text:
    JUDGMENTS — RES ADJUDICATA
    [Hamilton (1st) Court of Appeals,
    March 22, 1915.]
    Jones, Jones and Gorman, JJ.

      William E. Hutton et al v. William S. Curry.
    Relitigation of Question as to When Case Failed Otherwise than on Merits Denied.
    "When a court of last resort has decided that an action has failed otherwise than on its merits on a certain date, and it is sought by averments in an answer to the action to show that the former action failed otherwise than on its merits on a different date from that found by the court of last resort, the fact as to when the action failed otherwise than on its merits can not be relitigated under the averments of the answer, as that question is res adjudicata, and the averments of the answer which seek to raise that question again, are properly stricken from the pleading on motion.

      Ernst, Cassatt & Cottle, for plaintiffs in error.

      Thos. L. Michie, for defendant in error.

      Judgment modified on other than point decided herein, Hutton v. Curry, 93 Ohio St., 339.

   GORMAN, J.

The first assignment of error alleged by counsel for plaintiff in error is that the court below erred in granting the motion to strike from the answer the averments of the second defense.

The record shows that in February, 1904, the plaintiff’s action in the former case was dismissed, and in April, 1904, this entry of dismissal was set aside because, as set out in the entry, the entry of dismissal was made by inadvertence and mistake. Then on April 21, 1906, the court found that the entry of April, 1904, setting aside the entry of dismissal, was made without notice to or knowledge of defendants after term, and was irregular and void, and set aside said entry of April 29, 1904.

Upon this state of facts on a demurrer to the petition the general term of the superior court and the Supreme Court, by an equally divided court, held that within the meaning of Sec. 11233 G. C. the plaintiff in the former case failed otherwise than on the merits at the date of the last entry made by the superior court in special term, to wit, on April 21, 1906.

This ruling we believe is final and conclusive in this case, and binds this court as to the time when plaintiff failed in the former action otherwise than upon the merits; and this present action having been commenced within one year from April 21, 1906, was brought within time and is not barred.

The theory upon which the general term of the superior court so held is that when the entry of April, 1904, setting aside the entry of dismissal, was made, the former action was then and thereby reinstated as a pending untried case and so continued until April 21, 1906, when the superior court in special term set aside the entry of April, 1904, because the-same was made without notice and was therefore irregular and void, at which time'the plaintiff’s cause failed otherwise than upon the merits. It failed because of the last action taken by the special term of the superior court on April 21, 1906, and not by reason of the dismissal in February, 1904. If this last entry of April 21, 1906, had not been made, then manifestly the plaintiff would have been enabled to proceed with his former case and prosecute it to a final judgment on the merits; but by reason of the court’s entry of April 21, 1906, he was then and thereby precluded from prosecuting his action to a final determination on the merits, and we are of the opinion that the general term of the superior court did not err in finding that this date, April 21, 1906, was the time when the plaintiff failed otherwise than on the merits of his ease.

■ Now after the case had been taken to the general term and to the Supreme Court, and this point decided adversely to the contention-of plaintiffs, they set up in a second defense of an answer, certain averments to the effect that the superior court in special term, in the usual course of business after due and regular notice in the Court Index, a daily: law journal of general circulation especially among the lawyers, and upon a call of the former ease for trial regularly and plaintiff having failed to appear, dismissed the cause without record and without prejudice, and held that the entry of April, 1904, was made without notice to counsel for defendants and was therefore null and void because so made after the term. Upon motion all the averments of this second defense were stricken from the answer by the court below on the grounds that the matters therein set up had been adjudicated in the rulings on the demurrer to the petition by the general term of the superior court and the Supreme Court.

Now the power of the special term of the superior court to dismiss the plaintiff’s former action in February, 1904, for want of prosecution was not drawn in question. It was only claimed that it was made inadvertently and by .mistake. Whether this entry was made inadvertently and by mistake, or not, there is no doubt of the court’s power and right to set it aside during the term at which it was made (Sec. 11586). Therefore it was not material under what circumstances this entry was made in the former case. The sole question is as to the jurisdiction or power of the court below to make the entry of April 29, 1904, setting aside the entry of dismissal of February, 1904, after the term at which the entry of dismissal was made, the superior court of Cincinnati having a term every month.

By the provisions of Sec. 11631 G. C., Subd. 3, the court had power to set aside the judgment of dismissal after the term, for mistake, neglect or omission of the clerk, or irregularity in obtaining the judgment. Proceedings to correct mistakes shall be by motion, upon reasonable notice to the adverse party or his attorney (Sec. 11634). Now it appears by the record of the case, in the last entry, made April 21, 1906, that this entry of April, 1904, was made without notice and therefore was irregular and void. The effect of proving all the allegations in the second defense of defendants’ answer would be to establish the fact that the second entry' was made without notice and was therefore null and void. Nothing more than the establishment of these facts could be of any benefit to defendants. But these facts are already found in the entry of April 21, 1906. So that it would appear that all these averments in the answer relate to and touch a matter already adjudicated, and therefore these matters were res adjudicada. Evidently the learned judge who granted the motion to strike out these averments of the second defense was of the opinion that the proof of all the facts set out in this defense of the answer would hot avail the defendants or affect the issues then left in the case.

The fact remained that the former action failed otherwise than upon the merits on April 21,1906. This does not mean that the action was then dismissed, but by this entry plaintiff was precluded from proceeding with his action.

We are of the opinion, in view of what was settled by the ruling on the demurrer to the petition, that the matters contained in the second defense of the answer were adjudicated and the court did not err in striking from the answer these averments.

We find no error in the admission or exclusion of evidence, or in the charge of the court, and no errors which would justify a reversal of the judgment. We think the verdict is sustained by the evidence, and the judgment will therefore be affirmed.

Jones (E. H.), J., concurs.

Jones (O. B.), J., dissenting.

In my opinion, the first case of the plaintiff failed when it was dismissed February 17, 1904. The defendants had no notice of subsequent proceedings and were never in court in that case after the February term in which that dismissal was entered. The entry of April 19, 1904, was void and therefore of no effect in continuing the case, and was so held by the entry of April 21, 1906, which did not itself terminate the case, but simply expunged the previous entry and found that the case had been finally dismissed February 17, 1904. The last entry was not the final failure of the case, but declared when it had failed.

The demurrer to the petition was overruled by the general term of the superior court in a majority opinion, which found that sufficient facts were not set out to show the validity of the original entry of dismissal. Defendants sought to bring these facts before the court by the allegations in the second defense of its answer. In my opinion the trial court erred in striking out this second defense, and the petition in this case was filed too late.


source: Caselaw Access Project

author: BY THE COURT

license: Public Domain

text:
    APPEAL — GUARDIAN AND WARD
    [Knox (5th) Court of Appeals,
    October Term, 1915.]
    Shields, Powell and Houck, JJ.

      In re Guardianship of Charity Ann Robinson.
    1. Right of Guardian to Appeal from Order Terminating Guardianship.
    A guardian has the right of appeal from an order by the probate court terminating the guardianship.
    2. Appeal Bond not Required of Guardian, Having no Personal interest in Appeal.
    Such an order does not terminate the guardianship absolutely, until the right of appeal or any other statutory rights have lapsed; and inasmuch as it must be assumed that the guardian has no personal interest in the appeal, it will be regarded as taken in the interest of the trust and an appeal bond can not be required.

      Robert L. Carr and L. C. Stilwell, for guardian.

      F. 0. Levering, D. B. Rawlins and S. M. Crouch, for ward.

       Motion to certify overruled by Supreme Court, December 7, 1915.

   BY THE COURT

The question presented in this case for adjudication arises as follows:

Charity Ann Robinson was adjudged an imbecile in the probate court of this county, and a guardian was appointed for her some time in the year 1913. After various motions had been filed and disposed of the said Charity Ann Robinson filed a motion in the probate court, on the 9th day of February, 1915, for the termination of the guardianship, which motion was finally heard and disposed of March 15th, 1915, and on that date the judge of the probate court entered an order in which he declared the guardianship of said Charity Ann Robinson terminated, and ordered her guardian to file an account, as required by Section 11010 of the General Code. Afterward, within the time prescribed by law for that purpose, the guardian filed a notice of his intention to appeal from the order of the probate court to the court of common pleas. No bond was filed by the guardian to perfect such appeal.

