author: Finletter, P. J.,

text:
    Bedell v. The Oliver H. Bair Company, Inc.

      Abraham Friedman, for plaintiff; Horace M. Schell, for defendant.
    July 11, 1931.
   Finletter, P. J.,

This is a rule to assess the damages under a judgment entered against defendant. Plaintiff had sued to recover moneys paid upon a contract between the parties, which we found to be ultra vires of the defendant. The money was paid as premiums upon a contract which we held to be an insurance policy. The defendant had no corporate power to engage in insurance. The payments were made under a mutual and honest mistake of fact. No criticism is made by the defendant of this ruling, but it objects to the manner in which the damages were assessed. This was in such a way as to include payments made more than six years ago, to which plaintiff has added interest from the dates of payment to the present time.

Before coming to the technical questions involved, it may be well to state the manner in which the case arose.

The contract in question was entered into in good faith by both parties, under the mistaken belief that the defendant was empowered to enter into it. Although it does not appear in the pleadings, it was stated at bar, and we believe it to be the fact, that the Insurance Department of the state held that such contracts did not come within the definition of insurance. Relying upon this, both parties to the suit entered into the contract referred to. It was but recently that frauds committed under such policies, by evil and unreliable persons, induced the state authorities to insist that all such companies should come under the supervision of the Insurance Department. The defendant, against which no complaint was ever made, and which has conducted its business soundly and honestly, suffers from the application of the new general rule classifying all such contracts as insurance policies.

The mistake, for, notwithstanding the original opinion of the state authorities that such companies were not insurance companies, it was a mistake, was a mutual one.

It appears from plaintiff’s statement that he paid a premium of 46 cents, quarterly, in May, August, November and February in each year, commencing April 30, 1902. The writ in the instant case issued on October 22, 1930.

Two questions arise: (1) Does the statute of limitations bar payments made more than six years ago? (2) From what date is interest computed?

There is a marked conflict of authority on both questions.

It is assumed that (except where statutes govern) in jurisdictions where the rule is that no demand is needed as a foundation for action, the statute bars payments older than six years, and that payments made within six years may be recovered with interest; and that, on the other hand, in jurisdictions where demand is required, the corollary should be that the statute does not bar payments older than six years, but that interest does not run on any of them within or without the six years, until demand for repayment is made.

In the United States courts, the rule is that suit to recover mistaken payment will lie without previous demand, and that payments older than six years cannot be recovered: Leather Manufacturers’ Bank v. Merchants’ Bank, 128 U. S. 26, 34, and cases cited below; while in England and New York it is held that the right of action does not arise until notice of the mistake has been given the defendant, and demand made for repayment: Freeman v. Jeffries, 4 L. R., Ex., 189, and cases cited below.

In Pennsylvania, it is the rule that interest is due only from the time of demand for repayment: Grim’s Estate, 147 Pa. 190, and cases cited below.

1. In Freeman v. Jeffries, 4 L. R., Ex., 189, Bramwell, J., said:

“But if the plaintiff were under the circumstances entitled to be repaid the sum he claims, he ought to have given notice to the defendant of the facts by reason of which he was so entitled, because until he did so there could be no duty on the defendant to pay it over. Would the duty of repayment arise until this notice was given? I apprehend not; for at what other time could it have arisen? Not at the moment when the money was paid; for it was paid with the intention that the defendant should keep it. Was it, then, at the moment when the mistake was discovered? This would be most unjust; the mistake was the plaintiff’s, and the discovery is the plaintiff’s, and the defendant may still think that everything is right, and that no mistake at all was committed. Therefore, until notice, no duty would arise, and, therefore, no cause of action. ... It is contended that no demand is necessary where there is already a cause of action. But this is begging the question; for the contention of the other side is, that there can be no cause of action till demand.” See, also, Southwick v. Bank, 84 N. Y. 420; Stephens v. Board of Education, 3 Hun. 712, 715; United States v. Park Bank, 6 Fed. 852; Marine Bank v. City Bank, 59 N. Y. 67.

