author: O’Hara, Dep. Att’y-Gen.,

text:
    School Taxes on Seated Lands.
    May 1, 1930.
   O’Hara, Dep. Att’y-Gen.,

Your requests for an opinion from the Department of Justice on the subject of the collection of school taxes and the application of the Act of May 9, 1929, P. L. 1684, to their collection have been referred to me.

This act refers to the collection, among other taxes, of school taxes assessed upon seated lands, and this opinion is confined to a consideration of the taxes assessed by school districts upon seated lands.

We have considered the specific questions submitted by you and will answer them in the light of the following considerations.

The true construction to be placed upon the Act of May 9, 1929, P. L. 1684, and its effect upon the remedies existing at the date of its enactment for the collection of school tax in the school districts of the Commonwealth, is not free from doubt.

Upon its face this act compels the receiver of taxes to return such taxes on or before the first Monday of May in the year following their levy and assessment, but it may be that, in view of the history of taxing legislation in this State, the courts will interpret the phrase “it shall be the duty ... to return” as permissive rather than mandatory, and that they will hold that the Act of May 16, 1923, P. L. 207, affords an alternative remedy unimpaired by the Act of May 9, 1929, P. L. 1684.

Under another interpretation, the Act of May 9, 1929, P. L. 1684, would impose a penalty of 1 per centum per month beginning Jan. 1, 1930, upon taxes assessed and levied prior to its enactment, without a levy or warrant therefor, by the authority levying the tax within the territorial limits of a municipality or district; would reduce the time within which the collectors of county, borough and township taxes may collect their respective duplicates out of the personal property of the taxable or upon the premises from two years to periods less than one year; would reduce the time within which the collectors of school tax may collect their respective duplicates out of the personal property of the taxable or upon the premises from a period of approximately eleven months to a period of approximately six months; would in effect amend the Act of May 16, 1923, P. L. 207, by reducing the time within which a claim may be filed upon a tax lien from a period within the last day of the third calendar year after that in which the tax is first payable to varying periods of less than a year; would either amend the Act of May 18, 1911, § 562, P. L. 309 (School Code), by reducing the time within which the collector of school taxes in districts of the second, third and fourth class shall certify to the secretary of the school board all unpaid school taxes assessed and levied upon real property upon which there is no personal property out of which the same can be collected, or repeal this section of the School Code, and by so doing, perhaps, deprive school districts of the benefit of the Act of May 16, 1923, P. L. 207.

Such construction would interpret the provisions of section 1 of the Act of May 9,1929, P. L. 1684, as mandatory and thus limit the use of the procedure set up under the Act of May 16, 1923, P. L. 207, and make it available only between the date the tax duplicate is delivered to the collector and the first Monday of May in the next year. It would materially reduce the time within which the taxable might, by the payment of his tax, escape the sale of his real estate, and it would also substantially limit the period within which the collectors of the various taxes may earn their commissions. Such interpretation would speed up the collection of taxes and may be the true interpretation, but as we view the questions submitted, the responsibility to construe this act rests with the courts, who will have the benefit of passing only upon litigated points and the briefs of counsel. The responsibility of the Department of Justice, in our opinion, under these circumstances, is to indicate to you such action as the several school districts and the collectors of their taxes may take and should take until the Act of May 9', 19291, P. L. 1684, has been interpreted by the appellate courts.

Under this view we refrain from expressing our views and suggest that the only safe course for the collector of school taxes to pursue is to return all taxes assessed and levied in 19291 on seated lands and unpaid to the county commissioners of the county in which the real estate lies, and for which no liens have been filed under the Act of May 16, 1923, P. L. 207, not later than the first Monday of May. If the collector of school taxes has not certified to the secretary of the school board all unpaid school taxes assessed and levied upon real property upon which there is no personal property out of which the same can be collected, and does not return such taxes to the county commissioners on or before the first Monday of May, 1930, he may thereafter, if the construction last above noted be placed upon the Act of May 9, 1929, P. L. 1684, find himself under the necessity of finding personal property out of which he may make the taxes and penalties or be personally liable for the amount of the taxes and penalties. We suggest the advisability, for the same reason, of including in such return the penalty of 1 per centum per month, whether the tax was levied and assessed in 1929 prior to May 9th or after.

Briefly answering your questions not covered by above suggestion:

The Act of May 9, 1929, P. L. 1684, applies to seated lands in school districts of all classes; does not apply to taxes assessed prior to 1929, so far as to compel or permit return thereof or the imposition of the added penalty, but may apply to taxes assessed prior to 1929 and returned pursuant to the provisions of the Acts of May 21, 1913, P. L. 285, and of June 1, 1915, P. L. 660, so far as to provide a remedy for the enforcement of the return. See Bradford County v. Beardsley, 60 Pa. Superior Ct. 478. Claims filed pursuant to the Act of May 16, 1923, P. L. 207, must be enforced pursuant to the provisions of that act.

The penalty of 1 per centum per month authorized by the Act of May 9, 1929, P. L. 1684, is added to taxes on seated lands unpaid before Jan. 1st of the year following the levy and assessment of the tax, whether personal property be found upon the premises sufficient to pay the tax or not, and is collectible after Jan. 1st, whether the tax be paid before or after the return to the county commissioners.

You are also advised that, in our opinion, the collector of school taxes must exhaust every other means to collect from personal property before he returns the seated lands bound by the tax, but if he fails to make or to collect such taxes by distress and sale of goods and chattels, or by imprisonment of the delinquent, his failure shall not invalidate any return made or lien filed for the nonpayment of taxes or any tax sale had for the collection of such taxes on such land: Act of May 4, 1927, P. L. 712, amending the Act of April 15, 1834, § 21, P. L. 509.

You are further advised that if any tax is returned to the county commissioners for collection, the collector is not entitled to receive or collect any fees, commissions or penalties, and is relieved from responsibility for its collection: Act of May 7, 1929, P. L. 1576.

Replying to your specific questions:

“Can school districts require the county treasurer to furnish detailed statements of the tax collected?”

It is the duty of the county treasurer to account to the school district for all taxes assessed and levied by the school district, and all penalties thereon, as provided by law, which may be collected by him pursuant to the provisions of the Act of May 9, 1929, P. L. 1684. No detailed statement is required of him other than the report and return to the Court of Common Pleas, as required by section 9 of the act, where a sale is had. Where no sale is had, it is the duty of the county treasurer to report and transmit the tax and penalty so collected in due course of business.

“Does the additional penalty that is assessed on the first Monday of January apply to taxes which are subsequently paid before the first Monday in May or before the return is made to the county commissioners?”

Yes.

“What is seated land as relating to unseated land? Is there such a thing as unseated land in third class cities?”

“Seated land,” as used in the tax laws, is land that is occupied, cultivated, improved, reclaimed, farmed or used as a place of residence; land on which are such permanent improvements as indicate a personal responsibility for its taxes.

“Unseated lands” are those on which there are no such improvements as indicate a personal responsibility for its taxes; lands which are neither in the possession of, nor cultivated by, any person.

Prom C. P. Addams, Harrisburg, Pa.


source: Caselaw Access Project

author: Fleming, P. J.,

license: Public Domain

text:
    In re Snow Shoe Township Road.

      A. C. Dale, for petitioners.
    Jan. 9, 1930.
   Fleming, P. J.,

We have before us for disposition certain exceptions filed to the report of viewers named in this matter.

The road desired is intended to take the place of an existing public road sought to be vacated to No. 13, September Sessions, 1929, the vacation of which the viewers named therein have refused to recommend and to which finding of the viewers exceptions have also been filed. Inasmuch as the existing road and the road herein sought to be laid out and opened both accommodate the village of Kato, a mining village of fifty-two families, and there is no necessity for both roads, our disposition of the exceptions filed must be similar in both cases.

One established fact, of which we take judicial notice and which cannot be avoided in any way, compels us to dismiss the exceptions and to confirm the report of viewers in both cases. The assessed valuation of Snow Shoe Township for the year 1930 is $220,132. The millage for road purposes is 10 mills, which would produce a gross income to the road fund, making no allowance for exemptions or uncollectible taxes, of $2201.32. The extent to which the court, were it so inclined, could add to this would be but an additional 10 mills, or $2201.32, fixing the largest amount available to the township at $4402.64. We are convinced that this would be insufficient to build a proper road through the country proposed in this application and to provide for the other roads in the township. Nor are we inclined to add the additional burden upon the taxpayers.

It is the opinion of the court that if the supervisors would give proper attention to the existing road the wants of the petitioners would be fully met. The supervisors of this township have for many years last past patently favored certain individuals and corporations by expending the road duplicate where it most benefited these favored few. Taxpayers, equally as remunerative to the township, have been wholly ignored, and roads in which they have been interested, and which are as essential to the public welfare as those upon which the money has been expended, have been allowed to become wholly impassable at times. We desire to here state to the supervisors of this township that future applications for the allowance of increased millage will be of no purpose until this court has been shown and convinced that an honest, efficient and complete effort has been made to repair and put in passable and safe condition the road sought to be vacated to No. 13, September Sessions, 1929. Furthermore, we shall expect to be shown and convinced that the road funds have been equitably distributed.

As to the present exceptions, for reasons stated above, we cannot sustain them.

And now, Jan. 9,1930, exceptions to the report of viewers are dismissed and the report of viewers is confirmed absolutely.

From S. D. Gottig, Bsllefonte, Pa.


author: Schaeffer, P. J.,

text:
    Long, Administrator, v. Barnet et al.

