author: NORRIS, J.

text:
    INSURANCE.
    [Geauga (7th) Court of Appeals,
    February Term, 1914.]
    Metcalfe, Norris and Pollock, JJ.

      Columbus Mut. Life Ins. Co. v. Mabel May Ford.
    1. Acceptance of Application and Premium Note, Medical Examination Satisfactory, Policy Issued to Agent for Delivery to Insured, Completed Contract.
    On June 23, 1910, upon the solicitation of the agent of the company, deceased made application for a policy of life insurance for $1,000 on the twenty payment life plan and paid the first premium to the satisfaction of the agent, who accepted the application and premium and agreed for the company that it would issue a policy for the amount stated and on the plan stated, if the medical examination of the applicant, to be made by the company’s medical examiner, should disclose that the applicant was in sound insurable condition of health. This examination was made on the fourth day thereafter and the result thereof reported to the company by its medical examiner. The company, finding the report satisfactory, issued a policy in conformance with the application and sent the same to its said agent to be delivered to the insured. The agent, finding the insured seriously ill with typhoid fever, refused to deliver the policy, and by direction of the president of the company returned the same to the company. The insured died four days after the receipt of the policy by the agent. Held: There was a completed contract between the parties for insurance and that the company was liable for the amount of the policy.
    2. Insured’s Being in Good Health at Acceptance of Application and Premium Note and Medical Examination, Failure to Give Notice of Changed Health to Other than Medical Examiner as Personal Physician not Avoidance of Policy.
    Upon the application made as above stated, and payment of premium by note to the agent, the medical examiner of the company made examination of the applicant on June 27, but through his own neglect did not forward to the company his report of such examination until July 7, following, the same being received by the company July 8, and the report being approved by the company, a policy was issued to the applicant, as provided for in his application, and mailed to the agent on July 14, to be delivered to the insured, but was not delivered owing to the then condition of the health of the insured. The insured was taken ill on the evening of July 7 and was visited by a physician, such physician being the medical examiner of the insurance company who had previously examined him for the company. On this visit the physician expressed the opinion that the insured was threatened with typhoid fever, of which disease he died July 19. The insured had no information that the report of the medical examination had not been forwarded to the company immediately following the making thereof, which should have reached its office by due course of the, mail the next day after the mailing of the same. Deceased said nothing to the physician, who was the medical examiner of the company, during the time he attended him in his last illness about making any report to the company of his illness nor did he otherwise notify the company of the same. Held: That all of the terms of the contract of insurance were agreed upon between the parties before the last illness of the insured, and the fact that the insured did not give any direct notice to the company otherwise than to its medical examiner of the changed condition of his health after the evening of July 7, did not avoid the policy and the company was liable thereon.
    3. Fraudulent Concealment of Change of Health of Insured to Avoid Insurance must be Specially Pleaded.
    Where an insurance company seeks to avoid the payment of a policy of life insurance by reason of the fraudulent concealment of the changed condition of the health of the insured after the making of the application, such defense to be made available must be pleaded and such fraudulent concealment properly alleged in its answer.
    [Syllabus by the court.]
    Error to common pleas court.

      J. M. Sheets and B. S. Paries, for plaintiff in error..
    J. Buchwalter, for defendant in error.

      Dismissed, 89 O. S. 000; 59 Bull. 205.

   NORRIS, J.

This is a proceeding in error to reverse the judgment of the court of common pleas of this county, in favor of the de-° fendant in error, on a policy of life insurance issued by plaintiff in error on the life of Moses Ford, husband of the defendant in error. The facts in the case as shown on the trial are substantially as follows:

On June 23, 1910, C. F. McFadden, agent of the insurance company, went into the harvest field of Moses Ford and solicited him to purchase an insurance policy on his life, whereupon the said Moses Ford made application in regular form for a policy for the sum of $1,000, twenty payment life, and agreed with the insurance company, through its said agent, to pay for such policy $10.02 quarterly the first year and $37.79 annually thereafter, and then gave his note to the said agent for $9.51, payable to the personal order of said C. F. McFadden, and did furnish him dinner and horse feed in payment of the balance of said first payment of said $0.52, all to be in full of the first payment of $10.02; that said agent in consideration of the premises agreed to insure said Moses Ford in the sum of $1,000 provided the medical examination of the physical condition of said Ford, to be thereafter made by the medical examiner of the company, should show that the said Moses Ford was in sound bodily health and an insurable risk under the rules of the company; that thereafter on June 27 following the said Moses Ford was examined by Dr. Heely, the medical examiner of the company, and the result of such examination reported to the company and the same was accepted and approved by the company and subsequently a policy of insurance was issued on the life of Moses Ford for the sum of $1,000, made payable in case of his death to the defendant in error; that owing to the delay of the medical examiner, Dr. Heely, either through his going away to celebrate the Fourth of July or for some other reason, he did not send his report of the medical examination tó the company until July 7 following, which fact does not appear to have been known to Moses Ford or the defendant in error.

The insurance company’s policy of insurance No. 1402 was executed to Moses Ford on July 14,1910, and sent to McFadden, agent of the company, who received it on July 15, 1910, and did not deliver it to Moses Ford but returned it to the company, upon the advice of the president, July 18, 1910. McFadden received the policy for the sole purpose of delivery, but did not deliver it for the reason that at the time he received it the said Moses Ford was ill with an acute malady, typhoid fever. The note given by Ford was returned to him the day of his decease, to wit: July 19, 1910. Proofs of death were made out in regular form. Moses Ford, it appears, was taken ill in the evening of July 7, which illness developed into what subsequently proved to be typhoid fever; that in the evening of July 7, he called in his family physician, who happened to be Dr. Heely, the medical examiner of the insurance company. Nothing was said about the insurance policy, and so far as the record shows, Moses Ford had no knowledge that the report of % his medical examination had not been promptly sent to the company on the day he was examined and a policy issued to him thereon. Mabel May Ford, the beneficiary named in the policy, brought suit on the policy in the court of common pleas of this county making the necessary averments to recover thereon.

The answer of the company, so far as the questions we shall discuss are concerned, was a general denial. The jury returned a verdict in favor of the defendant in error and judgment was entered thereon. The question as to whether or not there was a completed contract between the insurance company and Moses Ford was before this court once before, and this court held that there was such completed contract, and our judgment in the case was affirmed by the Supreme Court without report.

Counsel for the insurance company in argument to this court insisted that it was the duty of Moses Ford at the time he was taken sick, on the evening of July 7, and thereafter during his illness, to notify the insurance company of the fact of such illness and change in his physical condition, and that because he did not do so there was such fradudulent concealment on his part that avoided the policy.

In answer to this it might be urged first, that no such issue is made by the answer; that if the plaintiff in error intended to rely upon such facts as claimed in this case, it was its duty to set up same in its answer. Upon that question we think the case of Moody v. Insurance Co. 52 Ohio St. 12 [38 N. E. Rep. 1011; 26 L. R. A. 313; 49 Am. St. Rep. 699], is decisive and it is supported by the following authorities: Port Blakely Co. v. Insurance Co. 50 Wash. 657 [97 Pac. Rep. 781]; Taylor v. Modern Woodmen, 42 Wash. 304, [84 Pac. Rep. 867] and see authorities cited by counsel on page 306: Bliss, Code Pleading (3 ed.) Sec. 356A, Nash, Pleading 300, 382, 782; Kahnwiler v. Insurance Co. 67 Fed. Rep. 483 [14 C. C. A. 483].

But, was there any fraudulent concealment in this case, or, in other words, was it the duty of Moses Ford to notify the company after he was taken ill of the change in his physical condition? The rule relied upon by plaintiff in error is probably as well stated in Thompson v. Insurance Co. 13 N. Dak. 444 [101 N. W. Rep. 900], as anywhere, in the following words-:

“Where, pending negotiations for a contract of life insurance, a material change in the condition of the applicant’s health occurs, such as would influence the judgment of the insurer in.accepting or declining the risk, the applicant is under obligation to make disclosure of the fact.”

Numerous authorities are cited in support of that rule-Perhaps the leading one is Piedmont & A. L. Ins. Co. v. Ewing, 92 U. S. 377 [23 L. Ed. 610], the syllabus of which is-as follows :

“While negotiations were still pending between an agent of the company and the applicant, touching the precise terms of a contract of insurance, the amount of the premium and the mode of payment, a friend paid the premium, but concealed from the agent the condition of the applicant, who was then in extremis, and died in a few hours. The agent, in ignorance of the facts, delivered the policy. Held: That no valid contract arose from the transaction.”

But, Mr. Justice Miller on page 382, we think very clearly distinguishes that case from the one we have here in the following language:

“This case differs very widely from those cited in which, a delay in payment has been treated by the court as waived-All such cases proceed on the ground that a valid agreement as to the terms of the contract has been made. ’ ’

What part of the contract between Moses Ford and the insurance company still remained open? What, if any, negotiations between the parties were still pending and undisposed of as to the terms of the contract? The amount of the policy was agreed upon, the kind of policy was agreed upon, the amount of the premium was determined between the parties and was actually paid. The only question that remained open at the time the agent called upon Moses Ford in his harvest field was whether the condition of his health at that time was sufficiently sound to warrant the company in issuing to him a policy.