A motion was then filed by Charity Ann Robinson, in the court of common pleas, to dismiss the appeal upon two principal grounds; first, that the order from which an appeal was attempted to be taken was not appealable; second, that if the same was appealable the guardian in attempting to appeal should have filed a bond, as it was not an appeal in the interest of his trust as such guardian. This motion was heard in the court of common pleas and sustained, and the appeal was dismissed, Robinson, In re, 30 Dec. 434 (18 N. S. 286); whereupon this proceeding in error was commenced in this court to reverse the judgment of the court of common pleas.

It is insisted in argument upon the part of Charity Ann Robinson that the probate court has final jurisdiction in the matter of terminating guardianship, and having such final jurisdiction the case was not apealable. The court is of the opinion, under the authority of Hiett v. Nebergall, 45 Ohio St. 702 [17 N. E. 558], that the cause is appealable. In the case cited application was made by a ward who had been adjudged an imbecile that an order be entered terminating such guardianship, on the ground mentioned in the statute, namely: that the order was improperly made in the first instance; or, if not so, then that the ward had been restored to reason. The motion in that case was overruled, and an apeal taken by the ward, and the court sustained the right of appeal; and it is difficult for this court to see how, if the ease was appealable as to one party, it would not also be appealable by another party who might be affected by such order. In other words, the ward alone is not the only party to a proceeding of that kind, although no provision is made for notice to any other parties; but as the effect of such an order is to remove and discharge the guardian he would be a party affected thereby, and therefore would have the right of appeal.

More difficulty has been experienced by the court as to whether or not an appeal taken by the guardian upon a notice in writing merely, as provided by the statute for the appeal of parties wbo appeal in tbe interest of their trust, would apply in cases of this kind, or whether the guardian or other person attempting to appeal should give a bond. Upon consideration of the matter the court has arrived at the conclusion that a guardian has no personal interest in the matter of the guardianship, or at least ought not to have, and that if an appeal is taken it is taken only in the interest of the trust. It is contended, however, that the trust terminates with the order, and therefore no appeal can be taken in the interest of the trust. But we think that an order terminating the guardianship does not terminate it absolutely until the right of appeal or any other statutory rights that might attach thereto have terminated, and that such right would exist without regard to the absolute character of the order terminating the guardianship made in the probate court.

Viewing this case as we do, the court thinks that the judgment of the court of common pleas dismissing the appeal was erroneous and should be reversed, and the cause should be remanded to the court of common pleas for hearing upon the merits of the motion to terminate such guardianship.

Shields, Powell and Houck, JJ., concur.


author: JONES (E. H.), J.

text:
    INFANTS — NEGLIGENCE
    [Hamilton (1st.) Court of Appeals,
    January 16, 1915.]
    Swing, Jones and Jones, JJ.
    Charles Eisen v. Bertha Halloran, Admx.
    Responsibility of Mother for Negligence of Those in Whose Custody Child Had Been Placed.
    In an action by a mother for damages on account of the death of her four year old child, for which she sues as administratrix, it is error to refuse to give a special charge, requested by the defendant before argument, to the effect that the said mother was responsible for the act of those in whose custody she had placed the child, and if it appear from the evidence that they failed to exercise ordinary care for the safety of the child under the circumstances, damages can not be recovered by the mother for her own benefit; but such an error is not prejudicial when the same principle of law was incorporated in the general charge and the evidence fails to show any negligence on the part of the mother or those in whose custody she had left the child.

      Waite & Schindel, for plaintiff in error.

      Galvin & Bauer, for defendant in error.
   JONES (E. H.), J.

In the court below a judgment was recovered for $4,000 for the death of Ruth Halloran, four years of age, caused by being struck by an automobile owned and driven by. the plaintiff in error.

Elaborate briefs have been filed by counsel for the parties, and the arguments there advanced have been carefully considered. Some of the errors complained of arise from a mistake or misunderstanding on the part of counsel for plaintiff in error as to the contents or import of the pleadings. The language of the petition justifies the action of the trial court in charging the jury upon the doctrine of “last chance;” and the answer to the petition, in the second defense stated therein, charges the mother of the child, Bertha Halloran, with negligence. So that the alleged errors pointed out by counsel for plaintiff in error in his brief, relating to the action of the court in charging the jury upon these issues, are not well taken.

In three instances however, to which our attention is called, the trial court erred, although after much discussion we have reached the conclusion that the errors were not prejudicial.

The court erred, first, in refusing to give special charge No. 5, requested by defendant, as follows:

“I charge you that the mother, Bertha Halloran, was responsible for the acts of Herbert and Irene Becker, in whose custody the deceased Ruth Halloran was left, and if you find from the evidence that they failed to exercise ordinary care under the circumstances for Ruth’s safety, the plaintiff can not recover any damages for the benefit of said Bertha Halloran. ’ ’

Second, the court erred in failing to charge (quoting from the brief):

“That if the evidence of plaintiff raises a presumption of contributory negligence the burden rests upon her to remove that presumption, and it is only after that presumption is removed that the burden of proving contributory negligence rests upon the defendant. ’ ’

Third, it was error for the court to admit in evidence statements of witnesses that a few hours after the death of the child, while at the home of the mother, a statement was made by Mr. Neuzel in the presence of Mr. Eisen, plaintiff in error, as follows: “I will admit that we were running awfully fast;” and the further statement of said witnesses, “Mr. Eisen stood silently and made no response to said statement.”

With reference to the first error, we have to say that the court included the proposition of law therein contained in its general charge; and although the party requesting the charge was entitled to have it given before argument, we can not see that the failure to do so was prejudicial, in view of the subsequent action of the court in incorporating it in the general charge. Were this a case where the question of the negligence of the custodians was by the record placed in doubt, a different question would be presented, but a careful scrutiny of the transcript of the evidence before us in this case fails to show proof of any act of negligence on the part of the mother or those in whose custody the child was at the time. The word “negligence” is here used in its legal sense. We do not mean to find, as a matter of law, that the custodians exercised at the time the highest possible degree of care. It is not necessary to so find. The right of recovery depended only upon the exercise of ordinary care on their part. The jury could not have justly found in this case that there was any lack of ordinary care on the part of either the mother or Mr. and Mrs. Becker, aunt and uncle of the child, with whom she had temporarily left the child.

Again, the purpose of a special charge given at the request of counsel before argument is to acquaint counsel with the view entertained by the court upon the law of the case so that he may be guided in the presentation of the case to the jury. The principle covered by the charge requested is so interwoven into this case, and necessarily involved, that we can not conceive how the refusal of the court to give the charge when requested would have anj7 effect upon the argument.

The second error committed by the court, as before found, is held to be not prejudicial for the reason first assigned above with reference to special charge No. 5. There was no want of ordinary care on the part of the mother or her agents shown by the record in this case, much less is there any presumption of negligence, on the part of them, raised by the evidence of plaintiff’s witnesses. In this view of the record, we are of the opinion that this error would not justify a reversal of the judgment below.

As to the third error, relating to the admission of evidence, we make the same finding, viz., that it was not prejudicial. Independently of this evidence we are convinced that it is sufficiently shown that the accident was in no wise due to the negligence of the mother or her agents, but was caused by failure to exercise the proper degree of care required on the part of the driver of the machine.

It is argued that the judgment of $4,000 is excessive. Many cases are referred to in the briefs on both sides showing acts of courts in passing upon the amounts of verdicts in similar cases. We are satisfied that the verdict is larger than is generally awarded for the death of a child of such tender years. The many eases cited show it to be above the average in amount, but we can not say that it is so much so as to warrant a reduction or reversal.

Upon an examination of the entire case including the facts and the law, it appears that substantial justice has been done and the judgment will be affirmed.

Jones (O. B.), J., concurs.

Swing, P. J.,

dissents as to the amount of the judgment, deeming it excessive beyond reason.


author: MARVIN, J.

text:
    INSURANCE
    [Medina (8th) Circuit Court,
    November, 1902.]
    Caldwell, Hale and Marvin, JJ.
    Farmers' Mutual Fire & L. Ins. Assn.v. L. J. Crow.
    Assessments to Reimburse Officers of Mutual Insurance Associations for Losses Advanced Held not Illegal.
    Where the by-laws of a mutual fire insurance association organized under Secs. 3686-3690 R. S. (Secs. 4680 G. C. et seq., provide that an assessment shall be levied at a certain date each year to pay the losses incurred and incidental expenses, the inclusion in the amount for which assessments are levied of an amount sufficient to reimburse officers of the company for money which they had advanced to pay losses as they occurred, does not make the assessments illegal.
    Error.
   MARVIN, J.

