Commonwealth ex rel. Jackson, District Attorney, vs. Sword. Poroughs -Borough contracts Councilmen—Interest in contracts-Act of March 31st, 1860-Quo warranto. A hardware corporation sold to a borough at one time supplies amounting to $40.64 and at another time supplies amounting to 60c. The purchases were made by a member of council who was a member of the street committee and was for the use of the borough. One of the councilmen was the treasurer of the hardware company but did not know of the sales at the time they were made, although as treasurer of the company he endorsed the vouchers in payment thereof at a later date. In quo warranto proceedings to oust the councilman on the ground that the sale by the hardware company, of which he was a member, was a violation of the Act of March 31st, 1860, and other acts forbidding members of borough councils to contract with firms of which any councilman is a member, it was Held that the sales were not "contracts for the sale or furnishing of any supplies or material to be furnished to or for the use of" the borough within the meaning of the law and for which the councilman in this proceeding could be held to have forfeited "his office or appointment in such borough and also be guilty of a misdemeanor." Petition for judgment of ouster. No. 398 July Term, 1914. Docket "B." C. P. Allegheny County. O. K. Eaton, for plaintiff. J. D. Douglass, for defendant. CARPENTER, J., March 20, 1915.--This is a proceeding in due form by information upon which the petition of R. H. Jackson, Esquire, District Attorney, is based. The purpose of the proceeding is to obtain judgment of ouster against the defendant, from his office as a member of Council in the Borough of Glassport in this County. The charge against defendant is, that when the acts complained of occurred, he was, and that he still is, an officer and stockholder in the Hartman Hardware Company, a corporation existing under the laws of Pennsylvania. It is charged that: "By voucher under date of October 23, 1912, No. 3223, the sum of $40.64 was paid to the said Hartman Hardware Co. for goods, wares and merchandise sold and delivered to said Borough of Glassport by said Hartman Hardware Company." "By voucher under date of May 14, 1912, No. 2980, the sum of $.60 was paid by said Borough of Glassport to said Hartman Hardware Company for goods, wares and merchandise sold and delivered by said Company to said Borough of Glassport." "It is alleged that when these transactions took place the defendant was a member of Council of the Borough of Glassport and that he was directly and indirectly interested in the contracts and agreements with said Borough and a party thereto, by which a liability and indebtedness was created against said Borough, and that the defendant, as such Councilman, was interested in said contracts and agreements for the furnishing of sup-, plies and materials to and for the use of said Corporation, to wit, the said Borough of Glassport, of which he, defendant, was then an officer. Upon the matters thus alleged a writ of quo warranto was requested and the request granted. Defendant filed his answer in which he set out inter alia that on the 9th of August, 1912, Charles Phillips, a member of Council of Glassport and of the Street Committee, being in need of some twenty-four inch sewer pipe for the use of the said Borough, and having general power and authority to procure same, purchased said pipe from a representative of the Hartman Hardware Company. That he, Phillips, had tried to purchase same elsewhere but found that the price asked by other dealers was higher than that asked by a representative of the Hartman Company. He further states that at the time said transaction took place he, defendant, was in Canada on his summer vacation, and that he may possibly have been Commonwealth ex rel. Jackson, District Attorney, vs. Sword. present when the warrant for payment was ordered, but of this he has no recollection. He further states that he is informed that some time prior to May 14, 1912, the Chief of Police being in need of two small batteries for pocket search lights, for the use of the Borough officers, purchased same from a representative of the Hardware Company, without the knowledge of defendant, said batteries being of the value of thirty cents each. He avers that he had no intention to do any wrong and submits himself to such order as the Court may deem proper. Counsel prepared a form of special verdict which, with the findings of the jury, reads as follows: "And now, to wit, February 11, 1915, we, the jurors empanelled in the above case find that the Hartman Hardware Company, a corporation, in 1912, did sell and deliver to the Borough of Glassport during the term of office of J. A. C. Sword, defendant, as Borough Councilman, supplies and materials for the use of said Borough; and that J. A. C. Sword was Treasurer of and a stockholder in said Hartman Hardware Company at the time of said sales and as Treasurer endorsed the warrants of said Borough issued in payment of said supplies and materials. We further find that the defendant, J. A. C. Sword, at the time of said sales did not know that said sales were so made. We further find that at the time said sales were paid for the defendant J. A. C. Sword did know that said sales had been made. If, on the foregoing findings of fact, the Court is of opinion that judgment of ouster should be entered against the defendant, then judgment to be entered for plaintiff; otherwise judgment to be entered for defendant." The testimony disclosed the fact that no record of these purchases was 1pt; that is, no minute was made showing that they were authorized by Council. That they were approved is not disputed and could not be, as the vouchers for payment were produced in Court and identified. The defendant, who was Treasurer of the Hardware Company, endorsed both warrants for deposit in Bank. He said he had no recollection of the fact but supposed that he endorsed them along with many others in the regular course of the daily business of the Hardware Company. It is quite evident that no wrong was intended. The sole question for the Court is, Do the facts found by the Jury require or justify a judgment of ouster against the defendant? As we view the matter, the answer to this question depends upon the proper construction of the Act of Assembly relating thereto, and this is dependent upon the meaning to be given to the words "Contract for the sale