author: McConnel, J.,

text:
    Cameron, Secretary of Banking, v. Riggle.

      George F. Taylor, Jr., F. G. Moorhead and Alter, Wright & Barron, for plaintiff.

      Robert W. Darragh, for defendant.
    Dec. 1, 1930.
   McConnel, J.,

On July 19, 1930, Peter G. Cameron, Secretary of Banking, in possession of the Pittsburgh Building and Loan Association, caused a writ of scire facias to he issued in the above stated case out of the prothonotary’s office of Beaver County upon a mortgage dated July 17, 1924, given by Walter H. Riggle to the Pittsburgh Building and Loan Association, and at the same time filed a statement and affidavit of claim setting forth, among other things, the execution and delivery of a mortgage by Walter H. Riggle to the Pittsburgh Building and Loan Association on July 17, 1924, upon certain property situate in the Borough of Freedom, in the County of Beaver and State of Pennsylvania; that the said mortgage was given as security for the payment of a certain bond conditioned for the payment of S1900 to said association in monthly instalments at the rate of 50 cents per share each and every month thereafter on nineteen shares of the capital stock of said association owned by the said Walter H. Riggle until the whole amount of said debt and interest should be fully paid, together with such premiums as may have been bid or agreed upon in obtaining said loan in the manner and form prescribed in the by-laws of said association, and also pay such fines for default made as may be imposed under said by-laws. Attached to the statement of claim was a copy of said bond marked “Exhibit B.” That the above stated mortgage contained a clause which provided for the foreclosure of said mortgage in case of. default in payment of any one or more instalments of dues, premiums, interest, etc., for the space of six months; that the said bond and mortgage provided for the payment of an attorney’s commission of 5 per cent, for collection; that the defendant had paid the interest and premium due on the aforesaid bond to April 17, 1930, but has made no further payments thereon; that the Pittsburgh Building and Loan Association is a corporation organized and existing under the laws of the Commonwealth of Pennsylvania; that Peter G. Cameron, Secretary of Banking of the Commonwealth of Pennsylvania, had, after hearing, found that the said association was in an unsafe and unsound condition and on April 29, 1930, had taken possession of the business and property of said association; that on May 8, 1930, and at various times thereafter, the defendant had been notified by the plaintiff that the bond above mentioned had been called for payment, inasmuch as the Secretary of Banking was liquidating said association and had found that it was necessary that a fund be created for the protection of certain assets of the association; and it was also averred that the said Pittsburgh Building and Loan Association was, on April 29, 1930, in an insolvent condition and for that reason it had been taken over by the Secretary of Banking in pursuance of the Banking Act of 1923, as amended; that there was due and payable from the defendant the sum of $1900, with interest at 6 per cent, from April 17, 1930, plus an attorney’s commission of 5 per cent.

To this statement of claim the defendant, on Aug. 4, 1930, filed an affidavit of defense, in which he admitted all of the material facts set forth in the above mentioned statement of claim, but averred that six months had not elapsed since default had been made by the defendant under the terms of the bond and mortgage given by him to the said association and that the issuance of a scire facias upon said mortgage was premature; that the plaintiff was not entitled to the 5 per cent, attorney’s commission for collection because the defendant had not defaulted in the payment of said mortgage; that the first notice given by the Secretary of Banking to the defendant requiring payment of said mortgage to him only claimed a balance due of $933.50, and that the defendant, having received said notification on June 19, 1930, immediately made arrangements to borrow a sum sufficient to pay said $933.50 for the purpose of satisfying the said mortgage in full, and the defendant was only prevented from consummating said loan by a second notice from the plaintiff requiring him to pay the sum of $1900, with interest at 6 per cent, from April 17, 1930; that the defendant had never refused to pay the sum of $933.50 and renewed his offer to pay said amount with interest and costs of satisfaction at any time upon securing satisfaction of said mortgage by the plaintiff; that at the time he borrowed from the Pittsburgh Building and Loan Association the above mentioned sum of $1900, the same was payable in monthly instalments of $9.50 on account of principal of said debt, $9.50 per month on account of interest on said debt, and a further sum of $3.17 called for as a premium in connection with said loan, although there was no competitive bidding for said loan at the time the same was made; and that, in the opinion of the affiant, he was entitled to a further credit on the loan originally made of the monthly premium paid by him as above set forth; that the claim of plaintiff for all sums in excess of $933.50 was unjust, unlawful and extortionate.

After this affidavit of defense was filed, the plaintiff, on Sept. 19, 1930, issued a rule upon the defendant to show cause why judgment should not be entered against him for want of a sufficient affidavit of defense, for the reason that the affidavit admits that the property of the Pittsburgh Building and Loan Association had been taken possession of and was being liquidated by the Secretary of Banking because the said association was in an insolvent condition; admits the execution by the defendant prior thereto of the bond and mortgage of $1900, and admits that nothing had been paid upon said mortgage except the dues, interest and premiums accruing before April 17, 1930; that all premiums paid by the defendant were premiums earned and the contract between defendant and the Pittsburgh Building and Loan Association was divisible; that the scire facias could be issued upon said mortgage immediately upon a default, and the affidavit of defense admits that there is a balance due on said mortgage of $933.50, with interest from April 17, 1930.

On Oct. 6, 1930, the defendant filed a supplemental affidavit of defense, in which he alleged that he was at all times ready and willing to pay the instalments due upon the above mentioned bond and mortgage, and that the appointment of a receiver of said building and loan association was through no default of the defendant; that the stock owned by the defendant in the Pittsburgh Building and Loan Association had never been assigned to said association; withdrew the admission that $933.50 was due the plaintiff, and demanded proof of the exact amount due from the defendant to the plaintiff; that, inasmuch as the defendant was charged a monthly premium of $3.17 for the money loaned to him by the Pittsburgh Building and Loan Association, through the failure of said association and the appointment of a receiver the said association had violated its agreement, and that the defendant was, therefore, entitled to receive a further credit on account of the balance due on said bond and mortgage of the full amount of the premiums paid at the rate of $3.17 per month.

On Oct. 7, 1930, the plaintiff filed an amendment to the rule for judgment for want of a sufficient affidavit of defense, setting forth that no competitive bidding was necessary since the premium fixed on said loan was 2 per centum; that a mortgage given to and held by an insolvent building and loan association may be foreclosed forthwith, and that the affidavit of defense so amended was vague and insufficient in law.

This case was placed upon the trial list for the October Special Term, 1930, and also came up for argument before the court in banc on Oct. 7, 1930, and at that time was argued by counsel for both plaintiff and defendant. When the case was reached upon the trial list it was agreed by counsel for both plaintiff and defendant that the trial should be continued, as the case could probably be disposed of upon the motion for judgment for want of a sufficient affidavit of defense.

The ease, then, is before us now on the sufficiency of the affidavit of defense. The affidavit as filed admits the giving of the bond and mortgage upon which a scire facias had been issued; admits that the defendant has borrowed from the Pittsburgh Building and Loan Association $1900, which he was to repay in monthly instalments as set forth in the bond and mortgage; that under the terms and conditions of the said bond and mortgage and the by-laws of the building and loan association, the defendant agreed and undertook to pay monthly $9.50 on account of the principal of said debt, $9.50 per month on account of interest, and a further sum of $3.17 called for as a premium in connection with said loan; admits that the defendant paid the dues, interest and premium called for in said bond and mortgage to April 17, 1930; admits that the property and assets of the Pittsburgh Building and Loan Association have been taken over by the Secretary of Banking of the Commonwealth of Pennsylvania because it was in an insolvent condition, and merely claims that the issuance of a scire facias by the plaintiff against the defendant was premature and that he is entitled to certain credits on account of his indebtedness of $1900, consisting of the dues and premiums paid by him to April 17, 1930; and denies that the plaintiff is entitled to any attorney’s commission of 5 per cent.

In disposing of this matter now, all of the allegations in the statement of claim are to be taken as true, unless they are denied by the affidavit of defense, and all averments of fact set forth in the affidavit of defense are to be taken as true.

In the first place, the defendant contends that the plaintiff has no right to issue a scire facias upon the mortgage given by him to the said association until it has been six months in default under the terms and conditions of his mortgage.

In our opinion, this position of the defendant cannot be sustained. While it is true that the mortgage of the building and loan association was to be paid only in instalments and payment of the principal could not be enforced unless the mortgage was in default for six months, it is also the law that whenever a building and loan association becomes insolvent and its affairs must be liquidated by a receiver or by the Secretary of Banking, owing to the necessities of the case, all of the loans made by the building and loan association to its stockholders become immediately payable: Strohen v. Franklin Saving Fund and Loan Ass’n, 115 Pa. 273, 279; Leechburg B. & L. Ass’n v. Kinter, 233 Pa. 354, 356; Haspel v. Moffitt, 32 Pa. Superior Ct. 344, 347. In this respect, therefore, the affidavit of defense is, in our opinion, insufficient.

In the second place, the defendant claims in his affidavit of defense that the plaintiff is not entitled to recover the attorney’s commission of 5 per cent.

The bond given by the defendant to said association provided for an attorney’s commission of 5 per cent, for collection, and, as we understand it, this provision is inserted in the bond for the purpose of securing to the Pittsburgh Building and Loan Association the reasonable and necessary expenses of collection: Lewis v. Germania Savings Bank, 96 Pa. 86, 92. It appears from the statement of claim and is admitted in the affidavit of defense that in June, 1930, the defendant was notified to pay his mortgage to the Secretary of Banking and did not do so; nor did he even tender to the Secretary of Banking the amount which the defendant admitted was due to the plaintiff, and as a result of the defendant’s refusal to pay his loan the Secretary of Banking was required to employ counsel, have a scire facias issued upon the mortgage and defend in this court the plaintiff’s right to recover the indebtedness due from the defendant under the terms and conditions of his mortgage. Five per cent, of the amount of the present mortgage and interest would only be a reasonable compensation to the plaintiff’s counsel for the service which they have performed in the present case, and those services were rendered necessary by the neglect of the defendant. In our opinion, so much of the affidavit of defense as denies the right of the plaintiff to recover a commission of 5 per cent, is also insufficient.