The parties to the original action were the reverse of the parties as they appear in this proceeding in error. In this opinion the term plaintiff will be used to designate L. J. Crow, and the term defendant to designate the insurance company.

The defendant is a corporation organized under Secs. 3686 to 3690 R. S. (Secs. 4680 G. C. et seq.), the purpose of the organization being the mutual insurance of the property of its members against loss by fire and lightning.

On April 17, 1897, the plaintiff procured from the defendant a policy of insurance in the amount of $1,725, upon a dwelling-house owned by him, together with its contents, and other buildings upon his home premises. This policy by its terms was effective from May 23, 1897, at noon, to May 23, 1902, at noon.

On March 20, 1901, said dwelling-house and most, if not all, of the other property covered by said policy of insurance was destroyed by fire. Proper notice of such fire and proofs of loss were made to the defendant, but the defendant refused to pay for such loss under said policy because it claimed that the plaintiff had forfeited his right to the protection afforded by said policy.

At the time said policy was issued the plaintiff paid to the defendant a small sum of money.

By the terms and conditions of the policy it was provided that assessments should be made from time to time upon policyholders, who, by virtue of taking such policies, became members of the association for the payment of the expenses of maintaining the association, and to pay losses which should be sustained by members. This provision as to assessment is found in the constitution of the association which is made a part of the policy, and is in these words:

“Those entering therein shall agree to be assessed specifically for incidental purposes and for the payment of losses and damages which may occur to any member of said association by fire or lightning.”

The by-laws of the asociatiom also made a part of the policy, make provision as to these assessments in these words:

“Each member shall pay his or her assessment within 30 days after date of notice from the secretary, and in default thereof, ten cents per mile shall be added to the amount of his or her assessment, which the secretary shall receive for collecting the same. Should any member fail to pay his or her assessment for more than 60 days, he or she shall forfeit the protection of this association until all dues are paid in, and the secretary shall proceed to collect the same by law in the name of the association. ’ ’

Another provision of the by-laws incorporated in the policy is that, upon proper proofs and ascertainment of loss by a member of the association, “the board of directors shall have authority to provide the necessary means for the payment of such loss by borrowing money, or otherwise, within the time specified in the by-laws whenever the same is ascertained and adjusted. ’ ’

On the part of the defendant it is urged that on or about July 2, 1900, the defendant duly assessed against the plaintiff the sum of $5 to be paid by him on or before September 25,1900; that said sum was the proper proportionate share which should have been paid by said defendant for the dosses and incidental expenses of the association at the time such assessment was made; that the plaintiff was duly notified of such assessment, but wholly failed and neglected to pay the same within the time limited, or within sixty days after he was duly notified of such assessment, and that he never was reinstated as a member of the association.

Upon the trial it developed that an agreement was made, or undertaken to be made, by the association against the plaintiff at the date and for the amount claimed by the defendant, and evidence was given tending,to show that the plaintiff was duly notified of such assessment. It is not claimed that he ever paid it. The plaintiff says, however, that such assessment was not duly and legally made.

It is provided in the by-laws of the association that unless otherwise deemed necessary by the officers of the association the board of directors shall on the last Thursday in August of each year, meet for the purpose of ordering an assessment to meet the losses and expenses of the association for the past year.

It will be observed that the assessment for the payment of which the plaintiff is claimed to be in default was made on July 2, and not on the last Thursday in August, but since by the provision of the by-laws such assessment may be made at other times than said last Thursday in August, when deemed necessary by the board of directors, the date of the assessment is not important.

A serious question in the case is whether the assessment was made for the purposes provided by the laws governing the association.

On the part of the plaintiff it was urged that other things were included in the assessment than those for which assessments were authorized to be made — that is, for something in addition to the amount necessary for the payment of the incidental expenses and losses sustained by members.

It appears that, in some instances at least, when losses were sustained, money for the payment of such losses was furnished by individual members of the board of directors, and that, included in the assessment made on July 2, 1900, was an amount for the repayment of the money so furnished, together with interest thereon, without there haying been a formal borrowing of said money by said association; that is, without any meeting of the board of directors at which said borrowing was in terms authorized; and on the part of the plaintiff it is urged that if any part of the amount included in the assessment for non-payment of which the forfeiture on the part of the plaintiff is claimed, was to repay this money so advanced, the assessment was unlawful, and the failure to pay by the plaintiff did not forfeit his rights under the policy.

The court charged the jury, among other things:

“If you find from the evidence that any part or portion or fraction of said $5 thus assessed against said plaintiff by defendant was assessed to be used by defendant to pay off any person or persons who had advanced any money to pay said losses or expense of said company mentioned and not wholly for the purpose to pay to said persons who had suffered said losses the amount due and owing to them and the. expenses of said association after plaintiff became a member, or for money borrowed to pay said losses and expenses by defendant, through its board acting as a board, then said failure of plaintiff to pay said assessment would not defeat his right to recover in this action. ’ ’

And again:

“If any portion of said $5, however small, was assessed against the plaintiff to pay persons for money gratuitously advanced by them without any authorization by defendant through its board of directors acting as such, then your veridct should be for the plaintiff.

Other portions of the charge are to the same effect, the instructions being clearly that the assessment could only be made to pay the incidental expenses of the association, for losses sustained by members of the association and for money borrowed by the asociation to pay such losses when such borrowing had been done under authorization especially granted by the board of directors at a meeting of such board.

Various requests were made by the defendant for instructions to be given to the jury, all of which, except the one marked “Bequest No. 4,” were given. The jury retired after these instructions were given, and later returned into court, reporting that they were unable to agree upon a verdict, whereupon the court ordered the said jury to retire to its jury-room and return a verdict for the plaintiff, as prayed for in his petition. The jury thereupon retired to its room, and upon coming again into court, returned a verdict for the plaintiff.

Motion for a new trial was made by the defendant, which was overruled, and judgment was entered upon the verdict.

Numerous errors are claimed on the part of the defendant, one of which is that the court erred in refusing to grant “Bequest No. 4, ’ ’ which was, in part, that if a part of the assessment made on July 2, 1900, was one which might lawfully be made and the balance one which might not lawfully be made, that the plaintiff forfeited his membership by not paying so much of said assessment as was lawfully made. There was no error in refusing this request. The duty was upon the insurance company to fix the right amount to be assessed and to notify the plaintiff of the amount which was legally due from him and if the amount so claimed from him was not the lawful amount it did not devolve upon him to ascertain and tender to the association the amount which it might lawfully have claimed.

There was, however, error in the charge of the court that no assessment could lawfully be made which should include an amount for the repayment of moneys furnished for the payment of losses. If money was furnished by the officers of this association which was properly used by such association in the payment of losses sustained by its members, and such use of the money was ratified by the association by levying an assessment to repay, it was proper to treat such money as a loan to the association. No possible harm could come to the association or any of its members by using money obtained by this means rather than by using money after a formal loan had been made. It would be a most inequitable and unjust rule to hold that the members of this association might have the benefits of having its losses paid by one of its officers, or some other person, and then say that the members of the association could not be assessed to pay the money so furnished.

It follows from what has been said that the court erred in instructing the jury to return a verdict for the plaintiff, and for these errors the judgment is reversed and the case remanded to the court of common pleas for further proceedings.

Caldwell and Hale, JJ., concur.


text:
    ATTACHMENT AND GARNISHMENT
    [Cuyahoga (8th) Circuit Court,
    December 8, 1902.]
    Caldwell, Hale and Marvin, JJ.
    Benjamin Emmerman et al v. Ohio Iron & Metal Co.
    Attachment Lies to Recover Money Paid for Goods in Excess of Amount Furnished.
    An action to recover money paid to the defendant by reason of the defendant having billed and collected for goods in excess of the amount of goods actually shipped to plaintiff, is an action to collect a debt fraudulently or criminally contracted within the meaning of Sec. 5521 R. S. (Sec. 11819 G-. C.), and is ground for attachment.
    Error.
   MARVIN, J.

