Practice-Amendment of March 30, 1925, P. L. 85, of Practice Act of 1915, P. L. 483-New matter in affidavit of defense-Reply to new matter in affidavit of defense-Motion to strike off reply to new matter. Niles, P. J., April 16th, 1926.-This case, No. 38, April Term, 1926, and three others by the same plaintiff against other insurance companies, Nos. 39, 40 and 43, April Term, 1926, raise the same question upon the construction of section 2, section 15, and section 16, of the Practice Act, 1915, P. L. 483, as amended by the Act of March 30, 1925, P. L. 85. Plaintiff's statement, filed March 2, 1926, sets forth a cause of action in assumpsit based upon a policy of fire insurance, a copy of which is attached, covIn an action on a fire insurance policy in ering property alleged to have been inthrough the fault of the plaintiff the provis-jured by fire on September 9, 1925, as ions of the policy regarding appraisement of itemized in the statement. the damage had not been complied with and, therefore, the action was prematurely which the affidavit of defense averred that brought, and that the plaintiff had wilfully, with intent to cheat and defraud, sworn to matter or of necessity to reply was endorsed a false proof of loss, and no notice of new on the affidavit of defense; and the plaintiff filed a reply to the allegations contained in the affidavit of defense, the court refused to strike off the plaintiff's reply on motion of the defendant on the ground that the alleare not new matter within the contemplation of the amendment of March 30, 1925, P. gations contained in the affidavit of defense L. 85, of the Practice Act of 1915, P. L. 483, and that the plaintiff was not required to reply in the absence of a notice of new matter endorsed on the affidavit of defense. Motion of defendant to strike from the record the plaintiff's reply to new matter contained in the affidavit of defense in John F. Reichard v. Insurance Company of the State of Pennsylvania, No. 38, April Term, 1926, in the Court of Common Pleas of York Co., Pa. Motion refused. Among other things the plaintiff alleges that he has done and performed everything required of him under the policy. In obedience to the usual rule, the defendant filed an affidavit of defense March 17, 1926, in paragraph 9 of which it is denied that the plaintiff did perform all the duties and obligations on his part in accordance with the terms and conditions of the policy. In paragraphs 13, 14, 15, 16 and 17, a particular statement of the defense is given, the substance of which is: That through the fault of the plaintiff the negotiations for carrying out the provisions of the policy regarding an appraisement of the damage had not been complied with. Copies of coorrespondence regarding this are embodied in the affidavit of defense. Therefore defend ant avers that this action is prematurely brought and cannot be sustained. Another specification of the defense is contained in paragraph 18, alleging in substance: That the proof of loss claiming at damage to the stock of tobacco of just, improper, false and unfair charge. $109,403.79, whereas the real damage did He denies the allegation that said not exceed the sum of $4,211.11, was policy is void; and he denies further made and sworn to wilfully, deliberately, that said allegation is a proper allegation and with intent to cheat and defraud the of fact, but is a conclusion of law, and defendant. therefore improper." The affidavit of defense does not formally assert that anything in it is either "set-off," "counter-claim" or "new matter," nor is there endorsed thereon a notice requiring a reply. The plaintiff did file a "reply to new matter" March 20, 1926. In this reply plaintiff says: "The allegations contained in the 16th paragraph of defendant's affidavit of defense as to efforts to have the plaintiff's loss determined by appraisers are true, with this modification: March 31, 1926, on motion of defendant's counsel, the rule was granted to show cause why plaintiff's reply to new matter should not be stricken from the record. The reasons urged in support of this rule are: (1) That the allegations of the affidavit of defense referred to are not new matter in the sense contemplated by the amended practice act; and (2) That there being no notice endorsed on the statement, and no statu"Neither the said Percival R. Lowe or the said D. Emil Klein were, or are com-tory requirement of notice to reply, petent or disinterested appraisers. The plaintiff was not compelled to file any said Lowe had before that time been se- reply, although the amended section 6 lected by the defendant and other insur- threatens that new matter not denied in plaintiff's reply shall be taken as adance companies who carried policies on plaintiff's property injured and damaged mitted. by the fire, to make an adjustment of the And the argument is pushed further; plaintiff's loss for the defendant, and had that because the act does not compel made a pretended adjustment at a ridic- plaintiff to reply to new matter alleged ulously low figure; showing either negli- by defendant, therefore he is prohibited gence, incompetency, or prejudice, and from doing so. the plaintiff ascertained that the said D. It seems reasonable that the legislaEmil Klein was an intimate associate or ture meant that new matter pleaded by business partner of the said Lowe. The defendant should be met by plaintiff's plaintiff being convinced that said de- denial, unless intended to be admitted. fendant was not inclined to be fair