text:
    PROVISION FOR DEPOSIT OF PUBLIC FUNDS.
    [Circuit Court of Fairfield County.]
    The State of Ohio, ex rel the City of Lancaster, Ohio, by Augustus W. Mithoff, Solicitor of the City of Lancaster, Ohio, v. Frank E. Bowers, Treasurer of the City of Lancaster, Ohio.
    Decided, September Term, 1903.

      Mandamus — City Treasurer — Depositary of Public Funds — Sections 135 and 136 of the Municipal Code of 1902 — City Solicitor May Commence Proceedings under Section 1777 and Section 137 of the Municipal Code — Municipality Would not Save Adequate Remedy at Law, when — Section 135 of Municipal Code Constitutional— Ordinance Passed at Special Meeting of Council Valid — Effect of Failure to Notify Member of Special Meeting — Treasurer has no Discretion under Section 135 and 136 — Sufficiency of Bond of Depositary of Public Funds.

    1. Under Section 1777 Revised Statutes of Ohio, as amended April 1, 1890 (87 O. L., 122), and Section 137 of the act of October 22, 1902 (96 O. L., 65), known as the Municipal Code, no action of the council of a municipality is necessary or required to empower or authorize the solicitor thereof to commence proceedings in mandamus to compel an officer or board of the municipality to perform any duty expressly enjoined by law or ordinance, when such officer or board- refuses to perform such duty.
    2. A municipality would not have an adequate remedy at law if the treasurer thereof disobeyed its valid ordinance, and refuses to deposit the public funds in his hands as Such treasurer in a depositary lawfully selected by its council, under Section 135 of said act of October 22, 1902.
    3. Section 135 of said act of October 22, 1902, providing that council shall have authority to provide by ordinance for the deposit of all public moneys coming into the hands of the treasurer in such bank or banks situated within the city which may offer, at competitive bidding, the highest rate of interest, etc., is constitutional and valid.
    4. An ordinance selecting such depositary passed at a special meeting of the council when one member of the council was absent and had not been notified of the meeting is not for that reason invalid or void.
    5. The treasurer of a municipality has no discretion as to whether he will or will not obey an ordinance legally passed by council, providing for a depositary for all public funds, including school funds, coming into his hands as such treasurer, under Sections 135 and 136 of the act of October 22, 1902, and upon his refusal to obey such ordinance mandamus will lie to compel him to do so.
    6. When it appears at the time an ordinance was passed by a municipality selecting a depositary, under said Section 135, a bond was given in double the amount of the funds then in the treasurer’s hands, including school funds, and, afterwards, additional funds come into his hands, the depositary, with the approval of the council, may give an additional bond to cover the increase, so as to keep the security double the amount to be deposited.
    In mandamus.
    This is an action or proceeding in mandamus to compel the city treasurer of the city of Lancaster, Ohio, to deposit the public moneys of which he has charge in a bank selected as depositary pursuant to an ordinance of the city council, under Section 135 and 136 of the Municipal Code (96 O. L., 64, 65.)
    The plaintiff filed in this court August 29, 1903, the following petition: (Omitting caption, signatures and verification.)
    ‘ ‘ The relator, August W. Mithoff, says that he is and for several years last past has been the duly elected, qualified and acting solicitor of the city of Lancaster, Ohio, and a tax-payer, resident and citizen thereof, and he files this petition as relator as such solicitor and on behalf of said city.
    “That the city of Lancaster is a municipal corporation situated in Fairfield county, Ohio, classed as a city under the laws of Ohio.
    “That defendant, Frank E. Bowers, is and since April 13, 1903, has been the duly elected, qualified and acting treasurer of said city of Lancaster, Ohio.
    “That on June 29, 1903, the city council of said city duly enacted an ordinance, entitled, ‘An ordinance No. 10 providing for the deposit of all public moneys coming into the hands of the treasurer of the city in such bank or banks, situated within the city, which may offer at competitive bidding the highest rate of interest therefor and give bond as required by law,’ which said ordinance was duly approved, signed and returned by the mayor of said city, on June 30, 1903, and was thereupon published in two newspapers of opposite politics printed, published and of general circulation in said city, for two consecutive weeks, all as required by statute.
    “In. and by said ordinance it was provided by said city council that all public moneys coming into the hands of the treasurer of said city should be deposited in such bank, situated within said city, as might offer at competitive bidding the highest rate of interest therefor and give sufficient bond therefor of some approved guaranty company in a sum at least double the amount to be deposited; and in and by said ordinance it was provided that the clerk of said council should publish in two newspapers printed and of general circulation in said city once a week for four consecutive weeks a notice inviting sealed proposals from all banks situated within said city, stipulating the rate of interest that shall be paid for'the use of the money aforesaid for the period of two years, and that on the day named in said notice the clerk of council should in the presence of the finance committee of the council and the mayor, open said proposals and transmit the same to the city council at its next meeting thereafter, and the council should award the same to the bank offering the highest rate of interest therefor and giving bond as required by law, and that such bank should thereupon become the depositary of the public moneys of said city for the period of two years next thereafter ensuing.
    “It was also provided by said ordinance that the treasurer upon receipt of a written notice signed by the president and clerk of council stating that a depositary had been selected and the name of such bank so selected should deposit in such bank all public moneys in his custody subject to said terms and conditions aforesaid.
    “And that pursuant to said ordinance the clerk of council duly published in the Lancaster Gazette and Ohio Eagle, two newspapers printed, published and of general circulation in said city and of opposite politics, once a week for four consecutive weeks, a notice inviting sealed proposals from said banks as aforesaid, stipulating the rate of interest they offered to pay for such deposit, and named August 13, 1903, at 12 o’clock noon, as the time for opening such bids; and pursuant to said notice and ordinance, the Hocking Valley National Bank of Lancaster, Ohio, duly filed its sealed bid with said clerk of council and therein offered to pay the sum of two and fifty-five one-hundredths per cent, per annum interest upon daily balances, for the use of said moneys for the period of two years as aforesaid, and on August 13, 1903, after 12 o’clock noon, the clerk of council in presence of the finance committee of the council and mayor opened all bids and publicly read the same and transmitted the same to the city council at its next meeting, and said bid of said the Hocking Valley National Bank of Lancaster, Ohio, offered the highest rate of interest and was the highest and best bid therefor; and at their said meeting the city council duly received said bid and approved and accepted the same and ordered said bank to file its depositary bond as required by law and said ordinance; and on August 20, 1903, said bank duly filed with said council a good and sufficient bond as its depositary bond as aforesaid, being in the sum of one hundred thousand dollars, which was double the amount to be deposited, conditioned that it would receive and safely keep said public moneys and pay the same upon the lawful orders and vouchers of said city and its authorized officers, which said bond was duly executed by said bank and the United States Fidelity & Guaranty Company, of Baltimore, Md., as its surety; and said the United States Fidelty & Guaranty Company, of Baltimore, Md., was and is an approved guaranty company duly authorized by law to do business in this state, and on August 20, 1903, the city council duly accepted said bond and approved the same and named said the Hocking Valley National Bank of Lancaster, Ohio, as the depositary of the public moneys aforesaid, and on August 27, 1903, the defendant was personally served with a written notice signed by the president and clerk of the council stating that said bank had been selected as said depositary for all public moneys coming into his possession as such treasurer.
    “And that said the Hocking Valley National Bank of Lancaster, Ohio, was, and is a national bank under the statutes of the United States of America, doing a banking business and ituated within the city of Lancaster, Ohio, and is ready and able to receive said public moneys as aforesaid.
    “And all said proceedings in connection with such competitive bidding and deposit of such moneys were conducted in such manner as to insure full publicity and were open at all times to the inspection of any citizen.
    “And that on said August 27, 1903, and continuously since, the defendant has had in Ms custody as treasurer of said city a large sum of money, viz., the sum 'of $45,000 public moneys in his hands.
    “And that on August 27, 1903, it became and was the official duty of defendant, as treasurer as áforesaid, to deposit said public moneys in said depositary, the' Hocking Valley National Bank of Lancaster, Ohio, as shown by the premises, but said treasurer has without cause failed and refused so to do, and has not deposited said funds or any. part thereof in said depositary, but yet refuses so to do.

