author: Price, J.

text:
    The State National Bank v. Esterly, Receiver.

      Insolvent debtor—Property in hands of receiver—Creditor with collaterals to secure claim—Receives only dividends on debt— After deducting proceeds of security—Though claim was allowed in full.

    Where the property of an insolvent debtor, by order of court, is-placed in the hands of a receiver to be administered upon for the payment of the insolvent’s debts, a creditor who holds col-laterals taken to secure his claim, and upon which he has-realized before a dividend is declared, is entitled to a dividend on only so much of his debt as remains after deducting the proceeds of the collaterals; and this sum may be ascertained at the time the dividend is declared, although the claim had formerly been proven and allowed for the full amount.
    (No. 8103
    Decided October 13, 1903.)
    Error to tbe Circuit Court of Columbiana county.
    The plaintiff in- error commenced an action in the-court of common pleas of Columbiana county against tbe defendant in error, wbo was, and is, receiver of the insolvent firm of J. Esterly & Co., to compel the allowance of dividends on certain notes owned by plaintiff in error, upon which said insolvent firm were liable as indorsers. One of said notes is dated August 1, 1896, and calls for the payment .of $5,500 four months after date, with eight per cent, interest per annum after maturity, and signed by “Columbiana Pump & Mc’h Co.” The other note is dated October 24, 1896, and calls for $3,132.70 payable four months after date, with eight per cent, interest after due until paid. This note is signed by “The Ohio Lumber & Mining Co.” It was stipulated in each note that if the interest was not paid when due, the same should. be added to the principal, and the. aggregate should draw interest at same rate until paid. When J. Esterly & Co. indorsed and transferred said notes to the-bank, it also transferred collaterals to secure their indorsements, from which collaterals the bank realized such amounts, that if applied, materially reduce the claims against indorsers. Inasmuch as the answer-of the receiver admits all the facts alleged in the petition, except their legal effect, the petition is here copied, omitting the captioh:
    “The plaintiff says it is a national bank, organized and doing business under the laws of the United. States.
    “That the defendant, Aaron Esterly, is receiver of J.. Esterly & Co., having the powers of such receivers in. the state of Ohio.
    “For its first cause of action against the defendant,, plaintiff says that on May 11, 1898, being the owner-of claim against J. Esterly & Co., based on a promissory note, of which a copy, with all indorsements thereon, is hereto attached, marked ‘Exhibit- A,’ and made-a part hereof, it presented the claim on said day, May-11, 1898, to said Aaron Esterly as such receiver,- for allowance against the said estate of which he was receiver, and thereupon on said date the claim was allowed by indorsement thereon as follows: ‘May 11,, 1898. Allowed subject to distribution. Aaron Esterly as surviving receiver of J. Esterly & Co., bankers.’
    “That said J. Esterly & Co. were, and still are, liable -on said note as indorsers thereon. Said note bears, date August 1,1896, is due in four months from date,, and draws interest after maturity at eight per cent.
    “That at the time of the presentation of said claim, for allowance, there was due thereon to the plaintiff from J. Esterly & Co. and said receiver, the sum of •$1,187.48. That afterwards, as appears by indorsement on said note, and on April 22, 1901, there was paid thereon the sum of $834.73, being realized from makers of note and assignee of makers of same. After •deducting such payment and computing interest according to law, there was due on said note June 1, 1901, the sum of ten hundred eighty-nine dollars and thirty cents ($1,089.30), which amount still remains due from the estate of J. Esterly to the plaintiff, and remains wholly unpaid.
    “That afterwards and on or about May 30,1901, the said Aaron Esterly, receiver, informed the plaintiff that a dividend of about thirty (30) per cent, was to be made by him as receiver to the various creditors; that he proposed to compute such dividend upon the balance at present owing, exclusive of interest, instead ■of computing upon the amount allowed, as aforesaid. To this method of computation plaintiff objected, and thereupon said Aaron Esterly, through his attorney, W. Gf. Wells, notified the plaintiff that the claim was wholly disallowed and rejected, and that the plaintiff would be obliged to bripg suit and have the question settled in court.
    “The plaintiff says, that no amount has been paid •on said claim by the receiver, but all amounts paid thereon have been realized from the collaterals held by the plaintiff for the payment of said note.
    “The plaintiff further says, that the dividend should be computed on the amount owing at the time of the insolvency of said bank and the appointment of the receiver therein, viz.: December 8, 1896, and that at that time the entire principal was due on said note; if interest is added to other claims in the computa.tion, then interest should he added to the claim of the plaintiff before computing the dividend.
    “The plaintiff further says that the said receiver had no right to disallow the plaintiff’s claim because ■of the dispute in the mode of computing the dividend, nnd his action therein was and is illegal and void.
    “Second cause of action: Making the allegations herein preceding the first cause of action a part of the second cause of action the same as if herein repeated, the plaintiff says, for its second cause of action against the defendant:
    “That on February 24, 1897, being the owner of a promissory note, of which a copy, with all indorsements thereon, is hereto attached, marked ‘Exhibit B,’ and made a part hereof, the plaintiff duly presented the same for allowance to the defendant, and his then co-receiver, Josiah Rohrbaugh, and the same was thereupon duly allowed, in writing, as a valid claim against said estate, for the full amount of said note, to-wit: three thousand one hundred thirty-twp dollars and seventy cents ($3,132.70). Said note bears date October 24, 1896, is due four months after date, and draws interest after maturity at the rate of eight per cent, per annum. That said J. Esterly & Co. are liable on said note as indorsers. That said note had been properly presented and protested for non-payment when the same became due.
    “That on said claim, after such allowance, the plaintiff realized from collaterals held for the payment thereof, payments as follows: July 16, 1897,' $1,-579.22; May 25, 1898, $363.08; July 10, 1899, $60.60; April 29,1901, $84.01; leaving a balance now due with interest computed to June 1,1901, of $1,676.58.
    “The plaintiff says, that after the said allowance of said claim, and on or about May 30, 1901, the defendant, desiring to pay a dividend on claims against the estate of J. Esterly & Co., notified the plaintiff that such dividend would be computed on the balance now owing, exclusive of interest, instead of on the amount owing at the time said claim was allowed; and the plaintiff, having refused to agree to accept the dividend on that basis, the defendant then, through his attorney, wholly disallowed the claim, and notified the plaintiff that it would have to bring a suit to have the question determined in court.
    “The plaintiff says, that no amount has been paid on said claim by the receiver, but all amounts paid thereon have been realized from the collaterals held by the plaintiff for the payment of said note.
    “The plaintiff further says, that the dividend should be computed on the amount owing at the time said! claim was allowed, and if interest is added to other claims in the computation, then interest should be added to the claim of the plaintiff before computing the dividend.
    “The plaintiff further says, that the said receiver had no right to disallow the plaintiff’s claim, because of the dispute in the mode of computing the dividend, and his action therein was and is illegal and void.
    “Wherefore plaintiff prays that the defendant be ordered to treat its claims as valid and subsisting claims under the former allowance thereof; that he be ordered to compute the dividends on the amount owing at the time of the declaration of insolvency of said bank, and the appointment of the receiver therein, to-wit: December 8, 1896; and if interest is added to other claims before the computation of dividends, then to add interest to plaintiff’s claim; and the plaintiff prays for such further order in the premises as may fully protect its rights in law and equity against the defendant.
    “J. A. Martin and
    “Brewer, Cook & McGowan,
    “Attorneys for plaintiff.”
    The following is the answer of the receiver:
    “Now comes Aaron Esterly, as receiver of the estate ■of J. Esterly & Co., and.the defendant herein, and for answer admits all the allegations of fact in the plaintiff’s petition; "hut denies that said claims should be allowed by the said receiver for a greater amount than which amount now remains unpaid on said notes.
    “W. G. Wells,
    “Attorney for defendant.”
    The pleadings presenting purely questions of law, the court of common pleas found against the plaintiff hank as to the basis upon which dividends should be ■computed. It appealed from the judgment and order of that court, to the circuit court, where the cause was heard and submitted on the pleadings. The circuit court made the following findings and order:
    “This cause coming on for hearing on this day was submitted to the court on the pleadings, and the court being fully advised of the issue raised by said pleadings, and the questions of law involved, do, upon the allegations made in the answer, find that all the payments made upon the two notes-described in the petition, subsequent to the presentation and allowance of said claims by the receiver, and subsequent to the date of the insolvency of said J. Esterly & Co., and the appointment of the receiver therein, to-wit: December 8, 1896, should be credited upon said notes, and that the balance due after crediting said payments is the basis upon which the plaintiff should receive dividends pro rata with the other general creditors of said insolvent bank. That the balance due upon said notes, should be allowed as a valid claim against the estate of J. Esterly & Co., and that said balance is the sum of $1,596.09, and should be allowed as of the date of May 11, 1898. Wherefore, the court finds that the-balance due on said notes on May 11, 1898, to be the-sum of $1,596.09, that the same is a valid claim against-Aaron Esterly, receiver of J. Esterly & Co., and it is hereby ordered adjudged and decreed that said claim be and is hereby allowed; that the defendant be ordered to allow said claim and that said sum of $1,-596.09 be the basis upon which dividends shall be paid, plaintiff in common with other general creditors and that said allowance be made as of the date of May: 11, 1898.”
    The court ordered the costs paid out of the funds, in his hands as receiver. The plaintiff in error filed a motion for new trial, which was overruled, and error-is prosecuted here to reverse the findings and order-as to the basis for computing the dividends.

