text:
    The Ohio Life Insurance and Trust Company v. Henry L. Reeder et al.
    Where a debtor mortgages property to bis indorser to indemnify him against liability on his indorsement, the creditor cannot in chancery be substituted to the rights of the surety, in a case where no judgment has been rendered against either principal or surety, and where there is no allegation in the bill that either is insolvent, or that the debt cannot be collected by judgment and execution at law.
    Che creditor can only be substituted to the rights of the surety, and the surety is not damnified till judgment has been rendered against him.
    This is a bill in chancery, reserved in Hamilton county, and is submitted upon demurrer.
    The bill, in substance, alleges that Henry L. Reeder, on the 7th of January, 1845, made to Nathaniel Reeder a mortgage, conveying certain real estate, conditioned for the payment of $3,800 due said Nathaniel; and likewise to secure and save said Nathaniel harmless against certain indorsements that he had made for him, to the several banks of Cincinnati, amongst which were three notes payable at the Ohio Life Insurance and Trust Company. The bill further sets forth that on the 2d day of January, 1846, Henry L. Reeder made to Nathaniel Reeder another mortgage on other real estate, conditioned to protect and save said Nathaniel harmless as his indorser on a number of other notes, all of which are mentioned in the mortgage.
    It is also stated in the bill, that the Ohio Life. Insurance and Trust Company are the holders of two of these notes indorsed by Nathaniel; one for $500, dated Feb. 11th, 1845, and pay able in ninety days, and another for $750, payable in sixty days. That the first of these notes is covered by both of the mortgages, and the second one by the last mortgage.
    The bill also sets forth, that both these notes 'were regularly protested for non-payment; that due notice was given to Nar thaniel Reeder, the indorser ; and that Henry and Nathanie« Reeder neglect and refuse to make payment.
    The prayer of the bill is, that the mortgaged premises may be sold, and the proceeds applied to the payment of complain ant’s debt.

      V. Worthington, for complainant.
    The point in this case arises upon the following state of facts: Henry L. Reeder gave a mortgage to his brother Nathaniel to secure him against certain indorsements. The complainants holding two of the notes named in the mortgage, file' their bill to subject the mortgage property to pay the debts, against which the indorser is secured. The defendant Reeder demurs, thereby admitting the whole bill, but denying the legal consequences claimed.
    We had supposed such a mortgage inured in equity to the benefit of the holders of the debts, against which the indorser was thereby secured; and' that they or any of them could directly invoke the aid of the Chancellor to apply the property pledged to discharge the debt, and thereby relieve the indorser. But in this we may be mistaken, and must refer to the books.

      In 1 Equity Cases 93 (R.), concerning co-obligors and sureties, sec. 5, the law is thus laid down: “ A bond-creditor shall^ in this court, have the benefit of all counter-bonds or collateral securities given by the principal to the surety; as if A. owe3 B. money, and he and C. are bound for it, and A. gives C. a mortgage or bond to indemnify him, B. shall have the benefit of it to recover his debt. Maure v. Harrison, Mich. 1692.”
    In Bacon’s Abridgt. 700, the law is thus given in like terms : “ In equity, a bond-creditor shall have the benefit of all counter-bonds or collateral securities given by the principal to the surety, as if A. owes B. money, and he and C. are bound for it, and A. gives C. a mortgage or bond, to indemnify him, B. shall have the benefit of it to recover his debt. Maure v. Harrison, Abr. Eq. 93.
    In 1 Story’s Equity 481, sec. 502, the commentator, after stating the rights of the surety to collaterals given to the creditor, says: “ On the other hand, if a surety has a counter-bond of security from the principal, the creditors will be entitled to the benefit of it; and may in equity reach such security to satisfy his debt.” So, also, in sec. 638, he says: “ And on the other hand, if a principal has given any securities to his surety, the creditor is entitled to all the benefit of such securities in the hands of the surety, to be applied to the payment of his debt.”
    In 19 Ves. Rep. 345, it was settled, that securities held by a banker against his acceptances, were available to the bill holders, not directly, but through the equity of the acceptor, or the assignee under a commission of bankruptcy against him, to have them applied in discharge of the acceptances.
    In 9 Paige Rep. 435, the Chancellor says: “ It is well settled, however, that where a surety, or person standing in the situation of a surety, for the payment of a debt, receives a security for his indemnity, the principal creditor is, in equity, entitled to the full benefit of that security. And it makes no difference that such principal creditor did not act upon the credit of such security in the first instance, or even knew of its existence. Thus, in Maure v. Harrison (1 Eq. Ca. Abr. 93), it was held that in equity, a bond-creditor was entitled to the benefit of all counter-bonds or collateral securities given by the principal debtor to his surety. And that the holder of a bond was, therefore, entitled to the benefit of a bond and mortgage given by the principal debtor to his surety in the bond, for the indemnity of such surety. So in the case of Ex parte Perfect, (Mont. Bank Rep. 25) the vice Chancellor of England decided that the indorser of a bill of exchange had an equitable claim to property deposited with the drawee, as security against the payment of the bills accepted by him. The same principle was acted upon by the Supreme Court of this state in the case of the Bank of Auburn v. Troop, (18 John. Rep. 505,) upon an application to the equitable powers of that court. (See, also, Parsons v. Buddock, 2 Verm. Rep. 608; Waring and others, Ex parte, 19 Ves. 345; Ex parte Par, Buck’s Bank. Ca. 191; Ex parte Prescott and others, 3 Deac. and Chitty’s Rep. 218.”)
    In 9 Paige Ch. Rep. 452, the Chancellor says: “ Eor it is a well settled principle of this court, that the creditor is entitled to the benefit of all the collateral obligations for the payment of the debt, which any person standing in the situation of a surety for others, has received for his indemnity, and to discharge him from such payment.”
    In 11 Conn. Rep. 119, the judge says: “It was holden, more than a century ago (1692), in the case of Maurey. Har~ rison, 1 Eq. Cas. Abr. 93, that a bond-creditor shall have the benefit of all counter-bonds or collateral securities given by the debtor to the surety. And this principle has ever since been recognized as elementary in courts of equity. The cases on this subject are all collected and well considered by Bissel, J., in the case of Homer v. Savings Bank, 7 Conn. Rep. 478 — and they entirely establish the general doctrine for which the plaintiffs contend ; and their authority this court recognizes.”
    In 15 Conn. Rep. 383, the judge says: “ If the fund or pledge be m the hands of the surety for his indemnity, the creditor may, if he has no other remedy, compel its. application to the payment of the debt.”

      It is supposed by counsel, that the complainants should have first put their notes in judgment, and then, as intimated by the judge in deciding the case in 15 Ohio Rep. 263, they “ might, in equity, subject the property mortgaged by the principal debtor’ to the security, as indemnity, to be sold for the satisfaction of such judgment.” With due deference, I do not perceive the force of the judicial intimation. Our courts of record in Ohio, have jurisdiction in all cases properly cognizable by a court of chancery, in which plain, adequate and complete remedy cannot be had at law. ' If, then, the powers we invoke be cognizable by a court of chancery, and not exercised by a court of law, except in the assumption and application of chancery principles to special cases, as in 18 John. Rep. 505, we affirm the complainants are entitled to the relief sought, without a judgment, as the power we invoke, does not make its exertion depend upon a judgment upon the part of a creditor. ,
    It is truc, a judgment creditor may file a bill to remove incumbrances or obstacles out of his way, or he may file a bill to charge equities; but such a right in either case, calls in other powers than the one now under consideration.
    We claim broadly, that a mortgage given by a debtor to indemnify his surety inures directly to secure the creditor, and it is not in the power of the surety to discharge the mortgage, if the creditor be not paid; and such being the case, the creditor can file his bill directly to have the property mortgaged subjected to the satisfaction of his debt, because he has no plain, idequate and complete remedy at law to reach the mortgage premises. Were the complainants’ notes alone protected by the mortgage, then they might, as in a mortgage direct to them selves to secure a note, get along at law, as a sale at law on a judgment upon the notes protected, would extinguish the mortgage ; but as there are other creditors equally protected by the mortgage, the legal remedy on the notes fails, and there is no adequate relief but in chancery.

      0. M. Spencer, George JE. Pugh, and S. M. Part, for defendants.
    1. Whilst we do not controvert the proposition that a surety against whom judgment has been rendered, may, in all cases, file his bill to subject the security pledged to him for satisfaction of the judgment, and without paying the debt himself, we insist that the right of the creditor to be substituted for the surety is not of the same unlimited character.
    .The distinction between cases where the creditor can be substituted, and where he cannot, is this: When the security is given with the intention that it shall be applied for the payment of the debt and in exemption of the surety, he (the surety) is a mere trustee for the creditor, and substitution may be decreed; but where the security is to indemnify the surety only, against payment of the debt, it is personal to the surety, and there can be no substitution.
    Let it be remembered that in either case, the surety himself may come before the chancellor, and have the security applied to payment of the debt. But the creditor can only be substituted for the surety in those cases where the surety is a mere trustee.

      Green v. Dodge, 6 Ohio Rep. 80, is meagre upon this point, ■but it appears plainly to have been a case where the security was intended “to be applied to the extinguishment” of the ■debt. The reporter’s marginal note is this: “ When a security (surety) receives from the principal debtor demands, for the purpose of discharging the debt by their transfer to the credit- or, or by payment of the money collected, he holds the claims, or their proceeds, as trustee of the creditor.”- The very distinction for which we contend seems to have been in the mind of the court.

      Kramer v. The Bank of Steubenville, 15 Ohio Rep. 253, and McConnell v. Scott, 15 Ohio Rep. 401, were cases where the court acted at the instance of the surety himself.

