text:
    RIPARIAN OWNERSHIP — BOUNDARIES.
    [Lucas (6th) Circuit Court,
    February 14, 1902.]
    Haynes, Parker and Hull, JJ.
    Abram M. Chesbrough v. Annie M. Head.
    1. Riparian Rights Pass Without Being Included in Lines.
    The title to land under the water of a navigable stream abutting a platted lot passes, to the center of the stream, with a conveyance of the lot. Unless excluded by apt and proper words, riparian rights pass without measurement of the bed of the stream and without payment therefor by the acre or otherwise, except as included in the price paid for the land on shore.

      2. Meander Line not a Boundary Line.
    The meander lines run in surveying lines bordering upon navigable rivers, are not run as boundaries, but for the purpose of defining the sinuosities of the banks of the stream and ascertaining the quantity of land conveyed.
    Appeal.
    C. W. Everett, for the plaintiff.
    King & Tracey, for the defendant.
   HULL, J.

This case was tried in this court on appeal from the common pleas court and is an action to quiet title; the plaintiff claiming to be the owner and in actual possession of “ All that part of the bed of the Mau-mee river lying between the surveyed portion of lots thirteen (18), fourteen (14), fifteen (15), and sixteen (16), of Ironville on the southeast and the center of the channel of the Maumee river on the northwest, and being a part of the Wasayon tract, in town nine (9), south, range eight (8) east, Michigan meridian in Lucas county, Ohio.”

As appears from this description, the land in question is a portion of the bed of the Maumee river, and the whole of it is usually covered by water and lies opposite the surveyed portions of the lots mentioned.

The question in the case is, whether the deed which conveyed to the plaintiff said lots 13, 14, 15 and 16 of Ironville, conveyed with it the right and title to the land under the water, subject to the public right of navigation, or whether the deed only conveyed the surveyed portions of those lots as described and indicated by the lines on the plat of the village of Ironville, which plat was made and recorded by the proprietor, David Weaver, in January, 1870.

Weaver mortgaged these lots to Valentine Ketcham ; they were sold on foreclosure and bid in by Mr. Ketcham and he afterwards made a conveyance to plaintiff of those lots, describing them by numbers, according to the plat. This occurred during the lifetime of Weaver. ' Subsequent to this deed by Ketcham to Chesbrough, Weaver made a deed of the bed of the river, opposite these lots, to the defendant. After Weaver’s death his heirs made a deed to the plaintiff of this property; but that was subsequent to this deed, so that, after all, it comes back to the question of whether by the deed from Ketcham to plaintiff of these lots, by number, the title to this land under the water, so far as it is susceptible of private ownership, was conveyed to the plaintiff; whether the whole riparian rights appurtenant to and incident to the land bounding and abutting upon the river at the foot of these lots was conveyed by that deed, or not.

A case involving a similar question, Annie M. Head v. Abram Chesbrough, the same parties, some years ago went to the Supreme Court from this county. The land in that case was that lying in front of the surveyed portions of lots 11 and 12, immediately adjoining the lots in question here. That case was decided in favor of Chesbrough in the circuit court and affirmed by the Supreme Court without report. The case below was fully reported and the decision of Judge Pugsley of the common pleas court is found in Head v. Chesbrough 6 Dec. 494 (4 N. P. 73), and the decision of the circuit court in Head v. Chesbrough, 7 Cirt. Dec. 176 (18 R. 354). It is claimed that the facts in this case are somewhat different from those in that case.

The principle of law that a conveyance ot lots bounding and abut" ting upon a navigable stream carries with it the riparian rights and the title to the land under the water, unless there are express words in the conveyance excluding from the conveyance such rights, seems to be well established by all the authorities in this state.

It is not my purpose in this opinion to. review these authorities at great length. They were fully discussed in the other case, in the briefs of counsel and in the opinion of Judge Pugsley.

The case where this doctrine was first clearly announced1 in this state is that of Gavit v. Chambers, 3 Ohio 495, 496, where the syllabus says:

“ In Ohio, owners of lands situate on the banks of navigable streams running through the state, are also owners of the beds of the rivers to the middle of the stream, as at common law.”

This was a case that went up from Sandusky county and involved the rights of abutting owners in the land under the waters of Sandusky river. The court say, at page 498 of the opinion:

“ We do not believe that it was the intention of the United States to reserve an interest in the bed, banks, or water of the rivers in the state, other than the use for navigation to the public, which is distinctly in the nature of an easement, and all grants of land upon such waters, we hold to have been made subject to the rule of the common law, which, in this case, is the plain rule of common sense. And it is this: He who owns the lands upon both banks, owns the entire river, subject only to the easement of navigation, and he who owns the land upon one bank, only, owns to the middle of the river, subject to the same easement. This is the rule recognized not only in England, but in our sister states.”

This case has never been overruled or criticised, but has been cited with approval by the Supreme Court in two or three subsequent decisions.

Day v. Railroad Co., 44 Ohio St. 406 [7 N. E. Rep. 528], is in point and cites with approval the case of Gavit v. Chambers, supra. The first paragraph of the syllabus is:

“ A general deed of premises lying upon the bank of a river, in which is constructed a canal, conveys the grantor’s rights to the center of the stream bounding the property. And to reserve or exclude from the grant any such rights, the conveyance should contain proper words of such reservation or exclusion.”

On pages 419 and 420 of the opinion several of the Ohio cases are considered and quoted from, and among them Gavit v. Chambers, supra, and quoting from Lamb v. Rickets, 11 Ohio 311, as follows:

“ Where the owner of land is bounded by a stream, he owns to the center of the stream, subject to the easement of navigation.”

In the comparatively recent case of Railroad Co. v. Platt, 53 Ohio St. 254 [41 N. E. Rep. 243], this question was considered by the Supreme Court. The facts in that case were somewhat different from the case here, that being an action in ejectment. The law, as laid down by the syllabus of the case, is this:

“ A conveyance of lands situated upon a navigable stream, the description being by courses and distances from a fixed monument and establishing a boundary line coincident with the line of navigation, conveys the grantor’s title as far as the central thread of the stream.”

And on page 266 of the opinion, the court, through Judge Shauck, . say:

“ These considerations would seem to justify the presumption that a grant of this character is to the central thread of the stream unless apt terms are employed to limit it.
“And such appears to be the settled view of the courts of the country.
“ To the application of this doctrine it is quite immaterial whether the stream be named as a boundary of the lands granted or there be a description by courses and distances from a fixed monument whereby a line is established coincident with the stream. The doctrine regards the substance of the grant and not its form.”

Counsel for defendant cite as an authority in.this case and rely upon Lembeck v. Nye, 47 Ohio St. 336 [24 N. E. Rep. 686 ; 8 L. R. A. 578 ; 21 Am. St. Rep. 828]. In our judgment, however, this case is not applicable to the case at bar. The water in question in that case was the water of a small non-navigable lake in Medina county, and the rule as to such waters is different from that in the case of a navigable stream like the Maumee river. The first paragraph of the syllabus in that case is as follows:

“ A non-navigable inland lake is the subject of private ownership; and where it is so owned, neither the public, nor an owner of adjacent lands, whose title extends only to the margin thereof, have a right to boat upon, or take fish from its waters.”

Judge Bradbury delivered the opinion, and discusses the difficulty of applying the rule relating to navigable streams to such a body of water as a small inland lake.

Judge Shauck, in Railroad Co. v. Platt, 53 Ohio St. 254, at page 268 [41 N. E. Rep. 243], of the opinion, refers to the case of Lembeck v. Nye, supra, as follows:

‘ ‘ The views expressed in Lembeck v. Nye, 47 Ohio St. 336, were not intended to have, and cannot have, any application to a case of this character. The lands there in controversy lay under water that was not navigable. By the clear terms of the syllabus the case was limited to lands thus situated; and in the principal opinion prominence is given to the consideration that the lake there in controversy was susceptible of private ownership, and the views here expressed were recognized as controlling in cases of navigable streams.”

So that it appears both from the syllabus of Lembeck v. Nye, supra, and from the expression of Judge Shauck in Railroad Co. v. Platt, supra, that the law as laid down in Lembeck v. Nye, supra, was limited and intended to be limited to lands bounding upon non-navigable inland lakes.

The plat in this case shows a line not exactly coincident with the water line of the river as shown upon the plat, the surveyor running the line near the water line, according to the evidence, from three to five feet from the water line at the time the survey was made, this' line running from corner to corner of the lots practically, but not exactly, the line angling with the curves of the river and not following the sinuous line of the water itself, or the “ sinuosities of the river,” as some authorities express it,’ but turning at angles to correspond as near as possible to the curves of the river and so as to leave a strip of from three to five feet between the line and the water line of the river. The lots were sold by numbers according to the plat, and it is argued by defendant that no more land would be conveyed than that contained within the line of the lots as shown by the plat and that the title conveyed, therefore, would stop with the lines run by the surveyor a short distance from the water line.

