author: Alessandroni, J.,

text:
    Allen et al. v. Sarshik et al.

      Fry singer Evans, for plaintiffs; Harry Shapiro, for defendants.
    April 4, 1930.
   Alessandroni, J.,

— This is a rule to show cause why an attachment should not issue against Morris A. Sarshik for his failure and •refusal to comply with an order of this court requiring him to pay to the petitioners the sum of $7759.63.

The petition recites in brief a history of proceedings, final decree of this court, an excerpt from the opinion of the Supreme Court, and the order affirming the judgment of the court below dismissing the appeal. It also appears therein that petitioners’ repeated requests for payment by the respondent have been ignored. The answer admits the essential averments of the petition, but the respondent seeks to justify his refusal because of his alleged inability to pay, and also upon the ground that an attachment for contempt may not issue where the decree is for payment of money only, pursuant to contract, express or implied. In support of this contention, he has cited a number of authorities which would be pertinent if suited to the facts of this case.

The Act of July 12, 1842, P. L. 339, abolishing imprisonment for debt, does not, in our opinion, exempt the respondent from the issuance of the process prayed for. '

Much has been made by the respondent of the argument that the language and the spirit of this act. is applicable to him, inasmuch as the money he refuses to pay was due on “a judgment or decree founded upon contract, or due upon a contract express or implied, or for the recovery of any damages, or for the performance of any contract.” While the agreement between Pennypacker as straw man and the petitioners was a contract, respondent, nevertheless, received the money to use for a specific purpose under an independent covenant. He has been declared by this and the Supreme Court to be a trustee of that fund. With his status thus determined, it follows logically that he must be dealt with in accordance with the law applicable to such persons. It will not do to force a construction that will relieve him from the performance of a duty imposed upon him by law by ignoring his fiduciary character and making him simply a party to a contract. Sarshik, under the cloak of Pennypacker as straw man, violating the good faith of the petitioners, worked himself into a position of trust and confidence that enabled him to get possession of moneys that never would have been entrusted to him otherwise. It is clear that he misapplied these moneys. Indeed, there is some ground for believing that the subtle scheme adopted by him was intended to accomplish just this purpose. If Pennypacker had been the recipient of the fund instead of Sarshik, the status of the former might conceivably fall within the ruling of Ross v. Dever, 298 Pa. 146, but here Sarshik was the third party agreed upon by the vendor and vendee as one to be trusted to employ the moneys received by him in the protection of the interests of the petitioners. He was a trustee in the strict sense of the word. We believe that the facts of this case fall within the intendment of the language of Justice Strong in Chew’s Appeal, 44 Pa. 247, wherein he stated: “The legislature may well be supposed to have used the word contract in its common signification, and not to have had in view a breach of trust, always considered a greater wrong than a mere breach of promise to pay. But if this is not so, there is an exception in the act which makes it clear that it was not designed to exempt trustees from liability to attachment. It is of arrests ‘in proceedings as for contempt to enforce civil remedies.’ Such arrests are expressly declared not to be within the operation of the act, or prohibited by it.”

We are, therefore, of the opinion that this rule should be made absolute.

And now, to wit, April 4, 1930, let attachment issue against Morris A. Sarshik for his failure to comply with the terms of the final decree entered in this case on Oct. 25, 1929.


source: Caselaw Access Project

author: Per Curiam,

license: Public Domain

text:
    Swint’s Estate.

      Arthur E. Weil, for exceptions.

      William T. Aldrich and Samson B. Bernstein, contra.
    Feb. 19, 1930.
   Per Curiam,

— We have carefully reviewed the adjudication and the exceptions thereto and find that the learned Auditing Judge’s findings of fact and conclusions of law are in complete harmony with our understanding of the law, and, therefore, should not be disturbed.

The exceptions are dismissed and the adjudication is confirmed absolutely.

Henderson, J., did not sit.


author: Biddle, P. J.,

text:
    Strohm’s Estate.

      W. B. Johnston, for petitioner; J. P. McKeehan, for respondent.
    Jan. 14, 1930.
   Biddle, P. J.,

On Jan. 21, 1929, Clarence O. Strohm, administrator of the estate of Margaret Strohm, deceased, presented a petition, setting out, inter alia, that the decedent, a resident of this county, died in October, 1'928, intestate, and that letters of administration on her estate were duly granted to him by the register of wills of this county; that his intestate had, at the time of her death, an account with the Market Street Title and Trust Company, a Pennsylvania corporation, whose principal place of business is in the City of Philadelphia, in which account, at the time of her death, she had a balance of some $3500; that the petitioner, having furnished to said title anct trust company a certificate showing his authority as administrator, had demanded payment of the said balance to him, and that the said title and trust company had refused to make such payment, alleging that the said funds were held by the decedent in trust, and that it was the intention of the Market Street Title and Trust Company to make payment thereof to the persons beneficially interested. He prayed for a citation, directed to the Market Street Title and Trust Company, to show cause why it should not be required to pay the entire fund in its hands to him as administrator of the said decedent. And on said date a citation was awarded as prayed for, and thereafter the citation was served upon the comptroller of the said title and trust company. Some time thereafter, the title and trust company presented a petition setting out said facts, setting up new matter which it averred justified its refusal to make the payment to the administrator of the decedent, and asked for a rule to show cause why service of the citation should not be set aside. A rule to show cause was granted as prayed for, to which an answer was filed, and after argument thereon the court dismissed the rule, holding that the petition as presented raised merely the question of the jurisdiction of the person of the respondent, and that no valid ground for holding the service insufficient had been advanced. The dismissal, however, was expressly stated to be without prejudice to the right of the Market Street Title and Trust Company thereafter to raise the question of jurisdiction of the subject-matter if it desired to do so.

On July 9, 1929, the title and trust company presented its petition, setting out the presentation of the original petition by C. O. Strohm, administrator, the granting of the citation upon the title and trust company, the service thereof, and averring that the title and trust company was advised that this court had no jurisdiction of the subject-matter; and prayed the court that a rule should be entered on C. O. Strohm, administrator, to show cause why the proceeding instituted by him should not be dismissed for want of jurisdiction. And on the same date a rule to show cause was granted as prayed for, to which an answer was filed by the administrator, which set out the former proceeding and the disposition thereof made by this court, averring that the appearance for the title and trust company constituted a general appearance, so that the court had jurisdiction of it'; averring that the court had jurisdiction of the subject-matter, and praying the court to discharge the pending rule. The matter comes before us in this shape for disposition.

When the former rule was before us we did not pass upon the question of this court’s jurisdiction over the subject-matter, but we intimated that we had grave doubt of this, and the decree that then was made was drawn in order to permit the raising of this question in the proper manner; and, as we view it, that is the only question here involved, and all that we are now to consider are the facts set out in the original petition of the administrator. Briefly, these amount to an averment that the decedent had on deposit with the title and trust company at the time of her death the sum of approximately $3500; that a demand for this had been made by the administrator, and that payment had been refused by the title and trust company; and the petition of the title and trust company to dismiss the proceeding is an admission of the existence of all of these facts, coupled with the averment that this does not give the court jurisdiction over it in the present proceeding. As is well and clearly set out by the learned counsel for the administrator in the brief which he has submitted in the present proceeding, “the last petition does not even refer to the fact that the petitioner had filed an earlier petition, much less does it embody the facts alleged in such petition by reference. This court may accordingly consider its jurisdiction as if the form of the deposit had been in the name of Margaret Strohm, individually, and on the assumption that no one other than her personal representative has any standing to claim or has made any claim to the fund. It must be assumed to belong to the estate of Margaret Strohm.” With this summing up of the effect of the pleadings we find ourselves in entire accord. But we cannot agree with the succeeding statement in the brief that “Once this assumption, the jurisdiction of this court is clear.” On the contrary, we think that once this is assumed, the fact that this court has no jurisdiction of the subject-matter becomes perfectly clear, because then it appears that the whole proceeding is an effort by a creditor, who happens to be the administrator of the decedent, to recover from a debtor the amount owing by that debtor to the decedent in her lifetime, Under the facts as summed up by the learned counsel for the administrator, there is no dispute of fact whatever, and as to the existence of a debt and as to the right of the administrator to recoven there is no dispute whatever. The only dispute is whether the recovery of an admitted debt due to a decedent should be attempted in the first instance in the Orphans’ Court or Court of Common Pleas; and, as we understand the rulings of the appellate court, they are uniform in holding that jurisdiction is in the Common Pleas and not in the Orphans’ Court: Appeal of the Harrisburg National Bank, 84 Pa. 380; Cutler’s Estate, 225 Pa. 167; Cutter’s Estate, 286 Pa. 505.

We think that none of the cases cited in the brief submitted by the learned counsel for the administrator are really in any manner in conflict with this view; but an examination of them will show that, in every instance, the effort was not merely to recover from a debtor the amount of his indebtedness to the decedent, but to have determined the right of the administrator to evidence of indebtedness or to establish a condition upon which it might thereafter endeavor to recover the amount of the debt in the proper forum, to wit, the Court of Common Pleas. Such a distinction clearly appears, we think, in practically all of the cases cited.

While it is not at all a controlling element, certainly the sweeping change in procedure that would result from here sustaining the contention of the administrator is an element to be considered in passing upon the question before us. The relationship between the decedent and the title and trust company was that of debtor and creditor. According to the averments of the administrator’s petition, the title and trust company is a corporation having its principal place of business in the City of Philadelphia; it is not in the County of Cumberland; there is no averment that any property of the title and trust company is in this county nor that any portion of its business is carried on here; and, in the absence of such facts, ordinarily that company could only be sued in Philadelphia County: Park Bros. & Co. v. Oil City Boiler Works, 204 Pa. 453.

