improvements thereon occupied by General George Washington at Valley Forge, and maintain them as a memorial park for all time to come.” Certificates of stock at the nominal value of one dollar per share were issued to the extent of about 7,600 shares, and 5,000 of these are held by the appellant as trustee for and the representative of the Patriotic Order Sons of America, a patriotic fraternal beneficial association. In 1886 there was a mortgage for $3,000 upon the property, and the Patriotic Order through appeals to its members raised enough money to pay off this incumbrance; the mortgage was not purchased and kept alive, but paid off and satisfied of record. At that time, and in consideration of the money contributed for that purpose, the certificates were issued for the shares represented by the appellant.

By the act of April 13, 1887, P. L. 52, the State appropriated to the Centennial and Memorial Association $5,000 “for the improvement, extension and preservation” of the lands and buildings occupied by Washington as his headquarters at Valley Forge, and this sum was expended in the purchase of additional grounds and improvements. By the act of May 30, 1893, P. L. 183, the Commonwealth appointed a commission (the appellee), “For the purpose of perpetuating and preserving the site on which the Continental Army under General George Washington was encamped in winter quarters at Valley Forge,” and directed the lands and entrenchments to be secured and laid out, preserved and maintained forever as a public place or park by the name of “Valley Forge;” by act of April 7, 1905, P. L. 117, the Commonwealth was given authority to secure the “Headquarters” by the exercise of the right of eminent domain, which they did in that year, and the fund in question arose primarily from the award made to the Centennial and Memorial Association in this condemnation proceeding. Subsequently, upon its petition to the Court of Common Pleas of Montgomery county, the Association was formally dissolved by decree dated May 2, 1910. Thereafter the court appointed the Commissioners of Valley Forge trustees, and by a decree dated October 31, 1911, directed the fund to be paid over to such trustees to carry out the objects and purposes of the charitable use for which the property of the lately dissolved association had been held, in accordance with the trust declared in the charter of that corporation, as before stated. It is from this decree that the present appeal is taken. The appellant is the only subscriber to the fund who asks that the money be paid over to the stockholders for their individual purposes. He is a trustee and therefore properly feels that for his own protection, and that of those he represents, the questions raised ought to be determined by this court.

The act of April 9, 1856, P. L. 293, under which the Centennial and Memorial Association was dissolved, directs that “no property devoted to religious, literary or charitable uses, shall be diverted from the objects for which they were given or granted.” The act of April 26, 1855, P. L. 328, provides that, “No disposition of property hereafter made for any.....charitable use shall fail for want of a trustee;” and the act of May 9, 1889, P. L. 173, provides that no such public trust or “charitable use shall fail for want of a trustee...... but it shall be the duty of any court having equity jurisdiction in the proper county to supply a trustee.” The decree of the court below was in pursuance of these statutes, and the question is, was the Centennial and Memorial Association of Valley Forge a public charity whose charter created a trust which it was the duty of the court to maintain by the appointment of a new trustee to hold the trust fund after the dissolution of that corporation.

As well stated in the opinion of the learned court below, “The attempt to formulate a definition that is so specific as to cover every public charity, is sure to prove a failure. Charitable uses take such varied forms that a specific enumeration of the classes or objects is necessarily defective. The scope of a charitable use is well defined in Perry on Trusts, cited in Ould v. Washington Hospital, 95 U. S. 303, ‘A charitable use, where neither law nor public policy forbids, may be applied to almost anything that tends to promote the well-doing and well-being of social man.’ In Episcopal Academy v. Philadelphia, 150 Pa. 565, this court said, Whatever is gratuitously done or given, in relief of the public burdens or advancement of the public good, is a public charity. In every such case as the public is the beneficiary, the charity is a public charity.’.....” In Fire Ins. Patrol v. Boyd, 120 Pa. 624, we said: “A charity in legal sense may be more fully defined as a gift to be applied consistently with existing laws for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works, or otherwise lessening the burdens of government.”