That question was disposed of within a few days by the. medical examination made by the medical examiner of the company, and lie was found to be in an insurable condition of health, so that when that examination was made the entire contract was concluded and closed and the minds of the parties met and. all that remained to, be done was for the insurance company to issue the policy, which it did. This, we think, is settled in the case of Mutual Benefit Ins. Co. v. Higginbotham, 95 U. S. 380 [24 L. Ed. 499], where the following principle is announced:

“Held, that the representations of the insured as to the condition of his health on the 1st of October, when he applied for the reinstatement of his policy, and paid the premium, were • mot continuous until the 14th of that month, and that the contract was consummated on the day when the premium was paid.”

See also DeCamp v. Insurance Co. 3 Ins. Law J. 89 [7 Fed. Cas. 313], and in Southern Life Ins. Co. v. Kempton, 56 Ga. 339, we find a leading case on this subject. In the syllabus in the case it is said, referring to a case similar to the one we have:

“In such a case as this, the principle that any change in the health of the applicant between the time of the application and of the issuing of the policy, would relieve the insurance company from consummating the contract, does not apply; the delivery of the agent, under the facts, was a consummation of the policy, and that, with the other facts proven, show a consummation of the contract. ’ ’

In Keim v. Insurance Co. 42 Mo. 33 [97 Am. Dec. 291], it is said:

“It is laid down by Angelí that when the negotiation for insurance is so far completed that nothing remains to be done but to deliver the policy corresponding with the terms and date of application, should a loss occur before the execution of the policy, a court of equity would relieve the assured.” 1 Duer, Insurance p. 66, Sec'. Id.

In Baldwin v. Insurance Co. 56 Mo. 151 [17 Am. Rep. 671], we find the following:

“In May, Insurance Sec. 44, it is said, that the agreement for insurance is complete when the terms thereof have been agreed upon between the parties, and the reciprocal rights and obligations of the insurer and the insured, date from that moment, without reference to the execution and delivery of the policy, unless these two elements are embraced within the terms agreed upon. ’ ’
“Where, after oral contract of insurance, the premium is. accepted and the policy delivered, it relates back to the making-of the oral contract, and the assured is not bound at the time of paying the premium and receiving the policy to voluntarily inform the insurer of the destruction of the property.” Worth v. Insurance Co. 64 Mo. App. 583.

We also cite Gordon v. Casualty Co. 54 S. W. Rep. 98 (Tenn.); Leichman v. Insurance Co. 44 L. J. C. P. 185, 32 L. T. 170, 23 W. R. 723, an English case. See also Flint v. Insurance Co. 8 Ohio 501.

We find none of the eases cited by counsel for plaintiff in. error that conflict with the rule we have attempted to discuss. In Cable v. Insurance Co. 111 Fed. Rep. 19 [49 C. C. A. 216] the policy had a clause that it should take effect only upon payment of the first premium and “delivery of policy during my life time in sound health and insurable condition.” Cable had. previously declined to accept the policy. In Mutual Life Ins. Co. v. Pearson, 114 Fed. Rep. 395, it was provided in the policy that the insurance shall not take effect “until the first premium, shall have been paid during my continuance in good health.”' Pearson was taken sick January 6. January 7 the first premium was paid, the company not knowing of his illness, and on January 8 he died. The question is on demurrer, on equity jurisdiction of the court to cancel policy.

In Thompson v. Insurance Co. supra, the condition of the-policy was that ‘ ‘ This policy shall not take effect until the first premium is actually paid by the insured in good health.” It; is not claimed in this ease that the assured was not in good, health at the time he signed the application or at the time he was. examined by the medical examiner of the company. It is not claimed that there were any misrepresentations made by him at any time. In the light of the authorities above cited, we do not. think there was any fraudulent concealment on the part of Moses Ford. The headquarters of the company were in Columbus, Ohio. The time it would take to reach Columbus by the; usual course of mail is less than twenty-four hours. Ford was examined on June 27. If the result of his examination had been reported to the company on the day it was made, it should have reached the company on June 28. This is shown by the fact that Dr. Heely’s report was mailed July 7 and reached the office of the company July 8. Assuming if Dr. Heely had, forwarded the application when he should have done so, on June 27, it should have reached the company’s office on June 28, and the policy should and would have been issued and in the hands of Ford long prior to July 7, when, it is said, he was taken ill. As we have stated, he knew nothing of this delay. He had a right to assume that the policy had been issued and -was in the hands of the agent for delivery to him. The premium had been paid and accepted and everything required of the .assured had been done. To say that when he was taken ill on -July 7 long after the application for insurance and the medical •examination had been made, it was then his duty to make additional disclosures to the company as to the condition of his health, we think is not supported by any authorities cited by •counsel for plaintiff in error, but is opposed to all the author}dies we have been able to find.

See on this question Hartford Protection Ins. Co. v. Harmer, 2 Ohio St. 452, 472, 473, opinion of Judge Ranney.

Again, the medical examiner was appointed by the company to ascertain and report the physical condition of the applicant, Moses Ford. He was the only representative of the company in that regard known to the deceased, so far as the record shows. "Whatever disclosures as to the condition of his '¡health required to have been made by him should have been made to the medical examiner. This is manifestly true at the ■time of the examination. On July 7 the medical examiner sent his report of the examination of Ford to the company. On the same day he visited Ford and found him threatened with typhoid fever and was thereafter his attending physician until ¡his death. It does not appear whether the deceased said anything to the doctor about his insurance policy, or of his making any additional report to the company in regard to his sickness, 'shut what need therefor? The doctor was the medical examiner of the company, and the direct representative of the company to ascertain and report the physical condition of Ford and he knew better than Ford did the prognosis of his disease. Being the agent of the company to report as to the health of applicants for insurance in the company, and especially as to Ford’s health, we think his knowledge of Ford’s illness must be imputed to the company; that the company must be held to know what their agent knew and failed to report.

The judgment of the court of common pleas will be affirmed.

Metcalfe and Pollock, JJ., concur.


source: Caselaw Access Project

author: HENRY, J.

license: Public Domain

text:
    CRIMINAL LAW — PARENT AND CHILD.
    [Medina (8th) Circuit Court,
    September 26, 1910.]
    Marvin, Winch and Henry, JJ.
    Charles Moore v. State of Ohio.
    1. Want of Knowledge by Father as to Needs of His Minor Children no Defense to Prosecution for Neglecting Them.
    A father is charged with the duty of knowing the needs of lrs minor children, seeing that provision as to their home, care, food or clothing, when required, is made; and if he is able, to make or cause such prpvision to he made. It is no defense to a prosecution under Sec. 13008 G. C. for neglecting his minor children that the father did not have notice from the mother or person having their custody that they required his assistance.
    2. Conviction Reversed for Misconduct of Counsel, Though Jury Cautioned, if Guilt not Established Beyond Reasonable Doubt.
    A judgment of conviction in a criminal case will he reversed for misconduct of counsel, though the jury he cautioned with respect thereto, if on the whole record it is not clear that the defendant was guilty heyond a reasonable douht.

      William, Gordon and C. N. Bussell, for plaintiff in error.

      N. B. McClure and C. B. Curtiss, for defendant in error.
   HENRY, J.

At the April, 1910, term of the Medina county common pleas court Charles Moore was cmvicted of neglecting and refusing to provide his minor children, 12 and 6 years of age; with necessary clothing, food and proper home, between May 1, 1908, and April 4, 1910. Motion for new trial was overruled and he was sentenced to be imprisoned in the county jail of Medina county at hard labor for the term of six months, and to pay the costs'of his prosecution. He afterwards entered into a bond to the state of Ohio in the sum of $500 in accordance with the statute, to pay or cause to be paid to Zaidee Rasor, the mother of said child (who was appointed by the court, a trustee for that purpose), the sum of $1.25 per week for each of said children, until it shall become sixteen years of age.

To this judgment error is prosecuted upon the grounds of misconduct of counsel in argument to the jury; misdirection of the jury by the court, and the refusal of divers requests to charge.

The evidence discloses that the parents of these children were divorced by decree of the court of common pleas of Portage county at its January term, 1907, upon the petition of the wife and upon the ground of habitual drunkenness of the husband. This decree, which was put. in evidence, confided the custody, care, education and control of said children to their mother, and enjoined the father “'from interfering in any manner with either of said children or with plaintiff in the custody, care, education and nurture oE them, until further order of this court. ’ ’

The mother thereafter removed to . Medina county where she supported herself and the said children until her marriage to one Rasor, and since that time she and the said Rasor have supported them.

December 28, 1909, the mother of the children, through her attorney, wrote' the defendant below as follows:

“There are two children oE yours in this town residing with their mother who is divorced from you. You have done nothing as to the support and maintenance of these children for years. It is true that an allowance of alimony was given your former wife, but no provision was made in decree of divorce as to support of children, and you are accordingly still bound to support them. You are requested to do so. There is a criminal statute as to nonsupport of which you may be aware. However, we desire that you do what is lawful and proper without resort to extreme measures. You should make reasonable payment for board and clothing for your children. You are requested to take the matter up with me further. ’ ’

Meanwhile the defendant below, Charles Moore, has also-remarried and has removed from Portage to Summit county, where he was arrested and brought to Medina county for trial..

