text:
    RESCISSION — VENDOR AND PURCHASER
    [Cuyahoga (8th) Circuit Court,
    1902.]
    Caldwell, Hale and Marvin, JJ.
    Catherine Galagher v. Samuel E. Dettelbach.
    Vendee May Recover Purchase Money Paid Under Voidable Contract.
    When a vendor elects to rescind a contract which is voidable under the statute of frauds, the vendee may maintain an action to recover from the vendor any purchase money which he may have paid under the contract without alleging that he himself is ready and willing to perform.

      James F. Walsh, for plaintiff in error.

      Carpenter & Young, for defendant in error.
   HALE, J.

The court of common pleas sustained a general demurrer to the petition and gave judgment for the defendant.

It is alleged in the petition that the defendant, on October 23, 1897, entered into a verbal contract with the plaintiff by the terms of which the defendant sold and agreed to convey to the plaintiff for the consideration of $2,475 certain described real estate, and that on said day the plaintiff paid to the defendant, on the agreed purchase price, the sum of $300. That the defendant elected to rescind said verbal contract, and, on April 6, 1898, conveyed said real estate to another and refuses to repay to the plaintiff said sum of $300.

This petition, we hold, states a cause of action.

One who has entered into a verbal contract for the purchase of real estate, voidable under the statute of frauds, and paid a portion of the purchase price, may not himself elect to rescind the contract, refuse to perform the agreement on his part, and by action recover the amount paid by him, the vendor making no default.

If, however, the vendor elects to rescind the contract or refuses performance on his part, and puts it beyond his power to convey the real estate in accordance with the terms of the verbal agreement, the purchaser may recover the money paid.

It being alleged that the defendant elected to rescind the contract, and conveyed the premises to another, it was unnecessary, to constitute a good cause of action, that the petition should contain the further allegation that the plaintiff had performed, or offered to perform, the contract on his part.

If the defendant has received from the plaintiff money upon a contract voidable at his election and has elected to avoid the. contract, he should refund the money so received.

The judgment of the court of common pleas is reversed, and the cause remanded for further proceedings.

Caldwell and Marvi-n, JJ., concur.


source: Caselaw Access Project

author: CALDWELL, J.

license: Public Domain

text:
    MECHANIC’S LIENS — PRINCIPAL AND AGENT
    [Cuyahoga (8th) Circuit Court,
    February 5, 1901.]
    Caldwell, Hale and Marvin, JJ.
    O.T. Lapham v. Fenton E. Spink et al.
    1. Presumption of Agency from Acts of Parties.
    An agency may be implied from the relationship and dealings of the parties; hence, when a son has permitted his father to have charge of certain property, collect rents, make repairs and alterations, without protest on his part, an agency to purchase materials for other repairs and alterations will he presumed.
    2. Mechanic’s Lien Valid Though Affidavit does not State True Owner of Property.
    An affidavit for a mechanic’s lien which states that the ownership of the property is in someone other than the real owner, does not thereby make the lien invalid when the property is properly described.
    Appeal.

      Frank Higley, for plaintiff.

      E. J. Thobaben and A. W. Myers, for defendant.
   CALDWELL, J.

Lapham brought an action to foreclose a mechanic’s lien on certain property of which the defendant is owner.

The evidence as presented, raises two questions for consideration, and these are questions of law as well as of fact:

First. Did the plaintiff furnish the materials for the building upon which he seeks to enforce his lien, under a contract with the owner?

Second. Did the plaintiff so perfect his lien that he is now entitled to a judgment in this case ?

In the lifetime of Mrs. Spink, who was the wife of R. E. Spink and the mother of Fenton E. Spink, this property was in her name and by the records she was shown to be the owner of the same; she died and Fenton E. Spink became the owner of the property subject only to the dower of his father, R. E. Spink. * R. E. Spink took upon himself, with his son’s consent, the entire management of the property and all improvements that were made upon the same from time to time, and collected and used the rents for his own purposes. While thus managing the property, he at one time made improvements upon the same by way of building a porch to the house, and contracted for the lumber and labor necessary for the erection of the same, with his son’s knowledge and acquiescence. Later and about the time that Lapham furnished material, R. E. Spink again made improvements upon the property. Those improvements consisted in laying walks from the street to the house, and steps to approach the house, and in making certain changes inside of the house.

The son knew that the father was about to make these improvements, and made no objection and in a very mild manner advised his father that he did not think that the changes inside of the house were necessary.

A mechanic’s lien was taken by the party who did the stone work, which lien the defendant has since paid.

Lapham, for the lumber and material that he furnished for the inside work, took a lien for such material, and that lien he here seeks to foreclose.

Under the statute of our state it is necessary that the party who is about to perform work or furnish material for an improvement of property of this nature, must have a contract with the owner; and the contention in this case is, that there was no contract with the owner; and that is based upon two propositions: first, that R. E. Spink was not the agent of the owner; second, that the defendant never assented to his making improvements upon the property.

The contract required by the statute is such a contract as may arise out of the facts, and need not be shown at all times by an express agreement.

That R. E. Spink contracted for this lumber for the improvement of this property, there can be no question, and, as we understand, no question is made upon that point. But it is contended that R. E. Spink was not the agent of the defendant.

To prove the fact of agency it often becomes necessary to show how the principal and one who is alleged to be his agent have acted toward each other.

In this case R. E. Spink had entire control of this property. He rented it; he collected the rents; he used them as he saw fit, with the consent of his son, and entered into such contracts as to the property, both as to renting and repairs, as to him seemed proper, and the son acquiesced at all times in such dealings on the part of his father.

We have no doubt but that under the circumstances the father was the agent of the defendant; although they might not have understood that relation to exist between them, yet in law that was the relation they sustained to each other.

It is said that R. E. Spink had no authority to bind his son in making the improvements that he made upon the property and that they were made without his knowledge and consent and, therefore, outside of any authority the agent had.

This contract of agency may be express or implied, and the question of the agent’s authority may also be express or implied. A very common way of showing that one who is said to be the agent of another had authority to do the act in question, is to show that prior acts of a similar nature had been done by the agent and approved by the principal.

In this cáse we find that R. E. Spink had built the porch Avithout any consultation with his son, and had bought the lumber, had overseen the work and had paid for the same out of the moneys belonging to the son. To all of this the son made no objection, but acquiesced in the same. The father contracted for the stone work at the same time that the present lien was created. The son knew that the father was making the contract; he knew that the stone was being furnished; he assented to the same being done and thereafter paid the lien that was taken upon the property for that work.

At the same time that the stone work was being done, the plaintiff was furnishing lumber for the improvement of the 'house; the son knew that the father contemplated doing the work; he did nothing more than to advise against it. After the father’s death he went on and completed the work, and for such purpose obtained other material from the plaintiff.

Under all this testimony, taking into consideration that it was a dealing between the father and the son, we think that the son acquiesced in the improvement that was being made and at the time of his father’s death made no objections to Lapham by reason of the fact that he had furnished material for such work, but, on the contrary, ordered more material from Lapham to complete the building. We think that the plaintiff has made out his ease in this regard and that he has established the fact that he furnished the material under a contract with the owner. Of course, what one does by an agent, he does himself.

The second question is: Was this lien so perfected as to now bind the property and enable the plaintiff to foreclose it against the defendant?

R. E. Spink in his lifetime bought the lumber that went into the property. Fenton B. Spink had inherited the property from his mother some years before these improvements were made.

When Lapham came to file his lien, he looked at the records and found that that property stood in the name of Mrs. Spink, and thereupon he made out his affidavit and lien, naming her as the owner of the property.

The statute does not require that in’ the affidavit that is filed to perfect the lien, the owner shall be named.

The statute of this state, as in many others, seems to regard the perfecting of the lien as a proceeding in rem against the property, and if the property is properly described and the other requisites of the statute are complied with, it is all that is contemplated to be done to perfect the lien.

If this contract was with the defendant, as we have found it was, then he is liable for this lumber, and notwithstanding he was not named as the owner of the property and another was named, because the property was described as required by the statute, we think, as against the defendant, the lien is good.

These statutes are now quite universally regarded by the courts as remedial in their nature, and are liberally construed, and the rule is that if anything is named by the statute as a condition precedent to the obtaining of a lien, such as furnishing the material under the contract and with the owner, that that must be complied with; but that, in taking the steps to perfect the lien upon the record, no error will be regarded as defeating the lien, unless it is such as is prejudicial to the ownér.

The error here complained of in no way prejudices the owner of the property.

If such a mistake should be made and innocent parties should obtain ah interest in the property, or a lien upon the same, without actual knowledge, questions of a different nature would arise, which it is not necessary to consider in this action.

We think, under the law and facts of this case, that the plaintiff has shown himself entitled to the relief which he asks and, in fact, the defendant does not seriously object to this, except that he thinks there was not fair dealing with his father on the part of Mr. Lapham; but the court is satisfied that the account is a just one and the plaintiff is entitled to the relief he prays for in his petition, at the cost of the defendant.