2. In Leather Manufacturers’ Bank v. Merchants’ Bank, 128 U. S. 26, 34, the statute of limitations was involved. A forged check had been presented by the defendant and paid by the plaintiff under a mutual mistake as to genuineness of the endorsements. It was held that the plaintiff’s right of action accrued and the statute of limitations began to run immediately upon payment. No demand was necessary to raise a cause of action.

“The question then is whether, if a bank, upon which a check is drawn payable to a particular person or order, pays the amount of the cheek to one presenting it with a forged endorsement of the payee’s name, both parties supposing the endorsement to be genuine, the right of action of the bank to recover back the money from the person so obtaining it accrues immediately upon the payment of the money, or only after a demand for its repayment.”

The case, however, does not turn on the mutual mistake, but on an implied warranty, for the court goes on to say:

“Whenever money is paid upon the representation of the receiver that he has either a certain title in property transferred in consideration of the payment, or a certain authority to receive the money paid, when in fact he has no such title or authority, then, although there be no fraud or intentional misrepresentation on his part, yet there is no consideration for the payment, and the money remains, in equity and good conscience, the property of the payer, and may be recovered back by him, without any previous demand, as money had and received to his use. His right of action accrues, and the statute of limitations begins to run, immediately upon the payment,” citing Bree v. Holbech, 2 Doug. 654; Utica Bank v. Van Gieson, 18 Johns, 485; Bank of United States v. Daniel, 12 Pet. 32, 56; Dill v. Wareham, 7 Met. 438; Sturgis v. Preston, 134 Mass. 372; Earle v. Bickford, 6 Allen, 549; Blethen v. Lovering, 58 Me. 437; Corn Exchange Bank v. Nassau Bank, 91 N. Y. 74. See Keener on Quasi-Contracts, 141, et seq., for a discussion of these cases.

3. We have been unable to find any case in Pennsylvania in which the statute of limitations was raised in cases of mutual mistake of fact. But there is abundance of authority for the proposition that interest does not run until demand of repayment is made. It would follow then that the statute does not run until demand is made.

In Com. v. Newton Township, 276 Pa. 172, a township (which was not entitled to collect certain taxes, due after a certain date to the state) collected them. It was held that the state could recover the payments, but that interest would not be allowed, if the state had not made demand prior to the suit. Kephart, J., said: “The money was accepted because of a mistaken belief.”

“There is nothing to show want of good faith, and, under any fair construction, interest should not be allowed until demand,” citing Grim’s Estate, 147 Pa. 190.

In that case it was held that, where there had been a mistaken interpretation of a will and the facts surrounding it, “where reclamation is ordered of moneys which have been paid under a mutual mistake of the parties, interest is due only from the date of the demand for restitution:” Grim’s Estate, 147 Pa. 190.

The opinions of Ashman, J., and Penrose, J., which were adopted by the Supreme Court, include the following statement of the law:

“[The authorities in Pennsylvania] have adopted as a uniform rule, the proposition that where reclamation is ordered of moneys which have been paid under a mutual mistake of the parties, interest is due only from the date at which the demand for restitution is made. Thus, in Vandergrift’s Appeal, 80 Pa. 116, a legacy had been charged upon land and .the devisee tendered the amount of the legacy, which was declined, pending a contest over the will' which had been instituted by the legatee. Afterwards the legatee presented her petition asking for payment; and interest was refused by the court from the time of tender until the date of filing of the petition. In Brown v. Campbell, 1 S. & R. 176, the defendant had mistakenly appropriated, through hi¡3 agents, certain moneys, which were subsequently discovered to belong to the plaintiff, to his own use. Tilghman, C. J., said: ‘The rule is to allow interest where the defendant has retained the money of the plaintiff unlawfully and against his consent. Until the defendant was informed that the plaintiff’s money was applied to his use, he was in no default, and therefore ought not to pay interest. But being informed, he became a wrongdoer in withholding payment, and therefore is subject to damages to the amount of the interest.’ So, in King v. Diehl, 9 S. & R. 409, a payment having been made under the mistaken belief by both payer and payee that a legatee took an absolute and not a defeasible interest, the same judge remarked: ‘The plaintiffs could not be blamed for receiving what they thought was their right and what the defendants were willing to pay; until the defendants explained the mistake and demanded repayment, it cannot be said that the plaintiffs unjustly withheld their money and should therefore be subject to interest.’ Bank v. Com., 10 Pa. 453, followed to the same effect.”