"We find upon consideration of the record and of the precedents that the decision of our Supreme Court in State v. Banner, 81 Ohio St. 393 [90 N. E. Rep. 1007; 26 L. R. A. (N. S.) 1093], fully answers the intimation from the bench on the-hearing that the next to the last clause of Sec. 10, Art. I of theConst., providing that an accused person shall have “a speedy public trial by an impartial jury of the county or district in. which the offense is alleged to have been committed” might preclude the trial for this offense in Medina county of one who had not at any time been in that county and whose children were brought there without his procurement.

The syllabus in State v. Sanner, supra, is as follows:

“As to some crimes, the physical presence of the accused, at the place where the crime is committed, is not essential to-his guilt.
“A parent may be guilty of the crime of failing to provide-for his minor children, defined by the act entitled an act to compel parents to maintain their children, passed April 28,. 1908 (99 O. L. 228), although he is a resident of another state during the time laid in the indictment and the venue of the-crime is in the county where the child is when the complaint, is made.”

It is also established in this state that:

“The obligation of the father to provide reasonably for the support of his minor child, until the latter is in a condition to provide for his own support, is not impaired by a decree which divorces the wife a vinculo on account of the husband's, misconduct, gives to her the custody, care and nurture of the child and allows her a sum of money as alimony, but with no provision for the child’s support. The mother may recover a reasonable compensation from the father, for necessaries furnished by her to the child after such decree, and may maintain arj. original action for such compensation against the father, in a court other than that in which the divorce was granted.” Pretzinger v. Pretzinger, 45 Ohio St. 452 [15 N. E. Rep. 471; 4 Am. St. Rep. 542].

Nor is it a defense to a prosecution, under the act here invoked, that an agreement of separation was entered into by the accused and his wife, by which the latter, who was given the custody of their minor children, agreed, for a valuable consideration, to furnish them with proper support, and that after the mother became unable to support the children, the accused offered to support them, if she would surrender their custody to him, which she refused to do, Bowen v. State, 56 Ohio St. 235 [46 N. E. Rep. 708], In the per curiam opinion at page 239 it is pointed-out, that the duty which a father “owes the public of saving it from the expense of supporting his children, is personal and continuing, and can not be affected by any agreement he may make with another. He must answer to the state for his omission of that duty, and look to the other contracting party for any breach of the contract.”

So in State v. Stouffer, 65 Ohio St. 47 [60 N. E. Rep. 985], it is held:

“The father is not absolved from his obligation to support his minor child under sixteen years of age, because his divorced wife, having its custody, has provided it with sufficient support; and his refusal or neglect, after demand, to furnish the child with proper support, he being able to do so, renders him amenable to the prolusions of Sec. 3140-2 R. S.”

In State v. Teal, 77 Ohio St. 77 [83 N. E. Rep. 304], it is held that:

“In the prosecution under Sec. 3140-2, R. S., against a father for failure to support his child, he being able to do so, it is not necessary for the state to prove that a demand was made upon the father for the performance of the duty enjoined by the statute.”

Not all of these cases are entirely in point here, but they serve to indicate the principles which our Supreme Court has applied in construing this salutary act.

It is evident that the requests of defendants below, numbered 1 and 2, for a verdict of not guilty, upon the ground that the duty of maintaining the children had been cast upon the mother by the decree of divorce, were properly refused. The same is true of the third request, based upon the absence of evidence showing that the children had been actually neglected. ■ The fourth request proceeds upon a theory directly contrary to that announced in State v. Teal, supra, and was, therefore, properly refused.

The fifth request is as follows:

“You are instructed that by the decree of the court of common pleas of Portage county, the defendant is enjoined from interfering with the care, custody and nurture of said children by their mother and that he would be liable to punishment for contempt of court if he disregarded or disobeyed .the terms of said decree.”

It will be observed that this request is not addressed to the issue of guilt or innocence to which the jury in the court below were confined. It is unnecessary for us to consider whether the request is abstractly correct or not, for it could not have aided the jury had it been given.

The sixth request is as follows:

“Before you can find the defendant guilty in this case, you must find from the evidence, beyond a reasonable doubt, that the defendant, Charles Moore, was able by reason of his having means, or of his ability to work and earn money, to provide said children with proper home, care, food or clothing, and that he has knowingly and wilfully refused or neglected so to do, after knowledge or notice to him, from the mother or person having the custody of said children, to do so.”

We think the defendant is bound at his peril to know when his children need further provision for their home, care, food or clothing, and to see that such provision, when needed, is. made.

In the course of the. argument to the jury by Mr. Curtiss, on behalf of the state, several improper observations were-made, culminating in this statement, wholly unwarranted by the evidence:

“The defendant had not contributed one cent .to the support of the children before the divorce was granted. ’ ’

To this the defendant below objected and the court by way of admonition to counsel said:

“I would disregard all reference as to what had preceded', the divorce. On your side of the case, I will say this, that you need to go no farther into that, any more than on the other side- they should go into the grounds. ’ ’

There was clearly misconduct of counsel in the statements above quoted, and in other statements disclosed by the record, and the rulings of the court thereon are not such as to correct, the'prejudice, if any there was, resulting therefrom.

, We have thoroughly canvassed the suggestion that the defendant’s guilt being apparent from the whole record, he cannot be deemed to have been prejudiced by counsel’s miscon'duct. We are not prepared to acquiesce in this view. The children’s stepfather testifies that he furnished them with food between the serving of the notice upon the accused to provide for their support and the time of the latter’s indictment and trial some three or four months thereafter, and that he has1 no bill against the accused therefor. It does not anywhere appear that the children were during that interval in need of, or that they received from any source, any clothing. As regards, home and care,, it was obviously impossible, in the nature of things, for the husband to afford either to his children who had been confided to the custody 'of the former wife. While we are-not prepared as a matter of law to say that the injunction forbidding him to interfere with the “custody, care, education and nurture of the children” absolved him from- criminal liability for failure to provide them with proper “home, care, food and clothing,” it is by no means clear upon all the facts in the ease, that the defendant below was guilty of a violation of the statute.

Moreover, there is some evidence tending to show that the defendant was not physically and pecuniarily able to maintain his children; and while this evidence is far from conclusive, it, too, prevents us from saying, as a matter of law, that he is guilty beyond a reasonable doubt, and therefore not prej-' u diced by counsel’s misconduct.

For the reason noted, to wit, the misconduct of counsel for the state in argument to the jury, the judgment of the court ■of common pleas is reversed and the cause remapded.

We feel disposed, in this connection, to add that the final .arrangement in which the trial belowr resulted undoubtedly provides for the performance by the defendant below of his natural and legal duty to his children, as in the end he will have to perform it, no matter how this litigation may terminate.

Marvin and. Winch, JJ., concur.


author: RICHARDS, J.

text:
    MUNICIPAL CORPORATIONS — OFFICE AND OFFICERS.
    [Huron (6th) Court of Appeals,
    June 8, 1914.]
    Kinkade, Richards and Chittenden, JJ.
    State ex rel. Charles McCray v. C. H. Burk, et al.
    1. Confirmation by Village Council Prerequisite to Complete Mayor’s Appointment of Street Commissioner to Fill Vacancy as for Full Term.
    An appointment of street commissioner to fill a vacancy requires confirmation by the village council the same as an appointment for the full term as prescribed by Sec. 4363 G. C.
    .2. Appointment of Street Commissioner On or Before First Monday in February Limited to Full Year’s Term and Temporary Appointment Unauthorized.
    An appointment of street commissioner of a village on or before the first Monday in February is limited by Sec. 4251 G. C. to an appointment for a full term of a year which under Sec. 436á G. C. requires confirmation of the council; Hence, a “temporary appointment” of one whom council refuse to confirm as street commissioner to “prevent a stoppage of public business” as prescribed by Sec. 4488 G. C., which applies only to civil service employes, is unauthorized and invalid.
    XSyllabus approved by the court.]
    Appeal from common pleas court.

      Wickham <& Martin, for plaintiff.

      Craig & Primer and W. J. Tossell, for defendants.
   RICHARDS, J.

The action is one in mandamus to compel the'defendants, members of the council of the village of New London and the clerk of said village, to authorize and direct the drawing of a warrant, and to draw such warrant, on the treasurer of the village to pay the relator the salary claimed to be due him as street commissioner. The controversy turns on whether the relator was the street commissioner during the month of February, 1914, for which period he demands that an order be allowed and drawn to cover his compensation. In the court of common pleas the petition of the relator was dismissed.

It appears from the pleadings and evidence that one E. H. Hood was the street commissioner of the village, appointed by the mayor and confirmed by the council, for the year 1913 j that at the expiration of his year in the office, .and without waiting for any successor to take his place, he abandoned the duties of his office, in effect leaving a vacancy. On January 1, 1914, the mayor appointed A. B. Davis as street commissioner for one month and that appointment was confirmed by the village council, but Davis failed to give any bond to secure the performance of his duties as such street commissioner, until February 5, 1914, although he in fact assumed to- perform the duties of the office. On January 12, 1914, the mayor appointed George Beis .street commissioner, which appointment the council declined to confirm. On February 2, 1914, the mayor appointed the relator, Charles McCray, as street commissioner, and the council declined 'to confirm his appointment. Thereupon the mayor submitted a written communication reading as follows:

“The council having failed without just cause to confirm my appointments for the office of street commissioner and no complaint having been offered as to the ability and efficiency of the appointees in question, I hereby appoint Charles McCray temporary street commissioner to prevent the stoppage of public business. Said appointment to terminate when the contingency has passed. (Signed) W. I. Bracy, Mayor.”