Hale and Marvin, JJ., concur.


author: HALE, J".

text:
    SALES
    [Cuyahoga (8th) Circuit Court,
    January 20, 1902.]
    Caldwell, Hale and Marvin, JJ.
    Standard Tobacco & Cigar Co. v. Leopold Loeb & Co.
    Contract of Sale Repudiated by Billing at Advance in Price.
    When a vendor ships goods to a vendee and bills the goods so shipped at a price in excess of that specified in. the contract of sale, and refuses to correct the invoice or recognize the existence of a contract to sell at the price actually agreed upon, he thereby repudiates the contract made, and if the vendee refuses to accept the goods there can be no recovery even at the agreed price.

      Gilbert <& Hills, for plaintiff in error.'

      Brewer, Cook &. McGowan, for defendant in error.
   HALE, J".

The plaintiff in error, is an Ohio corporation having its principal place of business in the city of Cleveland, Ohio.

The defendant in error is a partnership doing business in the city of Philadelphia, Pa.

The cause of action upon which the defendant obtained a verdict and judgment, is as follows:

“Plaintiffs for their cause of action say, that they are partners under the firm name and style of Leopold Loeb & Co., doing business in the city of Philadelphia and the state of Pennsylvania; that the defendant is a partnership organized and doing business under the laws of Ohio; that there is due plaintiff from defendant on an account, a copy whereof is hereto attached, marked Exhibit A, and made a part hereof, the sum of $584.76, with interest thereon from May 11, 1895; that said account is for goods sold and delivered as set forth in said Exhibit A, and that the same is now fully due and unpaid. ’ ’

Reference to the exhibit discloses' the fact that the cause of action was for fifteen cases of Little Dutch Tobacco sold by the defendant to the plaintiff at and for the price of eleven cents per pound to be delivered f.o.b. Philadelphia; the total weight of the fifteen cases being 5,316 pounds; payment to be made five months from date of sale.

The answer was a general denial and, upon the issues thus made, the ease went to trial.

The contract was made on November 16, 1894, and the goods shipped by the Baltimore & O. By. January 10, 1895.

It appears from the bill of exceptions that the alleged purchase of this tobacco by plaintiff was made by its agent, Henry E. Boesger, at the place of business of the defendant in Philadelphia.

The contract, if made, was for fifteen specified cases of tobacco then ■ in the warehouse of the defendant, which were designated and examined by the plaintiff’s agent. It was subsequently discovered that one of the cases, then designated, had been previously sold, for which another case was substituted by the defendant.

The plaintiff claims that the defendant not having delivered to the common carrier the identical cases sold, had not complied with their contract, and for that reason could not recover in this action.

This would be true unless the plaintiff had, before the shipment, consented or waived its right to object to such substitution. Whether such consent or waiver had been given was a question of fact to be determined by the jury. Upon this subject the jury were properly instructed. The evidence from which the jury found that such waiver had been made, was by no means conclusive, but was such that the verdict should not be disturbed and the judgment reversed for the reason that such finding was not supported by sufficient evidence. Whether the title passed to the purchaser before it had an opportunity to examine the goods substituted, is another question.

It further appears from the record that the defendant on January 10, 1895, delivered to the Baltimore & O. By. fifteen cases of tobacco, one of which was the case substituted as above stated, to be shipped to the plaintiff in Cleveland. At the same .time the defendant wrote to the plaintiff, enclosing an account .of the tobacco at eleven cents per pound. This letter bears date January 10, 1895, and reads as follows:

“Enclosed please find invoice for fifteen cases of leaf tobacco shipped today by Baltimore & O. By. as per order of Mr. Boesger.
“Thanking you for your order, and soliciting your further patronage, we are,
“Yours truly,
“Leopold Loeb & Co.

P. S. — Sample sent by express prepaid.

“L. L. & Co.”

On receipt of this letter and invoice, the plaintiff replied as follows:

“Cleveland, Ohio, Jan. 13, 1895.
“Messrs. Leopold Loeb & Co.,
“Philadelphia.
“Gentlemen: Mr. Boesger reported these goods bought at seven cents. Correct the bill, or they will be subject to your order. ’ ’

To this letter, there was no reply.

On January 17, 1895, the plaintiff again wrote to the defendant :

‘ ‘ The fifteen eases of Little Dutch are at the depot awaiting the reply to our letter regarding the price. ’ ’

On January 18,1895, the defendant, in answer to the plaintiff’s letter, wrote:

“We sold the Little Dutch to Mr. Boesger at eleven cents per pound marked weight. Knowing Mr. Boesger to be hard of hearing, we told him distinctly and as loud as we could talk, the price above mentioned, in presence of three people. Had the price been seven cents, we would not charge you eleven cents, as we do not do such business.”

On January 19, 1895, the plaintiff, answering this letter, wrote to the defendant:

“Mr. Boesger reported the purchase of the Little Dutch at seven cents per pound and so enterd it on stockbook. We can not use the tobacco at price billed, and would only accept it at the price named, seven cents.
“The shipment is at your disposal. We will refuse it.”

One of two propositions is true: Either the minds of the parties did not meet upon the terms of the contract of sale and there was no contract made by them; or one of the parties was insisting upon a contract known not to have been made, for, manifestly, no contract was made without the knowledge of both parties.

The jury found that the minds of the parties did meet and an agreement was made for the sale of the tobacco at seven cents per pound.

The court, in substance, charged the jury that defendant was entitled to a verdict if they found the parties agreed upon the price of the tobacco at either eleven or seven cents per pound.

It is not doubted that if one sues for goods sold, delivered to, and accepted by the purchasers at an alleged contract price, and the evidence shows that the contract price was less than that alleged, a recovery may be sustained at the less price.

It is established by the verdict of the jury that the defendant sold this tobacco for seven cents per pound and then shipped to the plaintiff, under an assumed contract of eleven cents per pound, and so notified the plaintiff by bill rendered and, on request, refused to correct the bill rendered and insisted that the contract price was eleven cents. The plaintiff then refused to receive the tobacco and so informed the defendant.

Under all the circumstances of this case we think the plaintiff was fully justified in refusing to receive the tobacco.

It is said that the tobacgo, under the terms of the contract,' was to be delivered by the seller f.o.b. Philadelphia, and when so delivered, the title passed to the plaintiff, and, thereafter, the rights of the parties must be settled in accordance with the contract.

In general, a delivery to a carrier for account and risk of the consignee is, in law, a delivery to the latter and a contract of sale complete by such delivery; but to pass title to the purchaser by such delivery it must be in exact compliance with the terms of the contract. A delivery to the common carrier under some other contract than- the one made, was not a delivery to the plaintiff. Quantity, quality and price are essential elements of a sale, and a shipment of tobacco, varying in any of these essentials from the contract made, was not a shipment under such contract.

By shipping at eleven cents per pound, the defendant repudiated any other contract. Especially is this true since the defendant expressly denied that a contract had been made at seven cents, or that a shipment had been made at that price before the shipment of goods reached the plaintiff.

The plaintiff denied that a contract of sale had been made at eleven cents.

The plaintiff was right in this claim; the defendant was wrong.

A reference to the correspondence will show that the defendant in most express terms repudiated the contract made, and insisted upon one entirely different. The result of this was to release the plaintiff from its contract. The defendant was the first to refuse performance of its contract, and thereafter was in no position to enforce it against the plaintiff. Had the defendant accepted and relied on the contract actually made, there would have been no contention between the parties.

The whole controversy arises out of the attempt of defendant to enforce a contract never made. But whether the claim made by the defendant was, in fact, a repudiation of its contract and should so be held as a matter of law, it is quite clear that such claim fully justified the plaintiff in refusing compliance on its part.

Again, it seems to be definitely settled that if fifteen eases of tobacco ordered by the plaintiff of the defendant, to be shipped f.o.b. and of a certain quality, without any specification or designation of the goods purchased, the title would not pass on shipment until the purchaser had an opportunity of inspecting the goods.

In this ease the goods actually purchased were not delivered to the purchaser. Other goods were substituted for one case of tobacco purchased; this was done without any express agreement of the part of the purchaser. The most that can be claimed in behalf of the defendant is that there was a waiver by plaintiff of the right to object to such substitution. But surely the plaintiff had the right to examine the substituted goods, that it might determine for itself whether the goods substituted were of the same quality as those purchased, before title passed to it under the contract.

It would, therefore, seem unjust and unreasonable to hold that the title to this property passed to the plaintiff by delivery to the common carrier under the circumstances disclosed in the evidence. The defendant should not be permitted to repudiate the contract made, refuse the offer of the plaintiff to comply fully with the exact terms of sale, and then, when beaten in this wrongful attempt to enforce a different agreement than the one made, be permitted to recover on a contract which it had expressly repudiated. Our judgment is that upon this subject the charge of the court was misleading and, therefore, erroneous. We find no other error in this record.

The judgment of the court of common pleas is, therefore, reversed, and the cause remanded for further proceedings.

Caldwell and Marvin, JJ., concur.


text:
    CORPORATIONS
    [Cuyahoga (8th) Circuit Court,
    March 18, 1901.]
    Caldwell, Hale and Marvin, JJ.
    N. P. Bowler v. Rorert Garland, et al.
    Director of Corporation Chargeable with Notice as to Financial Condition of Company and Its Business.
    A director of a corporation is conclusively presumed to have knowledge of the financial condition of the company and of the existence and non-performance of a contract of the company which he has guaranteed; he, therefore, can not defend an action upon such guaranty, upon the grounds that he was not given notice of default on the part of the company until it had become insolvent, or that the time for the performance of the contract had been extended without his knowledge or consent.

