author: Spear, C. J.

text:
    Wasson et al. v. Commissioners.

      Constitutional law — Taxation—General and local laws — Ohio Agricultural Experiment Station — Act of April 28,1891, providing for, unconstitutional.

    1, A law which provides for the location and construction of an institution to be controlled wholly by a board appointed by the Governor, and for the furnishing of information to the people of the state at large, as to the work of such institution, exclusively by the board and state officers at the expense of the state, is a law of a general, and not a local, character, notwithstanding incidental benefits may accrue to property near such institution, by reason of its location, and money raised by taxation for the purchase of a site and the construction of buildings, is general revenue for the state.
    2, Under Section 2, of article 12, of the constitution, which provides that “laws shall be passed, taxing b3' a uniform rule, all moneys, credits, * * * and also all real and personal property, according to its true value in money,” all taxes for general revenue for the state must be levied by a uniform rule upon all the taxable property within the state.
    3, The act of April 23,1891, which attempts to authorize any county of the state to raise money to secure the location therein of the Ohio Agricultural Experiment Station, by a tax upon all taxable property within such county, is in contravention of section 2, of article 12, of the constitution, and is therefore void.
    (Decided Nov. 1, 1892.)

      ÜKR.OR. to the Circuit Court of Wayne county.
    On the 23d of April, 1891, the legislature of Ohio passed an act, of which the following is a copy:
    “AN Act
    To authorize the several counties of the state to raise money to secure the location of the Ohio Agricultural Bx-periment Station, and to provide for such location:
    “ Section 1. Be it enacted by the General Assembly of the State of Ohio, that the commissioners of any county in this state desiring to secure the location of the Ohio Agricultural Rxperiment Station by making donations therefor, are hereby authorized and empowered to raise money for such donation by tax on all taxable property in such county, as listed on the county duplicate for taxation, the amount of which proposed donation shall be fixed by said commissioners.
    “ Section 2. That such tax shall not exceed one mill on the dollar of the taxable property of the county in any one year, nor shall the aggregate of all levies for such purposes exceed ten (10) mills on the dollar.
    “ Section 3. No such tax shall be levied or donation made until the question as to the amount to be donated has first been submited by the county commissioners to the qualified voters of such county at some special election, a notice of which (specifying the amount to be donated) has been given at least thirty days previous to said election, in one of more newspapers published and in general circulation in the county; which election shall be held at the usual places of holding elections, and conducted in all respects, as far as may be, as other elections, except that the returns shall be made to the county commissioners, at the auditor’s office; and those voting at such election . in favor of said tax, shall have written or printed on their ballots the words “Experiment Station Tax — Yes,” and those voting against the same, the words “ Experiment Station Tax — No.” And said commissioners shall meet at said auditor’s office on the fourth day next after the said election, and canvass the the votes ; and if it appear that said tax is approved by a majority of the qualified electors voting at such election, then it is hereby made the duty of the county commissioners of said county, to levy a special tax on all the taxable property of said county, to raise the sum donated by said vote, in accordance with section two of this act; and the money arising therefrom, when collected, shall be applied to no other purposes but the payment of bonds and interest as hereinafter provided for; and said special tax shall be eptered upon the county duplicate, and be collected in like manner as other taxes are collected.
    “Section 4. That to anticipate the collection of the tax authorized by this act, and the use of the money to be’ raised thereby, the county commissioners, on acceptance of the donation herein contemplated, are hereby authorized and required to issue and negotiate the bonds of such county, in sums'of not less than $500 each (payable within ten years) at such times and bearing interest at a rate not exceeding six per cent., payable semi-annually, as the commissioners shall determine, which bonds shall not be sold or donated at less than their par value; and the proceeds thereof shall, on their receipt, be paid by said commissioners to the treasurer of state to the amount oí said donation.
    “Section 5. Such funds as may be paid into the state treasury under this act shall be held subject to the duly authenticated requisitions of the board of control of said station, such requisitions to be accompanied with vouchers showing the purpose for which the requisitions are drawn.
    “Section 6. The board of control of said agricultural experiment station shall accept such donation as may in their judgment be most advantageous to the station, and it shall then be their duty to select within the borders of the county, the donation of which is accepted, suitable lands for the use of said station, said lands to be as convenient of access from all parts of said county as may be practicable, and also to be accessible by railroad from all parts of the state; Provided, that any member of the board of control who shall accept or receive, directly or indirectly, any money or property on condition of using his influence in favor of locating said experiment station at any particular place, stall be beld to be guilty of a misdemeanor, and on conviction thereof in any court of competent jurisdiction, shall be fined not less than one thousand nor more than ten thousand dollars.
    “Section 7. The board of control shall have power to receive and hold in trust ’for the use and benefit of the experiment station any grant or devise of land, and any donation or bequest of money or personal property, to be applied to the general or .special use of the station, as may be directed by the donor.
    “Section 8. The title for all lands for the use’of said experiment station shall be made in fee simple to the state of Ohio with covenants of seizin and warranty, and no title shall be taken to the state for purposes aforesaid until the attorney-general shall be satisfied that the same is ffee from all'defects and incumbrances.
    “Section 9. The attorney-general of the state shall be the legal advisor of said board of control, and he shall institute and prosecute all suits in behalf of the same, and shall receive the same compensation therefor as he is entitled to by law for suits brought in behalf of the asylums of the state.
    “Section 10. This act shall take effect and be in force from and after its passage.” 88 Ohio Raws, 853.
    Under this statute the commissioners of Wayne county determined to enter into competition for the purpose of securing the location of the experiment station in Wayne county. For that purpose they fixed the sum of $85,000 as the amount which Wayne county was willing to donate in the event of its selection by the board of control as the proper place for the location of the station.
    This proposition was afterwards submitted to the voters of Wayne county at a special election held for that purpose, at which election a majority of the electors of the county who participated, voted in favor of the donation. The commissioners of the county thereupon prepared bonds to the face value of $85,000, and proceeded to advertise them for sale; this sale was to take place on the 17th day of December 1891. Before the time of sale the petition in this case was filed, and the defendants duly served with process and notice given at the sale, that the purchaser of the bonds would take them subject to the claim of the plaintiffs, that the same were unconstitutional and void.
    The petition filed in the case avers in substance the above facts, that the bonds were about to be sold to infio-cent purchasers; that a tax had been levied for the year 1892 of five-tenths of one mill on each and every dollar of the property in said county of Wayne for the purpose of paying the principal and interest on said bonds.
    The petition further states, said taxation will be illegal and unconstitutional, because said taxation will not be for public uses and purposes, for which .alone moneys can be raised by taxation; and therefore said act is in contravention of the constitution of the state, which authorizes taxation only for public purposes.
    It is further averred said act is unconstitutional because in contravention of section 19 of the bill of rights of the constitution of Ohio; that if the purposes of said act were in any sense public, the same are for the benefit of all the inhabitants of the state, and not in any sense for the special and particular benefit of the tax-payers of the county of Wayne, who, under such statute, will be compelled to bear the expense of providing a site, location, buildings and improvements for said experiment station. That said institution will be controlled, operated and owned by the state of Ohio, and in which said county of Wayne would have no ownership, control or exclusive right of interest.
    Plaintiffs also aver that said legislation and attempted taxation is in contravention of article 12, section 2, of the constitution of the state of Ohio, and this legislation and attempted taxation is in contravention of article 10, section 7, of the constitution of the state of Ohio.
    The petition further sets forth the qualifications of the plaintiffs to bring the action; that many of them did not consent to the issuing of said bonds nor the levying of said tax, but voted against the proposition so .to do, and that those of the plaintiffs who voted favorably thereto, were misled and deceived as to said legislation, the purpose and nature thereof. The plaintiffs prayed for a temporary and perpetual injunction enjoining the defendants from making, issuing, selling or delivering the bonds of said county, and from doing any act, matter or thing to carry out the provisions of said illegal act, and from levying or certifying any tax for said purpose.
    Afterwards an amendment was-filed to the petition, making the treasurer of the county, in his official capacity, a party defendant, and asking to enjoin the collection of the tax already levied under said act. To this petition and amendment, the defendants other than the treasurer filed a general demurrer. On the hearing of this demurrer in the court of common pleas, a judgment was rendered sustaining the demurrer and dismissing the petition. This judgment was affirmed in the circuit court. This proceeding is prosecuted to reverse the judgments of both courts.

      William A. Lynch, Day, Lynch & Day, and A. H. Walkey, for plaintiffs in error.
    We maintain that this act is in direct contravention of •article 12, section 2, of the constitution, providing that laws shall be passed taxing by uniform rule, all monies, credits, etc. This section has been frequently before the Supreme Court of the state 'of Ohio, and notably in the leading case in the 3d Ohio St., page 1, Exchange Bank of Columbus v. Hines. Cooley on Constitutional Rimitations, 5th edition, page 494; 5 Ohio St., 243,589; 36 Ohio St., 476.
    We claim furthermore that this law under consideration is beyond the powers conferred, and the limitations expressed and implied, in article 10, section 7, of the Constitution. State ex rel. Crawford v. McGregor, 44 Ohio St., 631; Potter’s Dwaris on the Construction of Statutes, page 272 ; Sedgewick on Statutory and Constitutional Raw, page 423; Session v. Crunkleton, 20 Ohio St., 357; Washington Avenue, 69 Pa. St., 352; 2d Bouvier’s Raw Dictionary, 348; 1 Dillon on Municipal Corporations, 141; Railroad' Company v. Commissioners, 1 Ohio St., 84; Cass v. Dillon, 2 Ohio St., 646; State v. Hipp, 38 Ohio St., 199.

