author: WILDMAN, J.

text:
    AUTOMOBILES — NEGLIGENCE.
    [Lucas (6th) Circuit Court,
    February 3, 1911.]
    Parker, Wildman and Kinkade, JJ.
    Charles I. Barnes v. Kirk Bros. Automobile Co.
    Res Ipsa Loquitur Applies to Negligence by Selles of Automobile Injuring Purchaser During Inspection.
    The doctrine of res ipsa loquitur controls in fixing responsibility for injuries sustained by a prospective purchaser of an automobile, occasioned during his inspection, by its sudden and unexpected motion against him while being manipulated and operated in owner’s garage by such owner. Negligence of the latter is presumed and the burden of rebutting is on him.
    [Syllabus approved by the court.]
    Error to common pleas court.

      Elmer E. Davis and Orville S. Brumbach, for plaintiff in error.

      William H. McLellan and Harold W. Fraser, for defendant in error.
   WILDMAN, J.

This is a proceeding in error to reverse a judgment in the court below, in which Barnes was plaintiff and the Kirk Brothers Automobile Company defendant. It was a suit for a personal injury, and the defendant in the court below, on the trial to a jury, obtained a verdict in its favor.

The claimed error upon which most emphasis is placed in argument, and relied upon as a ground for reversal, is that the verdict is against the weight of the evidence. I believe it to be the consensus of view of the members of the circuit court that no case has ever been presented for our consideration, calling more clearly for the principle of res ipsa loquitur than the case at bar. The circumstances in brief are these: Barnes, the plaintiff, had been invited into the garage of the defendant company to inspect, as a possible purchaser, an electrical car, and while Mr. Edward A. Kirk, the manager of the defendant company, was manipulating the car and exhibiting it to Barnes, the car was by some means made to move suddenly, and, striking Mr. Barnes, who was standing in front of it, forcibly pushed him against a post and crushed his limb, or severely injured it, that the circumstances justify a claim that the defendant company was negligent. I have said that the court is unanimous in the view that the principle of res ipsa loquitur should apply. We may borrow an illustration by way of analogy from the use of a firearm. A points a loaded gun at B. The gun is discharged, and B receives an injury or is perhaps killed. The gun was charged with gunpowder; the automobile is charged with electricity. The gun is something which was intended, upon certain manipulations, the pulling of a trigger and the descending of the hammer, to go off, to be discharged. An automobile, upon certain manipulations, is expected and intended also to go off, to start in motion. Neither one is intended to kill some particular person or to injure him. It will not'do, under the circumstances of the use of the firearm which causes the injury, for the man who holds it in his control to say, “Although I knew that it was loaded, ’ ’ as Mr. Kirk unquestionably here knew that this automobile was charged with electricity, “and although possibly I pulled the trigger, still I am not ■ blamable, because I did not know that the gun was cocked; I did not know that the hammer had been raised.” If the gun is discharged, the presumption at once arises in the mind of any intelligent observer or any intelligent person who learns of the facts, that the man who had in his control this instrument of possible destruction was guilty of negligence. That presumption might be a rebuttable one, or it might not. There are cases of res ipsa loquitur where the presumption seems to have been held by the courts to be a conclusive presumption, and there are others, as in the case to which I shall refer in a moment, where it is deemed a rebuttable presumption, one in which,, while the inference is raised that the person having control of the machinery or the implement or whatever it be that has caused the injury, is guilty of negligence, it devolves upon him, by some explanation, or rebutting evidence, to meet such presumption.

The case of the Cincinnati Traction Co. v. Holzenkamp, 74 Ohio St. 379 [78 N. E. Rep. 529; 6 L. R. A. (N. S.) 800; 113 Am. St. Rep. 980], is sufficiently analogous to justify the application of the same principle to the present case, and in our judgment the case at bar calls far more clearly for its application than even the one which was under consideration by the Supreme Court. I read the syllabus:

“Proof of the falling of a trolley pole from an electric car, when it stopped at a usual stopping place, upon a person standing there for the purpose of getting upon the car, raises the presumption of negligence on the part of the traction company, and unless rebutted, the party injured is entitled to recover. ’ ’

After considering and disposing of a question sometimes raised, as to whether the principle of res' ipsa loquitur will apply to any other than a passenger entitled to protection and to a high degree of care from the common carrier, after, I say, considering and disposing of that question, and holding that the principle is a general one, applicable not only to cases of passengers, but to other cases, the Supreme Court finally, upon pages 388 and 389, give the result of their consideration of the facts in that case:

“The plaintiff was not only lawfully in the street but she stood where she had an implied invitation from the defendant to stand and it was the duty of the defendant to use reasonable care to avoid injuring her,” (just as in the case at bar, the plaintiff stood in a position where he was expressly invited, and where he was entitled to reasonable care on the part of the party inviting him there, to protect him), ‘ ‘ and the court was warranted in taking judicial notice of the fact, as it did, that such a thing as the breaking of the trolley pole and the falling of the trolley with a portion of the pole does not happen in the ordinary course of events unless there was some negligence either in its construction or in the management of it, and, this being so, the court very properly charged the jury that the plaintiff in the absence of any evidence tending to rebut the presumption of negligence was entitled to recover for her injuries. ’ ’

It is said that in the ease at bar there was evidence explaining just how it happened, that is, explaining everything that Mr. Kirk did, and that the evidence shows that he exercised ordinary(care; hut to the court it seems that after giving all the explanation that he is able to give as to what happened, he still leaves unexplained, absolutely unexplained, the principal and essential facts necessary to rebut the presumption of negligence. It is a matter of not the slightest consequence whether he started the machine by pulling up the starting plug, or whether he started it hy moving the lever; if the other part of the contrivance was not in such a neutral position as to make-it safe for him to move that particular thing which he did move, then we think that the presumption of negligence arises. Suppose that the man holding the gun says, immediately before he pulls the trigger, not knowing that the hammer is up, “This is how we make it go off,” pointing it at the person who receives the leaden charge. In this case Mr. Kirk says, “This, is the way we start it,” and then he either pulls the lever or he pulls up the starting plug, and the automobile proceeds,, being an inanimate object, to obey the intelligent will of the-person who is demonstrating how, when things are in proper -condition, the automobile may be started upon its mission. Now it will not do in the case of the firearm for the man to-say, “I didn’t know that the hammer was up when I pulled the trigger.” And just so it seems to us it will not do for Mr. Kirk to say, “I didn’t know that the plug was not in a neutral position when I moved the lever,” or to say, “I didn’t know the lever was not in a neutral position when I pulled the plug.” In either event it seems to us, that before moving that particular thing which caused the machine to start with its destructive effect, it was incumbent on him to-ascertain whether the machine was in such condition so that he could safely do so.

Our conclusion is that this verdict is against the weight of the evidence. In the case to which I have referred, Cincinnati Trac. Co. v. Holzenkamp, supra, the Supreme Court-held that the trial court very properly charged the jury that, the plaintiff, in the absence - of any evidence tending to rebut. the presumption of negligence, was entitled to recover for her injuries. In the case at bar, the court below charged the jury that the burden was on the plaintiff to show the negligence of the defendant. And while this was true as a general proposition, we think that that general instruction should have been qualified by a statement, in substance, that the disclosed circumstances, the undisputed circumstances, would raise such an inference or presumption of negligence as called upon the defendant for explanation, and unless evidence was offered sufficient to meet the presumption, not overbalance it, but to meet it, as is said by the court in the case of Klunk v. Railway, 74 Ohio St. 125 [77 N. E. Rep. 752], it would be the duty of the jury to return a verdict for the plaintiff. I will not tarry longer upon this phase of the ease. We think the court was in error in the unqualified charge which it gave.

Some argument has been made to us that if it be unexplained as to just what the trouble was, whether it was by reason of some carelessness of Mr. Kirk, or, on the other hand, some defect in the machine, and there being no defect in the machine charged in the petition, therefore the plaintiff would not be entitled to recover. But this argument does not address itself to us as having substantial force, in view of the fact that there is no evidence in the ease tending in the slightest degree to show that this machine was defective in any manner. It was a new machine; it had been tested to some extent, we understand, and there was nothing anywhere about it to indicate that it was defective. No one has claimed that it was in fact defective, and there was nothing to go to the jury on the subject.

Some questions of error have been raised by the rejection of evidence offered by plaintiff. We think that the plaintiff procured the introduction of all such evidence in the way of impeachment as he was fairly entitled to, the court permitting to go to the jury the statement of Kirk that he had forgotten about the lever or plug, whichever it was, and also his statement as to being to blame for the accident. The court properly did not permit considerable other evidence with regard to the company’s carrying insurance, and the effort of Mr. Kirk to forward the claim of Barnes for the purpose of getting Barnes the insurance.

It does not appear to us that there is any other matter in the record that would justify a reversal. If the language was used to the jury in argument by defendant’s counsel which is claimed by the plaintiff to have been used, it was misconduct and the court should have reprimanded him at the time for it. The Supreme Court, however, has held, as reported in State v. Young, 77 Ohio St. 529 [83 N. E. Rep. 898], that the remarks of counsel in addressing the jury, to be the basis of a proceeding in error upon the ground of misconduct of counsel, must be brought into the record of the trial by the certificate of the trial judge, as are other matters occurring upon the trial and in open court. They cannot be shown by affidavit. In the present case, they are introduced only by affidavit, and the certificate of the trial judge does not disclose that the language complained of was used.

