text:
    Humphreville v. Foultz.

      J. Andrew Frantz, for rule; Charles W. Eaby, contra.
    Jan. 18, 1930.
   Landis, P. J.,

— This suit was commenced on Jan. 25, 1929. On Aug. 19, 1929, the plaintiff filed his statement of claim. The defendant asks to have this statement stricken off upon two grounds.

The first ground alleges that the endorsement on the statement is not in accordance with the Practice Act. Section 10 of the Act of May 14, 1915, P. L. 483, provides that “the statement of claim shall be endorsed as follows: ‘To the within defendant:. You are required to file an affidavit of defense to this statement of claim within fifteen days from the service hereof.’ This notice shall be followed by the name of the plaintiff’s attorney, or by his own name if he sues in person, and an address within the county where all papers are to be served.” It appears from an examination of the statement that on the back of it is endorsed: “To the within defendant: You are hereby required to file an affidavit of defense within fifteen days from the service hereof.” This is not signed by the plaintiff’s attorney, but down farther on the paper, in typewriting, is endorsed: “Chas. W. Eaby, Attorney.” No address is given where the papers are to be served. It is manifest that in this respect the statement is not in accordance with the provisions of the act.

In the second place, the affidavit attached to the statement is: “Before me, the subscriber, personally appeared John P. Humphreville, the plaintiff, who being duly affirmed according to law, deposes and says that the facts set forth in the foregoing statement are true and correct, to the best of his knowledge and belief.” This question we have discussed in the case of Acker v. Creswell, June Term, 1929, No. 30, swpra, in which we have just handed down an opinion. If that case is decided correctly, then the affidavit attached to the present statement is insufficient.

The rule is, therefore, made absolute, and the plaintiff’s statement is stricken off, with leave to file a new statement which will conform to this opinion.

Prom George Ross Eshleman, Lancaster, Pa.

NOTE. — See preceding case.


source: Caselaw Access Project

author: Alessandroni, J.,

license: Public Domain

text:
    Ewin J. Schoettle Co. v. Oliver Bros., Inc.

      R. T. McCracken, for plaintiff; Wessel, Bennett & Weiss, for defendant.
    April 17, 1930.
   Alessandroni, J.,

— Plaintiff filed a bill of complaint averring that the defendant had made wilful and fraudulent use of a drawing owned by the plaintiff, and praying that the defendant be enjoined from copying, simulating or using the drawing; that the defendant be ordered to deliver up for destruction all copies of the drawing and that the defendant be ordered to pay damages for the fraudulent and wrongful appropriation and misuse of the plaintiff’s drawing. The defendant filed an answer admitting the use of the plaintiff’s drawing, but averring that said use was due to inadvertence and that the plaintiff suffered no loss whatsoever as a result of the use to which the drawing was put. Preliminary objections to the bill previously filed were overruled. Upon a consideration of the bill, the answer thereto and the testimony produced at the hearing, the court makes the following

Findings of fact.

1. The plaintiff corporation is a paper box manufacturer and the defendant is a manufacturer of masquerade costumes.

2. The plaintiff solicited an order from the defendant for boxes and submitted a sketch which would make an attractive cover for the boxes. This was done about the latter part of April, 1928.

3. Plaintiff and defendant disagreed on the price of the boxes, the chief item of disagreement being a charge of $150 for the sketch plate necessary in the manufacture of the boxes, and, as a result, the plaintiff did not get the order.

4. Plaintiff first submitted a pencil sketch, and at the request of the defendant submitted, an ink sketch, but when the plaintiff asked for the return of this sketch, the defendant delayed about two weeks in returning it. During that time the plaintiff’s salesman made about ten efforts to obtain it, but received only excuses.

5. Defendants took the sketch and submitted it to another box manufacturer who made boxes for them, using the identical sketch and design.

6. The plaintiff’s salesman, during the first or second week of June, saw the new boxes being delivered to the defendant decorated with the identical design which he had submitted. The plaintiff’s attorney, on June 16, 1928, wrote the defendant, advising it that its use of the plaintiff’s drawing was wrongful, and requested that its use be stopped immediately.

7. Defendant failed to accede to this request until October, 1928, when it stopped using the boxes so marked. In the meantime, however, defendant had used 26,000 of the 32,000 boxes originally obtained which were decorated with the plaintiff’s design.

8. The sketch submitted by the plaintiff to the defendant was practically of no value as a sales proposition after it had been rejected. The cost of making the pencil and ink sketches was $16.

Discussion.

The facts in this case lead the court to conclude that the defendant made a wrongful and fraudulent use of the plaintiff’s sketch. The plaintiff, during the latter part of April, 1928, submitted a sketch to be used on the boxes which it was endeavoring to sell the defendant, said sketch being designed primarily for the defendant’s business and suggested in an effort to make the defendant’s boxes more attractive. Defendant agreed that the idea of the sketch was very good, but refused to purchase it from the plaintiff because of its charge of $150 for the plate and sketch. The defendant, however, postponed giving the plaintiff a decision by tactics that were evasive. When the plaintiff’s salesman requested that they return the sketch, Oliver, one of the officers of the defendant company, informed him on one occasion that the sketch was in the safe and the other partner had the key. Several days later, the salesman attempted again to procure the sketch, and another officer of the corporation, Greenbaum by name, informed him that the sketch was up at his house, as he wanted to show it to his wife. The salesman testified that he made at least ten efforts to procure the sketch over a period of two weeks and the defendant postponed returning it, offering various excuses, several of which have been enumerated. The evidence clearly shows that during this time the defendant had submitted the sketch to their customary box manufacturer, requesting him to quote them a price on boxes using a “similar” design. The price quoted was the same as the price they ordinarily paid and they ordered the boxes. Both the box manufacturer and the defendant’s witnesses were quite explicit in stating that the word “similar” had been used with reference to the new boxes that were to be made, but it is significant that no sketch of the design to be used by their usual manufacturer was requested, and the defendant did not see the design on the boxes until they were delivered. When dealing with the plaintiff a sketch was requested first. In view of all the circumstances, the court has no alternative but to decide that the appropriation of the plaintiff’s property, to wit, the design and sketch, was wilful, wrongful and made in absolute disregard of the plaintiff’s property rights.

In fact, the box manufacturer who procured the order stated that he did not want to get into any trouble with anybody and asked Mr. Oliver whether the design was registered. When the court asked him “What answer did you get to that question?” the witness replied: “I got the order.”

That the plaintiff had a common law property right in the sketch submitted to the defendant company is not questioned by the defendant. The authorities in support of this established principle are fully set forth in 13 Corpus Juris, 945, et seq., and 6 Ruling Case Law, 1102, et seq. The defendant’s attorney, at the hearing, stated he was satisfied that an injunction might issue. The only question seriously raised is as to the measure of damages. The Pennsylvania authorities establish the principle that when a tort is committed wilfully, maliciously or so negligently as to indicate a wanton disregard of the rights of others punitive damages may be awarded. In the case of Pittsburgh R. R. Co. v. Lyon, 123 Pa. 140, the plaintiff was damaged as a result of an unreasonable railroad regulation. The jury was permitted to award punitive damages, the court saying: “But in torts the rule is different; the motive of the defendant becomes material. In those that are committed through mistake, ignorance, or mere negligence, the ordinary rule is mere compensation; but in such as are committed wilfully, maliciously or so negligently as to indicate a wanton disregard of the rights of others, the jury are not restricted to compensation merely. They may, if the evidence justifies it, give vindictive or exemplary damages, such as will not only compensate the injured party, but at the same time tend to prevent a repetition of the wrong, either by the defendant or others.” Accord, Sorg v. Frederick, 255 Pa. 617. Even in cases of negligence, exemplary or punitive damages may be awarded: Wright v. Philadelphia R. T. Co., 236 Pa. 132. In replevin actions the same rule governs: Duroth v. Cauffiel, 243 Pa. 24. These cases are supported by the decision in Spencer v. Carlisle Borough, 63 Pa. Superior Ct. 513, and by the rule established in 1 Sedgwick on Damages (9th ed.), 686, et seq. In the latter authority it is stated that punitive or exemplary damages “may be allowed when the act was wilfully wrong, ... or in known violation of law.” There can be no question but that the appropriation made by the defendant of the plaintiff’s property was wilful, fraudulent and in utter disregard of the plaintiff’s rights. The plaintiff, therefore, is entitled to punitive or exemplary damages. Judgment is, therefore, awarded in favor of the plaintiff for $300. The injunction also should issue.

