text:
    Wilson v. Edwards, Appellant.

      Sale — Fraudulent sale — Sale in bulk of stock of merchandise — Notice— Parties — Act of March 28, 1905, P. L. 62.
    Under the Act of March 28, 1905, P. L. 62, entitled “An Act relative to the sale in bulk of the whole, or a large part of a stock of merchandise and fixtures, not in the ordinary course of business; providing certain requirements therefor; imposing certain duties upon the seller, and making then violation a misdemeanor,” a creditor who has not received the notice of the sale provided by the act may proceed alone without the co-operation of other creditors to have the sale declared fraudulent and void, and this he may do by securing a judgment against the debtor, and issuing execution against the goods in the hands of the purchaser.
    The language of the Act of March 28, 1905, P. L. 62, that such sale without notice “ shall be deemed fraudulent and voidable as against the creditors of the seller,” is not to be construed as simply casting the burden of proving the good faith of the transaction on the purchaser, but is to be construed as meaning that noncompliance by the purchaser with the provisions of the act shall make the sale voidable as to creditors without regard to the intent of the parties to it.

      Constitutional law — Class legislation — Federal constitution — Fourteenth amendment — Act of March 28, 1905, P. L. Q2 — Sale in hulk of stock of merchandise.

    The'act of March 28, 1905, entitled “An Act relative to the sale in bulk of the whole, or a large part of a stock of merchandise and fixtures, or merchandise, or fixtures, not in the ordinary course of business; providing certain requirements therefor, imposing certain duties upon the seller, and making their violation a misdemeanor,” is not arbitrary class legislation which denies to those affected by it the equal protection of the laws guaranteed by the fourteenth amendment of the federal Constitution.
    Class legislation, discriminating against some and favoring others, is prohibited; but legislation which in carrying out a public purpose is limited in its application, if within the sphere of its operation it affects all persons similarly situated, is not within the amendment.
    The Act of March 28, 1905, P. L. 62, deals with a particular class of sales, but the rule of conduct prescribed for the seller in each sale within the class is precisely the same as that prescribed for the seller in every other sale within the class, and the same is true of the purchaser.
    It is not necessary that a statute regulating the sale of goods shall embrace all lands of property, either personal or real, but it is sufficient if the selection of the articles and property is based on reasonable and just grounds of difference, and the prohibition comprehends all kinds of property within the relations and circumstances which constitute the distinction, extends equally to every citizen, and all classes of citizens, and denies to no one a privilege which another is permitted under the like circumstances to exercise.
    The Act of March 28, 1905, P. L. 62, is not an unconstitutional and unwarranted infringement of the liberty, and of the right to acquire, possess, protect and dispose of property, guaranteed by the bill of rights both of federal and state constitutions.
    The act relates to unusual and extraordinary transfers affording exceptional chances for fraud, and its enactment is a reasonable exercise of the police power within the discretion of the legislature.

      Constitutional law — Title of act — Statutes—Act of March 28, 1905, P. L. 62 — Notice to purchasers.

    The act of March 28, 1905, entitled “An Act relative to the sale in bulk of the whole, or a large part of a stock of merchandise and fixtures, or merchandise, or fixtures, not in the ordinary course of business; providing certain requirements therefor; imposing certain duties upon the seller, and making their violation a misdemeanor,” is not defective in title in failing to give sufficient notice of the duties imposed upon the purchasers to whom it applies.
    Argued April 24, 1906.
    Appeal, No. 146, April T., 1906, by defendant, from order of C. P. No. 3, Allegheny Co., Feb. T., 1906, No. 102, discharging rule for interpleader in case of Elliott Wilson and William McConkey, trading as Elliott Wilson Cigar Company, v. J. W. Edwards, trading as the Allegheny Cigar Company, B. B. Caniff, claimant.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady and Head, JJ.
    Affirmed.
    Rule for interpleader. Before Kennedy, P. J.
    The facts are stated in the opinion of the Superior Court.
    The court discharged the rule for interpleader.

      Error assigned was the order of the court.

      Charles A. Eoth, with him Thomas H. Hasson, for appellant.
    —Fraud must be established either by direct proof or facts sufficient to warrant a presumption of its existence: Jones v. Lewis, 148 Pa. 234.
    Claimant contends that the construction urged by plaintiff is unconstitutional.
    1. Because it violates art. 1, sec. 1 of the constitution of the state of Pennsylvania because it deprives the vendor and the vendee of the rights and privileges secured to them as citizens of said state, to wit: the right and liberty of “acquiring, possessing and protecting property!”
    2. Because it also violates see. 1, art. XIV of the amendments to the constitution of the United States, by depriving the vendor and vendee, referred- to in the said complaint, respectively, of their liberty, without due process of law, to wit: of the liberty of contracting for the sale and purchase of merchandise in bulk, of exercising the unrestricted and unhampered right of engaging in commerce, and of transacting lawful business.
    February 25, 1907 :
    3. Because it also violates sec. 1, art. XIV, of the said amendments to the constitution of the United States, by depriving the vendor and vendee, referred to in said complaint, respectively, of property, without due process of law, to wit: the right of the vendor to sell, dispose of and enjoy his property, is taken from him, or is seriously impaired and the right of the vendee to acquire property, and to use and enjoy the same, is likewise taken away and impaired. See Waters v. Wolf, 162 Pa. 153 ; Allgeyer v. Louisiana, 165 U. S. 578 (17 Sup. Ct. Repr. 427) ; Godcharles v. Wigeman, 113 Pa. 431; Block v. Schwartz, 27 Utah, 387 (76 Pac. Repr. 22) ; Miller v. Crawford, 70 Ohio, 207 (71 N. E. Repr. 631); Wright v. Hart, 182 N. Y. 330 (75 N. E. Repr. 404).

      Robert Woods Sutton, with him Watson Freeman, for appellees.
    — The true intent of the act is that creditors shall have notice of the sale, whether it is a perfectly fair one, or whether there is fraud, on the part of the vendor alone, or on the part of both the vendor and vendee, in order that they may protect their interests.
    Surely the act would be emasculated were we to say that it meant that this notice need only be given by the jmrchaser where he was guilty of fraud; and yet this is the logical conclusion of appellant’s argument; for, so long as he knows that he has not been guilty of fraud, he need not trouble to demand the list and send out the notices, for his title would be in no danger from a noncompliance.
    The act'is constitutional: Squire & Co. v. Tellier, 185 Mass. 18 (69 N. E. Repr. 312) ; Walp v. Mooar, 76 Conn. 515 (57 Atl. Repr. 277) ; McDaniels v. Connelly Shoe Co., 30 Wash. 549 (71 Pac. Repr. 37); Com. v. Jones, 4 Pa. Superior Ct. 362; Kennedy v. Ins. Co., 165 Pa. 179; Powell v. Com., 114 Pa. 265 ; Com. v. Vrooman, 164 Pa. 306; Neas v. Borches, 109 Tenn. 398 (71 S. W. Repr. 50) ; Hart v. Roney, 93 Md. 432 (49 Atl. Repr. 661) ; Fisher v. Herrmann, 118 Wis. 424. (95 N. W. Repr. 392).
   Opinion by

Rice, P. J.,

By virtue of an execution issued upon a judgment against J. 'W. Edwards, a stock of merchandise in the retail cigar stand, of which he was formerly the proprietor, was levied upon by the sheriff on January 15, 1906. B. B. Caniff having given notice that he claimed the goods, the court, upon the sheriff’s application, granted a rule on the plaintiffs in the execution and the claimant to show cause why an issue should not be framed to determine the ownership, as provided in the sheriff’s interpleader act of 1897. In response to the rule the claimant answered, that on November 25, 1905, he purchased from Edwards his entire stock of goods, good will and business; that he paid the agreed price and received a bill of sale for the goods and an assignment of the lease, “ all of which was done in good faith; ” and that he was still the owner of the goods. It appeared bj' the plaintiffs’ answer, and is not disputed, that the debt of Edwards, for which the judgment was obtained, was incurred prior to this alleged sale, and it was admitted by the claimant on the argument of the rule, that he did not give notice to the plaintiffs at the time he bought the goods from Edwards, as required by the Act of March 28, 1905, P. L. 62. The court discharged the rule and directed the sheriff to proceed with the execution; whereupon the claimant took this appeal.

The first question to be considered is as to the construction of the act, and particularly the first section, which reads as follows : “ That the sale in bulk of the whole, or a large part, of a stock of merchandise and fixtures, or merchandise, or fixtures, otherwise than in the ordinary course of trade and in the regular and usual prosecution of the seller’s business, shall be deemed fraudulent, and voidable as against the creditors of the seller, unless the purchaser shall, in good faith, and for the purpose of giving the notice herein required, make inquiry of the seller, and receive from him a list in writing of the names and places of residence or business of each and all of his creditors, and, unless the purchaser shall, at least five days before the consummation of the sale, give personal notice of said proposed sale, to each of the creditors of the seller as appearing on said list, or use reasonable diligence to cause personal notice to be given to them, or shall deposit in the mail a registered letter of notice, postage prepaid, addressed to each of the seller’s said creditors at his post-office address, according to the written information furnished: Provided, however, that no proceedings at law or equity shall be brought against the purchaser to invalidate any such voidable sale, after the expiration of ninety days from the consummation thereof.”