      White, Johnson, McCaslin & Cannon, for plaintiff in error.

      Louis J. Grossman, for defendants in error.
   CALDWELL, J.

On June 6, 1895, the Garland Chain Co. entered into a contract by which the Cady Manufacturing Co. agreed to furnish two machines for making chains — one for making Eureka chains, and one for making pump chains. The machine for making pump chains was furnished, and this litigation does not pertain to that machine.

For the Eureka chain machine, $1,010 was to be paid. It seems that this was not a known machine, but it involved invention, and there seems to have been some doubt in the minds of the contracting parties as to just how soon the machine could be furnished.

The contract provided that the party to receive the machine was to pay at certain times certain money upon the contract and, if the machine was not furnished according to the contract, then this money was to be paid back, and N. P. Bowler guaranteed the fulfillment of the contract as to paying back the money, in the following words:

“I hereby guarantee that in event of. a nonfulfillment of this contract as relates to machine for making Eureka chain, that all money paid in advance on the machine for making the Eureka chain will be returned. ’ ’

The Eureka Chain Co. was insisting upon a more speedy fulfillment of the contract, and the time in which the contract was to be completed had passed, and the parties were corresponding in regard to the matter; the Eureka Chain Co. insisting upon having the machine, and the other party delaying, until finally on June 18, the Cady Manufacturing Co. sent this telegram :

“Working hard on machine. Probably thirty days. Have written.”

And on the same day they wrote this letter:

‘1 The way it looks to me now, I have no doubt but we will be able to fully complete the machine inside of thirty days from date. We think, in fact, we know you will be repaid for all of your vexation and worry when you receive this machine and get it running in your shop.”

And on June 18, 1896, the Garland Chain Co. answered the above telegram as follows:

“Your telegram is just received. This telegram is about the twelfth promise you have made of precisely the same nature. We will give you thirty days now to complete the contract and in case the same is not then in such shape that we-can know definitely you are working on it with some progress, we will put the matter in the hands of another party and see why a person can enter into a contract without regard to its terms or conditions.”

Mr. N. P. Bowler was the grandfather of Mr. George H. Bowler, and he was an owner of stock in the company, and the evidence shows that he was a member of the board of directors, but rarely attended the meetings and knew nothing of the progress being made on the machines.

It is claimed that the evidence shows that at the time the machine should have been completed in November, 1895, and for months afterwards the Cady Manufacturing Co. was solvent, and had notice been given Mr. Bowler at that time of the failure of the Cady Manufacturing Co. to fulfill its contract, that he could have saved himself from the loss upon his guarantee. And it is claimed he got no notice of such failure to comply with the contract until after the Cady Manufacturing Co. had become insolvent, and that whatever he must pay upon this contract, will be a loss to him as he can never make it good with the company. It is claimed from this evidence that Mr. Bowler was discharged:

First, by failure to notify him of the default of the company;

Second, by the extension of time, or rather, as it is called, the malting of the new contract in June, 1896, at which time the Garland Chain Co. made an offer to the Cady Manufacturing Co. to extend the time thirty days; ' -

Third, it is claimed that there was error on the part of the court trying the case, in rulings upon the evidence, to the prejudice of the plaintiff in error; and,

Fourth, that even if Mr. Bowler is liable, the judgment was for too large an amount.

I will consider these complaints in the order in which I have named them.

The first is, that Mr. Bowler was prejudiced by not being notified of the failure of the Cady Manufacturing Co. to perform the contract within the time limited by the contract, and that by delaying to serve him with such notice until the company became insolvent, he is discharged from his obligation.

Although Mr. N. P. Bowler was a director in the Cady Manufacturing Co., he did not attend the meetings of the company except on very rare occasions, and did not have any notice of the solvent or insolvent condition of the company, nor have any notice of the non-fulfillment of this contract.

This was a matter that pertained from first to last to the duties of the directors of the company. It was not a mere matter of business, as shown by the books of account of the company, but pertained to a contract made by the company and, hence, presumed to be made by the directors of the company, and they were charged with the duty of seeing that it was fulfilled, and of knowing when it was fulfilled. The,question to be considered under this head is whether Mr. Bowler must be held to have knowledge of this class of business which pertained to the duties of the directors of the company.

In Merchants’ Bank v. Rudolf, 5 Neb., 527, 540 and 541, the judge delivering the opinion quotes this language from Morse, Banks and Banking, pp. 90 and especially 115:

“Whatever knowledge a director has, or ought to have, officially, he has, or will be conclusively presumed at law to have, as a private individual. In any transactions that the bank, either on his separate account, or where others are so far jointly interested with him that his knowledge is their knowledge, he and his joint contractors will be effected by this knowledge which he has or which he ought, if he had duly performed his official duties, to have acquired.” Citing Lyman v. United States Bank, 53 U. S. (12 How.), 225 [13 L. Ed. 965],

Then, applying the law to the case before the court, the court say:

“Rudolf and Deck were copartners and as such signed the note in question. It is a settled rule that notice to one member of a firm is sufficient to bind all the. other members. Rudolf was also an active member of the board of directors of the bank and it was his duty to know whether this note was paid or not. The conclusive presumption is that, as a director, he knew it was not paid; this knowledge is chargeable to him as a private person, and also as a member of the firm of A. C. Rudolf & Co.”

In Martin v. Webb, 110 U. S., 7 [28 L. Ed. 49], in speaking of how far the bank was bound by the conduct of its officer, the court say:

“When during a series of years or in numerous business transactions, he (the officer) has been permitted without objection and in his official capacity, to pursue a particular course of conduct, it may be presumed, as between the bank and those who in good faith deal with it upon the basis of his authority to represent the corporation that he has acted in conformity with instructions received from those who have the right to control its operations. Directors can not, in justice to those who deal with the bank, shut their eyes to what is going on around them. It is their duty to use ordinary diligence in ascertaining the conditions of its business, and to exercise reasonable control and supervision of its officers. They have something more to do than, from time to time, to elect officers of the bank, and to make declarations of dividends. That which they ought, by proper diligence to have known as to the general course of business in the bank, they may be presumed to have known in any contest between the corporation and those who are justified by the circumstances in dealing with its officers upon the basis of that course of business.”

In German Sav. Bank v. Wulfehuhler, 19 Kan. 60, the first paragraph of the syllabus is:

“A person who holds the office of director and vice-president of a bank and at the same time has private and personal dealings with the bank, is conclusively presumed to know (so far as the same effects his said personal dealings), the general condition and management of his bank,- and to know everything of importance that occurs therein, either at the time it occurs, or soon thereafter.”

The court, on page 63, at the bottom, use this language:

“While we assume, as a matter of fact, that the defendant knew nothing of the condition or management of said bank, yet still as a matter of law we think we must presume that he knew all about these matters. He was a director and the vice-president of the bank, and it was his duty to have such knowledge, and, therefore, the law will conclusively presume that he had it. ’ ’

And as dealing very directly upon the knowledge of solvency and insolvency so far as that may be involved, I refer to the case of Lowry Banking Co. v. Empire Lumber Co., 91 Ga., 624 [17 S. E. 968], where this language is used:

“As it is the duty of the directors of a corporation to be informed of its condition with reference to solvency or insolvency, they are to be treated as having that knowledge when a mortgage upon its assets is executed with their assent or by their authority.” Lane & Co. v. Bank of West Tennessee, 57 Tenn. (9 Heisk), 419-437.

In Greenville Gas Co. v. Reis, 54 Ohio St. 549 [44 N. E. 271], the court say:

“A director of a corporation dealing in its property on his own account, is chargeable with notice of the action of the board of directors as to such property, whether he was present or not at the meeting which took such action.”

In this case, a bond was delivered by the board of directors to the president of the corporation in trust for sale, and it was held, that the president had no right to convert such a bond to his own use in payment of a claim due him from the corporation. He assigned this to two parties, one of whom was a director and the other a stockholder in the company issuing the bond; the action taken by the corporation in placing the bond in the hands of the president was not known to Reis and he was not present at the meeting when the action was taken by the board of directors and hence he claimed that he stood in the light of an innocent purchaser for value and without notice of the trust. It seems that they had taken this as collateral security to indemnify them against loss as sureties of John Dover, to whom the bond had been transferred. Shuffleton was a director, and Reis was a stockholder, and the record shows that Mr. Shuffleton was not present at the .meeting at which the resolution was passed^ authorizing the issuing of the bonds, and the court holds that that does not aid him. The court says:

“When it comes to dealing in the property of a corporation, the director is charged with notice of all that has transpired at the meetings of the board of directors. He is not allowed in such case to plead ignorance or want of notice or knowledge.”

