author: NEMAN, J.

text:
    CORPORATIONS
    [Lorain (8th) Circuit Court,
    December 2, 1912.]
    Marvin, Winch and Niman, JJ.
    C. E. Vandeusen, Tr. v. E. M. Ransom.
    Stockholder’s Liability for Unpaid Subscriptions not Defeated by Any Device Short of Payment.

      Capital stock or shares in a corporation, especially the unpaid subscriptions to such stock, constitute a trust fund for the benefit of creditors, which can not be defeated by simulated payment of the stock subscription or by an device short of actual payment; hence, where a subscriber to stock in a corporation pays only 80 per cent, of its par value and a board of trade is credited with a commission of 20 per cent, for procuring the purchaser, which 20 per cent, is immediately assigned by the board of trade to the purchaser, according to a pre-existing agreement, such transaction is not a valid payment of the 20 per cent, as against creditors of the corporation or a trustee in bankruptcy.
    Error.

      White, Johnson & Cannon, for plaintiff in error.

      G. A. Besek and L. B. Fauver, for defendant in error.
   NEMAN, J.

The plaintiff in error is the trustee in bankruptcy of the National Steel Products Co., a corporation. He was plaintiff in the action below, the action there being brought to recover the balance claimed to be due on the defendant’s subscription to the. capital stock of said the National Steel Products Co.

The evidence establishes the fact that the defendant subscribed for fifty shares of the capital stock of the National Steel Products Co. and agreed to pay therefor the sum of $100 per share, which was the par value of the stock, but that in fact he actually paid only $80 per share. The difference between the par value and the price actually paid for the stock was sought to be recovered in the original action.

To defeat the plaintiff’s claim, the defendant relied upon an affirmative defense, stated in the second amended answer, in the following language:

‘ ‘ Further answering, and for a second defense to the petition of plaintiff, this defendant says that on or about September 17, 1909, said the National Steel Products Co. attempted to increase its capital stock from $25,000 to $50,000 and at said time said company was insolvent and had no working capital, and was unable by reason thereof to sell or place any of said additional capital stock, that the officers attempted to raise capital by obtaining subscriptions to its capital stock, but were unable to secure any subscribers; that at said time there was in existence in the city of Lorain an industrial organization known as the board of commerce, which board was composed of the leading business men, bankers and professional men of the city of Lorain; that said company, as a final resort in its efforts to obtain subscriptions, enlisted the services of the industrial committee of said board of commerce and entered into an agreement with said board of commerce whereby said board of commerce agreed to obtain subscriptions for said second issue of said stock, and said company agreed to pay said board of commerce for said services the sum of $20 per share for all subscriptions secured; that the said services of the said board of commerce were reasonably worth said sum of $20 per share.
“This defendant further says that he subscribed for fifty shares of the capital stock of said company under an agreement whereby this defendant was to pay for said stock the sum of $100 per share, of which $80 per share was to be paid in cash, and $20 per share in commissions earned by the board of commerce and assigned by said board of commerce to this defendant; that this defendant paid the sum of $80 per share in cash, and the board of commerce assigned to this defendant said commissions of $20 per share, thereby relieving said company from the payment of said commissions to said board of commerce, and credited this defendant with said commissions, and that this defendant is not indebted in any amount whatever to said company or to plaintiff herein, by reason of said stock subscription.”

This defense was controverted by the plaintiff; the defendant assumed the burden on the trial of the action, and at the conclusion of his evidence the court overruled a motion made by the plaintiff to direct a verdict, which motion was renewed at the close of all the evidence, with like ruling by the court. The verdict was for the defendant. To reverse the judgment entered thereon, the plaintiff in error prosecutes this action.

It is contended on behalf of the plaintiff in error that the proof of the alleged contract betw.een the National Steel Products Co. and the board of commerce, and of the rendition of services by the board of commerce in selling the stock purchased by the defendant, is insufficient to support the contract; that the agreement relied upon by the defendant, even if made as claimed, is a mere device to enable the company to sell its stock at less than par, and made for the purpose of enabling the defendant and other purchasers of stock to avoid further liability, and therefore void as against creditors who are represented here by the trustee in bankruptcy; that the board of commerce of the city of Lorain being a corporation not for profit, conld not make a contract for commissions and agree to sell stock and receive profit therefrom, even though such commissions were assigned to purchasers of stock.

The board of commerce is a corporation not for profit, having for its object the advancement of the commercial and industrial welfare of the city of Lorain.

We are not prepared to hold, as a matter of law, that it would be beyond its powers to enter into a contract with a corporation for the purpose of assisting in the sale of the stock of the company, for the purpose of promoting the general industrial growth of the city and giving to purchasers of stock the commissions contracted for, providing it was reasonably fair and the contract entered into in good faith and not for the mere purpose of enabling those who might subscribe for stock to purchase the same at less than par and avoid further liability thereon.

There was evidence in this case which required the submission of the issues to the jury, and the trial court did not err in overruling the motion of the plaintiff to direct a verdict. A consideration of all the evidence, however, convinces us that the verdict is not sustained by sufficient evidence.

The arrangement entered into between the board of commerce, or the industrial committee representing the board, and the National Steel Products Co., strongly suggests the inference that it was intended to provide thereby a device whereby stock of the company could be sold at $80 per share to all who might desire to purchase, regardless of the services rendered by the board of commerce in making sales, and to protect purchasers against further liability if they should ever be called upon to pay the remaining $20 per share.

It appears that the company, which was in the manufacturing business and located in the city of Lorain, being desirous of increasing its capital stock, sought the assistance of the board of commerce of said city in selling additional stock. The president of the board of commerce was first approached by officers of the company, who proposed to him that if he would use his influence in putting $20,000 of the company’s stock on the market, lie should receive as compensation the sum of $2,000. This proposition was rejected by the president'of the board of commerce but the matter was referred to the industrial committee of the board. As a result of the action of the industrial committee, the assistance of the board of commerce was secured in placing the company’s stock on the market, and an arrangement was made whereby a commission of 20% of the par value of the stock was to be, in form at least, paid to the board of commerce, but in fact this commission was never paid, but was credited on the subscriptions of those who took stock. The company issued a prospectus which, after setting forth various information concerning the company and its affairs, contains this language:

“Stock is offered at a net price of $80 per share, this basis having been arrived at in conference between the management of the company and the industrial committee of the board of commerce, as a fair adjustment between the present and the prospective stockholders. An adjustment between the par value of $100 and the net price of $80 per share will be made by way of a commission, which will be refunded to the subscribers so that they will be relieved of any liability in the future for what would otherwise be an unpaid portion of the par value of the stock.”

If the transaction between the company and the board of commerce was designed merely to furnish a plan whereby those who subscribed for stock and obtained the same at less than par, might be relieved of further liability thereon, the law is such that such transaction can not be interposed as a defense to an action brought by the trustee in bankruptcy for the company. The law is well established that, although an issue of stock is for cash under an agreement that only part of the par value need be paid, yet corporate creditors or their representatives may compel the persons receiving the stock to pay the unpaid par value. As between the corporation and the stockholder, the agreement would be good, but where the rights of creditors of the corporation are involved, such agreement constitutes no defense in an action for the unpaid balance of the subscription.

Sawyer v. Hoag, 84 U. S. (17 Wall) 610 [21 L. Ed. 731], is typical of numerous decisions. It was there held:

‘ ‘ Capital stock or shares of a corporation, especially the unpaid subscriptions to such stock or shares, constitute a trust fund for the benefit of the creditors. This trust can not be defeated by a simulated payment of the stock subscription, nor by any device short of an actual payment in good faith. An arrangement by which the stock is nominally paid and the money immediately taken back as a loan to the stockholder, is a device to change the- debt from a stock debt to a loan, and is not a valid payment as against creditors of the corporation, though it may be good as between the company and the stockholder.”

There is some evidence here that the board of commerce, or some of its members, had some influence in inducing the defendant to subscribe for his stock, but in view of what seems to us the manifest character of the arrangement, we think that this evidence and other evidence offered on the subject of the reasonable value of the services in obtaining subscriptions to stock of the corporation, are insufficient to sustain the verdict, and that the motion of the plaintiff for a new trial should have been granted on the ground that the verdict, is not sustained by sufficient evidence, and for error in overruling said motion, the judgment is reversed and the cause remanded for further proceedings according to law.

This opinion and the result herein indicated represent the views of a majority of the court.

Marvin, J., concurs.

Winch, J., dissents.


source: Caselaw Access Project

author: MARVIN, J.

license: Public Domain

text:
    AUTOMOBILES
    [Cuyahoga (8th) Circuit Court,
    December 2, 1912.]
    Marvin, Winch and Niman, JJ.
    John W. Taylor, Admr. v. Cleveland Ry.
    Disregard of Statutory Regulations in Operation of Automobile.
    The operation of a motor vehicle in violation of Secs. 12603 and 12604 Gr. C., is prima facie evidence of negligence, when such operation of the motor vehicle caused a pedestrian, in order to avoid it, to step bach in front of a moving street car which strikes and 'hills her.
    Error.

      Ong, Thayer & Mansfield, for plaintiff in error.

      Squire, Sanders & Dempsey and Stearns, Chamberlain <& Boyon, for defendants in error.
   MARVIN, J.

This was a suit for wrongful death of said decedent. On April 15, 1910, the decedent was caught between two cars of the. railway company at the corner of Euclid avenue and East 100th street, in the city of Cleveland, the one going east on the south track of said company, and the other west on the north track. Being so caught, she was crushed to death.

These ears were on Euclid avenue, a main thoroughfare in said city, and at the point of this occurrence much used by vehicles of all kinds.

