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final decree according to justice and right. Thus the discontinuance is set aside in the chancery proceeding as effectually as if done in the action itself by the Court in which it stood, and this in pursuance of law (the Act of 1840), and not contrary to the law.

Packer of a proportion of these lands, which | but this is needless, and it, therefore, makes the Packer denied. This led to litigation and, inter alia, the action of March, 1857, and then to the compromise agreement of January 30, 1867, between Offerman and R. N. Rathbun on behalf of himself and wife who was the heir of R. W. Packer. This paper (Exh. C.) provided for a release of the trust, the discontinuance of the action This shows that the common law cases cited by of March, 1857, and a settlement of the amount Justice GORDON (6 Watts, 528; 2 Harris, 313, claimed in that action by A. G. Green as an and 6 Harris, 20) are inapplicable, and do not arbitrator. But by a notice dated April 3, 1867 touch the jurisdiction conferred in 1840. No (Exh. D), dictated and written by John M. one doubts that one action cannot be tacked to Bickel for John C. Offerman, Offerman disclaimed another to override the statute of limitations, and the compromise on the ground of misrepresenta- that an ordinary bill in equity, or a scire facias, tion, and revoked the authority of Green as or even an alias writ issued after an unreasonable arbitrator, and of Jacob Hoffman, and Jacob delay will not revive a remedy barred by the Seitzinger as his attorneys. Thus it will be seen statute. But this does not touch a chancery juthat the money awarded to Offerman against the risdiction, where the very purpose is to toll the Railroad Companies became so inextricably in- statute on admittedly lawful grounds, to wit, terwoven with the question of trust and compro- fraud, trust, etc. If by reason of any of these mise nothing could set it free but a bill in equity the statute has been improperly set in motion, which could grasp the entire subject and embrace the chancery lifts the bar, by setting aside the all the parties. The result would be to declare the trust, or to compel a refunding of the award money, which had gone into the lands and the latter could be effected only by setting aside the compromise agreement of January 30, 1867, and the unauthorized act of Seitzinger, the attorney, who had after revocation of his authority discontinued the action of March, 1857, against Packer's executors.

Now the Master found, and the Court below and this Court sustain his finding, that the trust did not exist, and that the compromise of 1867, with its sequents, the award of Green and the discontinuance of Seitzinger are not binding on Offerman. Up to this point the facts are conceded and the finding of the Master not set aside. But though the award by Green was wrongfully procured, and the action of March, 1857, was wrongfully discontinued by a stranger, to wit, an attorney whose authority had been revoked, and Offerman was not bound by his act, yet the opinion of Justice Gordon holds that the statute of limitations bars the bill in equity, and he is without remedy, on the principle that a second action cannot be tacked to a former.

wrongful act which put it in motion.

At this point it is proper to notice the doubt, if indeed it is not a denial, in the opinion, of the fraud on the plaintiff's right by the discontinuance of his action without authority. Seitzinger admits he had notice of the revocation at Reading; says he was counsel for Bickel, assignee of Offerman, and felt a moral duty to Offerman that when Bickel got his money Offerman should get the balance. But this is flatly contradicted by General Bickel, whose credibility is sustained by the finding of the Master.

Bickel testifies, positively, that Seitzinger was not his attorney; that the assignment of Offerman was never delivered to him; that he never exercised or claimed any rights under it; never gave directions to Hoffman and Seitzinger as to the proceedings before Green, the arbitrator, but advised and assisted Offerman in drawing and giving the notice of revocation. The Master decided on the evidence that Seitzinger acted without authority in discontinuing the action of 1857, under the agreement of January 30, 1867, and that the agreement itself was invalid. Now what name must be given to this unauthorized In this be wholly overlooks the very purpose act of an attorney, who knows that his power, if of a bill in equity founded upon a fraud, acci- any he had, has been expressly revoked, and who dent, mistake, or trust. By the chancery powers contrary to his duty, without right, and a then conferred in the Act of 1840, jurisdiction is ac- stranger in the cause, destroys the remedy of anquired on the equity instead of the law side, and other by prostituting his official character, by a the fraud, accident, or mistake being shown, discontinuance of that other's action. I call this chancery lifts the bar of the statute, and having a fraud on the rights of the plaintiff, because it jurisdiction thereby of the whole subject accord- was a wilful and wrongful act in the interest of ing to well-established chancery principles pro- the adversary, Asa Packer, the executor, being ceeds to final decree itself, instead of remitting the mere representative of Mrs. Rathbun, the the party to his former action. Of course it owner of the estate to be affected by the acmight remit him, by enjoining the defendant tion. But give the act the milder name of a against the use of the fraudulent discontinuance, mistake or an accident, the effect is the same, the

chancery jurisdiction under the Act of 1840 being equally applicable.

