author: Stearne, J., Van Dusen, J., Henderson, J.,

text:
    Winsor’s Estate.

      John Bussell, Jr., and Clement B. Wood, for exceptants.

      William M. Boenning, contra.
    Jan. 4, 1929.
   Stearne, J.,

The exceptions in this case are to an opinion suit appeals from appraisement of transfer inheritance tax. The primary question is one of blending; and the secondary question relates to the legality of the tax appraisement and assessment.

The rule is that when the instrument exercising the general power of appointment goes into effect, the appointee takes the estate under and by virtue of the original instrument creating the power and not under the instrument of exercise: Finn’s Estate (No. 2), 18 Dist. R. 408; Huddy’s Estate, 236 Pa. 276.

There is no blending where the will is silent as to testator’s intent, and the appointment is exercised only by virtue of the operation of the statute: Mitchell’s Estate, 7 D. & C. 387; Huddy’s Estate, 236 Pa. 276.

By legislative enactment (Wills Act of June 7, 1917, § 11, P. L. 403, re-enacting Act of June 4, 1879, § 3, P. L. 88), general devises or bequests of a testator are declared1 to operate as an exercise of all general powers of appointment, in the absence of a contrary intent in the will.

A testator may choose to transfer the appointed estate to his own, make it a part thereof and dispose of the coalesced funds as one. His appointees then take as nominees of the donee of the power and as a part of his estate, instead of that of the original donor. Whatever strong reasoning may have existed to the contrary (see dissenting opinion of Lamorelle, P. J., McCord’s Estate, 2 D. & C. 130), this principle was firmly and decisively settled by McCord’s Estate, 276 Pa. 459.

Real difficulty arises in seeking to discover the intent of a testator who uses language which creates confusion as to whether he intends to blend or whether he has treated his will merely as an instrument to pass his own individual estate, as such, to designated beneficiaries, and, at the same time and by the use of the same words, to pass the appointed estate, as such, to the same persons or for the same objects as he provides for his individual estate.

Consideration must be given, in discovering intention, to extrinsic facts and circumstances which show, or tend to indicate, intention to blend; sic., where a testator, in disposing of both estates, bequeaths legacies in excess of the value of his own estate: South’s Estate, 248 Pa. 165.

Likewise, attention must be given to testator’s provisions, expressed or implied, as to the payment of debts. It is important, as evidence of intention, whether such debts are payable out of the combined estates or are relegated to the individual estate: Hagen’s Estate, 85 Pa. Superior Ct. 123; 285 Pa. 326; Morton’s Estate, 10 D. & C. 255.

Another element of importance is the location of the disposititive clause, as well as the intended scope of its operation: Hagen’s Estate, supra; Dohan’s Estate, 3 D. & C. 182; Haven’s Estate, 5 D. & C. 494.

As concisely stated by Gest, J., in Tobey’s Estate, 10 D. & C. 227, 229: “After all, blending is a question of intention. . . .”

The leading cases where the language is held to be expressive of an intent to blend are: McCord’s Estate, 276 Pa. 459; Forney’s Estate, 280 Pa. 282; Kates’s Estate, 282 Pa. 417; Twitehell’s Estate, 284 Pa. 135; Com. v. Morris, 287 Pa. 61; Howell’s Estate, 4 D. & C. 526; Tobey’s Estate, 10 D. & C. 227; Morton’s Estate, 10 D. & C. 255.

To recite the controlling language in each of the foregoing cases would add little to this opinion. It suffices to note that in each instance the test applied was to ascertain whether the effect of the disposition was to make the trust estate a part of the testator’s own and then to dispose of both estates as an entirety. Declarations of intent in the preamble, directions to pay to executors for purposes of distribution, payment of debts and deficiency of personal estate to pay legacies are all elements of consideration in reaching the conclusion as to intent to blend.

Illustrative of cases where it has been held that there is no blending are: Hagen’s Estate, 85 Pa. Superior Ct. 123; 285 Pa. 326; Dohan’s Estate, 3 D. & C. 182; Haven’s Estate, 5 D. & C. 494.

In Hagen’s Estate, supra, there was no specific provision for the payment of debts; testator made certain bequests and declarations concerning the disposition of his personal property and then, by the third item in his will, declared that the estate over which he had power of appointment, should be disposed of as part of his residuary estate.

The Supreme Court affirmed the Superior Court in holding that there was no blending. The opinion of Judge Keller is illuminating as to the reasoning of the court: “It will be noted that Christian A Hagen did not direct that the estate over which he had power of appointment by will should be disposed of as part of his estate generally, but as part of his residuary estate. In view of the fact that he had given no direction for the payment of his debts and no pecuniary legacies, we think this use of the term significant. Residuary estate is defined to be ‘what remains of a testator’s estate after deducting the debts and the bequests and devises:’ 3 Bouvier’s Law. Dict., 2920; ‘the surplus of the testator’s estate remaining after all the debts and1 particular legacies have been discharged; what remains after the payment of debts, funeral charges, expenses of administration, and legacies:’ 34 Cyc., 1660. His use of the term, — bearing in mind that the will contained no express direction to pay debts, etc., — is indicative of an intention that the fund over which he had power of appointment should not be subject to or used for the payment of his debts, and therefore should not be blended with his estate generally, but should be differentiated so that his debts and any pecuniary legacies which he might give should be chargeable to and payable out of his own estate and that the balance, if any remaining, should be disposed of in the same way that he disposed of the appointed estate.”

In Dohan’s Estate, supra, the words of the will clearly indicated that the only beneficiaries of the appointed estate were those taking under the residuary clauses of the will. While there are directions here as to payment of debts, there is no evidence of intention to make the appointed estate liable for them or for the payment of her legacies.

In Haven’s Estate, supra, there is no direction to pay debts; testatrix made a number of pecuniary bequests to be paid out of her personal estate and left the residue of her estate to her sister; she then declared her will to be an exercise of the appointment she was authorized to make. As pointed out by Judge Henderson (page 496), all of the items down to No. 11 related to her own individual estate; then followed the exercise of the power, showing the intent to give the entire appointed estate to her residuary legatee.

Dohan’s Estate and Haven’s Estate are cited with approval by the Superior Court in Hagen’s Estate.

In the case now before us, the opinion of the Hearing Judge carefully considered all of the foregoing authorities, and has correctly and accurately applied the principles they establish. We agree with him that the case is ruled by McCord’s Estate and Com. v. Morris.

The will says in its preamble: “and intending hereby to exercise any and all powers in me vested. . . .” Testatrix directs the payment of her debts and funeral expenses; she bequeaths legacies in excess of the aggregate amount of her individual estate, and in her residuary clause provides for the disposition of “all the rest, residue and remainder of my said estate, real, personal and mixed, whatsoever and wheresoever and whether vested or in trust, subject to my power of disposition, limitation or appointment. . . .”

A majority of the court agrees with the Hearing Judge that the effect of Mrs. Winsor’s testamentary disposition was to make the trust estate a part of her own generally, and that both estates were disposed of as an entirety, • and that, therefore, there was a blending.

The objection to the legality of the tax appraisement and assessment rests upon an extremely narrow and technical ground. Appellants claim that the assessment of Nov. 18, 1927, unappealed, became final, and, therefore, the assessment of Feb. 8, 1928 (which is appealed from), is invalid.

Our examination of the record fails to convince us that there is any merit in this contention. All that the assessment of Nov. 18, 1927, attempted or purported to do was to fix the tax upon the suspended item in the prior appraisement. Upon its face the assessment did not seek to settle or finally determine the taxability of the estate generally. It is undisputed that neither the fiduciaries, their counsel, nor the register, ever considered that the appointed estate of William Winsor was part of the estate of Elizabeth C. Winsor until the matter was developed at the audit, by the Auditing Judge. According to the testimony, upon the filing of the adjudication, and as a matter of routine, the clerk of the court notified the register that the suspended claim had been adjudicated, whereupon the assessment of Nov. 18, 1927, was made and tax thereafter paid. It is obvious that this was the intended scope of the assessment. It is apparent that there was no contemplation that such assessment was a final and conclusive determination of the taxability of the entire estate. As pointed out by the Auditing Judge, and to which we cannot profitably add, it was not such a final and conclusive appraisement, made by an appraiser, upon his own judgment, deliberately reached upon knowledge of all the facts, as in the Moneypenny Estate, 181 Pa. 309.

It is argued that, even though there be a blending, it is not taxable within the language and meaning of the Inheritance Tax Act of June 20, 1919, §§ A and D, P. L. 521, because the donee did not die “seized or possessed of the property.” Counsel quotes the dissenting opinion of our President Judge in McCord’s Estate, 2 D. & C. 130. Attention is directed, however, to the fact that the Supreme Court did not follow this reasoning, and affirmatively declared (276 Pa. 459), that a donee may appoint to his own estate, whereupon it becomes part thereof, and passes as a part of such estate, the same as any other property which the decedent might own or possess.

The exceptions are dismissed.

Van Dusen, J.,

concurring.

In an opinion filed in Valentine’s Estate, I stated what seemed to me to be the difference between Hagen’s Estate, 285 Pa. 326, and the numerous cases which come to the opposite conclusion, of which Com. v. Morris, 287 Pa. 61, is the most recent example. In Hagen’s Estate, the appointed estate was not available to pay debts, because there was no direction to pay debts, and only the testator’s act can make the appointed estate available for that purpose.