      Oliver G. Lentz, for defendants and rule.

      Samuel E. Bertolet and Charles K. Derr, contra.
    Dec. 2, 1929.
   Schaeffer, P. J.,

To the scire facias sur mortgage caused to •be issued by the plaintiff, certain defendants claiming as real owners have filed their affidavit of defense. The trial resulted in a verdict for the plaintiff. The only question is whether or not the defendants’ motion for binding instructions should have been granted on the ground that plaintiff’s action is barred by the statute of limitations.

The mortgage, dated and acknowledged on Sept. 4, 1890, was given by Cyrus Barnet, obligor, to Jonathan Klopp, mortgagee, “in trust and for the use of Maria Barnet, the wife of the obligor of the other part,” for the payment of the sum of $2800, “on the first day of April, 1898, without interest, unless the said obligor should sooner depart this life, when the same, upon the happening of which event, shall become immediately payable.” The testimony disclosed that Jonathan Klopp, the trustee, died April 5, 1897, and there was no evidence of the appointment of another trustee. There is also testimony that Cyrus Barnet and Maria Barnet lived together until the date of the former’s death, which occurred on March 16, 1914. Maria Barnet died Feb. 20, 1916, and letters were thereupon issued to the plaintiff here. This action was begun in January, 1929. The credibility of this testimony was submitted to the jury, who returned a verdict for the plaintiff.

The trust created by the mortgage was purely passive. No duty devolved upon the trustee. By the terms of the instrument the mortgage was without interest. The mortgage would have been equally valid had it been taken in the name of Maria Barnet, individually, without the intervention of a trustee: Thompson v. Allen, 103 Pa. 44; Reagle v. Reagle, 179 Pa. 89. The trust was not necessary to preserve any contingent interests, nor for the accomplishment of any object of the creator of the trust: Barnett’s Appeal, 46 Pa. 392. “The true test is whether a court of equity in Pennsylvania would decree a conveyance of the legal title:” Rife v. Geyer, 59 Pa. 393, 396; Carmichael v. Thompson, 8 Sadler, 120, 125. Furthermore, the trustee died before the date of the maturity of the mortgage, and there was no duty devolving upon any one to appoint a new trustee.

This being so, the statute of limitations certainly did not begin to run against the wife before the passage of the Act of March 27, 1913, P. L. 14, which for the first time gave to a married woman, living with her husband, the right to sue her husband in a proceeding to protect or to recover her separate property. Prior to said act such suit could not have been brought by the wife against the husband with whom she was living: Gillan v. West, 232 Pa. 74, and it would seem, although we are not called upon to decide, that, since the Act of 1913, statutes of limitation as well as presumptions or estoppels by lapse of time are not permitted, upon grounds of public policy, to operate upon the claims of a wife living with her husband against the latter. In our case Mr. and Mrs. Barnet lived together until the death of the former in 1914, and we are of the opinion that the statute of limitations did not begin to run before that date.

And now, to wit, Dec. 2, 1929, the rule for judgment n. o. v. is discharged.


author: Per Curiam,

text:
    Gutowska v. Marsh.

      J. Gordon Mason and Herman Reich, for plaintiff.

      S. L. Gribbin, for defendant.
    Dec. 16, 1929.
   Per Curiam,

On Dec. 31, 1927, at or about 11.30 o’clock P. M., Anna Gutowska, the plaintiff, was riding in a' Ford sedan operated by Stanley Wysock on the state highway between Danville and the Borough of Northumberland. At a point on the said highway a collision occurred between the car in which she was riding and a Ford coupe operated in an opposite direction by Hugh Montgomery Marsh. She sustained bodily injuries and subsequently brought this suit to recover damages therefor. The trial resulted in a verdict for the plaintiff for the sum of $18,722. Thereupon the defendant filed a motion for a new trial, assigning six reasons in support thereof. In our view of the present proceedings, the only reason calling for consideration is the sixth, which is as follows:

“Because at the time of the trial of the case the plaintiff represented herself as a single woman, when in truth and in fact she had previously been married to Stanley Wysock, the principal witness for the plaintiff and her companion on the night of the accident; that the fact of said marriage was unknown to the defendant at the time of the trial and could not be discovered by him by ordinary diligence; that the said marriage status may have changed the amount of damages to which she, in the opinion of the jury, was entitled, and that her marriage to the said Stanley Wysock would have affected the weight and credibility of the testimony of the said Stanley Wysock.”

No depositions were taken in support of the fact of the said marriage, nor is it anywhere disclosed by the record. The necessity therefor was precluded by the admission at the argument of the motion by counsel for the plaintiff, who stated that, unknown to him, the plaintiff did appear and testify as if unmarried, when in truth and in fact she had been married some time previous to the trial to Stanley Wysock, the driver of the car in which she was riding. The undisclosed fact of her marriage, her description of the nature and the extent of her injuries, the effect thereon of her ability to bear children, the consequent inference therefrom of the unlikelihood of her marriage, the appearance of Wysock as a disinterested witness, and the charge of the court directing the measure of damages as for an unmarried woman, doubtless may have influenced the jury in arriving at any verdict for her and doubtless did influence them in arriving at the present verdict. The case was brought and tried wholly on the theory that the plaintiff was an unmarried woman. We do not propose to dignify this deception, whether intentional or otherwise, by a lengthy discussion. The situation calls for summary disposition. The court cannot indulge so glaring an imposition. The only effectual remedy is by a new trial.

And now, Dec. 16, 1929, defendant’s sixth reason is sustained and a new trial is hereby awarded.

From C. M. Clement, Sunbury, Pa.


author: Groff, J.,

text:
    Commonwealth v. Tavella et al.

      Guy K. Bard, for petition; S. V. Hosterman, District Attorney, contra.
    Jan. 18, 1930.
   Groff, J.,

This is a case in which a petition was presented for the condemnation of one Oakland sport model roadster, Pennsylvania license No. 116-432. The petition is not before us, but we assume that it was presented as above stated for the reason that the General Motors Acceptance Corporation filed an answer on May 11, 1929.

It seems that Victoria Tavella and James Cassido were arrested on Feb. 4, 1929, for unlawfully transporting and possessing alcoholic beverages in excess of one-half of 1 per cent, in an Oakland sport model roadster bearing Pennsylvania license No. 116-432. .They were indicted for that offense in the Court of Quarter Sessions of Lancaster County, in Indictment No. 27, April Term, 1929, and on April 16, 1929, Victoria Tavella pleaded guilty to the offense. On April 17, 1929, the defendant, James Cassido, pleaded not guilty. The disposition of the latter ease does not appear from the papers we have before us. The car, however, that Victoria Tavella was transporting the liquor in is the ear in question.

The act of assembly which covers this case is the Act of March 27, 1923, P. L. 34, section 11, the 2nd paragraph of (A), which reads as follows:

“Upon the transportation of intoxicating liquor in violation of this act, the . . . motor vehicle ... in which it is so transported shall be forfeited to the Commonwealth, subject to the provisions herein set forth:

“(B) If upon hearing before the Court of Quarter Sessions, or a judge thereof, it appears that any such . . . property, so in the custody of the law or of any officer, was so possessed or intended for use in violating any of the provisions of this act, or has been so used, such .... property shall be adjudged forfeited and condemned, and shall be disposed of as hereinafter provided; or if upon such hearing it appears that any . . . conveyance . . . seized under the provisions of this act had been used for the unlawful transportation of intoxicating liquor, such . . . conveyance . . . shall be adjudged forfeited and condemned, and shall be disposed of as hereinafter provided, unless the court shall otherwise order.

“(Ill) In the case of any .... conveyance .... seized under the provisions of this act and condemned as aforesaid, the court shall order a public sale thereof by the sheriff of the county — notice of which sale shall be given in the same manner as notice is required to be given of the sale of personal property under a writ of fieri facias — the proceeds of such sale to be paid to the county treasurer for the use of the county. In the event that any such . . . conveyance ... is, when so seized, held and possessed under a bailment lease or contract, and the legal title thereto is in another person, who shall prove that the unlawful use for which the same was seized was without his knowledge or consent, then the claim of the bailor for money due under said bailment lease or contract shall attach to and be paid out of the funds derived from said sale after payment of costs, and the balance distributed as above provided.....

“(D) (IV) Upon the filing of any claim for said property setting forth a right of possession thereof, the case shall be deemed at issue and a time be fixed for the hearing thereof.

“ (V) At the time of said hearing, if the Commonwealth shall produce evidence that the property in question was unlawfully possessed or used, the burden shall be upon the claimant to show: (a) that he is the owner of said property; (b) that he lawfully acquired the same; (c) that it was lawfully used and possessed by him; and (d) in the event that it shall appear that the property was unlawfully used by a person other than the claimant, then such claimant shall show that such unlawful use was without his knowledge or consent.

“ (VI) Any person claiming the ownership of, or right of possession to, any . . . conveyance . . . the disposition of which is provided for in this section-may, at any time prior to the sale thereof, present his petition to the court, alleging his lawful ownership thereof or right of possession thereto, and if upon public hearing thereon, due notice of which having been given to the district attorney, such claimant shall prove by competent evidence to the satisfaction of the court that said . . . conveyance . . . was lawfully acquired, possessed and used by him, or, if it appearing that the property was unlawfully used by a person other than the claimant, he shall prove that such unlawful use was without his knowledge or consent, then the court may order the same returned to said claimant, otherwise it shall be destroyed or sold as hereinabove provided.”