or It is unfortunate that the amendment just in making such appraisement of was not made perfectly clear by replaintiff's loss, revoked and refused to quiring a reply only after plaintiff is proceed with the said appraisement, and given a similar notice to that provided the defendant made no further effort to for when the affidavit of defense inhave the loss determined by the ap- cluded a set-off or counter-claim. praisers.' It may be that thte act as amended is The "reply" also meets the allegation not so clear that if the plaintiff did not of false swearing in the proof of loss file a reply to this new matter (if it is with: "Eighteenth. The quotation con- new matter), he would not be precluded tained in this paragraph is admitted. at the trial from meeting defendant's The plaintiff did furnish the defendant evidence of false swearing with contrary with a proof of loss as stated, showing evidence. the amount of his loss to be $109,403,79, But it does not follow that if plaintiff and he now repeats that this is the true treats defendant's allegations as new amount of his loss. He absolutely denies matter, though not compelled to do so by that he wilfully and deliberately intended notice from defendant, or specific reto cheat and defraud the defendant com- quirement of the law, his reply filed with pany; and he denies that he grossly, or abundant caution must be stricken from in any other maanner, exaggerated both the record. the sound value and the loss or damage to the property mentioned in said paragraph eighteen, and he resents this un Under the circumstances of these cases we do not see that any right of defendants will be adversely affected by re 3 fusing their motions; nor that any good Rule 48 provides for raising prelimwould be accomplished by striking off inary objections to the bill in certain spethese replies. cified cases. The only portion of the If the allegations of false swearing, rule under which the objections raised by &c., are not new matter plaintiff, without this demurrer might come is sub-division filing any reply, could of course meet 7, which provides that the preliminary defendant's evidence with contradictory objection may be made "for any other proof. reason, defendant should not be required If such allegations are new matter to answer the facts averred, since he has within the amendment's contemplation, a full and complete defense to plaintiff's plaintiff might be caught in a disagree- claim, specifically stated, which does not able dilemma at the trial had he failed require the production of evidence to to reply. sustain it." We are not considering now the legal effect of the matters alleged in the pleadings. We do not feel impelled to expose the plaintiff to a possible peril by striking off his replies. And now, to wit: April 16th, 1926: The rule granted on defendant's motion of March 31, 1926, to strike off plaintiff's reply to new matter, is discharged. An answer raising the question of the sufficiency of the averments of the bill is not within the purview of sub-division 7 of Equity Rule 48; hence, a paper in form, name and effect a demurrer, may not be validated by treating it as an answer. Demurrer to bill in equity. F. S. Brown, for plaintiff. Martin, P. J., Nov. 20, 1925.-A bill in equity was filed praying for an accounting of certain partnership transactions, for the appointment of a receiver for the William Goldstein Company and for general relief. An answer raising the question of the sufficiency of the averments of the bill is not within the purview of sub-division 7 of Rule 48. That rule contemplates a defense to the claim and not an allegation of the weakness or insufficiency of the averments of the bill to sustain the action. The paper filed is in form, in name and in effect a demurrer; the request of the demurrant for judgment thereon must be overruled. And now, to wit, Nov. 20, 1925, the demurrer filed by the defendant, William Goldstein, is overruled and leave is granted to file an answer to the bill within thirty days. The defendant, William Goldstein, on May 14, 1925, filed a demurrer and Ab-profits to raham Gooldstein filed an answer. granted. No. 15 of the new equity rules expressly abolishes demurrers in equity. These rules went into effect on Jan. 1, 1925. R. H. Meloy, for the petitioner. Crumrine, P. J., January 27, 1926.— Letitia R. Gamble, widow of Davis E Gamble, deceased, presented a petition on their dicta, and vary according to the for citation on the Real Estate Trust particular facts. Company, of Washington, Pa., trustee In our opinion, however, a discussion under the will of the said Davis E. and comparison of these many cases is Gamble, to show cause why the said not necessary here. It has never been trustee shoould not pay over to her as questioned that the ultimate test is the life tenant, the profit realized on the sale intention of the testator, and if that can of certain United States Government be ascertained our way is clear. bonds belonging to the trust estate. The trustee filed an answer admitting the facts set out in the petition, and the cause was set down for hearing on petition and answer. No answers were filed by the remaindermen, but one of them appeared at the hearing and was heard. He opposed the payment to the widow of the gain on the sale of bonds, claiming that it should be treated as a part of the corpus and distributed as such at the death of the life When the testator here gave to the widow the "profits" of his estate, he is to be taken as using that word in its ordinary sense. As commonly used, the word "profit" applies precisely to the gain made on the sale of these bonds. Webster defines "profit," the noun, as "1. Advancement; advantage; improvement. 