text:
    MEASURE OF DAMAGES FOR. FAILURE TO TAKE ENTIRE ISSUE OF CAPITAL STOCK.
    Circuit Court of Cuyahoga County.
    The Davis Laundry & Cleaning Company v. F. C. Whitmore.
    Decided, December 16, 1912.

      Damages for Breach of Contract in Sale of Chattels.

    Where there has been a breach of a contract for the purchase of all the capital stock of a corporation, the measure of damages to which the seller is entitled is the difference between the contract price and the market price of the stock at the time of the breach; and where there has been no acceptance of the stock or transfer of the same on the books of the company, the seller is not entitled to recover the full contract price.

      Ford, Snyder & Tilden, for plaintiff in error.

      Coolt, McGoivan Foote, contra.
    Marvin, J.; Winch, J., and Meals, J., concur.
    Whitmore, hereinafter spoken of as the plaintiff, brought suit against the Davis Laundry & Cleaning Co., hereinafter spoken of as the defendant, claiming to recover the sum of $11,700 as the purchase price of 250 shares of the capital stock of the Ideal Laundry Co., a corporation which was doing a laundry business at the city of Lorain, Ohio, where it had a plant with machinery, delivery wagons, horses, etc., the plaintiff alleging that he had sold to the defendant said entire 250 shares, which was the entire capital stock of said the Ideal Laundry Co.
   At the time that it is alleged the defendant purchased said stock, a writing was executed, signed by the defendant, reading:

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

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

This writing was dated the llth of January, 1910. One hundred and twenty-six shares of this stock were owned by the plaintiff at the time of the execution of the writing. The remaining 124 shares were owned by other parties.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In the ease of Andrews v. Watson, 12 C. D., 686, it is said:

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

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

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

This case is affirmed, without report, in 51 O. S., 619.

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

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

In the- 7th edition of Benjamin on Sales, it is said at Section 758:

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

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

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

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

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

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

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

“Q. After the 19th day of February, 1.910, after the Davis Laundry Co. people left, from whom did you get your pay, after that time for your services at the laundry?”

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

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

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

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

Objection was sustained to this.

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

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

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

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

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

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


source: Caselaw Access Project

license: Public Domain

text:
    CONSTRUCTION OF DEED WITH REFERENCE TO IDENTITY OF LAND.
    Circuit Court of Cuyahoga County.
    The Cleveland Co-Operative Stove Company v. The Cleveland & Pittsburgh Railroad Company.
    Decided, December 16, 1912.

      Deeds — How Construed — Identity of Land Sought to be Described is a Question for a Jury — I-Iow Title Acquired by Adverse Possession.

    1. A deed should be construed according to the intention of the parties, and if its language is clear and unambiguous and does not require construction, the court will look only to the deed to ascertain the intention of the parties; but in case of doubt, the court may and should consider not only the language, but also the circumstances surrounding the transaction and the situation of the parties.
    2. Where, in an action of ejectment from a strip of land ten feet wide adjoining a railroad right-of-way, it appears that the owners of a parcel of land, which was subject to a forty foot right-of-way allotted it, but the plat filed with the county recorder, through an error, described the right-of-way as sixty feet instead of forty, while deeds for lots sold recited that all lots are situated on the west line of the railroad right-of-way, the question of whether or not the grantors intended to include the ten feet when they deeded the lots is one for the jury.
    3. Where one remains in actual, visible, exclusive, hostile and continuous possession of land for a period of twenty-one years, he thereby acquires title to the land.

      Henderson, Quail & Siddall, for plaintiff in error.

      Squire, Sanders & Dempsey, contra.
    Meals, J.; Winch, J.; and Marvin, J., concur.
    This is an action by the Cleveland & Pittsburgh Railroad Company against the Cleveland Co-Operative Stove Company, to recover the possession of a ten foot strip of land abutting upon and parallelling its right-of-way on the westerly side thereof at or near its intersection with Central avenue, in this city.
   In 1852 the railroad company owned a tract of land, including the strip in dispute, consisting of 8.78 acres. On February 23, 1852, it conveyed the entire tract to William Y. Craw, save and except a forty foot strip on the easterly side thereof, which it reserved as a right-of-way.

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

The certificate attached to the plat contained the following /language:

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

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

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

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

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

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

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

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

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

This was the situation in the case of The Cleveland & Pittsburgh Railroad Company v. The National Safe & Lock Company, decided by this court in December, 1910, and from which this case is readily, distinguishable.

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

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

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

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

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

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

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

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

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

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

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

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

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

In Beardsley v. Nashville, 64 Ark., 243, it is said:

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

In Snook v. Wingifeld, 52 W. Va., 446, the court quoted approvingly from Jones on Real Property, Section 339:

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

Again, in the same opinion, the court say:

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

In Sharp v. Thompson, 100 Ill., 467, it is said:

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

In Park Commissioners v. Taylor, 133 Ia., 453, it is said:

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

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

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

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

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

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

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

In Yetzer v. Thomen, 17 O. S., 130, the court said:

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

Later in the opinion the court further said:

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

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

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

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

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

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


text:
    STATUS OF AN ADDITIONAL ASSESSMENT TO COMPLETE ' A STREET IMPROVEMENT.
    Circuit Court of Cuyahoga County.
    Anna M. Stuart v. The Village of Lakewood et al.
    Decided, December 30, 1912.

      Statutes — When in Effect — Special Assessments — Additional Assessment Governed by Same Law as Original Assessment.

    1. Where an act providing a new form of government for municipalities provided that, for the purpose of carrying into effect the powers and duties conferred and imposed upon present councils, the act should take effect at a certain date and for all other purposes, including the repeal of existing laws, at a later date, the powers and duties referred to are new powers and duties conferred and imposed by the act and not new methods or a different manner of exercising powers and duties previously conferred: hence a special assessment, levied after the first mentioned date and before the last mentioned date, will be enjoined to the extent that it exceeds the limit allowed for such assessments by the pre-existing laws.

      2. An additional • assessment, levied under Section 2300, Revised Statutes, to complete an improvement lor which the original assessment proved insufficient, is an incident of the original assessment and governed by the law in force when the improvement proceedings were begun.

      Thompson, Hine & Flory, for plaintiff in error.

      T. J. Ross and J. A. Cline, contra.
    Winch, J.; Marvin, J., and Meals, J., concur.
    This action was brought to enjoin the collection of certain special assessments levied upon the premises of plaintiff, located in tlie village, now city of Lakewood, and was tried upon an agreed statement of facts.
   Plaintiff’s petition contains five causes of action and the trial court found against the plaintiff upon all of them.

