author: Head, J.,

text:
    Union League v. Ransley, Appellant.

      Taxation — Mercantile tax — Clubs—Sale of cigars — Restaurant—Pool room — Acts of May 2, 1899, P. L. 184, April 25, 1907, P. L. 117, and May 25, 1907, P. L. 244.
    Asocial club is not required under the Act of May 2,1899, P. L. 184, to pay a mercantile tax, as vendor of goods, wares and merchandise, be-causes it purchases cigars and distributes them among its members in the manner customary in such clubs; nor is it required to pay a tax under the Act of April 25, 1907, P. L. 117, because it carries on a restaurant; nor to pay a tax under the Act of May 25,1907, P. L. 244, as a keeper of a billiard or pool room for purposes of profit.
    Argued Oct. 19, 1908.
    Appeal, No. 113, Oct. T., 1908, by-defendant, from decree of C. P. No. 5, Phila. Co., March T., 1908, No. 844, on bill in equity'in case of The Union League of Philadelphia v. Harry C. Ransley et. al., Mercantile Appraisers.
    Before Rice, P. J., Henderson, Morrison, and Head, JJ.
    Affirmed.
    Bill in equity for an injunction. Before Martin, P. J., and Staake, J.
    The opinion of the Superior Court states the case.

      Error assigned, was decree awarding injunction.

      Murdoch Kendrick, for appellants. —
    The three acts of assembly under which the transactions performed by The Union League are alleged to be taxable — are clear, precise and unambiguous in terms. The legislature has not limited the applicability of the general terms of these acts of assembly to transactions other than such as the vender, dealer, individual or corporation regards as incidental.
    It is submitted that the case at bar does not represent equitable divisions of property of tenants in common among themselves, but that the only alternative is left to say that there is a repetition of sales by a corporate entity to its members constituting a business in fact and that all tests depending for their premises on the form, description, surroundings or intention of the individual or corporate vender, dealer or keeper are irrelevant in deciding whether what in fact done is but a private form of retail business.
    In view of the plain purpose of the legislature to tax generally in fairness to all, it is respectfully submitted that the honorable judge of the lower court may have fallen into error in using the above “tests” to interpret the acts of assembly in question as regards their applicability to appellee: Philadelphia v. Ridge Ave. Pass. Ry. Co, 102 Pa. 190; Cornwall v. Todd, 38 Conn. 433.
    A revenue law is not to be strictly construed, but rather the contrary so as to attain the ends for which it was enacted: U. S. v. Hodson, 77 U. S. 395; Smythe v. Fiske, 90 U. S. 374; Union Pass. Ry. Co. v. Philadelphia, 83 Pa. 429; Vicksburg, etc., R. R. Co. v. Dennis, 116 U. S. 655 (6 Sup. Ct. Repr. 625); North Missouri R. R. Co. v. Maguire, 87 U. S. 46; Minot v. Philadelphia W. & B. R. R. Co., 85 U. S. 206; New Orleans City, etc., R. R. Co. v. New Orleans, 143 U. S. 192 (12 Sup. Ct. Repr. 406) People v. Cook, 148 U. S. 397 (13 Sup. Ct. Repr. 645); Keokuk, etc., R. R. Co. v. Missouri, 152 U. S. 301 (14 Sup. Ct. Repr. 592).
    To relieve an appellee from liability to taxation under the acts would be to work a clear discrimination among members of the same class, profession or business, and is in violation of Art. IX, secs. 1 and 2, of the constitution of Pennsylvania: Knisely v. Cotterel, 196 Pa. 614; Com. v. Muir, 180 Pa. 47; Com. v. Canal Co., 123 Pa. 594; Com. v. Bailey, Banks & Biddle Co., 20 Pa. Superior Ct. 210; State v. McBrayer, 98 N. C. 619.
    The fact that an individual, partnership, corporation or other group of persons associated together, fit their establishments with such fixtures that the expense of maintaining such overbalances the profits made on “conveniences” sold to their members or guests, does not render such sales less a business of vending such articles, where the prices do net a profit on what is sold.
    The fact that the incorporated group is associated together primarily for qther than business purposes is not a relevant fact in determining whether what is incidentally conducted is in fact a business: Com. v. Tierney, 29 W. N. C. 194; Klein v. Livingston Club, 177 Pa 224; Mohrman v. State, 105 Ga. 709; Chicago v. Netcher, 183 Ill. 104; South Shore Country Club v. People, 228 Ill. 75.
    July 14, 1909:
    The mere fact that a group of persons choose to make the primary object of their association such as is non-remunerative, cannot determine the quality of the act or acts done “incidental” or supplementary to such: Creveling v. Wood & Leman, 95 Pa. 152; Bowen v. Burk, 13 Pa. 146; Com. v. Tierney, 29 W. N. C. 194.
    The word “business” is of large signification and in its broadest sense includes nearly all the affairs in which either an individual or a corporation can be actors: People v. Tax Commissioners, 23 N. Y. 242; In Re Alabama, etc., R. R. Co., 9 Blatch. (U. S.) 390; Bloom v. Richards, 2 Ohio St. 387.
    The Union League is taxable as a vender in cigars. The following are cases where social clubs were held taxable for business conducted where such was alleged as a distribution among members or an incident: Kentucky Club v. Louisville, 92 Ky. 309 (17 S. W. Repr. 743); People v. Soule, 74 Mich. 250 (41 N. W. Repr. 908); Nogales Club v. State, 69 Miss. 218 (10 So. Repr. 574); State v. Essex, 53 N. J. L. 99 (20 Atl. Repr. 769); State v. Neis, 108 N. C. 787 (13 S. E. Repr. 225); State v. Shumate, 44 W. Va. 490 (29 S. E. Repr. 1001); U. S. v. Giller, 54 Fed. Repr. 656; People v. Andrews, 115 N. Y. 427 (22 N. E. Repr. 358); Com. v. Tierney, 29 W. N. C. 194; Com. v. Steffner, 2 Pa. Dist. Repr. 152.

      W. W. Porter, of Porter, Foulkrod, & McCullach, for appellee,
    cited: Klem v. Livingston Club, 177 Pa. 224; Com. v. Carey, 151 Pa. 368.
   Opinion by

Head, J.,

The Union League of Philadelphia is a corporation duly existing under the laws of the commonwealth. Created primarily for the purpose of enabling its members to more effectively aid the national government in the dark days of civil war, it has continued its existence, through the peaceful years that have followed, chiefly to promote those relations among its members and to furnish to them those conveniences and comforts that seem to have become a necessary incident in the development of the social life of modern civilized man. It owns a large and valuable property on Broad street in the city of Philadelphia. It provides commodious rooms and halls, well lighted and heated, in which its members may assemble. Their walls are lined with pictures and statuary, calculated not only to keep alive the memory of the epoch in which the organization had its birth, but also to create in the minds of its members a love for the beautiful in art and an appreciation of the refinements of life. It furnishes to its members food, drink and amusement in the variety demanded by its extensive membership, and is doubtless, as the court below finds, one of the most widely known and best maintained institutions of its kind in the entire country.

The Act of May 2, 1899, P. L. 184, is entitled: “An Act to provide revenue by imposing a mercantile license tax on venders of or dealers in goods, wares and merchandise, and providing for the collection of said tax.” Its first section declares: “That from and after the passage of this act, each retail vender of or retail dealer in goods, wares and merchandise, shall pay an annual mercantile license tax,” etc. The eleventh section provides that “each dealer who comes under the provisions of this act shall cause to be placed permanently at the entrance of his or their place of business a sign describing the business in which the party is engaged, with his or their name or names upon the same.” The appellants, who were the mercantile appraisers for the county of Philadelphia, conceiving that, in supplying cigars to its members, the Union League was a vender of or dealer in merchandise within the meaning of the act, served a notice upon the officers of the club requiring them to make such returns, relating to its distribution of cigars among its members, as would enable the appraisers to fix the amount of mercantile tax it should pay. The appellee thereupon filed this bill praying for an injunction to restrain the appraisers from the threatened action. This bill was so proceeded in that the learned court below awarded a permanent injunction, and from its decree this appeal is taken.

The act of 1899 did not by any means inaugurate a new policy of taxation in this state. It was but the last of a long series of legislative enactments begun nearly a century ago, all of which were aimed at the taxation of the business of venders or dealers in merchandise. For the greater portion of that long period of time, social clubs have been in existence, some of them incorporated by special acts of the legislature before the adoption of the new constitution, and a multitude of them, since that time and the passage of the act of 1874, by the courts under the provisions of the last-named act. Of the existence of such clubs, the modes in which they were created, and the manner in which they fulfilled the purposes of their creation, the legislature could not have been ignorant. In no one of the many acts of assembly providing for the taxation of venders of merchandise has the legislature ever indicated its intention to include a social club as a member of the class intended to be taxed. Had there been at any time a popular demand for the taxation of any of those things which are the well-known incidents of club life, it is only fair to presume that the legislature would have responded. When, therefore, during such a long period of time, a line of legislative acts, dealing largely with the same subject-matter, has been understood to adopt a policy seemingly acquiesced in by the legislature and the people, our courts naturally would be and ought to be slow in declaring that the intention of the legislature, in the last act of a long series, was different from that commonly understood and accepted during all the preceding years.

It seems to us, however, that our conclusion need not be rested upon such general considerations, because it is clear that unless the appellant can be regarded as a “retail vender of or retail dealer in goods, wares and merchandise,” to wit: cigars, it is not within the purview of the act of 1899. That it is not such a vender or dealer, we believe to have been authoritatively decided by our own Supreme Court.

