author: Pollock, J.

text:
    POLICY NOT NECESSARILY RENDERED VOID BY FAILURE TO COMPLY WITH THE IRON SAFE CLAUSE.
    Court of Appeals for Guernsey County.
    Old Colony Insurance Company et al v. A. Schultz & Company.
    Decided, November 14, 1917.

      Fire Insurance—Provision of “Iron Safe Clause” Not Complied With Through Inadvertance—Policy Saved from Forfeiture by Evidence as to Purchases, Sales, and Amount of Stock on Hand at Time of the Fire.

    1. The owner of a stock of merchandise does not forfeit his claim to indemnity in a policy of fire insurance which required him to take an inventory of his stock of goods once a year, and keep a set of ■books showing a complete record of all purchases and sales, either for cash or on credit, and to keep the last inventory and such books in a fire proof safe at night, or in some secure place not exposed to fire which would destroy the building where such business is carried on, when the insured had taken an inventory and kept the books required, and was accustomed at night to remove them from the building as required by the policy, but on the night of the fire they were left in the building through the forgetfullness of an employee and burned, if the insured is able and willing to produce the original pencil copy of the inventory and duplicate copies of the purchases and the pass book of the bank substantially showing his cash sales, together with the pass books of his customers showing his credit sales.
    2. The failure of the insured, after his stock of merchandise covered by his policy of fire insurance has been destroyed by fire, to produce the books and inventory as required by the “iron safe clause” in the policy, does not render the policy null and void if the books were by the unintentional negligence of the insured left in the store building and burned in the fire that destroyed the stock of merchandise and building, if the insured is able and willing to produce a copy of the inventory and written evidence substantially showing his purchases and cash and credit sales from the time the inventory was taken until the tíme of the fire.

      Mooney <& Edmunds, Lewis & Brucher, Green d Gromley, and Scott & Scott, for plaintiffs in error.

      Charles S. Shepard,, contra.
   Pollock, J.

On December 18th, 1915, A. Schultz & Company, a partnership, was engaged in conducting a general store near one of the coal mines of this county. On the evening or night of that day the building in which they were conducting this store took fire, and the stock of goods contained therein was totally destroyed. At the time of the fire the Old Colony Insurance Company, the Columbiana County Mutual Insurance Company, the Firemen’s Insurance Company, the Richland County Mutual Insurance Company and the Knox County Mutual Insurance Company, each had issued a .policy of insurance in the amount of $1,000 indemnifying A. Schultz & Company against loss of their stock of goods by fire.

After the loss of this property the insurance companies refused to pay the amount of the indemnity provided in their policies, and separate suits were brought in the court below by this partnership against each company. A jury was waived and the cases submitted to the court, and judgment was rendered in favor of the insured and against each defendant company. Each of these insurance companies is prosecuting a separate action in error in this court to reverse the judgment against it for errors which it claims occurred in the trial and judgment of the court 'below. The same question is involved in each of these cases and they were submitted to this court together, and will be so disposed of.

All of these policies contain what is known as the “iron safe clause, ’ ’ and the question to be determined requires a construction of that clause.

The insured had been for some years prior to this time conducting both a general dry goods store and a grocery store in the building that was destroyed. They had kept their property insured from the time they began business. Some of the companies, whose policies are involved in this suit, first insured the stock of goods of this partnership in the fall of 1911. Each policy was drawn for one year and at the end of the year a renewal policy was issued by the companies, and defendants below do not deny that at the time of this fire they had policies covering the stock of goods. This “iron safe clause” reads as follows:

“Iron Safe Clause. The assured under this policy hereby covenants and agrees to take an inventory, of the stock hereby covered, at least once every twleve months during the life of this policy, and unless such inventory has been taken within one year prior to the date of this policy, one shall be taken in detail within thirty days thereafter, and to keep a set of books snowing a complete record of business transacted, including all purchases and sales both for cash and credit, together with the last inventory of said 'business, and further covenants and agrees to keep such books and inventory securely locked in a fire proof safe at night, iand at time when the store mentioned in the within policy is not actually open for business, or in some secure place, not exposed to a fire which would destroy the house where such business is carried on; and in case of loss the assured agrees and covenants to produce such books and last inventory, and in the event of a failure to produce the same, this policy shall be deemed null and void, and no suit or action at law shall be maintained thereon for any such loss.”

The testimony in regard to the compliance with the provisions of these policies—and we might say there is substantially no conflict of any kind in the testimony—showed that during the life of these policies A. Schultz & Company had made an inventory as required by the policies about the first of January of each year, and the last inventory was made in January prior to the fire. That inventory was recorded in a book which the insured called the ledger. The bills showing the purchase of goods, after the inventory was taken, and the prices paid therefor were also entered in this book. They also testified that they kept a record showing the cash sales and the sales on credit, and that these books were kept in the store during the time it was open for business. They did not have a safe in the store and their custom was to place the books in an oil cloth cover and one of the partners would take the books to his house at night. Sometimes on very stormy nights the partners would sleep in the store. ‘They testified that on such occasions the books were laid on a chair near the bed on which they slept.

On the evening of this fire they closed the store about six o ’clock. It was raining and very dark and the roads were very muddy. A. Schultz, who seems to have had general charge of the hooks, says that he wrapped the books in the ordinary way and started out of the store to go home, intending to walk to the street ear line. After learning the condition of the evening he turned and went back into the store and handed the books to a man named Callihan—one of their clerks—and told him to put them in the wagon in which this man Callihan and one of the other partners were going to ride to the city. Callihan and the other partner were taking some groceries in the wagon to deliver to customers on their road home. Callihan testifies that he laid the books on the counter near the door, and went and got some groceries which he was to deliver and placed the groceries in the wagon. He testifies that he thought he took the books from the counter where he had laid them and placed them in the wagon, but without doubt he did not do this, and the boobs were left in the store where Callihan had laid them and were destroyed by the fire.

It must be conceded that this was a violation of the terms of the contract of insurance. These books of account were either to be kept, when the store was closed, in a fire-proof safe, or they were to be taken away from the building, in order that they would not be destroyed in case the building was burned.

It is earnestly urged by the insurance company that the mere fact that the books were within the building, when the store was not open for business, and were destroyed 'by fire, prevents a recovery regardless of it being an inadvertent or forgetful act, while the insured urges that they have substantially complied with the provisions of the policies of insurance and that their indemnity under the policies should not be forfeited by reason of the unintentional act of this young man.

The act of Callihan was the act of the insured. He was in their employ, and they placed their books in his care, and are bound by his act just the same as if one of the partners had left the boobs in the store.

Questions growing out of the construction and performance of the “iron safe clause” in a fire insurance policy have been before the courts of this country many times, but it would not be profitable to attempt to consider all of these cases, much less to undertake to harmonize all the holdings of the courts.

The plaintiffs in error have called out attention, among other eases, to the case of Allread v. Hartford Insurance Company, 37 S. W., 95, which was an action on a policy of insurance, containing the “iron safe clause,” on a stock of goods where the insured had complied with the provisions of that clause of the policy by keeping the necessary books, but through inadvertence the books were not placed in the safe and were destroyed by a fire which burned the buildings and the stock of goods. Held: 'That there was a breach of the warranty by the insured and that he could not recover.

To the same effect is the case of Goodman v. North British Mercantile Insurance Company, 19 Southern, 132.

The holding in these cases is based on the principle that this provision in the insurance clause was a warranty, and must be strictly complied with by the insured in order to authorize a recovery. The facts in each of these cases are quite similar to the facts in the case which we are now considering.

'The insured has called our attention, among other cases, to that of Connecticut Fire Insurance Company v. Geary, 83 N. W., 78, where it was held that the provisions of the iron safe clause in a policy of insurance, “should be construed conjointly, and that, to work a forfeiture of the policy, there must be a failure to perform all the conditions named, and not any particular one of them.”

And again to the case of the Western Assurance Company v. McGlathery, 22 Southern, 108, where it was said that this clause “has received a fair, reasonable interpretation, so that it-may not work forfeitures, or defeat the claim of the innocent insured to the indemnity promised by -the policy.”

The wide variance in the decisions -of the several courts in the many actions growing out of this clause in insurance policies result from the different views taken of it by the courts; those requiring strict compliance with the provisions of this clause, in order to recover, construe this provision as a warranty, while those placing upon it a liberal construction construe it as a condition subsequent and that its enforcement would work a forfeiture of the indemnity named in the policy otherwise payable.

No doubt can exist but that the Supreme Court of this state in the several eases which have come before it containing conditions which would work a forfeiture have followed the latter rule. In the case of West v. Insurance Company, 27 Ohio State, 1, in the opinion on page 10, the court said :

‘‘ None of these rules is more fully established or more imperative and controlling than that which declares that it must'be liberally construed in favor of the insured, so as not to defeat, without a plain necessity, his claim to indemnity, which, in making his insurance, it was his object to secure; and when the words ‘without violence’ are susceptible of two interpretations, that which will sustain the claim and cover the loss must in preference be adopted.”

