text:
    EFFECT OF ACQUIESCENCE IN WRONGFUL CONDUCT.
    Circuit Court of Cuyahoga County.
    Louis N. Gross v. J. R. Wiener, The Wiener Bros. Company, and The Intervale Fruit Company.
    Decided, January 13, 1913.

      Equity — When Doctrine of Laches Bars Equitable Relief.

    Acquiescence in the wrongful conduct of another by which one’s rights are invaded, in order to preclude the injured party from obtaining equitable relief to which he would be otherwise entitled, must be voluntary, with knowledge of the wrongful acts and their injurious consequences, and it must last for a reasonable length of time, so that it will be inequitable to the wrongdoer to enforce equitable remedies against him.

      White, Johnson & Cannon, for plaintiff.

      Kline, Tolles & Morley, contra.
    Meals, J.; Winch, J., and Marvin, J., concur.
    Some time in March, 1909, the plaintiff, Louis N. Gross, entered into a contract with the Wiener Bros. Company, a corporation organized under the laws of the state of Ohio, of which J. Ii. Wiener was a principal stockholder and treasurer/ for the purchase of 208 shares of the capital stock of the Intervale Fruit Company, a corporation also organized under the laws of the state of Ohio.
   It is claimed by the Wiener Bros. Company that this contract was made on the 10th day of March, and by Gross that it was made on the 19th day of March, 1909, but in our opinion this dispute is unimportant, as the knowledge which Gross had of the facts on which he relies for relief in this action, were substantially the same on both dates.

This action is brought by Gross for the rescission of this contract, and the prayer for relief is founded upon the following allegations of fraud and misrepresentation on the part of the defendants in the making of the contract:

First. That the farm owned by the Intervale Fruit Company, a one-half interest in which Gross sought to buy in the purchase of the stock of the company, contained six hundred and twenty-six acres.

Second. That the farm was worth $60,000.

Third. That there were 50,000 trees, practically all three, four and five years old.

Fourth. That the title of the company was clear.

Fifth. That the Wiener Bros. Company, which owned two-.thirds of the outstanding stock of the company, had been offered $27,000 for one-half of their interest.

Sixth. That the canning factory located on the farm and belonging to it, had an estimated capacity of 30,000 No. 3 cans every ten hours.

Seventh. That the canning factor}* cost $3,800 to build.

Eighth. That the canning factory employed eighty hands.

Ninth. That the fruit company shipped twenty-seven cars of fruit in the season of 1908.

Tenth. That the fruit company paid dividends of 30% in 1908.

Eleventh. That orchard A contained 12,000 peach trees.

Twelfth. That orchard B contained 3,700 apple trees, and bore a full crop in 1908.

Thirteenth. That orchard C was the finest plum orchard in the south, and had borne three crates to the tree.

Fourteenth. That orchard D contained ten acres of land planted in pecan trees.

Fifteenth. That orchard E contained forty acres of apple trees.

Sixteenth. That parcel F contained twenty-five acres of strawberries.

Seventeenth. That orchard G- contained 5,000 peach trees.

Eighteenth. That orchard H contained 600 pear trees.

Nineteenth. That orchard I contained 15,000 Elberta peach trees, and averaged one crate to the tree in 1908:

Twentieth. That orchard J contained 7,000 peach trees.

Twenty-first. That orchard ,E contained 4,000 peach trees.

Twenty-second. That orchard L contained 8,000 plum trees.

Twenty-third. That parcel M contained ten acres of strawberries.

Twenty-fourth. That orchard N contained 4,000 peach trees, and in 1908 bore a half crop.

Twenty-fifth. That orchard O contained 20,000 peach trees.

Twenty-sixth. That orchard P contained twenty acres of peach trees.

Twenty-seventh. That parcel Q contained eight acres of peach trees.

Twenty-eighth. That parcel R contained thirty acres of walnut, filbert and pecan trees.

It may be important to note that, with the exception of representations as to numbers 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10, the several representations referred to the number of trees on the farm.

Representation No. 3 refers to the age of the trees on the farm, and it is substantially conceded that the value of the farm rested upon these two considerations.

For reasons which need not be recounted here,-representations numbers 1, 2, 4, 5, 7, 8 and 9 are practically eliminated from the ease. There remains, therefore, for our consideration, representations numbers 6 and 10, aiid those relating to the number and age of the trees on the farm.

We therefore have before us the representations, first, referring to the number and age of the trees on the farm; second, the capacity of the canning factory; and, third, that the company paid a dividend of 30 per cent, in 1908.

The falsity of these representations is denied by the defendants, and for their further defense they allege that Gross made no claim that he had been deceived in the making of the contract until January 10, 1910, when, accompanied 'by Mr. Neff, he went to Akron and demanded of the Wiener Bros. Company a rescission of the contract, and that by his conduct in the iterim he ratified the transaction and is now estopped to complain.

What are the facts and circumstances attendant upon this transaction ?

The record is voluminous, and within the narrow limits of this opinion it will be impossible to refer to more than the principal facts of the transaction.

Gross and Wiener had been intimate friends for perhaps a dozen years. Late in January or early in February, 1909, Gross called upon Wiener at his office in Akron, as had been his custom when visiting that city.

In the course of their conversation at this time, Ml*. Gross said to Mr. Wiener that he was tired and contemplated going south for a short rest, and incidentally for the purpose of viewing and perhaps buying a tract of land at Palatka, Florida, for his son, whom he wished to interest in agriculture. Wiener asked Gross how soon he intended going, saying, if you will let me know a week or ten days before you go, I am quite sure that I can go along with you, as I have been working very hard and need a little rest myself.

A short time later Gross communicated with Wiener by telephone relative to the time of their departure. At this time it was arranged that they should leave Akron for the South on Saturday evening, March 6th.

At Akron, on the evening of the 6th, at Wiener’s home, the conversation relative to the purchase of lands in Florida by Gross was renewed. Wiener assured Gross of his faith in southern farm lands. Among other things he said to Gross, in substance, you know that I had very little money. A short- time ago I invested a small amount in a small parcel of land in Georgia, the profits from which I reinvested in other lands adjacent thereto, until now, as a result of the accumulations from my original investment, I have $60,000 or $70,000 worth of farm lands in that state.

He then suggested to Gross that they stop over at his farm and "spend a day or two there, ’ ’ to which Gross acceded, saying, however, that he did not think they would wish to remain there any great length of time. Wiener said, in substance: “Well, when we get there, if we find it is not as pleasant as we want it, we will not stay, and it won’t take us much out of our way to stop, as it is on the route to Florida.”

At this time Wiener had in mind the selling of the Wiener Bros. Company’s interest in the farm, as is evidenced by the facts which will be adverted to later in this opinion.

After dinner they left Akron together and arrived at Chattanooga at 7 p. m. Sunday, March 7th.

En route from Cincinnati to Chattanooga the conversation turned again to farms and farming in the south. Gross again spoke of his boy, who was then about fourteen years of age. He said he would like to educate him in an agricultural college and make a farmer out of him, as he felt that he would be much more contented at farming than he would be in the mercantile business, and that he intended to look at some lands at Palatka, Florida, with the intention of purchasing the same if they suited him. In the course of the conversation Wiener encouraged Gross in this intention, saying, among other things, that his was a most excellent idea.

After some further conversation on this subject Wiener said:

“Now, Gross, what is the matter with your buying an interest in my farm instead of going away down to Florida? I have $60,000 or $70,000 worth of property out there, and, as you are aware, I never had much money, but I bought a small part of the place which I now have, and with the profits bought more, until now I have six hundred and twenty some odd acres of land worth more than $30 an acre. There are over 50,000 fruit-bearing trees upon it, all young, four or five years old, and a good many of them not over two years old that I put out myself, and this place has a most promising future for it. If you want your son to become a farmer, I think here is a most elegant proposition for you to go in on. Very recently I turned down an offer of $27,000 for a half interest in my holdings in the farm.”

At this juncture Wiener withdrew a packet of papers from his traveling bag, from which he handed a letter to Gross from one Byrne, in which Byrne conditionally offered $27,000 for a half interest in the farm. Wiener also showed Gross a copy of his reply to Byrne, in which the Wiener Bros. Company offered to take $30,000 for their interest in the farm, and represented, among other things, that the property was worth from $60,000 to $65,000-; that there were 50,000 trees on the place, and that practically all o'f them were three, for and five years old and worth at $1 a tree; also that the farm consisted of 626 acres of land worth from $30 to $35 an acre, with buildings on the Tompkins farm, which was one of the two farms composing the entire tract, worth alone $10,000.

And thus the conversation continued, off and on, until they reached Chattanooga, AYiener seemingly leaving nothing unsaid, which, to his mind, would induce his friend Gross to purchase one-half of his company’s interest in the farm. Gross regarded AYiener as his friend, and believed implicitly all that Wiener-said to him on the subject of the farm and its value.

