author: Mr. Justice Mesteezat,

text:
    Kinnear v. Scenic Railways Company of America, Appellant.

      Trade fixtures — Landlord and tenant — Mortgage—Conflicting claims of lessee and mortgagee. *

    1. The intention which controls and determines whether or not a chattel is annexed and becomes a part of the realty is the intention the parties had at the time it was placed on the property.
    2. A corporation organized for the purpose of maintaining a park for the amusement of the public purchased land for the purpose of its organization, and gave a mortgage for the balance of the unpaid purchase money. Subsequent to the date of the mortgage the park company leased a small portion of the land, including a theater building, then in existence, to a lessee for the purpose of constructing thereon and operating a scenic railway. The consideration was a percentage of the gross receipts derived from the railway. The lease provided that the park company at its option might appoint a cashier to receive all moneys from the sale of tickets; that the plant was at all times to be subject to the inspection and approval of the park company, that the buildings and appliances were to revert to the park company upon the termination of the lease; and that the park company should have the right to buy the leasehold with all buildings and appliances erected and maintained thereon at the end of any park season during the term of the lease. The railway was duly constructed with uprights and supports imbedded in the earth to a distance below the frost line, and with platforms attached to the theater, which was used as a ticket office and a station. While the railway could be taken down and removed without serious injury to the materials, it appeared that the removal of such structures was of infrequent occurrence. After the railway had been operated for two seasons the holder of the mortgage foreclosed, and bought in the park company’s land. Held, that as between the purchaser at the foreclosure sale and the lessee, the railway was the property of the former, inasmuch as it was the intention of both parties at the time of the construction of the device, that it was to be placed on the lessor’s realty as a permanent improvement.
    3. The same rule as to ownership of property and chattels annexed to realty prevails between a mortgagor and mortgagee as between a grantor and grantee and in either case it operates more strongly in favor of the mortgagee or grantee than the landlord where his title is assailed by a lessee.
    Elkin, J., dissents.
    Argued Nov. 4, 1908.
    Appeal, No. 4, Oct. T., 1909, by defendant, from decree of C. P. No. 2, Allegheny Co., July T., 1908, No. 728, on bill in equity in case of James W. Kinnear v. Scenic Railways Company of America.
    Before Fell, Brown, Mestrezat, Potter and Elkin, JJ.
    Affirmed.
    Bill in equity for an injunction. Before Frazer, P. J.
    The facts are stated in the opinion of the Supreme Court.
    The court entered a decree:
    That the Scenic Railways Company of America, the defendant, its officers, agents, servants and employees be, and they are hereby permanently restrained and enjoined from interfering with or attempting to remove from the property upon which the same is located, heretofore known as Luna Park, all those certain buildings and improvements located on the premises above described, known as a one-story frame pagoda entrance with 2,500 feet of surface and elevated railway connected therewith, and all machinery, apparatus and appliances in any way connected therewith or forming a part thereof, now or formerly known as the “Leap the Dips” or “Scenic Railway.”

      Error assigned was the decree of the court.

      Richard B. Bcandrett, with him James E. Barnett and S. G. Nolin, for appellant.
    — Trade fixtures which a tenant for years puts upon leased premises continue to be his personal chattels and are removable by him at the end of the term unless annexed with a clear intent to make them a part of the realty: Elwes v. Maw, 3 East, 28; Van Ness v. Pacard, 27 U. S. 137; Donnelly v. Frick & Lindsay Co. 207 Pa. 597; Thompson Scenic Ry. Co. v. Young, 90 Maryland, 278 (44 Atl. Repr. 1024).
    A tenant’s trade fixture, which is his personal property before and after the period of annexation, continues to be his personal property during that period; it does not become during the period of the annexation a part of the realty, leaving the tenant in the meantime merely a right of removal.
    If the parties agree that in a certain event or upon the performance of a certain condition it shall become the property of the landlord, the fixture continues in the meantime to be the personal property of the tenant until the event happens or the condition is performed: Lemar v. Miles, 4 Watts, 330; Watts v. Lehman, 107 Pa. 106; Morgan v. Negley, 3 Pitts. Repr. 33.
    The intention of the parties as disclosed by the lease was that the property in question, unless purchased in the meantime as provided by the option in the lease, which was not exercised, should remain the personal property of the tenant until the expiration of the seven-year period for which this lease was made: Ashmun v. Williams, 25 Mass. 402; Charlotte Furnace Co. v. Stouffer, 127 Pa. 336.
    Where the annexation can be severed without impairing the value of the security for the mortgage debt as it stood before the improvement, the same character is impressed upon the annexation as between the tenant or other person having a proprietary interest in the thing annexed and the mortgagee of the realty as between the tenant or other proprietor and the mortgagor: Hill v. Sewald, 53 Pa. 271; Sanders v. Davis, L. R. 15 Q. B. Div. 218; Campbell v. Roddy, 44 N. J. Eq. 244 (14 Atl. Repr. 279); Fosdick v. Schall, 99 U. S. 235.

      Frank C. Osbum, with him Kinnear, McCloskey & Best, for appellee.
    — As between the parties in Pennsylvania, and as to all persons claiming under them, both before and after condition broken, a mortgage is a conveyance of a legal title giving the mortgagee immediate right of entry. He is entitled to possession, and if kept out by force can sue in ejectment. If he gets possession there is no remedy known in law by which the mortgagor can regain possession, or sustain any action to regain possession, without payment or offer to pay the mortgage debt, interest and costs: Youngman v. R. R. Co., 65 Pa. 278.
    As to all other parties the legal title remains in the mortgagor: Tryon v. Munson, 77 Pa. 250.
    The authorities also’generally lay down the rule, that inas- • much as the mortgagor cannot confer a greater right upon another than he possesses himself, fixtures annexed by tenant of the mortgagor under a lease executed subsequent to the execution of the mortgage, pass on a foreclosure sale to the purchaser at such sale, and cannot be removed by such tenant: Roberts v. Dauphin Deposit Bank, 19 Pa. 71; Ott v. Sweatman, 166 Pa. 217; Bass Foundry & Machine Works v. Gallentine, 99 Indiana, 525; Nat. Bank of Catasaqua v. North, 160 Pa. 303; Coleman v. Lewis, 27 Pa. 291; Wick v. Bredin, 189 Pa. 83; Gulick v. Heermans, 6 Luz. Leg. Reg. 227; Isman v. Hanscom, 217 Pa. 133; Agnew v. Whitney, 10 Phila. 77; Folsom v. Cook, 115 Pa. 539; Whitney v. Shippen, 89 Pa. 22; Hill v. Sewald, 53 Pa. 271.
    As to what fixtures are, is always a mixed question of law and fact. In all the recent cases, the true criterion has been held to be, the intention on the part of the tenant to remove the fixtures during his term, at the time he placed them upon the property: Vail v. Weaver, 132 Pa. 363; Spencer v. Darlington, 74 Pa. 286; Harris v. Kelly, 13 Atl. Repr. 523; Oves v. Ogelsby, 7 Watts, 106; Muehling v. Muehling, 181 Pa. 483; Darrah v. Baird, 101 Pa. 265.
    January 4, 1909:
   Opinion by

Mr. Justice Mesteezat,

A corporation, whose name was subsequently changed to Luna Park Company, was incorporated February 1, 1905, “ for the purpose of maintaining and operating a park for the amusement, entertainment and recreation of the public.” By deed dated January 18, 1905, the company purchased a tract of land in the thirteenth ward of the city of Pittsburg, containing between sixteen and seventeen acres, on which it erected a number of buildings, improvements and devices, which were used for amusement purposes during the summers of the years 1906, 1907 and 1908. To secure the payment of $75,000, the balance of the unpaid purchase money, the company gave a mortgage on the premises of even date with the deed.

The park company by an agreement dated January 31,1906, leased to J. A. Miller, acting as agent for the appellant company, for the term of seven years, a small portion of the ground purchased by it as stated above, “including the Japanese theater building now located in said park,” for the purpose of constructing thereon and operating a scenic railway, an amusement device generally known as “Leap the Dips.” The consideration was twenty-seven and one-half per cent of the gross receipts derived from the operation of the railway, settlements to be made daily. The agreement provided, inter alia, that the park company at its option might appoint a cashier to receive all moneys from sale of tickets; that the plant should at all times be subject to the inspection and approval of the park company; that the buildings and appliances were to revert to the park company upon the termination of the lease; also that the park company should have the right to buy the leasehold, with all the buildings and appliances erected and contained thereon, at the end of any park season during the term of the lease, provided the purchase was made within sixty days from closing date of any park season, with a reduction of ten per cent of the original cost for each season during which the railroad was operated. The railway was duly constructed by Miller and until the season of 1908 was operated by him and the appellant company, to whom the lease was assigned by Miller.

The park company borrowed 170,000 of the Keystone National Bank and secured the payment of it by a second mortgage upon the park property, dated September 5, 1906, and duly recorded. The cashier of the bank knew of the lease to Miller at the time the mortgage was taken, but did not know that it had been assigned to the appellant company.

