text:
    (Fifth Circuit — Holmes Co., O., Circuit Court,
    November Term, 1896.)
    Before Pomerene, Adams and Kibler, JJ.
    PETER LEPLEY ET AL. v. NANCY SMITH.
    (This decision involves, also, five other cases.)
    Will — Absolute poiver of disposition gives entire estate.

    The following provision in a will: “I give and devise to my beloved wife, Nancy, all my property, both real and personal, to have and to hold during her natural life, and to dispose of as she sees fit,” vests the wife with the whole estate and absolute ownership, the words “to dispose of as she sees fit, ” enlarging the life estate into a fee.

      Same — What not held execution of power of disposition — After-acquired property when ivill not pass by will.

    Where the will of the wife was made five years before the death of the husband, who, in his will, made shortly before his death, devises all his property to his wife to be disposed of by her as sle sees fit, her will can not be considered as a valid execution of the power of disposition given her in her husband's will, and where there is nothing in the, will clearly or manifestly indicating an intention to pass the property afterwards acquired by.the will of her husband, she will be considered to have died intestate as to the property devised to her by her husband’s will.
    Error to the Court of Common Pleas of Holmes county.
   The chief contention between the parties arises upon the construction of the will -of William Casey, and, as a sequence, the construction, or, rather, the legal effect of the will of Nancy Casey,

William Casey died on or about the 23rd day of April, 1893. His will bears date April 21st, 1893. It was probated on or about the 27th day of April, 1893, but no letters were then issued. Afterwards, Robert Graham was appointed administrator of .the will annexed. I have not found the date of his appointment, and it is not material.

Nancy Casey died about four weeks after her husband. William Casey. Her will is not dated, but was executed, as stated at the argument, about five years before her death.

In his will, William Casey gave and devised to his wife, Nancy:

“All my property, both real and personal, to have and to hold during her natural life, and to dispose of it as she sees fit, except the farm in Wolf Creek, now occupied by Casey Purdy, which I now give and devise to Casey Purdy, after my wife’s death to be his adsolutely, providing he keeps her in coal and wood, and attends to her wants while living. I also exempt the forty acres of land on the ridge adjoined to Jud. Brinks on the east, and Eliza on the west, which I do hereby give and devise to Emily Shilts, and to be hers absolutely to dispose of as she sees fit. I do hereby revoke all former wills.”

This is the whole will, except the formal opening and closing paragraph.

Nancy Casey, by her will, said:

“I give and devise unto my brother and sisters, and their heirs, all my property, both real and personal, moneys and effects, except Fanny Leatherow’s children; they are to have nothing; the same to be divided equally between said brother and sisters or their heirs, as above stated, excepting Peter Lepley and Nancy Smith. I give them one hundred dollars apiece more than the rest of the heirs.
“I give and devise unto my brother and sisers all my household goods, wearing apparel etc., as above, stated, excepting Fanny Leatherow’s children are to get nothing whatever.
“I want my beloved husband, William Casey, to retain possession of all the above described property, moneys and effects during his natural lifetime, unless he sees fit to divide the above described property as above stated.”

This is a copy of the whole will, except the formal opening, the clause nominating Peter Lepley as administrator of the will, with authority to compromise, reject, release and discharge the claims and debts due her; the clause directing no appraisement or sale of her personal property; the clause revoking all former wills, and the formal closing and execution.

Within two or three days after her death, her will was probated, and letters testamentary were issued to Peter Lepley.

I shall confine what I have first to say to the action No. 2166, in the court of common pleas and No. 121 in this court, which is the action brought by Peter Lepley, as Executor of the will of Nancy Casey et al., against Nancy Smith and others, which seeks the construction of both wills, and asks the direction of the court as to the administration of the two estates.

The first question is: What is the legal effect of the words of the will of William Casey, where he says: “I give and devise to my beloved wife, Nancy Casey, all my property, both real and personal, to have and to hold during her natural life and to dispose of as she sees fit?”

Do these words, construed with the other provisions of the will, without reference to any execution of the power conferred by the words, ‘‘and to dispose of as she sees fit,” pass to her a fee or an unlimited ownership or estate in all his property, real and personal?

We have all appreciated the nicety and difficulty of determining this question, and have diligently examined all the authorities cited. We recognize the duty of the court to endeavor to árrive at the intention of the testator, if possible, and to keep that purpose in view as the basic and safest guide to the construction.

We have no direct authorities or cases in Ohio to assist us, and have not received much light from the conflicting conclusions in other states.

I announce the conclusion of the majority of the court to be that those words as they appear in the will, and from.the language of the whole will, and without any reference to an execution of the power, do confer upon Nancy Oasey the whole estate of William Casey in the property mentioned, except as to the two tracts of land mentioned,in one of which she had a life-estate; that the words, “and to dispose of as she sees fit,” enlarge the life estate into a fee, or an absolute disposition of the estate. The whole court regard these words as an unlimited power of disposition. A majority of the court further hold that these words, being the last in that connection, control and enlarge the words, “during her natural life. ” They are impressed with the language of Judge Ranney in the case of Pruden v. Pruden, 14 Ohio St., 255, viz:

“An absolute and uncontrolled power of disposition at ■the mere will and for the purposes of the holder of property, is of the very essence of absolute ownership.”

The principal case relied upon by counsel for the estate of William Gasey, deceased, are: Brant v. Coal and Iron Co., 93 U. S., 927, and Wiley v. Gregory, Ind., found in vol. 38, No. 6, p. 121, Central Law Journal.

Other cases and authorities are, of course, cited and relied upon, but these two cases are the principal reliance.

Volumes 1 and 4, of Am. Lead. Cases on Real Property, have not been overlooked.

The Brant case decides that where a testator made a bequest to his wife of all his'estate, real and personal, to have and to hold during her life, and to do with as she sees proper before her deatlq the wife took an estate for life only in the property, with only such power as a life tenant can have, and that a conveyance of the real property so devised, conveyed no greater estate. A majority of the court do not follow this case. They are of opinion that the tendency of decisions in Ohio is that under such a power the devisee for life can convey or dispose of the fee, Davis v. Corwine, 25 Ohio St., 675; Johnson v. Johnson, 51 Ohio St., 446.

In fact that is the precise condition of the court in the case of Bishop v. Remple, 11 Ohio St., 277. The testator devised to his wife all his property, real and personal, * * * with full power to have and to hold, to sell and convey the same during the term of her natural life. The wife sold and conveyed in fee a part of the real estate. It was held that the wife had power to sell and convey the fee,

This case has not been overruled, qualified or distinguished.

In the Brant case, nothing is said concerning the presumptions that a testator is not supposed to intend to die intestate as to any of his property, and that he will not be presumed to intend to leave any part of his estate undisposed of.

The majority of the court also rely upon such cases as Hale v. Marsh, 100 Mass., 468, and VanGolder v. Smith, 99 Ind., 404.

In the Indiana case the will contained a bequest of personal property to the wife, with power to use and control it as long as she might live, and, at her death, to dispose of it by will or otherwise. There was no devise or disposition over. It was held that this was a bequest to her of the property absolutely.

In the case of Wiley v. Gregory, cited from the Central Law Journal, relied upon by counsel for William Casey’s estate, it is said by the court:

“The case of Van Gorden v. Smith, supra, bears evidence of a much more laborious consideration than the case of Hole v. Marsh, and we think the conclusion therein reached was unquestionably correct. It is to be observed, however, that the will of William Huddleson, involved in that case, did not attempt to dispose of a remainder. That fact alone exerted great influence in inducing the conclusion reached in that case. In that respect the case differs from the one now under consideration. ”

So that the Indiana case, cited from the Central Law Journal, really approves the case in 99 Indiana.

The majority of the court also rely upon section 5970, Revised Statuts, and holds that it does not clearly appear by the will of William Casey that he intended to convey an estate less than his whole estate.

The case of Johnson v. Johnson, 51 Ohio St., 446, is similar to the case cited from the Central Law Journal. In each case there was a devise or bequest over.

I do not go as far as the majority of the court. I am unable to satisfy myself that the words: “to have and to-hold for her natural life,' and to dispose of as she sees fit,” alone, without reference to the execution of the power, convey a fee or the whole property in the estate, real and personal.

In my judgment, the words “to have and to hold for her natural life,” are the effective and controlling words, and the words “and to dispose of as she sees fit,” confer only a privilege of disposition, which she may exercise, or not; and if not, the estate is for life, only.

Now comes the second question: Did Mrs. Casey exercise the power of disposition?

It is conceded on all sides that if she had exercised the power to dispose of the property covered by William Casey’s will, the effect would be the same as if the words, “for her naurallife” had been omitted. This is the law in Ohio as stated in Bishop v. Remple, 11 Ohio St., 277.

Did she, then, exercise the power by her will? A will often, and to some extent, always speaks from the death. The statute, section 5969, is claimed to be a sort of blanket which enlarges and covers all the property, if the language or manifest intention is not to the contrary. That section is:

. “Any estate, right or interest in lands or personal estate, or other property, acquired by the testator after the making of his will, shall pass thereby in like manner as if held or possessed at the time of making the will, if such clearly and manifestly appears by the will to have been the intention of the testator.”

■The question, then, is: does it clearly and manifestly appear by her will that it was the intention of Mrs. Oasey that the property acquired under the will of her husband shall pass to the beneficiaries therein named ? She gives and devises, “all her property, .both real and personal, moneys and effects.”

