text:
    IMPRISONMENT UNTIL FINE AND COSTS ARE PAID.
    [Circuit Court of Summit County.]
    Simeon Cameron Smith v. State of Ohio.
    Decided, October Term, 1902.

      Criminal Law — Statutory Provisions in Cases of Felony and Misdemeanor — .4s to Imprisonment Till Fine and Costs are Paid— Conviction for Abandonment of Child.

    The statutory provision that a convicted person may be imprisoned until his fine and costs are paid applies only to misdemeanors, and where such an error is made.a part of the sentence of one convicted of a felony, error will' lie to a refusal to eliminate that portion of the sentence.
    Marvin, J.; Caldwell, J., and Hale, J., concur.
   The plaintiff in error was convicted upon an indictment charging him under Section 3140-2, Revised Statutes (94 O. L., 105), with having unlawfully, knowingly, willfully and negligently neglected, refused and failed to provide his child, Rilla Smith, with a proper home, suppprt and care.

After conviction the court pronounced sentence that “the defendant, Simeon Cameron Smith, be confined in the workhouse at Canton, Ohio, for the period of three months, and that he pay the costs of this prosecution and to stand committed until said fine and costs are paid, or he be otherwise legally discharged.”

Thereafter there was filed in the court .of common pleas a motion by said Smith to modify this sentence by “eliminating that portion of said judgment which orders that the defendant stand committed until the costs of the prosecution are paid, or defendant is otherwise legally discharged. ’ ’ This motion was overruled by the court.

The errors complained of are that the court was without authority of law to pronounce, as a part of the sentence of the prisoner, that he stand committed until the fine and costs were paid, and that the court overruled the motion for a modification of this sentence.

The petition in error is well taken.

The statute (Section 3140-2, Revised Statutes) under which the plaintiff in error was convicted, authorizes punishment “by-imprisonment in the penitentiary for not more than three years, nor less than one, or in a county jail or in a workhouse at hard labor for not more than one year, nor less than three months.” There is nothing in this section which authorizes the imprisonment of the convicted party until the fine and costs are paid, nor is any authority found in any section of the statute for such imprisonment where one is convicted of a felony. The section under which this conviction was had, in terms, provides that whoever is guilty of the offense charged in the section is guilty of a felony.

Section 6795, Revised Statutes, defines a felony in these words:

“Offenses which may be punished by death or by imprisonment in the penitentiary are felonies; all other offenses are misdemeanors.”

Section 7327, Revised Statutes, provides:

“When a fine is the whole or part of a sentence, the court or magistrate may order that the person sentenced shall remain confined in the county jail until the fine and costs are paid, or secured to be paid, or the offender is otherwise legally discharged. ’ ’

This section is under the caption, “Execution of sentence for misdemeanor.” And it seems clear that the sections under this heading are confined to cases of misdemeanor. The language of the several sections, wherever the court is spoken of, is “court or magistrate” or the words “magistrate or court,” clearly indicating that the cases to which these several sections apply are those which may be finally disposed of by a magistrate, and do not include cases of felony.

Entertaining these views, we hold that the sentence, in so far as it included imprisonment until the fine and costs were paid, is erroneous, and the court should have granted the motion to modify the sentence in that regard.

W. R. Talbot, for plaintiff in error.

H. M. Hagelbarger, Prosecuting Attorney, for defendant in error.

The ease is remanded to the court of common pleas with the direction that the modification of the sentence be made as herein indicated. The remainder of the sentence is in force as pronounced. The costs of the proceedings in error will be taxed to the defendant in error.


source: Caselaw Access Project

license: Public Domain

text:
    BUILDING ASSOCIATIONS — USURY.
    [Circuit Court of Lucas County.]
    Haskel A. Spies et al v. Southern Ohio Loan & Trust Co.
    Decided, 1902.

      Premiums and Fines — Imposed by Building Associations — When Reasonable are Not Usury — Section 3836-3 Not Unconstitutional.

    The provision of Section 3836-3, declaring that dues, fines, premiums or other assessments imposed by building and loan associations shall not be deemed usury, although in excess of the legal rate of interest, is not unconstitutional. Mykrantz v Globe Building & Loan Association, 19 C. C., 51, not followed.
    In this action the Southern Ohio Loan & Trust Company, a building and loan association organized under the laws of Ohio, brought suit against Spies and others to foreclose a mortgage executed by Spies and his wife to this company, securing a loan of $1,000, advanced to him on his stock for that amount in the company, and also to secure the payment of interest, premium, fines and other charges which might be assessed against him by the company. Default having occurred the company sued for the principal of $1,000, together with $17.71 interest and premium and $3 fines, and further alleged that there would become due and payable from and after July 13, 1900, fifty cents a month as dues on each $100 share of stock, and also interest at the rate of six per cent, per annum, premium at the rate of 16 2-3 cents per month on each share, and fines at the rate of ten cents a month on each share, so long as the defendant remained in default for payments. The defense set up on behalf of Spies was that the fines were unreasonable, and that Section 3836-3 under which building and loan companies collect premiums is unconstitutional. Judge Pugsley in the common pleas court sustained the constitutionality of the statute and entered judgment for the full amount claimed.

      Herbert Orr, for plaintiff in error.

      Orville S. Brumback, for defendant in error.
    Haynes, J.; Parker, J., and Hull, J., concur.
   In this case suit was brought to foreclose a mortgage upon a loan made by the defendant company, which is an incorporated building and loan association of the city of Cincinnati. A judgment was taken for the full amount prayed. The ease is brought up on error raising questions as to whether certain payments made by way of premiums and fines charged by the company are in the nature of usury; and whether the law of Ohio regulating these companies is unconstitutional. The case of Mykrantz v. Building & Loan Assn., 19 C. C., 51, has been cited, by plaintiff in error. We have not time to discuss this case at length, but we have investigated this matter fully and carefully under the decisions of the Supreme Court, and are satisfied that the decisions of the Supreme Court are in favor of the companies. We have heretofore sustained cases in which the building and loan association law has been held constitutional; and now sustain these charges in this case as being reasonable under a constitutional law.

The judgment of the court of common pleas will be affirmed.


text:
    FRAUD IN THE SALE OF AN OIL LEASE.
    [Circuit Court of Wood County.]
    Harry Jones et al v. Charles H. Draper.
    Decided, November, 1903.

      Agency — Where the Agent Represented Both Parties — Sale of an Oil Lease — Subterfuge and Misrepresentation — Inspection Prevented — • Fraud Upon Go-partners — Rights of Innocent Purchasers — The Sale Rescinded.

    1. To relieve an agent from the suspicion of inconsistent duties, which prima facie will be assumed from the fact that he represents .both parties, it is necessary that every circumstance connected with his employment by either party should be communicated to the other; and where the basis of the commission to be paid for his services was changed from usage to contract, and the amount to be paid from $3,000 to $6,500, such change was a circumstance affecting the action of the agent, and the failure to disclose it was a fraud in law.
    2. The reply to a direct question as to what was the production of certain oil wells, that “I run two one-hundred barrel tanks a day,” was a subterfuge and misrepresentation, where the fact was that the production alluded to was some weeks previous, while the production at the time the inquiry was made with a view of purchase was only fifty-three barrels a day.
    3. If an inspection was prevented or its completeness defeated by the acts, arts or words of the seller, the reliance of the purchaser upon the statements of the seller without such investigation or after an incomplete investigation, would be justified.
    4. Where evidence is introduced tending to show that one member of a firm committed or consented to the commission of a fraud upon his co-partners, notice on his part is not notice to them.
    5. Nor will equity refuse aid to innocent purchasers because of a fraud committed upon them by a co-purchaser, and if their rights can not be secured without releasing him, they will not be allowed to suffer on that account.
    6. Allegations having been established to the satisfaction of the court, that the plaintiffs were induced by the paid agent of the defendant, who they supposed was their agent, to purchase for $60,000 an oil property which was only worth $15,000, that the representations upon which they relied were untrue, and that their investigations as to the value of the property were checked and prevented by the defendant. Held: That the contract of purchase be decreed void and the conveyance rescinded, and the money paid be restored with interest at 6 per cent., the purchase money notes canceled, and for the money expended by plaintiffs in putting the lease in condition to operate and in improvements, which have increased the value of the lease, they are to be given a lien on the lease and property.
    Mooney, J. (sitting in place of Parker, J.); Hull, J., and Haynes, J., concur.
   This case is here on appeal from the court of common pleas.