We find, however, from the evidence, that this line shown upon the plat near the water line was not intended as a boundary line of the lots, but what is known as a meandering line run by the surveyor as near as practicable or convenient, coincident with the water line, and that it is not to be regarded as the bounding line of the lots; that the lots were intended to be and in fact do bound and abut upon the Maumee river.

As to the effect of this meandering line, June v. Purcell, 36 Ohio St. 396, is in point, where the court say, on page 407:

“ That the meander lines run in surveying portions of the public lands bordering upon navigable rivers, are run, not as boundaries of the tract, but as a means of ascertaining the quantity of land to be paid for by the purchaser, was decided in Railroad Co. v. Schurmier, supra. The meander line, therefore, in the present instance, not being a boundary line, the only boundary line was the river; and the question is, when the boundary line of a riparian owner is thus described, where .is it to be located ? Gavit v. Chambers answers, at the middle of the stream, as at common law.

This case is also a Sandusky county case, and the river was the San-dusky river. The case cited there is a decision of the Supreme Court of the United States found in Railroad Co. v. Schurmier, 74 U. S. (7 Wall.), 272, the court say, in the first paragraph of the syllabus :

“ The meander lines run in surveying fractional portions of the public lands bordering upon navigable rivers, are run, not as boundaries of the tract, but for the purpose of defining the sinuosities of the banks of the stream, and as the means of ascertaining the quantity of the land in the fraction, and which is to be paid for by the purchaser.”

The amount of land in each one of these lots was ascertained by the surveyor, and that is indicated and marked upon the plat and the meandering line, in our judgment, was intended to mark what was to be included in the measurement of the lot. The land under the water of a navigable stream is not included in the measurement of the abutting lot, but title to it passes to the center of the stream with the conveyance of the lot, and it is not necessary to include it in the measurement. Unless excluded by apt and proper words, the riparian rights will pass without any measurement of the bed of the stream and without any payment for it' by the acre or otherwise, except as it is included in the price paid for the land on the shore.

It appears from this plat, and it is one of the agreed facts in the case, that by the making of it and the recording of it, a street, called Tee street, was dedicated, and, according to the plat, the side lines of the street run down to the river between lot No. 12 and lot No. 13 of this tract of land, and this inner line of the surveyor runs across the street as well as across the lots, and the strip of land left there is as wide, apparently, as that across any one of the lots.

We think it is very clear that Mr. Weaver did not intend to stop this street by the line inside of the water line of the river; it clearly was his intention to run this street to the river, and the surveyor did not intend, by running this line across the street, to reserve in Weaver a strip of land three or four feet in width across the street and separate it from the water of the river; the same line is run across the government lighthouse reservation in lots 200 and 201; where there is no such line, the acreage of the lots is not given upon this plat.

We therefore hold that it was the intention of Mr. Weaver to bound and abut these lots upon the river, and that they do in fact bound and abut upon the river and are to be so regarded and the rights of these parties are to be determined according to that, and that being our holding, the rights of the parties are clearly and fully established by the law of the land. The deed from Mr. Ketcham to the plaintiff conveyed the whole of these lots, which we hold abutted upon the river, and there being in the deed no exclusion, no reservation of riparian rights, they were carried by that conveyance to the plaintiff. >

This rule applies where the lots are conveyed by number as well as where they are conveyed by metes and bounds. This is so held in Watson v. Peters, 26 Mich. 508. The opinion in the case is by Judge Cooley, and the court say in the syllabus : ■

“ The grant of a city lot bounded on a navigable stream, with the water as a boundary, in the absence of any express reservation, conveys to the grantee the land under the water to the center of the stream ; and the fact that the grantor before conveying, platted the lands into lots and blocks, with distinct lines and distances marking the boundaries of each lot, and with the water boundary of the river lots indicated by a line representing the shore line, and conveyed by such plat, will not limit the grant to such sho: e line, or operate to reserve to him proprietary rights in front of the lots conveyed.
“ The privileges and conveniences which appertain to the shore of navigable streams, constitute a part, and often the principal part, of the value of the grant, and this is especially true of city lots, and therefore, the reason of the rule which infers an intent to convey the land under the water is, in the case of such lots, most apparent and forcible.”

We are unable to see any appreciable or material difference between the facts of this case and those of the former case of Head v. Chesbrough, supra, which went to the Supreme Court. There is this difference pointed out, as. shown by the finding of facts in the other case; upon the three adjoining lots in that case docks had been built and extended out into the river, and the court also found in that, case that che purchase price was so great that it would be presumed that the purchaser supposed he was acquiring with the main land the riparian rights and the right to the land under the water of the river. The briefs of counsel, however, which were filed in the Supreme Court did not discuss this, but the case was presented to the court upon the general principles of law affecting and controlling the rights of the owners of lands bounding and abutting upon a navigable stream, and authorities along that line were cited by counsel at considerable length upon both sides, and the case was affirmed without report.

These two considerations referred to are mentioned in the opinion delivered by Judge King in the circuit court in Head v. Chesbrough, supra, but the syllabus of the case bases the decision upon the general principles of law and is as follows :

“ Conveyance of platted lots which are situated upon the banks of a navigable stream, no part of the bed of the stream being platted, includes all the riparian rights of the grantor in front of said lots to the center of the stream, although such stream is not mentioned in the conveyance. To exclude such rights they should be reserved or excepted in the deed.”

And on page 357, Judge King, in rendering the opinion, says :

“ We think the law is well settled that when one party conveys land adjoining a navigable river of the state of Ohio, and the land in fact bounds and abuts upon the water which flows in front of the premises, and conveys by a conveyance which does not except or reserve the land in front of the premises, although they may be marked with boundary lines, that the grantee takes to the center of the navigable stream — to the center of the current.”

The two lots involved in that case are shown upon the same plat and adjoin the lots in question here, and the line run by the surveyor at the end of the lot toward the river, or the end abutting upon the river, appears in front of the two lots in the former case as well as in this case, and we think the questions in that case, as decided by the common pleas and circuit courts and by the Supreme Court, are substantially the same as those involved here.

The decision of Judge Pugsley of the common pleas court in the former case is found in Head v. Chesbrough, 6 Dec. 494 (4 N. P. 73), and contains a full discussion of the rights of riparian owners, citing authorities at length and considering them, and the question is discussed by the judge along general lines and the general principles controlling the rights of the owners of riparian lands are stated, and there is no discussion of and no attention is paid to these two points,— the price which was given for the land and the fact that there was a dock upon the adjoining lots projecting into the river. The syllabus of that case states the law as we understand and hold it to be :

“ A conveyance of platted lots which are situated upon the bank of '& navigable stream, no part of the bed of the stream being platted, includes all the riparian rights of the grantor in front of said lots to the center of the stream, although such stream is not mentioned in the conveyance. To exclude such rights they should be reserved or excepted in the deed.”

Judge King, in delivering the opinion in the circuit court, did not undertake to review the authorities, but they are fully reviewed in Judge Pugsley’s opinion and the decision covers the ground and we cite it as an authority in this case.

The decree, therefore, will be for the plaintiff, quieting his title to this property.


source: Caselaw Access Project

author: MARVIN, J.

license: Public Domain

text:
    CONTRIBUTORY NEGLIGENCE.
    [Cuyahoga (8th) Circuit Court,
    February 10, 1902.]
    Caldwell, Hale and Marvin, JJ.
    Lake Shore & Michigan Southern Railway Co. v. Katherine Landphair, Admx.
    Contributory Negligence Defeating Recovery.
    There can be no recovery for the death of a person who attempted to cross a railroad track, in broad daylight, at a point where there'was an unobstructed view of the track for a mile in the direction from whence the train came, without an exercise of any of the vigilance required by law at such places, and it does not appear that anything could have been done to save such person after he was seen by servants of the railway company, notwithstanding the train may have been running at an unlawful rate of speed and though no bell or whistle was sounded.
    Heard on Error.
    Brewer, Cook & McGowan, for plaintiff in error,
    cited:
    1. Upon the question of contributory negligence. Cleveland, C. C. & I. Ry. v. Elliott, 28 Ohio St. 840 ; Carter v. Reddish, 82 Ohio St. 1, 6; Watson v. Railroad Co., 10 Dec. 454 (8 N. P. 18); B. & O. Ry. v. McPeek, 8 Circ. Dec. 742 (16 R. 87); New York, C. & St. E. Ry. v. Swart-out, 6 Circ. Dec. 768 (14 R. 582,588); Railroad Co. v. Depew, 40 Ohio St. 121,127; Krause v. Morgan, 53 Ohio St. 26, 36, 37, 41, 42 [40 N. E. Rep. 886] ; Wabash Rd. v. Skiles, 64 Ohio St. 458, 470 [60 N. E. Rep. 576]; Cleveland Ter. Ry. v. Marsh, 63 Ohio St. 236, 245 [58 N. E. Rep. 821]; B. & O. S. W. Ry. v. Railway Co., 3 Dec. 687 (3 N. P. 310); Lake Shore & M. S. Ry. v. Duer, 11 Circ. Dec. 761 (21 R. 512) ; Wabash Ry. v. Norway, 4 Circ. Dec. 674 (7 R. 449); Driscoll v. Railway Co., 1 Circ. Dec. 274 (1 R. 498,495); Lake Shore & M. S. Ry. v. Litz, 7 Circ. Dec. 282 (18 R. 653).