The six requests for findings of fact presented on behalf of the plaintiff are affirmed.

Of the six requests for conclusions of law presented on behalf of the plaintiff, those numbered 6, 7, 8 and 10 are affirmed, and those numbered 9 and 11 are refused.

Of the requests for findings of fact presented on behalf of the defendant, the 1st, 2nd, 3rd, 4th and 6th are affirmed, and the 5th, 7th, 8th, 9th, 10th and 11th are refused.

Of the requests for conclusions of law presented on behalf of the defendant, those numbered 12, 13, 16, 17 and 18 are affirmed, and those numbered 14, 15 and 19 are refused.

Conclusions of law.

1. The plaintiff had a common law property right in the sketch which it submitted to the defendant and the defendant wrongfully appropriated the plaintiff’s property.

2. The wrongful and unlawful appropriation by the defendant was wilful, fraudulent and in utter disregard of the plaintiff’s property rights, and, therefore, the plaintiff is entitled to exemplary damages in the sum of $300.

3. The plaintiff is entitled to an injunction restraining and enjoining the defendant from in any way making further use of the design belonging to the plaintiff.

4. It is ordered that the defendant either cover the design on the boxes it now has remaining which are decorated with the plaintiff’s design or destroy those boxes.

5. That defendant pay the costs of this proceeding.

Decree nisi.

And now, to wit, April 17, 1930, it is hereby ordered, adjudged and decreed that the defendant be restrained and enjoined from in any way making use of the plaintiff’s drawing or sketch; that the defendant be ordered to destroy or cover the design on the boxes it now has remaining which are copies of the plaintiff’s design; and that the defendant pay to the plaintiff the sum of $300.

The prothonotary will enter this decree nisi and give notice of the same to the parties or their counsel, and if no exceptions are filed within ten days from the date of service thereof, a form of formal decree may be presented then to be entered.

NOTE. — No exceptions were filed.


author: Pee Curiam,

text:
    Lowrey’s Estate.

      Bell, Trinkle, Truscott & Bell and Louis Wagner, for exceptants.

      William F. Scheufele, Albert T. Hanby, Owen J. Wister, James P. Junkin, Otto R. Heiligman and S. Lloyd Moore, contra.
    April 30, 1930.
   Pee Curiam,

— Because of the serious character of the allegations of the petition and of the earnest and excellent argument, both oral and written, presented by contestants, we have made a critical examination of the entire record, and as a result of that examination find no error of law in the rulings of the Hearing Judge; but, on the contrary, are of opinion that on the testimony offered he could not otherwise decide.

Accordingly, all exceptions are dismissed and the decree directed to be entered by him to the effect that the appeal was dismissed at the costs of the appellants, and the record remitted to the Register, is confirmed.


author: Gest, J.,

text:
    Frick’s Estate.

      Saul, Ewing, Rernick & Sand, for exceptant; Charles S. Schofield, contra.
    May 29, 1930.
   Gest, J.,

— The decedent’s gross estate amounted approximately to $160,000, and the testator devised the same to his wife, who is the executrix. When the estate was valued by the appraisers appointed by the register of wills, she claimed as a deduction commissions at the rate of 5 per cent, on the first $100,000 and 3 per cent, on the excess over that amount. The appraisers allowed a deduction for commissions at the rate of 3 per cent, on the entire estate and suspended a claim for tax on $2000 as excess commissions. The Auditing Judge allowed the claim, and in our opinion the exceptions should be dismissed. The compensation allowed by him as commissions was entirely adequate, and the determination of commissions by an Auditing Judge is a matter with which he is especially competent to deal.

We know of no rule by which an executor is entitled to 5 per cent, on the first $100,000 and 3 per cent, on any excess, or, indeed, to any fixed percentage. Commissions are compensation for time, trouble and responsibility and vary according to the circumstances of the cases, and any percentage basis is only a rule of thumb. The determination of the proper amount in case of dispute is within the discretion of the court. It is our practice, when the Register of Wills suspends a claim for tax on excess commissions, to have the Auditing Judge pass on it in order to save the time, expense and circuity of action required in ease of an appeal from the appraisement: Tobey’s Estate, 10 D. & C. 229. For these reasons it is not within our province to instruct the Register of Wills upon the subject by laying down any fixed rule. The appraiser should determine what in his judgment is a fair compensation and note a suspended claim for tax on any amount in excess thereof, which was what was done in the present case.

The exceptions are dismissed and the adjudication confirmed absolutely.


author: Schaeffer, P. J.,

text:
    Commonwealth v. Lutz et al.

      Emanuel Weiss, Assistant District Attorney, for Commonwealth.

      John P. Wanner, for defendants.
    Oct. 14, 1929.
   Schaeffer, P. J.,

-These two defendants with two others not yet apprehended were indicted upon four bills of indictment, charging all four defendants (1) with assault and battery in and upon Stanley Ostrowski and Joseph Karejwo; (2) with robbery of an automobile while armed with an offensive weapon; (3) with rape of one Helen Kowalski; and (4) with rape of one Stella Kowalski. When the cases were called, they asked for separate trials upon each indictment, but the court denied their request. The jury was accordingly sworn to try them upon all four indictments, and, after hearing the witnesses and the arguments of counsel, returned a verdict of guilty as indicted upon the first three indictments and guilty of assault with intent to ravish upon the fourth.

The defendants now seek a new trial upon the ground that the simultaneous trial- of all four cases was prejudicial to them in their rights as defendants and that they are entitled as a matter of law to trial before a different jury upon each indictment. But the transactions which constituted the basis of the four charges constituted one whole. Ostrowski and Karejwo, with the two girls, were in the former’s automobile, which was parked at night along a private road. The defendants in another automobile stopped near the first car. Gierot, one of the defendants not yet apprehended, and John Lutz got out of their car and went to opposite sides of Ostrowski’s car, pretended to be police officers and demanded Ostrowski’s license. When the latter asked to see their authority he was hit in the face. He seized a revolver, but finding he could not work it, gave it to one of the girls, from whom Lutz took it. Lutz then pulled Karejwo out of the rear seat and took him and Ostrowski, at the point of the revolver, to the other car. Gierot then drove off with Ostrowski’s car with the girls in it. James Lutz drove the other car after him, but not before Ostrowski had jumped from a window and escaped. After traveling a mile or more, Gierot awaited the Lutzes, put the girls in the Lutz car and compelled Karejwo to drive off in Ostrowski’s car. The defendants then assaulted the girls.

Clearly the entire transaction was intended to get possession of and to assault the girls.

We can discover nothing prejudicial to the defendants in the simultaneous trial upon the four indictments. Save upon the assault and battery charge, the same evidence could have been produced and received upon the trial of each indictment. We believe the matter has been ruled by a number of cases. In Com. v. Valotta, 279 Pa. 84, two indictments charging murder were tried together, although the defendant made no objection before the jury was sworn. The Supreme Court said: “The simultaneous trial on two indictments charging murder is warranted.” In Com. v. Danaleczk, 85 Pa. Superior Ct. 253, the simultaneous trial of two indictments charging rape was approved. The court said (page 255): “The propriety of trying two indictments of this character before the same jury is a matter in which the trial court is invested with discretion, and the ruling of that court will not be reversed unless it is made clearly to appear that the rights of the defendants have been thereby prejudiced.” To the same effect are Com. v. Faulknier, 89 Pa. Superior Ct. 454, and Com. v. Beattie, 93 Pa. Superior Ct. 404. Both defendants were present from the beginning to the end of the transaction; the assaults which led to the rapes began when John Lutz and Gierot went up to the other automobile while Jamesi Lutz waited at the wheel of his car. The testimony was merely a narrative of what was done from that point until the assaults upon the girls had been made.