Plaintiffs in their petition allege, in substance, that some months prior to November 8, 1902, they undertook the promotion of a corporation to be known as The Cleveland-Scranton Oil Company, designed to engage in the business of developing, operating for, and producing oil in the Ohio oil fields, and to that end solicited numerous persons to subscribe and pay for stock of the corporation to be organized, said payments to be made to plaintiffs, as trustees, to purchase oil producing properties and to hold title to the same until such time as the proposed corporation should be organized and empowered to do business in Ohio, when said title should be conveyed to the corporation and stock therein issued to the contributors of the purchase price of said properties; that plaintiffs were then without experience in the oil business and had then no knowledge of the market value of oil producing properties in this state, and for these reasons they associated themselves with and employed as their trusted and confidential agent, to examine and select such oil properties to be purchased, one A. J. Thomas, of Findlay, Ohio, a man of great experience in the business of producing oil in the Ohio fields, and plaintiffs relied exclusively upon the business judgment and fidelity of said Thomas in making said selection and in closing said purchases; that among the properties selected by said Thomas as said agent were certain oil leases with the wells, machinery, fixtures and appliances then situated thereon owned by defendant at the price of sixty thousand dollars ($60,000); that at the time of said selection by Thomas, and at all times thereafter until December 18, 1902, the wells on said leases were out of repair and not in actual operation, and for that reason it was impossible to ascertain what said wells were capable of producing when in repair and in proper working order; that defendant represented to plaintiff that said wells were then capable of producing at least forty barrels of oil daily, and that no wells had ever been drilled upon any part of said land except upon the outside edges thereof, and that the whole central area of said land was virgin oil territory with many inside locations defined and known to be prolific territory which had never been drilled to drain or deplete the oil in said land, upon all of which statements so made by defendant, these plaintiffs and their beneficiaries relied; that after all this and on November 8,1902, said Thomas as said agent and confidential adviser recommended to plaintiffs, as said trustees, the purchase by them of said property of defendant for $60,000; that on said day plaintiffs did accept a conveyance of said property for said price, less $300 deducted therefrom for repairs, and then paid to defendant in money $9,700, and delivered to defendant their notes aggregating $50,000, which notes and money are still retained by defendant; that on said day plaintiffs took possession of - said property, and thereafter expended a large sum of money to put said property in condition to operate and to determine the character and capacity of said wells; that plaintiffs have just discovered and now charge: First, that defendant paid said Thomas a large commission to induce him to recommend said property to plaintiffs and to procure said purchase by plaintiffs: Second, that the statement that no wells had been drilled within the central area of said land was and is untrue; Third, that the wells on said lease were not and are not capable of preducing forty barrels of oil per day, nor any amount in excess of ten or twelve barrels per day; fourth, that both defendant and said Thomas at the time “they beguiled plaintiffs into making said fraudulent contract” well knew that the market value of said property did not exceed $15,000; that plaintiffs before the commencement of this action tendered to defendant a reconveyance of said property and demanded a -return of the money paid and notes delivered by them to defendant as heretofore stated, and defendant declined to accept said reconveyance or to comply with said demand.

The prayer is that said contract and conveyance be adjudged void; that said notes be canceled and said money be ordered returned; that the money expended by plaintiffs upon said property be found to be a lien upon said property and the amount thereof be ascertained on an account taken, and for all proper relief.

Defendant by answer admits the transaction, but denies the fraud. He states that long before said transaction, or any of said negotiations, said Thomas had been retained as a broker by him to make sales of said property, all of which was known to plaintiffs; that the defendant had been interested in said property only about one year, had been upon the same only a few times, and gave plaintiffs all the information he had concerning all the wells drilled on said lease in response to plaintiffs’ inquiries. Defendant expressly denies that he stated that the central area of said property was then undrilled, but that on the contrary he- stated that the same had been drilled, and that one of the wells drilled thereon had the reputation of producing 8,000 barrels of oil per day; defehdant further states that he furnished plaintiffs with the pipe line statement showing the oil produced from said wells in July and August, 1902, and all of which facts were known to plaintiffs at' the time of said sale. All allegations of the petition not admitted by the answer are denied. Plaintiffs by reply deny all the affirmative allegations of the answer.

The case was heard and submitted here upon these pleadings and the evidence. A transcript of the testimony given at the trial in the common pleas court was used here.

The objections made there appear in this transcript. We find no rulings there made on the evidence that we are very solicitous to charge, and counsel have argued no questions arising thereon which they deem important. We abide therefore by the rulings made below.

From the evidence it appears that Harry Jones, a resident of Cleveland, one of the plaintiffs here, prior to August, 1902, formed the purpose to associate himself with other persons, then undetermined by him, to purchase oil properties, organize a corporation to own and operate the same, and to reap a joint profit for himself and associates by conveying the property so purchased to said corporation and selling the stock of said corporation to an amount sufficient to pay the cost price of the property and the amount of profit which the promoters might require. At this time Jones was without experience in or knowledge of the oil business or the market value of oil-producing properties. Jones made known his purposes and intentions to A. J. Thomas, of Findlay, who at that time was experienced in the oil business and was acquainted with the market values of Ohio oil-producing properties. An arrangement was entered into between Jones and Thomas whereby Thomas undertook to find, if possible, one or more oil properties that could be purchased and would be suitable for the proposed enterprise. At this time Thomas contracted to associate himself with Jones in the general plan. After this arrangement was made, Thomas learned that the defendant’s property was for sale, and upon inquiry of Draper was informed that the price was $60,000. On or about September 16, 1902, Jones, together with one Wilson, who as an expert was visiting the property in behalf of some intending investor or investors other than himself, met Thomas by arrangement and they went to the defendant’s lease. Here they met one Hendricks, who at that time was with defendant a joint owner of this property. Wilson informed Hendricks that they had come to look over the property. Hendricks, in his testimony on cross-examination (Transcript, p. 112), details what he said as follows:

“Q. And he, Wilson, asked you some questions about the wells? A. Yes, sir.
“Q. And about the production ? ‘ A. Yes, sir.
“Q. And what do you say you told him ? A. I told him we were running about two one hundred barrel tanks a day then.”

The fourteenth question after this, in the same cross-examination of the same witness is as follows:

“Q. Mr. Hendricks, you say that day, the day that Wilson was there, in the presence of Mr. Thomas and Mr. Jones, that you were asked what that lease was doing at that time ? A. No, sir.
“Q. Was you not? A. - No, sir.
“Q. Did you make any statement that day as to what that lease was doing ? A. No, sir.
“Q. Did you not tell some one then that you was running two hundred barrel tanks a day! A. I said that I had run that.
“Q. What was the question put to you when you made that answer ? A. They asked me what it was doing, and I told them I had run two hundred barrel tanks a day. ,
“Q. Did you not tell them that you were now running that then ? A. No, sir; I did not. ’ ’

At about the time of this conversation, Draper arrived at the lease and Hendricks, to use his language, “turned the visitors over to him.” When Draper met the parties he was inquired of as to the production. He exhibited to the parties a pipe line statement, the extent of which as to time is in dispute. Draper says the statement covered all the time from October, 1901, to August 14, 1902. Jones disputes this and says the statement covered the first half of August, 1902, only. It is argued that Draper that day by wire ordered a statement covering the month of August, 1902, sent to Wilson at Findlay, because he wanted to base his report upon a full month’s statement, and Draper testifies that he, Wilson, wanted to make as good a showing as possible so that the deal would go through. (See transcript, p. 119). The records of the pipe line company do not show that Draper had any such statement as he testifies he had, but, on the contrary, show that the general statement sent him terminated July 31, 1902, and not on date of August 14, 1902. The records further show that Draper ordered and there was sent him a statement for the first half of August, 1902, and that on September 4, 1902, there was sent to him a statement for the whole month of August, 1902. The evidence (deposition of R. L. Bates) further shows that if a large month were wanted, and if defendant had the statement he says he had, that the largest month’s production would be for the month beginning July 15, 1903, and ending with the last item in the August half-monthly statement.

It will be noted that after August 14 there were eight tanks only in August, whereas there were fifteen tanks run from July 15 until the end of July. Moreover the distance between the water-marks in the paper still intact is 11 1-4 inches, while the distance between the marks on the upper part -of the paper and upon that on which the August statement appears is only 9 7-8 inches. If the two parts were part of the same piece of paper, the distance between the marks would be the same. Since Mr. Draper’s explanation does not explain why the month of August was embraced in a single statement to Wilson, since the records of the pipe line company are against his recollection of the facts, and since the physical appearance of the paper is also in dispute of his statement, it must be assumed and held that he is mistaken in his theory as to the extent of the statement he presented to Jones and Wilson on September 16, 1902. This leads to another inquiry. On that day, Draper had a statement for the entire month of August, 1902. It was sent him on September 4, 1902. He had run tickets also in his possession. ' He therefore knew what oil was produced in the month of August, yet he does not exhibit that statement. In the last half of August the lease averaged half a tank a day. In the first half of August the lease averaged one and one-half tanks per day, and some two days and some days three tanks were run. The first half of August was in line with what Hendricks had told the parties, the last half was not. Draper was there that day to see intending purchasers, yet he did not bring the last statement of production, nor did not exhibit it, but did bring another that was favorable to the property and its production. Afterward several other parties visited the lease. There were other parties who intended joining Jones in the purchase or intended to purchase stock in the company. Several of these testify that Draper made statements as to the production of the lease, stating it to be forty barrels per day or more. Draper denies that he made these statements. The average daily production of the lease in August, 1902, was 53 18-100 barrels; in September, 12 12-100; in October 6 56-100. During these months,- at no time were all the wells equipped for pumping, and at no time were the equipped wells regularly pumped. At no time prior to November 8 did Thomas take any gauge of the wells. September 29, 1902, Jones took an option on the property which fixed the price a $60,000. Thomas acted as Jones’ agent in the transaction. October 22, this option having expired by limitation, it was renewed and extended “for such a length of time as will enable (defendant) first party to put the twelve wells in operation and first party agrees to put the wells in operation as soon as possible and to extend the time of the within option until said twelve wells are fully equipped and operating to the satisfaction of A. J. Thomas both as to the operation of said lease, its production and its title.” October 28, Thomas took a statement signed by Jones certifying that he, Thomas, was not a member or stockholder in the purchasers’ combine, nor in the corporation, but was at will an employe.