We notice that paragraph (III), under (B), section 11, of the said act provides that when the vehicle or conveyance is bailed, the claim of the bailor for money due under said bailment shall attach.

The claimant in this case, instead of offering his proofs, substitutes a stipulation of facts agreed upon by the district attorney and Guy K. Bard, attorney for the claimant. This stipulation of facts does not contain an agreement respecting all the matters which must be proven under the Act of 1923. So far as we can see, there is no stipulation or agreement as to the amount of money due on the bailment lease.

The bailor is only entitled to the balance due him, if any: Com. v. Studebaker Touring Car, 4 D. & C. 276; Com. v. One Chevrolet Coupé, 4 D. & C. 745. As we understand the law in these cases, the bailor is not entitled to more than the amount of rentals that have not been paid. Under the stipulation of facts, he is entitled to the entire sum of money now remaining in the hands of the sheriff or county treasurer to whom it should have been paid.

“The effect of the Act of March 27, 1923, P. L. 34, is to create, as soon as the Commonwealth has shown the unlawful use of a car, a presumption that such use was with the knowledge and consent of the owner, and to place upon him the burden of rebutting this presumption by making proof (in addition to showing ownership and lawful acquisition, use and possession by him) that the unlawful use was ‘without his knowledge and consent:’” Com. v. One Ford Automobile, 6 D. & C. 453.

A purchased a car in her own name. The car was licensed in the name of B, who drove the car. B transported liquor in the car and it was confiscated. A sought to recover the car by alleging her ownership, that she never knowingly allowed or permitted it to be used for transporting liquor, and actually did not know that it was so used. It was held that, having given B unrestricted control of the car, with authority to use it for any purpose, she could not say that the car was used without her consent, and her petition for restitution was denied: Com. v. One Ford Automobile, supra.

Of course, we realize that the manifest purpose of the Legislature was to protect and save the rights of innocent owners having claim to vehicles used for the unlawful transportation of intoxicating liquor, and that is the purpose of this court.

The stipulation of facts filed in this case, however, does not convince us that they are sufficient to justify us in making an order for the return of the money now remaining in the hands of the sheriff or of the county treasurer to the claimant. We, however, do not want to deprive claimant of any rights, and we will afford him an opportunity to be heard in court by his witnesses at such time as he and the district attorney shall agree upon.

Prom George Ross Eshleman, Lancaster, Pa.


author: Landis, P. J.,

text:
    Commonwealth v. Dommel.

      K. L. Shirk, for rule; S. V. Hosterman, District Attorney, contra.
    Jan. 18, 1930.
   Landis, P. J.,

On Dec. 6, 1928, Herr & Co. leased to Edna Eshleman, a Pontiac coupé. The amount to be paid thereon was $301. The whereabouts of Edna Eshleman are stated to be unknown. Subsequently, this machine came into the hands of Charles Dommel. It was in his possession while he was transporting liquor. He was arrested, tried and convicted of this offense. The machine was condemned under an order of the court, and it was sold at public sale by the sheriff for $75. After the payment of costs of the sale, the balance was paid into the county treasury. The amount due on the lease is $252.

Herr & Co. transferred this lease to the Commercial Loan and Finance Corporation. On March 23, 1929, that company presented its petition to the court, showing the amount due to it, and also that it had made proper inquiry as to the responsibility of Edna Eshleman when it took the lease, and that it had no knowledge that the automobile was being or was to be used for illegal or immoral purposes. Those facts have been satisfactorily established.

By section 11 (B, III) of the Act of March 27, 1923, P. L. 34, it is provided that “in the case of any vehicle, team, conveyance or craft seized under the provisions of this act and condemned as aforesaid, the court shall order a public sale thereof by the sheriff of the county — notice of which sale shall be given in the same manner as notice is required to be given of the sale of personal property under a writ of fieri facias — the proceeds of such sale to be paid to the county treasurer for the use of the county. In the event that any such vehicle, team, conveyance or craft is, when so seized, held and possessed under a bailment lease or contract, and the legal title thereto is in another person who shall prove that the unlawful use for which the same was seized was without his knowledge or consent, then the claim of the bailor for money due under said bailment lease or contract shall attach to and be paid out of the funds derived from said sale after payment of costs. . . .” This provision of the Act of 1923 covers the present case. The ownership of the automobile was clearly shown to have been in the finance corporation when it was seized; there was no evidence that the owner knew, or ought to have known, that it was used for an illegal purpose when the seizure was made, and there was shown to be due to the petitioner on the lease more than the amount covered into the county treasury upon its sale.

It is, therefore, ordered that the county treasurer pay to the Commercial Loan and Finance Corporation the sum of $64.25, the net proceeds of said sale.

Prom George Ross Eshleman, Lancaster, Pa.


author: Stearns, J., Van Dusen, J.,

text:
    Paul’s Estate.

      Edmonds, Obermayer & Rebmann, for exceptions.

      William M. Boenning, contra.
    July 11, 1930.
   Stearns, J.,

Decedent, a resident of the Commonwealth of Pennsylvania, possessed in his lifetime real estate situate in the States of Missouri and New Jersey. He executed formal written agreements of sale therefor and accepted substantial payments on account of the purchase price. The death occurred before the execution of the deeds, and the contracts were completed by the executrix by the delivery of proper deeds upon the receipt of the unpaid portion of the consideration money.

The appraiser appointed by the Register of Wills to appraise the value of the property or estate of the decedent for inheritance tax purposes appraised the unpaid portion of the consideration money due under the contracts of sale of the real estate in such foreign jurisdictions as part of the personal estate of such decedent, and in pursuance thereto assessed a tax. The sole beneficiary under the will, and executrix therein named, appealed from such appraisement and assessment. Upon a hearing, the action of the appraiser was affirmed. Exceptions were taken to the opinion of the Hearing Judge, and the matter is now before us for review.

The United States Supreme Court and the Supreme Court of this Commonwealth have very definitely ruled that one state, by a theory or fiction of law, may not tax tangible real or personal estate actually located in another state: Frick v. Pennsylvania, 268 U. S. 473; Robinson’s Estate, 285 Pa. 308; Com. v. Presbyterian Hospital, 287 Pa. 49; Croxton’s Estate, 288 Pa. 184.

All of the cases above cited, it is true, relate to the application of the legal fiction of equitable conversion by decedent’s mil. We are of opinion that -the same taxation principle must similarly be applied when precisely the same fiction is invoked with respect to a decedent’s 'contract.

The error into which the Hearing Judge has fallen lies in failing to distinguish between the application of the doctrine of equitable conversion when applied to the parties themselves or their privies and as it may affect the rights of strangers, particularly those of another sovereign state.

In order to sustain the legal conclusion that the foreign real estate was personal property in Pennsylvania, the Hearing Judge relies upon the theory and operation of the doctrine of equitable conversion. He decided that the conversion had actually taken place, inter vivos, because of the execution of the contracts of sale. Numerous cases are cited as authority for the familiar operation and effect of the application of the doctrine of equitable conversion. Briefly summarized, it is that, immediately upon the execution of a valid agreement of sale, the equitable title passes to the vendee; the vendor thereafter holds the naked legal title to the real estate, as trustee, which he will be obliged to transfer to the equitable owner or vendee upon full compliance with the terms concerning payment of the purchase money; that, pending completion of the transaction, should either or both of the parties die, the proceeds from the sale pass to the vendor’s heirs, as personal estate, and the vendee’s heirs inherit the real estate as of the date of the contract of sale. We concede that the Hearing Judge accurately stated the principles relating to the application of the doctrine of equitable conversion between the parties concerning valid contracts for the sale of real estate.

The decision of the Hearing Judge, however, rests upon the theory that the contract of sale conveyed the equitable title to the real estate. This is fallacious. It is not the contract which transfers title. The equity powers of the court are invoked to accomplish that. Equity regards that done which should have been done, and, therefore, orders a conveyance upon the doctrine of equitable conversion.

To demonstrate that it is not the contract operating as a deed which actually conveys, but is the equity power of the court, see Orr’s Estate, 283 Pa. 475; Welsh v. Ford, 282 Pa. 96; McCullough’s Estate, 292 Pa. 177. These cases are examples of the familiar principle that even though the contract may be perfect in form and for a valuable consideration, yet if equities intervene relief may be withheld.

Again, it has been decided that the doctrine of equitable conversion has no application when the rights of strangers intervene. Thus creditors of a vendor do not lose their liens because of the vendor’s contract of sale: Leiper v. Irvine, 26 Pa. 54.

Mr. Bispham, in his Principles of Equity (9th ed.), concisely states the general nature and extent of the doctrine of equitable conversion:

“307. By equitable conversion is meant a change of property from real into personal, or from personal into real, not actually taking place, but presumed to exist only by construction or intendment of equity. ‘Nothing,’ it has been said, ‘is better established than this principle, that money directed to be employed in the purchase of land, and land directed to be sold and turned into money, are to be considered as that species of property into which they are directed to be converted; and this in whatever manner the direction is given, whether by will, by way of contract, marriage articles, settlement, or otherwise; and whether the money is actually deposited, or only covenanted to be paid, whether the land is actually conveyed or only agreed to be conveyed. The owner of the fund, or the contracting parties may make land money or money land.’ By this and similar declarations the judges do not mean to assert a solemn piece of legal juggling without any foundation of common sense, but simply to lay down the practical doctrine that for certain purposes of devolution and transfer, and in order that the rights of parties may be enforced and preserved, it is sometimes necessary to regard property as subject to the rules applicable to it in its changed and not in its original state, although the change may not have actually taken place.”