      Mr. J. A. Martin and Messrs. Brewer, Cook & McGowan, for plaintiff in error, cited and commented, upon the following authorities:
    Daniel on Neg. Inst. (3 ed.), secs. 668, 669, 671;: Story on Notes, sec. 460; Cummings v. Kent, 44 Ohio St., 92; Farr v. Ricker, 46 Ohio St., 265; Miller’s Appeal, 35 Pa. St., 481, and cited with approval in Merrill v. Bank, 173 U. S., 131; Keim’s Appeal, 3 Cas. R., 42; 3 Am. & Eng. Ency. Law (2 ed.), 141; People v. Remington, 121 N. Y., 328; Furness v. Bank, 35 N. E. Rep., 624; Story’s Eq. Jur., sec. 524; In re Bates v. Paddock, 118 Ill., 524; 59 Am. Rep., 383; West v. Bank, 19 Vt., 403; Moses v. Ranlet, 2 N. H., 488; Findlay

      v. Hosmer, 2 Conn., 350; Logan v. Anderson, 18 B. Mon. (Ky.), 114; Matter of Ives, 25 Abb. N. C. (N. Y. Supt. Ct.), 63; Bank v. Haug, 82 Mich., 607; Bank v. Byles, 67 Mich., 296; Morris v. Okoine, 22 Pa. St., 441; Patten’s Appeal, 45 Pa. St., 151; 84 Am. Dec., 479; Brough’s Estate, 71 Pa. St., 460; Graff’s Appeal, 79 Pa. St., 146; Keim’s Appeal, 27 Pa. St., 42; Furness v. Bank, 147 Ill., 570; Levy v. Bank, 57 Ill. App., 143; Kauffman v. Hudson, 65 Tex., 716; Phosphate Co. v. Law (S. C.), 23 S. E. Rep., 955; Greene v. Bank, 18 R. I., 779; Allen v. Danielson, 15 R. I., 480; Boyer’s Appeal, 163 Pa., 143; Bank v. Armstrong, 16 U. S. App., 465; Merrill, Receiver, v. Bank, 173 U. S., 131; 43 Law. Ed., 460; Lewis v. United States, 92 U. S., 623; Aldrich v. Bank, 176 U. S., 618; Cromwell v. Herron, 5 Circ. Dec., 196; 11 C. C. R., 448; sec. 5057, U. S. Stat.; Bump on Bankruptcy (11 ed.), 495-528; Doremus v. O’Harra, 1 Ohio St., 50; Robinson v. Boyd, 60 Ohio St., 57; Story’s Eq. Jur. (13 ed.), 633; White &. T., vol. 2, pt. 1 (4 Am. ed.), 258-322; secs. 5658, 5662, 5667, 5668, 5669, 6352, 6354, 6355, 6356, Rey. Stat.; Story’s Eq. Jur., secs. 633, 635, 640, 642, 643; Miller’s Appeal, 82 Pa. St., 113; In re Meyer, 78 Wis., 615; 48 N. W. Rep., 55; Bank v. Porter et al., 122 Mass., 308; Bank v. Byles et al., 34 N. W. Rep., 702; Bates’ Assignee v. Paddock, 118 Ill., 524; 9 N. E. Rep., 257; Morrison v. Kurtz, 15 Ill., 193; Sweet v. Redhead, 76 Ill., 374; Evertson v. Booth et al., 6 N. Y. Com. Law Rep., 484; Blake et al. v. Ames et al., 8 Allen (Mass.), 318; Allen v. Danielson et al. (R. I.), 8 Atl. Rep., 705; West v. Bank, 19 Vt., 403; Bank v. Patterson, 78 Ky., 291; Brown v. Bank, 79 N. C., 244; Walker v. Baxter, 26 Vt., 710; Sheldon on Subrogation, sec. 182; Jones, on Pledges, sec. 587; Eng. Cases in Chancery, Kellock’s Case, L. R. 3 Ch., 769; Sohier v. Loring et al., 6 Cush. (Mass.), 538; Ragsdale v. Bank (S. C.), 23 S. E. Rep., 947; Jelke v. Stallo, 1 Dec., 43; 1 N. P., 29; Lloyd, Trustee, v. Bank, 11 Re., 851; 30 Bull., 165 (approved without report, 54 Ohio St., 687).

      Mr. W. G. Wells, for defendant in error, cited and commented upon the following authorities:
    1 Pomeroy Eq., sec. 407; Armory v. Francis, 16 Mass., 308; Merrill v. Bank, 173 U. S., 131; Farnum v. Boutelle, 13 Met., 159; Bank v. Bank, 30 Atl. Rep. (Md.), 913; Frasch Estate, In re, 31 Pac. Rep. (Wash.), 755; Bank v. Branch, 45 Pac. Rep. (Kas.), 88; Erle v. Lane, 44 Pac. Rep. (Col.), 591; Wheat v. Dingle, 11 S. E. Rep. (S. C.), 394; Haskill v. Sevier, 25 Ark., 152; McCune’s Estate, In re, 76 Mo., 200; Burrell Assignments, sec. 440; Neufelder v. Insurance Co., 39 Pac. Rep. (Wash.), 110; Jamison v. Alder, 28 S. W. Rep. (Ark.), 35; Bank v. Lanahan, 7 Atl. Rep. (Md.), 615; Fay & Co. v. Jenks, 44 N. W. Rep. (Mich.), 378; Miller’s Appeal, 35 Pa. St., 481; Bank v. Armstrong, 8 C. C. A., 155; 59 Fed. Rep., 372; Barrett v. Reed, Wright, 700; Searle v. Brumback, 2 Dec., 653; In the Assignment of Spence, 4 N. P., 439; 7 N. P., 624; Haverhill Loan & Fund Assn. v. Gronin, 4 Allen. (Mass.), 141; Bell v. Fleming, 12 N. J. Eq., 13; Vanderveer v. Conover, 16 N. J. Law, 491; Whittaker v. Bank, 29 Atl. Rep., 203; 52 N. J. Eq., 400; Wurtz v. Hart, 13 Ia., 515; Bank v. Bank, 80 Md., 371; Creecy v. Pearce, 69 N. C., 67; Moore v. Dunn, 92 N. C., 63; Winton v. Eldridge, 3 Head. (Tenn.), 361; Fields v. Wheatley, 1 Sneed (Tenn.), 351; Gwynne v. Estes, 82 Tenn., 662; Bank v. Woodward, 137 Mass., 412; Hill v. Townley, 45 Minn., 167; Bank v. Margy, 11 Rob. (La.), 209; LaPlante v. Convery, 98 Ind., 499; 2 Woerner’s Adm., sec. 408; 1 Rockel’s Prob. Prac., sec. 974; 2 Rockel’s Prob. Prac., sec. 1631; Philadelphia Warehouse Co. v. Pipe Works, 18 So. Rep. (Ala.), 43; Doolittle v. Smith, 73 N. W. Rep. (Iowa), 867; Security Co. v. Richmond, 58 Kas., 414; 49 Pac. Rep., 521; Wallace v. McConnel, 13 Pet., 136; Newcomb v. Raynor, 21 Wend., 108; Mason v. Hull, 55 Ohio St., 256; sec. 5236, U. S. Stat.; 2 Daniel’s Neg. Inst. (3 ed.), secs. 1303, 1307, 1327; secs. 6346, 6352, 6354, 6356, Ohio Rev. Stat.
   Price, J.

We learn from the averments of the petition filed in the lower court, by plaintiff in error, that at some date prior to the appointment of a receiver for the firm of J. Esterly & Co., it had become liable to the plaintiff bank, as indorsers upon two promissory notes mentioned in the foregoing statement of this case, and that the liability of the firm had become fixed when the notes -were properly presented to the makers thereof, and protested for nonpayment. It .also appears, that to, secure the bank in .accepting .the notes bearing .such indorsements, J. Esterly & Co., at the time of their,.transfer, delivered t.o it certain valuable ■collaterals .as. security for their contracts of indorsement, and from which collaterals, after the receiver was appointed, the bank realized from, time to time in ■substantial sums, which if applied as credits on the obligations of indorsement when collected, would materially reduce the obligations before the receiver was ready to pay a dividend.

The receiver was appointed on the eighth day of December, 1896, about the time the larger of the two notes became due. On or about the eleventh day of May, 1898, the bank presented its claims to receiver for allowance, and they were allowed “subject to distribution.” The amounts which the bank realized on the collaterals, were collected at different times after the appointment of the receiver.

On or about the thirtieth of May, 1901, the receiver notified the bank that he was ready to make a dividend to the various creditors, and that he would compute such dividend upon the balance then owing, exclusive of interest, and not upon the full amount of the indorsements of the insolvent firm. On refusal to accept a dividend on the proposed basis, the bank brought its action in the court below to have its rights determined. It failed in its contention in the lower courts, and its counsel thus formulates the inquiry in this court: “Shall dividends be computed: (1) Upon the amount due at the date of the appointment of receiver? or, (2) Upon the amount due at the time the claim is presented and allowed? or, (3) Upon the balance unpaid at the time of settlement?”

This case has been considered Avith two others involving similar questions, which cases will be stated at the close of this opinion. Learned counsel representing the parties in each case, have been heard orally, and they have submitted briefs containing careful discussions of the points involved, wherein are cited a. long array of cases adjudicated in the English and American courts, the latter embracing both state and federal. Numerous text-writers have been drawn upon by each side of the controversy, until we are constrained to agree Avith counsel, that the authorities are about equally divided, both as to numbers and their apparent weight. Their reconciliation is impossible, and a careful review of them here would be .fruitless labor.

Counsel for plaintiff in error in this case, and to some extent, counsel in the other cases herewith decided, argue their causes as if the dispute arose in the settlement of an estate under a deed of assignment for ' the benefit of creditors, and lay down the proposition to govern this case, that: “By the deed of assignment, the equitable ownership of all the assigned property passed to the creditors. They became joint proprietors and each creditor owned such a proportion or part of the whole as the debt due him was of the aggregate of the debts. The extent of this interest was fixed by the deed of trust * * This proposition is found in many of the authorities cited in behalf of the bank, and indeed it seems to be the favorite reason for the holdings made.' Notably this is true in Miller’s Appeal, 35 Pa. St., 481; Merrill v. Bank, 173 U. 6., 131; and Bank v. Armstrong, 59 Fed. Rep., 372, cited for plaintiff in error.

