author: Wright, J.

text:
    Smith v. Patterson.
    1. The principle that a party is responsible for false representations of material facts, applies to all those cases where influence is acquired and abused, or confidence is reposed and betrayed.
    2. If such confidential relations exist, and the one trusted, knowing that liéis so trusted, makes representations of a material fact, which he knows to be false, whereby the other is induced to enter into a contract with-him, the execution of which entails loss, the party making such representations under such circumstances is responsible for the loss.
    Error to the District Court of Cuyahoga county.
    Patterson brought suit in the court of common pleas,, and recovered judgment against Smith. Upon error to the district court, the judgment was affirmed, and Smith filed his petition in error in the supreme court.
    In the court of common pleas, Patterson set forth in hispetitiou, that Smith, about the 1st June, 1871, had a contract with the Lake Shore and Michigan Southern Railroad Company, to build an embaukment. Patterson them alleges that Smith had for a long time been his confidental friend and adviser, advising plaintiff as to jobs that he should' do and the price he should get for the same, and that plaiutiff was accustomed to act upon this advice, having reliance upon Smith’s friendly disposition toward him.
    Smith told plaintiff of his having the contract to build the embankment, and further said, that he would give-plaintiff the preference for the contract, at the same price-others would do it for. Smith also stated to plaintiff that three persons, Costello, Gregory & Campbell, who were-known to be competent and experienced contractors, accustomed to estimate such work, had figured on this job and had offered to do it for twenty cents a yard; that as a special favor he would give plaintiff the job at that price,, and that he could make money.
    . Plaintiff further avers that he was not an educated mam had but little experience in these matters, was not able to figure on such a job so as to ascertain its costs, but trusted wholly to Smith’s representations; that1 all of these representations as above, were false and fraudulent, and known by Smith to be so when he made them; that they were made to deceive and defraud plaintiff into making a contract for the job at twenty cents a yard, Smith knowing, that there would be a loss at that price. Smith knew that plaintiff had confidence in the ability and business sagacity of Costello, Gregory & Campbell, as successful jobbers, and knew that Patterson could not figure correctly on such a job, but relied upon the representations which had been made.
    By means of these false and fraudulent representations, plaintiff was induced to take the contract at twenty cents; that he did about forty-three thousand yards, and received as pay $8,524.20, and that the actual cost was about $8,000 more than this, and by reason of the false and fraudulent representations of said Smith, judgment against him is asked for the loss Patterson has sustained.
    In his answer Smith avers that he did have such a contract with the Railroad Company, at thirty-five cents a yard, for part, and forty-five cents for the rest, he furnishing the earth, and he then says he made this contract with Patterson at twenty cents, that he paid for the work done, according to the terms of their agreement. The answer then, in substance, denies the existence of any confidential or friendly relations, and denies that he made the representations alleged, that Costello, Gregory & Campbell, had offered to do the work at twenty cents, traversing all the statements of the petition on that subject, and without repeating at length, it may be said that the answer is a full and general denial.
    Upon the first trial, plaintiff had a verdict for $2,215.80; upon the second trial the verdict was for $2,328.29.
    The bill of exceptions reports the evidence in full. „
    In its charge to the jury the court in effect said, that the case- as claimed by plaintiff is one of fraud, and if that fraud is found to exist, plaintiff can recover; that if defendant made the representations alleged, if they were false, and plaintiff knew them to be so, and if these representations, induced plaintiff to enter into the contract, and a loss ensued, the action may be maintained.
    The court further said:
    , “ Plaintiff says the contract was entered upon under such circumstances that he is not bound by it, and that he is entitled to have just as much as if no contract had been made. This is exactly the claim he makes and no more.
    The defendant claims that the circumstances under which the contract was made were not different from what ordinarily surround parties in entering into contracts.
    What does the plaintiff say the circumstauces were that render the contract not binding on him? He says such a relation existed between them, of friendship, that he reposed confidence in the defendant and depended on him, as he well knew, for advice in his business; that the defendant made certain representations to him knowing them to be false, and that he relied upon them, and that they were made with the intent and purpose of defrauding him into the contract.
    The defendant denies all such representations, and if he made any such representations he did not know they were false, and says they were not made with the intent or for the purpose of inducing him to enter into the contract to his injury, and that no such relations existed between them such as to induce the plaintiff to enter into the contract.

      Charles L. Fish and J. F. Ingersoll, for plaintiff in error:
    As to liability for false representations of material facts, see 2 Kent, 486; Vernon v. Keys, 12 East, 632; Holbrook v. Connor, 60 Me. 578; Roberts on Frauds, 524; Cross v. Peters, 1 Me. 389; 6 Met. 246; 8 Allen, 334; 11 Allen, 522; 106 Mass. 79; 102 Mass. 220; 60 Me. 531, 578; 5 Johns. 354; Kerr on Fraud, 88; 28 Wend. 260; 5 Hill, 63.

      J. P. Hawley and J. E. Hord, for defendant in error:
    As to what constitutes fraud. 1 Story’s Eq. § 2036, note a; Ib. § 212a; Ib. § 187-192. As to proof of fraud. I Story’s Eq. 190a; 57 Mo. 146; 63 N. Y. 653; 2 Disney, 302; 51 Ill. 327. As to false representation of material facts. 1 Story’s Eq. 198, 218; 5 Equity Cases, 248; 17 Curtis, 527; Story on Sales, § 482; 23 Wend. 260; 60 Me. 578; 5 Hill (N. Y.) 63; 1 Disney, 520 ; 2 Disney, 153, 302; 11 Allen, 520 ; 53 N. Y. 298; 63 N. Y. 653; 31 N. Y. 611; 30 N. Y. 656; 2 Barr (Penn.), 105; 32 N. Y. 275 ; 3 Barn. .& Adol. 114; 63 Penn. St. 347; 13 Peters, 24; 37 Ind. 1; 37 N. Y. 518.
   Wright, J.

There certainly is evidence tending to support the allegations of the petition. Patterson states that. :Smith was his blood relative, and always acted as a friend toward him. He speaks of him as his “ best friend,” to whom he always appealed for advice in taking jobs of grading. He says he never undertook any job of the kind unless Smith stood by, telling him what was best to do (making out bids for him in contracts for grading streets). He had advised with Smith about bidding oa jobs, as being his confidential friend. Smith told Patterson he had a big job for him, and wanted him to bid on it. Patterson said he did not understand about figuring on jobs; that he did not kuow how to bid on the contract, but would have to trust to Smith’s honor, and, in point of fact, he made no effort to figure on the work, and made no inquiry as to what it could be done for, except from Smith. :Smith said he would give Patterson the preference over ■others, at the same price; stating that their family relations, and the old score of friendship between them, constrained him to do so; further averring that Patterson could not lose any thing, but would make money on the ■transaction, and that he (Smith) would see him through it.

These are Pattersou’s statements. Whether or not they were to be believed, was a question for the jury.

Patterson then states, that Smith told him that Costello, Gregory & Campbell had offered to do this work at twenty cents a yard. These three men were experienced in this' kind of business, a fact of which Patterson was aware. Under these circumstances, Smith knowing that Patterson relied upon him, Patterson made the contract. The statement of Smith, that Costello, Gregory & Campbell had offered to do the work at twenty cents, was untrue.. They never made such offer; and all agree that the work was worth largely more than twenty cents, as in fact do all the witnesses. A single sentence in Gregory’s cross-examination is construed into such offer, and, standing alone,, might bear that construction; but, taking all his testimony together, it is evident that such could not have been his intention. It is claimed, by counsel for Smith, that-these representations of his, as to Costello, Gregory & Campbell, were mere statements of opinion which amounted to nothing. As we regard it, it was no question or matter of opinion. It was an assertion of a fact, and a material fact. It was not a statement of Smith’s belief, but an affirmation that these men had actually offered to do the-work at the price named. And this affirmation appears to-have had a large influence on the plaintiff, which, taken with the faith he had in defendant, induced the acceptance-of the contract. It is undoubtedly true that, as between vendor and vendee, between .whom no relation but that of buyer and seller exists, if the vendor asserts the property sold is within a given sum, this is mere matter of opinion, and no representation like this is sufficient upon which to-base an action of fraud. And, as Chancellor Kent says, the-eases have gone so far as to hold that if the seller should, even falsely affirm that a particular sum had been bid by others, by which means the purchaser was induced to buy,, and was deceived as to the value, no relief can be afforded. 2 Kent, 486.

There are many cases cited, and perhaps more might be,,, where the party selling had stated that he had given so-much for the property, or that he had been offered so-much, ór that he had refused a given sum, and those state-meats were false, and known to be so by the party making-them, yet no action was maintainable. But these were cases where the parties were dealing at arm’s length. One was trying to get as much, the other give as little, as he could. The purchaser had no right to rely upon the assertions made; there was no relationship between the parties such as justified the reposing of confidence by one in the-other.

But the case before us is claimed to he different. It is-alleged that the relations here were such that Patterson was justified in relying upon Smith’s statements. If their dealings theretofore had been of that nature which authorized Patterson to confide in Smith, and follow his advice,, and if Patterson was so authorized here, the two can not be said to have been dealing at arm’s length. It is doubtless true that courts of law will not enforcé mere moral obligations, or seek to establish as contracts what might be-called the mere dictates of honor, and yet the situation of parties toward each other may be such as that rights may arise which could have no existence as between mere-strangers. And this remark can not be confined to those well-known relations of trustee and his beneficiary, guardian, and ward, attorney and client; there are others who-may be held to the speaking of truth, and dealing fairly.. In Smith v. McKay (7 House of Lords, 779), Lord Kingsdown makes the following remarks : “ It is not the relation of solicitor and client, or trustee and cestui que trust, which imposes the duty of making a free disclosure of every circumstance of which it is- important the individual should be apprised.” The principle applies to every case where-influence is acquired and abused, where confidence is reposed and betrayed. The relations with which the court of equity most ordinarily deals are those of trustee and cestui que trust, and such like. It applies specially to those-cases, for this reason, and this only, that from those relations the court presumes confidence put and influence exerted. 'Whereas in all other cases, where those relations-do not subsist, the confidence and the influence must be-proved extrinsieally; but where they are proved extrinsi•cally the rules of reason and common sense, and the technical rules of a court of equity, are just as applicable in the one ease as the other. 1 Story Eq. Jur. § 329a.