The defendant contends that section 25 of the Act of March 31, 1860, P. L. 427, 436, renders the trial of two indictments at the same time illegal. This section provides: “In all cases of felony, the prisoner shall be arraigned, and where any person, on being so arraigned, shall plead not guilty, every such person shall be deemed and taken to put himself upon the inquest or country for trial, without any question being asked of him, how he will be tried, and the inquest shall be charged only to inquire whether he be guilty or not guilty of the crime charged against him, and no more. And wherever a person shall be indicted for treason or felony, the jury empaneled to try such person shall not be charged to inquire concerning his lands, tenements or goods, or whether he fled for such treason or felony.” In Com. v. Hall, 291 Pa. 341, 350, the Supreme Court says of this section that it “was enacted to dispense with useless common-law forms that prevailed as late as 1860 in some of our criminal courts (Report on the Penal Code, 43); it refers only to cases of felony, and, by subsequent amendments (see section 4, Act of Jan. 7, 1867, P. L. 1369, 1371, and section 1, Act of May 15, 1895, P. L. 71), the necessity for arraignment even in such cases was abolished, except on indictments charging murder.” The court goes on to point out that that section dealt with the arraignment of prisoners, and ordains for one who pleads not guilty a trial before a jury. There is nothing in the section or its amendment which prohibits the trial of two or more indictments together.

We can discover no merit in the defendants’ contention.

And now, to wit, Oct. 14, 1929, the several rules for new trials are accordingly discharged. From Charles K. Derr, Reading, Pa.


author: Patterson, P. J.,

text:
    Burger, to use, v. Freedom Township.

      Robert W. Smith, for plaintiff; B. F. Warfel, for defendant.
    Dec. 17, 1929.
   Patterson, P. J.,

— Miles Snowberger, Archie Claar, Supervisors, and Ross A. Burket and G. M. Shaefer, Auditors, of the Township of Freedom, Blair County, Pennsylvania, on Oct. 29, 1928, filed their petition for a rule upon the First National Bank of Claysburg to show cause why judgment entered to No. 399, June Term, 1928, upon which a mandamus execution to No. 148, October Term, 1928, had issued, should not be opened and the petitioners, representing the Township of Freedom, allowed to defend, and answer thereto.

On June 14, 1924, the defendant township, by its supervisors, L. A. Shaw, H. R. Benton and Henry Shaw, executed a judgment note in the sum of $2000, payable in one year, to H. C. Burger. The note was assigned by H. C. Burger to the First National Bank of Claysburg as collateral security for the payment of a loan made to Burger. The petition avers that the said H. C. Burger was, at the time he received said note, tax collector for the Township of Freedom, and that the note was given him for the purpose of raising money for the payment of orders which had been previously issued by road supervisors, and that the said orders were never returned to the township auditors for cancellation. And the petition further avers:

“(a) That the note in question was authorized at a special meeting and that the minutes do not show for what purpose the special meeting was called.

“(b) That at the time the resolution was passed by the board of supervisors for the borrowing of $2000.00 for the payment of township indebtedness, the indebtedness was already in excess of the two per centum of the assessed valuation of the taxable property.

“(c) That at the time the resolution was passed authorizing the execution of the obligation, there was in the hands of the treasurer the sum of $2528.60, and, therefore, no occasion for borrowing or creating an additional debt.

“(d) That it was the understanding of the township auditors that certain orders which the said Burger claimed to have in his possession would be turned over to the auditors for cancellation, which was not done.”

An amended petition was later filed, setting forth that the said note had endorsed thereon several credits which reduced the amount now due and owing to the sum of $900, with interest from October, 1928.

The First National Bank of Claysburg and H. C. Burger filed an answer to this rule, in which they deny all of the averments contained in said petition and state that the credits endorsed on said obligation are there through error on the part of the plaintiff bank. That the same should have been credited to the individual obligation of H. C. Burger and not to the collateral note of the township.

The testimony of D. Emmert Brumbaugh, cashier of said bank, and H. C. Burger clearly establishes the fact that the payments by H. C. Burger to the bank should have been credited to the individual note of Burger. This testimony is not successfully refuted. The financial statement of the township for the year 1924, recorded in Quarter Sessions Docket “Y,” at page 467, shows, amongst the receipts for that year, the following item: “Received from H. C. Burger — note—Claysburg Bank, $2000.00.” Said statement schedules the same item as one of its liabilities for the year 1924, and at the close of the statement is the following certificate signed by the auditors: “We find the above obligations to be true and correct. Signed: Ross A. Burket, A. R. Ilazenstab, G. M. Shaefer, auditors.” And, again, for the year 1925 the same auditors filed their financial statement in the Quarter Sessions Docket “Z,” at page 178, with the following items scheduled: “Note, H. C. Burger for orders, orders collateral, $2000.00.” This petition, therefore, signed by Messrs. Shaefer and Burket, setting forth the alleged irregularities and illegal actions of the board of supervisors, is in direct contradiction to the report which they as auditors filed at the close of the years 1924 and 1925. This proceeding, instituted at the close of the year 1928, more than four years after the said note was executed, is evidently for the purpose of calling upon the court to declare irregular and illegal transactions which two of the petitioners, as auditors of the township, examined and approved four years before. The office of township auditor is created for the purpose of examining and passing upon the accounts of the township officers. And if the auditors make any mistakes, any citizen of the township has a right to, file exceptions to said report within a limited period. In the present case we have the very matters now complained of approved by the auditors and no exceptions to their action by any citizen of the township.

In the case of Georges Township v. Union Trust Co., 293 Pa. 364, 374, it is held: “Whether the loan is within current revenues or in the constitutional class, the validity of the loan is not denied in the pleadings, and the presumption would be that the township supervisors, as public officers, had regularly performed their official duty in issuing the notes: Vernon Township v. United Natural Gas Co., 256 Pa. 435; Jefferson County v. Rose Township, 283 Pa. 126, 130. The court may well rest on this presumption and until it is overthrown the notes stood as valid obligations, and judgment for this reason could not be entered against defendant.”

And in the same opinion, Mr. Justice Kephart so well states the law applicable to the matter now under consideration (page 377): “Another question should be touched on, though not specifically raised, but we will not decide it. The code provides for auditors who audit the accounts of these officers. The notes, or some of them, have been in existence for years. If there has been an illegal act or irregularity, why was it not determined long ago? The law adopts its own procedure to safeguard the funds of a municipality through surcharge of the officer responsible, with recourse to his bondsman.”

And in the same opinion (page 376): “Moreover, in this case the township authorities, when the books were balanced, recognized the notes as being a sufficient order, accepted, approved and ratified them. Where a debt has been lawfully contracted for and an imperfect order or direction for payment given, the supervisors may later ratify the act of payment.”

In Scott et al. v. Strawn, 85 Pa. 471, it is held: “A collector of bounty tax, appointed by the board of school directors, offered to settle his accounts with them. They refused to allow him to do so and referred him to the township auditors, by whom his accounts were settled in the presence of three of the board and a settlement duly made and recorded, after which the auditors destroyed his vouchers. No action was taken by the board for five years. In a suit on the collector’s bond: Held, that the auditors were not the proper tribunal and that the 14th section of the Act of March 25, 1864, P. L. 90, and the 1st section of the Act of April 11, 1866, P. L. 778, gave them no power to audit the accounts.

“Held, further, however, that the board was estopped by its conduct and long acquiescence from objecting to the record of the settlement as at least prima facie evidence of the facts it contained, and that it should have been received.”

And in Com., to use, v. Gruver et al., 13 Pa. Superior Ct. 553, it is held: “The township auditors’ settlement of the tax collector’s accounts is but one step in fixing the liability of the collector, but when it is not appealed from to the court of common pleas as provided by law, he elected to make that step a final one and to be bound by it, and the appellate court cannot review it on appeal from a judgment entered on the surety’s bond.”

We are satisfied that the petition is without merit, and there is no act of assembly or decision by our courts in support of the averments and the testimony of the petitioners. If the law permitted such a proceeding as the present one, there would be no end of controversy, and litigation of the accounts of municipal authorities would arise and continue indefinitely. The rule is, therefore, discharged, at the cost of the petitioners.


author: Koch, P. J.,

text:
    Yadusky et al. v. Shugars et al., Administrators.

      H. 0. Bechtel and B. V. O’Hare, for plaintiffs.

      A. L. Shay and C. E. Berger, for defendants.
    Jan. 6, 1930.
   Koch, P. J.,

— The question arising in this case is whether a certain contract is joint or several, or joint and several. The facts are all gathered from the pleadings, no other testimony having been offered. William B. Shugars died intestate on March 8, 1925.

