author: By Judge Henry—

text:
    SECONDARY LIABILITY OF SAVINGS AND LOAN COMPANY STOCKHOLDERS.
    [Circuit Court of Lorain County.]
    James W. Dickason v. The Grafton Savings Bank Co. et al.
    Decided, May 8, 1905.

      Corporations — Action to Enforce Secondary Liability — And to Collect Unpaid Stock Subscriptions — Pleading and Proof — Irregularities in Organization — Notice as to Election of Directors — Majority of Board — Knowledge of Creditors as to Payment of Subscriptions —Individual Liability — Estoppel—Sections 3797, 3798, 3247 and 3256.
    1. A subscriber for stock in a savings and loan company can not avoid liability on his subscription, in an action brought by creditors of the company to collect unpaid stock subscriptions and to enforce secondary liability of stockholders, by showing that the company commenced doing business before its entire capital stock was subscribed and one-half of each subscription paid in as provided in Revised Statutes of Ohio, Section 3797; nor can he avoid such liability by showing that the incorporators of the company neglected to give notice of the meeting of stockholders for the election of directors, as required by Revised Statutes of Ohio, Section 3798, and that he had no notice thereof, and that a bare majority of the directors elected at such irregular meeting ever qualified and acted as such.
    2. A subscriber for such stock by the act of subscribing is estopped from setting up such irregularities as defenses to an action brought by creditors of the corporation for the collection of unpaid subscriptions to its stock.
    Winch, J.; Marvin, J., concurs; Henry, J., dissents.
   July 17th, 1902, plaintiff filed his petition against the Grafton Savings Bank Co. and various individuals claimed to be stockholders thereof, for the purpose of enforcing the secondary liability of said stockholders.

He alleged the recovery of judgment against the corporation, execution thereon and return of the same unsatisfied and that said corporation was wholly insolvent and without property or assets to satisfy said judgment, and had for a long time ceased to do business.

On the 15th day of November, 1902, the Savings Deposit Bank Company of Elyria, having become party defendant to the case, filed its amended answer and cross-petition, in which it set up an indebtedness to it of the Grafton Savings Bank Company on a promissory note for $1,000 given by the latter company to it on March 10, 1902, and in addition to a request that the stockholders secondary liability be enforced, also prayed that the unpaid stock subscriptions of the defendant stockholders be collected, alleging the amount of their several subscriptions, and that none of them had been paid.

In this amended cross-petition is an allegation of the insolvency of the Grafton company and that it had closed its doors and ceased to do business; but no allegation was made of judgment against the corporation with execution returned unsatisfied; nor that a receiver had been appointed for it; nor any other judicial determination of its insolvency. As a matter of fact, as shown in evidence, a receiver had been duly appointed for the Grafton corporation on the 28th day of August, 1902, and he had qualified and taken possession of its assets.

October 19, 1903, said receiver on motion of the plaintiff was made party defendant to the case, and answered, setting up his appointment as such receiver. No objection has even been taken to this action on his part.

The defendant stockholders having answered, denying that the Grafton Savings Bank Co., was ever incorporated or existed as a corporation, denying any indebtedness on its part and denying that they had ever subscribed for stock or were the owners of any stock in said alleged corporation, the case was tried in the common pleas court, and from its judgment an appeal was taken to this court.

In this court, plaintiff admitting that the judgment alleged in the petition to have been recovered against the insolvent bank was void, for'lack of proper service, the defendant stockholders objected to the introduction of any evidence for lack of any averment of such judicial determination of the insolvency of the corporation as rendered the secondary liability of stockholders enforceable against them.

This precise question was determined by the Supreme Court in the case of Cobb v. Scofield, 66 O. S., 680, upon the authority of Younglove v. Lime Co., 49 O. S., 633, and Bronson v. Schneider, 49 O. S., 438, the Supreme Court holding such objection well taken.

Thereupon the defendant, the Savings Deposit Bank Company, asked leave to amend its second amended cross-petition by inserting an allegation as to the appointment of a receiver, and such amendment being objected to on the ground that the! receivership was a matter occurring subsequent to the filing of the petition, we overruled the objection, and permitted the amendment, following the ruling of this court in the recent retrial of the Cobb case above referred to, in which ruling we are sustained by the case of Gibbon v. Daugherty, 10 O. S., 365, and 1 Nash Pl. & Pr., 288, and cases there cited.

Whether we were right in permitting sueh amendment or not, we think the objection to the introduction of evidence was properly overruled, for the fact of the appointment of a receiver came upon the record and into the case without objection before it was tried in the common pleas court, by the appearance and answer of the receiver himself, and that,' too, within the time limited for the beginning of such actions as this.

Coming now t'o the merits of the case, we find that the Grafton Savings Bank Company had duly issued to the incorporators thereof authority to organize under the savings and loan association laws of the state for the purpose of carrying on the business of sueh associations. Grafton being a village of less than 2,500 inhabitants, under the provisions of Section 3797, Revised Statutes, this association was forbidden to commence business with a subscribed capital of less than $25,000, nor until one-half of each subscription therefor was fully paid up.

We find that the association had a subscribed capital of but one-half of $25,000, and that it never had one-half of each subscription fully paid up.

It commenced doing business on March 10, 1902, and the claims of plaintiff and defendant creditors are based upon actual business transactions with said corporation, but defendant stockholders claim that neither the corporation, nor they as stockholders, are bound by such transactions, because the corporation was by law expressly forbidden to do any business— not that the transactions would not be lawful and binding if all of its capital stock had been subscribed and one-half paid up.

With this contention we can not agree.

“When an action is brought to collect a subscription, either directly or indirectly, for the benefit of corporate creditors, it is well established that the subscribers can not defeat such action by the defense that the corporation was not an incorporation, by reason of its not having fully complied with the terms of the statute providing for such an incorporation. Not only is the subscriber estopped, by the act of subscribing, from setting up this defense, but he is bound also by the rule that the existence of a corporation can not be inquired into except by a direct proceeding in behalf of the state. It is sufficient that the corporation exists cle facto.” 1 Cook on Corporations, Section 184.

Four of the defendants, Fuller, Hale, Morgan and Mills, participated in the election of directors ; the directors, or a majority of them, elected Mills secretary and treasurer, and by resolution authorized and directed him “to do all things necessary to be done to carry on the business of this corporation.”

The fifth stockholder, Kerr, testifies he knew Mills was to run the business, but he never attended any meetings, either of stockholders or directors.

But it is contended that there was no legally elected board of directors, for Section 3798 provides that the incorporators of a savings' and loan association shall give at least three days notice, personally served upon each stockholder, or thirty days notice by publication, of the time and place of the meeting, for the election of directors. This was not done, it being in evidence that at least Kerr had no notice of such meeting, and did not waive such notice. We think, however, that this objection is not well taken.

“The fact that directors have been illegally elected can not bo set us as a defense to a suit for the payment of stock.” Green’s Brice on Ultra Vires, 150, note (b), and eases cited.

It is next contended that only three of the five directors ever qualified and assumed to act as such; that the business of the corporation must be transacted by the board, the whole board and nothing but the board, and as sustaining this contention we are referred to the case of Belting Co. v. Gibson, 68 O. S., 442.

But that case only holds that an officer of a corporation, in the absence of express authority from the board of directors, can not bind the corporation in a transaction beyond the apparent authority of his position.

On page 449 of the opinion Judge Davis says:

“The corporation may by its regulations so define the duties of its officers as to make them alter. ego within the assigned limits. ’ ’

In this ease we think the board attempted to confer this express authority by the resolution referred to, and we use the word board designedly, though only three out of five acted, for Section 3247, Revised Statutes says:

“A majority of the trustees or directors shall form a board.”

It also sufficiently appears that the three directors who acted took the oath of office, if that is material.

It is further contended as to the claim of the Savings Deposit Bank Co. that it is for a loan, and that Mills, who negotiated the loan, not only had no authority to represent this corporation, but it itself had no authority to borrow money.

We think such an institution as this has the power granted under the general corporation statutes, by Section 3256, to borrow money, and that Mills had express authority to negotiate the loan, by virtue of the resolution referred to, a copy of which he exhibited, to the Elyria bank.

It is said that the Elyria bank knew that the Grafton bank had not complied with the law and paid up half of its capital stock, because Mills told it about notes which Kerr and Puller had given for their stock subscriptions, but it does not appear that he knew said notes represented their entire stock subscription; he might reasonably have supposed that they had paid up one-half and that the notes were for the balance.