4. It is argued that the statute of limitations (Act of March 27,1713,1 Sm. Laws, 76) applies to the plaintiff’s claim. It may be observed that if the claim does not arise until after demand, the statute would have no application to the instant case, because demand was made only within the past year. And it is also true that if plaintiff’s right of action is founded on quasi contract, it is not within the terms of the statute, which applies only to “any lending or contract without specialty:” Philadelphia v. Atlantic & Pacific Telegraph Co., 10 Dist. R. 376.

“It is contracts in fact not quasi contracts that are included in [the Act] :” McPherson, J., in Philadelphia v. Atlantic & Pacific Telegraph Co., supra.

See, also, Richards v. Bickley, 13 S. & R. 395; Roller v. Meredith, 4 Pa. Superior Ct. 461.

On the other hand, such “implied contracts” as are true contractual obligations are not deprived of their legal character by the mere fact that their existence is inferred from the conduct of the parties instead of from oral or written contracts: Wickersham v. Lee (No. 2), 83 Pa. 422; In re Margaret McCanna, 77 Pa. Superior Ct. 1.

Quasi contracts are, however, not contracts. The distinction between quasi contracts, implied contracts and express contracts was defined by Lowrie, J.¡ in Hertzog v. Hertzog, 29 Pa. 465, thus: “1. Constructive contracts [i. e., quasi contracts], . . . are fictions of law adopted for the purpose of enforcing legal duties by actions of contract, where no proper contract exists, express or implied.

“2. Implied contracts which arise under circumstances which, according to ordinary course of dealing and . . . common understanding . . . show a mutual intention to contract.” Express contracts are, where the terms of the agreement are avowed at the time the engagement is entered into. The distinction between quasi contracts and true contracts is summed up in the sentence: “All true contracts grow out of the intentions of the parties (to transactions) , and are dictated only by their mutual and accordant wills.” When the intention is not expressed, it may be inferred, implied or presumed, from circumstances, as really existing, and then the contract is called an implied one. There is another class of relations which involve no intention to contract at all, though they may be treated as if they did.

In the instant case there was no intention when the money was paid that it was to be returned. The payment was made in execution of the supposed principal contract, and was intended to be retained by the defendant. It was not paid for the use of the plaintiff but for the defendant’s use. No contract could be implied from the facts. The plaintiff’s remedy does not then arise out of contract inferred from the facts, but from the unjust enrichment of the defendant; that is, from quasi contract. The statute of limitations, therefore, does not apply.

On the whole, then, we are of opinion that it follows as a corollary to the Pennsylvania rule of Grim’s Estate, that, if interest does not run until demand, the statute does not run.

The assessment of damages should, therefore, be limited to the sum of the mistaken payments, with interest only from the date of the writ in this case, there having been no previous demand.


source: Caselaw Access Project

author: Alessandroni, J.,

license: Public Domain

text:
    Real Estate-Land Title and Trust Company, to use, v. Real Estate-Land Title and Trust Company.

      Harry C. Liebman, for plaintiff.

      Saul, Ewing, Bemick & Saul, for defendant.
    March 19, 1931.
   Alessandroni, J.,

The statement of claim alleges that on December 16, 1927, the Real Estate-Land Title and Trust Company issued a policy of insurance to the Real Estate-Land Title and Trust Company and all persons claiming under it, insuring that its title to the mortgage on premises situate at the southwest comer of Asbury and Lawrence Streets, Philadelphia, was good and marketable and clear of all liens and encumbrances charging the same at the date thereof. On January 8, 1930, the Real Estate-Land Title and Trust Company for value assigned its interest in the policy to Samuel Levy and the assignment was approved by the proper officers of the company, and its approval endorsed on the policy. The mortgage was also assigned on the same date to Samuel Levy. On January 9, 1930, Samuel Levy foreclosed on the mortgage and purchased the property at-sheriff’s sale on February 3, 1930. He then found that a municipal lien was filed of record against the mortgaged premises as of May 25, 1927, and was compelled to pay $434.71 in satisfaction of the lien. The use-plaintiff, Samuel Levy, claims reimbusement for the said sum of $434.71.