We feel that the Centennial and Memorial Association of Valley Forge was engaged in a public work, and that the moneys given to it were in relief of a burden that might properly have been assumed by the public. Its charter purpose comprehended a public charity, and the formal public notice of the application for such charter declared the purpose of the association to be “to purchase, hold and improve the Washington Headquarters at Valley Forge and lands adjacent thereto and appropriate them to historical and humane purposes.” There was no provision in the charter or bylaws of the association looking to pecuniary returns to its members, and no dividends were ever paid or com templated. In fact the appellant testified that it was never expected that any moneys would be divided among the stockholders, and that the object was to maintain the “Headquarters” as a memorial. ■ The general public were invited to the grounds and the “Headquarters”; admission to the former was free, but a fee of ten cents was charged for admission to the latter, and the money so received was applied to the expense of a care-taker. While the certificates issued were called “stock” they lacked its essential features, except that the holders were entitled to elect directors, and they appear really to have been intended as certificates that the holders had contributed for the purposes of the charity; they were engraved with some artistic skill and contained a picture of the “Headquarters”, avowedly so that they might be framed and hung up as a testimonial expressive of the patriotic impulses of the contributors. In Neiler v. Kelley, 69 Pa. 403, Mr. Justice Sharswood thus defines stock: “A share of stock is an incorporeal intangible thing. It is a right to a certain proportion of the capital stock of a corporation, never realized except upon the dissolution and winding up of the corporation, with a right to receive in the meantime such profits as may be made and declared in the shape of dividends.” The so-called stock in this case had none of these attributes; it was more like the stock in Donohugh’s Appeal, 86 Pa. 306. There the control of a library was vested in stockholders who were annual contributors and who elected a board of directors. The stock was issued for $40 per share, and was worth $25 in the market. The receipts of the library were applied to its maintenance. The public were permitted to use the books gratuitously within the library buildings, but a small payment was required for the privilege of taking them out, — the stockholders alone being permitted to do so without charge. The court held that the essential feature was that the enterprise was “open to the indefinite public” and that this marked it as a public charity. In the present case the affairs of the Memorial Association were managed in the same way by the stockholders through a board of directors elected by them. The funds raised by contributions and admission fees were applied exclusively to the expenses of the association. In the Donohugh case the library made a small charge to any of the general public who took out books, and here the association made a like charge for admission to the Headquarters. While each of these corporations issued to contributors certificates which they called stock, yet in both instances the object was to found a public charity. In the present case the purchase of a controlling number of shares by the Order represented by the appellant could in no way affect the charitable character of the Memorial Association, and the weight of the evidence is that these purchases were made from patriotic reasons, without any expectation of return, — the contributors knowing that they were simply aiding a worthy public cause. The maintenance of this historic property “for all time to come” as a public memorial of one of the most important events in the great struggle which gave birth to our nation, can well be termed a public duty; and that it has since been so regarded by the Commonwealth is shown by the act of May 30, 1893, supra, and its supplements.

The facts should not be overlooked that the $5,000 appropriated by the State were expended by the Association in the purchase of grounds and improvements, that a large proportion of the funds to be distributed came indirectly from this source, and that one of the avowed purposes of this appropriation was the “preservation of the lands and buildings occupied by General George Washington as his Headquarters at Valley Forge.” We have declared, “A public charity is but a trust and is bound to apply its funds in furtherance of the charity and not otherwise:” Fire Ins. Patrol v. Boyd, supra. “On dissolution the property of a charitable association does not revert to the donors nor may it be divided among the members of the association, but it should be appropriated to the purposes most nearly akin to the intent of the donors under the direction of the court:” 6 Cyc. 977. By the Act of March 30, 1911, 3B. L. 28, the Commissioners of Valley Forge Park were expressly authorized and empowered to accept in trust “Any fund heretofore or hereafter created for the benefit or improvement of Valley Forge Park or any part thereof, by deed, bequest, devise, grant, decree or otherwise.” We entertain no doubt of the right of the court to appoint the commissioners of Valley Forge Park as trustees to hold the present fund, and we are equally convinced of the propriety of that action. But at the same time we feel that the appellant, in raising the questions which we have determined, merely performed his duty as trustee for others who unselfishly and patriotically contributed to maintain an historic property for all the people, at a time when help for that purpose was sorely needed, and that he should not be fixed with the costs.