The Ohio Iron & Metal Co., which is a corporation, brought suit in the court of common pleas against Benjamin Emmerman and others, his partners in business, which suit is still pending in that court. At the time of filing the petition an affidavit was filed' by the plaintiff for an attachment against the defendant. Later an alias affidavit for attachment was filed and an attachment was allowed. The defendant below moved for a dissolution of such attachment. This motion was overruled, and it is to reverse the judgment. overruling such motion that this proceeding is prosecuted. The evidence introduced in the court of common pleas upon this motion was not brought before us by bill of exceptions and can not, therefore, be considered, but one of the grounds of the motion is that the affidavit upon which the attachment was allowed is insufficient. That affidavit, omitting the formal parts, reads:

“That the claim on which this suit is brought is damages sustained by plaintiff by reason of the fraudulent sale by defendant to plaintiff of a quantity of steel scrap, in billing and collecting from plaintiff for 93,600 pounds and fraudulently shipping only 36,060 pounds of said scrap.”

The affidavit in all particulars except as above quoted, is conceded to be suficient and the question is, is there such a statement in so much of the affidavit as is quoted to bring it within the statute.

The proceeding for attachment is based upon Sec. 5521 B. S. (Sec. 11819 G. C.), and the language of the section is:

‘ ‘ That in a civil action for the recovery of money the plaintiff may, at or after the commencement thereof, have an attachment against the property of the defendant upon the grounds herein stated. 1. "When the defendant or one of several defendants * * *
“9. Has fraudulently or criminally contracted the debt, or incurred the obligation for which suit is about to be or has been brought.” * * *

The whole question is, whether the language above quoted from the affidavit in this case shows that the debt for which the suit was brought was fraudulently contracted. We hold that it clearly does so show. The statement is that the defendants be-lo'w, by fraud in the sale of certain goods obtained from the plaintiff below pay for more than 50,000 pounds of such goods which they never furnished. If the allegations of this affidavit are true, clearly the debt for which the suit is brought, to wit: the recovery of the money paid for goods never furnished, was fraudulently contracted by the defendant below.

It follows that the judgment of the court of common pleas in overruling the motion to discharge the attachment is affirmed.

Caldwell and Hale, JJ., concur.


author: CALDWELL, J.

text:
    CHATTEL MORTGAGES
    [Cuyahoga (8th) Circuit Court,
    January 26, 1903.]
    Caldwell, Hale and Marvins, JJ.
    Gibson & Price Co. v. Rouse & Hills Co. et al.
    Withholding Chattel Mortgages from Record not per se Fraud upon Creditors.
    When chattel mortgages, covering all the property and all the accounts and bills receivable of the mortgagor, are taken as temporary security and are withheld from record, not as the result of any agreement nor with fraudulent intent, nor for the purpose of securing credit for the mortgagor from other parties, but to prevent creditors already existing from all pressing demands for payment at once, such mortgage is not a fraud upon present prospective creditors.
    Appeal.

      White, Johnson, McCaslin & Cannon, for plaintiff.

      Blandin, Bice & Ginn and Clme, Carr, Talles & Goff, for defendants.
   CALDWELL, J.

The defendant, the Rouse & Hills Co., was in business in the city of Cleveland, and B. L. Rouse was the president of the company and representing- the company in most of the transactions involved in this action.

B. L. Rouse, while the active man in the Rouse & Hills Co. during the course of the events narrated in the evidence in this case, also had a business of his own, which he conducted as B. L. Rouse & Co. His business was largely the manufacturing of goods in the same line as the goods that the Rouse & Hills Co. handled and his goods were sold directly to the Rouse & Hills Co. The Rouse & Hills Co. were debtors to the bank and were also debtors to H. C. Rouse. B. L. Rouse, in his individual business, owed $3,000 in debts. The Rouse & Hills Co. was also indebted to B. L. Rouse in quite a considerable sum of money, but, as he was connected with both companies, this indebtedness to him seems to have been treated in this case, upon his authority, as not a liability of the company.

The B. L. Rouse Co., through its president, B. L. Rouse, applied to the bank for a further credit, and the bank, upon making an inquiry as to the financial condition of the company, was told by B. L. Rouse that it was indebted to H. C. Rouse upon two notes: one for $5,000 and the other for $12,000, and that it had given to him demand cogn-o-vit notes for the same. Thereupon the bank refused any further credit to the corporation unless the H. C. Rouse cognovit notes should be gotten out of the way, and the bank referred the matter to its attorney, Mr. Goff, to determine what could be done in that line. Mr. Goff found that H. C. Rouse was out of the city, in Europe or Africa, and that the firm of Hoyt, Dustin & Kelley were his lawyers, and Mr. Goff thereupon applied to Mr. Dustin in regard to the matter and, after considerable discussion, it was agreed between them that the cognovit notes of H. C. Rouse should be merged, but not surrendered, and that he should have a collateral note for the amount of the same, and that the bank, for the amount that the company then owed it and 'for an additional credit of some $15,000 was to have a note, and these notes were to be secured by chattel mortgages; one to H. C. Rouse for the amount due him, and the other to the bank for the amount that the company then owed it and the additional credit to be given it.

This was not done without several conferences with B. L. Rouse, the president of the company, and Mr. Smith, who was secretary of the company, and these creditors required statements of the financial condition of the Rouse & Hills Co. to be made to them and the officers of the company were examined and quetstioned carefully as to all the assets shown by the statements and to its mode of doing business and as to whether it was making or losing money in carrying on its business. After a full and exhaustive examination along these lines, Mr. Hoyt and Mr. Dustin became satisfied that the company was solvent and was in a fair way of making money, and that Mr. B. L. Rouse assured them that when H. C. Rouse returned he would furnish all the money necessary to the Rouse & Hills Co. to enable it to pay off the bank, and relieve it entirely from any debts that might be pressing; but the Rouse & Hills Co. was just at that time in need of some $15,000 to take up liabilities that it then owed and which it desired very much to take care of at that time, and Mr. Dustin, being satisfied of the financial soundness of the company and believing what Mr. B. L. Rouse said as to the aid that H. C. Rouse would give it upon his return, he (Dustin) took the responsibility of not entering up judgments on these notes and taking a new collateral note to the cognovit notes held by H. C. Rouse, and which were in his possession, and took the chattel mortgage until such time as H. C. Rouse should return to the city of Cleveland.

The securities then taken by way of chattel mortgages and assignments, covered the bills receivable, the accounts and the goods of the Rouse & Hills Co., and also covered all acquisitions that might thereafter come into these lines of credit.

Thus far, it is insisted, that the evidence shows that when these chattel mortgages were given covering substantially all the property of the Rouse & Hills Co. within its possession or that-might thereafter come into its possession in the carrying on of its business, the Rouse & Hills Co. was insolvent, and that the bank, as represented by the officers of the bank and its attorney and the attorney of H. C. Rouse, knew that the company was in-solvent and unable to pay its debts. The evidence shows that the Rouse & Hills Co. was at that time carrying on its business in the usual way and was meeting its financial responsibility with ordinary promptness, and that it was insolvent was not made out to the plaintiff in this case except as the expert bookkeeper sees fit, as a matter of bookkeeping, to throw out certain assets and liabilities to the company ánd reduce the assets of the company by diminishing values. We1 conclude that the company was not at that time insolvent, and that the attorneys who represented the creditors obtaining the' chattel mortgages and assignments had no knowledge of the insolvency of the company nor did they have such evidence before them as would warrant a careful man in believing that the company was insolvent; and that these chattel mortgages were not taken with any intent to hinder, delay or defraud creditors.

These chattel mortgages were supposed to be temporary securities. Relying upon the • confidence of B. L. Rouse that H. C. Rouse would aid the company upon his return to the city, it was supposed by all parties that he would do so upon his return and that then matters would be straightened up and everything put into a more permanent form. These chattel mortgages were not filed of record as required by Sec. 4150 R. S. (Sec. 8560 G. C.), but were held, one by A. C. Dustin, and the other by Mr. Goff — the two creditors to whom they had been given. While these mortgages were thus withheld from the record, the-Rouse & Hills Co. went on with its business in the ordinary way, buying goods as theretofore and carrying on its business in the usual manner. The money obtained from the bank was used in paying liabilities of the company, and, for aught that appears in this case, the mortgagees knew nothing of how business was carried on by the company, until some little time after the mortgages were taken, when they required that monthly statements of all the business being done by the company should be made to them; these were made, and trial balances also furnished. There was nothing in any of these statements that would indicate to the creditors that the company was not getting along well with its business. After these mortgages had been held for several months without being left for record, Mr. Hills of the company came to the city,-he having been out of the city during these transactions, connected with business in the east, and was in consultation with attorneys in the city, and the attorneys representing the chattel mortgages became aware of his presence and, owing to some difficulty between him and Mr. B. L. Rouse of which they had learned, they became suspicious that he intended to do something that might, in some way, be injurious to their securities and, thereupon, by an understanding between them, they took possession of the property secured by their mortgages. Thereafter the Rouse & Hills Co. made an assignment to Mr. Ginn and he is in this case representing the creditors generally, while other creditors are being represented by attorneys who make a claim somewhat different from that of the trustee.