And again the court said in Insurance Company v. Pottker, 33 Ohio State, 459, “forfeitures are odious.”

In the opinion in Webster v. Insurance Company, 53 Ohio State, 563, Spear, J., said:

“* # * forfeiture is a deprivation or destruction of a right in consequence of the non-performance of some obligation or condition. * # *

“A primal rule is that forfeitures are not favored either in equity or at law; indeed, it is declared as a universal rule that courts of equity will not lend their aid to enforce a forfeiture. Following as a corollary from this, provisions for forfeitures are to receive, when the intent is doubtful, a strict construction against those for whose benefit they are introduced.”

In the syllabus of this case on page 558, the court said:

“Rules followed in courts of equity respecting forfeitures may be available in a suit at law where the facts make their application necessary to the ends of justice.”

Other eases might be cited from the courts of this state to the same effect, but the above is sufficient.

It should be said that the cases in which the courts of this state have construed conditions in a policy of insurance, in which their enforcement would work a forfeiture, were mostly construing the words or language of the clause of the policy under consideration, and .not the acts of the insured in complying with that condition of the policy, but we think that if a liberal construction in favor of the insured should be placed upon the language of the policy in order to avoid a forfeiture, the same construction should be applied to the acts of the insured in complying with the provisions of the policy.

This act of the young man in leaving the books in the store— whether you call it forgetfullness or inattention-—-was an unintentional negligent act. He left the books in the store unintentionally, but they were left there and destroyed, and this provision of the policy was violated by that act.

The question of the effect upon the insured of a negligent violation of the provisions of this clause in an insurance policy was before the Federal Court of Appeals in the case of Insurance Company v. Kearney, 94th Fed., 314, and the court said:

“* * * it requires the insured to produce them after the fire, if within his power to do so, and casts upon him the responsibility for their loss in all cases where such loss is due to a wrongful or fraudulent act on his part, or to his culpable negligence. ’ ’

'The same case came before the Supreme Court of the United States, 180 U. S., 131, and this court said:

“Failure of an insured to produce the books * * *_ means a failure to produce them if they are in existence when called for, or if they have been lost or destroyed by the fault, negligence or design of the insured.”

No doubt, the failure to produce the books required by the iron safe provisions of the policy may work a forfeiture of the indemnity in the policy even if such failure is caused by the unintentional negligence of the insured, if such act affects substantially the rights of the insurer under the contract. In this case the insured did not produce the books required to be kept by this provision of the policy for the inspection of the insurer. Whether this was such a failure to perform the conditions of the contract of insurance that would work a forfeiture in the indemnity of the policy, depends upon whether the failure was excusable or inexcusable.

The one question then to be determined is whether leaving the books in the store on the night of the fire, under the circumstances in which they were left, and their destruction as a result of that act, prevents recovery on the policy. The consequence of an unintentional negligent act is never inflicted upon the negligent party for the mere purpose of enforcing a penalty or forfeiture, but only to recompense some one who has suffered by reason of that act. If by the unintentional negligent act of one party to a contract the other contracting party has lost a substantial legal right under the contract, the party who has been guilty of negligence should lose the benefit of his contract rather than the other party; but if on the other hand the other contracting-party has not been deprived of any substantial contract right by reason of such negligence he should not be permitted to stand on his technical rights under the contract in order to defeat the other party of his beneficial interest in the contract.

'This provision in the insurance policy was inserted for th® benefit of the insurance company that it might have a better or more accurate way of ascertaining the amount of loss suffered by the insured in case of fire, and the amount the company would be required to pay under its policy. That was a contract right which the insurer had under the conditions of the policy, and if by this unintentional negligent act of the insured it has sub stantially lost the means of determining the value of the insured property destroyed by the fire the insured must suffer the loss of the indemnity in the policy; but, on the other hand, notwithstanding the loss of these books by the negligence of the insured, if the insured is able to produce substantially the same proof that would have been available to the insurer had the books been preserved, the insurance company ought not to be permitted to stand upon the technical performance of this condition of the policy in order to defeat the recovery of the indemnity provided for in the policy.

.What do the facts show in this case? The insured had the original pencil copy of the last inventory, and produced it, which, so far as an inventory is concerned was a compliance with the provisions of this clause. 'The insured was required to keep an account of its purchases from the time of the making of the inventory down to the time of the fire. The testimony shows that it did keep this in the same book that it recorded the inventory, but this book was destroyed by fire; and also the original bills of its purchases were destroyed by this fire, but it secured duplicates from the wholesale houses from which it purchased, and produced the duplicates at the trial. These duplicate bills would furnish the insurance company as much information, and they would be able to trace their reliability just as readily, as though they were the original bills or the entries in the book.

'The insured was also required to keep a cash account and an account of their credit sales. The only evidence of the cash account that the insured could produce was the pass book between the partnership and the bank with which it did business. We have examined this book and it seems that deposits were not made on every day, but they wére made in fairly regular order, and that only a day or two intervened between the deposits. If the partnership had kept a personal book and noted in it the cash accounts just as they are noted in this book and produced that book, it would have been á compliance with the provisions of the policy. We are unable to see why the pass book, with the amounts noted by the bank, would not be as reliable as a book kept by the partnership.

It is further urged that this book should not be accepted in lieu of the one required by the policy, for the reason that the insured had intermingled funds received from the sale of goods not covered by the insurance, with the deposits from the sale of those covered by the policy. The insured could not receive any advantage from the intermingling of these funds, but counting all of the deposits shown by this book as cash sales of the goods covered by the policy it would not reduce the loss of the insured, as shown by the testimony, below the amount of the insurance, and the insurance companies would still be required to pay the total amount of their policies.

We come next to the requirement that they were to keep an account of their credit sales. These were kept but destroyed by the fire. The insured in conducting their store issued pass books to their credit customers. After the fire the insured examined these pass books in the hands of their customers to determine the ,amount of their credit sales. The insured could and would have produced these boobs for the inspection and examination of the insurers, had they desired or been willing to accept those as proof of the credit sales.

We think that if the insurers, when they learned of the destruction of the books, instead of refusing to pay the policies, had made a reasonable effort to examine the inventory and accounts which the insured could and would have produced for their inspection and examination, they could have determined as accurately as if they had the books, the loss which the insured sustained. From the record in this ease we have no doubt that the value of the property insured by the plaintiffs in error and which was destroyed by the fire, largely exceeded the indemnity in the policies. There is no indication that the fire was the result of the wrongful act of the insured. It would be an injustice to the insured to enforce a forfeiture of the indemnity provided by these policies by reason of the unintentional negligence of the insured, when the insurer did not lose any substantial means of determining the amount of the loss of the insured.

Judgment of the court below is affirmed in all the cases.

Metcalfe, J., and Farr, J., concur.


source: Caselaw Access Project

author: Richards, J.

license: Public Domain

text:
    NO JEOPARDY WHERE TRIAL IS HAD UNDER. A DEFECTIVE INDICTMENT.
    Court of Appeals for Huron County.
    J. D. Sigourney v. State of Ohio.
    Decided, October 5, 1916.

      Criminal Law—Trial for Forgery■—Gravamen Omitted .from Indictment ■—Granting Motion of Defendant for a Directed Verdict—Not a Bar to a Second Indictment—Jeoyardy.

    Where a verdict of not guilty has been directed on tbe application of tbe defendant, on tbe ground that tbe indictment was fatally defective, be can not thereafter plead former jeopardy when re-indicted for tbe same offense.

      Leonard S. Wise and Frank Carpenter, for plaintiff in error.

      Irving Carpenter, Prosecuting Attorney, contra.
   Richards, J.

Error to the court of common pleas.

At the March term, 1916, J. D. Sigourney was indicted by the grand jury on the charge of forgery. To this indictment he filed a plea of former acquittal, which plea set forth, in substance, that he had been theretofore indicted and tried on the same charge and that on such former trial the state of Ohio offered evidence in support of the charge, and that at the conclusion of the evidence on behalf of the state he filed a motion asking that the jury be directed to return a verdict in his favor "for the reason that the indictment does not state facts constituting an offense punishable by the laws of the state of Ohio; and, second, lack of sufficient evidence of the fact of the uttering and publishing of forged instruments for the payment of money.” The court, as appears by the record, overruled the motion as to the second ground but granted the motion as to the first ground, to-wit, that the indictment failed to state facts constituting an offense.

The state of Ohio filed a demurrer to this plea of former acquittal and the trial court on consideration sustained the demurrer. 'Thereupon the defendant was placed on trial and convicted and sentenced.

