author: áNSBERRY, J.'

text:
    INSURANCE — INTERPLEADER.
    [Wyandot (3rd) Court of Appeals,
    March 23, 1915.]
    Crow. Ansberry and Kinder, JJ.

       Martha Kerr v. Margaret Bowers et al.
    1. Custodian of Fund Claimed by Contending Parties May File Bill of Interpleader.
    Section 11265 G. C. Is auxiliary to and not destructive of, the equitable remedy of interpleader. Hence, the custodian of a fund who claims no interest therein, not knowing to which of two or more persons, making claim thereto, under different titles he should pay the same, may file a petition in the nature of a bill of interpleader making such persons parties thereto, pay the money into court and have adjudicated the rights of said claimants thereto.
    2. Beneficiary No Vested Interest in Policy Reserving Change of Beneficiary;
    The beneficiary in a policy of insurance reserving the right to change the beneficiary to the insured, has no vested interest in such policy until the death of the insured and such insured may, during his lifetime, designate another beneficiary at will. Hence, its appearing that insured has, in the form and manner prescribed by such policy, executed and forwarded, together with the policy, to the company’s home office, the instrument required to effect such change, but dies before such instrument reaches said company, and thereafter the company files a bill of interpleader, making the rival claimants parties thereto, and paying the money into court, such change of beneficiary is effectual, even though the company did not endorse the change of beneficiary upon the policy as provided therein, such provision being for the benefit of the company, is thereby waived.
    Error.

      Finley & GalUnger, for plaintiff in error.

      D. C. Parker and W. E. Hare, for defendants in error.

       Motion to certify overruled, by Supreme Court, May 18, 1915, Kerr v. Bowers, 60 Bull. 232.

   áNSBERRY, J.'

This ease was commenced by the New York Life Ins. Co. filing a bill of interpleader in the court of common pleas of Wyandot county, in which Martha Kerr and Margaret Bowers were named as defendants, which set forth in substance that said company, on February 26, 1901, entered into a contract of insurance with Robert E. Kerr, under the terms of which said company undertook and did insure the life of said Robert E. Kerr by the issuance of policy No. 3,124,789, and thereby agreed to pay $2,000 to Martha Kerr, wife of said insured, “or to such other beneficiary as may have been duly designated, on receipt of satisfactory proofs of the death of said Robert E. Kerr.”

Said policy further provided:

“The insured may, at any time during the continuance of this policy, provided the policy is not then assigned, change the beneficiary or beneficiaries by written notice to the company, at its home office, accompanied by this policy; such change shall take effect on the endorsement of the same upon the policy by the company.”

The company further alleges that on April 16, 1912, said Robert E. Kerr died. Satisfactory proofs of death were furnished, and by reason thereof said company became bound to pay the sum of $2,081.23, the amount due on said policy, but that said company was prevented from paying said sum for the reason that on April 18,1912, said company received at its home office an instrument in writing in the words and figures following:

“Kerr Brothers. Millers and Dealers in Flour,
“Corn Meal, Mill Feed, etc.
“Upper Sandusky, Ohio, April 15,1912.
“New York Life Insurance Company,
“346 Broadway, New York, N. Y.
‘ ‘ Gentlemen:
“I herewith assign New York Life Insurance policy No. 3,124,789, issued to me March 4, 1901, to Mrs. H. W. Bowers, Upper Sandusky, Ohio, my sister, as beneficiary of said policy instead of Martha Kerr.
“Policy for $2,000 enclosed herewith for change.
‘ ‘ Witness: ‘ ‘ Yours very truly,
“Jane Kerr (his)
“Thos. C. Kerr N:,;. ^ Robert X E. Kerr.
“G. W. Sampson (mark.)
“ J. H. Kerr.”

On April 27, 1912, Margaret Bowers notified said company that by reason of said instrument she claimed the said sum of $2,081.23, and demanded payment therefor. That said Martha Kerr, wife of said Robert E. Kerr, disputes said claim and demands payment of said sum to her as beneficiary named in said policy.

The other formal allegations are such as are required in a bill of this character, and made, on behalf of the company, a case entitling the company to the relief asked, which was that said company be permitted to pay the money into court for its determination as to who should receive said sum.

That thereafter Martha Kerr and Margaret Bowers filed their respective cross-petitions in this action, and from the pleadings, the evidence and the admission of parties, the facts are found, briefly stated, to be that Robert E. Kerr separated from Ms wife, Martha Kerr, in April, 1906, and thereafter made Ms home at the family homestead with his mother, an aged lady, several brothers, and his sister, Margaret Bowers, cross petitioner herein. That said Margaret Bowers had charge of the household ; that said Robert E. Kerr, for a long period of time before Ms death, was afflicted with varicose veins and required a great deal of nursing and attention; that this attention was given to Mm by his sister, Margaret Bowers, and that a few days before his death he advised Ms relatives that it was Ms intention to compensate his said sister for her sacrifices and the services she had rendered him by assigning to her his policy of insurance in the New York Life Insurance Company. And that after-wards, to wit, on April 15,1912, he requested one of his brothers to go to his office safe and bring therefrom the said policy of insurance; and when it was brought to him, he gave the same to Margaret Bowers, and then executed the written instrument hereinbefore referred to and set forth, and caused the same, together with the policy, to be deposited in the mail, addressed to the New York Life Insurance Company, at its home office in New York City. Said Robert E. Kerr died the following day, to wit, June 16, 1912, and before the policy and written instrument making change of beneficiary reached said company. The company did not endorse this change of beneficiary upon the policy.

The court below found for and rendered judgment for Margaret Bowers.

Within three days thereafter, Martha Kerr filed her motion for new' trial, which was overruled.

. Thereafter she filed her petition in error in this court, averring a number of errors of the trial court, and praying a reversal of its judgment, and that this court render a judgment in favor of said plaintiff in error, Martha Kerr.

The question in this case is, whether or not the change of beneficiary attempted on April 15, 1912, through the instrumentality chosen by said Robert E. Kerr, was effective. However, before reaching this pivotal question in the case, several other points raised by counsel must be disposed of.

At the outset, objection was made by counsel on behalf of Martha Kerr to the introduction of any evidence in the case, which objection was overruled, and to which the defendant thereupon excepted.

Mrs. Bowers was required to elect whether she made claim for the amount of the policy by virtue of a gift and as a bene'ficiary thereunder, or by virtue of an assignment to her for a valuable consideration. She elected to claim under the assignment.

The objection to the introduction of any testimony, as it afterwards transpired, was on the ground that the filing of the bill of interpleader herein was without authority of law.

We think that no error was committed in overruling this objection for the reason that even though See. 11265 G-. C. does not furnish authority for this action, we are of the opinion that equity would take cognizance of such a proceeding; And we are supported in this contention by the case of Stark Rolling Mill Co. v. Accident and Guar. Co. 31 Circ. Dec. 4 (11 N. S. 443), which holds that interpleader was recognized in courts of equity prior to the amendment of the statute. And the case of First National Bank v. Beebe, 62 Ohio St. 41 [56 N. E. 485], which holds that this section was intended as an auxiliary to the practice in chancery respecting interpleader.

Pomeroy, Equity Jurisprudence, Secs. 1320 to 1329, inclusive, describes the general equitable jurisdiction to grant the remedy of interpleader independent of statute.

Counsel on behalf of Martha Kerr also raise the question of estoppel and argue it at some length both orally and in their brief, claiming that Mrs. Bowers is estopped from prosecuting this action for the reason that heretofore she presented a claim to the administrator of the estate of Robert E. Kerr for services for nursing and caring for him. Said claim having been rejected, she brought suit in the court of common pleas of Wyan-dot county against said administrator, which suit is pending, and that her claim for services in nursing and caring for decedent, sued for in said action, is the identical one which she says was discharged and satisfied by the assignment of the policy of insurance, the subject-matter of this controversy.

We fail to see where Martha Kerr was adversely affected thereby, and hence hold that Margaret Bowers is not estopped, because of said action, from prosecuting her rights under this policy.

Coming, then, to the determining question in this controversy, we find a sharp conflict of the authorities and text writers on this question, or, rather, on some phases of this question.

It is universally agreed by the text writers and courts that the insured, under a contract of insurance with an old line company, may change the beneficiary at will, where such right is reserved in the contract and not prohibited by statute.

In Elliott, Contracts, Sec. 4355, we find this text:

“The contract may reserve to the insured the right to change the beneficiary at will, and when this is done the original beneficiary acquires no vested interest in the policy or its proceeds, and until after the death of the insured he has a mere ex-petcaney. This right to change the beneficiary may be reserved in the policy. * * *
“In ordinary life policies the beneficiary takes a vested interest the moment the policy is issued, and the insured can not change the beneficiary unless the express power to do so is reserved. It is equally well settled that when the right to change the beneficiary is reserved * * * the beneficiary named acquires no vested interest until the death of the insured, and prior to that time the insured may change the beneficiary at will.”

In the policy, the subject-matter of this suit, the insured expressly reserved the right to change the beneficiary, and did all in his power to effect this change when he executed and delivered the so-called assignment above referred to and set forth.

