the

of the policy he might have revoked his application, and demanded a return of his money; but after such acceptance he could do nothing of the kind. Thenceforth O'Connor was the depositee of the defendant, and there could be no rescission without its consent, for to all legal intents the contract of insurance was consummated and the premium belonged to the company as fully as though it were in its vaults. This policy, regularly executed and countersigned, was put into O'Connor's hands by Crane, the defendant's general agent, for delivery and receipt of the premium, and for no other purpose, and nothing is more certain than that from and after that delivery, the money in his possession belonged no longer to McDonald, but to the defendant. If then, the company received the premium and McDonald the policy, we cannot understand why the plaintiff should not recover. The plea that Crane had no power to deliver the policy until the premium was actually paid into his hands, is so out of all character that we cannot understand how it could have been effectually imposed on the court below. Crane had power to issue policies and receive the money, and as in this case, he exercised that power in a legitimate manner and in the ordinary course of business, the company was bound by his acts. Had the money been deposited by Crane's direction in a bank, or had he sent his clerk to deliver the policy and receive the premium, we apprehend no one would be found to say that the transaction would not have been binding on both parties. Why then might not O'Connor perform the same executive duties for the defendant or its agent? It is not complained that he did not act faithfully; that he did not retain the money for the company, or that he did not transmit it to the agent in the usual course of business. But as Crane did not receive it until after the loss, therefore, O'Connor's agency in the matter, which would have been entirely regular had there been no loss, is to be pronounced void, and he is to be regarded as the depositce and broker of the decedent. Ón principle, this treatment of the case cannot be allowed. The company ought to know how its agents are doing its business, and it certainly does know that they necessarily must do that business through the ordinary channels of trade. When, therefore, companies of this kind put it in the power of their agents to deliver their policies to innocent parties, who have paid their money in good faith to persons appointed for that purpose by such agents, they are estopped from gainsaying the regularity of the method so adopted for the collection and transmission of their premiums, and all conditions found in such policies to the contrary are to no purpose.

But

we have so fully discussed this matter in the recent case of the Universal Fire Insurance Company v. Block, that we need not dwell longer upon this subject. We have, therefore, but to add, that the attempt to sustain the judgment of the court below by the case of the Pottsville Fire Insurance Company v. Minnequa Springs Improvement Co., 100 Penn. St. 137, is a failure. The two cases are as wide apart as the poles. In that case the policy passed from the hands of agent through no less than three brokers before it reached the insured; he did not pay the premium until after he had received the policy, and the money was never paid to the company nor its agent,

the

VOL. III.-3.

neither was it at any time within the power or control of either. More than this, the company refused the risk, and the agent, in vain, endeavored to recall the policy. It will thus be seen that the two cases are entirely dissimilar, and the one, cannot, by any ingenuity, be made to govern the other. The judgment of the court below is now reversed and a new venire ordered.

ACKERMAN Vv. BUCHMAN.

October 5, 1885.

PETITION FOR CONSTITUTION

MUNICIPAL BONDS. NOTICE MANDAMUS INCREASE OF MUNICIPAL INDEBTEDNESS. An act of assembly authorized a borough to erect water-works, and directed the election of a board of water commissioners to locate the works and make all contracts and purchases necessary to carry into operation the provisions of the act; it also empowered the borough corporation to issue bonds to raise the necessary money to construct the works. The water commissioners elected, requested the town council to issue bonds to raise the funds to purchase the real estate selected as the site of the works; this, council declined to do, whereupon the commissioners applied for a mandamus to compel the issue of the bonds. Held, that whilst council was clothed with the power to issue bonds, it was the judge of the necessity for so doing, and if it found the current revenues of the borough were sufficient to meet the demand for the construction of the works, it was not obliged to create a bonded indebtedness for the purpose; and in order that it might act intelligently, and for the best interest of the community, it was entitled to information concerning the probable cost of constructing the works otherwise than by contract, the sums required from time to time for the construction, etc., and to due and timely notice to make appropriations for the purpose; and unless this rectification were made, and the fact appeared in the petition for a mandamus, none would issue.

