the property is in such a rural neighborhood, that to charge it with the expense of paving by this method, would be unconstitutional and unjust. The city, it has been determined, has no right to charge lots according to frontage, for expense of paving, in a rural region, and the reason is that the owner, under such circumstances, derives no special benefit from the improvements, and such improvements ought to be made at the general expense, if they are desired. A special tax ought not to be laid for what is a general advantage only. **

*

"This consideration of the reason of the rule of law may aid you in settling the present controversy, and in determining whether this property is rural or not, in the sense in which that fact is in issue in this case.

"You have to decide whether this property of Lukens is rural or not rural, in the sense that it ought to be exempt from taxation in this manner; whether to impose a specific tax, by frontage, upon property situated as this is, would be unjust and illegal or not.

"If you think it is rural in this sense, you will find for defendants; if not, for plaintiffs." *Verdict and judgment for the plaintiff. Defendants thereupon took this writ, assigning for error, inter alia, the refusal of their point above cited.

For plaintiffs in error, Walter J. Budd, Esq. The Act of May 13, 1856, section 11, P. L., 569, provides, "That councils shall not impose taxes upon rural portions of the city for *** paving and cleaning the streets. * * *"

In this contention, between the city and the

in classifying the property in question as suburban, was conclusive evidence, in this action, that it was "rural," is too plain to need, any argument. We admit that the action of that board is conclusive; but it is only conclusive so far as classification of property for the purpose of general taxation for purposes of government is concerned. The classification act has no application to anything else. The fallacy of the argument of the counsel on the other side is in confounding taxation for general purposes with local assessments on peculiar benefits conferred for local improvements. The two systems are essentially dissimilar and governed by entirely different principles. Local assessments on peculiar benefits conferred, though imposed under the taxing power, are not, in the strict legal sense, taxation, and are not within the purview of the Acts of Assembly relating to general taxation: Northern Liberties v. St. John's Church, 1 Harris, 106; Pray v. Northern Liberties, 7 Casey, 71.

PER CURIAM. Filed April 3, 1882,

The main contention in this case is, whether the lot of the plaintiff in error was rural, so as to exempt it from the assessment for paving and curbing. That question was fairly submitted to the jury. It would clearly be manifest error to hold that the classification for purposes of taxation by the Board of Revision of taxes was conclusive evidence in this action of the rural or suburban character of the lot. Neither party in this suit is estopped by that former classification from proving the true character of the lot.

Under the facts found by the jury we see no
Judgment affirmed.

error in the record.

FRITCHMAN'S APPEAL.

COAL HOLLOW COAL COMPANY.

plaintiffs in error as to the character of the land described in the claim filed against it, the decision of the Board of Revision should be final and conclusive. The plaintiffs in error would HENRY H. HOUSTON v. 'YOUGHIOGHENY not, in an action to recover any other tax assessed against the land, be permitted to prove that it was agricultural or farm land-they would be bound by the decision-and it is difficult to perceive any reason why the city should be permitted to do so in this case.

That the Act of March 24, 1868, P. L., 444, confers judicial powers upon the board, and their decision, unappealed from, is final. It is as much the duty of the city as it is of the owners of real estate to see that the board have decided rightly as to the character of the land in the rural wards.

Contra, Messrs. William Hopple, Jr., and B. Woodward.

That the court below was right in declining to say that the action of the Board of Revision

The proceeds of a sheriff's sale of real estate held in fee

of an insolvent corporation should be distributed to
the liens of record, according to priority, as provided
in the Act of 30th April, 1844, and not according to the
Act of 1870, because the latter act especially excepts
"lands held in fee," etc.

A corporation has power to mortgage its real estate with-
out being specially authorized so to do. If a corpora-
tion be delegated with power to "take and hold land
in fee-simple or by lease" with power to "sell or lease"
the same, the power to sell or lease includes the power
to mortgage, even under the statute of uses, though
strictly construed; and a fortiori it ought, under a stat-
utory grant which is to be beneficially construed.
See Gordon v. Preston, 1 Watts, 385; Commonwealth v.
Councils of Pittsburgh, 5 Wright, 284; Watt's Appeal, 28
P. F. Smith, 391.

When a corporation gives a mortgage, the validity of
which is unquestioned by the corporation itself-no

defense set up to an action brought to recover on the bond-and judgment is regularly obtained, such judg

ment cannot be collaterally attacked except for fraud or collusion.

