text:
    MONEY PAID UNDER MISTAKE OF LAW.
    [Columbiana (7th) Circuit Court,
    October Term, 1906.]
    Cook, Burrows and Laubie, JJ.
    Sarah A. Metzger v. Joseph O. Greiner et al.
    1. "When Monet Paid under a Mistake of Law will not be Ordered Refunded bt a Court of Equity.
    A court of equity will not order refunded to a trustee money paid him by another- trustee under a mistake of law, except when the mistake is mixed with misrepresentation or fraud, or where the ignorance of the complainant has conferred upon the defendant a benefit which he cannot in good conscience retain.
    [For other cases in point, see 6 Cyc. Dig., “Payment,”- §§ 266-292. — EcW]
    2. Effect of Change of Law by Judicial Decision.
    Where the law is changed by judicial decision such change will not-affect transactions made with reference to the law as it stood previous to such change.
    [Syllabus approved by the court.]
    Appeal from Columbiana common pleas court.
    Carey & Mullins, for plaintiff.
    S. W. Ramsey, for defendants:
    Equity will not rescind a contract, or reform an instrument, merely because the parties may have been mistaken as to its legal interpretation and effect. 20 Am. & Eng. Ene. Law (2 ed.) 810, and eases cited in note 2.
    If an administrator pays a debt barred by the statute of limitations v a court of equity will not relieve him because of his ignorance of the Statute or of its application to the case. Adams, v. Guerard, 29 Ga. 651 [76 Am. Dec. 624],
    Ignorance of law excuses no one. Broom’s Leg. Max. 253; Williams v. Electric Go. 160 Ill. 526 [43 N. E. Rep. 595]; Weed v. Weed, 94 N. Y. 243; 20 Am. & Eng. Enc. Law (2 ed.) 816.
    A decision overruling former decisions which .have been acquiesced in and acted upon by the community will not be allowed to operate retrospectively so as to overturn acts done and contracts executed in good faith in reliance of these decisions. 20 Am. & Eng. Ene. Law (2 ed.) 818 (d), and cases cited in note 2; Kenyon v. Welty, 20 Cal. 637 [81 Am. Dec. 137].
   COOK, J.

The controversy in this action is between Byron S. Ambler as trustee of Joseph Koll, under the insolvent laws of the state, by his cross petition and the answer of John S. McNutt, receiver of Greiner & Son, thereto, tvho will hereafter be denominated plaintiff and defendant.

Joseph Koll had borrowed from Greiner & Son, who were bankers at Salem, Ohio, about $6,000. To secure.the loan Koll deposited a number of shares of the capital stock of the Victor Stove Company, a corporation organized under the laws of Ohio. Subsequently Koll made a general assignment for the benefit of his creditors under the insolvent laws of Ohio, and plaintiff became trustee - succeeding the assignee appointed in the deed of assignment. Difficulties arose in the firm of Greiner & Son, which was a partnership, and John S. McNutt was appointed receiver to settle up the affairs of the partnership. Koll not having paid the loan, the stock deposited with Greiner &• Son as security was sold and.the proceeds applied upon the claim due the bank, which ■was about one-third of the amount then due.

After the appropriation of the proceeds of the sale of the stock to the claim of Greiner & Son, plaintiff declared a dividend in favor of the creditors of Koll, and paid the dividend in favor of Greiner & Son upon the full amount of the loan of $6,000 to the defendant as he thought under the law he was required to do, and not upon the amount of the claim less the proceeds of the sale of the stock. This court, after the payment of the dividend to defendant by plaintiff,'in the case of State Nat. Bank v. Esterly, decided that in such a case the' creditor is only entitled to a dividend upon the balance remaining after deducting the proceeds of the collateral taken to secure the debt; and the case was affirmed by the Supreme Court by a divided court. State Nat. Bank v. Esterly, 69 Ohio St. 24 [68 N. E. Rep. 582], After the decision in the Esterly case by the Supreme Court plaintiff filed his cross petition in this ease, which is the original case in which the receiver was appointed, asking that defendant be required to pay back to him the amount so paid by mistake, as the assets of Koll were not sufficient to pay all his debts. Defendant contests this claim of plaintiff and insists that he has a right to retain the full amount received by him.

In the agreed statement of facts submitted to us, the reason assigned •why plaintiff paid over to defendant the dividend upon the full amount of the claim of Greiner & Son and not upon the amount of the claim after deducting the proceeds of the collateral is; that it was the general custom in this state to do so, and that he understood that to be the law, as established by the decisions in the highest courts of many of the states, and by the lower courts of this state, and that there was no decision of the Supreme Court upon the question. In the case of Jelke v. Stallo, 1 Dec. 43 (1 N. P. 29), it was decided by a very eminent judge that the creditor was entitled to a dividend upon the full amount of his claim, and this opinion is supported by many decisions of different states as well as of the federal and English courts. Merrill v. Bank, 173 U. S. 131 [19 Sup. Ct. Rep. 360; 43 L. Ed. 640], and cases therein cited.

Plaintiff was a lawyer and was familiar with these decisions, and the payment of the dividend by defendant was a pure mistake of law with no mixture of fact.

Furthermore, there is no claim that any misrepresentation or fraud was practiced by defendant, and it could not be said that defendant had any advantage in the transaction that would require a court of equity to interfere any more than a court of law.

The rule in such cases is well stated in 20 Am. & Eng. Enc. Law (2 ed.) 816:

“It is one of the fundamental maxims of the common law that ignorance of law excuses no one. It is a maxim founded not only on expediency and policy but on necessity. ‘If ignorance of law could be admitted in judicial proceedings as a ground of complaint or of defense, courts would be involved and perplexed with questions incapable of any just solution, and embarrassed by inquiries almost interminable, until the administration of justice would become in effect impracticable. There would be but few cases in which one party or the other would not allege it as a ground of exemption; and the extent of the legal knowledge of each individual suitor, not his acts or words, would be the material fact on which judgments would be founded.’ It is therefore applied most rigidly at law, and is only relaxed in equity where the mistake is mixed with misrepresentation or fraud, or where the ignorance of the complainant has conferred upon the defendant a benefit which he cannot in good conscience retain.”

In note 7 it is stated:

“If-one of the parties to a contract is in truth ignorant of a matter of law involved therein, and the other party, knowing him to be so, takes advantage of the circumstance, he is guilty of fraud and the court will relieve.”

But it is hardly necessary to go outside of our own state for authorities as the case of Phillips v. McConica, 59 Ohio St. 1 [51 N. E. Rep. 445; 69 Am. St. Rep. 753], is directly in point except it was-an action at law. In that case it was held that:

“Money voluntarily paid by an executor, upon distribution to one not entitled to receive the same, under a mistake of his rights and duties as executor, there being no mistake of fact, cannot be recovered back.”

That case, like this, was between trustees, the money having been paid by an administrator in the settlement of an estate to a guardian of a minor, which minor the executor assumed was a legatee under the law, but which, in fact, was not the ease. The minor had no claim upon the fund whatever, and yet the court says in the opinion, page 10:

“The executor had the right to obtain the judgment of the court as to the proper person to receive this money, as was done in Upson v. Noble, 35 Ohio St. 655; Revised Statutes, Sec. 6202 [Lan. 9743], But, knowing all the facts, he did not seek the direction of the court, but relying upon his own judgment, paid the money at his own peril. If he intended to litigate the matter he should have litigated before payment. It is now too late, unless he can show he paid it under a mistake of fact, and this his present petition fails to show.

It is again contended by plaintiff that, because at the time of the payment of this dividend to defendant it vwas the settled law in Ohio that the dividend should be paid upon the full amount of the claim, the money should be ordered paid back. This claim is entirely too broad. At the time of payment there was no decision of our Supreme Court upon the question and the decision of the common pleas court of Hamilton county in Jelke v. Stallo, supra, and of the United States circuit court of appeals, for the sixth circuit in a case from the western division of the southern circuit of Ohio, Chemical Nat. Bank v. Armstrong, 8 O. F. D. 41 [59 Fed. Rep. 372; 8 C. C. A. 155; 16 U. S. App. 465; 28 L. R. A. 231], could hárdly settle the law in the state.

But if the law had been fully settled as claimed by plaintiff even by our Supreme Court, and a different holding was afterwards made, the result would be the same. It might be important in a controversy between Ambler and the creditors of Roll, but it would not change the question we are considering at all.'

“Certainly when the law of a state is changed by judicial decision it does not open or annul what has been done in other cases of a like kind for years before, under a different understanding of the law. To permit such effect of tbe subsequent decision would lead' to tbe njost mischievous consequences.” . * ,

In the case of Lyon v. Richmond, 2 Johns. Ch. 51, it was held, Chancellor Kent delivering the opinion that,

“1. A subsequent decision of the court of errors, in a different case, giving a different exposition of a point of law from the one declared by the Supreme Court, where the parties to a suit entered into an agreement relative to such suit, can have no retrospective effect so as to destroy the operation of such agreement.”
“2. The court does not relieve parties from their acts and deeds fairly done, on a full knowledge of the facts, though under a mistake of law. Every person is charged, at his peril, with a knowledge of the law. ’ ’ i

This decision was made in 1816, and it seems to have been generally followed in all the states.

Pittsburg & L. A. Iron Co. v. Iron Co. 118 Mich. 109 [76 N. W. Rep. 395], and cases and authorities there cited.

