author: Haynes, J.

text:
    (Sixth Circuit — Lucas Co., O., Circuit Court
    Jan’y. Term, 1897.)
    Before King, Haynes and Parker, JJ.
    ALEXANDER WEBER v. FREDERICK BEIER et al.

      Homestead Exemption — ’Right of husband living with, minor children, wife having left them— '
    1. Where the husband lives with his minor children,but not with his, wifo who has left him, he is the head of a family within the meaning of our homestead laws, and entitled to the provisions of those laws without regard whether the wife has left ‘him for his aggression or not. ;
    The legislation as to homestead exemption, and the revision of the statutes relating thereto, reviewed.
   Haynes, J.

In this case Webber filed his petition in the common pleas against Frederick Beier and others, in which he set forth that he had recovered a judgment against Frederick Beier for the sum of $95.00 and that by due process cf law it had become a lien upon certain premises in the city of Toledo, which was occupied as. a homestead by said Beier. Other creditors and mortgagees were made parties; and one of these set up a mortgage under which, by ''proceedings in this case, the property itself was sold; :and, the proceeds being in court, the defendant — Beier—makes application as against the judgment of Alexander Weber (the mortgage, of course, having been executed by him) to have a homestead exemption of $500' allowed him ,out,of the moneys in the hands of the court, in lieu of his homestead. That application was heard in the court of common pleas, and was decided against him, and from thatqrder and decision he took an appeal to this court.. The matter caine on for hearing here,and has been heard upon evidehce produced by the parties. It appears from the testimony that Frederick Beier,was a widower, having minor children living with him; that he' intermarried with a lady wbqse married name is Eliza A. Beier. She lived' with him some three or four months, when she left him, as is alleged by reason of his transgressions, and thereupon she filed a petition for alimony, which having been heard in the common pleas, that court allowed her a certain amount for alimony, and that is ore of the claims which is set up on the original pleadings in the court of common pleas. The contention here is, nominally, between Alexander Weber and Frederick A. Beier, It appears that since the filing of the petition Mrs. Beier has not rejoined her husband, but still lives separate and apart from him with her minor children, while be remains with his minor children, and the question raised here is, whether he, under these circumstances, as against Weber, is entitled to an exemption of $500 in lieu of a homestead?

It is contended on the part of Weber that sec. 5435 Rev. Stats, is to govern the rights of the parties. It reads:

“Sec. 5435. Husband and wife living together, a widow, or a widower, living with an unmarried daughter or unmarried minor son, may hold exempt from sale, on judgment or order, a family homestead not exceeding one thousand dollars in value; etc.’’

And it is said that inasmuch as Mr. Beier does not come within either of the categories mentioned in that section, therefore be is not entitled to a homestead, nor to an exemption in lieu of a homestead,

Section 5440 provides:

“5440. When a homestead is charged with liens, some of which, as against the head of the family, or the wife, preclude the allowance of a homestead to either of them, and others of such liens do not preclude such allowance, and a sale of such homestead is had, then, after the payment, out of the proceeds of such sale, of the liens so precluding such allowance, the balance not exceeding five hundred dollars, shall be awarded to the head of the family, or the wife, as the case may be, in lieu of such homestead, upon his or her application, in person, or by agent, or pttorne^.”

And it is contended on the part of Frederick Beier that he comes within the definition of a “head of a family,” and that he is entitled to the benefit of that section of the statutes.

The questions which have been argued here, and which arise under thse statutes, are somewhat perplexing. This arises from the fact that the statutes have been amended at various times, and not always with the single view of having an uniformity in regard to the language that is used, A decision of the question will compel us to make an investigation of the statutes as they have stood heretofore, and as they were enacted in the revision which was made under the authority of the legislature of the state, for the purpose of ascertaining what the present status of the law is upon that subject.

The act of March 23, 1850, provided by Sec. 1 (48 O, L„ 29) as follows:

“Be it enacted, ete — -that from and after the fourth of July next, the family homestead of each head of a family shall be exempt from sale on execution on any judgment or decree rendered on any cause of action accruing after the taking effect of this act; provided that such homestead shall not exceed five hundred dollars in value.”

That was the general description — that was the “head of a family.” Evidently anticipating that there might be some questions raised from time to time, the legislature, by sec. 4, defined who some of the parties should be that might be included in the definition, “head of a family,” or who should be entitled to the benefit of the act, and that section provides:

“Sec. 4. Every widower, or widow, having an unmarried minor child or children residing with him or her, as a part of his or her family, shall have the benefit of this act in the same manner as married persons, And mairied persons, living together as husband and wife, shall be entitled to the exemption in this act provided, although they shall have no children,”

■ So that, while it seemed to be assumed that “the head of.a family” would include a man who had a wife and children, it was provided that a widower or widow, having an unmarried child or children living with him or her, as a-part of the family, should have the benefits of the act; and that a husband, and wife, living together — evidently meaning if they lived together without children — should have the benefit of the act,

It will be observed that there was not included in that section of the statute, a class of persons which is quite large in this section of the state, viz: persons who have been divorced; and who may- be living in the homestead with a family of children; nor.did it include-the cases where the husband is living with his children and the wife had left him; nor did it include the cases where the wife is living ■in the family homestead with the children, the husband having left.

In-setting out ho.w the debtor should have the benefit of the act, the second section provided:

“Sec. 2. That the sheriff, or other officer executing any writ of execution founded on any judgment or decree, such as is mentioned in the first section of this act, on application of the debtor, or his wife, his agent or attorney,- if such debtor have a.family, and if the lands or tenements about to be levied on, or any part or parcel thereof, shall be the homestead thereof, cause the inquest of appraisers, upon their oaths, to set off such' debtor, by metes and bounds, a homestead not exceeding five hundred dollars in value, and -the assignment of the homestead so made, .shall-be returned, etc.- * *

So that the phrase there used of “head-of a family” is: “If such debtor have a family.” The. law continued in force until the year 1869, when, by an act passed April 9, -.1869, (found in Vol. 66 O. L. p. 48), the first and second sections-^which I have already lead — were re-enacted, .with the single change made so far as I can discover, that the homestead might be of the value of one thousand dollars instead of five hundred dollars, as theretofore. And then was also enacted the section which is now 5440:

“Sec. 5440. When a homestead is charged with liens, some of which, as against the head of the family, or the wife, preclude the allowance of a homestead to either of them, and others of such liens do not preclude such allowance, and a sale of such homestead is had, then, after the payment out of the proceeds of such sale, of the liens so precluding such allowance, the balance, not exceeding five hundred dollars, shall be awarded to the head of the family, or the wife, as the case may be, in lieu of such homestead, upon his or her application in person - or by agent or attorney.”

■ The law continued in force as we find it in Vol. 66, up to the time of the revision; and we find a revision in Vol. 75 O. L, I shall read from pages 692 and 800. Bee. 137 provides:

“Sec. 137. The act of April 9th,1869,entitled “an act to amend an act to exempt the . homesteads of families from forced sale on execution to pay debts, passed March 23, 11850 — shall be repealed.”

The.effect of that was to repeal the first section of the homestead act which I have referred to, but included in the provision the second section, and that reads as follows:

“The officer executing ary writ of execution founded on a judgment or decree shall, on application of the debtor^ his wife, agent, or attorney, at any time before sale, if such debtor have a family, and if the lands or- tenements about to be levied upon, or any part or parcel thereof, constitute the homestead .thereof, cause the inquest of appraisers, upon their oaths, to set off to such debtor, by metes .and bounds, a homestead not exceeding on,e thousand dollars' in value; etc. * *. ” '•

. Which follows substantially, I believe, the original homestead act of 1850, and is the s.ame as Sec. 5438 of.the Revised Statutes.

Section 67 provided:

“When a homestead is charged with liens, some of which, as against the head of the family, or the wife, preclude the allowance of a homestead to either of them, and others of such liens do not preclude such allowance, and a sale of such homestead is had, then, after che payment out of the proceeds of such sale, of the liens so precluding such allowance, the balance, not exceeding five hundred dollars, shall be awarded to the head of the family, or the wife, as the case may be, in lieu of such homestead, upon his or her application, in person, or by agent or attorney.”

Reading the same as Sec. 5440.

Now the question is: What is meant by the fact that sec. 1 of the original act has been repealed ? It will be seen that it has been repealed by the revision. The object and purpose of the revision, and the rights and duties of the commissioners appointed to make the revision, and the effect of their acts, is set forth in the 39th Ohio St. 336, the case of Allen v. Russell In that case a levy had been made upon a certain lot, and a widow had asked to have the property set off to her as a homestead, it not exceeding in value $1,000. The court says:

“She was, at the time, and ever since has been, a widow, but was not at any time living with an unmarried daughter or unmarried minor son. ’ ’

And the question came up whether she was entitled to have a homestead, and a discussion had arisen over the change in the acts. Judge Okey says:

“The act of 1871, (68 O. L. 106), amendatory of the homestead act of 1850, in force when the judgment recited in the vendi ex. was rendered, provided as follows: ‘Every widower having an unmarried minor child or children residing with him as part of his family, and every widow, shall have the benefit of this act.’ ”

It will be seen that no question could arise as to the widow being entitled to the provisions of the act of 1871.