      . 2. Nominal damages. ■ Cincinnati Street Railway v. Altemeier, 60 Ohio St. 10, 15 [53 N. E. Rep. 300],
    Hart, Canfield & Callahan, for defendant in error,
   MARVIN, J.

The plaintiff in error owns a railroad which passes through the city of Cleveland in Cuyahoga county, running east and west. Near the west line of the city and within the city limits, there is a place of resort, called Edgewater Park. The tracks'of the railway company run along the south side of this park. In this immediate vicinity, there are public streets beginning on the south side of the right-of-way of said railway company and extending to the south. One of these streets is known as Ramsey street.

It is caimed on the part of the defendant in error, that immediately north of the north end of Ramsey street a crossing of planks, lying between the rails, was laid, and was in existence on June 27, 1899, extending from the north end of Ramsey street to the north line of the right-of-way of the railway company, the same being the south line of said Edgewater Park. That this crossing was a general passageway used extensively by the public, to the knowledge and with the consent of the railway company, for going to and from said park; that on the date last named, the said Peter Daugherty, while somewhere on the right-of-way of the railway company at or near this crossing, was struck by an engine of the railway company, drawing a. passenger train to the east, at about five o’clock in the afternoon, and was instantly killed.

The defendant in error, having been appointed administrator of the estate ot said Daugherty, brought suit against the railway company, charging that the death of her decedent was caused by the wrongful act of the plaintiff in error.

The cause was tried in the court of common pleas resulting in a verdict for five hundred dollars in favor of the administrator; judgment was entered upon this verdict; a motion for a new trial was filed and overruled, and the present proceeding is prosecuted to reverse said judgment. A bill of exceptions is filed, containing all the evidence introduced upon the trial.

The negligence complained of in the petition of the plaintiff below, is that the train, at the time of this accident, was running at a much higher rate of speed than is allowed under an ordinance of the city of Cleveland; that no warning, either by the ringing of a bell, or the sounding of a whistle, was given as the train approached this crossing. That the train was not stopped, or its speed slackened, after said Daugherty was in a place of danger; and that no flagman was at this crossing for the purpose of warning people of on-coming trains.

The railway company admits that Daugherty was killed by reason of being struck by its engine; but denies that it was guilty of any negligence in the premises, and avers that the deceased was himself negligent at the time of the accident; and that but -for his negligence he would not have been struck by the engine.

It is plainly shown by the evidence, that the train at the time of the accident was running at -a rate of speed much greater, several times greater, than was allowed by the city ordinance.

The jury might well have believed, from the evidence, that the crossing at the north end of Ramsey street was so generally used by the public as that the railway company should be held to have recognized it as a licensed crossing. There was no one employed by the railway company at this crossing to warn people of on-coming trains.

We are not prepared to say that the finding by the jury that the whistle was not sounded or the bell not rung in time to have been of any avail to one making use of this crossing, though it is extremely doubtful whether, under the evidence, such is a fact, would have been erroneous. We do not undertake to say that a finding by the jury that Daugherty was killed at this crossing, would have been erroneous, though that is far from being made clear by the evidence.

If he was struck at this crossing, he was thrown or carried a long distance from it, because his dead body, when the train had passed it, was near the foot of Barrett street, which is about four hundred feet east of Ramsey street.

There is no evidence that would justify a finding that, after Daugherty was in a place of danger such as would indicate that he was likely to be struck by the engine, anything could have been done by the engineer to have saved him.

The evidence is clear, that at the time of the accident it was broad daylight; that there is an unobstructed view of the track for a mile to the west of where this accident happened; and that, if Daugherty had exercised any of that vigilance which is required of one to protect himself when in, or about to go in, a place of danger, he must have seen this on-coming train; there was nothing to prevent him from stepping upon either side of the track.

If then, every contention of the defendant in error, as to the negligence of the plaintiff in error, is found to be true, still the judgment of the court of common pleas must be reversed.

To .hold otherwise, would be to say that one is mot required, when in or about to enter into a place.of danger, to exercise that care which our Supreme Court has again and again said he is required to exercise. See Pennsylvania Co. v. Rathgeb, 32 Ohio St. 66; Cleveland, C. C. & I. Ry. Co. v. Elliott, 28 Ohio St. 340, 341; Railroad Co. v. Depew, 40 Ohio St. 121.

The judgment of the court of common pleas is reversed for the evidence clearly shows negligence on the part of the deceased which either caused or directly contributed to the accident.


text:
    BANKRUPTCY — PROPERTY—RECEIVERS.
    [Cuyahoga (8th) Circuit Court,
    February 10, 1902.]
    Caldwell, Hale and Marvin, JJ.
    John Rodgers & Son v. George Forbes and Jacob Schoen, Receiver.
    1. Property Reached by Proceedings in Aid oe Execution Within Bankruptcy Act.
    Under Sec. 67f of the bankrupt act of 1898, property affected by levy, judgment, attachment or other lien within four months of filing a petition in bankruptcy shall be deemed discharged and released therefrom and held to pass to the trustee. Therefore, property discovered by a proceeding in aid of execution under Sec. 5475, Rev. Stat., authorizing the examination of a judgment debtor, and paid into the hands of a receiver within four months of the commencement of bankruptcy proceedings as aforesaid, does not pass to the judgment creditor instituting such proceedings nor give him any lien on, or right to the sáme, superior to that of the trustee in bankruptcy.
    2. Receiver Acts as Oeeicer oe Court — Compensation and Costs.
    A receiver, appointed by a state court to take possession of a fund discovered by a proceeding in aid of execution under Sec. 5475, Rev. Stat., acts as the officer of the court, and is entitled to reasonable compensation for his services and expenses as such and for costs in a proceeding instituted by the trustee in bankruptcy of the same debtor’s estate upon exception to the allowance of the receiver’s claim.
    W. E. Slabaugh., for plaintiffs.
    For defendant, in person.
    Appeal.
   MARVIN, J.

Rodgers & Son had a judgment against George Forbes. Failing to obtain satisfaction of such judgment by execution, they commenced a proceeding on May 6, 1901, before one of the judges of the court of common pleas of this county by filing the proper affidavit with such judge, under Sec. 5475, Rev. Stat., and the judge, thereupon, appointed Jacob H. Schoen, referee, as authorized by Sec. 5477, Rev. Stat.

The referee, upon the examination of a debtor of the judgment-debtor, found and reported to the court, that there was in the hands of such debtor of the judgment-debtor, the sum of $431.54 belonging to such judgment-debtor George Forbes.

Thereupon, on May 9, 1901, the said Jacob H. Schoen was appointed by such judge of the court of common pleas, a receiver to take possession of the sum so found due of the said George Forbes, and this the receiver did.

On May 15,1901, the said George Forbes filed his petition in bankruptcy in the district court of the United States for the northern district of Ohio, and on May 16, 1901, he was duly adjudged a bankrupt by said court; and, on May 27,1901, H. L,. Snyder was duly elected trustee in bankruptcy of the estate of the said George Forbes, and on May 30, 1901, he duly qualified as such trustee.

On June 11,1901, the said receiver made his report to the court of common pleas of this county, showing . the receipt by him of said $431.54, and claiming to be allowed for his services and expenses the sum of $175.

The trustee in bankruptcy filed exceptions to the réport of the receiver and makes the claim that the entire amount which came to the receiver’s hands shall be paid to him. An order having been made in the court of common pleas, an appeal is taken to this court, and we are now called upon to say what the receiver shall do with this money.

On the part of the plaintiff it is urged that it should be applied, first, to the payment of the costs and expenses in connection with the proceedings in aid of execution ; and, next, toward the payment of the plaintiff’s claim.

On the part of the defendant it is said, that it is clear that no part of it can be applied to the payment of the plaintiff’s claim, and, in support of this, we are cited to Sec. 67f of the bankrupt act of 1898,11 O. F. D. 104. This sub-section reads:

“ That all levies, judgments, attachments, or other liens obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment or other lien shall be deemed wholly discharged and released from the the same, and shall pass to the trustee as a part of the estate of the bankrupt, unless the court shall, on due notice, order that the right under such levy, judgment, attachment or other lien shall be preserved for the benefit of the estate; and thereupon the same may pass to and shall be preserved by the trustee for the benefit of the estate as aforesaid.”

