text:
    CORPORATIONS.
    [Cuyahoga (8th) Circuit Court,
    June 7, 1909.]
    Marvin, Winch and Henry, JJ.
    John Beck v. Simon Fishel.
    Officer Ceiling Property of Corporation at Secret Profit Required to Account for Same to Stockholders.
    The president and general manager of a corporation induced all the stockholders to agree to a sale of all the corporation assets at a, price which would net them 200 per cent, on their investment: when stating the proposition to them he also stated that he expected to make a good thing for himself over and above what the others made; it afterwards turned out that he received 1450 per cent, for his holdings and a contract on his part not to engage in the business for a term of years. Held: That his disclosure was not full enough to protect him in actions thereafter brought by one of the stockholders for an accounting, after discovery of the real price received for the property.
    [Syllabus by the court.]

      Smith, Taft c& Arter, for plaintiff.

      Max P. Goodman and White, Johnson, McCaslin & Cannon, for defendant.
   MARVIN, J.

The plaintiff in this action seeks to have the defendant make an accounting of moneys received by him on the sale of certain stock in the Fishel Brewing Co., a corporation which was sold by the defendant for the plaintiff, and he seeks to recover whatever amount such accounting shall show as due to him from the defendant.

The facts are these: The Fishel Brewing Co. was a corporation; it was organized in 1904, and began business June, 1905, and was sold out to the Cleveland & Sandusky Brewing Co. after having done business about nineteen months. The paid up capital stock of this corporation was $221,000, of which the defendant owned $25,000, the remaining $196,000 being owned by other parties, $5,000 of which was owned by the plaintiff. The defendant was the president and general manager of this corporation. The plaintiff aside from owning stock had no connections with the corporation and no acquaintance with its business. The business for the time the corporation did business was exceedingly profitable,- the net profits for the year 1906 on this capital of $221,000 was $85*000. The defendant at the annual meeting in January, 1907, made a report showing the financial situation of the company, and showing this net profit for the year 1906. The plaintiff was not present at the stockholders’ meeting at which this report' was made, and had no actual knowledge of what the profits of the business were. On February 13, 1907, the defendant sent notice, in writing, to the stockholders of this corporation requesting that they meet at the office of the company on February 15th, at 2 o’clock in the afternoon, and that, they bring their certificates of stock with them. The plaintiff and most of the stockholders responded to the call; the plaintiff took with him his certificate of stock, and was there introduced to Mr. Fishel, with whom up to that time he had no personal acquaintance. He was informed by Mr. Fishel that there was an opportunity to sell out the assets of the corporation for two hundred per cent, of the par value of the stock, and at the suggestion of Mr. Fishel, the plaintiff and most of the other stockholder's signed a writing which authorized Fishel to transfer this stock to the Cleveland & San-dusky Brewing Co. for 200 per cent, of its face value.

On February 22, 1.907, the defendant, pursuant to the authority given him by the stockholders, sold the entire assets, excepting only the cash of the company in the bank or in the hands of its treasurer, and the horse and buggy used personally by the president of the company, to the Cleveland & Sandusky Brewing Co. By the contract of sale the Fishel Brewing Co. agreed to furnish contracts of Simon Fishel and his son, Theodore Fishel, that each “will not at any time within ten years from the date of transfer, either directly or indirectly engage or be in any manner whatsoever interested, either as principal, or agent, or employe, or stockholder in the business of manufaeting or vending beer in or within the radius of 150 miles from the city of Cleveland, sta' of Ohio, nor aid or assist anyone else to do so within said limit, except only as a stockholder of or employe of or wish the consent in writing of the Cleveland & Sandnsky Brewing Co., its successors and assigns. ’ ’

The contract further provided that the Fishel Co. would procure and furnish “an agreement from Simon Fishel that he will not for the period of ten years from the date of the acceptance herebf, sell any of his property which he may now own or which he may own during said period, without first giving a reasonable opportunity to the party of the second part to purchase the same from him on such terms as he would be willing to accept from any other party, and secondly, that during said period he will not lease for saloon purposes to any other party any property which he may now own or which he may own during said period, without giving the party of the second part, its nominees or assigns, a reasonable opportunity to lease said property from him on the same terms which he would accept from another party.”

The amount paid by the Cleveland & Sandusky) Brewing Co. was $850,000. Out of this amount the debts of the Fishel Co., which amounted to about $95,000, were to be paid, leaving after the payment of debts about $775,000. Out of this amount the defendant paid to the plaintiff and to the other stockholders (exceping himself) two hundred per cent. (200 per cent.) of the par value of their holding,.". This required $392,000, still leaving in the hands of the defendant the sum of $363,000, which was 1450 per cent, of the par value of his stock, whereas the other stockholders received but 200 per cent.

It is urged that a part; of this $363,000 was paid because of the agreement that neither the defendant nor his son would in any wise engage in the brewing business within 150 miles of Cleveland for the period of ten years.

The defendant was a man of large experience and superior attainments for the conducting of the brewing business, and without question the Cleveland & Sandusky Brewing Co. was very desirous of putting an end to any competition on his part in the business, and they could well afford to pay a liberal amount to prevent such competition. They were also desirous of putting an end to the competition of the Fishel Brewing Co. The plant of this company was the best (Mr. Fishel says) of its size in or about the city of Cleveland, and it had done so large a business as greatly to interfere with and lessen the business of the Cleveland & Sandusky Brewing Co. The fact that this company had such an excellent plant and 'that its competition was so prejudicial to the Cleveland & Sandusky Brewing Co. was due in great measure undoubtedly to the ability and experience of the defendant. The fact that its plant-was of the very best was because it was erected and equipped under the direction and management of the defendant, but to the extent that the Fishel Co. was a dangerous competitor and would justify the paying by the Cleveland & Sandusky Brewing Co. a large price in excess of the physical value of the assets, was the property of the Fishel Co., notwithstanding the fact that this business was due in great measure to the efforts of the defendant, for the defendant was its employe, he was paid a salary of $6,000 a year to manage this business, and if the good will of the concern was enhanced in value because of his superior management, the company was entitled to the benefit of it; but to the extent that in the future it was desirable to so tie up Mr. Fishel that he could not compete with the Cleveland & Sandusky Brewing Co., was a matter for which he alone would be entitled to be compensated.

It will be noticed, however, that in the contract of sale no special amount was fixed for this contract of Fishel to remain out of the business, except as he should be employed by the Cleveland & Sandusky Brewing Co., so that it 'is left entirely uncertain as to what the last named company was to pay as a consideration for this refraining, on Fishel’s part, to engage in the business. If any attempt had been made to arrive at the value of this part of the contract it would seem as though the compensation which Fishel had theretofore received for his services would be taken as a basis upon which to make the computation. The highest salary which he had ever received, so far as appears from the evidence, he received from the Cleveland & Sandusky Brewing Co. for the period of six years, ending in February, 1904. During that period he had acted as general manager of the Cleveland & Sandusky Brewing Co. at a salary of $8,500 per year, and this at a time when the business was not interfered with or threatened by the unfriendly legislation which Fishel says had already reduced and is likely very greatly to reduce the sale of the product of breweries.

It would hardly seem that a great amount would be taken into account in estimating the value of his services for the future, with all this legislation of which he speaks, interfering with the business, than the compensaton which he received during the six years he was with the Cleveland & Sandusky Brewing Co. Taking that as a basis, it will be found that if $69,000 had been paid to him for this restriction on his employment, he could have taken out $8,500 as pay for his first year, loaning the balance at 5 per cent, per annum, payable annually, and he could have received $8,500 at the beginning of each of the remaining nine years, so that under this estimate, if $69,000 had been allowed him as compensation for his keeping out of the brewery business, he might have done nothing and still have had as much as he could have earned at the largest salary that he had ever received and be paid each year in advance. If this amount had been taken out of the $363,000 there would still have been in his hands 1175 per cent, of the value of his stock, but he says that he communicated to the stockholders such facts as relieved' him from accounting to them for all that was received for this property, and the facts in relation ,to such communication to the stockholders, are these:

On February 15th, after the plaintiff had signed the writing which he signed and to which attention has already been called, an informal meeting of the stockholders was held in a room at the brewery plant, at which Fishel made some remarks. This meeting was attended by the plaintiff. Whether he remained until its conclusion or not we do not determine, buf he was there when Fishel made the statement, testified to by him, as appears on page 303 of the bill of exceptions. That statement was:

“Gentlemen: The Cleveland & Sandusky Brewing Co. is after us and want to buy us out. The Cleveland & Sandusky Brewing Co. isn’t after the plant or after you to love you or me, they are after the trade and they want to get me and my son out of the way, and here is the option, and if we can get from them — they didn’t make any offer yet, and I did not neither — and if I can get what I made np my mind here — If I can get all the money back you put in, and if I can get the bonds, at the market price what it was on that 'date, 94%, and if I can get preferred stock at 74, and I wouldn’t take no common stock under no means, and then we make the deal. Besides that I must make a great big sum for myself and for my son. If I will get that, now will you be satisfied.”

