some time, the balance was, on February | paragraph 3 of the Bill of Complaint, 28, 1909, paid. This is merely, then, a that "Henry Martin, previous to his question of credit upon the books of the death, also gave your orator, James P. Brick Machine Manufacturing Com- Martin, certificate No. 1, for ten shares pany. If it has not been properly of the capital stock of said company." credited for this amount, of course, an Upon the hearing James P. Martin was allowance must be made. It has been called, and, under objection, produced a shown that William R. Martin paid to certificate, issued in the name of Henry the Brick Machine Manufacturing Com- Martin, but not transferred, which he alpany, by check, $5.964.08, or $847.57 leged was given to him by his father. more than the amount of this claim. If The answer avers that the ten shares in he did this, and these amounts are not question "never were assigned by Henry included in the moneys advanced by him Martin to James P. Martin, and that he to the company, then the company not is not the owner thereof." It is admitted only suffered no loss in this respect, but that Henry Martin is dead. This stock profited by an over-payment. If, on the either belongs to his estate or to James. contrary, all money paid by him to the P. Martin. No one else makes claim to company is credited, and the proceeds it. Is James P. Martin, then, a comof this note was not, then he owes this petent witness to sustain his title? He amount of money, with interest, and the is not testifying in affirmance of the title assessor, in stating the account, must of the deceased, but to sustain that of make this an item of debt against him. himself, who has survived. The Act of We are, at this time, unable to decide May 23, 1887, P. L. 158, section 5, (e.) this question. declares that, when any party to a thing or contract is dead, the surviving or remaining party shall not be a competent witness to any matter occurring before the death of the deceased. It would, therefore, seem as though James P. Martin, in a proceeding to maintain his own title, cannot, as against the estate of Henry Martin, deceased, be a competent witness. As it appears that some of the facts necessary for the final determination of this case must be ascertained by a further examination of the books of the company, it is our intention to appoint an Assessor, to go over them, and, in accordance with this opinion, to state an account. CONCLUSIONS OF LAW.-As we have already answered ninety-five requests for findings of fact and conclusions of law submitted by the plaintiffs, and sixteen submitted by the defendants, it would seem as if the field of this case was fairly well covered. But some of the facts embraced in the books are not clear, and it is necessary, to adjust the rights of all parties, that an account be stated and the indebtedness due by the Brick Machine Manufacturing Company be definitely settled. This can only be done by the reference of the case to an Assessor, and no definite decree can at this time he entered. Therefore, so that there may be no misunderstanding as to our views of the law of the case, we will, with as much brevity as possible, discuss the points which we consider are raised. The title to the ten shares claimed by James P. Martin will be first adverted to. The bill filed in this case asserts, in This question is, however, at this time comparatively unimportant for two rea First, because, as the answer denies this.allegation of the bill, it is a well settled principle of equity that the averments must be sustained by more than one witness, or by one witness and corroborative facts. Thus, in Nulton's Appeal, 103 Pa., 286, Mr. Justice Clark said: "The undoubted effect of the answer filed was to require the plaintiff, by sufficient proof, to establish the facts traversed. The testimony of the plaintiff unsupported and alone is insufficient for that purpose; the answer was sponsive to the bill, and, therefore, another witness or proof of circumstances in corroboration were required. plaintiff must bring his case within the well established rule of equity that, where the defendant, in express terms, negatives the allegations of the bill, and re The the evidence of one person only affirms what has been so negatived, then the Court will neither make a decree nor send it to a trial at law. Daniel's Ch. Pr. & Pl. 983. *** The operation of the defendant's answer is the same, although the equity of the plaintiff's bill is grounded on the allegation of fraud." Audenried's Appeal, 89 Pa., 114; Waller v. Kingston Coal Co., 191 Pa., 193; Bailie v. Bailie, 166 Pa., 472. (Concluded in next number.) Tegal Miscellany. Bar Picnic Off. The bar picnic has been postponed. It was found that there were