At Chattanooga they met, as if by appointment of Wiener, one Healey from Port Clinton, who was represented as a fruit buyer and who accompanied them to the farm, adding his mite at times, we suppose, in swelling the worth of the Intervale farm.

The party left Chattanooga on Monday, March 8th, stopping-over night at Summerville, Georgia. On Tuesday morning, March 9th, they drove to the farm some five miles away. Adopting the language of counsel for the defendant, they found the peach trees in full bloom, which presented a most beautiful sight. It was perhaps ten o’clock when they arrived at the place. An hour or more was spent in -walking in the orchard and about the place, not going very far away, however, from the farm house. Luncheon was served at about 12:30 at the farm house, after which the party remained in and about the farm house, and the grounds immediately surrounding the same, until early the following morning, when they returned to Summerville.

While at the farm Wiener convinced Gross of the truthfulness of the representations which he had made to him concerning the extent and value of the farm, and of the advantages in owning a share in the same, and had successfully induced Gross to agree to purchase a half interest in the farm for the sum of $15,000. Some debts were outstanding against the place which were pressing. ‘ AYiener explained to Gross that it was because of these debts and his need of money that he entertained at all the thought of disposing of any part of the farm, as he regarded the investment a capital one. Then, too, he added that he was glad to take Gross into partnership with him in a good thing, because of the long-standing friendship existing between them. •

On their arrival at Summerville on the morning of March 10th, they went to the office of C. B. Rivers, an attorney, who drafted an agreement for them, which in part is as follows: •

“For and in consideraion of the sum of $15,000, said Wiener Bros, do herby transfer, assign and convey unto the said Louis N. Gross one-half of all the stock of the Intervale Fruit Company, incorporated, of Akron, Ohio, and agree to deliver to him the usual certificates for said stock by shares, with all and full the rights and privileges of every other shareholder of such stock of equal amount. ’ ’

And further, the agreement provided the sum of $15,000 was to be paid according to the terms of a further agreement between the said Louis N. Gross and J. Henry Wiener, president of the said the Wiener Bros. Company. AYhat this further agreement should contain does not appear, at least, from this instrument, but we suppose reference is here made to the agreement to be and which was made later. The agreement was signed by the Wiener Bros. Company, by J. IT. Wiener, treasurer, and Louis N. Gross.

For the purpose of meeting- certain pressing claims against the company, as above stated, and in accordance with an arrangement made by and between Wiener and Gross at the farm on the previous day, Gross paid at this time $760, which was credited on the contract.

Having concluded their business in Summerville they continued on their journey. About March 21st, they returned home, after which Gross was elected secretary and treasurer of the Intervale Company and assumed the management of the same. He had an examination made of the title to the property; he inquired into the indebtedness of the company and in other ways set about to familiarize himself with the business of the company.

On the 19th of April the transaction was finally closed. Another contract was made and signed by Gross who gave his notes to the Wiener Bros. Company in payment of the purchase price.

In this latter contract it was recited that the Wiener Bros. Company “this day sold and transferred to the second party 208 shares of the capital stock of the Intervale Fruit Company, one-half of the outstanding capital stock of said company, for the sum of $15,000, said transfer to take effect as of the 10th day of March, 1909.”

As we have previously observed, it is contended by Gross that the true date of the contract was April 19, or. .the day on which this latter contract was made, and by the Wiener Bros. Company that it was March 10. In support of his claim Gross cites the fact that on March 10th, J. II. Wiener was without authority to execute a contract on behalf of the Wiener Bros. Company, later ratified his act and, for the purpose of carrying out the agreement, purchased the outstanding one-third interest of the capital stock of the company for the sum of $3,500 ; and, further, Gross in his testimony says, that when Rivers handed him and Wiener duplicate copies of the contract drawn at Summerville, he said to Wiener:

“This is a preliminary contract for an agreement and you must surrender your copy up to Gross when the final contract is made.”

Whatever there may be in these contentions, it seems to us, that they are unimportant here. In concluding the transaction Gross must have relied, for the most part, upon the representations concerning the farm made to him by Wiener. Doubtless he had no other knowledge of the number of fruit trees that were on the farm, their ages or their bearing qualities, and this was the all-important factor in the transaction. These representations were made to him prior to March 10th, and relied on by him in entering into the agreement of March 10th, and it is a matter of no particular importance how this agreement is classified in connection with the agreement of April 19th, as his knowledge on this subject had not changed, and his belief in the truthfulness of the representations was perhaps only strengthened by an incident which had occurred in the meantime.

As previously promised, sometime between March 10th and April 19th, a book of views, carefully and. incorrectly prepared with the obvious purpose of deceiving prospective buyers of the farm, and as if the better to confirm the belief which Gross had in the truthfulness of the representations made to him by Wiener, and lest he should become aware of the perfidy of his friend before the consummation of the transaction and the payment of the balance of the purchase price, was placed in his hards by Wiener’s order. This book is distinguished particularly by the gross misrepresentations embodied in the foot notes appended to the various views contained tberein. ■ According to these notes there were between 80,000 and 90,000 trees on the place. While the placing of this book in Gross’ hands was doubtless intended to mislead and deceive him, we do not believe that it was the controlling factor in causing Gross to fall a victim to the fraud that was perpetrated upon him.

Without going into the evidence in detail relative to the efforts made by Gross to ascertain whether or not he had been deceived, it is enough to say that shortly after the consummation of the transaction on April 19th, 1909, he became suspicious of the truthfulness of the alluring representations made to him by Wiener. Most likely his confidence in his friend had not as yet been shaken and it is equally likely that he was reluctant to think, much less accuse Wiener of having defrauded him. However, under one pretense and another he sent various persons to the farm for the purpose of ascertaining the true state of affairs. But he seems to have been able to get very little information from them. Likewise, by letter he sought to ascertain the true state of things relating to the farm, but without much success.

Sometime before the 1st of January, 1910, having become convinced that probably he had been imposed upon by his •unsuspected friend, he consulted counsel as to the course which he should pursue in the premises. This conference resulted in Mr. Neff going to the farm and making a careful examination and investigation of the property, and reporting the true condition thereof to Mr. Gross. Mr. Neff remained on the farm about a week and returned to Cleveland on the 8th or 9th of January. Then for the first time Mr. Gross was fully and accurately apprised of the true condition of the property; and then, also, Mr. Gross became aware for the first time of the absolute falsity of the representations made to him concerning the farm by Wiener. Until he received Mr. Neff’s report he was without accurate knowledge as to the number of trees there were on the property, or their ages, or their bearing qualities, and had only such knowledge on that subject as had been imparted to him by the false representations of his friend Wiener and as contained in the untruthful book of views placed in his hands as above stated. He now learned for the first time that instead of their being 50,000 trees on the property, as represented by Wiener, or between 80,000 and 90,000 trees, as indicated by the book of views, there-was but a fraction of that number. The investigation of Mr. Neff disclosed that there were not more than 7,100 trees under five years of age, and not more than 8,100 under seven years of age, and that the great majority of the trees that were on the place were old and valueless; also that the representations concerning the cannery, as well as the representation that the farm had paid a dividend of 30 per cent, in 1908, were likewise untrue.

Without going more into detail as to the evidence relied on by the plaintiff in support of his contentions, we are led inevitably, from a careful reading of the record, to the conclusion that the grossest fraud was practiced upon him and that Wiener imposed upon his confidence and shamelessly outraged his friendship. Indeed, no attempt, or at least very little attempt, is made by the defendants to refute the claim of the plaintiff respecting the representations that were made and their falsity. That they were made, that they were material and that they were relied upon by Gross to his injury, are seemingly irrefutable propositions. The defendants chose rather to defend against the relief prayed for by the plaintiff on the ground that the plaintiff, with full knowledge of the wrong that had been perpetrated upon him, ratified the^transaetion and acquiesced in his injury. As to this defense, how do the defendants stand before a court of equity?

Ratification has been defined to be the approval by act, word or conduct of that which was improperly done, or of a wrong which was committed. In short, confirmation of a voidable act. In the language of Pomeroy in his work on Equity Jurisprudence, Volume 2, Section 917:

“Acquiescence in the wrongful conduct of another by which one’s rights are invaded, may often operate, upon the principles of, and in analogy to estoppel, to preclude the injured party from obtaining many distinctively equitable remedies to which he would otherwise be entitled. In order that this effect may be produced, the acquiescence must be with knowledge of the wrongful acts themselves and of their injurious consequences; it must be voluntary, not the result of accident; nor of causes rendering it a physical, legal or moral necessity, and it must last for a reasonable length of time, so that it will be inequitable even to the wrongdoer to enforce the peculiar remedies of equity against him after he has been suffered to go on unmolested and his conduct apparently acquiesced in.”