On Oct. 15, 1920, William B. Shugars, Leopold E. Schimpf and F. J. Heilreigel, as parties of the first part, entered into written articles of agreement with the plaintiffs in this case to sell to them 395 shares of the capital stock of the Liberty Brewing Company and also to sell 100 shares of said stock to said Liberty Brewing Company, the said 495 shares being all of the outstanding capital stock of said company. The purchase prices amounted to $41,000, of which $21,000 was paid in cash, and notes were given to said William B. Shugars, trustee, for the balance.

When the said stock was sold, the plaintiffs in this case desired the company to be free from all debts excepting two mortgages. So it was, inter alia, stipulated in the said written articles of agreement as follows:

“The parties of the first part agree that other than the first mortgage now owned by the Miners Realty Company and the second mortgage bonds outstanding, there are no debts owing by the Liberty Brewing Company, and if any other debts be found that have been incurred by the Liberty Brewing Company prior to October 10, 1920, that they, the parties of the first part, agree to pay the same and be personally liable for the same.

“The parties of the first part agree that they are and will be personally liable for all things done in connection with the operation or management of the business of the Liberty Brewing Company prior to the date of this agreement.”

The last stipulation in said articles of agreement reads as follows:

“And for the faithful performance of the covenants of this agreement the parties hereto bind themselves, their heirs, executors and administrators.”

Some time after the sale of said 495 shares of said capital stock was so effected, the United States Government laid an additional assessment on the said brewing company for income and excess profit taxes for the years 1919 and 1920, in the aggregate amounting to $21,250.18. Said taxes for the year 1919 were $17,151, and for the year 1920, $3999.18. The plaintiffs in this case being duly notified of the said additional assessments notified the defendant and demanded payment of said taxes, but payment was not made by the defendant, and the United States Government issued its warrant of distraint and levied upon the property of the Liberty Brewing Company. And the plaintiffs aver that they were compelled to pay the said taxes. They have, therefore, brought this suit to recover said $21,250.18, together with interest, from the estate of the said William B. Shugars, deceased. As the taxes were paid in partial amounts, interest is claimed on $5000 from May 15, 1925; on another $5000 from Sept. 23, 1925; on the third $5000 from Dec. 1, 1925, and on $6250.18 from March 24, 1926. So it appears that the said William B. Shugars died more than two months before the plaintiffs made the first partial payment of said taxes to the United States Government. This suit was brought on Oct. 4, 1926.

Can this suit against the estate of Shugars alone he maintained?

When the trial was had the jury was directed to render a verdict for the defendants, and we think we must let the verdict stand.

“It is a general presumption of law, when two or more persons undertake an obligation, that they undertake jointly. . . . In all written contracts, therefore, whether the liability incurred is joint or several, or joint and several, is to be determined by looking at the words of the instruments, and at them alone. The subject-matter of the contract, and the interests of the parties assuming a liability, have nothing to do with the question. . . . And the language of severalty or joinder is the test. The covenant is always joint, unless declared to be otherwise [italics ours]: Enys v. Donnithorne, 2 Burrows, 1190; Philips v. Bonsall, 2 Binn. 138:” Philadelphia v. Reeves and Cabot, 48 Pa. 472; Pittsley v. King, 206 Pa. 193.

So far as the contract to sell all the outstanding capital stock of the brewing company was concerned, the contract was certainly only joint, and was so performed, and the buyers of the stock had a right to expect the company of its issuance to be free from all the obligations incurred by the company prior to Oct. 10, 1920, excepting the mortgages referred to in the written articles of agreement. For all other obligations of the company than said mortgages there was to be no corporate liability; that liability was to pass to and upon the sellers of the stock. In other words, such obligations became personal instead of corporate, so far as the persons to the contract were concerned. That is to say, the parties of the first part made themselves personally liable for them. But that does not mean that they, therefore, made themselves severally liable. They were selling the stock together and they were to be liable together for the company’s debts, excepting said mortgages. The last stipulation in the contract is that “the parties hereto bind themselves, their heirs, executors and administrators.” That is, the two parties, the two groups of men, so bind themselves as groups, their heirs, executors and administrators — the first group to sell stock and pay certain debts, the second group to buy the stock and pay for it.

The plaintiffs insist that Besore et al. v. Potter, 12 S. & R. 154, sustains their contention. But we cannot agree with them. That case turned upon the language of a penal bill which concluded thus: “For the true payment whereof, we do bind ourselves, our heirs, executors, administrator, and every of them, unto the said Frederick Nicodemus, his executors, administrators and assigns, in the penal sum of two thousand dollars money aforesaid.” And the Supreme Court held that the penal bill was joint and several, because of the words “every of them,” saying: “All of them would have been joint, every of them is several; and the natural construction, the common signification of these words would be, that the respective heirs of the obligors were intended to be bound.” If the agreement now before us said “the parties hereto bind themselves severally,” the obligation would be joint and several.

In Wampler v. Shissler, 1 W. & S. 365, 368, a recognizance binding three persons in a certain sum “to be levied of their goods and chattels, lands and tenements, respectively,” was held to be joint and several, because the word “respectively” was “equivalent to a provision that the amount should be levied of each.”

In Geddis v. Hawk, Executor, 10 S. & R. 33, in the obligation, the concluding words were “we bind ourselves, and each of our heirs, executors and administrators firmly, &c.,” and the word “each” made the obligation joint and several.

We must not overlook the fact that here the defendants are administrators, and the obligation does not severally bind the administrators of each of the parties of the first part. Nor do the words that, “the parties of the first part agree to pay the same and be personally liable for the same” help the plaintiff’s case any. Shugars is dead, so he cannot be personally liable, because he is no longer in being, and he did not bind himself and his heirs, executors and administrators each personally.

Livingstone v. Aaronson, 48 Pa. C. C. Reps. 54, was a suit for rent, the lease respecting the payment of which said: “The parties of the second part do hereby covenant, etc., that they will yearly and every year during the term, etc., pay or cause to be paid unto the said party of the first part, etc., the said yearly rent reserved, etc., on the days and in the manner prescribed, etc.,” and Kunkel, P. J., held that the contract was joint and not several and that the suit against one alone could not be maintained.

“In Sheppard’s Touchstone, page 375, it is said: “If two, three, or more bind themselves in an obligation thus, obligamos nos, and say no more, the obligation is and shall be taken to be joint only, and not several.’ In other words, the presumption of the law is that when two or more enter into a contract or an obligation, without adding language disclosing a different interpretation the undertaking is a joint and not a several one. This rule has been uniformly recognized and adhered to in all our cases:” Morrison v. American Surety Co., 224 Pa. 41.

Our conclusion is that the obligation was that of all and not of Shugars or of either of the other two singly and alone, and that this suit against the estate of Shugars cannot be maintained.

And now, Jan. 6, 1930, the motion in arrest of judgment and for a new trial is overruled, and the prothonotary is directed to enter judgment in the defendant’s favor upon payment of the jury fee.

From M. M. Burke, Shenandoah, Pa.


author: Potter, P. J.,

text:
    Kessler v. Sunbury & Selinsgrove Railway Company.

      A. F. Gilbert and C. M. Clements, for application.

      George B. Reimensnyder and A. Reed Hayes, contra.
    Jan. 6, 1930.
   Potter, P. J.,

— The Sunbury & Selinsgrove Railway Company is a corporation which owns and operates a trolley line between Sunbury and Selinsgrove, a distance of approximately five miles, and has done so for some years back. They cross the Susquehanna River at Sunbury by using the bridge of The Sunbury Bridge Company, for which they pay, or have contracted to pay, the monthly sum of $83.33 as toll or rental. This corporation also owns and operates at the proper season of the year Rolling Green Park, which is situate along its line about midway between Sunbury and Selinsgrove, and is the best paying asset of the company. This Park is open probably three or four months, perhaps slightly more, in each summer, and we think is a money-maker if its receipts are properly and judiciously handled and husbanded. During the park season, cars are operated on this line every fifteen or twenty minutes during the day, with a less number at night after park hours, and all of them are usually well filled with passengers, the fare being 14 cents for the full trip, or 7 cents to the Park from either terminus.