The assignments of error are overruled and the decree of the court below is affirmed, the costs to be paid out of the fund.


author: Per Curiam,

text:
    Ulrich, Appellant v. McTague.

      Contract — Attorney and client — Incorporation of borough— Signers of petition — Affidavits of Defense.

    An attorney-at-law cannot obtain judgment for want of a sufficient affidavit of defense in an action against the signers of a petition to incorporate a borough, for his professional services in procuring the incorporation, where he does not aver in his statement of claim that the person who brought him the petition was authorized by the defendants to obtain the plaintiff’s services or employ him as an attorney, or aver that the defendants in any way recognized him as acting for them as an attorney in the matter. The mere fact that the defendants were petitioners for the incorporation is not sufficient to impose upon them liability for the attorney’s fees in securing the charter.
    Argued Feb. 14, 1912.
    Appeal, No. 19, Jan. T., 1912, by plaintiff from order of C. P. Schuylkill Co., July T., 1911, No. 270, discharging rule for judgment for want of a sufficient affidavit of defense in case of John O. Ulrich v. John McTague.
    Before Mestrezat, Potter, Elkin and Moschzisker, JJ.
    Affirmed.
    Assumpsit for attorney’s fee. Before Shay, P. J.
    The opinion of the Supreme Court states the case.

      Error assigned was order discharging rule for judgment for want of a sufficient affidavit of defense.

      'William Wilhelm, for appellant.

      John F. Whalen, for appellee.
    February 26, 1912:
   Per Curiam,

This action was brought by plaintiff against a large number of people to recover for services as an attorney at law in procuring the incorporation of the borough of Coal Dale in Schuylkill county. The court discharged a rule for judgment for want of a sufficient affidavit of defense against such of the defendants as filed an affidavit, and the plaintiff took this appeal. The statement avers that “the said petition (for the incorporation) was brought to the said plaintiff by Condy C. Gallagher, one of the persons who signed said petition and made oath to the truth of the allegations contained therein, and requested the plaintiff, on behalf of himself and all other persons who signed or caused to be signed said petition, to act as the attorney for the said petitioners for the purpose of procuring the decree of incorporation as prayed for in said petition.” It is not averred or alleged in the statement that Gallagher was authorized by the defendants to obtain the plaintiff’s services or employ him as an attorney in procuring the borough charter, nor is it averred that the defendants in any way recognized him as acting for them as an attorney in the matter. In the absence of such averments, there can be no liability which would sustain a judgment against the defendants. The mere fact that the defendants were petitioners for the incorporation is not sufficient to impose liability for attorney fees for professional services in securing the charter. A plaintiff must aver in his statement a cause of action before the defendant can be required to deny his liability, and judgment cannot be entered for want of a sufficient affidavit of defense if the statement discloses no cause of action against the defendant.

The order discharging the rule for judgment for want of a sufficient affidavit of defense is affirmed.


text:
    Duffy, Appellant v. York Haven Water & Power Company.

      Appeals — Practice, G. P. — New trial — Judgment n. o. v.

    Where the Supreme Court reverses the court below in granting a judgment non obstante veredicto, but instead of entering judgment on the verdict, awards a procedendo, “so that the court may consider and dispose of the pending motion for a new trial,” the court below may grant a new trial without assigning any reason therefor. Such action, is not an abuse of discretion which will be reviewed by the Supreme Court.
    Argued Feb. 14, 1912.
    Appeal, No. 2, May T., 1912, by plaintiffs from order of C. P. Dauphin Co., March T., 1906, No. 161, granting a new trial in case of James Duffy et al. v. York Haven Water & Power Company.
    Before Mestrezat, Potter, Elkin and Moschzisker, JJ.
    Affirmed.
    Motion for new trial.
    The opinion of the Supreme Court states the case.

      Error assigned was in granting a new trial.

      John R. Geyer and Bernard J. Myers, with them John E. Fox and John E. Malone, for appellants.