In the third place, the defendant contends that because George F. Taylor, Jr., Special Deputy Secretary of Banking, on June 19, 1930, acting through one of his employees, wrote a letter to the defendant, in which he alleged that the total amount due to the Secretary of Banking from the defendant under his mortgage to the Pittsburgh Building and Loan Association was only $933.50, the plaintiff is bound by this statement of the balance due and cannot recover from the defendant any more than $933.50.

This amount was evidently arrived at by giving the defendant credit for his dues, interest and premiums paid on account of the mortgage, and if a mistake was made by the Special Deputy Secretary of Banking in calculating at that time the amount due upon this mortgage, as the defendant did not at that time pay the mortgage and have it satisfied, we can see no reason why the Secretary of Banking would be estopped by this mistake on the part of his agent. The Secretary of Banking in this proceeding is simply the representative of the creditors of the Pittsburgh Building and Loan Association for the purpose of liquidating its affairs, and he would have no right voluntarily to part with any of the assets of said association except for the purpose of paying a legitimate claim against it or distributing its assets in accordance with the provisions of the laws of this Commonwealth, and if under the law the defendant is not entitled to a credit for the dues and premiums paid by him, the Secretary of Banking could not lawfully allow him such credit.

In the case of Haspel v. McLaughlin-Lyons, 38 Pa. Superior Ct. 334, it was held that after a building and loan association is insolvent the dues paid on account of shares of stock cannot be appropriated to the reduction of the mortgage debt and that on the eve of the insolvency of the corporation the secretary of the building and loan association could not bind the association by a statement made to the borrower that he had applied the value of the borrower’s stock to the payment of the mortgage and that the borrower need not make any further payments to the association as his mortgage had been canceled; and if the secretary of a building and loan association cannot, before insolvency, apply the value of a borrower’s stock to the payment of the stockholder’s mortgage, still less could the Secretary of Banking, after insolvency, so cancel any part of the mortgage of the borrower. If the defendant, at the time he received this notice in June, 1930, from the Secretary of Banking, had paid off his mortgage and had it satisfied, then a different question might have arisen; but as the matter stands now, in our opinion, the plaintiff is not bound nor estopped by the notification sent to the defendant on June 19. 1930, and in this respect the affidavit of defense is insufficient.

In the fourth place, the defendant takes the position that he is entitled to credit on account of his mortgage for the dues paid by him on account of his stock in the building and loan association.

It was held in the case of York Trust, etc., Co. v. Gallatin, 186 Pa. 150, that where, by a specific agreement between the building and loan association and the borrower at the inception of the loan, all payments made by the borrower on account of his stock in the building and loan association should be forthwith applied to the reduction of his indebtedness, this agreement is binding upon both parties, and in case of the insolvency afterwards of the building and loan association, the borrower is entitled to have the value of his stock credited on account of the mortgage. This proposition of law was afterwards reluctantly approved by the Supreme Court in the ease of Kurtz v. Campbell, 218 Pa. 524, where the court said (page 527): “This case is clearly within the rule of York Trust, etc., Co. v. Gallatin, 186 Pa. 150. The majority of the court are of opinion that on principle that case was erroneously decided, but as it has stood in the books for nine years and many contracts have been made in reliance on it, the principle of stare decisis should prevail, and the authority of that decision should not now be disturbed.” But in a number of subsequent cases it was held by both the Supreme and Superior Courts of this state that the case of York Trust Company v. Gallatin was decided upon its own facts and this decision would not be extended to cover any other case in which the facts were not precisely similar, and that where a stockholder simply pledges his stock as collateral security and agrees to pay monthly instalments of dues and interest, the payment of dues on stock is not a payment on account of the loan. The value of the stock can be at any time applied by definite and distinct agreement between the building and loan association and the borrower to the reduction of his indebtedness; but this agreement cannot be made by the building and loan association on the eve of insolvency nor after insolvency; and in order that payments by way of dues on account of stock shall be applied to the cancellation of a mortgage, there must be a clear and specific agreement by both the borrower and the lender that the payments shall be so applied, and without such an agreement the amount of dues upon stock is not to be applied to the cancellation of the borrower’s indebtedness. These principles are well established by many decisions: Freemansburg B. & L. Ass’n v. Watts, 199 Pa. 221; Globe Mutual B. & L. Ass’n v. Schutte, 29 Pa. Superior Ct. 265; Haspel v. McLaughlin-Lyons, 38 Pa. Superior Ct. 334; Haspel v. Moffitt, 32 Pa. Superior Ct. 344; Consolidated B. & L. Ass’n v. Shipley, 95 Pa. Superior Ct. 232; Leechburg B. & L. Ass’n v. Kinter, 233 Pa. 354; Kurtz v. Campbell, 218 Pa. 524.

There is no statement in the affidavit of defense that there was any agreement between the Pittsburgh Building and Loan Association and the defendant that the dues which he should pay on account of his stock were to be applied to a cancellation of his indebtedness. The affidavit of defense simply says that at the time when he borrowed from the Pittsburgh Building and Loan Association he was borrowing the sum of $1900, payable in monthly instalments of $9.50 on account of the principal of said debt, and $9.50 per month on account of the interest on said debt. The affidavit of defense does not even set up an assignment of the stock owned by the defendant to the building and loan association as collateral security for the payment of his indebtedness, but specifically avers that his stock was not so assigned to the association, and the bond signed by the defendant and admitted by him shows that the only agreement between the defendant and the Pittsburgh Building and Loan Association was that he was to pay to the said building and loan association the sum of $1900, with interest thereon in monthly instalments, or dues at the rate of 50 cents per share each and every month thereafter on nineteen shares of the capital stock of said association owned by said Walter H. Biggie until the whole amount of said debt and interest should be fully paid. There is no allegation in the affidavit of defense as to any special agreement at any time between the defendant and the Pittsburgh Building and Loan Association to the effect that his dues paid were to be applied to a cancellation of his indebtedness. The present case is, therefore, nothing but the usual one in which the borrower pays certain dues on account of stock, and it is well settled that under such circumstances the dues so paid, in case of insolvency of the building and loan association, are not to be applied to the reduction of the borrower’s indebtedness. In our opinion, therefore, so much of the affidavit of defense as claims credit for the dues paid to the Pittsburgh Building and Loan Association by the defendant is also insufficient.

In the fifth place, the defendant contends that he is at least entitled to credit for the premiums paid by him on account of his loan.

There is no mention in the bond given by the defendant to the Pittsburgh Building and Loan Association of the amount of premium which the defendant was to pay. The obligation simply says: “together with such premiums as may have been bid or agreed upon in obtaining said loan in the manner and form prescribed in the by-laws of said association.” No copy of the by-laws of this association is shown by the pleadings, and while it is alleged in the ninth paragraph of plaintiff’s statement of claim that the defendant has paid interest and premium on the aforesaid obligation to April 17, 1930, and the affidavit of defense admits this, there is no mention of the amount of premium paid in any of the pleadings, except in the fourteenth paragraph of the affidavit of defense, where it is set forth: “At the time when he [the defendant] borrowed from the Pittsburgh Building and Loan Association, plaintiff through receiver in this ease, that he was borrowing the sum of $1900, payable in monthly instalments of $9.50 on account of the principal of said debt; $9.50 per month on account of interest on said debt, and a further sum of $3.17 called for as a ‘premium’ in connection with said loan.” So it does appear from the pleadings that the defendant has been paying from the time he got his loan until April 17, 1930, a premium of $3.17 per month on account of his loan, and as the affidavit of defense says there was no competitive bidding for said loan at the time it was made, then we can take it as established that no premium was bid by defendant for said loan, and, therefore, the premium paid must have been a fixed premium payable periodically.

The question for us to determine, then, is whether the defendant is entitled to a credit on account of his loan for the premium of $3.17 payable in a fixed amount monthly.

It is evident from the pleadings that the premium which the defendant was to pay was not a gross premium deducted from his loan at the time he received his money, because it is admitted by both plaintiff and defendant that the defendant, on July 18, 1924, received a loan of $1900, and to secure the payment of same gave to said building and loan association a bond and mortgage in the sum of $1900. Therefore, the premium which he was to pay must have been a fixed premium payable in instalments. It was not a premium bid for the loan at the time it was made, and if the defendant paid this premium in periodical instalments for at least two years, the payment must have been under some agreement between the defendant and the Pittsburgh Building and Loan Association or as fixed by the by-laws.

In order to decide this question of the right of the defendant to a credit for premiums paid by him, we can take judicial notice of the acts of assembly of this Commonwealth governing building and loan associations and also the general history of such associations.

The first act of assembly authorizing generally the incorporation of building and loan associations is the Act of April 29, 1874, § 37, P. L. 73. Therein it was provided that the premiums taken by a building and loan association for the preference or priority of such loans should not be deemed usurious; but the capital stock might be issued in series, in one or in successive series, in such amount as the board of directors or the stockholders might determine; that the officers of said building and loan association should hold stated meetings, at which the money in the treasury, if over the amount fixed by charter as the full value of a share, should be offered for loan in open meeting and the stockholder who should bid the highest premium for the preference or priority of loan should be entitled to receive a loan of not more than the amount fixed by charter as the full value of a share for each share of stock held by said stockholder, etc.

The next act of assembly was the Act of April 10, 1879, P. L. 16, whereby building and loan associations were authorized to charge and receive the premium or bonus bid by a stockholder for preference or priority of right to a loan, in periodical instalments, which should be taken to be a payment as it fell due in contradistinction to a premium charged and paid in advance.