      That we are -correct in our construction of article 10, section 7, we further refer the court to 2d Debates Ohio Convention, framing the Constitution, pages 565, 644, 747, 748, 755, 794, 805, 838, 838, 862 and 870; Cooley’s Constitutional I,imitations, .5 Edition, bracket page 494, and note 1; Sedgewick on Constitutional and Statutory Daw, 414; Cooley on Taxation, 2d Edition, 144.
    The case much relied upon by defendants in error, is that of Merrick v. Amherst, 12 Allen, 500, in which the Supreme Court of Massachusetts held an act to be constitutional authorizing the town of Amherst to aid the Massachusetts Agricultural College, in consideration of the location of the college in that town. The Massachusetts constitution provides that, taxes shall be “reasonable and proportionate.” The Massachusetts constitution does not require taxes to be levied by uniform rule, but permits apportionment according to benefits.
    The case of Callen v. The City of Saginaw, in the Supreme Court of Michigan (5-0 Mich.,-), is a case where a city was permitted to build a court house to secure the location of a county seat, and in the event of its removal, the county to refund the entire expense.
    This is taxation by a municipal corporation and is entirely distinguishable from the case at bar, and is under a constitution which does not contain the limitations which our own does. - Cooley on Taxation, 2d Edition, 190.
    In Gordon v. Carnes et al., 47 N. Y., 612, the Court of Appeals of New York held that in the absence of limitations in the constitution, the Degislature might require taxation in support of a normal school to be located in a village. It appears, however, that in this institution the village was to have, free of expense, a school of its own to be managed by a local board. Here was a direct benefit conferred, and the judge delivering the opinion expressly says, the constitution has no limitations upon legislative power. In Illinois, under a constitution authorizing municipal taxation for “corporate purposes” there have been diverse holdings upon this subject. In Livingstone County v. Welde, 64 Ill., it was held, to provide a location or site for a state institution is not a corporate purpose such as would authorize the authorities, such as municipalities, to impose upon property taxes to pay the expense thereof. This is a strong, well reasoned case in favor of the position we take here; and the iniquity of the attempt to tax a locality for a general state purpose, is strongly commented upon by the judge delivering the opinion.
    We are aware that in Biirr v. Carbondale, 76 Ill., 455, where a city sought to repudiate bonds in the hands of innocent purchasers, which had been issued by the city to secure the location of the Southern Illinois Normal University, the right of the bond-holder to collect his bonds was sustained on the ground that for that particular institution it was a corporate purpose for which local taxation might be authorized. Judges Walker, McAlister and Craig, three of the seven judges, dissented,. and held that the case came within the doctrine of Livingstone County v. Welde, above cited, and that the constitutional provision is not abrogated by an attempt to carry the project through by vote. .These Illinois cases came before the Supreme Court of the United States. Livingstone County v. Darlington, 101 U. S., 407.
    In the case of Marks v. The Trustees of Perdue University, 37 Indiana 455, the Supreme Court of Indiana sustained taxation for the location of a university for general education, upon the ground of the great benefit to be derived by the people who were located near to such an institution, and who could receive its direct benefits for educational purposes, as well as the reflected benefit to their property oi such an institution in their midst.
    The decision of the court below is also sought to be sustained by the decision of the Supreme Court of Ohio in the case of Walker v. The City of Cincinnati, 21 Ohio St., 14. The constitutional provision then under consideration is not involved in the present case. Taylor v. The Commissioners of Ross county, 23 Ohio St., 22 ; Wyscarver et al. v. Atkinson et al. 37 Ohio St., 80; Counterman v. Dublin Township, 58 Ohio St., 515; Pleasant Township v. Aetna Life Ins. Co., 138 U. S., &J.

      It is said that the legislature, an independent branch of the government, has determined that the location of this institution within the borders of Wayne county, is of such a peculiar local benefit that the people of that county can be taxed for its location and maintainance, and that, however,, much the courts might differ with the legislature, that its. decision is binding and conclusive as to the benefits to be derived. It is to be observed that under this act the legislature made no decision. It simply opened a lottery in which any of the counties of the state are entitled to take a. chance; and the institution might be located under the provisions of this act, not within the county best adapted to its purposes, but, in the discretion of the board of control of the institution, in any one of the eighty-eight counties of Ohio, making the most liberal donation, though least adapted to its aims and purposes.
    It seems to us that it was never the intention of the-framers of the constitution to permit counties to tax themselves with the location of a state institution, to be paid for in imaginary benefits to the locality. A perusal of the debates of the convention, as well as a sensible interpretation of the provisions of the constitution, show that counties were to be kept within the legitimate sphere of taxation for such purposes, as were required to promote the welfare, convenience and health of the people. The policy of such legislation as this is all wrong. A great state should locate its public institutions at such places as may be best adapted to meet the wants of the people, and promote the-objects intended in donating its public funds to the various-uses of institutions, such as the state may properly establish and support.

      John K. Richards, Attorney General, A. D. Metz, Prosecuting Attorney, McClure & Smyser, and Johnson & Taylor, for defendants in error.
    I. The legislative power of the state is lodged by the constitution in the General Assembly and it embraces all the objects and purposes of state government. Hence the difference between the constitution of the United States and. the constitution of a state, such as ours. In the former we look to see if the power is expressly given; in the latter to see if it is denied or limited. Therefore, when the power of the General Assembly to enact any particular law is drawn in question, the proper inquiry is whether such an exercise of legislative power is clearly prohibited by the constitution. 11 Ohio St., 534, 542; 10 Ohio, 237; Fletcher v. Peach, 6 Cranch, 128.
    II. Does the law in question violate article X, section 7, of the constitution which provides that the commissioners of counties, trustees of townships, and similar boards, shall have such power of local taxation, for police purposes, as may be prescribed by law ?
    The contention of the plaintiffs in error is, that this section is a limitation on the general grant of legislative power contained in article II, section 1, of the constitution, and that, therefore, the General Assembly cannot, without violating the constitution, confer any other powers of taxation on counties than that of local taxation for police purposes. If this be true it would substantially dismantle a county as an efficient auxiliary of the state admistration in accomplishing the objects and purposes of state government. As political subdivisions of the state, originally intended to be active instrumentalities in carrying out the objects of state government, the functions of counties would be greatly narrowed, if the proposition maintained by the plaintiffs in error is tenable. The constitution did not create counties. It found them in existence, exercising immemorial powers. It did not prescribe their offices in the complicated machinery of public administration. Railroad Co. v. The Commissioners 1 Ohio St., 89; Commissioner v. Mighels, 7 Ohio St., 119; Wardv. County, of Hartford, 12 Conn. 406; Boalt v. Commissoners 18 Ohio, 16; 21 Ohio St., 52; Cass v. Dillon, 2 Ohio St., 613, 614; 17 Ohio St., 614; 20 Ohio St., 370; 20 Ohio St., 292; 27 Ohio St„ 103; State ex rel. v. Commissioners, 35 Ohio St., 467, 468; 18 Daw Bulletin, 62; 39 Ohio St., 344; 117 N. Y., 1; 104 N. Carolina, 714; CommonwealtJvv. Alger 7 Cush., 84; Cooley on Con. Dim-, .'714.

      III. Does the act in question violate art. XII, sec. 2, of the constitution? This section contains no grant of power, but a limitation on the general grant of legislative power contained in art. II, sec. 1. See 28 Ohio St., 522; 47 Ohio St., 246; Bowles -v. State, 37 Ohio St., 35; Ctillen v. City of Saginaw, 17 N. W., 678; Gordon v. Comes, et al., 47 N. Y., 612;' Burr v. Carbondale, 76 Ill., 455; Marks v. Trustees 'of Perdue University, 37 lad., 465; 101 U. S. Rep., 416, 417; Merrick v. Inhabitants of Amherst, 12 Allen, 500; Gordon v. Comes et al., 47 N. Y., 608; State ex rel. etc. v. Haben Treasurer etc.t. 22 Wis., 635; Callamv. The City of Saginaw 141ST. W., 678; Hensley County v. The People , 85 Ill., 544.
    We maintain that'the principles announced in the adjudications we have cited are sanctioned by the Supreme Court of Ohio in the case of Walker v. The City of Cincinnati, et al. 21 Ohio St., 47.
    If the contention of the defendants in error, that a political subdivision of the state may voluntarily tax itself,, when authorized by law, so to do, to secure the incidental advantages to be derived from the establishment of a state institution within its limits, is well taken, the question arises, who is to determine whether such advantages .will accrue or not? Is it the courts or the mass of people themselves acting under the sanction of laws? Sharp less v. The Mayor of of Philadelphia, 21 Pa. St., 147.
    Can it be successfully contended that an exclusively agricultural county, like' Wayne county, can derive no possible-local advantage from the experiments conducted by the station under the act of congress and of the state of Ohio? Is proximity to the station of no special advantage? Will an institution of this kind, organized under the joint auspices of the National and state governments, supported by their joint appropriations, afford no exceptional benefits to the community residing in its immediate vicinity? Every body is aware of the rivalry that exists in the different counties of the state to secure the location of state institutions within their limits. Is this rivalry grounded on illusory expectations? We think not.

      The question may be asked whether the plaintiffs in error have not been guilty of laches in not applying for a restraining order pending litigation. High on Injuctions, vol. I, sec., 28; 70 N. Y. 519, 520; 3 N. J. Equity, 137,141,142; 16 Wis., 693, 696; 5 Johnson’s Chancery, 170, 171.
    Besides, the experiment station has been located and the provisions of the act substantially carried into effect. Every elector who voted for the donation would be estopped from challenging the validity of the act. 17 Am. St. Rep., 411; 15 Ohio St., 64; Cooley on Taxation, 819; Bigelow on Estoppel, 509; Burroughs on Taxation, Section 38.
   Spear, C. J.

