author: Martin, J.

text:
    Jones v. Bangs.
    1. Where a complete note, payable at a future day and containing no stipulation' as to interest, is altered by the principal maker without the knowledge of his surety, before its delivery, by the addition of the words “with ten percent, interest from date,” Held: That such alteration is material and makes the note void as against the surety, although the same is made without the knowledge of the payee.
    2 Where the charge of the court to the jury was manifestly erroneous as to a material issue raised by the defense, and the record does not disclose all the evidence, the judgment should be reversed, although it does not appear that the defendant was prejudiced thereby.
    Error to District Court of Ross County.
    Hannah A. Bangs, the defendant in error, brought suit as payee and holder of two promissory notes against William Jones, the plaintiff in error, and A. W. Thompson, two of the makers thereof to recover the amount due thereon.
    A copy of one of the notes is set out in the opinion of the court. The other note is for same amount, to same payee, by same makers, payable ten months after date and dated February 1st, 1873, and contains this clause: “ at ten per cent, interest per annum.”

      It was admitted that Jones signed both notes as surety for C. B. Thompson. The trial was to a jury who rendered a verdict for the amount due on the notes. The only issue tried was raised by one branch of the answer and a reply thereto by way of denial. That answer was this :
    2. That said notes were altered, after he had signed his name to them, so far in their tenor and effect, and without his consent, as to the first note, by writing therein the words, “ at ten per cent, interest per annum,” and in the second note “ with ten per cent, interest from date.”

    Testimony was given on both sides relative to that issue. A motion for new trial, predicated on the refusal of the court to charge as requested, and an alleged error in the charge given, was overruled, and a bill of exceptions taken. Thereupon a finding on default was taken against A. W. Thompson and judgment against both defendants.
    The bill of exceptions amongst other things recites:— And, be it further remembered, that at said trial, at said term of court, evidence had been given tending to show that the notes sued upon had been fraudulently altered after being signed by said Jones, either with or without the consent and connivance of said plaintiff, as alleged in said first defense, and, on the other hand, evidence had been given tending to show that such was not the case, and the evidence being all in, the said defendant, by his counsel, asked the court to charge the jury: “That, if the jury should find that the note, or notes sued upon, had been changed or altered as alleged in the first defense of the amended answer, after they had been signed by said Jones, and without his knowledge or consent, then the contract upon which he is sued is not the contract which he signed, and the plaintiff cannot recover.” Which said charge the court refused to give, but did charge the jury as follows, in respect to said first defense:
    “ Each note constitutes a separate cause of action, and to each the same defenses are pleaded. As to the first defense to each note, the burden is upon the defendant to maintain this defense by a fair preponderance of the evidence, and in order to make out this defense the proof must satisfy you of two things:
    1. “That the note, in each case,, was altered by the insertion of the clause'as to interest, after it had been signed by the defendant Jones, and without his consent.
    2. “ That it was so altered with the knowledge, consent, or procurement of the plaintiff. For if the note (either of them) was altered before its delivery to the plaintiff without her knowledge or consent, such alteration will not affect its validity in her hands.”
    On error to the district court assigning the said refusal to charge and the charge as given for error, the judgment was affirmed. To reverse the judgment of affirmance this proceeding was instituted.

      William V. Lawrence and Albert Douglas, Jr., for plaintiff in error.
    As to alteration. 1. As to the paper itself, see Wait v. Fomroy, 20 Mich., 425; Somes v. Trumper, 22 Mich., 427; Waterman v. Vose, 43 Me., 504; Draper v. Wood, 112 Mass., 315; 2 Ellis & Blackburn, 763; 108 Mass., 366.
    2. As to parties. The proposition we make in this case is this: The unauthorized alteration of a promissory note, by writing therein an interest clause, after it has been signed by a surety, while in the hands of the maker, and without the procurement or assent of the payee, renders the same void in the hands of the payee as against such surety. ¿Etna National Bank v. Winchester, 43 Conn., 391; Trigg v. Taylor, 27 Mo., 245; Schuewinde v. Sateher, 54 Ind., 248; 1 Allen, 477; Fuller v. Seitz, 68 Penn. St.', 237; Wood v. Steele, 6 Wallace, 30; Miller v. Stewart, 8 Wheaton, 68; 4 Denford & East, 320.
    After commenting on Fullerton v. Sturges, 4 Ohio St., 529, counsel, to show the current of decisions since that case, in addition to above authorities cited Masters v. Miller, 4 Den. & East, 320; 1 Smith’s Leading Cases, 934, et seq.; Leake on Contr., 425; Chitty on Bills (9th Am. Ed., 203, Dovsian v. Cooper, 13 M. & W., 343 and 352; Mallin v.
      Wackinbrath, 3 E. & B., 683); 23. Me., 329; 13 Pick, 165; 13 Mass., 26; Greenfield Bank v. Stowell, 123 Mass.,.203.; Warrall v. Greene, 39 Pa. St., 388; Coburn v. Webb, 56 Ind., 100; Miller v. Finley, 26 Mich., 249; Ivory v. Michcel, 33 Mo., 400; Brittain v. Dieken, 46 lb., 591; 2 Am. Rep., 553; Bruce v. Westcall, 3 Barb., 374; Benedict v. Gowden, 49 N. Y., 396; McGrath v. Clark, 56 lb., 34; Godman v. ' Eastman, 4 N. H., 455; Genish v. Glines, 56 lb., 9; More-head v. Parks H. Bk., 5 W. V., 74; 13 Am., 636; Owings v. Amat, 33 Miss., 406.

      Harrison, Olds Marsh and Van Meter Throckmorton, for defendant in error.
    I. The first alleged defense does not state.facts.sufficient to constitute a bar to either of the rights of action set forth in the original petition. The new matter therein, set up, does not avoid either of the notes upon which such rights of action are founded. It does not indicate, in any manner, by whom the alleged alteration of each note was made. It does not allege that either was done with the knowledge, or by the authority or direction, of the plaintiff below; nor does it-even allege that either was made without the knowledge of -the defendant, Jones. It does not allege whether the alterations were made before or after the notes respectively were negotiated and delivered. Neither does it contain any allegation inconsistent with the fact or conclusion that the alleged alterations were made by a stranger; and, if so, the alleged alterations would not have affected the validity of the notes. It follows that if a demurrer had been interposed to said defense on the ground that it is bad in substance, judgment must have been rendered-sustaining such demurrer. Fullerton v. Sturges, 4 Ohio St., 530; United States v. Linn, 1 Howard (U. S.), 104; Humphries v. Crane, 5 Cal., 173. The material alteration of a written instrument made by a stranger will not avoid it. To have that effect the alteration must be made by or with the privity of one claiming a benefit under the instrument, and (to give application to the doctrines upon that subject) after the instrument has been delivered and taken effect. Fullerton v. Sturges (supra) ; United States v. Spalding, 2 Mason, 478.
    II. A judgment will not be reversed because an erroneous instruction was given to the jury, unless the record 'discloses some evidence tending to show that the instruction was material. Louderhack v. Qollins, 4 Ohio St., 251. Erroneous instructions to the jury which the record shows could not have prejudiced the party is no ground for reversal. Orieleett v. The State, 18 Ohio St., 9. We have endeavored to show that the first defense did not set forth facts sufficient to bar a recovery by the plaintiff below; so that upon the'petition, the first defense, and the reply thereto, she was entitled to judgment. It follows, we submit, that the record shows that the plaintiff in error could not have been prejudiced by the instructions of the court to the jury as to the first defense.

      Again, every statement in the record may be true, and yet the alleged alterations may have been made by a stranger. So that even if the court erred, as opposing counsel claim, in charging that if either of the notes were altered before its delivery to the plaintiff below, without her knowledge or consent, such alteration would not affect its validity; and hence, such error would be no ground for reversing the judgment. The plaintiff in error was not prejudiced by such instruction; for without proof that the alleged alterations were not made by a stranger, they did not render the notes void as to him. . .
    Finally, on this point the first proposition in the charge as to the burden of proof is sustained by the case of United States v. Linn (supra), and many other authorities. The rule is, that where the defendant alleges an alteration of a note after he signed it, if the alteration be not apparent on the face of the instrument, the burden is on him. Davis v. Jenney, 1 Met. (Mass.), 221; Meikel v. State Savings Insti tution, 36 Ind., 355; King v. Bush, 36 111., 142; Bank v. Irwin, 31 Ga., 371; Jones v. Ireland, 4 Iowa, 63.
   Martin, J.

The makers and payee of each note are the same. For convenience we will consider the note which reads:

“11,000. Chillicothe, 0., February 18th, 1878.
One year after date we, or either of us, promise to pay to the order of Mrs. J. J. Bangs one thousand dollars, for value received — with ten per cent, interest from date — ■
C. B. Thompson,
Vm. A. Jones,
J. P. Steeeev,
A. W. Thompson.5’

The answer of the suret}*- Jones merely alleges that after he signed the note it was altered, without his consent, by the addition of the words “ with ten per cent, interest from date.” By whom and when, whether before or after delivery, or with or without the knowledge of the principal or payee, is not stated. The plaintiff making no objection to the answer on account of this indefiniteness, put in a reply amounting to a general denial. On this issue alone the case went to a jury and testimony was given tending to show an alteration as charged in the answer. The defendant requested an instruction to the jury to the effect that if they found that the note had been altered as stated in the answer, then the note sued on was not the note he signed and the plaintiff cannot recover. This instruction the court properly refused to give. The charge given ivas “ that if the note was altered before delivery to the payee without her knowledge or consent, such alteration will not affect its validity in her hands.”