Upon the whole we are of opinion that the Grafton Savings Bank Company was a de facto corporation, and that the irregularities in its organization and method of doing business complained of are not such as either the defendant Fuller or the defendant Kerr, or any other defendant stockholder can set up as a defense to this action to collect such part of their subscription and secondary stock liability as may be necessary to pay the valid debts incurred in its behalf by its acting board of directors or Mills under authority of the resolution mentioned ; in other words, that said stockholders are estopped from setting up such defense; in the words of Ashbel Green’s American Edition of Brice on Ultra Vires, 2d Edition, page 784:

“When a transaction of the kind now in consideration is completed on the part of the other contracting party, every principle of common sense and equity requires that the corporation should not be permitted to repudiate payment therefor, or the other due completion thereof by itself, on the ground that the transaction, though admitted to be within -its possible capacities, is outside its actual powers then called into existence. The very defense discloses fraud; discloses what no court of equity has ever allowed a party to rely on, namely, his own laches or chicanery; discloses that the objector could have given, and can now give himself the capacity which he pretends to be without, and could have done that which, if done, would cut away the ground wherein his objection rests. It is submitted, therefore, that when such a transaction is completed on one side, -it is- then too late for the corporation to attempt to wriggle out of that stipulated for on its side. ’ ’

This is strong language; the word “chicanery” is applicable to Mills’s conduct alone, but the word “laches” fully characterizes the easy and indifferent manner in which Fuller and Kerr signed stock subscriptions, Fuller also signing minutes of meetings; minutes which he says he never read, and meetings which he says he never attended, and both trusted to the representations of their friends that Mills had a good business, and would run the bank all right. Does any one for a moment suppose that if the corporation had been a success, made money, declared large dividends, that either Fuller or Kerr would have denied that they were stockholders or denied that there was a corporation'? Should they be heard to make such denial when the shoe is on the other foot?

We think these observations answer the suggestion, supported by authority, that those who did not participate in the ele fació organization should not be held liable. We find that all participated by giving their subscription, and they had no right to consider the enterprise abandoned, as was held under the circumstances of the ease of Bartholomew v. Bentley, 1 O. S., 37.

It remains to consider two more Ohio cases with which the conclusion reached in this case is said to be inconsistent.

The case of Medill v. Collier, 16 O. S., 599, was an action by a depositor against the officers and stockholders of a bank to recover from them as individuals, on a certificate of deposit issued by the corporation, it appearing that said corporation had failed to make a deposit with the state required by law, as a prerequisite to such corporation doing business. It seems the depositor “had no information as to whether the defendants were doing business as a corporation, or as private bankers. He seems to have trusted them in the latter capacity” (page 612). The court held that persons who carry on a banking business, in the name of a corporation, in violation of law, are not protected by the corporate privileges from personal liability for debts contracted by them in the transaction of such business.

That doubtless is the law yet, and plaintiff, might have had it enforced against Mills, and his active associates, if he desired, but he , chose to pursue another remedy, and we do not find that the ease cited holds that he can not. Indeed, it expressly states that such proposition is not decided. On page 612, Judge Day says:

“Whether the law would afford any remedy in favor of the plaintiff against the’ corporation, upon a contract, express or implied, made on its part in violation .of law, may well be doubted, both upon principle and authority. * # * Clearly the plaintiff would, have no remedy against the corporation, unless he could bring to his aid the doctrine of estoppel, where the transaction is forbidden, as may be done where it is merely unauthorized.

“Although the court do not deem it necessary to decide this point, the following authorities tend to show that- the plaintiff is remediless against the corporation,” etc.

The case of Trust Co. v. Floyd, 47 O. S., 525, is like the Medill ease, and was an action brought by one who had sold wool to a certain “Wool Growers Exchange” to recover a balance due on account .of such sale from the directors of said exchange, a corporation, said directors having been elected and having undertaken to contract as directors before ten per cent, of the capital stock of the corporation had been subscribed. The defendants were held personally liable. The ease does not undertake to hold that the plaintiff could not have recovered in an action to assess the stockholders’ liability, though the defend; ants urged that such was the plaintiff’s only remedy. The substance of what the court said on this subject is found on page 542:

“If the doctrine of estoppel could be brought to the aid of the plaintiff against it, the defendants are not in a position to require a resort to that remedy to relieve them from the liability they have incurred.”

From an examination of the Ohio cases cited and relied upon by defendants, we conclude that while the creditors of the Grafton Bank in -this ease, might have brought their action against the individuals who actively assumed the exercise of corporate franchises without lawful authority so to do, yet the right to bring an action against the stockholders as such, to enforce their subscription and liability, relying upon the doctrine of estoppel, has never been denied in Ohio.

One ruling upon evidence remains to be mentioned; the objection to the admission in evidence of the letter from Kerr to Stevens, on the ground of its being a privileged communication, is sustained.

F. M. Stevens, for plaintiff.

Lester, Wood & Gage, Higley & Maurer, C. Chapman, D. J. Nye, J. C. mil, F. M. Stevens and Johnson & Leonard, for defendants.

Decree may be drawn for plaintiff and cross-petitioning creditors as prayed for, finding in favor of the Savings Deposit Bank, depositors who made deposits after March 10, 1902, if any, and other general creditors whose claims were not aban-, doned at the hearing. The claim based upon affidavit of O. B. Dnrkee is disallowed.

By Judge Henry—

I dissent from this judgment. Not a single step in the career of this corporation was legally taken after the filing of its articles of incorporation. Its first stockholders meetings for the election of directors was illegally convened, and both Kerr and Fuller, who are the only subscribers to the capital stock that are before the court, for the purpose of a decree against them, are said to- be estopped by their subscription to deny the validity of that meeting, though neither was present. So again, the business transacted and the general power given to Mills to contract the debts which are here in issue, at the first meeting of the directors was unauthorized to their knowledge, for the stockholders had not all paid one-half of their subscription, as required by law as a prerequisite to the beginning of business by corporations of this character.

But Kerr and Fuller are again said to be estopped by their subscription to deny the validity of this meeting.

The conclusion of the court seems to me to be possible only by piling estoppel upon estoppel in a manner that equity does not permit, for it is a well known maxim of equity jurisprudence that an estoppel upon an estoppel can not be sustained

I do not think a debt contracted by de facto directors of a de facto corporation, elected at a de facto meeting can be enforced in a proceeding of this kind.


source: Caselaw Access Project

license: Public Domain

text:
    COURT COSTS AND ADMINISTRATOR’S FEES.
    [Circuit Court of Lucas County.]
    Walter J. Sherman v. George W. Millard.
    Decided, 1904.

      Distribution — Duty of Appellate Court Under Section 6726 — Priority of Lien of Mortgagee — As Against Court Costs and Fees of Adi ministrator and Attorney — Administrator not a Necessary Party in Foreclosure Proceedings, 'When — Is a Trustee for the Unsecured Creditors Only.

    1. An appellate court, in reversing an order of distribution made by the probate court in an action by an administrator to sell property to pay debts, should under Section 6726 either make 'the order of distribution, or in remanding the case to the probate court specifically indicate the items to which the fund for distribution should be applied.
    2. Neither the fees of an attorney of an administrator in an action brought by him to sell real estate to pay debts, nor the general1 costs of administration, nor premiums due a surety company upon the administrator’s bond are included in the costs and expenses “of the sale” under Section 6165, and can not therefore in the order of distribution of the fund realized from the sale be allowed prior to the claim of the first mortgagee; nor can it be allowed as extraordinary expenses under Section 6188.
    3. Where the lien of a first mortgagee is set up in an action commenced by the administrator to- pay debts, it must be preserved in the fund realized from the sale of the mortgaged property; but should the mortgagee fail to set up his claim his lien is thereby cut off, and he becomes a general creditor, and the administrator owes him no duty beyond that of a general creditor.
    4. An administrator in commencing an action to sell to pay debts real estate which .is incumbered by mortgage, assumes the risk of the fund realized therefrom being insufficient to pay his own fees and those of his attorney and the court costs incident to the general administration; such fees and costs can not be paid from the fund to the prejudice of the mortgagee.
    5. The administrator of a deceased mortgagor is not a necessary party to a proceeding for foreclosure of the mortgage, although he may be a proper party where the equity of redemption is of any value; and inasmuch as a purchaser at foreclosure sale is subrogated to all the rights of the mortgagee, his title can not, in the absence of fraud or collusion, be impeached by the general- creditors or by tbe administrator where the value of the property proves less than the mortgage debt.
    Parker, J.; Hull, J., and Haynes, J., concur.
    Error to Lucas Common Pleas Court.
   In 1899, Oscar Decker being the owner of two acres of land, mortgaged it to secure a promissory- note of $500.

In January, 1902, Decker having died, George W. Millard was appointed administrator of his estate, and the land mortgaged was appraised at $700.

In April, 1902, the administrator filed his petition in the probate court for the sale of the two acres of land to pay debts.

Sherman, the holder of the note and mortgage, having been made a party defendant, filed his cross-petition asking that the mortgage be foreclosed and his rights -protected.

In October, 1902, a decree was rendered finding due to Sherman on the mortgage $500 and interest, to the- decedent’s widow $--in lieu of dower and $300 for year’s support, and ordering sale of the two acres of land.

In May, 1903, the land was sold in pursuance of the decree at public sale for $600 and the proceeds of sale ordered to be distributed as follows:

1, Court costs in sale of property, $35.09; 2, court costs in administration of estate, $15.40; 3, administrator’s percentage of proceeds of sale, $36.00; 4, attorney’s fees and surety -company’s bond of administrator, $60.00; to- Sherman on mortgage, $431.51.

To this order of distribution the' defendant, Sherman, excepted and, to obtain its reversal or modification, filed his petition in error in the common -pleas court.

That court reversed the judgment of the probate court and remanded the case to that -court with directions to distribute the proceeds “according to law” and “in accordance with Section 6165, Revised Statutes,” but did not indicate specifically what judgment the probate court should render.