To a full understanding it may be well to state further that the Ohio Agricultural Experiment Station was created by the act of April 17th, 1882, vol. 79 Ohio Raws 113. By this act the location, control and general •management of the station are to be committed to a board of control, consisting of five members. The board is to locate the station, and appoint a competent director. These members of the board are to be appointed by the governor, and he, with the directors of the station, is to be ex-officio, a member of the board. This body is to make annual report of its experiments and work to the governor, which shall be published annually in the Ohio Agricultural Reports, and five thousand copies separate in pamphlet form for free distribution, and to be printed and paid for the same as other public printing.

The United States statutes of March 7, 1887, authorize certain sums to be appropriated from the National Treasury to aid such stations as may be established in the states or territories, and provide for the dissemination of information regarding experiments, by bulletins to be published at least once in three months, one copy to be sent to each newspaper in the state or territory where located, and, as far as the means of the station will permit, to such individuals actually engaged in farming as may request them, the same to be transmitted through the mails free. No other means are provided for informing persons interested of the results of experiments, and these are open to all alike.

It will be noted that the board having control of the station, is a state board. Its reports must be made to the executive óf the state, and the contents disseminated among the people of the state at large, by officers of the state, and, save so far as aided by the general government, at the expense of the state. After the county commissioners have passed to the treasurer of state, the proceeds of the bonds as contemplated by the act of April 23, 1891, they cease to have any part or lot in the future of the enterprise. Nor has any citizen of Wayne county, as such, any right to a voice in the location, construction, or management of the station, nor to information regarding its operations other than such as is afforded to the people of every portion of the state. Without question or doubt, then, the station sought to he established in Wayne county is, to every intent and purpose, a state institution.

The question is thus presented, whether or not it is within the legislative competency to entail upon a single county of the state, by a tax upon the taxable property therein, the entire expense of a site for, and the construction of, a state institution, although the burden is sought and approved by a majority of electors voting at a special election called for the purpose.

The affirmative of this proposition is maintained by defendants in error upon the ground, in substance, that if some peculiar local benefit would flow to the people of Wayne county from the location of this institution within that county, even if the benefit be very slight, then the general assembly has the power to grant the people the right to thus tax themselves; while the opposite is contended for by plaintiff in error upon the ground, in substance, that the purpose of the enterprise being essentially a state purpose, not local but general, the tax to accomplish it becomes a state tax, pure and simple, and cannot, for reasons stated in the petition, be imposed upon the tax-payers of a single county against the expressed will of a minority.

It is not doubted that if the object sought to be attained by the act in question were local in its nature and purposes, having for its primary object an improvement peculiarly and specially benefiting the property taxed, the tax complained of might be authorized by the general assembly. Many decisions of this court cited by counsel, and others not cited, giving construction to the present constitution, warrant this conclusion. We do not stop to review these decisions, for no important object would be attained by doing so. It is enough to say that they do not meet this case. Nor is it controlled by decisions upon kindred subjects giving construction to the constitution of 1802.

It is everywhere conceded, as a general proposition, that the right of taxation is an inseparable incident of sovereignty, and that it is delegated by the people to the general assembly by the constitution, and that the right to tax necessarily includes the power to fix the amount and direct upon what property it shall be imposed. But this power is subject to limitations, and important limitations have been placed upon it in this state bj' article 12 of the constitution. Section-2 of that article provides that “la-ws shall be passed, taxing by a uniform rule, all moneys, credits, etc., * * * and also all real and personal property, according to its true value in money.” This section, as has been held again and again by this court, (see Bank v. Hines, 3 Ohio St., 1, and opinion of Ranney, J., in Hill v, Higdon, 5 Ohio St., 246, and Zanesville v. Richards, same vol. 589), furnishes the governing principle for all laws authorizing taxes for general revenue, to be levied for any purpose, whether state, county, township or corporation. The object intended is to secure equality and uniformity in the imposition of these public burdens. That is, the tax must be uniform upon all the taxable property within the limits of the taxing district. The general assembly, controlled by the section cited, is without power to determine, by its own inclination or caprice, upon what property and in what proportion the burdens shall be laid, or that the burdens of one district may be imposed upon another district. If a county, township, or city tax, it must be uniform throughout the limited territory to which it is applicable; if a state tax it must be’uniform all over the state. Such is the doctrine of the cases above cited, and we are not aware of any holding of this court inconsistent with it.

The character and purpose of a law, not less than its constitutionality, are to be determined by its operation and effect. If, in effect, its purpose is one that concerns, and its benefits are to be bestowed upon the people of the entire state, or the people of a particular class in the entire state, as we have already found to be true of the act in question, then it is a law general in its character, and if it seeks to impose taxation for the carrying out of those purposes, it would seem to follow that such taxes are state taxes. They are for governmental purposes. All such impositions form part of the general revenue as distinguished from assessments which are “special and local impositions upon property in the immediate vicinity” of a local improvement, “and laid with reference to the special benefit which such property derives from the expenditure.” Being,^.therefore, taxes for general revenue, measured by the rule hereinbefore stated, it would follow that in order to make the burden equal and uniform, the taxes should necessarily be imposed upon the taxable property of the entire state.

The precise question presented in the case at bar has not, so far as we are aware, been heretofore passed upon by this court. But it is believed that the principle of Fields v. Commissioniers, 36 Ohio St., 476, sustains the view- above suggested. The holding is that an act to authorize the commissioners of certain counties to locate and construct tnrnpike roads, and pay for the same by a tax to be laid on all the property in the county except such lands as had theretofore been previously assessed for similar improvements, was in conflict with section 2 of article 12 of the constitution, because the act was one intended to create an assessing district bounded by county lines, and therefore, as to that county, a general law, the fund to be raised being for general revenue purposes, and yet sought to exempt a portion of the land therein from the tax imposed, and hence was not uniform. If the commissioners of Highland county, under the statute referred to,could not, for the cost of constructing a road witbin that county, assess a tax resting upon a part only of the taxable property of the county, leaving a portion untaxed, because such tax would be in violation of the rule of uniformity required by section 2 of article 12 of the constitution, it is difficult to see how the commissioners of Wayne county, acting under the act in review, can lawfully assess a tax upon the taxable property of that county, for the benefit of the whole of the state of Ohio, without violating the same rule of uniformity.

Rooking at the question from any standpoint, the conclusion seems clear that the taxation sought in this case is in effect the taking of property of the tax payers of Wayne county for the private benefit of other citizens of the state, and is obnoxious to all the objections against the appropriation of private property for private purposes which could exist in any other case.

Says Judge CoouEY, in his work on Taxation, p. 144: “In cases where the character of the work, as local or general, is plain, the rule of right is clear. If a single locality' were to assume to tax itself, or the state were to undertake to tax it, for the construction of a state work or the erection of a state building, no one could hesitate for a moment in saying there was no such right, and that there could be none so long as taxation by the fundamental law is required tq be laid by fixed rules, and is not subject to the arbitrary caprice of legislative bodies.” In support he cites State Haben, 22 Wis. 661; Livingston Co. v. Weider, 64 Ill. 427, and Sleight v. People, 74 Ill. 47.

We are met with the claim that the people of Wayne county have determined for themselves that the location of the station will be a local benefit to them; that they are content to take the burden, and .hence the court should not interfere. It is true that a majority of the electors voting did so determine. And if the proposed tax would affect them only thej' might be estopped to deny its validity. But the voters are not necessarily the tax-payers, and if they were, there would still remain to consider the rights of the minority who opposed. In the language of Judge Ranney, in Cass v. Dillon, 2 Ohio St. 646, treating of the power of county commissioners to make subscription to the stock of a railroad company: “The people have not depended upon the legislature for protection. Sad experience had taught them that laws having local application, and imposing local burdens, seldom commanded the deliberate judgment of the whole representation of the state. They have, therefore, deemed it necessary to prohibit that bod}'' from authorizing this evil; and remembering that minorities were as well entitled to protection as majorities, they have given each individual citizen a sure guaranty that his right of property shall not be invaded in that manner, or for such purposes.” It may be added', also, that the submission to a vote of the electors can hardly affect the constitutional, question. A question of constitutional power can not satisfactorily be solved by asking the advice of persons claimed to be specially interested. If it can be maintained that the general assembly may authorize Wayne county to assume this burden, it may, with still less doubt, require it to be done. That this station, if established, would prove of some slight local benefit to the people living immediately near it, and, in a lesser degree, to others within the county residing farther away, we, need not. stop to deny. It is enough for us to know that the principal object intended and authorized was a state institution, to be located, constructed, controlled and managed wholly by the state for the common good of the persons interested throughout the entire state, and that whatever benefit might accrue of a local character, would be merely incidental.

It is insisted that the tax would be justified under the authority given county commissioners, township trustees and similar boards, by section 7 of article 10 of the constitution, to levy taxes for police purposes, inasmuch as the-institution will educate the people of Wayne county how to prevent and cure diseases among domestic animals and plants, such as are used for human food, and thus conduce to the public health and welfare. We think the point not tenable. If such a burden could be fixed upon a county, it could upon a township, or even a lesser territorial division. The section referred to must be held to give power to boards of commissioners, etc. to levy taxes for objects strictly local in tbeir nature. It cannot Have been the purpose of the intelligent body which framed the constitution, nor of the people who adopted it, by this section, to clothe county commissioners, and township trustees and other boards, under the guise of police power, with authority to tax the people of their localities for the establishment of a state institution for the making of experiments as to foods and plants, the benefits of which, in general, are as much to be enjoyed by the people of the state at large as by those of the immediate neighborhood. Indeed, a strong argument is made favoring the proposition that the above cited section is a limitation on the power of those boards, and itself prohibits the levy of the proposed tax. We do not find it necessary to enter upon a consideration of that question.