It has been held in Massachusetts that after-acquired property passes unless a contrary intention shall appear by the will, and that the intensives clearly and manifestly cannot, under the statute,have any well defined or precise effect in the construction of the will. Cushing v. Aylwin, 12 Met., 169; Brennan v. Savier, 1 Cush., 118; Wart v. Belding, 21 Pk., 129.

In Cushing v. Aylwin the court say:

“We think it generally true that when a will purports to'dispose of the testator’s whole eatate or property, the intention is to dispose of all the estate or property of which the testator may be the owner at the time of his death, and that such an intention would be inferred unless something in the will would be opposed to such inference.”

In Pruden v. Pruden, 14 Ohio St., 255, it is said:

“It very seldom happens' that a man who goes to the trouble of making a will, intends to die intestate as to any of the property he may own at the time of his death.”

But it is claimed, that the will of Mrs. Casey is not, in any sense, a valid execution of the power, for the reason that to execute the power, there must be a direct reference to it, or a clear reference to the subject, or property, or unless the provision made by the person entrusted with the power would have nothing to operate upon unless the act were considered an execution of the power. This doctrine is expressed in different forms, but the above is the substance.

I can find but two cases in Ohio which directly touch upon this subject. One is the case in 11 Ohio St., just mentioned. The other is the case of Arthur v. Odd Fellows, 29 Ohio St., 557. In the latter case, the case in 11 Ohio St.,is not anywhere mentioned or alluded to, In the case in 11 Ohio St, a testator devised to his wife, “all his property, real and personal, as may remain after claims against the estate are satisfied,’with full power to have and to hold, to sell or convey the same during the term of her natural life” The wife sold, and by a deed in the usual form,conveyed in fee-simple certain of the real estate which passed under the will of the husband, describing the land, but making no reference to the will It was held that the wife had full power to convey in fee, and that the deed was a sufficient execution of the power

In that case there was a single instrument which conveyed part of the property devised by the will, and no other property of the wife

A majority of the court feel constrained to conclude, under the authority of the two cases in Ohio, that the will of Nancy Casey is not a valid execution of the power contained in the words, “and to dispose of as she sees fit”

The next question is: Did Nancy Casey die intestate as to the property devised or bequeathed under the will of William Casey?

A majority of the Court do not find anything in the will of Nancy Casey which clearly and manifestly indicates an intention to pass the property disposed of by the will of William Casey.

The majority of the court do not think that the words “all my property, both real and personal, moneys and effects,” make it clearly and manifestly to appear that it was her intention to dispose of the property acquired under his will. The circumstances are opposed to the view of such clear and manifest intention. The will was made five years before his or her death. It seems clear that she had in view her own property only. She reserves to her husband a life estate, or the use for life, of all her property Her expectation then was that he would outlive her.

We do not think that the case of Pruden v. Piuden, 14 Ohio St., 251, is a clear decision to the effect that such language as is used in her will passes the after-acquired property.

The case in Massachusetts, cited, that after-acquired property passes unless a contrary intention appears, and that the words, “clearly and manifestly,” have no well defined or precise effect in the construction of wills, seem to a majority of the court to avoid the effect of words, which are plain and precise, and that to apply that doctrine in a case like these at bar would be to treat the statute as’if the words, “clearly and manifestly,” were omitted.

The conclusion of the majority of the court upon this subject is, therefore, that Mrs. Casey did die intestate as to the property owned and bequeathed to her by her husband, and that it is to be transmitted, under section 4162, Revised Statutes, viz,,-, one-half to her estate, and one-half to the brothers and sisters of William Casey.

A decree may therefore be taken accordingly. The costs to be paid, one-half from the estate of Nancy Cásey and one-half from the estate of William Casey.

We have not thought it necessary to specifically pass upon the other questions made in the argument.

The conclusion reached in the principal case disposes of case No, 2140 in the common pleas, No. 120 in this court. There may be a decree for partition among the heirs at law of Nancy Casey, of all her lands, in the proportion set forth in the petition; and for partition of the lands of William Casey, one-half to the brother and sisters of Nancy Casey, and one-half to the brothers and sisters of William Casey, as provided in section 4162, Revised Statutes. The costs in that case are to be paid in the same manner, We have named the same commissioners as in the court of common pleas',

Hon. W. Stillwell and Hon. JR. A. Harrison,on behalf of Peter Lepley, Executor of Nancy Casey, deceased.

Hon. JR. M. Voorhecs,S. H¡ Nicholas and B. S. Church, on behalf of Robert Graham, as Administrator of William Casey, deceased.

The case is remanded to the court of common pleas to carry the judgment of this court into execution.

In the case of Robert Graham, Administrator v: Peter Lepley, Executor, No, 2109 in the common pleas court, and No, 118 in this court, the appeal is dismissed at the costs of appellant.

We are of the opinion that the action is not appealable, and is remanded for execution for costs.

In the case of Peter Lepley, as Executor, etc. v. Robert Graham, Administrator, etc., No. 2109 in common pleas court, and No. 126 in this court, we reverse the judgment of the court of common pleas, but we further find that the executor of Nancy Casey is entitled to administer to personal estate of William Casey, deceased, but must pay one-half of the net proceeds of that personal estate to the administrator of William Casey, deceased. We adjudge the costs against the plaintiff in error, and remand the case.

In the case of Peter Lepley, as Executor, etc. v. Robert Graham, Administrator, e., No. 2220 in the court of common pleas, and No. 125 in this court, we affirm that judgment.

In the case of Peter Lepley, as Executor, etc, v. Enos Casey et al., No. 2126 in common pleas court, and No. 119 in this court, our judgment is the same as the judgment of the court of common pleas; that is to say': The supposed election of Nancy Casey to take under the will of William Casey, deceased, as entered of record in the probate court of Holmes county, is set aside, and judgment to be of no effect. The costs are adjudged against the estate of William Casey, deceased, and cause remanded.


source: Caselaw Access Project

author: Finley, J,

license: Public Domain

text:
    (Third Circuit, Hancock Co, O., Circuit Court,
    December Term, 1896.)
    Before Day, Price and Finley, JJ.
    ABRAM KEEL, EXECUTOR OF SAMUEL KEEL, v. HENRY RUDISELL.

      Statute of Limitations — Endorsement of payment onnoteby holder not binding to take claim out of statute — Burden of proof.

    1. Where part payment of e promissory note endorsed on the back thereof, is relied upon to save the cause of action from the bar of the statute of limitations, and where the note on its face is barred by the statutes, and such part payment is denied by the party sought to be charged, the burden of proof is on the party seeking to recover to show that such payment has been made.

      Endorsement as evidence of payment—

    2. The endorsemeutof payment on the note in such case is not prima facie evidence of such payment, when not made by or in the hand-writing of the party sought to be charged.

      Part payment by one joint maker not binding on other—
    3. A part payment of a note by one of several joint makers will not save the running of the statute against any of such joint makers, except the one making such part payment.
    Error to the Court of Common Pleas of Hancock county.
   Finley, J,

On the 5th day of November, 1872, one Wm. Kirtland, as principal, and Samuel Keel and Miner T. Wickham, as sureties, executed to defendant in error, Henry Rudisell, their promissory note.

Suit was commenced on said note by defendant in error, October 25, 1894, and therefore the note on its face was barred by the statute of limitations; but a series of credits appear on the note, amongst others a small payment of date June 5, 1X82.

It is conceded that unless this last payment was made, the note is barred by the statute of limitations, as all of the other payments appear to have been made more than fifteen years prior to the commencement of the action.

Samuel Keel, the surety, died March 19, 1893. This suit was brought against his executor to recover the amount of said note and interest.

The plaintiff in the action alleges, in the usual form, that the defendant is indebted to him on the promissory note, a copy of which is set out in the petition with the endorsements of payments thereon, in the sum of $274.14, for which he prays judgment.

The defendant, Keel,in his answer, denies each allegation of the petition, pleads the statute of limitations, and especially denies that any payment was made on said note on June 5th,1882.

Trial in the court of common pleas resulted in a verdict for plaintiff for the full amount of the note, and the defendant below, Abraham Keel, prosecutes error to this court to reverse the judgment of the court of common pleas.

The court, on the trial below, charged the jury that the burden of proof was on defendant, Keel, to show that the alleged payment endorsed on the back of the note was not made, which charge, amongst other things, is assigned for error here.

Some testimony was given on the trial tending to show that Wm. Kirtland, the principal maker of the note, had made the payment of date June 5, 1882; but no testimony whatever was given tending to show that defendant, Keel, had either made said payment, or was privy to the making thereof by Kirtland,or had knowledge that Kirtland had made'such payment.

The plaintiff introduced the note, and rested. The defendant undertook to prove the negative, that the alleged payment credited on the back of the note was not in fact made, especially by William Kirtland, and, therefore, not having been made in fact, though credited, the alleged cause of action was barred by the statute of limitations.

On whom does the burden of proving payment rest? By virtue of section 4980, Revised Statutes, the cause of action in this case would be barred by the statute of limitations within fifteen years after the making of the said payment endorsed as of date June 5, 1882.

Section 4992 of the Revised Statutes of Ohio, provides as follows: “(1.) When, payment has been made upon any demand founded on the contract; (2,) or a written acknowledgment thereof, or promise to pay the same has been made, and signed by the party to be charged; an action may be brought thereon within the time herein limited after such payment, acknowledgment or promise

In the latter clause it is the acknowledgment or promise in writing signed by the party to be charged, that prolongs the right of action against him. Why ? Because, by executing such promise in writing, he obligates himself anew, and to maintain an action under this latter clause of the statute, if the note was barred on its face, the party seeking to enforce collection, would have to allege and prove, •not only the making of the note, but the making of the subsequent promise in writing.