He says that after having said this he asked if there was anybody present who had anything to say against it, because if he had, he should say so then and the deal would be off, because he says he would not go a step further, and then he added, “if there is one man who has the idea it should not be done, he should express himself and the deal will be off and we will be friends again.”

Nobody made any objection. All seemed to be well pleased that they were getting two hundred per cent, for their stock. One of them, a Mr. Ryan, stated in a loud voice so as to be heard by all, that he hoped that Fishel would make a million. He seems to have been extraordinarily well pleased, for he says that theretofore when he has held stock in a corporation, his dividends consisted in assessments on his stock, whereas here he was getting 200 per cent, for his stock. It is perfectly manifest that all of the stockholders at that meeting were greatly rejoicing that the sale could be made at 200 per cent, and were willing that Fishel should make a good thing besides. At this meeting of the stockholders a resolution, somewhat remarkable, was adopted. This resolution was introduced by Max P. Goodman, the man through whom the transfer of the company from Fishel to the Cleveland & Sandusky Brewing Co. was made. The last clause of this resolution reads: “Be it further resolved, that we admire the candor of our president in stating that if the sale were made he expected to receive a good return himself, irrespective of the proposition submitted to the stockholders.”

Unless it had occurred to somebody friendly to Fishel that it might be that when the stockholders came to learn that he had received 1450 per cent, on his stock, while they had received but 200 per cent., or had received 1450 per cent, for his stock, including his contract worth at the outside not more than $69,000, not to compete with the Cleveland & Sandusky Co. for ten years, that they would not feel that he was especially entitled to thanks for his “candor” in stating that if the sale were made, he expected to receive a good return himself.

Nothing has thus far been said in reference to the restriction of the sale or lease of any real estate of Fishel, that is, giving the Cleveland & Sandusky Brewing Co. an opportunity to purchase or lease on as good terms as he could get from anybody else, and the reason nothing was said about it is this was in nowise a restriction which could interfere with Fishel’s getting the highest price either upon lease or sale of any or all of his real estate.

That the law requires of an officer of a corporation the utmost good faith in dealing with his stockholders is recognized everywhere; he is a trustee for his stockholders, and as such is bound to communicate to them the facts which affect the value of their property, and in case of the sale of the property, the facts known to him which affect the price at which the property is sold. Ordinarily the officer of a corporation is bound to account to his stockholders for the avails of any sale made by him, as any other trustee is bound to account to his beneficiary for the avails of sales made by him, and he is excused from paying over to his stockholders each his aliquot part of the avails of the sale, when, after full and fair disclosure, the stockholder consents to the officer retaining part of such avails as compensation to himself. See Oliver v. Oliver. 118 Georgia 362 [45 S. E. 232]; Stewart v. Harris, 69 Kan. 498 [77 Pac. 277; 66 L. R. A. 261; 105 Am. St. 178]; New York & N. N. Ry. v. Hudson, 16 Beavan’s 485; 3 Thompson, Corporations, Sec. 4024, and cases cited.

In Sec. 4025, Thompson, Corporations, this language is used:

“The rule does not mean that a trustee is absolutely prohibited from making a profit out of his trust relation. It means that he must not make a secret profit out of it. His duty is not to avoid wholly the doing anything for his own benefit, for the class of trustees we are considering, the directors of corporations, are generally interested in the subject-matter of the trust. His obligation to the beneficiaries in the trust is to make a full, fair and complete disclosure of all the circumstances attending any transaction which will benefit himself in any blatter different from the manner in which all the shareholders will be benefited. If the body of the shareholders are made fully acquainted with the nature of the transaction, and agree to it, and agree that he shall have and retain the special benefit that may accrue from it, then they will not be heard afterwards to claim that this benefit shall be surrendered up to them as a profit, which he ought not, in good conscience, to retain.”

In the case of Bristol v. Scranton, 57 Fed. 70, to which attention is called by counsel for the defendant, it appears that William W. and Walter Scranton were brothers, that they were the officers and managers of a corporation, that they sold the assets of that corporation to another corporation and at the same time each entered into a contract for a large consideration that he would not compete with the purchaser in the business carried on by the purchasing corporation, and the court held that under the facts in that ease the stockholders of the selling corporation were not entitled to have that which was paid- to these individual men as an inducement for them to refrain from competing with the business of the purchasing corporation, They reason that the amount paid to each was a fixed and certain amount; that it was not an unreasonable amount; that it was contained in a separate contract; that the stockholders of the selling corporation received not only all that their stock was worth, but all that the purchasing corporation paid for it. In the opinion this language is used on page 78:

“Undoubtedly the rule is that one acting in a representative or fiduciary capacity is not allowed so to deal with the subject-matter of his agency or trust as to benefit himself privately, and the agent or trustee who thus makes a profit out of his agency or trusteeship, must account for the same to his principal or cestui que trust; and it may be conceded that the rule applies, as a principle of public policy without regard to the actual fairness of the transaction, or the merits of the service rendered or the price paid in case of a sale or purchase.”

The court then goes on to show that the amount paid to these two officers was paid to them upon the personal contract of each and was in no proper sense paid as a part of the purchase price of the selling corporation. Even in this case the court says:

“It was unfortunate, and we think a mistake, that the Scranto'ns did not give the plaintiffs full information with respect to their individual contract- before the stockholders meeting, but in our judgment they are not justly chargeable with intentional concealment.”

Under the facts and the decision in this last named case we do not feel that it aids the defendant in the present action. At the time of the meeting on February 15th, Fishel did not know, he says, how much he would be able to obtain. At that time he did not understand that there was to be a contract which would prevent either him or his son from competing in the brewery business with the Cleveland & Sandusky Brewing Co. This we find from his testimony as to what occurred later, when he had a meeting with a committee of the Cleveland & Sandusky Brewing Co., at which meeting, for the first time, it was suggested that he would be asked to enter into a contract to refrain from engaging in the brewing business. He says he was surprised when this was proposed to him, and that he at once made up his mind that he must have more than he had before expected to demand.

We find that the statement made by Fishel to his stockholders after the plaintiff and many others had signed the contract authorizing the sale of their stock, that he would make a good thing for himself besides obtaining 200 per cent, for them, falls a long way short of being a disclosure which would cause any of them to dream that he was to get either 1450 per cent, or 1175 per cent, for his stock, while they got but 200 per cent, for theirs.

The result is, we find, that the plaintiff is entitled to the accounting for which he prays. We have not the exact figures upon which to make the accounting, but it can probably be made by counsel very readily, and when such accounting is had the plaintiff will be given a judgment for his proportionate share of the entire amount received on the sale of this property.


source: Caselaw Access Project

author: MARVIN, J.

license: Public Domain

text:
    PARTNERSHIP.
    [Cuyahoga (8th) Circuit Court,
    May 24, 1909.]
    Marvin and Henry, JJ.
    Judge Winch not sitting.

      P. E. Nielsen v. C. E. Taylor.
    Representations to Third Person Not Conclusive of Partnership.
    It is not conclusive that a partnership exists between two persons that they represented themselves as partners in their dealings with third persons, if plausible reasons are given for so representing themselves, and the evidence otherwise establishes the fact that no partnership in fact existed between them.
    [Syllabus by the court:]
    Error.

