author: WILSON, J.

text:
    RAILROADS — INTERLOCKING SWITCHES.
    [Franklin (2nd) Circuit Court,
    February 1, 1904.]
    Sullivan, Summers and Wilson, JJ.
    Toledo & Ohio Central Ry. Co. v. Charles E. Hydell.
    t. Leverman at Crossing is Sole Agent op Railroad Using Crossing at Particular Time.
    Railroad companies whose tracks cross each other .at grade may enter into a contract whereby one company shall maintain, at its sole expense, a competent leverman to operate a system of interlocking installed at the point of crossing under authority of Secs. 247 and 3333 Rev. Stat., subject, however, to the limitation that neither company can delegate to the other the performance of its statutory duty to third persons and the public at such crossing, or shift its responsibility to them for damages resulting from the negligence of the leverman in operating the interlockers. Hence, a leverman employed by one of such companies is, so far as third persons and the public are concerned, the agent of the particular company which may be using the crossing at any particular time, which company, is alone liable for the consequences resulting from the negligent operation of the interlocker at the time it is so using the crossing, although, as between the companies themselves, the leverman may only be the agent of the other company.

      2. Proper Party Defendant for Breach of Statutory Duty.
    Where a railroad company has neglected to perform a statutory duty owing to a third person and which it cannot delegate, it alone can be sued for the consequences arising from its nonperformance, and not another company which may have contracted with such company to assume its performance; a fortiori, where plaintiff is not in privity with such contract.
    Error to court of common pleas of Franklin county.
    C. T. Lewis .and Barger & Barger, for plaintiff in error:
    The persons operating the interlocking system at the time of this accident, both by contract and by operation of law, when signalling or performing any duty for The Pittsburg, C. C. & St. L. Ry. Q>., were the servants and agents of that company. Cleveland, C. C. & I. Ry. Co. v. Schneider, 45 Ohio St. 678 [17 N. E. Rep. 321] ; Mills v. Crange A. & R. Co. 2 McArthur 314; Wood, Mas. & Serv. Sec. 7; Patterson, Railway Acc. Law 138, 139; Wood, Railroads 1335; Wabash, St. L. & P. Ry. Co.. v. Wolff, 13 Ill. App. 437; Black’s Law & Practice in Accident Cases Sec-13;]; Wabash, St. L. & Pac. Ry. Co. v. Peyton, 106 Ill. 63-1 [46 Am. Rep. 705].
    One bound to perform a duty cannot relieve himself from liability from its nonperformance, by a contract he may make for its performance by another. Shearman & Redfield, Negligence Sec. lo; Story, Agency Sec. 543; Webb v. Railway Co. 5? Me. 117, 128.
    The towerman at the T. & O. C. and P. C. C. crossing was pro hac vice the servant of The P. C. C. & St. L. Ry. Co. and that company is liable for his negligence. Shearman & Redfield, Negligence Sec. 73; Oil Creek & A. R. Ry. Co. v. Kleighorn, 74 Pa. St. 316; Vary v. Railway Co. 42 .Iowa 246; Laughler v. Pointer, 5 Bam. & Cr. 539; Wabash, St. L- & P.. Ry. Co. v. Wolff, 13 Ill. App. 437; Wabash, St. L. & P. Ry. Co. v. Pey-ton, 106 Ill. 534 [46 Am. Rep. 705].
    The duty was owing by the Pan Handle company to maintain a watchman at the crossing, or an interlocker, as well as The T. & O. C. Ry. Co. This duty could not be delegated to any other person or company, and if the Pan Plandle saw fit to adopt or use a man in the general employment or special employment of another company, to perform this duty1' that devolved upon it, then it would be adopting such employe, .and whilst so employed he would become legally the employe of the Pan Handle company. Railway Co. v. Snyder, 45 Ohio St. 678 [17 N. E. Rep. 321],
    Even if it is assumed that the towermen were in the general employment of the T. & O. G, and that the Pan Handle had nothing whatever to do, either with their employment, the payment of wages, or the power to discharge them, still if that company expected these servants to perform a duty devolving upon them, they would become their employes exactly the same as if they had rented them from the general employer and were using them for the time being. 2 Thompson, Negligence 893; Kimball v. Cushman, 103 Mass. 194 [4 Am. Rep. 528] ; Wood v. Cobb, 95 Mass. (13 Allen) 58; Taylor v. Railway Co. 45 Cal. 323: Baltimore & O. Ry. Co. v. Walker; 45 Ohio St. 577 [.16 N. E. Rep. -1-75],
    There are numerous cases in which employes in the general service, of one company, were held to be the employes of another company, if at the time they were in the service of that company, or were performing for that company a duty which devolved upon it, viz.: Murry v. Currie, 6 I.,aw Rep. 22; Powell v. Construction Co. 88 Tenn. 692 [13 S. W. Rep. 691; 17 Am. St. Rep. 925].
    In the same case the court, referring to the cases of Rourke v. Colliery Co. 2 Law Rep. 208; Missouri Pac. Ry. Co. v. Jones, 75 Tex. 151 [12 S. W. Rep. 912; 16 Am. St. Rep. 879] ; Johnson v. Boston, 118 Mass. 144; Vary v. Railway Co. 42 Iowa 246; Ewan v. Lippincott, 47 N. J. Law 192 [54 Am. Rep. 148] ; Wabash, St. L. & P. Ry. Co v. Peyton, 106 Ill. 534 [46 Am. Rep. 705] ; Byrne v. Railway Co. 61 Fed. Rep. 605 [9 C. C. A. 666] ; Clark v. Geer, 86 Fed. Rep. 447 [32 C. C. A. 295; 57 U. S. App. 473]; Taylor v. Railway Co. 45 Cal. 323, 324.
    The towermeu were fellow servants of the plaintiff, and if the injury to the plaintiff was occasioned by their negligence, the plaintiff would be unable to recover of the Pan Handle company or of the defendant. Manville v. Railway Co. 11 Ohio St. 417.
    If the defendant has any liability in this case it can only be under the doctrine as has been held by this court in the case on the preliminary questions, that the plaintiff would have the right to sue both • or either of said companies; and on the theory that they were joint tort feasors, and that as such the}'’ were each liable to- the plaintiff. Such being the case, and the plaintiff having received satisfaction from the Pan Handle company, he thereby discharges the defendant. Pittsburg, C. C. & St. L. Ry. Co. v. Cox, 55 Ohio St. 497 [45 N. E. Rep. 641; 35 L. R. A. 507] ; Ellis v. Bitzer, 2 Ohio S9 [15 Am. Dec. 534],
    The same doctrine is clearly established in the case of Seither v. Traction Co. 125 Pa. St. 397 [17 Atl. Rep. 338; 4 L. R. A. 54; 11 Am. St. Rep. 905]; McCabe v. Railway Co. 23 Ky. Law 2328 [66 S. W. Rep. 1054] ; Raleigh (City) v. Railway Co. 129 N. C. 265 [40 S. E. Rep. 2] ; Ohio & M. Ry. Co. v. Dunbar, 20 Ill. 623 [71 Am. Dec. 291] ; Harden v. Railway Co. 129 N. C. 354 [40 S. E. Rep. 184; 55 L. R. A. 784; S5 Am. St. Rep. 747] ; Chicago & W. I. Ry. Co. v. Doan, 195 Ill. 163 ■[62 N. E. Rep: 826] ; Pennsylvania Co. v..Ellett, 132 Ill. 654 [24 N. E. Rep. 559] ; Louisville & N. Ry. Co. v. Breedens, 23 Ky. Law 1021 [64 S. W. Rep 667] ; Caruthers v. Railway Co. 59 Kan. 629 [54 Pac. Rep. 673; 44 L. R. A. 737] ; Perry v. Railway Co. 129 N. C. 333 [40 S. E. Rep. 191] ; Baltimore & Ohio Ry. Co. v. Charvat, 94 Md. 569 [51 Atl. Rep. 413] ; Lee v. Railway Co. 116 Cal. 97 [47 Pac. Rep. 932; 58 Am. St. Rep. 140] ; Perry v. Railway Co. 128 N. C. 471 [39 S. E. Rep. 27] ; Central of Georgia Ry. Co. v. Wood, 129 Ala. 483 [29 So. Rep. 775] ; Suburban Ry. Co. v. Balkwell, 94 Ill. App. 454.
    Assumed risk. Texas & Pac. Ry. Co. v. McLane, 24 Tex. Civ. App. 321 [62 S. W. Rep. 565] ; Baltimore & O. S. W. Ry. Co. v. Peterson, 156 Ind. 364 [59 N. E. Rep. 1044] ; Ortlip v. Traction Co. 198 Pa. St. •586 [48 Atl. Rep. 497] ; Hurst v. Railway Co. 163 Mo. 309 [63 S. W. Rep. 695; 85 Am. St. Rep. 539].
    The servant,- in order to recover for defects in the appliances of the business, is called upon to show that the appliances were defective; that the master had notice thereof or knowledge, or ought to have had itthat the servant did not know of the defect and had not equal means of knowing with the master. Coal & Car Co. v. Norman, 49 Ohio St. 598, 607 [32 N. E. Rep. 857] ; Coal Co. v. Estievenard, 53 Ohio St. 43, 44 [40 N. E. Rep. 725] ; Hesse v. Railway Co. 58 Ohio St. 167 [50 N. E. Rep. 354]; Wellston Coal Co. v. Smith, 65 Ohio St. 70, 82 [61 N. E. Rep. 143; 87 Am. St. Rep. 547] ; Southern Pac. Co. v. Yeargin, 109 Fed. Rep. 436 [48 C. C. A. 497]; Ortlip v. Traction Co. 9 Pa. Dist. Rep. 291; see also, Altha & Illingworth Co. v. Costello, 63 N. J. Law 27 [42 Atl. Rep. 766] ; Am. Dig. 1899-B, page 2966, Sec. 108; Bailey, Master’s Liability for Injuries to Servant 185; Railway Co. v. Spangler, 44 Ohio St. 471 [8 N. E. Rep. 467; 58 Am. Rep. 833],
    Negligence of master for failure to perform duty. Mattise v. Ice Mfg. Co. 46 La. Ann. 1535 [16 So. Rep. 400; 49 Am. St. Rep. 356] : Missouri, K. & T Ry. Co. v. Hamilton, 30 S. W. Rep. 679 (Tex. Civ. App.) ; Promer v. Railway Co. 90 Wis. 215 [63 N. W. Rep. 90; 48 Am. St. Rep. 905] ; International & G. N. Ry. Co. v. Cook, 16 Tex. Civ. App. 386 [41 S. W. Rep. 665] ; Texas & Pac. Ry. Co. v. Johnson, 89 Tex. 519 [35 S. W. Rep. 1042]; Jones v. Shaw, 16 Tex. Civ. App. 386 [41 S. W. Rep. 690] ; Lloyd v. Hanes, 126 N. C. 359 [35 S. E. Rep. 611] ; Union Stock Yards Co. v. Goodwin, 57 Neb. 138 [77 N. W. Rep. 357]; Pittsburgh Bridge Co. v. Walker, 170 Ill. 550 [48 N. E. Rep. .915] Wharton, Negligence Sec. 206; Texas & Pac. Ry. Co. v. Eberhart, 91 Tex. 321 [43 S. W. Rep. 510] ; George v. Clark, 85 Fed. Rep. 608 [29 C. C. A. 374; 56 U. S. App. 505] ; Wabash Ry. Co. v. Heeter, 7 Circ. Dec. 485 (14 R. 257, 267).
    It is not competent for the railroad company to stipulate with its employes at the time and as a part of their contract of employment that liability for negligence shall not attach to it. Railway Co. v. Spangler, 44 Ohio St. 471 [8 N. E. Rep. 467; 58 Am. Rep. 833], Also see the following cases: Roesner v. Hermann, 8 Fed. Rep. 782; Western etc. Ry. ■Co. v. Bishop, 50 Ga. 465; Kansas Pac. Ry. Co. v. Peavey, 29 Kan. 169 [44 Am. Rep. 630] ; Johnson v. Railway Co. 86 Va. 975 [11 S. E. Rep. . 829] ; Louisville & N. Ry. Co. v. Orr, 91 Ala. 548 [8 So. Rep. 360] ; Hissong v. Railway Co. 91 Ala. 514 [8 So. Rep. 776] ; 2 Thompson, Negligence 1025; 1 Cent. Law J. 465; Arnold v. Railway Co. 83 Ill. 273; Jacksonville S. E. Ry. Co. v. Southworth, 135 Ill. 250 [25 N. E. Rep. 1093] ; Purdy v. Railway Co. 125 N. Y. 209 [26 N. E. Rep. 255; 21 Am. St. Rep. 738]; Maney v. Railway Co. 49 Ill. App. 105; Runt v. Harring, 2 Mise. 105 [2I N. Y." Supp. 244]; James v. Hendree, 34 Ala. 488; Pullman Palace Car Co. v. Laack, 143 Ill. 242, 256 [32 N. E. Rep. 285; 18 L. R. A. 215] ; Capper v. Railway Co. 103 Ind. 305 [2 N. E. Rep. 749]; Lindvall v. Woods, 41 Minn. 213 [42 N. W. Rep. 1020; 4 L. R. A. 793].
    An act or duty which a master is bound to perform for the safety and protection of his servant cannot be delegated so as to exonerate him from liability. Fuller v. Jewett, 80 N. Y. 46 ; Plannibal & St. J. Ry. Co. v. Fox, 31 Kan. 586 [3 Pac. Rep. 320] ; Atchison T. & S. F. Ry. Co. v. Moore, 29 Kan. 632; Daves v. Railway 'Co. 98 Cal. 19 [32 Pac. Rep. 708; 35 Am. St. Rep. 133] ; Pennsylvania Co. v. Whitcomb, 111 Ind. 212 [12 N. E. Rep. 380] ; Mobile & M. Ry. Co. v. Smith, 59 Ala. 245, 246 ; Miller v. Southern Pac. Co. 20 Ore. 285 [26 Pac. Rep. 70]; Moon v. Railway Co. 78 Va. 745 [49 Am. Rep. 401] ; Corcoran v. Holbrook, 59 N. Y. 517, 519 [17 Am. Rep. 369].
    Risks that employe assumes. Baxter v. Roberts, 44 Cal. 187 [13 Am. Rep. 160] ; Patterson v. Railway Co. 76 Pa. St. 389, 390 [18 Am. Rep. 412] ; Drymala v. Thompson, 26 Minn. 40 [1 N. W. Rep. 255],
    Nash, Lentz, Addison & Fritter, for defendant in error,
   WILSON, J.