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

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

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

If the act of 1902 does not apply, then part of this assessment is illegal, because it exceeds, by $175.49, twenty-five per cent, of the actual value of the premises, as provided by Section 2264» of Bates’ Revised Statutes, 1902, which was in force until the act of 1902 took effect. Toledo v. Marlow, 28 C. C., 298; affirmed without report, 75 O. S., 574.

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

Section 231 of the act of 1902 provides:

“For the purpose of carrying into effect the powers and duties conferred and imposed upon present councils, boards of legislation, or other legislative bodies, by the provisions of .this act, and for the purpose of conducting the first election to be held in every municipality hereunder, and of preparing for the change in the organization of municipalities herein provided for, this act shall take effect from and after the fifteenth day of November, 1902; and for all other purposes this act, and every portion of the same, including the repeal of existing laws, shall take effect on the first Monday in Miay, 1903, and the following sections of the Revised Statutes of Ohio are hereby repealed.”

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

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

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

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

The municipality claims the right to make this assessment um tier Section 2300 of the Revised Statutes, which was specifically retained in full force and effect by Section 94 of the act of 1902. Said Section 23Ó0 reads as follows:

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

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

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

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

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


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    CONVEYANCE OF LAND HELD TO HAVE BEEN A MERE SECURITY FOR. A LOAN.
    Court of Appeals for Hamilton County.
    Otto Krippendorf v. Helen M. Ormsby ; three cases.
    Decided, July 19, 1915.

      Embarrassed Owner of Land — Desiring to Free it from Liens Executes a Deed which is Held to Have been a Mortgage — Trust Relation Between Attorney and Client — Action for Recovery of Land an Action in Equity.

    1. A suit to construe and enforce a contract, with, an accounting thereunder, a reconveyance of land and general relief, is an action in equity, triable to the court and not to a jury, and the reference of such a ease to a master commissioner is within the discretion of the court.
    2. Where it appears that the whole purpose of a contract for the conveyance of land was to raise money for the relief of the owner, with a provision that upon its repayment there should be a conveyance back, the contract will be treated as security for the loan and the deed of conveyance as a mortgage; and where the petition sets out the salient terms of the contract, and in effect states that it is one for a redemption although in terms it asks for a reconveyance of the land, and the trust relation of attorney and client also appears, a court will not hesitate to decree a reconveyance of the land.

      J. M. Dawson, for Erippendorf.

      J. C. Martin and Wm. M. Fridman, for Helen M. Ormsby.

      Young & Young, for Geo. S. Ormsby.
    Jones (Oliver B.), J.; Jones (E. H.), J., and Gorman, J., concur.
    Three proceedings in error have been brought in this court, .growing out of an action in the Supérior Court of Cincinnati in which the defendant in error was plaintiff, and the plaintiff in error was defendant, and in which plaintiff sought to require the defendant to reeonvey to her certain, real estate which she had conveyed to him under a certain contract in accordance with the terms of which he was to advance certain money and out of it to pay certain liens upon said real estate, and to hold and rent same and out of the income pay taxes, make repairs and improvements, and at the end of three years, upon repayment to him of the amount advanced, to reconvey said real estate to her.
   The University of Wooster was made party defendant and filed a cross-petition setting up a mortgage made by the defendant below to it to secure a loan of $5,000 upon lot 49, which was the improved portion of said real estate, and a judgment was afterwards entered on said cross-petition finding the amount due under said mortgage and ordering the foreclosure of same and sale of the premises covered by the mortgage on the failure to pay the amount so found due.

The case proceeded as between the original plaintiff and defendant, and was heard upon her second amended petition, the answer of defendant thereto, and the reply to said answer. Upon said heai’ing the court decided in favor of the plaintiff and found upon the evidence that the allegations of her second amended petition were true, and that she was entitled to have the contract performed by the defendant and its provisions enforced against him, and that she was entitled to have a reconveyance of all the property mentioned in said contract, and, excepting the mortgage to the University of Wooster, free from all encumbrances, upon the payment by her of such sums with interest as had been advanced by defendant upon her account under said contract; and for the purpose of stating an account showing the amount so due from plaintiff to defendant the court appointed Murray M. Shoemaker as a master, commissioner with all the power of a referee, to take such an account and to ascertain and report to the court the amount so due to the defendant.

The first proceeding in error, No. 304, seeks to set aside this judgment as being erroneous and invalid, and questions the power of the court to appoint a master commissioner as therein provided.

The cause is one in equity, being a suit to construe and enforce a contract and for an accounting thereunder, for a decree for the re-conveyance of land and for general relief. These are all matters triable to a court and not to a-jury, and come'within the provisions of Section 11490, General Code. Under this section reference to a master commissioner is discretionary with the court, and in this ease the court has in no way abused its discretion.

The second proceeding in error, No. 461, was brought for the purpose of reviewing the final judgment and decree of the superior court which was entered in said case upon the report and finding of the master commissioner and referee appointed therein and which fixed the amount ordered paid by the plaintiff to the defendant in full satisfaction of all amounts advanced and paid by him under said contract, and provided that upon such payment by the plaintiff said defendant should reconvey all of said real estate free and clear of all incumbrances.

Tn this proceeding in error a complete bill of exceptions was filed, but the original pleadings and papers having been filed in the first case, No. 304, were not refiled herein but only such papers as had been filed in the lower court subsequent to the original proceedings in error. And the transcript of the docket a]id journal entries in the lower court filed in this second case included only those subsequent to Feb. 2, 1914 — being a continuation of the transcript filed in case No. 304. As each of these proceedings in error is technically distinct from the other, there might be a question as to the power of the court to consider one case as merely a supplement of the other, but as the main question involved is the same in both cases, they will be treated together and considered as one.

The third proceeding in error, No. 577, involves the right of a judgment debtor in a foreclosure suit to insist upon, a sale under decree of foreclosure and order of sale, contrary to the wishes and right of the judgment creditor who is the owner of said judgment and mortgage.