If for any reason, we are required to consider this and its kindred cases, under the law governing the mode of administering estates under our assignment laws—which we do not concede—we are of opinion the proposition is entirely too broad, and is subject to important limitations. In cases of assignment under our insolvent laws, the legal title of the property of the assignor passes to the assignee, in trust for the benefit of, not some, but all creditors of the assignor. The unsecured creditor is as fully represented- by that title as is he who holds collateral security for his claims, and if he becomes the equitable owner of such “a pro-. portional part of the whole as the debt due him is of the aggregate of the debts,” his equitable title is not weakened nor his equitable joint share decreased by the fact that another creditor has security for all or part of his claim. But to allow a dividend to the secured creditor on the basis of his entire claim unreduced by collected collaterals, would diminish the share of the general or unsecured creditor in the estate of the insolvent debtor. In other words, to pay a dividend on more than is actually due on a secured claim will unjustly reduce the general fund in which the unsecured creditor is entitled to share.

But we do not think the interest or title of creditors in the assigned property is the determining factor. The deed of assignment, under our statute, must be general and inure to the benefit of all creditors, and their rights are to be worked out through the assignee, as they appear from time to time during the' administration of the trust. In such case the creditors are not purchasers of the estate in proportion to their claims, for investigation and proper defense against the claims of one or more, may modify or extinguish their interest in the estate, so that whatever title, equitable Or otherwise, a creditor may have in the assigned property, it is at best but contingent, and subject to adjudication with other demands held against the debtor.

As said by Owen, C. J., in Mannix, Assignee, v. Purcell et al., 46 Ohio St., 135: “No higher or better right or title to any of this property passed to the assignee than the assignor held. His creditors acquired no new ■rights or remedies in or against it by force of the assignment. The assignee simply represents them and their rights, which he has undertaken to enforce by the plain processes appointed by statute. They do not, in any sense, stand to the assigned property in the relation of purchasers. The beneficiaries of the property which the assignee is now seeking to subject to the payment of the assignor’s debts, are free to assert against the latter every right and claim which, before the assignment, they could have asserted against the assignor.”

The equitable ownership of a creditor in the assigned property, if any there be, is contingent merely, because its force and validity depend upon the subsequent events. Such creditor must present his claim to the assignee for allowance within a certain time; if rejected he must sue within a specified time. Default in either loses his right to share in the estate, unless saved by other provisions of our law. If he presents his claim, before it is allowed, or any payments made thereon, “he must make and file an affidavit setting forth that the said claim is just and lawful, and the consideration thereof, and what, if any, setoffs or counterclaims exist thereto; what collateral or personal security, if any, the claimant holds for the same, or that he has no security whatever; and the assignee or trustee, or any creditor shall have the right to examine the claimant under oath touching any such collateral ot other security, or any other matter relating to said claim, within such time and under such regulations as shall be prescribed by the probate judge * * gee section 6354, Revised Statutes of Ohio.

The making and filing of this affidavit is not optional with the creditor, but it is essential to the proper allowance of his claim, and it proceeds upon the evident policy of the law, that the affidavit will truthfully disclose both the nature of the claim and its condition with reference not only to payments made, but as to what admitted setoffs or counterclaims exist whereby the creditor’s demand may be in part or wholly satisfied. This procedure is against the theory, that by assignment, a creditor acquires a definite ownership in the assigned property, that shall measure his rights to dividends in the further administration of the estate. It further argues, that its purpose is to give the 'assignee, and the probate court, on the report of the assignee, full knowledge of the condition of each claim, in order that rights of the general, as well as the secured, creditors may be determined. If valid offsets then exist, if good collaterals are held from which collections are being made, they are to be so applied, that the general creditors may receive their equitable portion of the estate. And we think that this information as to the condition of the claims is to be furnished so that a dividend may be made on equitable principles, because whatever amount a secured creditor receives beyond what is actually due him after application of money realized from collaterals, or after allowance of admitted offsets, must be taken from the general fund and therefore from the general creditor. Therefore, it seems to us that, we should hold and answer the third inquiry of counsel, by saying that the dividend should be computed “upon the balance unpaid at the time of the settlement.”

The result to be thus reached is the result that would be reached in an action at law between the creditor and the debtor, because the latter eould have the court or jury fix the true amount he owes the creditor, after deducting valid setoffs and counterclaims, and the balance would be the real debt.

We do not now see, why the standing in the probate court in an assignment case should be better than in the action at law, because the rights of the creditors in reference to such claims as are here involved, can be fully worked out in administration of the assigned estate. When the estate is .ready to warrant a dividend, and it is known from the proof of claim that set-offs or collaterals existed when the claim was allowed, the amount of the admitted setoff, or what has been paid from the collaterals, should be deducted, and the balance due is the true basis for a dividend.

We have devoted time to this extent in discussing the rule in assignment cases, because its discussion pervades so largely the briefs of counsel, wherein they liken the cases at bar to assignment cases. But the analogy is not complete. In cases under review, receivers were appointed, and it is not open to debate, that title to the debtor’s property does not vest in the receiver, but remains in the debtor, except where the receiver is appointed in special cases, as in proceedings to dissolve a corporation, etc., subject to the possession and control of such receiver, until he sells the property under the direction of the court, when the title passes to the purchaser. Creditors who had no lien or title prior to the appointment of the receiver, gained neither in any sense. or degree, through the receivership. Hence it is that property in the hands of a receiver is considered as in the court and under its control, to be administered so as best to subserve the ends of equity; and when the debtor’s estate becomes assets in his hands, the general creditors acquire rights which the court will protect by placing all the creditors on an equality as far as possible. This is the rule stated in Bank v. Bank, 3 N. J. Eq., 266, and many other cases.

Therefore the argument , of an equitable ownership by the creditor in assigned property can have no application whatever here. But if we are right in our views as to the rights of creditors in assigned property, it seems quite clear that the same rule should be enforced in settlements of estates placed in the hands of a receiver.

All sums realized on the collaterals in this case were collected after the appointment of the receiver. Part was collected by the bank before, and the remainder after, the proving and allowance of its claims; but whether before or after allowance, we think is immaterial..

When the debtor’s property has been reduced to-money and under the direction of the court, the receiver is ready to make a dividend, there is nothing inequitable in crediting these amounts as payments pro tanto. The law would compel such an- application if it was resisted, because the amount due the creditor is his claim less what has been- paid for its liquidation, either directly or indirectly. When this is done, and not until then, do the secured and unsecured creditors stand on an equal footing. When that is done, the secured creditor has received the benefit of his security and is ready to claim a share in the general estate with the general creditors. Otherwise, as before stated, the secured creditor would hold the avails of his securities actually reducing his demand, and would also take from the general estate a portion Avhich belongs to the unsecured creditors.

This latter would be inequitable, Avhile the former rule would do even and exact justice between all parties.

To elaborate this doctrine, or quote from cases in which it is found, is not necessary. We think the principle is right and approve it as has been done in a long line of cases, and by the best of modern textAvriters.

We therefore hold that the circuit court did not err in its judgment, and the same is affirmed.

Judgment affirmed.

Burket, C. J., Spear and Davis, JJ., concur.

Shauck, J., dissents.


source: Caselaw Access Project

license: Public Domain

text:
    Buckingham, for Himself and Creditors of The Springfield Provision Co. v. The Springfield Building & Loan Association, and Miller, Receiver. and Buckingham v. The Springfield Building & Loan Association, and Miller, Receiver.
    (Nos. 8246 and 8247
    Decided October 13, 1903.)
    Syllabus same as in case of State National Bank v. Esterly, Receiver, supra.—Reporter.
    Error to tbe Circuit Court of Clark county.
    Tbe facts in case No. 8216, in substance, are as follows:
    Upon the twenty-first day of June, 1901, tbe same day that tbe receiver was appointed, a proceeding was brought by William L. Buckingham for tbe benefit of himself and all other creditors of tbe Springfield Provision Co., to assess and collect on the liability of tbe stockholders under tbe laws of Ohio. In this proceeding tbe Building & Loan Association, on tbe eighth of October, 1901, set up its claim. A referee was appointed to ascertain tbe creditors of tbe corporation, and on tbe fourteenth of April, 1902, reported to tbe court allowing the claim of tbe Building & Loan Association for flO,089.41, which report was confirmed and judgment was rendered against each of tbe stockholders for tbe full amount of their stock liability, and Oliver H. Miller was appointed receiver to collect and distribute the money to be paid by tbe stockholders pursuant to the judgment of the court. In July, 1902, said receiver collected a sufficient amount to pay a dividend of ten per cent, and, on the seventeenth day of November, was, by the court, ordered to pay a dividend of ten per cent, to all creditors exhibiting their claims, and, in- making such dividend, to pay the Building & Loan Association ten per cent, upon the balance of its claim as the same 'existed after the application of the proceeds of the sale of the mortgaged property, to-wit, on the sum of $2,-621.64, retaining $736.86, ten per cent, upon the ■amount so paid to the association, for the further order of the court.
    The question arises in case No. 8246 upon the distribution of this balance so reserved and upon the distribution of any future dividends from the stockholders’ funds, as to whether a dividend should be paid upon the amount of ther claim of the Building & Loan Association as it stood at the time of the filing of the petition, or upon the amount as it stands after the application of the proceeds of the mortgaged property.
    The question raised in No. 8247 is whether or not -a creditor of an insolvent corporation which is being settled in court, who has received a payment upon his ■claim from the sale by the receiver of securities held by such creditor has a right to prove and receive a dividend upon the entire amount of his claim as it stood before the application of the securities, or is he entitled to receive a dividend only upon the balance that may remain due after the application of his security to the reduction of his debt.
    The facts in case No. 8247 are in substance as follows:
    Oh June 21, 1901, Oliver H. Miller was appointed by the court of common pleas receiver of the Springfield Provision Co., a corporation existing under the laws of Ohio, and said receiver on that day took possession of the property of said corporation. Said corporation was insolvent and indebted to the Springfield Building & Loan Association in the sum of -$9,990.30, ¡secured by mortgage upon the real estate of the corporation. On August 27, 1901, said association answered, setting ,up its claim. There was a large dumber of other creditors of said corporation. The receiver, finder order of the court, sold the real estate upon which the association held its mortgage, to said .association, and on the tenth of June, 1902, paid the association the sum of $7,368.66, being the net proceeds of the mortgage sale, leaving a balance due the Building & Loan Association of $2,621.64. On July 16th, the receiver paid a ten per cent, dividend to the .general creditors of the Springfield Provision Co., paying to the Building & Loan Association ten per cent, on the balance due on its debt after the application of the proceeds of the mortgaged property, and retained for the further order of the court ten per cent, on the amount paid from the sale of the mortgaged property, being $736.86.
    The cross-petitioners herein are creditors of the •corporation. The question arises upon a proper distribution of the $736.86 and of any further dividends to be paid out of the general assets of the corporation, as to whether the association’s claim should receive a ■ dividend on the basis oi $9,990.30, as it originally stood, or upon $2,621.64, as it stood after the application of the proceeds of the mortgaged property.
    On these facts the court of common pleas held that the creditor of the insolvent corporation, the defendant in error, was entitled only to prove and receive dividends upon the balance of its claim after the application of the securities held by it, to-wit: the proceeds of the sale of the real estate covered by its mortgage. The circuit court, on appeal, held to the contrary ; that is, in substance, that the defendant in error was entitled to a dividend on the full amount of its claim without being reduced by application of the amount received from the security.
    . The cases are here on error to reverse the judgments-of the circuit court.