On January 4, 1901, Charles E. Hydell, who was at that time in the employ of The P. C. C. & St. L. Ry. Company as a brakesman, was injured by the derailment of a freight train on that road, and on which he was serving, through the negligence of a leverman who was operating the interlocker at Mound Station, six miles west of Columbus, where the T. & O. C. railroad crosses the Pennsylvania line at grade. The' crossing and interlocker were maintained and operated by -the T. & O. C. Company under a contract, for that purpose entered into with the Pennsylvania company, • in consideration of the right to cross the tracks of that road at grade.

Hydell filed his petition in the court of common pleas against the T. & O. C. company, setting out the contract between it and the Pennsylvania company under which the interlocker was being operated at the time of the -accident, the negligence of the leverman, and the extent of his injuries.

The defendant demurred to the petition "for defect of parties defendant, and that it did not state a cause of action against the T. & O. C. company. The demurrer was overruled, and the defendant answered in the way of a general denial, and with an affirmative defense, alleging that the plaintiff had settled with and released the Pennsylvania company, which was liable, by accepting the benefits of its voluntary relief department, and had thereby released the T. & O. C. company, if it had been liable. The reply was, in effect, a general denial of the affirmative defense. Upon the trial of the case, the plaintiff obtained a verdict for $7,000. A motion for a new trial was overruled, and judgment was entered on the verdict. A bill of exceptions embodying all of the evidence was taken, and the case is brought into this court upon the whole record, seeking a reversal of the judgment.

At the time of the injury which is the predicate of the action, it was the duty of the railroad companies crossing at grade, under the statute, to see that the crossings were put in, and kept in repair; to' employ a watchman at the crossing; to stop all trains at a given distance, and to cross only upon a given signal, unless, under a further provision of the statute, they installed and maintained, to the satisfaction of the commissioner of railroads and telegraphs, a system of interlocking, or other works or fixtures, which would render it safe for engines or trains to pass over such crossing without stopping. Sections 247, 247g and 3333 Rev. Stat.

Such an interlocking system was installed at this crossing under the contract of date July 24, 1893, hereinbefore mentioned. By its terms the T. & O . C. company, among other things, agreed to “ erect and thereafter maintain and operate, at its own expense, at the place of said crossing, an interlocking system, which shall be satisfactory to the signal officer of the first party (The P. C. C. & St. L. Ry. Co.), and under the operation of which, trains of either party may be permitted, under the laws of the state, to cross over said crossing without coming to a stop.”

The trains of both roads were being controlled at the crossing by the interlocker operated under this contract by levermen 'employed and paid by the defendant company, and it was the negligence of one of these levermen that caused the injury.

The contention of the plaintiff below, defendant in error here, is that the leverman was the agent exclusively of the defendant company, and that, consequently, it alone is liable for the injury. This contention is supported, in argument, by a long line of authorities, the most persuasive of which are, perhaps the contracts for-tracking privileges, such as Smith v. Railway Co. 19 N. Y. 127 [75 Am. Dec. 305] ; Merrill v. Railway Co. 54 Vt. 200, and Hurlbut v. Railway Co. 130 Mo. 657 [31 S. W. Rep. 1051], These cases are, we think, distinguishable, however, in that it was the duty of the roads held to be liable, under'the contracts, as well as under their franchises, to keep the tracks, or the machinery, in repair, the failure to do which was the negligence complained of. Another class is the gates-at-crossing cases, of which Brow v. Railway Co. 157 Mass. 399 [32 N. E. Rep. 362], and Buchanan v. Railway Co. 75 Iowa 393 [39 N. W. Rep. 663], are examples; but these authorities, in so far as they would seem controlling, are in conflict with Cleveland, C. C. & 1. Ry. Co. v. Schneider, 45 Ohio St. 678 [17 N. E. Rep. 321].

The defendant’s claim is, first, that it and the Pennsylvania company, were without authority, in law, to enter into a contract, as against the public, and third parties, whereby one road should agree to perform the statutory duty of the .other, and that, therefore, the defendant could not, under such a contract become iiable for the mismanagement of the Pennsylvania company’s track and trains at this crossing.

In the case of Cleveland, C. C. & I. Ry. Co. v. Schneider, supra, it is said in the body of the opinion, page 696:

"It (the railway company) might by proper stipulation in'the agreement of the railroad company with which it contracted, require it to furnish competent.servants for the transaction of its business, and hold it responsible for any breach of the agreement; but it cannot by such contract, or by its failure to so contract, shift either the duty it owes to those using the street, or its responsibility to them.”

■ So here, it was competent to contract for the services of efficient levermen, subject to the limitation that the Pennsylvania company could not shift its responsibility, so far as the public and third parties were concerned.

But, secondly, it is contended that, notwithstanding this contract, and that, under it the defendant was employing and paying the lever-men, whose duty it was to operate, the interlocker, when it was SO’ operated for the benefit of the Pennsylvania company, in the conduct of its trains on its road, the leverman was, for that time and purpose, the agent of that company, or, at most, the joint agent, of both companies. So that, in either event, the -T. & O. C. company is not liable in this action. We do not find it necessary to review at length the numerous authorities cited by counsel to support this proposition. From a consideration of all the authorities it would seem there is no hard and fast rule which determines the question alike in all cases, but that the rule, in a marked degree, is made subservient to the facts in each case, and is fixed accordingly.

The trial court disposed of the case, and supported the judgment, upon the theory that it was lawful for the railroad companies to «enter into the contract for the employment, by one for the other, of competent agents to operate the interlocker; that the contract did not relieve the Pennsylvania company from liability for negligence toward the plaintiff; that the leverman, serving under the contract, was the agent of the T. & O. C. company, and not the agent of the Pennsylvania -company ; that the Pennsylvania company could, notwithstanding the contract, be held negligent because it had not kept a leverman in charge of the inter-locker; that the jury might find the plaintiff, by entering upon the employment with knowledge of the fact that it did not employ a leverman, waived, any right of action he might otherwise have had on account of such negligence; and for that reason, the plea of settlement with €iat company would be no defense in this action. To this effect the court charged the jury.