Appeal of Christ. Fritchman from the decree of the Court of Common Pleas of Westmoreland county, distributing money realized by sheriff's sale.

On the 17th day of March, 1863, an act was passed by the Legislature of Pennsylvania incorporating the Youghiogheny Coal Hollow Coal Company: P. L., 1863, p. 140.

Section 1 set forth the names of the incorporators, the name of the corporation, etc., with power to take and hold land in fee-simple or by lease, in the county of Westmoreland, not exceeding, at any time, 1,500 acres, with power to sell, mortgage, lease or otherwise dispose of the same, or any part thereof.

said company, and upon any increase thereof, payable in four equal annual installments; the first payment to be made in one year from the date of said act of incorporation, and also to pay such taxes on dividends as might be provided by law.

On the 29th April, 1864, a supplement of the act of incorporation was passed, providing for the repeal of the 4th section, relating to the capital stock and authorizing an increase of stock to 10,000 shares of $50, with power of further increase of stock not exceeding 20,000 shares, and upon all increase of stock the company was to pay into the State Treasury a bonus of onehalf of one per centum, in four equal annual payments.

On the 28th February, 1865, a further supplement was passed by the Legislature authorizing:

Section 1. In lieu of the number of shares of stock authorized, the company was to have power to issue 250,000 shares of the value of $3 each, and upon all increase to pay a bonus of

Section 2 defined the privilege of the corporation to mine and market coal, iron ore, fire-clay and other minerals; to manufacture iron, fire brick, mineral oil, and to transport, sell and dis-one-half of one per cent. pose of the same; to make improvements, machinery fixtures and erections, etc.

Section 3 authorized the company to construct a railroad to connect with other railroads, not to exceed five miles, with restrictions, etc.

Section 4 provided that the capital stock should consist of 2,000 shares at $50 each, with power to increase the same, not to exceed 4,000 shares, to be personal property and to be transferable.

Sections 5 and 6 provided for a board of managers and officers, and authorized the company to make and establish ordinances, rules and regulations and by-laws for the same.

Section 7 authorized the company to borrow any sum of money not exceeding one-half of the amount of stock subscribed to enable them to carry out the purposes of their organization and to issue bonds for the payment of the same on such terms and at such rates of interest as they may deem best, and shall have power to mortgage their property, real and personal, to secure payment of the same: provided, that they shall issue no bond or mortgage for a less amount than one hundred dollars.

Section 8 provided that the stockholders of said company shall be jointly and severally liable in their individual capacities and estates for all debts contracted for work and labor done and material furnished for said company, and provided for the collection of the same, except that they were not liable, individually, for any bonded or mortgage debt, etc.

Section 9 required the company to pay to the Commonwealth of Pennsylvania a bonus of onehalf of one per centum on the capital stock of

Section 2. That the seventh (7th) section of the act incorporating said company, and which authorizes said company to borrow money and issue bonds, be repealed.

Section 3 changing the corporate name to the New York and Youghiogheny Gas Coal Company, and providing for a board of managers: P. L., 1865, p. 243.

On the 20th April, 1866, an Act of Assembly was passed which provided that an act entitled "A further supplement of the act incorporating the Youghiogheny Coal Hollow Coal Company, approved March 17, 1863, changing the name of said company and increasing the number of shares of stock to be issued by the same," approved February 28, 1865, be and the same is hereby repealed; and the original act entitled "An Act to incorporate the Youghiogheny Coal Hollow Coal Company," approved March 17, 1863, approved the 29th April, 1864, be and the same are hereby continued in full force, and any and all acts of the said company done in pursuance of the provisions of the said acts, be and the same are hereby validated and confirmed.

The certificate of the Secretary of the Commonwealth to a copy of the foregoing act recites: "The said Act of the General Assembly never having been published in any edition of the Pamphlet Laws for the reason that the enrollment tax thereon was not paid."

On November 18, 1865, Thomas Moore and wife, by their deed of indenture, conveyed to the Youghiogheny Coal Hollow Coal Company, their successors and assigns, certain coal lands,

mineral and surface, in Sewickley township, Westmoreland county, Pennsylvania, containing 1,090 acres, more or less, with certain reservations. The deed is recorded on the 27th day of December, 1865, in the Recorder's Office of said county, in Deed Book No. 54, p. 582.