Sherman now prosecutes error in this court, claiming that the common pleas court should have rendered the- judgment which the probate court should have rendered and that this court should now do so; and that the proper order would be to omit the second and fourth items and pay on the mortgage $528.91 instead of $431.51.

Section 6726 reads in part as follows:

“When a judgment or final order is reversed, either in whole or in part, in the common pleas court, * * * the court reversing the same shall proceed to render such judgment as the court below should have rendered, or remanded the cause to the court below for such judgment.”

In Minnear v. Holloway, 56 Ohio St., 148, the court says, on page 154, speaking of orders and judgments made on hearings, on affidavits or evidence, for injunctions, or for the vacation of an' injunction, or the dissolution of an attachment, or motions for the appointment or discharge of receivers, or motions for the vacation of an order of arrest in a civil action and other like motions and proceedings in which no issues of fact are made up by the pleadings, and there is no trial in the legal sense of that' term:

“In such cases the higher court, upon reversal of the' order ■made on the hearing in the court below, proceeds to make such order as it thinks the court belov. should have made, or remands the case to the court below with instructions to make such order.”

See also Davis v. Turner, 69 Ohio St., 101, decided October 27, 1903.

In the case at bar the order reversed was an order distributing the proceeds of the sale, and the appellate court should either have made an order of distribution, or should have indicated to which items the funds to be distributed should be applied.

As Section 6165 prescribes how the proceeds of real estate so sold shall be distributed, the order of the common pleas court that they shall be so distributed is correct as far as it goes; but it is too general. Presumably the probate court had endeavored to follow this section in its order, which was reversed, but had fallen into error in its attempt; therefore, the order of the common pleas court should have been specific so that a like error might not occur again, and so that nothing would remain to be done in the court below but to execute such specific order of distribution.

This section provides that “the money arising from the sale of real estate shall be applied in the following order:

“1. To discharge the costs and expenses of the sale and the .p-ercentum and charges of the executor or administrator thereon, for his administration of the same.

“2. To the payment of mortgages and judgments. * * *

“3. To the discharge of claims and debts, in the order mentioned in this title. ’ ’

That order is found in Section 6090.

Under -Section 6165, the mortgagee claims that the costs and expenses and charges of the administrator are confined to those arising out of the sale, and do not include those which arise in the general administration of the estate.

As to the attorney fees, in the case of Thomas v. Moore, 52 Ohio St., 200, it is held that administrators are personally liable for services of attorneys employed by them. On -page 206 the court holds that attorney fees are governed by Section 6090, referred to above. Such contracts do not bind the estate. Money paid therefor by the administrator, if approved by the court, may be allowed in- the accounts of the administrator, -but there is no authority for allowing them in an order of distribution on a sale of real estate as prior to the claim of a first mortgagee.

It would be grossly unjust to compel the mortgagee to pay attorney fees of the administrator for foreclosing his mortgage; the mortgagee must pay his own attorney for setting up his claim in this proceeding; the administrator in no way represents the mortgagee as such.

It is said in the case of Stone v. Strong, 42 Ohio St., 53, on page 55, that:

“The administrator is the trustee * * * for the unsecured creditors. ’ ’

But he is1 not the trustee for the secured creditors except as they are also general creditors. If the mortgagee in this ease had failed to file an answer in the land sale proceedings-, his lien would have been cut off by the decree of. the court, and it would not have been the duty of the administrator to see that his lien was preserved.

That the cost and charges and expenses “of the sale” did not include the general costs of administration we think is evident from the fact that the administrator could have brought his action for the sale of the decedent’s land either in the court of common pleas or the probate court (see Section 6137). Suppose he had brought his proceeding in the court of common pleas, surely the costs of the sale would have been confined to those incurred in the court of common pleas, and would have included no costs in the probate court.

The case of Andrews v. Johns, 59 Ohio St., 65, involved the fees of an assignee for the benefit of creditors, but it is evident from the opinion of the court that it regards a sale by an assignee for the benefit of creditors as bearing a very close resemblance to a sale by an administrator to pay the debts of the decedent. On page 79 the court speaks of costs in this way:

“The court having found that the land was bid off by the owner of the first lien for a sum less than his debt, taxes and costs, an order that the purchaser pay such taxes as were due, and such costs as might properly be required of him under the statute, which would be such costs, and such only, as were made necessary by the foreclosure, and upon such payment a deed be made by the assignee, would have met the situation as it existed and worked out the proper legal result.”

Here the costs are spoken of as those which would be made necessary by the foreclosure, not such costs as would be made necessary by the general administration of the estate, whether by an assignee or an administrator.

Of course in some cases (and apparently it is so in the case at bar), this works a hardship on the administrator and also on the judge of the court asi to his fees, but in this same case of Andrews v. Johns, 59 Ohio St., 65, 77, the court says:

“Upon the proposition that by the construction of the sections affecting assignments here made, an injustice results to the assignee in that he is denied compensation for labor which he is required to perform, it would seem sufficient to say, as suggested by counsel, that the hardship is not greater than in the case of a second mortgagee who forecloses his mortgage only to see the first mortgagee take all the proceeds, leaving his expenses to be borne without any result; or the case of an administrator, as in Stone v. Strong, where the first mortgagee is the purchaser. Besides, the assignee is not compelled to perform the services. He accepts the trust voluntarily and with whatever risk may attend its performance. If he finds it burdensome, or unrenumerative, he may at any time resign. ’ ’

We also call attention to the case of Stone v. Strong, 42 Ohio St., 53, especially to the language found on page 56, as follows:

“We must not be understood as holding that such a proceeding can be prosecuted by the personal representative, 'for the mere purpose of earning commissions, when the probability is that the land will not pay the liens.”

In the case at bar it appears that the real estate was the only property of the decedent. It was appraised at $700. The equity of redemption in this real estate constituted the only asset of the estate for administration. The claim of the mortgagee was $500 and interest at 7 per cent, from March 10, 1902. Here we have then a prior lien of $500, exclusive of interest, due the mortgagee and exclusive of court costs and administrator’s fees incident to the sale. Under these circumstances this administrator, “the personal representative,” in thus bringing this property to sale took the risk of its bringing a price that would leave a fund from which might be paid his attorney’s fees and the fees of himself and the court incident to general administration of the estate. Such expenses can not be paid from the proceeds to the prejudice of the mortgagee. On page 57 of Stone v. Strong, supra, we find another comparison between a land sale by an administrator and a foreclosure by a mortgagee, the court saying:

“The same result would follow if the mortgagee had been foreclosing his own mortgage; the costs and expenses of making the sale must first be paid, including poundage, if he is not the purchaser, although the residue is insufficient to pay his lien. ’ ’

In the foreclosure case the mortgagee is not entitled to his attorney’s fees, and it seems by analogy that in the land sale proceeding the administrator should not be allowed his attorney’s fees, as part of the costs, prior to the claim of the mortgagee.

B. A. Hayes, for plaintiff in error.

I. I. Millard, for defendant in error.

Section 6188 authorizes compensation for “extraordinary” services, but there were none such in this case. There were no conteste between lienholders, nor any contest of any kind. The case was as simple and ordinary as a proceeding to sell real estate to pay debts could be.

It has been suggested in argument that to make perfect title to his real estate in the purchaser thereof under the mortgage, it is necessary to have the administrator in court as a party to the end that it may be divested of the lien of other debts of the deceased.

It is our understanding that in .an action to foreclose the mortgage the administrator would not have been a necessary party (though if the equity of redemption had any value he might have been a proper party), and that the purchaser is subrogated to the rights of the mortgagee, and that where the value of the property proves to be less than the amount due on the mortgage, and there is no fraud or collusion in the proceeding and sale, such title is unassailable by general creditors of the decedent, or the representatives of his estate. Here the administrator did not owe any duty to the general creditors, to the mortgagee, to the purchaser, or to anyone else, justifying him in bringing this property tcsale and adding to the costs and expenses of the sale other costs and expense not incident thereto. (See McMahan v. Davis, 19 C. C., 242).

We hold that under the circumstances here appearing the item of $15.40, court costs for administration, and $60, attorney’s fees and surety company’s bond of administrator, do not come within the purview of Section 6165, Revised Statutes, as “costs and expenses of the sale.” And that they can not be paid from the proceeds of the sale to the prejudice of the mortgagee.

Therefore the judgment of the court of common pleas will be modified accordingly.


text:
    CONTRACTS FOR SCHOOL BUILDINGS.
    [Circuit Court of Hamilton County.]
    The State of Ohio, ex rel Mathis Brothers Company, v. The Board of Education of the City of Cincinnati, Ohio.
    Decided, April 8, 1905.

