certain shares of stock and the dividends received thereon, or their market value, which he says were set apart as Clinton's share in the estate of his mother, and now equitably belong to him, but which the defendant's executors say still remain in the residuum of the estate and have never been distributed or assigned to Clinton's trustee. It may be added here that the trust estate, claimed to have been set apart for the benefit of Clinton, whether in the hands of the executors or of the trustee, or of both, less proper credits, is insufficient to pay the plaintiff's claim in full.

The case shows that defendant's executors, the trustee being one of them, filed in September, 1908, in the probate court, their first account in which they charged themselves for "dividend on Pepperell Manufacturing Company (6 shares held for Clinton Palmer) $36," and for "dividend on Pennsylvania Steel (10 shares held for Clinton Palmer) $35." They asked to be allowed as paid or delivered to each of four of the residuary legatees, as follows: 6 shares of Pepperell stock and 10 shares of Pennsylvania Steel stock, of the aggregate value of $2,550, for each of these legatees. They then stated as showing the balance of the estate in their hands: Cash in bank, $1,220.62; railroad stock appraised at $425; furniture appraised at $553; 8 tons of coal; and "special fund held for trustee of Clinton Palmer:

ment of his claim may fairly be asserted upon a broader ground.

[1] The case shows that early in 1908 the executors divided the Pepperell stock and the Pennsylvania Steel stock remaining in the residuum into five equal parts, and delivered one part, 6 shares of Pepperell and 10 shares of Pennsylvania Steel, to each residuary legatee, including Francis Palmer, trustee for Clinton C. Palmer. Both the Pepperell and the Pennsylvania stocks assigned to the trustee were transferred to him on the books of the respective corporations. The Pepperell stock, except three shares sold to provide the means to pay the Haley judgment, still stands in his name. Several months after the original distribution, the trustee retransferred the Pennsylvania Steel stock on the books of the corporation to the executors, and it still stands in their names. The trustee has received all the dividends on the Pepperell stock, and the executors have paid to the trustee all dividends received by them on Pennsylvania Steel stock. The fund made up of these stocks and their dividends has been kept separate and special on the books and accounts of the executors.

But the case also shows that, when the original distribution of Pennsylvania Steel stock was made, each residuary legatee gave the executors what was called an indemnifying receipt, to the effect that, if any part of the stock so delivered should be needed later for purposes of general administration, so much at least should be restored to the executors. The trustee testified the original distribution was merely conditional and tentative and expressive only of an intention so to divide the stocks later, with the approval of the court, and further, in effect, that his retransfer of the Pennsylvania Steel stock to the executors was made for the protection of the executors against such contingencies as the receipts above mentioned indemnified against. In view of the fact that the trustee was himself one of the executors, the reason given for the retransfer does not seem substantial. Though several years have elapsed since the distribution, no claim has been made upon the residuary legatees for retransfer of stock or for reimbursement. And although the trustee testified that he "thought" the legatees would have to restore some of the Pennsylvania Steel stock, in order that the executors may settle the estate, he offered no sufficient evidence to substantiate his belief. The state of the executors' accounts, which are incorporated in the record before us, does not show that any part of the Clinton Palmer fund, so set apart, will be needed for purposes of general administration.

It does not directly appear in the record whether this account was allowed by the probate court as stated; but the balance charged to the executors in their second account indicates that the distribution made by the executors to the residuary legatees, evidently as advancements, was not allowed in their first account, but was reserved, perhaps, to be covered later by an order of distribution. The plaintiff contends not only that the statement by the executors in their first account as to the existence of a special fund held for Clinton's trustee, and made up of Pepperell stock and Pennsylvania Steel stock with dividends thereon, is evidence that the stock had been set apart by the executors and distributed to the trustee, as a part of Clinton's residuary share under his mother's Upon the foregoing facts, we think that will, but that the executors, having made the the only reasonable conclusion is that the 6 statement in the account, are estopped now shares of Pepperell stock and the 10 shares to deny the truth of it. But we think that of Pennsylvania Steel stock were set apart this plaintiff's right to have the stock and in 1908 as a portion of Clinton C. Palmer's

1

sum of $1,000 paid by him under circumstances hereinafter set forth), when said company's charter was granted."

impressed upon them remains to the present | the time aforesaid to pay the balance, to time, notwithstanding the fact that the trus- wit, the sum of $4,000 (in addition to the tee has had the steel stock retransferred to the executors. The executors hold a bare legal title. The beneficial interest is in the trustee for the benefit of Clinton and can be reached in this proceeding.

Argued before FELL, C. J., and BROWN, MESTREZAT, POTTER, STEWART, and MOSCHZISKER, JJ.

