author: Mr. Justice Potter,

text:
    Lindsay v. Dutton, Appellant.

      Principal and agent — Real estate broker — Agreement of sale — Evidence.
    1. In an action against a real estate broker to recover secret profits made on a sale of land negotiated by the defendant, the agreement of sale is admissible in evidence, although not in agreement with the averments in plaintiff’s statement of claim to show the fact of the sale and the terms upon which it was made.

      Appeals — Assignments of error — Charge—Exceptions.
    2. An assignment of error to the charge of the court will not be considered where it appears that no exception was taken to the charge at the trial.

      Practice, C. P. — Evidence—Pleading.
    3. At the trial of an action of assumpsit the pleadings in a prior equity suit between the same parties are admissible as admissions to contradict their evidence in the case on trial, or to affect their credibility; but they are not to be taken as estopping the parties against whom they are offered, from taking a different position in the case on the law side of the court.

      Appeals — Assignments of error — Improper assignment.

    4. An assignment of error will not be considered, which does not point out any error committed by the court below, is not based on any exception, and is an attempt to raise in the appellate court a question not raised or considered in the court below.
    Argued Jan. 13, 1910.
    Appeal, No. 311,
    Jan. T., 1910, by defendant, from judgment of C. P. No. 4, Phila. Co., March T., 1908, No. 4,118, on verdict for plaintiffs in case of E. Ella Lindsay, Executrix of Daniel S. Lindsay, deceased, John Eckstein Beatty and George W. Boyer v. Lewis G. Dutton.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Assumpsit for money had and received. Before AudenRIED, J.
    The facts appear by the opinion of the Supreme Court.
    At the trial Mr. Embery offered in evidence agreement between G. Edward Bartram and James McGlinn per G. W. Boyer for the sale of the property that has been identified by the witness, dated July 7, 1905, for a consideration of $12,000, etc.
    Offer objected to, as the agreement is not in accordance with the pleadings.
    Objection overruled.
    Exception noted for defendant by direction of the court. [1]
    Defendant presented these points:
    1. That plaintiffs are estopped from alleging that defendant was a party in interest in said transaction because in a suit brought by defendant, as plaintiff, against the plaintiffs, as defendants, in equity, in C. P. of Delaware county, in which dho subject in dispute was the claim of the plaintiff (Dutton) to an interest in the said property, said pleadings being made a part of the evidence in this,case, plaintiff averred that “the said conveyance was executed in pursuance of an agreement with G. Edward Bartram with which the plaintiff had nothing whatever to do save as set forth in paragraph 3 of this answer,” and in paragraph three plaintiffs aver an agreement with Dutton “ that the said Dutton should become one of the parties in interest in the premises, to have an interest in proportion to the amount he should contribute towards the purchase price of said property, and that Dutton informed the said Boyer that he did not care to become interested in the property and would contribute nothing towards the purchase price. Answer: Refused. [7]
    2. That if defendant agreed to become interested in. the deal and to take an interest in the property in proportion to the amount, he should contribute towards,the purchase price of the property, but before settlement he declined to become interested in the property with the plaintiffs, or to contribute anything towards the purchase price thereof, and the plaintiffs went on and settled for the property and gave defendant no interest therein, that defendant was not a partner and cannot be held liable to account as such for any profit he made from the sale of same. Answer: Refused. [8]
    Verdict and judgment for plaintiffs for $2,390. Defendant appealed.

      Errors assigned were (1) ruling on evidence, quoting the bill of exceptions; (2-6) portions of charge; (7, 8) refusal of defendant’s points and (9) assignment quoted in the opinion of the Supreme Court.

      W. H. Woodward, for appellant.

      Joseph R. Embery, for appellees.
   Opinion by

Mr. Justice Potter,

February 14, 1910:

The basis of the present action is the allegation that defendant, Lewis G. Dutton, a real estate agent doing business in Philadelphia, was the agent of the plaintiffs in this case, in negotiating for the purchase of a certain piece of real estate, and that he made a secret profit in the transaction without the knowledge or consent of his principals, which profit they seek to recover in this suit.

From the record, it appears that there was evidence tending to show the following facts: On March 14, 1905, G. Edward Bartram, who was the owner of a tract of land at Collingdale, Delaware county, entered into an agreement with Dutton, to pay the latter, out of the sum received from the sale of the property, any excess over $10,000 which he might receive. A few weeks afterwards one Jerome Bacon called on Dutton, and asked him to get from Bartram the lowest figure at which the property could be bought. Dutton reported that the lowest price was $12,000. Bacon then saw the plaintiff, George W. Boyer, and told him of the opportunity to buy the land in question, and interested him in the matter. Boyer saw Dutton, and later proposed that they should share the profits on the purchase. Boyer suggested that if he should go to see Bartram he might get the land at a lower figure, but Dutton persuaded him not to do so, saying that he would try to get a reduction in the price. Dutton afterwards reported to Boyer that he had seen Bartram, but could not get the land for a cent less than $12,000. Bartram and Boyer then met, and on July 7,1905, an agreement of sale was made between Bartram and James McGlinn, who was Boyer’s representative, for the consideration of $12,000. The deed was afterwards made to Bacon, who immediately transferred the title to Lindsay, as trustee. Bartram paid Dutton $2,000 out of the purchase money, in cash, and by the cancellation of certain indebtedness. Boyer did not learn until January or February, 1906, of the agreement between Dutton and Bartram, or that Dutton had received any part of the purchase money for the land.

Upon the trial before Audenmed, J., the questions submitted by the court to the jury were two: Whether defendant was agent for plaintiffs; and whether they consented to his receiving the $2,000 from the purchase money for his own benefit. The jury answered the first question in the affirmative, and the second in the negative, and found a verdict for plaintiffs for the full amount of their claim, with interest, upon which judgment was entered. Defendant has appealed, and has filed nine assignments of error.

In the first assignment, counsel for defendant objects to the admission in evidence of the agreement of sale between Bar-tram and McGlinn, upon the ground that it is not in accordance with the averments in plaintiffs’ statement of claim. This assignment was' argued as though it involved the right of plaintiffs to recover; but it does not; it only goes to the admission of the agreement in evidence. This agreement was not the basis of plaintiffs’ action. It was only evidence to be taken in connection with other testimony, showing the fact of sale, and the terms, and it was admissible as such. The substantia] cause of action as set forth in the statement, was the misrepresentation by Dutton of the cost of the property, and the resulting secret profit to himself. And it was upon this cause of action that plaintiffs relied at the trial. The facts that other parties became interested in the agreement after it was made, that the time for settlement was extended, or that slight changes in its terms were made by mutual agreement, cannot affect the question of its admissibility. The price named was the essential feature, and the settlement between Bartram and Boyer was made under the original agreement in that respect. It cannot be pretended that the statement did not give defendant full notice of what he was to meet at the trial, or that he was surprised by the evidence, in this respect.

The second, third, fourth, fifth and sixth assignments all-allege error in the charge of the court. But- the record shows that no exception was-taken to-the charge at the trial; nor was-there any request- that the charge should be reduced to writing and filed of record. These assignments will not therefore be considered. “There must be an- exception -noted to- the charge before verdict to enable the complaining-party to-.successfully assign errors thereto afterwards:”Curtis v. Winston, 186 Pa. 492, 497. “An appeal will be quashed.where the only-errors assigned are to the charge of the court, and -it appears that no exception was taken to the charge at the trial.McConnell v. Penna. R. R. Co., 206 Pa. 370.

It appears that after the settlement with'Bartram for the Collingdale property, and before the present suit was brought,Dutton, the defendant here, filed a bill- in equity in the court of' common pleas of Delaware county, against the present plaintiffs; Bartram and Bacon, in which he -sought to have himself declared a party in interest in the trust created for the property, and Lindsay declared a' trustee for his -benefit. At -the trial of this case, the plaintiffs offered- in evidence the bill; answer and supplemental answer in that case. ■ The 'record, does not show what disposition was made of that-case, or whether any final decree was entered. In his- first point for-charge, in the present case, defendant requested the trial judge to instruct the jury that the plaintiffs were “estopped” from alleging that defendant was a party in interest in the transaction, because in their answer filed in the equity suit, they had made certain statements alleged to be' inconsistent with such an allegation. The refusal of this point by the trial judge is made the subject of the seventh assignment of error. ¡

The pleadings in the equity suit were properly admitted as evidence of admissions by the parties concerned, to contradict their evidence in this case, or to affect their credibility. But they are not to be taken as estopping them from taking a different position in this case. As the seventh point went to the extent of requesting a binding instruction to the, effect that the plaintiffs were “estopped” by their answer in the equity suit; it would have been error for the trial judge to have affirmed the point. The answer could have been taken for nothing more than an admission on their part, to be considered with the other evidence by the jury in this case. The point was properly refused.

In the eighth assignment, error is alleged in the refusal of defendant’s second point, in which the trial judge was asked to instruct the jury that defendant was not a partner, and cannot be held, liable to account as such for any profit made from the sale of the property. This point was not relevant to the issue being tried, and was properly refused. Plaintiffs were not attempting to hold defendant as a partner, but as their agent, and the case was submitted to the jury solely on the question of agency.

The ninth assignment is as follows: “The appellant specifies as error in the cause that it appears from the record that one Jerome Bacon is a party in interest with the plaintiffs in the matter litigated, and by reason of the nonjoinder of said Bacon as plaintiff, the said judgment, if affirmed, will not protect the defendant from a similar suit by said Bacon in regard to the matter actually litigated.” This specification is invalid, as it does not point out any error committed by the court below, is not based on any exception, and is an attempt to raise here a question not raised or considered in the court below. It might, therefore, be dismissed without further comment. It does not, however, appear from the evidence that Bacon was a necessary party plaintiff to this suit. He testified that he had no interest in the purchase of the land, and his only interest was under an agreement made after the settlement, between himself and the plaintiffs, by which he was to receive a share of the profit, if any should be made. Any money recovered from Dutton in this case, will go to reduce the amount of the purchase money, and will belong to those who furnished it. Bacon’s contract was not with Dutton, the defendant, but was with the plaintiffs, and related to the profits only. No such question is involved in the present case.