Finding and decree in favor of defendant, dismissing the cross petition of plaintiff at his costs.


source: Caselaw Access Project

author: COOK, J.

license: Public Domain

text:
    CONSTRUCTION OF WILL.
    [Guernsey (7th) Circuit Court,
    November Term, 1906.]
    Cook, Burrows, and Laubie, JJ.
    Nancy J. Miller v. Alexander Miller et al.
    Wipe op Son op Testator Held to Take as Heir under Devise to Son por Life, with Remainder to his Lawful Heirs.
    Where a testator devises a parcel of real estate to bis son for life with remainder to his lawful heirs, and the son marries after the death of the testator: Hela,, that upon the death of the son the wife takes as heir where there is nothing in the will tending to show that the testator used the words “lawful heirs” in a different sense from their strict technical import.
    [For other cases in point, see 3 Cyc. Dig., “Descent and Distribution,” §§ 233-302; 7 Cyc. Dig., §§ 628-636 — Ed.]
    [Syllabus by the court.]
    Error to Guernsey common pleas court.
    J. J. Adams and A. L. Jones, for plaintiff in error:
    1 Widow as heir. Lavery v. Egan, 143 Mass. 389 [9 N. E. Rep. 747]; Page, Wills 600; Rawson v. Rawson, 52 Ill. 62; Weston v. Weston, 38 Ohio St. 473; 2 Jarman, Wills 1; Richards v. Miller, 62 Ill. 417; Story, Conflict of Laws Sec. 479e; Bunnell v. Evans, 26 Ohio St. 409; Mooney v. Purpus, 70 O. S. 57 [70 N. E. Rep. 894] ; Jamieson v. Rnights Templar, 9 Dec. Re. 388 (12 Bull. 272) ; Stewart v. Powers, 6 Circ. Dec. 101 (9 R. 143); Durfee v. Mac Neil, 58 Ohio St. 238 [50 N. E. Rep. 721] ; St. Maries Lodge v. Darrow, 16 Dee. 120; 2 Blackstone’s Commentaries 201, Page, Wills 550, 882; Chamberlain v. Taylor, 105 N. Y. 185 [11 N. E, Rep. 625] ; Proctor v. Clark, 154 Mass. 45 [27 N. E. Rep. 673; 12 L. R. A. 721]; Granger v. Granger, 147 Ind. 95 [44 N. E. Rep. 189; 46 N. E. Rep. 80; 36 L. R. A. 186]; Page, Wills Sec. 512; Cushman v. Horton, 59 N. Y. 149; Barber v. Railway, 166 U. S. 83 [17 Sup. Ct. Rep. 488; 41 L. Ed. 925] ; Forrest v. Porch, 100 Tenn. 391 [45 S. W. Rep. 676] ; Todd v. Todd, 27 O. C. C. 224.
    R. T. Scott and Jo.seph Purjkey, for defendants in error.
   COOK, J.

This was' an action in partition and the controversy arises upon the cross petition of Nancy J. Miller. She claims in her cross petition that she is the widow of Peter Miller, .who was the son of Alexander Miller, and as such widow is the heir at law of Peter Miller and the absolute owner, under the will of Alexander Miller, of a part of the real estate sought to be partitioned.

Alexander Miller disposed of all his property by his will among his children, and the question made is, What is the proper construction of the will-?'

In the second item of his will he devised to his son Howard a certain parcel of land during his life, and at his death *to go to his children.

In the third item he devised to his son Richard for life a certain parcel of land, and at his death to go to his children.

By the fourth and fifth items he devised to his two daughters certain parcels of land absolutely.

By the sixth item he devised to his son Peter a parcel of land during life, and at his death to go to his lawful heirs. The exact language is:

“I give and devise to Peter the parcel of land [naming it] during his life, and when he dies it is to go to his lawful heirs.”

Howard and Richard each were married and had children at the time of the making the will, and at the death of the father; while Peter was a bachelor, but married after the death of his father. Th¿» brothers and sisters of Peter claim that the intention of the father was, that upon the death of Peter the parcel devised to him was to go to his children, or, if he died without issue, that the land af the death of Peter should go to his brothers and sisters.

The words “heirs at law” have a well-defined legal signification. In their strictly technical import it is: “The person or persons appointed by law to succeed to the estate in case of intestacy.” Bouvier’s Law Dictionary, Yol. 1, page 941.

Under this definition there is no question but what plaintiff, Nancy J. Miller, was strictly and technically the heir of her husband, Peter Miller, as under our statute of descent she would inherit from her husband. In Weston v. Weston, 38 Ohio St. 473, it was held:

“A testator, having executed his will giving, in trust for the benefit of his sole and only child, property consisting of nonancestral real estate and personal property, and directing that ‘In ease my said child should die without issue her surviving, then all and singular the property so devised shall pass to and vest in my heirs at law,’ died leaving surviving him his said child, and also his wife, a brother and two sisters who survived the child. Held: That upon, the death of the child without issue, the widow of the testator succeeded to the property, under the will, as heir at law of the testator.”

In the opinion of Judge Mellvaine it is said:

“We readily concur in the proposition laid down in Jones v. Lloyd, supra, that the term “heirs,” when used in a will, is flexible, and should be so construed as to give effect to the manifest intention of the testator as ascertained by a due consideration of all the provisions of the will. But this proposition in no wise conflicts with the well-established rule of construction, that technical words used in a will should have their strict technical meaning, unless it appears that the testator used them in some other and secondary sense.”

In Durfee v. MacNeil, 58 Ohio St. 238, 244 [50 N. E. Rep. 721], in the opinion by Judge Shauck, it is said:

“Under our present statute of descents and distribution the lands of a married woman who dies intestate and leaving no children or their representatives pass to her surviving husband, and he is entitled to her personal estate. He may, therefore, with strict regard to the significance of the term, be designated as her heir. But from the fact that the estates of deceased persons usually descend to their children, the term ‘heirs’ is frequently regarded as synonymous with children. It would be unprofitable -to analyze, or even to cite, the numerous cases in which the term has been held to have been used in its general sense to designate anyone capable of inheriting, or in its limited sense to designate children, as the testator’s intention may appear from the scheme and all the provisions of his will. The flexibility of the term and the duty of the court to ascertain its meaning from a consideration of the entire will are brought into clear view in Jones v. Lloyd, 33 Ohio St. 572, where it was held that the testator’s widow was not entitled to participate in a provision in favor of his heirs, although if he had died intestate she would have been his sole heir.”

The case of Bunnell v. Evans, 26 Ohio St. 409, relied upon by counsel, is, in no sense, contrary to the decisions referred to, as the question made was not passed upon; the only question decided being, that taking the will as a whole it clearly showed the word “heirs” as used by the testator was in the sense of children.

That it is true that the word “heirs” is a very flexible term may be conceded, and that it is frequently used in the sense of children there is no doubt, or even as devisees and legatees. Todd v. Todd, 27 O. C. C. 224. If, however, there is nothing in the will or the surrounding circumstances showing that the testator used the words in a different sense from their striet technical signification, then that signification must be given to them.

What is there in this will that in any manner tends to show they were used by the testator in any sense different from what they usually mean \ ,

Howard and Eichard were married and had children; the devise therefore was to them during life and at their death to their children in fee.

Peter was single. He had no children. The devise was therefore to him and his lawful heirs. Evidently the testator meant that if Peter got married, the remainder was to go to his wife, and if he had children, then to his children, which in either event would be his heirs; and if he did not get married, tjien the fee was to go to his brothers and sisters who in that case would be his heirs. Indeed, the context of the will strengthens the claim of the widow. ' The court of common pleas erred in sustaining a demurrer to the cross petition of plaintiff in error, and the judgment will be reversed and the case remanded with instructions to overrule the demurrer and for further proceeding.

Burrows and Laubie, JJ., concur.


author: PARKER, J.

text:
    LICENSES — PAWNBROKERS.
    [Lucas (6th) Circuit Court,
    March 22, 1907.]
    Haynes, Parker and Wildman, JJ.
    Isaac Kopelman v. Toledo (City).
    1. Duration op Pawnbroker’s License.
    The year for which a pawnbroker’s license runs begins when the application for the license is made and the fee paid, and runs until the corresponding day of the following year.
    2. Debt for Pawnbroker’s License Incurred without Applying for License, when.
    A debt to the municipality is incurred for a license fee required by ordinance to be paid by carrying on the business for which such license fee is imposed; and this is so though the ordinance may prescribe penalties for the carrying on of such business without a. license, and though no license has been-applied for nor issued.
    [For other cases in point, see 5 Cye. Dig., “Licenses,” §§ 1-6. — Ed.]
    [Syllabus approved by the court.]
    ERROR Lucas common pleas court.
    Denman & Crane, for plaintiff in error.
    C. S. Northup, city solicitor, and G. N. Fell, for defendant in error:
    Power of municipality to recover license fees. City ordinances page 369; Cincinnati v. Beauhausen, 10 Dec. Re. 652 (22 Bull. 42Í) ; State v. Hibbard, 3 Ohio-63; State v. Gazlay, 5 Ohio 14; Dillon, Mun. Corp. (4 ed.) Sec. 818; Cooley, Taxation (3 ed.) 836; Philadelphia v. Telephone Co. 109 Fed. Rep. 55; Templeton v. Tekamah (City), 32 Neb. 542 [49 N. W. Rep. 373]; State v. Green, 27 Neb. 64 [42 N. W. Rep. 913] ; Nexo York (Mayor) v. Bailway, 118 N. Y. 389 [23 N. E. Rep. 550]; State v. Bank, 84 Tenn. Ill; New Castle v. Electric Co. 16 Pa. Co. Ct. Rep. -663; Mendocino Co. v. Bank, 86 Calf. 255 [24 Pac. Rep. 1002]-; Johnson v. Armour, 31 Fla. 413 [12 So. Rep. 842],
   PARKER, J.

On August 28, 1906, the city of Toledo brought an action against Isaac Kopelman to recover from him $100, which the city claimed was due from him as a debt to the city on account of his having carried on the business of pawnbroker in the city from March 1, 1905, until March 1, 1906. Kopelman denied that he was indebted to the city on this account, and plead specially that on July 5, 1904, h'e paid a license fee of $100 to the city, whereupon a license was issued to him by the mayor of the city, licensing him as a pawnbroker. For how long a period this license was to run is not stated in the answer and is not made apparent by the record. Assuming that under the law it would necessarily run for a year, it would not expire until July 5, 1905, and the result would be that for part of the time that the city charges that Kopelman whs carrying on the business of a pawnbroker, on account of which he owes the city $100, he was duly licensed and had paid the license fee.

It appears that on October 2; 1893,• the city of Toledo passed an ordinance providing for the licensing of pawnbrokers and other lines of business, and it was therein provided that the annual fee for carrying on the business of a pawnbroker should be $100, and that the fee should cover the year from the first- day of March of any year until the next succeeding first day of March.' And the ‘ ordinance provided penalties in the form of fines to be imposed upon those who should carry on business without paying the fee and procuring a license.

This ordinance appears to have been passed under authority of a special act passed on behalf of the city of Toledo, appearing in 90 O. L. L. 335. I believe that would bring the date of the act some time in 1892. It appears in the revision of 1897 of Bates’ Annotated .Ohio Statutes as Sees. 2672-113 to 2672-117. By the new municipal code, as first passed in 1902, these sections were repealed, so that the foundation and support of the ordinance appears to have been taken away. It may be remarked that perhaps it never had very much foundation or support because the statute was clearly of a general nature, though special and limited in territorial scope, so that it was unconstitutional. But whatever there was of it was taken away by the new municipal code.

