author: Davis, J.

text:
    The Hartford Fire Insurance Company v. Whitman.

      Parol contract of insurance — Differs from parol agreement to issue policy — Company not bound by acts of agent, when— Policy held by agent of company, not delivery of contract, when — Law of contracts — Lazv of insurance companies.

      1. A parol contract of insurance, as distinguished from a parol agreement to issue a policy, must not be executory, but must take effect in praesenti.

    2. In order to establish the relation of insurer and insured, in parol, as existing before the delivery of the policy, the plaintiff must' do so by full and clear proof.
    3. In the absence of such a stipulation in the application or policy as makes the actual delivery of the policy a condition precedent to the consummation of the contract of insurance, the actual delivery or non-delivery of the policy is not of itself conclusive evidence of the completion of the contract of insurance; but the unconditional acceptance of the application by the insurer is a consummation of the contract.
    4. Where there is no oral agreement for insurance prior to the policy, if a policy has been executed in form, but has not passed out of the possession of the insurer or his agent and no payment of premium has been made, the contract is prima facie incomplete; and the burden is upon the party who asserts that there is a contract, to show that the policy became operative by the intention of both parties.
    5. Where, there being no oral agreement for insurance to take effect prior to the issue of the policy, upon an application for insurance at less than the regular rate, an agent wrote up and countersigned a policy and, without parting with the possession thereof, wrote to the applicant that he had “issued” a policy, but would hold the same until he should have time to hear from his company, and the company thereafter rejected the risk and the agent forwarded the policy to the company, these facts constitute no proof of a consummated contract of insurance, although the applicant may not have received notice of the refusal of the risk.
    (No. 9754
    Decided December 11, 1906.)
    Error to the Circuit Court of Wayne County.
    This case was orally argued before one division of the court, but was submitted to and decided by the full bench. The plaintiff alleges in his petition, among other things, that about July -ist, the defendant, by its agent, consummated a contract with the plaintiff for insurance on his dwelling-house in the sum of $700, and $300 on its contents, by the execution arid= receipt of the plaintiff’s application therefor, which the agent prepared and mailed to plaintiff for his acceptance and signature, and which plaintiff accepted and signed and returned to said agent, all of which was done in pursuance of a previous conversation. and agreement as to the terms of said insurance; that by the terms of said verbal agreement plaintiff was to pay as a premium the sum of $19 on -the call of the agent therefor after the issuance of the policy of insurance, which was to be issued by said agent forthwith on the receipt of said application and thereafter to be delivered to the plaintiff at the convenience of the agent, the insurance to take effect immediately on the return of the application by the plaintiff; that the defendant issued a policy of insurance covering the plaintiff’s said property and notified the plaintiff thereof in writing, on which notice he relied, and relying on such insurance gave the matter no further special attention; that for reasons unknown to the plaintiff, the agent delayed calling for said premium and the delivery of the policy until the said dwelling-house'and contents thereof were destroyed by fire on the 13th of August, 1903. Plaintiff also alleges that after the fire he notified defendant’s said agent of his loss and demanded its adjustment, and demanded payment according to said contract of insurance, and offered to pay the premium due thereon; that said agent refused to deliver the policy and concealed and kept the same from the plaintiff notwithstanding his repeated requests therefor, and the defendant company refused to make any adjustment or payment of the loss as by the terms of the policy they are bound to do, or to exhibit the policy so that the plaintiff might more certainly know his duties and rights thereunder. The plaintiff prayed that the contract of insurance might be specifically enforced and the loss ordered adjusted and paid to the plaintiff according to the said contract of insurance, and for such other and further relief as in equity he might be entitled.

      The answer of the defendant largely consisted of specific admissions and denials, and in substance the defense was, that the defendant, through its said agent, or otherwise, never entered into any contract of insurance with the plaintiff, verbal or written, upon the property described in the petition, or any other property.
    The case was tried to a jury, and at the close of the plaintiff’s • evidence the defendant moved the court to direct a verdict for the defendant, and also at the conclusion of all the testimony the defendant requested the court to charge the jury “that under the law and the evidence in this case the plaintiff is not entitled to recover and your verdict will therefore be for the defendant.” The court overruled the motion to direct a verdict for the defendant and refused to charge the jury as requested. A verdict for the plaintiff resulted and upon that verdict judgment was entered against the defendant. The circuit court affirmed the judgment of the court of common pleas.

      Messrs. Barger & Hicks and Mr. M. L. Smyser, for plaintiff in error, cited and commented upon the following authorities:
    13 Am. & Eng. Ency. Law (2d Ed.), 221; Brown v. American Central Ins. Co., 70 Ia., 390;. 30 N. W. Rep., 647; 16 Insurance Law Journal, 236; Taylor v. Phoenix Ins. Co., 47 Wis., 365; 8 Insurance Law Journal, 851; Idaho Forwarding Co. v. Fireman’s Fund Ins. Co., 8 Utah, 41, Myers v. Liverpool & London & Globe Ins. Co., 121 Mass., 338; Parry v. Dwelling-House Ins. Co., 67 N. H., 291; Manchester Fire Ins. Co. v. Plato

      et al., 23 C. C., 35; Newark Machine Co. v. Kenton Ins. Co., 50 Ohio St., 549; Johnson v. North British & Mercantile Ins. Co., 66 Ohio St., 17; 63 N. E. Rep., 610.

      Mr. Hiram B. Swartz, for defendant in error, cited and commented upon the following authorities :

      McGatrick v. Wason, 4 Ohio St., 576; Johnson v. North British & Mercantile Ins. Co., 66 Ohio St., 17; 11 Am. & Eng. Ency. Law, 280; Newark Machine Co. v. Kenton Ins. Co., 50 Ohio St., 549; Manchester Fire Ins. Co. v. Plato et al., 23 C. C., 35; Germania Ins. Co. v. Shoemaker et al., 1 O. S. C. D., 48; 22 Bull., 315; Brown v. American Central Ins. Co., 70 Ia., 390; 30 N. W. Rep., 647; 16 Insurance Law Journal, 236; Aetna Ins. Co. v. Maguire et al., 51 Ill., 347; Section 3654, Revised Statutes.
   Davis, J.

There is a well defined distinction, maintained in the cases, between a parol contract to insure or to issue an insurance policy, and a parol contract of insurance. Cases within the latter class, in order to be enforceable, must not be executory, but must take effect immediately on the making of the agreement. Taylor v. Phoenix Ins. Co., 47 Wis., 365; Myers v. Liverpool, etc., Ins. Co., 121 Mass., 338; Idaho Forwarding Co. v. Fireman’s Fund Ins. Co., 8 Utah, 41.

Nowhere in the record of this case do we find any evidence of a parol contract of insurance in praesenti. Whatever verbal agreement was made, if any agreement was ever consummated, was to take effect in futuro, on the execution and receipt of the plaintiff's application therefor and its acceptance by the insurer; and such is the averment of the plaintiff in his petition and his testimony on the trial. Nothing different appears anywhere in the record. In the evidence, there is not even a suggestion of a preliminary contract with the defendant for insurance to take effect prior to the application. There is some evidence tending to show that there was an agreement to issue a policy of even date with the application; but this is disputed, the agent asserting that there was never any agreement as to the rate of premium to be paid and that he only said to the plaintiff that he' would try to place the insurance in some company, at the rate which plaintiff said was all he would pay. He is supported in this by the undisputed fact that he did try in one company, in the same manner as with the defendant, and failed; and that he thereafter proceeded with the defendant, notifying the plaintiff that he would hold the policy until he should have time to hear from the company.