The only questions to be decided arise upon this charge. As applied to the note under consideration, the charge is to the effect that a material alteration of a complete note, made by the principal maker, before delivery and without the knowledge of the surety, does not discharge the surety, unless such alteration was made with the knowledge, consent or procurement of the payee. We think this charge is manifestly erroneous. We are sustained in this view by numerous well considered adjudications: in New York, McGrath v. Clark, 56 N. Y., 34; Connecticut, Ætna National Bank v. Winchester, 43 Conn., 391; Massachusetts, Draper v. Wood, 112 Mass., 315 ; Pennsylvania, Fulmer v. Seitz, 58 Pa. St., 237; Maine, Waterman v. Vose, 43 Me., 504; Michigan, Bradley v. Mann, 37 Mich., 1; Indiana, Schueiwinde v. Hacket, 54 Ind., 248; Missouri, Frigg v. Taylor, 27 Mo., 245.

Many other authorities bearing directly on the point, from the same and other states, are cited in the able -brief of counsel for plaintiff in error. The alteration was certainly material. When it was signed by the surety the note bore no interest before maturity, and was for the payment of $1,000 and no more when due. As altered it drew interest from date and was for the payment of $1,060 at maturity'. It may be well to remark (although it is not an important circumstance,) that the note is joint and several. The principal was not a party to the action; and the plaintiff planted her case on the several promise of the surety. If the surety is bound, it is because of his promise. There is no intimation in the record that his alleged liability was assumed otherwise than by his written promise. When he signed and handed the note to his principal, he thereby authorized its delivery as it was then written. And he would have been bound accordingly to the - payee or any subsequent bond fide holder.

By the subsequent alteration its identity' was lost, and there arose another and distinct obligation' which he had not signed. To hold him bound by the new contract he must, in some way consistently with legal principles, be concluded by the act of his principal or other person in making the alteration. lie may' be thus concluded by authority previously' given, or by subsequent ratification, or by conduct on his part raising an estoppel. There is no claim made of subsequent ratification. And there is no suggestion of authority other than the mere fact that he entrusted the paper to his principal for negotiation. The principal had the custody' of the note with authority to deliver it. If the surety had parted with' the note, leaving a blank for the insertion of the amount or other material part, the custody of the note would have carried with it unrestricted authority to fill the blank accordingly. Fullerton v. Sturges, 4 Ohio St., 599. In this instance there was no blank to be filled. The surety carefully fixed in writing all the terms of his contract — the day of payment and the precise amount he was to pay. The note was complete when it left his hands, and conferred no authority on anybody to alter it.

Did the conduct of surety estop him from saying that the alteration was without his consent? The record of his conduct is brief. He signed the note at the request of his principal, and handed it to him for delivery to the payee. This is all of it. It was a single transaction incapable of being misunderstood.

It is claimed by learned counsel for the defendant in error that the surety here falls within the rule, “ Whenever one of two innocent parties must suffer by the act of a third, he who has enabled such person to occasion .the loss must sustain it.”

The application of this rule to the unauthorized alteration of a complete note by one of the promissors, before delivery, and without the knowledge of the other, is expressly denied in McGrath v. Clark and Ætna Natl. Bank v. Winchester, supra.

The construction of an instrument may, it is true, be so faulty as to afford exceptional facilities for alteration. And in such case negligence to some extent may be imputed to the maker. He may possibly be said to have enabled his co-maker to commit the forgery. Every such case must stand on- its own peculiar circ'umstances. In this record, however, we see no evidence of negligence on the part of the surety.

The alteration consisted of words added at the end of the note. In what respect was the surety negligent in not anticipating and preventing this crime ? He might, it is true, have drawn an elongated scroll from the end of the note before parting with it. If this was his duty, it was likewise his duty to have excluded the possibility of fraudulent alteration on any part of the space within the four corners. A construction of the rule which exacts such suspicious care, and requires the surety to regard his principal as a rogue, is untenable and wholly unsuited to the practical business methods of our people.

The case of Fullerton v. Sturges, supra, is confidently relied on by the defendant in error, as sustaining the position that the participation of the payee in a material alteration, before deliveiy, is necessary to avoid the note as to a surety who had no knowledge of, and had given no authority to make, the alteration. As we understand that case, the alteration consisted in affixing a seal to • the name of the surety before delivery and was wholly immaterial. Therefore, all that was said by the eminent judge who delivered the opinion on the law relating to a material alteration, is obiter.

It is insisted, however, on behalf of the defendant, that the error in the charge is immaterial because of the deficiencies of the answer.

To this we cannot accede. The answer set up a partial defense at least, and the intent was to state a full defense. The plaintiff claimed to have established by the testimony that the alteration was made under circumstances that would in law discharge the surety. The charge assumed that the testimony tended to show the alteration was made before delivery. Had there been a general or special verdict warranted by the testimony in favor of the defendant, it would have been the duty of the court to save the rights of the defendant by ordering an amendment of the pleading if necessary. The mere fact that the record does not affirmatively show that the defendant was prejudiced by the error in the charge is not important. It is sufficient that he may have been prejudiced. The testimony is not before us. Baldwin case, 1 Ohio St., 141; Railroad Company v. Stallman, 22 Ohio St., 1.

We consider it unnecessary, in view of what has been said, to comment on the other note described in the record.

Judgment of the district court reversed.


source: Caselaw Access Project

author: Dickman, J.

license: Public Domain

text:
    Manufacturing Company v. Morrissey.
    M., while using a machine in his capacity of workman for a manufacturing company, acquired a knowledge of its defects and consequent unsafe condition. He complained of its condition to the foreman, under whose orders he was working, and whose duty it was to see that the machinery was kept in good order and repair. The foreman promised him to remedy said defects, and directed him to go to work on the machine. The workman thereupon remained in the service of the company, and continued to use the machine, and in so doing was injured through its said defects before any steps were taken to remedy the same.

      Held. That the workman’s knowledge of the defects in the machine was hot, under the circumstances and as matter of law, conclusive of contributory negligence on his part; but it was a fact in the case to be taken into consideration by the jury, with all the other facts and circumstances, in determining the question, whether the workman’s own negligence contributed to the accident by which he was injured.
    Error to the District Court of Lucas County.
    Patrick Morrissey, defendant in error, commenced an action in the court of common pleas of Lucas county against the Union Manufacturing Company, plaintiff in error, for damages alleged to have been sustained by him while in the service of the company, through the company’s negligence in furnishing him hazardous and unsafe machinery to use, and placing over him an incompetent foreman.
    The company was, in the year 1878, and had for some time before, been engaged in manufacturing wooden pails. Morrissey was injured by having a portion of his hand cut off while he was at work on a machine known as a “pail-lathe,” which was composed in part of a circular saw, a jointer, and a bed .or carriage commonly called a “ bunk ” — all used in the s'everal operations necessary to make a pail, such as cutting off the staves- to equal lengths, jointing them, turning out the inside, turning off the outside, &c.
    One Tivniin was the foreman of the room in which Morrissey was at work when injured, and as such had charge of all the men and machinery in the room. It was the foreman’s duty to manage and control the men, and see. that the machinery was kept in good order and condition.
    On the morning of the injury,'the foreman directed Morrissey, who had for sixteen months been at work under hirn on the lathe, to go to work on, the part known as the jointer. He had, worked on the jointer before this time for about six months. The jointer was in bad condition, and Morrissey called the foreman’s attention to it, saying in reference to what is known as the bunk, “ There ought to be something done with that.” The foreman replied, “You joint a 'few staves — get out some staves to keep these fellows going— and I will take it up stairs and get it fixed.” Morrissey thereupon commenced jointing, and shortly after, by reason of the defect in the bunk, his hand was forced against the saw teeth, and he was hurt as stated in his petition. About two weeks before he was injured, he had heard the foreman-say to one of the workmen, named Fuller, who had called his attention to the bunk’s need of repair, “ I want you to keep on working until we get a lay off and I will get it fixed.” *
    In the court of common pleas, the testimony tending to show the negligence of the company, and all the facts in the case having been given to the jury, the court upon the' motion of the defendant took the consideration of the case from the jury, and directed a verdietfor the defendant — charging, that it was_ “ a question entirely of law,” and that Morrissey “ had been guilty of gross negligence in using dangerous machinery when it was out of order ” * * “ although,” as the court further charged, “there was no dispute but that the defendant was guilty of gross negligence.”
    Morrissey by his counsel excepted; filed a motion fora new trial; and upon judgment for defendant being rendered, took bill of exceptions embodying in it all the testiniony and charge of the court; and filed his petition in error in the district court, where the judgment of the court of common pleas was reversed, and the cause remanded for a. new trial.
    The case is here on petition to reverse the judgment o£the district court.

      W. A. Collins and George JR. Haynes, for plaintiffs in error.
    On the question of contributory negligence cited .Railroad Co. v. Barber, 5 Ohio St., 563; Railroad Co. v. IFéM, 12 Ohio St., 475; Railroad Co. v. Fitzpatrick, 31 Ohio St., 479; Sowden v. Idaho, 55 Cal., 443; Railroad Co. v. Semple, Texas Law Rep. (March, 1883), 890; Railroad Co. v. Drew, Id., 925.

      Pratt and TPiZsow, for defendant in error.
    1. The fact that Morrissey knew that the machine was in bad condition, did not, as matter of law, preclude him from recovering against the company when he had estab-' lished the fact of its negligence.
    2. The question whether Morrissey, in running the machine after he knew its condition, and under the promise that it should be repaired, was guilty of contributory negligence, was one for the jury and not for the court to pass upon, and it was error for the court to direct a verdict against the* plaintiff. 2 Thompson on Neg., 1009, § 16; Sherman & Red. on Neg., 126, § 96; Cooley on Torts, 559 ; Wood on Master & Serv’t, § 352; Wharton on Neg., §§ 220, 221;' Hough v. Railroad Co., 100 U. S., 213; Holmes v. Worthington, 2 Foster & Finlason, 533; Clarice y. Holmes, 7 Hurlston & N., 937; Holmes v. Clarice, 6 Id., 348; Lan■ing v. Railroad Co., 49 N. Y., 521; Patterson j. Railroad Co., 76 Pa. St., 389 ; Conroy v. Vulcan Iron Worlcs, 62 Mo., 35 ; Greenleaf v. Railroad Co., 33 Iowa, 52; Railroad Co. v. Crawford, 24 Ohio St., 631; Railroad Co. v. Piclcsley, Id., 654; Beliefontainev. Snyder, Id., 670; Railroad Co. v. Knit-tell, 33 Ohio St., 468.
   Dickman, J.