      This mortgage was evidently executed merely to save N. .Reeder harmless — not to provide a fund for the benefit of the creditor — and therefore no one besides N. Reeder is entitled to use it. Suppose that a third person had given a mortgage to secure N. Reeder upon these indorsements (some person who was willing to stand between the indorser and the maker), would it be pretended, for a moment, that the creditor could be substituted to such a mortgage ?
    The condition of this mortgage is to secure N. Reeder upon other indorsements than those which the Trust Company holds. And being merely for his personal security, it will not be denied, we apprehend, that he may of his own will release the mortgage altogether. A fortiori, he has the right to manage it himself — to control the security pledged to him in such way as will afford indemnity upon all the indorsements — and to object to any substitution and management of the Trust Company, or of any other single creditor. This right he would have in any event, whether a trustee or not, and yet this bill proposes to disregard it.
    But his right becomes clear in a case like this, where the whole object of the mortgage is to protect him, and not to benefit the Trust Company or any creditor. If this bill be maintained, however, the very instrument made to secure him becomes the means of doing him injury — of putting his security out of his own hands into the hands of others — whilst the Trust Company, which H. L. Reeder did not care to protect, has every thing its own way, manages the security without reference to the wishes of him to whom it was originally given, and is preferred to the very man whom II. L. Reeder intended to protect.
    2. Our next proposition is, that, without fixing first the liability of the surety, the creditor cannot be substituted to the mortgage.
    The mere fact that the notes have not been paid, and that N. Reeder had notice of non-payment, does not violate the condition of the mortgage: he may have been released expressly, or by the creditor’s giving time to the principal, or by the credit- or’s refusal to sue the principal after notice. Nothing short of a judgment can fix his liability, and sometimes not even that. In Kramer v. The Bank of Steubenville, the judgment was spoken of as the very thing requisite. Per Judge Hitchcock : “ In consequence of the rendition of the judgment against him (the surety) he was so far damnified that he might, with propriety, have the property mortgaged to him, sold to satisfy that judgment.” 15 Ohio Rep. 268.
    Now, Nathaniel Reeder has never been damnified, according to the case made in this bill, and non constat he ever will be. The Trust Company can only claim through him, and, at present he has no claim at all — the condition of the mortgage not having been broken.
    3. The prime object of this mortgage is to secure N. Reeder’s own claim, and therefore he has a right to resist the sale of the premises. Even if the Trust Company could have substitution, it would, as .to N. Reeder’s own claim, be the second mortgage. All that the creditor can possibly do in this case, is to sell H. L. Reeder’s possessory interest and equity of redemption — and that, we submit, is a remedy equally applicable at law. To be sure the creditor can redeem the mortgage, but that is not prayed in this bill.
    Nathaniel Reeder (being, as to his own debt, the first mortgagee) has an estate in the land which cannot be extinguished, without his consent, otherwise than by payment of the money thereby secured. All the right of H. L. Reeder is a right to redeem the mortgage, and no second or third mortgagee can possibly have a greater right than has H. L. Reeder himself.
    This principle may be deduced from all the authorities. Cruise, defining the right of subsequent incumbrancers, says that they may redeem the mortgage by a bill; 2 Cru. Dig. 126. And Judge Story, speaking of “ the right of redemption,” says that “ such persons have a clear right to disengage the property from all incumbrances, in order to make their own claims beneficial or available.” 2 Story’s Eq. 340. Whilst the Trust Company can redeem N. Reeder’s mortgage, it cannot sell him out. It will not be pretended that H. L. Reeder could file a bill to sell the premises, and pay off the mortgage. McDonough v. Thur bridge, 2 Ball & Beatty 555, decides expressly that he cannot, and, indeed, to say that he can would be monstrous. Yet the Trust Company, be it remembered, can have no more rights against N. Reeder than the mortgageor has.
    We have said that the subsequent creditor can only redeem the mortgage, but the expression needs to be limited. There is one other remedy — to offer N. Reeder possession of the mortgaged premises, (that he may apply the proceeds thereof to the satisfaction of his debt,) or, if he refuse possession, have a receiver appointed. This matter is discussed by Judge Story (2 Eq. Jurisp. 163), and there it will be noticed how careful chancellors are to protect the first mortgagee.
    This is neither a bill to redeem, nor to appoint a receiver. It is a bill for sale, and neither redemption, nor a receiver, can be granted upon it. Story’s Eq. PL 40-43.
    In The matter of Bellows and Peck, 7 Law Rep. 129, Judge Story assumes our doctrine to be indisputable. “ We all know,” he says, “ what are the ordinary proceedings in bankruptcy in cases of mortgages. If the mortgagee chooses to come in under the bankruptcy and surrender his mortgage, for the purpose, of a sale of the property, the property is sold, and he will be entitled to prove as a creditor for the surplus due him beyond what the proceeds of the sale will satisfy. If he does not so come in, and the debtor has obtained a lawful discharge and certificate thereof, the mortgagee cannot proceed against him by a personal action for the debt. His sole remedy is to bring his bill for a foreclosure (if the assignee does not bring a bill to redeem) making the proper parties, and he will then be entitled to a foreclosure, unless the money is paid within the time prescribed by the court, by the assignee or other party in interest.”
    Mr. Smith (1 CL. Praet. 534-535) states specifically what relief a second mortgagee or incumbrancer has against the first mortgagee. It is a privilege of redeeming the first mortgage within a given time; and, in the event of failing so to redeem, the bill must be dismissed. In case of redemption, however, a sale upon the second mortgage is decreed.
    So, in Baird v. Kirtland, 8 Ohio Rep. 24, the court said that incumbrancers and purchasers, could only redeem the first mortgage. “ If Kirtland stands in the situation of a mortgagee, and in equity there is no doubt that he does, and these complainants have a right to redeem, then it is true their remedy is in this court.”
    The practice in chancery of selling an estate, subject to a prior lien, is quite familiar. Briggs v. The Planters’ Bank, 1 Freem. Miss. Rep. 585.
    Our doctrine is also very clear upon this consideration — that a mortgagee makes subsequent incumbrancers parties to his bill of foreclosure, and for the purpose of cutting off their right to redeem. If they be not made parties, they may afterwards redeem — even against a purchaser. Coote on Mort. 522.
    It being certain, therefore, that all the relief this court can give the complainant is a sale of this property, subject to N. Reeder’s mortgage, we insist that there is the same remedy at law- The Trust Company can have judgment against H. L. Reeder upon the notes, and levy (subject to N. Reeder’s mortgage) upon this land.
    The mortgageor. is in possession, and his possessory interest may be sold upon execution from a court of law. Ely’s Lessee v. McGuire, 2 Ohio Rep. 223; Lessee of Phelps v. Butler, 2 O. R. 224; Gray v. Tappan, Wright’s Rep. 117; The Bank of Canton v. The Commercial Bank, 10 O. R. 71; Seymour v. King, 11 O. R. 342.
    The sale of a possessory interest, upon execution, vests in' the purchaser the whole estate, equitable and legal, of the judgment debtor. Lessee of Jackson v. Williams, 10 O. R. 67. The debtor is estopped to deny that his entire interest passed. Scott v. Douglas, 7 Ohio Rep. (part 1st) 228.
    Such has long been the settled law as to every kind of equitable interest when coupled with a. legal estate of any charaeter — possessory or otherwise. And no one pretends, at this day, that an equity of redemption cannot be sold, when coupled •with possession, upon execution at law.
    Something upon the fact that the mortgageor’s possessory interest and equity of redemption, when sold upon execution, must be appraised as the unincumbered fee itself. That is unfortunate certainly, but it cannot be shown from the statute, nor from decisions, that the mortgageor’s interest, when sold by a court of chancery, may be appraised at any less. The eighth section of the act of 1838 (Swan’s' Stat. 719) directs that sales made upon decrees of equity, shall conform, in all respects, to sales upon judgments at law. The method of appraisement, therefore, is the same in both courts. Swan’s Stat. 473. The language of every decree of foreclosure and sale is, that the mortgaged premises (if payment of the money be not made) shall be appraised, advertised, and sold by the sheriff, in like manner as lands are usually appraised, advertised, and sold upon judgment and execution at law. The contrary and erroneous opinion arises from the fact that frequently the first mortgage is not set up, or the first mortgagee (equally anxious for his money as the rest) consents to- the sale, and thus the purchaser gets the whole premises. But where premises are sold subject to a mortgage, they must be appraised in chancery as at law. There is no reason, therefore, to seek the interference of equity upon that ground.

      Bx parte Jackson, 5 Ves. 377, (as to sales when the mortgageor is bankrupt,) affords much instruction upon this subject. In England the standing rule is that the assignee may petition the chancellor for a sale of the whole estate ; and if the incumbrancers consent, such a sale may be ordered. If they do not consent, the bankrupt’s equity of redemption alone .is soldi The matter of Bellows and Peck, 7 Law Rep. 27, already cited. In the case of Jackson, just referred to, it was adjudged by the Lord Chancellor, after deliberation and the advice of the attorney general as amicus curiae, that the estate of the second
      mortgagee even could not be sold, without his consent, upon the assignee’s petition. Et vide, 2 Bla. Com. 487.
    If, therefore, this be such a mortgage as does not admit substitution of the- creditor against the will of the surety, or if it be necessary to show that, as against the surety himself, the condition of the mortgage has been broken, or if, so far as regards N. Reeder’s individual claim, the Trust Company be only a subsequent mortgagee, and have therefore a remedy at law, the demurrer must be sustained.
   Caldwell, J.