The defendant was never, even by implication, a party to any contract, verbal or written, until the plaintiff made his written application to the defendant (2 Clement on Fire Insurance, 574, Rule 15). It is a conceded fact that the agent with whom the plaintiff dealt was the agent of several companies and that his undertaking was to get the insurance “in some stock company,” not any particular one; but the defendant was not a party to, or known in, any negotiations until the agent had tried to get the insurance in another company and it had refused the risk on account of the rate proposed, nor until an application for insurance had been made directly to the defendant. The plaintiff, therefore, must recover, if at all, upon his alleged written contract as contained in the application and the policy which he claims was issued thereon. Thus is raised a pure question of law, which we think was erroneously resolved in both of the lower courts.

This question was presented to the trial court in this form: Do the facts proved in this case show that the Hartford Fire Insurance Company had entered into a contract with the plaintiff to insure the plaintiff’s building and that such contract -was subsisting at the time the plaintiff’s building was destroyed by fire? We have already disposed of the contention that there was an oral contract. It is admitted that the plaintiff made a written application to be insured in the defendant company, which was dated June 26, 1903, and was received by the agent about July 1, 1903; and it is admitted that the application was for insurance, on building and household goods, to the amount of one thousand dollars at the rate of $1.90 per hundred,' making the premium for one year nineteen dollars. It is admitted that the agent wrote to the plaintiff on July 3, 1903, as follows: “I have issued a policy covering on your property. Will hold policy until I have time to hear from the company.” It also clearly appears that the rate proposed in the application was very much below the regular rate for such a risk. It is also conceded that the agent had the authority to fill out and countersign policies; and that he did fill out • and countersign a policy to the plaintiff, which he did not deliver, but which was never out of his possession until the company declined the risk, when he mailed it to the company. The policy is stamped by the company, “Received July 9, I9°3\

It is a general rule that delivery is necessary to the validity of a written instrument. Nevertheless, the actual delivery or non-delivery of a policy of insurance is not always the final test of the completion of a contract of insurance, unless there is such a stipulation in the application or the policy as makes delivery a condition precedent to the consummation of the contract. Actual delivery of the policy may be very strong evidence of the consummation of the contract; but it is not of the essence of the contract, because possession of the policy is not conclusive. The insured may have obtained possession of the policy upon conditions, or by fraud, while possession by the insurer after the minds of the parties have met and the preliminary conditions have been performed by the insured, may be wrongful (Vance on Insurance, 173). A contract of insurance is consummated upon the unconditional acceptance of the application of the insured by the insurer. New York Life Ins. Co. v. Babcock, 104 Ga., 67; More et al. v. New York Bowery Fire Ins. Co., 130 N. Y., 537; Walker v. Farmers’ Ins. Co., 51 Iowa, 679; Newark Machine Co. v. Kenton Ins. Co., 50 Ohio St., 549.

It is argued in this case that the agent, having full power to do so, countersigned and issued a policy in accordance with the application, and notified the plaintiff that he had done so; and that having done so, his act bound the company as an acceptance of the application and as a constructive delivery of the policy. Yet, while the agent wrote to the plaintiff that he had “issued” a policy, it is clear that he meant no more than that he had written it and signed it, and he coupled with this information the further statement that he would “hold” it until he had heard from his principal; and it is beyond dispute that he did so hold it and that the insurance company refused the risk, whereupon he sent it to the company according ■to the custom in such cases. All this is inconsistent with the idea of an acceptance or of a holding of the policy by the agent for the plaintiff.

“Delivery is largely a question of intention, as evidenced by words or acts. The requisites of a valid delivery may be said to be three: (1) There must be an intention on the part of the person executing the policy to give it legal effect as a completed instrument; (2) this intention must be evidenced by some word or act indicating that the insurer has put the instrument beyond his legal control, though not necessarily beyond his physical control; and (3) the insured must acquiesce in this intention” (Vanee on Insurance, 169).

In the absence of an orai agreement for insurance prior to the policy, if a policy has been duly executed but has not passed out of the possession of the ■ insurer or his agent and no payment of premium has been made, the contract is prima facie incomplete; and it rests upon the party who asserts that there is a contract, to show that the policy became operative by the intention of both parties (Elliott on Insurance, Section 31). In the absence of any other evidence to show assent of the company to the making of a contract'of insur anee, delivery of the policy must be shown (19 Cyc., 603). See Newark Machine Co. v. Kenton Ins. Co., 50 Ohio St., 349.

Upon the foregoing principles the Supreme. Court of Iowa held that where an agent of an' insurance company made out a policy of insurance to the plaintiff and left it in the hands of a third party until he could learn whether the company would accept the risk or not and the company did refuse to accept it, there was • no delivery of the policy and no consummated contract of insur'ance, and the court said: “We think the verdict should have been promptly set aside because there was no evidence to support it.” Brown v. American Central Ins. Co., 70 Iowa, 390.

In order to establish the relation of insurer and insured as existing before the delivery of the policy, the plaintiff must do so by full and clear proof (Kerr on Insurance, 53, 88, Sections 33, 47); Suydam et al. v. Columbus Ins. Co., 18 Ohio, 459. We think that the plaintiff stopped very far short of proving the claims which he makes in his petition. And with respect to the allegation in the petition that the plaintiff relied on the notice that the agent was holding the policy, and therefore gave the matter of insurance no further attention, it is perhaps sufficient to again call attention to More et al. v. N. Y. Bowery Fire Ins. Co., 130 N. Y., 537, in which it is said, on page 547: “And it may be added that a person is under no obligation to do or say anything concerning a proposition which he does not choose to accept. Our opinion is that when an application for insurance is made, and its rejection is not signified, no presumption of its acceptance can be indulged in. There must be actual acceptance, or there is no contract.”

The court of common pleas therefore erred in ■overruling the request of the defendant to direct a verdict for the defendant and in rendering judgment on the verdict. It follows that the judgment of the circuit court was also erroneous.

Reversed and judgment for plaintiff in error.

Shauck, C. J., Price, Crew, Summers and Spear, JJ., concur.


source: Caselaw Access Project

author: Spear, J.

license: Public Domain

text:
    The Security Trust Company, Trustee, v. Ford et al.

      West Virginia state constitution — Relating to liability of corporation stockholders — Doing business in Ohio — Stock liable for full ■ par value — In payment of corporation debts — Constitutional law.

    The section of the constitution of the state of West Virginia, relating to the organization of corporations which provides that the stockholders of all corporations shall be liable for the debts of such corporations to the amount of their stock subscribed, is intended as a security to creditors, and the original subscribers to the stock of a corporation organized under the constitution and laws of that state cannot avoid liability to pay full par value of their stock for the purpose of paying corporate creditors by inserting in the articles of incorporation a provision that the stock shall be sold at fifty cents on the dollar, and when that is paid the stock shall be issued as fully paid and non-assessable.
    (No. 9583
    Decided December 11, 1906.)