No bill of exceptions was taken and the only question we have for consideration is, Did the trial court err in sustaining the demurrer to the plea of former acquittal? The plea of former acquittal sets forth the indictment in the first case and it appears from an examination of that indictment that it was fatally defective in omitting a line or two which evidently contained the gravamen of the charge. 'The charge against the defendant in the original case being so fatally defective was in law no indictment and in this respect was similar to a civil action where a demurrer is sustained to the petition on the ground that it does not state facts sufficient to constitute a cause of action. It has been repeatedly held in civil actions of that character that the sustaining of a demurrer to such a petition and the rendition of a judgment dismissing the case is not res adjudicatei. Moore v, Dunn, 41 O. S., 62; Rafferty v. Toledo Traction Co., 1 C.C. (N.S.), 538.

Furthermore, it is perfectly clear that the court in the first trial having directed a verdict at the instance of the defendant and on the ground that the indictment was fatally defective, he is now estopped to urge that the judgment so procured by him is a bar to this action. Stewart v. State of Ohio, 15 O. S., 155. The direct question was so decided in State v. Meekins, 6 Southern, 822, 41 La. Ann., 543. The general principle is also stated in 12 Cyc., 266, and is forcefully announced in the following language in 8 R. C. L., 152:

“It may be stated as a general rule that Where an indictment is quashed at the instance of the defendant, though after jeopardy has attached, he can not thereafter plead former jeopardy when placed on trial on another indictment for the same offense. ’ ’

We find no error of the trial court in sustaining the demurrer to the plea of former acquittal. The judgment will therefore be affirmed.

Chittenden, J., and Kinkade, J., concur.


author: Gorman, J.

text:
    SALE OF ENTIRE CORPORATE ASSETS CONTRARY TO STATUTORY PROVISIONS.
    Court of Appeals for Hamilton County.
    The Williams Shoe Company v. Frank Hoffard, Anna Hoffard and John Keoler.

    Decided, February, 1916.

      Corporations—No Authority to Confirm Sale of All a Company’s Assets —Where Statutory Provisions Have Not Been Followed—Effort to Change Nature of Action From One in Equity to One at Law —Award of Two Arbitrators Not a Statutory Award—Section 8710, et seq.

    1. In an action to restrain the directors of a corporation from selling and disposing of all the assets1 of the corporation contrary to the provisions of Sections 8710 to 8718, General Code, inclusive, and for an accounting against one of the directors who claims to be a purchaser of the corporation assets, there is-no power or authority in the court to order a sale of the assets, and to confirm a sale made by the corporation under the provisions of Sections 8710 to 8718, General Code, inclusive. A sale made in conformity to the provisions of said sections1 requires no court proceedings.
    2. In such an action for an injunction and an accounting, an action at law for the recovery of money only can not be engrafted on. such bill in equity either by supplemental petition or by an intervening petition whereby the nature of the action is sought .to be changed from an action in equity to one at law.
    3. An award by two disinterested arbitrators under Section 8713, General Code, which provides for an award by three arbitrators, is not a statutory award under Sections1 12149 to 12160, General Code, inclusive; but the award provided for in said Section 8713, General Code, is a common law award and requires the concurrence of the three arbitrators.

      Dempsey & Nieberding, William J. Greed and Edw. A. Eafner, for plaintiff in error.

      Bentley <& Mente, contra.

       Affirmed by Supreme Court, Hoffard et al v. Williams Shoe Co., 95 O. S., 376.

   Gorman, J.

The plaintiff in error asks this court to reverse a judgment rendered by the Superior Court of Cincinnati in favor of the defendants' in error upon a motion for a judgment upon the pleadings.

The original action was brought in the Superior Court of Cincinnati on August 13, 1913, by Frank Hoffard and Annie Hoffard, two of the defendants in error, against the plaintiff in error, the Williams Shoe Company, a corporation, Richard G. Bray, William W. -Williams, Fred. Weber, Charles Weber, Henry 0. Johnson, Asa Lashlorn, Charles Sohngen, Edgar Cummings, Walter L. Thorne and T. Newton Jones. The petition set out in substance that the individuals above named were directors and stockholders of the Williams Shoe Company and that the Williams Shoe Company was an organization organized under the laws of the state of Ohio; and the plaintiffs set out that the stockholders were seeking to sell and dispose of all the property and assets of the company in a manner not authorized by the statute of Ohio regulating such sales by corporations. They also set out that the intended purchaser of the property was a stockholder of the company, and that he intended to pay for the assets by a cancellation of the indebtedness of the company held by him and which they aver he procured with money and other assets of the company, and that the company was therefore entitled to all discounts, rebates and other profits that might be made on the purchase of said indebtedness, by said stockholder, against the company. The prayer of the petition was for a perpetual injunction restraining the corporation, directors and stockholders, from disposing of the entire assets of said company in any manner save as provided in Sections 8710 to 8717, inclusive, of the General Code, and further prayed for an accounting between the company and the contemplated purchaser of the assets of the company. And, further, that an order be made upon a determination of the amount paid by the prospective purchaser, to transfer and turn over to said company said claims, upon payment to them of the amount* paid by them for said bills and accounts. And they prayed for such other and further relief as the nature of the case may require.

Summons was issued on this petition; no answer was ever filed by any of the defendants, but on the 12th day of September following the filing of the petition, the court made an order enjoining the Williams Shoe Company, the stockholders and directors ‘ ‘ from proceeding further with the sale of said property except as hereinafter directed. The injunction hereby granted against each and every of said defendants, as above, does not apply to and cover a sale of the entire property, such as may lawfully be made, as provided in Section 8710, et seq., of the General Code.” The court further finds in said entry “that the present board of directors of the Williams Shoe Company has been legally constituted and that it has legal authority to act on behalf of said company, and that Richard C. Bray arid Frederick Weber are the legal holders of the claims against said company heretofore acquired by them. And as to all other matters not expressly adjudicated herein, including the amounts for which said claims so held by said Bray and Weber may be enforced against said company, this cause of action is hereby continued for further hearing.”

Two days before the making of this entry there appears an anomalous proceeding in the way of a “Report” and “Motion for confirmation of report and sale. ’ ’ This report was filed without any order having been made so to do by the court, and, so far as the record discloses, without any warrant or authority of law. This report purported to be filed by Charles Weber,, secretary of the Williams Shoe Company, in which he sets out that on the-22d of August, 1913, a duly and lawfully called meeting of the board of directors of the said Williams Shoe Company was held. A report and a true and correct copy of the minutes of said meetings are hereto attached and made part hereof marked “Exhibit A.”

The purported copy of the minutes of the directors’ meeting of the Williams Shoe Company, held August 22, 1913, sets out those who were present as being all of the directors; and that action was taken to sell and dispose of the entire assets of the corporation in the manner provided in Sections 8710 to 8718 inclusive, of the General Code; and that “the directors considering that the order of court heretofore made in said case has enjoined the manner of a previous effort to dispose of said assets by and through certain trustees appointed for that purpose, ’ ’ the minutes further set out that the directors fully complied with the order of said court; and a resolution was offered and carried unanimously by the directors that the proposition of Frederick Weber to purchase the assets of the Williams Shoe Company, except the stockholders’ liability, amounting to $91,-760.72, be accepted. There is also attached what purports to be a notice of a stockholders’ meeting for September 6, 1913, for the purpose of ratifying and approving the action of the directors in selling the assets to Frederick Weber in accordance with his proposition. And at this meeting on a vote being taken it appeared that there were 4044 shares voting, of which 4009 voted yes' and 35 no. There also appears as an exhibit attached to the report a copy of the deed of conveyance of all the assets of the Williams Shoe Company to Frederick Weber for the sum of $91,760.72, etc., and a purported copy of an agreement made between Frederick Weber and the Williams Shoe Company to purchase said assets for said sum. The report thereupon proceeds to move the court to approve and confirm all of the proceedings had by the stockholders and directors of said company, and to confirm the sale made by the said the Williams Shoe Company to Frederick Weber.

On the same day that the report was filed, 'the judge of the superior court made an entry confirming the report, setting out in said entry that the requirements of Sections 8710 to 8718, inclusive, General Code, had been fully complied with “in accordance with the order of the court heretofore made herein. ’ ’

This would appear to be as far as the court could have gone in this proceeding, if indeed it could have gone as far as it did. It is a question whether or not the court had any power or authority to receive the report of the sale of the assets and to confirm the same, inasmuch as there was no prayer in the petition for the sale of the assets, nor was there any order made by the court to sell the assets. The action brought was purely an equitable one for an injunction and an accounting. Furthermore, the sections of the statutes 8710, et seq., do not contemplate any court proceedings being taken enabling a corporation to sell its entire assets. Those sections contemplate that a corporation itself, without any court proceedings, may proceed-to sell the assets of the corporation in the manner therein provided.