      Reynolds D. Brown and Charles L. Bailey, Jr., for appellee.
    February 26, 1912:
   Per Curiam,

When this case was here before, Duffy v. York Haven Water and Power Company, 233 Pa. 107, in concluding the opinion we said: “It appears from the record that the motion for a new trial made by the defendant has not been disposed of. We will, therefore, not direct judgment to be entered on the verdict, but reverse the court in granting the judgment notwithstanding the verdict, and award a procedendo, so that the court may consider and dispose of the pending motion for a new trial.” This was in accord with the prior practice established in Dalmas v. Kemble, 215 Pa. 410, and Bond v. Railroad Company, 218 Pa. 34. The record having been remitted, the learned court heard the parties on the motion for a new trial and made the following order: “We have carefully considered all the testimony in this case and are constrained to conclude that it does not warrant the verdict which has been rendered. We accordingly sustain the pending motion and grant a new trial.” The plaintiffs have appealed from this order, and contend that the action of the court in granting a new trial was an abuse of discretion. We cannot sustain this contention. The authority exercised by the trial court was clearly within what was said in our opinion. We held that the facts appearing on the trial were sufficient to send the case to a jury, and we reversed the court below for entering judgment for the defendant notwithstanding the verdict for the plaintiffs. In granting the new trial the court did not attempt to review our conclusion but, following what we expressly said, considered and disposed of the pending motion for a new trial. The reason for granting the new trial does not appear, nor is it necessary that it should appear. It may be that the learned court thought the verdict was excessive as to which we expressed no opinion.

The order is affirmed.


author: Mr. Justice Potter,

text:
    Mills v. Brandes, Appellant.

      Negligence — Unguarded elevator shaft — Evidence—Liability of Lessee.

    In an action against the lessee of a whole building by an employee of a sub-tenant to recover damages for personal injuries caused by a fall down an unguarded elevator shaft, the plaintiff is not entitled to have her case submitted to the jury, where there is no evidence whatever to show that the defendant or any of his employees left the shaft open, and'the only inference to be drawn from the evidence is that some person whose identity was absolutely unknown, but who was probably an employee of the plaintiff’s employer, negligently used the elevator and left the shaft open.
    Argued Jan. 15, 1912.
    Appeal, No. 321, Jan. T., 1911, by defendant from judgment of C. P. No. 5, Phila. Co., June T., 1904, No. 2505, on verdict for plaintiff in case of Sallie E. Mills v. Moses Brandes, trading as Brandes & Bro.
    Before Brown, Mesteezat, Pottee, Elkin and Moschziskeb, JJ.
    Reversed.
    Trespass to recover damages for personal injuries. Before Martin, P. J.
    The circumstances of the accident are stated in the opinion of the Supreme Court.
    Verdict and judgment for plaintiff for ¡§2,500. Defendant appealed.

      Error assigned was in refusing defendant’s motion for judgment n. o. v.

      Alex. Simpson, Jr., for appellant.
    There was no evidence from which the jury could fairly have found that the defendant or his employees left the trap door open: Huey v. Gahlenbeck, 121 Pa. 238; Pawling v. Hoskins, 132 Pa. 617; Reese v. Clark, 146 Pa. 465; Stringert v. Ross Township, 179 Pa. 614.

      William T. Connor, with him John R. K. Scott, for appellee.
    The negligence was the failure to guard a shaft located in a dark hallway, used as a common entrance, which is. amply established by evidence, and is sufficient to warrant the recovery in this case: Gordon v. Cummings, 152 Mass. 513 (25 N. E. Repr. 978); Pelton v. Schmidt, 104 Mich. 345 (62 N. W. Repr. 552); McKee v. Bidwell, 74 Pa. 218; Clopp v. Mear, 134 Pa. 203; Reid v. Linck, 206 Pa. 109.
    Defendant was bound to keep the hallway, where the elevator shaft was located, in a safe condition: Lewin v. Pauli, 19 Pa. Super. Ct. 447; Thorp v. Boudwin, 228 Pa. 165; Knauss v. Brua, 107 Pa. 85; Fow v. Roberts, 108 Pa. 489; Wunder v. McLean, 134 Pa. 334; Reading v. Reiner, 167 Pa. 41; Brown v. White, 202 Pa. 297.
    March 4, 1912:
   Opinion by