The present case is, however, like the Morris case. The preamble recites the power, and there is a direction to pay debts (though the report of the Morris case does not show it), some pecuniary legacies and a residuary clause. The appointed estate, therefore, becomes available for all possible purposes and blending results.

The ninth clause mentions the power again, but only to dispose of the “residue” of testatrix’s own estate and of the appointed estate. This shows that she regarded the other part of the will as exercising the power also, and emphasizes the preamble. The dissenting opinion minimizes the recital in the preamble (though there was nothing more than such a recital in the Morris case) and gives effect only to the mention of the power in the ninth clause, overlooking the fact just noted that this clause deals with the residue of both estates. I would give effect to both references to the power. If this is not done, the appointed estate is not available for pecuniary legacies, though it has been used for that purpose without objection.

Henderson, J.,

dissenting.

-The question in the instant case is one of blending. In Com. v. Morris, 287 Pa. 61, Mr. Justice Schaffer, quoting Hagen’s Estate, 285 Pa. 326, said: “The real test (as to whether there has been a blending) under our line of decisions is whether the testator has treated the two estates as one for all purposes and manifested an intent to commingle them generally.”

This case has been treated as one of inferential intent, whereas, in my opinion, it is not necessary to resort to inference when the will furnishes the true guide — an express intent.

The inference has been sought from the fact that she (1) recites her purpose to exercise her power of appointment under her husband's will; (2) directs the payment of debts and funeral expenses; (3) gives pecuniary legacies in excess of her individual estate; (4) directs payment out of her own residuary estate of all taxes on the estate, legacies or devises; and (5) uses a form of residuary clause out of which an inference is sought and which inference I regard as unwarranted under Hagen’s Estate, supra.

The expression in the preamble of an intent to exercise by the will the general power of appointment adds little, if anything, to the statutory intent arising by virtue of the Wills Act of June 7, 1917, § 11, P. L. 403. Without more, the statutory intent has been held insufficient to work a blending. See Huddy’s Estate, 236 Pa. 276. The direction to pay debts and funeral expenses would be implied by law and it has been held that even an express direction to pay debts does not in itself create a blending for all purposes: Terppe’s Estate, 224 Pa. 482. See, also, Fell’s Estate, 14 Dist. R. 327, and Mitchell’s Estate, 7 D. & C. 387.

It has been urged with vigor that the deficiency of her own estate to meet the legacies should be given great force. But why so, when we have an express disposition of the appointed estate tó the residuary legatees? Many testators make the mistake of bequeathing more than they have.

This testatrix has disposed of the appointed estate in the following clause:

“IX. All the rest, residue and remainder of my said estate, real, personal and mixed, whatsoever and wheresoever and whether vested or in trust, subject to my power of disposition, limitation or appointment, I give, devise and bequeath to my dear daughters, the said Emily C. Philler and Louise B. W. Furness, to be divided equally between them.”

In Hagen’s Estate, supra, the clauses disposing of the appointed estate were as follows:

“Third. I declare it to be my intent and purpose to exercise and dispose of as part of my residuary estate in this will in the fullest, largest and most complete manner all powers of disposition and appointment given to, conferred upon, or vested in me, expressly or by implication by any deed, will or other instrument whatever and particularly by the will of my father, Arthur Hagen, dated September 15, 1905, over the one-fourth of his estate devised in trust to invest and pay over the net income therefrom to me during my life and upon my death to pay over the principal thereof to such persons as I by my last will may direct, and over the two-fourths of his estate devised and bequeathed in trust to invest and pay over the net income therefrom to my brother, Arthur Hagen, Jr., during his life and upon his death to pay the principal thereof, less certain deductions, to such persons as I by my last will may direct.

“Fourth. All the rest, residue and remainder' of my estate, real, personal and mixed whatsoever, and wheresoever situate, including my general estate and including also the principal of the one-fourth part of the estate of my father, Arthur Hagen, of which, by the terms of his will dated the 15th day of September, 1905, and probated" at Philadelphia, I enjoy the income and over which I have a power of appointment and including also the principal of the two-fourths part of the estate of my father Arthur Hagen of which by the terms of his said will my brother, Arthur Hagen, Jr., enjoys the income, and over which I have also a power of appointment, and including any other powers of disposition or appointment given or conferred1 upon me, I give, devise and bequeath to the trustee hereinafter named, in trust, however, as follows:”

The net income to his wife for life and at her death the estate to be divided into two equal parts, one to be paid over to his children and their issue, and the other in trust for his children for life, and upon their deaths to be divided in equal shares among their children per stirpes, with certain other provisions not necessary here to enumerate, including a number of specific legacies.

In holding that this language did not create a blending, Mr. Justice Schaffer said:

“If, instead of opening the fourth paragraph of his will with the words ‘All the rest, residue and remainder of my estate,’ testator, in the instant case, had opened it with the words disposing of the estate over which he had the power of appointment and had followed them with the words ‘also all the rest, residue and remainder of my estate,’ no question could have arisen that he kept the two estates separate and that there was no blending. We think the reversed order does not indicate a different intention or bring about a different result. . . .

“We are of opinion that it was not the purpose of the testator to blend the appointive estates with his own for all purposes, but what he intended was that the appointive estates should follow the same channels of distribution which he designed for the residue of his estate. The mere fact that the appointed estate is given to the same persons who take the residue of a testator’s individual estate is not the test to be applied in determining whether there has been a blending of the two estates, but the real test under our line of decisions is whether the testator has treated the two estates as one for all purposes and manifested an intent to commingle them generally. It follows from what has been said that the estates over which the testator exercised his power of appointment are not subject to the tax.”

I can find no substantial difference between the instant and Hagen wills, and submit that Hagen’s Estate rules this appeal.

Com. v. Morris, supra, is distinguishable, in that the residuary clause operates upon the appointed estate by virtue of section 11 of the Wills Act, and does not contain, as in the instant case, an express clause disposing of the appointed estate to those who take the residuary estate.

The same persons take the residue and the appointed estate and this fact does not constitute a blending. One of the briefs suggests that this doctrine, so difficult of application, should have engrafted upon it the theory of a pro tanto blending. This would only lead to further refinements.

To sum up, in all these cases of blending where the question is whether the appointed estate is liable for taxation as that of the donee, the sole question is, did the donee of the power make the appointed estate his own for all purposes; did he, in other words, by appointing to his own estate, commingle both estates generally into one common fund to be administered as such together? Hagen’s Estate, 285 Pa. 326. It is not sufficient to show that the appointed estate is made liable for the donee’s debts, or that it was made liable for the donee’s legacies, or that it was given to the same persons who take the donee’s individual estate. In order to tax the appointed estate it must appear, and I think appear clearly, that the donee by his will merged it for all purposes with his own. This was the ratio decidendi of McCord’s Estate, the decision of which should not be extended to cases where the same facts do not substantially exist.

See, also, Valentine’s Estate [11 D. & C. 434], recently affirmed by this court, upon the equal division thereof.

I would sustain the exceptions.

Gest J., joins in this dissent.


source: Caselaw Access Project

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

license: Public Domain

text:
    Valentine’s Estate.

      William M. Boenning, for Commonwealth, exceptant.

      Albert B. Maris, contra.
    Jan. 4, 1929.
   Van Dusen, J.,

The court being equally divided in opinion, the exceptions are dismissed.

The reasons which move the members of the court who vote to dismiss are these: This testatrix’s will starts off with a direction to pay debts. A residuary clause immediately follows disposing of “my estate of which I may die seized or possessed or which I may have in expectancy or remainder or over which I may have power of disposition by will, hereby expressly exercising any such power in me vested.”

In Hagen’s Estate, 285 Pa. 326, the mention of the power occurred only in disposing of the residue. There was nothing else in the will except a specific legacy of testator’s old clothes, which would not affect blending. There was not even a direction to pay debts. This omission made the appointed estate not available for debts, and distribution under the power was associated only with part of the distribution of testator’s own estate, namely, that which remained after payment of debts. Mr. Justice Schaffer said: “The testator made no provision in his will as to the payment of his debts, and, while it is not necessary to their payment that he should do so, this circumstance, in connection with the devise of the residue of his estate, has this bearing on the question with which we have to deal: When he spoke of the residue of his estate, he must have known, and necessarily meant, that this was such part of his estate as would remain after the payment of his debts. If he had devised his entire estate, together with the estates over which he had the power of appointment, putting all, as it were, in hotch pot, there then would be strong ground for holding that he had blended’ them, and the rule which we have heretofore applied in eases like McCord’s Estate, 276 Pa. 459; Forney’s Estate, 280 Pa. 282; Kates’s Estate, 282 Pa. 417, and Twitchell’s Estate, 284 Pa. 135, would be applicable. As was said by the Superior Court in its opinion (85 Pa. Superior Ct. 123) now up for review: ‘His use of the term (residue) — bearing in mind that the will contained no express direction to pay debts, etc. — is indicative of an intention that the fund over which he had power of appointment should not be subject to or used for the payment of his debts and, therefore, should not be blended with his estate generally, but should be differentiated so that his debts and any pecuniary legacies which he might give should be chargeable to and payable out of his estate, and that the balance, if any remaining, should be disposed of in the same way that he disposed of the appointed estate.’ ”

Our own case of Haven’s Estate, 5 D. & C. 494, is to the same effect. There was no direction to pay debts, and, accordingly, the appointed estate could not be used to pay debts, and there was no blending.