If by a proceeding of this kind in the Orphans’ Court it could be compelled to come into Cumberland County and have all disputed questions of fact between it and the administrator passed upon in the Court of Common Pleas of this county, it is manifest that it would be subject to very considerable additional expense and inconvenience, while the proceeding would be equally convenient for the administrator; and one might easily imagine a case where a decedent left an estate consisting of promissory notes against debtors situated in the other sixty-six counties of the State, all of whom might by a proceeding of this sort be compelled, at the option of the administrator, to come into this county to have their disputes passed upon instead of being allowed t.o stay in their own domicile and having the administrator start whatever actions were necessary against them in the counties of their residence. We cannot think that the Legislature could have intended such a sweeping change in procedure as this by the codification of the laws relating to fiduciaries, even if some additional expressions and powers appear in the codification which did not exist before. But, as we have said, while this is an element certainly entitled to consideration, it is not the controlling element, which, in our opinion, is that where, as here, the only matter involved is the question of the recovery from a debtor by the representative of the estate, the proper forum is the Court of Common Pleas and not the Orphans’ Court.

And now, Jan. 14, 1&30, the rule to show cause why the pending proceeding should not be dismissed is made absolute, at the cost of the Estate of Margaret Strohm, deceased.

From Francis B. Sellers, Carlisle, Pa.


author: Schnader, Special Dep. Att’y-Gen.,

text:
    Real Estate Brokers’ Licenses.
    Jan. 2, 1930.
   Schnader, Special Dep. Att’y-Gen.,

We have your request to be advised upon a number of questions which have arisen in the administration of the Act of May 1, 1929, P. L. 1216, known as the Real Estate Brokers License Act of 1929.

In view of the large number of your questions, we shall answer them as we state them.

1. Does an auctioneer who occasionally sells real estate, as an auctioneer, require a broker’s license?

Auctioneers must be licensed under the Act of May 6, 1921, P. L. 406. Having been thus licensed, they may, in our opinion, sell at auction property of any character without any further license. This includes real estate as well as personal property.

The Real Estate Brokers’ License Act does not specifically mention auctioneers, and, in our judgment, they do not come within the definition of “real estate brokers” contained in section 2 (a) of, the act, if their transactions in connection with real estate are confined to sales at auction. If, however, they sell real estate or offer it for sale otherwise than at auction, they come within the purview of the act.

2. Does a person who is an officer in several real estate corporations require a separate broker’s license for each organization?

The issuance of brokers’ licenses to corporations is covered by section 1(d) of the act, which provides that: “. . . Where a real estate broker’s license shall be issued to a corporation or association, authority to transact business thereunder shall be limited to one officer of such corporation or association, to be designated in the application and named in the license. Each other officer of such association or corporation, desiring to act as a real estate broker in connection with the business of the said association or corporation or otherwise, shall be required to make application for and take out a separate license in his or her own name individually. . . .”

Under the language quoted, it is unnecessary for any officer of a real estate corporation to take out an individual broker’s license, unless he desires “to act as a real estate broker in connection with the business of the . . . corporation or otherwise.”

Clearly, the Legislature contemplated the possibility that an officer of a real estate corporation might also be an officer in other similar corporations, and it obviously intended that, if such an officer took out in his own name a real estate broker’s license, he should be free to act as such to the same extent as if he were an individual not connected with the corporation in an official capacity.

It is, therefore, not necessary for a person who is an officer in several real estate corporations to take out more than one broker’s license in his own name, if the several corporations transact business from the same address. If, however, the corporations have separate places of business at different addresses, and the officer desires to engage actively in the business of each of them, he must comply with section 1(b) of the act and take out a duplicate license for each office or place of business in excess of one, from which he proposes to transact business.

3. Section 9 of the act states that every broker shall be required to have and maintain a definite place of business within the Commonwealth. Does a broker who transacts his business from a private residence, without any sign indicating that he is engaged in the real estate business, meet the requirements of this provision?

All that section 9 (a) of the act requires is that each licensed real estate broker shall have and maintain a definite place of business within Pennsylvania, which shall serve as an office for the transaction of business, under the authority of the license, and where the license shall be prominently displayed.

A place of business where the license shall be prominently displayed must be one which is open to the broker’s clients, and must be an office in the usual sense in which that word is used. It may be located in any type of building, including a private residence, and the law does not require that there must be a sign indicating that the broker is engaged in the real estate business.

4. Referring to section 2, does the term “real estate salesman” include an employee or stenographer in the office who, when other members of the firm are out of the office, offers property for sale or rent, or negotiates loans, all in accordance with the established policy of the firm?

Section 2 (b) provides that the term “real estate salesman” shall mean and include any person employed by a licensed real estate broker “to sell or offer for sale, to buy or offer to buy, or to negotiate the purchase, sale or exchange of any real estate, or interest in real estate, the property of another, or to negotiate a loan upon real estate, or to lease or rent or offer to lease or rent or place for rent any such real estate.”

A stenographer or office boy is not employed for the foregoing purposes; and the mere giving of information in the absence of the licensed broker and the licensed salesmen of the office would not, in our opinion, be such an act as would require the stenographer or office boy to be licensed as a real estate salesman. However, a person employed for general work in a real estate broker’s office, including stenography and receiving and waiting upon the public, would be obliged to have a salesman’s license.

5. Section 15 of the act declares that it shall be unlawful for any licensed real estate broker to pay any compensation to any person other than a licensed real estate broker or salesman. May a licensed broker share a commission with one of those persons mentioned in section 2, par. c, such as attorneys-at-law, justices of the peace, etc.?

Section 15(a) of the act is as follows: “It shall be unlawful for any licensed real estate broker, or real estate salesman, to pay any compensation, in money or other valuable thing, to any person other than a licensed real estate broker or real estate salesman, for the rendering of any service, or the doing of any of the acts by this act forbidden to be rendered or performed by other than licensees.”

This section of the act does not express what the Legislature had in mind with that precision which is desirable in legislation, and it is difficult to construe it consistently with section 2 of the act.

Section 15 (a) purports to prohibit the payment of compensation by a licensed broker or licensed salesman to any person, other than a licensed broker or salesman, for the rendering of any service or the doing of any act “forbidden to be rendered or performed by other than licensees.”

In view of the exemptions contained in section 2 (c), there are no services or acts which the act forbids any person other than licensees to render or perform. Section 2(a) specifies the acts which shall constitute an individual, association or corporation a real estate broker, but section 2 (c) provides that the term “real estate broker” shall not be held to include “in any way” attorneys-at-law and justices of the peace, nor shall it include an owner who is selling his own property, a person holding a bona fide letter of attorney from an owner for the disposition of the owner’s property, a receiver, a trustee in bankruptcy, an administrator, an executor, or any other person or corporation acting under the appointment or order of any court, a trustee, or banking institution operating under the banking laws of Pennsylvania.

Accordingly, all of the acts specified in section 2 (a) may be lawfully performed by real estate brokers, by attorneys, by justices of the peace, or by any other person specifically mentioned in section 2 (e).

What the Legislature probably intended to provide in section 15 (a) was that it would be unlawful for any licensed broker or licensed salesman to pay compensation to any other than a licensed broker or salesman for rendering any service or doing any act forbidden to be rendered or performed by persons other than licensees or those persons specifically exempted by section 2(c) from the necessity of obtaining licenses.

Clearly, an attorney or justice of the peace may negotiate the sale of real estate and divide the compensation with a licensed real estate broker or salesman. On the other hand, if section 15 (a) has any effect whatsoever, it would seem that a licensed broker or licensed salesman cannot lawfully divide his compensation with an attorney, a justice of the peace, or any of the other persons, associations or corporations mentioned in section 2(c) as exempt from the necessity of taking out brokers’ or salesmen’s licenses.

Until this question actually comes before you in the administration of the act, we shall not answer it decisively.

6. Section 7 (d). Must each and every one of the officers of a corporation conducting a real estate business secure a license? Must each member of a partnership firm apply for individual license, irrespective of whether such persons are actively engaged in the sale of real estate?

It is not necessary for each officer of a corporation conducting a real estate business to secure a broker’s license. Officers are required to take out individual licenses only when “desiring to act as a real estate broker in connection with the business of the said . . . corporation or otherwise.” With partnerships the situation is different. The law specifically provides that the broker’s license issued to a partnership shall confer authority to act as a broker only upon one member of the partnership, who shall be designated in the application and named in the license. It then provides that, “All the other members of such copartnership shall be required to apply for and take out individual licenses in their own names.” This requirement is not qualified, as is the similar requirement in the case of a corporation. It is, therefore, necessary, for each member of a partnership, other than the one named in the firm’s license, to apply for an individual license.

7. Does a builder who employs a salesman on a salary basis, who sells property which the builder owns, need to be licensed as a broker? Must the salesman of such a builder, on a salary basis, be licensed? If on a commission basis, must the salesman be licensed?

A builder who sells property which he owns is not a real estate broker. Section 2(c) specifically provides that he shall not be so regarded.

Under section 2 (b), a real estate salesman is to be regarded as such only when he is employed by a licensed real estate broker for the purposes therein specified. As the builder is not a real estate broker, a salesman employed by him is not a real estate salesman.

On the other hand, section 2 (a) defines “real estate broker” to include all persons “who, for another and for a fee, commission or other valuable consideration, shall sell, . . . real estate.” This definition clearly brings within its scope a salesman employed by an owner to sell real estate on a salary basis, and such salesman must, therefore, take out a broker’s license.

8. Does a justice of the peace who employs a real estate salesman need to be licensed as a broker?

A justice of the peace is not required under any circumstances to take out a real estate broker’s license, but the salesman employed by a justice of the peace must take out a real estate broker's license for the reasons stated in answering your previous question.