      Bids and Bidding — Illegal Award of Contract by Board of Education — Specifications — Advertisement — Mandamus — Injunction — Section 3988.
    1. Where bids for public work received in response to advertisement are ignored, and a contract is awarded upon a bid based upon conditions not contained in tba original specifications and received subsequent to the time designated in the advert'i'Sementi, the award is wholly unauthorized and illegal, and upon application to a court of competent jurisdiction may be enjoined.
    2. Mandamus will not lie in such a case to compel the award of the contract to the lowest responsible bidder.
    Gippen, J.; Jelke, J., and Swing, J., concur.
   The relator avers in its petition that the Board of Education of the City of Cincinnati determined to erect a school building in Clifton, and caused it to be duly advertised that sealed proposals would be received at the office of said board until twelve o’clock noon, January 23d, 1905, for material and labor necessary for the completion of said school building: That upon said day it filed with the clerk a bid for the installation of a heating and ventilating plant in said building for the sum of twenty-four thousand two hundred dollars ($24,200). That the specifications required bidders upon heating and ventilating to submit with their bids a proposition for smoke consuming device, automatic stokers, down draft furnaces, etc., to be considered. That accordingly, the relator specified in its bid for the furnishing of Detroit or Murphy Automatic Stokers or Hawley Down-draft Furnaces, for fifteen hundred dollars ($1,500) to be added to said bid of twenty-four thousand two hundred dollars ($24,200), making its entire bid, with either of the above smoke consuming devices, twenty-five thousand seven hundred dollars ($25,700). That said bid was in all other respects as required by law, and was the lowest responsible bid.

The relator further alleges that among other bids submitted in response to said advertisements was that of one Henry Niemes, which contained the following provision: “ If the Hawley furnaces are installed in connection with the above work, I will furnish and1 install the same for the additional sum of $1,359;” but contained no provision to furnish Detroit Automatic Stokers. That on January 27th, 1905, at a meeting of the building committee of said board, on advice of the mechanical engineer of said board, it determined upon the use of the Detroit Automatic Stoker; that the committee wrongfully ignored and -refused to consider relator’s bid for the heating and ventilating system to be used including the furnishing of said Detroit Automatic Stokers, and requested said Henry Niemes to furnish a new bid based on the substitution of Detroit Automatic Stoker in place of the Hawley Down-draft or ordinary grates, as contemplated in his original bid. Said request was without notice to relator or the other parties who had submitted bids, -and was without advertisement as provided by law. That thereupon said Henry Niemes submitted a new bid to include the Detroit Automatic Stoker for the sum of $24,462; that thereupon the committee agreed to recommend to the board the letting of the contract for heating and ventilating to Henry Niemes upon his new bid- of $24,462.

The relator claims to have been wrongfully refused said contract and asks that the board of education be compelled by a writ of mandamus to accept its said bid. To this petition the board of education files a general demurrer.

It appears from the petition that the building committee wrongfully ignored and refused to consider relator’s bid, and inferentially it ignored and refused to consider each and every other bid received by it on or before January 23d, 1905, but proceeded to award the contract upon a bid based upon conditions not contained in the original specifications and received at a time subsequent to that designated in the advertisement. It is clear that the attempt to award the contract in this manner is wholly unauthorized, illegal and void, which upon proper application to a court of competent jurisdiction should be enjoined.

J. H. Cabell, for relator.

Chas. J. Hunt, City Solicitor, contra.

It is claimed, however, by the relator, that the board of education having exercised its discretion to award the contract, may now be compelled to award the contract to the relator as the lowest responsible bidder. The board has not considered any of the bids received on or before January 23d, 1905, and it is still open to the board to award the contract to the lowest responsible bidder, unless it be deemed to have rejected all the bids invited and received in pursuance of the advertisement by awarding a contract upon an independent bid received January 27th, 1905.

It is perhaps unnecessary now to decide whether the action of the board amounted to a rejection of all the bids, because in either event the relator would not be entitled to a peremptory writ of mandamus. Counsel rely upon the case of Boren and Guckes v. Commissioners of Darke County, 21 O. S., 311, but in that case the commissioners attempted to award the contract upon one of the original bids received in pursuance of the advertisement but not to the lowest bidder, and the court, therefore, held that the commissioners could be compelled to award the contract to the lowest bidder. Subdivision VI, of Section 3988, Revised Statutes, 97 Ohio Laws, 357, provides:

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

Clearly the discretion to reject all the bids refers to such bids as are received in pursuance of the advertisement and can not relate to an independent and wholly unauthorized bid received after the date fixed in the advertisement.

The relator has shown no right to a writ of mandamus and demurrer to the petition will be sustained.


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    REQUIREMENTS AS TO CATTLE GUARDS.
    [Circuit Court of Pike County.]
    The Norfolk & Western Ry. Co. v. C. A. Vallery.
    Decided, May, 1905.

      Negligence — ■Railways—Requirements as to Cattle Guards — Exception to the Statute — As Incorporated Therein hy the Supreme Court.

    In order to complete the exception written by the Supreme Court into the statute providing that cattle guards shall be built at all “crossings, road crossings, street crossings, and other crossings without any exception whatever,” it is necessary that there be present the three elements, necessity of .the public, necessity of the railroad company, and- necessity of its employes that such guards be omitted.
    Walters, J.; Citerrington, J., and Jones, J., concur.
   The defendant in error by his petition against the defendant below, the Norfolk & Western Ry. Co., alleges that the railway company was a corporation operating its road through the village of Piketon, Pike county, and that the railway company did not have erected either fences or cattle-guards north of its depot at Piketon, nor south thereof, and that the plaintiff in March, 1904, was the owner of two horses that strayed from his premises, and by reason of the defective fences and cattle-guards upon the railroad, his horses strayed thereon and proceeded down the track of the N. & W. Ry. to a point south of the depot, where they were run down and killed.

The defendant admits it is a corporation and operating a railroad and denies every other allegation, and further says that said horses entered upon the right of way at a public station yard, which was necessarily uninclosed in order that the public, as well as the railroad, could get to and from the station building in loading and unloading cars, and in using its sidetracks and yards, and that said horses were killed within the limits of said yards and depot grounds.

A trial was had in the court of common pleas before a jury and a verdict returned for the plaintiff therein.

There is but one error relied upon by the plaintiff in error, upon which it seeks to reverse the judgment of the lower court, and that is the alleged error appearing upon the record in the form of a charge requested by the defendant below to be given to the jury before argument.

The statute of the state, Section 3324 of the Revised Statutes, requires the railroad to fence, also requires them to build a cattle-guard at all crossings, road crossings, street crossings and other crossings without any exception whatever, and hence includes all streets, lanes and alleys in the village. The Supreme Court, however, in the case of Railroad Co. v. Newbrander, 40 Ohio St., page 15, wrote into this statute an exception, occurring from the necessities of the railroad and the public and its employes.

In the first subdivision of the syllabus the Supreme Court makes use of this language:

“This statute may be construed as allowing exceptions required by public necessity and convenience, and the proper-use of a station yard by the company.”

The second subdivision of the syllabus is as follows:

“When the company is relieved from this requirement, for the reason above, it is its duty to construct and maintain cattle-guards across its right of way and grounds at the first points from the highway, which will not interfere with the necessities and convenience of the public and the company.”

By the instructions asked on behalf of the defendant company below, such instructions as requested would require the jury to bring a verdict for the defendant, if the jury found from the evidence that either one of three things existed: Necessity of the public, necessity of the employes of the railroad company, or necessity' of the company.

In the case already alluded to, if the railroad company was relieved from performing this duty only on this requirement^ and the company required that the depot grounds and yards remain open and unobstructed, the matter that counsel for the defendant raised, that if the defendant’s testimony showed that from the necessity of the railroad employes that this road should be kept open, and that no cattle-guards should be used where it is alleged these horses passed over, that that was sufficient, and that it was not necessary for the jury to find that it was a necessity to the public or to the company.

If counsel for the plaintiff in error is correct in their contention, there is error in this record, otherwise there is not.

The facts disclosed by the record are, that the horses escaped .from his farm some three miles from the railroad without any negligence on his part, and that they took the railroad at the crossing on the public road known as the Jackson Hill crossing. And some of the testimony tends to show that these horses, after passing over the Jackson Hill crossing, passed down the railroad, as was evidenced by the witnesses’ testimony; that, they tracked the horses down the railroad to the place where they were injured below the depot and killed. There is other testimony tending to show that the horses passed over the Jackson Hill crossing and into the village of Piketon, coming onto th.e railroad at another point.

The question therefore to decide is, under the facts in the ease, whether or not it is necessary for the railroad, in order to relieve itself of liability upon its switch and depot grounds, that these three elements be shown as have been present in an instruction to the jury.

In Thornton on “Railroad Fences and Private Crossings,” page 158, the author quotes from an Iowa Supreme Court case, in which the court says:

“The theory of exemption from the statute requiring fences has always been founded upon the relation of the company to the public, and not to any other construction.”

Again the Supreme Court of Indiana has been quoted on page 161:

“These exceptions have been made, not to advance the private interests of the railroad corporations, but to promote the public good by enabling the corporation to discharge their duty to the public. These exceptions exist only in cases where public necessity is shown.”

There is quoted another citation, and' the author comes to the conclusion himself that the exceptions given from the decisions are constructions alluded to, and hence, made on behalf of the public. But as I have already quoted from our Supreme Court, the three elements are necessary to complete the exception, and hence there seems to be a mutuality of interests required on behalf of the public and railroad company.

But then it is not alone the employes that are to be considered, nor the company, but the public. ITence it would seem from these observations that the railroad company, when it proves in a case as in this case, that it was necessary to have the road open and to have the cattle-guard away from this public highway, as a matter of necessity for the employes, then the railroad company only had proved one of the elements necessary to its complete exoneration. And in coming to that conclusion the rest seems easy. .