As found by the trial judge, “Luna Park is an assemblage of amusement places and devices open to the public, which are changed from time to time to meet the desires of the patrons of the park, an admission fee being charged to the park as well as to the different amusements contained within the park.”

In a proceeding on the mortgage held by the Keystone National Bank against the park company, the property was sold and purchased by plaintiff, the appellee, and conveyed to him by the sheriff by deed dated March 2, 1908. In a similar proceeding on the purchase money mortgage, the property was also sold and purchased by the appellee, and the sheriff conveyed it to him by deed dated May 4,1908. The appellee holds the property as agent and trustee for the Keystone National Bank, whose employees and servants have been in possession of the park and all the property since it became the purchaser under the first sale by the sheriff.

The appellant company claiming the right to remove the scenic railway which it erected on the leased premises, the appellee filed this bill to restrain the appellant from interfering with or attempting to remove the buildings and improvements located on the premises, and erected or constructed by the appellant company. The appellee claims that he is the owner of the property by virtue of his purchase in the proceedings on the mortgages, and the appellant company contends that the lease was ended by the foreclosure of the first mortgage and that therefore it has the right to remove the property in dispute as trade fixtures of a tenant.

The court below found all the material facts, and, inter alia, the following: “The Scenic Railway is one of the best patronized and most profitable amusement features of the park. It is substantially built, with superstructure consisting of uprights and supports imbedded in the earth to a distance below the frost line, and with the platforms attached to the pavilion, or Japanese Theater building, which is used as a ticket office and station for entrance to and exit from the cars. . . . The construction of a scenic railway is such that its superstructure can, without serious injury to the materials used, be taken down and reconstructed in another location. The removal and re-ereetion of such structures is, however, of infrequent occurrence.”

The learned judge held that if the lease had simply given Miller the right to enter upon and erect the scenic railway without any other provisions affecting the question, that the property in dispute might be considered a trade fixture and held to be subject to the law governing such property; but he was of the opinion that the lease determined the rights of the parties and that it “ clearly indicates an intention that the railway and its appliances should be permanent fixtures, and remain in the park until the termination of the lease, when they should become the absolute property of the Park Company.” He, therefore, held that the title to the property passed to the appellee as purchaser of the land under the mortgages. The injunction was granted as prayed for in the bill, and the defendant has taken this appeal.

We think the learned trial judge was correct in holding that the property in dispute was a part of the realty and passed to the purchaser at the sale made under the proceedings on the mortgage. The character of the property, whether personal or a part of the real estate, must be determined by the covenants contained in the agreement of January 31, 1906. That agreement, read in the light of all the circumstances, leaves no doubt of the intention of the parties as to the character of the property. As observed above, the Luna Park Company was incorporated for the purpose of operating an amusement park. The sixteen acres of land owned, by the corporation were purchased to carry out the purpose of the corporation. The object the company had in obtaining title to the land in Pittsburg was to make it a place “for the amusement, entertainment and recreation of the public.” The company erected various devices on the premises for the amusement of the public and has continuously operated the property as a place of amusement since the erection and construction of the buildings.

In view of the purpose for which the charter was obtained by the Luna Park Company and of the fact that the land was purchased by .the company to carry out the purpose, there can be no difficulty in determining that under the terms of the-lease it was the intention of the lessor and lessee that the scenic railway should be annexed to the real estate and become a permanent improvement in the park. The intention which controls and determines whether or not a chattel is annexed and becomes a part of the realty is the intention the parties had at the time it was placed upon the property: Vail v. Weaver, 132 Pa. 363; Carver v. Gough, 153 Pa. 225.

The lease was for seven years and was “of a space in said park for the purpose of constructing and operating thereon an amusement device.” This was the purpose for which the Luna Park Company was chartered and its land was purchased. In leasing this space to Miller, therefore, it was for a purpose to which the lessor was devoting the balance of the park, and instead of the park company erecting the device, it leased the space of ground to Miller for the like purpose of erecting and operating the railway for a limited time. Under the covenants of the lease, the scenic railway was practically under the control of the lessor like the other amusement devices constructed and operated on the park premises. As said by the court in Thompson Scenic Railway Company v. Young, 90 Md. 278: “It (scenic railway) was only available for pleasure resorts and had no general utility.” After the lease expired, it could be utilized by the park company in the operation of the park as a place of amusement. By the terms of the lease the railway was attached to and became a part of the Japanese theater building on the park property and owned by the park company. The lessor company had the authority to appoint a cashier to receive all the moneys from the sale of admission tickets to the railway. The railway was at all times subject to inspection and approval of the park company. The consideration to be paid the company was twenty-seven and one-half per cent of the gross receipts from the operation of the railway, and it was to be paid daily. In addition to these provisions, it is specifically provided in the lease that the buildings and appliances erected by the lessee were to revert to the lessor upon the termination of the lease; and further that the lessor was to have the right to buy the leasehold with the buildings and appliances at the end of any park season during the continuance of the lease by paying ten per cent less than the original cost for each season during which the railway device had been operated. These several provisions of the lease leave no doubt whatever as to the intention of both parties at the time the instrument was executed and the scenic railway was erected on the park premises. The manifest purpose of the lessor was to add another attractive amusement to its park. As we have said, it could have constructed the railway; but it preferred to lease the space of ground and permit the lessee to construct and operate the device for a limited time. Instead of erecting a railway itself and receiving all the receipts from its operation, it gave the lessee the right to construct and operate it by paying the lessor a certain percentage of the receipts. At any time, however, the lessor had the right, by its cashier, to receive all the receipts from the operation of the device, and thereby practically control the financial part of the operation of the railway. As conclusively showing, however, that the improvement was to be permanent, it was agreed that the railway should become the property of the lessor at the termination of the lease. This stipulation, taken in connection with the other provisions of the lease, leaves no doubt of the intention of the parties at the time of the execution of the lease and the construction of the device. If/ as claimed by the lessee, the railway was intended to be a trade fixture removable during the term, contrary to the implied covenant that it should remain during the term and the express covenant that it was to revert to the lessor at the close of the term, the parties should have so stipulated in their contract. Presumably the parties intended exactly what they agreed to in the lease. They have there contracted that the device shall revert to the lessor at the end of the lease. Manifestly this stipulation was to enable the lessor to continue its use on the park premises. The lessor could advantageously utilize it at the very place it was constructed; and while it could be removed by the lessee, yet it would be at a loss to him. There was therefore a substantial reason why the device should remain on the premises at the place it was constructed and this must be considered in determining the intention of the parties as disclosed by their agreement.

The leasehold could be purchased by the lessor at the end of any park season during the continuance of the lease. This does not show, however, that it was not the intention of the parties that the railway should not permanently remain in the park. It is simply a stipulation in the agreement that the leasehold acquired by the lessee shall become the property of the lessor by the payment of the stipulated sum. The lessor could avail itself of this option, or it could await the termination of the lease and pay nothing. The lessee could not remove the device on failure of the lessor to exercise the option. The lessee company was compelled to allow it to remain on the park premises whether the lessor exercised its option to purchase or not. An execution creditor of the lessee could not have levied upon and sold the railway, nor could the purchaser at such sale have removed it. That manifestly would have been a violation of the contract between the parties. The railway was not subject to the control of the lessee or its creditors to the extent of permitting its removal from the lessor’s premises during a continuance of the term. The lessor had a right not only to have the railway remain on the park premises, but also to have it operated thereon so that it could receive its per cent of gross receipts during the lease. The removal of the property by the lessee or its creditors would have been a deprivation of this right which, on application of the lessor, the courts would prevent. The clear and undoubted purpose, therefore, was that the railway should remain on the park premises during the continuance of the lease and thereafter-revert to the lessor.

As the agreement between the parties fixes the character of the improvement, we need not determine whether the device -is a trade fixture and would have been removable during the term in the absence of an agreement declaring it to have been permanently annexed to the real estate. The learned counsel for the appellant company has furnished us an exhaustive brief, but none of the cases control this case in its favor. In the cases cited by the counsel in which there was an agreement, the court construed the contract to authorize the removal of the improvement. In Thompson Scenic Railway Company v. Young, 90 Md. 278, cited by the appellant, it was specifically provided that the right and possession of the property should remain in the contractor (the claimant) and should not vest in the tenant for whom it was constructed until it was paid for. Hence it was held that on failure of the tenant without having paid for the railway, it did not become a part of the realty and belong to the landlord. Hill v. Sewald, 53 Pa. 271, was simply a hiring of chattels and there was no intention of annexing them to the freehold. In Lemar v. Miles, 4 Watts, 330, the fixture was held, under the contract, to be personal property, and that the event had not occurred which was to make it the property of the landlord. This case was followed in Watts v. Lehman, 107 Pa. 106. Both cases were between landlord and tenant. But even in such cases it has been distinctly ruled by this court in Harris v. Kelley, 10 Sadler, 185, that a creditor could not seize and sell the personal property placed by a tenant on leased property under a lease containing a clause providing that “ all improvements erected or placed in said building to be and remain at the expiration of this lease the property of the lessor.”

