author: SHIELDS, J.

text:
    GAS — MUNICIPAL CORPORATIONS.
    [Licking (5th) Court of Appeals,
    May Term, 1914.]
    Voorhees, Shields and Powell, JJ.

      Newark (City) v. Newark Nat. Gas & Fuel Co.
    1. Municipal Power to Regulate Price of. Gas and Electricity, Exercise Presumed Fair.
    Municipal corporations, by virtue of Sec. 3982 G. C., authorizing councils to regulate the price gas and electric companies may charge consumers, are clothed with power to fix the maximum rate to consumers furnished and in the absence of proof to the contrary the presumption is that a municipal council in the exercise of this regulation acted with due regard to the rights of the consumer and furnisher.
    2. Court Determines Reasonableness of Gas Rate but does not Fix Rates.
    The power to regulate rates for gas and electricity furnished the public in municipalities under Sec. 3982 G. C. does not reside in the courts, the latter are limited to the judicial determination of the reasonableness of the rate fixed.
    3. Gas and Electric Utilities and Public have Reciprocal Rights in Gas Rates.
    Gas and electric light and power companies supplying private consumers are entitled to a fair return upon the reasonable value of that produced for the public convenience, and the public is reciprocally entitled to demand that no more be exacted from consumers than what is furnished is reasonably worth. In fixing such rates both corporation and public are to be equally considered.
    4. Value of Plant, Net Profits, Fair return Basis for Determining Reasonableness of Council Rates.
    Courts determining the reasonableness of rates fixed by ordinance of municipality for gas and electricity to the public, (1) are to ascertain at the time the value of the plant furnishing, (2) the total net profits under rates fixed, (3) whether such profits provide a fair return on the reasonable value of the plant.
    5. Relative Location to Local Gas Field Element in Determining Rate if Confiscatory.
    A municipality, situated substantially contiguous to a local natural gas field, considered in connection with the fact that for several years prior citizens thereof had been furnished with gas at a rate not in excess of that prescribed by ordinance, is entitled to a lower rate for gas than the market value of gas in more distant municipalities. Hence, if at such rate a gas company makes a profit from eight to ten per cent for several years, no confiscatory rate is established.

      6. Absence of Consent of Gas Company to Rate Prescribed not Denial of Protection of Law.
    A municipal ordinance, fixing for five years a maximum rate for gas is a regulation of property clothed with a public interest, and, though without the consent of the gas company, it does not deny the equal protection of the law and due process of law, if the rate prescribed has and will produce an adequate return to the gas company.
    7. Fair Test of Rate Prerequisite to Restraining Imposition of New Rate.
    Courts will decline to interfere by injunction with rate making legislation before a fair test is made; if the rate should subsequently appear to be confiscatory it will be soon enough for the courts to afford a remedy.
    [Syllabus approved by the court.]
    Error to common pleas court.

      Frank A. Bolton, Roderic Jones, Kibler & Kibler, and Ralph Norpel, city solicitor, for plaintiff.

      S. M. Douglas, Eugene Mackey, and Fitzgibbon & Montgomery, for defendant.

      Affirmed, no op., Newark Nat. Gas & Fuel Co. v. Newark, 91 O. S. 000; 60 Bull. 806.

   SHIELDS, J.

On March. 6, 1911, the city council of the city of Newark, Ohio, duly passed a city ordinance fixing the maximum price of natural gas to be charged by the Newark Natural Gas & Fuel Co., its successors or assigns, for the period of five years next ensuing, at twenty cents per thousand for each cubic foot of gas used or consumed by all persons, firms or corporations using or consuming the same, with a discount of 10 per cent allowed if payment was made on or before the tenth day of the succeeding month. Declining to accept the provisions of the ordinance, the defendant company, which for years had been and then was supplying said city and its citizens with gas under an ordinance of said city passed February 21, 1898, immediately caused notice to be given to its consumers of gas by publication that on and after the April, 1911, reading of meters the price to be charged for gas would be twenty-five cents for each thousand cubic feet, subject to a discount of 10 per cent if paid on or before the tenth of each succeeding month and that unless said price was so paid the further supply of gas to said city and its citizens would be discontinued. Soon after said publication was made a petition was filed by the city of Newark, by Frank A. Bolton, its solicitor, in the court of common pleas of Licking county, Ohio, to enforce by mandatory injunction the provisions of said city ordinance passed March 6, 1911.

Stating it more fully and at length, said petition recites:

That the said Frank A. Bolton is the duly elected, qualified and acting solicitor of the city of Newark, Ohio, a municipal corporation and that said action is brought by direction of its city council. That the defendant, the Newark Natural Gas & Fuel Company, is a corporation and is furnishing natural gas for fuel and light to said city and its inhabitants by virtue of a franchise granted by the said city council by ordinance passed February 21, 1898, by the terms of which there was granted to the defendant company the right and privilege of laying pipes in and through the streets and alleys and public grounds of said city for the purpose of supplying and conveying natural gas or fuel gas to the inhabitants of said city for a period of twenty-five years. That for the period of ten years from the passage of said ordinance, the defendant company, was entitled to charge consumers of gas, who are inhabitants of said city, for gas furnished at the rate of twenty-five cents for one thousand cubic feet. That within ninety days' after the passing and taking effect of said ordinance the acceptance thereof by said defendant was required to be filed with the said city council. That said ordinance was duly published as required by law. That within ninety days from the passing, and taking effect of said ordinance, to wit, March 21, 1898, the defendant company accepted the same in writing. That a copy of said ordinance and the acceptance thereof by the defendant company is attached to said petition.

That from the date of the passage of said ordinance franchise up to the sixth day of March, 1911, said city council passed no further ordinance regulating the price to be charged by the defendant company to said city and its inhabitants for fuel and light, or either. That ever since the passage and acceptance of said ordinance the defendant company has been continuously, and now is supplying gas to said city and its inhabitants by virtue of the rights and privileges granted by said ordinance.

That on the said sixth day of March, 1911, said city council duly passed an ordinance regulating and fixing the maximum price the defendant company may charge consumers thereof, whether the city itself or its inhabitants, under said franchise for the period of five years at the rate of twenty cents per thousand cubic feet of natural gas for fuel and light, meter measurement, with 10 per cent discount on all bills paid before the tenth of each succeeding month. That said last named ordinance was on the ninth day of March, 1911, duly signed, approved by the mayor of said city, and was published as required by law, a copy of which ordinance is attached to said petition. That said last named ordinance is now in full force and that the price as therein fixed by said city council is the same price that the defendant company has been and is now charging said city and its inhabitants who have been and now are consumers of gas in said city, and ever since the defendant began furnishing gas under the ordinance granting said franchise. That the defendant company had due knowledge and notice of said ordinance passed March 6, 1911.

That the defendant company is notifying and has notified said city and the inhabitants thereof that on and after the April, 1911, réading of meters the price charged for gas would be twenty-five cents for one thousand cubic feet, subject to a discount of 10 per cent if paid on or before the tenth day of the following month, and it threatened that unless said price is paid by said city and its inhabitants on or before May 10, 1911, the defendant company would stop the supply of gas and refuse to furnish gas for fuel and light to said city or any of the inhabitants who refused to pay said price so fixed by the defendant company. That the said defendant company insists upon its right to make the price for all gas furnished to said city and its inhabitants, on and after April 1, 1911, the sum of twenty-five cents per thousand cubic feet, subject to said discount of 10 per cent, and no less, and unless restrained by the court, all consumers of gas furnished by the defendant company would be required to pay twenty-five cents per thousand cubic feet, subject to said discount on and after May 1, 1911, contrary to the provisions of said ordinance of March 6, 1911.

That for the purpose of avoiding a multiplicity of suits for the defendant company’s threatened refusal to comply with the provisions of said ordinance of March 6, 1911, said solicitor brings this suit.

The plaintiff further says that said city and its inhabitants are each and all of them without remedy at law and can get no relief from the processes of a court of equity, and they have no adequate remedy at law.

Wherefore, the plaintiff prays that on the final hearing of this cause the defendant company may be perpetually enjoined from charging, collecting, or in any manner attempting to collect from said city, or any of its inhabitants any other, greater or further sum for gas by it delivered for heat and light than the maximum sum or rate fixed by said ordinance passed March 6, 1911, and that the defendant company be enjoined to specifically perform said ordinance and franchise, and that pending the final hearing of said case a temporary injunction issue to a like effect, restraining the defendant company in like manner and for all other and further relief to which said city or any of its inhabitants may be entitled in equity.

Upon the foregoing petition being filed, a temporary injunction was allowed to issue as prayed for in said petition, except as to the specific performance of said ordinance, by Chas. W. Seward, judge of the court of common pleas of said county.

In its amended answer to said petition the defendant company sets up four separate defenses, and for its first defense says:

It denies that it threatens or has threatened that the defendant company would stop the supply of gas and refuses to furnish gas to said city or any of its inhabitants who refuse to pay the price fixed by said defendant company; that while it admits that said ordinance of March 6, 1911, was passed in due form by said city council, fixing the price that the defendant i lay charge consumers, it avers that said ordinance is unreasonable, and that the rate fixed denies to the defendant any adequate profit for the five years next ensuing and operates as a fraud upon the property rights of the defendant, and is therefore unreasonable and void, and it denies all the other averments in said petition not expressly admitted in said ground of defense set up in said amended answer.

For a second defense the defendant says that said ordinance of March 6, 1911, is contrary to and in violation of See. 1 of Art. 1 of the bill of rights of the constitution of the state of Ohio and is therefore null and void and of no effect for the reason that said ordinance is violative and a denial of the due protection and possession of the property of said defendant without its consent.

For a third defense the defendant says that said ordinance of March 6, 1911, is contrary to and in violation of Sec. 19 of Art. 1 of the bill of rights of the constitution of the state of Ohio and is therefore null and void and of no effect, for the reason that it is the taking of private property without due process of law, in that said ordinance attempts to compel the defendant to furnish gas at a price without just compensation or profit and without any equivalent or just compensation in money and against and without the consent of the defendant.