      “That the relator has no complete or adequate remedy at law in the premises to enforce the provisions of said ordinance.
    “■Wherefore, relator prays that a writ of mandamus issue commanding defendant as treasurer as aforesaid to forthwith deposit said public moneys aforesaid in said the Hocking Valley National Bank of Lancaster, Ohio, being said depositary, and for all other proper relief.”
    At the September Term, to-wit, September 1, 1903, of this court for said county, it was ordered that an alternative writ of mandamus issue to the defendant, Frank E. Bowers, treasurer of the city of Lancaster, Ohio, commanding him that he forthwith deposit all public moneys now in his hands, or hereafter coming into his hands, as treasurer of the city of Lancaster, Ohio, in and with the Hocking Valley National Bank of Lancaster, Ohio, as the designated depositary thereof, as provided by ordinance of said' city, as set out in the petition, or else that he, the said respondent, answer or otherwise plead to said petition by the 15th day of October, 1903, and show cause why he has not done or should not do said act, and the clerk shall forthwith issue such writ and attach thereto a true copy of the petition that the same may be served upon the defendant by the sheriff.
    By agreement of both parties this cause was assigned for trial upon October 21, 1903, and said term of this court was ordered to remain open and unadjourned for such purpose.
    September 5, 1903, the alternative writ was issued pursuant to said order, which came into the hands of the sheriff of said county September 8, 1903, and on the same day the writ was served upon the defendant, Frank E. Bowers, Treasurer of the City of Lancaster, Ohio, personally, by delivering to him a duly certified copy of the writ including the petition, verification and order.
    On the 15th day of October, 1903, the defendant filed his answer, which is as follows: (Omitting caption, signatures and verification.)
    “And now come the defendant, and for answer to the alternative mandamus, says: That plaintiff ought not to have its said writ of peremptory mandamus because he saith:

      “First Defense. The city council of said city did not by any resolution or ordinance, or in any other manner, ever direct or authorize the institution or prosecution of said proceeding in mandamus or any other action against said defendant; and the said proceeding was begun and carried on by the said city solicitor of his own volition and without any lawful authority whatsoever.

      “Second Defense. The statute under which the city council of said city — being Section 135 of the act of the General Assembly passed October 22, 1902 — professed to exercise the power of creating a depositary of said public moneys by said alleged ordinance is unconstitutional, null and void.

      “Third Defense. The defendant denies that the said alleged ordinance No. 10 of date June 29, 1903, providing for the deposit of said public moneys was duly enacted, as is averred in the petition.
    “He also denies that the said city council ever duly accepted the bid of the said the Hocking Yalley National Bank as such depositary, and he avers that the action of the council professing to accept said bond of said Hocking Yalley National Bank was illegal and void, because the same was not had at any regular or adjourned meeting of that body, but at a so-called special meeting on August 20, 1903, notice of which was not given to all the members of the council, served personally,- or left at their usual place of abode, and all of them were not present at such special meeting and did not participate in such proceedings.
    “And the bond of said bank as such depositary was therefore never accepted by the said council, nor any contract ever made or entered into between said bank and council for the deposit of said public moneys.

      “Fourth Defense. The defendant is not only treasurer of said city, but also ex-officio treasurer of the school funds of said city, which is the city school district of the second class and includes a large territory outside of the corporate limits of said city, attached thereto for school purposes, and the school funds of said district in the custody and possession of the defendant as such treasurer, are made up largely of taxes collected for school purposes from persons and property not residing or lying within the boundaries of said city.
    “In and by the terms and provisions of said alleged ordinance the defendant is required to deposit in said bank not only the public moneys of and belonging to said city, but also the school funds of said school district, and said alleged ordinance and the proceedings of said city council in respect thereto are all illegal and void for the reason that the said school funds are so included therein.
    “The defendant has in his possession about $45,000 of the moneys of said city, and also about $18,000 of the money of and belonging to said school district, and the bonds of said school district have been issued and sold for the sum of $75,000 additional, which is now ready to be turned over to the defendant i as treasurer of said district, while the bond made and delivered by said bank as such depositary to said city is in the penal sum of $100,000 only, and no bond was ever given by said depositary to the board of education. The written notice served upon the defendant, signed by the clerk and president of the council, as set out in the petition, directed and required him to deposit in said bank, not only the city moneys, but the funds of said school district as well. The defendant has given bond, as required by law, to the said city, which has been duly approved and accepted as treasurer of said city, and also a bond to the board of education of said school district as treasurer of the school funds of said district to the acceptance and approval of said board of education, as required by law.
    “For the reasons aforesaid set out in his several defenses and exercising the discretion and due care confided in and imposed upon him by law, the defendant refuses to deposit said city and school moneys or either thereof in said bank.
    “Wherefore, the defendant prays the said petition of the relator and alternative mandamus issued in this case be dismissed at its costs, and for all proper relief.”
    To this answer the plaintiff on October 20th, 1903, filed the following reply: (Omitting caption, signature and verification.)
    “Replying to the several defenses of the answer, plaintiff says: As to the third defense. At the special meeting of the city council of August 20, 1903, six of the seven members had been duly notified and were present and voted to approve said bond; the seventh member was continuously absent from the city for a number of days preceding said call and until after said meeting was held and his place of abode was closed, and service of said notice could not be made upon him within said city. And the said action of the city council at said special meeting was ratified at the next regular meeting thereof.
    “As to the fourth defense: (1) The limit of the city of Lancaster and the Lancaster School District are identical. (2) Since the giving of said bond and since the commencement of this case, the defendant has received large sums of public moneys as treasurer, so that he has now in his possession $63,000; and the original bond of $100,000 is no longer double the amount of such funds; and on October 19, 1903, said depositary, the Hocking Valley National Bank of Lancaster, Ohio, duly filed with said city council an additional bond duly conditioned for the securing of said deposits in the further sum of $100,000, being a good and sufficient bond with an approved guaranty company as surety; and said bond was duly accepted and approved by said city council on October 19, 1903. And said bonds are more than twice the sum of public moneys now in the hands of said treasurer, to be deposited. ’ ’
    On the same day, to-wit, October 20, 1903, the defendant filed his motion' to strike out the second sub-division of the reply to the fourth defense on the grounds that the facts therein alleged are immaterial and irrelevant.
    The cause was submitted to the court upon the pleadings, evidence and agreed statement of facts.
    Voorhees, J.; Donahue, J., and McCarty, J., concur.
   The questions presented in this case are questions of law rather than of fact, and may be summarized as follows:

1. Can the city solicitor institute this proceeding as relator upon his own volition and without direction by resolution or otherwise from the city council?

2. Is there an adequate remedy at law?

3. Is Section 135 of the Municipal Code a constitutional enactment ?

4. Is this depositary ordinance valid and lawful?

5. Has the city treasurer discretion as to whether he will or will not obey the ordinance passed by the city council under Sections 135 and 136 of the Municipal Code?

6. Can the school funds be controlled by the city council as to selecting the depositary?

7. Are the bonds of the depositary sufficient?

1. Considering these questions in their order attention wilL be directed to the legal capacity of the city solicitor to bring and maintain this action.

Section 1777, Revised Statutes, provides:

“He (city solicitor) shall apply, in the name of the corporation, to a court of competent jurisdiction for an order or injunction to restrain the misapplication of funds of the corporation, or the abuse of its corporate powers, or the execution or performance of any contract made in behalf of the corporation in contravention of the laws or ordinances governing the same, or which was procured by fraud or corruption. And he shall likewise, whenever an obligation or contract made on behalf of the corporation granting a right or easement or creating a public duty is being evaded or violated, apply for the forfeiture or the specific performance of the same as the nature of the ease may require. And in case any officer or board fails to perform any duty, expressly enjoined by law or ordinance, he shall apply to a court of competent .jurisdiction for a writ of mandamus to compel the performance of such duty.”

Section 137 of the act of the General Assembly, of October 22, 1902, known as the Municipal Code, provides that “the powers and duties of the solicitor shall be such as are provided in Sections 1776, 1777, 1778, 1779 and 1780 of the Revised Statutes of Ohio; such as are provided in this act, and all other acts or parts of acts having uniform operation throughout the state and not inconsistent with this act,” etc. This section of the Municipal Code leaves in force Section 1777 of the Revised Statutes, under which no action of the council is required for his authority to take legal steps to enforce the specific performance of a contract made by the corporation as the nature of the case may require.

This action we think falls within the meaning and language of this statute. The defendant as treasurer of the corporation refused and still refuses to perform an official act in relation to the contract made by the corporation through its council in pursuance of an ordinance passed by that body. The contention of the defendant is that because the name of the city appears in the caption the authority of the city council therefore must be had. The statute expressly provides how the solicitor shall apply for these extraordinary remedies, namely, in the name of the corporation. If it were unnecessary for the solicitor to bring the suit in the name of the city, then it would be very clear that authority from the city council would not be a condition precedent to bringing the action, and in naming the city would be mere surplusage. On the other hand if the action is to be prosecuted in the name of the corporation the authority to bring such an action is expressly given by the statute, Section 1777, above referred to.

This section (1777) is a remedial statute and is to receive a liberal construction. Its object and meaning is to preserve to the municipal corporation its rights. It is not to protect any right peculiar to a tax-payer, but to protect a right that belongs to the city; and if it is a right for the corporation to select a depositary for the public funds of the corporation, and it has taken legal steps to select such depositary and made a contract therefor, and that contract is not complied with by any party who is liable to be so controlled, in such case the solicitor, in the name of the corporation, may bring such legal proceedings as are necessary for the specific performance of the contract. In other words, in any ease where any officer or board fails to perform any duty expressly enjoined by law or ordinance, the solicitor shall apply to a court of competent jurisdiction for a writ of mandamus to compel the performance of such duty. Section 1777, Revised Statutes; Johnson v. Farley, Mayor, 8 Nisi Prius, 498.