Mr. McCray executed a bond, with sureties, on February 6, 1914, to secure the performance of his duties as street commissioner, conditioned as follows:

“Now if the said Charles McCray as such street commissioner (emergency) aforesaid shall faithfully' perform the duties of his said office until the contingency caused by the failure of council of said village to confirm said appointment by mayor is removed, then the above obligation to be void. ’ ’

The controversy between the mayor and the village council arises from the construction to be placed on Sec. 4363 G. C. and other statutes in pari materia. The section above cited reads as follows:

“The street commissioner shall be appointed by the mayor and confirmed by council for a- term of one year, and shall serve until his successor is appointed and qualified. He shall be an elector of the corporation. Vacancies in the office of street commissioner shall be filled by the mayor for the unexpired term. In any village the marshal shall be eligible to appointment as street commissioner.”

Counsel on behalf of the relator contend that by the plain reading of the statute the appointment of a street commissioner to fill a vacancy does not require the confirmation of the council, and it is contended by counsel for the defendants that all appointments for street commissioner are incomplete until the same have been confirmed by the village council.

The record discloses that the street commissioner for 1913, Mr. Hood, in effect abandoned the office and thereby created a vacancy which should have been filled by appointment, the appointee to hold for the unexpired term and until his successor should be appointed and qualify. The mayor undertook to fill that vacancy by naming A. B. Davis, but this appointee failed, to qualify until February 5, 1914, on which date he executed a bond in accordance with statute. He did, however, in effect, hold the office during the month of January and was at least the de facto street commissioner. By virtue of the provisions of Sec. 4251 G. C., it was the duty of the mayor to appoint a street commissioner between the second Monday in January and the first Monday in February,- for the full term of one year. He attempted to perform that duty by naming the relator as street commissioner on February 2, 1914, and, on the council refusing to confirm the appointment, he then sought to name the same man as street commissioner for a temporary period. The mayor assumed that Sec. 4488 G. O. authorized a temporary appointment, but that section applies only to appointments in the civil service. The only appointment which could have been made at that date would have been an appointment for the full term of one year, and such an appointment would, by the plain language of Sec. 4363 G. C., have required confirmation by the council.

The circuit court of the sixth circuit, sitting in Fulton county, in the case of State v. Darby, 4 Circ. Dec. 124 (12 R. 235), held that the misapprehension of the true tenure of the appointee, on the part of the mayor or others, could not abridge the term of his continuance in office. It would follow that any attempted limitation in the terms of the appointment would be ineffective and that the appointee, if he became street commissioner by virtue of the appointment of February 2, 1914, would hold for the period of one year and until his successor should be appointed and qualify.

We do not, however, rest the decision of this case on that proposition alone, but construe Sec. 4363 G. C., when read in connection with other parallel statutes, to require a confirmation by the village council of all appointments to the office of street commissioner, whether for a full term or a vacancy, in order to perfect the title of the appointee. It is doubtless true that a literal reading of the language of the section does.not require such confirmation. Neither does it provide for the omission of such confirmation in filling a vacancy in the office. The statute in question provides that an appointment for the full term shall be confirmed by the council, and all that the remaining portion of the section provides for is that in ease of a vacancy appointment, the appointee shall hold for the unexpired term. The section does say that the vacancy shall be filled by the mayor, but it does not say how it shall be filled, and the fair inference is that it shall be filled in the same manner as the office was filled for the full term, namely, appointment by the mayor and confirmation by the council.

To so construe this section as to allow the mayor to fill a vacancy in the office of street commissioner without the concurrence of the village council, would result in an anomaly in the statutes. By other sections of the statutes the street commissioner is under the direct control of the village council and that body has the power to determine whether he shall have assistants and this is true whether the official be an appointee for the’ full term or to fill a vacancy.

An examination of the statutes shows a general legislative purpose to provide in cases where offices are to be filled by an appointment by one official and confirmation by another body, that vacancies occurring in such offices shall be filled in the same manner. An ’illustration may be found in the same ohapter of the statutes now under consideration, where it is provided in Sec. 4359 G-. C. that vacancies in the board of trustees of public affairs shall be filled by the mayor for the unexpired term, subject to confirmation by the council. Another illustration may be found as to state offices in Sec. 12 G. C., in which it is provided that vacancy appointments made by the governor are to be subject to the advice and consent of the senate. Numerous other illustrations may be found in the statutes but these two will suffice.

It is allowable in case of ambiguity in a statute to examine the history of legislation on the subject and to consider the results which would follow a literal interpretation of the language used. See Slingluff v. Weaver, 66 Ohio St. 621 [64 N. E. Rep. 574].

If a vacancy appointment to the office of street commissioner required no confirmation by the council, then an unscrupulous mayor could easily keep one of his creatures in office despite the opposition of the council. Su'ch an appointee would hold under the statutes, until his successor should be appointed and qualify, and by refusing to make any other appointment, such appointee would continue in office indefinitely. We do not mean by this to criticize the action of any' official m the present case or any person named as an appointee, for it does not appear from the record that any of them have been ‘actuated by improper motives. What has been said was merely to illustrate the dangers that might arise if the construction contended for should be adopted.

It is not to be presumed from the language of Sec. 4363 G. C. that the general assembly intended such a situation to arise. The section should rather be interpreted in the spirit suggested by Williams, C. J., speaking for the court, in the case of Cincinnati v. Connor, 55 Ohio St. 82, 89 [44 N. E. Rep. 582], in which that eminent jurist uses this language:

“It is an equally well established rule; that the provisions of a statute are to be construed in connection with all laws in pari materia, and especially with reference to the system of legislation of which they form a part, and so that all the provisions may, if possible, have operation according to their plain import. It is to be presumed that a code of statutes relating to one subject, was governed by one spirit and policy, and intended to be consistent and harmonious, in its several parts. And where, in a code or system of laws relating to a particular subject, a general policy is plainly declared, special provisions should, when possible, be given a construction which will bring them in harmony with that policy. And it is only when, after applying these rules in the endeavor to harmonize the general and particular provisions of a statute, the repugnancy of the latter to the former is clearly manifest, that the intention of the legislature as declared in the general language of the statute is superseded.’’

The statute in question in the case at bar is fairly within the terms of the language of the Supreme Court in Doyle v. Doyle, 50 Ohio St. 330 [34 N. E. Rep. 166], where the Supreme Court say that what is plainly implied in the language of a statute is as much a part of it as that which is expressed.

We hold that the appointment of a street commissioner to .fill a vacancy requires confirmation by the village council the same as an appointment for a full term.

The petition of the relator will be dismissed.

Kinkade and Chittenden, JJ., concur.


text:
    EXECUTION — INJUNCTION.
    [Lucas (6th) Court of Appeals,
    June 2, 1913.]
    Kinkade', Richards and Chittenden, JJ.
    Alfred H. Wittstein v. Wellington T. Huntsman, Clerk.
    Injunction Will not Lie to Prevent Clerk’s Issuing Execution, in Absence of Fraud or Conspiracy.
    Injunction against the clerk of the court of common pleas to prevent him from issuing an execution to the sheriff of the same county, will not lie, in the absence of fraud, conspiracy or circumstances showing unfair advantage in issuing such, execution, the remedy at law by application to the court from, which the execution issued, to have it set aside, being ample-[Syllabus by the court.]
    Error to common pleas court.

      Galkins & Storey, for plaintiff in error.

      Charles M. Milroy, Pros. Atty., and Lewis E. Mallow, for defendant in error.
   RICHARDS, J.

In the common pleas court Wittstein brought an action against the clerk of that court to enjoin the issuing of an execution whieh he averred the clerk was about to issue for the purpose of collecting certain costs. The amended petition was met by a demurrer filed by Mr. Huntsman, which demurrer was sustained by the common pleas court and the plaintiff not desiring to plead further, a final judgment was entered dismissing his petition, from whieh judgment he prosecutes error in this court.

It appears from the averments of the amended petition that Wittstein was the owner of an interest in certain real estate in the city of Toledo, which property was involved in litigation relative to the collection of an assessment for the construction ■¡of a sidewalk and that in said litigation certain costs were taxed against him and in favor of the sheriff, witnesses and notary public, but that no personal judgment for costs was rendered. 'The final judgment was rendered in that action on April 20, 1887, by the circuit court of this county, the case having been taken to said court by appeal. It is averred, and of course admitted by the demurrer, that no execution was ever issued in ;said case. The plaintiff contends that by reason of the lapse of .nearly thirty years without any proceedings being taken to'collect costs due to the sheriff, witnesses and notary public, that no right to issue execution'exists, and he asks that the clerk of courts be enjoined from taking such threatened action.

The case has been presented to us solely for the purpose of ■determining the power of the clerk of courts to issue such execution, no .question being made as to the propriety of the remedy by injunction. We regret that the view we take of the case renders it not only unnecessary but unwise to undertake to determine the question sought to be made, for such a determination would be mere obiter dictum. We are clearly of the opinion that injunction is not the proper remedy. The execution which .it is said is about to be issued is upon a judgment or order entered in this county and against a party resident in this county, the execution to be directed, of course, to the sheriff of this ■ county. Under such circumstances it is manifest that if an ■execution should issue, it would be entirely under the control ■ of the courts of this county and plaintiff would have a remedy ■ which would be entirely adequate in law by motion to direct the ¡••clerk to recall the execution. The amended petition in this case, ¡•of course, alleges that plaintiff has no adequate remedy at law ■but the allegation is a mere conclusion and must be taken in the light of the well known principle that the officers of the court .may be controlled by the court by motion on proper application made. If the amended petition contained appropriate averments of fraud or conspiracy or made a showing of an execution to be issued to a foreign county, a different question might be presented.

