text:
    Speyer & Co. v. Baker.

      Sale of chattel property — To be paid for in instalments — Title to remain in vendor until certain amount paid — Rights of vendor and of vendee— Sections 7913-72, 73, Revised Statutes.

    1. Sales of chattel property, to be paid for in whole or in part in instalments, on condition that it shall belong to the purchaser when the amount paid thereon shall be a certain sum, or the value of the property, the title to remain in the vendor until such amount shall be paid, are, when made subsequent to the act of May 4, 1885, (82 Ohio Laws 238), now sections 7913 — 72, 73 of the Revised Statutes, governed by the provisions of that'statute ; and the rights of the purchaser, under the statute, are unaffected by the execution of a mortgage on the property, at the time of the sale, to secure instalments of the purchase price.
    2. Where a purchaser at such sale has made payments on the property, he is entitled to its possession, though in default as to other instalments, until there shall be refunded or tendered back the amount so paid, less a reasonable compensation for the use of the property and for any damage done to it while in his possession ; and the amount which he is so entitled to have refunded should be awarded him as damages when the property is taken in replevin at the suit of the vendor.
    (Decided October 11, 1898.)
    Error to the Circuit Court of Hamilton county.
    The original action was replevin brought by Speyer & Co., against Margaret Baker, before a justice of the peace in Hamilton county, to recover possession of a lot of household goods. In the court of common pleas, on appeal, where issue was joined on the plaintiffs’ right of possession, the verdict and judgment were in their favor. That judgment was reversed by the circuit court.
    The record shows that Speyer & Co., whose business was that of selling household furniture on the instalment plan, sold in that way, to the defendant, goods of that kind to the amount of $885.-55, on the thirty-first day of May, 1893, and, on the third of July, 1893, other goods of a like kind to the amount of $18.75. Upon the first of these purchases the defendant paid in cash the sum of $100.00, and agreed to pay the balance in weekly instalments of $7.50 each; and upon the other purchase she paid $5.00 in cash, the payment of the balance to be made in weekly instalments of $1.50 each. At the time of each sale a chattel mortgage was taken by the plaintiffs on the goods sold, which was duly filed in the proper office. These mortgages are alike in all respects except in the amounts and the description of the property. The following is a copy of the first one, omitting the description which is unimportant in the consideration of the case:
    “This agreement made and entered into this thirty-first day of May, 1893, by and between Margaret Baker, of Cincinnati, party of the first part, and Speyer & Co., of Cincinnati, Ohio, of the second part. Witnesseth, That the said party of the first part, in consideration of eight hundred and eighty-five and fifty-five one-hundreths dollars, to her paid by Speyer & Co., the receipt of which is hereby acknowledged, does hereby bargain, sell and convey to the said Speyer & Co., and assigns, the following described personal property, now situated and being in and located at 104 Garfield Place, city of Cincinnati, county of Hamilton, state of Ohio, to-wit: (Here follows a description of the property.)
    ‘ ‘ To have and to hold the same to the use of the said Speyer & Co., and assigns. Provided, nevertheless, that, whereas, the said party of the first part is indebted to the said Speyer & Co., in the sum of eight hundred and eighty-five and fifty-five one-hundredths dollars. Now, if the said party of the first part shall pay to said Speyer & Co., at their office in said city of Cincinnati, the said sum of eight hundred and eighty-five and fifty-five one-hundredths dollars; one hundred dollars thereof at once, and the balance in weekly instalments of seven and fifty one-hundredths dollars each, payable on Saturday of each and every week, commencing for the first payment on June 17, 1893, except as herein mentioned below. It is hereby understood and agreed that, aside from the above agreement, said Margaret Baker, party of the first part, shall, on September 1, 1893, pay to Speyer & Co., party of the second part, the sum of one hundred dollars, said amount to be credited to this mortgage, until the said sum of eight hundred and eighty-five and fifty-five one-hundredths dollars is paid, then this conveyance shall be void, otherwise to be and remain in full force. And the said party of the first part hereby agrees that in case of default of payment of any weekly instalment, on the day on which it shall become due, the whole sum then unpaid on this agreement shall in such case immediately become due and payable.
    “And the said party of the first part covenants and agrees that she will insure the said property for not less than eight hundred and eighty-five and fifty-five one-hundredths dollars, and keep the same insured during the continuance of this agreement, and if she neglects or fails to do so, then the said Speyer & Co., may insure the same at the expense of the undersigned; and in case of loss, if any, payment shall be made to the said Speyer & Co., for the uses and purposes herein mentioned; that she will not permit the said property, or any part thereof, to be injured, spoiled or damaged; that she will keep the same in good order and repair ; and that she will not sell, pledge or otherwise dispose of said property, or any part thereof, or attempt to do so. And the said party of the first part further covenants and agrees that on default of payment of any of said instalments or payments, or on any sale or pledge, or attempt to sell or pledge, or dispose of said goods and chattels, or any part of them, or to remove them, or any part of them, from the county, or from their location, or upon any seizure of them, or any part of them, by process of law, or upon any failure to comply with the said provisions as to insurance; or if the said Speyer & Co., shall at any time deem themselves in danger of losing the said property, or any part thereof, or if they shall at any time deem themselves insecure as to the safety or proper treatment of said property, or any part thereof, or upon any failure to keep such'Chattels in proper order and repair, or in case the said party of the first) part shall suffer such chattels to be injured, soiled or damaged, except the usual wear and tear; or in case said party of the first part shall fail or refuse to permit said Speyer & Co., or any of their agents, at any and all times, to see and examine said property; or upon any breach of any covenant or covenants of this agreement, then the said Speyer & Co. may, without demand, which is hereby waived, take the same into their possession, and dispose of them at any time thereafter, at public or private sale, as in their judgment may seem best, hereby waiving all demands for payment of the amount due on within agreement, and any and all notice of the time and place of said sale, and the said Speyer & Co. are hereby authorized at such sale to purchase such portion of said goods and chattels as they may deem best, and out of the proceeds of sale to pay : Fwst, The reasonable cost and expense of taking and keeping and selling the same, including attorney’s fees; Second, The amount of principal and interest that shall be due and unpaid thereon; Third, The balance, if any, to said party of the first part.
    “And the undersigned waives any and all notice of the exercise by Speyer & Co., of the rights reserved to them under this agreement.
    “In witness thereof, the said Margaret Baker has hereunto set her hand, the day and year first above written. Margaret Baker. ”
    The record also shows that the defendant paid her weekly instalments on both purchases, until her payments, including the amounts paid at the times of the purchases, amounted in the aggregate to the sum of $253.50. The last payment was made on the first day of November, 1893, when, becoming unable to pay further, she consulted counsel who sought an adjustment with the plaintiffs on the basis that she was entitled to a return of part of the amount she had paid before she could be compelled to surrender the property. The plaintiffs declined to entertain the proposition, and, without having paid or offered to pay the defendant any part of the sum they had received from her, brought the suit before the justice.

      It appears from the bill of exceptions that on the trial in the common pleas, evidence was given which fairly tended to prove that when the sales were made to the defendant, it was verbally agreed between the parties that the goods should remain the property of the plaintiffs until the purchase price should be fully paid, and should become the property of the defendant only upon such payment being made. Upon the conclusion of the testimony the defendant requested the court to give in charge to the jury each of the following instructions :
    “1. If the jury find from, the evidence that the transaction between the parties was in the nature of a conditional sale, i. e., that the goods were bought on the instalment plan, to be paid for in whole or in part in instalments, and that the purchaser, the defendant, was not to become the owner of them until paid for in full, even though, she did sign the instrument which purports to be a chattel mortgage, if signed at the time of the transaction; and if the jury find that she did actually pay for them in part in instalments, and that the plaintiffs took possession of the goods without tendering or refunding to the defendant the sum or sums of money so paid, or any part of them, you will find that the defendant was entitled to the possession of the property at the commencement of this suit, and your verdict shall be for the defendant.
    “2. If the jury find for the defendant — the right of possession in the property being the only interest claimed by the defendant — the jury will further determine the value of this possessory interest; and in estimating- the value of this interest, it will be necessary to consider the total amounts of money paid by the defendant to the plaintiffs in payment of the bill of goods, and deduct therefrom what the jury may consider, from the testimony, to be a reasonable compensation for the use of the geods, from the time the goods were purchased to the time they were taken from the defendant’s possession, which compensation shall in no ease exceed fifty per cent, of the total amount paid. The remainder, after the above deduction, will be the value of the defendant’s interest.
    “3. If the jury find for the defendant, they will also assess to her such damages for the taking and detention of said property as they think right and proper, and such other damages as the evidence may show were suffered by the defendant.”
    The court declined to give either of these instructions, and charged the jury:
    “That decisions had been rendered in the common pleas court holding that a chattel mortgage of the kind in this case does not come within the purview of sections 7913-72,73 of the Revised Statutes, and by which decisions the court felt itself bound, and therefore directed the jury to return a verdict for the plaintiffs with one cent (lc.) damages.”
    The defendant duly entered her exceptions to the charge, and to the refusal of the instructions requested. A verdict was returned in conformity with the charge, a motion for a new trial overruled, and judgment rendered on the verdict. That judgment was reversed by the circuit court for error:
    “In refusing to charge the jury as requested by the defendant below, and in directing the jury to return a verdict for the plaintiffs below.”

      The case is here for review on this record.