“This act was repealed by the act of 1878. * * * The latter provision has been incorporated into the Revised Statutes, and, properly punctuated, is as follows: ‘Husband and wife living together, a widow, or a widower living with an unmarried daughter, or unmarried minor son, may hold exempt from sale on judgment or decree, a family homestead not exceeding one thousand dollars in value, etc.’
“Where one or more sections of a statute are repealed and re-enacted in different form, the fair inference is, in general, that a change in meaning was intended; though even in such a case the intention may have been to correct a mistake or remove an obscurity in the original act, without changing its meaning. But where all the general statutes of a state, or all on a particular subject, are revised and consolidated, there is a strong presumption that the same construction which the statutes received, or, if their interpretation had been called for, would certainly have received before revision and consolidation, should be applied to the enactment in its revised and consolidated form, although the language may have been changed. Of course if it is clear from the words that a change in substance was intended, the statute must be enforced in accordance with its changed form, * * *.
“The commissioners appointed under the act of 1875, were required to revise and consolidate the statutes of a general nature, and make report to the general assembly. They determined that the best way to perform that duty was to arrange all the general laws under the proper heads, and report the same to the general assembly in the form of a bill. Their power to change was very limited. It was confined to ‘making alterations to reconcile contradictions, supply omissions, and amend imperfections in the original acts, so as to reduce the general statutes into as concise and comprehensive form as is consistent with the clear expression of the will of the general assembly.

And now the court say:

“Their power to change did not extend to matters of substance, like the right to a homestead. The commissioners were vested with no legislative power. They could recommend, and that was all; and the bill which they prepared, obtained its vitality solely from its adoption by the general assembly. Changes were undoubtedly made in the bill by the general assembly, but they were not numerous. That the rule which I have stated as applicable .to revisions, should be applied to the Revised Statutes, can admit of no doubt; and, applying the rule, it is clear a widow is entitled to a homestead, although she may not be so fortunate as to live with, or even have, ‘an unmarried daughter or unmarried minor son.’ ”

Now coming back to this act of 1850, it seems to us that the original section was left out really as a matter of surplusage. It merely made the general statement that a . head of a family should have a homestead. By sec. 2 of this act, it was provided that any debtor might make a demand for a homestead, “and if such debtor have a family, and if the lands or tenements about to be levied on, or any part or parcel thereof, shall be the homestead thereof, the officer shall cause the homestead to be set off.” That is to say, that section of itself gave power to the sheriff, without any previous provision of the statute, to award or set off to the head of a family a homestead. And the matter remains, in our judgment, in this shape: That in the revision and consolidation of the statutes, the revisers and the legislature who adopted that provision, supposed that sec. 2 of ■the act of April 9, 1869, gave to the head of a family all the rights that could be given to him by the original sec. 1; and we therefore hold, that the construction of that section of the statute should be: that the head of a family shall have a homestead allowed him. In Sec. 5440, and in the original sec. 4 of the act of 1850, are simply designated certain classes that might come in under the definition of “head of a family, ” but do not exclude any others. Others may be included under “head of a family,” The result would be that we must look to sec. 5438 to see first, who is entitled to have a homestead exemption, and to sec. 5440, to see who is entitled to have an allowance in lieu of a homestead.

J. P. Delphy, for Plaintiff in Error.

J. M. Pitchie, for Defendant in Error.

It is claimed here that in the term “head of a family,” the word “family” means husband, wife and children. We are not disposed to take that view of it. We think that is too narrow and limited a construction to be placed upon the statute. We think that where a man is living wi.th- 'his minor children, or a woman is living with her minor children in the homestead, that she should be entitled to a homestead, the same as if husband and wife were living together and occupying the homestead. In various decisions in this state it has been, held that a liberal construction should be given to this act for the benefit of. the families of the debtors.

This matter is one of some perplexity, and we have endeavored to give it very careful attention, and have spent much time in reading the different statutes which seem to bear upon it, and have endeavored to arrive at a conclusion which shall carry out the spirit of the statutes, and which shall be just to all who may claim their provisions. As I have said, there is a very large class of cases in the state of Ohio, which must be constantly arising, where the husband obtains a divorce from his wife and remains in the house with his family of minor children. Cases may arise where the wife obtains a divorce from her husband and remains in the homestead with a family of children which may have been awarded to her more in the way of alimony, and I see no reasons why those persons should not have the benefit of a statute of this kind. And so cases may arise, like' the present one, where the husband is left with the minor children, and his wife may have left him — -perhaps through his own fault; but still we do not think that affects the question of his right to have a homestead. We are of opinion, therefore, in the present case, that the $500.00 demanded by Beier should be allowed him, or so much of it as shall remain in the hands of the court after paying.the costs herein, to the extent of $500.00.


source: Caselaw Access Project

author: Smith, J.

license: Public Domain

text:
    (First Circuit — Hamilton Co., Ohio Circuit Court,
    Jan’y Term, 1897.)
    Before Cox, Smith and Swing, JJ.
    THE P. C. & ST. L. R. R. CO. v. PATRICK McLAUGHLIN.

      Employment of minor by R. R. Co. — Duty of R. R- Co. to ascertain age—

    1. Where a minor applies to a R. R. Company for employment, stating that he is of age, and whose general appearance, conduct and size would seem to confirm such statement, and being put to a dangerous employment, he is injured, the R. R. Company is not liable to his father for damages on the ground that the Company failed to inquire of the father whether the son was really of age or not. A R. R. Co. is not, under such circumstances, required, as matter of law, to make such inquiry.
   Smith, J.

On the trial of this case the defendant company asked the court to charge the jury that, “if you find that the plaintiff did tell Conveys,” (who was the officer of the company who employed the son of the plaintiff), in 1891, not to employ his son as brakeman, without saying anything about his age except that he was a minor, and further that defendant did so employ him while a minor, the plaintiff can not recover if the defendant did believe that he was of age when he employed him, and also had good reason to believe that he had attained his majority from his appearance, conduct, and statements.” The court refused to give this charge, and the defendant excepted.

The action was brought by the plaintiff, the father of a minor son, who had been employed as a brakeman by the defendant, and who, as such, had received an injury in the course of his employment, on the ground that the company had acted negligently in employing a minor without the consent of the father, to transact dangerous business.

There was evidence submitted which tended to show all of the facts assumed in the charge — viz: That in 1891, the plaintiff had asked the company to discharge from its employment as a brakeman his said son, as he was a minor, and made no other statements as to his age; and that in April, 1893, the defendant company again employed him as a brakeman, he being still a minor and about twenty years of age, he having for some time before been engaged with said company as a freight handler, with the knowledge of, and without any objection from his father —and that when he was so employed as a freight handler, he had filed a written application for employment with Coneys, the agent, in which he represented that he was twenty-one years of age June 3, 1892, That wheD he was employed as a brakeman by Coneys in April, 1893, the latter believed, from his statement, appearance and conduct and size, that he was of age — “that his general make-up, his size and his appearance led him to believe that he was over twenty-one years of age."’

We are of the opinion that the charge so asked was correct, and should have been given to the jury in the language asked, or in substance, but it was not done. The fact that in 1891, a year and a half before this last employment by the son, the plaintiff had simply informed the agent of the company that his son was then a minor, should not be held tobe notice to-the Company that he was not of age in April, 1893. In the natural course of events, if the son lived he would become of age. And the question for the consideration of the jury was, whether the defendant Company was negligent in employing him in 1893. If the officer of the Corppauy at that time,in good faith, believed, and had reasonable ground to believe from the size, appearance, conduct and statements of the son, that he was then of full age, it would seem that this would be the exercise of reasonable care, and the company could not be deemed to have been negligent. As has been said,there was no charge equivalent to that asked. Thé instructions of the court on this point were to the effect that the Company, ■or its agents, should have used reasonable care to ascertain the age of the son, without, in any way, defining what .such care was.

Bamsey, Maxwell & Bamsey. for Plaintiffs in Error.

Peale & Shaffer, for Defendant in Error.

The defendant’s counsel also asked the court to give this special charge to the jury, which was refused and exception taken,

“In any aspect of the case, the defendant was not required, as a matter of law, to inquire of plaintiff whether his son had reached his majority.”

It seems to us that this charge also should have been given. It was the duty of the defendant Company towards this plaintiff, to use reasonable care to ascertain the age of the son before putting him into a dangerous position or occupation. But we know of no principle of law, or any adjudication of a court which goes so far as to make it essential and necessary that inquiry should be made of the father as to the age of the son. It is manifest that a very high degree of care as to this might have been shown without any such inquiry of the father. The refusal of the court to give this charge was, in effect, a holding that such inquiry was essential to prove reasonable care on the part of the Company.

For these reasons, the judgment of the court of common pleas will be reversed, and a new trial awarded.


author: King, J.

text:
    (Sixth Circuit — Lucas County Ohio Circuit Court,
    Jan’y. Term, 1897.)
    Before King, Haynes and Parker, JJ.
    AUGUSTUS F. BOSCHE v. THE TOLEDO DISPLAY HORSE CO.

      Chattel mortgage by corporation — When valid as against other creditors—
    1. A chattel mortgage executed by a going corporation -to a bank to secure an antecedent loan, made to carry on the business of such corporation, and without any intention at the time to stop its business, is not void as a preference as against other creditors, although afterwards, being threatened with attachment suits by other creditors, it comes into court asking for a receiver to wind up its affairs.

      Power of corporation to secure debt by mortgage—
    2. A corporation in Ohio has the right to borrow money to pay its debts and to carry on its business, and may give mortgages on all its property to secure such loans.