9. Must the Department of Public Instruction issue a license to all persons whose applications are properly filled out as indicated in section 7, par. c; or can the department investigate complaints, holding hearings, and, if necessary, refuse a license under section 10, par. &? In short, in starting this licensing function, may we refuse a license to any person whose application is properly filled out? In still other words, must we, in starting the matter, license everybody and then proceed to the revocation of licenses?

The Legislature clearly contemplated that your department should not grant a license to persons guilty of any of the practices specified in section 10 (a). Section 10 (c) provides that: “The refusal of the department to issue any license, after application properly made, and compliance by the applicant with the requirements of this act, shall be subject to review by the Court of Common Pleas of Dauphin County. . . .”

In our judgment, it is your duty to refuse a license if charges are preferred against an applicant and if, upon investigation and after notice and hearing, your department believes that the charges have been sustained.

It would be absurd to license all applicants, nothwithstanding the pendency of serious charges against some of them; and a reading of section 10 of the act makes it clear that the Legislature did not intend your department to pursue this course. Prom C. P. Addams, Harrisburg, Pa.


author: Langham, P. J.,

text:
    Buchman v. North.

      E. E. Creps and A. Samuel Buchman, for plaintiff.

      Samuel W. Miller, for defendant.
    June 1, 1929.
   Langham, P. J.,

— This case is before us by reason of the fact that Pauline Buchman, the owner of a certain piece, parcel or lot of land in the Borough of Blairsville, upon which are erected buildings and improvements, situate at N. W. corner of Market and East Lane Streets, known as Nos. 133, 135 and 137 Market Street, being desirous of making some repairs, made application to the above-named defendant for a permit to do so, whereupon she was refused. The application is as follows:

Mr. T. C. North, Building Inspector, and October 25, 1928.

To the Blairsville Borough Council:

Dear Sirs: I hereby make application to you for permit to do and make the following repairs, to premises No. 131, 133, 135 and 137 E. Market St., Blairsville, Pa. (known as corner Market Street and East Lane):

1. To repair defects in roofs.

2. To repair, strengthen and re-enforce rear portions of roof and roofing extending from premises No. 135 E. Market Street (lately occupied as a Pool Room).

3. To replace the broken and displaced portions of concrete base and siding along the East Lane side of premises at No. 135 E. Market Street.

4. To repair and renew all necessary electric wiring and attachments to comply with Underwriters requirements.

5. To paint all exterior woodwork.

6. To replace all exterior tin-metal brick patterned siding, or recover exterior sides with slate surface shingles of fire-proof material.

7. To close openings on second floor at No. 137 E. Market St., facing East Lane.

All of the above to be with approved, fire-proof materials and all of above to

include the necessary and incidental repairs to same so as to render same a good and workmanlike job.

Very truly yours,

PAULINE BUCHMAN,

By A. SAMUEL BUCHMAN.

A hearing on this matter was had in open court, testimony taken, and, as a result of said hearing, the following facts are found hy the court:

Findings of fact.

1. That Pauline Buchman, plaintiff, who now resides in the City of Philadelphia, Pennsylvania, and is a citizen of the United States, is the owner of a piece, parcel or lot of land, in the Borough of Blairsville, Indiana County, Pennsylvania, situate upon the N. W. corner of Market Street and East Lane, in said borough, upon which three buildings are erected, known as Nos. 133, 135 and 137 on Market Street.

2. That by a written application dated Oct. 25, 1928, the plaintiff applied for a permit to repair the premises mentioned in paragraph one hereof, and which application was refused by defendant.

3. That the buildings sought to be repaired are within the fire limits as designated by the Building Code Ordinance of the Borough of Blairsville, approved July 3, 1928.

4. That the contention of the defendant is that Ordinance No. 71 of the said borough, approved March 4, 1924, applies in this case, wherein it is provided, inter alia, that “No dwelling-house, shop, warehouse, store, carriage-house, garage, stable or other structure shall be constructed, or substantially repaired, except of brick, stone, iron or other incombustible material;” and that said ordinance provides that the burgess of the borough shall issue the permit after certain designated plans and specifications as to the character of the repairs are approved by the borough council.

5. That section 5 of the Ordinance approved July 3, 1928, is as follows:

“Section 5. Repairing Frame Buildings Within Fire Limits. Any existing frame building within the fire limit, which may hereafter be damaged by fire, decay or otherwise to an amount greater than one-half its present value, exclusive of the foundation, shall not be repaired or rebuilt but shall be removed.”

6. That no evidence was submitted that the building in question, since the enactment of the Ordinance (July 3, 1928), of which the above section 5 is a part, has been “damaged by fire, decay or otherwise to an amount greater than one-half its present value.”

7. That since the year 1912 more than ten or twelve thousand dollars have been expended by way of repairs and alterations upon the buildings in question.

8. That the character of the repairs necessary to be made and the character of the repairs proposed to be made are not such as to warrant a refusal of a permit under any existing ordinance in force.

We are fully aware that a mandamus should not issue to compel the performance of an act which will work a public or private mischief. We are not convinced that any such condition will obtain if a permit as asked for is granted and the work completed accordingly. In this expression of our conviction of the situation in this case, we must not be understood as charging T. C. North, Borough Manager, with stubbornly and arbitrarily refusing a permit, but naturally, and we think very properly, he conferred with the borough council and burgess, who, in their great desire to eliminate every vestige of unsightly frame buildings along the main street of their town, and also their great desire to do everything they can to beautify their home city, advised against the granting of a permit to repair the premises in question along the lines proposed, and thus drew the reins of their discretionary powers too tightly upon this applicant for a permit. Personally, I share with the Council, Burgess and other good citizens of Blairsville in such laudable motives, because we have many old frame buildings in our town, and I suppose in every old town, that we would like to see obliterated, but to do so we cannot controvert the Constitution of the United States by judicial decision that would result in depriving the individual owner of property, or property rights, “without due process of law.”

The uncontradicted evidence of the plaintiff by two competent contractors and carpenters showed that the cost of doing all the work contemplated by the applicant would be from $750 to $950, and that such repairs would put the premises in a good condition, and at least in as good condition as it has been for the past ten years.

The testimony of the representative of the State Bureau of Fire Protection, to our mind, was practically valueless, because his conclusions were largely, if not solely, based upon what somebody told him.

The testimony of A. S. Buchman, acting and speaking for the plaintiff, was that she offered to repair the premises in question in such maimer and to such extent as the defendant and the members of council would reasonably require, and this testimony was not denied.

We are of the opinion that Ordinance No. 71, approved March 4, 1924, offered in evidence under objection of plaintiff, is repealed by the Ordinance of July 3, 1928, particularly No. 120-A, which codifies all the ordinances affecting the subject in controversy, wherein it states that “All ordinances and parts of ordinances inconsistent herewith are hereby repealed.”

Defendant contends that plaintiff’s request for a permit does not comply with sections 3 and 4 of said Ordinance No. 71, approved March 4, 1924. We agree that plaintiff’s application does not comply with the requirements therein stated, but if we are right in our opinion that Ordinance No. 71 has been repealed by Ordinance 120-A, approved July 3, 1928, that contention is eliminated from our consideration.

“The rules governing repeal of statutes apply to the repeal of ordinances:” 43 Corpus Juris, 582.

“So a later ordinance containing a general repealing clause repeals a former one, when the first two sections of each are the same and all other matter of the first is supplied by adequate provisions in the second:” 43 Corpus Juris, 564; Com. v. Lebanon City, 7 Dist. R. 163.

“An implied repeal is effected whenever the later ordinance is so incompatible with, or repugnant to, the former that both cannot stand together in a system of laws:” 43 Corpus Juris, 564; Leader Printing Co. v. Cauffiel, 23 Dist. R. 157; Com. v. Lebanon, supra.

“The rules of construction of ordinances are the same as of statutes” (Johnson v. Philadelphia, 60 Pa. 445), “and as is the case with statutes, ordinances are ordinarily to be construed according to the ordinary meaning of the language used therein:” 43 Corpus Juris, 571.

“A later statute repeals an earlier one, if it covers the same subject and in general terms repeals all other laws within its purview:” 36 Cyc., 1071; The San Pedro, 2 Wheaton (U. S.), 132.

“Where, however, a later act covers the whole subject of earlier acts and embraces new provisions, and plainly shows that it was intended, not only as a substitute for earlier acts but to cover the whole subject then considered by the legislature, and to prescribe the only rules in respect thereto, it operates as a repeal of all former statutes relating to such subject-matter, even if the former acts are not in all respects repugnant to the new act:” Fort Pitt B. & L. Ass’n v. Model Plan B. & L. Ass’n, 159 Pa. 308; Knoblauch’s License, 28 Pa. Superior Ct. 323; Phillips v. Barnhart, 27 Pa. Superior Ct. 26; In re Wetherill Steel Casting Co., 5 Pa. C. C. Reps. 337; Allegheny City v. McClurkan, 14 Pa. 81.

Decree and order of court.

And now, June 1, 1929, upon due consideration of the foregoing opinion, it is adjudged and decreed that the mandamus prayed for and issued be granted and made final; and it is further ordered and directed that T. C. North, Borough Manager and Building Inspector of the Borough of Blairsville, defendant, issue the permit to Pauline Buchman, plaintiff, as prayed for and requested in application bearing date Oct. 25, 1928. It is further ordered and directed that the costs of this proceeding be paid by the Borough of Blairsville.

Prom James L. Jack, Indiana, Pa.


author: Groff, J.,

text:
    Quillen v. Gibson.

      Daniel B. Strickler, for rule; Fred. S. Miller, contra.
    April 13, 1929.
   Groff, J.,

— This is a rule to strike off the levy made by the Sheriff of Lancaster County, pursuant to an execution issued upon a judgment obtained by the plaintiff, W. D. Quillen, against H. C. Gibson. On this execution, certain real estate owned by H. C. Gibson and his wife, Mabel A. Gibson, was levied upon.