It seems clear from this language of the statute, that the plaintiffs cannot hold this fund, or have any part of it applied upon the payment of their claim by reason of any lien created by the proceedings in aid of execution if any such lien ever was created. But, on the part of the plaintiffs, it is said that no lien ever was created in favor of the plaintiffs, but that without any such lien, the plaintiffs should be entitled to have, paid the whole or some .part of this by reason of their diligence in discovering this fund.

It would surely seem an anomaly to hold, that tf these plaintiffs had a lien by virtue of the proceedings in aid of execution, they could nót have any part of this .money paid to them by the receiver ; and, yet to hold that having no lien they may have it so paid. .Surely the rights of one with a lien upon the fund, are not inferior to those of one having no lien upon it. And we hold that no part of the fund is to be paid to the plaintiffs.

We come, then, to consider the .question of whether the receiver may retain out of the fund his proper compensation and expenses. He was acting as the officer of the court in his capacity as referee and also in his capacity as receiver. The funds are now in his hands as such officer of the court. The trustee in bankruptcy can take this money from him only by an order of this court.

It would seem the proper province of this court to pay its officer for his services and expenses, and we find authority for holding that it should so pay, in Cesser Brothers, 5 Am. Bank. Rep., 320. In the decision by the circuit court of appeals of the second circuit, the opinion being delivered by Judge Shipman, the last clause of the syllabus reads:

“ Where certain creditors have by much diligence and litigation obtained a fund for the benefit of all. the other creditors, and they are stayed from proceeding to enforce their judgment against such fund, it is proper to permit them to become parties in the proceedings by the trustee in bankruptcy instituted in the state court to obtain the money in the hands of the receivers belonging to the bankrupt’s estate, and for such creditors to make an application for an allowance to them from said fund as a reasonable compensation for their 'costs, expenses and disbursements in the litigation -in the state court, [and obtain such allowance, if in the opinion*of -the state court it is proper-and within its power, to grant. ” - .

,-In this- case, one Metcalf, a -creditor of the bankrupt,=had brought an action in .the ■ nature of a creditor’s bill against Cesser Brothers who afterward were adjudged bankrupts. By this proceeding a large amount of property belonging to the bankrupts was found to have been transferred by them to others in fraud of the rights of their creditors; and this prbperty was taken possession of by a receiver appointed in the state court. By the adjudication in bankruptcy, it was held that Met-calf was not entitled to receive any thing in payment of his claim, out of these assets, but was remitted to the proof of his cliam in bankruptcy as a creditor like the other creditors.

On page 325, the court, in its opinion, uses this language :

“ Inasmuch as the fund was in the custody of the state court and had been in such custody prior to the institution of the proceedings in bankruptcy, it was proper to make no order in regard to the action of that court, but to direct the trustee in bankruptcy to apply to it for its order upon the receiver to make payment to him.”

Here, in the present case, the trustee 'is here asking for such order of this court.

The court, in the case last quoted from, then holds that the trustee in bankruptcy, coming into a state court, should “ present to that court such considerations and facts as may bear upon an application for an allowance to them (the plaintiffs) from the fund, In the nature of a reasonable compensation for their costs, expenses and disbursements in the litigation which resulted in the defeating of the fraudulent attempts of the bankrupts, in wresting the funds from the hands of the receivers applied for in fraud of creditors and in its preservation for their actual benefit.”

And the court further says, on page 326 :

“ The said appellants (Metcalf Bros. & Co.) are allowed to appear in said court, make an application for an allowance to them from said fund, at a reasonable compensation for their costs, expenses and disbursements in the litigation in the state court, and obtain such allowance if in the opinion of the state court it is proper and within its power to grant.”

No question is made here that the claim made by the receiver of an allowance of $175 is unreasonable; and the order of the court will be, that such receiver out ofthe funds in his hands, pay—

First: The costs in this preceding. ■
Second: That after retaining for expenses of himself and attorneys the sum of $175, he pay the|balanceofsaid sum of $431.54 to the trustee in bankruptcy, H. h. Snyder.


text:
    MASTER AND SERVANT — ASSUMPTION OF RISK.
    [Cuyahoga (8th) Circuit Court,
    February 1, 1902.]
    Caldwell, Hale and Marvin, JJ.
    Mary Johns, Admx., etc. v. Cleveland Cincinnati, Chicago & St. Louis Railway co.
    Assumption op Risk by Servant prom Employer’s Violation op Statute.
    A person in the employ of a railway company and knowing of its failure to block a guard-rail on a trestle in violation of Sec. 3365-18, Rev. Stat., prescribing the duty of railroads in such cases, assumes the risk thereof, and no recovery can be had for his death, by reason of getting his foot caught therein and being run over by a car. (The court inclines to the contra rule laid down in Valley Ry. Co. v. Keegan, 10 O. E. D. 398, but follows Krause v. Morgan, 53 Ohio St. 26, with the statement that “ however hard the doctrine may seem it appears to be the doctrine of the Supreme Court of Ohio.”)
    Heard on Error.
    John 0. Winship, for plaintiff in error.
    E. A. Foote, for defendant in error.
   MARVIN, J.

This is a proceeding in error. The case below was brought by the plaintiff in error to recover for the wrongful death of John Johns who was an employe of the railroad company and who on April 27, 1897, came to his death by being run over by a car of the railroad company. At the conclusion of the plaintiff’s evidence, motion was made to direct a verdict for the defendant, which was sustained, and judgment entered upon such verdict. It is sought here to reverse that judgment.

The railroad company, it is said, was prosecuting its business at the place where the accident occurred, in violation of the statute then in force, Sec. 3865-18, Bates’ Rev. Stat., which reads :

“ That every railroad corporation operating a railroad or part of a railroad in this state, shall on or before the first day of June, 1899, adjust, fill or block, all angles in frogs, switches and crossings on their roads, in all yards, divisional and terminal stations where trains are made up, with the best known sheet steel spring guard or wrought-iron appliances approved by the commissioner of railroads and telegraphs.”

And then provides a penalty for failing to comply with the provisions of the statute.

It is conceded that at the point where this accident occurred, there was a guard-rail and it was not blocked. It is said by the defendant in error, that it was on a bridge; as a matter of fact, it was on a trestle; but, without determining whether such trestle was a bridge or not, we are able to dispose of this case.

It is urged that if the railroad company was carrying on its business in violation of this statute and the injury resulted from the fact of the man Johns being caught between the guard-rail and the other rail, then, in no event, could the railroad company, the defendant, fail to be held responsible; for, it is said, the violation of the statute is such negligence that the employe can not be held to have assumed the risk of such violation even though he knew all about it.

In Valley Ry. Co. v. Keegan, 10 O. F. D. 298 (40 Bull. 167), Judge Taft of the federal circuit court delivers an elaborate opinion, holding that one violating a statute in the prosecution of its business, can not avail himself of his employe assuming the risk that comes from the violation of that statute. Judge Taft makes an argument which, to me, js very satisfactory, but is not so to our Supreme Court which holds directly opposite.

In Krause v. Morgan, 53 Ohio St. 26 [40 N. E. Rep. 886], the second clause of the syllabus reads :

“ One who voluntarily assumes a risk, thereby waives the provisions of a statute made for his protection. And where a statute does not otherwise provide, the rule requiring the plaintiff in an action for negligence, to be free from fault contributing to his injury, is the same, whether the action is brought under a statute or at common law.”

The opinion in this case, by Judge Spear, I will not stop to read. It sustains this proposition: That, although the railroad company is in violation of the statute, still one who is in the employ of the company, and knows all about such violation, must be held to have assumed the risk. However hard that doctrine may seem, it seems to be the doctrine of the Supreme Court of Ohio.

It is said, however, that if he did. assume this risk and his foot was caught, still the evidence was such that it should have been submitted to the jury as to whether the railroad company was negligent.

The examination of the evidence shows to us that there was no negligence on the part of the railroad company unless the negligence was in the not blocking at that point.