In the present will, testatrix first directed the payment of her debts; all the rest of her estate, including that over which she had power of disposition by will (and this is the only mention of the power), she gave to certain persons. The appointed1 estate is, therefore, not available for debts; and not being available throughout for the same purposes as testatrix’s own estate, is not blended with it. “The real test under our line of decisions is whether the testator has treated the two estates as one for all purposes and manifested an intent to commingle them generally:” Hagen’s Estate, supra.

The opinion of the other members of the court distinguishes Hagen’s Estate by saying that the residuary clause in the third item of the Hagen will disposes of the whole estate, and is the only part which deals with the power. But it is only the third item of that will that has anything dispositive in it. All the rest is recital. In the case at bar, the residuary clause of the will in which the mention of the power occurs disposes of the whole of testatrix’s own estate likewise.

On the other hand, are the cases of McCord’s Estate, 276 Pa. 459; Forney’s Estate, 280 Pa. 282; Twitchell’s Estate, 284 Pa. 135; Kates’s Estate, 282 Pa. 417; Howell’s Estate, 4 D. & C. 526, and Com. v. Morris, 287 Pa. 61, in which the appointed estate is available for all the purposes of the will, including debts. In Com. v. Morris, for example, the intention to exercise the power is stated in the preamble. Then follows a direction to pay debts (though the report does not show it), money legacies and a residuary clause, without further mention of the power. Both estates become available for all purposes — debts, legacies and residue — and blending resulted. It should be remembered, also, that McCord’s Estate and Howell’s Estate are special cases. In each there was emphatic language indicating affirmatively that testator wanted both estates to be treated as one; language which paraphrases the words of the Supreme Court, “blending the appointed estates with his own for all purposes.” In McCord’s Estate, for example, the will says: “The entire estate and property shall be administered by my executor hereinafter named for the purpose of carrying out the provisions of my Will.” Dohan’s Estate, 3 D. & C. 182, is another special case upon the other side. The will expressly said that the exercise of the power was confined to the residuary provisions.

We are not prepared to say that an excess of money legacies over the •amount of testator’s own estate is material in determining the question of blending in tax cases. South’s Estate, 248 Pa. 165, does not deal with blending. If there be such a principle, we do not see its application to the present case, for the money legacies here are only alternative gifts out of the residue. This would show, at most, that the appointed estate is available for all the residuary provisions, but not for debts. Testator has already said this expressly, and we do not need to resort to inference.

Stearns, J.,

dissenting. — I am unable to concur in the opinion filed herein. This is an appeal from an appraisement for inheritance tax purposes. The Commonwealth contends that the donee of a testamentary power of appointment, under a deed of trust, has blended the appointed estate with her own, and has thus made it subject to tax. The Hearing Judge sustained an appeal from an assessment, to which the Commonwealth excepts. Our court is evenly divided on this question.

Testatrix first directed the payment of her debts, and then provided: “All the rest, residue and remainder of my estate, real, personal and mixed, of which I may die seized or possessed, or which I may have in expectancy or remainder, or over which I may have power of disposition by Will, hereby expressly exercising any such power in me vested, I give, devise and bequeath, &c., . . .” She names her three sisters, and the survivor, beneficiaries, and appoints them executrices. Contemplating the predecease of all three sisters, in the third item of her will, she makes alternative dispositions to various persons and for certain uses. In such alternative dispositions, the amount of her pecuniary legacies exceeds the value of her individual estate.

In an opinion filed in the Estate of Elizabeth C. Winsor, deceased, No. 2484, July Term, 1927 [11 D. & C. 423], we have endeavored to collect and review the leading cases upon the subject of blending. I shall, therefore, not repeat what we have written therein. The test as to blending is whether an intention exists to make the trust estate a part of that of the testator and then to dispose of both estates as an entirety.

In the present case, the dispositive words are found in the residuary clause. It is to be observed, however, that it is by the residuary clause that she disposes of her entire estate. The feature in Hagen’s Estate, 285 Pa. 326, which, in my opinion, distinguishes it from the instant case, is that the third item of the will deals solely and exclusively with the power of appointment and its exercise. Testator expressly declared that he exercised the power in the same manner and as part of his residuary estate. The fourth clause of the will disposes of the residue. As pointed out by Judge Keller (see 85 Pa. Superior Ct. 123, 131, et seq.), the fact that the testator gave no direction for the payment of debts and made no pecuniary legacies, made the use of the words “as part of my residuary estate” significant. It was indicative of an intention that his individual estate should be used for the payment of his debts, “and the balance, if any remaining, should be disposed of in the same way that he disposed of the appointed estate.”

In Dohan’s Estate, 3 D. & C. 182, there was a direction to pay debts, but there were also numerous bequests, and, as in the Hagen Estate, there was an express declaration of intention of exercising the power of appointment “as part of and designating the same as my residuary estate.” The disposition of the residuary estate immediately followed. All the testator was held to have intended was to appoint in the same manner and for the same uses that he disposed of his individual estate.

A potent element indicating intention to blend is that at the time of the execution of the will, as well as at the time of decease, testatrix’s alternative legacies exceeded the value of her individual estate: South’s Estate, 248 Pa. 165.

Whether the will works a conversion of real estate into personalty would seem to he of little aid in discovering intent to blend. I do not understand that blending relates solely to personal property. The appointed estate and the individual estate of the donee of the power — both real and personal — is blended where the appointee makes the trust estate (real and personal) a part of his own and disposes of both estates as an entirety.

Upon a consideration of the entire will and of the record, I am unable to agree with the conclusions of the Hearing Judge and the opinion filed in support thereof. I am of opinion that the testatrix intended to blend the appointed estate with her own, generally, and for all purposes. I feel that this case is governed by McCord’s Estate, 276 Pa. 459, and the cases following it (see Winsor’s Estate, supra).

I would sustain the exceptions and affirm the appraisement and assessment.

Lamobelle, P. J., and Thompson, J., join in this dissent.


author: Martin, P. J.,

text:
    Union Paving Company v. Philadelphia.

      Saul, Ewing, Remide & Saul, for plaintiff; A. T. Ashton, for defendant.
    July 9, 1928.
   Martin, P. J.,

Plaintiff entered into a contract with the City of Philadelphia to furnish and deliver all materials and do and perform all work and labor required in paving certain streets specified in the contract. It was stated in the agreement that it was the purpose of the contract to replace the track area in the streets enumerated after the Philadelphia Rapid Transit Company had replaced existing rails; and that the Philadelphia Rapid Transit Company would remove the blocks and pile them on the sidewalk and do the sub-grading to the bottom of the ties.

It was agreed in the case stated that on one of the streets included in the contract no work with regard to the track or street had been done by the Philadelphia Rapid Transit Company, and that on another street the Philadelphia Rapid Transit Company removed the existing tracks and filled in the rails, but the old ties making up the street surface were not removed, nor was the sub-grading reconstructed to the bottom of the ties, and that the City of Philadelphia was, therefore, unable to permit plaintiff to proceed with the work.

If the work had been done which the City of Philadelphia was not able to permit the plaintiff to do, the contract would have required the City to have paid plaintiff $15,177.87. The reasonable market cost for doing the work would be $13,660.08. The profit the paving company would have made had the contract been performed is $1517.79.

It was argued on behalf of defendant that the contract was severable and dependent upon the work to be done by the Philadelphia Rapid Transit Company being performed; and that the liability of the City to pay was conditional upon the work by the Philadelphia Rapid Transit Company being done.

There was no reservation in the contract to relieve defendant from its terms in the event the transit company failed to perform the work which it was stated in the contract was to be done by that company. The plaintiff was ready to complete the contract, and by the failure of defendant to be in a position to enable plaintiff to proceed, a loss of profit was incurred in the amount stipulated in the case stated.

No legal reason is presented for relieving the defendant from liability.-

And now, to wit, July 9, 1928, it is ordered that judgment be entered against the City of Philadelphia and in favor of the Union Paving Company in the sum of $1517.79, with interest from Sept. 29, 1921.


author: Whitten, J.,

text:
    Commonwealth ex rel. v. Smith.

      Richard D. Laird and John E. Kunkle, for relator.

      Andrew G. Uncapher and Marker & Rial, contra.
    March 19, 1928.
   Whitten, J.,

At the municipal election in November, 1925, S. Craig King was elected Tax Collector of the Borough of Vandergrift for a term of four years, beginning on the first Monday of January, 1926. After having qualified and after having assumed the duties of the said office, King died Sept. 6, 1926.

Sept. 7, 1926, the borough council adopted the following resolution: “That W. T. Smith be appointed tax collector of the Borough of Vandergrift to serve until the next municipal election to fill the vacancy caused by the death of S. Craig King.”

At the municipal election in November, 1927, a tax collector for the said borough was not chosen, and the said W. T. Smith continued to exercise, and still does exercise, the powers, duties and rights of tax collector in. the said borough.

Feb. 28, 1928, upon petition of John R. Keister, District Attorney of Westmoreland County, the court awarded a writ of quo warranto directed to the said W. T. Smith that he be and appear before the said court to show by what authority he exercises the powers, duties and the office of tax collector in the said borough.