It is claimed by tbe trustee, that these chattel mortgages are void as to all the creditors, while some of the creditors are here claiming that the chattel mortgages are void only as to those credits given before the time of the giving of the chattel mortgages and the time of taking possession under the same.

These facts raise a number of questions in the case :

Are these mortgages invalid as to creditors because the corporation was insolvent when they were given?

As before stated, we think the company was not insolvent when the mortgages were given, and we have also said that they were not given to hinder, delay and defraud creditors; and the bank,and H. C. Rouse, notwithstanding their mortgages covered all goods purchased by the company and all accounts due to it after the giving of the mortgages, took asignments of accounts as late as on the twenty-ninth of the month and not long prior to the time of taking possession under these mortgages; and it may be contended that these mortgages are, therefore, void because of the proximity of the time when the company went into the hands of the trustee. The last claim is that the mortgages are not valid because withheld from record.

This last question is the only one that remains for consideration in this case; and it is determined, first, by the evidence, and second, by a consideration of the law.

The claim made is, that these mortgages were withheld either by agreement between the mortgagor and the mortgagees, to enable the mortgagor to obtain credit in his business, or, if not by such an agreement or understanding to that effect, yet that, under all the circumstances and facts surrounding the transaction, they had the effect to so mislead persons to give credit to the company in the interim of the withholding, that an estoppel will arise in favor of the creditors who, in this interim, extended credit, and will make the mortgage void as to them.

The most favorable evidence in the case is, that there seems to have been an understanding between the attorneys representing the mortgagees, that neither would do anything under his mortgage without giving the other notice. There was no agreement between the mortgagor and the mortgagees as to the withholding of the mortgage from record. The testimony of Mr. Goff bears upon this question somewhat. This question was asked him.

1 ‘ He said to you that with the help of the money which was advanced, and the payments which he could make and the indulgences and extensions which he eould get from merchandise creditors, he would pull through, did he?” Answer. “Who said that ? ’ ’
Question. “B. L. Rouse.” Answer. “No, I don’t think he put it in that way; he said that he would have no difficulty with Mr. Henry Rouse, who held $17,000 of the notes of the Rouse & Hills Co.; that with the $15,000 of additional money that he was to borrow at the bank, he would pay off something like $15,000 or $18,000 of bills payable, at maturity; that his .sales would enable him to take care of his aeounts payable as they matured, with such extensions as he could get by the giving of notes. ’ ’
Question. “You testified before: ‘I recall the $18,000 item and that he wanted about $15,000 to take care of these items, stating that if that were provided, he would have no difficulty out of his sales to take care of the accounts payable, with such indulgences as he eould get in that way?’” Answer. “That is what I now say. ’ ’
Question: “Then the fact that he would still require extensions from merchandise creditors was talked of at that time when this loan was under consideration?” Answer. “I don’t think that question of asking for indulgences or extensions in that way was discussed; it was the right that he had as a dealer, as a purchaser from the jobber or manufacturer, or whatever it was, to his cash discount if he saw fit to pay cash, or the giving of a four months paper, perhaps if he did not care to pay cash; it was simply a right that he had. ’ ’
Question “Did you use the expression ‘such indulgence as he could get?’ ” Answer. “Well, such indulgence as was given him or he had a right to by giving paper. ’ ’
Question. “Indulgence is not a right, is it?” Answer. “Possibly not, strictly speaking.”
Question. “Did you learn from him then that he was asking extensions of merchandise debts that had-become due?” Answer. “No, sir, I did not.”
Question. “And that he has been for some time trying to obtain extensions?” Answer. “No, sir, I did not.”
Question. “Did you make any inquiry on that subject?” Answer. “I think not.”
Question. “You contemplated that he should continue in business as he had before?” Answer. “No, sir, not as he had before; I assumed that he would continue business and that there would be no necessity for any considerable purchase of merchandise until Mr. Rouse’s return.”
Question. “I do not know what considerable means; you contemplated that he would make purchases ? ’ ’ Answer. “Toa very limited extent, I think.”
Question. “You took no action to limit purchases, did you?” Answer. “Yes, I think Mr. Wilson was quite particular to emphasize that matter. ’ ’

This evidence to our mind shows that until Mr. Rouse returned, it was supposed by the mortgagees that the Rouse & Hills Co. were carrying on business, but that, owing to the state of its stock on hand, it would have no occasion until Mr. H. C. Rouse’s return, to obtain credit to any considerable extent. Mr. Rouse did not return as soon as he was expected and the period of holding these chattel mortgages- was for that reason extended beyond what was contemplated when they were given and this led to more extensive purchases by the company than was contemplated by the mortgagees when they received their security. Then bearing upon the question of filing these mortgages, this question was asked of Mr. Goff:

“Now, Mr. Goff, did you not in your experience of such matters, know that if you and he filed this mortgage covering all property then or thereafter existing, of the Rouse & Hills Co., or made its existence known, and the existence of the assignment of the accounts, that that would end the transaction of business by that company in its capacity to get credit?” Answer, “I think I knew if the mortgage was filed, that that would bring about a closing-down of the business. I think that would necessarily follow. ’ ’
Question. “And all the accounts, present and future, had been asigned, and yet you say that nothing was said there by you or Mr. Dustin or Mr. Wilson or Mr. B. L. Rouse or Mr. Smith on the subject of the effect of making known this mortgage, do you?” Answer. “I recall nothing that was said; it was certainly understood between us, that until Mr. Rouse returned, which was expected in the latter part of March, that in order to accomplish what was desired so as to keep that a going concern until Mr. Rouse’s return to the city, that there should not be publicity given.”

This is the only testimony that I find in the case, that hints very closely upon any arrangement between tbe mortgagor and the mortgagees to withhold these mortgages from record, and it is the only thing from which the purpose and intent of the withholding of the mortgages might be inferred to extend to the credit of the company. He distinctly states that he remembers nothing that was said on the question of withholding but he says that it was understood by Rouse and Smith representing the mortgagees that, in order to accomplish what was desired, they would give no publicity until the return of Mr. H. C. Rouse.

To our minds the evidence shows in addition to what I have already said: That this arrangement of giving the mortgages on account of the confidence that B. L. Rouse had that IT. C. Rouse would give the company all the financial aid it needed upon his return, that these mortgages were given, as, in a measure tentative in their character, to hold the matters of the company in its then condition or as they would be after using the money got by the loan until the return of Mr. H. C. Rouse. There was no purpose in witholding the mortgages to injure any creditors that might in the interim sell goods to the company, or renew obligations: nor was there any agreement to withhold the mortgages from record. The only purpose in withholding them was, not to extend the credit of the company, but to prevent creditors, already existing, from so pressing the company that it would be obliged to meet its obligations, not in the ordinary course of business, but by all bringing pressure at once upon it, and this is what we understand this testimony to mean.

And we find from the facts, that the mortgages were not withheld from record with any fraudulent intent or purpose, nor was it siipposed or believed by the mortgagees that withholding from record would be the means of extending the credit of the company, for their belief was that until Mr. Rouse returned, there would be no occasion for the company to make any purchases to any considerable extent.

Much of the law that has been cited upon this question is where there has been a fraudulent intent in withholding the mortgage from record or withholding where it was known by the mortgagee that others would give extensive credit and would be misled by such withholding — which the courts have construed to be a fraudulent withholding. In this ease we think that that law is not applicable to the facts as found by us.

In this state it is, we believe, the law that even under such state of facts, the creditors who have extended credit in the interim between the taking and filing of the mortgage can not be preferred to the mortgagee unless they have, in some way, seized the property or obtained a lien upon it, but we do not see that this question is involved under the facts in this case.

It is contended by counsel for plaintiff that the withholding from record, although not with the intent at the timé the mortgage is given of extending the credit of the mortgagor, yet, if while the mortgage is being withheld, the mortgagee becomes aware of the fact that the mortgagor is having extended to him credit and he still does not file his mortgage, that will work an estoppel upon him on the ground that he has not acted when he was called upon to act and hence can not assert his rights as against one who has been misled by his not acting.