It is said that the court erred in not giving certain requests which the plaintiff asked, but we find no exceptions in the record to the refusal to give such requests;

We find no reversible error in the record other than the two errors I have assigned as the ground for reversal, that the verdict is against the weight of the evidence entitling plaintiff to a new trial, and that the court did not qualify the general charge to the jury in the manner suggested. The case will be reversed and the cause remanded for a new trial.

Parker and Kinkade, JJ., concur.


source: Caselaw Access Project

author: G1FFEN, P. J.

license: Public Domain

text:
    ERROR — PLEADING—STREET RAILWAYS.
    [Hamilton (1st) Circuit Court,
    April 23, 1910.]
    Gilfen, Smith and Swing, JJ.

      Cincinnati Traction Co. v. Josephine Dorenkemper, Admrx.
    1. Verdict Based on Close Question of Contributory Negligence not Disturbed.
    In an action for death in collision between a street car and buggy, a verdict for plaintiff will not be disturbed on review where the question of contributory negligence was close and properly submitted to the jury.
    2. Motion for Judgment on Pleadings for Failure to Deny Contributory Negligence too Late After Issue Tried as if Denied.
    Failure to reply to allegation of contributory negligence does not entitle defendant to judgment on the pleadings, since demand therefor was not made until after both parties had submitted their evidence, and the cause tried as though such averment had been denied.
    3. Requiring Jury to Find Injured Free from Negligence Before Verdict for Him Different from Case in Which Negligence is Admitted.
    An instruction, requiring the jury to find plaintiff’s decedent free from negligence in a street railway collision case and that the motorman could or should, in the exercise of ordinary care, have avoided the accident before returning a verdict for plaintiff, cannot be tested by the rule in a case in ■ which contributory negligence was admitted. Erie Ry. v. McCormick, 69 Ohio St. 4'5, distinguished.

      Joseph Wilby, for plaintiff in error.

      Hor siman & Hor siman, for defendant in error:
    Cited and commented upon tbe following authorities: 1 Enc. PI. & Pr. 547, 621, 563, 570; 6 Thompson, Negligence See. 7017; Spice v. Steinruch, 14 Ohio St. 213; Zieverink v. Kemper, 50 Ohio St. 208 [34 N. E. Rep. 2501]; Baltimore & Ohio & O. By. v. Gibson, 41 Ohio St. 145; Jeffersonville, M. é I. By. v. Hendricks, 41 Ind. 48; McLaughlin v. Barnes, 8 Circ. Dec. 499 (18 R. 623), affirmed, Barnes v. McLaughlin, 57 Ohio St. 632.

      Affirmed, no op., Cincinnati Trac. Co. v. Dorenkemper, 83 O. S. 500; see 31 O. C. C. 11.

   G1FFEN, P. J.

The plaintiff’s intestate, Henry Dorenkemper, attempted to cross the street railway of the defendant traction company at a point in Harrison avenue, about 120 feet east of the intersection of Westwood avenue with Harrison avenue (Cincinnati), the tracks on the former connecting with the tracks on the latter avenue at an angle of twenty-three degrees and over. He was driving a horse and buggy on the south side of Harrison avenue, and could see an approaching ear in Westwood avenue only a short distance beyond the intersection. He waited for a ear coming eastwardly in Harrison avenue to pass him, then attempted to cross behind the car, and while on the track and after the horse had cleared it the buggy was struck by another car running in the same direction from Westwood avenue. In order to change the trolleys from the wires in Westwood avenue to those in Harrison avenue, the power was turned on and the ear given sufficient speed to keep it running while the transfer was made, the lights in the car being in the meantime extinguished. The night was dark, and there is testimony tending to show that the electric street lamp was burning dimly, if at all. There is testimony also tending to show that the Harrison avenue car and tire ear from Westwood avenue, known as the John street car, were running at a distance of about 500 feet apart. If the distance between them was only 300 feet, it would not be negligence on the part of the deceased, if he attempted to cross over immediately after the Harrison avenue car passed, even though he could and did see the John street car approaching, unless at a high and reckless rate of speed.

In the absence of circumstances warning him of the danger, he had a right to assume that the car would be run at a reasonable rate of speed and kept under control by the motorman. We are of the opinion, however, that he could not and did not see the car, when he started over, although he must have seen if when well onto the track and too late to retreat. It may be conceded that the question of contributory negligence presented by the record is a close one,'but we think it was properly submitted to the jury, and their finding should not be disturbed.

It is claimed further that contributory negligence as pleaded in the answer was admitted, as no reply was filed, although the plaintiff, after the case had been submitted to the jury, was given an opportunity to file one. i

The cause was tried without objection as though the allegation of new matter in the answer had been denied, and a demand for judgment on the pleadings after each party has introduced his evidence is too late. Lovell v. Wentworth, 39 Ohio St. 614.

The following portion of the general charge to the jury is objected to: >

“I will state to you further as to one of the elements of negligence claimed by the defendant, that if you should find from the evidence that the motorman of the defendant company could, in the exercise of ordinary care on his part, such care as an ordinarily prudent person, situated as he was, would exercise, could and should have seen Dorenkemper on the track before him in time to have stopped his car and avoid the accident, and by not seeing, in the exercise of ordinary care, what he could and should have seen, caused the accident, then your verdict would be for the plaintiff, provided Dorenkemper himself was not guilty of negligence on his part. ’ ’

This charge is within the rule stated in the case of Cincinnati Street Ry. v. Snell, 54 Ohio St. 197 [43 N. E. Rep. 207; 32 L. R. A. 276], and can not be tested by the rule stated in the third proposition of the syllabus in the ease of Erie Ry. v. McCormick, 69 Ohio St. 45 [68 N. E. Rep. 571].

The latter case has no application to the charge in question, because there the negligence of the plaintiff was admitted, while here the charge required the jury to find that the plaintiff was free from negligence.

The motion to strike out the answer of the witness, Boehning, in his deposition at page 4, should, we think, have been sustained, although the error was not prejudicial. It is manifest from all the evidence in the case, that excessive rate of speed, whereby the motorman was prevented from stopping the car in time to avoid the accident after seeing the deceased, was not a controlling issue in the case; but the negligence causing the collision was the inattention of the motorman, whereby he failed to see the horse and buggy on the track, when by the exercise of ordinary care he would have seen them, and by controlling the speed of the car would have avoided the collision.

This latter issue was tendered by an amendment to the petition, which was filed more than two years after the right of action accrued, and to which the defense of the statute of limitations was made. The cause of action was not thereby changed. It only described more particularly the negligence of the defendant in operating the ear, which was the basis of the action. Spice v. Steinruck, 14 Ohio St. 213; Zieverink v. Kemper, 50 Ohio St. 208 [34 N. E. Rep. 250].

This is the second time the ease has been tried, and although the damages awarded in the last trial are $1,000 more than in the former trial, we are not prepared to hold that at the age of the decedent, to wit, thirty-seven years, the pecuniary loss to his wife and four young children was less than the amount awarded by the jury. Finding no prejudicial error in the record the judgment will be affirmed.

Smith and Swing, JJ.? concur.


author: GIFFEN, P. J.

text:
    MASTER AND SERVANT — NEGLIGENCE.
    [Hamilton (1st) Circuit Court,
    January 8, 1910.]
    Giffen, Smith and Swing, JJ.

      Wm. Heffron Construction Co. et al. v. Maurice Coleman, Sr.
    1. Doctrine of Fellow Servant does not Apply to Action Based on Defective Appliances.
    The jury having found that the injury upon which an action for negligence is based was due to defective appliances and as such governed by Gen. Code 6242, error In 'charging the jury as to the duty of the master to furnish a safe place to work is immaterial. j

    2. Answer to Overrule Objected Question, “I Don’t Know,” not Prejudicial.
    Overruling an objection to a question to which the witness answered “I don’t know” followed by the relation of certain relevant facts he. did know, is not prejudicial.
    Error to common pleas court.

      Wm. Littleford, for plaintiff in error.

      Thomas L. Michie, for defendant in error:
    Cited and commented upon the following authorities: Clark v. Stillwell-Bieroe & Smifh-Vaile Co. 18 Dec. 741 (6 N. S. 448), affirmed, Clark v. Stilwell-Bierce & Smith-Vaile Co. 76 Ohio St. 576; Spieler Co. v. Ferguson, 25 O. C. C. 671 (7 N. S. 13), affirmed, Speiker Co. v. Ferguson, 71 Ohio St. 503; Davis v. Turner, 69 Ohio St. 101 [68 N. E. Rep. 8191].
    Error is prosecuted to reverse a judgment for $1,125 based on injuries to the minor son of the plaintiff, and caused by the falling of a platform on which a sewer construction gang was at work and with whom the boy was employed.

      Affirmed, no op., Heffron Construction Co. v. Coleman, 84 O. S. 450.

   GIFFEN, P. J.

The jury having specially found that the falling of the platform which caused the injury was due to a defective timber which was not sufficiently strengthened when repaired, the alleged error in charging the jury that it was the duty of the defendant to furnish a safe place to work is immaterial.

The case presented by the pleadings and the evidence is governed by Gen. Code 6242 and the doctrine of fellow-servant does not apply.