It is contended that the plaintiff has not instituted a proper proceeding to have the sale set aside as to creditors ; that if the legislature had in mind the protection of creditors, it was the protection of all the creditors equally, and not merely the protection of an alert and active creditor who secures judgment and issues execution. This position is not tenable. It is not incumbent on a creditor, as to whom such a sale is fraudulent and voidable, to obtain the co-operation of other creditors. He has the right to attack it in the method which was always an available - and appropriate method for a creditor to pursue in order to invalidate, that is, to render of no legal force and effect, so far as the collection of his claim is concerned, a sale of chattels by a debtor, which as to such creditor is voidable upon the ground of fraud. To levy on the goods as the property of the debtor, and in response to the sheriff’s rule to interplead to aver the facts which made such sale fraudulent and voidable as to creditors, is an appropriate proceeding “ to invalidate any such voidable sale ” within the meaning of the act of 1905.

Another point urged by the claimant with more apparent confidence is that a failure on the part of the purchaser to comply with the provisions of the act simply raises a prima facie presumption of fraud, thus relieving a creditor of the necessity of producing evidence to that effect, and at the same time casting the burden of establishing the good faith of the transaction on the purchaser. It is argued, on the other hand, that this construction would make it possible now, as it was before the passage of the act, for a dealer to carry into successful execution a dishonest scheme to cheat his creditors by converting his entire stock of merchandise into money by a sale in bulk, “ because money is more easily shuffled out of sight,” provided the other party to the transaction is not implicated in the intended fraud otherwise than as a bona fide purchaser for value. Counsel show quite clearly, and we think it must be conceded, that, owing to the facility which such a transaction affords for defrauding creditors, the suggested construction would deprive the statute of much of its effectiveness as a remedy for the mischief the legislature had in view. Moreover, the words chosen by the legislature to express their will leave no room for doubt that they intended to do more than simply to change the law as to the burden of proof. The language is, “ shall be deemed fraudulent and voidable as against the creditors of the seller,” not simply “shall be presumed” to be fraudulent, etc. If the latter expression had been used, it might be argued with some plausibility that the legislature did not' have in mind an irrebuttable presumption. See Hart v. Roney, 93 Md. 432 (49 Atl. Repr. 661). But the word “ deemed ” was evidently chosen advisedly and with reference to a meaning that is attached to it, not only by the lexicographers, but also by the courts in adjudicated cases involving the construction of statutes. For example, it has been held that when by statute certain acts are deemed to be crimes of a particular nature, they are such crimes, and not a semblance of it, nor a mere fanciful approximation to or designation of the offense : Commonwealth v. Pratt, 132 Mass. 246 ; 1 Bouv. L. D. (Rawles ed.) 526. One of the meanings of the word “ deem ” is, “ to j udge; adjudge; decide: ” Standard Dict. ; Russell v. Russell, L. R. 14 Ch. Div. 471, 478; Brozel v. Buffalo, 2 Silv. (N. Y.) 375 ; and the word “ deemed ” is often used in the sense of, “held, adjudged, declared:” 5 Am. & Eng. Ency. of Law (1st ed.), 458, and of, “judged, determined, considered or judged ; ” 13 Cyclopedia of Law and Procedure, 757. In a note in the book last cited a case is referred to in which it was said: “ And when it is enacted that the vendor of an article shall for any purpose ‘ be deemed the manufacturer thereof,’ for such purpose, he is to be absolutely considered such manufacturer.” So in the construction of the act of congress relative to naturalization it was said : “ The word j deemed ’ is the equivalent of ‘ considered ’ or ‘ judged ’; and, therefore, whatever an act of congress requires to be ‘ deemed ’ or ‘ taken ’ as true of any person or thing, must, in law, be considered as having been duly adjudged or established concerning such person or thing, and have force and effect accordingly. When, therefore, congress declares that an alien woman shall, under certain circumstances, be ‘deemed’ an American citizen, the effect, when the contingency occurs, is equivalent to her being naturalized directly by an act of congress, or in the usual mode thereby prescribed: ” Leonard v. Grant, 5 Fed. Repr. 11. “ The sense given to particular words by our great lexicographers is always entitled to tveight. Yet where a word is used in an act of assembly regard must be had to the circumstances surrounding its use : ” Penna. R. R. Co. v. Price, 96 Pa. 256 ; Commonwealth v. Hufnal, 4 Pa. Superior Ct. 301. Therefore we do not base our decision exclusively, either upon the meaning ascribed to the word “ deemed ” by the lexicographers, or upon the meaning ascribed to it by the courts in the construction of other statutes. Having regard, however, to “ the old law, the mischief and the remedy,” as well as to the natural and ordinary meaning of the word when used in such a connection as this, we entertain no doubt that it was intended by the'legislature that noncompliance by the purchaser with the provisions of the act should render the sale voidable as to creditors. This conclusion makes it necessary to consider the objections that have been urged against the act upon constitutional grounds. ■

First, it is objected that the act does not apply to all persons alike, but only to merchants, and is arbitrary class legislation which denies to those affected by it the equal protection of the laws guaranteed by the fourteenth amendment of the federal constitution. Nowhere in the act does the word dealer, vender, or merchant appear, and it is reasonably certain that a sale by such person of goods or fixtures not employed in his business, as, for example, the furniture in his dwelling, was not intended to be governed by this statute. We mention this to show that it is not the business or the occupation of the seller which alone determines whether or not the purchaser must comply with its provisions. The act speaks of “ a stock of merchandise and fixtures,” and of a sale of them “ otherwise than in the ordinary course of trade and in the regular and usual'prosecution of the seller’s business.” When read together and with the context these clauses imply, we think, not simply that the goods were once merchandise, that is, commodities traded in by merchants, but that at the time of the sale they still bore the character of “ a stock of merchandise,” that is, goods and merchandise employed in trade, which in the ordinary course of trade, and in the regular and usual prosecution of the seller’s business, would be sold or bartered otherwise than by a sale in bulk. The statute deals with a particular class of sales, but the rule of conduct prescribed for the seller in each sale within the class is precisely the same as that prescribed for the seller in every other sale within the class, and the same is true of the purchaser. It is true the effect of the legislation is to require the parties to such sale to do that which parties to other sales of personalty are not required to do, and in that sense it is class legislation with respect to persons as well as to things. But the first section of the fourteenth amendment does not prohibit classification oE the subjects of legislation and the application of different regulations to different classes, and no one at this day contends that it does. Class legislation, discriminating against some and favoring others, is prohibited; but legislation which, in carrying out a. public “purpose, is limited in its application, if within the sphere of its operation it affects all persons similarly situated, is not within the amendment: Barbier v. Connolly, 113 U. S. 27 (5 Sup. Ct. Repr. 357). It was declared, however, in the same case, that it was intended, amongst other things, “ that no impediment should be interposed to the pursuits of anyone except as applied to the same pursuits by others under like circumstances; that no greater burdens should be laid upon one than are laid upon others in the same calling and condition.” . Other forms in which the same general principle has been expressed are, “ that no person or class of persons shall be denied the same protection of the laws which is enjoyed by other persons or other classes in the same place and under like circumstances: ” Missouri v. Lewis, 101 U. S. 22; “ that all persons subject to legislation limited as to the objects to which it is directed, or by the territory within which it is to operate, ‘shall be treated alike, under like circumstances and conditions, both in the privileges conferred and in the liabilities imposed: ’ ” Hayes v. Missouri, 120 U. S. 68 (7 Sup. Ct. Repr. 350); Connolly v. Union Sewer Pipe Co., 184 U. S. 540 (22 Sup. Ct. Repr. 431); that this clause of the fourteenth amendment “ only requires the same means and methods to be applied impartially to all the constituents of each class, s’o that the law shall operate equally and uniformly upon all persons in similar circumstances : ” Kentucky Railroad Tax Cases, 115 U. S. 321 (6 Sup. Ct. Repr. 57); that the rule “ is not a substitute for municipal law; it only prescribes that that law have the attribute of equality of operation : and equality of operation does not mean indiscriminate operation on persons merely as such, but on persons according to their relation: ” Magoun v. Illinois Trust and Savings Bank, 170 U. S. 283 (18 Sup. Ct. Repr. 594). In one of the latest cases in which a statement of the general principle is made, it is said: “ It is not the purpose of the fourteenth amendment, as has been frequently held, to prevent the states from classifying the subjects of legislation, and making different regulations as to the property of different individuals differently situated. The provision of the federal constitution is satisfied if all persons similarly situated are treated alike in privileges conferred or liabilities imposed: ’’ Field v. Barber Asphalt Paving Co., 194 U. S. 618 (24 Sup. Ct. Repr. 784). None of these statements of “the general rule is irreconcilable with the doctrine of Gulf, Colorado & Santa Fe Railway Co. v. Ellis, 165 U. S. 150 (17 Sup. Ct. Repr. 255, that where it is apparent that the legislative classification is not based on any reasonable ground, or any differences which bear a just and proper relation to the subject with reference to which the classification is attempted, but is a mere arbitrary selection it will' not relieve the state from the ban of the equality clause of the fourteenth amendment. Many other citations to the same effect might be given, but it is unnecessary. We have given enough to show, that while the question whether there is occasion for legislation regulating one class of sales which is not required or would not be applicable for the regulation of all sales is primarily a legislative question, yet it is within the jurisdiction of the courts, and their duty, to determine whether in the attempted classification other constitutional limitations of legislative power have been transgressed. As to the general principles which are to guide the courts in such determination there is no dispute, and in view of the numerous authoritative declarations of them no room for serious difference of opinion. We shall refer to some of these later. The difficulty, as was pointed out by Justice McKenna in Magoun v. Illinois Trust, etc., Co., 170 U. S. 283 (18 Sup. Ct. Repr. 594), and by Justice Harlan in Connolly v. Union Sewer Pipe Co., 184 U. S. 540 (22 Sup. Ct. Repr. 431, is in declaring in a single comprehensive rule “ what is the test of likeness and unlikeness of circumstances and conditions,” that is always to be applied whenever the question arises whether a statute having its source in the uncontroverted power to classify infringes rights protected by this clause of the federal constitution. It is easy to show that certain differences — for example, the color, race, nativity, religious opinions, political affiliations, or the like, of the seller or purchaser — do not bear any just, reasonable or proper relation to the subject of legislation like that in question ; but it is difficult to specify all the differences that do and all the ■ differences that do not come up to this standard, and we shall not attempt it. It seems, however, that the mere occupation of the seller would not be ground for discriminating against him' in legislation relating to sales of personalty in general. But no such discrimination is made in this act. The sales to which the act applies are in their very nature of an exceptional class, and, in addition to the pi’esumption that the legislature arrived at its conclusion upon due consideration and investigation of all the facts and conditions that ought to be considered, substantial reasons could be given for a regulation like that in question of this class of sales which would be inappropriate to every sale of personalty. It has been held that it is not necessary that a statute regulating the sale of goods shall embrace all kinds of property, either personal or real, but it is sufficient if the selection of the articles and property is based on reasonable and just grounds of difference, and the prohibition comprehends all kinds of property within the relations and circumstances which constitute the distinction, extends equally to every citizen and all classes of citizens, and denies to no one a privilege which another is permitted under like circumstances to exercise: 8 Cyclopedia of Law & Procedure, 1069, citing Booth v. People, 186 Ill. 43 (57 N. E. Repr. 798). This principle commends itself and it is as pertinent in this case as it was in the case in which it was applied. Bearing in mind further, that the burden rests on him who alleges the unconstitutionalty of the law, not on him who invokes its application and enforcement, we are unwilling to hold that the regulation in question, which applies as we have seen to all sellers and purchasers similarly situated, and to every sale in bulk of an entire stock of merchandise otherwise than in the ordinary course of trade and in the usual prosecution of the seller’s business, is based on mere arbitrary selection, and not on differences which bear a just and proper relation to the subject.