The defendants having met the allegations of the complainant by a demurrer, we are called upon to decide whether the case made in the bill authorizes the action of a court of chancery.

Have the complainants the same right to proceed to foreclose these mortgages that they would have had, had the mortgages been given to secure their debt. Now it will be seen that these mortgages are not given for the purpose of securing the complainant’s claim; not for the purpose of raising a fund out of which the debt was to be paid. If so, a court of chancery would hold the mortgagee as trustee of complainants, and would subject the property to the accomplishment of the objects of the trust. The mortgages were given to Nathaniel Reeder for his own personal benefit and security — to save him harmless from his liability as indorser; and can only be resorted to, either by him or the complainants, when it becomes necessary to effect that object — when the contingent necessity contemplated in their creation has arisen.

That there are cases where a court of chancery will give the creditor the benefit of securities, given by the principal to his surety, as indemnity, is well established. Indeed where the liability of the surety has become absolutely fixed, as where judgment has been recovered against him, and his principal has become insolvent, and cases of a similar character, when a resort to his securities becomes absolutely necessary (other resources having failed) to save him harmless from his liability, there appears to be great propriety in a court of chancery permitting the creditor to proceed directly to appropriate such security to the payment of his debt. It prevents circuity of action, the surety is better indemnified, not being disturbed, unless his securities are insufficient; and the creditor has the benefit of having his claim satisfied.

Still we think in all such cases the governing principle on which the court proceeds, is the carrying out the great object in the creation of the indemnity — protection to the surety; the benefit to the creditor following rather as an incident.

Does the bill in this case show any necessity for either the surety or the creditor to resort to these mortgages ? Has the contingency happened on which their conditions were to become forfeited ? No judgment has yet been recovered either against principal or indorser — no suit has yet been brought — there is no allegation in the bill that the principal is not amply able to pay the debt. The indorser remains unharmed from his liability, and there is nothing alleged that shows that he will'not always remain so.

The Ohio Life Insurance and Trust Company seek in this case to be substituted to the rights of Nathaniel Reeder, in a contract made with him personally, for his own benefit; they can only claim such rights as have inured to him; he has not been damnified; the conditions of the mortgages are unbroken as to him; he can yet assert no claim under them; nor could the Trust Company, by being substituted to his rights.

In Homer et al. v. Savings Bank of New Haven, 7 Conn. Rep. 478, after reviewing the cases on this subject, the court distinctly decide, that where the security is given to the surety for his own protection, the creditor can only claim through him, and must be subject to all the equities to which he is subject.

But there is no allegation in the bill that shows that the notes held by the complainant could not be collected by the ordinary proceeding at law. It is true that it is alleged in the bill that complainants have not a remedy at law, and are obliged to resort to a court of chancery, and it is said by counsel in argument that the number of different liens on these mortgaged premises creates that necessity. If the complainants had a claim that would enable them to resort to this property, that would probably be true. But there is no allegation in the bill' that defendants have not sufficient property, subject to levy and sale on execution, to satisfy their claim — that a plain and adequate remedy cannot be had at law.

The substitution of a creditor, to the indemnities of the surety, is a high exercise of chancery powers, and will not be resorted to unless in cases where the ordinary remedies have failed.

The demurrer will be sustained.


source: Caselaw Access Project

author: Hitchcock, C. J.

license: Public Domain

text:
    Lessee of Carter B. Harlan’s Heirs v. David Thatcher and another.
    An individual who connects himself with a survey in the Virginia Military District as a purchaser under a tax sale, has such an interest in the survey, that he can protect himself under the act of Congress of March 2d, 1807, against a patent issued upon an entry and survey made subsequent to the survey under which he claims.
    A mistake in a survey does not render it void, but if it be a subsisting survey, although irregular or defective, it is within the meaning of that act.
    This is a writ of error to the Court of Common Pleas of Clinion county.
    The action below was ejectment. It was tried by the court, without the intervention of a jury, and judgment rendered for the defendants. Thereupon the plaintiffs submitted a motion for a new trial, assigning for cause that the finding of the court was against the law and evidence in the case, which was overruled, and a bill of exceptions thereupon tendered and signed, and made a part of the record in the case, setting forth the testimony.

      The error complained of is in overruling the motion for a new trial.

      B. B. Harlan, for plaintiff in error.
    6?. Boos, and D. Linton, for defendants.
   Hitchcock, C. J.

There is no little difficulty in extracting from the bill of exceptions in this case, as signed by the judges of the court, such a statement of facts as will present the question argued by the counsel for the parties, and upon the solution of which depends the disposition of the case. Before attempting to do this, however, it may be proper to say, that the motion overruled by the court of common pleas, and which decision is claimed to have'been erroneous, wTas made by the plaintiff in an action of ejectment, after a verdict against him. Such motions are rarely sustained in this form of action, especially where, as in the present case, the verdict is for the defendant. Notwithstanding this rule of practice, however, we have examined this case with a view to ascertain whether, in fact, the finding of the court below was against the evidence.

To sustain his action, the plaintiff offered in evidence a patent from the President of the United States, to Carter B. Harlan, for the land in controversy, bearing date the 12th day of March, 1889. This patent was based upon an entry and survey made in February of the same year in which it bears date. The plaintiff further proved the death of Carter B. Harlan, and that his lessors were the heirs of said Harlan, and rested his ease.

On the part of the defendant it was insisted that this patent to Harlan, as well as the entry and survey upon which it was based, were void, under the act of March 2, 1897. (Ohio- L. L. 134.) This act gives further time to those holding Virginia military land warrants to locate the same, but contains the following proviso : “ That no locations-as aforesaid, wfithin the above named tract, shall, after the passing of this- act,, be-made on tracts of land for which patents had been previously issued, or which had been previously surveyed ; and any patent which may, nevertheless, be obtained, for land contrary to the provisions of this seetion, shall be considered as null and void.”

To maintain the position that this patent to Harlan of the 12th March, 1839, is void, the defendants introduced a copy from the books of the principal surveyor of the district, showing that on the 10th of August, 1787, an entry, No. 841, of 1,000 acres, was made in the name of Thomas Shaw, assignee, covering the land in controversy. This entry purports to have been made upon military warrant No. 289, and was surveyed on the 14th March, 1794.

If this is a valid and subsisting survey, and the defendants connect themselves with it, so as to enable them to set it up by way of defense, then the finding of the court below was unquestionably in accordance with the law and facts of the case.

On the part of the plaintiff, it is insisted, first, that the defendants do not connect themselves with this survey, and in the second place, that the survey itself is absolutely null and -void. Do the defendants show that they have any interest in, or connection with, this survey ? It appears from the bill of exceptions, that in 1831, five hundred acres, or one half of this survey, was sold for taxes to one Warren Sabin. That sub.•sequently' the auditor of the county, in pursuance of the sale, ■convoyed the land to Sabin, who went into possession. Subsequently the land was sold as Sabin’s land, by the sheriff of the ■county of Clinton, on execution against Sabin. The defendants claim title under a conveyance from those who purchased at sheriff’s sale, either mediately or immediately; and are in possession. They are in possession claiming title.

■But, say the counsel for plaintiff, this tax sale was irregular and void, and therefore conferred no right upon the defendants. It may be so,, but -who has the right to contest the title of the defendants ? Certainly an entire stranger cannot do it, they being,in possession. And if, under the law of 1807, the patent under which the lessors of the plaintiffs claim, is void, they are m the same situation with any other stranger. If a mere intruder could not set up the survey of Shaw to defend against the patent of the plaintiff, neither can those claiming under the patent, that being void, question the title of those in possession of the survey under a tax title. The validity of this tax sale can alone be questioned, in a suit between Shaw, in whose name the survey was made, or some one claiming under him, and the tax purchasers. Or, perhaps it would be more proper to say, in a suit between the rightful owner of the survey and the tax purchasers. In the opinion of the court the defendants so far connect themselves with the survey of Shaw, that they have the right to avail themselves of that survey to defeat the patent of the plaintiff, if that was a subsisting survey at the time the survey of Harlan was made, and the patent issued.

The validity of that survey is contested by the plaintiff, and whether it be a valid survey is the only real question in the case. We do not suppose the mere act of surveying land in the military district, without authority of law, withdraws the land so surveyed from location, by one who holds a military warrant unlocated. In order to avoid a subsequent patent, the survey must be by one or for one having some right, or color of right. It must be made in good faith. Under such circumstances, although it may be informal or irregular, its owner will be protected.

In the case under consideration it is claimed that survey No. 844 is void and of no effect, because it purports to have been made upon warrant No. 289 ; and it is said that this warrant has been fully satisfied by other lands, and this fact is proved by the introduction of patents which have been issued for surveys made under the warrant. True, it does not appear explicitly whether the entries, pursuant to which these surveys were made, were prior or subsequent to entry No. 844. But perhaps this is not very material in the view which we take of the case.

From copies introduced from the books of the principal sur veyor of the district, it seems that Thomas Shaw, as assignee, held a military land warrant for 4666-J acres of land. This warrant was number 285. From a book which is called, I be lieve, a lottery book, it appears that this warrant was so divided or apportioned, that 1,000 acres was to be, as was intended, as number 12,1,000 acres as number 27, 1,000 acres as number 884, and 1666J acres as number 1842. How thi3 was done I do not undertake to say, but merely state the fact.

