author: Monaghan, J.,

text:
    P. E. Sharpless Co. v. Levin et al., trading as Levin Brothers.

      Trade-ma/rlcs — Infringement—Unfair competition — Similarity of labels— Deception of ultimate consumer — Test of infringement ■ — • Account refused where plaintiff is tardy in filing bill.

    1. The fundamental principle underlying the infringement of trade-marks and unfair competition is that no person may simulate the mark or label constituting the indicia of his rival in trade, whereby he or his vendee is enabled to practice deception by passing off: his goods directly or indirectly as those of his rival, and so work a fraud upon him and upon the public.
    2. The resultant effect of the respective labels to confuse and mislead is to be measured and ascertained by the probable effect on purchasing consumers of the product, and not whether jobbers or retailers familiar with, both products are readily able to distinguish between them; a manufacturer is guilty of unfair competition if, by the similarity of his label to that of his competitor, he puts it in the power of his retailers to mislead purchasing consumers.
    3. Although intent to deceive, i. e., fraud, must be established in cases of unfair competition, it is not necessary to prove actual deception where there is a degree of similarity calculated to deceive an ordinary purchaser buying with ordinary caution, because the intent to deceive may be inferred from the nature of the act.
    4. In testing what is or what is not a similar label, the court need not depend upon elaborate descriptions of the points of resemblance or those of difference, but should decide by the impression created by the label on the ear or- eye or both, thus deciding the question on the same basis as the purchaser who, in the ordinary course of trading, is called upon to ju,dge as to the identity of the defendants’ label. The test of identity is not whether a difference is recognized when the two competing articles are placed side by side, but whether it will be recognized by a purchaser not having an opportunity to compare them. Such similarity as will deceive is that likeness which renders the average buyer unable to distinguish the defendant’s label from the memory of the plaintiff’s label which he carries in his mind, not such as will enable him to know them apart when the two are put side by side before him.
    5. Where plaintiff has been tardy in applying for relief against an infringement of his trade-mark or against unfair competition, he is not entitled to an account from the defendant.
    6. Since 1907 plaintiff had been engaged in producing, manufacturing and selling dairy products, including a grade of soft cheese, made from whole milk, packaged and sold by it under the title of “Neufchatel Style;” this cheese contained 20.70 per cent, butter fat and acquired a high reputation. Plaintiff sold the cheese in small cylindrical rolls, enclosed in tin-foil wrapping, on which was printed in blue ink a rectangular label the length of the roll, purporting to indicate the character of the contents. Plaintiff’s label had been the same since 1907, except that it adopted and had used since March, 1913, the word “Pesco” in substitution for a picture of a cow; in all other respects the original and modified labels were identical. Plaintiff’s cheese was sold largely in South Philadelphia, among Jews and Poles who could not read English. In 1913, defendants began to sell, at No. 115 Pine Street, a soft cheese, packaged and labeled as “Neufchatel Style.” This cheese contained 11.16 per cent, butter fat; was wrapped in packages of the same size and shape as plaintiff’s, and bore a label, printed in blue ink, which produced the impression of close resemblance to plaintiff’s label and could easily be mistaken for it by the consuming purchaser, although entirely distinct to jobbers and dealers. It should be noticed that, whereas plaintiff’s trad'e-mark had the name of the maker at the top, defendants’ trade-mark did not disclose the maker and merely had "Guernsey Brand;” the word “Cremo” was used instead of the word “Pesco;” the words “Made Daily” were on both labels, having much the same slant from the perpendicular. Plaintiff’s mark indicated that the cheese was made at Concordville, Pa., the defendants’ mark merely indicated that their cheese was made in Pennsylvania. The words “Neufchatel Style” were the same in both. Plaintiff discovered the infringement in 1915. On bill filed by plaintiff on June 24, 1919, to enjoin defendants from further use of the label they had adopted, or in any other manner imitating substantially the mode of packing adopted by plaintiff, and that defendants be decreed to account for profits; Held, that plaintiff was entitled to an injunction, but not to an accounting, as it had been tardy in filing its bill.

      Bill, answer, replication and proofs. C. P. No. 5, Phila. Co., June T., 1919, No. 2323, in Equity. _

      M. Herzberg and H. T. Fenton, for plaintiff.

      Evans, Forster & Wemick, for defendants.
    Oct. 24, 1921.
   Monaghan, J.,

The plaintiff, P. E. Sharpless Company, a corporation, filed its bill in equity June 24, 1919, charging the defendants, Levin Brothers, with unfair competition in the sale of Neufchatel cheese, by means of an imitative and deceptive label; the defendants filed an answer denying the unfair competition. A replication was duly filed and the cause was heard on bill, answer, replication and proofs. After the close of the plaintiff’s case the defendants offered no testimony.

The prayers of the bill are that the defendants and each of them, and their servants, agents and employees, be restrained from any further use in unfair competition of their label (Exhibit “B”), or any substantially similar thereto, now used by them in fraudulent imitation of plaintiff’s label (Exhibit “A”), or in any other manner imitating, substantially, the mode of packing so-called “Neufchatel” cheese in cylindrical packages of tin-foil with the aforesaid label printed thereon in blue ink; that defendants be decreed to account; general relief.

Findings of fact.

1. The plaintiff corporation is the successor in business of P. E. Sharpless & Co. and its predecessors, and is now and has been, since its incorporation in 1904, engaged in the business of producing, manufacturing and selling dairy products, including, since 1907, a grade or type of soft or uncured cheese, made from whole milk and packaged and sold by it under the name or title of “Neufchatel Style,” and by the general trade as “Neufchatel.” Said product has always been made and packaged by the plaintiff corporation at Concordville, Pennsylvania.

2. Soft or uncured cheese, when made from whole milk, as distinguished from skim milk, contains a relatively larger percentage of butter fat, and is, for that reason, commercially identified and graded in the general trade as “Neufchatel.”

3. The nutritive value and keeping quality of soft, uncured cheese, made from milk, depend upon its greater or less percentage of butter fat content.

4. The plaintiff has established a large business in the product in question, and has acquired a reputation for its good quality, which it maintains at a high standard of butter fat content.

5. The defendants, since 1913, sell at their establishment, No. 115 Pine Street, Philadelphia, a soft or uncured cheese, packaged and labeled as Neuf-chatel style.

6. Both plaintiff and the defendants package their products in small cylindrical rolls, of substantially the same size, enclosed in tin-foil wrapping, on which is printed in blue ink a rectangular-shaped label the length of the roll, the label purporting to indicate the character of the contents. The respective labels of the two parties, as they appear on the cheese packages produced in evidence, are correctly shown (except as to the blue color of the printing) in the photographic Exhibits “A” and “B” annexed to the bill of complaint.

7. Plaintiff’s tin-foil wrapper, including the label printed thereon, has been the same as shown in Exhibit “A” since 1907, except that in March, 1913, it adopted and used thereon and since the word “Pesco” in substitution for a pictorial representation of a cow in the same place on the label. In all other respects the plaintiff’s original and the modified label (Exhibit “A”) were identical. The modified label (Exhibit “A”) is not in substantial variation of the original label used by plaintiff from 1907 until 1918.

8. Plaintiff’s tin-foil wrappers, including the label printed thereon, were made for it by Lehmaier, Schwartz & Co., No. 211 East Twenty-second Street, New York City. Defendants’ tin-foil wrappers, with the label printed thereon, were obtained by them from the same person and place.

9. Plaintiff was the first and continues to be the only user of the descriptive title “Neufchatel Style,” except and until the defendants entered the field, about 1913, and used the same words on their label until the present.

10. The cheese product of the plaintiff, sold under its original label of 1907 and the modified label of March, 1913, averages 20.70 per cent, butter fat content. The cheese product sold by the defendants under their label since 1913 is of approximately 11.16 per cent, butter fat content.

11. Plaintiff’s label on its product, Neufchatel cheese, by the year 1913 had become so associated with it that the public, from its label, whether in the original or modified form, identified it as the product of the plaintiff.

12. The plaintiff sells its said cheese product mainly to jobbers at wholesale, with occasional sales to retailers and consumers, and has a large jobbing trade for it in the southeastern section of the City of Philadelphia.

13. The retail sales to consumers, of the products of both parties litigant, in the southeastern section of Philadelphia are largely to Jewish and Polish consumers, many of whom are incapable of reading.

14. Plaintiff’s sales of its said cheese so wrapped and labeled (Exhibit “A”) has materially decreased since the defendants entered the market with their cheese product wrapped and labeled as shown in Exhibit “B.”

15. Several jobbers or storekeepers who formerly bought and still purchase from the plaintiff its cheese product so wrapped and labeled (Exhibit “A”) now buy from defendants their product so labeled (Exhibit “B”), and at a price much below plaintiff’s price, though retailing it to consumers at the same price in some instances.

16. The sole features of exact non-identity in the respective labels of the parties litigant are: On plaintiff’s labels is printed “P. E. Sharpless Co.” at the extreme top; in the centre appears the capital letters forming the word “Pesco” on the present or modified label (in the original label appeared a picture of a cow occupying the same relative position as the word Pesco), with the words “Trade Mark” in smaller type beneath, and the words “At Coneordville” preceding the abbreviation “Pa.” On the defendants’ label, at the extreme top is printed “Guernsey Brand;” the word “Cremo” in the centre, in capital letters, with a few short printer’s decorative lines beneath the word; a scroll appears in the upper portion of the label to the left of the centre.

17. The words “P. E. Sharpless Co.” and “Guernsey Brand” are in a relatively inconspicuous place on the respective labels. “Guernsey Brand” is suggestive of the picture of the cow, contained in plaintiff’s original label, and at the same time this inscription on the defendants’ label visually fills in the same space occupied by “P. E. Sharpless Co.” in plaintiff’s original and modified labels. Each inscription contains thirteen letters, and the type used in each label is of very nearly the same size, and when observed at a short distance therefrom are of somewhat similar appearance.

