author: PARKER, J.

text:
    MALICIOUS PROSECUTION.
    [Lucas (6th) Circuit Court,
    June 20, 1902.]
    Parker, Haynes and Hull, JJ.
    Henry C. Eihlert v. William Gommoll.
    1. Advice oe learned Counsel — Complete Defense.
    Advice of counsel learned in the law and reputable, given upon full information as to the facts involved, is a complete defense to an action for malicious prosecution for an arrest made in good faith upon the strength of such advice.
    2. Evidence of Reputation and Standing.
    Evidence that plaintiff, in an action for malicious prosecution, was a man of fair reputation and good standing in the community, though in reference to matter occurring after the alleged malicious prosecution, is admissible, as well as evidence tending to show impairment of reputation by the prosecution.
    3. Advice of Counsel — Defense—Should be Pleaded.
    In an action for malicious prosecution, the matter of advice of counsel, to be available should be pleaded as an affirmative defense, but where no objection is made to the introduction of evidence upon that ground, all being heard, considered and submitted to the jury and the jury charged as to the law relating thereto, the absence of such defense in the pleading is immaterial.
    James M. & W. F. Brown and Clem Wagner, for plaintiff in error.
    Frank I. Isbel and F. M. Sala, for defendant in error.
    Heard ON Error.
   PARKER, J.

In the court below this was a civil action for damages on account of alleged malicious prosecution, the plaintiff below being William Gommoll and the defendant below being Henry A. C. Eihlert. The trial resulted in a verdict in favor of the plaintiff below for about $400. Motion for a new trial was made, upon various grounds, which was overruled and judgment was entered upon the verdict. Defendant below prosecutes error and insists that the verdict is against the weight of the evidence. He also contends that there was error upon the trial in the admission and rejection of evidence and in the charge of the court, and in the refusal of the court to charge certain propositions. I will say, in passing, that we do not find in the bill of exceptions any requests to charge, either before or after argument, which were refused by the court.

The history of the matter out of which this suit develops, briefly stated, is this: The father of William Gommoll was the father of a number of small children. Complaint was made in the probate court of this county of his treatment of his small children ; that he was cruel; and as the result of a proceeding in that court, Henry A. C. Eihlert was appointed guardian of these children. It appears that the hearing, or at some hearing in that court, the father being desirous to take the children home and not be deprived of their custody by the guardian, and the son, William Gommoll, also desiring that this might be accomplished, William promised the guardian and the court that if his father might be permitted to take the children home and have their custody, he would undertake to see to it that they were well and properly treated; and in pursuance of that promise and arrangement, the father was permitted to retain the custody of his children. Subsequently, other complaints were made, which came to the attention of the guardian, of further cruelty on the part of the father toward the children, whereupon the guardian, Eihlert, went to the residence of the father and undertook to possess himself, of the children. His application for the children denied by the father and the efforts that he and the officer made to obtain the custody of the children were resisted by the father, although the parties did not come to-any'actual conflict and he '.was obliged to go away without the children and resort to other measures to obtain possession of them.

On this occasion the son, William Gommoll, was present, and his attitude towards the parties was such as to make Mr. Eihlert feel that he was aiding, abetting, encouraging and sustaining his father in his resistance to the application of Mr. Eihlert for the custody of the children* Of their conduct on these occasions, Mr. Eihlert made complaint to Probate Judge Millard; and he contends and testifies that he truthfully and fully stated all of the facts of these incidents to Judge Millard and appealed to him for advice as to how he should proceed, and he testifies that he was advised by Judge Millard — who, it appears, was a reputable lawyer and who had been long in the practice of law before he became probate judge — to have these parties arrested as well as to take proper measures to obtain the custody of the children. He testifies that, proceeding upon this advice, which he regaredd as valuable and safe, he filed ah affidavit in one of the city courts, the affidavit being drawn by the clerk of that court, charging the father and son with having secreted these children and kept them from the custody of their lawful guardian in violation of a penal statute.

It appears that the father and son were arrested upon this charge and were imprisoned and kept some time in custody, and the final result of the prosecution was that they were discharged; whereupon William Gommoll, the son, began this suit against Mr. Eihlert, charging him with having prosecuted him maliciously and without probable cause,, and asking for damages.

I Have spoken particularly of the incident of Mr. Eihlert going to Judge Millard for counsel, for upon that turns one of the important questions in this case. In his testimony, at page 82 of the record, Mr. Eihlert testifies, after relating the incident of going to the house and trying to obtain custody of the, children and after relating that he had come back to the office of Judge Millard, as follows :

“ And when I seen, or we seen we could not get possession of the children, I went back and told Judge Millard that the children, my wards, had been mistreated and abused and that I had went out and asked both the old man and his son William to give me the children and that they had refused to do so, and I asked him * * * I told him I heard the old man hid the. girl. * * * I told the judge at that time, of course, that he had locked the door and would not let me have the children. And Judge Millard informed me, and by the way I know him as a good attorney and high standing, and he has been probate judge of this county for many years, I asked him for his valuable advice» what to do in the case; he said to me, ‘ Why, have them arrested, first, then go and get the children.’”

Farther along he testifies more fully as to the information he gave to Judge Millard, and he testifies in substance that he informed him fully as to all the facts and that he received this advice, — really as he states it, received this instruction — this direction, — from Judge Millard as to his duties and about how he ought to proceed, as to what he was justified in doing aud what he was bound in duty to do.

Judge Millard was called as a witness by the plaintiff below, and although, to some categorical questions, he answered that he did not so advise, yet the form of the questions were such that the judge might well so testify and yet his testimony might be entirely consistent with that of the defendant below upon this point; and upon the full examination of Judge Millard, taking the substance of all his testimony both direct and by the way of cross-examination, it cannot be said fairly that he denied having given such advice in this transaction, though as to the precise fact of advising it he says that his recollection is very much at fault, at least that it is not clear or certain.

As the testimony stood, however, certain questions of fact were to be submitted to the jury i. e. whether the defendant below, — the plaintiff in error, — had gone to Judge Millard, in good faith, to find out what he might do, or what he ought to do, in the premises; whether he had truthfully and fairly stated all the facts to Judge Millard; whether he had received this advice from Judge Millard, and whether he had proceeded upon the faith of it.

And because of that issue a question of law is involved here, i. e. what instruction should have been given to the jury by the trial judge as to their duty in the premises in the event that they should find that the story of the defendant below in this respect was true. Upon that point the trial judge charged the jury as follows:

“ Mr. Eihlert brings into this case a proper fact and submits it to the consideration of the jury. And that is his conduct relative to his having consulted Judge Millard in regard to this matter. It is the law that if a man, before he has a warrant issued for the arrest of another, goes to a lawyer, some one learned in the law, and lays before him all the facts and takes his advice as to whether the man has been guilty of a crime that he describes, or not, that fact may be considered by the jury, and is held by some courts to be a complete defense; by others, not; but it may be considered by the jury, as tending to show that he has reasonable and probable cause upon which to act, and as tending to rebut any malice that may have been alleged and attempted to be proven in the case. A man is not authorized to consult an attorney and withhold from him the real facts, or distort the facts, or tell him part of the facts, then secure his advice and act upon it, and then undertake. to shield himself behind that. In order to protect himself by consulting an attorney or any one learned in the law, it is his duty to make known to the party that he consults all the facts in the case, in order that he may advise him correctly, because he may not advise him correctly, if he does not know all the facts. So it is a question in this case for the jury to consider what Mr. Eihlert did with reference to consulting Judge Millard, and to what extent he disclosed the facts to Judge Millard; to what extent he was advised by Judge Millard to do as he did in the case.”

Now it will be observed that while the trial judge stated to the jury that it is the law in some jurisdictions — the law as laid down by some courts — that these facts testified to by plaintiff in error would be a complete defense, he proceeds to lay down as the law of this case, in effect, that it is not a complete defense, but that “it may be considered by the jury as tending to show that he has reasonable and probable cause upon which to act and as tending to rebut any malice that may have been alleged and attempted to be proven in the case.”

And that is all the construction he authorizes the jury to give to these facts, if they find them to be as stated by the defendant below.

In this we think tlie learned judge was in error. We think it is the law of this state, that where it is shown that the prosecutor in good faith sought, obtained and proceeded upon the faith of the advice of counsel learned in the law, especially where such counsel is a judge of a court having certain responsibilities and certain duties in the premises, without any additional facts having been brought to his attention after he had received the advice that would tend to qualify it or qualify the facts upon which the advice was given, such advice is a complete justification; that it is a complete defense; that it is not merely evidence to be considered by the jury as tending to show that he had reasonable and probable cause upon which to act and as tending to rebut any malice that may have been alleged or shown in the case.