      Same — Executed by proper officers without knowledge of other - directors—
    3. Such a chattel-mortgage, executed by the president and secretary of a private corporation, who are also members of the board of directors, to secure a debt of the corporation, although executed without the knowledge of the other directors at the time, is valid in the hands of the mortgagee who is not aware of the fact.

      Mortgage'j>f corporation properly executed — Duty of creditor to inquire—
    4. A creditor of a corporation should know that the corporation has the legal power to make the loan and to execute a mortgage, but he is not bound to inquire whether the board of directors has had a meeting and passed a formal resolution authorizing the loan and mortgage, or that the directors are legally elected, or whether the directors took an active interest in the business of the corporation or not.
   King, J.

In this action certain creditors of the Toledo Display Horse Company, a corporation, are seeking to have distributed to them-, in payment of their claims, certain funds in the hands of a receiver, and to prevent the application of the funds to the payment, as a preferred claim, of the debt of the First National Bank of Toledo. The claim of the bank arises in this way: On the 22 June, 1894, the corporation, known as the Toledo Horse Display Company, 'was doing business in Toledo, in the course of which they borrowed one thousand dollars of the First National Bank, and executed to the bank its promissory note for that sum, promising to repay the money in ninety days with interest at eight per cent, per annum. This note was executed upon its face by the president and secretary of the defendant company, in their official capacities, and at the same time the president and the secretary individually endorsed the note upon its back,' The money was procured and used by the corporation in its business and for its benefit. At the time the money was borrowed, these officers of the corporation promised or agreed with the bank that if required or asked for, they would give other and additional security upon the property of the concern; Nothing further, however, was done in reference to the loan at that time. The note matured on September 28th, or thereabouts, and the matter ran along and the corporation became indebted to the bank, not only for this note and interest accrued thereon, but also on a small over-draft, so that on the 22 November the debt amounted to 11060; and on this day — Nov. 22, 1894 — the corporation, by its president and its secretary, and under the seal of the corporation, executed to the bank a chattel mortgage upon all its property — at least all of its chattel property, and-there is no evidence before us that it had any other property except its chattel property — which consisted of its stock in trade and the materials which it had on hand, and which it was engaged to manufacturing into display horses, and perhaps other articles. This chattel mortgage on all of its property was executed and delivered to the bank, to secure a new note drawn up and executed on that day by the president and secretary of the corporation for the amount of its entire indebtedness to the bank, viz: 11060. This mortgage was held and not filed for a few days, but it was filed with the recorder of Lucas county, Ohio, on Dec. 5, •1894, at 11:58 A. M. On the 4th of December the bank claimed that it took possession of this stock, by sending ■one of its clerks to its premises, and to him was delivered, by the president of the corporation, the key of the store room, in which most of the stock and material was located, and he held some-sort of possession of this store room from that time,during the following day, and until the forenoon of December 6th, when he surrendered possession of all the property which had been held for the bank,to a receiver that had been appointed in this action on December 5th. This action was commenced by' the president, Mr. Augustus F. Bosche, on that day, as he says, for the reason that he feared trouble from attachment proceedings which had been on that day commenced and were pending before a justice of the peace in this city. The Display Horse Company had become insolvent. . It was insolvent on the 22nd of November when it executed this chattel mortgage, and it remained in that condition and was insolvent on the day of the appointment of the receiver; but on the 22d November, at the time of the execution of this chattel mortgage, we do not find that the officers of the company expected to suspend business, but, on the contrary, they expected to continue business. We find that the mortgage was given to the bank for' the purpose of satisfying it, .for the time being, so that they would commence no legal proceedings against this company, but would permit them to have further time to go on with their business. They did expect to carry on business for an indefinite time in the future, and were continuing to carry it on up to the 5th of December, when, the president says, some cases were commenced against the company before a justice, and then he commenced this action to have a receiver take charge of the business,and wind it up.

The president and secretary executed this second note and mortgage without any consultation or meeting with any of the other directors. There were five directors, of whom the president and the secretary were two; the president’s sister was one, and a Mr. Smith'and Mr. Chapman. Mr. Smith was, at the time of the execution of the chattel mortgage, travelling on the railroad somewhere, engaged in some business of his own, and was not in Toledo. He. returned here after the giving of the note and chattel mortgage, was notified of it and agreed to it, and never dissented from it. Mr. Chapman was in Toledo, but his attention was not called to it until after it was given, when he was notified of it, agreed to it, and never dissented from it. In his examination he is finally of the opinion that his attention was not called to it until after the appointment of the receiver, but he is not certain of this. As it has been three years ago, he is not at all certain that he learned of it before or after the appointment of the receiver, but he thinks he learned ,of it shortly after it was given. Mr. Chapman is not very clear in his recollection on some other matters. For instance, he thinks he never attended a meeting of the board of directors, while upon the record it appeared that he had attended two or three of them, back in May, 1896, and by the records of the corporation it does not appear that after the month of May the board of directors ever had a meeting — no record was kept of meetings after May, 1896. It is fair to say that so far as Chapman is concerned, after May, 1891, he never gave the business of the corporation any attention, but it was managed by its president and secretary and Mr. Smith, who, when he was in Toledo, was consulted. Miss Bosche does not appear to have taken any active interest in the concern, but was nominally a director,having no management of it whatever, and, so far as the proof shows, she never was consulted about any of its business.

It is claimed here, that this mortgage should be held— in the interest of the general creditors — void, for the reason that it was given in fraud of creditors, or was a preference made by this corporation which was actually insolvent and, that within the law as laid down in 46 Ohio St., it is absolutely void.

Upon that point, I may say that we do not think it comes within the doctrine as laid down in 46 Ohio St. It is substantially, in its facts and law, like the case of Campbell v Bellman Bros, reported in 11 Circuit Court Keports, 360, which sustained as valid the conveyance there involved, and is within the doctrine as laid down in 47 Ohio St 581.

But is it void, because it was not legally executed by its board of directors, or by any board of directors? An able argument is made here as to the powers and duties of the directors of a corporation, as to the necessity of their meeting and transacting their business as a whole body; that the minds of the directors should come together, and that their assents should be given to any corporation acts, or to any that are necessary for its board of directors to perform as distinguished from those of the executive officers —the president, treasurer and secretary. In most all of the authorities the reasoning'is applicable to a case where a threat of injury is made, or where the stockholders or non-attending directors are complaining that the business of the corporation has not been properly 'attended to by their agents and, no doubt, any stockholder may well object to the violation of duty on the part of his agent in the management of the business of the corporation whenever he is given an opportunity for that purpose. Or he may bring an action to have those who violate their duties as officers removed from office. And so may a state bring an action to oust a corporation from its franchises as a corporation for the violation of its legal duties; but none of them, so far as I can ascertain, is applicable to this case, which is a mere contest between creditors claiming priority of payment out of the assets of a -corporation. Persons dealing with officers of a corporation are only bound to know the legal power of the corporation to perform, acts; they are not required to know that all the formalities required of the different officers in the performance of their duties have been observed. There is a clear and a wide distinction between those two propositions. A corporation in Ohio has a right to borrow money to pay its debts and' to run its business, and it has a right to give a mortgage upon all the property it possesses, to secure that loan. It is necessary that the creditor should know that the corporation has the power to make a loan and to secure it by mortgage; but if satisfied himself of that authority, it is not the business of the creditor that he should know that the board of directors has had a meeting, and that it has passed a formal resolution that they are to borrow money or give security therefor, or that the directors’have been legally elected, or that the directors took an active interest or not. The creditor is not bound to know those things. He is dealing with a corporation, which is a legal entity which the state has invested with the right to do things in its corporate name, through its officers, and throught its officers alone. This doctrine is abundantly supported by authority, and I will cite two or three of the leading ones upon the subject. The case of The Miners’ Ditch Co. v. Zellerbach and Powers, found in 37 California Repts. 543, is a leading case. I will read from the syllabus, as the opinion is of great length:

“In a contract between a corporation and strangers dealing with it, when the act in question is one which the corporation has no power to perform under any circumstances, the corporation may avail itself of the defense of ultra vires; but when the act may be performed by the corporation for some purposes, but not for others, the defense of ultra vires may or may not be available. If the stranger dealing with the corporation knew of its intention to pe'rform the act for an unauthorized purpose, the defense 'is available, otherwise not.
“Where a deed purporting to be the deed of a corporation is signed by its trustees as trustees, and has the corporate seal affixed, it is admissible in evidence as a deed of the corporation, and is itself prima facie evidence of the regular and duly authorized execution of the same.”

That is an interesting case. There is also a leading case found in 88 Eng. Com. Law Rep. 337, in which the question is discussed.

This authority in 26 Ohio St. 426, is in line with that as to the effect of a deed only:

“A deed executed by the president of a railroad company in due form, under the seal of the corporation, and delivered, will be presumed to have been authorized by the directors; and the mere fact that such authority is not found on their minutes will not rebut the presumption.”