18. The words “Cremo” on the defendants’ label and the picture of the cow on the plaintiff’s original label, side by side, are not the same; but at a distance, or when the respective products labeled with the original label of the plaintiff and the word “Cremo” of the defendants, respectively, are interspersed in a box in which the products are packed, the difference can be detected only upon close examination.

The words “Pesco” in the plaintiff’s modified label, and “Cremo” on the defendants’ label, each consists of the same number of letters and the same terminal letter, occupying the same relative position on each label. Examined side by side, the two words are non-identical, but combined with the other features of the label there is, when observed at a distance, a general resemblance. When packed in the boxes used by both parties, the labeled goods of the defendants interspersed with the labeled goods of the plaintiff, the difference between the packages marked “Cremo” and those marked “Pesco” can be detected only by a close examination.

19. The idea or message conveyed by the plaintiff’s labels, to wit, “Cheese”— “Neufchatel Style” — “Made Daily” — “At Concordville, Pa.” — is in effect the same as “Cheese” — -“Neufchatel Style” — “Made Daily” — “In Pennsylvania”— on the defendants’ label. The collocation of the words and phrases is the same; the arrangement of the words and phrases on the labels, and the character of type used, is strikingly similar.

20. The defendants’ name, nor their place of business, does not appear on their label.

21. The sole features of exact identity in the respective labels of the parties litigant are: the words “Cheese” — “Neufchatel Style” — “Made Daily”— “Net weight 2i ounces.” The location of these words and the style of the letters is substantially identical. The words descriptive of where made, to the right of the labels, are also substantially identical in appearance and idea. There is also an exact identity in the shape of the labels, the lines forming the border thereof, and the color of the printing thereon.

22. The features of exact identity in the labels of the respective parties, due to their obvious meaning, are materially characteristic and identifying features, being printed, collocated and arranged in substantially the same way, and are important in determining and establishing substantial identity as a whole.

23. The feature of substantial identity, as a whole, of the respective labels, i. e., plaintiff’s original and modified labels and the defendants’ label, due to the use in each of the apparent features of exact identity, emphasized and made effective by the pronounced similarity in the collocation and arrangement of them on the respective labels, is sufficient to prima, facie establish that they had a common origin, and puts the burden on the defendants to rebut that conclusion.

24. An ultimate conclusion of substantial similarity of the respective labels, sufficient to probably confuse and mislead purchasing consumers, is found as a fact here from the primary fact that both labels contain characteristic features of exact identity, emphasized and made effective by the same substantial collocation and arrangement of them, and by the similarity in the appearance of the labels and of the ideas conveyed, especially in the absence of any proof rebutting the necessary inference and probable result.

25. The defendants were not bona fide appropriates and users of their label prior to either the original or the modified label of the plaintiff.

26. The defendants, coming into the field after the plaintiff, did not sufficiently differentiate their label from either the original or modified label of the plaintiff. The imitation of plaintiff’s labels was not necessary for any useful or proper purpose.

27. It is evident to the court that the label of the defendants is so substantially similar to both the original and the modified labels of the plaintiff that it is calculated to deceive the ordinary purchaser, buying with ordinary caution, and we, therefore, infer and find, in the absence of any explanation or defence on the part of the defendants, or otherwise, that by the use of their label on their inferior product defendants intended to deceive the public and to pass off their goods for and as the superior product of the plaintiff; and, further, that the defendants’ conduct by the use of their label tended to confuse the products of the plaintiff and of the defendants in the market.

28. The plaintiff was tardy in its application for relief.

29. The plaintiff has not proved any specific loss of profits or damage.

Discussion.

The bill was filed to restrain unfair trade and competition. P. E. Sharpless Company, the plaintiff, a corporation, has been engaged since 1907 in the manufacture and sale of dairy products at Coneordville, Pennsylvania. For the past twenty years or more traders in cheese have been manufacturing and selling what has been commonly known as “Neufchatel” cheese. This is not, however, the genuine “Neufchatel” cheese, which is a foreign product manufactured in France, but a domestic preparation of soft or uncured cheese, made from whole milk. There are a number of grades of the domestic “Neuf-chatel” cheese, the grade being determined by the proportion of butter fat content; the greater the percentage of the butter fat content making for a more nutritive and lasting quality and commanding a higher price in the market. In 1907 the plaintiff, recognizing that if it sold the domestic “Neuf-chatel” cheese under the title “Neufchatel,” they probably would come in conflict with the law, adopted as a trade name for its preparation “Neuf-chatel Style,” which it applied to a preparation of soft or uncured cheese from the whole milk, and containing a butter fat content approximating 21 per cent. In preparing this cheese for the market the plaintiff made it into small cylindrical rolls, wrapped interiorly with thin paper, exteriorly with tin-foil, and placed twenty-five of the rolls in a box. Manufacturers and traders in cheese had been and still are wrapping and packing their products for the market in the same manner. It also appears that the traders generally had their labels printed on the tin-foil covering of each roll. In order to identify its particular product in the market, the plaintiff adopted a distinctive label in 1907, which it caused to be printed on the tin-foil wrapper heretofore described. On this label appeared in bold type along the top “P. E. Sharpless Co.;” on the line immediately beneath, in prominent type, the word “Cheese;” in the centre of the label was a pictorial representation of a cow; on the left of the picture of the cow were the words “Made Daily,” each word on a separate line and running diagonally upward and inward; to the right of the picture of the cow were the words “At Coneordville, Pa.;” each of these three words on 'a separate line, the words “At” and “Coneordville” extending diagonally outward and upward from the central picture on the label; the abbreviation “Pa.” was on a horizontal line immediately beneath and to the side of the other two words; in large, bold type, extending horizontally along the base of the label were the words “Neufchatel Style.” Printed on the tin-foil beneath the lower boundary line of the rectangle, in very small letters, were the words “Net weight 2J ounces.” The label was enclosed by a rectangular rule-line border. All the printing was in blue ink.

From 1907 until 1913 the plaintiff manufactured and sold a superior domestic “Neufchatel” cheese, of approximately 21 per cent, butter fat content, packed, wrapped and labeled as above set forth. Its product thus labeled became identified in the market as the product of the plaintiff. In March, 1913, the plaintiff modified its label by the substitution of the word “Pesco” for and in place of the picture of the cow; otherwise the label was identical with the original, and the plaintiff continued to sell its product under the label so modified until the present time.

Sometime in 1913 the defendants engaged in the business of manufacturing and selling a dairy product made of soft or uncured cheese, of approximately 11 per cent, butter fat content. They prepared their product in cylindrical rolls of the same size and shape as that of the plaintiff. Each roll was wrapped interiorly with thin paper, exteriorly with tin-foil, and twenty-five rolls were packed in a box of the same shape and size as that used by the plaintiff. When about to place their product on the market, they had a label designed and printed by a firm of printers in New York City, for the purpose of affixing to their goods, which they have manufactured and sold with labels of that design printed on the tin-foil wrappers since 1913 to the present time. It may he a coincidence that the printers who furnished the labels to the defendants were the same concern which supplied the plaintiff with its label. Along the top of defendants’ label appears “Guernsey Brand” in bold type, differing in the words from “P. E. Sharpless Co.” appearing on plaintiff’s label, but containing the same number of letters and similarly situated; the word “Cremo” was printed in the centre of defendants’ label in large type; the words “Made Daily" appear on the defendants’ label in the same location that the' same words occupy on the plaintiff’s label; the type bears a marked resemblance to that used by the plaintiff, and the direction of the words is substantially the same as those on the plaintiff’s label; to the right of the word “Cremo” appear the words “In Pennsylvania,” each word occupying a line, with a scroll beneath the last word; these three inscriptions appear in the same space on the label as the words “At” — “Concordville”—“Pa."— occupy on the plaintiff’s label, producing, when not critically examined, a marked similarity. Extending horizontally along the lower part of the defendants’ label is printed “Neufchatel Style” in prominent type, containing the very same letters, the character and style of the type being but slightly different from the like inscription on the plaintiff’s label. The defendants’ label is also bounded by a rectangular border of ruled lines, and immediately beneath the lower line of the rectangle are printed the words, in very small type, “Net weight 2! ounces.” The entire label of the defendants is printed in blue ink on the tin-foil wrapper of each roll of cheese.

That the defendants knew of the plaintiff’s original label at the time they caused theirs to be designed, adopted and used in the sale of their inferior product is clear, for the defendant, Jacob Levin, testified that the plaintiff was using the picture of the cow on its label when the defendants commenced using theirs. The defendants also knew, or should have known, that plaintiff’s goods at this time were identified in the market by reason of the use of its label thereon.

If the defendants’ label is so similar to the plaintiff’s labels that it is probable it would result in deception or in the passing off of the goods of the defendants’ for the plaintiff’s, or result in confusion of the product on the market, the defendants have brought about a condition of unfair .competition which it is the duty of the court to restrain. In deciding as to what is, or is not, a similar label, the court need not depend upon elaborate description of the points of resemblance or those of difference, but should decide by the impressions created by the label, on the ear or eye, or both, thus deciding the question on the same basis as the purchaser who, in ordinary course of trading, is called upon to judge as to the identity of the defendants’ label. It should be said here, also, that the buyer usually has not a chance of trial by side-by-side comparison. The test of identity is not whether a difference is recognized when the two competing articles are placed side by side, but whether it will be recognized by a purchaser when not having opportunity to compare. Such similarity as will deceive is that likeness which renders the average buyer unable to distinguish the defendants’ label from the memory of the plaintiff’s label which he carries in his mind, not such as will enable him to know them apart when the two are put side by side before him: See Liggett & Myers Tobacco Co. v. Finzer, 128 U. S. 182; McDonald Manuf. Co. v. Mueller Manuf. Co., 183 Fed. Repr. 972; Nims on Unfair Competition, § 322.

A comparison of the labels of the plaintiff with that of the defendants shows an almost exact identity in the size and shape of the label, a marked resemblance in the size and shape of the type occupying relative positions on the label, in the collocation of the general features, in the color of the ink, and in the exact repetition of the words “Cheese” —“Made Daily”- — “Neuf-chatel Style” and “Net weight 21 ounces.”