John F. Gorman, Leo J. Gorman, and William Gorman, all of Philadelphia, for appellant. Adolph Eichholz, of Philadelphia, Pa., for appellee.

[2-4] In argument, the defendants express their belief that the plaintiff's claim of indebtedness from Clinton is unfounded, and that the proceeding is really in the interest of Clinton to enable him to withdraw the funds in the trust for his own use, by the use of the plaintiff's name. If this were so, it would have been competent for them to raise that issue. An equitable trustee process lies only by a creditor. But neither in their answer nor by evidence have the defendants questioned that the indebtedness de-an oral agreement alleged to have been clared in the bill was bona fide. To do so now is fruitless. The note from Clinton C. Palmer to the plaintiff was expressed to be for "value received," and that is sufficient prima facie.

PER CURIAM. This appeal is from an order discharging a rule for judgment for want of a sufficient affidavit of defense. The action was by a corporation, of which the defendant became an officer, to recover on

made by him to subscribe for $5,000 of the stock of the corporation when a charter was obtained. It is averred in the affidavit of defense that the defendant's agreement was to invest $1,000 in the stock of the corpora

Decree below affirmed, with additional tion, and that he never agreed to subscribe` costs.

In an action on an oral agreement to subscribe for $5,000 of corporate stock, an affidavit of defense was sufficient which alleged that the defendant's agreement was to invest $1,000, and that he never agreed to subscribe for a larger amount of stock.

[Ed. Note.-For other cases, see Corporations, Cent. Dig. §§ 245, 383-419; Dec. Dig. § 90;* Pleading, Cent. Dig. § 63.]

Appeal from Court of Common Pleas, Philadelphia County.

Action by the Philadelphia Medical Publishing Company against Thomas T. Wolfenden. From an order discharging a rule for judgment for want of sufficient affidavit of defense, plaintiff appeals. Affirmed.

for a larger amount of stock. This denial went to the foundation of the plaintiff's claim; and, if established by proof, would defeat a recovery. The issue raised was for the jury.

1. EXECUTORS AND ADMINISTRATORS (§ 509*) -DECEDENT'S ESTATE-REVIEW OF ADJUDICATION.

A petition to review an account settled and confirmed by the orphans' court will not be granted, except for an error of law apparent

on the face of the record or new matter which has arisen since the decree.

[Ed. Note.-For other cases, see Executors and Administrators, Cent. Dig. 88 2199-2219, 2233, 2234; Dec. Dig. § 509.*]

2. EXECUTORS AND ADMINISTRATORS (§ 509*) -DECEDENT'S ESTATE-REVIEW OF ADJUDICATION-GROUNDS.

A review of an account settled and con

ex gratia upon the subsequent discovery of new evidence as to the facts upon which the decree was grounded which could not have been procured by the use of due diligence.

[Ed. Note. For other cases, see Executors
2233, 2234; Dec. Dig. § 509.*]
and Administrators, Cent. Dig. §§ 2199-2219,

3. CORPORATIONS (§ 308*)-OFFICERS-COM-
PENSATION-CONTRACT CONSTRUCTION
"IN HIS OWN RIGHT."

Plaintiff alleged in its statement of claim that defendant had orally agreed to sub-firmed by the orphans' court may be allowed scribe to 300 shares of plaintiff company's stock, and had agreed to pay therefor the sum of $5,000, upon which he had paid $1,000, leaving a balance due of $4,000. Defendant filed an affidavit of defense, in which he averred, inter alia: "It is untrue, and he denies, that on or about the 19th day of October, 1911, he 'promised and agreed with others who were to be stockholders in said corporation that he, the defendant, would take, subscribe, and purchase 300 shares of said company's stock when said company was chartered, and would pay therefor into the company's treasury the sum of $5,000.' Deponent further denies that he promised at

M. N. and W. N. provided for the incorporaWhere a partnership agreement between tion of the business upon dissolution of the partnership by limitation, and that, if W. N. should become an officer of the company, he should not receive any salary therefor so long as M. N. "shall continue to own in his own right one-half of the capital stock," and where the corporation was duly organized after the

*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes 86 A.-54

death of M. N. by his executors and W. N., | might deem proper. The profits were to be and where it appeared that at the time of such equally divided, but William H. Nixon's share organization and subsequent thereto M. N.'s estate owned less than one-half of the capital over a certain amount per annum should stock, though they held an additional amount accumulate until his capital should reach as collateral security which, if added to the $220,000. Martin Nixon, however, was to amount owned, would make more than onehalf, it was not a violation of the contract for withdraw his capital until it should be reM. N. to receive a salary for his services as duced to the same amount, $220,000, making president of the corporation; the words "in the total $440,000. The articles further stathis own right" in the agreement excluding from ed the intention of the parties to incorporate the computation shares held as collateral sethe business upon the dissolution of the partcurity. nership by limitation of time or the prior death of either partner, provided for its capitalization at $560,000, the issuance of stock to the partners or their estates, and that the executors of Martin should sell to William,

Appeal from Orphans' Court, Philadelphia and that he should agree to buy so many County.