In 5 Thompson on Corporations, under secs. 597 and 598, many authorities will be found. Now it is clear from these authorities, that this corporation could not defend against a suit brought by the bank on the ground that it did not have the authority to make this loan, because the corporation did have authority to make it and to secure a loan made for business purposes, and the creditor is not bound to inquire into the purpose. If he has a full and distinct knowledge of what the purposes are, and if they are illegal, it might make a defense, otherwise not. But here the loan was entirely proper — was made for the uses of the corporation, and was borrowed by the officers of the company upon the distinct promise that they would individually endorse it. They were not required to endorse the company’s paper. It was without consideration moving to them. They could, by their own acts and the consent of the bank, change that endorsement at any time they saw fit, or change to any other form of security. The loan was made to the corporation,and the corporation was bound to secure it, if security was to be given; but there was no obligation, implied or otherwise, resting upon them that they should maintain the contract in the form in which it was originally made. The corporation having power to borrow money and to give security, the executive officers; could change the form of security whenever they saw fit, and whether they did that with or without a meeting of the board of directors, is a matter of no consequence, and the security cannot be taken from the bank because the board of directors did not meet. But, as a matter of fact, every director who knew anything about it, agreed to this mortgage — 'Consented to it. Shall it be held then that the general creditors may come in and set aside this mortgage which was given in good faith? It would be very bard to hold that to be law, and we think the bank should be entitled to this money; provided, however, that the receiver shall pay all the costs of this action before he distributes the proceeds of this property, and he can then pay the bank its claim so far as the proceeds go.

I. N. Huntsberger, for Plaintiff

Johnson. Thurston, Wesley J. Thurston, E. W. Tolerton, for Defendants.


text:
    (First Circuit — Hamilton Co., O., Circuit Court
    Jan. Term, 1897.)
    Before Cox, Smith and Swing, JJ.
    HENRY D. HALBERT v. ALICE ARMSTRONG.

      Attachment for claim of damages for breach of promise of marriage proper—
    1. Under sec. 5511 R. S. an attachmeut will lie on the ground of defendant’s non-residence, in an action for damages- for breach of promise of marriage.

      Same — Promisee creditor of promisor — Fraudulent conveyance—
    2. One entitled so damages for breach of promise to marry is a credit- or of the promisor, and is entitled to have a conveyance made by the promisor without consideration to defeat the collection of her claim set aside as fraudulent.
   Smith, J.

Two questions are presented by the record in this case, viz:

1st. "Whether, under the provisions of the Rev. Stats. 5521, that “in a civil action for the recovery of money, the plaintiff may, at or after the commencement thereof, have an attachment against the property of the defendant upon the grounds herein stated,” one of which is that the defendant “is a non-resident of the state;” and another provision of which section is that, “an .attachment shall not be granted on the ground that the defendant is * * * a non-resident of the state for any claim other than a debt or demand arising upon contract, judgment or decree,” an attachment may properly issue in an action brought to recover damages for the breach of a contract of marriage, when the only ground alleged in the affidavit for the attachment is, that the defendant is a non-resident of the state. And.

2nd. Whether, on the evidence submitted on the motion to discharge the attachment cn the ground that the defendant was not a non-resident of the state, the finding of the court of common pleas, that he was a non-resident, was against the weight of the evidence.

As to the first ground, we are of the opinion that in such an action an attachment will lie on the ground that the defendant is a non-resident of the state; that it is a debt or demand arising upon contract. Unless there had been a contract between the parties, the action would not lie, and if there was such a contract and a breach of it by the defendant, it would lie. It is true that the amount of damages to be recovered would be estimated on rules and principles differing from those recoverable on ordinary contracts, and more like those applying to actions of tort. But nevertheless, the claim is one arising upon contract, and, we think, comes clearly within the letter and spirit of our statute. As stated by Judge Grholson in deciding the case of Ward v. Howard, 12 Ohio St. 158, at 163. “It is obvious that an intention is manifested to extend the remedy by attachment',and that in no stinted degree.”

In the case of Caldwell v. Spillman (7 W. Law Journal, 149) decided by the supreme court of Ohio, on the circuit, Judges Hitchcock and Caldwell presiding, this direct question arose under the statute then in force, differing, as we conceive, in no substantial degree from that now in force.

Judge Hitchcock, in deciding the case said,

“Formerly the writ of attachment could be sued out in all cases of tort as well as of contract, but the legislature has now confined it to cases‘arising out of, founded upon, or sounding in contract. ’ A remedy is given by attachment under the present statute in all cases where the form of the action is contract, as contra-distinguished from tort. In a breach of promise of marriage the form of the suit is for a breach of the contract, and the writ of attachment is as plainly applicable to cases of that description as to cases of debt for the non-payment of money, or of damages for the breach of any other contract.”

It is true that the contrary doctrine was held by Judge Tilden in special term of the superior court, 1 Bulletin 341, and this .decision was affirmed by the general term,2 Bulletin, 4; but we are of the opinion' that the doctrine announced by the supreme court on the circuit is the better law.

We think that the view we have expressed is supported by the decision of the supreme court in the case of R. R. Co. v. Peoples, 31 Ohio St. 537. In that case the plaintiff below, Peoples, brought an action against the R. R. Co. to recover $30,000 as damages for a personal injury to herself, based on this state of facts: That for a certain reward paid by her she became a passenger on the train of the defendant company, and that defendant thereby agreed to carry her safely to her destination, and was bound to furnish her suitable and proper means to enter the car, and to stop the train a sufficient time to allow her to enter the same, and failed to do so, and acted so carelessly, that as she was getting upon the train, it was started, and she was thrown down and seriously injured.

An attachment was issued on the ground that the defendant company was a foreign corporation, A motion was filed to dismiss the attachment, on the ground that the action was not founded upon a debt or demand arising on contract. The court of common pleas sustained the motion, but its order was reversed by the district court, and its judgment of reversal was upheld by the supreme court.

The supreme court held that the suit was upon the contract, as it might well be, and said that, “while the form of the action does not materially affect or vary the character of the evidence necessary to establish the liability of the carrier, there is no doubt that the cause of action in the present case arises upon contract-within the meaning of the above provision of the code,” viz., the attachment provision.

In this case, as in that, the action is on the contract, and though thejamount of damages in each was unliquidated, and to be determined somewhat upon the same principles as in an actionjfor tort, yet this is no reason why the action is not one arising on contract, and an attachment will lie.

It was also|held in 40 Ohio St. 107, in the case of McVeigh v. Ritenoúr, where a man liable to a suit for a breach .of promise to marry, sold property, (a house and lot)., without consideration to a third person to prevent the collection of the damages^by^the woman whom he had promised to marry; and she afterwards brought suit and recovered damages against him for the breach for the marriage contract, the court held that at the time of such conveyance, she was a creditorjof the grantor, and that the deed was void as to her, and the land was subject to levy and sale under her judgment. A creditor is one who has the right to require the fulfillment of an obligation or contract.

Oultealt & Granger, for Plaintiff in Error.

Wedon D. Neal, for Defendant in Error,

2nd, While it is certainly true that the evidence,submitted to the trial court as to whether the defendant at the time of the commencement of the attachment proceedings and the service of the writ upon him, was a non-resident of the state of Ohio, was conflicting in its character, yet we are not able to say that the finding of the court that he was an non-resident, was so clearly against the weight of the evidence as to justify us in reversing it upon that ground.

The judgment of the court of common pleas overruling the motion to dismiss the attachment is therefore affirmed.


text:
    (Sixth Circuit — Lucas Co., O., Cir. Court
    January Term, 1897.)
    Before King, Haynes, and Parker, JJ.
    THE STATE OF OHIO, ex rel. ANNA HERR, v. PATRICK J. O’BRIEN.

      Attachment against non-resident — Exemptions— Bastardy proceeding—

    Where in an attachment proceeding against a non-resident of Ohio, the money coming to such defendant is garnisheed, such defendant is entitled to the same exemptions provided in sec. 5340, as a resident of the state would be, and this applies where the attachment is issued in a bastardy proceeding.
    Error to Common Pleas Court of Lucas county. ■
   Haynes, J.

A petition in error is filed in this court for the purpose of reversing the action of the court of common pleas in discharging a certain attachment-in a case there pending wherein Anna Herr was plaintiff,and O’Brien was defendant. The complaint filed in the common pleas was one in bastardy, originally commenced before a magistrate, upon a suggestion or showing, that the defendant was a non-resident of the state, and could not be arrested within the state. The^case was certified up to the common pleas,and there proceedings were had in attachment, under the statute of the state of Ohio. The officer,- not being able to come at any property of O’Brien's, served a process of garnishment upon the Wabash Railway Company, in whose service O’Brien was. Afterwards O’Brien came into court, and moved to “discharge the attachment and release said garnishee,the Wabash Railroad Company, from the order of garnishment in this action: First, that the grounds stated and set forth in the affidavit for attachment are untrue; and second, that the property attached in this action is, under the law, exempt from attachment.’’

Upon the hearing the court ordered the attachment, as to the garnishee, to be discharged and the garnishee released from the effects of the garnishment, and thereupon a bill of exceptions was taken, setting forth the evidence presented to that court.

The question that is argued before us is, that the defendant, being a non-resident of the state, was not entitled to the benefits of the exemption laws of the state of Ohio. It is very earnestly contended that they were not applicable to him,in a proceeding of this kind — that even if they were in a civil action, they were not in a proceeding of this nature, which was claimed to be of a quasi-criminal character. The Exemption Act, sec. 5340, provides:

“Every person who has a family, and every widow, may hold the following property exempt from execution, attachment or sale, for any debt, damages, fine, or amercement, to-wit:
“6. The personal earnings of the debtor,and the personal earnings of his or her minor child or children, for three months, when it is made to appear by affidavit of the debtor or otherwise, that such earnings are necessary to the support of such debtor, or of his or her family; and such period of three months shall date from the time of issuing any attachment or other process, the rendition of any judgment, or the making ot any order, under which the attempt may be. made to subject such earnings to the payment of a debt.”