The case thus made out would appear to be illogical. If it be lawful for the Pennsylvania company to provide by contract with the T. & O. C. company for services of competent levermen to operate the interlocker, and such levermen do operate it, it is difficult to conceive how the company could still be negligent for failure to employ levermen. It had discharged that duty in a way the law permits, and in a way the court held it might do. To hold otherwise would be to deprive the contract, in that particular, of any legal status whatever, so far as the plaintiff is concerned; and the court would be driven to the support of the first contention of' the .plaintiff in error, that the contract, for the purpose of this case, was null and void.

If the Pennsylvania company could hot be found negligent in that respect, then the proposition that the leverman was the agent of the T. & O. C. company only, cannot stand with the proposition that the Pennsylvania company could not contract against liability for negligence. For not being negligent for failure to employ competent servants to operate the device, and not liable for the negligence of the servants of the T. & O. C. company when they are doing the work of the Pennsylvania company, at the crossing, it is permitted to operate that particular part of its road without any liability for negligence; and this would be effected by the contract.

When it is conceded that the . Pennsylvania company may contract with the other company for the employment of lever-men to operate the interlocker, but that it cannot so contract as to relieve itself against negligence in the performance of that statutory duty, it follows that it must be held liable for the negligence of the servants, who by its procurement, are performing that duty. They are pro hac vice its servants. It has adopted and accepted them as such for the performance of that particular duty, at that time and place, by the terms of the contract; by accepting and relying upon their services; by issuing instructions to them, as the statute requires. The leverman whose negligence caused the injury was at the time the agent <?f the Pennsylvania company. Cleveland, C. C. & I. Ry. Co. v. Schneider, supra; Wabash, St. L. & P. Ry. Co. v. Peyton, 106 Ill. 534, 535 [46 Am. Rep. 705],

The relation of the T. &. O. C. company to the operation of the Pennsylvania company’s trains at this crossing was wholly contractual. The plaintiff was not in privity with the contract and can have no rights under it. What are the rights of the respective railroad companies under this contract, with reference to the accident, we are not called upon to determine in this' action.

It follows that the demurrer to the petition, in the opinion of this court, should have been sustained. The action sounds in tort, and not in contract. It'was not necessary to the plaintiff’s case, to plead the terms of the contract between the railroad companies, but proper, for the purpose of raising the question, whose agent was the negligent lever-man under the facts pleaded, which is the controlling question in the case.

Having resolved this question against the plaintiff, it follows, also, that there was error in overruling the motion to direct a verdict for the defendant, which was interposed at the close of the plaintiff’s evidence; and error in the charge of the- court.

The request by the defendant, to charge, which was given by the court, is inconsistent with the general charge. It is therein stated to be the law, that as the Pennsylvania company could not contract away its responsibility, it would be responsible for the negligence of any one operating the system of interlocking for it, by contract. This is a correct statement of the law, but it cannot be reconciled with the general charge, which states that the leverman was the agent of the T. & O. C. company and not the agent of the Pennsylvania company for any purpose.

We find no other error upon the record. The judgment is reversed, and the cause remanded.


source: Caselaw Access Project

author: HULL, J.

license: Public Domain

text:
    LIFE INSURANCE — CONTRACTS.
    [Lucas (6th), Circuit Court,
    March. 10, 1904.]
    Parker, Hull and Haynes, JJ.
    Metropolitan Life Ins. Co. v. Florence A. Walton, Admx.
    1. Noncontestable Provision in Live Insurance Policy Limited to Occur-bences of Policy. ,
    A provision in a life insurance policy that “this policy shall he incontestable after two years, except for fraud or misstatement of age,” relates to the occurrences at the time of issuing the policy which otherwise would avoid it, and cannot be construed to mean that the policy after being in force two years, will be paid if insured, at the .time of his death, is in default for premiums beyond the period specified in the ' policy.
    2. PROVISIONS 01? INSURANCE POLICY CONSTRUED TOGETHER- -POLICY FORFEITED, When.
    Provisions in a policy of life insurance that “if any premium shall not be paid when due, this policy shall become void;” that such forfeiture • should in no respect be considered waived “by any act of grace by the company in acceptance of overdue premiums;” that “should this policy-become void in consequence of nonpayment of premiums, it may' be revived, if not more than fifty-two premiums are due, upon the payment of all arrears, and the presentation of evidence satisfactory to the company of the sound health of the insured;” and that “should the death of insured occur While any premiums are in arrears not exceeding four weeks, the company will, nevertheless, pay the policy subject to its conditions” (the latter being known as the “grace Xieriod”), should all be construed together. Hence, where assured’s wife, after the policy had, by its terms, become void for the nonpayment of premiums for a period of forty-six days, tendered four weeks’ premiums to the company, which if accepted would have brought the policy within the terms of the “grace” period, which tender, however, was refused because assured was then in very bad health, in such case the company may rightfully refuse to accept the overdue premiums so tendered and insist upon the forfeiture of the policy for the nonpayment of premiums; and the receipt by the local agent of overdue premiums on previous occasions within and after the “grace” period, but at all times inquiring as to assured’s condition of health, cannot be construed as a waiver of the clause in the policy requiring such satisfactory evidence of sound health where one is in default.
    ERROR to 'Lucas common pleas court.
    George B. Boone, for plaintiff in error.
    O. S. Brumback and A. T. Goorley, for defendant in error.
   HULL, J.

This action was brought in tlie court of common pleas by the defendant in error, who was the plaintiff below, upon a policy of life insurance issued by the insurance company, ttpon ber husband’s life, for the sum of $500. The dues upon this policy were sixty-two cents every Monday. Payment was refused by the insurance company upon the ground that the premiums were in default at the time of the death of Mr. Walton. Suit was brought to collect the amount of the policy. The case was tried to the court and jury and a verdict returned for the amount of the policy, with interest, and judgment was entered thereon. It is sought by this proceeding in error to reverse tbat judgment.

It is conceded tliat at the time of the death of Walton, the policy was in default for the payment of dues or premiums; but it is claimed that the company bad waived the payment of the premiums upon the exact day that they were due. The policy contained a provision, in substance, that if the premiums were not paid when due, that the policy should be void, and following tbat; this was also in the policy:

“And it is -agreed that tlie foregoing provision which avoids the policy in ease any premium shall be overdue, shall be considered in no respect waived by any act of grace by the company in acceptance of overdue premiums upon this or any other policy.”

There is a further provision on the face of the policy that agents are forbidden from receiving premiums more than four weeks after they are due. This provision is to be considered with another provision of the policy which is endorsed on the policy, to which I will refer later.

On the back of the policy under the head of “Privileges and Concessions to Policy Holders,” among-other things are these provisions:

“Incontestability. This policy shall be incontestable after two. years, except for fraud or misstatement of age.”
“Grace period. Should the death of the insured occur while any premiums are in arrears not exceeding four weeks, the company will, nevertheless, pay the policy, subject to its conditions.”
“Revival. Should this policy become void in consequence of nonpayment of premium, it may be revived, if not more than fifty-two premiums are due, upon the payment of all arrears, and the presentation of evidence, satisfactory to the company, of the sound health of the insured.”

The policy was taken out in June, 1899. Walton died June 9, 1902 — about three years after the policy was issued. During that time the insurance was paid a portion of the time by Walton’s wife, and a portion of the time by him. For about a year at the last, whatever premiums were paid, were paid by Mrs. Walton. They were in arrears for premiums several times. Sometimes premiums were due more than four weeks, which was called the graqe period; they ran over this time a few days occasionally, and the money was accepted and the policy revived, not more than fifty-two weeks having gone by. On May 23, 1902, the premiums were in arrears forty-six days, six Mondays having gone by, and some days over, and Mrs. Walton tendered to the agent the premium for four weeks; this left three weeks still unpaid, but within the grace period, as it is called; these premiums were refused by the agent; and on the ninth of June following, Mr. Walton died. The question submitted to the jury was whether there had been such acts on the part of the company as would lead a reasonably prudent person to believe that the company had waived the requirement that premiums should be paid on the Monday of each week. And a verdict was returned in favor of the plaintiff.

It is claimed that the judgment is wrong. It appears from the evidence that in April before Mr. Walton’s death, Mrs. Walton went to the office of the company and told the young man in charge that she could not afford to pay these premiums any longer; that they could see Mr. Walton and ascertain whether he would pay them (the insurance was on his life for her benefit) ; they were not living together, but had been separated for about a year. He was keeping a saloon or tending-bar in another part of the city. The next month, May 23, she had not paid anything more, and being in arrears at the time the talk occurred at the office in April, she tendered to the company four weeks’ premiums. Before accepting these premiums the agent undertook to ascertain the health of Mr. Walton; he went to the saloon where he was employed, and there found him in a bad state of health, suffering from consumption or some pulmonary disease, breathing very hard, so. hard that he could he heard across the room. He reported that fact and the company refused to accept the premiums the day after Mrs. Walton had made the tender on May 23. Two or three days after that, Mr. Walton was taken to the hospital and on June 9, seventeen days after the tender was made, he died. The question is, whether under these circumstances the ..company is liable upon this policy.

| It is said that this policy, having run more than two years, there were only two grounds upon which it could be contested, according to this provision endorsed upon it and which I have read: “This policy shall be incontestable after two years, except for fraud or misstatement of age. ’ ’ In our judgment that provision relates entirely to what may have occurred at the time of the issue of the policy or the application, at the very inception of the contract, and does not relate to nonpayment of premiums; and does not mean that no matter if at the time of death the insured is In default- for payment of premiums in any amount or for any length of time, the policy shall be paid. It is similar to the provision contained in See. 3626 Rev. Stat., of this state, which provides:

“All companies, after having received three annual premiums on ■any policy issued on the life of any person in this state, are estopped from defending, upon any other ground than fraud, against any claim arising upon such policy by reason of any errors, omissions or misstatements of the assured in any. application made by such assured on which the policy was issued, except as to age.”