A decree in foreclosure was taken upon the cross-petition of the University of Wooster under its mortgage made to Otto Krippendorf upon Lot 49, part of the real estate involved in said contract, and an order for sale had been issued upon the precipe of the attorneys for the University of Wooster and the property was advertised thereunder for .sale by the sheriff, whereupon George S. Ormsby, the father of Helen M. Ormsby, for her protection and assistance purchased from the University of Wooster all its interests under said mortgage and judgment and recalled said order for sale. Afterwards, Otto Krippendorf, the judgment debtor in said decree of foreclosure, without authority from or notice to said George S. Ormsby or the University of Wooster, filed a precipe for a second order of sale, which was issued by the clerk, and sale was advertised thereunder by the sheriff. Upon motion George S. Ormsby was made party defendant, and he made application to the court for an order to set aside and recall the second order of sale which had been issued at the instance of said defendant Otto Krippendorf; which motion upon hearing the court granted, and made an order setting aside and recalling said second order of sale. Said defendant Otto Krippendorf also moved the court to require said George S. Ormsby to give security for costs, he being a nonresident of Hamilton county, Ohio. This motion was denied by the court on the ground that it appeared to the court that Ormsby was the owner of the mortgage and judgment interest in said real estate, which afforded ample security for costs. To this order the defendant Krippendorf also excepted.

The third proceeding in error was brought to secure a reversal of these two orders. In the opinion of this court the action of the court below upon both of said motions was both proper and legal. But neither of said orders is a final order which can be reviewed by proceedings in error by this court, and the petition in error in ease No. 577 will therefore be dismissed at the costs of plaintiff in error.

The main question in the first and second proceedings in error is as to the correctness of the judgment below finding the equities in favor of the plaintiff.

The evidence shows that Mrs. Ormsby being the owner of a handsome dwelling on the lot known as No. 49 of the Foote Subdivision, was in embarrassed circumstances, a decree of foreclosure having been taken upon the mortgage on said property by the University of Wooster, and it was about to be sold to satisfy the judgment of such foreclosure; that other judgments had been taken against her for money; and the taxes on said property were unpaid. When in search of assistance towards the raising of money necessary to adjust her financial difficulties she met Otto Krippendorf, who is an attorney at law and who agreed to act for her as such and to advance money necessary to prevent the sacrifice of her home. To effect this purpose it was agreed that Krippendorf would raise money to the amount of $7,500; that a conveyance of said Lot No. 49, together with three other lots, would be made to him by Mrs. Ormsby; and that out of the $7,500 he was to'pay all tax claims on lot 49, the court costs and judgment in said foreclosure ease brought by the University of Wooster, and certain improvements to the premises on lot 49; and the form of contract to this effect was drawn by said Krippendorf and executed by Mrs. Ormsby and Krippendorf in the presence of two witnesses, and duly acknowledged by both of them before a notary public.

It appears from the evidence that by virtue of this contract, and a deed made at the same time as a part of the same transaction by Mrs. Ormsby to Mr. Krippendorf, her title in said four lots was vested in Krippendorf who was then acting as her attorney and trustee under the terms of said contract. The sheriff’s sale in the foreclosure ease of the Trustees of the University of Wooster was confirmed and a deed was executed by the sheriff conveying lot 49 to the Trustees of the University of Wooster, -who, carrying out an arrangement previously made with IMi’s. Ormsby, received at the hands of Krippendorf sufficient money to pay the court costs and tax claim and to reduce their indebtedness from Mrs. Ormsby down to $5,000 for which Krippendorf executed a mortgage to them upon said lot 49.

By the terms of said contract Krippendorf agreed to reeonvey to Mrs. Ormsby, upon the termination of said term of three years, to-wit, on the 6th day of May, 1912, the same interest in said four lots provided she pay to him in gold coin the principal sum of $5,000 and interest and $2,500 and interest, together with all incidental sums by way of taxes, assessments, interest on mortgages, charges for improvements or otherwise, and interest at 6 % per annum from the date of maturity. The contract further gave to Mrs. Ormsby during its existence a right to accelerate a reconveyance of said property providing she assume and take subject to the mortgage of $5,000 and all ether claims and demands growing out of the contract.

A careful consideration of this contract in connection with the evidence given shows that its whole purpose, and the purpose of the conveyance made by Mrs. Ormsby to Krippendorf, was simply to furnish the means for securing money, which he agreed to raise and advance on her account. In other words, this so-called contract was in fact a mortgage. The conveyance was undoubtedly made to him by her and at her request by the Trustees of the University of Wooster, for the purpose of vesting title in him as her trustee for her benefit, and at the same time to secure him in the repayment of any money necessary to be advanced by him. Although the contract is drawn in an involved and extremely vague way, it shows evidence of having been prepared either by a lawyer who was without sufficient experience to clearly state what was intended to bé contained in it, provisions to furnish proper security for himself in advancing funds and at the same time protect the rights of his client who was to be the beneficiary of such advancement — or else it was the product of a crafty and unscrupulous lawyer, who, seeking to take advantage of a confiding client ignorant of such documents, at the end of her resources and eager to find a way out of her financial difficulties, created a document under which he might, if occasion arose, claim to be the absolute owner of the property and hold her to the exact time fixed for reconveyance under the strict letter of the contract in the manner of an historical Shylock.

The fact that Krippendorf failed in any way to report his expenditures to Mrs. Ormsby or to furnish to her an account of the amount of his advancements under the contract, and that he failed to keep the property rented or in repair, and the further fact that the value of the property has largely appreciated, taken in connection with his testimony as given in this case, places him in anything but a favorable attitude before the court. He had hardly signed the contract under which he appeared as the friend and benefactor of Mrs. Ormsby until he laid plans to repudiate it, and his testimony indicates a constant effort on his part to retain for himself the property which he obtained a,s a trustee for a client, and, failing to hold it, to require her to pay the largest sum possible to him in excess of all advancements and interest.

There is no question but that this contract was drawn as a security for a loan or advancement to be made by Krippendorf on behalf of Mrs. Ormsby and, under the doctrine of the ease of Wilson v. Giddings, 28 O. S., 554, it must be held to be a mortgage. As was stated in the opinion of the court in that case, at page 565:

"There is no principle in equity more firmly settled on authority than that every contract for the security of debt, by the conveyance of real estate, is a mortgage, and that all agreements of parties tending to alter, in any subsequent agreement, the original nature of the mortgage, is of no effect. * * *
"The rule is general that where a contract and conveyance are made upon a negotiation for a loan of money, a court of equity will always construe the conveyance to be a mortgage, whatever may be the form of the contract. * * *
"Whatever form the transaction assumes; whatever covenant there may be in the conveyance, or in an agreement accompanying it, if it was founded upon a loan of money, and intended by the parties to be a mortgage, courts of equity will always so construe it.”