      Error to the Circuit Court of Putnam county.
    The action out of which the present error proceeding arises was brought in the common pleas of Putnam by the Security Trust Company, as trustee in bankruptcy of the Columbia Telephone Manufacturing Company, against that Company, James M. Ford, and divers other persons, to enforce, in the interest-of the creditors of' said Company, a liability against said persons to the amount of their unpaid subscriptions to the capital stock of the Company.
    By its petition the plaintiff, in substance, averred the insolvency of the Columbia Telephone Manufacturing Company, and the appointment of itself by the proper United States authority in bankruptcy, as trustee thereof; that the Company was incorporated March 6, 1902, under the laws of the state of West Virginia; that its principal place of business was at Ottawa, Putnam county Ohio; that it was formed for the purpose of constructing, selling and dealing in telephones, switchboards and other electrical appliances, with an authorized capital stock of two hundred and fifty thousand dollars, divided into twenty-five hundred shares of one hundred dollars each, which stock consisted of one hundred thousand dollars of six per cent, non-cumulative preferred stock, and one hundred and fifty thousand dollars of common stock. The certificate of incorporation provided, among other things, that the common stock should be sold at fifty per cent, of its par value in payments of ten per cent, as might be called by the directors, and upon such payments being made the stock should be issued fully paid and non-assessable. A statement giving the names of the subscribers to the common stock with the number of the shares subscribed by each respectively, and the amounts thereof, followed, and a further statement showing the amount of the payments' made by each on the stock subscribed, from both of which it appeared that all the subscribers except the defendant, James M. Ford, paid fifty per cent, on the par value of the amount subscribed by them respectively, and no more. Ford paid thirty per cent, and no more. Thereafter the Company duly issued and delivered to all said subscribers (except Ford) certificates of full-paid and non-assessable stock to the amount. of the par value, although only fifty per cent. had. been paid.
    By section 2, article XI, of the constitution of West Virginia, in force at the time the Company was incorporated, and now, it is provided that: “The stockholders of all corporations and joint stock companies, except banks and banking institutions, created by laws of this state, shall be liable for the indebtedness of such corporations to the amount of their stock subscribed and unpaid, and no more.”
    At the time of said incorporation, and now, it was provided by statute in West Virginia as follows :
    “Any number of persons, not fewer than five, desiring to become such corporation should sign an agreement in which should be set forth: First, the name of the corporation. Second, the location of its principal place of business and its chief works. Third, the object for which said corporation is formed. Fourth, the amount of the total authorized capital stock of the corporation and the number of shares into which the same is divided and the par value of each share and the amount of such authorized capital stock subscribed and the amount paid in; and if there be more than one class of stock created by the agreement, a description of the different classes, with the terms upon which the different classes of stock are created. Fifth, the name and post-office address of each of the incorporators and the number of shares subscribed for by each. Sixth, the period limited for the duration of the corporation, and seventh, any provisions which the corporators might choose to insert for the regulation of the business and for the conduct of the affairs of the corporation, and any provisions creating, defining, limiting and regulating the powers of the corporation, the directors and the stockholders, or any class or classes of stockholders, provided such provisions be not inconsistent with the laws of said state.”
    The defendant Company was incorporated for the term of fifty years under said statute and under the constitution hereinbefore recited, which then was, has ever since been, and now is, the paramount and controlling law of said state as to all the matters to which the same relates, overriding and controlling all statutory provisions in anywise inconsistent therewith.
    The said Company is insolvent, its indebtedness amounting to about the sum of thirty-eight thousand dollars, and all of its assets will not realize over thirteen thousand dollars. It is necessary for plaintiff to collect from said defendants the whole or a large part of the amounts now unpaid upon their several subscriptions . to the common capital stock of the said company.
    Then followed a prayer that an account might be taken of the indebtedness of the Company, of the • amounts due from the defendants severally, and an order and judgment requiring the defendants severally to pay to plaintiff so much of their indebtedness as will fully liquidate the indebtedness, and for full relief.
    To this pleading a general demurrer was sustained and judgment entered against plaintiff by the common pleas. Upon appeal to the circuit court a like judgment was rendered except as to defendant, Ford, against whom that court held the petition sufficient. The plaintiff brings error.

      Messrs. Smith & Beckwith; Messrs. Watts & Moore and Messrs. Krauss, Eastman & Gosling, for plaintiff in error, cited and commented upon the following authorities:
    Section 3, Article XIII, Constitution of Ohio; State, ex rel., v. Sherman et al., 22 Ohio St., 411; Ooregum Gold Mining Co. v. Roper et al., H. L. Appeal Cases, 1892, 125; Sturges v. Stetson, 1 Biss., 246; Cook on Stock and Stockholders, Section 45; Clark & Marshall on Corporations, Vol. II, 1250; Handley v. Stutz, 139 U. S., 417; Scovill v. Thayer, 105 U. S., 154; Camden v. Stuart, 144 U. S., 104; Merchants & Mechanics Savings Bank v. Belington Coal & Coke Co., 51 W. Va., 60; 41 S. W. Rep., 390; Insurance Co. v. Leslie, 47 Ohio St., 409; First National Bank v. Gustin Minerva Con. Mining Co. et al., 44 N. W. Rep., 198; Coit v. N. C. Gold Amalgamating Co., 14 Fed. Rep., 12; Kenton Furnace, etc., Co. v. McAlpin, 5 Fed. Rep., 737; Adamant Mfg. Co. v. Wallace et al., 48 Pac. Rep., 415; Callanan v. Windsor (Ia.), 42 N. W. Rep., 652; State Trust Co. v. Turner (Ia.), 82 N. W. Rep., 1029; Walburn et al. v. Chenault (Kan.), 23 Pac. Rep., 657; Bank of Fort Madison v. Alden, 129 U. S., 372; Peter v. Union Mfg. Co., 56 Ohio St., 181; Sprague et al. v. National Bank of America et al., 172 Ill., 149; Louisiana Paper Co. v. Waples, 3 Wood (U. S.), 34; Bent, Receiver, v. Underdown et al., 156 Ind., 516; State, ex rel., v. Taylor, Secretary of State, 55 Ohio St., 61; Am. & Eng. Ency. of Law (2d Ed.), Vol. XXIV, 142; Monroe v. Hamilton et al., 60 Ala., 226; Thompson on Corporations, Vol. I, 229; Grellet v. Heilshorn et al., 4 Nev., 26; Betser v. Rankin, 77 Ill., 289; Jordan et al. v. Pollock, Admr., 14 Ga., 156; Grangers’ Life & Health Ins. Co. v. Kamper, 73 Ala., 327; Wilbur v. Stockholders, 18 N. B. R., 178; 29 Fed. Cases, 1189; Hospes et al. v. Northwestern Mfg. & Car Co., 48 Minn., 174; Section 3235, Revised Statutes.

      Messrs!Doyle & Lewis, for defendants in error, cited and commented upon the following authorities :

      Peter v. Union Mfg. Co. et al., 56 Ohio St., 181; Hospes v. Northwestern Mfg. & Car Co., 48 Minn., 174; Smith v. Prior et al., 58 Minn., 251; Christensen v. Eno, 106 N. Y., 97; Morawetz on Private Corporations, Section 813; Louisiana Paper Co. v. Waples, 3 Wood (U. S.), 34; Giesen v. London, etc., Mortgage Co., 102 Fed. Rep., 584; Bohmer & Osterloh v. City Bank of Richmond, 1 Am. & Eng. Corp. Cases, 36; Canada Southern Ry. Co. v. Gebhard et al., Exrs., 109 U. S., 537; Remington & Sons v. Samana Bay Co. et al., 12 Am. & Eng. Corp. Cases, 97; Brant v. Ehlen et al., 59 Md., 1; Bickley v. Schlag et al., 46 N. J. Eq., 533; Kulp v. Fleming, 65 Ohio St., 321; Nimick & Co. v. Mingo Iron Works, 25 W. Va., 184.
   Spear, J.