The said W. T. Smith made answer to the said writ, alleging that, by virtue of the said resolution of the borough council, adopted Sept. 7, 1926, he is entitled to hold the said office until after the election in November, 1929.

The appointment of W. T. Smith was made by the authority of the Act of May 8, 1923, P. L. 171, which provides, inter alia, that “such appointment shall be until the next municipal election, at which election a collector shall be elected for four years.”

However, the said Act of May 8, 1923, P. L. 171, was repealed absolutely by the Act of May 4, 1927, P. L. 519-666. The said Act of May 4, 1927, P. L. 519, provides:

“Section 850. Election of Tax Collector. The qualified voters of every borough shall, at the municipal election in the year one thousand nine hundred and twenty-nine, and every four years thereafter, vote for and elect one properly qualified person as tax collector of the borough.”

“Section 901. Filling Vacancies in Elective Borough Offices. If any vacancy shall occur in the office of burgess, member of council, auditor, controller, high constable or tax collector, or from a ward in the case of a ward office, or by failure or neglect to give bond as provided by law, or in any other manner whatsoever, the borough council shall fill such vacancy by appointing, by resolution, a qualified resident of the borough to such office for the unexpired term of the office.”

“Section 902. When Court to Fill Vacancies. If the council of any borough shall refuse, fail or neglect, or be unable for any reason whatsoever to fill the vacancy within thirty days after the vacancy happens, as provided by the preceding section, then the Court of Quarter Sessions shall, upon petition of the burgess or council or five citizens, fill the vacancy in such office by the appointment of a qualified resident of the borough for the unexpired term of the office.”

We construe the above sections of the Act of May 4, 1927, P. L. 519, to mean that:

(a) The vacancy — if it existed — in the office of tax collector, caused by the death of King, was not to be filled by the electors at the municipal election in November, 1927. In fact, the electors did not fill such vacancy at the election in November, 1927.

(b) Such vacancy — if it existed after the municipal election held in November, 1927 — should be filled by the borough council; and

(c) Upon the failure, refusal or neglect of the borough council to fill such vacancy, the duty to fill such vacancy is cast upon the Court of Quarter Sessions.

The next question, therefore, is: Did the appointment by the borough council of Smith as tax collector expire immediately after the municipal election held in November, 1927, or is such appointment still in force?

As above stated, the Act of May 8, 1923, P. L. 171, provides that “such appointment shall be until the next municipal election;” and on Sept. 6, 1926, the borough council appointed Smith “to serve until the next municipal election.” The “next municipal election” referred to by the borough council must have been the election to be held in November, 1927. been the election to be held in November, 1927.'

Of course, the borough council could not have foreseen that thereafter the legislature would dispense with the election of tax collectors at the municipal election in November, 1927.

In other words, it clearly appears that on Sept. 7, 1926, the borough council had no authority to fill the vacancy in the oifice of tax collector beyond the date of the municipal election in November, 1927, and that said borough council intended that the term of its appointee (Smith) would expire on the date of such municipal election.

Section 46 of the Act of Feb. 2, 1854, P. L. 21, provides that if a vacancy occurs in an elective city oifice, the city council shall fill such vacancy “until the next city election.”

In Com. ex rel. v. Warwick, 172 Pa. 140, the Supreme Court held that the appointee of the city council (where an elective city oificer had died) could not hold for the balance of his predecessor’s term of oifice, but only until “the next city election,” even although, at such election, the electors could not, under existing laws, vote for such an oificer.

Defendant’s learned counsel argue that the proviso (Act of May 8, 1923, P. L. 171) : “Such appointment shall be until the next municipal election at which a collector shall be elected for four years,” should be read thus: “Such appointment shall be until the next municipal election at which a collector may legally be elected.” However, the court has no authority thus to amend the statute.

A public officer, elected or appointed for a definite term, cannot hold over upon a failure to elect or against a successor unless by virtue of special legal authority so to do: Com. v. Young, 10 Schuyl. Legal Rec. 298; Com. v. Sheatz, 228 Pa. 301.

Section 103 of the Act of May 4, 1927, P. L. 519, provides: “Any person holding office under any act of assembly repealed by this act shall continue to hold such office until the expiration of the term thereof, subject to the conditions attached to such office prior to the passage of this act.”

If this proviso of the statute was intended to extend the term of any officer, it would be in conflict with article in, section 13, of the Constitution of Pennsylvania, which provides that “no law shall extend the term of any public officer . . . after his election or appointment.”

A tax collector is a public officer within the meaning of the above constitutional provision: Houseman v. Com., 100 Pa. 222; Com. ex rel. v. Moffitt, 238 Pa. 255; Dewey v. Luzerne County, 74 Pa. Superior Ct. 300; Tucker’s Appeal, 271 Pa. 462; Richie v. Philadelphia, 225 Pa. 511.

At the trial of this case, March 19, 1928, the parties thereto agreed upon a case stated embodying the facts above referred to. Indeed, there is no dispute as to any matter of fact.

Our conclusion is that the term of W. T. Smith’s appointment to the office of tax collector expired Nov. 8, 1927 — that being the next municipal election after his appointment. It follows that the plaintiff is entitled to judgment.

Decree.

And now, March 19, 1928, after argument by counsel and upon due consideration, it is adjudged and decreed that the said W. T. Smith is guilty of usurping, intruding into and unlawfully holding and exercising the office of tax collector of the Borough of Vandergrift, Westmoreland County, Pennsylvania, and the court here do give judgment that the said W. T. Smith be ousted and altogether excluded from the said office, rights and privileges, and that the Commonwealth of Pennsylvania do recover from the said W. T. Smith its costs in this behalf expended.


author: Hargest, P. J.,

text:
    Compton, Trustee, v. International Harvester Co. of America.

      Earl V. Compton, for plaintiff; John R. Geyer, for defendant.
    Sept. 21, 1928.
   Hargest, P. J.,

The questions before us now arise upon objections to the answer of the defendant, and were heard by the court in bane.

This is a bill for discovery in aid of an action at law. The defendant filed preliminary objections to the bill. While these were pending, the plaintiff filed a petition asking leave to amend. Objections were filed, the amendment was allowed, the preliminary objections were dismissed and the defendant directed to file an answer. The answer was filed by the secretary of the defendant company, not under oath but under the corporate seal. The bill of complaint contained interrogatories which were not answered. The plaintiff thereupon filed objections to the answer, which seems to be the proper practice: Hurley v. Delaware & Hudson Canal Co., 5 Dist. R. 257. These objections are (1) that the answer is not sworn to, and, therefore, does not comply with the equity rules; (2) that it is not responsive, because it does not deny the removal of the personal property; (3) that it is not responsive, because it does not answer the interrogatories.

1. The defendant contends that, inasmuch as the corporation alone is defendant and no officer has been joined, it is sufficient for the corporation to answer under its seal.

It has been held by some authorities that where discovery is desired from a corporation, some officer must be joined as defendant in the bill. The reason for this rule seems to be that unless an officer is joined, no one can be held for perjury, inasmuch as the corporation answers only under its corporate seal: 1 Pomeroy’s Equity Jurisprudence, § 199; 9 Ruling Case Law, “Discovery,” § 15. While it may be the better practice to join an officer, it is not necessary to give the court jurisdiction and the corporation must still make answer: 5 Brewster’s Equity Practice, §§ 5328, 5373; First National Bank v. Bristol Iron and Steel Co., 31 W. N. C. 503; 9 Ruling Case Law, ’“Discovery,” page 175, note 17; 18 Corpus Juris, 1064, note 7. It was once unsuccessfully urged that a bill for discovery did not lie against a corporation, because such a bill was required to be under oath, and the corporation never answered in that way: Bevans v. Dingman’s-Choice Turnpike, 10 Pa. 174. It has also been held that a corporation must answer interrogatories in a bill of discovery, under seal, even where no officer has been joined to answer under oath: French v. First National Bank, 9 Fed. Cases, 786, Case No. 5099.

The Act' of May 28, 1913, P. L. 358, and the equity rules have, in our opinion, changed the general rule that a corporation may answer a bill in equity under its corporate seal.

The Act of 1913 provides: “That hereafter all bills and answers in equity shall be sworn to.” There is no exception in favor of corporations.

Equity Rule No. 9 provides: “All bills, answers and amendments thereto, and all petitions not founded on matters of record only, must be sworn to before some person other than a party or attorney interested in the cause.”

Here, again, there is no exception in favor of corporations. It is argued that the purpose of this rule is only to designate the character of officer before whom the affidavit can be made. We do not think that the rule can be limited in that way. The order of the Supreme Court promulgating the equity rules recites that they are adopted “for the purpose of making the practice and procedure in equity conform as nearly as may be to the legislature’s requirements in regard to practice and procedure at law.”

Section 12 of the Practice Act of May 14, 1915, P. L. 483, provides that the affidavit of defense in actions at law “shall be sworn to by the defendant, or some person having knowledge of the facts.” If a corporation has knowledge of the facts which it desires to set up in an answer, it has such knowledge because some officer or employee knows them, and it is no hardship to require an answer which makes an averment of facts to be sworn to even in behalf of a corporation. We are of the opinion, therefore, that there is no exception in favor of a corporation.