In Klein v. Livingston Club, 177 Pa. 224, a case was presented which, as to the vital point in question, was exactly similar to the one now before us. In that case the defendant was a club organized for social purposes. It owned its own property and furnished to its members food, liquor, and such other things as their comfort or convenience required. Its method of purchasing a stock of liquor and distributing it among those of its members who desired to use it was, in no material respect, different from that adopted by the appellee in the purchase of a stock of cigars and the distribution of the same among its members. If such a method of furnishing liquor to its members, or distributing it among them according to their wants, constituted a sale of the liquor, then the club was violating the act of assembly commonly known as the Brooks Law. In an elaborate opinion by the late Mr. Justice Dean, wherein the whole subject was fully discussed, the following language was used: “The purpose of the whole system is to distribute the advantages, comforts and luxuries of the club among the members, so that there shall not be unequal contributions to the treasury which purchases them. They are all owners of the property when purchased, in equal shares; and if a division were then made, each would be entitled to an equal share of the liquor; but one consumes his share and that of others who do not drink liquor, and he puts back into the common treasury the value of the others’ shares; therefore, although by consumption the division is not equal, yet it is made equal by the contribution to the treasury; that has neither lost nor gained, consequently the contribution is equitable. Does this constitute a sale? We think not; there is no element of bargain, only a method of distribution of the common property.”

Many cases are there cited tending to show that, whilst the decisions in all jurisdictions have not been uniform, the weight of opinion has been with the view thus adopted by our own courts. It is clear that if the present attempt was aimed at the distribution of liquor among its members by the appellee, the question would be res adjudicata. If, under such circumstances, there would be no sale of liquor, it is impossible to see how it can be successfully contended that there is a sale of cigars, and if there be no sale of cigars, it follows that the appellee is not a vender of or dealer in cigars within the meaning of the act of assembly. It is true that in the case referred to, it appeared from the pleadings that the club received no profit on the liquors consumed by its members. This we do not regard as a controlling question. The merchant, whose ventures prove unprofitable, must pay his mercantile tax as well as his competitor who reaps a golden harvest by virtue of his superior energy or foresight. And it is apparent from the testimony in this case that the appellee reaps no profit because of its handling of cigars. It is true that it appears, from the reports made to the governing body of the receipts and expenditures incident to the handling of cigars, the receipts exceeded in amount the charges specially set over against them, but it also appears that this resulted only in a paper profit rather than a real one, because under the system of bookkeeping, adopted by the club for the guidance and information of its officers, no charges were made for many important items, such as light, heat, floor space, service, etc., that would necessarily attend the business of an ordinary dealer in such articles. We are constrained to hold, therefore, under the authority of the case cited, that the appellant is not a vender of or dealer in merchandise within the meaning of the act of 1899, and is not subject to the mercantile tax imposed on such dealers by that act.

The same line of reasoning, we think, must necessarily lead us to the conclusion, under the facts of this case, that the Union League is not “engaged in carrying on a restaurant, eating house, café, or quick lunch business” within the meaning of ■the Act of April 25, 1907, P. L. 117, nor is it “the keeper of a billiard or pool room for purposes of profit” within the meaning of the Act of May 25, 1907, P. L. 244. A study of these various acts and of the history of such legislation would enable us, we think, to discover a. number of reasons supporting such a conclusion, but no good purpose would be subserved by a lengthy discussion of the question. Indeed, the opinion of the learned court below is so complete and convincing along these lines that it is doubtful if anything of value has been added to it.

Decree affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Zimmerman v. Ohio German Fire Insurance Company, Appellant.
    July 14, 1909:

      Insurance — Fire insurance — Principal and agent — Agent for both parties — Affidavit of defense.

    In an action under a policy of fire insurance, an affidavit of defense is insufficient to prevent judgment which avers that the policy was placed by an agent of the defendant, who was also an agent of the plaintiff, but fails to aver that such party was agent of both parties at the time the insurance was placed, or that he had any interest whatever in the property insured.
    Argued Oct. 27, 1908.
    Appeal, No. 23, Oct. T., 1908, by defendant, from order of C. P. Northumberland Co., Dec. T., 1907, No. 15, making absolute rule for judgment for want of a sufficient affidavit of defense in case of E. B. Zimmerman and Margaret J. Zimmerman,, trading as The Shamokin Wagon Works, v. The Ohio German Fire Insurance Company of Toledo, Ohio.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Affirmed.
    Assumpsit on a policy of fire insurance.
    Rule for judgment for want of a sufficient affidavit of defense.
    The facts are stated in the opinion of the Superior Court.

      Error assigned was in making absolute rule for judgment for want of a sufficient affidavit of defense.

      Arthur S. Arnold, with him C. F. Shipman, for appellant.

      W. H. Unger, with him W. L. Snyder, for appellee.
   Opinion by

Head, J.,

The policy of insurance in this case, like that in Shamokin Manufacturing Company against the same defendant, in which an opinion has been this day filed, post, p. 000, was countersigned and delivered by A. G. Marr, the local agent of the defendant, at Shamokin, Pa. The argument, in which the learned counsel for appellant urges us to reverse this judgment, rests upon the following averment in the affidavit of defense: “The defendant company has received two letters, one from the said A. G. Marr, and one from the assured, copies of which are hereto attached and made part hereof and marked exhibits ' C ’ and ‘ D ’ respectively, and in consequence of the contents of the said letters, deponent believes and therefore avers, and expects to be able to prove upon the trial of the cause, that the said A. G. Marr, at the time of the issuance of the last mentioned policy, was acting as the agent of the Shamokin Wagon Works (plaintiffs) as well as the agent of the defendant company.”

Upon the strength of this averment the defendant contends that this case is embraced in the same category and presents the same controlling question just disposed of in the former case.

As we view the record, this case does not exhibit the important fact by reason of which the controlling principle in the former case was successfully invoked. It is manifest this affidavit avers no interest of any kind of its own agent in the business of the plaintiff or in the property insured by the policy. If there was an unqualified averment that at the time of the issue of the policy, the plaintiffs in obtaining that policy were represented by Marr, the local agent of the defendant, the appellants’ contention would have some foundation upon which to rest. The averment, however, is not made upon knowledge other than that disclosed by the two letters made part of the affidavit, and therefore the fact really averred is the fact disclosed by those letters and nothing more. Turning then to the letters, in order to learn the real significance of the averment, we find that exhibit “ C ” is a letter written by Marr, the insurance agent, to his own company some time after the fire. To this letter the plaintiffs were not parties, and it discloses no foundation for the conclusion that Marr, at the time the policy issued, was acting in any capacity for the assured.

Exhibit “ D ” is a letter from one of the plaintiffs to the defendant company, written several months after the date of the fire, demanding payment of the insurance money. In that letter the following paragraph appears: “ In the first place when our loss was adjusted, we were willing that you should deduct the usual discount for cash settlement, and all the other companies promptly mailed us remittances, but our representative here, Mr. A. G. Marr, said that such was not the understanding, and further that you had the privilege of waiting sixty days, etc.”

Upon the argument of the motion for judgment for want of a sufficient affidavit of defense the learned court below disposed of this letter and the expression therein quoted as follows: “The letter to the insurance company marked exhibit ‘ D,’ dated July 21,1907, and signed E. B. Zimmerman, manager, contains this expression: ‘but our representative here, Mr. A. G. Marr, said,’ etc. This is manifestly a misprint. The word ‘our’ should be ‘ your.’ ” It is quite probable it would turn out upon an investigation that as a matter of fact the conclusion reached by the learned court was correct. In the absence of any evidence at all on the subject, however, the act of the learned court in determining as a matter of law that the word “our” meant “ your, ” and for this reason entering judgment for the plaintiff, might be questionable. Taking the letter, however, as it is written, and giving to the defendant the benefit of the expression contained in it, we are unable to see that it furnished any sufficient foundation for the conclusion that, at the time the policy issued, the local agent of the insurance company occupied any such relation to the assured as would avoid the policy. As already stated, it does not appear anywhere that the insurance agent had any interest whatever in the property that was insured. The letter was written long after the fire. The parties insured seemed to be acting for themselves, and conducting their own business with the insurance company. There is nothing in the letter to indicate that at the time the policy was issued, nearly a year before the date of the letter, the insurance agent had any relations whatever with the plaintiff; and it is equally barren of evidence that even at the date of its writing, long after the fire, the alleged agency of Marr as a representative of the plaintiffs had anything to do with their insurance in the defendant company. For aught that appears, either in the letter or elsewhere, Marr’s agency for the plaintiff, if it existed at all, might have been confined to the sale of wagons for them or the purchase of materials out of which they were wrought.

Measuring then the strength of the averment in the affidavit by the foundation on which it rests, to wit: the expression contained in the letter, we are unable to see that it sets forth anything sufficient to prevent the entry of judgment. If deficient in this respect, then it would not appear that the plaintiffs were in any way affected by any misstatement which the agent may have made in his daily report to the insurance company, and the other matters set up in the affidavit would be without any effect as to them in the present controversy. We are of opinion, therefore, that the affidavit filed in this case disclosed no meritorious defense, and the assignments of error must be accordingly overruled.

Judgment affirmed.


text:
    Commonwealth, Appellant, v. Kephart.

      Justice of the peace — Appeals—Summary conviction — Acts of April 17, 1876, P. L. 29, and June 1, 1907, P. L. 386 — Constitutional law — Title of act,

    1. Under the Acts of April 17, 1876, P. L. 29, and June 1,1907, P. L. 386, a defendant against whom a justice of the peace has imposed a fine in a summary conviction proceeding under the Act of June 1,1907, P. L. 386, is entitled to take an appeal, if such is allowed by a judge of the court of common pleas.
    2. The Act of April 17, 1876, P. L. 29, is sufficient in title, and is constitutional.
    Argued Oct. 30, 1908.
    Appeal, No. 173, Oct. T., 1908, by plaintiff, from judgment of C. P. Blair Co., Oct. T., 1907, No. 179, reversing judgment of justice of the peace in case of Commonwealth v. C. M. Kephart.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Affirmed.