The subject matter of this action and what is sought thereby is to require the treasurer of the city of Lancaster to perform a duty required by an ordinance duly passed by the city council under Section 135 of the Municipal Code, and the purpose of Section 1777, Revised Statutes, is to provide means to secure to the municipal corporation its rights under said ordinance. We think this construction is consonant with the principles recognized in Elyria Gas Company v. City, 57 O. S., 374, 383; The State v. Voyce, 43 O. S., 52; Knorr v. Miller, 5 Cir. Ct. (Ohio), 614; Gas Light Company v. Zanesville, 47 O. S., 50.

Our conclusion, therefore, is that this proceeding is properly commenced by the city solicitor in the name and on behalf of the corporation, and it was not necessary for the council of the corporation to expressly authorize the proceeding by ordinance or otherwise.

2. It is contended by the relator that the defendant should not maintain this proceeding as the city or municipal corporation would have an adequate remedy at law upon the bond of the treasurer; that his refusing to obey the direction of the city council to deposit these funds in a depositary selected by such council is not ground for mandamus, and that a suit for damages would afford an adequate remedy; and that the plaintiff, therefore, is not entitled to the writ of mandamus for the reason that there is a plain and adequate remedy for the grievance complained of in the ordinary course of the law.

An action upon the treasurer’s bond or the impeachment or removal of the officer may not, and in fact are not always adequate remedies for failure to discharge an official duty; and it would not be, in our judgment, in this ease, for the reason that if the council have a right to select the place of deposit of the public funds and to make a contract for the same at competitive bidding and thereby secure not only an income from the funds but additional security for their safe keeping, these advantages could not be secured in a suit for damages upon the treasurer’s bond or by proceedings in impeachment of the officer. We think the principle is recognized in The State v. Staley, 38 O. S., 259, 264; The State v. Hoglan, 64 O. S., 532; Elyria v. Railroad Co., 9 Nisi Prius, 609; 12 Dec., 609.

It is quite manifest from the pleadings and contention of counsel in this case that the refusal of the treasurer to turn the funds into the depositary selected by the city council was by reason of the different construction placed upon Section 135 of the Municipal Code, about which there may be an honest difference of opinion. In such case this would not be such evidence of ineompeteney or misconduct in the officer as to warrant his removal on these grounds. The proper remedy in such case is a proceeding in mandamus to compel him to act in accordance with the proper construction of the statute, or show cause why he does not. State, ex rel Attorney-General, v. Hoglam, 64 O. S., 532.

3. As to the constitutionality of Section 135 of the Municipal Code it is contended by counsel that this section is unconstitutional because it is in violation of Section 6, Article VIII of the Constitution of the state of Ohio, which reads as follows:

“The General Assembly shall never authorize any county, city, town or township, by vote of its citizens, or otherwise, to become a stockholder in any joint stock company, corporation or association whatever; or to raise money for, or loan its credit to, or in aid of any such company, corporation or association.”

An examination of this statute in question discloses that it does not provide for raising money or loaning credit to or in aid of any bank or other depositary named or contemplated in the statute. The city or corporation does not lend its credit to the bank or become liable for any of the bank’s obligations.

“A general deposit by a county treasurer, of county funds, subject to cheek, is not a ‘loan,’ within the statutory or constitutional inhibition against the loaning of county funds with or without interest.” Alibone, Treas., v. Ames et al (Supreme Court of South Dakota), 68 North West. Rep., 165.

In First National Bank of Stillwater v. Myron Shepard, 22 Min., 196, the Supreme Court of Minnesota held:

“That part of the act of March 10, 1873, entitled ‘An act to amend General Statutes, Ch. 8, Sec. 131, relating to the duties of county treasurers and the care of the public funds,’ which provides for a deposit in banks by the county treasurer of the funds in the county treasury, is constitutional and valid and applies to all the funds in such treasuries.”

It may aid in the construction of Section 135 of the Municipal Code, that many other states with constitutional provisions similar to Section 6, Article VIII, have adopted and sustained depositary laws for the depositing of public funds. Among them are Kansas, Michigan, Nebraska, Georgia, Iowa, Minnesota, Wisconsin, Colorado, South Dakota, New York and Pennsylvania. These enactments by so many of the states favor the wisdom or policy of such statutes. They are adopted to provide for the safe keeping and disbursement of the public money of municipal bodies and at the same time to enable such bodies to receive a reasonable compensation for the funds when not demanded for public use. They are not against public policy or in violation of constitutional provisions, such as we have in Section 6, Article VIII of our Constitution. No other reason is urged against its constitutionality, excepting as being in violation of Section 6, Article VIII, and we are of the opinion that that section does not contemplate or inhibit the enactment of a statute having the object and purpose contemplated by Section 135 of the Municipal Code.

4. Is this depositary ordinance valid and lawful? It is assailed on two grounds: First, that the ordinance had a blank space left in it for the figures fixing the -minimum amount of the bond to be given by the depositary, and that this blank was not filled in until after the ordinance was passed. Second, that the meeting of council at which the bond of the depositary was approved was a special meeting, notice of which was not given to all the members of the council. The first objection is not sustained by the facts and it will not be necessary to consume time in its further consideration. The second objection is one of a more serious nature and will require more extended review.

The meeting of the city council of August 10, 1903, at which the first depositary bond was approved, was a special meeting. Six of the seven members of council were present and unanimously approved the bond. One member was absent. The contention is that the action of the council at the special meeting is void because one member was not notified and failed to attend. It is conceded that there is no statute now in force relating specifically to the time, place or number of council meetings. Section 1677 of the Revised Statutes which formerly provided for special meetings was repealed by the act of October 22, 1902 (96 Ohio Laws, pages 96, 97). This question then is to be determined upon general principles and from the decision of courts touching the action of such bodies, as a municipal council at special or called meetings. Section 119 of the Municipal Code provides that “a majority of all the members elected shall be a quorum to do business.” Section 121 provides, that “council shall determine its own rules,” and Section 122 provides, that “no ordinance shall be passed by council without the concurrence of a majority of all members elected thereto.” Since the repeal of Section 1677, Revised Statutes, the Legislature has not specifically fixed the time nor the place for the meetings of the council. Nor do the statutes make any provision for notice to members either of regular or special meetings. A special meeting in question in this case was held at the council chamber; six members and all the officers were present; the meeting was organized in form as a council, and the proceedings were entered by the clerk upon the minute book and there attested by the signature of the clerk and president of the body. The only business transacted at the meeting was the adoption of a resolution approving the bond which was in conformity with the ordinance and former resolution of the council made in regular session. At the next regular meeting of the city council the minutes of the special meetng were read and approved. No charge of fraud or bad faith or concealment is made. The only question is whether the whole meeting was and is absolutely void.

It appears from the facts submitted to the court that the absent member of council at the time of the special meeting, was absent from the city, and no notice was served upon him. From these facts, what is the rule of law? In the case of Cupp v. Commissioners, 19 O. S., 173, 180, the Supreme Court held that two of the three of the board of county commissioners may hold a special meeting as such board and transact official business, because by the statute the two are a quorum and therefore competent to organize as the board. No mention is made of notice to the absent member. In the case of The State, ex rel, etc., v. Trustees, etc., 20 O. S., 288, 293, the Supreme Court held that “special meetings of boards of township trustees may be held at any time and place within the township, and without previous notice to all the trustees; and that under the statute a majority of the board of township trustees constitute a quorum to do business at special meetings.” In the case of The State v. Herbert Atherton et al (unreported), this court, in Licking-county, held that the action of the board of health at a special meeting was valid, although two of the members were absent and one of them had received no notice of the meeting. In support of the conclusions in that ease the following authorities were cited: The State, ex rel, etc., v. Trustees, etc., supra; Place v. Taylor et al, 22 O. S., 317; Merchant v. North et al, 10 O. S., 252, 257; Bank v. Flour Company, 41 O. S., 552, 558.

These decisions seem to the court as controlling in this case as to the legality of the special meeting at which the bond of the depositary was approved, and of which complaint is made in this proceeding. We therefore hold that the objection urged against the proceedings of council at its special meeting are not valid.

5. It is contended by defendant, that under Sections 135 and 136 of the Municipal Code, he, as treasurer, is vested with a discretion as to the deposit of the public funds in his hands, and therefore can not be compelled by proceedings in mandamus to exercise this discretion. Section 135, among other things, provides that:

“The treasurer, upon giving bond as required by council, may; by and with the consent of his bondsmen, deposit all funds and public moneys of which he has charge in such bank or banks, situated within the city, which may seem best for the protection of said funds, which said deposit shall be subject at all times to the warrants and orders of the treasurer required by law to be drawn, and all profits arising from said deposit or deposits shall inure to the benefit of said funds; provided, that such deposit shall in no wise release the treasurer from liability for any loss which may occur thereby.”