Upon the filing of the objections to the answer, the defendant, apparently being in doubt of the correctness of its proceeding, filed a motion for leave to file an amended answer in the event that the court determines that an answer shall be under oath. That motion is now allowed.

2. The plaintiff contends that the answer is not responsive, because it does not deny the removal of personal property.

In Bevans v. Turnpike, supra, it is said: “The act (1836), so far, at least, as it relates to the discovery of fraud, is highly remedial, and is entitled to a liberal construction, so as to advance the remedy and suppress the mischief.”

In Lesser v. Henry, 50 Pa. Superior Ct. 440, 442, it is held that a bill for discovery does not invoke the jurisdiction to try and determine the controversy, but simply for the discovery of facts resting in the knowledge of the defendant, and there should “be some strong equity or stringent rule of policy that should form a bar to the discovery:” Bains v. Goldy, 35 Pa. 51, 52.

The bill in equity in this case avers that the defendant, by its servants and agents, removed personal property from the stores of the Keystone Tractor and Implement Company during the months of September and October, 1924, which personal property was owned by the Keystone Tractor and Implement Company. The answer generally denies that it removed “certain personal property owned by the Keystone Tractor and Implement Company” during those months from the stores of that company. There are necessarily two main questions to be tried in the action at law; first, whether the defendant removed any property from the stores of the Keystone Tractor and Implement Company, and, second, whether that property belonged to the latter company. The defendant has not denied that it removed any property. It has only denied that it removed the property belonging to the Keystone Tractor and Implement Company. If property was removed, the question as to its ownership is a vital question in the case and that question cannot be evaded by a general pro forma denial. Nor can it be tried in this suit.

In Bains v. Goldy, supra, it is said: “When there may be strong doubts of the materiality of the facts stated and inquired about, it is still the rule of the court of equity to require them to be disclosed, leaving it to the court of law to consider and decide the question.”

The defendant contends upon the authority of 1 Pomeroy’s Equity Jurisprudence, ■§ 229, that if the defendant fully denies all the allegations, the whole suit must fall. This is not the Pennsylvania rule. Our cases are clear that “the ultimate defense to a suit at law was (is) not relevant in proceedings in equity” (Sherwood v. Yellow Cab Co., 283 Pa. 488, 491), and in Bank v. Kern, 193 Pa. 59, 66, speaking of the bill in that case, it is said: “As a bill for discovery for the purpose of obtaining evidence, and in aid of a legal right, it did not draw the whole case into equity:” Lesser v. Henry, 50 Pa. Superior Ct. 440.

In Bains v. Goldey, 35 Pa. 51, it is held: “It is not competent for the defendant in a bill of discovery, in aid of an issue at law, to deny the truth of the principal fact upon which is based the plaintiff’s right to recover and to decline answering as to matters which would tend to prove the truth of the fact so denied; he must make discovery as to all matters which tend to prove the plaintiff’s case in the issue at law.”

In Wolfskill v. Edris, 5 Berks Co. L. J. 145, it is held that “the defendant in a bill of discovery must answer every material allegation of the bill, whether specially interrogated thereto or not, as fully as if specially interrogated thereto and disclose all the facts pertinent and responsive to every material allegation of the bill with the same degree of circumstantiality and positiveness as is required in an answer to interrogatories involving the same subject-matter. A denial, modo et forma, is not sufficient.” See, also, Equity Rule No. 52.

In view of the foregoing authorities, we find that the bill in question has not been sufficiently answered.

3. One of the plaintiff's exceptions is that the answer is not responsive because it did not answer the interrogatories. The interrogatories are brief, five in number, inquiring of the nature, amount and kind of property removed from the stores of the Keystone Tractor and Implement Company located in York, Harrisburg and in Palmyra, and upon what days the removal in each store took place. The fifth interrogatory is: “What are the names of your servants, agents or employees who made the removal?” The answer objects to answering the interrogatories until after final decree of discovery has been made, and specifically objects to answering the fifth interrogatory. This raises the question as to when interrogatories in a bill of discovery should be answered. Where a discovery is sought in a bill which asks for other relief, it may be quite apparent that answers to interrogatories should not be compelled in advance of the hearing to determine the right to the relief sought.

In Grange v. Penn M. L. I. Co., 235 Pa. 320, 335, which was a bill for specific performance of a contract of insurance and also for an accounting and for discovery in aid of the plaintiff’s proof, it is said: “Several of the interrogatories were of such a nature that to answer them would have been equivalent to the rendering of an account in advance of a decree awarding it.”

In Portuondo v. Faunce, 9 W. N. C. 539, the bill was for a receiver and a discovery and it seems to be decided that the plaintiff was not entitled to discovery until he had otherwise established his rights.

In Campbell v. Knowles, 13 Phila. 163, it is held: “When a bill is filed for an account, and the facts alleged in the answer are a bar to such a demand, no discovery can be had until there is a decree in the plaintiff’s favor:” Burkholder v. Hertzler, 8 Lanc. Law Rev. 113; Trust Co. v. Garis, 190 Pa. 544.

In Davenport Co. v. Pennsylvania R. R. Co., 166 Pa. 480, the practice of filing exceptions to interrogatories seems to be sustained. In the instant case, the interrogatories are objected to in the answer. However, where there is a clean-cut bill for discovery, in aid of an action at law, and where there is no objection to the interrogatories, they should be answered in the answer to the bill: Paper Co. v. Hincken, 21 W. N. C. 227; Bank v. Kern, 193 Pa. 59, 66.

It remains for us to consider only whether the fifth interrogatory should be answered.

The suit at law involved the removal of personal property and, as we have already said, two questions arise: First, whether personal property was removed, and, second, whether the property belonged to the Keystone Tractor and Implement Company. Upon the question of its removal, we think it may be pertinent and material, in the suit at law, to know the names of the servants, agents and employees of the defendant who removed the property, if, in fact, such persons did remove it. Therefore, there is no valid objection to answering all of the interrogatories, including the fifth.

From Homer L. Kreider, Harrisburg, Pa.


author: Kirkpatrick, J.,

text:
    United States of America v. Kerper and Norris.

      Charles Denby, Jr., Assistant U. S. Attorney; George W. Coles, U. S. Attorney, and E. G. Davis, Special Assistant to Attorney-General, for United States.

      Charles I. Thompson and Frederic L. Ballard, for defendants.
    Dec. 27, 1928.
   Kirkpatrick, J.,

In the indictment, the defendant, Norris, was charged in two counts with conspiring with Kerper, the other defendant, to transport liquor in violation of (a!) the National Prohibition Act and (b) of section 240 of the Criminal Code. Kerper pleaded guilty, and Norris, with leave of court, entered a plea of nolo contendere. After plea, evidence in the form of an agreed stipulation of facts was submitted1 for the information of the court in determining what sentence, if any, ought to be imposed upon the defendant, Norris. This involves a consideration of whether the things which the Government agrees that the accused has done constitute the crime charged. While the plea of nolo contendere raises no issue of law or fact under the indictment, the evidence consisting of the stipulation of facts will be received and made part of the record for the limited purpose above stated.

Summarized, the stipulated facts are as follows: Norris was a banker and resided in New York, Kerper was a bootlegger and had his i’esidence and base of operations in Philadelphia. From time to time, Norris, by telephone, ordered whiskey from Kerper in Philadelphia. Twelve different orders were given covering a period of over a year. Upon receiving each order, Kerper sent the whiskey ordered by express from Philadelphia to Norris in New York in packages disguised as paint, ink, olive oil, etc. The liquor was paid for by Norris from time to time and was drunk by him and his guests. He did not sell' or intend' to sell any of it, nor did he take any part in its transportation other than as above stated.

We agree that the mere purchase of liquor is not an offense under the National Prohibition Act and that the purchaser cannot be convicted of aiding and abetting the sale. Further, we will assume, without deciding, that where there is nothing in the case but a simple sale, the purchaser cannot be convicted of conspiring with the seller to make the sale; though it may be noted that the Supreme Court, in United States v. Katz, 271 U. S. 354, went no further than to say that such an indictment would be of doubtful validity.

It does not follow, however, that, where transportation is required by the agreement, there may not be an indictment of the buyer and seller for conspiracy to transport, even though what is contemplated is simply the delivery of the thing sold. Transportation of intoxicating liquor (is made a distinct substantive offense by the act. It is not necessarily involved in every sale. Even if it be conceded that in order to constitute a sale of an illegal commodity, as to which the law recognizes no such thing as title, there must be more than a bare contract to transfer ownership, and that no sale, as that term is used in the act, can be effected without a change of possession (i. e., actual, rather than constructive, delivery), still there are many ways in which such change of possession can take place without transportation. For example, the bootlegger might, without any previous understanding or even knowledge on the part of the other party, bring the liquor to the customer’s house, sell it to him and leave it there, or there might be a sale of liquor together with the premises on which it was stored, followed by the seller’s moving out and the purchaser’s moving in. Hence, the rule which forbids indictments for conspiracy in that class of crimes which cannot be committed, except by the agreement of two parties, is not to be extended to the transportation of liquor, even though it may be incident to a sale. The dictum of the Supreme Court in United States v. Katz, supra, to the effect that the embarrassment caused by that rule “could be avoided only if the buyer and seller were charged with conspiring to commit a substantive offense having an ingredient, in addition to the sale, not requiring the agreement of two persons for its completion,” is plainly applicable to an indictment for conspiracy to transport.