While they are distinguishable, the doctrine of laches, ratification and estoppel are closely allied. In Badger v. Badger, 2 Wallace, 87, it is said:

“There is a defense, peculiar to courts of equity, founded on lapse of time and the staleness of the claim where no statute of limitations governs the case. In such cases courts of equity act upon their own inherent doctrine of discouraging, for the peace of society, antiquated demands, and refuse to interfere where there has been gross laches in the assertion of adverse rights. ’ ’

And in Parker v. Bethel Hotel Co., 31 L. R. A., 706, it is said:

“The defense of laches does not generally apply where the situation of the parties has not been altered and one has not been put in a worse condition by the delay of the other.”

Ratification, on the other hand, means confirmation. The very substance of ratification is confirmation after conduct, and “this is enough,” says Bigelow, “to indicate that there may be danger in using the term estoppel freely, for it is common enough at present to speak of acquiescence and ratification as an estoppel. Neither the one nor the other, however, can be more than part of an estoppel at best. An estoppel is a legal consequence, a right, arising from acts or conduct, while acquiescence and ratification are but facts presupposing a situation incomplete in its legal aspect, i. e., not as yet attended with full legal consequences. The most that acquiescence or ratification can do, and this either may under certain circumstances do, is to supply an element necessary to the estoppel and otherwise wanting, as, e. g., knowledge of the facts at the time of making a misrepresentation. But each stands upon its own grounds and must be añade out iai its own way, aiot necessarily iai the way required by the ordinary estoppel by conduct.” Bigelow on Estoppel, 5th Ed., pp. 456-457.

Applying these principles to the case before us, we are clearly of the opinion that the record fails absolutely to disclose such facts' and cireuaaistanees and such knowledge thereof on the part of Gross, as would estop him from attacking and attempting to have set at naught the contract which through fraud and misrepreseaitatioai he was induced to make. Accordingly a decree will be entered for the plaintiff as prayed for.


source: Caselaw Access Project

license: Public Domain

text:
    DURESS IN OBTAINING SIGNATURE OF PARENT.
    Circuit Court of Cuyahoga County.
    The Maxwell-Rolf Stone Company v. John P. Whigham.
    Decided, November 18, 1912.

      Contracts — Evidence—Threats to Have Son Arrested Amount to Duress —When Defendant Has Bight to Open and Glose — Testimony as to Effect of Acts Alleged to he Duress Competent.

    1. A contract in order to be valid and binding must be the result of the free assent of the parties making it, and where a father is coerced into signing an instrument guaranteeing the payment of the amount of a defalcation by his son, by threats of the arrest and prosecution of the son for embezzlement if such guaranty is not given, the guaranty may be avoided on the ground of duress.
    2. Where, an answer admits all the averments of a petition which are necessary to state a cause of action and sets up new matter as a defense, the burden of proof rests upon the defendant, and it is his right to open and close.
    3. In an action upon a written instrument, to which the defendant alleges his signature was secured by duress by threats to have his son arrested, the effect of the threats upon the defendants was a question of fact and it was competent for him to testify that he would not have signed the instrument sued upon if the threats had not been made.

      W. J. Patterson, lor plaintiff in error.

      Ong & Mansfield, contra.
    Neman., J. • Winch, J., and Marvin,. J., concur.
    The parties stand here as in the court below.
   The plaintiff: sought to recover the sum of $10,633.22 with interest, basing its claim on a written instrument signed by the defendant, and reading as follows:

“In consideration of the sum of one dollar to me in hand paid by the Maxwell-Rolf Stone Co., a corporation of Cleveland, Ohio, I hereby guarantee the payments to the M.axwell-Rolf Stone Co. of all such amounts of money as the books of said company may, on examination and audit, show to be due it from my son, J. C. Whigham. Such audit to be made without delay and my said son to be allowed opportunity to see the books of said company at the company’s office. I to have 60 clays’ time in which to pay the amount so found due after the said audit is completed; the said 60 days’ time to be taken as a further consideration for the making of this guaranty by me.”

This instrument was signed by the defendant after it had been discovered by the plaintiff that J. C. Whigham, the defendant’s son, who was in the employ of the plaintiff as agent and bookkeeper, had received and converted to his own use large sums of money belonging to the plaintiff. The amount of the shortage was subsequently ascertained by an audit to be the amount sued for. The defendant does not dispute these figures.

The defense was based upon the claim that the defendant was coerced into signing the instrument sued on by threats of the officers of the plaintiff company that unless he signed it they would at once cause his son to be arrested and prosecuted for embezzlement. ITe alleges that he was told that an officer of the law was waiting outside the office of the company where the transactions took place, to arrest his son, and that by reason of the fear induced by the threatened arrest of his son, he was unable to exercise his own free will, and signed the instrument.

The defendant further claims that the plaintiff agreed that if he would sign the instrument sued on, the prosecution and imprisonment of his son should not take place, and this is relied on by him to establish the illegality of the agreement.

The verdict was for the defendant. The plaintiff’s motion for a new trial having been overruled and judgment entered on the verdict, this proceeding in error is prosecuted to secure a reversal.

The law is too clearly established to require any citation of authorities, that an agreement made in consideration of a forbearance to prosecute one accused of a crime can not be enforced.

If threats made by officers of the plaintiff to prosecute the son of the defendant operated to deprive him of his free will power, and, as a result, he signed the agreement, he is not bound thereby, regardless of whether there was a promise to forbear prosecution.

In Williamson-Halsell-Frazier Co. v. Ackerman et al, 20 L.R.A.(N.S.), 484 (77 Kan., 502), it was held:

“A contract in order to be valid and binding, must be the result of the free assent of the parties making it, and where a father is coerced into executing a mortgage to secure the payment of a defalcation of his son by threats of the arrest and prosecution of the son for embezzlement if such security is not given, the mortgage may be avoided on the ground of duress. ”

This we conceive to be the law applicable to the second defense set up in the amended answer.

There was evidence tending to sustain the defenses of the defendant, and the case, in our opinion, calls for no interference with the judgment on account of the verdict not being sus.-' tained by sufficient evidence.

It is contended by counsel for plaintiff in error that the court erred in its ruling that the defendant had the opening and closing.

By the amended answer all the essential averments of the petition entitling the plaintiff to recover, in the absence of affirmative defenses, were admitted, except possibly the amount of the shortage, and in open court at the beginning of the trial, counsel for defendant admitted this to be as stated in the petition. It was therefore incumbent on the defendant to assume the burden of producing evidence in support of his affirmative defenses. He was entitled to open and close, and the court committed no error in the ruling complained of.

Another ground of error relied on is error in the admission of evidence. The court, over the objection of the plaintiff, permitted the defendant to answer the question :

“Mr. Whigham, can you state to the jury whether if Mr. Maxwell had not made the statement to you about arresting your son, as you have related it to the jury, can you state to the jury, whether, if that had not been said, you would or would not have signed the contract in suit?”

The answer was:

“I undoubtedly would never have signed it, by no means.”

Whether or not the act of the defendant in signing the instrument in question was the result of duress or coercion, was a question involved in one of the defenses. The influences that operated upon the mind and will of the defendant was the proper subject-matter of inquiry. The defendant might properly testify what influence controlled his act.

The jury would not be bound to take his statement on this subject as final, but it was proper testimony on a question which was to be determined by the jury in the light of all the circumstances shown by the evidence.

The same principle controls the competency of this testimony as is stated in Grever & Sons v. Taylor et al, 53 O. S., 621, in paragraph 2 of the syllabus, which reads as follows:

“Whether representations as to his pecuniary circumstances made by the purchaser to the seller of goods, at one time in order to obtain credit, influenced the seller in making a like sale to the same party at a subsequent time, is a question of fact; and, in such case, it is competent for the seller to testify that they did. But the fact is to be determined by the jury in view of all the circumstances; as, also, whether there was such fraud in the subsequent sale as to entitle the seller to recover the property on the ground that the information given in the first instance was false. ”

No error prejudicial to the plaintiff in error has been brought to our attention, and the judgment is affirmed.


text:
    LIABILITY FOR FRAUDULENT REPRESENTATIONS BY PROMOTERS.
    Circuit Court of Lorain County.
    Arthur Champney, Harry R. Edwards, Louis Schneurer and J. W. Roof v. Leonora A. Braun.
    Decided, July 1, 1912.

      Corporations• — Fraud—Trial—All Promoters of a Corporation Liable for Fraudulent Representations of One of Their Number — Latitude Allowed Attorney in Argument.