Authorities from other states have been cited which, it is insisted, sustain the claim of defendants in error. We have examined the cases, but do not esteem it of importance that they be reviewed here. In general, the constitutional provisions involved are not the same as ours, and, in any event, the decisions are not controlling. The Ohio cases relied upon by defendants in error relate to taxation for purposes primarily local. For reasons already stated, they do not control, and can have but' little bearing upon the case under consideration.

To sum up: As conclusion, we are of opinion that the purpose to be accomplished by the act of April 23, 1891, is not a local, but a general, purpose; one common to the state at large. The tax to accomplish it is, therefore, a state tax for general revenue, because the object to which it is to be devoted is the establishment of a state institution, which tax, to be lawful, must, under section 2 of article 12 of the constitution, be levied by a uniform rule, and rest equally upon all the taxable property of the state. And as the act under review undertakes to place this burden upon the taxable property of one county alone/it is in conflict with the section above cited, and therefore void.

It follows that in sustaining the demurrer to the petition, and dismissing the same, the courts below erred. At.the bearing in tbis court it was urged that the plaintiffs, by their conduct, had estopped themselves to deny the legality of the proposed tax. Of course this cannot be determined except by issue joined. The judgments .will, therefore, be reversed, and the cause remanded, -with directions to overrule the demurrer and for further proceedings according to law.

Judgment reversed.


source: Caselaw Access Project

author: By the Court.

license: Public Domain

text:
    Brundred et al. v. Rice.

      Railroad companies — Discrimination in freight rates, by — When illegal— When money paid by shipper, may be recovered back — ■ Corporation— When formed to accomplish an illegal purpose, it is no defense that it was legally incorporated.

    1. A railroad company is not warranted in making a contract whereby it binds itself to carry for one shipper crude petroleum, or other article, at half the rate it agrees to charge all others for the same service, at the same time, and as part of the agreement, binding itself to charge all others double the amount as a fixed open rate, and to pay such favored shipper one-half of it when collected, in consideration of his agreeing to establish and maintain a system of pipe lines to its road.
    2. Money so paid by a shipper, in ignorance of the agreement, and received by the favored shipper, may be recovered back in an action for money had and received by the former against the latter.
    3. Where the real purpose for which a corporation is formed is to use it as an instrumentality in the accomplishment of an illegal purpose, the fact of incorporation will not avail the promoters as a defense in a suit against them to recover money obtained from the plaintiff by such methods.
    (Decided November 1, 1892.)
    Error to the Circuit Court of Washington county.
    In his suit below, George Rice recovered of the defendants $1,823.75, money claimed to have been unlawfully exacted of him as freight by The Cleveland & Marietta Railroad Company, on crude petroleum shipped by him over the road of the company from Macksburg to Marietta, Ohio. As his ground of recoverj'- against the defendants, he averred, that Macksburg, Ohio, was a large crude petroleum producing district in which he was interested as a producer and shipper, being also engaged in the business of refining the oil at Marietta, Ohio; and that the road of the company, an incorporation under the laws of Ohio, was the only means of shipment from Macksburg to the latter place. It is then averred that prior to January 1, 1884, “Said defendants William J. Brundred, Benjamin F. Brundred, Theodore D. Dale and Charles N. Royce and the said Cleveland & Marietta Railroad Company became parties to an agreement in writing, whereby among other things the said Cleveland 8. Marietta Railroad Company was to charge all shippers of such petroleum oil from said Macksburg to said Marietta, an open rate of thirty cents per barrel, freight thereon, and to collect such freight from all shippers and to pay over to said defendants one-half part of all of such freight so charged and collected as such open rate. That said contract was made and entered in the year 1888, and, by its terms, was to be in force for the term of twenty years from and after its date, and among its other stipulations therein made, said railroad company bound itself not to change said thirty cents rate during the running of said term without the consent of defendants or their assigns. The original parties to said contract were said Cleveland & Marietta Railroad Company of the first part, and said Wm. J. Brundred and Theodore D. Dale of the second part; and that before January 1, 1884, and after the making of said contract, said Benjamin F. Brundred and Charles N. Royce, became parties thereto by assignment from said original parties of the second part; thereafter, about May, 1884, The Ohio Transit Company — a corporation about that time organized under and by virtue of the laws of Ohio, and thenceforth to the present existing as such — became, by assignment, a party to said contract, thereby nominally acquiring all the rights of the parties of the second part, and their assigns, thereunder.

      “The said-plaintiff further says that said defendants were the promoters of said Ohio Transit Company, caused it to be organized, and became, and have been ever since its organization, its principal stockholders and its managing officers; that they were producers, dealers in, and shippers of such petroleum oil from said Macksburg and vicinity, and in their operations handled and had the shipping of nearly all of the said oil shipped from said Macksburg and vicinity, aside from that shipped by plaintiff, at the time of their becoming parties to said contract, and causing the same to be performed, and up to the time of the organization of said Ohio Transit Company; that from the time said Ohio Transit Company became their assignee of said contract, it dealt in and controlled the shipment of the oils from said Macksburg and vicinity in the same manner, and about to the same extent as said defendants had before done,
    . “And said plaintiff further says that said defendants, for the purpose of establishing and maintaining a monopoly in themselves of the handling of the oil production of said Macksburg and vicinity, and of getting the oils shipped by them from said latter locality to Marietta for fifteen cents per barrel, and of compelling all other shippers, and especially this plaintiff, to pay as freight on such oil thirty cents per barrel for. the same service, and of having paid as tribute to them fifteen cents per barrel of the said thirty cents, per barrel paid by such other shippers, without any consideration moving from said defendants to such other shippers therefor, did, in conspiracy and confederation with said Cleveland & Marietta Railroad Company to the ends aforesaid, cause the said contract to be entered into as aforesaid, and became parties thereto, and did also, upon its organization, cause the said Ohio Transit Company to become a party to said contract by assignment, and to enter into said conspiracy and confederation for the purposes aforesaid; and made use of said corporation, The Ohio Transit Company, ■ through their control of the same as its officers, to accomplish the purposes aforesaid.”

      The shipments made by the plaintiff and the amount collected of him as freight, between January 1, 1884, and February, 1886, are then set forth, with an averment that the amount paid was excessive; that half of it was not freight, but was collected by the company for the defendants, and received by them in pursuance of the contract, of which the plaintiff at the- time was ignorant.
    The defendants in their answer, among other things, set up that The Ohio Transit Company was a corporation duly organized under the laws of Ohio, and that they could not be charged with moneys received by it, on the ground set forth in the petition. But the court charged the jury that, “if you find by the greater weight of the evidence, that the assignment of the contract was a mere form; that the intention of the defendants in organizing this corporation was to make it a mere agency to receive this money, to be distributed to them under the contract; and according to their right in it as if there had been no assignment; the mere agent, I say, to hold the money for their benefit, why then, a payment to the corporation, under those circumstances, is a payment to them; and the plaintiff would have a right to recover as if it had been put in their hands.”
    The agreement between .the company and the assignors of the defendants, was as follows:
    “Article of agreement made and entered into this eleventh day of October, A. D. 1883, by and between The Cleveland & Marietta Railroad Company, party of the first part, and W. J. Brundred, of Oil City, Venango county, Penn., andT. D. Dale, of Marietta, Washington county and state of Ohio, party of the second part.
    “Witnesseth: That, Whereas, the said first party is the owner of a line of railroad running through the oil fields of Ohio, and known as the Cleveland & Marietta railroad, and is desirous of securing for said railroad the transportation of the crude petroleum oil now produced, or which may hereafter be produced, along the line of said railroad, or which may hereafter be produced at such points in the state of Ohio as would be accessible to said road by pipe lines.
    “And whereas said first party does not desire to incur the cost and expenses of constructing and furnishing the necessary system of pipe lines, pump, pumping stations, receiving and storage tanks, etc., necessary for conducting the business, and the further cost and expense of maintaining the necessary labor organization for collecting and handling said oil, and the further cost and expense attending the purchase of oil at the wells in said oil fields. Now, therefore, be it known that for and in consideration of the valuable considerations to be kept and performed by the parties hereto, the said parties hereto do hereby mutually agree with each other exclusively for the term of twenty years from the date hereof as follows, to wit:

      “First — Said second parties or their assigns agree to build and construct a system of pipe line, pump, pumping stations, storage and receiving tanks, loading racks, telegraph line, etc., for the collection of the oil production of said oil fields of Ohio, and the delivery of the same into cars on the line exclusively of said Cleveland & Marietta Railroad free of any cost and expense to said first party, it being undei'stood that the second party shall not be held responsible to the first party for failure to obtain the control of any of the product of said oil territory by reason oí competition beyond the control of said second party.

