author: King, J.

text:
    (Sixth Circuit — Sandusky Co., O, Cicruit Court
    — May Term, 1897)
    Before Haynes, King and Parker, JJ.
    THE OHIO OIL CO., v. CHARLES HURLBURT et. al

      Oil and Gas-Lease — Forfeiture—Duty of lessee to develop—
    Where a land-owner gives a lease for all the oil and gas under his land, the lease providing that the lessee should pay $160.00 a year for every year he failed to operate under the lease, without other provisions as to forfeiture, it is the duty of the- lessee not to delay the development and operations under the lease for any unreasonable length of time, and if there is unreasonable delay., the lessor may insist that the lessee either sink oil wells, or aban- ■ don the premises, notwithstanding the payment of $160.00 every year. But if the lessor fails to avail himself of such unreasonable delay to forfeit the lease until after the lessee has again, with his consent, commenced operation's and sunk wells on the land, the right of the lessor to insist on a forfeiture for the previous unreasonable delay, is waived.
    Appeal from the Common Pleas Court of Sandusky county.
   King, J.

This action was brought in the court of common pleas, and- after trial and judgment, was appealed to this court And has been heard by us. The action was brought by the Ohio Oil Company to enjoin Peters as the owner of certain lands, and the other defendants who claim an interest in the premises by the way of a lease, from interfering with the plaintiff in operating the premises described for oil and gas under a lease previously executed in it, by Peters and the defendants other than Peters claiming the same right.

The action was commenced on June 16th, 1897, and the lease to plaintiff under which it claimed in this action, was executed on the 1.1th day of April, 1889, the lease providing that in consideration of $160.00, in hand paid, the receipt whereof was acknowledged by A. Peters and his wife, the owners, he,or the first party therein named, did thereby grant unto Wm. Fleming, of Oil City, Pa., second party, his heirs and assigns, all the oil and gas in and under the following described premises, together with the right to enter thereon at all times for the purpose of drilling and operating for oil, gas or water. And then followed the usual form, excepting and reserving, however, to first party, the one-eighth part of all the oil produced and saved from said premises, to be delivered in the pipe line with which second party may connect his well, the land in question being 63 and ro-0 acres, more or less, situated in this county.

Then there is a prevision relating to gas wells, which is not in contention, and then follows'this: “Incase no well is completed within one year from the date, then this grant shall become null and void, unless second party shall pay to said first party, $160.00 in advance, for each year such completion it delayed.” Then follows a clause relating to the right of second party to the use of gas, oil or water, to run its machinery for operating said wells, and the right to remove its property; a provision that the location of wells should be mutual, and that all conditions of the agreement between the parties should extend to the heirs, executors and assigns; and then follows the execution by the parties. The lease in question, then, granted all of the oil and gasto be found under these premises to the party of the second part, with a provision that in case no well shall be completed within a year, the grant should become null and void, unless the second party should pay the first party $160.00 a year in advance, for each year the completion was delayed. No other provisions of forfeiture are contained in the lease. The lease itself, recited $160.00 for the right to enter at any time during the year from the execution of the contract so paid and accepted by the first party. I will say here, that the defendants, other than Peters, claimed an interest in these premises by virtue of a lease of a similar kind, to which they and Peters are parties, executed on the 13th day of January, 1897,three days before the commencement of this action by the Ohio Oil Company. No claim is' made in the case by any of the defendants, that anything occurred between the 13th and 16th of January,which would authorize Mr. Peters, or any of.the defendants, from insisting upon the forfeiture of this lease, and therefore the de. fendants, other than Peters, have no interest to assert here under the ground of forfeiture,and.cannot assert any ground of forfeiture existing prior to the 13th day of January, 1897. That has been held by this court in the case of Ohio Oil Company v. Wichman; it is also held in other decisions, so that the rights of other parties must be determined as between the Ohio Oil Company and Mr. Peters alone, who was the owner of the property and in possession of all that he had not granted from the time of the execution of this lease, up to the 13th of January, 1893. And now it is insisted by Mr. Peters, who has filed an answer herein, that this lease was forfeited, and it is claimed upon the hearing of the case, that it was forfeited by reason of the fact that the plaintiff delayed his operation under the lease. The facts with reference to the delay, are these: The lease was executed, as I have stated, April 11th, 1889. The first well was completed December 4th, 1894, nearly five years there-, after. The second well was completed July 8th,1896, nineteen months after the first well. The third well was completed February 16th,1897,or after this action was commenced; but' the proof in the case indicates that the third well was commenced by plaintiff about a week before he filed this', petition against Peters and other defendants,and that it was: commenced before the making of the lease from Peters to the other defendants. The lease, we have seen,provided as ground of forfeiture, 'that if the defendants should fail to-complete one well within one year from the date of the contract, it should be null and void, unless they should pay $160.00 in advance for each year the delay was continued. They paid, as I have said,$160 at the execution of the lease, and "they paid thereafter, $160.00 for each and every year there was a delay, up to and including the 11th day of April, 1895, about four months after the first well was put down. They had paid undoubtedly $160 at the beginning of that year, and it covered the year ending April 11th, 1895; and the money had been received and accepted by Mr. Peters, and no complaint was made up to or prior to December, 1894, when the first well was completed, of delay. It is alleged in his answer, that in 1891, about two years after the execution of this lease,and three years before the putting down of the first weU, the plaintiff and others having leases and interests in surrounding property, were proceeding to develop it and to extract the oil from the ground,and which, of necessity,extracted some of the oil from the premises; but as I have said,he,after and during that time and until April 11th, 1895, accepted the payment of the rental which the contract provides should be paid at the option of the second party,to-wit,the plaintiff, for delay in the operation of these premises under the lease. The delay up to 1894 may have been unreasonable, and if Mr. Peters had undertaken to avail himself of that delay and to insist upon sinking oil wells or abandoning the premises--if they had not obeyed his notice and put down wells, it is quite likely he might have established a forfeiture of the rights of the lessees under this contract; but that he did not do; he made no complaint of it. There is no evidence to indicate that he complained at the time, but he did receive the money that the contract provides should be paid, as the consideration for the right of the plaintiff to delay operations under the lease. This lease has no limitations in it in.regard to time; it is different from most leases in that respect. It simply provides that the owner of the property has granted and leased all the oil and gas under the premises, and that the consideration for it is, that the defendants shall proceed to operate;and under the construction that is given to that clause in the lease by the court, it might proceed with reasonable diligence to operate the lease, or, in case it did not see fit to operate, should pay in advance, $160.00 a year,and that part of the contract was fulfilled by the Oil Oo., up to April, 1895, and its payments W3re accepted by Peters for this delay. Now, the well completed December 7th, 1894, did not prove to be a paying well. Indications of oil were present, but the amount of oil secured from the well was very small. The proof shows it was registered in the pipé line about ninety-six barrels in a year and a half,and within the observation of everybody who knows anything about this business, that would not bé a profitable oil well, nor was there any pretense of operating it as an oil well for a good part of the eighteen months, nor was there any payment of additional $160.00 a year after April 11th, 1895, and between 1895 and 1896 there elapsed nearly a year and a half after the rental had been paid, and more than a year and a half after the first well had been put down which had proved to be an unprofitable well, and a reasonable time, it is certain, had elapsed in which to sink another well. It is likely that Mr. Peters had the right long before July, 1896, to insist upon the fulfillment of this contract in the development of this property in securing the product of oil from underneath the premises; but Mr.Peters did not do that,nor did be insist upon the payment of the rent. In Feburary, 1895, a month or so after this first well had been put down and proved to be a failure, he did speak to the agent of the Oil Co. and say to him he wanted him to put down more wells. Something was said,I thinK, about this well not having proven successful,and he wanted another well put down,and the agent of the Oil Company told him he would do it shortly; but he did not, and therefore the parties remained in the same situation,and nothing further was said about it. Now, as I have said, Peters in that time might have insisted upon the development of this property, and upon the failure to do that, insisted upon the forfeiture of this lease, treated it as a forfeiture, leased it to other parties, brought an action t® eject defendants, or availed himself of any legal remedy to end this lease: but Mr. Peters failed to do that. In June, 1896, the Oil Company put up a derrick, and Mr. Peters was present nearly every day while they were doing that and proceeded to drill an oil well, and he was there every day until completed, and that well was profitable, the well producing somewhere in the neighborhood of twenty to thirty barrels of oil, and has continued in operation, ever since that time. That gave to the Ohio Oil Co. an interest in this property under their lease, and the right to insist at least upon the right which they had acquired under the contract of taking oil from the well as long as it should produce oil. Mr, Peters, after that well had gone into operation and the oil had passed through into the pipe lines, received the proceeds of the one-eighth of the oil he contracted to receive by virtue of this lease, and he received that up to the time of the commencement of this action, and ever since.