      Appeal from summary conviction. Before Bell, P. J.
    The opinion of the Superior Court states the case.

      Error assigned was judgment reversing judgment of the justice of the peace.

      J. D. Hicks, with him A. H. Woodward, for appellant. —
    The constitutional provision providing for appeals, carries the clear and well-defined distinctions existing between summary convictions and suits for penalties. The constitutionality of the act of assembly of 1876 so far as we have been able to find had not been passed upon by the appellate courts. The act has been decided unconstitutional by the common pleas: Mauch Chunk Borough v. Betzler, 19 Pa. C. C. Rep. 27; 6 Pa. Dist. Rep. 330; Lehighton Borough v. Roth, 21 Pa. C. C. Rep. 63; 7 Pa. Dist. Rep. 426.
    Both the constitution and the act of 1876, provide for an appeal upon allowance by the court for cause shown. The cause for which an appeal should be allowed is stated in Thompson v. Preston, 5 Pa. Superior Ct. 154; Com. v. Hendley, 7 Pa. Superior Ct. 356; McGuire v. Shenandoah, 109 Pa. 613; Com. v. Eichenberg, 140 Pa. 158; Com. v. Menjou, 174 Pa. 25.
    We contend that an appeal should never be allowed unless after notice and hearing; that the petition for the appeal ought to be accompanied by a copy of the record of the magistrate, and above all that the petition for an appeal ought to allege or show upon its face some actual and sufficient reason for the appeal.

      George H. Calvert, with him Samuel M. Clement, Jr., W. Frank Vaugh and Donald Thompson, for appellee. —
    The defendant had a right to appeal: Com. v. Luckey, 31 Pa. Superior Ct. 441; New Brighton Borough v. Biddell, 14 Pa. Superior Ct. 207; Smith Woolen Machinery Co. v. Browne, 206 Pa. 543; McGuire v. Shenandoah, 109 Pa. 613; Com. v. Eichenberg, 140 Pa. 158; Com. v. McCann, 174 Pa. 19; Com. v. Menjou, 174 Pa. 25; Thompson v. Preston, 5 Pa. Superior Ct. 154; Com. v. Hendley, 7 Pa. Superior Ct. 356; Com. v. Ralston, 29 Pa. Superior Ct. 426; Com. v. Yocum, 29 Pa. Superior. Ct. 428; Wilkes-Barre v. Stewart, 16 Pa. Superior Ct. 347.
    July 14, 1909:
    The Act of 1876, P. L. 29, is constitutional: Com. v. Hospital, 198 Pa. 270; Com. v. Davison, 11 Pa. Superior Ct. 130.
    While we do not find that the validity of the act has ever been directly passed upon, the granting of an appeal under its terms has been approved by this court in a number of cases, which is an implied approval of its validity: Gregg’s License, 36 Pa. Superior Ct. 633; Com. v. Arow, 32 Pa. Superior Ct. 1; Com. v. Kevin, 202 Pa. 23.
    The allowance of the appeal by the court below was proper and was not an abuse of judicial discretion: Thompson v. Preston, 5 Pa. Superior Ct. 154; Com. v. Hendley, 7 Pa. Superior Ct. 356; Com. v. Johnson, 16 W. N. C. 349.
   Opinion by

Head, J.,

This case was argued with Com. v. Dougherty, ante, p. 338. The main questions involved in both cases were identical. It is unnecessary, therefore, to repeat here what was stated at some length in the opinion in the former case. For the reasons there given, we must affirm the judgment entered by the learned court below unless we are impelled to a different conclusion by a consideration of the single question raised in this case which did not appear in the former one.

In this case the commonwealth asserts that there is no law which allows an appeal to a defendant upon whom a magistrate has imposed the fine provided for in the ninth section of the Act of June 1, 1907, P. L. 386. This conclusion is urged upon us notwithstanding the fact that the appeal was specially allowed by the court of common pleas of Blair county upon an application therefor by the defendant.

The constitution of 1874, art. V, sec. 14, declares: “In all cases of summary conviction in this commonwealth, or of judgment in suit for a penalty before a magistrate, or court not of record, either party may appeal to such court of record as may be prescribed by law, upon allowance of the appellate court, or judge thereof, upon cause shown.” Whilst it is agreed that this provision of the constitution was not self-executing, it ought to be clear that any act of the legislature, purporting to allow the appeal thus contemplated in the fundamental law, should receive a liberal construction.

The ninth section of the act of 1907 already referred to, which imposes the penalty the commonwealth here seeks to enforce, contains the following provision: “And no appeal shall be allowed from any judgment rendered in such case except upon special allowance of the court of common pleas,” etc. If the legislature did not intend that a defendant, upon whom the fine mentioned in the earlier part of that section had been imposed, should have the right of appeal to the court of common pleas after an allowance had been obtained, it is difficult to see why the language quoted was used. We may concede that the right to have an appeal upon allowance could have been declared in more direct and positive language. But it would be, we think, a harsh and narrow construction of the words employed, to hold that no appeal was contemplated by the legislature, and that the judgment of the subordinate magistrate imposing the fine was final and conclusive.

The appellee in this case further contends that even if there could be any doubt that the right of appeal is conferred by the act of 1907, such right exists under the Act of April 17, 1876, P. L. 29. It cannot be doubted that this act was passed for the purpose of carrying into effect the constitutional provision already quoted. The commonwealth concedes that this act, if valid, would confer upon the defendant in this case the right to an appeal upon allowance by the court of common pleas. It urges upon us, however, the proposition that the act of 1876, in so far at least as it undertakes to confer the right of appeal from the judgment of a magistrate in a suit for a penalty, is unconstitutional, because the title of the act is not sufficiently broad to warrant such an enactment.

This act has remained upon our statute books for considerably more than a quarter of a century. In a multitude of cases it has been reviewed by the Supreme Court and this court, and appeals in actions like the present one have been heard and determined, and neither the courts nor the profession have heretofore seemed to regard as questionable the right of a defendant in such cases to have his appeal. It will be sufficient to mention McGuire v. Shenandoah, 109 Pa. 613; Com. v. Eichenberg, 140 Pa. 158; Com. v. McCann, 174 Pa. 19; Com. v. Menjou, 174 Pa. 25; Thompson v. Preston, 5 Pa. Superior Ct. 154.

In Com. v. McCann, 174 Pa. 19, Mr. Justice Williams said: “The act of 1876 which was passed to carry this provision into effect prescribed the court of quarter sessions as the court of record into which all appeals from summary convictions should be taken, after an allowance; and the court of common pleas as the court of record into which all appeals from the judgment of a magistrate or court not of record in a suit for a penalty should be taken ‘upon allowance of said court or any judge thereof upon cause shown. . . .' The language employed in this statute, like that of the constitutional provision to which it relates, is general. It embraces all appeals from judgments for penalties or of summary conviction rendered by magistrates or courts not of record in this commonwealth.”

In Com. v. Menjou, supra, the same learned justice speaking for the court said: “There can be no question of the power of the court of common pleas or any judge thereof to allow an appeal from a judgment rendered by a magistrate, or court not of record, for a penalty.”

We are unable, therefore, in the light of the settled practice declared by our highest courts, and acquiesced in by the profession for such a long period of time, to adopt the conclusion urged upon us by the learned counsel for the commonwealth. We hold, therefore, that the learned court of common pleas was invested with the power to allow an appeal to the defendant in this case, and for the reasons heretofore given in Com. v. Dougherty, ante, p. 338, we are satisfied that the appeal was properly disposed of in the reversal of the judgment of the magistrate. In thus affirming the judgment of the learned court below, we are not to be understood as agreeing with his conclusion that the entire act of 1907 must be stricken down as an unconstitutional piece of legislation. On the contrary, we adhere to the conclusion heretofore announced that only the fifth subsection or paragraph of sec. 5 of that act is void.

Judgment affirmed.


text:
    Allentown v. Lehigh Valley Transit Company, Appellant.
    July 14, 1909:

      Street railways — Municipal consent — Repair of streets.

    Where a city by various ordinances granting consent to different street railway companies to use streets, provides that in case a single track is laid, the company must, both as to original paving or subsequent repair, pave and repave the space between the tracks, and an additional width of two feet outside of each rail, while in case of double tracks the company must originally pave the space between the two tracks, between the rails of each track and two feet outside of the rails, and keep in repair the whole street from curb to curb, a company which changes its line from a double track to a single track will not be obliged thereafter to repave from curb to curb, where the ordinance authorizing the change provides that the single track substituted for the double track shall be “subject to all of the provisions of existing ordinances in respect to single track railways on the streets of this city.”
    Argued Dec. 9, 1908.
    Appeal, No. 54, Oct. T., 1908, by defendant, from judgment of C. P. Lehigh Co., Sept. T., 1907, No. 100, on case stated in suit of City of Allentown v. The Le-high Valley Transit Company.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Reversed.
    Case stated to determine liability of defendant to keep a street in repair. Before Heydt, P. J., specially presiding.
    The opinion of the Superior Court states the case.

      Error assigned was in entering judgment for plaintiff on case stated.

      Arthur G. Dewalt, with him R. E. Wright, for appellant.

      Leo Wise, city solicitor, for appellee.
   Opinion by

Head, J.,

From an examination of the case stated and the several ordinances made part thereof, it appears that prior to the incorporation of the defendant, a number of independent street railway companies were operating cars in the city of Allentown. Each one of these companies secured by ordinance the necessary municipal consent to enable it to operate its cars along the streets it occupied.

A brief examination of these ordinances, with reference to the dates of their enactment, will reveal, we think, the development on the part of the city of a uniform and continuous policy regulating the operation of cars along the streets and defining the conditions on which applicants for such franchises could secure the necessary municipal consent.