The ease of Hancock Mut. Life Ins. Co. v. White, 20 R. I. 457 [40 Atl. 5], holds:

“First. The provisions of a life insurance policy which permits a change of beneficiaries only with consent of the company is for the benefit of such company; and where it waives such condition, or is estopped from pleading it, and the assured did everything in her power to make a change before her death, although the company did not consent thereto, the substituted beneficiary is entitled to the amount of the policy.”
‘ ‘ Second. Where the insurance company files a bill of inter-pleader offering to pay the amount of the life insurance policy into court, it will be considered to have waived its right to object to a change of beneficiaries on the ground that it did not consent thereto.”

It is contended on béhalf of Martha Kerr that this attempted change of beneficiary was ineffectual for the reason that the policy contained the further proviso,

“That such change was to take effect on the endorsement of the same upon the policy by the company.”

And in support of this contention cited the case of Fruend v. Fruend, 218 Ill. 189 [75 N. E. 925; 109 Am. St. 283], holds:

“A New York statute (Laws 1892, p. 2015, c. 690, Sec. 211) requiring the consent of the insurance company to a change of beneficiary by insured becomes a part of a New York policy issued while such statute is in force, and is controlling on the subject covered thereby although the policy is silent concerning the same.
“Where an insurance policy provides that no change in beneficiary shall take effect until endorsed on the policy by the company at its home office, a change in the beneficiary can not be accomplished until the prescribed conditions are fulfilled.” *####*#
“The rights of a beneficiary in a life insurance policy become fixed at the death of insured and are not affected by a contemplated change of beneficiary which insured had intended to make, but which had not been effected in accordance with the statute and terms of the policy at the time of his death.
“An insurance company can not, after the death of insured and the consequent vesting of the rights of the beneficiary, waive, as against the beneficiary, provisions of the policy relative to change of beneficiary.
“The act of an insurance company in filing a bill of inter-pleader and paying the proceeds of the policy into court, can not be ui’ged by either of the claimants as against the other as a waiver by the company of non-compliance by insured with provisions of the policy for changing the beneficiary.”

The facts in this case are very similar to the facts in the ease at bar. Judge Magruder, in deciding it, pointed out that the laws of New York under which, as he said, the contract of insurance was made, were introduced in evidence. Particularly Sec. 211, which reads as follows:

“Membership in any such corporation, association or society shall give to any member thereof the right at any time, with the consent of such corporation, association or society, to make a change in his payee or payees, or beneficiary or beneficiaries, without requiring the consent of such payee or beneficiaries. ’ ’
“This provision of the New York statute, which is admitted to have been in force in New York when the policy here in question was issued, became a part of the contract embodied in the policy by implication, with the same effect as if it had been embodied in the policy itself.”

It is further said:

“All stipulations of the policy must yield to the statute, and in view of the fact that the provisions of the New York statute thus quoted is, by implication, a part of the policy or contract, this policy is to be regarded as one which requires the consent of the company to the change, the same as though the provisions of the statute were written into the policy itself.”

In the case at bar the statute of the state of New York was neither pleaded nor offered in evidence and, of course, under the authorities this court could not consider the statutes of a sister state unless they were both pleaded and proven. If this statute was a determining factor in the mind of the judge rendering the opinion in the Fruend case, to that extent it would be weakened as an authority in this ease.

In the Rhode Island case, the insured sought to have the beneficiary changed in his policy, and through some inadvertanee on the part of the company, or one of its agents, the beneficiary slip executed by the insured was mislaid, and before it had been found and the company had time to act upon it, the insured died; and the administrator of his estate, to whom the policy was first made payable, and Mrs. Dyer, in whose favor the beneficiary slip was executed, both claimed to be entitled to the insurance fund.

In that case the court said:

“We think Mrs. Dyer is entitled to the fund. The insured had done everything that was necessary on her part to change the beneficiary of the policy. The provision for the consent of the company to the change was solely for its protection, and, therefore, one on which it alone can insist. By filing its bill that the respondents interplead, and thereby offering to pay the fund as the court shall determine, it has waived its right to say that it did not consent, and no one else can urge the lack of its consent in its name. ’ ’

This doctrine of waiver has been applied to contracts similar to the one under consideration in proceedings of this character by our Supreme Court in the case of Keckley v. Glass Co. 86 Ohio St. 213 [99 N. E. 299; 1913D Ann. Cas. 607], for, in its third syllabus, it says:

“Where a life insurance company makes no defense and pays the amount of its policy into court to abide the judgment of the court as between conflicting claimants, parties claiming an interest in the fund will not be allowed to object to the beneficiary named in the policy had no insurable interest.”

It may be argued that the question of lack of insurable interest presents a different principle than the question of change of beneficiary, still there is no doubt that the court in the Glass Company case took the same view of the action of the insurance company in filing a bill of interpleader as was taken by the supreme court of Rhode Island in the case referred to.

The doctrine announced by the supreme court of Rhode Island in the Dyer case, and by the supreme court of Illinois in the Fruend case, cited, by counsel for Martha Kerr, are diametrically opposed to one another, but we are of the opinion that the sounder doctrine is announced in the Rhode Island decision. The trend of authority in the older states of the union, where insurance and insurance law had their inception in this country, is in support of this doctrine.

Counsel for Mrs. Bowers cite the ease of Herold v. Pacific Mut. Life Ins. Co. 39 O. A. & C. 517 (17 N. S. 21).

In that ease the insurance company filed a bill of inter-pleader so that the lawful beneficiary of a life insurance policy might be determined by the court as between two rival claimants. The amount due on the policy was paid into the court, as in this case.

The faets, briefly stated, were that Herold had a policy of insurance on his life and Anna Herold, his wife, was named as beneficiary. He sought to substitute his mother as beneficiary as trustee for his children in place of his wife; To consummate this change, in accordance with the provisions of the policy, an endorsement thereon by the company was necessary. The insured died pending the correspondence between himself and the insurance company with respect to this change, and the endorsement was never made. A judgment was obtained in favor of the mother as trustee in the trial court. Error was prosecuted to the circuit court. The circuit court held that the beneficiary did all that was within his' power to do to change the beneficiary, and affirmed the judgment of the lower court.

We reach the same conclusion with reference to this ease as did the court in the case just referred to, but on the grounds set forth in the ease of Hancock Mut. Life Ins. v. White, supra, and the case of Keckley v. Glass Co. supra.

It follows that the judgment of the court of common pleas must be affirmed.

Crow and Kinder, JJ., concur.


source: Caselaw Access Project

author: GORMAN, J.

license: Public Domain

text:
    LANDLORD AND TENANT.
    [Hamilton (1st) Court of Appeals,
    June 1, 1915.]
    Jones, Jones and Gorman, JJ.
    Gross v. Clauss.
    1. Indicating Intention of Exercising Option for Extension of Lease Option Sufficient.
    A lease for a term with a privilege or option in the tenant of a' renewal or extension for a further term, upon the same terms and conditions, is a present demise as to the renewal to begin at a future time, and under such covenant no new lease need be required, but any indication on the part of the tenant of his intention to avail himself of his privilege operates to extend to him the right of the additional term.
    2. Lessee By Continuing in Possession, Paying Rent Bound.
    A lease contained a provision that if the lessee should -have performed all the conditions of the lease then upon its expiration the lessee should have the privilege of renewing the same for a four-year term upon the terms and conditions of the original lease. Upon the expiration of the original term the lessee remained in possession of the premises without anything being said or done by either of the parties with reference to a new lease, no notice being given by the lessee of his intention to exercise his option or privilege of a renewal. Lessee continued to occupy the premises and pay the rent for three months after the expiration of the original term. Held: That the lessee by continuing in possession of the premises and paying the stipulated rent without notifying the lessor of his intention not to make his election to renew, thereby bound himself for the term of four years from the date of the expiration of the original lease.
    [Syllabus by the court.]
    Error.

      E. A. Hafner and Walter 0. Muhlhauser, for plaintiff in error.
    W. A. Rinchhoff, for defendant in error.
   GORMAN, J.

This is a proceeding in error to reverse a judgment of the municipal court of Cincinnati, in favor of defendant in error. The action below was one to recover $125 rent claimed to be due under a lease between defendant in error, Elizabeth Clauss, the lessor, and plaintiff in error, George P. Gross, lessee.

The lease was in the usual form, containing the usual covenants, and was duly signed, attested, acknowledged and recorded. The term was for one year from October 1, 1911, at a yearly rental of $300, payable in monthly installments of $25 in advance. There is the following proviso in the lease: “provided that if the said lessee shall have performed all the conditions of this lease, that said lessee shall have the privilege of renewing the said lease for the term of four years from Oct. 1, 1912, upon the same terms and conditions herein set forth. ’ ’

Upon the expiration of the term of one year the lessee, Gross, remained in possession of the premises without anything being said or done by either of the parties with reference to a new lease, and no notice being given by the lessee of his intention to exercise his option or privilege of a renewal. Lessee continued to occupy the premises thereafter, and to pay the $25 rent each month, down to December 31, 1912, three months after the expiration of the original term. On December 31,1912, he notified the lessor of his intention to relinquish the premises and remove therefrom, but he continued to pay the rent monthly down to September 1, 1913, although he had vacated on December 31, 1912. The premises continued vacant thereafter down to February 1, 1914. The action was for the recovery of the rent for the five months, September, October, November and December, 1913, and January, 1914, upon the claim of the lessor, Mrs. Clauss, that by holding Over his term, and nothing being said as to a renewal, the lessee thereby made his election to take the premises under his privilege of renewal for the further term of four years. The court below held with the defendant in error in her contention, and found that by holding over his term under the circumstances shown the lessee became bound for the additional four years. In this holding we are of the opinion that the court below committed no error.