“309. Conversion may arise not only under a trust in a will (of which an illustration has just been given), but also under settlements and other instruments inter vivos. Where (for example) a binding contract is made for the sale of land, from that instant a conversion takes place. The purchaser is regarded for many purposes as the owner of the land, and the rights of parties claiming under him are determined by the rules which govern the devolution of realty. If the purchaser dies before conveyance, his heir will take the land, and the executor will be obliged to pay the purchase-money. So where a trust is created by deed under which it is the duty of the trustee to foreclose mortgages, buy in the mortgaged real estate, sell it and distribute the proceeds, the interests of the cestuis que trustent after the trustee had bought in the land but before he had sold it, are to be deemed personalty and not real estate. Qua the beneficiaries, the real estate vested in the trustees, is deemed in equity converted into personal property.”

Our Pennsylvania authorities amply support the text. Mr. Justice Sharswood, in Foster’s Appeal, 74 Pa. 391, said:

“Conversion is altogether a doctrine of equity. In law it has no being. It is admitted only for the accomplishment of equitable results. It may be termed an equitable fiction, and the legal maxim in fietione juris semper subsista equitas has redoubled force in application to it. It follows, of necessity, that it is limited to its end.”

Mr. Justice Mitchell, in Wentz’s Appeal, 126 Pa. 541, at page 551, wrote:

“It is not uncommon to say that the proceeds of real estate remain realty, etc., but the expression is not accurate. The money never is real estate, in law any more than in fact, but for certain purposes, and within certain limits, it is treated as if it was real estate. The purpose is to preserve the inheritable quality of the estate, so that the title may not be diverted from the previous owner, and the limit is the first devolution. The whole doctrine is the creation of equity for a specific purpose, and when that purpose is accomplished the rule ceases to operate.”

We are irresistibly drawn to the conclusion that the doctrine of equitable conversion, whether inter vivos or by will, is, in its final analysis, but a fiction of law. Upon the death of the owner, real estate remains real estate and personal estate continues to be personal estate. It is only to preserve and enforce the rights of the respective parties that equity invokes the doctrine. It is, however, encompassed within these limitations that equity acts. Where the rights of others intervene, the doctrine has no application.

As pointed out by our Supreme Court in the cases above cited, no fiction or theory of law in the state of the domicile can affect the rights of another sovereign state over immovable real estate or tangible personal property within its borders. It, therefore, follows, as a necessary conclusion, that if the property sought to be taxed is not within the jurisdiction of this Commonwealth, any attempt to assess the tax is void because it contravenes the due process clause of the 14th Amendment of our Federal Constitution: Frick v. Pennsylvania, 268 U. S. 473. The reason, pointed out by Mr. Justice Van Devanter, why a state may not tax such property situate in another state is that such property (page 489) “receives none of the protection for which the tax is supposed to be the compensation.”

It has been argued by the learned counsel for the Commonwealth that, conceding, for argument’s sake, the soundness of the above legal reasoning, yet the assessment should be sustained because (1) the contracts are choses in action; (2) they were made by decedent; (3) they had a value; (4) they were, therefore, properly assessable.

Such reasoning is unsound. The contracts, under whatever name they are called, have no value unless the real estate is conveyed and the balance of the purchase money collected. It is unthinkable to consider that upon the execution of the contracts the decedent enlarged and fructified his property rights; that thereafter he possessed his real estate but added or appended thereto choses in action consisting of promises to pay the balance of the consideration money. In truth and in fact, what the decedent owned was but one form of property. For inheritance taxation purposes it requires judicial determination whether such property is real or personal estate in the possession of his executor. To subject the contract itself — or, more properly speaking, the unpaid consideration secured by it — to such assessment would be invalid. It would be doing indirectly what is forbidden to be done directly. See Frick v. Pennsylvania, supra, page 495. Furthermore, to tax the real estate located in one state and the proceeds in another is a form of double taxation which is now distinctly forbidden by our United States Supreme Court: Baldwin v. Missouri, 281 U. S. 586; see Legal Intelligencer, May 30, 1930, page 612.

We are not influenced in our judgment by the frank admission of counsel that no tax was claimed or assessed in either Missouri or New Jersey. Such omission may have been due to an accident or mistake on the part of the taxing authorities, in which event it is quite possible that a claim may yet be presented at the audit of the executrix’s account; or the claim may appear and be enforced upon a subsequent conveyance of the real estate. In any event, such consideration can have no weight in determining the Commonwealth’s right to assess and collect the tax.

There is apparently no reported Pennsylvania decision directly in point with the present case. However, the same question was raised in the State of New York, and has been decided adversely to the claim of the Commonwealth. In re Baker’s Estate, 124 N. Y. Supp. 827, the court said (page 828) :

“The doctrine of equitable conversion, in its application to a decedent’s estate, concerns only those who have come into relations of contract or privity with the decedent or his estate. The fiction of conversion adjusts rights and imposes equities, but it cannot change facts or work inequity. In adopting it the law makes believe that the things which have been arranged to be done have been done, but this amiable pretence must be confined by the impulses which inspire it to the persons in privity with the transaction. There is no equitable need for its extension to others. Strangers have nothing to do with the reason for its being and nothing to do with its operation. In the best defined case of equitable conversion the legal owner of the lands retains as to persons not in equitable relations to himself all the rights and duties which belong to his seisin.”

We, therefore, decide that the assessment of the tax was in error. The first, second, third and fifth exceptions are sustained.

Because we have decided that no tax is due, we need not rule upon the remaining questions. However, we repeat what we decided in Borie’s Estate, 13 D. & C. 355. An appraisement and assessment, unappealed from, becomes final and conclusive. Upon the submission of a new asset for an additional assessment, the only permissible deductions are those relating exclusively to such asset. The fourth exception is dismissed.

The appeal is sustained and the record is remitted to the Register of Wills.

Van Dusen, J.,

dissenting. — In solving the present problem too much reliance should not be placed on the doctrine of equitable conversion. Of course, fictions cannot be taxed. I do not think we are dealing with a fiction, and on further reflection would state my conclusions in this way:

The succession to the property right of a deceased vendor of real estate should be taxed at his domicile, and the succession to the property right of a deceased vendee at his domicile, according to the value of the respective rights. The situs of the land is immaterial. For the character of the vendor’s property has been so modified by the contract of sale that it cannot be regarded as land only. He has a mixed piece of property, and the dominant element in it is the right to demand the purchase money, just as the dominant element in a mortgage is the debt and not the land. A mortgage is taxed at the domicile of the mortgagee, and a vendor’s contract of sale should be taxed at his domicile. The administrator will get the purchase money and should, therefore, pay the tax, not the heir. If the tax is laid on the land without considering the agreement of sale, it might be more than the value of the vendor’s interest therein, whereas, if the tax is laid on the net value of the land after deducting purchase money paid, it would seem as though the thing taxed was really the unpaid purchase money and not the land. These considerations tend to show the true nature of the vendor’s property right.


author: Stern, P. J.,

text:
    Hogan v. Rose et al.

      J. V. Somers and R. Levin, for plaintiff; J. R. K. Scott, for defendant.
    Aug. 2, 1930.
   Stern, P. J.,

One of the restrictions in the deed of the defendant Rose and the other property owners similarly circumstanced is that “the buildings to be erected upon the said lots or pieces of ground or any part or parts thereof shall be none other than private dwelling houses. . . .” Another restriction is that “no building or buildings to be erected thereon shall at any time hereafter forever be altered, changed into or used for any purpose other than as above designated.”

It would seem obvious that the second restriction substantially adds to the first one. The first one relates primarily to the architectural or physical nature of the buildings, that is to say, their construction is to be that of private dwelling houses; but after the dwelling houses are thus erected the second restriction applies, namely, that such buildings are not to be altered or used for any purpose other than “as above designated,” that is to say, as private dwelling houses.

The alteration and addition which the defendant Rose proposes to make to his building is not a violation of the first restriction, because from the physical or construction standpoint the building will still be one that may properly be called a private dwelling house, but as to the second restriction the case would seem to be different. When the restriction provides that no such building is to be used for any purpose other than as a private dwelling house it obviously means that no part of it should be so used; for otherwise if only one room were used for dwelling house purposes the rest of the building could be used for other purposes, which would be a manifest absurdity.

The question in the present ease, therefore, resolves itself to this: If the defendant Rose be allowed to use the proposed addition to his property as a suite for dental offices, is such use of such part of his building a use for a purpose other than that of a private dwelling house?

In the opinion of the court, using the new addition to the building for purposes of professional practice as a dentist would not be a use for the purposes of a private dwelling house. It is true, as above pointed out — and this distinction must be kept in mind, for it aids in clarifying the authorities which have been cited on this subject — that the building as a building, that is to say, as a physical structure, would still remain of the nature of a private dwelling house, but part of it would be devoted to a use other than for such purpose. Use as a private dwelling house means use by way of living, eating, sleeping and enjoying the various intellectual and social diversions incident to private family life. The practice of a profession, however, is, in part at least, for the purpose of gain. It is similar in that respect to the carrying on of a business or trade. It is no answer to say that doctors, lawyers and dentists frequently conduct their offices in their homes. To the extent to which they do this (at least habitually, regularly and continually), they are using part of their dwelling houses for other than dwelling house purposes.

