concern with his personal debts. Now, the defendants offered to prove at the trial that Rockafellow borrowed the money in the sinking fund from the sinking-fund commissioners at 4 per cent per annum; that he held it under this arrangement for eight years before the bond sued on was given, and paid the interest regularly at the rate agreed upon. They also offered to prove, in connection with this offer, that each year the commissioners reported the receipt of the interest from him to the city council, and their reports were approved. The learned judge rejected this offer, for the reason that it did not undertake to set forth "what action was taken, either by the council or the sinking-fund commissioners, before the loaning of the money." But if the fact was as alleged, that, without the knowledge of the sureties, their principal had been turned from a mere custodian of public moneys into a borrower of them, by the action of the municipal officers, and the money subjected to all the risks of loss incident to its being mingled with the funds of the borrower, and used in his private business, the sureties had a right to

for that reason, no claim upon them for any part of its loss. The position of the city, on the other hand, is that the entire amount demanded belonged to the city, and was in the hands of the city treasurer as its lawful custodian. The assignments of error all relate to some phase of this general controversy, and will be sufficiently considered by determining the relation of F. V. Rockafellow to the four items into which the plaintiff's demand is divisible. The general rule is that the liability of both principal and sureties in an official bond must be measured by the terms of the instrument. The terms must receive a reasonable construction, and, if there has been no violation of official duty, there has been no breach of the condition for which the sureties can be required to account. It follows, necessarily, that for an extraofficial act or undertaking of the principal the sureties cannot be held responsible. 2 Am. & Eng. Enc. Law, 4676. And if the ordinary course of official action is departed from, for the benefit and at the instance of the party to whom the bond is given, and loss results, the sureties are not, in law or morals, responsible for such loss, un-show it; and if they did show it, then on the less they assented to the departure from the ordinary course of official action which made the loss possible. Rogers v. The Marshal, 68 U. S. 1 Wall. 644, 17 L. ed. 714; Skinner v. Wilson, 61 Miss. 90. What was the official duty of the city treasurer? Simply to act as custodian of the funds belonging to the city. As to the sinking fund, it is clear that he had no power to invest it or use it in any manner, except under the direction of the sinking-fund commissioners. They had power, under the ordinance, to invest the funds under their control, subject to the approval of the council, and it was made their duty to report annually the condition of the sinking fund and its securities to the council. The eleventh section of the same ordinance provides that "the treasurer of the city shall be the custodian of the moneys and securities of the sinking fund, subject to the inspection and order of said commissioners." As the commissioners had power to invest the sinking fund in such securities as the council should approve, they had, of course, power to lend it to the person who had the custody of it as an officer. When they did this, the money was no longer in the treasury, but the security taken for its return stood in its place. The treasurer, as such, held the security. The individual borrower held the money, not as an officer, but as a debtor to the city. The sureties would, in that case, be liable for the care of the security held by their principal, or city treasurer. They would not be liable for the payment of the money borrowed by him from the sinking-fund commissioners, because that was a personal debt, for the collection of which the creditors would be compelled to look, as in the case of any other loan, to the solvency of the borrower, and the securities given at the time the loan was made. When asked to pay the personal debts of their princi pal, the sureties may well reply: It was the official conduct, not the personal solvency, of the treasurer for which we engaged to be responsible. If he has been guilty of a breach of official duty, for that we are liable as sureties upon his official bond; but we have no

commonest principles of justice they had a right to defend as to so much of the plaintiff's claim. What difference could it make to the sureties whether the proceedings were strictly formal, so long as they resulted in the loss of the money, and were taken by those who had a right to invest it. Suppose the loan had been made to some other person, upon whose failure it was lost, and that in the treasury there was found the borrower's note, taken by the commissioners. Would the sureties, if sued, be compelled to show that every step taken by the sinking fund commissioners had been regularly entered on their records, and had been in exact compliance with the law, before they could set up the fact that the money had been taken out of the treasury by those who had the right to invest it? Unless there was some breach of official duty on the part of the treasurer in parting with the money, neither he nor his sureties could be held for its loss because the commissioners had made a bad loan. If they had the power to make the loan, and did make it, they took the money out of the treasury for investment, and the treasurer no longer held it as the custodian. This offer should have been received. Whether the evidence would have supported it we cannot determine, but the defendants had a right to make the showing offered if it was in their power. It was, in effect, an offer to show that the sinking fund had been invested, and had not been in the treasury for more than eight years. The sinking fund commissioners might be liable to the city for a loss resulting from their neglect of duty, but the defendants are not their sureties, and have no concern with that question.