It is not necessary to multiply authorities to sustain the principle that once a mortgage is always a mortgage.

Nor is it necessary to cite cases that a party occupying a trust relation can not take advantage of his position.

Counsel for plaintiff in error concedes both of these propositions, but he relies upon a criticism of the pleadings and insists that a technical meaning be placed upon them. It is true that 1he petition does not in terms declare the so-called "contract” to be a "mortgage,” but it does set out the salient terms of the contract, and does in effect state a cause of action for a redemption of a mortgage although in terms it asks for a reconveyance of real estate under the terms of the contract, praying for specific performance, and at the same time praying for general relief.

It is true that the petition does not set out the relation of attorney as existing between Mr. Krippendorf and Mrs. Ormsby, but it does set out enough of the terms of the contract to show that he held this real estate as her trustee with an obligation to reconvey to her.

It is also true that the reply undertakes improperly to set out this relation of attorney and client as between these parties. Such an allegation in the reply can not be considered as enlarging the ease of the plaintiff as made by the petition. Hilsinger v. Trickett, 86 O. S., 297.

But as stated above, the trust relation sufficiently appears from the allegations of the second amended petition.

The action being in equity and the prayer for relief being a general one, the court has jurisdiction to grant relief warranted by the facts as proven. 195 U. S., 427; 143 Fed., 22; 208 Fed., 295; 210 Fed., 696; 16 Cyc., 106 C.

The defendant below contends that under a strict construe-' tion of the contract upon which he relies Mrs. Ormsby failed to perform her obligations to convey to him, as provided by paragraph 8, said real estate, free and clear of all claims, demands and incumbrances. From the fact that he drew the quit-claim deed, which she executed, at the same time as the contract and that he did not ask for any other deed or further conveyance from her, it must be held that the quit-claim deed then executed by her was substituted in place of the deed referred to in paragraph 8. It is natural to believe that, in her harassed and helpless condition she relied upon him to free her property from its incumbrances, aud clearly did not intend to obligate herself to first free it from incumbrances for the privilege of conveying it to him in order that he might hold the title entirely free except for the mortgage to be placed on it by him for $5,000 to the University of Wooster.

The construction of the contract claimed by .the defendant is contrary to the evidence and contrary to. its own terms. The unreliable and contradictory statements given by the defendant in his testimony with regard to the $2,000 consideration named in the deed from Mrs. Ormsby to himself lead us to give doubtful credence to his testimony, and to feel that' he will be amply repaid in the amount found by the court below to be due him for advancements.

In this amount was included a $500 attorney fee, as fixed by paragraph 5 of the contract. It should be observed that nowhere in the contract does Mrs. Ormsby agree to pay this fee, nor is it in any way made a charge upon said real estate or considered as one of the advancements to be made by Krippenlorf mider the contract. The evidence shows that his fee was only for services rendered in connection with this real estate and the making and performance of this contract. -It is extremely doubtful whether, under all the circumstances of the case, such an allowance should be made, but as no objection was made by plaintiff below to its allowance and as there is no cross-petition in error in this case on behalf of Mrs. Ormsby, we have concluded not to disturb the finding as made by the master commissioner and confirmed by the trial court.

A careful consideration of the numerous points of error relied upon by plaintiff in error convinces us that there is no prejudicial error shown by the record as against him, but that substantial justice has been done.

The judgment below is therefore affirmed.


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    AS TO'WAIVER OF A CONDITION PRECEDENT UNDER A POLICY OF FIRE INSURANCE.
    Court of Appeals for Highland County.
    Abraham Weil and Isaac Weil, Partners, v. The Connecticut Fire Insurance Company of Hartford, Conn.
    Decided, December 30, 1914.

      Fire Insurance — Non-Performance of a Condition Precedent as to Appraisal — Intention to Rely on a Legal Excuse Must be Pleaded — Insured Can Not Rest on the Silence of the Insurer with Reference to a Proposal to Arbitrate — Waiver—Estoppel.
    1. A plaintiff who intends, in an action on a policy of fire insurance, to rely on a legal excuse for non-performance of a condition of the policy, should plead such excuse in the first instance.

      2. Where an insurance company by letter informs a policy holder who has suffered loss by fire that it disagrees with him as to the amount of goods destroyed and also as to the value of the goods which were destroyed, there is a sufficient disagreement to require the plaintiff to comply with the contractual provision in the policy regarding appraisal; and it is not the law of Ohio that the company must first make a bona fide investigation of the loss sustained and make a definite ascertainment of the amount and submit the same to the insured.
    3. A telephone conversation between the insured and an adjuster for the company, in which the insured told the adjuster they would each pick an man “and the two pick a third, or settle the matter in any way at all,” to which proposition the adjuster made no reply, does not constitute an estoppel against the company or a waiver of its right to insist upon the provisions of the contract with reference to an appraisal.

      J. L. Kohl and D. Q. Morrow, for plaintiffs in error.

      J. W. Mooney, B. M. Edwards and Smith <& Morrow, contra.
    Jones, J.; Walters, J., and Sayre, J., concur.
    This ease is here on error from the Court of Common Pleas of Highland County, Ohio.
   In the lower court the plaintiffs in error filed a petition, seeking damages for the loss by fire upon an insurance policy. The policy was one of the standard forms, and was attached to the petition.

The petition contained an allegation,

“That said plaintiffs have duly performed all the conditions on their part to be performed,” etc.

The insurance company filed its answer, containing five defenses.

It is not necessary to allude to these various defenses, except to say that the first defense, with the exception of some admissions therein contained, was in effect a general denial of the allegations in the petition.

The real question involved in this case arises upon the allegations of the third defense. That defense contains a number of the provisions contained in the policy of insurance sued on, ■ among which are the following:

“In the event of disagreement as to the amount of loss the same shall, as above provided, be ascertained by two competent and disinterested appraisers, the insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire; the appraisers together shall then estimate and appraise the loss, stating separately sound value and damage, and, failing to agree, shall submit their differences to the umpire.”

The following provision was also contained in the third defense :

“No suit or action on this policy, for the recovery of any claim, shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements. ’ ’

A reply was filed. Upon the pleadings the cause went to the court and jury. At the conclusion of the entire evidence the defendant moved the court for a directed verdict, which, upon due consideration, the trial court sustained and directed the jury to return a verdict for the defendant.

