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D. Sutton, the secretary of the company. as officers and Directors of the Poultry That E. D. Haney delivered said stock so as- Fancier Publishing Company. signed to F. D. Sutton, the Secretary of the That the Board of Directors of the Poultry Fancier Publishing Company, with Poultry Fancier Publishing Company coninstructions to said F. D. Sutton to deliver sisted of five members. the same to the said Poultry Fancier Pub- That the verbal agreement between the lishing Company on receipt by F. D. Sutton Poultry Fancier Publishing Company and of seven notes in the sum of $1000.00-- claimant is established by the testimony of said deferred payments to be secured by four of the Directors of the Poultry Fancier judgment.

Publishing Company, to wit, F. W. DeThat the Poultry Fancier Pubiishing Lancey, C. N. Myers, C. S. Shirk and Company had notice of these instructions. F. D. Sutton.

That the Poultry Fancier Publishing These findings of fact are affirmed by the Company refused to execute the said seven Court. notes to be secured by a judgment, and also The Auditor allowed the claim to particirefused to deliver the notes as agreed. pate in the distribution and awarded him

That subsequently, C. J. Delone, counsel a pro rata dividend with the other parfor the Poultry Fancier Publishing Com- ticipating general creditors pany, was authorized by the said company Exceptions were filed to the auditor's to go to Philadelphia, and try to make findings and award on the claim by the definite arrangements with Mr. Haney for First National Bank of Hanover and the purchase of his stock.

Charles J. Delone, other creditors. That C. J. Delone, counsel for the In reviewing the evidence we find, as was Poultry Fancier Publishing, went to Phila- found by the auditor, that five of the memdelphia, met Mr. Haney, the claimant, and bers of the board of directors testified that discussed the proposition. That at no time the agreement in controversy was entered was there any difference as to the price to into between the claimant and the Poultry be paid for the stock, the only difference Fancier Publishing Company for the purbeing that claimant wanted a judgment note chase of his stock; and there was testimony to secure the deferred payment.

that after the company had paid to claimant That claimant, on July 16, 1914, wrote $2000.00 and that thereupun claimant asto the Poultry Fancier Publishing Company signed the stock to the Secretary of the saying that the proposition is withdrawn- company ostensibly for the company under would not consider anything but sale on cash the terms of the agreement. The company basis.

evidently knew of this, and refused or deThat on the same date, to wit, July 16, layed the performance of the agreement on 1914, the Poultry Fancier Publishing Com its part. The trend of the evidence strongly pany notified F. D. Sutton not to return or indicates that it, the company, was playing otherwise dispose of agreement, notes, stock, "fast and loose" with the claimant. The etc., or any correspondence relating to the auditor, in his report, has observed, and purchase of stock of E. D Haney, but to the observation we consider as a fact, produce the same at the directors' meeting that the company, instead of repudiating its to be held July 21, 1914. That no dir-contract, ratified it by keeping the stock and ectors' meeting was held on said day so far directing Mr. Sutton not to deliver it to the, as appears by the testimony taken or exhibits claimant. The facts as the auditor has refiled.

ported them are entirely warranted by the That on July 20, 1914, the claimant sent testimony as we have reviewed it, and under to F. D. Sutton a telegram in which claim the authorities which he cites, we conclude ant stated, “Negotiations are off."

that his legal conclusions from those facts That on July 23, 1914; C. J. Delone as should be sustained. All the exceptions attorney for the Poultry Fancier Publishing filed to this branch of the auditor's findings Company addressed a letter to claimant are, therefore, dismissed and the auditor is in which the Poultry Fancier Publishing sustained. Company expressed a willingness to have One set of exceptions was filed to the the negotiations terminated, and requested auditor's allowance of a claim for profesthe return of the $2000.00 pa'd.

sional services rendered the creditors by That on October 12, 1914, E. D. Haney, John J. Bollinger, Esq. We are not conF. W. DeLancey and F. D. Sutton resigned i vinced by any argument brought before us

that the auditor violated any legal propriety the auditor's award is sustained.*
under the facts as he has reported them. The auditor's refusal to allow the claims
That exception is, therefore, dismissed and of C. J. Delone for $3000.00t and the claim