We are of the opinion that the lessee, Gross, by continuing ki possession of the premises and paying the stipulated rent, without notifying the lessor of his intention not to make his election to renew, thereby bound himself for the term of four years from October 1, 1912. See Foster v. Ellison, 31 O. C. C. 513 (12 N. S. 399), where the court says on page 400, in speaking of the effect of holding over under a lease containing a provision for a renewal similar to the one under consideration:

“The term under the lease is for the three and a half years, renewable forever, without any express notice required of the intention of lessee to renew. He held over the term of three and one-half years for a period of twenty days before notice to quit the premises [by the landlord] was served upon him, and there by elected to renew.”

In 1 Taylor on Landlord and Tenant (9 ed.) Sec. 332, at page 407, the author says:

“And where no notice is stipulated for, the tenant’s mere continuance in possession and paying rent, without express notice of his desire for the further term, entitles and binds him thereto. ’ ’ Citing numerous cases.

In Jones, Landlord and Tenant, Sec. 338, the author discusses the question of whether or not a new lease is necessary under a privilege of renewal or whether at the option of the lessee it is extended by force of the covenant itself and becomes in effect a lease for the additional term. He states that there is a conflict of authorities on this point, New Hampshire, Massachusetts, Missouri and Maine holding that the election is exercised, where no notice is required, by the tenant remaining in possession and paying the rent. See Ranlet v. Cook, 44 N. H. 512 [84 Am. Dec. 92]; Hall v. Spaulding, 42 N. H. 259; Ferguson v. Jackson, 180 Mass. 557 [62 N. E. 965], and Insurance & Law Bldg. Co. v. National Bank, 5 Mo. App. 333, affirmed 71 Mo. 58.

The author further states that there are authorities holding that the word “renew” and “extend” should be construed to mean that a new lease should be executed, citing Kollock v. Scribner, 98 Wis. 104 [73 N. W. 776], and Orton v. Noonan, 27 Wis. 272.

We think that the best considered authorities hold that a lease for a term with a privilege or option in the tenant of a renewal or extension for a further term upon the same terms and conditions is a present demise as to the renewal to begin at a future time, and under such leases no new lease need be inquired, but any indication on the part of the tenant of his intention to avail himself of his privilege operates to extend to him the right of the additional term.

It is true that some authorities make a distinction between a privilege of “renewal” and a privilege of “extension,” but for all practical purposes, and to the mind of an ordinary person, a privilege of “renewal” and a privilege of “extension” vest in the lessee the same right, a right that adheres to the land and a covenant that runs with it.

The case of Stevenson v. Almess, 9 Bull. 17 (8 Dec. Re. 566), is cited as an authority by counsel for plaintiff in error, to the effect that a tenant holding over under a lease similar to the one in the case at bar is not bound for the additional term. An examination of the facts in that case discloses that the tenant before the expiration of his term notified the lessor of his intention not to avail himself of his privilege and that he intended to vacate at the end of his term, and it was known to the lessor that the tenant had made arrangements to vacate and take other premises in the vicinity; so that it could not be held, as a matter of law, that by holding over in that case the lessee had impliedly elected to renew the lease.

In the case at bar the tenant, by continuing for three months in the premises, paying the rent under the lease and not notifying the lessor of his intention to surrender the premises and relinquish his privilege of a renewal, must be held to have thereby impliedly made his election to avail himself of his privilege of renewal, and to have thereby bound himself, and also the lessor, for the additional term. The rent not having been paid for the five months, and having accrued under the renewed term of the lease, the lessee became liable therefor, and the judgment was properly entered against him.

Jones (E. H.) and Jones (0, B.), JJ., concur.


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

text:
    ATTORNEY AND CLIENT — RECEIVERSHIP.
    [Hamilton (1st) Court of Appeals,
    June 19, 1916.]
    Jones, Jones and Gorman, JJ.

      William Bahmann et al. v. Charles S. Druggan, Recr.
    Allowance to Counsel for Services in Future Action for Corporation Receivership Denied.
    A court is without power to include in a judgment finding the liability of stockholders an estimated fee for attorneys in a future action to enforce stockholders’ liability or collect unpaid subscriptions to the capital stock.
    [Syllabus by the court.]
    Error.

      Oscar W. Kuhn and Ireton & Schoenle, for plaintiff in error.

      S. A. Headley, C. S. Druggan and J. F. Atwood, for defendant in error.

      Motion to certify overruled by Supreme Court, October 24, 1916, Harth v. Durgan, 61 Bull. 354.

   JONES (E. H.), J.

Much of the brief of counsel-for plaintiffs in error is devoted to an attempt to show that these proceedings, brought to collect unpaid subscriptions to the capital stock of a corporation, are barred by Sec. 8688 G. C. which provides:

“An action upon the liability of stockholders under the two next preceding sections can only be brought within eighteen months after the debt or obligation shall become enforeible against stockholders.”

As pointed out in the brief of defendant in error, this question has been decided very recently by our Supreme Court in the case of Bauman v. Kiskadden, 94 Ohio St. 130 [113 N. E. 588]. The syllabus of the case is so directly in point as to leave nothing for this court to consider upon the question here presented, and we must hold these actions were brought within time and are not barred.

The common pleas court of Franklin county allowed the receiver $350 for compensation ■ and expenses including attorney’s fees. The assets of the defunct corporation coming into the receiver’s hands amounted to only $75. The court must have considered the costs and expenses of these proceedings, not at the time commenced, in fixing the fees. The cost and expenses of bringing the $75 into court was a proper charge against the delinquent stockholders. But we doubt the power of the court to include in the judgment, finding the liability of the stockholders, an estimated fee for attorneys in a future action to enforce the stockholders’ liability or collect unpaid subscriptions. The allowance made was nearly five times the amount of the assets in the hands of the receiver, so that it is evident that the court considered the services of the attorneys in this proceeding when fixing the allowance.

For a discussion of this question, see Buist v. Williams, 81 S. C. 495, 499 [62 S. E. 859].

But this is aside from the record before us. We have no power to interfere with the judgment of the Franklin county court in the receivership case and for that obvious reason are not asked to do so by the pleadings.

We find no error in the proceedings under review, and the judgments are affirmed.

Jones (O. B.) and Gorman, JJ., concur.


author: DUNLAP, J.

text:
    HEALTH — LAUNDRIES—LICENSE.
    [Cuyahoga (8th) Court of Appeals,
    July 15, 1918.]
    Grant, Dunlap and Lawrence, JJ.
    Yee Bow v. Cleveland (City) et al.
    1. Laundry Licensing Ordinance not invalid for Inadequacy or Indefiniteness of Definition.
    An ordinance providing for the licensing and regulation of public laundries is not open to constitutional objection because of the inadequacy or indefiniteness of the definition contained therein of public laundries, where the class which It is sought to designate is described as laundries serving thirty or more customers per week for pay.
    2. Ordinance Delegating Determination Ventilation and Plumbing of Laundries to Health Commissioner not Invalid.
    Nor is such an ordinance rendered invalid by the delegation to the health commissioner of authority to determine what shall constitute adequate ventilation or plumbing.
    3. Ordinance Licensing Laundries not Declared Invalid for Defects Curable by Other Relief.
    But even were it granted that such an ordinance contains some provisions in excess of the power granted to municipalities with reference thereto, there is ample opportunity in a court or elsewhere to invoke relief without resort to so drastic a remedy as the securing of a decree declaring the whole measure void.
    ERROR.

      Boyd, Cannon, Brooks & Wickham, for plaintiff in error.

      Alfred Clum, for defendant in error.
   DUNLAP, J.

This canse is here on appeal from the judgment of the court of common pleas, and is a suit brought by the plaintiff, a citizen, resident and taxpaj'er of the city of Cleveland, engaged in the laundry business. It is brought on behalf of himself and all taxpayers of the city and all others engaged in the laundry business.

Complaint is made that a certain ordinance No. 42256, entitled “An Ordinance Providing for the Licensing and Regulation of Public Laundries,” which became effective May 1,1917, is an abuse of corporate power and unconstitutional, being in violation of Art. 1, Secs. 1, 2 and Art. 2, Sec. 26, of the constitution of Ohio, and of Art. 1, See. 8, of the constitution of the United States.

The prayer of the petition is for an injunction restraining the defendants from enforcing said ordinance or any part thereof. To this petition a demurrer is filed and the question for our determination is the sufficiency of the petition.

A copy of the ordinance is of course, before us, being attached to the petition. Its provisions will only be incidentally referred to in this opinion.

No technical question involving the propriety of the proceedings or the relief sought is raised, ánd we shall treat the case as involving simply the questions of the reasonableness and constitutionality of the ordinance.

The able brief of plaintiff concedes the power of the city of Cleveland to regulate the public laundry business as a means cf public safety, thus distinctly and obligingly narrowing the inquiry, and urges only two main grounds or reasons for his claims that the ordinance is unreasonable and unconstitutional.

