author: Shauck, J.

text:
    State of Ohio v. The Dayton Traction Company and The Cincinnati and Miami Valley Traction Company.

      Electric railway company in city and interurban electric railway company — May enter into valid arrangement to carry merchandise — Section SW-ll, Rev. Stat.

    An electric railway company owning and operating a road upon a street of a city and an interurban electric railway company may, by favor of the provisions of section 3443-11 of the Revised Statutes, enter into a valid traffic arrangement for the carriage of merchandise for hire upon said street.
    (Decided March 26, 1901.)
    Error to the Circiiit Court of Montgomery county.
    On the 31st day of January, 1899, the former attornney general filed a petition in the circuit court of Montgomery county in the name of the state against said defendants, alleging that they are corporations of Dayton owned by the defendant, The Dayton Traction Company having its principal place of business in the city of Dayton, and the Cincinnati and Miami Valley Traction Company having property and doing business in the county of Montgomery in said state; that on or about the 9th day of April, 1898, said defendants entered into an agreement for the conduct and management of the street railroad line in the city of Dayton owned by the defendant, the Dayton Traction Company, since which date said street railroad has been managed and operated pursuant to said agreement; and defendants charge that in the operation and management of said road pursuant to said operating agreement the said companies are offending against the laws of the state and exercising a franchise not conferred in the following respect:

      “Defendants in the operation and management of said street railway in said city, over and upon Main street, in about the month of September, 1897, commenced, and are so continuing to do, by cars specially designed for that purpose and otherwise, to transport and carry over and upon said street railway, merchandise and freight for hire, all of which was and is contrary to the laws of Ohio and the ordinances of said city of Dayton.”
    The petition prays that the defendants be ousted from the franchise so alleged to be unlawfully assumed. To the petition the companies filed separate answers. Demurrers to these answers were interposed by the state, but on a hearing the circuit court being of the opinion that the petition does not state a cause of action, overruled the demurrers as to the answers and sustained them as against the petition. To reverse that judgment this proceeding in error is prosecuted.

      John M. Sheets, attorney general, and H. R. Probasco, for plaintiff in error.
    There is but one question involved in this case: Has a street railway company, formed for the purpose of building and maintaining a “street railroad,” the power to transport freight by freight cars, or otherwise, over the streets of a municipality in Ohio, or if, as an abstract proposition, it has the power, then has it the power to do so in the face of the provisions of a municipal ordinance expressly prohibiting the transportation of freight, and limiting it to the transportation of passengers only?
    The avowed purpose of the Dayton Traction Company is, as has been stated, the construction and. operation of a “street railway.” The term “street railway” or “street railroad” is technical. It does not mean simply a railroad track laid upon a street over and upon which cars for the transportation of passengers and merchandise may be used, but it means a railroad track so constructed upon the street as to 'not unnecessarily interfere with the public in the use of that portion of the street upon which the track is placed, over and upon which cars may be propelled for the transportation of passengers and their parcels in hand, the motive power of which cars may be such motive power as is approved by the authorities in control of the streets, and which is not inconsistent with the safety and comfort of the general public and the owners of abutting property. Subject to these limitations and restrictions railroads have been permitted to be constructed and operated upon the streets as a means of public convenience, but “a distinctive and essential feature of a street railway, in relation to other railroads, is that it is exclusively for the transportation of passengers, and not of goods.” Booth on Street Railways, Sec. 1, and note; Williams v. City Elec. St. Ry. Co., 41 Fed. Rep., 556; Elliott on Roads and Streets, pp. 557 to 558; Louisville Trust Co. v. Cincinnati, 76 Fed. Rep., 312; Joyce on Electric Law, Sec. 6; See Secs. 2640, 2501, 2502, 2505, 2505a, 2505c, Revised Statutes.
    Paragraph 1 of section 3443-1 (Cincinnati Street Railway), uses the language, “agrees to carry passengers (not freight) thereon at the lowest rates of faref’ and, “bidder proposing to carry passengers (not freight) on such route at a low rate of fare;” and paragraph 2 of the same section prohibits an increase in the charge for carrying passengers (not freight), on any street railroad so extended.”

      The word “fare” means the sum paid, or due, for conveying a person by land or water, * * * as the fare for conveying in a coach, or by railway.” Webster’s Dictionary; 8 Am. & Eng. Enc. Law, 902, and n. 1; 7 lb. 810; Massillon Bridge Co. v. Iron Co., 59 Ohio St., 179.
    The city of Dayton, by and through its officers and council, had the control of and the regulation of the use of the public highways (Sec. 2640, Revised Statutes; State v. Cincinnati Gas Co., 18 Ohio St., 262, and it will not be denied that its council had the right to pass the general street railroad ordinance of June 11,1869 (Sec. 2501, Revised Statutes), entitled: “An ordinance to prescribe the terms and conditions of the use of the streets and avenues of this city by street passenger railroads,” in Sec. 3 of which is to be found the following language: “And no road (street railroad) shall be used for transportation of freight, but only for passengers and their ordinary baggage, or packages in hand.”
    The municipal corporation of Dayton, therefore, having the exclusive power to impose the terms and conditions upon which the Dayton Traction Company might use the streets of that city for the conduct of a street railway business, the exercise of such powers, whether inherent or delegated, were not subject to judicial control. Booth on Street Railroads, Sec. 16; Cooley’s Constitutional Limitations (6th ed.), pp. 252-253; Milhau v. Sharp, 17 Barb., 435.
    The grant made to the Dayton Traction Company must be strictly construed against it, and liberally in favor of the plaintiff (the public), and the grant, or license, can not be extended be.yond its express terms. Railroad Co. v. Defiance, 52 Ohio St., 262; Ravenna

      v. Penn. Company, 45 Ohio St., 118; Transportation Co. v. Palace Car Company, 139 U. S., 24.
    The avowed purpose of the Dayton Traction Com-, pany in its articles of incorporation was the conduct of a “street railway business,” and it has not the power to do any other business than a street railroad business. Railway v. Iron Co., 46 Ohio St., 44.
    The abutting property holders, whose consents must necessarily have been obtained, were filed with the council of the city of Dayton to give it jurisdiction to grant a franchise to the Dayton Traction Company, consented to the construction and operation of a street railway. It, the Dayton Traction Company, could not afterwards use the track for transportation of freight without obtaining additional consents of abutting property owners, and a new franchise. Booth on Street Railways, Sec. 6; Attorney General v. Railway Co., 112 Ill., 611.

      Quo warranto was the proper remedy in this case; the attorney general was the proper officer, and the-Montgomery county circuit court had jurisdiction. Sec. 204, Revised Statutes; Sec. 5026, Revised Statutes ; State v. Anderson, 45 Ohio St., 196; Secs. 6761-2-3, and 6768.
    The motive of the attorney general will not be inquired into where it is alleged that a corporation is guilty of usurpation of franchises or powers. State v. Gleason, 12 Florida, 190; Commonwealth v. Bank, 10 Phil. (Pa.), 156; 19 Am. & Eng. Enc. Law, pp. 675, 676.
    The defendants were required to disclose by* their answer their rights and titles to the franchise, in controversy, and should have shown by their answers a good title as against the state, and failing to. do so, judgment should have Leen against them. High on Ex. Remedies, Secs. 629 and 712; State v. Beecher, 15 Ohio, 723; State v. Vanderbilt, 37 Ohio St., 590, 631; Cooley’s Constitutional Limitations, 395; Bissell v. Railway Co., 22 N. Y., 259; Bradley v. Railway Co., 21 Conn., 306.