These instructions did not embody the three elements. The public was put in, but not included with the other two elements. The record discloses that the railroad company did prove that it was necessary that the cattle-guard should be constructed so far away from persons using the road to serve the interest of the employes, that it was necessary for them to work on the trains without having the cattle-guards that the testimony showed existed there, but there was no testimony as to the public necessity or interest.

The question was properly presented to the jury by the'court below, the court giving very full instructions to the jury in regard to cattle-guards and fences. Instructing the jury to find where the horses came upon this track, if the three elements existed, the company would not be held liable, and our Supreme Court has determined in the case of Railroad v. Newbrander, supra, that it is a fact for the jury to determine, and that it is necessary for the railroad to construct and maintain cattle-guards at the first point below crossing that will not interfere with the public, if it does so interfere at the crossing. In this ease the defendant introduces evidence pointing only to one of these propositions.

Now, according to the evidence,' the depot at Piketon is about at a point equi-distant from the cattle-guard on the north and the cattle-guard on the south, according to the testimony below, and above the two crossings about half a mile, or a little over. The testimony further discloses that from the water tank to the Jackson Hill crossing is a distance between 500 and 600 feet; that the space between the depot is the only place the public .uses for loading and unloading, and the driving of vehicles for the purpose of talsing merchandise there and for removing the same therefrom. Below the depot — the testimony-shows that below Narrow street — it is not used for the purpose of receiving or discharging freight. But now that was all before the jury. These distances, the amount of side-track, the amount of freight track on the west side, the location of the south crossing, the cattle-guards, the location of the Jackson Hill road and the cattle-guard north of that, the whole topographical situation there, with reference to these tracks and side-tracks, and depot and buildings were all before the jury. They must determine, and did determine, these questions of fact, and, therefore, we can not say that there was error in the court refusing the jury said instruction. It is, therefore, the judgment of this court that the judgment of the lower court be affirmed.


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    QUOTIENT VERDICTS AND REASONABLE DAMAGES FOR. PERSONAL INJURIES.
    [Circuit Court of Lorain County.]
    The Lorain Steel Co. v. George Hayes.
    Decided May 8, 1905.

      Indeterminate Quotient Verdicts- — Negligence—Pleading—Evidence— Damages for Severe Personal Injury.

    1. Passion or prejudice on the part of a jury are not necessarily indicated by the rendition of a verdict of $9,250 in favor of a man thirty-five years of age, earning $2.65 a day, and injured as badly as in this case.
    2. While an indeterminate quotient verdict is utterly indefensible, a verdict will not be set aside for misconduct on the pant of the jury, where it does not appear that it was agreed by the jurors prior to its ascertainment that a verdict thus obtained should be binding upon them, or that there was a failure on the part-of any juror to give his individual untrammeled assent-to the amount of the verdict after its ascertainment and before its rendition.
    3. The finding of the jury upon the subject of negligence is warranted by the circumstances of this ease.
    4. An allegation that the plaintiff went between two- ears with the knowledge of and by order of the conductor of the train, and that while so situated the conductor negligently signalled the engineer to back the train, thereby directly causing the injuries complained of, sufficiently States a cause of action.
    Henry, J.; Marvin, J., and Winch, J., concur.
   This i® a proceeding in error to reverse a judgment for $9,250 recovered by the defendant in error, George. Hayes, at the January Term, 1905, of -the Lorain County Common Pl-eas Court, for injuries sustained by him March 1st, 1903, while in the employ of the Lorain Steel Company, at Lorain, Ohio. The injuries consisted -chiefly of a mashed right ankle and left arm and disordered kidneys.

A bill of exceptions, duly perfected, exhibits all the evidence, and an examination thereof shows that Haye-s is practically unable to walk without a crutch or a cane; this his arm is well-nigh useless, and that the condition of his kidneys still gives him pain and necessitates almost hourly micturition. When injured he was thirty-five years old, sound in body, and earning $2.65 per day. While the amount recovered is large, we are unable to say that it is unwarranted by the evidence, or that the jury’s verdict was- influenced in that behalf by passion or prejudice. Neither are we able to say, on consideration of the affidavits presented upon the motion for a new trial, and incorporated into the bill of exceptions, that a quotient verdict, so-called, was, prior to its ascertainment, agreed by the jurors to be binding upon them in this case, or that there was a failure on the part of any juror to give his individual untrammeled assent to the amount of the verdict after its1 ascertainment and before its rendition.

We can not set the verdict aside on the ground of misconduct by the jury. But we may observe in passing, that the practice, by jurors of agreeing in advance to an .indeterminate quotient verdict is of course utterly indefensible, and also that the alleged immemorial practice by attorneys in this county of listening to the deliberation® of juries has certainly not ripened into a prescriptive right, nor should it continue.

Coming now to the circumstances attending the accident the undisputed facts are, that Hayes was one of a crew of five men employed in the railroad department of the plaintiff in error’s extensive business. These five were: Oolvig, conductor; Doyle, engineer; Tisdale, fireman; Terwilliger, head brakeman; and Hayes, rear brakeman. The fireman and head brakeman did not testify. The others did. On the night of March 1st, they all came up on a locomotive to where eight cars were standing on an elevated track over certain bins for receiving ore, limestone and coke. These eight cars had been unloaded there by emptying their contents through the bottoms and -between the rails of the track into the bins below. The eight ears stood there empty, in four cuts of two ears each,-ready to be coupled together and hauled away.

The conductor and two brakemen stepped down from the locomotive to the elevated platform which ran beside the track, to see to the coupling of the cars. The cars were equipped with automatic couplers, some of which, however, had become clogged with ice or otherwise so that they failed to couple readily by mere impact and required some manipulation by the men. There were three couplings to be made; namely, between the first and second cuts, between the second and'third and between the third and fourth, in addition to the coupling to be made between the engine and first cut. The first was made without difficulty. Several futile attempts were made to accomplish the second. Colvig and Terwilliger were busy with this; Hayes meanwhile went into the narrow opening between the third and fourth cuts to prepare for the third coupling. "While there the locomotive and sis cars moved, crushing him against the seventh car, and finally causing him to drop into the bin below.

Hayes says the conductor ordered him to adjust the coupler there, and that when he demurred for fear of being caught, the conductor promised to protect "him.

Hayes further seeks to prove by the engineer, Doyle, that notwithstanding this promise, the conductor presently gave a signal to the engineer to back up, which he did, thereby causing the accident. It is pointed out by plaintiff in error that inasmuch as they had not yet tried to make the third coupling by impact, the conductor could not have known that there was, anything there needing adjustment,' and therefore the allegation of the petition to the contrary is untrue and Hayes’s story is improbable. But. there is some evidence that, in the attempt to couple the second and third cuts, the impact there had been hard enough to close the gap between the third and fourth cuts, without, however, causing them to couple, and that the gap was opened again by the rebound.

The conductor moreover denies that he ordered Hayes to adjust that coupling; denies that he promised to protect him, and denies that he signaled the engineer to back. He further declares that Terwilliger, who was with him, did not give such signal. Hayes says he himself did not give the signal, and, of course, he did not. Doyle is positive that he received the signal, and says it was given, he thinks, by the conductor, the latter’s lantern being the only one in use and in sight at that moment. And it is clear that if there was any signal, it came, not from Terwilliger or Hayes, but from the conductor Colvig. The jury might well find under these circumstances that Doyle would hardly have backed without a signal, and that his recollection is correct rather than Colvig’s. So, too, they might well find that Iiayes would' hardly have gone into the narrow opening between cars, when the locomotive was likely to be backed at any moment, unless the conductor had ordered or at least knew of his1 action so as to protect him; and hence that Hayes’s story, notwithstanding his interest, is, under the circumstances, more probable than Colvig’s.

The theory of plaintiff below is, of course, that the conductor forgot Iiayes’s situation when he gave the order to back. After reading all the testimony we are impressed that this theory is by no means improbable; we can not find that the evidence failed to support the verdict with respect to the negligence of the conductor in this behalf.

It is objected, however, that the conductor could not bind the company by any bargain he made with Hayes to insure his safety; and, indeed, the court below so charged the jury, restricting the effect of Hayes’s testimony in that behalf to the question whether the conductor gave the order to back, knowing plaintiff was between the cars. This, we think, was precisely the bearing that testimony properly 'had; and if it might also, as plaintiff in error points out, affect the question of contributory negligence, its tendency was rather to excuse Hayes than to inculpate him, and hence he is the only one who could complain of the limitation.

But the plaintiff in error further claims in this connection that Hayes was contributorily negligent in that he ^violated the requirements of a certain “Notice to Employes” of which he had knowledge and which reads in part as follows:

“It is hereby made the duty of every employe, under all circumstances, to take sufficient time, before exposing himself to dangers, to make such examination [as the one before mentioned in the notice], and to refuse to obey any orders which would imperil his life or limb.”