The facts in this case are as follows: The plaintiff, W. D. Quillen, is a resident of the State of Virginia. The defendant, H. C. Gibson, was formerly a resident of that state, but now resides in Little Britain Township, Lancaster County, Pennsylvania. On Oct. 13, 1924, there was entered in the Circuit Court of Loudoun County, Virginia, a judgment against the defendant, and in favor of the plaintiff, for the sum of $1000, with interest.from April 20, 1924, plus 10 per cent, thereof as attorney fees and $8.42 as costs.

This was afterwards properly authenticated by the Clerk of the Court of Loudoun County, Virginia, and transmitted to Lancaster County, where a suit was brought upon the same to March Term, 1928, No. 16, and judgment was ■obtained thereon on April 2, 1928, for $1370.87. It was on that judgment that execution was issued and the levy made, which we are now asked to strike off.

It seems that, on April 13, 1926, H. C. Gibson and C. A. Cowden each purchased an undivided one-half interest in a tract of land containing 188 acres and 171 perches in Little Britain Township, Lancaster County, Pennsylvania, for which they received a deed on April 13, 1926, from John Jackson and wife and A. G. Fritz and wife, which deed is recorded in the Recorder’s Office of Lancaster County, in Deed Book “A,” volume 28, at page 493.

H. C. Gibson and Mabel A. Gibson, his wife, for a consideration of $1, conveyed their undivided one-half interest in the said premises to Walter Wright, by deed dated Nov. 18,1927, and recorded in the Recorder’s Office of Lancaster County, on Nov. 25, 1927, in Deed Book “W,” "volume 28, at page 384.

Walter Wright and Mabel E. Wright, his wife, for a consideration of $1, reconveyed the said undivided one-half interest in the said premises to H. C. Gibson and Mabel A. Gibson, by their deed dated Nov. 25, 1927, which deed is recorded in the recorder’s office aforesaid on the same day, in Deed Book “W,” volume 28, at page 383.

H. C. Gibson and Mabel A. Gibson, his wife, on March 31, 1928, acquired title to the other undivided one-half interest in the 188 acres of land by deed from C. A. Cowden and wife.

The defendant asks to have the levy stricken off, for the reason that the property was owned jointly by him and his wife. The contention of the plaintiff is that the conveyance to Walter Wright by H. C. Gibson and wife, and the reconveyance by Walter Wright and wife to H. C. Gibson and Mabel A. Gibson was made to defraud the creditors of H. C. Gibson.

Section 4 of the Uniform Fraudulent Conveyance Act of May 21,1921, P. L. 1045, says: “Every conveyance made, and every obligation incurred, by a person who is or will be thereby rendered insolvent is fraudulent as to creditors, without regard to his actual intent, if the conveyance is made or the obligation is incurred without a fair consideration.”

And section 9 of the said act says as follows:

“Where a conveyance or obligation is fraudulent as to a creditor, such creditor, when his claim has matured, may, as against any person except a purchaser for fair consideration without knowledge of the fraud at the time of the purchase, or one who has derived title immediately or mediately from such a purchaser:

“(a) Have the conveyance set aside or obligation annulled to the extent necessary to satisfy his claim; or

“(b) Disregard the conveyance, and attach or levy execution upon the property conveyed.”

It, therefore, follows that if H. C. Gibson conveyed his property to Walter Wright without a consideration, and Walter Wright reconveyed it to H. C. Gibson and wife without consideration, and thereby rendered himself insolvent, such conveyance was void as to Quillen, without regard to Gibson’s intention.

From the depositions taken, there is no question about Gibson having had knowledge of the judgment held against him by Quillen at the time' he made the conveyance to Wright, and at the time the conveyance was made by Wright back to Gibson and his wife.

The Supreme Court of Pennsylvania, in the case of Sauber v. Nouskajian et ux., 286 Pa. 449, says:

“Prior to the Act of May 21, 1921, P. L. 1045, the exclusive way to test the question of whether real property has been conveyed in fraud of creditors was for one claiming to be a creditor to obtain a judgment and issue execution against the premises in question as the property of his debtor, this to be followed by an ejectment at the suit of the purchaser at sheriff’s sale.

“The Act of 1921 gave an additional remedy in equity by which the creditor might have the conveyance set aside or obligation annulled to the extent necessary to satisfy his claim.”

And, again, the same Court, speaking through Mr. Justice Walling, in Pennsylvania Trust Co. v. Schenecker et al., 289 Pa. 277, 280, said: “Since the Act of 1921, 'the defrauded creditor has a choice of remedies, either in equity under that statute (referring to the Statute of 1921, P. L. 1045) or by a sheriff’s sale and an action of ejectment.”

The plaintiff in this execution has elected to pursue the second of these remedies, and we can see no reason why the levy should be stricken off.

His Honor, Judge Landis, in a very carefully considered opinion, in the case of Zook v. Shirk, 41 Lanc. Law Rev. 385, 12 D. & C. 322, has referred to the cases prior to the Act of 1921 to justify a proceeding such as the plaintiff has chosen in this case to test the validity of a conveyance.

We, therefore, discharge the rule to strike off the levy.

Prom George Ross Eshleman, Lancaster, Pa.


author: Evans, P. J.,

text:
    Commonwealth v. Nottage.

      H. B. Stees, District Attorney, and E. J. Mullen, for Commenwealth.

      E. J. Flynn, for defendant.
    Dec. 2, 1929.
   Evans, P. J.,

— The two indictments in this case were tried together by agreement of counsel, the indictments being the result of but one occurrence. There was but one accident, and there should have been but one prosecution, but one indictment.

Indictment No. 4 charges the defendant that while driving an automobile Sept. 1, 1928, his car became involved in an accident and that he did not immediately stop his motor vehicle at the scene of the accident.

Indictment No. 5 charges the defendant with the commission of an assault and battery upon Ella Hartzell on Sept. 1, 1928.

The jury found the defendant guilty on both indictments.

The defendant’s counsel frankly concedes in his brief for new trials, page 2, that the real questions in the case are raised by the additional reasons numbered from three to five, both inclusive.

The third reason urged why new trials should be granted is because the court overruled the objection to the testimony of Adolph Friday, a witness for the Commonwealth called in rebuttal of the testimony of Michael Andreechin, a witness for defendant.

The defense to the assault and battery charge was that the defendant was not driving his car at the time of the collision, but that Andreechin was driving the same. The latter testified in direct examination, pages 138 to 145, that he drove the car from Mt. Carmel to the place of the accident; that immediately following the accident he got out of the car and went into the brush and sat down for about twenty minutes, and then went home without returning to the car.

On cross-examination, Andreechin was asked whether he was drunk that night, and answered, “No.” He was the principal witness for the defendant. His attention having been called particularly as to whether he had been drinking that night, and as to whether he had seen the witness, Adolph Friday, when he (Andreechin) came out of the brush some twenty minutes after the accident, and having said he did not see Friday, it was competent for the Commonwealth to offer testimony in rebuttal to affect the credibility of Andreechin.

In Com. v. Gayton, 69 Fa. Superior Ct. 513, it is held:

“A conviction of a person for assault and battery while operating an automobile will be sustained where it appears from the evidence that the defendant, some distance before and up to the place of the accident, drove his car at an unusually high rate of speed, zigzagged across the road, suddently turned his car to the wrong side of the road, swerved into the ditch and struck an obstruction which threw his car in the path of an approaching car, from which a collision resulted, causing injury to the occupants of the approaching car.

“In such a case, evidence as to the defendant being in an intoxicated condition is properly admissible.”

According to the defendant’s theory, his companion, Andreechin, was driving the car at the time of the collision. The jury were directed to acquit the defendant if they found as a fact that Andreechin was driving the car at the time of the collision. This instruction was, perhaps, more favorable to the defendant than he was entitled to have.

When a witness has been cross-examined on matters material to the issue to which he testified in chief, his answers on cross-examination may be contradicted by other witnesses: Blauvelt v. D., L. & W. R. R. Co., 206 Pa. 141.

The fourth reason for new trials complains of the failure of the court to instruct the jury as to what construction they should place upon the argument of counsel, and that the court erroneously required the witness, Raker, called by the defendant, to answer a question as to whether the defendant was a customer in the bank in which he (Raker) worked.

The Commonwealth’s counsel had argued to the jury that they might infer that the defendant felt himself responsible for the collision because he requested the witness, Raker, to take the prosecutrix, who had been injured in the collision, to the hospital.

When this controversy occurred, the court, addressing counsel, remarked, and, of course, within the hearing of the jury: “The jury might draw such an inference; on the other hand, they might feel as though he (meaning the defendant) was a Good Samaritan; they might draw that inference.”

We think this remark on the part of the court should have satisfied the zeal of defendant’s counsel.

The arguments of counsel to the jury are not assignable as error. When counsel misstate facts or material evidence, or resort to comment unfair or unduly prejudicial to the other side, it is the duty of the opposing counsel at once to call the attention of the court to the matter, and the action of the court may then become the subject of exception. In general, it is matter of discretion and reviewable only for abuse: Com. v. Ezell, 212 Pa. 293; Com. v. Windish, 176 Pa. 167.

There is no contention in the instant ease that counsel for the Commonwealth misstated facts.

With respect to the court’s requiring the witness, Raker, to answer the question as to whether the defendant was a customer of the bank in which he worked, this neither harmed the defendant nor helped the Commonwealth.

The fifth reason assigned for new trials is that the court omitted to define the offenses charged in the indictments.

