author: Martin, P. J.,

text:
    Joseph Building and Loan Association v. Barclay.

      M. A. Granatoor, for plaintiff; Philip Price, for defendant.
    Aug. 15, 1929.
   Martin, P. J.,

On Oct. 9, 1925, defendant executed a mortgage bond and warrant to secure the payment of $1500 loaned to him by plaintiff.

Default having occurred by the failure of defendant to make payment as stipulated, judgment was entered Nov. 8, 1928, on the bond accompanying the mortgage. Damages were assessed in the sum of $1575, execution issued and the mortgaged property was sold by the sheriff for $50. An alias fi. fa. issued which was returned “nulla bona.” Plaintiff filed a petition, averring that defendant is a member of a partnership trading as “Barclay Brothers,” a firm consisting of defendant and his brother, Joseph Barclay; that the partners conduct a grocery business on the premises No. 7041 Woodland Avenue in the City of Philadelphia, and that defendant has a 50 per cent, interest in the business.

A rule was granted to show cause why defendant’s interest in the partnership should not be charged with payment of the unsatisfied amount of the judgment against him.

An answer to the petition was filed by the defendant in which he denied that he is a partner, or that he has any interest in a partnership, or that there is a firm of Barclay Brothers, or that he and his brother Joseph are partners in any firm or partnership. The answer avers that defendant’s brother, Joseph Barclay, conducts the grocery business at the premises No. 7041 Woodland Avenue, that the business is owned by Joseph Barclay, and defendant has no interest, is merely an employee and receives a salary from his brother for services, but has no further business relationship with his brother; and it is specifically denied that defendant has a 50 per cent, interest or any interest in a partnership.

Depositions were taken, in which the representatives of three wholesale grocers testified that sales were made by their concerns to the Woodland Avenue store and entered in the books as made to “Barclay Brothers,” and that receipts with the signature “Barclay Brothers” were returned for merchandise delivered at the store. Payment for goods purchased was made in cash. Three shares of stock in the Retail Grocers’ Association were subscribed for in the name of “Barclay Brothers” and meetings of the association were attended by defendant. A bank account was opened in the name of “Robert H. Barclay, Barclay Brothers,” and Robert H. Barclay was authorized by the bank to sign checks. At the expiration of six months this account was closed and the balance on deposit carried to a new account opened in the name of “Joseph Barclay.” A power of attorney signed by him was lodged with the bank authorizing Robert H. Barclay to sign cheeks.

An application was made for telephone service containing a statement that the trade name was “Barclay'Bros.” and that the partners were Robert H. Barclay and Joseph Barclay. None of the witnesses called by plaintiff had any personal contact with either Robert H. or Joseph Barclay and knew nothing of their relationship to each other or to the business."

Joseph Barclay testified that he purchased the business with his own money and that his brother Robert paid no part of the purchase price. The bill of sale is in the individual name of Joseph Barclay. He testified that he was working for the transit company, had no business experience, but purchased the business because he was out of work, and that he employed his brother Robert, who was better educated than he was, to help him conduct the business.

Robert H. Barclay, the defendant, testified that he was in the real estate business and acted as the broker in negotiating the sale of the business to his brother Joseph and received a commission from the seller for his services in effecting the sale. Defendant and his brother both testified that Joseph was the exclusive owner of the business and that Robert H. Barclay had no interest beyond the wages paid him for the aid he rendered to- his brother in the conduct of the business. Both witnesses swore positively that Robert H. Barclay was not a partner. When the business was started, each brother drew $20 a week. This drawing account was subsequently increased to $25 a week, but the surplus profits were the exclusive property of Joseph Barclay. If Robert withdrew from active participation in the business, he would be entitled to nothing but any arrears of wages that might be due to him.

After argument, the rule to show cause why the interest of Robert H. Barclay in the partnership of Barclay Brothers should not be charged with the balance of the judgment due by him was made absolute. Subsequently, upon the presentation of a petition by counsel for defendant, the court directed this reargument.

The positive testimony that Robert H. Barclay was not a partner in the firm of “Barclay Brothers,” which was uncontradicted, completely overcomes the prima facie proof of the existence of a partnership arising from the evidence of the business having been transacted under the name of “Barclay Brothers.”

It is not claimed by plaintiff that the credit advanced to Robert H. Barclay when the mortgage was created was induced by his holding himself out as a partner in the firm of “Barclay Brothers.” The grocery business was not undertaken until several years after the bond upon which judgment is entered was signed by Robert H. Barclay.

Careful consideration of the depositions leads to the conviction that Robert H. Barclay was not a partner in a firm of “Barclay Brothers.” There was no proof of any act on the part of Robert H. Barclay, in reference to the judgment, to estop him from denying that he was a partner, and the assumption by persons having dealings with the business conducted at No. 7041 Woodland Avenue that Robert H. Barclay was a member of a firm trading as “Barclay Brothers” cannot establish the fact when rebutted by positive evidence that such was not the case.

In Bell v. Johnston, 281 Pa. 57, 60, it was said: “The Uniform Partnership Act of March 26, 1915, P. L. 18, in section 7, provides ‘joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership, does not of itself establish a partnership, whether such co-owners do or do not share any profits made by the use of the property.’ ”

The share of profits paid to Robert H. Barclay was limited to his wage of $25 a week. He owned no part of the capital, and was not a partner with his brother who conducted the business under the trade name of “Barclay Brothers.”

And now, to wit, Aug. 15, 1929, the order heretofore made on July 1, 1929, making absolute the rule to show cause why the interest of the defendant in the partnership of Barclay Brothers should not be charged with payment of the unsatisfied amount of the judgment against him, and the decree appointing Joseph S. Connell receiver is hereby revoked; and it is ordered and decreed that the rule granted March 8, 1929, to show cause why the interest of Robert H. Barclay in the partnership of Barclay Brothers should not be charged with payment of the unsatisfied amount of the judgment against him, entered Nov. 8, 1928, is discharged.


source: Caselaw Access Project

author: Pox, J.,

license: Public Domain

text:
    Pennsylvania Supply Company v. Silver.

      Nauman & Smith, for plaintiff; George L. Reed, for defendant.
    June 28, 1929.
   Pox, J.,

We have before us a motion for judgment for want of a sufficient affidavit of defense.

The plaintiff’s statement in substance avers that it is a Pennsylvania corporation and that the defendant is a resident of Steelton, Pennsylvania; that the plaintiff, at the special instance and request of the defendant, by verbal contract, sold and delivered to the defendant certain goods, wares and merchandise of the character, in the quantity, on the dates and at the prices shown by Exhibit “A,” attached to the statement and made a part thereof; that the defendant, by verbal contract, purchased and received from the plaintiff said goods, wares and merchandise; that all of the said sum as shown by Exhibit “A” is overdue, owing and unpaid, and that there are no credits, set-offs or defalcations applicable thereto; that the amount due and owing from the defendant to the plaintiff is the sum of $54.77, with interest from Aug. 22, 1928, and costs; that payment has been frequently demanded, but has always been refused in whole or in part.

The affidavit of defense filed admits the material allegations of the plaintiff’s statement, but avers that the defendant is entitled to a set-off or credit to the amount of $35, and is willing and ready to pay the sum of $19.77; that the credit of $35 is made up of an item of a garage rent due the defendant from the plaintiff for the use of a garage by the plaintiff at the monthly rental of $5, in accordance with the terms of a verbal agreement entered into between the plaintiff and the defendant on or before April 1, 1927.

The motion for judgment'for want of a sufficient affidavit of defense in substance sets forth that the defendant, at a hearing before the justice of the peace, refused or neglected to set off his demand of $35, and, therefore, is forever barred from recovery of said claim against the plaintiff under the provisions of the Act of March 20, 1810. Section 7 of which act, in part, provides: “A defendant who shall neglect or refuse in any case to set off his demand, whether founded upon bond, note, penal or single bill, writing obligatory, book-account or damages or assumption, against a plaintiff, which shall not exceed the sum of one hundred dollars, before a justice of the peace, shall be and is hereby forever barred from recovering against the party plaintiff, by any after-suit.”

The case of Tate v. Tate, 2 Grant, 150, is one that has been frequently followed. It was a suit brought before a justice of the peace, and upon trial before the justice both plaintiff and defendant exhibited claims against the other, whereupon the justice entered judgment for the plaintiff for $10 and costs. An appeal was taken and at the trial in the Court of Common Pleas defendant offered to prove certain matters in the way of set-off; objection was raised to this proof because they were not exhibited and claimed at the trial before the justice. The objection was sustained. The Supreme Court, in a per curiam, reversed the court below and ordered a new trial, saying, amongst other things: “He is not restricted on appeal to the set-off relied on before the justice, else he would be barred of a claim never litigated, by a record in which there is no judgment. He is not barred, because of not including these set-offs in his bill or specification before the justice; for here the trial is de novo, and to exclude it here for want of specification is to bar it entirely, whereas, in ordinary cases he would merely be put to his separate action. Excluding set-offs for want of specification is not at all like the bar of the right that follows from not presenting them in the small suits before justices of the peace.” See Cook v. Shirley, 4 W. N. C. 560; Kirk v. McComsey, 14 Dist. R. 580.