The judgment of the lower court is affirmed.


text:
    SERVICE OF SUMMONS — RETURN—EVIDENCE.
    [Cuyahoga (8th) Circuit Court,
    February 10, 1902.]
    Caldwell, Hale and Marvin, JJ.
    Charles H. Parker v. Van Dorn Iron Works.
    1. Proper Service Under Sec. 5044, Rev. Stat.
    A sheriff’s return upon the summons in an action against a corporation that on a day named, “ I served this writ on the within * * * company by delivering a true and certified copy thereof to the treasurer of the company,” naming him; “ the president or other chief officers not found in my county,” shows service in exact conformity with Sec. 5044, Rev. Stat., which prescribes the manner in which service may be had on corporations.
    2. Sheriee’s Return not Conclusive, When.
    Where a judgment is directly attacked for want of service, it is proper, on a motion to vacate the judgment, to receive evidence that service was or was not made, although such evidence be in contradiction of the record. In such cases the sheriff’s return is not conclusive.
    3. Evidence Justifying Vacation oe Judgment.
    The affidavit of the president of a corporation, that he had no knowledge of the pending action, together with the affidavit of the treasurer of the company, upon whom service was claimed to have been made, that he distinctly remembers that no summons was served upon him, as opposed to the sheriff’s return and evidence to the effect that defendant was notified by plaintiff’s attorney that suit would be brought, justify an order vacating the judgment.
    Heard on Error.
    W. H. Polhamus, for plaintiff.
    F. C. Phillips, for defendant.
   MARVIN, J.

The plaintiff here was the plaintiff below. He filed his petition in the court of common pleas against the defendant which is a corporation. His cause of action set out in the petition was for a personal injury which he claimed to have received while in the employ of the corporation and by reason of its negligence. Summons was issued out of that court upon such petition on November 18, 1899. That summons was returned, endorsed by the sheriff, in the following words:

“ On the 14th day of November, 1899, I served this writ on the within named, the Van Dorn Iron Works Company, by delivering a true and certified copy thereof to E. Golden, treasurer of said company; the president or other chief officers not found in my county.”

No motion, demurrer or answer was filed by the defendant to the petition.

The case remained in court until the September term thereof, 1901, when a jury was impanelled. Evidence on the part of the plaintiff was introduced, and a verdict rendered for the plaintiff in the sum of five thousand dollars, and judgment was entered upon this verdict. Eater in the same term a motion was filed by the defendant to vacate this judgment. Upon hearing, this motion was sustained, and a new trial of the case ordered.

The present proceeding is brought to set aside the order vacating the judgment; the grounds set out in the motion to vacate are: that the defendant had no knowledge, until after the trial of the cause, that such action had been commenced, and that there was never any service of summons made upon the defendant, and that no officer, agent or attorney of the defendant ever had notice or knowledge that it was claimed that any summons had been served on the defendant.

On the part of the plaintiff here, it is urged that the return of the sheriff upon the summons is conclusive of the fact that it was served upon the treasurer oí the company, and that neither the president nor other chief officer of the company was in the county. This return shows a' service in exact conformity with the provisions of Sec. 5044, Rev. Stat., which provides:

“ A summons against a corporation may be served upon the president, mayor, chairman or president of the board of directors or trustees, or other chief officers ; or, if its chief officer be not found in the county, upon its cashier, treasurer, secretary, clerk or managing agent.” .* * *

That this return, however, is not conclusive, seems to be settled by the holding of the Supreme Court in Kingsborough v. Tousley, 56 Ohio St. 450 [47 N. E. Rep. 541]. The first clause of the syllabus reads:

“ In an action on a personal judgment whether rendered by a court of this state or elsewhere, it is competent to plead and prove in defense, though it be in contradiction of the record, that the defendant was not served with process, nor jurisdiction of his person otherwise obtained by the court rendering the judgment.”

This was a suit brought in the court of common pleas by Tousley on a judgment recovered by him against Kingsborough, before a justice of the peace of Cuyahoga county. An answer was filed by Kings-borough averring that when the action before the justice of the peace was commenced, and during its pendency, his domicile and residence was in the state of Illinois and had been for a long time before that, and so continued to be for a long period thereafter, during which time he was not within the state of Ohio, and that no summons was served on him, nor other notice given him, of the commencement or pendency of the suit.

Issue was joined upon this answer, and evidence was received in support of the allegations of the answer; but at the conclusion of this evidence, the court sustained an objection thereto, and held, and so decided, that these allegations were not sufficient to constitute a defense to the matters and things set forth in the petition.

On page 456, Judge Williams, in the opinion, uses this language: “ For while there is some conflict of the decisions as to whether, where there is a presumption of service and jurisdiction, or where these appear on the face of the record, it can be be shown in a collateral proceeding that in fact no service was had, the authorities are substantially uniform to the effect that when the judgment is directly attacked for want of jurisdiction, such want of service and jurisdiction may be shown though it be in contradiction of the record.

“ But here again the authorities differ as to what constitutes an attack of that nature. It is conceded that it includes proceedings in error, motions to vacate or modify the judgment, and that in some cases' it may be made by original action, as was formerly done by bill in chancery to correct or set aside the judgment.”

There would seem to be no doubt from this that the return of the sheriff in the present case was not conclusive. It comes within the class which Judge Williams says it is conceded that evidence may be received to contradict the return, for this was a motion to vacate the judgment. It was not error, then, for the court of common pleas to receive evidence that the return of the sheriff was not true.

But it is said that the evidence did not justify the court in holding that the return of the sheriff was incorrect. We' have before us a bill of exceptions containing all the evidence upon which the court acted. This evidence was all embodied in affidavits; among them, is the affidavit of T. Golden, the man upon whom the return shows the service was made; in this affidavit, he, among other things, says that he distinctly remembers that no summons in this action was ever served on him personally. He gives some reasons why he is sure that the summons was not served upon him, but these do not negative his positive assertion already mentioned.

The affidavit of the president of the company is filed to the effect that he had no knowledge of the pendency of the action, and that it would have been his duty to have looked to this litigation if it had come to his notice.

Evidence was introduced on the part of the plaintiff showing that the defendant had been notified by the plaintiff’s attorney that suit would be brought, but surely this would not take the place of the service of a summons.

Without saying -whether the court would have been justified in vacating the judgment without the affidavit of Golden, we .are clearly of the opinion that no error was committed in the making of such order to . vacate, and the judgment is affirmed.


author: PARKER, J.