Notwithstanding the heavy travel on this road, and the large patronage of the Park, this corporation, for some reason, of which we have our well-founded opinion, has continually been pressed for funds, and of late has not been able to pay its current bills. A reorganization has lately been effected, which has brought its affairs under the jurisdiction of this court, which, up to four or five months ago, we did not have. So it was turned over to us full of debts, with creditors clamoring for their money, and we are asked to make whole cloth out of rags and tatters. About the first notable thing that came under our official observation was a petition for the appointment of receivers. The appraised value of the assets is fixed at $362,585.26. The liabilities are fixed at $196,468.22. Just why receivers are necessary, after more mature thought, we are at a loss to know, unless it was to prevent creditors from pressing their claims by suit. Anyhow, on Sept. 3, 1929, we appointed two temporary receivers, which appointment, not long thereafter, we made permanent, George D. Witmer, of Selinsgrove, and William H. Greenough, of Sunbury, being the receivers.

On Oct. 21, 1929, these receivers presented to us their petition, praying for an order for the issuance of receivers’ certificates in the sum of $30,000 in order to pay the following liabilities:

To the Pennsylvania Power and Light Co. for a converter. $1,924.37
To the Pennsylvania Power and Light Co. for electric current ............................................... 1,524.70
To J. G. Brill Co., balance due on three cars............. 8,864.40
Balance on purchase of cars............................ 9,000.00
For corporate taxes due the Commonwealth.............. 1,200.00
Toll due Sunbury Bridge Co. to Aug. 1,1929............. 575.00
Taxes due the City of Sunbury......................... 1,050.00
For enclosing the pavilion in Park (estimated).......... 4,000.00
Expenses of litigation in Northumberland and Snyder
Counties .......................................... 1,000.00
Premium on receivers’ bonds and appraisers’ fees........ 500.00
Expenses of receivers and their counsel................. 1,500.00
Interest on bonds to Jan. 1, 1930........................ 2,835.00
Total.......................................$33,972.87
Item of enclosing the pavilion was withdrawn............ 4,000.00
Net balance for which certificates are asked.............$29,972.87

We are asked to permit the issuance of receivers’ certificates in the amount of $30,000, they to supersede the lien of the bondholders on the property of this corporation, and they to be a first lien. On Oct. 19, 1'929, when this matter first came before us, acting under a misapprehension of the facts, we made such an order. Since that time we have learned that the bondholders had no notice of the application; therefore, they had no opportunity to object to it. They had no day in court. We then set Dec. 9,1929, at two o’clock P. M., as the time we would hear the application after all interested parties had notice. On that day vigorous opposition was made by the bondholders and persons interested. The hearing was continued to Dec. 20, 1929, when more testimony was taken and argument made. At the hearing of Dee. 9, 1929, it was stated to us that these receivers were in the direst necessity of funds to pay the interest to the bondholders, and that some of them had threatened to bring proceedings on the mortgage if their interest was not paid by Jan. 1, 1930. In view of these statements so made, we authorized the issuance of certificates in the sum of $8000 in order to tide over this critical state of affairs till we could finally dispose of the application. At the same time, we were told that other of the claimants, whose claims we have hereinafter allowed, were pressing for payment, so we made a short order for the issuance of certificates without any calculation at bar.

The order of Oct. 19, 1929, for the issuance of certificates in the sum of $30,000, since we have become better acquainted with the facts, is hereby avoided with the same force and effect as if it had not been made.

In disposing of this application, we are mindful of the fact that these bondholders bought their bonds feeling that they had a first lien on the property, which they have, exclusive of taxes. If certificates are issued, their lien will be impaired to the extent of the amount, wherefore we think we should be very guarded in allowing the issuance of them, and only in such amount as will enable this corporation to operate its business. We might add that by the issuance of the certificates, and the paying of these claims, with the exception of tax claims, these common creditors would be given priority over the bondholders.

In the case of Rutherford v. Railroad Co., 178 Pa. 38, receivers’ certificates were allowed to finish an unfinished railroad. The application for them was favored by the president and by 491 out of 510 bondholders. The appellate court say: “Our first impression was that the learned judge had gone too far in authorizing the issuance of receiver’s certificates for the completion of an unfinished railroad, that to do so would be establishing a dangerous precedent, etc. Ordinarily, this would undoubtedly be so, and we would not hesitate to express our disapprobation of such proceedings; but, upon fuller consideration of the special and somewhat peculiar facts and circumstances of this case, we are not prepared to say that he was so clearly in error that the proceedings should be reversed. We are rather inclined to think that to sustain the contentions of the appellants would be prejudicial to all parties concerned. In matters that rest so largely in the sound discretion of the trial court as do cases of this kind, we should not interfere unless there appears to have been manifest abuse of discretion.” This case also decides that the court has the power to authorize its receiver to raise money necessary for the preservation and completion of a railroad and to make the same chargeable as a lien thereon and to allow prior claims for materials and labor for the six months preceding the appointment of the receivers: Union Trust Co. v. Illinois Midland Ry. Co., 117 U. S. 434.

Receivers’ certificates are authorized only when the expenditures contemplated are absolutely necessary to prevent the property from destruction or serious injury: Cort’s Application, 7 Dist. R. 536.

Many more cases have been cited to us mostly in opposition to the issuance of certificates, which, under our view of the case, we need not herein refer to, The general rule seems to warrant no issue of certificates except to preserve the property of the corporation.

When the receivers were appointed, they inherited, so to speak, the list of obligations hereinbefore enumerated. And we want to help them in a lawful manner to pay them. Now, taking up the items seriatim, as petitioned for:

1. The item of $1524.70, current power for August, 1929, which includes the penalty for non-payment when due. This is an unpaid bill which should have been paid, and we think it could have been had the funds been properly managed. It is a bill incident to the operation of the railway line and the Park. While it may be true that the Pennsylvania Power and Light Company could not refuse to continue electrical current because of its non-payment, nevertheless it is an outstanding bill contracted incident to running expenses. In the face of some of the appellate decisions, we must remark that this power company could not be expected to furnish power indefinitely without payment. We will allow this bill.

2. Bill of the Pennsylvania Power and Light Company for balance due on converter of $1924.37. Under the contract under which this converter was bought, a certain amount was to be paid at certain stated times. These payments have so far been met as they fell due, and we fail to see why they cannot be met in the future and so continue till the bill is fully paid. The claimant cannot take the converter back of its own volition. The contract under which it was obtained is not a lease or bailment. If anything, it is a conditional sale, a note having been given for it. We cannot allow this item.

3. Bill of J. G. Brill Company for balance due on three trolley cars of $8864.40. This is also a conditional sale and not a lease or bailment, wherefore the cars cannot be taken by the claimant. Payments on the price of these cars have been heretofore made, and they can be made in the future. So we see no legal reason for allowing this item and to that amount impairing the security of the bondholders. This item is not allowed.

4. Balance due on purchase price for electric railway cars, $9000. This sum also springs from the purchase price of the three-mentioned trolley cars, their total cost having been $35,457.60, or $11,819.20 for each car. The cost of these three cars has been reduced to $17,864.40 by payments made. It seems that Mr. William H. Greenough, one of the now receivers, some few years ago, advanced this sum of $9000 to pay on these cars, and he now holds this claim against this corporation. No doubt he made this advancement out of the goodness of his heart, but, under present conditions relative to this company, he is only a common creditor, whose claim cannot be paid by funds realized from receivers’ certificates, and, we are sorry to say, must, in the face of this opposition, take his chances with others. We cannot allow this claim.

5. Corporate taxes due the Commonwealth, $1200. Some authorities lean toward the disallowance of this item. This sum is a prior lien against the property of this corporation. If it stopped there, we would not allow it. But, being overdue, the Commonwealth is now charging interest at the rate of 12 per cent, as a penalty for non-payment. Receivers’ certificates bear 6 per cent., or, by paying it, this corporation would gain 6 per cent., or $72 per annum for the bondholders. For this reason, we will allow the claim.

6. Bill for toll due the Sunbury Bridge Company to Aug. 1, 1929, of $575. While the contract for the use of this bridge does not provide for a stoppage of its use for non-payment of the toll, and as a public service corporation the claimant might not be permitted to do so, yet the fact remains that this debt was contracted in the operation of the cars and this line within six months preceding the appointment of receivers. This also applies to the electric current bill of $1524.70. See Rutherford v. Railroad Co., 178 Pa. 38, supra. We will allow this item.