On the other hand, there are two features on the defendants’ label which appear at first to be precisely non-identical with any inscription on the plaintiff’s labels, to wit, “Guernsey Brand” and “Cremo.” The words “Guernsey Brand,” however, give rise to an impression similar to that emanating from the picture of the cow on the plaintiff’s original label. It must be borne in mind that the ordinary purchaser, by mail or in a shop, has little opportunity to compare the plaintiff’s goods with those of the defendants’. He has one article before him, and, usually, the best he can do is to compare it with his memory of the other.

“It is not necessary that the resemblance produced should be such as would mislead an expert, nor such as would not be easily detected if the original and the spurious were seen together:” Shaw Stocking Co. v. Mack, 12 Fed. Repr. 707.

“The test of similarity is not visual comparison, but memory comparison:” Nims on Unfair Competition, § 326.

Therefore, in considering whether the defendants’ label is so similar to the plaintiff’s as to lead the ultimate consumer, notwithstanding the exercise of ordinary care, to mistake the product sold under the one label for the product sold under the other label, we must bear in mind not only those visual characteristics which remain in the memory as a direct appeal to the eye, but also such impressions or suggestions directly arising out of the characteristics, which would probably remain in the memory as an appeal to the ear. The memory of a picture on a label may remain in the purchaser’s mind, not as a concrete picture, but as an impression or suggestion in the nature of some catchy, descriptive, spoken word, appealing to the ear rather than to the eye, and ordinarily directly suggested by such picture. So, too, letters, words or inscriptions on a label may dwell in the purchaser’s memory, not merely as they are printed, but as an impression of a concrete picture suggested by the words. A person desiring to imitate a label, on which is imprinted a picture, could succeed in confusing the memory of the ordinary ultimate customer by inserting in the imitating label an inscription usually suggested by the picture or suggestive of the picture. The picture of a cow on a label would directly suggest the words “cow” or “cow brand” to a purchaser. After a lapse of time, the party who has purchased the original product with the label containing the picture probably has forgotten the picture, and retained in his memory the impression by way of the words suggested; and the appearance of “Guernsey Brand” on the label of the product he is about to buy would probably satisfy his mind that the product is the “cow” brand which he had formerly purchased. Though “Guernsey Brand” and the picture of a cow are visually non-identical, the suggestion arising from their use is markedly similar.

It is only on a separate examination of the word “Cremo,” printed on the centre of the defendants’ label, that it maintains the distinction of exact non-identity with anything on the plaintiff’s original or modified label. We must, however, consider that the ultimate purchaser of the small package, such as the parties litigant vend, would probably not notice at a short distance from the packages the difference between the picture of the cow or the word “Pesco” and this word “Cremo,” the identity of each being merged in the general similarity of the labels, the general collocation of the features thereon, and the almost exact indentity in make-up and in the repetition of a number of the inscriptions. Further, upon an ordinary examination of a box containing twenty-five packages of cheese, packed, wrapped and labeled as the parties in this case sold their products, with the labeled goods of the plaintiff and of the defendants interspersed in the box, it is difficult to distinguish the product of the defendants from that of the plaintiff. The distinction can be made with surety only upon close examination. If the box containing the plaintiff’s product were at some considerable distance from the customer, as, for instance, where the box is on the shelf and the customer in front of the counter, it would probably be hard to determine whether the central figure of the defendants’ label was a picture or a word. The use of the word “Cremo,” therefore, on the defendants’ label, considering the method of sale of the small articles vended by the parties, would not tend to differentiate defendants’ product from that of the plaintiff, but rather tend to confusion and deception.

The message of the plaintiff’s labels to the public is “P. E. Sharpless Co.”— “Cheese” — “Neufchatel Style” — “Made Daily” — “At Coneordville, Pa.” — “Net weight 2| ounces.” The message conveyed by the defendants’ label is “Guernsey Brand” — “Cheese”—“Neufchatel Style” — “Made Daily” — “In Pennsylvania”- — -“Net weight 21 ounces.”

“Guernsey Brand,” upon one phase of the significance of which we have already commented, is in the same place on the defendants’ label as is occupied by the name “P. E. Sharpless Co.” on the plaintiff’s label; the defendants nowhere on their label show the name of the owner or the origin of their product. The absence of the latter on the defendants’ label does not serve to differentiate from that of the plaintiff, but rather to confuse, since it is common knowledge that persons who buy goods frequently never know the names of the makers, or, if they ever did, have forgotten them. “Guernsey Brand,” consisting of the same number of letters as contained in the plaintiff’s name, serves to cover the like space and gives the general appearance of an inscription of the plaintiff’s name, with which many purchasers, relying upon the general likeness of the label, have never concerned themselves, or may have forgotten. The use of the words “Guernsey Brand” serves to confuse rather than to differentiate the labels in the minds of ultimate consumers.

The remainder of the message to which we have referred, “Cheese” — “Neuf-chatel Style” — “Made Daily” — “In Pennsylvania,” on defendants’ label, conveys the same idea in almost exact words and in almost exactly identical type, in the precise location of the same words on the plaintiff’s labels. The use of these words by the defendants in almost exact similitude, make-up and idea conveyed to those on the plaintiff’s labels discloses the evident purpose of the defendants.

Plaintiff, since 1907, has used the particular words “Neufchatel Style” to denote the superior quality of Neufchatel cheese manufactured and marketed by it. While the words may have been descriptive originally and could have been used by the trade generally, it was testified they were not so used by the trade, and that evidence has not been contradicted. Other traders used other words in desccribing cheese of this grade. In 1913 the labels of the plaintiff, containing the dominant inscription “Neufchatel Style,” had been' identified as the plaintiff’s product on the market. The defendants knew, or should have known, when they engaged in the manufacture and sale of their cheese in 1913, that their product was 50 per cent, the inferior of the plaintiff’s goods — certainly in quality, and probably in price. When the defendants used their label, similar in many distinctive features to that of the plaintiff, and containing thereon the same words, “Neufchatel Style,” in imitative type, without anything upon the label to differentiate it materially from the label of the plaintiff, their purpose in so doing could not be honest. Their representation in this regard was not only deceptive, but it was false, in that they were knowingly informing the public that the inferior product was the “Neufchatel Style,” theretofore identified in the market as the plaintiff’s product.

It was said in The American Waltham Co. v. United States Watch Co., 173 Mass. 85: “. . . It is pretty well settled that the plaintiff, merely on the strength of having been first in the field, may put later comers to the trouble of taking such reasonable precautions as are commercially practicable to prevent their lawful names and advertisements from deceitfully diverting the plaintiff’s custom.” And in Pennsylvania Central Brewing Co. v. Anthracite Beer Co., 258 Pa. 45, the court held that “A dealer coming into a field already occupied by a rival of established reputation must do nothing which will unnecessarily create or increase confusion between his goods or business and the goods or business of his rival.”

Any artifice, device or peculiarity of arrangement adopted by the defendant which tends to increase the probability of deception, and which is not necessary for any useful or proper purpose, will be enjoined. An absolutely false use of words or names cannot be necessary for any honest purpose. Such false use is a deceptive artifice. Accordingly, where the similarity and resulting confusion are caused by any false statement or suggestion made by the defendant in connection with his goods or business, a clear case for injunction is presented. No falsity will be permitted: 38 Cyc., 795.

That there is a striking resemblance between the labels of the plaintiff, not only in printed features, but also in the similar impressions and suggestions and ideas arising therefrom and the label adopted by the defendants in 1913 is clear. The imitation by the defendants of the words “Cheese” — “Neuf-chatel Style” — “Made Daily” — “At Concordville, Pa.”- — is palpable. The defendants’ purpose in adopting and using on their inferior product, without sufficient differentiation, such a strikingly similar label, with the false representation “Neufchatel Style” thereon, was obviously to place it within the power of the retailers to palm off on the ultimate consumer their cheaper and inferior goods as and for the superior goods of the plaintiff.

It may be contended by the defendants that a number of the elements of the plaintiff’s methods of preparing and packing cheese were, and are now, in use by traders generally for a similar purpose. For instance, the size and shape of the box, the size and shape of the roll, the manner of wrapping interiorly with thin paper and exteriorly with tin-foil, and perhaps the printing with blue ink of the label on the tin-foil. This may be so, but it is not required that the separate details must have been original or exclusive with the complainant seeking relief. The question is, whether the adoption of the collocated features of the plaintiff’s labels, style of dress and package disclosed a differentiation from that previously adopted and by which the public has come to recognize the product of the plaintiff. If the plaintiff had assembled known features without creating dissimilarity, then, perhaps, no unfairness would be apparent in the defendants’ adoption of a like dress for their product. But the evidence in this case shows that the complainant has distinguished its merchandise from that of others engaged in a similar business by the use of its distinctive label; and while the evidence on this point may not be as full to a nicety as might be expected, it is sufficient, and the defendants have not seen fit to deny it. That the defendants simulated the distinctive features of the complainant’s adaptation is undeniable.

It may also be contended by the defendants that there is no proof of fraud or intentional wrongdoing. While it is necessary to prove intent to deceive, i. e., fraud, to establish a case of unfair competition, it is not necessary to prove actual deception, where there is a degree of similarity calculated to deceive the ordinary purchaser buying under ordinary conditions, because the intent to deceive may be inferred from the nature of the act. The plaintiff in this ease was first in the field, and the subsequent adoption and use by the defendants of their label, substantially identical with that of the plaintiff, was unfair to the plaintiff, and we will presume, as a matter of law, that the defendants’ acts were done with fraudulent intent; not because we know the actual state of the defendants’ minds, but because every person is presumed to intend the natural consequences of all his acts knowingly committed. The question, therefore, is not the mental state of the defendants, but the effect of the defendants’ acts on the plaintiff’s business.

“It is always a question of fraud, but not necessarily of actual fraud. The act, however innocent, is considered constructively fraudulent, if the result would tend to unfair trade, to confusion of goods and to interference with the rights of another:” Manitowoc Pea Packing Co. v. Numsen & Sons, 93 Fed. Repr. 196; Nims on Unfair Competition, § 318.