In Secs. 1692 and 1692-1 of the code as they existed prior to 1902 (see now Lan. 3102; B. 1536-100), defining the powers of municipalities, there was no provision for licensing pawnbrokers; and we can find in the law as it then existed no authority therefor to the municipality other than the special act to which I have just referred, unless it may be found in Rev. Stat. 4388 (Lan. 7481), which either gives or recognizes authority to pass an ordinance fixing the amount of the fee for a pawnbroker’s license. That section is found in chapter 13, title 5, on the subject of pawnbrokers. It reads:

“The mayor of any municipal corporation may grant a pawnbroker’s license to any person of good moral character who may apply therefor, when the applicant pays into the treasury of the corporation a sum to be fixed by ordinance, not to exceed two hundred dollars per annum, and executes a bond, with surety, to the satisfaction of the mayor to the municipal corporation, in the sum of five hundred dollars, that the applicant will conform to the requirements of the law and any ordinance of the corporation.’’

So tbe amount may be fixed by ordinance of the corporation (if that is a statute conferring authority), and the bond may be executed requiring the applicant to conform to the requirements of an ordinance of the corporation, but, of course, the ordinance of the corporation should not contain provisions beyond those expressly authorized by law.

By the new municipal code, as passed in 1902, no authority was conferred upon municipalities to license pawnbrokers or to in any way regulate their business, or to legislate upon the subject; but by an amendment of Sec. 7 of that code, passed April 20, 1904 (97 O. L. 509; Lan. 3102; B. 1536-100) it is provided that all municipal corporations shall have the power to regulate and' license pawnbrokers, and other lines of business mentioned in the statute.

This ordinance was not passed in pursuance of that statute. The ordinance was passed a long time before the statute was enacted. It may be very questionable whether the ordinance, having once failed of support by reason of the statute authorizing it having been repealed, can afterward be revived and supported by the enactment of a new statute which would seem to authorize such municipal legislation; but we do not feel called upon to discuss that question.

We decide this case upon the assumption that there was no authority for this ordinance in the year for which the city sues other than that found in Rev. Stat. 4388 (Lan. 7481), and that, therefore, all of the provisions of this ordinance must fail, must be held to be invalid and without support excepting the provision that the amount of the license fee shall be $100. And we decide the ease upon the assumption that the license which was issued to Mr. Kopelman on July 5, 1904, was issued for a year, under and in pursuance of Rev. Stat. 4388 (Lan. 7481), or that, at least, it would protect him for a year, the $100 it would pay his license fee for one year from that date. But even upon that assumption, we think that the judgment of the-court of common pleas, which was in favor of the city,- should be sustained, for it is admitted in the record that Mr. Kopelman carried on this business the whole of the year running from March 1, 19Q5 to March 1, 1906. Therefore, it is admitted that he carried on this business between July 5, 1905 and March 1, 1906. Certainly his privilege, by reason of his having paid the license fee, did not extend beyond July 5, 1905, and the moment he began carrying on the business after that period without a new license fee for another period of one year having been paid, he became liable to the city for sueh license fee. And we assume that the true construction of this statute is, that it would be a license fee for another year', for there is no provision for licensing for a shorter period. Mr. Kopelman, then, carried on business after July 5, 1905, after his former license had expired, and he became indebted to the city for another year, and the privilege was with him either to .continue the business for a full year or to discontinue it. In either event,, his indebtedness would be for the whole fee of $100.

This action was not brought until some time in August, 1906, so that at that time the year had expired, whether we count from March 1, 1905, or from July 5, 1905; and it is our judgment that the city would not be called upon to wait until the year had expired but could begin the action as soon as the year had begun; that the debt would then accrue and be due and payable. If it should be made to appear in any case that the .city was endeavoring to recover for a period between the first day of March of any year and the fifth day of July covered by a fee already paid — a thing that does not distinctly appear here, or does not necessarily follow here — then we would be brought to a position where we would be bound to meet and decide the question of whether it was competent for the city to provide that the year fdr license privileges, upon payment of these license fees, should begin upon any certain day of the calendar year, as it has here provided. We do not think that question is necessarily involved here, and yet we express the opinion that at this period it was not competent for the council so to provide, but that, under Rev. Stat. 4388 (Lan. 7481), the year began when the application for the license was made and the fee paid, when the license issued, and that the year would run until the corresponding day of the following year.

The question has been raised and discussed as to whether the city can recover at all by a civil action in a case where it is provided that a license shall issue upon the payment of a certain fee therefor, where it also appears that the license was not applied for and was not issued and the fee was not paid; it being urged on behalf of plaintiff in error that in such case the city is remitted to its right to prosecute for the penalty, and, upon the hearing of the case, some of us, at least, were inclined to that view. It seemed to us that the payment of a license fee is for the purpose of procuring a privilege in the exercise of which a party should be protected or immune from punishment while doing the thing which he is licensed to do; that if the privilege is accorded and the immunity from punishment afforded the debt may be said to have been thereby incurred, but unless the privilege is accorded and the immunity afforded it seemed to us then somewhat difficult to discover how or upon what principle it could be said that the party owed for the privilege. In case of a mere tax on a business, there is no privilege or immunity conferred.

We find the case of Stevenson v. Hunter, 5 Dec. 27 (2 N. P. 300), decided by Judge ,Pugsley and affirmed by this court. I am not sure whether it went any further. That was an action under the Dow law to recover a tax from a party who had carried on business in a township where, under the township local option law, the business was prohibited, and the law as laid down in that case is very well stated in the syllabus as follows:

“An assessment can be lawfully made under the ‘Dow law’ upon the business of trafficking in intoxicating liquors in a township which has voted against the sale of intoxicating liquors under the ‘township local option act’ of March 3, 1888.”

. It seemed to us when we affirmed the decision of Judge Pugsley, and it seems to us now, that this reasoning is unanswerable, and is well supported by authority. But we were inclined, as I say, upon the hearing of this case, to distinguish between a tax and a license or a fee required to procure a license. The license is one thing and the revenue derived therefrom is another thing, often called a tax. It is generally held that where the amount exacted exceeds the expense of issuing the license and the purpose is a revenue, it is a tax. And yet it seemed to us that where the tax is imposed in order to procure the privilege and it would be unlawful to carry on the business until the privilege had been thus secured, there might be a distinction between a license and a tax, but upon looking into the authorities we find that the view to which we were inclined is not supported, but that it is held generally and without any exception, so far as we have been able to discover, that a debt for a license fee is incurred though the license is not applied for and is not issued, and, though there may be penalties for carrying on the business without a license, the city may recover for the amount of the license fee as a debt owing to the city, if the business is carried on.

Among the authorities we have examined are: Cincinnati v. Beauhausen, 10 Dec. Re. 652 (22 Bull. 421) ; Philadelphia v. Telephone Co. 109 Fed. Rep. 55; Templeton v. Tekamah (City), 32 Neb. 542 [49 N. W. Rep. 373]; State v. Green, 27 Neb. 64 [42 N. W. Rep. 913] ; New York (Mayor) v. Railway, 118 N. Y. 389, 390 [23 N. E. Rep. 550] ; State v. Bank, 84 Tenn. 111; Lexington (City) v. Wilson, 118 Ky. 221 [80 S. W. Rep. 811].

The judgment of the court of common pleas in this case will be affirmed, and in the case of Smith v. City, a case of like character where there are no complications about a license fee’s having been paid or a license issued, it seems entirely clear that the judgment should be affirmed, and it is affirmed.

Haynes and Wildman, JJ., concur.


text:
    CONSTRUCTION OF WILL.
    [Monroe (7th) Circuit Court,
    November Term, 1906.]
    Cook, Burrows and Laubie, JJ.
    Frank Haren et al. v. Katharine Block et al.
    Power of Sale to Maintain Widow and Children.
    Under the provisions of a will which contained the following clause: “I give, devise and bequeath to my widow, Katharine Block, in case she survives me, all my property both real and personal, during her natural life, and in the event that it should become necessary for the maintenance of my said wife, and of my children, whom she is directed to provide for, my said wife is hereby authorized to sell any or all of my said property — either real or personal, or both, giving a good, clear and indefeasible title thereto for said purpose,” the widow selling the real estate, specifying in the deed that it was necessary to sell the same for the maintenance of herself and children: Held,

    That, in an action in which the sale was attacked for want of authority upon the part of the widow, the burden is upon the attacking parties to show it was not necessary to sell the-property for such maintenance.
    [For other cases in point, see 4 Cyc. Dig., “Executors and Administrators,” §§ 832-857. — Ed.)
    [Syllabus by the court.)
    Appeal from Monroe common pleas court.
    Mallory, Jeffers & Sears, for plaintiffs:
    In tbe absence of fraud plaintiffs could rely upon the declaration of the donee, that the 'contingency had happened. Dean v. Loewenstein, 3 Circ. Dec. 597 (6 B. 587).
    Bight to execute the power and make the sale. Page, Wills 83S, Sec. 696; Griffin v.- Griffin, 141 Ill. 373 [31 N. E. Bep. 131]; Bishop v. llemple, 11 Ohio St. 277; Stableton v. Ellison, 21 Ohio St. 527; Doran v. Piper, 164 Pa. St. 430 [30 Atl. Bep. 306] ; Dean v. Loewenstein, 3 Giro. Dec. 597 (6 B. 587).
    Courts will not supervise a discretionary power conferred upon an executor by will. Ingles’s Estate, 76 ,Pa. St. 430; 18 Am. & Eng. Enc. Law (1 ed'.) 938, 939, note-,'Bunne.r v. Storm, 1 Sandf. Ch. 357; Leonard v. Mission Soc. 35 Hun. (N. Y.) 290; Doran v. Piper, 164 Pa. St. 430 [30 Atl. Bep. 306]; Stableton v. Ellison, 21 Ohio St. 527; Hamilton v. Jacobs, 2 Circ. Dec. 528 (4 B. 250) ; Scheidt v. Crecelius, 94 Mo. 322 [7 S. W: Bep. 412; 4 Am. St. Bep. 384]; Larsen v..Johnson, 78 AYis. 300 [47 N. W. Bep. 615; 23 Am. St. Bep. 404]; Stevens v. Winship, 18 Mass. (1 Pick.) 318 [11 Am. Dec. 178] ; Henderson v. Blackburn, 104 Ill. 227 [44 Am. Bep. 780] ; Sears v. Livermore, 17 Iowa 297 [85 Am. Dec. 564] ; Cranston v. Crane, 97 Mass. 459 [93 Am. Dee. 106].