The first of these grounds is that “the definition of ‘public laundry’ is purely arbitrary, artificial and unreasonable.” Section of the ordinance provides:

“Any building, structure, place, premises or establishment, which is used for the purpose of laundering wearing apparel, table or bed linen, curtain, rugs, towels, or any or all of said articles for thirty or more owners of such articles per week, and for pay, regulated either by a flat-rate, piece price, or by weight, shall be deemed a public laundry for the purpose of this ordinance.”

It must be obvious that an ordinance pretending to regulate public laundries should contain a definition of such a laundry; should explain what constitutes a public laundry, and such definition from the very nature of things, unless it is to include the humble home of every poor washwoman, must be more or less arbitrary. That is to say, a line of demarcation must be drawn between the public and the private laundry. Is it the number of the customers that is to determine? Or is it the character and quality of the work? Perhaps the very wise legislature would adopt a definition which partook somewhat of both of these ideas. Thus it might be possible to have a wiser definition, one which would perhaps embrace a laundry which had many less than thirty customers, and basing the right of regulation upon the amount of work done rather than the number of customers, or perhaps with equal propriety it could be based upon the fact of the employment of a certain amount of help, providing all the time the idea of its being a public laundry was kept in mind. Any one or all of such provisions might wisely and properly be in this definition. There would still be an exception created in favor of the home of the poor wash-woman, which may be the one thing that this ordinance intended to exempt from its operation. We are not claiming that a definition so amended would be ideal. We are not even claiming that it would be better or more practical than the definition contained in this ordinance. What we mean to say is that it is not in human experience for a legislative body to adopt the very best and wisest ideas upon its first attempt to enact a complicated but eoncededly wise regulative ordinance. Such laws must be started and watched and amended as occasion may arise and necessity decree. The very idea of a “public laundry,” however, carries with it the idea of an unlimited number of customers. It could hardly be said that a laundry which was under contract to serve only certain customers ivas a public laundry, but even such a laundry comes within the provisions of this ordinance if its contracts- exceed thirty. It can not then lay claim to privacy. And so it is apparent that the most natural basis for the determination of whether a laundry is public or private is that of the number of customers, and not the other considerations which we have so gratuitously offered. This- proposition, if one granted, narrows the particular question we are now considering. Surely the number may as well be thirty as any other arbitrary number. It is a number that amply protects the home of the poor washwoman from the visits of the health commissioner and his deputies, and yet which probably forces every person in purely public laundry business to look well to his surroundings to see that he complies with the law.

So far as we are aware legislation of this kind even though somewhat arbitrary has been nearly uniformly upheld. The principle is well stated by Mr. Justice Field in the case of Barbier v. Connolly, 113 U. S. 27 [28 L. Ed. 923; 5 Sup. Ct. 357], as follows:

“Regulations for these purposes may press with more or less weight upon one than upon another, but they are designed, not to impose unequal or unnecessary restrictions upon any one, but to promote, with as little individual inconvenience as possible, the general good. Though, in many respects, necessarily special in their character, they do not furnish just ground of complaint if they operate alike upon all persons and property under the same circumstances and conditions. Class legislation, discriminating against some and favoring others, is prohibited, but legislation which, in carrying out a public purpose, is limited in its application, if within the sphere of its operation it affects alike all persons similarly situated, is not within the amendment.”

We are cited by the plaintiff to certain Ohio eases, which it is contended are in support of this particular objection to this ordinance, but we do not quote them here, for we think the provisions of the enactments questioned in them are clearly to be distinguished from the provisions of the ordinance in question. We think that the following ^authorities are more or less in point and that they are against the contention of plaintiff: Marmet v. State, 45 Ohio St. 63 [12 N. E. 463]; Toledo v. Brown, 32 O. C. C. 357 (14 N. S. 165); Welch v. Swasey, 193 Mass. 364 [79 N. E. 745; 118 Am. St. 523]; St. Louis v. Bircher, 7 Mo. App. 169; Felgum v. Nashville, 76 Tenn. (8 Lea) 635; Cobb v. Durham Co. (Comrs.), 122 N. C. 307 [30 S. E. 338]; Hubbell v. Riggins, 148 Ia. 36 [126 N. W. 914; 1912 B. Ann. Cas. 822].

In our opinion the definition of “public laundry” as contained in this ordinance sufficiently meets the requirements of our constitutions, both state and national, and is a reasonable definition. We therefore find no valid objection to this ordinance for this reason, and we pass to a consideration of the second ground, which is that—

“The ordinance grants legislative and judicial power to an administrative officer. ’ ’

It is argued that because certain sections of this ordinance provide for approval by the health commissioner before the license may issue, and that because such approval can only be obtained if the location, the construction, the ventilation, the floor space and the sanitary drainage arrangements are sufficient to properly protect the public health and the health of the persons to be employed in such. proposed laundry, that thereby there is delegated to him judicial powers and perhaps legislative powers; that he is left to be the sole judge of what shall constitute “adequate ventilation,” “adequate plumbing,” etc., and that the delegation of such powers is in contravention of the constitution of Ohio. We are not inclined to go deeply into this question. It is apparent that rules are laid down in this ordinance for the guidance of the health commissioner in many of the particulars requisite for the conduct of the lawful laundry, and these rules he must obey, and with regard to them it will hardly be contended that this ordinance is unconstitutional. The most that can be said for this contention is that there are some matters, such as “adequate plumbing,” “adequate ventilation,” upon which he passes with either judicial or legislative power. It would be improper for us in the present case to pass upon the validity of all these sections, for even if we found some invalid and in contravention of the constitution, we would not be justified thereby in holding the ordinance as a whole invalid. The doctrine of sustaining the valid part of legislation in spite of what is known as “partial invalidity” of such legislation is too well settled in Ohio for such action upon our part. We are not conceding that the passing on “adequate plumbing” and “adequate ventilation” is the exercise of a power forbidden by the constitution, but even if such concession had been made, we are firmly of the opinion that the provisions of the ordinance granting this power to the health commissioner are not so interwoven into the fabric of the whole ordinance as to be unseparable or that their separation would invalidate or destroy the entire ordinance.

In our view at the present time and for the present case it becomes immaterial that there are or may be some unconstitutional provisions in this ordinance. It would perhaps be surprising if there were none. We are convinced that the ordinance has enough of validity about it, enough of virtue in it to be entitled to a trial. If in carrying out the provisions of this ordinance occasion should arise for individual complaints, there is ample opportunity in a court and elsewhere to adjust such differences without the drastic action sought by plaintiff’s petition.

The demurrer to the petition will be sustained and the cause dismissed at plaintiff’s costs.

Grant and Lawrence, JJ., concur.


author: POLLOCK, J.

text:
    COVENANTS.
    [Harrison (7th) Court of Appeals,
    November 28, 1917.]
    Pollock, Metcalfe and Parr, JJ.
    Ina J. Johnson v. American Gas Co.
    1. Assigns not Necessary to Create Covenant Running With Land.
    The use of the word “assigns” or "heirs and assigns” is not necessary or essential to create a covenant running with the land, and in determining whether a covenant will run with the land the material inquiries are whether the parties intended to impose such burden on the land, and whether it is one that may be imposed consistently with principle and equity.
    2. Nominal Consideration for Pipe Line and Gas for One Fire Covenant Running With Land.
    Where the owner of farm lands grants to a company, its successors and assigns, the right to lay and maintain a pipe line over said farm for the purpose of transporting gas, in consideration of one dollar and that said company will furnish gas free for one fire in the residence of said owner, and said company lays said pipe line, and it and its successors in title maintain the same, and furnishes free gas in said residence to the then owner, and continues to furnish such gas for a number of years to his first and second successor in title, such covenant runs with the land, and the successor to said company will be required to furnish free gas to the successor or successors in title of said land according to the provisions of such contract, so long as the successor of said company continues to use such "tght-of-way to transport gas.

      W. B. Stevens, and Rowland & Pettay, for plaintiff.

      W. L, Handley, for defendant.
   POLLOCK, J.

In November of 1899, John McLandsborough entered into a contract in writing with the Scio Gas Co. by which he granted to said company a right-of-way for a pipe line to convey gas across his farm in North township, this county. Said contract reads as follows:

‘' Right-Of-Way.
“John McLandsborough to the Scio Gas Company.
“Agreement.
“Know all men that I, John McLandsborough, of the county of Harrison and state of Ohio, in consideration of the sum of one dollar to me in hand paid by the Scio Gas Company of Scio, Ohio, do hereby grant to the said the Scio Gas Company, its successors and assigns, the right to. lay and maintain a pipe line for transporting gas across my farm in North township, said county, and described as follows: •
“Said line to be laid in a course and at a place on said farm to be agreed upon by the parties hereunto before the same is laid. The said the Scio Gas Company, its successors and assigns, shall have the right to enter the premises described herein at all times to repair and maintain said gas lines.
“It is further agreed that the Scio Gas Co. is to furnish free gas for one fire in the residence of said John McLands-borough, said John McLandsborough making his own connections with said gas line.
“Also all damages to growing crops and to fence caused by laying and maintaining said gas line shall be paid for by the Scio Gas Company.
“It is further agreed that when the Scio Gas Co. shall-procure more gas that they will furnish free gas for a second fire under the same conditions as above.
“Said gas line shall be buried if so required by John Mc-Landsborough or assigns.”