      Outcalt <& Graoiger and Barnsey, Maxwell do Barnsey, for plaintiff in error.
    In view of the decision of this court in Singer Sewing Machine Co. v. Caldwell, 55 Ohio St., 638, we submit this case in the belief that no abstract principle as to a chattel mortgage on every occasion of a credit sale was intended to be stated in the decision mentioned. Yet our own circuit court so understood that decision in deciding this case. Baker v. Speyer & Co., 12 C. C., 118; s. c., 5 Ohio Circ. Dec., 336.
    As we understand the decision of the circuit court in the Caldwell case (7 C. C., 460; s. c. 4 Circ. Dec., 680), the instrument it was construing, although called a mortgage, was essentially different from the instrument presented in our case.
    We think, therefore, that it is still an open question in this court whether the statute has reference to the familiar transaction which the Supreme Court of the United States in Heryford v. Davis, 102 U. S., 235, 243, in distinguishing a conditional sale contract, designates as £ £a mortgage back to the vendors. ”
    With the exception of the fifty per.cent, clause, and the reference to section 4152, our statute (O. L., 1885, vol., 82, p. 238), was copied substantially verbatim from the Missouri Statute of 1876, now sections 5180 and 5181 of the Missouri Statutes of 1889 ; and yet the Supreme Court of Missouri, has construed the act as not affecting a chattel mortgage. Wurmser v. Sivey, 52 Mo. App., 424; Daily v. Mfg. Co., 88 Mo., 301.
    It is a fact that it was many times decided by the common pleas court of Hamilton county, so as to have become an established precedent in that court, that the act of 1885 does not apply to a chattel mortgage.
    The title of the act declares its purpose to be to regulate “conditional sales,” and this court will presume that the legislature intended to use the phrase in its fixed legal sense. Turney v. Yoeman, 14 Ohio, 218.
    A purchase on condition that the title should remain in the vendor until payment of the stipulated price in full passed no interest to the buyer which was subject to execution for his debts; and if the vendor resumed possession, the vendee’s creditor could not acquire any additional right by tendering payment of the unpaid purchase money. Sage v. Sleutz, 23 Ohio St., 1.
    Not so with a mortgage. A mortgagor of chattels has an interest which is subject to execution and the execution creditor, by his levy upon the property, acquires a lien. He may redeem and may maintain an action to redeem and compel an account. Carty v. Fenstemaker, 14 Ohio St., 457; Morgan v. Spangler, 20 Ohio St., 38.
    A mortgagee of chattels who has obtained possession after condition broken is a debtor to the mortgagor for any surplus that may remain. Root v. David, 51 Ohio St., 29.
    A mortgagee may sue at law to enforce the agreement to pay by recovering judgment for theamount due, and satisfaction of such judgment restores the property to the mortgagor. But a vendor under a conditional sale contract has no such remedy ; his remedy is to take back the goods and keep as forfeited all that has been paid. Loomis v. Bragg, 50 Conn., 228.

      In trover by a mortgagee, the measure of damages would be the amount of the purchase price remaining unpaid ; but in trover by a conditional vendor the measure of damages would be “the whole value of the property. ” Collard v. McDonald 128 Mass., 470.
    It has long- been a principle of construction that when the question is whether the instrument is a conditional sale or a mortgage, whatever doubt there may be should be resolved in favor of its being a chattel mortgage. King v. Greves, 42 Mo. App., 168; Rapier v. Paper Co., 77 Ala., 126; Jones on Chattel Mortgages, 4th ed., sec. 30 ; Jones on Chattel Mortgages, 4th ed., sec. 33a; Tufts v. Haynie, 4 O. C. C., 494; s. c. 2 Circ. Dec., 668.
    That financial transactions of high importance, depending upon conditional sales of personal property, have heretofore occurred, and that credit sales of equal importance will have no adequate protection hereafter if such laws as our own statute of 1885 are to be held applicable to purchase money mortgag’es, may be well illustrated by the facts of such reported cases as: Rolling Stock Co. v. Railway, 34 Ohio St., 450 ; Case Mfg. Co. v. Garven, 45 Ohio St., 290; Hervey v. Locomotive Works, 93 U. S., 664; Fosdick v. Schall, 99 U. S., 233; Meyer v,. Car Company, 102 U. S., 1; Heryford v. Davis, 102 U. S., 235, and Harkness v. Russell, 118 U. S., 663.

      Chandes C. Benedict, for defendant in error.
    To determine who was entitled to the possession of the goods at the time the replevin proceedings were instituted, it is necessary to determine from the evidence what was the real nature of the transaction between the parties, and, if a sale of the goods within the statute be shown, either from the evidence offered or by construction of law, the plaintiffs’ right to them can not be maintained until at least fifty per cent, of the amount paid is refunded to the defendant as provided in the. conditional sale statute, unless the property was broken and actually damaged, when a reasonable compensation for such breakage and damage should be deducted. Weil v. The State, 46 Ohio St., 450.
    Now the record in this ease contains testimony tending to prove that this transaction was in fact a sale within the statute, the vendee never being vested with the absolute title; that such was the understanding of both parties at the time of the sale; that a statement was made by one of the vendors when the chattel mortgage was given, to the effect that the goods were theirs until paid for in full, when they would then belong to the defendant. Kendrick v. Beard, 81 Mich., 182; Jones on Chattel Mortgages, sections 23 and 24; Cornell v. Hall, 22 Mich., 377; McMillen et al. v. Bissell, 63 Mich., 69; Jones on Mortgages, section 324; Susman v. Whyard, 149 N. Y., 127; Pierce v. Robinson, 13 Cal., 116; Peugh v. Davis, 96 U. S., 332.
    From these cases and others to follow, it is evident that the form of a contract does not preclude inquiry into its real character, which may be only partly represented by the writing, or may be disguised or wholly concealed by it; and further that courts at all times seek to discover the intention of the parties, whenever that intention is not fully or truly represented by the written instrument. Coleman et al. v. Miller et al., 6 Bull., 199; s. c. 8 Dec. R., 179 ; Wilson v. Giddings, 28 Ohio St., 554; Patrick v. Littell, 36 Ohio St., 79; Sun Fire Office
      v. Clark et al., 53 Ohio St., 414; Wright v. Bates & Miles, 13 Vt., 341.
    In some of the states these instalment houses have termed their contracts leases and the instalments paid as rent, and on default in payment, the lease should be deemed forfeited and possession of the property recoverable by the vendor without process of law, the purpose of such agreement being to prevent any creditor of the purchaser from levying on his interest in the goods. The courts have uniformly termed such contracts conditional sales. Cowan v. Singer Mfg. Co., 92 Tenn., 376; Hays v. Jordon, 85 Ga., 741; Preston v. Whitney, 23 Mich., 260; Hamilton v. Singer Mfg. Co., 54 Ill., 370; Hervey v. R. Is. Locomotive Works, 93 U. S., 672; Murch v. Wright, 46 Ill., 487; Gorham v. Holden, 79 Me., 317; Baldwin v. Van Wagner, 33 W. Va., 293; Lucas v. Campbell, 88 Ill., 447; Hine v. Roberts, 48 Conn., 267.
    From the foregoing we contend that if the courts have the power to look under the cover, as it were, and detect a device in one case, they have it in another, if the same can be discovered, especially when the object of the investigation in both cases is identical, viz., the intention of the parties; and that since the law permits proof to be offered and considered in al] cases in order to get at the real transaction, it was error in refusing to consider the testimony in the case at bar, tending to establish a sale within the statute, and this testimony should have been submitted to the jury under proper instructions.
    The court erred in charging that a chattel mortgagegivenunder the circumstances in this case does not come within the purview of the conditional sales statute. Smith v. De Vaughn, 82 Ga., 574.

      As conclusive authority upon this point we especially rely upon the case of Singer Mfg. Co. v. Caldwell, 55 Ohio St., 638. This case presents identically the same set of facts as does the ease at bar. Preston v. Whitney, 23 Mich., 260.
    To hold that the taking of a chattel mortgage under the circumstances of this case would take the transaction out of the statute, is to allow the vendor to defeat the operation of the statute by a mere makeshift, and to permit the continuance of the evil the legislature sought to remedy.
    What the law was before this conditional sale statute was passed, what the mischief and the necessity that called forth the act, are fully set out in the case of Weil v. The State, 46 Ohio St., 454.
    How all these devices should be dealt with by the courts is forcibly laid down by Maxwell on Statutes, chap. 4, section 1, on “Construction to Prevent Evasion.”
   Williams, J.

The contention in this case relates to the applicability to the transactions involved, of the act of Ma}?' 4, 1885 (82 Ohio Laws, 238), now sections 7913-72, 73, of the Revised Statutes.