"Whether these relations did exist between Smith and Patterson, and were thus extrinsieally proved, was properly .and fairly submitted to the jury, who found in favor of Patterson. Also they must have found that, under these circumstances, Smith made representations which he knew to be false, which he knew Patterson would rely upon, and thus enter upon a contract which Smith’s larger experience must have told him would result in loss.

In regard to the charge by the court, no special instructions were asked indicating what were the defendant’s views of the law, and no particular parts of the charge given excepted to. The exception is general, to the whole ■charge.

It is said, in the briefs, that the court recognized such a relation to exist as would subject defendant to more scrupulous care in dealing with plaintiff than pertains to persons •ordinarily contracting with each other. We do not understand the court as asserting that any such relationship did •exist. That was a question of fact, and the court say,-that if it existed, certain consequences would follow, leaving to the jury to determine the fact.

Upon the whole, we think the court stated the case with •entire fairness, and we can not see wherein they erred. We further think that there was evidence tending to show that :Smith took advantage of his position, influence, and the faith reposed in him, to impose upon Patterson.

He knew that Patterson relied upon him, and implicitly trusted the statements he made, and that previous relations .and existing circumstances justified the confidence reposed. For his own purposes — and as it would seem, to his own advantage — he makes representations of a material fact, which be knew to be false, but which he knew Patterson would take to be true, and act upon. These representations induced tbe contract and subsequent loss. If tbe jury found those facts to be true, tbe verdict was fully warranted.

We bave examined tbe exceptions to rulings upon tbeadmission of testimony, and tbink they are not well taken.

Judgment affirmed,.


source: Caselaw Access Project

author: Ashburs, J.

license: Public Domain

text:
    Armleder v. Lieberman.
    1. "Where -there has been irregularity or misconduct on the part of the jury, which might affect its judgment, or improperly influence the verdict, a new trial should bo granted. Where, however, it clearly appears that no improper effect could arise from the alleged misconduct, the verdict should stand.
    2. A separation of the jurors, after the jury has retired to the jury-room to-consider of the verdict, induced by a sudden alarm of fire in the near-vicinity of the jury-room, is not, of itself, such misconduct as will vitiate the verdict made on reassembling.
    3. A juror separated from his fellows, and privately asked an attorney, in no way connected with the case or parties thereto, “How are we to get along without those books or papers?” — saying, “They have not let us have them.” To which the attorney replied, in substance: You must do the best you can; he could give him no advice; that the juror could send up and have the court advise them. Held, Although such conduct on the part of the juror was a violation of his duty, yet, as it did not show any bias or prejudice for or against either party, that would affect the verdict, it was not sufficient cause for a new trial.
    4. Although a bill of exceptions states that it contains all the evidence offered on the trial, yet, if, on examination, it shows that material evidence or documents referred to are omitted, the reviewing coux-t will not reverse the judgment on the ground that the verdict is against the evidence.
    Error to tbe District Court of Brown county.
    Tbe original action was on an account. Tbe account' was attached to tbe petition. Plaintiff in error, defendant below, answered, denying tbe indebtedness of tbe estate of Jobn Armleder on tbe account, and, by way of cross-petition, averred a cross-demand, and prayed for a judgment. Plaintiff below replied, specifically denying tbe'items of cross-demand, and prayed for j udgment, as in the ■petition. The original petition, answer, and cross-petition .and reply were each amended in the progress of the case, ■on the discovery of new matters of demand and defense, -or upon leave of the court.
    The nature of the questions to be adjudicated do not re- ■ quire any detailed statement of the pleadings. The accounts, claims, and cross-demands are such as grew out of ■the relations of trusting employer, and trusted employe, in -conducting the business of milling, farming, repairing, improving, selling, etc.
    In July, 1872, by consent of parties, the case was referred to D. W. C. Loudon, as special referee, who, after examining a great number of witnesses, returned into court a ver- • dict for plaintiff, for $1,559.56; upon which the court entered a judgment. Defendant demanded and was awarded a second trial. A second tidal, by a jury, resulted in the finding of a verdict in favor of defendant, for $283.37. Afterward, $214.37 of this verdict was remitted by defend.ant, and a judgment entered in favor of defendant for $69.
    Plaintiff made a motion for a new trial, which was overruled, and plaintiff’ excepted. Dy bill of exceptions, the testimony admitted on the trial was brought upon the record, and also certain affidavits used on the hearing of the motion for a new trial, on the alleged ground of mis- ■ conduct of the jury.
    In the motion for a now trial various reasons are assigned, -only two of which need consideration :
    1. The alleged misconduct of the jury.
    2. Is the verdict supported by the evidence ?
    The district court reversed the judgment of the court of common pleas, on the ground of the alleged misconduct of the jury, and did not consider any other question in the - case.
    A petition in error is prosecuted here, to obtain a reversal of this judgment of reversal.
    The facts bearing on the alleged misconduct of the jury -.sufficiently appear in the opinion.

      David Thomas, for plaintiff in error:
    Misconduct of the jury. Weis v. The State, 22 Ohio St. 486 ; 3 Ohio, 53; 8 Ohio, 405; Brandin v. Grannis, 1 Conn. 401 ; Barbour v. Archer, 3 Bibb. 8; Parsons v. Huff, 88 Maine, 137: Downer v. Baxter, 30 Vt. 467-474; Burns v. Paine, 8 Texas, 159; Hilliard on New Trials, 208, 232-235.
    The supreme court will not reverse the judgment of the •common pleas, for error in refusing to grant a new tx'ial, unless the bill of exceptions discloses the whole testimony. Hall v. Reed, 17 Ohio, 498; Hicks v. Person, 19 Ohio, 426.
    The bill of exceptions must purport to set out all that was proved on the trial. Wilson v. The State, 2 Ohio St. 319 ; Youmans v. Caldwell, 4 Ohio 8t. 71; Tilton v. Morgaridge, 12 Ohio St. 98.
    To entitle the party to have the evidence reviewed, the bill of exceptions must show upon its face that it contains .all the evidence given upon the trial, and acted upon by the court below. Ide v. Churchill, 14 Ohio St. 372; McGonnigle et al. v. Arthur et al., 27 Ohio St. 251.

      J. H. Marshall, for defendant in error.
   Ashburs, J.

Two questions are presented:

I. Whether the district court erred in reversing the judgment of the court of common pleas, on the ground •of alleged misconduct of the jury ?

II. If it did, can the judgment of reversal be sustained on consideration of the whole evidence ?

I. The alleged misconduct of the jury: 1. By reason of its separation without permission from the couxt. 2. By reason of a conversation had by one of the jurors when •separated from his fellows.

After the jury had retired, in charge of an officer, to the jury-room, to consider the verdict, an ■ alarm of fine was heard. What appeared to be a dangerous fire broke out in a large block of buildings within less than one hundred .and fifty feet of the jury-room. Immediately “ there was •much noise in the court-house and halls ; the court-house bell rang an alarm. Suitors, witnesses, members of the-bar, tl\e court, and officers, rushed in great haste out of the-court-house.” Seeing and hearing this, the jury rapped, in apparent alarm, and requested the officer in charge to let them out. lie did so. “ As soon as the fire was extinguished, all of the jurors returned to their room.”

W. W. McKnight says, in his affidavit, that he saw two- -or three of the jurors in the case on the outside of their jury-room, and without the presence of the officer in, charge, and standing on the steps in front of the courthouse, and mixing with the crowd on the outside, and that one of said jurors, to wit, A. Henderson, then spoke toafEant, and took him to the southwest corner of the courthouse, and asked affiant, “ How are we to get along without those books and papers ?” and said, “ They have not let-us have them.” Said juror then told affiant what papers-had been given them, but affiant can not now recollect what they were. Affiant then told said juror that lie-would have to do the best he could without them, and fold said juror that he could give him no advice, and told him that he could send up and have the court to advise: them.

Henderson, the juror, states that while out he saw McKnight, whom he knew to be an attorney at law, and,, without alluding to this or any other case, affiant inquired of McKnight whether a jury could obtain books and papers from the court after they had retired to consult. Affiant further says that nothing took place between him and. McKnight reflecting upon the merit of said case, but that the same was a mere inquiry as to the power of the court to furnish books and papers in the case as aforesaid.

Section 268 of the code provides : “ When the case is-Anally submitted to the jury, they may decide in court or retire for deliberation. If they retire, they must be kept together in some convenient place, under the charge of an officer, until they agree upon a verdict or are discharged by the court, subject to the discretion of the court to permit them to separate temporarily at night, and at their-meals. The officer having them under his charge shall not suffer any communication to be made to them, or make any himself, except to ask them if they have agreed upon a verdict, unless by order of the court,” etc.

Section 297 provides that a new trial will be granted for:

“ 1. Irregularity in the proceedings of the court, jury, referee, or prevailing party, etc., by which the party was prevented from having a fair trial.

“ 2. Misconduct of the jury or prevailing party.”

Section 268 of the code, whether considered mandatory or directory merely, clearly requires that jurors remain together during the term of their deliberation, except when permitted to separate by order of the court. Yet, every departure from its letter will not be treated as an irregularity or misconduct on the part of the jury, such as to require the verdict to be set aside. When, from the irregularity or misconduct of the jury, there is reason to believe a fair trial has been prevented, or that the verdict is the result of bad motive, it should be set aside.