The interest on the sinking fund stands on quite different ground. If Rockafellow, as a banker, had borrowed of the sinking fund commissioners, the money which Rockafellow, as city treasurer, had in his custody, and had paid interest on it regularly, as alleged, for eight years, the interest, having been paid by him as borrower to himself as city treasurer, was as to himself and his sureties, in the treas

ury. For this he was liable to account. His failure to pay it over to his successor was a breach of his official duty, and for such breach of official duty his sureties were liable on their bond. They were liable, not because it was interest due from him to the city, but because it was interest received by him as city treasurer from a borrower from the sinking-fund commissioners. It was income derived by the commissioners from an investment of the sinking-fund money, paid to the treasurer as the proper receiving officer and custodian of all uninvested money belonging to the city. If the money was not, in fact, lent to Rockafellow, then he was not liable to interest; for, as city treasurer, his duty was to hold the money subject to the orders of the proper officers, and he had no right to use it. His duty was simply to pay over, when legally required so to do, what he had received by virtue of his office; and for the discharge of this official duty his sureties were liable. When this duty was discharged their liability was at an end. Either he held the sinking fund as treasurer, or he had borrowed it as a banker. The rejected evidence, if it had sustained the offer, would have settled this question, and the extent of the liability of the defendants as to this part of the plaintiff's claim.

price of an election to the office of treasurer has no valid consideration to support it. It is a promise that we cannot recognize as binding on him who made it. A fortiori is it without binding effect on the sureties upon an official bond.

It is contended that, as the law requires the city treasurer to keep accounts of his receipts and disbursements of the revenues of the city, and to make at stated intervals transcripts of these accounts for the information of the municipal government, the transcripts so made should be held to be conclusive upon him and his sureties as to the amount of public moneys received by him. This is putting the effect of the entries by the treasurer upon his books too strongly. They should be held to make a case, prima facie, against him and those who are in privity with him. They cannot, however, preclude the defendants from showing that the items, or some of them, have been erroneously entered,-that their principal was mistaken in his view of his own liability, or was disposed unfairly to make them responsible for sums of money for which no recovery could otherwise be had against them. Their liability is limited, as we have seen, by the terms of the bond, to a breach of official duty. If it was not the duty of the treasurer to pay, as such, the price demanded from him as the consideration of his appointment, his failure to pay it was not a breach of official duty, and therefore not a breach of his official bond. By the simple device of charging himself with that for which he was not liable, he could not shut the mouths of his sureties, or estop them from alleging the truth in their own behalf. The interest, whether it be treated as an exaction the law does not authorize, or a price demanded for the office, must be struck out, so far as it relates to the general funds of the city. So far as the facts now appear, we see no reason why the sureties should not be held liable for the general funds of the city. This disposes of the questions raised on this record.

The remaining question relates to the general funds of the city, and the effect of the agreement by Rockafellow to pay interest at the rate of 3 per cent on balances in favor of the city. It does not appear that there was, as to this money, any agreement entered into. Some member of the city council, in naming another candidate, stated that the person named by him would, if elected city treasurer, pay interest at the rate of 3 per cent on the balance in favor of the city. Another member said, if Mr. Rockafellow was re-elected, he would do as well by the city as any one else. The election then took place and resulted in the choice of Mr. Rockafellow by a decided majority. The relation of borrower and lender was not created by these statements. It does not seem to have been contemplated. The balance would be constantly shifting in amount. The treasurer was to be prepared at all times to honor the warrants of the proper officers, and upon the surplus of receipts over disbursements, as balances were struck from time to time, interest was to be allowed. This agreement, if made, did not amount to a loan of any particular sum of money by the city council to the treasurer, but was in the nature of a premium demanded from him as the price of COMMONWEALTH of Pennsylvania, Appt., the office. It was a premium for which he was not liable, which he could not be compelled to pay if he had taken defense to it, and for which the sureties are not liable.