Some authorities on this question are collected in 4 Wait Act. and Def. 854, 855, and I will read a part of these :

“The defendant may also rebut the presumption of malice by showing that he acted under the advice of counsel. If the defendant communicated to counsel all the facts bearing upon the guilt or innocence of the accused of which he had knowledge, or could by reasonable diligence have ascertained, and, acting under the advice of such counsel, procures the accused to be indicted, he may plead the advice thus given as a defense in an action for malicious prosecution. ”

■To this there are quite a large number of authorities cited.

“ The fact that the defendant sought, received and acted upon the advice of counsel affords strong evidence that there was probable cause and that the prosecution was entered into in good faith and without malice.”

“ While an honest reliance on the advice of counsel, who has been fully informed of the facts, may be a complete justification in an action for malicious prosecution, the advice of a lawyer who is a pettifogger will be no justification. * * * And a reliance upon the advice of a person who is not a counselor or attorney at law is incompetent to disprove malice.”

And more to the same effect. Now it is true, as stated by the judge in the court below, that in some jurisdictions it is held that the advice of counsel goes no farther towards protection of the defendant in a case of this character than is stated in the rule laid down by the judge in his charge to the jury. It is said in the same book,.at page 355 :

“ Under the Georgia code the advice of counsel is not in itself a protection to the defendant in this action; yet, evidence of the fact may be submitted to the jury as a circumstance tending to show a want of malice, the existence cf probable cause, and a mitigation of damages.”

And that is the rule in some other jurisdictions. It is important, of course, to inquire what the law is in Ohio upon the subject, and to that end we will call attention to certain decisions, most of which have been cited by counsel upon one side or the other in the hearing of this case.

The first is Ash v. Marlow, 20 Ohio, 119. This does not give much assistance upon the precise point involved here. The fourth clause of the syllabus reads:

“ If the defendant, in an action for malicious prosecution, would take shelter under the ‘ advice of counsel,’ he must be prepared to show that he communicated to such counsel all the facts bearing upon the guilt or innocence of the accused, of which he had knowledge, or by reasonable diligence could have ascertained.”

The effect of such’ advice is not stated; that question was not involved there.

In White v. Tucker, 16 Ohio St. 468, the second section of the syllabus is as follows:

“ On the trial of such action the defendant may prove, as a part of the transaction complained of, tending to rebut malice and to mitigate damages, that, at the time he made the complaint against the plaintiff, he stated to the magistrate all the facts upon which it was based, and that, upon his assurance that such facts constituted the crime charged in the affidavit, he instituted the prosecution in question.”

There the facts were not stated to nor the advice given by an attorney at law, but the advice was given by a magistrate, and the extent of protection afforded by the advice of a magistrate is laid down in that case. Reading from the opinion by Judge Day, at page 470, we find this:

“ As to the first proposition, it may be remarked that, although the evidence might not be admissible, conformably to the general principle that the defendant may prove that he proceeded in good faith, upon the advice of counsel, thereby showing probable cause; still,upon the question of malice and of the mitigation of damages, it was pertinent and relevant.”

Showing that the Supreme Court at that time and in that case recognized the distinction, the wide difference between the stating of facts to a magistrate and proceeding upon his advice, and the stating of facts to a counselor at law and proceeding upon his advice, and that the court recognized the “ general principle ” that “ the defendant may prove that he proceeded in good faith, upon the advice of counsel, thereby showing probable cause. ”

In Lamprecht v. Crane, 5 Dec. 753 (4 Bull. 1107), we find a per curiam, by the Supreme Court in an unreported case, consisting of seven different propositions. I read the sixth, as introductory to the seventh, and the seventh is applicable here:

“6. And for prosecuting such proceeding .in such court, maliciously and without probable cause, an action for malicious prosecution will lie,
“7. Where a prosecution is sought to be, justified on the ground of advice of counsel, it is incumbent on the prosecutor to show that all the facts material to the prosecution known to him, or which might have been ascertained by reasonable diligence, were communicated to counsel.”

A negative recognition of the rule.

In Nigh v. Keifer, 3 Circ. Dec. 1 (5 R. 1), the court being composed of Judges Shauck, Shearer and Stewart, of the second circuit, the opinion of Judge Shearer cites with approval and as being in harmony with the law of Ohio, certain decisions of other states bearing upon the case. I read from his opinion at page 3:

“ The court below assumed that a full- and fair statement had been made in good faith, and that the advice received thereon had been acted upon in good faith; and that all that was testified by Keifer and his attorney in that behalf was true. There, we think, the court below made a mistake.
“ The jury under the rule in Ohio, had the right and the exclusive right to pass upon the credibility of Keifer and his attorney. They had the right, also, to say whether Keifer was actuated by proper motives, and acted in good faith.”

“In Ames v. Snider, 69 Ill. 376, it was held:

“ ‘That where a party consults with competent legal counsel, in good faith, to ascertain what course to pursue in reference to acts done by another, and such counsel, after proper deliberation and examination into the facts, advises an arrest for a criminal offense, the party causing the arrest shall not be held to respond in damages for this action, notwithstanding it may appear on the trial the party accused was not guilty. But the advice must be sought i?i good faith, and the party must make a full and honest statement of the facts to counsel.’ To the same effect are Wicker v. Hotchkiss, 62 Ill. 107, and 43 Ind. 78. This, we think, is a fair statement of the rule, and not in conflict with Ash v. Marlow, 20 Ohio, 119. In that case it is said that ‘probable cause’ is a m:' ert question of law and fact, and if the facts are contested the court m i. leave them to the jury with instructions as to what is ‘probable cause.” ’

The error of the court in Nigh v. Keifer, supra, consisted in not submitting to the jury the questions whether the client had fully and fairly stated all the facts to his counsel and whether he had proceeded in good faith upon the advice of counsel. The court excluded those questions from the jury, but the decision, it will be observed, recognized the rule as we have stated it, to be the true rule k: 'fWr\

We are cited by counsel to Britton v. Granger, 7 Circ. Dec. 182 (13 R. 281), where the real question was as to whether the statement had been made to counsel and the advice given by counsel, before or after the prosecution alleged to have been a malicious prosecution was instituted. In that case, a police officer finding a person in the commission of what he deemed to be a violation of a criminal law, arrested him on view. He then went to the prosecuting officer of the city of Cleveland, Judge Fiedler, a duly licensed practitioner of the law,-and stated the facts to him and asked for his advice, and upon his advice filed an affidavit charging the person he had arrested with the crime. Upon trial the person was found to be not guilty. Thereupon he instituted a suit for malicious prosecution against the police officer. The police officer undertook to interpose as a defense the advice he had received from counsel and submitted a charge to the court, which we conceive did not go as far as he might have asked the court to charge; the charge was substantially that given by the learned judge in the court below in this case,' but the court below refused to give it. He proceeded to charge that in a proper case, where the facts were perfectly stated to counsel and the client proceeded upon the advice of counsel, his action is justified thereby, which we understand to be the law; but he charged further, that the arrest having been made before the advice was sought or given, that the rule had no application; that the prosecution was begun before the advice was sought or given, and that therefore this testimony as to having taken the advice of an attorney was only admissible upon the question of malice or good faith and was not admissible as tending to establish a defense or justification; and with respect to that ruling the circuit court held that the common pleas court was in error; that the prosecution was not in fact begun until the affidavit was made and filed; that the filing of the affidavit was the beginning of the prosecution. So it .will be seen that that case is not of much value to us in the case at bar.

On account of this error in the charge, which is certainly very material and prejudicial, the judgment will have to be reversed and the case remanded for a new trial.

It is true that in this case the matter of advice of counsel is not pleaded as a defense, but no objection was made to the introduction of evidence on that ground. The evidence was all heard, all considered, all submitted to the jury, and fhe court undertook to charge the law upon the question, and therefore, the absence of the matter in the pleading was immaterial. We think, however, that it is the better practice, perhaps necessary in a case of this kind, if objection should be made to the introduction of the testimony, to plead the matter as an affirmative defense.