The statute, in terms, applies to all sales of chattels, “to be paid for in whole or in part in instalments, on condition that the same shall belong to the person purchasing the same whenever the amount paid shall be a certain sum, or the value of the property, the title to remain in the vendor until such sum, or the value of such property or any part thereof shall have been paid.” And, it is made unlawful for any vendor of chattel property so sold, “or his agent or servant, to take possession of said property without tendering or refunding to the purchaser the sum or sums of money so paid after deducting therefrom a reasonable compensation for the use of such property, which shall in no ease exceed fifty per cent, of the amount so paid, anything in the contract to the contrary notwithstanding, and whether such condition be expressed in such contract or not, unless such property has been broken or actually damaged, and then a reasonable compensation for such breakage or damage shall be allowed.' ’

There was' evidence at the trial, though it was not without conflict, from which the jury mig'ht have found that the sales made by the plaintiffs to the defendant of the property in question were conditional sales of the character defined by the statute; and the instructions which were requested, but refused by the court, were to the effect that, if the jury should find the sales to be of that nature the defendant’s rights under the statute were unaffected by the mortgages given to secure instalments of the purchase price of the property. The refusal to so charge, and the charge given, appear to be placed upon the ground that the mortgages rendered the statuté inapplicable; and that is the position taken by counsel for the plaintiffs in error, who express some apprehension that any other holding would discourage sales on credit, and unsettle chattel mortgage securities. We see no good ground for giving the mortgages the effect claimed for them, nor any sufficient cause for the apprehension expressed. Bona fide absolute sales of chattel property are not within the operation of the statute; neither are mortgages made in good faith to secure the purchase price of property sold at such a sale, nor mortgages made in good faith on property owned by the mortgagor to secure a valid debt arising otherwise than upon a conditional sale of the property. But the rights of parties to all conditional sales of personal property, as defined by the statute, are controlled by its provisions ; and we find nothing in the statute which indica,tes an intention that those rights should be changed or affected in any way by the vendor taking a mortgage on the property. On the contrary, the statute appears to have carefully guarded against that result. It preserves in explicit terms, to the purchaser at such a sale, the benefits of its provisions even ag'ainst express stipulation in the contract to the contrary, and though the contract be put in such form that the conditional character of the sale is not shown. The policy of the statute in this respect seems manifest. Purchasers on this plan are usually persons of small means, and unable to pay except in instalments; and such sales are, partly on that account, made at prices in excess of those charged in other cases. Payment of part of the instalments may amount to more than the actual worth of the property; and, on account of the unconscionable advantage which the vendor would otherwise have, by takingthe property and retaining the money paid, the legislature deemed it proper to adopt the equitable rule of adjustment prescribed by the statute. That rule when properly observed will, we believe, be found fair and just to both parties. At all events, it enters into and becomes a part of every contract of conditional sale made after its adoption, as much so as if expressly embodied therein. And it is obvious that the statute would fail of its purpose if any instrument which the vendor might choose to exact at the time of the sale, could preclude an inquiry into the real nature of the transaction, or deprive the purchaser of the benefit of its provisions.

It is urged that the defendant in this case is sufficiently protected against a forfeiture of the property by accounting clauses in the mortgages which require the plaintiffs, on sale of the property by them, to pay the defendant any balance that may remain after the satisfaction of their claims. If these clauses were given that effect it is not perceived how they could prevent the application of the statute to the transactions between the parties, if they were in fact conditional sales within its meaning, or affect the rights of the parties under it. But, the accounting clauses are accompanied with others which authorize the plaintiffs to take the property from the possession of the defendant whenever they deem it necessary, and, without notice of any kind to sell the same at private sale to themselves for any price and upon any terms they may choose to fix. These necessarily render nug-atory the accounting clauses; for, as the sale would take place without notice there would be no bid but that of the plaintiffs, and it is unlikely that would exceed the balance of their claim. The formality of a sale could amount to nothing but an idle ceremony. Nor, is it apparent how, under any contract of conditional sale, the continued dominion and control of the vendor over the property could be more complete and absolute than was retained by the plaintiffs under these mortgages, nor what beneficial ownership was vested in the defendant beyond that of any conditional vendee. But these and other clauses of the mortgages are important only as they may serve to throw light on what was the true character of the sales.

The eases of Wurmser v. Sivey, 52 Mo. App., 424, and Dailey v. Singer Mfg. Co., 88 Mo., 301, cited by-counsel, do not raise the questions presented in this case. There was nothing present in either of those eases except an absolute sale and a mortgage for part of the purchase money. The holding is that: “Where there is an absolute sale and the vendor of chattels receives part of the purchase price and takes a chattel mortgage to secure the unpaid balance, sections 5180 and 5181, Revised Statutes, 1889, have no application to the transaction, and upon default the mortgagee can replevin the goods without tendering back the sum paid on the purchase price. ’ ’

By our statute, in cases of conditional sales, a purchaser who has made one or more payments upon the property is entitled to its possession, notwithstanding his failure to make further payment, until the seller refunds or tenders back the amount so paid, less a reasonable compensation for its use and for any damage to it. The compensation allowed the seller for the use of the property is in no case to exceed fifty per cent of the amount received by him from the purchaser. The sum which the purchaser is so entitled to have refunded, constitutes the value of his right of possession, and should be awarded him as damages when the property is taken in replevin at the suit of the vendor before the amount has been refunded.

Judgment affirmed.


source: Caselaw Access Project

author: Shauck, J.

license: Public Domain

text:
    Williams v. Stearns et al., Partners.

      Agency — Authority of alleged agent assumed from circumstances — ■ Evidence to show previous authority or ratification not competent, when.

    .On the trial of issues involving the authority of an alleged agent to make purchases on account of the defendant, evidence that the defendant became guarantor to others than the plaintiff for the payment of the price of similar articles purchased by the alleged agent upon his own account is not competent for the purpose of showing either a previous authority or a ratification.
    (Decided October 11, 1898.)
    Error to the Circuit Court of Crawford county.
    The plaintiff filed his petition in the court of-common pleas against the defendants, Stearns & Hoover, alleging- that on and after July 15, 1892,-they were engaged as contractors in eonstructingthe Columbus and Short Line Railway ; that one Harmon was employed by them as ag-ent to purchase and pay for all lumber, timber and ties that might be needed in such construction, and that one-Brooks was in their employ in connection with and under Harmon “to so licit lumber and timber for said defendants in the construction of said railroad and to draw written orders and bills in favor of the vendors of such lumber, timber and ties, upon the said Harmon for his acceptance and payment thereof over to the holders of such orders and bills that Brooks solicited from the plaintiff timber and ties for the purpose of such construction, and that plaintiff, upon application to Harmon for information touching the authority of Brooks, was informed that he, Harmon, was agent and paymaster of the defendants, and Harmon then requested the plaintiff to let Brooks have such material as he might desire and that he, Harmon, would pay therefor.
    The first cause of action is for the value of material delivered by the plaintiff, and evidenced by an order drawn by Brooks upon Harmon in favor of the plaintiff, and alleged to have been accepted by Harmon, though his acceptance was not endorsed thereon. The second cause 5f action is upon an account for ties alleged to have been by the plaintiff “sold and delivered to the said defendants through their said agents at defendants’ special instance and request, and which ties were used by said defendants in the construction of said railroad.”
    The defendants by their answer admitted that they were partners, engaged at the time alleged in the construction of said railroad, but they deny every other allegation of the petition. A judgment in favor of the plaintiff followed a verdict, and this was reversed by the circuit court for error in the admission of evidence and in the charge. Other portions of the record are stated in the opinion.

      L. G. Feig finer, for plaintiff in error.
    That such evidence is competent is beyond question, in the proof of agency. And we maintain that a party may be made liable as principal for the acts of another as his agent, although no agency in fact, exist whenever such party puts himself in relation to a third party that the following maxim will be made applicable to him, towit: “When one of two innocent persons must suffer, the one who first reposed confidence and enabled the loss to be occasioned, shall sustain it.’’

      By the testimony of the defendants in error they have fully brought themselves wholly within this maxim, as may be seen from the testimony of Henry Stearns, in the printed record. Fullerton v. Sturges, 4 Ohio St., 534 ; Lessee of Simeon Jennings v. Robert Wood, 20 Ohio St., 266.
    There is no question in this case that the said company received the said lumber, timber and cross-ties of the plaintiff in error. And there is no question but that the said company received the same under the ag-reement and arrangements they had with their said employe, Dr. Harmon. Nor is there any question but that the said company had control of the said business and received the benefit of the same without paying for the same.
    We claim that George W. Brooks was an agent of the defendant company as fully as Goodwin was an agent of the insurance company in the case of Insurance Company v. Eshelman, 30 Ohio St., 656.
    In the ease at the bar the plaintiff in error did not rest his sales on the representations of George W. Brooks but sought out Harmon, the general agent and employe of the defendant company and through his general agent sold his timber to the defendant company.
    Did the court of common pleas err in the admission of evidence showing that the said agent, W. Harmon, made contracts with other persons as such agent, which were ratified by the defendant and payments made thereon, and did the common pleas court err in charging the jury that such evidence was admissible to be weig-hed by it ? Tennessee River Transportation Company v. Kavanaugh et al., 13 Southern Reporter, 283; 2 Greenleaf, 60, ; 1 Amer. & Eng. Enc., 340.

      Agency as a question of fact may be proved by the acts, declaration or conduct of the principal and agent. Columbia D. B. Co. v. Geisse, 38 N. J. L., 39.
    Agency will be implied where one party accepts the benefits resulting from the transactions of another party acting as his agent. Milligan v. Davis, 49 Iowa, 126; Veazie v. Williams, 8 How. (U. S.), 134; Foster v. Swasey, 2 W. & M. (U. S.), 217; Hatch v. Taylor, 10 N. H., 538; Fouch v. Wilson, 59 Ind., 93.
    Where a person acts openly and publicly as the agent of a corporation, and in such capacity employed a party to perform certain work, and the work when completed was appropriated and used by the corporation, and the work was done with the knowledge of its agents, held that the agency and authority of such person so permitted to act must be presumed. Rockford, etc., R. Co. v. Wilcox, 66 Ill., 417; Singer, etc., Co. v. Holdfodt, 86 Ill., 455 ; s. c. 29 Am. Rep., 43; Franklin v. Globe, etc., Ins. Co., 52 Mo., 461; Fetchum v. Verdell, 42 Ga., 534; Bank v. Dandridge, 12 Wheat. (U. S.), 64.
    So the statement and dealings of the principal with third person in recognition of the alleged agency are admissible against the principal. Meechem on Agency, section 100.
    Declarations of agents may be considered if there is other evidence of their authority. Holmes v. Holland, 29 W. L. B., 115; Gillingham v. Christen, 55 Ill. App., 17.