Where statutes are couched in words of permission, or declare that it shall be lawful to do certain things, or provide that they may be done, their literal signification is that the persons, official or otherwise, to whom they are addressed are at liberty or have the option to do those things or refrain at their election (Sutherland on Stat. Con., Sec. 460). This rule is peculiarly applicable to the treasurer of a municipality as to depositing the public funds, under Section 135, for the reason he can not act without first obtaining the consent of his bondsmen. If they refuse the purposes of the law would be thwarted and rendered nugatory. Hence the wisdom of conferring authority on the council to provide for a depositary at competitive bidding.

Section 135 permissively makes provision for the treasurer of a city or municipality to deposit, with consent of his bondsmen, all funds and public moneys of which he has charge in such bank or banks, situated within the city, which may seem best for the protection of said funds. It does not require him, only inferentially, to deposit it at a profit, but if a profit is received it shall inure to the benefit of the fund. This evinces the legislative intent to secure a profit by providing for the council of a city or municipality by ordinance to select a depositary for the public funds at competitive bidding. If the treasurer does not see proper to exercise such discretion, or make an election to so deposit the funds, it would seem that he could not be compelled to do so. The purpose or legislative intent in providing for a depositary may be presumed to be two-fold: (1) security for the public funds of a city or municipality; (2) to secure revenue for their funds while awaiting distribution. These purposes, so far as receiving revenue is concerned, may be defeated by the treasurer depositing the funds in a bank without any benefit or profit to arise from the deposit. The treasurer is not imperatively required to deposit the fund at all, and if deposited, it is not required of him to be at a profit; it is only when a profit is received it shall inure to the benefit of the funds.

In the same section (135) it is provided, that the “council shall have authority to provide by ordinance for the deposit of all public moneys coming into the hands of the treasurer in such bank or banks situated within the city which may offer, at competitive bidding, the highest rate of interest, and give good and sufficient bond of some approved guaranty company, in a sum at least double the amount to be deposited, and to determine in’ such ordinance the method by which such bids shall be' received, the authority which shall receive them, the time for the contracts for which deposits of public moneys may be made, and all details for carrying into effect the authority here given: provided, that all such proceedings in connection with such competitive bidding and deposit of such moneys sh R be conducted in such manner as to insure full publicity, and shall be open at all times to the inspection of citizens,” etc. The discretion thus given council, if it be a discretion, can not consistently with the rules of law be resolved in the negative, but is imperative: and mandamus would lie to compel action by the council. Sutherland on Stat. Con., Section 462, page 597, and auhorities cited in note 1.

The rule is, that where power is given to public officers, as is given the council in Section 135, or in equivalent language, whenever the public interest calls for its exercise, the duty to so exercise the power is peremptory. In all such eases the intent of the Legislature, which is the test, is not to devolve a mere discretion, but to impose a positive and absolute duty (Supervisors v. United States, 4 Wall., 446, 447). A public duty, plain and specific, and positively required by law, is ministerial in its nature, and not calling for the use of discretion will be enforced by mandamus in the absence of other means of relief. The State, ex rel, v. Moore, 42 O. S., 103; Commissioners v. Hunt, 33 O. S., 169.

Section 135 provides that council shall have authority to provide by ordinance for the deposit of all public moneys coming into the hands of the treasurer in such bank or banks, etc. The council of the city of Lancaster has acted under this authority, and have passed such ordinance and have notified the treasurer of their selection of a bank. He refused and still refuses to comply therewith. It does not appear from any pleading in the case that the treasurer has made any selection of a depositary for the funds in his hands as treasurer. So the question as to his being prior in time, and therefore superior in right, does not arise in this case. But suppose he had exercised the right given in this section is his right paramount or equal to the rights of the council to select a depositary by ordinance? Public policy would favor the claim of the council for this if no stronger reason. The council are to make their selection at competitive bidding and the law favors, everything else being equal, public sales to private sales.

It may be urged that Section 135 provides first, for the treasurer making the selection of a bank or depositary for the public funds, and should he do so and make a contract with the bank so selected, then to permit the council as the legislative body of the city to pass an ordinance impairing the contract so made by the treasurer would be a violation of a constitutional right. This contention is not sound for this reason: The contract would necessarily embrace within its terms the statute, and the right of council to pass an ordinance selecting a depositary at competitive bidding, which is paramount to the treasurer’s right to do so, and if he does make such contract it must be and remain subject to be annulled by the action of council in the exercise of its superior rights under the law.

It is urged that the proviso which provides, “that as to any deposits made under authority of an ordinance of council pursuant hereto, neither the treasurer nor his bondsmen, if the treasurer has exercised due care, shall be liable for any loss occasioned thereby,” destroys the act as being unreasonable in holding the treasurer responsible for losses when his discretion to select a place of deposit is taken from him. This contention is to be tested by the meaning to be given to the phrase or words, “if the treasurer has exercised due care.” What does the clause mean?

If the treasurer deposits the public funds according to the ordinance of council, and they are lost, he is not to be held liable unless his carelessness has contributed thereto; the carelessness contemplated is not related to the propriety of the ordinance or the character of the bank selected, or its bond, but the manner of dealing with the deposits after they are so made. If the treasurer should by carelessness give an order on the bank to the wrong person or for the wrong amount and the order is paid, in such case he is to be held responsible. Certainly this is only a reasonable provision and does not militate against the wisdom of the Legislature in drawing this additional safeguard around the public funds of a municipality.

6. It is urged that the provisions of Section 135 can not apply to the school funds.

The depositary act says (Section 135) “Council shall have authority to provide by ordinance for the deposit of all public moneys coming into the hands of the treasurer,” etc.

Section 136, Municipal Code, provides, that “the treasurer shall receive and disburse all funds of the city including the school funds, and such other funds as arise in or belong to any department or part of the city government.”

Without further discussion we are of opinion that the school funds are subject to the same control as other public funds in the hands of the treasurer.

7. Are the bank’s bonds sufficient?

It appears, and the court find, that when the ordinance was passed the treasurer had less than $50,000 of public funds in his hands, including school funds. The first bond was fixed at $100,000. The treasurer refused to comply with the ordinance, and on August 29,1903, the city solicitor commenced this proceeding. He filed the petition on that day. The treasurer on that day had less than $50,000 in his hands. On September 1, 1903, this court held its term in Fairfield county, commencing on that day. The parties appeared in open court and agreed that the trial of this case should be had October 21, 1903. The defendant was present in person and by counsel consented to said arrangement. On September 1, 1903, the treasurer received a payment of money from the county treasurer increasing the fund in his hands to $63,000. On the 15th day of October, 1903, he filed his answer in this proceeding wherein it was alleged that he had this amount of money in his hands. Thereupon the depositary bank filed with the city council a second and additional depositary bond in the sum of $100,000, making the amount of the bonds more than double the amount of funds in the treasurer’s hands. This last bond was approved by council at a special meeting, all members being present.

The court find as a fact that when the first bond was given and when the treasurer first refused to obey the ordinance up to the day the petition was filed and the defendant appeared in open court, as above found, the bond was in double the amount of public funds then in his hands, and after the fund was increased as before found the second bond was given in the sum of $100,000, making the bonds taken together more than double the amount of all the funds in the hands of the treasurer up to the time of this hearing. This raises the question whether by the giving of the second bond the provisions or the spirit of the law is complied with. If the act is constitutional and legal, and we hold that it is, there must be some reasonable and just method of carrying it into execution, and if the bond at any time becomes insufficient in amount, a reasonable opportunity should be given 'to increase the bond, and we, therefore, hold that it was lawful and proper to give the second bond in this case.

The answer sets forth the fact that $75,000, the proceeds of bonds, is about to come into his, the treasurer’s, hands. The council should require an additional bond to cover this sum as all other sums in his hands, but it is only reasonable to assume that the required security will be given and required as changed conditions may arise. The council can not in advance determine what the fluctuating conditions arising from the sale of bonds that may be required as improvements or indebtedness are created by the city through its council, and therefore the statute, Section 135, gives authority to the council to arrange by ordinance all details for carrying into effect the authorities given the council by this section. But we think this question is really to be tested as to the situation at the commencement of these proceedings. The mandamus proceedings are legally commenced when the petition is filed, and not when the alternative writ is issued or served, for such a writ is not indispensable. The court takes jurisdiction and may issue the peremptory writ upon the petition alone, without the alternative writ or notice to the defendant (Sections 6743 and 6745, Revised Statutes). The rights of these parties must be determined as they existed at the time of the bringing of the suit and not at this date (Tucker v. City of Newark, 19 Cir. Ct., 1). The petition in this proceeding being filed August 29, 1903, and proceedings thus begun, the depositary bond then given was sufficient and the defendant was in default in refusing to obey the ordinance and notice upon him to deposit the funds in the bank, namely, the Blocking Valley National Bank of Lancaster, Ohio.

We, therefore, hold that the relator is entitled to the peremptory writ prayed for in his petition, and it is accordingly ordered. The conclusions of the court necessarily imply the overruling of defendant’s motion to strike out portions of the reply, and to save the question of the defendant, we here expressly overrule said motion, exceptions to be noted. Thereupon the defendant filed his motion for a new trial which was overruled. Exceptions. Ten days allowed for finding of fact and statutory time for bill of exceptions.