There is no evidence that there was any carelessness on the part of Morrissey the defendant in error, in his mode of operating the machine through whose defects he was injured. On the morning of his injury — from the time of his commencing work, up to and at the time he was injured — he ran the machine much slower than usual, on account of its bacl condition, and in order to avoid being hurt. The contributory negligence imputed to him, consisted in his knowing that the part called the “jointer” was out of repair, and could not be safely'used, and in thereafter remaining in the service of the company and continuing to operate that portion of the machine. For that reason, the court below took the ease from the jury, and directed a verdiet for the company. The question of contributory negligence on the part of the plaintiff is generally a mixed question of law and fact; but, it is only when the facts are beyond dispute and admit of no rational inference but that of negligence, that the court has the right to apply the law without the aid of a jury. The defendant in error, while in the employment of the company, was under the supervision and direction of a foreman, whose duty it was to manage and control the workmen, and see that the machinery was kept in good order and repair. As soon as Morrissey discovered, that the part of the machine upon which he was working, was in a condition unsuitable for use, he complained of the same to the foreman, who promised him that the defects in the machine should be remedied, and ordered him to continue at his work. He thereupon began work at once at the jointer, and in a short time thereafter, was injured through its defects, before any steps were taken to remedy them. As a fact which was taken to be beyond dispute, the court charged the jury, that the company was guilty of gross negligence. But, the court, in view of another fact beyond dispute, viz.: that Morrissey worked at the.machine with knowledge of its defective condition, evidently considered it a settled principle, that such knowledge was, as matter of law, conclusive of contributory negligence on his part; and ignored the importance of other material questions of fact not beyond dispute, which might tend to qualify or limit the legal effect of such knowledge, and which should have been submitted by the court to the consideration of the jury. After the promise made to Mor rissey himself by the foreman that the jointer should be “fixed,” and after hearing the foreman promise the same thing two weeks before to another workman, it became a material question of fact for the jury to determine, under' proper instructions from the court, whether Morrissey after acquiring such knowledge, continued such a length of time in the service of the company, as to constitute a waiver on his part of the defects in the machine. Whether he after-wards remained in the employment of.the company, because of iiis reliance on the promise of the foreman to put the jointer in repair ; and whether the jointer was out of repair to such an extent, that a man of .ordinary care ■would not continue to use it, even after a promise to put it in good repair* — were also questions of fact, which should have been left to the determination of the jury, under proper instructions from the court. But it could not, in order to take the case from the jury, be said with reason, that knowledge alone of defects in the machinery and continuing to use the same, as matter of law,'admitted of no rational inference but that of negligence, when such knowledge is taken in .connection with the fact, that Morrissey complained to the .foreman of the defects, and received from him a promise that they should be remedied.

; The court below applied the doctrine in all its latitude, .•without any qualification in the light of other facts and cir.cumstances of the case, that if one knowingly and voluntarily exposes himself to danger by using dangerous ,■ machinery, he cannot be said to be without any fault or negligence on his part, and therefore cannot recover for ¡injuries suffered by him inconsequence. That a knowledge of the unsafe condition of the machinery used, is a .most important-element in determining the question of contributory negligence, there can be no doubt. Alone and unexplained, it may, under some circumstances, be conclusive thatthe injured party was willing to assume the attendant risks, and waive all. objections to the defects that rendered the machinery hazardous. But, such knowledge, on the part of one induced to remain in the service of an employer by a promise to remove the cause of danger, is not of itself,-in point of law, an answer sufficient to exonerate a defendant, who has omitted to supply machinery that is safe and proper. Relying upon such inducement held out by their employers, the most prudent workmen will often take risks, not merely on account of their own necessities, but in consideration of their employers whose interests require their continued service. Under such circumstances, the weight of authority is in accord with the language of Willes, J., in Holmes v. Worthington, 2 Foster and Finlason, 533.

“ If the defendants knew of the defect and undertook to repair it, and the plaintiff went on working, relying on their repairing it, then they may be liable. If the plaintiff complained of the defect, and the defendants promised that it should be remedied, he is not to be deprived of his remedy, merely because, relying on their promise, he remained in their employment.”

To the same effect was the judgment in Clarke v. Holmes, 7 Hurlstone & Norman, 937, in the exchequer chamber on appeal from the decision of the court of exchequer. In that case, the plaintiff was employed by the defendant to oil dangerous machinerjn At the time the plaintiff entered upon the service, the machinery was fenced, but the fencing became broken by accident. The plaintiff complained of the dangerous state of the machinery, and the defendant promised him that the fencing should be restored. The plaintiff, without any negligence on his part, was severely injured in consequence of the machinery remaining unfenced. It was held, in the exchequer chamber — affirming the judgment of the court of exchequer— that the defendant was liable for the injury. Chief Justice Cockburn, in delivering his opinion, very forcibly draws a distinction between the case of an employé who knowingly enters into an engagement to work on defective machinery, and that of him, who in the course of his employment discovers its defective condition, but is induced-to remain in the same service by the master promising him to remedy the defect. If the master in such a case fails to fulfil his obligation, the employé cannot be held to have waived his right to hold the'master responsible.

The rule recognized in the English courts, has been followed by the supreme court of the United States in the instructive case, Hough v. Railroad Co., 100 U. S., 213. In that case, the engineer had a knowledge of the defect in the engine, and complained thereof to both the master-mechanic and the foreman of the round-house. They promised that it should be promptly remedied. But, the court below seemed to attach no consequence to the engineer’s complaint, or the promise made to him. Under the instructions given, if the engineer worked the engine with knowledge of its defect, the jury were to find for the company, although, ho may have been justified in relying upon the promise made to him that the defect should be remedied. The instruction in that branch of the case, involving the question of contributory negligence on the part of the engineer, was considered by the supreme court misleading and erroneous. Justice Harlan cites approvingly the language of Mr. Cooley, in his work on Torts. “If the servant having a right to abandon the service because it is dangerous, refrains from doing so in consequence of assurances that the danger shall be removed, the duty to remove the danger is manifest and imperative, and the master is not in the exercise of ordinary care unless or until he makes his assurances good. Moreover, the assurances remove all ground for the argument that the servant by continuing the employment engages to assume all risks.”

In view of the whole current of authority, and in the light of reason, we are led to the conclusion, that under the circumstances of the case at bar, Morrissey’s knowledge of the defective state of the machine which he was using and continued to use, was not, as matter of law, conclusive of contributory negligence On his part. Such knowledge however was a prominent fact in the case, to be taken into consideration by the jury in connection with all the other facts and circumstances, in determining the question, whether his own negligence contributed to the accident by which he was injured.

The judgment of the district court must be affirmed.

Judgment accordingly.


author: Nash, J.

text:
    Hartwell v. Railroad Co.
    1. The power of a city or village council “ to open, construct, keep in order and repair sewers, drains and ditches,” conferred by paragraph 21, section 199 of the municipal code (72 O. L., 107), was not, in 1S77, restricted by chapter 50 of said code (66 O. L., 251), unless council, acting under said chapter, in the exercise of its discretion, had previously determined that it was necessary “to provide a system of sewerage and drainage ” for the city or village.
    2. The manner in which council should have exercised the power conferred by paragraph' 21, section 199, when unrestricted by chapter 50, was contained in chapter 49, municipal code (66 O. L., 245).
    Error to the District Court of Hamilton Count}7.
    llealy, Brannon Desmond, for plaintiff in error.

      -Bamsey Matthews, for defendant in error.
   Nash, J.

On the 11th of December, 1876, the council of the village of Hartwell adopted a resolution declaring the necessity of improving Ohio avenue in said village, by constructing a sewer therein from its northern to its southern terminus. The publication of this resolution, required by section 563, chapter 49, municipal code (66 O. L., 245), was made. This resolution provided also that the expense of the improvement should be assessed upon the abutting property per foot front. The subsequent steps in the construction and completion of this improvement, and in the assessment of the cost thereof upon abutting property, were a substantial compliance with the provisions of chapter 49, municipal code (66 O. L., 245 — 251).

The action in the court of common pleas was brought by the village for the use of the contractor, to enforce the collection of the assessment levied upon the abutting property of the defendant. In this court there was a judgment in favor of the village of Hartwell. An appeal was taken to the district court of Hamilton county and there the judgment was in favor of the Cincinnati, Hamilton and Dayton railroad company. We are asked to reverse the judgment of the district court.

The principal reason urged against this request is, that the power of municipal corporations in 1876 to build sewers and to levy assessments therefor, was limited and restricted .by the provisions of chapter 50, municipal code (66 O. L., 251 — 256). We cannot concur in this interpretation of the statutes. The first section of this chapter — 602—vested in the council of any city or incorporated village the power to determine when it became necessary to provide a system of sewerage and drainage for the city or village. The provisions of chapter 50 did not become operative or binding upon council until this determination had been reached.

If the theory of the defendant in error is correct no sewerage or drainage could have been provided for a city or village until council had determined that “a system of sewerage and drainage ” was necessary. There w.ere at that time many cities and villages in Ohio, in which the councils had not made this determination and in which to have done so would have been absurd. In such .cities a sewer or drain may have been required, without the necessity of “ a system of sewerage and drainage.”

