DEAN, J. In pursuance of proper ordinances, the city of Pittsburgh, on 21st November, 1887, awarded contracts for grading, paving, and curbing Boggs avenue. The work was completed and accepted from the contractor August 14, 1889. On January 5, 1891, the act of assembly under which the work was done was declared unconstitutional. Then the legislature passed what is known as the "Curative Act," approved May 16, 1891, legalizing the grading and paving of streets either previously completed, or on the way to completion. This act was pronounced constitutional February 1, 1892. On December 31, 1891, Mary E. Lafferty, plaintiff, by articles, sold to A. A. Milligan a lot on the western side of Boggs avenue, and fronting thereon 186 feet, for the consideration of $2,100; of this, $1,000 to be paid in cash, on delivery of a general warranty deed, and balance, $1,100, to be paid in two years, the deferred payment to be secured by mortgage on the premises. The grantor stipulated to convey the lot free and discharged from all liens and incumbrances. In pursuance of the contract, Mrs. Lafferty, joined by her husband, on the 8th of February, 1892, executed and delivered a deed, with covenant of general warranty, to Milligan, who on the same day paid the $1,000, and delivered the mortgage securing the $1,100. Before this, however, on July 8, 1891, under the provisions of the curative act, the court of common pleas appointed viewers to assess upon property abutting upon Boggs avenue the cost of curbing, grading, and paving which had been done under the contract of 1887, as authorized by the unconstitutional act of 1887. The report of these viewers was submitted to and approved by the court, 27th of November, 1891. On appeal to this court, the decree was reversed, and report set aside, January 6, 1893. On the record being remitted, it was, on February 18, 1893, referred back to the viewers, who again assessed the cost of the improvements, and made report to the court, December 6, 1893, which report was confirmed by final decree. By the report, there was assessed against this lot, $410.86; paving and curbing, $903.43; total, $1,314.29. Sci. fa. being issued on the mortgage, Milligan makes defense, averring the assessment to be an incumbrance, against which the covenants in his conveyance protect him. The parties agreed upon a case stated, embodying the foregoing facts, for the judgment of the court as to whether, on the facts, there was an incumbrance at date of conveyance. The court thought the case was with Milligan, the defendant, and entered judgment accordingly; and from that plaintiff brings this appeal, and argues that at the date of the conveyance there was no incumbrance or lien for improvements on Boggs avenue.

The curative act was in force from and after 16th May, 1891. On December 31,

1891,-nearly seven months afterwards,this contract to convey was entered into, and it must be presumed the parties contracted in view of the law as it then stood. The act provides, whenever any city, by ordinance heretofore passed, has directed the improvement, and has instituted proceedings for the assessment of damages, and the act of assembly under which said improvement has been made has been declared unconstitutional, whereby such assessments cannot be made as contemplated, "now, by this act such improvements are made valid and binding," and then proceeds to declare that such city is "hereby authorized to ascertain, levy, assess and collect such costs, damages and expenses," and then, in the following sections, prescribes the method of assessment and collection, the same as pursued in this case. Thus, the act recognizes and enforces a subsisting claim for the assessment of damages to be paid and benefits to be collected because of the improvement already made; an equitable claim is made valid and binding,-one which, without the act, is unassessable, and therefore uncollectible. The act then declares, when the court has made its final decree confirming said report, fixing the amount of the assessments in each case, the sums thus ascertained as benefits "shall be a lien on the property assessed." There was here no specific lien until the decree of the court confirming the report, but an incumbrance is not necessarily a lien determinate in amount. Mr. Rawle, on Covenants for Title (page 90), says "incumbrance" was not one of the terms of the law, and no definition of it will be found in the older books. Within the present century, an "incumbrance" has been defined to be "every right or interest in the land which may subsist in third persons, to the diminution of the value of the land, but consistent with the passing of the fee by the conveyance." So an inchoate right of dower, which could become consummate only on the contingency of the survivorship of the wife, has been held to be an incumbrance, where the covenant was to convey free of all incumbrances. Yet this is a mere right, in a third person, which diminishes the value of the land. So, assuming here there was no specific lien on this lot, as to amount, until confirmation of the assessment by the court, there was, by the statute, an incumbrance on all the lots on the street, by reason of the improvement. The statute says: "Whenever any city * has by ordi

nance authorized * ** the grading, paving, macadamizing * of any street * and in pursuance of such ordinance work or labor has been done, or is being done * and properties in the neighborhood of any such improvement, have been or will be when completed peculiarly benefitted by the same, but owing to the act of assembly under which any such improvement has been made, being de

