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gahela Nav. Co. v. United States, supra. The appraisal must be made, having in mind what we have already said concerning the character and duration of the franchises and the reasonableness of rates. While, with these limitations, the owner is entitled to receive the value of the franchises, having reference to their prospective use as now developed, and to the future development of their use, consideration must also be had of the fact that further investment may be necessary to develop the use, and of the further fact that at any stage of development the owner of the franchise will be entitled to charge only reasonable rates under the conditions then existing. But subject to such limitations, we think it should be said that the owner is entitled to any appreciation due to natural causes, such as, for instance, the growth of the cities or towns in which the plant is situated. Cotting v. Kansas City Stockyards Co. (C. C.) 82 Fed. 850.

Defendants' request 12, "that the fact that the franchises, rights, and privileges of said Maine Water Company are to be taken under this act in no respect destroys or impairs their value to said water company, and cannot diminish or affect the amount to be awarded as just compensation therefor," is approved, and the instruction should be given.

Subject to the suggestions we have made under defendants' request 11, their request 13 is approved, and the instruction should be giv

en.

United States, is just and full compensation to said water company for each and every thing of value of which it is to be deprived by this taking; that, in addition to the special property covered by request 4, the plant, property, franchises, rights, and privileges now held by said water company within the territory embraced by this act contain distinct elements of value-First, as an asset; and, second, as a source of income, having, or not, present and prospective net earning power; that by the taking under this act said water company will be deprived, wholly and forever, both of said asset and of said source of income; that just compensation to said company for what is thus compulsorily taken from it requires that the sum to be awarded as a substitute therefor shall be the full equivalent of everything taken, both in value as an asset, and in net earning power, and such a sum as, in the sound judgment of the appraisers, will be the full money equivalent of all the plant, property, franchises, rights, and privileges aforesaid, and at the same time, if prudently invested at fair current rates of interest, will yield to said company the same net incomes and revenues, and for the same term, that it will be deprived of by this taking; the net earning power, incomes, and revenues aforesaid to be determined under reasonable water rates, after due allowance, on the one hand, for operating expense and maintenance or depreciation, and, on the other

increase or decrease thereof under all conditions affecting the same."

It is as follows: "That in estimating.hand, with due regard to the probable future said franchises, and the present and future net earning power included therein, the appraisers should duly weigh the nature and extent of these franchises, rights, and privileges, whether the same are perpetual or otherwise; also, so far as proved, the rights of the Maine Water Company under all existing contracts, and the value thereof; the extent of existing business, and of the net incomes or revenues now derived or derivable therefrom; the existing demand for new and additional services, and for the development and increase of said business, incomes, and revenues; the past and probable future growth or decay of the territory now served, or capable of being served, under said franchises, in population, in wealth, and in needs and uses for water to be supplied by some water system; and the past and probable future increase or decrease in said net incomes and revenues as affected by these or other surrounding conditions; also the fact that by said taking said water company will be wholly and forever deprived of all said franchises, rights, priv ileges, earning power, incomes, and revenues, and that it is the duty of said appraisers to make, in their sound judgment, just and full compensation to said water company for all the same."

Defendants' request 14, is as follows: "That the true measure of value, under the terms of this act, and under the requirements of the constitutions of this state and of the

Some portions of this request have already been considered so fully that it is unnecessary to repeat. It is doubtless true that the property to be taken, both plant and franchises, are to be appraised, having in view their value as property in itself, and their value as a source of income. The physical property has value irrespective of the franchise, and the franchise without reference to the physical property. But these two kinds of value practically shade into each other. The value of the physical property is enhanced by the existence of franchises which make it usable. The value of franchises is enhanced by the existence of physical property by which they may be profitably exercised. There are these items of property, but only one entire system. There are all of these elements of value, from which is to be estimated the value of the entire property, tangible and intangible, as a whole. The plaintiff is not to take the physical property without the franchises, nor the franchises without the physical property. It will pay one gross sum as an entire value, and take all the property. The consideration of the elements will be useful only as it will enable the appraisers to fix the just compensation to be paid for the entire property as a whole.

But we cannot assent to the proposition that the capitalization of income even at rea

have been approved by this court, and as limited or explained in this opinion. So ordered.

sonable rates can be adopted as a sufficient | rules stated in these requests, so far as they or satisfactory test of present value. Such a capitalization would fix at the present time a specific value which would continue for all time to come, as a fixed and unvarying source of income, no matter how conditions may be changed.