This contract is signed by the parties, witnessed by two' witnesses and acknowledged before a notary public, and duly recorded as before stated.

In pursuance of the foregoing, said company soon thereafter laid its. line for a considerable distance across said premises, and. from which line the said John McLandsborough constructed a domestic line to his residence upon said premises and gas was furnished as in said contract provided. In 1904,-John McLandsborough died and Seigel McLandsborough, a son, by will took title to said real estate, and said company continued to furnish gas through said domestic line to said residence. In 1911, the Scio Gas Co. sold and assigned said “right-of-way” to the American Gas Company, which continued to furnish gas to said residence. On January 2, 1913, Seigel McLandsborough conveyed said premises to Ina J. McLandsborough, now Ina J. Johnson, the plaintiff herein, and said American Gas Co. continued to furnish gas to said residence until May 26, 1917, when said company disconnected said domestic line and refused longer to furnish gas in said residence, although it and its predecessor had continuously used said right-of-way since the date of said grant and is still using the same. Soon thereafter a petition was filed in the court of common pleas of this county, asking that a mandatory injunction issue requiring said company to again connect said domestic line with said main line and to furnish gas to said residence; to this petition an answer was filed alleging that said contract or “right-of-way” was merely personal in character between the original parties, and that the covenant as to free gas did not run with the land. To the answer a reply was filed denying the averments thereof, and so the issue was made up, trial had and a decree entered granting said mandatory injunction, from which an appeal was taken to this court. The only issue to be determined here is whether or not the agreement to furnish gas in said residence was a covenant running with the land, or merely personal, inuring to the benefit of John McLandsborough only. The subject of “covenants running with the land” has elicited a wide range of discussion in this and many other jurisdictions, and in these discussions it has been a subject of much concern whether a covenant concerning a thing not in esse will under any circumstances inure to the benefit of or bind the assignee, and, also, whether it was necessary to use the word “assigns” or “heirs and assigns” to make a covenant concerning a thing not in'esse run with the land. One of the earliest discussions, and possibly the most notable, is found in Spencer’s Case, 5 Coke 16, and probably no other has attracted more, if quite so much, attention. This was a series of seven resolutions passed by the judges concerning covenants, and which of them run with the land, and which were collateral, and where the assignee should be bound without naming him, and where not, and where lie should not be bound though named, and where not. The first and second of said resolutions are of interest here. The first reads as follows:

“When the covenant extends to a thing in esse, parcel of the demise, the thing to be done by foree of the covenant is quoddamado annexed and appurtenant to the thing demised, and shall go with the land, and shall bind the assignee, although he be not bound by express words; but when the covenant extends to a thing which is not in being at the time of the demise made, it can not be appurtenant or annexed to a thing which hath no being. As if the lessee covenants to repair the houses demised to him during the term, that is parcel of the contract, and extends to the support of the thing demised, and is therefore quoddamado annexed and appurtenant to houses, and shall bind the assignee, although he be not bound expressly by covenant. ’ ’

In the instant case the covenant concerns a thing whieh was not in esse at the time of the demise made, but to be “newly built after” and therefore would seemingly bind the covenantor and not the assignee, for “the law will not annex the covenant to a thing which hath no being; this, however, is the provision of said first resolution only. The seeond resolution reads as follows :

“It was resolved in this case that if the lessee had covenanted for him and his assigns that they would make a new wall upon some part of the thing demised, that, for as much as if is to be done upon the land demised, that it should bind the assignee; for although the covenant doth extend to a thing to be newly made, yet it is to be made upon the thing demised, and the assignee is to take the benefit of it, and therefore shall bind the assignee by express words.”

Recognizing, the inconsistency in the above resolutions, the courts have been gradually abandoning the position that it was necessary to use the word “assigns” to make a covenant concerning a thing not in esse run with the land, and have been coming to regard the intention of the parties, as gathered from the whole instrument, the governing principle, and not the use or meaning of mere technical words. Moreover, it is exceedingly doubtful whether the court so decided in Spencer’s case.

In the English notes to said case in 15 English Ruling Cases, 244, it is observed that anonymous ease in F. Moore, 159, 300, has been identified and approved as a report of the final determination of Spencer’s case. It is there stated that the court held that:

“Notwithstanding that the covenant lacks words (assigns), yet each by the acceptance of the possession has made himself subject to all covenants concerning the land, but not to collateral covenants, and covenants of reparation, etc., * •* * are covenants inherent to the land with which the assignee, without special words, shall be charged.”

The foregoing seems all the more likely to have been the court’s conclusion in view of the observations of Chief Baron Pollock, speaking for the court of exchequer in Minshall v. Oakes, 2 Hurlst & N. 793, where it is said:

“The explanation may be that Lord Coke is reporting a variety of arguments and opinions expressed, while Moore gives the ultimate decision.”

Attention is also directed to the fact that the resolutions were never acted on, and that according to Moore the decision was the other way in Smith v. Arnold, 3 Salk. 4.

Therefore, so far as Spencer’s case is concerned, and it is the notable one in all early jurisprudence, it seems safe to say that the use of “assigns” as a technical word is not now nor never has been essential to the running of a covenant with the land at common law.

It is indeed difficult to reconcile the first and second resolutions in Spencer’s case, and the conclusion must be that many of the courts have practically repudiated the first by following the second; and that the word “assigns” is not necessary to make a covenant concerning a thing not in esse run with the land, and so it is held in Sexauer v. Wilson, 136 Iowa 357 [113 N. W. 941; 14 L. R. A. (N. S.) 185; 15 Ann. Cas. 54].; the first paragraph of the syllabus of which reads as follows:

“The use of ‘assigns’ as a technical word has never been essential to the running of a covenant with the land at common law.”

The foregoing is in point with the instant ease and is somewhat similar as to facts. The covenant related to a division fence which was not shown by the testimony to be in existence at the time of the execution of the deed, and yet it was held that the word “assigns” was not necessary to create a covenant running with the land.

Again in the case Doty v. Chattanooga Union Ry. 103 Tenn. 564 [53 S. W. 944; 48 L. R. A. 160], it is held that:

“A deed conveying a right-of-way for a railroad in consideration of five dollars and an agreement by the grantee to run daily passenger trains on and along the right-of-way, with provision that, if it is abandoned for non-user for six months, title shall revert to the grantor, contains a covenant running with the land as to the running of trains, though the road was not built when the deed was made, and the word ‘assignee’ is not used; so that a purchaser of the road is liable thereon for a breach subsequent to the purchase, though there had been breach of the covenant before the transfer.”

The foregoing is similar in principle with-the case at bar and somewhat similar as to facts. And holding squarely to the same effect is Denman v. Prince, 40 Barbours 213; Teachout v. Capital Lodge I. O. O. F. 104 N. W. 440; Norman v. Wells, 17 Wend. 149, 150, 153; Beddoe’s Ex’r v. Wadsworth, 21 Wend. 120; Bally v. Wells, 3 Wils. 25.; and in Masury v. Southworth 9 Ohio St. 341, it is held in the third paragraph of the syllabus as follows:

“3. When such a covenant to insure has for its object a building to be erected after the date of the lease, but which, when erected, is to be used by the lessee, and is an essential ingredient in the agreement of the parties for the creation of the estate, it is not indispensable to make such a covenant run with the land that ‘assignees’ should be expressly named; but the covenant being one which may be annexed to the estate, and run with the land, equivalent words, or a clear intent shown by the whole instrument, may suffice. ’ ’

The foregoing is supported by the later case of Huston v. Railway, 21 Ohio St. 236. This was an action to appropriate private property for railroad purposes; after a jury had been impaneled all claim for damages for fencing was withdrawn from the consideration of the jury, upon the agreement of the company to make convenient crossings and forever maintain fences along said right-of-way across said premises. The land owner conveyed said property to another who, in turn, conveyed to still another, and said railroad was sold to another company, which refused to maintain said fences. The court held in the second paragraph of the syllabus .-

“2. It is an agreement which runs with the land, so as to be binding between the assignees or grantees of both the parties thereto,” and yet the word “assigns” or “heirs and assigns” was not used.

Numerous other cases might be cited in support of the general proposition, and while it is true that some courts have elected to follow the first resolution in Spencer’s ease, yet a greater number by far have elected to follow the second.

In determining whether a covenant runs with the land the material inquiries are:

1. Whether the parties meant to charge the land, and

2. Whether the burden is one that can be imposed consistently with policy and principle.

And it is so held in the above case of Sexauer v. Wilson, supra, second paragraph of the syllabus.

• In the instant ease John McLandsborough received but one, dollar consideration' for said right-of-way; beyond question the real consideration was the gas to be furnished for one fire and two if more gas ivas procured, and this “in the residence of John McLandsborough. ’ ’ Not to or for John McLandsborough, but in the residence; therefore, the name “John McLandsborough” is descriptive of the residence in which the gas was to be furnished., Wherefore, the contention that John McLandsborough being dead, the obligation was discharged, is not justified.