We call attention to the case of Miller v. Longacre, 26 Ohio St. 291. In that case an execution had been issued to the sheriff of Union county from the common pleas court of Marion county,, and even under those circumstances it was suggested that the more appropriate remedy would have been to apply to the court, from which the execution issued to have the same set aside. The-Supreme Court speaking through Judge White, held that the-objection that there was an adequate remedy at law came too-late and for that reason,' as well as for the reason that it issued.' from a foreign county, the remedy by injunction was sustained.. The case to which attention has just been called has been cited, with approval in Darst v. Phillips, 41 Ohio St. 514, 518, and it is. there said that in many cases the nature of the relief required and the necessity of additional parties may be such that an. original action by injunction is indispensable. The circuit, court in Cuyahoga county in the ease of Krinke v. Parish, 6 Circ. Dec. 30 (9 R. 141), sustained an injunction in a proceeding somewhat similar to the ease now at bar, but it appeared in that case that the petition for the injunction to stay a sale on execution was filed only three days before the sale was to take place, for which reason the remedy by motion to set aside the execution would have been inadequate. As a matter of fact the case was. not in reality heard until a considerable period of time after the date at which the sale was advertised to take place, and under such circumstances it is clear that the remedy by motion would, have been no remedy at all, and that therefore injunction was. properly held to be the remedy to which plaintiff was entitled. The general principle, is entirely in accord with the rule as indicated that under ordinary circumstances injunction is not the-appropriate remedy. See 1 Black, Judgments Secs. 361 and 362.

The only defendant in this action is the clerk of courts off this county. The issuance of the execution would be for the.benefit of other persons who are claimed to be entitled to the; costs. We think it improper practice to bring an action in injunction against an officer of the court under such circumstances. If an injunction would lie the proper parties defendant would not be an officer of the court but the persons at whose-i instance the execution is about to issue. This court will not,,, under such circumstances, entertain an injunction against one; of its officials. If the parties interested in obtaining such an execution should be enjoined that injunction would operate upon such parties and through them upon all the officers of the court set in motion by such parties.

We call attention to the following cases: Olin v. Hungerford, 10 Ohio 268; Allen v. Medell, 14 Ohio 445; Howard v. Levering, 4 Circ. Dec. 236 (8 R. 614).

It is well said in 2 High, Injunctions Sec. 1551, that it is not proper to join as defendants in such action merely ministerial officers of the court such as the clerk' who issues the process •or the sheriff who serves it, they having no interest in the subject-matter in controversy.

For the reasons given we think the court of common pleas •committed no error in sustaining the demurrer to the amended petition and in dismissing that petition. The judgment of the court of common pleas will be affirmed.

Kinkade and Chittenden, JJ., concur.


author: POLLOCK, J.

text:
    VENDOR AND PURCHASER.
    [Mahoning (7th) Court of Appeals,
    March 10, 1914.]
    Metcalfe, Norris and Pollock, JJ.
    A. M. Carr, et al. v. John S. Miller.
    Purchaser Untrue Representations Made, May Recoup Damages Sustained Thereby.
    When the seller has made representations which were untrue, materially affecting the value of the property sold, for the purpose of inducing the sale, and the purchaser relying thereon made the purchase; in an action to recover the purchase price of the property sold, the purchaser can recoup the damages that he has sustained by reason of such representations, and it is immaterial that they were innocently made.
    [Syllabus by the court.]
    Error to common pleas court.

      Hine, Kennedy & Manchester, for plaintiffs in error.

      M. C. McNab. for defendant in error.
   POLLOCK, J.

The defendant in error, «. S. Miller, brought an action in the court of common pleas of this county against the plaintiffs in error to recover on a promissory note in the sum of $210.

The defendants below answered alleging that $170 of the consideration for this note was the purchase price of a bull which defendants below had purchased from plaintiff below. They allege that they were induced to purchase this animal by the fraudulent representations of plaintiff below, and further that the plaintiff below through his agent, S. B. Parshall, warranted this animal to be sound and all right.

They further allege that the representations made by plaintiff below were not true. That at the time of the sale of said animal it then had tuberculosis, which was discovered shortly after the purchase, and that defendants below were required to slaughter said animal. That plaintiff below was notified of its condition, the animal tendered back, and a demand made that said note be surrendered, which was refused.

The defendants below ask damages in the amount of the purchase price named in this note,, and also damages for the care and keep of this animal in the sum of $20.

To this answer the plaintiff below replied, admitting that the amount of the consideration in this note claimed was for the purchase price of this animal, and that afterwards the animal was slaughtered by the defendants below, and deny the other allegations of the answer, and also deny any wrongdoing or any liability on the part of the plaintiff below.

The ease went to trial on the issues raised between the answer and the reply, resulting in a verdict in favor of plaintiff below. This action is prosecuted to reverse that judgment for errors which it is claimed occurred on the trial of the case.

It appears from the testimony that Miller was the owner of a herd of Jersey cattle; that on November 9, 1911, he offered these cattle for sale at public auction, and that defendants below purchased at this sale the bull mentioned in the pleadings, paying therefor the sum of $170, and also purchasing another animal; and the note sued on was given for the purchase price of these two animals.

On October 30 and 31, prior to this sale, Miller, the plaintiff below, caused this herd of cattle to be tested for tuberculosis by S. B. Parshall, a veterinary surgeon. This was done by Miller to induce prospective purchasers to pay a better price for the cattle; he knowing that cattle of this kind will not readily sell unless such a test has been made and the cattle found free from this disease, or the purchaser is given the right after purchase to make the test.

On the morning of the sale, and just before it was opened, Mr. Parshall, under the direction of Mr. Miller, made the announcement that all the cattle had been tested for tuberculosis; that they showed no reaction, and he exhibited the testing sheet, announcing that anyone could examine it who wished, and handed it to Mr. Dempsey, the auctioneer.

It is unnecessary to explain what this testing consisted of, or what is meant by “reaction,” further than to say that persons engaged in the cattle business would understand that if the test showed no reaction the animal was free from tuberculosis, but that if it showed reaction it was afflicted with that disease.

This test which Mr. Parshall had made for tuberculosis is regarded by the authorities on that subject as the most accurate test for determining whether cattle are afflicted with tuberculosis, which is known to persons engaged in the cattle business.

Mr. Miller, the seller, and Carr and Campbell, the purchasers, were experienced'cattle men and understood that the announcement that the cattle showed no reaction meant that they were free from tuberculosis. Defendants below testified that they would not have purchased this animal except for the representations made by Mr. Parshall, and that relying on these representations they believed the animal to be free from the disease of tuberculosis.

Some times after the sale this animal was removed to the barn of the defendants below, and on January 19, 1912, was again tested by Dr. Frederick, a state official, for tuberculosis, and found to be very badly afflicted with that disease. Defendants below were ordered to quarantine the animal, which they did, and they also notified Mr. Miller of the condition, offering to return the animal. This was declined by Mr. Miller, and some time in March the animal was slaughtered by Dr. Frederick.

The first error complained of is the court’s refusing to permit the defendants to amend their answer by making the warranty extend to an announcement made by the auctioneer.

After the introduction of the plaintiff’s testimony the defendants called Judge J. B. Kennedy and asked the following question

“Following the statement made by Mr. Parshall, what, if any, statement was made by Mr. Perry as to the test of these cattle for tnberculosis ? ’ ’

This question was objected to and the objection sustained by the court, and then the defendants below asked leave to amend the answer by interlineation, by inserting the name of Mr. Perry, the auctioneer, in addition to Mr. Parshall, as the agent of plaintiff in warranting the cattle; this was refused by the court and excepted to by the defendants. The record shows that the defendants expected the witness to answer as follows:

“Now, gentlemen, I am going to sell you these cattle. These cattle have been tuberculin-tested by Mr. Parshall, and when you buy them you get a clean bill of health. ’ ’

We are unable to see why this question was not competent under the allegations of the answer. It would have proven further representations made by the plaintiff below in order to induce purchasers to bid upon these cattle, and should have been admitted without any amendment to the petition; but the defendants below did not except to this ruling, but they only asked leave to amend the answer and excepted to the refusal to permit the amendment. This is discretionary with the court, and we do not think the court violated any discretion in refusing to permit the amendment.

The next error complained of is that the court erred in charging in plaintiff’s sixth and seventh requests before argument, and further charging after argument, that in order to constitute fraud, which would be a defense in this case, the defendants must show that the seller knew the representations to be untrue, or had no reasonable grounds for believing them to be true.

The rule given by the court in these two requests, and in. the charge, is the rule applicable in an action to recover damages caused by misrepresentations. Taylor v. Leith, 26 Ohio St. 428; Gartner v. Corwine, 57 Ohio St. 246 [48 N. E. Rep. 945].

In this case the plaintiff is seeking to recover the consideration for property sold to the defendants, which as the defendants claim, they were induced to purchase on account of the false representations of the plaintiff, and the defendants are only seeking by recoupment to recover in damages the loss which they sustained by reason of this sale made to them.