Suppose a dentist were to carry on his profession in a suite of offices in a professional office building. In such case it is clear that he would not be occupying such offices for dwelling house purposes. If, then, he transferred his work from such offices to his dwelling house, in other words, simply transferred the offices in the office building to offices in his home, it would follow that he would not be using the part of his house in which he thus conducted his professional work for dwelling house purposes.

If the tenant of a house ran a store therein with a bulk window front, the building itself could not be classed as a private dwelling house. If he abolished the store front and made the house architecturally a dwelling house, but, nevertheless, habitually sold merchandise in one of the rooms of the house, then, while the house would still be a private dwelling house in the physical sense, part of it would be devoted to a purpose other than that of a private dwelling.

All of these arguments would seem to apply a fortiori in the present case, where a large part of the basement will be occupied as a real estate office and the additional part by the defendant Rose as a dentist’s office. Nor would it seem to be of particular significance that the defendant Rose will occupy a room in the upper floors and will dwell therein, because, whether the upper floors be used for dwelling house purposes for himself or for his tenant or for both, the fact still remains that the basement would be devoted to a purpose other than that of a private dwelling house.

Even if this viewpoint be found to be inconclusive upon final hearing and consideration, it would seem sufficiently compelling to require the entry at this time of a preliminary decree pending the final adjudication of the facts and law of the case.

It was argued by defendants that an injunction could be issued only against the use and not against the actual construction of the addition to the building. The restriction, however, provides not only that the building cannot be used for any purpose other than that of a private dwelling house, but that it cannot be altered for any other purpose, and, therefore, the alteration for an improper purpose is as much prohibited as the actual use for such improper purpose.

It was also argued by defendants that, since the basement as it now exists was used for a period of time as a doctor’s office, and now as a real estate office, there has been such laches or acquiescence on the part of the plaintiff that no such injunction should issue. This contention would seem to be sound as against the defendants, Benjamin Cobrin & Company, Inc., and Leon Cobrin, who occupy the basement as a real estate office. No mandatory injunction could issue on a preliminary hearing to oust them from such occupancy. The case is different, however, as to the defendant Rose, who is now proposing to build a substantial addition to the basement and to occupy it for a new, and,.as the court concludes, a prohibited purpose. Acquiescence in the violation of a restriction will not prevent insistence upon the enforcement of the restriction as against an additional or enlarged breach: Hohl v. Modell, 264 Pa. 516; Phillips v. Dunseith, 269 Pa. 251.

The court, therefore, enters the following

Decree.

And now, to wit, Aug. 2, 1930, hearing having been had upon the application for a preliminary injunction, it is ordered, adjudged and decreed that the defendant, Jacob N. Rose, his heirs and assigns, and their and each of their agents, servants and employees, be and they are hereby restrained and enjoined until final hearing, or until further order of the court, from constructing on the lot of ground at the southwesterly corner of 54th Street and Lebanon- Avenue, said premises being known as No. 5400 Lebanon Avenue, in the City of Philadelphia, any addition or alteration to the present structure thereon for the purpose of using or permitting to be used said alteration or addition for any purpose other than as a private dwelling house, and more particularly as a dentist’s office. The plaintiff to file a bond in the sum of $1000.


author: Ferguson, P. J.,

text:
    David Kaskey & Company v. Mackey, Mayor, et al.

      David iS. Mails, for plaintiff; James Francis Ryan, for defendants.
    June 9, 1930.
   Ferguson, P. J.,

Summary of pleadings.

The bill in brief complains that plaintiff is an auctioneer engaged in busi- ' ness in Philadelphia, and is the holder of a license for the term of one year from March 8, 1929, issued to him by the Commonwealth of Pennsylvania, upon the payment of a license fee of $500; that the Police Department of the City of Philadelphia has interfered with his business and threatened to have him arrested, if he persists in his occupation as an auctioneer, because he has failed to take out a license and to pay a license fee to the City of Philadelphia, as required by an ordinance passed June 8, 1926. An injunction is prayed for. The answer admits the essential facts and contends that the ordinance of council is a valid and enforceable enactment.

Findings of fact.

1. The plaintiff, David Kaskey, is a resident of the City of Philadelphia, engaged in the business of an auctioneer and has been engaged in such business for upwards of twenty years.

2. Plaintiff is the holder of a license to conduct the business of an auctioneer in the City of Philadelphia for the term of one year from March 8, 1929, for which he paid to the Commonwealth of Pennsylvania the sum of $500. He is likewise the holder of a similar license issued for the term of one year from March 8, 1930, for which he paid a license fee of $500 to the Commonwealth of Pennsylvania.

3. Efforts were made by police officers in the service of the City of Philadelphia to interfere with the conduct of plaintiff’s business, because he failed to take out a license under an ordinance passed June 3, 1926, requiring the payment of a license fee of $250.

4. As a consequence, and by arrangement with the city solicitor, it was agreed that the license fee claimed by the City of Philadelphia should be paid without prejudice to the plaintiff’s rights.

Discussion.

By the Act of April 9, 1859, P. L. 435, the legislature deals with the subject of auctioneers. Among other things, it provides for the amount which shall be paid for the privilege of conducting that business; fixes the method of determining license taxes and fees; requires the taking of an oath and the making of returns to the State Treasurer; provides penalties for violation of the act, and generally regulates the manner and method of carrying on the business.

By the Act of June 26, 1873, P. L. (1874) 332, it is provided that auctioneers shall be rated with merchandise brokers, and, in lieu of all commissions, theretofore directed to be paid by them, they are required to pay in the same manner as brokers a license tax similar to that paid by brokers, and no other. It also provides that no auctioneer’s license shall be issued for the City of Philadelphia for less than $500. The Act of 1873 is amended by the Act of May 5, 1921, P. L. 406. The amendment, so far as relates to the matter in controversy here, makes no change in the Act of 1873. It merely adds a proviso with reference to the requirements of a license tax for an auctioneer selling livestock or farm implements.

There is nothing in either the Act of 1873 or the Act of 1921 which indicates in the slightest degree an intention to amend or repeal the provisions of the Act of April 9, 1859. The only thing affected by the later acts is the amount which shall be paid as a license fee. We have, therefore, in the Act of 1859 a complete system regulating the licensing of auctioneers and the manner in which they shall conduct their business. The Council of the City of Philadelphia, on June 3, 1926, passed an ordinance which regulates the sale of merchandise at public auction, and provides for the licensing and bonding of persons making such sales. It calls for an application under oath, accompanied by affidavits of citizens certifying to the good character of the applicant, and granting to the director of public safety authority to require further evidence on the subject of character. It forbids untruthful statements or representations, the use of cappers and fraudulent or imitation bidders, the giving of premiums as incentives to bidders, and provides for the payment of a license fee of $250 per annum, with a surety bond in the sum of $15,000. It also provides for a penalty for violation of any of the provisions of the ordinance.

It was explained by the superintendent of police that the ordinance was passed because the police department had found that certain irresponsible and itinerant merchants would at times open places of business and conduct auction sales, and often employed cappers to mingle in the crowd to decoy the public, and other devices were used for the purpose of attracting people, and false bidders would be used at times so that goods would be sold which were not genuine and the public thereby victimized.

If we were called upon to comment upon this explanation for the passage of an ordinance, we would be obliged to say that simply because unlicensed people conduct auctions in the City of Philadelphia, with or without unlawful devices, is no reason why regularly licensed auctioneers who have paid their fees to the Commonwealth of Pennsylvania and who conduct their business in a lawful manner should be required to pay an additional license fee. It is not our function, however, to deal with the reasons which impelled the passage of an ordinance by City Council. It is sufficient to say that where the legislature passes an act of assembly providing for the payment of a license tax and also regulates the manner and conduct of that business, and provides in express words that the license tax paid to the Commonwealth shall be the only tax paid, it is beyond the power of the municipal authorities to pass any legislation dealing with the subject. We have examined the authorities which have been submitted by counsel in the case. It is true that a regulation of the municipality, in the exercise of its police power, not inconsistent with the regulation prescribed by the state, may be valid, but when the legislature enacts that an auctioneer shall pay a license tax of $500, and no other, there is no doubt that an ordinance imposing an additional tax is inconsistent with the statute. The Commonwealth authorizes a man to engage in a certain business in the City of Philadelphia after he pays a certain license fee. The municipality says, in effect, that he shall not do so unless he pays an additional license fee. There does not seem to be much room for argument. “A statute will override a conflicting municipal ordinance, other things being equal, whether it precedes or follows it in point of time. Ordinances which assume directly or indirectly to permit acts or occupations which the state prohibits, or to prohibit acts permitted by the state, are uniformly declared to be null and void. Municipal regulations must not conflict with state laws licensing occupations or businesses. A business or occupation licensed by the state may be regulated within reasonable limits, if the regulation does not impair the right under the state license, but it cannot entirely prohibit such licensed business or occupation:” 43 Corpus Juris, 217.

Conehisions of law.

1. The City of Philadelphia was without power to enact the Ordinance of June 3,1926.

2. The defendants, Harry A. Mackey, Mayor; Lemuel B. Schofield, Director of Public Safety, and William B. Mills, Superintendent of Police, should be enjoined from interfering with or molesting plaintiff in the carrying on of his business as an auctioneer.

3. The license fee of $250 exacted of plaintiff, which was paid by him under protest and without prejudice to his rights, should be returned to him by the police authorities.

4. The defendants should pay the costs.

Decree nisi.