Various other matters occurred upon the trial that are complained of by counsel for plaintiff in error, one matter being that there was some evidence of the occupation and standing of the plaintiff below, tending to show that he was a man of fair reputation in the community in good standing. We see no error in that notwithstanding it was in respect to a matter occurring after the alleged malicious prosecution. If, on the other hand> he had undertaken to show an impairment of reputation by reason of the malicious prosecution, we think that as well would have been admissible. Neither are we prepared to say that the verdict was against the weight of the evidence. We have very serious doubts as to whether this verdict is right, as to whether it is just, as to whether it is justifiable, but as the case must go back to be retried we go no farther than to say that we entertain very serious doubts on that question ; but it may appear differently if the case comes before us again. We find no other errors in the record; but solely on account of the error that we have pointed out in the charge, the judgment of the court will be reversed and the case remanded.


source: Caselaw Access Project

author: PARKER, J

license: Public Domain

text:
    INSURANCE — ACCIDENT.
    [Lucas (6th) Circuit Court,
    July 1, 1902.]
    Parker, Haynes and Hull, JJ.
    North American Accident Insurance Co. v. Franklin D. Sickles.
    1. Accident Insurance — Rule as to Defense oe Fraud.
    In an action upon an accident policy in which the insurance company raises the defense, under Sec. 3265, Rev. Stat., that the answers were wilfully false and fraudulently made, were material to the risk and induced the company to issue the policy and that but for such answers the policy would not have been issued, and that neither the company nor its- agents had knowledge of the fraud or falsity thereof, the burden is the defendant’s to clearly establish such allegations. The mere omission of statements, or a mere error in statements made, does not affect the validity of the policy.
    2. Solicitor is Agent oe Company.
    A person soliciting risks for an insurance company, with authority to obtain applications on which policies are issued, is the agent of the company and not of the insured, and any knowledge on the part of such agent as to the falsity of statements in an application is knowledge on the part of the company within the provisions of Sec. 3265, Rev. Stat., that mistakes,-errors or even fraudulent statements in the application of which the agent or company had knowledge, shall not yitiate the insurance.
    3. Statute Becomes Part oe Policy and Fixes Liability.
    Section 3265, Rev. Stat., prescribing when false answers in an application for insurance are material so as to bar recovery thereon, being in force at the time an application for a policy of accident insurance was written and at the time the policy was written and issued, has the same legal effect as if copied into and made part of the policy, fixing the measure of the obligation created by it and controlling its construction and operation, notwithstanding an express stipulation that the answers made are to be regarded as warranties and that the company shall not be bound by knowledge of the solicitor of facts not stated in writing in the application.
    Messrs. Chittenden & Chittenden, for plaintiff in error.
    Orville S. Brumback, for defendant in error.
    HeaRD ON Error.
   PARKER, J

This suit was begun by Franklin' D. Sickles against the North American Accident Insurance Company, on a policy of insurance, on account of an accident which he averred had happened to him, resulting in an injury for and on account of which he claimed something less than three hundred dollars. His action was commenced in the city and justice court of this city. He obtained judgment there against the insurance company and the company appealed the case to the court of common pleas, where it was tried to a jury, resulting in a verdict in favor of the plaintiff for $237.72. Motion íor a new trial was filed and overruled and judgment was entered upon the verdict and the insurance company prosecutes error to fhis court to reverse that judgment.

It is averred in the petition that on June 27, 1900, the plaintiff was insured by this insurance company against accident and against bodily injury which the plaintiff might receive, caused solely by external, violent and accidental means ; that the company agreed to pay him the sum of $50.00 per week, not exceeding 104 weeks consecutively, where the injury which he might receive wholly and continuously disabled him from transacting any and every kind of business; that he paid the insurance premium required; that on September 6, 1901, while riding as a passen ger upon a public conveyance, to-wit, a steamboat, on Take Erie, he received bodily injuries, caused solely by external, violent and accidental means, in that he accidentally fell in said boat and received such injuries as that immediately following the receipt thereof he was wholly and continuously disabled from transacting any and every kind of business up to and including October 5, 1900, to-wit, twenty-nine days, and was partially disabled from performing labor and transacting business from October 5 to October 9, to-wit, four days. The policy made provision for the payment of a smaller amount for the period that he was only partially disabled. The total amount of his claim was $221.34 and interest.

An answer was filed, and afterwards an amended answer, in which amended answer it is averred that “ previous to effecting said insurance, viz., on or about June 27, 1900, the said Franklin D. Sickles stated in an application upon which said policy was issued and which was the basis of and a part of the contract between this defendant and the said Franklin D. Sickles, amongst other things, the following: “I am not carrying nor have I applied for any other accident insurance except the amount herein written.” Also the following: “No accident insurance company or association ever rejected my application, cancelled or requested the surrender of my certificate or policy, or declined to renew the same, except as herein written.” And also the following: “I have never had paralysis, fits of any kind or brain disorder, diabetes, hernia, varicose veins or any bodily or mental infirmity, injuries or wounds, or suffered the loss of a limb or an eye, nor has my application for life insurance ever been rejected, postponed or not acted upon, except as herein written.”

And the defendant says: “ That said application contained no other statements concerning the aforesaid subjects therein by the said Franklin D. Sickles mentioned as aforesaid.” And that .“the plaintiff had been afflicted with paralysis, vertigo and other serious bodily infirmities and injuries, caused by a previous accident to him. That plaintiff was carrying other accident insurance and that he had been refused further insurance by other insurance companies, to-wit, the United States Casualty Company of New York City. That the aforesaid statements made by plaintiff in said application were wilfully false and fraudulently made, were material to said risk and induced said company to issue said policy, and that but for said statements said policy would not have been issued and that neither said company nor its agents had knowledge of the falsity or fraud of said statements at or before the delivery of said policy.”

These averments were denied by a reply, and upon these issues the parties went to trial.

It appeared upon the trial that this insurance was solicited by a Miss Dittenhaver, who claimed that she was representing the company, and that she brought to the plaintiff below the blank application and sat down with him to fill it out, and that a part of the writing in the application, or the most of it, and especially the parts relied upon here as a defense, were written by her, after some discussion of the questions and the proper answers which should be made to the statements appearing in the application. The application is in a somewhat peculiar form, perhaps not unusual. It is not in the form of questions and answers but is rather in the form of affirmative statements with blanks and provisions for exceptional or explanatory statements, the design apparently being, if there are no exceptional or explanatory statements required, that nothing shall be written excepting the signature of the applicant for insurance. But when these persons sat down to make it out, to these affirmative statements they have added, where perhaps it was not necessary, certain negative and affirmative answers, as if the statements were rather questions than affirmative statements.

Those that are especially relied upon and discussed here are statements Nos. 10 and 15 in this application. No. 10 is: “I am not carrying nor have I applied for any other accident insurance, except amount herein written.” That is printed in the application, and at the end of it is written the word “No.” No. 15 reads: “ I have never had paralysis, fits of any kind, or brain disorder, diabetes, hernia, varicose veins, or any bodily or mental infirmity, injuries or wounds, or suffered the loss of a limb or eye, nor has my application for life insurance ever been rejected, postponed or not acted upon except as hereinafter written. ” And written below that is the word “No.” The signature is that of the plaintiff, Franklin D. Sickles.

It appears from the evidence that at the time this application was made out, i. <?., about June 25 or 27 (it bears date the twenty-fifth), Dr. Sickles had a policy of like character, in force with the United States Casualty Company, but that the policy would expire by limitation upon July I,'or June 30, of that year. It appears that he stated this ■ fact to, and that it was well understood by, Miss Dittenhaver, who was assisting in the making out of this application, and who had solicited the insurance of the doctor. But it also appears that it was understood and contemplated between them that the new policy, that is to say, the policy being applied for, would not take effect until after the expiration of the policy in the United States Casualty Company, and that this application was being made out in anticipation of the other policy expiring by limitation within a few days. Though this policy was in fact dated the same as the application, that was not according to the understanding or the contemplated action of the parties; the intention of the parties was to have one policy begin at the expiration of the other; the policy, however, was not delivered to the insured until the expiration of the policy in the United States Cusualty Company.

It also appears that during the period that the doctor was insured in the United States Casualty Company he received an injury through an accident, and that on account of this injury he received $137 by the way of indemnity from the United States Casualty Company. This fact was not concealed from Miss Dittenhaver; she knew all about it; she and the 1 doctor talked about it, and the character of the injury that the doctor sustained upon that occasion appears to have been fully explained by him to Miss Dittenhaver. She so testifies, and the doctor so testifies, and ! that fact is not denied; and in this application this appears, under item 14: “I have never at any time received indemnity for disability or other loss except as herein written.” And No” is written at the end of that; and also this : “ $137 in Casualty.”

Now there was some evidence introduced on behalf of the insurance company to show that the injury which the doctor received in this accident while he was insured with the Casualty company was of the character of paralysis ; that he fell, and as a result of the fall, his lower limbs were affected by numbness and loss of motion, and that he experienced a loss of control over'themftemporarily; and some of the physicians who testified state that this was in their opinion temporary paralysis; but there is no'testimony tending to show that the doctor was afflicted with anything like paralysis at the time he applied for this insurance in the NorthJAmerican^Accideut Insurance Company, and the testimony that he had fully recovered from his former injury stands practically undisputed.