On August 3rd, as he fixes the date, he saw Mr. Gordon, or the general agent of the Oil Co. in charge of its business, and requested him to sink more wells, and Mr. Gorden told him he would. That is the only conversation that occurred between the parties up to the time they commenced to sink well, No. 3. Well No. 3 they commenced to sink in January, 1897, along about the 9th or 10th. Then, on the 13th, Mr. Peters, withoutt any further communications with the Oil Company or its agents, made the lease to the defendants that I have spoken of. Now, it is clear, up to July, 1896, Mr. Peters had waived his right to insist upon a forfeiture of this first lease, for the reason that the premises had not been further developed. In his answer, he denies plaintiff has kept and performed the conditions of the lease on his part to be kept and performed, and he denies thiat plaintiff entered upon said lands in said lease, in said petition described, and drilled in a large number of wells there-o.ii at great expense, and that each of said wells so being Operated Jay plaintiff, is producing oil,but further defendant,Byers that plaintiff has.-drilled.and.a part of the time operated,bub one well, in the extreme north-west corner of said property, and no more thereon, and that plaintiff has given, andtjbat defendant,-A. Peters, has received the one-eighth part of the oil therefrom,

•^•Ihis distinct allegation in his answer is, that he conceded that in 1894, one well was put down,from which he received one;-eighth part of the oil produced therefrom. It is true, that it is not'much, and it is also true I might say at this point, that it may not have been a satisfaction, under this Contract, . He might have been authorized to have treated this contract as forfeited,if no well has been put down within a reasonable time — -may have treated this well as not being a well,and insisted upon the payment of the consideration in the contract, $160.00, and brought action'for it, or action at least for damages, for failure to complete that provision of the contract that they would pay the $160.00. ,- He might have done any'one of these things, but did not flo>either dr any of them; he waited until 1896, and saw anT bther well put down, at an expense of anwyhere from $1,200.00-to-$2,000.00, and received oil from it ever since, Now then, did anything occur after July,1896, to authorize Mr. .Peters to. insist upon a forfeiture of this contract? We -have held in one or two cases, arising on oil leases, that after the lessee had entered upon the performance of his contract; and had expended money in Ihe development of the lease, as in this ca'se, having put down two wells, one of them being ¡in-full operation, that before his rights under the contract iwhich had then attached and which in this case consisted of i_a- title to all-the oil and gas there was under these premises, ieonld be forfeited,or he be deprived thereof, it was due him in .good conscience, that the party insisting upon the forfeiture should- give notice of it; give notice not of the forfeiture, but of his intention to forfeit in case there be not a reason-, able operation under the lease. :

It seems to us, that this is a.fair and sound rule .to insist upon. The lessee, after he had entered upon the premises and after he has expended money in this case, has a right to know; if the lessor is going to insist upon greater developments of the property than has already been going on for some years, and he shall have notice of the. fact and be given an oppor-tunity to more fully and more speedily develop the property, As I have said, the only intimation from Mr. Peters, is a .conversation that he testifies to,that he called upon Mr; Gordon,and said he wanted him to sink more wells, and Gordon replied that he would do so shortly or soon, or something to that effect. No definite time was named, no intimation was given by Peters to Gordon that if he failed or refused to go on and develop this contract,that he should insist upon a forfeiture; nothing was said to him about that, and no further conversation took place between the parties. Mr, Peters saw fit in January, 1897, to make a lease to another party without saving anything to the Oil Company.

Now he insists in his defense to this action for injunction, that this lease was forfeited at all these various times by reason of delay. Unless it is held that a reasonable time after notice, between July, 1896, and January, 1897, had elapsed, then Mr. Peters defense is not a good one to this action, in our judgment and in view of the fact that nothing occurred between these parties except the conversation above related, we are compelled to hold that Mr, Peters has not made defense to this application for injunction. He has treated the operation of these premises all the time, so far as anything he has done is concerned, as if it was .satisfactory to him. No complaint has emanated.from him except the single request in August, 1896, that more wells should be drilled upon the property.

Another ground is insisted upon, and that is, that the lease should be forfeited because of their having violated the implied covenants of this contract, which are, that they should not only reasonably develop, but should sink offsetting wells. Very little need be said upon that subject, since there was upon the adjoining property, either controlled by plaintiff or others, but four wells that require off-setting. There is one well that is about 400 feet from the premises to the north, and there are four well about 1,000 feet from the premises to the east, some of them in operation and some that have been dry for two or three years. There are four wells then, about 200 feet from Peters’ •lands; three of these are on the piece next.adjoining the north-east corner, and are, as I say, 200 feet from his line, but the wells sunk by the plaintiff in the north-west corner of Peters’ farm, are likewise 200 feet from the line, both north and west,so that if that well was down where it ought to be, it protects his land from drainage from any of these three wells,because it is just 400 feet away from two of them, and a little more than that from the center cne at the northwest corner. But in July,as I have said, with his consent and approval, the company put down another well on the west line of the property, or 200 feet from it, and that off-sets the only other well there is near the line adjoining Mr. Peters’ property,so that all the wells on the adjoining lands that are adjacent to them, have been off-set by these two wells. Now, a great many authorities have been cited in this case to show that there is a ground here for declaring this lease forfeited, but none of them in our judgment,reaches the facts of this case where there has been a distinct, plain line of conduct, pursued by both parties with reference to the construction that should be given to this contract — a line of conduct that the court cannot ignore, on the part of Mr. Peters and the Ohio Oil Company, amounting to a consent to all this delay, or waiver of the right to ask a forfeiture. It seems like a long delay that has expired since 1889, but it has been consented to by Peters, and treated as though a proper thing, and he received and accepted $160.00 a year, as a full satisfaction for that, as long as it was paid, so that no ground exists upon the facts for application of any of the law that has been here cited. Many of the cases cited from Pennsylvania that have been read to us, have no application to an action like this, most of them being actions for damages for ejectment, or for the specific performance of contracts in which different rules of law are applicable, I shall not have time to refer to these authorities, but will content myself by saying, that we hold upon the facts in the case, that the plaintiffs are entitled to the injunction as prayed for.

Bartlett & Wilson, for Plaintiff,

Beard & Beard, (of Toledo); W, W. Campbell, (of Gibsonburg);and Carver & Carver, for Defendant.


source: Caselaw Access Project

author: Marvin, J.

license: Public Domain

text:
    (Eighth Circuit — Cuyahoga Co., O., Cir. Court
    Jan’y. Term, 1897.)
    Before Hale, Marvin and Caldwell, JJ.
    SCHMITT v. SCHNELL.

      Renunciation of contract — Right to commence suit—
    1. A renunciation of a contract before the time for its performance, amounts to a breach, so as to entitle a party to sue by way of anticipation.

      Express trust — Proof required to establish, as against absolute deed—

    2. An express trust can be engrafted by parol evidence, upon a conveyance of real estate, absolute on its face, but such a trust can be established only by clear, certain and conclusive evidence, in proof not only of the existence of the trust at the time of the conveyance, but also of its terms and conditions.

      Same — What not sufficient to establish trust—
    3. Where parents and children all lived together, engaged in earning a common- support, and accumulating a common property, with a sort of general understanding, that after the death of the father and mother, the children would succeed to the inheritance, as a-reward for their joint industry, but without any specific contract even to that effect, the title to the property standing in the name of the father, this is not sufficient to establish a trust in the father for such children.

      Error to the Court of Common Pleas of Cuyahoga county.
   Marvin, J.

This cause comes to this court by appeal from the court of common pleas of this county.

The plaintiffs are the children of one Joseph Schmitt, who died in Germany, about the year 1858, and Catherine Schmitt, who subsequently married the defendant, Vincens Schnell.

Vincens Schnell, after the death of his wife (the mother of these children), married the other defendant in this case.

' The suit is brought to have a trust declared for the plaintiffs in certain lands, the legal title to which is in Vincens Schnell.