“When, however, a person claims the benefit of a contract into which he has induced another to enter by means of misrepresentations, however honestly made, the same principles cannot be applied. It is then only necessary to prove that the representation was material and substantial, affecting the identity, value or character of the subject-matter of the contract, that it was false, that the other party had a right to rely upon it, and that he was induced by it to make the contract, in order to entitle him to relief either by rescission of the contract or by recoupment in a suit brought to enforce it.” Mulvey v. King, 39 Ohio St. 491, 494.

This principle was again affirmed by our Supreme Court in the case of Irwin v. Wilson, 45 Ohio St. 436 [15 N. E. Rep. 209].

In the case of Pierce v. Tiersch, 40 Ohio St. 168, 172, the Supreme Court in the opinion says:

“In an action against the mortgagor for the purchase money, his right to set up a counterclaim for any excess in price through the vendor’s misrepresentations of the extent of the .property, would be the same, whether such representations were wilful or innocent.”

Miller, the owner of these cattle, caused this tuberculosis test to be made, and the announcement that it was made and that there was no reaction, for the purpose of securing better prices for his cattle at this sale, and the defendants made the purchase because of and relying upon these representations. Both plaintiff and the defendants believed that if there was no reaction in making this test, the cattle were free from this disease.

“Where the seller makes material statements which are untrue, and the purchaser relies thereon in making the purchase, such representations are fraudulent, and it is immaterial that the seller believed them to be true.”

Kirkpatrick v. Reeves, 121 Ind. 280 [22 N. E. Rep. 139].

To the same effect is the case of Crowe v. Lewin, 95 N. Y. 423.

The supreme court of Michigan, in the case of Baughman v. Gould, 45 Mich. 481 [8 N. W. Rep. 73], in the opinion on page 482 says:

“For the purpose of recoupment it is quite immaterial whether as a question of morals Gould was or was not at fault. The right to recoup was not dependent on it. There being in fact a misrepresentation, though made innocently, its deceptive influence was as effective and the consequences to Baughman as serious in respect to actual damage as though it had proceeded from a vicious purpose.’

The plaintiff below did not intend any fraud in making the statement of which complaint is made, but by that statement the defendants below were induced to purchase this bull and lost the consideration they agreed to pay for it. The plaintiff below is now seeking to recover the consideration for this contract into which defendants below were induced to enter by the representations of plaintiff below.

If this animal was afflicted by this disease at the time of the-sale these parties all believed that this test would have disclosed it, if no mistake had been made in making the test.

“An error of fact takes place, either when some fact which really exists is unknown, or some fact is supposed 'to exist which really does not exist.” Mowatt v. Wright, 1 Wend. (N. Y.) 355, 360 [19 Am. Dec. 508].

To permit the plaintiff to recover the purchase money fob this animal when the sale was induced by his representation, if it was suffering from this disease at the time, would be permitting the plaintiff to profit by his own mistake. When a loss of the value of property must be suffered, a party should not be permitted to escape that loss by recovering, the consideration for a sale of the property induced to be made by his representation, which proved to be untrue even if innocently made.

For error in giving the two requests complained of, and this error in the charge, the judgment of the court below is reversed and remanded for further proceedings according to law.

Defendant in error excepts.

Metcalfe and Norris, JJ., concur.


text:
    BILLS, NOTES AND CHECKS.
    [Huron (6th) Court of Appeals,
    October 3, 1913.]
    Kinkade, Richards and Chittenden, JJ.
    H. E. Frazier v. First National Bank of Ellwood City.
    On Payee’s Diverting Collateral Securities without Consent of Accommodation Endorser, Releases Latter to Extent He is Injured Thereby.
    Under1 favor of Sec. 8300 G. C. and the rules of the law merchant an accommodation endorser is entitled to be protected in his right to collateral securities deposited with the payee, and such payee has no right to divert the securities without the consent of such endorser, and he will be released by such act, to the extent he is injured thereby.
    [Syllabus by the court.]
    Error to common pleas court.

      C. P. <& B. D. 'Wickham and E. G. Martin, for plaintiff in error.

      G. Bay Craig, for defendant in error.
   RICHARDS, J.

The action in the court of common pleas was begun by the bank to recover on two promissory notes, one executed by Charles E. Brown and the other by the Huron Steel and Iron Company. • Each of these notes was endorsed by IT. E. Frazier1 who was made a party defendant in that court. He filed an answer claiming as a defense, in substance, that at the time of making and endorsing the promissory notes on which he was an accommodation endorser, there was delivered to the bank as collateral security, certain negotiable paper the market value of which was in excess of the amount of the notes upon which the action was brought.

He avers in his answer that after the delivery of this negotiable paper as collateral security, the defendant, Charles R. Brown, with the knowledge and consent of the bank, but without the knowledge or consent of H. E. Frazier, secured from the bank said collateral security and- substituted therefor certain other collateral security. He avers further that this substituted collateral security was of little value and was subsequently converted into cash and brought a sum entirely insufficient to pay the obligations signed by the answering defendant, and he asserts that the substituted security was itself withdrawn from the bank with the consent of its officers and that the proceeds arising from the sale of the collateral were diverted and applied upon other instruments than those signed by the answering defendant. The allegations contained in this answer are denied by the plaintiff bank.

The case was tried in the court of common pleas without the intervention of a jury, and that court found all the facts in favor of the bank except that the journal entry specifically recites that “the court does not determine the facts set forth in the separate answer of H. E. Frazier, in regard to the deposit of collateral security, and the withdrawal thereof.”

The case as made, is one in which this court is required to decide as to the sufficiency of the answer of H. E. Frazier. The trial court evidently reached the conclusion that the allegations contained in that pleading were immaterial, or at least, did not constitute a defense to the claim set forth in the petition of the bank. That conclusion is said to have been based on the holding of the Supreme Court in Richards v. Market Exchange Bank Co. 81 Ohio St. 348 [90 N. E. Rep. 1000]. In the case cited, Richards had signed an obligation as a surety and sought leave of court to file an answer setting up an extension of time whereby he contended that the instrument had been discharged. The Supreme Court held in that ease that the codification of the law governing negotiable instruments provided in Sec. 8224 and 8225 G-. C. the method and the only method by which such instruments could be discharged. It is insisted in this case that the holding so made is determinative of the issues and requires an affirmance of the judgment of the trial court.

On the other hand, it is contended by counsel for Frazier that the decision just cited, is not a controlling one under the facts disclosed in the record in the ease at bar; that the statutes upon which that decision is based had no reference to a release from liability of an accommodation maker where collateral security pledged for his benefit had been wrongfully surrendered and the proceeds diverted without his knowledge or consent. Counsel for Frazier in their brief succinctly state their coiitention, as follows:

“We claim that if said notes were deposited as collateral to the notes in suit, they were so deposited for the benefit ot' the plaintiff in error; and that if afterwards diverted to the security of some other notes upon which the plaintiff in error was not liable and without his knowledge or consent, that to the amount of their value, the plaintiff in error had a counterclaim to the notes in suit. The uncontradicted evidence of Mr. Edward Gardiner shows that they were equal in value to the two notes in suit, and so the defendant in error’s notes in suit were satisfied.
“What the defendant Frazier, is claiming here, is that the plaintiff who is the owner of the note, has no cause of action against him by reason of certain conduct of which it has been guilty; because having in its possession certain property that it was holding in trust for the satisfaction of the note, in violation of the trust, and in fraud of the rights of Mr. Frazier, it diverted the property to another purpose. It is not a question of whether Mr. Frazier has been ‘discharged’ from the note; but rather whether the plaintiff is in a position to recover from' him upon the facts in evidence. Mr. Frazier may still be liable on the note to some subsequent holder for value without notice, such as an endorsee, for instance, and so not ‘discharged’ from the note; and yet not liable to the plaintiff by reason of the breach of trust of which it has been guilty. The authorities cited show that he, in common with sureties in all kinds of instruments, would not be liable under such circumstances to the person who had occasioned their loss.
“No attempt is made in Sec. 8225 G. C. to provide for a case like the one at bar. It is a case wholly outside of and independent of the note or its terms. It is simply a change in the status of the defendant, Frazier, occasioned and brought about by the breach of trust of the plaintiff. It was a situation which required of the defendant in error the utmost good faith and honest dealing. It was a situation in which the defendant in error, under the law merchant, was bound to-conserve Mr. Frazier’s interest and not surrender and throw away what had been put into its hands for his protection, — what in fact belonged to him in equity. This duty rested upon the defendant in error, subject to any counterclaim the plaintiff in error might have against it. Mr. Frazier’s defense is in the nature of damages by way of counterclaim.
“The facts stated in the answer of the plaintiff in error constitute a complete cause of action in his favor and might have been set up in an independent action for damages.
“The defense of the counterclaim is wholly consistent with the right of the defendant in error to recover on its two notes. The plaintiff in error nowhere denies his liability on the notes. He is not asking to have the notes ‘ discharged. ’ He is counterclaiming against them for the amount and value of the collaterals, up to the amount of the two notes.”

The question at bar is not so much one of liability of a party on a negotiable instrument as it is the right of a surety or accommodation endorser to be protected by the preservation of collaterals which have been deposited for his benefit at the time he entered into the obligation. The courts have always, jealously guarded the rights of a surety and it is inconceivable that the general assembly by the adoption of the negotiable instrument law, intended to deprive him of all right to protection where collateral security deposited for his benefit has been improperly diverted and the proceeds applied on obligations in which he has no interest.