And where a note has several joint makers, no one would claim that the acknowledgment and promise in writing by one of such joint makers would prevent the running of the statute against the others, who did not acknowledge or promise in writing. He could bind himself by his own written promise, but he could not bind the others.

Now, is not the rule exactly the same where it is claimed that the running of the statute is saved by payment having been made on the debt?

In the one case the cause of action is prolonged (in the case of a promissory note), for fifteen years from the time of the making of the promise in writing, upon the principle, that the debtor thereby renewed the promise by a new contract; and in the other, upon the same principle, that he renewed the contract in the other mode provided by statute, viz., by the payment of part of the obligation. The modes are different, but the principle is the same.

Therefore, in a case like the one at bar, where the note in question appears upon its face to be barred by the statute of limitations, and a payment endorsed thereon is relied upon to bring it within the exception provided by section 4292, the party relying upon such payment has the burden of proving that such payment was in fact made, and especially where, in a case like this, the party sought to be charged puts such payment in issue by a denial thereof.

Does the introduction in evidence of a note with the endorsement of a credit on the back thereof, the credit not signed by the party to be charged, amount to prima facie evidence of such payment?

We think not. The endorsement of credit is not part of the note. It is not the act of the party sought to be charged. It is a mere memorandum, supposedly made by the holder thereof, and unlike the note itse'lf, it is in no manner conclusive against the maker of the instrument.

It must be noted under the statute that it is not the endorsement of a credit on the note that takes the case out of the statute, but it is the payment, the language of the statute being, “when payment has been made on any demand founded on contract,”

Nothing is said about endorsement on the note. The endorsement of a payment is the mere method of convenience to the holder to perpetuate the date and amount, in convenient form. Suppose, in the case at bar, the alleged amount of date June 5, 1882, had in fact been made, but no endorsed on the back of the note. Does any one question the right of the party relying on such payment to prove the fact of such payment by the party sought to be charged to save his cause of action from the bar of the statute of limitations? Certainly not. He would have the undoubted right to make such proof, and if made, it would save the running of the statute. It might be more difficult to prove the payment to the satisfaction of a court or jury, but his right to do so is undoubted. The fact of payment, or the right to prove it, it is in no wise dependent upon such payment being endorsed upon the instrument. Therefore, the introduction in evidence of a memorandum of payment endorsed upon the back of a note,and not made or acknowledged by the party sought to be charged, does not tend to establish such payment. If the rule were otherwise, it would open the door to unlimited fraud. It would enable a dishonest holder to make a fraudulent endorsement on the back of a note barred by the statute of limitations, and in a suit against the maker, give the note in evidence, rest his case, and thereby cast upon the victim of his fraudulent act the burden of proving the negative fact, viz., that the payment thus apparently made and thus prima facie established, was not in fact made; and this, too, under a statute which makes the payment, and not the endorsement, the saving clause by which the right of action is perpetuated.

The case at bar presents a good illustration of the impropriety of the latter rule.

Here the maker of the note is dead. His evidence as to whether he made the alleged payment of June 5, 1882, cannot be obtained. No memorandum or acknowledgment of said payment signed by him is claimed to be in existence. All the proof of such payment is to be found in the endorsement, supposedly made by the holder on the back of the instrument. Now, if this endorsement is proof, even prima facie, then the burden is thrown upon his executor to prove the negative fact of'non-payment, and that was exactly what was attempted to be done in this case. He was not called upon to do it. When the plaintiff rested his case, he had established nothing thatpntitled him to recover in this action, and the subsequent proof did not supply the failure to prove the actual payment of the item of date June 5, 1882-, without which proof the plaintiff’s right of action, was clearly barred by the statute of limitations.

But even if the rule were not as here stated, and if the introduction in evidence of the endorsements on the back of the note tended to prove such payment, the plaintiff was, nevertheless, not entitled to recover under the evidence in the case.

Taking the evidence all together, the most that can be claimed for if is that it tended to prove that William Kirtland, the principal maker, made the payment of date June 5, 1882, on the note.'

What if he did? That did not prevent the running of the statute as to Keel. This judgment is against Keel. It is not contended that Keel made the payment, and unless Keel made the payment; he or his estate would not be liable in this action, for the reason that the statute continued to run as to him, and the right of action was clearly barred as to him when this action was begun,

William Kirtland, by making the payment, could thereby make a new contract binding upon himself, but he could not bind Keel by such payment, or make a new contract for Keel.

This is well settled in Ohio. First,in the case of M’arintbal v. Mosler, reported in the 16th Ohio St., where the court held that the payment of a dividend by the assignee of an insolvent debtor, was not such part payment as would take the case out of the statute as against the debtor, on the ground that it was not the act of the debtor.

Again, in Hance v. Hair, 25 Ohio St., 34, the same doctrine is upheld.

It is contended that Glick v. Crist, 37 Ohio St., 388, holds a contrary doctrine.

Instead of holding a contrary doctrine,it affirms the principle herein stated. In that case the surety stood by and saw the money paid, and consented to it, and it was held that, by so doing, it was equivalent to making the payment himself. We have been cited to the case of Bank v. McIntyre, 40 Ohio St., 528,and it is contended that the court there holds that the burden of proof is upon the defendant. An examination of that case discloses that the question there decided has no relevancy whatever to the question at issue here. ■ ■

JR. G. Dunn, for Plaintiff in Error.

Kinder & Boss, for Defendant in Error.

The charge of the court was erroneous in this case, respecting where the burden of proof lay, and was contrary to and against the weight of the evidénce, and the law' of the case.

The judgment of the court of common pleas is therefore reversed, and the cause is remanded for further proceedings in accordance with law.


author: Swing, J.

text:
    (First Circuit — Hamilton Co., O., Circuit Court,
    Nov. Term, 1896.)
    Before Smith, Swing and Cox, JJ.
    DUSANT L. PETERSON v. CHAS. SCHMIDT.

      Contract in restraint of trade.

    A contract in the sale of a business not- to enter into the same business within four squares of the old stand sold, is not an unreasonable restraint of trade, and will be enforced.

      Same — Opening Klee business in name of wife.

    Where a party,having agreed in the sale of his business not to engage in the same business within four squares of his old stand, opens a like business within a few feet, of four squares from his old stand, in the name of his wife, he working for her, such arrangement being obviously made to avoid the agreement entered into in the sale of the old business, he will be enjoined from carrying on such business.
    Appeal from the Court of Common Pleas of Hamilton county.
    This suit was to enjoin Schmidt from operating a bakery at 1900 Vine street. Schmidt sold the bakery at No. 113 Elder street to Peterson for $1,000, agreeing not to go into the business again within four squares of the old stand. The new business started by Schmidt at 1900 Vine street is carried on in the name of his wife, by whom he claims to be employed. The common pleas court granted a perpetual injunction aaginst a continuance of the new business by Schmidt.

      Joel C. Clore, and Tkos. L. Midhie, for Plaintiff.

      Von Seggern, Pharos & Dewald, contra.
   Swing, J.

We do not think it will be in the interest of justice that the injunction granted by the court of common pleas should be suspended. The contract that the parties entered into should be construed so as to give effect to the instrument, and in doing this it should have a reasonable construction. Now, taking the most favorable view of defendant’s claim, he would be engaged in the bakery business within a few feet of the four squares mentioned in the contract. This fact, taken together with the further fact that the business is claimed to be in the wife’s name, while he himself is 'working for his wife, indicates that he is endeavoring to avoid the terms of his contract, and shows bad faith on his part, and such conduct does not commend itself to a court of equity.

The contract is not against public policy. The limitation is reasonable, and'there is nothing to prevent the defendant from engaging in business at any place which in all reason is beyond the limitations to which he agreed in his contract, and for which he secured plaintiff’s money.


author: Pomerene, J.

text:
    (Fifth Circuit — Licking Co., O., Circuit Court,
    October Term, 1896.)
    Before Pomerene, Adams and Kibler, JJ.
    JACOB S. YOUMANS ET AL. v. THE BOARD OF EDUCATION OF THE PATASKALA SPECIAL SCHOOL DISTRICT OF LICKING COUNIY, ET AL.

      Power of schoolboards to appoint teachers — Interference by the courts.

    The statutes vest Boards of Education with the power to appoint teachers for their schools, and in the exercise of this power they can not be interfered with by the courts unless there is a gross abuse of the discretionary power given.

      Election of teacher — Vote of members — Sufficient compliance with sea. 3982.

    Where the minutes of the Board of Education in regard to the election of a teacher, show the aye and nay vote, and how each member voted, but do not expressly state that the roll was called, this is a substantial compliance with the requirements of section 3982,' Revised Statutes.

      Action to enjoin schoolboard by taxpayer — -Neither sec’s 1277-8, nor sec's 1777-8 apply to schoolboards.

    A tax payer may institute an action to restrain the school board from doing an illegal act. Neither sections 1277-78, Revised Statutes, nor sections 1777-8, Revised Statutes,apply to such actions against Boards of Education.

      Certificate of teacher — Must be procured before schools commence.

    A teacher may be appointed by the Board of Education who,, at the time, has no certificate, if he obtains one before the commencement of the schools.
    Appeal from the Court of Common Pleas of Licking county.
   Pomerene, J.

This case was beard upon a motion to suspend the injunction which had been made perpetual by the decree of the court of common pleas.