an unusually large number unable to attend on the date fixed and the committee has concluded to postpone the picnic until next fall. O. C. ADJUDICATIONS. By Judge SMITH: Thursday, June 16, 1910. Catharine E. Kochele, E. Drumore, $3.863.56. Richard A. Malone, City, $24.496.12. Monday, June 20, 1910. John G. Bowman, Ephrata borough, $25.340.87. John D. Brubaker, Manor, $149,669.23. Clara Bachman, Joseph Holl, Barbara Holl and Ella V. Holl, Strasburg borough, $549.17. Mary R. Brandt, Manheim borough, $1,797.87. Benjamin Creamer, Martic, $106.48. Annie Dierolf, Mount Joy borough, $2.776.77. Dr. Martin H. Diller, Salisbury, $12,563.64. John Dietrich, New Holland, $940.44. Mary Doner, East Lampeter, $802.35. Juliana Eckert, city, $3.091.83. Emma Hogentogler, Columbia, $1,157.15. Wilson Demmy, Manheim township, $58.88. Sophia Kistler, Columbia, $3,498.25. Abraham R. Kurtz, West Earl, $10, 209.34. Kate Kempher, Ephrata township, $3.501.82. J. Harvey Jackson, Little Britain, $1,204.55. Robert J. Knox, Leacock, $4,481.38. Tuesday, June 21, 1910. George Mullen, Columbia Boro. Dr. Daniel N. Styer, Caernarvon. Harry S. Vogel, Manheim Boro. Henry S. Stauffer, Providence, $4,488.99. Christian W. Wenger, West Earl, $1,718. Benj. S. Witman, Rapho, $507.76. John K. Stoltzfus, Salisbury, $3, 441.61. Henry G. Salm, Penn, $10,133.79. Mary A. Reiber, Mount Joy, $317.66. Henry B. Shonk, Manheim borough, $523.09. David Rinehart, Marietta, $15.400. John S. Miller, Rapho, $8,561.70. Mary A. Rohrer, Strasburg borough, $1.525.08. Simon Warfel, Conestoga, $3.968.98. Thursday, June 23, 1910. Tobias Denlinger, Leacock, $4.705. $72. Barton M. Weaver, East Earl, S2, 429. Christian F. Rohrer, Manor, $829.04. John Erisman, Rapho, $16.705.17. Mary Ann Foltz, Terre Hill, $749.32. B. Francis Ellwerth, New Holland. $548.43. Martin H. Harnish, Pequea, $55.20. E. C. Reigart, city, $38.657.62. Isaac R. Landis, Manheim township, $7,802.12. LANCASTER LAW REVIEW. VOL. XXVII.] MONDAY, JULY 4, 1910. [No.35. VOL. XXVII.] MONDAY, JULY 4, 1910. [No. 35. Common Pleas -Equity. C. P. OF LANCASTER COUNTY. Herbert P. and James P. Martin vs. The Henry Martin Brick Machine Mfg. Co. and William R. Martin. Equity Evidence Receiver-Wills -Election-Stock-Transfer of bequeathed stock by decedent as collateral-Contract by officer of corporation with corporation—Accounting. (Concluded from last number). Secondly, because we have found, as a fact, that Henry Martin was, at the time of his death, the owner of 1,145 shares of stock, but had transferred them to his son, William, as collateral security. He, therefore, had a right to bequeath the said stock to his sons, subject to the collateral transfer thus made. The plaintiffs are thus the owners of certain shares of stock of the Brick Machine Manufacturing Company, subject to the conditions imposed by the transfer, and they are, therefore, in a position to question any improper conduct of the business of the president of the company, and also to call for an account. The settlement of questions arising out of this account is the real controversy now before us. If James P. Martin can, so far as interest is concerned, maintain this bill, that is all sufficient for his present purpose, and his right to hold these ten shares of stock can subsequently be settled in proceedings between himself and the representatives of Henry Martin's estate. The next question is, whether, by reason of the acceptance of the terms of the will of Henry Martin, William R. Martin must surrender up the shares of stock bequeathed to the plaintiffs, freed from the burdens for which the stock was transferred as collateral. In this case, Henry Martin bequeathed to his son, William R. Martin, 715 shares of the stock of the Henry Martin Brick Machine Manufacturing Company; to and to his son, Herbert P. Martin, 357/2 his son, James P. Martin, 357%1⁄2 shares; shares. There at that time remained in his name upon the books of the company 1,145 shares, and there stood in the name of William R. Martin 285 shares, these two blocks making 1,430 shares, or the amount of shares thus bequeathed. The inference is, therefore, a fair one that Henry Martin took into account the 285 shares standing in the name of his son, William, and it follows that he (William) cannot hold title to the 730 shares without throwing into hotchpot the shares thus standing in his own name. But does this, or the fact that he like all the rest received devises of real estate under the will, affect his right to hold the collateral? It is true that, where one accepts a bequest or devise from a testator, he cannot refuse to carry out what is necessary to accomplish the testator's will. Thus, in Tomkins v. Merriman, 155 Pa., 440, Mr. Justice Williams said that "the doctrine that