      Mr. Frank W. Geiger; Mr. Edwin 8. Houck and Mr. John L. Plummer, for plaintiff in error.

      Mr. M. T. Burnham and Messrs. Bowman & Bowman, for defendants in error.
   Price, J.

As stated in the principal case, counsel for the parties in these cases were heard orally in the-argument of The State National Bank v. Esterly, Receiver, just decided, and their briefs have been read and considered with the briefs in that case.

What we have said in Bank v. Esterly, Receiver, can well be applied to these cases, and further discussion of them is unnecessary.

-. The judgment of the circuit court in each case is reversed, and judgment is rendered in each case for-plaintiff in error.

Judgments reversed.

Burket, C. J., Spear and Davis, JJ., concur.

Shatjck, J., dissents.


author: Shatjck, J.

text:
    The Erie Railroad Co. et al. v. McCormick, Admx., etc.

      Omission of duty—Not cause of action, when—Duty of railway company in construction of bridge—Injury to employe by operating train—Knowledge of employe—Knowledge of employe’s peril imputable to company—Negligence—Master and servant.

    1. The omission of a duty is not the foundation of an action unless it results in injury to one for whose protection the duty is imposed.
    2. In the absence of a statute requiring it, and of evidence showing that it is usual, a railroad company is not required to construct its bridges so as to permit one to stand upon them in safety while a train is passing; and if such duty were imposed its omission would not be the-foundation of an action by an employe who, with full knowledge thereof, acquiesces in' the omission.
    3. In an action against a railroad company by one who, by his own fault is upon its track and in a place of danger, to recover for a personal injury caused by the failure of its employes operating one of its trains to exercise due care after knowledge of his peril, it is necessary to show actual knowledge imputable to the company. Railroad Co. v. Kassen, 49 Ohio St., 230, distinguished.
    (No. 8126
    Decided October 13, 1903.)
    Error to tlie Circuit Court of Summit county.
    Plaintiffs in error are lessee and lessor of a railway running through Akron. The defendant is administratrix of James Thomas McCormick who, on the twenty-fifth of December, 1897, while acting as track-walker for the lessee company, was struck by one of its trains while upon a bridge in the city of Akron, but near its eastern limit, receiving injuries from which he died in a few days. McCormick had for more than ten years been a track-walker on the portion of the road which included the bridge, and he crossed it, at least, twice daily during that service. On this occasion while on the bridge which, with its approaches, is 165 feet in length, ninety-five feet between abutments, he discovered a train approaching from the east, and attempted to escape by the west end of the bridge, had passed the-bridge, and had nearly succeeded in escaping from the approach when he was struck by the train; the track and ties were snowy and slippery: the speed of the train Avas about forty-five miles per hour. About two years later the administratrix began her action to recover for the next of kin of McCormick under the statute Avhich authorizes such recovery in cases where the deceased might have recovered for the injury had it not. proved fatal. In her petition she charged the company Avith negligence in the folloAving respects: (1) In so-constructing the bridge that one could not stand upon it while the train passed, and in not having planks between the ties. (2) That the speed of the train exceeded that limited by the ordinance of the city of Akron. (B) That no signal was given by the engineer for a public road crossing in the vicinity. (4) That the engineer, after discovering McCormick and the peril of his position, might have averted the injury by giving signals and checking the speed of the train, but wilfully and wantonly failed to take any precaution to that end. These averments were all denied by the answer, and the company alleged acquiescence by McCormick Avith full knoAvledge of all the conditions complained of, and alleged that the decedent failed to exercise due care for his own safety. Upon the trial the construction of the bridge Avas shown to be substantially as alleged in the petition; an ordinance of the city of Akron, limiting the speed of trains to six miles an hour, was introduced; and some witnesses who were interested in other matters testified that they heard no signals given for the road crossing, or-the bridge. No evidence was produced, by the plaintiff upon the original trial to show when the engineer first discovered McCormick’s peril, or that he discovered it at all. At the conclusion - of the plaintiff’s evidence the companies moved the court to direct a verdict in their favor, which motion the court overruled, and they excepted. Defendants introduced testimony to-show that track-walkers were required to look out for trains at all times, and that McCormick was at the time, alone, governing his own movements without, any direction or control whatever from any superior of the company, but exercising his own discretion as to the performance of his duties, under the general rules of the company. This evidence also tended to-show that McCormick, on discovering the approach of the train, might have avoided injury by stepping upon an abutment, or have escaped with but slight injury by jumping from the approach which he had reached before he was struck. The companies also put. the engineer and fireman upon the stand and, by the-testimony of the former, it was shown that he first discovered McCormick when he was too near him to stop the train; that owing to the condition of the windows, from snow upon the window of his cab, resulting from, snow upon the ground moved by the passing of the-train and snow which had but recently fallen, and the smoke of the engine, he could see him but indistinctly, but supposed that he was on the track beyond the-bridge; that he, nevertheless, immediately sounded the stock alarm, applied the brakes and, discovering that from the condition .of the tracks the brakes were not. working well, he applied sand, but, to use his own comprehensive phrase, he exhausted all his resources to stop the train; that it was impossible to stop the train. before reaching McCormick’s position; that immedi.ately after giving the signal and applying the brakes the boiler and forward portion of the engine interposed between him and McCormick; but that he/believed, owing to the slacking of the speed of the train, .and McCormick’s néarness to a place of safety, he had ■escaped, and had no knowledge to the contrary until, .as they were approaching the station in Akron, the ■fireman came around to his side of the engine and informed him that they had hit the man at the bridge. In its instructions to the jury the court called the attention of the jury to all of the charges of negligence ■alleged in the petition, directed them to inquire con■cerning them, and to return a verdict for the plaintiff if any of the charges of negligence were sustained by the evidence, unless they should find the right of action defeated by McCormick’s contributory negligence. Upon the subject of the failure to exercise care after the discovery of McCormick’s peril the court charged the jury as follows:
    “If the decedent in this case was negligent in going upon the track, and I will say bridge here, in the manner and •at the time he did, yet, if the engineer in charge of the train ought, by the exercise of ordinary ■care, to have seen the deceased in his perilous position, .and could, by the exercise of ordinary care, have ^stopped or checked the speed of the train so as to avoid the' collision, and failed to do so, it was negligence for which the company is liable,-notwithstanding the negligence of the deceased in going upon the track and bridge.”
    The jury returned a verdict for the plaintiff; a motion for a new trial was overruled; and the judgment following the verdict was affirmed by the circuit •court

      Messrs. Tibbals & Frank, for plaintiffs in error, cited and commented upon the following authorities:

      Coal Co. v. Norman, 49 Ohio St., 598; Hesse v. Railway Co., 58 Ohio St., 167; Pennsylvania Co. v. McCurdy, 66 Ohio St., 118; Railway Co. v. Workman, Admr., 66 Ohio St., 509; Baker v. Pendergast, 32 Ohio St., 494; 21 Am. & Eng. Ency. Law, 481; Railroad Co. v. Schade, 8 Circ. Dec., 316; 15 C. C. R., 424 (affirmed by Supreme Court without report, Railway Co. v. Schade, 57 Ohio St., 650); Railway Co. v. Ehlert, 10 Circ. Dec., 443; 19 C. C. R., 177 (reversed by Supreme Court, 63 Ohio St., 320); Railway Co. v. Kistler, 66 Ohio St., 326; Harmon v. State, 66 Ohio St., 249; Railroad Co. v. Margrat, 51 Ohio St., 143; Meek v. Pennsylvania Co., 38 Ohio St., 632; Hayes v. Smith, 62 Ohio St., 161; Shaefler v. Sandusky (City), 33 Ohio St., 246; Railroad Co. v. Depew, 40 Ohio St., 121; Railway Co. v. Leech, 41 Ohio St., 388; Railway Co. v. Skiles, 64 Ohio St., 458; State v. Gardner, 58 Ohio St., 599; Insurance Co. v. Sale, 121 Fed. Rep., 664; Street Railway Co. v. Stallmann, 22 Ohio St., 1; Baltser v. Railway Co., 83 Wis., 459; Berg v. Milwaukee, 83 Wis., 599; secs. 3336, 3337, 3365-22, Rev. Stat.; O'Keefe v. Railway Co., 32 Ia., 467; Rider v. Railway Co., 63 N. E. Rep., 836; Yarnell v. Railway Co., 75 Mo., 575; Denman v. Railway Co., 26 Minn., 357; Button v. Railway Co., 18 N. Y., 248; Gilbert v. Railway Co., Bull. (Jan. 19, 1903), 13 O. F. D., 475; Coal Co. v. Rosser, 53 Ohio St., 12; State v. Ferris, 53 Ohio St., 314; State v. Gravett, 65 Ohio St., 289; Williams v. Donough, 65 Ohio St., 499; Harmon v. State, 66 Ohio St., 249; Cleveland v. Construction Co., 67 Ohio St., 197; Palmer v. Tingle, 55 Ohio St. 423; State v. Gardner, 58 Ohio St., 599; Railway Co. v. Howe, 52 Fed. Rep., 362; Railway Co. v. Kane, 118 Fed. Rep., 223; Ham, Admr., v. Railway Co., 13-23 O. C. C., 496.