We see no merit in any of the assignments of error; they are all dismissed, and the judgment is affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Underwood, Appellant, v. Gendell.

      Mandamus — Bight to the writ — Remedy—Municipal contract— Bond — Limitation of action.

    1. In order to obtain a writ of mandamus the applicant must have a right to enforce which is specific, complete and legal, and for which there is no other specific legal remedy; and it will never be granted in cases where if issued, it would prove unavailing.
    2. Where an ordinance of a city provides that municipal contractors shall execute bonds to the city for the protection of subcontractors, and also provides that the subcontractor shall indemnify the city against costs before bringing suit, and that no suit on such bonds can be brought after two years from the date of the bonds, a subcontractor is not entitled after the expiration of the two years to a writ of mandamus to compel the city solicitor to approve a bond of indemnity against costs tendered by the subcontractor.
    3. A provision in a city ordinance that no suit shall be brought on a bond given to the city by a contractor to secure subcontractors, after the expiration of two years from the date of the bond, is not unreasonable, and applies to all subcontractors whose right of action accrued after the passage of the ordinance.
    Argued Jan. 13, 1910.
    Appeal, No. 267,
    Jan. T., 1909, by plaintiff, .from judgment of C. P. No. 1, Phila. Co., June T., 1909, No. 804, overruling demurrer, to return to writ of alternative mandamus in case of William I. Underwood v. J. Howard Gendell, City Solicitor of the City of Philadelphia.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed.
    Petition for mandamus.
    The opinion of the Supreme Court states the case.

      Error assigned was in entering judgment for defendant on the demurrer.

      Horace M. Rumsey, for appellant.
    — The act of the city solicitor, in approving a bond to'indemnify the city against costs, on a suit by a subcontractor or material, man, on the penal bond given by the original contractor to the city of Philadelphia, for the protection of subcontractors and material men, under the terms of the ordinance of March 30, 1896, is a ministerial act and he has no discretion in performing said duty: Smyth v. Titcomb, 31 Me. 272; Breslin v. Earley, 36 Pa. Superior Ct. 49.
    The limitation in the ordinance of March 30, 1896, requiring the penal bond to be given, which provides that “no suit shall be brought upon the same after the expiration of two years from its date,” is invalid: Wilkes-Barre v. Garabed, 11 Pa. Superior Ct. 355; Livingston v. Wolf, 136 Pa. 519; Kneedler v. Norristown, 100 Pa. 368; Com. v. R. R. Co., 23 Pa. Superior Ct. 205; Commissioners v. Gas Co., 12 Pa. 318.
    All limitation acts must allow to claimants a reasonable opportunity to assert their rights in court, and one entirely and manifestly unreasonable in the time it gives, is void: .Cooley on Constitutional Limitations (2d ed.), pp. 340, 341; Pereles v. Watertown, 6 Biss. 79; Hart v. Bostwick, 14 Fla. 162; Berry v. Ransdall, 4 Metc. (Ky.) 292; Ludwig v. Steward, 32 Mich. 27; Coxe v. Martin, 44 Pa. 322.
    The remedy given must be one which recognizes and gives effect to the obligation of the contract, when the wrong grows out of the nonperformance of contract, and it must in any case be a remedy calculated to give redress, and not merely colorable: R. R. Co. v. Hecht, 95 U. S. 168; Tennessee v. Sneed, 96 U. S. 69; McCracken v. Hayward, 43 U. S. 608; Cooley on Constitutional Limitations (2d ed.), p. 341; Terry v. Anderson, 95 U. S. 628; McGahey v. Virginia, 135 U. S. 662; Wheeler v. Jackson, 137 U. S. 245 (11 Sup. Ct. Repr. 43); Phila. to use v. Pierson, 211 Pa. 388.

      Ernest Lowengrund, with him J. Howard Gendell, City Solicitor, for appellee.
    — The limitation was proper: Barber Asphalt Paving Co. v. Erie, 203 Pa. 120; Ins. Co. v. Candle Co., 31 Pa. 448; Hocking v. Ins. Co., 130 Pa. 170; Ins. Co. v. Spring Imp. Co., 100 Pa. 137.
    The authorities are numerous and uniform that the court will not issue a fruitless writ, and compel the performance of an act where no benefit will result to the applicant or relator: High on Extraordinary Remedies, sec. 14; Com. v. Handley, 106 Pa. 245; Com. v. Phila. Comrs., 6 Whart. 476; Com. v. Anthony, 4 W & S. 511.
   Opinion by

Mr. Justice Potter,

February 14,1910:

This is an appeal from the refusal of the court below to grant to the plaintiff a writ of peremptory mandamus, against J. Howard-Gendell, city solicitor of Philadelphia. The petition averred that one George W. Pierson, on February 27, 1901, entered into a contract with the city of Philadelphia to erect a schoolhouse, and on the same date executed a bond to the city, with the Lincoln Savings & Trust Company as surety, conditioned for compliance by the contractor with the provisions of the ordinance of councils of March 30, 1896. The ordinance provides for a penal bond conditioned that thé principal contractor shall.“promptly make payment to all persons supplying him with labor and materials, whether as a subcontractor or otherwise, in the prosecution of the work provided for in such contract.” It is further provided: “Any person or persons making application therefor, and furnishing affidavit to the Department or Bureau, under the direction of which said work is being or has been prosecuted, that labor or materials for the prosecution of such work has been supplied by him or them, and payment for which has not been made, shall be furnished with a certified copy of such contract and bond, upon which said person or persons supplying such labor and materials, either as a subcontractor or otherwise, shall have a right of action, and shall be authorized to bring suit in the name of the City of Philadelphia for his or their use and benefit against said contractor and sureties, and prosecute the same to final judgment and execution. Provided, That such action and its prosecution shall involve the City of Philadelphia in no expense, and that the person or persons so authorized, to bring suit shall first furnish such indemnity to the City of Philadelphia against costs as shall be approved by the City Solicitor. Provided, also, That such bond shall contain a condition that no suit shall be brought upon the same after the expiration of two years from its date ”• • ■.....

It appears that the principal contractor obtained certain millwork and materials from the plaintiff, upon which a balance remains unpaid. Desiring to bring suit therefor, the plaintiff, by his attorney, submitted to the defendant, J. Howard Gendell, who was city solicitor, for his approval, an indemnity bond prepared in accordance with the ordinance of March 30, 1896, with the United States Fidelity & Guaranty Company as surety, but the defendant refused to receive or approve the same, for the reason that the time within which under the ordinance suit might be brought upon the contract- or's bond, had expired; and the bond was therefore ineffective and void. The petitioner prayed for a writ of alternative mandamus, commanding the defendant to receive the bond so tendered, and approve the same, or show cause why he should not do so.

A writ of alternative mandamus was granted, and the defendant filed a return, in which he admitted the facts averred in the petition, and that the surety on the bond was satisfactory to him, and stated that his sole reason for refusing to approve it, was that at the time his approval was requested, more than two years had elapsed since the date of the contractor’s bond, and submitting that his refusal for that reason was proper.

A demurrer to the return was overruled by the court below, and judgment was ordered to be entered for the defendant, and the writ of peremptory mandamus was refused. We think this action was proper. “In order to obtain a writ of mandamus the applicant must have a right to enforce which is specific, complete and legal, and for which there is no other specific legal remedy: ” Heffner v. Com., 28 Pa. 108, 112.

“ Mandamus goes out only where there is a clear legal right in the relator and a corresponding duty upon the defendant:” Com. v. Kessler, 222 Pa. 32, 35.

The right of action upon the bond in question is plainly limited to a period of two years from its date, and the petition of the relator shows that he failed to bring his suit within that time, and he has, therefore, no right of action upon the contract- or’s bond. It would avail him nothing, if the city solicitor should approve his bond in this proceeding. Why should the city solicitor then be required to do a .vain thing?

“It is a fundamental principle of the law of mandamus that the writ, will never be granted in cases where if issued, it would prove unavailing: ” High on Extraordinary Legal Remedies (3d ed., 1896), sec. 14.

“Where the right is, or will become, a mere abstract right, the enforcement of which, by some change of circumstances, can be of no substantial or practical benefit to the petitioner, mandamus will be denied: ” 26 Cyc. L. & Pr. 156.

Counsel for appellant contends that the provision in . the ordinance limiting the right to sue upon the bond to be given by the contractor, to the term of two years, is unreasonable. But the cases which he cites in support of this contention, all relate to the effect of statutes of limitation upon contracts in existence at the time of their.passage. In such cases the statute may, if unreasonable^ impair the obligations of a contract, and for that reason be held void. But the principle would not apply to contacts made when the limitation was in force, and when the parties are presumed to have made their contracts with reference to the statute. Thus in Pereles v. Watertown, 6 Biss. 79, a case relied on by appellant, the court said (pp. 83, 84): “When the statute relates to causes of action accruing after the passage, it may be conceded that the power of the legislature is absolute in fixing the time within which an action shall be prosecuted. In such cases, the parties are supposed to have contracted in reference to it, and the question of its impairing the obligation of the contract would not arise.”

In the present case, before the passage of the ordinance in question, the subcontractor was without remedy against the city, if the principal contractor failed to pay him. The city, by its ordinance, endeavored to protect the subcontractor by requiring a bond for his benefit, .from the contractor. In so doing, it was not unreasonable for the city to require him to take advantage of the security thus voluntarily provided for him, by bringing suit within the period of two years. The remedy provided for him was upon condition that he comply with the terms upon which it was offered. He must take it upon those terms or let it alone.

The assignment of error is overruled, and the judgment is affirmed.


author: Mr. Justice Moschzisker,

text:
    Harnett v. Union Trust Company, Appellant.

      Contract — Building operation — Trusts and trustees.