      Harris, Bears c& Monnett, for defendants in error.
    The plaintiff brings suit on two causes of action.

      First — On a bill of exchange for $56.20 to which defendants are strangers.

      Second — On an account against defendants for $9.00.
    The bill of exchange is drawn by Geo. W. Brooks, on Wm. W. Harmon in favor of H. Williams, the plaintiff.
    We don’t want to get away from the stubborn fact that plaintiff must stand or fall on his written instrument, the contract on which he brought his suit. If he desires to fall back on the consideration for which the bill was given, he is too late. He should have sued on it as an account, and given a copy as required by section 5086.
    Stearns ,& Hoover are strangers to the bill, and how does plaintiff seek to establish their liability on the instrument? His petition answers the question: “Said plaintiff duly presented said bill to the said W. Harmon, who duly accepted the same in behalf of the said defendant.” But it appears that Harmon then and there made a personal promise to pay the acceptance, and told plaintiff when he expected to obtain the means to make his promise good.
    Again what kind of an acceptance could be made by a tstranger to the bill?
    None is pretended in this case — if defendants had been present, they could not accept the draft because it was not drawn against them. At most they could become endorsers and their liability would depend on the subsequent protest of the paper, by demand on Harmon notice to Brooks as drawer and to defendants as endorsers. A parol acceptance of a bill of exchange maybe good if made by a party to the instrument, but there must be special authority for an ag’ent to accept in behalf of his principal and there is no allegation that Harmon had authority to bind anybody but himself.

      There is not a word of testimony in the record to show that he had authority to bind defendants by accepting bills of exchange, and more especially to bind them by parol acceptance of a bill to which they were not a party.
    The particular paragraph of the charge under consideration, leaves the jury to infer that evidence had been adduced before it, tending to establish the ratification by.defendants of the acts of Harmon and Brooks, under which plaintiff claims to have a cause of action against the defendants.
    Ratification, as we understand it, operates on the principle of estoppel, and proceeds upon the ground that one knowing all the facts and circumstances of a certain transaction, accepts the benefits of the same, is not in good conscience to be permitted to repudiate the authority of the one by whose act he had been benefited. There is no feature in this case in any way analogous to a supposed case where a person entrusts his name in blank, to another to the full extent to which such other may see fit to bind him, as counsel for plaintiff in error argued, citing there the case of Fullerton v. Sturges, 4 Ohio St., 534, neither can any similarity be traced to the case of one who has place'd it in the pbwer of another person to perpetrate a wrong on the third party. Meechem on Agency, section 100.
    Nor can his-authority be established by showing that he acted as agent, or that he claimed to have the powers which he assumed to exercise. 1 Wash., U. S. C. C., 330; Bacon v. Johnston, 56 Michigan, 182 ; North v. Metz, 57 Michigan, 612; Doonan v. Mitchell, 26 Georgia, 472; McDougald v. Dawson, 30 Alabama, 553; Cobum v. Paine, 36 Maine, 105.
   Shauck, J.

The first cause of action, like the second, was for the value of materials sold and delivered by the plaintiff to the defendants through their agents. It may be that the order was mere evidence not properly set out in the petition, and that the petition stated but one cause of action; but the record does not require the consideration of those questions.

It is apparent that the real contention upon the trial concerned Harmon’s authority ás agent of the defendants, that is, whether his purchases were as their agent, or in fulfillment of his contract to sell and deliver to them construction material at a price agreed upon. Against the objection of the defendants, one Lutz and other witnesses, were permitted to testify, on behalf of the plaintiff, that Harmon and Brooks came to them representing that they had a contract with the defendants to furnish material for the construction of the railroad, and requesting’ the witnesses to get out the material for the unfinished portion of their said contract, that the witnesses then made an arrangement with the defendants whereby the latter undertook to see that the witnesses were paid for such materials as they might furnish pursuant to this request of Harmon and Brooks.

The purpose for which this evidence was supposed to be competent was probably indicated to the jury by the instruction given at the request of the plaintiff, indicated in the record as his third request. The record contains no other evidence to which the instruction could have been thought applicable. That instruction is as follows:

“The jury are further instructed that it is the law of the case that a contract alleged to have been made with defendants’ agent on the question of agency, evidence that the alleged agent had made contracts with other persons as such agent, which were ratified by defendants, is admissible to be weighed by the jury. ’ ’

The error in treating the transactions testified to by these witnesses as ratifications is obvious. There can be no ratification by an alleged principal unless authority to represent him has been assumed by the alleged agent. It is of the essence of ratification that the principal confirms and adopts as his own an act done without his previous authority. In the transaction testified to by these witnesses, Harmon and Brooks did not assume to act as agents for the defendants. To the contrary, their representation was that they were purchasing materials on their own account to fill their contract with the defendants. It was entirely consistent with that representation that the defendants should undertake that Harmon and Brooks should pay for materials so purchased by them. This evidence, therefore, showed neither ratification nor equitable grounds upon which the defendants should be estopped to deny the alleged agency; and the trial court erred both in admitting the evidence and in giving the instruction with respect to it.

Evidence of this character is clearly distinguishable from such as tends to show a holding out to others by the alleged principal of the alleged agent as having authority to represent him with respect to a business which includes the transaction in controversy. That such holding out or recognition may be shown is the point decided in Transportation Company v. Kavanaugh et al., 13 So. Rep., 283, notwithstanding the inadvertent use of the word “ratification” in the syllabus.

It is also insisted by council for the defendants that the trial court erred in admitting the declarations of Harmon to establish his authorifcyas ag’ent. Upon the trial of issues of this character it is competent to show that the alleged agent assumed to act in a representative capacity, but his declarations are not competent to maintain the allegation as to his authority. Perhaps this distinction was not consistently observed in the admission of evidence,,but we cannot see that there was prejudicial error in view of the instruction given to the jury upon the precise point. That the rule might have been stated with more clearness is true, but it was given in the language requested by counsel for the defendants, and the jury could hardly have failed to understand that the authority of an agent cannot be established by his own declarations.

Judgment affi/rmed.


author: Bradbury, J.

text:
    Lewis, Auditor, v. State ex rel. Mullikan.

      Taxation — Mistake in vahiation of real estate — By anmial or decennial appraiser — Duty of county auditor — Section 10S8 Revised Statutes.

    1. Where, by reason of a mistake made by an annual assessor or by a decennial appraiser of real estate, or in the office of a county auditor, in the course of transferring their reports to the tax list in his office, the appraisement of a new structure is fixed at a sum greater than that intended to be placed on it,by either the annual assessor or decennial appraiser, it is the duty of the county auditor, under section 1038, Revised Statutes, to correct the error upon the tax list in his office for the current year and to report the matter to the board of county commissioners for their action under the same statute.
    2. In such case it is the duty of the county auditor to act, when satisfied that an error has occurred, although some of the facts necessary to establish the error do not appear on the records of his office, but are shown by parol evidence only.
    (Decided October 11, 1898.)
    Error to the Circuit Court of Hamilton county.
    This action was brought by the relator, Mrs. Katherine C. Mullikan, defendant in error, against the plaintiff in error as auditor of Hamilton county, to require him as such auditor, to correct an erroneous valuation upon certain real estate owned by her, and to require said auditor to call the matter to the attention of the county commissioners that they might order a refunder of the taxes paid by her for the five preceding years on this overvaluation. The relator prevailed in the circuit court and the cause is brought here by the county auditor. The facts will be stated in the opinion.

      Fmdigs, Foraher da Finsmore, County Solicitors, for plaintiff in error.

      See O. R. Statutes, sections 1038,2800,2801,2802, 2753, 2755, 2786, 2790, 2789, 2798, 2813, 2814.
    That there is a limitation upon the power of the county auditor, in correcting the duplicate and issuing refunders, can not be doubted. The legislative scheme of taxation, as set forth in the statutes, does not give to the auditor unlimited authority. This is apparent from the fact that section 1038 enumerates certain errors which it is within the power of the auditor to correct. This section is now substantially in the same form as it was after the amendment of January 16, 1873, when it was the subject of consideration by the Supreme Court in the case of The State of Ohio v. Board of Commissioners, 31 Ohio St., 271.
    Ever since this decision of the Supreme Court, it has been customary to draw a distinction between clerical and fundamental errors, when considering the authority of the auditor, under the provisions of section 1038. The court, however, in this case, did not attempt to define either term, but left the matter with a mere statement of the fact. The same section was ag’ain before the court in the case of Insurance Co. v. Cappeller, 38 Ohio St., 560; The State ex rel. Poe v. Raine, 47 Ohio St., 447; The Barney & Smith Mfg. Co. v. Comrs., 29 W. L. B., 366.
    The same subject was thoroughly examined by Judge Shroder, of the common pleas court of Hamilton county, in a number of cases submitted to him by the present attorney for the defendant in error in this case. These cases are as follows: Chatfield & Woods v. Comrs., 21 W. L. B., 315; Tenhundfeld v. Comrs., 21 W. L. B., 316; Harte v. Comrs., 21 W. L. B., 317; Tatem v. Comrs., 21 W. L. B., 317; Derby v. Comrs., 21 W. L. B., 317;
      Wagner v. Zumstein, Treas., 21 W. L. B., 318; Gibson v. Zumstein, Treas., 21 W. L. B., 318; Lackman v. Zumstein, Treas., 21 W. L. B., 319; Mitchell v. Comrs., 22 W. L. B., 292.
    The same principle was followed in the following cases : State of Ohio ex rel. v. Brewster, 11 W. L. B., 39; 9 Ohio Dec. R., 125; Sandheger v. Comrs., 9 W. L. B., 20; 7 Ohio Dec. R., 569; Bridge Co. v. Comrs., 9 W. L. B., 16; 7 Ohio Dec. R., 564; Perin, Executor v. Comrs., 6 W. L. B., 673, 6 Ohio Dec. R., 1085; Ives v. Comrs., 6 W. L. B., 697; 6 Ohio Dec. R., 1079; State ex rel. v. Cappeller, 5 W. L. B., 833; 6 Ohio Dec. R., 1015.