East 100th street does not cross Euclid avenue, but leads from said avenue to the south. This occurrence was in broad daylight, and resulted either wholly from the negligence of the decedent or from the combined negligence of the decedent and that of either one or both of the defendants, or wholly from the negligence of one or both of the defendants, or it was an accident for which no one was responsible because it did not result from the want of reasonable care on the part of anybody.

The plaintiff, as administrator of the decedent’s estate, brought suit charging that it resulted wholly from the combined negligence of the defendants. Each defendant answered denying negligence on its part and charging negligence against the decedent. The case went to trial, and the court directed a verdict in favor of the defendant Lawrence, and submitted the question of the liability of the railway company to the jury, which returned a verdict in favor of the railway company. By proper proceedings the case is here for review, it being urged that the verdict in favor of the railway company is against the weight of the evidence, and that there was error on the part of the court in directing a verdict in favor of Lawrence.

We are of opinion that the evidence does not show want of reasonable care on the part of the decedent. She and another woman were walking on the north sidewalk on Euclid avenue; when they reached a point opposite to the sidewalk on the east side of East 100th street, they turned to cross Euclid avenue. This necessitated the crossing of both tracks of the railway company, and of course the devil strip between the tracks. At this time the two cars, already mentioned, were coming in opposite directions, the one from the east, being at a considerable distance from the line on which the women, were crossing— at a rate and far enough away so that they crossed the track in safety — the one coming from the west was nearer, but the witness Falls says it was going slowly, apparently making a stop. At any rate, this car was not approaching at such a rate of speed as to prevent these two women from passing in front of it with safety, for Miss Canfield, the woman who was with the decedent, did so cross. The witness Falls says, in describing the occurrence:

‘1 They crossed the street between the curb and the street car track without any occurrence of moment, until they hesitated on the south track or rather the track of the east bound car, stepped back into or almost into the track of the west-bound car; the one woman, rather both ladies, started again for the south side of Euclid avenue, one lady continued on to the . south side of Euclid avenue very hurriedly; the other lady stepped back into the devil strip.”

This one who stepped back was plaintiff’s decedent.

The defendant Lawrence was driving an automobile to the east, and was so near to the place where Miss Canfield crossed, and where Mrs. Eobb must have crossed, that the mudguard of his machine grazed her clothing. Mrs. Eobb then was in this situation immediately before she was caught. She was on the east-bound track, and but for the approach of the automobile she could have crossed in safety, but a dilemma presented itself. If she moved forward, she was in imminent danger from the automobile ; if she stood still or stepped back, she was in danger from the approaching cars. She had to determine on the instant, and she stepped back and so was caught.

Both on reason and authority it is clear that one so situated is not bound to exercise such judgment as is required where one has time to deliberate and choose. It does not appear from the evidence that Mrs. Eobb did not exercise as much care as an ordinarily prudent person would exercise when confronted with a like combination of circumstances, and so neither the action of the court in directing a verdict for the defendant Lawrence, nor the finding of the jury, can be justified on the ground of negligence on the part of the decedent.

We reach the conclusion, too, that the verdict of the jury in favor of the railway company is not by any means clearly against the weight of the evidence, and this largely on the evidence of the witness Falls, a part of which has been hereinbefore quoted. The question then remains as to the direction of the court to return a verdict for the defendant Lawrence.

If there was any evidence tending to show that this defendant was negligent in any manner charged in the petition and that such negligence directly caused or contributed to the accident resulting in the death of Mrs. Robb, then this was erroneous.

At the time of this accident Lawrence was driving his automobile to the east on the south side of Euclid avenue. The witness Falls says that the machine swerved into the track of the east bound car to avoid a wagon which was standing on the south side of Euclid avenue east of the cross walk of 100th street. Miss Canfield stepped in front of the automobile, or rather rushed, and her clothing was grazed by the right front mudguard of the automobile. This automobile pulled then into the track in front of the east bound car. Either the defendant saw or failed to see these women; if he saw them and the situation they were in he knew that his approach with the car was threatening to them, and calculated to cause them to step back as they did. It is possible that he did not see them until he had swerved into the track, because of the east bound car being between him and them, as it is not improbable that they did not see him until he so swerved into the track, or if they did see him, it must have been when he was far enough back of the car as that he could, if driving carefully, have stopped or slowed down his machine. As already said, it is possible that he did not see them until he swerved into the track, but the evidence tends to show that he was violating Sees. 12603 and 12604 G. C.

The first of these makes it an offense to operate a motor vehicle on the public road or highway at a speed greater than is reasonable or proper, having regard for width, traffic, use, etc., of such road or highway, or so as to endanger the property, life or limb of any person.

The second makes it an offense to operate a motor vehicle at a speed greater than fifteen miles an hour within the limits of any municipality.

The testimony tended to show that Lawrence so operated his vehicle as to endanger the life and limbs of whoever should be crossing Euclid avenue at the point where these ladies undertook to cross; indeed, the danger to Miss Canfield who, by rushing across the street, avoided being hit by him, but who came so near to being hit that the mudguard grazed her clothing, tended to show that he was driving at a speed greater than fifteen miles an hour. True, the witness who says the speed was greater than fifteen miles an hour says he can not say how fast it was going, but that it was going at a speed higher than fifteen miles an hour. It by no means follows that because one can not say how fast an object is going, he may not positively know that it is going faster than some given speed. One does not need to have witnessed many horse races to know that a horse which is actually going at the rate of 2:10 is going faster than a three-minute gait, though he may not know whether it is going at a 2:10, 2:12 or 2:20 gait. All of us have ridden on railroad trains when we knew they were going more than twenty-five miles an hour, without knowing whether they were going at forty or fifty miles an hour. But one may operate an automobile or a street car at a negligent rate of speed, without violating a statute or a municipal ordinance. Whoever supposes that if he violates no statute and no municipal ordinances by the speed at which he is operating any vehicle, he is necessarily not negligent in the matter of speed, is most greviously mistaken.

The evidence tending to show in this case that Lawrence was violating either or both of the sections of the statute makes a prima facie case of negligence against him, but it is said that the evidence does not tend to show that this negligence, if established, contributed directly to the injury and death of the decedent. We think otherwise. The stepping back of Mrs. Robb when she saw the automobile approaching at such speed was not unnatural; it was such as might reasonably have been expected, and such as might not have been expected if he had been operating his machine at such a rate as is prescribed by Sec. 12603 G-. C., that is, at a speed that was reasonable or proper, having regard to the width, traffic and use of the street, and so as not to endanger the life or limb of any person.

It is further said that if the defendant was negligent in .such, wise as to have contributed to the injury of Mrs. Robb, it was not the negligence charged in the petition against Lawrence. This contention is not sound. The language of the petition in that regard is that this motor vehicle, operated by Lawrence, “was being propelled by said defendant over the street crossing and intersection described in the petition; that said defendant was operating said automobile at a dangerous and negligent rate of speed, greater than was reasonable or proper, having regard for width, traffic and use and the general and usual rules of said highway, and so as to endanger the lives of pedestrians thereon, and especially said Isabel Hampton Robb; that said defendant was then operating said automobile on said street in said city at more than fifteen miles an hour. ’ ’

. This charges the negligence which the evidence tends to establish, and which, as already pointed out, directly contributed to or caused the injury to Mrs. Robb.

We are not impressed with the soundness of the argument made on the hearing that the rate of speed of the machine had nothing to do with the accident; that it was the failure to stop or slow down, or the being at this particular point at this time, that caused Mrs. Robb to step back to the point where she was struck by the car. If this argument is sound, it could equally well be made against all statutes and all ordinances against the speed of motor and all other vehicles. The object of all these regulations is to prevent the operation of these vehicles in such wise that they are likely to strike and injure persons or property, and it is a matter of common knowledge that the momentum acquired by rapid motion enhances the difficulty of stopping or slowing down.

We reach the conclusion, therefore, that the court erred in directing a verdict for the defendant Lawrence. We find no error in the charge as given in reference to the railway company, nor do we find any error in refusing to charge as requested by the plaintiff before argument. Without stopping to analyze these requests, we call attention to the fact that the request was general as to the entire series, but we also find that as to each, there was matter asked that would justify a' refusal to give in the exact words of the charge. The result is that the judgment in favor of the railway company is affirmed, and the judgment in favor of Lawrence is reversed for error in directing the jury to bring in such a verdict.

The case is remanded for further proceedings between the plaintiff and the defendant Lawrence.

Winch and Niman, JJ., concur.


author: NIMAN, J.

text:
    DIVORCE AND ALIMONY
    [Cuyahoga (8th) Circuit Court,
    December 3, 1912.]
    Marvin, Winch and Niman, JJ.
    Kate D. Fenn v. Everton W. Fenn.
    Decree Providing Monthly Payment of Alimony Held Adjudging Property of Husband to Wife Divorced for Her Aggression, Hence not Subject to Modification.
    When a divorce is decreed a husband because of the aggression of the wife, the further jurisdiction of the court in respect to the property rights of the parties is determined by Sec. 5700 R. S. (Sec. 11993 G. C.), and when in such case the decree provides for a monthly payment of alimony by the husband extending through a term of years, such payments are in fact not alimony, but property of the husband adjudged to the wife, and are not subject to modification.
    Error.

      Squire, Sanders & Dempsey, for plaintiff in error.

      Kline, Tolies & Morley, for defendant in error.
   NIMAN, J.

The action out of which this proceeding in error arises was begun in the common pleas court of Cuyahoga county by Ever-ton W. Fenn, the defendant in error, against Kate D. Fenn, the plaintiff in error, to secure a divorce.