The

The assignments of error are sustained, so far as they relate to the questions now considered, the judgment is reversed, and a writ of venire facias de novo awarded.

Mitchell, J., dissents from so much of this opinion as holds that plaintiff cannot recover interest on balances of general account. Reversed in 43 L. ed. 49.

George E. PAUL.

(170 Pa. 284.)

put up by a nonresident manufacturer NOTE.--The decision in Com. v. Schollenberger

agreement, if made, was against public policy, A ten-pound package of oleomargarine and is incapable of enforcement. If, as we incline to think, he was not a borrower of the money of the city, but was to hold the money subject at all times to the call of the proper municipal officers, his duty and his sureties' undertaking on his behalf, are discharged by the payment of the amount of money that came into his hands as treasurer, regardless of any promise to pay interest, or a premium in any other form, for the privilege of holding the office. The promise to pay interest as the

(Pa.) 22 L. R. A. 155, is here followed and approved, to the effect that packages for retail trade cannot be protected as original packages of interstate commerce against the exercise of state police the Pennsylvania court was the first to decide this As intimated in the footnote to that case, point, and up to the present time it remains untouched by courts of the United States and of other states.

power.

and sent into the state for sale at re-
tail to an individual consumer, and thus sold by
an agent for use as food, is not an original pack-commerce.
age the sale of which is protected against state
laws by the Constitution of the United States.

APPEAL by the Commonwealth from a County Taxing Dist. 145 U. S. 1, 36 L. ed. 601,

that we should enter upon the discussion of the manufacturers. They put up the article in 10existence and extent of the police power resid-pound packages, suited for the retail trade; ing in the several states of the Union. It is and, because they do not allow their agents to quite unnecessary to argue that the power open or divide these, they treat their trade as of Congress to regulate commerce between the wholesale, though in fact they supply the accitizens of the different states was not intended tual consumer, and not the retail dealers. to abridge the lawful exercise of the police Looking now at these facts in the light of the power by any of the state governments. If ju- cases cited, we shall find every question raised dicial decisions can be said to settle any question, by them has been decided against the defendthese questions are clearly and properly settled ant by the Supreme Court of the United States, by the decisions of the highest tribunal known except one. The validity of our act of assemto our laws, and settled in accordance with the bly has been distinctly affirmed as a lawful rules laid down in this state since its first or exercise of the police power. Act May 21, ganization. In Powell v. Pennsylvania, 127 U. 1885. The fact that an internal revenue license S. 678, 32 L. ed. 253, the right of this state to affords the defendant no justification for disredeal, in the exercise of its police power, with garding a lawful exercise of the police power the manufacture and sale of oleomargarine, by the state is stated with equal clearness. The and the validity of the particular statute under proposition that the judiciary of the United consideration in this case, were distinctly af- States should not strike down the police power firmed. During the last year (1894) a Massachu- of the states, in the exposition of the interstate setts statute relating to the same subject came commerce powers of the general government, before the Supreme Court of the United States was asserted and abundantly vindicated in in Plumley v. Massachusetts, 155 U. S. 461, 39 L. | Plumley v. Massachusetts, supra (decided withed. 223, and was sustained as a lawful exer- in the last year). Our statute is directed especise of the police power. The defendant in cially against the sale of oleomargarine as that case had, as the defendant in this case has, an article of food. The defendant, in wilful a license from the internal revenue department and flagrant disregard of the letter as well as of the United States, authorizing him to deal the spirit of the statute, keeps these tubs of in oleomargarine. It was held, however, that the commodity manufactured by his princithis did not authorize him to engage in the pals at the store in Callowhill street, for sale manufacture or sale of oleomargarine in viola- "as an article of food." He offers them for tion of the state laws, lawfully passed, forbid sale for use as an article of food, and he sold ding or regulating such manufacture and sale. to Crawford the 10-pound tub which is the The dealer in articles which the state, in the ground of complaint in this case for use as food. exercise of its police power, places under re- Now, it is very clear that this sale was a violastrictions, must make his peace with the state tion of our statute. The conviction was emiin which his business is conducted, as well as nently proper, therefore, and should be suswith the internal revenue laws of the United tained, unless the sale can be justified as one States. This proposition the defendant denies. made of an "original package," within the He has made his peace with the tax laws of the proper meaning of that phrase. The nonresiUnited States, but denies the power of the state dence of the manufacturer does not play any to regulate or restrict his sales of the commod- important part in this case, for he comes into ity in which he deals, and asserts that he is en- this state to establish a "store" for the sale of gaged in interstate commerce, within the true his goods, pays the license exacted by the revintent of the constitutional provision confer-enue laws, and puts his agent in charge of the ring upon Congress the power to regulate com | sale of his goods from his store, not to the merce between the several states. In deter- trade, but to customers. We have, therefore, mining the question thus raised, it is important a Pennsylvania store selling its stock of goods to keep in mind the facts found by the special verdict, as follows: (1) The defendant is a resident in and citizen of this state, with a store or place of business at No. 214 Callowhill street, Philadelphia. (2) He is conducting the sale of oleomargarine as the agent for "Chicago Butterine Company," which is a firm or corporation doing business in Illinois, and is the licensed dealer at No. 214 Callowhill street. (3) The oleomargarine was not made from milk or cream. It was designed to be used in place of butter. It was sent from Chicago to Philadelphia to be sold as food, and the tub sold to Crawford, which is complained of in this case, was sold to him for use as an article of food. (4) The tub contained 10 pounds only; was put up, sealed, and stamped at the factory in the state of Illinois; was received in the same form in Philadelphia, and then "placed in defendant's store, and offered for sale as an article of food." (5) This was one of " many transactions of like character made by the defendant during the last two years;" or, in other words, this was the way in which the defendant did business for his nonresident principals, the