      Frederick Hertenstein, for defendant in error.
    See O. R. Statutes, sections 2786, 2789, 2798, 2790, 2813, 2814, 2753.
    What authority had the auditor for adding the valuation of $2,000, as returned by the annual assessor of 1891 ? This return was before the annual county board at its session in 1891. * As appears from its minutes, the board did not order this return to be placed on the duplicate. The board acted in a dual capacity as an annual and as a decennial board. The board was constantly viewing and equalizing property, and no doubt contemplated to include in its final return as a decennial board, in November, 1891, the return of the annual assessors for 1891 as to new structures. The omission to order the returns of the annual assessors as to new structures to be added can not be explained upon any other theory. The auditor could not add because he was of the opinion that the property of the defendant in error was undervalued. That question was decided in Humphreys v. Safe Deposit Company, 29 Ohio St., 608.

      The statute section 2802 does not apply to the case under discussion. The property of the defendant in error was returned by the decennial assessor as a finished structure; the board did not see fit to order the amount returned by the annual assessor, which toas included in the return of the decennial assessors, to be placed upon the duplicate. The board knew from an inspection of the return of the decennial assessor, as well as from an inspection of the premises in April, 1891, made before the return of the annual assessor in 1891, that the decennial assessor had returned the structure of plaintiff as a finished structure.

    It was for that reason that the board did not order the return of the annual assessor for 1891 to be added. The action of the board is equivalent to saying to the auditor “ we find that the return of the assessor for 1891 should not be added ; his return is covered by that of the decennial assessor, and to add it is to assess the taxpayer twice for the same property.” The auditor can not review this action of the board. The action of the board is final and conclusive.
    If we have shown that the auditor had no power to add the return of the assessor for 1891, then it must follow that the error was made in transcribing the minutes of the boards of equalization.

   Bradbury, J.

There is no dispute in this case over the facts. It is clear that the relator’s property stands on the books of the county auditor at a valuation $2,000 greater than it should stand. The contention relates first to the power of the. county auditor to correct his duplicate, for the current year and second as to his duty to call the matter to the attention of the county commissioners, so that the latter body may have before them the question of refunding to the relator the taxes paid by her during the five preceding years on this erroneous valuation of her property. The authority of the auditor to make the correction, and his duty to lay the matter before the board of county commissioners, rests upon the following provisions of section 1038, Revised Statutes:

‘ ‘ The auditor shall, from time to time, correct all errors which he discovers in the tax list and duplicate, either in the name of the person charged with taxes or assessments, the description of the lands or other property, or when property exempt from taxation has been charged with tax, or in the amount of such taxes or assessments,” * * * 1 ‘ and if at any time the auditor discovers that any erroneous taxes or assessments have been charged and collected in previous years, he shall call the attention of the county commissioners thereto, at any regular or special session of the board, and if the commissioners find that' taxes or assessments have been so erroneously charged and collected, they shall order the auditor to draw his warrant on the county treasurer, in favor of the person or persons paying the same, for the full amount of taxes or assessments so erroneously charged and collected, and the county treasurer shall pay the same out of any surplus or unexpended funds in the county treasury; * * *”

A brief history of the transaction discloses that the relator obtained her title to the real estate in question in September, 1889, and soon thereafter began the erection of a dwelling house thereon which was completed about the first day of June following, (1890). In March, 1890, that being the year of the decennial appraisement of real estate in Ohio, the decennial appraiser for the district in which the property was situated, entered upon his duties.

Later on the annual appraiser for 1890-entered upon his duties. It is part of this latter officer’s duties under section 2753, Revised Statutes, to “return a list of all new buildings, ” etc. * * * ‘ ‘the value of which shall not have been previously added to” * * * “the valuation of the land on which such structures have been erected.” * * * And in discharging his duty in this regard he returned the building in course of erection on the relator’s lot as an unfinished structure, fixing- its tax value at $1,500, and this sum was added to the previous value of the land ($800), making a total of $2,300, upon which she paid taxes for that year. The decennial appraiser, although he entered on the discharge of his duties earlier, did not finish them and make his return until December, 1890, and then returned thevalueof the building at $2,800, or $1,300 more than the annual assessor had valued it. The next year (1891), the annual assessor made the following return as to this property: Total valuation of structuré, $3,500; partial value reported last year, $1,500; amount to be added * * '* for new structure, $2,000.

The form of this return discloses that the annual appraiser for 1891 in appraising the relator’s property entirely ignored the appraisement made the preceding year by the decennial appraiser, whereas he should have taken it as the basis for his appraisement and return. For it is quite clear that the decennial appraisement of 1890 fixed the value of the property, which could not be increased by the annual appraiser for the year following unless a new building or structure had in the meantime been placed on it. When the county auditor came to make up his tax list he took the return of the •decennial appraiser for 1890 as his basis, and ignored that of the annual appraiser for 1890. The result was that he added the $2,000 returned by the annual appraiser for 1891 to the value of the decennial appraisement for 1890, thus increasing by $2,000 the valuation of relator’s property over that fixed by the decennial appraiser. On this increased valuation she has paid taxes ever since. Now, it is manifest that this action by the auditor was erroneous, that is, he unwarrantably added $2,000 to the value of relator’s property, unless a building or structure of that value had been placed thereon after it had been appraised by the decennial appraiser in 1890, and before the appraisal by the annual appraiser in 1891. That this was not done is a conceded fact. It is, therefore, clear that $2,000 was in the year 1891, erroneously added to the value of relator’s property and still remains and that ever since it was thus added, she has paid taxes thereon. This was not a fundamental error in any sense of that term. The addition was not made by reason of any mistaken notion that the relator was legally chargeable with the additional $2,000. It was the result of inadvertence on the part of some one of the public officers, charged with a duty in respect of bringing property on the tax list of the county for taxation. The relator is in no wise chargeable with the error, and the plainest principles of justice plead in her behalf.

Council for the auditor, however, without denying either the fact that the relator’s property was thus over-valued, or the manner in which it was •done, contend that it was not the duty of the auditor, under section 1038, Revised Statutes, to correct the error, because all the facts necessary to enable him to make the correction do not appear in the records of his office. It is true that some of the facts necessary in this ca.se to show the error must be ascertained from other sources. This objection, however, we do not regard as conclusive. If all the data necessary to correct the error appear on the records of the auditor’s office, the duty of correction may of course be readily and unhesitatingly discharged, whereas, if some of the facts must be gathered from other sources the auditor might be warranted in proceeding with caution and to require convincing proof of the facts on which the alleged error may be based. The statute itself does not require the correction to be founded on facts of record in the auditor’s office; and as its provision, in as far as they authorize relief against unjust taxation, may be regarded as remedial in their nature, we perceive no sufficient reason for restricting their operation in such cases by a construction that would deny relief except on record evidence. It has alwaj^s been held in making additions to the tax list that a county auditor may. act upon information obtained from other sources, and we see no sufficient reason why upon the facts thus obtained he may not just as well afford relief ag’ainst unjust taxation; nor can we find anything to militate against this conclusion in the cases of Ohio ex rel. v. Commissioners, 31 Ohio St., 271; Ins. Co. v. Cappellar, 38 Ohio St., 560; or State ex rel. v. Raine, 47 Ohio St., 447.

Judgment. affirmed.


author: By the Court :

text:
    The John Hancock Life Ins. Co. v. Warren.

      Life insurance policy — Defense of false answers to questions in application — Material nature of such answers —• Section 3625 Revised Statutes.

    Section 3625, Revised Statutes, is a valid constitutional enactment ; and to constitute a defense to a policy of insurance by reason of false answers to questions in the application, it must be clearly proven that the answers to such questions were willfully false and were fraudulently made, that the same were material, and induced the company to issue the policy, and that but for such answers the policy would not have been issued, and that; neither the company nor its agents had knowledge of the falsity or fraud of such answers at and before the delivery of the policy.
    (Decided October 11, 1898.)
    Error to the Circuit Court of Delaware county.
    The action below was by William M. Warren against the John Hancock Mutual Life Insurance Company of Boston, Massachusetts, to recover the amount of a policy of life insurance on the life' of George E. Warren, son of the plaintiff below. The first ground of defense denied that George E. Warren was in good health at the time the policy was issued, and denied generally the allegations of the petition. The second ground of defense was in the words and figures following:
    ‘ ‘ The defendant says that the policy of insurance set forth in the plaintiff’s petition, and upon which his action is based, was issued' upon an application made by the deceased, George E. Warren, to this defendant, which application is referred to and made a part of said policy of insurance, and that said policy of insurance provided that if any of the statements made in said application are untrue in any respect, said policy shall be void.