Secondly, it is objected that the act is an unwarranted infringement of the liberty, and of the right to acquire, possess, protect and dispose of property, guaranteed by the federal as well as the state constitution. At the outset of the discussion of this objection it seems appropriate to advert to certain well-settled general principles which govern the courts when called upon to exercise their unquestioned jurisdiction to adjudge as to the constitutionalty of a legislative enactment. This will be a sufficient answer to some of the criticisms that have been made of the law without further reference to these criticisms in 'detail. In a recent case in which the validity of the Massachusetts vaccination law was in question it was declared: “ If there is any such power in the judiciary to review legislative action in respect of a matter affecting the general welfare, it can only he when that which the legislature has done comes within the rule that, if a statute purporting to have been enacted to protect the public health, the public morals, or the public safety, has no real or substantial relation to those objects, or is, beyond all question, a plain, palpable invasion of the rights secured by the fundamental law, it is the duty of the court to so adjudge, and thereby give effect to the constitution: ” Jacobson v. Mass. 197 U. S. 11 (25 Sup. Ct. Repr. 358), citing Mugler v. Kansas, 128 U. S. 623 (8 Sup. Ct. Repr. 273) ; Minnesota v. Barber, 136 U. S. 313 (10 Sup. Ct. Repr. 862) ; Atkin v. Kansas, 191 U. S. 207 (24 Supr. Ct. Rep. 124). It is the solemn duty of the courts in cases before them to guard the constitutional rights of the citizens against merely arbitrary power. They have no right to avoid this duty by carrying the jaresumption of good faith and kno.wledge of existing conditions upon the part of the legislature to the extent of always holding that there must be some undisclosed and unknown reason for subjecting certain individuals or corporations to hostile and discriminating legislation: Gulf, Colorada & Santa Fe Ry. Co. v. Ellis, 165 U. S. 150 (17 Sup. Ct. Repr. 255); Collett v. Scott, 30 Pa. Superior Ct. 430. But it is equally true, that the argument that a certain kind of legislation is unwise and dangerous in its tendencies can be of little avail, unless the provisions of the fundamental law with which it conflicts can be pointed out. “ No- evils arising from such legislation could be more far-reaching than those that might come to our system of gov-eminent if the judiciary, abandoning the sphere assigned to it by the fundamental law, should enter the domain of legislation, and, upon grounds merely of justice or reason or wisdom, annul statutes that had received the sanction of the people: ” Harlan, J., in Atkin v. Kansas. In our own state authoritative declarations, scarcely less emphatic, as to the province of the judicial department of the government have been made. Speaking of the Act of February 4, 1870, P. L. 14, then under consideration, Justice Williams said : “ First, we must remember that the legal presumption is in favor of the constitutionality of the act because it expresses the judgment of the legislative branch of the government upon that question. The legislature has considered the question and passed upon it and this makes a prima facie case in favor of the law : ” Commonwealth v. Vrooman, 164 Pa. 306. “Nothing but a clear violation of the constitution, a clear usurpation of powers prohibited, will justify' the judicial department in pronouncing an act of the legislative department unconstitutional and void : ” Sharswood, J., in Penna. R. R. Co. v. Riblet, 66 Pa. 164. “ The right of the judiciary to declare a statute void and to arrest its execution is one which, in the opinion of all courts, is coupled with responsibility so grave that it is never to be exercised except in very clear cases. One department of the government is bound to presume that another has acted rightly. The party who wishes to pronounce a law unconstitutional takes upon himself the burden of proving beyond all doubt that it is so: ” Black, J., in Erie & North East R. R. Co. v. Casey, 26 Pa. 287; quoted with approval by Sterrett, J., in Powell v. Commonwealth, 114 Pa. 265. The general doctrine was elaborately restated by the present Chief Justice in Commonwealth v. Moir, 199 Pa. 534, where he said: “ This court is not authorized to sit as a council of revision to set aside or refuse assent to ill considered, unwise or dangerous legislation. Our only duty and our only power is to scrutinize the act with reference to its constitutionality, to discover what if any provisions of the constitution it violates.” In another part of the opinion, after quoting from Cooley on Constitutional Limitations (6th ed.) p. 201, Commonwealth v. McCloskey, 2 Rawle, 369, and Scowden’s Appeal, 96 Pa. 422, he said: “ Nor are the motives of the legislators, real or supposed, in passing the act, open to judicial inquiry or consideration. The legislature is the law making department of the government, and its acts in that capacity are entitled to respect and obedience until clearly shown to be in violation of the only superior power, the constitution.” The question for decision is to be. considered in the light of these principles.