Of course the ultimate question is with respect to the sufficiency of the petition as tested by a general demurrer. As a primary question, irrespective of any claim of estoppel, what law governs the situation? Stated broadly, the question is this: Is the law determined by the constitution of the state of West Virginia, or by the will of the incorporators of the corporation? First, what is the paramount law of that state on the .question? If the constitution declares the law, then it would follow that no other expression with regard to the matter in issue can have serious consideration. The language of that instrument is: “The stockholders of all corporations * * * shall be liable for the indebtedness of such corporations to the amount of their stock subscribed and unpaid, and no more.” Naturally one would suppose that this language creates a liability on the part of the subscriber to stock in the interest of creditors, and that the amount subscribed means the amount as ascertained by the par value of the stock as fixed in the articles of incorporation. This construction is challenged by learned counsel for defendants in error and the claim is that as the provision does not use the word “par” it cannot follow that par value is meant. True, the word “par” is not used, but no other term defining what is meant by the word “amount” in the phrase “amount of their stock subscribed” is used. Par value means face value. As given by Bouvier, the words “are commonly used to indicate the face value of bonds or stock,” and everybody knows that it is a current phrase expressive of this idea. The total capital stock is the amount of all the stock, and the amount of each separate share is the face value of such share. Conform-ably with this understanding, the capital stock of this corporation was “divided into twenty-five hundred shares of one hundred dollars each.” So that, when a person subscribed for one share of stock the amount of his stock subscribed was one hundred dollars. A further contention is that the clause of the constitution quoted is intended as an act of limitation and not of liability, and that the words “and no more” are really the controlling words in the entire section, being the only words that give any effect to that provision of the constitution since it did not require a constitutional provision to fix the liability of stockholders for any amount unpaid on their contract of subscription, that being the rule of the common law, but it did require the limitation “and no more,” for but for that limitation the legislature might enact laws fixing a liability beyond that of the amount subscribed. This proposition, with due respect, appears more specious than sound. It loses sight of the fact that, but for the constitution, the legislature might change the rule of the common law and exempt subscribers to stock from any liability whatever for unpaid subscriptions. • We think the natural, first-blush construction of this constitutional provision is the true one. It does limit the power of the legislature, denying that body the power in the fixing of liability to go beyond the amount of stock subscribed, but it does also determine that liability shall extend to the amount of the face value of the stock subscribed; in other words, it gives character to the contract of the subscriber, and this rule is irrevocable so far as any power exists in the legislature, or the corporation itself, is concerned. Nor does it appear by the petition that the legislature has undertaken to supply a different rule. The power given by the seventh provision of the statute quoted conferring authority upon the corporation to make “any provisions which the corporators might choose to insert for the regulation of the business and for the conduct of the affairs of the corporation, and any provisions creating, defining, limiting and regulating the powers of the 'corporation, the directors and. stockholders, or any class or classes of stockholders,” are all controlled by the closing sentence, which is: “provided, that such provisions be not inconsistent with the laws of the state.” And, as before stated, the constitution is the law, and the paramount law of the state.

In argument counsel cite section 24 of chapter 53 of the statutes of West Virginia relative to joint stock companies, quoting:

“Sec. 24. In no case shall stock be sold or disposed of at less than par, except by vote of three-fourths of all of the stock of the corporation outstanding at the time the vote is taken and not then until notice,” etc. * * * “But nothing herein contained shall be construed so as to prevent any mining or manufacturing corporation subject to the provisions of this chapter from issuing stock or bonds and negotiating the sale of same, in payment 'of real and personal estate for the use of such corporation, and for its other corporate purposes and business, at such< price and upon such terms and conditions as may be agreed upon by the owners and the directors or stockholders of such corporation,” etc.

They also cite Bank v. Belington C. & C. Co., 51 W. Va., 60, where it is held that, under the above section, a mining corporation, after it is fully organized, may purchase property for corporate purposes and business at such price, upon such terms and conditions as may be agreed upon, and may pay by issuing so many shares of its capital stock to the vendor as are equal in amount at par value to the price agreed for the property, and the fact that the property is overvalued will not make the stockholders liable as for unpaid subscription until the transaction has first been impeached for fraud upon the corporation. We fail to see how either the section quoted or the decision aids counsel’s contention. The statute simply recognizes and regulates the power of the corporation to contract for property needed in its corporate business, authorizing the exercise of the judgment of the- corporation as to value, and the decision of the court sustains that clause of the act. We have no such case. It is to be noted, however, in passing, that the first clause of the section forbids the sale of stock at less than par except by vote of three-fourths of all of the stock of the corporation outstanding at the time the vote is taken and not then until notice is given, evidently contemplating an emergency arising after the company has become a going concern. Apropos of such a condition the court in the above cited case at page 80 remarks: “When the stock is issued for cash at less than par, parties taking the stock are liable to corporate creditors for the unpaid par value thereof, unless the issue was subsequent to commencing business, and the real value was paid into the corporation to enable it to go on with its business instead of becoming insolvent.” No such situation is presented in the present case.