Many of the old rales, regulating the conduct of the jury after retiring to the jory-room to consider of their verdict, have been abrogated. They are now to be treated as reasonable men, and their conduct will be considered and judged in the light of the circumstances under which they acted, as well as the motives that influenced the conduct to be considered. The separation of this jury was an irregularity, and, technically, might be called misconduct. But what were the circumstances inducing the separation ?

While deliberating, an alarm of fire is heard in the jury-room. The fire is blazing in a large block of buildings, near the jury-room. The court, officers, attorneys, witnesses, all, in demoralized eagerness, are hastening from the court-house. The jurors see and hear all this, and; partaking of the general feeling of excitement, and perhaps curiosity, are let out of their jury-room — not to do an unlawful act — not with the purpose to violate their oath or'smirch their verdict. The act of separation was technically a violation of the statute, but involved no moral wrong, and, in our opinion, could not in any degree tend to prevent a fair tidal or an honest verdict. 30 Vt. 467; 38 Maine, 137; 8 Texas, 157; Hilliard on New Trials, ch. 10, § 52, and cases cited; 1 G. & W. on New Trials, 84, 85.

We will now look at the alleged misconduct of the individual juror. What he said and did has been stated. Was it misconduct that will warrant a destruction of the verdict?

There are many cases on this question reported in the books. The rule most clearly established by the cases appears to be, that, however improper the conduct of the juror may have been, yet, if it does not appear to have in any degree been occasioned by the prevailing party, or any one in his behalf, and indicates no improper motive or bias in the mind of the juror, and the court can not discover that it either had or probably might have had an effect unfavorable to the party asking for a new trial, the verdict should not be disturbed. See 12 N. H. 474; 19 Ga. 303; 4 Fost. 9 ; 3 Fost. 301; 3 Ky. 8 ; 13 Mass. 318 ; 4 B. & A. 681; 1 Gallis. 360 ; 12 Pick. 496-517; 9 Conn. 47-51 ; Hilliard on New Trials, ch. 10, § 11, 2 ed.; 1 G. & W. on New Trial, 84, 85.

The misconduct of a jury in a civil case, which would render it necessary to set aside a verdict and grant a new trial, should be of such a character as to evidence bad intention. Wright v. Burchfield, 3 Ohio, 53, 56. The conduct of this juror was reprehensible, but evinced no bad intention.

The rule is laid down in Collier v. The State, 20 Ark. 36, quite clearly. It was there held : “ Though the jury be guilty of misconduct, by conversation and intercourse with others during the progress of the trial, sufficient to merit reprimand or punishment, a new trial will not be granted, if it appear that there was no abuse, and no injury resulted to the defendant ” (losing party) “ from such misconduct.”

McKnight and the juror differ as to what did transpire' between them. Taking McKnight’s statement as the true' version, and it is the stronger of the two statements, we gather from it that books and papers were used in the trial that were not put in the possession of the jury; and the juror wanted to know how to obtain them, as he did not know how to get along without them. McKnight does not appear to have been connected in any way with the parties, or interested in the case. He did not act or speak in behalf of the successful party, nor to have, in any degree, influenced the mind of the juror. He made, to the juror’s question, a very judicious answer. While the conduct of the juror was clearly improper, and such as would ordinarily call for animadversion from the court, we wholly fail to discover from the testimony such misconduct as prevented a fair trial or an honest verdict.

A different ruling would not operate justly. It would punish an innocent party for no offense of his. When the juror is guilty of violating both oath and duty by improper conduct, he should be made to answer for it, and not an innocent party, in no way accessory to the misconduct of the juror.

To arrest from a party a verdict, which appears to have been honestly obtained, after long and expensive litigation, merely because a juror has been so indiscreet as to speak of the case to a stranger, when ho could have received no advantage from that improper act of the juror, and the opposite party no prejudice, would be scarcely compatible with the due administration of judicial justice. When, however, the prevailing party, or his agent or friend, has approached a juror during the trial, or while he has the case under consideration, and addressed the juror on the subject of the action, the verdict should be set aside. He should be made, in that way, to feel the punishment of violated law. 2 Hale’s P. C. 308.

So, if it appears to the court that the unsuccessful party either did, or probably might have sustained injury from the improper conduct of the juror, a new trial should be granted, to the end that a verdict may be obtained, freed from suspicion that one party has been favored, or the other prejudiced by the misconduct of a juror. The court will seek, as far as practicable, to preserve tbe purity of trials by jury, and the books show that many learned judges have thought the surest way to attain that end is by setting aside every verdict where a juror has spoken of the case contrary to law. This is hardly the spirit of our statute, and would fail lo attain the desired result. The juror suffers nothing by setting aside the verdict. The successful party alone is injured ; and, if innocent, should not be made to suffer.

Upon the whole, we think the rule that will best secure the desired result would be, that, in cases where the irregularity or misconduct of the juror appears to have operated in favor of the successful party, and as a necessary consequence, to the prejudice of the unsuccessful party, a new trial should be granted. On the other hand, where it appears that it has produced no such result, the verdict should be permitted to stand.

Any attempt on the part of the prevailing party, his agent, or attorney, on or over the jury, resulting in an irregularity or misconduct of the jury, would be cause for a new trial; but in a civil action, where the prevailing party is wholly free from fault, and the irregularity or misconduct of the jury, or a-juror, is free from intention of wrong, and has in no appreciable way affected the verdict, it should not be disturbed.

II. We are next ,to cousider whether the judgment of reversal can be supported on other grounds.

There is but one other view of tbe case on which the judgment of reversal might be sustained, did it exist: Is the verdict unsupported by the evidence ? Even this question can not be reached under the rules of law. On looking into the bill of exceptions, we find it substantially stated that it contains all the evidence introduced on the trial to the jury. Yet, on á careful examination of its contents, we are clearly satisfied it fails to bring up all the evidence used on the trial, which was deemed material and admitted in the trial court. We will not stop to point out its defects, for they are manifest. But if we are mistaken in this, and if we weigh and consider all the evidence found in the bill, we can not hold, under well established rules governing this class of cases on review, that the verdict is not supported by the evidence.

We find no substantial error in the judgment of the court of common pleas in refusing to award a new trial.

It follows that the judgment of the district court must be reversed ; and this court now proceeding to render the judgment the district court should have rendered, affirms the judgment of the court of common pleas.

Judgment accordingly.


author: Johnson, Chief Judge.

text:
    Murphy & Bros. v. Swadener et al.
    1. Whore an actual and valid levy of an execution has been made upon personal property, the property so levied upon is, in'contemplation of law, in the custody of the officer, and if it is returned to, or left with, the judgment debtor, such levy is not per se void as against subsequent levies.
    2. Whether such levy is valid, or becomes fraudulent and void as against subsequent levies, is a question of fact, depending on the character of the property and all the surrounding circumstances of the case.
    3. Goods and chattels of the execution debtor are, as against subsequent levies, bound from the time they are seized in execution; but where an officer, under promise of indemnity for his neglect, and to enable the debtor to raise money to satisfy the execution, by the prosecution of his business, merely indorses a paper levy on the execution in his hands, and allows the debtor to retain absolute possession and control of the property, with power of use and sale in the usual course of business, such levy is void and the goods and chattels are subject to seizure in execution in favor of other creditors.
    4. Where a valid levy has been made upon goods and chattels in the hands of the officer, a constructive levy of subsequent executions coming into his hands before sale, may be made by indorsement merely, but when the original levy is a mere paper levy, and therefore void, a constructive levy of other executions will not bind the property against subsequent executions actually levied thereon.

      5. Where a sheriff or other officer has been amerced for failure to make the money on an execution, and pays the judgment, or where he pays off a judgment to avoid amercement, he has such an interest in the collection of such judgments as disqualifies him from executing process to collect the same.
    6. Where the sheriff has been amerced, and compelled to pay a judgment which he has not collected, he is permitted to sue out execution in the name of the original plaintiff for his use, under section 457 of the civil code, but the process should be directed to the coroner, as provided in section 582 of the code.
    7. An order of sale of personal property, under section 430 of the code, presupposes a previous valid levy, but where there is but a mere paper levy, which is void, or where there has been a valid levy which has become fraudulent and void as against subsequent creditors, such an order of sale is inoperative as against subsequent executions actually levied on the property.
    8. Where an order of sale, founded on such void levy, contains a clause for an additional levy, under section 431 of the code, it is valid as a fi. fa. execution only, which may be levied on the property specified in the original void levy, as well as upon other property.
    Error to the Superior Court of Montgomery county.

      Young § Gottschall, for plaintiffs in error:
    As to what constitutes a levy, see Minor v. Smith, 18 Ohio St. 82; Moore v. Fitz, 15 Ind. 43; Crocker on Sheriffs, § 436; Rorer on Jud. Sales, §§ 1,002, 1,003.
    Goods, when levied on, should be taken into possession of the sheriff. 4 Ohio, 56 ; 5 Ohio, 174; 6 Ohio, 452 ; 10 Ohio St. 488; 6 Black. 442; 4 Black. 304; Crocker on Sheriffs, § 449.
    As to distribution of proceeds of sale, see 11 Paige Ch. 21; Borer on Sales, § 1,021; 17 Johns. 116 ; 1 Hill, 559; Gwynne on Sheriffs, § 213 ; Crocker on Sheriffs, § 442; 5 Ohio 522 ; Code, § 424 (S. & C. 1,069).
    The judgment of Holmes & Co. was satisfied, and the execution and levy discharged, by voluntary payment of said judgment by said sheriff. Carpenter v. Stilwell, 1 Kernan, 61; Reed v. Rruyn, 7 Johns. 426; Sherman v. Boyce, 15 Johns. 443; Morris v. Lake, 9 Smedes & Marshall (Miss.), 521.