clared unconstitutional are invalid now by this act such improvements are made valid and binding * * * * and any such city is hereby authorized to ascertain, levy, assess and collect," etc. Laws 1891, p. 71, § 1. Proceedings to assess and collect only included work completed within two years preceding the date, 16th May, 1891. The work on this street was completed 14th August, 1889,-within two years. Therefore, a burden or incumbrance was imposed upon this lot for this improvement, to be made a specific lien in amount as soon as the proceedings to ascertain the amount were completed. There was clearly a legal right or claim in a third person-the city— on this lot, to the diminution of its value, from the 16th May, 1891. With this incumbrance before her, the plaintiff made her contract to convey, "discharged of all liens and incumbrances."

It is argued that, if this be an incumbrance, then the covenant, if broken at all, was broken as soon as the deed was executed; if the right of action existed, it was complete the moment the covenant covenant was made; but there could have been no action at once, because then it could not be known whether defendant would be assessed with expenses. This argument assumes, as a fact, that which is not proven, and is directly contrary to the facts agreed upon, and the obvious inferences therefrom, in the case stated; that is, that at the date of the conveyance there was no known incumbrance. The right of the city to assess the lot for the improvement already made, and to thereby diminish its value, was known. The exact weight of the burden it might impose was not precisely known. So far as concerned the city, that could only be determined by the statutory proceeding before the board of viewers. But that when the proceeding was had the event would be a lien, for greater or less amount, on this lot, was plain, from its relation to the costly improvement. A mechanic who has expended his labor on a house has his right to a lien for the value of the labor. The value, if there be no contract price, cannot be determined until the lien be filed, and then, perhaps, not definitely, until judgment on scire facias; but, if the lien be not filed until the last day of the six months, that fact does not affect the right during the interval to impose the burden. The incumbrance is there, indefinite as to amount, because of indefiniteness of opinion as to the value of the labor; but there is absolute certainty of opinion as to the labor having some value, for there stands the house, the product of the mechanic's labor. Here, the improvement of the street on which this lot fronted had been completed. The event demonstrated that the burden imposed by the act of 1891 was a very heavy one. But whether, at the date of the deed, it appeared light or heavy, being on Boggs avenue, it was ob

vious it could not escape assessment. Therefore, there was upon it an incumbrance. If the case stated had embodied as a fact that at the date of the conveyance it could not be known whether this lot would be called upon to pay any assessment, the argument of the learned counsel would probably have been forcible. But he agrees that this work had been completed; that by a constitutional statute the cost of it had been imposed upon the lot owners; that this lot's share of the cost had been judicially ascertained to be $1,314.29, under the contract for work in 1887. The inevitable inference from these facts is that there was a known incumbrance at the date of the conveyance, although afterwards made certain in amount. This gave an immediate right of action to the covenantee, and whether, in a suit on his covenant, his damage would have been measured by the report of viewers, or would have been heavy, or only nominal, by the judgment of a jury, it is not important here to inquire; for counsel for appellant has agreed, in his case stated, that this judgment shall depend solely on whether the right to assess, at the date of the deed, was an incumbrance. The judgment is affirmed.

In re DICKSON et al.
Appeal of BELL.

(Supreme Court of Pennsylvania. Jan. 7, 1895.)

ASSIGNMENT FOR BENEFIT OF CREDITORS WHAT CONSTITUTES.

An assignment by insolvents to one to whom they were not indebted to prefer certain creditors in whose benefit they had a few hours before confessed judgment, within one hour before the execution of the general assignment, constitutes a general assignment, within Act April 17, 1843, and inures to the benefit of all the creditors of the assignment.

Appeal from court of common pleas, Allegheny county.

From an order in the matter of a voluntary assignment of Dickson & Co., F. P. Bell, assignee, appeals. Affirmed.