From the foregoing, and other kindred considerations which will readily occur, we are led to conclude that the constitution of West Virginia, the paramount law of that state, gives such construction to the contract of the subscriber to the stock of the' corporation as fixes, in the absence of any subsequent pertinent and controlling fact, a liability upon the stockholder for the amount unpaid upon his stock subscription. But it is urged that such pertinent controlling fact is shown. The fact insisted upon is that the articles of incorporation were required to be, and were, filed with the secretary of state of West Virginia, and thus became public property and open to the inspection of any persons who might become creditors of the corporation. In other words, all creditors are presumed to have knowledge of all the terms of the articles of incorporation, are presumed to have dealt with it in the light of such information, and are, in the absence of fraud (which is not pretended in the present case), es-topped to insist upon any liability inconsistent with the provisions of the articles of incorporation. Supporting the first branch of this proposition, a number of .authorities are cited; that is, that the charter follows the corporation; as said by Morawetz, section 813, that creditors cannot complain of any transaction entered into by the company in accordance with the terms of its charter; that persons dealing with a corporation must be held to know its nature and chartered purposes; and hence they cannot complain of any modification of their rights, or of any dealing with the corporate assets which is expressly authorized by the company’s charter. And, as conclusion, this author says “that if the charter or laws under which a corporation was organized provide that the company may issue or sell its shares as fully paid up, on payment of less than their par amount into the company’s treasury, creditors would have no equitable right to insist on having the shares paid up at par.” But what is the charter? Does any lawyer doubt that the laws, constitutional or statutory, or both, of the state where organized enter into and become part of the articles of incorporation? The author above quoted states (section 318): “The articles of association of a company thus organized, taken in connection with the laws under which the organization takes place, form the constitution of the association,” etc. In the light of this principle the quotation first given from this learned author may well be accepted. But it comes very far short of a declaration that where the corporation introduces into its articles stipulations for the exemption of stockholders from constitutional liability, the creditors are necessarily bound by it. It is shown by the petition that the principal place of business of this West Virginia corporation was at Ottawa, in the northwestern part of the state of Ohio, and it is. a fair inference that the stockholders generally resided in that vicinity. In other words, it was formed by Ohio people going to West Virginia to incorporate because the laws of that state imposed less liability upon stockholders for corporate debts than were then imposed by the laws of Ohio. It is also a fair inference that the creditors were people residing in the neighborhood of its principal business office, and it is wholly unreasonable to suppose that they, or any of them, did in fact consult the articles filed with the secretary of state at Charleston, West Virginia. Where a claim is made that creditors did have actual notice of the issue of the stock as fully paid stock the burden of showing that is on the stockholders. As held in Hospes et al. v. Northwestern Mfg. & Car Co., 48 Minn., 174: . “It is not necessary that a subsequent creditor should have alleged that when he dealt with the corporation he believed that the stock had been paid for, and that he gave credit on the faith of it. If in fact the creditor had knowledge of the arrangement at which the 'bonus5 stock was issued, that is a matter of defense to be set up by the defendant stockholder.55 But it is urged that such articles filed in the office of the secretary of-state were in any event constructive notice to them. Suppose that be so, of what are they notified? We suppose the rule to be well established that a public record is constructive notice of what the record may properly contain, and that it is not constructive ■ notice of that which is illegally placed in the article filed or recorded. It would seem that the secretary might well have refused to file or record the instrument (The State, ex rel., v. Taylor, 55 Ohio St., 61). But, however that may be, we are of opinion that the record is not notice to creditors of that which the incorporators were incompetent to engraft upon the articles as affecting creditors. In other words, persons dealing with this corporation had the right to assume that it had, in its incorporation, conformed to the laws of West Virginia, and it 'is not within the power of such corporation to limit the liability of a portion of its stockholders for the debts of the corporation by a provision in the articles, unauthorized at least as regards creditors, thus attempting to relieve such stockholders and leaving the trusting creditors to “hold the bag.” If in any view the clause under consideration might properly find place in such articles, it should be construed as applying only to stockholders between themselves, implying an agreement that those who had bought at less than par, and paid, might receive dividends on the basis of fully paid stock and yet not be subject to further asséssment by the corporation itself. Any construction which would give the clause effect as to creditors would tend to work, whether so intended or not, a fraud upon the people by enabling the corporation to advertise itself as having a larger real capital than it in fact had; would be in effect a watering of the stock with no responsibility attaching to the excess issue, a result contrary to business morals and public policy; a. result inequitable even as between stockholders because giving to one- class a voting power out of proportion to the amount paid on their stock subscriptions. Using the language of Mr. Justice McLean in Sturges v. Stetson, 1 Biss., at page 250, “the term fraud is here used in no other sense than as an act without the authority of law, and against the provisions of the charter, and this epithet legally applies, however innocently the act may have been done by the directors.” “The effect was a fraud upon the law and upon the other stockholders.” If the right to fix fifty per cent, as the amount to be paid by these original subscribers be conceded, no good reason could be urged against the right to fix any lower amount, thirty, twenty, or ten.

It is not proposed here to review all the cases cited by counsel for defendants in error, though all have been examined. In support of the claim respecting constructive notice special reliance is placed upon two cases which will be briefly referred to, Paper Co. v. Waples, 3 Woods, 34, and Brent v. Underdown, 156 Ind., 516. In the Paper Company case the statute of Louisiana provided that the articles should contain “a statement of the amount of the capital stock, the number of shares, the amount of each share, and the time when and the manner in which payment should be made,” and also provided that “no stockholders shall- ever be held liable or responsible for the contracts or faults of such corporation in any further sum than the upaid balance due to the company on the shares owned by him,” and “the balance of each share, or any portion of such share, shall not be called for unless with the assent of three-fourths of .the stockholders, and then only to increase the business of the corporation.” The statute also required a record of the articles in the recorder’s office and publication once a week for thirty days at the domicile of the corporation. The articles so recorded conformed to the statute, and forty per cent, was required to be paid and was paid. No action was ever taken to call in or require payment of the remaining sixty per cent. The court held that after payment by the stockholders of forty per cent., and in the absence of a call by a vote of three-fourths of the stockholders, the stockholder was not liable to creditors. No comment is necessary to show the entire dissimilarity of. this case to our case, and its utter inapplicability to the questions under consideration. The language of the opinion in the Indiana case would seem to support the contention of counsel, although it is not shown by the report of the case what the statutory or constitutional provision in that state is. Counsel in argument supply this omission by citing section 5072 of the statutes of that state, which provides that stockholders shall only be liable for the amount of stock subscribed by them respectively. The decision, when the argument is reduced to the last analysis, apparently rests upon the conception that the creditor’s rights against the stockholders are measured by those of the corporation, and that such rights must be worked out through the corporation, a proposition to which we cannot give our assent. The argument of the learned court fails to satisfy us and we are unable to adopt its conclusions. Brant v. Ehlen et al., 59 Md., 1, is cited. The question in that case is whether as bona fide transferees of shares of stock issued by the company to the original subscribers as full-paid shares, and sold by them as such, the defendants were liable in an action by a creditor of the company for unpaid installments on said shares, though in fact they were not full-paid shares? Quite naturally, the court answers the question in the negative, but the case is many removes from our case. Peter v. Union Mfg. Co. et al., 56 Ohio St., 181, and Kulp v. Fleming, 65 Ohio St., 321, are cited. The first case was a controversy wholly between stockholders, wherein the court expressly disclaims any purpose to consider the rights of creditors, and the latter case deals with the provision of the Kansas statute which imposes a double liability on stockholders. Nimick & Co. v. Mingo Iron Works, 25 W. Va., 184, also deals with the matter of double liability. Neither case calls for more extended comment.

The learned and industrious counsel for plaintiff in error have cited to us a large array of authorities having more or less bearing upon the matters in dispute, a few only of which will be cited by us. Ooregum Gold Mining Co. v. Roper, et al., H. L. Appeal Cases, 1892, 123; Sturges v. Stetson, 1 Biss., 246; Cook on Stock, etc., Section 42; 2 Clark & Marshall on Corps., 1250; Sawyer v. Hoag, Assignee, 17 Wall., 610; Upton, Assignee, v. Tribilcock, 91 U. S., 45; Sanger v. Upton, Assignee, Id., 56; Webster v. Upton, Assignee, Id., 65; Pullman v. Upton, Assignee, 96 U. S., 328; Scovill v. Thayer, 105 U. S., 143; Handley v. Stutz, 139 U. S., 417; Camden v. Stuart, 144 U. S., 104; Wilbur v. Stockholders, 29 Fed. Cases, 1189; Sprague et al. v. National Bank, 172 Ill., 149; 24 Am. & Eng. Ency. Law, 142; Monroe v. Hamilton et al., 60 Ala., 226; Betser v. Rankin, 77 Ill., 289; Jordan et al. v. Pollock, Admr., 14 Ga., 156; Grangers’ Ins. Co. v. Kamper, 73 Ala., 325; 7 Am. & Eng. Ency. Law, 4.