Such cases were amply provided for by the general assembly. Paragraph 21, section 199, Municipal Code (72 O. L., 107), clothed the councils of municipal corporations with power “ to open, construct, keep in order and repair sewers, drains and ditches.” This power rvas restricted only in cities and villages where the councils had declared' the necessity of “a system of sewerage and drainage.” A sewer is a public improvement and the manner and means of exercising the power conferred by paragraph 21, section 199, was provided by chapter 49, Municipal Code.

• The council of the village of Hartwell had not found that there was a necessity for “a system of sewerage and drainage ” in said village and the record shows that there was in fact no such necessity. Therefore the council proceeded to exercise the power conferred by paragraph 21, section 199, and in substantial compliance with the provisions of chapter 49, Municipal Code.'

Judgment of the district court reversed.


text:
    Baker v. Morath.
    Where an undertaking for a second trial, provided by section 691 of the Code of Civil Procedure (2S. <fc C., 1155), recites the amount of the judgment in the first trial, in addition to the parties, the court, the . term and the person who recovered it, such matter is merely descriptive, and an omission, which does not affect the identification of the case, is not material and does not invalidate the undertaking.

      Charles IT. Killer, for plaintiff in error.

      Chas. Kollett Son, for defendant in error.
   Nash, J.

June 9fch, 1871, one Dojph with Michael Morath as surety gave a second trial bond in the-court of common pleas of Licking county as provided by section 691, of the Code of Civil Procedure (2 S. & C., 1155,) in a ease in which Wm. Baker had recovered a judgment against Dolph for the sum of $1,828.90. Upon a second trial Baker recovered a judgment against Dolph for $1,992.30. In January, 1878, Baker recovered a judgment against Morath upon the second trial bond above referred to. The district court reversed the judgment of the court of common pleas chiefly on the ground that the second trial bond did not sufficiently describe the original judgment of Baker against Morath. It is claimed that the amount of the judgment obtained at the first trial, is not correctly stated in the second trial bond. The condition of the second trial bond was not that the judgment in the first trial should be paid, but that the party obtaining the second trial should abide and perform the order and judgment of the court, yet to be rendered. If this be true, Morath had no interest in the amount of the judgment rendered in the first trial. It was mentioned in the second trial bond, with other things, for the purpose of identifying the case. Statements were made in the bond of such character as identified the case in which the second trial bond was given, and it was immaterial whether the amount of the judgment in the first trial was correctly stated or not.

Judgment reversed.


author: Granger, C. J.

text:
    Sinton v. Butler.
    S., the owner of a block of three buildings containing separate elevators operated by an engine placed in the rear of one of them, leased to T. H. & Co., another of them, stipulating that the lessees should have possession of the premises ; they agreeing with care and diligence to keej> the same in good order and condition during the term, they to pay to S. quarter yearly the cost of keeping in good order all the parts of said elevator contained in said leased premises and one-tlxird of the expense of running said engine. S. employed and paid the engineer to work for the block so leased, but did not interfere with or supervise his work ; made repairs to the elevator when notified of their necessity by the tenants, and was reimbursed by the tenants quarterly. Prior to the termination of the lease the parties agreed to extend it, S. undertaking that from January 1, 1874, he would “ at his own cost keep the elevator in said property in repair providing the lessees hereto use proper and judicious care in the use of the same.” After January 1874, the only change in conduct was that S. did not call upon the lessees for reimbursement for such repairs. On Aug. 11, 1874, the rope broke, the elevator with B., an employd of the lessees upon it, fell, and B. was injured. S. had not been notified that any repairs were needed. The engineer as he oiled the machinery had opportunity to see it. The elevator was exclusively operated by the lessees and their employes.

      Held: 1. S. was not at the time of the accident in possession and in control of the elevator nor was he conducting or operating it.
    2. The fact that the engineer so employed had opportunity to see the machín ery was not notice to S. of the need of repairs.
    3. It -was the duty of the court to construe the terms of the contract bearing upon the relation of the parties to the machinery, and it was error to refuse to give to the jury pertinent and proper instructions as to the legal effect of those terms.
    Ekiiok to the Superior Court of Cincinnati.
    By lease dated November 20, 1869, David Sinton rented for three years, beginning January 1, 1870, to Pearce Tolle & Holton, a four story stone front building on Yine street, Cincinnati, together with a defined portion of the yard in its rear, to be used for the purpose of carrying on the wholesale dry goods business. Stairways led from each floor to the one above it, and a hoisting apparatus composed of a platform raised and lowered by a wire rope passing over shears above and a drum below, and operated by steam, was provided for raising and lowering goods. This building was one of a block of three, and the engine, by which the hoisting apparatus in each was worked, was placed in rear of the basement of the building south of said leased premises. A common shaft ran from the engine room through the three stores, through the walls. An engineer employed by Sinton had charge of the engine and boilers, and oiled such parts of the hoisting apparatus in each building as required it. The hoisting apparatus was operated bjr the person upon it who desired to go up or down ; when he pulled down the platform ascended. The lease provided that the lessees should “pay quarter yearly during said term the cost of steam heating and hoisting for said .premises, which shall be one-tliird of the expense for running engine for steam hoisting for the three buildings known as the Sinton Block of which this is one, and keeping the same and the machinery and boilers therewith connected in good order and repair; and one-third of the cost of steam heating for said block; and the total cost of keeping in good order all the parts of said hoistiug and heating apparatus contained in the said premises hereby'’ leased, and all charges for water and gas for same as they may become due and payable.” In the next paragraph of the lease the lessees covenanted '■'■that they and their assigns will with care and diligence keep the same ” (premises) “ in good order and condition during said term, and at the termination thereof will quit and surrender the same to the said Sinton or assigns in like good order and condition, careful wear and fire only excepted

    And Sinton covenanted that the “ lessees shall have peaceable possession and quiet enjoyment of the premises hereby demised during the term of three years herein above specified.” By writing of October 28, 1872, the lease was extended for a fourth .year, and by writing on September 17, 1873, it was again extended for three years from January 1, 1874, Sinton agreeing to “at his own cost keep the elevator ip said property in repair, providing the lessees hereto use proper and judicious care in the use of the same.”
    In using the elevator it wa¡^ necessary for some person to go upon it with the goods from floor to floor. In the afternoon of August 11, 1874, W. N. Moore, a salesman of the lessees, was upon the elevator with a truck and goods to be hoisted. As he was about to start upwards the plaintiff, Thomas Butler, and a Mr. Druden, employés of the lessees, stepped upon the platform for the sole purpose of being taken to a floor above. As the platform was ascending the wire rope parted, and they all fell to the basement. The plaintiff was seriously injured infoot, ankle,leg, &c.; was sick for, months; lost wages, incurred expense, suffered pain, &c., &c. He sued Sinton, alleging the covenants of the lease and its extension, that he was clerk to lessees, “ that it became and was necessary in the transaction of his business as salesman to pass from one floor of said building to the other, and that the passage was usually accomplished by the use of the elevator and hoisting apparatus erected'and used in said building and operated and controlled by said defendant, that being the most common, and the usual and customary means used in passing from one floor to another in said building.” He also charged the defendant with negligence and carelessness in building and constructing said hoisting apparatus and in operating the same; “that it became and was out of repair and wholly unfit for the use for which they were constructed and used ; that the defendant well knowing the premises permitted it to become so much out of repair and in siich bad order and condition-that it broke and gave waju without fault or neglect on plaintiff’s part ” and injured him as aforesaid.
    The defendant by answer as a first defense denied that the “boilers, engine and hoisting apparatus were in the possession of, and under the control of and operated and conducted by the defendant when the accident occurred set out the lease and its extensions, denied, any other contract; admitted that plaintiff was in lessees’ employment and that he used the elevator as their clerk and salesman. The second defense denied all carelessness and negligence, denied that the apparatus was out of repair, denied knowledge, &c., making direct issues with all averments in the petition as to those matters. The answer was silent as to the statements in the petition touching the usual and customary use of the elevator, and the allegation that plaintiff was without fault or neglect was not denied.
    At the trial the plaintiff offered evidence tending to prove that the sheaves over which the wire rope passed were so small that the wires were liable to break, thereby weakening the rope; that it needed repairs; that the springs, for holding the platform in case the rope should break, were defective and insufficient; that Sinton knew, when he originally ordered it, that it was not so good an elevator as one of another plan then in use in Cincinnati, and that his engineer had opportunities for knowing that the rope was too weak for use.
    Sinton offered evidence tending to prove that the elevator was good of its kind; that it was of a kind generally used; that he did not know that it was not so good as another one then in use in Cincinnati for such purposes; that the sheaves were of a proper size, and the rope in good condition, and that neither he, nor the engineer, had knowledge or notice that it was out of or needed repair. .There was no controversy but that it had been used from January, 1870, until August 11, 1874, without accident; that the rope had been repaired at least twice, being once turned end for end, and that it did not break at either of the places at which it had been repaired.
    Evidence was conflicting as to the cause of the break.
    So much of the charge to the jury as did not relate to the conduct of the plaintiff below was as follows:
    “ Mr. Sinton had leased to Tolle, Holton & Co. the store on Vine street, and also leased to them, for receiving and discharging merchandise, the use of so much of the yard as was in rear of store, and by the terms of the lease, as extended, the lessees were to pay quarter yearly the cost of steam heating and hoisting for said premises, being one-third of the expense of running the engine for steam hoisting for three buildings known as the Sinton block, and keeping the same and the boilers therewith connected in good order and repair, — Mr. Sinton, at his own cost, to keep the elevator in property so leased in repair, providing the lessees used proper and judicious care in the use of the same.
    “The lease does not fix and determine the manner of running the hoisting apparatus and machinery, the situation of boiler and engine, or the mode of employment of the engineer. Testimony was offered as to these matters.
    “ If, upon the testimony in connection with the stipulations of the lease, it appears that Mr. Sinton, for the convenience of the lessees, and on their behalf acting for them, hired the person who ran the apparatus, and advanced the cost of running it, and so ascertained for the lessees what amount each was to pay; then, as it also appears in evidence that Mr. Sinton was not notified of any defect, he is not liable to the plaintiff for damage resulting from defects in the elevator, notwithstanding his agreement to keep the elevator in repair at his own cost.
    “If, on the other hand, it appears that Mr. Sinton had the control, direction and management of the machinery, so that in connection with his agreement to keep the elevator in repair, he did not merely lease an elevator, but he undertook to supply transportation or carriage, then he is liable for damage happening to the plaintiff by reason of mismanagement on the part of Mr. Sin ton’s employ é in charge of the steam hoisting apparatus, or by reason of any defect in said apparatus known, or that ought to have been known to such employé.”
    Sinton excepted to the paragraph beginning “ If, on the other hand,” and asked the court to give to the jury each of the following instructions:

      First. We ask the court to charge the jury that if the plaintiff was in the employ of Tolle, Holton & Co. at the time of the injury, and had been ever since the building in question was erected in 1869, and that said firm had had the entire and exclusive use and occupancy of the building in question, and of the elevator, during all that time, the defendant having no right to use or occupy any of it in any way, then the plaintiff cannot recover in this action.