In the case of Lyons v. Barnett, 79 Pa. Superior Ct. 352, which was a trial in the Court of Common Pleas of an appeal from the judgment of a justice of the peace in an action arising from contract, the court below refused to allow the defendant to give any evidence of set-off amounting to $291.56 on the ground that section 7 of the Act of 1810, supra, limited the amount of set-offs which could be presented before a justice of the peace to the sum of $100. The gist of this decision was that section 7 of the Act of 1810, supra, contained a prohibitory provision, to wit: “If any defendant shall have a demand which does not exceed the sum of one hundred dollars, founded upon bond, etc., against a plaintiff and shall neglect or refuse in any case to set off the same before a justice of the peace, he shall be and is hereby forever barred from recovering against the party plaintiff by any after-suit:” which was not enlarged by the Act of 1879 increasing the jurisdiction of the justice from $100 to $300, but that the penalty was unchanged and left as it is in section 7, supra, and that a defendant who has a set-off not exceeding $100 must offset and claim the same at the trial before the justice or suffer the penalty, which is, “and is hereby forever barred from recovery against' the party plaintiff by any after-suit.”

The question, therefore, arises, is an appeal from the judgment of a justice of the peace to the Court of Common Pleas an after-suit?

In the case of Deihm v. Snell, 119 Pa. 316, the Supreme Court, amongst other things, said: “It is true that for certain purposes a trial in the Common Pleas after an appeal from a justice is de novo, but it is, nevertheless, a trial of the same case. The mechanical work of the trial, such as the formation of the proper issue, the production of the testimony and the decision of the questions involved, is de novo, but the cause of action remains the same. If the justice had no jurisdiction, an appeal from his judgment does not dispose of the objection, but it may be raised at any time in the Common Pleas. The forum is changed by the appeal, but the cause of action remains the same: Moore v. Wait, 1 Binn. 219; Owen v. Shelhamer, 3 Binn. 45; Collins v. Collins, supra; Bergman v. Roberts, 61 Pa. 497.”

In the case of Alschuler & Weisz v. Lipkin, 84 Pa. Superior Ct. 349, the court said: “The appeal from the judgment of the magistrate did not remove the case from the operation of the statute. While it is to be tried de novo after the appeal, this relates to procedure. The cause of action is the same, and the court to which the appeal is taken has jurisdiction of the subject only because the magistrate had jurisdiction. It is not authorized in such a proceeding to try that which could not have been tried in the magistrate’s court. It is clear that the counter-claim on which the appellee recovered could not have been entertained by the magistrate, and that being the case, the Municipal Court was controlled by the same limitation: Deihm v. Snell, supra; Katch v. Benton Coal Co., 19 Pa. Superior Ct. 476; Backer v. Remov, supra.”

The question has also been discussed in the case of J. B. Reed & Co. v. Linder, 75 Pitts. L. J. 545, in which it was likewise held that the phrase “de novo, as though originally instituted in the Act of March 27, 1913, P. L. 17, regulating the manner of taking appeals from a justice of the peace to the Allegheny County Court, relates to procedure only and not to substance, so that where the amount sued for as a counter-claim exceeds the jurisdiction of the magistrate, it cannot be heard on appeal in the County Court. Counterclaim of defendant stricken from the record.”

In the light of these decisions, we think that an appeal to the Court of Common Pleas from the judgment of a justice is not an after-suit, but is another trial in a different tribunal of the same suit, and, therefore, the penalty provided in the 7th section of the Act of 1810, supra, is not applicable, and the defendant in the trial of the case, upon appeal in the Court of Common Pleas, may exhibit and claim a set-off in amount of the set-off, under the law, he could have exhibited and claimed at the hearing before the justice, although he then and there failed in whole or in part to do so. To take this view, we think, harmonizes the case of Tate v. Tate with the 7th section of the statute of 1810, supra. In that case we have but a per curiam opinion. The court therein held that the defendant was not barred from exhibiting and claiming set-offs which he did not exhibit and claim before the justice. If the court had been of the opinion that the appeal was an after-suit, the defendant, not having presented set-offs at the trial before the justice, under the said act would have been barred in presenting the same in this after-suit. This decision was rendered in 1858, and at that time the jurisdiction of the justice did not exceed the sum of $100. At the trial of the case in the Court of Common Pleas, the defendant offered to prove in the way of claiming a set-off certain matters done for the plaintiff amounting to $65 or $70. Plaintiff’s counsel objected. The court overruled the offer of evidence, which ruling was reversed by the Supreme Court. This ruling could have been made only by the Supreme Court then regarding the appeal as a continuance of the same action as brought before the justice and not as an after-suit, otherwise it would have been in conflict with said act.

Wherefore, we are of the opinion that the defendant in this case, although he did not appear at the hearing before the magistrate and exhibit and claim his set-off, is yet, upon appeal, permitted to do so in the Court of Common Pleas, and is within his rights to set the same up in his affidavit of defense. That the motion for judgment for want of a sufficient affidavit of defense should be overruled.

And now, June 28, 1929, upon due consideration, the motion for judgment for want of a sufficient affidavit of defense is overruled.

From Homer L. Kreider, Harrisburg, Pa.


author: Fleming, P. J.,

text:
    Roan et ux. v. Bingaman et ux.

      J. K. Johnston (with him Philip II. Johnston), for plaintiffs.

      J. C. Furst, for defendants.
    March 18, 1929.
   Fleming, P. J.,

This is a case stated to determine mar-

ketable title to real estate. The facts set forth in the case stated are as follows:

1. The said Robert Roan and Laura Roan, his wife, became vested jointly in fee of a certain lot or piece of land, situate in the North Ward of Bellefonte Borough, Centre County, Pennsylvania, and bounded on the north by Curtin Street,- on the east by Allegheny Street, on the south by premises formerly of Mrs. Evelyn R. H. Rogers, and on the west by an alley. Thereon is erected a large brick dwelling-house, the title thereto having been conveyed to the said named plaintiffs by E. R. Taylor, Sheriff of Centre County, by deed dated Feb. 28, 1925, and recorded in Sheriff’s Deed Book No. 1, page 214, in the Recorder’s Office of Centre County.

2. That under agreement entered into by plaintiffs with the defendants, the title to 125 feet along Curtin Street and 100 feet along Allegheny Street and including a large brick dwelling-house was sold for the consideration of $9000, the title thereto to be conveyed free of encumbrances on March 1, 1929.

3. That on March 1, 1929, Robert W. Roan and Laura Roan, his wife, did execute, sign and acknowledge a deed to the said George C. Bingaman and Mamie W. Bingaman, his wife, for and in consideration of the price agreed upon, namely, $9000. Which said deed was turned over, or offered to be turned over, to the said grantees, and the plaintiffs are ready to turn over the said general warrantee deed to the said grantees, being the defendants, upon payment of the said purchase money, which is to be paid as follows: $7000 in cash and $2000 mortgage in favor of the said grantors; this mortgage, however, to be a second lien on the premises, said premises being first liable to a judgment lien of $5000, for the securing of which the said George C. Bingaman and Mamie W. Bingaman, his wife, did sign and deliver judgment note or notes to the First National Bank of Bellefonte, Pennsylvania, on March 1, 1929, which said notes were retained by said bank until a few days ago, when they were returned to the said grantees.

4. And that the said grantees did sign, execute and acknowledge bond and mortgage for and in favor of the said grantors for the said $2000 on March 1, 1929, being the same date that the transaction was to be closed, and being the same date that the deed was executed.

5. That Robert W. Roan, on Feb. 10, 1929, became accommodation endorser for S. E. Poorman of a note payable in thirty days in favor of the First National Bank of Bellefonte, Pennsylvania, in the sum of $3650, and that the said First National Bank did, on March 1, 1929, enter the said note against the said S. H. Poorman and Robert W. Roan to judgment No. 10, May Term, 1929, in the Court of Common Pleas of Centre County. And the said First National Bank, upon entering said judgment, notified George C. Bingaman, one of the purchasers, that it became necessary for the payment of said judgment by the said Robert W. Roan, the accommodation drawer, before they could pass the title for the purpose of making the judgment loan on the premises being purchased, and further notice was served on Mr. Bingaman that if title was taken by him and his wife under the circumstances, a scire facias would be issued against him and his wife as terre-tenants to revive said judgment on the said premises so as to affect their title thus being acquired.