Richards v. Bank, supra, was a case involving the discharge of the instrument itself, while the case at bar is one in which the defendant sought protection of his rights as surety by insisting on the fulfillment of the contract whereby collateral security had been deposited for his benefit and we think that case is not inconsistent with his claim.

If the argument of counsel for the bank is sound, then it would be possible in every case for a payee of negotiable paper holding collateral security to release the same at will and thereby deprive the surety of all protection. We can not believe, nor hold, that a surety, under such circumstances, is without remedy.

The subject of collateral security now under consideration does not appear to be embraced within the negotiable instrument statute, and it is provided in said statute in Sec. 8300 G. O. that any case not provided for, should be governed by the rules, of the law merchant. By those rules, Frazier .would be entitled to the relief sought by him, if the allegations of his pleading are sustained by the evidence.

The trial court declined to pass on the issue raised in the pleading filed by Frazier. We think the court erred in so doing. For this reason, the judgment will be reversed and the case remanded for a new trial and further proceedings in accordance with this opinion.

Kinkade and Chittenden, JJ., concur.


text:
    GIFTS.
    [Columbiana (7th) Court of Appeals,
    April 9, 1914.]
    Metcalfe, Norris & Pollock, JJ.
    Zilpha R. Ambler, as Admrx. et al. v. J. C. Boone, as Admr.
    Donor of Money as Gift, Taking Nonnegotiabie Note in Return, Does not Make Gift Inter Vivos.
    When money is given intending to make a gift, but at the same time the donee’s note is taken for the amount given payable to donor on demand, and containing therein a stipulation that the note was not negotiable and void in the hands of any other party, except the payee, and in ease no demand is made by payee before her death, it shall be considered paid in full and void as against her estate; and providing that the only way demand for payment can be made by payee hereof shall be by leaving this note with the cashier of certain banks with instructions given in person by payee to collect the same, does not make a valid gift inter vivos, where the payee retained possession of the note at. her death, but it becomes an asset of her estate. To constitute a gift inter vivos, there must be an immediate and irrevocable delivery of the property, and a relinquishment of «til dominion over or right to recall the gift.
    [Syllabus by the court.]
    Error.

      Carey & Armstrong, for plaintiffs in error.

      J. C. Boone and C. S. Speaker, for defendant in error.
   POLLOCK, J.

The defendant in error brought an action in the court of common pleas of this county against the plaintiff in error on two promissory notes. The first note reads as follows:

“Salem, Ohio, November 23, 1898. On demand after date for value received, we promise to pay Frances Ann Phillips, the sum of seventy-seven hundred and fifty ($7750) dollars without interest.
“This note is not negotiable, and is absolutely void in the hands of any other party than Frances Ann Phillips, as' against the maker hereof. In case no demand is made for the payment of this note by Frances Ann Phillips, the payee herein, before her death, this note shall be considered as paid in full, and after the death of said Frances Ann Phillips, payee herein, shall be void as against the makers herein or his estate. The only way in which demand for the payment of this note can be made by the payee herein before her death, shall be by leaving this note with the cashier of The First National Bank of Salem, Ohio, or the cashier of the Farmer’s National Bank of Salem, Ohio, with instructions to said cashiers, given in person by said payee herein, to collect the same.
“Hannah L.. Tolerton,
“Sarah E. Buck,
“Zilpha Roselle Tolerton.”

No payments are endorsed on this note.

The second note is the same as the first mentioned except that it calls for $3,000, with interest at the rate of 5 per cent per annum, payable annually. Payment of interest is endorsed bn this note up to November 23, 1903.

One of the makers of these two promissory notes, Hannah L. Tolerton, was the widow of James Tolerton, and the remaining makers are the daughters of James Tolerton; that James Tolerton died about December 17, 1897, leaving a will, and by his will he devised all of his property to his wife and two daughters — the makers of these promissory notes.

■ Frances Ann Phillips, the payee of these notes, was a sister of James Tolerton, and she was married to A. H. Phillips, in 1866. They continued to live together as husband and wife fr'om that time to the time of her death in November, 1904. At the time of her death she had no children living, nor their direct heirs. Prior to the death of James Tolerton Mrs. Phillips gave to ■ him the amount of money represented by these two notes, and took from hini two- promissory notes exactly like the notes signed by the defendants below.

After the death of James Tolerton Mrs. Phillips told the defendants below that if they were going to divide up the estate of her brother she wanted live notes, and the present notes were then given by the defendants in lieu of the ones she held given by James Tolerton.

.Mrs. Phillips gave this money to her brother intending, unless it should be demanded by her during her lifetime,-that it should be a gift to him. About the time that she gave this money to her brother James, she gave something near the same amount to her remaining brother, taking from him notes similar to the ones in suit. She said that she gave this money to her brothers because she wanted her money to remain in the Tolerton family, and did not want any of it to go to her husband. She even sought legal advice whether she could make a will and deprive her husband of all rights in her property. At the time the notes in suit were executed by the defendants below no money was paid to any of them, and the-only consideration for the giving of these notes was the release by Mrs. Phillips of her claim against the estate of James Tolerton. The making of these notes was intended by Mrs. Phillips, and the widow and daughter, as a transfer of the gift made to James Tolerton to his widow and daughters, upon the same conditions as he had received the money.

The notes involved in this action, after the death of Mrs.. Phillips, were found in her private box in the Farmers’ National Bank in Salem, Ohio, with other private papers belonging to Mrs. Phillips. These notes were in a sealed envelope marked, “H. L. Tolerton.” Mrs. Phillips died while in the city of St. Louis. Before leaving home she had given Mrs. Ambler, one of the defendants below, the -key to this private box, and an order on the bank to deliver the box to Mrs. Ambler, with directions to Mrs. Ambler that in case of her' death Mrs. Ambler should secure the box and destroy these' notes. These directions wore not carried out by Mrs. Ambler.

A. H. Phillips, the husband of Mrs. Phillips, had no knowledge during her lifetime that she had given her money to her brothers. Neither had he any knowledge of the notes given by her brothers, or of the notes given by the defendants below to her as evidence of this money. James Tolerton left an. estate sufficient to pay all of his indebtedness, including the notes held by Mrs. Phillips referred to above.

A jury was waived in the court below and the case submitted to the court, resulting in a judgment in favor of the plaintiff below.

In giving this money to her brother Mrs. Phillips intended to make a gift to him, unless during her life she should for some reason change her intention and should personally demand the payment of these notes. She was unwilling to part with her property at that time, or to surrender her right to demand its return. The question then arises, did the giving of this money, unrevoked by the personal act of Mrs. Phillips prior to her death, make a valid gift, or did the retention by Mrs. Phillips of the right to demand payment destroy the neeessary elements of the gift inter vivos, and leave nothing more than the intention to make a gift?

In order to make a valid gift inter vivos there must be a voluntary and absolute delivery of the property, .and all control and dominion over the property must be relinquished. Phipps v. Hope, 16 Ohio St. 586, 595; Flanders v. Blandy, 45 Ohio St. 108, 113 [12 N. E. Rep. 321]; Worthington v. Redkey, 86 Ohio St. 128 [99 N. E. Rep. 211].

In the ease last cited Justice Davis, in the opinion on page 134, says.-

“Whether a gilt is inter vivos or causa mortis # * * there must be such a distinct and absolute delivery of the property as to show a relinquishment of all dominion over the property by the donor.”

Of the many cases in other jurisdictions which have affirmed this rule we will only note the following: Daubenspeck v. Biggs, 71 Ind. 255; Richardson v. McNulty, 24 Cal. 339; Walsh’s Appeal 122 Pa. St. 177 [15 Atl. Rep. 470; 1 L. R. A. 535; 9 Am. St. Rep. 83n]; Liebe v. Battmann, 33 Ore. 241 [55 Pac. Rep. 179; 72 Am. St. Rep. 705]; Linsenbigler v. Gourley, 56 Pa. St. 166 [94 Am. Dec. 51]; Smith v. Dorsey, 38 Ind. 541 [10 Am. Rep. 118]; Calvin v. Free, 66 Kan. 466 [71 Pac. Rep. 823].

In the opinion in this last case on page 468 the court, after quoting the definition of a gift inter vivos as given in the 14 Am. & Eng. Enc. Law (2, ed.) 1015, says:

“This definition implies that the donor must, at the time of making the gift, part with all dominion over it; that he cannot make a valid gift of this character and yet retain to himself the right to recall or redirect it. The gift must be absolute and irrevocable. ’ ’

Again, in the case of Rodemer v. Rettig, 144 Ky. 634 [71 S. W. Rep. 869]; which was an.action on a note after the death of the payee, containing a provision that the note should become null and void on the death of the payee, it was held that it did not constitute a gift inter vivos. In the opinion in that case on the same page the court says:

“It is essential to the validity of a gift inter vivos or causa mortis that there shall be a delivery to the donee, and the property or thing given must immediately pass and be irrevocable by the donor.”