The evidence shows that the father of. these plaintiffs, Joseph Schmitt, at the time of his death in Germany, left a small amount of property; that after the marriage of the widow with Schnell, Schnell became possessed of the property so left by the father of the plaintiffs, but the amount was very small, and from all that appears, may have become the property of the mother of the plaintiffs.

In 1860, Schnell came with his wife and her children to the city of Cleveland, arriving here in July, 1860; that he had then a very little property, converted into money, which was a part of the estate left by the deceased husband of his then wife; that he purchased in 1868, certain real estate in this city, taking the title to himself. At the time of this purchase, August Schmitt was about seventeen years old, John was about thirteen years old, and Agatha about twelve years old.

The down payment made on this purchase was fifty dollars, and consisted of money saved by the family after they had come to this city and whatever was left of the money realized from the estate of the deceased father of the plaintiffs, and the later payments were made out of the savings of the family from wages thereafter earned.

It is claimed by the plaintiffs, that such property so purchased, was upon the agreement that it should be the property of the plaintiffs,subject to the life estate of the defendant, Vincens Schnell, and his then wife, the mother of the plaintiffs.

The plaintiffs were all born in Germany; they came to this country as I have already said, and to this city, about the month of July, 1860.

One of the plaintiffs is a daughter, Agatha Long; the other plaintiffs are August Schmitt and his brother John.

The evidence clearly establishes that the plaintiff, August Schmitt, worked faithfully from the time he came here until he was about twenty-six years old, and that his earnings,all, except what was necessary for his very economical support, were paid by him to Schnell; that he earned good wages from very soon after he came here up to the time when he was about twenty-six years old, when he left his step-father’s home, or ceased, at any rate, to pay his earnings to him.

The bank deposit of Vincens Schnell, introduced in evidence,shows deposits made by Vincens Schnell in the bank, and they were considerable each month up to the time when August ceased to pay his money to his step-father, which was when he was married, at the age of twenty-six. From that time on they were scarcely anything.

■ The evidence shows that the step-father earned very much less than August earned.

The evidence shows that the daughter Agatha, went to school for a little while after she came here, and thereafter went into service and earned for a part of the time, $1.50, then $2.00, and part of the time,$3,00 a week,and paid her earnings to her step-father, and was supported by him except that, as she was working in families, she had her board with the families for whim she worked.

There is no doubt in the minds of any member of the court or anybody who heard this .evidence, that the money that purchased this real estate was earned in a great psrt by August Schmitt.

' Some part of it was earned by Agatha. It is not clear that John ever contributed more than he received.

He was in school for a considerable time. Then he went to learn a trade and boarded at home, and his wages were small; so it is doubtful whether John earned more than he received from his parents. But it is clear that the others did; surely that August did.

But, does that establish a trust, when we take the other-facts in connection with the case into consideration ?

The family lived together. So far as we can judge from this evidence,there was no thought among any of the family of treating Mr. Schnell otherwise than as their father would have been treated. They spoke of him as “father,” and he spoke of them as his children. The trust, if there was a trust here, is an express trust. Evidence introduced by the plaintiffs and relied upon by them, is the statement made more than once by Vincens Schnell, that he was buying the property for the family — buying a home for himself and the children.

August testified that soon after they came here there was talk in the family about the children going to work; that Schnell said, “We will get a home so we won’t have-to pay rent all our lifetime. ” And he said, “I will buya home and buy it, not for my sake, but for your sake.” “That’s the very expression he- used;” “He said that.” This is what August testifies to. That was prior .to the purchase.--

August says that at another time he and his mother were asked by Schnell to look at a lot which he thought of purchasing,and that his step-father said this to him: “You make pretty good pay. We will buy this lot. It is not for my sake, it is so the children have a home.”

And again, after August became of full age, Schnell- said this to him, quoting from the testimony of August:

“He told me himself,he had an idea some people was talking to me that I was foolish for giving up my money. He says pay no attention; you will get it all back. Nobody will ever touch it except you children.”

Again he said at one time his mother and her husband had been into the business part of the city and came home.

And this language is used by August in his evidence.

’“They were up town, both of them, and told me at sup]] per time — they both had a smile — he says, we should have to worry no more. Everything was fixed all right now, nobody could touch that property except us children, if anything should happen to them. ’ ’

This conversation clearly referred to a visit made by the parents to some lawyer’s office where a will was executed by one or both of these parents. There is some conflict about the matter of the will, but it is clear that Mrs. Schnell did execute a will by which she undertook to bequeath to her children this property, the title to which was in the husband. After the death of Mrs. Schnell, the husband brought that will to the office of the probate judge, and the testimony is, that upon the advice of the probate judge, the will was destroyed. Perhaps they misunderstood the advice, as there is no authority that we know of for any one to destroy a will. But a will was made without question, by Mrs. Schnell, and we think Mr. Schnell executed a will at one time, devising this property to these plaintiffs. But after the death of his wife, he went abroad, and married again, and came back, and he repudiates any trust. He says the children have no interest in the property, and hence,this action wasbrought by the children to have this trust declared.

It was urged on the part-of VineensSchnell, on the hearing, that this case was prematurely brought, and we were cited to the case of Maud v. Maud 33 Ohio St., page 147, which was a suit of specific performance of agreement. The agreement claimed was, that certain property had been bought with the monies furnished and earned by a family named Maud. The title was taken in the mother with the agreement that the children should have each of them certain parts of the land, at her death,and the court said that the case was prematurely brought, because,as the court say, reading on .page 149,

“Nor can it be as his counsel claim, that because his mother repudiated the contract, as he claims she did, he can have his action, upon the principle that a renunciation of a contract before the time for its performance amounts to a breach, so as to entitle a party to sue by way of anticipation. The mother has not denied but that the son may be entitled to his share at her death. She only insists, and for the purpose of this suit, that he is not entitled to it now.”

That is not the case we have here. We do not think that this case was prematurely brought. The evidence shows that Vincens Schnell repudiates any trust, and swears the property is his.

But we do think that the evidence fails to establish a trust, under the rules, not only in this state, but elsewhere, as to what is necessary to establish a trust.

We cite the case of Miller and wife v. Stokely et al., 5 Ohio St., 195, reading- from the syllabus:

“To establish an express trust in the case of a conveyance by deed absolute on its face, it is requisite that the evidence should be clear, certain, and conclusive, in proof not only of the existence of the trust, and that,too, at the time of the conveyance, but also as to its terms and conditions.
“It is not sufficient that circumstances should be in proof calculated to excite a suspicion; or even a probability," in the"minds of some person, that there might have been a trust; but the proof must shrw the existence of the trust affirmatively, and so conclusively as to remove all reasonable and well founded doubt.”

The same principle is laid dpwn in the case of Stahl against the city of Cincinnati, 16 Ohio St., 17, in the syllabus of which this language is used:

“If an express trust can be engrafted by parol evidence, upon a conveyance of real estate, absolute on its face, yet such trust can be established only by clear, certain and conclusive evidence, in proof not only of the trust at the time of the conveyance, but also of its terms and conditions.”

This is the rule in this state. Oan it be said that a trust is so established in this case, that at the time of the conveyance of the property, such trust is shown to be clear, certain and conclusive, not only of the existence of the trust, but also what its terms and conditions were, by evidence which is conclusive and removes all reasonable doubt?

It seems that it is more like the case of Maud versus Maud, supra, although that was not a case to have a trust declared; but the court say, in that case:

Without entering into a discussion as,to the weight of the evidence, it seems to us that the upshot of the matter is, that parents and children all lived together, engaged in earning a common support, and accumulating a common property, with a sort of general understanding, that after the death of the father and mother, the children would succeed to the inheritance as a reward for their joint industry, but without any specific contract.”

This was a case where William Maud had agreed to work together with his parents and a brother in order to accumulate a certain property the property to be taken in the mother’s name.

The object in the present case, was the getting of a home, and there was a general understanding that at the death of the parents, the property was to go, as a matter of course, to the children. But, suppose children had been born to Vincens Schneli and his wife Catherine, after the purchase of this property, and Vincens, while holding the title as be now holds it, had died intestate, would it be claimed that such children would have had no interest in this property?

Hessenmueller & Bemis, Attorneys for Plaintiffs.

Heisley & Selzer, and Kerruish, Attorneys for Defendants.