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* John J. Bolli ger, Esq. presented his own by plaintiff to defendant, for a consideration which claim for se vic s rendered to creditors of the had wholly failed; Hudson v. West, 189 Pa. 491; Poultry Fanci.r Pu lishing Company in the mat er Lieb v. Painter, 42 Sup. 339; unles the failure of of c ntesting the claim of C. J. Delone, Esq., to consideration is due to some fault on the part of pirticipate in the distribution, and in contesting the plaintiff himseif; 27 Cyc. page 856. the claims for pref rence of J. C. Schumberger Here the Poultry Fancier Publishing Company and William. G. Minnich at the various mietings was acting under the advice of Delene in refusing held by the au buitor, in the sum of $500.00.

to deliver the notes for the deferred payments to As the former claim was r t a lowed by your be secured by judgment—both the claimant and auditor, and the latter two claims for preference the Poultry Fancier Publishing Company knew w re not allowed, your auditor finds that Mr. Bol that the stock was in the hands of the Secretary linger was instrumental in securi g for general of the Company for the purpose of transfer, and distributi n to u secured creditors, the sum of yet it was on the advice of Delone that the trans$1227.12—which would have been the respective fer was not made. No demand was ever made amounts awarded up.n these claims hau ihe been by the claimant for his stock, upon the Poultry allowed as claimed

Fancier Publishing Company, claimant brought Your auditor is of the opinion that $300.00 no action in any form against the said Company would be adequate and fair com ersation for the to protect his rights-he did not act as a creditor services rendered, and in making distribution will of the Company-on the contrary, his actions were allow that amount to J. J. Bollinger, Esq.

such as would be expected from a stockholder in
the Company-he permitted himself to be elected

a Director and President of the Poultry Fancier + The auditor, after finding that D advanced Publishing Company-he took charge of the active money to C to buy A's stock, says:

management of the said Company; the claimant Under the above facts is claimant entitled to re- now contends that because no stock certificaie was cover the $3000.00 advanced to the Poultry Fancier actually issued to him under his agreement with Publishing Company paid for a consideration the Company, that he is entitled to recover upon which had failed?

a consideration that failed. It seems to your - The corporation had a right to purchase its own auditor that it was claimant's duty at the time stock under the statutes of Pennsylvania. A cor- that he derived knowledge of the affairs of the poration can enter into a valid and binding con- Company to take positive and active steps to make tract the same as an individual-it is not necessary his contract void, and to demand a return of his hat its contract be in writing; Hamilton v. money-instead of taking such steps, it seems to Lycoming Ins Co., 5 Penna. State 339.

your auditor that he has ratified the contract by The Poultry Fancier Publishing Company at his course of conduct in the business affairs of the tempted to do what it was bound to do under its Company; Leaming v. Wise, 73 Pa. 173; Harvard contract with Mr. Delone to purchase the Haney Rev. v. Turner, 155 Pa. 349; Hilliard v. Wood stock. No time was fixed by the contract for the Carving Co., 173 Pa. 1; Inlow v. Christie, 187 Pa. purchase of stock, or as to the purhase price to be 186; Mükeloff v. Boltz,

-,21; Pa. 124; Cunpaid therefor, or the manner in which this price ningham v. Wanamiker, 217 Pa. 497; McCullough should be paid. The Poultry Fancier Publishing v. Insurance Co., 2 Supt. Ct. 233; his election as Company was in reality acting not only for itself, President and Director of the Poultry Fancier but as the agent of Delone so far as the purchase Publishing Company to your auditor's mind was of 3000 shares of stock was concerned.

a ratification of his agreement with the Company, The Poultry Fancier Publishing Company had and a waiver of any right which he might have entered into an agreement with Haney for the had against the Company for failure to deliver purchase of his stock, paid him a part of the con- the stock certificates. His participation in the sideration, and the stock was assigned by Haney meetings of the said Company, and his acts, fixed to F. D. Sutton as Secretary of the Poultry Fancier his status as a stockholder. Publishing Company with the full knowledge of

A certificate is not necessary to make one a the Directors, and of Delone, their counsel-the stockholder in a corporation, nor does the absence Poultry Fancier Publishing Company was then in of a certificate deprive a stockholder of rights a position to carry out its agreement with Delone, which he has in the company; 10 Cyc. 389-390and to deliver to him 3000 shares of stock. The

526, Poultry Fancier Publishing Company refused to deliver to Hane; the notes which were a part of claim of any character against the Poulory Fancier