The affidavit of defense raising questions of law complains that the use-plaintiff cannot sue in the name of the Real Estate-Land Title and Trust Company to the use of Samuel Levy, as the Real Estate-Land Title and Trust Company cannot sue itself, and that the statement of claim is otherwise defective.

The defendant argues that, inasmuch as the Real Estate-Land Title and Trust Company cannot sue itself, the use-plaintiff, Samuel Levy, obtains no higher rights than the legal plaintiff, and, therefore, cannot sustain this action. A careful examination of the policy discloses that the Real Estate-Land Title and Trust Company insured thereby the Real Estate-Land Title and Trust Company “and all persons claiming the estate, and properly hereinafter mentioned under it by descent, by will, or under the intestate laws, and all other persons to whom this policy may be transferred with the assent of this company, testified by the signature of the proper officer of this company endorsed hereon.” The defendant company under this policy expressly covenanted to insure the interest of all persons to whom the policy might be transferred with the assent of the company. A transfer to the use-plaintiff, Samuel Levy, was duly approved by an officer of the Real Estate-Land Title and Trust Company on the date of the assignment and duly accepted by him thereafter. The use-plaintiff relied on the approval by the Real Estate-Land Title and Trust Company of the assignment to him, and the defendant cannot object to the legal result of its own act. The transfer was in accord with the express provisions of the policy and the use-plaintiff acted in reliance thereon. The defendant cannot now complain of the result to the detriment of an innocent party relying thereon.

While the Real Estate-Land Title and Trust Company cannot sue itself, the recognition by it of its liability to an innocent third party cannot be repudiated on the strict technical theory that an assignee receives no greater rights than the assignor has.

Defendant also contends that the municipal lien which was in existence at the date of the issuance of the policy does not interfere with the marketability of the title to the mortgage and is not a lien and encumbrance charging the mortgage at the date of the policy. A policy in language almost similar to the covenants of the policy before us was construed by the Supreme Court in Wheeler v. Trust Co., 160 Pa. 408, which ruled that a lien of this character would render the title of the mortgage unmarketable and would constitute a lien or encumbrance charging the same at the date of the policy. The court stated: “The general intent and effect of the whole policy were to insure the mortgage as a valid security, both as to title and incumbrances.” The defendant’s argument entirely divorces the premises involved from the mortgage and considers the latter merely as a piece of paper. For the purpose of protecting and realizing upon his security, the mortgagee is considered as the owner and can enjoin waste of the premises by the mortgagor: Nicholson on Conveyancing, page 251. We have considered this contention, although not specifically raised in the affidavit of defense raising questions of law.

And now, to wit, March 19, 1931, the affidavit of defense raising questions of law is dismissed and the defendant is required to file an affidavit of defense within fifteen days hereof.


author: Kun, J.,

text:
    Howard v. The Bell Telephone Company of Pennsylvania.

      Ward C. Henry, for plaintiff; Benjamin O. Frick, for defendant.
    August 3, 1931.
   Kun, J.,

This is an action in trespass filed February 23, 1927, by a widow, alleging that her husband died February 27, 1926, as a result of injuries sustained by him on September 28, 1905, alleged to be due to the alleged negligence of the defendant. On April 30, 1927, plaintiff filed her petition and obtained a rule thereon upon the defendant to show cause why the court should not determine in advance of a jury trial whether or not she had a right at law to bring her action. The petition in effect asked for a declaratory judgment on the question of whether or not the plaintiff’s action was barred by the statute of limitations. It was the opinion of the court that the question could not be raised in that way, and on June 4, 1929, the rule to show cause was discharged. On June 23, 1931, defendant filed an affidavit of defense raising the question of law that inasmuch as a suit by plaintiff’s decedent was at the time of his death barred by the statute of limitations, the plaintiff widow had no right or cause of action against the defendant. This seems to us a proper manner in which to raise the question. The plaintiff has no common-law right of action. Her right depends on statute. Where a right depends on statute, if defendant shows by the record that the action was not brought within the time fixed by the statute, the court can so declare in limine: Martin v. Pittsburgh R. R. Co., 227 Pa. 18, 21; First Pool Gas Coal Co. v. Wheeler Run Coal Co., 301 Pa. 485; Ratto v. Pennsylvania Coal Co., 17 Pa. Superior Ct. (Adv. Rep., Unof.) 82.