On June 27, 1914, nine months after the last entry was made, a purported supplemental petition was filed by the plaintiffs, Frank Hoffard and Annie Hoffard, in which they set up that the assets of the Williams Shoe Company had been sold in pursuance of the action of the stockholders and directors at the meeting held August 22, 1913, and that the defendant, Frederick Weber, had purchased said assets. They set out the terms of the purchase, and further set out that on October 3, 1913, they notified the Williams Shoe Company and its board of directors in writing that they were dissatisfied with said sale and the nature of their objection, and demanded payment for their stock in said company; that another of the stockholders of record, John Keoler, the holder of twenty-eight shares of preferred stock and seven shares of common stock, also at the same time served a similar notice in writing; and that said notice was strictly in compliance with the remedy created by the laws of Ohio in Sections 8710 to 8718 of the General Code. It further alleges that the Williams Shoe Company failed to pay. And that the Williams Shoe Company selected as _ an arbitrator Joseph A. Sahlfeld to act for them and the plaintiffs selected I. M. Freiberg, and these two selected John F. Ankenbauer; and that the three arbitrators gave due and proper notice to the interested parties of their meetings; that the first meeting was held March 27, 1914, and that the plaintiffs and the defendant were represented by their counsel, William Creed and Ed. A. Hafner, appearing for the Williams Shoe Company, and W. B. Miente and Henry Bentley appearing for Frank and Annie Hoffard; evidence was taken and tbe arbitrators made an award finding tbe value of tbe stock of plaintiffs'to be $1,900, and a copy of the award is attached to the supplemental petition. They further allege that the Williams Shoe Company was furnished with a copy of said award and neglected for more than sixty days to take any action thereon, and failed to pay the amount of the award; and they therefore pray for judgment against the defendants in the sum of $1,900, with interest at six per cent, from the 6th day of September, 1913. The purported copy of the award attached to the supplemental petition appears to be signed by two of the arbitrators only, John F. Ankenbauer and I. M. Freiberg.

It thus appears that there was engrafted on this bill of equity an action at law pure and simple, to recover a money judgment.

Thereafter, on the 16th of December, 1914, John Keoler filed an intervening petition, by leave of court, in which he set up substantially the same state of facts as was set up in the supplemental petition by Frank and Annie Hoffard with this difference, that he claimed to be the owner of twenty-eight shares of the preferred stock of the Williams Shoe Company and of seven shares of the common stock of said company, and he asked for a personal judgment against the defendant, the Williams Shoe Company, in the sum of $2,100, with interest from September 6, 1913. And there is attached to the intervening petition what purports to be a copy of an award made by the same arbitrators, signed by two only, as in the Hoffard ease. Summonses were issued upon the supplemental petition and upon the intervening petition, and service was duly made upon the Williams Shoe Company and the defendants, Frederick Weber and Charles Weber.

Thereupon the Williams Shoe Company filed answers to the supplemental petition and the intervening petition, which answers are substantially the same, in which they admit most of the allegations of the supplemental petition and the intervening petition, but deny that there was any award made in favor of Frank Hoffard and wife or in favor of John Keoler. They deny that the arbitrators made an award finding the value of the stock of Hoffard and wife to be $1,900, and they deny that the copy of said award attached to the supplemental petition as Exhibit A and made part thereof is the award. The same denial appears in the answer to the intervening petition of Keoler.

Whereupon Hoffard and wife, and Keoler filed motions for judgment upon the pleadings, and the court granted said motions, and entered'judgment in favor of Hoffard and wife for the amount of their claim with interest; and for Keoler for the amount of his claim with interest.

There were two separate judgments entered—one in favor of Hoffard and wife on their supplemental petition, and one in favor of Keoler on his intervening petition. We have, therefore, the anomalous situation in this case of three final judgments in one case: the decree on the bill in equity, and two separate judgments—one on the supplemental petition and another on the intervening petition—in favor of different parties; and these judgments were rendered in the face of the fact that the defendants denied in their answers to the supplemental petition and to the intervening petition that the arbitrators made an award in finding the value of the stock of plaintiffs as alleged in the petitions, and in the face of the denial that copies of the awards were attached to the petitions in the case.

Sections 8710, 8711 and 8712 provide that a corporation may sell its entire assets by taking certain steps therein set out, upon the vote of three-fourths of the directors and upon the action of the board of directors being ratified by three-fourths of the stockholders at a meeting called for that purpose. These sections, as above stated, do not contemplate any court proceedings, but the entire proceeding is to be taken by the stockholders and directors of the corporation.

Section 8713 provides that if a stockholder be dissatisfied with such sale and refuses to participate in the proceeds thereof, within thirty days after the adoption of such an agreement to sell he shall state his objections in writing and file them with the corporation, and in writing he shall demand from it payment for his stock. Within sixty days thereafter such corporation shall pay to him the value of his stock. In ease of a disagreement as to the value of the stock it shall be ascertained by three disinterested persons, one of whom is to be chosen by the stockholder who is dissatisfied, one by the directors of the corporation, and the other by the two so selected, who shall conduct an arbitration as provided by the law regulating arbitrations.

Section 8714 provides that if the award is not paid within sixty days from its making, and notice thereof given to the stockholder and the corporation, its amount shall be evidence of the amount due from the corporation, and may be collected as other debts against it.

It would appear, therefore, that if an award be made by three disinterested persons, as provided by Section 8713, and the company fails to pay the award, the amount so found shall be evidence of the amount due from the corporation and shall be collected as other debts against it. There is no mode of collecting debts from a corporation except by voluntary payment by the corporation or by resort to the court for a judgment for the amount of the claim.

We can see no warrant or authority of law for the filing of the supplemental petition or the intervening petition in this case by two separate stockholders of the corporation upon the claim that an award had been made to them. Each of these parties has a right of action in separate suits against the corporation, for failure to pay an award; but from the record in this case the court was not authorized to enter a judgment against the plaintiff, even if there had been separate suits brought, upon a motion for a judgment on the pleadings, there being a denial, in the answers, of an award and of other material facts. The question of the right to recover should have been submitted to a jury.

The record further discloses that the alleged award was not made by three disinterested persons, but by two only, and there is no provision for making an award by two disinterested persons. The statute authorizes them to proceed according to the methods of arbitration which will be found in Section 12148 to 12160 inclusive, of the General Code. These provisions apply to a statutory arbitration, but the arbitration provided for under Section 8713 is manifestly not a statutory arbitration. If anything, it is a common law arbitration. See Railway Co. v. Burke, 54 O. S., 98; Mock v. Bowman, 2 C. C., 574.

¥e have been somewhat puzzled to determine what judgment shall be entered in this proceeding in error. We are satisfied that the court erred in entering a judgment against the Williams Shoe Company upon the supplemental petition, and upon the intervening petition, and the judgments should be reversed. We are further of the opinion that the court below should not have permitted the supplemental petition or the intervening petition to have been filed in the action brought by the plaintiffs. The court could not engraft upon a bill in equity two causes of action at law for money judgments against the defendants. If the Williams Shoe Company had objected to the filing of the supplemental petition and the intervening petition, it would have been the duty of the court to refuse to permit them to be filed; or, if an objection had been made after they were filed it would have been the duty of the court to strike them from the files.

Upon the whole, we think that the proper course to pursue in this case is to. reverse these judgments upon the supplemental petition and the intervening petition, and remand the case to the superior court, with directions to dismiss the supplemental and intervening petitions, and to proceed to try any question remaining undisposed of under the original bill filed in the cause.

Judgment accordingly.

Jones (E. H.), P. J., and Jones (Oliver B.), J., concur.


text:
    AS TO THE FINALITY OF JUDGMENTS BY REVIEWING COURTS ON WEIGHT OF THE EVIDENCE.
    ■Court of Appeals for Allen County.
    The Farmers Banking Company of Pandora v. William H. Harper, Jr.
    Decided, March 16, 1917.

      Reversal on Weight of the Evidence—Law of the Case Not Thereby Established—Unless Evidence on Retrial is Substantially the Same.

    Where a former judgment for the plaintiff has been reversed on the sole ground that it was against the weight of the evidence, and on a retrial a verdict is directed for the defendant on the ground that the judgment of the reviewing court had established the law of the case, such order directing a verdict is erroneous when the evidence on the second trial is not substantially the same as on the first trial, and the plaintiff having made a prima facie case, the judgment on the directed verdict will be reversed.

      Hughes & Tripplehorn, for plaintiff in error.

      Wheeler & Bentley and J. W. Askins, contra.
    Error to tbe court of common pleas.
   Richards, J.

This action was brought for tbe purpose of bolding tbe defendant liable as endorser on a promissory note wbicb be bad endorsed and transferred to plaintiff. On tbe first trial of tbe case each party, at tbe conclusion of all tbe evidence, moved tbe court for a directed verdict, and tbe trial judge, after due consideration, found and determined that the plaintiff was entitled to a judgment for tbe amount of tbe note and rendered judgment accordingly. Harper prosecuted error to this court and tbe judgment was reversed on tbe ground that it was contrary to tbe weight of the evidence, the decision of this court being announced on February 7, 1916, and tbe case being remanded for further proceedings.