The earliest, in time, of these ordinances was approved October 5, 1889. The portions of it which have been printed in the paper-book indicate that the city therein granted to the Allentown Passenger Railway Company, the right to construct a single-line track on certain streets and operate its cars thereon. In accepting the ordinance, the company was required to agree that it would keep the portion of the street occupied by its track, and an additional width of two feet outside of each rail, in the same condition, with relation to paving or macadamizing, as the city would keep the remaining portion of the street.

By an ordinance approved March 13, 1891, some additional franchises were granted to the same company, and again the city imposed upon the company the like obligation as to the new streets upon which its track might be laid.

On March 25, 1893, an ordinance was adopted granting to the Lehigh Valley Traction Company, the right to operate a double-track railway within the city limits along certain streets therein specified. This ordinance, apparently the first authorizing a double line of tracks upon any city street, required the company, in case the city should decide to pave any street upon which its tracks were laid, to pay for the cost of said paving on that portion of the street “lying between the tracks, between the rails of each track, and for two feet outside.” The third section of the ordinance dealing with the question referred to, further provided: “The said Traction Company shall keep in repair Sixth street from Union to Tilghman street from curb to curb.” The company therein named accepted the provisions of the said ordinance and constructed a double-track line on Sixth street between , the cross streets named, and from that time down until the making of the change hereinafter referred to, continued to perform the obligation imposed upon it by the ordinance.

On May 6, 1893, another ordinance was approved, granting to the Allentown Passenger Railway Company and to the Allentown & Bethlehem Rapid Transit Company, the right to extend their lines over certain city streets therein specified. It provided that whenever the city would undertake to permanently improve any of the streets occupied under this ordinance, the companies would bear the expense of so improving that portion of the street “lying between the tracks, between the rails of each track, and for two feet outside of each rail.” And it further provided that such companies should not only bear this proportion of the cost of the original improvement, but in case double tracks were laid on any street, as to the repairs of said street, the obligation of the companies should be as expressed in the following language: “Whenever double tracks are laid on said streets, the said companies shall keep such streets in repair from curb to curb.”

Whilst, therefore, the city was dealing with a number of independent and perhaps rival companies, it evidently aimed at placing each company on the same footing. Where but a single track was laid upon a street, the obligation of the company owning and operating such line of track was the same. In such case the obligation, whether relating to original paving or to keeping the street in repair, was confined to the space between the tracks and an additional width of two feet outside of each rail. Where a double line of track was constructed, the company was required to originally pave or improve that portion of the street between the two tracks and between the rails of each track, and an additional width of two feet outside of said rails. As the construction of a double line of track on a city street has a natural tendency to drive a considerable portion of the traffic to the sides of the street, the city required of the companies availing themselves of that privilege that they should keep the entire street from curb to curb in repair.

The municipal legislation on this subject seems to have remained in the condition already described without change from 1893 to 1899. During that period there was little room for any contention as to the duties owed to the city by a railway company operating a single line of track along a city street. If during that period a new company had made application to the city for leave to construct and operate a single line of track along certain streets theretofore unoccupied, and the municipality had granted the franchise “subject to all of the provisions of existing ordinances in respect to single-track railways on streets of this city,” we think the obligations of such a company, after accepting the grant, would have been clearly defined by the ordinances already referred to.

On May 22,1899, an ordinance was approved authorizing the Lehigh Valley Traction Company, etc., “to abandon, take up and remove one of their tracks on North Sixth street, Allentown, Pa., on the following conditions, to wit, first, that the remaining track be removed to the center of the street and be there maintained subject to all of the provisions of existing ordinances in respect to single-track railways on streets of this city.” In pursuance of this ordinance one of the tracks of the company named was taken up, the other was removed to the center of the street, and thereafter the railway company in fact owned and operated but a single line of track on Sixth street instead of the double line of track which had been originally authorized by the ordinance of March 25, 1893.

The city now insists that although the railway company operates but a single line of track on Sixth street, as it does on a number of other streets of the city, it must still continue to keep in repair between Union and Tilghman streets the whole of Sixth street from curb to curb. The defendant, which has succeeded to the rights and assumed the obligations of all of the independent companies heretofore mentioned, contends that by the terms of the ordinance of 1899 just quoted, its obligations on Sixth street have become precisely the same as on any other street on which it operates but a single line of track. As we view the case, this claim rests upon substantial grounds.

The city had the right to classify all companies operating upon its streets, and to declare that those operating single-track railways should pay one consideration for the privilege, those operating double-track another. Had it seen fit to provide that single-track lines should pay an annual money compensation and so declared by ordinance, whilst double-track lines should render their return to the city by paving and keeping in repair the streets occupied, its right to do so would be unquestioned. If under such conditions a company operating a double line should, with the consent of the city, give up a portion of the street theretofore lawfully occupied, and thereafter operate but a single line; and if in giving its consent the city should impose the condition that thereafter such single-line track should be “maintained subject to all of the provisions of existing ordinances in respect to single-track railways on streets of this city,” how could such company defend against the claim of the city that it must thereafter pay the annual money compensation exacted from companies operating single lines?

It seems to us that such a construction of the several ordinances leads to results fair and equitable as between the city and the defendant, and if so, ought to prevail where the meaning of the language used in the ordinances is in any way obscure. We can see no reason why a burden should be imposed on the defendant as a consideration for operating a single line of railway along Sixth street that is not imposed upon it in its operation of like lines upon other streets. Of course, if it were clear that the company had contractually accepted such a burden, it ought not to be heard to complain. Looking, however, broadly at the entire field of municipal legislation on the subject of street railways in the city of Allentown, and finding upon such view that the city has heretofore uniformly measured the obligations of a company operating a double-track line by one .standard, and those of a company operating a single-track line by another, we are led to the conclusion that when the city declared that after the change was made in Sixth street, the remaining single track must be “maintained subject to all of the provisions of existing ordinances in respect to single-track railways on streets of this city,” it intended that the original obligation assumed by the company when two tracks were authorized and constructed, should be so modified that thereafter its responsibilities 'should be measured by those ordinances adopted for the purpose of regulating single-track lines on the streets of the city.

Judgment reversed.


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    Scranton v. Engel, Appellant.

      Municipalities — Ordinances—Pawnbrokers—License—Act of March 7, 1901, P. L. 20.
    1. An ordinance of a city of the second class imposing a penalty of $200 for carrying on the business of a pawnbroker without a license, may be amended so as to reduce the penalty to $100, and thus make it conform to the Act of March 7,1901, P. L. 20. A conviction and sentence under the amended ordinance will be sustained.
    2. A conviction for violating such an ordinance will not be set aside on the ground that there was no evidence of the passage of such ordinance, where it appears that a copy of the ordinance was attached to the magistrate's record, and it was agreed that the case should be tried “on the evidence sent up by the magistrate as a part of his transcript.”
    3. An ordinance providing that a fine shall be paid to the city, imports that it shall be paid to the city treasury, and is not open to the objection that it does not disclose to whom the fine shall be paid.
    Argued March 4, 1909.
    Appeal, No. 65, March T., 1909, by defendant, from order of Q. S. Lackawanna Co., Oct. T., 1908, No. 769, affirming judgment of justice of the peace in case of City of Scranton v. Charles B. Engel.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Affirmed.
    Appeal from judgment of justice of the peace on a summary conviction. '
    The opinion of the Superior Court states the case.

      Error assigned was in affirming the judgment.

      John F. Scragg, for appellant.

      July 14, 1909:

      H. R. Van Deusen, assistant city solicitor, with him David J. Davis, city solicitor, for appellee.
   Opinion bt

Head, J.,

An information was made before a police magistrate of the city of Scranton charging that the defendant was engaged in carrying on the business of a pawnbroker in that city, without having obtained the necessary license therefor from the department of public safety, contrary to the provisions of certain city ordinances. After hearing, he was adjudged guilty and fined the sum of 1100 and costs of suit, and, in default of payment thereof, sentenced to be committed to the county jail for thirty days. An appeal was duly allowed by the court of quarter sessions of the county, and the learned judge of that court, in an opinion filed, affirmed the judgment of the magistrate. From that judgment the defendant appeals.

The authority of the city of Scranton to enact the ordinances in question is conferred by the Act of assembly of March 7,1901, P. L. 20, entitled: “An Act for the government of cities of the second class.” Paragraph 22 of sec. 3 of that act expressly confers upon such cities the power to levy and collect license taxes or fees, to be fixed by ordinance, upon street railways, hack drivers, pawnbrokers, peddlers, “and all other matters and things of a like nature, and to regulate the collection of the same and to provide penalties for default therein.” Paragraph 43 of the same section confers the further authority “to make all such ordinances, by-laws, rules and regulations not inconsistent with the constitution and laws of this commonwealth, as may be expedient or necessary, in addition to the special powers in this section granted for the proper management, care and control of the city and its finances, and the maintenance of the peace, good government and welfare of the city .... and to enforce all ordinances by inflicting penalties upon inhabitants or other persons for the violation thereof, not exceeding 1100 for any one offense, recoverable with costs, together with judgment of imprisonment not exceeding thirty days, if the amount of said judgment and costs shall not be paid.”

By an ordinance enacted in 1903, known as “No. 47, File of Select Council,” the city, in execution of the power thus conferred, ordained “that no person shall use, exercise or carry on the business of pawnbroker within the city of Scranton without having first obtained a license from the department of public safety, as hereinafter provided.” After regulating in a number of sections the manner in which said business, after being properly licensed, should be conducted, the ordinance provided in sec. 12 that any person who should engage in such business without taking out such license should forfeit and pay to the city of Scranton for every such offense the sum of $200. It is conceded by the appellee that the penalty thus provided was in excess of the authority conferred upon the city by the legislature, and therefore could not be enforced.

By a subsequent ordinance enacted in 1906, known as “No. 34, File of Common Council,” sec. 12 of the preceding ordinance was so amended as to make the penalty for a violation of it a fine of $100, to be recovered by summary proceedings before a mayor or any police magistrate of the city of Scranton, and further providing that on default in the payment of any such fine, the person so convicted should be committed to the county jail for a period not exceeding thirty days.