The petition in the case charges, or sets forth, that one Prof. Rusk was employed in 1895, by the Board of Education of this School District for a period of two years. That he served one year as teacher and received his pay therefor, and was about to enter upon a second term of the school year, commencing September, 1896. That the Board of Education, as now constituted, .has attempted to employ a man by the name of Green to act as Superintendent, and threatens, to interfere with Rusk acting as superintendent of the schools for the year 1896-7, and prays for an injunction that they may be restrained — the Board of Education and Green — from in any manner interfering with Rusk in his superintendency and management of the schools for that year.

Now, to this petition there is an answer, which admits two averments of the petition, and denies each and every other allegation of the petition.

The answer is very broad, and, perhaps, denies more than .it was intended to deny. It goes to the extent of denying that these plaintiffs are tax-payers and residents of this School District. It denies the employment of Rusk in 1895 for the period of two years. It denies that Rusk taught or superintended for a period of one year. That is a general denial to each that far. It denies that he entered upon his duties as superintendent. Denies that the Board of Education had prescribed certain rules of study for said school, and denies that Green or the Board of Education in any way attempted to interfere with Rusk as superintendent of the schools; but admits the fact, as averred in the petition,that, at the time of the employment of Green, the clerk of the Biard had not certified that there was money in the treasury to pay, or that a levy had been made to pay, for the services of a teacher.

This is submitted upon a motion to suspend the injunction which had been allowed.

To make the injunction perpetual, would- leave Rusk in the control and - management of the schools, as superintendent. ■ •

To suspend the .injunction, would leave the school in the management, and control of the Board of Education of the Pataskala School District.

We regret very much that a case of this kind is in this court, because no conclusion that this court can arrive at will render satisfaction to all the parties of that district, or can produce harmony in that School District. These quarrels arising in a school district cannot do much else than result in harm. Yet, the court has nothing to do with that. It has to pass upon this question as we think the law fixes the rights and powers of the parties.

We were cited by counsel for the plaintiffs to a cáse in the 10 O. O. Rep., and we think the syllabus of the case would apply to this case, and to all cases .of this kind. (Page 876):

“In the distribution of powers under the constitution of Ohio, certain political and civil powers are vested in certain public bodies, and these bodies, in the exercise of their powers,cannot be intefered with by other bodies or the courts.
“Gourts, however, have the power to enjoin when such bodies or officials are proceeding to make illegal contracts, and to some extent to interfere where there is a gross abuse of power. But courts have no power to set their opinion .or discretion against that of the body or officials acting within the scope of their powers.

I read that because it was cited by counsel for the plaintiffs, and we think that the principles laid down there are applicable to this case, and which we fully endorse.

The control and management of the schools of this state are given the boards of education,given by the statute to the boards of education, and these boards cannot be interfered with in any manner by the court unless there is a gross abuse of the discretionary powers given.

One of the powers given to the board of education is to employ teachers. Another is to provide necessary facilities for the school. Another is to regulate a course of study. That may be done by boards of education, and we think that the legislature has vested that power iu the board of education, and that cannot be’ interfered with by courts, unless there is seemingly a gross abuse of discretion.

Now, how does this case stand, as shown by the testimony ?

It appears from the affidavits, and from the record, as introduced by the parties for the motion, that this man Green was employed on the 28th day of May, 1896, for the period of one year, at the salary of eighty dollars per month. The minutes of the Board of Education were introduced in evidence, and read and show this:

“The Board met; all present; minutes read and approved; it is moved that we now proceed to the election of a superintendent. On motion E. W. Green was elected superintendent at a salary of eighty dollars per month. Yea: Ashbrook, Hawley, Edgerley and Framble: 4. Nay: Atkinson and Smith: 2. Clerks salary fixed at ten dollars for last year and fifteen dollars for the present year.”

Here it appears, that there was a majority of the Board of Education as thus constituted, and by a vote of four to two, this man Green was elected superintendent for the ensuing year.

Is this act illegal ?

It is claimed that this was not in accordance with the rule laid down by the Supreme Court in the case found in the 52 Ohio St., inasmuch as it does not state that the roll was called in pursuance of section 3982.

It is true that it does not state that the roll was called; but, by reading that case through, it clearly shows the yea and nay vote; and we think it is a substantial compliance with section 3982, and is so construed by the Supreme Court in the case named.

Another question is raised, that the appointment was illegal at the time of the employment of Green; that he had not a certificate, under the section of the statute requiring or stating that boards of education shall not employ teachers without having a certificate to teach the branches.

In the 22 Ohio St. 194, it is laid down as the rule that if the certificate is obtained before the time of commencing the school labor, that that is sufficient.

J. B. Jones and Fulton & Fulton, on behalf of Jacob S. Youmans et al.

Edward Kibler and John David Jones, on behalf of the Board of Education, etc.

There are some other questions that are claimed on the part of the motion here: that this petition is insufficient from the fact that these tax-payers cannot maintain this suit. And we are cited to section 1277-8 and section 1777-8 of the statute,

We do not think that either of these sections apply to this kind of a case. Sections 1277 and 1278 apply to the funds of the county. The prosecuting attorney may act,and on his failure, after being requested, any tax payer may, etc.

Sections 1777 and 1778 apply to municipal corporations; but neither one of these sections have any application here; and a tax-payer may commence a suit to restrain the board of education from doing an illegal act; and authority would be found for such a construction in the case in 35 Ohio St., 143.

Being of the opinion that for this court to interfere with the action of the board of education in the management of the schools in a matter that particularly belongs to them by statute, is something that this court has no right to do, this motion is sustained.


author: Price, J,

text:
    (Third Circuit — -Seneca County, O., Circuit Court
    Dec. Term, 1896.)
    Before Day, Price and Finley, J. J.
    VIRGINIA E. BOYD v. JOSEPH T. ROBINSON, et al.

      Contribution among wireties— When, enforaible—

    1. The right of one surety to contribution from his co sureties, does not rest upon contract, but arises from the application of general principles of equity; and it exists, whether such sureties are on the same or different bonds for the same purpose, and whether such bonds are of the same, or different dates and amounts, and also whether such sureties are jointly, or jointly and severally liable.

      Same—
    2. A trustee of a non-resident minor gave bond with sureties according to the laws of Ohio, for the faithful administration of his trust; and at a later period of time,such ward and trustee by parol contract, without the knowledge of the sureties on the bond, procured and induced a third party to assign to and place in possession of the ward, valuable personal property in pledge, as additional security for the trustee to said ward. The trustee after-wards died insolvent and largely indebted to his ward, to the satisfaction of which liability, the ward applied the property so pledged.
    Held: That the pledgor has a right to contribution from the sureties on the bond of the trustee.
    Error to th'e Court of Common Pleas of Seneca county.
   Price, J,

The plaintiff filed her petition in the court below, and states, in substance, as her cause of action against the defendants, that on the 5th day of April, 1879, James T. Boyd was appointed trustee of the estate of Stella Everett, a minor non-resident of Ohio, which appointment was made by the probate'court of this county, and that Boyd accepted and qualified by giving bond as such trustee in the sum of f>(i, 000.00, with Joseph T. Robinson and William H. Free, the defendants, as his sureties, which bond was conditioned for the faithful performance of such trust and the accounting for and payment of all money by him received in his trust capacity. The bond was approved, and the trustee entered upon the discharge of his duties, and a large amount of money, property and credits belonging to his ward, Stella Everett, came into his hands as such trustee, and when he- filed his final account with the probate court there was found due the ward, as a balance, the sum of $2,304.00, with interest from December 18, 1887, which amount, on the 5th day of June, 1888, the probate court ordered paid over according to law.

It further appears in the petition that after the filing of the final account and before the order to pay over was made, to-wit: on the 11th day of August, 1887, the trustee, James T. Boyd, now. deceased, executed and delivered to defendant Robinson, .a mortgage deed on certain real estate owned by the- trustee, to indemnify and save Robinson harmless as surety on said bond.

On the -29th day of December, 1888, about six months after Robinson had received .this mortgage of indemnity, and about six months after the order to pay over had been made by the probate court, the plaintiff says she was the owner of a paid-up policy of insurance on the life of said James T. Boyd, issued by a certain insurance company, in the sum of fifteen hundred dollars, which was payable to her at the death of the insured, and that said sum so found due from said trustee to his ward, who had become of age, still remaining unpaid, in order to further secure the payment of said-sum'to said ward by said trustee, at the request of the trustee, Stella Everett, the ward, and the defendant; Joseph T. Robinson, 'the plaintiff was induced to, and did, on said 29th day of December, 1888, assign, transfer and deliver said life insurance policy to Stella Everett, the ward, to be held as collateral security for the payment of the sum so found due from said trustee to said ward, and for which the sureties on said bond stood liable, and for which, also, the indemnity mortgage was liable.

She avers that she-so assigned, transferred and delivered said insurance policy in pledge as collateral, -to secure said ward, but that the transfer was without any other consideration but as surety for said trustee, and that to the extent of the policy, she became and was co-surety with the defendants for the payment of said trust funds.

•It further appears in the petition that as a result of a foreclosure of the indemnity mortgage held by defendant Robinson, the sheriff of this county, on the 26th day of June, 1889, paid of the proceeds of the sale of mortgaged lands of the trustee, $1,236.95, which was applied on what the probate court found due from him.