It is said in argument that this court, in rendering the judgment of reversal, was mistaken in assuming as a fact that Harper did not prevail in a certain other action, some of the proceedings of which had been offered in evidence, it being now contended that as a matter of fact the action referred to has not yet been disposed of. 'Technically, the statement of this court was correct in that Harper, of course, has not prevailed if the action referred to has not been disposed of. The record shows that the action, to which reference was there made was commenced on September 5, 1911, and possibly this court had in mind the well known principle of equity that things which should have been done will be presumed to have been done, and from this principle reached the conclusion that the action must have been disposed of, if having been pending all those years. However, the disposition of that ease is a matter of little importance to a determination of the case at bar.

On the retrial of the instant case the trial judge at the conclusion of Hie evidence offered on behalf of the plaintiff directed a verdict in favor of the defendant, basing his action upon the ground that the court of appeals, having already determined that the former judgment was against the weight of the evidence, had thereby established the law of the case and that the defendant was, therefore, perforce, entitled to a verdict by direction of the court, the evidence on the retrial being the same.

This position is earnestly contended for in this court by counsel for the defendant. In order to determine whether the contention is correct it will be necessary to examine the record on the retrial of the ease. That trial opened with the following statement, made by counsel for plaintiff:

“It has been agreed that we may read, all of us, the testimony on both sides that has been given in -the former.trial, subject of course to any objections to the competency or otherwise of the testimony. ’ ’

Counsel for the defendant then stated that the testimony could be read instead of calling the witnesses again, and that this was all that they agreed to. After these preliminary statements the record recites that thereupon counsel for the plaintiff, to maintain the issues upon its'part to be maintained, called as a witness, for cross-examination only, William PI. Plarper, Jr., who being first duly sworn, testified as follows: the bill of exceptions then proceeding to set out in full his cross-examination. The only conclusion from which the court could draw the inference that the witnesses were not actually produced in open court and re-examined is based on the statements already made by counsel, and the fact that the testimony of the witnesses is contained within quotation marks. We assume that this testimony was read from the previous record in the case.

It does not, however, appear that all of the evidence which was introduced on the first trial was introduced on the second trial of the case. On the contrary, the record affirmatively shows that it does not contain all of the evidence which was introduced on the first trial. The judgment which was rendered on the first trial is shown by the journal entry thereof to have been rendered after both the plaintiff and the defendant had introduced evidence and rested; whereas the judgment rendered on the second trial is shown to have been rendered at the conclusion of the evidence offered on behalf of the plaintiff, and the bill of exceptions shows that it does not contain the evidence offered by the defendant on the former trial, because all of the witnesses are examined in chief by counsel for plaintiff, whereas if any of the evidence was that which had been offered by defendant on the former trial it would appear that the witnesses called by him had been first examined by his counsel.

It is manifest, therefore,, that the bill of exceptions now before us does not contain any evidence offered on the former trial on behalf of the defendant, and we are not permitted to assume what that evidence may have been. Each party, as is well known, is entitled to the benefit of all the evidence no matter •by whom it may have been offered.

Reliance is placed on Michigan Mutual Life Insurance Co. v. Whittaker, Adm’r, 9 C.C.(N.S.), 126. In this case the circuit court sitting in Hamilton county reversed a second judgment which had been rendered and entered a final judgment in favor of the plaintiff in error, basing its action on the ground that the former reversal had been on the weight of the evidence and that this having determined the law of the ease a similar verdict should be directed on a retrial of the ease in the absence of additional testimony. This case was carried to the Supreme Court and is there found reported under the title of Whitaker, Adm’r, v. Michigan Mutual Life Insurance Co., 77 O. S., 518, where the judgment of reversal is affirmed, but the final judgment rendered by the circuit court is reversed and the cause remanded for a new trial. The Supreme Court, however, did not determine whether the principle announced by the circuit court was a correct statement of the law, but Shauek, C. J., speaking for the court, on page 521 said:

Assuming the correctness of that view respecting the effect of the former judgment of the circuit court, there are two reasons why it should not have been applied in the present case. ’ ’

One of the reasons found to exist in that case is manifest upon the face of the record in the case now under consideration, namely, it appears that upon the- second trial of this case all the evidence was not offered which had been offered on the former trial of the case. Counsel did not claim at the opening of the trial that they were going to offer all of the evidence which had been offered on the former trial and, as already stated, the record itself shows that if they had made such contention it was not carried out.

If we assume the correctness of the decision cited in 9 C.C. (N.S.), supra, the authority can only be applied in a case where the evidence on the retrial is substantially the same as on the first trial. If the record discloses that such is not the case, and if the plaintiff by evidence offered on a retrial makes a prima facie case, the sufficiency of the evidence would, of course, come within the general rule of law and have to be submitted to the jury for its determination. Manifestly, when a reviewing court reverses a ease for the sole reason that the judgment rendered was against the weight of the evidence, that holding could not be the law of the case in any future trial unless the evidence on such future trial should be substantially the same as that offered on the former trial. In a ease where a judgment has been rendered for the plaintiff and a reviewing court, finding that the same is against the weight of the evidence, reverses and remands the cause for a new trial, the judgment of reversal may have been based upon evidence which came from witnesses called by the defendant.

Upon the general question now under consideration see Sidney v. Schmidt, 33 C. C., 128, and Firemen’s Ins. Co. v. Stern, 11 C. D., 818.

Furthermore, it appears from the record that on the last trial H. C. Eysenbach was called as a witness and testified, and that he had not testified on the former trial of the case. Certain portions of his testimony are material to the issues between the parties, and the weight which should be given to his testimony was of course a matter for the jury. It may be, as has been stated, entirely cumulative and not very important, but it is certainly entitled to some weight, and the plaintiff was entitled to strengthen its ease by submitting on the retrial whatever additional evidence it might have, whether cumulative or otherwise, and was entitled to have the weight thereof determined by the jury.

Finding that the plaintiff on the retrial of the case introduced evidence maMng at least a prima facie ease in its behalf, and that the evidence was not substantially the same as on the former trial, it follows from what has been said that the judgment based on the directed verdict must be reversed and the cause remanded for further proceedings.

Chittenden, J., and Kinkade, J., .concur.


author: Houck, J.

text:
    SERVICE OUTSIDE OF THE COUNTY.
    Court of Appeals for Knox County.
    Edward Blackburn v. Webb Peoples.
    Decided, October 25, 1917.

      Stimmons—In an Action for Foreclosure of a Common Law Lien—May Not he Issued for Service Outside of the County—Summons in Actions in Foreclosure Distinguished.

    No authority exists for issue or service of summons outside of the county upon a non-resident defendant who has been sued for fore- ' closure of a common law lien.

      Wm. M. Koons and Wm. G. Koons, for plaintiff in error.

      J. W. Barry, contra.
   Houck, J.

This suit was originally commenced in the Common Pleas Court of Knox County, the plaintiff in error being the plaintiff below and the defendant in error being the defendant below.

The cause of action set forth in the petition w.as for the foreclosure of a common law lien claimed to be held by the plaintiff on a certain Ford automobile owned 'by the defendant, upon which plaintiff had made certain repairs and performed work and labor thereon. Plaintiff claimed there was due him for such repairs and such labor the sum of $272.57. 'The prayer of the petition is for the recovery of said $272.57 and for an order of court to issue to the sheriff of Knox county, Ohio, directing him to advertise and sell said machine and apply the proceeds of said sale in payment of the amount as found due the plaintiff, and for general relief.

The plaintiff resides in Knox county, the defendant in Morrow county, Ohio. A summons was issued on said petition directed to the sheriff of Morrow county, Ohio, and personal service was had upon the defendant, Webb Peoples. A motion was filed by defendant attacking tbe jurisdiction of tbe court on tbe ground that defendant was a resident of Morrow county, Ohio, and that service had been made in that county. The court of common pleas sustained said motion, and to the sustaining of same error is prosecuted to this court.

'The defendant in error contends that the petition in error should be dismissed because there is no fina] order or judgment entered in the ease from which error can be prosecuted. He further insists that the motion to quash the service of summons was properly sustained by the trial judge.

Passing the question as to whether or not the judgment in this case is one from which error' can be prosecuted, and going to the merits of the case, we know of no authority in law for the issuing of a summons in a foreclosure of a common law lien outside of the county in which the plaintiff resides. The summons in this case was served upon the defendant, who was not a resident of the county in which it was issued, and it was not served upon him within the county in which it was issued, and we are bound to hold and do hold that the common pleas court had no jurisdiction over the person of the defendant in the present case.

Counsel for plaintiff in error contend and urge that because a summons can be issued to an adjoining county in a foreclosure proceeding that it necessarily follows that the same procedure is proper in the foreclosure of a common law lien. In the case of the foreclosure of a mortgage the statute clearly provides for such" procedure, but we know of no statute with reference to common law liens, and we have been unable to find an adjudicated case wherein it was held that a summons could be issued to an adjoining county where it was sought to foreclose a common law lien.