It is urged that Hayes protested against and therefore knew the hazardous nature of the thing which he claims he was told to do, and that under this rule it was his duty to refuse to obey the order. This contention, however, neglects1 the important element on which Hayes says he relied, namely, the conductor’s promise to protect him. With that promise, it was not obedience to the order that imperiled his life or limb, but the non-fulfillment of the conductor’s duties. It was not outside the scope of the conductor’s authority to conduct himself so as not to injure Hayes, when he knew that Hayes was between the cars. On the contrary, this was precisely his duty (Railway Company v. Lavalley, 36 O. S., 221), to notify Hayes of his intention in this behalf was but an ordinary incident of the co-operation requisite in the work of railroad crews, and the same is true of Hayes’ reliance thereon. The only thing the conductor promised to do was a thing he was -bound to do anyway, under the circumstances.

The question of contributory negligence was submitted to the jury, with instructions which we think were correct, and the evidence in that behalf seem® to us to support the verdict so far as this question is concémed.

Another claim urged by plaintiff in error is that the petition failed to state a cause of action. There are five specifications of negligence in the petition. The first three' a-llege -that the company was negligent in providing or maintaining defective appliances and premises; but these were expressly abandoned by the plaintiff below upo-n the trial. And the court so charged the jury.

The fourth alleges that, under these and -other circumstances mentioned, the defendant below, by and through its conductor, superior in authority to plaintiff, was negligent in ordering him to go between the cars, "and then signalling the engineer to back upon him.

The fifth differs from the fourth in that it alleges the conductor’s- promise of protection.

It is claimed that inasmuch as there is no allegation and no pretense that Hayes was ignorant of whatever defects there were in the cars and premises, but nevertheless in every instance these defects are alleged as part and parcel of the circumstances under which the conductor’s conduct is averred to be negligent, there is a complete failure to' allege any actionable negligence whatever. The answer to this contention is, that it is of course unnecessary to allege that Hayes did not know that the conductor would signal the engineer to back, and it is quite immaterial to the sufficiency of the petition whether he knew or did not know all the attending circumstances amid which the conductor’s conduct became negligent. It is enough to say that Hayes was between the cars by the order or to the knowledge of the conductor and that the latter negligently signalled the engineer to back the train while Hayes was there, thereby directly causing the injuries complained of. This is the marrow of the ease, and we think it is sufficiently alleged. We do not think the1 court below erred in overruling the objection to the introduction of any evidence under this petition, nor in overruling other motions thereafter made on the same ground.

E. G. & H. C. Johnson and Thomas Ewing, for plaintiff in error.

Lee Stroup, Skiles, Green & Skiles, for defendant in error.

Another claim urged here by plaintiff in error is that the1 court erred in allowing the plaintiff to testify that he was performing his work under the directions of James Colvig, the conductor. It is so perfectly patent from the. whole case that this was true, that we find no prejudicial error in it.

It is also claimed that the court erred in excluding the written statement of Doyle and Colvig made on the night of the accident.. It was offered to contradict Doyle, but we fail to find my proper foundation for the introduction of this paper in this behalf. Moreover it plainly purports to be Colvig’s statement, and if the additional signature is in fact Doyle’s, it does not clearly commit him to the statements therein contained. We think it was properly excluded.

The plaintiff in error’s requests to charge that were refused as well -as its exceptions to the general charge, have been carefully scrutinized without revealing any reversible error. To state reasons in detail would be a repetition in the main of'what has already been said and would unnecessarily prolong this opinion. The judgment is affirmed.


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    ACQUIESCENCE OF BENEFICIARY IN WRONGFUL APPLICATION OF TRUST FUND.
    [Circuit Court of Hamilton County.]
    Estate of John H. Koehnken, Deceased.
    Decided, May 27, 1905.

      Administrator — Application to Open Account of — Misapplication of Trust Fund — Acquiescence of Beneficiary.

    The acquiescence of.a beneficiary in a wrongful application of a trust fund by a trustee releases' the trustee as such and his sureties from liability to the beneficiary.
    Giefen, J.; Jelke, J., and Swing, J., concur.
   This action was originally commenced in the probate court upon a petition for citation against Herman TI. Koehnken, as administrator of the estate of John IT. Koehnken, deceased, in which it was alleged “that among other things there came into his hands as such administrator a large amount of United States bonds. That in a distribution, which was made about June 3d, 1899, of said bonds the share of the widow, said Anna C. Koehnken, of said bonds was $6,000 and was then and there to be delivered to said Anna C. Koehnken, but as this petitioner is informed and believes said bonds were never in fact delivered to said Anna C. Koehnken.”

The probate court and common pleas court treated the citation as an application for leave to open up the account filed by said administrator, June 23d, 1899, in said probate court, and as an exception thereto.

It is now claimed that the petition does not state facts sufficient to constitute a good cause of action, inasmuch as it contains no allegation of fraud nor of manifest error, as required under Section 6190, Revised Statutes. It is admitted by the administrator that he wrongfully converted the bonds to his own use by pledging them as collateral security for a loan in the Equitable National Bank; and that the receipt taken by the administrator from Anna C. Koehnken and filed with the probate court in the final settlement of his account showed a payment of $7,641.24, whereas in fact only $831.24 was paid. While the petition and the finding of the common pleas court fail to show any actual fraud on the part of the administrator, they do show a manifest error, unless otherwise explained. The theory of the defense was that Anna C. Koehnken acquiesced in and ratified the wrongful act of the administrator, and looked to him as an individual for the restoration of the bonds or the payment of their value in money.

Oscar W. Kuhn, for plaintiff in error.

Goebel & Beitinger, contra.

Upon this issue, the court of common pleas made no finding, but we think the evidence warrants the' conclusion that, although at the time when she executed the receipt she may not have known that the bonds had been pledged and were beyond the control of the administrator, she a short time thereafter was fully informed of the facts and acquiesced in and ratified the act of the administrator. This is evidenced by the testimony of the administrator himself, which to some extent is corroborated by the testimony of Emma C. Koehnken, a daughter of Anna C. Koehnken; and by the fact that although Anna C. Koehnken survived for a period of eighteen months after the account of the administrator was settled in the probate court, she took no action during her lifetime to impeach the account of the administrator or otherwise charge him as a trustee, with the obligation to return the bonds or their value. That the acquiescence of a beneficiary in a wrongful application of a trust found by a trustee releases the trustee as such and his sureties from liability to the beneficiary has been decided in the cases of Pope v. Farnsworth, 146 Mass., 339, and Dyer v. Riley, 51 N. J. Reports, 124.

We hold therefore that the judgment of the court of common pleas is not sustained by sufficient evidence, and will be reversed, the cause being remanded for a new trial.


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    QUESTIONS OF NEGLIGENCE WHERE A STREET CAR STRUCK A PEDESTRIAN.
    [Circuit Court of Franklin County.]
    Columbus Railway v. Patrick J. Connor.
    Decided, February 20, 1905.

      Negligence — Street Railways — Equipment of — Expert Testimony— Charge of Court — Special Instructions — Pleading as to Contributory Negligence — Speed Ordinance and Excessive Speed — Misconduct of Counsel — Passion and Prejudice of Jury — Evidence—Trial.
    1. The equipment of the car which ran over plaintiff may be shown for the purpose of determining the speed with which the car could be run with safety to the public, but can not be compared with the equipment of other cars in common use when defective equipment is not the negligence complained of.
    2. An expert can not testify as to the distance within which a particular car could be stopped, unless he has had experience with that car or others similarly equipped; but he may testify that cars differently equipped can be stopped in a shorter distance, where the purpose of such testimony is to show the speed at which the car which ran over plaintiff could be safely run.
    3. A charge to the jury is improper when it misstates the pleadings; or when it states the rule of care applicable to an ordinarily prudent person, without referring to the infancy of the plaintiff; or states that contributory negligence tonly ceases to be a defense if the defendant could have avoided the injury by ordinary care, without adding “after the negligence of the plaintiff had intervened;" or implies that the cars of a street railway company should at least come up to the standard of those in common use, where the injury complained of was to a pedestrian and not to a passenger; and in giving or refusing special instructions, it should be done without qualification or comment.
    4. The proper construction of an ordinance providing that the speed of ears shall not -exceed fourteen miles an hour, including stops, is that at the end of the run the average speed should not have exceeded that rate; and the mere fact that the speed exceeded fourteen miles an hour is not conclusive of negligence, even though the speed of the car was the proximate cause of tbe injury, for proximate cause js not necessarily negligence,

      5. While there is a presumption of law that an infant more than fourteen years of age is sui juris in the sense that he is chargeable with negligence, the measure of his capacity in that regard is a question for the jury.
    6. A party can not be said to have had a fair trial when the jury were required to view the case through an atmosphere of passion and prejudice, excited by the conduct of counsel; and it is not a sufficient excuse to say that there was provocation and that opposing counsel were guilty of the same offense.
    Wilson, J.; Dustin, J., and Sullivan, J., concur.
    Error to Franklin Common Pleas Court.
   This a proceeding in error to reverse a judgment below in the sum of $9,000, for personal injuries claimed to have been caused by the negligence of the plaintiff in error.

The issues were made by the amended!- petition, the amended answer thereto, and the reply which are filed as original papers in this court. The amended petition charged that the accident, which resulted iu the loss of a leg below the knee, was caused by the negligence of the defendant in the following particulars-;

1. That no warning or signal was given of the car’s approach, when, contrary to a custom known to the plaintiff below, it was proceeding north on the west one of the two tracks on Fourth street immediately south of First avenue in the city- of Columbus, Ohio.