The intention of the parties in the instant case as disclosed by their conduct is of some value here in construing their contract; the gas'was furnished by the Ohio Gas Co. in said residence until the death of John McLandsborough; after his decease to his son Seigel; then by the American Gas Company the successor of the Ohio Gas Company, to Seigel and later to Ina J. McLandsborough Johnson, and until last May without a question; the parties so construed this contract themselves and the ease of Mosier v. Parry, 60 Ohio St. 388, is applicable. The first paragraph of the syllabus reads as follows :

“1. Where the language of a contract is of doubtful im-jjort, it is proper to ascertain the circumstances which surrounded the parties at the time it was made, the object intended to be accomplished, and the construction which the acts of the parties show they gave to their agreement, in order to give proper construction to the words they have used in the instrument, and to determine its legal effect.”

Likewise the case of Kling v. Bordner, 65 Ohio St. 86, is well in point. Also New Pittsburg Coal Co. v. New York Coal Co. 31 O. C. C. 458 (12 N. S. 465), the second paragraph of the syllabus of which reads as follows:

“Evidence showing the practical construction which either party has placed upon a coal mining contract and the acquiescence therein by the other party, may be considered for the purpose of aiding in its proper construction.”

In harmony with the foregoing is Methodist Episc. Church Soc. v. Ashtabula Water Co. 10 Circ. Dec. 648, and another case worthy of notice in this connection is Southern Ry. Trus. v. Porter, 22 Dec. 747 (12 N. S. 353). Resting the interpretation of the contract upon the conduct of the parties it is conclusively shown that they understood the covenant as to free gas to be one running with the land.

Second. Is the burden one that can be imposed consistently with policy and principle ? As above observed the pecuniary consideration for said “right-of-way” was one dollar. It could not be successfully maintained for a moment that this within itself, was a full and fair consideration for the enjoyment of said right by said company or its successors and assigns so long as they might care to use it. In fact, the intention as gathered from said contract is exactly to the contrary, because the covenant as to free gas is inserted, which no doubt was then recognized by all parties as the real consideration. The one dollar, being merely nominal, negatives the theory that it was the principal consideration or that it was so considered by the parties, whose conduct clearly indicates that they understood it to be a covenant running with the land. And so it is observed by Welch, C. J., speaking for the court in the above case of Huston v. Railway, supra, beginning at page 246, as follows:

“Does the contract run with the land ? Undoubtedly it does. It was an agreement to erect structures upon the land appropriated, and to keep them up so long as that was enjoyed. ’ ’

That is to say, that so long as the right-of-way was used or enjoyed the fences were to be maintained. It is also provided jn said agreement that the Scio Gas Co., its successors and assigns shall have the l’ight to enter said premises at all times.to repair and maintain said gas lines; thereby all the rights granted originally to the Ohio Gas Co. were saved to its successors and assigns; why not likewise to the owner of the freehold, which carries the burden of the easement and which the gas company is insisting it shall continue to carry? It is only fair and reasonable that free gas be furnished in said residence so long as said right-of-way is enjoyed. And such obligation may be consistently imposed upon the defendant company or its assigns while it-continues to exercise such right. When the defendant Company purchased said “right-of-way” it necessarily acquired it subject to all the conditions imposed and by its acceptance of the contract was bound by' the conditions thereof; and so it is held in Hickey v. Railway, 51 Ohio St. 40, the first paragraph of the syllabus reading as follows:

“1. That the grantee, by accepting the deed, will be deemed to have entered into an express undertaking to perform the condition contained in the deed, and such undertaking will run with the land, and become obligatory upon a subsequent owner by purchase from the grantee of the company. ’ ’

Likewise it is held in Lake Erie & W. Ry. v. Priest, 31 N. E. 77, and so it is held in Anonymous, F. Mo. 159, 300 (Eng.), as above quoted, and where it is said that acceptance of possession makes one liable for all covenants except collateral.

The defendant company knew or is charged with knowledge of this covenant relating to free gas, because said contract is a matter of record in this county (Lease Record 11, pp. 113, 114), and it was the purchaser of said right-of-way from the Ohio Gas Co.

In 11 Cyc. 1080, there is a helpful discussion of “covenants running with the land” in which it is observed :

“In order that a covenant may run with the land, that is, that its benefit or obligation may pass with the ownership, it must respect the thing granted or demised, and the act covenanted to be done or omitted must concern the land or estate conveyed.”

Further discussion will be found at pages 1051 and 1081. The instant case comes well within the above definition.

Further discussion is superfluous here, in view of the fact that for eighteen years free gas was furnished in the said John McLandsborough residence by the Scio Gas Co. and its successor, the defendant here, during the occupancy of John Mc-Landsborough and that of his son, and until recently that of his daughter; the defendant company took said right-of-way with a full knowledge of the conditions; it is still using it and must be bound thereby. The word “assigns” is not necessary or essential in order to make a covenant run with the land, and judgment must therefore be entered for plaintiff,

Farr, J., concurs.


author: KUNKLE, J.

text:
    PRINCIPAL AND SURETIES.
    [Franklin (2nd) Court of Appeals,
    April 1, 1916.]
    Ferneding, Kunkle and Allread, JJ.
    Timothy S. Hogan, Atty.-Gen. v. Empire State Surety Company, a Corporation, et al.
    Deposit of Foreign Indemnity Company Subject to Claims of Creditors of Contractors Regardless of Place of Execution of Contract or Bond.
    Under act of congress of February 24, 1905, extending the liability of a surety company upon contractors’ bonds to creditors for material and labor under his contract, fixing jurisdiction for enforcement of the rights of such creditors at the place where the contract is to be performed, taken in connection with Sec. 9610 G. C., the evident purpose of which is to protect rights growing out of contracts so covered, the deposit of a foreign Indemnity company, made with the superintendent of insurance as a condition of doing business within this state, must be held to inure to the benefit of creditors for labor and material under contracts to be performed within the state and covered by a bond of such company, notwithstanding the contract and the bond guaranteeing its performance were executed outside of the state.
    Demurrer.

      M. J. Wright and Booth, Keating, Peters & Pomerene, for the insurance department of the state of New York.

      Tolies, Hogseit, Ginn & Morley, Hughes & Tripplehorn, Bussell K. Bedgood, Cable & Cable, Mackenzie & Weadock, Ralph Mackenzie, C. J. Brotherton and Paul T. La/ndis, for in-terveners.
   KUNKLE, J.

This is an action wherein Timothy S. Hogan as attorney-general brought suit under Sec. 641 G. C. to determine the rights of all persons claiming an interest in and to a certain deposit of $50,000.00 made by Empire State Surety Co., a New York corporation, with the superintendent of insurance of the state of Ohio, in order to obtain the right to transact the business of indemnifying employers and others in the state of Ohio.

Certain parties intervened claiming to be creditors of Mark P. "Wells, a contractor under the United States government for the construction, extension, remodelling and repair of a postoffice building at Lima, Ohio, and that said Empire State Surety Co. had become surety for said Mark P. Wells upon a bond given to the United States government in pursuance to an act of congress approved February 24, 1905, which said bond was, among other things, conditioned that said Mark P. Wells should promptly make all payments to persons supplying him with labor and material in the prosecution of the work contemplated in said contract.

Some of the intervening creditors, among whom was Grainger & Co. reduced their claims to judgment in an action in the United States district court in the western division of the northern district of Ohio.

To the intervening cross petitions Frank Hasbrouck, superintendent of insurance of the state of New York and Frederic G. Dunham, special deputy superintendent of insurance of the state of New York, filed a joint answer claiming the right to receive and administer the said fund of $50,000.00.

Grainger & Co. demui’red separately to each paragraph and defense of the joint answer of said Hasbrouch and Dunham.

This demurrer was sustained by the lower court. Final judgment was rendered and thereupon the case was appealed to this court.

We have carefully considered the authorities cited in the very exhaustive briefs which have been filed by counsel.

We shall not attempt to discuss or distinguish in detail the authorities so cited, but will merely announce the conclusion at which we have arrived after a careful study of such authorities.

The federal statute referred to by counsel extends the liability of the surety upon a contractor’s bond to the payment of the claims of the creditors of the contractor for labor and material furnished under the principal contract. In view of the federal statute and the liability thereby created, such creditors of the principal contractor would become policy holders within the purview of Sec. 9510 G. C.

It is evident, however, that the deposit provided for in See. 9510 was intended to be held for the benefit of the policy holders whose rights grow out of contracts made and business transacted within the state of Ohio.

It is true the contract between Wells and the United States government for the improvement of the postoffice building at Lima and the contract of Empire Surety Co. guaranteeing the performance thereof were, according to the averments of the said answer executed outside the state of Ohio.

These contracts were, however, to be performed within the state of Ohio and the parties contemplated that the contracts for labor and material would be performed within the state of Ohio.

The federal act extending liability of the surety, upon the contractor’s bond, to the creditors of the principal contractor for material and labor under the principal contract fixes the jurisdiction over the enforcement of the rights of the creditors of the place where the contract is to be performed.

The fact that the United States government has control over the postoffice site in question by cession from the state of Ohio does not supersede the jurisdiction of the state over the business involved in the performance of the contracts for labor and material.

Under this situation, we think the contract of Wells with the Empire State Surety Co. should be regarded as the transaction of business in Ohio and that the creditors of Wells growing out of the performance of the contract in question are entitled to the benefit of the deposit made by the Empire State Surety Co. under the provisions of Secs. .9510 and 641 G-. C.