This is not the case of an ordinary assault and battery, but an assault and battery by automobile. The fact that the defendant was charged with the offense of assault and battery by automobile was explained very fully to the jury, the court saying, inter alia,: “Assault and battery is the beating of one person by another in a rude, angry or insolent manner; that is the ordinary case of assault and battery. Understand me: in the ordinary case it is the beating of one person by another in a rude, angry or insolent manner. But that is not this case. In this case the Commonwealth contends that the assault and battery was committed by means of an automobile. As a matter of law, one who drives and operates a motor vehicle on a public highway in a careless and reckless manner and without regard to the rights of others lawfully on the highway, and drives his car against or strikes another car and injures a person riding therein, may be convicted of an assault and battery. One who wilfully drives an automobile on the public streets- or upon the public highway at a rate of speed or in a manner which involves reckless disregard for the safety of other persons lawfully using the streets or highways, and by so doing causes injury to another, is guilty of assault and battery. The excessive rate of speed at which an automobile is driven is a product of the will of the driver and not the result of mere inattention or negligence. It is his voluntary act, and as such he is responsible for the result of his conduct, and there is no legal reason why the crime of assault and battery may not be committed while driving an automobile on a public highway at a rate of speed which endangers the safety of others and actually results in such injury. Gross negligence is recklessness in cases of assault and battery in which the basis of the charge is a battery by negligence. The reason for this is that the common law offense of assault and battery involves the idea of an intentional battery,' and the criminal intent is supplied only when the negligence is so gross and wanton as to give rise to the inference of malice.”

The other charge, failure to stop his automobile at the scene of the accident, required no explanation. In fact, no explanation could be given, except what the statute provides. The indictment is drawn in the language of the statute.

In Com. v. Coccodralli, 74 Pa. Superior Ct. 324, it is said: “One who wilfully drives an automobile on the public streets at a rate of speed or in a manner which involves a reckless disregard for the safety of other persons lawfully using the streets, and by so doing causes injuries to another, is guilty of aggravated assault and battery.”

An aggravated assault and battery, of course, includes an assault and battery, the lesser crime. However, in the indictment, the defendant was only charged with assault and battery.

We are still of opinion there was no occasion in this case to press the charge for failure to stop, and in imposing sentence, the conviction on indictment No. 4 of February Sessions, 1929, will be disregarded.

We do not believe the verdicts of the jury should be disturbed.

And now, Dec. 2, 1929, the motions for new trials are overruled and new trials are refused.

From A. Francis Gilbert, Middleburg. Pa.


author: Patterson, P. J.,

text:
    Anheuser Busch Brewing Co. v. Halpern Beverage Co.

      W. H. Cree, for plaintiff; 22. J. Puderbaugh, for defendant.
    Dec. 7, 1929.
   Patterson, P. J.,

— This is a petition by defendant to perfect and file an appeal nunc pro tunc. On April 22,1929, judgment in the sum of $36.30 was rendered in favor of plaintiff and against defendant in default of appearance before Justice of the Peace Boyles in the Borough of Juniata, Blair County, Pennsylvania.

It appears from the pleadings and arguments of counsel that a transcript of appeal was properly delivered by the justice to the defendant and by the defendant mailed to his attorney, who acknowledges receiving the same. The transcript of appeal was not filed in the office of the Prothonotary of Blair County until after the return-day of June Term, 1929, as provided by act of assembly. We are now asked to permit the same to be filed nunc pro tunc, and it is argued that it is within the discretion of a Court of Common Pleas to allow the same. With this conclusion we cannot agree. There are numerous decisions by the courts in Pennsylvania to the effect that a court has no jurisdiction in such case.

In Ward v. Letzkus, 152 Pa. 318, it is held, in a case where a petition to allow an appeal nunc pro tunc was presented: “No reason is given beyond, the neglect of counsel. The counsel was the mere agent of the client . . . and the neglect of the one was the neglect of the other. The order of the court below, allowing the defendant to enter his appeal nunc pro tunc, is reversed and set aside.”

In Kaumagraph Co. v. Thissen Silk Co., 42 Pa. Superior Ct. 110, 113, the Superior Court, quoting the opinion of the lower court, held: “While it is true that there is always an exercise of judicial discretion in this class of cases, yet it must be based upon something which gives the judiciary a right to set aside the provisions of a statute. . . . The frequency of these applications admonishes us that we ought not to relax the rules of law applicable to such cases. Nothing short of an act of assembly can give a man an appeal when he has last lost his right thereto by neglect.”

Decree. — Now, Dec. 7,1929, rule to show cause is hereby discharged.

From Robert W. Smith, Hollidaysburg, Pa.


author: Schaeffer, P. J.,

text:
    Godshall v. Dietrich. Dietrich v. Godshall.

      Paul D. Edelman and Wellington M. Bertolet, for Godshall.

      George W. Manderbach and George Eves, for Dietrich.
    Nov. 4, 1929.
   Schaeffer, P. J.,

-These cross-suits have been brought as the result of the collision of two automobiles at a street intersection. The cases were tried together before the same jury, which returned a verdict for God-shall, the plaintiff, for $600, in the first case, and for Godshall, the defendant, in the other case.

About 6.30 A. M., on March 12, 1927, Godshall, in a Whippet car, was driving eastward on Windsor Street, in the City of Reading, and Mrs. Dietrich was going north on Fourth Street. The cars collided at the intersection of these streets. Both streets are about thirty-three feet between curbs, are paved and have a single line of trolley tracks in the centre. According to the testimony most favorable to Godshall, he was upon his right-hand side of the street, going at a speed of eighteen to twenty miles per hour, and when he was fifteen or twenty feet from the western curb-line of Fourth Street, or, in other words, about at the western building-line of that street, he looked to his right and saw the Dietrich car 100 to 110 feet south of Windsor Street on Fourth Street coming northward at a speed of thirty to thirty-five miles an hour; he, Godshall, did not look to his right again or again see the Dietrich car until the instant of collision, although he says it did not slacken its speed, and that his car was struck on its right side by the front of the Dietrich car after he had gotten four feet beyond the east rail of the Fourth Street trolley line; that he, Godshall, had maintained his same speed, although he could have stopped in four to six feet, and that his car came to rest upon the northern sidewalk of Windsor Street east of Fourth, and the Dietrich car stood in the middle of the intersection. Godshall testified that he had gone fifteen to eighteen feet into Fourth Street when he was hit at his right rear door.

As the Dietrich car was upon Godshall’s right, the former had the right of way at the intersection, and the latter was bound to give way to the former, unless Godshall were so far in advance of the other as to afford reasonable time to clear the crossing and thus, in all probability, avoid a collision: Weber v. Greenebaum, 270 Pa. 382, 385. When Godshall arrived at the intersection, the Buick was, he says, 100 to 110 feet away, approaching at a speed of thirty to thirty-five miles per hour. Without looking again, Godshall proceeded at a continued speed of eighteen to twenty miles an hour to cross and had gone about thirty-six feet (being four feet beyond the east rail of the trolley tracks, the centre of which was in the middle of the sixty feet wide street), when he was struck by the Buick. Mathematically, it must appear that the elapsed interval between the time when Godshall says he saw the Buick 100 to 110 feet away and the time he was struck was less than one and one-half seconds. But at thirty-five miles per hour the Buick traveled in that time only about eighty-five feet. As the point of the collision was about the centre of Windsor Street, about sixteen feet north of the south curb of that street, the Buick would have been at least thirty feet from the Godshall car when the latter passed, if we strictly apply Godshall’s testimony that the speed of the Buick remained unchanged. And yet the Buick came to a stop “right .in the intersection — in the middle of the intersection,” as Godshall says, practically at the point of collision. It is obviously impossible to reconcile the short distance the Buick traveled after the collision with the speed assigned to it by Godshall at the time of the collision, and it is equally impossible to reconcile the speeds and positions of the two cars as fixed by Godshall with the established fact of a collision. By the mathematical test and by the position of cars after the collision, it thus appears that the testimony of Godshall is so untrustworthy as to be insufficient to support the verdict. Either he was further away from the intersection when the Dietrich car was 100 to 110 feet therefrom or the speeds of the cars were widely different from that which he gives to them, or else when he testifies to the position of the Dietrich car he is describing something he did not see. In order that the Dietrich car could travel 100 feet and half of Windsor Street in a second and a half, it would have had to have a speed of about fifty miles per hour; yet it stopped before reaching the northern curb-line of Windsor Street — a physical impossibility at that speed. In the face of these facts the verdict cannot be upheld: Bornscheuer v. Consolidated Traction Co., 198 Pa. 332. See, also, Lessig v. Reading Transit and Light Co., 270 Pa. 299.

Again, Godshall must be held to have been guilty of contributory negligence. It is true that, according to his testimony, he reached the intersection first, but as he was upon the left of the other car which he saw and knew was also approaching the intersection, it was his duty to use reasonable care under the circumstances to avoid a collision. This duty threw upon him the obligation of watching the other car and regulating his progress in accordance therewith. He says he could have stopped within six feet; yet without change of speed and without again looking, he traveled at least thirty-six feet and was struck. When he saw the other car approaching at a rapid rate of speed he could not blindly proceed upon the unfounded belief that he could safely cross ahead of the other car, but he was bound to pay such attention to the progress of the other car as would apprise him of danger and enable him to stop before a collision occurred. He cannot be said to have discharged his duty of reasonable care by a hasty glance followed by a blind assumption that he could pass in safety. Obviously, he either was negligent in proceeding without again looking or he assumed the risk of the situation: Kalter v. Phila. R. T. Co., 95 Pa. Superior Ct. 116; Frank et al. v. Pleet et al., 87 Pa. Superior Ct. 494, 497. As in Why v. Stratton, 92 Pa. Superior Ct. 476, the plaintiff, Godshall, drove his car to the place of danger with knowledge that an oncoming car 'would arrive at the intersection of the lines of travel at about the same time. We think that the defendant’s motion for a non-suit should have been allowed.