Under the right guaranteed by our state constitution to acquire, possess and protect property, there is necessarily included the right to make reasonable contracts concerning it. It is also part of the liberty which is declared to be an inalienable right. “ The methods by which' this right to acquire property is asserted and exercised are, however, and have been since organized government began among men, subject to regulation by law. The power of government thus brought into service is known as the police power: ” Williams, J., in Commonwealth v. Vrooman, 164 Pa. 306. In the same case Justice DeaisT, who vigorously dissented from the judgment sustaining the constitutionality of the law then under consideration, nevertheless conceded that all the authorities agree that the legislature may, in the exercise of the police power, absolutely forbid contracts which are inimical to public interests, and may adopt suitable regulations of contracts for the protection of the public. As to the clause of the fourteenth amendment of the federal constitution, which forbids any state to deprive any person of liberty or property without due process of law, it is sufficient to say that the freedom of contract which is necessarily included in the rights here protected, is subject to certain limitations which the states may impose in the exercise of its police power and that in the exercise of that power a large discretion is necessarily invested in the legislature to determine, not only what the interests of the public require, but what measures are necessary for the protection of those interests: Holden v. Hardy, 169 U. S. 366 (18 Sup. Ct. Repr. 383) ; Minnesota Iron Co. v. Kline, 199 U. S. 593 (26 Sup. Ct. Repr. 159). It is unnecessary to cite other authorities in support of the general doctrine that the police power, which is necessarily inherent in every form of government, and the exercise of which our state constitution declares “ shall never be abridged,” was not excluded from our state government in matters affecting personal liberty, and the acquisition, possession and protection of property by the provisions of the federal or state constitutions. But it will not be out of place to cite in this connection the commonly accepted statement of Chief Justice Shaw, as to the extent and limitations of this power: “We think it a settled principle, growing out of the nature of well-ordered civil society, that every holder of property, however absolute and unqualified his title may be, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community. All property .... is held subject to those general regulations which are necessary to the common good and general welfare. Rights of property, like all other social and conventional rights, are subject to such reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restraints and regulations established by law as the legislature, under tlie governing and controlling power vested in them by the constitution, may think necessary and expedient: ” Commonwealth v. Alger, 61 Mass. 53. “ This power,” it has been declared, “ legitimately exercised can neither be limited by contract nor bartered away by legislation: ” Holden v. Hardy, 169 U. S. 366 (18 Sup. Ct. Repr. 383); McKeesport v. McKeesport, etc., Pass. Railway Co., 2 Pa. Superior Ct. 242; Erie v. Erie Electric Motor Co., 24 Pa. Superior Ct. 77. The most proper business may be regulated to prevent its becoming offensive to the public sense of decency, or for any other reason injurious or dangerous; and rules for the conduct of the most necessary and common occupations are prescribed when from their nature they afford peculiar opportunities for imposition and fraud:. Cooley on Const. Limitations (6th ed.), 743. Notable examples of laws enacted for the prevention of fraud and deception are the act of 1870 making it a misdemeanor for any person to issue a policy of insurance against loss by fire or lightning without authority being expressly conferred so to do by a charter of incorporation issued -according to law, which was held to be constitutional in Commonwealth v. Vrooman, 164 Pa. 306, and the act of 1885 prohibiting the manufacture and sale of oleomargarine, which was held to be constitutional in Powell v. Commonwealth, 114 Pa. 265; s. c., 127 U. S. 678 (8 Sup. Ct. Repr. 992, 1257). These acts absolutely prohibited an individual from engaging in a certain business, and all persons, whether natural or artificial, from selling a certain article of food, both of which were previously lawful and not in themselves harmful. If such legislation is permissible in order to secure the public against fraud and injury, it is impossible to see upon what ground it can be safely declared that in the regulation of the class of sales under consideration the legislature transgressed constitutional limitations of its power. Another pertinent illustration is the act of 1872 requiting that notes given for patent rights shall have the words “given for patent right” prominently placed on the face thereof, and making it a misdemeanor to take, sell or transfer a note given for that consideration, not having these words written or printed thereon, which act was held to be free from constitutional objections in Haskell v. Jones, 86 Pa. 173, and Shires v. Commonwealth, 120 Pa. 368. The remarks of Vann, J., in Wright v. Hart, 182 N. Y. 330 (75 N. E. Repr. 404), although in a dissenting opinion, commend themselves, and may be appropriately quoted in this connection for the purpose of the illustrations they give of the extent that the legislatures have gone in the matter of regulation. “ Many restraints upon freedom of contract, some of which reach back to our colonial history, have passed without challenge, or if challenged have uniformly been sustained as valid. The statute of frauds, the act to prevent fraudulent conveyances, insolvent laws, the recording act, the prohibition of usury, lien laws, regulations in relation to chattel mortgages, conditional sales and preferences by corporations and in general assignments, show in how many ways and in what varied forms the legislature may properly restrain freedom of action in commercial transactions in order to promote the general welfare. Originally all parol contracts for the sale of personal property were valid and it was unnecessary to make delivery or payment wholly or in part. The recording act was unknown, and transfers in writing, whether absolute or conditional, did not have to be filed. Now, however, many statutes require business to be transacted in a certain way, and that constructive notice should be given in order to protect creditors and innocent purchasers. Such interference with liberty and such limitations upon the use of property, although arbitraiy and inconvenient, have always been regarded as valid in order to prevent fraud and promote justice. While commerce is hampered to a limited extent in some ways, it is protected and promoted to a much greater extent in other ways. The inconvenience of the restraint is less than the evil done away with.” This act does not deprive the owner of the right to dispose of his stock of merchandise by public or private sale or in any manner that he chooses. He is simply required, upon the application of the purchaser, to furnish the latter with a list in writing of the names and places of residence or business of his creditors, in order that the purchaser may comply with the requirement to notify them in the manner described. If the purchaser does not make the inquiries referred to in the act, or if both parties agree to dispense with its requirements, the only penalty is that the sale is voidable as to creditors for the period of three months. If the purchaser complies in good faith with the provisions of the act his title is secure, and he is at liberty not to comply with them if he is willing to forego the security which such compliance will give. In a leading case Chief Justice Black said: “ If a debtor, with the purpose to cheat his creditors, converts his land into money because money is more easily shuffled out of sight than land, he of course commits a gross fraud: ” Covanhovan v. Hart, 21 Pa. 495. If in the place of the word “land” we substitute the words “ stock of merchandise otherwise than in the ordinary course of trade and in the regular and usual transaction of the seller’s business,” the remark would be equally true, and would fitly describe a kind of fraud that had become so common, and was so inadequately provided against under the old law, as to justify legislative action. The manifest object of the legislation is to prevent, or at least to render more difficult and improbable, the successful perpetration of that kind of fraud, and the means chosen by the legislature have a real and substantial relation to that object. They were clearly not enacted for the' mere purpose of oppressing any class of persons, but were designed rather to promote, with as little individual inconvenience as possible, the general good. Compliance therewith in good faith tends not only to the protection of creditors, but to the security of the purchaser in his title as well.

In many states of the union similar legislation, but in many instances much more stringent, has heen adopted. The conclusions of the several courts in those cases in which its constitutionality has been passed upon are not in harmony, but the preponderance of decisions, at least as far as number is concerned, seems to be in harmony with the conclusion we have reached. It would unduly prolong this opinion to attempt a review of these several cases. While entertaining the highest respect for the decisions of the courts in which a different conclusion has been reached, we think that the view, thus expressed in the opinion of Chief Justice Knowltoít of the supreme judicial court of Massachusetts, is the correct one: “ The purpose of the legislature evidently was to provide for creditors protection against a class of sales which are frequently fraudulent, and which leave creditors with no means of collecting that which they ought to receive. The statute deals only with sales in bulk of a part or the whole of a stock of merchandise, which are not made in the ordinary course of trade, and in the regular and usual prosecution of the seller’s business. It does not interfere with the transaction of ordinary business, but relates to unusual and extraordinary transfers. In substance, it declares that a sale of this kind shall not be made without first giving to creditors an opportunity to collect their debts, so far as the property to be sold might enable them to collect, or subsequently making satisfactory provision for the payment of these debts. A sale made in violation of the statute is void only as against creditors, and, if the vendor’s debts are paid, the sale cannot be interfered with. A purchaser, to be safe, has only to see that the vendor’s creditors are provided for. The vendee may sell freely, without regard to the statute, if he pays his debts. The legislature, when contemplating this legislation, had occasion to consider and balance against each other the general right of property owners to make contracts and dispose of their property, and the general right of creditors to be paid, and to have reasonable opportunities secured to them for the collection of their debts. . . . Although the requirements of the act are very strict, we cannot say that the determination of the legislature, as between the interests of owners of stocks of merchandise and their creditors was so far wrong as to render the statute unconstitutional. Within certain limitations, it is for the legislature to judge of the policy and expe* diency of a law, if, in other respects, they have power to enact it: ” Squire & Co. v. Tellier, 185 Mass. 18 (69 N. E. Repr. 312).

Another objection that has been made in one of the cases before us is, that the act is defective in that it fails to give sufficient notice of the duties imposed upon the purchasers to whom it applies. This objection can be best answered by quoting the title. It is, “An act relative to the sale in bulk of the whole, or a large part of a stock of merchandise and fixtures, or merchandise, or fixtures, not in the ordinary course of business; providing certain requirements therefor; imposing certain duties upon the seller, and making their violation a misdemeanor.” This gives notice that the body of the bill contains certain provisions as to the requirements for such sale, and if the title had ended here, no one would contend that it would he defective'because it did not specify all the requirements to be observed by the purchaser as well as by the seller. The addition of the next clause was evidently intended to give notice of the criminal liability of the seller in the event of his nonperformance of the duties devolving upon him. It would be hypercritical in the extreme to say that the addition of this clause would mislead anyone into the supposition that the act contains no requirements to be observed by the purchaser.

The judgment is affirmed.


source: Caselaw Access Project

author: Rice, P. J.,

license: Public Domain

text:
    McClelland v. Schwerd, Appellant.