We do not think that this provision of the policy refers to or was intended to refer to the matter of nonpayment of premiums that were overdue “after two years.” If this were true, one might fail and refuse ■to pay after that period for a year or two years, or for an indefinite time, and his policy could not be contested or payment refused upon that ground. This would be unreasonable. The payment of dues lies at the very foundation of life insurance. Without their being paid with reasonable promptness, no insurance company can do business.

But it is said that the company waived the payment of these dues upon the Monday of each week, and there is evidence tending to show this, as premiums were received on several occasions, not only after they became due, but after the grace period of four weeks had gone by.

There is, however, a provision which I have read on the back of this policy that in case the policy is revived it must be upon the payment of arrears and the presentation of evidence satisfactory to the company of the sound health of the insured. The policy upon its face provides, “if any premium shall not be paid when due, this policy shall become void;” but on its back is.the provision that if the insured dies within four weeks after he is in default for dues, the policy shall ba regarded as in full force; and the further provision:

“Should this policy become void in consequence of nonpayment of premiums, it may be revived, if not more than fifty-two premiums are due.”

That clause, a part of which I have just read, contains the condition referred to;

“Upon the payment of arrears and the presentation of evidence satisfactory to the company of the sound health of the insured.”

There is no evidence in this record that the company or- any of its agents at any time waived the provision that if the policy was revived, the company must have satisfactory evidence of the sound health of the insured. Mrs. Walton says herself that they always asked her what his health was; how he was, or whether he was well and so on, when she paid up the back dues and thus revived the policy. So it cannot be said that the .company, by any of its acts, or the acts of any of its agents, had ever waived this provision of the policy. Th’at was part of the contract and one of the conditions upon which the policy could be revived, that such evidence be presented to the company. This seems to us to be a very reasonable provision' that when one is in default for nonpayment of premium for a period not exceeding fifty-two weeks, his policy, which has become void, cannot be revived, unless he is in reasonably good health, and this is shown by satisfactory evidence to the company.

Now what were the circumstances at the time this tender was made ? I have already stated them briefly. Before the money was received, the agent undertook to satisfy himself as to the health of Mr. Walton. Mrs. Walton had theretofore notified the company that she could no longer pay these premiums; and apparently on learning (that would be the inference) that Mr. Walton was in very poor health, she made this tender to the company. The agent visited Mr. Walton and ascertained that he was in very poor health, and within seventeen days after that he died. This provision not having been waived by the company upon any occasion, we are of the opinion that the company was not bound to receive the dues under these circumstances, with Mr. Walton in the condition of health that he was. Any person insured in this company, who allowed his dues to go the day of payment, took his chances of getting into such condition of health that the company would not permit him to revive his policy, there being no -evidence that the company had ever waived this provision as to the health of the insured. We are of the opinion that this verdict is not sustained by the evidence; but that the uncontradicted evidence shows that the policy had become void at the time the tender was made, and the undisputed evidence is that Mr. Walton was in such condition of .health at the time that the company was under no obligations to accept the premiums or revive the policy.

In view of this, a judgment should be entered here in favor of the company; we see no reason for sending the case.back for a retrial, the undisputed evidence showing that this provision as to health had never been waived, and showing further that Mr. Walton at the time the dues were tendered was practically in a dying condition, and did die within a very short time thereafter. .In our opinion the company is entitled to a judgment upon this record and that will be the order of the court.

The judgment of the court mf common pleas will be reversed and judgment entered in favor of the plaintiff in error.


author: PARKER, J.

text:
    CONTRACTS — ERROR—TRIAL—PLEADING—EVIDENCE.
    [Huron (6th) Circuit Court,
    1903.]
    Parker, Hull and Haynes, JJ.
    W. L. Minzey et al. v. Marcy Mfg. Co.
    1. Contract to Employ Maker of Note Until Paid, Construed.
    Where a person executes and delivers a promissory note to his creditor, who in turn, and as a part of the same transaction, enters into a written contract whereby he agrees to employ the maker until the note becomes due and to extend the same and continue the maker in employment for a further period of six months if the note is not paid at maturity, the two papers, read together, amount to a contract that the maker of the note should be employed a sufficient length of time to enable him to pay the note with his'wages, and that his wages as earned should he applied by the payee towards its payment, and not that the maker'was entitled to draw his wages from time to time and pay the note when it became due.
    2. Action on Note not Prematurely Brought, When.
    An action on a promissory note is not prematurely commenced when the note is due on its face and the only defense is that the payee had agreed as a part of the same transaction, by separate writing, to give the maker employment until it was paid in full, and if not paid when due, to extend the note and retain the maker in employment for a period of six months longer, hut which latter period has not expired at the commencement of the action, when it appears from the evidence that before the note became due the payee was discharged from employment for justifiable cause, as under such circumstances the payee would be released from any obligation under the written agreement to employ the maker, to receive payment in services, or to grant the extension as therein provided.
    3. Not Undue Prominence to Call Special Attention to Certain Issue, When.
    An objection that undue prominence was given to a certain issue in a case by the court in its charge, is not sustained where it appears that the error charged to the court was in overlooking the issue covered by such evidence in its charge before taking the noon recess, and by afterwards instructing the jury upon such issue alone immediately upon convening court after the recess. There is no duty devolving upon the court in such case to repeat the whole change and inject the portion objected to in such way or place as to avoid directing special attention to it, when the issue involved was a prominent matter as well as the real issue in the case.
    4. Reviewing Court Will Disregard Objection to Evidence Admitted on Issue not Made by Pleadings, When.
    The fact that evidence was admitted upon an issue not made by the pleadings, and that such issue was submitted to the jury, will not he regarded by the reviewing court where the first objection to or complaint of such proceeding is made in the petition in error.
    5. Errors Must Affirmatively Appear From Record to be Reviewed.
    An alleged error committed by the trial court in allowing plaintiff’s counsel tc open and close the argument will not be reviewed where it does not affirmatively appear from the record that the defendant did not open and close the argument or that the matter was brought to the attention of the trial court, as a reviewing .court will not assume that error was committed.
    6. Ruling of Court as to Burden of Proof Must be Prejudicial.
    A ruling by the trial court that the burden of proof is upon the plaintiff under the issues raised in an action on a promissory note, will not be reviewed upon an exception by defendant, when it .does not appear that the latter was prejudiced thereby.
    7. Answer to Immaterial Question Must be Prejudicial.
    It is no ground for reversal of a judgment that the defendant was examined on a matter not an issue in the case, where it does not appear that his answers prejudiced him before the jury.
    8. Range op Cross-examination Cannot be Objected to, When.
    A party cannot object to the range taken in the cross-examination of a witness on an immaterial matter when the witness was offered by the objecting party and examined by him on the same matter.
    9. Corporate Existence not Raised by General Denial.
    The incorporation of a plaintiff corporation is not put in issue by a general denial, and need not be established by proof under such a pleading. The issue can only be raised by a special pleading.
    Error to the court of common pleas of Huron county.
    Jesse Vickery, for plaintiff in error.
    C. A. Wilt and McKnight & Thomas, for defendant in error.
   PARKER, J.

The action in the court below was by The Marcy Manufacturing , Company against W. L. Minzey and Nancy J. Minzey upon a promissory note. The note is dated July 17, 1899, and is for $241.05, payable seven months after date with interest from date at the rate of six per cent, per annum, payable annually. W. E. Minzey, by his answer admits that he executed and delivered to the plaintiff the promissory note described in the petition, but denies each and every other allegation in the petition not expressly admitted.

One of the averments in the petition on behalf of the plaintiff is that it is a corporation duly organized and existing under the laws of the state of Indiana.

Nancy Minzey, who is the mother of W. L. Minzey and who was surety for him upon this note, in her answer admits the execution of the promissory note described in the petition, but she denies each and every other allegation set forth in the petition not expressly admitted. It is said that she does not, therefore, admit the delivery of the note.

Each defendant in a separate answer then proceeds to aver facts relative to another writing which they say was signed by The R. G. Marcy Manufacturing Company, the plaintiff, at the time this note was given and which constituted a part of the same transaction and contract, and they attach to their answers a copy of that paper, which reads:

“Bellevue, O., July 18, 1899.
“We do hereby agree to give W. L. Minzey work on the road and in our factory at two dollars per day and expenses until a note of $241.05, dated July 17, ’99, due in seven months, signed by himself and Mrs. Nancy J. Minzey, is paid, and we agree if this note is not paid when due to renew the balance for six months.
“The R. G. Marcy Mfg. Co.
“J. A. Ullmah, Jr.’*

They aver, with respect to the circumstances under which these papers were executed, that W. L: Minzey had been engaged in business at Belle-vue as a dealer in pumps, tanks, windmills and windmill supplies generally, and that he had become embairassed and involved financially so that he could not continue his business; that he had become indebted to the plaintiff and others, and that he turned over all of his property to his creditors about this time, turning over a part to the plaintiff upon his indebtedness to them; that he gave this note for the balance that was unsatisfied by the turning over of such property; that he was not willing to give a note, and especially that his mother was not willing to sign it as his surety until the company had executed said paper in which they agreed to employ him upon the terms therein stated.

He avers, and his mother in her separate answer also avers, that the company employed him in pursuance of this contract and kept him in their employ less than a month and then discharged him without legal cause. The company deny that they discharged him without cause.

The cause was submitted to a jury, which returned a verdict m favor of the plaintiff below for the amount of the note and interest, and W. L. Minzey and his mother, Nancy J. Minzey, prosecute error here. They aver and contend that there was error prejudicial to them in the proceedings in the court below in the receiving and in the rejection of evidence, and in the charge of the court; and that the verdict is against the weight of the evidence.

The first matter occurring upon the trial of which they complain was with respect to the determination of where the burden of proof rested. It appears that after the case was stated to the jury, Mr. Vick-ery, attorney for the defendant below, said, “We admit the execution of the note and its delivery and we also claim that we have the burden of proof.”

Court: “The burden of proof is upon the plaintiff in this case.”

Mr. Vickery: “We except to the ruling of the court in holding that the burden of proof is upon the plaintiff.”