text:
    CONTRACTS — GUARANTY.
    [Lucas (6th) Circuit Court,
    February 7, 1902.]
    Haynes, Parker and Hull, JJ.
    National Bank of Commerce v. Frank W. Garn et al.
    1. Rule of Construction of Contracts of Guaranty.
    A contract of guaranty like any other contract will be given that construction and effect which best accords with the intention of the parties as manifested by the terms thereof, considered in connection with the subject matter to which it relates, and the circumstances accompanying the transaction.
    2. Should Include Obligation Reasonably Embraced — No Extension.
    Guarantors should be held to every obligation reasonably and fairly embraced within their contracts, but the guaranty should not be strained beyond its obvious meaning for the purpose of enlarging the liability of guarantors.
    3. Assumption Against Continuing Guaranty.
    Unless the contract of guaranty admits of no other construction than that it is a continuing guaranty, the presumption is that it is not so intended.
    4. Rule as to Consideration of Subsequent Circumstances.
    Subsequent transactions not amounting to a modification of the contract, and not part of the concomitant circumstances, can not be considered as a part of the circumstances under consideration in formulating the terms of the contract, and hence cannot be looked to for the purpose of ascertaining the sense in which or the intent with which such terms were used; but subsequent transactions under or in pursuance of the contract, or with the contract in view, may be looked to for the purpose of discerning the interpretation the parties have put upon its doubtful provisions.
    6. Guaranty Restricted to First Loan.
    A guaranty by stockholders individually for the benefit of a corporation in these words: “We * * * hereby jointly and severally guarantee to you the payment of any and all sums of money that may be loaned to you to * * *; providing said loan shall not exceed in the aggregate $¡3,000,” is not a continuing guaranty, but is restricted to the first $3,000 loaned.
    6. Acts of Estoppel — Do not Extend Guaranty.
    While such guarantors by soliciting further loans for the corporation may have estopped themselves from claiming to have been totally relieved in consequence of credit having been given beyond the sum named, such acts do not of themselves extend the terms of the original guaranty to cover the balances due upon credits given beyond the amount named.
    7. Payments Upon Independent Loans.
    A corporation, notwithstanding the execution of a guaranty to a certain bank to pay any and all loans made by it up to a stipulated amount, has the right to make other loans from such bank and discharge them without reference to loans for which its guarantors had become bound. Hence, payments upon the later loans are not necessarily, or as a matter of law, required to be credited upon the loans guaranteed.
    Heard' on Error.
    E. W. Tolerton, for plaintiff in error.
    G. P. Voorhees, for defendant in error,
    cited:
    Construction of guaranty. Fee v. Dick, 35 U. S. (10 Pet.) 482 [9 F- ed. 503]; Mauran v. Bullus, 41 U. S. (16 Pet.) 528 [10 F. ed. 1056]; Bell v. Bruen, 42 U. S. (1 How.) 169 [11L- ed. 89]; Rindge v. Judson, 241ST. Y. 64; White’s Bank v. Myles, 78 N. Y. 385 [29 Am. Rep. 157]; Evansville Nat. Bank v. Kaufmann, 93 N. Y. 273 [45 Am. Rep. 204]; Schwartz v. Hyman, 14 N. E. Rep. 447 [10 Cent. Rep. 270; 107 N. Y. 560]; Menard v. Scudder, 7 La. Ann. 385 [56 Am. Dec. 610]; Melville v. Hey-den, 3 Barn. & Aid. 593; Cremer v. Higginson, 1 Mason 323, 386 [6 Fed. Cas. 797]; Whitney v. Groot, 24 Wend. 82, 84; Mason v. Pritchard, 12 East. 227; Hargreave v. Smee, 6 Bing. 244; Drummond v. Prestman, 25 U. S. (12 Wheat.) 515; Eawrence v. McCalmont, 43 U. S. (2 How.) 426, 450 [11 E. ed. 326]; Smith, Merc. Daw 386 ; Mussey v. Rayner, 22 Pick. 223; Weed Sewing Machine Co. v. Winchell, 7 N. E. Rep. 881 [5 West-Rep. 824]; 107 Ind. 260, and cases cited; Burns v. Manufacturing Co., 87 Ind. 541; Grocers’ Bank v. Kingman, 16 Gray 473; Singer Manufact-ing Co. v. Forsythe, 9 N. E. Rep. 372 [6 West. Rep. 553; 108 Ind. 334] 5 Boston & Sandwich Glass Co. v. Moore, 119 Mass. 435.
    Liability on continuing guaranty. Lawton v. Maner, 10 Rich. Law (S. C.) 323; Keith v. Dwinnell, 38 Vt. 286; Wilde v. Haycraft, 2 Duvall (Ky.) 309; Bussier v. Chew, 5 Phila. (Pa.) 70; Kirby v. Marlborough, 2 Maulé & Sel. 18; Boston & Sandwich Glass Co. v. Moore, 119 Mass. 435; Creamer v. Higginson, 1 Mason 323 [6 Fed. Cas. 797]; White v. Read, 15 Conn. 457; Congdon v. Reed, 7 R. I. 576; Aldricks v. Higgins, 16 Serg. & Rawle 212; Frost v. Wethersby, 23 S. C. 354; Smith v. Van Wyck, 40 Mo. App. 522.
    Application of payments. Smith v. Lloyd, 11 Leigh. (Va.) 512 [37 Am. Dec. 621]; Field v. Holland, 10 U. S. (6 Cranch) 8,27; United States v. Kirkpatrick, 22 U. S. (9 Wheat.) 720, 737; Brady v. Hill, 1 Mo„ 315 [13 Am. Dec. 503]; Baker v. Stackpoole, 9 Cow. 420 [18 Am. Dec, 508]; Burks v. Albert, 4 Marshall (JJ.) 97 [20 Am. Dec. 209]; Vicary v-Moore, 2 Watts 451 [27 Am. Dec. 323]; Bacon v. Brown, 1 Bibb. 334 [4 Am. Dec. 640]; Harker v. Conrad, 12 Serg. &R. 301 [14 Am. Dec. 691]; White v. Trumbull, 3 Green Law 314 [29 Am. Dec. 687]; Mathews v. Phelps, 28 N. W. Rep. 108 [61 Mich. 327; 1 Am. St. Rep. 581]; Fel-' lows v. Prentiss, 3 Denio 512 [45 Am. Dec. 484]; Gard v. Stevens, 12 Mich. 292 [86 Am. Dec. 52]; Schwartz v. Hyman, 14 N. E. Rep. 447 [107 N. Y. 560] ; Rindge v. Judson, 24 N. Y. 64; White’s Bank v. Myles, 73 N. Y. 335 [29 Am. Rep. 157]; Evansville Nat. Bank v. Kaufmann, 93 N. Y. 273 [45 Am. Rep. 204]; Birdsall v. Heacock, 32 Ohio St. 177 [30 Am. Rep. 572]; Morgan v. Boyer, 39 Ohio St. 324 [48 Am. Rep. 454],
    Waite & Snyder, for defendant in error,
    cited:
    Continuing guaranty. 2 Am. Leading Cas. 141, cited in Hall v. Hall, 32 Ohio St. 184; Morgan v. Boyer, 39 Ohio St. 324, 326; White v. Reed, 15 Conn. 467; Palmer v. Yarrington, 1 Ohio St. 253, 260; Cam-bria Iron Co. v. Keynes, 56 Ohio St. 501, 511; Pingréy Sur. & Guar., Secs. 354, 356, 374; Crittenden v. Fiske, 46 Mich. 70; Douglass v. Reynolds, 32 U. S. (7 Pet.) 113; Hatch v. Hobbs, 12 Gray 447; Gates v, McKee, 13 N. Y. 232; Melendy v. Capen, 120 Mass. 222 ; Taussig v. Reid, 145 Ill. 488; Anderson v. Blakeley, 2 Watts & Serg. 237; Hotchkiss v. Barnes, 34 Conn. 27; Congdon v. Read, 7 R. I. 576; Strong v. Dyon, 63 N. Y. 172; Reed v. Fish, 59 Me. 358 ; 1 Rice (S. C.) 126; White v. Reed, 15 Conn. 457 ; Boston & S. Glass Co. v. Moore, 119 Mass. 435; Cutler v. Ballou, 136 Mass. 337 [49 Am. Rep. 35]; Sherman v. Mulloy, 54 N. K. Rep. 345 [174 Mass. 41]; Columbus Sewer Pipe Co. v. Ganser, 25 N. W. Rep. 377 [58 Mich. 385].
   PARKER, J.

In the court of common pleas, suit was brought by this plaintiff in error against this defendant in error, upon a certain written guaranty. A general demurrer to the second amended petition was sustained by the court; and the plaintiff not desiring to plead further, judgment went against him, dismissing his petition, and adjudging the costs against him, and on account of that judgment, he prosecutes error here.

So that it will be seen, the question is presented here, as it was below, upon the demurrer to the second amended petition. The question is whether the court erred in sustaining that demurrer. I do not know that it would be safe to undertake to paraphrase or abbreviate this petition. It is not very long, and I shall read it.

(After the title.) “ The plaintiff, The National Bank of Commerce of Toledo, Ohio, a corporation organized under the banking laws of the United States, and doing business at Toledo, Ohio, for its cause of action against the said defendants, Frank W. Garn, Oliver B. Snider, Martin C. Trout and Andrew D. Stewart, says that on the tenth day of June, 1895, said defendants executed and delivered to the Ketcham National Bank of Toledo, Ohio, a written undertaking, a copy of which is as follows:

“ Toledo, Ohio, June 10, 1895.
“ Ketcham National Bank :
“ We, the undersigned, hereby jointly and severally guarantee to you the payment of any and all sums of money that may be loaned by you to the Carothers Publishing Company, on request of F. W. Garn,, treasurer, providing the amount of said loan shall not exceed in the. aggregate, $3,000. .
. “ F. W. Garn,.
“O; B. Snider,
“ M. C. Trout;
“A. D. Stewart.
“ Plaintiff says that subsequent to the execution and delivery of said guaranty, the Ketcham National Bank, of Toledo, Ohio, changed its name to the National Bank of Commerce of Toledo, Ohio, under the provisions of the statutes of the United States; that the said Carothers Publishing Company, subsequent to the execution and delivery of said guaranty, changed its name to the Royal Publishing Company, under the provisions of the statutes of the state of Ohio; that said plaintiff is still the owner and holder of said contract; that subsequent to the execu“ tion and delivery of said contract the Ketcham National Bank loaned to the Carothers Publishing Company, on request of F. W. Garn, treasurer, the following sums of money on the following dates, to-wit:
“September 13, 1895, $2,800 ; October 11, 1895, $3,800; April 22> 1897, $500 ; July 31, 1897, $600 ; August 8, 1897, $500.
“Plaintiff says that at the time said guaranty was given and said sums of money loaned as aforesaid, all said defendants were stockholders in said company ; that the defendants, Frank W. Garn, Martin C. Trout and Oliver B. Snider, were members of the board of directors of said company and constituted a majority of said board, and were actively interested in the business in which said company • was engaged. That the said defendant, Frank W. Garn, at the time said guaranty was given and said money loaned, was treasurer and general manager of said company, and in full charge of its business, subject to the general supervision and control of said board of directors. That each and all of said defendants authorized the said F. W. Garn, as manager and treasurer of said company to borrow of the plaintiff the aforesaid amounts and executed the said notes therefor; that at said time he and all of said defendants knew that said authorized loans were in excess of said $3,000 ; that all of said loans were so obtained by said company upon statements made by said treasurer showing that said company was financially solvent; that said statements were made by the authority and with the knowledge of said defendants and for the express purpose of procuring said loans in excess of said $3,000, and said loans were so made by said plaintiff relying upon the truthfulness thereof. The plaintiff says that said statements were false, and said company was at said times actually insolvent.
“That said defendant, Andrew Stewart, was a regular attendant on all stockholders’ meetings and knew the condition of said company, and knew that said company borrowed money from the plaintiff in the amounts above set forth, and in excess of said sum of $3,000 and authorized the same.
“ Plaintiff says that said sums of money loaned as above stated were secured by the several promissory notes of said company; that said notes were given for short periods of time and successfully renewed; that payments were made by said company on said notes thus renewed up to the - day of September, 1898, on which date the following notes given by said company to secure said indebtedness were outstanding and unpaid, to-wit:
“ Note of $475 dated July 2, 1898, due in ninety days.
“ Note of $8,200 dated July 9, 1898, due in ninety days.
“Note of $2,200 dated July 19, 1898, due in ninety days.
“ Note of $550 dated August 24, 1898, due in ninety days.
“ Plaintiff further says that on or about the-day of September, 1898, R. E. Rickenbaugh was appointed receiver by this court for the purpose of closing up the business in which said company was engaged ; and that thereafter R. W. Kirkley was appointed receiver by this court for the purpose of collecting from stockholders of said company the amounts due from them by reason of their liability as stockholders of said company under the statutes of Ohio.
“ Plaintiff says that its claim against said company, by reason of said indebtedness was approved in said proceedings heretofore had in this court, and said claim was allowed, with interest to January 31, 1899, in the sum of $6,538.82. Plaintiff says that it has received from R. E. Rickenbaugh, receiver, the sum of $879.79, and from R. W. Kirkley, receiver, the further sum of $3,961.32, and which said sums were applied by plaintiff in payment of said loans so made as aforesaid in excess of said $3,000, the amount named in said guaranty executed by said defendants, and the balance of said payments were applied upon the indebtedness secured by said guaranty; and that there is still due and unpaid on said guaranteed indebtedness the sum of $1,697.71, with interest from January 3, 1899, for which amount plaintiff prays judgment against said defendants.”