The next act was the Act of June 4, 1901, P. L. 403, by the terms of which building and loan associations were allowed to receive bids of premium or bonus for preference or priority of loan in writing, whether from members or other persons who were not members but intended to become such if loans were obtained by them, or to receive such bids from others duly authorized in writing by members or by persons intending to become such, but provided that such bids should be received only in open meetings as bids were then required by law to be received.

The next was the Act of May 14, 1913, P. L. 205, under the provisions of which building and loan associations were authorized to make loans to the members of the association who should bid the highest premiums for the preference or priority in procuring loans, and the borrower from such association might agree, in writing, upon a given rate of premium not to exceed 2 per centum per annum upon the amount of the loan in' addition to the interest to be paid on such loan without bidding for preference or priority.

The next was the Act of April 8, 1927, P. L. 179, which amended the Act of 1913 so as to allow loans to be made to persons intending to become members of the association, but did not change the Act of 1913, providing for a fixed premium not to exceed 2 per centum per annum upon the amount of the loan. A further amendment was made by the Act of April 30, 1929, P. L. 901, but not in any matter which is material to the present case.

After the Act of 1874 was passed, and for many years thereafter, building and loan associations were chartered and authorized to issue certain amounts of capital stock. This capital stock was subscribed for by stockholders soon after the corporation was formed and if any stock was subscribed for after that time the subscriber, in order to become a member, would have to pay back dues from the time the corporation was formed until he became a subscriber, so that all of the shares of stock issued by the association would mature at the same time. Each week, at meetings of the board of directors, whatever money was on hand available for loan was sold to the highest bidder for a certain bonus or premium. This premium was added to the mortgage or obligation given by the borrower to the association and went into the general funds of the association before the association ran out. In order that there should be complete equality among the stockholders, every stockholder was required to borrow from the association an amount equal to the stock subscribed for by him. Therefore, when the stock of the association was finally matured, every member had paid a premium which was used for the purpose of increasing the value of his stock and, therefore, caused it to mature more quickly than it would if the stockholder had only paid dues and not a premium, and every stockholder alike paid a premium and participated in the premium paid by others, so that they were equally treated. When the stock of each stockholder had matured, then all of the loans were canceled and the corporation was ended.

Or the corporation issued its capital stock in series at such times and in such amounts as might be fixed by the board of directors, and each one of these series was carried on by the corporation as if it were a separate organization from the other series belonging to the corporation, and when the stock in each series matured, then that stock was applied to the payment of the indebtedness due from each stockholder and the stock of that series was canceled and that series ended.

After the passage of the Act of 1913, a building and loan association could be formed which did not issue its stock in series at all. It simply issued stock up to the limit designated in its charter to any'person who would subscribe therefor at any time. A certain amount was fixed as the value of each share of capital stock, either $100 or $200, and the stockholder agreed to pay dues of a certain amount each week or each month, and if he borrowed any amount from the association he agreed to pay interest at the rate of 6 per cent, per annum in periodical instalments, either weekly or monthly, and also agreed to pay in the same kind of periodical instalments a fixed amount as premium; and this premium could not exceed 2 per centum per annum upon the amount of his loan, as it was so limited by the Act of 1913. What amount was paid by the stockholder as dues went to his credit upon the books of the building and loan association; what he paid as interest, premiums and fines went into a general fund which, annually or semi-annually, was divided pro rata upon the books of the building and loan association and upon the stock of each stockholder as dividends upon his stock. Each stockholder, then, received, either annually or semi-annually, a dividend on his stock pro rata according to the number of shares held by him in the association out of the general fund received by the building and loan association from interest, premiums, fines and any other profits which the building and loan association might receive; and, of course, any losses which might be sustained by the building and loan association were deducted from this general fund.

As we understand it, practically all of the building and loan associations in this state are conducted and carried on at the present time in the manner which we have hereinabove last described, and that system of conducting a building and loan association has arisen since the passage of the Act of 1913. It can readily be seen that the method in which building and loan associations were operated in this state prior to the passage of the Act of 1913 was very different from the manner in which they have been conducted since that time.

The defendant contends that he is entitled to a credit on account of his loan of the premiums paid by him, which would amount to $218.73, sixty-nine months, from July 17, 1924, to April 17, 1930, at the rate of $3.17 per month. The plaintiff contends that as the premium charged the defendant on this loan does not exceed 2 per centum per annum upon the amount of his loan, the premium paid by him is to be considered just as interest, and as he has received his proportionate share of this premium periodically by dividends upon his stock, he is not entitled to a credit for it on account of the principal of his loan any more than he is entitled to a credit upon said principal for the interest paid by him.

This is a very nice question and one which, as we see it, is new and is not to be determined in the same manner as the question of a gross premium was determined by the courts prior to the Act of 1913. The defendant relies upon the decision of the Supreme Court in the case of Strohen v. Franklin Saving and Loan Ass’n, 115 Pa. 273 (1887). This case was a scire facias upon a building and loan mortgage after the association had passed into the .hands of a receiver. The defendant was the owner of twenty-one shares of stock in the building and loan association of a par value of $200 each. He borrowed from the association $1932 and gave to the association a mortgage of $4200, which included a premium bid by him for priority of loan of $2268. The receiver claimed that he was entitled to recover the $4200, with interest, and the defendant claimed that he was required to pay nothing except what he had actually received with interest. The court, in an opinion by Justice Paxson, held that the defendant should be charged with the sum actually received on his mortgage with interest on the same and credited with actual payments of interest, but he was not to be allowed credit upon his mortgage for the payments which he had made upon his stock, the court saying (page 279):

“The insolvency of the company, as before observed, puts an end to its operations as a building association; to a certain extent, it also ends the contract between it and its members, respectively, and nothing remains but to wind it up in such a manner as to do equity to creditors and between the members themselves. As regards the latter,' care should be taken to adjust the burdens equally and not to throw upon either borrowers or non-borrowers more than their respective share. That result may be reached by requiring the borrower to repay what he actually received, with interest. He would then be entitled, after the debts of the corporation are paid, to a pro rata dividend with the non-borrower for what he has paid upon his stock. He will thus be obliged to bear his proper share of the losses. To allow him to credit upon his mortgage his payments on his stock would enable him to escape responsibility for his share of the losses and throw them wholly upon the non-borrowers. In other words, the borrower would escape without loss. It will not do to administer the affairs of an insolvent corporation in this manner.”

In that case the premium was a gross premium and, as it had not been paid into the association, but was merely a paper charge against the defendant, he was allowed, upon the insolvency, to have a credit upon his mortgage of the amount of this premium.

The defendant also relies upon the case of Twin Cities National Building and Loan Ass’n v. Lepore, 17 Pa. C. C. Reps. 426 (1896). This case was decided by the Court of Common Pleas of Allegheny County in an opinion by Ewing, P. J., and while we have great respect for any opinion of Judge Ewing, we are not bound by his decision in this case. The case was a scire facias sur mortgage issued by the Union Trust Company of Pittsburgh as receiver of the Twin Cities National Building and Loan Association against Rafale Lepore, and was decided upon a case stated between the plaintiff and the defendant. In the case stated it appeared that the defendant had borrowed $2500 from the building and loan association upon twenty-five shares of stock in the association and had given a bond and mortgage upon certain real estate owned by him in the City of Pittsburgh in the sum of $5000. The $2500 loaned to the defendant was paid to him in various amounts at various times from May 1, 1894, to Dec. 2, 1894. After the execution of said bond and mortgage the defendant paid dues, interest and premiums as prescribed by the said bond and mortgage and the by-laws of the said association until Oct. 8, 1895, in the sum of $523.80, of which sum $270 was in the nature of monthly payments on stock, or dues, and the balance, $253.80, was on account of interest and premiums. The plaintiff contended that it was entitled to receive from the defendant the full amount of said mortgage and all arrearages, and the defendant contended that he was required to pay nothing except the amount of money paid by it to him, with interest thereon from the date of such payment to the date of the appointment of a receiver, and that he was entitled to a credit as against this sum for all moneys paid by him to said association on account of interest and premiums.

The court held that this case was ruled by the cases of Strohen v. Franklin Saving and Loan Ass’n, 115 Pa. 273, and State Saving and Loan Ass’n v. Carroll, 15 W. N. C. 523 [15 Pa. C. C. Reps. 522], and that the defendant was entitled to a credit for all interest and premiums paid by him. We cannot find the case of State Saving and Loan Ass’n v. Carroll at 15 W. N. C. 523, and it is probably, also, a lower court decision. The court held that the defendant was entitled to a credit for the premiums paid by him on account of his loan from the building and loan association, and in delivering the opinion of the court Judge Ewing said (page 429):

“In the cases cited the premiums were deducted from the face of the mortgage. In the present case they were, payable monthly. In each case it was a rate of interest above six per cent, authorized by statute, the consideration of which is the guarantee of long time and small payments for the borrower’s indebtedness.

“There is not any difference in principle, and should not be in practice, whether the premium excess of interest be taken from the» face of the mortgage or be paid in instalments. When the association becomes insolvent, and is unable to perform its part of the contract, it is entitled to the amount it has in fact loaned, with interest thereon, less the amount paid by the mortgagor on the mortgage, whether it be in the nature of interest or premiums. The instalments on stock and fines go with the stock.”

It is perfectly clear, then, that in this case the premiums were paid monthly and were not deducted from the face of the mortgage, as in the case of Strohen v. Franklin Savings and Loan Association, and the facts, then, in this ease were not at all the same as in the Strohen ease, and the learned court says: “In each case it was a rate of interest above six per cent, authorized by statute.” That is not true, as the premium, under the various acts of assembly which we have hereinabove mentioned, was not usurious, provided it was fixed as set forth in the various acts of assembly, and provided, after the Act of 1913 was passed, that it did not exceed 2 per centum per annum of the amount loaned. The judge also says that “there is not any difference in principle, and should not be in practice, whether the premium be taken from the face of the mortgage or be paid in instalments.” It might, perhaps, be true that there was not any great difference whether the premium was taken from the face of the mortgage or paid in periodical instalments as building and loan associations were operated in 1896 at the time this decision of Judge Ewing was rendered.

