source: Caselaw Access Project

author: Eollett, J.

license: Public Domain

text:
    Day v. Railroad Company.

      Water-courses — Dead of land on bank of rival — Corporation—Dissolution — Reversion.
    1. A general deed of premises lying upon the bank of a river, in which is constructed a canal, conveys the grantor’s rights to the center of the stream bounding the property. And to reserve or exclude from the grant any such rights, the conveyance should contain proper words of such reservation or exclusion.
    2. Where the canal company owning and operating such canal had the right only, to use, for canal purposes, the bed and waters of such river, on ouster of such company from its corporate franchises and its dissolution by order of this court, the trustees winding up its affairs have no power to convey such rights, but they revert to the proper owners.
    Error to the District Court of Portage county.
    The Pittsburg, Youngstown and Chicago Railroad Company is a corporation under the laws of Ohio, and it was building its road through the village of Kent, in Portage county, Ohio. It was commencing to grade and build its road on property claimed by Day, Williams & Co. as partners, when, October 1, 1881, they, the plaintiffs in error, commenced an action against the railroad company and others to enjoin the railroad company from entering upon their premises until the right of way was duly condemned and paid for. The property is what was once used as a part of the Pennsylvania and Ohio canal, and it is in the bed of the Cuyahoga river, between the east bank and the middle of the river. In their petition plaintiffs averred that they owned the premises on the east bank of the river, which premises extended to the middle of the river, and that they were extensively engaged in the manufacture of glass on the property; that the use of the water of the Cuyahoga river was indispensable to their business; that it was impossible to carry on the manufacture of glass without said water; that it was not practical to obtain water elsewhere, save at enormous expense; that the construction of the railroad, as proposed, would deprive them of the use of said water, and necessitate the abandonment of their business, or the carrying it on at a loss — damage them many thousand dollars, and .otherwise do them great and irreparable injury; and they prayed for an injunction and damages.
    A temporary injunction was allowed.
    On February 7, 1882, the railroad company set up in its amended answer:
    That it admits the copartnership of the plaintiffs ; that they are the owners of a glass factory property in the village of Kent, in Portage county, Ohio; that they pur-' chased the same from Marvin Kent, by contract in writing, dated the first day of July, 1864, and received a deed thereof from Marvin Kent and wife, dated March 8,1868, in pursuance of said contract and in fulfillment thereof; that the plaintiffs are engaged in the manufacture of glass, and that defendant is engaged in the construction of a line of railroad extending through said village of Kent.
    The defendant denies that the west boundary of plaintiffs’ glass works property is the center of the Cuyahoga river. Defendant further says that about the year 1840, a corporation duly created, organized, and then existing under the laws of Ohio by the corporate name of ‘‘ Pennsylvania and Ohio Canal Company,” and possessing under its charter full authority and right to construct, maintain, and operate a public canal and water highway for •the transportation of persons and property through the county of Portage, in the due and legal exercise of its rights and franchises in and about the acquisition of its right of way and the construction of its canal thereon, duly obtained the right and legal authority to construct its canal in the Cuyahoga river through a portion of the township of Franklin, in the county aforesaid, in which plaintiffs’ said premises are located, and did construct its canal in said river from a point several hundred feet northward of plaintiffs’ premises, to a point several 'hundred feet southward thereof; that in and about the construction of the canal, said canal company, between the points aforesaid and opposite plaintiffs’ premises, constructed its towing path in and along a portion of the original channel of said river and thereby diverted the stream so that all the waters thereof except that portion of the same used for the purposes of the canal ran and flowed along the channel of the river lying and being on the westerly side of the towing path, and the canal company constructed all and every part of the channel and bed of said river lying east of its said towing path and between the east line thereof and plaintiffs’ said premises into a canal, and maintained, used, and operated the canal so constructed from that time down to the year 1872; that the construction of said canal in the manner aforesaid permanently changed and diverted the flow of the waters of the river to the west side of said towing path; that by reason of the acquisition of the right of way and portion of said id ver by the canal company and the construction of its canal thereon as aforesaid, cut off and appropriated all the water rights, mill privileges, ana riparian rights and interests in, to, and connected with any and all lands lying on the eastern side of said river, including the premises of the plaintiffs between the points aforesaid
    Defendant further says : That by the terms and provisions of its charter, the canal company took the fee-simple title to all the lands, rights, and interests so acquired by it for the purposes of the canal, and that all of its rights and lands are now owned and held by the defendant as hereinafter stated.
    The defendant further says: That long after the construction of the canal as aforesaid, and while the same was being maintained and operated by the Pennsylvania and Ohio Canal Company under its rights, powers, and franchises, the plaintiff's purchased from one Marvin Kent all the lands and premises now owned by them, bounded and described as follows, to wit: Situate in Franklin township, Portage county, Ohio, and known as part of township lot No. 25, bounded and described as follows: Beginning at a point in the west line of Canal street, in said town of Kent, where a continuation west of the south side of Mill street crosses said Canal street; thence south 18° 15' west seven chains and thirty-one and one-third links to a post in the west line of Canal street; thence north 72° 30'west four chains and twenty-one links to the Pennsylvania and Ohio canal (the east bank of which is hereby understood to be what was formerly the east bank of the Cuyahoga river) ; thence northerly along the east bank of the Pennsylvania and Ohio canal to a point where the continuation west of said south line of Mill street intersects the east line of said Pennsylvania ánd Ohio canal; thence north 69° 45' east one chain and fifty-eight links to the place of beginning.
    That plaintiffs’ deed from Marvin Kent, containing the aforesaid description and boundaries, carried the west boundary line of their premises to the east line of said Pennsylvania and Ohio canal; that they never had or held any riparian or other rights in, to, or concerning said canal during the time the same was maintained and operated, or since; and they never took, by the terms of their deed or otherwise, any title or ownership to any portion of the bed of the canal, or to any of the land over which the same was constructed.
    The diagram on the following page shows the location of each part.