And in laying down the law of the case, the court cited Brown, Ex parte, 19 Beav. 97, the substance of which is:

“As regards the directors of a company the case stands on a totally different footing from where it does where the party is a stockholder. A person, when he becomes a director, accepts a trust which he undertakes to perform for the benefit of the company. If in the due performance of that trust, he must necessarily have acquired certain knowledge, it appears to me but fit that he should be charged with the knowledge of those facts which it was his duty to have become acquainted with. It is merely saying that a person shall be held to know that which it was his bounden duty to know. It appears to me that Mr. Brown was bound to know what took place at the meetings of the board of directors, of which he was a member.' ’

And Mr. Brown in that ease was held to have such knowledge:

There are many other eases in which this doctrine has been laid down and applied to the facts in the case; and from this law we are satisfied that, in law, Mr. N. P. Bowler must be held in this case to have had knowledge of the existence of this contract, of its non-performance, and of the correspondence that took place in regard to its non-performance after the time in which it was to be performed by the terms of the contract; and that he must be presumed to have knowledge of the financial condition of the company at all times involved in this litigation, and according to these authorities, this presumption is one that is conclusive upon him, one that he can not deny; and if this is the law of the case, then the errors complained of as to the rulings of the court on the introduction of testimony are immaterial, as they can in no way affect the conclusion of the law to be drawn in the case at bar. But it is contended by Mr. Bowler that there was an extension of time, which extension took place without his knowledge and without his consent.

The above authorities lead us to the conclusion that, in law, Mr. N. P. Bowler did have notice as to the continuance of the time for the fulfillment of the contract, and there is plenty of law which we have seen and examined, going to show that if he is present or not present at the meeting in which a board performs an act and he does not show that he did not assent to that act and that he was not present, that the presumption will be that it was by the assent of the entire board; and upon these authorities, we are of the opinion that if there was an extension of time in this case, it would be no defense to Mr. Bowler and that he would be presumed to have assented to the same.

Although this business was not transacted by the board of directors, yet if it was making a new contract, or an extension of a contract, or an extension of time in the contract already made, it is the business of the board of directors, and while they may delegate the authority to do that business to other officers of the company, yet, in law, they are presumed to have done it themselves, and whatever knowledge they, or any one of them, would have obtained in the performance of that business, they will be charged with such knowledge in questions arising out of the same. If there was a new contract in this case, and supposing that the directors themselves had made that contract, then each director, whether present or not at the time of taking such action, would be presumed to know what was done at that meeting, and this is a conclusive presumption and, if nothing to the contrary is shown, it will be presumed that all the directors assented to such action and, if Mr. Bowler assented to the continuing of the time of the fulfillment of this contract, either by an extension of such time, or by a new contract, we think the law is that he will be held to have assented to such extension of time. But we fail to see any agreement in the evidence for an extension of time. I have referred to the correspondence relating to such extension as is claimed — and this contract or this extension was entirely in correspondence — and I have made such reference in view of what I now have to say.

First a telegram was sent, suggesting that thirty days would be time enough to complete the contract. To that the Garland Chain Co. answered that they were willing to give them an extension of thirty days in which to complete the contract. There is nothing in the evidence to show that the Cady Manufacturing Co. had asked for thirty days, nor is there anything showing that they agreed to complete the contract in the thirty days. All that we find is suggestion that thirty days would be sufficient, and an offer to give that thirty days; nothing so direct as to show that the Cady Manufacturing Co. had anywhere bound itself to complete the contract within the thirty days, nor to show that they had even asked for an extension of thirty days. Hence, under that state of facts, when the Garland Chain Co. offered to give the thirty days, in order to make a binding contract it would be necessary for the Cady Manufacturing Co. to accept that proposition. We see no acceptance in the bill of exceptions of that proposition, nor anything that may imply an acceptance.

The evidence complained of was introduced as bearing upon the question of notice, and, as we hold that N. P. Bowler had notice, as a conclusion of law, from facts not disputed in the record, such errors, if there were any, are not prejudicial.

There is an. error in the judgment of the common pleas court in that Mr. Bowler is charged with too much interest. The testimony in the case shows that the Garland Chain Co. was doing all it conld to have this contract fulfilled, long after the time of expiration of the contract by its terms, November 6, 1895, and they made no demand upon Mr. Bowler, or anything that could be construed as a demaud, until the fall of 1896, nor is there anything in the record to show that before that time they made any call for the return of the money they had paid and hence the money would not be due until about that time. December 8,1896, the Garland Chain Co. wrote a letter to N. P. Bowler in which they say that they have been informed of the assignment of the Cady Manufacturing Co. and ask for the return of the money paid to it. Up to that time the Garland Chain Co. was exercising patience with the Cady Manufacturing Co. and trying to get the machine, instead of having the money returned, and, until then, there was no notice to any one that they demanded the return of the money, and interest should commence to run on the amount advanced by the Garland Chain Co. from December 8, 1896, and the judgment of the court below is modified so as to exclude all and any interest prior to that date.

With this modification the judgment of the court below is affirmed.

IIale and Marvin, JJ., concur.


author: HALE, J.

text:
    CONSTITUTIONAL LAW
    [Cuyahoga (8th) Circuit Court,
    June 25, 1904.]
    State, ex rel Gindelsperger, v. Robert C. Wright, Aud.
    Law to Compensate an Individual Not Law of General Nature.
    Laws passed iu the fulfillment of an obligation of the state or any of its agencies to an individual with respect to past transactions, are not laws of a general nature controlled by Art. 2, Sec. 26 of the Constitution of Ohio.

      C. A. Neff, for plaintiff.

      C. W. Stage, for defendant.
   HALE, J.

It appears from the petition that prior to August 7, 1899, the jurisdiction of the Cleveland City board of elections by stat-u.te extended to the entire county of Cuyahoga. In the case of State v. Buckley, 60 Ohio St. 273 [54 N. E. 272], this statute extending the jurisdiction of the city board beyond the city limits was held by the Supreme Court to be invalid. Thereupon on August 7, 1899, deputy state supervisors were appointed for the county of Cuyahoga by virtue of a statute under which deputy state supervisors were appointed for all the counties of the state, with the exception of Hamilton and Cuyahoga counties. These counties were excepted from the operation by the terms of that statute. The deputy state supervisors draw such compensation as was then provided by the statute for deputy supervisors throughout the state. This compensation was entirely inadequate for the services required to be performed in Hamilton and Cuyahoga counties.

On April 10, 1900 [94 O. L. 549], the legislature of the state passed an act providing for the additional compensation to be paid to the supervisors of these two counties. The state supervisors of Hamilton county draw the additional compensation provided by that act without objection. The state supervisors of Cuyahoga county were less fortunate. Objection was made to the receipt of the additional compensation provided by that act, and sustained by the Supreme Court. That court held that the act by which it was attempted to provide such additional compensation was unconstitutional, for the reason that it was not passed bjr two-thirds vote of the two houses of the legislature.

On April 23, 1904 (97 O. L. 624), an act similar in all respects 1o the act of April 10, 1900, was passed by the legislature, and by a two-thirds vote. That act is in terms as follows:

“Suction 1. That each of the deputy state supervisors for the conduct of elections in Cuyahoga county, appointed, qualified and acting as such prior to August 6, 1900, for services rendered by them prior to August 6, 1900, shall be paid, in addition to the sum already allowed to them by law, the sum of $800, to be paid out of the county treasury of Cuyahoga county as other county expenses, upon vouchers approved by the deputy .state supervisors of elections for Cuyahoga county, and the county commissioners of said county shall make the necessary levy to meet the same. And the clerk of said deputy state supervisors, elected, qualified and acting as such prior to August 6th, 1900, for services rendered during the same time, shall be paid the sum of $100, to be paid out of the said county treasury as other county expenses, upon voucher approved by the deputy state supervisors of elections for Cuyahoga county and the said county commissioners shall make the necessary levy to meet the same. ’ ’

The petition shows that the relator, during the time covered by this statute, acted as one of the deputy state supervisors for Cuyahoga county; that he has demanded of the auditor a warrant upon the county treasury for the sum named in said statute, which the auditor refused and still refuses to draw. The object of this petition is to compel the issuing of such a warrant to the relator.

This act attempts, as did the act of April 10, 1900, to provide additional compensation for deputy state supervisors serving in Cuyahoga county prior to August 6, 1900.

We reached the conclusion in our investigation of the act of 1900, that the claim made by the relator and others was just and reasonable; that the legislature was fully justified in providing for the additional compensation, if it could be done legally. The only specification on which the former act was declared to be unconstitutional was that it had not been passed by a two-thirds vote. That objection does not lie against the present law. It was passed by a two-thirds vote.

First, it is said that this act is obnoxious to Art. 13, Sec. 1, of the Constitution, which provides that the general assembly shall pass no special act eonferx’ing corporate power.

It is a sufficient answer to this objection, that the county upon whom the burden of paying this claim sets is not a corporation, and the transaction not within the terms of the clause of the Constitution above quoted.

Again, it is said that the act is obnoxious to Art. 2, Sec. 28, of the Constitution, being retroactive.

Again, it is said that it is obnoxious to Art. 2, Sec. 26, which provides:

“All laws of a general nature shall have a uniform opera*tion throughout the state, nor shall any act, except such as relates to public schools, be passed to take effect upon the approval of any other authority than the general assembly, except as otherwise provided in- this constitution. ”

Article 2, Sec. 28, reads:

“The general assembly shall have no power to pass retroactive laws, or laws impairing the obligation of contracts; but may, by general laws, authorize courts to carry into effect, upon such terms as shall be just and equitable, the manifest intention of parties, and officers, by curing omissions, defects, and errors, in instruments and proceedings, arising out of their want of conformity with the laws of this state. ’ ’

These two sections are immediately followed by Sec. 29, which reads:

“No extra compensation shall be made to any officer, public agent, or contractor, after the service shall have been rendered, or the contract entered into; nor shall any money be paid on any claim, the subject-matter’of which shall not have been provided for by pre-existing law, unless such compensation, or claim, be allowed by two-thirds of the members elected to each branch of the general assembly.”