The connection of the defendant, Norris, with the illegal transaction was decidedly more than “that degree of co-operation which would not amount to a crime” referred1 to by Justice Holmes in United States v. Holte, 236 U. S. 140. Of course, mere knowledge that a crime is about to be committed by another does not make the inactive party a conspirator, nor will awareness, coupled with acquiescence and possibly expressed approval and encouragement, have that result. But in respect of the transportation, Norris did far more than know and acquiesce. He also did more than merely let Kerper know that he was in the market for liquor. By his repeated orders of whiskey telephoned from New York to Philadelphia, he became party to an agreement which required Kerper to transport the liquor and he promised to pay him for doing it. Thus he not only solicited, but bound, Kerper, by such obligation as the character of the transaction permitted, to commit the offense. As was pointed out in United States v. Holte, supra, the word “commit” in the conspiracy statute means no more than “bring about.” It is beyond all question that the purpose and intent of the agreement was to bring about the transportation of the liquor from wherever it may have been to Norris’s home.

The conclusion is (1) that a conviction may be had of a buyer and seller of liquor for conspiracy to transport liquor in a case where the agreement is that the delivery of the liquor sold is to be effected by transportation from the seller to the buyer; and (2) that an order by a purchaser to a bootlegger located at a distance to deliver liquor, followed by transportation, delivery and payment, is sufficient evidence of such an agreement.

What has been said1 applies with equal, if not greater, force to the second count of the indictment.

It is the clear intent of Congress that the punishment for transporting liquor shall be by fine only. In this case, the conspiracy element adds nothing by way of aggravation. The sentence imposed should not exceed that which would follow the conviction for transportation only.


author: Barnett, P. J.,

text:
    Morrison’s Estate.

      J. C. Matter and J. M. McKee, for exceptions; Luke Baker, contra.
    July 28, 1928.
   Barnett, P. J.,

Under the provisions of the Act of June 7, 1917, § 12 (a), P. L. 447, personal property of the decedent to the amount of $500 was appraised and set apart to his widow, Maude E. Morrison, as her exemption. On behalf of Mrs. Edna P. Swartz, daughter of the intestate decedent, stepdaughter of the widow, exceptions to the appraisement were filed, alleging that certain items thereof were grossly undervalued. The items particularized in the exceptions were valued by the appraisers at sums aggregating $211.50. Jesse R. Swartz, husband of thé exceptant, the only witness called by her who placed a value on all the items to which exceptions were taken, fixes their aggregate value at $740.25. Five other witnesses, including the exceptant, estimate the items respecting which they respectively testify at approximately the same figures given by Swartz. On behalf of the widow, the two appraisers testify that the values fixed by the appraisement are just. Six other witnesses, omitting the household goods, value the livestock and farming implements at figures, the sums of which average $290.30. If to this average there be added $85.55, the aggregate of values placed on the household goods by a disinterested witness for the exceptant, who omits one of the items in this class and whose figures for the remainder of the items excepted to are the lowest given by the exceptant’s witnesses, the total is $375.85.

While there is no evidence whatever to indicate fraud or deliberate unfairness on the part of the appraisers, or collusion between them and the widow, we are of opinion that such substantial undervaluation has been shown as to require the court to withhold its approval of the appraisement. The witnesses called to justify it, excluding the appraisers themselves, make the value of the questioned items nearly twice the amount at which they were appraised. It was agreed by counsel at the hearing that in case the court should conclude from the testimony that the appraisement ought not to be approved, instead of requiring a reappraisal, which, in view of the improvement of the livestock in value since the appraisement, might not be fair to the widow, the court should fix a sum which in their opinion would equitably adjust the undervaluation and direct that the administratrix, who is the widow, be charged with such sum in her account. This sum we fix at $150.

There is no agreement of counsel respecting the costs, and the power of the court to order their payment is questioned. It is true that no statute can be found authorizing the Orphans’ Court to dispose of costs. Such a statute is the only source of authority in the common law courts over costs. The Orphans’ Court is not a common law court, but is created by statute, and is clothed, within the sphere of its jurisdiction, with the powers of a court of equity: Com. v. The Judges of the Court of Common Pleas, 4 Pa. 301, 303; Brinker v. Brinker, 7 Pa. 53, 55; George’s Appeal, 12 Pa. 260; Power v. Grogan, 232 Pa. 387, 395; Mallory’s Estate, 285 Pa. 186, 190. “The Orphans’ Court in its large and important jurisdiction over executors, administrators, guardians, and other trustees, has always been considered a court of equity. They adopt the rules and principles of equity as their guide in the settlement of their accounts:” Bayley’s Appeal, 60 Pa. 354, 360; Steffy and Shimp’s Appeal, 76 Pa. 94, 96. "It is possessed of chancery powers, and can proceed according to chancery practice to make all such decrees, interlocutory and final, as may be necessary in the administration of its appropriate duties:” Horner & Roberts v. Hasbrouck, 41 Pa. 169, 180. “In equity, the award of costs depends largely on the facts and circumstances of each particular case, and rests entirely within the discretion of the court, to be exercised upon principle and with reference to the general rules of practice:” 7 Ruling Case Law, 783. In the Orphans’ Court, charged as it is with the administration and distribution of trust funds and decedents’ estates, a like power, to be similarly exercised, is necessary and has frequently been held to be inherent in the court. The Orphans’ Court has complete control of all questions as to costs: McCullough’s Estate, 47 Legal Intell. 213, cited in 4 Brewster’s Practice, 841. The distribution of the costs of an audit in the Orphans’ Court is largely in the discretion of the court and will not be reversed except for clear abuse of discretion: Lusk’s Estate, 150 Pa. 517. The allowance of costs in the Orphans’ Court is in the discretion of the court: Toomey’s Estate, 150 Pa. 535. “The Orphans’ Court administers equity, and will consider all the circumstances presented in determining the question (of costs). Only in case of an abuse of this power will its order be set aside:” Grollman’s Estate, 273 Pa. 565, 567, 569.

In the present case the exceptions are shown by the testimony to have been justified, and the costs should not be imposed directly upon the exceptant, the successful party. No fault has been shown in the widow, who had the right in good faith to defend an appraisement whose integrity she had no reason to question. Others interested in the estate, though not parties to this proceeding, will profit through the initiative of the exceptant. We feel that an equitable disposition of the costs is to direct that they be paid out of the general estate as part of the expenses of the administration.

And now, July 28, 1928, it is adjudged that the goods appraised and set apart to the use of the widow were undervalued to the amount of $150, and to this extent the exceptions are sustained; for the purpose of confirming title in the widow to the property set aside to her use, the appraisement is approved and ordered filed; but it is further ordered that the widow, as administratrix, be charged in her account with the said sum of $150 as part of the personal estate of the decedent; the costs of this proceeding to be paid out of the estate as part of the expenses of administration.

Prom J. N. Keller, Mifflintown, Pa.


author: McCann, J.,

text:
    Detwiler v. Williamsburg Borough.

      W. I. & John Woodcock and J. F. Sullivan, for plaintiff.

      G. G. Patterson and F. G. Fisher, for defendant.
    Aug. 9, 1928.
   McCann, J.,

47th judicial district, specially presiding,

The Borough of Williamsburg, with a population of 2000 and a present indebtedness of $8500, on Sept. 5, 1922, by ordinance of council regularly approved, condemned 1200 acres of land on Tussey Mountain, owned by A. J. Detwiler.

Viewers were appointed by the Court of Common Pleas of Blair County, and awarded the plaintiff $14,075 on April 5, 1926, as damages for the land taken. The Borough of Williamsburg appealed from the award to No. 83,' March Term, 1926, and upon trial of the issue on Jan. 27, 1928, the jury returned a verdict in favor of the plaintiff in the sum of $13,006.50. The defendant borough immediately filed a motion for leave to withdraw and discontinue the condemnation proceedings, and averred that the borough had never taken actual physical possession of the land or exercised any ownership thereof and did not in any way injure or damage the same. The defendant council immediately enacted an ordinance repealing the condemnation ordinance within four days after the award, and in said petition prayed the court to refer the matter to viewers to determine the amount of reasonable costs and expenses incurred by the plaintiff by reason of said condemnation proceedings and the discontinuance thereof, all of which was done by ordinance of the Borough of Williamsburg.

Testimony was taken as to whether or not actual possession of the land had been taken, and it is conflicting to some extent. A review of the testimony shows that the borough took what steps were necessary to prevent pollution of the water-shed, such as the abatement of nuisances thereon, and the borough authorities may have posted some trespass notices on the property, but, in our opinion, no actual possession was taken.

We are satisfied the borough had the authority to discontinue the condemnation proceedings under the circumstances in this case. Section 34, article 11, chapter 6, of the Borough Code of May 14, 1915, P. L. 312, 343, provides: “If any borough shall repeal any ordinance, or discontinue any proceeding, prior to the entry upon, taking or injury to any property or materials, the borough shall not be liable to pay any damages which have been assessed, but all costs upon any such proceeding shall be paid by the borough, together with any actual damage sustained by reason of such proceeding.”