Under section 8, article IX, of the Constitution of 1874, municipal authorities may increase the indebtedness from time to time till two per cent has been added; provided, the original indebtedness with the increase does not exceed seven per cent. There can be no further increase after the addition of the two per cent, unless with the vote of the people. Wheeler v. Philadelphia, 77 Penn. St. 352; and Pike County v. Rowland, 9 W. N. C. 241, followed.

Error to the common pleas of Northampton county.

The act of March 12, 1867, authorized the borough of Easton to construct and provide public water-works, and required the qualified voters of the borough to select three competent persons as water commissioners to carry into effect the act; it also authorized the borough corporation to issue bonds to raise the necessary money. The commissioners under authority contracted for the purchase of a site for the works, and then requested council to issue bonds to raise the funds. to complete the purchase; this, council refused to do, whereupon a mandamus was applied for. Council in its answer set forth inter alia as follows:

"That the said water commissioners have not yet informed the said town council whether they have made any contract to construct the said works, or whether they will construct them otherwise than by contract. That they have not informed the said town council how much money will be required during the year 1882, or during any other period of time for the construction of said works or any part thereof; nor have they requested the said town council to appropriate any specified sum of money to the construction of the said water-works.

"That your respondents are advised that a reasonable construction

of the said act of assembly does not require the said town council to borrow money or issue bonds for the construction of said water-works, unless they should find that the current revenues of the said borough from year to year should be insufficient for the payment of the cost and construction of the said water-works, and that as the said water commissioners have not furnished the said town council with any estimate or statement either of the contract price of constructing said water works, or of the probable cost of constructing the same otherwise than by contract, the said town council have had no data or basis upon which to make appropriations for the construction of said works, and these respondents are advised that they are not required to vote for the issue of bonds by the said corporation until it be ascertained that the current revenues of the said borough are insufficient to pay for the cost of said works.

"Fourth. That the bonded debt of said borough of Easton now exceeds the sum of one hundred and fifty thousand dollars, and these respondents are advised, that under article 9, section 8, of the Constitution of Pennsylvania, the town council is not authorized to increase its indebtedness further, without a vote of the electors of borough authorizing such increase; and that a further increase of said debt is forbidden by the provisions of the act of April 20, 1874, Pamphlet Laws of 1874,

page 65, etc."

Section 8, of article 9 of the Constitution provides as follows: "The debt of any county, city, borough, township, school district or other municipality or incorporated district, except as herein provided, shall never exceed seven per centum upon the assessed value of the taxable property therein, nor shall any such municipality or district incur any new debt, or increase its indebtedness to an amount exceeding two per centum upon such assessed valuation of property, without the assent of the electors thereof at a public election, in such manner as shall be provided by law; but any city, the debt of which now exceeds seven per centum of such assessed valuation, may be authorized by law to increase the same three per centum, in the aggregate at any one time, upon such valuation."

Frank Reeder, for plaintiffs in error. M. H. Jones, W. S. Kirkpatrick and Robert I. Jones, for defendants in error.

STERRETT, J. After fully and sufficiently setting forth their authority to act as a board of water commissioners in the construction of the public water-works, under the provisions of the act authorizing the same, the plaintiffs below aver that they have selected a site for the erection of such works and the buildings and appliances necessary thereto, and also a site for the reservoir, etc., as the law provides: "that said locations, in their judgment, are in every way suitable and Convenient, and the amount of land in quantity, ample for the purpose; that arrangements have been made with the owners for the purchase of said land upon terms and for a price reasonable and just."

Then follow the averments of fact which, it is claimed, constitute such neglect of duty on the part of the town council, as warrants the issuance of the mandamus, viz.: "That the town council of the borough of Easton have been from time to time duly notified in

writing and otherwise, of the action of your petitioners, and have been called upon to issue the bonds to raise the money necessary for them to carry out the provisions of the law, and to discharge the duties imposed upon them thereby."

"That the said, the town council, have hitherto neglected and refused to comply with the request of your petitioners, and to take such action in the premises as the law provides."