We are of the opinion that the original ordinance, as thus amended, was a proper exercise of the power conferred upon the city by the provisions of the act already quoted. The objection that, because the city in the first-named ordinance fixed a penalty beyond the limits provided in the act of assembly, the entire ordinance became void, and therefore incapable of amendment, we do not think requires discussion. The illegal penalty could be well stricken from the municipal enactment, and all its remaining provisions could stand just as if the ordinance had been passed without any clause providing a penalty for its violation.

It is further objected that there is no evidence of the passage of said ordinance by city councils. The ordinances in full are attached to the magistrate’s record along with the oral testimony of the witnesses heard by him.- There is no allegation, by deposition or otherwise, that in fact the city never did enact such ordinances. In the opinion of the learned trial court affirming the judgment, we find the following: “It was agreed at bar that the cases should be heard on the evidence sent up by the magistrate as part of his transcript.” As the appellant does not deny the accuracy of this statement by the trial judge, of what occurred before him, we regard this as a conclusive answer to the objection last referred to.

The ordinance, as amended, provides that the person convicted of carrying on the business of a pawnbroker shall forfeit and pay to the city of Scranton the sum of $100 for every such offense. In this we think it sufficiently appears, reading the original ordinance and the amendment together, that the fine was to go to the city treasury, and therefore we must disregard the objection that the ordinance is invalid because it does not declare to whom the fine should be payable.

Finally, the judgment of the magistrate, imposing the costs upon the defendant in addition to the fine, was exactly in accordance with the act of assembly already quoted which declared that such fine, when imposed, should be recoverable with costs: and the same may be said with reference to the judgment of imprisonment not exceeding thirty days on default of payment of such fine.

Unless, therefore, we are prepared to hold that the act of assembly referred to was an unconstitutional and invalid attempt at legislation, we feel obliged to sustain the ordinance and to hold that the record of the defendant's conviction exhibits no substantial error. We do not understand that the learned counsel for the appellant seriously urges the proposition that the legislature in the act-quoted exceeded its constitutional powers. The assignments of error are therefore overruled.

Appeal dismissed at the costs of the appellant. The judgments of the magistrate and of the court below are affirmed, and the record is remitted with direction that the sentence be carried into execution.


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    Miller, Appellant, v. York Coated Paper Company.
    July 14, 1909:

      Corporations — Liability of directors — Debts—Acts of April 29, 1874, P. L. 73, February 9,1901, P. L. 3, and April 22,1905, P. L. 280.
    Since the passage of the Act of February 9,1901, P. L. 3, a corporation of any kind may lawfully incur or create an indebtedness in any amount “it shall deem necessary” without regard to the amount of its capital stock paid in. The arbitrary relation of a corporation’s indebtedness to its capital stock created by the act of April 29,1874, P. L. 73, has disappeared.
    2. The directors of a corporation are not liable for the debts of .a corporation contracted in the usual course of corporation business, whether such debts are or are not in the aggregate more than the actual capital stock paid in.
    Argued March 9, 1909.
    Appeal, No. 19, March T., 1909, by plaintiff, from decree of C. P. York Co., Aug. T., 1908, No. 3, In Equity, dismissing bill in equity in case of Frank P. Miller Paper Company v. The York Coated Paper Company and J. Herbert Thomas et al.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Affirmed.
    Bill in equity to enforce alleged liability of directors for corporate debts. Before Wanner, J. •
    The opinion of the Superior Court states the case.

      Error assigned was decree dismissing the bill.

      Henry C. Niles, with him Charles A. May and George E. Neff, for appellant.

      Allen C. Wiest, with him Frank M. Bortner, J. R. Straw-bridge and J. W. Gitt, Jr., for appellees.
   Opinion by

Head, J.,

To the plaintiff’s bill the defendants filed a general demurrer. The learned court below, holding that the demurrer should be sustained on either one of two distinct and independent grounds, dismissed the bill and the plaintiff appeals.

The individual defendants were the directors of the York Coated Paper Company, a manufacturing corporation, incorporated in 1904 under the general act of 1874 and its supplements. Clause 6 of sec. 39 of that act, relating to manufacturing companies, provides: “The whole amount of the debts which any such company at any time owes shall not exceed the amount of its capital stock, actually paid in, unless such debt be for unpaid purchase money for lands bought, which debt shall only be a lien upon and be collectible from said land; and in case of any excess the directors, under whose administration it occurs, shall be jointly and severally liable to the extent of such excess for all the debts of the company then existing,” etc.

During the incumbency in office of these defendants, the corporation, in the transaction of its ordinary business, incurred current debts which in the aggregate amounted to about $1,500 more than the actual capital stock paid in. The able counsel for appellant earnestly contends that this indebtedness, to the extent of the excess mentioned, was incurred in violation of the clause and section of the act of 1874 quoted, and as a consequence that the defendant directors have become jointly and severally liable to pay the same.

■ The trial judge dismissed the bill on the grounds (a) that current debts incurred in the transaction of ordinary routine business were not within the prohibition of the act of 1874; (b) even if they were, the Act of February 9, 1901, P. L. 3, removed any legislative barrier that may have theretofore existed, and thereafter a corporation, like an individual, could lawfully borrow such money as its credit would permit. If the second reason be sound, there is no necessity for a discussion of the questions involved in the first.

The first section of the act of 1901 provides: “That the capital stock or indebtedness, or both, of any corporation created by general or special law may, with the consent of the persons or bodies corporate, holding the larger amount in value of its stock, be increased to such an amount in the aggregate of each as it shall deem necessary to accomplish and carry on and enlarge the business and purposes of the corporation.” Standard lexicographers advise us that all of a man’s “debts” constitute his “indebtedness;” and conversely, that his “indebtedness” is the aggregate of his “debts collectively.”

Let us pass for the moment the evidence to be found in the body of the act which points to the interpretation by the legislature itself of the word “ indebtedness ” in the enacting section quoted. Following the simplest rule of construction and thus accepting the language of the statute as its words would be generally understood, there is but little room for any other conclusion than that a corporation of any kind may now lawfully incur or create an indebtedness in any amount “it shall deem necessary” without regard to the amount of its capital stock paid in. In other words, the arbitrary relation of a corporation's indebtedness to its capital stock created by the act of 1874 has disappeared.

Looking broadly at the act of 1901, especially in the light furnished by the amending Act of April 22, 1905, P. L. 280, we discover two prominent subjects of legislative consideration, (1) that a corporation, like a natural person, should have the right to lawfully borrow such sums of money as its credit in the financial world would justify; (2) that this right as to indebtedness, other than current or ordinary, could be exercised only after it had been ascertained that the judgment of the officers determining to create the indebtedness reflected the will of the corporation, viz.: the majority of the stock owners.

Were it not for the fourth section of the act, the qualification as to the character of the indebtedness just noted would not be necessary. That section, in our judgment, plainly discloses the legislative intent to make a distinction between current debts, necessarily contracted in the daily routine of the corporate life, and the more fixed and enduring obligations which are intended to be carried through a period of years. The indebtedness of the corporation is thus classified, however, only with relation to the manner in which it may be lawfully created.

As to limitation of the amount of the indebtedness, the distinction does not exist. In the first section the legislature, as we have observed, uses the word “ indebtedness,” and declares in the plainest terms that there shall be thereafter no legislative limitation of the amount thereof. That such term certainly in-eludes what we usually call the permanent or fixed debts of a corporation, and that these are now without limitation as to amount, no one will deny. It would seem to be wholly impracticable, if not absurd, to say that whilst the legislature removed the barrier as to this form of indebtedness, it still intended that it should exist as to current debts. But we need not rely upon this to aid our conclusion, for the lawmakers themselves have declared otherwise.

After providing generally the manner in which the assent of the stockholders to the creation of such indebtedness may be ascertained, the act declares in sec. 4: “Nothing in this act contained shall be construed as compelling resort to the process herein provided in the case of indebtedness contracted in the usual course of corporation business.” There would have been no necessity to excise from the operation of the act the current debts of the corporation, if these were not embraced within the term indebtedness ” as used in the first section. And further, the meaning of the lawmaker is demonstrated by the fact that the same word “ indebtedness ” is used in the fourth section where only the current debts are dealt with. The act then expressly repeals “All acts and parts of acts inconsistent with the provisions of this act.”

The line of reason indicated in the foregoing suggestions, and strongly presented in the opinion of the learned trial court, seems to us to necessarily lead to the conclusion that since the passage of the act of 1901 the law does not now provide for the personal liability of corporate directors under the circumstances recited in the bill, even if such liability existed down to the date of the enactment last referred to. For this reason the bill was rightfully dismissed.

Decree affirmed.


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    Nemcof v. Baltimore & Ohio Railroad Company, Appellant.
    July 14, 1909:

      Carriers — Common carriers — Loss of goods — Evidence—Case for jury.

    1. In an action against a common carrier to recover for the loss of a parcel of goods, the case is for the jury, where the consignee, the single witness for the plaintiff, testifies that the parcel was not delivered to him, and that he gave the notice of nonarrival within thirty days as required by the bill of lading, and the defendant offers no testimony to contradict these averments.
    2. Where one of several carriers is sued for nondelivery of goods, he cannot relieve himself from liability without showing that he had safely delivered the goods to another suitable and proper carrier for transportation to destination. The burden is upon him to show that the goods were not lost while in his possession.
    Argued Oct. 21,1908.
    Appeal, No. 124, Oct. T., 1908, by defendant, from judgment of C. P. No. 1, Phila. Co., Dec. T., 1906, No. 2,631, on verdict for plaintiff in case of Charles Nemcof v. The Baltimore & Ohio Railroad Company.
    Before Rice, P. J., Porter, Henderson Morrison, Orlady, Head and Beaver, JJ.
    Affirmed.
    Assumpsit to recover for the nondelivery of goods. Before Kinsey, J.
    The facts appear by the opinion of the Superior Court.
    Verdict and judgment for plaintiff for $458.50. Defendant appealed.