Number 12 was entered on the 20th July, 1784, referring to the right number of the warrant, that is, No. 285, and was surveyed in 1785. This entry was made, as I suppose, in Ken tucky, and was for one thousand acres. Number 27 was entered on the same day, and also surveyed in 1785. In this entry and survey the quantity is one thousand acres, and the number of warrant 285. No. 1342 was entered 17th August, 1787, for 1666-| acres, and was surveyed by John O. Bannan, deputy surveyor, the next day. In this entry the number of warrant is 285. Here we'have three entries and three sur veys in Shaw’s name, upon warrant No 285, containing, in the whole, 2666f acres, and leaving 1,000 acres of the warrant still to be located. On the 10th August, 1787, No. 844 is entered in the name of Shaw, as had been the other entries referred to, and containing 1,000 acres of land. This entry was surveyed by John O. Bannan. The entry, however, purports to be made upon warrant No. 289, instead of 285, and covers tho land in controversy. There is nothing in the case to show, that the last thousand acres called for in the warrant of Shaw, was ever located unless by this number 844. From 1794 until 1839, a period of nearly fifty years, no one, so far as we know, ever undertook to interfere with this survey. Now under these circumstances, we cannot doubt but that this entry was intended to be made — was in fact made — upon warrant number 285, and that the insertion of 289 was a sheer mistake.

If so, did Shaw acquire no interest in the survey ? It seems to us that he did acquire an interest, and that the mistake might have been corrected. Indeed, we believe that upon a proper representation being made to the government, a patent would have been issued. This, then, was not a valid survey — a survey made without color or pretense of right — but was such a survey as under the law of 1807, withdrew the land from subsequent location. Counsel seem to suppose that by so deciding, we undertake to correct a mistake in a court of law. Jt is not so. All that the court below said, and all we undertake to say is, that this survey No. 844, made as it was, is saved by the proviso in the act of 1807. And in so deciding, it seems to us that we are sustained by the decisions of the Supreme Court of the United States.

In the case of Jackson v. Clark and Ellison, 1 Peters 628, that court gives a construction to the proviso of the act of 2d March, 1807. In that case it is held that this proviso was not intended for the protection of valid and regular surveys alone, because these need no protection. But the clause was introduced for the protection of defective entries and surveys, which might be defeated by entries made in quiet times. The survey before the court in that' case, had been made upon a warrant which had been satisfied • by previous entries and surveys; still the court held that it was not therefore void, but for the purpose of defeating a patent, emanating upon an entry and survey made subsequent to the act of 1807, might be considered as a valid, subsisting survey, within the meaning and intent of that act. The survey upon which -the defendant relied in that case had been made in 1796, and the entry upon which the plaintiff relied, and in pursuance of which his patent was issued, was made in 1824.

It seems to the court that the facts of the case referred to were not mox-e favorable to the defendants, if as much so, as is the one now before this court; and upon full consideration we are of opinion that there was no error in the judgment of the court of common pleas, and that judgment is therefore affirmed with costs.


author: Spaldins, J.

text:
    The Ohio Life Insurance and Trust Company v. Thomas McCague.
    Where a bill of exchange was protested for non-payment in New York, and the agent of the holder by the next mail sent notice of protest to the drawer, who resided at Ripley, Ohio, under cover to the holder at Cincinnati, who sent the notice to the drawer by the next mail; Held, that the notice waa sufficient to charge the drawer.
    The words “ bonds, bills and notes,” in the act for the relief of sureties and bail in certain cases, includes bills of exchange.
    When the holder of a protested bill of exchange refuses, upon notice given under the statute by an accommodation drawer, to commence suit against the acceptor by the next term of the court after such notice, the drawer is discharged.
    This is a writ of error to the Court of Common Pleas of Brown county.
    The facts, as they appear from the pleadings, and the bill of exceptions, are substantially as follows: On the 25th day of October, 1847, the Ohio Life Insurance and Trust Company instituted the present action against Thomas McCague as drawer and indorser of a bill of exchange for six thousand dollars, drawn upon and accepted by Eli Collins, and protested for nonpayment. The plea of the defendant was the general issue, to which he attached a notice of special matter, which he should offer in evidence, and which consisted of the following facts, viz: That he was only surety for Collins upon said bill, of which the plaintiff had notice ; and that on the 19th day of March, 1847, the defendant, in pursuance of the statute, notified the plaintiff in writing, that he was apprehensive said Collins was or would become insolvent, so that it would be extremely difficult, if not impossible, to recover the amount of said bill from Collins, in case the defendant should be compelled to pay the same, and required the plaintiff to put it in suit forthwith ; and that the plaintiff did not, within a reasonable time thereafter, commence an action against Collins, nor proceed by due course of law to collect the amount thereof from him: whereby his right to collect the same from the defendant became forfeited.

      On the trial, the plaintiff moved to strike out this notice, but the motion was overruled, to which ruling an exception was taken. The plaintiff then gave in evidence the following bill of exchange:
    “ Exchange for $6,000.
    “ Cincinnati, February 16, 1846.
    “ Four months after date of this first of exchange (second of same tenor and date unpaid), pay to the order of Thomas McCague, at the office of the Ohio Life Insurance and Trust Company in New York, six thousand dollars, value received, and charge the same to the account of
    “ Your ob’t serv’t, THOMAS McCAGUE.
    “ To Mr. Eli Collins, New York.”
    Across the face of the bill was written, “ Accepted. Eli Collins;” and it was indorsed as follows : “ Pay the Ohio Life Insurance and Trust Company. Thomas McCague.
    “ Pay W. M. Yermilye, or order. S. P. Bishop.”
    The genuineness of the signatures was admitted, and the plaintiff then proved that the bill was discounted by them, indorsed by Mr. Bishop, the assistant cashier, and sent to Mr. Yermilye, the cashier, at the office of the company in New York city, who procured it to be re-discounted, and at the time of its maturity it was in other hands. It was protested for non-payment on the 19th of June, 1846, and a notice forwarded by Mr. Yermilye, the next day, by mail, directed to McCague, under cover to Mr. Bishop, at the office in Cincinnati, by whom it was re-mailed on June 25, the day it was received, to the defendant at Ripley, where both Collins and McCague resided.
    The defendant then proved that he was merely an accommodation drawer and indorser, at the request and for the benefit of Collins, who intended to use, and afterwards actually did use, the proceeds of the bill to pay for pork he had purchased from J. R. Baldridge, one of the trustees of the Trust Company, in whose handwriting was the filling up of the bill, and that these facts were well known to the plaintiff, and that the bill was accepted by Collins, at the time' it was discounted. He also proved that on the 19th day of March, 1847, he notified the plaintiff by a written notice served on the president of the company, Mr. Stetson, that he was apprehensive Collins was or would become insolvent, and that it would be extremely difficult, if not impossible, to recover the amount of said bill from Collins, in case he (MeCague) should be compelled to pay it, and required them to put it in suit forthwith. He also proved that at the time said notice was served, and until the winter of 1847 — 8, said Collins was solvent; and if suit had been commenced, so that process could have been returned served, at the April or August term, 1847, of the Brown common pleas, so that a judgment for the amount of said bill could have been rendered at the August or October term, 1847, that said bill could have been collected. Suit was commenced against Collins and MeCague on the same day, (October 25th, 1847,) and a judgment rendered against Collins at the April term, 1848, before which time he had become insolvent by transactions in pork, and the high water in the winter of 1847-8. Between the 19th of March and the 25th of October of that year, there were three terms of the court of common pleas — in April, August, and October.
    The defendant also proved that the mail came from New York city to Ripley, in June, 1846, by way of Wheeling, Chillicothe and Maysville, and that the time it usually occupied was five days.
    Upon this state of pleadings and facts, the court, to whom the premises had been submitted, without the intervention of a jury, gave judgment for the defendant, MeCague. The plaintiff then moved for a new trial, but the motion was overruled ; to which action of the court the plaintiff excepted, and now seeks a reversal thereof.
    The errors assigned are,
    1. That the finding of the court was against the law.
    2. That the finding of the court was against the evidence.
    3. That the court refused to strike out the special notice attached to the defendant’s plea of the general issue.

      4. That the court erred in overruling the motion for a new trial.
    5. The general error.

      0. Baird, and O. F. Campbell, for plaintiff in error.
    The errors assigned present, in fact, but two points. The first point, and in which we apprehend there can little if any difficulty arise, is as to the sufficiency of the notice to the defendant.
    The following authorities are referred to, as establishing “ that when a bill passes through the hands of an agent, he, in giving notice, will be treated as a holder; and notice by his principal to the other parties on the next day after he has received notice, will be sufficient.” '
    Story on Bills, sec. 292, 388; 3 Kent’s Com. 108; 1 Hill’s Rep. 263; 5 Mason 366; 9 Pickering 549; 15 Eng. Com. Law 242; 2 Littell 13.
    Many other authorities tending to establish the same proposition, could be produced, but as this point in the court below was scarcely seriously contested, it is thought unnecessary to cite further authorities.
    The main question to be decided in this ease is, whether the *{ act for the relief of sureties and bail in certain cases,” Swan’s Stat. 877, was intended to include, and apply to drawers, acceptors, and indorsers of bills of exchange. We main tain that said act was not so intended, and should not be so construed and applied.
    The language of that act is, “ that when any person or persons shall hereafter become bound as surety or sureties, by bond, bill, or note,” etc.
    This leads us to inquire into the legal lefinition of bonds, bills and notes.

    1st. What is the legal definition of a bond?

    11A bond is an obligation under seal, single, for the payment of a sum certain ; or conditional under a penalty.”