It is manifest that See. 29 provides for a definitely defined case not controlled by Secs. 26 and 28. It provides for extra compensation to an officer, to a public agent, to a contractor. In each instance it is manifest that the constitution was intended to confer upon the legislature power to grant extra compensation to the individual for services rendered or contracts entered into. Such object can only be attained by a special act.

Laws providing compensation for services of an officer undoubtedly are laws of a general nature and should have a uniform operation throughout the state. Laws passed in the fulfillme : < r an obligation of the state or any of its agencies to the individual with respect to past transactions are not laws of a general nature, controlled by Art. 2, Sec. 26. With the restriction that the act must be passed by a two-thirds vote of the legislature, it becomes, when so passed, a binding act. It is difficult to see why an act, passed for the purpose of compensating an individual for services rendered the state should be held to be a law of a general nature. The very nature of the transaction forbids such holding. The subject-matter covered by the statute is a single transaction between the state and the individual and in no sense a law of a general nature. If this law is not an act of a general nature and not retroactive in its operation, then it is a valid enactment.

The demurrer to the petition is overruled.

Winch and Laubie, JJ., concur.


author: MARVIN, J.

text:
    FALSE PRETENSES
    [Cuyahoga (8th) Circuit Court,
    November 24, 1905.]
    Marvin, Winch and Henry, JJ.
    Nathan Zuckerman v. State of Ohio.
    1. Payer’s Being Engaged' in Unlawful Business not Defense to Prosecution of Payer for Obtaining Money Under False Pretenses.
    That the person from whom money was obtained by false pretenses was engaged in an unlawful business and that the money paid was for the purpose of securing immunity from police prosecution, is no defense to a criminal prosecution for obtaining the money by the false pretense that the defendant was an officer of the law.
    2. That Representations as to Present Fact is Coupled with One as to Future Performance Immaterial.
    In a criminal prosecution for obtaining money by false pretenses it is immaterial that the false representation as to an existing fact is coupled with a representation that the one making the representation will perform some service in the future.
    3. Evidence of Like Representations to Others not Admissible in Prosecution for Obtaining Money under False Pretenses.
    Evidence that one accused of obtaining money by false representations, had made like representations to other persons from whom he had attempted to obtain money, is not admissible.
   MARVIN, J.

Zuckerman was prosecuted in the police court of Cleveland under See. 7076 R. S. (Sec. 13104 G-. C.), for obtaining money under false pretenses. He filed a petition in error in the court of common pleas, and upon hearing there the judgment of the police court was affirmed. Petition in error is filed here, seeking to reverse the judgment of the two lower courts. The affidavit upon which Zuckerman was prosecuted charged him with having obtained from one Fanny Weinstein $10; that she was about to engage in an unlawful nefarious business in this city, and that Zuckerman falsely represented to her that he was an officer, to wit, a, chief of detectives,- and that he would be able to protect her from prosecution if she would pay him $25, and that she paid him $10 of that sum of $25, of which $5 was paid at the time of the first conversation and $5 more on the next day; that Zuckerman was not such officer as he represented, and could not protect her.

It is urged, first, that it was not an offense for which Zuckerman could be prosecuted; that the representations were made to one who was seeking protection for the carrying on of an unlawful business, and that the obtaining money from such a one upon the representation that he could protect her would not be a violation of the statute, which reads: “Whoever by any false' pretense, with intent to defraud, obtains from any person anything of value,” etc., “shall, if the value of the property or instrument so procured, sold, bartered or disposed of, or offered to be sold, bartered or disposed of, is thirty-five dollars or more,” and then follows the punishment.

We do not understand the law to be as claimed here. We understand that to obtain money by false pretense from one engaged in an unlawful business to be as much a crime as to obtain it from anybody else. One may not be relieved from prosecution for larceny because the party from whom he steals the money is himself a thief. One may not be relieved from the crime of murder because the one whom he killed was himself a murderer. The fact that this woman was engaged in an unlawful business and that she sought to be protected in that does not relieve Zuckerman from prosecution when he obtained money from her by the false representation that he was an officer. True, she could maintain no action against him to recover the money, but that does not determine whether a crime has been committed by him.

It is said, further, that this money was obtained for a thing to be done by Zuckerman in the future, to-wit, protect her from interference of the police in the carrying on of her unlawful business. But the evidence is that he represented at the time he talked with this woman, Fanny Weinstein, that he then and there was an officer and would be able to protect her, and in addition to that, that he would protect her. Is it to be said that because of the thing one says he will do and a part of the false representations that- he made is that he will do something in the future, that that will relieve from crime when a part of the thing that he says is then and there an existing fact when it is not ? It seems to us that one might as well say that, if, on alighting from a train at the depot, one should come up and say, 1 ‘ That is my coach which stands there; you give me fifty cents and I will get your trunk and take it to the hotel,” and you give him the fifty cents. It is true, you do so on the representation of two things. One is because he says “That is my coach” and the other is because he says “I will carry your trunk to your hotel.” You give him the fifty cents on the representation that it is his carriage. These illustrations might be multiplied to show that where the representation is of an existing fact and one says he will do something in the future one is not relieved from prosecution.

We hold that the objection to the affidavit in either of the regards to which attention has been called is not sound.

A large number of objections were made to the introduction of evidence and exceptions taken to admissions of evidence. We do not stop to consider all of these, but we stop to consider the ruling of the court upon the admission of certain testimony given by Fanny Grosstein and Edith Green. Each of these witnesses testified that she was engaged in the same nefarious business with the prosecuting witness and each was permitted to testify over the objection of the defendant that Zuekerman had solicited from her money and made the same representation to her which it is said he made to Weinstein.

It is insisted on the part of the defendant in error that, under the authority of Tarbox v. State, 38 Ohio St. 581, this was admissible. In that case the syllabus has on this subject only the following .-

“3. Where in a trial upon an indictment it becomes material to prove, upon the part of the state, that a conspiracy existed between persons jointly indicted, evidence that the same persons were, shortly prior to the time of the alleged crime, engaged in a conspiracy to commit crimes of a like character, is competent.”

The court, in speaking of that, says:

“Did the court err in admitting evidence of similar offenses by the same parties, shortly prior to this time in Detroit? We think not. If admissible for any purpose there was no error in refusing to exclude it. We think it was competent for the purpose of showing a conspiracy between the defendants, and also to show knowledge of the falsity of the representations at the time when made. The court in its charge instructed the jury to consider it for no other purpose, and no exception was taken to the instruction.”

Upon the strength of that case it is urged that it was competent to show by Fanny Grosstein and Edith Green that Zuckerman had made the same false representations to them. It seems to us that it was clearly erroneous to admit that evidence. The ground upon which such evidence was admitted is to show knowledge of the one charged with crime that his pretenses were false, because it is necessary to show that one not only made false representations, but that he knew they were false at the time he made them, and that he made them for the purpose of deceiving. But here there was no occasion to introduce the testimony of anybody for the purpose of showing that Zuckerman knew it was false. If he made the representations, he knew they were false; there is no occasion to prove by anybody else that he knew they were false. If a woman such .as Solomon speaks of, ‘ ‘ whose mouth is full of deceit and whose lips speak lies continually,” thinks she can prop up her case by bringing in others of the same character to-support what she says — that is passed upon in the case of Barton v. State, 18 Ohio, 221. Barton was tried for horse stealing. On the trial of the ease the court held that it was error to permit evidence to go to the jury that just before defendant committed this crime he committed another larceny. On page 223 this language is used by the court:

‘ ‘ Another error assigned is the admission of evidence going to show that the defendant had committed a larceny the night previous to the day on which he is charged with committing this offense.
“This, we think, was clearly erroneous. It is never admissible to prove that a person has previously committed a crime of a similar character, to show that he committed the criminal act for which he is on trial; and although the court, in this instance, says that the evidence was only admitted for the purpose of showing the intent with which the defendant got possession of the property, yet we do not see any connection between the two transactions, that would enable any legitimate conclusion to be drawn as to that fact. The only conclusion that we can see, that .could be fairly drawn from the evidence, would be that the defendant intended to steal the horses and other property with which he was charged, because he was a thief, and had just before stolen a sum of money.”

In Farrer v. State, 2 Ohio St. 54, Farrer was prosecuted for administering poison to one whereby death resulted and the court permitted evidence that she had administered poison to other people, and put it upon the ground that it was admitted that she knew this was poison. The Supreme Court in discussing it, says, page 74:

“The state is bound to prove the scienter because money is so skilfully counterfeited, that there is no one who is liable to be deceived by it. No presumption whatever of guilty knowledge arises from the bare fact of passing a counterfeit coin or note, unless, which is but seldom the case, its baseness is apparent, and the person receiving it is a fit subject for imposition.
“But how is it with respect to the nature of arsenic? Is it not undeniable, that the fact is almost, or quite, as well known, to people generally, that arsenic is a deadly poison, as that a dagger, or a gun, is a deadly weapon ? I think it is, ’ ’ etc.