      The cases have no application, either on the law or on the facts, to the case at bar. Bishop v. Bemple, 11 Ohio St. 277; Griffin v. Griffin, 141 Ill. 373 [31 N. E. Eep. 131] ; Moody v. Tedder, 16 S. C. 557.
    It is my will that they do so, exercising good judgment, and saving as much of it as possible for the children born to them. Paxton v. Bond, 12 Ky. Law Eep. 949 [15 S. W. Eep. 875] ; Crozier v. Hoyt, 97 Ill. 23; Swarthout v. Banier, 143 N. T. 499 [38 N. E. Eep. 726]; Matthews v. Capshaw, 109 Tenn. 480 [72 S. W. Eep. 964; 97 Am. St: Eep. 854]; Jennings v. Teague, 14 S. C. 229; Bunner v. Storm, 1 Sandf. Ch. 357; Perry, Trusts Sec. 511; McGavoch v. Pugsley, 1 Tenn. Ch. 418; 2 Williams, Executors 841. j
    Supplemental brief. Harp v. Wallin, 93 Ga. 811 .[20 S. E. Eep. 966]; Williamson v. Berry, 49 U. S. (8 How.) 495 [12 L. Ed. 1170] ; Hull v. Culver, 34 Conn. 403; Fleming v. Mills, 182 Ill. 464 [55 N. E. Eep. 373] ; Warren v. Webb, 68 Maine 133; Lamed v. Bridge, 34 Mass. (17 Pick.) 339; Price v. Bassett, 168 Mass. 598 [47 N. E. Eep. 243]; Stocker v. Foster, 178 Mass. 591 [60 N. E. Eep. 407],
    Driggs, Heinlein & Armstrong, and W. E. Moore, for defendants .
   COOK, J.

John Block, at the time of his death, was the owner of forty-three acres of land. It was unproductive and of little value for farming purposes. The buildings were in bad condition and the property altogether was not worth over $600 with a rental value of not more than $75 a year. There was a mortgage upon the property of about $500, past due.

On August 21, 1902, John Block died testate, leaving a widow and eight children, two of whom were minors. His will provided as follows:

Item first. “I direct that all my just debts and funeral expenses be paid.”

Item second. “I give, devise and bequeath to my beloved wife, Katharine Block, in case she survive me, all my property both real -and personal, during her natural lifetime, and in the event that it should become necessary for the maintenance of my said wife, and of my children, whom she is hereby directed to provide for, my said wife is hereby authorized to sell any or all of my said property, either real or personal, or both, giving a good, clear and indefeasible title thereto for said purpose.”

Item third. “I give, devise and bequeath after the death of my said wife, to all my children, share and share alike, all of my property which may be left after the death of my said wife.”

Item fourth. “T hereby appoint my said wife the executrix of this my last will, and direct that no bond be required of her as such executrix; and I hereby authorize he? as such executrix to sell and convey all or any part of my real and personal property, for the purpose in item second of this will set forth, on such terms and for such price as to her may seem best without the intervention of any court whatever.”

1 Soon after the death of John Block oil was discovered in the neighborhood of the farm and the widow and the six children who had attained their majority leased the farm to the Imperial Oil and Gas Company for oil purposes. Subsequently a guardian was appointed for the minor heirs and by order of the probate court the guardian made a lease to the same company, of the interest of the minors. The royalty reserved was one-eighth of the oil, and the lease of the widow and six children provided that the royalty should be paid to her, -"Katharine Block, during her life, but the lease of the guardian had no such provision.

After the execution of these leases the widow, Katharine Block, by contract in writing duly executed and recorded, sold and conveyed to the plaintiffs, Frank Harén and John liaren, for the sum of $600, which was paid to her, one-half of the one-eighth royalty upon the premises situated east of the road leading from "Woodsfield to Mil-tonsburg containing about twenty acres, stipulating in the contract that the sale was made under the power contained in the will of her husband, John Block, deceased — the sale having become necessary for the purpose of maintaining her and the children of decedent.- At the time this contract was made no oil had been discovered on the forty-three acre tract, but about six weeks previously oil had been discovered on the adjoining farm and soon after the making of the contract the lessee, Imperial Oil & Gas Company, brought in upon the part of the forty-three acres lying east of the road a large producing well. Thereupon the Avidow, Katharine Block, refused to sign a division order for the royalty coming to the Harens and she and the children and guardian wholly repudiated her contract on the ground that she had no legal authority to make the same. This action is .brought to compel her to sign the necessary division order and to quiet the title of plaintiffs in the royalty purchased by them.

The question, therefore, is: Had the widow, Katharine Block, authority to make the deed of sale to plaintiffs? It is admitted that the consideration paid was a fair one and that the widow acted in good faith in making ¡the sale. Defendants claim that- the burden is upon the plaintiffs to show the existence of such necessity. While upon the part of the plaintiffs it is claimed that the widow, the donee of the power, having sold the property and having set forth in the deed, that the necessity had arisen, is conclusive proof of such necessity and cannot be questioned by either the widow or the parties entitled to the fee after the death of the widow. Many authorities have been cited by counsel, tending to sustain each of these contentions; but in our judgment neither claim is correct.

There are three distinct descriptions of powers of the character of those contained in this will:

First. The power to sell where the judgment and discretion as to the necessity, is vested in the donee of the power. In such case where the power is exercised it is conclusive and cannot be attacked.

Second. Where the execution of the power depends upon a certain event, as death, birth, marriage, a certain date, etc. In such case, when the event has taken place the donee of the power has the absolute right to sell. ’

Thirdi Where the power to sell, as in this ease, depends upon the happening of an uncertain event, which may or may not exist at the time of sale, depending upon circumstances, then, even where there is no fraud, it must be shown when the sale is attacked that the event has happened justifying the sale.

It is said that this would be impracticable and unjust to the purchaser and furnish to the parties attacking the sale an unconscionable advantage; that the purchaser has a right to rely upon the determination of the donee of the power as to whether or not the conditions exist necessitating the sale; that to hold otherwise would create doubt and be in the interest of parties desiring to perpetrate fraud.

Such is the reasoning in the case of Doran v. Piper, 164 Pa. St. 430 [30 Atl. Rep. 306], in which it is said:

“If, under the law, that purchaser would be required to investigate whether the necessity existed, he might conclude that it did exist, she might conclude that it existed; and yet, if the law be as contended for by plaintiff, his title would depend upon as many juries as there were surviving children.”

We cannot conceive bow the reason of the trial judge who tried that case and which was approved by the Supreme Court is at all conclusive or even convincing. This condition arises in all cases where the facts are in doubt and there are severable interests.

How must it be shown that the uncertain event has happened that justifies the sale? We think, as under the provisions of this will, that the fact of the widow’s selling the property, and especially when she states in the deed that the event has happened which justifies the sale, that raises a presumption that she was authorized to make the sale and that'the 'Burden rests upon the parties attacking the sale to show that the event has not happened.

In the case of Doran v. Piper, supra, which was an action in ejectment, the court, under objection and exception, admitted in evidence the deed under which defendants claimed, and plaintiffs rested. The court charged in effect that there was no burden on' defendant to show that the land was improperly sold, and there being no evidence offered on the subject, gave binding instructions in favor of the defendants.

This, we think, is correct, and is in harmony with our holding. To the same effect is Swarthout v. Rainer, 143 N. Y. 499 [38 N. E. Rep. 726].

In that case the provision of the will was: “To have and to hold for her comfort if she need the same during natural life:” Held, that the burden of showing that the sale (a mortgage in this case) was not necessary for the widow’s comfort and support was upon 'the assailing party.

The authorities bearing upon both sides of the question have been' fully collected by counsel in their exhaustive briefs. We shall not refer to them in detail or attempt to analyze or reconcile the different holdings, but simply cite them: Page, Wills Sec. 696; Griffin v. Griffin, 141 Ill. 373 [31 N. E. Rep. 131]; Doran v. Piper, supra; Bishop v. Remple, 11 Ohio St. 280; Dean v. Loewenstein, 3 Circ. Dec. 597 (6 R. 587) ; Leonard v. Missionary Soc. 35 Hun. 290; Scheidt v. Crecelius, 94 Mo. 322 [7 S. W. Rep. 412; 4 Am. St. Rep. 384]; Larsen v. Johnson, 78 Wis. 300 [47 N. W. Rep. 615; 23 Am. St. Rep. 404] ; Stephens v. Winshop, 18 Mass. (1 Pick.) 318 [11 Am. Dec. 178] ; Henderson v. Blackburn, 104 Ill. 227 [44 Am. Rep. 780] ; Sears v. Livennon, 17 Iowa, 297 [85 Am. Dec. 564]; Crawson v. Crain, 97 Mass. 459 [93 Am. Dec. 106]; Swarthout v. Rainer, 143 N. Y. 499 [38 N. E. Rep. 726]; Matthews v. Capshaw, 109 Tenn. 480 [72 S. W. Rep. 964; 97 Am. St. Rep. 854],

The evidence in this case not only does not show that at the time of the sale it Avas not necessary to make the sale for the purpose of carrying ont the provisions of the will for the maintenance of the widow and children, bnt it conclusively shoAvs the contrary.

Finding and decree in favor of plaintiffs as prayed for in their petition.

Burrows and Laubie, JJ., concur.


author: SWING, J.

text:
    BANKS AND BANKING — BILLS, NOTES AND CHECKS.
    [Hamilton (1st) Circuit Court,
    February 7, 1907.]
    Jelke, Swing and Giffen, JJ.
    Charles G. Blake v. Hamilton Dime Sav. Bank.
    1. Payee Procuring Certification of Check cannot Stop its Payment to his Indorsee.
    A check certified by the drawee bank at the request of the payee thereof is the obligation of the bank, which when indorsed according to the terms of the certificate and delivered is payable to bearer or indorsee on demand free from any claim of the drawer and he has no authority to stop its payment; although if certification had been procured by the drawer before -delivery to the payee the drawer might stop payment thereof to the payee.
    [For other cases in point, see 1 Cyc. Dig., “Bills, Notes and Checks,” §§ 542, 543. — Ed.]
    2. Relation of Bank and Depositor of Certified Check is that of Debtor and Creditor only.
    Receiving a certified check of another bank and crediting it to the account of a depositor upon his indorsement thereof does not make the receiving bank a purchaser for value. The relation between the depositor and bank being that of debtor and creditor, and the bank gets only such title therein as its depositor had.
    [For other cases in point, see 1 Cyc. Dig., “Banks and Banking,” §§ 133-140. — Ed.]
    [Syllabus approved by the court.]
    Error to Hamilton common pleas court.
    Burch & Johnson, for plaintiff in error.
    Murphy & Williams and Pogue & Pogue, for defendant in error.
   SWING, J.