    Where an owner of a building operation agrees that one of the contractors shall have an equity in certain houses, and a trust company issues a policy insuring the completion of the buildings free from liens, taking as counter indemnity the bond of a person to whom a blanket mortgage is given for his protection on the whole property, and thereafter the properties are all deeded in trust to a clerk of the trust company to convey the equities to the contractor and to protect the holder of the blanket mortgage, and subsequently the contractor releases the equities on the express stipulation that out of the proceeds of a contemplated sale a specified sum should be set apart for him, the trust company cannot disregard such stipulation on the ground that the holder of the blanket mortgage had directed that the proceeds should be paid out to the various mechanics and material men connected with the operation and is liable to the contractor in an action brought by him to recover the sum which he had stipulated should be set apart.
    Argued Jan. 14, 1910.
    Appeal, No. 247,
    Jan. T., 1909, by defendant, from judgment of C. P. No. 1, Phila. Co., March T., 1905, No. 2,301, on verdict for plaintiff in case of James J. Harnett v. Union Trust Company.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moscnzisker, JJ.
    Affirmed.
    Assumpsit for moneys had and received. Before Magill, J.
    The facts are stated in the opinion of the Supreme Court.
    The court gave binding instructions for plaintiff.
    Verdict and judgment for plaintiff for $3,440. Defendant appealed.

      Error assigned was in giving binding instructions for plaintiff.

      J. Quincy Hunsicker, Jr., with him J. Quincy Hunsicker, for appellant, cited:
    Bank v. Douglass, 4 Watts, 95; Miller v. Howry, 3 P. & W. 374; Newton v. Levis, 1 Del. Co. Reps. 28.

      Ira Jewell Williams, of Simpson & Brown, for appellee, cited:
    Schrack v. Shriner, 100 Pa. 451; Smith's Est., 28 W. N. C. 565; Eshbach’s Est., 197 Pa. 153.
   Opinion by

Mr. Justice Moschzisker,

February 14, 1910:

On June 16, 1903, the plaintiff, Harnett, entered into a written contract' with one Purdy, by the terms of which he agreed to do plumbing work on a building operation for .a consideration of $5,750; $3,000 of which was to be paid in cash, and for the balance the plaintiff agreed to take “nine equities of $700 each” in certain of the houses, each subject to a first mortgage of $1,500. The defendant trust company agreed with Purdy to issue pplicies to the holders of the first mortgages insuring the completion of the buildings free from liens; and Purdy agreed that the money derived from the first mortgages, .from the sale of the houses, and from other sources in connection with the operation, should be deposited with the trust company to be disbursed by it. One Prettyman agreed with the trust company to indemnify it against loss under this contract with Purdy, and delivered his bond to the trust company, together with a letter dated June 9, 1903, stating the conditions of its delivery, one of which was that Prettyman was to be given a blanket second mortgage of $20,000 upon the/whole operation, to indemnify him against possible loss by reason of his undertaking. It was also stipulated that the .bond was not to take effect until the various .conditions of the letter were complied with. The bond was subsequently dated June 16, 1903. The mortgage was dated June 1, 1903, but the date of its delivery does not appear upon the record. On June 26, 1903, pursuant .to the contract previously entered into by Purdy and the trust company, the properties in the operation were conveyed to one Andress; a clerk of the trust company who acted as agent for it in the transaction. The same day Andress executed a deed of trust, which, after reciting the first mortgages and the Prettyman second mortgage, declared that “subject as aforesaid” the premises were held in trust to convey to the plaintiff upon the completion of all his plumbing-work, the-nine houses mentioned in his contract, then in trust to protect the trust company, and next for the protection of Prettyman, after which the trust deed provides that upon the sale of any of the houses before the completion of all of them, the trustee is “to convey the same to the purchaser in fee simple, subject only to the first mortgages thereon, provided the purchase money over and above the said mortgages shall be-deposited with the said trust company, to be used by it in defraying the cost of said buildings. ...” This deed of trust was approved and accepted in writing by both Purdy and Pretty-, man. Subsequently certain of the properties, including the nine houses that were to be conveyed to the plaintiff, were sold. It was necessary to get from Prettyman a release of his blanket mortgage, and to get a release from the plaintiff of his right to a conveyance of the nine properties. By a letter dated April 1, 1904, and delivered to the defendant company, May 5, 1904, the plaintiff, stipulating that his action was “with the distinct, understanding that the sum of $2,700 shall be set aside from said sale as my interest in the same,” agreed to release his right to have the properties conveyed to him. June 16, 1904, Prettyman released the properties, and wrote a letter to the defendant company to the effect that the release was given on condition that the money “be ¡deposited in the building fund, and paid out by your company to the various mechanics and material men connected with the said operation.” The money derived from the sale of the nine houses, amounting to more than $2,700, came into the hands of the trust company, but, instead of setting aside the sum of $2,700 to the plaintiff, it used the money in the operation generally. The defendant company admitted the receipt of the plaintiff’s letter setting forth the conditions upon which his release was given, but stated that late in June, 1904, it informed the plaintiff of the instructions from Pretty-man to the effect that his release was given upon condition that the entire proceeds of the sale were to go into the account of the operation, and that it would follow his directions. Purdy made default and did not finish the operation. Pretty-man was obliged to reimburse the defendant company in the sum of $5,400, money advanced by it to complete the houses. The plaintiff sued averring' his rights under the Andress declaration of trust; that he had performed his work and that more than $2,700 was still due and owing to him. The defendant company admitted that the plaintiff had fully performed his work, but asked for binding instructions upon the grouhd that its rights and the rights of Prettyman under the declaration of trust were prior and superior to those of 'the plaintiff; and that- in handling the funds it was a mere depository and had paid all the money to other mechanics and material men in the completion of the buildings. The trial judge declined to so charge and instructed the jury to find for the plaintiff.

All of the material facts were undisputed and most of the evidence was documentary. The first four assignments of error go to the refusal of the trial judge to instruct for the defendant, and to the instructions given for the plaintiff. The fifth assignment of error goes to the exclusion of certain evidence offered by the defendant to show that Purdy was in default and that Prettyman was put -thereby to large expense as surety. This evidence was immaterial „and properly excluded, but in'stating the facts we have treated the important parts of defendant’s offer as if the evidence had been admitted, and we will rule the case on that basis.'

The clause in the declaration of trust to the effect that the' proceeds of the sales of the houses “shall be deposited with the' trust company to be used by it in defraying the costs of said building” cannot be taken to defeat the right of a particular cestui que trust to the proceeds of properties desig-nated for conveyance to him.

Conceding that Prettyman’s -rights as mortgagee were originally prior and superior to those of the plaintiff, the rights of all the parties became fixed and defined in and by the Andress declaration of trust; and the right of the plaintiff thereunder to a conveyance of the nine properties was known both to the defendant and to Prettyman. The plaintiff released this right upon condition that $2,700 obtained from the sale of the properties, should be paid to him. When Prettyman released his mortgage, he gave up any superior right he might otherwise have had over the plaintiff; and when the funds came into the hands of the trust company, it held the $2,700 for the use of the plaintiff. In the words of the trial judge: “When Mr. Prettyman released those houses from the lien of his mortgage with the understanding that the proceeds should be applied to the payment of moneys due or to become due mechanics or material men connected with the operation, he in no sense deprived Mr. Harnett of the right which he had to have the proceeds of the sale of those properties; because under the declaration of trust and under the terms of the agreement he was one of the material men referred to specifically and there is nothing here to show that Mr. Prettyman, when he agreed that the proceeds should be applied to the payment of material men, did not have in mind that the proceeds, at least to the extent necessary to be paid Mr. Harnett for the completion of his contract, were not to be paid out of the proceeds of the sale of those nine houses.”

After receiving the plaintiff’s letter stating the conditions upon which his release was given, and after accepting and retaining the release upon those conditions, the defendant company could not alter nor prejudice the plaintiff’s rights by informing him of its understanding of Prettyman’s instructions relative to the condition upon which his release was delivered, or of its intentions in the matter; so the trial judge committed no error in treating the evidence on that point as immaterial.

The assignments of error are overruled and the judgment affiriiied.


text:
    Luce, Appellant, v. Cook.

      Brokers — Real estate brokers — License tax — Failure to pay tax — Acts of May 27, 1841, P: L. 396, April 10, 1849, P. L. 570, May 15, 1850, P. L 772, June 14,1901, P. L. 565, and April 14,1905, P. L. 161.
    1. The payment of a tax and the securing of a licence' is a condition precedent to the lawful transaction of business by a real estate broker.
    2. A real estate broker who has been.regularly assessed a license tax,, cannot recover a commission fixed by specific contract for the sale of-land when the sale takes place in June and the tax is not paid or the license issued until August of the same year. Subsequent compliance with the law will not cure the illegality of previous transactions. '
    3. The amount of the license tax to be paid by a real estate broket is to be ascertained and assessed on the Volume of business transacted by the broker during the preceding calendar year. .
    Argued Jan. 17, 1910.
    Appeal, No. 8,
    Oct. T., 1909, by plaintiffs, from judgment of C. P. Westmoreland Co., Nov. T„ 1907, No. 605, on verdict for defendant in case of William W.. Luce et al., trading under the firm name of W. W. Luce & Co., v. Joseph Cook.
    Before Fell, C. J., Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Affirmed..
    Assumpsit to recover $6,000 commissions fixed by special contract for the sale of certain coal lands. Before Doty, P. J.
    At the trial the court gave binding instructions for defendant on the ground that at the time the sale was made the plaintiffs had no license as real estate brokers.
    Verdict and judgment for defendant. Plaintiffs appealed.

      Error assigned was in giving binding instructions for defendant.

      Shaw & Silsley, with them E. C. Higbee, for appellants.