      “Second— Said first party hereby agrees to build the necessary side tracks as needed from time to time free of any cost or expense to said second parties, and on which áaid second parties are to load into cars the oil collected through said system of pipe lines.
    “ Third — In consideration of said second parties building and constructing said system of pipe lines as per first section of this agreement, and delivering oil into cars on the line of said Cleveland & Marietta Railroad free of any charge or expense to said first party, said first party hereby agrees to divide with the second party (in the proportion of fifty (50) percentage to said second, and fifty (50) percentage to the said first party), the open all-rail rate charged by said Cleveland & Marietta Railroad on all oil transported to Marietta or intermediate points from said oil fields of Ohio, and further agrees to divide with said second party (in the proportion of twenty-five percentage to said second party, and seventy-five percentage to said first party), of the all-rail rate charged by said Cleveland & Marietta Railroad and its connections, on all oil transported in a northerly direction from said oil fields, to the points named in article fourth or their equivalent.
    “ Fourth — It is further mutually agreed and understood by and between the parties hereto, that the open all-rail rate from said oil fields to Marietta and intermediate points shall be thirty (30) cents per barrel of forty-five gallons, and to Cleveland, Columbus, Toledo, and such other points as require the oil to be- transported by said Cleveland & Marietta Railroad in a northerly direction from said oil fields, shall be the same as the all-rail rate from the oil fields of Pennsylvania, to said same points, and further that no change of oil rates shall be made by said first party during the term of the existence*,of this .agreement without the knowledge and consent of said second party or its assigns.

      “Fifth — It is further mutually agreed by the parties hereto, that the freight charges on the oil transported as hereinbefore provided shall be collected by said first party, and said first party shall render monthly statements to said second party of the shipments of oil, and shall pay to said second party, on or before the tenth day of each mouth, the amount due on said second party as per this contract for the month preceding.
    “And further that the employees of said second party oi its assigns, while engaged in conducting said business, shall be transported over sa,id Cleveland & Marietta Railroad free of charge; and further that all telegraph messages relating to said business and destined to points along the line of said railroad, shall be transmitted free of charge over the wires of said Cleveland & Marietta Railroad so far as its existing contracts with The Western Union Telegraph Company will permit.
    “ Sixth — It is further mutually agreed that all materials used by said second parties or their assigns in constructing and operating said system of pipe lines herein referred to shall be transported by said first party over its railroad and branches at the rate of one cent per ton per mile.
    “ Seventh — It is further mutually agreed that said second party shall furnish the tank cars needed for the transportation of said oil, and that the said first party shall pay to the ■owner or owners of such cars the usual car service, and be responsible to said car owners for all damages to said cars while on its road except ordinary wear and tear.
    “ In witness whereof the said party has caused to be ■attached the signatures of its general manager and its secretary, and said second- parties have attached their hands and seals the day and year above written.
    (Signed):
    ThE CLEVELAND & MARIETTA R. R.

      By M. D. Woodeoed, General Manager.

    Witness: R. C. Cline, Secretary.

    F. G. Jewett, W. J. Brundred,
    E. B. DeVoe. T. D. Dale.”
    The judgment was affirmed by the circuit court.

      Nye & Oldham, for plaintiffs in error.
    Whether defendants might have been liable to plaintiff in an action of tort for causing him to be charged excessive, or discriminating rates' is, perhaps, uncertain. Plaintiff has ■clearly elected, however, to sue them in assumpsit for money had and received. He sets forth in his petition what he claims to be the facts, and asks judgment against them not for damages but for a sum certain, collected from him and paid to them. While'-it is not always easy to determine under code pleading when an election is finally made between tort and contract, it is held that the prayer may be decisive of the question. Bliss Code Pleading, sec. 155; Corry v. Gaynor, 21 Ohio St., 280; Gillett v. Tuganza, 13 Wis., 472.
    This being, then, an action against these defendants for money had and received, we submit that, if the wrong done plaintiff consisted only in discrimination against him, he has no right of action against the defendants. If the effect of defendants’ contract with the railroad company was simply to enable them to have their oil transported at a lower rate than that of plaintiff, he can not complain of them. In every case of discrimination the favored shipper receives a benefit at the expense of his competitors. Whether he is charged less in the first instance, or receives a rebate, or whatever may be the form of the discrimination, the effect is the same — he retains or receives money which has come directly, or indirectly, from those against whom the discrimination has been made. The injured shipper, who has paid not excessive rates but simply more than his competitor, has his remedy against the carrier, but we know of no authority or principle of law that permits him to recover in an action for money had and received against such competitor. Rothchild v. Wabash R. R. Co., 15 Mo. App., 242; Stewart v. Erie & JV. W. Trans. Co., 17 Minn., 372: The Eclipse Tow Boatsr. The Ponchatrian R. R. Co., 24 Ua. Ann., 1; The Oil Creek and Alleghany R. R. Co., v. Pa. Transportation Co., 83 Pa. St., 160; 1 Morawetz on Corp., sec. 376.
    A great variety of practical, considerations, constantly changing, must enter into the making of freight rates by a railroad company. Evans v. The Oregon R. & N. Co., 1 Interstate Com. Rep., 641; Harding v. The SI. P. M. & O. R. R. Co., 1 Interstate Com. Rep., 375; Rice v. The L. & JV. R. R. Co., 1 Interstate Com. Rep., 734. ■
    The validity of acts performed by a regularly constituted corporation can not be impeached by showing that its charter was obtained by fraud, or that the persons who obtained the charter or formed the corporation conspired to accomplish an unauthorized and illegal purpose. 2 Morawetz on Corporations, sec. 769; Stout v. Zulick, (N. J.) 7 Atl. Rep., 362; 4 Am. & Eng. Encye. of Raw, 198; Taylor on Corporations, secs. 145, 154; 2 Morawetz on Corps., sec. 781; 818.

      A. D. Follett, 1 W. B. Loomis and E. B. Kinkead, for defendant in error.
    Brief of Edgar B. Kinkead.

    I. The contract entered into by the railroad company and parties to this suit was illegal and wholly void. It is well settled in Ohio that such discriminations are unlawful.
      ■Scofield v. Railway Company, 43 Ohio St., 671; State ex rel. v. The C. N. O. & T. P. Ry. Co., 47 Ohio St., 130.
    It cannot be justified on the ground that it was a legitimate traffic arrangement between connecting carriers, ¡because such a rule would only apply to those who needed and received the services of both carriers, and this defendant in error did not, as he had his own pipe lines to convey his petroleum to the railroad. A railroad company has no right to impose a charge for the conveyance of goods to their station where such services are not required. Garton & Stone v. Bristol & Exeter Ry Co., 95 Eng. Com. Raw, 639.
    Corporations engaged in carrying goods for hire, have no right to discriminate in freight rates in favor of one shipper, even when necessary to secure his custom, if the discriminating rate will tend to create a monoply by excluding from their proper markets the products of the competitors of the favored shipper. Beach on Priv. Corp. secs. 832, 833b; State ex rel v. C. W. & B. R. R. Co., 47 Ohio St., 130; Everett v. Penn. R. R. Co., 36 N. J. R., 407; Sayre v. Louisville Union Benevolent Association, 2 Duvall, 143; Handy v. Cleveland cf M. R. Co., 31 Fed.-Rep., 689.
    II. The contention of plaintiff in error that no liability rests upon them, because they were incorporated, thus shielding them from personal liability, cannot avail them where the whole purpose of incorporation was a mere sham to protect them from personal liability. Illegal acts of a corporation may be inquired into when it is engaged in an unlawful business, or when it be organized as a mere form, and the promoters become individually.liable; but evidence must appear to warrant such a conclusion, and the jury must decide the matter. Chautauqua County Bank v. Risley, 19 N. Y., 369; Angelí & Ames on Corp. 96.
    Where the purpose of a corporation, or the business carried on by persons in the name of a corporation, is illegal, those composing such company render themselves personally liable, and they cannot interpose the corporate privilege to protect them from liabilities such as the law would impose upon individuals in the transaction of a similar business. Beach on Priv. Corp. sec. 163c, 162b, note 7; Voren-

      denburg v. • Behan, 38 Ra. A.nn. 627; Medill v. Collier, IS Ohio St., 599; McGrew v. City Produce Exchange, 85 Term.,. 572; Lawler v. Walker, 18 Ohio, 151.
    III. Rord Mansfield calls the action of assumpsit for money “a liberal action founded upon large principles of equity” and applicable whenever the defendant has received money winch he cannot conscientiously retain. It is an equitable remedy which lies in favor of one person against another, when that other person has received money from the plaintiff, under such circumstances, that in equity and good conscience he ought not retain the same, and which. ex aequo et bono belongs to the plaintiff. 4 Waits A. & D., 469, and cases cited. The railroad compány did not get the money in this case, but the competing shipper did, and under an illegal contract. The railroad company was merely an agent of these plaintiffs in error to receive and pay over the illegal charges according to the provisions of the contract. Where money has been tortiously received, assumpsit will lie. Therefore assumpsit was the proper remedy.. 7 Rawson’s Rights and Remedíesj p. 5738; see also McGi'ew v. City Produce Exchange, 85 Tenn., 572; Handy v. Cleveland & M. R. Co., 31 Fed. Rep., 689.
   By the Court.

That the contract between Brun-dred and his associates was against public policy and void, will hardly admit of a question. As said by Baxter, J., in Handy v. Railroad Company, 31 Fed. Rep. 689. “Railroads, are constructed for the common and equal benefit of all persons wishing to avail themselves of the facilities which they afford. While the legal title thereof is in the corporation of individuals owning them, and to that extent private property, they are by the law and consent of the owners, dedicated to the public use. * * Except in the mode of using them, every citizen has the same right to demand the services of railroads, on equal terms, that they have to the use o.f a public highway, or the government mails.” Whatever may have been the financial condition of the railroad company, it was not warranted in making a contract by which it bound itself to carry for one shipper at half' the rate it agreed to charge all others for the same service, in consideration of his agreeing to establish a system of pipe lines to its road; at the same time and for the same consideration binding itself to charge all others double the amount as a fixed open rate, and to pay to such favored shipper one-half of it when collected.

It seems equally clear that where, in pursuance of such unlawful agreement, a railroad company has charged and collected certain sums, as freight, of a shipper, ignorant of the agreement, and has paid them over to the other party, the shipper may, on discovering the fraud, maintain an action against such party for money had and received to his use: For the action lies in every instance where one has come into possession of money which should in good conscience be refunded to another.