Under the Act of 1879, which was in operation in 1896, building and loan associations would still be operated in series and not as they have been operated since the passage of the Act of 1913, and, therefore, in our opinion, this case decided by Judge Ewing does not control the decision of the present case, as the circumstances are entirely different, and building and loan associations, after the Act of 1913 was passed, have been operated very differently from the manner in which they were operated prior to the passage of that act.

The defendant also relies upon the decision of the Superior Court in the case of Stoddard v. Kline, 51 Pa. Superior Ct. 16, and 51 Pa. Superior Ct. 23. These were appeals by both plaintiff and defendant from the decision of the Court of Common Pleas of Armstrong County in the case of Josiah C. Stoddard, Receiver of the Washington National Building and Loan Association of Washington, D. C., v. Peter H. Kline. In those cases the mortgagor was allowed a credit on account of his mortgage of the premiums paid by him to the building and loan association; but these decisions were based upon the fact that, as the Washington National Building and Loan Association was a foreign corporation and not authorized to do business in the State of Pennsylvania, the payment of premiums by the mortgagor was usurious and he was entitled to a credit for the premiums paid. These cases were decided in 1912, prior to the passage of the Act of 1913, and clearly do not support the defendant’s contention, even if they had been decided after the passage of the Act of 1913, for, in the present case, the plaintiff is a corporation under the laws of the Commonwealth of Pennsylvania and entitled to all of the rights of such corporations.

As we see it, the premiums paid by the defendant in the present case went into the general funds of the association, the same as the interest or any other profits received by the association. It is really an excess interest which he pays, and having paid it as excess interest, and these premiums having gone into the general funds of the building and loan association, and having been distributed by the building and loan association as dividends pro rata to all of the stockholders, of which the defendant was one, he is not entitled to a credit on account of his mortgage of the premiums paid by him.

After a building and loan association passes into the hands of a receiver, the duties of the receiver are to close up the affairs of the1 building and loan association, and this is to be done as equitably as possible, as was said by Mr. Justice Fell in delivering the opinion of the Supreme Court in the case of Leechburg Building and Loan Ass’n v. Kinter, 233 Pa. 354, 356:

“The insolvency of the building association put an end to its operations as an association, and the duty of the trustee was to wind up its affairs in such a manner as to do equity between it and its creditors and between the stockholders. This is distinctly ruled in Strohen v. Franklin Saving Fund and Loan Ass’n, 115 Pa. 273, and the method of adjusting the equities between stockholders is defined in the opinion of the court, to wit, to require a borrower to repay what he had actually received, with interest, and to allow him, after all the debts are paid, a pro rata dividend with the non-borrowers on the payments made on his stock.”

And, in our opinion, the only way in which the affairs of a building and loan association, as they have been conducted since 1913, can be equitably adjusted is to consider the periodical payments of premium exactly as interest and allow the receiver to recover from the borrower the amount received from the building and loan association, with interest at the rate of 6 per cent., deducting therefrom only the interest paid by the borrower to the building and loan association. If that is done, all of the stockholders are treated fairly and. the borrower receives, upon a distribution of the assets of the corporation, the value of his stock as increased by his dividends and dues pro rata with the other stockholders.

However, there are two reasons why, in our opinion, the Pittsburgh Building and Loan Association cannot retain the premiums paid by the defendant on account of the loan made to him by said building and loan association.

First. Because, under the Act of 1913, a building and loan association cannot charge a member any premium without bidding for preference, as provided in that act of assembly, if the premium charged exceeds 2 per centum per annum. According to the pleadings in the present case, the premium charged the defendant was $3.17 per month and for twelve months would amount to $38.04. Two per centum of the $1900 loaned to the defendant by the building and loan association would amount to $38, so that in this case the building and loan association did charge the borrower more than 2 per centum per annum, and it being admitted by the pleadings that there was no competitive bidding for this loan, the building and loan association is not entitled to the premiums paid by this defendant. While the amount of the excess charge is small, nevertheless we cannot see in principle where there is any difference between an overcharge which is small and one which is large, and cannot see why the doctrine of de minimis should he applied in aid of the building and loan association and at the expense of the borrower.

Second. The Act of 1913 says: “It shall be competent and lawful for the borrower from such association to agree, in writing, upon a given rate of premiums,” etc., and nowhere in the pleadings does it appear that the defendant did agree in writing upon a given rate of premium, and we think that, before a building and loan association can legally charge a fixed premium, as provided for in this act of assembly, it must show that the borrower did agree in writing upon a fixed rate of premium before it can require or retain such premiums.

In our opinion, then, the plaintiff in this case cannot legally retain the premiums paid by the defendant. These premiums amount to $218.73, being sixty-nine months at $3.17 per month.

Order.

Now, Dec. 1,1930, the affidavit of defense filed by the defendant in this case is adjudged to be insufficient, except as to the premium paid on account of his loan from the Pittsburgh Building and Loan Association, and the prothonotary is directed to enter judgment in favor of the plaintiff for $1900, with interest from April 17, 1930, at the rate of 6 per cent, per annum, and an attorney’s commission of 5 per centum upon said principal and interest, deducting, however, therefrom the amount of premiums paid by the defendant, $218.73, the amount due to be liquidated by the prothonotary.

Prom William P. Sehutte, Beaver Palls, Pa.


source: Caselaw Access Project

author: Biddle, P. J.

license: Public Domain

text:
    Gates et ux. v. Penn Mutual Fire Ins. Co. of Chester County.

      Frederick J. Templeton and Caleb S. Brinton, for plaintiffs.

      Douglass D. Storey and Alton W. Lick, for defendant.
   Biddle, P. J.

This action is based upon a policy of insurance issued by the defendant company to the plaintiffs jointly, insuring a frame dwelling and storeroom in the village of South Enola, East Pennsboro Township, in the sum of $4000. On Nov. 23, 1927, Daniel Gates, one of the plaintiffs, entered into a written contract with Everett W. Danner for the sale and conveyance by Danner of the property insured to Daniel Gates, the agreement providing for the transfer of the title on or about Nov. 28, 1927. Before this agreement was carried into effect, the plaintiffs, on Dec. 2, 1927, procured the policy of insurance referred to from the defendant, and on Dec. 10, 1927, the contract with Danner not having been completed by a transfer of title, and no payment beyond one dollar to bind the bargain having been made by Daniel Gates, the property insured was totally destroyed by fire. Notice was given of this loss to the defendant company, which, after an examination, refused payment, alleging that the plaintiffs had not title to the property destroyed, and, therefore, were not entitled to recover. The plaintiffs thereupon brought this action, and the defendant filed an affidavit of defense in lieu of a demurrer, alleging that for a number of reasons the statement of claim, which set out the facts above recited, failed to set out a valid cause of action.

July 11, 1928,

While we are not prepared to sustain all of the reasons advanced by the defendant in support of the demurrer, we think it does appear that the present action in its present form cannot be sustained. The plaintiffs’ statement shows, so far as it shows anything in that respect, that Alberta Gates had no interest in the property destroyed by fire whatever, and she had, therefore, so far as appears from the pleadings, no insurable interest therein. The policy upon which the action is brought is to the plaintiffs jointly, and the action itself is a joint one. In view of this, and in view of the fact that it appears from the plaintiffs’ own statement that Alberta Gates had no interest whatever in the property destroyed, and suffered no injury thereby, we think that she has no standing to recover in the present action and that the demurrer should, therefore, be sustained.

Whether Daniel Gates had such an interest that he might have recovered under his contract with Danner, or whether he might have recovered in an action in his name alone against the present defendant on the policy in suit, we are not here called upon to determine; but we are satisfied that the plaintiffs may not maintain a joint action where their statement shows that one of the plaintiffs had no insurable interest whatever in the property insured; and it is on this ground that we sustain the demurrer.

And now, the demurrer to the statement of claim is sustained, and it is directed that judgment thereon be entered in favor of the defendant and against the plaintiffs.

From Francis B. Sellers, Carlisle, Pa.


author: Knight, J.,

text:
    Bean et al. v. Pugh et al.

      B. J. Brownback and H. M. Brownback, for plaintiffs.

      William F. Dannehower, Jr., for defendants.
    May 29, 1930.
   Knight, J.,

Findings of fact.

1. The defendants own lots Nos. 8, 9, 10 and 11 on plan of lots of Rose Terrace in West Norriton Township, said plan being recorded in Deed Book No. 849, page 600; these lots face upon the Benjamin Franklin Highway. In the rear of the above mentioned lots, and adjoining thereto, the defendants own six additional lots. The size of each of the defendants’ lots is 40 by 125 feet.

2. The plaintiffs are the owners or occupiers of real estate in the general vicinity of the defendants’ premises.

3. The plaintiff, M. H. Bateman, owns a lot on which is erected a nine-room brick house. This lot immediately adjoins the defendants’ premises on the east. The property is worth $8500.

4. The plaintiff, Harry Buckwalter, owns a tract of land 70 feet in front on the Benjamin Franklin Highway and 800 feet in depth. On this tract is erected a dwelling house in which Mr. Buckwalter resides. His premises are 150 feet west of those of the defendants.

5. The plaintiff, Frank S. Carver, owns a property on the highway, in which he lives. It is 300 feet to the west of the defendants’ premises.

6. The plaintiff, Lewis Custer, resides on Rose Avenue about 225 feet from the defendants’ premises.

7. The defendants conduct on their lots what is commonly termed an “automobile graveyard.” They buy old and worn-out cars, which they bring to the “graveyard,” where the usable parts are removed; the balance, consisting of the body and other parts, is junked. The defendants handle between 150 and 200 automobiles a year, and now have 125 old cars upon their premises.

8. After removing the parts that are usable or of value, the defendants turn over what is left of the car, including the body, to a man by the name of John Di Joseph for the purpose of junking.