Now, the questions debated and to be decided turn upon the construction to be given to this written guaranty, and perhaps somewhat upon the transactions of the parties averred to have taken place in pursuance of the guaranty or subsequent to the guaranty.

It was contended on behalf of plaintiff in error that this is a continuing guaranty, which authorized the bank to loan to the company whatever it might please to loan without limit as to time or amount, but that the limit of the liability of the guarantors (being the only limit) was fixed at $3,000; and that therefore the guarantors would be liable to the extent of $3,000 for any balance remaining unpaid upon any loan or loans that might be made at any time or in any amounts subsequent to the execution and delivery of this guaranty.

On the other hand, it is contended that this is not a continuing guaranty, but is restricted; that it contains a condition that the amount of said loan or the aggregate of all loans, should not exceed $3,000, and that the violation of this authority would of itself operate to release the guarantors from all liability; and that if this is not true, it is at least true that the guarantors have not authorized a succession of loans exceeding in the aggregate $8,000 and have not agreed that they would be bound for any unpaid balance upon said loans, but that the restriction is that they will be bound for the first loan or loans aggregating three thousand dollars, and that any payments made upon that loan or which should be applied upon that loan in extinguishment of it, would extinguish their liability; and that there would be no liability attaching to them on account of subsequent loans.

By the diligence of counsel, we have been cited to a very great many authorities, which state principles and give illustrations bearing upon the questions in issue.' It .would be an almost endless task to review these authorities, and perhaps impossible to reconcile them, but we think that running through the approved authorities, there are certain principles about which there is no very great difference in the minds of the courts — certain well defined principles which may be applied here to a solution of these questions.

In the first place, as to the general rule of construction: A contract of guaranty is to be given that construction and effect which shall best accord with the apparent intention of the parties as manifested by the terms of the guaranty, taken in connection with the subject matter to which it relates and the circumstances accompanying the whole transaction. And in that respect it does not differ from any other contract. It is to be construed as any other contract should be construed, the purpose being to ascertain the intention of the parties, and to give that effect.

The guarantors should be held to every obligation reasonably and fairly embraced within the terms of their contract construed in the light of the language used and the concomitant circumstances, but the instrument should not be strained beyond its obvious meaning for the purpose of enlarging the liability of the guarantors. '

After the application of these general rules, where there is still doubt whether the guaranty was intended to be a continuing guaranty, the presumption that it was not so intended may be given effect, and may turn the scale. That there is such presumption and that it has been recognized and approved as a rule by the Supreme Court of this state, appears from Birdsall v. Heacock, 32 Ohio St. 177 [30 Am. Rep. 572]. The question was whether á certain guaranty given by a father on account of his son authorizing the sale of lumber to the son should be regarded and enforced as a continuing guaranty or as a restricted guaranty. The syllabus reads:

A letter addressed to a lumber merchant in the following language : ‘ Please send my son the lumber he asks for, and it will be all right, ’ is a guaranty that the lumber sold and delivered to the son, at the time of its presentation, will be paid for.
“ But such guaranty is not continuing, so as to make the guarantor liable for lumber subsequently purchased by the son from .the same merchant. And payments afterward made by the principal, on account, will be applied in satisfaction of the first purchase, and consequent discharge of the guarantor’s liability.”

•In the course of the opinion, Judge Scott, after discussing the question whether this should be regarded as a continuing or restricted guaranty, uses this language:

“ Upon this subject, it has been well said, that the chief difficulty lies in determining what interpretation should be put on a guaranty which is so worded that it may either extend to a series of sales or advances or be limited to the first. The better opinion would seem to be, that such an instrument should be confined to the immediate transaction, unless the language of the promise is sufficiently broad, to show that it was meant to reach beyond the present, and render the guarantor answerable lor future credits. The tendency of decision in this country has, accordingly been against construing guaranties as continuing, unless the intention of the parties is so clearly manifested as not to admit of a reasonable doubt.’ ”

The language is quoted from 2 Am. Bead. Cas. 141, and a large num-. ber of cases are there cited in support of it.

It will be observed that this petition does not set forth the circumstances surrounding the transaction, the concomitants of the transaction, further than to state that, these persons were members of this incorporated company, some being directors, and one the treasurer and general manager, and then it proceeds to state what was subsequently done in the way of making loans to the company through this treasurer and general manager, upon the authority of the board of directors. Now, subsequent transactions, not amounting to a modification of the contract and not part of the concomitant circumstances, can not be considered as a part of the circumstances under consideration in formulating the terms of the contract, and hence be looked to for the purpose of ascertaining the sense in which or the intent with which such terms were used.

Counsel for plaintiff in error cite us to a Cambria Iron Co. v. Keynes, 56 Ohio St., 501 [47 N. E. Rep. 548], in which consideration was given by the courts, in construing a contract of guaranty, not to subsequent transactions between the principal and the person to whom the. guaranty was extended, but to the course of dealing which had previously gone on between the guarantor and the creditor; and the first clause of the syllabus reads :

“ In construing a contract of guaranty, the object should be to ascertain the intention of the parties; and, as in construing all contracts, the words employed by the parties should be construed in the light afforded by the circumstances surrounding them at the time it was made.”

The question there was as to the period of credit extended by the creditor. The previous course of dealing between the parties had been such that the period of credit did not exceed four months. Upon the note being executed and delivered into the hands of the creditor, further credit was given, and the time for the payment was extended, so that there became, not an extension of the time of giving credit by selling at a time subsequent to the time limited for giving credit, but an extension, of time for payment upon the goods sold within the time limited, and it was with reference to that previous course of dealing as throwing light upon the sense in which certain terms were employed that averments were made and testimony heard, — I do not know but that it went off on demurrer, — but at all events, consideration was given to the course of dealing between the parties prior to and concurrently with the execution of the written guaranty.

That there was any course of dealing between the principal and the creditors in the case at bar which would authorize us to look into the transactions to ascertain the sense in which the terms of the contract were used by the parties, is not disclosed by this petition. So far as appears by the petition this was the very first transaction that had ever taken place between the parties.

However, subsequent transactions under or in pursuance of the contract, or with the contract in view, may be looked to for the purpose of discerning the interpretation the parties have put upon doubtful provisions; and in looking into the petition for this purpose we believe that we are authorized to say that by soliciting this further credit to the company, the guarantors, directors and others interested in the company, have put it out of their power, have perhaps estopped themselves from claiming that they have been totally relieved from all obligation in consequence of credit having been given beyond the $3,000 stated; but we do not think we are authorized to say that by so doing, they have extended the terms of their guaranty so that they would be bound thereon as upon a continuing guaranty for any balance that may remain due upon credits given beyond $3,000. In other words, we can not say that the plain limitation restricting the amount to the first $3,000 loaned, was not waived or enlarged by the subsequent authority given to the treasurer to borrow money; though we hold that the making of further loans did not at once and of itseli amount to such a violation of the contract as absolutely released them as guarantors. But there was no agreement at all that they would be bound beyond $3,000; and therefore, that matter stands as if they had said in effect, “ you may make these further loans, but you do it, not upon the faith of our guaranty, but upon the faith and responsibility of the company.”