"When Draper first entertained the proposition to sell, he told Thomas that there would be five per cent, commission for selling the lease. Thomas informed Jones of this fact, and Jones concluded to divide the commission among the purchasers. Jones says that Thomas stated that by the usage of the oil business, a commission was always paid. This Thomas does not deny. Draper says that he asked Jones whether he was interested in the commission and Jones said “No, settle that with Thomas.” Thomas did not know of this statement, and Jones denies it. Draper did not see J ones on the lease after October 28, when for the first time Thomas became solely interested in the commission to be allowed. On October 28, Thomas stipulated with Jones that the commission on the sale should be paid to Thomas as compensation for his services in the deal. About November 1, 1902, Thomas, who before that time had looked after plaintiffs’ property as manager, quit their service in that capacity, and on that date stipulated with Draper that upon the close of the deal then pending between plaintiffs and defendant, Thomas should receive (if the property was purchased at the price of $60,000) a commission of $6,500. There is no pretense in the case that any of the plaintiffs except Jones knew of any commission at all, and no claim that Jones knew of any commission except five per cent, and that fixed by the usage of the business and not by contract. November 8 Draper and Thomas were in Cleveland and the deal was then closed, the money paid and notes executed as pleaded.

It is fair to conclude from all the evidence that the property from the time of taking the first option until November 8 was at no time worth in the market to exceed $15,000. It is asserted by one or more witnesses that Draper represented that the central area was never drilled. Draper denies this, but upon the contrary states that he said the property had been drilled, and pointed out abandoned wells. He says though that he did say that the old territory was then usually redrilled, and that he pointed out where a line of wells could be established. There are several conflicts in the evidence upon important circumstances. One between Cook and Draper; one between Marr on the other hand and Draper and Thomas on the other, and one between Major Miller, and to some extent Bowler and Jones, on the one hand, and Draper and Thomas on the other. Cook says in substance that at one time when he was working for Draper as pumper on this lease and after these negotiations were commenced, he saw Thomas take a gauge of the tank. He told Draper, saying, “You are caught, Thomas is taking a gauge of the production.” To which Draper replied ‘ ‘ I can get Thomas. ’ ’ Thomas says he did take one gauge and never satisfactorily repeated it, and ,he as an expert oil man, paid for his services and paid well, whose power and duty it was to pass upon the production of the lease, never took a guage of that production, and he was present when the deal was closed and knew that the east wells were not pumping because the power was not properly located, and two other wells were not then operating, nor were they completely equipped; and he says he held his peace, when every dictate of duty should impel him to speak, and the commission had grown from $3,000 to $6,500! In this view, Cook’s statement is not very unreasonable. Marr succeeded Thomas as manager of the leases then owned by plaintiffs, and knew the condition of the property here in question. He met Draper and Thomas at Findlay on the eve of their departure for Cleveland to close the deal. It is conceded that they asked him to accompany them and that he refused. He says they wanted him to say that defendant’s property was all right and in pumping condition and that he refused. This Draper and Thomas deny. This was the question, or one of the questions, upon which Thomas was to pass. He was to be paid for it, and Thomas was going to Cleveland. But why was Marr asked to go ? The evidence does not satisfactorily answer this question, unless it be to shift responsibility from Thomas. This responsibility was one which Thomas then and now was disinclined to assume. The testimony of Major Miller we accept as true. His testimony is clear, direct and reasonable. What attorney is there who would not feel inclined in a transaction of this magnitude to see that the interests of his client were secure? And if he started to make any inquiry he would, we believe, ask the very questions he says he asked, and would advise his client not to proceed unless the answers given were direct and satisfactory. That Thomas was averse to answering these questions is doubtless true, but that he was prepared to answer his presence there at that time for that transaction attested. We accept as facts in the case that Thomas, in the presence of Draper, who remained silent, a few minutes before the deal was closed, stated in the presence of Bowler, Jones and others that this lease was then producing forty barrels of oil per day; that it was then in proper operating order except two wells that could be set to pumping for three hundred dollars; that the property could be made to produce a hundred and forty barrels per day and that the central area of the tract had not then been drilled. Bowler and Jones do not now remember this statement, and therefore it does not appear that they relied upon it, but that statement is evidence that Draper before that time, as well as Thomas, had stated these facts as to the production of the property as so many witnesses testify.

October 3, Jones wrote Draper a letter and clearly invited the latter to falsify the production of the lease to a number of persons who would on a specified day visit it. Draper received the letter and filed it away in silence. By this letter Jones may have intended to deceive his associate purchasers or intending purchasers of stock. Draper says he understood that the latter was the purpose. If Jones intended that both himself and his associate purchasers should pay more for the property than it was worth the preeedure was folly; if to unload stock on purchasers, it was knavery. There is nothing in the letter or request inconsistent with a belief on the part of Jones that the property would produce and was producing forty barrels daily and that he wanted to show a production above this to secure stock subscribers. If this was the purpose the letter is not here important, for the stockholders are not here complaining. If Jones, knowing the actual production of the wells, sought to defraud his associate purchasers, his partners, these other questions hereafter referred to will arise.

The foregoing is a rather too extensive statement of the complicated facts and contradictions in this case. The remaining questions are of law arising upon the facts. These are first, as to the double agency; second, as to the fraud.'

1. It can not be doubted in Ohio that an agent under certain circumstances may represent both contracting parties in the same transaction. But to relieve such double agent from suspicion that inconsistent duties have been assumed, which prima facie will be presumed, it is necessary that it should appear that knowledge of every circumstance connected with his employment by either should be communicated to the other, in so far as the same would naturally affect his action (Bell v. McConnell, 37 O. S., 396-402). In this case either the commission was originally fixed at $6,500 and Jones was mislead at all times as to the amount of it, or else when the broker’s work had been all done, when the property was practically purchased by plaintiffs, subject only to the expert approval of Thomas as to the operating condition and production of the lease, the amount of commission is increased from $3,000 to $6,500. Not only that, but the basis of the commission instead of being the usage of the business, as Jones was informed, was changed to contract. In any ease, such increase of commission and changed in the nature of the claim for it, would be ‘£ circumstances naturally affecting the action of the agent.” These plaintiffs may have been content for Thomas to receive $3,000 commission fixed by usage or custom on oil sales, when on the eve of the approval of the property by Thomas, they would be unwilling that he should by contract with defendant have the commission raised to $6,500. They are entitled under the rule to be informed of the change in the commission arrangement. They were not not so informed, and the change in the arrangement, if not concealed, was not disclosed. The failure to disclose was a “fraud in law” upon plaintiffs, and on account of it, upon plaintiffs’ election and prompt action, the contract will be declared void (Meaeham’s Agency, Section 798, and eases there cited). Plaintiffs did not know of this change of commission until this action was brought, and so no claim of want of promptness can be sustained.

2. As to fraudulent misrepresentation, Hendricks admits at one place in his testimony that he misrepresented (p. 112). At one place, a moment later (pp. 113-114), he says that “they asked me what it was doing and I told them I had- run two hundred barrel tanks,” but did not tell them what it was then doing. This subterfuge can not be allowed. It is perfectly evident that Jones and "Wilson wanted to know what the lease was then doing; Hendricks knew this and yet he framed his answer so that while true in fact it would be understood by the parties asking the question in a sense in which it was not true.

“No one can evade the force of the impression which he knew another received from his words and conduct and which he. meant him to receive, by resorting to the literal meaning of the language used” (Misner v. Kussell, 39 Mich., 229).

Again, Draper knew on the same day that both Jones and Wilson were there to ascertain the then production of the lease. This was September 16, 1902. On that day Draper had a statement of the oil run during the whole month of August in his possession. This would shouf an average daily production of 53 16-100 barrels. He had also a statement of the production for the first half of August. This showed a daily production of 89 barrels. He showed the latter to the parties. They, desiring a whole month’s statement, instead of producing the one he had, he ordered another from Lima. Under these circumstances it is manifest that both Jones and Wilson would have the right to conclude that the August runs averaging 53 16-100 barrels was a fair statement of the daily production on September 16th. Yet Draper then knew and Hendricks knew and their employe, the pumper, knew that the average daily runs for the first half of September was only 17 65-100 barrels. Having given this statement for August, it is perfectly evident from all the testimony that Draper proceeded thereafter to operate the lease in a manner in which it would be renderd impossible to know what the entire production of all the wells was. The wells were not all pumped at any one time, nor any of them pumped regularly. It is clear too that Jones and Bowler both believed that the wells would do and were doing more than forty barrels and that Draper knew they believed this, and he was bound to know that from his August statement they believed this.