      Mr. E. F. Voris and Mr. A. J. Wilhelm, for defendant in error, cited and commented upon the following authorities:

      Kassen Case, 49 Ohio St., 230; Snyder Case, 60 Ohio St., 487; Schade Case, 8 Circ. Dec., 316; 15 C. C. R., 424 (affirmed 57 Ohio St., 650); Meek v. Penna. Co., 38 Ohio St., 632; Railway Co. v. Workman, 66 Ohio St., 511; The W. B. & G. Co. v. Jacobs, 58 Ohio St., 77; Froelich v. Railway Co., 24 O. C. C., 359; Roe v. Railway Co., 13 Dec., 260; Railroad Co. v. Waterworth, 11 Circ. Dec., 621; 21 C. C. R., 495; sec. 3365-22, Rev. Stat.; Railroad Co. v. Margrat, 51 Ohio St., 130; Railway Co. v. Erick, 51 Ohio St., 146; Penna. Co. v. McCann, 54 Ohio St., 10; Hesse v. Railway Co., 58 Ohio St., 167; Snyder v. Railway Co., 60 Ohio St., 487; Railway Co. v. Hedges, 63 Ohio St., 339; Toledo (City) v. Russell, 64 Ohio St., 611; Railway Co. v. Lamphere, 4 Circ. Dec., 26; 9 C. C. R., 263; McCann v. Penna. Co., 6 Circ. Dec., 610; 10 C. C. R., 150; Railway Co. v. Blair, 5 Circ. Dec., 366; 11 C. C. R., 586; Railway Co. v. Sutherland, 4 Circ. Dec., 115; 12 C. C. R., 313; Railway Co. v. Mulcahy, 9 Circ. Dec., 82; 16 C. C. R., 204; Railway Co. v. Pero, 12 Circ. Dec., 25; 22 C. C. R., 130; Hill v. Railway Co., 12 Circ. Dec., 241; 22 C. C. R., 291; Pierce v. Van Dusen, 9 O. F. D., 419; 78 Fed. Rep., 693 (a decision squarely in point); Railway Co. v. Mackey, 127 U. S., 205 (32 Lawyer’s ed. 107); State v. Hogan, 63 Ohio St., 202; Lehman v. McBride, 15 Ohio St., 573; State v. Kelson, 52 Ohio St., 88; Adler v. Whitbeck, 44 Ohio St., 539; Senior v. Ratterman, 44 Ohio St., 661; State v. Turnpike Co., 37 Ohio St., 481; Marmet v. State, 45 Ohio St., 63; Driggs v. State, 52 Ohio St., 37; Heck v. State, 44 Ohio St., 536.
   Shatjck, J.

Counsel for the administratrix now insist that the judgment may rest upon the allegation of the petition that the engineer did not use due care to avoid the injury to McCormick after discovering his peril, and the evidence adduced upon that point. By clear implication at least, it is now admitted that the judgment can stand upon no other ground. If' that view had been taken by counsel in the preparation of the petition, or by the court upon the trial, questions now before us would have been excluded- from the record. But allegations of negligence as to the construction of the bridge, the omission of signals at a neighboring road crossing, and of violation of the ordinance as to the speed of trains, were made in the petition, evidence was introduced to sustain them, and the court directed the jury to consider them as the foundation of their verdict. They appear, therefore, as grounds upon which the verdict and judgment were recovered; and if any one of them was improperly applied in the case the error cannot now be cured by admissions in the argument. It seems entirely clear that but for the allegations of the petition relating to a want of care by the engineer after the discovery of McCormick’s peril, the petition itself would have been bad upon general demurrer; and all of the other .allegations of the petition should have been omitted.

There is no statute requiring the construction of a railroad bridge in any other manner than that in which this bridge was constructed; certainly there is no common knowledge that different methods of construction prevail, nor was there any evidence to that effect. There was, therefore, shown no duty whatever resting upon the company to construct its bridge otherwise; and if there had been such duty it is entirely clear from the plaintiff’s own case that, with full knowledge of the condition acquired through ten years of service, he had acquiesced in that condition, and had thereby waived a right of action in consequence of it. Krause v. Morgan, 53 Ohio St., 26; Coal Co. v. Estievenard, 53 Ohio St., 44.

The petition and all the evidence having shown that McCormick was an employe of the company, engaged as a track-walker, there should have been no allegation in the petition as to the omission of signals for the neighboring road crossing, or of the violation of the ordinance regulating the speed of trains, because, by the fact of his relation to the company, it was made to appear that he was not within the classes of persons for whom such signals are required to be given, or for whose protection the speed of trains is regulated. The omission of a duty does not constitute the foundation of an action unless it results in injury to one for whose protection the duty is imposed. This would seem to be elementary, and it is sustained by the decided cases. Railroad Co. v. Depew, 40 Ohio St., 121; Railway Co. v. Workman, 66 Ohio St., 509. In view of the admissions of counsel upon the argument, it does not seem necessary to pursue these points at length.

Passing to a consideration of the ground upon which counsel for the administratrix now insist that the recovery might have been sustained, the general inquiry is whether it is in accordance with the law which defines liability for the wanton and wilful infliction of injury. The concrete rule upon the subject is, that if one is upon the track of a railway company by his own fault and in peril of which he is unconscious, or from which he cannot escape, and these facts and conditions are actually known by the engineer, it is his duty to exercise all reasonable care to avoid the infliction of injury. It does not impose the duty to exercise care to discover that one so upon the track is in a place of danger, but it does impose a duty to be exercised upon actual discovery.' No matter if the rule did originate in considerations of humanity, it is an established rule of the law which does not unreasonably interfere with the rapid movements of trains, nor is it ordinarily difficult of application if earnest and impartial efforts are made to apply it according to its terms and obvious import. With respect to the ground of liability now considered the court instructed the jury that the company would be liable if the engineer ought, by the exercise of ordinary care, to have seen the deceased in his perilous position and could, by the exercise of ordinary care, have stopped or checked the speed of the train so as to avoid the collision. Notwithstanding the manifest conflict between the instruction given and the .rule, it is said that the instruction is authorized by Railroad Co. v. Kassen, 49 Ohio St., 230. Attention to that case will show that it was decided in accordance with the generally recognized rule, and that its doctrines are not applicable to the present case. In the discharge of its duty to administer justice according to law the court was there called upon to determine the liability of the defendant in view of the very peculiar state of facts which the case presented. This it did by the application of the reason for adjudging that a liability arises in such cases. For the purpose of declaring the law it assumed the existence of all the facts which the evidence tended to establish. The material facts were: The company was running two trains in the same direction about two hours apart; Kassen fell from the rear platform of the forward train to the track, sustaining injuries which disabled him from leaving his position of danger on the track; and while in that position and condition he was run upon and killed by the following train. That he had fallen from the train and was in a place of danger were facts actually known by the employes of the company operating the forward train. There was ample opportunity to rescue him either by stopping the train from which he had fallen, or by using the telegraph to communicate information of his situation to those in charge of the following train. The actual knowledge of the employes of the company in charge of the forward train was its actual knowledge, charging it with the duty of using the opportunities at hand to rescue him from his perilous position. The phrase “ought to have been aware” manifestly applies to those in charge of the following train, and implies the duty of the company to communicate to them its actual knowledge of Kassen’s danger. This is entirely clear, not only from the peculiar facts of the case, but from the language of the opinion; for it is said: “The court properly instructed the jury, that the employes operating the train which ran over Kassen, were without fault. They had no notice that he was on the track, and were not required to anticipate his presence there.- Until they discovered him, they were justified in running the train as if the track was clear; and it is not ■claimed that after his discovery, they omitted any precaution for his safety. If those employes had received notice of Kassen’s situation in time to have avoided the injury, it is clear that it would have been their duty to exercise due care in the management of the train, to do so, notwithstanding he was there through his own fault, which was known to them; and for their omission to use such care, the defendant would be liable. While they were ignorant of the situation, the defendant was not.” It is entirely clear, therefore, that the liability of the company was placed upon the sole ground that after receiving actual notice that Kassen was upon the track and in a position of peril, it failed to use the means at hand to avoid injury to him. The doctrine of the case can have no application when neither the company nor its employes operating the train by which the injury is inflicted may be'charged with actual knowledge. The rule of liability applies only when there is actual knowledge of those operating the train inflicting the injury, which knowledge is imputed to the company, or the actual knowledge •of the company derived through other means, with opportunity to communicate it to those operating the train. By introducing into the instruction given the phrase, “if the engineer in charge of the train ought, by the exercise of ordinary care, to have seen the deceased in his perilous position,” and by other expressions in the charge involving the same conception, the court gave to the jury an erroneous view of the law.

The motion of the companies to direct a verdict at the conclusion of the testimony offered by the plaintiff should have been sustained; for it is quite clear, from the foregoing considerations, that the evidence offered in support of the immaterial averments of the petition, did not entitle the plaintiff to a verdict, and upon the only ground alleged in her petition upon which she might recover there is an entire' absence of ■evidence, to-wit: the actual knowledge of the engineer of McCormick’s peril. Tbe companies did not stand upon that motion, but introduced the evidence of the engineer which, for the first time, showed that he had discovered McCormick before the collision;, and from his evidence it also appears that he did all that was in his power to avoid the infliction of injury.

With respect to the conduct of the trial, it seems sufficient to say that court and counsel appear to have been alike unmindful of the doctrine of Hayes v. Smith, 62 Ohio St., 161. Counsel have, at some-length, discussed the constitutional validity of section 3365-22 of the statutes of this state; but in the view of the case which we have taken we do not consider that question material and we do not determine it.

Judgments of the circuit court and the court of common pleas reversed.