9. Di Joseph drags the dismantled machines to a point about 150 feet from the highway and 125 feet from the rear of the Bateman house. Here the wrecks are placed in what has been described as a crater, a space surrounded by a pile of old tin about eight feet high. In this space the cars are burned and what is valuable of the residue removed as junk. As many as seven cars have been burned at one time. The burnings take place two or three times a week and have continued since September of 1929.

10. The burning bodies cause large clouds of smoke, and this smoke enters the houses of some of the plaintiffs, especially the plaintiff Bateman. Soot and pieces of burned material enter the Bateman house so that they cannot hang up clothes in the yard, have the windows open in warm weather or enjoy their porch. In addition, the burning upholstery and old rubber emits a very unpleasant odor, which further contributes to the discomfort and distress of the Bateman and Buckwalter households.

11. The business of the defendants is accompanied by noise; there is much hammering and the moving about of the old cars with a tractor. The plaintiffs are disturbed by these noises, but they do not materially affect the enjoyment of their homes.

12. There have been one or two explosions on the defendants’ premises during the preceding six months, but these explosions have not been frequent enough or severe enough to constitute a nuisance or endanger the safety or properties of the plaintiffs.

13. The immediate neighborhood is mixed in character; there are two gasoline service stations, a garage, auction room and eating places within close proximity of the “graveyard” and the home of the plaintiffs. In the general vicinity, however, the number of dwellings exceeds the number of business places.

Discussion.

The right of the plaintiffs to the use and enjoyment of their own property cannot be questioned. The general obligation of the defendants so to use their property as not to injure others is equally clear. The plaintiffs complain that the use and enjoyment of their homes has been impaired by the smoke, odor and noise emanating from the defendants’ automobile “graveyard.”

These business enterprises are newcomers in the category of alleged nuisances, and we have been unable to find a case where it has been sought to restrain their operation. That the business of the defendants is not a nuisance per se is apparent; that it may become a nuisance when conducted in a residential neighborhood is just as clear.

We have found the neighborhood in question one of mixed character, both residential and business. The number of residences greatly predominates over the number of business properties, and the latter are not manufacturing enterprises but stores, service stations and wayside refreshment places, such as are usually found along arterial highways on the outskirts of congested ' areas of population. The frequent burning of automobile bodies, with the consequent emission of smoke, soot and unpleasant odors, in such a neighborhood, is a nuisance. These agencies enter into the home of at least one of the plaintiffs, Bateman, subject him and his family to discomfort and distress, prevent them from opening their windows in warm weather, deprive them to a large extent of the use of their porch, and depreciate the value of the home.

On the other hand, the noise caused by the moving and tearing apart of the automobiles, and the removal of parts, is not so unreasonable as to be the subject of equitable restraint. It is, at most, an annoyance or inconvenience of a kind incident to the neighborhood and surroundings.

The principal objection to the defendants’ “graveyard” is the unsightly appearance that it presents, but equity'is powerless to restrain those things which only affect the taste, the personal pleasure or preference of the individual.

From the foregoing facts, and discussion of those facts, we draw the following

Conclusions of law:

1. Equity has jurisdiction.

2. The burning of cars, as conducted by the defendants, constitutes a nuisance.

3. The plaintiffs are entitled to an injunction, restraining the defendants, their agents or employees, from burning automobile bodies or parts in the manner now practiced upon the premises described in the bill, and from permitting the same to be done by others.

4. The defendants should pay the costs.

Decree.

And now, May 29, 1930, after final hearing, it is ordered, adjudged and decreed that the prothonotary mark these findings of fact and conclusions of law filed, thereafter to become a part of the record of the case, and enter the following decree nisi:

And now, May 29, 1930, is is ordered, adjudged and decreed that an injunction be issued, restraining the defendants, their agents or employees, from burning automobile bodies or parts in the manner now practiced upon the premises described in the bill, and from permitting the same to be done by others; and that the defendants pay the costs.

The prothonotary is further ordered and directed to give counsel in the case notice, as required by the rules of equity practice, that unless exceptions thereto are filed within ten days of this date, the decree entered above nisi will become the final decree as of course.

From Aaron S. Swartz, Jr., Norristown, Pa.


author: Boyer, J.,

text:
    Barnes v. Barnes.

      Webster Grim, for plaintiff; John L. DuBois, for defendant.
    Aug. 4, 1930.
   Boyer, J.,

This is a case arising upon exceptions filed to the confirmation of the sheriff’s sale made under the above writ of fieri facias on May 9, 1930. The exceptions set forth a number of objections to the confirmation of the sale, the first being that a sale-bill was not posted on the premises for the required ten days prior to the sale. The other exceptions relate in general terms to insufficient advertisement and inadequacy of price.

To these exceptions an answer was filed by the plaintiff in the writ, who is also the purchaser of the premises. The answer is a specific denial of the averments contained in the exceptions. No replication was filed to the answer.

Depositions were taken on behalf of the plaintiff which disclose that a hand bill was posted on the defendant’s premises on April 30, 1930, being nine full days prior to May 9th, the date of sale. The depositions as well as the uncontradicted answer show conclusively that the defendant attended the sheriff’s sale with his attorney; that through his attorney he publicly warned the sheriff and prospective bidders that he would file exceptions to the sale if one were made; that the price for which the property was sold was adequate; that no injustice was done to, or hardship suffered by, the defendant by reason of any insufficient notice or advertisement; that there were no bidders for the property excepting the plaintiff in the writ.

There are, therefore, no disputed questions of fact for the court to determine. The facts set forth in the answer, when not traversed, are taken to be true: German v. Conover, 240 Pa. 11. The defendant has not offered or given security to guarantee costs, or an advance in price, if resold.

This leaves but one question for the court to determine, namely, whether the posting of the hand bill or notice on the premises is a sufficient eomplianee with the requirements of the law, and, if not, whether the sale must be set aside for that reason?

The 62nd section of the Act of June 16,1836, P. L. 755, 772, provides that one of the hand bills “shall be fixed by the sheriff or other officer upon the premises, and the others of them in the most public places of the county or city, at least ten days before such sale.” The Act of July 22, 1919, P. L. 1089, regulating the advertising of sheriff’s sales of real estate, provides: “Such number of said hand bills shall be posted as shall be designated by special or standing order of court of the county out of which the writ, process, order or decree of court issued. . . .” This act is silent as to any requirements for the posting of a notice on the premises, or at any other particular place, or of the length of time for which they shall be posted. Apparently, the principal purpose of the latter act was to require the hand bills to be printed instead of written and to require and regulate the publication of notice in newspapers. While the act is not designated as a supplement to, or an amendment of, the Act of 1836, nevertheless, that is the practical effect of the act.

This court has no standing rule under the provisions of the Act of 1919 regulating the posting of hand bills. In the absence of such rule of court, in our opinion, the matter is still regulated by the Act of 1836, and the provision requiring the posting of notice upon the premises at least ten days before the sale is still in effect in this county.

Was the posting of the hand bill on the premises in this case a fatal deviation from the requirements of the Act of 1836? Must this sale be set aside by reason of the failure of the sheriff to post a notice upon the premises for the full ten days prior to May 9, 1930? As a sufficient answer to these questions we refer to the very able and exhaustive opinion of Judge Stewart in Best v. Blue Ridge Water Supply Co., 7 D. & C. 549, with which opinion we fully concur. In that case the notice was posted only four days prior to the sale. The substance of that opinion is, that the direction of the act as to the length of time for the posting of a notice on the premises is merely directory, and a failure to fully comply with its requirement will not in itself invalidate a sale. See, also, Jones v. Vail, 5 Lacka. Jurist, 257.

The failure to post the notice on the premises for the full time required may be one of those technical defects at which a court, in the exercise of its discretion and equitable powers, may grasp in order to relieve a defendant from a clear hardship or to direct a resale where a substantial increase in price has been guaranteed by bond, &c.: Ritter v. Getz, 161 Pa. 648. However, where there is no proof of inadequacy of price, and no guaranty of an increased price upon resale, and where the defendant attended the sale and had an opportunity to bid or to produce bidders, and where, as in this case, the defendant attempted to defeat the sale and prevent bidding by threatening prospective purchasers with litigation, the court will not set aside the sale on a mere technical objection which does not go to the merits of the application. On this question we again refer to the opinion in Best v. Blue Ridge Water Supply Co., supra.

In the opinion above referred to, the court discusses and distinguishes the only cases cited by defendant in this ease, namely, Rinehart v. Tieman, an unreported Philadelphia case, decided in December, 1836, and Brown v. Lodge, 1 W. N. C. 443.

Now, Aug. 4,1930, the exceptions to the sheriff’s sale are dismissed and the sale and deed are confirmed.

From Isaac J. Vanartsdalen, Doylestown, Pa..


author: Hicks, J.,

text:
    Mook et al. v. Janowitch et al.

      George Ellis and John F. Whalen, for plaintiffs.

      James Gallagher, for defendants.
    Feb. 17, 1930.
   Hicks, J.,

The plaintiff in this case has sued the defendants upon a book account, of which a true and correct copy is attached to and made part of the statement of claim. The defendant has obtained a rule to strike off the plaintiff’s statement as not conforming to the requirements of the Practice Act of May 14, 1915, § 9, P. L. 483, in that it fails to set forth whether the contract between the parties was oral or written.

Section 9 of the Practice Act provides: “. . . In actions on contracts, it [the statement of claim] shall state whether the contract was oral or in writing. . . .” There is some diversity of view throughout the state in the county court decisions about the necessity of this averment in suits upon book accounts.