For a fourth defense the defendant says that said ordinance is contrary to and in violation of Sec. 1 of .the fourteenth amendment to the constitution of the United States and is therefore null and void and of no effect for that it is a denial to this defendant of the equal protection of the laws and without due process of law, in this, that it tends and is designed to compel the defendant company to furnish gas for a period and at a price without adequate return, compensation or profit and without the consent of the defendant.

The defendant prays that the temporary restraining order granted herein may be dissolved; that the prayer of the petition be denied and that said ordinance of March 6, 1911, be declared unreasonable, null and void and for all proper relief.

After a demurrer was overruled to the second and third defenses of the defendant company’s amended answer, a reply was filed by the plaintiff, and replying to the first defense therein denies that said ordinance of March 6, 1911, is unreasonable, and it denies that the rate fixed by said ordinance denies to the defendant company any adequate profit for the five years next ensuing and operates as a fraud upon the property rights of the defendant and is therefore unreasonable and void.

And for a reply to the second, third and fourth defenses of said defendant’s amended answer the plaintiff denies each and all of the allegations therein contained.

The case comes into this court by appeal from the judgment of the court of common pleas of said county and was tried upon the evidence introduced in support of the issues raised by the pleadings filed in the case.

While there are several defenses pleaded in the amended answer of the defendant company, when taken together, they substantially raise the same question and make the .same defense, namely, that the ordinance of March 6, 1911, is constitutionally invalid, both under the constitution of the United States and under the constitution of the state of Ohio, because said ordinance fixes a maximum rate to be charged by the defendant company for the supply of natural gas to the city of Newark and its citizens for the period of five years from the date of its passage and taking- effect that is both unreasonable and confiscatory in its effect, and that said ordinance is therefore null and void.

' The power given by statute to the council of a municipality to regulate the price of natural gas is to be found in Sec. 3982 Gen. Code, which provides that:

“The council of a municipality in which electric lighting companies, natural or artificial gas companies, gas light or coke companies, or companies for supplying water for public or private consumption, are established, or into which their wires, mains or pipes are conducted, may regulate from time to time the price which such companies, may charge for electric light, or for gas for lighting or fuel purposes, or for water for public or private consumption, furnished by such companies to the citizens, public grounds, and buildings, streets, lanes," alleys, avenues, wharves, and landing places, or for fire protection. Such companies shall in no event charge more for electric light, natural or artificial gas, or water, furnished to such corporation or individuals, than the price specified by ordinance of council,” etc.

It will thus be seen that the term “regulate” is employed in the foregoing statute. Evidently the statute contemplates that the power thus given in fixing rates shall not be exercised short of an impartial and thorough investigation into all the facts with the ultimate object of doing justice both to the public service corporation and to the public. It does not contemplate an arbitrary fixing of rates irrespective of the rights of the corporation or the public, but reasonable rates and just compensation, and to do otherwise would be violative of the spirit of the statute and of public duty. What was actually done in the premises by the city council is not now before this court and ’the presumption is, in the absence of proof to the contrary, that it acted with due regard to the rights of both the corporation and the public. And that it was clothed with power to regulate the price of gas to be furnished by the defendant company is not open to question.

Said ordinance having been passed by the council, signed and approved by the mayor and having become operative after publication, what then? The defendant company not only refused to comply with its terms but notified its consumers of gas that on and after the April, 1911, reading of meters that the price to be charged for gas would be twenty-five cents for one thousand cubic feet, subject to a discount of 10 per cent if paid on or before the tenth day of the succeeding month. It is fair to assume that this action was taken for the reasons set forth in the defendant company’s amended answer.

As has already been pointed out, the city council has the power to regulate by ordinance the price of gas in municipalities, but this power does not reside in the court, whose province and duty it is to judicially declare whether or not the rate fixed in said ordinance is reasonable or otherwise. With this duty discharged its power is exhausted. What constitutes reasonable rates for this purpose is a subject that has given the courts no little concern. The various conditions that may be present in one case may be absent in another. Hence there is no uniform rule laid down to be followed by courts, for no particular rates can be established for all cases. Quoting from the opinion of Justice Peckham in the case of Wilcox v. Gas Co. 212 U. S. 19, 48 [29 Sup. Ct. Rep. 192; 53 L. Ed. 382; 15 Ann. Cas. 1034] :

“There is no particular rate of compensation which must, in all cases and in all parts of the country, be regarded as sufficient for capital invested in business enterprises. Such compensation must depend greatly upon circumstances and locality; among other things, the amount of risk in the business is a most important factor, as well as the locality’ where the business is conducted and the rate expected and usually realized there upon investments of a somewhat similar nature with regard to the risk attending them. There may be other matters which, in some cases, might also be properly taken into account in determining the rate which an investor might properly expect or hope to receive and which he would be entitled to without legislative interference. The less risk the less right to any unusual returns upon the investments. One who invests his money in a business of a somewhat hazardous character is very properly held to have the right to a larger return without legislative interference than can be obtained from an investment in government bonds or other perfectly safe security. ’ ’

It will thus be seen that locality, risk and other considerations may enter into the reasonableness of the rates fixed. And in fixing such rates the rights of both the corporation and the public are to be equally considered. The ends of justice would not be met by disregarding the interests of either. On the one hand the company is entitled to a fair return upon the reasonable value of that which it employs for the public convenience, and on the other hand what the public is entitled to demand is that no more be exacted from it than what such company furnishes is reasonably worth.

In Covington & L. Tpk. Road Co. v. Sanford, 164 U. S. 578, 597, 598. [17 Sup. Ct. Rep. 198; 41 L. Ed. 560], Justice Harlan, speaking for the court, says:

“In short, each case must depend upon its special facts, and when a court, without assuming itself to prescribe rates, is required to determine whether the rates prescribed by the legislature for a corporation controlling a public highway are, as an entirety, so unjust as to destroy the value of its property ' for all the purposes for which it was acquired, its duty is to take into consideration the interests, both of the public and of the owner of the property, together with all other circumstances, that are fairly to be considered, in determining whether the legislature has, under the guise of regulating rates, exceeded its constitutional authority, and practically deprived the owner of property without due process of law.
‘ ‘ The utmost that any corporation, operating a public highway, can rightfully demand at the hands of the legislature when exerting its general powers is that it receive what, under all the circumstances is such compensation for the use of its property as will be just, both to it and to the public.”

Again, in San Diego Land & Town Co. v. National City, 174 U. S. 739 [19 Sup. Ct. Rep. 804; 43 L. Ed. 1154] :

“What the company is entitled to ask is a fair return upon the value of that which it employs for the public convenience. ’ ’

In Wilcox v. Gas Co., supra, it is held that:

‘‘ The rates must be plainly unreasonable to the extent that their enforcement would be equivalent to the taking of property for public use without such compensation as, under the circumstances is just both to the owner and to the public. There must be a fair return upon the reasonable value of the property at the time it is being used for the public. ’ ’

Numerous other authorities might be cited sustaining this same view, but from the authorities cited we think it is apparent that the law enjoins upon a legislative body, such as a city council, in fixing rates for any public service corporation that they be so fixed as to be just, both to the corporation and to the public.

Is the rate fixed by the ordinance in question reasonable or otherwise? Was it fixed with reference to the rights of this corporation and of the public? If it was and it is reasonable, the relief asked for by the defendant company should not be granted, but if it was not and it is unreasonable and it denies to the defendant company equal protection of the laws in attempting to compel it to furnish gas for a period and at a price without adequate return, without its consent, then such relief under favor of the fourteenth amendment to the constitution of' the United States should not be denied.

We are therefore confronted with the inquiry, how is this court to determine whether or not the rate is reasonable or otherwise ? What is the test to be applied ? This question has been before the federal courts at various times and the rule there adopted in determining the reasonableness of rates is:

First, to ascertain the value of the plant of the corporation.
. Second, to determine, if possible, the total amount of the net profits which it can earn under the rate fixed.
Third, whether the amount of said profits is sufficient to provide a fair return on the reasonable value of the plant.

A vast amount of testimony was introduced under these different heads, especially relating to the cost of the defendant company’s plant, including promotion and organization cost, construction and engineering work, the risks incident to the production and distribution of gas, the necessity of maintaining a large reserved area of gas-developed territory to meet exigencies liable to arise in the various sources of supply, the market price of gas delivered at Newark, etc. Indeed the variety of subjects is so great and the testimony relating thereto so voluminous, a large part of which consists of expert testimony, it would seem that their intelligent solution would be aided by the services of a well-trained and experienced, gas expert. But in its analysis the case will be found to present legal questions, the solution of which may be helpful in enabling the court to reach a better understanding of the facts in the case.

Let us take up and consider the first proposition, namely, the value of the plant of the defendant company and the elements that should be considered in arriving at such value and when the valuation should be determined.

In McQuillan, Munic. Corp. 1750, the rule is stated as follows :

“The only practical test for determining the amount on which the public service company is entitled to a fair return is the present value of the property of the company at the time of the inquiry.”

In Dillon, Munic. Corp. 1331,_it is laid down that:

“When the inquiry is directed to the reasonableness of the compensation, founded upon a fair return to the corporation upon the value of the property used for the public, the value of such property is the basis of that inquiry. ’ ’

Under the rule laid down by the foregoing authorities supported by numerous adjudicated cases, the rule appears to be well established that the value of the property at the time of the fixing of the rates is the basis of valuation to be employed in determining the reasonableness of such rates.

The testimony shows that the defendant company was incorporated in 1889 with a capital stock of $81,600 and that no additional capital has ever been put into it for any purpose, except such as has been taken out of the earnings of the. company.