On the trial of the original action the plaintiff was granted a divorce from the defendant upon the ground of willful absence for more than three years, but the plaintiff was ordered to pay to the defendant for her support the sum of $25 each month beginning December 1, 1904, for the period of six years from and after said date. This was in addition to certain payments which the plaintiff was ordered to pay for the support of the children of the parties.

The journal entry in connection with this order states:

“This provision for alimony for the defendant herein is made in view of the fact that a liberal allowance had already been-made by an agreement resulting in’the settlement of a suit instituted by the defendant against the plaintiff for alimony in this court.”

The plaintiff complied with the order made, and fully paid the installments provided for in the decree.

On December 15, 1910, the defendant filed a motion to modify the decree so as to secure an order on the plaintiff to pay to her such sum per month as the court might decree proper during the life of the defendant, or until she should remarry.

Notice of the filing of this motion was given the plaintiff in Chicago, and also to counsel of record for the plaintiff in the original action. Subsequently counsel for the defendant sought to take depositions on her behalf in support of the motion. Notice of the taking of such depositions was sent to the plaintiff by registered mail, and was served on his attorney of record. At the time set for the taking of depositions, a witness was called before the notary and questions put to him seeking to elicit information concerning the financial condition of the plaintiff. On the advice of counsel the witness refused to answer.

The notary then certified his proceedings to ■ the court of common pleas, and asked for instructions in the matter of requiring the witness to answer the questions propounded to him. On consideration of this application, the court adjudged and. decreed that it had no jurisdiction over the person of the plaintiff, and instructed the notary not to require, the witness to answer the questions, and to take no further proceedings in the taking of the depositions.

. On the hearing of the motion, the court adjudged that it was without jurisdiction of the plaintiff or the subject-matter of the motion, and therefore declined to consider said motion on its merits.

Exceptions were duly taken to these rulings, and by this proceeding in error it is sought to secure a reversal of the judgment entered against the defendant below.

It is contended on behalf of the plaintiff in error that the court may at any time on any change of circumstances of the parties, increase or reduce the amount awarded one of the parties as alimony, and that application for such purpose may be made in the same cause.

This contention is sustained by numerous decisions both in this state and elsewhere, where the subject-matter of the controversy is alimony in the proper and strict sense of that term. Cole v. Cole, 142 Ill., 19 [31 N. E. 109]; Jungle v. Jungle, 5 la., 541; Hoffman v. Hoffman, 15 Ohio St. 427; Olney v. Watts, 43 Ohio St. 499 [3 N. E. 354]; Pretzinger v. Pretzinger, 45 Ohio St. 452 [15 N. E. 71; 4 Am. St. 542].

The determination, therefore, of the soundness of the rulings of the court of common pleas, which resulted in the judgment against the defendant, complained of in this proceeding, requires a consideration of the nature of the order sought to be modified. If it was a decree for alimony proper, the jurisdiction of the court was continuing and the judgment below was erroneous. If, on the contrary, it was a mere judgment for the payment of money, such that its rendition exhausted the powers of the court on that subject, unless vacated or set aside in some manner authorized by law, the action of the court below was correct.

Section 5700 R. S. (Sec. 11993 G. C.), is as follows:

“When the divorce is granted by reason of the aggression of the wife, she shall be barred of all right of dower in the lands of which her husband is seized at the time of filing the petition for divorce, or which he thereafter acquires, whether there is issue or not; and the effect of the judgment of divorce shall be to restore to her the whole of her lands, tenements or hereditaments not previously disposed of, and not allowed to her husband as alimony, subject to the dower right of her husband therein, and the court may adjudge to her such share of the husband’s real or personal property, or both, as it deems just and reasonable or the husband shall be allowed such alimony out of the real and personal property of the wife as the court deems reasonable, having due regard to the property which came to the wife by marriage, and the value of her real and personal estate at the time of the divorce, which alimony may be allowed to him .in real or personal property, or both, or by decreeing to him such sum of money, payable either in gross or in installments, as the court deems just and equitable; and if the husband survives his wife he shall also be entitled to his right of dower in the real •estate of his wife not allowed to him as alimony, of which she was seized at any time during the coverture, and to which he had not relinquished his right of dower. ’ ’

Since the divorce in this case was granted the husband by reason of the aggression of the wife, the power of the eourt to decree any of the husband’s property to her is based on said Sec. 5700 (11993).

The order made upon the plaintiff to pay the defendant the sum of $25 per month for six years must be referred to the authority of the court, not to award the defendant alimony, but to “adjudge to her such share of the husband’s real or personal property, or both, as it deems just. ” The fact that the payments ordered made are described as alimony does not affect their essential character. The order was in legal effect a judgment under authority of said Sec. 5700 (11993), for such share of the husband’s property as the court deemed just and that judgment is not subject to modification in the manner attempted by the defendant.

• That a distinction between alimony proper, and a judgment rendered under authority of said Sec. 5700 (11993) exists, is recognized by the Supreme Court in Hassaurek v. Markbreit, 68 Ohio St. 554 [67 N. E. 1066], In the opinion on page 579, it is said:

“Nor need we consider the nature of the obligations upon which decrees for alimony are founded, since the finding of the court upon the evidence that the wife had been wilfully absent for more than three years, and its judgment that the marriage relation should be terminated for that reason, excluded her right to alimony. The court having concluded that a divorce should be decreed for her aggression, its further jurisdiction was defined by Sec. 5700 R. S. as follows: ‘and the eourt may adjudge to her such share of the husband’s real or personal property, or both, as it deems just and reasonable.’ ”

See also Law v. Law, 64 Ohio St. 369 [60 N. E. 560]; Fickel v. Granger, 83 Ohio St. 101 [93 N. E. 527; 32 L. R. A. (N. S.) 270n; 21 Ann. Cas. 1347].

The judgment of the court of common pleas is affirmed.

Marvin and Winch, JJ., concur.


text:
    EXECUTORS AND ADMINISTRATORS — QUIET TITLE
    [Cuyahoga (8th) Circuit Court,
    December 2, 1912.]
    Marvin, Winch and Niman, JJ.
    Augusta C. Lockwood et al. v. Grant T. Whitlesey, et al.
    1. Debtor Heir does not Inherit When His Debt Exceeds His Distributive Share.
    A debtor heir, who makes claim for distribution, is required to account to the estate for the debt he owes, the amount he is to' receive depending on the accounting, and when his indebtedness to the estate exceeds his distributive share in the estate, he inherits no interest in the real estate.
    2. Action to Quiet Title Against Claim of Debtor Heir Maintainable.
    When the distributive share of a debtor heir is less than the amount which he owes to the estate, an action to quiet title may be maintained by the other heirs to the real estate, to remove any cloud upon the title through the claim of the debtor heir or anyone claiming under' him.
    Error.

      Carpenter, Young & Stocker, for plaintiffs in error.

      Wing, Myler & Turney, for defendants in error.
   MARVIN, J.

This action was brought by the plaintiffs originally against Grant T. Whitlesey alone, the other defendants having been made such during the pendency of the suit.

The purpose of the action is to quiet the title of the plaintiffs in certain real estate described in the petition. This real estate was owned by Harriet T. Hanford at the time of her death, which occurred on May 19, 1910. She died intestate. Her only heirs at law were the plaintiffs and the defendant, Grant T. Whitlesey. The other defendants have no rights in this action except as they obtained the same through Grant T. Whitlesey. But for other facts to be hereinafter stated, the defendant Grant T. Whitlesey would have inherited from the said Harriet T. Hanford an undivided one-sixth part of the said real estate, the plaintiffs together inheriting the remaining five-sixths.

The plaintiffs were in possession of all of said real estate at the time the action was brought. When Mrs. Hanford died she left personal property out of which all her debts have been paid, so that the title of the plaintiffs is in nowise affected by any such debts.

At the time of the death of Harriet T. Hanford the defendant Grant T. Whitlesey was indebted to her in the aggregate sum of about $3,500, no part of which has ever been paid. If there be added to the value of the real estate described in the petition the amount of the indebtedness of Grant T. Whitlesey to her, and further added the amount of all her other property after the payment of her debts and the expense of administering her estate, and the amount thus ascertained be divided by 6, it will be found that the indebtedness of said Grant T. Whitlesey to the said decedent is more than his one-sixth part of the entire estate.

• Before the death of Harriet T. Hanford said Grant T. Whitlesey filed his petition for adjudication in bankruptcy in the United States district court of this district, and he was adjudged a bankrupt. He has never, however, been discharged in bankruptcy. His indebtedness to the decedent antedated his adjudication as a bankrupt, but as he was never discharged, that in no wise effects his rights, or the rights of those claiming under him in this proceeding. And that brings us to the question of whether he inherited any fractional part of this real estate.

He did inherit one-sixth of whatever estate the decedent left, and but for his indebtedness to her this would have given him a good title to an undivided one-sixth of this real estate, but having already received from her, as shown by his indebtedness, more than one-sixth of her estate, he inherited nothing in this real estate. That is the claim of the plaintiffs, and that we hold to be the law.

We have read with great interest the elaborate and learned opinion prepared by the judge of the court of common pleas who beard this case, and who reached a conclusion different from that which we reach, but we are constrained to hold that the conclusion reached is not sound. The question is made in the case that the effort on the part of the plaintiffs is to acquire a title to real estate and not to quiet a title which they already have. If what has already been said is true, this contention is not sound. When Harriet T. Hanford died somebody immediately became the owner of this real estate; somebody immediately had title to it. It is not essential to this proposition that all the facts should have been known at the time of her death which would fix this inherited title in particular persons, but whenever the facts became known which determined who the particular persons are to whom the title descended from the intestate, we then have the means of knowing who was entitled to hold and own this real estate. Those facts have become known and are as hereinbefore stated, that the plaintiffs together became the owners of five-sixths of all the estate which the intestate left, whether personal or real, and that the defendant, Grant T. Whitlesey, became the owner of one-sixth of all that estate, and that the defendant Grant T. Whitlesey had already received more than his one-sixth part of said estate and therefore took no estate in these lands. But the fact that he is an heir at law of the intestate, and that there had not been, prior to the bringing of this suit, any adjudication that his inheritance was all covered by the amount of his indebtedness to the decedent, constituted a cloud upon the title of the plaintiffs, which cloud it is the proper office of a suit to quiet title to remove.