As to whetheNthe injury that he had received on this former occasion resulted in partial or temporary paralysis, there is some dispute and some doubt, some of the testimony tending to show that the result was simply a temporary numbness, not in that degree that could be fairly characterized as “ paralysis.”

It is contended by the insurance company that because the facts which I have said were stated to Miss Dittenhaver, all these facts of the fall which resulted in numbness and disability, etc., were not set forth in this written application, therefore the insurance policy was null and void ab initio, and that they have made out their defense. And that contention is based somewhat upon the provisions of the application and the policy with respecCto thejcharacter of these statements and representations and the effect that they shall have upon the insurance. I read from the application :

“ I hereby apply for insurance in the North American Accident Insurance Company, to be based upon the following, viz: Classification of my occupation ; the statement of facts herein, whether written or printed, in response to interrogatories or otherwise, all of which I warrant to be true and complete,” etc.

And further, after the answers and before the signature, is this :

“ This application, with its statements, stipulations and warranties, together with the premiumjpaid by me, shall be the basis of and a part of the contract between the company and myself. I understand the classification of risks, and agree that for any injury, fatal or otherwise, received in any occupation, risk or exposure classed in the company’s manual as more hazzardous than the class named in the policy to be issued hereon, I, or my beneficiary shall be entitled to only such amoun*-as the premium paid will purchase at the rate fixed for such increased hazard; I agree that the company shall not be bound by any knowledge of or statement made to or by any solicitor, unless written hereon; that I will notify the secretary should I hereafter procure additional accident insurance,” etc.

It is contended by the insurance company that Miss Dittenhaver was not the agent of the company, but that even if she were the agent of the company, by reason of this stipulation of warranty and by reason of the further stipulations and agreements that the company was not to be bound by any knowledge of or statements to or by any solicitor, unless written herein, they are not bound or affected by the oral statements of the doctor to Miss Dittenhaver which were not written in the application. The policy contains this st-.pulation or agreement: “ In consideration of the warranties, stipulations and agreements contained in the application for this policy, which application is made a material part hereof, and of the premium of six dollars, does hereby insure,” etc. So that it will be seen that the application is made a part of the policy as fully as the parties by their contract could make it a part.

It is contended on behalf of the defendant in error, however, that Sec. 3625, Rev. Stat., has an effect upon this contract; that the statute nullifies the stipulation that these answers shall be regarded as warranties and that the company is not to be bound by any knowledge of statements made to or by any solicitor unless written upon the application. Before this section was made a part of the law, the case of Insurance Co. v. Pyle, 44 Ohio St. 19 [4 N. E. Rep. 465], was considered and decided by our Supreme Court and it was therein held as follows :

“ The provisions of a life insurance policy are construed and applied like the terms of any other contract, and such provisions may render the policy void ab initio, by the terms of the same and the failure of warranty.
“ When a life policy is issued and accepted upon the expressed condition that the answers and statements of the application are warranted true in all respects, and that if the policy be obtained by any untrue answer or statement, or by any fraud, misrepresentation, or concealment, the policy shall be absolutely null and void; and, as to matters material to the risk, some of the answers and statements are untrue in fact, though made without actual fraud and under an innocent misapprehension of the purport of the questions and answers, no contract of insurance is thereby made, and the policy does not attach but it is void ab initio

Subsequently this statute, Sec. 3625, was passed, which provides as follows:

“ No answer to any interrogatory made by an applicant, in his or her application for a policy, shall bar the right to recover upon any policy issued upon such application, or be used in evidence upon any trial to recover upon such policy, unless it be clearly proved that such answer is willfully false and was fraudulently made, that it is material, and induced the company to issue the policy, and that but for such answer the policy would not have been issued ; and, moreover, that the agent or company had no knowledge of the falsity or fraud of such answer.”

It is contended, however, by the insurance company, that this section does not apply where the parties expressly stipulate, as they have done in this case, that the answers are to be regarded as warranties and that the company shall not be bound by any knowledge of the state ments made to or by the solicitors, unless written upon the application^ but, that it is intended to apply to cases where the contract is silen upon this subject.

In John Hancock Life Ins. Co. v. Warren, 59 Ohio St. 45 [51 N. E. Rep. 546], it is held:

“Section 8625, Rev. Stat., is a valid constitutional enactment; and to constitute a defense to a policy of insurance by reason of false answers to questions in the application, it must be clearly proven that the answers to such questions were willfully false and were fraudulently made, that the same were material, and induced the company to issue the policy, and that but for such answers the policy would not have been issued, and that neither the company nor its agents had knowledge of the falsity or fraud of such answers at and before the delivery of the policy.”

Which seems to amount to saying that it is a valid constitutional enactment, and means what it says, for this syllabus is practically a transcript of the statute. And we have this by the court, upon page 53:

Section 3625, Rev. Stat., was in force at the time this policy of insurance was issued, and therefore the legal effect is the same as if the section was copied into and made a part of the policy.”

. And the same may be said, therefore, of the case at bar, to-wit, Sec. 3625, Rey. Stat., being in torce at the time this application was written and at the time this policy was. written and issued, it must be considered to have the same legal effect as if it was copied, into and made a part of the policy. The court further says, on the same page:

“ The case of Insurance Co. v. Pyle, 44 Ohio St. 19, was decided before this section was enacted, and, therefore, cannot control the matter. This section was passed for the purpose of abrogating the rule laid down in that case.”

Now it seems to us that the rule for which counsel for the insurance company is contending here is substantially'and practically the rule laid down in the case of Insurance Co. v. Pyle, supra, and that it is a rule which the Supreme Court says has been abrogated, purposely, by Sec. 3625, Rev. Stat., and we think what was said by the Supreme Court in Insurance Co. v. Leslie, 47 Ohio St. 409, 414 [24 N. E. Rep. 1072], with respect to Sec. 8643, Rev. Stat., is applicable to life insurance companies and may be very properly said of this statute, viz.:

‘‘The foregoing sections oí the statute being in force when it (the policy) was issued, they entered into and became part of the contract of insurance, fixing the measure of the obligation created by it, and controlling its construction and operation.”

And the following from page 417:

“ The statute cannot, we think, be treated as conferring upon the assured a mere personal privilege which may be waived or qualified by' agreement. It has a broader scope. It moulds the obligation of the contract into conformity with its provisions, and establishes the rule and measure of the insurer’s liability. Terms and conditions embraced in the policy inconsistent with the provisions of the statute, are subordinate to it and must give way.”

It is true as pointed out by counsel, that in Hancock Life Ins. Co. v. Warren, supra, it was said by the court that the insurance company failed to allege that the answers to the questions were material, and without such allegation the answer failed to state a ground of defense, and it matters not how false or how fraudulent such answers may be, if they are not material, they furnish no ground for defense to the company issuing the policy. But, while this is said, the decision does not appear to be based upon that fact as to the state of the pleadings, and the law of the case, as we understand it, is what we find stated in the syllabus, which I have read. The court point out that the company had not made a complete answer, that the answer perhaps is subject to demurrer— does not state a complete defense — yet the decision is not based upon that, and we cannot see that if that matter had been stated in the answer it could in any way have affected or modified the statement of the law as given in the syllabus. We hold, therefore, that it devolved upon the defendant to establish clearly that these answers made by the plaintiff were willfully false, that they were fraudulently made, that they were material, that they induced- the company to issue the policy, and that but for such answers the policy would not have been issued, and, moreover, that the agent of the company had no knowledge of the falsity or fraud of such answers.

We fail to find anything in this record that satisfies us, or that we think should satisfy any trier of the facts, that any of these answers or any of the omissions or statements by the way of explanation, were fraudulently made or fraudulently omitted. The conduct of the insured in this transaction appears to us, from the record, to have been entirely fair-minded so far as we can see, and therefore we think that under the statute the mere omission of statements or a mere error in statements, could not affect the validity of the policy; that the charge of the court upon this subject was correct; that the court was right in refusing to charge the several requests numbered 3, 4, 5 and 6, submitted on behalf of the insurance company. _ We think, too, from a careful reading of this record (and I shall not stop to discuss the testimony or read it) that the jury was warranted in finding that Miss Dittenhaver was an agent of the insurance company; that William N. Hoyt, the general agent for Ottawa, Fulton, Henry, ‘Sandusky and Nucas counties, residing in Toledo, had authority to appoint sub-agents, and those sub-agents, acting under his direction and supervision in soliciting- insurance, represented the insurance company, and that to that state of facts the law as laid down in Insurance Co. v. Williams, 39 Ohio St. 584 [48 Am. Rep. 474], is applicable, to-wit:

“A soliciting agent, procuring for an insurance company risks and applications on which policies are issued, who fills up the application, is, in so doing, the agent of the company and not of the insured; and if the agent make a mistake in wrongly stating facts which were correctly given him by the insured in preparing the application, the company is bound by and responsible for such mistake.”