The history of the company consists of there periods, the Everett management, extending from 1889 to 1898, the Logan management from 1898 to 1902 and the Union Gas Corporation from 1902 to the present time.

The value of this property rests upon evidence furnished largely by the defendant company, supplemented by evidence covering the result of an examination made of its books by an expert accountant. As tending to show the value of the defendant company’s property, R. S. Lord, a witness for said company, testified that he was employed by it in March, 1912, to examine said property and then placed a value on it at $309,-000. (See record pages 366-385.) In estimating such value the original cost of much of the material employed in the construction of said company’s plant seems to have been based upon an examination of the books of the company and information furnished him. In making such estimate he testified that 50 per cent deduction from the original cost of the line between Newark and Thurston, if the same is not in use, should be made, namely, $24,000; that no allowance for financing expenses, or organization cost, or interest charges, etc., during the construction of said plant was included, and that no allowance was made for general depreciation of the plant covering a period of some ten years. The book value of the plant December 31, 1911, was shown to be $302,889.02, exclusive of allowance made for depreciation and franchise value. In June, 1902, the book value was shown to be $183,187.96, which amount was made up of various items as shown on page 541 of the record. In this estimate was included also an item of $60,000 for “rights of way.” A. J. Drolet, general auditor of the Union National Gas Corporation of Pittsburgh, a witness for the defendant company, testified that although the books of said company showed that by an inventory then taken the frahchise value was then entered on said books at $3,500, said sum was increased to $60,000 in six months after that time. The record on pages 542, 543 and 544 shows that said witness testified upon this subject as follows:

Q. Now, under the head of rights of way, what do you mean by that ?
A. That is an account that we have. It is a franchise account. It is supposed, to cover intangible values. We merely put it down. That is all; we had so many thousand consumers, and an investment of so much, and knowing about how much it ought to be per consumer, we noticed that there was a certain amount missing from the investment. We could not ascertain just where it was. It is a matter that has been ascertained by the accounting department, we are not authorities on that.
Q. As a matter of fact, it is simply a value that is put upon the franchise ?
A. Yes, sir. Covering all intangible value.
Q. You had an inventory taken in 1902, in June?
A. Yes, sir, I think so.
Q. And that right of way was placed at $3,500?
A. Yes, sir.
Q. And was increased in December of the same year to $60,000?
A. Tes, sir. Because we did not believe $3,500 covered it.
Q. Well, it did not cost anything?
A. It is a question. I don’t know. We knew that the plant was worth more than $123,000.
Q. Tour schedule shows the actual earnings and actual •expenses of your company?
A. Tes, sir. This was merely an inventory. I haven’t that list of pipe and meters; that is all that I received in the . Pittsburgh office — this list of material.
In view of the. fact that there was no absolute physical ■appraisement taken of the plant, nothing else was left for us but to extend the figures at what we thought was right.
Q. And you voluntarily increased the investment of the company from $122,638, $60,000 ?
A. Tes, sir.
Q. In six months’ time?
A. That is a feature which .we had omitted in the opening—
Q. That was an inventory ?
A. Tes, sir, of the physical property.
Q. In June, 1902?
A. Of the physical property, yes, sir.
Q. The physical property in June, 1902, was $122,000?
A. That is what we thought it was. We put $60,000 as being intangible.
Q. And the $60,000 which you added was. the franchise value?
A. Tes, sir. What we estimated was the franchise value.
Q. And you have nothing on your books to show that you paid anything at all for the franchise ?
A. Nothing at all, no, sir.

It would appear that if the foregoing illustrates the modem methods of bookkeeping in capitalizing corporation values, investigation may be helpful in disarming criticism that frequently follows where trust and confidence are fortified by book figures.

Evidence was also offered of the valuation placed upon this property by tbe State Tax Commission for tbe years 1911 and 1912 at $572,450 and $435,670, respectively, while the value placed upon practically the same property by the company itself in the sworn statement of W. J. Broder, its secretary, for the years 1908, 1909 and 1910 (as appears on page 398 of the record) was $41,996, $47,114 and $47,706, respectively. By the authorities this evidence is held to be immaterial for valuation purposes except as it tends to show the value placed upon the property by the company.

It is difficult to arrive at anything like a satisfactory conclusion as to the value of the company’s property in March, 1911, when it is considered that nothing was charged off for depreciation and that no definite showing appears of the actual operating expenses incurred, or an itemized account of the betterments made from year to year. It is well settled that a deduction should be allowed for depreciation from age and use of the plant when determining the present value of tangible property for the purpose of testing the reasonableness of rates fixed by a municipal ordinance. Knoxville v. Water Co. 212 U. S. 1 [29 Sup. Ct. Rep. 148; 53 L. Ed. 371].

As bearing upon a fair per cent to be deducted for. depreciation, Mr. Drolet testified that 5 per cent was a reasonable per cent. And it is also well settled that a further deduction for franchise value should be made. Lincoln Gas & Elec. L. Co. v. Lincoln, 182 Fed. Rep. 926, 928.

As already indicated, no such reliable and definite information was presented to the court to enable it to reach a conclusion wholly satisfactory to itself of the value of the defendant company’s property in March!, 1911, but in the light of the evidence introduced upon the subject, as we analyze it, and applying the rules of law already stated, the value of said property at that time appears to be $89,460.78. This amount may not be mathematically correct, owing to the incomplete and unintelligible condition of the company’s books in respect to the disbursements made and profits earned by it during the time mentioned as the same appeared in the evidence, and in this connection the evidence of the expert witness, J. Hope Sutor, who examined said books is not overlooked, but it is a result reached and verified by an examination involving a careful analysis of such evidence.

The second proposition, as stated, is to ascertain, if possible, the total amount of the net profits the defendant company can earn under the rate fixed.

This is a matter of no little importance to the defendant company, because whatever its earnings may have been prior to the passage and taking effect of the ordinance of March 6, 1911, conditions may have intervened increasing or decreasing the facilities and cost for supplying gas by the said company.

The claim made that natural gas is distinguishable from other public utilities in that its quantity or quality is beyond human control, and that there is ever present an element of risk attending its production and distribution, is not questioned, nor is the correctness of the claim challenged that the quantity of natural gas may be affected by decreased rock pressure as well as by other varying conditions, all of which no doubt would tend to increase the cost of production. These elements of uncertainty appear to be peculiar to the business, including also the risk attending the development o-f gas territory and other risks, too, necessarily connected with the production and transmission of gas, but these risks are such as are assumed by the investor, a fact, however, which should not and cannot weigh in considering the question under discussion here. In this enumeration of risks, it will be observed that the evidence given upon the subject refers to no one particular plant, but to the numerous plants of the Logan Company, whose property interests are admittedly large.

Among other things, it is urged by the defendant company that the wells in the Knox-Licking field (designated herein as the local field) have become so depleted of late, thereby increasing the cost of production, that neither the Logan Company, nor any other company, can furnish gas to the defendant company or the city of Newark and its citizens at the rate fixed by said ordinance with anything like a reasonable net profit on the value of its plant. If this claim is borne out by the facts, then the equitable relief asked by the defendant company should be granted. But what are the facts in this respect as disclosed by" the evidence ? Undoubtedly the wells in the local field have become more or less depleted owing to the causes described, but the» evidence shows that said wells at the beginning of this litigation, yielded more than four times the quantity of gas consumed by the city of Newark and its citizens. True it is shown that only 60 per cent of the gas delivered at the city of Newark was. of the product of said wells, and the balance is from the West Virginia field. If this condition prevails, there must be some-reason for it, but no reason appears to be given, nor does the. record show the cost to said company of producing gas in the local field, although there was no little testimony introduced by the plaintiff bearing upon the cost of producing natural gas in. territory adjacent to the local field as evidenced by the contracts for its sale and delivery to various cities in this state. Omitting figures, it is sufficient to say that such testimony appears to-warrant the statement that the cost of producing gas and its. sale at the prices therein named about the time of the passage of said ordinance do not indicate that the rate fixed therein is. confiscatory in its effect.

Considerable testimony was offered upon the trial showing: the price of gas delivered to various cities in this state as tending to show the general market price thereof, delivered at the city of Newark. In the absence of any testimony tending to show the cost of producing and transporting gas to the city of Newark for distribution, such testimony would be entitled to no-little weight, but what is the effect of such testimony as against proof of the cost' of producing gas in the immediate vicinity of the local field, supplemented by proof as it was that gas was being furnished at that time by said company at the eighteen, cent net rate? Situated as the city of Newark is, substantially contiguous to the local field, does not this fact when considered in connection with the admitted fact that the citizens of said, city were supplied with gas by the same company for years prior to and up to the time of the passage of said ordinance at a rate not in excess of the rate fixed by said ordinance, minimize if not nullify the legal effect of any showing of the market value of gas at said city at said time? Assuredly different conditions may exist in other cities where possibly the price of gas may be governed by the volume of the supply, and other considerations may also enter into the price there charged for gas, but as we view it, the real question made here is not what the prevailing price of gas at that time was elsewhere, but what was it reasonably worth when furnished to the citizens of Newark, in view of all the conditions here shown, and is the rate fixed by said ordinance such as to yield a fair return on the reasonable value of the company’s property, above all legitimate and proper charges ?

As we read the record, the earnings of the defendant company during the year 1911 were such as to pay over 10 per cent net profit, and that in 1910 they yielded a much larger net-profit. True the record covering these two years, standing alone, and in the absence of other evidence, might not be a safe criterion upon which to base a judgment of the net earnings of the company before that time, but the evidence shows that the total net earnings of this plant were very profitable from the time it was first organized, yielding to the management from 1902 to December 31, 1911, an average annual net profit of over 8 per cent, during all of which said time said company charged the citizens of the city of Newark for gas the eighteen cent net rate. We do not feel called upon to pursue this inquiry further, feeling that the foregoing facts furnish their own comment, and while it is impossible to say with any degree of certainty what the net earnings of the company may be during the future five years’ period, under said ordinance, it is reasonably safe to say that in- view of the net earnings of the company during the period from 1902 to and including at least a portion of 1911, they will be such as to avoid the charge of being confiscatory in their effect.