The first time the claimant saw fit to make any the consideration of the contract, together with a judgment note for the deferred payments upon the assets of the Poultry Fancier Publishing Com

Publishing Company was on July 16, 1915, after claimant's advice, as claimant himself admitted there was never any difference as to the price. la pany had been reduced to cash, and your auditor


therefore refuses to allow claimant to participate seems to your auditor that this was a valid consideration, an equally valid subject matter, and in the distribution for the following reasons: the parties having met and agreed upon the terms (a) That the failure of consideration was due of the purchase and sale.

to a fault on the part of the claimant himself. The rule of law is that an action for money (b) By reason of the fact that claimant ratified had and received will lie to recover money paid his agreement with the Company by acting as the

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Hughes v. Murphy
Vol. XXXI THURSDAY, MARCH 14, 1918. No 441

Contract-Bailment - Execution. of E. D. Haney for $975.00 is sustained by

Where one obtains possession of a chattel upon the reasons set forth in his report, and a written contract in which he declares that he should not be disturbed. All exceptions has rented the chattel, that he is to pay a certain thereto are dismissed.

amount, in instalments, as rental and when paid

the article shall become his properly, but until The auditor is to be complimented on his the rental is paid no title is to be acquired by or careful and clear analysis of the complica- vested in him, the contract is one of bailment and tions which the testimony reveals in this not a conditional sale. The absence of an exadjustment.

press covenant to return a chaliel at the end of

the term does not a bailment into a All exceptions filed to the findings of the conditional sale. auditor are dismissed and his report is

Where the bailee of a chattel replaces a part of hereby confirmed.

it, such new part does not become the property of

the bailor and may be sold upon execution President and Director of the Poultry Fancier against the bailee. Publishing Company, and

There can be no judgment excepting one on the (c) By reason of his failure to assert any claim verdict, unless a point for binding instructions is against the Poultry Fancier Publishing Company refused or reserved. until after the appointment of a Receiver, and the Where an execution creditor levies upon a conversion of the assets into cash.

bailed chattel and disputes the title of the bailor,

he cannot upon interpleader recover upon a con#From the testimony before him, your auditor tingent interest of bailee. finds the following facts:

Motion by defendant for judgment non That E. D. Haney loaned to the Company the following sums on the following dates :

obstante veredicto. May 13, 1913...

. $200 00

E. A. Howell for motion.
May 27, 1913
June 30, 1913

J. Borton Il’eeks, contra.
July 2, 1913

150 00
July 8, 1913

December 31, 1917. BROOMALL, J.Aug. 28, 1913

75 00

This was a sheriff's interpleader issue to try Aug. 20, 1913

50 00

the title of an automobile which the defendTotal 975 00

ants had levied on as the property of Joseph That in October, 1913, the plant of the Poultry A. Senior, on April 4, 1916, in his possesFancier Publishing Company was located at Sellersville, Pa. That during the month of Oci., sion, and which was claimed by the plaintiff 1913, the claimant, F. D. Sutton and F. W. to belong to him. On the trial it was adDeLancy, all of whom were officers of the Poultry mitted that the automobile belonged to the Fancier Publishing Company, interested Messrs. plaintiff unless title to it passed to Senicr C. $. Shirk and C. M. Myere in the purchase of by virtue of a transaction between the plainstock of the company, and with the object of moving said plant to Hanover, Pa. That at said time F. W. Delancey was President, claimant trary of that which his conduct has induced the Treasurer, and F. D. Sutton Secretary of the said belief.” The primary ground of the doctrine is company. That in October, 1913, C. S. Shirk and that it would be a fraud in a party to assert what C. M. Myers met the claimant, President and his previous conduct has denied when on the faith Secretary of the Poultry Fancier Publishing Com- of that denial-others have acted; Gray's Appany at Sellersville, Pa. That claimant stated at peal, 10 W. N. C. 458; Rettig & Sun v. Becker, said meeting to Messrs. Shirk and Myers that the i Sup. Ct. 395 at page 399. Poultry Fancier Company was not indebted to Claimant induced Vessrs. Shirk and Mvers to him, and that said statement of claimanis induced purchase stock from the Poultry Fancier PublishMessrs. Shirk and Myers to purchase stock in the ing Company on the strength of his own statesaid Poultry Fancier Publishing Company. Un ment that the company was not indedted to him der the above findings of fact is claimanı entitled in October, 1913, after loans had been actually to recover for money loaned to the company prior' made by claimant to the company, and your to the date of the purchase of stock in said, auditor, therefore, holds that he cannot blow hot Poultry Fancier Publishing Company by Messrs. , and cld by now stating to the prejudice of Shirk and Myers, or are the foregoing facts sint Messrs. Shirk and Myers, stockholders of the ficient to evoke a claim of estoppel so far as company, that said loan of $975.00 had not been claimant is concerned?