That is all we find in the record upon the subject. The plaintiff then proceeded to introduce the note in evidence, also the certificate of incorporation of the company, and then put the general manager of the company upon the witness stand, who testified that the company was the owner of the note, and then it rested.

The complaint of the plaintiffs in error about this matter is that they were deprived of the opening- and closing of the argument. It is urged on behalf of the defendant in error that the decision of the court below as to where the burden of proof rested was correct. It is said that under the pleadings it did not devolve upon the plaintiff to introduce the note in evidence nor to prove the incorporation of tbe company. We hold that under a denial of that character (a general denial) the plaintiff below is not put upon its proof to establish its incorporation. It requires a special pleading to ’raise that question. It is not very apparent at least that the plaintiff below was called upon to go ahead and prove anything under these pleadings, but we are not required to go into that question very carefully, or at all, for the reason that it does not appear that it was prejudicial to the defendant below to have the plaintiff below go ahead and make its proof. The thing they complain of is, that the plaintiff below was permitted to go ahead in the argument, and was permitted to close the argument; but that fact does not appear in this record.

It does not appear that at the close of the evidence this matter was brought to the attention of the court in any way, or that counsel for’ defendant desired to go ahead; nor does it appear (which is more essential, perhaps), that counsel for the defendant below did not go ahead in the making of the argument, and did not close the argument. All we have upon the subject is, after the testimony is all set out, “and this was all the evidence offered by either party in the cause and thereupon the case proceeded to argument, after which the court charged the jury as follows.”

The errors that may be taken advantage of are such as appear affirmatively upon the record, and we cannot assume that the court committed the error of permitting counsel for the plaintiff below to open and close the argument. Furthermore, in looking at the motion for a new trial we find that there is nothing stated therein upon that subject. Nearly all of the grounds for a new trial that are provided by law are set forth here, but the ground that would cover this is not set forth. ,

It is also contended that this action was brought before the note had matured, or before the cause of action had matured, because of the provision in the other contract (which the evidence shows was executed at the same time, as part of the same contract), that if the note -was not paid in full when due it was to be renewed for six months. It is said that it was not paid in full when due and that therefore they became entitled to a renewal for six months, which would carry it over to August, 1902, whereas the action was commenced in March, 1902. But whether that objection is well taken depends upon the question whether the verdict, involving a finding by the jury that the discharge of the defendant was justifiable, is to stand; for if the discharge was justifiable the conditions requiring an extension never arose, and it follows that the action was not brought prematurely. In other words, the issues became narrowed down to the single one of whether the plaintiff below was justified in discharging' Minzey from their employment. If they were justified in discharging him from their employment, then manifestly they were released from ■ any further obligation under this contract of July 18, to employ him or to receive payment in services as therein provided, or to grant an extension, as therein provided, and it might then insist upon compliance with the exact terms of the promissory note.

It is our conclusion that the verdict of the jury upon this issue is not against the weight of the evidence.

It is contended by the defendant in error that Mr. Minzey was unskillful, careless and unsatisfactory as an employe; that his work was, not well done; that it was not as well done as he might have dene it had he tried, and that his course as an employe was unsatisfactory and a damage to them; therefore they discharged him. And they .also insist that in keeping an account of his expenses which they were to pay and which they did pay, he put in bills for expenses that he did not incur (in one case especially, the sum of $7.50), and that they were justified in discharging him on account of his bad work and on account of his dishonesty.

That he was dishonest in presenting bills for his expenses is not charged in the pleadings filed on behalf of defendant in error. That is not set forth as a ground for his discharge. If it had been insisted upon on his behalf, perhaps that could not have been proven upon the trial or submitted to the jury without an amendment to the pleadings.

But no objection was made to the introduction of evidence on this point (except upon the examination of Mr. Minzey, which will be noticed presently) and no objection was made to the submission of this issue to the jury (except as to the manner and time of such submission, also‘to be noticed presently), and it is now too late to make such objection or to complain for the first time.

Some objection was made when inquiry was made of Mr. Minzey himself, whether he had not put in his bill for expenses that he had not incurred, but he .answered, and his answer, in our opinion, was no* prejudicial to him, consequently the inquiry could not have been prejudicial. He answered that he put in his bills for all his expenses and for no more than the expenses that he had incurred. The inquiry was-pursued, but the answers of Mr. Minzey in each instance were of a character that could not have prejudiced him before the jury. On the other hand, when inquiry was made of the witness who charged him' with falsifying the amount of his account, no objection was made to his testifying; and when the court came to submit this issue to the jury, objection was not made to it on the ground that it was not an issue.presented in the case, but objection was made solely upon the ground that it was submitted at a time -and in a manner which gave it undue prominence. The charge of the court having been completed and the jury having been excused for dinner and having come back from dinner, the court’s attention having been called to it, the court stated to the jury that he had overlooked a matter, and then proceeded to charge them upon this point.' It cannot be maintained that what the court said was improper or erroneous. But it is said that undue prominence was given to it. We do not see how the court could well have done otherwise, upon being apprised of this oversight, than to correct it in the way it .did, and it seems to us that it was not necessary for the court to repeat the whole charge in order that this' might be injected somewhere in such a way as to avoid directing the special attention of the jury to it; and we cannot see that the jury, after retiring, must have given undue prominence or consideration to this subject. It was a prominent matter in the case; the real issue in the case was as to the method in which the defendant Minzey had done his work, the way he had served his employer, both in the matter of work, and in the matter of rendering his account; so it would be quite proper for the jury to give it much prominence and careful consideration.

It is said that on the trial the court erred in allowing the use, by the plaintiff below, of the property statement that had been made, some time before the transaction in which these papers were executed, by the defendant Minzey to the plaintiff below. It is not apparent to us that that property statement was competent evidence. We think that its use amounted to the introduction of evidence upon an immaterial matter, and probably a matter prejudicial to the defendants below. But when we come to consider the way it was brought in, we think the defendants in error cannot complain; we think they are responsible for the presentation of this immaterial issue. When Mr. Minzey was upon the witness stand in his own behalf he was inquired of by his counsel, Mr. Vickery, as to his condition in life at the time he entered into this contract.

Q. “At the time this note was given were you a married man?” A. “I was, yes, sir.”
Q. “And how many members were there of your family?” Mr.' McKnight, on behalf of the plaintiff, objected to the question.
Court: “What do you claim for that?” Mr. Vickery: “It is a circumstance to go to this jury in determining the question whether the defendant or rather the plaintiff here has been put in any more serious position by the surrender of this property or by the failure to collect on this note, than they would have been if they had not received this property.”
The court ■ said: “Perhaps as to how many he had in his family is not important, but I think, under your view, that it may be competent to show that he was at that time the head of a family and that he had no homestead. If you wish to show those facts at the time of the making of this contract, you may do so, providing you couple with it some testimony that that fact was known to the opposite party.”

Then the examination proceeds: “What is the fact at the time of making this contract — were you a resident of Ohio?” A. “Yes, sir.”

Q. “And were you a married man and at the head 'of a family?” A. “Yes, sir.”
Q. “You may tell the jury at that time whether or not you owned a homestead?” A. “I did not, no, sir.”
Q. '“Where were you living at that time?” A. “I was living in Bellevue.”
Q. “Whereabouts in Bellevue were you living?” A. “On Greenwood street or Greenland street — I forget the name.”
Q. “Was your wife the owner of a homestead at that time?” A. “She was not; at the time this note was delivered, you say ?”
■ Q. .“Yes, sir, at that time?” A. “She was not to the best of my recollection.”
Q. “Do you know whether or'not Mr. Ullman knew of your property, or what property you had, or what property you didn’t have — your financial condition ?” A. “I don’t know.”

The court below seemed to think that that would throw some light upon the issue, though we' cannot discover how it could; but the court admitted it on condition that the defendants below; should establish that the plaintiff knew of these conditions. .Thus far they had failed to show that the plaintiff knew anything about it. Thereupon the cross-examination of Minzey proceeds: “At the time you entered into the original contract with the representative of The Marcy Manufacturing Compare, you owned a homestead then, didn’t you?” A. “May I inquire what you mean by ‘original contract ?’ ”

Q. “Yes, sir, this contract right here; just look at that and see if you didn’t sigh that? (Witness shown paper.) Look at the back of it there and see if you didn’t make a property statement there?” A. “At the time this paper was signed, I owned property, yes, sir.”
Q. “That is your signature there at the bottom, isn’t it?” A. “Yes',"sir.”
Q. “And that is your wife’s signature, isn’t it?” A. “To the best of my knowledge, it is, yes, sir.”
Mr. Vickery: “I object to the introduction of this for the reason that it has nothing to do with this contract.”
Court: - “It does not quite seem to me that the circumstances you' are seeking to elicit throw any light upon the contract. I don’t quite see that it helps to show whether these two papers were one transaction, or whether they were separate. I think this is irrelevant. I do not think this would help the issues.”
Mr. McKnight: “I now ask the court to permit the reading of this contract to the jury for the purpose of cross-examination of the witness on the stand upon it.”
Court: “The request will be overruled for the present.”
Mr. McKnight: “I also ask the court to permit me to read the statement on the back of this contract to the jury for the purpose of cross-examining the witness so that I may intelligently cross-examine the witness on the stand in regard to it.”
Court: “You may'' cross-examine him as to that. You may ask him whether he did not make such a statement. You may submit it to him and see. I will permit you to use that statement.”
Mr. Vickery: “We except to the ruling of the court in permitting the introduction of the property statement made in January of 1899.”

It is urged that because of this property statement having gone to the jury, prejudice resulted to Minzey. As I said before, it seems to us that this whole matter of. the financial condition of Minzey was immaterial ; but it was introduced in the first instance by him or on his behalf, and having presented that kind of immaterial matter he cannot complain now that he was cross-examined upon it, and that the cross-examination took the range that it did.