The alleged error in overruling the objection to the question at page 95 could not be prejudicial because the witness answered, “I don’t know,” then proceeded to state certain relevant facts that he did know.

The special findings of the jury and the fact that the president of the defendant company had actual knowledge of the defective condition of the platform are conclusive on the question of defendant’s negligence, and as young Coleman was not required to inspect the platform before resuming work, he was not guilty of negligence. Hence, the alleged error in the charge at page 288 of the bill of exceptions was not prejudicial; and for the same reason the charge concerning the duty of the master to furnish safe material was not prejudicial.

Other errors are assigned, but we find none that requires a reversal of the judgment. It will be affirmed.

Smith and Swing, JJ., concur.


author: ROCKEL, J.

text:
    ASSIGNMENT FOR CREDITORS — HOMESTEAD-PRACTICE.
    [Clark (2nd) Circuit Court,
    December 1, 1910.]
    Dustin, Allread and Rockel, JJ.
    Sarah M. Bentzel v. James P. Goodwin et al.
    1. Obdeb to Pat $500 in Lieu of Homestead out of Proceeds of Sale not Final Obdeb upon Which Suit on Assignee’s Bond mat be Brought.
    Where the assignor waives the right to select specific property, in lieu of a homestead under R. S. 5441 (Gen. Code 11738) and asks that the sum of $500 be allowed her out of the pro-deeds of the sale of such property and such sum is set off to her by the appraisers and the' action of the appraisers is approved by the court and said sum is ordered to be paid to the assignor out of the proceeds of sale. Held that such order of the court is not a final order upon which, in case the assignee fails to pay, an action could be brought against the assignee on his bond.
    2. Action on Bond Might lie upon Order of Distribution.
    If the order directing payment be made in' the court’s consideration of the question of distribution of the proceeds of sale of the property out of which such exemption could be paid, and all persons in interest were in court, a failure to comply with such order might sustain an action on the bond.
    3. Exceptions to Assignee’s Account Prerequisite to Suit on Bond for His Failure to Pat Exemption.
    The better and safer way to be followed, however, in case the assignee fails to pay such exemption claim, is, for the party claiming same to file exceptions to the assignee’s account and then if an order to pay be made and the assignee \ fails to comply therewith, bring an action on his bond.
    [Syllabus by the court.]
    Error to common pleas court.

      J. F. Locke, for plaintiff; in error.

      J. P. Goodwin, for defendants in error.
   ROCKEL, J.

In the court below, the plaintiff brought suit against the defendants as set forth in her petition. To this petition a demurrer was filed upon the ground that the petition does not state facts sufficient to constitute a cause of action.

The defendant in error, in support of the demurrer, contends among other things that whatever rights that the plaintiff in error may' have, m,ust be worked! out through the probate court.

The plaintiff says, and; for the purpose of this cause, they are the admitted facts: “That prior -to and on or about July 10, 1905, she was the owner' of a stock of goods and chattels in a storeroom in Springfield, Ohio, consisting of monuments» markers and other articles necessary for carrying on the business of furnishing and erecting monuments and tombstones» and some notes and book accounts, and that on said date plaintiff executed and delivered to the defendant, James P. Goodwin, her deed of assignment whereby she conveyed to him all her property in trust, for the benefit of her creditors, excepting therefrom and reserving to plaintiff, her exemption in lieu of a homestead, and other rights and property to which she might be entitled, under the homestead, exemptions, or other laws of the stajte of Ohio.

“At the time of the making of said deed of assignment and ever since, the plaintiff has been a resident of the state of Ohio, residing therein, being a widow and not the owner of a homestead or any real estate.

“Said James P. Goodwin, on or about July 10, 1905, filed said deed of assignment in the probate court of Clark county»( Ohio, and was thereupon appointed and qualified as assignee, of the plaintiff, and letters as such were duly issued to him by said court, and said defendant, James P. Goodwin, and the-Banker Surety Co. of Cleveland, Ohio, thereupon duly executed a joint and several assignee’s bond, a copy of which is hereto attached, marked exhibit ‘A,’ whereby they Became jointly and severally bound to the state of Ohio in the sum of $1,400, subject to the condition, that if the said James P„ Goodwin should administer the said trust according to law» then said obligation should be void, otherwise to remain in full force.

“Thereupon, said James P. Goodwin entered upon said trust of said assignment, and as such assignee at once took possession of all of said property of plaintiff, and of the storeroom containing the same, and on or about July 14, 1905, by the oaths of Andrew Bennett, S. E. Fay and H. G. Forbes, who had been appointed appraisers by said probate court, proceeded to make an inventory and appraisement of said property and to set off and allow to plaintiff her homestead rights therein, and the said appraisers at the request of the plaintiff set off and allowed to plaintiff in lieu of her homestead in said property the sum of $500 to be paid to her out of the proceeds of the sales thereof. On or about July 20, 1905, the said inventory, appraisement and allowance of said sum of $500 ■to plaintiff in lieu of her homestead therein made by said appraisers was approved and confirmed by said probate court, .and said sum of $500 was ordered by said court to be paid to ■plaintiff by said assignee out of the proceeds of the sales of :said property.

“Thereupon, under the orders of said court, the said assignee proceeded to sell the property so assigned to him by this plaintiff, and to collect the notes and book accounts so assigned to him, and on May 2, 1906, the said defendant, James P. Goodwin, as such assignee, filed his account in said probate court, reporting to said court that he had received from the sales of said property, and from collections of said notes and book accounts the sum of $1,107.75, and on June 29, 1906, said account was approved by said probate court.

“That on or about May 2, 1906, the plaintiff demanded of the said defendant the said sum of $500 and that on or about the - day of--, 1906, said defendant paid to plaintiff the sum of $350 thereof, and has since paid her the sum of $20 thereof, but the exact dates of such payments the plaintiff is unable to state.

“The defendant, said James P. Goodwin, has neglected, failed and refused to pay to plaintiff the balance of said sum of $500 so allowed and set off to her in lieu of her homestead out of the proceeds of the sales of said property, being the sum of $130, with interest from May. 2, 1906, although he has been frequently requested so to do.

“There is due the plaintiff from the defendants, by reason of the premis.es, the sum of $130, with interest from May 2, 1906, for which she prays judgment.”

The plaintiff in error contends that when the appraisers in making the inventory allowed to her the $500 in lieu of a homestead and that such report having been approved and confirmed by the probate court and the same ordered to be paid by that court, that upon the assignee defendants’ refusal to pay such amount, that a right of action accrued against the assignee and the surety on his bond; and that thereafter such right of action could be enforced by the plaintiff in a court of general jurisdiction. E. S. 5441 (G. C. 11738) provides that, “husband and wife living together with an unmarried daughter or minor son, every widow and every unmarried female, having in good faith the care, maintenance and custody of any minor child or children of a deceased relative, resident of Ohio, and not the owner of a homestead, may, in lieu thereof, hold exempt from levy and sale, real or personal property to be selected by such person, his agent or attorney, at any time before sale, not exceeding $500 in value, in addition to the amount of chattel property otherwise by law exempted.”

It will be observed that this section does not allow a gross sum of money in lieu of a homestead, but allows specific property to be held which is to be selected by the person desiring the same, not to exceed $500 in value. In the case at bar, according to the petition, the plaintiff requested that the same be not set off to her in specific property, but that money out of the proceeds to the amount of $500 be allowed her.

While the petition does not so state, it may be assumed that the assignee agreed to this request, waiving a strict compliance with the statute. It is very often found to be to the advantage of both the person claiming the exemptions as well as the creditors whom the assignee represents, that such be done; that in compliance with such request the appraisers in their return reported such fact to the probate court and this inventory was approved and confirmed and by the averments of the petition at the same time, said sum of $500 was ordered by said court to be paid to the plaintiff by said assignee out of the proceeds of the saíe of such property, receiving therefor the sum of $1,100.

The question thus presented is, was such order of the probate court, such a final order as would justify the plaintiff in bringing the suit in question, and when it was made, did the probate court lose jurisdiction to further consider the question whether or not the plaintiff was really entitled to the exemption set aside to her.

It is well to observe, as hereinbefore stated, that the plaintiff waived the right to have specific articles set off to her and a strict compliance with the statute in that respect, and that the order of payment by the probate court was made before the property was sold and converted into money.

It seems, therefore, to us that this order made by the probate court was not a final order, and was subject to review by that court by motion, or in some other proper manner, when the question of distribution of the funds derived from the sale of the property was before the court. That what was really intended by that order was a reservation to the plaintiff of her rights under this statute and that the amount should be paid to her ourt of the proceeds of the sale upon a final distribution of the same. To hold otherwise might be manifestly unjust to creditors and other parties in interest. No doubt at. the time this order was made the matter came up to the probate court principally upon the approval of the appraisement. If on motion in the probate court the assignee had been ordered to distribute to the plaintiff the sum of $500 out of the proceeds then in his hands, derived from the sale of such property, then the plaintiff would have had' a right of action in the court of common pleas against the assignee and his bond if he would have failed to comply with such order. Even upon this proposition, there might be some doubt if such order was made prior to the expiration of eight months from the time that the assignment- was made.