Augustus W. Mithoff, City Solicitor, and C. W. McCleery and Geo. E. Martin, for plaintiff.

James W. Miller, C. D. Martin and M. A. Daugherty, for defendant.


source: Caselaw Access Project

license: Public Domain

text:
    ABUTTING OWNERS RIGHTS IN STREET.
    [Circuit Court of Cuyahoga County.]
    Cleveland Burial Case Co. v. Erie Railway Co.
    Decided, June 21, 1902.

      Street — Easement of Abutting Owner Therein a Property Right — Impairment of by Railroad Track May be Enjoined — Proximity of Track an Interference, When — Injunction.
    1. The granting of an ordinance by a municipality permitting a railway company to lay a track along the street, does not empower the company to construct the track in such a way as to materially interfere with the easement of an abutting owner, without first obtaining the right so to do by appropriation or otherwise.
    2. The laying of a track in the street within twenty-six feet of the entrance to a factory, where wagons are loaded and unloaded, constitutes such a_ material interference with the rights of the owner of the factory, and an injunction will lie upon his petition.
    Marvin, J.; Caldwell, J., and Hale, J., concur.
    Heard on appeal.
   The. plaintiff, a corporation, is the owner of a parcel of land in the city of Cleveland, bounded on the northerly side by Old River street, .on the easterly side by Elm street, on the southerly side by---, and on the westerly side by West Center street. On this tract of land the plaintiff has a manufacturing establishment covering a considerable part of the tract, with a front of about 140 feet on Center street, and about 200 feet on Old River street; the lines of the manufactory on each of these streets being coincident with the street, so that the northwest comer of the building is at the intersection of the south line of Old River street and the east line of Center street. These premises are in a district largely occupied by manufacturing establishments.

The defendant, which is a railroad corporation, has a number of railroad tracks in the immediate vicinity, and other railroads have tracks not far removed, but on the opposite side of the old river bed from the premises of the plaintiff. One of the tracks of the defendant crosses Old River street in a westerly direction from the northwest corner of the plaintiff’s manufactory, its nearest point to the manufactory being at a distance of sixty-seven feet therefrom. This track curves to the eastward when it reaches the north line of Old River street and thence extends eastwardly along the north side of said last-named street in front of the plaintiff’s manufactory.

The defendant has, by an ordinance of the city, obtained a franchise to construct an additional track diagonally across the corner of Old River and Center streets, the point where it crosses the south line of Old River street being about thirty feet from the intersection of the west line of Center street with the south line of Old River street; thence extending northeasterly, crossing the north line of Old River street ten or fifteen feet easterly from the east line of Center street produced. This track will bring the rail, which is on the northeasterly side of the track, twenty-six feet from the northwesterly comer of the plaintiff’s manufactory.

The defendant proposes to construct its track as authorized by such ordinance, and will do so unless restrained by the order of the court. The court of common pleas allowed an order restraining such construction until the ease should be heard in that court upon its merits. Subsequently, upon motion of the defendant, this order was dissolved, and from such order the appeal is taken to this court.

Each of these streets is sixty-six feet in width. The title to the tract of land owned by the plaintiff is derived through several warranty deeds executed by different parties and conveying the several lots, of which- the tract is composed, by lot numbers. These lot numbers are obtained from a survey and plat of lots made by the Buffalo Company and recorded in the records of Cuyahoga county. On this plat the several streets are designated. On'the part of the plaintiff it is claimed that it is the owner of the fee to the center of the streets by which its manufacturing plant is bounded; while, on the part of the defendant, it is said that the fee of the streets is in the public authorities in trust for use for street purposes. In the view we take of this case, it is not necessary that this question be now determined.

The plaintiff, in ^ny event, has an easement in the streets upon which its premises abut, and this easement is said, in the case of Cincinnati & S. G. A. St. Ry. Co. v. Cumminsville, 14 Ohio St., 523, 524, to be "as much property as the lot itself.” Numerous authorities by our own Supreme Court are to the same effect; and it is settled beyond controversy that, in a case like this, if the proposed construction of the track by the defendant will materially interfere with this easement, an injunction will be allowed to prevent such construction until the rights of the plaintiff have been obtained by proper appropriation, purchase, or other proceedings whereby its property interest in this easement is to be acquired by the defendant.

The only question remaining is, whether, if this track is construeted as proposed, the rights of the plaintiff, by reason of this easement, will be materially or appreciably interfered with. This is purely a question of fact. From the evidence, including a plat of. the premises showing the location of the building and the line of the proposed construction, we ' find that the plaintiff’s rights will be thus interfered with. Without entering into any lengthy discussion of how the plaintiff’s rights will be interfered with, attention is called to the fact that the convenience of loading and unloading teams at the Center street entrance must necessarily be impaired. The evidence shows that these streets are used very considerably by the public for teams, and the construction and operation of a railroad within twenty-six feet of the corner of this building must certainly make it much less convenient to drive teams from one of these streets to the other around the corner.

Williamson & Cushing, for plaintiff.

Mr. Shellenbarger and Judge Lamson, for defendant.

In the case of Callen v. Electric Light Co., 66 Ohio St., 166, it is held that:

“The placing by a private lighting company of poles at the curb in a street and the stringing thereon of electric light cable lines and wires for the purpose of furnishing light and energy to private takers, is a diversion of the street from the purposes to which it was dedicated, and is a taking of the property of the abutting owner, within the meaning of Section 19, Article I, of the Bill of Rights. And such placing of poles, lines and wires is none the less an unauthorized taking, even though it be consented to by the city authorities.”

In that case an injunction was allowed. We think the plaintiff’s right to an injunction in the case now being considered is stronger than that stated in the syllabus just quoted.

In the case of Valley Ry. Co. v. Pouchot, 4 C. C., 187, an opinion delivered by Judge Upson, then of this court, considers very fully the most of the questions df law involved in this case. That ease was affirmed by the Supreme Court upon such opinion of Judge Upson. It is deemed unnecessary to here repeat the reasoning there used and the authorities there cited.

The motion to dissolve the restraining order, which is pending here on appeal, is overruled.


text:
    ACTIONS FOR RECOVERY OF LAND.
    [Circuit Court of Marion County.]
    John T. Monnett v. The Columbus, Sandusky & Hocking Railroad Company and Joseph Robinson, as Receiver of said Railroad Company.
    Decided, January Term, 1904.

      Jurisdiction — Question as to, Must be Determined, Though Not Insisted On — Federal Questions — Signature to Paper Obtained by Subterfuge — Relief from a Contract Plaintiff did not Read Before Signing —Condition—Covenant—Ancillary Relief.

    1. Where there is an issue as to the jurisdiction of the subject matter of the action, a defendant does not lose or impair his right to insist that a case is lawfully in the federal court, by making a defense in the common pleas or by appealing to the circuit court, and ■ the question of jurisdiction is for determination whether insisted on by the defendant or not.
    2. Prayer for the cancellation of certain writings, alleged to have been fraudulently obtained by the receiver of a railroad company appointed by a federal court, evidential in their nature and material to the issue in hand, does not raise a federal question.
    3. Nor does a claim against a railroad company of title to property held by its receiver raise a federal question; and the controversy would not be separable as to the defendant receiver, even should it be assumed that a federal question was involved.
    4. The plaintiff’s contention as to the obtaining of an alleged release of claim by subterfuge will be held to be established, where the facts and circumstances are as in this case.
    4. The plaintiff’s contention as to the obtaining of an alleged release of claim by subterfuge will be held to be established, where the facts and circumstances are as in this case.
    5. Courts will not refuse to listen to one asking relief from a contract which he failed to read, hut on the contrary will grant relief where fraud is charged and shown in the matter of reading the contract to him or in stating its nature of terms.
    6. In the case at bar the writing termed a release is declared null and void as relief ancillary to any proper action at law which plaintiff may see fit to commence.
    Mooney, J.; Norris, J., and Day, J., concur.
   This action is here on appeal from tbe court of common pleas. The petition states that the railroad company, defendant, is a corporation duly incorporated under the laws of this state and the defendant Robinson is the duly appointed and acting receiver of said company under appointment of the United States District Court of the Southern District of Ohio, and is under said appointment in the possession and control of all the property of every kind of said railroad company, including the real estate in said petition described; that on April 28, 1893, plaintiff, without, consideration, by his deed of general warranty of that date conditionally conveyed to the Sandusky & Columbus Short Line Railway Co., an Ohio corporation, its successors and assigns, five and ninety-three one-hundredths acres of land situate in the township of Grand Prairie in this county and specifically described in the petition; that said deed had incorporated in it this language: “This conveyance is made conditioned upon said The Sandusky & Columbus Short Line Railway Co. locating a station, constructing a station house, telegraph office, stock yards, sidings and necessary improvements upon the first described real estate, and maintaining station and said constructions thereon, and causing all regular trains operated upon said railway to be stopped at said station a reasonable length of time while said railway shall be operated by said The Sandusky & Columbus Short Line Railway Co., its successors and assigns, except through passenger and freight trains;” that said deed was duly recorded and said grantee thereupon entered upon said premises and occupied the same under said deed until the same was sold and conveyed in legal proceedings had in an action pending in the Court of Common Pleas of Crawford County, Ohio, to a committee of the bondholders of said railway company and said committee afterwards sold and conveyed the same to defendant railroad company, which company and its receiver, defendant herein, have succeeded to the right and title of the grantee in the first mentioned deed; that the condition of said deed has never been performed; that defendant railroad company is insolvent; that the receiver has no title to nor interest in said land under his appointment, except as receiver; that defendants claim to have been released from all the conditions of said deed by a certain writing or writings now in their possession, but of which they refuse to furnish plaintiff with a copy.