Thus it follows that the finding of the common pleas court will not be disturbed in the judgment entered in this ease.

Judgment affirmed.

Powell, J., and Shields, J7 concur.


text:
    VALIDITY OF EXTRADITION PROCEEDINGS.
    Court of Appeals for Hamilton County.
    Ex Parte James Maloney.
    Decided, December 3, 1917.

      Extradition—Duty of a Governor Upon,Demand Being Made for a Fugitive—Probable Guilt of the Accused Can Not be Determined on Habeas Corpus.

    It is the duty of the Governor of this state to issue a warrant of arrest for one alleged to be a fugitive from justice in another state, upon demand of the Governor of such other state accompanied by an affidavit, certified as authentic, which sets' forth the charge made against the said alleged fugitive and the charge so set forth constitutes a crime or felony committed in such other state; and it is not the province of the Governor to inquire whether the person sought to be extradited is guilty of the offense charged; and a court is without authority, upon application for release by habeas corpus, to hear the case on its merits for the purpose of determiing whether or not the accused is probably guilty of the offense for which he is being extradited.

      D. T. Hachett, for James Maloney.

      J. V. Campbell, Prosecuting Attorney and W. M. Loche, Assistant Prosecuting Attorney, for the state.
   Gorman, J.

Upon the 4th of May, 1917, James Maloney was arrested on a warrant issued by the Governor of the state of Ohio in extradition charging him with being a fugitive from justice from the state of Pennsylvania, county of Lancaster. Maloney was taken into custody by the sheriff of Hamilton county under the warrant issued by the Governor, and before he had an opportunity to be taken before one of the judges of the court of common pleas, as required iby Sections 113 and 114, General Code, .a writ of habeas corpus was sued out on his behalf by Denis T. Hackett in which it was alleged that Maloney was illegally restrained and deprived of his liberty, without any legal authority, by George F. Schott, sheriff of Hamilton county, Ohio. The sheriff .answered the writ, setting out that he held Maloney by virtue of the warrant issued by the Governor of the state of Ohio, which warrant was issued at the request of the Governor of Pennsylvania for the arrest of said James Maloney, and was directed to him as sheriff of Hamilton county, commanding him to arrest and detain the said Maloney.

Upon Maloney being brought into the court of common pleas, a hearing was held by one of the judges thereof, and Maloney was discharged from the custody of the sheriff. The entry discharging Maloney is as follows:

‘ ‘ This cause came on to be heard on the pleadings and the evidence, all the parties being in court, and upon due consideration thereof the court finds that the said prisoner is unlawfully restrained of his liberty, because the affidavit dated December 30, 1916, does not charge a crime under the laws of Pennsylvania, and that the proceedings before the Governor of Ohio were not in accordance with the laws of Ohio.”

Error was prosecuted to that judgment discharging the prisoner, and the cause is now in this court for our determination.

It appears that the judge who heard the cause in the common pleas court conceived it to be his duty to hear the case upon its merits as to whether or not Maloney was guilty of an offense in the state of Pennsylvania. Evidence was permitted to be introduced by counsel for Maloney tending to show that Maloney was not an employee of one Duncan, and that he was in business in Lancaster, Pa., on his own account. We think in permitting this evidence to be adduced at this hearing the court of common pleas misconceived the province of the writ of habeas corpus.

The sole question for the court was whether or not the Governor of Ohio was authorized in issuing a warrant for the arrest and extradition of Maloney upon the request of the Governor of Pennsylvania. The record discloses that the Governor of Pennsylvania made a request to the Governor of Ohio for the surrender and designated as the agent of the state of Pennsylvania one H. N. Steigerwalt. The record also shows that there was an affidavit made before John F. Heinitsch, an alderman in and for the city of Lancaster and county of Lancaster and state of Pennsylvania, by one H. A. Duncan, charging that James Maloney did on or about the 19th-23d day of December, 1916, in the city of Lancaster, unlawfully and willfully commit embezzlement; that said J ames Maloney then and there being employed by H. A. Duncan as a salesman to sell fruit, etc., did by virtue of such employment receive and take into his possession $146.05, which is the subject of larceny for and on account of his said employer; and did then and there unlawfully, fraudulently and feloniously embezzle the said $146.05, contrary to the acts of the Assembly of the Commonwealth of Pennsylvania in such cases made and provided. This affidavit was dated December 30, 1916, and certified as being a true and correct copy by said alderman.

'There was also offered in evidence the warrant of the Governor of the state of Ohio, which recites, among other things, that—■

‘ ‘Nequisition has been made upon me (the Governor of Ohio) by the Governor of the state of Pennsylvania for the extradition of James Maloney, alleged fugitive from justice of said state of Pennsylvania, charged with the crime of felonious embezzlement, as appears by a copy of complaint duly authenticated and attached to the requisition aforesaid.”

There also is in evidence a copy of Section 107 of the act of the Assembly of the commonwealth of Pennsylvania, passed March 31, 1850, P. L., 408. 'This reads as follows:

“If any clerk, servant, or other person in the employ of another, shall by virtue of such employment receive and take into his possession any chattel, money or valuable security, which is or may be made the subject of larceny, for or in the name, or on account of his master, or employer, and shall fraudulently embezzle the same, or any part thereof, every such offender shall be deemed to have feloniously stolen the same from his master or employer, although such chattel, money or security was not received into the possession of such master or employer otherwise than by the actual possession of his clerk, servant or other person in his employ, and shall be punished as is provided in eases of larceny of like property.”

We do not know whether this was all the evidence adduced before the Governor of 'Ohio upon which he’ issued his warrant for the arrest of James Maloney.

The Constitution of the United States, Article IV, Section 2, Clause 2, provides that:.

“A person charged in any state with treason, felony or other crime, who shall flee from justice and be found in another state, shall on demand of the executive authority of the state from which he has fled, be delivered up to be removed to the state having jurisdiction of the crime.”

Congress enacted Section 5278 of the Revised Statutes of United States for the purpose of carrying out this provision of the federal Constitution.

'The Legislature of the state of Ohio has enacted Section 15341, General Code, which is verbatim Section 5379, Revised Statutes of U. S. This section provides:

“Whenever the executive authority of any state or territory demands any person as a fugitive from justice, of the executive authority of any state or territory to which such person has fled, and produces copy of an indictment found or an affidavit made before a magistrate of any state or territory, charging the person demanded with having committed treason, felony or other crime, certified as authentic by the Governor or chief magistrate of the state or territory from whence the person so charged has fled, it shall be the duty of the executive authority of the state or territory to which such person has fled to cause him to be arrested and secured, and to cause notice of the arrest to be given to the executive authority making such demand, or to the agent of such authority .appointed to receive the fugitive, and to cause the fugitive to be delivered to such agent when he shall appear.”

The warrant of the Governor of the state of Ohio recites that “a copy of the complaint charging the crime against Maloney, duly authenticated and attached to the requisition aforesaid,” was presented to him. 'There is an absence of any evidence in this case that such complaint duly authenticated was not before the Governor, and we are 'bound to presume that the Governor acted upon the evidence duly presented and duly authenticated.

It is claimed by counsel for Maloney that under Section 110, General Code, it was the duty of the person who made the demand or application for a warrant to the Governor of the state of Ohio that he should present sworn evidence that Maloney was a fugitive from justice and that the demand was made in good faith for the punishment of a crime, and

“not for the purpose of the collection of debt or pecuniary mulct or of removing the alleged fugitive to a foreign jurisdiction to serve him, with civil process, and by a duly attested copy of an indictment or information, or a duly attested copy of a complaint made before a court or magistrate authorized to take it and accompanied with an affidavit or affidavits to the facts constituting the offense charged by persons having actual knowledge thereof.”

Section 110, General Code, does not provide that the demand made upon the Governor of this state shall be accompanied by such evidence. For all that appears in the record in this case the demand made upon the Governor of the state of Ohio was accompanied by this evidence. The record before us does no* pretend to contain all the evidence presented to the Governor of the state of Ohio by the agent of the Governor of the state of Pennsylvania for the requisition of Maloney. Whether or not such evidence was before the Governor of the state of Ohio, we hold that it was his duty to issue his warrant, upon the demand of the Governor of the state of Pennsylvania, if the demand were accompanied by an affidavit certified as authentic, setting forth the charge made against the person who had fled from the state, and said charge set forth a crime or felony committed in another state.

It is not within the province of the Governor of the state of Ohio to inquire whether or not the person who was sought tq be extradited was guilty of the offense charged. All that he was obliged to do, and all that he should do would be to ascertain whether or not there was evidence charging the commission of a crime or felony, against the person who was sought to be extradited, and that this evidence was duly authenticated.