The following is the first opinion of the court below:

"On the 21st day of February, 1890, Dickson & Co. executed and delivered to Frank P. Bell a deed of voluntary assignment for the benefit of creditors, which was accepted the same day, and was afterwards duly recorded. Prior to making this assignment, on the 20th day of February, they confessed three judgments in common pleas No. 1, at Nos. 310, 311, and 312 of March term, 1890, D. S. B., upon which executions were issued the same day, and, on January 21st, confessed two other judgments in favor of W. A. Schmidt, in trust for certain creditors, at 205 and 206 of March term of said court, upon which executions were issued about a half hour before the execution of the deed

of assignment to Bell. On the 20th day of February, Dickson & Co. executed an assignment to Waldman A. Schmidt, trustoe for the benefit of our preferred judgment creditors, entered on the 20th day of February, A. D. 1890, all and every our book accounts, as shown by our said books, against all the parties our debtors on our said books, said accounts being shown in the schedule hereunto annexed, and marked "Exhibit A"; and further providing that, in case the judgments were paid in full out of the proceeds of execution, said accounts should be retransferred to Dickson & Co., and, if not paid in full, the trustee should collect said accounts, and apply the proceeds thereof to the payment in full of said judgments, the balance to be transferred to the said Dickson & Co., or their assigns, for the benefit of the remaining creditors of said firm.' Upon the same paper is written an assignment to the same W. A. Schmidt, trustee, as security for other judgments confessed to him as trustee for creditors named, 'the above-mentioned balance, if any,' 'upon the same terms and conditions as above set forth; any balance remaining to be by him transferred to said Dickson & Co., or their assigns.' On February 27, 1890, an agreement was entered into by the assignee, the sheriff, and the attorney of the judgment creditors, by which the sheriff delivered possession of the personal property levied which the assignee agreed to sell, and pay the proceeds to the sheriff, to be applied to the executions in his hands. The same day, W. A. Schmidt, by writing, 'authorized F. P. Bell, assignee of Dickson & Co.,' to collect the book accounts, and pay the proceeds to Schmidt, until the judgments should be fully satisfied; and the balance to be held by Bell, as assignee, 'according to the terms of the said assignment of said book accounts, and by virtue of the aforesaid deed of assignment.' The assignee thereupon took charge of the entire property of the firm,--personal property under execution and book accounts,-and proceeded to administer the same, and has brought the entire proceeds into his account.

"The property being the stock of goods in a wholesale drug store, the arrangement made with the sheriff was advisable and politic. Such a stock would certainly have been sacrificed at a public sale, and the increased proceeds of a private sale would doubtless be more than sufficient to pay the additional expense. No objection has been made to the payment of the proceeds of the personal property to the sheriff, except as to some items of his charges, which are alleged to be excessive. Some of the creditors have objected to the application of the moneys collected from loose accounts to the payment of the judgments, upon which they allege the judgment creditors had no lien. This depends upon the validity of the assignment to W. A. Schmidt. The assignment to W. A. Schmidt is in terms an assignment in trust

for the benefit of certain creditors, made by the debtors on account of inability to pay their debts, as shown by their confession of judgment to 'preferred creditors' and their general assignment made the same day. It therefore comes expressly within the act of April 17, 1843, and must be 'held and construed to inure to the benefit of all the creditors, and be subject in all respects to the laws now in force relative to voluntary assignments.' Miners' Nat. Bank's Appeal, 57 Pa. St. 193; Wallace v. Wainwright, 87 Pa. St. 263. When Schmidt authorized F. P. Bell, as assignee, to collect their moneys, he had no power to authorize him to appropriate the money to any special creditors in exclusion of others. But, as such assignment was by the act of 1843 made subject to all laws relating to voluntary assignment, it should have been recorded within thirty days, and, not having been so recorded, became void, and the property reverted to the assignors by virtue of the general assignment passed to Bell, as assignee. He was therefore bound to account for these moneys as assignec, which he has done in his account filed. But having applied these moneys to payment of the judgment creditors, in exclusion of the general creditors, his account must be rectified in this respect.

"It follows, then, that the account of the assignee is composed of two funds,-that derived from the sale of the personal property which he received by virtue of the agreement with the sheriff, and which by his agreement he was bound to pay to the sheriff, to be applied by him to satisfaction of the executions in his hands; the other derived from the book accounts, and distributed among the creditors generally. By the account it appears that the first of these funds amounts to $16,475.29, and the second to $8,907.56. Each of these funds must have its own burden of the expense of administration. The judgment creditors having agreed that the personal property levied on should be sold by the assignee, the expense incident to such sale, including the compensation of the assignee for that part of the work, must be charged to that fund. The balance of the fund is properly applicable to the judgments. The second fund can only be charged with the expense incident to its collection and administration, including compensation to the assignee for that part of the work. When the balance of each fund has thus been ascertained, the balance of the first fund will be appropriated to payment of the judgments in the order of their lien. The balance of the second fund will be appropriated to the remaining indebtedness, including so much of the judgments as may remain unpaid. The judgment creditors, having the right to participate in two funds, will be entitled to prorate with general creditors for the full amount of their claims in distribution of the second fund, and not merely on the balance, unless such proportion