Mr. Justice Potter,

The injuries for which plaintiff here sought to recover, resulted from a fall through an unguarded opening in the first floor of the building in which she was employed. The opening was intended for the passage of a small freight elevator, or hoist, worked by hand, which was located in the hallway near the front door, and extended across a passage leading from the door to a stairway, by which access was had to the upper floors of the building. The hall was short, being only about five and a half feet in length. Under ordinary circumstances, the elevator stood at the first floor, and the floor of the elevator then formed the floor of the passageway, so that persons entering the hall from the street passed directly over the floor of the elevator. The arrangement was such, that when the elevator was raised the opening in the floor of the hallway was expected to be covered by trap doors, working automatically. The defendant in this case was the lessee of the entire building, with the right to sub-let. He retained for his own occupancy only the first floor and basement, and sub-let the upper floors of the building to the firm of Wise & Goodman, by whom the plaintiff was employed. Two front doors opened into the building from the street, one leading directly into defendant’s storeroom, and the other opening into the hallway above described, which gave access to the stairway leading to the upper floors occupied by Wise & Goodman. The elevator seems to have been at the disposal of both firms which occupied the building, but was chiefly used by Wise & Goodman who occupied the upper floors. The only use that defendant had for it was in taking goods to and from the basement.

It appears from the evidence that on the morning of the accident plaintiff came to the premises early. Some of the employees of Wise & Goodman had arrived and gone into the building, but defendant’s place of business was not yet open, and no one connected with it had as yet arrived. It was not shown that defendant or anyone in his employ had anything to do with the elevator on that day. When the plaintiff arrived, she opened the street door, and stepped into the hallway, which was dark, and another step precipitated her into the basement through the hatchway, which was open and unguarded. The elevator had been raised, but whether far enough to operate the trap doors did not appear; at least, they did not come down so as to guard the opening. Obviously the fault was that of the person who had made use of the elevator, and in so doing had left the hatchway unguarded without giving any notice of the danger to persons entering the hallway from the street. Just after the accident, it was noted that the elevator was stationary near the second floor. The natural inference would be that one of the occupants of that floor had brought the elevator to that point. Who that person was, the evidence did not show. But there was nothing to indicate that the defendant was in any way responsible for the movement of the elevator at that time, or for the consequent exposure of the opening in the floor.

We have then the fact of an elevator, used at times by tenants in the building, occupying different floors, and an injury occurring through the negligence of one of the tenants to one who was lawfully in the building. Under such circumstances, the evidence must fix the negligence upon the tenant sued, or there can be no recovery. The trial judge evidently took this view, for, he charged the jury that unless they were satisfied that someone in the employ of the defendant caused the hatchway to be open, there could be no recovery by the plaintiff in this case. It was upon that ground alone that the case was submitted to the jury. Counsel for appellant here urge that there is nothing in the evidence from which the jury could have found that the defendant or anyone in his employ was responsible for the raising of the elevator, and the consequent unguarded condition of the hatchway at the time of the accident. Our examination of all of the testimony compels us to accept this conclusion. We can find nothing to indicate that the defendant was in any way responsible for the position in which the elevator was found at the time of the accident, or for the existence of the open hatchway. Crude as was the arrangement for elevator service in the building, yet it is evident that the plan was not in itself the direct cause of the accident. The proximate cause was the careless use made of the elevator, and the dangerous position in which it was left; that is, the taking of it away from its position at the first floor, in a normal condition of safety, and the consequent leaving of the hatchway open and unguarded, without giving any notice to persons having occasion to use the hallway. For this use, or rather misuse, of the elevator, there is nothing in the evidence to show that the defendant was in any way chargeable. Negligence is a fact to be proven as such. This is not a case of employer and employee, but even if it were, there could be no recovery without showing whose negligence had brought about the accident, which re-suited from uncovering the opening in the floor, and leaving it exposed, without warning to the users of the hallway. Plaintiff wholly failed to make out her case in this essential respect.

It is urged upon behalf of plaintiff that the defendant as lessee of the entire building was bound to take notice of the dangerous condition of the hallway, owing to the location of the elevator and its operation there; and that he was guilty of negligence in permitting such conditions to continue. Whatever may be said as to this, the fault in that respect was not the direct and proximate cause of the accident. That resulted directly, as we have pointed out, from the reckless and negligent manner in which the elevator was used by the person who last moved it away from the first floor. Under the evidence it was not the fault of the defendant.