And we think that this last clause of Sec. 3625, Rev. Stat., to the effect that the mistakes, errors or even fraudulent statements in the application shall not vitiate the insurance if the agent or company had knowledge of the falsity or fraud of such acts is applicable. The charge of the court upon that subject appears at page 44 of the record, and has our approval. It is as follows:

“ There has been some discussion as to whether the lady who obtained this application from the plaintiff was an agent of the company within the meaning of this statute. On that subject I have this to say to you: If Mr. Hoyt, the district manager of this company here in Toledo, authorized her to obtain applications for policies, and the applications so obtained by her were received by the manager and forwarded to the company, and policies were issued thereon by the company, then sbe was the agent of the company in taking such applications, and any knowledge on her part as to the falsity of the statements in the application, if there was such falsity, would be regarded as knowledge of the company. If either of these statements was false and fraudulently made, and it is not clearly proved that neither the company nor the agent knew that it was false or fraudulent, then the defense is not made out. But if each of the facts mentioned in the statute is clearly proved, then the defense is made out, and the plaintiff is not entitled to recover.”

And we think the evidence in this case clearly establishes a state of facts which required the jury to give an affirmative answer to the proposition embodied in this charge, to-wit, that she had such authority and did exercise such function and was so recognized by Mr. Hoyt and the company as that she became the agent of the company.

Now, this is perhaps all that is necessary to be said to dispose of the questions raised here by the plaintiff in error; and yet we make this further remark upon the record, that we think from the evidence the jury was fairly justified in finding — whether they did so find or not, of course we cannot tell, because there was no special verdict — but they were fairly justified in finding that these facts with respect to the policy existing at the time this application was made, and with respect to the injury which the doctor had received, and the compensation he had received on account of that injury, and the effects of the injury, were made known to Mr. Hoyt before this policy, was delivered. We think if the case were to rest upon that issue that it is fairly sustained by the insured — that, the burden being upon the insurance company., it has failed to establish that these facts were not made known to Mr. Hoyt before the policy was delivered.

Upon the whole it seems to us that this verdict was right and that no error occurred upon the trial of the case prejudicial to the plaintiff in error and that the judgment should be affirmed, and it is, therefore affirmed.


text:
    STREET RAILWAYS — QUO WARRANTO.
    [Lucas (6th) Circuit Court,
    June 20, 1902.]
    Parker, Haynes and Hull, JJ.
    State ex rel. Sheets, Attorney General, v. Toledo Railway & Light Co.
    1. Rule as to Rights in streets.
    The use of the streets of a city belongs to the public at large and is not limited to the. residents of any particular locality. Therefore, a city by imposing conditions to the exercise of a franchise granted to a corporation to construct and operate a street railway in its streets acts as the agent of the state and for the whole public, and the state may interfere by quo warranto when the conditions in which the public are interested are not complied with.

      2. Remedy oe City or Individuad — Quo Warranto by State.
    The fact that a city or individuals may have a remedy by action ex contractu or otherwise and cannot proceed by quo warranto, affords no valid objection or obstacle to the state availing itself of such extraordinary remedy for the advantage of the general public.
    3. Ordinance Under Secs. 25'Jl and 2602, Rev. Stat.
    Under Secs. 2501 and 2502, Rev. Stat., providing for the granting by municipalities of permission to street railway companies to construct and operate their lines upon such terms and conditions as may be prescribed by the council thereof, an ordinance prescribing the terms and conditions upon which the franchise is to be enjoyed, has the force and effect of an act of the legislature, for the violation of which an action may be brought ex contractu by the city, or in quo warranto upon the relation of the state.
    4. Quo Warranto Proper Remedy, When.
    Where a street railway company acquires the franchise, lines, etc., of other companies, by virtue of Sec. 2505a, Rev. Stat., conferring power to lease or purchase, and charges rates of fare in excess of the maximum fare which original companies were allowed to charge, quo warranto by the state is the proper proceeding to prevent such illegal use of leased or purchased lines.
    5. Adeegations Sueeicient Against Demurrer.
    Under Sec. 2505a, Rev. Stat., 93 O. R. 214, conferring upon street railway companies power to lease or purchase property of street railway companies, or to acquire its franchises, and providing the amount of fare that may be charged, an allegation in a petition- in quo warranto against such a company, that a purchase of the Hues of the defendant was made under the authority of the statute, and that the company is offending against the statute in that it is charging more for a continuous ride in the same general direction over such line or purchased lines within the corporation than the maximum fare charged over any one of such lines prior to such lease or purchase, although general in form, is sufficient to withstand a demurrer.
    John M. Sheets, M. R. Brailey and John P. Mantón, for the plaintiff.
    Smith & Baker, for the defendant.
    QUO WARRANTO.
   PARKER, J.

This is an action in quo warranto. The relator states in his petition : “That the defendant, The Toledo Railway and Tight Company,, is a corporation duly organized under the general corporation laws of the state of Ohio for the Incorporation of street railways, and has been such since July 1,1901, in the city of Toledo, county of Tucas and state of Ohio; that said defendant became and is so incorporated as aforesaid for the purpose of constructing, maintaining, operating, extending, purchasing, acquiring, leasing and owning street railroads and railroads operated as street railroads, to be operated by electric power, together with all the property and all the franchises, rights and privileges, respecting the use and operation of the same, and for all purposes incidental thereto, in said city of Toledo, Tucas county, Ohio :

“ That prior to 'August 10, 1901, the Toledo Traction Company was the owner of, and was operating and maintaining all the lines of street railway existing within said city of Toledo, and owned, enjoyed and operated all the rights, privileges, franchises, property and street railway lines theretofore owned, operated and enjoyed by the following persons and corporations, to-wit: The Central Street Railway Company; The Metropolitan Street Railway Company; David Robison, Jr., Trustee ; The Toledo Electric Street Railway Company; The Toledo Traction Company.
“ That said several persons and corporations above named operated and manintained their respective lines of street railways upon and over the streets, alleys, ways, lands and highway of the city of Toledo, and enjoyed the rights, privileges and franchises thereto annexed, by virtue of separate grants and franchises made by said city of Toledo to each of said persons and corporations, upon the condition, among others, therein expressed, that the grantee of the privilege and franchise, the successors or assigns of such grantee should not charge a higher rate of fare than five cents for each adult passenger for one continuous route or ride in the same general direction over all the lines therein authorized to be constructed and operated; that said several persons and corporations above named accepted their respective grants conditioned as above set forth and enjoyed the rights, privileges and franchises therein granted, and constructed, operated and maintained lines of street railways upon and over the streets, alleys, ways, lands and highway of the city of Toledo thereunder; that each and every of said grants of franchises, rights and privileges so made by the city of Toledo to said several persons and corporations above named, was for a period of twenty-five years, and all of said grants so made are at this date unexpired and each and all of said grants have a long period of time, to-wit, more than seven years yet to run:
That said The Toledo Traction Company, constructed, operated and maintained its said lines of street railway upon and over the streets, and public ways of the city of Toledo, by virtue and under the condition of the said several grants so made by the city of Toledo to the several persons and corporations above named, as the successor or assign of said persons and corporations.
“ That on August 10, 1901, said defendant, The Toledo Railway and Tight Company, acquired by purchase from said The Toledo Traction Company all the lines of street railway existing within the corporate limits of said city of Toledo, together with all the rights, privileges and franchises thereto belonging and connected therewith, and said defendant has ever since said August 10, 1901, been, and now is, the owner of, and has since said date been and is now operating and maintaining all said lines of street railway; that said The Toledo Railway and Tight Company is maintaining, controlling and operating all of said lines of street railway in tbe city of Toledo as tlie successor and assign of said The Toledo Traction Company, and under and by virtue of and subject to the conditions of the grants made by the city of Toledo as aforesaid, to said several persons and corporations hereinbefore named, and has no other right or franchise to construct, operate or maintain lines of street railway upon the streets, alleys, highway and public places in the said city of Toledo:
“ That said defendant, The Toledo Railway & Tight Company, as such corporation aforesaid, has ever since August 10, 1901, continuously within this state, to-wit, at the city of Toledo, in the county of Lucas, offended against the laws of this state and the provisions of an act for its creation and grossly misused its corporate authority and the franchises and privileges conferred upon it by law and especially in the following particulars, to-wit :
“ First — That it has refused and does refuse to carry and transport passengers over its said lines of street railways at the rates of fare established by the contract of its predecessors in rights and interests, and fixed by the grants of rights, privileges and franchises from the city of Toledo, under which it operates said lines of street railways upon and over the streets, alleys and public highways of said city of Toledo.
“ Second — That it has established and demands and receives, and requires the public to pay, a higher rate of fare for one continuous route or ride in the same general direction over all its said lines of street railway, so purchased as aforesaid, within the corporate limits of the said city of Toledo, than the maximum fare charged over any one of the several separate lines of street railway, so purchased prior to such purchase aforesaid.
“ Third — That it has established, charged, demanded and collected a rate of ten cents for one continuous route or ride in the same genera^ direction over its lines of street railways, within the corporate limits of the city of Toledo, so purchased and operated as aforesaid, and that the highest rate of fare charged for one continuous route or ride in the same general direction, within the corporate limits of the city of Toledo, over any one of said several lines of street railways so purchased as aforesaid by the defendant, The Toledo Railway and Light Company, prior to said August 10, 1901, has been five cents.
“ Wherefore the relator prays the advice and judgment of the court in the premises and due process of law against said The Toledo Railway and Light Company and that it be adjudged to have forfeited its franchises and be ousted therefrom or from the franchises so abused by it. ”