So far as the question is concerned whether that law would apply to a non-resident or not, in a civil action — that question has been settled for us in the supreme court of the state in a decision which may be found in 26 Ohio St., 577:

“By the Court: — 'The exemptions from' execution or sale allowed to “every person who has a family,” under the provisions of the Act of April 16, 1873 — which is, in fact, the act which I have just read — may be claimed by any debtor against whom an action is prosecuted in the courts of this state, whether such debtor be or be not, a resident of this state.”

Looking now at the question, whether a defendant in a bastardy proceeding should have the benefit of that act, we will turn to the Bastardy Act itself, Sec. 5627, provides:

“Such putative father,after having been confined in prison for the period of three months, for failing to comply with the order of the court provided for in the last section, shall be entitled to the benefits of the provisions of law relating to insolvent debtors, in the same manner as persons imprisoned for debt; but before such putative father shall receive or be entitled to such benefits, he shall give at least three days notice to the complainant or her attorney of his intention to apply therefor ”

So that if the defendant had been arrested in this state, he would, after three months, have had a right to make application for the benefit of the provisions of the law applying to insolvent debtors.

Sec. 6361, makes this provision — among others:

“When any person, whether a resident in. this state or not, shall be arrested, or be in custody of any sheriff or other officer, on mesne or final proaess, in any civil action, the officer having such person in custody, if requested by him, shall go with such person before the commissioner of insolvents of the county where such person shall be arrested, or in custody” — -(and there he has to make out certain schedules and make certain disposition of his property, if any he has, and then it proceeds to provide:) “provided, however, that nothing herein shall be construed to deprive' any person of any right- he may have to hold property exempt from the payment of his debts, or to require him to assign or surrender any such property or rights of action to the commissioner.”

And it goes on to provide that a separate schedule is to be made, etc., so that if he had been a resident of the state, or arrested within the state being a non-resident, upon complying with the provisions of this act, he would have been entitled to the exemptions provided by the statutes of the state of Ohio,

Turning again to the Bastardy Act, it was provided in regard to attachments that may issue:

“And attachments under this chapter shall be subject to the provision's of this title in reference to attachments in civil actions, and be governed in all respects thereby.”

That is to say — by the general attachment laws of the state of Ohio.

Sec. 5636 provides as follows:

“If, upon such trial, the accused be adjudged to be the reputed father of the child,the court shall order that unless the. defendant within a day to be fixed by the court, pay the sum adjudged against him, with costs of prosecution, so much of the property remaining in the hands of the officer, after applying the money arising from the sale of perishable property, and so much of the personal property, and lands and tenements, if any, as may be necessary to satisfy such order, be sold, under the same restrictions and regulations as if the same'had been levied on by execution; the moneys arising therefrom, with the amount that may be recovered from the garnishee, shall be subject to the order and control of the court, and be applied to satisfy such order in such sums and at such times at the court may order and direct;' if there be not enough to satisfy the same, the order of the court shall stand, and execution may issue thereon for the residue,in all respects as in judgments at law; and any surplus of attached property, or its proceeds, shall be returned to the defendant.”

M. B. Lemmon, for Plaintiff in Error.

Frank F. Wright, for Defendant in Error.

We feel quite clear, from the provisions of these various statutes, that the defendant in this action was entitled to his exemptions under sec. 5430, aforesaid,and that the court of common pleas did not err in so holding and in discharging the attachment and releasing the garnishee, and for that reason,the judgment of the court of common pleas will be affirmed.


text:
    (Sixth Circuit — Lucas Co., O., Circuit Court
    October Term, 1896.)
    Before Haynes, Scribner and King, JJ.
    THE OHIO OIL CO. v. NANCY E. McCRORY.

      Gas and oil lease— What is “gas sufficient to justify marketing’ ’ is for jury, not for witness to answer.—
    1.. Where a lease provides, as rental, for a share of the oil, and also for a fixed annual sum for the gas if found in sufficient quantity to justify marketing, and the lessee uses the gas flowing from an oil well together with the gas flowing from other oil wells as fuel for a central boiler located on other land to operate the oil well in question together with several other wells located closely on other lands, the question wnether this should be considered a production of “gas sufficient to justify marketing” under the provisions of the lease, is for the jury to determine. Testimony whether such would be considered the production of “gas sufficient to justify marketing is not admissible, as this is the question for the jury to answer.

      Same — Custom permitting ■use of gas flowing from oil well as fuel for engine. — “Custom” defined.

    2. Where in such case custom is claimed by which the lessee has the right to use the gas flowing from an oil well as fuel for the engine to operate the well, without charge therefor, such custom must be shown to be long continued, without interruption, acquiesced in reasonable and certain, so that the presumption arises that it was known to the parties to be affected thereby; but it is not in all cases necessary that it be known to a party, where the custom claimed, though only of recent date, is so general and universal and so commonly known and acted upon, as to shut out the right to plead ignorance of its existence. A party has no right to shut its eyes to what is universally known in his community by others, and this is a question for the jury to determine.

      Test for determining whether production of gas is sufficient to justify marketing — Location—Lessee not bound to find market. —
    •3. Upon the question whether a well produces gas sufficient to justify marketing, the question whether or not the gas derived from the well would be equal to the rental stipulated to be paid if gas enough be found to justify marketing,as a test, must be considered in the light of surrounding circumstances. The cost of marketing is a material element, and it is not the duty of the lessee to find a profitable market.

      Use of gas as fuel under central boiler located on other land.—
    4. The use of the gas from the well by the lessee to operate the well itself,even although the boiler under which the gas was consumed for that purpose be on other lands, does not entitle the plaintiff to a verdict, unless the jury also find that there was produced a sufficient quantity to justify marketing of gas.

      Statement of employes— When incompetent to bind their employer—
    5. Statements of mere employes who are charged wilh the specific duties, cannot be offered in evidence to bind their employer.
   King, J.

The defendant in error, Nancy E. McCrory, in 1877, made a lease, known as an oil and gas lease, to one C, Underwood, by which she leased to the lessee, his heirs and assigns, her lands, comprising about five acres, and the right to drill and operate for petroleum oil and gas.

One of the conditions of the lease was, that if oil was produced by these operations, the lessee agreed to give to ■the lessor the one eighth part of the oil, and deliver the same in tanks free of expense; and should gas be found in sufficient quantities to justify marketing the same, the consideration in full, to the party of the first part, .should be .three hundred dollars per annum for the gas from each well as long as it should be sold therefrom.

This lease was afterwards assigned by Underwood to The Ohio Oil Company, and this action was brought in the court of common pleas by Nancy McOrory to recover from The Ohio Oil Company the amount which she claims is due for the use oi the gas from a certain well on her premises. The amount she claims is six hundred dollars, which would be three hundred dollars per year for two years.

The defense was that thewelbwas an oil well essentially; that there was a little gas in it, but only about the amount .that is usually found in oil wells of .that character, and that it had been used, so far as it had been used at .all, by the defendant to operate the well. That the defendant had other wells on other properties near and adjoining, and that it had piped the gas into a common pipe and used it to operate all of the wells, but there was not more gas from this one well than enough to operate it; in fact, not enough to operate it at all times.'

The case was tried, and a verdict rendered for the plaintiff for the amount of her claim.

It is claimed that the verdict and judgment are wrong, for several reasons: That in the course of the trial, im-

proper evidence was admitted. That the court erred in its charge, and that the verdict is not sustained by the evidence.

I shall notice these several grounds of error-in the order that I have named them.

A great many exceptions were taken throughout the record. The first one which I desire to notice is exception No. 7 on page 8,' in which Mrs. McOrory, the plaintiff, being a witness, was inquired of whether she had any conversation with a certain Mr. Floyd, or Mr. Noggles, during the time they had charge of the pumping of the wells, relative to the strength of'the well on her premises for gas from November 16th, 1892, to November 16th, 1894, which' is the period named in the petition for which she seeks to recover. That was objected to, objection overruled and exception taken, and the witness answered that they said to her that it was a good well. The evidence showed that Floyd and Noggles were pumpers, pumping the wells belonging to the defendant. Now, it is enough for me to say that nothing is shown here to justify the admission of this testimony. That the statement of mere employes, who are charged with specific duties, cannot be offered in evidence to bind the defendant company; that these employes had no such control or authority as would make their admissions competent.

On page 27, exception No. 19, this question was asked:

“Now then,if you know the quantities of gas a well should produce to justify marketing the same, you may state to the jury what amount of gas that would be.”

That is objected to, overruled and exception.

The witness answered:

“I would consider gas that would be sufficient to run from five to ten or twelve stoves was the amount of gas that would guarantee a company for to lay a line at the cost of forty of fifty dollars for to run the gas and conduct it onto another farm, to enable them to produce oil on other premises; that is what I would consider a paying well,- — -in paying quantities.’’

We think that objection ought to have been sustained, and the answer of the witness ruled out, as it seems to be a long rambling argument rather than the statement of a fact.

The question as to whether a well produces gas in paying quantities, is a question for the jury to decide, and the witness could not be called to decide it for them. The witness might be called to give them evidence of facts which would enable them to arrive at a conclusion as to what a well should produce to justify marketing, but a witness cannot be asked the very question that is involved in the litigation; for, if that were so, it would not be necessary to' have a jury.