We do not think so. We think it was that kind of a case where the family had a general agreement that all hands would contribute what they could towards getting a home, and they would all enjoy the benefits of it. But there is no such agreement as will establish an express trust.

Our conclusion and judgment,therefore, is,, that the petition be dismissed.


author: Parker, J.

text:
    (Sixth Circuit, Ottawa Co., O., Circuit Court
    June Term, 1897.)
    Before King, Haynes and Parker, JJ.
    THE PHOENIX INSURANCE CO. v. THE PORT CLINTON FISH CO. et al.

      Fire insurance — Total loss — Insurance company bound for full •amount named in policy, although there is concurrent insurance—
    1. Where there is a total loss of a building or structure, an insurance company is bound under sec. 3643, Rev. Stat., to pay the full amount of insurance thereon designated in its policy, although there may be other concurrent insurance by other companies thereon,and in such case a provision in the policy that the question of the amount of the loss shall be submitted to and determined by appraisers, is of no binding force.
    (The court dissents from the decision of the Superior Court of Cincinnati, in Cincinnati Coffin O. v. Ins. Co., 7 Weekly Law Bulletin, 342, and calls attention to a typographical error in the revision of 1880,of the statutes, involving a material change from the original law as passed and found in the sessions laws, and the court disregards said change.)

      Total or partial loss question for jury—
    2. The question whether the loss was total or partial is for the jury to-determine.

      Total loss defined — Insurance of fish-houses, additions, foundations and docks — Dock part of structure — Loss total though part of dock unconsumed—
    3. A loss may be total although part of the structure may not be consumed by the fire. Where a fish-house,-additions, docus and foundations constitute a single structure, and are insured as a single structure by a“blanket” policy, and a fire consumes all of the structure but a part of the dock, which is left intact, but is ■of no use or value as it stands, and it appears that to rebuild the whole structure it would be necessary to tear down and remove -such part of the docu remaining, and that the cost of such removal and replacement of such unconsumed part of tüe dock would exceed in amount the value of the materials therein that •could be saved and used in such rebuilding, and the value of such materials for any use, is Jess than the cost of saving and utilizing the same, the loss is total.
   Parker, J.

This is a proceeding in error brought to reverse the judgment of the court of common pleas. The action below was brought by The Port Clinton Fish Company and other persons interested on a policy of insurance issued by the Phoenix Insurance Company insuring a certain fish bouse, with foundation and docks and appurtenances, situated upon the north side of the Portage river in the village of Port Clinton, Ohio. The issues made by the pleadings ■are very clearly and distinctly stated in the charge of the ■court, and therefore, I will quote from that with slight (modifications to give a statement of the issues:

“The plaintiffs in their petition set forth that tbe Fish 'Company is a corporation duly organized under tbe laws of ■the state of Ohio, and F. L. Felch is assignee in trust for tbe benefit of the creditors of the Sandusky Savings Bank 'Company; that the defendant is an insurance company, ' a' corporation duly organized and existing under the laws of the state of New York, and doing business under the laws of the state of Ohio; that on the 28th day of August, 1894, 'the Port Clinton Fish Company, being the owner of a frame, shingle roof building with frame composition roof and addition thereto, includinng docks 'nod foundations ■situated on the north bank of the Portage river in Port •Clinton, Ohio, in consideration of the premium of $40.00 paid, did, by its policy of insurance in writing, insure the plaintiff company against the loss or damage by ■ fire on said property to the amount of $2,000, from August 28, 1894, at 12 o’clock noon, to August 28th, 1895, at 12: o’clock noon. On said 28th day of August, 1894, it was-agreed by and between plaintiffs and defendant that the-loss, if any, should be payable to said F. L. Felch, assignee, who holds a mortgage on the property; that the plaintiff' duly performed all the conditions of said contract, and on. the 11th day of December, 1894, said proprty was totally destroyed by fire, and the plaintiff’s loss by fire was $2,000.
“That on December 18th, 1894, the plaintiff company notified defendant of said loss in writing, and on December 24th, 1894, defendant was furnished with the proofs of loss; that said defendant has not paid said loss; and judgment is asked for $2,000, with interest from February 23rd,. 1895.
“Defendant in his amended answer admits the incorporation of the plaintiff and defendant, companies, the execution and delivery of the policy mentioned in the petition to said plaintiff company, and denies the other allegations-of the petition not therein specifically admitted.
“The answer sets forth that it is provided in the policy that the sound value and damage to the property may be determined by mutual agreement between the Insurance Company and the assured, or tailing to agree, the same shall then be submitted to the arbitration of two arbitrators and one umpire to be selected in a certain manner, and the award of any two of them in writing under oath shall b& binding and conclusive as to the damages; that no suit or action against the defendant company for the recovery of any claim, by virtue of the policy, shall be sustainable-until after an award shall have been obtained, fixing the1 amount of the claim in the manner provided which is agreed to be a < ondition precedent.
“Defendant avers that the company and the assured' failed to agree, and did not agree as to the amount of the sound value and damage to the property covered by the policy, or any part thereof, and that said plaintiff, after request, refused to submit the question as to the amount of sound value and of damage, as provided in the policy.
“That it was further provided in said policy, that if the interest of the assured in the property be other than an unconditional exclusive ownership, and if it be real property, if it be other than an absolute fee simple title, or if there be a mortgage, it must so notify the company^and be so expressed in the written policy, otherwise the policy shall be void.
“The defendant company alleges that the plaintiff company was not such owner, and it was not so expressed in the written part, or any other part of the policy, and plaintiff company’s title was not an unconditional, exclusiv ownership, and there was an undivided one-fifth interest in the title of said property in another at the time of the issuing of the policy, and therefore the policy was absolutely void.
“That it was provided in the policy that in case of another insurance upon the property insured, whether prior to or subsequent to the date of the policy, the assured shall be entitled to recover no greater proportion of the loss sustained than the sum for which the policy was issued bears to the whole amount insured thereon, and all other insurance should be subject to average in like manner; that at the time of the pretended loss there was another outstanding policy of insurance upon the property described in the petition amounting to $1200, and the loss sustained by the insured was not total, but only partial, and did not exceed the sum of $2,000, and the other policy is contributing insurance for said amount, and defendant can only be required to pay its proportionate share.
“Plaintiffs in reply deny that there was a partial loss; deny that the interest of the assured in the property covered by the policy was other than unconditional exclusive ownership, and that there was an outstanding undivided one-fifth of the title to said property in another, and deny that the loss was not total but only partial, and it did not exceed $2,000, and that said other policy of $1,200, was, and is contributing insurance for said amount. ’ ’

Upon the trial a verdict was rendered in favor of plaintiff below for the amount claimed, $2,000, and interest. There was also a special verdict or answers to certain interrogatories returned by the jury, reference to which will be made later. A motion was made for a new trial setting forth about all the grounds mentioned in the statute, all of them perhaps, and this was overruled, and error isprosecuted here on account of the action of the court on the trial of the case as to the admission and exclusion of testimony, the action of the court in charging certain propositions of law as requested by the plaintiff in error; and various exceptions are taken to the charge as given, and to the overruling of the motion for a new trial.

As I have said, the property insured consisted of a fish house and a dock and foundation, all of these various properties standing together and being attached one to the other. One of the principal questions raised upon the trial of the case was, as to whether or not they were one structure, or whether the dock was a separate and independant structure from the fish house; it being conceded upon the trial that the fish house above the foundation or wharf was totally destroyed, and that certain parts of the dock remained after the fire, intact. The written part of the policy of insurance which describes the property and states the amount of insurance written upon it, reads as follows:

“12,000, on their shingle roof frame building, with frame composition roof, and addition thereto attached, including docks and foundations, occupied by assured for their fish business, situated on the north bank of Portage river, Port Clinton, Ohio. Loss, if any, payable to F. L. Felcb, Assignee of the Sandusky Savings Bank Co. Mortgage. Other insurance permitted.”

It will be observed that there is a single amount stated; that the form of the insurance upon this structue, or these structures, is what is known among insurance men as the “blanket” form of policy. It does not undertake to describe the building as a structure by itself and place a certain amount of insurance upon that, and then describe a dock or any other part of the structure as a structure by itself, and place insurance upon that, but it says “$2,000, on their shingle roof frame building with frame composition roof, and addition thereto attached including docks and foundations, occupied.” &c,

It seems to us that the policy of insurance treats the docks and foundations and the superstructure as one structure; that the parties have so treated these various parts of the structure in their contract.