6. The title being conveyed was held in the name of Robert W. Roan and Laura Roan, his wife, as tenants in entirety, and the accommodation obligation was given by Robert W. Roan personally, and his wife was not a party, or did not have any interest, directly or indirectly, therein.

7. If the court is of the opinion that the said deed vests a good marketable fee simple title in George C. Bingaman and Mamie W. Bingaman, his wife, in said lands identified and fully described in said deed, then judgment to be entered in favor of the plaintiffs and against the defendants; but if the court is of the opinion the said referred to judgment is a lien upon the premises in question and the estate in fee simple is not being conveyed, then judgment to be entered for the defendants. Both the plaintiffs and defendants reserve the right to take an appeal to the Supreme Court.

Discussion.

The simple question for our consideration is, where a husband and wife hold an estate in land by entireties, is their joint d»ed sufficient to pass title in the land free from the effect of a judgment entered against the husband individually?

That this question requires an affirmative answer is beyond question. Many lower court decisions have so held; the United States District Court for the Eastern District of Pennsylvania, in Getty v. Hupfel’s Sons, 292 Fed. Repr. 178, has so held; the Circuit Court of Appeals, Third Circuit, in A. Hupfel’s Sons v. Getty, 299 Fed. Repr. 939, has so held, and our Supreme Court, in Beihl v. Martin, 236 Pa. 519, clearly states the rule governing the determination of this question.

In the latter case it was contended on the part of the appellant that Fleek v. Zillhaver, 117 Pa. 213, had decided the question involved here in the negative rather than in the affirmative. Mr. Justice Stewart, after speaking of the peculiar character of the estate existing where husband and wife hold lands jointly, says:

“It is this striking peculiarity of the estate — the entirety alike in husband and wife — that operates to exempt it from execution and sale at the suit of a creditor of either separately. The enforcement of such process would be the taking of the property of one to pay the debt of another. But may not the interest of. either be seized in satisfaction of his or her appropriate and exclusive debt? Before answering, let us clearly understand what is here meant by interest. For convenience of illustration, take the case of a husband. Towards everybody in the world except the wife he has exclusive possession during her lifetime, and his right to the enjoyment of the estate during this period may not be interfered with at the suit of his creditor. So much is conceded, and has been expressly decided by this court in a number of cases, notably in McCurdy v. Canning, 64 Pa. 39. With possession denied a purchaser at an enforced sale during the joint life of the parties to the estate, what is there to acquire by purchase? Nothing but a bare expectancy, a chance that the husband may survive the wife and have the entirety to himself. May that expectancy be made the subject of a judicial sale? Certainly never up to this time have we said that it can be. The case of Fleek v. Zillhaver, 117 Pa. 213, marks the extremest limit to which we have gone in subjecting estates of this character to demands of separate creditors. We cannot allow that that case was an attempt to modify or escape from conditions which up to that time had been universally recognized as necessarily resulting from the nature and character of this particular estate. On the contrary, the result there reached can be vindicated only as it can be shown to be in harmony with these conditions; for it was along lines thought to be, entirely consistent with these that the conclusion there expressed was reached. The controversy there arose after the death of the wife. . . .
“This case (referring to Fleek v. Zillhaver, supra—the parentheses are ours) stands as authority with respect to what it expressly rules, viz., that the interest of husband and wife where they hold by entireties may be the subject of lien, and that upon the death of either, the lien against the survivor may be enforced. It is to be observed that it does not rule that there can be a severance in ownership in any other way than by the death of one or other of the parties, or by voluntary alienation by both. So it will become apparent, on a recital of the facts we have here, that the present case falls without the scope of that. Here, the estate in land as originally created continues, and what we have to determine is the capacity of the parties, husband and wife, by their joint deed to convey the interest of both free and discharged of the lien of the husband’s judgments. . . .
“We start in the discussion with an admission which the case of Fleek v. Zillhaver, supra, compels, that the judgments here obtained against the husband were liens. But upon what? Certainly not upon the entirety that was in the husband, for the entirety of estate was in the wife equally with the husband, and being in its nature indivisible, it would follow necessarily that any encumbrance upon the estate would rest upon that of the other; a result which, of course, could not be justified or allowed except as the inherent attributes of the estate are to be wholly disregarded. There remains to the husband a right of survivorship, by virtue of which, in case he survived the wife, while taking no estate, yet, because the entirety in the wife is by her death extinguished, his entirety embraces every interest in the estate. Contingent though this ultimate divestiture be, the expectancy is, nevertheless, a vested interest, and as such may be the subject of lien. All possible titles, vested or contingent, in land, under our law, may be taken in execution and sold, provided it be a real interest, whether legal or equitable. . . .
“Admitting, then, the lien on the expectant interest, the question occurs, when is it enforceable? At once, or only upon the realization of the expectancy? A little reflection upon the nature of the estate by entireties should make it apparent, we think, that while the estate continues, it is utterly impossible for either party, without the other joining, to sell or assign his or her interest therein, even the expectancy of survivorship. The rights of the parties are fixed by the deed of conveyance to them, and by that instrument each took an entirety made up of indivisible parts. Any alienation by one, the other not consenting, of any interest whatever in the estate, if allowed, would be an abridgment pro tanto of the rights of the other. By their joint act they admittedly have the right to sell and dispose of the whole estate; by their joint act they may strip the estate of its attributes and create a wholly different estate in themselves; but neither can divest himself or herself of any part without in some way infringing upon the rights of the other. The wife has the right to initiate as well as the husband. Suppose she desires to sell the land — a right which is hers — and the husband consent, what does his consent amount to if he has parted with his expectancy of survivorship to a stranger? Such circumstances would operate to deny to the wife the enjoyment of an inseparable incident of ownership, the right of alienation. Now, stating it broadly but correctly, nothing can be taken into execution and sold as the property of a debtor except property over which the debtor has the right of disposition by sale or otherwise. If, then, the husband cannot sell or dispose of his expectancy of survivorship, it follows that it may not be taken into execution. By this reasoning we reach the conclusion that the lien on the expectant interest of the husband becomes enforceable only when the expectancy ripens into a realized fact; then execution is not upon an expectancy, but upon an actual existing estate. Another unavoidable conclusion results which must prove fatal to the appellant’s contention here. If the husband may not alien his right of expectancy, and if, because of this, the expectancy may not be taken in execution — since in either case it would be an appropriation of the wife’s right of property, in that it would deprive her of the right to sell with the husband’s consent — for equal reason, a judgment operating as a lien upon the husband’s expectancy would be an interference • with the wife’s right of alienation with the consent of the husband, except as that lien is divested by such sale. The owner of such lien must hold it subject to its possible extinction in either of two events, the predecease of the husband or the alienation of the estate by the joint act of the parties. . . .”

In the instant case, the First National Bank of Bellefonte held its lien against Robert W. Roan, the husband plaintiff, subject to these two last-named possibilities of extinction. The joint act of the plaintiffs in conveying the land in question to the defendants extinguishes the lien of the bank, so far as the land conveyed is concerned, and the threat to revive such against the defendants, as terre-tenants, if such joint conveyance be made, is without foundation in law or possibility of execution.

Decree.

And now, March 18,1929, judgment is entered for the plaintiffs and against the defendants.

Prom S. D. Gettig, Bellefonte, Pa.


author: Crumkine, P. J.,

text:
    McElree’s Estate.

      Hamilton & Pipes, for accountants; 3. R. Irwin Knox, for Nellie McElree.
    Feb. 15, 1929.
   Crumkine, P. J.,

The will of William H. McElree disposes of his residuary estate in the following words: “All the rest and residue of my estate, of whatsoever kind and wheresoever situate, I give, devise and bequeath to the children of my deceased brother, Robert McElree, and Nellie McElree, daughter of my brother, George McElree, share and share alike.”

Nellie McElree contends that under this clause she takes one-half of the residue, and that the children of Robert McElree, deceased, divide the other half among them. The Robert McElree children contend that Nellie takes only the same share that each of them takes.

From early times, language similar to this has been the source of much contention in our courts, and the opinions on the question of a per capita or a per stirpes distribution are almost innumerable. Concerning this multiplicity of decisions, the annotator in 16 Am. Law Reps. 16, says: “It is a common remark that the decisions on the question as to when beneficiaries under a will are to take per capita and when per stirpes are in hopeless confusion. Analysis and comparison, however, show that their diversity of result is due not to a difference as to the principles of construction, but as to the amount of evidence of a contrary intent which will overcome the general presumption that where the proportions in which the beneficiaries are to take are not specified, they take per capita.”