In September of this same year the trasteé died. This was about nine months after she transferred and pledged the insurance policy as before alleged. The trustee died insolvent, leaving a balance due and unpaid the ward of about $1,200.00, whereby the sureties on the bond became liable; and the policy pledged and transferred by the plaintiff became subject to and was appropriated for the payment of said balance. The defendants paid no part of the liability of the trustee.

It is also alleged that the defendant Free was and still is insolvent, and that on the 15th day of August, 1895, the plaintiff notified defendant Robinson of said payment out of the proceeds of said policy, and demanded contribution from Robinson, and on his refusal, brought this action to enforce contribution.

A demurrer to this petition was overruled by the court below, and defendants answered separately, but there is very little in the answer of either as to any important facts in the case.

Robinson says he denies that the plaintiff assigned or transferred the policy to Stella Everett,at his request; denies that it was made with his consent or procurement, and that whatever was done regarding the transfer and its purpose, was done and completed before he had any knowledge of the same; and he denies that plaintiff was co-surety with him, Defendant Free simply says that he had no knowledge of either the execution of the indemnity mortgage or of the transfer of the insurance policy, and says that the ward has been fully paid,but how or by whom it was paid, he fails to show.

It will be observed that there is no denial of the insolvency of defendant Free; no denial that the ward and trustee induced and procured the assignment of the insurance policy as further surety or security to the ward, but a mere denial that the defendant induced or had knowledge of the transfer.

The plaintiff moved for a judgment in her favor on the pleadings, which was refused, and a finding was made and judgment given in favor of defendants, which we are asked to reverse by a petition in error filed for that purpose.

We may say,in advance,that if the petition states a cause of action for contribution, there is nothing pleaded in either answer that constitutes a defense, and the plaintiff was entitled to a judgment on the pleadings, and the reasons for this conclusion will appear in the further consideration of the case; for, as we regard it, the whole question involved is the sufficiency of the petition.

Over the general rule and right to contribution between co-sureties, there is no contention, and we need not refer to the same, except by way of illustration. It is well known that the right to contribution does not rest on contract, but is the result of the application of genera] principles of equity, and depends upon the actual relation the parties sustain to the instrument and to each other.

This rule is elementary,and is also found in the first branch of the syllabus of the case of Oldham v. Broom, 28 Ohio St., 41. As we shall reason from general principles, well recognized, in deciding this case, we quote another rule stated by the Court in the same case on page 48. The Court says

“For this reason, where several parties to the same, or distinct instruments become sureties for the payment of a sum of money, and one pays more than his share, he may compel contribution from the others as co-sureties.
“Courts of law took jurisdiction of actions for contribution, on the ground that, as equity and good conscience demanded that as among co-sureties there should be equality of burdens, there was an implied assumpsit, which would support an action at law.'’

Also, see section 1418, Pom. Eq, Jurisprudence, Yol. 3:

“Where there are two or more sureties for the same principal debtor, and for the same debt or obligation, whether on the same or on different instruments, and one of them has actually paid or satisfied more than his proportionate share of the debt or obligation, he is entitled to a contribution from each and all of his co-sureties, in order to reimburse him for the excess paid over .his share, and thus to equalize their common burdens. The same doctrine applies, and the same remedy is given, between all those who are jointly, or jointly and severally, liable on contract, or obligation in the nature of contract. The right, however, may be controlled or modified by express agreement among the co-sureties or debtors,”

Hence, we see that sureties may be on different instruments, and instruments made at different times, and the principle applies whether the sureties are jointly, or jointly and severally liable, as this section reads.

Another principle is, that it makes no difference with the right of contribution, that one surety does not know that another becomes bound as such

In support of that principle, we quote from Brandt on Suretyship, section 223, 1st edition, which reads as follows:

“As the right to contribution results from equitable principles, and not from express contract, such right is not at all affected by the fact that the surety seeking contribution, or from whom it is sought, had no knowledge that the other had assumed the obligation of a surety for the same thing. Thus it has been held that a surety, who becomes such without the knowledge of one who is already bound, and pays ■the debt, may recover contribution from the first surety.”

See also 19 Pick,, page 26, where it is said, “that no agreement is necessary to entitle sureties who sign a note at different'times to contribution from' each other.”

There is still another principle interwoven with this right of contribution, which is, that the sureties may be on different instruments, and on instruments of different amounts of penalty. In other words, the different sureties may be on bonds of different amounts; The bond on which one or more is surety may be one sum, and others on bonds of a much larger or much smaller, sum. So that in so far as the extent of liability is important, the co-sureties are not "aequali jure,’’ We read from Brandt on,Suretyship, 1st edition, section 221, (Section 255, 2nd edition), as follows:

"Co-sureties are' liable to contribution, but sureties for the same principal who are not co-sureties are not so liable. Much of the learning on this subject is devoted to who are and who are not co-sureties. Where all the sureties sign the same instrument and become equally bound thereby, they are, of course, co-sureties, and liable to contribute to each other. So, also, when several sureties become bound for the debt, default or miscarriage of the same principal, with reference to the same transaction, even though they become bound by different instruments, at different times and for different amounts, they are generally considered co-sureties,and held liable to contribution. In the leading case on this subject the principal -was receiver of the fines and forfeitures of the customs of the outports. and to secure the performance of his duties gave three separate bonds in the same penalty, but signed by different sureties. It was held that the sureties in the three bonds were liable to each other for contribution. The Court said: ‘If a view is taken of the cases, it will appear that the bottom of contribution is a fixed principle of justice, and is not founded in contract. * * * In the particular case of sureties, it is admitted that one surety may compel another to contribute to the debt for which they are' jointly bound. On what principle? Can it be because they are jointly bound? What.if they are jointly and severally bound? What if severally bound by the same or different instruments? In every one of those cases sureties have a common interest and a common burden. They are bound as effectually quoad contribution, as if bound in one instrument, with this difference only, that the sums in each instrument ascertain the proportions; whereas, if they are all joined in the same engagement, they must all contribute equally.’ ”

Therefore, we assume the law to be, and it surely is, that if the plaintiff, at the time, and instead of transferring the insurance policy of $1,500.00, bad become surety on a bond of the trustee for that sum, and she had paid to the extent .of her bond as such surety, she could enforce contribution by the sureties on the original $6,000.00 bond, upon which the defendants are sureties.

To come within the rule that the cosureties must be “aequali jure” in order to maintain contribution, does not require that each and all are bound to the principal in the same sum, but for the same common purpose and relating to the same subject matter.

There is still another principle that may cast some light on the question. Suppose at the time the plaintiff turned over this policy, and in place of doing so, she had signed a bond for the same amount at the request of the ward, or her husband, the trustee, and when she became liable by reason of the default of the trustee, she had no money, but had land or other property; in such case she, with the consent of the payee, could turn over the land or other property in satisfaction of her bond, and having done so, enforce contribution against her co-sureties for the value of the property so turned over. It would not be necessary to wait for judgment on the bond against her as a basis for her action.

This principle is recognized in Brandt, section 250, 1st edition, (section 286, 2nd edition), and cases there cited:

“Where the surety paid the debt of the principal in lands, it was held, in a suit for contribution by him against a co-surety, that the price at which the lands were taken as payment by the creditor, would ordinarily be the amount on which the damages should be founded; but if the lands were taken at a very high price, as a compromise of a doubtful claim, the actual value of the lands might, perhaps, be the basis of the damages, and in s.uch case the actual value of the lands should be-allowed, no matter what they cost the surety.”

It was the ownership of property that qualified the defondants to become sureties, and had they become insolvent, the probate court would have exacted a new bond with competent sureties. From this we see that property qualifications must exist when the bond is given and continued during the trust, and its acceptance depends on the character and extent of the property of the sureties.

While they did not, in a legal sense, pledge their prop-' erty for the faithful performance of the trustee’s duties, yet their ownership of the same in sufficient value, was the prime, and perhaps, sole qualification.

When the plaintiff pledged the insurance policy, she signed no written obligation whereby she became surety; but it was assigned to the ward by parol contract, whereby it was placed in her possession as security in addition to. the original bond, and it was held, as the bond was held, for the protection of the ward against the default of the trustee. This property pledged held a relation similar to the property of the defendants. In the case at bar, the ward held the pledged property, and satisfied her claim with its proceeds. Had there been a bond in its stead, the surety could either have satisfied it by voluntarily turning over sufficient land or other property, or by judgment on the bond, and execution thereon, the judgment would have been satisfied. In equity the situations are not materially different, and are governed by the same equitable principles.

But it is urged, that the plaintiff was a volunteer in pledging her policy. In a qualified sense that is true. In the same sense, the defendants were volunteers when they signed the bond of the trustee, for both acts, no doubt, were at his request.

But it is argued, also, that the rule of contribution must be mutual, and that if defendants had been compelled to pay the debt, they would have had no right of contribution against the plaintiff, because she was not liable, and no action could be maintained against her.

This reasoning is good, if the premises on which it is based are-sound. But are they?