      McMahon & McMahon, for defendant in error.
    The circuit court held that an ordinary street railroad had the right to carry merchandise, prior to the law of May 17, 1894.
    In addition to the able argument contained in the decision in this case reported in State v. Traction Co., 10 Circ. Dec., 212; 18 C. C. R., 490, to which we refer, we beg leave to suggest the following points,.assuming for the argument, that the Dayton Traction Company had the powers of an ordinary street railroad only:
    Street railroads existed prior to the act of 1861, and were recognized as valid corporations existing under the statutes then in force. See the act of the legislature of March 5,1860, 57 O. L., 16, Secs. 14,15.
    16 and 17, to be found in 2 Swan & Critchfield, Revised Statutes (1860), pp. 1557-1560; Street Railway Co. v. Cumminsville, 14 Ohio St., 523.
    No distinction was recognized in law as to freight or passengers. Both were railroads. The nature of things made them exclusively passenger roads. * The general act of 1861, which purported to be a special provision for street railroads, 58 O. L., 66, provided in section 1 how street railroad companies should be organized, and in section 2 defined their powers. By section 3 of the act, sections 5, 6, 7, 8, 9, and 14 of the general act of incorporation were made a part of the act. Section 4 provided for consolidation; section 5 provided the manner of consent of city and referred expressly to the act of March 5,1860, above cited, etc.

      By the general revision of the statutes, in 1880, the act of April 10, 1861, was repealed in express terms. Revised Statutes, 1880; Yol. 2, p. 1763, Repeal 467.. .
    No. provision will be found in the statutes of 1880 for the organization of street railroads,, or defining their powers. All the express provisions are found in Secs. 2501 to 2505 inclusive, and Secs. 3437 to 3443, inclusive.
    Organization, powers, right to borrow monej, consolidate, etc., all rested in the general act, either under chapter 1, or chapter 2, and street railroads were again practically railroads, subject to the laws regulating steam railroads in so far as they were applicable.
    By act of March 13, 1883, it was ordained that nothing in the Revised Statutes relating to railroads, prior to Sec. 3437 shall apply to street railroads, except Secs. 3287, 3288, and 3289 — these sections providing for borrowing money, executing mortgages, etc.
    There has not existed since 1880 any statute defining or limiting the powers of a railroad company organized as a street, railroad company. It will be observed that in the railroad chapter defining the powers, etc., of what are known as steam railroads, there is no express grant of the right to carry persons and freight. That right is assumed to exist, and its exercise is regulated by various provisions of law.
    The attorney general,‘or his representative, argues upon an alleged prohibition in an ancient ordinance of 1869, which nowhere appears in the record. We do not care for this antiquity although the circuit court seems to have considered the case as though such an ordinance was in the record. In the view the court took of such an ordinance its existence was immaterial. But this court cannot take cognizance of an unpleaded ordinance, in an argument upon demurrer. Dillon on Municipal Corporations, Sec. 83, Sec. 412; Am. and Eng. Enc. Law, Title, Judicial Notice.
    But proceeding now further upon the assumption that under the statute a street railroad company can carry freight unléss restrained by ordinance, let us consider whether an action in quo loarranto will lie if the railroad company carries freight merely in violation either, of the ordinance granting it the right in the streets, or a general ordinance regulating street railroads.
    Section 6761 provides for the cases when this action ma,y be brought against a corporation.
    If the statutes of the state give it the right to carry freight, and the right to exercise such franchise has been granted away in a contract or otherwise to the city, assuming that the city can impose or require such conditions, it appears to us that the public interest has been to a great extent eliminated, and that the questidn becomes one between the city arid the railroad company, and that a plain and exclusive remedy exists in favor of the city under the Revised Statutes of Ohio; and that the cause of action is not a claim by contract or otherwise to a franchise in contravention of law. Sec. 1777, Ohio Statutes: State v. Berry, 14 Ohio St., 315; State v. Ganson, 58 Ohio St., 313; State v. Marlow, 15 Ohio St., 114.
    That section 1777 covers the contract between the city and a street railroad is decided in Street R. R. Co. v. Smith, 29 Ohio St., 291.
    And as any taxpayer can set the city solicitor in motion, and upon his failure to act, can himself proceed, at the expense of the city, the remedy is very complete.

      We refer to the following cases outside of Ohio where the law has been similarly declared — particularly. where private interests are behind the state name, And we refer more especially to the case in 172 Illinois, cited below, and the cases referred to in it. Attorney General v. Gas Co., DeGex McN. & Gordon, 303; People v. Equity Gas Co., 141 N. Y., 232; Attorney General v. Railroad Company, 125 Mass., 515; People v. Gen. Elec. R. Co., 172 Illinois, 129; New Hampshire v. Louisiana, 108 U. S., 76.
   Shauck, J.

The petition does not call upon the defendants to show by what authority they assume to exercise the franchise or privilege in question; but, conceding that they are common carriers authorized to carry passengers on Main street in Dayton, it charges the carriage of freight and merchandise on said street for hire as the usurpation of a franchise not conferred. In any view quo warranto is a prerogative writ to be employed to shield the sovereignty of the state from invasion and to prevent the abuse of corporate powers. We have become familiar with its use to prevent combinations among artificial persons to stifle competition. It is quite obvious that it should not be resorted to at the instance of a competitor, for the purpose of preventing competition. ,

We have therefore to inquire whether the carriage of merchandise for hire under the conditions presented is the exercise of a franchise not conferred upon carrying companies of this character. Because the petition avers that the defendant companies have entered into an agreement for the conduct of the road on Main street, and impliedly avers, or at least permits the inference, that one of them is an electric interurban road, having its termini at Cincinnati and Dayton, and the other an electric company owning the road apon Main street in Dayton, it will justify the judgment of. the circuit court if the right in question might result from any operating agreement or arrangement into which the said companies are authorized to enter. '

Counsel for the plaintiff in error urge as conclusive of the subject numerous texts and decisions in which street railroads are defined as carriers cf passengers. Uusually they have been so defined for the obvious reason that until recently they were exclusively engaged in the carriage of passengers; but the general definition cannot be material in view of recent legislation in which the term is applied to roads constructed upon highways, interurban as well as urban, the only requirement being that in construction and operation they shall be consistent with the former and ordinary use of such highways, and in which legislation provision is made for the carriage of merchandise. It is well known that it was in response to a general demand for increased traffic facilities between cities and the regions surrounding them that the act of May 17, 1894 (91 O. L., 285), which is now included in sections 3443-8 to 3443-13 of the Revised Statutes, was enacted. In that act railways of this character, wherever located, are called street railways. The second section authorized them upon obtaining the consent of the authorities controlling them, and of the owners of the property abutting on them, to occupy and use highways outside of cities and villages. The fourth section of the act (3143-11, R. S.) is as follows:

“Section 4. Such companies shall have power to lease, purchase or make traffic arrangements with any other street railroad company as to so much of its tracks and other property as may. be necessary or desirable to enable them to enter or pass through any city or Tillage, upon the same terms and conditions applicable to other street railroads. And any existing street railroad company owning or operating a street railroad shall receive the cars, freight, packages or passengers of any other road, upon the same terms and conditions as they carry for the general public.”