We now reach the third and final proposition. Will the amount of net profit be such as to yield a fair return on the value of this plant? It would seem that the conclusion reached as to the second proposition herein ought to be a sufficient answer to this inquiry, but we will notice some claims of counsel based upon said'company’s amended answer. Counsel for said-company quote the following from the opinion of the court in the case of New Memphis Gas & Light Co. v. Memphis, 72 Fed. Rep. 952, 955.

“The state is under an obligation to act justly, and without arbitrary discrimination between corporations of the state, just as it is between citizens of the state enjoying the equal rights. The state cannot, under the guise of a regulation, bring about a' destruction and a confiscation of the company’s property; and the state’s power to absolutely abolish the corporation must be distinguished from its power to destroy its business and confiscate its property so long as it chooses to permit its existence and to authorize its busin'ess by a valid charter. And the question of the reasonableness of a rate to charge is eminently a question for judicial investigation, requiring due process of law for its determination. And to deprive a company of the power of charging reasonable rates for the manufacture and sale of gas is to deprive it of the use of its property, and, in effect, of the property itself, without due process of law.”

The foregoing embraces a concrete statement of the law. It tersely points out the constitutional guaranty afforded by the ■ fourteenth amendment to the constitution of the United States and incidentally touches the vital question raised in this case wherein it is claimed that the defendant company is denied the equal protection of the laws and without due process of law, in that said ordinance seeks to compel it to furnish gas for a period and at a price without adequate return, without its consent.

It is to be remembered that the defendant company operated under another ordinance of the city of Newark in furnishing it and its inhabitants with gas and was so engaged at the time of the passage of the March 6, 1911, ordinance. Its relation to the public, therefore, then became fixed so far as being subject to public control.

In Cotting v. Stock Yards Co. 183 U. S. 79, 84 [22 Sup. Ct. Rep. 30; 46 L. Ed. 92], Justice Brewer, delivering the opinion therein quotes from Munn v. Illinois, 94 U. S. 113 [24 L. Ed. 77], as follows:

“Property becomes clothed with a public interest when used in a manner to make it of public convenience, and affect the community at large. * * * When, therefore, one devotes his property to a use in which the public has an interest, he in effect, grants to the public an interest in that business and must submit to be controlled by the public for the common good to the extent of the interest thus created. He may withdraw his grant by discontinuing the use but so long as he maintains the use, he must submit to the control. ’ ’

As already indicated, this power of control lodged in the city council, under the statute, should be exercised not arbitrarily but with an unbiased judgment and discretion, and such a rate fixed as will afford to the company a just eonpensation on the reasonable value of the plant at the time it was being used for the public — a rate that is just both to the company and to the public. “The idea of reasonableness is justice, and that which is unjust cannot be reasonable,” says Justice Brewer, and it might here be remarked that courts have not been slow to safeguard property rights when the protection afforded by the fourteenth amendment to the constitution of the United States has been denied, nor on the other hand has the strong arm of the law been withheld from the public to protect it from imposition and wrong. With this record before us showing the net earnings of the company for the period named to be unusually large on what has been found to- be the reasonable value of its plant, can the reasonableness of the rate fixed by said ordinance be successfully challenged as being obnoxious -to or in contravention of the provisions of the said fourteenth amendment? The action of the city council being admittedly within the limits of legislative authority and.its action being founded upon modes of procedure adopted for the government of municipal legislative bodies, such modes are to be .regarded as due process of law. Having enacted this legislation the will of .the city council, speaking through this ordinance becomes the. law,— the law unto this corporation and .all person^ affected by it— unless it should be made to appear that- the constitutional .provision safeguarding property rights has been disregarded.. Here it is not claimed that there is any lack of uniformity in the operation of the said ordinance, or that there is any unjust corporate classification or discrimination made, but that it is here sought to take private property for public use without just compensation, in violation of the fourteen amendment which forbids any state “to deny to any person within its jurisdiction the equal protection of the laws.” That corporations are persons within the meaning of this constitutional provision is well settled, and in view of the repeated adjudications of the highest court in the land upholding this constitutional provision it has become generally recognized that “no duty rests more imperatively upon the courts than the enforcement of this constitutional provision intended to secure that equality of rights which is the foundation of free government.” Observing this injunction upon courts, What is the duty of this court in view of the record before us? Can it be said that the rate fixed by said ordinance is confiscatory in its effect, or that it will be during the future five years’ period, in view of its net earnings shown for the period named when the price charged by the defendant company was at the eighteen cent net rate? Acting upon the well settled principle that rates will not be declared confiscatory unless clearly shown to be so, a majority of the court are of the opinion that the rate fixed by said ordinance is not unreasonable or confiscatory in its effect, and we therefore hold that neither of the several defenses of the defendant company, which has the burden of proof, is sustained by the evidence.

But there is another feature of this case which should not be overlooked, in our judgment, and that is that said ordinance has not had the test of actual experience. There was no showing made by the defendant company of the practical effect of the rate, fixed by said ordinance from the date of its passage to the date of the trial in this court, a period covering three years and more. In the absence of a showing made by the defendant company, in a case permitting it, that such rate will not yield a fair return on the reasonable value of its property employed, should not courts hesitate to interfere with rate legislation before being advised of .the practical result of such rate?

In Dillon, Mnnic. Corp. 1327, it is laid down that:

“The judiciary ought not to annul or set aside rates established by legislative action unless they are proven or shown to be such as to make their enforcement equivalent to the taking of property for public use without such compensation as under all of the circumstances is just, both to the owner and to the public, that is, judicial interference should not occur unless the ease presents clearly such a violation of the rights of property under the form of regulation as to satisfy the court that the rates prescribed will have the effect to deprive the company of reasonable compensation for its services.”

In Knoxville v. Water Co. supra, Justice Moody says:

“The jurisdiction which is invoked here ought, as has been said, to be exercised only in the clearest cases. If a company of this kind chooses to decline to observe an ordinance of this nature, and prefers rather to go into court with the claim that the ordinance is unconstitutional, it must be prepared to show to the satisfaction of the court that the ordinance would necessarily be so confiscatory in its effect as to violate the constitution of the United States. ’ ’

Again, in San Diego Land & Town Co. v. National City, supra, Justice Harlan, speaking for the court, says:

“But it should also be remembered that the judiciary ought not to interfere with the collection of rates established under legislative sanction unless they are so plainly and palpably unreasonable as to make their enforcement equivalent to the taking of private property for public use without such compensation as under all the circumstances is just, both to the owner and to the public; that is, judicial interference should never occur, unless the case presents, clearly and beyond all doubt, such a flagrant attack upon the rights of property under the guise of regulations, as to compel the court to say that the rates prescribed will necessarily have the effect to deny just compensation for private property taken for public use.”

Again, in Wilcox v. Gas Co. supra, Justice Peckham says:

“But, where the rate complained of shows, in any event a very narrow line of division between possible confiscation and proper regulation, as based upon tbe value of tbe property found by the court below, and the defendant depends upon opinions as to value, which differ considerably among the witnesses, and also upon the results in future of operating under the rate objected to, so that the material fact of value is left in much doubt, a court of equity ought not to interfere by injunction before a fair trial has been made; if continuing business under that rate and thus eliminating, as far as is possible, the doubt arising from opinions as opposed to facts.”

From the foregoing it appears that the reasonable and safe rule for courts to follow is to decline to interfere by injunction with rate-making legislation before a fair test is made and shown of the practical effect of the rate fixed, to the end that courts may intelligently act upon evidence based upon the result of actual trial of such rate rather than speculation. As in the ease of Knoxville v. Water Co. supra, so in this case, if it shall hereafter be made to appear under the actual operation of said ordinance that the returns allowed by it operate as a confiscation of property, the courts are open to afford a remedy.

The same decree may be entered herein as was entered in the court of common pleas.

Powell, J., concurs.

Voorhees, J., dissents.


source: Caselaw Access Project

license: Public Domain

text:
    HUSBAND AND WIFE.
    [Delaware (5th) Court of Appeals,
    April Term, 1914.]
    Voorhees, Shields and Powell, JJ.
    George H. Humphrey & Son v. Alonzo Huff.
    1. Husband Liable for Burial Expenses of Wife Regardless of Contract of Separation and Her Separate Estate.
    Burial services and expenses connected with the death of his wife are part of the obligations of support imposed upon a husband by Sec. 7997 G. C. and. at common law; hence, a contract of separation between a husband and wife releasing him from all claims for her support and maintenance does not relieve him from payment of her burial expenses and regardless of any separate estate of the wife deceased.
    2. Presentation of Claim for Funeral Expenses of Wife against Her Estate not Condition Precedent to Recovery from Husband.
    Neither presentation to her administrator of a claim for burial expenses of a deceased wife nor collection of the same from her separate estate is a condition precedent to recovery of such expenses from her surviving husband.
    [Syllabus approved by the court.]
    Error to common pleas court.

      Overturf, Hough & Jones, for plaintiffs in error;
    Cited and commented by the following authorities: Toledo v. Duffey, 7 Circ. Dec. 113 (13 R. 482); Chittenden v. Chittenden, 12 Giro. Dec. 526 (22 R. 498); 21 Cyc. 1449; Phillips v. Tolerton, 20 Dec. 249 (9 N. S. 565), affirmed, no op., Phillips v. Tolerton, 82 Ohio St. 403; Eveland v. Sherman, 21 Dec.- 726 (9 N. S. 559); Richter v. Richter, 11 Dee. Re. 377 (26 Bull. 201).