It is claimed that the interposition of The Ohio Transit Company, an incorporation under the laws of Ohio, organized for the purpose of transporting petroleum through tubing and pipes, precludes a recovery against the defendants. If it had, in good faith, been organized for such purpose, there is no doubt but that the receipt of the money by it under the agreement, would constitute a defense to the action against the defendants. If, however, it was organized by the promoters,'the defendants, simply for the purpose of consumating the illegal agreement and shielding themselves from the consequences of receiving the illegal' exactions made under it, the act of incorporating can be of no avail to them as a defense. The court fairly submitted this question to the jury, and in finding their verdict for the plaintiff, must have found the facts to be as averred in the petition. It is a stern but just maxim of the law, that fraud vitiates everything into which it enters. Deeds and records made in the most solemn form are set aside and held for naught when shown to 'have been effectuated for the purpose of fraud; and there is nothing so sacred in a certificate of incorporation as to take it out of the reach of this maxim.

Judgment affirmed.


text:
    Riley v. Hitzler.

      Proceedings in aid of execution — Exemption of personal earnings, from attachment — Head of family.

    A debtor residing with his widowed mother and invalid brother who, are supported by him, is not thereby entitled, under either section 5430 or section 5483 of the Revised Statutes, as the head of a family, to hold exempt from execution or attachment his personal earnings for three months.
    (Decided Nov. 22, 1892.)
    Error to the Circuit Court of Hamilton county.

      H L. Cooper, for plaintiff in error.

      P. J. Jones, for defendant in error.
   By the Court.

George Hitzler, defendant in error, filed bis affidavit itt attachment before a justice of the peace in and for Cincinnati township, Hamilton county, charging that Benjamin Riley, plaintiff in error, was then justly indebted to him for board and refreshments; that the property about to be attached was not exempt from execution; that Riley was-not the head or support of a family; that he was a non-resident of Ohio; and that the affiant had good reasons to and did believe that The Cincinnati, Indianapolis, St. Eouis & Chicago Railway Company had in its possession moneys,, etc., the property of Riley.

Before any testimony was offered or judgment entered in the action, Riley filed a motion to dismiss the attachment and garnishment in the cause, for the following alleged reasons, to-wit: “That said defendant is the head of a family, and not the owner of a homestead; and that the property sought to be attached herein are the personal earnings of the said defendant within three months, last prior to the beginning of this action; and that said earnings do not exceed the sum of one hundred and- fifty dollars, and are necessary for the support of himself and family.”

The motion was supported by affidavits, but there was no evidence that Riley was then the head or support of a family, except the fact, that he then resided with a widowed mother and invalid brother who were solely dependent on him for support, and who were supported by him. Hitzler filed no affidavits in rebuttal. The motion to discharge the attachment was overruled; exception was taken; and judgment was rendered for Hitzler. On error, the common pleas court affirmed the judgment of the justice of the peace; and on error to the circuit court the judgment of the common pleas court was affirmed; and by this proceeding, it is sought to reverse the judgment of the circuit court.

Under the decision in Snook v. Snetzer, 25 Ohio St. 516, the earnings of the debtor for his personal services for the time prescribed, would be exempted by section 5483 of the Revised Statutes, as well in attachment as under proceedings in aid of execution. But the question arises, whether the plaintiff in error is the head of a family, as contemplated in that section, or in section 5430 of the Revised Statutes, so as to be entitled to the benefit of its provisions. The question is one of statutory right and construction. The claim of the plaintiff in error, if sustainable, must be so by virtue of the -statute and not otherwise.

Section 5430, among the exemptions granted to heads of families and widows, provides that, “Every person who has a family, and every widow, may hold the following property exempt from execution, attachment, or sale for any debt, to-wit: * * * 6. The personal earnings of the debtor, and the personal earnings of his or her minor child or children, for three months, when it is made to appear, by the affidavit of the debtor, or otherwise, that such earnings are necessary to the support of such debtor, or of his or her family; and such period of three months shall date from the time of issuing any attachment or other process, the rendition of any judgment, or the making of any.order, under which the attempt may be made to subject such earnings to the payment of a debt. ” The words, “ Every person who has a family, and every widow,” in connection with the words, “the personal earnings of the debtor, and the personal earnings of his or her minor child or children, when it is made to appear that such earnings are necessary to the support of such debtor, or of. his or her family,” suggest and imply support or maintenance by a parent. The exemption from execution and attachment of the personal earnings of the debtor and of his or her minor child or children point to the parental relation, and to one as the head of a family who is under a legal obligation to provide for their support.

Section 5483 of the Revised Statutes, in aid of execution, is in pari materia with section 5430. While it provides that the judge may order property of the judgment debtor, or money due to him, not exempt by law, to be applied toward the satisfaction of the judgment, it prevents the earnings of the debtor for his personal services from being so applied. In providing that “the earnings of the debtor for his personal services at any time within three months next preceding the order, cannot so be applied, when it is made to appear by the affidavit of the debtor, or. otherwise, that such earnings are necessary for the use of a family supported wholly, or partly by his labor, ” section 5483 evidently has reference to section 5430, and to the same class of debtors or heads of families embraced therein. But in determining “who has a family,” or who is the head of a family, in the statutory sense, the relations existing between the plaintiff in error and his widowed mother, and invalid brother, are not, we think, such as are contemplated in the above sections of the statute.

. The plaintiff in error cannot be deemed the head of a family within the meaning of the statute so as to entitle him to a homestead, or in lieu thereof to hold exempt from levy and sale property of the value of five hundred dollars, in addition to the amount of chattel property otherwise by law exempted. It cannot therefore be used as an argument, that being the head of a family under the homestead law, he should be treated as such for the purpose of exempting his personal earnings for three months from execution and attachment.

Judgment of the Circuit Court affirmed.


author: By The Court.

text:
    Reed v. Reed.

      Breach of marriage contract — No action lies, where parties are first cousins.

    No action will lie to recover damages tor a breach of contract of marriage made in Ohio, where it-appears that the parties are related as first cousins.
    (Decided December 6, 1892.)
    Error to the Circuit Court of Monroe county.
    Action for breach of promise of marriage was prosecuted by the plaintiff against the defendant, in the court ,of common pleas. It was shown that the parties were first cousins; that the contract was entered into in Ohio, but to be performed in Pennsylvania, and that, at the instance of defendant, plaintiff went to Pittsburg, Pa., where defendant agreed to meet her, to marry, but he failed to perform his agreement.
    A judgment was obtained by plaintiff, which was reversed by the circuit court.

      Hunter & Mallory, for plaintiff in errror.

      John P. Spriggs, for defendant in error.
   By The Court.

We find no error in the record. Section 6384, Revised Statutes, provides that: “Male persons of the age of eighteen years, and female persons of the age of sixteen years, not nearer of ldn than second cousins, and not having a husband or wife living, may be joined in marriage.” Prior to the amendment of February 10, 1870, the section permitted marriage between persons otherwise qualified, “not nearer of kin than first cousins.” Succeeding sections provide that any probate judge who shall issue a license, or officer who shall solemnize a marriage, contrary to the provisions of the act, shall be fined, etc. All which shows the-spirit and purpose of the law; and this policy is not affected by the consideration that the statute punishing incest, section 7019, includes only persons nearer of kin than cousins. And where a contract is attempted to be. made between parties which contravenes the policy of the statute, courts will not aid in its enforcement, or in obtaining damages for its violation, but will leave the parties where it finds them.

Nor can the agreement to solemnize the marriage in Pennsylvania help the case, as such performance between residents of Ohio would work a fraud on the law. Story on Conflict of Raws, 116 a, and note.

Judgment affirmed.


author: By thr Court.

text:
    Crow v. Jordon.

      Proceeding in bastardy — Child exhibited to the jury as evidence of alleged paternity, and in corroboration of testimony of prosecutrix.

    (Decided December 6, 1892.)
    Error to the Circuit Court of Scioto county.

      T. C. Anderson, for plaintiff in error.

      Harper, Searl & Milner, for defendant in error.
   By thr Court.

On the trial of an action of bastardy, at the January term, A. D. 1889, of the court of common pleas of Scioto county, Jordon, to maintain the issue on her part, offered herself as a witness, and gave testimony tending to prove that she was an unmarried woman, and had never been married; that she was delivered of a bastard child on the 19th day of July, 1888, in a township in Scioto county, where she resided; that Crow was the father of the child, and that the child was still living. Her Coun-' sel then asked her the following question: “ Is that the child?” — alluding to an infant or small child, then held by the witness in her arms and upon her lap, and in view of' the jury, during the time she had been giving her testimony before the court and jury. The defendant, by his counsel, objected to the question. The court overruled the objection, to which the defendant excepted, and thereupon the witness-answered: “It is.” The circuit court sustained the court of common pleas in overruling the objection.

Held: The circuit court did not err; and there was no-error in permitting the child to be exhibited to the jury as-evidence of alleged paternity, and in corroboration of the testimony of the prosecutrix.

Judgment affirmed.


author: By the Couht.

text:
    State ex rel. v. Tanzey et al.

      Elections — Board of deputy supervisors of — Duties of, defined— Mandamus— When may be instituted, to compel board to act— By whom.