I. The error relied upon in this court is: that the court below erred in directing the jury to return a verdict for the defendant.

It is conceded by counsel in argument and it is also evident from the record, that the action of the trial court was based upon the fact that the evidence adduced upon the trial failed to show a compliance upon the part of the plaintiffs below with the provisions relating to the procurement of an appraisement of the property, as set forth in the third defense of defendant’s answer.

It appears from the record that on September 5, 1912, nearly two months after the loss by fire occurred, the insurer wrote a letter to plaintiffs in error, acknowledging the receipt of the proofs of loss. That letter contained the following statement:

“Beg to advise that we can not accept the above mentioned document as a satisfactory proof of loss for the reason that the terms and conditions of the policy have not been complied with by yourself.
“That we disagree with you as to the amount of wool alleged to have been destroyed, in pounds and value per pound and as a whole, and as to the amount of loss claimed thereon.
“Therefore, we advise you that for the reasons set forth above and others not herein set forth, we reject said document as not satisfactory proof of loss to this company. ” * * *

It has been held by the courts of this state that the provisions thus contained in the third defense of defendant’s answer constitute a condition precedent, imposing an obligation upon the insured, in the event of disagreement as to the amount of loss, to procure an award or ascertainment by appraisement, or io show legal excuse therefor, before he can maintain an action upon the policy. Graham v. Ins. Co., 75 O. S., 375; Ins. Co. v. Carnahan, 63 O. S., 258.

It was incumbent upon the plaintiffs in this case, under the allegations of their petition, to show affirmatively that they had performed this condition contained -in the policy. If they had intended to rely upon a legal excuse for its non-performance they should have pleaded such excuse in the petition in the first instance. This they did not do. At the close of the trial, when the court was asked to direct a verdict for the defendant, the plaintiffs asked permission to amend their reply, which permission the court granted. This amendment to the reply; made at the close of the case, contained an allegation that:

“Said plaintiffs offered to bring about and made every effort on their part to secure an appraisement, adjustment, award and ascertainment of said loss as provided for by said policy, but said defendant refused to confer with said plaintiffs as to said appraisement, adjustment, award or ascertainment, and by their refusal' prevented, any appraisement, adjustment, award or ascertainment of said loss.”

It is urged by counsel for plaintiffs in error that there was no disagreement as to the amount of loss shown by this record which would become a predicate for the demand for appraisal and award.

This disagreement is evidenced by plaintiff’s exhibit No. 12 and is contained in the letter of September 5, 1912, above referred to.

It is urged by counsel for plaintiffs in error that good faith required that the insurer, itself, should have made an investigation, and upon the facts thus revealed it should have ascertained a fixed or definite sum upon which a disagreement could arise.

The letter of September 5, 1912, shows that the insurer disagreed with the insured “as to the amount of wool alleged to have been destroyed, in pounds and value per pound and as a whole, and as to the amount of loss claimed thereon. ’ ’ Prior to this letter the insured had submitted to the insurer their proof of loss.

We are of the opinion that this was a sufficient disagreement upon the part of the insurer as to require the plaintiffs in error to comply with the contractual provision in their policy relating-to the appraisal.

While there are some authorities holding otherwise and which would seem to require the insurer, itself, to make a bona fide investigation of the loss and a definite ascertainment of the amount and submit such to the insured, we are of the opinion that this is not the law of Ohio. Upon this point we think that the following cases are decisive: Everett Co. v. Ins. Co., 9 N.P. (N.S.), 241; Ins. Co. v. Carnahan, 63 O. S., 259.

In neither of these cases does it appear that a definite ascertainment of any sort was made by the insurer and submitted to the insured.

The ease of Everett Co. v. Insurance Co., supra, which was later affirmed by the Supreme Court of Ohio without report, upon this subject is very similar to the case at bar. In that case the disagreement arose over the amount claimed in the -proofs of loss, and it does not appear that any other sum was submitted to the insurance company to the insured as a basis for agreement.

In view of these authorities, therefore, we conclude that there was such a disagreement as to the amount of loss which required the insured to act under the provisions of the policy relating to appraisal, which was a condition precedent to their bringing a suit for the loss sustained.

II. The most serious question involved in this case, however, arises on the allegations of the amended reply and the evidence disclosed in the record in relation thereto.

In this connection the contention of the plaintiffs below is, that upon the pleadings, as amended, the insured had shown a legal excuse for non-compliance with the provisions relating to appraisal.

Some question was made by counsel for defendant in error as to the right of the court to permit the amended reply to be filed at the close of the case. But in view of the fact that the parties, upon the trial, tried the issue that was raised by the amended reply, and in view of the further fact that the record does not disclose that the defendant below was taken by surprise, we think that there was no abuse of discretion upon the part of the trial court, under the statute permitting amendments to be made at any stage of an action, in permitting the amended reply to be filed at that time. We, however, think that the matters con tained in the amended reply should have been properly included in the petition, as they tended to show a legal excuse for non-compliance with one of the provisions of the policy, and the burden of showing the allegation therein contained remained throughout the entire case upon the plaintiffs below.

The evidence, if any, tending to justify the action of the insured in not complying with the provisions of the policy is contained on pages 26-7 of the record. Abram Weil, one of the plaintiffs, after testifying with relation to a non-waiver which had become the subject of dispute between the parties, testified that he went to the Chittenden Hotel, at Columbus, and called up Mr. Parsons, the adjuster of the insurance company, and found that he was at home sick. The only portion of Mr. Weil’s testimony relating to this question of the adjustment and ascertainment of the loss is found in the following questions and answer :

' ‘ Q. What did you say to him about arbitration of it by anyone, or ascertainment of loss?
“(Objected to.)
“ Q. I asked you as to -what you said ? A. I told Mr. Parsons over the phone if he had anybody in Columbus, he could pick a man and we pick one, and the two pick a third, or settle the thing any way at all.”

The record does not disclose affirmatively that Mr. Parsons made any answer to the statement of the witness, and does not disclose affirmatively that any reply whatever was made, and it only inferentially appears that Mr. Parsons may have heard the statement of Mr. Weil.

It was incumbent on the plaintiffs below to show that they had complied with the condition precedent in the policy above referred to, or to furnish some legal excuse, under the authority cited, as to why they had not complied with the same. In order to recover on this theory it was necessary to show that the defendant had, by its conduct or otherwise, done something which was tantamount to a waiver of this contractual provision in the policy.