    1. Where several persons engage in business jointly, and, to facilitate such business, use a corporate name and issue stock, and in the promotion of the scheme, false representations are made by those holding themselves out as promoters and managers of the business as to material facts of inducement and as to matters peculiarly within the knowledge of all the associates or their agents, all those engaged in the promotion of the business as associates of those making false representations are liable to those, who, relying upon such representations, purchased stock to their injury.
    2. Every argument has for its aim the convincing of the jury of the justice of the cause of action or defense advocated by counsel, and considerable liberality should be allowed counsel in drawing inferences and even in indulgence in invective, where there is any support thereof in the evidence.

      H. G. Ridington and Q. A. Gillmore, for plaintiff in error.

      Webber & Metcalf, contra.
    Niman, J.; Marvin, J., and Winch, J., concur.
    The defendant in error was plaintiff, and the plaintiffs in error were defendants, in the court of common pleas.
   In the original action, the plaintiff recovered a verdict against the defendants on which judgment was duly entered after the overruling of the defendants’ motion for a new trial.

By this proceeding the plaintiffs in error seek a reversal of the judgment rendered against them in the court below.

The plaintiff’s cause of action was for the recovery of damages for alleged false and fraudulent representations made by A. R. Champney, one of the defendants, claimed to have been acting not only for himself, but for the other defendants, whereby the plaintiff was induced to subscribe for one thousand dollars of the capital stock of a proposed corporation, the Liquid Force Company, and to pay for the same 'the full face value, upon the subsequent organization of the corporation.

The organization of the Liquid Force Company seems to have had its inception at a meeting held in June, 1908, in the city of Cleveland, at which the four plaintiffs in error and W. L. Hills, who had been manager of the Moxie Company, of New York, were present. The plaintiffs in error were.the owners of all the stock of the A. R. Champney Company, located at Elyria, Ohio. This company was manufacturing and selling, as one of the lines of its business, a soft drink called "liquid force.” At the meeting referred to there was some conversation between those present about organizing a new corporation to take over the business of the making of liquid force, and apparently some understanding was reached looking to the organization of such a corporation. The testimony of the various witnesses, who were questioned about the conversation that took place, was not very specific, but it is clear that some arrangement was made providing for the character of the organization of the proposed corporation and the terms of the transfer of the rights of the A. R. Champney Company in liquid force to the proposed corporation, because subsequent to this meeting a subscription contract was prepared embodying a prospectus of the new corporation, and specifying the terms on which it was to acquire from the A. R. Champney Company the rights of that company in liquid force. Various persons, including the defendant in error, signed ibis subscription contract.

On the 14th day of July, 1908, the plaintiffs in error and a daughter of one of them, met at Elyria and signed articles of incorporation of the Liquid Force Company which were filed in the office of the Secretary of State on the 21st day of September, 1908.

The false and fraudulent representations claimed to have been made to the plaintiff below by the defendant, A. R. Champney, on which were based her right to recover were:

That the liquid force department of the A. R. Champney Company had, for a year previous to the time plaintiff subscribed for the stock, paid a dividend of 33 <f0; that for the year previous to the time of her signing the subscription list, the A. R. Champney Company had done between $25,000 and $30,000 worth of business in liquid force alone; that the business of liquid force had been fully advertised and needed no further advertising, but sold on its merits; that the secret formula and good will and trade mark of the liquid force business were worth $150,000.

At the conclusion of the plaintiff’s testimony in the court below the defendants made a motion to arrest the testimony and instruct a verdict for the defendants. It is contended here that this motion should have been granted, and the' contention requires a determination of the question whether any evidence was introduced by the plaintiff tending to sustain her right to recovery.

Liability of those who engage in the promotion of a corporation, for fraudulent representations, is stated in Thompson on Corporations, 2d Ed., Section 727, in the following language:

“It is made very clear by the authorities that promoters are liable for their frauds in obtaining subscriptions to the capital stock of the proposed corporation. It matters not what form the fraud assumed, if it was sufficient to influence the subscriber. The fraud of promoters in securing subscriptions may consist in representations as to the value of the property and as to the method of organization of the proposed corporation. ’ ’

The representations complained of by the plaintiff in error in her petition in the court below are of such a character as to furnish the foundation' for a recovery, provided they were false, and the party making them knew them to be false, or made them recklessly, without knowledge of their truth or falsity, and provided, further, plaintiff relied upon such statements and was damaged thereby.

As to the defendant, A. R. Champney, there can be no question raised as to the evidence having been sufficient to have required a submission of the ease to the jury.

It is not claimed that the other three defendants below, themselves, made any of the representations relied upon by the plaintiff to sustain a recovery, and the question remains to be determined whether these three defendants can be held for the representations made by the defendant, A. R. Champney.

The petition charged a conspiracy between the four defendants; but the charge of conspiracy was abandoned and, in the charge of the court, the jury were told that if they should find from the evidence, by a preponderance thereof, that all the defendants were the promoters of the Liquid Force Company and that Champney as one of the promoters thereof, before the organization thereof and in furtherance of the promotion, organization and financing of the corporation, made false and fraudulent representations to the plaintiff for the purpose of inducing her to subscribe to the capital stock, knowing the same to be false, or recklessly making them, without any knowledge as to their truthfulness, and plaintiff, relying on such representations, was induced to and did subscribe for such stock and paid one thousand dollars therefor, which has become wholly lost to her, and she would not have so subscribed or paid her money for the stock but for such representations, then their verdict should be for the plaintiff against all of the defendants.

In Hornblower v. Crandall, 7 Mo. App., 220, the liability of those who engage in the joint enterprise of organizing a corporation on account of the false representations of one of those engaging in the joint enterprise, was considered and it was there held, quoting from the syllabus:

"Where several persons engage in business jointly, and, to facilitate such business, use a corporate name and issue stock, and in the promotion of the scheme, false representations are made by those holding themselves out as promoters and managers of the business as to material facts of inducement and as to matters peculiarly within the knowledge of all the associates or their agents, all those engaged in the promotion of the business as associates of those making false representations are liable to those who, relying upon such representations, purchased stock to their hurt.
"That one of the associates, thus connected, is ignorant of the details of the business, will not avail him where he had the means of knowing, but trusted to his associates, and where he, with the others, received the benefit of the wrongdoing.”

There was evidence here tending to prove that all of the defendants were engaged in the joint business of organizing the Liquid Force Company and that the sale of stock was intrusted to the defendant, A. R Champney, and the evidence is undisputed that all four of the defendants signed the articles of incorporation and became the beneficiaries, indirectly at least, of the subscriptions secured by Champney, including that of the plaintiff. There being evidence produced by the plaintiff tending to prove a state of facts which would render all of the defendants liable, the ease was properly submitted to the jury to determine whether such state of facts had been established by the required degree of proof and the-trial court committed no error in refusing to arrest the testimony from the jury and direct a verdict for the defendant. Thompson on Corporations, 2d Ed., Section 114.

It is argued that the verdict is not sustained by sufficient evidence, but, in our opinion, the verdict is not so manifestly against the evidence as to justify us in interfering with the result reached by the jury who heard all the evidence in the ease and had an opportunity of seeing the witnesses and determining their credibility.

It is contended that the court below committed error in permitting the trial to proceed upon the theory of conspiracy as stated in the petition and admitting certain testimony which would be competent in support of a charge of conspiracy, but not competent upon any other theory, and then eliminating from the case, in his charge to the jury, the question of conspiracy, Avithout also taking from the jury the evidence admitted in support of the conspiracy charge.

An examination of the evidence discloses nothing prejudicial to the defendants in the admission of evidence of the kind referred to, except that relating to statements made by Champney to Eugene Sites and the conversation that took place with reference thereto between Champney and Hills. The testimony of Hills on this subject was, however, withdrawn from the consideration of the jury and no complaint can therefore be made of this matter. It is argued, that the court should have expressly-indicated to the jury that the cause of action based upon a charge of conspiracy was not the one upon which they were to pass. The allegations in the petition on the subject of conspiracy may be treated as surplusage and the cause of action there stated remains as one for recovery of damages on account of fraudulent representations.

The court in his charge apparently so treated the plaintiff’s cause of action and charged the jury properly on the law by which the defendants were to be held liable, if at all. This, by necessary implication, rejected any other cause of action and withdrew the same from the consideration of the jury. If the defendants desired more specific instructions on this subject they should have submitted a request to charge.

Numerous exceptions were taken by the defendants during the course of the trial to the admission of evidence on behalf of the plaintiff and the rejection of evidence offered on their own behalf. We have examined these exceptions and, without indicating our opinion as to each one separately, the number being so great as to render this impracticable within the limits of an opinion, we have reached the conclusion that the court committed no error prejudicial to the defendants in rulings on evidence.

The plaintiffs in error complain of the special requests to charge before argument given on behalf of the plaintiff below and contend that these requests do not correctly .state the law applicable to the case before the jury.

In our opinion, however, these requests embodied well settled principles of law and were appropriate to the facts in evidence and the trial court committed no error in giving the charges requested.