On the merits of the question as to whether or not the plaintiff has the right to maintain her action, it seems to us that the assertion of the right of plaintiff under section nineteen of the Act of April 15, 1851, P. L. 669, 674, is based on a misconception of the act which, it must be conceded, has been considerably induced by the use of the phrase in some of the cases, referring to the right of the widow to maintain such a suit as a “new cause of action.” Section two of the Act of April 26, 1855, P. L. 309, provides that where in such case no suit for damages has been brought by the party injured during his lifetime, the widow or personal representative must file the action within one year of the death of the injured person and not thereafter. The determination of the question depends on the nature and character of the right of action given by these statutes to the widow. As stated, some of the cases have referred to the right as “a .new cause of action,” and this description of the right is used interchangeably with the description of it as a new “right of action.” A thoughtful analysis of the nature of the new right must lead to the conclusion that it is not a new “cause of action” which was created, in the generic sense of the word “cause,” for the cause of the action could be nothing else but the alleged negligence of the defendant which resulted in the death. A “cause of action” is that which creates the necessity for bringing the action: Skelton v. Lower Merion Township, 298 Pa. 471, 474. What the legislature did by the nineteenth section of the Act of 1851 was to give parties a right of action who had none before to meet the common-law rule that the right to a cause of action on account of alleged negligence, where no suit had been brought by the injured person in his lifetime, came to an end or abated with the death of the injured person.

The act, however, did not create a new right of action in the sense of an additional right of action. The widow does not have a right of action separate and apart from or additional to the right had by her husband. Under the act, two actions cannot be maintained for the same injury; so, although the husband had not brought a suit in his lifetime, yet the widow could not sue after the death of her husband where it was shown that he had settled his claim and had given the defendant a release although she had an apparent right to do so under the literal wording of the statute: Hill v. Pennsylvania R. R. Co., 178 Pa. 223. The reason is that he had exhausted his right, so that nothing passed to his. widow and she could not base any claim on the same “cause” of action thereafter.

Manifestly, the purpose of the legislation was to prevent the expiration of the right by the death of the injured person. That obviously presupposes the existence of a right of action in him at the time of his death, so that if by his own act he had disposed of his right, it had no existence at the time of his death and there was nothing the statute could preserve for the widow. In short, the legislation cannot be construed so as to give the widow a greater right than the husband would have if living. Certainly, any defense such as contributory negligence, or assumption of risk on the part of the deceased husband, would be available to the defendant in a suit by the widow; that must be conceded, so that it was decided in the Hill case, because the conclusion was inescapable, that where the husband had settled his case in his lifetime, he had put an end to his cause af action, so that there was no right existing at the time of his death which could go to the widow and upon which she could base a suit.

What, then, is the eifeet of the prior determination of the right of action by operation of law following the injured person’s inaction in failing to assert a claim by bringing suit within the time fixed by the statute of limitations for the filing of such suits? The logic of the situation leads us to exactly the same conclusion as that reached in the case where the husband had settled his suit and had given the defendant a release. Because of- that fact, there was no longer a right of action in the case at the time of his death, and, therefore, no right passed to the widow. The death of the husband did not give the widow a new cause of action. We regret that we must disagree with the other conclusion reached by the Circuit Court of Appeals of the United States of this circuit, in an opinion of the able jurist, Judge Woolley, of that court: Preston v. Western Union Telegraph Co., 250 Fed. 480. It was held by the court in that case that whatever the lapse of time since the occurrence, the widow has a right of action under the Acts of 1851 and 1855 following her husband’s death, though his right has long since been barred by the statute of limitations in his lifetime. The quotation from the Hill case included in the opinion, which the learned judge conceives to be an intimation that the Supreme Court of Pennsylvania would support his construction of the statute, does not justify that assumption, in our opinion. For instance, the federal court refers to the right of the widow as “a new and altogether independent right of action.” The right of action is undoubtedly new, but it is not “altogether independent.” Quite to the contrary, we would say it is altogether “dependent,” that is to say, dependent upon the fact that the husband had not brought suit in his lifetime or had not settled the claim even though he had not brought suit, all of , which means that the right of action depends on the existence of a right of action in him at the time of his death, which leads us to hold that if the right had ceased to exist, for whatever reason, and in this instance by operation of law, being barred by the statute of limitations, which had ended the right or which would constitute an absolute defense to the suit on that ground, no right or cause of action passed to the widow, or if she asserted the right, the plea of the statute would be an absolute defense to her suit.