The statement of Mr. Weil, above referred to, only shows that he stated to the adjuster over the phone that he could pick a man and the insured would pick one, and the two pick a third, and that they would settle it any way at all. There was no reply upon the part of Mr. Parsons. So far as this evidence discloses, his silence may have been an acquiescence in the proposition of Mr. Weil; in which event it would be necessary for Mr. Weil to proceed under the- provisions of the policy and demand an appraisal and name an appraiser. There was nothing said or done by Mr. Parsons which is equivalent either to an estoppel or a w'aiver.

As was said by Davis, J., in List & Sons Co. v. Chase, 80 O. S., 49:

“A -waiver is a voluntary relinquishment of a known jfight. It may be made by express words or by conduct which renders impossible a performance by the other party, or which seems to dispense -with complete performance at a time when the obligor might fully perform. Mere silence will not amount to waiver where one is not bound to speak.”

And in Insurance Co. v. Carnahan, supra, the same judge says:

“The insured can not rest upon the silence of the insurer as to arbitration, when a difference arises as to the amount of the loss. It was therefore incumbent on the insured, not the insurer, to perform this condition as a condition precedent to his right of recovery, whenever a difference should arise, as to the amount of the loss whether a demand was made by the insurer or not.”

Applying these rules in this case we see nothing done or said upon the part of the insurance company, or its adjuster, that would preclude its right from relying upon the provisions of its contract. Mere silence will not constitute such an estoppel or waiver as would deny it the right to insist upon its compliance.

If Mr. Weil made the statement he claims to have made over the telephone to MJr. Parsons and Mr. Parsons made no reply thereto, Mr. Weil could have as well taken his silence to mean his acquiescence with the statement that he would procure an appraiser, and thus rely upon carrying out the stipulations of the contract between them.

We are, therefore, inclined to the opinion that, in view of the facts disclosed by this record, the plaintiff below did not furnish sufficient proof to obviate the necessity of complying with the provisions of the policy and that the court did not err in directing a verdict for the defendant below.

The judgment of the lower court is affirmed.


author: Kunkle, J.

text:
    DIVISION OF THE COST OF CONSTRUCTING A HIGHWAY CROSSING OVER. A RAILWAY.
    Court of Appeals for Hamilton County.
    City of Cincinnati v. The Cincinnati, Lebanon & Northern Railway Company and The Pittsburgh, Cincinnati, Chicago & St. Louis Railway Company ; two cases.
    Decided, July 19, 1915.

      Grossings Over Railway Tracies — Provision Dividing the Expense Between the Railway and Municipality Construed — Notice and Searing Not Required — Sections 8895 io. 1902.
    1. Section 3 of tlie act approved May 3d, 1904, charging railroad companies with one-half the cost of constructing a highway across an existing railroad, is not rendered unconstitutional by the failure to provide for a notice and hearing in respect thereto.
    2. Where a railway over which it is sought to carry a highway otherwise than at grade has passed under the control of another company which has acquired its privileges and assumed its liabilities and duties, the one-half of the cost of obviating such grade eross'ing which the law imposes on the railway becomes a liability of both companies.

      Walter M. Schoenle and Carl M. Jacobs, Jr., City Solicitors, for plaintiff in error.

      Lawrence Maxwell and J os. S. Graydon, contra.
   Kunkle, J.

The petition in ease No. 5742 states in brief that plaintiff is a municipal corporation, organized under the laws of Ohio; that the the council of said city has authorized the bringing of this suit; that defendants at all the times mentioned in the petition were and now are corporations, organized under the laws of Ohio for the purpose of owning, maintaining and operating railroads ; that subsequent to the 3d day of May, 1904, the date of the passage of the act, “To provide how railroad and highway crossings may be constructed,” the plaintiff built the highway known as ’Whittier street, across a certain railroad which had existed theretofore and is still in existence; that said railroad did at all times herein mentioned, and does now, belong to the defendant, the Cincinnati, Lebanon & Northern Railway Company ; that prior to the building of said highway, the defendants entered into a contract whereby the defendant, the Pittsburgh, Cincinnati, Chicago & St. Louis Railway Company secured entire control of the privileges, tracks and property, and assumed all the debts, liabilities and duties of the defendant, the Cincinnati, Lebanon & Northern Railway Company; that under the existing conditions, and because of the topography of the highway, railroad and surroundings, it was impossible to construct the said highway below the grade of the said railroad, and the said highway was, therefore, constructed above the grade of the said railroad and was carried over the said railroad by means of a re-enforced concrete bridge or viaduct.

The petition also contains an itemized statement showing that the total cost of the said bridge was $6,438.50, and states that the said bridge was fully built and paid for in October of 1910, and that no part of the cost thereof has been paid plaintiff by defendants or either of them, although demand has been made therefor, and asks judgment against the defendants in the sum of $3,219.25, with interest.

A demurrer was filed to the petition.

Error is prosecuted to this court from the judgment of the lower court sustaining such demurrer.

Plaintiff in error claims that the petition states a cause of action under Section 3 of the act approved May 3, 1904 (97 O. L., 546, General Code, Sections 8895-8902).

The title of said act is as follows:

“An act to provide how railroad and highway crossings may be constructed.”

Sections 1 and 3 of said act read as follows:

“Section 1. Except as in this act elsewhere provided, all crossings, hereafter constructed, whether of highways by railroads, or of railroads by highways, shall be above or below the grade thereof:”
“Section 3. Every municipality or other authority hereafter constructing a highway across an existing railroad, shall construct tbe same above or below the grade thereof, unless permitted in the manner hereinafter provided, to construct the same at grade, and the cost of said work shall be paid, one-half by said municipality, and one-half by the railroad company owning said railroad. ’ ’

Defendants in error in brief claim that the statute in question, if properly construed, requires a condemnation proceeding, or, if such proceeding is not required, then the statute is in contravention of the Fourteenth Amendment of the Constitution of the United States, and of Sections 1, 16 and 19, Article I, of the Constitution of Ohio.

We have carefully considered the very exhaustive briefs which have been filed by counsel in support of their respective contentions, but shall not attempt to discuss or review in detail the various authorities therein cited.

From a careful reading of this act, we have reached the conclusion that the provisions of Section 4 apply only to a case where a grade crossing is sought to be established, and do not apply to crossings which are not constructed at grade.

We find no statute providing for notice and a hearing in respect to the construction of a crossing such as the one in question.