This was an action in the court of common pleas by the defendant in error against the Franklin bank on a certified cheek, which check is as follows:

“Office of C. G. Blake & Co.,
“Wholesale Coal & Coke, First National Bank Building.
“No.-12360. Cincinnati, Ohio, Oct. 16, 1903.
“The Franklin Bank.
“Pay to order of C. G. Blake two hundred and seventy-five dollars. “275. C. G. Blake & Co.”
Across the face of the check the following appears:
“Good for $275 when properly indorsed. The Franklin Bank, IT. Sachteleben, Teller.”
The following indorsements appear on the check:
“Pay to order of Charles Werbel.
“C. G. Blake,
‘ ‘ Charles WeRbel. ’ ’

The facts show that on October 19, 1903, the said Charles Werbel deposited said check with the Hamilton Dime Savings bank and was given credit on his account for the amount of the check. At the time of the deposit Werbel had to his credit over $800 and has always had 1o his credit in said bank a sum largely in excess of the amount of the cheek. Said check was presented to the Franklin bank, but payment was refused, and thereupon the Dime Savings bank, to wit; on October 20, 1903, brought its action against the Franklin bank. Afterwards the Franklin bank filed an affidavit for interpleader saying that it was ready and willing to pay said sum into court, and that C. G. Blake had notified it not to pay said check, and that he claimed to be owner of the same. And thereupon said bank by order of court paid said sum into court.

C. G. Blake was made a party and filed an answer, in which he admitted the check was a certified check, and that the check was certified by the Franklin bank at his request, and that the same was delivered by him to said Charles Werbel; that said plaintiff is not the owner or holder of said check; that said Werbel delivered the same to said plaintiff after notice to said Werbel that payment of the check would be stopped, and that plaintiff received the check with full knowledge ,of the same. Then follows allegations setting' forth the transaction which brought about the giving of the cheek.

It was all about the purchase of a horse by said C. G. Blake from said Charles Werbel. The horse was represented by said Werbel to be sound, a good and quiet driver, not afraid of the cars; any woman could drive him, and only six years old; whereas he was eight or ten years old, unsound, afraid of the cars, and no woman could drive him.

Plaintiff denied the allegations of Blake’s answer

. A jury was waived and the cause tried by the court. The court found for the plaintiff and at request of counsel stated its conclusions of fact and law separately. Blake prosecutes error to said judgment and asks for a reversal, the main ground relied on being, that said judgment is contrary to law.

There is virtually no dispute about the material facts pertinent to the issue, if the question about soundness of the horse cannot be brought into the case and the court below ruled out such evidence.

The-admitted facts are: That the firm of C. G. Blake & Co., of which said C. G. Blake is a member, drew its cheek on the Franklin bank for $275, in favor of said C. G. Blake, on October 16, 1903; that said C. G. Blake presented said check to said bank and had the same certified by the teller of said bank, indorsing on said check in the usual form, “good” for $275; that after said check was certified he (Blake) indorsed the same and delivered it to said Charles Werbel in payment of a horse which he had purchased from said Werbel; that said Werbel transferred said check to said Dime Savings bank and was credited in his account with said bank to the amount of the check on October 19, 1903; that at the time of the deposit the bank had no knowledge of any claimed infirmity in the check; that there was, and that there remained in the bank, until the commencement of these proceedings, to the credit of Werbel, a sum in excess of the amount of the check.

From these facts the following conclusions must be drawn: That Blake intended to change the cheek of Blake & Co. into the certified check of the Franklin bank, in order to give Werbel a better security free from any rights of Blake & Company in the check, and that Blake intended by delivering the cheek to Werbel that it was in fact a full and complete payment for the horse, and that Werbel accepted it as such; that when Blake got the horse and Werbel got the certified cheek the sale was completed and each was rightly in possession of what he had — one the horse and the other the check — and Werbel had no further interest in the horse and Blake had no further interest in the check.

We think, as a matter of law, that the Dime Savings bank was not a purchaser for value. When it took the check from Werbel and credited it to the account of Werbel, it parted with nothing and the only relation that existed between them was one of debtor and creditor, and the bank got only such title as Werbel had. This is clearly shown by the authorities cited by counsel for Blake and many others in the same line. See Mann v. Bank, 30 Kan. 412; New York Cent. Nat. Bank v. Valentine, 18 Hun 417; Manufacturers’ Nat. Bank v. Newell, 71 Wis. 309 [37 N. W. Rep. 420] ; Thompson v. Bank, 150 U. S. 231 [14 Sup. Ct. Rep. 94; 37 L. Ed. 1063].

The question then must turn on the right of Werbel as against the Franklin bank. The bank does not dispute its liability; on the contrary, admits it, and has deposited the amount of the same in court; and the drawer of the check, Blake & Co., is not here claiming any rights as against Werbel. Werbel had nothing to do with the drawing of the check, nor with its certification, and it is admitted that he came into possession of the cheek rightly. Blake makes no claim otherwise. His claim is, that the horse for which he gave the check is unsound and not as represented by Werbel, but whatever vice there was in the horse could not attach to the check. The cheek when certified by the bank became the obligation of the bank, which when according to its terms was properly indorsed by C. G. Blake, became payable to bearer, on demand, and, so far as the bank was able to make it, had the attributes of money. Title passed by delivery, and was payable to bearer on demand, and when Blake delivered the check to Werbel, Werbel became the absolute owner of the check free from any claim of Blake to the same extent as if it had been money. 2 Daniels, Neg: Instr. See. 1601 ei seq. Morse, Banking Sec. 414 ei seq., and authorities cited by these authors.

If the drawer of the check, C. G. Blake & Co., had procured the certification of the check before delivering the same to C. G. Blake, the rights existing between them would not be the same as in this ease— for instance, C. G. Blake & Co. would still be liable to C. G. Blake for the failure of the bank to pay (see Cincinnati Oyster & Fish Co. v. Bank, 51 Ohio St. 106, 110 [36 N. E. Rep. 833; 46 Am. St. Rep. 560], and authorities cited in Morse, Banking supra), and probably O. G. Blake & Co. might have been able to assert some claim against the check in the hands of C. G. Blake. But when C.' G. Blake had the check certified, he no longer had any claim against C. G. Blake & Co. His object in having it certified was to release C. G. Blake & Co. and accept the bank as payer, and of course C. G. Blake & Co. had no further claim against the check in the hands of C. G. Blake or anyone else. And when the bank certified the check for its own protection and for its own advantage, it gave to the check the character, that “when properly indorsed” — that is, when C. G. Blake should place his name on it — it should be payable to bearer on demand, and it never intended that C. G. Blake, after he indorsed the check and delivered it to anyone, should have any interest in it, and this we think is the law.

Judgment affirmed.

Jelke and Giffen, JJ., concur.


text:
    ADULTERATED MILK — FOOD LAWS.
    [Hamilton (1st) Circuit Court,
    January 17, 1907.]
    Jellce, Swing and Gifíen, JJ.
    GEORGE DiERSING v. STATE OF OHIO.
    Sufficiency op Evidence to Convict foe Selling Adultee-ated Milk.
    The admitted sale of milk which was below standard, from a wagon belonging to the defendant and from cans which contained the supply he had delivered to his customers, does not justify his conviction of selling milk below standard, where the evidence fails entirely to show that the boy who made the sale was authorized to sell milk, or had ever sold any before, but that he sold the milk on this occasion without the knowledge of the owner, while temporarily in charge of the wagon, and did not account to the owner for the money received therefor.
    [For other cases in point, see 4 Cyc. Dig., “Food Laws,” §§ 32-40. — Ed.]
    [Syllabus approved by the court.]
    ERROR to Hamilton common pleas court.
    A. H. Bode, for plaintiff in error.
    C. F. Williams, for defendant in error.
   SWING, J.

George Diersing was arrested, tried and convicted before M. Muller, a justice of the peace in the city of Cincinnati, on a warrant sworn to by John J. Kinney, assistant dairy and food commissioner of Ohio. The offense charged in the affidavit of Kinney was, that said George Dier-sing did, on June 29, 1905, through his agent, Joseph Kurrus, sell to said Kinney one-half pint of milk, which said milk contained only 10 63-100 per cent of total solids, which it is alleged is contrary to the law of the state.

The evidence is all embodied in a bill of exceptions. The ease was taken on error to the court of common pleas, and in that court the judgment of the justice was affirmed. Error is prosecuted to this court to reverse the judgments of said courts. The error relied on is, that the evidence is insufficient to sustain the judgments.

There is no question but that Kinney purchased from a boy who, at the time, was in charge of the wagon of Diersing, a half pint of milk; that Diersing was in the business of selling milk to customers in said city; that the milk sold to Kinney by this boy was impure and contained 15 per cent of water.

The evidence shows that no such boy, by name Joseph Kurrus, was ever in the employ of Diersing, but a boy by the name of Webber was in the employ of Diersing, and was in control of said wagon at the time Kinney purchased the milk.

Diersing testified that he had served his customers, and having some business to transact, left his wagon in Webber’s charge, with instructions to meet him at Third and Walnut' streets, in said city, at a certain time'; that Webber was not employed by him to sell any milk, never did sell milk for him, and in this instance did not reporjt to him any sale or pay him any money for the sale of milk. The boy Webber ran away shortly after this, and has not been found. There is nothing in the evidence to disprove the statement of Diersing except the circumstance above referred to.

We think this is insufficient to sustain the conviction. It was incumbent on the state to prove by clear and convincing evidence that the boy was the agent of Diersing for the sale of this milk. There is nothing unreasonable in what Diersing says .about this boy. He was employed about his place to wash cans and take care of his horses; never^ had sold any milk for him; came to town that day to buy some things at the store; did not authorize him to sell any milk, and he did not report to him that he had sold any milk. No other sale was shown to have been made by this boy at this time or at any other time. It is fairly shown that the milk belonged to Diersing; it was sold out of his cans and out of his wagon.o He says that he came to town with- thirty-five gallons of milk; had served his customers and there was probably two gallons left in the cans. The mere fact that the boy in charge of his wagon and his milk sold the milk does not of itself prove by clear and satisfactory evidence that the boy was authorized to sell in the absence of other evidence showing sales by the boy for Diersing or other direct evidence that Diersing authorized him to sell. Diersing says he never authorized him to sell any milk; that the boy never did sell milk for him and he never employed him to sell milk. The boy could not bind Diersing, unless Diersing authorized him to sell, and such authority is not shown in a clear and satisfactory way by showing a single sale by the boy, especially when weighed in connection with the evidence of Diersing which seems to be clear, reasonable and satisfactory.