      Lateral support — Land—Damages.
    In the case of land which is fixed in its place each owner has the absolute right to have his land remain in its natural condition unaffected by any act of his neighbor; and if his neighbor digs upon, or improves his own land so as to injure this right, he may maintain an action against him, without proof of negligence; but this right of property is only in the land in its natural condition, and the damages in such action aro limited to the land itself, and do not include any injury to buildings or improvements thereon.
    The cost of restoring the land to its original condition, or of repairing by grading and erecting a retaining wall, is not to be taken as the measure of damages, unless it be shown that such cost would be less than the amount of diminution in value if nothing be done.
    Where damage to the land by withdrawal of lateral support is both permanent and complete, the owner is entitled, apart from buildings, to have his damages assessed as in the ease of any other permanent injury to the land in its natural state.
    In an action to recover damages for injuries to land by the withdrawal of lateral support, it is reversible error to admit and submit to the jury for their consideration for any purpose, evidence of the depreciation in the market value of lot as a whole, including the buildings.
    In such a case evidence as to the cost of putting the lot as far as possible, in as good a condition as it was before, is relevant only for the single purpose of showing that the injury was permanent, in the sense that it was irremediable except at a greater cost, than the depreciation in the value of the lot if left in its unrestored and unrepaired condition.
    The defendant in such a case is not entitled to instruction that the damages could not exceed the difference in the value of plaintiff’s lot before and after the excavation. He is entitled to instructions that in the event of the jury finding that the injury to the lot was permanent and complete, the damages could not exceed the difference between the value of the lot without the improvements immediately before the subsidences of the soil, and its value afterwards.
    Argued April 11, 1906.
    Appeal, No. 40, April T., 1906, by defendant, from judgment of C. P. No. 1, Allegheny Co., March T., 1903, No. 65, on verdict for plaintiff in case of Maggie J. McClelland v. A. H. Schwerd.
    Before Rice, P. J., Porter, Henderson, Morrison and Head, JJ.
    Reversed.
    Trespass to recover damages for land, alleged to have been caused by withdrawal of lateral support. Before Macearlane, J.
    The facts are stated in the opinion of the Superior Court.
    At the trial J. F. McClelland was asked this question.
    “ Q. Is your property in its present condition as valuable as it was before the slip ? ”
    Objected to as incompetent and irrelevant.
    The Court: We will hear whether it has been damaged at all; not what the value was.
    Objection overruled and bill sealed for the defendant.
    Question read to witness.
    “ A. No, sir; it is not in a good condition, of course. Q. From your investigation, and the bids that you have taken, will you state what it will cost to as nearly restore the property to its prior condition as is possible under the circumstances ? ”
    Objected to as incompetent and irrelevant.
    The Court: Do you object to his incompetency, or the incompetency of the question ?
    Mr. Petty: I object to the incompetency of the evidence. Objection overruled and bill sealed for defendant. [1]
    “ A. From the bid I received — ”
    Objected to.
    Objection sustained.
    Mr. Castle: You are simply to answer the question, what will it cost ?
    A. “$1,750.”
    David Brubaugh, a witness for the plaintiff, was questioned as follows:
    “ Q. What in your judgment is the only thing to do to that property to partially restore it, or at least to stop the destruction of it? A. There would have to be retaining walls put in and regraded. Q. What will be the cost of doing that work? ”
    Objected to.
    The Court: I will overrule the objection and seal a bill for • the defendant, but it must be followed up by evidence as to the other element of damage. Exception. [2]
    “A. My estimate was $1,750. Q. Tell us what you did for that. A. I proposed to put in the necessary retaining walls and put the ground, the soil and ground, in as good shape as possible. Q. Do you know anything about the values of property in that neighborhood ? A. I don’t.”
    Defendant presented this point:
    8. If the lot of ground of the plaintiff is not wholly destroyed, the damages to be recovered cannot exceed the difference in value of the lot without improvements before the excavation made by defendant, and its value as affected by said excavation. Answer: Refused, as there was no evidence of the difference in value. [4]
    The court charged in part as follows:
    [While there is some evidence here that cropped out — most of it I believe on cross-examination — as to the difference in the value of the property, that is not the basis upon which you could render a verdict. It may possibly throw some light, it may help you in arriving at some conclusions as to what the actual damage is, but it is not the proper measure of damage, and so the testimony of the plaintiff’s husband, Mr. McClelland, and the testimony of Mr. Gibson, the real estate man, which is based upon that theory, is to be taken by you only to help you to understand upon what ground they judged the damage. The one placed it at $2,000, and I forget what the other said. The same remark applies to the evidence as to the putting up of j;his wall. The cost of the putting up of a wall is not the measure of damage, but it is some evidence helping to enlighten you upon the whole situation. What you are to get at is what is the actual loss, what is the actual damage.] [5]
    February 25, 1907:

      R. B. Petty,, with him A. H. Moeser, for appellant,
    cited: McGettigan v. Potts, 149 Pa. 155; Gilmore v. Driscoll, 122 Mass. 199; Jones v. Greenfield, 25 Pa. Superior Ct. 315.

      Franlc W. Jarvis, with him Homer L. Castle, for appellee,
    cited: Ruppert v. West Side Belt R. R. Co., 25 Pa. Superior Ct. 613.
   Opinion by

Rice, P. J.,

The plaintiff and the defendant own adjoining lots in the city of Allegheny, extending from McClure avenue to New-bum avenue. The lots rise at an angle of about forty-five degrees from McClure avenue for a distance and then extend back upon a level to Newburn avenue. On this level portion of the plaintiff’s lot a frame dwelling stood, which was reached from McClure avenue by flights of steps. The defendant desired to erect buildings on his lot fronting on McClure avenue, and for this purpose made an excavation to the. grade of the street along the front of his lot and extending back a considerable distance. It is alleged that a period of four years was occupied in the excavating; that at the end of the first two years the first slip occurred, which was a break running across the property of the defendant and into and across the property of the plaintiff; that after that break the defendant undertook to hold the bank by a barricade, but it was not sufficient, and about a year later there was a second break, which carried barricade and soil down into the street, but without injuring the building ; that the defendant then built a new wall of concrete, extending across the excavation on his own lot to the line of the plaintiff’s lot, with a wing wall along plaintiff’s lot to the street line, which wing wall now supports the embankment, and “ for practical purposes,” the plaintiff’s counsel concedes, “ has stopped further breaks.” This was the condition of the lot at the time of the trial, and no question was raised there or upon the argument here as to the admissibility under the pleadings of the proof of the facts above recited. The case was argued upon the theory that the question is as to the proper measure of damages, taking into consideration the falling away of the soil which occurred after as well as before suit brought, the condition in which the land was left, and the concession above alluded to as to the adequacy of the present retaining walls. We shall dispose of the case upon that theory.

As is well shown by the cases collected in the valuable note to Kansas City N. W. R. R. Co. v. Schwake, 68 L. R. A. 673, there is a difference of opinion as to the nature of what is commonly called the “ right to lateral support,” One view is that there is no absolute right to the support of adjacent land, independent of acquired easement, that the removal of the soil constitutes in itself no invasion of any property right of the adjoining-owner, that the only right he has in respect of such action is the common right not to be disturbed in the enjoyment of his own land by any use which the adjoining owner may make of his. But according to the doctrine frequently expressed in the decisions of the courts of Pennsylvania, and of many other-states of the union, there is incident to land in its natural condition a distinct right to support from the adjoining land; it is denominated the “ absolute right to lateral support,” and is declared to be “an incident to the land, a right of property necessarily and naturally attached to the soil: ” Wier and Bell’s Appeal, 81* Pa. 203, 208 ; McGettigan v. Potts, 149 Pa. 155; Matulys v. Phila. & Reading Coal & Iron Co., 201 Pa. 70; Fyfe v. Turtle Creek Boro., 22 Pa. Superior Ct. 292 ; Jones v. Greenfield, 25 Pa. Superior Ct. 315. The distinction is of importance when the application of the statute of limitations is involved, as in Noonan v. Pardee, 200 Pa. 474, and in the consideration of some phases of the general subject of the measure of damages, as for example the question of prospective damages. But notwithstanding this difference of opinion as to the underlying principle, it is almost universally held by the courts of this country and of England, that if one excavates his land, and in consequence of the removal of this natural support the adjoining land of his neighbor falls, the latter has a right of action, although the excavation was not carelessly or unskillfully performed. In McGettigan v. Potts, 149 Pa. 155, the following was quoted as the correct rule : “ But in the case of land which is fixed in its place, each owner has the absolute right to have his land remain in its natural condition, unaffected by any act of his neighbor; and if his neighbor digs upon or improves his own land so as to injure this right, he may maintain an action against him, without proof of negligence. But this right of property is only in the land in its natural condition, and the damages in such action are limited to the land itself, and do not include any injury to buildings or improvements thereon: ” Gilmore v. Driscoll, 122 Mass. 199. From another Massachusetts case, Foley v. Wyeth, 84 Mass. 131, Mr. Justice Brown quoted approvingly in Matulys v. Phila. & Reading Coal & Iron Co., 201 Pa. 70, as follows: “It is a necessary consequence from this principle ” (the absolute right of an adjoining owner of land to lateral support for it in its natural state) “ that, for any injury to his soil resulting from the removal of the natural support to which he is entitled, by means of excavation on an adjoining tract, the owner has a legal remedy in an action at law against the party by whom the work has been done and the mischief thereby occasioned. This does not depend upon negligence or unskillfulness, but upon the violation of a right of property which has been invaded and disturbed. This unqualified rule is limited to injuries caused to the land itself, and does not afford relief for damages by the same means to artificial structures. For an injury to buildings, which is unavoidably incident to the depression or slide of the soil on which they stand, caused by the excavation of a pit on adjoining land, an action can only be maintained when a want of due care or skill, or positive negligence, has contributed to produce it.”