      8 Bacon’s Abridg. 690 ; 1 Shop. Touch. 867.
    2d. A bill is a single bond, without a condition or penalty.
    Wood. Inst. 277; 3 Bac. Abridg. 690; 5 Com. Digest 126; 2 Coke Lit. 566; 2 Black. Com. 340; 1 Swift’s Dig. 126; Croke Eliz. 548, 613; 1 Jac. Law Dic. 312.
    3d. “ A note is a promise in writing, to pay money, not • under seal.” Walker’s Intd. 397.
    “ A written engagement by one person to pay another person therein named, absolutely and unconditionally, a certain sum of money, at a time specified therein.” Story on Prom. Notes, sec. 1. “ A written promise for the payment of money at all events.” Bayley on Bills, c. 1, page 1.
    4th. “ A bill of exchange is an open letter of request from one man to another, desiring him to pay a sum therein named, to a third person on his account.” 2 Black. 466.
    “ A bill of exchange is a written order for payment of money.” Walk. Intd. 397.
    “ A bill of exchange is a written order or request, by one person to another, for the payment of money, absolutely, and at all events.” 3 Kent’s Com.,Lee. 44, page 74, (4th ed.)

      “ A bill of exchange is an open letter of request, addressed by one person to a second, desiring him to pay a sum of money to a third, or to any other, to whom that third person shall order it to be paid: or it may be payable to bearer.” 2 Kyd. on Bills 3, (3d ed.)
    “ A bill of exchange in most, if not in all commercial countries, possesses some peculiar advantages and privileges, over common contracts. These * * are allowed in order to give them a ready circulation and extensive credit.” Story on Bills 16, 17, sec. 14.
    “ At common law, although a bill of exchange is not a specialty, for no contract is by that law, a specialty, unless it is a matter of record, or under seal; yet in many respects a bill of exchange enjoys as high an importance, and imports as absolute a verity.” Story on Bills, sec. 16.

      “ By the commercial law, hills of exchange were alone negotiable and assignable, when made payable to the order of a party, or to the bearer, so as to allow the holder or assignee, to sue in his own name.” Story on Bills, sec. 17. Chitty on Bills 7, .10. “ Bills of exchange, by the common law, are of as absolute a verity as a specialty.” Chitty on Bills 11.
    “ At common law, bills of exchange were the only negotiable contracts; by the statute of Anne, promissory notes were placed on the same footing.” Walker’s Intd. 397.
    “ Bills of exchange were used and adopted by the necessities of commerce, at a very early period, and have, for many practical purposes, become an equivalent to, and a representative of, money ; and they circulate through the commercial world as an evidence of valuable property, of which any person, lawfully in possession, may avail himself to make purchases, to pay debts, and to pledge as a security or indemnity for advances.” Story on Bills, secs. 14, 17 ; Chitty on Bills 13,14.
    “ The jurisprudence which regulates bills of exchange, can hardly be deemed to consist of the mere municipal regulations of any one country. It may with far more propriety be deemed to be founded upon, and embody the usages of merchants in different commercial countries; and the general principles, ex cequo et bono, as to the rights, duties and obligations of the parties, deducible from these usages, and from the principles of natural law applicable thereto.” Story on Bills, see. 20.
    “ In the law of real property, each state has its local rules, and our courts are competent to maintain and establish them. But in the law of contracts, especially mercantile contracts, the principles are nearly uniform throughout the civilized world: they are established by a wider experience, and are maintained in a greater uniformity, in consequence of the great number of tribunals through whom they are expressed. Our state has become, and is becoming, the scene of large commercial operar tions, and it is of much moment that the principles on which justice is administered, should be made to conform as far as possible, to the law merchant.” * * * “ The introduction of bills as a basis of bank accommodation, has taken place long since the decision of Douglas v. Waddle. They are of mercantile origin, and the law merchant should govern their use.” Micajah T. Williams v. Bosson & Brothers, 11 Ohio Rep. 62.
    This important distinction between bills of exchange and other paper, has been made by the Supreme Court in our own state. In the case of Douglas v. Waddle, (1 O. R. cond. 182; Ham. 413,) the court decide that “ indorsers of accommodation notes are co-securities for each other. In the case of Williams v. Bosson & Brothers, (11 O. R. 62,) the court decide that “ the indorsers of an accommodation bill of exchange are not joint securities for each other.”
    In 10 O. R. 180, it is decided that “ every indorsement on a bill of exchange is a new contract, and each indorser becomes, to a subsequent holder, a new drawer.” The drawing, indorsing and accepting bills of exchange, are all independent contracts, and not collateral to each other: every indorsement being treated as a new and substantial contract.

    We insist that if the “ act for the relief of sureties and bail in certain cases,” was intended to include bills of exchange, the term, “ bill of exchange,” would have been used.
    The legislature, when acting upon bills of exchange, have in every instance so treated them.
    1 Chase 221, act of Nov. 15,1799; 1 do. 448, act of Feb. 21, 1805 : 1 do. 656, act of Jan. 25,1810 ; 1 do. 660, act of Jan. 31,1810 ; 2 do. 1137 ; 2 do. 1138 ; 2 do. 1139 ; Stat. vol. 41, 587, act of Feb. 25,1820 ; Stat. vol. 41, 589, act of Feb. 15, 1831; Stat. vol. 42, secs. 1 and 5.
    By the act of Nov. 15, 1799, “ notes in writing,” and “ inland bills of exchange,” -were made negotiable. Inland bills of exchange were declared to he so, to settle a doubt as to the effect of the law merchant in the territory at that time.
    By the law of 1805, “ all promissory notes without seal, and bills of exchange, foreign and inland,” are declared to be negotiable.

      By the acts of 1810 and 1820, “ all bonds, promissory notes, bills of exchange, foreign and inland,” were declared to be negotiable.
    As bonds are negotiable by the statute only, a note under seal or bond was not assignable until the law of 1810, (15 0. R. 543.) Under the acts of 1810 and 1820, bills, or as they are termed in the tax law of 1831, (Stat. 909, sec. 12,) single bills, are negotiable undnr the denomination of bonds, and not bills of exchange. “ A bill is a single bond without a condition on penalty.” See authorities cited supra.

    The term “ bill,” in the act in relation to “ sureties,” etc., can have its proper and full force without construing it so as to include “ bills of exchange.” There is nothing in that act requiring it to he so construed. The law of Kentucky in relation to the assignment of bonds, bills and promissory notes, never applied to bills of exchange. 1 Ky. Stat. 150; 1 do. 250; 1 Bibb. 233; 2 do. 240.
    Again. The court will not construe the statutes in such a manner as to innovate upon the “ law merchant,” unless it is clear from the terms of the statute, that such was the intention of the legislature. 6 O. R. 25; 11 O. R. 62, 192.
    It is but a reasonable presumption that, if the legislature intended to change the rights of holders, and the responsibilities of indorsers of bills of exchange, they would, as they have done in laws embracing that kind of paper, used the term, “ bills of exchange.”

      Chase, Ball JSoadly, for defendant.
    1. When the Trust Company undertake to serve a notice of protest from their New York office, on a drawer or indorser, it is their duty to send it direct, and not through the office in Cincinnati.
    2. The act for the relief of sureties is imperative, and the creditor, after receiving notice to put his claim in suit, has no discretion, but must institute an action in time tc recover at the first term of the court thereafter. Swan’s Stat. 877; Starling, Ex’r of McDowell, v. Buttles, 2 Ohio Rep. 303; Wright's Adm'r v. Stockton, 5 Leigh’s Rep. 153; Reid v. Cox, 5 Blackf. Rep. 313; Hogan v. Vance, 2 Bibb’s Rep. 34; McGinnis v. Benton, 3 Bibb’s Rep. 6; Markley v. Withers, 4 B. Monroe’s Rep. 15; Hume v. Brown, 3 Dana’s Rep. 450; Perrin v. Broadwell, Ibid. 397; McMurry v. Wood, 9 Dana’s Rep. 47; Marr v. Smith, 7 B. Monroe’s Rep. 192; Passmore v. Prother, 9 Dana’s Rep. 57; Simpson v. Daniel, 1 B. Monroe’s Rep. 250; McFadden v. Finnel, 3 B. Monroe’s Rep. 122; Leeman v. Neete, Ibid. 155; Clark v. Prentice et al., Ib. 584; Whaley v. Van Hook, 4 B. Monroe’s Rep. 271; Hamett v. McGarry et al., Ibid.; Graham et al. v. Chataque Bank, 5 B. Monroe’s Rep. 49; Morrison v. Glass, Ibid. 240; Levi v. Evans, 9 B. Monroe’s Rep. 115.
    3. At all events, proof that the principal debtor was solvent at the time of notice, and subsequently, at a period when, had suit been brought upon receiving notice, the judgment would have been in force and collectable, and of his insolvency when judgment was actually recovered, will exonerate the surety. Hancock v. Bryant, 2 Yerg. Rep. 476; Warner v. Beardsley, 8 Wend. Rep. 198; Valentine v. Farrington, 2 Edward’s V. C. Rep. 53; 17 Johns. Ch. Rep. 384; Simmons v. Tongue, 3 Bland. 341; Pain v. Packard, 13 Johns. Rep. 174; Albany Dutch Ch. v. Vedder et al., 14 Wend. Rep. 165; Herrick v. Borst et al., 4 Hill’s Rep. 650; Dehuff v. Turbitt’s Ex'rs, 3 Yeate’s Rep. 157; Cope v. Smith's Ex'rs, 8 Serg. & Rawle’s Rep. 110; Gardner's Adm'r v. Ferree, 15 Serg. & Rawle’s Rep. 28; Greenawalt v. Kreider, 3 Barr’s Rep. 364; Strader v. Houghton, 9 Porter’s Rep. 334; Towns v. Riddle, 2 Ala. Rep. 694.
    4. Banks, as well as individuals, are embraced within the provisions of the act for the relief of sureties, and parol proof may be given of the suretyship, where the party does not stand in that position, eo nomine. Reid v. Cox, 5 Blackf. Rep. 313;
      Smith v. Bing, 3 Ohio Rep. 33; Reddish’s Ex’rs v. Pentheuse et al., Wright’s Rep. 538.
    5. The act for the relief of sureties, and the act regulating judicial proceedings where banks and bankers are parties, ex tend to bills of exchange, as well as other securities for the payment of money.
   Spaldins, J.