“Allowing the other party to proceed upon an erroneous belief to which one’s acts have contributed is active concealment tantamount to misrepresentation” (Wald’s Pollock on Cont., p. 515, citing cases).

The facts of the transaction at Wood & Miller’s law office, too, fasten the effect of misrepresentation upon Draper. The admission too by Draper, that he pointed out a plan in the central area where a line of wells could be drilled, seems to us to account for the belief entertained by the parties and known by Draper to be so entertained by them, that that area was then undrilled.

We think that there can be no serious question in this case that Draper made statements of existing matters, in the respects charged, that were material to the transaction and that were false in substance and in fact; that plaintiffs did not know their falsity, but relied upon their truth and thereby sustained damage. The sole remaining question is whether plaintiffs had the right to so rely.

If they did not have such right to rely, it is because (1), having undertaken to make an inspection and examination they were bound to prosecute it to the end; or (2), they were not authorized to rely upon the statements and representations of defendant ; but were bound under the circumstances to inspect and investigate for themselves..

Plaintiffs did go to the lease to see the property. The only one of them all who knew anything of the oil business was Wilson. He says he went as agent for Foster, not here a party. Defendant contends that he was agent for both Foster and Lawall. Since, after Wilson’s examination, Foster did not and Lawall did not invest in the property, we are of opinion that Wilson represented Foster alone.

Now, no one could determine by visiting the lease and seeing the wells what the production of the lease with all the wells pumping was, or would be; in other words, what the aggregate capacity of all the wells then was. The opportunity for an independent investigation was not open to plaintiffs from an inspection on the ground. The furnishing of pipe line statements was within the control of defendant and not within the unaided reach of plaintiffs. From these facts it seems clear that plaintiffs were not compelled to continue an investigation begun, or to begin an investigation, without reference to or any reliance upon the statements of defendant; and this is more particularly the ease when, as here, it seems that the opportunity for a full investigation by plaintiffs was interfered with, obstructed and rendered impossible by the active intervention of defendant. It is not to be forgotten that defendant pressed this transaction to a close before all the wells were even equipped, much less pumped, and that the newest well, the “sand well,” was not pumped for want of power after defendant had tested it and knew its capacity. (See 18 Am. St., 549; 22 Am. St., 407; 25 Am. St., 611; 30 Am. St., 617; 50 Am. St., 824; 32 N. Y., 275-280; 24 Wis., 81-87; 19 Ind., 130, as to the right to rely upon representations of defendant in the absence of plaintiff’s actual knowledge or unobstructed opportunity for investigation.) If an inspection was prevented or its completeness defeated by the acts, arts or words of the seller, the reliance of the purchaser upon the statements of the seller without such investigation or after an incomplete one would be justified (43 Cal., 111; 23 Mich., 99; 31 Mich., 36; 32 Mich., 305; 103 Mass., 501 [as to exent of a patent right]; 1 Bigelow Fraud, p. 532). We have no doubt in this case as to plaintiff’s right to rely.

If the letter of October 3, from Jones to Draper is considered as evidence of an intent on the part of Jones to defraud his associate purchasers, then Jones’ knowledge, if any, that the capacity of this lease was less than forty barrels is not notice to his partners.

“When one member of a firm is committing or consenting to the commission of fraud upon his co-partners, notice on his part is not notice to them” (Williamson v. Barbour, 9 Ch. D., 505; 2 Pom. Eq. Juris., Secs. 674 and 675).

After Thomas entered into the contract or stipulation of November, with Draper, the former’s undisclosed information was not notice to plaintiffs (53 N. Y., 144; 118 Mass., 147; 135 Mass., 499; 139 Mass., 322). Moreover after November 1, at least, the knowledge, as well as the declarations of Thomas as far as this action is concerned, became the knowledge and declarations of Draper, for here a special trust and confidence was reposed in Thomas by plaintiffs as Draper well knew (2 Wheat., 178, 195; 6 Ves., 174, 182; 1 Foub. Equity, b—1; c—2, 5, 8). If the said letter of October 3, did not relate to an intended fraud on Jones’ partners, then it is not evidence that Jones knew what the lease was producing except that he did not know it was producing nearly one hundred barrels. In the latter ease assuming, as we believe that Jones relied upon defendant’s statements and so relied upon a production of forty barrels and the other matters stated, all the plaintiffs are entitled each in his own right to maintain this action. If, however, Jones undertook to defraud the other purchasers in the' transaction, the result is not different. The cash paid did not belong to Jones in whole or part. Stockholders had paid it relying upon the corporation’s ownership of this property, and Draper and Thomas knew this, and on November 8 used the fact to close the transaction. The fund should be restored as against Draper and without regard to whether Jones had wrongfully assisted to place it in Draper’s hands. The notes signed are executory contracts, and Jones could plead his own fraud known to Draper as a defense to them on suit brought against him by Draper. In pari delicto, melior est conditio possidentis. So even as against Jones, Draper would have no right to retain the money or enforce the notes, if Bowler and Lawall, or either, were sought to be defrauded by Jones. True by the concellation of the notes in such case Jones may escape liability. “But equity will not refuse to aid his innocent co-purchasers because of a fraud committed upon them by him. If their rights can not be secured without to some extent releasing him, the innocent must not suffer” (40 O. S., 190-203). The substantive facts warrant full relief to plaintiffs and there is nothing in the procedure in the action to prevent it.

The contract of purchase is decreed to be null and void; the conveyance is rescinded; the money paid, with interest at six per cent, from the date of payment, is ordered to be restored to plaintiffs; the notes described in the petition are ordered to be surrendered up and canceled, and an account is ordered to be taken of the money expended by plaintiffs in putting the lease in a condition necessary to operate, and for the amount so expended in full, together with money expended by plaintiffs in improvements on the lease in so far as said improvements increases the value of the lease as determined on the account to be taken, plaintiffs are decreed to have a lien npon said leases and property. The part of the purchase price paid in cash, together with interest thereon, is also declared to be a lien upon the property. Costs are adjudged against defendant and execution awarded. If possible, parties may agree upon the master to take and state the account; or if not, the court will appoint.

Phelps & David, for plaintiffs in error.

Jmes O. Troup and Beverstock & Donehay, for defendant in error.


text:
    CONTRIBUTORY NEGLIGENCE IN DISREGARDING ORDERS.
    [Circuit Court of Lucas County.]
    The Wheeling & Lake Erie Railroad Company v. Hattie I. Fisher, Administratrix.
    Decided, March 10, 1904.

      Negligence — Railways—Locomotive Engineer Killed fry Accident Which Could Have Been Avoided — By Obeying Orders on His Part — Or by Prevention by the Company of Obstruction Falling Upon the Track.

    A locomotive engineer who had been ordered to “look out for rocks falling in cuts east and west of Rockford,” was killed by his engine striking a rock in one of these cuts, while running twenty miles an hour. Held: That recovery on the part of the widow is precluded by the contributory negligence of the engineer in not keeping his train under complete control on that part of the road specified in the order.

    Haynes, J. (orally); Parker, J., and Hull, J., concur.
   A petition in error was filed in this court to reverse the judgment of the court of common pleas. The action was brought by Hattie I. Fisher, administratrix, against the 'railroad company for the purpose of recovering damages from the railroad company occasioned by the death of her husband, which it is averred was caused by the negligence of the defendant company. Such proceedings were had in that case as that a verdict was rendered by the jury for the plaintiff in the sum of $7,500, and a judgment was entered upon that verdict. And this petition in error is prosecuted for the purpose of reversing that judgment and to set aside that verdict.

The accident occurred at a place called Rock Point, in the southeastern part of the state, and about three or four hours run this side of Wheeling. An outline of the facts is: In that part of the state the country is broken and rolling, and at various places there are cuts through which the railroad passes, the last one in that section being this Rock Point, as it is called. In the immediate neighborhood of this point the last station is a place called Rockford, which was about four miles from the Rock Point, and the road from there runs along to a point about a mile and three-quarters east of Rock Point, where you arrive at a place called the Summit Point, making it up grade the nlost of the time to that point, and from there it was for some distance down grade, the next station being two or three miles beyond Rock Point. From this summit down to Rock Point there is a drop of 70 feet in the grade.