      Second. Eor further answer herein the defendant says : That it is the owner of all the lands lying west of said former east bank and line of said Pennsylvania and Ohio canal, adjoining plaintiffs’ premises on the west, that were formerly owned and occupied by said canal for the purposes of the construction, maintenance, and operation of the saíne by said canal company; that the defendant has the title thereto by virtue of a contract, in writing, between it and the New York, Pennsylvania and Ohio Railroad Company, dated the 19th day of July, a. d. 1881, said last named company having title thereto by virtue of conveyances from the trustees of said canal company, duly executed and of record in the county of Portage; that the east line of the premises so purchased and owned by defendant is the east line

      of the berme bauk of said canal on and along plaintiffs’ premises; that the line of defendant’s railroad is located and fixed entirely on its own land, lying west of said line, andvin no place or part does it touch any land of the plaintiffs, or in anywise interfere with or affect the same, or any buildings or structures thereon; and the defendant has the complete right to enter upon its said premises and construct its line of railroad in the legal exercise of its fran•chises and powers.
    In the reply the plaintiffs’ deny specifically many allegations of the answer, and aver that, prior to the construction of the Pennsylvania and Ohio canal, the canal company entered into a contract with the Erauklin Land Company, which last named company then owned the premises described in the petition and held the legal title thereto ; that in said contract it was provided that the canal company should construct its canal between two walls in the river, and that between the canal and the east bank of the river water should continuously flow from the pond created by the canal dam down to and past the premises now owned by plaintiffs for the express use, convenience, and enjoyment of the owners of said premises and their assigns, and for the propulsion of valuable mills and machinery located on said premises; that in the contract all riparian and other rights to the waters of said Cuyahoga river and the flow of the stream thereof were expressly reserved as an appurtenance of and to the premises now owned by plaintiffs and to said land company as the owners thereof and its assigns, and that said riparian rights, water privileges, and appurtenances, and mill powers, property and premises, by divers and sundry mesne grants, conveyances, and assignments, became and are the property and inheritance of the plaintiffs as appurtenant to the premises described in the petition; that such riparian rights and privileges were always recognized by the canal company as appurtenant to said premises, and were always exercised and asserted by plaintiffs and their grantors without let or hinderance from any body and under claim of right by them.