It is said that there was some error in the charge, in the construction the court put upon this contract, but in looking at that, our view of the matter is that if the court erred at all (and we are not quite prepared to agree with the court in its construction of this contract), the error was not prejudicial to the plaintiff in error. We have very serious doubt whether the court was right in holding that Minzey had a right to draw his wages from time to time while remaining in the employment of the plaintiff below, and that he might also insist upon paying the note as it fell due according to its terms. We are rather inclined to think that the two papers, when read together, amount to a contract that he was to be employed a sufficient length of, time at least, to enable him to discharge this indebtedness with his wages, and that his wages as earned should have been so applied. But the company did not insist upon their being so applied.' His wages that he earned were paid over to him, and we can see nothing in the view taken by the court that was at all prejudicial to Minzey, and we feel very confident in our own minds that the result reached was correct and just, and the judgment of the court of common pleas will be affirmed.


author: CHERRINGTON, J.

text:
    INTOXICATING LIQUORS — EVIDENCE—-CRIMINAL LAW.
    [Lawrence (4th) Circuit Court,
    March 11, 1904.]
    Cherrington, Jones and Walters, JJ.

      Leo Ebert Brewing Co. et al. v. State of Ohio.
    1. CORPORATIONS NOT LIABLE CRIMINALLY FOR UNLAWFUL SALE OF INTOXICATING Liquors to Minor.
    In Ohio a corporation cannot he held criminally liable for, in its corporate capacity, unlawfully furnishing to a minor, to be drunk by such minor, intoxicating liquors in violation of Sec. 6943 Rev. Stat.
    2. Proof of Selling not Sufficient to Sustain Charge of .Furnishing.
    Proof of unlawfully selling intoxicating liquor to a minor, etc., in violation of Sec. 4364-21 Rev. Stat. does not sustain a charge of unlawfully furnishing intoxicating liquor to a minor.
    Error to tlie court of common pleas of Lawrence county.
    C. E. Belcher, for plaintiff in error.
    E. E. Corn, prosecuting attorney, for defendant in error:
    A corporation is subject to indictment under the laws of the state of Ohio for the offenses charged. Section 7231 Rev. Stat.; Hughes, Crim. Law Sec. 2738; 1 McLain, Cr. Law Í3ee. 180; 1 Bishop, Cr. Law Sec. 417 et seq.; 3 Greenleaf, Evidence Sec. 9 and note.
    The sections under consideration now do not use the word “person,” but says “whoever makes any such sales” (See. 4364-20 Rev. Stat.), and “whoever sells intoxicating liquors to a minor” (See. 4364-21 Rev. Stat.) ; and whoever furnishes to a minor any intoxicating liquors,” etc. (Sec. 6943 Rev. Stat.) ; and nowhere do the sections use the word “person.” Hence a corporation may be a “whoever,”, as meaning “anyone who.”
    A corporation may be guilty of a crime when the only intention required is an intention to do the prohibited act. United States v. John Kelso Co. 86 Fed. Rep. 304.
    The statute under consideration is a police regulation; it is a means devised by the legislature to preserve good order and public morals. Corporations are subject to the police power of the state the same as individuals. Black, Intox. Li'q. Secs. 28, 32, 84 and 127.
    Joint indictment was valid. 'Section 6804 Rev. Stat.
    Sections 4364-9 and 4364-16 Rev. Stat. do not exempt the manufacturer who sells at his manufactory, in quantities of one gallon or more, from the provisions of the statute relating to a violation of the Sunday laws.
    One section refers to one thing, namely, the Dow tax, and the other section refers to an entirely different thing, namely, the prohibition of the sale of liquors for one day in seven, upon penalty of the punishment prescribed therein in ease of a violation.
    Section 4364-9 Rev. Stat. does no more than to exempt the corporation indicted in this case from the payment of the Dow tax, if the sales consist of one gallon or more.
    All the decisions under this section relate to the question of taxation and to no other question. Senior v. Ratterman, 44 Ohio St. 661, 670 [11 N. E. Rep. 321].
    Section 4364-20 Rev. Stat. refers to an entirely different question; it not only says who shall be punished in case of a violation, and what acts shall be prohibited and what places shall be closed, but by express terms names all the exceptions and exemptions from the operation of the act.
    The brewing company is engaged in selling its product both to dealers and consumers; the sales referred to in the indictments were made to consumers, and under Kaufmann v. Hillsboro (Vil.), 45 Ohio St. 700, 701 [17 N. E. Rep. 557], would be a sale at retail.
    The construction contended for by plaintiffs in error would give a corporation a privilege denied to a natural person. Such an intention should not be imputed to the legislature unless its language will admit of no other interpretation. Senior v. Ratterman, 44 Ohio St. 661, Q77 [11 N. E. Rep. 321],

       Reversing State v. Brewing Co. 13 Dec. 139,.

   CHERRINGTON, J.

At the October term, 1903, of the common pleas court, this county, the defendants, plaintiffs in error here, were indicted jointly for violating Sec. 4364-21 and 6943 Rev. Stat.

The indictment contained two counts, the first charging them witn unlawfully selling intoxicating liquor to one Yint Lynd, a minor, knowing him to be such, etc.; the second, with unlawfully furnishing intoxicating liquor to Vint Lynd, a minor.

Each of the defendants filed a demurrer to the indictment for general cause, both of which were overruled by the court, whereupon the case went to trial by the court, a jury having been waived, resulting in a finding and judgment of acquittal as to both defendants on the first count and a finding and judgment of guilty on the second.

This proceeding in error is here asking for a reversal of the finding and judgment on the second count, assigning as errors the overruling of the demurrers to the indictment and that the finding of guilty on the second count was against the manifest weight of the evidence.

The first assignment presents a very important question and one upon which this cc*Srt has not before been called to decide, viz., as to whether in Ohio a corporation can be held criminally liable for the unlawful sale of intoxicating liquors in its corporate capacity.

The prosecuting attorney insisting upon the liability of the brewing company, presents an array of authorities among which are Hughes, Cr. Law Sec. 2738; 1 McClain, Cr. Law Sec. 417 et seq.; 1 Bishop, Cr. Law Sec. 417 et seq.; 3 Greenleaf, Evidence Sec. 9 and note; United States v. Kelso Co. 86 Fed. Rep. 304, which seem to establish the principle that where a corporation in the transaction of its ordinary business performs an act which if done by a natural person would make such person guilty of a misdemeanor, it is likewise liable, and I think I may say with confidence that if there be an answer to this principle and the authorities cited, it is simply and only in the fact that there is no statute in Ohio making a corporation so liable.

“'Whoever” and “person” are the words almost, if not invariably employed in our statutes to designate the one on whom a penalty is imposed for their violation; they are synonymous in meaning and refer to natural persons, and where an artificial person is intended it is so designated in the statute, an example of which is found in See. 6949 Rev. Stat., under the head of “Nuisances” in which and following sections corporations are made expressly indictable. ■ Section 7231 Rev. ■ Stat., provides a mode of procedure against a corporation when indicted, ■ meaning undoubtedly where properly indicted. To say that corporations should be held criminally liable for violation of statutes in the conduct of their usual business as are natural persons would probably be argument in favor of what might be good policy, but certainly not as to the state of the law. Corporations act through their agents who are amenable to the law for its violation just as Otto Ebert in this case who is secretary of the brewing company as disclosed by the record.

State v. Fertilizer Co. 24 Ohio St. 611, 614, I think decisive of the question. The fertilizer company was indicted for erecting and keeping up. a nuisance in Cincinnati. The common pleas sustained a demurrer. to the petition. On final disposition in the Supreme Court Judge Welch says:

“We think the court below was right. Criminal laws are to be construed strictly in favor of the accused. In its primary sense, the word ‘person’ means a natural person only. I know of no criminal statute in Ohio where the word has been held to apply to a corporation; nor do I know of any case where an attempt has before been made in this state to indict a corporation. We have no common law crimes in Ohio, and the whole • theory and machinery of our administration of criminal law seem adapted only to the prosecution and punishment of natural persons. There is no provision of law for bringing an indicted party into court by summons, or otherwise than by actual arrest of his person; under such a state of legislation and practice, the legislature could not have intended, in the use of the word ‘person’ which is found in almost every criminal law of the state, to authorize an indictment against a corporation for this particular offense, without any special or further provision as to the liability of corporations, or the mode of proceeding against them.”

We are constrained to hold that the brewing company is not liable to indictment for the violation of the sections of the statute involved, and the court erred in not sustaining its demurrer to the indictment, but did not err in overruling demurrer of Otto Ebert.

Is the finding of the court on the second count against the manifest weight of the evidence, which is indisputable and all one way and shows a straight out sale for cash! The penalty for selling is both fine and imprisonment, while the penalty for furnishing is fine or imprisonment, or both, thus seeming to recognize different grades of offense.. We think that furnishing in the section under consideration, means any mode of providing the minor with the liquor other than by sale. The proof does not support the allegations of the second count. The judgment will be reversed. The brewing copipany will be discharged and the same remanded as to Otto Ebert, to be proceeded with according to law.


author: JELKE, J.