It was not the province of the court of common pleas under Sections 113 and. 114, General Code, to review the action of the Governor of the state of Ohio; nor could the court of common pleas in this ease determine whether or not James Maloney was guilty of the commission of a crime in the state of Pennsylvania, if the crime were charged; and the affidavit submitted in this case appears to us to charge the commission of .embezzlement under Section 107 of the Assembly of the commonwealth of Pennsylvania above cited. It was not the province of the court of common .pleas to hear testimony as to whether or not Maloney was engaged in business on his own account or as an employee of some other person in the state of Pennsylvania', city of Lancaster. These sections, 109 to 118, inclusive, were passed by the Legislature of this state for the purpose of aiding and assisting the Governor in extradition matters, and not for the purpose of thwarting him in the administration of his functions as Governor of the state.

If Section 110, General Code, should be construed as is claimed by counsel for Maloney, then we hold it would be in contravention of the provision of the federal Constitution above cited, and in contravention of the statute of the United States, Section 5278 (G. C., 15341), and to that extent it would 'be null and void. But as we read this section and construe it; we think it applies to the Governor of the state, and not to a judge of the court of common pleas. It was passed for the purpose of guiding the Governor in determining whether or not a warrant should be issued. It related to the evidence that must be adduced to the Governor, and there is no provision in the statute which requires all the evidence adduced before the Governor to be presented to a judge of the court of common pleas, the Supreme Court or the court of appeals when an extradited person is brought before .any one of these courts.

Section 113, General Code, provides:

“If the Governor decide to comply with the demand for the surrender of a person charged with an offense committed in another state or territory, he shall issue a warrant to the sheriff of the county in which the person so charged may be found, commanding 'him forthwith, to arrest and bring such person before a judge of the Supreme Court, of the court of appeals or of the common pleas court, to be examined on the charge.”

Section 114, General Code, provides:

“Upon the return of the warrant by the ¡Sheriff with the person so charged in custody, the judge before whom the person so arrested is ¡brought shall proceed to hear and examine the charge. Upon proof by him adjudged sufficient, he shall commit such person to the jail of the county for a time to be fixed by him in the order of committment; thereupon such judge shall cause notice to be given to the executive authority making such demand, or to the agent duly appointed and authorized to receive the fugitive.”

As was said by Judge Longworth in the case of Ex parte Van Vleck, 3 Bull., 763:

“The act of Congress (Section 5278, U. S. R. S.) passed in pursuance of Section 2, Article IV of the Constitution of the United States, gives to the Governor of the state upon whom the requisition is made no discretion to inquire into any question further than the identity of the fugitive and the regularity of the requisition papers. Any attempt by state laws to clothe him with greater jurisdiction would be in conflict with the act of Congress.”

In this case the identification of Maloney was undisputed. His own testimony and the testimony of others was to the effect that he was the person who was charged with the commission of the crime in Lancaster, Pennsylvania. 'The affidavit, in our opinion, sufficiently charged the crime under the law of Pennsylvania. The Governor’s warrant appears to be regular and authentic, and the demand by the Governor of Pennsylvania upon the Governor of Ohio appears to be in all respects in accordance with the law. There was no necessity, in our opinion, for an additional affidavit before the court of common pleas such as described in Section 110, General Code. But if there were necessity for such an affidavit, for all that appears in this ease such an affidavit was before the Governor. The record fails . to show the absence of such an affidavit.

'The court of common pleas in undertaking to hear and determine the question of Maloney’s guilt greatly exceeded its jurisdiction and authority. No such power is vested in a court of common pleas under a habeas corpus case to hear and determine a charge of felony committed in another state.

The prisoner, Maloney, should have been remanded to the sheriff, and the habeas corpus should have been dismissed; and because of the failure to take such action by the court of common pleas, the judgment is reversed.

Jones, P. J., concurs; Hamilton, J., not participating.


text:
    GOOD FAITH REQUIRED BETWEEN AN INDEMNITY COMPANY AND THE ASSURED.
    Court of Appeals for Cuyahoga County.
    Judges Richards, Kinkade and Chittenden, of the Sixth District, sitting in place of Judges of the Eighth District.
    The Cleveland Wire Spring Company v. General Accident, Fire & Life Assurance Corporation, Limited.

    Decided, April 21, 1917.

      Insurance—Indemnity Company Must Exercise Good Faith Toward the Insured—In negotiating Settlement of Claim of an Injured Employee.

    1. An indemnity insurance company issuing policies to indemnify the assured in a fixed maximum sum against loss by reason of liability which may be imposed by law on the assured if any of its employees should accidentally suffer injuries within the provisions of the policy, owes to the assured the duty of exercising good faith under its contract of indemnity and in negotiations for the settlement of legal proceedings brought by injured employees.
    2. Where a policy for $5,000 contains a provision that no action shall lie against the indemnity company for' any loss under the policy unless brought by the assured for loss actually sustained and paid by him in satisfaction of a judgment after trial of the issue, and the petition in an action by the assured against the indemnity company avers that the assured had been sued for a sum much greater than the face of'the policy by an employee injured in its service; that while the action was pending, the assured and the indemnity company made every effort to settle with the injured employee and his attorney for a reasonable amount, but that $7,500 was the best proposition that could be obtained; that the assured offered to pay $2,500 of this amount but that the indemnity company refused to pay more than $3,500, although stating that the conditions were such that a verdict of $10,000 or more would be rendered in all probability against the assured, which facts the petition alleged constituted bad faith, and the petition further alleged that the case was not settled but proceeded to trial and resulted in a verdict and judgment in favor of the employee for $20,000 which was paid by the assured, the averments of fact do not show bad faith on the part of the indemnity company nor state facts which render it liable for the difference 'between the amount paid in satisfaction of the judgment, and the amount for which the áction could have been settled.

      T. J. Boss and Holding, Masten, Duncan & Leckie, for plaintiff in error.

      Hoyt, Dustin, Kelley, McKeehan & Andrews, apd Mr. Horne, for defendant in error.

       Motion to require the Court of Appeals to certify its record in this case overruled by the Supreme Court July 3, 1917.

   Richards, J.

Error to the court of common pleas.

The defendant issued to the plaintiff a policy to indemnify it to the extent of five thousand dollars, against loss by reason of liability which might be imposed by law upon plaintiff if any of its employees should accidentally suffer bodily injuries while employed in plaintiff’s factory, and within the provisions of the policy. During the term of the policy one of plaintiff’s employees, named Joe Fogaeh, was injured, which injuries were accidentally suffered and were alleged to have been suffered through the negligence of the plaintiff herein while Fogaeh was such employee in plaintiff’s factory. The policy of indemnity provides as follows:

“Gr. Except as herein elsewhere provided for, the assured shall not voluntarily assume any liability, settle any claim, or incur any expense except at his own costs, or interfere in any negotiation for settlement or legal proceeding without the consent of the corporation previously given in writing.

“I. No action shall lie against the corporation to recover for any loss under this policy unless it shall be brought by the assured for loss actually sustained and paid by him in money in satisfaction of a judgment after trial of the issue.”

i

An action was brought by Fogach against the company to recover for the injury suffered by him, and while it was pending negotiations for settlement occurred. The case was not settled but proceeded to trial and resulted in a verdict and judgment in favor of Fogach in the sum of twenty thousand dollars, which amount was paid by the Cleveland Wire Spring Company, the plaintiff in this case.

The petition in the present action contains three causes of action, the first cause being based on the policy to recover the amount thereof, to-wit, five thousand dollars. The sceond cause of action is based upon a clause in the policy rendering the indemnity company liable for immediate and imperative medical and surgical relief and is for $49.75. These two causes of action have been adjudicated in favor of the plaintiff in this case and are not involved in the controversy now pending between the parties.

The third cause of action was met by a demurrer filed by the defendant, which demurrer was sustained and final judgment rendered on that cause of action against the plaintiff.

It is averred, in substance, in the third cause of action in this case that after the original action to recover damages for personal injury was brought, the indemnity company undertook to and did defend the same in the name of this plaintiff and advised plaintiff that it had made every effort to settle with Joe Fogach for a reasonable amount but was unsuccessful, and that the least amount that the indemnity company was able to settle for was far in excess of the amount of the policy limit, and that if the case proceeded to trial there was a strong probability of a verdict being rendered in excess of the amount of five thousand dollars, and advised the Wire Spring Company to consult its own private counsel as to the best manner of handling the case.

The petition further avers that this plaintiff did employ counsel and negotiated with said Joe Fogaeh and his attorneys for the purpose of settling the claim, and as a result of such negotiations obtained a proposition of settlement in the sum of $7,500, and that it communcated the offer of settlement to the indemnity company and agreed to pay in order to effect the settlement, an amount equal to the difference between seven thousand five hundred dollars and the -amount of the maximum liability of five thousand dollars stipulated in the policy to be paid by the indemnity company.