      Fourth. That the fact that there were boilers and an engine in an adjoining store, which created the power to run the elevator in question and heat for the store in question, and two other stores just like it; and that the defendant hired the engineer and paid for the running of it and the fuel, upon the agreement contained in the lease that the said Tolle, Holton & Co. should pay for all such services, this did not give the use of any portion of the building or elevator in question to the defendant or deprive said Tolle, Holton & Co. of the exclusive occupancy of it.

      Fifth. If the elevator was one which had daily run securely for four or five years in the store, and the plaintiff and all others had full opportunity of seeing it and knowing how it worked, and was an elevator in common use with others at the time, and the defendant knew of no defect in it but believed it to be safe and secure, the defendant could not be made liable in this action simply because the jury may think there was a better or more secure elevator that might have been put into the store when put up.
    Each and all of which charges the court refused to give, and Sinton duly excepted to said refusals.
    The verdict was against Sinton. His motion for a new trial was overruled — a bill of exceptions containing all the testimony, the charge — the rulings on evidence and- the exceptions were duly made part of the record. The superior court in general term affirmed the judgment, and Sin-ton asks this court to reverse the judgments below.
    Lincoln, Smith Stephens and J. F. Baldwin, for plaintiff in error.
    The plaintiff in error was not in possession, nor did he have control or management of the elevator at the time of the accident. Burdick v. Cheadle, 26 Ohio St., 396; Rich v. Basterfield, 4 Mun. Gran. & S., 802, 803; Barrett v. Singer Mfg. Co., 1 Sweeney, 547.
    No one can take advantage of a .covenant, but the parties 'and privies. BlaeJcmore v. B. B. Railway Co., 8 Ellis & B. , 1047; Winterbottom v. Wright, 10 Mees. & Weis., 114, 115; Barrett v. Singer Mfg. Co., 1 Sweeney, 547, 548; Robbins v. Mount, 4 Robertson, 564; Flynn v. Hatton, 43 How. Pr. R., 348, 357. '
    Notice must have been brought home to Sinton of the insecure condition of the elevator. Makin v. Watkinson, 6 L. R. Ex., 25.

      Paxton Warrington and C. B. Matthews, for defendant in error.
    The case in bar differs from the case in the 26th Ohio St., in this, that said Sinton was furnishing transportation to the lessee and their employes and was, to the extent necessary to carry out his portion of the contract,in possession.
    See Sherman & Redfield on Negligence, sec. 502; Taylor v. New York, 4 E. D. Smith, 559; Canavan v. Conkling, 1 Daly, 509 ; Looney v. McLean, 129 Mass., 33; Reedman v. Comvay, 126 Mass., 374; Stratton v. Staples, 59 Maine, 94; Clapp v. Kemp, 122 Mass., 481; King v. Pedley, 1 Adolphus & Ellis, 122, per Taunton, Justice; Campbell v. Portland Sugar Company, 62 Maine, 552.

      Stewart v. Harvard College, 12 Allen, 58; McCutrick v. Wasson, 4 Ohio St., 566; 125 Mass., 487; 56 N. Y., 124; Devlin v. Smith, 89 N. Y.,, 470; Wharton on Neg., § 137, et seq.; Id., §§ 445-9, 547; 1 Hilton, 436; 15 Wend., 522; 2 Comstock, 185; Pippin v. Shepperd, 11 Price, 400; Marshall v. Railroad Co., 11 C. B., 65; 16 Ad. & E. (N. S.), 984; 2 Dowling & Ry., 33; Perry v. Smith, Law Reps., 4 C. P. D., 325; Collis v. Selden, Law Reps., 3 C. P., 495. Dalgell y. Tyrer, Ellis, Blackburn & E., 898; 8 111. App., 217 ; 45 111., 444.
    Sinton was 'certainly bound by anything that he or his servant, the engineer, either knew or ought to have known. See Malone v. Hathaway, 6 Thomp. & Cook, 1; Waldon v. Finch, TO Penn. State, 460; Ryan v. Fowler, 24th N. Y., 410, see foot of page 413; Gray v. Boston Light Company, 114 Mass., 149 ; Losee v. Buchanan, 51 N. Y., 476; Cochran v. Holhroolc, 59 N. Y.,-547.

      Matthews, Ramsey Sp Matthews, also for defendant in error.
   Granger, C. J.

Numerous errors are assigned, but notice will be taken only of the instructions to the jury given and refused.

The lease with its extensions was before the jury containing important provisions bearing upon the question, “ Was Sinton in control of the elevator when it fell ? ” but the court said no word to the jury as to the meaning of any elause. By express terms the lessees were guaranteed possession of the demised premises during the term, and were burdened with the duty of “ with care and diligence ” keeping the same in good order and condition during the term from January, 1870, until January 1,1874, when Sin-ton agreed to keep the elevator in repair, “ providing the lessees hereto use proper and judicious care in the use of the same.”

It seems plain that down to January 1, 1874, Sinton had no right to enter the premises against the will of the lessees. Upon them rested the duty of taking care that the entire premises should be kept in good order. To that express covenant the preceding stipulation that they would pay quarter yearly the total cost of keeping in good order “ all the parts of said hoisting apparatus contained in the said premises hereby leased” must yield. The one by plain words placed the responsibility for all care and diligence necessary to keep the entire premises in good order on the lessees. The other by implication only, tended to put upon Sinton responsibility for the elevator. In order to fulfil the promise to with care and diligence keep the premises in good order and condition,” the lessees were bound to malee all repairs except those required by the elevator, and to duly notify Sinton whenever the elevator required repairs. It was the duty of the court to construe the written contract for the jury. Until they knew what it meant, standing alone, they could not properly apply the evidence as to the conduct of the parties. Prior to 1874, the true meaning of the lease was a renting to the lessees of a building, including an elevator, and also the services of an engineer selected and paid by Sinton. The lessees had entire possession, with the entire duty of using care and diligence to keep the entire leased premises in good order. If repairs were needed by the elevator it was for them to notify Sinton, and his duty to then advance the money to pay for them ’ as made — the lessees reimbursing him at the end of the quarter. This construction gives effect to both clauses in the lease, and is reasonable in itself. The wire rope, the part of the apparatus most liable to get out of order, was before the eyes and in the hands of the lessees and their employés every day; the lessees were to pay for the repairs; they and their emploj'és were most directly interested in its being maintained in good order, and had the best means of learning when repairs were needed. Any suspension of the use, for repairs, affected their business. Neither Sinton, nor the engineer, could suspend that use without the lessees’ consent. Sinton was distant; the engineer’s usual post was in another building.

The testimony touching the course of dealing of the parties prior to 1874, accords with this construction. While Sinton employed the engineer, he referred him to the tenants as the persons for whom he was employed. To them the engineer sent persons having bills for repairs, and to them he applied for an increase in his •wages. Sinton did not examine, either in person or by agent, as to the need of repairs for the machinery. The tenants notified him when they were needed; then he caused them to be made and paid for them, — they refunding. During the first four years of the lease there is no proof of any conduct of the parties indicating that Sinton was to make any repairs to the elevator except when notified by the tenants.

Did his agreement to “ at his own cost keep the elevator in repair, providing the lessees were to use proper and judicious care in the use of the same,” place him in control of the elevator after January 1, 1874? Standing alone the words may imply soniewhat in that direction. But the express words giving to the lessees possession of the whole-premises remained unaltered. Give full effect to them, and the new stipulation bound Sinton to make such necessary repairs to the elevator as the tenants should call for at Ids own cost. The testimony showed no change in the course of dealing after January 1, 1874, except that Sinton did not, at the end of the quarter, collect from the' lessees the expense incurred about the elevator.

The omission by the court of a construction of the lease and its extension, was calculated to mislead the jury. In effect it told them that the terms of the lease and its extension could not materially aid them in making a verdict.

The first instruction asked for by Sinton should have been given. It was germane to the true construction of the lease as extended and the conduct of the parties.

The fourth instruction asked for was proper as a part of a construction of the contracts.

The fifth instruction asked for was pointed at certain evidence put in by the plaintiff, of a character likely to mislead the jury, and was proper in itself. Although it contained a few words bearing more strongly against Sin-ton than the law required; with his express consent the court could rightfully include them.

The evidence set out in the bill of exceptions seems to us clearly insufficient to prove that “ Sinton had the control, direction and management of the machinery, so that in con-. nection with his agreement to keep the elevator in repair, he did not merely lease an elevator, but he undertook to supply transportation 'or carriage.” On the contrary, we think it showed, that, in addition to renting the premises, Sinton undertook to furnish to the lessees an engineer, to advance tlie moneys required to pay for operating and running the machinery, and to make such repairs thereof- as the tenants should call for; they agreeing to use diligence and care in seeing that all proper repairs should be made or called for; and that Sinton made all repairs called for by the tenants.