      Affirmed, no op., Nielson v. Taylor, 83 Ohio St. 442.

   MARVIN, J.

The relation of the parties here is the reverse of the relation in which they stood in the court below. The terms plaintiff and defendant however, as used in this opinion, refer to the parties as they stood in the original case.

Several suits were brought by the plaintiff against the defendant, each upon an account for services claimed to have been rendered by the plaintiff to the defendant. In each case the defendant answered that whatever services were rendered by the plaintiff were rendered not to the defendant, but as a member of a co-partnership composed of the plaintiff and the defendant. These several cases were originally brought before a justice of the peace and each was appealed to the court of common pleas, where they were consolidated and tried as one case. It was admitted at the trial, that if the plaintiff was entitled to recover the amount claimed in the several actions was the proper amount, so that'the only issue submitted to the jury was the question of whether the plaintiff and defendant were partners at the time the services were rendered. The jury returned a verdict for the plaintiff and judgment was entered upon that verdict, and it is to reverse this judgment the present proceeding is prosecuted.

The charge to the jury is not complained of and the only question left for this court'to pass upon is whether the verdict is so manifestly against the weight of the evidence as to require a reversal. The plaintiff testified unequivocally that he was employed by the defendant for which he was to be paid $100 a month and to receive one-third of whatever profits should be made out of a business in which he was so employed by the defendant. He said the only talk of partnership between him and the defendant was that the defendant held out to him that he might thereafter become a partner. The defendant,however, testifies that a partnership was formed and he introduces two contracts, one of the date of July 20, 1905, the opening sentence of which reads:

“This agreement entered into this 20th day of July, 1905, between the American Automatic Weighing Machine Co., party of the first part and the N. C. T. Stamping & Mfg. Co., composed of P. E. Nielsen and C. E. Taylor, parties of the second part. ’ ’

This is a contract by which the party of the second part contracted to manufacture certain machines for the party of the first part, and it is signed on behalf of the party of the second part by P. E. Nielsen and Charles E. Taylor, the plaintiff and the defendant in this action. Another contract was introduced, the opening sentence of which reads; ‘ ‘ Articles of agreement made and concluded at Cleveland, Ohio, this 11th day of December, 1906, and by and between P. E. Nielsen and C. E. Taylor, known as the N. C. T. Stamping & Mfg. Co. party of the first part,” and “John H. Williams, party of the second part,” and.this is a contract whereby the party of the first part undertook to manufacture certain devices for the party of the. second part, and this is signed on behalf of the parties of the first part in these words.- “N. C. T. Stamping & Mfg. Co., by C. E. Taylor, P. E. Nielsen.”

The name C. E. Taylor as appears upon each of these contracts is admitted by the plaintiff to have been written by himself, and these two contracts unexplained, tend strongly to support the proposition that Taylor was a partner In this business carried on as the N. C. T. Stamping & Mfg. Co., but the testimony of the plaintiff is that he signed these with Nielsen to aid him in securing two contracts and that whatever they tended to represent to the other parties and to the contracts they did not represent the true relation between himself and Nielsen. The jury believed Taylor’s testimony. We find no reason why they should not have believed it. Believing it, they returned the only verdict which could have been returned properly, and the judgment is affirmed.

Henry, J., concurs.


text:
    CRIMINAL LAW — PERJURY.
    [Cuyahoga (8th) Circuit Court,
    May 21, 1910.]
    Marvin, Winch and Henry, JJ.
    Ulysses G. Walker v. State of Ohio.
    1. Indictment for Aiding and Procuring Perjury Sufficiently Charging Accused with Knowledge that Principal had Knowledge.
    In an indictment for aiding, abetting 'and procuring another to commit perjury, the fact that the accused knew that the person whom he aided knew that he was committing perjury is sufficiently alleged by charging that the accused willfully and corruptly aided, abetted and procured the other in making, verifying and falsely swearing to a bank report, “then and there well knowing said report to be false and untrue, and thereby to commit willful and corrupt perjury in the manner and form as aforesaid.”
    2. Presence when Perjury Committed not Necessary for Conviction for Aiding Crime.
    One may be found guilty of aiding and abetting the commission of perjury, though the evidence does not show that he was personally present when the perjury was committed.
    3. Wording of Oath not Material.
    No particular form of words is necessary to the taking of an oath if both the officer who administers it and the person taking it, understand that an oath is being administered.
    4. Picturesque and Exaggerated Language by Prosecutor not Ground for Reversal of Conviction.
    Picturesque and exaggerated language used by counsel for the state in addressing the jury in a criminal case does not necessarily require a reversal of a conviction.
    Error.

      Norton T. Horr and Jay P. Pawley, for plaintiff in error.

      John A. Cline and Walter P. Meals, for defendant in error.
   MARVIN, J.

The plaintiff in error was tried and convicted in the court of common pleas of the crime of perjury. The'claim on the part of the state being that he aided, abetted and procured one William G. Duncan to knowingly swear falsely in a certain affidavit which was made as to the truth of a certain report, made to the superintendent of banking of the state of Ohio, the said Walker being the president and the said Duncan the treasurer of a banking company known as ‘ ‘ The South Cleveland Banking Company.” The statute defining perjury and providing for its punishment is Sec. 6897 R. S. (Sec. 12842 G. C.), and reads:

“Whoever either verbally or in writing, on oath lawfully administered, willfully and corruptly states a falsehood as to a material matter in a proceeding before a court, tribunal or officer created by law, or matter in relation to which an oath is authorized by law, is guilty of perjury and shall be imprisoned in the penitentiary not less than three years nor more than ten years. ’ ’

There is no statute making a separate crime of subornation of perjury, but Sec. 6804 R. S. (See. 12380 G. C.) reads:

“Whoever aids, abets or procures another to commit any offense may be prosecuted and punished as if he were the principal offender.”

So that if any offense is charged here against Walker it is a charge of perjury, and results from his suborning Duncan to knowingly swear falsely.

The sufficiency of the indictment was challenged both by motion to quash and by demurrer, both of which were overruled and the validity of the indictment sustained.

It is here claimed that the court erred in sustaining the indictment, the claim being that in order to make the indictment good, as against one who procures another to commit perjury, it must appear from the indictment that the thing sworn to must have been false; that it must have been known to the party making the oath that it was false; that it must have been known to the party procuring the swearing to be done that it was false and it must be known to the party procuring the swearing to be done that the party making the oath knew that it was false. It is said that the indictment here, though it does charge that what was sworn to by Duncan was false and that Duncan knew it to be false, that Walker knew it to be false, yet it does not charge that Walker knew that Duncan knew that it was false, the argument being that unless Walker knew that what he was inducing Duncan to do would be perjury on Duncan’s part, then there would be no guilt on the part of Walker because Walker did not know that he was inducing Duncan to commit perjury, because there would be no perjury on the part of Duncan if he believed that what he swore to was true,, and so if Walker supposed that Duncan supposed that what he said was true, then Walker, though ho so induced Duncan to swear to something that was not true did not know that he was inducing Duncan to commit perjury, because he did not know that Duuc'an did not know it was not true, and our attention is called to the case of Stewart v. State, 22 Ohio St. 477. The first proposition in the syllabus of that case reads:

“An essential element in the crime of subornation of perjury is the knowledge or belief on the part of the accused, not only that the witness will swear to what is untrue, but also that he will do so corruptly and knowingly.”

The second proposition reads:

“An indictment for subornation of perjury, setting forth in due form of law the crime of willful and corrupt perjury by the suborned witness, and then averring that the defendant feloniously, willfully and corruptly did persuade, procure and suborn the witness to commit ‘said perjury in manner and form aforesaid,’ sufficiently charges the defendant with knowledge that the witness would corruptly and knowingly swear to that which was false.”