The first assignment of error is sustained. The judgment is reversed, and is here entered for the defendant,


author: Me. Justice Pottee,

text:
    Lyle v. Armstrong, Appellant.

      Sheriff’s sale — Setting aside sale — Inadequacy of price — Misdescription.

    1. On an appeal from an order refusing to set aside a sheriff’s sale, the appellate court will not consider statements respecting the value of the property sold, unless there is clear proof of an abuse of discretion by the court below in dealing with the question of inadequacy of price.
    2. On a rule to set aside a sheriff’s sale, it appeared that the plaintifE in the execution who was also the mortgagee bid in the property for $2,500. The defendant alleged that it was worth from $85,000 to $100,000. Plaintiff admitted that the property was worth $50,000, but averred, that calculating the amount of the judgment with interest and costs, delinquent and current taxes, and municipal liens filed against it, the total cost to him would be at least $41,800. There was nothing to show that any offer had been made to purchase the property for an amount sufficient to pay the mortgage. Although an insufficient description was alleged, there was no allegation that any one was misled by the description in the advertisements. Held, that the court below was not guilty of any abuse of discretion in refusing to set aside the sale.
    Argued Jan. 16, 1912.
    Appeal, No. 84, Jan. T., 1911, by defendants from order of C. P. No. 2, Phila. Co., June T., 1910, No. 4016, refusing to set aside sheriff’s sale in ease of Franklin L. Lyle v. William Lynn Armstrong, Real Owner, and Amos R. Scott, Mortgagor.
    Before Brown, Mestrezat, Potter, Elkin and Moschzisker, JJ.
    Affirmed.
    Rule to set aside sheriff’s sale.
    The facts are stated in the opinion of the Supreme Court.

      Error assigned was order refusing to set aside sale.

      E. Clinton Rhoads, with him Maxwell H. Kratz,

      Paxson Deeter and John C. Bell, for appellants.
    The cases uniformly hold that inadequacy of price coupled even with slight circumstances of error or mis-description are sufficient ground to set aside a sheriff’s sale: Ritter v. Getz, 161 Pa. 648; Stroup v. Raymond, 183 Pa. 279; Phillips v. Wilson, 164 Pa. 350; Light v. Zeller, 195 Pa. 315; Yost v. Coyle, 226 Pa. 458; Twells v. Conrad, 2 W. N. C. 30; Whitaker v. Birkey, 11 Phila. 199; Com. v. Dasher, 11 Lanc. Bar. 107; Wood v. Boileau, 16 W. N. C. 559; Trust Co. v. Herr, 14 W. N. C. 390.

      Alex. Simpson, Jr., with him I. Hazleton Mirhil, for appellee,
    cited Miller v. Kipple, 2 Pearson 118; Dougherty’s Case, 16 Pa. C. C. R. 214; Felton v. Felton, 175 Pa. 44; Eberly v. Sensenig, 19 Lanc. Law Rev. 333.
    March 4, 1912:
   Opinion by