The judgments of the court of common pleas and of the justice of the peace should be reversed, and Diersing discharged, for the reason that said conviction is not sustained by sufficient evidence.

Jelke and Giffen, JJ., concur.


author: MARVIN, J.

text:
    BENEFICIAL ASSOCIATIONS.
    [Cuyahoga (8th) Circuit Court,
    March 4, 1907.]
    Winch, Henry and Marvin, JJ. ,
    W. H. Schwartz, Admr. et al. v. St. Elizabeth Roman & Greek Catholic Union et al.
    1. Forfeiture of Membership for Nonpayment of Dues.
    Membership in a mutual benefit society cannot be forfeited, against the will of the member by delinquency, ipso facto; but he must first be given an opportunity to justify himself, and this must be followed by some action by the society looking to a severance of relations between the society and the member.
    [For other cases in point, see 1 Cyc. Dig., “Beneficial Associations,” §§ 77-108. — Ed.]
    2. Charge to Jury as to False Application for Membership.
    A charge of court, which assumes that because a husband acted for his wife in applying for membership for both himself and his wife in a mutual benefit society, any false representations which he may have made with reference to his own age, etc., affected equally the membership of his wife, is erroneous.
    [Proof of this decision and syllabus was submitted to Judge Marvin and corrected. — Ed.]
    ERROR to Cuyahoga common pleas court.
    W. H. Schwartz and Hart, Canfield & Croke, for plaintiffs in error.
    M. B. Putney, for defendants in error.
   MARVIN, J.

The parties here are as they were in the court below. The administrator of the estate of Maria Kohanczo, deceased, her husband and children, are the plaintiffs, and the defendants are the St. Elizabeth Roman and Greek Catholic Union, and the several officers of said union. The union is an unincorporated beneficial association, organized in August,- 1903, with the following constitution and by-laws:

“The Constitution and By-Laws of the St. Elizabeth Roman and Greek Catholio Union.
“Chapter I.
“Name, Seat and Aims of the Union.
“Paragraph 1. The name of the union, which cannot be changed while the union is in existence, will be in existence is St. Elizabeth Roman and Greek Catholic Union.
“Paragraph 2. The seat'of the union is Cleveland, Ohio. The seal of the Cleveland Union contains the following inscription: ‘St. Elizabeth’s Roman and Greek Catholic Union.’
“Paragraph-3. The aim of this union is the Roman and Greek Catholics who emigrate to America from Hungary or who were born in this country from Hungarian parents, who keep these rites or who direct the rites according to the rules and regulations of the Catholic faith, to promote their attachment to the native branch, and to aid after the decease of its members, their widows and orphans, with a sum of money as specified in these by-laws.
‘ ‘ CHAPTER II.
“Bights and Duties of Members.
“Paragraph 4. Any native Roman or Greek Catholic Hungarian man or woman will be admitted as a member of this union who has reached his or her age of sixteen years and is not older than fifty years old. '
“Such persons who have been punished before or who are fugitives from justice cannot be elected as members of the union.
“If a member got into the union by false allegations or false data, and it is found out that, for instance, he is a fugitive of justice, he will be expelled from the union.
“Paragraph 5. Local people or people living in this city, can report their intention of joining the union by a regular member. Only branches consisting of at least twenty-five members will be accepted as out-of-town members by the union.
“The trustees of the out-of-town branches are the heads of such branches.
‘ ‘ The union reserves its rights always to supervise such trustees and officers of the union, and these trustees are responsible for their branches.
“Should there be any compliant against a prospective' member or a branch this has to be taken before the meeting and the meeting will decide about this complaint.
“Paragraph 6 (second section) :
“If the prospective member of branch fully answers the prescriptions of paragraph 4, they may be admitted into the union.
“Paragraph 7. Every member after receiving two votes shall be a member and has the right to vote immediately after being admitted, but can only be elected officer after a membership of six months.
“Paragraph 8. The initiation fee shall be: From sixteen to twenty-five years, $1.30; from twenty-five to thirty-five years, $1.40; from thirty-five to forty-five years, $1.50; from forty-five to fifty years (not yet reached).
“Paragraph 9. From the money paid in advance to the secretary ■from the initiation fees, one dollar shall constitute the capital of the union; the rest shall cover the expenditures of the union.
“Paragraph 10. Every member has to pay into the treasury of the union thirty cents semiannually; the money so collected shall be used for the expenditures of the union, i. e., for the official organ, hall rent, fitting up the office, etc. The money left after such expenditures shall be added to the capital of the union.
“Paragraph 11. After the decease of any member of the union, the heirs shall receive as many dollars as the union has members.
“In ease of total disability, that is, if a member lost one arm, one leg or both eyes, such member has to report the accident to the board of officers of the union. The board of officers shall thoroughly examine the case and if the total disability was proved, such member shall get as half death benefit as many fifty cents as the union has members. Both the death and the accident benefit will be paid by the members, in such a way that if a member of the union died or was found totally disabled by the board of officers, every member must pay the one dollar death assessment, respectively, the fifty cents accident assessment, to the treasurer of the union within fourteen days.
“Paragraph 12. Should- a member fail to pay the death benefit dollar after the decease of a fellow-member, then, in case of his death, his heirs could not claim any death benefit from the union.
“Paragraph 13. Should a member of the union remove from the seat of the union and should he want further to remain a member, then he must report his moving to the president or secretary. Anyone failing to do so will not be considered a member of the union any longer.
“Paragraph 14. Members living remote from the seat of the union are submitted to all duties prescribed by the laws of the union.
“Paragraph 15. If a member quits the union and wants to join it again, he 'can only be accepted as a new member.
“Paragraph 16. If any member of the union, for any cause whatever, insults the union or causes any damage to the same, then he shall be expelled from the union, and only in such case can he be retaken, if he acknowledges his mistake and apologizes to the union and if the apology was accepted, he reimburses the union for the damage caused by him.
“Paragraph 17. Expelled members lose all their rights against the union and cannot even appear at the meetings of the union.
• “The members who quit or were expelled, cannot claim any damage whatever or the repayment of the moneys paid in by them.
“CHAPTER III.
“Election of Members and Officers.
“Paragraph 18. Such persons who want to join the union must be recommended by regular member and must prove the state of- their health by a physician’s certificate, which they must present to the secretary.
“Paragraph 19. The union shall hold a regular meeting every month and the members will be notified of the time of such meeting by the official organ.
“Paragraph 20. The officers shall be elected for one year and it is their duty to act with the branch organization according to the best conscience in the interests of the union. Should any officer go into business then he must resign his office.
“Paragraph'21. Only such persons can be elected officers who can read and write Hungarian and who are artisans or tillers of the soil in the old country.’’

On December 6, 1903, Maria Kohanczo and her husband, George Kohanczo, became members of this union. At the time they >so beeamt members they each paid to the union $1.30.

On May 7, 1904, the said Maria Kohanczo died, and this suit was brought to recover the amount provided by the laws of the union to be paid to the families of those dying, while members of the association.

The defense was made on the ground that Maria Kohanczo, at the time of her death, was not a member of the association:

First. Because it is said in the answer she made false representations as to her age when she joined.

Second. That she was not a member of a Greek or Roman Catholic Church in good standing at the time she joined, and that she falsely and fraudulently represented that she was such member of the church.

Third. That she was in arrears for dues to the amount of thirty cents, payable on January 1, 1904.

As to the first of these grounds, it was abandoned at the trial, as no evidence was introduced tending to support it.

As to the second, evidence was introduced tending to show that the deceased, at the time of her death, was not a member of the church conducting herself according to its rules, and that she had neglected her obligations as a member of the church of which she had been a member. This evidence, however, is confined to the time of her death, or so near to it that it cannot be said to establish that she was not such church member, as to make any such representations she made in that regard false at the time she joined the union.

As to the third, it is claimed by the plaintiff .in error that at the time the deceased became a member of the union, the one dollar and thirty cents paid was made up of one dollar initiation fee and of thirty cents for semiannual dues, paid in advance. The deceased at the time she became a member of the union was more than forty-five years of age, and it will be noticed that the amount to be paid as an initiation fee for one above the age of forty-five years' is not fixed by the by-laws, nor is the date of payment of the. semiannual dues fixed by such bylaws, the provision as to it simply being that thirty cents shall be paid semiannually by each member; but the secretary testifies that at the time the husband of the deceased made application for membership for himself and his wife, he was notified that the one dollar and thirty cents was all as an initiation fee, and that the semiannual dues would be payable in January and July of each year. It is claimed, too, on the part of the defendant in error that a custom had been established by which the semiannual dues became payable on the first day of January and July of each year; but as the union was organized in August, 1903, and this .deceased joined the union in December of the same year, no custom could well have grown up at that time for payment in January and July, because the union had not yet been in existence sufficiently long; and, at the time of her death, but one of the dates on which these semiannual dues would become payable, as claimed by the secretary, had passed, so that it could hardly be said that any custom had been established, nor does it appear anywhere that the union had authorized the secretary to say that these dues should become payable on the first day of January and July, or that they were to be payable in any particular months. However, as the secretary was the officer to whom the application was made, and as he says he notified the husband that these dues would be payable on the dates specified, the defendant in error is perhaps warranted in the claim that as to this decedent, those were the fixed dates on which payment should have been made.

Among the provisions of the by-laws, it will be noticed that an official organ for the union was established, and that the members of the union were required to accept notices published in such official organ. The only action taken by the union, looking to the expulsion of the deceased from the association, consists of the following:

On April 30, 1904, a letter was’ sent to George Kohanczo, the husband, which reads as follows:

“St. Elizabeth’s Roman AND Greek Catholic Union.
“Organized, July 12, 1903.
“Cleveland, Ohio, April 30, 1904.
“Dear Fellow Member, George Kohanczo:
“You and your wife were reported at the meeting of the union that' you joined the union by falsehood. You are not forty-eight years old, but surpassed the fifty-one years, too. Therefore, clear yourself and your wife with birth certificate within eight days. If you fail to do so, then you will be scratched [expelled; both parties will agree when I use the word expelled] ; then you will be expelled from the union by resolution adopted at the meeting; and, therefore, you cannot claim anything from the union. You have lost all your rights.
“Joseph Nameth, Secretary,
“77 Bismark.”'