In the general charge, the court said:

‘ ‘ In order to recover for the alleged false representations made by the defendants, plaintiff must show that she was induced to make the purchase relying solely upon the false representations of the defendants, which she relied upon, and certain other information received from some other source. If it appears that the plaintiff did not trust the false statements,, but acted alone upon information received from other sources, the jury should find for the defendants. ’ ’

It is argued that this part of the charge left the jury to find in plaintiff’s behalf if she not only believed that which Champney said to her, but also was influenced by other statements which she may have received from other sources without even the knowledge of Champney. While the first sentence of this part of the charge is somewhat obscure and is certainly awkwardly worded, we think the second sentence remedies any possible prejudice that may have resulted from the other. In the second sentence, the jury are told that if it appears that the plaintiff did not trust the false statements, but acted alone upon information received from other sources, it should find for the defendants. It is a well recognized rule that all parts of a charge must be considered together and, applying this principle, it seems clear that the court did not err in this part of the charge complained of.

The plaintiffs in error also complain of other portions of the charge in which the liability of the promoters of a corporation for the false representations of one of their number is stated and defined.

We have already indicated our views of the law on this subject and it is sufficient to say again that in our opinion the court committed no error in charging the jury on this subject. We are supported in this view by a recent case decided by the Court of Appeals of New York, Downey v. Finucane, 205 N. Y., 251. Quoting from the syllabus:

‘ ‘ The promoter of a company, whether he be a director or not, who knowingly issues or sanctions the circulation of a false prospectus containing untrue statements of material facts naturally tending to mislead and to induce the public to purchase its stock or other securities, is responsible to those who are injured thereby. Where there are a number of such promoters all the co-adventurers are liable in damages for the fraud of an agent employed by them to effect the sale of the corporate securities, without reference to their ovm moral guilt or innocence. ’ ’

It is contended on behalf of the plaintiffs in error that counsel for the plaintiff below, in his argument to the jury, was guilty of misconduct. The argument objected to is set forth in the bill of exceptions, but the arguments of other counsel in the ease are not before us. While it is apparent that a very generous latitude was allowed counsel for plaintiff by the trial court in the making of his argument to the jury, we do not think that there is anything in the argument that would justify a reversal of the judgment rendered in the court below. The defendants were represented by able counsel who undoubtedly presented the defense of their clients in a thorough and vigorous manner, Some parts of the argument to which the exceptions were taken were apparently called forth by statements or arguments of opposing counsel. Every argument has for its aim the convincing of the jury of the justice of the cause of action or defense advocated by counsel and considerable liberality should be allowed counsel in drawing inferences and even in indulgence in invective, where there is any support thereof in the evidence.

We can not see that there was any error committed by the trial court in permitting counsel for plaintiff to make the argument complained of.

It is claimed on behalf of the plaintiff in error that the court erred in the forms of verdict submitted to the jury. No requests for any different forms were made, however, and no error can be said to exist on this account. Moreover, the fact that the jury found for the plaintiff against all the defendants indicates clearly that any additional forms of verdict submitted would not have been resorted to by the jury.

A careful examination of all the errors assigned leads us to the conclusion that no error prejudicial to the plaintiffs in error was committed, and the judgment is, therefore, affirmed.


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    FINES GOING TO LAW LIBRARIES.
    Circuit Court of Cuyahoga County.
    The State of Ohio, ex rel The Cleveland Law Library Association, v. Peter J. Henry, Clerk of the Municipal Court of Cleveland.
    Decided, May 10, 1912.

      Statutory Construction — Later and Special Statutes Prevail — Law Libraries Not Entitled to Fines Collected in Municipal Courts.

    1. Where two statutes are irreconcilable the one last enacted must prevail, and where there is a conflict between a general law and a special act the special act will prevail.
    2. Section 3056, General Code, giving to law library associations fines and penalties collected in police courts in certain cases, does not give to such associations the fines and penalties collected in those cases in a municipal court, which has been created by special act, and to which jurisdiction of all cases formerly exercised by police courts has been transferred, where the act creating the municipal court expressly directs the clerk of that court to pay all moneys collected to the city treasurer.

      A. A. & A. H. Bemis, for plaintiff.

      E. E. Wilcox, contra.
    Pollock, J. (sitting in place of Winch, J.); Dustin, J. (sitting in place of Marvin, J.), and Niman, J., concur.
    This is an action in mandamus brought in this court by the relator, the Cleveland Law Library Association, against Peter J. Henry, clerk of the municipal court of Cleveland, for a writ in mandamus to compel the defendant, Mr. Henry, to pay over to the library funds of this city, the amount collected as penalties for offenses and misdemeanors, as provided by Section 3056 of the code.
   They allege in their petition that the relator, the law library association, is duly incorporated under the laws of Ohio and has its location in the city of Cleveland, and that, in short, it is entitled to the funds provided for in this section and that the defendant has refused to pay to it such funds.

This involves a construction of the section referred to, together with certain sections providing for the municipal court of this city.

The Legislature of the state of Ohio in the year 1910 passed an act creating a municipal court for the city of Cleveland (101 O. L., 365), giving to it certain concurrent jurisdiction with the court of common pleas, and also the jurisdiction of justices of the peace. The act further provided for judges of that court and the clerk of the court, and such other judicial machinery as was necessary to carry out the intent of the Legislature.

The Legislature of 1911 increased the jurisdiction of this court by giving to it the jurisdiction of all misdemeanors and of violations of the city ordinances, which the police court of this municipality had theretofore exercised.

It is claimed that transferring the jurisdiction of the police court to another court having a different name would not destroy the plaintiff’s right to funds under the section above referred to.

We fully agree with counsel that the mere change of name of the court would not affect the distribution of any funds which might come into the hands of the officers of that court, and if this were all the change, affecting the lines coming into the hands of the clerk, that was made in providing a municipal court for this city, we would have no trouble in arriving at the construction of this statute claimed by the plaintiff. But the act creating the municipal court went further than this, and, by Section 30 of that act, provided for the distribution or payment of the funds that should come into the hands of the clerk of this court by virtue of his official position. It provides as follows:

“lie shall pay over to the proper parties all moneys received by him as clerk; he shall receive and collect all costs, fines and penalties, and pay the same quarterly to the treasurer of the city of Cleveland, and take his receipt therefor, but moneys deposited as security for costs shall be retained by him pending the litigation.”

This statute specifically directs that all costs, fines and penalties shall be paid by the clerk quarterly to the treasurer of the city, of Cleveland. If he obeys this requirement of the statute, it is certain that he can not pay to the library association under Section 3056. That section requires the clerk of the police- court to pay a certain proportion of the fines and penalties assessed and collected for offenses and misdemeanors to the library fund. If we say that a change in the name of the court that now has jurisdiction to hear these cases, changed in no way the rights provided by statute of parties to share in the distribution of funds, we have here a direct contradiction in the statute. The clerk, if both of these statutes apply to him, can not obey the requirements of both of them. If the clerk of this municipal court is controlled by both of them, the two statutes are irreconcilable, and where two statutes are irreconcilable the latter must prevail (State, ex rel Guilbert, Auditor, v. Haliday, 63 O. S., 165). And, further, the act creating the municipal court is a special act and creates the office of clerk, the official position held by the defendant, Henry, and this act provides for the distribution of the funds coming into the hands of the clerk by virtue of his office: Where there is a conflict the special act should prevail over the general.

For this reason we feel that the clerk of the municipal court can not be ordered to pay these funds to the law library association.

No doubt the result reached is to be regretted by all parties, for it would be greatly to the benefit of the officers of the municipal court and city to have free access to the books of this law library, but we feel that we could not place such a construction on this statute without reading into it an exception which it does not contain, and that the proper way to remedy this oversight in the statute, if it is an oversight, is through the Legislature.

The writ is denied, and plaintiff’s petition dismissed.


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    REGULATION OF THE SALE OF ICE CREA.
    Circuit Court of Cuyahoga County.
    Nemis Metropolis v. City of Elyria.
    Decided, October 14, 1912.

      Municipal Corporation — Constitutional Law — Forbidding Sale of Ice Cream in Public Places Except in Certain Receptacles — Valid Wxercise of Police Power.

    An order or regulation of a city board of health, forbidding the sale of ice cream on highway or public grounds of the city unless contained in sealed or locked cans or other containers approved by the board of health, is a valid exercise of police power, and is constitutional.

      Fauver & Rice, for plaintiff in error.