    1. The duties of the board of-deputy supervisors of elections, in making the abstracts of the votes returned by the officers of the election precincts of the county, are purely ministerial, -and are limited to compiling the votes shown by the tally-sheets so returned, and setting down to each candidate the aggregate number of votes so appearing to have been cast for him, and to certifying and transmitting the abstract so made, to the proper officer.
    2. The board is -without authority to hear evidence to contradict or explain the tally-sheets, or act upon information not appearing on their face, or to open or count ballots returned by the precinct officers, as uncounted ballots, concerning the legality of which, doubt or difference of opinion existed in the minds of' the judges of election.
    3. An action in mandamus, to compel the board to make, certify, and transmit to the proper officers as required by law, the several abstracts o! the votes shown by the tally-sheets returned from the various election precincts of the county, may be instituted on the • relation of any elector of the county.
    (Decided December 20, 1892.)

      IN MANDAMuS.

      H. J. Booth, John Logan and George K. Nash, for relator.

      John N. Van Deman, F. A. Davis and H. M. Daugherty, for defendants Hegler, Blessing and McKillipp.

      C. A. Palmer, Hidy & Patton, De Witt C. Jones and L. D. Johnson, for defendants Tanzey and Glaze.
   By the Couht.

The petition alleges that the relator is. a citizen and elector, of the county of Fayette, and of the second judicial circuit of the state of Ohio; and that the defendants William C. Tanzey, Isaac Glaze, Allen Hegler and Horace M. Blessing constitute the board of deputy state supervisors of elections for the county of Fayette, and J. A. Me Killipp is the clerk of the board. It is further alleged that the defendants have failed and refuse to make and complete the third abstract provided for, and required, by section 2890, of the Revised Statutes, of the' votes cast at the general election held in Fayette county, on the 8th day of November, 1892, and have also failed and refuse to make and complete the abstract required by section 2994, of the Revised Statutes, showing the number of votes given in the several election precincts of the county for each person who received votes for the office of judge of the circuit court, and transmit the same to the board of deputy supervisors of elections of the county in the second judicial circuit having the largest population, the county of Fayette being in that circuit; and the prayer of the petition is for a writ of mandamus to compel the defendants to perform their duties in that behalf. An alternative writ having been issued, two of the defendants, Hegler and Blessing, answer, that they are ready and willing, and have at all times been, to make and certify the abstracts in the manner sought by the petition, but the other two members of the board of deputy supervisors have prevented their completion and transmission; while they, in turn, answer that they have been, and still are, ready and willing to perform their duties in the matter complained of, not, however, in the manner asked by the petition; and they allege they have not been able to complete the abstracts, because Hegler and Blessing insisted they should be made up as in the petition prayed for.

The controversy between the members of the board, relates to their duties with respect to abstracting the votes of certain election precincts for judge of the circuit court of the second circuit; and that, aside from a question raised as to the right of the relator to institute the action, is the matter of controversy here.

The defendants Tanzey and Glaze, contend, that in making up the abstracts referred to, Frank Chance, who was the regularly nominated candidate of the Democratic party for the office of circuit judge, should, in addition to the votes cast for him on the Democratic ticket, be credited with eleven votes which, it is claimed, he received on the People’s party ticket in the western precinct of Union township, and with certain other votes which, it is claimed, he received in some other election precincts of the county. They first claim that the talley-sheets of these precincts, properly interpreted, show on their face, that Chance received the number of votes claimed, on the ticket mentioned. The tally-sheets of the precincts in question are not substantially different. Taking that of the western precinct of Union township as an example, there is a division of the tally-sheet set apart for the “ People’s party ticket,” in the left-hand column of which is the name of the office to be filled, and in the column next on the right, the name of the candidate for the office. Among the offices, to be filled, as appears in the left-hand column, is “Judge of Circuit Court, 2d Circuit,” opposite which, in the next column to the right, is the name “ Frank Chance.” To the right of each name on the ticket, is the word “received”; then still to the right of that, opposite each name, except that of Chance, appears the following,

while, in the corresponding columns opposite Chance’s name, nothing appears — they are blank; then below the name of Chance, follow the names of the can didates, for county offices, with the words and characters—

in the columns opposite each name. There is printed at the head of the ticket, on the tally-sheet, above the names of the candidates, the words “ Straight Ballots.” The columns to the right of this are blank. But immediately below the words “Straight Ballots,” on another line, are the words “Scratched Ballots,” and in the columns opposite these words, are the words and characters—

The claim of the respondents Tanzey and Glaze, is, that inasmuch as Chance’s name was on the People’s party ticket, and the other candidates on that ticket received the number of votes set opposite their names respectively, it is apparent the omission to credit him with a like number of votes is a mere clerical mistake. It is said, that the purpose was to set down the twelve votes opposite the words “ Straight Ballot,” instead of opposite the words “Scratched Ballot”; and there having been twelve straight tickets voted, each candidate must necessarily have received the same number pf votes, and, it is therefore immaterial, it is urged, that the number of votes are not set down on the tally-sheets in the columns opposite or under the name of Chance. This claim of the respondents assumes that two mistakes were made by the election officers of the precinct; one, in counting and tallying all the straight ballots as scratched ballots, and the other, in not tallying in the appropriate columns any of them for Chance. The presumption is that the precinct officers properly discharged their official duties, and that the tally-sheet as returned by them to the board of deputy supervisors, was in all respects correct. That' board had no right to indulge any different presumption, or interpret the tally-sheet contrary to what it plainly expressed. The law defining the duties of the precinct officers is clear and specific. Section 24, of the act of April 18, 1892, (89 Ohio Raws, 448), provides that when the count begins, the ballots shall be taken out of the ballot box “ one at a time, by one of the judges, who shall read aloud distinctly, while the ticket remains in his hands, the name or names voted for thereon, except that a straight ticket may be announced as such, and be so counted, and then delivered to the second judge who shall examine the same and pass it to the third judge, and so on to the fourth, who shall preserve it; and the same method shall be observed in respect to each of the tickets taken out of the ballot box, until the number taken out of the ballot box is equal to the number of names in the poll-book. The clerks shall enter in separate columns, by tallies under or opposite the names of the persons voted for, as provided in the form of tally-sheets, all votes thus read by the judges.” The duty enjoined upon the clerks by this section is, to set down in separate columns on the tally-sheet, by tallies, under or opposite the name of each candidate, the votes received by him as read by the judges, whether they be read as straight ballots, or otherwise. There appears to be no provision of law for entering the words “ Straight Ballots,” or Scratched Ballots,” on the tally-sheet, and none authorizing the votes to be tallied opposite or under those words, and counting votes thus tallied, for any candidate. But if there were, on the tally-sheet of the precinct in question, no votes were tallied to the People’s party ticket under or opposite the words “Straight Ballot,” but all are tallied opposite the words “ Scratched Ballots ”; so that, it does not appear from the tally-sheet, in any way, that Chance received any votes on that ticket.

Another claim made by Tanzey and Glaze is, that information having come to them from some of the precinct officers and other sources, that Chance’s name was in fact on the alblots cast and counted for the Peoples’ party ticket, an ad sealed envelope containing certain ballots which oraAt deposited and left uncounted because there were doubt and difference of opinion in the minds of the judges of election, concerning their legality, having been returned with the tally-sheet and poll-book of the precinct, it was competent for the board of deputy-supervisors, in making up the abstracts required by law, to inquire into the truth of the information, and if necessary, to open the envelope and ascertain whether any mistake was made in the tally-sheet; and thejr further claim such investigation would have shown that Chance’s name was on each of the Peoples’' party ballots voted in the precincts in controversy. It is clear the board had no such power. Their authority extends no farther than to “make abstracts of the votes” returned by the precinct officers, in the manner provided by sections 2980,2989 and 2994 of the Revised Statutes, and certify and transmit them to the proper officer, as required by law. Tc make the abstracts, is simply to summarize and compile the votes shown by the tally-sheets returned from all the election precincts of the county, and set down to each candidate the aggregate vote shown by those tally-sheets to have been received by him. The duties of the board of deputy supervisors in this respect, are purely ministerial, and in their performance of them they cannot look beyond the returns made to them. The provision contained in section 24, of the act of April 18, 1892, that if there are left uncounted any ballots concerning the legality of which there is doubt or difference of opinion in the minds of the judges of election, they shall not be destroyed, but sealed up and returned with returns of the election “for such judicial or other investigation as may be necessary,” was intended, we think, to preserve the ballots, so they may be used as evidence in the event of a contest, or other investigation before a tribunal or body having jurisdiction to inquire into the regularity and validity of the election, or determine who was elected, and confers no au-tbority upon tbe board of deputy supervisors, in making up the abstracts, to enter upon such an investigation. We find no ground, therefore, upon which to sustain the claim made by the respondents Tanzey and Glaze, that eleven votes, or any number of votes tallied under the head of the People’s-party ticket in the western precinct of Union township, should be added to the votes received by Chance on the democratic ticket, or in any way carried into the abstract in his-behalf, since it does not appear from the tally-sheet of the precinct referred to, that he received any votes on the former ticket. And the same is - true as to the alleged votes which, those respondents claim should be entered in the abstracts,, to the credit of Chance, from the eastern precinct of Union township, and from the Green, Wayne and Jasper township-precincts, they being the other precincts in dispute.

The question is made, by demurrer to the reply, whether the relator is entitled to institute the action, he having no other interest than that of an elector of the county and judicial circuit. Section 6744. of the Revised Statutes, provides that the writ of mandamus “may issue on the information of the party beneficially interested.” It was held in State v. Brown, 38 Ohio St. 344, that an elector has such. beneficial interest in an election as entitles him to institute “a proceeding in mandamus to compel the sheriff to give notice and make proclamation to the qualified voters of a county to elect a judge of the court of common pleas therein.” Such a proceeding-would be futile if he could not also, in like manner, compel the performance of any other statutory duty, necessary to the consummation of the election, and declaration of its result.. The beneficial interest of the elector in the election does not cease, we think, when the machinery for holding it is'set in motion, nor, until all lawful steps are taken to its completion. It was claimed in argument at -the hearing, that the relator, by the interest he manifested in the election, had disqualified himself from maintaining the action. We have examined the evidence-taken on that subject, and are of opinion the claim is not. well founded.