There is an averment in the petition that the said property was sold, and from it and notes, etc., the assignee realized $1,107.75, and that he filed' his account in the probate court which was by the court approved. What expenditures, were made or whether anything remains on hand does, not appear or that any order was made as to plaintiff’s claim.

When the account was filed, the plaintiff had full opportunity to except thereto and in that way have had. an order of the probate court as to the assignee’s action on her claim. It may he that all the funds coming into the hands of the assignee were properly expended in a proper administration of the trust, and no further payment could be made on her claims. Perchance there might have been liens, prior to hers, that exhausted the entire fund.

The petition does not disclose the fact but what there may still be sufficient funds in the hands of the assignee to satisfy her claim in full. If that be true, she has yet a right to go into the probate court and have the court pass upon her right to have her claim satisfied, and if the court should find that her claim is unsatisfied, and an order would be, made that the assignee pay the same and he should neglect, then an action like the present could be maintained. Perhaps then, as the probate court could not enforce the payment, by an order for the payment of money, by contempt proceedings, no other remedy would be open to the plaintiff.

As a general rule it may be stated, and the courts have so held, all matters in assignments should be worked out through the probate court, and that court has full and complete jurisdiction in all cases relating thereto, except where its powers are inadequate to grant relief.-

The matter as to whether or not the plaintiff, being a widow, is entitled to this exemption, under the peculiar punctuation of the statute, as it then stood, we have not found it necessary to consider under the views we have taken. Suffice to say were the ease of Brown v. Parham, 25 O. C. C. 640 [1 N. S. 602, 4 N. S. 344], not affirmed by the Supreme Court, we might find ourselves not in harmony with the conclusions, of that court.

We therefore find no error in the court below and the same is affirmed.

Dustin and Allread, JJ., concur.


author: ALLREAD, J.

text:
    INTOXICATING LIQUORS.
    [Greene (2nd) Circuit Court,
    June 23, 1910.]
    Rockel, Dustin and Allread, JJ.
    State v. John H. Berry. State v. Michael R. Killeen.
    1. Certificate of Clerk to Prove County Option Election Admissible.
    In prosecutions under Gen. Code 13195 (R. S. 6942) certificate of the clerk as to the result of the county option election may be offered in evidence with oral evidence to prove how a county voted in such election.
    2. Bartender not a “Keeper.”
    The term “keeper” as used in Gen. Code 13195 (R. S. 6942) does not include a mere clerk or bartender without managerial authority. '
    [Syllabus approved by the court.]
    Error to common pleas court.

      W. F. Orr, Pros. Atty., for plaintiff in error:
    Cited and commented upon the following authorities: Lynch v. State, 31 O. C. C. 352 (12 N. S. 330) ; Kubach v. State, 25 O. C. C. 488 (2 N. S. 133); State v. Smith, 69 Ohio St. 196 [68 N. E. Rep. 1044]; Kappes v. State, 25 O. C. C. 723 (4 N. S. 14); Matthews v. State, 25 Ohio St. 536; Smith v. State, 22 Ohio St. 539; 16 Cyc. 848; Beeves v. State, 47 Tenn. 96; State v. Mat-lock, 70 Iowa 229 [30 N. W. Rep. 495] ’; Tucker v. People, 122 111. 583 [13 N. E. Rep. 809;].

      H. G. Armstrong, for defendant in error.
   ALLREAD, J.

The defendant in each of the cases was convicted of an offense under Gen. Code 13195 (R. S. 6942), for keeping a place where intoxicating liquors were furnished in violation of law, • and sentenced to pay a fine of $500 and costs.

It was contended by counsel for the defendant in the mayor’s court, that the affidavits charging the offense are insufficient. This contention is met and answered by the cases of Weaver v. State, 74 Ohio St. 53 [77 N. E. Rep. 273]; Lynch v. State, 31 O. C. C. 352 (12 N. S. 331); affirmed, no. op., Lynch v. State, 81 O. S. 489. It is also clear that the affidavits do not charge a second offense.

Upon the trial of the cases, the charges were supported by .evidence showing a violation of the Rose County Local Option law. No other statute was shown to have been violated as a foundation of the offense here charged. It is contended that the magistrate erred in admitting as evidence,the certificate of the clerk as to the result of the Rose County Local Option election. We are of the opinion that the admission of documentary evidence of this character does not violate the section of the bill of rights guaranteeing the accused the right to confront the witnesses.

A more serious question arises as to the right to use the certificate of election as evidence in a case not strictly under the Rose County Local Option act. The provision of that act is that “in all trials for a violation of this act,” the entry of a certified copy shall be prima facie evidence, etc.

It is true that the prosecution is under R. S. 6942 but the offense so prescribed is founded as well upon some other section claimed to have been violated. In every prosecution under R. S. 6942, it is apparent that the specific statute defining the law violated is to be read into and made a part of Gen. Code 13195 (R. S. 6942). So that when the evidence offered in a prosection under Gen. Code 13195 (R. S. 6942) tends to show a violation of the Rose County Local Option act, the act must be looked to and read into R. S. 6942 (Gen. Code 13195), under which the prosecution is had.

It is asserted that this does not apply to the method of proof prescribed. We are, • however, of the opinion that the act Gen. Code 13195 (R. S. 6942), includes by reference and recital not only the elements of the offense but the means of proof. Still if we are wrong in this, we find in the oral evidence ample proof of the county having voted “dry.” And such evidence was evidently accepted as sufficient proof in the case of Lynch v. State, supra. The admission of the certificate was therefore not prejudicial. The evidence as against John H. Berry is sufficient to justify the conviction, is undisputed, and no prejudicial error is found.

' The court of common please, therefore, erred in reversing the judgment of the magistrate as to Berry and in discharging him. Under force Gen. Code 13763 {R. S. 7367), enacted subsequently to the decision of Mich v. State, 72 Ohio St. 388 [74 N. E. Rep. 284], we are required to reverse the judgment of the common pleas court, vacate the judgment of discharge and affirm the magistrate’s conviction and sentence of John II. Berry.

Killeen appears from the evidence to have been the bartender and to have made the sales shown in the evidence. Berry, the owner, was present and in control of the business. He was also present at other times referred to in the evidence when Killeen was acting. It is also shown by stipulation that Berry was the sole owner and that Killeen had no interest except as employe of Berry, was without authority and subject to the order and direction of the owner.

This stipulation in connection, with the other evidence brings the case within the dictum of Judge Day in Schultz v. State, 32 Ohio St. 276, in which it is intimated, if not asserted, that the term “keeper” does not include a mere clerk or servant without managerial authority. We are, therefore, constrained to hold that no case was made out against Killeen, and that the court of common pleas correctly reversed the magistrate’s conviction of Killeen and directed his discharge.

The judgment of the court of common pleas in respect to Killeen is, therefore, affirmed.

Rockei and Dustin, JJ„ concur.


author: SWING, J.

text:
    STREET RAILWAYS.
    [Hamilton (1st) Circuit Court,
    July 16, 1910.]
    Giffen, Smith and Swing, JJ.

      Cincinnati Traction Co. v. Amelia Hamburger.
    Passenger cannot Recover eor Injuries Sustained While Attempting to Pass a Box and Basket in Aisle Deposited bt Other Passengers.
    A street railway company is not negligent in permitting passengers to carry packages and bundles into the cars; hence, a passenger cannot recover for injuries sustained in attempting to get by a basket and box placed in the aisle by other passengers, especially since the injured passenger made no request to the conductor or otherwise to have the obstructions removed.
    Error to common pleas.

      Miller Out colt and J. W. Heintzman, for plaintiff in error.

      Horstman & Horstman, for defendant in error

      Affirmed, Hamburger v. Traction Co. 84 O. S. 456.

   SWING, J.

This is an action in this court on error to the judgment of the superior court of Cincinnati. In the latter court the defendant in error recovered a judgment against the plaintiff in error for personal injuries received while a passenger on plaintiff in error’s car. The gist of plaintiff’s action is thus stated in her petition: '

“That defendant * * * negligently permitted passengers who were seated in the same seat with plaintiff and in such position that she was required to pass by them to get out of said ear, to place in front of them between the seats and in the space through which plaintiff was required to pass to get out of said car a very large basket and a very large box, which basket and box were placed upon the floor of said car at the feet of the respective passengers who had carried the same into said ear; that the defendant thereby caused the passage-way out of said car, which plaintiff was required to use to get out of the same, to be negligently obstructed; further, that as plaintiff was about to leave said car, after having signaled the conductor to that effect and while such basket and box were obstructing her exit, the conductor in charge of the operation of said car negligently called to the plaintiff to hurry up and get out of said car, and that such obstruction was so negligently placed therein with the knowledge and consent of said conductor, and further, by reason of the negligent conduct of said conductor in unduly hastening her exit from said car, the plaintiff as she was attempting to get around said basket and box and over the same twisted her right leg at the knee so that she sustained a very severe injury.”

The defendant company answered setting up a, general denial, and further alleging that if plaintiff was injured that she negligently contributed to her injury.

During the argument in this court counsel stated to the court that the allegations in the petition as to the conductor having negligently hurried the plaintiff to get out of the car was withdrawn from the jury, when the plaintiff in her testimony testified that the conductor called to her to hurry up when she was on the running board of the car in the act of stepping off, and this evidence would not support the charge in the petition. No journal entry was made to this effect, but if necessary this, could be remedied by a nunc pro tunc entry on suggestion of a diminution of the record.