In the opinion by Chief Justice Welch, it is said, speaking of the indictment in that case:

“It first charges in due form of law, the crime of willful and corrupt perjury by Saxton, including the averment that Saxton knew his testimony to be false and fictitious, and concluding with the averment that Saxton had ‘in manner aforesaid’ committed willful and corrupt perjury; and it then charges that Stewart ‘procured, persuaded and suborned the witness to commit said willful and corrupt -perjury in manner and form aforesaid. ’ The natural and primary ,import of this language is, to charge upon Stewart a knowledge of the guilt and corruption of the witness. The essence of perjury is the knowledge of the witness that .what he states is false. To persuade him to commit perjury is to persuade him to stifle his conscience, and to state under oath what he knows not to be true. To persuade him to do less, that is, to make the false statement without the guilty knowledge, is not to persuade him to commit the crime. ’ ’

It would appear from this that the proposition is sound, that it must appear from the indictment that the accused knew that if the other party did that which he was persuaded to do by the accused, such other party would thereby commit perjury. But it is said that this indictment charges that the accused “procured, persuaded and suborned the witness to commit said willful and corrupt perjury in the manner and form aforesaid.” Tested by that rule it seems to us that this criticism of the indictment is not well taken. The indictment in the present case sufficiently charges Duncan with knowledge so as to constitute his swearing as perjury on his part. It distinctly charges knowledge on the part of Walker that what Duncan was to swear to was false, and then follows these words:

“And the said TJlysses G-. Walker then and there and at all times aforesaid, and on the day and year aforesaid, prior thereto, and at the county aforesaid, did feloniously, willfully, corruptly and unlawfully aid, abet and procure him, the said William G. Duncan in making, verifying and falsely swearing to said report, and the matters and things therein stated as aforesaid, then and there well knowing said report and the matters and things therein stated to be false and untrue, and thereby to commit willful and corrupt perjury in the manner and form as aforesaid.”

We think the allegation in this indictment that Walker knew that what Duncan would swea,r to was known by Duncan to be false is stated more distinctly than in the indictment considered in Stewart v. State, supra. The language here is that Walker feloniously, willfully, corruptly and unlawfully did aid, abet and procure Duncan, in making, verifying and falsely swearing to said report. That is, Walker feloniously procured Duncan to swear falsely and thereby to commit willful and corrupt perjury. Certainly, judged by the rule laid down in the Stewart case, this knowledge on the part of Walker that Duncan knew that what he swore to was false, is sufficiently stated.

It is however urged that the facts upon which the averment rests that Walker aided, abetted and procured Duncan not being stated, the indictment in that regard is not sufficient. This objection is, as we think by the case of Stewart v. State, supra, completely answered, and is so answered by the second paragraph of the syllabus, already quoted.

It will be seen that in that case the averment that the defendant did “persuade, procure and suborn the witness to commit said perjury in manner and form as aforesaid,” was held to be sufficient as an indictment. It is true that in that case the question does not seem to have been raised as to whether the specific acts of the defendant, constituting the aiding, abetting and procuring, were necessary to be stated, but as the court held the indictment good and as the charge was practically in the same words as in the indictment now being considered, we should regard it as exceedingly technical, indeed as against the authority of that case, to hold the indictment here bad by reason of the alleged defect now being considered.

Under our statute, See. 7215 R. S. (13581 6. 0.), which provides that, “No indictment shall be deemed invalid for any defect or imperfection which does not tend to the prejudice of the substantial rights of the defendant upon the merits, ’ ’ we think this indictment clearly sufficient.

Since by our present statute one who aids, abets or procures another to commit a crime is himself a principal offender and may be convicted of the principal offense upon the establishment to a proper degree of certainty that he did either aid, abet or procure another to commit the crime, we find that under the indictment under consideration the state would be permitted to introduce evidence to establish the aiding, abetting or procuring, and we do not find that one might not be found guilty of aiding and abetting the offense of pei-jury without being personally present when such perjury was committed.

In the case of Chidester v. State, 25 Ohio St. 435, the statute under consideration made the procuring of a crime to be committed a separate crime from the principal offense, and so-differed from the present statute in that regard, and under the statute as it then was, it was held, that one under indictment for forgery could not be convicted of that offense ■without being personally present when the forgery was committed. It by no means follows from this that if he had been indicted for procuring the defendant, or abetting the forging of the instrument, it would have been necessary that he be present. Indeed, the language of the court clearly indicates that such would not be the case. This is said in this connection because the brief- of counsel for plaintiff in error urges that under the evidence in this case, it being clearly made to appear that Walker was not personally present when the alleged perjury is claimed -to have been committed, he could not be found guilty of aiding or abetting the perjury but only of procuring the perjury to be committed, if he could be convicted of anything, and so, it is urged, that under the facts of the case, the defendant was not properly-convicted under the evidence, because it does not appear that Duncan would not have done what he did without any suggestion or procurement on the part of Walker. And attention is called to the definition of the word “procure” and quotation is made from 22 American & E. Ency. L. (2d Ed.) p. 697, of these words: ,

“Subornation of perjury is procuring a person to commit perjury which he actually does in consequence of such procurement.”

Section 1197 of Bishop’s Criminal Law is called to our attention, where it is said in the brief of counsel, this language is r>sed, in speaking of perjury, that such perjury was committed “in consequence of the persuasion.” We have carefully examined the section in the 8th Edition of this work, published in 1892, and fail to find the language quoted. In support of the text several eases are cited, and we are not prepared to say that the proposition is not true and that one can only be convicted of procuring another to commit this crime when such other does commit it in consequence of such procurement. But further, we are not prepared to say that the jury might not, under the evidence in this case, have properly found that whatever was done by Duncan in the matter under consideration, was done in consequence of the procurement by Walker or the inducements held out to him by Walker.

On December 2, 1908, Walker was president of a banking corporation known as the South Cleveland Banking Company. Duncan was the treasurer of the same corporation. Under the laws of the state, the officers of this corporation were required to make a written report, under oath, from time to time, to the superintendent of banks of the state. At the date last aforesaid a report was made out on printed forms furnished by the said superintendent upon which blanks were left to be filled out in writing. On what is known as the front page of that report, one of the things required to be reported was ‘ overdraft. ’ ’ The amount filled out as against this item by Walker was in figures $567.71. This was not a true statement of the condition of the bank as to “overdrafts,” unless more than $300,000 which was owing to the bank by the Werner Company of Akron, was properly treated as a loan /and not as an overdraft. This was carried on the books of the company as an overdraft. It grew out of transactions between this bank and the Werner Company, involving more than a million dollars, which last named amount was owing by the Werner Company to the banking company at the time this report was made out. The banking company at this time held bonds of the Werner Company to a large amount, which represented a part of this indebtedness or in any event which were held by the bank because of this indebtedness.

The claim is made on the part of Walker that the bank was not the owner of the bonds last spoken of, but held them only as security for the payment of this indebtedness, which has been mentioned in this opinion as more than $300,000, and that this sum was a loan to the Werner Company; that the bank did not own the bonds, and that therefore the bonds were not included as such in this report, but that this amount was included in what was reported under the heading of “Loans and Discounts.” The evidence establishes that at one time the bank held the notes of the Werner Company for this amount; that it gave up these notes, endorsed them as canceled and paid and accepted these bonds, and we think from the evidence it is perfectly clear that either these bonds were the property of the bank and should have been included as such, or they were held as’security for an overdraft to this amount. Walker says that he did not report to the directors of the bank the true situation of this indebtedness because he feared to do it. All that is said by Walker about it in his testimony shows that both he and Diuncan were purposely deceiving the directors of the bank with reference to this debt, and that it was intended to deceive the superintendent of banks, and from Walker’s testimony we think the jury were warranted, in finding that this indebtedness to the bank should have been reported as an overdraft. It was in fact such, and it was so carried on the books of the Werner Company. It was by Walker and Duncani intended that the directors should understand it to be other than what they knew it to be, and for this purpose a report was made out as it was, making this very serious false statement. After Duncan had made out the report as herein indicated, he signed his name to an affidavit, printed at the foot of the report, which reads:

“I, W. G. Duncan, Treas. of the South Cleveland Banking Company, do solemnly swear that the above statement is true, and that the schedules on the back hereof fully and correctly represent the matters therein to be covered to the best of my knowledge and belief. ’ ’

To this there follows the following:

“The State of Ohio, County of Cuyahoga. Sworn to and subscribed before me this 2nd day of Dec., 1908.
“G. W. Gill,
“Notary Public.”