      G. B. Findlay, contra.
    Niman, J.; Winch, J., and Marvin, J., concur.
    The plaintiff in error was convicted in the mayor’s court of the city of Elyria on a charge of selling ice cream in quantities less than a pint and not contained in sealed or locked cans, or other containers, approved by the board of health of the city of Elyria. On a review of the case on error in the court of common pleas, the judgment of the mayor’s court ivas affirmed. A reversal of the judgment of the court of common pleas, affirming the judgment of the mayor’s eoiirt, is sought in this proceeding.
   The offense of which the plaintiff in error was convicted was a violation of Section 8 of an order and regulation of the board of health of the city of Elyria, regulating the manufacture. and sale of ice cream within the said city. The section in question reads as follows:

“No person, by himself or by his servant, agent or employee, or as a servant, agent or employee of another person, partnership or corporation, shall sell or offer for sale on any of the highways or public grounds within the said city of Elyria, any ice cream, nut ice cream, fruit ice cream or French ice cream, except in quantities of at least one pint, and contained in sealed or locked cans or other containers, approved by the board of health of the said city of Elyria. ’ ’

The evidence contained in the bill of exceptions shows that the plaintiff in error sold ice cream cones upon the streets of the city of Elyria in quantities of less than one pint, which were not contained in sealed or locked cans or other containers approved by the board of health of said city. This fact is conceded and it is admitted that the conviction of the plaintiff in error must be sustained unless said Section 8 is repugnant to the Constitution, and therefore void.

It is contended on behalf of the plaintiff in error that Section 8, above quoted, is unconstitutional and void because it is an unnecessary and unreasonable regulation and not related or adapted to the ends sought to be attained. The power delegated to boards of health to provide measures for the protection of the public héalth is very broad. It is practically co-extensive with the necessities that may arise for the purpose indicated. The authority for the exercise of such power is referable to the police power inherent in the state. The only limitation on the exercise of the police power of the state, whether for the preservation of the public health, or for any other purpose, is stated in Stage v. Boone, 84 O. S., 346, as follows:

"To justify the state in thus interposing its authority in behalf of the public, it must appear, first, that the interests of the public generally, as distinguished from those of a particular class, require such interference; and second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. ’ ’

The purpose of Section 8 of the order and regulation of the board of health of the city of Elyria was undoubtedly the protection of the health of its inhabitants, and especially of its children, which might be endangered by the unsanitary conditions attending the sale of ice cream in the streets of the city, and on other public property, as well, as the danger of the contamination by flying dust incident to eating ice cream in the streets. This is a perfectly legitimate subject for the exercise by the board of health of its power, ■

Reference to the language of Section 8 discloses that two things are forbidden by it. First, the sale of ice cream in quantities of less than a pint; and, second, the sale of ice cream in any form except in sealed or locked cans or other containers approved by the board of health.

It seems clear that the second part of the section under consideration is a perfectly proper regulation and one against which no constitutional criticism can be aimed. It is appropriate to the purpose in view and is adapted to the end sought and there is nothing unreasonable in requiring those who wish to sell ice cream on the city streets and other public property to take the sanitary measures provided in the regulation to protect their ice cream from exposure to the dust and to prevent other undesirable conditions which might prevail in the absence of such a regulation. As we understand it, this is conceded and the attack directed against the prohibition of sales in quantities of less than one pint.

In our view of the case, the facts before us do not call for a decision on the validity of this particular part of Section 8. The two parts are separable and where such is the case that which is constitutional and valid can be upheld. The principle is the same in dealing with a regulation like this as that which has been repeatedly applied by the court in upholding that part of a statute which is not repugnant to the Constitution and rejecting the unconstitutional part where the two parts are not so inseparably connected in subject-matter and so related tp each other as to give rise to a presumption that a part would not have been enacted without the whole. Railroad v. Commissioner, 31 O. S., 338; Gibbons v. Catholic Institute, 34 O. S., 289.

Even, therefore, if that part of Section 8 dealing with the quantity of ice cream that may be sold in the streets or on public grounds of Elyria should be held void, that part dealing with the sale of the article in closed cans or retainers would stand as a valid regulation.

The facts show that the plaintiff in error sold ice cream cones that were not contained as required by the regulation, and regardless of the validity of the other part of Section 8, his conviction must be sustained.

The judgment of the court of common pleas is affirmed.


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    PORCHES COVERED BY BUILDING RESTRICTION.
    Circuit Court of Cuyahoga County.
    Rosa Haas v. Molly Strauss.
    Decided, January 23, 1912.

      Building Restrictions — A Porch is a Part of a Building• — Plaintiff Not Estopped from Enforcing Building Restriction Because of Trifling Violation of it by Herself and Neighbors.

    1. A porch, built upon a brick foundation, roofed and permanently attached to the whole width of the front of a house, is an integral part of tne building within the meaning of a building restriction in a deed providing that all buildings shall be erected not less than a certain distance back from the line of the street.
    2. The fact that plaintiff and other lot owners have' violated the building restrictions in an allotment by building porches nearer to the street than is permitted by such restrictions, will not, where such violations are slight, estop her from enjoining the construction by her neighbor of a porch of a different type from those theretofore built and which would seriously obstruct her easement of light and view.

      S. N. Weitz, for plaintiff.
    J. J. Sullivan and Sol. Edgeri, contra.
    Niman, J.; Winch, J., and Marvin, J., concur.
   It appears from the agreed statement of facts filed in this case, and the evidence, that the plaintiff is the owner of sub-lot No. 126 in Southern & Chamberlain’s allotment in the city of Cleveland, which sub-lot has a frontage of fifty feet on the north side of Hawthorne avenue. The defendant is the owner of sub-lot No. 125 in the same allotment on the same side of Hawthorne avenue and adjacent to plaintiff’s property on the east. That at the time Southern and Chamberlain allotted this property and sold lots therein, the following restriction was imposed upon all the lots:

“And as a further consideration of the following described property, no buildings are to be placed nearer to the street than twenty feet from the front of the lot line, ’ ’

That the defendant, at the time this action was started, had under way the construction of two buildings on her lot. the main portions of which were placed back from the lot line the 'distance required by said restriction, but the two porches of which, as originally planned, encroached upon the restricted portion of the lot; that these porches sought to be constructed by the defendant extended to a distance of aboiit eight feet into the restricted space, so that the outside line of the porch piers and the porches proper would be eleven feet two inches from the inside lot line; that the porches which the defendant was about to construct were to be of brick, attached to a part of the building proper, each being twenty feet in width and eight feet in depth, and extending from four feet below grade through to the roof, the roof on the porch being an extension of the roof of the building, and the piers to said porches being two feet by two feet. It appears further that the porches of numerous other houses on the same side of the street encroach somewhat upon the restricted part of the lots; that the plaintiff’s own porch stands,about 89-100 of a foot over the restricted area.

Since the buildings proper are placed twenty feet from the lot line and in conformity to the restriction, it becomes necessary to determine whether or not the building of the porches upon the restricted space is a violation of the restriction. In Ogontz Land & Improvement Co. v. Johnson, 168 Pa. St., 178, this question was before the court, and it was there held:

“A porch built upon a brick foundation, roofed and permanently attached to the whole width of the front of a house and projecting to within seven feet of the fence line, is an integral part of the building within the meaning of a building restriction in a deed providing that all buildings upon said lots shall be erected not less than fifteen feet back from the fence line. Such a structure is a violation of the building restriction, notwithstanding the fact that it is open at the sides and front. ’ ’

Jones on the Law of Real Property and Conveyancing, Volume 1, Section 760, states the law in this language:

“The piazza or porch is ordinarily a constituent part of the building, and is within the terms of a restriction which prohibits Ihe placing of a building less than a certain number of feet from the line of a street. ’ ’

In Bader v. Walther et al, 5 N.P.(N.S.), 497, the syllabus is as follows:

“1. The word ‘house’ as used in a building restriction, means the building-, and includes a porch which is an integral and substantial part of it.
‘ ‘ 2. An injunction will lie against the construction of a house by an adjoining property owner when the enjoyment of his neighbor’s property is substantially affected thereby as to view, light and air, although his neighbor may have submitted to encroachments upon portions of the street remote from him and not affecting his enjoyment, in violation of a general restriction.
‘ ‘ 3. One buying land for the purpose of building a house upon it is held to have fully contemplated, not only the restrictions in his deed, but such surrounding conditions as were obvious and material. ’ ’

It seems clear that the porches which the defendant was about to erect on her lot, as shown by the plans in evidence, were a substantial and integral part of the buildings, and that their erection as contemplated would constitute a violation of the restriction. It remains, therefore, to be considered whether the restriction imposed upon the lots of the plaintiff and defendant and on the other lots in this allotment, .has been broken to such an extent that the plaintiff is prevented from insisting on an observance of such restriction by defendant.