Section 11901 G. C., reads:

"An action may be brought by a person in possession of real property against any person who claims an estate or interest therein adverse to him, for the purpose of determining such adverse estate or interest. ’ ’

Suppose that Grant T. Whitlesey had brought a suit in partition of these lands, the facts turning out to be such as they are here agreed to be. He would not have been entitled to a partition, because it would have turned out that he had no ownership in the lands; that he never had any ownership in the lands; not because he was not entitled to one-sixth of the estate of the intestate, but because he had already received that one-sixth; that is, that the indebtedness owing by him to the intestate must be accepted first by him on his fractional part of the entire estate, and since that indebtedness exceeded his entire one-sixth, he had no interest whatever in the real estate.

It would seem entirely unreasonable to say that he should be denied partition on the ground that he had no ownership in the property, and yet, those who have the entire ownership in the property, except only what the defendant Whitlesey had, might not maintain an action to quiet their title as against him. The court below took the position that upon the death of the intestate Grant T. Whitlesey became the owner of a one-sixth part of this land, and that this suit was to take from him that title and put it into the plaintiffs. That is not the purpose of the suit. The purpose of the suit is to have it determined that he never had an interest in the lands, and the facts establish that proposition.

Section 8586 G. C., treating of advancements, is in these words:

“If the amount of such advancement equals or exceeds the share of the heir to whom it was made, he shall be excluded from any further part in the division or distribution of the estate. ’ ’

In the case of Keever v. Hunter, 62 Ohio St. 616 [57 N. E; 454], the syllabus reads:

“When the lands ‘of an intestate descend to his children, there being no personal estate for distribution, the interest of each child in the lands is subject to his indebtedness to the intestate. ’ ’

And in the opinion Judge Shauck uses this language, at pages 618 and 619 :

“A proposition necessarily involved in the decision of the circuit court (which was reversed by the Supreme Court in the case now under consideration) is that in a case of this character a son who owes a debt which is payable, at all events occupies a better position than one who has received an advancement which is not payable otherwise than as it may serve to diminish his inheritance. The conclusion does not contribute to the equality of inheritance, which is made so prominent in the legislation and the decision of this state. It is not important whether, to secure equality in cases of this character, we adopt the doctrine of equitable set-off, as has been done by some courts, or, for that purpose, regard the debt as an advancement, as has been done by others. The ground of decision is that it is inequitable and at variance with the policy defined in our statutes to permit one to share in an estate which is diminished by his default and to the prejudice of those whose rights are equal to his. ’ ’

Judge Shauck then quotes the following language fx-om Woerner, Administration of Estates, Sec. 71:

‘ ‘ The distinction between debts owing by an heir and an advancement made to him by the intestate is sharply drawn; in some states debts so owing can not be deducted from the share of the heir in the real estate, and from the personal estate only by way of set-off, but the true principle seems to be that a debt owing by an heir constitutes part of the assets of the estate, as much as that of any other debtor, for which he should account before he. can be allowed to receive anything out of the other assets; and it is held so in the United States.”

To the same effect is the ease of Tobias v. Richardson, 26 O. C. C. 81 (5 N. S. 74), which is affirmed without report in 72 Ohio St. 626. The last clause of the syllabus in the circuit court reads:

“A debtor heir who makes claim for distribution is required to account to the estate for the debt he owes, and the amount he is to receive will depend upon the result of the accounting. If his debt is evidenced by promissory notes, they may, in a suit for partition, be regarded as advancements. ’ ’

We reach the conclusion, therefore, that the plaintiffs are entitled to a decree quieting their title as against all the defendants, and such decree will be entered in the case.

Winch and Niman, JJ., concur.


text:
    INSURANCE
    [Cuyahoga (8th) Circuit Court,
    November 20, 1912.]
    Marvin, Winch and Niman, Concur.
    Commercial Union Assurance Co. v. H. M. Weinberger.
    Performance of Condition as to Appraisal Prerequisite to Action on Policy of Insurance.
    When a policy of fire insurance provides that in case of disagreement as to the amount of loss, the amount shall be determined by arbitration, such provision makes the obtaining of an award, or at least an attempt in good faith to obtain an award, a condition precedent to a right of action on the policy; hence, in an action upon such policy the burden is upon the insured to show that he has, on his part performed, or offered to perform, the condition as to the appraisal.
    Error.

      G. W. Fuller and L. R, Canfield, for plaintiff in error.

      Hidy, Klein & Harris, for defendant in error.
   MARVIN, J.

Weinberger was plaintiff below and recovered a judgment against the Commercial Union Assurance Co., Ltd. of London, England, for loss by fire on goods covered by four policies of insurance issued by the company.

Each policy contained the following clauses:

“In the event of disagreement as to the amount of loss, the same shall, as above provided, be ascertained by two competent and disinterested apraisers, the insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire. The appraisers together shall then estimate and appraise the loss, stating separately sound value and damage, and failing to agree shall submit their difference to the umpire; and the award in writing of any two shall determine the amount of such loss; the parties thereto shall pay the appraiser respectively selected by them and shall bear equally the expenses of the appraisal and umpire.
“No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity, until after full compliance by the insured with all the foregoing requirements.
“This company shall not be held to have waived any provision or condition of this policy, or any forfeiture thereof, by any requirement, act or proceeding on its part relating to the appraisal or to any examination herein provided for; and the loss shall not become payable until sixty days after the notice, ascertainment, estimate and satisfactory proof of the loss herein required have been received by this company, including an award by appraisers when appraisal has been required.”

In its answer the defendant set up these clauses and averred that there was a disagreement between the parties as to the amount of loss under each of said policies by reason of said fire, and that there had been no appraisement of the same as required by said policies of insurance.

For a reply the plaintiff denied that there had been any disagreement between the plaintiff and the defendant as to the amount of such loss by fire, and says that never until the bringing of this suit did the defendant make any objection to the amount claimed, and that never until the filing of its answer did it deny or dispute the amount of loss sustained by reason of the fire, and as shown by the proof of loss filed. He admits that there has been no appraisal of the amount of the loss, and says that he repeatedly requested the defendant to submit to an appraisement, and that he selected an appraiser to act for him, and that he gave to- the defendant the name of said appraiser, and requested the defendant to select and name its appraiser, which it refused to select and name, and thereby waived any right to insist upon such appraisement.

An examination, of the evidence shows that the plaintiff employed as his agent one E. M. Lee, and he testified in regard to such employment in these words:

‘ ‘ Mr. Lee came out to see me several times; he would like to have my claim- to adjust, as he said I did not know how to go about it. He said he has been an experienced man in that line of business, so I let him adjust my claim.”

He was then asked: “You hired Mr. Lee to adjust your claim?” He answered: “Yes, sir.”

He was then asked: “Now, after that, did you have anything to do with the adjustment of the loss aside from doing whatever Mr. Lee directed you to do ? ” To which he answered: “Yes, sir.”

He clearly meant by this, “No sir,” for the next question is: ‘ ‘ That is what you did. ’ ’

And the answer is: “Whatever Mr. Lee told me, I done.”

And later on in his evidence he was asked: “What did Mr. Lee and the other gentleman do?” (referring here to the representative of the insurance company).

To this he answered: “I don’t know what he done: I turned the whole thing over to Mr. Lee and I didn’t pay any attention to it at all. ’ ’

It seems that the man to whom he referred as the other gentleman was Mr. C. F. Barnard, who was employed by the defendant to represent it in the adjustment of the loss had by Mr. Weinberger under the several policies on his stock of goods. He testifies that Mr. Lee came to his office, told him that he had been employed by Weinberger to make up his proofs of loss, as he called them, and render services to this man along these lines, adjusting the loss or making up his claim. He says he made an examination, of what remained and an estimate of what had probably been destroyed; that Lee came to him and presented him the proofs of loss, showing the loss to be in the aggregate $5,463. He says that before Mr. Lee presented him with this proof of loss he had numerous talks with him in which he told him that.it was perfectly apparent that there was a limited amount of stock and that it could hardly be possible, in his judgment of the ruins and condition of affairs, that there could have been as much in the fire as the goods that were taken out during the fire. He says that when the proofs of loss were brought to him by Mr. Lee he looked over the inventories and then, to quote his words:

“I told him that the amount of loss claimed was, in my opinion, absurd, and in the coui’se of these conversations expressed myself that the loss sustained over and above the stock saved in an undamaged condition could by no means amount to as much as $1,000. I remember using that figure, and stated to him that my judgment perhaps would indicate that it was rather less, than more than that amount.”

He says that in later conversations he had with Lee:

“I told him that I was entirely willing to discuss a compromise settlement if it came to that kind; I believe I went so far as to say that if he wanted to settle the claim inside of $1,000, it might be done. I told him that if he chose to compromise the ease on an amount in the neighborhood of $1,000 I might discuss it with him from that standpoint, basing that as the probable amount of the man’s loss.”

He says that he and Lee got together and tried to adjust and fix the amount of the loss. “He said that the proposition of compromise which I made, based upon my judgment of amount, could not and would not be accepted. ’ ’

He says that Lee said to him: “Why don’t you have this loss appraised and relieve yourself of the trouble of it.”