      Marriott, Freshwater & Wickham, for defendant in error:
    Cited and commented by the following authorities: Oarver v. Miller, 16 Ohio St. 528; Smith v. Smith, 57 Ohio St. 27 [48 N. E. Rep. 28] ; Patterson v. Patterson, 59 N. Y. 574 [17 Am. Rep. 384] ; Schneider v. Brier’s Estate, 129 Wis. 446 [109 N. "W. Rep. 99; 6 L. R. A. (N. S.) 917] ; Morrissey v. Mulhern, 168 Mass. 412 [47 N. E. Rep. 407] ; Constantinides v. Walsh, 146 Mass. 281 [15 N. E. Rep. 631; 4 Am. St. Rep. 311]; Hap.goocl v. Hotighton, 27 Mass. (10 Pick.) 154; McClellan v. Filson, 44 Ohio St. 188 [5 N. E. Rep. 861; 58 Am. St. Rep. 814] -,
      Rea v. Hurkee, 25 111. 503; Mitchell v. Treanor, 11 Ga. 324 [56 Am. Dec. 421] ; 3 Sehouler, Dom. Rel. Sec. 68, p. 105; Smyley v. Reese, 53 Ala. 89 [25 Am. Rep. 598]; Gregory v. Lockyer, 6 Madd. 90; Hare v. Gibson, 32 Ohio St. 37 [30 Am. Rep. 568] ; Shillito v. Duhme, 3 Dec. Re. 331; 21 Cyc. 1223; Bonney v. Rcrham, 203 111. App. 634; Harshaw v. Merryman, 18 Mo. 106; Richter v. Richter, 11 Dee. Re. 377 (26 Bull. 201).
   SHIELDS, J.

The action below was brought by the plaintiffs in error, plaintiffs below, to recover from the defendant in error, defendant below, upon an account for the funeral expenses and costs of burial of the wife of the defendant.

By answer the defendant set up as a defense that he and his wife, Alice Huff, during her lifetime entered into a written contract “to live separate and apart from each other during the remainder of their natural lives, and for the sum of $200 paid by the defendant to his said wife, 'and for other satisfactory and valuable considerations it was stipulated in said contract that said wife released the defendant from all and singular the claims she had on the defendant that may arise by reason of their marriage relations and that they should always live thereafter the same as if no marriage between them had ever taken place, and that the defendant was forever released from all claims his said wife may have against him for her support and maintenance.”

He further alleged that the terms of said contract were fair, reasonable and just to his said wife under the circumstances of the parties at the time it was made. That all the stipulations contained in said contract were fully complied with by the defendant and that by reason thereof he claims he is released from all claims which his marriage relation imposed upon him.

To this answer the plaintiffs filed a general demurrer which was by said court overruled, to which the plaintiffs excepted, and not desiring to further plead, judgment for costs was thereupon entered in favor of the defendant, to all of which the plaintiffs excepted, and thereupon a petition in error was filed in this court for the review of said judgment.

That the plaintiffs in error rendered the services sued for is not disputed, nor is the reasonableness of the charge made for the same disputed, but the defendant in error denies his liability therefor not because of his relation as husband but because of the contract of separation set up in his said answer.

It is apparent that in such contract the defendant in error sought to relieve himself of the obligation for the support of his wife, and while the terms of such contract may have been “fair, reasonable and just,” do they extend to and cover the burial expenses of his wife ? Counsel for the defendant in error argue that the action of the court below in overruling said demurrer was proper, first, because it does not appear that said claim was presented to, allowed or rejected by the administrator of the estate of the deceased wife, and second, that said deceased wife’s estate is liable for said burial expenses and that the defendant in error is not liable therefor.

First, the husband is primarily liable for his wife’s debts, and even though the separate estate of defendant in error’s wife, if she had any, may have been liable for her debts, still one furnishing services and expenses for the wife’s burial has the election to proceed either against the surviving husband or the deceased wife’s estate to recover for such services and expenses. Here the pleadings fail to show whether or not the wife of defendant in error left a separate estate, but whether she did or did not is immaterial, as we view the case, for plaintiff in error having elected to sue the surviving husband on said account rendered the appointment of an administrator of the estate of the deceased wife unnecessary, and therefore presentation of said account to the administrator of her estate, if one was appointed, was not a condition precedent to bringing suit on the same.

Secondly, did said contract of separation relieve the defendant in error from the payment of the account sued on ? Under the common law it was clearly the duty of a husband to pay the burial expenses of his wife, and while the rights and powers of the wife have been materially changed and greatly enlarged by legislation in this state as that she may contract for, acquire and hold property in her own name so that her separate estate becomes bound for any obligation incurred for her benefit upon the faith of such separate estate, we know of no rule laid down in any adjudicated ease in this state that modifies the above rule of common law liability of absolving the husband from the payment of his wife’s funeral debts. True it has been held in other jurisdictions that where the deceased wife left a separate estate and her estate was proceeded against, a recovery has been had against such estate.

Section 7997 Gen. Code provides that:

“The husband must support himself, his wife and his minor children out of his property or by his labor. If he is unable to do so, the wife must assist him so far as she is able.”

As was said in Phillips v. Tollerton, 20 Dec. 249 (9 N. S. 565), “this statute recognizes and is declaratory of the common law. Toledo v. Duffy, 7 Circ. Dec. 113 (13 R. 482); Chittenden v. Chittenden, 12 Circ. Dec. 526 (22 R. 498). The enactment of this statute seems to be a distinct recognition of common law duties and liabilities. ’ ’ The support of the wife by the husband, under the terms of the foregoing statute, is made obligatory without reference to any separate estate of the wife. If this is so, what is there to exempt the husband from liability on the claim here sued on? The contract of separation? The contract referred to was undoubtedly a valid contract as between the defendant in error and the deceased wife of the defendant in error, but whether as such it extended to any and all claims that might arise or may have arisen in favor of third persons is not so clear, but this question is not before us at this time. After having investigated the Ohio authorities cited, Phillips v. Tollerton, supra; Eveland v. Sherman, 21 Dec. 726 (9 N. S. 559) ; Richter v. Richter, 11 Dec. Re. 377 (26 Bull. 201), based as they seem to be upon sound reason and principle, we are of the opinion that the court below erred in overruling said demurrer, and the judgment of the court of common pleas will therefore be reversed, and. said cause remanded to said court with instructions to sustain said demurrer, and for such other and further proceedings as are authorized by law.

Exceptions may be noted.

Voorhees and Powell, JJ., concur.


author: WILDMAN, J.

text:
    MASTER AND SERVANT.
    [Lucas (6th) Circuit Court,
    November 21, 1908.]
    Parker, Wildman and Kinkade, JJ.
    Albert Nusbaum v. Lake Shore & Michigan Southern Ry.
    Danger of Flying Steel from Driving Screw with Hammer, Obvious and Conclusively Presumed Appreciated.
    The danger of a piece of steel flying from a screw or from the hammer with which a railway car repairer was driving the screw is just as apparent to the employe as to the employer and one he will be conclusively presumed to appreciate; hence, if it appear from his petition that the danger was so obvious, notwithstanding an allegation that he did not appreciate the danger, he cannot avoid the presumption of law by a contrary rule.
    [Syllabus approved by the court.]
    Error to common pleas court.
   WILDMAN, J.

This case is one in which Nusbaum brought suit against the Railway Company for an injury caused, as he claimed, by the negligence of the defendant. Nusbaum was employed as a car repairer. It is said that he notified the company at the time of his employment that he was unskilled in that work. He was employed to drive a screw with a hammer in some work, the nature of which I think it is not worth while to detail — when a portion of the screw flew off and put out one of his eyes.

Our judgment is that, whatever dangers arose from the act of using the hammer in the driving of the screw, would be just as apparent to a person who had occasion to drive anything made of steel with a hammer as it would be apparent to a person engaged in the repairing of cars. It is not an experience that is peculiar to a particular trade or -profession. It is something that belongs to the common usage of people. There is doubt as to whether a danger of that kind — that is, the flying off of a bit of a screw — would so naturally and logically result in the putting out of an eye of a person using the hammer, as to enable us to say that he ought naturally to have apprebended it, but if it would not so naturally flow from the act as to induce Mm to apprehend such a result, we cannot see any reason why it would be apprehended by any one else. In this connection we may cite McGill v. Traction Co. 79 Ohio St. 203 [86 N. E. Rep. 989; 19 L. R. A. (N. S.) 793; 128 Am. St. Rep. 705], and especially the language of Judge Crew, that if there was danger it must have been as apparent to the employe as to the employer. The employer had no better facilities for ascertaining or appreciating the danger of this character than had the employe. The ease which I am considering differs from the Schultz case, recently considered by us, in particulars and circumstances, although not especially in principle. The Schultz ease went to trial in the court below. The Nusbaum case comes up by the way of demurrer to the petition, the court holding that the petition was insufficient, sustaining the demurrer, and rendering judgment thereon in favor of the defendant company. But if; as stated by the Supreme Court in the case of Cincinnati Gas & Elec. Co. v. Johnston, 76 Ohio St. 119, 137 [81 N. E. Rep. 155], it would be the duty of the court to arrest the case from the jury and instruct the jury to return a verdict for the defendant upon the basis of the facts therein disclosed, it must be just as much the duty of the court upon the basis of the facts disclosed in the petition, to hold those facts insufficient to justify a verdict in favor of the party pleading. It is true that in the Nusbaum case the plaintiff substantially alleges that he was ignorant of the dangers and that his master was not so ignorant; but one cannot, by this form of pleading, escape the ■conclusive results of the principles which have already been enunciated in this case and in the Schultz case; in other words, if it appears by the petition that the- danger was so obvious that the employe must be conclusively presumed to appreciate the danger if he knew the circumstances, then, there being no averment that he did not know those circumstances, that conclusive presumption does arise and his averment that he did not appreciate the danger will not avail, because that would be a matter of law rather than a question of fact.