We have carefully considered all of the questions discussed by counsel for the insurance department of the state of New York in their brief, but are of opinion that the demurrer to the answer of Hasbrouch and Dunham should be sustained.

Demurrer sustained.

Ferneding and Allread, JJ., concur.


author: KINKADE, J.

text:
    CRIMINAL LAW — HOMICIDE.
    [Wood (6th) Court of Appeals,
    November 10, 1915.]
    Kiu.kade, Richards and Chittenden, JJ.
    Charles Neiswender v. State of Ohio.
    1. Jury's Attention Directed to Absence of Motive Shown In Homicide Prosecution.
    In a prosecution for homicide, the absence of any evidence tending to show a motive for the alleged crime is a circumstance to which the attention of the jury should be directed by the court with the instruction that this fact should be considered in connection with the evidence and other circumstances of the case in determining the guilt or innocence of the accused.
    2. Substance of Special Written Instructions Before Argument Incorporated in General Charge in Homicide Case.
    While the statute relative to the giving of special written instructions to the jury before argument applies to civil cases only, the substance of such a reguest, where embodying a correct statement of the law, should be incorporated in the general charge of the court.
    3. Statements of Accused Admitting Homicide for Jury not To Be Designated as Confessions.
    Where it is claimed that statements made by the accused are in a measure admissions of his guilt, the trial judge should leave to the jury the question whether such statements were made, and if made whether they amounted to an admission of guilt, care being taken not to designate the statements as a confession of guilt.
    Error.

      B. F. James and Earl D. Bloom, for plaintiff in error.

      E. K. Solether, Pros. Atty., and Charles S. Hatfield, for defendant in. error.
   KINKADE, J.

The plaintiff in error was charged, in the indictment r ;- turned by the grand jury, with having committed the crime of murder in the second degree by the killing of his father-in-law, William Edward Dindore, on the morning of December 13,1913.

A plea in abatement was filed by the accused and met by a demurrer on the part of the state. The demurrer was sustained. After a very careful examination of all that is claimed by the accused in support of this plea we are of the opinion that the action of the trial court in sustaining the demurrer was correct.

After a very long trial the jury returned a verdict finding 1he plaintiff in error guilty of manslaughter under the indictment mentioned. Motion for a new trial was overruled and judgment and sentence of the court followed pursuant to the verdict. A very large number of errors are assigned as necessitating a reversal of this judgment.

In the view that we take of the evidence in the case, we think it unnecessary to review in this opinion all of the claimed errors or to even mention more than a few of them specifically. The record embraces several hundred pages of evidence and a very large number of exhibits, including two maps exhibiting the scene of the tragedy and the territory thereabouts.

Over two hundred exceptions were taken during the trial by counsel for the accused with respect to rulings upon evidence, requests to charge and otherwise by the trial judge.

The case was very fully and very ably argued, both orally and in printed briefs, by counsel for the accused and for the state. On account of the great importance of the case we have devoted a large amount of time to the reading and careful study and comparison of the evidence and have read with great care every syllable of evidence in the case and examined all the requests to charge and the general charge and the exhibits.

Speaking of those things that took place at the trial to which our attention has been called by the plaintiff in error and which we deem of sufficient importance to justify special mention, we refer to request to charge, number 37, presented by counsel for the accused, which reads as follows:

“The court further instructs the jury that when the evidence fails to show any motive to commit the crime charged, on the part of the accused, this is a circumstance in favor of his innocence. And in this case if the jury find, upon careful examination of all the evidence, that it fails to show any motive, on the part of the accused, to commit the crime charged against him, then this is a circumstance which the jury ought to consider in connection with the other evidence in the case in making np their verdict. ’ ’

This request was refused by the trial judge and an exception noted. We think this is a correct statement of the law and that this, or the substance of this request, should have been embodied in the general charge, and that the omission so to do was error prejudicial to the accused.

All of the requests to charge offered by counsel for the accused were asked to be given before argument. The statute relative to giving, before argument, written requests presented by counsel, applies to civil eases and not to criminal cases. Umbenhauer v. State, 2 Circ. Dec. 606 (4 R. 378), affirmed by the Supreme Court, without report, March 4, 1890, 23 Bull. 176.

This decision has been several times followed by this court. However, we think the request, presented as it was prior to the general charge of the court, should have been covered thereby as stated, and we are of the opinion that the language of the court found on page 7 of the general charge did not sufficiently cover that object. It was conceded in argument in this court that the record contained no evidence of any motive on the part of the accused to commit the crime- charged. That being true, we think the charge would have been in better form had the court stated the fact to the jury that there was no evidence in the record tending to show any motive, and then have stated to the jury what the law was in a criminal case notwithstanding the fact that there was no evidence tending to show motive.

In view of the fact that sixty-six requests to charge were presented in this case we think the attention of counsel should be called to the case of American Steel Packing Co. v. Conkle, 86 Ohio St. 117 [99 N. E. 89]. In any criminal ease a very few requests, carefully drawn, should be amply sufficient to cover every possible question of importance in the case, and the giving to the jury of numerous requests, in addition to the general chai’ge, puts an unwarranted element of confusion into the minds of the jury. We heartily approve of the rule laid down by the Supreme Court in the case cited.

We find in tbe general charge of tbe court on page 13 tbe following language:

“Tbe court further instructs tbe jury that tbe confessions of tbe accused out of court are a doubtful species of evidence and should be acted upon by tbe jury with great caution, and unless they are supported by some other evidence tending to show that tbe accused committed tbe crime, they are rarely sufficient to warrant a conviction. But confessions, however, may and should be taken into account by you with tbe other evidence in tbe case, and observing the caution of the court as to tbe effect of such evidence relating to confessions, you should give it such weight as you think it is entitled to receive.”

Evidence was offered on behalf of tbe accused tending to show that no confession bad been made by tbe accused to' one Richard Smith. Tbe court very properly excluded this evidence, on tbe motion of counsel for tbe state, for tbe reason that no evidence had been offered by the state that any such confession ever took place. In tbe argument of tbe case in this court it was stated by counsel for the state that they did not claim, either in the trial court or in this court, that any confession had been made by the accused. In view of this position taken by the state, and the state of the evidence in this record, we think the language of the court quoted from the general charge was not an accurate statement of the law and that the court was not justified in using the word confession in the relation there used, which was susceptible of being understood by the jury as a statement from the court, that the court was of the opinion that there was some evidence in the case of some kind of a confession.

Quoting from 3 Encyclopedia of Evidence, 297 and 298, we think this is the correct statement of the law:

“A confession is a voluntary admission of guilt of a criminal offense. They are distinguished from admissions in civil cases and from admissions of fact in criminal cases tending to prove the offense charged but not amounting to a confession of guilt. To constitute a declaration a confession within the legal meaning of the term, it must amount to a confession of the crime charged or participation in such crime as distinguished from the admissions or other statements tending to prove guilt or innocence or of facts from which, taken together, guilt is directly dedueible. ’ ’

If it be claimed that statements by the accused are in a measure an admission of his guilt or are indicative of his guilt, the trial judge, where the evidence is in dispute as to whether the statements were made and if made whether they amount to a confession, should leave the question to the jury as to whether the statements were made, and also the question as to what, if made, their effect was in establishing the issue in dispute, and the trial judge should not designate such statements, if any there be, as a confession.

In some of the requests to charge and at more than one place in the general charge the jury were instructed that each juror must be satisfied from the evidence, beyond a reasonable doubt, in order to find the accused guilty, or else the accused must be acquitted. This form of instruction was disapproved by the Supreme Court in the case of Davis v. State, 63 Ohio St. 173 [57 N. E. 1099], where it is said:

‘ ‘ The proper charge to a jury in a criminal ease is, that the jury and not that each juror, should be convinced beyond a reasonable doubt of the guilt of the accused before finding him guilty.”

The charge as given in this respect was, of course, not prejudicial to the defendant, but we call attention to the matter in view of our disposition of the case.

It was claimed on the trial by counsel for the accused that he had the right to show that when he was visited by various county officers and others in connection with investigations made about the homicide, that he then disclosed to them all that he knew on the subject, and evidence was offered tending to show the fact of such disclosures. This evidence was rejected by the court on motion of the state and an exception saved. Evidently the ruling of the court was based upon the fact that no evidence had been offered by the state tending to show any refusal of the accused to answer inquiries put to him or give such information as was within his possession with respect to the homicide, and, consequently, the state making no such claim against Mm, there was no propriety in Ms showing that he had not so refused. It is entirely clear that if the accused, in the absence of any such evidence as I have indicated on behalf of the state, were permitted to travel over numerous interviews had with other persons and show in detail the inquiries that were made of him and that he answered them all, etc., an issue involving almost an endless amount of time would be brought into the case. The defendant being attended by the presumption of innocence and only required to answer that wMch the evidence of the state tended to establish as wrong conduct on his part, we think the action of the trial court was correct in excluding the character of evidence referred to.