paid whether in fact it was actually re-paid or The rule of law is "that when the conduct of a i not by the company to the plaintiff. Your auditor, party has been such as to induce action by an-, therefore, refuses to allow the claim of E. D. other, he shall be precluded from afterwards, Hanev in the sum of $97500 to participate in the asserting to the prejudice of the other, the con- i distribution of the balance on the account.

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tiff and Senior, which was evidenced by a The defendants now move for a general writing, signed by Senior, of which the judgment in their favor. There can be no following is a copy:

judgment entered, except a judgment on "This is to certify that I. Mr. Joseph the verdict, except that where a party preSenior, have received and rented of Thomas sents a point for binding instructions, which Hughes, the article or articles described in is refused or reserved, he may move for the annexed schedule, valued at $515.00, judgment on the whole rocord; Act of for the use of the said article or articles, April 22; 1905, P. L. 286, Stewart's and as rent for the same have this day paid Purdon, Vol. 6, p. 7139, pl. 35. But even to the said Thomas Hughes the sum of if this had been done the defendants could $250 as deposit, and promise further to pay not have more than they have now, a verdict to his collector or authorized agent the sum in their favor, upon which they can enter of $265.00, with note as collateral, payable judgment. Their real complaint is that the $40.00 monthly with interest until the jury was not instructed to include in their above-named amount is paid, at which time valuation of property, the value of Senior's said rent shall cease, and said article become interest in the automobile. The remedy my property.

for this would be a motion for a new trial. "The above-named article or articles to But even if such motion had been made it remain the property of Thomas Hughes and would not avail them, because there was no no title thereto to be acquired by or vested issue as to Senior's interest in the automoin me until this obligation is fully complied bile. The defendants did not levy on with on my part, and in event of failure to Senior's interest in the automobile. They meet promptly any of said payment, I agree would have had a right to do so; Meyers on demand, to surrender said article or vs. Prentzell, 33 Pa. 482. They levied on articles to Thomas Hughes without process the automobile. The plaintiff claimed title of law, and said T. Hughes is authorized to it. Then the defendants had another to enter my premises by his agent or agents opportunity to assert their right to proceed to remove the same, and to retain the sums to sell Senior's interest in it. If they had already paid as rent or hire for the use of done so, the interpleader would have been said article or articles while in my posses- quashed, because a sale of Senior's interest sion. And I also agree not to remove said could not effect the plaintiff; Logan v. Gest, article or articles from the premises I now 6 Del. Co. Reps. 242. And the defendants occupy, or part with the possession thereof, could have proceeded to sell Senior's interwithout first obtaining the written consent est. Even this would have passed nothing, of Thos. Hughes."

after the bailee was in default; Cobb Chase The rights of the parties depended upon v. Deiches, 7 Pa. Supr. Ct. 252. Instead the construction of this writing. Hence it of pursuing their right to sell Senior's interwas necessary for the court to construe it, est in the automobile they took issue with and we did construe it as a bailment for plaintiff's claim of ownership, by categorichire and not a conditional sale. We see no ally denying it, and this was the only issue error in this; Reading Automobile Co. v. presented at the trial and this issue has been DeHaven, 53 Pa. Supr. Ct. 344. The properly decided. We, therefore, refuse deabsence of an express covenant to return fendant's contention and direct judgment to the property at the end of the term does not be entered on the verdict. turn a bailment into a conditional sale; Id. At this stage of the case the plaintiff was C. P. of

Berks Co. entitled to a verdict but it appeared that

Brendle v. Schmehl the top of the automobile was not the top which was on it at the time of the bailment,

Negotiabie Instruments Accomodation but was subsequently attached to it by the

Maker-Liability of Holder in Due bailee. There was no dispute as to this.