one who accepts a benefit under a will is estopped from asserting a claim repugnant to its provisions is founded on equitable considerations and has been recognized and applied in this state in many cases, beginning with Stump and others v. Findlay and others, 2 R., 168, and extending to Zimmerman v. Lebo, 151 Pa., 345, and Cummings's Appeal, 153 Pa., 397." "The general rule is, that one who accepts a benefit under a will cannot deny the validity of that instrument. He cannot affirm the will so far as it is beneficial to himself, and deny its validity as to others who are named as beneficiaries. Zimmerman v. Lebo, 151 Pa., 345. But an election in pais to take under a will should be intelligently made and should be unambiguous and positive in its character to amount to an estoppel." Miller's Estate, 159 Pa., 562; White's Estate, 23 Sup., 552; Harrington v. Stivanson, 210 Pa., 10. In Another principle also applies. Miller v. Springer, 70 Pa., 269, it was held that, "in election, if the language of a will admit of being restricted to property disposable by the testator, the inference is, that he did not intend it to apply to that over which he had no power of disposal.' Story, in his work on Equity Jurisprudence, Vol. 2, pl. 1089. 6th Ed., says: "It is upon a similar ground that the doctrine of election has been held not to be applicable to cases where the testator has some present interest in the estate disposed of by him, although it is not entirely his own. In such a case, unless there is an intention clearly manifested in the will, or (as it is sometimes called) a demonstration plain, or necessary implication on his part, to dispose of the whole estate, including the interest of third persons, he will be presumed to intend to dispose of that which ne might lawfully dispose of, and of no more." The suggestion has also been urged that the acceptance of the devise of real estate was equally an election. The doctrine of election originates in inconsistent or alternative donations; a plurality of gifts with intention express or implied that one shall be a substitute for the rest. Therefore, in Zimmerman's Executors v. Zimmerman, 47 Pa., 378, where a clause in a will directing the payment by two of testator's sons of the valuation money of land devised to them, was separate and disconnected from that in which it was asserted that one of them owed him a certain sum of money which he was directed to pay in a particular way, the acceptance of a legacy by one of them was held not such an election to affirm the will as estopped him from the denial of the debt. In Whelen . Whelen, 11 Dist. Rep., 14, a father loaned his son a sum of money, and took an absolute conveyance of certain real estate as collateral security. It was decided that gifts of the father in his will made to his son, which contained no reference to the said property, did not estop the son from showing that the deed was a mortgage. In 11 Amer. & Eng. Encycl. of Law, second edition, p. 62, it is said that "where a testator gives two or more properties of his own to the same person, and one or more would be beneficial to the donee, while the other or others would be onerous, the question arises as to whether or not the donee may accept what is beneficial and reject what is onerous. This species of election is different from election properly so called, which arises, as we have seen, where the donor disposes not alone of his own property, but of property belonging to the donee who is put to an election. In the absence of an intention on the part of the donor to make the acceptance of what is beneficial conditional with what is burdensome, the donee is entitled to take the property that is beneficial and reject the other, even though the burden upon the rejected gift will have to be borne by the donor's general estate. Where, however, onerous and beneficial properties are included in a single and undivided gift, the donee cannot reject the onerous and accept the beneficial. He must take the whole or nothing." Numerous authorities, both in England and in the United States, and especially in Pennsylvania, describe the doctrine of election as exclusively equitable. Ibid., page 64. See Cauffman v. Cauffman, 17 S. & R., 16; Zimmerman's Executors 2 Zimmerman, supra; 2 Story's Equity Jurisprudence, pl. 1075. Now, what do we have before us in this case? The testator, Henry Martin, bequeathed to his sons, both the plaintiffs, James P. Martin and Herbert P. Martin, and the defendant, William R. Martin, as well as his daughter, Alice H. Martin, and his granchildren, Alice Cross and Lizzie Martin Cross, pieces of real estate in fee. But these devises were unconnected with the bequests of the stock of the Henry Martin Brick Machine Manufacturing