Plaintiff says that about 1897 “defendant railroad company or one of its many receivers recognizing their liability and duty to perform the conditions in said conveyance from plaintiff tendered plaintiff a pass on their said railroad as a temporary solace for their delay in carrying out the said conditions, and when said pass was delivered the agent who handed same to plaintiff requested him to sign a document which he said the red tape of the company required, but which was actually an acknowledgement of his receipt of the pass; that plaintiff informed said agent that he did not have his spectacles with him, without which he was unable to read said document, but said agent assured plaintiff that such was the only effect of the document and that he could rely upon the statements of the agent as to its contents being as herein stated, and not otherwise. That thereupon he executed said paper, relying upon the statements of said agent, and if the same contained anything other than a receipt for the said pass, it is a gross fraud upon plaintiff’s rights, was obtained from him by false representation and false pretenses, and ought to be canceled, and declared void and of no effect.” The prayer of the petition is that all releases or pretended releases in the possession of defendants be found to be fraudulent and be canceled; that all rights of defendant under said deed of conveyance from plaintiff be declared forfeited and said deed be canceled; that defendants be adjudged to convey the legal title to said lands to plaintiff and in default thereof that a decree to be entered operate as said conveyance to plaintiff, and that defendants be enjoined from asserting any title to said premises and for all proper relief.

In due time “the defendants, Joseph Robinson, as receiver of The Columbus, Sandusky & Hocking Railroad Company, and The Columbus, Sandusky & Hocking Railroad Company, by Joseph Robinson, receiver thereof,” filed a petition for removal to the Circuit Court of the United States for the Northern District of Ohio, Western Division, and duly filed a proper and sufficient bond for such removal. The petition for removal states that in an action pending both in the Circuit Courts of the United States for the Northern and Southern Districts of Ohio, one Samuel M. Felton was duly appointed as receiver of all the property of the railroad company, defendant, and duly qualified; that Monnett, the plaintiff here, in consideration of an annual pass received from Felton, receiver, released him and said railroad company from the performance of the condition of said deed of conveyance and that said release is attacked by plaintiff in this action; that after said release was executed Felton resigned as said receiver and defendant Robinson was duly appointed in his stead by both said courts and that the question in dispute, exclusive of interest and costs, the sum of value of $2,000, and the suit is one arising under the Constitution and laws of the United States.

This petition for removal was dismissed by the court of common pleas. Defendants then moved to dismiss the action upon the ground that the same was commenced without leave first obtained from the courts appointing said receivers or either of them. In support of this motion defendant, Robinson, filed his affidavit stating that “he is in possession of the property described in the petition herein which the plaintiff seeks to recover solely by virtue of said appointment (as receiver), and that he has no relation to or connection with said property otherwise than as such receiver.”

This motion was overruled and defendant Robinson, as receiver, filed his answer containing the statement of four defenses: (1). That the court had no jurisdiction- for the reason stated in his motion to dismiss as heretofore recited. (2). Denies that -defendant railroad company holds said real estate subject to any condition; that it assumed any liability on account of said condition of the original grantee, or that any rights of defendant railroad company under plaintiff’s deed have become or are forfeited; states that the original grantee established a station and constructed stock yards and necessary sidings on said premises and plaintiff never demanded any further compliance with or performance of said condition until after said railroad property, including said premises, was sold by said grantee. (3). That in consideration of an annual pass, plaintiff, on September 21, 1897, released said condition to Felton, receiver. (4). That on May 16, 1895, and again on May 16, 1895, plaintiff sold, assigned and transferred to one David Rexroth all his rights under or by virtue of said condition.

Plaintiff by reply denies all the averments of the answer, and further says that defendants repudiated said pass and deprived plaintiff of the benefits thereof.

The case was heard and submitted upon the pleadings and the evidence. Defendants did not urge here any claim based upon the petition to remove or the motion to dismiss the action. However, they did not lose or impair their right to insist that the case has been lawfully removed into the federal court by making defense in the common pleas, nor by appealing to this court (Powers v. Chesapeake, etc., R. Co., 169 U. S., 103). The question is one of jurisdiction of the subject of the action, and is here for determination, whether insisted upon by defendants or not.

Plaintiff’s petition, construed in the light of its prayer, asserts two claims of relief against defendant: (1). The cancellation of certain writings evidential in their nature and material to the ultimate right claimed in the case, which writings are alleged to have been fraudulently obtained from plaintiff by Felton, receiver. (2). To quiet plaintiff’s title or to declare a forfeiture in his favor to certain re'alty, color of title to which is vested in the defendant railroad company and the legal custody of which without any other title or interest therein is held by the receiver defendant.

The first claim involves no federal question (Gabelman v. Peoria, etc., R. Co., 179 U. S., 339). The second claim involved the title to the property- That title was in the railroad company if not forfeited, and in the plaintiff here if it was forfeited. In no point of view was it in the receiver. The appointment of the receiver did not dissolve the corporation. It might be sued afterward as well as before; and while no decree or judgment rendered against the railroad company could operate to disturb the custody of the receiver or his management of the railroad property, the decree or judgment otherwise and between the parties to the action would be valid and binding. The order of sale in the foreclosure suit in the federal court could not impair this validity. The title of the railroad company to this realty was of record, the mortgagees acquired their interest with notice, the title of the mortgagees was no greater than the railroad company, and the' order of sale so far as the pleadings now show was likewise limited. The action then so far as the second claim is concerned and against the railroad company defendant involved no federal question, and the controversy does not appear to be separable as to the defendant receiver, even though it be assumed that the federal question was involved as to him. The court of common pleas in the first instance had, and this court on appeal now has, jurisdiction of the action, and the petition to remove is denied and the motion to dismiss the action is overruled.

At the trial the evidence was conflicting only as to the circumstances under which the writing of date, September 21, 1897, purporting to be a release and satisfaction by plaintiff of the clause in the deed in question, was signed by plaintiff. Plaintiff gave evidence tending to show that on the occasions prior to the transaction in question the railroad company or its receiver has given him a pass over the line and each time took receipt for it; that these passes were given to compensate plaintiff for the railway company’s delay in complying with the requirements of the deed; that on September 21, 1897, Mr. McCune, an agent of the receiver, came to him, tendered him a mileage book, remarking that as part of the receiver’s red tape he would ask plaintiff to sign a receipt for it; that plaintiff thereupon stated that he could not read the document without his spectacles, and he requested Mr. Weber, in whose restaurant or saloon the transaction took place, to procure spectacles for him, and Weber, after investigation, said he could not; that upon McCune’s assurance that the receipt was all right, he signed the writing without reading or being able to read it; that in signing he believed it to be a receipt merely, and that he had never in fact agreed to release said railroad company from any claim he had on account of said deed.

Defendant’s evidence tended to show that the release was handed to plaintiff at the time without any statement as to its character; that plaintiff looked it over and appeared to be reading it, and after such examination he signed it, without any statement as to spectacles or any request to be supplied with the same; that it was not a mileage book, but a pass that was handed to him, at the time. Defendants do not deny that other passes had been given to plaintiff before that time, and that more receipts were given by the plaintiff for them, and Mr. McCune says that he had no conversation with plaintiff as to an agreement to release either before or at the time 6f this transaction, and it is not shown by defendants that any such agreement to release was ever made by plaintiff with any other person representing either the railroad company or the receiver, unless signing the purported release here in question amounted to such agreement. There is a sharp conflict in the evidence as to the part of the room at which the signature was written, but none that the time was late in the afternoon..

From the issue of former passes, taking receipts for the same, the limited duration that the pass issued September 21, 1897, had to run, and its comparatively insignificant value, the absence of any prior agreement to release and the absence of any discussion or conversation relating to a release at the time, from the tenor of plaintiff’s letter to McCune, of date February 18, 1900, from which it appears that then for the first time plaintiff was informed that a release was claimed, and from the apparently conceded fact that plaintiff at all times, from September 21, 1897, asserted a claim against the company under the provisions of said deed, we are convinced that plaintiff’s contention as to the facts is the very truth of the case. We so find and hold.