The claim of the plaintiff that Sinton was at fault in originally placing that elevator in the building, must yield to the uncontested facts that it was of a plan somewhat generally in use, and that itself was in constant use for well nigh five years without accident. It follows, then, that as Sinton was not in fault in originally placing the elevator in the building; as he made all repairs called for, and was not bound to do more, and as he was not in possession or control of, or managing the elevator, when it fell, the case does not call for comment upon the numerous authorities cited by counsel.

Judgments reversed.


author: DlCKMAN, J.

text:
    Pierce v. Tiersch.
    1. In an action by mortgagee against mortgagor upon a note and mortgage given for the purchase money of the premises, the mortgagor may, as a defense, setup a counter-claim for damages by reason of the fraud of the mortgagee, in concealing from him material facts as to the situation and extent of the premises.
    2. In such an action, it is error in the court to instruct the jury, that while the mortgagor was in undisturbed possession of the premises, he.was not entitled to recover of the mortgagee on account of such fraudulent concealment, any thing more than nominal damages.
    Error to the District Court of Hardin County.
    The original action was begun in the court of common pleas by Mary Tiersch against Wesley Pierce, upon a note and mortgage given for the deferred -payment of purchase money fo;' the mortgaged premises. Pierce, for answer and by way of counter-claim to the petition of the plaintiff, alleged, that at the date of said note and mortgage, he pur chased from the plaintiff the premises described in said mortgage, to wit: “In lot No. 44 in the village of North Washington,” Hardin county, Ohio, for the sum of $900, — ■ four hundred cash, and the residue in one and two years thereafter, all which had been paid except the sum claimed by the plaintiff in her petition; that said lot fronts on the west on Main street, and on the south on Washington street; that there was at the time of said purchase a frame dwelling house one and one-half stories high, with a porch or veranda six feet in width, on the west end thereof, extending the full width of said house, which house then appeared to be located on the south-west corner of said lot, and was so represented by the plaintiff, and so understood by the defendant, whereas, in truth and in fact, the said house and veranda, or porch, extended six feet into and upon said Main street; that said lot was at the time of said purchase fenced in on the west side with a picket fence, which appeared to be on the line of said lot, whereas, in truth and in fact, the said picket fence inclosing said lot on the west, was set out six feet into and upon said Main street, thus including within the apparent limits of said lot a strip of land six feet in width along the west end of said lot, which was no part of said lot, but was and is a part of said Main street, and to which the plaintiff had no title whatever — said lot being 66 ft. front on said Main street, and 132 ft. back — all of which was well known to the plaintiff at the time of said sale, and the execution and deliver of said note and mortgage; that at and before the date of said purchase, the defendant was wholly unacquainted in said village of North Washington; that he did not know nor did he have the means of knowing the size or boundaries of said lot, except from the representations of the plaintiff and outside appearances; that the plaintiff fraudulently concealed from him, the defendant, the fact that said porch, or veranda, and said west fence were located and built outside of tbe true bounds of said lot, and on the public street; that he liad sustained damages by reason of -the said false and fraudulent representations and concealments of the plaintiff, to the amount of three hundred dollars; and asked that said sum be allowed to him by way of counterclaim ; and that he might have judgment for any balance that might be found due to him on final hearing.
    The plaintiff for reply, not knowing whether said porch or veranda, and picket fence extended into Main street or not, denied the same. She denied that at the time of said sale, she represented to the defendant that said house and porch, or veranda, were located on the south-west corner of said lot; that she fraudulently concealed from the defendant the fact that said porch, or veranda, and said west fence of said lot were located outside of the true bounds of said lot, and on the’ public street. She denied all fraud, and each and every allegation of fraud, in the answer contained ; and averred, that she sold and described said lot to the defendant simply by the number thereof as designated, on the plat of said village, and did not at any time point out or attempt to point out to the defendant the lines and boundaries thereof.
    The defendant gave in evidence to the jury testimony tending to prove the facts alleged in his answer; and the plaintiff gave in evidence to the jury, testimony tending to prove that the defendant was still in possession and occupation of said strip of land which was enclosed with said lot, and also testimony tending to disprove the testimony given as aforesaid by the defendant.
    The court charged the jury among other things,
    “ That if they should find that there was a strip of ground six feet wide lying along the west side of said lot, and inclosed therewith, which did not belong to said lot, nor constitute a part thereof, but belonged to the public street, and that the plaintiff knew that fact but fraudulently concealed the same from the defendant; yet, if they should find that the defendant was still in undisturbed possession and occupation of said strip of ground, the defendant was then not entitled to recover of the plaintiff, on account of such concealment, any thing more than nominal damages.”

      To this portion of the charge the defendant excepted. The jury returned a verdict for the plaintiff. A motion for a new trial was made by the defendant, for the reasons,
    1st. That the verdict was against and contrary to the weight of evidence and law of the case.
    2d. That the court erred in charging the jury, that if the evidence satisfied them that the defendant was still in possession of the six feet of ground as to which the defendant claimed to recoup for damages, then the defendant could not recover.
    The motion for a new trial was overruled, and judgment rendered on the verdict. A bill of exceptions was taken by the defendant. The district court affirmed the judgment of the court of common pleas; and the supreme court is asked to reverse the judgment of the district court.

      Jj. M. Strong, for plaintiff in error. •

      James Watt and John Stillings, for defendant in error.
   DlCKMAN, J.

It was not contended in the court below by Wesley Pierce, the mortgagor, that there had been any breach of the covenants of warranty or for quiet enjoyment contained in the deed from Mary Tiersch, the mortgagee and vendor; and the question did not arise, whether there had been an ouster or eviction, actual or constructive, by paramount title. The mortgagor laid no claim to damages, or to relief against the security which he had given for the purchase money, on account of any breach of any of the covenants of title. He was in the full possession and occupation of '“In lot No. 44,” to the extent of that description, and as designated on the plat of the village of North Washington.

But the mortgagor complained, that with no means of knowledge save the representations of the mortgagee and outside appearances, he was deceived and defrauded as to the size and boundaries of the lot described, through the fraudulent representations and concealments of the mortgagee, as to material facts; and that he was by the mortgagee led to believe, that the strip of land six feet in width on the west of the lot and embraced within the fence, was part and parcel of the premises conveyed, whereas in fact it was part of Main street. If it be true that fraud was practised by the mortgagee in her sale of the premises to the mortgagor, he was entitled to the benefit of a counter-claim for damages sustained. (Allen v. Shackelton, 15 Ohio St., 145.) And furthermore, in an action against the mortgagor for the purchase money, his right to set up a counter-claim for any excess in price through the vendor’s misrepresentations of the extent of the property, would be the same, whether such misrepresentations were willful or innocent. Baughman v. Gould, 45 Mich., 481. The question arises however, what was the measure of damages of the mortgagor, under his counterclaim ? The court below charged the jury, that if they should find there was a strip of ground six feet wide, extending along the west side of said lot and inclosed therewith, which did not belong to the lot but to the public street, and the plaintiff knew that fact, but fraudulently concealed the same from the defendant; yet, if they should further find that the defendant was still in the undisturbed possession and occupation of said strip, he was not entitled to recover of the plaintiff on account of such concealment, any thing more than nominal damages. We are of opinion that the court erred in this instruction. The mortgagor’s right to recover other than nominal damages, did not depend upon whether he had been disturbed in the possession of the strip of ground, at the time of setting up his counter-claim. If there had been fraudulent representations and concealments on the part of the vendor, by -which the mortgagor was defrauded as to the territorial extent of the premises, a right of action for the fraud accrued to him on discovery of the same. The vendor in such case was not in a situation to ask, that the vendee and mortgagor should wait until perhaps his right of action would be lost by lapse of time. Such vendor should not be more favorably regarded than a grantor with covenant of seisin — a covenant which is deemed to be broken instantly, if at the time of executing the deed, the grantor or some person claiming under him, was not in actual possession of the premises, claiming title.

The mortgagor should not have been restricted to nominal damages, if fraud was practised upon him, as alleged, in the sale of the premises. The measure of his damages was the difference, at the time of purchase, between the value of the lot with its apparent bounds on the west, — inclosing the strip of ground belonging to the public street and liable to be taken.for public use — and the value of the same lot, had said apparent bounds been its true west line, and said strip of ground part and parcel of the lot.

The judgment of the district court and of the court of common pleas must be reversed, and the cause remanded to the common pleas for a new trial.

Judgment accordingly.


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    Railroad Company v. Scudder.
    It was the duty of the railroad company, under the act of April 18, 1ST4 (11 Ohio L., 85), and under a contract with S., to keep the fences enclosing its railroad, running through the lands of S., in repair, so that they would turn stock. The fence was out of repair and the railroad company had reasonable opportunity to know of these defects. They were also known to S. With this knowledge S. continued to pasture his hogs in the adjoining field, from which some of them escaped by means of the defects and went upon the track of the railroad company and were there killed by passing trains, without negligence upon the . part of the company in the running of its locomotives and cars — Held: That S. was not guilty of contributory negligence.
    Error to the District Court of Butler County.
    In 1876 the railroad of The Cleveland, Columbus, Cincinnati and Indianapolis Railroad Company, the plaintiff in error, ran through the lands of Eli Scudder. In a woods pasture and stubble field adjoining the railroad track Scudder pastured his hogs. Between this field and the railroad track the railroad company bad erected a post and board fence, which fence was but four boards high. The «spaces between the second and third boards from the bottom were too large. Large gullies had been washed under said fence after it was built and into said roadway by rain falling upon Scudder’s farm and running upon the railroad track. On account of these and other defects hogs could escape from the field and go directly upon the railroad track. The railroad companj’- had ample opportunity to know of these defects, and they were also known to Scudder. Upon three occasions, June 15, 1876, July 1st, 1876, and September 11th, 1876, hogs belonging to Scudder went from the field, through these defects in the fence, upon the railroad track, and were killed by the railroad company’s locomotives and cars. There was no negligence upon the part of the agents of the company in running the locomotives and cars. There was also uncontradicted evidence tending to show that the railroad company had prior to 1876 contracted with Scudder to keep said fence in good repair so that it would turn Scudder’s stock.
    In the court of common pleas, Scudder sought to and did recover from the railroad company the value of the hogs thus killed. The district court affirmed the judgment of the court of common pleas. This court is asked to reverse the judgment of the district court.