We'again resort to elementary principles. Let us assume an illustration. Taking the facts as stated in reference to the life insurance policy. Now, if Robinson, without the knowledge that this policy of-insurance had been placed in pledge for any part of the liability, had paid the full amount of the debt due the ward, and discharged the obligation-in that respect, and afterwards found that the plaintiff’s policy was in pledge as security for the defaulting trustee, what were his rights in the premises? He could demand a surrender of such security to himself for the purpose of reimbursement. We refer to Pom. Eq. Jurisprudence, section 1419, where it is said:

“The surety who has paid or satisfied the principal debt or obligation's entitled to be subrogated to, and have the benefit of, all securities which may at any time have been put into the creditor’s hands by the principal debtor, or which the creditor may have obtained from the principal debtor. By the fact of payment the surety becomes an equitable assignee of all such securities, and is entitled to have them assigned and' delivered up to him by the creditor, in order that he may enforce them for his own reimbursement and exoneration, If, therefore, the creditor refuses to surrender up such securities, the surety may maintain an equitable suit to compel their assignment and surrender, The doctrine and remedy of subrogation are exteuded also to the creditor, who is subrogated to and entitled to the benefit of, all securities given to a surety for purposes of his indemnification by the principal debtor; and also between co-sureties,so that one surety, in enforcing his rights of exoneration and of contribution, is subrogated to securities given to his co-surety,”

See, also, Butler v. Birkey, 13 Ohio St., 514-523.

It would be no answer for the plaintiff in this case to,say,, if Robinson would resort to such a demand-upon, the creditor, we do not stand “aequali jure”- — -I am. not, liable to the.,. same amount, as I signed no bond,and did not become personally liable upon any obligation. The law is against such a position.

Lutes & Lutes, for Plaintiff.

McCauley & Weller, for Defendants.

Hence, we see that the argument against the plaintiff in this respect falls to the ground.- There was that mutuality between them that the defendant Robinson, if he had discharged this full debt owing to the ward, even before he knew of the. possession of this life insurance policy by the ward, could demand its surrender and appropriation for his reimbursement.

In this case Robinson exhausted his indemnity, and paid nothing of his own means. He was saied from payment by the proceeds of this policy. To this extent he was greatly benefited, and in good conscience, which is the key to equity, he should bear some of the plaintiff’s burdens.

In our investigation of his case, we have found no precedent precisely in point; but the principles cited lead us to but one conclusion: that the contribution should be made.

The judgment and findings below should be set aside and reversed, and giving the judgment the court below should have rendered, we sustain the motion of the plaintiff below for judgment on the pleadings, and render judgment accordingly.

Finley, J., dissents from this opinion.


author: King, J.

text:
    (Sixth Circuit, Lucas Co, O., Circuit Court,
    January Term, 1897.)
    Before Haynes, Scribner and King, J J.
    HENRY WEITZEL v. J. B. SLAVIN and F. B. McCONVELLE.

      Lease of property to carry on liquor traffic, not void — Traffic in intoxicating liquor not illegal in Ohio.—
    The traffic in intoxicating liquors is of itself not an illegal business in Ohio, and a lease of premises to be used for the purposes of such traffic is not void.

      Error to the Court of Common Pleas of Lucas county.
   King, J.

Henry Weitzel brought an action before a justice of the peace first, which was afterwards appealed to the court of common pleas, to recover one month’s rent from the defendant, for the occupation of certain premises mentioned in the petition. He avers that the defendants leased or rented of him certain premises which he describes, for occupation, from the first day of June, 1893, to the first day of June, 1894, and that they entered into the occupation, but failed to pay the rent for the month of July, and he brings an action to recover $125.00, the amount of the July rent.

The defendants, Slavin and McOonvelle,, answer, admitting the lease and the occupation of the premises during the month of June; aver that they paid the rent for a month, and when that time expired they surrendered the premises to the plaintiff; that he accepted the same and released them from any further obligation to pay the rent for the month of July. '

There was a reply to that answer, denying these allegations, and then the defendants obtained leave of court to file an amendment to their answer, in which amendment they set up what they term a second defense,and set forth therein that the lease of the premises referred to in the petition of the plaintiff to them, “was for the purpose and with the intent that the said premises should be used and occupied under the said lease for the sale of intoxicating liquors thereon during the continuance of said lease, and the said premises were so used and occupied by these defendants during all the time they possessed or occupied the same for the sale of intoxicaing liquors thereon.’’ And-.they “aver that by reason of the premises the said'cont'ract of lease was' and is altogether void and of no effect,- ip law.!’

A demurrer interposed to this defense, was submitted lo the court, and the court overrbl'é'd the demurrer, The plaintiff therefore stated in court that he did not desire to plead further, and judgment was rendered for the defendants, and the plaintiff prosecutes this proceeding in error to reverse that judgment, and the claim is made on behalf of defendants, and in support of 'the judgment below, that a leasing of premises for the purpose of carrying on the business of traffic in intoxicating liquors, or with the knowledge that it was so used, is void, in Ohio, and that no rental can be collected thereon. And such was the holding of the court of common pleas.

We understand that the authority submitted to the court, and upon which the court below acted, (and we think it is the only authority, probably, that can be found upon that subject beside the statute), is a case reported in 1 Nisi Prius Reports, 284, and is a decision by the Superior Court of Cincinnati.

The character of the court and the learning and ability of the distinguished judge who delivered the opinion, have called for very careful consideration of the reasoning given in that opinion, and the ground of it, to determine whether that would meet with our endorsement, and we have come to the conclusion that it is not the law of Ohio, and for two reasons, which I will briefly state, .

The Superior Court of Cincinnati rely, for their decision, upon a case reported in 49 Ohio. St.,447, (Muller v. Peck), in which it was held in an-action brought upon what is known as the Adair Law, where a suit had been brought and a judgment recovered against a saloon keeper from the illegal and unlawful sale of intoxicating liquors, whereby damages had resulted to the plaintiff; that, in an action under a subsequent section of the act, to subject the premises in which the business was carried on to the payment of the judgment, it was not necessary to either allege or prove that the sales upon which the original judgment had been renderd were illegal, a conclusion which we think is well supported by the statutes. The decision is one which we have had occasion to examine two or three times, and we see no difficulty with the reasoning of the Supreme Court in their decision of that case; but we do not think that case holds that the leases of premises for the purpose of carrying on traffic in inoxicating liquors are void. All that they did in that direction is to cite he statute, and I can read it as well from the opinion of the court as from the statute itself. Section 4357, Revised Satutes, gives an action to certain persons named therein, to recover damages for injury, to certain other persons sustaining a confidential relation to them, against a person who sells intoxicating liquors contrary to law, to any one of those persons named in that section, and it also provides that the same kind of an action may be brought and maintained jointly, or severally, against the owner of the premises in which the business is carried on and against the saloon keeper, or tenant, as well. Under that section it was held by the Supreme Court, in 29 Ohio St., 314, that it is necessary to aver and prove that the liquor sold which caused the injury complained of, were sold in violation of law. That is a well established doctrine in the state of Ohio. In order to recover a judgment direct against the owner of the property, or against the tenant wbo-made the sales, it is necessary to aver that the sales were illegally made. In 49 Ohio St., the case had been brought against a saloon-keeper, and that allegation had been made and a judgment had been rendered in that kind óf a case against a saloon-keeper because he had sold intoxicating liquors to the damage of plaintiff below, and in violation of law. Then, thinking they could not make the judgment by execution against the saloon-keeper, they brought an action under section 4364, which provides that:

“If a person rent or lease to another, any building or premises,” (This is section 10 of the Adair Law), in whole or in part, for the sale of intoxicating liquors, or-permit the sam to be so used or occupied, in whole or in part, such building or premises so leased, used or occupied shall be held liable for and may be sold to pay all fines, costs and damages assessed against any person occupying the same.”

It will be seen that it may be sold to pay all fines, costs and damages assessed against any person occupying the same — that is, fines that,have been assessed upon a judgment in another action against the tenant. And the other action is an action provided for in section 4357, where it is necessary to allege and prove that the damages were caused by the illegal selling - of liquors. Having once procured a judgment upon that kind of a claim, then they may subject, under section 4364, the premises in which the business is carried on. “Proceedings may then be had to subject the same to the payment of any such fine, and costs assessed, or judgment recovered, or any part thereof, which remain unpaid, either before or after execution issues, against the property of the person against whom such fine and costs or judgment may have been adjudged or assessed; when execution issues against the property so leased or rented,” (recognizing that they may be leased or rented), “the officer shall proceed to satisfy the same out of the building or premises so leased or occupied; if such building or premises belong to a minor," etc. * * * “and all contracts,” (and this is the language relied upon by the Superior Court of Cincinnati), “ whereby any building or premises are rented or leased, and the same used or occupied, in whole or in part, for the sale of intoxicating liquors, shall be void, and the lessor shall, on and after selling, or giving, intoxicating liquors, as aforesaid, be considered and held to be in possession of such building or premises.”

That is the language as quoted in the opinion of the Cincinnati case. No force or effect is given to that part of the section which reads that “the lessor shall, on and after selling or giving intoxicating liquors as aforesaid,” be held liable, To give proper construction to that section,it simply means that after a competent court, in a proper action, adjudged that liquors have been illegally sold, so as to subject the seller to the penalties provided in section 4357, or if in another case he may have been prosecuted criminally for violation of the provision of the statute which provided that he should not sell intoxicating liquors to minors, or to persons in the habit of becoming intoxicated, if he has been convicted, and fines and costs assessed against him for .making that kind of sales, then and in that case the lease shall be void and the lessor shall be considered to be in possession of the premises — clearly not before, because it says: “on and after selling or giving intoxicating liquors as aforesaid.” What are the sales of intoxicating liquors ‘‘as aforesaid?” It means those provided for in this act, and it will take every section of it to determine what they are. The Supreme Court says that the judgment which can be maintained must have been obtained in an original action for sales that have been illegally made.