The notarial seal of the notary is affixed.

On the back of this report blanks were filled out by Walker, undertaking to give the situation of the bank as to loans and discounts. This was equally false in that it reported the amount of bonds of the Werner Company held by the bank as $10,000, omitting entirely the $300,000 worth of bonds which have been spoken of, .and which were, as already stated, either the property of the bank or held as security for the overdraft already mentioned. Walker says that this placed upon the back was put upon it by him after the portion written by Duncan was put on, and after the affidavit was signed by Duncan. He says also that he saw this was so signed by Duncan; that it was laid by Duncan on his desk, and that he expected him to swear to it.

It is urged that this, with all other evidence put together, fails to show that Walker procured Duncan to swear to this report. He directed Duncan to make the report, knowing that he was to swear to it. When he gave that direction it is perfectly clear that both he and Duncan understood that it was to be a false report in the particulars already pointed out. Duncan was an officer subordinate to Walker, and knew that if he followed the direction of Walker, as expressed or necessarily implied, he must make out and swear to a false report. If it was false, as we find it to be, Duncan knew that it was false; Walker knew that it was false; and Walker knew that Duncan knew exactly what the situation was, and even if the jury were to have found that Duncan did not make and subscribe this report because of the procurement of Walker, they surely would have been justified in finding that Walker aided and abetted in haviog it done — in having all' done by Duncan that was done by him.

But it is said that the evidence is not sufficient to show that this report was sworn to by Duncan. Duncan says it was; Gill the notary says that it was. The presumption is that it was, because the notary so certifies. It is true that on cross-examination neither Duncan nor Gill show that they remember exactly what was said, but they show, as we think, enough to warrant the jury in finding that it was sworn to. No particular form of words is necessary to the taking of an oath. Witnesses in open court who are sworn to testify in trials seldom say anything, but the clerk of the court administers to them an oath, to which afterwards on their part they are held to have assented, and if having gone through with this ceremony they wilfully testify to what is false, they have committed perjury, although no word was used by them in the taking of an oath.

After the argument of the case counsel for the defendant b,elow made a large number of requests, which the court was asked to give in charge to the jury. The language introducing these requests reads:

‘ ‘ Thereupon the defendant requested the court to charge the following propositions separately and not as a series. ’ ’

Then follow thirty-seven propositions so requested to be charged. Among them is No. 34. It will be seen that by the language used in introducing these requests they were to be charged separately and not as a series. This did not require of the court to pick out parts of any one of these requests and give them to the jury, unless the court found that that entire ■request should be given. It simply called upon the court to say whether any one or more of these thirty-seven requests should be given as a whole. This thirty-fourth request included among other things, the following: “You must assume that Duncan, when he testified, did hope that by testifying as he did he would escape prosecution and conviction.” Immediately following that and as a part of the same request, is this language: “If you find that when Duncan appeared before Gill on December 2, 1908, he said to Gill, I want to swear to this statement, and that all that Gill said was, “Is this true, Will?” and that no other ceremony was performed, I charge you that that did not constitute the administration of a legal oath, and that you must return a verdict of not guilty.”

Now whatever may be said as to the last sentence read, the court was clearly justified in declining to give the thirty-fourth request, because of the' language contained in the request as hereinbefore quoted, to wit, “You must assume that Duncan when he testified did hope that by testifying as he did he would escape prosecution and conviction.” There was no error in refusing to give this thirty-fourth request as a whole.

Attention is called to this language because it was especially urged upon the court in argument. What the court said to the jury in reference to the administration of an oath sufficiently instructed the jury as to what it was necessary for the state to prove in that regard. And as to each of the other requests, so far as they state the law applicable to the case, they' were properly charged in the instruction given. There was no error in the charge of the court, nor was there any error in refusing to give the several requests.

It is further urged that there was error on the part of the court in its ruling on the admission of evidence, in this:

“When Walker was upon the stand he was asked in cross-examination by counsel for the state, if the bank did not have about eight thousand depositors. This question was objected to, the objection overruled, and an exception taken on the part of Walker. Walker then answered: ‘There were between six and seven thousand as I remember. ’ ’ ’

We find no error in this ruling. It had developed in the evidence before this that the bank was insolvent; that it had on deposit two million dollars; that considerable more than half of this amount was loaned to the Werner Company; that the Werner Company was in the hands of a receiver, because of its insolvency, and that it, as a customer of the bank, had been permitted to overdraw to the amount of more than $350,000; that of the overdrafts carried by the bank at the time this report was made out, other than the overdraft of the Werner Company, was about $576.73. The state had a right in the cross-examination of Walker to search his conduct in this matter and to have it appear to the jury that the treatment of the Werner Company, of which Walker was a salaried officer, was so stupendously different from its treatment of every other depositor, and to emphasize this, that there were thousands of depositors who, altogether, had been permitted to overdraw only to this trifling amount, while this one customer was permitted to overdraw the enormous amount which it had overdrawn.

Complaint is further made that the court erred in overruling the motion for a new trial because of the language used on the part of each of the counsel for the state in his argument to the jury. Among the things counsel for the state in argument said (speaking of Walker) is:

“He is an American and entitled to your consideration; entitled to justice; entitled to no more because he sits on that side of the table; no more than if he were among the seven or eight thousand depositors who seem to sympathize in this prosecution with this side of the table; whose all has been swept away, we contend, by his misconduct.”

It is said that this language was calculated to inflame the prejudices of the jury without being based upon any legitimate evidence. We have already said that the evidence given by Walker, upon cross-examination, that there were between six and seven thousand depositors was legitimate. The counsel in the heat of the argument used the words seven or eight thousand instead of six or seven thousand, but it can not be supposed that this difference in the number of depositors could have had any effect upon the jury.» Whatever was to be drawn from the number, and whether it was six thousand or eight thousand, was immaterial. But it is said, that there is no evidence that the “all” of these depositors had been swept away by the misconduct of Walker, and through the mismanagement of this bank. As has already been said, it was shown by the evidence that these depositors had put more than two millions of dollars into this bank, and that more than one-half of it had been loaned, in violation of law, to one concern, which was shown to be insolvent, and was no such exaggeration of facts as would justify the court in holding that the language used constituted misconduct on the part of counsel to say that the “all” of these depositors had been swept away. Suppose, instead, he had s.aid, Walker is entitled to no consideration greater than the thousands of depositors whose means to the amount of more than a million of dollars have been swept away, or whose means to the extent of more than a million of dollars have been loaned to an insolvent corporation, of which Walker was an officer; and this language would have been justified by the evidence.

Counsel for the state also said: ‘ ‘ Every dollar of the money that he put into that company came out of the pockets of the depositors of the South Cleveland Banking Company; not a dollar of his own money went into it.” We think, notwithstanding that which Walker says as to the amount that he contributed to the capital stock of the Werner Company, that wffien the counsel W'as speaking of the money which was owing by the Werner Company to the banking company, he may well be excused for using the language which he did.

Some of the language used by the assistant prosecutor is rather picturesque, but did not constitute misconduct. In speaking of some one other than Walker, probably of Mr. Werner, who was a witness, he said:

“As soon as you drag down Captain Wagner’s bank, the Akron Savings Company, you had to seek, like a vampire for new blood and new victims, and you lit upon the bank of New-berg; that is the bank that your vampire’s tentacles clinched upon; that is the one that this blood sucking mouth ran into.”

As already said, this language is somewhat picturesque, but it did not constitute misconduct, under the evidence. A concern which had borrowed money from one bank to a large amount and that bank had gone to the wall, and then continuously for a period of years drawn from this South Cleveland Bank to the amount of more than a million dollars, without any adequate authority, might very well justify the characterization of it as a vampire which was sucking the blood from the bank.