We hold, as conclusion, that the petition states a cause of action and that it'was therefore error in the court to sustain the demurrer as to any of the defendants and to render judgment for them. The judgment of the circuit court will be reversed and the cause remanded with directions to overrule the demurrer and for further proceedings according to law.

Judgment reversed.

Si-iauck, C. J., Crew, Summers and Davis, JJ., concur.


author: Summers, J.

text:
    Smallwood v. The City of Cambridge.

      Mayor, not entitled to fees, when. ■

    The mayor of a city is not entitled to fees in prosecutions for the violations of penal ordinances.
    (No. 9587
    Decided December 11, 1906.)
    Error to the Circuit Court of Guernsey County.
    It is averred in the amended petition of the city against Smallwood that he was elected mayor of the city on April 5, 1903, and that on May 5, of that year, he entered upon the duties of the office; that the salary of the ma)^or had been fixed by ordinance at $600 per year; and that the fees or costs of the mayor for his services in prosecutions for violations of the penal ordinances of the city had been by an ordinance passed several years prior thereto fixed and prescribed to be the same as fixed by law for justices of the peace in misdemeanor cases.
    The amended petition sets out three causes of action. The first is to recover fees collected by him in such prosecutions; the second for fees collected by him for issuing licenses; and the third for fees drawn by him from the treasury of the city for his services in prosecutions for violations of penal ordinances where the person convicted had been committed to the workhouse.
    The court of common pleas sustained a general demurrer to each cause of action and dismissed the petition. On error, the circuit court affirmed as to the second cause of action and reversed the judgment for error in sustaining the demurrer to the first and third causes of action and remanded the case for further proceedings.

      Mr. J. A. Troette, for plaintiff in error, and Mr. J. W. Smallwood, - for himself.

      Mr. W. C. Collins, city solicitor, for defendant in error.
   Summers, J.

The question presented is whether under the municipal code of 1902 the mayor of a city may receive, in addition to his salary, fees as compensation for his services in prosecutions for violations of penal ordinances.

Section 126 of the municipal code of 1902, 96 O. L., 20 (Revised Statutes, Bates’ Fifth Ed., Sec-1536-633), provides: “Council shall fix the salaries of all officers, clerks and employes in the city government, except as otherwise provided in this act, and, except as otherwise provided in this act, all fees pertaining to any office shall be paid into the city treasury,” and, since it is not otherwise provided in the act, requires an answer in the negative.

But it is said that prior to . the adoption of the code of 1902 the mayor in every city other than those having a police court exercised judicial powers, and that as the law then was the mayor of such city would have been entitled to the fees involved in the present litigation; that the bill that afterwards became the municipal code of 1902 originally contemplated the separation of the legislative, executive and judicial functions; that it provided for a police court in every city and that, while it left in force Section 1744, Revised Statutes, now Section 1536-773, conferring upon the mayors of cities judicial power in civil cases, it provided for the repeal of Sections 1816 to 1822, Revised Statutes, inclusive, now Sections 1536-776 to 1536-783, inclusive, which confer such power in criminal cases ; that Section 126 of the code, so far as pertinent to the present question, then read as above quoted, excepting that it did not contain the second exception, and that the section as it then read did not require the mayor to pay such fees into the treasury because he had no judicial power in such matters and could receive no such fees. It is contended that the meaning of the section has not been changed by the addition of the second exception, and that, inasmuch as the wording of the section is the same, save this second exception, it means the same now as it did in the original bill and does not apply tp such fees.

The original bill was afterwards amended and the code of 1902 does not provide for additional police courts, but leaves that matter and the jurisdiction of mayors of cities in prosecutions for violations of criminal ordinances as they were. It is said that it is a matter of common knowledge that the reason the provision for a police court was eliminated from the bill is that a two-thirds vote of each house of the general assembly was necessary to the passage of a bill establishing a court, which it was known could not be obtained, and so Sections .1816 to 1822, inclusive, were omitted from Section 231, the repealing Section.

It is not necessary to consider to what extent resort may be had to the provisions of a bill for aid in interpreting an ambiguous statute. It is sufficient for present purposes to say that extraneous light is not needed when in the light of the statute itself its meaning is clearly apparent.

But recurring to the bill and conceding that as originally drawn the section requiring all fees pertaining to any office to be paid into the city treasury did not apply to fees in criminal prosecutions, because as the bill then was the mayor had no jurisdiction in such matters, it would not follow that it is not applicable now when there is something to which it can apply. The natural presumption would be, in the absence of any modification of the provision, that it was intended to. apply.. Moreover, this addition of the second exception, “except as otherwise provided in this act,” would seem to have been added expressly to preclude the misconception that the right to fees was intended to be restored because the judicial duties were left undiminished. Even in the absence of this precautionary exception the result would be the same, for the imposition of official duties does not imply a right to compensation, the rule being that unless compensation is expressly provided the duties of an office must be gratuitously formed.

But there is no room- for a suggestion, and none is made, that it is intended that such services shall be gratuitously rendered. In the police court in such cases fees are taxed, but they are not for the judge. His compensation is a salary and an allowance by the county commissioners. Under the municipal code of 1869, and until the adoption of the present code, it has been a reproach to our municipal corporation laws that in cases for the violations of ordinances the compensation of the mayor for his services depended upon a conviction. There is no more difficulty in compensating him by a salary instead of by fees than in case of a police judge, and the same reasons for it.

It is said that Section 1744, Revised Statutes, conferring upon mayors the powers of a justice of the peace in civil cases, Section 1746, „ providing that he shall be entitled to receive the same fees as a justice of the peace for similar services, Section 1843 providing that the costs of a mayor shall be fixed by ordinance, and Section 1751 requiring that all moneys that may be received by him in his official capacity, other than the fees of his otñce, shall be paid over to the treasury, now respectively Sections 1563-773, 637, 790 and 643, Revised Statutes, Bates’ Fifth Edition, are still in force. But the provision of Section 126 of the code that all fees pertaining to any office shall be paid into the city treasury irreconcilably conflicts with the implied permission to retain them. Moreover, Section 231 of the code of 1902 provides: “This act shall supersede all acts and parts of acts, not herein expressly repealed, which are inconsistent herewith.”

If Section 126 had read “except as otherwise provided” or “except as provided in this code,” it would be clear that the intention was so to dovetail the sections of the act of 1902 with the unrepealed sections of the statutes relating to municipal corporations that all taken together would constitute the new municipal code, and it would be possible to harmonize conflicting provisions. This probably was the intention and it was in a large measure effected, but in the present instance such construction is precluded by the express provision of the section that except as otherwise provided in this act (and as to mayors of villages it is otherwise provided in the act), all fees pertaining to any office shall be paid into the city treasury.

Section 1753, Revised Statutes, which provided, “The mayor shall, in addition to the fees he may be entitled to, receive such salary, payable quarterly out of the corporation treasury, as may be provided by ordinance,” is expressly repealed, and in its stead Section 126 was enacted. This section covers both fees and salary. It provides that council shall fix a salary for all officers except as otherwise provided in this act, and expressly provides that all fees, except as otherwise provided in this act, shall be paid into the city treasury. The inevitable conclusion is that, except as otherwise provided in the act, all fees shall be paid into the city treasury and the compensation of every officer shall be a salary. Section 200 of the act relates to mayors of villages, and provides: “The mayor shall pay over to the treasury of the village, monthly, all fines, license fees, or other moneys of whatever character which may be collected by him, and shall receive such fees as are provided for by Section 1843 °f the Revised Statutes of Ohio,” and further: “The mayor, in addition to the fees provided for in Section 1843 °f the Revised Statutes of Ohio, shall receive such salary, payable quarterly out of the corporation treasury, as may be provided by ordinance.” Respecting the office of mayor, this is the only instance in which in the act itself it is otherwise provided as to fees or salary. It follows that the mayor of a city is not entitled to the fees which he collects in such cases as part of the costs.