It appears from the evidence that the jobbers or retailers purchasing the goods of the plaintiff were not deceived, either in the quality or the price of the goods. Therefore, it may be urged that the plaintiff is not injured. Courts of equity, looking beyond the original acts, and finding that their ultimate objects are to enable and induce the retail seller of a fraudulent imitation to palm it off on an unsuspecting public — the spurious for the genuine article — and thus contribute to the infringement upon the rights of the original owner, have not hesitated to apply the remedy: Nims on Unfair Competition, § 331. It was long ago settled, both in England and in this country, that the manufacturer is liable for unfair competition if, by the Closeness of his label adopted, he puts it in the power of his retailers to mislead the purchasing consumer.

“Although all the jobbers and retailers know whose make of goods they are, yet if the retailer is able, by reason of the get-up, to use them fraudulently, the maker may be held liable to one who suffers from the retailers’ unfair trading:” New England Awl and Needle Co. v. Marlborough Awl and Needle Co., 168 Mass. 154.

While we have thus far discussed, mainly, the resultant effect of the defendants’ label on the plaintiff’s original label of 1907, we do not lose sight of the fact that in 1913 the plaintiff modified its label by the substitution of the word “Pesco” for the picture of the cow. This substitution we do not regard as a substantial variation from the original label; all the distinctive characteristics of the original remain; the use of the word “Pesco” no more created any differentiation from the original label, to the ordinary consumer, than did the insertion by the defendants of the word “Cremo” in their label create a differentiation from the plaintiff’s original label. While we cannot state with absolute certainty the precise time when the defendants first adopted and used their label, it is probable, and.we believe, that it was at a time after the adoption and use of the “Pesco” label, and while the plaintiff’s product was still in the market under the original label. In that aspect of the case, the defendants’ label is probably copied from both and would explain the use of the words “Guernsey Brand,” suggestive of the cow on the original label, and the word “Cremo,” in imitation of the word “Pesco” on the later one. If such be the case, the defendants’ label is in similitude, not only of the original label of 1907 of the plaintiff, but also of its label of 1918, whether it be called a new label or a modified label.

The defendants have not in any material way differentiated their label from either the original or the modified label of the plaintiff, and the effect of their failure to do so puts it within the power of the retailers to deceive the public, and tends to injury to the plaintiff, confusion of the products in the market, and enables the defendants to pass off their goods as and for the goods of the plaintiff.

But the defendants urge that their label was adopted and used by them prior to the time when the plaintiff ceased using the picture of the cow and substituted the word “Pesco” therefor; hence, the defendants contend, their label could not be an imitation of the modified label of the plaintiff; and, since they were prior in adoption and use of their label, the plaintiff is not entitled to relief with respect to the modified or “Pesco” label. This suit, it must be remembered, is not for the violation of a technical trade-mark; not for an infringement of the word “Pesco” by “Cremo,” but the bill is for the restraint of unfair competition, of which, it is charged, the defendants have been guilty since 1913 until the present time, by reason of the use by the defendants of a deceptive label. The label of the defendants, when adopted and used by them, was, in our opinion, intended to bring about the passing off of their inferior goods as and for the superior goods of the plaintiff. Having been so used by the defendants, its falsity will probably continue to deceive and confuse those ultimate customers, whose memory is of the original and not of the modified label. In this aspect of the case, the continued use of the spurious label will probably tend to confuse and deceive the public, irrespective of the question whether the defendants adopted their label before or after the use of the modified label of the plaintiff. Furthermore, for the reasons heretofore set forth, we do not regard the substitution of the word “Pesco” as a substantial variation of the plaintiff’s original label.

On broader grounds, the question of priority urged by the plaintiff is without merit. It is true that a prior appropriation and use of a trade name, symbol, design, dress of goods, label, or other indicia, so associated with a trader’s goods or business as to cause them to be known to the public as designating his goods or business, operates to protect him against the invasion of his good-will acquired by the celebrity of his marks. This prior appropriation and use, however, must be bona fide; it must be such a use as to eventuate in the association of the goods in the public mind as the goods of the trader affixing the distinctive indicia to them. The defendants’ label was not appropriated by them in good faith, and was affixed to their product, when they adopted it, for the fraudulent purpose of palming off their inferior product on the ultimate consumer- as and for the superior goods of the plaintiff. It was a spurious label, intended as a cheat and a fraud on the plaintiff, as well as on the public. It is certainly not the duty of the court to protect the interests of a person who has been detected in an attempt at fraud. “It would not become a court of equity to take a single step to save a party harmless, detected in a combination to cheat. No right can be deduced from an act founded in actual fraud:” Gilbert v. Hoffman, 2 Watts, 66.

If the defendants came before us with their bill in equity asserting prior appropriation of their label, and asking that we restrain the plaintiff from using its modified label — the facts developing as they have in this case — it would be our duty to deny them relief and to dismiss their bill, because their label is a fraud on the public and their hands are unclean. The fact that they used their false and deceptive label, under the circumstances, prior to the time of the use of the truthful, modified label of their rival trader would not avail them.

It is stated in Paul on Trade-Marks, § 87: “The test in all cases of conflict as to priority of adoption is, which claimant was first to so use the mark as to fix in the market a conviction that goods so marked had their origin with him?” The defendants in this ease had, at the time of the adoption and use by the plaintiff of its modified label, been using their deceptive label, not to produce a conviction in the market that the goods to which their label was affixed had origin with them; on the contrary, their purpose was to convince the market that their labeled inferior products were the goods of the plaintiff. The defendants’ use of their label, therefore, does not stand the test; they cannot, under the circumstances, avail themselves of the principles under which prior appropriations and use are protected.

Of course, if the defendants’ label was adopted and used by them after the adoption and use by the plaintiff of its modified label, they are in no better position, since their label is so similar to the modified label as to render it probable that the public would be confused in the purchase of the products.

The plaintiff, it appears from the evidence, was tardy in the assertion of its rights. They knew of the defendants’ use of the label in the winter of 1914, investigated and found in 1915 that the defendants’ label was producing confusion or deception in the sale of the products. It is true that for a short time the defendants did not appear to be selling their goods; nevertheless, the plaintiff did not, for a considerable time after the defendants had resumed the sale of their goods, do anything to prevent the unfair competition, and did not file its bill in this case for relief until June 24, 1919. While the delay would not bar the plaintiff from injunctive relief, it is not, in our opinion, entitled to an account, and the prayer in that regard must be denied.

Conclusions of law.

1. In trade-mark and unfair competition cases alike we have to do with the evidence of ownership or origin, and the fundamental principle underlying both is that no person may simulate the mark or label constituting such indicia of his rival in trade, whereby he or his vendee is enabled to practice deception by passing off his goods, directly or indirectly, as and for those of his rival in trade, and so work a fraud upon him and upon the public.

2. The resultant effect of the respective labels to confuse and mislead is to be measured and ascertained by the probable effect on purchasing consumers of the product, and not whether jobbers or retailers familiar with both products are readily able to distinguish them. It is settled law that the manufacturer is liable for unfair competition if, by the closeness of his label adopted, he put it in the power of his retailers to mislead the purchasing consumer.

• 3. Although intent to deceive, i. e., fraud, is necessary to be established in cases of unfair competition, it is not necessary to prove actual deception, where there is a degree of similarity calculated to deceive the ordinary purchaser buying with ordinary caution, because the intent to deceive may be inferred from the nature of the act.

4. The defendants, in the adoption and use of their label (Exhibit “B”) in simulation of the plaintiff’s label, were guilty of intent to deceive the ordinary purchaser buying with ordinary care.

5. The defendants were guilty of unfair competition.

6. The defendants, their servants, agents and employees, should be perpetually enjoined from using the label (Exhibit “B”) in its present form, or in any form or manner in simulation of the plaintiff’s label (Exhibit “A”).

7. The plaintiff was tardy in its application for relief and is not entitled to an account from the defendants.

8. The defendants should' pay the costs.

9. Counsel to prepare and present a form of decree.

Jan. 23, 1922, the court in bane, by Maetin, P. J., dismissed exceptions and entered the following

Decree.

This cause having heretofore come on for trial on the pleadings, and proofs adduced in open court, and thereafter upon defendant’s exceptions to findings of fact and conclusions of law contained in the opinion of the court heretofore filed, granting the prayers of the bill of complaint in the respects hereinafter stated, it is now, this 23rd day of January, 1922, after due consideration thereof, ordered, adjudged and decreed as follows:

1. That said exceptions be and are hereby dismissed, and the aforesaid findings of fact and conclusions of law confirmed.

2. That the use by the defendants of their label (Exhibit “B”) as charged in the bill of complaint was and is in unfair competition with plaintiff’s label (Exhibit “A”) as charged in the bill, and to the injury of the plaintiff in its good-will and established trade created thereby.

3. That a perpetual injunction issue, enjoining and restraining the defendants, Morris Levin, Jacob Levin, Oscar Levin and Joseph Levin, all or some of whom trading as Levin Brothers, and each and every of them, their servants, agents and employees, from any further use by them, or any of them, on packages of so-called Neufchatel cheeese, of their trade label (Exhibit “B'”), annexed to the bill of complaint, or any other substantially similar thereto, and from any further use on such goods of any label substantially similar to the plaintiff’s label (Exhibit “A”) as a whole, and particularly as respects the simulation thereof in the use by defendants on their said label (Exhibit “B”) of the words “Cremo,” “Neufchatel Style,” “Made Daily in Pennsylvania,” and the collocation and arrangement thereof as shown in said Exhibit “B.”

4. That an accounting for past profits and damages, by said defendants, for the tort herein adjudged, and the recovery thereof by plaintiff, is denied for the reasons set forth in said findings.

5. That plaintiff recover its costs of suit, usual and proper to be taxed in the cause, and have judgment therefor.


source: Caselaw Access Project

author: Gest, J.,

license: Public Domain

text:
    Tull’s Estate.