It follows logically that, if it be built upon, the diminution of the value of the lot as a whole, including the buildings, in consequence of the excavation and the falling of the soil, or either, is not a reliable measure of damages, in the absence of negligence. For, while the fact that the lot is built upon will not prevent recovery, if the weight of the structures did not contribute to the falling away of the soil, yet the same principle which prevents recovery for a physical injury to the buildings also prevents recovery for a depreciation of their value considered either separately from or as part of the value of the land.

There are obvious objections to a general rule making the cost of putting the land into, and maintaining it in, its former condition, the ordinary measure of damages. In many cases this would be impossible, except.at a cost which would be wholly out of proportion to the. actual damage. As was said in McGuire v. Grant, 25 N. J. L. 356, it will frequently happen that the subsidence of land in a city, occasioned by the grading of adjacent lots, thus bringing the surface nearer the grade of the street, will but slightly diminish its real value. For.these and other reasons, the decided cases generally concur in the conclusion that the cost of restoring the land to its original condition, or of repairing by grading and erecting a retaining wall, is not to be taken as the measure of damages, unless it be shown that such cost would be less than the amount of diminution in value if nothing be done.

The value of the soil displaced, if such value is to be computed upon the loose dirt and rock that have fallen, is not ordinarily a reliable test of the pecuniary injury; and a careful study of the case of McGettigan v. Potts, which is sometimes cited for that purpose, shows that it establishes no such rule. It is true Mr. Justice Gbeeít suggested, although he was careful to say that the point was not positively adjudicated, that in the case then before the court, “ it would seem that the only element of damage appearing in the testimony is the loss *of the soil.” But to declare that under the testimony in a particular case the loss of the soil is the only element of damage, is not to declare that it is such in every case, or that in awarding compensation for the loss the direct injury to the lot from which it has been severed is not to be considered. The soil that has been lost may have very little value as a distinct marketable commodity, and a very considerable value to a proprietor when resting in its natural state in a lot of gi'ound owned by him. If either value is to be taken as the measure of damages, it ought to be the latter, and one way to determine its value would be to ascertain how much less the land is worth in the market without it than it was with it. It seems too plain for argument that the above quoted remark of Justice Green was not intended, and cannot be made to serve, as a judicially established rule, that although the plaintiff’s land is left in a broken and damaged condition by the falling away of the soil in consequence of the removal of the natural support to which it was entitled as an absolute right, yet he can recover only the market value of the number of cubic yards or cart loads of loose dirt that has fallen into the pit his neighbor has dug. Possibly there might arise a case in which the loss of the soil would be so insignificant, relatively, as not to appreciably affect the selling or rental value of the lot, or the owner’s use and enjoyment of it. In such a case the market value of the lost soil, treated as a separate commodity, might be adequate compensation for the injury; but there is no natural or legal presumption, either prima facie or conclusive, that it would be such in all cases. We find nothing in McGettigan v. Potts which conflicts with this conclusion.

Unquestionably, the case is authority for the proposition, that if by reason of an excavation without negligence made by the defendant on his own land, the land of the plaintiff falls away, his right of recovery is restricted to the damages occasioned by the “injury to and loss of the soil alone.” This, I venture to suggest, is but another form of expressing the rule heretofore alluded to, that it is only the injury to the land, distinct and apart from the buildings and other artificial structures erected thereon, of which the law takes cognizance, in the absence of negligence, and acquired easement. And it is quite clear from this and other decisions that if the injury be not permanent, the difference in market value, either of the lot with the buildings, or without them, before and after the injury, is not the proper measure of damages. In such case the injury is to be compensated by allowing the actual damages sustained by the plaintiff up to the time of suit brought, which in the absence of special circumstances, are usually restricted to compensation for the diminished use or enjoyment of the property.

But there are expressions in the opinion of Mr. Justice Green which have been taken to mean that in no case of this kind can the diminution of the value of the land, without the buildings, in consequence of the injury to and loss of the soil, be taken as the measure of damages. As the case must go back for retrial it is proper that we should consider this question in the light of the very recent decision of our Supreme Court that Robb v. Carnegie, 145 Pa. 324, and McGettigan v. Potts, 149 Pa. 155, are not to be considered as establishing the doctrine that in no instance, and under no circumstances is depreciation of market value the measure of damages for an injury to real estate in an action between private parties : Rabe v. Shœnberger Coal Co., 213 Pa. 252. As shown at the outset of this opinion, we have before us a case where a jury would be warranted in finding, that in consequence of the withdrawal by the defendant of the natural support to which the land of the plaintiff was entitled, a considerable part of the soil has fallen away, and the lot has been left in a broken and damaged condition; that although the concrete walls which have been substituted by the defendant for the natural support have thus far prevented, and probably will continue to prevent, further lateral subsidence by reason of the excavation, yet the cost of remedying, by any method thus far suggested, the damage that had been occasioned in the meantime, or of restoring the land to its former condition, if that were possible, would exceed the diminution of the market value of the lot apart from the buildings and other structures, if permitted to remain in its present condition; in short, that the damage to the plaintiff’s lot result-, ing from the defendant’s acts is both permanent and complete ; by which last remark we mean that no further damage to the lots is to be expected. We do not say that a jury would be bound to find all these facts, but only that they could find them from the evidence produced at the trial. Upon such a state of facts, “ it would be grievous to the parties, certainly grievous to one or the other, if the damages could not be finally settled in one action,” as was remarked by Mr. Justice Trunkey in Pittsburg and Lake Erie R. R. Co. v. Jones, 111 Pa. 204. In the case of Rabe v. Shœnberger Coal Co., 213 Pa. 252, the subject of the measure of damages for a permanent injury to real estate received elaborate consideration. The case is very pertinent, because the injury complained of was the withdrawal of subjacent support, resulting in the destruction of five springs, and the principal question was whether in awarding damages the aggregate value of the springs, as independent pieces of property, was to be given, or their destruction was simply one of the elements of depreciation to be considered in ascertaining the loss in the selling value of the whole property caused by the injury inflicted by the defendant. In the admission of evidence and in the instructions to the jury the learned trial judge followed the rule he understood to be laid down in McGettigan v. Potts that the depreciation of market value is not the proper measure of damages for an injury to real estate in an action between private parties. This was held to be error, and after an extended review of the authorities by Mr. Justice Pottee it was declared “ that the sound rule is, that where there is a permanent injury to real estate, the extent of the damage caused thereby is to be measured by the resulting depreciation in the value of the property. Permanency is the proper test for the application of this rule.” There is no ground for inferring from the authoritative exposition of the law that led up to this conclusion that while it is the proper test in an action for withdrawing subjacent support it is not so in an action for withdrawing lateral support. If such permanent injury as we .have been considering has actually depreciated the land in value, why should not this be compensated in damages ? As was said in Seely v. Alden, 61 Pa. 302, it is difficult to give a good reason against it. “ Compensation for the diminished enjoyment or use of the property for a certain number of years is no compensation for the diminished value of the estate itself.” As “ each owner has the absolute right to have his land remain in its natural condition, unaffected by any act of his neighbor,” the conclusion seems irresistible that for a permanent injury to his land, apart from the buildings and other artificial structures thereon, resulting from a disregard of this right, and upon such a state of facts as we have set forth in this immediate connection, he is entitled to have his damages assessed as in the case of any other permanent injury to the land in its natural state.

In conclusion, we are of opinion that, in the absence of proof of facts sustaining the allegation of negligence, there was error in admitting, and submitting to the jury for their consideration for any purpose, evidence of the depreciation in market value of the lot as a whole, including the buildings. The learned judge very plainly instructed the jury that it was not the proper measure of damages, but said that it might help them “ in arriving at some conclusion as to what the actual damage is.” We fail to see how; it could help the jury in this regard; it seems to us that it was more likely to confuse and mislead them.

The testimony of David Brubaugh (second assignment) relative to the cost ($1,750) of putting the lot, as far as possible, in as good condition as it was before, if admissible at all in the plaintiff’s case in chief, was relevant only for the single purpose of showing that the injury was permanent, in the sense that it was irremediable except at a greater cost than the depreciation in the value of the lot if left in its unrestored and unrepaired condition. It should have been confined very strictly to the purpose above stated. And as it appeared subsequently by the testimony of the plaintiff’s husband, which was the only testimony given by her witnesses upon the subject, that the value of the lot without the buildings before the excavation was only $1,000, it is manifest, we think, that the instruction, that while the cost testified to by Brubaugh was not the measure of damage, “ it is some evidence to enlighten you upon the whole situation,”. was scarcely adequate. s

The defendant was not entitled to instructions (fourth assignment) that the damages could not exceed the difference in value of plaintiff’s lot before and after the excavation. If he had asked for instructions that in the event of their finding that the injury to the lot was permanent and complete, as heretofore explained, the damages could not exceed the difference between the value of the lot without the improvements immediately before the subsidence of the soil, and its value in its present condition, we. think the instructions should have been granted. But that is not the way the point under discussion reads, and it is not clear that it is what the jury would understand it to mean. Therefore it was properly refused.