2. That the car was run at a dangerous, and excessive speed, which w-as in violation of the speed ordinance of the city.

3. That the defendant made no effort to stop the car after the motorman saw the plaintiff in a perilous position, or by the i-xercise of ordinary care could have seen him.

4. That the fender on the -car was out of order, and would not work automatically, contrary to and in violation of an ordinance of the city.

The defendant’s first defense to the amended petition was in nature of a general denial. A second defense was pleaded in the following language:

‘ ‘ The plaintiff at the time he received the injuries stated in the amended petition and immediately- prior thereto, was guilty of negligence and want of ordinary and proper care on his part, which directly caused his said injuries, as follows, to-wit:

“That he negligently and carelessly went upon said west track immediately in front of said moving and approaching ear, and negligently and carelessly remained on said track and failed to leave the same before he was struck by said ear, although he saw and heard said moving ear approaching him, or by the exercise of ordinary care he could have seen and heard said moving car approaching.him, and by the exercise of ordinary care he had ample time to have left said track before said moving car reached him, and thereby entirely escape from injury therefrom; and so the defendant denies all right or claim of damages on the part of the plaintiff .against it by reason of the allegations contained in the petition.”

The plaintiff replied, denying the charges of negligence made against him. After the trial was had and verdict rendered a motion for a new trial was interposed, overruled, and judgment entered upon the verdict.

The contention of the plaintiff in error is that there was error:

1. In the admission of incompetent, irrelevant and immaterial testimony offered' by the plaintiff below.

2. In the exclusion of competent, relevant and material testimony offered by the defendant below.

3. In the refusal to instruct the jury as requested by the defendant before argument.

4. In the comments of the court made in the presence of the jury in the way of reasons for the refusal to so instruct the jury.

5. In the refusal to instruct the jury as requested by the de^ fendant after argument.

6. In the instructions given to the jury after argument.

7. Misconduct of counsel for the plaintiff below.

8. Because the verdict was against the manifest weight of the evidence and excessive in amount and contrary to law.

Of these in their order:

(1) The objection goes in a general way to the evidence admitted for the purpose of proving how other cars on the same and other lines were better and differently equipped, and to the purpose for which, under the ruling of the court, it was admitted; and in particular to the expert opinion of the witness, Claud© M. Collins, as to the time in which the ear which caused the injury could have been stopped.

It was competent to prove in. chief in what manner the car in question was equipped for the purpose of determining the speed with which it could be run with safety to the public — that being determined by the distance and time within which it could be stopped, depending upon the equipment.

It was also competent to prove by a witness, qualified to testify as an expert, that other cars differently equipped could be stopped in a shorter distance and time, in order to demonstrate that this car could not be safely run at as high a rate of speed as others better equipped. On cross-examination evidence of this character was admissible for the further purpose of testing the expert knowledge of a witness.

But it was not competent, under the charges, of negligence in the amended petition, to admit testimony as was permitted by the trial court for the purpose of showing that other ears, on the same or other lines better equipped, were in common use. That fact could not throw any light upon the question whether or not the defendant had been negligent in the operation of this particular car. It only reflected upon the right of the company to use the car at all, and that right was not challenged in the petition, except as to the fender. It opened up a wide field for investigation to which the attention of the defendant was not called in the pleadings and which it had no reason to anticipate. It was prejudicial to admit evidence of this character for that purpose.

We are also of the- opinion that the witness, Claude M. Collins, did not qualify as an expert to testify within what time- and distance this particular car as equipped could be stopped. It was not shown that he had ever had any experience with, or made any observations of, a car similarly equipped. Cars and appliances are so multiform, and so graded in efficiency, that upon a question so vital in the ease the expert opinion should be based on knowledge of this or similar cars similarly equipped.

(2) We find no error in the exclusion of evidence.

(3) The defendant requested the court to charge- the jury before argument as follows-:

(a) In determining whether or not the defendant was negligent, and whether or not its -alleged negligence was the cause of the plaintiff’s injuries, you are- restricted, in considering and weighing the testimony, to the issues made by the pleadings. The pleadings which state the issues-are the amended petition, the answer and the reply. The plaintiff is not entitled to- a verdict against the defendant unless he has shown by a preponderance of all the evidence in the case that the defendant was negligent in one o-r more of the particulars stated in his amended petition, and that such negligence was the proximate cause of his injuries. Therefore, he is not entitled to a verdict on account -of any defect in the car by which he was struck, if he did not allege such defect in his amended- petition. He does not aver in his amended petition that there was any defect in the brake, the controller, or the device for cutting off the current of electricity by which the car was propelled, or any other part or appliance of said car except the fender. He does not charge in his amended petition that the car w-as not equipped with a good and sufficient brake; nor does he charge that the brake was not in good condition. Therefore, he is not entitled to recover on account of the kind or condition of the brake used on that car; nor is he entitled to recover on account of the kind or condition of the controller, or the device for shutting off the electric current on that car.

(b) If you find from the evidence that the plaintiff on the occasion mentioned in the amended petition failed to exercise such care and prudence as persons of ordinary care and prudence are accustomed to exercise under the same or similar circumstances, and if you further find from the evidence that such failure on his part to use ordinary care was the proximate cause of the injuries which he received, he was guilty of negligence which will prevent any recovery of damages by him in this action.

(e) If the plaintiff was walking east or northeast towards the track on which the car was appoaehing, and if he heard, or by the exercise of ordinary care and prudence could have heard, the ear approaching, either the sounding of the gong or the noise of the moving car, it was his duty to look and see what track it was on, and if he failed so to do he is not entitled to recover in this case, unless you find from the evidence that the motorman on the car knew, or had reason to believe, that the plaintiff, notwithstanding the noise of the'ear, or the sounding of the gong — if you find that it was sounded — was about to step on the track in front of the car, and did not, upon discovering the plaintiff’s peril, use ordinary care to prevent injuring him. It was the duty of the plaintiff to look both ways for the approach of cars on the west track before stepping on the same, whether before doing so, he was walking directly towards the track, or diagonally towards it, or parallel with it. If the plaintiff stepped on the track ahead of the car approaching from the south and started to walk north on that track, it was his duty, before stepping on the track, to look both north and south for an approaching car, and if he continued walking north on the track, it was his duty from time to time to look behind him to discover whether or not a car was approaching from that direction; and he was not relieved of the duty to take such precaution by the fact that until shortly before the accident it was customary for northbound cars to run on the east track.

(d) If the motorman saw the plaintiff approach and enter upon the west track ahead of the car, and start to walk north between the rails of the west track, and thereupon sounded his gong s.o loudly and at such a distance from the plaintiff that the plaintiff had sufficient time and opportunity to step off the west track and avoid danger, .the motorman had the right to assume that he would do so, and, under such circumstances, it was not his duty to stop the ear unless the plaintiff did not appear to hear or heed the warning; and if the warning was given in time to prevent injuring the plaintiff if he had heeded it, and if the motorman did not know, or have reaso» to believe, that he would not heed it, until too late to prevent injuring the plaintiff, the motorman was not guilty of negligence in not attempting to stop the ear as soon as he saw the plaintiff entering upon the west track.

The first request misstates the pleadings upon which the issues in the case arise. There were both an answer and an amended answer filed to the amended petition, the amended answer su-' perseding t'he answer. The request refers to the answer only as together with the amended petition and reply making up the issues. Technically, therefore, it was not error to refuse the request.

The second request was properly refused for the reason it defines the rule of care applicable to the ordinarily prudent person, without reference to the infancy of the plaintiff.

Requests three and four involve questions of fact which were referable to the jury.

(4) The proper practice is for the court to give or refuse the request without qualification or comment. While in the opinion of the court the reason given in the presence of the jury for the refusal of the first request was not sound, inasmuch as the court instructed the jury to disregard it, the error was harmless.

(5) and (6) Complaint is made that in its charge the court characterized the second defense as being that of contributory negligence only, while under the pleadings it should have been given a broader significance. The second defense in the answer is in effect a plea of contributory negligence. There is in it no denial of the alleged negligence of the defendant. That is con-contained in a separate defense. After alleging the negligence of the plaintiff which caused the injury, it says: “And so the defendant denies all right or claim of damages on the part of the plaintiff against it, by reason of the allegations contained in said amended petition.” That is, notwithstanding the negligence charged in the amended petition, the plaintiff by reason of his own negligence is not entitled to recover.

The court said in its charge:

“Contributory negligence only ceases to be a defense if defendant could have avoided the injury by ordinary care. ’ ’

There should have been - added to this statement some such qualification as, “after the negligence of plaintiff had intervened. ’ ’ This no doubt is what the court meant to charge, but the qualification was omitted and the statement in the context was misleading and prejudicial.

The plaintiff introduced in evidence the ordinance of the city regulating the speed of cars, and there was testimony tending to prove that the defendant had exceeded the limit. The court charged that, ‘ ‘ Such fact alone would not be such negligence on the part of the defendant as to render it liable for said injuries to plaintiff unless you further find that such was the proximate cause of said injuries. ’ ’

The ordinance does not fix a uniform rate of speed applicable to all times and places. It must “not exceed fourteen miles per hour including stops.” To reach the limit of the ordinance it is permissible to run a part of the time at a speed greater than fourteen miles per hour, 'in order to make up the time lost in stopping. The ordinance regulates the speed only to the extent that at the end of the run the car must not have exceeded the average of fourteen miles per hour. Whether the speed is excessive under the ordinance depends in some degree upon the conditions affecting thé public safety at the particular time and place in question. It follows that whether the speed of the car at the given time and place was negligent, is always an open question, and that it exceeded fourteen miles per hour is not conclusive on the question of negligence, even though the speed of the car-was the proximate cause of'the injury. The proximate cause is not necessarily negligence. The charge was misleading and prejudicial.