■ I said: “ Of course, when the proper time comes and when proper action is taken by these parties, that will be done, for the reason that I have no power, no disposition and no power particularly to waive or set aside the policy conditions along those lines. ’ ’

In answer to a question as to whether Mr. Lee or anybody representing the plaintiff ever suggested an appraisal to him, he said “No;” and in this connection this question was asked»him:

“Didn’t lie name to you Mr. J. J. Klein, a gentleman living on Buckeye road, as an appraiser of the plaintiff here?” To which he answered: “Never heard of the man before; there was no conversation relating to that sort of proposal at all so far as I recollect.”

He says that after the proofs of loss were filed Mr. Lee stated to him that that ended his connection with the case — the service of these proofs' of loss-which he did not make upon the company but left at his office. “He stated when he left the proofs at my office, that that ended his employment in that case. He stated he had got his money and .that ended the case so far as he was concerned.”

He stated that he never had any communication with Mr. Weinberger with reference to the matter; never saw him until the time of the trial.

For some reason Mr. Lee was not called as a witness in the ease. From the evidence that was produced, it seems perfectly clear that there was a disagreement between Mr. Barnard, the representative of the company, and Mr. Lee, whom the plaintiff says he employed to attend to the entire business for him, as to the amount of this loss; that therefore the provision of the policy to which attention has been called in reference to an appraisement, came into force; that the plaintiff made no effort to have an appraisement, but, as he says, because Lee told him there was nothing for him to do now but to sue, he brought this suit.

We think he brought his suit too soon. He should have given- notice for an appraisement under the clause of the policy quoted. Not having done that, he failed to sustain the burden which was upon him. We are not surprised that the trial judge felt, as he expressed in his opinion on the motion for a new trial, that if there was not another tribunal to review the record in the case, the court would feel constrained to grant a new trial. We have read the opinion of the court with decided interest, and with most of it we are in entire accord. We think the reasoning in the opinion clearly shows that a new trial should have been granted, because the verdict was not sustained by the evidence, and not sustained by the evidence because it showed that there was a disagreement between the parties as to the amount of loss, and failed to show that there had been any effort made by the plaintiff to have an arbitration.

That this suit was not maintainable under the facts as shown by the evidence hereinbefore pointed out, is fully sustained by the last utterance on the subject by the Supreme Court in the case of Graham v. German, American Ins. Co., 75 Ohio St. 374 [79 N. E. 930; 15 L. R. A. (N. S.) 1055; 9 Ann. Cas. 79].

In the policies under consideration in this ease, the same provisions for arbitration appear as in the case before us, and it is held that where disagreement arises as to the amount of the loss, under such policies:

“These policies plainly and definitely make the obtaining of an award or at least an attempt in good faith to obtain an award, a condition precedent to a right of action on the policy; and it is elementary that the obligation of taking the initiative or of showing an excuse for not doing so, is upon the party who has the affirmative in the action.”

The second paragraph of the syllabus reads:

“In such a policy the words ‘including an award by appraisers when appraisal is required,’ do not impose any obligation on the insurer to demand an appraisal; but in the event of a disagreement between the insurer and the insured as to the amount of the loss, an appraisal is required by the terms of the contract, and in a suit on the policy the burden lies upon the insured to show that he has, on his part, performed, or offered to perform, the condition as to the appraisal.”

In this case the evidence, as already pointed out, shows no attempt on the part of the plaintiff to obtain an award, nor is any excuse for failing to do so shown, and the court erred in refusing to direct a verdict for the defendant at the close of the plaintiff’s evidence, and again in refusing defendant’s motion to direct such verdict at the close of all the evidence, and again in overruling the motion of defendant for a new trial, on the ground that the verdict was against the weight of the evidence.

For these reasons the judgment is reversed and the case remanded.

Winch and Niman, JJ., concur.


text:
    DAMAGES
    [Cuyahoga (8th) Circuit Court,
    December 16, 1912.]
    Marvin, Winch and Meals, JJ.
    Davis Laundry & Cleaning Co. v. F. C. Whitmore.
    Measure of Damages for Failure to Take Entire Issue of Capital Stock.
    When there has been a breach of a contract for the purchase of all the capital stock of a corporation, the measure of damages to which the seller is entitled is the difference between the contract price and the market price of the stock at the time of the breach; and when there has been no acceptance of the stock or transfer of the same on the books of the company, the seller is not entitled to recover the full contract price.
    Error.

      Ford, Snyder <& Tilden, for plaintiff in error.

      Cook, McGowan & Foote, for defendant in error.
   MARVIN, J.

Whitmore, hereinafter spoken of as the plaintiff, brought suit against the Davis Laundry & Cleaning Co., hereinafter spoken of as the defendant, claiming to recover the sum of $11,700 as the' purchase price of 250 shares of the capital stock of the Ideal Laundry Co., a corporation which was doing a laundry business at the city of Lorain, Ohio, where it had a plant with machinery, delivery wagons, horses, etc., the plaintiff alleging that he had sold to the defendant said entire 250 shares, which was the entire capital stock of said the Ideal Laundry Co.

At the time that it is alleged the defendant purchased said stock, a writing was executed, signed by the defendant, reading :

“We agree to purchase 126 shares of Ideal Laundry stock for $5,500, and the balance of 124 shares at $50 per share from F. C. Whitmore.”

This was signed by an officer of the defendant, who, it was conceded in the record, was authorized to act for the defendant in the purchase of this stock.

This writing was dated January 11, 1910. 126 shares of this stock were owned by the plaintiff at the time of the execution of the writing. The remaining 124 shares were owned by other parties.

It will be noticed that the writing does not set out an entire contract, because there is no time fixed for the delivery of and payment for the stock, nor is any place for such delivery or payment fixed in the contract; but the evidence is that the place of delivery was fixed between the parties as the National Bank of Commerce, of Lorain, and that payment was there to be made for the stock.

On the part'of the plaintiff the evidence is that the plaintiff was to deliver this stock as soon as he could procure the shares of. which he was not the owner, which he said he would be able to do very soon.

On the part of the defendant the evidence is that the plaintiff agreed to deliver this stock within a very few days.

On or about February 1, 1910, the plaintiff deposited with the bank named 243 shares of the Ideal Laundry Co. ’s stock and notified the defendant of such deposit. The defendant then took possession of the plant of the Ideal company at Lorain and operated it until February 19, 1910. On said last named date the defendant notified the plaintiff that it would not take the stock and pay for it.

At that time the plaintiff was unable to deposit with the bank certificates for the remaining eight shares of stock, five of which shares were owned by one Truby, then residing in Chicago, and three owned by one Daniels, residing in Florida. The defendant knew that the plaintiff was endeavoring faithfully to secure these eight shares of stock.

On February 21, 1910, the plaintiff formally notified the defendant that 242 shares were on deposit at the bank and offered to furnish a bond for the delivery of the remaining 8 shares within ten days thereafter.

On February 28, 1910, the plaintiff had secured the remaining 8 shares of stock to be deposited with the bank, so that then the entire 250 shares were on deposit with the bank for delivery’ to the defendant upon its paying the agreed price therefor, and this fact was given to the defendant in writing by the plaintiff, and a demand was made for payment of the entire purchase price of the 250 shares. The defendant refused to accept and pay for the stock. The ease went to trial with the result that the plaintiff recovered a judgment for the entire agreed price for the 250 shares.

It is clear from the evidence that what the defendant desired, in entering into the contract, was that it should become the owner of all the property of the Ideal company, so that it might carry on the laundry business at the plant and with the facilities which the Ideal company theretofore had, and this fact was well known to the plaintiff, and each party acted'with this in view.

On the part of the defendant it is urged that the court erred in its charge to the jury in this:

“Now, gentlemen, if you should find under the rules I have given you, that the plaintiff had procured and had ready for delivery at the place of delivery, within a reasonable time, the entire output of the Ideal Laundry Co., to-wit, 250 shares, then he would be entitled to recover the contract price of whatever is set out in the petition, $11,700,- or whatever the amount is. ’ ’

In giving this charge to the jury we think there was error. We hold that if the defendant on February 19, notified the plaintiff that it would not accept this Stock, this being at a time when the plaintiff not only had not tendered delivery of the entire amount, but was unable to do so, -if the plaintiff was entitled to recover at all he was entitled to recover because of a breach of the contract on the part of the defendant, and.his measure of damages would be the amount which the contract price was in excess of the market value of the stock at the time of this breach, if the stock then had a market value less than the agreed contract price.

In support of the rule as to the measure of damages, attention is called to the following authorities:

In 35 Cyc., 592, the language of the text is:

‘ ‘ The general rule is that the measure of damages, when the buyer repudiates the contract and refuses to receive and accept the goods, is the difference between the contract price and the market value of the goods at the time and place of delivery, and not the full contract price of the goods. ’ ’

In support of this, the author cites a large number of cases,' one from Alabama, several from Arkansas, several from California, one from Connecticut, and others from Georgia, Illinois, Michigan, Missouri, Nebraska, New Hampshire, New York, Ohio, Pennsylvania, South Carolina, Tenneseee, Texas, and many others.

Among the authorities cited is Cullen v. Bimm, 37 Ohio St. 236, in the first clause of the syllabus of which the following-language is found:

“If a vendee refuses to accept personal property tendered in accordance with the terms of the contract of sale, he is liable in damages for the difference between the contract price and its market value.”