The decedent had left Wheeling with a freight train on April 4th, 1901, at 5:35 in the evening, or afternoon. He arrived at Rock Point at about 9:35 in the evening. He had stopped at Rockford about a half an hour, waiting for a passenger train to pass to the eastward, and after it had passed this train started for the next station. When he reached the summit and as he came over the summit and the train was partly across the summit, he shut off the steam and from that point the train run by its own weight. When he arrived at this point the train struck a falling rock about six feet long by three feet wide and three feet thick. The locomotive passed over the rock and passed on 150 or 200 feet along the ties, being thrown off the rails, where it turned over and the engineer, H. H. Fisher, was killed. The fireman who was in the cab with him had the good fortune to escape with scarcely an injury, although he went over in the locomotive with the engineer.

This Rock Point is the point of a hill, and this cut that I speak of is a cut through that point. The point itself, when you come to the center of the point, is said to be from 35 to 50 feet high and 150 to 200 feet wide — that is, the point itself — the cut, however, is from 600 to 900 feet long and is on a curve— the road curves around this point. The point is cut away, not perpendicular perhaps — it is cut off at the base and comes near the railroad track; at the top it extends back. It is formed of gravel and rock, some loose earth and rock and sand and stone under, and during the wet season or during the time the frost is coming out of the ground in the spring, pieces of rock and gravel work loose, become detached and fall upon the track, and this is known to occur from time to time. The railroad company at times had employed a watchman, or rather the foreman of the section gang had been in the habit from time to time to send a man out as a watchman at this point, when he thought there was serious danger of rock falling. This, however, was not a fixed habit, but was done from time to time according to the judgment, evidently, of the section foreman. On this particular night in question there was no watchman sent out.

It is contended in the petition that the railroad company was guilty of negligence contributing to the death of the engineer, in that it had failed to send out a watchman to watch along the track at this time, knowing, or having reason to know that there was danger of rock falling at that point.

Conceding now that the jury would be fully warranted in finding that the railroad company was guilty of negligence in not sending out a watchman at that time, having no watchman there, the controversy in the ease has turned upon the fact as to whether or not the engineer himself was not guilty of contributory negligence in causing this disaster; whether he was not, in fact, the real cause, the real active person in the matter of negligence in respect to the accident.

The railroad company — while this foreman did sometimes send a man out there — did not rely upon the fact that a watchman might be sent out, perhaps did not place a great deal of relianee upon it; but whether they did or not, they did from time to time send out telegrams and dispatches to their conductors and engineers in regard to their duty in the matter; and on the morning of this day they had sent from the office of the assistant superintendent at Toledo, an order directed to the engineers and conductors on the road, which had been delivered to the engineer and conductor of this train, a telegram, which read as follows:

“Reduce speed to five miles an hour through the cut east of ' Valley Junction.”

Now Valley Junction was thirty-six miles west of this point. The company had been carrying forward some work there either of repair or improvement of the road and the tracks were said to be in a very unsafe condition; and that part of the telegram related to the passage of trains on that side of Valley Junction.

It then continues:

“And look out for rocks falling in cuts east and west of Rockford.”

Now Rockford is the station I have spoken of about four miles from this point, and there were cuts, as I have said, east of that point and also this cut west of it.

Now this engineer had this order in his pocket. He had his train composed of forty-five cars; they were all loaded, some with steel bars, some with coal, some with merchandise, and perhaps some other things — they were loaded to their full capacity and weighed perhaps, if I remember right, an aggregate of 1,530 tons. The train had in it thirty of those ears, equipped in the most perfect manner with air brakes. And it is said by experts that fifteen air brakes would have been sufficient to handle that train. With thirty of those he had full and complete power to control his train; he had a good engine; it was a well equipped train — it had some fancy name which I have forgotten.

Some question is raised here in regard to the construction of this telegram, this order, what the engineer should understand by it, what should be its meaning, and considerable testimony has been taken by the parties, of experts, engineers and others, in regard to the meaning of a telegram of this kind, what the engineer should understand it to mean. The testimony on behalf of the railroad company and perhaps some of the testimony on behalf of the plaintiff is that it means that he is to keep a lookout for rocks and keep control of his train, so that he can stop it upon seeing a rock within the line of his vision.

Well, to an ordinary person, there should be no question as to the fair construction of that telegram — he shall look out for falling rock; he must look to see if any have fallen, keep watch in front of him; it is notice to him that these rocks are likely to fall upon the line of his tracks; that he is to look out for them and avoid them. In order to do that he must keep his train under such control that he can stop the train within his range of vision, if necessary.

Now that was a step that had been taken by the company for the protection of its train and engineer. The engineer at all times between stations had control of the engine and the running of the train; it was he who said how fast it should run or how slow it should run. It was his duty to control the running of the train between stations.

As I have said, in passing over the summit a mile and three-' quarters away, the train was not going very fast; it was going up grade. It started on down the grade to this point, and as I have said there was in that mile and three-quarters a drop of seventy feet. This was a heavy train. The fireman says that the train had a speed of at least twenty miles an hour, and in that he is supported by the others of the crew, the conductor and brakeman. The fireman says the engineer took his position in the cab on the seat, with a window back of him closed; it was a little cold. As they come over the summit he had the window shut that was at his right hand side. There was a window in front of him, of course; he sat there with his arms folded until after they were at the point of the rock in this cut; they had passed nearly through it — got nearly past this point, perhaps nearly at this main point, Rock Point, when the fireman looking out of his window on his side — being on the left hand side, inside of the curve, passing around the curve, and discovered this rock lying. across the track, at a distance perhaps of 100 feet ahead of him, as he judged. He shouted to the engineer, that there was a rock on the track. The engineer then jumped and pulled at the throttle — set his air brake — and about that time they were on the rock. The engine, as I have said, was overturned, and the cars, some fifteen or sixteen of them, were piled up to a height of a great many feet, one on top of the other; and a great deal of damage was done to the train.

Now the question that is argued here, as I have said, is whether this engineer was guilty of negligence, such negligence as precludes a recovery. It is claimed upon the part of the defendant in error that he had a right to rely upon the fact that there should be a watchman there. It must be noted that while he was running on this line back and forth, that these watchmen are only there from time to time, not a steady fixed practice. And that he, when he come over that point, would not know whether there was in fact a watchman there or not. We do not consider that as very material. This engineer was placed in a position of responsibility; he was placed in charge of the engine upon this train, and placed in control of the train itself and the rate of speed at which it should run, at least between stations. His duty to his company was to obey its orders; and if the com-pany, in the performance of this duty for the operation of its property, said to him by an order that he should look out for falling rocks, it was an order to him to so run his train and take such care that he would not injure, by any act of his, at least, the train that was in his charge. He had but one thing to do and that was to obey that order; and he could only obey it by operating his train at such a rate of speed as that he could stop it within a very short distance. It is said by some it should be down to between five and six miles an hour. He had the power to do this; the power in his hands to stop that train at any point he chose between stations. But from all the evidence it seems that instead of taking such steps he sat down and allowed his train to proceed in the ordinary manner at such a rate of speed as it would obtain by its own weight, in going down a grade with this fall in it. And in doing that we think he was guilty of negligence, disobedience of orders; and that it was due to that disobedience of orders, apparently, that this accident occurred. Upon the facts of this case if he had been running his train as he should have run it, he would have been able to stop the train before it reached the rock; and would have preserved his own life and the property of the railway company. It is a case, if you please, where there was negligence of both parties — negligence may be assumed of the railway company, and negligence of the engineer. He had been cautioned by his conductor before that time that he had been running down that cut too fast, but he did not seem to have noticed that.

C. A. Seiders, for plaintiff in error.

Kohn & Northup, for defendant in error.

We think upon the clear rules of law, where the facts are as we have stated them, the plaintiff here is precluded from recovering for the death of her husband. It is a case where death was caused by his own negligence, and he could not recover if he were only injured and sued the company; so she can not recover.

With this view of the case, the judgment of the court of common pleas is reversed, the verdict set aside and the ease remanded for a new trial.


text:
    THE ACT REGULATING APPOINTMENT OF CONDUCTORS, ETC., UNCONSTITUTIONAL
    [Circuit Court of Franklin County.]
    The C., C., C. & St. L. Railway Co. v. State of Ohio.

    Decided, 1903.

      Constitutional Law — Requirements of Section 3365-11 as to Conductors, Engineers and Flagmen — Inequalities of — The Act Unconstitutional.

    The act of January 31, 1893, regulating the appointment of conductors, engineers and flagmen on certain steam railroads of the state, is unconstitutional in that it creates favored classes, prescribes no standard or test of efficiency, arbitrarily says who may labor at a given employment and who may not, fails to provide for the safety of the public, and unequally affects property not differing in kind or use.

      Wilson, J.; Summers, J., and Sullivan, J., concur.
    Heard on error.

       Affirmed by the Supreme Court, without report.

   This proceeding questions the constitutionality of the act passed January 31, 1893 (90 O. L., 20), regulating the appointment of conductors, engineers and flagmen on certain steam railroads in the state.

The action below was one to recover the stipulated penalty for a violation of the statute, the defendant company having employed a person as conductor not in the class prescribed by its terms.