It will be noticed that this letter charges that both the husband and wife were reported at the meeting of the union ms having joined the society by falsehood, but the falsehood applies to the husband alone, no suggestion being made that any misrepresentation was made as to the age of the wife.

On May 1, 1904, at a meeting of the union, the minutes show that,

“Nine members were elected in the union, two were scratched, George Kohanczo and his wife, because he declared in the presence of one controller that he already was older than the by-laws prescribe.”

These minutes are in the Hungarian language, and the translator explains that the word “scratched” as used, indicates that these parties were either suspended or expelled; but, as has already been stated, there was no evidence tending to show, nor was it claimed on the trial, that this woman was liable to expulsion because of her age; nor is it claimed that because of this resolution she ceased to be a member of the union, but really that she ceased to be because of nonpayment of the dues for January, 1904. That this rule requiring payment was not regarded as so inviolable that one ceased to be a member simply because of the failure to pay at the date, is manifested from the further minutes of the meeting, at the date already named, the language referred to being the following:

“Further, the secretary was ordered to warn the members in arrears, through the official organ, by notice. This was done. ’ ’

The very day on which this resolution was passed the society recognized that one might be in arrears for dues and still be a member until some further action was'taken. t

On April 7, 1904, notice was published in the official organ, reading as follows: '

“Such members of the St. Elizabeth’s Union who still have not paid the twenty-five cents semiannual dues, which were due in the month of January, are warned that they fulfill such obligation by all means until the meeting to be held on the tenth of this month; otherwise they cannot claim any benefit at all.”

As to this notice, it will be observed that the amount specified as payable is twenty-five cents instead of thirty cents, and also that there is here a recognition that one may be in arrears for dues and still be a member. It comes then to this: That either Mrs. Kohanezo was a member of this union at the time of her death, or that she ceased to be a member for nonpayment of dues,* without any action of the union expelling her on that account. The law does not favor forfeitures, and we do not understand that without some action of the union, one who was a member in good standing, could against his will cease to be such member without having had_an opportunity to justify himself, and certainly not without some action taken by the union, looking to the severing of the relations between the union and the members See Grand Lodge A. O. U. W. v. Brand, 29 Neb. 644 [46 N. W. Rep. 95], and 3 Am. & Eng. Enc. Law (2 ed.) 1086 and 1087, note 1 of which reads:

“Where a suspension for nonpayment of dues is provided for in the laws of the association, and it is also provided that such suspension shall work a forfeiture of benefits, the fact of delinquency alone does not ipso facto work a forfeiture; a suspension by formal proceedings is necessary.”

A large number of authorities are cited in support of this proposition.

The charge of the court in this case is complained of, and is subject to the criticism that the court seemed to assume that because the husband acted for his wife in the matter of applying for membership and negotiated the joining of the union, whatever he did with reference to his own membership applied equally to what he did with reference to his wife’s membership. An example of this is found in these words of the charge:

“So they then claim that the,testimony has been offered tending to prove that the husband of Maria Kohanezo was not at the time he applied for membership, a Roman or Greek Catholic in good standing; that is, that he was not a practical member of the Greek and Roman Catholic Church. The plaintiff insists that she was. They say that her husband was not in good standing at that, time in either church, and testimony has been offered tending to prove that he had not performed his religious duties and that he was not eligible, and would not have been received had the truth been known. In other words, that he falsely represented; that they relied on the representations; he was admitted to the society; they were deceived and injured thereby. ’ ’

It will be noticed by this language that the fact that the husband* was not a member of the church or made false representations when becoming a member, might in some way affect the wife, which, of course, could not be true, unless the false representations made were false representations as to the wife. What was said would be applicable if it were a claim based upon the husband’s membership, but this suit was based upon the membership of the wife, and if there is an objection to this, it is because it might mislead the jury to the extent of thinking that the wife’s membership depended upon that of her husband, which would not be true.

The judgment in this case is reversed, because the verdict is against the weight of the evidence, and a motion for a new \ trial should have been sustained for that reason.

Winch and Henry, JJ., concur.


author: HURIN, J.

text:
    ASSESSMENTS — MUNICIPAL CORPORATIONS.
    [Mercer (3rd) Circuit Court,
    December 20, 1906.]
    Norris, Hurin and Donnelly, JJ.

      J. F. Smith v. Rockford (Vil.) et al.
    1. Limitation as to Municipal Sewer Bonds Refers to Amount Issued.
    Bonds for payment of a municipality’s portion of street and sewer Improvements are governed entirely as to the amount of issue by the provisions of Rev. Stat. 2835 (Lan. 4294) et seq., and amendments thereto, and are subject to the limitations therein prescribed and especially to the limitation for any one calendar year, of 1 per cent of the valuation of taxable property within the corporation and on the tax duplicate; and this limitation refers to the amount of bonds issued, and not to the amount becoming payable within any one calendar year.
    [For other cases in point, see 6 Cyc. Dig., “Municipal Corporations,” §§ 3109-3116. — Ed.]
    2. Bonds not Issued until after April 4, 1906, not within Curative Provision's.
    Bonds not authorized nor issued until after the date on which the amendments to Rev. Stat. 2835, 2835b, 2836, 2837 (Lan. 4294, 4295, 4296, 4297) went into effect, April 4, 1906, do not come within the curative provisions of Rev. Stat. 2837 (Lan. 4297) as then amended, notwithstanding the ordinance providing for such issue of bonds directed that they be dated back to April 1, of that year, and further declared that Jhe indebtedness so provided for wa^ an existing, valid, and binding obligation of the village.

      3. Persons Contracting with Municipality Assume Risk of Invalidity of Council’s Acts.
    Persons contracting with a municipality for the construction of street or sewer improvements are bound to use reasonable diligence and business caution to ascertain the validity of the proceedings and authority of Council to enter into such contracts; and where a gross disproportion is apparent between the amount authorized to be so expended and the amount legally applicable thereto in view of the taxable valuation of the property included within such municipality, such contracting parties cannot rely merely on the clerk’s certificate that the requisite funds are in the treasury and unappropriated for any-other purpose.
    4. Validity of Bonds Issued in Excess of Statutory Limitation.
    Where the total amount of bonds authorized by council exceeds the 1 per cent limitation but the contracts entered into and partly executed on the faith of such issue will not require an amount in excess of that limitation, the issue, to the extent of the amount required to meet such contracts so in part executed, will be upheld as binding on the municipality.
    [For other cases in point, see 6 Cyc. Dig., “Municipal Corporations,” §§ 3072-3082. — Ed.]
    [Syllabus by the court.]
    Appeal from Mercer common pleas court.
    Layton & Son and J. W. Loree, for plaintiff.
    E. E. Jackson, J. D. Johnson and Balyeat & Conn, for defendants .

       Decision on motion for temporary injunction, Smith v. Rockford, 17 Dec. 214.

   HURIN, J.

The plaintiff, a citizen and taxpayer of the village of Rockford, brings this action on behalf of the corporation of Rockford and prays for an injunction, restraining said village, its council and officers from executing and delivering certain bonds of said village for street and sewer improvements and from borrowing money and pledging the credit of the village for the payment th.ereof. He asks also that defendants be enjoined from tearing up the streets of said village in furtherance of said improvements.

The ease was heard in the common pleas court and a permanent injunction granted as prayed for. The defendants thereupon appealed the ease to this court. ,

"We have heard the evidence and it thereby appears that on March 16, 1906, the village council passed certain ordinances for the improvement of Main and Market streets in said village by grading, draining, curbing and paving the same.

These ordinances provided in the usual way for the assessment of the cost, less one-fiftieth part thereof and the cost of intersections upon the abutting property, and on or about May 8, 1906 other ordinances were passed providing for issuing the bonds of the village in anticipation of the collection of these assessments and for the payment of the village’s share of the cost.

The bonds so authorized for the Main street improvement amounted to $8,000. For the Market street improvement the bonds amounted to $5,000. For the Main street sewer they amounted to $2,000, and for the Market street sewer they amounted to $2,000, making a total indebtedness thus created of $17,000.

These ordinances passed May 8, 1906, declared that these various amounts of money were existing, valid and binding obligations of said village and provided that the bonds thus issued should bear date of April 1, 1906. '

The question of issuing said bonds was never submitted to the vote of the qualified electors of said village. It appears further that on June 5, 1906, other bonds of the village, amounting to $2,000, were issued and sold for the purpose of improving the waterworks plant of the village and these bonds are now outstanding obligations of the village ; and that the income from the waterworks plant is not sufficient to cover the costs of all operating expenses, interest charges and to place a sufficient amount to the credit of the sinking fund to retire said bonds as they become due.

That on June 12, 1906, the contract for the waterworks improvement was let to Earl Lewis for $3,094, leaving $1,094 in excess of the amount of bonds sold for that purpose. (It appears however that this excess was paid out of the revenue for 1905.)

That the total value of all property listed and assessed for taxation in the village of Rockford, Ohio, is $381,000, of which 1 per cent amounts to $3,810. That the bonds for said improvement have been sold to the firm of Briggs & Company, but have not yet been executed nor delivered.

That the village’s portion of the cost of said improvement is as follows :

For the Main street paving ..$8,605,875,
For the Market street paving. 4,471.66,
For the Sewer No. 1, . 557.53,
For the Sewer No. 2, . 768.65,
$14,403.72,

making a total village indebtedness in excess of the amount to be raised by special assessment of $14,403.72.

That there is no" money in the treasury of said village with which to pay the indebtedness thus sought to be created except certain funds which appear to have been borrowed on the credit of the village in anticipation of the bonds for said improvements which have been enjoined in this case, but that the clerk of the village certified in due form that the money required for said improvements was in the treasury of said village to the credit of the fund from which it was to be drawn and not appropriated for any other use.

That at a public letting of - the contracts for said improvements the defendant firm of Hoagland & Gibney obtained the contracts for the paving of the two streets and that the defendant firm of Campbell & Ausman obtained the contracts for the sewers on these streets and that the latter firm has entered upon the execution of its contract and has completed a portion of said sewers and torn up the streets of said village for a considerable distance.

It further appears that the contracting firms entered upon their respective contracts and attempted to execute them in reliance upon the regularity and validity of the proceedings of the village council and upon the certificate of the village clerk that the money was in the treasury applicable to these purposes and unappropriated for any other purpose, and by reason of these facts the firm of Campbell & Ausman pleads an estoppel and claims the right to proceed with the construction of the sewers in accordance with its contracts.

The power of a municipal corporation to make improvements of the kind here to be considered is purely statutory and the legislative at its last session materially changed the statutes, Rev. Stat. 2835 to 2837 (Lan. 4294 to 4297) inclusive, which control in this ease.