      Further replying, plaintiffs say that said Pennsylvania, and Ohio canal was substantially abandoned long previous to plaintiffs’ purchase of their properly and premises; that no repairs were done on the canal after 1862, and the same ■was suffered to get out of repair and become practically unnavigable before July 18, 1864, aud the evidences were then conclusive and plenty that the same would soon be completely and permanently abandoned, and that previous to March 3, 1868, the canal had been entirely abandoned by said canal company, and suffered to become entirely useless and out of repair for the purposes of a public highway by means of said canal as a water-way, and has ever since been abandoned as a canal or public highway by means of water navigation; that for a period of more than twelve months prior to March 8, 1869, said canal had been entirely abandoned and suffered to become entirely useless and out of repair, and had entirely fallen into disuse as a canal or public highway by means of water navigation by boats or other means of conveyance upon or through the waters thereof; and plaintiffs say that at the December term, A. d. 1872, of the supreme court of the state of Ohio, in a suit therein pending in the nature of quo ioar~ ranto, instituted by the state of Ohio on the 8th day of March, 1869, the said Pennsylvania and Ohio Canal Company was, by judgment, order, and decree of said court, dissolved and altogether ousted from its corporate rights, privileges, and franchises, and altogether ousted and excluded from being a body politic and corporate of and within said state, and from all and singular, and any and all rights, powers, privileges, and franchises appertaining or attaching to such corporation under the laws of said state, and that said corporation was and is to all intents and purposes dissolved and dead; that thereafter neither the Pennsylvania aud Ohio Canal Company, nor any other corporation or person, had any right to keep or maintain, in said Cuyahoga river, any of the artificial obstructions built and placed in said river by the canal company for the purposes of its canal; that these defendants can acquire no right by reason of such obstructions ; that the samo are unlawfully there, and unlawfully kept and maintained in the river; that if all such unlawful obstructions were removed the larger part of the waters of said river would naturally flow against the east bank, on which plaintiffs’ factories stand.
    The court of common pleas made the injunction perpetual, and the action was appealed to the district court.
    On trial, in the district court, it was agreed that formerly the Franklin Land Company owned both sides of the river from the dam above this property down to a point below this property upon the river to the south end of the disputed property and including it. “And the rights of the land company and their title, as it is conceded, was conveyed to the land company from the Franklin Silk Company. From the Franklin Land Company by sheriff to Zenas Kent, from Zenas Kent to II- A. and Marvin Kent, from H. A. Kent by quitclaim to Marvin Kent. And then comes the contract and deed from Marvin Kent to Day, Williams & Co. This is the subject of the agreement.”
    The deed from Marvin Kent to Day, Williams & Co. as to this part of the property, was a general warranty deed, except the right to abut a dam on part thereof. This deed bounded the property as set forth in defendant’s answer.
    The defendant claimed title to the property it had entered upon, by virtue of its purchase from the assigns of the trustees of the Pennsylvania and Ohio Canal Company, actingin the case of The State ex rel. Attorney-General v. The Pennsylvania and Ohio Canal Co., 23 Ohio St. 121, when that company in Ohio was dissolved and its property sold; and also by the verbal consent of Marvin Kent, given to it, to so use the property. The canal company obtained its rights in the property from the Franklin Land Company by a contract, granting to the company as follows:
    “ The canal company shall use the canal darn and waters therein for canal purposes, and the land company shall use the same dam and the water therein, as well as the water passing round the lock at that point for the propulsion of water wheels : and in consideration further that said canal company shall locate and construct their canal so as to lock down into said canal dam and pass out of the same by a lock in the dam thence to the south line of the lands purchased by said land company of Zenas Kent. Said canal shall be constructed between two walls in the river bed and so far from the east bank of the river as to leave a space between the said east bank and the walls of the canal of sufficient width for a convenient tail race for such wheels as said land company or their assigns may there construct, and this race shall be excavated by said canal company the whole length to a level with the apron under the wheels of the flouring mill bought by said land company of Zenas Kent and pass under the canal into the river channel by a culvert at or near said south line.”
    The contract also permitted the canal company to take and divert “ from said river such quantity of water as will be sufficient to keep said canal in a navigable state at all times when the same shall be navigated, and when the navigation of said canal shall be interrupted by frost or otherwise said canal company shall have the right to draw from said river so much water as shall be necessary for the purpose of sustaining the levels and preserving the canal, taking due care to keep the lock gates shut and to prevent any unnecessary leakage. Upon condition, however, that the lake reservoirs shall be constructed and used in the manner recommended iu the report of S. Dodge, Esq., made to the board of directors of said canal company on the 6th day of July, a. d. 1835, or in the manner recommended in the report of Alfred Kelley, Esq,, made to the executive committee of said board of directors July 29, 1835, reference to said reports being hereby had,” etc.
    On trial, the majority of the district court found that the plaintiffs were not entitled to the relief prayed for in their petition, and dismissed the same at plaintiffs’ costs, without prejudice to their right to bring an action at law to recover the possession of the premises described iu the petition, or such other action as may be necessary to determine their rignts.
    A bill of exceptions was taken, and plaintiffs seek a reversal of that judgment, and the injunction prayed for, and the establishment of their rights.