But the case in hand is not between landlord and tenant, but between one who holds title to the premises by virtue of a sale on a judgment obtained on a mortgage given prior to the lease, and a lessee of the mortgagor. We have been referred to no case which rules that the property in question would be held to be a trade fixture-with the title in the lessee as against a prior mortgagee under the circumstances of this case. The same rule as to ownership of property in chattels annexed to realty prevails between a mortgagor and mortgagee as between a grantor and grantee: Gunderson v. Swarthout (Wis), 76 Am. St. Rep. 860; McFadden v. Allen, 134 N. Y. 489; and in either case it operates more strongly in favor of the mortgagee or grantee than the landlord where his title is assailed by a lessee.

We are clear that under the contract in this case the scenic railway was placed on the lessor’s realty as a permanent improvement, and that such was the intention of both parties at the time of the construction of the device. The parties might have provided otherwise but they did not do so, and in the language of Chief Justice Paxson in Carver v. Gough, 153 Pa. 225, 229: “While it may be a hardship to the appellant to deny his right to remove the buildings, we cannot see our way clear to come to any other conclusion consistent with the recognized rules of law.”

The decree of the court below is affirmed.

Elkin, J., dissents.


source: Caselaw Access Project

author: Per Curiam,

license: Public Domain

text:
    Guthrie v. Baton, Appellant.

      Vendor • and vendee — Contract—Forfeiture—Equity.
    Where the owner of an undivided one-fourth interest in a tract of land, all of the land being mortgaged, enters into an agreement to convey the land to another party on a day stated, if the vendee shall in addition to other payments pay one-fourth of the mortgages on the land, and the vendee although ready and willing to pay the one-fourth of the mortgages on the day stated is unable to do so because of an extension of the .mortgages secured by the owners of the other three-quarters of the land, and by the refusal of such owner to accept the payment of the one-fourth of the mortgages, the vendor cannot take advantage of the extension to declare a forfeiture, there being no forfeiture clause in his agreement with the vendee.
    Argued Nov. 4, 1908.
    Appeal, No. 5, Oct. T., 1909, by defendant, from decree of C. P. No. 4, Allegheny Co., First Term, 1908, No. 383, on bill in equity in case of W. A. Guthrie, W. B. Schofield, H. C. Booz and D. P. Pugh v. George S. Baton.
    Before Fell, Brown, Mestrezat, Potter and Elkin, JJ.
    Affirmed.

      Bill in equity for an accounting and for a deed of conveyance.
    Swearingen, J. P., filed the following findings of fact and conclusions of law:
    FINDINGS OF FACT.
    1. On April 12,1904, George S. Baton, one of the defendants, was the owner of one-fourth, undivided, of a tract of coal lands, situate in Morris Township, Washington county, and in Morris township, Greene county, Pennsylvania, and containing 4,226.378 acres. The legal title to said coal lands was held under an agreement in the name of J. W. Dawson, trustee for himself, for O. W. Kennedy, for S. M. Graham, and for said George S. Baton in equal parts. The said coal lands had been purchased in the name of J. W. Dawson, and in 1902 the said George S. Baton was the owner of a half interest therein. In 1903 the latter disposed of half his interest to said Kennedy and Graham, and Dawson was made trustee. The purchases were for part cash and the unpaid purchase money was secured by mortgages.
    2. Prior to April 12,1904, the said George S. Baton had been unable to meet his obligations upon the purchase of said coal lands and he had requested H. C. Booz and the plaintiffs to undertake the payment thereof. A short time afterwards the plaintiffs agreed to the undertaking. Thereupon, upon said date, to wit: April 12, 1904, the said George S. Baton, party of the first part, entered into a written contract with W. A. Guthrie of Indiana, W. B. Schofield, H. O. Booz of Philadelphia and D. P. Pugh of Norristown, state of Pennsylvania, parties of the second part, wherein, after reciting that there was due by said George S. Baton to J. W. Dawson, trustee, the sum of $3,985.64, being the amount which said Baton was in arrears upon his share of said mortgages, it was agreed that said second parties should pay to said J. W. Dawson, trustee, the sum of $4,000 upon the signing of said agreement, and the further sum of $1,000 on May 8, 1904, with which to pay Baton’s share of a note, which payments were to be in full of the balance due by said Baton upon said mortgages theretofore paid by the said J. W. Dawson, trustee. It was further agreed that said second parties should pay said Baton’s share (one-fourth) of said mortgages, according to the schedule annexed as the same should fall due in these proportions, viz.: W. A. Guthrie, five-sixteenths, W. B. Schofield, five-sixteenths, H. C. Booz, four-sixteenths and D. P. Pugh, two-sixteenths. The agreement, however, provided as follows:
    “Third. And whereas the last of said payments (except a dower mortgage of about $3,900) is due in the month of August, 1905.
    “Now, it is agreed that if said payments shall continue to be made by the parties of the second part until the interest of said George S. Baton in all of said mortgages except the dower mortgage hereinbefore mentioned shall have been paid, and, if, upon the 26th day of August, 1905, the parties of the second part shall have paid the share of said George S. Baton in said mortgages, the parties of the second part shall have the right to pay to said George S. Baton the difference between one-eighth of the entire cost of said coal field and the ámount of said Baton's interest in said mortgages, and upon such payment the said George S. Baton agrees to convey to said parties of the second part in fee the undivided one-eighth interest in said tract of coal lands to be held by the parties of the second part in the following proportions: The said W. A. Guthrie to hold the undivided five-sixteenths of said one-eighth interest; the said W. B. Schofield to hold the undivided five-sixteenths of said one-eighth interest; the said H. C. Booz to hold the undivided four-sixteenths of said one-eighth interest, and the said D. P. Pugh to hold the undivided two-sixteenths of said one-eighth interest. If a sale of said coal property shall be made at any time before the 26th day of August, 1905, the said George S. Baton, shall in that case, pay the amount of his share of the mortgages due at the time of said sale, and the parties of the second part shall share in the proceeds of sale in the proportion which the amount actually paid in by them shall bear , to the entire cost of the field at that date; the parties of the second part to share among themselves in the same ratio in which payments are to be made by them, to wit, the said W. A. Guthrie the five-sixteenths, the said W. B. Schofield the five-sixteenths, the said H, C. Booz the four-sixteenths and the said D. P. Pugh the two-sixteenths. The parties of the second part shall pay such proportion of the taxes upon the field as the amount they have actually paid in at the time the taxes became due shall bear to the cost of the field.”
    It was finally agreed that said second parties should pay the one-fourth of the interest on said dower mortgage, and if the same should fall due before August, 1905, they should pay the one-fourth thereof, but if it should not be paid before August, 1905, then they should pay the one-eighth thereof. A list of the properties and the cost and a list of the mortgages were attached to said agreement.
    3. Pursuant to said agreement, the plaintiffs paid the said sums of $4,000 and $1,000 to J. W. Dawson, trustee, and they also promptly made such other payments on account of the share of said George S. Baton in said mortgages, both principal and interest, as they were called upon from time to time by said J. W. Dawson, trustee, until about November, 1907. The method of making these payments was this: Mr. Dawson would notify the plaintiffs that the interest or principal of a mortgage was about due, and state to them their one-fourth thereof, and then the plaintiffs would work out the amounts that they respectively were to pay, and would then forward checks for these amounts to Mr. Dawson. The plaintiffs acted in these matters individually each for himself.
    4. Early in March, 1905, the said J. W. Dawson, trustee, acting for himself and his associates, secured an extension of the times of payment of the unpaid mortgages, and the same have not yet all fallen due. For this reason the plaintiffs could not pay the entire ¡amounts which under said contract they were obliged to pay, so as to discharge in full the share of the said George S. Baton in said mortgages. The plaintiffs have been ready and willing, and they have offered to pay the entire share of said mortgages for which said George S. Baton was liable, but since the disputes hereinafter mentioned the said J. W. Dawson has refused to receive said payments and has returned the same to the plaintiffs.
    5. Both W. A. Guthrie and H. C. Booz knew that said J. W. • Dawson, trustee, and his associates contemplated securing an extension of the said mortgages to which reference is made hereafter, before the extension was secured. The evidence does not show that either W. B. Schofield or D. P. Pugh had any knowledge upon this subject. None of the plaintiffs protested against the extension and none of the plaintiffs ever requested that an extension of any of said mortgages be secured. They conceded that the desire of the owners of the larger part of the field ought to control, although they were ready to meet their obligations.
    6. As early as March 8, 1905, George S. Baton knew that J. W. Dawson, trustee, was engaged in securing extensions of said mortgages. He did not notify him not to do so, neither did he prior to August 26,1905, notify any of the plaintiffs that he objected to the extension of said mortgages or that their agreement would be forfeited in case it was not performed on or before August 26, 1905. On March 9, 1905, said George S. Baton wrote the following letter to H. C. Booz:
    “Pittsburg, Pa., March 9, 1905.
    “Mr. H. C. Booz,
    “Ardmore, Pa.
    “Dear Sir:
    “You undoubtedly know of the arrangement that Mr. Dawson entered into with Mr. Guthrie. He is also endeavoring and has succeeded to have some of the mortgages extended. This will put off the payments. The essence of our agreement is that your interest in the field is proportionate to the amount paid in. It calls for a settlement in August. It will be satisfactory to me to postpone this settlement until the mortgages are paid and it will make the payments easier on you. Will you kindly let me know if you and your partners will enter into an agreement with me similar to the first agreement by taking into account the extended payments? I will get a list of the same from Mr. Dawson and forward it to you.
    “Yours truly,
    “Geo. S. Baton.”
    On March 14, 1905, Mr. Booz replied as follows:

      “Philadelphia, Pa., March 14, 1905.
    “Mr. George S. Baton,
    “Mining Engineer,
    “Keystone Building, Pittsburg, Pa.
    “Dear Sir:
    “Replying to your letter of the 9th inst., I am waiting an expression of opinion from Mr. Guthrie, but as far as I myself feel, I do not think that you should make this request, since we take upon ourselves the obligation to pay those mortgages and should receive the benefit from such obligation. However, I will advise you when I hear from Mr. Guthrie.
    “Yours truly,
    “H. C. Booz.”
    The above appear to have been the only communications between George S. Baton and any of the plaintiffs with respect to the extension of said mortgages prior to April 27, 1907, except the following in a letter from George S. Baton to H. C. Booz dated October 13, 1905, sending some information as to acreage, viz.:
    “You will notice that our agreement calls for a settlement in August. Of course this settlement was not made. Will you kindly let me know what is your understanding of how our interests stand at this time? I have not looked the matter up carefully, but do not anticipate any trouble in our coming to a final settlement.”
    No reply was made to this letter.
    7. After the correspondence of March, 1905, mentioned in findings of fact six, the plaintiffs paid on account of George S. Baton’s share of said mortgages, principal and interest, the sum of $3,390.53 to and including August 26, 1905, and thereafter to November 8, 1907, the further sum of $1,839.43. All of these payments were made without any objection on the part of George S. Baton.
    8. April 26, 1907, George S. Baton wrote to H. C. Booz that Dawson, Kennedy and Graham had “ decided to terminate the trusteeship” so that the property might go on record in the individual names of the owners, and he requested a meeting with the plaintiffs for the purpose of a settlement. A meeting was arranged for May 13, 1907, but for some reason it was not held. In the following fall, however, the parties failed to agree upon a settlement.
    9. Meantime the defendant, J. W. Dawson, trustee, had by deed dated February 11, 1907, conveyed unto the said George S. Baton an undivided one-fourth interest in said coal lands, and a like interest to said Kennedy and Graham. Dawson retained one-fourth and terminated the trusteeship. Mr. Dawson, however, continued to send notices to the plaintiffs and to receive their checks for the amounts to be paid by them until November, 1907. Subsequently the parties made an arrangement whereby the moneys to be paid by plaintiffs were received by George St Baton pending the litigation but without prejudice to any of the rights of the parties.
    10. The defendants together and individually have information which is necessary to settle the accounts between the plaintiffs and the defendants, and all this information the plaintiffs do not have.
    11. At the trial, April 27, 1908, the record was amended by substituting as plaintiff the name of William K. McFarlin for that of W. B. Schofield, the latter’s interest having been transferred to the former February 24, 1908.
    CONCLUSIONS OF LAW.
    1. The plaintiffs may join in this bill. They have a common cause of action arising out of the contract of April 12, 1904, mentioned in findings of fact two, and no separate defenses are involved. The jurisdiction in equity is sustained.
    2. Time is not of the essence of the contract of April 12,1904, mentioned in findings of fact two. No forfeiture is provided in said contract for failure to pay. the entire share of the mortgages for which said George S. Baton was liable on or before August 26, 1905. Under the findings of fact the said George S. Baton is estopped from asserting that the rights of the plaintiffs are forfeited by reason of the extension of the time of payment of said mortgages mentioned in said contract.
    3. The agreement of April 12, 1904, mentioned in findings of fact two, is valid and still subsisting; a settlement between the parties thereto should be had thereunder and in like manner as if the share of George S. Baton’s liability upon said mortgages had been paid by the plaintiffs at the expiration of the period named in said agreement, to wit: August 26, 1905.
    4. The plaintiffs, having paid the amounts set forth in findings of fact three, they are entitled upon payment by them of the balance of said George S. Baton’s liability upon said mortgages and payment by them to said George S. Baton of the difference between one-eighth of the entire cost of the coal field and the amount of said Baton’s share of said mortgages to a conveyance in fee of the one-eighth, undivided, of said coal lands described in findings of fact one, in the proportions set out in said agreement mentioned in findings of fact two, to wit: W. A. Guthrie, five-sixteenths of one-eighth of the whole, H. C. Booz, four-sixteenths of one-eighth of the whole, D. P. ’ Pugh, two-sixteenths of one-eighth of the whole, and William K. McFarlin, assignee of W. B. Schofield, five-sixteenths of one-eighth of the whole.
    5. An accounting should first be taken between the defendants and the plaintiffs so as to ascertain the entire cost of said coal lands, the amounts paid thereon by the plaintiffs, the amounts yet remaining unpaid upon said mortgages, the amounts yet to be paid by the plaintiffs on account thereof, and the amount to be paid by the plaintiffs to said George S. Baton in pursuance of the agreement of April 12, 1904. Upon the amount to be paid by the plaintiffs to said George S. Baton he is entitled to receive interest from August 26, 1905. The accounting should also ascertain the amount of taxes to be paid by the plaintiffs and said George S. Baton pursuant to said agreement.
    6. If the parties cannot agree a trustee should be appointed to receive the amounts to be paid by plaintiffs on account of the share of George S. Baton’s liability upon said mortgages, and distribute the same to the proper mortgagees.
    7. The deed heretofore made by J. W. Dawson, trustee, mentioned in findings of fact nine, is good as between the parties thereto, and said George S. Baton should convey to the plaintiffs the one-eighth, undivided, of said coal lands in fee and free of any incumbrances upon his said interest which may have been entered since the date of said conveyance to him.
    Let a decree be drawn in accordance with the foregoing findings of fact and conclusions of law.

      Error assigned was the decree of the court.

      M. J. Hosack, of Hosack, Knox & Hosack, for appellant.

      Thomas Patterson, of Patterson, Sterrett & Acheson, for appellee.
    January 4, 1909:
   Per Curiam,

The decree is affirmed at the cost of the appellant on the findings of fact and the conclusions of law by the learned judge of the common pleas.


author: Mr. Justice Elicin,

text:
    Prudential Trust Company’s Assignment.

      Corporations — Trust company — Depositors—Insolvency—Preference in favor of depositors — Acts of April 26, 1844, P. L. 419, April 16, 1850, P. L. 477, May 13, 1876, P. L. 161, and May 8, 1907, P. L. 192 — Assignment for creditors.

    1. In the absence of legislation perferring certain creditors no such preference exists.
    2. The question whether the depositors of an insolvent trust company-are entitled to preference over other general creditors in the distribution of assets, depends on the existence of legislation giving such preference. In the absence of such legislation no preference exists.
    3. The Acts of April 26, 1844, P. L. 419, April 16, 1850, P. L. 477, and May 13,1876, P. L. 161, giving a preference to depositors in banks of issue, or those of discount and deposit, do not apply to trust companies incorporated for a different purpose and expressly denied by statute the right to engage in the business of banking.
    4. The relation between a bank and its depositors is one of debtor and creditor, and not one of trustee and cestui que trust.
    5. By a deed of assignment for the benefit of creditors the equitable ownership of the assigned property passes to the creditors. Each creditor owns such a proportional part of the whole as the debt due him bears to the aggregate of the indebtedness. The extent of the interest of a creditor is fixed by the deed of trust which also fixes the time to which the several claims must be referred for adjustment and not the date of the decree of distribution. The creditor having thus a fixed and vested interest as of the date of the assignment, it cannot be reduced to his prejudice by subsequent legislation, or otherwise, without interfering with a vested legal right.
    6. The Act of May 8,1907, P. L. 192, giving a preference to depositors over other creditors in the distribution of the assets of an insolvent trust company, does not apply to the creditors whose rights accrued by an assignment for creditors of such a company made prior to the passage of the act, and at a time when no such preference existed.
    Argued Nov. 4, 1908.
    Appeal, No. 11, Oct. T., 1909, by John C. Cottingham et al., executors of the last will and testament of Francis Shubert, deceased, from decree of C. P. No. 1, Allegheny Co., Sept. T., 1904, No. 177, dismissing exceptions to auditor’s report in the matter of the assigned estate of the Prudential Trust Company.
    Before Fell, Brown, Mestrezat, Potter and Elkin, JJ.
    Reversed.
    Exceptions to .report of J. C. Boyer, Esq., auditor. Before Brown, P. J.
    The facts are stated in the opinion of the Supreme Court.

      Errors assigned were in dismissing exceptions to auditor’s report.