Company made to the three boys. Therefore, the acceptance of this real estate did not, in our judgment, in any way affect the relation which existed between Henry Martin and his son, William, and did not cancel by election the indebtedness which Henry Martin or the Brick Machine Manufacturing Company owed to William R. Martin, and therefore release the collateral shares of stock assigned by his father to him. It was undoubtedly the duty of William R. Martin to act in good faith to wards the company of which he was an officer. He was the president of the Henry Martin Brick Machine Manufacturing Company, and, at the same time, sole proprietor of the Iron Works, and in the latter capacity he was engaged in furnishing merchandise to the Brick Machine Manufacturing Company. In Keystone Surgical Supply Manufacturing Company v. Bate, 187 Pa., 460, Mr. Justice Dean, in passing upon a somewhat similar question, said: “This transaction comes under the common-law rule, that all such transactions should be closely scrutinized, and it must be shown that the contract is in all respects fair and reasonable; for the parties do not deal at arm's length; a certain degree of confidence and trust is necessarily reposed in the officer by his corporation; his opinion, often, has great weight with his associates, and this gives him an advantage, which he may use for his own interests, in disregard of his duty to the corporation. If it be true, as alleged, that Bate, being a director and member of the building committee, was entrusted along with his associates with the duty of procuring the erection of the buildings at the lowest price, then, after ascertaining from Shoffner that it could be erected for less than $4,000, represented to the directors that it could not be built at actual cost for less than $5,500, and thus secured the contract for his firm at a profit of nearly $1,500, that was a fraud upon the corporation which warranted the rescission of the contract, or it could waive the right to rescind and tender a mortgage for or pay the actual cost of the work performed by the unfaithful director." Therefore, in this case, the same principle applies to the dry pans. It applies also to the price of ordinary castings, but as to these the evidence was presented before us, and we have determined that question. If the assessor shall ascertain that the contract of $150.00 for the Brick Machine Manufacturing Company was inequitable and unjust, then William R. Martin had no right to continue it, after his father's death and he must account for this work at a fair price from that time. When Henry Martin was the president of the Brick Machine Manufacturing Company, and practically owned it, he had the right to make such arrangements with his son, William, as to the price to be paid for castings, as to them should seem proper. They were dealing at arm's length, and what the price was prior to the death of Henry Martin can make no difference now to the plaintiffs, for one of them does not pretend at that time to have had any interest in the company, and the other could not have had more than ten shares, and this the stock which stands in the name of Henry Martin and which we have found has not been sufficiently proven to have been transferred. After the death of the father, of course, the situation changed, and, because of this, we have, at length, considered the complaints of the bill. Should, under the circumstances, a receiver be appointed? In Denney v. Susquehanna Iron and Steel Co., 21 Lanc. Law Review, 1, following a long list of authorities, we said that "the appointment of a receiver is the exercise of the power in aid of a proceeding in equity, and is the subject of sound discretion;" that "the Court must be convinced that it is needful and is the appropriate means of securing a proper end"; that "such an appointment is a strong measure, and not to be exercised doubtingly." In Beaumont v. Beaumont, 166 Pa., 615, the Supreme Court held that "such appointments rest in the sound discretion of the Court, and in exercising such discretion it proceeds cautiously, and is governed by a view of the whole circumstances of the case. No positive or unvarying rule can be laid down as applicable to all cases. If there be no danger to the property, and nothing to show the necessity or expediency of appointing a receiver, none should be appointed." This discretionary power, like other extraordinary equity powers, is exercised only on the principles of necessity, and before a Court possessing it will take the property of an individual or of a corporation out of the hands of its lawful and proper custodians, and commit it to the Court's own officers, there must be clear and well grounded apprehension of impending mischief. See |