"It is now alleged by the petitioner as the basis of his bill of review that William H. Nixon violated the twenty-second article of his agreement with Martin Nixon, in that, being president of the corporation, he received a salary for his services. It is admitted by the answer that he thus received from March 1, 1903, to August 1, 1908, $7,500 per annum, and thereafter to September 1, 1910, his salary was fixed at $6,900 per "So far as the provisions of this agree-annum, and from that time to the present at ment are relevant the parties agreed to form $6,000 per annum, but it has not been drawn a partnership for five years from April 1, since February 1, 1910. It thus appears 1883, until April 1, 1889. William H. Nixon that William H. Nixon has received as salagreed to give his entire time to the busi-ary approximately $51,000. The petitioner ness; Martin Nixon so much time as he claims that the account of the trustees

should be corrected by surcharging William | money, if so paid back by William H. Nixon H. Nixon, one of the accountants, with the salary which he thus received.

[1] "It is well settled that a petitioner for a review of an account settled and confirmed in the orphans' court must show either an error of law apparent on the face of the record or else new matter which has arisen since the decree.

[2] "Or such review may be allowed ex gratia upon the subsequent discovery of new evidence as to the facts upon which the decree was grounded which could not have been procured by the use of due diligence. Greens' Appeal, 59 Pa. 235; Cramp's Appeal, 81 Pa. 90; Priestly's Appeal, 127 Pa. 420, 17 Atl. 1084, 4 L. R. A. 503; Dox's Estate, 227 Pa. 606, 76 Atl. 318.

to the corporation, might increase the fund applicable to dividends, in the discretion of the board of directors, or increase the value of the stock held by the estate, it does not follow that this court can compel William H. Nixon to account directly to the estate for what he received. The question which is here argued is one that should rather be raised in the court of common pleas in a proceeding in equity to which the corporation is a necessary party.

[3] "But we prefer to decide the claim of the petitioner upon its merits. The answer of William H. Nixon is fully responsive to the averments of the petition touching the matter of the salary received by the respondent as president of the corporation, and there"It is not claimed by this petitioner that fore on this hearing its statements must be new matter has arisen since the decree; and taken as true. The respondent denies that it is clear that there is no error of law he received a salary of $7,500 in 1901, and apparent upon the face of the record. The that he continued to receive the same until adjudication shows that the accountants have and including the year 1910, as averred in charged themselves as trustees with the bal- the petition, and, on the contrary, states ance shown by a previous account to be in that at a meeting of the directors on Febtheir hands, and this balance, less an un-ruary 28, 1903, his salary as president was important credit, was directed to be retained fixed at $7,500, and that he received a total for the purposes of the continuing trust. salary up to February 1, 1910, aggregating Nor do we think that the review should be about $51,000. allowed as matter of grace on the ground "The answer of William H. Nixon is equalthat the petitioner has subsequently dis-ly responsive to the averment of the peticovered that William H. Nixon has received tion that Martin Nixon and his estate since a salary as president of the Martin and his death has continuously owned at least William H. Nixon Paper Company, begin-one-half of the capital stock of the corporaning in March, 1903, contrary to the stipu- tion. As to this the respondent avers that lations of his contract with Martin Nixon, on February 28, 1903, the date of the resoludated twenty years before. To be sure, the tion of the board of directors voting him a petitioner alleges that 'at the time of the salary, the trustees of the estate of Martin audit he was unable to put in any objec- Nixon owned but 3,542 shares out of a tion to said account, for the reason that total of 9,000 shares, which amount of he had no knowledge of the contents of stock is still held by them. It is true, insaid article of copartnership, but subsequent-deed, that, in addition, the estate had at ly a copy of said articles came into his hands,' but the answer of the trustees states facts from which it appears that, even if the petitioner did not know of the agreement at the time of the audit, he might have acquired such knowledge by the use of due diligence, as the cases express it. However this may be, it is difficult to see how this court, upon a readjudication of the account, could entertain the petitioner's claim to surcharge William H. Nixon as trustee with the salary received by him from March, 1903, to February, 1910, for, even if the salary in question was improperly received by William H. Nixon, he is not necessarily to be surcharged with it as trustee of the estate of Martin Nixon in his account as such trustee. It would appear that the money, if illegally received by William H. Nixon, should be refunded to the corporation from which he took it, for the only interest which the estate of Martin Nixon has in the question is that of a stockholder in the Martin and William H. Nixon Paper Company; and although the