or furnishing of any supplies or materials to be furnished to or for the use of * such borough." This proceeding was instituted under the provisions of the "Act of Assembly approved March 31, 1860, and other Acts of Assembly in such cases made and provided." * The Act of May 28, 1907, P. L. 262, was cited and relied upon to sustain the action. The first is part of the Criminal Code, but both use the same or substantially the same inhibitory words in relation to the question now under consideration. Were it not for some decisions of the Courts, we would hold, without hesitation, that transactions such as those complained of in this proceeding do not come within the purview of either of the Acts of Assembly cited and relied upon by the relator... What is the fair legal meaning of the words "Contract for the sale or furnishing of any supplies or materials to be furnished to or for the use of?" To quote the definition of the word "Contract" does not answer the question. It is true that the purchase of two stogies for a nickle is a contract. So is the purchase of an evening newspaper for a penny; but we vere the assertion that not one person in ten thousand would ever think of applying the word "Contract" to such a transaction. The Clerk of Commonwealth ex rel. Jackson, District Attorney, vs. Sword. Council might purchase a bottle of ink or a lead pencil or a pad of writing paper, from a clerk in the store of a member of Council, and, if subsequently paid for by a warrant in favor of the member of Council who endorsed it for deposit, he, without any other knowledge of the transaction than that inferred or attributed from the fact that he endorsed the warrant, could be hailed into Court on a writ of quo warranto, ousted from office and fined $500, for the act says he "shall forfeit his office or appointment in such borough, and also shall be guilty of a misdemeanor." Of course the fine cannot be imposed until after conviction, but the Act leaves no opportunity for escape from conviction if the fact is admitted or proven. A judgment of ouster ipso facto brands the member of Council as a criminal. I can not believe that this drastic and highly penal statute was intended to embrace transactions such as those recited in this proceeding. When an Act of Assembly refers to contracts for supplies to be furnished. a reasonable meaning must be given to the language used. Is it not reasonable to suppose that the framers of the Act had in mind supplies to be furnished pursuant to contract, supplies contracted for in the usual way? It seems clear that the only reasonable purpose of the Act was to prevent inside bidding, contracts made in private, contracts which, though made apparently in the open, might be based on private understandings with associate officials. Was not the purpose to prevent councilmen and other officials from contracting with themselves? The danger incident to this sort of dealing is aptly expressed in the familiar lines: "For. Och' mankind is unco weak, And little to be trusted, If SELF the wavering balance shakes It is scarcely necessary to repeat the familiar statement that public officers are agents within the policy of the rule against allowing an agent to act both for himself and his principal in the same transaction. In acting for the municipality they must exercise the same fidelity, caution and care that is expected of an individual in purchasing for himself. But there is nothing in the present case that indicates the slightest intention to violate any principle of law or morals, and if the defendant is to be ousted from his office as a member of Council, the judgment of ouster can be sustained only because of a technical and wholly innocent infraction of a highly penal statute, to which offense the respondent was not a party, except to the extent of endorsing a warrant, which, had he read it, would have brought to his attention the fact that the Corporation in which he was a stockholder and of which he was the treasurer, had sold, some weeks or months previous and during his absence, or without his knowledge, certain articles of merchandise to the Borough of whose Council he was a member. It does not appear that the articles purchased, were purchased pursuant to any contract or any ordinance of Council authorizing such purchase by contract or otherwise. As stated above, the Acts of Assembly under which this proceeding was instituted are highly penal. They cannot be extended by implication, nor can they be given an unreasonable meaning. We cannot ignore or separate the words "Shall forfeit his office" from the words in the same sentence, "and also shall be guilty of a misdemeanor." Neither must we give to the words "in any way interested in any contract for the sale or furnishing of any supplies or materials to be furnished to or for the use of," etc., a strained or unusual meaning, a meaning that, because of implied or inferred knowledge of a fact. obtained long after it occurs, calls for a forfeiture of office and attaches the stigma of guilt. Commonwealth ex rel. Jackson, District Attorney, vs. Sword. That certain decisions of our Courts seem to indicate views not in harmony with the views herein expressed may be conceded, but we think that the apparent differences results from the facts admitted or proven in those cases. Being of opinion that upon the facts found by the jury judgment of ouster should not be entered, it is ordered that judgment be entered in favor of defendant on payment of the verdict fee. Galey vs. Guffey. Receiver for an individual- Restraining foreclosure proceedings and sale of property-Impairment of contracts- -Remedies provided by contractPower of legislature and courts. B was the owner of various properties which were subject to liens and mortgages, it being alleged that the value of the properties was considerably in excess of the liens and unsecured debts. On account of his inability to pay the principal and interest, various creditors were threatening foreclosure proceedings. Upon petition by a creditor setting forth the above facts, the Court appointed a Receiver for the property of B and made an order without further notice, restraining creditors from proceeding to sell any of B's property. Among the liabilities of B was an indebtedness secured by a purchase money mortgage. The mortgage provided for the issuance of a writ of scire facias upon default for sixty days and waived all stay of execution and extension of time of payment given by