      W. J. Sturgiss, of Howell, Sturgis & Morrow, with him

      Moorhead & Smith, for appellee, cited:
    Com. v. Black Co., 223 Pa. 74; Com. v. Manley, 2 Phila. 173; Shaw’s Est., 16 Pa. Dist. Rep. 186.
   Opinion by

Mr. Justice Moschzisker,

February 14, 1910:

The assignments of error raise this question: Can a real estate broker, regularly assessed a license tax, recover a commission fixed by specific contract, for the sale of land, when the sale takes place in June and the tax is not paid or the license issued until August of the same year?

Under the established rule in Pennsylvania, a real estate broker cannot have the aid of the courts to recover commissions which were earned before he had paid his tax and received a license; and the fact that he sues on a special contract will not help him. This rule rests upon the theory that since the law prohibits under a penalty the doing of business by unlicensed brokers, contracts providing for the payment of commissions to such persons are opposed to good morals and public policy and cannot be enforced: Johnson v. Hulings, 103 Pa. 498.

The Act of May 27, 1841, P. L. 396, provides, upon the payment of certain fixed fees, for the commissioning or licensing of stockbrokers “for the term of one year from the date of such commission,” with a provision for the issuing of a new commission “for each succeeding year.” Section 5 provides: “No individual or corporation, other than those duly commissioned under the provisions of this act, shall use or exercise the business or occupation of a stockbroker, etc., under a penalty of five hundred dollars for each and every offense,” etc. Section 18, Act of April 10, 1849, P. L. 570, extends this act to real estate brokers.

It is contended by the appellants that the rule should be modified, for the reason that subsequent legislation has so changed the law that at the present time the license tax to be paid by a real estate broker depends upon the amount of business done by him in each particular year; and that this cannot be ascertained until the end of the year in which the business is transacted.

Section 7, Act of May 15, 1850, P. L. 772, provides: “Hereafter all real estate brokers shall be required to pay annually for their respective commissions or licenses granted in pursuance of the several acts of assembly now in force relating to the same, upon their annual receipts . . . ., three per centum.” Section 8: “The appraisers of mercantile taxes are required to ascertain and assess the several brokers aforesaid, according to the amount of business done by them respectively, in the same manner as required by them in regard to vendors of merchandise.” And sec. 9: “Nothing in this Act shall be taken or held to repeal any obligation, liability, penalty, or duty imposed upon any broker by existing law of this Commonwealth, except only so far as the amount of the tax for a commission or license.” Section 10, Act of May 1, 1841, P. L. 307, classifies vendors of merchandise and provides for the payment of their respective licenses according to the amount of business done, and provides: “Those who are esteemed and taken to make and effect annual sales to the amount of . . . ., shall constitute the .... class, and pay .... dollars;” and so on through the several classes. The Act of April 16, 1845, P. L. 532, sec. 5, provides for the appointment of appraisers “for the purpose of securing the tax now authorized by law to be assessed on wholesale dealers and retail dealers of merchandise.” And sec. 7: “Upon the request of any person or firm, who may allege that he is not properly assessed, it shall be the duty of the treasurer to administer an oath or affirmation, and to interrogate him as to the amount of his sales for the previous year.” Section 12, Act of April 22, 1846, P. L. 486, extends these several sections of the act of 1845 to all the counties of the state. Section 4, Act of April 11, 1862, P. L. 492, provides: “The civil suit for the recovery of the amount of the license shall not be a bar to any proceeding by indictment, where such a proceeding is now authorized by law, but the remedies by the civil action and indictment shall be cumulative.” And sec. 5: “It shall be the duty of every City and County treasurer to sue for the recovery of all licenses .... if not paid on or before the first day of July in each and every year, within ten days after that date.” And this same provision is contained in sec. 7, Act of May 2, 1899, P. L. 184, as amended by the Act of June 14, 1901, P. L. 565, with the exception that thirty days is given within which to bring suit. It appears to be the practice to rate the license on the volume of business transacted during the preceding calendar year, thereby enabling real estate brokers and others to comply with the requirement that a license shall be secured before the business is transacted. We find much in the various acts of assembly just reviewed recognizing, if not providing for this method of assessing the tax, and we find no provision so inconsistent therewith as to make it necessary to declare the method an improper or unlawful one. The Act of May 2, 1899, P. L. 184, providing for a tax on retail vendors and dealers in merchandise, is a recent express recognition of this custom; sec. 4 provides: “The whole volume of business transacted during the preceding calendar year shall be the basis upon which the license is to be rated.” Commonwealth v. Real Estate Trust Company, 211 Pa. 51, states the act of May 27, 1841, to be the foundation of the system for the taxation of brokers, and rules that the seventh section of the act of 1850 merely established a new rate of taxation, leaving the form of the tax as before, a,nd that “the class of persons required to procure a license before engaging in the business was left unchanged.” After this decision the Act of April 14, 1905, P. L. 161, was passed, amending the seventh section of the act of 1850 as amended by the Act of 1901, P. L. 565, by adding the words: “Whether persons, firms or corporations”; but otherwise re-enacting the section as it appears in the act of 1850. The effect of this was to incorporate the section re-enacted into the act of May 27, 1841: Commonwealth v. Black Company, 223 Pa. 74. To summarize, the act of 1841, extended to real estate brokers by the act of 1849, as affected by subsequent legislation, fixes a tax upon such brokers of three per centum of their annual receipts, with a provision that no one shall use or exercise such business or occupation without first paying his tax and taking out a license “under a penalty of five hundred dollars for each and every offense.” The other acts of assembly before referred to provide or indicate the time and manner of making the appraisement upon which the tax or license is to be rated. Under these acts the payment of a tax and the securing of a license is a condition precedent to the lawful transaction of business by a real estate broker.

Subsequent compliance with the law will not cure the illegality of previous transactions: Chicago Building & Manufacturing Company v. Myton, 24 Pa. Superior Ct. 16; Delaware River Quarry, etc., Company v. Bethlehem & Nazareth P. Ry. Company, 204 Pa. 22.

As the appellant had not paid his tax or secured his license! at the time he earned the commissions sued for, he was using and exercising the business of a real estate broker against the plain mandate of the law, and cannot recover.

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


author: Mr. Justice Brown,

text:
    Somerset Colliery Company, Appellant, v. John.

      Set-off — Mortgage—Damages—Evidence—Case for jury.

    Where an owner of coal grants it under a usual mining lease to another, and the lessee as a part of the consideration agrees to make certain improvements costing an amount specified, or to pay the amount to the lessor, but the improvement is not made, and the amount stipulated is not paid, and subsequently the lessor repurchases the coal from the lessee for an amount stated, giving a mortgage for a portion of the purchase money, the lessor in an action on the mortgage may show as a set-off that at the time the mortgage was given it was agreed the amount stipulated should be set off on the deferred payment; but if such testimony is contradicted directly and circumstances are shown which tend to establish its improbability, the case is for the jury, and it is reversible error for the trial judge to peremptorily direct that the jury should allow the set-off.
    Argued Jan. 17, 1910.
    Appeal, No. 17,
    Oct. T., 1910, by plaintiff, from judgment of C. P. Somerset Co., Feb. T., 1905, No. 18, on verdict for plaintiff in case of Somerset Colliery Company v. A. F. John.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elxcin and Moschzisker, JJ.
    Reversed.
    Scire facias sur mortgage. Before Inghram, P. J., specially presiding.

      The facts are stated in the opinion of the Supreme Court.
    The plaintiff presented these points:
    2. The testimony shows certain mine improvements placed by the Somerset Colliery Company on the Somerset Coal Company’s premises, viz.: A secondhand boiler, a large new boiler, a carload of bricks; and these items are partial fulfillment of the $8,000 air mining plant or other mine improvements called for in the supplemental agreement. Said agreement provides that the obligors shall be liable only for any deficit that the costs of said improvements may fall short of said $8,000. This deficit is an unliquidated sum, and cannot be maintained as a set-off against the mortgage in suit, in the absence of agreement to that effect. Answer: Refused. [2]
    3. The proper construction of the mining lease agreement, the supplemental agreement of even date, and the postscript thereto, is that the “ one year additional” mentioned in the postscript means one year additional to the last date upon which all the minimum royalties were fully paid. Answer: Refused. [3]
    4. The minimum amount of coal having been mined and paid for up until December 31, 1902, and the minimum royalty having been fully paid up until September 21, 1903, the date of the mortgage in suit, there was no default by the plaintiff in the erection of an air mining plant or other mine improvements, and the defendant may not set off his claim for $8,000, nor any part of it, against the mortgage debt. Answer: Refused. [4]
    5. The defendant having been the owner and lessor of the mines to the plaintiff, and the person for whose benefit the $8,000 provision in the supplemental agreement of August 28, 1901, was made, and defendant having been the repurchaser of the leasehold interest created by him containing said $8,000 provision, the said leasehold with its said provision was extinguished, merged in the fee, and he can maintain no claim against the , plaintiff under said provision. Answer: Refused. [5]
    6. The defendant took back the property in the condition it was, without the air mining plant, at an agreed price; and against said price can maintain no claim for set-off because the property was not in a different condition. Answer: Refused. [6]
    7. Since the property was repurchased by the defendant in the condition it was, for $70,000, he cannot maintain a defense against payment of the purchase money on the ground that the property was not enhanced in value by the erection of an air mining plant or other mine improvement. Answer: Refused. [7]
    8. None of the defendant’s evidence offered in this case is admissible, and all must be rejected, because any obligation or liability of the Somerset Colliery Company is only undertaken to be shown under contracts and negotiations appearing by said evidence to have been merged into, superseded and closed by the repurchase of the premises by the defendant, A. F. John, and by the execution of the bond and mortgage in suit; and because said evidence tends to vary, alter and contradict the terms of said bond and mortgage declaring the debt at a sum'certain; and because it is not averred in the pleadings that the defendant signed said mortgage and bond upon the inducement that the said set-offs would be allowed him. Answer: Refused. [8]
    9. The verdict cannot be less than the amount of the tender, to wit:. $9,136.16. Answer: Refused. [9]
    Under all the evidence in the case, the verdict must be for the plaintiff for the full amount of its claim. Answer: Refused. [10]
    Verdict and judgment for plaintiff for $11,524.02. Plaintiff appealed.