Burket, C. J., Spear, Davis, Price and Crew, JJ.,. concur.


author: Davis, J.

text:
    The State of Ohio, ex rel. The Great Camp, Knights of Modern Maccabees, v. Vorys, Superintendent of Insurance, etc.

      Association organized and incorporated in another state—Has right to be admitted in Ohio, when—Conditions of sections 3631-13 and 3631-16, Revised Statutes—Mandatory upon insurance superintendent—Law concerning similarity in names.

    Where an association is organized or incorporated in another state, province or territory, under laws which provide for such an association operating within the description, in substance, as. set forth in section 3631-11, Revised Statutes, and is shown by-certificate to be authorized to do business in that state, and is not now doing business within this state, such association has the right to be admitted to do business within this state, when it shall have filed with the superintendent of insurance of this, state a duly certified copy of its charter and articles of association, a copy of its constitution or laws certified by its secretary or corresponding officer, and an appointment of the superintendent of insurance of this state as the person upon whom process may be served, as provided in section 3631-13, Revised. Statutes, and under such circumstances, section 3631-16, Revised Statutes, is mandatory upon the superintendent of insurance to issue to such association a certificate authorizing it to do. business within the state of Ohio.
    (No. 8253
    Decided October 13, 1903.)
    In Mandamus.
    The relator asks this court to issue a writ of mandamus commanding the defendant to issue to the relator a permit in writing to do business in the state of Ohio as a fraternal beneficiary association, under the provisions of the statute in such case made and provided. The relator alleges that it is a fraternal beneficiary association, originally incorporated in 1881 under the laws of the state of Michigan, and re-incorporated in 1893 under act number 119 of the public-acts of 1893 of the laws of the state of Michigan. It. also avers that it is such a fraternal beneficiary association as is declared and defined and authorized to' be organized and to be permitted to do business in this, state under section 3631-11, Revised Statutes of the state, upon the relator’s compliance with the conditions prescribed by the fraternal beneficiary laws of this state. It is averred that on September 16, 1902, the relator filed with the defendant as superintendent of insurance an application for a permit in writing to-do business in this state, and that the relator filed with the defendant, accompanying said application, a duly certified copy of the relator’s charter and articles of association, a copy of the relator’s constitution and laws duly certified to by its record-keeper and secretary, an appointment of the superintendent of insurance of this state as the person upon whom process may be served, a certificate from the 'commissioner of insurance of the state of Michigan that the relator is authorized to do business in the state of Michigan, in which it is incorporated, and a financial statement -of the business of relator for the year ending December 31, 1901; and that the defendant, on the presentation of said documents and application, refused and still refuses to issue to the relator such permit in writing.
    The defendant by his answer, in his first defense, .admits, that the relator was re-incorporated under act number 119 of the public acts of 1893 of the laws of •the state of Michigan; that he is, and was at the time mentioned in the petition, the duly appointed, qualified, and acting superintendent of insurance of the .state of Ohio; and that on September 16, 1902, the relator filed with him an application for a permit in writing to do business in this state as a fraternal beneficiary association, a duly certified copy of relator’s charter and articles of association, a copy of its constitution and laws certified to by its record-keeper .and secretary, an appointment of the superintendent of insurance of this state as the person upon whom process may be served, a certificate of the commissioner of insurance of the state of Michigan, reciting that relator is authorized to do business in the state .of Michigan, a financial statement of its business for the year ending December 31, 1901, a copy of its application for membership, and copy of benefit certificate, and that the relator tendered the defendant the ■statutory fee of $25 for such permit; and also admits that defendant at the time of said application refused and still refuses to issue such permit to the relator, and he denies all the allegations of the peti-" tion not herein expressly admitted.
    For a second defense the defendant, in substance, sets out that it appears in the copy of the articles of association so filed with him on September 16, 1902, that the name of this corporation shall be The Great Camp of the Knights of the Modern Maccabees, etc., setting out in detail the laws and rules and regulations of the Great Camp of the Modern Maccabees, and averring that the provisions in the copy of the articles of incorporation, and constitution and laws of the relator so filed with the defendant disclose that the relator is not a fraternal beneficiary association as defined in section 3631-11, Revised Statutes, in this: That it is not a corporation, society, or association formed, or organized, or carried on for the sole benefit of its members and their beneficiaries, and that while the subordinate tents have a lodge system with ritualistic form of work, the relator does not have a lodge system with ritualistic form of work; and that the relator does not have a representative form of government ; and that the members of camps in Ohio will not have- representation equal to that accorded tents in Michigan, etc:
    In his third defense the defendant avers, that at the time of the passage of the act of April 27, 1896, known as the fraternal beneficiary act, being sections 3631-11 to 3631-23, Revised Statutes, there existed a fraternal beneficiary association with ritualistic form of work known as the Supreme Tent of the Knights of the Maccabees of the World; that said association for eleven years prior to the passage of said act had been doing business in the state of Ohio, and has duly filed its annual reports, designated the superintendent of insurance as the person upon whom process may be served; and has, therefore, been at all times, and is now, duly authorized by the superintendent of insurance of this state to continue its business in this state in accordance with the provisions of section 3631-11; that by the constitution and laws of the Supreme Tent of the Knights of the Maccabees of the World, great camps are organized in various states and territories of the United States and provinces of Canada; and there is and has been for eighteen years, under the jurisdiction of said Supreme Tent, a Great Camp of the Knights of the Maccabees for Ohio, and under this there have been subordinate tents or lodges established in the state of Ohio. The defendant sets out in detail the similarity in names, laws, rules, and regulations between the said Supreme Tent of the Knights of the Maccabees of the World and the relator, and further says that if the relator is permitted to transact business in the state of Ohio, in case an action is brought against it and process served on the defendant by virtue of relator’s appointment of him as its attorney for that purpose, it will have the same legal force and vitality as if served on the relator, and under the provisions of section 3631-15, Revised Statutes, the defendant, when served with any process, is required to notify the association sued of such suit and forward copies to it, careful action being imposed by statute on defendant in order to guard the rights of the association similar to the relator, now doing business in Ohio, and also of the relator, if it be permitted to do business in this state j and that to permit the relator to do business in this state under a name and title so similar to that of another beneficiary organization, will lead to confusion in the defendant’s department, and in the public mind, as to the identity of the person sued and for whom the defendant is acting and receiving service, and that for the protection of the defendant against liability to error in the transaction of his business, the relator ought not to he permitted to transact business under a name and title which would produce ■confusion and uncertainty. Wherefore he prays that the petition and supplemental petition be-dismissed at costs of relator, The Great Gamp of the Knights of the Modern Maccabees, and that he may go hence without day and costs.
    The relator demurred to the third defense of the answer for the reason that the same does not contain allegations sufficient to constitute a defense to the petition; and for reply to the second defense of the answer, makes certain specific denials.
    Upon motion, the Honorable E. B. Dillon was appointed master commissioner to take evidence and report his findings of fact and conclusions of law in the case; and on the twenty-seventh of April, 1903, the said master filed the evidence taken by him and ■submitted by the parties in this court, together with his report. The conclusions of law in said report are :as follows:
    “First. That the relator is a fraternal beneficiary association, as the same is described and defined in ; section 1 of the fraternal beneficiary act, 92 O. L., 360 (3631-11).
    “Second. That the relator has fully and completely ■complied with the provisions of said act, 92 O. L., 360 (3631-11 to 3631-23).
    ' “Third. That the demurrer of plaintiff to the third ■ defense of the defendant be sustained.
    “Fourth. That the superintendent of insurance of the state of Ohio is not vested with an absolute discretion in the exercise of the functions of his office with reference to the admission or rejection of foreign insurance companies desiring to do business in this ;state; but on the other hand, that where he is in manifest error in regard to the facts or his construction of the law, he may be compelled by mandamus to act.
    “Fifth. That a peremptory writ of mandamus issue against the defendant and in favor of the relator as prayed for in the petition.”
    The relator filed a motion to confirm the report of the master and enter judgment as prayed for in the petition. The defendant filed exceptions to the findings of fact and conclusions of law of the master, and moved to vacate and set aside the judgment, and for judgment in his behalf.