7. Bill for taxes due the City of Sunbury, $1050. We think this item should be allowed. While it is true municipal taxes are a lien on the property of this corporation prior to that of the bondholders, yet we think these taxes should be paid, as should those of all corporations and individuals, as emblematic of good citizenship in paying for the protection afforded by the different branches of government under which we live. The payment of them may prevent the embarrassment of probable levy with additional costs. And the law also favors the payment of taxes out of receivers’ certificates. We will allow this item.

8. Expenses of conducting litigation in Northumberland and Snyder Counties, $1000. At best, this can be only an estimate. We have no bills for attorneys’ services or other costs or expenses submitted. We think this sum is too high. Of course, we are told by counsel that this is to be applied to retaining fees, surveys, maps, photographs, expert witnesses and the like, and that without retaining fees counsel cannot be procured. If this sum, or two-thirds of it, is to be applied as retaining fees, we wonder what the total counsel fees will be. On this item we will allow $500, and when the lawsuits are ended, we want a bill for fees submitted to us, with a description of the work done, which may be refused or affirmed, according to its amount. We want one fact to be plainly understood, which is, that this corporation, while under our jurisdiction, is not going to be a “free for all grab game.” We will allow $500 on this item and consider it well paid for.

9. For premiums on receivers’ bonds and appraisers’ fees, $500. This should be itemized, showing us the amount of the appraisers’ fees and the premium of the bonds. However, no objection was made to this item, and we will allow it.

10. Expenses of receivers and their counsel, $1500. It is with great reluctance that we comment on this item, because we think it is too large. These receivers were appointed on Sept. 3, 1929, and the petition for receivers’ certificates were filed on Oct. 19th, or for a period of seven weeks the sum of $1500 is asked as compensation for the receivers and their counsel, which would amount to $214.28 per week or $12,142.56 per year. This would mean a yearly income to each of $4047.52. Entirely too much. This nearly-wrecked corporation cannot stand for compensation like this if it is ever to be gotten on its feet again. We want these receivers and their counsel to be compensated for their time, trouble and responsibility, and we think each should receive a yearly salary, payable monthly or quarterly, but we want to know how much that annual salary is to be. If it is fixed too high, we will not approve it. We do not want salaries paid as they were before, as we have been told. We are not attempting to fix a standard for salaries. But in this instance we will allow the sum of $600 tentatively for the months of September and October, 1929, which would be $100 per month for each of the three.

11. Interest on bonds due Jan. 1, 1930, $2835. We were told in open court that if this interest was not paid when due, some of the bondholders threatened proceedings on the mortgage to collect their interest. They would be very foolish if they did, thus destroying the security of their investments. We cannot believe any of them would attempt thus to sacrifice his security, which would surely occur if this line of proceeding was followed out. Anyhow, nothing of this kind can occur before April 1, 1930, and this court will be here and will also have something to say regarding such proceedings. This item at this time is refused.

This disposes of the list of items submitted to us for the payment of which receivers’ certificates have been asked. As we have revised this list, we are willing that certificates be issued in the sum of $6000, hereby amending our order of Dec. 9, 1929. Our correct list as we have allowed the items sums up $5949.70.

Once again we want to say it is our aim to rebuild this corporation, and we will take no steps which, in our judgment, will be a detriment towards the accomplishment of this end. The item of $4000 for enclosing the pavilion in the Park for winter service has been withdrawn by counsel, and is not herein considered.

Findings of fact.

1. On Sept. 3, 1929, George D. Witmer and William H. Greenough were appointed receivers of the Sunbury & Selinsgrove Railway Company, which is a corporation.

2. On Oct. 19, 1929, the said receivers presented their petition, asking for the issuance of receivers’ certificates in the sum of $30,000.

3. From the appraisement filed, the assets of this corporation amount to $362,585.26, and the liabilities to $196,478.22.

4. From the appraisement filed, this corporation is not insolvent.

5. As to the claim of the Pennsylvania Power and Light Company of $1924.37, for balance due on electric converter, there is no testimony or exhibit that discloses this to have been a bailment or lease, or that the claimant could repossess the same.

6. As to the item of $9000, car trust notes for street cars, there is no testimony or exhibit that discloses any bailment or lease. This money is due William H. Greenough for money advanced by him in part payment for cars long prior to the appointment of receivers.

7. As to the bill of J. G. Brill Company of $8864.40 for balance due on purchase price of three cars, there is no evidence tending to show the contract to be a bailment or lease, or that the claimant could repossess them.

8. As to the item of $575 for tolls due the Sunbury Bridge Company, there is no evidence showing that this company has threatened to discontinue the service of the bridge if the said toll was not paid.

9. As to the claim of the Commonwealth of $1200 for taxes, there is evidence of demand for payment by the Commonwealth by bill submitted. There is no evidence that the Commonwealth has threatened to collect the amount by legal process.

10. As to the claim of the City of Sunbury for taxes, $1050, there is evidence of demand made for payment by bill submitted. There is no evidence of suit threatened for collection.

11. As to the item of $1000 for expenses in conducting litigation in Northumberland and in Snyder Counties, there is no evidence of the sum needed, nor what service was or is to be rendered, nor what such service is approximately worth.

12. As to the item of $1500 for expenses of receivers and their counsel, there is no evidence as to what service any of them rendered, or are to render, nor what their service is worth.

13. As to the item of $2835 for interest on bonds due Jan. 30, 1930, the bonds draw 5 per cent, interest, while receivers’ certificates! draw 6 per cent, interest. There is no evidence of pressing need for this item at this time.

Conclusions of law.

1. As to the item of $1924.37 of the Pennsylvania Power and Light Company for an electric converter, this is a conditional sale and not a bailment or lease, and cannot be allowed.

2. As to the item of $8864.40 due J. G. Brill Company, this is also a conditional sale, not a bailment or lease, cannot be repossessed by the claimant, and cannot be allowed.

3. As to the item of $9000 due on cars, this is a common claim due William H. Greenough, was paid by him to J. G. Brill Company, occurred more than six months before receivers were appointed, and cannot be allowed.

4. As to the item of $575 due the Sunbury Bridge Company, there is evidence of a contract with this company and the Sunbury & Selinsgrove Railway Company. The debt was contracted within six months before the appointment of receivers, and, we think, is a valid claim for payment from funds derived from receivers’ certificates.

5. As to the item of $1200 due the Commonwealth for taxes, this is such a claim as' can be paid from the proceeds of receivers’ certificates.

6. As to the item of $1050 for taxes due the City of Sunbury, it can be included as a claim to be paid out of the proceeds of the sale of receivers’ certificates.

7. As to the item of $1000 for litigation, in the absence of the proper degree of proof as to services to be performed, or such as have been performed, we do not think the full amount of this item can be allowed.

8. As to the item of $1500 for receivers and their counsel, in the absence of proof of the service rendered or its value, we do not think this item can be allowed in full.

9. There is no evidence before us that will justify the issue of receivers’ certificates in payment of the item of $2835, in payment of interest on bonds.

10. Receivers are not entitled to certificates until a detailed statement of the sum needed is made, and the purpose of it with clear proof made to the court and the necessity therefor. Such certificates are not debts of the company, but those of the receivers, backed by the pledged faith of the court that the property on which they are made a charge is in the possession of the court, and that it will provide for the payment of such certificates before the property or the proceeds of it shall pass out of its control. They should, therefore, be issued with the utmost circumspection and never in excess of the present urgent need.

11. The question of the priority of receivers’ certificates and loans over existing mortgage liens has not very often been a matter of litigation, because in almost all instances in which the courts have authorized receivers to borrow money and make their obligations a first lien upon the property, the mortgagors have themselves asked for the orders for these purposes in advance, or have expressly assented to the making of them, and, of course, they are in such cases precluded from afterward claiming any priority over the lien thus created.

12. The decree of Oct. 19, 1929, was made under a misapprehension of the facts, was made without notice to the trustee or to the bondholders, without the proper hearing, and is avoided.

13. The petition for the issuance of certificates does not set forth that the expenditures contemplated are absolutely necessary to preserve the property from destruction or serious injury. We think it should do so.

14. An order directing the issue of certificates which are to be a first lien on the property cannot be made except upon an investigation and hearing of an application showing sufficient facts fully to advise the court of the propriety of such issue.