A demurrer was interposed to the answer, admitting the employment, but filed for the purpose of pleading the facts in the case, so as to make appear with more particularity the inequalities and unreasonableness of the statute. This demurrer was sustained and the plaintiff had judgment, thus raising the question. Since the cause was submitted in this court, the Supreme Court has handed down an opinion in the case of Harmon v. The State, 66 O. S., 249, which is decisive of the question here, and renders unnecessary any extended review of the authorities or discussion of the subject. The case referred to was a suit to test the constitutionality of the act of March 1, 1900 (94 O. L., 33), regulating the appointment of stationary engineers. The act provided among other things as follows:

“See. 7. Any engineer who has been employed continuously as a steam engineer in the state of Ohio for a period of three years next prior to the passage of this act, and who files with his application a certificate of such fact under oath, accompanied by a certificate from his employer or employers verifying the same, or who holds a license issued to him under any ordinance of a municipal corporation of this state, shall be entitled to a license without further examination.”

Of this the Supreme Court says, page 254:

“It is arbitrarily forming a favored class, and is in conflict with Section II of the Bill of Rights which guarantees equal protection and benefit; and it is also in conflict with the purpose for which the Constitution was established, which was to promote our common welfare. This section of the act promotes the welfare of a particular three-year class instead of the common welfare of all.”

The act under review in the case at bar provides among other things:

“It shall be unlawful * * * to employ any person in the capacity of conductor of a passenger train or trains unless such person has had at least two years’ experience in the position'of conductor of either passenger, freight or construction train within six years next preceding the time of such employment. * * * But nothing in this act shall be so construed as to prevent any such railroad company or corporation from retaining conductors in its employ at the time of the passage of this act. ’ ’

That is to say, a person who has been a conductor of passenger, freight or construction train for two years within the last six before the employment may be employed without examination as to his competency; but a person so employed for a term one day less than two years, shall not be employed, however skillful and competent he may be; and a person who has been in the employ of the company for one day previous to the passage of the act may be retained however incompetent and inexperienced he may be. The act creates arbitrarily two favored classes: Those who have had two years’ experience in the last six before employment, and those who happened to be in the employ of the company at the time of the passage of the act. Similar and even more glaring inequalities might be pointed out governing the employment of engineers, and others. The act prescribes no standard, ánd no test of efficiency; arbitrarily says who may labor at a given employment, and who may not, and fails to provide for the safety of the public, which must have been the purpose of any lawful exercise of the police power of the state.

So, too, the limitation of the act to “any railroad company or companies running or operating a steam railroad in the state of Ohio, thirty miles in length or more, and the same having been operated for three years or more” is a discrimination without reason, affecting unequally property not differing in kind or use, as well as employes in the same class of service. The act must be held unconstitutional. The judgment of the court of common pleas is reversed, the demurrer overruled as to the answer, sustained to the petition, and the petition dismissed.


text:
    SALE OF TAXES—LIS PENDENS.
    [Circuit Court of Lucas County.]
    The Security Trust Company v. C. W. Root.
    Decided, October 31, 1903.

      Lis Pendens — Doctrine of, Not Applicable — As Against Proceedings Under a Tax Sale — Paramount Interests of the State.

    1. Tbe Hen of taxes on land in favor of tbe state, and tbe right of the state to proceed in tbe collection thereof in the mode provided by law, are paramount to the ownership or interests of private parties, and are not affected by the circumstance that a suit may be pending to foreclose and extinguish the title of the owner.
    2. The doctrine of Us pendens does not apply to one who obtains an interest in the subject matter of the suit through one having a title or Hen superior to that asserted in the suit relied upon as a Us pendens, that is not attacked in such suit, and the owner of which is not a party to such suit; lis pendens, therefore, does not apply to one acquiring an interest or Hen at a tax sale.
    Parker, J.; Hull, J., and Haynes, J., concur.
   In the court below a general demurrer to the petition was sustained, and plaintiff not desiring to plead further, a judgment was entered against him, and he prosecutes error to this court, so that the question is presented here, whether the petition contains facts sufficient to constitute a cause of action in favor of plaintiff against defendant.

Plaintiff sets forth in its petition that it is the owner of the westerly thirty-eight feet of lot 10, Machen’s first addition to the city of Toledo. It then sets out in detail how it came to be the owner of these premises. The history of the matter, in brief, is that at one time it had a mortgage upon the premises; that it foreclosed the mortgage, bid the premises in at foreclosure sale, which was confirmed and a deed made. Then it sets forth that pending these proceedings in foreclosure the premises were sold for taxes at a delinquent sale to the defendant, Root; that Root acquired a certificate such as is provided by law showing that he was the purchaser at this tax sale; that Root claims to have a lien on the premises by virtue of the proceedings under the tax sale. But the plaintiff says that Root having purchased pending these foreclosure proceedings, he took subject to the doctrine of Us pendens and acquired no interest that can be asserted against plaintiff’s title.

In a case reported in the 20 Ohio Circuit Reports, at page 649 (State, ex rel Mortgage & Trust Co., v. William M. Godfrey, Auditor), we had a similar state of facts under consideration. The real question there was as to the duty of the auditor to make a transfer upon the boobs, the question arising between one who had purchased the premises at foreclosure sale and one who had acquired a tax title. Our decision there was reversed by the Supreme Court in 63 Ohio St. We had occasion to discuss the question arising in this case, and in the course of the opinion this was said:

_ “The lien of taxes on land, in favor of the state, and the right of the state to proceed to the collection thereof, in the mode provided by law, are paramount to the ownership or interests of private parties, and are not affected by the circumstance that a suit may be pending to foreclose and extinguish the title of the owner. It is not necessary or proper to make officers, upon whom the duty devolves to collect these revenues, or the state, or political bodies to which these revenues go, parties defendant to the action. The government and its officers are not to be hindered, delayed or obstructed in proceeding according to law to collect taxes for the support of the government, by the litigation of private persons with respect to rights and interests subordinate to the claims of the state.
“To hold otherwise would be to read into the tax laws important conditions and limitations not appearing there and would be wholly unauthorized. Such provisions would make it easy for fictitious or long drawn out litigation to defeat the evident and proper policy of the state; that is, to make prompt collection of its revenues. That this is not permissible and wholly obnoxious to the policy of the law, is evident from many of the provisions of the tax laws and from their general scope and obvious policy. The rights of a purchaser at a tax sale under circumstances like those set forth here, are not affected by the foreclosure of the mortgage. We think that is a necessary conclusion to be drawn from the holding in Ketcham v. Fitch, supra. As to such purchases the rules of lis pendens do not apply, and to his lien or title acquired from the state the effects of lis pendens do not attach.”

The case of Ketcham v. Fitch is reported in 13 O. S., 201. We still adhere to the views there expressed and just quoted, which views we believe are not antagonized by the reversal of the judgment by the Supreme Court. Counsel for plaintiff in error insist that we did not upon that occasion give consideration to the provisions of Section 5055, Revised Statutes, upon the subject of lis pendens. That section reads:

“"When the summons has been served, or the publication made, the action is pending so as to charge third persons with notice of its pendency; and while pending no interest can be acquired by third persons in the subject matter thereof, as against the plaintiff’s title.”

But the doctrine of lis pendens does not apply to one who obtains an interest in the subject matter of the suit through one having a title or lien superior to that asserted in the suit relied upon as a lis pendens, that is not attacked in such suit and the owner of which is not a party to the suit; therefore the doctrine of lis pendens does not apply to one acquiring an interest or lien at a tax sale. And this principle receives illustration in the case of Porter v. Barclay et al, 18 O. S., 547. Counsel for plaintiff in error also cites in support of his contention the case of Crum, Treasurer, v. Cotting, 22 Iowa, 411. The fourth proposition of the syllabus reads:

“A purchaser of real estate at a tax sale made after the commencement of an action and the filing of a petition to foreclose a mortgage on such estate in favor of the university fund, acquires no interest in the premises as against such mortgagees which would not be cut off or bound by the decree in favor of said fund.”

But that authority is not in point here and should have no influence upon our decision for'the reason that that decision was compelled by a statute of the state of Iowa, providing:

“Section 811. That in all cases where real estate is mortgaged or otherwise incumbered to the school or university fund of this state, 'the interest of the person who holds the fee title shall alone be sold for taxes, and in no case shall the interest or lien of the state be affected by any sale of such incumbered real estate made for taxes,”

Birchard A. Hayes, for plaintiff in error.

John C. Munger, for defendant in error.

making the claim for taxes subordinate to the claim or interest of the state under a mortgage to the school or university founded by the state.

On the other hand, counsel for defendants in error have cited a number of cases in support of the contention that the purchaser at a tax sale is not affected by the lis pendens decisions of courts of other states, but we have not deemed it necessary (being so fully convinced upon this point) to examine those eases. I will, however, mention them that they may go into this report, viz.: Wright v. Walker, 30 Ark., 44; Baykin v. Jones, 67 Ark., 547; Irving v. Cunningham, 77 Cal., 52; Wilson v. Bank, 121 Cal., 630; Barrelle v. Delassus, 16 La. An., 280; Flower v. Beasley, 52 La. An., 280; Becker v. Howard, 4 Hun. (N. Y.), 359; last case affirmed, 66 N. Y., 5.