In McGuire v. Caskey, 62 O. S., 419, it was held:

“Where neighboring proprietors of urban lots are bound by covenant in a deed under which both held not to erect buildings within a prescribed distance from the street upon which the lots abut, either is entitled to an injunction to enforce the observance of the covenant by the other.
“That relief will not be denied to a plaintiff because he has erected a porch in front of his residence and within the prescribed distance from the street, when the purpose of the covenant is to secure and preserve the desirability of the street .for private residence, and the porch does not substantially interfere with the easements of neighboring proprietors for light, air and view. ’ ’

In Brown v. Huber, 80 O. S., 182, part 2 of the syllabus states the law in the following language:

“Where such covenant or restriction is still of substantial value to the dominant lot, notwithstanding the changed condition of the neighborhood in which said lot is situated, a court of equity will restrain its violation.”

Pomeroy’s Equity Jurisprudence, Third Edition, Volume 5, Section 280, contains this statement of the law:

“An injunction will not be granted if the plaintiff .has acted so as to make its issuance inequitable. A person who seeks to enforce such a covenant must permit no such breach of the stipulation as will frustrate all the benefit that would otherwise accrue to the other parties to the agreement. One who stands by and acquiesces in repeated violations by the defendant and others, can not be heard to deny the right; and where a party has violated the restrictions in his own deed, he can not enjoin violations by others, even though the covenant violated by the plaintiff is entirely different from that disregarded by the defendant; but where the violations of the plaintiff are not substantial, and violations by other parties have been in places remote from plaintiff, an injunction will not be denied. ’

The encroachment of the plaintiff’s own porch upon the restricted space is very slight. The violations of the restriction by the other lot owners on the same side of the street, according to the evidence, are not such as to materially interfere with the enjoyment of the plaintiff’s property, and do not 'offer any substantial obstruction to the easement of neighboring proprietors for light, air and view. The most pronounced violation is that of the Wertheimer property, which is a distance of 295 feet from the property of the plaintiff, and does not, therefore, materially injure the plaintiff in the use and enjoyment of her property. None of the porches are more than one story in height. The porches which the defendant desires to build are two stories in height, with large pillars and roofs, which, on the original plans, were an extension and a part of the main buildings and which, even according to the modified plans, are still of such a character that the porches, if completed, will seriously interfere with the plaintiff’s view, and with her easement for light and air. The proposed violation of the restriction by the defendant is of a different kind than any that exists on any other portion of that side of the street. We think there is no such equity arising against the plaintiff from the fact that her house and the houses of others have been located and built in the manner described as to render it unjust for her to seek relief by injunction. Her enjoyment of her property has not heretofore been substantially affected by the violations of the restrictions that have occurred on that side of the street. The restriction is still of value to her and should be enforced, to the extent that the court deems equitable to both parties, unless she has been guilty of such laches in seeking relief as will now estop her from asking intervention of a court of equity. We find that she has been guilty of no such laches. The construction of the porches has proceeded only so far as putting in the foundations to the brick work and stone capping on the first story, and it appears that a portion of this work was done after the defendant was notified of the filing of this action. The plaintiff acted with all reasonable dispatch in seeking relief, and is not estopped from maintaining her action. • The enforcement of building restrictions in deeds is somewhat a matter of discretion with the courts (Russel v. Harpel, 20 C. C., 127), and in the exercise of this discretion, the plaintiff is granted an injunction enjoining the defendant from building the porches according to her present plans.

But the defendant will be permitted to build her porches in the position planned so far as the location within the restricted portion of the lot is concerned, to the height of one story, and will be permitted to place floors over the tops of these porches, but no roofs, and she will be required to use pillars of moderate size, and to leave the sides and fronts of the porches open, except as to the placing of railings around the floors of the porches.

A journal entry may be prepared and submitted to the court, together with plans for the porches as indicated, for the approval of the court, which plans will be made a part of the journal entry in the ease.


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    DETERMINATION AS TO THE LOWEST RESPONSIBLE BID.
    Circuit Court of Cuyahoga County.
    Cyrus Locher v. F. H. Haserot et al.
    Decided, November 10, 1907.

      Public Contracts — Sample Need Not Conform to Specifications — When Contract Must be Awarded Lowest Bidder.

    1. Where a public contract is let to the lowest bidder and the specifications on file are made a part of the contract, it is immaterial that a sample submitted does not conform to specifications.
    2. Where a statute governing the awarding of a public contract provides that the contract shall be let to the lowest responsible bidder, and the lowest bidder has submitted two samples with a different price upon each sample, but both of which are lower than the prices submitted by any other bidder, the public officers may award the contract to the lowest bidder, but not for the goods made according to the more expensive sample.

      Gott & Locher, for plaintiff.

      Stearns, Chamberlain & Royon and E. K. Wilcox, contra.
    Marvin, J.; Winch, J., and Niman, J., concur.
    This suit is brought by Locher, as a tax-payer, to have the board of education of the city of Cleveland enjoined from carrying out a contract with the Superior Seating Company, a corporation, for the furnishing of 1,200 chairs for use in furnishing the West Technical High School of said city. The contract resulted from the acceptance by the school board of a bid made for the furnishing of these chairs by the Superior Seating Company. This bid was made in answer to an advertisement for bids made by the school board for such chairs. This advertisement called for bids to be made upon specifications on file with the director of schools of said city, the bids to be opened at 32 o’clock noon on December 4, 1911.
   A number of bids were made, including two bids by the Superior Seating Company. One of these bids proposed to furnish the chairs in accordance with the specifications at $1.33 each; the other at $1.37 each. All other bids were for a greater amount than that named in either of the bids of the Superior Seating Company. The board awarded the contract upon the bid at $1.37 per chair.

The statute regulating contracts of this sort is Section 7623, General Code. This section is long, and the manner of procedure is divided into subdivisions, the sixth of which reads:

“None but the lowest responsible bid shall be accepted. The board, in its discretion, may reject all the bids or accept any bid both for labor and material for such improvement or repair which is the lowest in the aggregate.”

The provisions of the specifications are these:

“Backs and seats to be of five-ply veneer, surface of birch, curved so as to form comfortable seats: edges to be nicely finished. All wood work to be smooth, and to be stained a dark brown shade, to be furnished by school architect F. S. Barnum, finished with a heavy body of durable varnish, dull finish. And a sample chair finished as specified must be furnished with the bid.”

To this was added, before the bids were made and as a part of the specifications on file with the director of schools, an alternative for plain oak veneer finished with dull varnish, sample to be submitted; also for birch with dark weathered oak stain and dull finish.

On the part of the plaintiff it is urged, first, that the Superior Seating Company is a responsible bidder. This is conceded by the defendants. Of course it must be conceded, because the- defendants contracted with this same bidder. The price at which the chairs were to be furnished under the accepted bid was certainly not the smallest amount of money for which this bidder proposed to' furnish chairs which should in all respects correspond with the specifications, but it is said that this does not determine certainly whether the bid at $1.33 was the lowest bid, notwithstanding it proposes to furnish the chairs for less money than the accepted bid. “Lowest,” as applied to money, ordinarily means “smallest” amount, and if the statute uses the word in this sense, then the bid accepted was not the lowest bid. If the word “lowest,” as used in this statute, has its ordinary meaning, it is plain that the defendants, acting as a board, violated the statute in accepting the bid at $1.37. But it is said that the statute did not take from the board the discretion to determine what bid under all the circumstances was the lowest, and that it might determine that a bid for an amount greater than the smallest amount of money was the lowest bid. As already said, this would be a departure from the meaning of the word ‘ ‘ lowest ’ ’ as used in common parlance. That the board had the discretion to determine whether a bidder was responsible, so that if a contract was entered into it could be relied upon to furnish the chairs which should be in exact accord in every particular with the specifications, can not be doubted. It exercised that discretion and determined that the Superior Seating Company, which made the bid at $1.33, was responsible in the sense indicated.

The bidder furnished a sample under each bid. The samples were not entirely alike, nor was either sample in exact accordance with the specifications, nor was it expected they would be, because the specifications would require the manufacture of chairs not such as are kept in stock by the manufacturer. This is clearly shown, and, indeed, is conceded.

There was a difference in these samples, the chief being in the castings, which were a part of the chairs. The castings on neither sample were of the weight provided for in the specifications, but this would not necessarily require the rejection of either of the bids. As is said in the case of Many v. The City of Cleveland, 19 C. C., 58, speaking of a bid for lamps to be furnished to the city of Cleveland and of a sample furnished with the bid:

‘ ‘ That lamp did not in all its details correspond with the specifications. The evidence shows that if the contract is entered into, it is not expected that exactly such a lamp as that which was present at the bidding and furnished by Daykin (the successful bidder) is to be used, but the contract which will be entered into, if this injunction is not allowed, is in evidence before us, and that contract has as a part of it all the specifications which are on file in the director’s office. So that if this injunction is allowed, it will prohibit the city from entering into a contract in which the party with whom it is to contract agreed to furnish everything which the specifications require.”