      The sheriff says “ he paid the judgment of Holmes $ Co.” and became the owner of both Hogle & Co.’s and Holmes & Co.’s judgments and levies, after October 13, 1870, and before the sale.
    If he became the owner it was simply by such payment, and there is no evidence of any assignment or agreement that such payment should not operate as a discharge.
    Being interested in both of these judgments, said sheriff had no right to execute either of these executions. In his hands they were void process and he had no right to levy, sell or receive the proceeds of a sale thereunder. Rorer on Judicial Sales, §§ 1024 and 1028; Crocker on Sheriffs, § 422; Chambers v. Thomas, 3 A. K. Marsh, 536; Singleterry v. Carter, 1 Bailey (S. C.), 467; May v. Walters, 2 McCord, 470.
    And see also code, section 418, which provides that executions shall be deemed process of the court, and code, section 582, which provides that “process, in an action wherein the sheriff is a party, or is interested, shall be directed to the coroner.”
    But in postponing the levies of Nason & Co. and "Wood & Co., upon the machinery, we think the court below was l’ight, and that in any distribution made upon the theory that the original levies on the machinery were valid, these two executions should be postponed to all others.

      We insist that they become dormant in the hands of the sheriff, and lost their priority in consequence of the interference of the plaintiffs in execution. Crocker on Sheriffs, §§ 416 and 417 ; Voorhies’ N. Y. Code, § 291, note b; 23 Ind. 170; Gwynne on Sheriffs, 212; Kellogg v. Griffin, 17 Johns. 274; 1 Smith’s Leading Cases, 82; Acton Woodnut v. Knowles, 14 Ohio St. 18; 2 Bush (Ky.), 236; 7 Ohio, (2) 148.

      Houk ^ McMahon, for defendants in error :
    As against the defendant in execution, no great strictness .or peculiar form is required in making a levy upon personal property. Crocker on Sheriffs, §§ 435, 446; 10 Ohio St. 495; 13 Ohio St. 82.
    A levy once made, vests a right in the plaintiff in execution which can not be divested except by such acts as would divest similar rights of property in other cases. Morre v. Powell, 1 Disney, 145; Both v. Wells, 29 N. Y. 485 ; Acton v. Knowles, 14 Ohio St. 28 ; 6 Hill, 232; 5 Hill, 377 ; 5 Cowen, 390 ; 4 Dallas, 358.
    All these cases establish that leaving the defendants in possession, without the consent of the plaintiff in execution, does not impair the levy of the creditor. Applying these principles to the case in hand, Holmes & Co. and Hogle & Co. had valid levies.

      James H. Baggott, Craighead &¡ Munger, Peter Odlin, Gunckel $ Bowe, Pfouts Hartrauft, Haynes, Howard &; Howard, and Cyrus H. Baldwin, attorneys for the other defendants.
   Johnson, Chief Judge.

The facts of this case are complex and difficult to condense. So far as necessary, they will be stated in connection with the legal questions considered. From June, 1868, to April, 1870, judgments were rendered against Bobert Ogden, in favor of a large number of bis creditors. Upon these several judgments, executions, alias executions, and orders of sale were issued at sundry times prior to October 13, 1870, and placed in the sheriff’s hands for service. On said 13th of October, the sheriff having then in his hands sundry executions to levy, and orders of sale, on which previous levies had been indorsed, for the first time took actual possession of certain property on which nominal levies, or paper levies, had been previously made, consisting of a stock of goods in a store, which Ogden was carrying on, and the machinery in a manufactory of brass, which he owned and was operating. This machinery consisted of a stationary engine, boiler, chimney, lathes, pipe cutting machines, scales, shafting, belting, pulleys, and fixtures. The property was sold November 16, 1870, and the money brought into court by the sheriff for distribution. Exceptions were taken to the order distributing the money.

It is claimed that the court erred in holding that there was no valid levy on the goods in the store prior .to October 13, 1870.

The first or original executions issued upon said judgments were dated and received by the sheriff at the times following, to wit:

1. Nason & Co., dated June 30, 1868, received June 30, 1868.

2. Wood & Co., dated July 2,1869, received July 3,1869.

3. Corning & Co., dated September 10, 1869, received September 10, 1869.

4. Spang, Chalfant & Co., dated September 10, 1869, received September 10, 1869.

4. John ITorton, dated December 9, 1869, received December 9,1869.

5. Tucker Maufacturing Co., dated January 28, 1870, received January 28, 1870.

6. Hogle & Co., dated May 2,1870, received May 2,1870.

7. Holmes & Co., dated May 9,1870, received May 9,1870.

8. Hecht & Co., dated May 11,1870, received May 11,1870.

9. Murphy & Bros., dated May 23, 1870, received May 23, 1870.

10. Wm. Brownell & Co., dated August 8,1870, received August 8,1870.

10. Petry, Booth & Co., dated August 8, 1870, received August 8, 1870.

11. Blatchford & Co., dated October 6, 1870, received October 6, 1870.

11. McCormick & Gibson, dated October 6,1870, received October 6, 1870.

11. Hunter, Keller & Co., dated October 6,1870, received October 6, 1870.

The original levies indorsed upon said' execution were made in the following order:

1. Nason. & Co., on machinery, June 30, 1868, and on stock, April 12, 1869.

2. Wood & Co., on stock and machinery, July 10, 1869.

3. Corning & Co., Sept. 11, 1869.

3. Spang, Chalfant & Co.: Sept. 11,1869.

4. John Horton, Dec. 9, 1869.

5. Tucker M’f’g Co., March 6, 1870.

7. Holmes & Co., May 14, 1870.

7. Hecht & Co., May 14, 1870.

8. Murphy Bros., May 28, 1870.

9. Hogle & Co., June 28, 1870.

10. Brownell & Co. Sept. 6, 1870.

10. Petry, Booth & Co., Sept. 6, 1870.

11. McCormick & Gibson, Oct. 6, 1870.

11. Hunter, Keller & Co., Oct, 6, 1870.

At the time of said last levy, on October 13, 1870, when the sheriff took actual possession, and under which the sale was made, the following executions were in his hands and had been received by him in the following order, and expired or were returnable as follows :

1. John Horton, vendi received August-16, 1870, expired October 15, 1870.

2. Nason & Co., 3 vendi received August 24, 1870, expired October 23, 1870.

-. Wood & Co., vendi received August 24,1870, expired October 23, 1870.

3. Spang, Chalfant & Co., vendi received September 3, 1870, expired November 2,1870.

3. Corning & Co., vendi received September 3, 1870, expired November 2,1870.

4. Tucker Manufacturing Co., vendi received September 6, 1870, expired November 5, 1870.

4. Brownell & Co., vendi received September 6, 1870, expired November 5, 1870.

4. Petry, Booth & Co., vendi received, September 6,1870, expired November 5,1870.

5. Hecht & Co., vendí received September 7,1870, expired November 6,1870.

6. Murphy & Bros., vendí received September 20,1870, expired November 19, 1870.

7. Nason & Qo.,fi. fa. received October 5,1870, expired December 3,1870.

8. Blatchford & Co., fi. fa. received October 6, 1870, expired December 5, 1870.

8. McCormick & Q.,fi.fa. received October 6, 1870, expired December 5, 1870.

8. Hunter, K. & Co., fi.fa. received October 6,1870, expired December 5, 1870.

On November 1, 1870, when first notice of sale was published, all of said executions, except those of Nason & Co., and Wood & Co., which had expired and were returned October 23, 1870, and that of Horton, which had been returned and another issued, on October 15, 1870, remained in the hands of the sheriff’, and the following additional executions had been placed in his hands:

9. Hogle & Co., received October 29,1870, and which expired December.28,1870.

10. Holmes & Co., received November 1,1870, and which expired December 31, 1870.

There was also in the hands of the sheriff at this time, the plu. fi. fa. in favor of Nason § Co., issued October 4, 1870, while said three vendí remained in his hands.

At the time of sale, to-wit, November 16, 1870, all of above executions had expired, except the following:

1. Murphy & Bros., received September 20, 1870, returnable to November 19, 1870.

2. Nason & Co., received October 5, 1870, returnable to December 3,1870.

( Blatchford & Co., 1 Received October 6,1870, 3. -< McCormick & G-., > returnable to December 5, (Hunter, Keller & Co. j 1870.

4. John Horton, received October 15,1870, returnable to December 14,1870.

5. Hogle & Co., received October 29,1870, returnable to December 28,1870.

6. Holmes & Co., received November 1,1870, returnable to December 31, 1870.

Upon these facts, the court, at December term, 1871, found and decided as follows :

“ That the levy of Holmes & Co., and the levy of Hogle & Co., now owned by the sheriff, are the first liens upon the stationary engine, boiler, chimney, lathes, pipe-cutting machines, scales, shafting, belting, pulleys, and fixtures in said store, and that the same sold for $2,029.50..

“ That the proceeds of stock and other personal property, so sold by the sheriff, are to be distributed among the other creditors holding executions, as follows :

“ 1. To John Horton, the sum of $321.90, with interest to November 16,1870, with $10.95 costs.

“2. To James Wood & Co., $1,232.89, with interest from January 1, 1870, and $12.40 costs.

“ 3. To Jos. Nason & Co., $1,399.12, and $14.95 costs.

, “ 4. To Spang, Chalfant & Co., $596.99, and interest from August 21,1869, and $11.95 costs.

“ 5. To Corning & Co., $966.75, with interest from September 8, 1869, and $12.15 costs.

“ 6. To Tucker Manufacturing Co., $195.50, with interest from January 3,1870, to November 16, 1870, and $11.05 costs (if there be funds.)

“ 7. To Petry, Booth & Co., $32.75, with interest, and costs (if funds.)