Complaint is made that the prosecuting attorney used this language: “Aye! There are thousands of people walking the floor now because of what Walker did. If Walker had done right and made that report right, that bank would still live and those thousands of depositors would have been saved. ’ ’

To properly understand this language, it must be considered with its context. The entire sentence used by the prosecutor was as follows: “He forgot about the other side when he told how Walker walked the floor at night in wee small hours, and worried about that bank, ’ ’ and then follow the words complained of. There appears to have been no suggestion made when this language was used that counsel for the other side had not spoken of Walker’s walking the floor at night because of the suffering he was undergoing on account of the affairs of the bank, and yet no evidence was introduced nor would it have been admissible to introduce it, to show any such walking or suffering on the part of Walker. But it having been said by counsel for Walker, as we have a right to assume it was said, because no complaint was made of the statement of the prosecuting attorney that it was said, the latter might well be excused for using the language used by him to counter-act the feeling of sympathy for Walker which the language used by his counsel was calculated to affect.

Without selecting further language used by counsel in the argument it must suffice to say, that after reading the arguments of both of the attorneys who represented the state, we find no sefious misconduct; certainly no misconduct that would justify a reversal of the case, and painful as the duty is to contribute in any degree to the imprisonment of a fellow-citizen and especially of one who has had the respect of the community in which he lives, we feel constrained to perform that painful duty as the judge of the court below and the jury below felt called upon under their oaths to perform it, and the judgment of conviction is affirmed.

Winch and Henry, JJ., concur.


text:
    REPLEVIN.
    [Lorain (8th) Circuit Court,
    April 29, 1908.]
    Marvin, Winch and Henry, JJ.
    J. D. Smith Foundry & Sup. Co. v. Lorain County Banking Co.
    Right of Property or Possession Must be Found Before Judgment for Defendant Can be Entered.
    In an action in replevin, where the issues are submitted to the court without the intervention of a jury, it is error for the court to find for the defendant and assess his damages without first finding whether, at the beginning of the action the right of property, or the right of possession only, was in the defendant, and this finding must be carried into the judgment entry.
    Error.
   MARVIN, J.

The record in this ease, for our consideration, consists simply of the transcript from the court of common pleas. The original pleadings were not filed in this court, nor have we any bill of exceptions. A motion is made here by the plaintiff in error for leave to file the original pleadings. That motion is denied. The statute provides, Sec. 6716 R. S. (Sec. 12263 G. C.), that:

"The plaintiff in error shall file with his petition either a transcript of the final record, or a transcript of the docket and journal entries, with such original papers or transcripts thereof as are necessary to exhibit the error complained of. ’ ’

Whether or not we might, in our discretion, permit the filing of the original papers at this time, it is not necessary here to .consider. We have before us a transcript of the docket and journal entries of the court of common pleas, and if from those we find that there ivas error in the proceedings of .the court, the judgment must be reversed.

We do find that the action was in replevin. This we find from the entry of February 19, 1907, which reads, "Original papers from C. O. Lord’s docket to wit, affidavit in replevin, writ of summons, replevin bond by plaintiff, and by defendant tiled.” We find also from this entry that a bond was filed by the plaintiff in replevin. We further find from this transcript, by the entry of October 1, 1907, that:

"On the application of the defendant, Charles Oahoon, as constable, and the Lorain County Banking Company, that the said the Lorain County Banking Company might be substituted as the defendant in such action and it appearing to the court that the said the Lorain County Banking Company is the party in whose favor the attachment issued in the lower court, it is therefore ordered, adjudged and decreed that the defendant, the Lorain Banking Company, be substituted as a party and in the place of the said constable, and that the defendant be allowed to file an. answer herein instanter. ’ ’

We find here that at the trial a jury was waived by all parties, and that the cause came on to be heard before the court upon the petition of the plaintiff and the answer of Charles A. Cahoon, constable, and the Lorain County Banking Company and upon the evidence presented by plaintiff herein. At the close of plaintiff’s evidence and after said plaintiff had rested the said defendants moved the court for judgment for the defendants; thereupon the court, after argument by counsel, found the plaintiff had failed in its evidence to sustain the material allegations of its petition, and thereupon, upon the application of the defendants found that the damages sustained by the said defendants were in the amount of $350.

“Wherefore it is ordered, adjudged and decreed that the defendant, Charles A. Cahoon, recover of the plaintiff the said damages aforesaid in the sum of $350, for which judgment is hereby entered together with the costs of the suit.”

There are matters shown on this transcript which seem to be, in some degree at least, original. The banking company was substituted as a defendant in the action for Cahoon, who was sued originally as a constable. Cahoon afterwards was permitted to file an answer, and the transcript shows that such answer was a general denial. What the answer of the Lorain County Banking Co. was we can not know, because the original files are not before us. The judgment is in favor of Cahoon, but not in terms as constable, and that judgment was in his favor, after another party had been substituted in his stead as a defendant. However, the. difficulty in the case is that the issues having been submitted to the court without the intervention of a jury, the court proceeded to render a judgment for the defendant, without having first found whether it was the right of property or the right of possession which was in the defendant in whose favor the judgment was rendered.

Section 5826 E. S. (Sec. 12069 G-. C.), provides:

“When the property is delivered to the plaintiff or remains in the hands of the sheriff, as provided in section fifty-eight hundred and twenty, if the jury, upon issue joined, find for the defendant, they shall also,find whether the defendant had the right of property, or the right of possession only at the commencement of the suit: and if they find either in his favor, they shall assess to him such damages as they think right and proper, for which, with costs of suit, the court shall render judgment for the defendant.”

The purpose of this section is manifest, that in case the right of property is found in the defendant, and it has been-taken in the proceedings in replevin by the plaintiff, the defendant will be entitled, as his damages, to the value of the property. If the right of possession only is in the defendant, it may be that his damages will be much less than the value of the property. For he may have the right of possession as a pledgee, or in some such way as that, but under such circumstances he would not be entitled to the entire value of the property which was taken from him. For the same reason that the jury are required to find whether it is the right of property or the right of possession which they find in the defendant, where the judgment is in his favor, the court would, when the matter is submitted to it without the intervention of the jury, find -whether it is the right of property or the right of possession that is in the defendant. If it be said that where a judgment is rendered for the defendant, it must be presumed that the court made the right finding as to whether the right of property or the right of possession only was in the defendant, still the judgment fails to fix which it is, and surely the intention of the statute is that it shall be known by the judgment whether it is the one or the other that is found m the defendant. In the case of Wolf v. Myer, 12 Ohio St. 432, this is said by the court, quoting from the statute:

“In all cases where the property has been delivered to the plaintiff, where the jury shall find upon issue joined for the defendant, they shall also find, whether the defendant has the right of property, or the right of possession only, at the commencement of the suit.”

Then follows this language by the court:

“It is error for the court, in such a case, to assess the defendant’s damages, without the intervention of a jury, and without finding whether the defendant had the right of property or the right of possession only, at the commencement of the suit. ’ ’

It will be seen by this that if the jury is dispensed with, then the court doing that which the jury (if there is a jury) is required to do, must find affirmatively whether it was the right of property or the right of possession only which was in the defendant at the time of the commencement of the action.

For error in entering judgment for the defendant without having first found whether the right of property was in the defendant or the right of possession only, the judgment is reversed and the cause remanded to the court of eómmon pleas.

Winch and Henry, JJ., concur.


author: WINCH, J.

text:
    GRADE CROSSINGS — STREET RAILWAYS.
    [Summit (8th) Circuit Court,
    October 12, 1912.]
    Marvin, Winch and Niman, JJ.
    Northern Ohio Trac. & Light Co. v. Akron (City).
    1. Constitutionality of Act Compelling Street Railways to Share Cost in Elimination of Grade Crossings,
    Sections 8892, 8893 and 8894 G. C., giving to municipalities the right to compel a street railway company to bear a reasonable portion of the cost to the municipality incurred in the abolition of railroad grade crossings, is constitutional, does not vest judicial power in a legislative body, does not deny due process of law, nor sanction the taking of private property for public uses without providing compensation.
    2. Liability of Street Railway for Elimination of Grade Crossing Determinable by Jury.
    When, upon the abolition of grade crossings in a street in which there is a street railroad, the municipality and the street railway company can not agree upon the portion of the cost to be borne by the street railway company, the municipality may, by ordinance, fix the amount to be paid by the company and institute an action in court for its recovery, but the recovery in such case will not be as upon a judgment, but for such amount as the jury shall determine to be a reasonable portion of the cost "of the improvement.
    [Syllabus by the court.]
    Error

      Rogers, Roivley & Mather, for plaintiff in error.