15. Receivers’ certificates are only issued for the purpose of paying the incidental and necessary expenses for carrying forward the business of the corporation, such as supplies, rentals and equipment necessary for the operation of the road, as well as to preserve and conserve the property, so that it may continue a going concern.

16. It is the duty of the court to preserve liens rather than to displace them by subsequent encumbrances.

17. If the receivers’ certificates are authorized by this court to the extent of $30,000, it will impair the lien of the bondholders, which would be a breach of faith with those who purchased the bonds at full value.

18. That to make certain improvements for the purpose of increasing income is a hazardous proposition, nor has any definite plan been laid before the court for it. The court should be properly advised of the facts on which to base a decree for issuance of $30,000 or less of receivers’ certificates.

19. “The decree of the court, under date of Nov. 11, 1929, will have to be withdrawn, as it is not based upon any proper proceeding as indicated hereinbefore, under paragraph fourteen, and for the further reason hereinbefore set forth) with reference to proper and sufficient evidence to substantiate the right of the receivers to have certificates issued upon a proper basis, and proper exercise of judicial discretion of the court. Receivers’ certificates cannot be issued in a lump sum without indicating what items are to be paid thereout, and especially is this true if they are to become prior liens to that of the first mortgage, securing bonds issued for value.” Note. We made no decree under date of Nov. 11, 1929. If this request refers to our order of Oct. 19, 1929, we heartily concur with this conclusion of law as framed by counsel.

20. The authority of the court is not altogether discretionary; judicial discretion is limited by settled principles of equity.

21. The appointment of receivers vests in the court no absolute control over the property, and no general authority to displace vested contract liens. It is the exception and not the rule that such priority of liens can be displaced.

22. The principle upon which receivers’ certificates are issued is based on the necessity of the issuing of the same for the operation of the road and for such expenditures as are necessary to preserve the property from destruction or serious injury.

23. Even where a referee found that the workmen were riotous and that but for the issuing of the certificates the property would probably have been destroyed or seriously injured, it was held that neither the facts shown in the application nor the referee’s finding justified the postponement of the mortgage lien.

24. When the court authorizes the receiver to borrow money and issue certificates, which are made a charge on the property, the holders of such certificates take them subject to the rights of those having prior liens, and who had not, but should have had, notice to appear in court, and when such appear in court they are entitled to contest the necessity, validity, effect and amount of such certificates.

25. The class of preferred debts to be so paid include taxes on property, wages of officers and employees of every grade employed in operating the road; the cost of materials and supplies furnished which are necessary to put the road and its rolling stock in a safe condition for the transportation of persons and property.

26. Generally speaking, the power and light company would not be permitted to cut off power from the railroad company because of unpaid bills. However, there are exceptions to this rule.

And now, to wit, Jan. 6, 1929, upon due consideration of the foregoing case, it is ordered, adjudged and decreed as follows:

The receivers of the Sunbury & Selinsgrove Railway Company are hereby authorized and empowered to issue receivers’ certificates in a sum not to exceed $6000, in payment of the following debts due from the said company, to wit:

Pennsylvania Power and Light Company for current up to and including the month of August, 1929...............$1524.70
For corporate taxes overdue to the Commonwealth........ 1200.00
For toll due the Sunbury Bridge Company to Aug. 1, 1929.. 575.00
For overdue taxes due the City of Sunbury............... 1050.00
For expenses in conducting litigation in two counties...... 500.00
For premiums on receivers’ bonds and appraisers’ fees---- 500.00
For receivers’ and counsel’s compensation................ 500.00
Total........................................$5949.70

These said certificates to bear interest at a rate not exceeding 6 per cent., and to be a lien upon the personal property and earnings of the said Sunbury & Selinsgrove Railway Company in the possession of the receivers prior in right to all other claims or liens thereon, and to be first payable thereout. That the order of this court made on Oct. 19, 1929, is hereby vacated and set aside, and the order of this court made on. Dec. 9, 1929, is amended so as to conform with this decree. This decree is entered nisi, of the filing of which the prothonotary is directed to give immediate notice to all counsel concerned, with liberty to file exceptions thereto, as prescribed by the equity rules.

NOTE. — Decree sustained on exceptions.


text:
    Milliron v. Jefferson County.

      Charles J. Margiotti, W. M. Gillespie, Sebastian Pugliese and Edward Friedman, for plaintiff.

      Wilson & Wilson, County Solicitors, for defendant.
    Dec. 20, 1929.
   Harvry, P. J., 18th judicial district, specially presiding,

Merle C. Milliron, the plaintiff, is owner of a tract of land, containing about 135 acres, in Perry Township, in Jefferson County, Pennsylvania. In the year 1925 the State Highway Department and those acting under it entered in and upon the said tract of land of plaintiff and relocated the public road through and over said land, and during the same year the construction of said road or highway was proceeded with to completion. Under the law, it is the duty of the county commissioners to provide or arrange for the right of way of highways constructed as this was under supervision of the State Highway Department.

No releases or amicable agreements were entered into between the plaintiff and the county commissioners covering damages, if any, by reason of the taking of land and construction of the roadway in, over and across the land of plaintiff. Proceedings to assess damages for the taking of land and construction of said roadway were begun by plaintiff against the Commissioners of Jefferson County at No. 64, April Sessions, 1926, by petition filed May 10, 1926, wherein were set out the damages alleged to have been occasioned by reason of the relocation of roadway, the taking of land, and damages sustained generally by the plaintiff connected with the construction of the roadway. Viewers were appointed to view the premises and conclude upon the advantages and disadvantages and damages, if any, and make report to the court. This was done. The county commissioners appealed from the award of the viewers. The appeal was entered at No. 154, October Term, 1926, C. P. Jefferson County, Penna. Upon trial of the matter, a verdict was brought in by the jury worded as follows: “And now, to wit, Sept. 13, 1928, we, the jurors empaneled in the above-entitled case, find damage to the amount of Four hundred dollars ($400.00) and interest of Forty-nine dollars ($49.00) damage to crops and land by reason of the State of Pennsylvania appropriating a portion of his land for State Highway.” Signed J. C. Jordan, Foreman. The verdict recorded upon the County Records, C. D. 91, page 264, is as follows:

Milliron v. Jefferson County.
No. 154, Oct. Term, 1926.
September 13, 1928, Jury find for the Plaintiff in the sum of $449.00.”

Motions for a new trial were filed by the plaintiff, in substance, as follows:

(a) The verdict is against the weight of the evidence.

Additional reasons filed Oct. 23, 1928:

1. That the jury empaneled in the case did not decide the same upon the evidence and the law, but the members thereof were unduly influenced and prejudiced by one of their members, to wit, Mrs. Effie Ditty.

2. That the said Mrs. Effie Ditty, at a noon recess, before the charge of the court, stated in substance that she was against the plaintiff, and was not in favor of awarding him more than $400, which was the amount offered to him by the county commissioners. There was no evidence in the case of an offer of $400, or any other offer made by the county commissioners to the plaintiff, which indicates that said jury' was influenced and prejudiced by personal knowledge and facts which were not at issue in the trial.

3. That the said Mrs. Effie Ditty stated to other members of the jury who were in favor of awarding the plaintiff substantial damages that she was opposed to the same, and that she would stay there, referring to the jury-room, forever if she did not have her way.

After hearing testimony upon the reasons, including the “additional reasons for new trial” filed, we filed an opinion overruling the several reasons and refused the motion for new trial.

On Sept., 18, 1929, a motion to set aside the verdict was filed for the reasons set out therein, viz.:

1. The jury do not state in their verdict that they find in favor of the plaintiff.

2. The jury failed to give the total sum which they find in their verdict, although they do say “damage" $400 and “interest of $49.”

3. No judgment could be entered on this verdict in favor of the plaintiff.

4. No judgment could be entered on this verdict against the defendant, Jefferson County.

A rule to show cause was granted the same date, returnable on the current argument list.

Answer to plaintiff’s motion to set aside the verdict was filed Nov. 26, 1929, by defendants, as follows, to wit:

Reason No. 1. Deny that jury did not state in their verdict that they found in favor of the plaintiff and aver that the jury did find for the plaintiff, Merle C. Milliron.

Reason No. 2. Deny that jury failed to give the total sum which they found in their verdict, and aver that the jury found in the sum of $449.