Then he says:

“The effect of such testimony is obvious. It comes upon the accused without any notice whatever; it finds him without any preparation to meet it, and unable, perhaps, from that very want of preparation, to rebut it, however innocent he may be; it convinces tbe jury that he was the poisoner in the particular case under consideration, though it was admitted for no such purpose; and this conviction, charge what the court may as to the proper effect of the testimony, hangs with a deadly weight upon the prisoner’s defense.”

We think it was clearly erroneous to admit the testimony of those persons whose names have been given. For that reason the judgment is reversed and tbe ease remanded.

Winch and Henry, JJ., concur.


text:
    WILLS
    [Cuyahoga (8th) Circuit Court,
    November 7, 1900.]
    Caldwell, Hale and Marvin, JJ.
    William Boepple v. Anna M. Mellert et al.
    Admissibility of Declarations of Testator.
    Declarations of a testator, made before or after the making of the will, if made near such time, are admissible to prove the state of mind of the testator, but not to prove the fact of undue influence.
    Council.
   CALDWELL, J.

This action is brought in this court on a petition in error to reverse the judgment of the court of common pleas, in which court the will of the mother of the plaintiff in error was set. aside.

The testatrix had several children living at the time of her death. She left her property to her son William, the plaintiff in error, by will, and the action in the common pleas court was brought by the disinherited children to set aside the will.

The plaintiff in error says the court erred in its charge to the jury. We find no error in the charge.

The plaintiff in error says the verdict is against the evidence. The verdict is the only one the jury could be, in any way, justified in finding.

The grounds in the petition for setting aside the will are: first, mental incapacity; second, undue influence on behalf of William.

Complaint is made of the court below in that it erred in its ruling on the admission of testimony. This complaint pertains mostly to the declaration of the testatrix made both before and after the making of the will; but being made near the time of making the will, there is no just cause of complaint by reason of remoteness.

Complaint is also made of rulings as to the evidence of a family quarrel, wherein the court allowed William’s rough treatment of his father to be shown.

It is the. rule that in an issue of undue influence the relations of the members of the family to each other may be shown.

The contestants, to make their case out, undertook to show that William, to get the will as he wanted it in his favor, excluded the other members of the family from the mother; then brought her under his influences, and overcame her free agency in making her will. This plan of his involved three steps: (1) excluding by violence all other members of the family from his mother; (2) by such violence and other means bringing his mother completely under his control; (3) thus overcoming her -mind, and procuring the will as he wanted it and not as she might wish to make it.

While these three propositions are so blended as to show one continued line of conduct to reach his ultimate purpose and are to be considered for the purpose of determining the materiality of the abuse of his father, and the court so considered it, it clearly appears that such testimony was entirely competent.

It is claimed that the court erred in admitting certain declarations of the testatrix for the purpose of proving the fact of undue influence.

The court followed the true rule of law in regard to such declarations in its charge to the jury; and, if the court erred in its rulings on the admissibility of such declarations, it was not because the court did not know the rules of law, but it was because the court erred as to what the admissions tended to prove. The law is, that declarations of the testatrix, made before or after the making of the will if made near such time, are admissible to prove the state of the mind of the testratrix, but are not admissible to prove the fact of undue influence. If the declarations tend to prove both the fact of undue influence and the state of mind of the testatrix, then the court must admit the testimony and instruct the jury that it can consider the declarations only so far as they tend to prove the state of mind of the testatrix. The trial court impressed upon the jury in a very clear and emphatic charge, the true rule as to how far it could use such evidence. When these rules are borne in mind, it will be seen that the trial court’s rulings were correct. The only one as to which there can be any question, is what the testatrix said about why the revolver came to be in her bed. This testimony tends to show that she had such fear of William, that she was afraid to move it — which would be mental state; or that he had so far overcome the natural affections of her heart for her other children, that she was willing and ready, in her then mental condition, to keep the revolver in her bed for the purpose of keeping the children out of her sick room.

Which ever of these propositions would express her feelings, would tend to prove her state of mind towards her other children, and for that reason the testimony is admissible. And the court, having guarded the jury as to how far and for what purpose it could use such testimony, in a manner that the jury could not possibly have misunderstood, it seems to us that the trial below was a fair one; that -the proper judgment was entered under the evidence in the case; and that there was no error on the part of the court, either in the charge or in the admission or rejection of testimony, and the judgment is affirmed.

Hale and Marvin, JJ., concur.


text:
    CARRIERS — SALES
    [Cuyahoga (8th) Circuit Court,
    March 21, 1900.]
    .Caldwell, Hale and Marvin, JJ.
    A. Jacobs v. Moritz Kollander.
    Goods Forwarded under Privilege of Purchase Lost in Transit.
    When goods are sent to a prospective purchaser from which he is to select such as he desires to purchase and return the others to the owner upon demand, and the prospective purchaser elects not to keep any of them, apd after waiting a reasonable length of time ships the goods to the owner without demand having been made, he is not liable for the loss of the goods in transit.

      Kerruish, Chapman & Kerruish, for plaintiff in error.

      E. Joseph, for defendant in error.
   HALE, J.

Kollander is in tbe jewelry business in New York; Jacobs is in the same business in Cleveland. An uncle of Kollander applied to Jacobs to have him buy goods from his nephew in New York. Jacobs intimated that if he could have the goods to look over, he might buy them. The uncle of Hollander wrote to him, and upon receipt of the letter Hollander sent the goods to Jacobs with a writing which is claimed constitutes the contract between them. The substance of the letter is that Hollander sent the goods to Jacobs, and Jacobs was to look them over and what he concluded to buy he was to take, and any or all that he did not want to buy, he was to deliver to Hollander upon demand. Jacobs received the goods, did not wish to purchase' any of them at the price named, and after holding them about a week, sent them back to Hollander in New York, by express. The goods were stolen from the express company at Pittsburg. Fifty dollars, a mere nominal value, was paid on the goods by the express compány.

Hollander brings this action to recover from Jacobs the value of the goods stolen; and it is claimed that Jacobs did not comply with the contract in that he did not hold the goods until they were demanded from him by Hollander. Jacobs claims that he performed the contract. The contract is silent as to when the goods Avere to be. returned or when they should be demanded. They were a class of goods that were liable to be stolen from Jacobs unless he went to the expense of keeping them in some safety deposit vault or other place of security.

This contract is to be construed, not that Jacobs was to keep the goods for any considerable length of time, but as meaning that he was to be ordered to return them to New York as soon as he had an opportunity to examine the goods and determine how much of them he Avished to retain. The silence of the contract upon the time that he was to retain them, made it the duty of the court to say to the jury that he was to retain them a reasonable length of time, and the jury should have been instructed that if he retained them a reasonable length of time for Hollander to ask for their return, and he (Hollander) neglected to ask or demand their return, then Jacobs was justified in returning them Avithout demand, and if the jury found that they were retained by Jacobs a reasonable length of time before he returned them, then he would not be liable under the agreement made between them. This the court neglected to do, but' treated the contract as though Jacobs was to retain the goods until a demand was made upon him for their return, however long that might be, and this was error for which the ease is reversed.

Caldwell and Marvin, JJ., concur.


text:
    WILLS
    [Cuyahoga (8th) Circuit Court,
    January 14, 1907.]
    Marvin, Winch and Henry, JJ.
    George March, Exr. v. Jennie McClintic et al.
    1. Property Devised to Widow not “Undisposed” of by Her Rejection of Will but Inherited by Her as Next of Kin.
    When a testator has, by two different items in a will, made specific bequests to his widow, who is also his next of kin, and by a later item gives her an interest in all the residue of his estate not already disposed of by the will; upon the widow’s election not to take under the will, the property specifically given to the widow by the first two items of the will is not thereby transferred to the class of property mentioned in the will as property not otherwise disposed of, but is to be treated as intestate property and as such inherited by the widow as next of kin.
    2. Widow not Entitled to Distributive Share in Proceeds of Real Estate Converted into Personalty in Violation of Terms of Will.
    A widow who has rejected the provisions made for her in her husband’s will and elected to take under the law, is not entitled to a distributive share in the proceeds of real estate, which by the terms of the will was not to be sold until her death, but which, upon order of the probate court has been sold before that time.
   MARVIN, J.

This suit is brought under favor of Sec. 6202 R. S. (Sec. 10451 G. C.), and is for the purpose of obtaining from the court directions to the executor, for the disposition of the estate of the testator, now in his hands.

Otis F. McClintic, who was a resident of Cuyahoga county, Ohio, died testate on or about June 10, 1904. He left no lineal descendant. The defendant, Jennie McClintic, is his widow. By his will, which was duly admitted to probate, the plaintiff was designated as executor, and letters testamentary were issued to him, under which he is now acting in the settlement of the testator’s estate.

A considerable number of bequests of money are made in the will to designated persons, and these have all been paid out of the personal estate. There remains of the personal estate left by the testator about ninety thousand dollars. Besides this personal estate the testator left certain real estate, none of which came to him by descent, devise or by deed of gift from any ancestor, so that had he died intestate, the widow would have inherited all of such real estate, under Sec. 4159 It. S. (Sec. 8565 G-. C.)

One tract of the above-mentioned real estate constituted the homestead of himself and his wife.

All of this real estate has been sold by the executor under an order of the probate court. It is suggested that there was no lawful authority in the probate court to order this sale, but in the view taken of the case, this is immaterial here.