Our judgment is that the court did not err in sustaining the demurrer to this petition, and the judgment of the ■court therefore will be affirmed.

It is suggested by my associate, Judge Parker, that in saying that it was the claim of the plaintiff that a piece broke off from the screw and flew to his eye and put it out, I have not stated the precise claim of the plaintiff in his petition, which is, rather,, that it was a piece which flew from either the screw-head or the hammer, and he is unable to state which. I do not deem this difference as of the slightest consequence; he has claimed in either case that as the result of his hammering, something fell ■off and hit him in the eye and that he did not understand that that sort of thing would happen; that he did not appreciate the danger; and, as I have already stated, the presumption of law in the use of a simple tool like that is against him and he cannot avoid the presumption of law by a contrary rule.

Parker and Kinkade, JJ., concur.


author: ALLREAD, J.

text:
    CRIMINAL LAW — SALARY LOAN.
    [Franklin (2nd) Court of Appeals,
    October 24, 1914.]
    Allread, Ferneding and Kunkle, JJ.
    P. L. Andrews v. State of Ohio.
    1. Affidavit Averring Engaging in Salary Loan Business According to Law and Charging Specific Offense in Violation thereof not Conflicting.
    An affidavit upon which a prosecution for violation of the salary Loan act (102 O. L. 469; Secs. 6346-1 G. C. et seq.) is based, averring that accused is “engaged in the salary loan business in accordance with the state law” and charging him with a specific offense against the same law, is not defective because of irreconcilable averments.
    2. Filling Blanks in Assignment of Wages in Violation of Salary Loan Act.
    A licensed salary loan broker, filling in a blank space in an assignment for wages, the word “all” before the phrase “dollars for services rendered and to be rendered * * * within three years from the date hereof,” instead of the true amount of the loan, sending such assignment to and collecting from assignor’s employer one month’s salary, a sum largely in excess, of the amount due and returning to assignor the balance after deduction of an exorbitant and usurious rate of interest, violates Secs. 6346-1 G. C. et seq., inability to state exact figures because of the accumulation of interest is no excuse for such failure.
    Error to common pleas court.

      Earnhart & Bates, for plaintiff in error.

      Henry L. Scarlett, city solicitor, for defendant in error.
   ALLREAD, J.

The plaintiff in error was convicted in police court of a violation of the Salary Loan act. The judgment of the police court was affirmed by the common pleas court. The case is brought here on petition in error.

There^ is very little, if any dispute as to the facts and the question is whether the evidence establishes an offense. There is some criticism of the affidavit because it states as a preliminary fact that Andrews was engaged in the salary loan business in accordance with the state law and then proceeds to charge a specific offense against the state law. We think these allegations may be reconciled. The former allegation was intended to state the general character of the business, while the latter was intended to state a specific act constituting an offense.

The offense disclosed by the evidence is based upon the averment of the affidavit that the plaintiff in error improperly and unlawfully filled in a certain blank space in the assignment of salary and wages in the transaction in controversy by writing the word “all!'‘ before the words “dollars for services rendered and to be rendered by me within three years from the date hereof ’ ’ instead of the proper and true amount of the loan which is alleged to be $36.15.

The evidence shows that Andrews loaned one Dixon, $35 at the time the assignment was given. Out of the amount of the loan was taken 10 per cent for expenses. The loan ivas made payable in thirty days with 8 per cent interest, and was permitted to run something like five months.

The printed blank for the assignment of the wages was filled up as averred in the affidavit by the wanting in of the word "all” before the printed clause providing for the assignment of wages for three years. At the end of five months the assignment was sent to the employer and the month’s wages then due, amounting to something near $98 was paid to Andrews who deducted the amount due him and paid the balance to Dixon.

The criminal provision of the Salary Loan act (102 O. L. 469) is found in Sec. 6 (Sec. 6346-6 G. C.) and is based upon any violation of the provisions of the entire act. Andrews had taken out a license and was therefore held to the regulatory provisions of the act in the conduct of his business.

Sections 3, 4 and 5 of the act are chiefly involved.

It is contended on behalf of the plaintiff in error that the provisions of the act should be liberally construed in his favor. While it is true as a general proposition that doubtful provisions of criminal statutes are liberally construed in favor of the person charged with a criminal offense, yet this doctrine should not be carried so Jar as to destroy the efficiency and permit evasions of the plain purposes of remedial acts. The business of making salary loans upon exorbitant charges and upon written assignments for larger sums than were required to compensate the loanor, called for legislation. That this business was within the police power and that, the general purposes of the salary loan act are valid has been decided. We are, therefore, now dealing really with a construction of the terms of the act. Section 4 expressly prohibits the taking of a written assignment without the blank spaces being filled in "with the proper names and figures.” "Proper names” as used in this section is defined in the latter part of the section. The meaning of the terms "proper figures” must be determined from the general scope of the act which is particularly specified in See. 5 fixing the limit of charges and making void all assignment which contemplates any payment in excess of the amount stipulated.

The purpose of the legislation underlying the provisions of this act was to simplify the salary loan business and make it impossible for the loanors to oppress the dependent class by exorbitant charges and by excessive assignments of salary. Here Andrews made the small loan of $35 and took an assignment of wages for three years amounting approximately to $3,000. If this transaction is to be held legitimate, then a substantial part of See. 5 of the Salary Loan act can be evaded and practically destroyed. We think the taking of this exorbitant and excessive assignment of wages falls clearly within the manifest purpose, as well as the express provisions of the act.

Plaintiff in error contends that because of the accumulation of interest provided for in the note and authorized by the: Salary Loan act, the exact figures could not be stated in the-assignment and that, therefore, the accused should not be held for the failure to do an impossible thing. We think, however,, the statement of the proper figures in the written assignment in a transaction like the one at bar is not impossible. The amount was fixed at the time the loan was made and was. capable of determination at the time the note became due or at any other period when the collection might be sought. The calculation of interest was only necessary to fix the sum total.. The amount covered by the assignment in the present case was; not a fair effort to determine the proper figures, but evidently was a subterfuge and an evasion of the statute.

It is also contended that a partial assignment of wages due at any particular pay day would not be valid security and could be refused by the employer.

Whatever may have been the rule in this respect under the common law, the employer as well as the employe is bound by public policy as expressed in the Salary Loan act. Assignments, of salary and wages made in strict conformity to the Salary Loan act would be valid in favor of the loanor and against both, the employe and the employer. There was, therefore, no necessity for the loanor to take an assignment of wages in substantial excess of the amount actually payable.

Finding no error in the record the judgments of the court of common pleas and the police court are affirmed.

Fernedittg and Kunkle, JJ., concur.


text:
    REVERSIONS AND REMAINDERS — WILLS.
    [Franklin (2nd) Circuit Court,
    April 2, 1912.]
    Dustin, Allread and Ferneding, JJ.
    Benjamin F. Lisle v. Mary A. Miller et al.
    Heirs in Devise to Son for Life, then to Heirs Creates Contingent and not Vested Remainder.
    The term “heirs” in a devise to testator’s son “to have and to hold the same during life, then to go to his heirs” is mere designatio personarum; hence, such devise does not vest an interest in remainder in devisee’s sons but the interest created is, under the doctrine of nemo est haeres viventis, contingent and does not vest until the death of the life tenant.
    Error to common pleas court.

      M. B. Barnhart, for plaintiff in error.

      Ivor Hughes, W. S. Page and L. W. Jones, for defendants in error.
   ALLREAD, J.

This action involves a construction of the following item of the will of Robert Lisle, deceased:

“Item IX. I will to my youngest son, Harvey Lisle, the farm that I now live on, to have and to hold the same during life, then to go to his heirs. ’ ’

The testator died in 1862. The son, Harvey, died August 10, 1910. Harvey had eight children, seven of whom survive him. Robert John, one of the sons, died June 26, 1910, after having conveyed his interest by deed to Mary A. Miller. The controversy is between the grantee, Mary A. Miller, and the surviving children of Harvey over the interest of Robert John.

The grantee contends that a vested interest in remainder was conferred by the will upon the children of Harvey, while the surviving children contend that the interest created in favor of the heirs was contingent and did not vest until the death of Harvey. The case of Linton v. Laycock, 33 Ohio St. 128, and Bunnell v. Evans, 26 Ohio St. 409, are cited in favoi of the former, while Barr v. Denny, 79 Ohio St. 358 [87 N. E. Rep. 267], is cited to sustain the latter contention. These eases are not exactly parallel and are important only for the rules of construction announced. The question is one of testamentary intention to be solved by a careful analysis of the terms employed in the light of established rules of construction.

The case of Bonnell v. Evans, supra, holds the term “heirs,” in view of the context, was intended to signify children. In the case of Linton v. Laycock, supra, the devise was expressly to the testator’s children then living or their heirs. The court, in view of the context, construed the devise ,to the children as vested at the time of the testator’s death, and that the fact that they were to have the estate when the youngest child became of age related merely to the enjoyment. This construction was arrived at from a full consideration of the whole will. The case of Barr v. Denny, supra, and cases cited in the opinion, may be distinguished, because the bequests partake of the nature of personalty.

These cases do not hold that the word “heirs” ex vi termini should be construed as meaning children or in any other than its ordinary and technical sense. Upon a careful reading and full consideration of the will in controversy, we find nothing reflecting an intention to use the term “heirs” in any other than its ordinary sense. This devise is, therefore, one falling strictly under the common law rule of Shelly’s case. This rule was adopted under the influence of the feudal system in order to vest the inheritance in some one capable of performing feudal service and the life estate was, therefore, enlarged into a fee simple.

In order to afford a rule more in harmony with testamentary intention, the rule in Shelly’s case has been superseded by the following statute:

“See. 5968. When lands, tenements, or hereditaments are given by will, to any person for his life, and after his death to his heirs in fee, or by words in that effect, the conveyance shall be construed to vest an estate for life only, in such first taker, and a remainder in fee simple in his heirs.”