Our attention has been called to no case, resting on the same principles as this one does, where the capitalization of profits has been adopted as the test of present value,certainly not in this country. Take, for instance, the case of Edinburgh Street Tramway Co. v. Lord Provost, App. Cas. 1894, p. 456, cited by defendants. It does not support the doctrine. In that case the arbitrator declined to value the tramway lines by capitalizing the rental, and upon appeal his assessment was affirmed, and the appeal dismissed. It was held that the statute under which the proceedings were had limited the appraisal to construction value, which the arbitrator had considered in the light of the fact that the tramways were then successfully constructed and in complete working condition; in other words, that the company was a going concern. Lord Watson, in the same case, at page 475, said that valuation by rental "is not a satisfactory method in the case of a tramway line which has never been let, and has no competing line within its district." How much importance is attributed to the last suggestion, is not stated. See National Waterworks Co. v. Kansas City, 10 C. C. A. 653, 62 Fed. 853, 27 L. R. A. 827; Newburyport Water Co. v. Newburyport, 168 Mass. 541, 47 N. E. 533. If the franchises were exclusive, if they were perpetual, and if it could be known that what are reasonable rates now would continue to be reasonable, there would be more ground for sustaining such a test. But the franchises are not exclusive. Competition is possible,-even, as the event has shown, more than probable. They are not perpetual, but may be repealed. And what may be reasonable rates at any given time will depend upon conditions which not only may vary, but are likely to vary.. Therefore the basis for capitalization is too uncertain to afford a satisfactory test of value. By this we do not mean to say that, while not a test, present and probable future earnings at reasonable rates are not properly to be considered in determining value. We have already stated that they are.

Defendants' request 15 raises no new question of law. It is sufficient to say the constitution of the United States requires that just compensation should be made to said water company for all its property, of every nature, taken under the act in question, at its full value, not to the taker, but to the seller.

To conclude: The appraisers should be instructed to receive and consider all evidence offered, so far as admissible under the general rules of law, which is pertinent under the

(204 Pa. 295)

BOYER v. WEIMER et al. (Supreme Court of Pennsylvania. Jan. 5, 1903.)

FRAUDULENT CONVEYANCES

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BONA FIDE

GRANTEE-RIGHTS ACQUIRED-EVIDENCE -DECLARATIONS OF GRANTOR.

1. Under St. 13 Eliz. c. 5, bona fide purchasers from a fraudulent grantor are protected, and such protection extends to a purchaser from a fraudulent grantee.

2. In ejectment defendant claimed title as purchaser at a sheriff's sale on a judgment rendered several months after defendant in execution had conveyed the property to plaintiff's grantor. There was no evidence of fraud in such conveyance. Held error for the court to charge that, if the conveyance by defendant in execution was fraudulent as to creditors, it was, void, and plaintiff's grantor acquired no title, and could convey none to plaintiff.

3. Where the good faith of a transfer has been attacked by creditors of the grantor, and some evidence has been introduced of an intent to hinder or delay creditors, subsequent declarations by the grantor are admissible.

Appeal from court of common pleas, Cambria county.

Action by Harry Boyer against S. A. Weimer and A. L. Keagy. Judgment for defendants, and plaintiff appeals. Reversed.

At the trial it appeared that the title to the land in controversy was originally in Annie D. Keck. On January 21, 1895, Mrs. Keck and her husband conveyed the land to Savilla Allison. On November 29, 1900, Savilla Allison conveyed the land to the plaintiff, Harry Boyer. Both conveyances were by deeds of general warranty. On December 12, 1895, S. A. Weimer secured a judgment against Annie D. Keck, and on execution under said judgment bought in the property at sheriff's sale. Weimer secured possession of the premises from a tenant. Under objection and exception the court admitted evidence of declarations made by Mrs. Keck after the execution of the deed from her to Mrs. Allison. The court also admitted under objection and exception the record in the case of Weimer v. Keck.

The court charged in part as follows: "There is one thing in passing that we want to call your attention to (we believe the record will show some little evidence on this question), namely, if there is any evidence to satisfy the jury that Savilla Allison was a married woman at the time she made the deed, the title of the plaintiff in this case would not be perfect; in other words, his title would not be good. Savilla Allison, if she were a married woman, could not convey a good title without her husband Join

1. See Fraudulent Conveyances, vol. 24, Cent. Dig. § 620.

ing in the conveyance. On the other hand, she could transfer title if she were not a married woman at the time of the transfer. * * We have permitted counsel for defendants to call, as if upon cross-examination, Annie D. Keck, who made that transfer, and we permitted them to call her because she was an interested person. If the transfer was not a bona fide one, then the plaintiff in this case was misled, and he, having a warranty deed, as shown by the evidence, might recover his purchase money. * * * We submit all the evidence to you, and advise you that you can pass upon that evidence. If it satisfies you that the transfer from Mrs. Annie D. Keck to Savilla Allison was made for the purpose we have stated, and was a fraudulent transfer, then, on the principle that fraud vitiates all contracts, that contract would be void, and would pass no title to Savilla Allison, and, having no title, she could not convey any to the plaintiff in this case. Now, gentlemen, it narrows down to that."