The complaint made against the defendant here, in substance, is; that it acquired these lines by purchase in pursuance of the authority of the statute which imposes as one of the conditions of purchase that it should not charge over any of the lines running in the same general direction a greater rate of fare than was charged as the maximum charge over any one of the constituent lines before such purchase and sale. And it is said that defendant [is violating this condition, and, in that respect, is unlawfully exercising the franchise.

The defendant demurs to the petition on the grounds:

“ 1. That said circuit court of Tucas county, Ohio, has no jurisdiction of the subject of the action.
“ 2. That the plaintiff has not legal capacity to sue in this action.
“ 3. That the petition does not state facts sufficient to constitute a cause of action in quo warranto.”

The second ground of demurrer is not urged or relied upon, and we have not been able to discover any reason for challenging the capacity of the plaintiff to sue or of the relator to represent the plaintiff.

The first ground of the demurrer is based upon the claim and contention of the defendant that the subject-matter of the suit is founded on contract and not on franchise, and that if the defendant is guilty of any wrong the petition discloses that such wrong consists of the violation by the company of the contract between the company and the city; though the company does not concede that there is any contract existing that forbids its charging fares as alleged in the petition. Perhaps, more accurately stated, the contention 'is that the subject-matter might appropriately be regulated by contract, but that it is not and cannot be an element of franchise, and if regulated by contract, the remedy must be by an action ex contractu and cannot in any event be by an action in quo warranto.

By the company it is conceded that the privilege of constructing and maintaining tracks, poles, wires, etc., in the streets of the city, and operate cars upon the same, is a franchise emanating from the state, but it contends that the charge for the service is an exercise of a natural right, which does not emanate from the state as a privilege or franchise, although it may be regulated by contract with the municipality where the railways are operated.

Sections 2501 and 2502, Rev. Stat., provide for the granting by municipalities of permission to persons or corporations to construct and operate street railways upon “ terms and conditions ” to be prescribed by the council by ordinance, and that such grant shall not be made “ except to the corporation, individual or individuals that will agree to carry passengers upon such proposed railroad at the lowest rates of fare,” etc.

We understand that it is contended by the relator that the terms and conditions thus imposed are conditions imposed upon the exercise oí the franchise; that though the franchise emanates from the state, it is not to be enjoyed except by permission of the municipality and upon terms and conditions prescribed by the municipality. That this authority to prescribe terms and conditions also emanating from the state and to be exercised by an agency of the state for the public benefit, amounts to an authority to mould or modify the franchise, and that the conditions upon which the franchise is to be enjoyed are limitations upon and integral parts of the franchise, so that the exercise of the franchise in violation of such conditions may be said to amount to an unlawful exercise of a franchise and to authorize quo warranto proceedings as provided by Sec. 6760, Rev. Stat., and the sections following.

We do not find that we are called upon to decide upon this contention in passing upon this demurrer, but the' question is likely to be directly presented later on in the case, and therefore, we take occasion to remark that we do not regard the fact that these conditions are matters of contract, or arising out of contract between the railway company and the municipality, as a fact decisive of the question, or at all significant, for franchises in general are founded upon contract between the state or authority granting the same and the companies to which the same are granted.

As to the character of the franchise, it is said in California v. Railroad Co., 127 U. S. 1, 40 [8 S. Ct. Rep. 1073], by Mr. Justice Bradley:

“ Generalized, and divested of the special form which it assumes under a monarchical government based on feudal traditions, a franchise is a right, privilege or power of public concern, which ought not to be exercised by private individuals at their mere will and pleasure, but should be reserved for public control and administration, either by the government directly, or by public agents acting under such conditions and regulations as the government may impose in the public interest, and for the public security.”

As a matter of convenience, I read from Anderson’s Dictionary of Daw, at page 474, a short paragraph, which cites Chincleclamouche Lumber Co. v. Commonwealth, 100 Pa. St. 438, 444; and The Binghamton Bridge, 70 U. S. [3 Wall.] 51.

“ A grant of a corporate franchise by an act of legislation, accepted by the grantee, is a contract between the state and the grantee, the obligation of which a subsequent legislature cannot impair.”

In State v. Railway Co., 40 N. W. Rep. 487 [72 Wis. 612], the syllabus reads:

“ Under Sec. 1862, Rev. Stat., a municipal ordinance granting to a street railway corporation a franchise to occupy and use public streets for the purposes of its railway, has the force and effect of a statute of the state; and for a violation of the provisions of such ordinance an action may be maintained under Sec. 8241, Rev. Stat., to vacate the charter or annul the existence of such corporation.”

The case contains an interesting discussion which I will not pursue by reading. So far as we can discover, the statutes of the state of Wisconsin upon this subject are not materially different in respect to the extent of authority conferred and the character of a franchise granted, from the statutes of the state of Ohio upon the same subject.

Further on the subject of franchises I refer to 2 Spelling Injunctions & Other Extra. Rem., Sec. 1807:

“ Where by statute the legal exercise of a right which, at common law, was private, is made to depend upon compliance with conditions interposed' for the security and protection of the public, the necessary inference is that it is no longer private, but has become a matter of public concern — that is, a franchise, the assumption and exercise of which without complying with the conditions prescribed would be a usurpation of a public or sovereign function.”

We are cited by counsel for the defendant to People v. Gas Light Co., 38 Mich. 154. The decision is by Campbell, chief justice, and the bench was made up of very able judges among whom was Thomas M. Cooley, and we have to say with respect to that decision simply this: That we are unable to reconcile it with what we understand to be the law and the theory of the law of the state of Ohio upon this subject. It seems to us that if a case of 'that character should arise in this state it must be held that the privileges conferred there were in the nature of franchises and that the conditions imposed were in the nature of conditions to the exercise of such franchises; but, however that may be, we do not understand the case to be in point upon the precise question presented by this demurrer, for the reason that we understand the question arises here upon the granting of a franchise by a state, by an act of legis. lation which itself imposed the conditions upon which the franchise is to be exercised, and does not involve the question of the effect of conditions imposed by a contract in the form of an ordinance entered into between the company and the municipality. The fact that the city, or individuals, may have a remedy by actions ex contractu or otherwise and cannot proceed by quo warranto, affords, we think, no valid objection or obstacle to the state availing itself of this extraordinary remedy for the advantage of the general public, or for the enforcement of the rights of the general public, for it must be remembered that the use of the streets, of the city and the occupation thereof by the tracks, cars and business of transportation companies are subjects in which the whole public, not ' merely residents of the municipality, are interested and have rights, and in imposing these conditions to the exercise of these franchises we think the city acts as the agent of the state and for the whole public, not merely for the city in its corporate capacity or for the residents of the city, and that the state may interfere when these conditions in which the public are interested are not complied with. And we believe that quo warranto is a proper form of proceeding to reach the end aimed at.