The accused was inquired of by Ms counsel whether he had ever been in trouble before. The question was objected to and excluded by the court and an exception saved. We think the question was too general in this form and that the action of the trial court with respect to it was correct. We are not meaning by this to say that the accused might not have been inquired of by his own counsel as to whether he had ever been guilty oE any breach of the peace, or whether he had ever been convicted in any court as a violator of the law. It was also entirely proper for the accused, if he saw fit to do so, to show by competent proof what his general reputation was in the neighborhood in which he resided, with respect to whether he was a peaceable and law-abiding citizen or not, and this might be shown by the accused whether the state had offered any evidence touching these points or not. What has been said in this respect rests upon the well known principle that a man of good reputation in any respect is less likely to have violated the law in that respect than one of vicious tendencies along the same lines.

We call attention to one feature of the trial which is not claimed by the plaintiff in error to present prejudicial error against him but which we think is worthy of comment, and that is the letter from the deceased, Edward Dindore, to his son, every page of which was identified by the evidence of the son as being in the handwriting of Edward Dindore and was said to have been l’eceived, in due course of mail, sealed up, by the son to whom it was addressed. If the state had no evidence to present concerning this letter except what the record discloses they did present, then manifestly the letter was clearly incompetent.

The ruling of the court excluded the letter and the showing made by the state with.respect to it was unquestionably correct, but it does not follow in many instances that no prejudice arises to the party against whom a piece of evidence is tendered simply by reason of the fact that it is excluded from the jury on his motion. The jury are not acquainted with the technical rules of evidence and when a witness is offered on one side of a trial who is clearly disqualified to testify, or when a piece of documentary evidence is offered that is clearly incompetent as the record stands, the presentation of the witness or the document, associated with the necessary objection from the other side, may well raise in the minds of some of the jury at least a suspicion that the witness or the document offered would have disclosed something detrimental to the party objecting had the objection not been made. It was not contended in this court in argument that the letter in this case was competent. It was only hinted that had it been admitted it might have furnished some evidence of motive on the part of the accused. We think before the letter was offered in the presence of the jury, at least, counsel by his professional statement should have made it reasonably certain to the trial judge that further proof showing the competency of this letter would be offered in due time. In view of the importance in criminal trials that attaches to the presence or the absence of motive as an incident of the crime, and particularly in cases where the evidence is largely circumstantial, we think care should be observed in offering evidence of doubtful competency to see that no situation is presented that is likely to produce an unwarranted impression upon the minds of the jurors. Very wide latitude must rest with the trial court in matters of this character, and we are not indicating any particular rule that should he followed. All that we mean to say is that in respect to the letter in question we think something further should have come from the counsel offering it with respect to additional evidence to establish its competency before it was offered in tbe ease. What has been said with respect to this letter is said without any knowledge on the part of this court of the contents of the letter, as it is not attached to the bill of exceptions.

Our attention is called by counsel for plaintiff in error to several rulings of the court on motions to withdraw from the consideration of the jury evidence that had been admitted without objection, these rulings being claimed as errors. We think it is sufficient to say, in general, covering all instances of this bind in the record, that it is not correct practice for counsel to permit evidence claimed by him to be incompetent to be placed before the jury without objection and then move the court to strike it out. When evidence is believed to be incompetent on any ground and counsel wish to have it excluded from the consideration of the jury, the proper practice is to object to it when it is offered, and save an exception there to the ruling of the court if the ruling is not satisfactory to counsel.

Wre are not, of course, meaning by what is said in this respect, to cover instances where witnesses answer before counsel have an opportunity to object. In such case the only course open to counsel is to move to strike out the incompetent answer that has thus come in.

The conclusion that we have reached with respect to the evidence makes 'it wholly unnecessary to discuss all of the grounds stated in the motion for a new trial.

And lastly, we come to the most important question in the case, and that is the sufficiency of the evidence to sustain the verdict returned and the judgment entered thereon.

It has long been the uniform practice of this court when reversing a ease on the ground that it is not sustained by sufficient evidence to omit entirely any detailed discussion of the evidence, and this for the reason that on a re-trial the evidence may not be the same and a discussion of the evidence by the reviewing court might give to one side or the other an unfair advantage in the re-trial of the ease. Therefore, although we have spent several days in the examination of this evidence, and although it would be perfectly easy at this time to discuss the whole record in this respect in detail, for the reasons stated, and for the further reason that such discussion would unwarrantably prolong this opinion, I will state only the conclusion w* have unanimously reached, and that is, that the verdict and judgment are not sustained by sufficient evidence.

We find no other errors in the record sufficiently prejudicial to the accused to justify a reversal, but for the error of the court in refusing to give, in substance, in the charge to the jury the matter contained in request number thirty-seven, here-inbefore quoted, and in refusing to grant a new trial to the plaintiff in error on the ground that the verdict and judgment were not sustained by sufficient evidence, the judgment of the court of common pleas will be reversed and the cause remanded for new trial.

Richards and Qhittenden, JJ., concur.


author: By the COURT.

text:
    CORPORATIONS — ESTOPPEL.
    [Hamilton (1st) Court of Appeals,
    March 11, 1918.]
    Jones, Gorman and Hamilton, JJ.

      Jerome Strauss v. Imperial Motor Car Co.
    1. Ultra Vires Not Available as Defense In Action Against a Company for Recovery of Indebtedness Incurred in Purchase of Its Own Stock.
    The prohibition against a corporation acquiring its own stock, except in satisfaction of a debt or to save it from loss, does not justify the defense of ultra vires in an action against the company for foreclosure of a mortgage securing notes given by the company in payment for a block of its own stock, where to sustain such a defense would confer an undeserved benefit upon the owner of the great bulk of the stock of the company.
    2. Estoppel Against Virtual Owner of Company Deriving a Benefit' by Using Alias of Company.
    Under such circumstances the virtual owner of the company is estopped from using its alias to set up a plea of ultra vires against the notes and mortgage.

      Murray Seasongood, for plaintiff.

      Johnson & Levy, for defendant.

      Motion to certify overruled by Supreme Court, May 28, 1918, Imperial Motor Car Co. v. Strauss, 63 Bull. 184.

   By the COURT.

This is an action for the foreclosure of a mortgage on real estate and the collection of a debt which represents a consideration of one hundred shares of capital stock purchased by the mortgagor in its own company.

The defense of ultra vires is made, and by cross petition the company seeks to have the notes and mortgage canceled, and offers to return to plaintiff the stock so purchased.

It is undoubtedly the law as sustained by the leading authorities that a corporation can not purchase or acquire its own stock except in satisfaction of a debt due to it, or under other exceptional circumstances to save the company from loss.

If the transfer of this stock of Jerome Strauss and the making of the notes and mortgage to him by the Imperial Motor Car Company had been challenged promptly by the company itself or its creditors or stockholders, it is questionable whether it could have been sustained; but the situation as presented to the court shows that at the present time John F. Luhrman is not only the president of the Imperial Motor Car Company, but is the owner of almost the entire stock of said company, it being claimed that he owns 109-114ths of the entire stock and that the outstanding shares are held by others for purposes of organization.

The mortgage and notes in question were executed March 4,1912. The contract for the purchase of 164 shares of stock by John F. Luhrman and Albert H. Luhrman from Harry C. Strauss was made April 4; 1918, and it was based upon a guaranty that said 164 shares constituted a majority of the capital stock of which 320 shares were then outstanding, and that the mortgage indebtedness of said corporation amounted to $22,800 which, as shown by the statements of the expert accountant made at the time for the purposes of this sale, included the mortgage now questioned.

Said contract further contained a provision that—

"any objection or exception to the condition of the company as being different from the condition set forth in said accountant’s report shall be set up within thirty (30) days or be forever barred.”

It appears that no question was raised as to the validity of these notes and mortgages until the filing of this suit thereon, but on the contrary that the interest Avas regularly paid thereon by the company under Luhrman’s control on March 5, 1913, March 5, 1914, and March 5, 1915; that accountant’s statements were taken at the end of the years 1912, 1913, 1914 and 1915 respectively, which included among the liabilities of the’ company this mortgage of $10,000 to Jerome Strauss; that the capital stock of the company was increased from $32,000 to $34,300 by the issue of $2,300 additional stock for the purchase of the assets of the Cole Motor Sales Company.

The tender back therefore of 100 shares of stock under the present condition of the company is not an offer to put the plaintiff in the same position that he occupied at the time of the making of the mortgage.

So far as Mr. John F. Luhrman, the real party in interest, is concerned, his purchase of the stock, and his whole connection Avith the Imperial Motor Sales Company is based upon the validity of the transaction between Jerome Strauss and the company and the existence of the notes and mortgage as its valid debts and obligations.

It would confer an unexpected and undeserved benefit upon Mr. Luhrman, as the present holder of practically the entire stock in the company to hold this mortgage and the notes secured by is to be invalid. Mr. Luhrman is estopped from using the alias of the corporation to set up a plea of ultra vires as against the notes and mortgage. State v. Standard Oil Co. 49 Ohio St. 137 [30 N. E. 279; 15 L. R. A. 145; 34 Am. St. 541]; Smith v. Gowan, 38 O. A. & C. 575 (18 N. S. 99, 103); Old Dominion Copper M. & S. Co. v. Lewisohn, 210 U. S. 206 [28 Sup. Ct. 634]; Norma Mining Co. v. Mackay, 241 Fed. 000.

The notes and mortgage must therefore be upheld as valid under the circumstances of this case, and a decree of foreclosure may be taken in favor of plaintiff.

Jones, Gorman and Hamilton, JJ., concur.