The case therefore was submitted to the jury on the allegation of the negligence of the company in permitting passengers, to place a large basket and a large box between the seats of the car in which plaintiff was riding. It is evident that no direct injury was inflicted on the plaintiff by the placing of these articles between the seats; the injury, if any, was caused by plaintiff in attempting to pass around or over these obstructions. In her evidence plaintiff says the injury was caused in passing by the basket. The evidence shows that the plaintiff saw these obstructions and that she did not request the owners of the parcels or the conductor to remove them so that she could pass, out, but took the chance of her passing by them with safety. There is no positive evidence that shows that the conductor knew that these parcels obstructed the exit of the plaintiff; the evidence does tend to show that the conductor had knowledge that the passengers took these parcels with them when they boarded the car.

It is a matter of common knowledge that passengers on street cars take with them parcels of different kinds which they commonly carry on the streets. This is evidently a reasonable and proper use of the cars, and if passengers were prohibited from so using the cars it would deny to the public a right for which the cars were created. And one entering a car must be held'to do so with knowledge that other passengers may have with them parcels of the character mentioned.

There is evidence in, the record to the effect that these parcels were very large, both basket, and box, the basket as large as a large clothes basket and the box from two and one-half to three feet wide. The plaintiff was seated in the fourth seat.

It is a matter of common knowledge that the distance between the seats of these summer cars is very limited, not to exceed seventeen or eighteen inches, and therefore no basket which could properly be called a very large basket and no very large box, two and one-half or three feet wide, could be placed between these seats, and it is certainly self-evident that no large clothes basket could possibly be placed between these seats, and therefore it is evident that the size of these parcels can not be correctly described as being very large, but on the contrary, they must be deemed as being of ordinary size.

The syllabus in the case of Van Winkle v. Railway, 46 Hun. 564, is as follows:

“A street railroad company is not chargeable with negligence for permitting passengers to place baskets between their feet; passengers attempting to pass over the obstruction assume the risk and danger of so doing.”

In the opinion the court say:

“Neither do we conclude that the defendant or its agents were chargeable with negligence or inattention for permitting one passenger to carry his basket in the car and place it on the floor between his feet and another to take with him his umbrella. It is quite usual and customary for passengers to carry with them- hand bags and baskets and umbrellas and other small parcels, and no rule is showm for their exclusion. It may beeomevthe duty of conductors to cause their removal upon complaint of inconvenience or annoyance or obstruction to other passengers, but without some such complaint or request we are unaware of any rule which would require their removal. If this plaintiff had requested the conductor to clear the passage-, way for her exit from the car, it would have been his duty to comply with her request, and so far as the case discloses the facts the conductor of the car was without knowledge of any obstruction in the passage-way between the seats. Our examination fails therefore to disclose any negligence of the defendant, and it is unnecessary to make any examination respecting the contributory negligence of the plaintiff. Yet upon this point it is to be said that the plaintiff, with full knowledge of the obstruction in her pathway, undertook to pass unassisted between the two men over the basket and umbrella, and by that act plaintiff assumed all the dangers and risks of such a passage, and the disastrous results of such hazardous undertaking can not be charged against the defendant. ’ ’

We regard this as sound law, and as the facts in that ease are very similar to the facts in this case, we are of the opinion that the law as thus stated clearly applies to the case at bar. If we are correct in this view the plaintiff can not recover under the pleadings and the evidence. And the defendant having moved the court to direct the jury to return a verdict for the defendant at the conclusion of all the evidence, it should have been granted. The judgment will therefore be reversed and judgment rendered for plaintiff in error.

Giffen and Smith, JJ., concur.


author: HENRY, J.

text:
    MUNICIPAL CORPORATIONS.
    [Cuyahoga (8th) Circuit Court,
    November 14, 1910.]
    Henry, Marvin and Winch, JJ.

      Cleveland (City) ex rel. Baker v. Cleveland (City) et al.
    Under Longwoéth Act 1 Per Cent and 4 Per Cent Limitation on City Bonds do not Apply to Voted Bonds.
    Under Gen. Code 3945 the limitations on issue of bonds by a city provided for in Gen. Code 3940 and 3941 limiting council to 1 per cent in one year, 3942 to 4 per cent in all, do not apply to bonds authorized by vote.
    [Syllabus approved by the court.]
    Appeal from common pleas court.

      Newton D. Baker, city solicitor, for plaintiff.

      Squire, Sanders & Dempsey and W. D. Wilkin, assistant city solicitor, for defendants.

      Affirmed, no op., Cleveland v. Cleveland, 83 O. S. 482.

   HENRY, J.

This is an action to enjoin an issue of bonds by the city of Cleveland as exceeding the statutory limit of municipal indebtedness.

Gen. Code 3939 authorizes the council of any municipal corporation by two-thirds’ vote to issue bonds for any of twenty-seven different purposes.

Gen. Code 3940 and 3941 limit the exercise of this power in any fiscal year to the issuing of bonds in an aggregate amount not exceeding 1 per cent of the assessed valuation, unless the excess be authorized by a two-thirds’ vote of the electorate.

Gen. Code 3942 further limits the exercise of, the power to issue bonds to an aggregate net indebtedness of 4 per cent of the assessed valuation, unless an excess be authorized by like vote.

Gen. Code 3943 defines net indebtedness to be the difference between the amount of outstanding bonds and the sum in the sinking fund for their redemption.

Gen. Code 3944 provides that net indebtedness does not include obligations for work to be done until the- bonds therefor are issued.

Gen. Code 3945 provides further (and I quote it exactly because of its disputed meaning) that:

“Such limitations of 1 per cent and 4 per cent hereinbefore prescribed shall not affect (or, as phrased in R. S. 2833b, shall not be construed as affecting) bonds lawfully issued for such purposes upon the approval of the electors of the corporation. ’ ’

Gen. Code 3946 and 3947 provide still, further that special assessment bonds and waterworks bonds, for the payment, of-which the special sources of revenue suffice, and also bonds, issued before April 29, 1902, “shall not be considered in ascertaining such limitations, ’ ’ but that regular annual tax levies shall be made, sufficient to pay the bonds at maturity.

Gen. Code 3948 to 3954, inclusive, define the mode of’ procedure for voting bonds in excess of said limitations; and the last section prohibits a net indebtedness .exceeding 8 per cent in any case. It concludes with these words: “In ascertaining the limitations of such 8 per cent and of such 4 per cent, all such bonds shall be considered except those hereinbefore excluded. ’ ’

Those excluded are defined by Gen. Code 3943 to 3946, inclusive, as above summarized, viz., the bond redemption fund, certain obligations for which bonds have been authorized but not yet issued, special assessment bonds, waterworks revenue bonds, and bonds issued before April 29, 1902. In ascertaining the 4 per cent limitation of bonds issuable without vote, are we to exclude also all bonds previously authorized by vote ? The question arises here because the city of Cleveland has a bonded debt of more than 4 per cent, partly authorized by vote and partly issued without vote. The bonds here sought to be enjoined will not increase the amount of the latter class above 4 ,per cent of the assessed valuation.

The question then is whether the Longworth act, which includes the General Code sections above noted, divides municipal bonds' issued thereunder into two distinct classes, voted bonds and unvoted bonds, and applies tbe 4 per cent limitation only to the latter class, or whether it treats all bonds issued thereunder as constituting but one class for the application of the 4 per cent limitation. The solution of this question, turns chiefly upon the construction to be given to Gen. Code 3945, above quoted.

According to the view which has hitherto prevailed among city officials and the state bar generally, these bonds should not be enjoined; but a recent opinion of the attorney-general, reinforced by that of eminent counsel here, retained to pass upon this issue of bonds, is to the contrary effect.

What is meant by the provision of Gen. Code 3945, that the limitations of 1 and 4 per cent “shall not affect bonds”' voted by the electors? The plaintiff’s construction is that the limitations shall not disturb bonds so approved. This accords: with the popular meaning of the word “affect”; but it is absurdly redundant, as saying that duly validated bonds shall not be deemed invalid.

The defendant’s construction is more nearly in accordance with the primary etymological sense of the word, and the reasonable intent of the legislature, is that the limitations shall not act upon bonds so approved; i. e., that voted bonds “shall not be considered in ascertaining such limitations.” Why not. then have used this phraseology, as in the next section it is. used? The only reply is that the successive sections represent separate amendments engrafted on the Longworth act from time to time by different legislatures. Gen. Code 3946 is certainly more happily phrased than is the preceding section with, its equivocal wording. Yet kindred uses of the term “affect” obtain in mathematics and in law. A given quantity is “affected” with or by a coefficient, exponent, logarithm, divisor,, or the like. One is “affected” by, or with, constructive notice. A privy is “affected” with another’s fraud. So here, a city’s corporate power of incurring indebtedness, and hence the actual bonded debt, which it has incurred, are affected by statute with a 4 per cent limitation. But the limitation does not thus affect bonds issued upon the approval of the electors.

The intent of' the legislature thus appears to be that the-limitations of 1 and 4 per cent shall not act upon or apply to-bonds issued upon approval of the electors.