When we come to look at the testimony as to the form of these structures, the dock, the building, the additions and foundations, etc,, we are convinced that by the testimony it fairly appears to be but a single structure; that the dock, so-called, perhaps more properly called a wharf, is as much a part of the building as the foundation; that it would be no more proper to speak of the dock as being a separate and distinct structure than to speak of the foundation as being separate and distinct; — as one of the witnesses partly says, “the dock sustains about the same relation to the fish house that a porch would to a residence.”

The fish house was upon the land side of this dock. The dock extended out farther into the water than any part .of the fish house, the dock extending a distance of 141 feet and six inches, as I understand the plat, along the north bank of the river, the east end being 14 feet wide, and the west end being 18 feet wide. A particular description of the dock and of the whole structure is given by witnesses which we will not take time to repeat, but we will say in a general way, that both dock and fish house were built upon piling driven into soft mud, and in the bottom of the river and on the north side of the river. According to the testimony of some of the witnesses, the fish house proper extended back from the dock about 14 feet and 3 inches; according to the testimony of other witnesses, however, the statement is made, which we deem quite reasonable, taking into consideration all of the surroundings, that the floor of the fish house was a part of the dock. I do not undertake to give the language of the witnesses, but it amounts to that; that the fish house, in other words, is built upon the dock.

The testimony tends to show that in constructing this fish house and dock, it was necessary to begin to drive piling into the ground at the shore, or as far toward the shore as it was desired to have the structure extend. . That the piles nearest the shore must have been first driven; that the work was done from the water, beginning at the shore, and as it proceeded, it extended out into the water; and that the rebuilding of the structure must progress in the same way and order, so that, in order to make any use of the planking, the piles, or any part of the structure of the dock which was not destroyed by fire, it would be necessary to remove it, to take it away, tear it up, pull out the piles or otherwise dispose of them so as to be able to begin near the shore in order to build out again as the dock and building was originally constructed.

There are the photographs and plates attached to the bill of exceptions, showing how much of the dock was left standing after the fire, and without undertaking to describe it by feet or by particular parts of the structure, I will say generally, that it appears that, about three-fourths of the dock remained standing after the fire.

At the close of the testimony the defendant requested the court to charge the jury,either before or after the argument, certain propositions. It appears that the first proposition requested was given. Whether the nine following propositions were given or not appears only inferentially; it is not distinctly stated that they were not given, neither is it stated that they were given. It is stated that the defendant excepted to the court not giving them or to the refusal to give them, and following these requests as given in the bill of exceptions, is this statement, — “And thereupon the court charged the jury as follows,” and then follows the charge of the court. We have proceeded upon the theory, however, that these requests were not given, but were refused.

The first refused, being the second of the series, is as follows:

“The defendant requests the court to instruct the jury that it being admitted by the pleadings that the plaintiff, he Port Clinton Fish Co., refused to admit to the appraisal Tequested by the defendant to determine the amount of the loss, the plaintiffs cannot recover, such appraisal, under the terms of the policy, being a precedent condition to the Tight to maintain a suit on the policy.”

■ That proposition it will be observed, is stated without reference to the question as to whether there was other •concurrent insurance. The court properly refused to charge that. The case of Insurance Co. v. Leslie appearing on page 409 of the 47 Ohio St., states the law upon the subject, and is based upon Secs. 3643 and 3644 of the Rev. St., commonly known as the “Howland Law.” I will read from the syllabus:

“The act of March 5, 1879, ‘to regulate contracts of insurance of buildings'and structures,’ (now sections 3643 and 3644 of the Rev. St.,) applies to all policies issued since it went into effect, insuring any building or structures in this state, against loss or damage by fire. The neglect or •omission of the Company’s agent to make the examination •of the property and fix its insurable value, as the statute requires, cannot prevent its application to a policy issued by the company, or defeat or affect the operation of the •statute.
“The statute is founded -upon the considerations of public policy; its purpose being, to exact diligence and care •on the part of insurance companies to avoid improper risks and over-insurance, by requiring them to cause their agents to make personal examination of the property, a full description thereof, and fix its insurable value, as well as to protect the insured against unreasonable forfeitures and defenses. The more effectually to accomplish these results, the statute holds the company liable on its policy, unless after its issue, a change occurs increasing the risk, without, its consent, or the insured has been guilty of intentional/ fraud; and in case of the total loss of the property by fire,, the measure of the liability is fixed at the amount mentioned in the policy, upon which the insurer received &> premium. The statute cannot be regarded as conferring; upon the assured a mere personal-privilege which may be-waived by agreement. It moulds the obligation of the-contract into conformity with its provisions, and establishes1 the rule and measure of the insurer’s liability.
“Conditions of the policy providing for a different rule or measure of liability, being in conflict with the-statute, are without any binding force. Of this character are stipulations to the effect that the amount of the loss or damage shall be estimated according to the actual value of the property at the time of the fire, and not more than it would cost the insurer or insured to restore the same; and,, that no action on the policy shall be commenced until an award of arbitrators, -chosen for that purpose, shall be obtained. ”

The statute referred to reads as follows:

Section 3643.

“Any person, company, or association, hereafter insuring-any building or structure against loss or damage by fire or lightning, by a renewal of a policy heretofore issued, or otherwise, shall cause such building or structure to be examined by an agent of the insurer,’ and a full description-thereof to be made, and the insurable value thereof to be-fixed by such agent; in the absence of any change increasing the risk without the consent of the insurers, and also of’ intentional fraud on the part of the insured, in case of total loss, the whole amount mentioned in the policy or renewal’ upon which the insurers receive a premium shall be paid, and in ease of a partial loss the full amount of the partial loss shall be paid; and in case there are two or more policies upon the property, each policy shall contribute to the payment of the whole or the partial loss in proportion to the amount of insurance mentioned in each policy; but in no case shall the insurer be required to pay more than the amount mentioned in its policy.”

Section 3644.

“A person who solicits insurance and procures the application therefor, shall be held to be the agent of the party thereafter issuing a policy upon such application or renewal thereof, anything in the application or policy to the contrary notwithstanding.”

This proposition would have been right if it had been conceded that it was but a partial loss; but that was one of the issues, one of the serious questions in the case, and the verdict of the jury upon that' question necessarily is, and we think it is supported by the evidence, that the loss was not partial, but total. Thé’ verdict states that all of the property was destroyed, yet it can well be seen that a loss may be total though all of the property insured may not be reduced to smoke and ashes. The testimony in the case tends to show,and does show very clearly, that the part which was left of those structures was in a condition and situation that it would cost more to remove it than to use it for any purpose it might have been used for, than the materials were worth; that it could not be used in its situation as it was after the fire for any purpose, and it was of no value in that conditiion, and it would cost more than the value of the materials to remove it and replace it as it was originally so as to answer the purposes that the original did. The case just read, therefore, disposes, we, think, very clearly of this proposition which the court was asked to charge.

The third proposition is as follows:

“The defendant asks the court to instruct th.e jury that it appearing by the uncontradicted evidence in this case, there was two policies on the premises covered by the defendant’s policy, and that the defendant in this case, after the loss and before the suit was brought, demanded an appraisal of the damage occasioned by the fire, and the insured refused to submit to such appraisal, the plaintiffs cannot recover, because the right to an appraisal in any case exists, independent of the Ohio statute, where there are two or more policies on the same property.”

This brings us to the connstruction of the last clause of section 3643 which I will read again:

“And in case there are two or more policies upon the property, each policy shall contribut to the payment of the whole or the partial loss in proportion to the amount of insurance mentioned in each policy; but in no case shall the insurer be required to pay more than the amount mentioned in its policy.”

In a case decided by Judge Harmon of the Cincinnati Superior Court, found in 7th Cincinnati Law Bulletin, 342, where this particular paragraph of this section was under consideration, Judge Harmon held,— “that the effect of this provision was simply to keep in force the old law with reference to concurrent insurance, and that the provision that a company should be liable for the amount of insurance written upon certain property without respect to the actual value of the property had no application where there were two or more policies.”