any statute then or thereafter in force. The mortgage being long overdue, the mortgagee applied to the Court for leave to foreclose the mortgage and sell the property, which was refused. Upon appeal to the Supreme Court from the final order of refusal, it was Held The Court was without authority to restrain the foreclosure of the mortgage and the sale of the property in face of the fact that the contract between the parties expressly provided for such proceedings without stay or extension of time. Under the constitutional provisions, the legislature is without authority to enact any legislation impairing the obligation of contracts. This prohibition does not ordnarily extend to the amendment of a creditor's remedies, but where the remedies are expressly stipulated in the contract, they are a contract provision and the legislature has no authority to enact legislation limiting the remedy in such case. As the legislature would have no authority to pass legislation restraining the collection of a debt under these circumstances, it is clear that the Judicial Department is without that authority. The order appealed from was reversed and leave granted appellants to proceed to enforce the collection of the mortgage in question in the manner therein provided. Appeal. No. 61 October Term, 1915. Supreme Court of Pennsylvania. Appealed from No. 50 Fourth Term, 1910, C. P. Allegheny County. · Sterrett & Acheson and John G. Johnson, for appellants. STEWART, J., March 15. 1915.-The petition of J. H. Galey, presented 14th July, 1910, to the Court of Common Pleas of Allegheny County, represented that the petitioner was a creditor in a large amount of J. M. Guffey, of the City of Pittsburgh; that the said Guffey was possessed of property of a value greatly in excess of his liabilities, but that, because of his inability to pay the interest on maturing obligations, certain of his creditors holding collateral pledges exceeding in value twice over the amount of the debt for which they were pledged, were threatening to sell the same at private sale, as they had a right to do under the terms of the pledge; that other creditors were threatening suits and attachment proceedings for the recovery of their claims, and that such proceedings, unless restrained, would result in great loss to the petitioner and other creditors, inasmuch as the property of the debtor would be disposed of by this method at a Galey vs. Guffey. price far below its value. For these reasons the petitioner prayed for the appointment of a Receiver to take charge of all the assets and property of the said J. M. Guffey, to manage the same under orders of the court, free from the interference of creditors, that the creditors be restrained from entering suits and from selling or disposing of the property of the said J. M. Guffey except subject to the order of the court, and that the court, at such time as to it seems proper, should order and direct the sale of the property of the debtor, and apply the proceeds in payment of the indebtedness for which it is pledged, and the surplus to the payment of the unsecured creditors. On the same day an answer to the petition was filed by James M. Guffey, admitting the facts alleged in the petition and acquiescing in the prayer. On the day following, without notice to the other creditors, the court appointed John S. Willard receiver of the estate of said Guffey, in accordance with the prayer of the petition, and by its decree enjoined and restrained all creditors from selling, transferring or in any manner disposing of any of the property belonging to said estate, and from interfering in any way therewith, or from doing act or thing to prevent or obstruct said receiver in the performance of his duty. Among the liabilities of said Guffey at that time was a certain mortgage indebtedness, the subject which gives rise to the present controversy. In June, 1908, James P. Sterrett and John M. Kennedy, both of whom have since died, sold and conveyed to J. M. Guffey, a certain lot of ground in the City of Pittsburgh, accepting in part payment of the purchase money a bond secured by mortgage on the premises sold in the sum of $10,000.00, payable in one year thereafter with interest thereon payable semi-annually. It was stipulated in this bond and mortgage that in case default in payment of principal or interest for a period of sixty days after due and payable, the mortgagees should have the right to sue out forthwith a writ of scire facias on the mortgage and prosecute the same to judgment, execution and sale, for the collection of the whole amount of principal and interest, together with fees, costs and expenses, and that the mortgagor waived all stay of exemption from execution or extension of time of payment given by any statute then in force or that might thereafter be enacted. The entire principal of this mortgage has been overdue and unpaid since 23rd June, 1899. Interest thereon has been paid by Guffey until the receiver was appointed; thereafter payment of interest was continued, by the receiver, until 23rd December. 1913, when the last payment was made. Default having been thus made beyond the period allowed by the term of the obligation, these appellants. respectively trustees under the will of James P. Sterrett, deceased, and executors of the will of John M. Kennedy, deceased, desiring to proceed with the collection of the debt and interest thereby secured, but having before them the restraining order of the court above referred to, presented their petition to the court, in which, while questioning the power of the court in such case to restrain the creditor from enforcing the payment of the debt due him, they asked leave to proceed to that end by the remedies provided for in the mortgage. After hearing, this leave was refused. The appeal is from the final order of refusal, and we have before us the single question whether the order of the court enjoining the creditors of J. M. Guffey from proceeding by law to enforce collection of the debts due them, so long as the estate is in the hands and under the control of the receiver appointed by the court, operates in law to stay the hands of these appellants. In other words, the question raised is: Is it within the power of the court to restrain these particular creditors-and we are here concerned with no other-because of the appointment of the receiver of the estate, from adopting and applying such legal remedies as are allowed them by the terms of their |