      Errors assigned were (1, 2) refusal of binding instructions for defendant, and (3) ruling on evidence, quoted in the opinion of the Superior Court.

      W. B. Linn, with him G. H. Stein, for appellant.

      Samuel J. Gottesfeld, for appellee.
   Opinion by

Head, J.,

The evidence in this case, which is brief and practically undisputed, is sufficient, we think, to have warranted the jury in finding the following facts: The plaintiff is a wholesale merchant, doing business in the city of Philadelphia. On or about November 4, 1905, he delivered to the defendant railroad company, two separate packages to be transported and delivered to Hooke & Co., of Cincinnati. A single receipt or bill of lading was given by the company for both packages, they being therein described as “one case and bale of woolens.” That in due course “the one case” arrived at destination, and was delivered to the consignees; that the remaining package, one “bale of woolens,” was .never received by the consignees, and that the value of it at the time of its delivery to the defendant was $458.50, the amount of the verdict. That the western terminus of the lines of the defendant company is Parkersburg, West Virginia, and from that point to Cincinnati, the transportation would have to be over another line. That the bill of lading, after describing the goods, contained the following provisions: “which said Company agrees to carry to said destination, if on its road. Otherwise, to deliver to another carrier on the route to said destination. Claims for loss or damage must be made in writing to the agent at point of delivery promptly after arrival of the property, and if delayed for more than thirty days after the delivery of the property, or after due time for the delivery thereof, no carrier hereafter shall be liable in any event.” That the plaintiff, being advised by the consignees of the nonarrival of the bale of woolens, went to the office or pier of the defendant company where the goods had been shipped, and there gave notice in writing that they had not arrived at destination. The consignees had been in business in Cincinnati for some time, and had been accustomed to receive shipments of goods from the plaintiff, and other merchants in the east, which were transported by the defendant company. That shortly after the arrival of the one package, they went to the railroad office in the city of Cincinnati, where they were accustomed to receive goods transported from the east over the defendant company’s lines, and there gave written notice that the bale of woolens had not arrived. The learned court below instructed the jury that, if they believed the evidence which tended to establish these facts, the plaintiff had made out a case and would be entitled to recover. The court at the same time refused the point presented by defendant's counsel praying for binding instructions, as also a motion for judgment non obstante veredicto afterwards filed, and directed judgment to be entered on the verdict.

The learned counsel for the appellant contends, first, there was not sufficient evidence to submit to the jury that the bale of woolen goods had not reached its destination and been delivered to the consignees. To this we cannot assent. It is true the testimony on this subject came but from a single witness, one of the consignees. His testimony shows that he was not skilled in the use of the English language. Whilst on the witness stand he was asked the following question: “Q. Tell us whether or not there was delivered to you, Mr. Weidner, a bale of goods shipped by Mr. Nemcof over the Baltimore & Ohio Railroad at the same- time he shipped a case of goods? A. We got the case of goods, but the bale was missing.'' There was no cross-examination on this branch of the case, and no contradictory evidence whatever offered by the defendant. We feel obliged to conclude that, under these circumstances, it fairly became a question of fact for the jury to determine whether or not the bale of woolen goods was ever delivered, and the court could not have properly withdrawn the case from their consideration.

The appellant next contends that there was not sufficient evidence to submit to the jury that the written notice of the loss of the goods, provided for in the bill of lading, was given to the agent at the point of delivery within thirty days after the due time for the delivery of the package. Again, we think the evidence, when examined, will not support this claim. The witness Weidner testifies, “Mr. Hooke [his partner] went with me to the railroad to give notice. First he told me at the store that the bale was missing and that we would go to the B. & 0. for the bale. . . . Q. Where? A. Fourth and Central avenue, Cincinnati. Q. Approximately, when was it? A. A couple of days after we got the goods. Q. What kind of notice did you give them? A. It was written. Q. Did you go to the Baltimore & Ohio Southwestern Railroad Company that day with Mr. Hooke? A. I went to the Baltimore & Ohio. I don’t know anything about the Southwestern, but I know it was the Baltimore & Ohio. ... I was sure it was the Baltimore & Ohio, because I was usually getting my goods from Mr. Nemcof, or anybody else from New York, from the same people.” Part of the above quoted testimony was given in chief, and part on cross-examination. Taking it altogether, we think it amounts to much more than a scintilla, and was sufficient to carry the case to the jury. No complaint was ever made by the railroad company, before the time of trial, of the insufficiency in any respect of the notice so given, nor was a single witness offered on the part of the defendant to deny that notice had been promptly given, both at the point of shipment and at the point of destination, of the nonarrival of the bale of woolen goods.

In Eckert v. Pennsylvania Railroad Co., 211 Pa. 267, Mr. Justice Mestrezat, speaking of such a provision in a bill of lading, says: "The purpose of the provision, therefore, and the reason for its enforcement by the court, is to enable the carrier to make a prompt investigation of the merits of the claim and thereby protect itself against imposition by the shipper. Being for the protection of the carrier, the latter may waive its right to enforce the provision. Here, as disclosed by the correspondence between the parties, the defendant company’s agents were in possession of all the facts relative to the loss and the cause of it within five days of the delivery of the stock. This fact and the subsequent conduct of the defendant company were sufficient to go to the jury on the question of its waiver of the right to insist upon a formal written claim of the plaintiffs’ loss; and hence, the court could not, as requested by the defendant, direct a verdict for the company on the ground that there had been no delivery of such a claim.”

The conduct of the company referred to in' the language above quoted consisted in the fact that “it was not until the trial of the cause in November, 1903, nearly one year and a half after the plaintiff’s stock had been injured, that the company gave any intimation that it would resist the plaintiff’s demand for damages because a verified written claim of loss had not been delivered within five days from the time the horses were removed from the car at their destination.” In the face of the undisputed evidence that notice of the nonarrival of the bale had been promptly given at each end of the line, and the subsequent conduct of the company, it might not be too much to say, under the authority cited, that the case should have gone to the jury on the question whether the company had not waived its right to insist on the notice provided for in the bill of lading, but on this question we need not give any opinion because we think it reasonably clear, from the testimony we have quoted, that the jury could fairly find that the consignees had given, within the time prescribed, the notice required in the written or printed contract of carriage.

Finally, the appellant complains that the learned trial court rejected the offer of the defendant to prove by its single witness as follows: “ I propose to prove that the destination of the goods specified in this bill of lading, to wit: Cincinnati, is not on the line of the defendant company; that it is on the line of another railroad company known as the Baltimore & Ohio Southwestern Railway Co.; that the junction for Cincinnati deliveries of the two lines is Parkersburg, West Virginia.” Even if the facts stated in the offer be all admitted, they in no wise relieve the defendant from its liability, because they do not tend to prove, nor is there any offer to follow them by proof, that the defendant company carried the goods safely to its own terminal, Parkersburg, and there delivered them to the other carrier for transportation to the point of destination. Besides, it was already in evidence, from the mouth of the same witness, that Parkersburg, West Virginia, was the western terminus of its line. The court was not obliged to permit the witness to duplicate his testimony as to that fact, and the offer contained no other except the name of the connecting line between that terminus and Cincinnati. This was of no importance unless accompanied with or followed by an offer to p'rove that the defendant had carried the goods to Parkersburg and there delivered them to the other line. Upon this vital point the defendant was entirely silent. As to the obligation of the defendant company under its contract of carriage, there cannot be any doubt. In Eckert v. Railroad Company, 211 Pa. 267, the court declared: “It was the duty of the defendant company not only to carry the plaintiff’s horses to the terminus of its road at Jersey City, but also to deliver them at that point to the connecting carrier in a car properly constructed and suitable for the purpose of transporting them to their final destination.” In American Express Company v. Second National Bank, 69 Pa. 394, the court declares: “If property is received by a common carrier, and he fails to deliver it safely at its place of destination, the burden is on him to prove that it was not lost or injured while in his custody.”

The plaintiff then having shown the shipment of the goods, their nondelivery at destination, and notice of the loss in the manner required by the bill of lading, the burden was on the defendant to show that it had discharged its contract of carriage, and as already stated, to do this the burden was upon it to prove, first, that it had safely transported the goods over its own lines as far as their proper routing would carry them, and then that it had safely delivered them to another suitable and proper carrier for transportation to destination. As there was a total failure of proof in either of these respects by the defendant, it seems to us that the plaintiff exhibited a meritorious case, and that the verdict is fairly supported by the evidence adduced at the trial. The assignments of error must, therefore, be overruled.

Judgment affirmed.


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    Gillam v. Hogue, Appellant.

      Negligence — Damages—Fright of horse — Deterioration in value — Automobiles.

    The rule that there can be no recovery of damages from fright or other merely mental suffering unconnected with physical injury, does not apply to the deterioration in value of a horse, which has been frightened by the negligent operation of an automobile and rendered unfit thereby to be safely driven on the public roads.

      July 14, 1909:
    Argued Nov. 17, 1908.
    Appeal, No. 70, Oct. T„ 1908, by defendant, from judgment of C. P. Bucks Co., April T., 1907, No. 7, on verdict-for plaintiff in case of Jonathan W. Gillam v.. Robert M. Hogue.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Affirmed.
    Trespass to recover damages for injuries to a horse. Before ■ Stout, P. J.
    The facts are stated in the opinion of the Superior Court. •
    Verdict and judgment for plaintiff for $245. Defendant appealed.

      Error assigned was in refusing binding instructions for de- • fendant.

      Wm. C. Ryan, with him Calvin S. Boyer, for appellant.