      Jonathan Taylor, for defendant in error.
   WINCH, J.

The sole question attempted to be reserved upon the record of this case is the validity of Sec. 8, act 95 O. L. 356, and the amendment thereto adopted April 2, 1906, 98 O. L. 192

The act of 1902 was an amendment of the original grade-crossing act of 1893, 90 O. L. 359. The first seven sections of the act of 1902 provide for the separation of grades where steam railroads cross municipal streets at grade. • The constitutionality of these sections is conceded in this action.

Section 8 of the act of 1902 reads as follows:

“In case the track or tracks of any street railway company or companies within the limits of any municipality where the improvements authorized by this act are made shall cross at grade or otherwise a public street or the right-of-way of any railroad company or companies at a point where, under the plans and specifications provided for in this act, it has been determined to construct the said improvements, the municipality shall have power by ordinance to require such a street railway company or companies do bear a fair and reasonable proportion of the costs assumed by said municipality in the making of said improvement, not exceeding one-half the portion payable by said municipality; provided, however, that said street railway company or companies shall keep in repair at its or their own.expense all tracks affected by such improvement and all construction work of whatever character which may be necessary to support such tracks.”

On August 4, 1902, the council of the city of. Akron took action toward the abolishment of the Mill street grade-crossing in said city, by the erection of a viaduct over the tracks of three steam railroads where they crossed said street.

On April 4, 1904, the council passed an ordinance requiring the traciion company, whose tracks were located upon Mill street, to bear one-half of the city’s portion of the cost- of the Mill street viaduct, reciting that one-half of the city’s estimated cost of the viaduct was $36,000.

Later in the same year an ordinance was passed approving plans for the viaduct and determining the proportion of the estimated cost of the improvement to be borne by the three railroads and the city.

Section 8 o-f the act of 1906 reads as follows:

“In case the track or tracks of any street railway company or companies within the limits of any municipality where the improvements authorized by this act are made shall cross at grade or otherwise a public street or the right-of-way of any railroad company or companies at a point where, under the plans and specifications provided for in this act, it has been determined to construct the said improvements, the municipality shall have power by ordinance to require such street railway company or companies to bear a fair and reasonable proportion of the cost assumed by said municipality in the making of said improve-merit, not exceeding one-half the portion payable by said municipality; and the municipality shall have the right of action against awy such street railway compa/ny or companies for such proportion of the said; cost as said ordinance shall require said company or companies to hear, and such proportion of said cost shall he a lien upon all the property, hoth real and personal, of the said company or companies situated in the county in which the municipality is situated from and after the date of the passage of said ordinance; provided, however, that said street railway company or companies shall keep in repair at its or their own expense all tracks affected by such improvement and all construction work of whatever character which may be necessary to support such tracks. And the council, hoard of legislation or other legislative hody of said municipality may hy ordina/)ice provide the mode and time or times of payment for the proportion of the cost of said improvement to he home hy said street railway company or compa/nies.,

The only change made by this amendment was the addition of the words in italics.

On August 3, 1908, the city passed the following ordinance:

“Section 1. That the said the Northern Ohio Traction & Light Company be and it is hereby required to bear the following amount of the said cost of said improvement, to-wit: twenty-seven thousand nine hundred and ninety-one dollars and seventy-nine cents ($27,991.79), which said amount is hereby determined to be a fair and reasonable proportion of the cost assumed and paid by said city in the making of said improvement, and which said amount is not in excess of one-half of the part of the cost of said improvement assumed and paid by said city.
‘ ‘ S'ection 2. That, unless the said the Northern Ohio Traction & Light Company shall pay the costs to be paid to said city of Akron, the said sum of twenty-seven thousand nine hundred ninety-one dollars and seventy-nine cents ($27,991.79) on or before eleven (11) days after the passage of this ordinance, the solicitor of said city is hereby authorized and directed to commence an action in a court of competent jurisdiction to enforce payment by said company to the said city of said sum, or to file a cross-petition for said purpose in a certain casé pending in the Court of Common Pleas of Summit county, Ohio, entitled the Northern Ohio Traction & Light Company against the city of Akron, and being case No. 12552.
‘ ‘ Section 3. The clerk of council is hereby directed to give notice of the passage of this' ordinance to said the Northern Ohio Traction & Light Company by leaving a copy thereof at the office of said company forthwith upon the approval by the mayor.
“Section 4. This ordinance shall take effect at the earliest period allowed by law.”

Meanwhile, on December 14, 1904, the Northern Ohio Trae. & Light Co. had filed its petition in the cause now under review, asking that the city be restrained from assessing any part of the cost of said improvement against it.

After the passage of the amendatory act of 1906, the city filed its answer and cross-petition praying for judgment against the traction company in the sum of $27,732.92, which it alleged to be one-hal'f of that part of the cost of the viaduct assumed by the city in its agreement with the railroad companies.

A demurrer to this cross-petition being sustained, the ordinance of 1908 was adopted and a new cross-petition filed upon which the parties went to trial, other pleadings being filed by the parties in the meantime.

This cross-petition contained an allegation that $27,991.79 was the fair 'and reasonable proportion of the cost assumed by the city in the making of said improvement which the traction company ought to pay.

The jury brought in a verdict in favor of the city in the sum of $18,916.66, about $10,000 less than the amount claimed by the city.

There is no bill of exceptions filed in this case showing the nature of the evidence introduced on the trial and the charge of the court, but attention being called to the fact that the verdict was less than the amount fixed in its ordinance by the city and claimed by it 'in its cross-petition, it was conceded by counsel on both sides that the court received evidence on the question of the fair and reasonable proportion for the traction company to pay, if anything, and charged the jury that the ordinance of the city was not conclusive upon that subject.

The small size of the verdict compels the conclusion that such must have been the case.

This fact is important, for the whole contention of counsel for the traction company proceeds upon the theory that Sec. 8 of the grade-crossing act, now found as Secs. 8892 to 8894 G. C. is unconstitutional, because it vests judicial power in a legislative body, denies due process of law and the equal protection of the law, and sanctions a taking of private property for public use without first providing compensation therefor.

If Sec. 8 must be construed as vesting in the city council the power to fix and determine the exact amount that a traction company must pay it when a separation of grades is determined upon at a crossing where street railroad tracks are upon the street, the contention of plaintiff’s counsel would require more critical examination and review than seems necessary to a decision of this case, from another view of the grade-crossing act which seems tenable.

The city and the steam railroad companies are the only necessary parties to the abolishment of a grade-crossing. The street railroad company has nothing to say about the propriety of separating the grade; if the city decides that the railroad tracks must pass over or under the street and an agreement is made with the railroad company, or the mode and manner of crossing is determined according to law, the street railroad company must adapt itself to the change and go with the street, over or under the railroad tracks.

The separation of grades, however, is manifestly beneficial to the street railroad company; it renders the movement of its cars safer and quicker.

The burden of the street railroad upon the street increases the cost of the change, particularly in the case of a viaduct, for it must be built of a width to accommodate the tracks and the general public, and of a strength to sustain the heavy traction cars, which weigh many tons more than other vehicles.

It would seem that for the benefits thus received the traction company should pay, even in the absence of a statute on the subjeet, and the statutes under consideration are only a declaration of what natural justice should require, even though no decisions on the subject have crystallized the law of the land with respect to such conditions. This statement, of course, applies only to the declaration of the rights of the parties under the relations created by the necessity for a separation of grades; it is not meant as authorizing one of the parties to determine the liability of the other, finally and without other formality.

Now, with this view of the law, what did Sec. 8 of the act of 1902 provide? That “the municipality shall have power by ordinance to require such street railroad company or companies to bear a fair and reasonable proportion of the cost assumed by said municipality in the making of said improvement, not exceeding one-half the portion payable by said municipality. ’

This authorizes the city to come to an agreement with the street railroad company as to what is fair and reasonable for it to pay and to settle with it for that amount, the action of the city being confirmed by ordinance, a. proper and formal way of recording its action. The limitation “not exceeding one-half the portion payable by said municipality,” is for the benefit of the street railroad company.