      Errors assigned amongst others were (2-10) above instructions, quoting them; and (14) in directing the jury to allow the defendant $8,000 as a set-off.

      Ernest O. Kooser and Henry S. Drinker, Jr., with them H. Gordon McCouch and L. C. Colborn, for appellant.
    — The presumption of law is, that the acceptance of a deed in pursuance of articles, is satisfaction of all previous covenants: Seitzinger v. Weaver, 1 Rawle, 377; Wilson v. McNeal, 10 Watts, 422; Madore’s App., 129 Pa. 15.
    The plaintiff had the right to assume the defendant was not claiming this §8,000 because he made no claim: Sinclair v. Tallmadge, 35 Barb. (N. Y.) 602; Gallagher v. Nichols, 60 N. Y. 438.
    IF. H. Ruppel, with him W. H. Koontz and ./, G. Ogle, for appellee.
   Opinion by

Mr. Justice Brown,

February 14,1910:

On August 28, 1901, A. F. John, the appellee, the owner of certain coal lands in Somerset county, granted mining rights in the same to John A. Clark and William A. Somerville. By a supplemental agreement executed on the same day the lessees agreed, as a further consideration for acquiring said rights, that within one year from date they would erect upon the premises an air mining plant or other mining improvements to cost at least $8,000, and, upon failure to do so, would be liable to the lessor “to the amount of a like sum or of any deficit that the cost of said mine improvements may fall short of said sum.” Subsequently Clark and Somerville assigned their mining interests to the Somerset Colliery Company, the present appellant, which, under the agreement of August 28, 1901, assumed all of their covenants. They were both members of that company, Clark being its president. The air mining plant stipulated for by the lessees was not erected, but the appellant submitted evidence showing that two boilers and a carload of bricks had been placed on the premises in partial fulfillment of the stipulation. On August 29, 1903, Clark gave to the appellee an option, running until the fifteenth of the next month, to purchase all the holdings of the Somerset Colliery Company, including the mining rights and property which he had previously conveyed to Clark and Somerville, the price for the same to be $70,000, payable as follows: $35,000 cash on or before October 1, 1903, and the balance in two equal payments in six and twelve months, to be secured by a mortgage. ' John availed himself of his right to purchase the property, paying $35,000 in cash and executing a mortgage for the two deferred payments of $17,500 each. After the second installment became due a scire facias was issued to enforce its payment, and on the trial an offer was made by the defendant to prove the failure of the lessees or their successors to erect the mining plant in accordance with the supplemental agreement of August 28, 1901, and that at the time the mortgage was given it was agreed between the mortgagor and the mortgagee that the question of the payment of the $8,000 should be adjusted when the payments of the mortgage fell due. This offer was objected to and excluded by the court on the ground that the proposed oral testimony of an agreement as to the adjustment of the claim for $8,000 would contradict or change' the terms of the mortgage upon which the plaintiff relied. Judgment having been entered for the plaintiff on the verdict for the full amount of its claim, on appeal to this court it was reversed, for the reason that the court below had misapplied the rule as to contradicting or changing a written instrument by parole, and that as mortgages were not excepted out of the general defalcation act, the defendant was entitled to introduce his set-off in reduction of the amount claimed on the mortgage: Somerset Colliery Co. v. John, 219. Pa. 380. But we did not hold that the set-off was to be allowed without regard to what might be $hown as to the right of the appellee to claim it under the circumstances attending his repurchase of the property. The learned court, however, was of opinion on the second trial that he was entitled to his set-off and so instructed the jury in its charge and in its answer to the sixth point submitted by the defendant. This cannot be approved, for whether any claim that the appellee might have had for failure to comply with the stipulation for the erection of a plant was merged in what he was getting for $70,000, was manifestly a question for the jury. He procured an option to repurchase the property for $70,000, and in exercising the option agreed to pay that sum for it without the improvements upon it, which were to be made by Clark and Somerville or .their successors. At no time until the deed was about to be delivered and the mortgage executed to secure the balance of the purchase money did he say anything about his claim under the supplemental agreement. In making the first payment of $10,000 he said nothing about the claim which he would now assert, and in agreeing to sell to him the appellant might fairly have understood that he was to pay the full 170,000 for what he was getting and that no counterclaim was to be made by him. If it or its predecessors had made improvements to the extent of $8,000, or any less sum, it, in all probability, would have added the sum so expended to the $70,000 asked for the property. Under the court’s peremptory direction that his set-off be allowed he will get for $62,000 that for which he had agreed to pay $70,000.

If the testimony of the appellee, corroborated by another witness, is to be believed by a jury, he will be entitled to a set-off. lie testified that on September 21, 1903, when he and the appellant met for the purpose of passing title and paying and securing the balance of the purchase money, he refused to execute the mortgage unless the $8,000 should be an off-set to it, and that it was agreed before he executed it that the said sum should be set off on the deferred payments. In this he is contradicted by Clark, who testified that, after the appellee had written a check to pay the balance of the cash due, he said, “Shall I take this $8,000 from this payment? ” To this Clark replied, “No, sir, not from this payment or any other.” There was testimony tending to corroborate Clark’s recollection of what occurred.

The first and fourteenth assignments of error are sustained and the judgment is reversed with a venire facias de novo, that a jury may pass, as a question of fact, upon the right of the appellee to a set-off under the supplemental agreement of August 28, 1901.


text:
    Somerset Colliery Company v. John, Appellant.

      Mortgage — Costs—Appeal—Reversal of judgment.

    Where on a trial of a scire facias sur mortgage the plaintiff recovers less than the amount claimed, and only the amount tendered, and the judgment is reversed on appeal by the plaintiff, the defendant on an appeal from the same judgment cannot have the question considered as to his liability for interest, costs and attorney’s commissions. This liability depends on the verdict on the retrial of the case.
    Argued Jan. 17, 1910.
    Appeal, No. 23,
    Oct. T., 1910, by defendant, from judgment of C. P. Somerset Co., Feb. T., 1905, No. 18, on verdict for plaintiff in case of Somerset Colliery Company v. A. F. John.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin and Moschzisker, JJ.
    Appeal dismissed.
    Scire facias sur mortgage.
    The facts appear by the report of Somerset Colliery Co., Appellant, v. John, ante, p. 228.

      Error assigned was as follows: 1. The court erred in making the following order: And now, July 21, 1909, after consideration thereof it is ordered and directed that the rule to show cause why judgment should not be entered in above case without costs, be discharged; it is further ordered and directed that the rule to show cause why judgment should not be entered without attorney’s commission, be discharged.

      W. H. Ruppel, with him W. H. Koontz and J. G. Ogle, for appellant.

      H. Gordon McCouch, L. C. Colburn and Ernest O. Kooser, for appellee.
   Opinion by

Mr. Justice Brown,

February 14, 1910:

On the appeal of the plaintiff in this case we have just reversed the judgment below and ordered a new trial. Whether this appellant will ultimately be liable for interest, costs and attorney’s commission is not now to be decided, for the action is still pending and the amount of the verdict is not to be anticipated.

Appeal dismissed.


author: Mr. Justice Moschizisker,

text:
    Chestnut Street Trust & Saving Fund Company to use, Appellant, v. Record Publishing Company.

      Corporations — President—Promissory notes — Power of president— Statute of limitations — Notice.
    1. Where the stockholders and directors turn over to an officer the full and absolute management of all corporation affairs, and permit him to exercise unrestrained control for a long course of time without instruction from or reference to any other authority, prima facie, the officer so intrusted may be taken to have power to do any act which the directors could authorize or ratify.
    2. Where from its inception, the stockholders and directors of a corporation completely abandon to the president the entire management and control over its affairs, the corporation is liable on its promissory note given by the president without any express authority from the board of directors, or subsequent ratification, where he uses the proceeds for his own purposes and the corporation derives no benefit therefrom, and where the note is given to one paying full value without any knowledge of a wrongful intention on the part of such president.
    3. In such a case the statute of limitations is tolled by payments of interest made through the personal check of the president, he being the owner of almost the whole capital stock of the corporation and in the habit of commingling its funds in one account with those ol' his own. The fact that such president was also the president of the financial institution to which the note was given does not fix the latter corporation with knowledge of a wrongful intent on his part.
    Argued Jan. 19, 1910.
    Appeal, No. 254,
    Jan. T., 1909, by plaintiff, from order of C. P. No. 2, Phila. Co., March T., 1899, No. 170, sustaining exceptions to referee’s report in case of The Chestnut Street Trust & Saving Fund Company, to the use of Richard Y. Cook and George H. Earle, Jr., Assignees for the benefit of the creditors of The Chestnut Street Trust & Saving Fund Company, v. Record Publishing Company.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Reversed.
    Assumpsit on a promissory note. ■
    The case was referred to Dimner Beeber, Esq., as referee.
    The referee reported in favor of the plaintiffs for the full amount of the claim.
    Exceptions to report of the referee were sustained by the court in an opinion by Wiltbank, J., and judgment was entered for the defendant.

      Errors assigned were in dismissing exceptions to report of referee and in entering judgment for defendant.