is more than sufficient to pay their claims in full. The account as filed does not give the data necessary to make these distributions. The amount of expenses chargeable to each fund cannot be accurately determined without some further testimony, and the standing of the execution creditors cannot be accurately determined until this has been done, and the order of their liens fixed; and, besides, as these changes involve considerable complication, it is proper that the parties interested should have the opportunity to be heard before the auditor, and to take exceptions, if they think proper, to his action in these matters. We cannot anticipate all the questions which may arise, and will therefore return the case to the auditor, with instructions to carefully restate the account upon the principles herein indicated, with right in the parties to except to his findings as upon original reference. The other exceptions filed in the case we will not dispose of now. They may be submitted to the auditor for his consideration."

the

leged that the claims were assigned to him. He took from Dickson & Co. judgment notes payable to himself, as trustee for the parties, but calling himself 'trustee' would not change his character as attorney or agent. The claims still belonged to the parties, and they had entire control of them. He did not become a trustee until Dickson & Co. made the assignment to him, as 'trustee of our preferred judgment creditors.' By this assignment the legal title to the property was placed in Schmidt, but the beneficial interest belonged to the clients whom he represented. The legal and equitable titles did not unite in him. He had the power to dispose of the property, but solely for the purpose of paying certain indebtedness of Dickson & Co., and, when this purpose was accomplished, to turn over the balance to Dickson & Co. The assignment was the voluntary act of Dickson & Co. to a person to whom they were not indebted, for the benefit of other persons to whom they were indebted; made when they knew they were insolvent, as is shown by the fact that it was executed a few hours after confessing judgments to the amount of $20,000, and within one hour before the execution of a general assignment for the benefit of creditors; and on its face recognizes the fact of insolvency by describing the parties interested as 'preferred judgment creditors.'

court below:

"This case is before us upon exception to a second report. Upon a former report we held that an assignment of the book accounts of the firm to W. A. Schmidt was a voluntary assignment for the benefit of creditors, subject to the provisions of the act of April 17, 1843, and therefore accrued to the benefit of all the creditors; and the proceeds, having come into the hands of Frank P. Bell, and being brought into his account, should be distributed pro rata to all the creditors. The matter was referred again to the auditor, to make distribution on this principle. Application was made by counsel of the assignee to the court to direct the auditor to receive testimony affecting the question. We did not deem it necessary to do so, and did not make any order in the premises, but suggested that the testimony should be offered to the auditor. An offer was made to him, but the auditor, believing that his duty was limited by the former ruling of the court, declined to receive the evidence. The importance of the matter justifies a further consideration of the question, and we have considered it as if the assignee had proved what he proposed to prove.

"The offer was to prove by W. A. Schmidt that prior to the 20th day of February, 1890, certain creditors named 'constituted him their trustee, with power to collect and adjust all claims which they, or either of them, had against Dickson & Co., the assignors in these proceedings.' The detailed statements show that these several parties had respectively 'placed their claims in the hands of said Schmidt for collection, and authorized him to collect and adjust them on their behalf.' This would not constitute him a trustee. was a mere agent or attorney to collect. Being a member of the bar, he personally received them as attorney at law. It is not al

He

"As was said in Lucas v. Railroad Co., 32: Pa. St. 464: 'We have here property, a trustee, a trust, and creditors of an insolvent company, and the simple question is wheth er, by an ambiguous invasion of language, the real meaning of this instrument can be so covered as to defeat the operation of a most salutary law.' In Wallace v. Wainwright, 87 Pa. St. 266, Judge Sharswood says: 'None of the acts of assembly relating to assignments for the benefit of creditors have required that they should be drawn in. any specific form. Since 1818, property transferred to one person, to be employed, paid over, or converted for the benefit of others, has been held to be property held in trust, within the operation of the statutes.' In Fallon's Appeal, 42 Pa. St. 235, Chief Justice Lowrie said: 'Of course, the courts cannot allow the law to be evaded by any sham departure from the general form. of assignments; and where the transaction is substantially an assignment for the benefit of creditors, involving no other important purpose that would be prejudiced by bringing it under the act of 1818, the substance, rather than the form, must be regarded." And in Chaffees v. Risk, 24 Pa. St. 432, Judge Lowrie defined a trust as existing 'where the legal estate is in one person, and the equitable interest in another.' These cases, in our judgment, clearly establish the character of the assignment in this case as a trust for the benefit of creditors, which, not being recorded, was void, under the act of March 24, 1818. The property was turned over by

Schmidt to Bell, the general assignee, who has brought the proceeds into his account for distribution. The property was his and is distributable under the assignment to him. Kern v. Powell, 98 Pa. St. 253. We have carefully examined all authorities cited by counsel for the assignee, and find no reason to change the conclusion to which we came upon a former hearing of the case. This disposes of the first exception.