In response to these averments the defendants below, members of the town council, in the third paragraph of their answer to the alternative writ, aver, inter alia, "That the said water commissioners have not yet informed the said town council whether they have made any contract to construct the said works, or whether they will construct them otherwise than by contract. That they have not informed the said town council how much money will be required during the year 1882 or during any other period of time, for the construction of said works, or any part thereof; nor have they requested the said town council to appropriate any specific sum of money to the construction of said water-works."

"That your respondents are advised that a reasonable construction of the said act of assembly does not require the said town council to borrow money or issue bonds for the construction of said water-works, unless they should find that the current revenues of the said borough from year to year should be insufficient for the payment of the cost and construction of the said water-works, and that as the said water commissioners have not furnished the said town council with any estimate or statement either of the contract price of constructing said water-works, or of the probable cost of constructing the same otherwise than by contract, the said town council have had no data or basis upon which to make appropriations for the construction of said works, and these respondents are advised that they are not required to vote for the issue of bonds by the said corporation until it be ascertained that the current revenues of the said borough are insufficient to pay for the cost of said works.

While the petition in the indictment clauses thereof is sufficient, it is defective in not setting forth such facts as are necessary to show that the town council was in default in not discharging the duties devolved on them by the act. Conceding to the board of water commissioners the most extended authority they can possibly claim under the acts recited in their petition, it was surely their duty to furnish the town council with full and specific information of the nature and character set forth in the above quoted portions of the answer, including an estimate or estimates of the amount that would be required to prosecute the work intrusted to them, and make due and timely requisition on the council for the amount so required. While the powers of the board are large and ample, their authority is not supreme. The town council are charged with the duty of providing the funds necessary to construct the water-works; but in order that they may discharge that duty properly, they should be furnished with such information as will enable them to act intelligently and for the best interests of their constituents. They are clothed, it is true, with authority "to issue bonds

to raise money necessary for the purposes of the act," but they are the judges of the necessity for doing so. If they find that the current revenues of the borough from year to year are sufficient to pay for the construction of the works, they are not required to create a bonded indebtedness under the authority given them by the act. For these and other reasons that might be suggested, it is obvious that the town council should be formally and officially furnished with such information as has been suggested and is not averred in the petition. The petition being defective in that regard the writ of mandamus should not have issued.

But aside from this, assuming that the averments of the petition. above quoted sufficiently charge the town council with neglect of duty, it should be observed these averments are not all admitted by the pleadings. On the contrary, the converse of some of them is thereby admitted. By demurring to the answer, the plaintiffs below admit every thing that is well pleaded therein, whether by way of traverse or otherwise. They thus admit, for example, the averments of fact above quoted from the third paragraph of the answer, among which are that they never "informed the town council how much money would be required during the year 1882, or during any other period of time, for the construction of said works or any part thereof;" that they never "requested the town council to appropriate any specified sum of money to the construction of said water-works;" and that they never "furnished the town council with any estimate or statement, either of the contract price of constructing said water-works or of the probable cost of constructing the same, otherwise than by contract." We have already said it was their duty to do these things before they are in a position to charge the town council with negligence and refusal to perform their duty. This is an additional reason why the peremptory writ of mandamus should not have issued. The second to fifth specifications of error inclusive are sustained.

In the first specification it is claimed "the court erred in deciding that the issue of bonds commanded in the alternative writ of mandamus was not in violation of section 8, article IX of the Constitution." This presents substantially the same question that was considered and passed upon by this court in Wheeler v. Philadelphia, 77 Penn. St. 352, and Pike County v. Rowland, 94 Penn. St. 238. The very able and ingenious argument of the learned counsel for defendants below has failed to convince us that there is any error in the construction given The first assignment is dismissed. by the learned judge to the constitutional provision above referred to.

Judgment reversed and judgment for defendants below on the

demurrer.

LEBANON MUTUAL INSURANCE Co. v. ERB.

INJUNCTION— LACHES — IGNORANCE.

Where a defendant in an execution has had a trial and has failed to make a defense, which he might have made under the pleadings in the cause, he cannot, after judgment duly entered, seek relief by an injunction staying the collection thereof, unless prevented from making the defense on the trial by the action of the plaintiff.