In the case of Dietrich v. Godshall, the verdict having been for the defendant, the plaintiff has moved for a new trial upon the ground that the verdict was against the weight of the evidence. Mrs. Dietrich stated that the speed of her car was fifteen to twenty miles as she came up Fourth Street and that she reduced that speed to twelve to eighteen miles per hour at the intersection ; that she looked right and then left when her wheels were at the south curb-line of Windsor Street and that she saw the Godshall car coming east thirty to fifty feet west of the west curb-line of Fourth Street; that she sounded her horn, put on her brakes, gave her car a turn to the right, eastward on Windsor Street, and was struck by the right rear door of the God-shall car coming into contact with the left front fender of her car; and that her car came to a stop with her left front wheel between the rails of the Windsor Street car track. Mrs. Sweigart, who was riding with Mrs. Dietrich, testified that the speed of the Dietrich car on entering the intersection was fifteen miles per hour, and in other matters substantially corroborates Mrs. Dietrich. A pedestrian, who was at the northeast comer of Fourth and Windsor Streets, saw the Dietrich car approach and had her attention attracted by the speed of the Godshall car. Another witness fixed the speed of the Godshall car, when about 100 to 150 feet from Fourth Street, at thirty to thirty-five miles per hour. As against this we have the testimony of Mr. Godshall, above referred to, and that of two witnesses who testified, not as to the happening of the accident but as to the position of the cars after the accident. Now, although the preponderance of the testimony does not depend solely upon the number of witnesses, it does appear to us that the weight of the evidence is in favor of the plaintiff in this case. The testimony does raise an issue which is for the jury and not for the court, but we believe this is a case in which the plaintiff has a just claim to have her cause submitted to another jury.

And now, to wit, Nov. 4, 1929, in the case of Godshall v. Dietrich, the rule for a new trial is discharged and the rule for judgment n. o. v. is made absolute; and in the case of Dietrich v. Godshall the rule for a new trial is made absolute. From Charles K. Derr, Reading, Pa.


author:
Gest, J.,
      Lamorelle, P. J., and Henderson and Van Dusen, JJ.,

text:
    Bailey’s Estate.

      Welsh & Brown, Francis Skunk Brown and Otto R. Heiligman, for exceptants.

      Joseph Carson, Henry J. Rebman, Hampton L. Carson and James Gay Gordon, contra.
    March 31, 1930.
   Gest, J.,

— On June 19, 1925, Emilie Bailey Collet, the daughter of the testator, presented her petition to the court, praying for a citation directed to David E. Hilsee, Harvey Gourley and William K. Haupt, trustees under the will of Charles W. Bailey, to show cause why they should not be dismissed as trustees, and the trustees filed their answer to the said petition. A replication having been filed, the case was, on Sept, 26, 1925, referred to a master, who filed his report on June 14, 1927, recommending that the respondents be dismissed. Exceptions having been filed by the respondents and argued by counsel, it appeared that the sole petitioner was the life-tenant under the testamentary trust, and the court being of opinion that the petition was defective for want of parties, the master’s report was referred back to him, and other persons interested in the trust estate were brought in by citation, etc. The master filed a supplemental report on Sept. 14, 1928, again recommending that the respondents be dismissed, and, on the argument of exceptions thereto, the report was again referred to the master in order that the petitioner might be cross-examined by counsel for those parties respondent who were not original parties to the proceeding. On June 20, 1929, the master filed his second supplemental report, again recommending a decree dismissing the respondents as executors and trustees under the will of Charles W. Bailey, deceased, and directing them to pay the costs. Exceptions having been filed by the respondents, the case was elaborately argued before Lamorelle, P. J., Gest, Henderson, Thompson, Van Dusen and Stearne, JJ. In consultation, the court was equally divided, Lamorelle, P. J., Henderson and Van Dusen, JJ., voting to dismiss the exceptions filed to the master’s report and to enter a decree dismissing the respondents as executors and trustees according to the master’s report, Gest, Thompson and Stearne, JJ., voting to sustain the exceptions and dismiss the petition. The court being equally divided, it appeared that no decree could be entered, and so, in accordance with the procedure as suggested in Madlem’s Appeal, 103 Pa. 584, approved in Summers v. Kramer, 271 Pa. 189, the Hon. E. Foster Heller, P. J., of the Orphans’ Court of the 11th Judicial District, was called in to sit at a reargument and decide the case. A reargument was accordingly had before the six judges of this court and Judge Heller, and the latter, having read and considered the testimorty, the reports of the master and the briefs of counsel, voted to sustain the exceptions to the master’s report and dismiss the petition. Judge Thompson died suddenly before the opinion of the court could be written. He, however, had read and concurred in a draft opinion which was substantially the same as that now filed as the majority opinion of the court.

We may say that all the six judges of this court and also Judge Heller have read the entire record of the case.

We shall now indicate the grounds of our opinion. To review in detail all of the record, which comprises over 1250 printed pages, would be scarcely possible and we think unnecessary. We shall confine ourselves to a brief discussion of the important features of the case.

1. It is a serious matter to dismiss trustees appointed by will; much more should be shown by those who wish them dismissed than would be the case where the trustees are appointed by the court. Perry on Trusts (6th ed.), 276, cited on page 77 of the trustees’ first brief, says: “The power of removal of trustees appointed by a deed or will ought to be exercised sparingly by the courts. There must be a clear necessity for interference to save the trust property. Mere error or even breach of trust may not be sufficient; there must be such misconduct as to show want of capacity or of fidelity putting the trust in jeopardy.” The trustees’ brief cites several cases in support of this.

2. It is well worthy of consideration that of all the persons interested as beneficiaries or possible beneficiaries of this estate only Mrs. Collet wishes to remove the trustees; all the others either desire their retention or elect to remain neutral. To be sure, Mrs. Collet has much the largest interest; nevertheless, the attitude of the others should have some weight.

3. It is strongly urged and indeed is the gravamen of Mrs. Collet’s complaint that White’s resignation as one of the trustees, upon which there followed automatically the appointment of Hilsee in his stead, was fraudulently brought about by the conspiracy of Hilsee and Gourley. White was to be a trustee, according to the will (paragraph 15), only so long as he retained his office or position with Bailey, Banks & Biddle Company, and upon his leaving the service of the company “from any cause” he was disqualified from acting under the will. And by paragraph 17, in the event of his disqualification, the testator appointed Hilsee in his place. We have not the slightest doubt from the testimony that White was properly removed as a director of Bailey, Banks & Biddle Company, as he was incompetent, having neither the necessary knowledge or experience in the jewelry business and was the cause of irritation and dissatisfaction. Hilsee, on the other hand, was a practical jeweler and well qualified to conduct the business of the company, which prospered accordingly. It will be remarked that Mrs. Collet was, and is, entirely willing for White to leave the directorate of the company, but she claims that he should have been retained as trustee, contrary to the express terms of the will. Mrs. Collet does not even now ask that he be restored as trustee, nor does White himself demand it. Mrs. Collet simply urges that all the circumstances connected with his retirement were not stated to her at the time; in other words, the only fault alleged of Gourley and Hilsee is a lack of frankness. It is true that she was not expressly told that his dismissal from Bailey, Banks & Biddle Company would result in his retirement as a trustee, but she either knew it or should have known it. According to Gourley’s testimony, he had a conversation with Gest, J., when he presented the petition to the court for Hilsee’s appointment, which is found on page 505a and in the trustees’ brief, page 30. Judge Gest does not remember the facts, but could not say that Gourley’s testimony is not true, and the general proposition is correct that, where a vacancy occurs in the trusteeship, his successor, appointed by the will, takes his place automatically. If all the facts had been stated, the court might have called for further explanation or directed notice, but White’s resignation as a trustee was voluntary; he need not have made it, and, in the long run, we think the same result would have followed.

4. The Lawyer account. The testimony as to this is difficult to analyze. The master was of two minds, possibly three. First, he thought it was principal, and that the trustees were wrong in paying to Mrs. Collet the $25,000 received in the settlement from Bailey, Banks & Biddle Company; then he thought it was income, and, finally, that it was neither principal nor income of the Bailey Estate, because it was earned by the capital of Bailey, Banks & Biddle Company (pages 931 a, 1200 a, 1203 a). He thought this was ground for dismissal of the trustees on the petition of the woman who actually got the money (page 1204 a), Bailey, Banks & Biddle Company making no claim thereto. But even if the payment was erroneously made, it was made in good faith, and afforded no ground for dismissal. It seems to us the indebtedness of the Lawyer account to Bailey, Banks & Biddle Company, at the time of Charles W. Bailey’s death, was a debt of his estate and should be paid by it, which we understand was done. The agreement of C. W. Bailey and Bailey, Banks & Biddle Company (see page 395 a,) provided for the termination of the agreement by either party giving to the other six months’ notice in writing prior to March 1st or Sept. 1st in any year. No written notice was given, but that seems to have been waived by the acts of the parties, and the Lawyer account was wound up as of Oct. 1, 1923 (page 1036 a), when the assets were transferred to the company in consideration of $35,126.39 cash paid. $10,042.79, representing the inventory value of the assets, was credited to principal and $25,083.60 paid, as income, to Mrs. Collet (pages 787 a, 1135 a). We are inclined to think that this was properly income earned by a capital asset of the estate, viz., the inventory and the valuable contract with Bailey, Banks & Biddle Company. While all this is subject to further critical examination, we are clear there is nothing in the Lawyer matter to warrant the dismissal of the trustees.