Verdict and judgment for defendants. Plaintiff appealed.

Argued before MCCOLLUM, C. J., and MITCHELL, DEAN, FELL, BROWN, MESTREZAT, and POTTER, JJ.

S. L. Reed, for appellant. Robert S. Murphy, Thomas E. Murphy, D. P. Weimer, G. C. Keim, H. E. Baumer, and R. E. Creswell, for appellees.

FELL, J. Apparently there was much merit in the defense, but the case was submitted to the jury on grounds that are untenable. The real estate for which ejectment was brought was conveyed in January, 1895, by Annie D. Keck to Savilla Allison, who, in March, 1900, conveyed it to Henry Boyer, the plaintiff. In December, 1895, more than 11 months after Mrs. Keck had parted with her title, a judgment was obtained against her, and in September, 1897, the real estate was sold by the sheriff, under proceedings under the judgment, as her property. The defendant was the purchaser at the sheriff's sale, and obtained possession of the property from the tenant who occupied it. It will be seen that the plaintiff had a perfect record title. The defendant had none, as the judgment under which the sale was made was not a lien. The defendant, therefore, could succeed only by showing that both of the transfers by which the title was vested in the plaintiff were collusive and fraudulent. He succeeded in showing circumstances connected with the transfer from Mrs. Keck to Savilla Allison that cast doubt on the good faith of the parties to that transfer; but there was not a word of competent testimony that tended to impeach the conveyance to the plaintiff. As the case stood at the close of the testimony, the plaintiff was

vor.

entitled to a peremptory direction in his faThe court, however, instructed the jury that, if the transfer by Mrs. Keck was made not in good faith, but for the purpose of defrauding her creditors, it was void, and that Savilla Allison acquired no title, and had none to convey to the plaintiff, whose only remedy, if he was misled, was by an action on a warranty in the deed to recover back the purchase money. This is not the law. It is true that, as against creditors defrauded, Savilla Allison's title was invalid, if she had notice or knowledge of the fraud of her grantor; but the title of the plaintiff could be impeached only by proof of notice affecting him, or of his knowledge of the fraud. Bona fide purchasers from a fraudulent grantor are protected by the statute of 13 Eliz. c. 5, and it is a settled rule that the protection extends to a purchaser from a fraudulent grantee. Hood v. Fahnestock, 8 Watts, 489, 34 Am. Dec. 489. The deed of a fraudulent grantor is not a nullity, nor ineffective to devest his title as against the paramount interest of a bona fide purchaser.

As the case goes back for trial, the exceptions to the admission of declarations made by Mrs. Keck after she had parted with the title require notice. The general rule that the declarations of a grantor made after the execution of a grant cannot be used to impeach it has been so far modified that, when the good faith of a transfer has been attacked by creditors, and some evidence has been advanced to show a common purpose or design by the parties to hinder, delay, or defraud creditors, subsequent declarations by the grantor are admissible. Hartman v. Diller, 62 Pa. 37; Souder v. Schechterly, 91 Pa. 83. The vital question in this case was whether the plaintiff had notice or knowledge of a fraud on the creditors of Mrs. Keck. Until there was some testimony tending to show knowledge on his part, the testimony objected to was inadmissible. As the record of the trial then stood, there was nothing to impeach his good faith as a purchaser for value, and the testimony should have been excluded.

The suggestion in the charge that, if Savilla Allison was a married woman at the time of her transfer to the plaintiff, she still held the title, as her deed was ineffective without the joinder of her husband, was not warranted by the testimony, even were it competent for a third party to question the conveyance on that ground.

To what extent the possession of the defendant was notice to the plaintiff when he acquired title, and whether the burden was on the plaintiff after notice to prove the payment of the purchase money, are matters not raised by the exceptions, and do not at this time call for decision.

The judgment is reversed, and a venire facias de novo awarded.

(204 Pa. 305)

ULLOM V. HUGHES. (Supreme Court of Pennsylvania. Jan. 5, 1903.)

QUIETING

TITLE-EXCLUSIVE

REMEDY-REMOVING CLOUD-OPTION TO PURCHASE. 1. Act June 10, 1893 (P. L. 415), entitled "An act to provide for the quieting of title to lands," does not provide an exclusive remedy, but merely a cumulative one, and either party may go into equity for the rescission of a contract or for specific performance thereof, and a vendee has the further choice of ejectment or an action for damages for breach of the contract.