      P. F. Rothermel, Jr., for appellant.
    — That the note in suit, it having been made by Singerly as president, he having control of the business and finances of the corporation, the borrowing of money and the issuing of notes, is a valid note of The Record Publishing Company is clearly sustained by the authorities: Dougherty v. Hunter, 54 Pa. 380; Culver v. Pocono Spring Water Ice Co., 206 Pa. 481; Tourtelot v. Whithed, 9 N. D. 407 (84 N. W. Repr. 8); Quee Drug Co. v. Plaut, 55 App. Div. 87; Cunningham v. German Ins. Bank, 101 Fed. Repr. 977; Kraft v. Pub. Co., 87 N. Y. 628; First Nat. Bank v. Flour-Mills Co., 39 Fed. Repr. 89; McElroy v. Horse Co., 96 Wis. 317 (71 N. W. Repr. 652); Martin v. Paper Mfg. Co., 44 Hun (N. Y.), 130; Africa v. Tribune Co., 82 Minn. 283 (84 N. W. Repr. 1019); Oakes v. Water Co., 143 N. Y. 430 (38 N. E. Repr. 461); McKiernan v. Lenzen, 56 Cal. 61; Magowan v. Groneweg, 14 S. D. 543 (86 N. W. Repr. 626); Northwestern Fuel Co. v. Lee, 102 Wis. 426 (78 N. W. Repr. 584); St. Clair v. Rutledge, 115 Wis. 583 (92 N. W. Repr. 234).
    Singerly’s knowledge would not be imputed to the trust company: Gunster v. Heat & Power Co., 181 Pa. 327; United Security Life Ins., etc., Co. v. Bank, 185 Pa. 586.

      John G. Johnson, with him James Wilson Bayard, for appellee.
    — The appellant was chargeable with notice that the note was not drawn by the authority, or for the benefit, of the appellee and by its action furthered the improper use of the note. It cannot, therefore, recover thereon: First Nat. Bank v. Darlington, 25 Pa. Superior Ct. 438; Bangor, etc., Ry. Co. v. Slate Co., 203 Pa. 6.
    The present case is much more nearly in accord with the Millward-Cliff Cracker Co.’s Case, 161 Pa. 157, than with the Gunster Case, 181 Pa. 327.
    The note in suit, being a demand note, the present action, which was not brought until more than six years after its date, was barred by the statute of limitations: Swearingen v. Dairy Co., 198 Pa. 68; Andress’ App., 99 Pa. 421; Milne’s App., 99 Pa. 483.
   Opinion by

Mr. Justice Moschizisker,

February 14, 1910:

Three questions are involved in this case: 1. Where from its inception, the stockholders and directors of a corporation completely abandon to the president the entire management and control over its affairs, is the corporation liable on its promissory note given by the president without any express authority from the board of directors, or subsequent ratification; where he uses the proceeds for his own purposes and the corporation derives no benefit therefrom; and where the note is given to one paying full value without any knowledge of a wrongful intention on the part of such president?

2. In such a case is the statute of limitations tolled by payments of interest made through the personal check of the president, he being the owner of almost the whole capital stock of the corporation and in the habit of commingling its funds in one account with those of his own?

3. Would the fact that such president was also the president of the financial institution to which the note was given fix the latter corporation with knowledge of a wrongful intent on his part?

For many years prior to 1890, William M. Singerly was the sole proprietor and owner of a daily'newspaper known as “The Record.” On June 28, 1890, he and four other incorporators organized The Record Publishing Company, corporation defendant. Singerly turned over to the new company the Record newspaper with all of its assets, and received in payment 9,600 shares of the 10,000 shares of capital stock, and also its entire bond issue. These securities were hypothecated for loans to him. He was the president of the company from its organization to the time of his death. The company had no by-laws and no officers designated to give notes. It gave from time to time a number of notes aggregating $500,000, which were signed by Singerly as president, and the proceeds of which, except in one instance, were used by him for his own purposes, and not for the purposes of the company. It does not appear just how or in what form these notes were issued, nor that the directors knew of their issuance. The company was a “one-man” affair, and Singerly managed and controlled all of its business and finances, without instructions from or reference to the officers or stockholders. Neither stockholders nor directors held meetings except for the purpose of organization, and once a year to elect officers. At the time of its organization the ■ board passed the following resolution: “Resolved, that the management and administration of ‘The Record’ be left to the direction of the president.” After passing this resolution the directors abandoned to the president all their active duties. They did nothing to limit or define his powers, or to ascertain how he was managing the affairs of the company. In the words of the referee, they gave him “carte blanche” to do as he pleased, as though the real owner of the property. During .this time Singerly was also the president of the plaintiff corporation, The Chestnut Street Trust & Saving Fund Company, and the owner of a large block of its stock; Although Singerly was president of the trust company, and usually, though not always, the dominant power in its affairs, yet this company was managed by its board of directors, and was not a “one-man” concern like the publishing company. On October 5, 1891, $30,000 was borrowed from the trust company on a note of the publishing company signed by Singerly as president. The payment was made by the check of the trust company, signed by Singerly as its president, and by the treasurer. Singerly received the check and used the funds therefrom for his own purposes, none of them going into the treasury or being used for the benefit of the publishing company. There was no evidence to show that the trust company or any of its officers, aside from Singerly, had knowledge when the loan was made that Singerly intended using the $30,000 for his own purposes; and the whole transaction appears on the books of the trust company as a loan to the publishing company. Bills for interest were regularly rendered to the publishing company. These bills were paid by Singerly’s personal check down to 1897, and were receipted for by the treasurer of the trust company as received from William M. Singerly. When the trust company went into the hands of a receiver, December 4, 1897, a demand was made on the publishing company for payment. This was refused on the ground that Singerly had no authority to give the note, and the company had derived no benefit therefrom. Suit was instituted, and the case went to a referee. The referee found in favor of the trust company, holding that the stockholders and board of directors of the publishing company had abandoned the entire management of the business and the finances of their corporation to the president, and had allowed him absolute control, and therefore the president had the power to borrow money and to give paper binding the corporation. Further, that the statute of limitations was tolled by the payments of interest on the note; that the president had the power to act for the corporation in paying the interest, and the fact that he paid by his individual check would make the payments none the less those of the corporation.

The common pleas reversed, passing over the real ground upon which the referee had placed his findings, and holding that Singerly as its president had no implied authority to give notes in the name of the publishing company; and as the evidence showed no express authority or ratification after knowledge of the transaction, he must be held to have acted without authority, and the company was not bound by his act; and further, holding the claim stale and barred by the statute.

Under the referee’s findings of fact which were expressly adopted by the court below and not attacked here, the fact that'the payments of interest were made by Singerly’s personal checks would not make these payments insufficient to toll the statute. The referee finds that Singerly had a habit of mixing the money belonging to The Record Publishing Company with his individual or personal account, and also with the account of another company in which he was interested. He further finds: “In fact it appears that he used the funds of each one of them indiscriminately by mingling it with the moneys of either one of the other accounts, so that it was impossible to say at any given time just how much of the money of each was deposited in the account of the other. Such being the case, every time that Singerly drew his individual check, so far as the evidence goes, it might just as well have been the money of The Record Publishing Company as the money of Singerly individually.” Aside from this finding by the referee, if a third party pay interest on a debt, and the conduct of the debtor be such as to justify the creditor in assuming that the payments are made with its' authority and on its behalf, though it may appear that the third party is getting an incidental benefit therefrom, this will not prevent such payments from tolling the statute. If the referee were right in holding that Singerly had authority to execute the note, it would follow that he had authority to make the payments of interest. This brings us to a consideration of the question of the authority of Singerly to give the note in the first instance. The by-laws being silent as to the officer authorized to give such notes, it becomes a question of fact to be decided from the evidence. Where the stockholders and directors turn over to an officer the full and absolute management of all corporation affairs, and permit him to exercise unrestrained control for a long course of time without instructions from or reference to any other authority, prima facie the officer so intrusted may be taken to have power to do any act which the directors could authorize or ratify. In the recent case of the First National Bank v. Colonial Hotel Company, 226 Pa. 292, it was held that a general and universal course of dealing by a corporation through a particular officer will give rise to an implied power to act and bind the corporation, and that such implied power will protect one so dealing with the corporation for the first time, even though such person had no previous knowledge of the manner in which the corporation was being conducted. In the present instance, the evidence as to the whole course of conduct of the officers and stockholders of the publishing company in allowing Singerly absolute control was sufficient to justify a finding that he was thereby vested with power to borrow money on the note of the company. If he had such authority he committed no wrong in its exercise, and if after getting the money he misappropriated it, the loss falls upon the publishing company, and not upon the trust company which made the loan without the knowledge of any wicked intention on the part of Singerly. The fact that Singerly may have intended to do a wrong when he borrowed the money would not fix the trust company with such knowledge merely because he happened to be its president and acted in that capacity at the time of the loan. “An exception to the general rule that notice to an agent is notice to a principal arises in case of such conduct of the agent as raises a clear presumption that he would not communicate the fact in controversy, as where the agent acts for himself in his own interest and adversely to that of the principal:” Gunster v. Scranton Illuminating, Heat & Power Co., 181 Pa. 327. There was nothing on the face of the note in this case to put the trust company on notice of an intended wrong and suggest investigation. Had the trust company endeavored to investigate, its only obligation would have been to look for evidence of the power of the president to sign the note, and not to ascertain the use to which the money was to be put. If such an investigation had been made, the trust company would have discovered ample apparent power vested in Singerly to justify it in taking the note.

The assignments of error are sustained; the judgment is reversed, and the record is remitted to the court below with directions to enter judgment for the plaintiff upon the report of the referee.


author: Mr. Justice Stewart,

text:
    Camden & Atlantic Telephone Company, Appellant, v. United States Casualty Company.

      Insurance — Casualty insurance — Death — “Immediate doing of the work of construction.”

    A casualty company indemnified a telephone company against damages for bodily injuries fatal or nonfatal to any person not employed by the assured arising from the operation of the telephone plant, including construction, maintenance and extension of lines. It was stipulated that the policy did “not cover loss from liability for injuries suffered otherwise than during the immediate doing of the work of construction.” The telephone company in constructing its lines trimmed a tree on the land of a person not in its employ. The owner was not satisfied and refused to permit the trimming of the remaining trees unless the tree already cut was trimmed in the maimer which he desired. On the following day the employees of the telephone company proceeded to trim this tree, and while doing so a person not employed by the company was accidentally killed, and the telephone company was compelled to pay damages for his death. Held, that the accident happened “during the immediate doing oí the work of construction,” and that the insurance company was hable.
    Argued Jan. 4, 1910.
    Appeal, No. 189,
    Jan. T., 1909, by plaintiff, from judgment of C. P. No. 1, Phila. Co., June T., 1906, No. 2,556, for defendant non obstante veredicto in case of Camden & Atlantic Telephone Company v. United States Casualty Company.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elkin, Stewart and Moschzisker, JJ.
    Reversed.
    Assumpsit on a policy of indemnity. Before Bregy, P. J.
    The facts are stated in the opinion of the Supreme Court.
    The jury returned a verdict for plaintiff for $5,937.96. Subsequently the court entered judgment for defendant non obstante veredicto.