A consideration of the cases in this state, is found in Shirley, In re, 13 O. F. D. 1 [112 Fed. 301], In that case, Judge Day has reviewed carefully many of the decisions of the state of Ohio, and we think his conclusions are well founded, and it will not be necessary for us here to consider them any further than they are considered in that case. Judge Day says that there can be no estoppel in the absence of fraud and in the case he was then considering, he had found that there was no actual fraud, although the mortgage had been withheld by reason of an agreement between the mortgagor and the mortgagee that it should be withheld from the record. And Judge Day says this proposition is true: That there can be no estoppel in the absence of fraud if the mortgagee simply held his security void until filed, as against creditors who were at full liberty to assert their rights against the property. The mortgagor had an undoubted right to prefer creditors by giving to one a security denied to others. When the chattel mortgage is filed, it becomes such preference only from the date of filing; until filed, it is void as to creditors. While this term is used without limitation in the statute, as construed by the Ohio Supreme Court it means such creditors as have fastened upon the property before the filing of the mortgage. All other creditors must assail the security for fraud in order to defeat the preferences. And he says that the cases holding a contrary doctrine are from states with different statutes, or where the Supreme Court has given a different construction to a similar statute.

It is contended by counsel for plaintiff that, outside of the statute and the construction given to it by the Supreme Court, the doctrine of estoppel obtains in these cases; that the decisions of Ohio on the construction of the statute are not adverse to holding that a mortgage withheld from record as this was, will estop the party from asserting it as against those who became creditors of the mortgagor while the mortgage was thus withheld. Many cases are cited to us in which it is claimed that this doctrine is held.

We are cited to Dobson v. Snider, 70 Fed. 10. In that case the court found a design and intent on the part of the bank for whose benefit the mortgage was given and the mortgagor to shield and benfit the latter at the expense of some one else. That case is not applicable to the facts we find in this.

In California, as found in Ruggles v. Cannedy, 127 Col. 290 [53 Pac. 911; 59 Pac. 827; 46 L. R. A. 371]; the court construes the statute pertaining to mortgages in connection with the statute in regard to sales and places the matter of record of mortgage on the same ground and makes it a substitute for the delivery of the goods in a sale, and construes their statute to mean that unless the mortgage is recorded, it is absolutely void as to all creditors.

A number of cases have been cited from Missouri, and that state seems to hold that unless the mortgage is left for record as contemplated by the statute it is void as to any one who has been misled, to his injury.

In State Sav. Bank of St. Joseph v. Buck 123 Mo., 141 [27 S. W. 341] it is held that such a mortgage, as a matter of law, is void as to creditors, where the mortgage was withheld for the purpose of not impairing the mortgagor’s credit.

Cases cited from Michigan show that a mere withholding of the mortgage from record will work an estoppel against the mortgagee under the statute of that state as to chattel mortgages, although such withholding is done without any fraudulent intent.

In Adams v. Curtiss, 137 Ind., 175 [36 N. E. 1095] the court found the conveyance fraudulent in its inception, and that the withholding was one step in carrying out the fraud, and the conveyance was held fraudulent.

In Iowa the courts hold that the withholding must be with a fraudulent intent in order to give subsequent creditors preference over the mortgagee.

The courts of South Dakota hold the same as Michigan. ' In Williamette Casket Co. v. Cross Undertaking Co., 12 Wash., 190 [40 Pac. 729], the holding is in the same line as in the states of Michigan and South Dakota; and Arkansas holds also the same.

In Sanger v. Guenther, 73 Wis. 354 [41 N. W. 436], it is held that the withholding by agreement with the mortgagor makes it fraudulent as to intervening creditors, and cites Standart Paper Co. v. Guenther, 67 Wis., 101 [30 N. W. 298], as holding the same doctrine.

In Lehman, Durr & Co. v. Van Winkle, 92 Ala., 443 [8 So. C. 870], the holding is, that a mortgage purposely withheld from the record lest it might injure the mortgagor’s business and credit is fraudulent as to intervening creditors and to any one who gives up a security prior to the mortgage.

Ackerman v. Ackerman, 50 Neb., 54 [69 N. W. 388], is one where the mortgage was held by agreement, with fraudulent purpose, of both parties to the mortgage, and it was held in that case that it was fraudulent as against creditors.

In Roe v. Meding, 53 N. J. Eq., 350 [30 Atl. 587; 33 Atl. 394], the court of that state construes the chattel mortgage act to make a mortgage, not left for record, inferior to all creditors whether before or after the mortgage and whether they be judgment creditors or not.

We do not find that any of these courts intended to make a holding on the doctrine of estoppel entirely independent of a construction of the statute of chattel mortgages in the state; although, in some of them, the statute is not mentioned by the court in connection with what it says on the ground of estoppel, yet the court, we believe, intends to say in all of them, that the chattel mortgage act is such that if the mortgagee withholds the mortgage either by agreement or by neglect to record it for any other reason, the statute can not protect the instrument, and the doctrine of estoppel will arise. But the courts of Ohio have not so construed our statute; and I need not cite the decisions in this state, as they are referred to in Judge Day’s opinion in Shirley, In re, supra.

These mortgages were upon goods, among other things, where the mortgagee was left in possession and left free to transact business with the goods the same as though the mortgages were not given. Hence, under the authority in this state, Francisco v. Ryan, 54 Ohio St. 307 [43 N. E. 1045; 56 Am. St. 711], as tó that class of goods, the mortgage would have been of no effect even if filed against creditors who obtained liens upon the property, and the property mortgaged being largely of this nature, there was nothing to be gained in filing the mortgages. They would have accomplished but one purpose and that would be to make all creditors proceed at once to collect their claims from the company.

It is held in the last case cited, that a mortgage of this nature constitutes a valid contract for a lien on such after acquired property, and possesion thereof lawfully taken by the mortgagee has the same efect of protecting it in his hands from the claim of the mortgagor’s creditors as has possession taken of the property owned by the mortgagor at the time of the execution of the mortgage.

It is the holding of the court that the mortgages in question are prior in right as to the property acquired by them to that of the creditors, whether their claims arose prior to the mortgage or after the same was given. A decree may be drawn accordingly.

Hale and Marvin, JJ., concur.


text:
    CONTRACTS — INSURANCE
    [Cuyahoga (8th) Circuit Court,
    February 16, 1903.]
    Hale, Marvin and Winch, JJ.

      C. H. Prescott, Jr., et al v. Harry Koblitz.
    1. Inspection Bureau Rate of insurance not Admissible to Prove Average Rate in Force on Certain Class of Property.
    In an action by an insurance agent for damages resulting from the breach of a contract, in which it had been agreed that the agent should furnish the other party to' the contract insurance at a rate not exceeding the average rate paid by other lumber firms of the same city for a like hazardous risk, evidence by the officers of an inspection bureau as to the rate which they placed upon the property upon which the plaintiff had tendered insurance, is not competent to prove that the tendered insurance was at the rate specified in the contract, even though the rates fixed by the bureau were sold to, and used by, a large percentage of the insurance agencies of the community.
    2. Damages for Breach of Executory Contract is Present Value of the Contract.
    When a contract between an insurance agent and a property owner provided that the property owner should take all his insurance from the agent and withhold 20 per cent, of the premiums as they became due and apply them as payment upon a certain piece of property which was to be conveyed to the agent at an agreed price, a breach having occurred at the inception of the contract through the refusal of the property owner to take any insurance, the measure of damages is not the value of the property to be conveyed, but the value of the contract to the agent at the date of the breach, in estimating which the jury should consider the probability of the defendants going out of business, and what would have been necessary on the part of plaintiff had he performed his contract.

      Hessenonueller & Bemis, for plaintiffs in error.

      Ford, Snyder, Henry & McGraw, for defendant in error.

       Affirmed no opinion, Koblitz v. Prescott, 71 Ohio St. 546.

   MARVIN, J.