      Pier Dannals, with him C. C. Dickey, Avery D. Harrington and G. Von Phul Jones, for appellants.
    — There was vested in appellants on June 22, 1904, by the deed of assignment a property right. It is well-settled law in this state that the rights of creditors as distributees of an estate assigned for the benefit of creditors are fixed as of the date of the assignment: Miller’s App., 35 Pa. 481; Jordan’s App., 107 Pa. 75; Lea’s App., 164 Pa. 405; Potter v. Gilbert, 177 Pa. 159.
    The act of 1907 is not retroactive and has no application to this distribution: McHugh v. Jones & Laughlin Steel Co., 219 Pa. 644; Lewis v. Penna. R. R. Co., 220 Pa. 317; Taylor v. Mitchell, 57 Pa. 209; Fisher v. Farley, 23 Pa. 501; Becker’s App., 27 Pa. 52; People’s Fire Ins. Co. v. Hartshorne, 84 Pa. 453; Dewart v. Purdy, 29 Pa. 113; Martin v. Greenwood, 27 Pa. Superior Ct. 245; Old Forge School District, 27 Pa. Superior Ct. 586; Sproul v. Glass Co., 201 Pa. 103.
    If a contract when made is valid by the constitution and laws of the state as then expounded by the highest authorities, whose duty it is to administer them, no subsequent action by either the legislature or the judiciary can impair its obligation: Gelpcke v. Dubuque, 68 U. S. 175; Douglass v. Pike County, 101 U. S. 677; Taylor v. Ypsilanti, 105 U. S. 60; New Buffalo v. Iron Co., 105 U. S. 73; Wilkes County v. Coler, 180 U. S. 506 (21 Sup. Ct. Repr. 458); Koshkonong v. Burton, 104 U. S. 668; Fletcher v. Peck, 10 U. S. 87; Hawthorne v. Calef, 69 U. S. 10; Richards v. Rote, 68 Pa. 248; Palairet’s App., 67 Pa. 479; Haley v. Philadelphia, 68 Pa. 45; Alter’s App., 67 Pa. 341; Williams’s App., 72 Pa. 214; Drew v. R. R. Co., 81* Pa. 46; Western Savings Fund Society v. Philadelphia, 31 Pa. 185; Shonk v. Brown, 61 Pa. 320.

      Samuel S. Mehard, with him Stephen Stone and Joseph Langfitt, for appellees.
    — The law as it existed at the time of the assignment of the Prudential Trust Company gave a preference, on the distribution of the company’s assets, to claims for deposits in the company over its other liabilities: Com. v. Fraim, 16 Pa. 163; Kennedy’s App., 60 Pa. 511; Umholtz’s App., 191 Pa. 177; Colchester v. Kewney, L. R. 2 Exch. 253; Sutton’s Case, 10 Rep. 23a; Ward v. Hallam, 2 Dallas, 217; Balliet v. Brown, 103 Pa. 546.
    If such preference was not secured by the law existing at the time of said assignment, the order of distribution in this case would be governed by the act of May 8, 1907, whereby such preference is secured: Price v. Lancaster County, 189 Pa. 95; Thomas’s Election, 198 Pa. 546.
    The retroactive effect claimed for the act of May 8, 1907, cannot be avoided on the ground that it would be unconstitutional: Lane v. Nelson, 79 Pa. 407; Miller’s App., 35 Pa. 481; Sturges v. Crowninshield, 17 U. S. 122.

      The validity and operation of retroactive statutes are shown and illustrated by the cases cited* by the learned-auditor in his report. Among these are the following: Ilgenfritz v. Ilgenfritz, 5 Watts, 158; Deichman’s Appeal, 2 Whart. 395; Rambaugh v. Rambaugh, 11 S. & R. 191; Estep v. Hutchman, 14 S. & R. 435; Tate v. Stooltzfoos, 16 S. & R. 35; Bolton v. Johns, 5 Pa. 145; Hinckle v. Riffert, 6 Pa. 196; Grim v. Weissenberg School District, 57 Pa. 433; Lane v. Nelson, 79 Pa. 407; Donley v. Pittsburg, 147 Pa. 348; Anderson v. Lower Merion Township, 217 Pa. 369; Musser v. Brindle, 23 Pa. Superior Ct. 37.

      Pier Dannals, with him C. C. Dickey, Avery D. Harrington and G, Von Phul Jones, for appellant in reply.
    — -The act of April 16, 1850, and the other statutes regulating the distribution of the assets of insolvent banks and establishing an order of preference to creditors, do not embrace savings institutions, or banks so called, which are prohibited from exercising banking privileges: Fox’s Appeal, 93 Pa. 406; First Nat. Bank of Clarion v. Gruber, 87 Pa. 468.
    The relation between a bank and its depositors is only that of debtor and creditor: Commercial Nat. Bank v. Henninger, 105 Pa. 496; Bank of Northern Liberties v. Jones, 42 Pa. 536; Reiff v. Mack, 160 Pa. 265; Bank of the Republic v. Millard, 77 U. S. 152; Marine Bank v. Fulton Bank, 69 U. S. 252.
    January 4, 1909:
   Opinion by

Mr. Justice Elicin,

The question to be determined on this appeal is whether the depositors are entitled to preference over other general creditors in the distribution of the fund in the hands of the assignee of the insolvent trust company. It may be stated as a general principle that in the absence of legislation preferring certain creditors, no such preference exists. The legislature has passed many acts making a preference in the distribution of estates among creditors, this on the ground of public policy, or to protect the natural and superior equities of parties, but the burden is always on him who asserts a preference to point to the authority which gives it. In the present case the learned counsel for appellees attempt to meet this burden under the provisions of the' acts of 1844, 1850 and 1876, all of which relate either to banks of issue or to those of discount and deposit. Trust companies created under the provisions of the general corporation Act of April 29, 1874, P. L. 73, and deriving their privileges and powers from the act of 1889 and other supplementary statutes, are neither banks of issue, nor of discount and deposit, within the meaning of the law, and therefore the acts relied on as giving a preference to bank depositors, are not authority for the proposition that the same preference must be given to depositors in a title and trust company incorporated for a different purpose and being denied by the express language of the statute the right to engage in the business of banking. Nor is this a- new interpretation of the statutes or understanding of the law relating to this question. Fox’s Appeal, 93 Pa. 406, decided in 1880, held that the act of 1850 and other statutes regulating distribution of the estates of insolvent banks and establishing an order of preference to creditors, did not embrace savings institutions, or banks, so called, which did not enjoy banking, privileges. What was said by this court in that case is decisive of the question raised here in so far as the acts of 1844, 1850 and 1876 have any application. We do not agree with the proposition advanced in behalf of appellees to the effect that a depositor in making a deposit in a bank, does not thereby establish the relation of debtor and creditor, but rather chooses the bank as the custodian of his money for the time being. This is not the law. Money deposited in a bank ceases to be the money of the depositor and becomes the money of the banking institution in which deposited. It is the business of a bank to receive money on deposit and use it as its own, being accountable as debtor to the depositor for the money so deposited which may be subject to check or draft or payment upon notice or demand as the parties may ■ agree. All of our cases recognize the relation of a bank to its depositors to be one of debtor and creditor: Bank of Northern Liberties v. Jones, 42 Pa. 536; Commercial Nat. Bank v. Henninger, 105 Pa. 496; Reiff v. Mack, 160 Pa. 265.

One more question remains to be considered, that is, does the act of 1907, which establishes an order of preference in the distribution of the assets of an insolvent trust company among creditors, apply? The auditor before whom the case was heard and the learned court below in passing on the exceptions filed held that it did, and the errors assigned here relate chiefly to this question. The assignment for the benefit of creditors in the present case was made June 22, 1904, while the act of assembly in question was not approved until May 8, 1907, almost three years later. There is nothing in the language of the statute to indicate an intention to give it a retroactive effect, even if it were within the power of the legislature to do so. It is contended, however, that the statute applies in express terms “in case of any distribution of the money, funds, property or other assets whatsoever of any trust company,” and that whilst the assignment was made several years prior to the passage of the act, it still must be held to apply because the distribution of the assets was made after its enactment. In other words, that the act only affects the remedy and not the legal rights of the parties. We do not so understand the rule of law as applied to the facts of the case at bar. The rights of creditors of an assigned estate are fixed as of the date of the assignment. By the deed of assignment the equitable ownership of the assigned property passes to the creditors. Each creditor owns such a proportional part of the whole as the debt due him bears to the aggregate of the indebtedness. The extent of the interest of a creditor is fixed by the deed of trust which also fixes the time to which the several claims must be referred for adjustment and not the date of the decree of distribution. The creditor having thus a fixed and vested interest as of the date of the assignment, it cannot be reduced to his prejudice by subsequent legislation, or otherwise, without interfering with a vested legal right. This is the doctrine of Miller’s Appeal, 35 Pa. 481; Patten’s Appeal, 45 Pa. 151; Dean’s Appeal, 98 Pa. 101; Lea’s Appeal, 164 Pa. 405; Potter v. Gilbert, 177 Pa. 159. At the date of the assignment the appellant here had the right to participate in the fund for distribution along with the depositors and other creditors in such proportion as his claim bore to the aggregate of all the claims. If, however, the act of 1907 applies the depositors take the whole fund and appellant gets nothing. It is folly to say that appellant had a vested right to participate, in the distribution at the time of the assignment in 1904 and now he has not because of the preference established by the act of 1907 and still hold that this act only affects the remedy and not the legal rights of the parties. Nor do we think Ilgenfritz v. Ilgenfritz, 5 Watts, 158, and numerous other cases cited in behalf of appellees involving the change in the law of distribution of decedents' estates are authority for a different rule. In those cases the law was changed before the death of the decedent, and it was held that creditors had no vested right to any particular method of distribution prior to the death, which is the only event that can be considered as vesting any specific right or interest in creditors entitled to participate in the distribution of the estate of an insolvent decedent. We cannot agree that a law which denies appellant a right to participate as it existed in 1904 and gives to depositors a right of preference which did not' then exist only affects the procedure or remedy and not the legal rights of the parties. It is clear, therefore, appellant is entitled to share in the distribution with the depositors and other creditors without reference to the preference established by the act of 1907.