2. Where an owner of land has given an option thereon, and claims that such option has not been fully exercised, he is entitled, under Act June 10, 1893, providing for the quieting of titles to land, to sue to remove the cloud from his title.

3. In an action to quiet title under Act June 10, 1893, where plaintiff claims a failure by defendant to exercise option to purchase land, defendant may disclaim as directly provided in the act, or may deny default on his part, and ask for a conditional verdict as in ejectment, or may set up a default on the part of the vendor, and recover damages for breach of contract.

Appeal from court of common pleas, Greene county; Taylor, Judge.

Action by Harrison Ullom against William T. Hughes to quiet title. From an order refusing an issue, plaintiff appeals. Reversed.

From the record it appeared that on August 9, 1899, Harrison Ullom, an owner of lands in Greene county, gave to William T. Hughes an option in writing to purchase the coal under the said lands and a portion of the surface. The option ran until December 1, 1899. Hughes assigned his interest in the option to one Slease. Slease, on November 30, 1899, caused a notice of acceptance to be served on Ullom. The agreement or option was subsequently recorded. Each party denied that the other had performed the covenants undertaken in the agreement. Taylor, P. J., filed an opinion, in which, after reciting the agreement, he found as follows:

"The terms of the agreement or option contained therein, as above set out, are not in dispute between the parties. The only question arising under this agreement or option being whether or not the parties to it and their assignees have complied with its terms, on the one hand, to be entitled to a decree of specific performance, and, on the other hand, to a decree of cancellation of the contract. Under the undisputed facts of the case as disclosed by the petition and answer, does the act of June 10, 1893 (P. L. 415) apply? The respondent makes no denial of petitioner's title or possession of the coal as described in said agreement, except in so far as the same are affected by the terms of said agreement and notice of acceptance, or that he has ever paid the purchase money so as to devest petitioner's title, but that the petitioner and his wife contracted to convey the same to him, which contract he asks be enforced

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by a chancellor in a court of equity. petitioner alleges that respondent's rights under said agreement or option have been lost by his failure to perform his part of the agreement. Under the act of June 10, 1893 (P. L. 415), and the authorities of Del. & Hudson Canal Co. v. Genet, 169 Pa. 343, 32 Atl. 559, and McGarry v. McGarry, 9 Pa. Super. Ct. 71, the court of common pleas is required to find two facts to be true from the petition before said act is mandatory of an issue. They are the facts of the petitioner's possession and the (respondent's) or adversary's denial of the title. Of the fact of the petitioner's possession there is no denial, and we so find the fact of the petitioner's possession in this case; but we do not find as a fact the denial by this adversary of the petitioner's title, but an affirmance of the petitioner's title by his adversary to said coal and mining rights. By the agreement, notice of acceptance, and a tender of the purchase money, as set up by respondent, he has but an equity in the coal and mining rights, of which the legal title and possession are both in the petitioner, and which, the respondent contends, under a contract between them, should be conveyed to the lessee's assignees. If it can be held under the undisputed facts of this case that the act of June 10, 1893 (P. L. 415), applies, on a trial on an issue framed, before the respondent could recover, if the facts found by a jury were with him, he would have to tender the purchase money, and this would be, in effect, turning an action of ejectment into a proceeding for specific performance of a contract, an existing remedy for the enforcement and determination of contracts that the act of June 10, 1893, was never intended and does not supersede; nor does said act provide a new remedy to settle and adjudicate questions arising out of contract, nor a new remedy for the specific performance or cancellation of contracts relating to the sale of real estate."

Argued before MCCOLLUM, C. J., and MITCHELL, DEAN, FELL, BROWN, MESTREZAT, and POTTER, JJ.

A. H. Sayers and Joseph Patton, for apbellant. D. C. Cumpston, A. F. Silveus, and M. R. Travis, for appellee.

MITCHELL, J. The plaintiff, being the owner of land, gave an option to the assignor of the present defendant to purchase the coal and part of the surface upon notice of acceptance before a certain date, payment, etc., the plaintiff covenanting on his part to furnish a survey, abstract of title, and general warranty deed, clear of incumbrances. As to these facts there is no dispute between the parties, but each charges the other with subsequent default in the performance of his covenants. The learned judge below held that there was no denial of plaintiff's title, but that defendant's claim was in affirmance