This reasoning leads to the same conclusion respecting the fees collected by the mayor in cases in which the convicted is sentenced to the workhouse.

It is understood that there are other cases pending in which the question of the right of mayors of cities to fees in civil and state cases is raised, and that question is not here determined.

Judgment affirmed.

Shauck, C. J., Price, Crew, Spear and Davis, JJ-, concur.


author: Crew, J.

text:
    Simmons v. The State of Ohio.

      Jurisdiction of justice of peace — Section 37180, Revised Statutes— Accused entitled to jttry — Waiver of jury can not be implied, when.

    1. In a prosecution under Section 37180, Revised Statutes, upon a plea of not guilty, before the-justice can acquire jurisdiction to hear the complaint and render final judgment in the case without the intervention of a jury, the accused must waive his right to a jury trial.
    2. Such waiver must clearly and affirmatively appear upon the record, and it can not be assumed or implied by a reviewing court from the silence of the accused, or his mere failure to demand a jury. (Dailey v. State, 4 Ohio St., 57, and Billigheimer v. State, 32 Ohio St., 435, distinguished.)
    (No. 9769
    Decided December 11, 1906.)
    Error to the Circuit Court of Allen County.
    On December 17, 1903, an affidavit was filed' before Wm. E. Reilly, a justice of - the peace of Ottawa township, Allen county, Ohio, charging that the plaintiff in error, Washington Simmons, did theretofore on the 12th day of December, 1903, torture, and unnecessarily and cruelly beat a certain animal, to-wit, a horse, contrary to, and in violation of, the provisions of Section 6951, Revised Statutes of the state of Ohio. On the filing of said affidavit a warrant was duly issued for the defendant, Washington Simmons, who was thereupon arrested and brought before said justice to answer said complaint. Upon being arraigned and upon said complaint being read to him, the defendant .Simmons pleaded thereto not guilty. Thereupon on application of counsel for the state the hearing of said complaint was by the justice adjourned until December 22, 1903, at one o’clock p. m. Thereafter, on said 22d day of December, no jury having been demanded by the defendant, Washington Simmons, said justice, without calling or impanneling a jury, proceeded to hear and determine said complaint. Upon such hearing said justice found the defendant, Washington Simmons, to be guilty as charged in said com-’ plaint, and sentenced him to pay a fine of $10, and adjudged against him the costs of prosecution, taxed at $21.80. To this finding, judgment and sentence, the defendant, Washington Simmons, at the time excepted. A motion for new trial was duly filed by the defendant, one ground of said motion being, “that the court had no jurisdiction to hear and determine the charge made against the defendant.” This motion for a new trial being overruled, error Was prosecuted to the court of common pleas,- where the judgment of the justice was affirmed. This judgment of affirmance was subsequently sustained by the circuit court, and Washington Simmons now prosecutes error to this court to obtain a reversal of the judgments of the courts below.

      Mr. D. C. Henderson, for plaintiff in error, cited and commented upon the following authorities :
    Section 2, Article III, Constitution of the United States; Article VI, Amendments to Constitution of the United States; Dillingham v. State, 5 Ohio St., 280; Williams & Haynes v. State, 12 Ohio St., 622; Work v. State, 2 Ohio St., 297; Dailey v. State,, 4 Ohio St., 57; Martindale v.
      State, 2 C. C. R., 2; Hoxie v. Home Ins. Co., 32 Conn., 40; Shaw v. Spencer et al., 100 Mass., 395; State v. Churchill et al., 48 Ark., 445; Hayes et al. v. Reger, 102 Ind. 524; Bringard v. Stellwagen et al., 41 Mich., 54; Fishback et al., Admr., v. Van Dusen & Co., 33 Minn., 117; Frederick v. Mo. River, etc., R. R. Co., 82 Mo., 402; Nash v. Baker et al., 40 Neb., 296; 1 Thompson on Trials, Section 2; Slocum v. Lessee of Swan et al., 4 Ohio St., 166; Lamb et al. v. Lane, 4 Ohio St., 167; Longstreth, etc., Mfg. Co. v. Halsey & Smith, 4 C. C. R., 307; Shaw, Admr., v. Kent, 11 Ind., 80; Sale v. Meggett, 25 S. C., 72; Brown v. State, 16 Ind., 496; State v. Holt, 90 N. C., 749; 47 Am. Rep., 544; State v. Carman, 63 Ia., 130; 50 Am. Rep., 741; Ward v. People, 30 Mich., 116; Swart v. Kimball, 43 Mich., 443; Biggs v. Lloyd, 11 Pac. Rep. (Cal.), 831; State v. Van Matre, 49 Mo., 268; Paul et al. v. People, ex rel., 82 Ill., 82; Goodin v. State, 16 Ohio St. 346; Cantwell v. State, 18 Ohio St., 482; People v. Mallon et al., 39 How. Pr., 454; Hodges v. Easton, 106 U. S., 408; 2 Swan & Critchfield Statutes, 1520; Sections 3718a, 6951, 7147 and 7301, Revised Statutes.

      Messrs. Prophet & Eastman and Mr. William Klinger, prosecuting attorney, for defendant in error, filed no brief.
   Crew, J.

The only question before us upon this record is, had the justice of the peace before whom the complaint was filed in this case — the offense therein charged being a misdemeanor and punishable by imprisonment — jurisdiction or authority to hear and determine such complaint without the intervention of a jury, the right to a jury not having been waived by the accused otherwise than by his failure to make a demand therefor? The prosecution in this case was for a violation of Section 6951, Revised Statutes, which provides that: “Whoever * * * unnecessarily or cruelly beats * * * any animal * * * shall be fined not more than two hundred nor less than five dollars, or imprisoned not more than sixty days or both.” Jurisdiction to hear complaints for a violation of the provisions of the above section is specially conferred upon justices of the peace and the mode of trial prescribed by Section 3718a, Revised Statutes, which provides: “Any justice of the peace * * * shall have jurisdiction within his county, in all cases of violation of the laws to prevent the adulteration of food and drink, the adulteration or deception in the sale of dairy products or any other foods, and drugs and medicines, and any violation of the law for the prevention of cruelty to animals or children, or under Sections 3140-2, 4364-24, 4364-25, 6984, 6984.a of the Revised Statutes of Ohio.

“\Judicial proceedings in such cases before justices.] In any such prosecution where imprisonment may be a part of the punishment, if a trial by jury be 'not waived, the said justice of the peace shall, not less than three nor more than five days before the time fixed for trial, certify to the clerk of the court of common pleas of his county that such prosecution is pending before him. Thereupon said clerk shall proceed to draw, in the presence of representatives of both parties, from the jury wheel or box containing the names of persons selected to serve as petit jurors in the court of common pleas in said county, twenty ballots or names, which shall be drawn and counted in the same manner as for jurors in said court of common pleas. Said clerk shall forthwith certify the names so drawn to said justice of the peace, who, upon receipt thereof, shall issue to any constable of the county a venire containing such names to serve as jurors to try such case and make due return thereof. The jurors shall be subject to the same challenges as jurors are subject to in criminal cases, except capital cases, in the court of common pleas. If the venire of twenty names be exhausted without obtaining the required number to fill the panel, the justice shall fill the panel with talesmen in the manner provided for criminal cases in said court of common pleas.”