Decree reversed and record remitted to the court below in order that distribution may be made in accordance with the views herein expressed, costs to be paid out of the assigned estate.


author: Mr. Justice Elkin,

text:
    Horn’s Estate.

      Will — Trust—Trustee—Remarriage of widow.

    Testator by his will devised his homestead to his wife. He gave the remainder of his estate to trustees, and directed that a portion of the income should be paid to his wife, and the remainder should be used to pay off a mortgage. After the mortgage was paid off four-fifths of the income was to be paid to his wife for the support of herself and testator's daughter, and one-fifth to his brother; “said trust to continue during the natural life of my wife, and said money to be paid to her as long as she remains my widow, in case of her marrying, then she is to get the same interest therein as she would have had in my real estate had I died intestate.” The widow elected to take under the will, and subsequently remarried. She then claimed the right to take her interest in the real estate as widow under the intestate laws as if no trust had been- created. Held, that the trust continued during her natural life, and that upon her remarriage she was entitled to receive one-third of the trust income, instead of four-fifths as before.
    Argued Oct. 21, 1908.
    Appeal, No. 106, Oct. T., 1908, by-Lizzie Hoffman, from decree of O. C. Allegheny Co., Nov. T., 1907, No. 6, dismissing petition in estate of Michael Horn, deceased.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elicin and Stewart, JJ.
    Affirmed.
    Petition for partition.
    The controversy turned upon the construction of the will of Michael Horn; deceased, which was as follows:
    “ First: I give, devise and bequeath to the Safe Deposit & Trust Company of Pittsburg, and Alexander K. Stevenson, as executors and Trustee of my entire estate in Trust. That they or the survivors of them will fully carry out all the provisions of this my Will.
    “ I direct that they shall collect the entire income from my Estate, and out of said income pay monthly to my beloved wife Lizzie Horn, the sum of One Hundred ($100.00) Dollars, so long as there shall remain any incumbrance or indebtedness against my real estate. The balance of the income, over and above, the said One hundred ($100.00) Dollars, is to be used to pay off the Mortgage upon said property and the taxes, insurance and repairs, and when said property is entirely free from debt, then I direct that the net rents shall be divided as follows:
    “Four fifths (£) to my beloved wife and One fifth (£) to my brother Peter Horn, until my real estate is sold. I direct that my real estate shall not be sold excepting under the consent and at the discretion of the Orphans' Court of Allegheny County. Said Court to be the judges as to when and as to price and terms of sale, but said order shall not be made unless circumstances shall accrue making it necessary in the opinion of the said court, until the property is entirely clear from all incumbrances. Should the property remain in the hands of said Trust during the entire natural life of my wife, then she is to receive the Four fifths (f) of the rent, to be used for her support and for the maintenance and proper and thorough education of my daughter Irene.
    “ In case of the sale of said property my said Trustee or survivor shall invest the money in first Bonds and Mortgages, and ‘the interest thereon shall be paid as aforesaid in lieu of rent.
    “After the decease of my wife I direct that my said Trustee shall pay as aforesaid the rent or income, provided for my wife, to the Guardian of my child Irene, should she not be of age, if she is of age the same shall be paid to her. Said trust to continue during the natural life of my wife and said money to be paid to her so long as she remains my widow, in case of her marrying, then she is to get the same interest therein as she would have had in my real estate had I died intestate.
    “In case my wife should die without a lawful issue, then I give and devise my entire estate to my brother Peter Horn and to his children, share and share alike.
    “It being understood that after paying all debts and all encumbrances on the property that my brother Peter Horn is to have One fifth (£) be it in real estate or rents or income.
    “Second: It is not intended hereby to convey to my said Executors the Homestead in which I now reside nor the lot that I own in McKeesport, situate on Scotch Street, in the 7th Ward. The Trust only relates to the property that I own that fronts on Fifth Avenue and running through to Jerome Street. Being the same devised to me by my Uncle Martin Horn. The said two mentioned properties, to wit, the Homestead and vacant lot in the 7th Ward. I give devise and bequeath to my beloved wife Lizzie absolutely to her, her heirs and assigns forever.''
    The widow claimed that upon her remarriage the trust ended, and that she was entitled to one-third of the realty for life free from the trust. The trustees filed an answer affirming the continuance of the trust. The majority of the court in an opinion by Over, J. (Hawkins, P. J., dissenting), dismissed the petition.

      Error assigned was the decree of the court dismissing the petition.

      W. B. Rodgers, with him W. E. Newlin, for appellant.

      James R. Sterrett, of Patterson, Sterrett & Acheson, for appellee.
    January 4, 1909:
   Opinion by

Mr. Justice Elkin,

At the death of Michael Horn, the testator, the legal title to" the trust estate vested in the trustees who have performed the active duties connected with the administration of the trust for a period of ten years. The petitioner,-a widow of decedent, elected to take under the will and thereby waived her right to take under the intestate laws and committed herself to the testamentary disposition of the property, including the trust estate, made by her husband. Having taken under the will the absolute title to the homestead and vacant lot, greatly to her benefit, she should not now have an election to take such an interest in the real estate set aside in the trust as would be given her under the intestate laws because it happens to be to her advantage to do so, unless such right clearly exists under the terms of the will. This would be playing fast and loose with the testator’s scheme of distribution and would necessarily disarrange his plan for the protection of the other objects of his bounty. The trust was “to continue during the natural life of my wife,” not during widowhood, but during the natural life of a person in being, and it certainly was within the legal rights of the testator to create a trust for the life of a person in being if he chose to do so: Spring’s Estate, 216 Pa. 529. The widow is still living and therefore the trust has not terminated by the expiration of the period for which it was created. Has it terminated for any other reason? It is contended, and this is the pinch of the case, that the remarriage of the widow has had the effect of terminating the trust and gave the widow the right to take her interest in the real estate included in the trust, as if no trust existed, and as if it were real estate and she to take her interest therein as under the intestate laws. This position is asserted under that clause of the will which provides “ in the case of her marrying, then she is to get the same interest therein, as she would have had in my real estate had I died intestate.” If this clause stood alone it would be difficult to read and understand it in any other way than is contended for by the learned counsel for appellant. However, it must be read and understood in connection with the paragraph in which it occurs, and with reference to the whole will of which it is a part. It occurs in the paragraph relating to the trust estate, and presumably relates to the trust. When the testator provided that his widow in the event of her remarriage should get the same “interest therein” as she would have under the intestate laws, he evidently meant “interest” in the trust estate as such, and not in the real estate as if no trust had been created. The testator set this particular property aside in trust in order to protect the three objects of his bounty, his wife, his daughter and his brother. There was a mortgage upon the property, and he did not wish it sold for the payment of this indebtedness. He no doubt believed that the rents from the real estate set aside in the trust would be sufficient to pay his wife $100 per month, provide for taxes, insurance and repairs and finally pay off the mortgage debt. When the time arrived that the mortgage should be paid off, the wife, so long as she remained his widow, was to receive four-fifths of the income which was to be used for her support and for the maintenance and education of his daughter, and his brother was to receive one-fifth. Then there is the provision as to the sale at the discretion of the orphans’ court of Allegheny county. All of these things were predicated upon the fact of his widow remaining unmarried. Then there is the alternative provision that if his widow should remarry, she was no longer to receive the four-fifths of the income derived from the trust estate, but was to receive “the same interest therein” as she would have had under the intestate laws. We cannot believe that the testator intended to give her a larger interest in his estate in the event of her remarriage than if she had remained his widow, and this would be the result if the contention of the appellant prevails. We therefore agree with the opinion of the learned court below wherein it was said: “The testator does not give her in case of remarriage the same estate she would have .taken in his real estate had he died intestate; but provides that ‘then she is to get the same interest therein/ referring evidently to the trust estate, ‘ as she would have had in my real estate had I died intestate.’ The obvious purpose of this clause being to reduce her share of the income from four-fifths to one-third. Whilst the word ‘interest’ in some connections includes title, in others it includes advantages less than title, Anderson’s Law Dictionary, 562, and it seems here to be used in its restricted setíse.” Taking into consideration the intention of the testator as gathered from the four corners of the will; the paragraph relating to the trust estate in which the clause referring to the interest the widow shall take in case of remarriage; the general scheme for the disposition of the testator’s property; the plan for the protection of his daughter and brother, the conclusion is irresistible that the testator did not intend the trust to terminate upon the remarriage of his widow, but that he did mean to cut down her interest in or her part or portion of the income derived from the same from four-fifths to one-third.