Construing Gen. Code 3945 by itself, this may seem to be not merely an uncommon, but also a very strained, construction of the word “affect.” But when we come to consider by what mathematical processes the limitation is actually applied in ascertaining whether or not a city’s net debt has reached, or is about to pass, the limit fixed by statute, the construction ceases to seem strained at all. The computation may be begun from either of two opposite directions.

Approaching the problem from the side of the assessed valuation as the starting point, or base, we may multiply that number by the rate per cent of limitation, i. e., by 4 per cent, four-hundredths, or one-twenty-fifth, and compare the product with the actual net debt.

Approaching the problem from the other side, we may take •the actual net debt as the starting point, multiply this number by twenty-five (which is the equivalent of dividing it by 4 per cent, or one-twenty-fifth), and compare the product with the assessed valuation.

In other words, we may start on the side of the assessed valuation, or on the side of the actual net debt, and affect either one of them quantitatively with the per cent limitation, according to the recognized arithmetical rule applicable to the particular ease.

The limitation of course amounts to nothing except it be applied; and it can be applied only by some method of computation. The methods described are equally valid. Bach method necessarily involves, first or last, the application of the appropriate mathematical process to the quantity representing the net debt. The per cent limitation, by one or other of these processes, mathematically affects the net debt, that is, it acts upon it, which is the etymological meaning of the term “affects. ’ ’

It may be granted that this is not the commonest sense of the word. Popularly it connotes change, transformation. But thus construed, the word as used in the Longworth act is manifestly inappropriate. The unusual meaning is much the more reasonable; and therefore it is to be preferred as the true meaning.

Bearing in mind what has been said about the process of applying the limitations of the Longworth act, it is not a wide departure from even the popular sense of the word “affect” to ask, what is the net debt which the per cent limitation is to affect? What constitutes or enters into the net debt which, the limitation is to act upon or apply to? In the process of concretely applying the limitation, what quantity is our multiplier or coefficient, to affect? To what, in the comparison of. our ascertained limit of debt, is our standard to apply?

The answer seems perfectly plain though negatively expressed in Gen. Code 3945: “Such limitations of 1 per cent and 4 per cent shall not affect (act upon) bonds lawfully issued for such purposes upon the approval of the electors of the corporation. ’ ’

This we hold to be the meaning of Gen. Code 3945 and of the limitations contained in the Longworth act; whence it follows that the petition must be, and it is, dismissed.

Marvin and Winch, JJ., concur.


text:
    INSURANCE — QUO WARRANTO.
    [Hamilton (1st) Circuit Court,
    April 2, 1910.]
    GifCen, Smith and Swing, JJ.

      State ex rel. Ellis, Atty. Gen. v. Union Central L. Ins. Co.
    1. False Representations to Prospective Policy Holders as to Participation in Profits do not Make a Stock Company a Mutual One.
    That representations made hy life insurance companies are not all true is a matter of general knowledge. Hence, representations concededly intended to deceive prospective policy holders or recklessly made by a stock company that it was doing a mutual business, and that policy holders, electing to take participating contracts, had written in their contracts that they should share in the profits “as apportioned by the company” does not transform such company into a mutual company or even make the participating contracts, mutual insurance contracts, or estop the company from treating the surplus funds as belonging to the stockholders,
    2. Commingling of Funds of Participating and Nonparticipating Contracts not Misuse of Charter Rights of Stock Company.
    The doctrine of commingling of funds cannot be resorted to in showing misuse of charter privileges by a life insurance company where neither contract, law nor usage has required such company to keep its funds separate.
    S. Public Mischief not Private Rights Determinable by Quo Warranto Proceedings.
    In quo warranto against an insurance company for alleged misuse of its franchise, the only question for consideration is whether some public mischief is being done or threatened; a court cannot concern itself with the rights of policy holders or stockholders.
    [Syllabus approved by the court.]-
    Quo Warranto.

      JJ. G. Denman, Atty. Gen., Einkead <& Rogers, A. 1. Vorys, W. E. Miller and C. F. Williams, for plaintiff:
    Cited and commented upon the following authorities: Greeff v. Equitable Life Assur. Soc. .160 N. Y. 19 [54 N. E. Rep. 712; 73 Am. St. Rep. 659]; Pomeroy, Eq. Jur. Secs. 819, 1088, 1170, 1184; Herman, Estoppel Secs. 1187, 1195; New York L. Ins. Go. v. Eggleston, 96 U. S. 572 [24 L. Ed. 841]; 2 Thompson, Corporations (2 ed.) Sec. 1946; 2 Herman, Estoppel 925; Steele v. Insurance Co. 3 Mo. App. 207; Wood v. Devarris, 11 Exch. Rep. 492; Collett v. Morrison, 9 Hare 173; Pence v. Arbuckle, 22 Minn. 417; Kinney v. Whiton, 44 Conn. 269; Waterford (Bd. of Ed.) v. Bank, 70 Hun. 520 [24 N. Y. Supp. 392] ; Beardsley v. Foot, 14 Ohio St. 414 [84 Am. Dec. 405]; Miller v. Sullivan,-13 Dee. Re. 544 (1 C. S. C. 281) ; Baynolds v. Cleveland {Qity), 28 Ó. C. C. 463 (8 N. S. 281) ; Ensel v. Levy, 46 Ohio St. 255 [19 N. E. Rep. 597]; Carlton v. Insurance Co. 72 G-a. 371; McGovern v. Knox, 21 Ohio St, 547 [8 Am. Rep. 80]; Rapp v. Elevator Co. 87 N. Y. Supp. 459; Southern Mut. Ins. Co. v. Montague, 84 Ky. 653 [2 S. W. Rep. 443; 4 Am. St: Rep. 218]; Lanvill v. Burke, 10 Circ. Dec. 605 (19 R. 513) ; Central Nat. Bank v. Insurance Co. 104 U. S. 54 [26 L. Ed. 693]; Pomeroy, Eq. Jurisp. Sec. 1076; Cook y. Addison, L. R. Eq. 466; United States L. Ins. Co. v. Spinks, 29 Ky. L. R. 960 [96 S. W. Rep. 889].

      Lawrence Maxwell, Robert Ramsey and J. B. Foraker, for defendant.

      Affirmed, no op., State v. Insurance Co. 84 O. S. 459.

   SWING, J.

This is an action in quo warranto, wherein the state claims the company has' misused its franchise in that it declared a stock dividend of $400,000 in the year 1908 out of its surplus funds.

The company was organized in the year 1867 as a stock company, with an authorized capital of $500,000 — $100,000 of’ which was paid in. The company continued to do business on this capital stock until 1908, when the capital stock was increased to $500,000. During the existence of the company it wrote both participating and nonparticipating contracts of insurance. Under able management the company became very prosperous, so that at the date last mentioned it had above liabilities a surplus of over $2,400,000. During the forty years of its existence no separate account of the expense and profits was kept of the participating and nonparticipating business. Beginning in 1907 séveral of the states passed laws requiring life insurance companies to separate the surplus derived from these two different kinds of policies and to maintain this separation, and about the same time the state of California passed a law requiring life insurance companies doing business in that state to have a paid up capital of $200,000.

To meet these requirements this company first attempted to ascertain the amount produced by the different kinds of policies respectively. The result of this investigation showed that the nonparticipating business had produced nearly $8Q0,-000, and out of this the company declared the stock dividend of $400,000. The state challenged the correctness of the result arrived at by the company, and under the direction of superintendents of insurance of several states Mr. Wolfe, an actuary of New York City, made an investigation of the affairs of the company with the result that a different conclusion was reached from that made by the company. The trial of this case occupied about seven days, and the most of this time was occupied in submitting to the court evidence bearing on the question whether the company had the surplus of $800,000 arising out of its nonparticipating business. It is admitted, and it is self-evident, that it is impracticable to accurately separate these funds within any reasonable time, so that an approximation can only be had. And it is also amitted this approximation can be reached only by estimation after the proper determination of certain facts. We deem it inexpedient, and it certainly would serve no good purpose for us to enter into a review of the evidence in this opinion, but we content ourselves by stating that after a careful consideration of the evidence we have reached the conclusion that there was in this surplus at the time in question a sum largely in excess of $400,000, which was placed there by the nonparticipating business.

We mention two facts which we deem of great probative force in reaching this conclusion. One is that we find Mr. Wolfe’s result was not accurate, and when we say this we intend no reflection on Mr. Wolfe, or his ability, for he impressed us as being a very able man, but the mass of material that he had for investigation and the limited time at his disposal account for this; and secondly, we regard as the most convincing evidence in the whole case the result of the nonparticipating business for the years 1908-1909, which show beyond any question a very large surplus on the nonpartieipating business for those years, and this was the same business that had been in existence in the years next previous. The surplus from this business in these two years was more than $400,000.

Beyond any question, therefore, we think there is in the surplus of the company derived from the profits of its nonparticipating business a sum largely in excess of the $400,000.

It is claimed, however, by the state that the company is estopped Hy representations made by it from treating this fund as belonging to the stockholders. A good deal of evidence was offered by the state on the trial pertinent to this matter. It consisted largely of extracts from certain publications made by the company in the nature of advertising matter, wherein it was stated that all the profits went to the shareholders, that the company did a mutual business, and that the policy holders got all the profits. And similar representations were made in reports to the insurance commissioner of the state, and evidence was offered as to the statements made by the company in a legislative investigation made by the state of Wisconsin to the same effect.