Me. Justice Pottee,

This is an appeal from the refusal by the court below to set aside a sheriff’s sale of real estate. Inadequacy of price, and insufficiency of description in the advertisements were alleged as reasons for setting aside the sale. In considering an appeal of this kind, we will not consider statements respecting the value of the property sold, unless there is clear proof of an abuse of discretion by the court below, in dealing with the question of inadequacy of price: McKee v. Kerr, 192 Pa. 164; Light v. Zeller, 195 Pa. 315. Appellant relies upon the case of Yost v. Coyle, 226 Pa. 458, but there the circumstances were held to be unusual; the sheriff’s advertisements failed to show that the width of the rear of the lot sold was more than double the width of the front, and the area was incorrectly stated as about 4.000 square feet, while the actual quantity was about 6.000 square feet. It also appeared that the description in the advertisements did not follow that in the levy, as required by a local act of assembly in force in Allegheny county, where the proceedings took place. The court below refused to set aside the sale for these reasons, coupled with inadequacy of price. But this court was persuaded that the misdescription of the property was such as to plainly mislead bidders, and we therefore held that'the discretion of the court below was not properly exercised. The general rule is undoubtedly set forth correctly in Westmoreland Guarantee Bldg. & Loan Assn. v. Nesbit, 21 Pa. Super. Ct. 150. In that case the court below had discharged a rule to set aside a sheriff’s sale, taken on the ground that the representative of the plaintiff in the execution had forgotten to attend the sale and bid on the property, which had consequently sold for an inadequate price. The order was affirmed by the Superior Court, Orlady, J., saying (p. 153): “We are not merely to substitute our view of a discretionary act for that of the court below, but under the clearly defined decisions, are to examine the record, fortified by the presumption that the court below has properly discharged its discretionary duty.” In the present case we find that it was averred in the petition that the property was sold to plaintiff for the sum of $2,500, with an allegation that it was worth from $85,000 to $100,000. But the plaintiff was the mortgagee, and while admitting that the property was worth the sum of $50,000, the answer avers, that calculating the amount of the judgment, with interest and costs, delinquent and current taxes and municipal liens filed against it, the total cost to him would be at least $11,800. There was no allegation in the petition that any offer had been made to purchase the property for an amount sufficient to pay the mortgage. Nor was there any allegation that any one was misled by the description in the advertisements. The criticism of the descriptions evidently did not impress the court below, and it does not appeal to us. Certainly we cannot say that there was any abuse of discretion by the court below in refusing to set aside the sale upon that account. In the depositions which were taken in support of the rule and against it, there was considerable conflicting testimony, as to the value of the property, the character of the buildings, and as to the effect of the. alleged faulty descriptions in the advertisements. There was ample evidence to warrant the court below in finding for the plaintiff upon the questions in dispute. We find in the record nothing to indicate that the court below in any way abused its discretion in discharging the rule to set aside the sale. As was pointed out in Ritter v. Getz, 161 Pa. 648 it is only in extreme cases that we undertake to interfere with the result of the exercise of discretion by the court below, in confirming or setting aside sheriff’s sales; and this is not such a case.

The order is affirmed.


text:
    Lyle v. Armstrong
    (No. 2).

      Mortgage — Foreclosure—Service of process on real owner.

    1. The only effect of failure, on a scire facias sur mortgage, to serve process upon the real owner, is to permit him to make any defense against the purchaser at the sheriff’s sale, that he might have made against the scire facias.

      Sheriff’s sale — Setting aside — Proceedings for possession — Practice, O. P.

      2. Questions relating to the validity of a sheriff’s sale upon the ground of inadequacy of price and insufficiency of description should he raised by motion to set the sale aside and are not properly to be interposed as a defense to a demand by the purchaser for possession. The acknowledgment of the sheriff’s deed cures all irregularities in the proceedings.
    3. In a proceeding by a mortgagee to gain possession of the mortgaged premises which he had bought in at a sheriff’s sale in foreclosure proceedings instituted by himself, a claim against the mortgagee for money damages is not available as a defense on the ground of .misrepresentations by the latter.

      Appeal — Proceedings for possession — Petition and answer-r-Amendment.

    4. On an appeal from an order awarding a writ of possession in proceedings under the Act of April 20, 1905, P. L. 239, an assignment of error charging that the court below erred in entering judgment on an amended petition without allowing the appellant to file an additional answer will not be sustained where it appears that the amendment merely introduced the record of the foreclosure proceedings on which the sale was based, that no objection was apparently made to its allowance, that no exception was taken, and that the record showed no offer to file an additional answer.
    Argued Jan. 16, 1912.
    Appeal, No. 161, Jan. T., 1911, by James I. Comly, from decree of C. P. No. 2, Phila. Co., June T., 1910, No. 4016, awarding writ of possession in case of Franklin L. Lyle v. William Lynn Armstrong, Real Owner and Amos R. Scott, Mortgagor.
    Before Brown, Mestrezat, Potter, Elkin and Moschzisker, JJ.
    Affirmed.
    Petition for writ of possession.
    The facts are stated in the opinion of the Supreme Court.