text:
    CONSTITUTIONAL LAW — JURY—COURTS.
    [Hamilton (1st) Circuit Court,
    December 16, 1903.]
    Giffen, Jelke and Swing, JJ.
    Ohio Turnpike Co. v. Ernest Waechter.
    1. Rtgtit of Turnpike Company to Take Toll is Property.
    The right of a turnpike company to take toll upon a turnpike is “property” which cannot be taken away or suspended without due process of law, as guaranteed by Sec. 16, Art. 1 of the state constitution and Sec. 1 of the fourteenth amendment to the federal constitution, which includes the right of trial by jury under Sec. 5, Art. 1 of the state constitution.
    2. Justices of Peace Have no Equitable Jurisdiction.
    As justices of the peace have no equitable jurisdiction, the proceeding before such courts to suspend tolls on defective turnpikes under Secs. 3484 and 3485 Rev. Sta.t.; is necessarily a proceeding at law, and such courts have no authority to sequester property in such proceedings, in analogy to mesne process from a court of equity, for the purpose of enforcing its orders.
    3. Sections 3484 and 3485 Rev. Stat. are Unconstitutional.
    Section 5, Art. 1 of the constitution providing that “the right of trial by jury shall be inviolate” does not execute itself, as no provision is made therein i'or the impaneling of a jury; and where the general provisions of Secs. 5130, 7267, 7275 and 7276 Rev. Stat., relating to the impaneling of juries in civil and criminal cases are not applicable to special statutory proceedings involving the taking of private property, specific provision must be made therefor in such statutes to render them constitutional. Hence, Secs. 3484 and 3485 Rev. Stat., providing that if any turnpike company fails to keep its road in repair, a justice of the peace upon written complaint shall appoint two inspectors to examine into the truth of the matter, and upon their filing a report that the complaint is true and sending a certified copy thereof and of the inspectors’ finding to the keepers of the gates between which the defects are located, the right of the company to take toll at such gates shall be suspended until the defects are fully repaired, amount to a taking of .private property without due process of law, and are unconstitutional, inasmuch as no provision is made therein for a trial by jury, and there is no statutory provision for the impaneling of a jury in such case in appeal to the common pleas court.
    4. Right to Trial by Jury Secured in Quo Warranto.
    The right to impanel a jury' to try issues of fact is inherent in the exercise of jurisdiction in quo warranto under Sec. 6768 Rev. Stat., and where a jury is demanded in such proceeding it can be impaneled in the'circuit court under Sec. 5168 Rev. Stat.
    5. Rights of Purchaser of Turnpike at Execution Sale.
    A purchaser of a turnpike road at an execution sale under the act of May. 5, 1868 (65 O. L. 136; Sec. 3530 Rev. Stat. et seq.). is vested with all the property and franchises of the original corporators and is subject to the visitorial power of the state, through its courts, under Secs. 6760 and 6761 Rev. Stat.'for unlawfully usurping franchises, the commission or omission of acts which amount to a surrender of corporate rights, privileges and franchises, or for the misuse of franchises, privileges and rights conferred upon it.
    6. Discretion of Court in Quo Warranto Proceedings.
    A court has the widest latitude of discretion in granting or withholding the writ of quo warranto in consideration of public or private justice, and may take into consideration all the conditions surrounding the case together with the statements or promises of the defendant to make immediate amends.

      ERROR to the court of common pleas of Hamilton county.
    Jno. C. Healy and Malcolm McAvoy, for plaintiff.
    Foraker, Outcalt, Granger & Prior, for defendant.
   JELKE, J.

These three cases [Ohio Turnpike Co. v. Waechter, Ohio Turnpike Co. v. Edwards, and State, ex rel. Nichols, v. Martin], growing out of the same property, the Ohio turnpike, and presenting substantially the same questions, will be considered together.

The first two> error cases, were begun in magistrates’ courts and were prosecuted under Secs. 3484 and 3485 Rev. Stat. In both cases it was contended that a suspension of the right to take tolls was a taking of private property, and under the case of Turnpike Co. v. Parks, 50 Ohio St. 568 [35 N. E. Rep. 304], was in violation of:

“1. Section 5, Art. 1 of the constitution: ‘The right of trial by jury shall be inviolate.’
“2. Section 16, Art. 1 of the constitution: ‘Every person, for an injury done him in his land and goods, shall have remedy by due course of law.’
“3. The provision of Sec. 1, Art. 14 of the amendments of the constitution of the United States, that no person shall be deprived of property without due process of law.”

In the case of Ohio Turnpike Co. v. Edwards, in the common pleas court of Clermont county, the court offered to impanel a jury to try the issues of fact as to the condition of the road, etc., but counsel for the turnpike company, while contending that said company could not be deprived of its property without due course of law1, that is, without the intervention of a jury, nevertheless denied the power of the court to impanel such jury without express authorization by statute so to do.

Dickman, J., in Turnpike Co. v. Parks, supra, said, pages 575, 576:

“The right to take toll upon a turnpike is a franchise, * * * and when properly exercised becomes a useful and valuable right— a source of income and the means of reimbursing the company for keeping the road in repair for safe and convenient use. And this franchise, which in the case at bar it is sought to extinguish, is to be regarded as property in the enlarged sense of the term.
“ ‘A franchise is property, and nothing more; it is incorporeal property, and it is its character of property only which imparts to it value, and alone authorizes in individuals a right of action for invasions or disturbances of its enjoyment.’ Daniel, J., in West River Bridge Co. v. Dix, 47 U. S. (6 How.) 507, 534.”

We are of opinion that a suspension of the right to take tolls is a taking of property no different in kind, only less in degree.

There are two contentions on behalf of the plaintiff below:

First. That this is not an absolute taking of property, but a sequestration of the same to enforce the court’s order as to repairs, in analogy to a mesne process from a court of chancery. The answer to this is that this is not an equitable proceeding because it is begun, and, in default of appeal, may be ended in the court of a justice of the peace, who has no equitable jurisdiction. In a proceeding at law, then, property can only be taken by due course of law.

Second. That an appeal is provided by Sec. 3485 Rev. Stat. to the court of common pleas, and that a jury may be had in that court. In the case of Ohio Turnpike Co. v. Waechter, this was denied by the court below.

If we find that this proceeding is the taking of property and can omy be had under the constitution by the intervention of a jury, as the constitution does not provide for the impaneling of a jury and as the constitution does not execute itself, we' must look to the statutes to find what provision, if any, is made for a jury in such proceeding. The provisions for the impaneling of a jury by the common pleas court m criminal cases cannot apply. Sections 1267, 7275, 7276 Rev. Stat. Neither can the general provision of Sec. 5130 Rev. Stat. in civil actions apply.

“Issues at law must be tried by the court, unless referred as hereinafter provided; and issues of fact arising in actions for the recovery of money only, or specific real or personal property, shall be tried by a jury, unless a jury trial be waived, or a reference be ordered as hereinafter provided.” Section 5130 Rev. Stat.

Now we find that the jury on appeal in road cases is specially provided for in Sec. 4700 Rev. Stat. (which saves the constitutionality of action by viewers). We find further that in all special proceedings in which a jury is needed, special .provision is made for the same by statute, viz., condemnation, bastardy, will contests, etc. In the absence of such provision we fail to see how the constitutional right of the turnpike company can be secured to it.

The same objection is urged by counsel for the turnpike company in the quo warranto case. In this case the taking of property sought is absolute, and unless the issues of fact can be determined by a jury impaneled by and under proper instructions from a court of competent jurisdiction, under the case of Turnpike Co. v. Parks, supra, must fail.

Jurisdiction in quo warranto is conferred by Sec. 6768 Rev. Stat. Where the constitutional right to a jury trial is recognized, the right to impanel a jury to try issues of fact is inherent in the exercise of jurisdiction in quo warranto. 23 Am. & Eng. Enc. Law 626. It pertains to the jurisdiction conferred. If then in this case in this court a jury were demanded we would proceed to impanel one as provided in Sec. 5168 Rev. Stat. The constitutional right being thjis secured in this kind of an action in this court, the objections of the case of Turnpike Co. v. Parks, supra, are avoided and this court in a proper case could forfeit defendant's franchise.

We are of opinion that when the individuals, defendants herein, took this property under the act of May 5, 1868 (65 O. L. 136 ; Sec. 3530 Rev. Stat. et seq.), the same vested “in them in the same manner” as franchises vested in the original corporators and subject to the same visitation on the part of the state through its courts as obtained against the original corporation, and this action would lie either under Sec. 6160 Rev. Stat. against a person who unlawfully holds a franchise, or Sec. 6161 Rev. Stat. against a corporation when it has committed or omitted an act which amounts to a surrender of its corporate rights, privileges and franchises, or when it has misused a franchise, privilege or right conferred upon it by law.

In quo warranto the court has the widest latitude of discretion in granting and withholding the writ in consideration of general justice, public and private, and can take into consideration all the conditions mid even the protestations of what defendants purpose doing immediately.

In view of the changes which brought about the conditions complained of, the promise of defendants to -make immediate repairs and restoration, the season of the year, etc., the court will give the defendants until May i, 1904, to repair the road to conform to the requirements of Sec. 3417 Rev. Stat. — “at least sixteen feet (in width) shall be made an artificial road, composed of stone, gravel, wood, or* other convenient material, well compacted together in such manner as to secure a firm, even, and substantial road” — and proceedings herein will be stayed until then.

We are of opinion that Secs. 3484 and 3485 Rev. Stat. do not afford what the constitution' vouchsafes, and the error cases will be reversed.


author: DUSTIN, J.