      Practice, O. C. — Accotmts of proceeds of sale of real estate — Approved form of statement.

    1. Fiduciaries in accounting for the proceeds of a sale of real estate should charge themselves with the actual purchase price and take credit for all deductions therefrom, so that the account will show on its face just what they did without supplementary or explanatory statements. A mere statement of the net amount received in the general account, after deducting expenses of the sale, is improper, and justifies an order by the auditing judge requiring a restatement of the account at the expense of the accountant.

      Trustees and executors — Commissions on proceeds of real estate when broker was employed to effect a sale.

    2. When the accountant employs a real estate broker to effect a sale of testator’s real estate and pays him a commission, he may not, in addition thereto, charge the usual commission upon the net proceeds stated in the account; he will, however, be allowed a reasonable compensation for his own time and labor expended in the matter, either in the form of a lump sum or on a percentage basis.

      Practice, O. C. — Commissions—Agreements to account by beneficiaries.

    3. Written agreements by beneficiaries to an account do not estop them from objecting thereto at the audit, at least if the account is so stated as not to show on its face that double commissions are charged.

      Practice, O. C. — Commissions — Surcharge — Rights of objecting and non-objecting beneficiaries.

    4. Where one of several beneficiaries objects to excessive commissions, and the objection is sustained, the account will, neverthelss, stand so far as the others are concerned who made no objection.
    Adjudication. Account of Charles J. Schaefer, surviving trustee, and Chelten Trust Company, substituted trustee. O. C. Phila. Co., Oct. T., 1909, No. 415.

      M. J. MeEnery, for accountants, and for Ernest B. Tull, residuary legatee.

      E. S. Ward, for Maurice L. Tull, one of the residuary legatees.

      Robert W. Finletter, for Commonwealth.
    June 28, 1921.
   Gest, J.,

Levi S. Tull died on Oct. 10, 1908, leaving a will, the typewritten copy whereof is not certified by counsel, as required by the rule of court, by which, after a bequest to his wife of household furniture and the occupation of No. 112 Price Street for her life, and an annuity of $600 per year, he devised and bequeathed his residuary estate, real and personal, to his executors in trust to divide the remainder into four equal parts and pay the same to his four children, Ida V. Beale, Francis D. Tull, Maurice L. Tull and Ernest B. Tull, in equal shares; and the testator further directed his executors or their successors, immediately after the death of his wife, or as soon as possible for the benefit of the estate, to sell all his real estate and personal property at public or private sale, and to divide the proceeds into four equal parts, which he devised to his four children. He further provided that if any of his children should be dead at the decease of his wife, leaving legal issue him or her surviving, that said issue should take the same share that his, her or their father or mother would have taken if then living; but if he or she should leave no legal issue surviving, then the share should be divided in the same manner between his surviving children and the legal issue of those who were dead.

Francis D. Tull, Ida V. Beale and Charles J. Schaefer were appointed executors, and the will provided there should be always two executors or trustees. Ida V. Beale died in Juñe, 1917, unmarried and without issue, and on June 17, 1919, the Chelten Trust Company was appointed co-trustee, Francis D. Tull having been previously discharged. Sarah Tull, the widow of the testator, died June 8, 1919, so that the estate is distributable in equal parts or shares among Francis D. Tull, Maurice L. Tull and Ernest B. Tull.

The accountants charge themselves with the balance of the residuary estate appearing by the executors’ account, $19,249.60, and also with the proceeds of real estate sold, the debits aggregating $45,038.50, and credit is taken for commissions to the two trustees, Charles J. Schaefer and Chelten Trust Company, at the rate of 3 per cent., or $1351.16. It appears, however, that the real estate sold for an aggregate of $46,500, the amounts debited in the account being the net amounts after deducting certain costs attending the conveyances, and also the sum of $1395, being 3 per cent, on $46,500, as having been paid to and received by Winfield S. N. Knopf. Of course, this method of stating the account is irregular. It was said that the account was drafted by a stenographer or book-keeper employed in Mr. Schaefer’s office, but that does not relieve the accountants of their responsibility. The accountants should have charged themselves with the actual purchase prices of the several pieces of real estate and taken credit for all deductions therefrom, so that the account would show on its face just what the trustees did, without supplementary or explanatory statements. In fact, the auditing judge would have been justified in requiring the account to be restated at the expense of the accountants, but refrained from doing so, as the question raised at the audit can be accurately stated in a few words. The facts are that commissions have been deducted at the rate of 3 per cent, on $46,500, or $1395, and that the trustees have charged additional commissions of 3 per cent, on the net amount, thus making a further charge of $1351.16. Practically, nearly 6 per cent, commissions are charged on the proceeds, and this was objected to by Maurice L. Tull, entitled to one-third of the balance. The other distribu-tees acquiesce, as of course they have a right to do.

The accountants relied, first, upon the agreement annexed to the account, and signed before the filing thereof by the three parties in interest, including Maurice L. Tull, who now objects, but the auditing judge attaches little importance to this. The account, as presented to the parties for their signatures, does not show the payment of double commissions, but merely 3 per cent, on the debits claimed by the trustees. It may be true that the memo-randa or copies of the statements of the settlements for the various properties were on the table, together with the account, before the parties, when they added their signatures, which statements contained the payment of 3 per cent, to Mr. Knopf, but there is nothing to show that Maurice L. Tull, when he agreed to the account, knew that these commissions had been charged, and Maurice L. Tull testified that he did not remember looking over any other papers or even seeing them. In the opinion of the auditing judge, Maurice L. Tull had a right at the audit to object to the charge of double commissions. If the account had been fully and properly stated, as it should have been, and had shown on its face that Knopf was getting full 3 per cent, commissions in addition to the trustees’ charges, the case might have been different, though, even then, it would seem the agreement to the account might have been withdrawn at the audit: Fisher’s Estate, 65 Pa. Superior Ct. 297. This would have been an appropriate time for Mr. Schaefer to have explained to the legatees that the amounts with which the accountants debited themselves as the proceeds of sales were only the net amounts after deductions of Mr. Knopf’s commissions, but, unfortunately, the trustee did not avail himself of this opportunity.

The accountants further relied upon two agreements signed by the parties Aug. 26, 1919, and Nov. 9, 1920, and the settlement of Dec. 10, 1920, as found on pages 58 and 59 of the testimony, which authorized Winfield S. H. Knopf to sell the real estate for certain prices mentioned in each case. This agreement did not include premises Nos. 5821 and 28 Germantown Avenue, sold for $20,200, which property was agreed to he sold during the lifetime of the widow, though the settlement was not made until the following August. The agreement of sale, it appears, was signed by the three parties in interest. Charles J. Schaefer is a well known real estate agent and broker in German-town, having his place of business at No. 5702 Germantown Avenue, in the general location of the properties in question. He was appointed by the will one of the executors and trustees, and has since the death of the testator been in active management of the estate. Winfield S. H. Knopf is also a real estate broker, and has been in the employ of Mr. Schaefer for nearly twenty-seven years on weekly salary and given commissions in addition. Mr. Schaefer’s name appears on the front of the office building, Mr. Knopf’s name being there as notary public. Mr. Schaefer’s for sale signs were placed on the properties of the Tull estate, and Mr. Schaefer’s printed letter-heads were used by Mr. Knopf, who had none of his own, and he testified also that he wrote a great many letters for Mr. Schaefer and signed the latter’s name. One letter, however, dated March 27, 1920 (page 61 of the testimony), was signed by Mr. Knopf with his own name. Mr. Schaefer testified that he did not engage the services of Mr. Knopf to effect the sale of the real estate, and, further, that he paid him on account of the commissions, some money still being due, and that he had no arrangement or agreement with Mr. Knopf by which he was to receive any of the moneys so paid.

The testimony is not altogether clear as to the circumstances under which the parties in interest authorized Mr. Knopf to sell the properties and fix the prices. It appears, however, that Mr. Schaefer told them or sent them word, after the widow’s death, that it was time to sell the properties, and- to come to his office. When they came, they took the matter up with Mr. Knopf, who prepared the agreement and authorizations which they signed. According to Maurice L. Tull’s testimony, he understood that the object was to fix the prices at which the properties were to be sold, and that Mr. Knopf was acting as clerk for Mr. Schaefer, and that nothing was said about his making a charge for commissions. In fact, Mr. Knopf did not testify that there was, and the agreement is silent on the subject, although Mr. Knopf said that when the Germantown Avenue property was sold, he told Maurice L. Tull “the amount of commissions we would charge at the time of the sale of the property” (at page 19). Mr. Maurice L. Tull, however, denied (page 51) that Mr. Knopf ever told him that he (Knopf) was going to charge commissions on the sale.

It may be well here to advert to the provisions of the will which in positive terms directs the trustees, immediately after the death of the testator’s wife, to sell all the real estate at public or private sale and to divide the proceeds. The trustees are the Chelten Trust Company, which may be said to be a professional trustee, and Mr. Schaefer, who is in the business- of managing and buying and selling real estate as a broker. They were, therefore, well equipped to perform the duties imposed on them, but apparently did nothing in the matter except to allow Mr. Knopf to negotiate the sales. As the three sons of the testator were entitled to the proceeds, they might have elected to take the land as land, though, even if they did not, it was certainly proper that they should be consulted as to the price: Barndt’s Estate, 23 Dist. R. 226. Mr. Knopf testified (pages 23 and 25) that before closing the deals he conferred with Mr. Schaefer and the Chelten Trust Company and obtained their approval or at least their acquiescence; but it was not claimed by any one that they, or certainly the Chelten Trust Company, performed any labor, nor did they incur the slightest responsibility, for the prices were agreed to by the persons entitled to the money, and the question naturally arises, what have they done to earn the commissions which they claim? Commissions are allowed as compensation for services and responsibility; they are not a mere perquisite of a fiduciary. If the trustees, instead of carrying out the directions of the will, chose to depute or allow some one else to perform their duties and then to pay him the full commission allowed by law, it is difficult to see why they should be paid in addition.