The view that the averment, whether or not the contract sued upon was oral or written, in suits upon book accounts, is necessary, is set out in the ease of International Clay Machine Co. v. Keystone Clay Co., 29 Dist. R. 753, in which the court held: “An action on a book account is clearly on contract. The statute does not distinguish between an expressed and an implied but only between an oral and a written contract. . . . and the statement should clearly set out whether the contract in suit was oral or in writing. A purchase over a counter at a store makes an oral contract. A purchase by correspondence makes a written contract.” This case was followed in the cases of Binghampton Ice Cream Co. v. Nicholas, 2 D. & C. 603, and Spector et al. v. Walcot Manuf. Co., 10 D. & C. 333. The cases of Stabinsky v. King, 18 Schuyl. Legal Rec. 227, and Philadelphia Gear Co. v. Climax Machine Co., 29 Dist. R. 493, cited by counsel for the rule as supporting the view set out in International Clay Machine Co. v. Keystone Clay Co., supra, do not apply, since both cases were suits not upon a book account but upon a contract.

This court has previously passed upon this question in the case of Bartlett Garages, Inc., v. Charles F. Kaier, 15 Schuyl. Legal Rec. 81, Berger, J., wherein this court held: “This is an action upon a book account. It is not an action upon an express agreement, either oral or written, and, therefore, does not fall within the provisions of section 9 of the Practice Act of 1915. . . . As previously stated, in our opinion, the cause of action is not founded upon a contract. If it were and the plaintiff had failed to state whether it was oral or in writing, advantage of the defect could only have been taken by a motion to strike the plaintiff’s statement from the record, in pursuance of section 21 of the Practice Act.” This case was followed by Endlich, P. J., in the case of Hine v. Horn, 30 Dist. R. 499, wherein it was held: “Charges made in a book of original entry import both sale and delivery of the goods to the defendant: Hubbard v. Tenbrook, 124 Pa. 291, 295, and it is that which in a suit upon a book account constitutes the plaintiff’s cause of action. Except what the law implies, there is no contract, written or oral, about it, and, therefore, there is nothing to be averred on the subject under the above provisions of the Practice Act.” Bartlett Garages, Inc., v. Charles F. Kaier, supra, is also followed in. the cases of Myers Accessory House v. Campbell, 10 D. & C. 396; Raub Supply Co. v. Forrest, 5 D. & C. 678; Austin-Western Road Machinery Co. v. Herr et al., 9 D. & C. 290, and Steinman v. Lenig, 11 D. & C. 214. Following our former decision in Bartlett Garages, Inc., v. Charles F. Kaier, supra,, we must discharge the rule.

And now, Feb. 17, 1930, the rule to show cause why the statement of claim filed in this case should not be stricken from the record is hereby discharged, and the defendant is allowed fifteen days from this date in which to file an affidavit of defense to the statement of claim.

From. M. M. Burke, Shenandoah, Pa.


author: Patterson, P. J.,

text:
    Masood v. The United States Fire Ins. Co. of New York.

      Robert J. Puderbaugh, for plaintiff.

      Robert A. Henderson and J. M. Stoner & Sons, for defendant.
    June 7, 1930.
   Patterson, P. J.,

Plaintiff brought an action in assumpsit to recover from the defendant insurance company a loss sustained as a result of fire which destroyed valuable rugs and office furniture. The verdict of the jury was in favor of the plaintiff. The defendant insurance company, filed this motion for a new trial, in which it is alleged that the plaintiff, Dr. Masood, was incompetent to testify to the value of the property destroyed, and, secondly, that it was error to have admitted in evidence the proofs of loss, over the objection of the defendant.

Without passing upon the first reason assigned, we are satisfied that the second reason is sufficient for the granting of a new trial. It was error to permit plaintiff to offer in evidence generally the proofs of loss which, as far as we know, were sent out and considered by the jury. An examination of the record fails to show that this evidence was restricted or limited for any purpose whatsoever. This should have been done.

The Supreme Court, in Insurance Co. v. O’Neill, 110 Pa. 548, has held: “They are not even prima facie evidence to the jury of the quantity and quality of the goods lost. The insured cannot thus prove the particulars or extent of his loss by his own ex parte statement even under oath.”

This ruling has been followed in Lattavo v. Virginia Fire Ins. Co., 88 Pa. Superior Ct. 433; Cole Bros. v. Assurance Co., 188 Pa. 345, and Sutton v. Insurance Co., 188 Pa. 380.

Order.

Now, June 7,1930, it is ordered, adjudged and decreed that the motion for a new trial is hereby sustained and new trial granted as prayed for.

From Robert W. Smith, Hollldaysburg, Pa.


author: Gordon, Jr., J.,

text:
    Albert M. Greenfield & Co. v. Asset-Interest B. & L. Ass’n.

      Wolf, Block, Schorr & Solis-Cohen, for plaintiff.

      Joseph Moss and Emanuel Moss, for defendant.
    Jan. 9, 1931.
   Gordon, Jr., J.,

This proceeding in equity is before us upon a rule for a decree for the amount admitted to be due by the answer to the bill.

The bill avers and the answer admits that the plaintiff, which is a shareholder in the defendant building and loan association and owned shares on which it had paid in a total of $1275, gave notice to the association on March 3,19-30, of its desire to withdraw as a shareholder, and that the defendant has failed and refused to pay the withdrawal value of its shares to it. The bill also avers that a merger of the defendant with other building and loan associations is in contemplation, to which it objects and in which it declines to join. The relief asked for is a decree restraining the contemplated merger and directing payment to the plaintiff of the value of its shares as of the date of notice of withdrawal. On Aug. 30, 1930, the defendant filed preliminary objections to the bill, in which it contended, inter alia, that the plaintiff had an adequate remedy at law. On- Sept. 19th of the same year, the objections were overruled, with leave to the defendant to answer over. The defendant then filed its answer to the merits, in which, in addition to the admissions noted above, it averred that, at the time the notice of withdrawal was given, the defendant association was insolvent; that, in the then condition of its affairs, the actual value of the plaintiff’s stock, as shown by an appraisement by expert appraisers, was $725; that there were eighty-two applications for withdrawal received by the board of directors in advance of the plaintiff’s demand; that, since the institution of the suit, the defendant had completed the merger referred to and had merged with two other associations; and that, under the terms and conditions of the merger, all notices of cancellation and withdrawal were canceled and payment of all withdrawals was postponed for a period of two years. The answer also reiterates the contention of the preliminary objection that the plaintiff has an adequate remedy at law; but as this question was decided adversely to the defendant by the dismissal of the preliminary objection, it is not open to discussion at this time.

It is evident from the pleadings as outlined above that, were it not for the merger of the defendant with other building and loan associations, which occurred subsequent to the date of the suit, a judgment could not be entered against the defendant, since insolvency is a defense to a suit by a withdrawing shareholder for the value of his shares: Brown v. Victor Building Association and Stone v. New Schiller Building & Loan Association et al., both of which were decided by the Supreme Court on Jan. 5, 1931, and are not yet reported. This defense has been lost to the defendant here, however, by its merger with other corporations, for it has been held that a merger of one corporation with another effects a dissolution of the original corporation; and merging corporations are required by law to set aside sufficient to take care of the demands of dissenting shareholders who decline to go along with the new management. Although the pleadings do not disclose that this was done when the merger was consummated, it may be assumed that it was, as equity will presume one to have done everything which the law makes prerequisite to the lawful performance of an act. To the extent, therefore, of the proportionate value of the shares of withdrawing and non-consenting shareholders, the corporation will be assumed to have performed its duty under the law and to have placed itself in a position to respond to their lawful demands. The recent decisions of the Supreme Court, referred to above, which hold that a shareholder of a building and loan association cannot withdraw when the association is insolvent, or when the withdrawal might tend to render it insolvent, do not rule the case before us, because no question of insolvency can arise to prevent a non-consenting shareholder from demanding and receiving a proportionate share of his association’s assets before the merger is consummated. The same basic equitable considerations which prevent a shareholder from withdrawing from an embarrassed association, and thus securing a preference, would operate to prevent his fellow-shareholders from compelling him against his will to go along with the merger plans by refusing to pay, or set aside for, him the proportionate value of his shares before taking over to the new association their proportionate shares of the assets.

The proportionate value of the plaintiff’s shares being admittedly $725, that sum at least is presently due to it, and the only question that remains to be considered is one of procedure. The defendant contends that there is no provision in the equity rules for a rule such as that taken by the plaintiff for the amount admitted by the answer to be due. It is true that there is no specific rule upon this subject such as there is in the common pleas practice. Rule 91 of the equity rules, however, provides that “in all cases where these rules do not apply, the practice shall conform, as nearly as may be, to the practice in courts of law in regard to the particular matter; and in all other respects shall be regulated by the practice in equity prescribed by the Supreme Court of the United States, so far as the same may reasonably be applied, consistently with the local circumstances and local convenience of the county where the court is held, not as positive rules, but as furnishing just analogies to regulate the practice.” It is evident that this rule was intended, in all matters not specifically covered by rule, to adapt “as nearly as may be” the practice of the law courts to the working out of questions arising in equity. Thus, for example, a defendant who is sued in equity and fails to challenge the jurisdiction of the court because of the existence of an adequate remedy at law thereby waives that objection and subjects himself to the jurisdiction of equity. In this manner a case might arise which would not be strictly equitable in character and as to which the general equity rules would be inapplicable. By adapting the common pleas rules applicable to suits at law in like matters, however, justice and equity can be done expeditiously and in an orderly and effective procedure. This was clearly one of the reasons for the adoption of Rule 91, and the case before us falls, in our judgment, well within both the spirit and the letter of that rule. The Act of May 81, 1893, P. L. 185, provides for the taking of judgments at law for the amount admitted to be due in affidavits of defense, and the practice there described was properly followed by the plaintiff in its rule for a decree for the amount admitted to be due in the answer to the bill.

The defendant’s objection to this practice upon the ground that but one final decree can be entered in a case is also without merit. It is true that, as to final decrees, the general rule is that only one can be entered in an equity proceeding. Equity practice is replete, however, with many instances in which payments ascertained to be presently due, or acts the performance of which are presently required that justice may be done, are directed. In such a situation the fact that the command of the decree is pro tanto final and conclusive furnishes no equitable reason for withholding the immediate relief which the case demands. A decree for the immediate payment by receivers of ascertained and admitted debts and the postponement of disputed claims to a later time is but one of the instances in which equity frequently requires anticipatory payments to be made before the entry of a final decree. This objection, therefore, is without merit.