      The defendant further says that the said application of the said George E. Warren contained certain interrogatories therein, in answer to which interrogatories the said George E. Warren stated that at the time said application was made he was in good health, that he had not been obliged to consult a doctor during the ten years last preceding the date of said application, except once, and that was in 1893, for malarial fever, which sickness was of one week’s duration; that the last time he had consulted a physician was in the year 1893, on account of said attack of malarial fever; that he had never had or been predisposed to the disease known as syphilis, and that he had never had any illness or disease other than malarial fever in 1893.
    The defendant says that at the time said statements were made, they were all and each of them false and untrue, and were known to be so by the said George E. Warren at the time he made them, and that they were made by said George E. Warren for the purpose of defrauding this defendant.
    The defendant also says that at the time said application was made the said George E. Warren had syphilis and he knew it; that he had been obliged frequently during the ten years immediately preceding the making of said application, to consult a physician on account of said disease; that he had had a disease or diseases other than as stated in his said application, and that he was not at the time said application was made, in good health.
    This defendant says that the said statements in said application contained were the basis upon which the said contract or policy of insurance mentioned in the plaintiff’s petition was issued, and that said contract of insurance would not have been entered into, and said policy of insurance would not have been issued, except that this defendant relied upon the truthfulness of said statements, and this defendant is not liable upon said policy of insurance, and prays to be discharged from this action, and to recover its costs herein.”
    The reply admitted that the policy was issued upon the application set out in the answer, and that George E. Warren stated in his application that he was in good health, and denied the remainder of the answer, and claimed that the insurance company was estopped from denying the truth of the application. On the trial, evidence was given tending to support the answer, and by the plaintiff below tending to support the truth of his reply, and the verdict and judgment were in favor of the plaintiff below for the full amount of the policy. The principle controversy in the trial of the ease arose upon section 3625, Revised Statutes, which is as follows :
    “No answer to any interrogatory made by an applicant, in his or her application for a policy, shall bar the right to recover upon any policy issued upon such application, or be used in evidence upon any trial to recover upon such policy, unless it be clearly proved that such answer is willfully false and was fraudulently made, that it is material, and induced the company to issue the policy, and that but for such answer the policy would not have been issued; and, moreover, that the agent or company had no knowledge of the falsity or fraud of such answer.”
    The circuit court affirmed the judgment of the court of common pleas, and thereupon the insurance company filed its petition in error in this court, seeking to reverse the judgment.

      George K. Nash and W. Z. Davis, for plaintiff in error.
    The undisputed facts developed in this case were such that-, under the decision rendered by this court in the ease of Insurance Company v. Pyle, 44 Ohio St., 19, the verdict of the jury ought to have been in favor of the defendant.
    This statute, section 3625, is contrary to the constitutional limitations provided in amendments, article 5, and section 1, article 14, constitution of the United States, and-section 1, article 1, and section 16, article 1, of the constitution of Ohio. Cooley, Constitutional Limitations, marg'inal page 356; Bank of Columbia, v. Okley, 4 Wheaton U. S. Reports, 244; Cooley, Constitutional Limitations, marginal page, 289.
    The warranties, or mere representations which are made the basis of the contract and are proved to be such, eahnot be made to be immaterial by force of the statute, nor can the party alleging fraud in obtaining insurance by the agreement and representations, be required to prove them to be material. The very fact that the insurance was obtained on the faith of the agreement and representations, makes them material. Hexter v. Bast, 125 Pa. St., 52; Shackleford v. Handley, 1 A. K. Marshall (Ky.), 496.
    We think that our position in regard to the unconstitutionality of this section of the Ohio Statutes is fully sustained by the decision of this court in the case of Palmer do Crawford v. Tingle, 55 Ohio St., 423; Normal School District v. Blodgett, 155 Ill., 441; Ramsey v. The People, 17 L. R. A., 855.
    We say that, “There can be no public necessity” for a law which makes nugatory the warranty of a man that he tells the truth, in the representations, by which he procures a contract to be made. Such a law can only be promotive of evil. It encourages falsehood. Leep v. St. Louis I. M. & S. R. Co., 58 Ark., 407.
    Statute section 3625 is in derogation of the common law, because it seeks to abrogate the recognized law as to warranties ; and it is in derogation of common right, because it restricts the natural right of contracting. 23 Am. & Eng. Enc. Law, 383-386, et seq. to 393 and numerous authorities there cited.
    Therefore, as the statute does not declare what shall be deemed “material,” and does not provide how the answers to interrogatories shall be proved tobe “material,” it must be construed as leaving those questions to be determined by the judicial rules which would prevail if there were no such statute. These rules are, fortunately, clear and well defined.
    1. Representations may be material as to fact, or
    2. They may be made material by contract, or
    3. They may be made material by estoppel. Flanders on Ins., 202, 298, 326, et seq.; Hutchins v. Cleveland Mut. Ins. Co., 11 Ohio St., 479; Jeffries v. Life Ins. Co., 22 Wall. (U. S.), 47; Day v. Mut. Ben. Life Ins. Co., 1 McArthur, (Dist. Col.), 91; s. c. 29 Am. R., 565; Price v. The Phenix Mut. Life Ins. Co., 17 Minn., 497; 10 Am. R., 166; Campbell v. N. E. Mut. Ins. Co., 98 Mass., 381; Wood on Fire Ins., page 238, section 112, p. 396, 199; Babbitt v. Ins. Co., 66 N. C., 70; 8 Am. R., 494; 11 Am. & Eng. Enc. Law, 298; Walton v. Nat. Fund Ins. Co., 20 N. Y., 32; Byers v. Farmer's Insurance Co., 35 Ohio St., 606.

      As mere representations, the statute may well be held to be only declaratory, but as to warranties it made a new rule. White v. Prov. Sav. Life Assur. Soc. of New York, 163 Mass., 108 ; 27 L. R. A., 398; 39 N. E. Rep., 771.
    In Byers v. Ins. Co., 35 Ohio St., 618, the case of Anderson v. Fitzgerald, 4 House of Lords Cases, 484, is cited and the Supreme Court of Ohio say : “The point on which the case finally turned was whether certain answers made by the insured were material as well as false, and it was held that the representations being part of the contract, their truth and not their materiality was the question for the jury.” 1 Bigelow on Fraud, 622-623 ; Kimball v. Ætna Ins. Co., 9 Allen, Mass., 540; 85 Am. Dec., 786.
    It is important to note that this case is not put upon the ground of warranty. The case has been followed in 91 U. S. Rep., 512, 104 Ib. 202, 111 Ib. 341, as well as in a number of the state courts 44 Ohio St., 29; Cobb v. Mut. Ben. Asso.,153 Mass., 176; 10 L. R. A., 666; Penn. Mut. L. Ins. Co. v. Bank & Trust Co., 72 Fed. R., 414.
    We insist that there is nothing in morals, in public policy, or in law, which gives such an advantage to one who obtains insurance by deliberate misrepresentations.
    1.. A party who has accomplished his purpose through misrepresentation, will not be permitted to deny its materiality. 1 Bigelow on Fraud, 497; 46 Ohio St., 255; Smith v. Kay, 7 H. L. Cas., 750; Davenport v. N. E. Ins. Co., 6 Cush. (Mass.), 340; James v. Hodsden, 47 Vt., 127; Seifford v. Grout, 120 Mass., 20; Spaulding v. Knight, 116 Mass., 148; Hartford Ins. Co. v. Matthews, 102 Mass., 221; Edwards v. Marcy, 2 Allen, 486;
      Jordan v. Picket, 78 Ala., 331; Carvil v. Jacks, 43 Ark., 454; s. c. Ib., 439 ; Hale v. Philbrick, 47 Iowa, 217., Md., 439; Winter v. Bandel, 30 Ark., 362; 1 Bigelow on Frauds, 543, 544, 535, 537.
    There was no reason why the court or jury should make a new contract for these parties, by saying that a fraud which lay at the very foundation of the contract was immaterial.
    Where the charge of the court to the jury is calculated to confuse and mislead the jury, as to the law of the case, there is error for which a judgment may be reversed. Ins. Co. v. Ins. Co., 5 Ohio St., 450; White v. Thomas, 12 Ohio St., 312; Railway Co. v. Wetmore, 19 Ohio St., 110; Insurance Co. v. Reed, 33 Ohio St., 283; Railway Co. v. Picksley, 24 Ohio St., 669.