Course. Evidence was introduced as to the value of Where the holder of a promissory note for this top which belonged to the bailee, and value sues the maker thereof, evidence of an

agreement between the maker and payee that the the jury was instructed to render a verdict latter should alone be responsible, is insufficient for the defendant and to determine the to prevent judgment, the plaintiff having no value of the top, which was accordingly knowledge of the agreement. done and the value of the top was fixed at

Rule for new trial. thirty-five dollars.

W m. J. Rourke for defendant and rule.

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H. P. Keiser for plaintiff.

communication of an alleged agreement November 19, 1917. WAGNER, J.— The between him and the defendant that Mr. defendant asks for a new trial upon the Hoverter alone was to be liable. On the third reason therof, which is that

contrary it is evidence that Brendle, the "The Court erred in directing the jury plaintiff, depended upon Mr. Schmehl's ratto render a verdict in favor of plaintiff and ing therefor, his name on the note, with against defendant for at least $1,386. the additional persunal promise of Hoverter

li was admitted by the defendant that he that he would also be liable. This promise signed the note for $1,200. The principal to pay by Hoverter is not a release of of this note, with interest thereon, consti- Schmehl's liability. The position of the detuted the basis for the direction by the fendant as contended for in this third reason Court of a verdict for plaintiff for at least i for a new trial is not supported by the this sum. The defendant claims that this evidence. Mr. Schmehl in his letter of note was given upon an agreement between April 25, 1914 to Mr. Brendle, in writing the payee and the defendant, which agree with reference to this note, distinctly says ment was communicated to the plaintiff, when he sends to him his check for $12.50 That is, there was an agreement between for a renewal of the note, “I would like to the payee and the maker at the time pay note in full but cannot do so at this of the giving of the note that the maker time.” He hereby acknowledges his liability was never to be called upon for the pay- on the note. Under the evidence the Court ment thereof. The evidence on this agree could not do otherwise than direct that as to ment is that of N. S. Schmehl. He this one note the jury would have to bring testified that at the time he gave these notes in a verdict in favor of the plaintiff. to Mr. Hoverter, Mr. Hoverter had said Rule for new trial discharged. that he would take care of them. This, as we view it, is a mere promise between the

C. P. of

Northampton Co. two that the payee would take care of the

Raeder v. Stewart Silk Mill Co. notes; and not an agreement that if these notes got into the hands of a third party Practice Question of law Pleading of that the sole person who was to be liable on statute—The Workmen's Compensation the note was Mr. Hoverter, the payee. Act of 1915".-Constitutionality of. Defendant claims that this agreement as

Where the question of law raised by the contended for by him was communicated to affidavit of defense disposes of the whole ot the Mr. Brendle, who discounted the note. plaintiff's claim, the judgment should be for the We fail to find any evidence of any com- defendant and not of nonsuit. munication of such an agreement even if

Where a statute is relied on for a defense, the agreement be considered as one under ative an exception or proviso unless it is con

the party relying on it need not refer 10, or negwhich Mr. Schmehl was under no circum- tained in the enacting clause. stance to be held liable for the payment of "The Workmen's Compensation Act of 1915"

is constitutional. Defendant called Mr. Hoverter as a wit

Motion for a nonsuit. ness to show the communication of this

A. G. LaBarre for the plaintiff. agreement to Mr. Brendle. He testified

Aaron Goldsmith for the defendant. that at the time the note was transferred by him to Mr. Brendle for a valuable consider- February 11, 1918. STEWART, P. J.ation, he gave to him (Brendle) VIr. Defendant in this case, by praecipe filed and Schmehl's rating. He says “Mr. Brendle, upon argument, asks for a judgment of non

was not acquainted with Vr. suit. The "Practice Act, nineteen fifteen.”' Schmell. On the strength of the rating he page 483, provides as follows: "Section 4. discounted the note with the understanding Demurrers are abolished. Questions of law that I was to make payment.” He further heretofore raised by demurrer shall be raised says, "I showed Vir. Brendle the rating, and in the affidavit of defense, as provided in I told Mr. Brendle I considered Mr. Schmehl section twenty.

Section 20. The good, but that I would make payment on them defendant in the affidavit of defense may as they matured, because I realized that Mr. raise any question of law, without answerSchmehl couldn't make payments on these ing the averments of facts in the statement notes at that time. That is what I said to of claim; and any question of law, so raised, Mr. Brendle." This is not evidence of a may be set down for hearing, and disposed

the note.

of course

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