We are of the opinion that under all of the circumstances set forth in the petition, the guarantors were not bound beyond the $3,000 first loaned. Now it appears from the petition that $3,000 and more was loaned, so that the guarantors became responsible to the extent of $3,000. It appears too that there is a balance due of $1,697.71; and plaintiff says that he has applied the payments that he has received from these various sources mentioned, upon the unsecured or unguaranteed part of the indebtedness of the company, with the effect of wiping that out; and that he has applied the remainder upon the part secured, leaving this balance, as he claims, of unsecured indebtedness.

The question, therefore, left for our determination is, whether or not this petition discloses that the $3,000 first loaned has been paid. If the petition discloses that it has been paid, then it does not state any cause of action against the guarantors. It shows that there was a liability of $3,000, arising upon loans exceeding $3,000, i. e., upon the first $3,000; and unless it discloses that this has been paid, there is a cause of action stated in the petition.

It was held in Birdsall v. Heacock, supra, that under circumstances like those there appearing, payments made by the principal on account will be applied in satisfaction of the first purchase, and the consequence will be a discharge of the guarantor’s liability; and it is urged by counsel for defendants in error that the payments which have been made here from time to time in the various ways shown by the petition, should be so applied, in discharge of the guarantor’s liability that, as a matter of law, they should and must be so applied; and that( notwithstanding the averments of the petition that they have been otherwise applied, the law will make the application in such a way as to work the discharge of the guarantors.

Whether the applications stated of these payments were made with or without authority from the principal debtor or guarantors is not stated in the petition. It is silent upon that subject. That the application has been made is all that is stated. I read on the subject of the application of payments, from an old edition of Brandt on Suretyship and Guaranty, Sec. 286:

“ When the liability of a surety or guarantor is for the debt of another, such liability of course ceases upon the payment of the debt. With reference to the application of payments, the general and well known rule is, that a debtor who owes several debts to the same creditor has the right at the time of making a payment, to apply it to any one of the debts he pleases. If he makes no appropriation of a general payment, the creditor may apply it as he sees fit. And where it is not appropriated by either the debtor or. the creditor, the law will apply it according to the justice and equity of the case. The mere fact that there is a surety for one of the debts will not make any difference in this rule, when a payment is made in the principal, where the principal debtor pays part of the principal sum due, and the whole of a highly usurious rate of interest stipulated for, the surety is bound by this application of payment. Where a mortgage or other security is given , by a principal to secure several debts due one creditor, for one of which debts a surety is liable, and there is no agreement or anything to indicate the intent of the parties as to how the proceeds of the security shall be applied, the creditor may apply such proceeds to the payment of the debts, for which the surety is not liable. Where three notes are secured by a trust deed, and the two first due are also signed by a surety, the creditor may, after the maturity of all the notes, apply the proceeds of the trust premises to the payment of the note last due, on which there is no surety. The fact that he required sureties on the two first notes, was evidence that he was not satisfied with the security of the trust deed. Principal and surety were liable for a debt, and afterwards the principal obtained further advances from the creditor, at the same time depositing with him certain copper to secure his indebtedness, but without specifying what indebtedness. The principal failed, and the creditor, against the objection of the surety, applied the proceeds of the copper to the payment of tb,e subsequent advances. Held, he might lawfully do so. As the principal made no application of the payment, the creditor had the right to apply it as he pleased, upon the ordinary principle which entitles a creditor in the absence of any direction from the debtor paying, to apply the money he receives, to whichever of several debts arising he pleases.”

Notwithstanding this limitation in this written guaranty, it was competent for the company to borrow money from the bank. It was competent for the bank to give credit to the company and competent for the company to discharge such indebtedness by paying it \ and to pay it without reference to the fact that it was indebted to the bank upon certain other loans, on account of which these guarantors had become bound; and we hold that payments made by the debtor company to the bank on other loans would not necessarily, as a matter of law, be credited — would not be required to be credited, upon the loan on account of'which these guarantors were bound.

The case differs somewhat from the case of a general open account, like that in Birdsall v. Heacock, supra ; for the general rule is that where there is a general open account, and payments are made thereon generally (as in that case), the application shall be made upon the oldest item of the account. We know of no reason why this debtor company may not have gone to the bank and made any one of these loans of hundreds and thousands of dollars and agreed to pay them, either at a date subsequent to that at which the first loan became due and payable, or at an earlier date, and actually have paid them when they matured or at some other time, without regard to the fact that there was another indebtedness existing upon which the guarantors were bound, and without offering such guaranty.

The petition discloses no direction from anybody as to the application to be made of payments, but states that payments were made and that the creditor bank applied the payments as stated, upon the. unsecured indebtedness, It does not appear from the petition that the bank violated any rights of the guarantors in so doing. It is possible that it did. It is possible that some reason existed why those payments should have been applied and why a court of law or equity even now would require that they should be applied upon the first indebtedness; but that reason is not disclosed in the petition, and if it exists, it must be brought forward by an answer.

The petition sets forth that the debtor company failed; that the bank proved up its claim for $6,538.82 upon these several notes of $475, $3,200, $2,200, and $550 which were given in extension, — or some of them were, — of the balance due upon the first $3,000 borrowed, and upon the other amounts first borrowed, making up the $8,200. Of the property which went into the hands of the receiver of the company, the bank received as its distributive share, $879.79; of that which went into the hands of the receiver who was appointed in the proceedings to enforce statutory liability of the stockholders of the insolvent company, it received as its share upon these claims, the sum of $6,839.82.

The question arises whether the petition discloses a state of facts which would require the application of the money thus received in any particular way, or requires that it should go into any particular channel. We think it does.

In Bank v. Cheney [unreported], the court held that where there were various claims presented on behalf of the bank, upon some of which Mr. Cheney was surety, and upon others of which he was not, and there was a dividend paid to the bank upon their several claims, it was not competent for the bank to apply that dividend in suck a way as to extinguish the unsecured claims presented and allowed, and leave the claims upon which Mr. Cheney was surety without any payment having been made thereon. Our view of the matter, without any authorities being presented at that time, was that the different claims should pro rate; that the court had allowed these different claims, and that the dividends were upon .the different claims, and that when the dividends were paid, the application should be made pro rata upon the different claims, and we enforced that rule. In looking into this case, we find authority in support of that ruling, although we found none at that time.

In 7 Bingham, 489, I read the syllabus :

“ The defendant guaranteed plaintiffs against debts to be contracted by I*. M. to the extent of 400 pounds. T. M. became indebted to plaintiffs to the amount of 625 pounds, upon which by a composition with his creditors, he paid them 8 shillings 7 cents on the pound, leaving due to the plaintiffs out of their whole claim 886 pounds. The defendants being sued for that sum upon their guaranty: Held, that they were entitled to deduct from it 171 pounds, 13 shillings and 4 pence, the amount of the dividend of 8 shillings 7 cents on the pound upon 400 pounds.”

The matter is very well argued out by Kirdle, chief justice, and the reasoning is very satisfactory to us. I do not take time to read it.

I call attention to another decision in line with that, in 5 Moore & P. 327. I will not stop to read from it, but will simply say that the same doctrine is announced and applied.

So that we hold that the amounts received from these receivers upon this balance of indebtedness of nearly $5,000 should be applied pro rata upon the different claims presented and allowed; not only that received from the receiver of the insolvent company, but that received from the other receiver, who had collected from the stockholders on account of their statutory liability. We do not understand that the latter fund should be treated differently from any other to which the creditors might resort. We do not understand that the bank had any peculiar or special interest in that fund that these guarantors can not as well assert for their benefit— that these guarantors would not be subrogated to in the event they discharged the indebtedness, and sought relief against the debtor; and therefore we hold- that both of these funds should be treated, as a matter of law, as having been applied in that way.

Nevertheless,it is not apparent that that would extinguish this indebtedness. It might still leave a balance of the first $3,000 unpaid. That balance may turn out to be as great as the balance claimed in the petition, or it may be less, or there may be nothing remaining unpaid of the first $3,000 loaned. This may depend upon the amount, if anything# of the first $8;000 loaned carried into these renewal notes. The transaction in the way of loans and payments and applications of payments up to the making of these last notes, are not set forth specifically in detail, but the petition avers that there is a balance of the secured indebtedness carried into these renewal notes and yet unpaid, and therefore we are of the opinion that the petition states a good cause of action, and that the court of common pleas erred in sustaining this demurrer. The judgment will be reversed and the cause remanded.