It is true, that the court says, in its opinion, “that whether the plaintiff could have held the price for the defendant and recover the contract price, is a question which we need not determine,” but they call attention to other cases in Ohio, among them Dayton, W. V. & X. Turnpike Co. v. Coy, 13 Ohio St. 84, where this language is used in the syllabus:

“Whether an action lies for the price of property sold instead of damages upon the refusal to receive the same, is doubted, for the seller would get the price and still hold the title; title will not pass without assent.”

They cite, also the case of Shawhan v. Van Nest, 25 Ohio St. 489. This was an action brought by one who furnished the materials and constructed a carriage for the defendant in accordance with his order and direction, for which a stipulated price was to be paid. The defendant refused to receive and pay for it. In that ease it was held that the defendant was liable for the contract price, and the reason is apparent, that the defendant had built especially for him a carriage; he had been put to expense of both labor and material for an article which might not be wanted by anybody else; built it especially for the defendant, it might very well be without market price, and so it was held that the defendant must pay the contract price.

But in the opinion the court calls attention to the distinction between the sale of ordinary property and the construction of a specific article upon a contract, and cites, with approval, the case of Gordon v. Norris, 49 N. H., 376, quoting from the syllabus the following language:

“Where the vendee refuses to receive and pay for ordinary goods, wares and merchandise, which he has contracted to purchase, the measure of damages which the vendor is entitled to recover is not ordinarily the contract price for the goods, but the difference between the contract price and the market value, or the value of the same goods at the time when the contract was broken.”

In the case of Andrews v. Watson, 12 Circ. Dec. 686, it is said:

‘ ‘ The measure of damages in an action to recover for the refusal of the purchaser of certain shares of stock, to pay for the same where there was no delivery of the stock or transfer on the books of the corporation, by delivery of the certificate thereof, or tender made prior to the commencement of the action, is the ■difference between the contract price and the market value of the same, and not the sum stipulated to be paid for the stock.”

The same case was reheard, and is reported in the same volume at page 692. The language used in the syllabus reads, in part:

“Where the purchaser repudiated the contract and thereby waived the straight performance thereof, the seller is entitled to recover the difference between the market value and the contract price as damages for the breach of the contract.”

This case is affirmed, no opinion. Andrews v. Watson, 51 Ohio St. 619.

In Sedgwick, Measure of Damages, 9th Ed., Sec. 753, this language is used:

“Where the title has not passed, the measure of damages is the difference between the contract and the market price of the article at the time and the place where it should have been accepted. ’ ’

In Benjamin, Sales, 7 Ed. See. 758, it is said:

“When the vendor has not transferred to the buyer the property in the goods which are the subject of the contract, as has been explained in Book 2, as where the agreement is for the sale of goods not specific, or of specific goods which are not in a deliverable state, or which are to be weighed or measured before delivery, the breach of the' buyer of his promise to accept and pay, can only affect the vendor by way of damages. The goods are still his; he may resell or not, at his pleasure, but his only action against the buyer is for damages for non-acceptance. He can in general only recover the damage that he has sustained in the fallen price of the goods.”

This and other authorities which are cited in the notes to the authorities from which we have quoted, justify, as we think, the conclusion reached as stated earlier in the opinion.

True, Williston, Sales, shows that the rule here adopted is by no means universal, and that there are very respectable authorities to the contrary. The sections quoted in the brief of the plaintiff, especially Sec. 565, are to the effect that the rule here adopted does not commend itself to the author, and has been rejected by many courts of the highest standing.

We are not prepared, however, to depart from the general rule, as stated in the authorities from which we have quoted.

Exception is taken to a number of the rulings on evidence by the court, which we have examined and find, as we think, no substantial error in any ruling, except rulings as shown at pages 79 and 80 of the bill of exceptions.

It must not be forgotten that the defendant took possession of the plant of the Ideal company and operated it from February 1 to 19, 1910, at a time when 242 shares of the capital stock had been deposited with the bank for the purpose of delivering it to the defendant. Because of this fact, it was urged on the part of the plaintiff that the defendant had accepted the partial performance by the plaintiff, either as showing that the defendant recognized that the plaintiff was duly performing, or as an acceptance of so much as had been deposited as a performance to so full an extent that the defendant would accept it and pay for the shares so deposited. In short, that because of the action of the defendant in taking charge of this business at Lo-rain, it relieved the plaintiff from full performance, and was bound to accept and pay for the 242 shares in any event, and to accept and pay for the entire 250 shares if the remaining • 8 shares should be produced within a reasonable time.

. A witness produced by the plaintiff, to-wit, B. H. Braun, was being cross-examined by counsel for the defendant. Braun had been in the employ of the Ideal company during the time that the plant was operated by the defendant. Braun was in its employ in the management of the laundry at Lorain, and was paid by that company. This had been shown as tending to show an acceptance by the Davis company. The Davis company discontinued the operation of the plant, as already said, on February 19, 1910, and this question was put to Braun on cross-examination :

“Q. After February 19, 1910, after the Davis Laundry Co. people left, from whom did you get your pay, after that time for your services at the laundry?”

This being upon a cross-examination, it was not required of counsel to state what answer he expected would be given. The rule in such ease is that any answer which would be competent may be presumed in favor of the party asking the question.

Suppose the answer to this question had been: “I received my pay from the Ideal Laundry Co.” It would tend to show that that company did not regard the ownership of the property as having passed out of its hands to the Davis company.

Further on he was asked, having stated that the plant was operated after February 19:

‘ ‘ Q. Who got the returns from it ? ”

Objection was sustained to this.

A competent answer would have been, “the Ideal Laundry Co. got the returns,” or “the plaintiff got the returns,” either of which .might tend to show what it is suggested the answer to the former question might have tended to show, or the answer to either of these questions might have been that the plaintiff received the returns.

Similar questions of the same land were asked of this witness, and an objection made by the plaintiff sustained, to which an exception was taken.

We think there was error in sustaining these objections. We think answers might have been given which would tend to weaken the claim made by the plaintiff that the defendant, by its action, had recognized that the contract was so far complete that it was bound by it, by tending to show that either the plaintiff or the Ideal company had not yielded up its ownership of the property.

Complaint is made that the court charged that the plaintiff was entitled to a reasonable time in which to procure and deliver the 250 shares of stock. »

We think that whether the agreement was that it should be delivered as soon as the plaintiff could get it together, or that it should be delivered in a few days, would have been fully complied with by delivery within a reasonable time, that is to say, plaintiff should have had a reasonable time to procure that stock which it was known to the defendant he did not own, and that he must obtain it from others. We find no error in that part of the charge.

The judgment is reversed for error in charging that the measure of damages to which the plaintiff was entitled was the contract price, and for error in ruling on evidence as herein pointed out.

Winch and Meals, JJ., concur.


author: MEALS, J.

text:
    ADVERSE POSSESSION — DEEDS
    [Cuyahoga (8th) Circuit Court,
    December 16, 1912.]
    Marvin, Winch and Meals, JJ.
    Cleveland Co-Op. Stove Co. v. Cleveland & P. Ry.
    1. Rule of Construction of Deeds as to Intention.
    A deed should be construed according to the intention of the parties, and if its language is clear and unambiguous and does not require construction, the court will loot only to the deed to ascertain the intention of the parties; but in case of doubt, the court may and should consider not only the language, but also the circumstances surrounding the transaction and the situation of the parties.
    2. Variance in Terms of Deeds and Plat of Lots Adjoining Railroad Right of Way Question for Jury.
    When in an action of ejectment from a strip of land ten feet wide adjoining a railroad right-of-way, it appears that the owners of a parcel of land, which was subject to a forty foot right-of-way allotted it, but the plat filed with the county recorder, through an error, described the right-of-way as sixty feet instead of forty, while deeds for lots sold recited that all lots are situated on the west line of the railroad right-of-way, the question of whether or not the grantors intended to include the ten feet when they deeded the lots is one for the jury.
    3. Adverse Title Acquired.
    When one remains in actual, visible, exclusive, hostile and continuous possession of land for a period of twenty-one years, he thereby acquires title to the land.
    Error.

      Henderson, Quail & Siddall, for plaintiff in error.

      Squire, Sanders & Dempsey, for defendant in error.
   MEALS, J.

This is an action by the Cleveland & Pittsburgh Ry. against the Cleveland Co-Op. Stove Co., to recover the possession of a ten foot strip of land abutting upon and parallelling its right-of-way on the westerly side thereof at or near its intersection with Central avenue, in this city.

In 1852 the railroad company owned a tract of land, including the strip in dispute, consisting of 8.78 acres. On February 23, 1852, it conveyed the entire tract to William V. Craw, save and except a forty foot strip on the easterly side thereof, which it reserved as a right-of-way.

The tract so conveyed remained intact until 1870, when William V. Craw caused it to be allotted and a plat thereof to be made and recorded. The plat, however, shows the railroad company’s right-of-way to be sixty feet in width instead of forty feet, as reserved in its deed to Craw. This was doubtless due to a mistake of the surveyor, for obviously it was Craw’s intention to allot his entire interest in the tract, and from anything that' appears upon the record, he lived and died supposing that this had been done.

The certificate attached to the plat contained the following language:

“This sheet contains an allotment made at the request of William V. Craw, of the south part of original lot Number 335, in East Cleveland, and bounded as follows:
“South by Quincy avenue, formerly Wade avenue, west by the east line of the Wilson Heirs’ lands; and northeast by the Cleveland and Pittsburgh Railroad grounds. ’ ’

This certificate also recites that Craw avenue (a street showing on the plat) is fifty feet in width and extends from Quincy street to the Cleveland & P. Ry.