J udgment reversed and venire facias de novo awarded.


author: Porter, J.,

text:
    McGinley’s License.

      Liquor laws — Revocation of license — Petition—Answer—Hearing— Appeals — Certiorari—Residence of petitioners.

    Where a petition for the revocation of a retail liquor license on the ground of violation of the liquor laws, is met by an answer positively denying all the charges made in the petition, the court cannot under section 7 of the Act of May 13, 1887, P. L. 108, revoke the license without giving the respondent a hearing on the merits.
    On an appeal from an order of the quarter sessions revoking a liquor license, the writ of certiorari brings up only the record, and the appellate court is only authorized to examine and review the proceedings of the court of quarter sessions, so far as to inquire and determine the extent and limits of its power, and the regularity of its exercise.
    Where on such an appeal the record shows a petition for revocation, and a responsive answer thereto, but no hearing on the merits, and the opinion filed by the court below shows that the judge acted entirely upon evidence which he had heard in a criminal charge against the defendant for violating the liquor laws, in which the verdict was not guilty, the order of the court below revoking the license will be reversed.
    The Act of May 13, 1887, P. L. 108, does not limit the number of persons who may institute a proceeding to revoke a license, to’ residents of a ward in which the licensed place is situated.
    Where a petition for the revocation of a liquor license charges that the illegal sales were made by the respondent, “the holder of said license,” it will be assumed that the sales charged in the petition were made after the date of the license referred to in the petition.
    Argued Oct. 3, 1906.
    Appeal, No. 64, April T., 1907, by Charles McGinley, from order of Q. S. Indiana Co., Dec. T., 1905, No. 16, making absolute rule to revoke a retail liquor license in the application of Charles McGinley.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Reversed.
    Petition to revoke a liquor license. Before Telford, P. J.
    The facts are stated in the opinion of the Superior Court.

      Error assigned was the order of the court of quarter sessions.

      W. E. Elkin and Samuel Cunningham, with them J. N. Lang-ham, for appellant,
    cited: Good v. Grit Pub. Co., 214 Pa. 614; Carlson’s License, 127 Pa. 330; Kocher’s License, 27 Pa. C. C. Rep. 432.
    February 25, 1906 :

      John IL Pierce, for appellees,
    cited: Campbell’s License, 8 Pa. Superior Ct. 524; Gabel’s License, 3 Kulp, 204; Hasting & Ward’s Case, 39 Legal Int. 440; Dolan’s App., 108 Pa. 564; Moyer’s App., 8 Pa. Superior Ct. 475; Moyer’s License, 20 Pa. C. C. Rep. 663; Weaver’s License, 20 Pa. Superior Ct. 95 ; Donoghue’s License, 5 Pa. Superior Ct. 1; Pollard’s Petition, 127 Pa. 507 ; Mead’s License, 161 Pa. 375 ; Thomas’s License, 169 Pa. 111; Templeton’s License, 3 Pa. C. C. Rep. 434; 4 Lanc. L. Rev. 242; Woodward’s License, 3 Montg. 190; Bosch’s License, 5 Pa. C. C. Rep. 315; Slowitzski’s License, 5 Kulp, 108; Carlson’s License, 127 Pa. 330 ; Gillespie’s License, 3 Pa. Dist. Rep. 461; McLaughlin’s License, 24 Pa. C. C. Rep. 92.
   Opinion by

Porter, J.,

The court of quarter sessions of Indiana county, on February 16, 1906, granted to Charles McGinley a license to sell liquors at retail for the year beginning April 2, 1906, at the expiration of a then existing license held by him. McGinley promptly paid the fee and took out the license: On March 24, 1906, a petition signed by a number of residents of the borough of Indiana, and duly verified by affidavit, setting forth the grant of the license aforesaid, that said McGinley had been the holder of a similar license for the same hotel for several years previous thereto, and that said “ Charles McGinley, the holder of said license, has violated the laws of this commonwealth relating to the sale of liquors in the following manner : First. In furnishing by sale, gift or otherwise vinous, spirituous, malt or brewed liquors to minors. Second. In making sales of said liquors to persons of known intemperate habits. Third. In furnishing by sale, gift or otherwise liquors on Sunday.” The petitioners prayed the court “to fix a day for hearing upon which they may produce witnesses before your honorable court to prove said violations of law and if upon said hearing the court is of the opinion that sufficient cause has been shown or that the said licensee has violated any law of this commonwealth relating to the sale of liquors that the said court then upon notice being given shall revoke his said license.” The court granted a rule on the appellant to show cause why his license should not be revoked. The appellant filed an answer, specifically denying that he had violated any of the laws of the commonwealth relating to the sale of liquors, either by furnishing the same by gift, sale or otherwise, to minors, or persons of known intemperate habits, or by furnishing the same by sale, gift or otherwise on Sunday. The appellant further set forth in his answer that a number of the petitioners did not live in the ward in which the licensed hotel was situated, and that the petition did not aver that the alleged violations of the law had occurred subsequently to February 16,1906, the date when the license which it was sought to be revoked had been granted, and prayed that for these reasons the petition might be dismissed. The counsel for the respondent subsequently moved the court to dismiss the petition, for insufficiency, for the reasons set forth in the answer, which motion was argued, on April 30, 1906, and the court took thapapers and held it under consideration. The court, on July 30, 1906, made an order making absolute the rule to show cause why the license should not be revoked, from which order we have this appeal.

The order .to revoke the license is not founded upon the power of the court to modify or change its own decrees during the same term at which they are entered, for the proceeding to revoke this license was not commenced until after the expiration of the term at which the license was granted. Nor can the action be referred to the powen of a court to modify its decrees which have been obtained through fraud or corrupt misrepresentation, for there is no allegation of anything of that kind in the petition in which the proceeding had its inception. The order can therefore be founded only in the power conferred upon the court by section 7 of the Act of May 13, 1887, P. L. 108, the material part of which is in these words: “ Upon sufficient cause being shown or proof being made to the said court that the party holding a license has violated any law of this commonwealth relating to the sale of liquors, the court of quarter sessions shall, upon notice being given to the person so licensed, revoke the said license.” The rule to show cause was based upon an ex parte affidavit or petition, alleging that the licensee had violated certain specific provisions of the law relating to tbe sale of liquors, and, as the order of revocation specifies no other cause therefor, it is our duty to look into the petition: Meenan’s Appeal, 11 Pa. Superior Ct. 575. The petition clearly confines the charge, against which the appellant was by the rule required to show cause, to a provision which authorizes a revocation upon “ proof being made to the said court that the party holding a license has violated any law of this commonwealth relating to the sale of liquors.” This provision of the statute means proof by evidence produced in a legal manner, of which the respondent shall have notice and where he shall have an opportunity to cross-examine the witnesses and, if he so desires to produce controverting testimony. The notice which the statute requires to be given a party whose license it is sought to revoke, is required to be given in order that he may have a chance to defend his rights, and this requirement of the statute is not complied with by a mere notice that the court intends to revoke the license, given after the court has already made up its mind, with or without evidence.

The writ of certiorari in this case brings up only the record, and had there been a hearing and testimony the conclusion of the court below as to the facts would not have been re viewable. The appellate' courts, in cases of this character, are only authorized to examine and review the proceedings of the court of quarter sessions, so far as to inquire and determine the extent and limits of its power and the regularity of its exercise: Northampton County Commissioners’ Appeal, 57 Pa. 452; Carlson’s License, 27 Pa. 330; Pollard’s Petition, 127 Pa. 507; Prospect Brewing Company’s Petition, 127 Pa. 523; Donoghue’s License, 5 Pa. Superior Ct. 1; Moyer’s Appeal, 8 Pa. Superior Ct. 475 ; Campbell’s License, 8 Pa. Superior Ct. 524; Meenan’s License, 11 Pa. Superior Ct. 575; Weaver’s License, 20 Pa. Superior Ct. 95; Dolan’s Appeal, 108 Pa. 564. While the provision of the statute requiring the revocation of a license, when the requisite facts have been ascertained, is mandatory, the court of quarter sessions exercises a judicial discretion in the' ascertainment of the facts. That discretion must be exercised in a lawful manner; the petitioners who have instituted the proceeding to revoke the license have a right to be heard and produce evidence and so has the respondent whose license it is proposed to strike down: Gross’s License, 161 Pa. 344; Gemas’s License, 169 Pa. 43; Thomas’s License, 169 Pa. 111.