The defendant in error brought a suit against the plaintiff in error, to-wit, C. H. Prescott, G. A. Prescott and C. H. Prescott, Jr., partners doing business under the firm name of the Saginaw Bay Co., and recovered a judgment, to reverse which the present proceeding is brought. The suit grew out of the following state of facts:

On September 19, 1899, a contract in writing was entered between the Saginaw Bay Co. as party of the first part and Harry Koblitz as party of tbe second part, which contract reads as follows:

“This agreement made September 19, 1899, by and between the Saginaw Bay Co., party of the first part; and Harry Koblitz, party of the second part. Witnesseth:
‘' That whereas the party of the first part is now engaged in the lumber business in the city of Cleveland, and desirous of placing the fire insurance upon their lumber yards, etc., with the said party of the second part: therefore the conditions and considerations under which the said insurance is to be placed with the party of the second part are as follows:
‘ ‘ First. That the insurance shall be placed with first class and reliable insurance companies.
“Second. That the rate of insurance shall not exceed the average rate paid by other lumber firms in the city of Cleveland for a like hazardous risk.
‘ ‘ Third. That the party of the first part agrees to place all of their insurance with the party of the second part until the terms of this contract are fulfilled; the party of the first part agrees to sell to the party of the second part a certain piece of land situated in Bay City Mich., at the corner of Fifth and Johnson streets the same having a frontage of about 133 feet on Fifth and a depth of about 100 feet on Johnson street, the deed and abstract for this property showing the same to be free from all encumbrance to be furnished at the time payment has been made as here specified.. The party of the second part agrees to allow 25 per cent, on all premiums as they fall due to remain with the party of the first part as payment on the above described property. Also the party of the second part agrees to allow 20 per cent, on all premiums to remain with the party of the first part on all premiums due for insurance if placed for C. H. Prescott & Sons, Tawas City, Mich. It is also a part of this agreement that the party of the second part shall pay to the party of the first part interest at the rate of 6 per cent, on all deferred payments, said interest commencing November 1st, ’99. It is also understood that on and after November 1st, ’99, the party of the second part shall collect all rents due on the above described property and shall pay the taxes as they mature, except the payment due in January, 1900, which shall be paid by the party of the first part. Also it is mutually understood that the party of the first part will accept payment for the property at any time the party of the second part may have an opportunity to dispose of same and the terms of. this agreement will still continue until contract is fulfilled. The purchase price agreed upon for the above described property is $3,000 which shall be paid in the manner above described until $1,500 has been paid on the principal, leaving a balance of $1,500 still to be paid. After that time this contract shall be in force providing the said second party is able to place the insurance at equally as good rates for the party of the first part as other reliable agencies can place same, and in case second party is not willing so to do, the balance due on said property amounting to $1,500 shall be paid for in cash and this agreement shall be closed, although it is expected and desired that this arrangement may be so mutually satisfactory that the business relations may continue until full payment is made. It is also agreed that the party of the second part shall do his utmost to secure a blanket rate on all of the property at the separate yards of the Saginaw Bay Co., and shall also aim to secure the best rates possible. at all times, and that there may be no misunderstanding in regard to the rates to be paid, it is expressly agreed by the party of the second part that at no time shall the party of the first part pay a higher average rate than is paid by other lumber firms in the city of Cleveland for a like hazardous risk.
(Seal.) “Saginaw Bay Co.,
“Per C. H. Prescott, Jr.
(Seal.) “Harry Koblitz.
“Witness:
“Katherine C. Keeley.”

The petition avers that Koblitz has performed all the conditions of said contract on his part to be performed, and, as the policies of the defendants have from time to time expired, plaintiff has offered to place the insurance in accordance with the terms of said contract, but that defendants have refused and still refuse to place insurance with the plaintiff or place plaintiff in possession of the real estate aforesaid, and have wholly and utterly failed to carry out said contract or any part thereof, whereby he has been damaged in the sum of $3,000, and he prays for judgment for said sum, with interest from September 19, 1899.

For answer to the petition the defendants admit that they are a partnership doing business under the name of the Saginaw Bay Co., and that they entered into the contract with said Koblitz hereinbefore set out, and they deny every other allegation in the petition.

A bill of exceptions is filed in this court setting out all the evidence introduced in the court below, together with the charge of the court as given to the jury.

From this it appears that no insurance under this contract was ever placed upon the property of the Saginaw Bay Co., nor was the real estate described in the contract ever conveyed, or the possession thereof delivered to the said Koblitz.

The claim on the part of the plaintiff below is that he was ready and able on his part to place such insurance, but that the defendant refused to accept it, whereas the claim on the part of the plaintiff in error is that Koblitz never offered to place any insurance for them at the rate named in the contract, and that the real reason why insurance from him was not accepted by them was that the rate charged by him was in excess of (to quote from the language of the contract) “the average rate paid by other lumber firms in the city of Cleveland for a like hazardous risk. ’ ’

The evidence shows that the first insurance which was needed by the plaintiff in error after the date of said contract was on September 27, 1899, being eight days after the date of the contract. On this date insurance to the amount of $43,000 on the lumber-yards of the plaintiff in error was to expire, and they notified Koblitz of that fact. He, together with his partner, Mr. Thomas, made an examination of the property to be insured, and it is claimed on the part of the plaintiff in error that Koblitz then fixed a rate which he said was the lowest rate at which he could place the insurance, and that such rate was, on the most hazardous risk, $1.60 per hundred, and on the least hazardous, $1.50.

An important question in the ease, therefore, it will be seen, was “the average rate paid by other lumber firms in the city of Cleveland for a like hazardous risk.” As bearing upon -this question, the plaintiff below placed upon the stand several witnesses to show what rate had been fixed upon such risks by an organization called the “Ohio Inspection Bureau.” Among the witnesses placed upon the stand for this purpose was one Charles H. Patten, the superintendent of said “Ohio Inspection Bureau.” This witness, in answer to the question, “What is the business of that company?” answered, “Well, it is an independent rating concern that operates similar to Dlun’s or Bradstreet’s. We inspect all classes of insurable property in Cleveland and sell our rates to the agents.” From this and other evidence it appears that this Ohio Inspection Bureau employed experts to examine property, with a view to fixing rates at what they think property should be insured, and for a compensation they furnish these rates to insurance agents in the city of Cleveland. The evidence shows that this organization furnished their estimate of rates to a large per cent. — indeed to nearly all of the insurance agents in the city of Cleveland. These rates so fixed by the inspection bureau were given out on cards furnished to the several agents, and the witness, Patten, speaking of the rates fixed by this bureau in force at the time of the execution of the contract between the parties to this action, was asked by counsel for the plaintiff below this question: “Now, on the stock of lumber, shingles, posts, timber, piling sticks and foundations for lumber piles, its own or held in trust or in commission or sold, but not delivered, all while contained in its yard and sheds, bounded by Stone’s levee, Toronto, Ohio, and Chicago streets, Cleveland, Ohio. It is understood that this item covers like property while piled temporarily on said levee and streets. Other concurrent insurance permitted,” being the third item in this plaintiff’s Exhibit B, “what rate, if any, for the fall, particularly September, 1899, as fixed by you, was then in effect.” This was objected to, overruled, and the proper exception taken. The answer was, “The rate was $1.60.” Then, this question: “Now, on the other items of property owned by the Saginaw Bay Co. in this city, what, if any, rate did you fix at that same time?” and over the objection and exception of the defendant below, the witness answered, “Well, there was a rate of $1.50 in effect prior to that.” Then, the question: “What was the rate in effect in September and October and November, 1899 ? ’ ’ and over the objection and exception of the defendant below the witness answered, “$1.50.”

Other questions of similar import were put to these and to other witnesses, for the purpose of ascertaining what rate of insurance was placed by this inspection bureau upon the property of the Saginaw Bay Co. and other similarly hazardous risks, which was in effect in the fall of 1899. The ruling of the court in admitting this class of testimony was erroneous, and the testimony was calculated to prejudice the rights of the plaintiff in error. The contract required that the defendant in error should furnish the insurance at a rate not exceeding the average rate paid by other lumber firms in the city of Cleveland for a like hazardous risk. Surely, this could not be determined by ascertaining what this bureau, or any expert acting for this bureau, should say would be a proper rate for such insurance.

It, of course, became necessary for the court to charge the jury as to what would be the measure of damages in the event that there should be a recovery for the plaintiff below, and on that subject the court said to the jury:

“The measure of damages, if you find for the plaintiff under the instructions of the court, is the value of the house and lot plus the rentals after the payment of taxes, after deducting from said rental that part of the purchase price which plaintiff’s commission did not cover, and interest on the unpaid portion of the purchase price of the house and lot. The time for which such rental, taxes and interest should be taken into account is the period which the parties contemplated for the performance of the contract.”