On April 25, 1866, the Youghiogheny Coal Hollow Coal Company mortgaged the land described in the deed from Thomas Moore and wife, to "Pennsylvania Company for Insurance on Lives and granting annuities" as trustee, to secure the payment of seventy-five bonds for $1,000 each, numbered from 1 to 75, payable on the 1st day of May, 1876, with interest thereon, payable semi-annually on the 1st of November and May of each year. Mortgage recorded April 28, 1866, at 1 o'clock P. M., in the Recorder's Office of said county, in Mortgage Book No. 3, pp. 274, 5, 6.

On February 28, 1868, the Youghiogheny Coal Hollow Coal Company executed a second mortgage to the Pennsylvania Company, etc., aforesaid, as trustees, to secure the payment of several bonds of different amounts, amounting in all to $50,000, payable March 1, 1878, with interest at 10 per cent,, payable semi-annually. Recorded February 29, 1868, in Recorder's Office in said county, in Mortgage Book No. 3, p. 493.

1879, sold to Wilson McCandless and Alexander King for the sum of $115,050.

On October 1, 1880, the Court of Common Pleas of Westmoreland county made an order allowing the sheriff credit for $123.72 taxes paid by him and $759.05 costs, leaving a balance of $114,167.53 for distribution.

On March 22, 1881, the court appointed Jno. Armstrong and H. Byers Kuhns, Esqs., auditors to distribute the fund.

On May 20, 1881, the auditors filed the following report:

The auditors are of opinion:

1st. That the proceeds of the sale now for distribution arise from the sale of real estate and should be distributed to the liens of record, as provided for in the second section of the Act of 30th April, 1844, P. L., 532, according to priority.

The deed of Thomas Moore to the company defendant conveys the property sold, as real estate in fee-simple. The levy and inquisition by the sheriff is of real estate, the venditioni, sale and confirmation of the deed, is of and for real estate in fee-simple, and the Supreme Court in Borlin's Appeal, and Houston's and Poultney's Appeal treat the case as real estate: 28 PITTSBURGH LEGAL JOURNAL, 412.

The mortgages contain recitals of the Acts of The Act of 1870, providing for the sale of prop1863 and 1864, incorporating the company. Res- erty of insolvent corporations, especially excepts olutions of the stockholders authorizing the di- "lands held in fee, which latter shall be prorectors to execute the mortgage, and in addition ceeded against and sold in the manner provided to the description of the coal lands, etc., con- in cases for the sale of real estate:" P. L., 58. tained in the deed from Thomas Moore and wife, 2d. That the company defendant had power as follows: "Together with all and singular, to borrow money and execute the mortgages the houses, buildings, factories and improve-given to the "Pennsylvania Company for Inments of whatsoever nature, machinery, fixtures surance,” and are valid liens. and all and singular, the cars, rolling stock, and also all and singular the franchises and property, real and personal, of the said company; and also together with all ores, minerals, mines, ways, waters, water courses, rights, liberties, privileges, hereditaments and appurtenances whatsoever thereunto belonging, etc.

It was contended before the auditors that the defendant company could not give the mortgages unless specially authorized so to do; that a corporation being an artificial person or body, it can only exercise such powers as are specially delegated to it by its organic law; that although the 7th section of the Act of 17th March, 1863, authorized the borrowing of money and giving a mortgage to secure the same, this power was

On the 29th May, 1879, Henry H. Houston, who became the holder, by assignment, of the outstanding bonds issued by the company, sell-subsequently repealed by the 2d section of the ing each for $1,000 and secured by the first mort- Act of 28th February, 1865, P. L., 243, and was gage of 25th April, 1866, brought suit in the not restored by the Act of 20th April, 1866, by Common Pleas, No. 1, Philadelphia county, No. reason of failure to pay the enrollment tax, and 207 June Term, 1879, upon said bonds. The therefore the mortgages were ultra vires unless summons was served on W. F. Caruthers, presi- that it was specially authorized by a law passed dent of the company, by the sheriff of Philadel-between the 28th February, 1865, and 25th April, phia county, on 29th May, 1879.

1866.

Subsequent to this judgment, and by virtue of The auditors are of the opinion that the mortit, process was issued to the sheriff of Westmore-gages were not ultra vires, that being legally land county and the property of the company executed, placed upon record without any evilevied on, condemned, and on the 6th December, | dence or shadow of fraud, long before the con

tracting of the debts by the parties objecting to | P. F. Smith, 190, Justice THOMPSON says, since the payment in this distribution, unobjected to by the defendant company, it becomes such an executed dealing as should be allowed to stand for and against both parties, and by virtue of its priority of lien entitles the holder of the bonds secured by it, Henry H. Houston, to payment in full of the debt, interest and costs of the judgments obtained upon them in Philadelphia county.