This brings us to a consideration of the constitutionality of Section 3 of the act in question.

The authority of the Legislature to enact Section 3 under the police powers possessed by the state, is not seriously disputed by defendants in error, but they contend that the Legislature should have provided for a notice and hearing in respect to the improvement before the obligation provided in Section 3 can become effective.

The case of Railway Company v. City of Troy. 68 Ohio State, page 510, is relied upon by counsel for defendants in error. We think this cáse is distinguishable from the case at bar. In the Troy case there was no statute imposing liability.

The last sentence of the decision of the Supreme Court, in such case, is as follows: .. character, we have no occasion to consider whether it would be a proper subject of its exercise.”

“Since the legislative department of the state has not attempted to exercise the supposed police power in a case of this

In the case at bar the obligation is expressly imposed by statute.

The question as to whether such a statute, in addition to imposing a liability, should also provide for notice and a hearing, has not been expréssly determined by the Supreme Court of this state.

We find, upon an examination, that the decisions in other states are in conflict, but we think the weight of authority sustains the view that such notice and hearing are not required and that statutes imposing a liability such as that contained in Section 3 of the act in question, are constitutional and valid.

We call attention particularly to the following authorities, wherein this question is discussed, namely:

In the case of State, ex rel City of Minneapolis, v. St. Paul, Minneapolis & Manitoba Railway Company, reported in the 98th Minnesota Reports at page 380, the first three paragraphs of the syllabus are as follows:

“The state may, in the exercise of its police power, impose up.on railroad companies whose lines intersect public highways laid out after the construction of the railroad, the uncompensated duty of constructing and'maintaining at such crossings all such safety devices as are reasonably necessary for the protection of the traveling public.
“Such a requirement, being referable to the police power, is not a taking of private property for public use in violation of the Constitution.
“A bridge over the railroad tracks, when necessary to make the crossing safe for public use, is a ‘safety device,’ within the meaning of that expression. ’ ’

This decision, is affirmed by the Supreme Court of the United States, in the 214 U. S. Reports at page 497.

See also ease of State, ex rel City of Duluth, v. Northern Pacific Railway Company, 98 Minnesota Reports, page 429, and which case was affirmed by the United States Supreme Court, in the U. S. Reports, Volume 208, page 583.

In the case of Missouri Pacific Railway Company v. City of Omaha, reported in the 235 U. S. Reports, at page 121, the first three paragraphs of the syllabus are as follows:

“A railway company may be required by the state, or by a municipality acting under the authority of the state, to construct overhead crossings or viaducts over its tracks at its own expense; the consequent expense is damnum absque injuria or compensated by the public benefit in which the company shares and is not a taking of property without due process of law.
“In the exercising of the police power, the means to be employed to promote the public safety are primarily in the judgment of the Legislature, and the court will not interfere with duly enacted legislation which has a substantial relation to the purpose to be accomplished and does not arbitrarily interfere with private rights.
“If the state court has held that a municipality has power to pass ordinances requiring railway companies to build viaducts, this court can only declare such an ordinance unconstitutional under the Fourteenth Amendment as an arbitrary abuse of power in a clear and unmistakable case. ’ ’

In the Lawyers’ Reports, Annotated, Volume 28, page 298, there is also found an extended discussion of this question and a review of the authorities.

Counsel for defendants in error, in their brief, also claim that no cause of action is stated against the Pittsburgh, Cincinnati, Chicago &■ St. Louis Railway Company, for the reason that the petition alleges that the said railroad belongs to the Cincinnati, Lebanon & Northern Railway Company.

The petition does contain an averment as suggested by counsel for defendants in error, but it also contains an averment to the effect .that the Pittsburgh, Cincinnati, Chicago & St. Louis Railway Company has, through contract, secured entire control of the privileges, tracks and property, and assumed all the debts, liabilities and duties of the defendant, the Cincinnati, Lebanon & Northern Railway Company.

Under tbe averments of the petition, we think both of the defendants -in error are liable. We think such liability is determined by the decision of our Supreme Court in the case of Baltimore & Ohio Railway Company v. Walker, 45 Ohio State Reports, page 577, the first two paragraphs of the syllabus of which case are as follows:

"A railroad company which has the possession and control of a railroad in this state, and is managing and operating the same, as the lessee thereof, is one ‘owning the tracks’ of such railroad, within the meaning of Section 3333 of the Revised Statutes, which provides that: ‘When the tracks of two railroads cross each other, or in any way connect, at a common grade, the crossings shall be made and kept in repair, and watchmen maintained thereat, at the joint expense of the companies owning the tracks.’
“The necessity for keeping the crossing in repair, and maintaining watchmen thereat, grows out of the use and operation of the railroads crossing each other at a common grade, and the benefits thereof accrue to the companies using and operating the roads and, as such lessee company, while operating its road receives the benefit and security resulting from a safe crossing and the services of the watchman, it takes them subject to the burden of their expense, as provided by the statute. ’ ’

The necessity and reasonableness of the cost o.f the improvements in question are not now before the court, and we express no opinion as to whether the same can be questioned in this proceeding by way of defense.

It therefore follows that the judgment of the lower court should.be reversed and the cause remanded, with instructions to overrule the demurrer, and for such further poceedings as may be authorized by law.

We do not have the papers in case No. 5743 before us, but it is agreed that the averments of the petition in that case are similar to those above quoted, except that the petition in the latter case asks for judgment in the sum of $6,897.85, the one-half of $13,795.71, the cost of the bridge referred to in that case, and the same judgment will be rendered in this case as in case No. 5742.

Judgments reversed.

Ferneding, J., and Allread, J., concur.


text:
    PRIORITY OF A FRANCHISE TAX.
    Court of Appeals for Cuyahoga County.
    Charles R. Morley v. The Cleveland Hippodrome Company et al.
    Decided, March 9, 1914.

      Taxation — Franchise Tax Does Not Lose its Preference — Where It Accrues After Appointment of a Receiver — Section 5506.
    A franchise tax accruing after the appointment of a receiver for a corporation is entitled to preference and should he first paid out of the fund finally realized from a sale hy the receiver of the assets of the corporation.

      Tolies, Hogsett, Ginn & Morley, for plaintiff.

      R. E. Morgan, contra.
    Winch, J.; Meals, J., and Grant, J., concur.
    Appeal from tbe court of common pleas.
   Tbe question in this case is whether a franchise tax accruing after the appointment of a receiver for a corporation is entitled to preference and should be first paid out of the fund finally realized from a sale by the receiver of the assets of the corporation.