The plaintiff’s rule for a decree for the sum of $725, being the amount admitted by the defendant’s answer to be due, is, therefore, made absolute, without prejudice to the plaintiff to proceed for the balance of its claim.

Counsel for plaintiff will submit to the court a form of decree to be entered in conformity with this opinion.


author: McLean, P. J.,

text:
    Yencha v. Kirkendall, City Controller.

      Robert Challis, Jr., for plaintiff; Collins & Collins, for defendant.
    May 28, 1930.
   McLean, P. J.,

Plaintiff, appointed to the office of assistant purchasing agent by the Council of the City of Wilkes-Barre, obtained a writ of mandamus in the alternative form to compel the city controller to approve vouchers for salary. Defendant filed his return and plaintiff demurred thereto, raising the single question of law, to wit, the legal effect and validity of Ordinance No. 733, enacted by the Council of the City of Wilkes-Barre Feb. 4, 1930, fixing, inter alia, the salary of office of the assistant purchasing agent.

Defendant contends (1) that the ordinance is invalid because containing more than one subject; (2) the ordinance, if valid, does not operate to fix the salary of an officer appointed prior to its enactment.

The ordinance in question reads as follows:

“No. 733. An ordinance fixing the salaries of certain city officials and employees.

“Section 1. Be it ordained by the City Council of the City of Wilkes-Barre, and it is hereby ordained by the authority of the same: That from and after the first Monday of January, 1930, the salaries of the city officials and employees hereinafter named be and the same are hereby fixed as follows:

“Assistant purchasing agent, $2500 per annum, payable in semi-monthly instalments of $104.16.

“Clerk, Department of Public Safety, $2205 per annum, payable in semimonthly instalments of $91.87.

“Additional assistant chief engineer, fire department, $2500 per annum, payable in semi-monthly instalments of $104.16.

“Section 2. That all ordinances or parts of ordinances conflicting with the provisions of this ordinance be and the same are hereby repealed.”

The following facts are admitted in the pleadings:

1. By resolution adopted Jan. 21, 1930, George M. Yencha was appointed assistant purchasing agent. The resolution reads as follows:

“Be it resolved by the City Council of the City of Wilkes-Barre: That George Yencha be and he is hereby appointed as assistant purchasing agent for the balance of the term, commencing on the 22nd day of January, 1930, and ending on the first Monday of January, 1932. Said person to perform such duties and receive such salary as shall from time to time be designated by City Council.”

2. On Jan. 22,1930, George M. Yencha assumed the duties of said office.

3. On Jan. 27, 1930, Ordinance No. 733 was presented to the city council and was enacted on Feb. 4, 1930.

With defendant’s first contention we cannot agree. Ordinance No. 733, supra, expresses clearly in its title its subject, to wit: “To fix the salaries of certain city officials and employees.” While it serves to fix the salaries of several officials, nevertheless, the subject is sufficiently broad to include the salaries of all officials sought to be affected.

Defendant’s second contention depends upon the construction to be given article v, section 3, clause 13, of the Act of June 27, 1913, P. L. 568, which reads as follows:

“To create any office, public board or department which they may deem necessary for the good government and interest of the city; to prescribe the powers thereof, and to regulate and prescribe the terms, duties and compensation of all such officers, and of all officers who are members of any public board of any department so created. But no ordinance shall be passed increasing or diminishing the salary or compensation of any officer, or of any member of any public board or department, after his or their election or appointment: Provided, however, that in case of the creation of any public board or department, the members thereof shall, except where otherwise pro-Tided by this act, be elected or chosen by the council; but no two persons from the same ward shall serve on the same board at the same time: Provided, that the provisions of this section as to the creation of any public board or department, and prescribing the duties thereof, shall not apply to the creation of any board of commissioners of water-works of any city wherein the title to the water-works therein located is in the name of the commissioners of waterworks.”

The meaning of this section is clear and precludes the increasing or diminishing of the salary of an office created under this statute after the appointment or election of the officer concerned. That the position of assistant purchasing agent is an office as distinguished from mere employment clearly appears from the ordinance creating the same and from the duties to be performed, for the position was created, its term fixed and the salary determined by ordinances (Ordinance No. 12, enacted Dec. 16,1913, and Ordinance No. 92, enacted Nov. 20, 1914). The preamble of Ordinance No. 92, supra, recites the necessity for the office in the following language:

“Whereas, 5000 purchase orders are issued yearly by the city; and

“Whereas, to properly handle said purchase orders and to obtain the best prices in connection with purchases made by the city, it will require the services of one person constantly.”

And further in the body of the ordinance we find the duties to be such as are designated by the superintendent of finance and the purchasing agent. The duties are of grave importance, that of purchasing supplies for the city, a responsibility which could not devolve upon a mere employee and a duty which could not be delegated by council except in the manner provided by law. (Act of May 27, 1919, § 6, P. L. 310, as amended by the Act of May 1, 1929, P. L. 1200).

The ordinance (No. 733, supra), passed on Feb. 4,1930, attempts to fix the salaries of certain officials as of the first Monday in January, 1930; it is unnecessary here to determine its retroactive effect, for this ordinance having been passed after the election or appointment of the assistant purchasing agent could not serve to either diminish or increase his salary.

It was clearly the duty of the controller upon presentation of the warrants to ascertain if the salary provided therein was in accordance with the ordinance applicable thereto. In the present case, the assistant purchasing agent was entitled to the salary provided in the ordinance (No. 92, supra), in force at the time of his appointment or election and to nothing more. The ordinance (No. 733, supra) is a valid exercise of lawful authority, but affects only the salaries of officials therein referred to that might be appointed or elected subsequent to its passage.

The office of assistant purchasing agent was created by Ordinance No. 12, passed Dec. 16, 1913, as amended by Ordinance No. 92, passed Nov. 20, 1914, and the salary therein fixed at $1500 per annum, and thus the matter stood at the time (Jan. 21,1930) of the passage of the resolution appointing the plaintiff to the office of assistant purchasing agent.

Inasmuch as the issue under the pleadings is one of law, the question involved can be disposed of by the- court without the intervention of a jury. Accordingly, mandamus refused and judgment directed to be entered for the defendant.

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


author: Alessandroni, J.,

text:
    Gross v. Feinberg.

      Thomas J. Lanshe, for plaintiff; Jules Pepper, for defendant.
    Nov. 20, 1930.
   Alessandroni, J.,

An attachment under the Act of 1869 was made by the plaintiff. The affidavit in support of it averred that the defendant was indebted to the plaintiff in the sum of $300 upon a loan duly acknowledged in writing by the defendant; that the defendant owned a grocery store at the time the loan was made and orally promised to repay the loan from the proceeds of the sale of the grocery business; that on Nov. 18, 1929, the defendant sold the grocery store and did not comply with the Bulk Sales Act by making an affidavit including the plaintiff as a creditor; that $250 had been deposited with A. S. Harzenstein to pay certain indebtedness which did not include that of the plaintiff.

The attachment issued on Nov. 29, 1929, and on Dec. 18, 1929, the defendant petitioned for the present rule, averring that the defendant is not removing his property out of the jurisdiction of this court with intent to defraud creditors ; that at the time the attachment was issued he owned a parcel of real estate and that the attachment was issued without legal justification and was instituted only to harass the defendant. Plaintiff filed an answer to this petition, denying that the beneficial interest in premises No. 6042 Chester Avenue was in the defendant at the time the attachment was issued and averring that the sole purpose of the rule was to frustrate the payment of an admitted obligation.

It is significant that the petition to dissolve the attachment does not deny the fact averred in the affidavit for the attachment that the sale of the grocery store was made in violation of the Bulk Sales Act in so far as the plaintiff is concerned. It was held by von Moschzisker, J., in Albert Ochse Co. v. Drda et al., 34 Pa. C. C. Reps. 151, that the facts that will constitute a fraudulent debtor under the Bulk Sales Act of 1905 will without further proof constitute a fraudulent debtor under the Act of 1869. This case was cited with approval in Kelly Co. v. Snyder, 58 Pa. Superior Ct. 1, and affirmed in Armstrong Grocery Co. v. Hutchison, 13 D. & C. 231.

The Bulk Sales Act of May 23, 1919, P. L. 262, section 3, provides that if there is a violation of its provisions as to creditors of the vendor, “then such sale or transfer shall be fraudulent and void. . . .” The Act of 1905 simply recited that a violation of its terms should render the sale fraudulent and voidable.

The mere fact that the defendant in his depositions denied that the obligation to the plaintiff was to be one of the grocery business is immaterial, inasmuch as it has been decided that the Bulk Sales Act applies to all creditors without any class preference: Miller v. Myers, 300 Pa. 192. It, therefore, appearing under our authorities that, as a strict legal proposition, a violation of the Fraudulent Debtors’ Act constitutes the offender a fraudulent debtor as defined under the Act of 1869, the petition to dissolve this attachment should be dismissed. The defendant does not deny that he owes the sum claimed.

And now, to wit, Nov. 20,1930, the rule to dissolve attachment is discharged.


author: Smith, J.,

text:
    Atherholt et al. v. De Muth et al.