      Error assigned was in entering judgment for defendant non obstante veredicto.

      James Collins Jones, for appellant.
    — Where a person entitled to indemnity is sued, the indemnitor, if notified of the suit, is bound by the judgment therein: Washington Gaslight Co. v. District of Columbia, 161 U. S. 316 (16 Sup. Ct. Repr. 564); Fowler v. Jersey Shore Boro., 17 Pa. Superior Ct. 366.
    The plaintiff is entitled to have any reasonable doubt in the construction resolved in its favor: American Surety Co. v. Pauly, 170 U. S. 133 (18 Sup. Ct. Repr. 552).

      Maurice W. Sloan, for appellee.
   Opinion by

Mr. Justice Stewart,

February 21, 1910:

We cannot assent to the conclusions reached in the court below with respect to this case. In an action brought against the plaintiff company charging negligence on the part of its employees resulting in the death of a husband, there was a recovery for $4,000. The plaintiff having paid the judgment seeks in the present action to recover from the defendant company indemnity. The policy under which the demand is made assures the plaintiff “ against loss from common-law or statutory liability for damages on account of bodily injuries, fatal, or nonfatal, accidentally suffered within the period of this policy, by any person or persons not employed by the assured, at or about any of the work of the assured described in the schedule hereinafter given in and during the continuance of the work described in the said schedule.” The work described in the schedule is “Telephone Company, overhead wires, operation of plant including construction, maintenance and extension of lines and making of service connections.” It is stipulated in the policy that “it does not cover loss from liability for injuries suffered otherwise than during the immediate doing of the work of construction.” There was no controversy over the facts of the case. The plaintiff company in constructing its line of telephone found it necessary in order to avoid interference with its wires, to trim certain trees upon the land of Snyder. The work began on a tree in front of Snyder’s house. This tree was trimmed in such a way as met the requirements of the company, but not in a way that satisfied Snyder, who accordingly refused permission to the plaintiff to trim the remaining trees, unless it would cut the other limbs from the tree already trimmed. This the plaintiff did the day following, and it was while doing this work that the accident happened for which- there was a recovery against the plaintiff. Binding instructions were given in favor of the plaintiff and a verdict rendered accordingly for $5,937.06. Subsequently, on motion, judgment for defendant non obstante was entered on the ground that the injury for which judgment had been obtained against the plaintiff was not suffered during the immediate doing of the work of construction, and therefore not covered by the policy. We do hot so read the policy. The court’s interpretation of it allows to the saving or excluding clause a meaning entirely too comprehensive. The word “immediate” is not used to define or qualify the term “work of construction”; it is used simply to limit liability for loss resulting from accidents happening in the doing of the work, that work being of course construction work. Whatever may fairly and reasonably be regarded as such work falls within the protection of the policy. The word “immediate” has no significance in this connection. If plaintiff’s workmen when they first trimmed Snyder’s tree, had done just what they did on the second day, and the accident had happened in the course of that work in exactly the same way as it did happen, could it be contended that because the workmen had cut from the tree more than was actually necessary to free the wires from interference, ■ that the loss resulting to plaintiff in consequence of the accident was not within the indemnity of the policy? Certainly the parties contemplated a larger and wider indemnity than any such interpretation as this would allow. It could make no difference that the work over and above what was strictly necessary for the accommodation of plaintiff’s wires had been done at Snyder’s instance and request. He had a right to say how his tree was to be trimmed; that he would allow the branches extending toward his house to be lopped off for the accommodation of the company only on condition that the company would remove the corresponding branches extending outward. The mere fact that the company adopted Snyder’s plan, which involved some additional work in the same connection, would not make it any the less work of construction. How is the case altered by the fact that it was after the tree had been trimmed to meet the necessities of the company, that Snyder required them to trim it further to suit his purpose? Other trees of his would interfere with the proposed line of the company, and immediately upon completion of the work upon the first day on the first tree, he gave notice that these could be interfered with only as the company severed another limb from the tree they had trimmed. It was in doing this additional work that Snyder required of them on the following day, that the accident happened. If Snyder could have required it before the work of trimming this tree was entered upon, he was in position to require it after. If work of construction the first day, it was quite as much work of construction the second day. To call it anything less is to give the saving clause in the policy a comprehensiveness that the parties themselves, in view of the nature and character of the enterprise entered upon, and the purpose of the insurance, could not have contemplated.

The assignment of error is sustained; the judgment is reversed, and it is ordered that judgment be entered in the court below on the verdict for the plaintiff.


author: Mr. Justice Mestrezat,

text:
    Knickerbocker Trust Company, Appellant, v. Ryan.

      Bailment — Lease of cars — Rental—Repairs—Covenant.
    1. A lease of cars was for one year with a privilege to the lessees to cancel at the expiration of four months by giving notice. The rental was $5.00 per car per day. The cars were to be returned to the lessors at the expiration of the lease in as good condition as when received, “ ordinary wear and tear in the service for which said cars are leased, excepted.” Other repairs and replacements were to be made by the lessees. The lessees exercised their option to terminate the lease at the end of four months, and notified the lessors to that effect, stating that the cars would be delivered on a certain day “when rental of same will cease.” The lessors insisted on certain repairs being made, and the lessees made the repairs, all of the cars remaining in their possession in the meantime. In an action to recover rentals for the cars after the date of the tender under a covenant of the lease whereby rentals were to be paid for detention of the cars after the termination of the lease the trial judge charged that if the repairs were merely those made necessary from ordinary wear and tear, the lessees although having made the repairs by mistake would not be liable for the rental. There was evidence that the defects were merely from ordinary wear and tear. Held, that a verdict and judgment for defendants should be sustained.
    2. It is a rule of universal application that in construing a. contract each and every part of it must be taken into consideration and given effect if possible, and that the intention of the parties must be ascertained from the entire instrument. Every sentence and clause in the contract must be considered in arriving at the thought or intention of the parties in making the agreement.
    3. In the above case a check was given for rentals due prior to the notice. On its face it was said that it was in full payment of the contract, giving date of contract. This check was given eleven days and appropriated sixteen days after the expiration of the term and ten days after it was agreed the replacements and repairs should be made, and after two of the cars had been received by the lessors for which rentals were sought to be recovered. Held, that the check was, in the absence of any explanation by the lessors, evidence tending to show an admission that all the rentals accruing under the contract were paid, including those in suit.
    Argued Jan. 5, 1910.
    Appeal, No. 251,
    Jan. T., 1909, by plaintiffs, from judgment of C. P. No. 4, Phila. Co., Dec. T., 1906, No. 3,943, on verdict for defendants in case of Knickerbocker Trust Company and William B. Randall, Trustees, v. James J. Ryan and John A. Kelley, Copartners, trading as Ryan and Kelley.
    Before Fell, C. J., Brown, Mestrezat, Potter, Elicin, Stewart and Moschzisker, JJ.
    Affirmed.
    Assumpsit for rental of cars. Before Carr, J.
    The facts are stated in the opinion of the Supreme Court.
    At the trial the court admitted under objection and exception, defendant’s check for $1,080, dated July 20, 1905.
    Plaintiffs presented these points:
    1. That the damages sustained by the leased cars while in the defendants’ service and which damages were repaired by the defendants after July 9, the date of the expiration of the lease, are not included in the ordinary wear and tear of the cars.
      Answer: That point is refused. Whether it is ordinary wear and tear is a question of fact for the jury. [1]
    4. That inasmuch as the plaintiffs did on June 16, prior to the expiration of the lease, request the defendants to send in an order for parts to be repaired, and that the plaintiffs received no order from the defendants pending the lease, and had no other notice from them or information from any source that an unusual demand would be made for parts, the plaintiffs were not obliged to have on hand ready for immediate delivery, an unusual and unprecedented number of parts to meet the order of the defendants. Answer: That point is refused. Whether the number was unusual and unprecedented is a question of fact, as is also the fulfillment of the plaintiffs’ obligation to have on hand sufficient supplies, and it is for the jury to decide whether the plaintiffs, having the right of inspection at all times, made every reasonable effort and took every reasonable precaution to keep on hand a sufficient quantity of supplies to fill, within a reasonable time, the orders sent in by the defendants. [8]
    8. That under all the evidence, the verdict must be for the plaintiffs. Answer: That point is refused. [9]
    Defendants presented these points:
    1. The claim in suit is for the rental of certain cars leased by the plaintiffs to the defendants under a contract of lease between them dated January 23, 1905. The claim is for rental of the cars after the expiration of the lease on July 9,1905, during the progress of certain repairs which were being made to the cars. It is the uncontradicted evidence that the defendants paid to the Knickerbocker Trust Company, standing for both plaintiffs, on or about July 20, 1905, after the lease expired, $1,080, by the defendants’ check, upon which it was stated that the same was in full payment of contract dated January 23, 1905, and that the said Knickerbocker Trust Company received and used said check without any claim at the time that the'same was not in bill payment of all claims and demands for rentals under said contract. The said receipt of said check, under the circumstances, is prima facie evidence of full settlement, and satisfaction of all demands by the plaintiffs against the defendants for rentals under the contract in suit; and the burden is upon the plaintiffs of explaining said receipt, and of showing why it is not controlling against them. Answer: That point is affirmed. [12]
    2. By the contract in suit the defendants obligated themselves to replace, at their own expense, any and all parts of the cars which might be destroyed during the term of the lease, with like material of equal quality, value, character and construction to the parts destroyed. They at the same time bound themselves, upon the expiration or other termination of (the lease, to return the cars in as good condition as when received, ordinary wear and tear in the service for which the cars were leased, excepted. The above provisions of the lease, interpreted in harmony with each other, mean that the defendants were not obliged to make repairs to the cars after the expiration of the lease, if their condition at that time was due to ordinary wear and tear in the service for which said cars . were leased; and if any parts of the cars were destroyed during the term of the lease due only to ordinary wear and tear in the service for which the said cars were leased, the defendants were not obliged to replace said parts after the expiration of the lease. If, therefore, the jury believes that,, after the expiration of the lease, the cars needed certain replacements of parts destroyed, and certain repairs, but that, the necessity for these replacements of parts and these repairs was due only to ordinary wear and tear in the service for which the cars were leased, they will find a verdict for the defendants. Answer: That point is affirmed. [13]
    Verdict and judgment for defendants. Plaintiffs appealed.