The record shows that the answer of the appellant specifically denied the averments of the petition, the court was therefore not warranted in taking the facts as admitted; under the petition and answer, the case required the production of evidence, and in order that evidence might properly be produced there was a necessity for a hearing of which the respondent should have notice. The record shows' that there was no hearing in this case, and that the court never fixed a time for a hearing upon the merits. The opinion of the learned judge of the court below which in strictness is not a part of the record, clearly shows that the appellant never had a hearing or opportunity to be heard, as to the facts, in this proceeding. That opinion clearly shows that the learned judge in making the order to revoke the license of the appellant acted entirely upon evidence which he had heard in a criminal charge against the defendant,' for violating the liquor law, in which the verdict was not guilty. The appellant had no notice that the proceeding to revoke his license was being heard at that time, and it is manifest that there cannot be a legal hearing, where the party does not know and has no opportunity to know that his case is being heard. The opinion of the court, therefore, is in harmony with the record proper, which shows that the appellant never had a hearing upon the proceeding to revoke his license. The first and second specifications of error are sustained.

The order of the court overruling the motion to dismiss the petition was properly made: The act of 1887 does not limit the number of those who may institute a proceeding to revoke a license to residents of the ward in which the licensed place is situated. The language of the petition, as to the sales to minors and persons of known intemperate habits, is not definite as to the time, but in proceedings of this character the same exactness is not requisite as in the case of an indictment. The petition does state that the sales were made by the appellant, “ the holder of said license; ” this manifestly refers to the license granted February 16, 1906. The appellant was the holder of a license, within the meaning of the statute from the date of the order of the court awarding the same: Umholtz’s License, 191 Pa. 177. If after the license was thus granted, the appellant being the holder thereof, violated the law as alleged in the petition, he came within the provisions of the seventh section of the Act of May 13, 1887, P. L. 108. We cannot assume in advance that the court at the hearing will permit evidence as 'to occurrences prior to the granting of the license. The fourth specification of error is dismissed.

The order is reversed and the record remitted with a procedendo.


author: Oklady, J.,

text:
    Carrara Paint Agency Company v. Naylor, Appellant.

      Affidavit of defense — Sale—Contract—Fraud—Principal and agent.

    In an action upon an accepted draft alleged to have been given in payment for balance due for paint sold and delivered, an affidavit of defense is sufficient which avers that the contract of sale was for a specified quantity of paint “at the usual and customary market price,” that defendant relied on the representations of the plaintiff’s agent that the price as stated was $1.25 per gallon, and that after accepting the draft he learned that the usual and customary price for the paint was $1.05 per gallon, and that the price remained at that figure until the affidavit was filed, that payments made on account of the draft after the acceptance thereof were made without knowledge of the misrepresentation as to the price, and that as soon as he learned what the usual and customary market price was he notified the plaintiff thereof.
    Argued Oct. 3, 1906.
    Appeal, No. 129, Oct. T., 1905, by defendant, from order of C. P. No. 1, Phila. Co., March T., 1905, No. 335, making absolute rule for judgment for want of a sufficient affidavit of defense in case of Carrara Paint Agency Company v. Charles Naylor.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Reversed.
    Assumpsit on a draft.
    Rule for judgment for want of a sufficient affidavit of defense.
    Defendant in his affidavit of defense averred :
    The Carrara Paint Agency Company, the plaintiff, by its agent, E. B. Browne, to wit: on or about September 24, 1902, sold to the defendant a carload (3,000 gallons) of Carrara paint at the usual and customary market price, and the said Browne, agent for the plaintiff, informed defendant at and before the time of the said sale that the usual and customary market price for said paint was $1.25 per gallon in carload lots f. o. b. Philadelphia.
    Defendant received the said paint on or about November 7, 1902. The defendant paid on account of the price of said paint, before the acceptance of the draft set forth in plaintiff’s statement of claim, the following amounts :
    November 7, 1902, I 88.73
    December 1, “ 33.87
    . December 3, “ 36.15
    December 4, “ 45.00
    December 12, “ 180.71
    Total, $384.46
    Afterwards, to wit: on January 1, 1903, the plaintiff drew on defendant for the balance of the said account, $3,512.90, and the defendant at once accepted the said draft, and has since paid the sums on account of said draft as set forth in plaintiff’s statement of claim.
    At the time of the acceptance of the said draft, the defendant believed that the information received by the defendant from Browne, the plaintiff’s agent, with reference to the usual and customary market price of said paint was correct, and defendant relied upon the said statement of said Browne, and unless said representations had been made he would not have accepted the said draft, but the defendant has, since the acceptance by him of the said draft, learned, and now avers, that the usual and customary market price of said Carrara paint, in carload lots f. o. b. Philadelphia, was, at the time of the said order and delivery, $1.05 per gallon, and that it still remains at that price.
    In a supplemental affidavit of defense the defendant averred:
    That the contract between the said plaintiff and the said defendant under which the said paint was sold, delivered and charged to the defendant, was a verbal contract, and that the said E. W. Browne was the duly authorized agent of the said Carrara Paint Agency Company to make the same.
    February 25, 1907 :
    That he first learned what the usual and customary market price of the said paint was on or about January- 31, 1903, and at once notified the said plaintiffs of the incorrect amount of the said draft which the defendant had accepted.

      JError assigned was the order making absolute rule for judgment for want of a sufficient affidavit of defense.

      Wayne P. Rambo and Win. S. Allen, for appellant.
    — Plaintiff cannot enforce a contract the inducement to the signing of which was a false statement of an existing fact made by its agent. The inducement was that others paid the same price as himself: Smith, Kline & French Co. v. Smith, 166 Pa. 563.

      Alfred Tennyson Steinmetz, with him Creorge Wentworth Carr, for appellee.
    — The agreement of the defendant to pay the price stated is binding^upon him irrespective of any statements, true or not, as to the then market value of the goods made by the vendor or its agent: Depuy v. Pierce, 1 W. N. C. 158 ; Rockafellow v. Baker, 41 Pa. 319 ; Cronk v. Cole, 10 Ind. 485; Smith, Kline & French Co. v. Smith, 166 Pa. 563.
    The defendant, by accepting a bill of exchange drawn upon him by the plaintiff, finally fixes the amount of money due by him to plaintiff, and cannot prove that it was executed by reason of prior misrepresentations on the part of the plaintiff: Martin v. Berens, 67 Pa. 459.
   Opinion by

Oklady, J.,

The defendant in his affidavit of defense clearly and positively avers that the verbal contract made with the plaintiff was for a car load (3,000 gallons) of Carrara paint at the usual and customary market price, and that he relied on the representation of the plaintiff’s agent that the price as stated in the making of the contract and acceptance of the draft embraced in the plaintiff’s claim, was $1.25 per gallon in car load lots f. o. b. Philadelphia; and that after accepting the draft he learned, and now avers, that the usual and customary price for this paint in carload lots, F. O.B. Philadelphia at the time the contract was made, was $1.05, and not $1.25 per gallon and remained at that figure until his affidavit was filed.

The contract was entire, and the price as averred in the affidavit was not at so much per gallon, but at the market price per gallon, whatever that might have been. The defendant does not seek to avoid the contract but insists upon its performance on its true terms, hence he is not prejudiced by his payments made on account of the claim after the acceptance of the plaintiff’s draft on him. He gave prompt notice of his defense as soon as he learned that he had been misled by the statement of plaintiff’s agent: Fischer v. Dalmas, 173 Pa. 296 ; Hubbard v. French, 1 Pa. Superior Ct. 218. Moreover, this contest is between the original parties to the contract, and the only question is as to what were its terms. On defendant’s own showing he was liable to pay at the rate of $1.05 per gallon; and his defense relates only to the excessive charge which the plaintiff claims, that which was over and above the usual and customary market rate. Usually buyer and seller are dealing at arm’s length, and there is no confidence between them unless a warranty is demanded and given. “ They use not each others eyes, but each his own. The seller is allowed to express freely his opinion of the value of his wares; the buyer is at equal liberty to answer that it is naught. If there is an intentional concealment or suppression by either party of material facts which he is bound to communicate to the other, there is fraud ; but neither party is bound to communicate that which is equally accessible to both. The state of the markets, the present and prospective value of a particular commodity, are among the things which are alike open to both buyer and seller, and neither is bound to instruct the other ” is the rule laid down in Rockafellow v. Baker, 41 Pa. 319. However, that was a case where a recission of an executed contract was contended for, and the defense related to the quality or value of the article. Under the averments of this affidavit it must be held that “ the usual and customary market price ” for the paint at the time the contract was made with the defendant was the price per gallon at which the plaintiff was then selling the article to other dealers ; which per gallon price was a substantive fact and was well known to the plaintiff; if the agent represented that “ the usual and customary market price ” was $1.25, whilst in fact it was but $1.05 per gallon, it was a false representation of a fact, intentionally made for the purpose of defrauding the defendant; which it is averred, was the inducement to the making of the contract: Smith, Kline & French Co. v. O. Smith, 166 Pa. 563; Goodwin v. Schott, 159 Pa. 552.

We are to assume that the facts stated in the affidavit are true; if they are so, the defense is sufficiently set out to prevent a summary judgment, and put the plaintiff to the proof of his claim. The judgment is rev ersed and a procedendo awarded.