By the statute of limitations, the husband’s right of action expired two years after the alleged act of negligence — the date of which is given as September 28, 1905. Any right of action which the deceased had expired on September 28, 1907. To hold that where in such a case the injured party died some twenty years afterward, the widow could within a year thereafter file suit against the defendant and maintain it, would be to hold that a cause of action which was legally dead could be revived by the death of the injured person, so as to pass to his widow or heirs. We cannot follow that reasoning.

As we have said, we can find no intimation in the Hill case which justifies the opinion that our Supreme Court would support Judge Woolley’s construction of our statutes. We hold that there is almost direct language in the opinion of our Supreme Court in that case which leads to the contrary view. For instance, in the Hill case (178 Pa.), at the top of page 230, it is said: “In other words, without these acts a cause of action for a specific act of negligence would have died with the person and there could then be no recovery by anybody. But that consequence of the existing state of the law it was desired to avert and, under the acts, the action does not die but survives to certain persons named. But it is an action for the same injury, and upon the basis of the same negligence. The acts accomplish the preservation of a right of recovery but they do not give, or assume to give, another and additional remedy to other parties for the same injury.” That is the touchstone, “preservation of a right.” Manifestly, there could be no preservation of a right which had ceased to exist.

In a later case, Hoodmacher v. Lehigh Valley R. R. Co., 218 Pa. 21, Chief Justice Mitchell, with his usual clarity of expression, indicated the nature of the widow’s right in such a case as this, clearly negativing the contention that her right is altogether independent, in the sense in which the federal court so decided, and that it could exist, notwithstanding the husband’s right of action had long since ceased, because barred by the statute of limitations. The Chief Justice said (page 23): “By statute a new right arose, derivative in its nature and not maintainable, when if he had lived he [decedent] could not have recovered. . . .”

Agreement with our view is found in a very recent decision of the Supreme Court of the United States, Flynn v. N. Y., N. H. & H. R. R. Co., 283 U. S. 53, 72 A. L. R. 1311, wherein a cause of action such as the one in the instant case is likewise referred to by Mr. Justice Holmes as “derivative and dependent upon the continuance of a right in the injured person at the time of his death,” and it was held that the right of action of the decedent being barred at the time of his death, no action could be maintained by his widow on account thereof thereafter. No reference in that case is made to the Hoodmacher case in which Chief Justice Mitchell used the same descriptive term “derivative,” neither is reference made to the Preston case decided by the circuit court of appeals of this circuit, which must be considered as overruled in principle by the Supreme Court of the United States. Our conclusion, therefore, is that where a man has been injured through alleged negligence and he has not filed suit within the statutory limitation of two years, and he thereafter dies, his widow cannot under section nineteen of the Act of 1851 and section two of the Act of 1855 maintain a suit against the alleged wrongdoer based on the same act of negligence.

The affidavit of defense raising the question of law is sustained, and judgment is entered for the defendant. Exception noted for the plaintiff.


author: Henderson, J.,

text:
    Buchanan’s Estate.

      Harvey GouHey, Harry S. Platowsky and Isaac Hassler, for exceptants.

      Augustus B. Repetto, contra.

      May 22, 1931.
   Henderson, J.,

After a careful examination of the record and briefs presented in the instant matter, we are convinced the Auditing Judge was right in his conclusions and for the reasons given by him. All exceptions are dismissed and the adjudication is confirmed absolutely.


author: Gest, J.,

text:
    Stanton’s Estate.

      H. Gordon McCouch, for exceptant.

      Joseph J. Brown and John Arthur Brown, contra.
    April 17, 1931.
   Gest, J.,

The testatrix, who died in 1907, devised her residuary estate in trust to pay the income to her four children, William, Howard, Charles and Marie, for their respective lives (the shares of her sons being free from liability for their debts), with remainders of the principal after the death of each child to their issue, and in default of issue of any of them in trust for the others, etc., and, in default of issue of all of them at the death of the survivor, to the heirs of the testatrix under the intestate laws.