Decree affirmed, costs to be paid out of the estate.


text:
    Pittsburg, Appellant, v. Newell.

      Road law — Assessment of benefits — Evidence—Cross-examination.
    1. In a proceeding to assess benefits for the widening of a street, counsel for a property owner attempted on cross-examination of two witnesses offered by the city, to develop the fact that the property in question, so far as benefits might accrue to the owner of the fee, was burdened with an outstanding lease for a term of years. This was objected to as immaterial, irrelevant and not cross-examination. As to the one witness, the offer was withdrawn, and the question not pressed. As to the second witness objection was made that the proposed question was hypothetical, not based on facts and evidence, and the trial judge ruled it out. Held, that the matters complained of did not, under the circumstances, constitute reversible error.

      Trial — Offer of evidence — Pressing offer — Good faith.

    2. Where counsel on one side in making an offer called upon counsel of the other side to try the case according to the facts, the judgment will not be reversed on the ground that the remarks tended to prejudice the minds of the jury, where the court below in its opinion refusing a new trial, stated that the contention was pressed in good faith by counsel, and finally ruled out.
    Argued Oct. 27, 1908.
    Appeal, No. 124, Oct. T., 1908, by plaintiff, from judgment of C. P. No. 1, Allegheny Co., Dec. T., 1903, No. 941, on verdict for plaintiff in case of City of Pitts-burg v. John Newell.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Affirmed.
    Appeal from award of jury of view. Before Brown, P. J.
    At the trial on the cross-examination of Edward C. Burkhart, one of plaintiff's witnesses, the following question was asked:
    Mr. Ferguson: “Q. Do you happen to know that Mr. Newell had not the possession of that property at the time that—
    Objected to.
    The Court: That is not material; we are dealing with the property.
    Mr. Ferguson: I propose to ask this witness that assuming that on June 26, 1901—
    The Court: We cannot assume something until it is in evidence. You may assume one thing or another. If you gentlemen will agree that there was a lease at that date, then it would be fair to put it to the witness, assuming that there was a lease outstanding at the time. - But that is not in evidence yet.
    Mr. Ferguson: “Q. Assuming that at the time this ordinance went into effect there was an outstanding lease on these premises under which the lessees were in possession, running for nine years and nine months from July 1, 1901; that that lease was still in force when this ordinance was passed; that under that lease Mr. Newell had no right to the possession or to disturb the possession. Would you say that Mr. Newell on January 28, 1903, was- benefited $50,000 in the market in your opinion?”
    Objected to as not cross-examination and as incompetent and irrelevant, the question at issue being the market value of the property before and after this improvement.

      The Court: Should you not in connection with the offer show the witness the lease?
    Mr. Ferguson: “Q. I show you paper marked exhibit No. 2, being a lease, as you will see, by which Mr. Newell leased to C. F. Kirschler and C. H. Toocker, partners as Kirschler and Toocker.”
    Objected to as incompetent and not cross-examination.
    The Court: It is cross-examination. The witness’ estimate is based upon the entire property in the possession of Mr. Newell. Now it is admitted that at that time there was an outstanding leasehold from Mr. Newell to someone in possession for a term of years. It seems to me it is proper cross-examination. It may be the witness would reduce his estimate if the property was incumbered to a certain extent.
    Mr. Ferguson: I will withdraw the offer if you do not want to try the case according to the facts.
    On the cross-examination of A. F. Leggate, one of the plaintiff’s witnesses, the following question was asked:
    Mr. Ferguson: “Q. Of course, if the seller could not give possession of the property at the time that it was offered in the market, and if it was subject to a lease, that would have a considerable effect upon the market value, wouldn’t it?
    Objected to as not cross-examination and as immaterial and incompetent.
    The Court: When you come to put in your case you can bring that out.
    Mr. Ferguson: I will warn the gentlemen on the other side that I will object to his rebuttal if we go on.
    The Court: I think the question is competent, but all I can see is it might make some difference, and that it would depend upon the nature of the lease. The objection overruled and bill sealed for plaintiff.
    (Question read to witness.)
    “A. Depends altogether upon the merits of the lease what he was paying.
    Mr. Ferguson: “Q.. I will show you a paper marked exhibit No. 2, being the lease of the premises in question here, made by John Newell to C. F. Kirschler and F. H. Toocker, partners as Kirschler and Toocker, for this Hotel Newell property — ”
    Counsel for plaintiff object to this method of proving a lease.
    Mr. Ferguson: “Q. For the term of nine years and nine months from July 1, 1901 — ”
    Counsel for plaintiff object to the question in the form in which it is put.
    “Q. First,.I will ask you if you don’t know as a matter of fact that Mr. Newell was not occupying these premises himself at the time this alley was widened?”
    Objected to as immaterial.
    The Court: There was an objection that the lease has not been properly proven. You can stand the witness aside and put Mr. Newell on the stand.
    Mr. Ferguson: I propose to ask the witness what would be his opinion as to the market value of the property in question if it was incumbered with a lease running for nine years and nine months from July 1,1901, in force at the time of the ordinance and never revoked.
    Objected to as being a hypothetical question, not based upon any facts in evidence in this case.
    Objection sustained and bill sealed for defendant.
    Mr. Ferguson: I desire to give notice to the city of Pittsburg that such a lease was outstanding, and call upon them to prove their case according to the facts now.
    Verdict and judgment for the city of Pittsburg for $13,000. City of Pittsburg appealed.

      Errors assigned were (1, 2)- rulings on evidence, quoting the bill of exceptions.

      Lee C. Beatty, with him W. B. Rodgers and A. M. Thompson, for appellant.

      John S. Ferguson, with him William Hunter, for appellee.
    January 11, 1909:
   Opinion by

Mr. Justice Elkin,

The issue in this case as originally framed made Newell plaintiff, and the city of Pittsburg, defendant, but the record was subsequently amended so as to reverse the order of the parties, which fact seems to have been overlooked in the preparation of the paper-books. This is a proceeding under the act of 1891 for the assessment of benefits upon the property of appellee alleged to have been benefited by the widening of Virgin Alley. The case was tried in the usual way by the introduction of witnesses with expert knowledge of real estate values, and the record does not disclose any material departure from the settled rules of evidence permissible in such cases. The assignments of error relate to an attempt made by learned counsel for appellee on cross-examination of two witnesses offered by the city, to develop the fact that the property in question, so far as benefits might accrue to the owner of the fee, was burdened with an outstanding lease for a term of years. This was objected to as immaterial, irrelevant and not cross-examination. As to the witness Burkhart, the offer was withdrawn and the question not pressed. As to Leggate, objection was made that the proposed question was hypothetical, not based on facts in evidence, and the learned trial judge ruled it out. Certainly under these circumstances, the matters complained of do not constitute reversible error, nor does anything appear in this record to justify the application of the rule that where irrelevant testimony is willfully offered, or inflammatory remarks are made, for the purpose of unfairly prejudicing the minds of jurors, it is cause for reversal. The remarks of counsel for appellee complained of called upon counsel for appellant to try the case according to the facts. At most, it was only counsel’s expression of the views of the law as it should apply to the facts of this particular case, and the court below in its opinion refusing a new trial has stated that the contention was pressed in good faith by counsel and finally ruled out. This assignment is without merit.

Judgment affirmed.


author: Mr. Justice Potter,

text:
    Foringer v. New Kensington Stone Company, Appellant.

      Master and servant — Contract of employment — Wrongful discharge— Corporation — Earnings after discharge.

    1. In an action against a corporation to recover for a breach of a contract of employment, the plaintiff testified that his contract was for three years, and that he had made it with the secretary and the president of the company, and that all of the directors had knowledge of it; that he had entered upon his duties without anyone making objection, and after serving a year and receiving the stipulated compensation had been discharged without cause in a letter expressly recognizing a contract of employment. The defendant asked the court to charge that a “ party seeking compensation from a corporation under a contract made with an officer of the corporation, for a breach of the contract, and hot for services actually rendered, the corporation must not only establish the contract, but must also establish the authority of the said officer to make the contract.” The trial judge said: “Under the facts in this case this point is denied.” Held, not to be error.
    2. In such a case the issue submitted for the determination of the jury was not whether there was a contract of employment, but it was as to what that contract actually was, and as to its extent. The point submitted, therefore, had no specific application to the precise issue that was being tried.
    3. In an action to recover for the breach of a contract of employment, it appeared that the plaintiff was employed for three years, and that he was; as he alleged, discharged without cause at the expiration of one year. He acknowledged that he secured another position, and that he earned a certain sum, but that he had given up the position when he expected his case.against the defendant to come on for trial. A verdict was rendered in favor of the plaintiff, and the trial judge reduced it by deducting therefrom the amount admitted to have been earned after the discharge. Held, that the judgment should be reversed, inasmuch as the admission of the plaintiff that he had secured other employment, which he might have retained, should have been submitted to the jury with the same force and effect as though it had been proven by the defendant.