      Mr. J. B. Mcllwain and Mr. Fred G. Rector, for relator, cited and commented upon the following authorities :
    16 Am. & Eng. Ency. Law, 897; Woodmen of the World v. Gilliland, 67 Pac. Rep., 485; Commonwealth ex rel. v. Beneficial Assn., 18 Atl. Rep., 1112; Niblack on Frat. Ins., sec. 478; 1 Bacon on Frat. Ins., secs. 2, 3, 4, 48, 61, 69, 79, 91, 116, 118, 74; Canfield v. Great Camp, K. O. T. M., 49 N. W. Rep. 875; Hembeau v. Great Camp, K. O. T. M., 59 N. W. Rep., 417; Saunders v. Robinson, 10 N. E. Rep., 816; 3 New Ency. Law, 1060, 1068, 1078; Black’s Law Dict., 1025, 1026; Cooley on Const. Law, 194; People v. Board of Supervisors, 138 N. Y., 95; s. c. 33 N. E. Rep., 827; 2 Bouvier’s Law Diet., 416, 892, 893; State ex rel. v. Insurance Co., 49 Ohio St., 440; Insurance Co. v. Clunie, 88 Fed. Rep., 160; art. 7, sec. 231 (Laws 1892, c. 690); People ex rel. v. Payn, 59 N. Y. S., 851; State ex rel. v. Root, 54 N. W. Rep., 33; Life Ins. Co. v. Boyle, 82 Fed. Rep., 705; Insurance Co. v. McNall, 81 Fed Rep., 888; Life Ins. Co. v. Howland, 48 Atl. Rep., 435;
      People ex rel. v. Payn, 55 N. E. Rep., 849; People ex rel. v. Van Cleave, 55 N. E. Rep., 698; Boston Rubber Shoe Co. v. Boston Rubber Co., 149 Mass., 436; 7 Am. & Eng. Ency. Law, 690; Supreme Lodge K. P. V. Improved Order K. P., 113 Mich., 133; s. c., 71 N. W. Rep., 470; McGlynn v. Post, 21 Abb. N. C., 97; Association v. Munday, 21 Abb. N. C., 99; Muller v. Life Ins. Co., 60 N. E. Rep., 958; Mygatt v. Insurance Co., 21 N. Y., 52; Insurance Co. v. Woolen Factory, 3 Ohio St., 348; Insurance Co. v. Hoge, 2 How., 35; 23 Am. & Eng. Ency. Law (2 ed.), 363; State ex rel. v. Chase, 5 Ohio St., 529; State ex rel. v. Burgoyne, 7 Ohio St., 154; State ex rel. v. Jones, 17 Ohio St., 148; Commissioners v. Hunt, 33 Ohio St., 169; State ex rel. v. Moore, 42 Ohio St., 103; State ex rel. v. Acherman, 51 Ohio St., 163; Cross v. Armstrong, 44 Ohio St., 613 State ex rel. v. Insurance Co., 47 Ohio St., 167; State ex rel. v. Insurance Co., 49 Ohio St., 440; Vorys v. Connell, 67 Ohio St., 15; People ex rel. v. Insurance Co., 153 N. Y., 25; s. c., 38 N. E. Rep., 752; Stevens v. Pratt, 101 Ill., 206; Cowell v. Springs Co., 100 U. S., 55; Christian Union v. Yount, 101 U. S., 352; Insurance Co. v. Welch, 29 Kan., 672; Bacon on Ben. Soc. and Ins., secs. 11, 74, 84, 85, 122, 144, 157, 161, 170; Goodman v. Jedidjah Lodge, 9 Atl. Rep., 13; Sheu v. Grand Lodge, 4 O. F. D., 184; 17 Fed. Rep., 214; 1 Thorpe’s Const. Hist., 346, 351, 354, 417; Mill on Rep. Gov., 86, 88; Guizot’s Works on Rep. Gov. (pt. 2), chap. 14, 15, 16; 1 Bryce’s Am. Commonwealth, 444, 445, and vol. 1, chap. 39; Railway Co. v. Moore, 33 Ohio St., 384; Peterson v. Roach, 32 Ohio St., 374; Mitchell v. Treasurer, 25 Ohio St., 143; Hydraulic Co. v. Railroad Co., 29 Ohio St., 341; sec. 3628, Rev. Stat.

      Mr. J ohn M. Sheets, attorney general, and Mr. J. E. .Sater, for defendant, cited and commented upon the following authorities:

      State v. Life Assn., 38 Ohio St., 281; Chicago Mutual v. Hunt, 127 Ill., 257; State ex rel. v. Crites, 48 Ohio St., 465; Merrill on Mandamus, sec. 31; Vorys v. State ex rel., 67 Ohio St., 15; State ex rel. v. Moore, 42 Ohio St., 103; State ex rel. v. Insurance Co., 49 Ohio St., 440; State ex rel. v. Chapman, 67 Ohio St., 1; Dalton v. State, 43 Ohio St., 652; State ex rel. v. Ackerman, 51 Ohio St., 163; Lessee of Allen v. Parish, 3 Ohio, 193; Cross v. Armstrong, 44 Ohio St., 621; State ex rel. v. Life Ins. Co., 47 Ohio St., 167; People v. Van Cleave, 183 Ill., 330; 55 N. E. Rep., 698; People ex rel. v. Payn, 59 N. Y. S., 851; People v. Payn, 161 N. Y., 229; 55 N. E. Rep., 849; State ex rel. v. Root, 83 Wis., 667 (54 N. W. Rep., 33); Life Ins. Co. v. Boyle, 82 Fed. Rep., 705; Laws of Kansas, 712, 713; Insurance Co. v. McNall, 81 Fed. Rep., 888; Life Ins. Co. v. Howland, 73 Vt., 1; 48 Atl. Rep., 435; Sup. Council Am. Legion of Honor v. Perry, 140 Mass., 580; Briggs v. Earl, 139 Mass., 473; Hogg v. Manufacturing Co., 5 Ohio, 416; Hutchinson v. Thompson, 9 Ohio, 62; Perry v. Torrence, 8 Ohio, 522; Giddings v. Secretary of State, 93 Mich., 7; State ex rel. v. Cunningham, 81 Wis., 440; s. c., 83 Wis., 90; Ohio ex rel. v. Dudley, 1 Ohio St., 442; 1 Story on the Const. (5 ed.), sec. 635; Ordronaux’s. Const. Leg., 96; Andrews’ Man. on Const. (Rey.), 235; Yon Holtz on Const. Law, 238, 240; Cooley’s Prin. of Const. Law, 194; Farrar’s Man. on Const., 223, 224; 1 Story’s Com., 269; Federalist No. 39; Declaration of Rights, 1st Congress, Oct. 14, 1774; People v. Supervisors, 138 N. Y., 95; State v. Wrightson, 56 N. J. Law, 126;
      Board of Supervisors v. Blacker, 92 Mich., 638; Daggett v. Hudson, 43 Ohio St., 561; Luther v. Borden, 7 How., 42; 6 Am. & Eng. Ency. Law, 922; Madison in Federalist, No. 38; Monroe v. Collins, 17 Ohio St., 666; State v. Smith, 44 Ohio St., 365; State v. Williams, 75 N. C., 134; Price v. Knights of Honor, 68 Tex., 361; Schonfield v. Turner, 75 Tex., 325; State ex rel. v. Peters, 43 Ohio St., 629; State v. Hipp, 38 Ohio St., 199; State ex rel. v. Judges, 21 Ohio St., 11; 3 Am. & Eng. Ency. Law (2 ed.), 1046, 1064; Kennan v. Rundle, 81 Wis., 222; Clevenger v. Life Ins. Co., 2 Dak., 124; Saunders v. Robinson, 10 N. E. Rep., 816; 144 Mass., 306; Cook on Corp., sec. 929, p. 2301; Telegraph Co. v. Mayer, 28 Ohio St., 542; State v. Moore, 38 Ohio St., 7; Floyd v. Loan & Invest. Co., 54 L. R. A., 536; 1 Waterman on Corp., 546; Supreme Lodge K. P. v. Common Order K. P., 113 Mich., 137; Spelling on Inj., sec. 1372; People ex rel. v. Assessors, 137 N. Y., 201; Higgins v. Soap Co., 144 N. Y., 462; Sterling Remedy Co. v. Manufacturing Co., 80 Fed. Rep., 105; Marshall on Priv. Corp., 101; State ex rel. v. McGrath, 92 JVto., 355; Battle & Co. v. Finlay, 45 Fed. Rep., 796; Blackwell v. Armistead, 3 Hughes, 163; McLean v. Fleming, 6 Otto, 245; Buckland v. Rice, 40 Ohio St., 526; Walton v. Crowley, 31 Blatch., 40; High on Inj., sec. 1067; 21 L. R. Jr., 216; 51 L. R. Oh., 104; 50 L. R. Ch., 253; 25 Hun, 398; Hohner v. Gratz, 52 Fed. Rep., 871; State v. Citizens’ Ben. Assn., 6 Mo. App., 163; 3 Am. & Eng. Ency. Law (2 ed.), 1050, note; Insurance Co. v. Trust Co., 123 Fed. Rep., 534; Niblack on Ben. Soc., pp. 17, 39, 189; secs, 3, 6, 7, 19, 97; Bacon on Ben. Soc., secs, 1a, 2, 3, 14, 54, 84, 85; Thompson on Corp., secs. 297, 298, 299, 7876, 7882, 7884, 7885, 7886, 8183, 8185, 8192; secs. 3631-11 to 3631-23, Rev. Stat.
   Davis, J.

Section 6 of the “Act regulating fraternal beneficiary societies, orders, and associations,” passed April 27, 1896 (92 O. L., 360; section 3631-16, Revised Statutes),is mandatory upon the superintendent of insurance to issue to any association, having the right to do business within this state, as provided by said act, a permit and certificate authorizing such; association to do business within this state. Section 3 of the said act (section 3631-13, Revised Statutes,) requires that any association operating within the description as set forth in section 1 of the act, organized, under the laws of any other state, and not doing business within this state, shall he admitted to do business Avithin this state, token it shall have filed with the superintendent of insurance a duly certified copy of its charter and articles of association, a. copyof its. constitution or laws certified by its secretary, or corresponding officer, and an appointment of the superintendent of insurance of this state as the person upon Avhom process may be served as provided. -In case the laws of the state, etc., in which such association is organized shall provide for such organization, it is also required that such association shall be shown by certificate to be authorized to do business in the state, etc., in which it is incorporated or organized. When all of these requirements are met, the association has “a right to do business within this state, as provided” by said, act and the superintendent of insurance has no option to refuse to issue the permit and certificate. He is not authorized under Pus act to enter into any inquiry in regard to a foreign fraternal beneficiary association applying to be admitted to .do business within this state, except “in case the laws of Such state, province, or territory do not provide for any formal authorization to do business on the part of any association.” It appears in the record of this case that the relator is incorporated under the laws of Michigan and is authorized to do business in that state, and is so doing business. It also appears that the statutes of Michigan define and describe a fraternal beneficiary association substantially as it is defined and described in section one of the act of the general assembly of Ohio now under consideration, (section 3631-11, Revised Statutes,) and in almost the same words. It further appears that along with the application of the relator for admission to do business within the state of Ohio as a fraternal beneficiary association, it filed with the defendant as superintendent of insurance, a duly certified copy of the relator’s charter and articles of - association, a copy of the relator’s constitution and laws duly certified by its record-keeper and secretary, an appointment of the superintendent of insurance of this state as the person upon whom process may be served, a certificate by the commissioner of insurance of the state of Michigan that the relator is authorized to do business in the state of Michigan, and a financial statement of the business of the relator for the year ending December 31, 1901, being the year preceding the making of this application. We regard this as a. compliance, in letter and in spirit, with the statute; and therefore hold that the relator has the right to do business within this state as provided in said act, and is entitled to have the permit in writing therefor according to the provisions of section 3631-16, Revised Statutes.

A number of points have been submitted and argued which would be appropriate in an action in equity between rival corporations having similar names, and some which would probably be better addressed to the'' legislature; but we do not find the decision of any of ihgse to be essential here.