That all of these statements so made were not true must be conceded; that they were calculated to deceive prospective policy holders may also be conceded, and possibly it might be said that they were either recklessly made or intended to deceive; but it is a matter of common knowledge that all representations made by life insurance companies and life insurance agents are not true. It is an undisputed fact that this company was not a mutual company and did not do a mutual insurance business; it was a stock company, and wrote participating and nonparticipating contracts of insurance, and these contracts of insurance, and what was necessarily a part of them, contained the measure of the rights and liabilities of the parties to them. Nothing can be taken from and nothing can be added to them. They are fixed. The policy holder who entered into a nonpartieipating contract knew he had no mutual contract of insurance, the terms of his contract prohibited this, and the policy holder who took out a participating contract had stated in the contract the exact nature of. the .participation that he was to enjoy, and in these policies it was that they should share in the profits “as apportioned by the company.” Such a contract is in no sense a mutual insurance contract.

This company had at the date in question a surplus of over $2,400,000. To whom does this belong? Undoubtedly to the company. And who are the company? The stockholders. Not a penny of it belongs to any policy holder. This surplus was accumulated by the company through a wise and judicious management of its business, the foundation of which was from the premiums paid into the company by i'ts policy holders, the most of which came no doubt from the policies long since matured and which have been adjusted to the entire satisfaction of the policy holder and the company. This surplus adds strength and stability to the company as a whole, and is not there for the benefit or protection of the participating policy holders. It was not so intended and could not have been so understood. The evidence in this case disclosed that during a large portion of the time that the company wrote nonparticipating policies they produced a loss, and such loss was more than made good from the profit derived from the participating business. The state of Ohio did not object to this, nor did any policy holder, so far as we are advised.

There was no law or contract that compelled the company to create this surplus, and so far as we are aware there is no contract or law that compels the company to maintain it. Its maintenance, like its creation, must rest in the sound discretion of its board of directors. It can never be returned to the policy holders who created it, for the most of these contracts have terminated.

It is claimed on the part of the state that the company is estopped from declaring this stock dividend by its conduct and representations, and the doctrine of estoppel as laid down in the books is invoked in support of the claim. But in our judgment it has no application. The complaint here is that the company has misused its franchise, or has acted beyond its powers, to speak more accurately; and the only way that this writ can be invoked is on the theory that'a wrong has been done the public. The court can not in this action concern itself with the rights of policy holders or stockholders, but can only consider wherein some public mischief is done or threatened. If the rights of any policy holder had been invaded it is for him to take such action as he may deem best for his protection, but not for the state to do it for him.

"We are unable to see how the act of the directors in declaring this stock divided has invaded any right of any policy holder, and much less inflicted any injury on the public. When the directors declared this stock dividend it took nothing away from the company, and added nothing to what it already had. If it had any effect at all, it was to increase the stability of the company and add to the security of the policy holder. The only change affecting the stockholder was that if the company •earned the dividend he would receive dividends on this stock.

Looking at it in any light, if we are correct in our conclusion that the evidence shows that, there is at the present time $10,000,000 in surplus placed there from the nonparticipating business, the excess over the $400,000 would pay these dividends for twenty years to come, and there could be no possible injury to the public.

What has just been said applies as well to the claim of the state that the doctrine of commingling of funds applies here; that not having kept a separate account of the funds produced by the participating and the nonparticipating policy holders, the company can not separate these funds. Now this principle has no application .here. Neither by contract, law •or usage was the company compelled to, or expected to, keep these funds separate. Until laws were passed requiring it, there were no separate funds. It was one fund, and one only, •and there was no occasion to keep them separate.

The only other matter that we desire to refer to is the •claim that the company had no power to change its by-laws so that this stock might be issued. It. must be admitted that the same power that created the by-laws had the power to change them, and in this case we can .not see wherein in doing so any right of the public has been invaded. »

This ease has been fully and ably argued to us at length by learned and able counsel, and able and elaborate briefs have been submitted to us. In argument and in briefs numerous authorities have been cited in support of the legal propositions involved. We do not deem it expedient, however, to discuss these authorities in this opinion, but content ourselves by stating the law as we conceive it to be.

In our judgment the relief asked for must be denied, and the petition be dismissed.

Giffen and Smith, JJ., concur.


text:
    MORTGAGES.
    [Lucas (6th) Circuit Court,
    1910.]
    Wildman, Kinkade and Richards, JJ.
    Ohio Savings Bank & Trust Co. v. Ida E. Strausz et al.
    1. Voluntary Dismissal of Foreclosure Proceedings by First Mortgagee does not Oust Jurisdiction to Grant Relief to Subsequent Mortgagee.
    The voluntary dismissal of a cause of action by a plaintiff mortgagee asking to have 'its mortgage foreclosed will not oust the jurisdiction of án equity court to grant relief to a second mortgagee of part of the land, asking to have the cloud of the first mortgage removed by a sale in parcels.
    2. Second Mortgagee may Maintain Action to Foreclose Mortgage without Paying Claim of Prior Mortgagee.
    A second or junior mortgagee may maintain an action to foreclose his mortgage, without first paying off the .debt of the first mortgage.
    3. Junior Mortgagee Brought in by First Mortgagee Granted Relief on Cross Petition Notwithstanding Dismissal of Suit by Prior Mortgagee.
    A second mortgagee who has been brought into a foreclosure suit by a first mortgagee, may be granted relief upon a cross petition to have the cloud of the first mortgage removed from the property, even though the first mortgagee voluntarily dismisses his cause of action, and a third party who has purchased the equity of redemption desires to have the first mortgage remain upon the property.
    [Syllabus by the court.]
    Appeal from common pleas court.

      Charles K. Friedman, for the Ohio Savings Bank & Trust Co. and Willard F. Robison.

      Orville S. Brumback, for the Mutual Aid Building & Loan Co.
   WILDMAN, J.

This case has been submitted to us on the demurrers of the plaintiff, the Ohio Savings Bank & Trust Company, and Willard F. Robison, to the amended and supplemental cross petition of the Mutual Aid Building & Loan Company.

The original action was a suit by the Ohio Savings Bank & Trust Company to foreclose a mortgage which it held on certain property owned by Ida E. Strausz and her husband.

The Mutual Aid Building & Loan Company was made a party, having a supposed interest in the property, and on June 3, 1910, filed a pleading in the case. The case on motion of plaintiff company was ordered dismissed by the court without prejudice.

The Mutual Aid Building & Loan Company excepted to this order, and thereafter attempted to proceed with its claims as to the property in controversy.

It seems, without a full review of the circumstances (which are somewhat complicated) out of which this litigation has grown, that the Mutual Aid Building & Loan Company had at one time itself a junior mortgage upon the property of the Strauszs, which mortgage covered a small part of the same property that is described in, the petition of the plaintiff company, and which required some corrective instrument or instruments to be made by the Strauszs to the Mutual Aid Building & Loan Company to make this apparent. This was done and ultimately the Mutual Aid Building & Loan Company obtained title to the same property subject to whatever interest the plaintiff company, the Ohio Savings Bank & Trust Company, had by virtue of its prior encumbrance.

In the pleading first filed by the Mutual Aid Building & Loan Company it asked for the protection of its interests by a prayer which seeks to compel the Ohio Savings Bank & Trust Company to make sale of the property in parcels so as to subject first to the lien of its encumbrance the property not covered by the mortgage of the Mutual Aid Building & Loan Company, and to which the Mutual Aid Building &. Loan Company ultimately obtained title.

The prayer was that the court would determine the validity of the notes and mortgages set forth in the petition, and if same should be found a valid and subsisting lien against the property owned by the Mutual Aid Building & Loan Company, that the property described in the petition might be ordered sold in parcels.

It prayed also for all relief to which in equity and good conscience the defendant company was entitled.

After the dismissal of the Ohio Savings Bank & Trust Company from the case, a so-called amended and supplemental petition was filed by the Mutual Aid Building & Loan Company, in which they alleged that the Strauszs had made conveyance to Willard F. Robison and had him brought in as a party, and alleged further in its pleadings that there was a conspiracy between Robison, who was an officer of the plaintiff company, and the plaintiff company, to defeat the claims of the Mutual Aid Building & Loan Company by the dismissal of the plaintiff company out of the case and preventing the Mutual Aid Company from litigating its claims therein.

Motion was made to strike the amended and supplemental petition from the files, both by the Ohio Savings Bank & Trust Company and by Willard F. Robison, and these motions were by the court overruled.

Demurrers were also filed by both plaintiff company and Willard F. Robison and subsequently withdrawn, and after-wards demurrers were again filed and heard and sustained by the court. The Mutual Aid Building & Loan Company, not desiring to plead further, its claims were dismissed by final judgment and order.

From these proceedings and final judgment, an appeal was taken to our court, and the case is presented to us upon the demurrers of the Ohio Savings Bank & Trust Company and Willard F. Robison to the claims asserted by the Mutual Aid Building & Loan Company.

It is insisted that after the dismissal of the plaintiff’s case there was no proceeding remaining in court in which the defendant company could have its rights litigated, and it is insisted by Willard F. Robison that he is not properly brought into the case under the circumstances, and that the court has no jurisdiction to render judgment against him; and I suppose the plaintiff company is asserting substantially the same thing, that there is no jurisdiction now in court to grant the asked for relief, or any relief, to the Mutual Aid Building & 'Loan Company.