The question is answered affirmatively by Section 5506, General Code, which provides:

‘ ‘ The fees, taxes and penalties required to be paid by this act shall be the first and best lien on all property of a public utility or.corporation, whether such property is employed by the public utility or corporation in the prosecution of its business, or is in the* hands of an assignee, trustee or receiver, for the benefit of the creditors and stockholders thereof. ’ ’

It is claimed by the creditors of the corporation in this case, however, that the section quoted intends only that the franchise tax which accrues before the appointment of a receiver shall be a lien upon its property and be first paid out of the assets thereof when the receiver disposes of them. In this connection it is pointed out that as the tax is upon the right of the corporation to exercise its franchise and not upon its property and is computed upon its issued and outstanding capital stock, without reference to whether it has any property, the tax would not be a lien upon the property of the corporation unless made so by the statute quoted, for no other law makes it a lien, and from this premise is deduced the conclusion that the sole purpose of the Legislature in enacting said statute was to create this lien and require it to be recognized by assignees, trustees and receivers who take charge of property upon which the tax has already become a lien, but not to create a lien upon the property in the hands of a receiver not exercising the franchise of the corporation, but only conserving its assets until sale thereof.

In this connection it is suggested that only the corporation can stop the accrual of this franchise tax by taking certain steps and filing certain certificates as provided by law, and that neither the receiver nor the creditors can either require such corporate action or themselves stop the renewal of the tax from year to year. It is said that this failure of the Legislature to authorize the receiver or creditors to stop the annual assessment of the tax upon property sequestered for the benefit of the creditors produces a situation so unjust to them, where litigation over the assets and the priority of liens is involved and protracted, that this injustice requires an interpretation to be given to the statute which obviates such injustice.

Answering the latter suggestion first, it is sufficient to say that this injustice should be pointed out to the Legislature and not to the court. If the statute is clear and unambiguous, its mandate is to be obeyed by the court no matter how unjust the result may seem to the creditors. Taxes are a burden in any form, and those who deal with corporations and extend them credit, do so with full knowledge of the right the Legislature has reserved to burden the property of a corporation with taxes, even after its property has passed into the hands of a receiver appointed for the benefit of its creditors. These remarks assume, of course, that the statute under consideration is clear and unambiguous. Let us see if that is so.

If the contention of counsel for creditors is sound and the sole purpose of the Legislature in enacting the statute was to make the tax a lien upon the corporate property, then the last half of the statute is surplusage and it would have been sufficient to have enacted the first' part alone, to-wit:

“The fees, taxes and penalties required to be paid by this act shall be the first and best lien on all property of a public utility or corporation.”

Being thus made a lien upon the corporate property, when that property afterwards passes into the hands of an assignee, trustee or receiver, it passes subject to that lien as well as to all other liens lawfully’upon the property.

But the Legislature saw fit to say something more and meaning must be given to the additional words, if they mean anything.

Having by other sections required said fees, taxes and penalties to be paid so long as the corporation continues to be a corporation and to have issued and outstanding capital stock, the Legislature first made these fees, taxes and penalties a first and best lien upon all property of the corporation and then, specifying with regard to the corporate property, added: “whether such property is employed by the public utility or corporation in the prosecution of its business, or is in the hands of an assignee, trustee or receiver, for the benefit of the creditors and stockholders thereof. ’ ’

The words “such property,” here used, refer to the words “property of a public utility or corporation,” which appear in the first part of the section.

So the only question .remaining in this case is whether property in the hands of a receiver appointed for the benefit of creditors and stockholders of a corporation, is the property of the corporation or of the receiver, or of the creditors and stockholders for whose benefit the receiver was appointed. In other words: Where is the title to corporate property after a receiver has been appointed and taken charge of the property under the orders of a court?

This precise question has been twice answered by the Supreme Court of Ohio.

In the ease of Lafayette Bank v. Buckingham, 12 O. S., 419, on page 424, it is said:

‘ ‘ The appointment of a receiver is only a provisional appointment for the more speedy getting in of the estate or assets, in relation to which the appointment extends, and for the better securing the same for their safety and the benefit of those who may be entitled thereto. A receiver, however, whether appointed by a court, or by a board, as in this case, is the ministerial officer and servant of those from whom he receives his appointment; and he is responsible for the exercise, of good faith and reasonable diligence in the discharge of his duties. But it can not be said that a receiver by virtue of his office in any case, nor by the provisions of the statute in this case, becomes vested with the title to the property or assets which he administers. His relation to the property, like that of a constable, sheriff or master in chancery, is merely that of a ministerial officer.”

In the case of Cheney v. The Maumee Cycle Co., 64 O. S., 205, at page 214, we read:

“The.relation of an assignee and receiver to the property of an insolvent debtor is in many respects similar. The one obtains title to and authority and power over the property by reason of the joint act of the debtor and the court; the other obtains like authority by the act of the court alone, not having the title, but standing as the ministerial officer of the court, his relation to the property being much like that of a sheriff or master in chancery. Bank v. Buckingham, 12 Ohio St., 419. His appointment is an equitable remedy, bearing the same relation to courts of equity that proceedings in attachment bear to courts of law, the appointment being treated as an equitable execution. The purpose is to secure the means for satisfying the final order and judgment of the court in the action, and the effect of the seizure is to place the property seized in the custody of the court. ’ ’

In the light of these two decisions the Legislature enacted the statute here under consideration, and knowing from them that the “equitable execution” levied upon the corporate property by the appointment of a receiver does not divest the corporation of its title to said property until sale is made by the receiver under orders of the court appointing him, ifprovided that the franchise tax required to be paid by the corporation shall be the first and best lien upon “such property,” to-wit, the property of the corporation, whether employed by it in the prosecution of its business, or in the hands < of a receiver for the benefit of creditors and stockholders.

The statute thus appears to be clear and unambiguous, requiring no aid from rules of construction invoked by the creditors, and under it the relief claimed by the attorney-general in behalf of the state, to-wit, the payment of the state’s claim for the Willis tax for three years during which time the property of the corporation was in the hands of the receiver, must be allowed, to be first made out of the fund realized by the receiver’s sale, before the claims of mortgagee or other lienholders are paid.

The result here reached is the same as that reached under a similar statute in the state of New Jersey, where the same questions were raised. In re West Car Company, 60 N. J. Eq., 514.

Judgment for the state; see journal.