On April 10, 1876, William V. Craw deeded the entire tract to James M. Craw, the land being described by metes and bounds as in the original deed from the railroad company, and with the same reservation. The deed recited that the above land has been subdivided into lots, and referred to the recorded plat. It also provided that the grantees should “fulfill all contracts heretofore made by the said William Y. Craw, and to deed the same in pursuance of contracts heretofore made by said grantor for lots in such subdivision to parties holding said contracts.”

By this deed William Y. Craw doubtless intended to and did convey his entire interest in the tract.

On the same day on which he received the deed from William Y. Craw, James M. Craw conveyed the property to Margaret W. Craw, wife of William V. Craw, using the same description and making the same reservation that was contained in the deed to him.

On February 3, 1879, Margaret W. Craw and William V. Craw, her husband, conveyed sublots numbers 1, 2, 3 and 4 of the Craw allotment to Lutz and Seelig, whose heirs and representatives, on May 17, 1881, conveyed the same to the Cleveland Co-Op. Stove Co. The description contained in the deed to the stove company was the same as that in the deed to Lutz and Seelig.

What land did the parties intend should be conveyed by the deed of Margaret W. Craw and her husband, William V. Craw, to Lutz and Seelig?

Margaret W. Craw owned to the railroad right-of-way. She might have limited the conveyance to the lands described by the plat, referred to in her deed, and reserved the ten foot strip lying between the lots conveyed by her deed and the railroad right-of-way, and clearly this would have been the effect of the deed had she been content to describe the lots by a reference to the plat only.

A deed, for a description of lands conveyed, may refer to another deed, or to a map, or to a plat, and the deed or map or plat to which reference is thus made, will be considered as incorporated in the deed itself. Develin, Real Estate, Sec. 1020.

This was the situation in the case of Cleveland & Pittsburgh Ry. v. National Safe & Lock Co., not reported, decided by this court in December, 1910, and from which this case is readily distinguishable.

On the other hand, Margaret W. Craw might have conveyed, by the same deed or a separate instrument, the lots as described by tbe plat, and also tbe ten foot strip in dispute between them and the railroad’s right-of-way, for she had the undoubted title to both.

What, then, was the intention of the parties to the transaction ? The description contained in the deed to Lutz and Seelig, referred to the plat for a description of the property and in addition recited that said “lots Numbers 1, 2, 3 and 4 are situated on the west line of Craw avenue and the Cleveland & P. Ry.” Three of the lots had no outlet except upon the railroad and the fourth had only a few feet of frontage on Craw avenue.

Lutz and Seelig owned and occupied, in carrying on a coal business, original city lots Numbers 218 and 219, immediately in front of sub-lots 1, 2, 3 and 4. It is easily conceivable that their purpose in purchasing these lots was to obtain a railroad outlet. The deed to them also contained this clause:

“This deed is made in pursuance of an agreement made by William Y. Craw and said Lutz and Seelig, and the possession given them (Lutz and Seelig) on the 1st day of April, 1873.”

Thus Margaret W. Craw was performing an agreement in respect of the lots, between William V. Craw and Lutz and Seelig, which, by the deed from William y. Craw to James M. Craw, and in turn by James M. Craw to her, she agreed to perform.

On May 17, 1881, the heirs and representatives of Lutz and Seelig deceased,, conveyed said lots numbers 218 and 219 and sublots numbers 1, 2, 3 and 4 to the Cleveland Co-Op. Stove Co. which company has ever since used the land in carrying on its business, including the ten foot strip in dispute, on which, or the greater part of which, it has piled and stored ashes, cinders, slag and moulding flasks.

From 1873, when Lutz and Seelig acquired possession of sublots 1, 2, 3 and 4 until the date of the deed to the stove company, they and their heirs and representatives assumed and held possession of, and exercised control and dominion over the ten foot strip in dispute, and nobody arose to question their right so to do. A fence was built and maintained on the westerly line of the railroad’s right-of-way, which with other fences, enclosed said strip as a part of their land, and by common consent Lutz and Seelig were the accredited owners not only of lots numbers 1, 2, 3 and 4, but the ten foot strip contiguous thereto. In fact, nobody distinguished between the two; all was regarded as theirs.

In 1900 somebody discovered the mistake which had been made in platting the property, whereupon on April 18, 1900, J. Odell procured a quit-claim deed of the ten foot strip in dispute from Margaret W. Craw, widow of William Y. Craw, deceased, and on November 9, 1900, by quit-claim deed, conveyed the same to the railroad company. It is on this deed that the railroad company rests its claim to the property.

In this situation the court instructed the jury that the record title to the property was in the railroad company, and submitted the stove company’s claim to the title to said strip by adverse possession, to the jury, who found that the right to the possession of the property was in the railroad company.

Counsel for the stove company contend that both the court and the jury erred, the court in instructing the jury that the' record title was in the railroad company, and the jury in finding that the stove company had not acquired title to the disputed strip by adverse possession. We believe both contentions to be well founded.

In our opinion, the court erred in finding from these facts as a matter of law, and so instructing the jury,-that the record title was in the railroad company. In arriving at this conclusion the court must have found, as a matter of law, that the reference to the plat in the description contained in the deed of Margaret W. Craw and William V. Craw, her husband, to Lutz and Seelig, was conclusive. This conclusion might have been tenable had the description in the deed referred only to the plat, and had the lots been described only by their numbers as they .appeared upon the plat; but this was not the case. The certificate attached to the plat certified that the alloted land was bounded on the northeast by the Cleveland & Pittsburgh Railroad, and here sub-lots Numbers 1, 2, 3 and 4 are situated, and the deed of Margaret W. Craw and William Y. Craw to Lutz and Seelig recited that “said sub-lots 1, 2, 3 and 4 are situated on the west line of Craw avenue and the Cleveland & P. Ry.” They doubtless owned to the railroad, and might have conveyed all their interest in the land up to the railroad right-of-way.

What, then, was the intention of the parties? What land was intended to bé conveyed by the deed to Lutz and Seelig?

A deed should be construed according to the intention of the parties, and if its language is clear and unambiguous, and does not require a construction, the court will look only to the deed to ascertain the intention of the parties; but in ease of doubt, the court may and should consider not only the language, but also the circumstances surrounding the transaction and the situation of the parties. Develin on Real Estate, Section 839.

In Beardsley v. Nashville, 64 Ark., 240, 243 [41 S. W. 853], it is said:

“A deed is to be construed according to the intention of the parties, as manifested by the entire instrument, although such construction may not comport with the language of a particular part of it. When a deed contains two descriptions of the land conveyed which are not consistent with each other, that description must control which best expresses the intention of the parties, as manifested by the whole instrument and the surrounding circumstances. ’ ’

In Snooks v. Wingifeld, 52 W. Va., 441, 446 [44 S. E. 277], the court quoted approvingly from Jones, Real Property, Sec. 339:

“The construction of the terms used in a deed, aside from extrinsic evidence, is for the court. The question of the application of a' description to its proper subject-matter is for the jury, who may have the aid of all competent extrinsic evidence. The question of the identity of the location is always one of fact for the jury.”

Again, in the same opinion, the court say:'

“Parol evidence is admissible to apply the description to the parcel intended to be conveyed. When the terms used in the deed leave it uncertain what property was intended to be embraced, in it, such evidence can not be used to enlarge the scope of the descriptive words, but only to fit them to the lands intended to be described.”

In Sharp v. Thompson, 100 Ill., 447 [39 Am. Rep. 61], it is said:

“The mortgage under consideration described the sevéral lots conveyed by number, with the additional clause ‘being all of Block 25.’ Block 25 did not contain the lots mentioned in'the deed, but they were in another block. It appearing, however, that it was the intention of the mortgagor to mortgage the block in which he resided, and that he resided in Block 25, it was held that Block 25 was, and the lots named were not subject to the mortgage. ’ ’

In Park Commissioners v. Taylor, 133 la., 453 [108 N. W. 927], it is said:

“Where a conveyance describes certain lots with reference to a plat, then the plat, for the purpose of the description, becomes part of the conveyance, and where the plat describes the lots as extending to a navigable stream, such stream constitutes an identified monument which will control the distance indicated by the figures of the plat and the owner takes the land to high water mark.”

Where the meaning of the description contained in a deed is doubtful, evidence as to the acts of the parties may be admitted to show the intent, and generally in the construction of every doubtful and ambiguous deed, the intent can not be obtained by the application of one rule alone; all should be considered and to each should be given the proper weight. 2 Develin, Real Estate, See. 840.

In Salsbury v. Andrews, 36 Mass. (19 Pick.), 250, the language of Mr. Chief Justice Shaw is peculiarly pertinent as illustrating the manner to be adopted in arriving at the intent of the parties:

“The same individual owning two tenements adjoining, may carve out and sell any portion that he pleases, and the terms of the grant, as they can be learned, either by words clearly expressed, or by just and sound construction, will regulate and measure the rights of the grantee. In construing the words of such a grant, where the wording is doubtful or ambiguous, several rules are applicable, all however designed to aid in ascertaining what was the intent of the parties, such intent, when ascertained being the governing principle of construction.
“And first, as the language of the deed is the language of the grantor, the rule is that all doubtfulwords shall be construed most strongly against the grantor, and most favorably and beneficially for the grantee. Again, every provision, clause and word in the same instrument shall be taken into consideration in ascertaining the meaning of the parties, whether words of grant, of covenant or description, or words of qualification, restraint, exception or explanation. Again, every word shall be presumed to have been used for some purpose, and shall be deemed to have some force and effect, if it can have. And further, although parol evidence is not admissible to prove that the parties intended something different from that which the written language expresses, or which may be the legal inference and conclusion to be drawn from it, yet it is always competent to give in evidence existing circumstances, such as the actual condition and situation of the land, buildings, passages, water-courses, and other local objects, in order to give a definite meaning to language used in the deed, and to show the sense in which particular words were properly used by the parties, especially in matters of description.”