On page 34, exception 24, substantially the same question is asked, though slightly varied:

“Now what would you say from your experience as to whether a well is producing gas sufficient to justify marketing, when it produces a flame, upon being set afire, eight or ten feet high?”

This was objected to, objection overruled and exception, and the witness answered: “I should say it would”. The same reasoning applies to that question as to the one preceding it.

On page 38 are two exceptions involving the same question:

' “I will ask you to state, from your knowledge and experience, as to whether gas, which, when lighted, produces a flame from eight to ten feet high, constitutes gas in sufficient quantities to justify marketing the same.”

That was objected to, overruled and' exception taken. The witness answered: “Yes, sir.”

A motion was made to strike out the answer, which was overruled, and an exception taken. The same ruling applies to that. We think it was improper.

The next question I will notice is in relation to the charge of the court. Several exceptions are taken to the charge of the court, only one or two of them I need notice, and in doing that I will say that the defendant alleged, among other things, in addition to what I have stated, that there prevailed a custom in existence at the time of making this contract, well known to the parties and people generally, that a person operating under one of these leases, would have the right to use so much of the gas produced from any well as would be necessary to operate that well. There was a denial of that custom in the reply, and upon the subject the court said certain things to the jury very proper to be said, that the burden was upon the defendant to establish it by a fair preponderance of the evidence, and unless he did so establish it,the defense is not maintained.

Proceeding further, the court said:

“In order to make a local custom good, it must appear that it was long continued, without interruption, acquiesced in, reasonable, certain, compulsory and known to the parties to be affected thereby.”

The words “compulsory and known to the parties to be affected thereby,” are excepted to, and we are disposed to think that the court must have been misled in giving that definition, as I do not find any definition that substantially complies with that.

In the 2nd Circuit Court Reports, page 881, is a case in which the second paragraph of the syllabus reads as follows: “To make a local custom good, it must appear that it was long continued, without interruption, acquiesced in, reasonable, certain, compulsory, and known by the parties to be affected thereby;” and I take it, the court took its charge from that sjllabus, but a reading of the opinion in that case shows that the court never said anything like that syllabus.

The court says: ■

“To make local custom good, it must appear that it was long continued, without interruption, acquiesced in, reasonable, certain, and known to the parties to be affected thereby,”

Leaving out the words “compulsory,” and cite the case of the Steamboat Albatross v. Wayne, 16 Ohio, page 517, and this case does substantially, though not quite, support the opinion of the circuit court. It does not give as full a definition as the circuit court did.

The court say:

“A custom once established becomes a law, as to the particular subject to which it relates. And being of this nature, the legal presumption at once obtains that the contract was made in reference to it, because it is in the nature of a law. But to give it this force, notoriety, uniformity, reasonableness, and public acquiescence in it, are requisite.”

Now,in that opinion-there is not a suggestion'that it must b.e known to the'parties, and we do not think it in all cases is necessary. In the case of Lowe v. Lehman, in 15 Ohio St., page 179, the court charged the jury upon the subject of custom. The question there was a contract to lay brick at so much per thousand. There was no dispute as to the price or terms of the contract, but when they came to count the brick, the bricklayers claimed a custom authorizing them to measure the wall on the outside and inside, deducting for all openings in the wall.

The defendants asked the court to instruct the jury:

“That if the usage was generally adopted by the brick-masons as late as 1854, and the defendant was not a member of the trade connected therewith, except as a citizen, he must have actual notice of its existence before he could be bound by it; and that the presumption of such notice might be rebutted by evidence that he did not, in fact, have knowledge of the custom,”

That, the court below refused, and instructed. the jury:

“That in the absence of any custom, the words ‘a thousand brick,’ must be taken in the ordinary sense, and only the actual number laid in the walls must'be allowed for, to be ascertained by actual count, of by some other method, giving the actual number as nearly as possible! But that these words might, by a prevailing usage, acquire a different meaning, and the jury might infer that they were used in that peculiar sense and give effect to them accordingly.That the usage, in order to have such effect, however, must be shown to have been reasonable, certain, uniform, and generally acquiesced in and'understood by the community. That if the usage was ancient, the presumption would be stronger; but, although it might have prevailed only since 18,54, yet, if it had been so general and -universal as to give a peculiar meaning to those words when used in the contract, in the general understanding of the community, and-contracts were made in view of it, the jury might interpret the contract with reference to it, even -though it - appears -that the defendant had no knowledge of such usage.”

To the refusal to charge as requested, and to the charge as given tbe defendant excepted. Tbe first question was upon the admissibility of proof relating to custom, and it was held that the proof was competent; and second,that the court erred in its charge to the jury, and the court say:

“We are not prepared, from any thing disclosed in the record, to say that the charge was erroneous. The court left the whole matter to the jury. If they found the defendant, in fact, ignorant of the custom — and there seems to have been no evidence directly to that effect, or to refute the presumption of his knowledge — the court left it to them to say, whether the custom, though only of recent date, was so general and universal, and so commonly known and acted upon, as to shut out the right to plead ignorance of its existence. Surely there are such customs — local though they be. The nature of this custom is fully shown, but the evidence of its generality and universality was left to the jury, and is not set out in the record. We must assume that the jury found the custom to be such as indicated and required in the charge of the court. If they did, we hold that it is not error for which the plaintiff in error ought to be allowed to reverse the proceeding; that the jury, under the instructions of the court, held him estopped from denying the knowledge of its existence. If a party stupidly shuts his.eyes to what is ‘universally’ known in his community by others,, there could be no safety in allowing him to shelter himself under the plea of ignorance.’’

And the court affirmed the judgment.

In the syllabus of that case it is said:

“It is not error in such case to instruct the jury, that if they find such custom to have been certain, uniform, and generally acquiesced in, in the city where the parties resided, and where they made the contract,they may interpret the contract in the light of the custom, although the custom was of only seven years standing, and although the plaintiff had not actual knowledge of its existence.’’

Now we think the rule laid down by the court is much ■stronger and not as well explained as that by the supreme court on this subject, and that it was error by the court on that subject.

The principal objection which may be found to the charge is the manner in which the court submitted the real question in the case to the jury.

The court said:

“Upon the question for the jury of determining whether this was a well that produced gas sufficient to justify marketing the same, a test would be whether or not the income derived from the gas from the well would be equal to the rental that is stipulated in the contract to be paid for the well, in determining whether or not the well did produce gas sufficient to justify marketing the same,”

That is the only rule which the court gave to the jury as to their determining whether this well did produce gas sufficient to justify marketing. In the balance of the charge, the court say that in order to find for the plaintiff, they must find by a preponderance of the evidence that the well did produce gas in sufficient quantities to justify marketing, and the court also gave some other instructions with reference to the uso of gas. It occurs to us that the jury should have been instructed a little more particularly as to the evidence they were to consider bearing upon the question, and that the rule whether it produced gas sufficient, is not quite enough, Every case must be determined by the facts and circumstances surrounding it. If one well were drilled miles away from any known market for gas, that should be considered. It is well known that gas is an article that you cannot bottle up and load in a wagon and carry to market. It has to be conveyed in other ways, and whether there is a demand, and what it would cost to supply that demand, are elements which should enter into the question of cost to justify marketing — not whether it produced gas enough to pay three hundred dollars a year.

That is not the only question. The cost of marketing is a material element to be considered. It was claimed by the plaintiff, that there were people around there who used gas in stoves, and it would be possible for a man to have gone around and secured people to use this gas, and that there was gas enough to furnish fifteen or twenty stoves. How much would that have cost, and how much time would it have taken to supply the gas and keep an account of it? Was this company boundjto furnish a market for the gas? We think not. Clearly the obligation was not upon the lessee to furnish a market, but he is to take things reasonably, as they existed. If the market is there, he would have no right to waste the gas and allow it to escape, if it was produced in quantities sufficient to justify selling it.

One element is the rental of three hundred dollars; another element, how far would it have to be piped, and what would it cost, and the amount of revenue to be derived from it?

The courtjhaidjjto the jury:

“That the fact that gas from this well was used in connection with the gas from wells on other lands to operate this well and other wells, by means of a central boiler located on other land, does not entitle the plaintiff to recover, and your verdict must be for the defendant, unless it appears that this well produced gas enough to justify marketing the same.’’

Now, that seems to be substantially what the same court said to the jury in^the case of Hankey v. Kramp in 12th Circuit Court Report, page 95, and, as we said in that case, we consider the charge of the court on that subject was right.

Thistbrings us*to the question as to whether this verdict is sustained by the evidence or not. Upon two grounds we think this verdict is not sustained by the evidence. There was some evidence to show that there were two farmers who might have used this gas, but there was no evidence to show how much it would cost to market it. The plaintiff relied upon her right to recover solely upon the evidence that the gas was conveyed into a common pipe and used in operating the wells.

James O. Troup, Attorney for Plaintiff in Error.

James & Bever stock, Attorneys for Defendant in Error.

The court charged the jury:

’ “The use of the gas from the well by the defendant to operate the well itself, even although the boiler under-which the gas was consumed for that purpose be on other lands, does not entitle the plaintiff to a verdict, and if you find that the gas was so used, and there was not produced a sufficient quantity to justify marketing, your verdict must be for the defendant.'’

Upon that subject there was no evidence whatever. There was no evidence upon which the jury could have rightfully passed to determine whether this well produced gas enough to pay'the expense of marketing it.

We think that the evidence failed to establish, as a fact, that this well, produced gas sufficient to justify marketing it in the situation in which the well was.