Of course, it was argued that Mr. Knopf was not employed by the trustees, but by the parties in interest. There is very grave doubt whether this is so, at least so far as Maurice L. Tull, the objecting party, is concerned, and the auditing judge is strongly inclined to believe that Mr. Knopf was regarded by him as simply Mr. Schaefer’s representative or employee in this business, as he was in general, and naturally would be in this matter. But it is very clear from the account itself that the trustees did not regard Mr. Knopf as having been the mere agent of the parties, for the accountants allowed his commissions at the settlement and had deducted them in the account; whereas, if Mr. Knopf had been solely employed by the parties, he should have looked to them for his commissions, and on this theory the accountants have no right to pay the broker of the parties without their knowledge or consent. Indeed, as a matter of fact, only a part of the commissions have actually been paid to Mr. Knopf, the rest being in Mr. Schaefer’s own bank account, who is one of the trustees.” We must therefore, regard Mr. Knopf, for the purposes of this case, as having been employed by the accountants to effect these sales. In this aspect the case is similar to Adare’s Estate (Jan. T., 1921, No. 649), where the present auditing judge said: “In this case the executor simply employed another real estate broker to sell the property, and as he obtained the consent of the parties in interest to the sale, he was relieved of both labor and responsibility. He cannot, therefore, pay the broker his regular commission and then duplicate the charge. If such a practice were authorized by this court, the effect would be disastrous to estates, for the easy course would be generally followed, and would, moreover, offer a tempting inducement to fiduciaries to divide commissions with the broker so employed and thus to obtain a further illegal commission.” The present case is even stronger than Adare’s Estate, for in that case the broker so employed was a stranger, having no connection with the fiduciary; but in this case Mr. Knopf was employed in Mr. Schaefer’s office and attended to his business in general. The auditing judge is, therefore, of opinion that the charge of commissions, $1351.16, must be stricken out.

There was some testimony, however, that some other services were rendered with respect to the real estate, which, perhaps, might justly form the basis for additional compensation. Some of the properties were used for storage purposes, there being some ninety individual storage accounts, and these accounts had to be closed out before the properties could be sold. The testimony did not show exactly how much time or labor was required to effect this, but the auditing judge, in his endeavor to arrive as nearly as possible at exact justice, will allow for these services, as against the objecting party, the sum of $100. Of course, as Francis D. Tull and Ernest B. Tull made no objection to the charge of commissions, the account will stand so far as they are concerned. Francis D. Tull, it may be noted, was not present at the audit in person or by attorney. The recapitulation on the next to the last page of the account contains what Is only a suggestion of distribution, and is not strictly a distribution account. The auditing judge notes that credit is taken on the first page of the account for the value of the newspaper route distributed among the parties in interest, which is improper: Thompson’s Estate, 229 Pa. 543.

NOTE. — In Adare’s Estate (Jan. T., 1921, No. 649), cited above, Schaeffler, the executor, employed O’Neill, a real estate agent, to procure a sale of decedent’s real estate, which was subsequently effected, the sale being made by O’Neill representing the executor, who was himself a real estate broker and agent. Schaeffer paid O’Neill a commission of 3 per cent, on the purchase price of 58000, amounting to ?240. He also charged a commission of 5 per cent, as accountant upon the entire debits, $8073.25. Objection to the credit was taken by one of the residuary legatees. Gest, J., said: “Upon what theory the executor could not only take credit for the 3 per cent, paid O’Neill, but also expect to charge for himself 5 per cent, as commission, making a total of 8 per cent, on the proceeds of the real estate, the auditing judge fails to understand, nor has he been referred by counsel to any decisions that justify such a charge. It is true that sometimes an executor is permitted to employ an agent for the collection of rents when the properties are very numerous, and small rentals are collected weekly or monthly, and where these collections are unusually troublesome, but this is a very different case. So, also, where a public sale is directed, which must necessarily be made by an auctioneer, the executor is entitled to pay the auctioneer his regular commission, but that, again, is not such a case as the present. In this case the executor simply employed another real estate broker to sell the property, and as he obtained the consent of the parties in interest to the sale, he was relieved of both labor and responsibility. He cannot, therefore, pay the broker his regular commission and then duplicate the charge. If such a practice was authorized by this court the effect would be disastrous to estates, for the easy course would be generally followed, and would, moreover, offer a tempting inducement for fiduciaries to divide their commissions with the broker so employed and thus to obtain a further illegal commission. In this case the auditing judge does not believe that such an arrangement was made. Mr. Schaeffer is a well known and reputable real estate broker, and the auditing judge is certain that he would not, and did not, make such an agreement, but it is a very dangerous precedent to allow this double commission. The auditing judge, however, observes that in this case the personal property is only $73.25, specifically bequeathed, and apparently this real estate comprised the entire estate, and the auditing judge is of the opinion that the accountant is entitled to a reasonable compensation for his services. He had, as above stated, no real responsibility in the sale, as the parties in interest agreed to the price, but he performed some services as executor and made some ineffectual efforts to effect a sale. The auditing judge fixes his compensation at $125, which, being approximately 1% per cent., he considers liberal.”

The balance of principal of personal estate is.$14,454.60

Add credit taken in administration account for proceeds of newspaper route. 4,000.00

The balance of real estate account is. 43,687.34

$62,141.94

Add balance of income. 1,057.70

Making .$63,199.64

Which is awarded as follows:

To Francis D. Tull, Maurice L. Tull and Ernest B. Tull each one-third, less payments on account of distribution; and the accountants are further charged, in favor of Maurice L. Tull, with one-third of the commissions charged on the real estate, less $100, as follows:

The commissions are. $1351.16

Less extra compensation allowed. 100.00

Leaving .$1251.16

Of which one-third is $417.05, which is awarded to Maurice L. Tull.

And now, June 28,1921, the account is confirmed nisi.


author: McPherson, P. J.,

text:
    A. M. Karns & Sons v. James McGraw Company.

      Statute of frauds — Promise not within the statute — Promisor with funds— Estoppel.

    1. Where a person who promises to pay the debt of another has in his hands funds of such other applicable to payment of the latter’s debts, he is bound by such promise, although it is not in writing.
    2. Even if he has not such funds, yet if he. says at the time that he makes the promise that he has the funds, and property is released from attachment in consequence, he is estopped from denying his liability.
    Rules for new trial and for judgment n. o. v. C. P. Fulton Co., Oct. T., 1920, No. 32.

      John P. Sipes, for' rules; John R. Jackson, contra.
    Oct. 3, 1921.
   McPherson, P. J.,

Testimony in this ease developed these facts: The defendant, as a contractor with the Commonwealth of Pennsylvania, was completing a contract to build a concrete road of approximately three miles in length, located on the Lincoln Highway, within the limits of Fulton County. The Walsh Transportation Company, under contract with the defendant, was operating one or more trucks in hauling material and supplies used on this road contract, and thus became indebted to the plaintiff in the sum of $157.29. The plaintiff failed to secure payment of this account, and in a proceeding before A. D. Peightel, a justice of the peace in and for Fulton County, issued an attachment and had seized a truck owned by the said Walsh Transportation Company. Subsequent to the issuing and service of this attachment, John Donovan, the local representative of the defendant company in charge of the work of completing the said road, and of the account arising therefrom, interested himself in the situation created by this attachment, and on Dee. 2, 1920, in company with the Walshes, owners of the Walsh Transportation Company, and A. D. Peightel, the justice of the peace in question, went to the Fulton County Bank, in McConnellsburg, and requested Wilson L. Nace, the cashier of said bank, to call up the office of the defendant company in Philadelphia, and to state to the company the situation in relation to the attachment, in the hope of securing its release and the payment of the account by the defendant. Mr. Nace called up the company’s office and talked with Mr. Young, the secretary or treasurer of the defendant company, to whom he told the situation and submitted the question of the payment of the account by the defendant. In reply, Mr. Young stated that: “We would pay the account if we owed the Walsh Transportation Company that amount of money.” Mr. Nace then stated to Mr. Young that Mr. Donovan was present, who said that to-morrow was the pay-day of the defendant and that the company owed to the Walsh Transportation Company more than sufficient money to pay these accounts. This last statement was made either direct by Mr. Donovan to Mr. Young, over the wire, or by Mr. Nace to Mr. Young, repeating a statement made by Mr. Donovan.

Thereupon Mr. Young replied that the defendant company would pay the plaintiff’s account, and offered to send the amount of the same by check to Mr. Nace. However, Mr. Nace demurred, and at his suggestion it was arranged over the wire, between him and Mr. Young, that the check in payment of the plaintiff’s account should be sent direct to A. D. Peightel, Esq., the justice who had issued the writ of attachment, and before whom the proceeding to collect the plaintiff’s account was pending. This Mr. Young promised the company would do. At the time of the completion of this arrangement, or immediately thereafter, Mr. Nace saw the plaintiff and told him of the circumstances and the promise on the part of the defendant company to pay the account, as above outlined. Thereupon the plaintiff withdrew the attachment and released the truck to the Walsh Transportation Company. The defendant company never sent the check to Mr. Peightel, as promised, and hence this suit.

In view of these facts and the inferences necessarily flowing from them, most important of which was the acquiescence by the Walsh Transportation Company in the arrangement made, whereby, from the funds that were due from the MeGraw Company to the Walsh Transportation Company, the account due from the Walsh Transportation Company to the plaintiff should be paid by the MeGraw Company, the court directed the jury to find a verdict in favor of the plaintiff and against the defendant for the amount due, and refused to instruct the jury in accordance with the point presented by the defendant that, “under all the evidence, the verdict of the jury should be for the defendant.”

After the verdict rendered, a motion for a new trial and for judgment non obstante veredicto was made by the defendant, and the disposition of this is the matter now at hand.

The defendant filed a number of reasons in support of the above motion, but on argument the single position was urged upon the court that, by reason of the statute of frauds, this promise on the part of the defendant, being a verbal promise to pay the debt of another, was unenforceable as against the defendant.