Reason No. 3. Deny conclusion of law.

Reason No. 4. Deny conclusion of law.

On Nov. 27, 1929, we heard the arguments of counsel upon the rule. We note the variance between the written “verdict” filed among the papers in the case and the verdict recorded upon the records in the clerk’s office. The court confesses that his recollection is very indistinct as to receiving the verdict. We do remember clearly in our charge to the jury, towards the end, as follows, to wit: “Now if you find from the testimony that this defendant (in appeal) suffered damages, that there is an amount of damages due to Mr. Mill-iron over the advantages, you should add to them an amount as a penalty for failure to settle with him interest on that amount from Aug. 30, 1926.” Whether in this case or not, we cannot say positively, but we do know that in other similar cases, if not in this, where the verdict is general, we have “molded the verdict,” as provided by law, where it is not in proper form by requiring the jury to combine penalty with damages where damages were found. The clerk of this court is a competent and efficient officer. We cannot conceive that he would record any verdict not under proper instructions from the court. The quotation from the charge evidences, at least, that the court had one of the points complained of in mind, namely, adding a penalty equal to “interest” to the damages arrived at. No one but the court could properly so reform or mold the verdict. The attention of the trial judge was certainly never called to the variance between the “verdict” found among the record papers and the verdict as recorded, from the time of the verdict recorded in the ease, Sept.' 13, 1928, until notified and requested to hear and pass upon the rule granted on motion to set aside the verdict filed Sept. 18, 1929. We admit that the “form” of the “verdict” submitted by the jury in its presentation to the court was incorrect in wording, but its meaning was plain. “Damage to crops and land by reason of the State of Pennsylvania appropriating a portion of his land for State highway” can by no process of reasoning be construed to mean other than damages to the land of Merle C. Milliron, plaintiff or petitioner, in No. 154, October Term, 1926, and against Jefferson County, and that $449 was the “amount”.awarded to him (Merle C. Milliron) in compensation for such damages and delay in settlement. We certainly do not seek to take refuge behind a fortuitous recordation of a verdict in proper form in this case unless the same had been properly molded by the court, and had we the least doubt as to what the jury meant in its original submission, we would assuredly give the plaintiff, Mr. Milliron, the “benefit of that doubt” in our ruling herein. As it stands, we believe “the verdict recorded in court is the only proper verdict; the paper verdict returned by the jury is not evidence:” Gibson, J., in Dornick et al. v. Reichenback, 10 S. & R. 84. We, therefore, are constrained to and do hold that the verdict recorded in C. D. No. 91, page 264, is the true and proper verdict of the jury in this case.

Rule discharged. Motion to set aside the verdict is refused.

From Raymond E. Brown, Brookville, Pa.


author: Schnader, Special Dep. Att’y-Gen.,

text:
    Interest on Tax Settlements.
    April 16, 1930.
   Schnader, Special Dep. Att’y-Gen.,

— We have your request for an interpretation of sections 805 (b) and 806 (a) of The Fiscal Code (Act of April 9,1929, P. L. 343). You desire to know whether interest, at the rate of 12 per centum per annum, begins to accrue on tax accounts sixty days after the date of settlement, or ninety days after the date of settlement.

Section 805 (b) of The Fiscal Code provides that:

“(b) The amount of every tax and of every foreign bonus settlement shall become due and payable sixty days after the date of the settlement, unless there shall be a resettlement, in which ease the amount of the resettlement shall become due and payable sixty days after the date of the resettlement.”

Section 806 (a) provides that:

“(a) In the settlement by the Department of Revenue of all accounts for taxes due the Commonwealth, it shall charge interest upon the amount of tax or balance found due the Commonwealth, at the rate of twelve per centum per annum, from thirty days after the time said tax or balance becomes due and payable, to the time of the settlement of the same; and all balances due the Commonwealth on accounts settled by the Department of Revenue shall bear interest from sixty days after the date of settlement, at the rate of twelve per centum per annum, until the same are paid, except where appeals have been taken from settlements. . . .”

Section 806 (a) is a re-enactment of the Act of March 31, 1927, P. L. 94, which amended section 30 of the Act of June 1, 1889, P. L. 420, with the exception that the Department of Revenue is substituted in the 1929 law for the Auditor General and State Treasurer, who were mentioned in the prior legislation. The Act of 1889, as amended by the Act of 1927, applied to two distinct classes of settlement, namely, first, the settlement or liquidation of accounts of county officers acting as the agents for the Commonwealth for the collection of State taxes; and, second, accounts settled against taxpayers themselves by the Auditor General and State Treasurer. In the former case, interest began to run at the rate of 12 per centum per annum thirty days after a county officer ought to have paid over to the Commonwealth the balance of taxes due from him to it. In the latter case, interest began to run at the rate of 12 per centum per annum sixty days after the date of settlement.

Prior to the passage of The Fiscal Code, the payment of interest on other accounts settled by the Auditor General and State Treasurer was governed by section 34 of the Act of March 30, 1811, P. L. 145.

Section 806 (a,) of The Fiscal Code cannot be held to have the same effect as the Act of March 31, 1927, P. L. 94, or the Act of June 1, 1889, P. L. 420. Section 806 (a) has no application whatever to the payment of interest by county officers upon balances of taxes due by them to the Commonwealth. This subject is covered by section 904 of The Fiscal Code.

Article Vin deals exclusively with “The Settlement of Bonus and Tax Accounts.” Article ix, on the other hand, deals with “Procedure for the Collection of Moneys Due the Commonwealth by County or City Officers.”

Applied exclusively to tax accounts as distinguished from accounts due by county officers for taxes collected, section 806 (a,) of The Fiscal Code contains an obvious contradiction. Its first clause must be construed to mean that in accepting payment and receipting for amounts due on tax accounts, the Department of Revenue shall charge interest at the rate of 12 per centum per annum from thirty days after the time the tax becomes due; and under section 805 (b) the due date of the tax is sixty days after the date of settlement or resettlement, if there be a resettlement. The taxpayer thus has ninety days after the date of settlement or after the date of resettlement, if there be one, within which to pay his tax before interest begins to run. The second clause provides that interest at the rate of 12 per centum per annum shall begin to run sixty days after the date of settlement. It is impossible to administer both of these provisions. Interest begins to run either sixty days after the date of settlement or ninety days after the date of settlement. The Legislature’s intention that tax accounts shall bear interest at the rate of 12 per centum per annum is clear, but the date upon which the interest shall begin to run is not clear. It is a familiar rule of law that statutes imposing taxes must be construed strictly against the taxing power and in favor of the taxpayer; and we take it that a provision charging a high rate of interest for failure to pay taxes promptly is subject to the same rule of interpretation. Therefore, in construing the conflicting provisions of section 806 (a) of The Fiscal Code, it is necessary to adopt the more liberal alternative and charge interest at the rate of 12 per centum per annum from ninety days after the date of settlement rather than from sixty days after the date of settlement.

Accordingly, we advise you that interest at the rate of 12 per centum per annum begins to run against taxpayers beginning ninety days after the date of settlement, or ninety days after the date of resettlement, if there was a resettlement.

While the presence in section 806 (a) of these contradictory clauses is unfortunate, a period of ninety days in which a taxpayer may pay his taxes without interest is more consistent with the general scheme of The Fiscal Code than a sixty days’ period would be, for the reason that, under section 1102, a taxpayer is allowed ninety days after the date of settlement within which to file a petition for resettlement. Under the construction which we have placed on section 806 (a-), the period for filing a petition for resettlement and the period for payment of tax without interest is identical. This is as it should be.

From C. P. Addams, Harrisburg, Pa.


text:
    Kerr’s Estate.

      Hepburn & Norris, for exceptants.

      Richard W. Thorinffton and J. H. Ward Hinkson, contra.
    May 29, 1930.
   Gest, J.,

— We are of opinion that the adjudication of the Auditing Judge correctly awarded the accumulations of income, which are the subject of these exceptions, under the intestate law, and we do not consider it necessary to add to what has been so satisfactorily said. We may, however, refer to Ferguson’s Estate, 223 Pa. 530, and Nagle’s Estate (No. 1), 63 Pa. Superior Ct. 93, as additional authorities in harmony with the same conclusion.

The exceptions are dismissed and the adjudication is confirmed absolutely.