There are really but two questions presented in this case for our consideration:

First. Was the notice of protest for non-payment transmitted with sufficient diligence and directness to the defendant ?

The bill matured and went to protest on the 19th of June, 1846. It was then in the hands of an agent of the plaintiff in the city of New York. Admit that agent to have been the actual cashier of the “ Trust Company.” He was then attending to an agency in the city of New York, and, so far as it concerned the bill in question, which was discounted at the bank in Cincinnati and sent to him in New York for collection, he may as well he called an agent as any indifferent person. Thi3 agent, on the very next day after the protest in New York, sent the notice by mail to his principal in Cincinnati, where it arrived on' the 25th of June, and on the same day -was again placed in the mail, directed to the defendant at Ripley. The most stringent rules of the law merchant will require no more than this. The whole objection of counsel is based upon the fanciful idea that the Ohio Life Insurance and Trust Company at Cincinnati, was embodied in the person of its cashier, Wm. M. Yermilye, in the city of New York; and that it was sending the notice of protest from itself in New York to itself in Cincinnati. We are not inclined to indulge in subtleties of this sort, and hold that Mr. Yermilye in New York, whether he be called agent or cashier, was employed by the holder of the bill in Cincinnati to present the same for payment; and, on pay ment being refused, to return it in due time, with the ordinary notice of protest, to his employer in Cincinnati, whose duty it would be to communicate with the other parties to the bill.

Second. Is the “ act for the relief of sureties and bail in certain cases ” (Swan’s Stat. 877) intended to include drawers, acceptors and indorsers of bills of exchange?

The first section of the act is in the following words :

That when any person or persons shall hereafter become bound as surety or sureties, by bond, bill or note, for the payment of money or other valuable thing, and shall apprehend that his or their principal debtor or debtors is or are likely to become insolvent, or remove from the county or state, without previously discharging such bond, bill or note, so that it will be impossible or extremely difficult for such surety or sureties, after being compelled to pay the amount of the money or other valuable thing which may be due by such bond, bill or note, to recover the same back from such principal debtor or debtors, it shall and may be lawful for such surety or sureties, in every such case, provided a right of action shall have accrued on such bond, bill or note, to require, by notice in writing, his or their creditor or creditors, forthwith to put such bond, bill or note, by which he or they may be bound as surety or sureties as aforesaid, in suit. And unless the creditor or creditors, so required to put such bond, bill or note in suit, shall in a reasonable time commence an action on such bond, bill or note, and proceed, with due diligence, in the ordinary course of law, to recover a judgment for, and by execution, to make the amount of the money or other article of value due by such bond, bill or note, the creditor or creditors, or the assignee or assignees of such bond, bill or note, so failing to comply with the requisitions of such surety or sureties, shall thereby forfeit the right, which he or they would otherwise have, to demand and receive of such surety or sureties the amount which may be due by such bond, bill or note.” In great commercial countries it is imperatively necessary that, in their multiplied business transactions, men shall lend to one another their credit and responsibility. It is therefore expedient that such rules shall be applied to the system of securityship, in all its various ramifications, as that the least possible burthen may be thrown upon those who are willing and able to incur liabilities for others.

Hence it has always been the policy of our law to extend to-sureties all the indulgence consistent with an exact observance1 of the rights of creditors.

The statute which we are required to interpret, has its foundation in the best of ethical philosophy: “ Whatsoever ye would that men should do unto you, do ye even so unto them.”

There can be nothing wrong in requiring that, after debts become due, their collection shall be enforced against those for whose benefit they have been contracted.

At common law, the surety who doubted the continued responsibility of his principal, was compelled, unless at the option-of the creditor, to pay the debt himself before he could enforce1 collection at the hands of the debtor.

In the language of the judge who pronounced the opinion in Ex’r of McDowell v. Buttles, 2 Ohio Rep. 303, “ the object of this act is plainly to enable sureties to compel a creditor, where-his debt is due, to pursue the principal debtor by a suit, or exonerate the surety. It was intended to relieve sureties when the creditor felt safe in the responsibility of the surety, and took no-steps to collect his debt; and it contemplates extending this relief, in a different form from that of compelling the surety to pay the debt himself, and thus become the creditor and bring suit.”

And the law will apply to every class of securities that may be brought by liberal intendment within its meaning. There can be no substantial reason why the person who signs a note alone as drawer or maker for the accommodation of the payee, may not be entitled to the benefit of this act as well as he who signs below the principal with the word “ surety ” appended to his name. It can only be necessary, in any event, that the holder of the paper shall be made acquainted with the fact that the party seeking relief is a surety.

It is claimed, however, that bills of exchange do not come within the purview of the act; that the phrase “ bonds, bills and notes,” does not mean obligations under seal for the pay ment of money; written orders for the-payment of money, and promises in writing for the payment of money; but that it means bonds, single bonds and notes.”

In other words, it is insisted that the word “ bills,” in this connection, means “ single bonds,” in contradistinction to bills ■of exchange. We can adopt no such forced construction.

The legislature, doubtless, intended to embrace in the act for the benefit of sureties, the three great classes of written contracts for the payment of money; specialties, bills of exchange and promissory notes. And we are of opinion that, whatever be the nature of the paper, and whatever the position •of the surety therein, whether primarily or collaterally liable, if he be in fact a surety, and known to the creditor as such, he can claim the benefit of this act.

In the case before the court, the defendant was known to be the accommodation drawer of the bill — a mere surety for Collins, the acceptor. On the 19th of March the plaintiff was notified that Collins was in doubtful circumstances, and that it was requisite, in order to insure the safety of defendant, that suit should be instituted forthwith against the acceptor. Tho April and August terms of court were suffered to pass by. At the October term suit was commenced; but, before the term came on at which judgment could be taken, the debtor was insolvent. We are of opinion that the plaintiff, under the notice from defendant, was bound to institute suit at the April term. If' this had been done, the proof shows the debt might have been saved. The loss must now fall on the plaintiff.

Judgment affirmed,.


author: Caldwell, J.

text:
    Jacob N. Brown v. Thomas Winstanley and Wife.
    Where the executors of a will, to whom letters testamentary had been granted in Ohio, had assigned a promissory note which formed a part of the assets of the estate, to children and legatees, in part payment of their shares of the estate, and administration of the same estate had been granted in Virginia to another person, and the maker of the note had been compelled, by a decree of a court of chancery in Virginia, to pay the amount of the note to the administrator appointed in that state; Held, that the assignees could not recover in a suit on the note against the maker, though the assignment was made before the granting of letters of administration and bringing of su t in Virginia.
    This is a writ of error to the Court of Common Pleas of Columbiana county.
    The action below was debt, brought by the defendants in error on a promissory note under seal, made by Brown, the plaintiff in error, the defendant below, to John Nessly or assigns, for f1,168.80, dated November 1st, 1841, and payable on the first of the next April.
    John Nessly, the payee of the note, died on the first of June, 1842, leaving a will, of which W. H. Wallace and Jacob G. Nessly were appointed executors.
    About the 25th of June 1842, the executors, having made a settlement of the estate, assigned this note to Elizabeth and Nancy Nessly, two of the children of the testator, and legatees under his will, as a part of their share of the estate.
    On the 1st of January, 1844, Thomas Winstanley and Nancy Nessly, the plaintiffs in the action below, were married. On the 28th January, 1847, Elizabeth indorsed the note to Thomas Winstanley. These are the allegations in the declaration, and are sustained by the evidence in the case.
    The plea avers, that the defendant Brown is now, and has been, since the making of the not.e, a citizen of Brooke county, Virginia; that after the death of John Nessly, administration on his estate was granted to Geo. Swearingen, the sheriff of Brooke county, by the county court; and that on the 3d day of July, 1848, he filed his bill in chancery, in the superior court of law and chancery for Brooke county, against Brown, setting up this note as belonging to the estate of John Nessly, and claiming, as administrator, to have payment of the amount.
    That Brown answered the bill, and set up the execution of the will by the executors, Wallace and Nessly, in Ohio, the settlement of the estate, and the transfer of the note, by the executors as above stated, as a defense to that action.
    That in October, 1846, the cause in the Virginia court was tried and a decree entered against Brown for the amount of the note, which Brown had paid before the commencement of this suit.
    The plaintiff replied, averring that John Nessly, the payee of the note, resided in the State of Ohio ; that the note was made and delivered in this state; that the executors above named took out letters testamentary from, and settled with, the court of common pleas of Jefferson county, Ohio; that the assignment was made to Elizabeth and Nancy Nessly before the taking out of letters of administration by Swearingen in Virginia ; and that Nancy and Elizabeth both then resided, and do now reside, in Ohio. To this replication the defendant demurred ; the demurrer was overruled by the court of common pleas, and the defendant rejoined, taking issue upon the facts set forth in the replication.
    The cause was submitted to the court, who gave judgment for the plaintiff for the amount of the note, deducting certain credits.
    The defendant excepted to the judgment and proceedings of the court, and the court signed a bill of exceptions.
    It is claimed by the plaintiff in error that the court of common pleas erred in overruling the demurrer, and in giving judgment for the plaintiff below.