It should be said, before discussing this proposition, that the evidence shows that the commissions which the plaintiff below would receive from the insurance companies upon the premiums paid for the insurance to be furnished, was 20 per cent., so that the amount which was to be kept out of the premium toward payment upon the real estate named in the contract was in excess of the commissions which Koblitz would receive from the insurance companies for his services to the extent of 5 per cent, of such commissions. This would be true as to all insurance written upon property in the city of Cleveland, and the evidence showed nothing as to insurance at Tawas City, Michigan, the other place named in the contract. Attention is called to this because of the language of the charge quoted: ‘ ‘ deducting from said rental that part of the purchase price which plaintiff’s commission did not cover.” This charge as to the measure of damages was clearly erroneous and to the prejudice of the plaintiffs in error. If this rule were followed plaintiff would recover all that he could have recovered if everything to be done by him had been done and if the plaintiffs in error had neglected and refused to put him in posession of the real estate at the time specified in the contract and refused to convey it to him after it had been fully paid for. So that Koblitz would have received, without doing anything on his part except to tender, as he claims he did, on September 27, 1899, insurance to cover the $43,000 which ivas then about to expire; all that he would have received had he performed all the work which, under the terms of the contract, he was required to perform. It assumes that nothing remained for him to do; that he would not have been required to make any inspection of the risks from time to time as policies were to be issued; that he would not have been required to ascertain at what rate other like hazardous risks were being taken by other good companies; that he would not have been required to secure companies to take the risks from time to time as they should have been needed by the Saginaw Bay Co. — all of which he certainly would have been required to do had the contract been carried out on the part of both. It further assumes that he would always have been prepared to furnish insurance such as his contract required, at the rates required by his contract; that the business of the company would have continued for so long a time as that his commissions would have amounted to $3,000.

The jury were not permitted to estimate what the probabilities were as to contingencies which might arise to prevent Koblitz from performing his part, or to make it unnecessary for the Saginaw Bay Co. to have insurance. Surely, all of these things would have a bearing upon the damages which were sought by Koblitz, if he sought any by reason of the failure of the plaintiffs in error to perform their part of the contract. If by default of the plaintiffs in error Koblitz was prevented from carrying out his contract and receiving the benefits of it, and if he was ready on his part to perform, then the damages which he should recover would be what that contract was worth to him. It may be somewhat difficult to fix upon a practicable rule to determine such damages, but it seems certain that the rule fixed by the court in its charge was not the true rule.

The case of Rightmire v. Hirner, 188 Pa. St., 325 [41 Atl. 538] is, in many respects not unlike the case under consideration. Eightmire entered into a contract with Hirner and others to sell certain machines manufactured by Hirner and his associates at a given commission for a period of five years. At the end of the second year from the making of the contract Eightmire was dismissed from his employment and brought suit to recover damages for a breach of the contract. The trial court said to the jury upon the measure of damages:

“This contract had practically three years to run, and if they deprived him of that benefit they ought to pay what that contract was worth, and that is the profit which he would have gotten out of it. ’ ’

This instruction was held to be erroneous, and the court say that what should have been given to the jury as the measure of damages, is:

“If the plaintiff is entitled to any damages for breach of contract, the measure of the damage is the value of the contract at the time of breach, and in considering the value the jury must bear in mind that the defendants were not obliged to furnish any specified number of machines, or even continue their manufacture; the plaintiff’s right under his contract were subject to the contingencies of business, depression of trade, which might tend to reduce the sales, and in estimating the damages consequent upon the loss of the contract, the jury must take into consideration what the plaintiff probably could earn in some other employment or occupation during the period during which the contract ran.”

Applying the principle announced in this case, which seems to be the true principle, the measure of damages to which Koblitz was entitled, if he was entitled to damages, was the value of the contract to him at the time of the breach, and, in considering the value, the jury should bear in mind that the defendants were not obliged to furnish a specified amount of insurance in any year, nor was it obliged to continue in business for any fixed •length of time. The plaintiff’s rights under his contract were subject to the contingencies of business, the probability of his being able to furnish the insurance for the whole length of time which it would take to pay for the real estate under the terms of the contract, and what would be the value of Koblitz’s service and time in doing what he would have been required to do to carry out the contract for the whole time which it was to run.

To make out the case of the plaintiff below it was necessary for him to show that he was prepared to perform on his part and that the defendant below prevented such performance.

It is certain that after September 27, 1899, neither party did anything toward the carrying out of the contract. Just prior to that time interviews were held between them, and a letter was written by Koblitz to the company and an answer to that letter written to Koblitz. The parties are not at one as to what transpired at the interviews. Koblitz says that he fixed no rates at .which the insurance which was needed on September 27 would be furnished, though he says that it is true that his partner, in his presence, marked the rate of $1.60 opposite to one of the risks as it was written out on a slip of paper. The defendants below, C. H. Prescott, Jr., and Gr. A. Prescott, testify that both Mr. Koblitz and his partner, Mr. Thomas, stated that the best rates they could make for the insurance then wanted was $1.60 on one risk and $1.50 on the other. Mr. Koblitz in rebuttal denies this. Mr. Thomas was not called in rebuttal.

It is not denied but what both by letter and in the last interview between the parties to this suit, which took place in September, 1889, the plaintiffs in error declined to have anything further to do with Koblitz under the contract, and unless they were justified in so refusing they should respond to him in damages, but we think the evidence fails to show that he offered to furnish insurance at such rates as would not be above the average rates paid by other lumber dealers on like hazardous risks at the time. We find nothing to indicate that he ever suggested that for the time being he would furnish insurance at less than the rates fixed by this inspection bureau, and we think it clear that this was above the average rate paid on like risks which were considerably below the board rates, the only rates at which Koblitz seems to have offered to furnish any insurance.

Counsel for defendant in error urge, both in oral argument and in brief furnished, that the answers made by the jury to interrogatories propounded to them are such that if any error was committed by the court, either in the rulings upon evidence or the charge to the jury as to the measure of damages, such errors were in no wise prejudicial to the plaintiff in error. It is perhaps doubtful whether these interrogatories with their answers are properly before us. They do not appear in the transcript nor in the bill of exceptions, beyond the fact that the court said to the jury, at the close of the charge:

“The plaintiff has submitted certain interrogatories, which interrogatories you will answer as you find the facts to be from the evidence, and have each interrogatory signed by your foreman. ’ ’

Then follows one interrogatory only. And the court said to the jury:

“You will answer these questions from the evidence, and your foreman will sign the answer after each one in the space for that purpose, and you will also answer the other questions submitted. They are numbered from 2 to 14. Number 1 is stricken out. ’ ’

We find among the files a paper with the number and name of the case in typewriting upon the back of such paper, followed by the word ‘ ‘ Interrogatories, ’ ’ and then written with a pen are the words “Filed April 28, 1902.” There is nothing other than these words to indicate by whom they were filed or where they were filed; but treating them as properly before us, they do not relieve the errors which we find were committed from prejudice to the plaintiff in error. The first question which appears to have been answered by the jury reads: “Were not other lumber firms in this city then paying on like hazardous risks the same rates as those offered by plaintiff to defendants ? ’ ’ This is answered, “Yes.” The fact that some other lumber firms were paying on like hazardous risks the rates at which the plaintiff below offered to furnish insurance to the plaintiffs in error would not be sufficient to show that he was offering to furnish insurance at the rates provided in his contract. The next question which was answered, reads: “What other lumber firm or firms in this city besides the defendants paid a less rate of the premium for fire insurance in September, 1899, on a risk or risks of equal hazard with the defendants.” The answer is “No, none.” We think the evidence did not justify this answer. The next three questions are based upon the one just quoted. The next: “What was the value of the house and lot which defendants contracted to sell to plaintiff?” The answer is: “$3,-000.” The fact that this answer was justified by the evidence does not relieve the charge as to the measure of damages from prejudice to the plaintiffs in error, if the views expressed in this opinion as to the true measure of damages are correct. The next three are answered in accordance with the views of this court as to the evidence, but do not affect what has already been said as to the introduction of evidence on the measure of damages. The answers to the next three are not inconsistent with the position taken here by the plaintiffs in error.

The last question reads: “Did defendants’ failure to furnish plaintiff with the information mentioned in question No. 11 prevent plaintiff from tendering policies of insurance as required by his contract?” The answer is, “Yes.” If it is meant by this to say that this was the only thing which prevented the defendant in error from tendering the policies, it is not justified, we think, by the evidence.

For error upon the admission of evidence and in the charge of the court, and for the reason that the verdict is not sustained by the evidence, the judgment of the court of common pleas is reversed.

Hale and Winch, JJ., concur.