This statement, I believe, applies to the law of Pennsylvania, where the confusion is more apparent than real, and results from the slight differences in the facts of the particular cases.

Nothing is to be gained from a discussion of our long line of decisions extending from Pemberton v. Parke, 5 Binn. 601, and McNeilledge v. Galbraith, 8 S. & R. 43, down to Donohoe’s Estate, 5 D. & C. 165, and 282 Pa. 254.

The English rule given in 2 Jarman on Wills, *1051, is as follows:

“Where a gift is to the children of several persons, whether it be to the children of A and B, or to the children of A and the children of B, they take per capita, not per stirpes.
“The same rule applies where a devise or bequest is made to a person and the children of another person, or to a person described as standing in a certain relation to the testator and the children of another person standing in the same relation, as to ‘my son A and the children of my son B;’ in which case A takes only a share equal to that of one of the children of B, though it may be conjectured that the testator had a distribution according to the statute in his view. So if the gift be to A and B and their children, or to a class and their children, every individual coming within the terms of the description, as well children as parents, will take an equal proportion of the fund; that is, the distribution will be made per capita.
“But this mode of construction will yield to a very faint glimpse of a different intention in the context.”

This rule was adopted by our Supreme Court as correct, but the last clause, holding that a “faint glimpse” of a different intention was sufficient to set it aside, was so much emphasized as practically to nullify its effect as a rule of presumption: Osburn’s Appeal, 104 Pa. 637; Scott’s Estate, 163 Pa. 165.

In Scott’s Estate, supra, Mr. Justice Pell said: “This rule under the English authorities yields to slight indications of a contrary intent, and in Pennsylvania the contrary intent is inferred where, under the intestate laws, which are always resorted to in cases of doubtful interpretation, the distribution would be made per stirpes, as in the case of a gift to a son or brother of the testator and to the children or heirs of a deceased son or brother.”

So, in this State, practically our only rule of construction applying to this class of cases is that where there is a doubt as to whether a distribution per capita or per stirpes was intended, that construction which adheres to the statute of distribution should be applied: Sipe’s Estate, 30 Pa. Superior Ct. 145; Ashburner’s Estate, 159 Pa. 545.

And this is reasonable, for our intestate laws represent what long experience has taught us that the average man would likely do with his property under given circumstances.

Now, in the case before us, the testator had one brother living, George McElree, the father of Nellie. Another brother, Robert McElree, had died before the will was written, leaving children. Had there been no will, George McElree would, of course, have taken one-half and the children of Robert divided the other among them. Now, if the rule given above were absolute and not merely a means of ascertaining the testator’s intention, one-half the residue would go to Nellie McElree. But this conclusion overlooks a very important fact, to wit, that the testator himself disregarded the living brother and picks all his beneficiaries from the class of nephews and nieces, which would indicate that he was not concerning himself with lines of descent, but with the individuals he wished to benefit. He was not thinking in terms of brothers and sisters, but of nephews and nieces.

This principle is well recognized in our law, “that when a testator designates the objects of his bequest or devise by their relationship to a living ancestor, such legatees or devisees take equal shares per capita. In great strictness of speech, the living of the ancestor, who is referred to only to designate the objects of the testator’s bounty, excludes the per stirpes rule, which belongs properly to the statutes of distribution and is a substitutionary rule by which the children or next of kin of a deceased person who would have been an heir are placed in his stead:” Risk’s Appeal, 52 Pa. 269.

And, in Scott’s Estate, supra, it was said:

“The benefit here was evidently intended for the legatees individually as nephews and nieces, and not as representing their parents, who, in two instances, are still living and were entirely passed over. The nephews and nieces are treated as if their parents were dead; and, in that case, if there were no will, the estate would go per capita under the intestate laws to the beneficiaries and others occupying the same position.
“The intestate laws, which would have required a distribution per stirpes, are passed over in order to exclude brothers and sisters and give the estate directly to nephews and nieces. That having been done, distribution unde/ the law would then be per capita, and the presumption is in favor of such an intention on the part of the testator, in the absence of evidence in the will of a purpose to further supersede the statute. The will seems clearly and affirmatively to show that the distribution was to be in equal shares.”

So here, the testator voluntarily passing over the brother, and the beneficiaries being placed all in the same class, the Intestate Act of June 7, 1917, § 9 (b), P. L. 429, would distribute to them per capita. So, if the reason of the statute of distribution rule be invoked, it must work in favor of a per capita distribution.

Counsel for Nellie McElree relies chiefly on the case of Herman’s Estate, 90 Pa. Superior Ct. 512, as being decided on substantially the same facts as the case at bar. But while the language of the will is almost identical, the facts of that case are entirely different. The provision there is: “I give and bequeath unto Franklin H. Wogan, and the nephews and nieces of my late husband, Charles A. Herman, that survive me, share and share alike.” Franklin H. Wogan was the nephew and sole heir of the testatrix, while her husband’s nephews and nieces were not related to her at all. In previous items of the will she had given to Wogan substantial devises and bequests. Judge Keller says, inter alia: “These beneficiaries stood in different degrees to the testatrix. The first mentioned as residuary legatee is her sole heir. The other nine are in an entirely different class. When this is so, the intention for distribution per stirpes is to be inferred. . . . The nine nephews and nieces of her husband were not her kin; hence, they did not bear the same relation to the testatrix as Wogan, which distinguishes this case from Scott’s Estate, 163 Pa. 165; Joyce’s Estate, 273 Pa. 404, and Brundage’s Estate, 36 Pa. Superior Ct. 211.”

Of the last cases, one more in point with the case at bar is Donohoe’s Estate, 282 Pa. 254. The language used there was: “In case of death I leave everything to each of brother Dan’s children and Phil, share and share.” “Phil” was a living brother of the testator. It was held that the brother took only the same proportion that each of Dan’s children’s took, the distribution intended being per capita.

Counsel for Nellie McElree also contends that, since the children of Robert McElree are not named, the legacy to them is a gift to a class, which negatives a per oapita distribution. If the legaey here were to a class in the technical sense, the argument might have some force, but the fact that legatees are described by their relationship to some one else without giving their individual names, does not of necessity mean that they take as a class and not as individuals: Wenzel’s Estate, 12 Dist. R. 63; Billings’s Estate (No. 1), 268 Pa. 67. By the same token, a naming of the legatees does not necessarily negative the idea that they are to take as a class: Billings’s Estate (No. 1), supra; Sharpless’s Estate, 214 Pa. 335. In any case, the ascertained intention of the testator must govern.

Here the presumption is against the children of Robert McElree being regarded as a class. Robert was dead at the time the will was made and his children were individuals in being. There was no possibility of any more persons answering that description. Their interests became vested on the death of the testator. And had any died before the testator, his share would have gone to his heirs, or, in default of issue, to co-residuary legatees.

After this brief consideration of the law, we turn again to the words of the will in question: “All the . . . residue of my estate ... I give, devise, and bequeath to the children of my deceased brother, Robert McElree, and Nellie McElree, daughter of my brother, George McElree, share and share alike.”

It is significant that the children of Robert McElree are first named and Nellie McElree linked with them by the conjunction “and.” (This fact was stressed in Donohoe’s Estate, supra.) Then are used the words “share and share alike.” Omitting the reference to Nellie’s parentage, and we have “to the children of my deceased brother, Robert McElree, and Nellie McElree, share and share alike,” it would certainly be doing great violence to plain words to say that Nellie was to have one-half of the entire estate.

I am of the opinion that the children of Robert McElree (the King children taking the share of their deceased mother) and Nellie McElree were intended to share equally in the residue, each taking a one-seventh — and a decree of distribution in accordance with such findings is filed herewith.


author: Cyrus E. Woods, Att’y-Gen.,

text:
    Wilner’s Petition.
    July 24, 1929.
   Cyrus E. Woods, Att’y-Gen.,

This is an application to the Attorney-General to institute proceedings by writ of quo warranto■ against Frank P. Barnhart, Additional Law Judge of the 47th Judicial District of Pennsylvania.

On May 16, 1929, the Governor appointed Frank P. Barnhart, of the City of Johnstown, Pennsylvania, as Additional Law Judge for the 47th Judicial District. The Secretary of the Commonwealth issued a commission to him, and on May 20, 1929, the said Frank P. Barnhart took the oath as Additional Law Judge, aforesaid, and has since been serving in that capacity.