We have not overlooked the citation of decisions of this court as to the discretionary power of the superintendent of insurance in certain cases. We do not think that these apply to the case in hand for the reasons already stated, and for a further reason. In section one of the act now under consideration (section 3631-11, Revised Statutes), it is enacted that •“such associations shall be governed by this act, and shall be exempt from the provisions of the insurance ¡laws of this state, and no law hereafter passed shall ■apply to them unless they be expressly designated therein.” So that fraternal beneficiary associations have a law unto themselves, and neither the insurance laws nor the construction thereof are applicable to them unless expressly made so.

Exceptions to the report of the Master overruled, report confirmed, and

Peremptory writ of mandamus aioarded.

Burket, C. J., Spear and Price, JJ., concur.

.Shauck, J., dissents.


author: Spear, J.

text:
    Barker v. The State of Ohio.

      .An accountant of city board of revision—Is an employe of an officer —Within meaning of section 6900, Revised Statutes—Acceptance of bribe—Criminal law.

    An accountant employed by a board of revision of a city, constituted of the mayor, president of council, and city solicitor, is an employe of an officer within the meaning of section 6900, Revised Statutes, and may be punished, by virtue of said section, for accepting a bribe given for the purpose of influencing ihim with respect to his duty as such accountant.
    (No. 8031
    Decided October 13, 1903.)

      Error to the Circuit Court of Erie county.
    The facts are sufficiently stated in the opinion.

      Mr. Grayson Mills and Mr. W. B. Starbird, for plaintiff in error, cited and commented upon the following authorities:

      State ex rel. v. Brennan, 49 Ohio St., 33; State v. Kendle, 52 Ohio St., 346; Knight v. State, 54 Ohio St., 365; State ex rel. v. Funk, 8 Circ. Dec., 782; 16 C. C. R., 156; Findlay v. Parker, 9 Circ. Dec., 710; 17 C. C. R., 294; State v. Bauer, 1 Dec., 199; 1 N. P., 103; State v. Meyers, 56 Ohio St., 340; United States v. Wiltberger, 5 Wheat., 76; secs. 836, 1720, 1720a, 1720b, etc., 6842, 6846, 6900, 6969, 6970, 6975, 6975a, Rev. Stat.

      Mr. J. M. Sheets, attorney general, and Mr. Roy H. Williams, prosecuting attorney, for defendant in error, cited and commented upon the following authorities :

      Commissioners v. Pargillis, 6 Circ. Dec., 717; 10 C. C. R., 376 (affirmed by Supreme Court without report, 53 Ohio St., 680); State ex rel, v. Brennan, 49 Ohio St., 33; Lewis v. State ex rel., 11 Circ. Dec., 647; 21 C. C. R., 410; State v. Kendle, 52 Ohio St., 346; Sedgwick on Stat. Const. (2 ed.), 282; Black on Interpretation of Laws, 288; sees. 1720, 1720a, 1720b, 2804, et seq., 2813, et seq., 6794, Rev. Stat.
   Spear, J.

The plaintiff in error, Barker, was indicted by the grand jury of Erie county, under section 6900, Revised Statutes, for soliciting and receiving a bribe. On trial he was convicted of accepting a bribe and sentenced to two years’ imprisonment in the penitentiary and to pay costs, which judgment was affirmed by the circuit court. .

The above named section, among other things, provides that * * * “whoever, being * * * a state or other officer, or public trustee, or agent or employe * * * of such officer or trustee, either before or after his election, qualification, appointment, or employment, solicits or accepts any such valuable or beneficial thing to influence him with respect to his official duty, or to influence his action, vote, opinion, or judgment, in any matter pending, or that might legally come before him, shall be imprisoned in the penitentiary,” etc.

The indictment charged the defendant with “being then and there the agent and employe of certain officers of the city of Sandusky, to-wit: the mayor, president of the board of councilmen, and solicitor of the said city of Sandusky, the said officers then and there being and constituting the duly organized and acting board of revision of the said city of Sandusky,” and, in his said capacity, accepting a bribe from one Miller, theretofore the clerk of the city, for the purpose and with the intent of influencing him in favor of Miller with respect to his (Barker’s) action and judgment in a matter then legally pending before him as said agent and employe concerning Miller’s accounts with the city, etc., etc.

It is insisted by counsel for plaintiff in error that the conviction is wrong because the action of Barker in receiving a bribe to influence his conduct, however immoral and blameworthy, is not after all one of the offenses embraced in the terms of the statute, because Barker was not an employe of an officer, the board of revision not being officers. If this contention is correct it is fatal to the judgment. The real question is, therefore, were the members of the board of revision officers within the meaning of section 6900 of Revised Statutes. We are not embarrassed by the fact that the indictment describes this board as “officers” while the statute uses the term “officer,” because section 6791, Revised Statutes, permits the use of the plural for the singular and vice versa in the criminal code.. The situation is the same, therefore, as though the. statute had used the word “officers.”

The board of revision is constituted and its duties defined by sections 1720, 1720a, and 1720b, Revised Statutes, which provide in substance that the mayor, president of the board of councilmen, and the solicitor of the corporation, shall constitute a board of revision which shall meet as often as once in every month to review and investigate proceedings of the council and of all other departments of the corporation government, with the duty to report to the council any and all irregularities which may be discovered in any of the departments, or in the acts of any of the officers or employes of any of the departments, and with the power, to send for persons and papers, issue subpoenas and enforce the attendance of witnesses and' examine them under oath; and it is made the duty of all con-, stables, police officers, and other persons deputized by the chairman, to serve subpoenas and other process of the board. The board is also authorized to employ competent accountants to examine books, papers, contracts or other writings connected with any investigation. Also to prescribe forms of books, accounts, reports and other methods of accountability for the different departments, and formulate and enforce such a general and manifest system of accounting as will secure the most rigid accountability for the funds and property of the corporation, etc. Beyond this when the board has provided a system of accounting for any officer or department as herein provided, such system shall take the place of and be substituted for any manner of accounting for such department or officer now provided by law, and any officer of the corporation who refuses to accept and adopt the system of accounting prescribed by the board in accordance with the provisions of the sections cited, shall be subject to removal upon complaint filed with the probate judge.

. It must be apparent to the careful reader that this board is not a mere committee akin to the committees appointed by the probate judge to examine the county treasury, or by the common pleas to examine the accounts of the county commissioners, or the citizens appointed by the same court to act with county officers in the construction of a court house, as is contended by counsel for the accused, but that the men constitute a board having duration of service, clothed with authority during that service to exercise public functions in the interest of the people of the municipality, with power to employ assistants and provide for expending the public money in compensating them, and with power to enforce against others their will with respect to the proper discharge of those functions, and to enforce, also, their orders regarding the conduct of others in the employ of the municipality in respecting and obeying orders of the board. It is true that the board does not appear to be made a quasi corporation, as some boards are; nor is there attached to the duty any emolument. But neither of these characteristics is an essential element in the constitution, of an office. State v. Brennan, 49 Ohio St., 33. The most essential characteristic is present, viz.: “that the incumbent, in his independent capacity, is clothed with some part of the sovereignty of the state, to be exercised in the interest of the public and required by law,” and that the duties are of a continuous character as opposed to a mere temporary employment. State ex rel v. Holliday, 61 Ohio St., 171. On the face of 'things it would appear that it is not an unreasonable contention to insist that this board had authority as such to employ the accused and that such employment would be an employment by a board of' officers, and that the person thus employed would come within the purview of the section of the statute heretofore quoted.

But it is insisted that there is evidence in the criminal statutes to show that where the legislature has intended to include boards of officers within the sections of any statute that body has plainly said so, and sections 6842, 6846, 6969, 6970, 6975, and 6975a are cited. An examination of these sections shows, that, except the last named, they relate to the punishment, of offenses other than that of bribery, and section 6975a is confined to the offering or receiving of a bribe for recommending text books, and to the employment, by a school director or member of a board of education of a father or brother as teacher, and to the accepting by such director or member of any reward for any official act. These provisions, we think, are properly to be treated as covering only the specific subjects enumerated, and not as expressing the entire legislative purpose on kindred subjects.

It seems unnecessary to pursue this inquiry farther because there is another view which, to our minds, appears to effectually dispose of the objection. Where two or more persons are organized and act together by virtue of law in the performance of public duties they are said to constitute a board, and they may or may not become officers thereby, depending upon their powers and the character of the duties enjoined upon them; and where persons who are already officers are-■clothed with joint duties of a public character they ;are properly classed as a board of officers, and their .joint action will ordinarily be treated as the action ■of a board; yet, in the latter case, where the powers ¡given and the duties imposed do not constitute the members officers, they do not thereby lose their official character because of such joint association and .action. They remain officers notwithstanding. The ■mayor in the present instance continued to be mayor, the president of the council remained such president, .and the solicitor was still the law officer of the municipality; and whether we conclude that the members •of the board, while acting as such Avere by virtue of ;such relation, officers within the meaning of the statute or not, nevertheless they were officers having attached to their several offices the further duties.prescribed by the sections of the statute heretofore cited, and it would folloAV, as we think clearly, that an em- - ploye appointed by them jointly by virtue of the power .given by the statute would be an employe of such officers.

We are quite aware that the rule of law and of this ■court is that a statute defining an offense is not to be extended by construction to persons not within its •descriptive terms, yet it is just as well settled that penal provisions are to be fairly construed according to the expressed legislative intent, and mere verbal nicety, or forced construction, is not to be resorted to in order to exonerate persons plainly within the terms •of the statute. Applying these tests we are of opinion that' whether the three members are to be regarded as officers constituted such by reason of their organization as a board, or whether the authority is to be held to rest in the mayor, president of council, and solicitor as such, and the board’s duties to' be regarded simply as additional duties attached by statute to their other ■duties and powers, Barker was, within the terms of the statutes in the employ of.the officers named when he accepted the bribe as charged in the indictment, and that the judgment below should be

Affirmed.

Burket, C. J., Davis, Shauck, Price and Crew, .JJ., concur.