      Errors assigned were as follows:
    1. The learned court below erred in entering the following decree:
    “And now, May 25th, 1911, on consideration of the petition and answer in the above case, and of the record thereof, it is ordered that judgment be entered in favor of the petitioner, Franklin L. Lyle, and against the respondents, Frederick J. McCabe and James I. Comly, and that a writ of possession forthwith issue in favor of said petitioner to recover possession of the property described in said petition. Respondents to pay the costs.
    “(Signed) M. S.”
    2. The learned court below erred in entering judgment on the petition as amended without opportunity on the part of the respondent to answer the petition as amended.
    3. Under the judgment of the learned court below the appellant is deprived of property without due process of law, within the meaning of the Fourteenth Amendment to the Constitution of the United States, Clause I.

      E. Clinton Rhoads, with him Maxwell H. Kratz, Paxson Deeter and John C. Bell, for appellant.
    There was a total failure of service so far as respondent is concerned: Nevil v. Heinke, 22 Pa. Super. Ct. 614; Gelston v. Donnon, 44 Pa. Super. Ct. 280.
    The sale is void as to appellant, being a fraud on his rights, and not in compliance with acts of Assembly: Louser v. Light, 202 Pa. 582.
    The learned court below erred in entering judgment on the petition as amended, without opportunity to answer.

      Alex. Simpson, Jr., with him I. Hazleton Mirkil, for appellee.
    March 4, 1912:
   Opinion by

Mr. Justice Potter,

The proceedings in this case were under the act of April 20, 1905, P. L. 239, which provides a method by which a purchaser of real estate at a judicial sale may obtain possession. The petition in the present case follows the requirements of the statute. It describes the property, avers petitioner’s title, and by an amendment allowed by the court, the entire record under which the title was acquired, was made part of the petition. It avers that this appellant, James I. Comly, was in possession of the premises, and that due notice was given to him, and that he refused to yield possession. In his answer the respondent denied that the petitioner was the owner of the premises, on the ground that the sheriff’s sale was ineffective to give him title as against respondent, because appellant was the real owner by an unrecorded deed at the time the scire facias was issued; that this fact was known to the petitioner, and that respondent was not made a party to the suit or served with process.. It is admitted that service was made on the real owner as shown by the recorded title.

The only effect of failure to serve process upon the real owner is to permit him to make any defence against the purchaser at the sheriff’s sale, that he might have made against the scire facias: Gelston v. Donnon, 44 Pa. Super. Ct. 280.

The respondent also averred that the sheriff’s sale was void because of inadequacy of price, coupled with insufficient advertisements. That question has been determined adversely to his contention in Lyle v. Armstrong, 235 Pa. 224, in which an opinion has just been filed. It should be noted however that questions relating to the validity of a sheriff’s sale, upon the ground of inadequacy of price and insufficiency of description, are to be raised by a motion to set the sale aside, and are not properly to be interposed as a defense to a demand by the purchaser for possession: Shearer v. Peffer, 155 Pa. 501. The acknowledgment of the sheriff’s deed cures all irregularities in the proceedings: Mencke v. Rosenberg, 202 Pa. 131; Jackson v. Gunton, 26 Pa. Super. Ct. 203. As a defence to the mortgage, appellant contended that plaintiff had violated an agreement to release certain portions of the mortgaged premises. But the answer admits that the written agreement was to release “such portions of the ground and for such consideration as will be satisfactory to the mortgagee.” If there was any prior verbal agreement, as was claimed, it would be merged in the written contract. This proceeding is simply for the possession of the land and any claim for money damages on the ground of misrepresentations by the mortgagee, would not be available as a defence here.

In the second assignment of error, appellant charges that the court below erred in entering judgment on the amended petition without allowing him to file an additional answer. The amendment merely introduced the record of the foreclosure proceedings, and no objection was apparently made to its allowance, nor was any exception taken. The record shows no offer to file an additional answer. In the third assignment of error, appellant suggests that under the judgment of the court below, he was deprived of property without due process of law, and in violation of the Fourteenth Amendment of the Constitution of the United States. This idea seems to have been abandoned upon the argument, as no grounds for the assignment are indicated. We find nothing in the record to justify the suggestion. This case was heard upon petition and answer, under the 8th section of the act of 1905, and the court entered judgment in behalf of the petitioner, and awarded a writ of possession. In its action in this respect, we see no error.

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