Shortly after the said Frank P. Barnhart was commissioned and had qualified as a judge for the 47th Judicial District, a proposed suggestion for a writ of quo warranto was presented to the Attorney-General, in which it was averred that the said Frank P. Barnhart was ineapáble of holding any office of trust or profit in this Commonwealth, and especially of holding the office of Additional Law Judge of the 47th Judicial District, for the reason that on Feb. 19, 1919, at No. 74, December Sessions, 1918, in the Court of Quarter Sessions of Cambria County, Pennsylvania, he was charged with an infamous crime, viz., the crime of forgery; that he entered a plea of not guilty and proceeded with the trial of the said case; that during the trial the plea of not guilty was withdrawn and a plea of nolo contendere was entered; and that on Feb. 20, 1919, the court made the following order: “We think he (meaning Frank P. Barnhart) has done the manly thing to enter this plea and terminate the cause at this time, and we feel he has fully learned his lesson; and under the circumstances we are going to suspend sentence upon him for this infraction of the law and upon payment of the costs, and that is the sentence of the court.”

This proposed suggestion for writ of quo warranto was accompanied by an affidavit made by Warren S. Krise and Edwin K. Kintner. Subsequently, the affidavit of Warren S. Krise was withdrawn. The proposed suggestion was not accompanied by any petition. After numerous requests and considerable delay, a certification of the court record in the case of Com. v. Barnhart was finally submitted to the Attorney-General on July 8, 1929, being the time set by the Attorney-General for a hearing of the complaint. At this hearing it was agreed by the attorneys for both the petitioner and the respondent that the hearing should be proceeded with and that subsequently a petition and answer would be filed in order that all the questions and facts involved might be fully presented to the Attorney-General as a matter of record. This petition was not received until July 17, 1929.

The petition presents the same facts as were set up in the proposed suggestion for quo warranto previously referred to. The forgery charged consisted in the fixing of a seal after the last of three names on a judgment note, the word “Seal” having been printed after the other two names. The respondent in his answer contends that in entering a plea of nolo contendere during the trial, by said plea he simply admitted a physical act but not an act with any criminal intent to prejudice the rights of any one. However, in my consideration of this case, I am restricted to the record as it stands and the merits thereof cannot be material in my determination of this proceeding. He also contends in his answer that he was not “convicted” within the meaning of that term in article II, section 7, of the Constitution.

Two questions are presented by the petition and answer for my consideation and determination as to whether a suggestion for a writ of quo warranto should be filed by me in this case. The first question is whether or not Frank P. Barnhart was charged with an infamous offense within the meaning of article II, section 7, of the Constitution. However, it was agreed by counsel for the respondent that the crime of forgery and altering a written instrument is an infamous crime within the terms of the said article of the Constitution, so a discussion of this question is unnecessary. This question, however, seems to be clearly settled by the Supreme Court.

The next question is whether said Frank P. Barnhart, defendant, was “convicted” within the meaning of that term as used in article xi, section 7, of the Constitution. This is the vital question in the case/ In fact, it is the only issue for my determination here.

Article II, section 7, of the Constitution provides: “No person hereafter convicted of embezzlement of public moneys, bribery, perjury or other infamous crime shall be eligible to the General Assembly or capable of holding any office of trust or profit in this Commonwealth.”

The record discloses that upon the plea of nolo contendere by the respondent sentence was suspended by the court by the use of the language previously quoted in the proposed suggestion for a writ of quo warranto. This appears from an examination of the record, which was certified as a whole by the Clerk of the Court of Quarter Sessions of Cambria County. According to this certified record, the accuracy of which was admitted by all parties at the time of the hearing before me, no sentence, other than the order suspending sentence previously quoted, was ever imposed upon said respondent.

However, it was contended at the time of the hearing before me by Attorney J. J. Kintner, who represented the petitioners, that said suspended sentence was a “conviction” within the meaning of that term in said article II, section 7, of the Constitution. This contention was based first on the fact that Judge Quigley, in suspending sentence, said, at the conclusion thereof, “and that is the sentence of the court.” This contention was made notwithstanding the fact that the court had just previously stated clearly and concisely that he was suspending sentence on the defendant and gave his reasons therefor. This contention of counsel for the complainants has no merit because of the fact that the Act of March 31, 1860, § 169, P. L. 423, which makes the fraudulently making or altering of any written instrument a misdemeanor and provides for the punishment thereof, expressly provides that the sentence of the court in such cases shall be “to pay a fine, not exceeding $1000, and to undergo an imprisonment by separate or solitary confinement at labor, not exceeding ten years.” It is, therefore, made imperative by the express mandate of the law that the court, if it had imposed a sentence in this case, must have imposed both imprisonment and fine. Neither fine nor imprisonment was imposed in this case, and the mere imposition of costs cannot be construed as the imposition of a sentence. In Pennsylvania, the suspension of sentence on payment of costs is not a sentence or judgment: Com. v. Carelli, 90 Pa. Superior Ct. 416. In Com. v. Hamel, 44 Pa. Superior Ct. 464, the record discloses that sentence was suspended upon the payment of costs in the following order: “June 9, 1909, defendant sentenced to pay the costs of prosecution and further sentence suspended.” In this case, the court held that this was not a sentence, but was a suspension of sentence.

The other contention made by counsel for the petitioners in support of their argument that the suspension of sentence by the court in this case was a “conviction” within the meaning of that term as used in article II, section 7, of the Constitution, was that the term “conviction” as used therein must be taken in its popular sense and not in its legal or technical sense. Various Pennsylvania Supreme and Superior Court cases were cited, which I have carefully examined, but they do not support the contention made. The case upon which petitioners chiefly rely and which they feel bears the closest analogy to the situation here presented is the case of Wilmoth v. Hensel, 151 Pa. 200. It may be well to note briefly the facts in that case. That is a case in which a reward was offered for the prosecution and conviction of persons who violated any of the statutes against bribery or corruption at a certain election. The offer of this reward was made in a political speech by the defendant, he being then Chairman of the Democratic State Committee. The plaintiff in that case, pursuant to the offer which had been made at a political meeting in his part of the State, instituted the prosecution of a certain defendant for a violation of the election laws of the Commonwealth at said election, and the defendant entered a plea of guilty, but sentence was suspended by the court. With respect to the question whether or not there was a “conviction” in this ease within the meaning of that term as used by the defendant when he made said offer of reward, the Supreme Court, in its opinion, said: “It is not needed that we should enter upon a discussion of the meaning of the word ‘conviction’ in its technical sense. We must regard it as it was probably intended to be used, in its popular sense. In common parlance, a verdict is called a conviction: Smith v. Com., 14 S. & R. 69. In this case there was more than a verdict. There was a plea of guilty, which was a confession of guilt by the defendant. This was all that it was possible for the prosecutor to do. He had brought the offender to the bar of the court and compelled a plea of guilty. He had no further control of the case. The sentence was entirely within the power of the court. We are of the opinion that Howard was convicted of an offense against the election laws within the meaning of the defendant’s offer.”

In the case of Com. v. Minnich, 250 Pa. 363, where the court, in considering the meaning of the term “conviction” as used in the case, where the “record of conviction” was introduced in evidence in the trial of an indictment charging the defendant as an accessory to a murder, the record of the conviction of the principal simply showed that a verdict of guilty was rendered, but that no judgment was entered thereon, and it was contended by the appellant that such record was inadmissible. The court, in discussing the meaning of the term “conviction,” referred, inter alia, to the case of Milmoth v. Hensel, aforementioned, in the following language: “Whatever difficulty we may encounter here will be found due to the fact that the word conviction is of equivocal meaning. It has a popular as well as technical meaning. As popularly used, it implies nothing more than a finding of guilty by a jury, and this meaning has been allowed it in several of our eases, notably in York County v. Dalhousen, 45 Pa. 372; Wilmoth v. Hensel, 151 Pa. 200; while in others, as technically understood, it means the ascertainment of the guilt of the accused and judgment thereon by the court, implying not only a verdict but judgment or sentence thereon, as in Smith v. Com., 14 S. & R. 69; Cumberland County v. Holcomb, 36 Pa. 349. The difficulty becomes more apparent than real if we are content to apply the ordinary rules of construction. Technical legal terms are to be taken, in the absence of countervailing intent, in their established common law significance, for the reason that they have a definite meaning which is supposed to have been understood by those who were or ought to have been learned in the law.”

In Shields v. Westmoreland County, 253 Pa. 271, the court, in its opinion, interpreted the word “conviction” as used in article II, section 7, of the Constitution, to the effect that there could not be any conviction until a sentence had been imposed. The court said: “By section 7, article II of the Constitution, it is declared .that ‘No person hereafter convicted of embezzlement of public moneys, bribery, perjury or other infamous crime, shall be eligible to the general assembly, or capable of holding any office of trust or profit in this Commonwealth.’ When Shields was sentenced May 11, 1912, on the indictments charging him with embezzlement and perjury, he then became convicted of those offenses. The returns of guilty by the jury did not convict him in the legal sense of that term, but judgment on the verdicts did: Com. v. Minnich, 250 Pa. 363; Com. v. Vitale, 250 Pa. 548.”