Since the provisions of this section contain definite authority for the making of a traffic arrangement by which the defendants might have and exercise the powers which the petition alleges they are now exercising, the view taken of the petition in the circuit court is correct.

Judgment affirmed.

Burket, Spear and Davis, JJ., concur.


source: Caselaw Access Project

author: Davis, J.

license: Public Domain

text:
    The State of Ohio ex rel. Attorney General v. The Interstate Savings Investment Company.

      Contracts of investment security, debentures or certificates— Called and ■ redeemed by method of unequal advantage to holders are unlawful, when — Accumulation of reserve fund by lapses also unlawful, when.

    1. Contracts of investment security, debentures or certificates, which by the device of a “numeral-apart,” may be called in and redeemed at any period before they would regularly accumulate a credit in the reserve fund equal to the stipulated endowment value, and otherwise giving unequal advantages to the certificate holders, contain the elements of chance and prize constituting a lottery, and are unlawful.
    2. Contracts of investment security, debentures or certificates, which cannot reasonably be expected to accumulate a reserve fund equal to the stipulated endowment values .within the stated period, without aid from, lapses or appropriation from premiums on new business, are fraudulent, contrary to public policy and unlawful.
    (Decided March 26, 1901.)
    In Quo Warranto.
    By petition in quo loarranto the attorney general alleges that the defendant, The Interstate Savings Investment Company, has continuously since its incorporation within this state misused its corporate authority, franchises and privileges, and assumed franchises and privileges not granted to it, particularly in issuing and selling a certain form of investment security called by the defendant an “Accumulative Endowment Certificate.” A copy of this certificate series A is hereafter given.
    The defendant by answer and amendment to answer sets out in detail the manner of doing business by the defendant company, admits that it is issuing the certificates series A, and says that it is also issuing certain other certificates series B, C and D, copies of which are hereafter given. The attorney general demurs to the answer upon the ground that the answer does not state facts sufficient to constitute a defense to the cause of action stated in the petition.
    SERIES “A.”
    The Interstate Savings Investment-Company.
    General Offices, Cincinnati, Ohio.
    By this accumulative endowment certificate does promise and agree to pay......................... or order, upon surrender, redemption or maturity of this certificate, or, in the event of death, pay the owner’s heirs, or legal representatives, the amount as shown in the table of values herein, and in accordance with the terms and conditions herein, and the application herefor, which are hereby made a part and parcel of this certificate as fully as if recited over the signatures hereto attached.
    In witness whereof, the said Interstate Savings Investment Company has by its duly authorized officers, signed, sealed and delivered, this contract this ........day of.........., one thousand nine hundred ..............
    (Seal.) S. A. Stevens, President.
    (Seal.) Wm. R. Sypher, Secretary.
    TERMS AND CONDITIONS.
    Dues — The dues on this certificate are twelve dollars per annum, but may be paid semi-annually, quarterly or monthly. All dues after the first payment must be paid at the main offices or to some properly authorized collector of the company, between the hours of 9:00 A. M. and 5:00 P. M., on or before the 15th day of each month, beginning with the month following the date of this certificate.
    Fines — An additional ten days of grace is allowed, with a fine of ten per cent., and if, at the expiration of the ten days, the fine and delinquent dues are not paid in full, the owner hereof forfeits all payments made hereon to the several funds to which they have been apportioned.
    Remittances — All remittances made on this certificate are made at the risk of the owner. If any remittances hereon be mailed on the 15th or 25th days of the month, and if the date of mailing be verified by the postoffice stamp, then this certificate shall not be subject to fine or forfeiture. When the 15th or 25th falls on Sunday or a legal holiday then the first business days respectively thereafter shall be regarded the same as the 15th and 25th of the month. No receipts for dues is valid without the signature of the treasurer, or of some one acting by his written authority.
    Apportionment of Funds — The first six months’ payment are passed to the credit of the reserve and expense funds. All subsequent monthly dues, when paid, are apportioned to the several funds as follows: Sixty-five per cent, to the redemption fund; twenty per cent, to the reserve fund, and fifteen per cent, to the expense fund. All fines and transfer fees are passed to the credit of the reserve fund.
    Non-Forfeitable — The monthly installments on this certificate, having been paid in full to and including the thirty-sixth month from the date of issuahce hereof, shall render it non-forfeitable. Should the payment of dues on this certificate be continued after it had become non-forfeitable, it shall be considered a contributing, non-forfeitable certificate, and, if redeemed, shall be entitled to its endowment value, but should the payment of dues be discontinued at any time after the thirty-sixth month it shall be considered a non-contributing, non-forfeitable certificate, and will not be eligible for the cash surrender privilege, but must be held to be paid by special redemption or maturity and when paid will be entitled to its paid-up value only, at the time it became non-contributing.
    Reinstatement — Any non-forfeitable, non-contributing certificate can be reinstated as a contributing certificate by the payment of all back dues and a reinstatement fee equal to the accumulated fines, provided said certificate will not be reached by special redemption within one year, nor redeemed by regular redemption in the month in which the back dues are paid.
    Surrender Value — Any time after one year, if this is a contributing certificate, the owner hereof may make application for its surrender value. If this certificate is one hundred and twenty months old or less, it will be paid out of the redemption fund, but if it is over one hundred and twenty months old, it will be paid out of the reserve fund its proportionate share of same, and the difference, if any, from the redemption fund. -
    All dues must be paid until application is reached and paid. All cash surrenders have precedence over all other redemptions.
    Special Redemptions — Not less than twenty percent. of the total amount contributed to the redemption fund is applied every month to redeem in consecutive order the lowest numbered certificates in force, paying for their surrender, if non-contributing, their paid-up value; or, if contributing certificates, tbeir endowment value.
    Regular Redemptions — The company reserves the right to call in and pay this certificate at any time previous to its maturity, by paying out of the redemption fund for its surrender, if a contributing certificate its endowment value. If a non-contributing, nonforfeitable certificate, it is not eligible to the regular redemption. In no case are certificates eligible for redemption until they have been in force seven months. The method used in this redemption is applied monthly and consists in paying certificates so many numbers apart, and in paying as many of them as the regular redemption fund will cover. The numbers of all certificates previously retired, are not considered in the count.
    The Numeral Apart is determined each month by taking a percentage of the total number of contracts in force. The percentage used shall be the same as published in the bulletin the previous month, and can not be altered unless thirty days’ notice has been given in the bulletin.
    Having determined the numeral, the count is begun with the oldest certificate in force (after the surrender and special redemptions have been made for the month) and continues through as many live certificates as the numeral indicates, the last one counted being the one called in for payment.
    Proceeding to count in like manner from the certificate so called in, the second one to be paid is reached; this method is continued until the sum of all the values of the certificates thus called in equals the amount in the regular redemption fund. The numeral for succeeding months is determined in the same way, and the count begins from the last certificate called in and paid the month previous.
    The directors reserve the right to modify this method of redemption at such a time, and in such a manner, as will in their judgment be to the best interests- of all certificate holders.
    Loans — At any time after the last day of the twelfth month from the date of this certificate, all monthly installments due hereon having been paid in full, the owner may make application for a loan, not to exceed its reserve credit. This certificate will be accepted as collateral to a note for a loan and must be deposited with the company. The loan may be made at the option only of the company, and from any of its loanable funds. If the owner fail to keep this certificate in force, then, in default of a monthly payment due hereon, it shall immediately become due and payable out of the regular redemption fund for its surrender value. From the proceeds of said redemption, the note with all interest due thereon, shall first be paid; the remainder, if any, shall be paid to the owner, and the company shall be relieved from any other or further liability on this certificate, and the owner likewise shall be relieved from any further 1L ability on this certificate, and the owner likewise shall be relieved from liability on his saití note.
    Maturity — This certificate, if a contributing one, will mature and will be paid from the reserve fund when the amount to its credit in the reserve fund equals its endowment value, or if a non-contributing, non-forfeitable certificate, it will be paid when the amount to its. credit in the reserve fund equals its paid-up value, at the time it .became non-contributing.
    Transfer — This certificate is transferable, but only on the books of the company. When a transfer is desired, fill out one of the assignment blanks on the back of this certificate, with the name of the person to whom it is to be transferred, written on the first line ; and the signature of the owner on the second line; then forward the certificate to the company to have the transfer recorded. A fee of one dollar is charged for the transfer of each certificate, and the fee must accompany the certificate.
    Death of Owner — In the event of the death of the owner of this certificate, his legal representatives may, upon application within sixty (60) days after the date of death, avail themselves of any of the following options. All installments due hereon must be paid, according to contract, until the company has been notified which option has been accepted.
    1st. Continue the payment of monthly dues until this certificate is redeemed or becomes non-forfeitable.
    2d. Surrender the certificate at any time within six months from the date hereof, and receive in cash from the redemption fund the total amount paid hereon, exclusive of the first monthly payment.
    3d. Surrender this certificate at any time after six months from the date hereof, and if a contributing one, receive in cash from the redemption fund its paid-up value, or if a non-contributing certificate its paid-up value at the time it became non-contributing.
    Applications under options two and three, are considered as surrender redemptions. All applications are considered in the order of their receipt, and are paid out of a fund consisting, according to requirements, of not more than sixteen per cent, of the total redemption fund, for any. one month.
    When deaths for any one month require more than the total amount appropriated for this purpose then those remaining unpaid are taken up in succeeding months in their regular order.
    Authority of Agents — No promises, representations, or agreements of any agent or employe, not contained herein, shall be of any binding force or effect on the company; and no agent or employe has any authority to change or modify in any manner whatever, the terms, regulations, conditions or provisions of this contract.