In re Franklin Street, 14 Pa. Superior Ct. 403, 411, President Judge Rice, speaking for the Superior Court, held: “It is safe to say, in general, that the courts have been careful not to lay down a rule upon this subject which will prevent municipal corporations from receding from proposed action of this kind before the land owner had sustained final judgment for his damages, unless the corporation has in the meantime taken actual possession of the land. See generally upon the subject, Elliott on Roads and Streets, 209, .280, and 2 Dillon’s Mun. Corp., § 608. It is proper that this view should be taken. The public good, or the inability of the treasury to fairly bear the burdens, may require that it should recede, and if the land owner is fairly compensated for the actual injury he has sustained, no injustice is done in permitting the municipality to do so. A careful investigation of the Pennsylvania cases bearing on the subject has failed to convince us that a stricter rule should be applied in the present case.”

“No rule has been laid down that will prevent municipal corporations from receding from a proposed condemnation before the land owner has obtained final judgment for his damages, unless the corporation has actually taken possession:” Monongahela R. R. Co., 255 Pa. 211; Philadelphia v. Com., 284 Pa. 225.

We are satisfied that the borough has the right to discontinue in this case, for the reason that the amount of the verdict far exceeded the borrowing power of the council. The consent of the electors had not been obtained prior to the passing of the ordinance, and, under any view of the case, the amount of the verdict exceeded 2 per cent, of the assessed value of the property. This is true whether we consider it an increase of indebtedness at the time of the condemnation or at the time that the verdict was returned.

The argument [is] that the present case is an exception to the general rule, in that the constitutional amendment provides that where water-works are purchased or erected and payment of the costs is provided for by a bond issue upon the water-works alone, without any liability on the part of the municipality, it is not an increase of indebtedness within the meaning of the Constitution; however, the land for these water-works was not so acquired. It was the cost of the additional land for the water-shed, under the condemnation proceedings, that was intended by the ordinance to be a general debt of the municipality, and no attempt was made to take advantage of the constitutional amendment, and we doubt whether, under any circumstances, it could have been done, for the reason that the water-works had been acquired by the Borough of Williamsburg and paid for out of the general revenue of the borough. The land containing the water-shed was not, and is not now, producing any revenue. It is unproductive timber land.

It is [not] necessary to refer to the various cases sustaining this point of view, for the reason that the borough authorities never contemplated taking advantage of any constitutional amendment in this case.

No final judgment having been entered, no actual possession of the land having been taken by the municipality, the condemnation, especially as revealed by the verdict in this case, attempts to create an indebtedness beyond the powers of the borough council, and we are satisfied that the right to discontinue should be granted.

Decree.

And now, Aug. 9, 1928, the prayer of the petition for leave to discontinue and withdraw from the condemnation proceedings in the above case is granted, upon payment of the costs of said case and the payment to the plaintiff of reasonable costs and expenses occasioned by, and resulting from, said proceeding and the discontinuance thereof. E. U. Patterson, Nelson Keim and Joseph M. Delozier are appointed viewers to view the premises and determine the reasonable costs and expenses occasioned to the plaintiff by, or resulting from, said condemnation proceedings and the discontinuance thereof.

From Robt. W. Smith, Hollidaysburg, Pa.


author: Koch, P. J.,

text:
    Stichler v. Stichler.
    Oct. 8, 1928.
   Koch, P. J.,

The ground of divorce stated by the libellant is that “the respondent on the 1st day of April, A. D. 1920, in the village of Newtown, Township of Reilly, County of Schuylkill, State of Pennsylvania, aforesaid, wilfully and maliciously, and without a reasonable cause, deserted the libellant and absented himself from her habitation and has continued in the said wilful and malicious desertion during the term or space of tw.o years and upwards, to wit, from the date of the said wilful and malicious desertion, on the 1st day of April, A. D. 1920, and thence hitherto.”

In his report, the master states the cause of divorce in the language just quoted above from the libel, but he fails to find the fact to be as so alleged. Under his heading “Findings of fact,” he, inter alia, says: “The libellant and respondent were residents of Schuylkill County, Penna., the former having resided in said county all her life. After their marriage they resided at New-town in Reilly Township, Schuylkill County, Penna., with an aunt of the libellant. They continued to reside in said place and county aforesaid until the desertion of the respondent on the 1st day of April, A. D. 1920.” Again: “The testimony and evidence show that the libellant and respondent . . . after their marriage . . . went to live with the libellant’s aunt and lived with said aunt until the time of the said desertion by the respondent on the 1st day of April, 1920.” And from such so-called findings he draws, among his “Conclusions of Law,” that: “5. Respondent deserted libellant wilfully and maliciously, and without reasonable cause and has continued in said desertion from the 1st day of April, 1920, up to the time of the filing of this libel and thence forth.”

The Act of March 10, 1899', P. L. 8, authorizes the Court of Common Pleas to appoint a master in a divorce case “who shall take the testimony and return the same, together with a report of the proceedings before him and his opinion of the case to the court,” and it gives the court power to adopt rules regulating the proceedings before the master and fixing his fees. A master’s report in a divorce proceeding should be framed according to the rules for the preparation of reports of masters in chancery: Moore v. Moore, 11 Dist. R. 253. To say that the evidence shows so and so is not finding a fact; some of the evidence may also show just the opposite. The master has the witnesses before him and must find his facts from the evidence. It is not sufficient that the master says that he finds the averments of the libel made out. He must state what facts he finds. In this instance, it is apparent that the master intended to find that the respondent deserted the libellant wilfully and maliciously and without a reasonable cause and that he has persisted in that desertion from April 1, 1920, until the present time. But what he states as a legal conclusion does not answer for a finding of fact. Nor does his recommendation for a decree of divorce answer the purpose. His findings of fact must be definite: Moore v. Moore, 11 Dist. R. 253; Pomeroy v. Pomeroy, 11 Dist. R. 299. His findings of fact must be’stated expressly as facts and not as matters of opinion: Campbell v. Campbell, 11 D. & C. 253, 26 Pa. C. C. R. 671. And his opinion must be founded on clear and precise findings of fact deduced from the proofs stated by him: Ibid. “A running comment on the facts is not a specific finding of any fact. Unless the facts are specifically found, the legal conclusions cannot follow in an orderly manner:” Nungesser v. Nungesser, 32 Pa. C. C. Reps. 383. See, also, Gerhart v. Gerhart, 5 Berks Co. L. J. 241; Miller v. Miller, 9 Berks Co. L. J. 85. “Whether exceptions are filed to the report of a master or not, it is still the duty of the court to examine and carefully consider the evidence and determine whether it satisfactorily establishes the facts which, under the express authority of the statutes, authorize a court to enter a decree:” Micheals v. Micheals, 65 Pa. Superior Ct. 464, 467. A master should find the main fact upon which the libel for divorce is based, as stated in the language of the act of assembly which authorizes a decree on such ground, unless the testimony will not support such finding of fact or unless he does not believe the testimony.

The record is remitted to the master to report his findings of fact in accordance with the views herein expressed. From M. M. Burke, Shenandoah, Pa.


author: Gordon, Jr., J.,

text:
    Garlic’s Case.

      Henry S. Drinker, Jr., for Board of Censors.

      Michael J. McEnery, for respondent.
    Jan. 11, 1929.
   Gordon, Jr., J.,

This case is before us on a rule to show cause, granted under Rule 215 of the Rules of Court, upon the petition of the Committee of Censors of the Law Association, praying for the disciplining of the respondent, Simon Garlic, for alleged misconduct in his office of attorney. After hearing, the Committee found the respondent guilty of embezzlement and unprofessional conduct, in two specific instances, and, from the evidence presented before us thereon, we affirm the findings of the Committee as to one of the two instances, but cannot affirm them as to the other.

Considering, first, the case in which we disaffirm the findings of the Committee, which related to an alleged embezzlement of $25 belonging to a client, Madeline Farrell, from a recovery of moneys in an accident case, it will be sufficient to say that the testimony of a witness before us, who should have been, but was not, called before the Committee by the respondent, raises a sufficient doubt as to the correctness of the client’s testimony, that she did not receive the money, to make us hesitate to reach a conclusion adverse to the respondent. We, therefore, acquit him of the misconduct alleged against him in this matter.

With respect to the charge in which we affirm the findings of the Committee, the evidence supporting it is clear and certain, and in its essential and controlling features, is admitted by the respondent. In March, 1926, August W. Schwing retained the respondent to represent him and his minor son in a claim against the Philadelphia & Reading Railway Company for damages for a serious injury to the son involving the loss of both of his feet by being run over by a train. After some negotiation, the respondent represented to the client that the case could be settled for $5000, and, having secured the latter’s agreement to such a settlement, induced him to execute a release to be used for that purpose. The respondent then settled the case with the railroad for the amount agreed upon and, on July 23, 1926, received the money from the company. The proceeds of the settlement were deposited at once by the respondent in his personal account and converted by him to his own use; and thereafter, for a period of two years, he repeatedly reported falsely to his client that settlement had not yet been made, so that the client learned the truth only when a representative of the Committee of Censors, which was conducting a general investigation, disclosed it to him in the summer of 1928.