      Errors, assigned among others were (1) admission of check as abové; (7, 8, 9, 12, 13) above instructions, quoting them.

      Charles Heebner, with him Davies, Stone and Auerbach, for appellants.
    — If the lease were silent as to the- duty of replacing parts- destroyed, it would nevertheless have been error to submit to the jury the question whether destruction of parts was included in ordinary wear and tear: Lehigh Coal & Nav. Co. v. Harlan, 27 Pa. 429; McArthur v. Tionesta Gas Co., 28 Pa. Superior Ct. 574.
    Defendants’ check of July 20, 1905, for $1,080, the undisputed amount of rental due at expiration of the lease, delivered in payment of a bill rendered by plaintiffs before expiration, marked, “In full payment under contract,” and deposited and used by plaintiffs, is not admissible in evidence as proof of an acquittance by plaintiffs of rentals accruing after expiration of the term: Tucker v. Murray, 2 Pa. Dist. Rep. 497; Ins. Co. v. Canan, 195 Pa. 589; Bernstein v. Hirsch, 33 Pa. Superior Ct. 87.

      A. H. Wintersteen, for appellees.
    — The rentals “due” are only those which the lessees were obliged to pay and did not. pay; and whether or not the lessees have rendered performance of “other covenants” of the contract, or more particularly, of the covenant for the payment of rentals after termination of the lease, depends upon the meaning of the covenant itself when interpreted with reference to the true meaning of the contract as a whole: Berridge v. Glassey, 112 Pa. 442; Stewart’s Administrators v. Lang, 37 Pa. 201; Miller v. Heller, 7 S. & R. 32; Bickford v. Cooper & Co., 41 Pa. 142.
    The defendants were under no obligation to pay to the appellants rent for the cars after the expiration of the lease, under the facts in evidence, the essential fact being that at the time of expiration they tendered or offered to return to the appellants the cars in the same condition in which they had been received, wear and tear excepted, and the appellants were in duty bound then to receive the cars, but requested the defendants to hold them. All questions of necessary fact involved were properly submitted to the jury, who found for the defendants.
    Under the facts found by the jury, the defendants were not obliged, after the term, to replace the parts of the cars which had been destroyed, or to undertake any repairs at their own expense; and the circumstance that, without any legal obligation to do so, they paid the expense of replacing the parts destroyed and of the repairs, does not justify the appellants’ demand for rental of cars for the period in suit, or involve an admission by the defendants of their liability therefor: Berridge v. Glassey, 112 Pa. 442.
    The defendants’ check of July 20, 1905, for $1,080, having upon its face the statement that it was “in full payment of contract dated January 23,1905,” was admissible on behalf of the defendants and, when taken in connection with the other evidence in the case, was competent evidence for the jury upon the issue whether the appellants had, at the time the check was received by them, accepted it as in full of all rental claims against the defendants under the contract: Washington Nat. Gas Co. v. Johnson, 123 Pa. 576; Bernstein v. Hitsch, 33 Pa. Superior Ct. 87.
   Opinion bt

Mr. Justice Mestrezat,

February 21, 1910:

We are not convinced that there is any reversible error in this record. The statement avers that by the contract the lessees agreed “to pay to the lessors the rental of $5.00 per car for each and every day after the said date of July 9,1905, until said twenty-four cars were returned to the lessors,” and that the totalj number of days fot which the twenty-four cars were held after July 9, the expiration of the term, “was equivalent to the detaining of one car for 1,095 days, for each and every of which days the rental of $5.00 was due from the lessees to the lessors under the terms of the lease, as aforesaid, making the total sum due and payable by the lessees to the lessors $5,475.” The claim is made under covenant second of the lease and, as will be observed, it is for rentals, and not simply for compensation, for the detention of the cars after the termination of the lease.

It is a rule of universal application that in construing a contract each and every part of it must be taken into consideration and given effect if possible, and that the intention of the parties must be ascertained from the entire instrument. Every sentence and clause in the contract must be considered in arriving at the thought or intention of the parties in making the agreement. Interpreted by this rule, we think the lessees were to make only such replacements and repairs to the cars as were not caused by the ordinary wear and tear during the continuance of the lease. The cars were to be returned to the lessors at, the termination of the lease in as good condition as when received, “ordinary wear and tear in the service for which said cars are leased excepted.”

As provided in the contract of January 23, 1905, the cars were delivered to the lessees at Farnhurst, Delaware, and went into the lessees’ service on March 10, 1905. The lessees exercised their option to terminate the lease and advised the lessors on May 31, 1905, that the cars would go out of service at the end of four months, and on July 7, by letter and telegram notified the lessors that the cars would go out of service on July 8, “when rental of same will cease,” the letter stating that the cars would be delivered to the lessors on the P. W. & B. Railroad tracks at Farnhurst, the place named in the contract for their delivery, “where they will be subject to your orders.” The lessors replied to the telegram: “Do not deliver cars to P. W. & B. Hold them for inspection your tracks Farnhurst.” At the same time they wrote to the lessees, saying, inter alia: “We have, therefore, to request that you hold the cars on your track at Farnhurst pending the result of the joint inspection, after which we can furnish you shipping instructions.” It was agreed that the cars should go out of service on July 9, 1905.

The cars were inspected by the representatives of both parties on July 10 (July 9 being Sunday), and it was agreed that certain repairs and replacements were required to put the cars in condition for delivery to the lessors. The lessees made the repairs and the cars were delivered to the lessors at various dates between July 17 and September 21, 1905.

This suit having been brought, the lessees defended on the ground that they having notified the lessors that the cars would go out of service and the rentals would cease on July 9 and the lease being thereby terminated it was the duty of the lessors to accept the cars; that the replacements and repairs necessary to be made to the cars at the expiration of the lease were those resulting from ordinary wear and tear of the service for which the lessee's were not responsible although, by mistake, made by them; that the cars were held by the lessees, not under the lease, but under a special agreement, first for inspection and then for repairs, for the lessors’ account; and that no life remained in the lessees’ obligation to continue to pay rentals after the termination of the lease, once the cars were tendered to the lessors in the condition in which they were to be returned by way of delivery at the place designated in the lease.

The lessors contended that the single issue in the case was whether the lessees were required to pay rent for the leased cars after the expiration of the lease so long as they remained in the possession of the lessees as required in covenant second of the contract, and that the question whether or not the lessees were obliged to make repairs was immaterial and was not an issue in the case. The lessors, the plaintiffs, therefore, claimed they were entitled to binding instructions.

The theory on which the court below tried the cause was that the lessors were required to accept the cars when tendered on July 9, if the repairs were only such as resulted from the ordinary wear and tear while in the lessees’ service and, failing to do so, the latter were not responsible for rentals for their detention while the repairs were being made. The court, therefore, submitted to the jury to find the character of the repairs necessary to be made at the termination of the lease on July 9, and instructed them that if they resulted from the ordinary wear and tear of the cars in the lessees’ service during the lease there could be no recovery, but that the plaintiffs were entitled to a verdict if the repairs and replacements were such as the lessees were required to make. As said above, covenant second must be construed in connection with the other stipulations in the contract, and when so interpreted the learned trial judge cannot be convicted of error in his view of the agreement. The question of fact was; of course, for the jury, -and was properly submitted. Notwithstanding the fact that the lessees made the repairs, there was ample evidence to justify the jury in finding that they were not such as the lessees were required to make under the contract. There was no reason for the lessors refusing to accept the cars on July 9, unless the lessees had failed to make the repairs required by the contract. The lease was at an end, and the balance of the rentals due on the day the cars went out of service was secure. Under the finding of the jury, the tender of the cars by the lessees should have been accepted by the lessors, and hence the action to recover the rentals for the cars since the expiration of the lease cannot be maintained.

We discover no error in the admission of testimony. It is insisted that the check should not have been admitted in evidence. The bill for the rentals from July 1 to July 9 was rendered June 29, 1905, for $1,080, and was paid by check dated July 20, on the face of which it was stated: “ In full payment contract dated January 23, 1905.” The bill was returned to the lessees stamped paid as of July 25. The plaintiffs’ statement, as noted above, avers that the sum claimed in this action is for “rentals” under the contract, and hence the contract as construed by the plaintiffs does not make the distinction, suggested in the plaintiffs’ supplemental brief, between the “rental” to be paid for the use of the cars and the “compensation” to be paid for their detention after the term. The check containing the statement that the rentals due on the contract were paid in full was, in the absence of any explanation by the plaintiffs, evidence tending to show an admission that all the rentals accruing under the contract were paid, including those in suit. The check was given eleven days and appropriated sixteen days after the expiration of the term, and ten days after it was agreed the replacements and repairs should be made, and after two of the cars had been received by the plaintiffs for which rentals are sought to be recovered in tin's action. When the check was used on July 25, the lessors knew that there had then been a delay of sixteen days in delivering the cars, and that the necessary time for repairs would require their further detention, and hence the use of the check, stating on its face to be in full payment of the contract, was, unexplained, in the nature of an admission as of that date that all claims on the contract for rentals were satisfied.

The judgment is affirmed.