      Joseph Klapp Nicholls, for plaintiffs; Joseph L. Wase, for defendants.
    Nov. 24, 1930.
   Smith, J.,

This action was instituted by a bill in equity, wherein the plaintiffs averred that Bernard MacMacMn, by indenture dated June 25, 1915, and duly recorded, conveyed unto Robert Ferguson, inter alia, a lot of ground, situate on the north side of Latona Street, beginning at a point 101 feet 6 inches east of the east side of Sixtieth Street, in the City of Philadelphia; thence extending north at right angles to Latona Street 101 feet 6 inches to a three feet wide alley running east and west from the west side of Fifty-ninth Street north of Latona Street; thence east along the south side of said alley 421 feet 71 inches to the west side of Fifty-ninth Street; thence south along Fifty-ninth Street 95 feet and I of an inch to the northwest side of Baltimore Avenue; thence southwest along the northwest side of Baltimore Avenue 11 feet and i of an inch to the north side of Latona Street; and thence west along the north side of Latona Street 478 feet 7! inches to the place of beginning, under and subject to conditions and restrictions that the land should not be divided into lots of less than a width of 16 feet in front, and that all buildings to be erected on the ground should front on Latona Street, excepting that three stores and dwellings, or store-flats, might be erected on the triangle formed by Latona Street and Baltimore Avenue; that the fronts on Latona Street should be finished generally as dwellings; that the store front doors or entrances must be on Baltimore Avenue; and that no buildings should be erected except private dwellings, except the three stores and dwellings, or store-flats, to be erected on the triangle; but the grantees, their heirs and assigns, were given the right of building stores and garages on the portion of a lot included in the same deed, fronting on Baltimore- Avenue; that by sundry conveyances the land became vested in the plaintiffs; that dwelling houses were erected on the lots of ground and occupied as residences by plaintiffs or their tenants; that the conveyances to plaintiffs were subject to the restrictions; and that they are entitled to enforce the restrictions against all other owners of property constituting a portion of the tract conveyed by MacMackin; that there was conveyed to Reinhold Edelschein, one of the defendants, a lot of ground on the north side of Latona Street, beginning at a point at the intersection of the north side of Latona Street with the northwest side of Baltimore Avenue; thence extending west on the north side of Latona Street 45 feet II inches; thence north on a line at right angles to Latona Street 84 feet II inches to a point on the southwest side of Fifty-ninth Street; thence southeastward along the southwest side of Fifty-ninth Street 95 feet and 8 of an inch to the northwest side of Baltimore Avenue; thence southwestward along the northwest side of Baltimore Avenue 11 feet and Í of an inch to the place of beginning. That the lot bounded on the south by Latona Street, on the east by Fifty-ninth Street, and by the three feet wide alley on the north is strictly residential in character, and that it will be of great advantage to plaintiffs to enforce the restrictions; that the lot of Edelschein immediately adjoins the property of Margaret D. Atherholt, one of the plaintiffs, at No. 5903 Latona Street, and is in the immediate vicinity of the properties belonging to the other plaintiffs; that the defendants have commenced tearing down and removing the dwelling house erected on the lot belonging to Edelschein, to erect a public service gasoline and oil station; that work is proceeding, and, unless restrained, they will continue the erection of a public service gasoline and oil station, which, according to the plans, will cover a large part of the lot, and be of the character of such stations usually erected in the City of Philadelphia, consisting of a central building or office, with underground tanks for holding gasoline, and other tanks above ground for holding oil, and will consist of apparatus for pumping gasoline from the tanks and supplying it to motor cars; that the whole will be illuminated by brilliant lights at night; and plaintiff is informed that the. public service gasoline and oil station will be leased by the defendant, Reinhold Edelschein, to the Texas Company for the purpose of operating a public service gasoline and oil station.

It is averred in the bill that the operation of the public service gasoline and oil station at this location will be offensive, and that the construction will be of buildings prohibited by the restrictions contained in the deeds of conveyance; that it will be offensive by reason of the fact that a great number of automobiles and heavy trucks will stop there to procure gasoline and oil, horns will be sounded to attract the attendants’ attention to get service, and drivers will race their motors when starting and backing into place before the gasoline pumps, thereby making loud and disturbing noises; heavy trucks starting and stopping will cause serious vibrations to plaintiffs’ premises; lifting and dropping of heavy hoods and tools and the explosion of gas from the rear of machines will cause offensive noises; great quantities of fumes and noxious odors from burnt gasoline, oil, smoke and carbon monoxide will be emitted, annoying and offending plaintiffs; these continuous and annoying odors will be present by night as well as by day and make it difficult for persons in the same neighborhood, including plaintiffs, to sleep and secure rest in the rooms in the premises which face Edelschein’s premises.

It is further averred that plaintiffs served notice upon the defendants that the construction and operation of a public service gasoline and oil station at this location will be in violation of the building restrictions, and that plaintiffs would seek legal means to prevent it.

The bill contains prayers for an injunction and for general relief.

Upon motion, after hearing, a preliminary injunction was issued, restraining defendants until final hearing from constructing on the lot No. 5901 Latona Street, or conducting thereon, a gasoline or oil station for the service of motor vehicles belonging to the public. Security was entered in the sum of $5000.

A joint answer was filed by the defendants, Edelschein and Edgar De Muth, in which it was denied that the defendants intended to or were violating the restrictions, and averred that the lot of defendants is not correctly described in the bill of complaint, but that it faces the southeast side of Baltimore Avenue and the northeast side of Fifty-ninth Street, and does not in fact face any portion of Latona Street and could not rightfully be regarded as a portion thereof; that it should be described as comprised within the area covered by the three feet wide alley, by the Cobbs Creek Parkway, and Latona Street and Fifty-ninth Street on the north and east sides, and by the line of the Pennsylvania Railroad on the south side, and by the line which would run through the west wall of premises Nos. 5927 and 5914 Latona Street, through Latona Street and Baltimore Avenue to the railroad.

It is denied that the neighborhood surrounding the property is residential in character.

It is further averred in the answer that the restrictions have already been violated in that the triangle formed by Baltimore Avenue and Latona Street, according to the restriction, should have contained three stores and dwellings, but now contains four stores and dwellings; that the buildings should have been finished generally as dwellings, but Nos. 5901 and 5903 Baltimore Avenue have mercantile windows that have been boarded by the American Stores Company in violation of the restriction on Latona Street.

It is averred that the gasoline and oil station is to be strictly for the sale of gasoline and oil, and will not be used for repairing automobiles, tires, etc.; that it will be leased to the Texas Company for operation as a public gasoline and oil station. It is denied that the lights will in any way affect the neighborhood, and averred that the illumination will be invisible to tenants and occupiers of the houses on Latona Street; and that the station will be of artistic design and the construction a benefit to the neighborhood.

It is denied that the erection of the contemplated building or operation of a public gasoline and oil station will be offensive or in violation of any law or restriction.

An answer was filed by the Texas Company, in which the averments in the answer of De Muth and Edelschein were adopted as its own, and denied that the erection and operation of the public gasoline and oil station on the property in question will violate the Ordinance of City Council approved Jan. 30, 1923, as amended July 10, 1928; and denied that the ordinance prohibits the erection and construction or alteration of any building to be used as a public garage or for commercial purposes within the entire 200 feet area; and averred, on the contrary, that the ordinance prohibits such construction on land abutting on thoroughfares only and not upon adjoining property within the area, and that the property does not abut on Cobbs Creek Parkway.

It is further denied that the erection, construction or operation of a gasoline station is in violation of any restriction or law.

Baltimore Avenue, running generally in easterly and westerly direction in West Philadelphia, crosses Fifty-ninth Street at right angles. Bisecting this 90-degree angle and running to the west is Latona Street. This produces, at the northwest corner of Fifty-ninth and Latona Streets, a triangular property having its hypothenuse on Fifty-ninth Street, its altitude as a party line to the residential property located on the northern side of Latona Street to its west, and its base the north side of Latona Street, with its southeastemmost angle touching Baltimore Avenue.

In a proceeding in equity the plaintiffs, being owners and residents of Latona Street and the owner of No. 5900 Cobbs Creek Parkway, asked for a perpetual injunction, restraining the defendants, their agents, etc., from constructing and operating a gasoline and oil service station on the property located at No. 5901 Latona Street. The court had issued a preliminary injunction. The case came on for a final hearing, when testimony was taken. The chancellor, after hearing the testimony and viewing the site and neighborhood, issued an injunction, restraining the defendants, their agents, etc., from erecting, constructing and operating a public gasoline and oil station on No. 5901 Latona Street, Philadelphia. The defendants have filed forty exceptions to the chancellor’s rulings and findings of fact and conclusions of law.

There are two questions involved: (1) Is the neighborhood a residential one, where the construction and operation of a public gasoline and oil station would constitute a nuisance; and (2) would such a construction and operation violate certain building restrictions established by the original grantor in 1915?

The testimony shows that Latona Street and Cobbs Creek Parkway are strictly residential in character and that Baltimore Avenue and Fifty-ninth Street south of Baltimore Avenue have a mixture of residences, stores and garages.

The chancellor has found that the site upon which the defendants desire to construct and operate a gasoline and oil station is in a residential section and is governed by the terms of the restrictions contained in the deed of Bernard MacMackin, under date of June 25, 1915, and recorded in Deed Book E. L. T. 492, page 464, etc. He has, furthermore, found that such proposed gasoline and oil station in a residential section is a nuisance per se.

An examination of the testimony and of the site itself - shows that the chancellor was justified in his finding that this particular section is residential in character. The mere fact that there are stores or garages on Baltimore Avenue more remote than this site does not destroy the plaintiffs’ right to the protection to which they are entitled under the law.

In Krocker v. Westmoreland P. Mill Co., 274 Pa. 143, Mr. Justice Walling (at page 146) said:

“So long as the more remote industrial developments have not destroyed the quiet and cleanliness of plaintiffs’ homes, they are entitled to protection from this immediate encroachment which does.”

A reading of the restriction contained in the deed and an examination of the site in question shows that it comes within the terms of that restriction and that the chancellor was justified in his finding.

In the case of Hoffman and MacMackin v. Parker, 239 Pa. 398, where one of the plaintiffs is the original grantor of this tract of land, it will be observed that the property was then regarded as residential.

The mere fact that one of the angles touches Baltimore Avenue does not take it out of the terms of the restriction nor change its residential character.

The exceptions, 1 to 40, inclusive, filed by the defendants are dismissed.