      Series B. No.
    The Interstate Savings Investment Company.
    General Offices, Cincinnati, Ohio.
    By this accumulative endowment certificate does promise and agree to pay.......................... or order, upon surrender, redemption or maturity of this certificate, or, in the event of death, pay the owner’s heirs, or legal representatives, the amount as shown in the table of values herein, and in accordance with the terms and conditions herein, and the application herefor, which are hereby made a part and parcel of this certificate as fully as if recited over the signatures hereto attached.
    In witness whereof, the said Interstate Savings Investment Company has by its duly authorized officers, signed, sealed and delivered, this contract this ........day of.........., oné thousand nine hundred ..............
    (Seal.) S. A. Stevens, President.
    (Seal.) . Wm. R. Sypher, Secretary.
    Such certificate, when sold and issued by the company to the purchaser, has filled into it, by an officer of the company, the name of the holder, together with the date of the purchase.
    Upon the inside of said certificate are printed the terms and conditions attached to the investment certificate as printed upon its outside page one. Said terms and conditions are as follows:
    TERMS AND CONDITIONS.
    Premium — The monthly premium on this certificate, originally issued with five coupons, is $1.00 on each coupon, and must be paid at the main office or to a properly authorized collector of the company, between the hours of 9:00 A. M. and 5:00 P. M., and between the 1st and 15th day of each month after date of issue, without notice. Premiums may be paid annually, semi-annually or quarterly, in advance. No premiums will be required or accepted after the one hundred and twentieth monthly premium has been paid.
    Fines — If the premiums are not paid in accordance with the preceding clause, a fine of ten cents on each coupon is assessed, and if the fine and delinquent premium is not paid by the 25th of the month in which the premium is due, the owner forfeits all premiums paid hereon to the several funds to which they have been apportioned; except that this certificate may be reinstated within sixty days by the payment of the premiums due hereon and reinstatement -fee of one dollar.
    Remittances — All remittances made on this certificate are made at the risk of the owner. If any remittances hereon be mailed on the 15th or 25th days of the month, and if the date of mailing be verified by the .postoffice stamp, then this certificate shall not be subject to fine or forfeiture. When the 15th or 25th falls on Sunday or a legal holiday then the first business days respectively thereafter shall be regarded the same as the 15th and 25th of the month. No receipts for dues is valid without the signature of the treasurer, or of some one acting by his written authority.
    Apportionment of Premiums — The first six months’ premiums are passed to the credit of the reserve and expense funds; all subsequent premiums, when paid, are apportioned to a reserve, a redemption, and expense fund, with not more than ten per cent, to the expense fund, nor less than twenty-five per cent, to the reserve fund.
    Liability — The liability on this certificate shall be the reserve credits on its unretired coupons. The reserve credit on this certificate shall be not less than twenty-five per cent, of all premiums paid on its unretired coupons and the interest earnings thereon.
    Tontine Fund — The reserve contributions from retired coupons shall constitute the tontine fund. This fund, with its interest earnings, together with the reserve fund, shall be used to mature certificates.
    Surplus Fund — All fines, transfer fees, reinstatement fees and interest thereon, shall constitute the surplus fund.
    Redemption Fund — The redemption fund is used to pay surrender values, death claims and endowment values before the coupons mature, taking precedence in the order named.
    Surrender Value — At any time after one year from the date of this certificate, the owner may make application for the surrender value of the attached coupons, as per table of values printed thereon, provided the monthly premiums have been paid to date of application. All applications are considered in the order of their receipt, and paid out of the redemption fund, except after the 120th month, when the reserve and tontine funds apportioned to the credit of each coupon can be used. Should the redemption fund for any month be insufficient to pay all surrender values, then those remaining unpaid are taken up in succeeding months in their regular order. All premiums must be paid until the application is reached and paid.
    Death — In the event of the death of the owner of this certificate, his legal representatives may, within sixty days after death, make application to the company for the endowment value at the time the application is made, as shown in the table printed hereon. All premiums due hereon must be paid according to contract until the application has been made. These applications are considered in the order of their receipt, and are paid out of the redemption fund after all surrender values have been paid. Should the amount available in the redemption fund be less than the amount of death claims, then those remaining unpaid are taken up in succeeding months in their regular order. If this certificate has been transferred, the legal representatives must prove, to the satisfaction of the company, that the owner was in good health at the time the transfer was made.
    Redemptions — The company reserves the right to call in coupons at any time after six months from date of issue, by paying for their surrender from the redemption fund their endowment value, as shown in the table of values printed hereon.
    Order of Payment — When coupons are called in for redemption before maturity, the order of payment shall be one coupon on each certificate in consecutive order, beginning with the lowest numbered certificate and reverting when the highest numbered certificate eligible for redemption has been reached. The company reserves the right at any time to call in and redeem in consecutive order the oldest certificates in force.
    Maturity — The premiums having been paid in full on attached coupons to the one hundred and twentieth month inclusive, shall render said coupons eligible to mature, and they will be paid out of the reserve and tontine funds when the proportionate share each coupon has to its credit in these funds equals ($192.00) one hundred and ninety-two dollars.
    Loans — At any time after the last day of the twelfth month from the date of this certificate, all monthly premiums due hereon having been paid in full, the owner may make application for a loan, not to exceed its liability. This certificate will be accepted as collateral to a note for the loan and must be deposited with the company. The loan may be made at the option only of the company, and from any of its loanable funds. If the owner fail to keep this certificate in force, then, in default of a monthly premium due hereon, it shall immediately become due and payable out of the redemption fund for its surrender value. From the proceeds of said redemption, the note, with all interest due thereon, shall first be paid; the remainder, if any, shall be paid to the owner, and the company shall be relieved from any other or further liability on this certificate, and the owner likewise shall be relieved from liability on his said note.
    Transfer — This certificate is transferable, but only on the books of the company, and a fee of $2.00 is charged. When a transfer is desired, fill out one of the assignment blanks on the back of this certificate, with the name of the person to whom it is to be transferred written on the first line, and the signature of the owner on the second line, then forward the certificate, together with the fee, to the company to have the transfer recorded.
    Authority of Agents — No promises, representations, or agreements of any agent or employe, not contained herein, shall be of any binding force or effect on the company; and no agent or employe has authority to change or modify in any manner whatever, the terms, regulations, condition or provisions of this contract.
    Loss — In case this certificate is lost, the owner may have a duplicate issued by making an affidavit upon a blank furnished by the company;, and the payment of a fee of one dollar.
    There is likewise printed into and as a part of the terms and conditions what is called a table of values, which indicates the value of such certificates upon the respective months of the existence of the certificate, in which said, table there is no death benefit or paid-np value, the death benefit being the endowment value, and there is no paid-up value. Said table of value is as follows:

      Attached to the certificate are printed five coupons, A, B, O, D and E, respectively, which said coupons are as follows:

      Series C. No.
    The Interstate Savings Investment Company.
    General Offices, Cincinnati, Ohio.
    By this accumulative endowment certificate does promise and agree to pay to...................... or order, subject to the terms and conditions herein, and in the application herefor contained, at or before maturity of this'certificate, an amount equal to all the. payments made on said certificate, together with interest thereon at the rate of six (6%) per cent, per annum, and in addition thereto, a share of the net surplus earnings of said company to said certificate apportioned pro rata, not to exceed the amounts as shown in the schedule of values herein contained.
    In witness whereof, the said Interstate Savings Investment Company has by its duly authorized officers, signed, sealed and delivered, this contract this ........day of.........., one thousand nine hundred ..............
    (Seal.) ................, President.
    (Seal.) ................, Secretary.
    Such certificate, when sold and issued by the company to the purchaser, has filled into it, by an officer of the company, the name of the holder, together with the date of the purchase.
    Upon the inside of said certificate are printed the terms and conditions attached to the investment certificate as printed upon its outside page one. Said terms and conditions are as follows:
    TERMS AND CONDITIONS.
    Premiums — This accumulative endowment certificate, is issued in consideration of the promise and written agreement in the application of the purchaser hereof to pay a monthly premium of one dollar, until 220 of such monthly premiums shall be paid. Such monthly premiums must be paid at the main office or to a properly authorized collector of the company, between the hours of 9:00 A. M. and 5:00 P. M., on the first day of each month after date of issue, without notice. Provided, however, that if the first day of the month falls upon a Sunday or a legal holiday, said premiums are due between said hours on the first legal day thereafter. Premiums may be paid annually, semi-annually or quarterly, in advance.
    Fines — If said premiums are not paid by 5 P. M. on the 25th day of the month, a fine of 10 cents will be assessed. If all delinquent premiums and fines assessed hereon are not paid at or before 5 P. M. on the 25th day of the month in which they are due, this certificate shall be deemed to be lapsed, and will not be eligible to participate in the redemption for the month for which the premium is in default, and all premiums paid hereon shall be forfeited to the funds respectively to which they have been apportioned. Provided, however, this certificate may be reinstated within sixty days, by the payment of the premiums due hereon and a reinstatement fee of twenty-five cents.
    Remittances — All remittances made on this certificate are made at the risk of the owner. If any remittances hereon be mailed on the 15th or 25th days of the month in which they are due, and if the date of mailing be verified by the postoffice stamp, then this certificate shall not be subject to a fine or forfeiture. When the 15th or 25th falls on a Sunday or a legal holiday, then the first business days respectively thereafter, shall be regarded the same as the 15th and 25th of the month. No receipt for premiums is valid. without the signature of the treasurer, or of some one acting by his written authority.
    Apportionment op Premiums — The first' six months’ premiums are passed to the credit of the reserve and expense funds, provided, that not less than twenty-five per cent, thereof shall be passed to the credit of the reserve fund. All subsequent premiums. are apportioned to the reserve, the redemption and the expense funds, as follows: Not less than twenty-five per cent., and such greater per cent, as shall be necessary to provide for the payment, of this certificate at maturity, to reserve; not more than ten per cent, to expense; the balance to redemption.
    Reserve and Tontine Funds — The reserve contributions on unretired certificates shall constitute the reserve fund. The reserve contributions on retired certificates shall constitute the tontine fund. The tontine fund and reserve fund, together with their interest earnings, shall be used to retire matured certificates.
    Redemption Fund — The redemption fund shall be used, First, to retire certificates at cash surrender value; Second, to retire certificates at death surrender values; and Third, to redeem certificates at the redemption value, before maturity.
    Surplus Fund — All fines, transfer fees, reinstatement fees and interest earnings thereon, shall constitute the surplus fund. Said fund shall be used in the discretion of the board of directors for the uses and purposes of the business of the company.
    Classes — Certificates are issued in monthly classes, désignated by the name of the month and year of their issue. The reserve and tontine funds created by each class are apportioned respectively to such class. When, by reason of the retirement of all of the certificates belonging to a class, the reserve fund of that class has been passed to the credit of the ton-tine fund of that class, such tontine fund shall be apportioned to the tontine funds of all the classes having certificates unretired, upon the basis of the number of reserve contributions made by the classes respectively. Such distribution to be made only on December 31st of each year.
    Liability — The company’s liability on this certificate shall be the amount of the reserve credits, together with interest earnings thereon, and in addition, its proportionate share, of the tontine fund, including interest earned thereon, belonging to its class.
    Non-Forfeitable — The monthly premiums on this certificate, having been paid in full to and including the thirty-sixth month from the date of issuance hereof, shall render it non-forfeitable.. Should thé payment of premiums hereon be continued after it has become non-forfeitable, it shall become a.contributing, non-forfeitable certificate, and when redeemed, shall be entitled to its redemption value. Should the payment of premiums, be discontinued at any time after the thirty-sixth month, it shall be considered a noncontributing, non-forfeitable certificate, and it will not be eligible for the cash surrender privilege or for redemption, but must be held to be paid at maturity, and when paid will be entitled only to its guarantee value at the time it became non-contributing. Any non-contributing, non-forfeitable certificate, may be reinstated as a contributing one, by the payment of all back premiums and a reinstatement fee, equal to the accumulated fines, provided said certificate is not to be paid by the consecutive order of payment or maturity, within one year, nor redeemed in the month in which the back premiums are paid.
    Surrender Value — At any time after one year from the date of this certificate, provided all premiums have been paid in accordance with the terms hereof, the owner may make application for its cash surrender value; said value shall be the guaranteed cash surrender value, as per the table of values set forth herein. Applications will be paid in the order in which they are received, out of the redemption fund; except after 120 premiums have been paid, at which time the reserve and tontine funds to the amount of the liability of this certificate may be used. All premiums must be paid until the application is reached and paid, or until 120 premiums have been paid.
    Death — In the event of death of the original owner of this certificate, his legal representatives may avail themselves of the following options:
    1st. Continue the performance of this contract in the stead of said certificate owner, without the payment of transfer fee.
    2nd. At any time within 60 days after death, make application in form required by the company, for the death surrender value of this certificate, which shall be the total amount of premiums paid hereon at the time said application is made. This option may be taken advantage of by the legal representatives of the original purchaser hereof only, and upon not to exceed fifty certificates.
    All premiums due hereon must be paid according to this contract until such application has been made. Applications will be paid in order of their receipt, out of the redemption fund, after all cash surrender values have been paid. If the amount available in any month to pay all death claims be insufficient, then those unpaid are taken up in succeeding months in their regular order.
    Redemption — The company reserves the right to call in this certificate for redemption at any time after six monthly premiums shall be paid hereon, and before maturity.
    Maturity — The 120 premiums having been paid in full on this certificate, shall render said certificate fully paid and eligible to mature, and it will be paid immediately out of the reserve and tontine funds, if the apportionate share to its credit in said funds, with the interest accumulations thereon, equals the total amount of payments hereon, together with interest at the rate of six per cent, per annum; otherwise, when the apportionate share to its credit in said fund, with the interest accumulations thereon, equals the total amount of the payments hereon, together with interest at the rate of six per cent, per annum; provided, however, that such date of payment shall not be later than the time when the sum of all premiums paid hereon, less not to exceed 10 per cent, thereof deducted for expenses, if said sum had been invested at the current rate of interest, compounded semi-annually, would equal the total amount of the premiums paid hereon, together with interest at the rate of six- per cent, per annum. If this certificate be a non-contributing, non-forfeitable one, it will be eligible to mature at any time after one hundred and twenty months, when the amount to its credit in the reserve and tontine funds, equals the guarantee value at the time it became non-contributing.
    Loans — At any time after the last day of the twelfth month from the date of this certificate, all monthly premiums due hereon having been paid in full, the owner may make application for a loan, not to exceed its liability, on December 31st, preceding. This certificate will be accepted as collateral to a note for the loan and must be deposited with the company. The loan may be made only at the option of the company, and from any of its loanable funds. If the owner fail to keep this certificate in force, then, in default of a monthly premium due hereon, it shall immediately become due and payable out of the redemption fund, for its surrender value. From the proceeds of said redemption, the note with all interest due thereon, shall first be paid; the remainder, if any, shall be paid to the owner, and the company shall be relieved from any other or further liability on this certificate, and the owner likewise shall be relieved from liability on his said loan and note.
    Transfer — This certificate is transferable, but only on the books of the company, and a fee of $1.00 is charged. When a transfer is desired, fill out one of the assignment blanks on the back of this certificate, with the name of the person to -whom it is to be transferred written on the first line, and the signature of the owner on the second line, then forward the certificate, together with the fee, to the company to have the transfer recorded.
    Loss — In case this certificate is lost or destroyed, the owner may have a duplicate issued by making an affidavit upon a blank furnished by the company, and the payment of a fee of one dollar.
    Authority of Agents — No promises, representations, or agreements of any officer, agent or employe, not contained herein shall be of any binding force or effect on the company; and no officer, agent or employe has any authority to change or modify in any manner whatever, the terms, regulations, conditions or provisions of this contract.
    There is likewise printed into and as a part of the terms and conditions what is called a table of values, which indicates the value of such certificate upon the respective months of the existence of the certificate, there being first the guaranteed value; second, the estimated maximum endowment value, and third the cash surrender value of such certificate.
    Said table of values is as follows:

      Series D. No.
    The Interstate Savings Investment Company.
    General Offices, Cincinnati, Ohio.
    By this accumulative endowment certificate does promise and agree to pay to...................... or order, subject to the terms and conditions herein, and in the application herefor contained, at or before maturity of the coupons hereto attached, an amount equal to all the payments made on said coupons respectively, together with interest thereon at the rate of four (á%) per cent, per annum, and in addition thereto, a share of the net surplus earnings of said company to said coupons apportioned pro rata respectively, not to exceed the amounts as shown in the schedule of values herein contained.
    In witness whereof, the said Interstate Savings Investment Company has by its duly authorized officers, signed, sealed and delivered, this contract this ........day of.........., one thousand nine hundred..............
    (Seal.) ................, President.
    (Seal.)' ................, Secretary.
    'Such certificate, when sold and issued by the company to the purchaser, has filled into it, by an officer of the company, the name of the holder, together with the date of the purchase.
    Upon the inside of said certificate are printed the terms and conditions attached to the investment certificate as printed upon its outside page one. Said terms and conditions are as follows:
    TEEMS 'AND CONDITIONS.
    Premiums — This accumulative endowment certificate, with five coupons attached, is issued in consideration of the promise and written agreement in the application of the purchaser hereof to pay a monthly premium of $1.00 per coupon on each coupon attached hereto, until 120 of such monthly premiums shall he paid. Provided, however, that when any of said coupons are redeemed or' otherwise retired, monthly premiums on such coupons shall then cease. Such monthly premiums must be paid at the main office or to a properly authorized collector of the company, between the hours of 9:00 A. M. and 5:00 P. M., on the first day of each month after date of issue, without notice. Provided, however, if the first day of the month falls upon a Sunday or a legal holiday, said premiums are due between said hours on the first legal day thereafter. Premiums may be paid annually, semi-annually or quarterly, in advance.
    Fines — If said premiums are not paid by 5 P. M. on the loth day of the month, a fine of 10 cents per coupon will be assessed. If all delinquent premiums and fines assessed on the coupons hereon are not paid at or before 5 P. M. on the 25th day of the month in which they are due, this certificate shall be deemed to be lapsed, and will not be eligible to participate in the redemption for the month for which the premium is in default, and all premiums paid hereon shall be forfeited to the funds respectively to which they have been apportioned. Provided, however, this certificate may be reinstated Avithin sixty days, by the payment of the premiums due hereon and a reinstatement fee of one dollar.
    Remittances — All remittances made on this certificate are made at the risk of the owner. If any remittances hereon be mailed on the 15th or 25th days of the month in Avhich they are due, and if the date of mailing be verified by the postoffice stamp, then this certificate shall not be subject to a fine or forfeiture. When the 15th or 25th falls on a Sunday or a legal holiday, then the first business days respectively thereafter, shall be regarded the same as the 15th and 25th of the month. No receipt for premiums is valid without the signature of the treasurer, or of some one acting by his written authority.
    Apportionment op Premiums — The first six months’ premiums are passed to the credit of the reserve and expense funds, provided, that not less than twenty-five per cent, thereof shall be passed to the credit of the reserve fund. All subsequent premiums are apportioned to the reserve, the redemption and the expense funds, as follows: Not less than twenty-five per cent., and such greater per cent, as shall be necessary to provide for the payment of the coupons hereto attached at maturity, to reserve; not more than ten per cent, to expense; the balance to redemption.
    Reserve and Tontine Funds — The reserve contributions on unretired coupons shall constitute the reserve fund. The reserve contributions on retired coupons shall constitute the tontine fund. The ton-tine fund and reserve fund, together with their interest earnings, shall be used to retire matured coupons.
    Redemption Fund — The redemption fund shall be used, First, to retire coupons at cash surrender values; Second, to retire coupons at death surrender values; and, Third,' to redeem coupons in accordance with the method of redemption hereinafter set forth.
    Surplus Fund — All fines, transfer fees, reinstatement fees and interest earnings thereon, shall constitute the surplus fund. Said fund shall be used in the discretion of the board of directors for the uses and purposes of the business of the company. •