Item 7 of the will reads:

“I give, devise and bequeath to my wife Jennie and her heirs the homestead in which I now reside, situate on the west side of what is called Franklin street in Chagrin Falls township, Cuyahoga county, Ohio, and' is the same property purchased from Chas. A. Wales.”

Item 8 of the will reads:

“I will, give and bequeath to my wife Jennie and her heirs all of the household furniture of every kind, nature and description contained in my house, or of which I may die possessed.”

Item 9 of the will reads:

“For the purpose of furnishing and providing my wife Jennie with a home, care, comfort, support and maintenance, in such a way, manner, and at such place as she may choose and deem best'during the remainder of her life, I give, devise and bequeath to my wife Jennie all of the residue and remainder of my property of whatever kind and wheresoever situate, and I hereby direct that she invest and keep invested in such safe and reliable interest-bearing securities as she may deem best, my persona] estate, and at any time she deems best so to do is hereby authorized to change the securities or any part thereof in which she has invested any of my personal estate. I direct that my wife first use the interest and income arising from my personal and real estate for the purposes herein mentioned, and if from the remainder of my personal and real estate during her life the interest and income arising shall be insufficient for the purposes herein specified, then I hereby authorize and direct my wife to use such part or the whole of the remainder of my properties as she may deem necessary to fully carry out the purpose as herein specified and provided. It is my wish, and I so direct, that my wife fully and freely use and enjoy the use of the remainder of my property for the purpose herein specified without annoyance or hindrance of any person.”

Item 10 of the will reads:

“At the death of my wife, any part of my estate mentioned in item 10 herein, then remaining unconsumed by my wife I direct my executor to convert into money and to distribute the same, share and share alike, between my nephews and nieces, the children of my brother, Franklin J., and of my deceased brothers, and sisters, to-wit: William, John, Charles, Albert, Lucius, Martin, Lucinda and Abigal. ’ ’

The widow rejected the provisions made for her in the will,. and her rights are, therefore, fixed by Section 5964, Revised Statutes, which provides that where she fails to elect to take under the will, she shall retain her dower and such share of the personal estate of the deceased consort as she would have been entitled to by law, in case he had died intestate, by sections of the statute fixing the order of descent and distribution, in case of intestacy.

Attention is first called to item 7 of the will, already quoted.

It is clear that the widow takes nothing under this item, which in terms bequeaths to her the homestead. It is also true that she takes nothing under item 8, which bequeaths to her all of the household furniture of every kind contained in the homestead.

What then, is the status of the property described in these two items?

It is said in item 9, “I give and devise and bequeath to my wife, Jennie, all of the residue and remainder of my property of whatever kind, and wheresoever situated.” This, followed by qualifying expressions as to such ownership as appears by the item already quoted.

What is the residue and remainder which is disposed of by item 9?

It is urged that it includes all the property which is not taken under either of the preceding items, and that, as the widow declined to take under the will, she takes nothing under item 7 or item 8, and therefore this residue and remainder includes the property mentioned in those two items. We think otherwise. It would seem clear that all which the testator intended to have included in this ninth item is that which had not, by previous items of the will, been cared for out of the estate for particular purposes, and from this it follows that as to the property named in items 7 and 8 the rights of the parties are just what they would have been if he had died intestate; and so the widow, as next of kin, and by inheritance, not by will, becomes the owner of the homestead and the household furniture.

If there were doubt as to this being the true construction, it would have to be resolved in favor of the widow, as heir, upon the doctrine that words of doubtful meaning in a will are to be construed most favorably to the heir. See Davis v. Davis, 62 Ohio St. 411 [57 N. E. 317; 78 Am. St. 725],

From the syllabus:

“1. When a residuary clause in a will admits of a limited application as well as one of more general character it should be given that construction which will be most favorable to the heir-at-law.
“2. The rule which adopts a construction more favorable to the residuary legatee with respect to void or lapsed legacies than is applied with respect to void or lapsed devises, does not- obtain in this state. The will should be construed, in either ease, so as to give effect to the intention of the testator as fairly ascertained from a consideration of all its provisions and his situation at the time of its execution. ’ ’

By referring to the tenth item of the will, above quoted, it will be seen that upon the death of the widow the executor was to convert all the property into money and make distribution as provided in this item. The widow having rejected the provisions made for her in the will, thereby rejects the trust provided for in the ninth item of the will, but she does not thereby hasten the time when the conversion and distribution is to be made. This conversion, however, as has already been said, has been made by the sale of the real estate, upon the order of the probate court, and it is urged upon the part of the widow that such conversion having been made, she is entitled, taking under the law, to have the avails of the conversion of this real estate treated as personal property in the distribution to be made.

In support of this attention is called to the case of Hutchings v. Davis, 68 Ohio St. 160 [67 N. E. 251]. In that case no provision whatever was made for the widow. In fact, the will was made before the marriage of the testator to the woman who became his widow at the time of his death. One of the provisions of that will reads:

“The Enterprise Mills, my interest in the business of Stone-man & Hutchins, with what real estate is not sold of any and all kinds, shall be disposed of, and business settled up, if possible, within two years of my death. ’ ’

It was held that this constituted an equitable conversion of the real estate into personalty, taking effect from the death of the testator.

The fourth clause of the syllabus reads:

“The positive direction by a testator to sell all of his real estate and to blend the proceeds with his personal property in one fund for the distribution of his whole estate' according to the scheme of the will, makes an absolute conversion for all purposes into personal property, which should be distributed as personal property, even if the special object intended by the testator should fail. And the effects of the conversion extend to, and may be claimed, not only by those who claim under or through the will, but also by those who are not entitled under the will, but are entitled directly from or under the testator. ’ ’

An examination of this case shows that the equitable conversion of the realty took place because the testator by his will directed it to be done by his executors and blended it with his personal estate for distribution.

In the present ease the testator contemplated and directed the conversion of this property, this real estate, only upon the death of his wife.

Pomeroy, Equity Jurisprudence, Sec. 1162 reads:

“The instrument might in express terms contain an absolute direction to sell or to purchase at some specified future time, and if it created a trust to sell upon the happening of a specified event which might or might not happen, then the conversion would only take place when the event happened, exactly as though there had been an absolute direction to sell at that time.”

Here, although there is no specified time at which the conversion was to take place, there is an event, to-wit, the death of the widow; certain it is true to take place at some time, but no conversion is to be made until the happening of that event.

If the intention of the testator had been carried out, by the acceptance on the part of the widow of the provisions made for her, she could never have had any part of the avails of the sale of the real estate. If the testator had died intestate, she would have had nothing in this real estate but dower. Her rejection of the provisions made for her in the will did not necessarily expedite the time when this conversion should have been made, and certainly it would have been wrong to those to whom distribution is to be made, after her death, to hold that because, as a matter of fact, the real estate has been sold under an order of the probate court, the distribution of the avails of such sale is expedited in such wise as to increase the amount for the widow and thereby decrease the amount for those to whom distribution is to be made, as provided in the will. We hold, therefore, that the widow is not entitled to distribution out of the avails of the sale of this real estate. She is entitled, of course, to the avails of her dower interest in all of the real estate except the homestead. As to that, she is entitled to all of the avails of the sale, because the property was hers by inheritance.

The claim is made as against the widow, that because of her rejection of the provisions of the will she has lessened the amount which would ultimately come to the distribution and that she should not have a liberal construction of the will made in her favor. Holding as we do in the case, however, this could affect only the matter of her having the entire avails of the sale of the homestead, because we hold that she gets no distributive part of the avails of the sale of the other real estate. But it is not at all clear, that the distributees, upon final distribution will receive less than they would, if the widow had accepted the provisions of the will. Had she done so, she would have been entitled to the entire income of the property mentioned in item 9, and might have diminished the principal. Her age is said to be about 51 years. With her expectancy of life, it is probable that the portion of the estate which will be left in the hands of the trustees to be distributed at the time of her death will be as great as it would have been had she accepted the provisions of the will.

The only ground upon which the widow can claim distribution of the avails of the sale of the real estate is that there was an equitable conversion of the real estate, taking effect at the time of the death of the testator, because of the provisions in the. will that there should be a conversion at the death of the widow, and this would result in saying that the widow is to have a distributive portion of a fund that was not to be in existence until after her death. This is manifestly untenable.

If all the parties who might be entitled to distribution under item 10 of the will, were now in being, it might well be said that the trust provided for in item 9 of the will would be a dry trust, and that there would, therefore, be no reason for continuing it. But the provisions made for distribution at the termination of this trust includes, “the children of my brother Franklin J.”

All other distributees are mentioned by name, but the distribution is to be per capita, and since it is to include the children of Franklin J., and it can not now be known whether children will hereafter be born to Franklin J., it can not be known to whom, when, and to how many distribution will have to be made when this trust ends, and so this trust must be continued. And for that purpose the probate court will doubtless, upon application, appoint a trustee; very likely the testator’s executor may be appointed as such trustee, but since duties are required of the trustee in the matter of investing funds, and the like, which the executor as such can not do, it would be better, perhaps, that some other person than the executor be appointed trustee. It will be necessary however that a trustee be appointed.