5. The purchase of preferred stock of Bailey, Banks & Biddle Company by the estate was good business. It was authorized by the will and has been profitable. Mrs. Collet does not even suggest that it should be sold, which she should do to be consistent. This charge should be dismissed without further comment.

6. The Haupt deal in commercial paper was reprehensible. The trustees had noi legal right to do it, especially as we think it was probably a loan to Haupt secured by the commercial paper, rather than a purchase of the latter with Haupt’s guarantee. This took place in March, 1923, and the notes were paid in September, 1923. The interest on the loan was paid, however, and no loss resulted. So, also, the loan to Bailey, Banks & Biddle Company was authorized, yet, as a temporary loan to the company, whose stock constituted practically the entire estate, it was not a devastavit, as the security was really better than that of the stock itself. The loan was repaid with interest, and, in our opinion, isolated transactions of this kind, which result in no loss to the estate, do not warrant a dismissal. Frequently trustees invest in unauthorized investments for the benefit of their cestuis que trust, and have never, to our knowledge, been dismissed where no loss has occurred.

7. The Kind offer. This was so manifestly impossible that we do not think it necessary to discuss it in detail. Mrs. Collet does not complain because it was not accepted, but because the trustees did not “meet the man.” This seems to us absurd. The proposition was in writing and spoke for itself. We think the trustees were entirely right and acted with good judgment.

8. The sale of fifty shares Bailey, Banks & Biddle Company was, in our judgment, honestly conducted. It was proper to offer it at public sale, buy it in at less than 100, the agreed price, and then make up the difference. No possible loss or harm resulted to any one.

9. The other charges are unimportant. We cannot say, in view of the doubt about the Lawyer account, that the trustees were not justified in withholding Mrs. Collet’s income until they should be made secure. And, in view of the lady’s sometimes overdrawing her letters of credit, the other matter complained of was not improper.

10. The effect of the dismissal of these trustees upon the estate and also upon the business of Bailey, Banks & Biddle Company would, in our opinion, be most disastrous. The welfare of the estate is bound up in the success of the business, and the testator in his will shows that he fully realized the bond between the two.

11. The effect of the dismissal of these trustees will probably, or at least may possibly, lead to their dismissal in the estate of Joseph T. Bailey, as it would then appear that they are unworthy of confidence in a fiduciary capacity.

12. The petitioner was evidently prompted in the preparation of her petition by Miss Bitner, an employee who was discharged in April 1925 (page 847 a), who admitted her hostility to Hilsee (pages 848 a, 857 a, 860 a, 865 a, 870 a). If, then, Miss Bitner, with intimate knowledge of the affairs of the trustees and of Bailey, Banks & Biddle Company, could find nothing else to complain of, it is clear to us there are no other charges.

Judges Stearne and Heller concur in this opinion, and, as stated above, Judge Thompson approved it in draft form.

The exceptions to the master’s report are sustained and the petition of Emilie Bailey Collet is dismissed, at the cost of the petitioner.

Lamorelle, P. J., and Henderson and Van Dusen, JJ.,

dissenting. — Mrs. Knowles, now Collet, daughter of the testator, and the principal recipient of the income of the estate, seeks the removal of the trustees under his will. Among the grounds of removal found in section 53(a) of the Fiduciaries Act of June 7, 1917, P. L. 447, is the following:

“9. When all the cestuis que trust, or a majority of them, having the life estate under any trust, shall desire the removal of the trustee or trustees upon any substantial ground not hereinbefore enumerated, and the court, upon petition filed by them or any of them, shall be satisfied that such substantial ground for removal exists; in which case, the court may remove said trustee or trustees and appoint another or others as chosen by said parties.”

As the commissioners note in their report, this last paragraph was taken from the Act of April 9, 1868, P. L. 785. That statute seemed to put the removal absolutely in the hands of the life-tenant. As construed by the courts, however, the mere wish of the life-tenant was not sufficient (Stevenson’s Appeal, 68 Pa. 101), but substantial grounds for dissatisfaction were required. This expression was carried into the revision, so that the statute now conforms to the court’s construction of it, and decisions under the Act of 1868 are still serviceable.

The substantial ground spoken of in paragraph 9 is one “not hereinbefore enumerated,” and as the other paragraphs describe various forms of malfeasance, neglect and incompetency, it must be something other than these: Martin’s Estate, 4 Dist. R. 219, in which Ashman, J., said: “What, then, was the purpose of the Act of 1868? We think it can’ be explained by a reference to the relations which necessarily exist between the trustee and the beneficiaries. These differ from most business and many fiduciary relations, in being eminently personal in character. A cestui que trust has a right to demand something more of his trustee than he would expect of his tailor or banker — mere honesty and good judgment and skill. He consults the trustee, not as an agent, but as his confidential adviser, and his dealings with an adviser should not be at arm’s length. It is easy to see how a trustee may be both upright and capable, and how his demeanor towards the cestui que trust may yet be such as to engender suspicion and even hatred, in that case, the fancied jeopardy to the estate would be as real to the mind of the cestui que trust as if it existed in fact.”

In Neafie’s Estate, 199 Pa. 307, the court said: “As any man may be mistaken in his estimate of the integrity and business capacity of another, when the latter becomes the former’s trustee and his • unfitness for the position appears to the court there should be no hesitancy about his removal. If his management of the trust justly subjects him to criticism and to a lack of confidence by the cestui que trust, he should not be continued in control of the estate. The relation of trustee and cestui que trust is one of confidence, and when either abuses that confidence, he must assume the responsibility. Pleasant personal relations between the parties interested in the trust is desirable, and it is a duty incumbent upon each to aid in securing that object.”

In Marsden’s Estate, 166 Pa. 213, the trustee was a brother of the beneficiary, and had not spoken to her for several years before the trust began. He made extensive repairs on dilapidated real estate without consulting her, and he lived in another city. Penrose, J., in the court below, said: “ ‘The power of the court under the Act of April 9, 1868, to appoint a new trustee, while it is not to be exercised capriciously, or at the mere whim of the cestui que trust (Stevenson’s Appeal, 68 Pa. 101), is not dependent upon the misconduct of the trustee sought to be superseded; and it is enough to show that-his retention, by reason of the existence of hostile relations between him and the cestui que trust, would naturally work disadvantage, inconvenience or great discomfort to the latter: Hillis’s Estate, 9 W. N. C. 421. See, also, Kellberg’s Appeal, 86 Pa. 129; Seyfert’s Estate, 3 W. N. C. 565; Gaul’s Estate, 12 Phila. 13.”’

We feel that petitioner’s loss of confidence in her trustees is justified, and will refer to the causes which seem to us the most important.

1. Testator was the president and principal stockholder of a company which operated a prominent and old-established jewelry store. His trustees are his lawyer and the company’s lawyer, Harvey Gourley, the president of the store company, David E. Hilsee, and a note-broker, William K. Haupt. The will originally appointed Frank A. White to the position now occupied by Hilsee, and White qualified as executor. He had been brought into the store by testator as a result of associations during the war, and had become the testator’s personal, confidential man, and a vice-president of the company. The will provided that one executor should be an officer or employee of the store, and that' two should not; that if the person appointed because of his position in the store should leave the service of the company, he should be disqualified as executor; and that if White should be disqualified, his place should be taken by Hilsee. Hilsee became president of the store company after testator’s death. About two months later he requested White’s resignation on the ground that his position in the store as a comparative newcomer without knowledge of the business caused dissatisfaction among the employees. After some discussion with Gourley, White submitted and resigned his place in the store and his executorship.

If White was honestly discharged from the store as a matter of store policy, the decision must be accepted, although the man principally responsible for it was the man who benefited by it. For practical purposes, testator put it in the power of Hilsee as president, with the executors as principal stockholders, to do that very thing. But the master finds (and his findings have the force of a -verdict) that there was no ground for the complaint against White, and that Gourley and Hilsee conspired to get rid of him for Hilsee’s benefit. This finding must be accepted, as there is ample evidence to support it; and the court in banc may not reverse the finding of the master on this point.

Indications of motive which have particularly struck our notice are these:

Gourley and Hilsee deny any consultation before Hilsee asked White to resign. This is against nature; and Hilsee elsewhere says that he consulted Gourley, Haupt and others before taking the step (page 722 a).

Hilsee says that when he asked for White’s resignation he did not know of its effect on the executorship. This, too, is incredible; and Hilsee elsewhere says (page 771 a) that one of the reasons he gave White was “your work is done as far as the preliminaries of the estate are concerned.” White’s written resignation repeats this reason.

White testifies that Gourley’s own explanation of his motive was: “If you can definitely show me how you can win out without assistance, but well, if I stand by you and you lose out, I will lose out.”

Gourley rushed Mrs. Knowles by telegraph into a consent to White’s retirement from the store, without explaining to her its effect on the executorship; and he used her consent to procure White’s acquiescence. There was plenty of time to explain by letter.

It was necessary to get the Orphans’ Court to enter a decree that White’s office was vacant; and in doing so, it was represented to the court that it was not possible to give notice to the parties within a reasonable time, and that the whereabouts of some of them were not known. It was perfectly possible to give notice to Mrs. Knowles, as the executors had just been communicating with her; and she was vitally interested in knowing what was being done. There is nothing to show that she knew White was to retire as executor until it was all done.

The executors settled some details about White’s retirement by a written agreement with him. In this it was provided that if the court did not declare his office vacant, nevertheless, he would not function. That is to say, if the court did not approve what they were doing, they would do it anyhow.

2. The trustees had some uninvested money. They loaned it to one of their number, Haupt, the note-broker, and he gave them his own note and some good commercial paper, and the estate received 6 per cent, interest until the amount was paid back by Haupt. They now say it was an investment in the good commercial paper. If so, it was not the kind of investment that trustees ought to make, even though they had authority to make other than legal investments. Moreover, the executors’ account had not been settled. The fund then belonged to unascertained creditors, if any; and such an investment should not be made until it was demonstrated that there was none such.