The argument of my learned brother simply confounds actions at law with a chancery proceeding to moderate the rigor of the common law, and fails to discriminate between a posterior action at law and a direct proceeding in equity to set aside the wrongful act, which put the statute in motion. Yet he writes that it is "equity run mad;" a better expression being "equity not understood," which would leave the reader a

choice between sides.

promissory note, shown by parol evidence to have been given for part of the debt secured by the mortgage.

Appeals from the Common Pleas of Adams County.

These were appeals from a decree of the Court below, confirming the amended report of the auditor appointed to distribute the proceeds of the real estate of Moses Smith, sold under a venditioni exponas on a judgment obtained by Bittinger. From the auditor's report and the amended report the following facts appeared :In 1865 Moses Smith bought a certain tract of The effect of the doctrine announced is to land from Eppleman, giving therefor a purchase prevent any bill in equity being maintained un- money mortgage for $8000 to secure the payder the Act of 1840 to set aside a fraud or mis-ment of sixteen bonds of $500 each, payable antake after six years have elapsed. But whatever nually. Eppleman then assigned eight of these you call it, which has set the statute in motion, bonds to Haeffer, and they were unpaid at the it is this wrongful act which equity seizes hold of time of the sale. The other eight bonds Eppleto arrest the bar of the statute. No unreasona- man assigned to Bittinger, and at the time of the ble delay occurred, the bill being filed in this sale Smith had paid off three of them. In 1874 case within nine months after the discontinuance, Bittinger obtained the judgment against Smith, and probably as soon as it was discovered. under which the present sale and distribution took place. The judgment was on a promissory note for $300, which the auditor found, by parol evidence, was the renewal of a note given by Smith on account of one of the bonds held by Bittinger. Smith testified that he had never owed Bittinger anything except under the bonds. In 1875 Haeffer obtained a judgment against Smith for $300. On June 24, 1876, Moses Smith and Eliza his wife executed a deed for 97 perches of the mortgaged premises to Geo. W. Warfel and Mary his wife, and the grantees immediately mortgaged this lot to Craighead and Freeland for $282. On Nov. 13, 1876, Eliza Smith entered a judgment against her husband for $2500.81. As above stated, the property purchased from Eppleman was sold under Bittinger's judgment. The fund in Court was about $1300. The auditor, in his report, as finally amended, held that the lien of the mortgage of Smith to Eppleman was divested by the sheriff's sale, and he, therefore, after payment of expenses, distributed the fund between Bittinger and Haeffer, the mortgage creditors, pro rata, awarding to Haeffer $695.71, and to Bittinger $483.89.

It is not the fact of an action brought which characterizes the proceeding, though the fact that the statute had not then run is a circumstance in the equity. The purpose of the bill is not to reinstate the action, as the reasoning of the opinion supposes, but its object is to extricate the case from the invalid agreement and the discontinuance under it, and either to declare the trust or to remove the bar of the statute by declaring void the act which set it in motion. As it is, the plaintiffs, by the wrongful acts of others, lose both land and money. Equity might enjoin against the discontinuance, and thus enable the plaintiffs to recover in that action, but when a Court of Equity obtains jurisdiction, it proceeds itself to a final decree more effective, because it binds all parties and all interests. Hence, I say the doctrine of the opinion is in effect a judicial repeal of the Act of 1840, and strips it of utility. The case not being put on any ground of a want of equity, but on the legal position that the bill in equity cannot remove the bar of the statute.

I would affirm the report of the learned and very able Master.

May, '78, 173-4-5.

To this report exceptions were filed by Bittinger and Eliza Smith, because, inter alia: (1) The auditor erred in deciding that the mortgage May 20, 1878. of Smith to Eppleman was divested by the sheriff's sale; (2) The auditor should have applied the fund, first, to the payment of Bittinger's, then to the payment of Haeffer's, and then to the payment of Eliza Smith's judgment.