The provisions of the foregoing section, touching the impanneling of a jury, are too plain and explicit to be mistaken, and too positive in character to be disregarded. The requirement is that a jury shall be drawn and impanneled as therein provided, if a trial by jury be not waived. And the justice is without right or authority to hear and render final judgment in any prosecution under this section, unless the accused shall have first waived his right to a jury trial. Section 5 of Article I of the Constitution of Ohio provides that: “The right of trial by jury shall be inviolate.” And by Section 10 of Article I it is provided that, “in any trial in any court the party accused shall be allowed * * * a speedy public trial by an impartial jury of the county or district in which die offense is alleged to have been committed.” This language of the Constitution is clear and imperative, and it is beyond the power of the courts to abridge or impair the right to a trial by jury, thus clearly, and expressly given. The right may be waived by the accused (Dillingham v. State, 5 Ohio St., 280), but it can not be taken from him by the court. Can it be then, in view of this constitutional guaranty, that in a criminal prosecution under a statute which makes it a condition precedent to the right of the justice to hear and determine the particular cause that the accused shall waive his right to a trial by jury, that the mere silence of the accused, or his failure to make demand for a jury, shall be held to amount to the waiver of such. right and to a consent upon his part to be tried by the justice? We think not. Waiver of such right by act of the party is not to be assumed unless his act clearly and necessarily involves such waiver (Hanoff v. State, 37 Ohio St., 187). While under above Section 3718a, the waiver of a jury by the accused is not, as under Section 7147, Revised Statutes, required to be “in a writing subscribed by. him and filed before or during the examination,” and may therefore be orally made, or perhaps the right of the accused be concluded by his acts or conduct, yet the defendant in a criminal case is not to be deprived of his right to a trial by jury upon a mere implied or constructive waiver of such right, but his intention to waive a jury must clearly and affirmatively appear and never be left to doubtful implication. In the case of United States v. Rathbone et al., 2 Paine, 578, Mr. Justice Thompson, after stating it as a proposition too clear to require argument or authority in support of it, that the right of trial by jury secured by the Constitution of the United States is a privilege with which the parties may dispense' if they choose, adds, “that whenever a party is concluded by his own act, and held to have waived any right or privilege, such act should not be left doubtful, but should plainly and explicitly appear. Every reasonable presumption should be made against the waiver, especially when it relates to a right or privilege deemed so valuable as to be secured by the Constitution.” The rule that waiver of the right to trial by jury must be by affirmative act or declaration, and not be left to mere implication, finds additional support in the following cases and authorities: Ward v. People, 30 Mich., 116; People v. Mallon, 39 How. Pr., 454; Hodges v. Easton, 106 U. S., 408; State v. Van Matre, 49 Mo., 268; Smith et al. v. Pollock, 2 Cal., 92; Am. & Eng. Ency. of Law, Vol. 17, p. 1099; Ency. of Pldg. & Prac., Vol. 12, p. 257; Cancemi v. People, 18 N. Y., 128; Brown v. State, 16 Ind., 496. The prosecution in this case being under a statute which requires the trial to be by jury, unless a trial by jury be waived, the accused was under no obligation to make formal demand for that mode of trial, but he had the right to assume that the court would, without demand therefor, accord to him the kind of trial guaranteed to him by statute. In the present case the record does not affirmatively show that the accused, Washington Simmons, waived his right to a jury trial, or consented that the complaint against him might be tried by the justice, but the record informs us only that: “Trial was had on the 22d day of December, 1903, the parties being present. The defendant did not demand a jury.” And the foregoing is the only entry or evidence in the case tending in any manner to prove or establish such waiver or consent. The justice could not acquire jurisdiction by the mere assertion of it, and a jury not having been waived, he was without authority or right to hear and render final judgment in this case; and the trial, conviction and sentence by him of the accused, Washington Simmons, without the intervention of a jury, was therefore not only improper and irregular, but was wholly without the sanction Of- the law. This conclusion is not in conflict with Dailey v. State, 4 Ohio St., 57, or Billigheimer v. State, 32 Ohio St., 435. Both of these cases having been prosecuted under statutes which conferred upon the court jurisdiction to try the complaint, if the defendant did not demand a jury trial, are clearly distinguishable from' the case at bar. In Dailey v. State, supra, proceedings were commenced against John Dailey, by information filed in the Probate Court of Lucas County, charging him with selling intoxicating liquors contrary to the provisions of an act to provide against the evils resulting from the sale of intoxicating liquors, passed May 1, 1854. The probate act, passed March 14, 1853, “Defining the jurisdiction and regulating the practice of probate courts,” was then in force, and said áct conferred upon the probate court jurisdiction to hear such complaint or information and prescribed the mode of trial, Section 42 of said probate act providing that: “Upon a plea other than a plea of guilty, if the defendant do not demand a trial by jury, the probate judge shall proceed to try the issue.” It will be observed that the language of this section is essentially different from the language employed in Section 3718a, under which the present prosecution was instituted. Under the former section the probate court shall try the cause, “if the defendant does not 'demand a jury;” under the latter the court can not try the cause unless the defendant “waive a trial by jury.” In the one case, by the express terms of the statute, the mere silence of the accused, or the failure to assert his right, is sufficient to give the court jurisdiction to try the complaint; in the other the court is without right to hear and determine- the cause unless the defendant first waive his right to a trial by jury. Slocum v. Lessee of Swan et al., 4 Ohio St., 162. In Billigheimer v. State, supra, the prosectuion was upon an information filed in the police court of the city of Cincinnati, charging Billigheimer with a violation of the statute forbidding common labor on the first day of the week. Jurisdiction to hear such complaint was conferred upon the police judge by a statute (S. & C., Vol. 2, p. 1520) which provided: “The police judge shall have in all criminal cases, the powers and jurisdiction that are or may be in law vested in the justices of the peace of the county, in all respects whatsoever; * * * he shall have jurisdiction of all violations of the ordinances of the city, and of all cases of petit larceny and other inferior offenses which do not require an indictment or presentment of the grand jury, with power to hear and determine the same where a jury is not demanded in cases where it may be properly claimed.” So it will be seen that in each of the two cases above cited, by express provision of the statute, authority was conferred upon the court hearing the complaint to try and determine such complaint without the intervention of a jury, provided the accused did not demand a jury trial, and in neither of said cases was such demand made; Obviously, therefore, these cases are distinguishable from the case at bar; for in the present case no authority was given the justice to try the accused unless he should first waive the right of trial by jury — a right guaranteed to him -both by the Constitution and the statute — and no such waiver appears in this case. From these considerations it follows that the judgment of the circuit court affirming the judgment of the court of common pleas and of the justice of the peace was erroneous, and must therefore be reversed.

Judgment reversed.

Shauck, C. J., Price, Summers, Spear and Davis, JJ., concur.