Peremptory writ awarded.


author: By the Court :

text:
    Younglove v. Lime Company.

      Corporations — Stockholders' liability — When right of action com-píete— When not — Effect of appointment of receiver for, to carry on its business, or wind up its affairs.

    1. As a general rule, the creditors’ right of action against the stockholders of a corporation on. their statutory liability is not complete, so as to set the statute of limitations running, until judgment has been recovered against the corporation, and execution against it has been returned unsatisfied.
    2. When, however, the property of the corporation has been placed in the hands of an assignee in bankruptcy, or insolvency, or ot a receiver appointed on its dissolution to wind up its affairs, or in some such way has been put in process of application to the payment of its debts, the creditors may proceed against the stockholders without first reducing their claims to judgment against the corporation, and the statute will run in favor of the stockholders from such time.
    3. But a right of action does not accrue against the stockholders upon the corporation becoming insolvent in the sense, simply, that its property is insufficient for the payment of its debts, nor, upon the appointment of a receiver of the corporation merely for the purpose of carrying on its business, and not on account of its insolvency, or to wind up its affairs.
    (Decided Dec. 20, 1892.)
    Eeror to the Circuit Court of Cuyahoga county.
    The action below was brought by M. C. Younglove against The Kelly Island Rime Company, an Ohio corporation, and its stockholders, to enforce the statutory liability of the stockholders; the corporation being, as the petition alleged, insolvent. Charles Hickox, who was the only other creditor of the corporation, and also a stockholder, filed an answer to the plaintiff’s petition, in which, among other things, he ple.ad the statute of limitations as a bar to the action.
    On the trial in the circuit court, to which the cause had been appealed, a finding of the facts was made and entered on the journal of the court, from which it appears the court found that the company was insolvent and unable to pay its debts on the 1st day of January, 1818, and has continued insolvent ever since; that the plaintiff and Hickox are the creditors of the company, and its only solvent stockholders that are liable for the payment of its debts; “and, that in the event the claim of the plaintiff is not barred by the statute of limitations, the said plaintiff is entitled to recover of said Charles Hickox the sum of thirty-five hundred sixty-two and 23-100 dollars ($3562.23), with interest thereon from the first day of this term of this court.”
    The further facts found by the court, so far as they are material to the question whether the action was barred by the statute of limitations, are as follows:
    “At the September term, 1875, of the court of common pleas of Cuyahoga county, Ohio, at the suit of George W. Calkins v. The Kelly Island Rime Company, Charles Hickox, M. C. Younglove et al. a receiver on the • application of the plaintiff in that action was appointed by the court, who, under its direction, took possession of all the property of said company, and under the direction of said court operated and carried on its business until on or about the 18th day of August, 1878, when by order of said court, said property and business were returned to The Kelly Island Rime Co. That on the 28th day of August, 1878, and at the instance of M. C. Younglove, a petition in bankruptcy was filed by the plaintiff herein, M. C. Younglove, and certain other creditors of The Kelly Island Rime Company, in the United States District Court for the Northern District of Ohio, by which it was sought to have the said company adjudicated a bankrupt, and such action was had in such case by said court, that on the 16th day of February, 1880, said company was by said court declared a bankrupt, and one Henry N. Johnson appointed assignee, who at once duly qualified and entered upon the discharge of the duties of his appointment. That during the pendency of said proceedings in bankruptcy, and between the said 28th day of August, 1878, and said adjudication of bankruptcy as aforesaid, nearly all of the property belonging to the said Kelly Island Rime Company, consisting of its quarries, kilns, and other property at Kelly’s Island, had, in an action brought by one James F. Clark, on the 19th of August, 1879, in the court of common picas of Erie county, against said Kelly Island Rime Company and others, on a mortgage held by said Clark, been sold and conveyed to purchasers by order ■of said court of common pleas of said Erie county for very much less than its actual value, and in alleged violation of the bankrupt act of the United States. That to acquire the possession of said property the said assignee on the 20th ■day of July, A. D. .1880, brought an action in the United States District Court for the Northern District of Ohio against said James F. Clark and the said purchasers of said property and all others interested therein, the object and prayer of which petition were'to have the proceedings in the action so brought by the said James E. Clark against The Kelly Island Rime Co., as aforesaid, declared null and void to the end of obtaining possession of said property, and converting the same into money to apply it on the claims of the creditors of the said assigned estate. Said action was prosecuted by said assignee with due diligence and was (not) terminated the 8th day of March, 1883, when it resulted in an adjudication declaring the said proceedings in the court of common pleas of Erie county by said James F. Clark to be void, and ordering the delivery of the said property so sold in the said action of the said Clark, to the said as-signee for distribution in accordance with the bankrupt act of the United States. That said assignee in the exercise of due diligence proceeded to convert said property into money and make his final account of the assets to be distributed, which was done on the 24th of January, 1885, and said report of said assignee to the District Court of the United States was approved and affirmed and a distribution ordered of the percentage applicable to the payment of the claims of said bankrupt estate, a portion of which was paid to and applied on the claims of said plaintiff, and the said defendant Hickox, as set out in the pleadings in this action. The court further finds that the property that came into the hands of said assignee belonging to said bankrupt estate amounted to about $110,000 in value; and that the debts due from said company to its creditors secured and unsecured amounted to more than $110,000, but less than $150,000.”
    The action below was commenced on the 12th day ot July, 1884, at which time, the claims due Younglove,to obtain the payment of which his action was prosecuted, had not been reduced to judgment against the corporation.
    The circuit court held the action was barred, and rendered 'judgment accordingly. Error is prosecuted here to reverse that judgment.

      Boynton, Hale & Horr and Sherman & Hoyt, for plaintiff in error.

      J. E. Ingersoll, for defendant in error.
   By the Court :

As a general rule, the creditor’s right of action against the stockholders of a corporation is not complete, so as to set the statute of limitations running, until judgment has been recovered against the corporation, and execution has been returned without satisfaction. The reason is, the corporate property is the primary fund for the payment of the debts of the corporation, and the statutory liability of the stockholders a security which can be resorted to only after the creditor’s remedy against the corporation has been exhausted. When, however, the corporation has done, or suffered to be done, any act which would render judgment and process against it of no avail, as, where its property has been placed in the hands of an assignee in insolvency or bankruptcy, or, by the appointment of' a receiver, or dissolution of the corporation, or some other legal proceeding, its property has been put in process of application to the payment of its debts, the creditors may proceed against the stockholders without first putting their claims in judgment against the corporation. Morgan v. Lewis, 46 Ohio St. 1; Barrick v. Gifford, 47 Ohio St. 180; Bronson v. Schneider, Ante. 438.

In such cases, the insolvency of the corporation is as effectually established, and the creditor’s remedy as fully exhausted, as they would be by the return of- an execution issued against it, unsatisfied in whole or in part. The creditor need not wait final settlement or distribution by the assignee, or receiver, or other officer charged with that duty, but may at once commence his action against the stockholders. The action is an equitable one, in which all the creditors and stockholders must be parties, and the court may withhold final judgment until the exact amount each stockholder should pay can be ascertained, or so mould its decree as to require the several stockholders to pay their proper proportion of the liabilities remaining after the application of all the assets of the corporation toward their satisfaction, and retain control over the cause and the parties until their ultimate rights shall be determined and adjusted. But the creditor’s right of action against the stockholders does not accrue when the corporation becomes insolvent in the sense, simply, that its property is insufficient for the payment of its liabilities. And it was the insolvency of the corporation, in that sense, as we understand the record, which the circuit court held, set the statute of limitations running against the plaintiff below. The facts, as found by that court, with respect to the insolvency of The Kelly Island Time Company, are in substance, that since the first of January, 1878, it has been unable to pay its debts; and on the 18tffiof August of that year, the receiver, who had carried on the business of the company from 1875, to that time, was discharged, and the property, and business of the company restored to it, by the order of the court which appointed the receiver; and thereafter, the company continued in the possession of its property and control of its business until after the 28th of August 1878, when creditors of the corporation commenced proceedings in bankruptcy against it, in which, it was, on the 16th of February, 1880, adjudged a bankrupt, and its property transferred to the assignee then appointed in that proceeding. If the receiver was appointed because of the insolvency of the company, to wind up its affairs, the statute, no doubt, would run from that time, in favor of the stockholders. There is no express finding that he was, or was not so appointed; but any inference that his appointment was for the cause or purpose named, is inconsistent with the fact that for nearly three years he carried on the business of the company under the direction of the court, and then, by its order, restored the business and property to the company, and the further fact that the insolvency of the company, as found by the court, dates from the 1st of January, 1878, long after the receiver was appointed. The inference from these facts, would rather be, that the receiver was appointed to carry on the business, in order to accomplish some purpose of its stockholders or directors, and not on account of its insolvency; and that its property and business were returned to it, either, because there was no authority for the appointment of the receiver, or because the purpose of his appointment had been fully accomplished. At all events, from the termination of the receivership to the filing of the petition in bankruptcy, there was no obstruction to the creditors pursuing their remedy against the corporation. But we think the proceeding in bankruptcy dispensed with the necessity of any action against the corporation, and entitled the creditors without judgment and execution against it, to sue the stockholders. The statute of limitations commenced to run in behalf of the latter from that time, and, as less than six years had elapsed when the plaintiff commenced his action, it was not barred.

Judgment reversed and judgment for plaintiff below.