Under this statute the term “heirs” is no longer regarded in eases falling within its provisions as one of limitation but becomes one of purchase. The “heirs” take not from the first donee but as devisees under the will. The term “heirs” as employed in the will is mere designatio personarum. This brings us to the main and controlling question. Did the estate devised to the “heirs” of Harvey vest an estate in remainder upon the death of the testator or was it contingent until the “heirs” were ascertained by Harvey’s death?

Two conflicting rules of construction are brought in. It is contended, upon the one hand, that the rule favoring vested interests should control in defining and applying the term “heirs,” and, on the other hand, it is asserted that the doctrine of nemo est haeres viveniis is applicable and that the remainder is, therefore, contingent. We are unable to find that this exact question has been decided in this state.

In Massachusetts, under an early statute, it was announced in Bowers v. Porter, 21 Mass. (4 Pick.) 198, that a vested remainder was created in those persons answering the description of heirs at the time of the testator’s death. This was followed by the opinion in Richardson v. Wheatland, 48 Mass. (7 Metc.) 169, holding that the heirs took by way of contingent remainder. The direct question arose under a statute of which ours is a copy in the case of Putnam v. Gleason, 99 Mass. 454, where it was held that the heirs took by way of contingent remainder. In the opinion it is said by Foster, J., that:

“Undoubtedly the law favors vested rather than contingent remainders; but not to the extent of disregarding the intent of the testator, or rejecting the natural import of the language he has used.”

The ease of Putnam v. Gleason, supra, has become the settled law of Massachusetts. Putnam v. Story, 132 Mass. 205; Lavery v. Egan, 143 Mass. 389 [9 N. E. Rep. 747].

The Massachusetts rule of construction is adopted in: Sanborn v. Sanborn, 62 N. H. 631; Hunt v. Hall, 37 Me. 365; Read v. Fogg, 60 Me. 479; Williams v. Williams, 57 Tenn. (10 Heisk.) 566.

In New York state (Moore v. Littel, 41 N. Y. 66), there is adopted the rule that the heirs take a vested contingent remainder. Under this rule the devise opens up to admit after-born children and is defeated as to any interest by death before the estate takes effect in possession.

The construction adopted in Massachusetts seems to be in harmony with many of the expressions in the opinion in Barr v. Denny, supra, and is supported, we think, by the weight of authority.

The grantee of Kobert John Lisle in our opinion took no interest under the will in controversy capable of being asserted in view of the death of his grantor before the estate took effect.

Upon examination of the record of the court of common pleas we find that there is no final judgment. The court overruled a demurrer to the answer and cross petition of Mary A. Miller. The case is, therefore, still pending in the court of common pleas. As the case stands this court has no jurisdiction to entertain a petition in error, and it must be dismissed. We have, however, expressed the opinion of this court upon the questions involved for the benefit of counsel and the court in the further progress of the case.

Dustin and Ferneding, JJ., concur.


author: SAYRE, J.

text:
    INSURANCE.
    [Highland (4th) Court of Appeals,
    December 23, 1913.]
    Walters, Sayre and Jones, JJ.
    Metropolitan Life Ins. Co. v. David Hillard.
    Insured Alive and in Sound Health at Date of Policy Condition Pr®cedent to Recovery.
    A life insurance policy contained the following clause: “provided, however, that no obligation is assumed by the company prior to the date hereof, nor unless on said date the insured is alive and in sound health.”
    Held: That the clause is a condition precedent and the burden of proof was cast upon the plaintiff to show that at the date of-the policy the insured was alive and in sound health.
    [Syllabus by the court.]
    Error to common pleas court.
    This case originated in the court of a justice of the' peace of Highland county, Ohio.
    The action was founded on a policy of insurance issued by the plaintiff in error on December 11, 1911, on the life of Elsie Hillard, who was the wife of defendant in error. Elsie Hillard died March 18, 1912.
    The petition pleaded the issuance of the policy, the payment of all premiums, and that said Elsie Hillard and plaintiff duly performed all the conditions of said policy on their part to be performed.
    The defendant, in its answer, pleaded the following stipulation which is found in the body of the policy of insurance:
    “Provided, however, that no obligation is assumed by the^ company prior to the date hereof, nor unless on said date the-insured is alive and in sound health. ’ ’
    The answer also contained the averment that on the date of." the policy, December 11, 1911, Elsie Hillard was not in sound-health, hut was afflicted with tuberculosis, from which she died..
    The trial court was requested to instruct the jury that the burden was upon the plaintiff to show that the insured was m. sound health when the policy was issued, which instruction was-refused, but the trial court did instruct the jury that in order that the insurance company may be entitled to a verdict in its favor the burden is upon it to prove that on the- date of the policy Elsie Hillard was not in sound health.
    This action of the court, in refusing to instruct as requested, and in giving the instruction stated, is the single assignment of error in the case.

      L. B. Yaple, Wilson & McBride and Miles Townsend, for plaintiff in error.

      J. G. Whitaker and J. 8. Riley, for defendant in error.
   SAYRE, J.

The precise question for determination here is not decided in Metropolitan Life Ins. Co. v. Howle, 62 Ohio St. 204 [56 N. E. Rep. 908] ; Metropolitan Life Ins. Co. v. Howle, 68 Ohio St. 614 [68 N. E. Rep. 4.]

The learned trial judge seems to have based his ruling on the case of Piedmont & Arlington Life Ins. Co. v. Ewing, 92 U. S. 377 [23 L. Ed. 610], where it is held that:

“The burden of proving the truth of the answers in an application for insurance does not rest on the insured or his representative in an action on the policy. ’ ’

But the Federal Supreme Court in that case held that the answers were merely warranties; and the courts, almost without exception, have held that where there is a defense of a breach of warranty in an application for insurance, the burden of proof as to that defense is on the insured.

The view taken by the trial' court is sustained by the following cases: Chambers v. Insurance Co. 64 Minn. 495 [67 N. W. Rep. 367; 58 Am. St. Rep. 549] ; Murphy v. Insurance Co. 106 Minn. 112 [118 N. W. Rep. 355] ; Francis v. Insurance Co. 55 Ore. 280 [106 Pac. Rep. 323] ; Bathe v. Insurance Co. 152 Mo. App. 87 [132 S. W. Rep. 743], In Murphy v. Insurance Co. supra, the court, on page 356 of the opinion, says:

“Therefore, if the insured was not in fact in sound health on the date of the policy, the defendant is not liable unless it has waived the defense. The burden of alleging and proving such fact was on the defendant. This, for practical reasons, has become the settled law of this state.”

While the Bathe, Chambers, Murphy and Francis cases, supra, support the ruling of the trial court, the majority of the decisions on this question, so far as our investigation has gone, support the view that the burden is on the plaintiff. Mohr v. Insurance Co. 32 R. I. 177 [78 Atl. Rep. 554] ; Packard v. Insurance Co. 72 N. H. 1 [54 Atl. Rep. 287] ; Johnson v. Insurance Co. 120 Mo. App. 80 [96 S. W. Rep. 697] ; Hennessy v. Insurance Co. 74 Conn. 699 [52 Atl. Rep. 490] ; Barker v. Insurance Co. 188 Mass. 542 [74 N. E. Rep. 945] ; Lee v. Insurance Co. 203 Mass. 299 [89 N. E. Rep. 529] ; Anders v. Insurance Co. 62 Neb. 585 [87 N. W. Rep. 331] ; Volker v. Insurance Co. 1 Misc. 374 [21 N. Y. Supp. 456]; 25 Cyc. 719.

It will be seen from the authorities above referred to that while the stipulation in the policy under consideration may be a warranty it is more than that — it is a condition precedent. The promise of the defendant was conditional, and it became absolute only in the event that on the date of the policy the insured be alive and in sound health.

The authorities above quoted from, which hold that the burden is on the defendant, do not show that this clause in the policy above quoted is not considered a condition precedent, but the burden in those cases was placed on the defendant ‘ ‘ for practical reasons.” Murphy v. Insurance Co. supra.

In view of the fact that such clause in the policy is a condition precedent the provisions of Sec. 11339 G. C. become highly important:

“In pleading the performance of conditions precedent in a contract, it shall be sufficient to state that the party duly performed all the conditions on his part. If such allegation be controverted, the party pleading must establish, on the trial, the facts showing such performance.”

The plaintiff below pleaded, generally, that he and' the insured performed all the conditions on their part to be performed, which was strictly in accordance with the statute, but the defendant then pleaded this condition precedent or rather averred the nonexistence of a fact or state — sound health — which constituted the condition precedent and a failure to comply with it.. Under the provisions of Sec. 11339 G. C., it then became imperative, on the part of the plaintiff, to prove that at the date of the policy the insured was alive and in sound ■health. This threw the burden on the plaintiff, and the failure to so charge was prejudicial error.

The judgment of the court of common pleas will be reversed, and the cause remanded to that court for a new trial.

Walters and Jones, JJ., concur.


author: JONES, O. B., J.

text:
    NEGLIGENCE — SIDEWALKS.
    [Hamilton (1st) Court of Appeals,
    July 16, 1913.]
    Swing, Jones and Jones, JJ.

      Mary E. Mooney v. Louis J. Hauck.
    Abutter Liable for Injury to Pedestrian on a Defective Walk.
    An abutting owner is liable to a pedestrian, injured by a fall caused by a defective covering of an areaway beneath the sidewalk, notwithstanding the statutory duty of the municipality to keep sidewalks in repair; the question whether the defect in this particular instance was of such a character as to become a nuisance is one which should be submitted to the jury.
    [Syllabus by the court.]
    Error to common pleas court.

      Otis H. Fish and Sanford Brown, for plaintiff in error:
    The abutting landowner is bound to keep in repair coal-holes, areaways, etc.