The 1st section of the act of incorporation provides that the company "take and hold land in fee-simple or by lease in the county of Westmoreland, not exceeding, at any time, fifteen hundred acres, with power to sell, mortgage, lease or otherwise dispose of the same, or any part thereof."

In Gordon v. Preston, 1 Watts, 385, Judge | GIBSON, says: According to the principle of Lancaster v. Dolan, 1 Rawle, 131, a power to sell includes a power to mortgage, even under the statute of uses, though strictly construed; and a fortiori it ought, under a statutory grant which is to be beneficially construed in futherance of the object.

the decision of Stewart v. Stocker, 13 S. & R., 199, the question has not been regarded as an open one and that it cannot be raised collaterally, but must be raised by the parties in the judgment. In Mason's Appeal, 4 Watts, 345, it is held that the validity of a judgment cannot be questioned on the distribution of the money raised by the sheriff's sale; and further, if the judgments or the mortgages could be attacked collaterally it cannot be done successfully before the auditors in the present distribution.

In Second National Bank of Titusville's Appeal, 4 Norris, 530, Judge PAXSON says: It has been settled by a line of authority that in the distribution of a fund an auditor cannot inquire into the validity of a judgment regular upon its face.

He further says: So long as it stands as a valid judgment against the defendant it is a good judgment against them (other creditors). In such cases the only person who can impeach the judgment is the defendant himself, and this must be done by a motion in the proper court to open it.

The auditors have made distribution of the fund, therefore, as appears in the schedule of distribution annexed:

In the Commonwealth v. Councils of Pittsburgh, 5 Wright, 284, Judge STRONG says: The power to issue bonds, contracts or other certificates of indebtedness, belongs to all corporations public as well as private, and is inseparable Amount for distribution.. from their existence.

In Watt's Appeal, 28 P. F. Smith, 391, Judge GORDON, says: This is good law, and that a company having power to dispose of the company's lands by deed or lease, the minor one of mortgaging these lands upon a proper occasion and for a proper debt, may be inferred.

In St. John's Church v. Steinmetz, 6 Harris, 275, Justice LOWRY says that a corporation "may run in debt and then they may pledge such property as they have," and the company will not be allowed to dispute the title which they have pledged.

Again the validity of these mortgages being unquestioned by the company itself-no defense set up at the actions brought in Philadelphia to recover on the bonds—no allegation or evidence of fraud anywhere, who has the right to object to their payment?

In Gordon v. Preston, 1 Watts, 385, it is decided that a judgment creditor of a corporation cannot take advantage of such an irregularity in the execution of a mortgage, so as to defeat it, and entitle himself to the proceeds of the sale of the mortgaged premises.

In Lewis v. Smith, 2 S. & R., 142, it is devided that a judgment erroneously entered is valid until reversed, and in Wilkinson's Appeal, 15

SHEDULE OF DISTRIBUTION.

No. 1. Costs, dockets, etc......

Auditor's fees...

44

2.

Labor claims...

46 3.

Com'th judgments...

4. Judgment and mortgage
creditors...

$114,167.23

606.49
678.46

2,867.43

3,800.00

106,214.85

$114,167.23 $114,167.23

May 20, 1881, the auditors' report was confirmed nisi, and the same day Christ. Fritchman, a lien creditor, by his counsel, filed the following exceptions thereto.

The auditors erred:

1. In deciding that the alleged mortgages were valid and subsisting liens at the time of the sheriff's sale; and in distributing the proceeds of said sale, to said mortgages and judgment liens in the order of their priority.

2. In failing to allow the claims of others than stockholders' priority.

3. In failing to distribute to creditors (saving the rights of creditors, other than stockholders) pro rata, without reference to priority of judgments and alleged mortgages.

4. In charging for their services in violation of the provisions of the Act of 4th June, 1879.

May 21, 1881, the auditors overruled the exceptions, and on the same day C. Fritchman renewed his exceptions filed before the auditors.

October 11, 1881, the court, after due consideration, dismissed the exceptions and confirmed

For appellants, Messrs. Edgar Cowan and Act of 1851 the borough authorities are emHazlett & Williams.

Decree affirmed and appeal dismissed at costs its use any more than it can exact tolls for the of the appellant.