8. To Brownell & Co., $49.15, with interest, and $23.50 costs (if-funds.)

“ 9. To J,Hecht & Co., $257.40, with interest, and $11.36 costs (if funds.)

“ 10. Balance, if any, to Murphy & Bros., upon their claim, etc.”

In regard to these levies upon the machinery, as well as the stock of goods in the store prior to October 13, 1870, the evidence is clear that they were but nominal, or mere paper levies. None of this property was actually seized or taken in execution. There was no distinct, open, or unequivocal assertion of dominion asserted by the sheriff over the property, such as its nature and character would admit of, or as constituted any interference with the possession of the judgment debtor, either actual or constructive. The property was in no sense, as against subsequent levies, in the custody of the officer. Had he been sued for trespass, he could have safely plead not guilty, without relying on the writs for his protection.

The sheriff testifies: “ No arrangement that Ogden should shut up. Bales were to go on, and he to continue business. Prior to October 13, 1870, Ogden had been left to carry on his ordinary business and had continued in possession.”

Miller, Ogden’s bookkeeper, says: “ Ogden kept open the store at all times, . . and continued purchasing, receiving, and selling goods, carrying out contracts, and going on uninterruptedly with his business, as before the levies were made, except there was a suspension of the brass manufactory caused by its being no longer profitable.”

Again he says: “ The purchases or additions to the stock during the period I was there” (from May 11, 1869, to September 5,1870), “ amounted to from $12,000 to $15,000. The stock amounted to about the same in value, when I quit, as when I commenced, the sales amounting to about the same as the- purchases. The machinery was used just as it had been before. The object of the delay was to benefit Ogden. He was to protect and indemnify the sheriff”

The deputy sheriff (Potter) says, he wanted Ogden to assign to the sheriff' accounts for indemnity, and that: “ Ogden was to go on as usual with his business. The store was to be kept open as it had been, Ogden continuing his sales and Ms work.”

The sheriff further says, that Ogden told him he should not suffer, and that he “ also stated to me that certain accounts should be turned over to me when jobs finished.”

It is apparent, this is not the case of an actual seizure or taking of the property in execution, leaving it in the possession of the judgment debtor temporarily, but a nominal levy, merely, by indorsement on the writs, under an arrangement, that the sheriff' was not to interfere with the continued absolute possession and control of the property by Ogden, who was to use it free from any interference of the sheriff, who was to be indemnified for his omission of official duty. The motive actuating the sheriff was, no doubt, one of kindness for Ogden, w’hom he desired to help through his embarrassments. The evidence shows that the sheriff was allowing Ogden to go on, buying and selling to make the money to pay off'these executions without process.

On the 13th of October, the sheriff becoming satisfied that Ogden was not acting in good faith with him, seized the property, and on the 16th of November sold it.

In order to make a valid levy, on goods and chattels, the sheriff' must have them within his powmr and control, or at least within his view, and if he then makes a levy, it will be good if followed up afterward within a reasonable time, by his taking possession in such a manner as to apprise every body of the fact of its having been taken in execution.

Such levy, to be valid, as against subsequent levies, and, as against a subsequent purchaser or mortgagor, must be actual and with continued manual seizure by the officer, when such seizure is practicable, or if the property is within view or power of control by making such • distinct, open, and unequivocal assertion of dominion over it, as the nature and situation of the property and the circumstances will admit of, or as the judgment debtor may recognize and acquiesce in, and constituting such an interference with the possession, either actual or constructive, as that trespass would lie against the officer, but for the protection afforded by the writ. Minor v. Smith, 13 Ohio St. 82.

It is true, as was held in Acton § Woodnut v. Knowles, 4 Ohio St. 28, that after levy on chattels, the return of the property to the defendant, with or without security for its redelivery, does not fer se avoid the levy.

In that case, there was an actual levy on a horse, the

execution returned not sold for want of time, without further process for fourteen months. In the meantime the property had been returned to the debtor, and it was said, it was a question- of fact whether the levy became fraudulent and void, as tending to hinder and delay other creditors. But when ho levy in fact has been made, and the title and possession remain in the debtor, a mere paper levy is void per se, as against subsequent levies, or boma fide purchasers. Minor v. Smith, 13 Ohio St. 79 ; Green v. Burke, 23 Wend. 493.

In this ease there was no actual levy, no seizure which in contemplation of law changed the title, possession, or right of possession. The property was never in the custody of the officer. By agreement, he omitted to make an actual levy, and allowed the property to remain as before in the custody of the debtor, with full power to use and sell it, to realize the money to pay the debt. At no time was the possession changed by a seizure such as the character of the property would admit of.

The stock of goods on hand when this levy was made was, under this agreement, sold, and others purchased in their place. The machinery in the brass-works was run to fill orders, under a promise that the amount thus earned was to be handed over on these executions. The sheriff was to be indemnified, not for a failure to redeliver, for as there had been no seizure and delivery, there could be no redelivery, but for failure to proceed under the process in his hands. In short, these were mere “ paper levies,” and void.

Under section 421 of the code, the goods and chattels of the debtor are, as against subsequent actual levies, at least only bound from the time they shall be seized in execution. The officer should take actual possession, so far as the nature of the property will admit of. Cary v. Bright, 58 Penn. St. 84; Duncan’s Appeal, 37 Penn. St. 500 ; Logsdon v. Spiney, 54 Ill. 104 ; Borer on Jud. Sales, ch. XXII; Freeman on Judgments, ch. XXIV; Minor v. Smith, 13 Ohio St. 79.

Manifestly, it was the duty of the sheriff to execute the process, and the agreement by which he'omitted that duty was against public policy, and all his proceedings under it were void. The fact that he may have made an inventory and indorsed a levy on the writ does not constitute such a seizure as makes a valid levy, especially where, as in this case, it is understood that the debtor’s power of sale, possession and use were to remain undisturbed. The understanding seemed to be that Ogden was to go on as usual, and himself make the money in his business to pay these executions. The sheriff desired, as did several of his creditors, that he should have the opportunity to pay his debts and save something for himself. As soon as he found that Ogden was not fulfilling his promise to do this, and that he was not using his property as agreed to pay off these executions, he levied the executions then in his hands on. what he then found, by a seizure of the property. But this can not be done where no prior valid levy has been made. Hence a constructive levy of a subsequent writ is not valid, if the levy of the first is a nullity ; for under neither has the property been seized in execution. Ve conclude, therefore, that all the pretended levies prior to October 30, 1870, were mere paper levies, and void, as against an actual levy made on that clay.

II. Bid the court err in ordering the judgments of Hogle & Co. and Holmes & Co. to be first paid out of the money arising from the sale of the machinery ?

At the time of the actual seizure of the property, October 13, 1870, neither of these creditors had executions in the sheriff’s hands. Prior writs in their favor had been returned. Ou the 28th of June previous the sheriff had indorsed as levied a writ in favor of Hogle & Co., and a like proceeding was had on an execution in favor of Holmes & Co., May 10, 1870, but owing to the omission of duty by the sheriff, in not making the money, he was amerced by Hogle & Co., and compelled to pay them ; and, to prevent amercement by Holmes & Co., he also paid off their judgment.

On the 29th of October and 1st of November, while the property was in his hands, by virtue of his actual levy under other executions, made October 13, 1870, and while the property was advertised for sale, the sheriff caused executions, or rather orders for sale, with clause for additional levies, to be issued on these judgments, directed to' himself, for his benefit, for the amounts he had paid Hogle- & Co. and Holmes & Co. If we regard these judgments satisfied by these payments by the sheriff, then the executions thereafter issued were void. If the sheriff be subrogated to the rights of Hogle & Co. and Holmes & Co. to have execution, theu he was interested in the process, and for that reason it is void in his hands. Public policy forbids the sheriff from executing process in which he is interested. He can not with his own money pay the plaintiff and keep the defendant’s property, nor hold the execution and afterward make the money on it. If, while it is in his-hands, he acquires any interest therein, he can not proceed to execute it. So, when he has been attached for not returning the execution, and he pays and takes an assignment, he can not enforce the collection by a subsequent execution. Carpenter v. Stillwell, 1 Kernan, 61; Stewart v. Magness, 2 Cold. (Tenn.) 2 ; Reed v. Pruyn, 7 Johns. 426, Sherman v. Boyce, 15 Johns. 443 ; Morris v. Lake, 9 S. & M. 521; Bigelow v. Brevost, 5 Hill, 566 ; Carpenter v. Thomas, 3 A. K. Marsh. 536; Rorer on Jud. Sales, § 1024.

In such cases, the corouer must act. Code, § 592, and above eases.

Our atteution is called to section 457 of the code of civil procedure, which provides that, -when the sheriff or other officer shall have been amerced, and shall not have collected the amount of the original judgment, he shall be-permitted to sue out an execution, and collect the amount in the name of the original plaintiff. This does not authorize the sheriff to execute this process for his own benefit ; nor does it, in my opinion, warrant the issuing of a vendi, or order of salo, based on a former levy, where other levies have intervened, as this would be to give him priority over creditors who had gained a priority over the very judgment for the non-collection of which he was amerced.

Holding, as we do, that there was no valid levy on either the stock of goods or machinery, prior to October 13,1870, the question of priorities in the distribution of the aggregate proceeds, is to be determined by section 424 of the code of civil procedure. At the time of such actual levy, the sheriff had in his hands sundry Ji. fa. executions, as well as orders of sale, or vendi, founded on the previous void levies, and one or more orders of sale, with additional levy clause. As to these different orders, we hold :

1. That an order of sale of personal property, under section 430 of the code of practice, presupposes a previous valid levy of an execution in favor of the same party, but if no levy has in fact been made, or if a levy has been made which, as to subsequent execution creditors who have levied is fraudulent and void, then such order of sale is inoperative and void as against such subsequent levies.