      J. Hibbs Buchman, with him Henry A. James, for appellee.
   Opinion by

Head, J.,

For the purposes of this appeal the verdict of the jury has established that the fright and runaway of the plaintiff’s horse were caused by the negligent manner in which the defendant .operated his automobile along,the public highway. The consequent injuries to the plaintiff’s buggy and harness were comparatively trifling and, as to these, the appellant makes no further contention. The chief claim advanced by the plaintiff, however, was that, before the occurrence complained of, he was the owner of a valuable horse. This value, as he alleges, consisted largely in the facts that the animal was quiet, gentle and fearless of the sights and sounds incident to modern road travel, including those caused by the ordinary operation of motor vehicles. As a result of the fright suffered by the horse, under the unusual conditions brought about by the defendant, it could no longer be safely driven upon the public roads and, ás a consequence, its market value had depreciated to the extent shown by the testimony. The learned trial court permitted the jury to consider this element of damages. In so doing, the appellant alleges the court fell into error, and upon this ground alone this appeal rests.

The appellant contends the facts, presented by the record' before us, invite the application of the rule of law laid down in Fox v. Borkey, 126 Pa. 164; Ewing v. Ry. Co., 147 Pa. 40; Linn v. Duquesne Borough, 204 Pa. 551; and Huston v. Freemansburg Boro., 212 Pa. 548. This rule, now so thoroughly established, is well and concisely stated in the opinion in the last-cited case, thus: “But we have had the case reargued before the full court, to settle finally the main question that there can be no recovery of damages from fright or other merely mental suffering unconnected with physical injury.”

In no case, that has come to our knowledge, have our courts yet declared that this rule should be applied to a chattel, a thing having a recognized commercial value, the bases of which are as commonly known and as generally accepted as the fact of the value itself. In determining whether or not an established rule should be applied to a given ease, an inquiry into the reason of the rule should be helpful because cessante ratione legis eessat et ipsa lex. In Linn v. Duquesne Borough, 204 Pa. 551, the reason of the rule is thus stated by Mr. Justice Fell: “But as the basis of an independent action, mental suffering presents no features by which a court or jury can determine either its existence or extent, and claims founded on it have generally been regarded as too uncertain and speculative for consideration.”

The soundness as well as the necessity of the rule, in the case of human beings, is thus made apparent because the law makes no futile efforts to deal with things which, by their nature, are beyond the grasp of the instrumentalities through which it operates.

In a case like the present one, we are not called upon to deal, subjectively, with the effects of a fright on the animal fright; ened; but merely to ascertain, as a fact, whether or not, by rea^son of the existence of certain conditions, the market value of a chattel — the daily subject of barter and sale among men — has been lessened.

If it be a fact, born of the common observation of men in their everyday use of horses, that such an animal, when once subjected to a fright so severe as to cause it to run away, loses a portion of the commercial value it previously possessed, such fact may be proven by evidence just as convincing and satisfactory, as that which establishes any other fact, the existence of which becomes the object of judicial investigation.

In 6 Thompson on Negligence (2d ed.), sec. 7247, the author states: “The owner of an animal may recover for an injury to his horse not physical in its nature — as where it was caused to run away by the injury — in which case the court held that the owner was entitled to recover for the vicious habit thus created; ‘for common experience and common sense,’ said the court, ‘teach mankind that the market value of a horse is greatly lessened by its habit of taking fright at any object and running away. ’ It is therefore competent to show the value of the horse before and soon after the accident based on a change in his disposition.” (Citing in support Oleson v. Brown, 41 Wis. 413; Montgomery St. Ry. Co. v. Hastings, 138 Ala. 432.)

The liability of a horse to take fright at a motor vehicle, even ' when carefully driven on the highway, is a matter of such' common knowledge that our legislature has sought to minimize the probable results by regulating the manner in which those using such vehicles must operate' them. The defendant would not therefore be in a position to contend that the fright and runaway 'of the plaintiff’s horse were unforeseen or improbable consequences of his negligent conduct. This being true, he practically concedes that he must respond in damages for the partial destruction of the buggy and harness because, obviously, these results naturally followed the negligent act.

His sole contention is that although the plaintiff suffered an additional loss in .the market value of his horse, a loss substantial and tangible, the extent of which and the compensatory damages for which, can be readily ascertained and measured, and a loss which, under the evidence, the jury--could fairly ascribe to the negligent act, such loss is damnum absque injuria. To this conclusion we are unable to assent. The assignments of error must therefore be overruled.

Judgment affirmed.


text:
    Cox, Appellant, v. Croft.
    July 14, 1909:

      Mechanic’s lien — Striking off — Parties—Act of June 4,1901, P. L, 431.
    Where an owner in petitioning the court to strike off a mechanic’s lien, avers that the claimant was neither his contractor nor was he a subcontractor, and these averments are practically undenied in the answer, the court must strike off the lien. The claimant in such a case is not within the class privileged to file a lien.
    Argued Dec. 19, 1908.
    Appeal, No. 182, Oct. T., 1908, by plaintiff, from order of C. P. No. 1, Phila. Co., March T., 1908, No. 924, M. L. D., making absolute rule to strike off lien in case of Frank D. Cox, trading as C. A. Cox’s Sons, v. Samuel B. Croft, owner or reputed owner, and Peter J. Foley, contractor.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Affirmed.
    Rule to strike off mechanic’s lien.
    The opinion of the Superior Court states the case.

      Error assigned was order making absolute rule to strike off mechanic's lien.

      Charles H. Pile, for appellant,
    cited: Maxfield v. German Lutheran Church, 2 Luz. L. R. 120; Frick v. Gladdings, 10 Phila. 79; McCristal v. Cochran, 147 Pa. 225; Lee v. Exeter Club, 9 Pa. Superior Ct. 581; American Car, etc., Co. v. Alexandria Water Co., 215 Pa. 520.

      Paxson Deeter, with him Evans & Forster and John C. Bell, for appellees,
    cited: Este v. R. R. Co., 13 Pa. Dist. Rep; 451; Brown v. Cowan, 110 Pa. 588; McElroy v. Braden, 152 Pa. 78; Tebay v. Kirkpatrick, 146 Pa. 120; Bevan v. Thackara, 143 Pa. 182.
   Opinion by

Head, J.,

The twenty-third section of the Act of June 4,1901, P. L. 431, prescribes the procedure by which the owner of a property, against which a mechanic’s lien has been filed, may have determined by the proper court the validity of the lien. The proceeding begins by a petition on the part of the property owner setting forth the matters of fact or law upon which he founds his contention that the lien is invalid and should be stricken from the record. The lien claimant is afforded an opportunity to answer. If it appear from the petition and answer that there are any material disputed facts, either party has the right to request that such issues of fact be tried by a jury without further pleadings. If there be no disputed facts, or if in the absence of such request the facts are found by the court, then it remains only to determine and dispose of the legal questions arising on the facts thus established.

In the present case the owner in his petition avers that the claimant was neither his contractor nor was he a subcontractor, and therefore he was not within the class privileged to file such a lien. The petition further avers that the person, named in the lien filed as the general contractor, was an entire stranger to the owner, and was not in fact the contractor. These facts were practically undenied by the answer.

The learned court below struck off the lien without filing any opinion. This action seems to us to have been warranted on two grounds. First, that the claimant is not within the class to which the law has accorded the privilege of securing the price of labor rendered, or material furnished, by filing a lien against the property of one with whom such claimant never dealt. Second, because before one can claim the benefit of a special statutory remedy, he must comply with every condition prescribed by the statute. In this case the lien does not show any contract between, the claimant and the owner, nor does it show, in the light of the petition and answer, that the person with whom the claimant dealt was the contractor of the owner, as required by the act. Without going into the question of the sufficiency of the notice given by the claimant — could he be regarded as a subcontractor — we think the record plainly discloses the fact that he was not entitled to a lien, and the order of the court below striking off the lien was abundantly warranted by the facts averred in the petition and not denied in the answer.

Judgment affirmed.


author: Head, J., Rice, P. J.,

text:
    Shamokin Manufacturing Company v. Ohio German Fire Insurance Company, Appellant.

      Insurance — Fire insurance — Invalid contract — Two masters — Corporation.

    In an action on a policy of insurance an affidavit is sufficient to prevent judgment when it avers that the local agent of an insurance company, whose duty it was to solicit insurance, and countersign and deliver policies, issued such a policy to a corporation of which he was a stockholder and general officer, without any knowledge on the part of his principal of the fact of his interest in the insured property. Such a transaction invites the application of the general rule that it is against public policy for a man to serve two masters at the same time and the burden is on the plaintiff to show, if he can, a state of facts which would prevent the application to his case, of the general rule.
    Argued Oct. 27,1908.
    Appeal, No. 22, Oct. T., 1908, by defendant, from order of C. P. Northumberland Co., Dec. T., 1907, No. 69, making absolute rule for judgment for want of a sufficient affidavit of defense in case of Shamokin Manufacturing Company v. The Ohio German Fire Insurance Company of Toledo, Ohio.
    Before Rice, P. J., Porter, Henderson, Morrison, Orlady, Head and Beaver, JJ.
    Reversed.
    Assumpsit on a policy of fire insurance.
    The facts are stated in the opinion of the Superior Court.