Revised Statute 2835 (Lan. 4294) as now amended provides that the council of any municipal corporation of the state of Ohio shall have power to issue and sell bonds for certain specified purposes among which are enumerated, the construction of sewers and the improving of streets and it further provides that—

“The bonds herein' authorized may be issued for any or all purposes enumerated herein, but the total bonded indebtedness hereafter created in any one fiscal year under the authority of this act by any township or municipal corporation shall not exceed one (1) per cent of the total valué of all property in such township, hamlet or municipal corporation, as listed and assessed for taxation,' except as otherwise provided in this act.”

Then follows a provision for assessment of more than 1 per cent of such total value of property after a submission of the question to a vote of the qualified electors of such towñslijp or municipal corporation.

There is a further provision that the net indebtedness incurred by any towtaship or municipal corporation after April 29, 1902, shall never exceed 4 per cent of the total value of all property in such township or municipal corporation, unless such excess is authorized by a vote of the qualified electors of the township or corporation.

And it is provided by.Rev. Stat. 2835b (Lan. 4295), that the limitations of 1 per cent and 4 per cent provided in Rev. Stat. 2835 (Lan. 4294) shall not be construed as affecting bonds issued under authority of said Rev. Stat. 2835 (Lan. 4294) upon the approval of the electors of the corporation, nor shall bonds which are to be paid for by assessments specially levied upon abutting property,, nor bonds issued for the purpose of constructing, improving and extending waterworks when the income from such waterworks is sufficient to covet the cost of all operating expenses and interest charges and to pass a sufficient amount to a sinking fund to retire such bonds when they become due, nor shall any bonds issued prior to the passage of Rev. Stat. 2835 (Lan. 4294) as amended April 29, 1902 (95 O. L. 318), be deemed as subject to the provisions and limitations of said section or be considered in arriving at the limitations therein provided.

There is a further provision contained’ in that act (98 O. L. 66; Rev. Stat. 2837; Lan. 4297), and that is, that—

“No township or municipal corporation shall hereafter create or incur a net indebtedness under the authority of this act in excess of 8 per cent of the total value of all property in such township or municipal corporation as listed and assessed for taxation.”

And finally there is added to this section a curative provision that—

“All bonds heretofore issued in good faith under the authority of See. 2835 [Lan. 4294] Rev. Stat., as amended April 29, Í902, and April 23, 1904, which at the time of issue, were within the limitations herein provided, shall be valid obligations of the township, city, village or other municipal corporation which issued them and in arriving at the limitations of 8 per cent herein provided, and of 4 per cent in Sec. 2835 [Lan. 4294] Rev. Stat., provided, all such bonds, except those excluded by the provisions of Sec. 2835b [Lan. 4295] Rev. Stat., shall be considered. ’ ’

This act was passed March 22, 1906, but was not signed by the governor or by him returned to the house where it originated within ten days, but'was filed with the secretary of state April 4, 1906, and took effect on that date. • ■

It will be observed that the dates of the ordinances involved in this case are of importance in determining the laws applicable.

The original ordinances passed March 16, 1906, provided for the ]improvements and approved the plans, profiles and specifications, determined how the assessments should be made and how paid and that bonds should be issued, for tbe payment of the cost of the improvements but did not authorize the issuing of the bonds.

This was done by separate ordinances passed May 8, 1906, which declared, that the indebtedness so provided for was an existing, valid and binding obligation of the village and provided further, that these bonds should be dated April 1, 1906.

The statutes which we have recited went into effect April 4, 1906 (98 O. L. 63), and were therefore in full force at the times these bonds were authorized, and as the bonds had not been issued nor authorized at the time these statutes went into effect they are not within the curative provisions of Rev. Stat. 2837 (Lan. 4297) as thus amended, notwithstanding the fact that the ordinances provided for dating them back to April 1, 1906, and declared that the indebtedness so provided for was.' an existing valid and binding obligation of the village. As no contract had at that time been entered into and no bids had been authorized or received, we are unable to see how a binding indebtedness could be held to exist.

It also appears that they have never been authorized by a vote of the qualified electors of the village and are not therefore within the exception made by the statute in favor of such bonds as are thus voted for; nor are the bonds under discussion in this case — at least such of ■the bonds as are authorized to be issued to pay the village’s portion of the indebtedness to be incurred within the other exceptions to the statute. — provided for in Rev. Stat. 2835b (Lan. 4295), for they are not to be issued for the purpose of constructing, improving or extending the waterworks of the village nor were they issued prior to the amendment of April 29, 1902. Such of the bonds, however, as were to be paid for by assessments specially levied upon abutting property would of course come within the protecting limits of this section provided they were not in excess of the 8 per cent limitation of Rev. Stat. 2837 (Lan. 4297).

It is evident then that these bonds for the costs assessed against the village must be governed entirely by the provisions of Rev. Stat. 2835 (Lan. 4294) and subject to its limitations, and especially to the limitation of 1 per cent of the total value of all property in such municipal corporation.

If it be urged that as all of the bonds are not payable in one year, the net indebtedness for that year may not exceed 1 per cent of the total property valuation, it' is a conclusive answer that the statute expressly provides that the total bonded indebtedness hereafter created in any one fiscal year shall not exceed the 1 per cent limit.

The indebtedness to be evidenced by these bonds was all created at one time -and that time we must conclude was not when the ordinance was passed declaring that there should be improvements made, but when the bonds were authorized and the contract signed, and hence this indebtedness was all created within the fiscal year 1906, and all this occurred after the passage of the new statute, Rev. Stat. 2835 (Lan. 4294), and after it was in force.

The total valuation of the property of the village was found to be $381,000. One per cent of that amount is $3,810. Four per cent of that amount is $15,240. The bonds authorized to pay the proportion of the cost of said improvements assessed against the village amounted to $17,000, an amount greatly in excess of both the 1 per cent limitation and the 4 per cent limitation, and it therefore follows that their issue was totally unauthorized.

If it' be urged that the village clerk had by his certificate declaring that the money for the payment of the contracts was in the treasury and unappropriated for-any other purpose, caused the contractors to rely on this as a fact, we must say in reply, that that alone was not sufficient to justify such a reliance.

The contractors were bound to examine into the facts and especially where there was so great a disproportion between the amount of the contract price and the amount legally applicable thereto under the property valuation of a village of the size of Rockford, the contractors were bound to use due business caution and such reasonable diligence as would have disclosed to them the facts of the case.

But there is a difference in the position of the two contracting firms. Each one of the contracts taken for the paving improvement exceeded the 1 per cent limit and was therefore illegal. But the total cost of the two sewer improvements did not together equal the 1 per cent limit:

The sewer No. 1,- contract called for.$557.53,
The sewer No. 2, contract called for. 768.65,
$1,326.18,

an amount considerably less than 1 per cent of the total valuation.

While the total amount, $4,000, authorized to be issued for sewer construction would have exceeded the 1 per cent limit, yet as this was not all needed for the construction of the sewers as shown by the contracts, these contracts being within the 1 per cent limitation were valid, and to the extent of the amount thus called for the bond issue is valid.

The finding of the court will, therefore, be in favor of the plaintiff as to all except the amount of bonds necessary to be issued in payment of the two sewer contracts, and in favor of the defendants, Campbell and Ausman, as to the bonds for such amounts.

. A perpetual injunction will be allowed restraining the defendants from' executing and issuing all bonds for the paving improvement and from tearing up the streets and alleys of Rockford for such paving improvements.

The injunction heretofore granted as to the bonds to be issued for the sewer improvements will be dissolved.

Judgment against the defendants, the council and officers of the village of Rockford for costs. Execution awarded and Gause remanded for execution.

Norris and Donnelly, JJ., concur.


author: GIFFEN, J.

text:
    BILLS, NOTES AND CHECKS.
    [Hamilton (1st) Circuit Court,
    December 29, 1906.]
    Jelke, Swing and Giffen, JJ.
    Carrara Paint Agency Co. v. American Nat. Bank of Barberton et al.
    Burden or Proving Acceptance oe Bill of Exchange.
    Where the execution of the acceptance of a hill of exchange is denied, the burden of proving such execution is thrown upon the plaintiff.
    [Syllabus approved by the court.]
    Error to Hamilton common pleas court.
    C. W. Baker, for plaintiff in error.
    Karch & Quasser, for the bank.
    Harmon, Colston,' Goldsmith & Hoadly, for the cash register company and O. E. Robinson:
    The American National Bank sued the Carrara Paint Agency Company, as acceptor, the Twentieth Century Cash Register Company, as drawer, and O. E. Robinson, as indorser of a bill of exchange for $2,500. At the trial below an instructed verdict was returned for the bank for the full amount of its claim.
    The citations of the paint company in support of its petition in eiTor were: Chicago Electric L. By. v. Hutchinson, 25 Ill. App. 476; Gray r. Tunstall, 1 TIempst. 558 [10 Fed. Cas. 1041]; Walsenburg

      Water Go. v. Moore, 5 Colo. App. 144 [38 Pac. Rep. 60]c; First Nat. Bank r. Carson, 30 Neb. 104 [46 N. W. Rep. 276] ■ Monitor Plow Works v. Born, 33 Neb. 747 [51 N. W. Rep. 129]; Siefke v. Siefke, 51 N. Y. St. 761 [22 N.. Y. Supp. 546] ; Wallace v. Wallace, 8 Ill. App. 69.
   GIFFEN, J.

The defendant, the Carrara Paint Agency Company, denied by answer that it ever made, executed or delivered,, or ever authorized to be made, executed or delivered, the acceptances set forth in the petition. The burden of proving the execution of the acceptances was thereby placed upon the plaintiff. Pavey v. Pavey, 30 Ohio St. 600; Booco v. Mansfield, 66 Ohio St. 121 [64 N. E. Rep. 115] ; Rev. Stat. 5190, 6577 (Lan. 8699, 10159).

The eashier of the bank testified that the signature of the Carrara Paint Agency Company was “put upon the drafts before they came into the bank; ’ ’ but this was in answer to a question which assumed that the signatures were genuine. Counsel for defendant objected to this question, but the court overruled the objection; to which ruling the defendant excepted.

This was prejudicial error. If the bank is a holder in due course a valid delivery of the drafts^ by all parties prior to it so as to make them liable to it is conclusively presumed. Revised Statute 3171o (Lan. 4913).

Judgment reversed and cause remanded for a new trial.

Jelke and Swing, JJ., concur.