      Classes — Certificates are issued in monthly classes, designated by the name of the month and year of their issue. The reserve and tontine funds created by each class are apportioned respectively to such class. When, by reason of the retirement of all of the coupons belonging to a class, the reserve fund of that class has been passed to the. credit of the tontine fund of that class, such tontine fund shall be apportioned to the tontine funds of all the classes having coupons unretired, upon the basis of the number of reserve contributions made by the classes respectively. Such distribution to be made only on December 31st of each year.
    Liability — The company’s liability on this certificate shall be the amount of the reserve credits together with interest earnings thereon, on its unretired coupons and in addition, based upon the number of its unretired coupons, its proportionate share of the tontine fund, including interest earned thereon, belonging. to its class.
    Non-Forfeitable — The monthly premiums on coupons attached to this certificate, having been paid in full to and including the thirty-sixth month from the date of issuance hereof, shall render it non-forfeitable. Should the payment of premiums hereon be continued after it has become non-forfeitable, it shall become a contributing, non-forfeitable certificate, and the coupons, when redeemed, shall be entitled to their redemption value. Should the payment of premiums be discontinued at any time after the thirty-sixth month, it shall be considered a non-contributing, non-forfeitable certificate, and the coupons will not be eligible for the cash surrender privilege or for redemption, but must be held to be paid at maturity, and when paid will be entitled only to the amount paid in premium^ on attached coupons.
    Surrender Value — At any time after one year from the date of this certificate, provided all premiums have been paid in accordance with the terms hereof, the owner may make application for the cash surrender value of the attached coupons; said value shall be the guaranteed cash surrender value, as per the table of values set forth herein. Applications will be paid in the order in which they are received, out of the redemption fund; except after 120 premiums have been paid, at which time the reserve and tontine funds to the amount of the liability of this certificate may be used. All premiums must be paid until the application is reached and paid, or until 120 premiums have been paid.
    Death — In the event of death of the original owner of this certificate, his legal representatives may avail themselves of the following options:
    1st. Continue the performance of this contract in the stead of said deceased certificate owner, without the payment of transfer fee.
    2nd. At any time within 60 days after death, make application in form required by the company, for the death surrender value of this certificate, which shall be the total amount of premiums paid on its unretired coupons at the time said application is made. This option may be taken advantage of by the legal representatives of the original purchaser hereof only, and upon not to exceed fifty coupons.
    All premiums due hereon must be paid according to this contract until such application has been made. Applications will be paid in order of their receipt, out of the redemption fund, after all cash surrender values have been paid. If the amount available in any month to pay all death claims be insufficient, then those unpaid are taken up in succeeding months in their regular order.
    Redemption — The company reserves the right to call in for redemption any or all of the coupons attached to this certificate at any time after six monthly premiums shall be paid thereon, and before maturity. When coupons are called in for redemption before maturity, the order of payment shall be one coupon on each certificate in consecutive order, beginning with the lowest numbered certificate and reverting when the highest numbered certificate eligible for redemption has been reached. The company reserves the right at any time to call in and redeem in consecutive order, the oldest certificates in force.
    Maturity — The 120 premiums having been paid in full on the attached coupons, shall render said coupons fully paid and eligible to ‘mature, and they will be paid, immediately out of the reserve and tontine funds, if the apportionate share to the credit of each coupon in said funds, with the interest accumulations thereon, equals the total amount of the payments on such coupons, together with interest at the rate of four per cent, per annum; otherwise when the apportionate share to the credit of each coupon in said fund, with the interest accumulations thereon, equals the total amount of the payments on such coupons, together with interest at the rate of four per cent, per annum ; provided, however, that such date of payment shall not be later than the time when the sum of all of the premiums paid'on the unretired coupons hereon, less not to exceed 10 per cent, thereof deducted for expenses, if said sum had been invested at the current rate of interest, compounded semi-annually, would equal the total amount of the premiums paid on such unretired coupons, together with interest at the rate of four per cent, per annum. If this certificate be a non-contributing, hon-forfeitable one, the coupons attached hereto, will be eligible to mature at any time after one hundred and twenty months, when the amount to their credit in the reserve and tontine funds, equals the amount paid as premiums thereon.
    Loans — At any time after the last day of the twelfth month from the date of this certificate, all monthly premiums due hereon having been paid in full, the owner may make application for a loan, not to exceed its liability, on December 31st, preceding. This certificate will be accepted as collateral to a note for the loan and must be deposited with the company. The loan may be made only at the option of the company, and from any of its loanable funds. If the owner fail to keep this certificate in force, then, in default of a monthly premium due hereon, it shall immediately become due and payable out of the redemption fund, for its surrender value. Prom the proceeds of said redemption, the note with all interest due thereon, shall first be paid; the remainder, if any, shall be paid to the owner, and the company shall be relieved from any other or further liability on this certificate, and the owner likewise shall be relieved from liability on his said loan and note.
    Transfer — This certificate is transferable, but only on the books of the company, and a fee of $2.00 is charged. When a transfer is desired, fill out one of the assignment blanks on the back of this certificate, with the name of the person to whom it is to be transferred written on the first line, and the signature of the owner on the second line, then forward the certificate, together with the fee, to the company to have the transfer recorded.

      Loss — In ease this certificate is lost or destroyed, the owner may have a duplicate issued by making an affidavit upon a blank furnished by the company, and the payment of a fee of one dollar.
    Authority of Agents — No promises, representations, or agreements of any officer, agent or employe, not contained herein shall be of any binding force or effect on the company; and no officer, agent or employe has any authority to change or modify in any manner whatever, the terms, regulations, conditions or provisions of this contract.
    There is likewise printed into and as a part of the terms and conditions what is called a table of values, which indicates the value of such certificates upon the respective months of the existence of the certificate, in which said table there is no death benefit or paid-up value, the death benefit being the endowment value, and there is no paid-up value. Said table of value is as follows :

      Attached to the certificates are printed five coupons, A, B, C, D and E, respectively, which said coupons are as follows:

      John M. Sheets, Attorney General, J. E. Todd, Smith W. Bennett and Swing, Cushing & Morse, for plaintiff.

      Charles IF. Baker, Michael G. HcJatz and Dioighi Harrison, for defendant.

      Dyer, Williams é Stoufer, for A. W. Dorbert, a debenture holder.
   Davis, J.