text:
    COLLEGES — ENDOWMENT—TAXATION.
    [Greene (2nd) Circuit Court,
    March Term, 1904.]
    Sullivan, Wilson and Dustin, JJ.
    United Presbyterian Theological Seminary of Xenia v. Asa Little (Treas.).
    1. Institution foe Education of Young Men foe Ministry, a Purely Public ■ Charity.
    An institution for the education of young men for the gospel ministry, and open to all, is a “purely public charity,” within the meaning of Sec. 2, Art. 12 of the constitution of Ohio.
    2. Collegiate Endowment Funds Exempt from Taxation.
    The endowment fund of such institution, which is loaned, and the.interest used solely for the salaries of the professors and expenses neces-. sarily Incident to such educational work, is a “credit” within the meaning oi Sec. 2732 Rev. Stat., and is exempt from taxation.
    Appeal from court’of common pleas of Greene county.
    C. H. Kyle and C. C. Shearer, for plaintiff:
    Institutions of purely public charity may, by general laws, be exempted from taxation. Section 2, Art. 12, Const.
    Plaintiff is an institution of a purely public charity under Sec. 2732 Rev. Stat.; Gerke y. Purcell, 25 Ohio St. 229, 243; Humphries v. Sisters of the Poor, 29 Ohio St. 201, 205; Cleveland Library Assn. v. Pelton, 36 Ohio St. 253, 257.
    The endowment fund of plaintiff is exempt from taxation. Sections 2731-1 and 2732 Rev. Stat.; Gerke v. Purcell, 25 Ohio St. 229; Mannix v. Purcell, 46 Ohio St. 102 [19 N. E. Rep. 572; 2 L. R. A. 753; 15 Am. St. Rep. 562] ; Davis v. Camp Meeting Assn. 57’ Ohio St. 257 [49 N. E. Rep. 401).
    Charles Howard, for defendant:
    Taxation by uniform rule. See Sec. 2, Art. 12 of the constitution . of 1851.
    What property exempt from taxation. See Sec. 2732 Rev. Stat.
    As to what are institutions of purely public charity. See Gerke v. Purcell, 25 Ohio St. 229; Humphreys v. Little Sisters of the Poor, 29 Ohio St. 201; Morning Star Lodge v. Hayslip, 23 Ohio St. 144; Cleveland Library Assn. v. Pelton, 36 Ohio St. 253.
    A parsonage is not exempt from taxation. Gerke v. Purcell, 25 Ohio St. 229; Kendrick v. Farquhar, 8 Ohio 189; Cincinnati. College v. State, 19 Ohio 110.
    The question whether specific property is or is not subject to taxation, is not one to be determined by a county auditor, or county commissioners. State v. Montgomery Co. (Comrs.) 31 Ohio St. 271.
    Exemptions from taxation strictly construed. Cleveland Library Assn. v. Pelton, 36 Ohio St. 258.
    Every presumption is against it. A construction by the officer having the enforcement of the tax laws working an exemption in a particular ease, does not bind the successors of such officer, nor the state. Lee v. Sturges, 46 Ohio St. 158 [19 N. E. Rep. 560; 2 L. R. A. 556] ; German Evang. Prot. Cemetery v. Brooks, 4 Circ. Dee. 478 (8 R. ’439); Leonard v. Cassidy, 4 Circ. Dec." 450 (8 R. 529); see also Davis v. Camp Meeting Assn. 57 Ohio St. 257 [49 N. E. Rep. 401] ; Ohio State University (Tr.) v. Satterfield, 1 Circ. D.ee. 377 (2 R. 86) ; see note, Ludlow v. Brewster, 2 Circ. Dec. 47 (3 R. 82), under Sec. 2733 Rev. Stat.; Hamilton Co. (Comrs.) v. Mannix, 9,Re. 189 (11 Bull. 184) ; See. 2733 Rev. Stat.; Zumstein v. Coal & Mining Co. 54 Ohio St. 264 [43 N. E. Rep. 329] ; Scott v. Athens (Vil.), 1 Dec. 84 .(1 N. P. 94); Chapman v. Bank, 56 Ohio St. 310, 324 [47 N. E. Rep. 54] ; Sturges v. Carter, 5 O. F. D. 428 [114 U. S. 511; 5 Sup. Ct. Rep. 1014].
    It has been held in many well considered cases that an exemption, in general terms, of all the property of a college, or other institution, extends only to the property actually used for its legitimate purposes as fully as if the exemption were expressly limited to such property. State v. Elizabeth, 28 N. J. Law (4 Dutcher) 103; State v. Flavell, 24 N. J. Law (4 Zab.) 370, 383; State v. Mansfield, 23 N. J. Law (3 Zab.) 510, 512’[57 Am. Dec. 409] ; Burrows,• Taxation 130; Lee v. Sturges, 46 Ohio St. 153 [19 N. E. Rep. 560; 2 L. R. A. 556] ; German Evang. Prot. Cemetery v. Brooks, 4 Circ. Dec. 478 (8 R. 439) ; Davis v. Camp Meeting Assn., 57 Ohio St. 257 [49 N. E. Rep. 401]; Ludlow v. Brewster, 2 Circ. Dec. 47 (3 R. 82) ; Zumstein v. Coal & Mining Co. 54 Ohio St. 264 [43 N. E. Rep. 329]; Cincinnati College v. State, 19 Ohio 110; Chapel of the Good Shepherd v. Boston (City), 120 Mass. 212; Detroit Young Men’s Soc. v. Detroit, 3 Mich. 172; see Sec. 2731 Rev. Stat.
   DUSTIN, J.

The plaintiff is an incorporated institution for the education and training of young men for the ministry of the gospel, open to persons of any sect or creed, but under the control and management of the synods of the United Presbyterian church of North America. It has an endowment fund of $77,550, which the auditor of said county placed upon the tax duplicate, and upon which the defendant, the treasurer, is threatening to collect the sum of $2,444 taxes.

Plaintiff! brought this action in the common pleas court to restrain the collection of said tax, alleging itself to be an institution of purely public charity, supported by the income of said fund, loaned for said purpose, and that no part thereof has been, or is, used for private profit; and that the placing of said sum upon said duplicate by the auditor was unlawful, and that the threatened collection of said illegal- tax by said treasurer would be a great and irreparable injury to said plaintiff.

To this petition the defendant filed a general demurrer, which was sustained by the court below, and the petition dismissed -with costs.

Plaintiff appealed, and the case is before us on the merits of the general demurrer.

Two questions arise:

First. Is the plaintiff, under its allegations of fact, as to its objects and purposes, really an “institution of purely public charity,” within the meaning of See. 2, Art. 12 of the constitution of Ohio?

This is conceded by 'counsel; but that concession not being conclusive of the law, we are cited to authorities which seem to settle the matter beyond controversy.

Gerke v. Purcell, 25 Ohio St. 229, holds that:

“A charity-, in a legal sense, includes not only gifts for the benefit of the poor, but endowments for the advancement of learning, * * * .
“Schools established by private donations, and which are carried on for the benefit of the public, and not with a view to profit, are ‘institutions of purely public charity’ within the meaning of the provision of the constitution which authorizes such institutions to be exempt from -taxation. ”

To the same effect are the holdings in Meyers v. Akins, 4 Circ. Dec. 425 (8 R. 228) ; Sowers v. Cyrenius, 39 Ohio St. 29 [48 Am. Rep. 418] ; Mannix v. Purcell, 46 Ohio St. 102 [19 N. E. Rep. 572; 2 L. R. A. 753; 15 Am. St. Rep. 562]; Davis v. Camp Meeting Assn. 57 Ohio St. 257 [49 N. E. Rep. 401] ; and McIntire Poor School v. Manufacturing Co. 9 Ohio 203 [34 Am. Dec. 436].

Second. Is this fund, the principal of which is not touched, but is loaned, and the interest only used for the purposes of the institution, exempt from taxation?

Upon this question issue is taken.

, Defendant claims that while the fund itself, if reduced to money and kept in the .treasury for use as needed, would not be taxable, the moment it is placed at interest and becomes a source of profit, it is analogous to the leasing of real estate for business purposes, and, following the doctrine of Cincinnati College v. State, 19 Ohio 110, it becomes taxable.

In that ease it appeared that the Cincinnati College borrowed money to improve its real estate, and, in order to obtain a revenue therefrom to repay the borrowed money, leased the lower floor of the building to business men for stoi-es; the purpose ultimately being, after payment of the debt, to use the revenue from the stores for the educational work of the college.

Under that state of facts the court held:

“The property of literary and scientific societies is only exempt from taxation when used exclusively for literary and scientific purposes. If used for other purposes it is liable to taxation, although the proceeds are in future to be applied for the promotion of'literature and science. ’ ’

Inasmuch as the rental of real estate only was involved, the case was necessarily decided upon a • construction of Sec. 3, Subdiv. 3 of the act then in force on the subject, (44 O. L. 86) which included in the property that should be exempt from taxation:

“All buildings belonging to scientific, literary or benevolent societies, used exclusively for scientific, literary or benevolent purposes, together with the land actually occupied by such institutions, not leased or otherwise used with a view to profit. ’ ’

Under that state of the law, and the admitted facts, the decision seems to 'have been highly just. But the learned judge who rendered the opinion, not satisfied with the undoubtedly correct conclusion to which the court had arrived as to Subdiv. 3 of the act in question, ventured to go beyond the single question then before that tribunal, and gave his individual views of what would be the construction of Subdiv. 4 of the act, which exempted “all moneys and credits belonging exclusively to universities, colleges, academies or public schools, of whatsoever name, or to religious, scientific, literary or benevolent societies, and appropriated solely to sustaining such institutions or societies,” and said, page 114:

“Whilst the money is in the fund of the institution, to be used solely to meet its expenditures, it is making nothing, it is withdrawn from the common business of life to be used solely to effect the object of such institution. But should the trustees of the society use such money in business, either investing it in property, or loaning it at interest, the property thus purchased, or the money thus loaned would be liable to taxation, as much as any other property or money at interest, 'no matter in whose hands it might be. As we have before intimated, the law applies to the property as it finds it in use, and not to what may, be done with its accumulations in future.” .

But this construction of Subdiv. 4 is a mere dictum, and wholly obiter, as is expressly conceded by the judge, since he had previously stated that Subdiv. 3 was “the only one that we think could be supposed to have any bearing on this case.”

We, therefore., are not bound by it as an expression of the law by the Supreme Court, and are free to give our own views upon the question, which are, that the word “credits,” in Subdiv. 6 of the statute now in force on the subject, and known as Sec. 2732 Rev. Stat., and providing for the exemption of “ail moneys and credits appropriated solely to sustain and, belonging exclusively to said institutions,” is broad enough to cover an endowment fund loaned to outside parties for the interest it may produce.

Such a fund when loaned cannot better be defined than to call it a “credit,” and such vro believe was the purpose of the legislature in so using it. '

Any other interpretation would seem to put a premium on unthrift, and would he in direct conflict with the teachings of the parable of the servant who hid his talent in the earth, instead of putting it to the exchangers, and was rebuked for his slothfulness and wickedness. (Matthew 25: 26.)

We also think it would he contrary to the policy of the state to hold otherwise.

The ordinance of 1787, announces as the policy of the 'northwest territory, that, “Religion, morality, and knowledge being necessary to good government and the happiness of mankind, schools and the means of education shall forever he encouraged.”

The constitution of 1802 reasserts this policy, and emphasizes it by introducing the word “essentially” before “necessary,” making ^it read, in Sec. 3, Art 8, “Religion, morality and knowledge being essentially necessary to good government. ’ ’

And the constitution of 1851, Sec. 7, Art:- 1, in similar, hut somewhat less felicitous language, makes the same announcement.

The consequence has been that a large number of educational institutions have been founded and liberally endowed, upon the faith of this wise state policy, and up to the present ease, no attempt has been made, so far as the court is aware, to place the burdens of taxation upon them, except as to real estate diverted from educational use.

Such a course would, in onr opinion, he suicidal, and has never been contemplated by the legislature. It would ruin one of the main aourees of onr power and influence as a state, and relegate the commonwealth to a less enlightened age.

Entertaining these views, therefore, as to the true construction of the statutes, and the policy of the state, the demurrer to the petition will he overruled.