2. Where such order of sale is founded on such void levy, but contains a clause under section 4-31 of the code for an additional levy, such an execution is valid as a fi.fa. execution only, which may be levied on the same property specified in the original void levy.

The judgment of the superior court is reversed, and cause remanded for a distribution of the fund realized from the sale of both stock and' machinery, according to section 424 of the code, excluding the executions on the judgments in favor of Hogle & Co. and Holmes & Co.


text:
    Lapham v. Martin.
    In one clause of his will the testator bequeathes to M. L., a married woman, living with her husband, a specified sum of money. In a subsequent clause, it is provided that if M. L. shall die leaving no child of her own, then the money shall be equally divided between the testator’s living children, the issue of his own body. Upon final settlement of the estate, the executor had sufficient funds to pay all the legacies, but refused to pay M. L., claiming the right to hold the amount during her life, to be placed at interest for her benefit. Assuming that the limitation over to the living children of the testator, in the event that M. L. shall die leaving no child of her own, is valid, and not void as being inconsistent with the first clause — Held: 1. That ■as the bequest over is upon uncertain contingencies that may never happen, namely, the death of M. L. leaving no child of her own, with living children of the testator surviving her, the children of the testator, if they take at all, do so by way of executory devise, and not as legatees in remainder. 2. M. L. takes the bequest absolutely, and is entitled to the possession thereof. Her estate, if the limitation over is valid, is liable to be divested, by the happening of the contingencies named, and no estate or interest vests in the possible legatees over, until such contingencies happen. 3. Upon final settlement of the estate, before the death of M. L., and in the absence of any provision of the will making it the duty of the executor to hold and manage said legacy, she is entitled to receive the same. 4. If such limitation over is valid, the children of the testator, and not the executor, in the absence of a trust reposed in him, are the proper parties to an action or proceeding to protect their contingent interest, if any necessity for such an action arises.
    Error to the District Court of Marion county.
    The facts will be found stated in the opinion.

      T. B. Bowen, for plaintiff in error :
    In the interpretation of the will the intention must govern. 4 Ohio St. 351; 15 Ohio St. 108; 25 Ohio St. 477 ; 53 Penn. St. 79 ; 3 Ired. Ch. 323 ; 53 Penn. St. 106; 14 Ohio St. 251; Sexton, 141; 1 Hill. Ch. 265 ; 3 Humph. 640; 6 Port. 319; 4 Green. (N. J.) 365; 17 Ohio, 171.

      W. Z. Davis, for defendant in error:
    Repugnancy. 19 Ohio St.. 490 ; 14 Ohio St. 251; 1 Redfield on Wills, 449, 451, §§ 18, 14; Ib. 680, 681, § 23. Construction. 19 Ohio St. 490 ; 15 Ohio, 561. Remainders in Personalty. 2 Redfield on Wills, 624, and notes 39, 40; 2 Kent’s Com. 352; 15 Ohio, 559; 19 Ohio St. 490.
    For construction or legal effect of the words “ die without issue,” see Hawkins on Wills, 206; 1 P. Williams, 663; 3 Ib. 262; 3 Paige Ch. 30; 1 P. Williams, 563; 7 T. R. 555, 589; Ambler, 633; 6 Serg. & R. 32; 16 Ga. 550; 18-Ga. 550.
    A bequest of money for life, and then over is to be-deemed a gift of the interest only, and not an absolute gift of the principal. Field v. Hitchcock, 17 Pick. 182; Betty v. Moore, 1 Dana, 235; Ruthbone v. Dykman, 3 Paige Ch.. 9; Jones v. Sothoren, 10 Gill & J. 187; Dashiell v. Dashiell,. 2 Har. & Gill, 127; Horner v. Shelton, 2 Met. 194. And see Jones’ Ex’rs v. Stiles, 4 Green (N. J.), 324.
   Johnson, Chief Judge.

The plaintiff, Mary L. Lapham, sues the executor of Robert Martin, deceased, to recover a legacy of $600, bequeathed to her. She avers that the will of said Martin was probated February 25, 1868; that the defendant took upon himself .its execution; that all expenses of, and charges against, the estate, and all claims of creditors, have been paid, and that there remains in said executor’s hands ready funds sufficient to pay all the legacies named in said will, including that to the plaintiff. She also avers that she has frequently requested and demanded payment of said legacy to her, which he refuses to pay; wherefore she asks judgment.

The executor answers as follows: Defendant says that the last will of Robert Martin, deceased, mentioned in the petition, contains the following provisions:

‘ I give and bequeath to Mary L. Lapham, wife of Or-son Lapham, and daughter of Lavina Williams, formerly Lavina Green, the sum of six hundred dollars ($600).' The said Mary L. Lapham was raised in my family, has always 'been dutiful and kind to me, and I hereby recognize her as ■,a granddaughter.

‘ It is my will that if Mary L. Lapham shall die, leaving no child of her own, then and in that case, the sum of six hundred dollars ($600), bequeathed to her herein, shall be equally divided between my living children, the issue of my ■own body.’

“ Which are the only provisions of said will relative to said Mary L. Lapham or said six hundred dollars. There* fore, defendant denies that said Robert Martin bequeathed said sum of six hundred dollars to said Mary L. Lapham, •absolutely, but says the same was upon condition, and that said condition has not transpired. That said Mary L. Lap-ham has always been, and still is, childless, although she has been married about the period of ten years — and will probably ever so remain childless. That plaintiffs are pecuniarily unable to respond in repayment of said six hundred dollars, when said Mary L. shall die. That defendant has offered to plaintiff to place said money at interest, and collect and pay over to them the interest, free of charge, ■ during the life of said Mary L. Lapham.

“And defendant says he has been directed by the heirs of Robert Martin, the issue of his own body, not to pay over said sum of money, but to contest the same. He therefore asks that the will be construed, and he be advised and ordered as to his duty in the premises.”

To this answer the plaintiff filed a demurrer, which was overruled, exception noted, and a reply was filed, denying that said bequest was made upon any condition which has not transpired, or that plaintiffs are pecuniarily unable to respond in repayment of said legacy, when said Mary L. ■shall die, and denies the defendant’s authority to coutest the payment of the same to her. Upon this issue, there was a finding and judgment for the defendant, with a motion for a new trial, and bill of exceptions. The evidence ■discloses the fact that the plaintiff and her husband are of limited means, living together in the State of Illinois, with no more property than would be covered by the exemption laws of that state. There is no evidence to negative the probability that the legatee may not yet have children living at her death.

The issue made upon the demurrer and the reply are the-same, and may be considered together. The testator bequeathed to Mary L. Lapham six hundred dollars, and provides that if she shall die, leaving no child of her own, then this legacy shall be “ equally divided between my living children, the issue of my own body.”

The executor admits all charges and claims against the estate have been paid, and that he has ready funds with which to pay said legacy, but excuses himself on the ground that the legatee has been married about ten years without children, and will probably remain childless, and because she and her husband “ are pecuniarily unable to respond in repayment of said six hundred dollars, when said Mary L. shall die,” and on the further ground that the heirs of the testator Object to such payment; and that he has offered to place said money at interest, for her benefit,, during her life.

By section 118 of the executors and administrators’ act (1 S. & C. 588), the court may, if it sees fit, require a legatee who is paid within four years, to give security to refund, if necessary to pay debts. As there are no debts in this case, this statute does not apply. The claim by defendant is that, by.this will, Mary L. takes only the interest in this legacy, during her life, and if she leaves no child surviving, it goes to the living children of the testator; and that the legacy is to remain in the executor’s hands, to be ■ invested by him, the interest only to go to the legatee.

On the other hand, the plaintiff claims that this is an absolute bequest to her, and that the limitation over is void, as inconsistent with the prior clause; or, if that be not so, the first clause vests in her an absolute title to the legacy, with the right of possession, subject to be divested only upon her dying without leaving a child o'f her own; and that no trust or duty is imposed on the executor in the-premises.

In the view we take of this ease, it does not become material to determine whether this limitation over is absolutely void or not. We assume, for 'the purposes of this case, that in the event of the death of Mary L., leaving no child, the then living children of the testator would take. We assume further, that it is immaterial whether Mary L. dies before the testator or after. As to the effect of the limitation over, the most that can be claimed is, that, as this is a bequest of personalty, the limitation over being dependent on a future uncertain event — her dying leaving no child — whatever interest these children of the testator take is by way of executory devise, and not in remainder. Tuylor’s Adm’r v. Foster, 14 Ohio St. 166; Niles v. Gray, 12 Ohio St. 320; Pills v. Brown, Cro. Jac. 590 ; Foster v. Bradley, 3 Term R. 143 ; 1 Jarman on Wills, 834 ; 2 Redfield on Wills, 271; Abbott v. Essex Co., 18 How. U. S. 202; Moffat v. Strong, 10 Johns. 12; Field v. Hitchcock, 17 Pick. 122; Rathbone v. Dickman, 3 Paige, 9; Westcot v. Cady, 5 John. Ch. 334; Boring v. Boring, 100 Mass. 340; Williamson v. Hall, 10 Am. Law Reg. 466; Jones v. Stites, 4 C. E. Green.

The estate or interest of the first legatee would, therefore, be a determinable one,. and until the divesting contingency happens, it remains in the first taker. By what authority, therefore, does the executor assert a trust in himself to hold and manage this bequest? None is expressed in the will, and none is imposed by statute. Does any arise by implication ? It is not doubted but that it was competent for the testator to have imposed the duty of managing and preserving this bequest, but he has not seen fit to do so in terms.

In Fiske v. Cobb, 6 Gray, 144, the devise was of all the residue of his real and personal estate, to C., in fee, provided that, if O. should, at his decease, leave no children or child, then over in certain shares. ’ C. was named as executor, but declined the trust, and removed from the state. It was held, assuming that the limitation over was valid, that unless there is danger of his wasting, secreting, or removing the property, the legacy is to be paid to the legatee without requiring security. It is said the divesting contingency will not prevent such payment at the end of the year from the testator’s death. This point was recently before this court, in Ratliff v. Warner (not yet reported.) The authorities there .cited, and that decision, establish the proposition that whatever be the ultimate rights of the parties, the executor has no right, in a ease like this, to withhold payment of the legacy upon a contingency which may never happen.