The testatrix had lent money to her children, represented by interest-bearing obligations, in the following amounts: To William, $5851.50; to Howard, $3763.84; to Charles, $3011.78; to Marie, $318.26, and to Howard and Charles, jointly, $22,812.16, a total of $35,757.54. By a codicil to her will, the testatrix directed her executor not to insist on immediate payment of these debts, but to accept payment thereof as her children might desire or best suit their convenience, considering these obligations as debts of honor to be paid when and as the business and circumstances of her children might warrant. And by a later codicil she further directed as follows:

“I direct that so much of any and all sums owing to me at the date of my decease by my children or any of them in any manner, or upon any account whatsoever, whether upon loan represented by mortgage, promissory note, &c., or otherwise as shall not exceed his or their respective shares or share of my estate under my said will shall be deemed and treated as advancements on account of said respective share or shares, anything contained in the first codicil, dated the Twentieth day of October, 1893, to my said will, to the contrary notwithstanding.”

The balance of the principal of the personal estate of the testatrix, as disclosed by the account of her executor, amounted to $50,216, of which $35,757 represented the aggregate indebtedness of the children, and is so mentioned in the account, agreed to by all of the children. There were in addition a number of houses, yielding rents, as appears by the account filed.

The trustee filed an account in 1904, which showed that the advances or debts, as they are styled in the account agreed to, as was the executor’s account, by all the children, stood as follows: That of William, originally $5851.50, was reduced to $3123.43; that of Marie, originally $318.26, had been entirely refunded; that of Howard, originally $3763.84, was reduced to $3282.59; that of Charles, originally $3011.78, was reduced to $2280.73, and the joint advancement or debt of Charles and Howard, originally $22,812.16, had been increased to $24,507.95; a total of $33,194.70.

The present account was filed in 1930. In the meantime, William had died in 1919, Howard in 1929 and Marie in 1930. All died unmarried and without issue. Charles, the survivor, is fifty-five years of age and is unmarried and without issue.

According to this account, the “indebtedness of the heirs on advancements” amounted, however, not to $33,194.70, but to $33,672.56, which we understand represents the advancements with interest to Charles and Howard jointly.

It is said by the Auditing Judge in his adjudication that “the advancements have all been extinguished except a large sum due by Charles and Howard jointly. The interest on this item has not been kept down by their shares of income, and if this interest runs on indefinitely they now owe more than they did at the time of the death of the testatrix.” “Charles is now the only surviving child and is entitled to all income and he claims that the charge of interest on his advancement is wrong. He does not seek to have any sums refunded which have been paid out to the other children, but wishes the accounts of the interest still in hand readjusted so that he will have nothing to pay but his original advancement without interest and also that directions be given for the'future on that theory.” The Auditing Judge ruled that “no distributee is obliged to pay interest on advancements after the death of the testatrix, and the distribution should be calculated on that basis, saving what has already been paid out.”