Without doubt, Mrs. Phillips when she gave this money to her brother intended that it should become her brother’s at her death, and to deprive her husband of his right to inherit it; but she was unwilling to surrender her personal right to demand and retake possession of this money at any time during her life. From the time she gave the money to her brother, up until the moment of her death, the money which the notes represented Atas her property, and she neA^er relinquished her OAvnership in it. Her act in giving the money to her brother was nothing more than an attempt to make a testamentary disposition of her property Avithout following the legal requirements of this state. It did not become a gift during her life for the reason that she Avas not willing to, and did not, lose control of it. While she delivered the money to her brother, yet she retained a right to recall that delivery and retake the property at any time.

But it is urged that she delivered the money to her brother without retaining the right to repossess herself of this money; that all she did Avas to retain the right to demand and receive the equivalent of what she had giAnn. But we must remember that money is not itself property, but is only a circulating medium which represents property. When she retained the right to compel her brother to pay her back an equal amount of money, she was retaining the right 'to repossess herself of the thing given, just the same as if she had given a specific article of personal property with the right to demand a return of that property. She gave that which represented property, and reserved the right to demand the return of that which represented property.

Our attention has been called to the cases of Perrin v. Chandler, 69 Atl. Rep. 874 (Vt.) [17 L. R. A. (N. S.) 1239], AA'hieh was an action by an executor to collect a note, with a forfeiture clause, on the death of the payee, something similar to the notes in this action;, and also to the ease of Sebrell v. Couch, 55 Ind. 122, which was an action upon a mortgage, after the death of the mortgagee, containing a provision that it was only to be paid when demanded by the mortgagee in person.

In both of these cases it was held that they could not be collected after the death of the payee and mortgagee, but in neither of these cases does the court discuss the proposition as to what is required in order to constitute a valid gift inter vivos; but in these cases the court seems to have overlooked the rule that in order to make a gift not only delivery must be made, but the delivery must be irrevocable, and all control and dominion over the property must be surrendered.

The rule requiring an irrevocable delivery and a surrender of all control over the thing given, in order to make a valid gift inter vivos, has been applied without exception by the Supretne Court of this state wheneyer that question has been before the court.

In addition to the failure to deliver this money irrevocably, and to surrender the right to retake it, there is the further element of fraud in the act of Mrs. Phillips upon her'husband. She gave her property to her brothers in order to keep it in her family, and deprive her husband of his marital rights in it. And in order to better secure the carrying into effect of this intention at her death, she provided for the destruction of the evidence of indebtedness in case of her death while away from home.

While the law recognizes the right of the owner of personal property to dispose of it as they think best during their life, even to the making of a bona fide gift of it, providing the gift is not made in expectation of death, and with a view to defeat the husband or wife of their right in the property. Stone v. Stone, 18 Mo. 389; Tucker v. Tucker, 32 Mo. 464; Manikee v. Beard, 85 Ky. 20 [2 S. W. Rep. 545].

“A conveyance by the husband shortly before his death of all his property, both real and personal, to his children, without any valid consideration and with the intent to defraud his wife of her dower and her share of the personal estate, securing at the same time to himself the possession, use and control of it during his life, is fraudulent against the claims of the wife and will be set aside.” Thayer v. Thayer, 14 Vt. 107.

While our own Supreme .'Court has not passed directly ■upon this principle, yet in the opinion in the case of Doyle v. Doyle, 50 Ohio St. 330, 345 [34 N. E. Rep. 166], it is referred to favorably. Courts will not lend tbeir assistance, by relaxing the rules required to make a valid gift, in order to carry into effect the intention to make a gift where the result would be to deprive the husband or wife of their rights in the property of the other.

“Our laws relating to written and nuncupative wills, and our laws of descent, should not be defeated by such gifts unless in a very clear ease.” Miller v. Anderson, 43 Ohio St. 473 [3 N. E. Rep. 605; 54 Am. Rep. 823].

But it is urged that even if the giving of this money by Mrs. Phillips to her brother was an attempt to make a gift which has failed, yet the transaction between the defendants below and Mrs. Phillips was a contract by which she agreed to surrender her claim against the estate of James Tolerton on condition that these defendants, who were the beneficiaries under his will, should enter into the agreement evidenced by these two notes.

Without doubt parties could enter into an agreement, for a proper consideration, by which they agreed to pay the amount evidenced by such an instrument, if demanded according to the terms of the instrument, and should not be required to pay under any other conditions; but an examination of the testimony in this case develops the fact that that was not the transaction that these parties were entering into. All Mrs. Phillips was doing, or the defendants were accepting, was a transfer of the intended gift to them that she had previously made to her brother, and on the same terms and conditions that she had attempted to make it to her brother.

Mrs. Phillips looked upoii this transaction as an intended gift, unless she should desire to use the money otherwise during her lifetime, and these people accepted it and made the two notes in this suit with that same object in view.

For these reasons we think they stand in the same relation to this transaction that James Tolerton would have done had he outlived his sister.

Our conclusion is that however clear the intention of Mrs. Phillips may appear to have been to give the money represented by these notes to her brother, and after his death to his wife and children, the transaction lacks the necessary elements to establish a valid gift. The judgment of the common pleas, court is affirmed; no penalty. Defendant excepts.

Metcalfe and Norris, JJ., concur.


text:
    CRIMINAL LAW — ERROR.
    [Lucas (6th) Court of Appeals,
    January 19, 1914.]
    Kinkade, Richards and Chittenden, JJ.
    Emmet Smith v. State of Ohio.
    1. Exceptions in Criminal Proceedings Limited to Same Time Allowed in Civil Proceedings. /
    By virtue of Sec. Í3680 G. C., the period within which a bill of exceptions in a criminal case may be prepared and filed is limited to the same time that is allowed by statute in civil ■actions.
    2. Limitation for Filing Petition in Error in Civil Action not Applicable to Criminal Proceeding.
    The statutory limitation for filing a petition in error to reverse a judgment in a civil action has no application to a criminal action.
    [Syllabus by the court.].
    Error to common pleas court.

      Byron F. Ritchie, for plaintiff in error.

      Charles M. Milroy, Pros. Atty., and August F. Connolly, for defendant in error.
   RICHARDS, J.

An indictment for robbery was returned against Emmet Smith in the court of common pleas of this county on March 3. 1911. Trial was had at the same term of court resulting in a verdict of guilty as charged in the indictment, on March 13, 1911. He filed a motion for a new trial within three days and that motion was heard and overruled by the court on March 18, 1911, and the defendant sentenced to the Ohio Penitentiary for a period of ten years. A bill of exceptions was prepared in the case setting out all of the evidence and that instrument was filed in the court of common pleas on May 27, 1911, and was signed by the trial judge and returned by him to the clerk .of that court on June 10, 1911. A petition in error was filed by the defendant in this court on September 12, 1913, in which ten grounds of error are assigned, nearly all of which relate to errors claimed to have been committed during the trial of the case and which could appear only in the bill of exceptions.

In the hearing of the ease in this court counsel by brief and by oral argument have relied almost wholly upon contentions that the verdict was contrary to the evidence, that the court erred in its charge to the jury and in the admission and exclusion of evidence, and it is further contended that counsel for the state was guilty of misconduct in his argument to the jury. '

The requirements of the statutes providing that the party excepting must reduce his exceptions to writing and file them in the cause are mandatory, and if not complied with, the right to proceed in this court for the purpose of obtaining a reversal for such claimed errors as appear only in the bill of exceptions does not exist. Pace v. Volk, 85 Ohio St. 413 [98 N. E. Rep. 111].

The question naturally arises whether the period of limitation for the filing of such exceptions, which is fixed for civil cases by See. 11564 G. C., controls in the preparation and filing of a bill of exceptions by the defendant in a criminal case. The practice as to criminal cases is controlled by Sec. 13680 G. C., in which section the following language occurs: “and the taking of all bills of exceptions shall be governed by the rules established in civil cases.” We have no doubt but that this requirement fixes a period of limitation for bills of exceptions in criminal eases the same as is provided by statute for civil actions. Kerr v. State, 36 Ohio St. 614, 623; State v. Wirick, 81 Ohio St. 343, 346 [90 N. E. Rep. 937].

In the case last cited Davis, J., speaking for the court, states that the contention that the taking of bills of exceptions in criminal cases is governed by the statutes applicable to civil cases seems to be correct.

It is clear, therefore, that the bill of exceptions in this ease was not filed within the time required by statute and that we have no power nor authority to consider the same.

The petition in error was not filed until more than two years after the rendition of the judgment, but the statutes provide no limitation of time within which such a pleading must be filed in a proceeding to reverse a conviction on a criminal charge. The statutes relative to petitions in error in civil cases are Sees. 12259 and 12270 G. C., while in criminal cases the proceeding is controlled by Sec. 13573 G.' C. .We find no provision in the statutes granting the right to file petitions in error in criminal cases, which in any way refers to or adopts the ■limitation for petitions in error in civil eases, similar to .the provisions as to bills of exceptions contained in Sec. 13680 G. C.

We hold, therefore, that the statutory limitation for filing petitions in error in civil cases has no application to a proceeding in error in a criminal action. Blackburn v. State, 22 Ohio St. 581; Nickel v. State, 3 Circ. Dec. 605 (6 R. 601).

It .follows that we may consider the petitidn in error and pass upon any claimed errors which appear in the record other than those which appear only in th(e bill of exceptions. In the argument of the case no such errors were indicated, and a careful examination of the record other than the bill of exceptions, fails to disclose that any exist.

Finding no prejudicial error appearing on the face of the record, the judgment of the court of common pleas will be affirmed. '

Kinkade and Chittenden, JJ., concur.