.In another point this verdict.is not sustained by the evi-' dence. The defendant set up this custom, and six or seven witnesses testified to its existence and continuation-for years, and the fact that it was general and uninterrupted, and no witnesses íd the case disputed it. No witness was called by the plaintiff to dispute it.- The plaintiff herself did not dispute it. She testified that she never heard of any such custom. She did not testify that it did not exist. No one testified that the custom was not in -existence in that community, and had not been so for a number of years. Upon the defense set up in the answer, the evidence was all one way; that the custom existed, and while we are not prepared to say it was not necessary to show that custom, we will say that in this record it was shown, and not contradicted.

For both these reasons we think the verdict was contrary to the evidence, and the case will be remanded for a new trial.


text:
    (Sixth Circuit — Wood Co., O., Circuit Court
    October Term, 1896.)
    Before Haynes, Scribner and King, JJ.
    JAMES G. TAYLOR v. THE PEERLESS REFINING CO.
    [Opinion delivered by Judge Haynes in connection with the above case. ]

      Gas lease — “Utilizing” has same legal effect as “marketing.'’ The use of the word “utilizing,” in a gas lease has the same legal effect as the word “marketing.”

      Oil and gas leases — Although providing for the production of both, the finding of one generally excludes the other. —

    In such cases there are generally two classes of property provided for —one an oil well and the other a gas well, and one generally excludes the other — if o'il is found, the gas is practically gone from the well as far as burning in houses is concerned, though there be enough to be used as fuel under the boiler to operate the well.
   Haynes, J.

This was an action brought upon what is known as an oil and gas lease to recover certain stipulated rentals. The case was very much of the same character as the lease referred to in the case of The Ohio Oil Company v. McCrory, just now decided by Judge King, and I shall not go over the ground again. There is, perhaps, a little difference in the phraseology of this lease in that they use the word “utilizing,” but I don’t think there is any great difference in the legal force of the two papers.

The truth is, and the whole case lies in a nut-shell — ■ that there are two classes of property provided for in these leases. One is an oil well, and the other is a gas well, and it is pretty difficult for them to exist at the same time, and be paying property. That is to say: if oil is found, the gas is pratically gone from the well as far as burning in houses is concerned, though it may be used around the boiler for pumping the wells. In these two classes of property, the general provision of the lease is that if a lessee gets one class, he is to pay a certain rental, usually so much for each gas well; and if he gets the other, so much royalty for each well. In each of these cases, the parties had wells sunk on the premises, and are receiving the royalty right along. In each case they found a little gas, and in this case they used the gas for running the boilers on the premises, but to say in either case that the well was a “gas well” in the general sense, would be a misnomer.

James & Beverstock, Attorneys for Plaintiff.

■Boss & Kinder, Attorneys for Defendant.

When the testimony closed, the court instructed the jury to return a verdict in favor of the defendant, and in doing that, we think the court did just what it ought to have done, and the judgment will be affirmed.


text:
    (First Circuit — Hamilton Co., O., Circuit Court
    Jan’y. Term, 1897.)
    Before Cox, Smith and Swing, JJ.
    ELLA WOHLGEMUTH, et al. v. THE STANDARD DRUG COMPANY, et al.

      Several notes secured by same mortgage — Priority—
    The assignees of notes maturing at different times, and secured by the same mortgage, are entitled to be paid in the order that the notes mature, and in the case of the sale of the property, the proceeds are to be marshalled accordingly, in the absence of any agreement to the contrary. But such an agreement, made before the execution of the written contract, is not binding on the subsequent assignees of the notes who had no knowledge of the same ; and if made after the execution and delivery of'the notes, it will not affect the rights of the assignees who took them either before or after such parol agreement.
    Error to. the Court of Common Pleas of Hamilton county.
   Smith, J.

The controversy in this case is as to the priority of about thirty-four notes, each becoming due at a different time, and the payment of all of which notes was secured by the same chattel mortgage. As stated by Judge Minshall in his opinion in the case of Anderson v. Sharp, 44 Ohio St., 268, and which was concurred in by a majority of the judges of the supreme court who heard the case, “no doubt exists but that between the assignees of notes maturing at different times, and secured by the same mortgage, the holders, in the absence of any agreement to the contrary, are entitled to be paid in the order that the notes mature, and in the case of a sale of the land, the proceeds are to. be marshalled accordingly. — 13 Ohio 240, and 33 Ohio St., 250.”

And in the same case it was held by a majority of the court that where a person holding all of such notes transfers to another person one or more of those last maturing,retaining the others, as between him and the assignee, the latter is entitled to a preference and must be first paid from the proceeds of a mortgage given to secure all of such notes. That it would be inequitable for the assignor, as against bis assignee, to claim priority or even equality with him in the distribution of the proceeds of the mortgaged property, if not sufficient to pay all of them.

In this case the evidence brought into the bill of exceptions, does not show the time when any of these notes were assigned by the payee and mortgagee to any of the persons now holding the same. From all that appears, they may have been so assigned at the same moment, or those first maturing may have been first assigned. In either event, in the absence of any contract between the holders and the assignor, as to the order of payment, it would seem that the rule first stated would apply,and the notes would be entitled to payment in the order of their maturity. No such contract was proved in this case, and the decree of the court was, that the notes should be paid in the order of their maturity. — -and unless there was some other error in the action of the court, we suppose the judgment and decree in this respect were right.

‘ It is urged however, that the court erred in its ruling as to the admission of evidence at the trial. It was admitted at the trial that the various parties held the notes claimed by them, secured by the mortgage, and the dates, amounts and time of payment of each, and that all of them became the owners of their several notes before maturity and for value. The plaintiffs in error then offered Mrs. Wohlgemuth, the mortgagee and payee of the notes, and her husband,to show that on the day the mortgage was executed at Mr. Werner’s office, and the agreement for the purchase of the drug store for which the note's were given, was made, and when she, her husband, Steinecke, the mortgagor, and Mr. Werner were present, it was agreed between the mortgagor and the mortgagee, that the notes were to be paid equally and ratably out of the mortgaged property, and one note was to be as good as the others under the security. This evidence was objected to by counsel for the defendants in error, on the ground that it was incompetent, irrelevant and immaterial, as the object was to vary, alter- or contradict the terms of the written contract or the chattel mortgage, in question. But the court held that unless the defendants could show that the plaintiff had knowledge of this alleged agreement, it was not competent, and no evidence having been offered tending to show this, the objection to the evidence was sustained, and exception duly taken.

The question thus raised is, whether such evidence so offered was competent in any view.

It does not appear from the question or from the bill of exceptions, whether it was proposed to show that the alleged agreement was made between the mortgagor and the mortgagee, before or after the execution of the notes and mortgage, or before or after their delivery to the mortgagee, or whether there was any consideration therefor. If there was such a. valid, verbal, contract, before the execution and delivery thereof, the question would then arise whether it was incompetent as tending by parol to alter, vary or contradict the terms of the written contract. If the mortgage itself had contained a stipulation as to the order in which the notes were to be paid, and it was proposed to prove a prior oral agreement different therefrom, it would seem clear that it could not be done. It seems however, that it is admissible to prove, “the existence of any separate oral agreement, as to any matter as to which a document is silent, and which is not inconsistent with its terms, if from the circum-. stances of the-case the court infers that the parties did not intend the document to be a complete and final statement of the whole of the transaction between them.” Stephtns’ Digest of the Law of Evidence, art. 90, sub-division 2. As the legal effect of the contract as reduced to writing, in the absence of any valid agreement or arrangement between the holders of the notes, would be to make the notes payable from the proceeds of the mortgaged property in the order of their maturity, there is reason to believe that to show a' parol agreement made between the mortgagor and mortgagee before the execution of the written contract, would tend to alter or vary the terms of the written contract, and therefore, that parol evidence of such contract would not be admissible. But as the views of the members of the court are not exactly in accord upon this point, it is not decided.. But conceding that this alleged parol agreement was before the execution of the written contract, is it binding upon 'thfe subsequent assignees of the notes, who had no knowledge of any such parol arrangement, by virtue of the assignment to them of the notes, and who were relying on the rights given to them by the written contract? We are of the opinion that it is not — and if the alleged agreement was made after the execution and delivery of the notes and mortgage, it is difficult to see how it could affect the holders of the notes who took them by assignment, it may be before such alleged agreement or afterwards, for it is not shown by the bill when any of the notes were assigned.

Ernest Behm and Otto Pfleger, Attorneys for Plaintiff in Error.

Boyce & Boyd, Attorneys for Defendants in Error.

Under the circumstances disclosed, we are not able to say that the rulings of the court on this point were erroneous and prejudicial, and the judgment of the court will therefore be affirmed.

Judge Swing, while thinking the evidence offered was competent, is of the opinion that under the principles announced by the supreme court in' the case of Kernohan v. Manns, 53 Ohio St., 119, the refusal to receive it was not prejudicial to plaintiffs in error.


author: Eeazijbr, J.

text:
    (Seventh Circuit, Ashtabula Co., O. Circuit Court,
    March Term, 1895.)
    Before Woodbury, Laubie and Frazier, JJ.
    THE LAKE SHORE & MICHIGAN SOUTHERN RAILWAY COMPANY v. JAMES E. ALLEN.