      Evidence — Depositions—Exclusion of deposition.

    4. A deposition is properly excluded where it appears that the witness is a resident of the county and no reason is shown for his absence from court.

      Appeals — Assignments of error — Evidence—Reference to page of appendix.

    5. An assignment of error to the exclusion of testimony must refer to the page of the appendix of the paper-book where the matter can be found.
    Argued Oct. 14, 1908.
    Appeal, No. 93, Oct. T., 1908, by defendant, from judgment of C. P. Butler Co., March T., 1907, No. 25, on verdict for plaintiff in case of Joseph W. Foringer v. New Kensington Stone Company.
    Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
    Reversed.
    ■ Assumpsit to recover for breach of a contract of employment. Before Galbreath, P. J.
    The facts appear by the opinion of the Supreme Court.
    Defendant presented the following points:
    2. A party seeking compensation from a corporation, under a contract made with an officer of the corporation, for a breach of the contract and not for services actually rendered the cor- • poration, must not only establish the contract, but must also establish the authority of the said officer to make the contract. Answer: Under the facts in this case, this point is denied. [1]
    5. If the jury should find that the contract of hiring was for the term of three years, and the plaintiff discharged without sufficient cause, the measure of damages in this action could not be greater than the plaintiff’s salary under the contract from December 1, 1906, the time bringing this action, less what he may have earned or could reasonably have earned during that period. Answer: This point is refused. [2]
    6. Under all the evidence in this case, the verdict must be for the defendant. Answer: Refused. [3]
    Plaintiff presented this point:
    The court is respectfully requested to say to the jury that if they find the defendant company contracted with the plaintiff for his services for the period of three years and discharged him without just cause before the expiration of the term, the plaintiff is entitled to recover the full amount he would have received had he remained with the defendant for the full term, and in this case the defendant company is not entitled to any credit or mitigation of damages by reason of any money the plaintiff earned or may have earned of other labor of a different nature from that he had engaged to perform. Answer: This point is affirmed. [4]
    The jury returned a verdict for the plaintiff for $3,291.75. From this the court deducted the sum of $720, the amount admitted to have been earned by the plaintiff after his discharge. Judgment was then entered for $2,571.75. Defendant appealed.

      Errors assigned were (1, 4) above instructions, quoting them; (5) exclusion of deposition referred to in the opinion of the Supreme Court.

      John H. Wilson, with him W. B. Purvis and J. J. McAfee, for appellant.
    — The plaintiff in order that he may succeed in holding the corporation liable for the breach of a contract of hiring, alleged to have been made with one of its officers, and not for services actually rendered, the burden of proof is on him not only to prove the contract in all its terms, but he must also prove that the officer in making it acted within the scope of his authority: Bedford R. R. Co. v. Bowser, 48 Pa. 29; Wayne Title & Trust Co. v. Ry. Co., 191 Pa. 90; Worthington v. Ry. Co., 195 Pa. 211; Millward-Cliff Cracker Co.’s Est., 161 Pa. 157; Twelfth St. Market Co. v. Jackson, 102 Pa. 269; Whiting v. Lake, 91 Pa. 349; Central Penna. Telephone, etc., Co. v. Thompson, 112 Pa. 118; Allegheny County Workhouse v. Moore, 95 Pa. 408; Penna. Nat. Gas Co. v. Cook, 123 Pa. 170; Boyd v. American Carbon Black Co., 182 Pa. 206; Bangor & Portland Ry. Co. v. Slate Co., 203 Pa. 6; Oil Creek, etc., R. R. Co. v. Penna. Trans. Co., 83 Pa. 160.
    It appears to be well settled that prima facie the measure of damages for a breach of a contract of hiring for an entire term is the compensation agreed upon in the contract, and to be as well settled that the defendant may prove in mitigation of damages the amount earned by the plaintiff since the breach and during the term: King v. Steiren, 44 Pa. 99; Emery v. Steckel, 126 Pa. 171.

      Clarence Walker, with him W. Z. Murrin and John Murrin, for appellee.

    — A corporation may not avail itself even of ultra vires as a defense when a contract has been entered into and executed in good faith by the other party, and the corporation has received the full benefit of the performance. This principle also applies where a corporate officer has entered into a contract without corporate leave and a corporation has received the benefit of his contract: Pannebaker v. R. R. Co., 219 Pa. 60.
    That where one is hired for a definite period and discharged without cause he is prima facie entitled to recover the stipulated compensation for the whole term, and if he was engaged in other profitable employment or such employment was offered him and refused, that fact might be shown in mitigation of damages: King v. Steiren, 44 Pa. 99; Emery v. Steckel, 126 Pa. 171; Heyer v. Piano Company, 6 Pa. Superior Ct. 504; Wolf v. Studabaker, 65 Pa. 459.
    January 21, 1909:
   Opinion by

Mr. Justice Potter,

In this case the terms of a contract of employment were in dispute. The verdict of the jury established the fact that plaintiff had a contract with the defendant company for a fixed term of three years, and that he was discharged without cause, at the end of one year of the term. Suit was brought and the case was tried more than a year prior to the expiration of the contract. The plaintiff admitted on the trial that after his discharge by the defendant company he secured employment in a like capacity elsewhere, by which he earned the sum of $720 and that he quit that employment of his own accord. The trial judge reduced the verdict by deducting therefrom the amount admitted to have been earned after the discharge.

Appellant complains, in the first assignment of error, of the refusal of its first point for charge to the jury which was as follows: “A party seeking compensation from a corporation under a contract made with an officer of the corporation, for a breach of the contract and not for services actually rendered the corporation, must not only establish the contract, but must also establish the authority of the said officer to make the contract.” The trial judge answered it by saying, “under the facts of this case, this point is denied.” Considered in the abstract, the point presented a sound proposition of law. But in this instance it appears that the plaintiff testified that his contract was made with the secretary and the president of the company, and that all the directors had knowledge of it. .That while the proposition was pending the company wrote that he would hear from them when the water question was settled, and later it wrote to him, “Relative to your verbal proposition to our company, have every reason to believe we will accept same unless it would be in regard to boarding house.” When the proposition was accepted, and plaintiff entered upon his duties, no objection was made on the part of anyone in the company. His services were rendered and accepted throughout the year, and the letter written to him at its expiration telling him he would not be needed after December 1, 1906, expressly recognized a contract of employment. After having had the benefit of his services and making to him the stipulated compensation for the first year, the company could not repudiate the contract which had been made by its officers. In fact the issue submitted for the determination of the jury was not whether there was a contract of employment, but it was as to what that contract actually was, and as to its extent. The point submitted, therefore, had no specific application tqthe precise issue which was being tried, and there was no error in refusing to instruct the jury in the manner requested. ■

In the second assignment of error, complaint is made of the refusal to instruct the jury that the amount earned by plaintiff after his discharge, or that which he could reasonably have earned elsewhere, during the term for which the contract was to run, should be deducted from the amount of compensation agreed upon in the contract. It is conceded that this was error, but it is argued that it was cured by deducting the amount actually earned elsewhere from the verdict; and as to the further earnings plaintiff might have made, he is excused on the ground that the burden of proof was upon the defendants. That the general rule is so is indisputable; but it should not apply where it is admitted by the plaintiff not merely that he might have found other employment but that he actually did so; and though it was apparently more profitable than that with appellants, he left it voluntarily for a reason which hardly seems to be sufficient. The excuse given by plaintiff, that he expected this case to come on for trial, would hardly warrant his abandonment of a permanent situation. It would be strange if a reasonable leave of absence could not have been obtained to attend the trial. It was at most a matter to be submitted to the jury, as to the sufficiency of the reason advanced for giving up his employment. We think the admission of the plaintiff that he secured other employment, which he might have retained, should have been submitted to the jury with the same force and effect as though it had been proven by the defendant. And for this reason we sustain the second and fourth assignments of error.

Counsel for appellant allege in the fifth assignment, error in the exclusion of a deposition offered in evidence at the trial. This assignment violates the rule, in that it does not refer to the page of the appendix where the matter can be found: Downey Bros. v. Penna. R. R. Co., 219 Pa. 32; Cameron v. Traction Co., 216 Pa. 191. But in any event the exclusion of the deposition was put upon the ground that the witness was a resident of the county, and no reason was shown for his absence from court. Under these circumstances the exclusion of the deposition was a proper exercise of the discretion of the trial court.

By reason of the error pointed out in the second and fourth assignment's the judgment is reversed with a venire facias de novo.