'The petition further avers that the indemnity company thereupon stated to plaintiff that it would not pay in settlement any sum of money in excess of $3,500, and that if settlement was to be made this plaintiff must pay the difference between said amount of $3,500 and the amount of the proposed settlement, $7,500. The plaintiff avers that the indemnity company represented to it that there was urgent necessity of settling the case as the conditions were such that a verdict of $10,000 or more would in all probability be rendered against the Wire Spring Company as defendant in the suit brought by Joe Fogaeh; and the plaintiff avers that these facts constitute a breach of good faith on the part of the indemnity company in the performance of its contract. Plaintiff demands judgment on this third cause of action in the sum of $12,500, being the difference between the amount paid by it in satisfaction of the judgment, and the amount .for which the ease could have been settled.

The theory of the plaintiff in this action is that the indemnity company impliedly agreed to exercise good faith in its conduct under the contract of indemnity, and that having, as plaintiff claims, failed so to do, it is liable in tort for the damages proximately resulting therefrom. We are quite in accord with the plaintiff’s contention that the duty rested upon the indemnity company to exercise good faith under the contract relations existing between the parties, and it will become necessary to recur to the averments of the third cause of action to ascertain whether it does set forth such facts as may amount to a charge of bad faith.

The contract of indemnity only rendered the company liable for loss actually suffered and paid by the assured in satisfaction of a judgment after trial of the issue. It, of course, can not be contended that liability arose, by virtue of the provisions of the policy, in excess of the maximum amount of $5,000 specified therein, and for immediate imperative medical and surgical relief; and no liability for any amount arose under the contract of indemnity until after judgment had been rendered against the assured and the same had been satisfied by it. The pleading avers that the indemnity company stated that there was a “strong probability of a verdict being rendered in excess of the policy limits,” and that “a verdict of ten thousand dollars or more would in all probability be rendered against this plaintiff as defendant in the suit of Joe Fogach.” It will be noticed that the averments do not show that the indemnity company was admitting its liability to pay the full amount of its policy by reason of the injury to Fogach, but only that there was a strong probability of a large verdict and that a verdict of ten thousand dollars or more would in all probability be rendered. The pleading nowhere shows the extent of the injuries to Fogach, nor the manner in which they were received. It is a fair inference from the averments, that the prosecution of the case was attended with, the uncertainty usually met with in actions by employees to recover for personal injury, the strong probabilities being, as averred in the petition, in favor of the recovery of a large sum in this case.

The indemnity company, however, had the right to estimate and value that probability. It might well take the position that while the verdict would probably be in excess of the amount of its policy, it might not be so, and it had the right, under the terms of the policy, to require that the action should be litigated in order to definitely settle and determine the amount of the liability, if any. Evidently, under the averments of the third cause of action, it valued this right at $1,500, and in so valuing it and in declining to pay an amount in excess of $3,500 by way of settlement, the petition contains no averments of fact showing bad faith. Looking at the result which finally occurred it would have exercised better judgment by offering to pay a larger sum than $3,500, but this is far from saying that in what it did do it was in any wise guilty of bad faith. It is perfectly clear, under the language of the policy, that the indemnity company might have stood on its contractual rights and declined to offer the payment of any sum by way of settlement in advance of the trial.

The precise question under consideration does not appear to have been determined in very many reported cases but the principles determining liability in such eases have been announced in some very respectable authorities.

Schmidt v. Travelers’ Insurance Co., 244 Pa. St., 286, was a case in which under an indemnity policy of five thousand dollars settlement could have been effected for six thousand dollars, the assured offering to contribute one thousand dollars to the amount and requesting the indemnity company to make settlement, which was refused. The trial resulted in a verdict and judgment for $9,200. It is true that the report of that case does not show that bad faith was specifically charged against the indemnity company as is claimed to be charged in the petition in the instant case; but the petition in the case cited did set forth the facts already stated, and the only difference of importance between that ease and the case now under consideration is that the defendant company admitted there was strong probability that a verdict would be rendered for a sum largely in excess of the face of the policy. In the opinion of this court these averments do not distinguish the case from the authority just cited.

Brown & McCabe, Stevedores, Inc., v. London Guaranty & Accident Co., 232 Fed., 298, is another case shedding much light on the question under consideration. In that case the report shows that the indemnity company recognized its liability, and this fact distinguishes that case from one in which the averment is only that there is strong probability of a verdict being rendered in excess of the amount of the policy. The court, in the case last cited, uses this language in the course of the opinion:

‘ ‘ It has been held that, under a policy like the one in question, • the insurance company has a right to settle with an injured employe or not, as it deems advisable, and if it neglects or refuses to do so, and litigates a matter in good faith, and judgment is recovered for more than the face of the policy, it is not liable for the excess.”

While announcing the rule as above stated, it held that the case was not within its terms because it appeared to be an attempted hold-up of the assured. The averments in the ease at bar do not show that the indemnity company undertook to hold up the assured, nor that it exercised bad faith, but rather that the parties were all negotiating in an attempt to make such a settlement as would be advantageous to all parties concerned.

An authority on which much reliance is placed by the plaintiff is Wisconsin Zinc Co. v. Fidelity & Deposit Company of Maryland, 162 Wis., 39; same case 155 N. W., 1081. In that case the court held that no duty to exercise ordinary care was enjoined upon the indemnity company by the terms of the policy and determined that the first and second causes of action were insufficient. The third cause of action was held to set forth a good cause of action because the court, as it construed the averments thereof, reached the conclusion that it did in fact charge the indemnity company with failing to exercise good faith. We are entirely in accord with the holding in that case. The indemnity company had the right, as was there said, to consult what it deemed to be its own interest in making settlement, but it did not have the right to abuse the power vested in it and recklessly and contumaciously refuse to settle. It can not be said that the averments in the third cause of action in the case at bar show reckless or contumacious conduct on the part of the indemnity company. It went no farther than to concede strong probability of a large verdict, perhaps bearing in mind that judgments were not always rendered on verdicts which had been returned, and, if rendered, were sometimes for smaller amounts than named in the verdicts, and perhaps relying also on the possibility of obtaining a reversal of any judgment that might be rendered. The indemnity company in determining how much it would pay by way of settlement had the right to take into consideration all the possibilities that were or might be presented to relieve it from ultimate liability under the terms of its policy, including the possible insolvency of the assured. It is evident from the fact that it offered seventy per cent, of the face of the policy by way of settlement, that it must have realized a strong probability of recovery in a large sum. However, in view of the fact that its maximum liability under the policy was $5,000, it falls very far short of being an admission on its part of a liability for the amount of $5,000, for it to suggest the probability of a recovery of an amount that would constitute such a liability—much less does it tend to show any bad faith on its part.

We find nothing in the case of Brassil v. Maryland Casualty Co., 210 N. Y. 235, inconsistent with the views expressed in this opinion.

The judgment will be affirmed.

Chittenden, J., and Kinkade, J., concur.


text:
    SETTLEMENT BETWEEN EXECUTORS OF THE SAME ESTATE.
    Court of Appeals .for Knox County.
    Elva Loney, Executor of Reuben C. Loney, v. W. W. Walkey, Administrator of Julia A. Loney, Deceased.
    Decided, October 25, 1917.

      Jurisdiction—Probate Court Alone "Vested "With Authority in Matters Pertaining to the Settlement of Estates.

    The common pleas court is without jurisdiction over an action brought by au executor against his co-executor for an accounting. Such an issue must be presented to and finally determined by the probate court.

      L. C. Stilwell, D. B. BawUns, J. B. Graham, B. L. Carr, for plaintiff in error.

      F. O. Levering and P. A. Berry, contra.
   Houck, J.

The parties here stand in the same relation to each other as in the court below. The errors complained of are:

First, to the overruling of the demurrer to the answer of defendant.

Second, in the sustaining of the demurrer to the reply filed 'by plaintiff to the answer of defendant.

Third, to the court sustaining a motion to dismiss plaintiff’s case and rendering a judgment for defendant.

An inspection of the petition of the plaintiff in error, who was the plaintiff below, clearly shows that the basis of the action and the relief sought was an accounting between Julia A. Loney, as executrix of Beuben C. Loney, deceased, and Elva Loney, as co-executor thereof.

To us this is a new procedure, and we are unable to find any authority in law for it. The probate court is by law created for the purpose of hearing and determining all questions with reference to accounts of administrators, executors, guardians, etc., and in the settlement of all estates the rights of the parties therein as to the funds belonging to the estate, and in the administration thereof must first be determined by that court.

The issues raised in the ease now before us for review upon the petition, answer, and reply, clearly show that the common pleas court, and this court as well, is and are wholly without jurisdiction in the premises, because the issues raised by the pleadings must first be passed upon and finally determined in the probate court.

It therefore follows, from what we have already said, that we find no prejudicial error in the record, and that the judgment of the common pleas court must 'be affirmed.

Judgment affirmed.

Powell, J., and Shields, J., concur.