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

      Arthur S. Arnold, with him C. F. Shipman, for appellant.—
    The contract was against the policy of the law and invalid: Arispe Mercantile Co. v. Ins. Co., 133 Iowa, 272 (110 N. W. Repr. 593); Greenwood Ice & Coal Co. v. Ins. Co., 72 Miss. 46 (17 So. Repr. 83); Ritt v. Ins. Co., 41 Barb. (N. Y.) 353; Utica Ins. Co. v. Toledo Ins. Co., 17 Barb. 132; New York Central Ins. Co. v. Protection Co., 20 Barb. 468; Empire State Ins. Co. v. Ins. Co., 138 N. Y. 446 (34 N. E. Repr. 200); Wildberger v. Fire Ins. Co., 28 L. R. A. 220; Glen Falls Ins. Co. v. Hopkins, 16 Ill. App. 220; Everhart v, Searle, 71 Pa. 256.
    July 14,1909:

      W. II. TJnger, with him W. L. Snyder, for appellee.' —
    The mere fact that the agent through whom the insurance is procured has previously been the agent of the insured for some other purpose with relation to the property does not make void the insurance: British American Assurance Co. v. Cooper, 26 Colo. 452 (58 Pac. Repr. 592); People’s Ins. Co. v. Paddon, 8 Ill. App. 447; Phœnix Ins. Co. v. Hamilton, 110 Ga. 14 (35 S. E. Repr. 305); Smith & Wallace Co. v. Prussian National Insurance Co., 68 N. J. L. 674 (54 Atl. Repr. 458); Northrup v. Ins. Co., 48 Wis. 420 (4 N. W. Repr. 350); Nolte v. Hulbert, 37 Ohio, 445; British American Assurance Co. v. Cooper, 6 Colo. App. 25 (40 Pac. Repr. 147); Russell v. Fuel Gas Co., 184 Pa. 102; Rice’s App., 79 Pa. 168; Fiske v. Assurance Co., 100 Mo. App. 545 (75 S. W. Repr. 382); Kaufman v. Cooper Iron Mining Co., 105 Pa. 537.
   Opinion by

Head, J.,

This being an action on a policy of fire insurance, the learned court below, on the plaintiff’s motion, made absolute a rule for judgment for want of a sufficient affidavit of defense. In such case, of course, we must accept as established not only every fact properly averred in the affidavit, but also every inference favorable to the defendant which may fairly and justly be drawn from facts so pleaded. The statement of claim avers that the plaintiff was the owner of a certain building situate in the borough of Shamokin, Pa. That on April 3,1906, the defendant company, through its local agent at Shamokin, A. G. Marr, for a valuable consideration, executed and delivered to it a policy insuring the said building against loss by fire for the period therein stated. That during the life of the policy the insured building was destroyed by fire; that notice of said loss, containing all the information required by the provisions of the policy, was in due time given to the defendant, which nevertheless refused to pay the amount of said loss, etc.

The affidavit of defense averred the fact that A. G. Marr, the local agent of defendant, whose duty it was to solicit insurance and countersign and deliver policies, was, at the time the said policy was issued, a stockholder in and a general officer of the plaintiff company. That he had never made known to the defendant the fact of his interest in the property insured; that it had not learned, from any source, until after the fire, of the existence of any such relation between him and the plaintiff company, and that it had done nothing to waive its right to assert, or to estop itself from asserting its right to avail itself of the defense which, it alleges, the law entitles it to make under such circumstances. That having no such knowledge, it at no time ratified, or adopted as its own, the action of the agent, Marr, in issuing to a corporation in which he was a stockholder, and of which he was an officer, the policy aforesaid, nor did it in any manner or form assent thereto.

It is further averred that shortly after the issuing of said policy and during its life, its said local agent issued another policy of insurance in the defendant company to certain tenants or lessees of the plaintiff company, occupying a portion of the said building as a manufactory, and that in his daily report to the defendant of said second policy, the said agent falsely declared that the defendant had no other insurance on the premises, or within 100 feet of the same, whereby, without the knowledge of the defendant, and without its consent, it was subjected to a double loss on the same premises, one to the corporation in which its agent was, without its knowledge, interested, and the other in favor of the lessee of that corporation. The defendant therefore averred upon the Vadvice of counsel that it was not liable to the plaintiff, by reason of the policy sued on, because of the facts hereinbefore stated.

It is true there is no averment of the extent of the stock ownership of the insurance agent in the plaintiff company, but it is difficult to see how the defendant could have had the knowledge which would enable it to make an accurate statement on that subject. That would be a matter peculiarly within the knowledge of the defendant and the agent himself.

The affidavit goes further, however, and states that he’ was one of the general officers of the corporation plaintiff, and at this stage of the proceedings it would not seem to be an unfair inference, from that fact, that his stock ownership would be substantial in quantity.

Whilst the exact question now presented does not seem to have been directly decided by the appellate courts of this state in any case that has come to our knowledge, the principle of the law and the rule of public policy on which it is founded, upon which the defendant relies, have been many times declared by our courts. In Everhart v. Searle, 71 Pa. 256, the principle is thus broadly stated: “The case before us is rather novel. It involves a question whether the same person may be an agent in a private transaction for both parties, without the consent of both, so as to entitle him to compensation from both or either. We have the authority of Holy Writ for saying that 'no man can serve two masters; for either he will hate the one and love the other, or else he will hold to the one and despise the other.’ All human experience sanctions the undoubted truth and purity of this philosophy, and it is received as a cardinal principle in every system of enlightened jurisprudence.” In Fulton v. Walters, 28 Pa. Superior Ct. 269, the rule is thus stated: “It has been stated in numerous cases that an agent to sell cannot become an agent to buy.' It matters not that there was no fraud meditated, it is against the policy of the law that such artifice should be successful. The ground on which the disqualification rests is no other than that principle which dictates that a man cannot be judge and party.”

In many other cases elaborating this principle, it has been held that contracts were void wherein it appeared that one who was acting as agent, making the contract for his principal, was also interested as an individual in the other side of the contract. In arriving at such conclusions, the courts have not deemed it controlling that it should appear that any fraud or injury was actually worked or even intended, but they have rather proceeded on the broad ground that the policy of the law would not permit one who was intrusted with the interests of others, and who owed to them an undivided allegiance, to make the business of his principals an object of interest to himself, because “from the frailty of nature one who has the power will be too readily seized with the inclination to use the opportunity for serving his own interest at the expense of those for whom he is intrusted.”

If, however, we look into the decisions of courts of other jurisdictions, we find abundance of authority applicable to the very question now before us.

In 1 Cooley’s Briefs on Insurance, 351, 352, the principle is fully discussed and the authorities generally cited. The following excerpts will show, we think, the general trend of the authorities on the point now in issue. “ In view of the principle discussed in the foregoing paragraph and the further principle that an agent cannot, in any matter in which he himself has an adverse interest, bind his principal, is the rule that an agent authorized to accept risks and issue policies cannot approve the risk binding the company, by issuing a policy on his own property. ... In Ritt v. Washington Marine, etc., Ins. Co., 41 Barb. (N. Y.) 353, it was held that an agent authorized to effect insurance on vessels, procure policies from the company, and deliver them to the insured, has no power to accept an application as agent on property of which he is one of the owners, and if he does so, and fails to disclose his interest to the company, the policy is void. The invalidity of the policy does not rest on the materiality of the relation of the agent to the risk, but because it is against public policy to allow such an agreement to stand. The rule was applied in Greenwood Ice & Coal Co. v. Georgia Home Ins. Co., 72 Miss. 46 (17 So. Repr. 83), where it was held that an insurance policy issued by an agent to a company of which he is a director and officer is invalid. . . . An agent authorized to accept risks and countersign policies cannot accept a risk on property owned by a partnership of which he is a member, and a contract for such insurance, made between him as agent and the other partner, is not binding unless ratified by the company: Glen Falls Ins. Co. v. Hopkins, 16 Ill. App. 220.”

Practically speaking, the interest which an insurance agent might have in a partnership might be very much less than the interest which he would have by virtue of his ownership of the stock of a corporation. If the rule would be properly applied in the former case, why should it be rejected in the latter? Or if it be sound to say that an insurance agent could not countersign and deliver to a partnership, of which he was a member, a valid policy of insurance without the consent of his company, on what principle could we hold that if the partnership incorporated itself, each partner taking stock in the corporation to the extent of his former interest, there would be in fact and law any such change in the conditions as would prevent the application of the rule? If it were necessary to point out how an insurance company, in a case like the present, might be actually injured, it would be easy to do so. But as we have seen, if this is a case where the rule should be applied, it becomes immaterial to determine whether or not the insurance company had suffered or was liable to suffer any actual injury, or whether its agent in the particular transaction acted in good faith or not.

The appellee contends that this case is taken out of the operation of the rule because the affidavit does not aver that it was the duty of Marr, as secretary of the plaintiff company, to negotiate for the insurance, and therefore he cannot be said to have acted in a dual capacity. The answer to this is twofold. It was not within the power of the defendant, from any knowledge it possessed, to aver what officer of the plaintiff company conducted the negotiations for the insurance, and the law does not require a defendant to aver that of which he cannot reasonably have knowledge. But the rule is broader than this. Otherwise, it would be easily evaded. Its application depends on the fact of the adverse interest of the agent of the insurance company in the property insured, and therefore it has been held, in-the case of a partnership, as we have seen, that although the application was made by the partner of the insurance agent, the policy was void because of the adverse interest of the agent to that of his principal in the subject-matter of the insurance.

It may be possible that upon a trial of the cause, after the facts are fully developed, it may be made to appear that there is something in this case which would make it an exception to the general rule, and thus exclude the application of the rule. But we think it would be imposing too severe a burden upon the defendant to hold that, in an affidavit of defense, after showing a state of facts which would broadly invite the application of the rule, it must go further and aver all of the facts which would exclude from the case every exception to the general principle. For these reasons we think the learned court below was in error in entering a summary judgment against the defendant and denying to it the right to a trial by jury.

Judgment reversed and a procedendo awarded.

Rice, P. J.,

dissenting:

The learned judge of the common pleas states in his opinion that it was conceded on argument that there was no fraud connected with plaintiff's claim and that the moral hazard of the risk was first rate. This being so, I am strongly inclined to the opinion that the mere fact that the insurance agent was a stockholder and secretary of the insured company, it not appearing that he acted for the insured company in the transaction, is not sufficient to defeat recovery.

Henderson, J., concurs in foregoing.