Without dwelling too long on the question of jurisdiction, it suffices to say that we are of the view that the Mutual Aid Building & Loan Company after having been brought into court by the suit of the Ohio Savings Bank & Trust Company had the right to file its cross petition as to matters touching claims in the plaintiff’s petition, and ask the relief which it did ask.

In other words, when a first mortgagee brings suit to foreclose his mortgage, a subsequent mortgagee may properly ask, if the mortgage is on part of the same property, that the land be sold in parcels in such a way as first to subject that property which is not covered by the second mortgage, on the principle of equity that where one creditor has recourse to two funds, although his equity be prior, he must exhaust the fund upon which he has the exclusive right, so as not to prejudice the equity or right which is held by the other party.

As to Willard F. Robison, by invoking the jurisdiction of thé court in his motion and demurrer, he gave the court full jurisdiction of his person. I will not stop to cite authorities. "We think that under the law in Ohio it is quite clear that Willard F. Robison got himself into court, so that if the court had no original jurisdiction to entertain a suit of the Mutual Aid Building and Loan Company to quiet its title as against Willard F. Robison, or indeed, as against the Ohio Savings Bank & Trust Company, yet after the Mutual Aid Building & Loan Company was brought in as a defendant, and the court acquired original jurisdiction of the subject-matter to determine the right of the parties in such an action, the court below had jurisdiction to go on and determine the case, and that the filing of the demurrers by the Ohio Savings Bank & Trust Company and Willard F. Robison to the subsequent pleading of the Mutual Aid Building & Loan Company substantially kept all the parties in court, and gave the court jurisdiction to determine the matters in controversy.

. One of the questions involved in this" case we have had a good deal of trouble in determining, viz.: whether a person who has become the owner of property, a part of which is covered by a mortgage, which the mortgagee does not desire at present to foreclose but which has become absolute, can compel its foreclosure so as to prevent the lien from remaining upon his property for an indefinite time, perhaps in the end growing by reason of accrued interest to such an amount as to endanger the property of the person who has become the owner, when otherwise it would be saved, and also at all times preventing his sale of the property by reason of the cloud upon it. The assertion is made in _this supplemental and amended cross petition, that this mortgage of the Ohio Savings Bank & Trust Company is a cloud upon the title which the Mutual Aid Building & Loan Company has obtained from the Strauszs, and that the claim made by W. F. Robison by virtue of Ms deed from the Strauszs is also a cloud, and the Mutual Aid Company is endeavoring to have these clouds removed so that it may be in shape to give a perfect title to a purchaser in case it desires to sell.

We think the Mutual Aid Building & Loan Company is right in its contention that it may compel foreclosure of the mortgage which covers a part of its property and have a sale of the property covered by the Ohio Savings Bank & Trust Company mortgage in parcels, so as to protect the interests of the Mutual Aid Building & Loan Company. If it is right in that contention at all, it may do so in this suit.

After a great deal of doubt in the courts of this state for many years, it has been settled conclusively that a junior mortgagee may bring a suit to foreclose even if the land has been sold upon the suit of a first mortgagee and has gone into the hands of the purchaser at a judicial sale. The junior mortgagee is not now, under the decisions in Ohio, compelled to redeem from the first mortgage by paying off the debt secured thereby; he is not compelled either to redeem, or bring suit to procure redemption. He may bring a suit asking to foreclose his mortgage, making the mortgagor and prior mortgagee parties so that the rights of such first mortgagee may be asserted.

Bearing upon these questions I will cite one of the cases in Ohio, the case of Holliger v. Bates, 43 Ohio St. 437 [2 N. E. Rep. 841]. I read from the first and second paragraphs of the syllabus:

“Where a senior * mortgagee forecloses his mortgage, and sells the property, without making a junior mortgagee a party, or giving him notice, the purchaser at such judicial sale, whether it be the senior mortgagee or a stranger, acquires his title subject to the right of redemption by the junior mortgagee, and the same rule .applies where the junior mortgagee has assigned all his interest in the mortgage, and the notes secured thereby to a third person who is not a party and is without notice of such proceedings and sale.
“In such a case, the owner of the notes and junior mortgage, not being a party to said proceedings to foreclose and sell, is not affected thereby, and may maintain an action against such purchaser to foreclose his mortgage.”

Now, as I stated, for many years it was contended that the only right of a junior encumbrancer was to compel redemption; that is, to compel the acceptance of his offer to redeem. He could, if the first mortgagee refused to' accept from him the amount of the indebtedness, bring proceedings in equity to compel such an acceptance.

I remember while at the bar many years ago of being an attorney in a case where this question was raised, that there was no power except to redeem the property from the prior mortgagee; the court, however, held otherwise and subsequently the Supreme Court made holding in Stewart v. Railway, 53 Ohio St. 151, 168 [41 N. E. Rep. 247; 29 L. R. A. 438], expressing the same rule as expressed in Holliger v. Bates, supra. So that it was established in Ohio, and has been repeatedly held since, that the junior mortgagee has the power to foreclose, which is not affected even by the sale of the property under the prior mortgage.

Now, if the Mutual Aid Building & Loan Company were still mortgagee and were asserting its right to foreclose, there would be no question of its power to do so. There is, however, a dictum by Chief Justice Day in the case of Stewart v. Johnson, 30 Ohio St. 24, 31, in which he says as matter which he seems to take for granted, that while the mortgagee could do that, a person who gets his title from a second mortgagee cannot do anything of the kind. That is, that the power to foreclose a mortgage resides only in the person who holds the mortgage, and an owner of the property has no power except to redeem; but this question was not involved in the case in which the opinion was announced by Judge Day, and we think that the rule is inequitable when applied to a case like the one at bar, and also in conflict with an earlier decision of the Supreme Court which seems to have been overlooked, or if not overlooked no mention of it is made in that case, viz:

The Miami Exporting Co. v. Bank, Wri. 249. I read from two paragraphs of the syllabus.

It is said in paragraphs 9 and 11 that “Such purchaser, (that is, a purchaser who has acquired title to the property) as well as a subsequent' mortgagee, has a right in equity to compel a prior mortgagee who has other security, to exhaust the other security, before the resort to the fund on which they have a joint claim.”

It is held in the case that "it is not essential that there should be an offer to redeem, or to pay the money into court. A prayer for general relief is sufficient. * * * If the other property is sufficient to pay the debt, and sometimes relief will be granted more extensive and beneficial than the prayer. ’ *

I will not stop to read the case, but I think it applies to the case at bar, and there is a certain equity which commends itself to the conscience of the court in the application of this, rule, since under the circumstances of this case no substantial prejudice will- result to the plaintiff company by compelling it either to cancel its mortgage upon this small piece of land which is covered by the title of the Mutual Aid Building & Loan Company, or else to foreclose fits mortgage and sell the property in parcels. This position is supported by Miami Exporting Co. v. Bank, supra.

Now, where the second mortgagee has, as is the undoubted law of Ohio, the right to foreclose his mortgage, not simply to redeem, it would seem that where a person has purchased his interest, in the subsequent protection of that interest so purchased, the purchaser should for the purpose of subrogation step into the shoes of the second mortgagee.

In this case it happens that the person who gets the title, the Mutual Aid Building & Loan Company, is the same person originally holding a mortgage. In other words, the title is given to the junior mortgagee, and it seems to be asserted here, or at least is a logical question, as to whether that power which existed in the junior mortgagee is lessened when the legal title for the security of the debt is added to the complete equity of redemption. _ It does not seem in equity he ought to have less power when .he has taken, in addition to the interest he had as mortgagee, the interest of all that the grantors were able to convey. In other words, the condition of the mortgage was practically extinguished; it is no longer a mere mortgage, but is the absolute title.

In the case of Frische v. Kramer, 16 Ohio 125 [47 Am. Dec. 368], I find on page 139 this language by Judge Hitchcock:

"And it seems clearly to the court, that when it is sold, •¡the purchaser takes the interest, not only of- the defendants fin the case, but the interest of the mortgagee.”

That is, in the case at bar the Mutual Aid’ Building & Doan Company acquired not only the interest of the Strauszs, ¡but the interest of the mortgagee; and again quoting:

"So far as the land is concerned, he (it) is subrogated to all the rights of the mortgagee.”

There are other cases in which this principle of subrogation is applied, cases that are quite similar in some respects to some of the conditions pertaining to this case. I will not stop further to consider them.

It does not seem to us that the Mutual Aid Building &- Doan Company by its acceptance of title from the Strauszs parted with any right which it had to protect its interest by -compelling the prior mortgagee to grant such relief as is sought here in the alternative. We think the court is not powerless to protect what seems so manifestly just a claim as that asserted by the Mutual Aid Building & Loan Company.

As to Robison:- It is clearly asserted in this answer and supplemental pleading that he is conspiring with the Ohio Savings Bank & Trust Company to the injury of the Mutual Aid Building & Loan Company. All this is admitted by his -demurrer. He not only admits that he is an officer of the Ohio Savings Bank & Trust Company, but he admits the conspiracy and purpose.

We think that these demurrers should be overruled, and such will be the judgment of the court.

Kinkade and Richards, JJ., concur.