The judgment of the common pleas court in this case will be affirmed.


text:
    DEFAULTED PREMIUMS ON LIFE INSURANCE.
    [Circuit Court of Lucas County.]
    Metropolitan Life Insurance Co. v. Florence A. Walton, Administratrix.
    Decided, March 10, 1904.

      Life Insurance — Incontestability of Policy after Two Tears — Except for Eraud or Misstatement of Age — Relates only to What Occurred at the Inception of the Contract — Waiver of Default in Payment of Premiums.

    1. The provision endorsed upon a policy of life insurance that “this policy shall he incontestable after two years, except for fraud or misstatement of a'ge,” is similar to the provision in Section 3626, Revised Statutes, and relates entirely to what occurred at the time the policy was issued or the application made, and has no reference to default in the payment of premiums.
    2. Where the policy contains the provision that “should this policy become void in consequence of non-payment of premiums, it may he revived if not more than fifty-two premiums are due, upon the payment of all arrears, and the presentation of evidence satisfactory to the company of the sound health of the insured,” the company may rightfully refuse to accept four weeks premiums on a policy, forty-six days in arrears, an investigation having shown that the insured was far gone with consumption, his death having occurred seventeen days thereafter.
    Hull, J.; Parker, J., and Haynes, J., concur.
   This action was brought in the court of common pleas by the defendant in error, who was the plaintiff! below, upon a policy of life insurance issued by the insurance company, upon her husband’s life, for the sum of $500. The dues upon this policy were sixty-two cents every Monday. Payment was refused by the insurance company upon th^ ground that the premiums were in default at the time of the death of Mr. Walton. Suit was brought to collect the amount of the policy. The case was tried to the court and jury and a verdict returned for the amount of the policy, with interest, and judgment was entered thereon.

It is sought by this proceeding in error to reverse that judgment.

It is conceded that at the time of the death of Walton the policy was in default for the payment of dues or premiums; but is claimed that the company had waived the payment of the premiums upon the exact day that they were due. The policy contained a provision, in substance, that if the premiums were not paid when due, that the policy should be void, and following that, this was also in the policy:

“And it is agreed that the foregoing provision which avoids the policy in case any premium shall be overdue, shall be considered in no respect waived by any act of grace by the company in acceptance of overdue premiums upon this or any other policy. ’ ’

There is a further provision on the face of the policy that agents are forbidden from receiving premiums more than four weeks after they are due. This provision is to be considered with another provision of the policy which is endorsed on the policy, to which I will refer later.

On the back of the policy under the head of “Privileges and Concessions to Policy Holders,” among other things are these provisions:

“Incontestability — This policy shall be incontestable after two years, except for fraud or misstatement of age.-”
“Grace period. — Should the death of the insured occur while any premiums are in arrears not exceeding four weeks, the company will, nevertheless, pay the policy, subject to its conditions. ’ ’
“Revival — Should this policy become void in consequence of non-payment of premium, it may be revived, if not more than fifty-two premiums are due, upon the payment of all arrears, and the presentation of evidence, satisfactory to the company, of the sound health of the insured.”

The policy was taken out in June, 1899. Walton died June 9, 1902 — about three years after the policy was issued. During that time the insurance was paid a portion of the time by Walton’s wife, and a portion of the time by him. For about a year at the last, whatever premiums were paid were paid by Mrs. Walton. They were in arrears for premiums several times. Sometimes premiums were due more than four weeks, which was called the grace period; they ran over this time a few days occasionally, and the money was accepted and the policy revived, not more than fifty-two weeks having gone by. On May 23, 1902, the premiums were in arrears forty-six days, six Mondays having gone by, and some days over, and Mrs. Walton tendered to the agent the premium for four weeks; this left three weeks still unpaid, but within the grace period, as it is called; these premiums were refused by the agent; and on the ninth of June following, Mr. Walton died. The question submitted to the jury was whether there had been such acts on the part of the company as would lead a reasonably prudent person to believe that the company had waived the requirement that premiums should be paid on the Monday of each week. And a verdict was returned in favor of the plaintiff.

It is claimed that the judgment is wrong. It appears from the evidence that in April before Mr. Walton’s death, Mrs. Walton went to the office of the company and told the young man in charge that she could not afford to pay these premiums any longer; that they could see Mr. Walton and ascertain whether he would pay them (the insurance was on his life for her benefit); they were not living together, but had been separated for about a year. He was keeping a saloon or tending bar in another part of the city. The next month, May 23, she had not paid anything more, and being in arrears at the time the talk occurred at the office in April, she tendered to the company four weeks’ premiums. Before accepting these premiums the agent undertook to ascertain the health of Mr. Walton; he went to the saloon where he was employed, and there found him in a bad state of health, suffering from consumption or some pulmonary disease, breathing very hard, so hard that he could be heard across the room. He reported that fact and the company refused to accept the premiums the day after Mrs. Walton had made the tender on May 23. Two or three days after that Mr. Walton was taken to the hospital and on June 9, seventeen days after the tender was made, he died. The question is, whether under these circumstances the company is liable upon this policy.

It is said that this policy, having run more than two years, there were only two grounds upon which it could be contested, according to this provision endorsed upon it and which I have read:

" This policy shall be incontestable after two years, except for fraud or misstatement of age.”

In our judgment that provision relates entirely to what may have occurred at the time of the issue of the policy or the application, at the very inception of the contract, and does not relate to non-payment of premiums; and does not mean that no matter if at the time of death the insured is in default for payment of premiums in any amount or for any length of time, the policy shall be paid. It is similar to the provision contained in Section 3626, Revised Statutes, of this state, which provides:

“All companies, after having received three annual premiums on any policy issued on the life of any person in this state, are estopped from defending, upon any other ground than fraud, against any claim arising upon such policy by reason of any errors, omissions or misstatements of the assured in any application made by such assured on which the policy was issued, except as to age.”

We do not think that this provision of the policy refers to or was intended to refer to the matter of payment of premiums that were overdue “after two years.” If this were true, one might fail and refuse to pay after that period for a year or two years, or for an indefinite time, and his policy could not be contested or payment refused upon that ground. This would be unreasonable. The payment of dues lies at the very foundation of life insurance. Without their being paid with reasonable promptness, no insurance company can. do business.

But it is said that the company waived the payment of these dues upon the Monday of each week, and there is evidence tending to show this, as premiums were received on several occasions, not only after they became due, but after the grace period of four weeks had gone by.

There is, however, a provision which I have read on the back of this policy that in case the policy is revived it must be upon the payment of arrears and the presentation of evidence satisfactory to the company of the sound health of the insured. The policy upon its face provides, “if any premium shall not be paid when due, this policy shall become void;” but on its back is the provision that if the insured dies within four weeks after he is in default for dues, the policy shall be regarded as in full force; and the further'provision:

“Should this policy become void in consequence of non-payment of premiums, it may be revived, if not more than fifty-two premiums are due.”

That clause, a part of which I have just read, contains the condition referred to:

“Upon the payment of arrears and the presentation of evidence satisfactory to the company of sound health of the insured.”

There is no evidence in this record that the company or any of its agents at any time waived the provision that if the policy was revived, the company must have satisfactory evidence of the sound health of the insured. Mrs. Walton says herself that they always asked her what his health was; how he was, or whether he was well, and so on, when she paid up the back dues and thus revived the policy. So it can not be said that, the company, by any of its acts, or the acts of any of its agents, had ever waived this, provision of the policy. That was part of the contract and one of the conditions upon which the policy could be revived, that such evidence be presented to the company. This seems to us to be a very reasonable provision that when one is in default for non-payment of premium for a period not exceeding fifty-two weeks, his policy, which has become void, can not be revived, unless he is in reasonably good health, and this is shown by satisfactory evidence to the company.

Now what were the circumstances at the time this tender was made? I have already stated them briefly. Before the money was received the agent undertook to satisfy himself as to the health of Mr. Walton. Mrs. Walton had theretofore notified the company that she could no longer pay these premiums; and apparently on learning (that would be the inference) that Mr. Walton was in very poor health, she made this tender to the company. The agent visited Mr. Walton and ascertained that he was in very poor health, and within seventeen days after that he died. This provision not having been waived by the company upon any occasion, we are of the opinion that the company was not bound to receive the dues under these circumstances, with Mr. Walton in the condition of health that he was. Any person insured in this company, who allowed his dues to go by the day of payment, took his chances of getting into such condition of health that the company would not permit him to revive his policy, there being no evidence that the company had ever waived this provision as to the health of the insured. We are of the opinion that this verdict is not sustained by the evidence; but that the uncontradicted evidence shows that the policy had become void at the time the tender was made, and the undisputed evidence is that Mr. Walton was in such condition of health at the time that the company was under no obligations to accept the premiums or revive the policy.

George B. Boone, for plaintiff in error.