      Babbage v. Powers, 130 N. Y. 281 [29 N. E. Rep. 132; 14 Jj. R. A. 398] ; West Chicago Masonic Assn. v. Cohn, 192 111. 210 ' [61 N. E. Rep. 439; 85 Am. St. Rep. 327] ; Canandaigua (Tr.) ■v. Foster, 156 N. Y. 354 [50 N. E. Rep. 971; 41 L. R. A. 554; <66 Am. St. Rep. 575] ; Phoenixville v. Iron Co. 45 Pa. St. 135; .Elliott Rd. & Str. (3 ed.) See. 902; 15 Am. & Eng. Enc. Law .(2 ed.) 439; Rupp v. Burgess, 70 N. J. Law 7 [56 Atl. Rep. 166]; Omaha v. Trust Co. 88 Neb. 519 [129 N. W. Rep. 996] ; Curran v. Klammer, 62 N. Y. Supp. 1061.
    Tbe abutting owner Hauck is liable regardless of tbe question of the liability of a city.

      Morris v. Woodburn, 57 Ohio St. 330 [48 N. E. Rep, 1097] ; Gates v. Railway, 150 Pa. St. 50 [24 Atl. Rep. 638; 16 L. R. A. 554] ; O’Malley v. Gerth, 67 N. J. Law 610 [52 Atl. Rep. 563] ; Landru v. Lund, 38 Minn. 538 [38 N. W. Rep. 699] ; Calder v. Smalley, 66 Iowa 219 [23 N. W. Rep. 638; 55 Am. Rep. 270] ; Davenport v. Ruckman, 37 N. Y. 568; Tobin v. Radlway, 59 Me. 183 [8 Am. Rep. 415] ; McDaneld v. Logi, 143 111. 487 [32 N. E. Rep. 423],
    The landlord is liable if the defect or nuisance exists when the lease is made.

      Whalen v. Gloucester, 4 Hun. (N. Y.) 24; Kalis v. Shat-tuck, 69 Cal. 593 [TI Pac. Rep. 346; 58 Am. Rep. 568] ; Swords v. Edgar, 59 N. Y. 28 ¡17 Am. Rep. 295] ; Durant v. Palmer, 29 N. J. Law 544.

      Harmon, Colston, Goldsmith & Hoadly and Oscar Sioehr, for defendant in error:
    Cited and commented upon by the following authorities: Jansen v. Atchison, 16 Kan. 358; Rochester v. Campbell, 123 N. Y. 405 [25 N. E. Rep. 937; 10 L. R. A. 393; 20 Am. St. Rep. 760] ; Rupp v. Burgess, 70 N. J. Law 7 [56 Atl. Rep. 166] ; Wilhelm v. Defiance, 58 Ohio St. 56 [50 N. E. Rep. 18; 40 L. R. A. 294; .65 Am. St. Rep. 745] ; Keokuk v. Independent District of Keokuk, 53 Iowa 352 [5 N. W. Rep. 503; 36 Am. Rep. 226] ; Kirby v. Market Assn. 80 Mass. (14 Gray) 249 [74 Am. Dec. 682] ; Canandaigua (Tr.) v. Poster, 156 N. Y. 354 [50 N. E. Rep. 971; 41 L. R. A. 554; 66 Am. St. Rep. 575] ; Morris v. Woodburn, 57 Ohio St. 330 [48 N. E. Rep. 1097] ; Henderson v. Reed, 23 Ky. L. Rep. 463 [62 S. "W. Rep. 1039] ; Mineral City v. Gilbow, 81 Ohio St. 263 [90 N. E. Rep. 800; 25 L. R. A. (N. S.) 627] ; Kellogg v. Traction Co. 80 Ohio St. 331 [88 N. E. Rep. 882; 23 L. R. A. (N. S.) 158; 17 Ann. Cas. 242]; Sammins v. Wilhelm, 3 Circ. Dec. 587 (6 R. 565); Gable v. Toledo, 9 Circ. Dee. 63 (16 R. 515); Vandyke v. Cincinnati, 12 Dec. Re. 778 (1 Dis. 532); Shindelbeck v. Moon, 32 Ohio St. 264 [30 Am. Rep. 584];' Collins v. Schmidt, 11 Dee. Re. 103 (24 Bull. 453); Nelson v. Canisteo, 100 N. Y. 89 [2 N. E. Rep. 473] ; Bourget v. Cambridge, 159 Mass. 388 [34 N. E. Rep. 455] ; Johnon v. Grunkemeyer, 11 Dee. 412 (8 N. P. 274); Cincinnati v. Fleischer, 63 Ohio St. 229 [58 N. E. Rep. 568]; Louth v. Thompson, 1 Pennewill’s (Del.) 149 [39 Atl. Rep. 1100] ; Ohliger v. Toledo, 10 Circ. Dec. 762 (20 R. 142); Cushing v. Boston, 128 Mass. 330 [35 Am. Rep. 383] ; Elster v. Springfield, 49 Ohio St. 82 [30 N. E. Rep. 274]; Stone v. Light Co. 20 Dec. 130 (9 N. S. 545); Iroquois Hotel Co. v. Golumbus, 18 Dec. 662 (5 N. S. 357) ; Dillon, Mun. Corp. Sec. 1720 (5 ed.) p. 5; Mattheivs v. DeGroff, 13 App. Div. 356 [43 N. Y. Supp. 237] ; Spaine v. Sliner, 51 App. Div. 481 [64 N. Y. Supp. 655]; Davenport v. Buckman, 37 N. Y. 567; Wolf v. Kilpatrick, 101 N. Y. 146 [4 N. E. Rep. 188; 54 Am. Rep. 672] ; West Chicago Masonic Assn. v. Cohn, 192 111. 210 [61 N. E. Rep. 439; 55 L. R. A. 235; 85 Am. St. Rep. 327],
    Ohio eases: Shindelbeck v. Moon, 32 Ohio St. 264 [30 Am. Rep. 584] ; Edwards V. Bissler, 26 O. C. C. 428 (5 N. S. 44), affirmed, no op., Edwards v. Bissler, 69 Ohio St. 572; First Nat. Bank v. Gillen, 27 O. C. C. 609 (7 N. S. 33); Burton Tp. (Tr.) v. Tuttle,. 30 Ohio St. 62.

       Affirmed, no op., Hauck v. Mooney, 91 O. S. 000; 60 Bull. 113.

   JONES, O. B., J.

The action below was for damages resulting from injuries suffered by reason of a fall caused by a defect in a sidewalk, while plaintiff was walking thereon. It ,was brought against the owner of the premises abutting upon the defective sidewalk. The defects alleged consisted of an open areaway constructed and used in connection with thé house of the defendant extending into. the sidewalk about three or four feet and along the front four or five feet, the covering of which areaway was iron or metal containing many round openings two or three inches in diameter, made for the purpose of being covered or filled with pieces of glass commonly called bulls-eyes; and said covering was defective and unsafe in that many of said openings or perforations were not closed up, filled or covered but were open and unprotected. Plaintiff alleged that while exercising due care as a pedestrian she stepped upon such covering whereupon the heel of one of her shoes caught in one of said unprotected openings and caused her to fall and fracture her ankle. She charges negligence against the defendant in creating and permitting said defect, in permitting said openings to remain open and so maintaining them in this defective condition, and charges knowledge of said defendant concerning such condition, or that by the exercise of due and ordinary care and diligence on his part defendant could or would have known of said defect in time to have had same repaired and thereby avoided injuries to the plaintiff.

Defendant demurred to the amended petition, and the court below sustained said demurrer, and the final judgment was entered in favor of the defendant. Defendant insists that the primary duty of keeping streets and sidewalks in proper repair and condition rests upon the city and not upon the owner of abutting property, and that therefore the demurrer was properly sustained. Elaborate and exhaustive briefs have been filed by each side, in addition to the full oral argument that was made to the court, but it is not deemed necessary by the courts to discuss the numerous authorities set out by each side. The ease of Morris v. Woodburn, 57 Ohio St. 330, seems to cover the principle of the case at bar. The syllabus is as follows:

“If the owner of a lot abutting upon a street of a municipality, for the use of his property, constructs a vault under the sidewalk over winch he negligently places and maintains a defective covering, he is liable directly to a footman injured thereby, notwithstanding the omission by the municipality of the duty imposed upon it by statute to keep the street in re pair. ’ ’

In the opinion of the court, Shauek, J., uses the following language:

“But while the tort of the city consisted in the failure to discharge a duty imposed by statute, that alleged in the amended petition against Mrs. Morris, consisted in the creation of a nuisance, dangerous to those using the walk. These are concurrent and related torts, but they are not joint. In view of their independent character, the plaintiff might, at her election, maintain her action against either the city for its omission of duty, or against Mrs. Morris for the creation of the nuisance which occasioned her injury. And it appears from reason and authority that the primary liability in such ease is upon him who actively creates the nuisance; so that if a recovery were had against the city it might in turn recover from the perpetrator of the wrong. Chicago v. Robbins, 2 Black 418; Chicago v. Robbins, 4 Wall. 657; Rochester v. Campbell, 123 N. Y. 405.”

It is urged by counsel for defendant however that the principle of this case is limited to an act of commission on the part of the owner; that the allegation must appear in the petition directly charging the property owner with the defective construction of something that becomes a nuisance, in addition to its continued maintenance. We do not think that the language is to be so narrowed as is contended for, but that where the original construction might have been without fault, if it should be allowed by reason of accident or nonrepair to become a nuisance, such failure to repair might itself become the creation of a nuisance and come within the terms of the above case.

The question raised by the petition is one of fact, and should have been submitted to a jury in accordance with the principles laid down in the recent case of Gibbs v. Girard, 88 Ohio St. 34. The demurrer to the amended petition below should have been overruled.

The judgment is therefore set aside, and the cause remanded for further proceedings.

Swing and Jones, JJ., concur.