And now, to wit, June 9,1930, it is ordered and decreed that the defendants, Harry A. Mackey, Mayor; Lemuel B. Schofield, Director of Public Safety, and William B. Mills, Superintendent of Police, and each of them, and their agents are enjoined from interfering with and preventing the plaintiff from carrying on his lawful business as an auctioneer, and that the $250 deposited by plaintiff be returned to him by the police authorities, and that defendants pay the costs.

The prothonotary will notify the parties or their counsel of the filing of the above adjudication, and that unless exceptions thereto be filed within ten days, the above decree nisi shall be taken as and for the final decree in the cause.


author: Alessandroni, J.,

text:
    Lumber and Millwork Co. of Philadelphia v. Bianchi et al.

      J. F. Martin, for plaintiff; Vincent A. Carroll, for defendants.
    July 18, 1930.
   Alessandroni, J.,

This case was submitted for the decision of the court on an agreed statement of facts. The stipulation of counsel recited that the plaintiff corporation was engaged in the lumber and millwork business in the City of Philadelphia and that John Bianchi, shortly prior to March 29, 1928, placed an order with the plaintiff for material in the sum of $271.44, stating that the purchase was for the firm of Bianchi Brothers, 13th and Reed Streets, and representing to the plaintiff that the firm consisted of himself and Joseph Bianchi. At that time John Bianchi presented a business card of Bianchi Brothers and gave credit references for the same. Plaintiff investigated the statements made and found that John and Joseph Bianchi were registered under the Fictitious Names Act as partners, trading under the name of Bianchi Brothers, and on March 29, 1928, delivered the material to Bianchi Brothers at Quakertown, Pa. As a matter of fact, the partnership had been dissolved on Dec. 15, 1925, but no notice of any kind of the dissolution was given until July 27, 1928, when the Fictitious Names record was changed to show a withdrawal from the partnership of John Bianchi, as of Dec. 15, 1925. The materials in question were purchased and used by John Bianchi on premises owned by him and without any authority to purchase in the name of Bianchi Brothers. This transaction was the first entered into between the respective parties. Bianchi Brothers were engaged in real estate and insurance business and the materials sold were to be used in a real estate operation.

The sole question at issue is whether the defendant, Joseph Bianchi, is estopped from setting up the defense that John Bianchi, at the time the goods in question were purchased, had no authority to act for the firm of Bianchi Brothers and was not a partner. The basis upon which this contention rests is the registration of the firm name of Bianchi Brothers under the Fictitious Names Act, which, at the time of the sale, showed that John Bianchi and Joseph Bianchi were partners, trading under the name of Bianchi Brothers. This fact was relied upon by the plaintiff in extending credit. There is also the additional factor that credit references for the firm had been given and were satisfactory, although this fact is not controlling, inasmuch as it furnished no indication of the personnel of the firm.

The Fictitious Names Act of June 28, 1917, P. L. 645, as amended by the Act of June 26, 19191, P. L. 542, provides that all firms using a fictitious name must register the name of the firm and the parties trading under that name with the Secretary of the Commonwealth and the prothonotary of the county in which its business is to be transacted. The Act of 1919 provides “that any person or persons conducting or carrying on any business in this Commonwealth . . . shall upon the dissolution of any such business or upon his or their withdrawal from such business have the right to require the Secretary of the Commonwealth and the prothonotary in whose office such certificate was filed to cancel such certificate, if the business has been dissolved, or to make a notation on the margin of the book in which such certificate was entered to the effect that he or they are no longer connected with or interested in such business, if he or they have withdrawn from the business.”

The Fictitious Names Act has often been construed by our appellate courts, and in Lamb v. Condon, 276 Pa. 544, the purpose of the act is stated as follows : “The purpose of this statute was to protect those who might deal with such parties. This thought is well expressed by Judge Henderson, in Engle v. Insurance Co., 75 Pa. Superior Ct. 396, when he says: ‘The purpose of the statute is obvious. It was intended to protect persons giving credit in reliance on the assumed or fictitious name, and to definitely establish the identity of the individuals owning the business, for the information of those who might have dealings with the concern.’ ”

There is no question but that the record made in compliance with the Fictitious Names Act was made on behalf of the partnership. Under the Act of 1919, when a firm is dissolved or one partner withdraws, an amendment can be made to the record so as to protect all persons interested therein. This was not done in this case, and as a result the plaintiff, relying upon the public record, extended credit to the firm of Bianchi Brothers. The record clearly indicated that John Bianchi was a partner and the selling of lumber for real estate operations was clearly within the scope of the partnership business. Joseph Bianehi neglected to have the record amended to show the true status of the partnership, and as a result the plaintiff was misled. The purpose of the act is to protect those extending credit to a firm conducted under a fictitious name, and we, therefore, are of the opinion that Joseph Bianehi is now estopped from denying what the record stated.

Where one of two innocent parties must suffer loss because of the act of a third, he who clothed the wrongdoer with the power to injure must bear the loss.

The defendant has contended that, inasmuch as the firm was not obligated to register under the Fictitious Names Act, as is indicated in the recent case of Merion Township School District v. Evans, 295 Pa. 280, 285, the effect of the registration is a nullity. Regardless of whether the defendants were required to register, under the act or not, the fact remains that they elected to register their firm name under the act, and are, therefore, bound by it.

And now, to wit, July 18, 1930, judgment is entered in favor of the plaintiff against Joseph Bianehi and John Bianehi, individually and trading as Bianehi Brothers.


text:
    Kane’s Estate.

      Geary & Rankin and Ledward & Hinkson, for proponents.

      Hannum, Hunter, Hcmnum & Hodge, for contestants.
    April 21, 1930.
   The testatrix, Eliza Leiper Kane, died April 29, 1929. A holographic will, dated June 1, 1925, was duly probated on Aug. 10, 1929’, and letters testamentary were granted thereon. Thereafter, a will dated Jan. 30, 1929, and attested by two subscribing witnesses, was presented for probate. A hearing was had and the probate of the earlier will was opened by the court, so as to allow the offer of the later instrument for probate. Objection being made to this will, on the contestants’ application the court assumed jurisdiction of the dispute. A petition was then presented by the contestants, averring that the facts as to the authenticity of the disputed instrument dated Jan. 30, 1929, could not be fully and satisfactorily ascertained without taking apart the document and making physical and chemical tests thereof. After hearing on petition and answer, the following order was entered:

Per Curiam,

Leave is hereby granted to Webster A.

Melcher, of No. 1124 Stephen Girard Building, Philadelphia, Pa., expert in documentary investigation, to make all chemical tests and examinations of the papers and inks and writings used for and in connection with the original document purporting to be the will of Eliza Leiper Kane, dated Jan. 30, 1929', which the said Webster A. Melcher shall decide and conclude are required to determine whether the said alleged will so produced by the said E. Irene Davis is genuine or spurious, and for this purpose the said Webster A. Melcher is authorized to take said will apart.

Before the said will is delivered to the said Webster A. Melcher for the purpose of making such tests and examinations, it shall, under the supervision of an officer of this court, be photographed, and photostats thereof shall be taken and copies thereof filed as part of the record in this case; privilege is also given to the attorneys of the parties in interest to receive photostatic copies made of said original document for the use of their clients.

When the tests have been completed the said Webster A. Melcher shall return said original document to the Clerk of the Orphans’ Court, Delaware County, Pennsylvania.


author: Valentine, J.,

text:
    Ratto v. Pennsylvania Coal Company.

      Francesco Di Film, attorney in fact, for plaintiff.

      H. J. Connolly, for defendant.
    Jan. 2, 1930.
   Valentine, J.,

Aniello DiFluri, an employee of the defendant company, sustained a broken back as the result of an accident in the course of his employment on Oct. 19, 1917. A compensation agreement was duly entered into between the injured employee and his employer and total disability compensation paid thereunder to Aug. 15, 1919, in the sum of $931.50. Di Fluri died Sept. 1, 1919, as a result of said injuries, and, on May 4, 1920, the defendant paid to Frank or Francesco Di Fluri the balance due under said compensation agreement from Aug. 15, 1919, to Sept. 1, 1919, the date of Di Fluri’s death.

On Jan. 20, 1921, a claim petition was filed which purported to have been signed and sworn to by the widow and children of the decedent and which contained a note that “dependents are represented by Frank Di Fluri in care of N. Ciotola, 13 E. Diamond street, Hazleton, Pa.” To this petition defendant filed its answer, averring, inter alia:

“The defendant further questions the legality of this petition, as it does not bear the signature of any one of the dependents, although purporting to be sworn to before a notary public. The statement that the alleged dependents are represented by Frank Di Fluri is insufficient.

“That there is no proof of the existence of any dependents of Aniello Di Fluri, deceased, and that the present petition is insufficient to establish a claim or any right to compensation in behalf of the alleged dependents.” Apparently, nothing further was done until April 26, 1928, when letters rogatory were issued, and defendant, asserting that its action was “without prejudice to its right to raise any and all legal and proper objections to the proceedings,” propounded cross-interrogatories.