We are of opinion that plaintiff’s failure to read the document which he signed will prove no obstacle to the relief which he seeks by way of cancellation and reformation. It is true that courts turn a deaf ear to a man who seeks to get l'id of a contract solely on the ground that its terms are not what he supposed them to be. But courts will not refuse to listen; on the contrary, they will give relief, when a plaintiff charges fraud upon the defendant in reading the contract to him or in stating its nature and terms (Foster v. Mackmannon, L. R., C. P., 704; Albany Inst. for Savings v. Burdick, 87 N. Y., 40, reviewing N. Y. cases; Hawkins v. Hawkins, 50 Cal., 558; Schuylkill v. Copley, 67 Pa. St., 386; Lunnington v. Strong, 111 Ill., 152; Moon v. Brown, 49 Iowa, 130; Martindale v. Harris, 26 O. S., 379). This would obviously be true of eases in which the complaining party could not read (Kenney v. Ensminger, 87 Ala., 340), or could read only with difficulty (Keller v. Equitable Ins. Co., 28 Ind., 170). The presentation of this release for signature without previous discussion or agreement as to its terms, taken in connection with the previous pass transactions and in the other circumstances of the cases amounted to a fraud upon plaintiff.

It is contended by defendants that plaintiff has transferred all his rights under the provisions of the deed in question to one Rexroth before the commencement of this action, and that plaintiff can not maintain this action. The evidence shows that at the date of the deed by plaintiff to the railroad company, plaintiff was seized in fee of some 800 acres of land in a body situated near and perhaps surrounding the proposed site of the railroad station. A part of this land he contracted to convey to Rexroth. This contract, dated May 16, 1895, among other things, provides that Rexroth, upon complying with the terms of sale, "shall have the benefit of the contract with the railway company so far as the same can be legally transferred to him.” On August 30, 1895, the deed of conveyance from plaintiff to Rexroth being executed but not delivered, because the consideration was-not fully paid, the parties entered into a further contract as to the subject-matter of the conveyance and the use of the premises until the full payment was made by Rexroth. This contract of August 30, 1895, provides:

"The form scales on the farm are to go with it to Rexroth and become his property on the delivery of the deed (the said scales are located on the railway lands) ; the said John T. Mon-nett hereby assigns and transfers to said David Rexroth the benefit of his contract with The Columbus & Sandusky Short Line Railway Co., as fully as the same can be legally transferred by him, all as provided in his written contract of sale of said lands. ’ ’

This contract was not acknowledged and the deed of conveyance to Rexroth, it seems, contained no reference to the Short Line deed or the provisions thereof here in question.

Plaintiff here contends that the provisions of the Short Line deed creates a condition subsequent. Defendants insist that it creates a covenant merely- We are of opinion that in any view it must be either one or the other. If now it be a condition subsequent, only the grantor and his heirs can take advantage of it. It is not legally transferable by the grantor by contract or conveyance (21 Wall., 44-63; 97 U. S., 693; 4 Kent Com., 127; Co. Lett, 214a, 12 Allen, 141). If the provision is a covenant, it binds the assigns of the original grantee by its terms and it runs with the land held by the grantor at the time of making the Short Line deed (106 N. Y., 142-154 and 155; 115 N. Y., 361-376; 25 O. S., 560). If, however, it be a covenant in this .sense it can not exist independent of the conveyance of which it forms a part nor antedate the title to benefit which it exists. If, then, the provision be & condition subsequent, the contracts with Rexroth are immaterial, because the benefit of the condition was not legally transferable, and Monnett agreed to transfer the benefit only if the same was legally possible and to the extent that it was legally possible. If the possession be a covenant, then we assume that it can not exist in gross, but runs with the land, passing, until released, as an incident upon the conveyance of the land for the benefit of which it exists and the date or transfer of the covenant being necessarily the same as the conveyance of title to the land benefitted. Until the deed of Rexroth was delivered, he could have no benefit of the covenant, if it be such, passed to him, not by force of any contract, but by virtue of the deed. Hence, in this view the contract is also immaterial.

Whether the possession is in fact a condition or a covenant is, in the absence of a clause of forfeiture or of re-entry, a very difficult question to determine. Under such circumstances the same words may be used to create a condition as to create a covenant (130 Mass., 180). The question is one of intention of the parties, to be ascertained from the entire instrument and the circumstances, and not on one of technical language used (4 Kent Com., 132). Different courts upon language identical or similar have frequently differed in conclusions reached. In view of the difficulty of the question, it is therefore a matter of relief to recognize, and therefore to hold that in the present case it is a matter of no consequence whatever whether the language be held to create a covenant or a condition subsequent.

If it is a condition, the penalty for breach would be a forfeiture of the estate. It is elementary that a court of equity will never enforce a forfeiture by its affirmative action.

“A court of equity sometimes releases against forfeitures, but it is not the forum to which to resort to enforce them.”

Justice v. Lowe, 26 O. S., 372. In this case it is urged by plaintiff that the Short Line deed should be canceled; not to enforce a forfeiture, but to quiet title of plaintiff to the lands in question or to remove a cloud from plaintiff’s title. Plaintiff is not in possession of the lands described in the Short Line deed. He claims no estate in remainder or reversion in said lands, but an entire present estate in fee simple. Equity entertains jurisdiction of an action to quiet title by plaintiff in possession, because by reason of his possession he can not proceed at law against an adverse claimant. For similar reasons our statute gives to a plaintiff out of possession, and who has or claims an estate or interest in reversion or remainder, an action to remove a cloud or quiet title against an adverse claimant? (Section 5779, Revised Statutes). But this latter provision does not extend to one out of possession who claims the entire estate or a present right of possession merely. Raymond v. Railway Company, 57 O. S., 271.

“As to whether possession by a plaintiff is necessary before he can resort to equity to remove a cloud, there appears to be some conflict of opinion, arising from loose statements of judges and an overlooking of the principles of equity in regard to exercise of its jurisdiction. Where the estate or interest to be protected is equitable, the jurisdiction should be exercised, whether plaintiff is in or out of possession, for under these circumstances legal remedies are not possible; but when the estate or interest is legal in its nature, the exercise of the jurisdiction depends upon the adequacy of legal remedies. Thus, for example, a plaintiff out of possession holding the legal title will be left to his remedy by ejectment under ordinary circumstances.” 3 Pom. Equity Jurisprudence, Section 1399, note, citing cases.

Scofield, Durfer & Scofield, for plaintiff.

J. F. McNeal & Sons and Lawrence Maxwell, for defendant.

In this case plaintiff’s asserted title to the land, if the provision in the deed be a condition, is a legal estate; to cancel the Short Line deed as a cloud would be to lend the aid of equity to enforce a forfeiture; and if the estate was forfeited, a court of law would adjudge it upon the same evidence or even less evidence than would be required in a court of equity to cancel the deed if the case as one proper for that remedy. For all these reasons the remedy at law is adequate and the deed should not be canceled.

If the provision is a covenant, the remedies in the event of failure to perform are (1) at law for damages, and (2) in a proper case, in equity for specific performance. This is not an action for damages for breaeh of the covenant, and the evidence in the case makes it very clear that the plaintiff neither insists upon nor desires a specific performance of the covenant. Hence, in case the provision be a covenant, plaintiff can not have in this court the one relief and does not desire the othér to which in the case he might be entitled.

Upon the whole case, we are of the opinion that plaintiff is entitled to have the writing of date September 21, 1897, re-' formed so as to be in form and substance a mere receipt for the pass then delivered, and to have said writing as a release declared null and void and therefore canceled. This relief is ancillary to any proper action at law which plaintiff may see fit to commence. What that action shall be or whether plaintiff has any cause of action, this court at this time does not desire to either determine or intimate. All relief prayed for by plaintiff, except the reformation and cancellation .indicated, is denied.


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    INCUMBRANCE ON INSURED PROPERTY.
    [Circuit Court of Pickaway County.]
    Lewis C. Hammel v. Insurance Co. of Pennsylvania.
    Decided, 1902.

      Fire Insurance — Condition in Policy Against Incumbrances — Failure to Attach Policy to Bill of Exceptions or to Properly Identify It— Effect of Such Failure — Condition in Policy can not be Defeated by Parole Evidence.

    1. A policy of fire insurance marked Exhibit “A” is not properly identified and can not be considered by tbe reviewing court, where it is not attached to the bill of exceptions and is referred to in the bill as Exhibit "B.”
    2. But such failure to properly identify or attach the exhibit does not require that the bill of exceptions be stricken from the files where it appears that questions are properly presented for review other than those involving the exhibit.
    8. Evidence that at the time a policy covering personal property was written the assured informed the agent that the property was incumbent is inadmissible for the'purpose of varying a provision of the policy rendering it void in ease the property is covered by chattel mortgage, unless otherwise provided by agreement indorsed thereon.
    Jones, J. (orally); Cherrington, J., and Sibley, J., concur.
    Heard on error.
   The petition in the court below was upon a policy of insurance issued by the defendant company to L. C. Hammel & Co., upon certain chattels owned by the defendant, L. C. Hammel. The petition, after setting forth the description of the chattels, avers that at the time of the issuing of the policy in the name of L. C. Hammel .& Co. there was a chattel mortgage on the goods and chattels described in the policy, but that the defendant had notice and knowledge of the fact of the existence of that chattel mortgage; it avers the loss and proof of loss and asks judgment for the plaintiff.