After a full consideration of this question, however, we have come to a different conclusion. We believe that it is the purpose and intent of this statute to require insurance companies writing policies upon a building, in case of total loss, to pay the full amount of the insurance, and that the statute applies as well to cases where there is more than one as where there is but a single policy. The construction given to the act by the Superior Court of Cincinnati, would tend to defeat the purpose of the legislature in a very large measure, because in many instances, two or more policies are written, and if that rule were adopted, two or more policies would be written in most cases; insurance companies would seek to avoid' the purpose of the statute by so writing other insurance. Insurance companies are to exercise diligence and care and avoid improper risks and insurance by causing their agents to make a personal examination of the property and fix its insurable value before writing the insurance. In this case it appears that this policy was written by the defendant company, and that afterward, in pursuance of the permission given in its policy, another policy of $1,200 was written upon the same property.

The basis, therefore, of the contribution, according to our view of the statute, would be the whole amount of the insurance written by all of the companies and included in all of the policies. In this case it would be $3,200.00, and if the loss were total, as it appears to have been, then the one company would be liable for $2,000, and the other for $1200.

In case of a partial loss there is a contribution upon a different basis, i. e., the whole amount of actual loss from damage by the fire.

Insurance companies may protect themselves against loss by writing in their policies, “other concurrent insurance not permitted,” or by fixing the limit of another concurrent insurance. In this case the defendant company has not attempted in that way to fix its liability. But after arriving at this conclusion as to the purpose and meaning of this statute, our attention was brought to the original act, the so-called “Howland Law,” passed upon the 5th day of March, 1879, and appearing on page 26 of volume 76 of tfie Session Laws; and upon reading that and considering the means by which this statute was brought into the Revised Statutes by the codifiers, it is made entirely clear to us that there is a typographical error in the Revised Statutes, and that no change of this law, as originally passed on March 5th, 1879, was intended by the legislature, and the original act makes it entirely clear that insurance companies are as well liable for the whole amount of their policy where there is concurrent insurance and many policies as where there is but a single policy. The Revised Statutes read: “that each policy shall contribute to the payment of the whole or the partial loss in proportion to the amount of insurance mentioned in each policy.”

The original act reads: ‘‘In case'there are two or more policies upon the property, each policy shall contribute to the whole of the partial loss in proportion to the amount of the insurance in each policy.”

It is true, as suggested by Judge Harmon, that this qiart •of Sec. 3613 reads very much like a Chinese puzzle; and it is apparent that his attention was not called to the language of the original law.

As I have said, this act was passed upon the 5th day of March, 1879. The Revised Statutes were adopted by the legislature upon he 23rd day of June, 1879, a little over three months afterwards. We are confident, from such examination as we have been able to make, that there will not be found in the House or Senate Journal, any reference to this Howland Law after it was passed, nothing tending to ■show that the legislature had it under consideration again, or intended to make any change, especially such radical change as would have resulted in overturning the rule so recently adopted by the same legislature as to concurrent insurance.

The codifiers or commission that had in charge the codification of the lawsj were not, as is well understood,vested with any authority to make changes; that is to say, any ■changes that would change the law. Their authority was ■under an act of the legislature passed upon the 7th of March, 1875, and appearing in Vol. 72 page 87. I do not find a •copy of the session law here, but I will read from the preface of the Revised Statutes what, according to my recollec■tion, is an exact statement of what appears in that act.

‘‘The governor was required, by and with the advice and ■consent of the senate, to appoint three competent commissioners to revise and consolidate the general statutes of the state, and he was authorized to fill any vacancy in the commission.
“In performing the duty, the commissioners were required to bring together all the statutes and parts of statutes relating to the same matter, omitting redundant and obsolete exactments, and such as had no influence on existing rights or remedies, and making alterations to reconcile contradictions, supply omissions, and amend imperfections in the original acts, so as to reduce the general statutes into as concise and comprehensive a form as might be consistent with clear expression of the will of the general assembly- — -rejecting all equivocal and ambiguous wurds, and circuitous and tautological phraseology.
“They were required to arrange the statutes under suitable titles, divisions, subdivisions, chapters, and sections, with head notes briefly expressive of the matter contained therein, with marginal notes of the contents of each section, with reference to the original act from which it was complied, and foot notes of the decisions of the supreme court upon the same; and they were required to report the whole, in print, to the general assembly, for its adoption.”

From time to time they were required to make reports of their progress, and this appears to have been done, and according to our information, in no instance did the codifiers attempt to make any radical change in the law with-out bringing the matter to the attention of the legislature; they were not authorized to do so, and in this instance it -appears that they did not attempt to do so.

The difference between the Revised Statutes and the •original act is the difference of on letter only. The word “or” in the Revised Statutes reads “of” in the original act. It might be pointed out in the decisions of the supreme ■court since the codification, how* the supreme court has viewed the matter, and where they have disregarded changes, and have put upon the Revised Statutes the same construction as had been\given to the law before it was codified, although there had been some change in phraseology which might admit of a different construction, where it was not clear that a different construction was intended-There are many illustrations of this running through the decisions of the supreme court.

We feel quite sure that this change of one letter is a typographical error, and we therefore, so regard and treat it.

The fourth proposition requested is as follows:

“The insured property as described in the policy in this case is as follows: ‘On their shingle roof frame building with.frame composition roof and addition thereto attached, including docks and foundations, occupied by assured for their fish business/ etc.
“I instruct you that this policy covered the buildings, the addition and also the docks. It is admitted that the building itself was totally destroyed by the fire;' but the defendant claims that the docks were only partially destroyed. If you find that the docks were only partially destroyed, and that a substantial portion of them remained uninjured, then, and in that case, I instruct you that the loss was not total, and the plaintiffs cannot recover.”

This was properly refused; it was for the jury to say whether or not it was one structure. If one structure, the loss may be total although the property may not be totally destroyed. These propositions requested read as follows:

“If you find that portions of the docks were built after the ware house was erected, and that the docks were constructed upon piles that were not under the main building, or the offices, and did not support either the main building or the office, and that the dock east and west of the building was complete in itself, in such case you may find what proportion of such dock was injured by the fire, and if a substantial portion of the docks remained uninjured after the fire, then and in such case the plaintiffs cannot recover. ”

This was properly refused, because the character of the superstructure is not to be fixed necessarily and solely by the time when, or the order in which the different parts were constructed.

The sixth proposition requested by the defendants reads as follows:

“If you find that the building was erected and occupied as a fish house for some time prior to the erection of the forty-feet of dock on the east, and ypu further find that such forty-feet of the dock was not totally consumed, and that a substantial portion of the same remained after the fire, then your finding should be that the loss was not total, and your verdict should be for the defendant.”

This proceeds upon the theory that -the dock and fish house are different and independent structures, a matter which was passed upon by the jury, and the jury found-they were one structure.

I will not take the time to go through the remaining requests to charge, which are numerous, and point out particularly the faults we find in them; but briefly, we find that each and every one of them contains some one or more of the faults I have indicated in those that I have read and commented on, and we hold that -the court did not err in refusing to give those charges. They are based upon the assumption, either that the fish house and docks were, as a matter of fact, separate and distinct structures, or that it is the law that where there is concurrent insurance, and a total loss, an insurer is not liable for the whole amount of the policy.

We find no error in the charge of the court, though various errors are urged, but the claims of error are generally based upon one or the other of these two theories which I have mentioned, and which we find to be wrong. We find that the verdict is supported by the evidence; that the jury was warranted thereby in finding that the loss was total, and not partial.

A. T. Brewer and Wm. Gordon, for the Insurance Company.

B. G. Love and O. I. York, for The Port Clinton Pish Co.

Exceptions were taken to various questions and answers, whereby the plaintiff was permitted to show that the cost of utilizing the planking would be greater than the value of the planking utilized,either for the purpose of rebuilding or any other purpose.

We see no error in this. We think it is fair and legitimate to show that the loss was total even if some parts were not consumed by the fire.

We find no error in the proceedings or in the record, and the judgment of the common pleas court is aifirmed.


author: •••Sibley, J.

text:
    (Fourth Circuit — Ross County, O., Circuit Court
    May Term, 1897.)
    Before Cherrington, Russell and Sibley, JJ.
    THE SOUTHERN EXPRESS CO. v. OSKAMP, NOLTING & CO.

      Oommon carrier not bound to ascertain real owner of goods, but must follow directions—
    1. The contract of a common carrier is not that he will ascertain the owner of goods, and deliver them to him, but that he will deliver the goods according to directions; that is, at the place of destination,and to the party desingated to receive them,or to his order.