that time 1,626 other shares, at the present time 1,573 shares as collateral security for the payment by W. H. Nixon of the par value thereof from dividends on his stock or otherwise. But article 22 of the agreement between Martin Nixon and W. H. Nixon, on which the petitioner relies, merely provides that said W. H. Nixon, as an officer of the company, shall not be entitled to receive any salary 'so long as the said Martin Nixon shall continue to own in his own right one-half of the capital stock of said company.' The respondent claims that this was intended to apply during the life of Martin Nixon. Without going so far as the respondent claims, and admitting that the provision is effective in favor of the estate of Martin Nixon, it is quite clear that when W. H. Nixon, for the first time in 1903, received a salary as president, the estate of Martin Nixon was not the owner of one-half of the capital stock in his own right, and it is evident from a perusal of the articles of agreement that these words, 'in his own right,' were expressly intended to ex

clude from the computation those shares | bound to proceed further in the matter of which Martin Nixon (or his estate) held as procuring satisfactory premises than has collateral security.

"We conclude, therefore, that W. H. Nixon, when he received his salary as president under the authority of a resolution of the board, was not prohibited therefrom by the terms of his agreement with Martin Nixon, and therefore the petition for review should be dismissed for want of equity."

Argued before FELL, C. J., and BROWN, MESTREZAT, POTTER, STEWART, and MOSCHZISKER, JJ.

Edward B. Martin and McCully & Hawkes, all of Philadelphia, for appellant. Theodore F. Jenkins, of Philadelphia, for appellee.

PER CURIAM. The decree of the orphans' court dismissing the petition for a review is affirmed on the opinion of Judge

Gest.

(239 Pa. 277)

just been stated; but, for the purposes of the present disposition of the case, we must take it as represented by the plaintiff's witnesses, and they go no further in imposing a duty upon the plaintiff than to say it was bound to look for suitable premises and negotiate terms satisfactory to the defendant. Evidence was offered on behalf of the plaintiff to the effect that for such services the defendant agreed to pay the sum of $2,500.

"That the plaintiff made vigorous and protracted efforts to procure a satisfactory location for the defendant upon terms which would be approved by the latter is beyond all question. It seems to us, in view of the evidence in the case, that there may be good grounds for the recovery by the plaintiff of damages of a quantum meruit character for the services rendered. Upon that theory the trial judge has stated to the counsel for both parties that it would be, in his opinion, the best and fairest way to dispose of the case

J. A. PATTERSON CO. v. UNITED GAS to order a new trial, in order that, after IMPROVEMENT CO.

suitable amendment of the pleadings, a trial might be had to determine the extent of the damages due to the plaintiff upon a quantum meruit basis. The plaintiff's counsel, however, have expressed a desire that the court shall dispose of the case upon the motion for judgment non obstante veredicto, and that we proceed to do.

"According to the statement filed, the plaintiff claims that, after it was employed by the defendant to do what it asserts it undertook to do, it set about looking for available premises and negotiating for possession and acceptable financial arrangements; that it diligently prosecuted such efforts and brought to the attention of the defendant the property situated at the northeast corner of Eleventh and Market streets. It is further averred, as a part of the plaintiff's cause of action, that, while the said efforts were in progress, the defendant took matters into its own hands, and through another real estate concern consummated arrangements whereby it acquired possession of the said premises upon terms not so favorable as the plaintiff could have obtained.

"We do not think it can properly be claimed that the plaintiff brought the property at Eleventh and Market streets to the attention of the defendant. The testimony of Mr. Patterson, who is the only witness who speaks upon the subject, does not come up to the point of asserting that to be the fact. Indeed, the only positive evidence upon the point came from one of the defendant's witnesses, who testified that that particular property was under observation independent

"The plaintiff corporation is engaged in the real estate brokerage business. In the year 1908 the defendant company, desiring to obtain a prominent central location in Philadelphia for the conducting of a commercial business, came into communication with Mr. Patterson, the president of the plaintiff corporation, on the subject. There is no dispute between the parties as to the plaintiff being employed to make search for such premises as would be acceptable to the defendant, and to negotiate with the owners or occupants thereof such arrangements as would enable the defendant to obtain immediate or promptly of the plaintiff, and that the plaintiff was possession upon terms which would be acceptable to the defendant. It may be that the defendant contends that the plaintiff was

sought to be the negotiator because its name was on a sign on one of the buildings as representing an owner or occupant. No tes