      Right of sheriff to ride on freight trains — Sec.3375a R. S., construed—

    1. Section 3875a, Revised Statutes of Ohio, as amended April 13, 1892 (89 Ohio Laws, 276), is constitutional.
    2. A sheriff or his deputy is permitted thereby to ride on trains designated by the statute, when in the discharge of his official ■ duties, although he has no prisoner in charge.
    3. The section applies only to trains stopping regularly at the points or stations from, and to which the sheriff demands to be carried.
    4. Such statute is to be strictly construed, and it is error to charge the jury, that a sheriff in the discharge of his official duty is entitled to ride on a freight train, which had stopped at a station at which it was scheduled to stop and did not stop on other days, and that a refusal by the conductor to carry him on such train will authorize a verdict against the company.

      , Error to the Court of Common. Pleas of Ashtabula ■county.
   Eeazijbr, J.

The action below was brought under favor of section 3375a,of the Revised Statutes,as amended Apiri 13,1892,89 Ohio Laws,page 276. The statute reads as follows: “Physicians in the discharge of their professional duties,and sheriffs and deputy sheriffs in the performance of their official duties, shall be permitted tó ride at their own risk, and take a prisoner or prisoners upon freight trains, between stations where such trains stop, paying therefor the regular passenger fare.” This statute, as originally passed, applied to phyicians in the discharge of their professional duties. The amendment included sheriffs and deputy sheriffs in the performance of their official duties. The questions presented are largely as to the construction of ■the statute. The plaintiff, in his petition,avers that he was and still is the sheriff of Ashtabula county, and that he was, at the time, in the discharge of his official duties.

After describing the train by its number, he avers that it stopped regularly, as well as on said day, both at Jefferson and Ashtabula. This is the averment of the petition. I refer to this, because evidently counsel for the plaintiff, in the preparation of the petition, gave that construction to the statute. The language of the petition being, “that it stopped regularly as well as on said day, both at Jefferson and Ashtaubla,” let me again read that portion ■ of the statute “upon freight trains between station where such trains stop.’’

He avers that he had a ticket for which he paid the regular fare: that he was compelled by threats and menaces to leave the train. In the petition it is alleged that “said coach and train was fully equipped and in every way prepared to carry passengers, and could have carried plaintiff therein and thereon, and said train stopped regularly as well as on said day,' both at Jefferson and- Ashtabula. That while said freight tram was so standing in front of said depot, and was about to leave for Ashtabula, as aforesaid, plaintiff, as such sheriff, desiring to go to Oonneaut, upon his official duties over the road and route aforesaid, the same being the best and only practical route, boarded said train and took a seat in said coach as a passenger, and thereupon offered and tendered the conductor in charge of the train a ticket theretofore issued to him by defendant, at its regular ticket office at Jefferson, Ohio, and which was a good and regular first class ticket, and entitled the plaintiff, as such sheriff, to ride in said coach, and on said train from Jefferson to Ashtabula, or upon any other train on said road,, between said places. That plaintiff offered to pay .the conductor the regular fare.

Then he further avers, by way of breach: “And plaintiff further says that .notwithstanding the premises, and while said plaintiff was so seated in said coach, and after said train had started out and was in motion, one French, who is the ticket agent of defendants at said Jefferson, with one of the clerks or servants employed by - defendants in and about said station, and one James McHale, the conductor .of said train, came into said coach or caboose where plaintiff was so seated for the purpose aforesaid, and thereupon commanded him (said plaintiff) to leave said train, and said conductor, and said French, and his clerk, then and there in a menacing manner threatened to forcibly eject him (said plaintiff) from said- train, and did then and there abuse and ill-treat him, and then and there compelled him to leave said train, therein and thereby inflicting upon the plaintiff great personal insult and injury, and greatly delaying him in the transaction of his business.

■ To this petition the defendant answered, admitting that it was, at the date mentioned in the petition and still is, a corporation; admits that the plaintiff was, and is, the sheriff of Ashtabula county, Ohio; admits that at the daté mentioned, the plaintiff having before that time purchased a ticket from Jefferson to Ashtabula, took his seat in the caboose attached to the second section of defendant’s freight train, No. 17. “That as to whether said plaintiff had in his possession the writs mentioned in the petition, defendant has no knowledge, except as derived from said petition and it therefore denies the same, and demands proof thereof, and said defendant denies each and every other allegation contained in said petition, not therein expressly admitted or denied.

Before any evidence was offered, the defendant, the railway company, objected to the introduction of any evidence, giving as a reason therefor, that the act of the legislature was unconstitutional. I do not know that counsel now insist upon the objection; but it is sufficient to say we think, under the rules established by our courts, as to the right to legislate and exercise control over railroads, the act is constitutional.

We are, however, asked to interpret this statute in another regard. It is insisted by the plaintiff in error that the statute should be construed to read or mean that the sheriff can only ride when he is in the discharge of his official duty, and has a prisoner in his charge. That is, that he is not authorized to ride upon the freight train at other times than when he is in the discharge of his official duties, and has the custody of, and takes with him a prisoner. I have somewhat amplified the claim made, in order to enforce our view of the case. We hold that the statute permits him to ride when he is in the discharge of his official duties; whether Le has a prisoner in his charge or not.

• When we look at the reason, both as to the physicians and as to the ministerial officer of the court, their professional and ministerial or official duties may require dispatch in business, and there are frequently freight trains, scheduled to run upon railroads, and it will facilitate the physician in his professional duties, or the sheriff in the discharge of his official duties, to take those trains, and they may count upon them, if these trains stop habitually, or, in the language of the petition, “upon other days as well as that day.” We hold, in short, that the statute applies to trains stopping regulalry, or on other days as well as this day, between the points where the sheriff or physician is asking or demanding passage, and does not apply to trains that stop by accident or by special order for passing other trains, or otherwise, at a station at which they are not accustomed to stop.

This brings us to the charge of the court. The court says:

. “The act of the legislature, which we have copied into these instructions, permits a sheriff, while engaged in the discharge of his official duties, to ride upon freight trains between stations where such freight trains stop. We hold and instruct you that if section two of said freight train No. 17 had stopped at Jefferson, and was standing upon the track before the plaintiff entered the caboose, that in that event, while the plaintiff’s claim in this case may not fall within the exact letter of the statute, yet we hold that it comes within the spirit of the statute; although you should find that Jefferson was not a regular stopping place for that .train. ’’

Statutes in derogation of the common law, or natural rights, are to be construed strictly, and not to be extended by implication.

This is a statute in derogation of the rights of the company, independent of the statute, or at common law, to designate what trains shall be devoted to the carriage of passengers, and what to the exclusive carriage of freight. While counsel for the plaintiff below put in his petition what he regarded as necessary for a recovery, we think the court below erred in the construction of the statute, not only in this, but in that portion of the succeeding paragraph to which exception is taken. Probably the whole of this is not excepted to, but the exception is in reference to part of it, and we can not get the sense unless we read its connection:

“On the other hand in this case, we instruct you, that if you find that it has been proven, that said freight train, section two of No 17, had stopped at Jefferson station and was then standing there, upon the track, and you find that it has been proven that the plaintiff entered said caboose car while it was standing upon said track, and that he was then engaged in the performance of his official duties, which required him to pass over the defendant’s line of road, from Jefferson to Ashtabula, on his way 'to Conneaut, for the service of a summons or other papers, which he then had with him for that purpose: that he then made known to the conductor that he was such sheriff, and was then engaged in the discharge of his official duties, which required him to pass over said road from Jefferson to Ashtabula — then we say to you that he had the right, as such sheriff, in the discharge of the duties of his office, to enter said car, upon the payment of the regular fare from Jefferson to Ashtabula, and to require the defendant to carry him from Jefferson to Ashtabula, upon said train, and if you find that it has been so proven that he thus informed the conductor, and the conductor, after he had been so informed by the plaintiff, refused to carry him to Ashtabula and allow him to ride upon said train, but then and there ordered the plaintiff to leave said car, and the plaintiff, in pursuance of said order of the conductor, did leave said car to avoid being forcibly expelled therefrom, then we say to you, you would be authorized to return a verdict in favor of the plaintiff.”

The fourth exception is, “to the construction given to the act of the legislature by the court.” Fifth, To the instructions given that the plaintiff would be entitled to ride upon the train if Jefferson was not a regular stopping place of the train.

Theodore Hall, for Plaintiff in Error.

T. H. Hoyt and Charles Laioyer, Jr., for Defendant in Error.

Sixth. To the instructions beginning with the words, “He had a right to enter said car,-’ and so forth, to the entire proposition. These exceptions cover substantially all that portion of the charge I have read, and because of this construction of the act by the court of common pleas, we hold there is error in that portion of the charge.

Coming to the exception that the damages are excessive. It is charged in this case that he was insulted and put off in an insolent manner. Without referring to the evidence for the reasons stated in the case of The Lake Shore and Michigan Southern Railway Company v. Charles Teed, just announced by me, this exception is overruled.

There was, at the time, in forcea rule of the company, forbidding the carrying of passengers upon freight trains without a special permit from the proper officers of the company superior to the conductor and ticket agent, and in refusing to carry the sheriff on this train, they were enforcing such rule; and the ticket agent applied for, and received an order permitting the defendant in error to ride to Ashtabula upon a freight train of the company, passing over the company’s road a short time thereafter, and upon which he did during the same afternoon ride from Jefferson to Ashtabula.

For the reason that we are of opinion that the court of common pleas erred in the construction of the statute, for this reason, and for this alone, we reverse the judgment and remand the case to the common pleas court for further proceedings. The record will show we find no other errors.