"We do not see that the fact that the accounts are said to be as collateral security affects the case as suggested in the seventh exception. The transfer is absolute; the subsequent limitation is conditional. It is still a transfer in trust for the benefit of creditors. "The 2d, 3d, 4th, 5th, and 6th exceptions relate to the disposition of the expenses of administration, as appears by reference to the former opinion filed in this case. After

a levy had been made on all the personal property of Dickson & Co., by agreement of the assignee and judgment creditors with the sheriff, all the property was delivered to the assignee, to be sold by him, and the proceeds to be appropriated, first, to the sheriff of Allegheny county, to the amount of above debt, interest, and costs upon said suits of execution, if a sufficient amount be realized from said sales. Schmidt then turned over to the assignee the accounts which had been assigned to him. The proceeds of these two properties constitute the fund for distribution. Dickson & Co. had no other estate. The court then held that 'each of these funds must bear its own burden of the expense of administration.' We then said: 'We cannot anticipate all the questions which may arise, and will therefore return the case to the auditor, with instructions to carefully restate the account upon the principles herein indicated, with right in the parties to except to his findings as upon original reference. The other exceptions we will not dispose of now. They may be submitted to the auditor for his consideration.' The auditor has made his report, in which he has charged a portion of the expenses to each fund. The counsel for the assignee claims that no part of the expenses of administration should be charged against the proceeds of stock which had been levied on by the sheriff, because, by the agreement between the judgment creditors and the assignee, the proceeds were to be paid to the sheriff in satisfaction of his execution. In Kent's Appeal, 87 Pa. St. 165, the power of the assignee to make such assignment was recognized, but we find no case in which the question of the expenses of such transaction has been considered. The parties must have known that the sale of the goods would involve considerable expense, and, when they speak of 'proceeds,' it may be assumed that they meant the amount of money produced, less the costs of sale. If there were no other fund, it would scarcely be contended that, under such an agreement, the assignee would not have the right

to retain his costs and expenses. There being another fund upon which the judgment creditors had no special claim cannot change the effect of the agreement. We doubt if the assignee could agree to impose the costs of selling the goods subject to lien upon the general fund. It would be unjust to take the fund applicable to general creditors to pay the costs of increasing the fund applicable to preferred creditors, though the general creditors might be incidentally benefited by paying those claims, and thus to a certain extent relieve the general fund. But the assignee in this case did not attempt to make such an agreement, and it certainly cannot be implied. We are therefore of the opinion that the fund derived from sale of goods should be charged with the expenses attending its administration.

"The expenses incurred by the assignee were largely for rent of store, clerk hire, etc. The appraisement of the goods occupied 22 days, and required assistance in preparing for the appraisers. The appraisement of book accounts must have taken but little time. Upon a careful examination of the items of expense which the auditor has charged to the stock accounts, we find but one item which is not clearly due to that part of the business. This is the allowance for counsel fees, $500. We think a fair proportion of this should be charged to the general fund; say $250. As the stock does not fully pay the first judgments, and, as they are entitled to pro rata with other creditors upon the general fund until paid, it makes no practical difference; but, in order to make it accord with principle, we charge that much to the general fund. This disposes also of exception 8, which claims that both funds should have paid the executions in order.

"The ninth exception is that the auditor erred in surcharging the assignee with any sum whatever.' Tenth renews exceptions originally filed, which are to the same effect. In the first report the auditor surcharged the accountant with $156, excessive payment to appraiser. He allowed them $1 a day for the time occupied, and $102 paid assistant in preparing the goods. The surcharge was certainly proper. He also surcharged allowance for watchmen, $127.50. These watchmen were first employed by the sheriff, and they remained some time after the agreement by which the goods were turned over to the assignee. The auditor allowed pay for ten days, and surcharged the balance. In this we think he was right. But in this report he has made an error. In the first report he was dealing with a balance shown by the account. As these sums were improperly credited, it could only be corrected by surcharging it, and thus increasing the balance. In this report the auditor deals with funds as a whole, and deducts expenses to obtain a balance. In the matter of appraiser's fees he credits the whole amount paid, and it would be proper to place the excess on the