      Same — Several parties bearing name of consignee—
    2. Where two men of like name live in the same town, and one orders goods from a distant dealer, who ships them in the common name, simply ; in the absence of note to tche contrary, the party giving the order is, in contemplation of law, the one to whom , they are sent. Consequently, delivery to him will be a due execution in that particular of the contract of carriage, although the consignor believed the order was from, and intended the goods to'go to the other man. The result is not varied by the circumstance that the purchaser fraudulently assumed the name used in .buying, provided it is that by which he was known at the place of destination, unless negligence is shown ; and this, the mere fact that the delivery was not refused by the carrier, until inquiry could be made of tne shipper as to which party the-, goods were designed for, fails to establish.
    Error to the Court of Common Pleas of Ross county.
    This was an action by Oskamp, Nolting & Cj., in the Ross county common pleas, to recover $562.50, the value of diamond ear-rings and pins, which they allege the Express' Co. received from them about March 15, 1895, and was in possession of at Hopkinsville, Kentucky, as a common carrier for hire, for the purpose of delivering to one T. M. Jones,, in that place, and which at that date, they aver, it wrongfully converted to its own use “ by delivering the same to-parties unknown” to said Oskamp, Nclting & Co., “and who were not the parties to whom the goods were directed and shipped.
    Upon issues made as to this alleged conversion, the cas© was submitted to the court for trial, the finding and judgment being for the plaintiffs. The defendant filed its motion for a new trial, on the ground that the finding was not sustained by the evidence, which was overruled, exceptions duly taken, and the cause brought into this court by a petition-in error. There were special findings of law and fact in the common pleas. A bill of exceptions is also in the record, containing all the evidence, from which it appears that the essential facts are not in dispute. Concisely stated, they are as follows: In the town of Hopkinsville, Ky., lives a man named T. M, Jones. At the time of the transaction in-question, he was in the “general merchandise business. ”' Oskamp, Nolting & Co., are dealers in jewelry, at Cincinnati, O. About March 13, 1895, one Abe Rothschilds, on his way to Hopkinsville, wrote and mailed to Oskamp, Nolting & Co., an order, in these words:

      “Hopkinsville, Ky., 3-13, ‘95.
    Mess. Oskamp, Nolting & Co., Cin., O.
    Gents: — I have an order for a pair of diamond ear-rings, solitaires, each stone tc weigh about 1-| carats, to be white, well cut and perfect. Please send by express on memorandum, several pairs, and will return promptly those not wanted. I presume the mercantile agencies will be able to inform you as to my responsibility. You may also send a ladies’ brooch or lace pin, something neat and not to cost over. $40.
    Yours Res’ly.,
    T. M. Jones.
    I would like to makejTO per cent, margin on the above if possible.”
    This was written on a plain sheet, without any business card or heading, such as is common with dealers. Upon receipt of the letter, Oskamp, Nolting & Oo., looked into a commercial agency’s book, found the name and business of T. M. Jones, the merchant, at Hopkinsville, Ky., that he was rated as worth $20,000,credit good,and without further inquiry, shipped the goods it called for,under the mistaken belief that the order they were filling had been given by him. Mr. Jones was a stranger to them, with whom they had had no previous dealings. The goods were of the kind and value alleged, but, aside from the fact that the package containing them was received by the Express Oo,, from a firm known to it as dealers in jewelry,no knowledge of their character or value was given to or had by it. The package was shipped as ordinary freight, at a cost of twenty-five cents for the carriage, the lowest rate at which the Express Oo. takes the least valuable article. Had the true value of the consignment been known to the Express Oo., the mode of carriage would have been different, to insure greater safety, and the cost of transportation, materially larger. Rothschild’s reached Hopkinsville,stopping at a hotel there, March 13th, the day the order for the diamonds were sent; and he remained in the town until the afternoon of the 15th, going while there, by the name of T. M. Jones. The merchant, Jones, met him, and he spoke of their having the same name, and of his purpose to go into the jewelry business in that place. The letters of the two got mixed in delivery at the P. O., and Mr. Jones took several, and also a telegram, wrongly given him, to Rothschilds’. The latter went so far as to get a room, and put a card on the door, visible to passers-by, saying the room would be “occupied by Tobias M. Jones, as a jewelry store, about March 25.’’ He also presented himself at the Express Co's, office, as T, M. Jones, and showed the agent letters in his possession,so addressed. He asked further for a package there, sent in that name, and to identify himself as the person to whom it was forwarded, described what it should contain so fully, that upon opening it, the agent was convinced of his right to receive the package, and delivered it to him. Rothschilds further stated to the express agent, that he was looking for goods from various parties, of whom he gave a list, naming this Cincinnati firm as one. Before the package he identified was delivered to him, it had been offered to the merchant, Jones, who refused to take it, saying it was net his. The facts as to letters wrongly got by the latter, which were given over to Rothschilds, were stated by Jones to the delivery man — all of which the express agent learned before he delivered the package in question. At the time he got it, also, Rothschilds told him of renting a room,and showed the keys to it. The express agent testifies that he made the delivery to Rothschilds, because he had left a list with Oskamp, Nolting & Co’s, name on it, and said that he had goods ordered from them, and T. M. Jones, the dry goods merchant, had refused a package for this T. M. Jones, and the later was at hand to receive the goods he said he had ordered from Oskamp,Nolting & Co. on the arrival of the express. It further appears that Oskamp, Nolting & Co. knew nothing of Rothschilds having made the order filled by them, and they delivered the package to the Express Co., intending it for T. M. Jones, the merchant. It was addressed thus: “T. M.' Jones, Hokpinsville, Ky.” No mark beyond this was on it, or direction given by the shippers, indicating that it should go to the merchant rather than some other T. M. Jones, who might be at that place. Rothschilds when he demanded and got the package, showed no letter from Oskamp, Nolting & Co., relating to it, or bill of lading for the goods; nor did the agent of the Express Co. attempt to communicate with them before the delivery was made.
   •••Sibley, J.

The''1 facts stated, are the basis for two points of contention. The first is,that the delivery of these goods to a person not intended by the consignors, was per se a conversion, notwithstanding he had ordered them, and at the place of destination went by the name in which they were shipped. Rut if this consequence be held not to follow simply from thus delivering the goods, the second proposition is, that such negligence is shown to have accompanied the act as,in law, to work the same result, and so make the Express Co. liable for their value.

I. “Common carriers deliver property at their peril,and must take care that it is delivered to the right person,for, if the delivery be to the wrong person,either by an innocent mistake, or through the fraud of third persons, as upon a forged order, they will be responsible, and the wrongful delivery will be treated as a conversion.” (McEntee v. N. J. S. Co., 45 N. Y., 37.)

In determining, however, who is the right person, in case of an alleged wrongful delivery, it is to be borne in mind,

“That the contract of the carrier is not that he will ascertain who is the owner of the goods and deliver them to him,but that he will deliver the goods according to directions. If a roan sells goods to A., and by mistake directs them to B., the carrier’s duty is performed if he delivers them to B.,although the unexpressed intention of the forwarder was, that they should be delivered to A.” (Samuel v. Cheney, 135 Mass., 281.)

The doctrine, so stated, is also asserted by the supreme court of the United States, in different words, but with equal explicitness. “The undertaking of the carrier to transport goods, necessarily includes the duty of delivering them. They are to be delivered at the place of destination, to the party designated to receive them, if he presents himself, or can with reasonable efforts be found, or to his order.” (North P. R. R. v. Com. Bank, 123 U. S., 734.)

The principles thus “brought into view, are in ordinary cases decisive, and in a vital feature show the ground for a decision of the controversies arising upon this record. The single question left open, is in respect to their application, where, as here, the directions for delivering goods, or designation of the party to receive them, describes either of two persons, one of whom gave the order for the goods, while the consignors mistakenly supposed they were selling and shipping them to the other.