Bittinger's Appeal.
Eliza Smith's Appeal.
Craighead & Freeland's Appeal.
Mortgages, discharge of lien of, by sale under
judgment for part of mortgage debt-Notice
Act of April 6, 1830.

The lien of a mortgage is divested by the sale of the encumbered property under a judgment obtained on a

Exceptions were also filed by Craighead & Freeland on the ground that the mortgage to Eppleman was not divested, and that the fund, after the payment of the Bittinger and Haeffer judgments, should have been applied to payment of the Warfel mortgage creditors.

These exceptions were heard together, and refer to the question of notice as a protection to after argument the Court dismissed them, and the purchaser, and are not in point here. confirmed the report. The exceptants took these appeals, assigning for error, inter alia, the confirmation of the report.

Davia Wills, for Bittinger and Eliza Smith, appellants.

There is nothing on the record to show that Bittinger's judgment was for part of the mortgage debt. The note on which judgment was obtained was a new security. The face of the record must show the connection of the judgment with the mortgage, otherwise the lien is preserved under the Act of April 6, 1830.

Norris v. Brady, 4 Phila. Rep. 287.
Wertz's Appeal, 15 Sm. 308.

The payment of a prior lien not satisfied of record will not prevent a subsequent mortgage from being divested by a sale. The record alone is looked to.

Magaw v. Garrett, 1 Casey, 319.

Geopp v. Gartiser, 11 Id. 130.

Harper's Appeal, 4 WEEKLY NOTES, 49.

June 3, 1878. THE COURT. There are difficulties in these cases which, perhaps, nothing but legislation can remove. But we feel bound by numerous decisions upon the effect of a sale under a judgment for the mortgage debt in whole or in part, which, therefore, extinguishes the mortgage itself to the same extent, and as a consequence affects its lien.

The subject of notice in such sales needs legislative action. But we cannot see how we can reverse the distribution made. Decree affirmed and appeal dismissed, the appellants in each case to pay the costs of their respective appeals.

PER CURIAM. SHARSWOOD, J., absent.

The mortgage was to secure bonds, and hence Oct. & Nov. '78, No. 61%1⁄2. could not cover notes; just as a mortgage to secure notes will not protect renewals of the

notes.

Ayres v. Wattson, 7 Sm. 360.

After payment of the Bittinger and Haeffer judgments Eliza Smith was the next entitled. No inspection of the record could have given her notice that the note of Moses Smith to Bittinger was for part of the mortgage debt.

S. M. Leidich, for Craighead & Freeland, appellants.

The mortgage of Smith to Eppleman remained a lien on the property for the reasons above given; the present appellants are entitled to payment after the payment of the Bittinger and Haeffer judgments. Where one of several tracts of land encumbered by a common lien is aliened, the remaining tracts are in equity first liable to discharge the encumbrance.

Bedow v. De Witt, 7 Wr. 326.
Barnes's App., 10 Id. 350.

D. M'Conaughy, for Haffer and Metzgar (sheriff's purchasers), appellees.

Kline et al. v. Keiser.

Oct. 29, 1878.

Judgment note-Assignment of specialty-Effect of words "with recourse" endorsed on judg ment note-" Recourse" defined.

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A sale under a subsequent lien, for any portionment:of the mortgage debt, divests the entire debt secured by the mortgages.

Commonwealth v. Wilson, ro Cas. 63.

Bank v. Chester, 1 Jones, 281.

In such a case the Act of 1830 has no applica

tion.

Norris v. Brady (supra) does not decide the question as to the admissibility of parol evidence to explain the real nature of the transaction. Such evidence was admitted in

Ridgway v. Longaker, 6 Harris, 215. Harper's Appeal (supra) was the case of a mechanic's lien, and rested upon another principle. Geopp v. Gartiser and other cases (supra)

"The within for the use of Hertz Keiser, with reM. KLINE & Co."

course.

At maturity Carns was insolvent, and Keiser brought this ac ion against Kline & Co.

At the trial (before HALL, P. J.), the defendants requested the Court to charge the jury, inter alia, that endorsement at best was a simple assignment, and that the words "with recourse" had no legal meaning or operation. The Court refused so to charge.

Verdict and judgment for plaintiffs. The defendants took this writ, assigning for error the refusal of the Court to charge as requested.