From this it will be seen that the fact alone that the sample furnished does not fully meet the specifications, will not justify the rejection of the bid. But it is said that the sample accompanying the bid at $1.33 had a different finish from that which accompanied the $1.37 bid; that the special object in having a sample furnished was that the board might determine whether the finish of the chairs furnished under a bid, if it should be accepted, would be satisfactory to the board. The language of the specifications as to finish is this :

“All wood work to be smooth, and to be stained a dark brown shade furnished by school architect F. S. Barnum and finished with a heavy body of durable varnish, dull finish, and a sample chair finished as specified must be furnished with the bid.”

And then in the added specifications the word “finish” is used in this language:

■ “To include an alternative for plain oak veneer finish with dull varnish, sample to be "submitted; also for birch with a dark weathered oak stain and dull finish. ’ ’

On the part of the plaintiff it is urged that the word “finish,” as here used, plainly has reference to the wood work of the chair, because it says “it is to be finished with a heavy body of durable varnish, dull finish, and a sample chair finished as specified must be furnished, ’ ’ etc.; and again in the added specification, where “it is to be plain oak veneer finish with dull varnish, sample to be submitted; also for birch with a dark weathered oak stain and dull finish.”

It is not contended that so far as the finishing of the wood work of the chairs is concerned there is any material difference in the samples, but the sample furnished with the $1.33 bid shows a different construction of the metal part of the construction in this, that whereas the metal shown in the $1.37 sample is solid without openings or beads, that furnished with the $1.33 sample has openings and beads. And it is urged that this may properly be considered as a part of the finish of the chair as that term is used in the specifications.

This contention is not sound. The word “finish,” as used both in the first specifications and in the added specifications, clearly refers to the finish of the woodwork, the polishing, veneering and varnishing, and perhaps the outer coat of japan or varnish to be put upon the metal work, and in this respect the two samples are alike. If the school board desired to have the metal of a particular kind and form, it could easily have said so in its specifications. It saw fit to make its specifications without so saying.

The statute under consideration differs from some of the statutes which refer to the letting of public contracts by competitive bidding. Those statutes provide that the contract shall be let to the party who makes the lowest and best bid. Under such statutes it has been held by this court, and by the Supreme Court of this state, and by courts in other states, that the board or officers whose duty it is to let the contracts are not bound to let it to the responsible bidder who offers to furnish the article for the smallest amount of money, but the discretion is left to the public authorities to determine whether a bid is, taking into account all matters connected with the question of whether the thing proposed to be furnished is by him whose bid requires a greater amount of money to be paid, and is on the whole the one which economy dictates as that which will be best for the public.

We think that the discretion left with the board under the statute now under consideration is less than that left where the statute requires the lowest and best bid to be accepted, and we think, to secure to the public the benefit of the competitive bidding provided for in the statute, the discretion left with the board is the discretion to determine whether he who offers to do for the least amount of money is a responsible bidder, so that he may be depended upon to furnish that which corresponds in all respects with the specifications, and that the board has not the discretion to say that because a bidder will furnish something better than the specifications require at a higher price than a responsible bidder will furnish that which is exactly what the specifications require, is the lowest because the best bidder.

As said in Beaver & Butt v. The Institute for the Blind, 19 O. S., 97 :

“The construction put upon a statute must not be such as to nullify or reverse the evident policy of the statute and to render possible and easy the exercise of such favoritism by the trustees toward particular parties as it is the obvious policy and. intention of the statute to render impossible.-”

In 6 Nisi Prius, page 452, it is said:

" "Where by the terms of a statute the contract for public improvements is to be awarded to the person who offers to furnish the materials and perform the labor required at the lowest price and gives good and sufficient bond to the acceptance of the particular public officers having in charge the work for the faithful performance of the contract, the statute is mandatory, and no discretion as to the awarding of the contract is vested in said officers. ’ ’

See also Boren et al v. Darke County, 21 O. S., 312. The third paragraph of the syllabus reads:

“Where a bidder includes in his proposal with the labor and materials specified in the advertisement, for which proposals are invited, other labor and materials not therein called for, and the price proposed is an aggregate sum for the whole, under said act it can be regarded only as a proposal for the labor and material advertised for; and if such price is not lower than that of another bidder whose proposal embraces only the labor and materials called for in the advertisement, he is not entitled to .have the contract awarded to him, if the other bidder otherwise complies with the act.”

It is urged further on the part of the defendant here that the amount involved is too trivial for the court to interfere. This contention Ave do not regard as sound. The amount involved upon the entire award would be $48. This, as compared with the Avhole contract, is not a large amount, but the principle here involved is such that we regard the precedent as a dangerous one to allow this contract to be carried out. The bid accepted was not that which proposed to furnish the chairs for the least amount of money. There was another bid by this same responsible bidder to furnish the chairs in exact accord with the specifications for a less amount of money and therefore it was a loAver bid, and there was nothing on the samples furnished which could be construed as relieving the bidder, if the contract was awarded to him, from complying with all the terms of the specifications. ■

We reach the result, therefore, that the injunction here prayed for must be allowed.


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    EVIDENCE AS TO RECEIVING STOLEN PROPERTY.
    Circuit Court of Cuyahoga County.
    Morris Krause v. State of Ohio.
    Decided, November 18, 1907.

      Receiving Stolen Property — No Error in Receiving Evidence of Other Lilce Offenses at About the Same Time.

    A conviction for receiving stolen property will not be set aside because the evidence received at the trial tended to prove the receipt of several other similar pieces of stolen property at about the same time as those for the receiving of which the defendant was on trial, without making it certain which of the several pieces were the ones upon which the prosecution was based.

      F. P. Wdither, for plaintiff.

      S. V. McMahon, Prosecutiijg' Attorney, contra.
    Marvin, J.; Winch, J., and Henry, J., concur.
   Morris Krause was prosecuted before a police court of the city of Cleveland on an affidavit charging him- with having received, on or about the 6th day of December, 1906, four brass castings, the property of the New York, Chicago & St. Louis Railway Company, which property had been stolen from said company, and that Krause received it, knowing it to be stolen. The trial took place on the 18th day of January, 1907. Complaint is made that the court permitted evidence on the part of the boys from whom it is claimed Krause bought the eastings; of quite a number of sales of stolen castings to him, Krause; that these various sales were not very far removed in date from the one charged in the affidavit against Krause; that the court allowed a verdict of guilty to stand under this evidence, whereas, it is said, that the evidence is such that it will be impossible, if Krause is ever prosecuted again for receiving any of the brass. castings which he purchased from these boys, to know whether he is being prosecuted for the same offense upon which he has already been found guilty. The real difficulty in the case seems to be that the evidence tended to show that Krause had been guilty of receiving stolen brasses, knowing them to be stolen, on several occasions near the time charged in the affidavit in this ease, and so near to the time as that proof of other of these purchases might have been sufficient to convict of the offense charged in the affidavit; and it is said further, that there is one occasion when the evidence shows that Krause purchased brasses from these boys, which brasses were the property of the Erie Railroad Company, or at least taken from the yards of that company. It is urged further that the evidence does not show that any of the brasses purchased by Krause from these boys was the property of the New York, Chicago & St. Louis Railway Company. As to this last claim it may be said that the testimony is, the brasses were taken from the premises without any further showing than that. We think the jury might be justified in saying that it was the property of that company. Property in the keeping of one may properly be assumed to be the property of ■ such keeper in the absence of any evidence tending to discredit or disprove such ownership. The evidence in the case is that quite a large number of these pieces of brass were taken by the boys who testified, and who say they sold them to Krause, from the yards of the New York, Chicago & St. Louis Railway Company, near the time charged in the affidavit, and that at or about the time charged in the affidavit, they sold to Krause such brasses. They say that on one of these occasions they sold to Krause either four or five pieces of these brasses, which they got from the New York, Chicago & St. Louis Railway Company’s yards. Evidence of various sales might have been properly permitted as tending to show knowledge on the part of Krause that the goods were stolen, can not be doubted under the authority of Tarbox v. State of Ohio, 38 Ohio St., 581. That a conviction could be had under the affidavit for the offense charged, though the time was not shown to be the time charged in the affidavit, can not be doubted, because it is expressly provided in Section 7215, Revised Statutes, that:

“No indictment shall be deemed-invalid, nor shall the trial, judgment or other proceeding be stayed, arrested or in any manner affected * * * for omitting to state the time at which the offense was committed, nor stating the time improperly.”

If then, the evidence here justified the finding that Krause had received stolen brasses, the property of New York, Chicago & St. Louis Railway Company, knowing them to be stolen, at a time so near to that charged’in the affidavit, the judgment can not be reversed because the evidence tended to show that he was guilty of like offenses near to the same time. We find no error in the record and the judgment is affirmed.