to its customers, for their consumption, from its own shelves; and, unless these goods are in such original packages as the laws of the United States must protect, the sale is clearly punishable under our statute.

We first encountered this question of what shall constitute an original package, within the meaning of our national interstate commerce legislation, in Com. v. Zelt, 138 Pa. 615, 11 L. R. A. 602. A nonresident manufacturer of intoxicating drinks put up his whiskey and other liquors in quart and pint bottles, adapted for use in the retail trade to consumers. These he sent to an agent in charge of a store rented for the purpose in Washington, Pa. The bottles were corked, some sealing wax put over the cork, and the brand or initials of the manufacturer impressed thereon. The bottles so secured were then put in pasteboard boxes or covers, and packed in open boxes or barrels, for shipment to the Pennsylvania store. When they were received at the store the bottles were arranged and displayed on the shelves, and offered for sale to the consumer as original packages of whiskey. Neither the distiller who

shipped the whiskey, nor his agent who sold it, | public or private injury inflicted by the sale, had a license to sell intoxicating drinks under but on the manner in which the thing sold the liquor laws of this state, but made sales of comes into possession of the seller. If he makes whiskey and beer by the pint and quart under the article, or buys it of another citizen of the the pretense that each bottle was an original state, he cannot sell it without punishment. package of commerce. The learned judge be- If he buys it of a nonresident who sends it to fore whom an indictment against the seller of him across the state line, he may sell it with the bottles of liquor was brought to trial sub- impunity and the state is powerless to stay his mitted the question to the jury whether this hands or to regulate his sales. A pint of whiskey method of putting up the liquors in bottles was put up in a flask, if made or bought in this not adopted as a device to evade the liquor laws state, cannot be sold without a license granted of this state. The jury found the fact to be by the courts after an examination into the that it was a mere device, and rendered a ver character of the applicant and his business. dict of guilty. Upon an appeal to this court The same flask of whiskey put up across the the ruling of the court below was affirmed, and, border may come, as an original package, into in speaking on the second assignment of error, any community, and be sold to any person,we said that whether whiskey or beer could be whether a minor, a drunkard, or a lunatic,put up in pint bottles, and sold by the single under the protection of the Constitution of the bottle, as an original package, under the pro- United States. We cannot adopt a constructection of the interstate commerce laws, was a tion that seems to us so unnatural and unreaquestion that would be decided when it was sonable, and that would work such absurd and squarely raised. The question was next raised monstrous results. On the contrary, we hold, as in Com. v. Schollenberger, 156 Pa. 201, 22 L. R. we think is held by the recent case of Plumley A. 155, 4 Inters. Com. Rep. 488, and its de- v. Massachusetts, already referred to, that the cision became necessary to the disposition of mere fact that a police law may affect the trade that case. In that case a nonresident manu- in articles brought from another state does not facturer of oleomargarine had established a amount to an attempt to regulate interstate store for its sale in Philadelphia, and held a commerce, or to an assumption of power belicense, under the internal revenue laws, au- longing to Congress. thorizing such sale. His agent sold a tub Coming now to the facts of this case, we find of "the goods" to a boarding-house keeper, the