      Thomas Millilcin and PC. H. Poppleton, for plaintiff in error.

      Aaron Weseo, for defendant in error.
   Nash, J.

The defendant in the court of common pleas presented several special charges which it asked the court to give to the jurj1-, which requests were refused. To certain parts of the charge of the court as given the defendant excepted. The principal question raised by these refusals and the exceptions is, “Was Scudder guilty of contributory negligence in pasturing his hogs in this field, belonging to him, when he knew that there were such defects in the fence, separating the field from the railroad, that the hogs could go through them, from the field upon the track of the railroad company? ”

At the time of the injuries complained of bjr Scudder the act of April 18, 1874 (71 Ohio L., 85, sec. 1), was in force, and by it, it was the duty of the railroad company to construct a good and sufficient fence to turn stock between its track and Scudder’s field, and if such a fence had been constructed it was the duty of the company at its own expense to keep said fences up in good repair. The evidence also showed that a contract existed between Scudder and the railroad company by virtue of which the railroad company had agreed to do substantially what was its duty to do under the statute. This contract was made some time prior to the first accident complained of, and the three accidents covered a period of about three months. During all this time the agents and servants of the company were daily going over the road. It had ample opportunity to know of the defects in the fence. ■

We think that Scudder, in using this field for pasturing his hogs, was not guilty of such contributory negligence as would prevent his recovery. The duty to construct and maintain this fence was placed upon the railroad company, not only by contract but also by the statute of April 18, 1874. The principal object had in view by the makers of that law was the protection of the public, and not alone the protection of the land-owner. To hold otherwise than we do would virtually nullify the statute in many cases. It certainly was not the intention of the general assembly that land-owners should abandon the use of their fields for the reason that railroads neglect to perform a duty to the public,enjoined upon them by statute.

In our conclusions we are sustained by the courts of other states. Rogers v. Railroad Co., 1 Allen, 16; Shepard v. B., N. Y. and E. R. R., 35 N. Y., 641; T. W. & W. Ry. Co. v. Cory, 39 Ind., 218; Hammond v. C. & N. W. R. Co., 43 Iowa, 168; Gardner v. Smith, 7 Mich., 410; McCoy v. Cal. P. R. R. Co., 40 Cal., 532; Wilder v. Maine Central R. R. Co., 65 Maine, 332.

Former decisions of this court have been rendered under the act of March 25, 1859 (S. & C., 331), which provided that fences separating a railroad track from adjacent lands should be treated and maintained as partition fences. The act of 1874 provided that such fences should be kept in repair by railroad companies. Therefore the conclusion reached by us is not in conflict with previous determinations.

Since this case was determined by the commission, and since the foregoing opinion was written, the 38th volume of the Ohio State Reports has been published, containing the case of Railway Co. v. Smith, page 410, which is in harmony with our conclusions.

Judgment affirmed.


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    Cleveland, Brown & Co. v. Shoeman.
    1. A national bank that makes a loan on the security of a warehouse receipt for merchandise, is a proper party defendant to a suit in replevin by the consignor and owner of the merchandise against the warehouse keeper to whom the same has been committed by the consignee for storage.
    2. A national bank has power to lend money upon the note or other personal, obligation of the borrower secured by the pledge of a warehouse receipt for merchandise as collateral'security.
    3; A factor holding a warehouse receipt for the delivery of merchandise consigned to him by the owner to sell on commission, in order to obtain a loan from a bank, gave to the bank his negotiable promissory note, and as collateral security therefor (and not to secure any antecedent debt or demand), duly transferred and delivered to the bank the warehouse receipt, and made an agreement with the bank for the disposition of the merchandise.

      Held: That under the act of March 12, 1844 (IS. & 0., 420), if the bank in good faith loaned the money, and took the warehouse receipt, and made said agreement, upon the faith that the factor was the true owner of the merchandise, such transfer and agreement were valid, and the hank was entitled to hold the merchandise as security for the payment of the note.

      Error to the District Court of Cuyahoga County.
    Samuel Shoeman and Samuel Core, the defendants in error, sent one S. F. Lester, a merchant in Cleveland, Ohio, one hundred barrels of flour, of which fifty barrels, branded “Franklin Mills,” are in controversy in this su$. The flour was sent to Lester to be sold on commission, and the proceeds to be sent to the defendants in error. They drew a draft on him, dated May 28, 1874, at 30 days for $600, which, if paid, would have been applied on the flour, but Lester died before it became due, and it was returned unpaid.
    On the 9th. of June, 1874, Lester placed these fifty barrels of flour, with fifty not branded, in the warehouse of Cleveland, Brown & Co., and received from them the following warehouse receipt: •
    “ Cleveland, June 9,1874.
    “ Received in store of S. F. Lester one hundred (100) barrels flour. Fifty (50) barrels branded ‘Franklin,’ and fifty (50) barrels not branded. Said flour deliverable only to Mr. Lester or his order on the surrender of this receipt. Danger of fire excepted. Cleveland, Brown & Co.”
    “ Endorsed. S. F. Lester.”
    On the same day, he obtained from the First National Bank of Cleveland, Ohio, a loan of $600, and executed to the bank his .promissory note for that amount, of which the following is a copy:
    “$600. Cleveland, O., June 9, 1874.
    “ Forty-five days after date I promise to pay the First National Bank of Cleveland, or order, six hundred dollars at First National Bank, for value received, having pledged to the said bank as security (with authority to sell the same on the non-performance of this promise, in such manner as they in their discretion may deem proper, without notice, either at public or private sale, and to apply the proceeds hereon) Cleveland, Brown & Co.’s warehouse receipt-attached for 100 bbls. flour. S. F. Lester.”

      On the 3d of July, 1874, an action of replevin was begun by the defendants in error, in the court of common pleas of Cuyahoga county, by which fifty barrels of said flour that were branded were delivered by the sheriff to the defendants inferior. The bank, on the application of Cleveland, Brown- & Co., was made party defendant.
    There was no conflict of testimony in the case. The cashier of the bank (whose testimony was uncontradicted), testified, that the note was not given for an old debt of Lester’s, or as a renewal of an old note, but that Lester received the money at the time the note was given, and that the money was loaned on the faith of the warehouse receipt and of the flour it represented; that Lester told him he (Lester) owned the flour, and so stated at the time the warehouse receipt was delivered to the bank; that he had no knowledge, notice or intimation from any quarter, nor had the bank, or any of its agents or officers, that any person had any interest in the flour except Lester, and that the loan was made on the faith of the property being owned by Lester.
    Upon the trial in the court of common pleas the plaintiffs asked the court to charge the jury “that a National bank cannot lawfully take personal property as security for a loan of money. A warehouse receipt delivered, delivers' possession of the property, and this transaction was the Caking by the bank of personal property as a security for a loan, and is void,” which request the court refused to charge, and to which refusal the plaintiff excepted. And, thereupon, the plaintiff further requested the court to charge the jury as follows: “If the bank defendant did not know, but by reasonable inquiry could have ascertained that this flour was held by Lester to be sold on commission, but did not make such inquiry, that the plaintiff is entitled to recover,” which request the court refused to charge, except with the following qualifications: “But if the officer or officers of the bank at the time the money was loaned and the warehouse receipt taken as security therefor were informed by Lester that he was the owner of the flour, and the bank relied upon such information and loaned the money on the faith of that security, the bank would not be bound to make further inquiry, as to the ownership of the flour.” To which refusal to charge' as requested, and to the, charge as qualified, and to the qualification as given, the plaintiff excepted. And thereupon the plaintiff requested the court to charge the jury as follows: “If th.e jury find that plaintiffs put the fifty barrels of flour in question into the hands of Lester to sell on commission, as a factor or agent of plaintiff, and the plaintiffs were the owners of said flour at the time of the transfer of the warehouse receipt and property to the defendant bank, said Lester had no rightful authority to transfer said warehouse receipt and said flour to .the defendant bank, as collateral security to secure a loan to' himself, nor had the bank, the defendant, any rightful authority to receive and hold said flour for such purposes, and said transaction respecting said flour is void as .to the plaintiffs, and they are entitled to recover,” which charge the court refused to give, and to which refusal the plaintiff excepted, and the court charged the jury that if the bank in good faith loaned Lester the money,«and took the flour, believing in good faith it was Lester.’s, it was valid, to wffiich the plaintiff excepted.
    The jury returned a verdict against the defendants in error (plaintiffs below) for the value of the flour. The plaintiffs below filed their motion for a new trial which the court overruled, and to which action of the court they excepted, and judgment was entered on the verdict.* The plaintiffs below thereupon filed their petition in error in the district court, and the judgment of the common pleas was reversed. In the district court it was assigned as error, that the court of common pleas erred in making the Eirs.t National Bank of Cleveland, a party defendant to the action, and in ordering the same to be done.
    The petition iii error in this court is to reverse the judgment of the district court, and affirm that of the court of common pleas.
    O. O. Baldwin and L. W. Ford, for plaintiff in error.