The attorney general makes his contention for ousting the defendant from the privilege of doing business in Ohio, on the provisions of certain contracts, or debentures, denominated by the defendant company “Accumulative Endowment Certificates,” distinguished as series A, series B, series C, and series D. It is claimed that the defendant has misused its corporate franchises and privileges in issuing these debentures, because they are upon the face of them, in contravention of law. It is insisted on the part of the relator, that some, at least, of these debentures are vitiated by containing elements of chance and prize so as to constitute a lottery scheme, and that all of them are calculated to deceive and defraud an unsuspecting public. The question here is not whether the promoters of the defendant company have intentionally devised a scheme to mislead and defraud; but whether that is the effect of it. The promoters and the investors may be self-deluded, or satisfied to take the chances offered; but that does not alter the character of the scheme. If the company is misusing its corporate privileges in such way as fo be a public abuse, the writ must issue regardless of the intent. Nor are we now called upon to draw the line of demarcation between such insurance and investment methods as have been approved by the law and the schemes now under consideration. We are not considering life insurance methods, tontine or other, building and loan associations, or investment companies in general. We are only concerned with the question whether the methods of this company are lawful or not. In this connection we recur to the averment in the answer to the effect that the defendant has literally complied with the requirements of an act of the legislature of Ohio “to regulate certificate bond and investment companies, partnerships and associations, other than building and loan companies, and to regulate investment guaranty eompanies, partnerships and associations doing business on the service dividend plan, and to protect holders of their certificates, debentures and securities,” and that the defendant has received from the secretary of state the certificates authorized by that act. If this averment was inserted in the answer with the understanding that compliance with the statue referred to legalized the financial schemes now under consideration, it is based on an erroneous theory. The legislature is presumed to have contemplated that a corporation thus authorized to do business in this state would exercise its franchises within chartered limits, and in a manner not injurious to the public. Leslie v. Lorillard, 110 N. Y., 531; People v. North River Sugar Refining Co., 121 N. Y., 582. This law was enacted expressly to regulate bond and investment companies and to protect the holders of their certificates. The legislature could not, and did not assume to, exercise judicial power by declaring that acts or contracts of such companies, which are inherently immoral and. prejudicial to the public welfare or unconstitutional should be lawful. Nor did the legislature undertake to declare public policy in regard to bond and investment companies further than that they should be regulated and that the holders of their securities should be in some measure protected.

It would serve no good purpose to detail the processes by which we have reached our conclusions after having carefully considered all of the elaborate arguments which have been submitted.

An inspection of the different classes of “accumulative endowment certificates” issued by the defendant, discloses that in none of them does a certificate absolutely and certainly mature within any fixed and definite period; yet the certificates are all so drawn as to create the expectation, and to make it appear, that they wall mature in a period of one hundred and twenty months. With all the light which we have received from counsel and other sources, we have been unable to persuade ourselves that the credit, to any of these classes of certificates, in the reserve fund, or in the reserve and tontine funds, will equal the endowment val ue within the stipulated periods, without the aid of lapses or the apportionment of funds derived from new business. Indeed it is almost self-evident that with seventy-five or eighty per cent, of the premiums received consumed in expenses and monthly redemptions, the reserve credits could not equal the endowment value in several times the periods stipulated. In other words, twenty or twenty-five per cent. of. the premiums, with its interest earnings, alone and unaided by lapses or the appropriation of money from premiums received for new business, will not sufficiently accumulate to equal the represented endowment value in the stipulated periods. A little calculation applied to the representations in any of these tables of values will demonstrate this proposition. If this deficiency in the reserve should be made up by appropriating premiums received on new business, it is obvious that in redeeming the old obligations new and greater ones are created, making the possibility of ultimate redemption of all the obligations still more problematical. But if the deficiency should be made up by lapses or forfeitures, it is equally clear that the lapses must be very numerous, so numerous in fact as to eventually destroy the credit of the company and bring ruin upon it. A scheme which can succeed only by lapses is manifestly a scheme which will enrich some at the expense of others who embark in the same enterprise. It holds out the inducement that those who may be strong enough to survive will find their profit in the weakness, the misfortunes and the discouragements which cause a larger number of their associates to fall by the way. Moreover, since the salvation of the company depends on these lapses, it necessarily tends to encourage and produce them. True enough, all of these certificates are non-forfeit-able after thirty-six monthly payments; but that only signifies that a larger number must fail in the first three years or that the whole scheme must fail, for the vice of the plan is, not that some may fail, but that many must fail in order that all continuing certificates shall mature. Formerly the profits from this source to life insurance companies were. understood to be very large and public attention being drawn to it, in many of the states laws regulating the non-forfeiture of policies were enacted; and such has been the force of public opinion, and public policy as expressed in these statutes, that it is believed that no standard company can be found which counts upon lapses as a necessary element in determining its ability to carry out its contracts; and all such companies so calculate as to carry out their contracts even should no lapses occur, except perhaps in some forms of tontine insurance. Indeed there is no fixed rate or percentage of lapses Avhich can be used as a basis of calculation. The percentage of lapses varies Avith different companies, and at different times Avith the same company. Shall this fallacious and uncertain element, which has thus been in so large a measure eliminated from legitimate business methods, be encouraged to reappear and to delude the inexperienced and the unwary? We cannot conceive it to be our duty to lend such encouragement.

But wherein is the chief attraction held out to the public by the defendant? In series A the certificates, or rather some of them, are liable to be matured fortuitously at periods more or less extended from the time of their issue. This is done by taking a percentage of the total number of contracts in force each month. This percentage, it must be observed, Avill be as Available and uncertain as the contingencies of business will make it. The numeral being thus determined the certificates are arbitrarily matured by beginning the count “with the oldest certificate in force (after the surrender and special redemptions have been made for the month) and continued through as many live certificates as the numeral indicates, the last one counted being the one called in for payment. Proceeding to count in like manner from the certificates so called in, the second one to be paid is reached; this method is continued until the sum of all the values of the certificates thus called in equals the amount in the regular redemption fund.” Turning now to the table of values in series A, we find that if a certificate is so redeemed at the end of twelve months the holder will receive $4.00 more than he has paid, that is 66 2-3 per cent, per annum simple interest on his investment for an average of six months, If a certificate should be redeemed at the end of twenty-four months the holder’s profit would still be 66 2-3 per cent, per annum upon his investment for an average of twelve months. If a certificate should be redeemed at the end of thirty-six months the holder’s profit would still be 66 2-3 per cent, per annum upon his investment for an average of eighteen months. From this point, the point at which the certificates become non-forfeitable, the percentage of profit decreases until at the one hundred and twentieth month it has gone down to 20 per cent, per annum simple interest on an investment of $120.00 for an average of five years. The rate of profit being unequal, the prize in this scheme is a large profit and quick return to the fortunate holder of a certificate selected for redemption, and the gaming chance is that his certificate will be called in for early redemption by the “numeral-apart” system of selection. Yet in face of all this counsel ask: “How can a scheme be a lottery in which there are no blanks and all investors for the payment of the same sums receive the same prize?” The blanks are all the numbers included in the extent of the “numeral-apart,” except the last one, which draws a prize, and the prize is pointed out above. Our conclusion is that series A is a lottery and unlawful, and that none of the schemes of defendant, as shown in certificates of series A, B, C and D will legitimately “finance out,” as represented. It follows that the demurrer to the answer should be sustained and that the prayer of the relator should be granted.

It should be added as the opinion of the whole court that it is the duty of the state treasurer to hold and distribute the fund deposited with him," in trust for the holders of the debentures in this state, according to the amount that may be found due to each one.

'Judgment of ouster.

Minshall, G. J., Williams, Bürket and Spear, JJ., concur.