In State v. Traction Co., 10 Circ. Dec. 212 (18 R. 490), which was a suit in quo warranto, to interfere with and prevent a street railroad from carrying freights through the city of Dayton, on the ground that it was exercising a franchise not conferred upon it by law, it was held that it was exercising a right upon which the municipality had no right to place a limitation, and that an ordinance which undertook to prevent it from carrying freight was invalid for that reason. But, with respect to the remedy pursued, if it had turned out that the contention of the relator was correct as to the right involved, we understand that proceeding by quo warranto was approved of. .1 read from page 217 a part of the opinion by Summers, J.:

‘ ‘This brings us to the question of the validity of the provision of the ordinance prohibiting the carrying of freight. It is contended, however, that an ordinance granting permission to construct a street railway is a contract; Cincinnati Street Ry. Co. v. Smith, 29 Ohio St. 291, 806; Cincinnati & S. Ry. Co. v. Carthage, 86 Ohio St. 631; Columbus v. Street Railroad Co., 45 Ohio St. 98; that quo warranto is not the remedy for enforcing a contract; State v. Railroad Co., 50 Ohio St. 239 ; and further, that a special remedy is provided by Sec. 1777, Rev. Stat., which makes it the duty of the city solicitor, whenever an obligation or contract made on behalf of the corporation granting a right or easement is being evaded or violated, to apply for the forfeiture or the specific performance of the same.

“ It is true that such an ordinance is in some respects a contract, and so is a franchise. And in some states it is held that the right acquired by ordinance to construct a street railway is merely a license or easement, and that quo warranto is not the proper remedy to enforce the ordinance.”

Citing many cases, and among them People v. Gas Light Co., 38 Mich. 154.

He then proceeds to say:

“ But the better considered cases hold that the permission given by ordinance to construct a. street railway in the street is a franchise granted by the state through the agency of the municipality, and that a violation of the same may be inquired into in quo warranto

Citing cases from Wisconsin, Alabama and State v. Street Ry. Co., 41 S. W. Rep. 955 [140 Mo. 539].

And when this case came to the Supreme Court we find from the report in State v. Traction Co., 64 Ohio St. 272 [60 N. E. Rep. 291], that this course of proceeding to inquire into the question whether or not the company was unlawfully exercising its franchises, seems to have received the approval of the court.

I cannot see that State v. Dairy Co., 62 Ohio St. 350 [67 N. E. Rep. 62], which has been cited by counsel and discussed somewhat, throws any direct light upon this precise question involved here.

This complaint is based upon a clause in Sec. 2505a, Rev. Stat., that being the form in which the act was passed on April 28, 1898, 93 O. L. 214. This statute confers upon companies of this kind power to lease or purchase property of a railroad company, and to acquire its franchises. It points out the course of proceeding in order to accomplish this result, and contains this provision in the last clause:

‘ ‘ Provided, that whenever any such lease or purchase is made as herein provided, there shall be no increase of the existing rates of fare by reason of such lease or purchase, nor shall any fare be charged upon any of the separate routes so leased or purchased in excess of the fare charged over such separate routes prior to the lease or purchase thereof, and provided that when any such lease or purchase is made as herein provided, the fare charged for one continuous route or ride in the same general direction over all such leased or purchased lines within any municipal corporation shall not exceed the maximum fare charged over any one of said lines prior to such lease or purchase.”

It is distinctly averred in the petition that this purchase of these different lines by the defendant was made under authority of this statute and it is distinctly averred that the company is offending against this statute in that it is charging more for a continuous ride in the same general direction over such line or purchased lines within the corporation than the maximum fare charged over one of such lines prior to such lease or purchase. These averments in the petition are very general in form, but we think they are sufficient to withstand a demurrer; whether they would be sufficient as against a motion to make them definite and certain, we are not called upon to say. A corporation cannot dispose of its franchises; a corporation cannot acquire the franchises and property of another corporation, except under authority of legislation authorizing it. Branch v. Jesup, 106 U. S. 468, 484, 488 [1 S. Ct. Rep. 495]. And we are of the opinion that the company having exercised this authority under and by virtue of the statute, since it could not otherwise acquire the property, avails itself of power conferred upon it by the statute subject to the conditions imposed by the statute, and that the attorney general may by qtio warranto require it to observe such conditions. Whether these lines and routes with respect to which it is said the company is offending, do run in the same general direction so that it may be required to reduce its fares, is a question we have not yet reached. The petition does not enlighten us except by general terms; further pleadings in the case may present the question. Whether the company may avail itself of this authority without being obliged to observe the conditions on the ground that it had existing rights conferred upon it by previous legislation, or by existing contracts between it and the municipality, is another question, only hinted at and not discussed and not now present in the case, but a question which we imagine is looming up to bother us on after occasions. There is nothing in the pleadings as they stand to indicate that there is any such vested right being interfered with by the conditions imposed.

Something has been said in the course of the discussion about the extent of the relief that may be granted. It is sufficient to say that the court has power to mould the remedy to meet the exigencies of the case. The court will not be called upon to go farther than would be necessary to require the company to desist from exercising its franchises in charging and collecting fares in so far as they may be in excess of the rates fixed by the statute; but that is a matter not presented by the demurrer and may be for further consideration. We hold that the petition is good as against a demurrer and the demurrer is overruled.


author: VOORHEES, J.

text:
    ASSIGNMENTS FOR CREDITORS.
    [Licking (5th) Circuit Court,
    October Term, 1899.]
    Adams, Douglass and Voorhees, JT.

       James W. Owens, Trustee, et al. v. Waldo Taylor, Assignee, etc.
    1."Assignment — Rights or Parties, Other Than Creditors, to Chose in Action not Included in Schedule — Sec. 6343, Rev. Stat.
    Where a deed of assignment does not transfer to the assignee all of the property of the assignor, but is limited to specific real estate described in the deed and to specific personal property schedulized therein, such assignment does not include property not described in the deed and is a partial assignment, and nothing will pass by such deed that is not so therein set forth or specified.

      2. Partial Assignment — Property Included.
    Where a deed of assignment does not on its face purport to be all of the assign- or’s property, real and personal, it is a partial assignment and includes only such property as is particularly described in the instrument.
    3. Effect of Upon Property not Included.
    Where a deed of assignment on its face purports to convey all the assignor’s property, when in fact he has other property not disclosed in the assignment, it is void as against creditors; but if it does not so purport, it is valid, notwithstanding property may remain in the hands of the assignor unassigned, which property, being unaffected by the deed of assignment, is free to be transferred or assigned by the assignor.
    4. Section 6343, Rev. Stat., Considered.
    Section 6343, Rev. Stat., either before or after the amendment of April 26> 1898, 93 O. L. 290, does not apply to an assignment, where it was not the purpose and intent of the assignment to prefer one or more creditors of the assignor.
    Appeal.
    • Kibler & Kibler, for Tucius B. Wing and Margaret J. Shields.
    Waldo Taylor, for Catherine Snider, Fxrx., etc.; also as assignee of William Shields.

       Affirmed by the Supreme Court without report, April 16, 1901, Taylor v. Owens, 64 Ohio St. 677.

   VOORHEES, J.

This case is in this court on appeal, and is a controversy arising between Waldo Taylor, assignee of William Shields, and Margaret J. Shields and Tucius B. Wing.

The contention grows out of a deed of assignment made by William Shields to Alonzo P. Taylor on November 23, 1878, and by Alonzo P. Taylor and William Shields to John H. and Benjamin Franklin, on December 4, 1878. In these deeds of assignment the property is described as all the lands and tenements, with their appurtenances., including all city and town lots, situated in the county of Ticking; also, the real estate owned by Shields in the city of Columbus, Ohio, particularly described; also, 1180 shares ot the capital stock of the Newark Coal Company, -which was hypothecated to different parties as collateral security; also, 200 shares of the capital stock of the Ticking Iron Company, which was hypothecated as collateral security to Nicholas Duper & Company, of Boston, excepting and reserving from the deed the homestead rights.

Alonzo P. Taylor, on December 3,1878, resigned said trust, and the probate court appointed John H. Franklin and Benjamin Franklin trustees instead of said Taylor; and Taylor and Shields, by deed of that date, granted, sold and conveyed to the Franklins, all the lands, tenements, and all the right and title in said Taylor vested by virtue of said deed, as expressed and described therein, reference being had to said deed for a more particular description of the property.

So it will be observed that the Franklins, as trustees, got no more property, nor any different property, than what was originally transferred to Alonzo P. Taylor, in trust for Shields.

The instrument of writing, under which Margaret J. Shields and Rucius B. Wing claim the funds in controversy, was executed March 9, 1890. After the assignment, Charles W. Snider took from William Shields an assignment of the claim involved in this action.

The date of the assignment was sometime after March 22, 1886. This assignment was for the benefit of Snider and was to secure him for $427.64, with eight per cent, interest from March 9, 1890. On that day he agreed to pay over to Shields all the money other than the $427.64 and interest realized from the judgment in favor of Gibson Atherton, trustee, against the Newark, Somerset & Straitsville Railroad Company, in which Shields was entitled to a distributive share. On the same day William Shields assigned. this money to Charles R. Shields, who, on July 25, 1898, assigned it, one-half to Margaret J. Shields and one-half to Rucius B. Wing.