      Umistcetter, Stanton Wallace, for plaintiff in error,
    Contended that the proceedings in the superior court of Virginia constituted a bar to any subsequent recovery against Brown. They cited Chevalier, assignee, etc. v. Lynch et al., Doug. Rep. 170; Huxham v. Smith, 2 Camp. Rep. 19; 2 Kent’s Com. 118; Embree et al. v. Hanna, 5 Johns. Rep. 101; Allen v. Dundas, 3 T. Rep. 125; Holmes v. Remsen, 4 Johns Ch. Rep. 460; McDaniel v. Hughes, 3 East’s Rep. 367, Savage’s case, 1 Salk. Rep. 294; 6 Taun. Rep. 558; 4 T. Rep. 187; 1 H. Blk. Rep. 669; 2 H. Blk. Rep. 408.

      W. K. Upham James Mason, for defendants,
    Cited Harper v. Butler, 2 Pet. Rep. 239; Story’s Conflict of Laws, sec. 517, 358, 359; Story on Prom. Notes, p. 129, sec. 123.
   Caldwell, J.

This case presents the single question: Are the proceedings in the Yirginia court, and the decree entered therein in favor of the administrator against Brown, a bar to the present suit by Winstanley and wife ?

It is admitted there was no collusion in the Yirginia suit. Indeed, the record of that case shows that the defendant Brown made all the defense the nature of the case would admit. All the transactions, which had occurred in Ohio as to the execution of the will — the settlement of the estate — the assignment of the note; indeed every material fact that the plaintiffs here allege, to entitle them to recover against defendant Brown, was there presented by him in their behalf.

We do not see that their rights could have been better presented, if Brown had filed a bill of interpleader between them and the Yirginia administrator. A court of competent jurisdiction, with these facts before it, has decided that Brown should pay the amount of this note to the administrator in Yirginia ; he has paid the money; that money has gone to the benefit of the estate, and the question arises, shall he be compelled to pay it again ? We think not.

It is a well settled principle, that when a party has been compelled, by a court of competent jurisdiction, to pay a debt, by proceedings in foreign attachment, it may be plead in bar to a suit by the original creditor. Chancellor Kent, in deciding a case of this kind (Embree and Collins v. Hanna, 5 Johnson 102), lays down the general doctrine, that nothing can be more clearly just, than that a person who has been compelled to pay a debt once, by a court of competent jurisdiction, shall not be compelled to pay it over again. The same doctrine is laid down in Kent’s Com. vol. 2, p. 118.

In this case, on the trial it was proven that the proceeding in the Virginia court was in the nature of a proceeding in foreign attachment. This, however, I think should not have much weight.- The record of that case is before us, and the proceedings look very much like an ordinary proceeding in chancery. Still we think if it would be unjust, and not to be allowed, that a party should be compelled to pay a claim twice in a case of foreign attachment, it would be equally unjust to compel him to pay it again in a case like the present; although the first payment was enforced by the ordinary proceedings in chancery.

It is contended by the plaintiffs, in the suit below, that the executors had a right to assign this note to Elizabeth and Nancy as a part of their share of the estate, and that it vested in them a legal title to it, the assignment being made before the commencement of the suit, or the appointment of the administrator in Virginia. Now admitting it to be true, that the executors could vest the title of this note in the legatees under the will, still we suppose that such title, from the nature of the case, could not be an absolute one. This note formed a part of the assets of the estate. The executors, in Ohio, could have collected the money on it, in place of making' the assignment. It formed a part of the fund for the payment of the debts, legacies, and general purposes of the estate. Each creditor, and each general benificiary under the will, had a claim on it in the first instance for the purpose or raising a fund to pay his claim. If the debts were equal to the assets, then it would all have to go to the creditors.

If, after the assignment, claims had come against the estate of the deceased, the proceeds might all have been appropriated to the payment of such claims; and would have been, if necessary. And even if the money had been collected, and had come into the hands of the assignees, as legatees, they might have been compelled to contribute to the full amount, and would have been, in a proper case. The executors held this note as a part of the assets of the estate, and any assignment that they might make to the heirs, or legatees, of their testator, would be held in trust for the general purposes of settling the estate, if it should become necessary.

There may be a hardship in the case, let it be decided either Way; the hardship would be much greater, however, if Brown should be compelled to pay the money, twice, than if he should be held absolved from the claim. The plaintiff need not have taken this note. It was a matter of contract, and if they and the executors had not stepped aside from the ordinary course of proceeding, the executors would have been bound to collect the money on it, or have handed it over to the administrator in Virginia to have done so: and one payment would then have freed Brown from all future liability.

The money has been collected, not by a stranger, but by the administrator, who holds it for the general purposes of the estate. If the plaintiffs have a right to the proceeds of the note by virtue of the assignment, as they would if there are no claims against it, the administrator will be bound to account to them for it. And if (as it would appear from 'the arguments of counsel) the fact is, that it has been applied to the payment of debts in Virginia, it has been applied to the general benefit of the estate, which has really lost nothing by its being applied in Virginia rather than Ohio.

The plaintiffs are not thereby deprived of any equitable claim which they may have against the other beneficiaries under the will: if deprived of any such claim, it is by their own voluntary act. But how is it with Brown ? Without doing any thing voluntarily, to produce such a result, he will be compelled to pay the money twice; will have no recourse whatever, and the estate of John Nessly will have received double the amount of its claim against him.

We think the plea of defendant presents a complete bar to the action of the plaintiffs; that it is not answered by the replication, and that therefore, the court of common pleas erred in overruling the demurrer to the replication. The judgment will be reversed.


text:
    George Myers and James Galloway, Jr. v. Edward Farrington and others.
    Where there is a misjoinder of complainants in chancery, the court may, ao cording to its discretion, and the circumstances of the case, dismiss the hill, as to all the complainants, or only as to those who are improperly joined.
    This is a bill in chancery, reserved in Fairfield county.
    The bill sets forth, that on the 14th day of April, 1837, Henry P. Galloway, and Henry T. Myers, by the name and ■style of Galloway and Myers, made to the defendant Farring-_ ton - their promissory note for one thousand and forty dollars, payable six months after date, which note the complainants ■signed with the said Galloway and Myers, but it is alleged that they were securities merely, and that this fact was well known to the defendant Farrington.
    It is further stated that on'or about the 21st of October, 1839, the said Galloway and Myers paid to Farrington the sum of one hundred and fifty-six dollars, that being the amount of interest which would accrue on the 14th April, 1840 ; in con sideration whereof Farrington agreed to extend the time of payment upon said note until the said 14th April, 1840, or that ■some other agreement or arrangement was made for the extension of time, at or about that time ; and that this agreement to extend the time of payment was made without the know! edge or assent of the complainants.
    It is further stated, that on the 9th day of September, 1840, .an action was commenced at law, by the said Farrington against the said Galloway and Myers, and the complainants jointly, upon .said note; that the complainants in that action attempted to defend themselves upon the ground that the time of payment had been extended by Farrington the creditor, to Galloway and Myers the principal debtors, but that this defense was overruled by the supreme court upon the ground that the suit was upon a joint note against all the makers, and judgment was therefore rendered against all the defendants at the November term, 1841, for the sum of $1,138.80 and costs. It is further stated, that execution had been taken out upon this judgment, and was then in the hands of the sheriff, who was about to levy the same upon the property of the complainant George Myers.
    The prayer of the bill is for an injunction, etc.
    This bill was filed the 15th July, 1842, in the court of common pleas of Fairfield county, and an injunction allowed.
    On the 9th September, 1842, the defendant Farrington filed his answer. In this answer he admits the execution of the •note as stated, and that at the time he supposed that the consideration of the note was for the benefit of Galloway and Myers ; but as the .complainants signed the note as joint makers with Galloway and Myers, he considered, as between himself and the complainants, they were principal debtors. He admits, as charged in the bill, that in 1839 he agreed to extend the time of payment until the following April, in consideration that the said Galloway and Myers then paid him the interest in advance up to that time, and paid him some further consideration, but the amount of this admitted consideration he does not recollect. He denies, however, that this agreement for the extension of time was without the knowledge and assent of the complainant George Myers, but alleges that it was made with his assent and at his solicitation.
    He further admits the recovery of the judgment, the issuing of execution, and that the sheriff was about to levy the same upon the property of George Myers, when restrained by an injunction, procured, as he believes, at the instance of the complainant Myers.
    There are other matters and things set forth in the answer, of which it is unnecessary to take notice, as they have not been considered by the counsel or the court.
    To this answer there was no replication, nor is there any evidence in the case, except that which is contained in the answer, so far as the same is responsive to the bill, and in the answer of complainants to interrogatories filed by the defendant Earrington.

      Henry Stanbery (attorney general), and P. Van Trump,. for complainants.

      H. H. Hunter, for defendants.
   Hitchcock, C. J.

This is a joint bill filed by the complainants, George Myers and James Galloway, jr., to enjoin a judgment at law recovered against them jointly with Galloway and Myers, upon a promissory note. The ground upon which relief is sought is, that the complainants were mere sureties upon the note, which fact was known to the payee, and that after the note became due he extended the time of payment to the principal debtors, upon sufficient consideration, without the knowledge or assent of the sureties.