The executor is directed, therefore, to pay to the defendant, Jennie McClintic, all the avails of the sale of the homestead, and her distributive portion, as provided by statute, out of the personal property, not including the avails of the sale of the real estate, and t-o pay to the proper trustee, when appointed, all the remainder of the property in his hands for distribution.

Winch and Henry, JJ., concur.


author: LAUBIE, J.

text:
    VENDOS. AND PUECHASEK
    [Cuyahoga (8th) Circuit Court,
    February, 1899.]
    Caldwell, Hale and Laubie, JJ.
    Judge Laubie of Seventh Circuit Sitting in Place of Judge Marvin.
    Charles M. Allen v. Emma H. Alsop et al.
    ' Joint Purchaser Loaning Purchase Money to Copurchaser Has no Lien on that Share.
    While it is true that the payment of an excess of purchase money in a joint purchase is sufficient to create an equity in the nature of a trust in favor of the paying purchaser against the other share, such is not the case when the purchaser does not pay the purchase money but loans it to the joint purchaser to be used by him in paying for his share.

      T. W. Sfireve, for plaintiff.

      Tuttle & Fillius, for defendant.
   LAUBIE, J.

This was a proceeding for the partition of premises consisting of a house and lot in Cleveland, between the representatives of two deceased owners, a brother and a sister, in each of whom, at their deaths, was the legal title to one-half, in fee. The property had been conveyed to the two some twenty-five years before upon a joint purchase, after an agreement therefor, and after making another brother, residing in Cleveland, an agent for the purpose, the funds to be furnished by the brother, one-half on his own account, the sister promising to repay her brother the other half during her life, so far as she might be able without inconvenience to herself, and that the balance should be paid from her estate at her death. The purchase was made to furnish joint homes for this sister and brother and another sister and the husband of the latter during their lives, if the latter sister should choose to occupy so long, but subject to termination of her rights by her abandonment. Soon after the conveyance and after a limited reimbursement of the brother, writings were executed in which the terms of the undertaking was in part recited and in part formally promised and in which the transaction of furnishing so much of the money as was left unpaid was mentioned as “loaned or advanced” to the sister to enable her to pay off her half of the purchase money. The brother had lived for many years in Pittsburgh where he carried on extensive business in which he was engaged until he died some two years before the sister. The sister continued to occupy the premises until her death but the other had abandoned it several years before.

The sum paid was $32,500. For this sum the brother bought in Pittsburgh, New York exchange payable to his own order and sent it to the brother in Cleveland, endorsed payable to his order, and with these funds the brother paid the purchase price including as part of it the removal of an incumbrance of more than $20,000.

At the time of the purchase the brother had in his hands $2,500 of his sister’s funds which was applied as of that date on her share of the price and sometime afterwards she caused a further sum of $3,500 to be paid, making in all $6,000 reimbursed by her. No other sum was ever paid on the sum advanced, but during her life the brother released all interest accrued or after-wards during her life to accrue.

The representatives of the sister brought the suit and made the devisees and executors of the brother defendants. It was agreed that the property could not be divided and must be sold. The executors of the brother claimed a lien on the sister’s share of the proceeds for the unpaid portion of the price.

There is in this case but one point in issue between the parties, or at least, there is but one point which should determine the case against the executors of Hussey and that point is, whether or not the executors of Curtis G-. Hussey have a lien in equity on the property in question. It is claimed that they have, by reason of the fact that Mr. Hussey and his sister Mrs. Terrill bought the property together, and that Mr. Hussey paid more than his proportion of the purchase money.

That is the question in dispute; whether he did pay more than his proportion, more than his half of the purchase money, or not.

In the elaborate brief filed by counsel for the executors, this is stated as being a principle of equity upon which the executors rely for the purpose of establishing this lien or trust:

“It has long been a recognized principle of equity in the English law that the payment of an excess of purchase money in a joint purchase is sufficient to create an equity in the nature of a trust in favor of the paying purchaser against the other share. It was long ago held sufficient to take away the right of survivorship in what would otherwise be a joint tenancy.”

Such was held in Lake v. Gibson, 1 Eq. Cas. Abridged, 290, 291; 2 Ves., Senior, 256.

Among the earliest cases I have found directly on the point in this country, is that of Warfield v. Banks, 11 Md. (11 Gill & J.) 98. The case was one of partition between parties claiming and considered as tenants in common. The second point of the syllabus in that case is as follows:

“When one of the several joint purchasers of land pays more than his due proportion of the purchase money and the land is afterwards sold for the purpose of distribution, the party making the excessive payment is entitled to be paid and the net balance only is to be distributed among the joint purchasers.”

There is no question whatever so far as the principle of equity is concerned, and no difference in regard thereto, between the English authorities and the American, that where the joint purchaser pays more than his share of the purchase money, and the title is taken in both or to all the joint purchasers, the title is held in trust for him who pays the most, to the extent of the excess which he has paid over and above his share of the purchase money.

Now, perhaps, the very statement that I have made is sufficient, but to make it more explicit, it is and has been always asserted that this payment must have been in the character of purchaser, that he, as purchaser, paid more of the purchase money than was requisite to entitle him to the share agreed upon by the contract made between them. In other words, it must have been his money, and that is the only question here.

I do not understand there is any dispute between counsel as to the law or principle of equity, which requires that it shall have been payment of or by one of the joint purchasers — payment by him — of his money. And the only point really in dispute is as to the facts in the ease; whether the money in the instance given was the money of the decedent, Curtis G. Hussey, at the time of payment, or the money of his sister, Jane R. Pettit.

The purchase price money was $32,500, and each party was to pay one-half. Mrs. Pettit was not able to pay more than $6,000, and the $10,500 remaining to complete her share of the purchase money was furnished by the decedent, Mr. Hussey. It seems that he, having a relative in this city, forwarded the money in the shape of drafts to his relative, a brother, and in doing this, he made and caused to be sent a separate draft for the $10,500 which he was advancing of the purchase money as and for Mrs. Pettit’s share; if he was advancing it in the character of purchaser or was paying it in the character of purchaser as part of the purchase money to the seller, then, undoubtedly, he was entitled to this lien.

One thing to strike us at- the vex-y threshold of the case is, why he should make the distinction and send forward two drafts instead of one — why he should send forward in one draft especially the amount for which Mrs. Pettit was in default.

It is all explained — by the contract — if not presented by written contract, then subsequently by the parties. And I have that original contract before us. It recites the fact of this purchase, and then proceeds as follows:

“And whereas said Curtis G. Hussey and Jane R. Pettit were, according to an understanding between themselves, each to pay the sum of sixteen thousand two hundred and fifty dollars, making in the aggregate the said sum of thirty-two thousand and five hundred dollars, and each were and are entitled to a one-half undivided interest in the fee simple of, in and to said house and lot; and whereas said Jane R. Pettit was unable to pay more than six thousand dollars on account of her portion of the purchase money, without embarrassment to herself, therefore said Curtis G. Hussey, at the request of said Jane R. Pettit, loaned or advanced to said Jane R. Pettit the sum of ten thousand two hundred and fifty dollars to enable said Jane R. Pettit to pay off her share, the one-half of said purchase money of said house and lot.”

Now, the language of the contract is in the past tense and it refers to the original contract and understanding between these parties in the purchase; what their agreement was when they made the verbal agreement which now has been reduced to writing, referring back to the time when they made the purchase, that instead of-Mr. Iiussey paying an excess of the purchase money to the seller over and above his own share, he was loaning and advancing money to Jane R. Pettit at her request to enable her to pay off her share of the purchase price. So that there can be no dispute but what it was a loan from Mr. Hussey to his sister, Mrs. Pettit, to the amount of ten thousand two hundred and fifty dollars, and that is the reason why he sent it to his brother, his agent here, who was attending to the matter,

This contract, which can not be disputed and which can not be misinterpreted and about which there can be no doubt, differed from the oral testimony where the memory of witnesses may be so mistaken as to pervert the facts. Here it is in writing, about which there can be no misinterpretation or doubt, and it was, that Mr. Hussey was loaning and advancing to Mrs. Pettit the money to enable her to pay for her share precisely as if she borrowed it from a perfect stranger to the transaction.

This is a complete statement of the whole case and ends it.

The authorities state explicitly that where money is loaned by one joint purchaser to another or to the other joint purchaser to enable him to pay his share of the purchase price, no trust arises. It is not a payment in excess on the share of the joint purchaser; it is merely a loan to the joint purchaser to enable him to pay off his share.

All the other papers in the case, and this contract itself, and subsequent parts of it, seem to recognize the fact that the parties themselves never contemplated that Mr. Hussey should have a lien upon the premises for this ten thousand two hundred and fifty dollars, but it expressly provides that Mrs. Pettit majr pay the amount to him at such time and in such sums as she may be able to, and that, at her death, it shall be pajmble out of her estate; and two bonds were given; one corresponding with the date of this contract; the last bond that was given to take the place of the first, provides especially for the delay of payment until the death of Mrs. Pettit, when the amount is. to be payable out of her estate; the first bond, of October 1, 1870, refers to the contract itself and provides that the money shall be paid as specified in this contract.

The principle of equity to which I have referred has settled the case; there can be no lien because it was not Mr. Hussey’s money that was paid, but it Was Mrs. Pettit’s, for which she was indebted to Mr. Hussey.

The decree in this ease will be the same as entered in the court below.

Caliwell and Hale, JJ., concur.