The respondent admitted that, after receiving the money from the railroad company in settlement of the case, he deposited it in his own account and appropriated it to his own use. He claimed, however, first, that, notwithstanding this was a clear misappropriation of the client’s funds, he thought he had a legal right to do so, so long as he was solvent; and, second, that he did inform his client of the receipt of the money, that the client authorized him to invest it for the boy, and that he had invested it in a mortgage. When asked for details of the investment, however, the respondent said that, having at the time a half interest in a mortgage owned by his mother, he used the money and treated his interest in the mortgage as belonging to the boy, although he failed to show any declaration of trust or other instrument in favor of the boy, or even that the interest which he claimed in the mortgage held by his mother rested on anything other than his own unsupported assertion. This mortgage was paid off in the summer of 1927, and the respondent testified that the proceeds were invested in first mortgage coupon bonds of a Chicago apartment-hotel. When asked by the Committee of Censors, at its hearing, to produce the bonds, the respondent, who at that time said they were registered bonds, declared that they were in a safe-deposit box in New York, but, after some delay, produced them. As already noted, they actually were coupon bonds, and had been produced from his mother’s private safe-deposit box in this city. At a later stage of the hearing before the Censors, the respondent took his client to a bank, under circumstances which will be commented on hereafter, where he deposited, in the name of himself and his client, as trustees for the boy, the amount due the boy and his father.

Taking it at its best, this explanation by the respondent of his conduct is an admission of a misappropriation of a client’s money, and a neglect and betrayal of the client’s interests, scarcely less culpable than the deliberate embezzlement of which it is a transparent evasion. In the handling of a client’s moneys, an attorney occupies a position of trust and confidence of the highest order, the corollary of which is the duty scrupulously to safeguard and protect it in the form in which it is received and to deliver it intact to the client at the earliest possible moment. Therefore, the mere mingling of a client’s, moneys by an attorney with his own is a wrongful misappropriation of them, while the actual personal use of them is an embezzlement, regardless of the responsibility of the attorney. A client cannot be compelled to take the solvency of the attorney in lieu of the money in hand. This is so obviously true, and so thoroughly grounded in the very foundations of professional honor and integrity, that we would have deemed it unnecessary even to state it, had not the respondent asserted the contrary as one of his defenses to the rule.

Chief Justice Sharswood, in a volume of lectures on professional ethics, delivered before the Law School of the University of Pennsylvania and published in 1854, thus solemnly cautions the young lawyer respecting his duties in the handling of clients’ moneys: “Most emphatically should it be said, let nothing tempt you, not even the knowledge and consent of the client, to keep the money which may come to your hands professionally one single instant longer than is absolutely necessary. The consequence of any difficulties arising upon this head will be fatal to your professional character and prospects.” The literary charm and edifying instruction of this work merit the careful and constant study of the bar, particularly of its younger and more inexperienced members. It is spiritually strengthening, and should be a “lamp unto the feet and a light unto the path” of the advocate seeking safe passage through perplexing questions of professional propriety.

The respondent’s second defense, which is based upon the contention that his client authorized him to invest the money for the boy, and that he did so in the manner already indicated, is without merit in fact. It rests upon his own assertion, not only in those particulars in which it is contradicted by the client, but also in those in which, if true, it could and should be corroborated by documentary evidence or the testimony of others, and, in its inherent improbability, completely fails to carry conviction. It is impossible to believe that a client, who has authorized his attorney to invest money for him, and who, for two years or more, has been content with the assurance of the attorney that his directions have been carried out, would, when questioned by the Censors, assert and consistently maintain, not only that he never authorized such use of the money, but also that he did not even know his case had been settled. His dissatisfaction in such circumstances would be directed to the failure of the attorney to pay over money received, rather than to his neglect to settle the case. Again, the total absence of those corroborating documents — such as letters of notification of settlement, confirming the carrying out of alleged instructions, disclosing the details of investments or changes therein, declarations of trust, evidences of ownership, interest payments, &c.— to which a real transaction would give rise, wholly discredit the respondent’s answer to the charge.

It is unnecessary to point out the many other particulars in which the respondent’s story is faulty. It abounds in absurdities and improbabilities, and, on its face, is a palpable attempt by patent falsehood to deceive the court, of which he is an officer, and to mislead its judgment in its search for the truth of the matter. One other significant circumstance, however, should be mentioned. After his interview with the Censors’ investigator, Mr. Schwing testified before that body against the respondent and told how, for years, he had been repeatedly deceived and put off by the respondent’s assurances that the settlement was still in progress and had not yet been consummated, and this story he consistently maintained and repeated, both in public and private, even to the hearing before us. After he testified before the Censors, however, he was enticed to the respondent’s office where he was skilfully cajoled and tricked into signing a statement repudiating his testimony before the Censors. His want of familiarity with the language probably facilitated the framing of the statement and the procuring of his signature to it, while his caution was lulled by the promise of prompt restitution of the moneys due him.

It requires no subtlety of discernment to appreciate the real nature of this attempt to discredit the testimony of Mr. Schwing, and. to create the appearance of corroboration of the respondent’s story that he was authorized to invest the money in question for the boy. The circumstances under which the statement was secured, and the evident unreliability of all the witnesses to its execution, except the official stenographer, who, we are satisfied, acted innocently in the matter, clearly disclose its want of evidential value. It is important, however, for the light it throws upon the bona fides of the respondent’s defense to the charge against him, by indicating the length to which he is prepared to go to deceive both the Censors and the court, to each of which he is under a solemn obligation to behave with fidelity and to use no falsehood. Such practices are destructive of that relation of absolute trust and confidence between the bench and bar, without which neither can render its full measure of public service. The important and honorable office, which the Censors render to the profession, and to the community, compels us to stamp with our condemnation the employment of falsehood and deception in dealing with them. Indeed, such methods in themselves justify the application of the ultimate disciplinary measure of disbarment.

It would serve no practical purpose to elaborate further the details of the respondent’s misconduct. We have searched the evidence diligently, but without avail, to discover some mitigating circumstance to justify withholding a remedy which is always reluctantly applied. This respondent has more than once heretofore been reprimanded and warned by the Committee of Censors. He has now betrayed a client’s trust, embezzled his money, and, when detected, has resorted to equivocation and deceit to evade the consequences of his wrongdoing. A shamed profession can redeem and preserve its high repute, and rehabilitate itself in the public confidence, only by sternly expelling from its ranks one who has so grievously dishonored its traditions.

The rule of the Committee of Censors is, therefore, made absolute, and the prothonotary is directed to strike from the roll of attorneys of the court the name of Simon Garlic, the respondent, and to give notice of this action to the Orphans’ Court of Philadelphia County and to the Supreme and the Superior Courts of Pennsylvania.


text:
    Sterling Finance Association v. Frankel et ux.

      O. Rosenbaum, for plaintiff; A. H. Wernick, for defendants.
    July 17, 1928.
   Martin, P. J.,

Defendants jointly executed a judgment note in the sum of $1000 to the order of plaintiff. The note was entered of record, damages were assessed and a writ of fieri facias issued. The defendant, Ida Frankel, filed a petition, averring that she is the wife of Isadore Frankel, the other defendant; that the loan for which the note was given was made by plaintiff to her husband, and that her name was signed to the note as surety.

This rule was granted to show cause why the judgment should not be opened as to Ida Frankel.

An answer was filed which admitted that petitioner is the wife of Isadore Frankel, but averred that the loan was made to Ida Frankel on condition that her husband, the other defendant, would sign the note as co-maker; and that the loan was made to her to enable her to pay taxes, water rent and interest on her property.

Depositions were taken on behalf of defendants, both of whom testified that the loan was made to Isadore Frankel and that Ida Frankel signed as surety. No counter depositions were taken.

And now, to wit, July 17, 1928, the rule to open the judgment as to Ida Frankel is made absolute.


author: Van Dusen, J.,

text:
    Hunter’s Estate.

      Elmer A. Schroeder, Paul V. Neall, Harold D. Saylor and Lamberlon & Moffett, for exceptants.

      William M. Boenning, contra.
    Dec. 7, 1928.
   Van Dusen, J.,

It was objected to the claim of the executors of Edward H. Burr that it did not appear on the face of the papers that the $5000, represented by Welsh’s notes, was advanced to promote his career as a concert pianist, which was the purpose specified in the agreement which decedent signed. The attorney who brought all three parties together, drew the papers and supervised the expenditure of the money, and who was in an excellent position to know the facts, testified that “The money was actually paid by Burr and expended on my direction in the furtherance of Hunter Welsh’s musical career;” that most of the money was paid out for one specific purpose, which he described, and that (whatever the dates on the papers) no money was advanced until decedent’s agreement was signed, or agreed to be signed. This latter testimony explained the confusion resulting from the fact that an agreement between Welsh and Burr, dated in January, spoke of money advanced and to be advanced, that three of the four notes bore that date, and yet decedent’s agreement was dated in February.

Evidence outside of the writings was necessary to connect the notes with decedent’s agreement, and what was offered did this without contradicting the writings except in correlating the relative dates of the advances and the agreement. This is admissible: Hewes v. Taylor, 70 Pa. 387; Cutter v. Pierson, 26 Pa. Superior Ct. 10; Davis v. Cauffiel, 287 Pa. 420. It was consistent with both of the two possible constructions of the decedent’s agreements, as referring to past and future advances, or only to future advances, for it established that they were all future advances.

The same testimony showed that Burr accepted decedent’s promise, for he acted on it.

The exceptions are dismissed and the adjudication is confirmed absolutely.