The question we are called upon to determine in this case is : Does the deed of assignment, originally to Alonzo P. Taylor, carry with it this chose in action which is now in controversy, and claimed by the defend* ant, Waldo Taylor, assignee, as being assets which were assigned originally to the assignee Alonzo P. Taylor, who was succeeded by the Franklins, and, by virtue of that assignment, it passed in trust from William Shields, and therefore William Shields’ later assignment could have no effect upon the trust fund ?

That is the only controversy now before us for determination; and it is the single question, whether or not the deed of assignment in this case is broad enough to carry and cover all the property then owned by Shields.

Attention has been directed to Sec. 6343, Rev. Stat., as amended April 26,1898, 93 O. R. 290, and it is contended by counsel for defendant that under the section as amended, the property in controversy is to be controlled and the rights of the parties thereto are to be determined by the statute as amended.

Section 6343, Rev. Stat. before it was amended was as follows, 56 O. R. 231, Sec. 16.

“ All assignments in trust to a trustee or trustees, made in contemplation of insolvency, with the intent to prefer one or more creditors, shall inure to the equal benefit of all creditors in proportion to the amount of their respective claims, and the trusts arising under the same shall be administered in conformity with the provisions of this act.”

It will be observed that an assignment to come witbin the provisions of the statute must be made with intent to prefer one or more creditors of the assignor. This was not the expressed intention, at least, of this deed of assignment made by William Shields to Alonzo P. Taylor. There was no purpose, so far as the deed of assignment was concerned, indicating that the intention was to prefer any special or particular creditor. It was for the creditors generally, so far as the property therein assigned was concerned.

The amendment is somewhat broader. As amended, 93 O. R. 290, it reads as follows:

“ Every sale, conveyance, transfer, mortgage or assignment, whether made in trust or otherwise, by a debtor or debtors, and every judgment suffered by him or them, and every act or device done or resorted to by him or them, in contemplation of insolvency, or with a design to prefer one or more creditors to the exclusion in whole or in part of others, and every sale, conveyance, transfer, mortgage, or assignment made, or judgment suffered by a debtor or debtors, or procured by him or them to be made, in any manner, with intent to hinder, delay or defraud creditors, shall be declared void as to creditors of such debtor or debtors, at the suit of any creditor or creditors, as hereinafter provided, and shall, operate as an assignment and transfer of all the property and effects ofi such debtor or debtors, and shall inure to the equal benefit of all cred- ■ itors of such debtor or debtors in proportion to the amount of their’ respective demands,” etc.

The section as amended is broader and would seem to cover all the property of the debtor. But can it be made applicable to this case ? If! the statute is broad enough to cover such a case as this, yet it could not affect rights of these parties, because this amendment was passed’long after the accruing of the rights of the parties in this action. It could not affect any vested rights of the parties, and the question must be determined as the law was under Sec. 6343, Rev. Stat., before this amendment; and it is very clear that it could not reach or control this case.

The question then is, whether, under the general law of assignments, regardless of the statute, this deed of assignment is broad enough to cover this property which is not specifically named in the deed of assignment.

This deed of assignment does not transfer to the assignee all of the property of the assignor. There is no such comprehensive language in the deed of trust, but it is limited to specific real estate named in the deed, and also specific personal property designated in the same instrument There are no terms of the deed of assignment broad enough to reach all of the property that Shields owned at that time. What is the effect of this ? Can this deed be construed as including property not described in the deed when it has specifically named some of the property ?

In Burrill on Assignments, at page 142, the author says:

“ It is a leading rule in the construction of assignments by debtors, that no more property will pass to the assignee than is embraced in the terms of the instrument; and, even where all the debtor’s property is assigned in terms, if there be subsequent words of description, or a reference to a schedule, as setting it forth particularly, the contents of such clause or schedule will operate to limit the general clause of the transfer, and nothing will pass that is not so set forth or specified.

Burrill on Assignments (6 ed.), Sec. 286, p. 886; also Sec. 100 on page 142 and note 4 and authorities there cited.

In this case, there is a clear setting forth of the property specifically, which was intended to be assigned to Taylor. It designates the real estate, and describes it. It specifically names and schedulizes the personal property which was intended to be transferred. •

Burrill on Assignments (6 ed.), Sec. 119, at page 157, in note 2 says: “ If an assignment in trust does not, on its face, purport to be of all the assignor’s property, it will be treated as a partial assignment.”

A partial assignment, of course, then would be of the particular property described in the instrument.

Burrill on Assignments (6 ed.), Sec. 119, at p. 157, n. 3, says: “ An assignment which, on its face, purports to convey all the assignor’s property, when in fact he has other property not disclosed in the assignment, is void as against creditors; but if it does not so purport, it is valid, notwithstanding property may remain in the hands of the assignor unassigned, Pearce v. Jackson, 2 R. I. 35.”

This deed of assignment does not purport to convey and transfer all of the property from the assignor. In 1 Am. & Eng. Enc. Raw (1. ed.), 852, 853; also 3 Am. & Eng. Enc. Law (2 ed.) 36, the author says:

‘ ‘ A general assignment of all the debtor’s property will pass to the assignee everything which is by its nature assignable, except property specially exempted by law, or excepted by the terms of the deed or the schedule annexed, where the law allowed an exception.
“ Only such property will pass, however, as is embraced in the terms of the instrument, and the effects of an assignment purporting to be general will be modified by descriptive clauses, or a schedule, which operate to limit the property assigned to that described in them.”

We think this deed of assignment, designating as it does this specific property assigned to Taylor, did not cover this chose in action which was afterwards passed into a judgment in favor of the assignor; and, it being his property, it would be subject, of' course, to the action of general creditors. But, there are no general creditors contending for it, so far as the question is now presented for our consideration. It was, then, his property, unaffected by the deed of assignment. It was property that might be transferred or assigned; and, having been assigned by him to these claimants, we think they are entitled to that fund, so far as the assignee, Waldo Taylor, is concerned.. He could get nothing by virtue of the deed of assignment, or by virtue of his office, excepting the property which was assigned originally to Alonzo P. Taylor, because Alonzo P. Taylor’s rights fixed those of the trustees, Franklin, and also fixed the rights of the assignee, Waldo Taylor, defendant herein.

That being so, the answer and cross-petition of Waldo Taylor, assignee, will be dismissed. There will be a decree in favor of Margaret J. Shields and kudus B. Wing for the fund that is in the hands of Owens as trustee, awaiting the order of the court as to distribution, and this is the decree of this court.


author: GIFFEN, J.

text:
    DEDICATION — ESTOPPEL.
    [Hamilton (1st) Circuit Court,
    1902.)
    Giffen, Swing and Jelke, JJ.
    Lunkenheimer Co. et al. v. Cincinnati et al.
    1. Designating Public Square on Peat — Acceptance Necessary.
    Designating on a plat duly recorded as a “ public square ” does not vest title in the city unless such “ public square ” is accepted by ordinance or some other act.
    2. Levying Assessments Against Public Square — Estoppel.
    The levying of assessments against such “ public square ” for the improvement of an alley abutting thereon estops the city from appropriating the same to public use by accepting the dedication.
    3. Plaintive Entitled to Injunction Though not Owner in Pee.
    Under such a state of facts the plaintiff, owner of property abutting on the space designated as “ public space,” has obtained su*ch an interest therein as to entitle him to an injunction against interference with such interest, but not such an interest as to give him title in fee.
    HEARD on Error.
    P. J. Cadwallader and Ben B. Dale, for plaintiff in error.
    Chas. J. Hunt, contra.
   GIFFEN, J.

The' strip of ground in controversy was designated “ Public Ground ” on the plat of Jesse Hunt, the original proprietor, made in 1807; but the city of Cincinnati never accepted the dedication, if it be such, either by ordinance or other act. On the contrary, it levied and collected assessments for the improvement of the adjacent alleys upon the plaintiffs and their grantors as the owners of the land in dispute.

The testimony shows that the plaintiffs about the year 1881, erected and have since maintained valuable and permanent improvements on the premises and have ever since been in the actual, open, exclusive and adverse possession of the same. Prior to that time the possession was not exclusive and adverse, nor does the petition contain any such averment

It is claimed that these improvements were made only after obtaining the consent of the city, thereby recognizing its title; but on the contrary its knowledge of the character of plaintiffs’ possession together with the fact that it levied assessments against the plaintiffs and their grantors as the owners of the land should now estop it from appropriating the same to public use by accepting the dedication.

We think, therefore, the plaintiffs are entitled toan injunction as prayed for, although not the owners in fee as averred.