Valentine Hay (Baer and Baer with him), for | created after the date of the original policy (which replaintiffs in error.

If the notes had been bought on a guaranty, it could have been easily expressed. In the absence of extrinsic proof that the notes were guaranteed, the assignor's liability can only be measured by the endorsement itself.

Barto v. Schmeck, 4 Casey, 447.

Lang v. Fegenbash, 2 Phila. Rep. 20.
Alter v. Langebartel, 5 Ib. 151.
Jackson v. Barnes, Ib. 33.

W. H. Koontz (Uhl with him), contra.
The legal import of the words "with recourse"
is to create a liability in the nature of a guaranty.
Overton v. Tracy, 14 S. & R. 325.
I Parsons on Contracts, 495.

quired a disclosure of any incumbrances then existing) is

not required to be disclosed at the time of the renewal.

Error to the Common Pleas of Westmoreland County.

Assumpsit, by William B. Neel, assignee in bankruptcy of John D. M'Caleb, against The Fayette County Mutual Fire Insurance Company to recover $2106.33 on a policy of insurance. On the trial the following facts appeared :

The defendant company was incorporated by an Act of Assembly of March 25, 1844. The charter contained, inter alia, the following provision:

Sec. 10. That in case any insured, named in any policy or contract of insurance made by the said corporation, November 4, 1878. THE COURT. An assign- shall sell, convey, or assign the subject insured, it shall be ment of a specialty "with recourse" certainly lawful for such assured to assign and deliver to the pur meant something. Without these words it is chaser, such policy or contract of insurance; and such clear the assignee could not come back upon the assignee shall have all the benefits of such policy or conassignor to make good the deed in the event of tract of insurance, and may bring and maintain a suit in his or her own name: Provided, That before any loss the insolvency of the obligee. If it had been the happens, he or she shall obtain the consent of the Presiendorsement of a note, on which recourse could dent or Secretary to such assignment, and have the same be had at law, "without recourse," certainly endorsed on or annexed to such policy or contract of inevery one could understand the expression assurance, to be according to the aforesaid direction for that intended to relieve the endorser from a legal lia- purpose, and not otherwise. bility. Why then should not "with recourse" be interpreted to mean a liability by contract, when none existed by law. The literal meaning of the word is to run back, so that in the assignment it must be held to mean to run back or have recourse upon the assignor in case of non-payment. We find no error in the record. Judgment affirmed.

On April 21, 1873, the said company issued a policy of insurance to John D. M'Caleb upon his dwelling house, the policy to expire April 21, 1876. On April 11, 1876, M'Caleb, on his own petition, was adjudicated a bankrupt. On the 21st of April, 1876, the day the policy expired, a certificate of renewal, in accordance with the provisions of the by-laws, was issued for one year

PER CURIAM. SHARSWOOD and WOODWARD, to John D. M'Caleb. William B. Neel, the plainJJ., absent.

Oct. & Nov. '78, 18.

Oct. 30, 1878. The Fayette County Mutual Fire Insurance Company v. Neel.

tiff, was appointed assignee in bankruptcy, May 13, 1876. On the 29th of the same month the house was destroyed by fire. Previous to the renewal, in March, 1876, M'Caleb executed a mortgage on the property insured. There was no assignment made on the policy itself, and consent of the president or secretary was not obtained before the loss; no notice was given to the company of the adjudication in bankruptcy, Fire insurance-Assignment in bankruptcy-In-nor of the execution of the mortgage. terpretation of clause in charter regarding The COURT charged the jury in substance, inter assignments-Effect of encumbrances created alia, as follows: It is insisted that this policy beafter date of original policy and before renewal. came void by virtue of an assignment under the bankrupt laws, under section 10 of the charter (above quoted). This assignment in bankruptcy does not seem to us such an assignment as is referred to in the charter. An assignment in bankruptcy under the Act of Congress is merely the placing of the property in the hands of a trustee for the benefit of the creditors, and is a transfer in law and not in fact.

A clause contained in the charter of an insurance company provided that if the person insured should sell, convey, or assign the subject insured, he might also assign to the purchaser the policy of insurance: Provided, That before any loss happened, the consent of the president or secretary to the assignment should be obtained and endorsed on or annexed to the policy:

Held, that an assignment in bankruptcy is not such an assignment as is contemplated by the above clause.