      F. M. Ma/rriott and J. 8. Jones <& 8ons, for defendant in error.
    In the trial of the case before the court and jury below, there was no testimony offered which even tended to establish the defense, or to show that any answers made by George E. Warren were false, or if false, that they were willfully false or were fraudulently made, so as to bring them within section 3625 of the statutes.
    But to escape this failure of proof, counsel for plaintiff in error “maintain that section 3625, Revised Statutes of Ohio, is violative, not only of the constitution of Ohio, but also of the constitution of the United States,” and argue at great length to establish this contention.
    In answer to this we might well content ourselves by citing the case of the National Life Insurance Co. v. Brobst, 56 Ohio St., 728. We need not go out of Ohio to find authority establishing the right of the legislature to enact this and similar statutes. Smith v. Parsons, 1 Ohio, 239; Bank of Chillicothe v. Swayne et al., 8 Ohio, 283; Mansfield, C., and L. M., R. R. Co. v. Brown et al., 26 Ohio St., 224; Jewett v. Railway, 34 Ohio St., 607; Linderman v. Ingham, 36 Ohio St., 10; Bryan v. Insurance Co., 96 U. S., 627; Compton v. Railway Co., 45 Ohio St., 619; Wile v. The State, 46 Ohio St., 452; Cooley, Constitutional Limitations, 346; Insurance Co. v. Leslie, 47 Ohio St., 409; White v. Connecticut Mutual Life Ins. Co., 4 Dillon, Circuit Court Reports, 177; Moodie v. Insurance Co., 52 Ohio St., 23; Railway Co. v. Defiance, 52 Ohio St., 313; Norristown Tile Co. v. Hancock Ins. Co., 132 Pa., 385 ; New Era Life Ins. Co. v. E. N. Musser, 120 Pa., 384; Baxter v. The Brooklyn Life Ins. Co., 119 N. Y., 450.
    In the construction and interpretation of a statute, the court will look to the cause and the occasion of the passage of the act; Endligh, sections 29, 252, 295, 444, 446.
    The charge of the court was a most full, clear and accurate exposition of the law of the case. It was not misleading in any respect.
    Upon the question of temporary ailments and their effect upon a warranty in a policy or application, we cite: Lawyer’s Reports Annotated, vol. 22, p. 627, top of page ; May on Insurance, second edition, section 202, p. 246-7; 10 American State Reports, p. 242, and especially the notes; 70 New York Court of Appeals, p. 72-3.
    On the subject of the ten years’ health clause in the application we cite May on Insurance, second edition, p. 247; also Dillon v. Home Life Insurance Co., 69 N. Y., 256; Brown v. Metropolitan Life Insurance Co., 65 Michigan, 306; 8 American State Reports, 894; 97 Michigan, 513; 37 American State, 365.
    It is a well settled rule that “the answers need not be broader than the question requires.” 78 New York Court of Appeals, 568.
   By the Court :

In this state the subject matter of insurance is a franchise. State ex rel. v. Ackerman et al., 51 Ohio St., 163. And the state has a right to prescribe the terms and conditions upon which it grants such franchise, and the insurance company, having accepted the franchise with its terms and conditions, is bound thereby, and must accept the burdens with the benefits. Section 3625 was in force at the time this policy of insurance was issued, and therefore the legal effect is the same as if the section was copied into and made a part of the policy. The section is, therefore, a valid constitutional enactment. This section was held constitutional by this court in National Life Insurance Co. v. Brobst, 56 Ohio St., 728.

The case of Insurance Co. v. Pyle, 44 Ohio St., 19, was decided before this section was enacted, and, therefore, cannot control the matter. This section was passed for the purpose of abrogating the rule laid down in that case.

The court of common pleas, in the trial of the case, construed this section as requiring clear proof that the answers to the several questions by George E. "Warren were willfully false, and were fraudulently made, and were material and induced the company to issue the policy, and that but for suchanswers the policy would not have been issued, and that the company and its agents had no knowledge of the falsity or fraud of such answers at and before the delivery of the policy. In this there was no error. Such are the provisions of this section of the statute, and the statute should be construed so as to effect the intention of the legislature in passing the same. It will be noticed that the insurance company fails to allege that the answers to the questions were material, and without such allegation the answer failed to state a ground of defense, as it matters not how false and how fraudulent such answers may be, if they are not material, they furnish no. ground for defense to the company issuing’ the policy. There is, therefore, no error in the record and the

Judgment is affirmed.


author: By the Court:

text:
    Derby, Jr. v. Heath.

      Justice of peace — Authority to grant new trial — Section 6560 Revised Statutes.

    The authority of a justice of the peace to grant a new trial is limited by the terms of section 6560, Revised Statutes, by which it is conferred ; and an order made by him for that purpose more than five days after verdict and judgment is void.
    (Decided October 11, 1898.)
    Error to the Circuit Court of Erie county.
    Plaintiff in error brought suit before a justice of the peace in Erie county against the defendant in error to recover the sum of three hundred dollars, the value of sheep and lambs alleged by him to have been converted by her to her own use. The transcript of the justice’s docket shows the following entry on June 21, 1893: Court charged the jury and they were sent out, and after due consideration returned a verdict for plaintiff for ten dollars damage ($10.00). Thereupon it is considered by me that the plaintiff recover of the defendant, Eugenia Heath, judgment for ten dollars and costs of suit, taxed at forty-four dollars ($44.00).
    The following entry also appears on the same date: “Plaintiff filed a motion to set the verdict aside and for a new trial. Motion to be heard June 28, 1893, at 4 p. M. Adjourned to that time. ”
    June 28th, 4 P. M. “Parties appeared. Motion for new trial argued, which motion was on consideration by the court granted. Defendant moved to set aside order of court granting new trial, and the same was argued and court took until Monday, July 3, 1893, to decide the same. Court adjourned to July 3, 1893.”
    The following entry was made July 3, 1893: “Motion of defendant and order granting new trial was set aside. It is therefore considered by me on said third day of July, 1893, that the plaintiff recover of the defendant, Eugenia Heath, judgment for ten dollars and costs of suit taxed at forty-four dollars and six cents ($44.06). Plaintiff gave notice for appeal.”
    And on July 11, 1893, plaintiff gave an undertaking for appeal.
    In the court of common pleas, a motion of the defendant, plaintiff’s appeal was dismissed because no bond had been filed within the time required by statute. On error to the circuit court the judgment of the court of common pleas, dismissing the appeal, was affirmed. This is a petition in error to reverse both judgments.
    Wickham, Guerin <& French, for plaintiff in error.

      If the justice had power to render the judgment, the bond clearly was filed in time, and the court of common pleas had jurisdiction.
    We claim that the failure by the justice to render his decision on motion for new trial, until after four days from the rendition of the verdict, and to enter final judgment, until the third of July, was only an irregularity, or erroneous. Robinson v. Kious et al., 4 Ohio St., 593; Stallup v. Baker et al., 18 Ohio St., 545.
    If the justice in rendering judgment acts judicially, impliedly he has jurisdiction to'act, and a wrong- decision does not destroy his jurisdiction. If he has jurisdiction and acts erroneously the party aggrieved may either institute a proceeding in error to reverse, or may within the statutory period after judgment, appeal. Swan’s Treatise, 202 (14th edition).
    If it were conceded that the justice of the peace lost jurisdiction to enter the judgment, yet once having had it, consent can restore it. 12th Enc., 299, 300; Brown v. Crow's heirs, Hardin (Ky.), 451; Taylor v. Atlantic & Pacific R. R. Co., 68 Mo., 397 ; Gager v. Doe, 29 Ala., 341 ; 6 Cush., 563; 49 N. Y., 303; Richardson v. White, 19 Ark., 241; Bostwick v. Perkins, 4 Ga., 47; Fuld v. Dortch, 34 Ga., 399; Cleveland v. Welch, 4 Mass., 591; Butterman’s Appeal, 23 Weekly Notes, Pa., 14; Overstreet v. Prown, 4 McC., S. Car., 79.

      Phinney <& Merrill, for defendant in error.
    We claim that the justice by continuing the hearing of the motion beyond the statutory time, exceeded his power granted by the statute, and lost jurisdiction of the subject matter of the motion. His power was limited by the statute, which is imperative as to the time for hearing the motion and “what the justice then did was coram non judice and cannot be supported.” Sibley v. Howard, 3 Denio, 72; Watson v. Davis, 19 Wend, 371; Nicholson v. Roberts, 4 Nisi Prius Rep., 43; 6 S. & C. P. Dec., 233 ; Stephens v. Santee, 49 N. Y., 39; 12 Am. & Eng. Ency., 301.
    His power to entertain the motion for a new trial is derived directly from section 6560, Revised Statutes of Ohio (Giauque’s Statutes, vol. 2, pag-e 1617).
    The powers of justices of the peace, while treated liberally as to matters of form, cannot be enlarged beyond the power conferred by the statute. Hopple v. Brown Township, 13 Ohio St., 325.
    So strictly is this held that in all cases where the justice fails to render, that is, to announce a judgment on a verdict of a jury, in a case tried before1 him, on the day the verdict is returned, he loses all power of entering it, and it is held to be error for which it will be reversed if he does do so. Dunlap v. Robinson, 12 Ohio St., 530; Robinson v. Kious et al., 4 Ohio St., 593; Eaton v. French, 23 Ohio St., 562; Fairchild v. Keith, 29 Ohio St., 156.
    Again, there is no statute giving authority to the justice to hear and determine the motion for a new trial beyond four days after entry of judgment on the verdict, and it is a general rule that when jurisdiction is not conferred upon a tribunal by law, it cannot be conferred by consent of parties. Hawes on Jurisdiction, section 10; Brown on Jurisdiction, section 10; Gilliland v. Admr's of Sellers, 2 Ohio St., 223; Dayton & W R. R. v. Marshall, 11 Ohio St., 501; McLeary v. McLain, 2 Ohio St., 368; Rosebrough v. Ansley, 35 Ohio St., 107;
      Vogel v. Lawrenceburg Tobacco Mfg. Co. 49 Ind., 218 ; Fox v. Meacham, 6 Neb., 530, 535 ; Cheney v. Woodruff, 6 Neb., 151.
    The authority of the justice is derived wholly from the statute, that is the chart and the compass by which he is tobe guided. Thompson v. Church, 13 Neb., 287, 289; Perkins v. Jones, 28 Wis., 243; Hull v. Mallory, 56 Wis,, 355.
    The law fixing- the place for holding court is mandatory, and proceedings had elsewhere are void for want of jurisdiction of the subject matter. White v. Riggs, 27 Me., 114; Northrup v. People, 37 N. Y., 203.
    Section 594, Revised Statutes, requires a justice in all continuances to state the time to which the court is adjourned. Crandall v. Balch, 20 Wis., 639; 2 Freeman on Judgments, sec. 526.
    The only judgment under the statute that affords the least valid ground for an appeal, is the judgment rendered June 21st, twelve days before July 3d, and from this no appeal was taken.
    If the justice’s docket shows a trial and then a judgment, the judgment will be deemed as of the date of the trial, though the appeal bond recites a later date. Hoagland v. Schnoor, 17 Ohio St., 32; Landon v. Reed, 10 Ohio, 202.
   By the Court:

Since the undertaking for an appeal was entered into within ten days after the order made by the justice on the third day of July, but not within ten days after the judgment entered on the twenty-first day of June, we are required to determine which was the final judgment from which an appeal might be taken under section 6583 of the Revised Statutes.

It is admitted that the judgment immediately following the return of the verdict on the twenty-first day of June, was regularly rendered in accordance with the duties of the justice as defined by the statute. Was it vacated or annulled by the subsequent motions of the parties or the orders of the justice? The authority of a justice to set aside a verdict, and the time and manner of the application for its exercise, are conferred and defined by section 6560 of the Revised Statutes. It provides that the aggrieved party’s application for that purpose “must be by written motion, setting out the ground for a new trial, and must be filed with the justice within two days after the judgment, is entered, and must be determined by the justice within five days after the entry of judgment.”

The view generally taken that the liberality exercised with respect to the proceedings of justices of the peace in the exercise of their jurisdiction will not be extended to cases involving their jurisdiction is required by section 4 of article 9 of the constitution. It provides for the election of such officers and, without conferring upon them any jurisdiction, that “their powers and duties shall be regulated by law.” The power is, therefore, necessarily limited by the terms of the act granting it. The mandatory terms of the statute in question very clearly limit the power of the justice to set aside a judgment which he had entered according to law, to five days from its rendition. Being, therefore, without authority at the time of making them, his orders were ineffectual to vacate the judgment entered on the twenty-first day of June, and it was and continued to be the final judgment in the case.

This view of statutes conferring authority upon justices, has been taken by this court in Dunlap v. Robinson, 12 Ohio St., 530, and Eaton v. French, 23 Ohio St., 560. The same view was taken of a provision identical with this in Vogel v. Lawrenceburgh Tobacco Manufacturing Company, 49 Ind., 218.

Judgment affirmed.


author: Minshall, J.

text:
    Oglesby, Exr., v. Thompson.

      Partnership — Suit between partners for accotmt — Can be no judgment until balance ascertained — Rule as to burthen of proof.

    1. In a suit for an account by one partner against another, no judgment can be rendered in favor of either party for any sum until the account has been stated, and the balance due either, if any, thus ascertained.
    2. The burthen of proof in such case is on the plaintiff to furnish the evidence requisite to enable the court to state the account; and if he fails in this he fails in his action, and the petition should be dismissed, unless for good cause shown, a new trial is allowed.
    (Decided October 11, 1898.)
    Error to the Circuit Court of Warren county.

      W. F. Elt^oth and W. Chester Maple, for plaintiff in error.

      W. C. Thompson, for defendant in error.
    The arguments of counsel and cases cited are sufficiently indicated in the opinion. — Reporter.
   Minshall, J.

The plaintiff below, William C. Thompson, on April 27, 1894, commenced in the common pleas court of Warren county an action against Joseph M. Oglesby, executor of Thomas F. Johnson, deceased, alleging that he and the deceased, on or about the first day of October, 1880, entered into a partnership for the practice of the law at Lebanon, Ohio, and continued therein from that day until January 1,1891. That during the time they as such partners did a large amount of business, and that the amount of fees collected by the deceased, alone, amounted to not less than $21,000. The plaintiff admits that he received part of the fees, but does not state how much; that no settlement had ever been made between the parties, nor between the plaintiff and the administrator. He claims that at least $8,000 is due him and prays that an account may be taken of the affairs of the partnership. The defendant admitted his representative character of the deceased, but denied all the other allegations of the petition.

After a judgment for the plaintiff in the common pleas, the defendant appealed to the circuit court. The case was heard on the pleadings and the evidence, and the court rendered judgment for the plaintiff for the sum of $1,395.30 upon the following finding of facts :

“First — That a partnership existed between the said plaintiff and the said Thomas F. Johnson as in said plaintiff’s petition set forth, and that the same is unsettled.

“Second — That said Thomas F. Johnson received all the fees in what was known as ' the Ryan & Milroy case in Hamilton county, Ohio, amounting to the sum of $2,548.53, for which he has never accounted to the said plaintiff and that the said plaintiff is entitled to the one-half thereof, to-wit, the sumof $1,274.26 together with interest thereon from the date of the filing- of this suit April 27, 1894, and amounting to the sum of $121'. 13, in all the sum of $1,395.30 and ought to recover the same.

Third — And the court does further find that they are unable to state the account between the parties as to any other matter of the partnership. ’ ’

The defendant excepted to the judgment rendered upon this finding of facts and prosecutes this proceeding in error for its reversal.

It is difficult to see how this judgment can be permitted to stand. The court found that a partnership had existed as alleged, but did not undertake to state the account between the parties ; it declared its inability to do so. It found, however, as to one transaction that the decedent had collected all the fees, and not accounted for any part to the plaintiff, and rendered judgment for the amount. The judgment is not warranted by the finding. For ought that appears, on a settlement of the account, the plaintiff may be indebted to the estate of the decedent, or the real balance in favor of the plaintiff may be much less than the judgment. The plaintiff had the burthen of showing that, on a settlement of the accounts of the partnership, a balance was due him. If the evidence offered was insufficient to show this, then he would necessarily fail in his action for the want of proof ; for the finding will admit of but one interpretation, and that is that there had not been sufficient evidence offered to enable the court to state an account. It is always the duty of a court in a suit for an account to state it, if possible, from the evidence offered ; but if this is not possible according to the rules by which issues of fact are determined, it can do but one thing — dismiss the action for an account. An ascertainment of the state of the accounts is a necessary predicate to the rendition of any judgment in favor of the plaintiff. Ashley v. Williams, 17 Oregon, 441; Maupin v. Daniels, 3 Ten. Chan., 223 ; Hall, Admr., v. Clagett, 48 Md., 223; Slater v. Arnett, 81 Va., 432; Davidsons. Wilson, 3 Del. Chan., 307, 317; Rick v. Neitzy, 1 Mackey, 21.

In Ashley v. Williams, it is correctly said that, ‘ ‘where there are issues as to the existence of the partnership, and the condition of its accounts and business, the burden of proof is on the plaintiff, and if he cannot furnish sufficient evidence to enable the court to state a partnership account his suit necessarily fails. ” See also Maupin v. Daniels. This is the purport of all the cases. No other rule could be adopted consistently with the ends of justice. A partner has no right to recover of his copartner any part of the earnings or profits of the business, until it has been ascertained that earnings or profits have been made, and an account stated between the parties as to the amount received by each.

The cases of Evans v. Montgomery, 50 Iowa, 325; Bevans v. Sullivan, 4 Gill, (Md.), 383; Martin v. Smith, 52 N. Y. Supr. Ct., 277, and Langell v. Langell, 17 Oregon, 220, cited by the defendant in error, do not conflict with this view, or the cases above cited. They go no further than to hold, that it is the duty of the court to state an account if possible; and that absolute accuracy is not necessary. This may be said to be true of all litigation; absolute certainty is not required. Disputed facts, in civil suits, are determined upon reasonable probabilities — a mere preponderance of evidence is sufficient to determine the affirmative of an issue. The cases referred to, however, afford no authority for saying, that the court may speculate as to the state of the accounts, or allow a recovery for an item without any proof as to the state of the accounts as between the partners. In, Slater, Myet'S & Co v. Arnett, supra, the syllabus is as follows: “Where suit in equity is instituted to settle the accounts of a dissolved firm, one of the members being dead, and the report of the master to whom the accounts have been referred, shows that, after diligent search, he has been unable to discover and report any evidence whatever to base a statement of the true condition of affairs between the members of the late firm, and of its assets, etc., the court, not being able to proceed to judgment upon suppositions and presumptions without evidence, can do no better than to withhold its hand, and to leave the parties to stand where they have placed themselves before the suit was brought.”

We are then of the opinion that the judgment should be reversed and cause remanded to the circuit court for further proceedings. The plaintiff on motion may be awarded a new trial, if he can make the proper showing; and if not, his motion should be overruled and his petition dismissed. Of course his “showing” must involve assurance to the court, that he can produce evidence, not produced at the former trial, and which he could not then, by the use of ordinary diligence, have produced, tending to show that an account, may be stated between the parties, touching the partnership.

Judgment reversed and cause remanded to cvrcuit court for further proceedings. the