Section 4.361 says:

“A married woman shall have the same right to bring suits and control the same and the amount recovered, as a feme sole; all damages recovered by a minor under this chapter shall be p'aid either to such minor or to his or her parent, guardian or next friend, as the court shall'direct; the unlawful sale or giving away of intoxicating liquors shall work a forfeiture of all rights of the lessee or tenant under any lease or contract of rent upon premises where such unlawful sale or giving away takes place; and all suits for damages under this chapter shall be by a civil action in any court having jurisdiction thereof.”

. Now, it is clear that if the premises were rented upon a lease that authorized the illegal sale, it would be void, ab initio, because no parties have power to contract to violate the law. If the lease were made without that provision in it, and tbe lessee did violate the law of the state' to carry on an illegal business, that would be void against the tenant for carrying on the illegal business. The statute provides that execution may be levied directly upon the real estate and lands and the improvements thereon in which the business is carried on. If this lease were not rendered void by reason of a judgment, taken in a case wherein it was adjudicated that the tenant had been selling liquor contrary to law, he might set up his interest in his lease, and put off the sale. He might say: “I hold these premises under a lease,” and therefore prevent a sale; but the statute says that the lease, by reason of the fact that a judgment has been rendered against the tenant,, for the carrying on of an illegal business — for the selling of liquor contrary to law — is void and at an end, and it was to be considered that the lessor was then in possession of the premises, so that an execution could act directly upon his property, and it might be sold immediately, so far as any interest which the tenant might have under his lease.

We do not think that the courts have, anywhere in the state of Ohio, held that the business of traffic in intoxicating liquors is not a legal business. As long ago as the passage of the act of 1854, in the 3 Ohio St., 476, the Supreme Court, in considering the question whether the clause of the constitution which provides that ‘‘no license to traffic in intoxicating liquors shall be hereafter granted in this state, but the general assembly may by law provide against the evils resulting therefrom,” say, (p. 486):

‘‘Without deciding what, if any, authority over this sub-' ject can be derived from the general grant of legislative power in section 1 of article 2, of the constitution, we hold that the act before us is authorized by the express grant of power in section 18 of the schedule already quoted; for the law is not prohibitory, nor does it interfere in any degree, with any right of property. It belongs to that class of legislative acis commonly called ‘police laws,’ and is framed with a view to regulate, and not to destroy.”

That is very apt language, delivered when that act was in all its force and effect, by the then Chief Justice of the court, Judge Thurman, and that act at that time provided that no sales of intoxicating liquors should be made to be drunk upon the premises where sold, save and except only ale, beer, and wine manufactured from the pure juice of the grape grown in this state, and cider; so that under that act nothing could be sold, to be drunk where sold, except those drinks, and all oth.ers were absolutely prohibited to be drunk where sold.

There are a great many cases in which the construction of this constitutional provision and of these acts of the legislature have come before the Supreme Court, but I will not take time to refer to all of them. In the case of Anderson v. Brewster, 44 Ohio St, 576, which is one of those arising under the present tax law, known as the Dow Law, at page 576, the court refer incidentally to the question of the liability of property. That was an action brought to enforce a lien for the Dow Law tax, and the court say:

“For over thirty years it has been the settled policy of this state to hold any building or premises, rented or leased to another to be used or occupied for the sale of intoxicating liquor, where it is contrary to law, is liable for all damages assessed against the seller thereof for violation of the law regulating such traffic

He refers to Swan & Critchfield, 1434, and says:

“And the premises may be sold to pay all costs, fines and damages assessed against any person occupying the same. This species of legislation, involving in liability both lessor and lessee for damages resulting from the business of the latter to third persons, has frequently come under judicial examination, without its constitutionality being seriously called into question, and may find cumulative sanction in the well recoguized police power granted to the general assembly in the schedule to the constitution.’’

F. M. Sola, for Plaintiff in Error.

J. M. Ritchie, for Defendants in Error.

And he cites several cases.

We have carefully looked into the decisions of the courts of this state, and we find everywhere recognition of the legality of this traffic in some form, and the duly regulating, controlling and limiting of it is also equally well settled; but so far as it is legal- — as to that portion of it which is legal* —-there can exist no reason in natural or fundamental law, why the owner of the property may not hold it and lease it for the purpose of carrying on that kind of legal business. It is only when his contract has been violated by one party to it, by the carrying on of an illegal business in contravention of law, that the contract between the.lessor and tenant is rendered void by the statute. It might well be rendered void by tho lessor entering into possession and ejecting the tenant, but in no case does the right exist until the illegal act has been committed. Under section 4364, the right does not exist until the illegal act has been committed and adjudicated upon, and found to be an illegal act. So that we are well satisfied that this defense, which merely sets up that this was a lease of these premises for the purpose of carrying on the business of selling intoxicating liquors, is not in and of itself a good defense to this action for rent, and therefore the judgment of the court of common pleas will be reversed, and the case will be remanded for such other proceedings as are required by law.


author: Smith, J.

text:
    (First Circuit — Hamilton Co., O., Circuit Court,
    Jan. Term, 1897.)
    Before Smith, Swing and Cox, JJ.
    DAVID DAVIS, ASSIGNEE OF W. H. SLOAN, v. S. A. GREENLEE.

      “Operative’', under seo. 6355 i2. S. defined — Traveling agent—
    The preference given by section 6355 to “operatives” over other creditors applies only to those classed as operatives in the usual and ordinary sense of the word.*

      Error to the Court of Common Pleas of Hamilton county. .
   Smith, J.

In this case the assignee of Sloan seeks the reversal of the judgment of the court of common pleas, which required him to pay from the assets of his assignor’s estate to Green-lee $300, as a preferred claim for services rendered by him as a laborer and operative while in the service of said Sloan, and in preference to any claims under and by virtue of any chattel mortgages given on assigned property by said Sloan.

The agreed statement of facts brought into the record by a bill of exceptions, shows this state of fact: Sloan, the assignor, before his assignment, was engaged in publishing and selling Sloan’s Legal Directory to attorneys in the United States and in Canada. Greenlee was employed by him as a traveling agent to work for him in obtaining subscriptions to such book, and in selling it in the territory aforesaid, and in collecting accounts due to Sloan, and traveled from place to place to do this, going from office to office, and interviewing prospective subscribers,and presenting the merits of the publication, He was to be paid for his services $100 per month, and all his traveling expenses. At the time of the assignment the balance due to him for his services was $652.05, more than $300 of which was due for the services for the year immediately preceding the assignment. Shortly before the assignment (seven days before), Sloan gave chattel mortgages upon the property assigned to other persons, for antecedent debts, on which there were certain sums due, and said mortgages were rated liens on the property in the hands of the assignee.

The claim of Greenlee to priority of payment from the funds in the hands of the assignee is based on Sec. 6355, Rev. Stat,, which provides for lie payment of preferred claims by an assignee as follows:

“All taxes of every description assessed against the assignee upon any personal property held by him before his assignment shall be paid by the assignor or trustee out of the proceeds of the property assigned, in preference to any other claims against the assignor, and every person who shall have performed any labor as an operative in the service of the assignor shall be entitled to receive out of the trust funds,'before the payment of the other creditors, the full amount of the wages due to such person for such labor performed within twelve months preceding the assignment, not exceeding $300. But the foregoing provision shall not prejudice or in any way affect securities given or liens obtained in good faith,for value, but judgments by confession on warrants of attorney rendered within two months prior to such assignment, or securities given within such time to create a preference among creditors, or to secure a pre-existing debt olher than upon real estate for the purchase money thereof,shall be of no force or validity as against such claims for labor,to the extent above provided, in case of assignment.”

The mortgages referred to, having been given less than two months before the assignment and to secure a pre-existing debt, the only question in dispute is, whether the wages of Greenlee, to the amount of $300, tor services rendered to Sloan, the assignor, within the twelve months next preceding the assignment, have priority as to payment from the assets in the hands of the assignee over the amounts due on such mortgage claims. That is, did Greenlee perform labor as an operative in the service of the assignor?

. While we are not disposed to placea very strict construction upon this language as used in this statute, and,in view of what we deem to be the purpose of the legislature in its enactment, viz: To protect and prefer he claims of those who, as workmen or laborers, serve their employer in the bouse, field, factory or mine, or in other like services, would be strongly inclined to be liberal in the construction to be placed upon it, yet we are of the opinion that on the admitted facts of this case, it can not rightfully be said that Mr. Greenlee performed labor as an “operative” in the service of Mr. Sloan, so as to entitle him under the terms of this statute to a preference, Certainly,in the ordinary and usual use of the word, a person rendering services like those rendered by Mr. Greenlee,would not be spoken of as “an operative,” and the definition of the word, and of the other words, “laborers and workmen” as given by the lexicons, would indicate that the common acceptation of the meaning of these words is the correct one. It surely can not be that the statute was intended to give a preference to every person who had performed labor of any kind for the assignor within the period prescribed. If so, the lawyer who may have tried a case for him, or the physician or surgeon who may have rendered him service, in the line of their profession, must be considered “as operatives;” for it is only when the service is rendered as an operative that the statute applies, and this could not have been the intention of the legislature. The view we take of the case as to the meaning to be given to these words is supported by the cases of Green v. Tbaden, 6th C. C. Rep., 351, and Brockay v. Innas, 39 Mich., 47, and we are not cited to any authority to the contrary.