At the time they did it they wrote down in their books that it was a loan to Haupt, and they called it a loan to Haupt when they filed their formal account; they paid the money to Haupt, and they got it back from him. The master finds that it was a loan to Haupt, and he could not well have done otherwise. It is true that the security was the same whichever way the transaction is regarded, and that no loss was suffered. But motive and purpose make all the difference, and the rule is absolute, that trustees shall not lend trust money to themselves. It is conceded on all sides that this transaction was reprehensible. Now that the trustees are charged with the fault they stubbornly deny the evidence of their own actions, and do not thereby increase confidence in themselves.

3. Testator operated a factory known as the E. S. Lawyer Company, which did repair work for the store. His agreement with the store was fair enough on its face, but as actually carried out (according to the testimony of the trustees), it was grossly unfair because of the amount of expense improperly charged to the store. The result was that! the Lawyer factory made a .large profit for the testator. The executors, knowing this, decided that the Lawyer factory must be discontinued, though they might have tried to operate it under the express power given in the will to see whether a legitimate profit could be made. Mrs. Knowles objected to the discontinuance, and the trustees agreed to go on operating until $25,000 was produced as income for her. They did this, and then wound up the business.

A great deal has been said as to whether this $25,000 was income or principal, and as to the details of winding up the Lawyer business. The transactions between the trustees and the store company are confusing, but we do not think it is necessary to try to unravel them.' The findings made in this proceeding with regard to this transaction are not to prejudice the beneficiaries under the will, as the question is not at issue between them here, and is the subject of a separate proceeding. For present purposes the serious thing is this:

According to the trustees’ own statements, the money was made at the expense of the store company. Hilsee and Gourley were directors in the store. Hilsee was trustee and Gourley was counsel (he is now also trustee) of the Joseph T. Bailey Estate, which also held stock in the store. Instead of doing-the right thing (on their own version of the facts), they did the wrong thing at the expense of their company and of the other fiduciary interest in order to placate Mrs. Knowles. How will they decide when the next conflict of interest comes?

Hilsee also thought fit to add another complication by telling Mrs. Knowles that the Lawyer business was discontinued because of the request of her uncle and aunt, who were interested in the Joseph T. Bailey Estate. The uncle had, in fact, objected vigorously in the name of himself and the aunt. Mrs. Knowles took offense at this, as Hilsee well knew. When the aunt learned the reason for Mrs. Knowles’s coolness, she came to Hilsee demanding that he deny the story. He got Gourley to write the aunt a letter denying it, and himself wrote to Mrs. Knowles a letter, in which he did not deny it to her, but related that he also had denied it to the aunt.

This letter shows him unashamed of his attempt to satisfy the aunt with one story and Mrs. Knowles with another. It is this incident which first shook the petitioner’s confidence (page 989 a).

4. Income had been withheld from petitioner with her consent to meet certain of her liabilities. After this proceeding was begun, she demanded it, and still it was not paid. An informal complaint was made to the court, and (as we well remember) the excuse then given was that the sum was needed to pay the petitioner’s income tax, and not, as now alleged, that it was needed to protect the trustees with respect to the .payment of $25,000 to petitioner on the Lawyer account. That question had not yet arisen. When told by the court that they had no responsibility for the income tax, the trustees made the delayed payment.

But Haupt gave the petitioner this explanation of the delay (page 991 (a) : “If the heirs let things alone, they would get what was coming to them; if they did not, they would not.” Section 53 (a), 6, of the Fiduciaries Act gives as one of the grounds for removal:

“6. When such fiduciary fails or neglects to pay over the principal or income of the estate, according to his duty under the trust, or fails or neglects to comply with any order or direction of the court made in relation to said trust; . . .”

5. The trustees used the only money they had which was not invested in store company stock (including some income) to buy more stock. This may seem unwise, but it was a question of policy and expressly authorized by the will. But in the agreement of purchase they obtained an option on other shares which made up all the holdings of the seller. They say that the option was intended for Hilsee, and it was actually exercised by him with the temporary aid of company money. There is something to be said for this additional purchase as a matter of policy; but it was not necessary, and the trustees should have been sensitive to the absolute rule which forbids the use of trust funds to procure, even indirectly, an advantage for themselves.

It is argued that the management of the store under the control of the trustees has been successful. Lack of character is dangerous, even if no loss has yet resulted; and we feel that the estate is in jeopardy. Section 53 (a), 8, of the Fiduciaries Act.

It is also argued that the petitioner has condoned many things of which she now complains. Want of confidence may be of slow growth, and when the break comes, the whole conduct of the trustees may be reviewed. The question is not her conduct, but theirs. The same may be said of the fact that the remaindermen support the trustees or remain neutral. Paragraph 9, above quoted, makes the attitude of the life-tenant of prime importance.

It is hard to understand why there should be any hesitation to dismiss the trustees here, because this may be followed by their removal in another estate. The personal consequences to themselves of a dismissal do not improve the safety of the estate or the confidence of the beneficiary.

In general, we would enter a decree Sustaining the master and dismissing the trustées, and would act upon the exceptions as follows:

Of the exceptions of the trustees to the first report of the master, the following should be sustained: No. 16. The relations between this estate ^.nd the store were very intimate, and, in view of the broad power of investment, we cannot say that temporary investment in the store’s commercial paper was wrong. Nos. 21 and 29, because the matters involved are not fairly the subject of complaint. Nos. 45 to 48, inclusive, were sustained by the master. Nos. 26 and 27 should be sustained. This accords with the final conclusion of the master in the light of further evidence (see 17th exception of the trustees to the second supplemental report, and all Mr. Heiligman’s exceptions to the same report) and with our own conclusion. No. 35, because the errors in bookkeeping are not serious (No. 36 goes too far the other way). No. 37, because we do not find any serious withholding of information on request. (No. 38 goes too far thei other way.) Nos. 41 and 42, because the facts are true, though unimportant.

Exception No. 15 to the first supplemental report should be sustained, so far as to find that J. Trowbridge Bailey, for himself and his sister, objected to the Lawyer factory. Exception No. 10 to the first supplemental report should be sustained.

All the other exceptions of the trustees to the original and the first supplemental report, and all their exceptions to the second supplemental report, and all Mr. Heiligman’s exceptions to the second supplemental report, should be dismissed, without prejudice to the rights of his clients in other proceedings. His exceptions to the first supplemental report have already been sustained by the court.


author: Martin, P. J.,

text:
    Pollow v. Henry L. Doherty & Company.

      Harry Shapiro for plaintiff; W. Logan MacCoy, for defendant.
    April 3, 1930.
   Martin, P. J.,

— In this action in assumpsit, plaintiff filed a statement of claim alleging that on Sept. 25, 1929, she entered into a written contract in which she agreed to purchase from defendant 100 shares of Cities Service Company common stock at 50 per share; that she paid $750 as an initial payment, and agreed to pay $515 on the first day of each month thereafter, beginning Nov. 1, 1929, until the balance of the purchase money was paid, and that, in a second contract, she agreed to purchase fifty shares of Cities Service Company common stock at 50, that she paid $250 as an initial payment, and agreed to pay the balance in instalments of $267.50 on the first day of each month, beginning Nov. 1, 1929.

Each contract contained a provision that it became “automatically canceled if the purchaser’s payments due on the first of each month are not made on or before the first of the following month; and, in such event, the company will refund the amount theretofore paid, less or plus, as the case may be, the difference between the contract price and the market bid price on the 15th of the month preceding; and less, also, an amount as liquidated damages equal to 10 per cent, of such market bid price.” Copies of the contracts are attached to the statement of claim, and it is averred that the instalments that fell due Nov. 1, 1929, have not been paid, that the contracts were automatically canceled, and plaintiff became entitled to receive from defendant the amounts she had paid, together with the difference between the price per share called for by the contracts and the market bid price of the stock prevailing on Oct. 15, 1929, which was $68,125, and that she is entitled to receive from defendant $1000 paid by her and $1368.75, being $68,125 per share, less 10 per cent., or $1346.88.

An affidavit of defense was filed averring that, under the terms of the contracts set forth in the statement of claim, plaintiff was not in default until Dec. 1, 1929, with respect to the payments due on Nov. 1st; that the contracts were canceled on Dec. 1st, and settlement should be made as of Nov. 15, 1929.

The construction of the contracts claimed by defendant was sustained by the New York City Court in the case of Levy v. Doherty, reported in the Law Journal of Jan. 22, 1930. In that case it was said by Wendel, J.: “To hold, as contended by plaintiff, that the default took place when she failed to make the payment due on Nov. 1st, and that the market bid price of Oct. 15th should govern, would enforce a contract that permitted the plaintiff to speculate upon the rise or fall of the market price of the stock purchased. . . . The court cannot lend itself to such an interpretation. A view more consonant with fair dealing and which carries into effect the intendment of the parties, as expressed in the language employed by them, is that which holds that, while the monthly instalment became due on Nov. 1st, there was no default until the expiration of the month of arrears. Then, on Dec. 1, 1929, the instalment remaining unpaid, the contract became automatically canceled, pursuant to its provision for cancellation, and the ‘preceding month’ must be taken to mean November. Up to Dec. 1st the mutual rights and obligations of the parties, as agreed upon in case of cancellation, had not taken form; they were inchoate and unenforceable; the power to continue or terminate the contract during the month of arrears was entirely with the plaintiff.”

This decision has been affirmed by the Appellate Term of the Supreme Court.

And now, April 3, 1930, the affidavit of defense raising questions of law is sustained. Plaintiff is allowed fifteen days within which to file an amended statement of claim.