The distinction between the words “convict” or “conviction” as it is commonly used and in its legal sense is found in the case of People v. Fabian, 192 N. Y. 443; 85 N. E. Repr. 672; 18 L. R. A. (N. S.) 684. In this case the indictment charged the defendant with the crime of knowingly voting at an election “not being qualified therefor.” The alleged disqualification was based on the fact that the voter had previously been indicted for burglary in' the first degree, and upon his trial therefor a verdict had been rendered against him, although no judgment was ever entered upon the verdict, sentence having been suspended. The defendant demurred to the indictment upon the ground that the facts stated therein did not constitute a crime; the specific basis of his objection being that a voter has not been “convicted” within the meaning of the Constitution and the qualifying statutes unless the verdict against him had been followed by a judgment. Mr. Justice Bartlett, delivering the opinion of the court, said: “Upon reason, apart from authority, it will hardly be contended that a man should be deprived of the right of suffrage by a less conclusive judicial pronouncement against him than is required to disqualify him or affect his credibility as a witness. The disqualification of a witness on the ground that he has been convicted of a crime is clearly analogous to the disfranchisement of a voter on the same ground. In discussing the rule which thus renders a witness incompetent, in the case of Faunce v. People, 51 Ill. 311, the Supreme Court of Illinois has said: ‘An examination of the adjudged cases in the various states of the Union, where substantially the same laws are in force, will show that it is not the commission of the crime, nor the verdict of guilty, nor the punishment, nor the infamous nature of the punishment, but the final judgment of the court that renders the culprit incompetent. It is true that writers and judges have loosely said that á party is convicted on the finding of a verdict against him. It is true in a sense that he has been convicted by the jury, but not until the judgment is rendered is he convicted by the law; and the statute only, like the common law, refers to the conviction imposed by the law.’ It may readily be conceded that the words ‘convicted’ and ‘conviction’ are often employed with reference to the verdict in a criminal case, as distinguished from the judgment, without affecting the validity of this argument as to the meaning of ‘convicted’ in the constitutional provision under consideration and in the legislative enactments adopted in pursuance thereof.”

I take it that the language of the Supreme Court in Shields v. Westmoreland County, supra, expressly determines that the term “conviction” as used 'in article II, section 7,' of the Pennsylvania Constitution, must be construed in its legal sense, and not in its popular sense, and can only be so treated. In the light of this decision and the other decisions cited therein by the court, the “conviction” referred to in this section and article of the Constitution is a conviction by the law. The framers of the Constitution were not dealing loosely with the term in question, but had no other meaning in mind than a “conviction” in a court of law in the legal sense and significance of that term. The plea of nob contendere is not such a “conviction,” nor is a suspension of sentence by the court upon payment of the costs.

In this case, there was no sentence. Without a sentence there could, of course, be no judgment, and without a judgment there could be no conviction, within the meaning of that term as used in article ii, section 7, of the Constitution, as definitely decided in the case of Shields v. Westmoreland County, supra.

I am of opinion, further, that a proceeding in quo warranto, being an extraordinary remedy, should not be instituted by the Attorney-General unless a clear, prima facie case is made out and it is apparent that litigation would be successful in the court. This position has been taken by former Attorneys-General of this Commonwealth. It is clearly the right and the duty of the Attorney-General to decline to ask for relief when he believes that, under the law, the petitioner is not entitled to receive it: Cheetham et al. v. McCormick, 178 Pa. 186.

With respect to the application here made, I am clearly of opinion that no prima fade case has been made out and that the proceeding by a writ of quo warranto could not be successful in the courts. The fundamental essential in the proposed proceeding, to wit, that said Frank P. Barnhart was “convicted” of an infamous crime within the meaning of article II, section 7, of the Pennsylvania Constitution does not exist, and a contention to the contrary could not be sustained unless the Supreme Court should reverse a long line of its former decisions.

For the reasons given herein, the prayer of the petition is refused.

Prom C. P. Addams, Harrisburg, Pa.


author: Hicks, J.,

text:
    Stankiewicz v. Heights Construction and Supply Co. et al.

      Roscoe R. Koch, for claimant and for employer.

      M. J. Ryan, for insurance carrier.
    July 22, 1929.
   Hicks, J.,

This is an appeal from the decision of the Workmen’s Compensation Board affirming the award of the referee in favor of the claimant and against the insurance carrier. Julian Stankiewicz, the claimant, sustained the loss of his left hand in the course of his employment with the Heights Construction and Supply Company. A claim petition was filed by him, to which the employer, Heights Construction and Supply Company, replied, alleging that its insurance carrier at the time of the accident was the Standard Accident Insurance Company of Detroit, Michigan, which had received notice of the accident, and that any liability for any compensation arising out of the accident was on the said insurance carrier. At the hearing before the referee, counsel for the employer made a motion to make the Standard Accident Insurance Company a party defendant to the proceedings, which was opposed by counsel for the insurance company upon the ground that it was not the insurance carrier of the employer. The referee denied the motion of the defendant employer, and upon appeal by the claimant and the employer to the Workmen’s Compensation Board, the latter reversed the referee, allowed the amendment so as to include the insurance carrier as a defendant and remanded the record to the referee for that purpose and for the further purpose of determining the liability or non-liability of the insurance carrier under its contract as disclosed by the record. Upon a subsequent hearing before the referee, it appears that the insurance carrier filed an affidavit replying to the claim petition (which affidavit we cannot find among the record papers), to the effect that the Workmen’s Compensation Board is not the proper tribunal in which to litigate the contractual relationship between the Heights Construction and Supply Company and the insurance company and denied the jurisdiction of the board. The referee made an award against the insurance carrier, which, upon appeal to the Workmen’s Compensation Board, was affirmed. An appeal was then taken to this court.

The appellant, Standard Accident Insurance Company of Detroit, Michigan, does not contend that the claimant did not suffer a compensable injury or that the order of the referee against the employer was incorrect and did not in any way contest the claim for compensation against the employer. There seems, therefore, to be no question as to the right of the claimant to have compensation. The appellant states the questions involved as follows: (1) Does the Workmen’s Compensation Bureau have jurisdiction to adjudicate the contractual relationship between an employer and an alleged insurance carrier? (2) Is an alleged contract of insurance binding upon an alleged insurance carrier when said alleged contract of insurance was wrongfully issued by one not its agent and does not conform with the requirements of the acts of assembly of the State of Pennsylvania? (3) When an alleged insured has knowledge that the supposed agent by whom said alleged contract of insurance was issued did not have authority to write insurance, can an employee recover from the alleged insurance carrier?

The first question raised by the appellant involves the right of the referee and the Workmen’s Compensation Board to make the insurance company a party defendant over its objection and to adjudicate the alleged contractual relationship between the employer and an insurance carrier. This question has been adversely decided to the appellant. The appeal in the case of Levan v. Pottstown & Phœnixville Ry. Co. et al., 3 D. & C. 385, presented the same question to the Court of Common Pleas of Philadelphia County on an appeal from the decision of the Workmen’s Compensation Board. The two questions raised in that case were the identical questions raised in the instant case, to wit: First, was there a policy of insurance in effect at the time of the accident; and, second, had the referee-power to make the insurance company a party to the proceedings over its objection? The Workmen’s Compensation Board and the referee made the insurance company a party defendant over its objection, and also held that a policy of insurance was in effect at the time of the accident. After deciding this latter question, the court declares, on page 386, “the remaining question bears upon the right of the referee, upon the application of the claimant, to make the insurance carrier a party to the proceedings. Upon first impression, it would seem that the only way in which an insurance carrier could become a party would be by application to intervene for the purpose of protecting its insured. Insurance, ordinarily, is a matter of contract between the insurer and insured, but by the Act of June 2, 1916, P. L. 769, an injured employee may also be regarded as one who is insured, since the policy is a direct promise to him.” In that case, the action of the referee and the Workmen’s Compensation Board in adjudicating the contractual relationship between the employer and the alleged insurance carrier, and the making of the latter a party defendant over its objection, was affirmed by the lower court. The insurance carrier appealed from the decision of the Court of Common Pleas to the Supreme Court, which case'is reported as Levan v. Pottstown & Phœnixville Ry. Co. et al. and Utilities Mutual Ins. Co. of New York, Insurance Carrier, in 279 Pa. 381. The Supreme Court affirmed the judgment of the lower court.