      1. The bank was a proper party. Morgan v. Spangler, 10 Ohio St., 102.
    2. A national bank can lend on a warehouse receipt. U. S. Rev. Stats., § 5136; Shoemaker v. Bank, 2 Abbot (U. S.), 416; Ball on National Banks, 50,110,146; Shinkle v. Bank, 22 Ohio St., 51; Emery's Sons v. Bank, 25 Ohio St., 360; Bank v. Kelly, 57 N. Y., 34; Bank v. Daniels, 47 N. Y., 632; Thompson’s Bank Note Cases, 312, 315; 99 U. S-, 633; 83 N. Y., 338; Morse on Banking, 558; 8 Am. Law Record, 604; 1 Fed. L. Rep., 702; 19 Am. L. R., 596.

      L. R. Gritohfield, for defendant in error.
   Dickman, J.

There was no error in making the bank a party defendant to this action in the court below. The bank claimed an interest in the controversy adverse to the plaintiffs. The question involved was the right of the plaintiffs to the possession of the property replevied, and the bank claiming to be the pledgee of the warehouse receipt and the property it represented as collateral security for the payment of Lester’s note, became a necessary party to a' complete determination of the question involved. (Code Sec. 35.)

It is contended by the defendants in error, that under the 7th clause of section 5136, Revised Statutes, U. S., a national bank has no power to loan money upon a note secured by the pledge of a warehouse receipt for merchandise, as collateral security. By the said section, every national banking association is authorized, “to exercise by its board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin and bullion; by loaning money on personal security; and by obtaining, issuing, and circulating notes according to the provisions of this title.”

A warehouse receipt, like a bill of lading, is a symbol of the property designated in it, and stands in the place of the pi-operty it represents. The question therefore arises, whether the bank transcended its power in taking the warehouse receipt as collateral security for the note of Lester. The section of the statute under consideration, contains several distinct and independent grants of power— neither grant being a limitation on any other — and describes the kind of banking in which national banking associations are authorized to engage. To render these grants effective, such associations are authorized to exercise such incidental powers as shall be necessary to carry on the kind of banking permitted. A national bank, therefore, empowered to carry on the business of banking “ by loaning money on personal security,” may also exercise all powers incidental thereto. Vested with such authority, we do not think, that in making a loan on the personal obligation of the borrower with a warehouse receipt as collateral security thereto, the bank exceeds its statutory powers. It is not to be limited, in taking security for discounts and loans, to the personal undertaking of the borrower, or to the security afforded by the names of indorsers or personal sureties, but may take a pledge of bonds, dioses in action, stock of a corporation, bills of lading, and other personal chattels. The language “ personal security ” would seem to refer to other personal security than is mentioned in the first grant of power in section 5136 — authorizing the business of banking “by discounting and negotiating promissory notes, etc.” Dillon, J., in Pittsburgh Car Works v. State National Bank of Keokuk, (Thompson’s National Bank Cases, 315,) says, “ The words ‘loans on personal security ’ in the banking act are used in contra-distinction to real estate security;” and in that case it was held, that a national bank might take personal chattels— e. g. a locomotive, as security for discounts and loans. And while section 5136, if not in terms clearly by implication prohibits a loan on real estate, yet, the supreme court of the United States in National Bank v. Matthews, (8 Otto, 621,)—not narrowing the application of the words “ personal security ” — held, that where • a national bank loaned money, and as collateral security took the assignment of a note secured by a mortgage of lands with a power of sale thereto annexed, the bank was entitled, upon non-payment of the loan at maturity, to enforce the collection of the note by a sale of the lands.

Without commenting upon the numerous authorities which have been brought to our notice, we are of the opinion, that the court below did not err in refusing to charge the juiy, that a national bank could not lawfully take personal property as security for a loan of money; and in taking the warehouse receipt from Lester, as collateral security for the loan made to him, the bank did not transcend its powers.

We find no error in the refusal of the court below to charge the jury as requested, nor in the charge as given, in reference to the care used in making the loan to Lester, and the measure of inquiry as to the ownership of the flour that was required of the bank, before making the loan. Furthermore, we find no error, either in the refusal of the court to give in chai’ge to the jury the last request of the plaintiff contained in the bill of exceptions, or in the charge thereupon given, “that if the bank in good faith loaned Lester the money and took the flour, believing in good faith it was Lester’s, the transaction was valid.”

By the general rule of the common law, an agent or factor, intrusted with the goods of his principal to sell, could not pledge the same so as to authorize the pledgee to hold them for advances made thereon to the factor or agent. (Patterson v. Tash, 2 Strange, 1178; Daubigny v. Duval, 5 T. R., 604.) But, in modification of the common law rule in this respect, statutes have been passed in England and in this country, protecting the rights of the pledgee to the extent of the advances he had made upon the faith of the pledge, and in the belief that the factor was the owner of the goods. By the act of March 12, 1844, sections 3 and 4 (1 S. & C., 421), in force at the commencement of this action, and the same as sections 3216 and 3217 of the Revised Statutes, it was provided:

Section III. “Every factor or agent, intrusted with the possession of any bill of lading, custom-house permit, or warehouse keeper’s .receipt for the delivery of any such merchandise, and every such factor or agent, not having the documentary evidence of title, who shall be intrusted with the possession of any merchandise for the purpose of sale, or as a.security for an}*- advances to be made or obtained thereon, shall be deemed to be the true owner thereof, so far as to give validity to any contract made by such agent with an}r person for the sale or disposition of the rvhole or any part of such merchandise, for any money advanced, or negotiable instrument, or other obligation in writing, given by such other person upon the faith thereof.”

Section IV. “Every person who shall hereafter accept any such merchandise in deposit from any such agent, as security for any antecedent debt or demand, shall not acquire. thereby, or enforce any right, or interest in or to such merchandise or document, other than was possessed or might have been enforced by such agent, at the time of such deposit.”

These provisions of the statute are not to be construed as furnishing protection to those who deal with factors or agents out of the ordinary course of business, with knowledge of their true character, and knowing that their power is restricted by the owner, in reference to the merchandise intrusted to them.' While modifying the general rule of the common law, these enactments rest upon the preservation of good faith and honest dealing, on the part of persons contracting with factors for a pledge of the property held, by them in a fiduciary capacity. Applying these statutory-provisions to the facts in this case, we are led to the conclusion, that where a factor holding a warehouse receipt for the delivery of merchandise consigned to him by the owner to sell on commission, obtains a loan at a bank on his promissory note, and as collateral security therefor (and not to secure any antecedent debt or demand) duly transfers to the bank the warehouse receipt, and makes an agreement with the bank for the disposition of the merchandise, if the bank in good faitb loans the money, and takes the warehouse receipt, and makes such agreement upon the faith that the factor is the true owner of the merchandise, such transfer and agreement will be valid, and the bank will be entitled to hold 'the merchandise as security for the paj’ment of the note.

It is not necessary here to consider what would be the fights of the First National Bank, or how far they would be affected, had it made the loan to Lester solely on the faith of the property pledged. It is evident from the record, that Lester’s note was taken and the money loaned to him not-only on the faith of the thing pledged, but on the faith of liia title to the property. The merchandise was accepted bj’ the bank, not as security for am’ antecedent debt or demand, but for a new and simultaneous loan or advance of money. We are therefore of the opinion, that the bank was entitled to hold the flour represented by the warehouse receipt as security for .the payment of Lester’s note, and that the judgment of the district court must be reversed and that of the court of common pleas affirmed.

Judgment accordingly.


text:
    Stephenson v. Donahue.
    1. A voluntary conveyance to a trustee for the benefit of the grantor's wife and children is not fraudulent against a creditor whose claim • was at the time amply secured by mortgage.
    2. The fact that the mortgage security is subsequently lost by the credit- or’s laches, does not make such a conveyance fraudulent.
    Error to the District Court of Hamilton County.
    In 1837, Eden B. Reeder gave his note for $1,100 to Charles Fox, amply secured by mortgage upon real estate. Afterwards Fox assigned the note and mortgage to William Stephenson, who in 1842 obtained, a decree of foreclosure and an order of sale. This order was issued in-1842, but was returned with the endorsement “stayed by order of plaintiff.” No other order of sale was issued until 1869. In the meantime the mortgagor had until 1848 remained in open and notorious possession of the mortgaged premises. In 1848 Reeder sold the mortgaged property at public auction to innocent purchasers who were without actual notice of the pending suit. Such purchasers, and those holding under them, had been in actual possession more than twenty years, when the order of sale was issued in 1869. The mortgagee was restrained by the courts from making a sale of the premises under the- order and lost his security.
    July 20, 1844, Griffin Taylor gave to Eden B. Reeder a perpetual lease upon a parcel of land, with an annual rental of |200. Four days later this lease was transferred by Reeder to a trustee for the benefit of his wife and daughters. The lease was recorded in 1850, but the transfer was not recorded until July 27, 1852. In 1850, Reeder gave a mortgage to secure 110,000, upon this leasehold estate.
    In 1872, Stephenson having lost his mortgage security obtained a personal judgment against Reeder for the amount of his note with interest. Upon this an execution was issued and returned “No goods and chattels, lands or tenements found.” In the present action Stephenson’s executors seek to subject the leasehold estate conveyed to Reeder in 1844, and by him conveyed to a trustee for the benefit of his wife and daughters, to the payment of the judgment rendered in 1872.

      Fox if Bird and Geo. B. Ohey, for plaintiff in error.

      Mallon cf Coffey, J. J. Glidden and F. B. Donohue, for defendant in error.
   Nash, J.

In July, 1844. and at the time Reeder made the conveyance, now sought to be set aside as fraudulent, Stephenson’s claim against Reeder was fully secured by mortgage. Stephenson, by his laches, extending over a period of many years, lost this security. Fox v. Reeder, 28 Ohio St., 181. There could have been no intent and no attempt upon Reeder’s part to defraud Stephenson, in reference to a claim already secured, by the conveyance in 1844, of the leasehold estate to a trustee for the benefit of Reeder’s wife and daughters. The convejmnce cannot be set aside as fraudulent as against Stephenson, no other creditor complaining.

Judgment affirmed.