It was not error to charge in effect that the motorman should have seen the plaintiff, if in the exercise of ordinary care he could have seen him in time to prevent the injury. Operating the ear on the street at the time and place in question, the company had reason to anticipate the presence of the plaintiff on the track, and, therefore, owed him the duty to see, if in the use of ordinary care it could have seen him in time to avoid the collision. The rule in Erie Ry. v. McCormick, 69 Ohio St., 45, does not apply. In that case the company had the right to a clear track and had no reason to apprehend a collision with the defendant in error.

The court instructed the jury that, “A street railway company is bound to furnish and maintain safe cars and appliances, whether old or new, but the employment of the appliances which are in general and common use in cities of this country can not be said to be negligent.” And also that,'“If such fender was at that time the best appliance defendant could, after due- investigation, then procure, the defendant would not be liable.” The measure of the duty of the company to the plaintiff in furnishing ears and appliances is ordinary care. In so far as the charge implies that the cars should be at least such as are in common use, and the fender the best that could be procured, it is confusing and misleading for, that it too nearly- defines the duty of the company as a common carrier to its passengers, instead of to pedestrians. As to cars the court was not entitled, under the pleadings, to fix a standard, and as- to the fender the standard was too high. It should have” been left to -the jury to determine from the evidence what was ordinary care under the circumstances.

It was not error to charge, for the plaintiff in this case., the modified rule of ordinary care according to his years. There is a presumption of law that an infant more than fourteen years of age is sui juris in the sense that he is chargeable with negligence, but the measure of his capacity in that regard is a question for the jury.

(7) A party can not be said to have had a fair trial when tne jury is required to view the ease through an atmosphere of passion and prejudice, excited by the conduct of counsel. From the opening statement to the close of the argument that was the condition in the trial of this cause in the court below, as is disclosed by the record. It would be difficult to find a case that more nearly approaches the ancient trial by battle. The zeal of cormsel on behalf of their client, which, decorously exerted is always commendable, no doubt, will explain much of the hot blood and bad temper that abound, but the modern standard of decorum and fair argument was flagrantly violated. Whenever there is violent contention between counsel, the jurors are led to take sides because it is human to do so, the result being, that passion and prejudice find easy lodgment in their minds and vitiate their verdict. The instances of misconduct are too numerous for recital in this opinion.

J. J. Lentz and L. G. Addison, for defendant in error.

Booth, Keating & Peters, for plaintiff in error.

Pages 79, 148 and 1142 of the record evidence, and the parts of the argument designated by the numbers 20, 24, 25 and 30 in the motion for a new trial, may be referred to as characteristic violations* of the rule. It is not a su cient excuse to say that there was provocation, and that opposing counsel were guilty of the same offense. If theirs had been the verdict and that were found to be true, theirs would be the reversal. Charges of unprofessional conduct against opposing counsel should not be made in the trial of a cause, but in a proceeding instituted to inquire into the truth of the charges. They should never be made to influence the verdict of a jury, or the judgment of a court. There was prejudicial error in the conduct of counsel.

Except in so far as the foregoing particulars modify the trial court’s view of the law of the case, we find no other error in the charge or refusal to charge. f

We find no other error on the record.

We are moved to say that the record in this case is unnecessarily large. It could be reduced to one-fourth of its present compass and still be certified to contain all the evidence. The cross-examinations are extended beyond purpose or reason.

The judgment is reversed and the cause remanded for a new trial.


text:
    TAX LEVIES UNDER. AN UNCONSTITUTIONAL LAW.
    [Circuit Court of Lucas County.]
    C. W. F. Kirkley v. Peter Parker, Treasurer of Lucas County, Ohio.
    Decided, March 11, 1905.

      Taxation — Levy Under an Unconstitutional Law — Not Yet Declared Unconstitutional — Not Enforceable, When.

    The fact that a law under which a tax was levied had not been declared unconstitutional at the time the levy was made, will not save the levy fronl injunction against its collection, when it does not appear that contracts have been entered into on the faith thereof.
    Haynes, J.; Hull, J., and Parker, J., concur.
   A petition in error is filed in this case for the purpose of reversing.a judgment of the court of common pleas in a matter of certain alleged illegal taxes. The facts of the ease are so well stated in the brief of the plaintiff in error that I quote from it:

“In the court of common pleas the plaintiff in error, who was plaintiff below, brought an action to restrain the county treasurer from collecting part (to-wit, $214.10) of the taxes standing charged on the tax duplicate of 1904 against Lot 224, Port Lawrence Division, the plaintiff admitting that the balance (to-wit, $2,033.07) was legal and due. The court below restrained the treasurer from collecting $155.87 of the $214.10, but refused to enjoin the collection of the balance, $58.23. Because of the refusal to enjoin this small sum ($58.23) the plaintiff prosecutes error here.

“It appears from the petition that in June, 1903, the county commissioners levied’for general county purposes 2.37 mills on each dollar of taxable valuation. Under the Lucas county clause of Section 2833 (as it stood prior to the amendment of April 23, 1904, 97 Ohio Laws, 308), the commissioners were authorized to levy not to exceed 5 mills for all county purposes; but under the general clause of that section they were authorized to levy only 7-10 of a mill in counties having a taxable valuation between $70,000,000 and $100,000,000, of which Lucas county is one. The rate actually levied (2.37 mills) exceeded the rate authorized by the general clause of Section 2823 (7-10 of a mill) by 1.67 mills which on a valuation of $34,870 (the valuation of the property in question) would amount to $58.23, the amount in controversy before this court. In March, 1903, in the case of Yost v. Maumee Brewery Co., 20 Circuit Court, 26, this court held the Lucas county clause of Section 2823 to be constitutional. This decision was affirmed without report by the Supreme Court June 5th, 1900 (63 Ohio State, 563); but January 19th, 1904, after the levy by the county commissioners in the case at bar (June, 1903), in the case of Pump v. Commissioners of Lucas County, 69 Ohio State, 448, the Supreme Court held the Lucas county clause of Section 2823 to be unconstitutional and that Lucas county must be governed by the general clause of that section. The court below applied the doctrine of stare decisis to the case at bar and held the law levied for county purposes to be valid.”

The case stands upon the petition; there was no answer filed in the court of common pleas the facts were tafeen to be admitted.

It was urged by counsel on behalf of the county commissioners that we ought not to interfere with this tax because at the time or before the tax was levied1, while this suit was pending in the Supreme Court, an application was made to that court for a temporary injunction, prior to June of that year, prior to the time at which the tax levy was made by the county commissioners, and that that court overruled the motion without announcing any decision upon the point. That subsequently, and after the tax was levied, the Supreme Court in that same case decided that the law was unconstitutional and invalid. It is claimed by counsel that, relying upon the fact that the Supreme Court overruled the motion for a temporary injunction, the commissioners in this action proceeded to make the levy although the ease was then pending in the Supreme Court. There is no contention but what the law has been declared unconstitutional by tlie Supreme Court; the only contention is that it is not applicable to an assessment or to levies which were made prior to the decision of the Supreme Court, as is the case here.

'The court below, as we understand it, proceeded in the decision upon the general idea that by reason of the fact that the law had not been declared unconstitutional and had not been so held by the Supreme Court at the time the levy was made, that therefore the court ought not to interfere in the way of injunction to restrain the collection of this tax. But we are unable to agree with the court in that respect. We have examined the cases which have been cited by counsel for the plaintiff and we think that the decision of the Supreme Court of this state, following the decision of the 'Supreme Court of the United States and of other states limiting the cases where the court will refuse to interfere to cases where there have been contracts entered into upon the faith of the statutes and the decisions of the Supreme Court of the state under them. To that effect we think is the case of Lewis v. Symmes, 61 O. S., 471; Shoemaker v. Cincinnati, 61 O. S., 603, and 69 O. S., 209, and counsel have also cited a very brief statement of the law from the 26 Encyclopædia of Law, page 179.

B. A. Hayes, for plaintiff in error.

W. G. Tilery and J. S. Martin, for defendant in error.

Now there is no answer filed in this ease and it nowhere appears in the record of the case that there had been any contracts whatever entered into upon the faith of this tax when it was levied, or the decision of the Supreme 'Court made under it; it is in fact a levy made for the general funds of the county and we are” clear in our minds that the rule of law which they seek to apply has no application to a ease of this kind which would call upon us to disturb the levies that have been made by the authorities under the statutes of the state. We have once expressed ourselves upon this law, but as we understand it we we are now following the decision of the Supreme Court of this state, as we are required to do, and under those decisions we think the plaintiff in error is entitled to have this part of the law declared to be unconstitutional, illegal and void and the collection enjoined, and for that reason the judgment of the court of common pleas will be reversed and the cause remanded to that court for further action.