It is strengthened, too, by the history of the legislation on the subject. Prior to March 6, 1861, the statute simply provided for the payment of taxes as a preferred claim. On that day an amendment was enacted, which, in substance, was the same as that now in force, (58 O. L. 26),providing that any person who shall have performed any labor as an operative “in the service of any person or corporation” who assigns, shall be preferred. On May 7, 1878, (Vol. 75, 134), the law of 1861 was amended, providing that “every person who shall have performed labor in the service of any person o.r corporation” should be entitled to a preference for his wages, pot exceeding $300. This act, it will be perceived, left out the provision that the labor was to be performed as an operative, and if still in force, would perhaps entitle Greenlee to the priority claimed.'

David Davis, for Plaintiffin error.

A. M. Warner, Contra.

But it can not be said that this statute was ever in force, for the reason that in the revision of the laws passed on the same day (Vol. 75, 943) the old provision was re-enacted, and by it only those who performed labor as operatives were preferred. And this provision has been carried into all amendments since made, and the words “as a operative” certainly have some meaning.

Taking this view of the subject, we must reverse the holding and judgment of the court of common pleas and enter a judgment on the agreed state of facts,that Greenlee is not entitled to priority, as claimed, over the mortgages referred to.


author: Haynes, J.

text:
    (Sixth Circuit — Lucas Co., O., Circuit Court,
    January Term, 1897.)
    Before Haynes, Scribner and King, JJ,
    SYLVESTER H. LAWTON v. JAY ADAMS ET AL.

      Mortgage — Incorrect description of notes secured.

    Where a mortgage is given to secure four notes, described as made to the mortgagee’s wife, but it is shown that the four notes were the notes intended and understood to be described in the mortgage, the description in the mortgage will be sufficient to cover the four notes.

      Statute of Limitations — Mortgage—Payment of interest by one joint obligor, ivjien binding on other joint obligors.

    Where several parties are jointly liable for the payment of a mortgage on land owned by them jointly, and one of them, under an arrangement between them, afterwards pays the interest on the mortgage, the payments by such party will take the mortgage out of the operation of the statute of limitations as to ail the joint • obligors, and not only as to the party who actually made the payments.

      Taxes — Payment by mortgagee — Light to be reimbursed out of the land.

    Where the mortgagee pays the taxes on the mortgaged land, he is entitled to be reimbursed for such payment out of the land, and for that purpose is subrogated to the rights of the state.
   Haynes, J.

This action was brought by Lawton & Bartelle against Jay Adams and Harley Converse to foreclose a certain mortgage which had been made by Harley Converse to Jay Adams, Certain parties were‘made parties defendant, and among others, one John S. Griggs. He filed an answer and cross-petition in which he sets up that the land in question was part of a farm which had been owned by a man by the name of William H. Converse, and that said William H. Converse had executed a mortgage to himse'lf (Griggs) on the whole farm, to secure the payment of, I think, four different notes; that subsequent to that time, William H. Converse had died, leaviug'tbe defendant, Harley Converse, and Edson and Frank Converse, his heirs-at-law. Griggs claims to be the owner of the four notes that are set forth in that mortgage, and'prays that the mortgage may be foreclosed, the premises sold,the amount found due on his mortgage declared the first and best lien, etc. Issues are tendered to him by the other parties in the case, which raise two questions that have been argued in this court, and upon which some testimony has been given.

It appears from the pleadings and is admitted that these heirs of William H. Converse have divided up this real estate, and partitioned it among themselves, and that by an arrangement made between the three, Edson Converse was to take his share subject to the mortgage upon the property, and agreed to pay off the mortgages that were upon the estate, including this Griggs mortgage. Out of that arise some question's of equity which the parties seek to have enforced. ,•

In the first place, exception' is'taken to the n'Ot'es and the mortgage. It is said that Griggs ought not. to recover upon his notes and mortgage,for the reason that two of the notes are not described -in the mortgage. It'seemS that'th’e mortgage, when it was made, was drafted in Lorain county, was after-wards sent np to -Henry .county to be executed, and was there executed. Two of the notes were given .to Griggs, and two of them were executed to Grigg35 wife; audit is claimed that Griggs ought not to be allowed to recover for those executed to his.wife. We think under the decisions of the Supreme Court of Ohio, there isjno diffiulty in regard, to that matter; that the notes were described sufficiently. The parol testimony shows the circumstances under which the notes were given; that these were the only four notes made by the parties, and are clearly the four notes[intended to be described in the mortgage itself.

Another and.the more weighty question is, as to the notes having become barred by the statute of limitations, and the mortgage having become barre'd. The*notes were executed in 1877, and were payable, one on the 1st of January, 1878, one on the 1st of October, 1878, one on the first of October, 1879, and one on the first day of October, 1880. The suit was commenced in September, 1894, or at least the cross-petition was filed at that time. So that two of the notes would have been execüted more than fifteen years before the commencement of the suit, while the other two would have been executed within the fifteen years before the commencement of the suit. There are,, however,endorsed on the back of these notes payments of interest, which endorsements generally state that interest has been received up to a certain date, without stating by whom it.was paid, and to whom it was paid. That, at least, is true of the two notes. By a recent decision of the Supreme Court the time limited for the bringing of suit after the breach of the condition of the mortgage is fifteen years; and in order to take his case out of the limitation of fifteen years, the parties resort to the fact that a payment has been made, bringing the mortgage within the statute of limitations which provides that parties shall have that length of time after the making of payments upon the indebtedness. The testimony shows that these payments were made, perhaps all of them, by Edson. Edson, by arrangement between the parties, had agreed to pay off these mortgages, and as between the parties, the payments would naturally come from him. It.is claimed, that under this statute which I have referred to,the paynient having been made by Edson, would only revive or hold alive the mortgage as against him, and him only, and would only reach his interest in the lands. Sec. 4992 of the statutes provides:

“When payment has been made upon any demand founded on contract, or a written acknowledgement thereof, or promise to pay the same, has been signed and made by the party to be charged,an action may be brought thereon within the time herein limited, after such payment, acknowledgment or promise. ”

It is pointed out that by some decisions that have been made by the Supreme Court of this state — especially a case in 25 Ohio St., 349 — -it was held that a part-payment of a joint and several note by one of the several makers will not inure to the others. It will be observed that Harley Converse and Edson Converse are not parties to this paper; the paper was in fact signed by the father.' They are not the' makers of the notes. They are simply the. holders of the land, and they hold it by descent. On the death of their father the property descended to them, and of course it descended subject to the liens. The question now for us to decide is, whether the payment upon these notes and the mortgage by Edson, who holds a moiety of this land, will take the case out of the statute as to the whole farm itself, so that the plaintiff shall be entitled to bring his action for the foreclosure of his mortgage upon the whole premises. We are of the opinion that the payment by Edson does make the whole of the premises subject to the payment of this mortgage. We aré sustained in that view by some cases which we think are very clear and cogent,and which may be found in 12 L. R. (Eq.) 51; Vol. 11, House of Lords Cases, page 115; 1 Degex & Jones, 1 Dodge & Norton, page 40, We think the reasons therein expressed are forcible and very ■clear. And whatever the rule of law is in this state in regard to promissory notes, where suit is brought against those who are liable jointly and severally, yet whereas in this case, suit is brought upon a mortgage against a piece of land, we are of the, opinion tlat the rule should apply that payment by any one of the persons who are jointly owners of the land, especially where payment is made by one who, by agreement of the parties, is obliged to pay the notes, should remove the bar of the statute of limitations. It has been clearly pointed out by the judge delivering the opinion in one of these cases, the Lord Chancellor of England, that it would be a great hardship to the mortgagee, if he was bound to know the various owners of the land, and that the payment was being made by one without the knowledge and consent of the other owners, or by an arrangement between them; and where one of the owners of the land comes to him and offers to pay upon the note (in-this case one of the heirs), it would seem to be that upon principles of justice and equity, as between the mortgagee and these various persons holding an interest in the land, that payment by one should be held to be the joint act of all, a payment - made for the purpose, primarily, of relieving the property from the debt; — that is to say, that it is made to reduce the indebtedness upon the land, and is made for the benefit of all, and should be binding upon all.

We therefore hold, that as between Griggs and thoáe three defendants, the whole of this property is subject to the payment of this debt.

As between the others, Edson Converse, it is said, agreed io pay off this indebtedness. We understand there is no dispute upon that question. Therefore, as between Harley Converse and Frank Converse, and Edsón Conversé, Edsoh’k property should first be sold for the páymént .df this mortgage, ‘ If the property of Edson is riot sufficient to.pay the debt, the decree will.be that the property of Harley "arid Frank shall each pay one-half of the balance, iricluding costs.

H. C. Horiclc, Attorney for Griggs.

Johnston Thurston, and Chittenden & Chittenden, for Defendants.

In regard to the taxes, we are clearly of' the. opinion, as’ was indicated to counsel'a-t the time the casé-was 'being' árgüed, that those must come out of the land. In a'case' in' 16 Ohio St., the mortgagee had paid off'the'taxes on a certain piece of land. The property was held by a.trust deed, and was sold under that deed. The question was made that the mortgagee who had paid those taxes was entitled to no portion of that fund. The'Supremé Court held that the taxes were a lien upon the land itself, and the mortgagee 'having paid those taxes, was entitled to be repaid out of the fund in the hands of the court. I have always understood, that the mortgagee paying the taxes upon the land, was entitledjo be subrogated to the rights of the state as to those-taxes, and have the tax refunded to him in the same manner that the state might claim a lien upon the taxed land. We are clearly of the opinion that Mr. Craig, having paid' off the taxes, is entitled to be repaid. If Edson’s property is sufficient to pay the mortgage and taxes, that should pay them; but if not, the amount of the taxes on Frank’s and' Harley’s parts should be paid out of their respective lands.