At the hearing before the referee on May 8, 1929, the letters rogatory and the answers to the interrogatories were offered in evidence, whereupon the defendant objected to their admission and “to any and all proceedings under the petition upon which these proceedings are based, for the reason that the petition in the first place is irregular in that it was not filed by any one in authority to file it for any dependent or alleged dependent, or any one who might be entitled to compensation, because of the death of decedent,” and, “furthermore, the petition was filed after the time required for the filing of such petition by the Workmen’s Compensation Act, and is, therefore, barred.” On June 20, 1929, the referee disallowed compensation on the ground that the claim petition was filed more than one year subsequent to the death of the employee, and on appeal by claimant, the Workmen’s Compensation Board affirmed the action of the referee, whereupon an appeal to this court was taken by “Francesco Di Fluri, attorney in fact, and Armando Salatti, Royal Italian vice-consul, in charge of the Royal Italian Consulate General, legal and official representative of the dependents of Aniello Di Fluri, deceased.” The claim petition was not amended nor was there any formal intervention by the Royal Italian Consul, but we will treat the appeal as being in proper form, as the referee found that the widow had constituted and appointed “Francesco Di Fluri as her attorney in fact with full power to represent her in all matters whatsoever,” and the record contains a power of attorney executed by her on June 16, 1920.

Complaint is now made that the disallowance of compensation was improper in that defendant had not raised the defense of the statute of limitations in its answer, and that by filing cross-interrogatories it became estopped from invoking the defense of the statute.

Did the defendant properly avail itself of the defense of the statute of limitations? The answer did not aver that the petition had been filed too late and that the claim was barred by the statute. The compensation act is silent as to the manner in which such defense should be raised, but section 315 of the act provides:

“In cases of death all claims for compensation shall he forever barred unless within one year after the death . . . one of the parties shall have filed a petition as provided in article four hereof.”

The manner in which this defense should be raised was recently considered by Judge Coughlin in the case of Callahan v. Lehigh & Wilkes-Barre Coal Co., No. 2056, October Term, 1928, in which he well said:

“It has been held as to the statute of limitations generally, that it is a personal privilege which will avail a defendant as a defense if the defendant sees fit to raise it. It is not a defense absolute of which the court will take judicial notice: Barclay v. Barclay, 206 Pa. 307 (1903). It may, therefore, be waived, and under certain circumstances failure to plead it will constitute a waiver.

“Subsequent to the Act of May 25, 1887, P. L. 271, failure to plead the statute in an action of trespass did not prevent it being raised, because the Act of 1887 provided that the only plea in trespass should be ‘not guilty.’ The statute, therefore, did not have to be pleaded, nor would failure to do so waive it: Martin v. Pittsburg Railways Co., 227 Pa. 18 (1910). Although not required to be specifically pleaded in trespass, the defense of the statute had to be raised as such at the trial and appear of record: Martin v. Pittsburg Railways Company, supra.

“In assumpsit, the Act of 1887 required the bar of the statute of limitations to be pleaded, and if not, there could be no such defense raised: Barclay v. Barclay, supra; Carter v. Vandegrift, 74 Pa. Superior Ct. 26 (1920).

“The decisions supporting this principle have been followed to the same effect in reference to the Practice Act of 1915, although there may be some doubt as to their authority in trespass under section 13 of the Act of 1915 when the bar of the statute of limitations is not pleaded and then raised at the trial. See Hartig v. American Ice Co. et al., 290 Pa. 21, 35, and cases cited therein.”

In the Callahan case the defendant made no effort to raise the defense of the bar of the statute of limitations until after the testimony had been concluded and the case fully tried and then attempted to do so by communicating with the referee by letter. This was held to have been insufficient, in which ruling we fully concur. • In the present case, as in the Callahan case, the answer made no mention of the bar of the statute; but the defendant in filing cross-interrogatories did so “without prejudice to its right to raise any or all legal and proper objections to the proceedings.” The claimants made no objection to the defendant submitting cross-interrogatories in such form, and while the letters rogatory were not issued until April 26, 1928, eight and one-half years after decedent’s death, and the hearing before the referee not held until May, 1929, the defendant was not responsible for the delay, and when the letters rogatory and interrogatories were offered in evidence, promptly objected to the same on the ground that “the petition was filed after the time required for the filing of such petition by the Workmen’s Compensation Act,” and was, therefore, barred. This objection was made before any testimony had been taken and before the trial of the case had been entered upon, and we are of the opinion that the defendant was within its right in urging the bar of the statute of limitations at such time; nor can we find in defendant’s conduct anything that may properly be regarded as a waiver of the right to urge this defense.

The appeal from the action of the Workmen’s Compensation Board is dismissed and the action of the board affirmed.

Prom Prank P. Slattery, Wilkes-Barre, Pa.


author: Fox, J.,

text:
    Commonwealth v. Safe Deposit Bank and Trust Company.

      Paul C. Wagner, Deputy Attorney-General; Harold D. Saylor, Deputy Attorney-General, and Cyrus E. Woods, Attorney-General, for plaintiff.

      Hazlet, Gardner & Gannon, for defendant.
    Feb. 21, 1930.
   Fox, J.,

The Commonwealth is asking for a decree of ouster in this case, to which the defendant makes no serious objection. There is a slight controversy over the form of decree the court should make and also the question of costs.

The facts agreed upon are that the Safe Deposit Bank and Trust Company, defendant above named, was merged with the National Bank of Tarentum under the provisions of the laws of 1918, chapter 209, of the laws of the United States, as amended by the Act of Feb. 25, 1927, chapter 191, and that the defendant company was consolidated with the National Bank of Tarentum under the charter of the latter; that the consolidated body thereupon became known as the First National Bank and Trust Company, and that the defendant company has not exercised its corporate rights and privileges since the date of the merger and consolidation, which date was June 1, 1927.

The proceeding is brought under the Act of June 15, 1923, P. L. 809, as amended by the Act of May 5, 1927, P. L. 762. Section 17, inter alia, provides: “When any corporation under the supervision of the department . . . (c) has failed to exercise its corporate privileges for two years, such corporation shall be returned by the secretary to the Attorney-General, who shall proceed by quo warranto against such corporation, to the end that it may be ousted from its charter rights, and its corporation privileges may be declared null and void.”

The First National Bank and Trust Company mentioned above is not by the consolidation a newly created corporation of the Federal Government, but, under authority of the United States laws, is an enlargement of the said national corporation. As stated by counsel for defendant in the agreement of facts, all of the assets of the defendant company were transferred to the National Bank and Trust Company. The National Bank and Trust Company did not take over the charter of the defendant company. It could not do this unless by and with the consent of the State of Pennsylvania, for which we have no statutory authority. The charter was not surrendered by the defendant company upon this consolidation and no move was made by the defendant company to have the charter dissolved. The period of two years after the consolidation has more than passed in which time defendant company did no business. In accordance with the provisions of section 17 of the Act of 1923, supra,, the Secretary of Banking returned to the Attorney-General that information and under it the latter proceeded by this writ against the defendant, to the end that it may be ousted from its charter rights and its corporation privileges be declared null and void.

The defendant corporation could have, after the consolidation, gone into the proper court, surrendered its charter and had the corporation dissolved under the provisions of section 1 of the Act of April 9, 1856, P. L. 293, or it could do as it did, not use its charter for over two years and have the same terminated by a writ of quo warranto. If it had done the former, these costs would not have been incurred.

Wherefore, we are of the opinion that judgment of ouster should be decreed and defendant pay the costs.

And now, Peb. 21, 1930, upon due consideration, it is hereby ordered, adjudged and decreed that the Safe Deposit Bank and Trust Company, defendant above named, is hereby ousted from its charter rights, and its corporation privileges are declared null and void, and that the defendant pay the costs of this proceeding.

Prom Homer L. Kreider, Harrisburg, Pa.


author: Saylor, Dep. Att’y-Gen.,

text:
    Suretyship of Banks and Trust Companies.
    July 1, 1930.
   Saylor, Dep. Att’y-Gen.,

We have your request for an opinion on the right of a trust company to act as surety on a tax collector’s bond.

The matter of trust companies and banks acting as sureties on bonds in general was discussed in the opinion of this department to your department of Sept. 26, 1924 (Banks and Trust Companies as Sureties, 5 D. & C. 372), in which the Act of May 16, 1923, P. L. 248, was construed. While the specific matter covered by that opinion was the question whether a bank could act as surety on bonds of contractors for the faithful performance of their contracts, the general conclusion was reached that trust companies and banks could not become sureties on bonds, except as provided in section 2 of the Act of 1923. This section reads as follows:

“No bank shall become surety on any bonds, except that any bank, which has qualified itself under the laws of this Commonwealth to engage in a fiduciary business, may become sole surety in any case where, by law, one or more sureties are or may be required for the faithful performance of the duties of ■ any assignee, receiver, guardian, committee, executor, administrator, trustee, or other fiduciary, and may also become sole surety on any writ of error or appeal, or in any proceeding instituted in any court of this Commonwealth in which security is or may be required: Provided, That nothing in this act shall be construed to dispense with the approval of any court or officer now or hereafter required by law to approve such security.”

Section 1 of this act states that the word “bank,” as used in the act, means “any state bank, incorporated banking company, trust company, savings bank, or unincorporated bank, heretofore or hereafter organized.”

The question arises whether the words “other fiduciary” in section 2 include a tax collector. The right of a “bank” to act as surety for fiduciaries would appear to be limited by the Act of 1923 to those cases involving what are called technical trusts, such as are executed by a bank or trust company “which has qualified itself under the laws of this Commonwealth to engage in a fiduciary business.”

Section 1, clause 1, of the Act of May 9, 1889, P. L. 159, which gives title companies of the Commonwealth various powers and rights — by assuming which, upon compliance with certain requisites as prescribed by the act, such companies become trust companies in the general sense of the word — includes the following:

“To act as assignees, receivers, guardians, executors, administrators, and to execute trusts of every description not inconsistent with the laws of this State or of the United States.”