The provisions of the act are as follows: “No action shall be brought . . . whereby to charge the defendant upon any special promise to answer for the debt or default of another, unless the agreement upon which such action shall be brought, or some memoranda or note thereof, shall be in writing and signed by the party to be charged, or some other person by him authorized.”

Under the facts as above set forth and the inferences arising therefrom, it seems very clear that this promise on the part of the defendant is not within the statute of frauds, but is covered by the exception established by the courts in the construction of said act, as follows: “Whenever money or funds or securities or other property of a debtor are in the hands of another and pledged or devoted to the payment of his debts, the party holding the same and promising to pay is bound by the promise, and the case is not within the statute:” Stoudt v. Hine, 45 Pa. 30; Dock v. Boyd, 93 Pa. 92; Hall v. Lincoln Savings and Trust Co., 220 Pa. 485.

There is no evidence in this case to show that the statements of the defendant’s agent, Donovan, accepted as correct by the secretary of the defendant and the Walshes, were incorrect, and we must assume, under the state of the record, that the defendant did have in its possession funds owing to the Walsh Transportation Company sufficient to pay the plaintiff, and which, by the arrangement above described and acquiesced in by the Walshes through their being parties to it and their acceptance of the benefits thereof, viz., the return to them of the possession of their truck which had been attached at the instance of the plaintiff, were set aside or pledged for that purpose.

Even though the .defendant in fact did not have funds in his hands due the Walsh Transportation Company sufficient to pay the plaintiff’s claim, yet it was estopped from establishing that fact, in view of the release by the plaintiff of the truck from the lien of his attachment, in reliance upon the statement made by the defendant’s agent, Donovan, accepted as true by the defendant’s secretary, viz., that there were funds in defendant’s hands sufficient to pay plaintiff’s claim and the promise 'to pay him therefrom: Dock v. Boyd, 93 Pa. 92.

The promise of the defendant, therefore, coming within the above noted exception to the operation of the statute of frauds, is enforceable against the defendant by the plaintiff, and the verdict rendered should be sustained.

And now, Oct. 3,1921, motion for a new trial and for judgment non obstante veredicto overruled, and, upon payment of the jury fee, judgment is ordered to be entered on the verdict in favor of the plaintiff.


author: Wickersham, J.,

text:
    Secured Investments, Inc., etc., v. Sohland et al.

      Practice, C. P. — New trial — Defective record — Omission by court stenographer.

    Where, upon a motion for new trial, it is impossible to ascertain just what the ruling of the court was upon a particular matter at the former trial, because the court stenographer has omitted the objections and rulings thereon from the record, a new trial will be granted in order that justice may be done.
    Motion for new trial. G. P. Dauphin Co., Sept. T., 1920, No. 84.

      A. Ross Walter, for plaintiff; Oscar G. Wickersham, for defendant.
    Oct. 10, 1921.
   Wickersham, J.,

The plaintiff has alleged seven reasons for a new trial in this ease. We would not be disposed to grant a new trial for the first three reasons alleged, to wit, that the verdict of the jury was against the evidence, was against the weight of the evidence, and was against the facts and not supported by the evidence. We think there was sufficient evidence in this ease from which the jury could have found a verdict for the defendant.

In the argument of the fourth and fifth reasons for a new trial a serious situation was developed. It was alleged therein that the court erred in admitting into evidence the cross-examination of George A. Quinn as found on pages 36 and 37 of the testimony, offered for the purpose of showing his bias against the defendant, and that the court further erred in refusing to strike out said testimony after the same had been admitted.

Counsel for the defence proposed to attack the credibility of the witness Quinn, by interrogating him as to a transaction between himself and the defendant, in which the defendant had Quinn arrested for failure to turn over some money which she claimed he owed her. We rejected this testimony, but afterwards, on reflection, were of opinion that it was admissible. Our recollection is that we so stated and permitted counsel to recall Mr. Quinn for further examination. (See notes of testimony, page 36.) The official stenographer has failed to transcribe upon the record all that we said in that particular. Our recollection is that we gave reasons for permitting the cross-examination and limited the extent to which it should be allowed.

It is now claimed by counsel for plaintiff that he objected to the extent to which the cross-examination was allowed, and that he offered to explain by Ms witness Quinn what the transaction for which he was arrested really was, and he now complains that we refused to allow Mm to do so. Unfortunately, the stenographer has not reported what took place nor our ruling in the matter, contenting himself with the mere statement that there was a “discussion.” Counsel for plaintiff recalls that he objected and asked to have the testimony stricken out. We recall distinctly that he asked for several exceptions to our rulings at that time. The record does not show what actually took place, and is otherwise defective and incomplete.

In order that justice may be done, we think a new trial should be granted, and, therefore, for the reasons above stated, and because the record in this case is so imperfect that it is impossible at this time for the court to ascertain exactly what took place, the motion of the plaintiff for a new trial is allowed.

From William Jenkins Wilcox, Harrisburg, Fa.


author: Alter, Att’y-Gen.,

text:
    Small Loans Act.

      Small Loans Act — Usury—Act of June 17, 1915.

    Under the Small Loans Act of June 17, 1915, F. L. 1012, a loan of more than $300 by any person, partnership, association or corporation to a single individual is unauthorized.
    Attorney-General’s Department. Opinion to Hon. John S. Fisher, Commissioner of Banking.
    Sept. 1, 1921.
   Alter, Att’y-Gen.,

I have your inquiry as to the interpretation of the Act of June 17, 1915, P. L. 1012, entitled “An act regulating the business of loaning money in sums of $300 or less, either with or without security, to individuals pressed by lack of funds to meet immediate necessities, fixing the rates of interest and charges therefor, requiring the licensing of lenders, and prescribing penalties for the violation of this act.”

Your question is whether the authority conferred by the act is limited to a single loan, not exceeding $300 to any individual, or whether one individual may be given an unlimited number of loans, provided each loan does not exceed $300.

The language to be considered is found in section 1 of the act as follows: “It shall be lawful for any person, persons, partnership, association or corporation within this Commonwealth, who shall comply with the requirements of this act, to loan money in sums of three hundred ($300) dollars or less, either with or without security, to individuals pressed for lack of funds to meet immediate necessities and charge and collect for the loan thereof interest and fees as hereinafter provided.”

The interest and fees provided are such as would otherwise be usurious.

This act deals with an exception to the general law as well as to the principles of the common law. It should be construed accordingly. If the limit of $300 were to be applied only to each single loan and an individual could borrow any amount desired by dividing it into notes of $300 each, the limitation would be of little practical use. While the expression “sums of $300 or less” occurs in the language above quoted, the plural “sums” and the words “to individuals,” which follow, are consistent with an interpretation restricting the loan of the prescribed sum to each individual borrower. This, I think, is the correct interpretation.

You are advised that the loan of more than $300 by any person, partnership, association or corporation to one individual is not authorized by this act.

From Guy H. Davies, Harrisburg, Fa.


author: Lindsey, P. J.,

text:
    The Royal Tailors v. McIntyre.

      Practice, C. P. — Foreign attachment — Intervention of a third party as garnishee — Act of May 26, 1897.

    1. A third party claiming property attached in a foreign attachment may intervene by petition and become a party to the suit as a garnishee for the purpose of raising the question of ownership of the property attached.
    2. The claimant in such a case has no interest in the suit, and cannot defend the action or dissolve the attachment, but only assert his claim or ownership to the property and have that issue determined.
    3. That claimant has a remedy under the Sheriffs Interpleader Act of May 26, 1897, P. L. 95, does not affect the right to intervene.
    Foreign attachment. Rule to show cause on petition of S. S. McIntyre to intervene. C. P. Warren Co., March T., 1921, No. 18.

      F. J. Lyons, for plaintiff; Alexander & Clark, for petitioner.
    July 11, 1921.
   Lindsey, P. J.,

This is a case of foreign attachment, and the sheriff has attached certain personal property and also certain real estate as the property of A. G. McIntyre, the same being found in the possession of Sherwood Skinner, who is named as garnishee. S. S. McIntyre presented her petition, on which this rule was granted, alleging that she is the wife of defendant, A. G. McIntyre, and a resident of Salt Lake City, Utah; that she is the owner of the property attached by conveyance from her husband, A. G. McIntyre, and prays leave to intervene in the suit as a party thereto, “to the end that she may assert her ownership of said property as against the claim of the plaintiff and so that said attachment may be dissolved.” Plaintiff argues that claimant should not be allowed to intervene, as she has no interest in the suit itself, and as to her claim of ownership of the property, she has a remedy by sheriff’s interpleader as to the personal property and by action of ejectment as to the real estate.

The Interpleader Act of May 26, 1897, P. L. 95, applies to property seized under a foreign attachment: Barnes v. Bamberger, 196 Pa. 123; Barndollar v. Fogarty, 203 Pa. 617.

It does not necessarily follow, however, that a claimant of property should be remitted to that proceeding as his only remedy. It has been held that a third party claiming property attached should be allowed to intervene and become a party to the suit with the garnishee: Keystone Brewing Co. v. Canavan, 19 Dist. R. 132; Hildreth v. Kepner, 11 Dist. R. 789.

We can see no objection to following the practice of allowing a third party claimant of property to intervene in the foreign attachment, and such would seem to be the most direct way of raising the question of ownership of the property attached. The claimant, of course, has no interest in the suit, but does not become a party defendant by intervening, but a party garnishee, and cannot defend the action or dissolve the attachment, but only assert his claim of ownership to the property and have that issue determined. In this case, also, both real and personal property are involved, and by allowing claimant to intervene, the title to both can be determined in this action, whereas separate suits would be necessary under any other procedure. We think the petition should be granted to the extent of allowing the petitioner to intervene in this case as a party garnishee.

And now, to wit, July 11, 1921, it is hereby ordered that S. S. McIntyre, a third person who claims to own the property attached as that of A. G. McIntyre, be and hereby is permitted to come in and, with Sherwood Skinner, the garnishee, determine the question of ownership to the property attached as a party garnishee. With this modification of the rule asked for by S. S. McIntyre, the same is made absolute; and it is further ordered that the making absolute of the rule shall have the same force and effect with respect to making S. S. McIntyre a party to this suit as the summoning of said S. S. McIntyre as garnishee would have, had the property attached been found by the sheriff in her possession.