Where the secretary of an insurance company is autho nzed by the by-laws to extend the policy in the absence of reasons known to him to forbid it, a renewal is but a continuance of the policy, and, therefore, an incumbrance

The application and its interrogatories and answers are made part of the policy. In answer to the interrogatory contained in the application as to whether there were any incumbrances now on

called renewal for a year was but a continuance
by operation of a by-law, the secretary being
authorized to extend in the absence of reasons
known to him to forbid. Neither the policy nor
the by-laws required a disclosure of incumbrances
as is the case to obtain a new policy. We dis-
cover no error.
Judgment affirmed.
PER CURIAM.
JJ., absent.

the property, the insured answered "none." At the policy, being created afterwards. The sothat time this incumbrance, the mortgage, did not exist. Does the fact of its afterwards attaching become fatal to the plaintiff's case? It is claimed that, inasmuch as it existed at the time of the renewal of the policy, it is attended with like fatal consequences as though it had existed at the time of the taking of the original. This cannot be, because there was no application based upon interrogatories and answers at that time, but a simple enlargement of the time during which the policy was to run.

SHARSWOOD and WOODWARD,

Oct. 31, 1878.

Oct. & Nov. '78, 93.
Manufacturers and Merchants' Insurance
Co. v. Kunkle.

Verdict and judgment for the plaintiff for $2106.33. Defendant took this writ, assigning for error, inter alia, the charge as above set forth. A. A. Stewart, for plaintiff in error. The renewal of the insurance by John D. M'Caleb on the 21st day of April, 1876, was a new contract of indemnity, the old policy and Fire insurance-Increase of risk against a proits application remaining only for the purpose of defining the terms and conditions of the new

contract.

Bouvier, vol. ii. page 437.

Appeal of Bank of Commerce, 8 Wright, 427. The bankrupt law yests the title to all of the bankrupt's property in the assignee from the date of the commencement of the proceeding. M'Caleb had, therefore, no insurable interest in the property at the time of the renewal, the making of the new contract. It could not enure to the assignee, since he "does not take anything which became the property of the bankrupt after" the filing of the petition.

On the 21st of April, 1876, when M'Caleb renewed the insurance, or, as it is contended, made the new contract of indemnity, it was with the understanding that the same conditions existed as at the time of making the application on the 20th of March, 1873. Since that time, and before the renewal, a mortgage had been placed on the property.

H. D. Foster (with him McAfee and Atkinson), contra.

Section 10 of the charter clearly means a sale or assignment that is voluntary, i. e., the result of a contract of bargain and sale for a consideration passing from the buyer to the seller, where the seller parts with his entire interest in the land, and not an assignment resulting from the law, as this was.

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vision in the policy.

If the risk be increased contrary to a provision in a policy of insurance which declares such increase shall annul the policy, the underwriter is absolved from the contract, and this, though the fire was not caused by the increased risk.

Mutual Fire Ins. Co. v. Coatesville Shoe Factory (30 P. F. Smith, 407) distinguished.

Error to the Common Pleas of Westmoreland

County.

Covenant on a policy of insurance for $1000, by J. R. Kunkle against the Manufacturers' and Merchants' Insurance Company.

The evidence on the trial showed that on August 19, 1875, the plaintiff insured his frame building, occupied as a dwelling and store, in the company defendant for one year, from the 27th day of August, 1875, for $1000. It was burned down on the 17th of August, 1876.

One of the covenants of the policy was :

"That if the premises above mentioned shall, at any time when such fire shall happen, be, in whole or in part, occupied for purposes considered more hazardous, in the printed conditions hereunto annexed, than at the time of making such insurance, unless liberty so to occupy them be expressly stipulated for herein, this policy, and every clause, article and thing herein contained, shall be void

and of no effect."

One of the conditions was :

"If the risk shall be increased by any means whatever, with the knowledge of the assured, during the continu ance of the insurance, and notice thereof be not given to the company, and such increased risk be allowed and endorsed thereon, this policy shall be of no force."

When the insurance was effected the house was occupied as a dwelling and store, but afterwards, in May, 1875, the plaintiff put a tin shop in one room of the house. No permission was given by the company defendant, nor any application made to it for leave to put in the tin shop, nor any additional premium offered for the greater hazard. The tin

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