Trust companies exercising such powers come within the jurisdiction of the various Orphans’ Courts of the Commonwealth and are subject to the provisions of the Act of June 7, 1917, P. L. 447, known as the Fiduciaries Act of 1917. Section 1 defines “fiduciary,” as used in the act, as including “executors, administrators, guardians and trustees, whether domiciliary or ancillary, subject to the jurisdiction of the orphans’ court of any county of this Commonwealth.”

It would, accordingly, appear that a fiduciary, within the meaning of the Act of 1923, is the type of individual or institution known in common parlance and defined in the Century Dictionary and Encyclopaedia as “one who holds a thing in trust; a trustee.”

To give the term, as used in the Act of 1923, a wider meaning would result in an expansion of the field far beyond any reasonable limits. To be sure, there are persons and institutions which may be and are at times considered to be fiduciaries, in that they hold funds not their own for another. Many individuals in private and public capacity at some time in the course of the performance of their duties are fiduciaries in the broadest sense. A street car conductor holding fares, a theatre box office attendant receiving payment for tickets sold, a milk wagon driver collecting cash on his rounds from customer to customer; all of these individuals are fiduciaries as long as they hold what is not theirs for delivery at the proper time to their employers, the true owners. The world, however, knows them, not as “fiduciaries,” but as conductors, box office agents and milk wagon drivers, which is their true and primary capacity. And so a tax collector is primarily a collector of taxes and only secondarily a fiduciary.

Merely because a person in temporarily holding funds he has collected for another may be in a broad sense a fiduciary is no justification for a trust company to become surety for him. That might involve liability for the faithful performance of his office above and beyond his duties as a holder of funds. Were a trust company surety for a tax collector, it would be liable for his acts as a public officer while engaged in collecting taxes before he became a “fiduciary” even in the broadest use of that term. It cannot be seriously considered that the legislature, in passing the Act of 1923, had any intention of giving a bank such power.

It is, therefore, our conclusion that the words “other fiduciary,” as used in the Act of May 16, 1923, do not include a tax collector. In- so deciding, we refer you to a previous interpretation of this act with reference to notaries public and county officers, as set forth in the opinion of this department to the Secretary of the Commonwealth dated Oct. 31, 1923 (Banks as Sureties, 4 D. & C. 423). Therein it is stated that the Act of 1923 limits the authority of trust and banking companies to serving as sureties for those generally classed as fiduciaries and on bonds on appeal and for court where security is required. The opinion further states that what constitutes a fiduciary relationship is often the subject of controversy, but it seems generally to be limited to technical trustees, and, therefore, does not include notaries public or county officers, both of which are classified as public officers and not as fiduciaries, at least if the word is used as applying to technical trustees. The same conclusion must be reached with reference to tax collectors, who are unquestionably public officers.

You are advised that a tax collector is not a fiduciary and cannot be so considered in the sense in which that word is used in, the Act of May 16, 1923, and that, therefore, a trust company does not have the right to act as surety on his bond.

Prom C. P. Addams, Harrisburg, Pa.


author: Jones, J.,

text:
    Malewski v. U-Drive-It Company, Inc.

      James McQuade, for plaintiff; Reynolds & Reynolds, for defendant.
    Jan. 11, 1930.
   Jones, J.,

Summons in trespass issued May 5, 1927, appearance entered for defendant, and a petition for non pros, was filed upon the ground that more than two years have elapsed since the issuing of the summons, with no statement filed and no effort to bring the case to trial, and that the delay was unreasonable, unnecessary and prejudicial to the defendant. An answer by plaintiff avers that the delay was due to negotiations for settlement by an agent of the defendant company, whereby plaintiff was led to believe that the case might be settled without a trial, and stipulating that an offer of $150 had been made in full settlement, which offer was rejected by plaintiff’s attorney.

This answer, in the absence of any denial thereof, fully overcomes the presumption of abandonment of the case. Accordingly, rule discharged.

Prom Prank P. Slattery, Wilkes-Barre, Pa.


author: Henderson, J.,

text:
    Smith’s Estate.

      Eric A. McCouch, for exceptions.

      MaeCoy, Evans, Hutchinson & Lewis, contra.
    Oct. 28, 1930.
   Henderson, J.,

A careful examination of the record and of the able and very helpful briefs presented by both sides, leads us to conclude that the Auditing Judge was right and for the reasons given by him.

It was vigorously urged that the power of consumption given to this widow might result in the gift to the after-born child proving illusory. Randall v. Dunlap, 218 Pa. 210, rules this case. Under Mrs. Randall’s will, her estate, with the exception of a small provision for an aunt, was left absolutely to her husband, who survived her. In the event that he did not survive her, she directed that her estate “shall be divided in equal shares absolutely amongst my children surviving me. . . .”

She further directed: “Lastly: I declare this to be and contain my last will and testament, and that after-born children are herein provided for.”

This case is much stronger than the instant one, in that under the will the after-born child took nothing.

Subsequent to the decision in Randall v. Dunlap, the executor’s account in the Randall estate came before this court for audit and adjudication, and the aforesaid ruling was here followed, the former appeal having been taken from a ruling of the Court of Common Pleas in a suit to recover the purchase money under a contract for the sale of real estate.

The exceptions are dismissed and the adjudication is confirmed absolutely.


author: Barnett, P. J.,

text:
    Commonwealth v. Irvine.

      Theodore Rosen, Assistant District Attorney, for Commonwealth.

      Bruce A. Metzger, for defendant.
    Oct. 31, 1930.
   Barnett, P. J.,

41st judicial district, specially presiding, In the trial of an indictment for perjury, the evidence for the Commonwealth consisted of a transcript of the testimony of the defendant before Court of Common Pleas No. 5 upon his oral examination, under oath, to ascertain what property he owned out of which a judgment against him might be satisfied. In that proceeding he was asked what had become of a valuable stick pin and watch he was known to have possessed. He answered that he had been held up by bandits and the jewelry stolen from him. Questioned as to certain pawn tickets for the same articles, he replied that the tickets had been mailed to him by the robbers. A question from the court whether he had notified the police of the robbery apparently made him realize the difficulty of his position, and he then admitted that his story of the hold-up was untrue and that he himself had pawned the jewelry.

When the Commonwealth rested its case, the defendant, without offering any testimony, demurred to the evidence.

The record presents an extreme case for the application of the rule that false testimony, if corrected by the witness before the termination of the proceeding in which it is uttered, is not punishable as perjury. In the first part of the defendant’s testimony there is no possibility of mistake or misunderstanding, of mere exaggeration or incomplete statement of the truth. In the phrase of Sir Edward Coke, he swore “willfully, absolutely and falsely in a matter material to the issue or point in question.” His later admission of the truth was not the result of a voluntary repentance, but was forced from him by the manifest impossibility of successful persistence in an incredible tale. The rule, however, which is followed almost without exception is not concerned with the witness’s reason for changing his testimony. Its purpose is to leave open to him the opportunity, for any reason, to turn to the truth without fear that by so doing he will expose himself to the penalties of perjury. This purpose is well stated in the leading case of People v. Gillette, 126 N. Y. App. Div. 665: “Even if it be assumed that the answers were false and made with the intention of misleading or deceiving, an indictment for perjury could not be predicated thereon, inasmuch as immediately thereafter he fully explained the nature of the account and the source from which the fund came. A judicial investigation or trial has for its sole object the ascertainment of the truth that justice may be done. It holds out every inducement to a witness to tell the truth by inflicting severe penalties upon those who do not. This inducement would be destroyed if a witness could not correct a false statement except by running the risk of being indicted and convicted for perjury.” In People v. Brill, 100 N. Y. Misc. 92, 165 N. Y. Supp. 65, it is said: “The law encourages the correction of erroneous and even intentionally false statements on the part of a witness and perjury will not be predicated upon such statements when the witness, before the submission of the case, fully corrects his testimony.” To the same effect are the cases of Brannen v. State, 94 Fla. 656, citing the foregoing cases, and also Com. v. Shooshanian, 96 N. E. Repr. 70, 24 Ann. Cas. 1073; Bishop on Criminal Law (9th ed.), § 1044A; Henry v. Hamilton, 7 Blackford Ind. Rep. 506. In 48 Corpus Juris, page 828, § 22, the rule is stated as follows: “Perjury will not be predicated upon false statements corrected before submission of the case in which made, especially where the statement as originally made wás more incomplete than literally untrue. Even a bona, fide but incompleted attempt to correct false testimony may show absence of the criminal intent essential to perjury." The English authorities are to the like effect. See Roy v. Carr, 1 Sid. 418; Edwards v. M’Leay, 2 Ves. & B. 259; Rex v. Jones, Peake, 37. There seems to be no Pennsylvania decision directly in point, the nearest, perhaps, being the case of Com. v. Latsch, 11 Lehigh Co. L. J. 457, which holds that “a conviction of perjury cannot be sustained merely on the contradictory sworn statements of the defendant in the same record.” A paragraph on page 269 of 21 Ruling Case Law, which reads, “Nor does the fact that the witness in the same trial on cross or further examination admitted the truthfulness of what he had previously falsely denied obviate the charge of perjury,” in connection with which is cited the case of Martin v. Miller, 4 Mo. 47, seems to be inconsistent with the great weight of authority and with a wise policy of the law.

And now, Oct. 31, 1930, the defendant’s demurrer to the evidence is sustained and the defendant is discharged.