As was said in Griffith v. Smith, 1 Vesey, Jr., 97 : “ Suppose there is a contingency left, plaintiffs must have the money; for I can not keep it in court all that time.to await ■ the event. When the contingency arises, it will come to be disputed, if it ever should arise; but non constat now, that it ever will.”

Under what circumstances a court of equity will require a legatee to give bond and security, where there is a valid limitation over, to take effect in futuro, upon the happening of a divesting contingency, must be left for determination when a proper case is made. So also must the question of the executor’s authority and duty in such cases. Confining ourselves strictly to the issues made upon the record, we hold, that whether this limitation over is valid or void, no trust is imposed upon the executor to retain and manage this legacy for the benefit of those who may, in a contingency which may never happen, be entitled to the bequest.

There is no allegation showing danger of waste or loss of the money if paid over. It is said the plaintiffs are now pecuniarily unable to repay when the legatee shall die. Non constat, but they may be able when the divesting contingency happens, if it ever does. Admitting that such a limitation over is valid upon the happening of both contingencies, yet both are uncertain, and the failure of either defeats it. If Mary L. should die leaving a child, or if she die leaving no child and no living children of the testator, the limitation over never would take effect, and in such a case the bequest would be absolute in the first taker and her '.heirs generally. Manifestly.it was the duty of the executor to pay this legacy as provided by statute, unless the will imposes a trust on him to hold it until the contingency is ’ determined.

The will discloses no intention to withhold the legacy from one for whom he expresses an affectionate desire to provide as a grand-daughter.

Whether Mary L. will die leaving no child, is uncertain. Equally uncertain it is, whether, .if she does, there will then be any “ living children ” of the testator, to take the legacy. If the first contingency should happen, the second might not. Until both happen, the limitation over can not take effect. Who; if any, of the children of the testator may then be living, no one can tell. These possible legatees in remainder are not parties here. There is no vested interest in them, whoever they may be. The contingencies may never happen which give them an interest. What- • ever may be their ultimate rights, must be left for determination when a case is made to which they are parties. It •can not be made by.them under this will, which imposes no such duty. But it is said by counsel, that “ a bequest of money for life, and then over, is to be deemed a gift of the interest only, and not of the principal.” This is not a be•quest for life.

We have carefully examined the cases cited and relied on by defendant, and ■ find that they strongly support the conclusion we have reached, namely, that when such limit.ations over of personal property are valid, they take effect by way of executory devise, and not as estates in remainder. In none of them is it held, that itf case of such defeasible estate in personalty, it is the duty of the executor to hold the legacy as a trust estate. One of the cases relied on is, Homer v. Shellon’s Ex’r, 2 Met. 194. It was there held, in case of such a limitation over, the first taker, though not entitled absolutely to the personal property, was not bound, before taking it, to give security that it should be forthcoming upon the happening of the contingency.

So in Jones v. Stites, 4 C. E. Green, 324, also relied on, it was held: “ That if the gift of personalty is absolute in terms, and not, at all events, limited over at the death of the first taker, but only on a specified contingency, as dying without issue living, then the title vests in the devisee or legatee absolutely to be defeated on the happening of the contingency and, in such case, “the chattels must be delivered, or the money paid to the legatee, and, at his death, or upon the contingency, they will go to the legatee in remainder.”

“ Put when personal property is given for life generally,. as the residue or remainder of the testator’s estate, then it' Is to be converted into money and put at interest in the-sames of the executors, and the interest only paid to the-legatees.”

As this is not a devise or bequest to Mary L. Lap-ham for life generally, but is a gift absolute in terms, and not, at all events, limited over at her death, but only In the event she should die childless, leaving living children-©f the testator, she is entitled to have the legacy paid toller, under the first branch of the decision quoted. The-test there laid down, by which to determine the question Is, whether the bequest is absolute in terms, subject to be-divested by, as in this ease, an uncertain contingency; or whether the bequest over is subject to no such contingency, but depends on an event certain to happen, as at the death of the first taker.

In the first case, the legatee takes an absolute estate, subject to be divested, and is entitled to possession, while in. the second, the legatees over have a vested present interest, to which they will be entitled to possession upon the happening of the certain event named. In the latter case, the-court will execute the trust imposed by preserving the estate in remainder.

Field v. Hitchcock, 17 Pick. 182, belongs to this latter-class. It was there held that, “ a bequest of the use of money for life, and then over, is to be deemed a gift of an Interest only, and not an absolute gift of the principal.”

In this case, the gift over was on the happening of a certain event, namely, the death of the first taker, and not, as= in the ease at bar, upon a contingency that may never-happen.

Judgment of the district court and common pleas reversed and cause remanded.

Ashburn, J., did not sit in the case.


text:
    Gaff et al. v. Flesher.
    1. Subscribers to tbe capital stock of a corporation can not release themselves from payment, when such subscriptions are necessary for the-payment of corporate debts.
    2. If the corporation has been regularly organized, creditors having dealt with it, may enforce payment of subscriptions, although the subscribers may have notified the company that they would not be liable for debts, upon the assumption that the corporate existence was without authority of law.
    Error to Superior Court of Cincinnati.
    Andrew J. Elesher brought suit in the Superior Court of Cincinnati, January 8, 1874, against the Southwestern Transportation and Wharfboat Co., James W. Gaff, James S. Wise, J. D, Parker, and others. Gaff, Parker, and Wise-had subscribed to the stock of the wharfboat company, against which Elesher had recovered a judgment, and to compel the payment of these subscriptions, in satisfaction of this judgment, Elesher brought this suit. Among the-allegations of the original petition are the following:
    The plaintiff says that, in July, 1871, the defendants, James W. Gaff, James S. Wise, J. D. Parker, Elias Elder, and Samuel McCune and others, associated themselves together as a joint stock company, in the name and under the style of the Southwestern Transportation and Wharf-boat Company, for the business of the building, repairing, and maintaining of wharfboats at Cincinnati, Ohio, and at mother points, and, for the purpose of carrying on and pursuing this said business, the said James W. Gaff subscribed and agreed to pay to the said company the sum of $3,000, the said J. E. Parker the sum of $1,000, the said James S. Wise the sum of $1,000, the said Elias Ehler $100, and the .said Samuel McCune $100; that the said Gaff, Wise, and Parker, also co-operated in the organization and business •of the said company, and authorized the building of a wharfboat for said company, to be maintained by them at Cincinnati; that the plaintiff furnished the materials and .advanced money for building said wharfboat; that said defendants, Gaff, Wise, Parker, McCune, and Ehler were cognizant of the building of the said wharfboat for said company, and authorized the same to be built for them; that the said wharfboat was completed and received by the said company, and they gave their negotiable notes in part payment of the same; that the plaintiff received part of said notes for the materials and money furnished by him for the •building of said wharfboat, which notes formed the con■sideration of his said judgments. The plaintiff says that the said defendants, Gaff, Wise, Parker, Ehler, and Mc-Cune, by reason of their said subscriptions, and engaging in the organization and business of said company, and authorizing the building of said wharfboat, have become liable to pay the said several subscriptions, and that the same should be applied to the payment of the plaintiff’s said judgments.
    Whereupon, he prays that these said subscriptions may be ordered to be paid to the said plaintiff, in payment of said judgment, and for such other and further relief as he is entitled to receive.
    This company was incorporated by certificate dated May '9, 1871. One W. G. McCoy and others, not the defendants, formed the incorporation, McCoy seeming to be the active man, and president of the company after it was organized. About June 1, 1871, Gaff, Parker, and Wise, subscribed to this stock. May 6, 1871, three days before the company was incorporated, and before defendant’s subscription, McCoy made a contract with Elesher, plaintiff below, defendant here, to build a wharfboat. McCoy told; Elesher that Gaff and others had agreed to take stock. Elesher states that McCoy told him that Gaff would take $5,000, and subsequently, that is, after the contract was made, that the eompany had organized, and that Gaff had takeu $8,000, Wise $1,000, and Parker $1,000 of the stock, lie further states that the contract for building the boat •was in writing, made in West Virginia, where he lived, and “ was signed by McCoy for himself.” He further says, “ It was McCoy’s own contract. He said he could not sign for any body else, because company was not organized.”' McCoy was to pay a portion of the contract from time to ■ time, and give the company’s paper for the balance “ when it organized.” He says, “ I delivered the boat to him (McCoy) in the spring of 1872.” There was then due • about $6,00U. Eor this amount the company subsequently gave their notes, which were dated March 13, 1873, payable to the order of McCoy, and by him indorsed to Elesher.. It was upon these notes that Elesher recovered the judg- - ment against the wharfboat company, to satisfy which he now endeavors to compel payment of defendants’ subscriptions. Defendants never paid any thing on their subscription, but in December, 1871, transferred it to an irresponsible party. The company does not appear to have done any thing in the year 1871, except perhaps to hold two meetings to organize and elect directors. In January, 1872, they began active operations, and January 4th assessed the stock subscriptions fifty per cent. January 9, 1872, Gaff, Wise, and Parker, notified the company that they had received notice of this assessment and of call for payment; that they had disposed of their stock subscriptions the pi’evious December; and that they would nor be responsible for any debts, contracted after that date, by the company.
    The minutes of the company show, that July 1, 1872,. “ the question of the amount of money to be paid to W. C.. McCoy for wharfboat was made the special subject of an ad-journed meeting,” to be held July 2d. July 2d it was agreed that McCoy’s accounts should be credited $52,803, up to .May 7, 1872, and a bill of sale to be made to the company of the wharfboat, as of that date. July 5th the board adopted a resolution, that the wharfboat, built by McCoy •in West Virginia, and which arrived at Cincinnati, May 7, 1872, be accepted by the company, which agrees to pay .McCoy’s bills, to the amount of $52,803, which sum is to cover all bills up to May 7th, as per bill of sale. The bill of sale is in the record, dated May 7th, and signed by .McCoy. This transaction of the board was July 5th, •though it dates the sale as of May 7th, and probably because upon May 14th the board had authorized the presi■clent to effect a loan by mortgage on the boat. McCoy was • credited, on the books of the company, the amount of the • sale bill, $52,803. It should be further observed, that Gaff never took any part in the proceedings of the company, •other than to subscribe stock and notify them he was out. It does not appear that he ever attended any meeting, or •otherwise committed himself in the progress of affairs. Wise and Parker attended one meeting in 1871, but do not ; appear to have taken any part.
    It then appears, that at the instance of Gaff' aud Parker, as they state, proceedings in quo warranto were instituted in the Supreme Court against McCoy and other’s. The in- • formation states that defendants are acting as a corporation •without warrant, and are using the franchise, etc., to build, repair, and maintain wharfboats at Cincinnati and other points; to buy and own a wharfboat; to use such wharffboat, moored in the Ohio river, at the Cincinnati wharf, in •carrying on the business of receiving, storiug, and delivering general merchandise or freight for reward, etc. The .agreed.statement of facts, accompanying the information, sets forth the certificate of incorporation, which says: “ The business of the company shall be the building, repairing, .and maintaining of wharfboatg at Cincinnati, Ohio, and ■other points.” The statement further sets forth that the •company was organized, stock subscribed, aud that defendants, in tbe proceeding, “ caused to be built a wharf-'boat — a boat without motive power, and not designed for the purpose of navigation — aud carrying on business as a corporation, in receiving, storing, and delivering freight at Cincinnati.” On the 11th December, 1878, the Supreme •Court ousted the defendants “ from being such corporation.”
    Upon the trial, in the special term of the superior court, judgment was rendered against Gaff, Parker, and Wise for -the amount due on their subscriptions, which judgment having been affirmed in the general term, a petition in error was filed in the Supreme Court.