From W. S. Clark, Warren, Pa.


author: Hargest, P. J.,

text:
    Commonwealth v. Donatello.

      Justice of the peace — Transcript—Surety of the peace — Act of March 18, 1909.

    The justice of the peace is required by the Act of March 18, 1909, P. L. 42, to find on the record in surety of the peace cases that the prosecutor’s danger of hurt is actual. This requirement is jurisdictional, and without such a finding malicious threats with intent to do harm are not sufficient, and the information, return and transcript will be quashed upon motion.
    Motion to quash. Q. S. Dauphin Co., June Sess., 1921, No. 108.

      Philip S. Moyer, District Attorney, and John B. Geyer, for Commonwealth.

      Paul A. Kunhel, for defendant.
    Sept. 13, 1921.
   Hargest, P. J.,

This is a surety of the peace case and comes before us on a motion to quash the information, return and transcript of the justice of the peace. The reasons assigned in support of this motion are that the information fails to show, as required by the Act of March 18, 1909, P. L. 42, that the defendant threatened to injure the prosecutrix, either in body or estate; that it fails to set forth any words that the defendant may have spoken; and that the record fails to show that the ‘“prosecutrix’s danger of being hurt in body or estate is actual, and that threats were made by the defendant maliciously and with the intent to do harm.”

The information charges that the defendant “did maliciously and with intent to do harm threaten to injure her and followed her on the public highway, continuing to make all manner of threats against her.” The record shows that, before the hearing, “the 3rd section of the Act of March 18, 1909, P. L. 42, was read to the parties and the opportunity afforded and the suggestion of compromising made, the parties being unable to agree. After hearing the evidence and considering the character of the defendant, the defendant was placed under $150 bond to appear at court.”

Section 1 of the act of assembly referred to provides that the justice shall bind over the defendant only when the evidence shows to his satisfaction that the prosecutor’s or prosecutrix’s danger of being hurt in body or estate is actual, and also that the threats were made maliciously and with the intent to do harm. While the information charges that the threats were made maliciously and with intent to do harm, there is no finding by the justice that there was any actual danger to the prosecutrix in body or estate.

In the case of Com. v. Keener, 30 Dist. R. 641, 24 Dauphin Co. Reps. 183, this court has held that this is a jurisdictional fact and should appear upon the record.

For this reason, the defendant’s motion must prevail, and the information, return and transcript are hereby quashed.

From William Jenkins Wilcox, Harrisburg, Pa.


author: Per Curiam,

text:
    Davis’s Trust Estate.

      Inheritance transfer tax — Resident trustee — Deceased non-resident cestui que trust — Act of June 20, 1919.

    1. Stocks in Pennsylvania corporations held by a resident trustee under a deed of trust providing that the income should be paid to a non-resident settlor for life, and on his death the corpus turned over to his executors or legal representatives, on the death of the settlor are subject to the inheritance transfer tax of 2 per cent, imposed by the Act of June 20, 1919, P. L. 521.
    2. Bonds and mortgages forming a part of the corpus are not liable to the tax.
    3. The court will not award the tax to the Commonwealth unless the property has been duly appraised as prescribed by the act; in the absence of such appraisement, the court will direct the trustee to retain the fund until the appraisement has been made.
    Semble. It is the duty of the trustee to apply to the Auditor General for an appraisement.
    Adjudication of trustee’s account. C. P. No. 3, Phila. Co., Sept. T., 1921, No. 8923.
    Before McMichael and Ferguson, JJ.

      Saul, Ewing, Remick & Saul, for accountant.

      J. Lee Patton, for Auditor General, claiming inheritance transfer tax.

      David Wallerstein, contra.
    Feb. 10, 1922.
   Per Curiam,

In this case the first and final account of the Land Title and Trust Company, trustee under the deed of trust of Clara E. Davis, now deceased, was filed on Nov. 22, 1921, The account shows a principal account of $41,250 and an income account amounting to $17,558.57; and on the creditor side of the account various items of credit, also a distribution account showing net income paid to Clara E. Davis during her life.

These securities were held by the Land Title and Trust Company under a deed of trust made by Clara E. Davis, which provided that, after deducting charges, including a commission of 4 per cent, on the income, the net income of the trust fund should be paid to or for the support and maintenance of Clara E. Davis during the time of her natural life, but that the income in the hands of the trustee should not be liable for her debts, contracts or engagements, or subject to assignment. The corpus of the trust estate, together with the net income in hand, was to be turned over to the executor of the will of Clara E. Davis or to her legal representatives. Mrs. Davis at the time of her death was a resident of the State of New York. She died Sept. 20, 1913.

There was presented before the court a claim of counsel for the Land Title and Trust Company, trustees, of $500 for legal services rendered by the firm of Saul, Ewing, Remick & Saul.

There was also presented a claim on behalf of the Commonwealth of Pennsylvania for a transfer tax at the rate of 2 per cent, on the net balance of principal passing to the Irving National Bank, executor of the estate of Clara E. Davis, deceased, with interest at the rate earned from Sept. 18, 1921, until Oct. 25, 1921, and at the rate of 12 per cent, per annum from Oct. 25, 1921, until the date of the payment of the tax.

There was also presented a claim of the Land Title and Trust Company for the sum of $102.90, being $10, cost of filing account, and $27.90, the cost of advertising same; 50 cents for affidavit to the account; $64.50 paid to Oliver Bair for funeral expenses here at the request of the New York executor.

This claim for taxes is made under the Act of June 20, 1919, P. L. 521, which is entitled “An act providing for the imposition and collection of certain taxes upon the transfer of property passing from a decedent who was a resident of this Commonwealth at the time of his death, and of property within this Commonwealth of a decedent who was a non-resident of this Commonwealth at the time of his death, making it unlawful for any corporation of this Commonwealth, or national bank association located therein, to transfer the stock of such corporation or banking association standing in the name of any such decedent until the tax on the transfer thereof has been paid, and providing penalties, and citing certain acts for repeal.”

The act is divided into several clauses, inter alia:

“ (a) When the transfer is by will or by the intestate laws of this Commonwealth from any person dying seized or possessed of the property while a resident of the Commonwealth, whether the property be situated within this Commonwealth or elsewhere.”

The corpus of the trust fund does not, in our opinion, come within this clause.

“(b) When the transfer is by will or intestate laws of real property within this Commonwealth, or of goods, wares or merchandise within this Commonwealth, or of shares of stock of corporations of this Commonwealth, or of national banking associations located in this Commonwealth, and the decedent was a non-resident of the Commonwealth at the time of his death.”

Tentatively we are of opinion that the stock of corporations of this Commonwealth included within this account is taxable under this clause of article 1. Upon inspection of the account we find that the stocks which would be subject to the tax are: Fifty shares of Equitable Illuminating Gas Light Company, preferred, par value $100, $5000; twenty-seven shares United Gas Improvement Company, par $50, $1350; three shares United Gas Improvement Company, new stock, par $50, $157.93; nine shares Real Estate Trust Company, preferred, $900. There does not seem to be any other security assessable under this clause of the act. The rest of the corpus of the estate consists of bonds and mortgages, and it does not seem, upon inspection of the act, that these are made liable to tax.

In our opinion, the stocks above enumerated are subject to the 2 per cent, transfer tax imposed by the Act of June 20,1919, P. L. 521.

It would seem, however, that the parties interested should follow the provision of the Act of Assembly of June 20, 1919, P. L. 521, as to the appraisement of the tax. Section 25 of the act provides as follows: “Whenever the transfer is of property within the Commonwealth from a decedent who was a non-resident of the Commonwealth at the time of his death, the Auditor General, whenever the occasion may require, on the application of any interested party or upon his own motion, shall appoint an appraiser to appraise the value of such property hereinbefore subjected to tax. . . . He shall . . . make a fair, conscionable appraisement of said property. . .

“Section 27. Any person not satisfied with such appraisement . . . may appeal within thirty days to the Court of Common Pleas of Dauphin County.”

There is nothing in the record to show that this has been done, and we, therefore, cannot make an award of the tax alleged to be due the Commonwealth.

In section 29 of the act it is provided: “Whenever any tax imposed by this act upon the transfer of property of a non-resident decedent in this Commonwealth shall have remained due and unpaid for one year, the Auditor General may apply to the Court of Common Pleas of Dauphin County, or any county in which such property may be situated, by bill or petition, to enforce the payment of the same, whereupon the court, having caused notice to be given to the owner of the property subject to the tax, or to the executor, administrator or trustee of the decedent, and to other such parties as may be interested, shall proceed according to equity to make such decree or order for the payment of the tax out of such property as shall be just and proper.

“And the Auditor General is hereby further authorized and empowered to bring suit or suits in the name of the Commonwealth of Pennsylvania in any court of this Commonwealth or elsewhere for the recovery of any sum or sums due, owing or payable, for or on account of any tax imposed by the provisions of this act upon the transfer of the property within this Commonwealth of which a non-resident of the Commonwealth may have died seized or possessed, with costs of suit.”

It has been agreed by counsel that a decree should be entered by the court that the trust fund shall be paid over to the executors, less $500 counsel fee, and that the sum of $1700 be retained by the Land Title and Trust Company, trustee, to await the determination of the claim made by the Commonwealth for the payment of the inheritance transfer tax under the Act of Assembly of the State of Pennsylvania of June 20, 1919, P. L. 521. We see no reason why this should not be done.

The court is of opinion that the stocks which are subject to the tax, viz., fifty shares of Equitable Illuminating Gas Light Company, preferred, par value $100, $5000; twenty-seven shares United Gas Improvement Company, par $50, $1350; three shares United Gas Improvement Company, new stock, par $50, $157.93; nine shares Real Estate Trust Company, preferred, $900, will also have to be retained by the Land Title and Trust Company, trustee, until the final adjudication of the amount of the tax due by the trust estate.