The third defense alleges that said policy of insurance, issued to said L. C. Hammel & Company, contained a provision that said policy, unless otherwise provided by agreement indorsed thereon, or added thereto, should be void if the subject of insurance be personal property and be or become incumbered by chattel mortgage, and the defendant then alleges that prior to and at the time of the issuing of said policy of insurance to said L. C. Hammel & Company, by this defendant, said property, goods and chattels insured by said policy of insurance were covered by a chattel mortgage in the sum of $911.50; that there was no agreement indorsed upon said policy or added thereto, consenting to or permitting the lien of said chattel mortgage upon said property so insured by this defendant. Defendant further alleges that at the time it issued said policy of insurance it had no knowledge or notice of the existence of said chattel mortgage.

To obviate the effect of that defense, the plaintiff filed a reply wherein he denies the allegation in said answer that at the time said policy of insurance was issued, said defendant had no knowledge or notice of the existence of said chattel mortgage, and he denies the allegation that the defendant has in no manner waived said condition and provision contained in said policy of insurance; and sets up the fact that the defendant company’s agent had notice of the incumbrance upon the chattel property by way of mortgage, and that he, the plaintiff, had no knowledge of any provision in said policy of the character, manner and description set forth in said third defense at the time said policy was issued and delivered to him, and that said agent did not advise or inform him of said provisions, nor that it was necessary that any endorsement should be made upon said policy or added thereto, consenting to or permitting the existence of said chattel mortgage upon said property.

The plaintiff offered his evidence, and at the conclusion of that evidence the defendant moved the court to direct a verdict in its behalf; this the court did, and the verdict was returned by the jury for the defendant. A motion for a new trial was filed; that motion was overruled and a petition in error was filed in this court.

A motion was made by the defendant in error to strike this bill of exceptions from the files. That motion will be overruled, but in so far as tbe bill of exceptions does not contain a copy of the insurance policy pleaded in this case, we will disregard the policy itself. In other words, the court holds that we are not permitted to consider the alleged copy of the policy in this case as being in evidence before this court (although it was before the court of common pleas), for this reason: the bill of exceptions refers to a policy of insurance as having been offered in evidence, but the policy is not in the bill of exceptions; it refers to a policy marked Exhibit “B,” and the alleged policy is marked Exhibit “A,” and is not in any way attached to the bill of exceptions, offering us no particular way of identifying this policy as the policy offered in evidence; so that in passing upon this case we will pass simply upon the effect of the evidence, as to whether or not it has a tendency to prove a case for the plaintiff below.

While there are a number of questions and answers objected to by the defendant below, a large number of which were properly objected to and properly excluded by the court, the main contention arises as to the action of the court in ruling upon questions and answers found in the bill, relating to the fact whether or not the defendant company, through its agent, had notice of the fact that there was an incumbrance by way of a chattel mortgage upon the property described in the policy of insurance.

It seems from the evidence that one Harry Van Hyde was the agent of the defendant company, and the agent of other insurance companies as well; that some time in 1898 (the plaintiff offered evidence to prove, which was rejected by the court), this agent was told at that time, when attempting to negotiate insurance in another company, for which he was agent, that there was an incumbrance upon this chattel property; and later, when this agent, Van Hyde, did negotiate insurance for plaintiff in the defendant company, testimony was offered to show that, at that time, the plaintiff told the agent that there was a lien by way of a chattel mortgage upon his property. All of this evidence was excluded by the court upon the theory, no doubt, that it was incompetent to introduce any evidence which would in any way tend to render nugatory the terms of the insurance policy; and, without reading the various questions and answers touching this matter, that is the bone of contention in this case, whether or not this particular evidence was competent.

We have come to the conclusion that the evidence was incompetent. The evidence, if introduced and allowed to go to the jury by the court below, would have had the effect, in our opinion, of reading into the policy a provision that was in direct opposition to that clause found in the policy. Here was a policy of insurance which provided that if there was any incumbrance of this Character upon the property, that the policy, unless otherwise provided by agreement endorsed thereon or added thereto, should be void. The effect of the evidence, if allowed to be introduced, would have been practically to read that provision out of the policy.

It is true that there are a large number of adjudicated eases wherein the agents of insurance companies are allowed to waive certain provisions, rendering the policies void, but that does not come within the purview of this case. It is not a question of the waiver of a contract which has been executed; it is a question as to the provisions of a contract that was made at that time. If it be permitted to introduce parol evidence to wipe out of the insurance policy this particular provision, it would be competent to wipe out others under the same rule. We do not think that the question of waiver affects this case, for waiver makes practically a new contract which is always permitted. We think that Smith v. Insurance Co., 19 Ohio St., 287, 290, is practicaly decisive of this case. The opinion of Judge Welch, who was always concise, is brief, and I will read a few lines of it. Judge Welch said:

“We see no error in the rulings of the court below. The charter of the company is expressly made obligatory upon all its members. It expressly declares that policies issued upon incumbered property, without a written application containing a statement of the incumbrance, shall be void. This provision admits of no construction, and no attempt is made to avoid its effect in the present case by proof of fraud or mistake. It is tbe law of tbe parties, adopted by themselves, and becomes part of their contract. By it they have declared and agreed that this form of written notice shall be essential to the validity of the policy, and that verbal notice can not be substituted for it.” •

Abernethy & Folsom, for plaintiff in error.

J. W. Mooney and G. E. Bibbie, for defendant in error.

So that we think this question has been practically decided by the Supreme Court as early as the case of Smith v. Insurance Co., supra, and for these reasons we affirm the judgment of the court below.


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    BILLS OF EXCEPTIONS.
    [Circuit Court of Lorain County.]
    Henry W. Manley v. Wheeling & Lake Erie Railway Co.
    Decided, October 12, 1902.

      Journal Entry Necessary — Making a Bill of Exceptions Part of the Record — Presumption—That the Court Below Acted in Accordance with Law.

    1. A bill of exceptions does not become-a part of tbe record and can not be considered unless it is made a part of tbe record by a journal entry; tbe only exceptions that can be saved by noting tbe exception in tbe journal entry are sucb as are made to decisions and to orders of court required to go upon tbe journal.
    2. In tbe absence of a bill of exceptions or a finding of facts, it will be assumed on review that tbe court below acted wholly witbin tbe law.
    Hale, J. (orally); Caldwell, J., and Marvin, J., concur.
    Heard on error.
   The case of Manley v. The Railroad Company, error to the court of common pleas, brings before us a record of the probate court of this county, the judgment of that court having been affirmed by the court of common pleas. It is sought in this proceeding to reverse both judgments.

The case grows out of a proceeding for the appropriation of property to the use of a corporation. Proceedings were instituted under Section 6448, Revised Statutes, which provides for proceedings to appropriate land when that corporation is in possession of the lands without any agreement with the land owner.

The proceedings were instituted by the land owner. On the trial before the probate court a bill of exceptions was taken by the plaintiff, against whom judgment was rendéred; but there is no journal entry making the bill of exceptions a part of the record, and without such journal entry it does not become a part of the record and can not be considered.

Only such errors, if any, as appear in the record, excluding the bill of exceptions, are before this court. The Supreme Court have several times said the only exceptions that can be saved by noting the exception in the journal entry are such as are made to decisions and orders of the court required to go upon the journal, and are properly entered there. There is no irregularity pointed out in the proceedings up to the time the case was called for trial in the probate court.

It appears that the defendant, the railroad company, had demanded a jury to try the ease. A venire had issued for the jury, and ten of the men named in the venire appeared in the probate court on the day of the trial, and the journal entry shows that the defendant withdrew its request for a jury, and consented that the issues raised be tried by the court. The plaintiff objected to the discharge of the jury, but did not demand that the ease should be submitted to the jury, whereupon the jury was discharged, to which the plaintiff excepted. The case then proceeded to trial before the court, and the court having heard the evidence and arguments of counsel, reserved his decision, and later rendered a judgment in favor of the defendant, the railroad company.

The only exception taken here was to the discharge of the jury. Ten men who had been selected to act as jurors only reported, and these were discharged. Now, if we concede that it was proper to place upon the journal the fact that the venire had been recalled, or that the jurors appearing had been discharged, then there is a total failure to show for what reason, acting on what facts the court discharged that jury. There might have been ample reasons for discharging the jury. We must assume, in the absence of any finding of facts and of a bill of exceptions, that the court acted wholly within the law. We can not assume that the court erred in discharging the jury in the absence of the facts upon which the court acted in making that order. The journal entry shows that the plaintiff did not demand a jury, but proceeded to trial without any protest or without any objection other than to the discharge of the jury.

A trial was had before the court, and decided against plaintiff in error, and we think he must abide by the result. He produced his evidence and tried his case to the court, without any objections to a trial in that way, and saved no exceptions to such trial. This would constitute a waiver on his part to a jury, to which he was clearly entitled.

When the bill of exceptions was stricken off, all rights that were undertaken to be saved to the plaintiff in error that had any substance in them were lost to him. There is nothing in the record outside of the bill of exceptions of any account.

The judgment of the court of common pleas is affirmed.