Therefore, under the facts of this ease as disclosed by the record, we think the court should have submitted the question of the application of the description contained in the deed of Margaret W. and William Y. Craw to Lutz and Seelig, and from them to the stove company, to its proper subject-matter, to the jury. Not to have done so, we think, was error.

Now briefly, on the question of whether or not under the facts disclosed by the record, to some of which attention has been called, the stove company acquired title to the disputed strip by what is known in the law as adverse possession.

From May 17, 1881, until January 20, 1903, when this action was brought, the stove company, without let or hindrance of anybody, occupied and used the strip in conjunction with sub-lots Numbers 1, 2, 3 and 4, to store ashes, cinders, slag and moulding flasks. During all of this time the land was enclosed by fences. Nobody attempted to interfere with or interrupt the stove company's possession of the land and during all of these years its possession was actual, visible, exclusive, hostile and continuous.

In Yetzer v. Thoman, 17 Ohio St. 130, the court said:

“We think that under our statute of limitations, if a party establish in himself or in connection with those under whom he claims an actual, notorious, continuous and exclusive possession of land for a period of twenty-one years, he thereby, except as to persons under disability, acquires a title to the land; and this is irrespective of any question of motive or mistake.”

Later in the opinion the court further said:

“It seems to us that the correct doctrine on this subject is laid down by the Supreme Court of Errors of Connecticut, in French v. Pearce, 8 Conn., 439 [21 Am. Dec. 680], and except that the period of limitation prescribed by the statute of that state is fifteen years instead of twenty-one, as in Ohio, what was said in that case is as applicable in cases arising under our statute as it was to the case before that court. In that case the court says: ‘ The possession alone, and the qualities immediately attached to it, are regarded. If he intends a wrongful disseizin, his actual possession for fifteen years gives him a title; or if he occupies what he believes to be his own, a similar possession gives him title. Into the recesses of his mind, his motives or purposes, his guilt or innocence, no inquiry is made. It is for this obvious reason that it is the visible and adverse possession, with an intention to possess, that constitutes its adverse character, and not the remote views or belief of the possessor. ’ ’ ’

In McAllister v. Hartzell, 60 Ohio St. 69, this doctrine is affirmed, and in that ease the court announced the further rule that “Where the statute of limitations is interposed in an action of ejectment, and it is shown that the original seizure was a disseizin, any subsequent act or declaration of the claimant, or his predecessor in title which does not estop the claimant to plead the statute, nor suspend the right of the holder of the title to prosecute an action to recover possession, will not be sufficient to arrest the running of the statute. Neither a mere offer to buy within the twenty-one ^ears, nor an acknowledgement by the claimant within that time that the title is in another, or that the claimant does not own the land, will have that effect. ’ ’

Reference is made to this rule for the reason that the railroad company offered in evidence at the trial a contract between it and the stove company, made March 25, 1901, for the building of a switch from the railroad company’s tracks into and upon the stove company’s land, by the terms of which each was to bear the expense of building on its own land. In the plat, which was prepared by the railroad company and approved by the stove company, the ten foot strip was included in the railroad company’s land, and this fact was apparently overlooked by the stove company and was not called to its attention.

By the act of giving its approval to this plat, the railroad company claims that the stove company relinquished .whatever right or claim which it had to the title to the land by adverse possession. In the light of the above doctrine, however, we are unable to see the logic of this contention.

Without further reviewing the facts as disclosed by the record, we are of the opinion that the claim of the stove company to title to the disputed strip by adverse possession, regardless of the state of the record title, was clearly established, and that the verdict of the jury to the contrary was against the weight of the evidence.

Accordingly the judgment of the court of common pleas is reversed and the cause remanded for further proceedings according to law.

Marvin and Winch, JJ., concur.


author: WINCH, J.

text:
    ASSESSMENTS — MUNICIPAL CORPORATIONS— STATUTES
    [Cuyakoga (8th) Circuit Court,
    December 30, 1912.]
    Marvin, Winch and Meals, JJ.
    Anna M. Stuart v. Lakewood (Vil.) et al.
    1. Construction of Municipal Code of 1902 as to Times of Taking Effect.
    When an act providing a new form of government for municipalities provided that, for the purpose of carrying into effect the powers and duties conferred and imposed upon present councils, the act should take effect at a certain date and for all other purposes, including the repeal of existing laws, at a later date, the powers and duties referred to are new powers and duties conferred and imposed by the act and not new methods or a different manner of exercising powers and duties previously conferred : hence, a special assessment, levied after the first mentioned date and before the last mentioned date, will be enjoined to the extent that it exceeds the limit allowed for such assessments by the pre-existing laws.
    2. Additional Assessment to Complete Street Improvement Controlled by Act Governing Original Assessment.
    An additional assessment, levied under Sec. 2300 R. S. (Sec. 3909 G. C.), to complete an improvement for which the original assessment proved insufficient, is an incident of the original assessment and governed by the law in force when the improvement proceedings were begun.
    Error.

      Thompson, Sine & Flory, for plaintiff in error.

      T. J. Boss and J. A. Cline, for defendant in error.
   WINCH, J.

This action was brought to enjoin the collection of certain special assessments levied upon the premises of plaintiff, located in the village, now city of Lakewood, and was tried upon an agreed statement of facts.

Plaintiff’s petition contains five causes of action and the trial court found against the plaintiff upon all of them.

This court is requested to review the decision of the trial court only with respect to the fourth and fifth causes of action.

The fourth cause of action is upon an assessment levied to pay for an improvement provided for under an ordinance adopted December 29, 1902, the assessment ordinances proper not being adopted until July 6 and August 16, 1903.

The situation is complicated by the adoption of the municipal code on October 22, 1902. If the act of 1902 applies, the assessment complained of in the fourth cause of action is illegal, because it violated Sec. 53 of that act, which provides that in no case shall there be levied upon any lot or parcel of land in the corporation any assessment or assessments for any or all purposes within a period of five years exceeding 33 per cent, of the tax value thereof.

If the act of 1902 does not apply, then part of this assessment is illegal, because it exceeds, by $175.49, twenty-five per cent, of the actual value of the premises, as provided by Sec. 2264a E. S., which was in force until the act of 1902 took effect. Toledo v. Marlow, 28 O. C. C., 298 (8 N. S. 121); affirmed no opinion, Toledo v. Marlow, 75 Ohio St. 574.

Part of the act of 1902 took effect November 15, 1902, and the remainder did not take effect until the first Monday in May, 1903. The proceedings here involved were commenced between the said dates on December 29, 1902.

Section 231 of the act of 1902 provides:

“For the purpose of carrying into effect the powers and duties conferred and imposed upon present councils, boards of legislation, or other legislative bodies, by the provisions of this act, and for the purpose of conducting the first election, to be held in every municipality hereunder, and of preparing for the change in the organization of municipalities herein provided for, this act shall take effect from and after the fifteenth day of November, 1902; and for all other purposes this act, and every portion of the same, including the repeal of existing laws, shall take effect on the first Monday in May, 1908, and the following sections of the Eevised Statutes of Ohio are hereby repealed.”

The “powers and duties conferred and imposed upon present councils, boards of legislation, or other legislative bodies, by the provisions of this act,” must refer to new powers and duties conferred and imposed by the act (and there were many such) and'not to a different manner or method of exercising powers and duties.

The power to levy special assessments and the duty to levy them, when necessary, was conferred and imposed upon city councils many years before the act of 1902 was adopted; Sec. 53 of the act merely placed a different limitation upon the amount of such levies than had previously been the rule under Sec. 2264a E. S. That section was one of the “existing laws,” mentioned in said Sec. 231, the repeal of which should not take effect until the first Monday in May, 1903. It was therefore in effect on December 29, 1902, when these improvement proceedings were begun and under it the assessment complained of in the. fourth cause of action is excessive to the extent only of $175.49, and the collection of that amount should be enjoined.

We do not understand that it is claimed that plaintiff signed any petition for this improvement which would bar her right to this relief.

The assessment complained of in the fifth cause of action is one levied after 1902, to make up a deficiency in an assessment levied to pay for improvements made before 1902.

The municipality claims the right to make this assessment under Sec. 2300 E. S. (See. 3909 G. C.), which was specifically retained in full force and effect by See. 94 of the act of 1902. Said Sec. 2300 (3909) reads as follows:

“If an assessment proves insufficient to pay for the improvement and expenses incident thereto, the council may, under the limitations prescribed for such assessments, make an additional pro rata assessment to supply such deficiency; and in case a. larger amount is collected than is necessary, the same shall be returned to the person from whom it is collected in proportion to the amounts collected from such persons respectively; but this, section shall be subject to the limitations contained in other sections of this chapter. ’ ’

The original assessment being governed by the limitations of the law in force before 1902, and the improvement proceedings having been begun before that year, the right to collect an additional assessment for the same improvement must be governed by the law in force when the improvement proceedings were begun. The additional assessment is an incident only of the original proceeding.

The argument that the theory of construing all assessments by the law in force when the proceedings for improvement were begun works out a hardship when the additional assessment is made, perhaps several years after change in ownership has occurred, has no force in this case, for no such change in ownership has occurred, and, we apprehend, a person buying property on a street with improvements is bound to know the law and can inquire at the proper place for information as to whether all improvements on the street have been paid for in full.

There was no illegality in the assessment complained of in the fifth cause of action.

For the reasons stated, the judgment of the common pleas court is modified so as to enjoin the collection of $175.49 of the assessment mentioned in the fourth cause of action, and in all other- respects the judgment of the common pleas court is affirmed.

Marvin and Meals, JJ., concur.