This section does not specify how the city shall require the street railroad company to pay; it does not authorize the city by ordinance to determine what amount is fair and reasonable.

It seems that this section would authorize the city, if it could not come to an agreement with the street railroad company as to how much it should pay towards the improvement to “require” it to pay a fair and reasonable proportion thereof by proceeding against it according to law.

Suit brought, as in this case, by the filing of a cross-petition setting up all the facts with regard to the improvement, its cost and the benefits supposed to flow to all the parties therefrom, leaving to a jury under the direction of a court to determine from all the facts presented in evidence what was fair and reasonable for the street railroad company to pay, if anything, under all the circumstances, would be according to law and violate none of plaintiff’s constitutional rights.

The presumption is in favor of the judgment in this case and such a trial must have been had.

■ This view of the statute makes it constitutional. It is a universal rule in the construction of statutes that they shall be held by the courts to have a constitutional operation if it is possible to give them such operation.

The amendment of Sec. 8 in 1906, was an effort to make this effect of the act of 1902 clearer, but it is doubtful if it has served such purpose. The words then inserted were: “and the municipality shall have the right of action against any such railway company or companies for such proportion of the said cost as said ordinance shall require said company or companies to bear.”

If this amendment means that the city can sue for the amount determined by its ordinance as upon a judgment and recover that amount or more, then the amendment might be invalid. If it means that the city might by ordinance determine what was fair and reasonable in its judgment for the street railroad company to pay, being unable to agree with the company on the amount, if any, which it in justice should pay, present a bill therefor and, if not paid, sue on such bill, then it would be constitutional. It would be according to the practice of all creditors, who make out their own bills and, if not paid, sue on them, claiming the full amount that they themselves think ought to be paid. At the trial the proper amount due the plaintiff is determined, without regard to what he thinks he should receive.

That course, we understand, was followed in the trial here under review.

An examination of the ordinance of August 3, 1908, shows that it was a mere statement of what the council thought the traction company should be required to pay as its fair and reasonable proportion of the cost of the improvement, and that said amount was not more than one-half of the cost assumed and paid by the city with directions to its attorney, the city solicitor, to bring suit for that amount if it was not paid in eleven days after the claim was presented to the company.

We are not required to give this ordinance or the law under which it was. passed an unconstitutional effect, and the trial court gave it no such effect, though the plaintiff in error seeks a strict construction of the law and its application-in an unconstitutional manner so that it may escape the payment of an obligation for which a fair interpretation of the law makes it liable.

Judgment affirmed.

Marvin and Niman, JJ., concur.


text:
    RESCISSION.
    [Summit (8th) Circuit Court,
    October 12, 1912.]
    Marvin, Winch and Niman, JJ.
    Charles Mallison v. Daniel Duerr and Elizabeth Mahoney.
    Rescission of Sale of Land Under a Mistaken Impression as to the Boundaries.
    Where it appears that there was no meeting of the minds of the parties to a contract for the purchase of land, due to the fact that the purchaser thought the boundaries included certain land not in fact included but which the purchaser desired for a particular purpose, an abatement of the purchase price not furnishing adequate relief, a rescission of the contract will be granted.
    [Syllabus by the court.]
    Appeal.
    J. A. E. Myers and C. L. Einsmore, for plaintiff.

      Wilcox, Burch & Adams, for defendant.
   MARVIN, J.

Mallison purchased a tract of land from Duerr, directing that it should be deeded to a relative, Elizabeth Mahoney. At the time this agreement to purchase was made, Mallison and Duerr went upon the land. Duerr owned land in the township and village of Cuyahoga Falls, bounded on the north side by Front street, on the south side by the Cuyahoga river, and on the east side by the boundary line between Cuyahoga Falls and Stow ■townships.

This land was all originally in Stow township, but something like sixty years ago the township of Cuyahoga Falls was established, being made up from Stow and other townships. There ■was no visible mark to fix just where this boundary line was. Duerr and Mallison both understood that Duerr’s land was all in Cuyahoga Falls, but we think it plain, from the evidence, that both supposed the line to be considerably east of where it really was.

Duerr says he told Mallison he didn’t know which of two stones which he pointed out was on the line. As a matter of fact neither of these stones.was on the line; both were too far east.

Duerr shows by his testimony that he understood that Mallison was buying expressly that he might have a boat landing on the river front. He says 26 feet would be enough for a boat landing, and that he, Duerr, spoke of 26 feet as a sufficient boat landing.

A deed was made out by Duerr and delivered to Mrs. Ma-honey, making the east boundary the township line. As already said, this was considerably east of both the stones pointed out by Duerr, and reduces the river front to much less than 26 feet; in fact, it practically leaves no room for a boat landing.

There is a mistake, too, in the west line as it appears in the deed. This is agreed to by all parties, and if this were the only difficulty it would be easily corrected as a mutual mistake; but Duerr did not own the land which Mallison says he supposed he was getting. He did not own as far east as either of the stones pointed out, so that if Mallison is entitled to any relief here it can not be given him by a decree of specific performance.

We think it clear that ho is entitled to relief; there would remain but two means of giving the plaintiff proper relief, to wit a rescission of the contract or an abatement from the consideration. The latter would not be adequate and proper relief when we take into account the fact that the inducing cause operating upon the plaintiff to make the purchase was that he might have a suitable river front for a boat landing. Giving him the land only which the defendant could have given him, he fails to get this river front. The purpose for which he purchased the property failed, and he would not be made good by a recovery back of a proportionate share of the purchase money. In such ease we understand the plaintiff to be entitled to a rescission of the contract.

In the case of Stewart v. Gordon, 60 Ohio St. 170 [53 N. E. 797], it is said in the second paragraph of the syllabus:

“Where a grantor is mistaken as-to the size of a particular tract of land from which a given number of acres in rectangular form are to be taken, but the grantee is not, the fact that the grant so made includes a house both understood was not to be included, is ground for a rescission of the grant, but not for reformation of the deed. ’ ’

On pages 174 and 175 in the opinion in this ease, prepared by Judge Minshall, this language is used:

“The evidence in this case fails to disclose that it was a .mutual mistake. There was -a mistake in this, that the plaintiff and her husband both testified that the eleven acres were to be taken off of the east side of the southwest quarter of the southeast quarter of the section named, but so as not to include the house. The defendant, on the other hand, testifies that it was to be taken off of the north side, whether it included, the house or not. He was not certain at the time whether it included the house. Both parties agree that whether taken from the east or north side, it was to be in the form of a rectangle; there was no treaty for anything else. The court, however, found with the defendant, that it was to be from the north side and that both parties mutually understood that it was not to include the house, and permitted the petition to be amended so as to support a finding that the eléven acres were to be taken from the north side so as not to include the house.
“The plaintiff thought it was to be taken from the east side so as not to include the house and lot. The defendant understood that it was to be taken from the north side. As to this the court found with him, but found that he understood that it was not to include the house. And then finding that this could not be done so as to convey the requisite number of acres in the shape understood by both parties, decreed it to be taken from a side conforming to the understanding of one of the parties, and in a form different from the understanding of both. It is not competent for a court to determine the contract that should have been made and decree its performance. Parties must be left to make their own contracts. The most the court can do, in exercising the power of reformation, is to clearly ascertain what the contract- was and to correct such mutual errors as have intervened in carrying ifc into execution. The evidence in the ease would doubtless have warranted a rescission had suit been brought for that purpose.”

In the present case suit is brought for the rescission of this contract. It is a ca«e where the minds of the parties did not meet; it is a case which, as already pointed out, can not be corrected by decreeing a specific performance, even if the minds of the parties had met, because Duerr did not own the land which Mallison supposed he was getting, and, as has also been pointed out, an abatement from the purchase price would not do justice to the plaintiff.

"We reach the conclusion, therefore, that the plaintiff is entitled to have the contract rescinded.

The defendant Duerr having died during the progress of this action and his successors in title having been made parries, including also the executor arid his widow, the decree must be against them. We have examined the decree entered in the court of common pleas, and the same decree may be taken here.

Winch and Niman, JJ., concur.