The question, on appeal, was stated by the Supreme Court as being whether, at the time of the accident, the defendant was insured by the appellant. That is one of the identical questions involved in the instant case. The referee and the Workmen’s Compensation Board had passed upon this question and found that the employer had been insured by the appellant at the time of the accident, and this action was affirmed by the Supreme Court. In passing upon the question of the right of the referee or the Workmen’s Compensation Board to make the insurance carrier a party defendant over its objection, the Supreme Court, on page 385, declared: “The suggestion that it was improper for the referee to join appellant as insurance carrier was not pressed and is without merit. The policy in question, in conformity with the statute (Act of June 2, 1915, P. L. 769), makes such carrier primarily liable to the parties entitled to indemnity for all sums that may be awarded; also obligates it to defend all suits or proceedings instituted against the employer on account of injuries to employees. Before taking any definite action in a ease, the insurance carrier must become a party of record: Bolden v. Greer et al., 257 Pa. 513, and see Chase v. Emery Manuf. Co., 271 Pa. 265. Appellant was, therefore, properly made a party of record.” And to repeat, in the case under discussion, Levan v. Pottstown & Phœnixville Ry. Co. et al., supra, the insurance carrier, which denied that at the time of the accident it had insured the employer, was made a party defendant over its objection. It had not voluntarily appeared to defend against the merits nor had it petitioned to intervene. This case squarely decides the point against the appellant in this case. See, also, Span v. Accident and Guarantee Corp., 92 Pa. Superior Ct. 418, which was appealed to and affirmed by the Supreme Court in Span v. John Baizley Iron Works et al., 295 Pa. 18, wherein the Superior Court declared: “The compensation law creates a system of elective compensation, article in, sections 301, etc., June 2, 1915, P. L. 738. The related Act of June 2, 1915, § 1, P. L. 769, requires that the insurance carrier agree to be responsible directly to the employee for payment of compensation, and the supplement of June 26, 1919, § 401, P. L. 642, art. iv, P. L. 659, defines employer as including the insurer. The insurer may be made a party to the suit: Levan v. Pottstown & Phœnixville Ry. Co. et al., 279 Pa. 381. The judgment in this ease against the insurer is in accord with the statute.”

The second and third questions involved as stated by the appellant may be restated as one as follows: Can an employee recover upon an alleged contract of insurance, issued by one not the agent of the alleged insurer and known by the alleged insurer to have no authority to write insurance, and which does not conform with the statutory requirements? This involves (1) a question of fact, the fact of actual agency at the time of the issuance of the insurance contract in this case, or the fact of knowledge on the part of the insured of the revocation of the agent’s authority, if the duty of giving notice rested upon the company. The other (2) question involved, as to the effect upon the employee’s right of recovery of the insurance company’s failure to have its contract conform to the statutory requirements, is one of law, since non-compliance in this case is uncontradicted.

1. The referee’s second finding of fact is as follows: “We find that the ‘Standard Accident Insurance Company of Detroit, Michigan,’ on the date and at the time of claimant’s accident, . . . carried the Workmen’s Compensation Insurance upon the employees of the defendant company. . . .” This is based upon the inferential finding either that the alleged agent was the actual agent or that the revocation of his authority was unknown to the insured. This finding is supported by competent evidence, as we view the testimony. Fred R. Metcalf, manager of the Philadelphia District of the insurance company, testified that the agent’s authority to write compensation insurance for his company ended on June 13, 1926, prior to which time, it is not denied, the agent was the company’s general agent with offices in the Borough of Shenandoah. Much stress is placed by the company upon a meeting on Aug. 24, 1926, held in Mr. Metcalf’s office in Philadelphia, between him and the alleged agent in the presence of Mr. Nathan Auerbach, president of the employer defendant, the latter being present for the purpose of adjusting an automobile damage claim against the company. At this meeting, Mr. Metcalf testified that Mr. Auerbach left him under the impression that he was exceedingly interested in P. B. Houck, the alleged agent, with respect to this particular agency, and said if Houck was in financial straits, that he should give him a chance, to which Mr. Metcalf rejoined that the agency was transferred to the western part of the State, and that he could not do anything for him. But this testimony of Mr. Metcalf is wholly inconsistent with a letter written two days later by him to Houck, which was admitted into evidence, in which he states: “Since you were here I have had to give up the general agency which we were holding for your office to the western end of the State. I could not guarantee them anywhere near the production this other office would produce, so we had to let go of the agency. I have been talking with Mr. Greene, and he thought it would be possible to rake up a Regional Agency. This might or might not be satisfactory to you. If we could get the Regional Agency and the general agency opened up again we could grab that. You might let me know how you feel about the Regional.” He could not have informed the president of the employer defendant in the Aug. 24, 1926, conference that Houck’s general agency was transferred to the western part of the State, if his letter announcing the transfer “since you were here,” two days later, is true. And the president of the employer defendant had no notice of this letter, as far as the testimony shows.

On the other hand, Mr. Auerbach denies the testimony of Mr. Metcalf, except as to his mission at his office to adjust an automobile damage claim. He heard Mr. Metcalf and the agent have a discussion about financial matters and asked that the agent be retained. Mr. Metcalf, he says, promised to send the agent blanks to write insurance, and adds that he did not know that the compensation business was closed between the agent and the company. In addition, on Sept. 1, 1926, Houck issued an indemnity bond for $20,000, later reduced to $10,000, in defendant insurance company on the stenographer and book-keeper of the employer defendant which was not canceled by the company, of which Mr. Metcalf says he had no knowledge, since his department had nothing to do with indemnity bonds. On Oct. 11, 1926, the binder to cover compensation risks of the defendant employer was issued by Houck. No notice was ever given the employer of the company’s refusal to continue the contract in force or to issue a policy in pursuance thereof, or that Houck was no longer its agent. The accident occurred on Oct. 22, 1926, eleven days after the binder had been issued and had taken effect, and on Nov. 6. 1926, the alleged agent wrote the company, stating that “he mailed some time ago daily reports” for various compensation insurance policies, asking their issue and mailing, among them, one for the employer defendant, advising the company that he had issued binders to cover the risks included in the daily reports. No reply whatever was made by the insurance company, although it had, on Nov. 4, 1926, returned to Houck copies of daily reports, refusing the business, which he had mailed on Oct. 29, 1926. Whether a copy of the daily report of the so-called binder in this case was included in the number mailed on the last-mentioned date does not appear.

According to Mr. Auerbach’s testimony, the conference of Aug. 24, 1926, did not disclose the fact that Houck was no longer an agent for the company, and he left that conference believing the relationship still existed. He is corroborated by the Metcalf letter of Aug. 26, 1926, hereinbefore referred to. No notice of this change in relationship was brought to the attention of the defendant employer, of which Mr. Auerbach was president.

Whether Houck was the general agent of the company on Oct. 11, 1926, was a question of fact for the referee and the Workmen’s Compensation Board, which was inferentially found against the insurance company, and there being competent evidence to support this finding, we cannot disturb it. And if the testimony of Mr. Auerbach, president of the defendant company, is to be believed, as late as Aug. 24, 1926, Houck continued to be the general agent and was so known to be by the insured, who continued to deal with him as the general agent of the insurance company in ignorance of the letter of Aug. 26, 1926, or any change in their relationship. So that, if the authority of the agent to write compensation insurance was revoked after Aug. 24, 1926, before the revocation could become effective between the insurance company and the defendant employer, notice of the same should have been given to the employer, which it is admitted was not done: 2 Corpus Juris, § 165, page 539; Grasselli Chemical Co. v. Biddle Purchasing Co., 22 Pa. Superior Ct. 426.

2. As to the effect upon the employee’s right of recovery of the insurance company’s failure to have its contract conform to statutory requirements, this question must also be decided adversely to the appellant.

On Oct. 11, 1926, the agent issued to the employer a “Binder Compensation Insurance,” in which the insurance company “acknowledges itself bound by a compensation liability insurance undertaking described in the following declarations, and during the term of this binder the actual contract of insurance shall be evidenced by such of the policy form blanks in current use by the company during such term, as are indicated by the statements given in the Declarations.” By its terms, it became effective at noon on the day of issuance, provided for cancellation upon twenty-four hours’ notice, for termination by delivery to the assured of a duly executed policy or, in any event, by expiring upon the fifteenth day after the effective date. It set out the amount of premium, by whom it was ordered, and the time of actual delivery. It was signed by the company and by the agent. The form used was an automobile binder, in which the word “compensation” was inserted instead of “automobile.” During the life of this binder the claimant was injured.