      G. K. Skunk, for plaintiff in error. (No brief for plaintiff in error reached the hauds of the Reporter.)

      Lincoln, Smith Stephens, for defendant in error:
    The principle is well settled, that when -a corporation is ■dissolved, a creditor may levy, by execution, upon any property of the corporation subject to levy, and when the .assets are equitable, such assets may be reached by an equitable proceeding, and the unpaid subscriptions to the •capital stock are such equitable assets. See Mann v. Pentz, 3 Comst. 415;. Wood v. Dummer, 3 Mason, 308; Spear v. Grant, 16 Mass. 9.
    And if the assessments had not been made upon the unpaid subscriptions, sufficient to- pay the debts, a court of equity will enforce the payment of such subscriptions by a •decree. Hightown v. Thornton, 8 Ga. 495; Briggs v. Penniman, 8 Cowen, 395.
   Wright, J.

The facts to be remembered, to a rightful understanding of the case, are these : This corporation, or ■alleged corporation, filed a certificate, dated May 9, 1871. 'This, then, was when its being began. Three days before, May 6, 1871, McCoy had made the contract with Elesher for the building of the wharfboat. In J une, 1871, Gaff and the other defendants subscribed ; in July the company was ■organized ; in December defendants transferred their sub•seription ; January 4, 1872, an assessment was made ; January 9th, Gaff and others notified the company that they had sold out, and would not be responsible for debts contracted ; May 7,1872, the wharfboat was sold by McCoy to-the.company. It seems that at first McCoy gave his own notes, indorsed by him as president of the company, toElesher. This was perhaps in May, 1872. Subsequently,, however, these notes seem to have been replaced by others, dated March, 1873. These latter were the notes of the company, upon which judgment had been obtained against It, which judgment is now sought to be satisfied by subjecting these subscriptions.

As far as the rights of these defendants are concerned, it' Is not material whether we fix the date of the company’s-liability to Elesher, in May, 1872, when the boat was sold,, or in March, 1873, the date of the notes in which the judgment was recovei’ed. Both these dates were subsequent to the date of those acts by which defendants claim they are-absolved from liability, namely, their notices to the company in January, 1872.

The question, then, is, having transferred their subscription in December, 1871; having notified the company in January, 1872, that they would not be responsible for-debts, can they still be held to pay their subscription upon a debt arising after these events ?

In the quo warranto, the defendants were ousted from-, being a corporation December 11, 1873, long after Elesher’s debt was contracted.

Gaff & Co., in order to divest themselves from liability,, transferred their subscription to one Getty, who seems to-have been a person without means. As a general thing, holders of corporate stock can not rid themselves of cor-, norate liability by transfer to irresponsible parties. A. & A. Corp., § 623.

Be that as it may, the stock in the present case had not been issued, and we take it to be clear that, in case of a: legal corporation, a subscriber can not release himself from liability to pay, except with the consent of the corporation. The subscription is a contract, which can not be dissolved at the option of one party; the consent of both must be-. had. Field on Corp., § 89 (p. 103), § 96 (p. 112); A. & A. Corp., §§ 517, 537 ; Muskingum Co. v. Ward, 13 Ohio, 120; Graff v. R. R. Co., 31 Penn. St. 489; Upton v. Trobilcock, 91 U. S. 48. In case, therefore, this had been a legal, valid corporation, without any judgment of ouster, the efforts of Messrs. Gaff & Co. to absolve themselves from their contract of subscription would have been simply nugatory. The corporation had not consented to release them, and could not have done so, to the prejudice of any intervening creditor. Webster v. Upton, 91 U. S. 71. This much is plain. But it is said, in a very able and ingenious argument by counsel for plaintiff in error, that this wharfboat company was not a corporation, and the stock subscriptions were therefore nullities. It is said that there is no law for incorporating a wharfboat company, and that where there never could be a corporation de jure, there can be none de facto. The law on the subject provides for “ building and repairing steamboats and other watercraft, . . . carrying on business connected with the main objects aforesaid.” 66 Ohio L. 125. The certificate of incorporation was for “ the building, repairing, and maintaining of wharf-boats at Cincinnati, Ohio, and other points.” The argument is, that a wharfboat is not a “ watercraft;” therefore there was no law in Ohio authorizing a corporation for the purpose of building wharf boats, the conclusion being, that this corporation was without authority of law, and the subscriptions void.

It seems to be conceded by counsel for plaintiff in error that if there is authority in law for the incorporation, but there is a mere formal defect in the certificate or otherwise, if corporate acts are done, then there is a corporation de facto, and it and its stockholders are estopped to deny the fact. But it is claimed that if the defect is not in matter of form, but is that there is no law to authorize, then, although acts are done, yet there is no corporation defacto even, and no estoppel arises. Counsel puts his statement tersely thus : “ It is apprehended, in the very nature of the case, that corporate existence de facto is possible only with the possibility of existence de jure, a question of law as to ■which there is no estoppel.” If we admit this to be a sound proposition in law, let us see if the facts call for its application hei’e ? Then we come to this question : Is there no law in Ohio to authorize the incorporation of companies to build wharf boats ? May not the law authorizing companies to build steamboats and other watercraft cover the case of wharf boats? Plaintiff in error asserts that a wharfboat is not a watercraft. Defendant says it is.

A majority of the court are of opinion that, for the purposes of this case, a wharfboat may be included, in the general term, watercraft. The rule of restricting language, as applied to the exercise of corporate powers, is generally found in those cases where the corporation is seeking to enlarge or extend those powers ; and, as against the public or private rights, we agree that such restriction is well timed. But we have not found the rule so frequently applied in cases where the corporation or corporators were seeking to evade liability by giving a nari'ow construction to words or laws.

Perhaps it might be, that in the first instance a stockholder might have restrained this corporation from building a wharfboat, on the ground that such act was not authorized by the law for building watercraft. But the case is very different where they have built a boat, and refuse to pay for it on the ground of such want of power.

It is very certain that those who signed this certificate, as well as those who subscribed stock under it, held out to the world that they were an incorporation ; that the name of the company was the Southwestern Transportation and Wharfboat Company ; that there ivas to be |100,000 of took, with shares; that they were to build wharfboats, and have offices, etc. At least it comes with bad grace from them now to say that they could not do the thing proposed, after they had actually done it.

It is said that the case of The Raccoon River Navigation Company v. Eagle, 29 Ohio St. 239, is decisive of the question before us. Like this, that was a case to recover a subscription of stock. The company was incorporated for the purpose of “improving to make navigable . . . and navigating Big Raccoon river.” The Supreme Court say : “We do not know of any law of the State of Ohio by which Big Raccoon river has been declared navigable.” If there was no such navigable stream, there would seem to be no propriety in attempting to improve it by enforced subscriptions. But to make that case analogous to this, suppose the company had found such a navigable stream, or one they supposed to be it, and had gone to work and improved it, and then the laborers had sued for their hire, we apprehend that the defense of no such navigable river would not have been valid, for the Supreme Court are careful to say: “ It is suggested that the rejected testimony tended to prove, at least, a corporation de facto, and that the defendant was estopped, by subscribing to its stock, from denying its legal existence. The case is not one wherein the doctrine of estoppel can be applied.

It seems to us, therefore, that this must be held to have been a corporation defacto, up to the time of ouster, previous to which the liability arose, satisfaction of which is now sought. Of course the judgment of ouster did not retroact, so as to affect or destroy a contract prior to its rendition. McCarthy v. Lavashe, 7 Am. Law Rec. 188 (Sup. Ct. Ill.)

Judgment affirmed.

Scott, J., dissented.