of it, and an assertion of a mere equity in subordination, and dependent upon it under the contract. He held, therefore, that the case was not within the statute. This view was erroneous, in taking too narrow a definition of a denial of title. The defendant here, it is true, does not deny the plaintiff's former title, or assert in himself a title paramount; but he does deny the plaintiff's present title and right of possession by a claim that it has passed out of plaintiff to himself under the agreement. This is exactly the kind of denial of title that is involved in an equitable ejectment on the contract of sale,-denial of present title by affirming prior title, but averring that it has passed to the vendee. It is conceded on all hands that such an ejectment would lie here, and the statute expressly gives the verdict in an issue under the present rule the same force and effect as in an ejectment on an equitable title. The act of June 10, 1893 (P. L. 415), is entitled "An act to provide for the quieting of titles to land," and provides that any person in possession of land and claiming to hold or own possession by any right or title whatsoever, whose "right or title or right of possession shall be disputed or denied," may apply by bill or petition and obtain a rule, etc. The intent of the act is to give an owner in possession an additional, speedy, and convenient remedy for immediate trial and adjudication of any claim of adverse title to part or the whole of his land. It tends to equalize and assimilate the position of claimants of title, whether in or out of possession. As was pointed out in Del. & Hudson Canal Co. v. Genet, 169 Pa. 343, 32 Atl. 559, it is another step in the same direction as the enlargement of equitable remedies, the Acts of May 21, 1881 (P. L. 24) March 8, 1889 (P. L. 10), and May 25, 1893 (P. L. 131, etc.), which have relieved the owner in possession from the common-law necessity of inactive waiting for an attack on his title, and have enabled him to force an immediate contest and settlement. That case logically determines this.

The consequences deprecated by the court below do not follow. The act of March 21, 1806, has no bearing on the case, for the act of 1893 does not give a new right enforceable only in the prescribed way, but merely a new remedy for a right always existing to defend title and possession. And the new remedy is plainly intended to be cumulative only. All the old remedies remain unaffected. Either party may go into equity,-the vendor for rescission or cancellation of the contract, and the vendee for specific performance. And the vendee still has the further choice of an ejectment, or an action for damages for breach of the contract. In either of these ways he can have his case tried by a jury. But formerly the vendor had no such remedy. On a mere option, which he did not admit had been accepted, as in the present case, he could not sue at law, and could only

get rid of the cloud on his title by going into equity. Under this act he may have the facts of acceptance or default determined by a jury. The act expressly assimilates the proceeding to an equitable ejectment, and there is no valid reason why the remedy should not have a liberal construction in furtherance of the expressed purpose. If the plaintiff is in possession under claim of title, and the defendant makes an adverse claim, whether by title paramount or title dependent by contract on his own, the dispute or denial within the contemplation of the act exists, and a case for an issue is made out. The control of the court over both the form and the substance of the issue is ample, and should be exercised to fit the requirements of the real controversy between the parties. The defendant, on coming in to answer the rule, may disclaim, as provided in the act, or he may deny default on his part, and ask for a conditional verdict, as if in ejectment; or he may set up a default by the plaintiff, and elect to recover damages under a plea of set-off, as in an action for breach of contract. The court should mold the issue according to the circumstances, so as to reach a trial on the merits.

Judgment reversed, and an issue directed to be awarded.

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EJECTMENT-EVIDENCE-PAROL GIFT-STAT

The

UTE OF FRAUDS-WITNESS-COMPETENCY. 1. Plaintiff in ejectment claimed by deed from his father. Defendant, who was a nephew of plaintiff, claimed under a parol contract with plaintiff's father before the deed to plaintiff, under which contract he took possession. mother of defendant testified that after he became of age his grandfather, in presence of witnesses, agreed that, if defendant would give up his trade and live with him, he would leave him the farm in controversy. There was evidence of declarations by the grandfather confirming such promise, and a paper signed by the grandfather was introduced, purporting to be a will, leaving the land in question to defendant. Held, that the evidence was sufficient to sustain a verdict for defendant.

2. An instrument purporting to be a will, leaving land which had been given to another by parol to such person, was a sufficient memorandum in writing, within the meaning of the statute of frauds.

3. Where defendant in ejectment claimed under an alleged promise of his grandfather to convey the property to him by will, he was incompetent to testify as to such agreement after the death of his grandfather.

Appeal from court of common pleas, Greene county; Crawford, Judge.

Action by David Shroyer and George B. Shroyer against William D. Smith. Judgment for defendant, and, on death of David Shroyer, plaintiff G. B. Shroyer appeals. Reversed.

Argued before MCCOLLUM, C. J., and MITCHELL, DEAN, FELL, BROWN, MESTREZAT, and POTTER, JJ.

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