R. L. Welsh, a compensation insurance statistician of the Department of Labor and Industry, was called by the defendant company, who testified that this binder was not in accordance with the rules and regulations of the Insurance Commissioner of Pennsylvania and did not have the endorsement of the commissioner, a copy of which was admitted in evidence. It is the contention of the insurance company that the claimant employee cannot recover because the binder was not issued in compliance with subdivision (d), sections 653 and 654, of the Act of May 17, 1921, P. L. 682, known as the “Insurance Company Law of 1921,” and was, therefore, void.

No policy was issued, but the binder was prepared and delivered by the agent, which was in the form of a preliminary contract of present insurance and was necessarily of the most informal character, but not only by its express terms, but also by the decisional law of this State (Eureka Ins. Co. v. Robinson, 56 Pa. 256, also 32 Corpus Juris, § 185, page 1100), it is to be regarded as made upon the terms and subject to the conditions contained in the ordinary form of policies used by the company at the time. Although it has been decided that charter or statutory requirements that policies shall be executed in a certain manner do not apply to these preliminary contracts (32 Corpus Juris, ■§ 184, page 1100), since both sides to this controversy have treated the binder or preliminary contract as if it was a policy of insurance, we do not now decide whether the temporary or preliminary contract of present insurance is included within the terms “policy” or “agreement to deliver insurance,” as used in subdivision (d), sections 651 to 653, inclusive, page 762.

The pertinent portions of the act with which the binder did not conform, as contended by the appellant, are as follows: “Section 653. . . , No such policy or contract of insurance, nor any agreement to deliver such insurance, shall be issued except upon a form approved by the Insurance Commissioner as complying with all the terms and provisions of this act; . . .” also, “Section 654. Neither the State Workmen’s Insurance Fund, nor any insurance corporation, . . . shall issue, renew or carry any policy or contract of insurance against liability under ‘The Workmen’s Compensation Act, . . .’ except in accordance with the classifications, underwriting rules, premium rates, and schedules or merit rating, promulgated by the Rating Bureau aforesaid for the risk insured and approved by the Insurance Commissioner for such insurer. . . .”

The next paragraph provides for the filing of a complete copy of every policy, or a true copy of the substantive provisions of any policy or contract, and a true copy of every endorsement, with the Rating Bureau.

Upon a careful reading of the Insurance Company Law of 1921, supra, especially the provisions pertinent to Workmen’s Compensation Insurance, we cannot find that non-compliance by the insurance company, either in the issuance of a policy or agreement to deliver such insurance, makes such policy or agreement unlawful or void. The last paragraph of section 655, on page 764, provides: “The Insurance Commissioner shall have the power to suspend or revoke the license of any insurance company which violates any of the provisions of subdivision (d) of this article,” which subdivision (d.) is entitled “Workmen’s Compensation Insurance.” It will thus be seen that noncompliance therewith is not made a misdemeanor, as in the cases of Mechling v. Philadelphia Life Ins. Co., 53 Pa. Superior Ct. 526; Medoff v. Fisher et al., 257 Pa. 126, and Rosenthal v. Ostrow, 287 Pa. 87, cited by the appellant; neither does the act provide that failure to comply with the hereinbefore quoted sections renders the policy void. The violation of an insurance statute does not render a policy void where the statute does not so provide: 32 Corpus Juris, § 199, page 1108.

Here we have a ease in which an attempt is made on the part of an employee, suffering from an admitted compensable injury, to collect his just compensation from an insurance carrier which sets up its own non-compliance with statutory provisions relating to the form of policy, endorsements thereon, filing of copy thereof with Insurance Department, and issuance in accordance with the classifications, underwriting rules, premium rates and schedule of merit rating approved by the Insurance Commissioner to defeat recovery. The commands of the violated provisions are addressed to the company alone, the sole penalty of non-compliance is the penalty of suspension or revocation of license which is imposed on the company alone, and the insured is not regarded as in pari delicto, much less the employee of the insured, for whose especial benefit the statutory provisions in question were enacted. It would be unjust to refuse enforcement of the contract by him. The act not making non-compliance with the statutory provisions on the part of the company unlawful and void, to hold otherwise would be to impose upon the beneficiaries of the Workmen’s Compensation Law the duty of investigating the insurance policies of employers of this Commonwealth to' learn whether the company carrying the risks for their protection complied with the prescriptions of the statutory law or the regulations of the Insurance Commissioner. This we do not believe is either the policy or the intent of the law.

And now, July 22, 1929, the defendant’s exceptions are dismissed, the order of the referee is affirmed and judgment is now directed to be entered for the claimant and against the Standard Accident Insurance Company of Detroit, Michigan, in the sum of $2179.25.

From M. M. Burke, Shenandoah, Fa.


author: Hargest, P. J.,

text:
    Commonwealth v. Atanoff.

      Robert F. Fox, District Attorney, and Carl B. Shelley, for plaintiff.

      Thomas D. Caldwell, for defendant.
    Feb. 4, 1929.
   Hargest, P. J.,

This defendant is charged before William H. Charters, an alderman, in the City of Harrisburg, with the violation of section 1 of the Act of April 22, 1794, 3 Sm. Laws, 177. He was found guilty by the alderman and has appealed to this court. The facts have been agreed upon. The defendant is a barber, residing in the City of Harrisburg. On Sunday, Aug. 26, 1928, he had his place open for business and performed the usual business done in a barber shop that day for which he was paid the usual rates charged for such work.

The statute provides, in part: “If any person shall do or perform any worldly employment or business whatsoever on the Lord’s Day, commonly called Sunday, works of necessity and charity only excepted, . . . and be convicted thereof, every such person so offending shall, for every such offense, forfeit and pay $4.”

The defendant contends that under our present manner of living the keeping of a barber shop open on Sunday is a necessity and, therefore, not in violation of the statute.

In Com. v. Waldman, 140 Pa. 89, decided in 1891, the Supreme Court held that the “keeping open by a barber of his place of business on Sunday and the following of his worldly employment of shaving his customers is not a necessity within the meaning of the provision in the Act of April 22, 1794.” In that case, it was argued that because some persons found it difficult or impossible to get shaved except on Sunday, the conduct of the business on that day was a work of necessity, and Chief Justice Paxson said: “It is, perhaps, as much a necessity as washing the face, taking a bath or performing any other act of personal cleanliness. A man may shave himself or have his servant or valet shave him on the Lord’s Day without a violation of the Act of 1794. But the keeping open of his place of business on Sunday by a barber and the following his worldly employment of shaving- his customers is quite another matter; and while we concede that it may be a great convenience to many persons, we are not prepared to say, as a question of law, that it is a work of necessity within the meaning of the Act of 1794.”

The same conclusion has been arrived at in other states: State v. Frederick (1885), 45 Ark. 347; State v. Granaman (1896), 132 Mo. 326, 33 S. W. Repr. 784; McCain v. State (1907, Ga.), 58 S. E. Repr. 550; State v. Linsig (1916, Ia.), 159 N. W. Repr. 995; Gray v. Com. (1916, Ky.), 188 S. W. Repr. 354.

We agree, generally speaking, that some things may be necessities now which were not necessities when the Act of 1794 was passed, or, as stated by Judge Fuller, in Com. v. Minichello, 8 D. & C. 198, “modem conditions have transformed the luxuries of the past into necessities of the present.” And we also agree that the Sunday law should be construed in the light of the age in which we live: Pirkey Bros. v. Com. (Va.), 114 S. E. Repr. 764. Many things not known in 1794, like the running of railroads (Com. v. Fields, 4 Pa. C. C. Reps. 434), the running of street cars (Com. v. Newcomet, 18 Pa. Superior Ct. 508), the selling of railroad tickets (Com v. Fuller, 44 Legal. Intell. 442, 18 Phila. 610, 4 Pa. C. C. Reps. 429), and the selling of ice (Com v. Linaugh, 13 Dist. R. 486, 30 Pa. C. C. Reps. 466), have been held to be necessities. “Necessity” is a term incapable of exact definition, but the cases to which we have referred show that the courts of this and other states have recently held that conducting a barber shop on Sunday is not a necessity within the meaning of .the Sunday laws. Our courts have also held that there are few statutes which, in principle, are of more importance than this act (Frideborn v. Com., 113 Pa. 242), and that it is not to be frittered away by judicial' construction (Johnston v. Com., 22 Pa. 102), but is to be construed without regard to the propriety or wisdom of the legislation and solely with a view of ascertaining and enforcing the purposes set forth in it and sought to be accomplished by it: Com. v. Waldman, supra. For these reasons we cannot say that the business of a barber is a work of necessity, within the exception of the Act of 1794, which may be lawfully conducted on Sunday.

Now, Feb. 4, 1929, the conviction by William H. Charter, alderman, is sustained, the defendant is adjudged guilty, and a fine of $4 and. costs is hereby imposed upon the defendant.

Prom Homer L. Kreider, Harrisburg, Pa.