O. S. Brumback and A. T. Goorley, for defendant in error.

In view of this, a judgment should be entered here in favor of the company; we see no reason for sending the case back for a retrial, the undisputed evidence showing that this provision as to health had never been waived, and showing further that Mr. Walton at the time the dues were tendered was practically in a dying condition, and did die within a very short time thereafter. In our opinion the company is entitled to a judgment upon this record and that will be the order of the court.

The judgment of the court of common pleas will be reversed and judgment entered in favor of the plaintiff in error.


text:
    TESTIMONY IN WILL CASES.
    [Circuit Court of Hamilton County.]
    Rosa Rapp et al v. Magdalena Becker et al.
    Decided, April 5, 1904.

      Wills — Testimony in Suits to Set Aside — Not the Attempt hut the Effect of Attempts to Unduly Influence that Determines — Province of the Court and of the Jury — Charge of the Court — Examination of Juror on Voir Dire.

    1. The statement in the charge to the jury in a suit to contest a will, that “the important item of evidence bearing upon the condition of mind of the testator is the will itself,” is erroneous, in that the court invaded the province of the jury by inviting a substituting of its opinion for that of the jury as to what item of evidence should be regarded as of special importance.
    2. It is not the effort or attempt to coerce a testator as to the will he shall make, but the effect which such attempt or threats had upon him, that determines whether or not he was unduly influenced in the making of the will.
    3. Where the court delivers both a correct and an incorrect charge with reference to the same matter, and it can not be determined which instruction the jury followed, it will be regarded as prejudicial error.
    4. The admission in evidence of a statement, not made in the presence of the testator or otherwise communicated to him, is not prejudicial, notwithstanding the irrelevancy and immateriality of such matter.
    5. But to admit testimony having no tendency to establish undue influence and which related to events occurring after the execution of the will, is error.
    6. The principle that what the testator never knew could not have influenced him and should not be admitted in evidence, is not literally true, for the reason that he may have been influenced by conditions the cause of which was unknown to him, and a purpose of influencing would be all the more effective if concealed.
    7. A juror is not guilty of misconduct because of a misunderstanding between counsel and himself as to his connection with a previous case, where the statement which he made was not intentionally wrong, hut was due to the mode of inquiry adopted hy counsel.
    Giffen, J.; Swing, J., and Jelke, J., concur.
   The original action was brought to set aside the will of Frank Rapp, deceased, on the ground of mental incapacity and undue influence.

The evidence was insufficient to sustain the verdict setting aside the will upon the ground that the testator was of unsound mind and could only be sustained upon the ground that the beneficiary, Rosa Rapp, exerted undue influence over the testator at the time of the execution of the will. The testimony of the plaintiffs tends to show that the testator through the efforts of Rosa Rapp was estranged from his other sisters, although the only evidence that it was operative at the time of the execution of the will was the want of any provision for the 'other sisters by the will itself. We are unwilling, however, to reverse the judgment upon this ground.

It is claimed by the plaintiffs in error that the court erred in giving certain special charges at the request of the defendants in error:

“If the jury find that Frank Rapp was at the time of the making of his will in a morbid condition of mind, so that his brain was affected by disease, crazed by stimulants or other causes so as to lead him to do things which at other times he would not have- thought of doing, in the eye of the law his feelings, desires and acts at such time are not considered to be the feelings, desires and acts of the man, and a will made by him under such influences and conditions of mind would not be his will, if such influences affected his mind to such extent that he was unable to understand and appreciate his relations to and obligations to his relatives and the persons who would be the natural objects of his bounty in making his will.”

Counsel claim that the word “obligations” in this charge means legal obligations to his relatives, but it is not so expressed, and taken in connection with the special charges given at the request of the defendants below it clearly appears that the court was referring to the moral obligations or duty of the testator to his relatives.

The court also charged the jury as follows:

“In cases like the one at bar, the important item of evidence bearing upon the condition of the mind of the testator is the will itself and although the fact that a will is unjust, or wrong, or absurd, does not of itself prove the incapacity of the testator to make a will or that it was made by him under undue influence, yet it is an item of evidence for the jury to consider as bearing upon the question and it is for the jury to determine what weight shall be given it.”

The objection to this charge is that it gives undue prominence to the single item of evidence, to-wit, the will. It is true that the court adds that it is for the jury to determine what weight shall be given to it, but by designating it as an important item and in calling the jury’s especial attention to such item, the court invades the province of the jury by inviting a substitution of its opinion for that of the jury. We think, therefore, that there was error in giving the charge.

The following charge was also given:

“In order to constitute undue influence in the making of a will it is not required that any physical force should be used, but any restraints or threats or influence brought to bear upon the testator, or persistent importunities which he has not the strength to resist, if exerted upon him to coerce him into making a will or any of its provisions, is undue influence within the meaning of the law. And it matters not how small or great the influence may be so long as it destroys the free agency of the testator. ’ ’

The clause in this charge “if exerted upon him to coerce him into making a will” is equivalent to saying, if exerted for that purpose it would constitute undue influence, but it is not the effort or attempt to coerce, but it is thn-effect the restraint or threats have upon the testator that constitutes undue influence.

The purpose to coerce may be ever so clear and certain, yet if the restraint or threats fail to control or affect the testator there can be no undue influence. It appears that the court gave a correct charge on this subject at the request of the plaintiffs in error, but it can not now be determined which charge the jury pellee.

followed, hence we think it was error prejudicial to the plaintiffs in error.

The next alleged error is the admission in evidence of the declaration of Rosa Rapp, at page 55 of the bill of exceptions, where, in speaking of the testator associating with Carrie Heckle, she said:

“That she didn’t think that she was a girl for Frank to go with. Frank ought to get somebody his kind that had money like he did. ’ ’

This was said not in the presence of the testator nor was it otherwise communicated to him. We think it is therefore irrelevant and immaterial but not prejudicial.

The next alleged error is the admission of the declaration of Rosa Rapp, page 158 of the bill of exceptions, as follows:

“Rosa told me that Jacob had $1,500, and Frank $500 in the business. ’ ’

Jacob and Frank had been partners in the business and upon the death of Jacob, Frank had treated the partnership as though they were equal partners. This declaration was not competent to prove the amount that each partner had put in the business, nor was it competent as an admission against interest, it having been made during the lifetime of Jacob when Rosa had no interest under the will of Frank Rapp.

The declaration of Rosa Rapp, page 262, made to her sister, Frida Distel, when she signed a paper releasing to her father and mother her interest in the estate of her deceased brother, Jacob, was irrelevant and immaterial, but not prejudicial.

The account given by Mary Dotzauer, of the action of the mother when it was claimed she was pursued by Rosa Rapp, tended to prove misconduct of Rosa Rapp and undue influence over her mother, but it has no tendency to prove undue influenee over the testator, especially as it occurred after the execution of the will. It was, therefore, error in admitting it as evidence.

Counsels for plaintiffs in error state the following rule:

“What the testator never knew could not have influenced him, and should not have been admitted in evidence.”

This is not literally true, because certain conditions, the cause of which was unknown to the testator, might have influenced him in the execution of the will. If Rosa Rapp created such conditions, and they influenced the testator, she is responsible therefore, although he may have been entirely ignorant of her agency. If she entertained any purpose of influencing the testator, it would be all the more effective if her connection with it was concealed.

The evidence tending to show that Frank Rapp was not an equal partner with his brother Jacob, and that therefore he obtained money which properly belonged to the estate of Jacob Rapp was admissable to show the source of that part of Frank Rapp’s estate, and as to which there was an additional obligation to his sisters.

It is further claimed that there was misconduct on the part of one of the jurors when examined, touching his qualifications as juror, it being claimed that he answered “No” to a question whether he had been a party to a suit involving the contest of a will, when in fact he was sueh party. The following examination occurred:

“Have you ever been parties to any proceeding in which a will has been contested? You have, Mr. Thornton? Will you kindly tell us what the nature of it was?
Mr. Thornton — “Well, it was Kirby against Kirby.
Q. You were a witness in the case?
A. No, I was not a witness. I was connected with it.
Q. You simply had some relationship to some of the parties to the suit; that is, you were not a party yourself?
A. No.”

The record is incumbered with a great mass of testimony upon this question alone, submitted at the hearing of a motion for a new trial. If it serves any good, purpose it shows that the juror did not intentionally misstate his relation to the case of Kirby ag’ainst Kirby, and that the misunderstanding was due not to any misconduct of the juror, but to the mode of inquiry adopted by counsel. He was advised by the juror that he was not a witness, but was connected with the case, and the natural inquiry would have been what that connection was. The counsel chose to ask a leading question, to which he evidently expected the juror to give his assent, which could be done by an answer of either “yes” or “no” according to his manner and tone of voice, whether with a rising or falling inflection. So likewise his dissent.

Burch & Johnson, for plaintiffs in error.

Theodore Horstman, for defendant in error.

The court, therefore, did not err in overruling the motion for a new trial upon this ground.

For the reasons above stated, the judgment will he reversed and the cause remanded for a new trial.