2. Accession of goods; valuable results; useful consequences; benefit; avail; gain, as an office of profit. 3. The excess of retenant. turns over expenditure in a given transThe clause of the will under which the action or series of transactions," etc., question arises reads as follows: etc. "Fourth.-Upon the completion of the It is true that the word is also used— settlement of my estate by my executors, particularly in legal phraseology-as hereinafter named, I hereby direct that synonymous with income as in the they shall turn over and pay to such familiair "rents, issues and profits," and trustee as the proper court shall appoint, such may possibly have been the sense in all of the residue of my personal estate, which it was used by the testator. Howof every kind, the said trustee to invest ever, we are not concerned with what the same in such securities as are sub- he might have meant-but with the mitted by law, and to pay the income meaning of the words actually used: arising therefrom, less the reasonable Schmidth's Estate, 183 Pa. 641. The costs and expenses, annually to my wife, word "profits" clearly covers the gain Letitia R. Gamble, during her natural resulting from the sale of these bonds, life, and to her for such period I hereby and there is nothing elsewhere in the will give and bequeath all the profits and in- to cast any doubt on such a conclusion. come arising from my said personal es- The will gives these profits to the widow tate, of every kind, after the payment of and, in our opinion, her prayer should be the legacies hereinabove mentioned and granted. payment of all my just debts and expenses of making settlement of my estate." In Park's Estate, 173 Pa. 190, there was a bequest to the life tenant of “income and profits." A mortgage beAfter certain funds of the estate had longing to the estate was foreclosed, the been turned over to the trustee they were property bought in and later re-sold at a invested in United States Government gain over the amount of the mortgage bonds, which were later sold at a profit debt. The lower court held this increase of $1,180.00, which is the fund in dis- to be a part of the corpus of the estate, pute. but was reversed by the supreme court on the dissenting opinion of Judge Hawkins, in which, however, the use in the will of the word "profits" was not stressed. The question involved-whether profits realized on the sale of the corpus of a trustee estate-go to the life tenant or to the remainderman-is an old one and has frequently been the subject of con- In Graham's Estate, 198 Pa. 190, there sideration by the courts of this state. As was a bequest of "income" to the life in other cases involving the ascertain- tenant. Certain bonds were sold at an ment of a testator's intention, the nu- advance over the purchase price, and merous cases are not easily reconcilable this gain was held a part of the corpus, and not distributable to the life tenant as "income." This was affirmed on the opinion of Judge Over, of the lower court, who distinguished the case from that of Park's Estate, supra, on the ground that in the latter the will had given the "profits" as well as the "income" to the life tenant. In Quay's Estate, 253 Pa. 80, there was a bequest of "income and profits" to the life tenant. Held that a gain in the sale of stock was distributable to the life tenant. Again the decision was not based specifically on the use of the word "profits," but that would seem the only basis for distinguishing it from cases like Graham's Estate, supra, Connolly's Estate, 198 Pa. 137-Smith's Estate, 140 Pa. 344, etc., where the general rule, that natural increases in value of assets belonging to the trust estate enure to the benefit of the corpus, was adhered to. The conclusion reached above is also consistent with the distinction made in the leading case of Earp's Appeal, 28 Pa. 368, the increase in value having oc curred after the death of the testator. And now, January 27, 1926, this cause came on to be heard on petition and answer, and after due consideration it is ordered and decreed that the Real Estate Trust Company, trustee under the will of Davis E. Gamble, be and is hereby authorized and directed to pay over to Letitia R. Gamble, widow of said Davis E. Gamble, the sum of $1,180.00, or the net gain on the sale of United States Government bonds described in the petition filed and formerly held by such trustee, together with any income which may have accrued on or been earned by said fund; first deducting, however, from said amount the costs of this proceeding. were pending to the report of re-viewers of the same road was held irregular, and exceptions to the report of the re-re-viewers were sustained. Where the petition and order for re-reviewers of a proposed private road fixed a terminus in a public road 3800 feet from a re-re fixed point, and the report of the viewers showed they had laid out a road with said terminus 3968 feet from said point, exceptions to the report were sustained. viewers appointed on petition of Daniel Samuel Kurtz, for exceptions. Niles, P. J., April 16th, 1926.-The present matter is one of a series of steps in a protracted dispute regarding a private road. Without reciting the history of the litigation, the particular questions argued by counsel for the parties will be con sidered. |