We are not able to concur in the reasoning of the adjudication. The general rule with regard to advancements is that they do not carry interest during the lifetime of the testator, but in distribution interest begins to run when the estate should normally be settled, in order to effect equality, and, as a rule, the interest is charged at the legal rate of 6 per cent, even if the estate yields a smaller income: Sharpe’s Estate, 13 Phila. 360; though in this case, by agreement, it was charged at 5 per cent. Abundant authority for the general rule may be found in the eases referred to by the Auditing Judge, notably Patterson’s Estate, 128 Pa. 269; Ford’s Estate, 2 W. N. C. 113, and Thompson’s Estate, 8 W. N. C. 16, to which may be added Stelwagon’s Estate, 17 Dist. R. 609, which cases also show that the rule is applicable where the distribution is of income only and not of principal. And it will be observed, also, that these advancements were originally debts, and, although converted by the codicil into advancements, the accounts, agreed to by all the parties, still referred to them as debts, and the codicil itself merely directed the conversion into advancements to the extent of the children’s interest in the estate. Even if, as debts, they are barred by the statute, these circumstances remove from the case any ground of complaint arising from the supposed hardship of the rule. The final accounting and the distribution of principal cannot occur until the death of Charles, the last survivor, and, unless he should have children, which at present seems improbable, the estate will, in the absence of testamentary provision to the contrary, be divisible under the intestate laws to the personal representatives of the four children, who all survived the testatrix. To except the advancements, or any of them, in the meantime, from the charge of interest would result in manifest inequality. The learned counsel for Charles Stanton relied upon what was said in some cases such as Miller’s Appeal, 31 Pa. 337, and Porter’s Appeal, 94 Pa. 332, that advancements do not bear interest unless the will so directs, but it is apparent that this statement refers merely to the running of interest during the lifetime of the testator. Farnum’s Estate, 176 Pa. 366, was also relied upon, but, in considering the peculiar facts of that case, we must observe what the Supreme Court said in its opinion: “It must be constantly borne in mind that the advancement to Mrs. Bell was not a loan of money, nor was it a gift of interest bearing securities which would constantly produce income.” In the present case, however, the advancements were originally debts evidenced by interest bearing obligations, and, in the account filed, agreed to by all parties, were, as has been said, actually referred to by them as such. The inevitable presumption is that these children of the testatrix received actual money on which they expected and agreed to pay interest. The codicil to the will merely relieved them of interest which would otherwise have accrued in the lifetime of the testatrix. If the advancement actually received by any of them in the lifetime of the testatrix should be greater than his distributive share, the hardship is only apparent, as he had received his full share already.

To state our understanding of the law succinctly, advancements do not carry interest during the lifetime of the testator unless the will so directs, but, on the other hand, they do carry interest after his death (or perhaps more accurately after the expiration of the time normally allowed for the filing of the account), unless the will directs otherwise. In Farnum’s Estate, 176 Pa. 366, the opinion of the Supreme Court cites no authorities, and it can hardly be assumed that the court intended to overrule its decision in Patterson’s Appeal, 128 Pa. 269, which has been often followed as a leading case. The law in other states is the same as ours: Thornton on Gifts and Advancements, § 614.

Now, in the facts of the present case, Charles is presently entitled to the entire income as the survivor of the four children, and it is strongly urged that the rule is no longer applicable. If only income were involved, this might perhaps be so, but the future distribution of principal must be considered. Upon the death of Charles leaving issue, although that event is regarded as unlikely, his issue would be entitled; but if he should die without leaving issue, which is the probable case, the gift over of principal and interest is given to the heirs of the testatrix, that is, to the personal representatives of the four children. There the rights of the three deceased children, or their estates, are affected; it is to their advantage that the share of Charles’s issue or his estate should be diminished and their shares enlarged by the deduction from Charles’s share of so much of the interest on his advancement as would effect an ultimate equality of distribution.

Facts precisely similar to these do not appear in any decided case, so far as the court or counsel have been able to discover; but, bearing in mind the general rule that interest is charged on advancements in order to effect ultimate equality of distribution, we are of opinion that the exceptions should be sustained.

We observe, moreover, that the advancements not yet extinguished and aggregating $33,672.56 are those made jointly to Charles and Howard, and the Auditing Judge in his adjudication suggests that Charles would be • chargeable with only one-half of the advancements made to him and Howard jointly. In this we agree with him, and any necessary equalization may be adjusted in the schedule of distribution.

We also observe on pages fifty-six and fifty-seven of the account that the accountant has charged commissions at 5 per cent, on the interest calculated upon the advancements, amounting to $2084.43, and apparently, if we understand the facts, the accountants have retained that sum from income. The interest on the advancements was not collected; it was accounted for as a matter of bookkeeping only. Certainly no commissions can be allowed on the advancements themselves, as they are brought into the account for computation only, as was said in Herter’s Estate, 18 Dist. R. 1026. The same reason would apply to the interest accrued on them. The legality of this charge was not objected to, and we make no ruling upon it, but if any improper credit has been taken, it may also be corrected in the schedule of distribution.

The fourth exception is dismissed, the remaining exceptions are sustained, and a schedule of distribution will be submitted to the Auditing Judge in accordance with this opinion.