Disregarding the other circumstances, a right of recovery in this action is first predicated upon the proposition, that, the intention of the shippers is the controlling fact, and hence a delivery in contravention of it, was a conversion of the goods by the Express Co. For this contention, Cundy v. Lindsey, (3 App. Ca., 465,) is cited. But the case is not in point except upon the assumption that, in order to exempt the Express Co. from liability, the delivery must have passed the title? to Rothschilds. It was not a controversy of the shipper with the carrier, but between him and a party that bought the goods of an imposter, who got possession of them unaer circumstances very like those here involved, and the House of Lords ruled that as it was never the intention of the consignors to sell or send them to the imposter, the title did not pass. Consequently the purchasers were held in trover for their value. That is not the question for decision here, however, “because,” says a court of great authority,commenting on Cundy v. Lindsey, in a case before it, at all fours with this, the “liability” of the “common carrier does not necessarily turn upon it. ” (Samuel v. Cheney, 135 Mass., 278.) Nor is the Gundy case aided at this point by anything in Hamet v. Letcher, (37 Ohio St., 356.) The controversy there, in no way touches the questions decided in Samuel v. Cheney,supra, nor is it intimated that the rule of the English adjudication would be applied to a case like this. Neither,therefore,as we think is relevant to the point now under consideration. Closer, perhaps, in its application, is Pacific Ex. Co. v. Shearer, (160 Ill., 215-52, Am. St., 324, ) also relied upon. This was decided by a divided court, and the facts are materially different from those before us. There, a telegram for $4,000 was sent by an imposter to Shearer, in the name of a responsible person with whom the latter had dealings. Believing it genuine, he sent the money by an Express Co.,whose agent delivered it to the man who had wired for it, at the place of destination, which, however, was not the residence of the one whose name had been fraudulenly used. The Express Co. was held liable for a wrongful delivery, The decision seems to be put upon the ground that the money was obtained by forgery, and so the same principle would apply as. in case of delivery got by forging the name of a consignee. It possibly -may stand, also, upon the carrier’s negligence. In either view, it is distinguishable from this case, which, in the aspect now presented, clearly falls into the class holding that “if two men of the same name, live in the same town, and one of them orders goods from a merchant at a distance, and the carrier delivers the goods to the man of that name who had really made the order, the carrier is not to be held responsible simply because the consignor-thought his order was from the other of the two men.” (Wilson v. Ad. Ex. Co., 27 Mo. App., 360; Samuel v. Cheney, 135 Mass., 278; 9 Am. St., 514.) This conclusion is also well supported by “the principle of equity that where-one of two innocent parties must suffer from the fraud of a third, the loss should fall on him who enabled such third party to commit the fraud.” (Hamet v. Letcher, 37 Ohio St., 359; Dean v. Yates, 22 Ohio St., 396.)

II. On the remaining question as to the negligence in the delivery,how stands the case with reference to the facts? Rothschilds was known in Hopkinsville, as T. M. Jones.. The merchant resident there was of the same name. The-designation in the “terms of the shipment” therefore, was-alike applicable to either of the two. One had given the order on which the goods were sent, and to him, after inquiry sufficient to satisfy of that fact, the agent of the Express Co., delivered them. As against the carrier, then,, upon what ground of justice can the shippers say that T. M. Jones, whose order they received and acted on, is not the-party “designated to receive them?” His name was not fictitious. The case, therefore, is manifestly the same as it would be had it been Rothchilds’ truéname, and two T. M, Joneses,one of whom recently came to the place, were there. Now, is it reasonable to permit the consignors to unload the loss primarily caused by their mistake respecting the person with whom they dealt, upon the carrier, who finds that party, and without notice of the error, delivers the goods to-him.? We think not. And emphatically so, when the conduct of Oskamp,Nolting & Co. is taken into account. They were strangers to T. M. Jones, of Hopkinsville, save as by the book of a commercial agency, they found him to be-there in the “general merchandise business.” Had they, in view of that fact, addressed the packago to him with the-descriptive addition of “merchant,” or“dry-goods dealer,”' instead of the naked name of T. M. Jones, the case would be quite different. Besides, we cannot doubt that by a precaution so simple as this,and one which,under these circumstances, ordinary business prudence clearly dictates, the scheme of fraud would have been frustrated, and all serious loss prevented. Apparently, then, there is much better ground for predicating a wrongful delivery upon negligence of the shipper than of the carrier, Or, looking at the facts in another view, the consignors are by their own acts estopped from saying that the goods were not given to the party designated to receive them. Against this, however, it is urged that had the Express agent refused a delivery until he' could communicate with the consignors, the fraud would have been exposed, and loss avoided. His failure to do so, is therefore said to be a lack of care which will make the carrier liable. But, allowing that in this instance,the course suggested might have been effectual in defeating the scheme by which Rothschilds got the goods, was it the agent’s duty to pursue it? There is nothing to show that he' had reason to suspect the good faith of Rothschilds, who, in fact, was the T. M. Jones that ordered, was expecting,and demanded the goods. If it turned out that he was entitled to them,the refusal to deliver, even if qualified, might subject the company he was serving, to an action for their conversion. (McEntee v. N. J. S. Co., 45 N. Y., 34.) Now,as a practical matter of business, is it just, or required by sound policy, that after finding the purchaser, who answers also to the description in the directions of the shippers, their undisclosed intention shall compel the carrier to assume such a burden, with its contingent liabilities,or be responsible to them ás for a wrongful delivery? On the facts presented by this record, in our opinion, not. While in some instances that obligation might arise, the grounds for it are not here apparent. Nor does this case fall within the rule of decisions in which, where a purchaser has personated some fictitious person to whom the goods were addressed, and the carrier delivered, them to a stranger without inquiry as to who or what he1 was, simply upon their being asked for, it has been held liable on the ground of negligence. (9 Am. St., 514; Price v. O. R. Co., 50 N. Y., 213; Winslow v. Vt. R. R. Co., 42 Vt., 700; So. Ex. Co. v. Van M., 17 Fla., 783; H. R. R. Co. v. Adams, 49 Tex., 748.) The discussion need not,, however, be prolonged. In a case, covering this like a-blanket, the opinion contains a passage, which so strongly expresses the proper view to be taken of the controversy here, that we transcribe it. There, an impostor assumed the-name of one A. Swannick, residing at Saratoga Springs,asRothschilds did that of T. M. Jones, of Hopkingville, and thus was enabled to obtain a delivery of goods exactly asRothschilds succeeded in doing. In an action against the-carrier, for a wrongful delivery, recovery was denied the consignor, the court saying: “Suppose upon the arrival of the goods in Saratoga Springs, the impostor had appeared and claimed them; to the demand of the defendant upon-him to show that he was the man to whom they were sent,, he replies: “True, there is another A. Swannick here, but he has nothing to do with this matter; I am the one who-ordered and purchased the goods; here is the bill of the-goods, and here is the letter notifying me of their consignment to me.” The defendant would be justified in delivering the goods to him, whether he was the owner or not, because he had ascertained that he was the person to whom the plaintiff had sent them. It is true, the defendant did not make these inquiries in detail; but if by a rapid judgment, often necesary in carrying bn a large business, he became correctly satisfied that the man to whom he made the delivery, was the man to whom the plaintiff sent the goods, his-rights and liabilities are the same as if he had pursued the-inquiry more minutely. The plaintiff contends that he intended to send the goods to Arthur Swannick. It is equallyIrue that he intended to send them to the person with whom he was in correspondence. We think the more correct statement is, that he intended to send them to the man who ■ordered and agreed to pay for them, supposing erroneously, that he was Arthur Swannick. It seemsYo us, that the defendant, in answer to the plaintiff’s claim, may well say, we have delivered the goods intrusted to us, according to your ■directions, to the man to whom you sent them, and who, as we were induced to believe by your acts in dealing with him, was the man to whom you intended to send them; we are .guilty of no fault or negligence.” (Samuel v. Cheney, 135 Mass., 281.) The able note by Mr. Freeman, (9 Am. St., 513,) in which he analyzes the adjudications upon the liability of carriers for ‘‘delivery to a wrong person,” and classifies them by their different facts, agrees with the result at which we arrive, in a case like this. To the same effect is Lake etc., R. R. Co. v. Luce & Co. (11 Ohio Cir. Ct., 343.)

Arthur A. Clark, (Chillicothe,Ohio,) Qholson & Cabell, ■(Cincinnati, Ohio,) for Plaintiff.

A. B. Cole, (Chillicothe, Ohio,) for Defendants.

'Our conclusion obviously renders consideration of the •amount of recovery, which might arise upon a different holding, wholly needless.

We are compelled to say then, that the finding below is not sustained by the evidence. The judgment of the common pleas is therefore reversed, and a new trial awarded.