alleged "original package of commerce" to for use, in the place of butter, on his table. j be a small tub of oleomargarine, containing 10 The defense was that the tub had not been pounds, and in fact sold to a consumer for use, broken or divided by the seller, and was there as an article of food, upon his table. It is true fore an original package within the meaning of that the defendant treats his trade as one carthe interstate commerce cases. We held that ried on at wholesale, but the facts of the special the conclusion did not follow from the fact verdict show that this is not because he sup stated, and attempted to define an "original plies dealers or sells in large quantities, for package" as such a package as was used in shipment, but because he treats the little tubs good faith by producers and shippers for con- and packages he sells his customers as "origi venience in handling and security in trans-nal packages of commerce," and his lawbreakportation of their wares in the ordinary course of actual commerce. But we also said that where the size of the package was adapted for the retail trade, so that breaking of bulk" was not necessary to "reduce the goods into the common mass" and fit them for the retail trade, the traffic so conducted was not inter state, but infrastate, commerce; or, in other words, the common every day retail traffic of the community in which the store was located. Let us look at the consequences of the adoption of the opposite rule. If a pint bottle of whiskey is an original package, under the protection of Congress, and can be sold as such regardless of the police legislation of the state, we cannot punish the sale to a minor, to a person of known intemperate habits, to a lunatic, on election days, or on the Sabbath. All power over the traffic for police purposes is gone. And why? Because the power to regulate in terstate commerce intended to guard against stoppage along state lines for examination or the collection of customs duties, has been extended by construction until it is made to reach and protect a retail traffic carried on within any state, if the things sold have come into the retailer's store from a nonresident manufacturer or shipper. If this be a sound construction, then the power of a state to restrict or prohibit an injurious traffic does not depend on the deleterious character of the thing sold, or the manner in which sales are made, or the

ing traffic as "interstate commerce.' He does
not "break bulk," by taking 1 pound out of
a package, and weighing it on his scales, for
the supply of a customer, but requires him to
take a whole tub,-whether of 10 pounds, or
of 2 or 1, is immaterial, but it must be a whole
package, as it was put up at the factory. If
the pint bottle or the pound package has not
been opened and divided before the sale, the
contention is that it has not become a part of
"the common mass" of property entering into
the ordinary business of the citizens of the state,
but is an original package, under the protection
of Congress, as interstate commerce. The ques-
tion to which we are thus brought is the same
that was encountered in Com. v. Schollenberger,
156 Pa. 201, 22 L. R. A. 155, 4 Inters. Com.
Rep. 488. It is whether a package intended
and used for the supply of the retail trade is
an "original package," within the protection
of the interstate commerce cases. We held in
that case that a manufacturer who puts up his
products in packages evidently adapted for and
intended to meet the requirements of an un-
lawful retail trade in another state, and sends
them to his own agent in that state, for sale to
consumers, is not engaged in interstate com-
merce, but is engaged in an effort to carry on a
forbidden business by masquerading in a char-
acter to which he has no honest title.
not dealing with the legislative question.
Whether the trade in oleomargarine is injuri-

We are