The fact is, that after the .note upon which this judgment was recovered fell due, Earrington did, for a sufficient consideration, extend the time of payment as charged in the bill. But it is equally clear that this was done with the assent and at the request of the complainant Myers. This is not controverted, and it seems to be admitted by counsel, that as to him, the bill must be dismissed, and the injunction dissolved. But. there is nothing in the case to show, nor is it even pretended, that the complainant Galloway ever assented to, or had any knowledge of, this agreement for the extension of time. So far as he is concerned, having been deprived of making a defense at law, he would have been entitled to relief in chancery. But having, in the case before us, come into court in connection with one who is entitled to no relief, what shall be the consequence ? It is a clear case of misjoinder, or improper joinder of parties complainant. It is so admitted to be by counsel, and the questions argued are whether the bill shall be dismissed as to both the complainants, or whether it shall be dismissed as to Myers, with a decree in favor of Galloway, or whether it shall be dismissed as to Myers, and leave given the complainant Galloway to amend.

On the part of the defendant it is insisted that, where there is a misjoinder of complainants, the bill should be dismissed; and to sustain this position, counsel cite the following authorities : 3 Paige’s Rep. 336 ; 2 Sanford’s Ch. Rep. 250; 5 Simmon’s Rep. 395; 9 Simmon’s Rep. 299.

But it is claimed by the complainants’ counsel, that this is never done, unless the defect is apparent upon the face of the bill, and a demurrer is interposed. It seems to us it would not do to say that a bill would not be dismissed on account of the misjoinder of parties, where an answer had been filed. In the case before the court, the bill, upon its face, contains sufficient matter of equity to justify the action of court. It must have been sustained on demurrer. The court would not, of course, dismiss a bill on account of a misjoinder of complainants. Whether it should be done or not, must depend upon the equity of the case, as disclosed at the hearing. If, upon hearing, the court are satisfied that ultimate justice cannot be done, except by the dismissal of the whole bill, there certainly can be no substantial objection to its being done. „

In the case before the court, had Galloway alone filed the bill,, the judgment, as to him, might have been enjoined. But in that case, if the statement in the bill be true, the defendant Farrington might have collected his judgment; for the bill shows that the sheriff was about to levy the execution upon the property of •the complainant Myers, and it is admitted on all hands that Myers was both legally and equitably bound by this judgment. The property of Galloway was not threatened with an execution. It was in no immediate danger. But, under these circumstances, Galloway has seen proper to connect himself with Myers, and, by so doing, has prevented proceedings against the property of Myers. It was, as it seems to the court, an improper interference, in no way justified by the circumstances of the case.

In consequence of this interference, it is argued by the counsel for the defendant that the injunction should be dissolved, the bill dismissed, and a decree entered against both the complainants for the amount of the judgment enjoined, according to the provisions of the statute. It seems to the court, however, that this would be inflicting too severe a penalty upon Galloway, for his unadvisedly joining with Myers in the prosecution of this suit.

On the part of the complainants, we are urged to dismiss the bill as to Myers, continue it as to Galloway, and to permit him to amend, by making Myers a party defendant.

But when we consider the injury which has been done to the defendant Farrington by the prosecution of the suit, in delaying him in the collection of a judgment to him honestly due, we are not disposed to extend any particular favor to one who has been instrumental in procuring this state of things. .This is an injunction case — a case by which a judgment at law has already been delayed for a period of more than seven years — and we would not willingly do anything to create further delay, or take any course which may, by possibility, interfere with any claim which the defendant Farrington may legally have jipon the injunction bond. #

Upon full consideration, we have been brought to the conclusion that justice will be done to these parties by dissolving the injunction and dismissing the bill at the costs of complainants; the dismissal as to Galloway to be without prejudice, and to allow the defendant Farrington to take a decree against the complainant Myers for the amount due upon the judgment at law. A decree may be taken accordingly.


text:
    Eliza Wetmore v. The State of Ohio.
    A sum of money certain, to be received annually, and at stated periods, is, within the meaning of the tax law of 1846, an annuity, unless the same be receivable as a pension, a salary, or as compensation for labor or services, subsequently to be performed.
    This is an appeal from the decision of the auditor of state,, taken to this court, under the provisions of the tax law of March 2d, 1846.
    The case made is as follows: Eliza Wetmore, the appellant, is a resident of the county of Franklin. John Rathbone, father of the appellant, devised and bequeathed to her certain property in the state of New York, which he directed to be placed at interest by his executors, the interest to be paid to her annually, and upon her death the principal sum to be divided among her children in the manner specified in the will. John Rathbone, jr., brother of the appellant, by his will divided his property for the purpose of disposition into forty parts or portions, five of which he devised or bequeathed to his executors, in trust for the appellant and her children, directing his executors to purchase an annuity of one thousand dollars per annum, for her benefit, and directing further that the balance of said portions, which should be left after said purchase, should be paid over to such of her children as should be living when the will should take effect.

      Subsequently an arrangement was made between the execu tors of the said John Rathbone, jr., of the one part, and the said Eliza Wetmore and her husband, Charles H. Wetmore, of the other part, by which it was agreed that the sum with which an annuity of one thousand dollars per annum for her use could be purchased, should be placed at interest in the State of New York, upon the same terms and in the same manner as is provided by the will of John Rathbone, the father, and the interest paid to her as therein provided. This sum was estimated at twelve thousand three hundred dollars and twelve cents. This arrangement was carried into effect, and the appellant is in the annual receipt of about eighteen hundred dollars as interest, in consequence of the bequests and arrangement aforesaid.
    Under these .'circumstances the auditor of Franklin county considered this annual income as in the nature of an annuity, and upon the tax duplicate charged the appellant with fourteen thousand seven hundred dollars, 'that being estimated to be the worth of an annuity of eighteen hundred dollars for the life of the appellant.
    From this decision of the auditor of the county an appeal was taken to the auditor of state, who, acting by and with the advice of the attorney general, affirmed the decision of the auditor of the county. From this decision of the auditor of state, the matter is brought before this court by appeal.

      Swayne $ Bates, for appellant,
    Contended that this was not an annuity; that the statute had made a substantial difference between an “ annuity ” and “ a sum of money receivable at stated periods,” and that annuities and certain ground rents were the only instances in which the law required such a valuation to be made as had been made in this case, and the tax to be assessed upon such valuation.

      Henry Stanbery (attorney general), for the state,
    Insisted that whether or not this annual income was strictly an annuity, according to the definitions found in the books, it was so within the meaning of the tax law, and that the mode of taxation adopted was correct.
   Hitchcock, C. J.

The question raised in argument, and the question to be decided is, whether under the laws of Ohio “ for levying taxes on all property in this state according to its true value,” (vol. 44, p. 65, Ohio Laws,) this annual income ■can be considered as an annuity. It is not contended that, according to the strict technical meaning of the words, it is an annuity, but the question is, whether it is such within the meaning of the law referred to.

The first section of the act provides “ that all property, whether real or personal, within this state, and the moneys and credits of persons residing therein, except such as is hereinafter expressly exempted, shall be subject to/taxation ; and such property, moneys and credits, or the value thereof, shall be entered ■on the lists of taxable property, for that purpose, in the manner prescribed by this act.”

In the next section the general assembly proceed to give the definition or meaning of the terms used in the act. In the 5th paragraph of this section, it is said, “ the term credits, wherever used in this act, shall be held to mean or include every claim or demand for money, labor or other valuable thing, due or to become due, and every annuity or sum of money receivable at stated periods, and all money invested in property of any kind, which is secured by deed, or mortgage, or otherwise, which the person holding such deed, or mortgage, or evidence of claim, is bound, by any lease, contract or agreement, to reconvey, release or assign, upon the payment of any specified sum or sums.” So far in this paragraph. There are three specifications as to what shall be held to be credits within the meaning of the act. 1. “ Every claim or demand for money, labor, etc., due or to become due.” 2. “ JSvery annuity or sum of money receivable at stated periods.” 8. “ All money invested in property of any kind, which is secured by deed, mortgage or otherwise;” no matter what is the form of the security, provided the security is to be avoided “ upon the payment of any specified sum or sums.”

Now if we look to the phraseology of this paragraph so far as quoted, and in connection with this we look to the punctuation, it would seem that the general assembly did not intend to make any difference between an “ annuity ” and á “ sum of money receivable at stated periods.” The form of expression is, “ every annuity or sum of money receivable at stated periods,” not “ every annuity and sum of money,” etc. They speak of both the “ annuity ” and the “ sum of money” as being one and the same thing. But the paragraph does not stop here. Immediately following the foregoing quotation is a proviso in the following words: Provided that pensions received from the-United States or any one of them, salaries or payments expected to be received for labor, or services to be performed or rendered, shall not be held to be annuities, within the meaning of this act.”

Now no one would suppose that a pension or a salary, although received at stated periods, was, according to the common use of language, an annuity. Yet the general assembly having, in the previous part of the paragraph, in defining what was to be deemed credits, specified “ every annuity or sum of money receivable at stated periods,” introduced the foregoing proviso, lest by possibility it might be thought that salaries and pensions were included as annuities.

In this proviso we are told what are not annuities within the meaning of the law. Placing this provision in juxtaposition with that part of the preceding paragraph which it is intended to qualify, it will stand thus : “ Every annuity or sum of money receivable at stated periods; Provided that pensions received from the United States or any of them, salaries or payments expected to be received for labor or services to be performed or rendered, shall not be held to be annuities, within the meaning of this act.” Such being the language used by the law-making power upon this subject, we cannot doubt that it was the intention to include within the terms or words annuity, every sum of money receivable at stated periods, except such as are ex eluded or excepted by the proviso. It could not have been the intention to charge a greater tax upon an annuity, properly so called, than any other sum of money receivable, like an annuity, at stated periods. Such discrimination would have been contrary to reason and manifest justice.

Such being the opinion of the court, it was proper to ascertain the value of this eighteen hundred dollars income, according to the provisions of the 12th section of the act.

The construction put by the auditor of state upon the act, is in accordance with the true meaning of the law; his decision is therefore affirmed.