      Myron A. Norris and M. Stuart, for plaintiffs in error.

      T. W. Sanderson, for defendant in error.
   Eollett, J.

A correct understanding of the facts of this case, set forth and shown in the statement and diagram heretofore, is necessary to the proper application of the legal principles that determine the rights of the parties.

But plaintiffs’ rights depend greatly upon the true construction of the deed of Marvin Kent and wife to them, dated March 3, 1868.

And the defendant’s rights depend upon what was conveyed to its grantor by the trustees ot the Pennsylvania and Ohio Canal Company after the ouster of that company by this court, as shown in the case of The State ex rel. Attorney-General v. Pennsylvania & Ohio Canal Co., 23 Ohio St. 121.

I. What rights has the defendant, The Pittsburg, Youngstown and Chicago Railroad Company, in this disputed property ?

The Eranklin Land Company owned both sides of the Cuyahoga river where this property is in dispute,,and, while such owner, it made the contract with the Pennsylvania and Ohio Canal Company, dated May 27, 1836.

The contract provided that “said canal shall be constructed between two walls in the river bed and so far from the east bank of the river as to leave a space between said east bank and the walls of the canal of sufficient width for a convenient tail race for such wheels as said land company or their assigns may there construct, and this race shall be excavated by said canal company the whole length to a level with the apron under the wheels of the flouring mill bought by said land company of Zenas Kent, and pass under the canal into the river channel by a culvert at or near said south line.”

1 It also provided that “ the canal company shall use the said canal dam and waters therein for canal purposes, and the land company shall use the same dam and the water therein, as well as the water passing round the lock at that point, for the propulsion of water wheels; and in consideration further that said canal company shall locate and construct their canal so as to lock down into said canal dam and pass out of the same by a lock in the dam thence to the south line of the lands purchased by said land company of Zenas Kent.”

It further provided that “ when the navigation of said canal shall be interrupted by frost or otherwise said canal company shall have the right to draw from said river so much water as shall be necessary for the purpose of sustaining the levels and preserving the canal, taking due care to keep the lock gate shut and to prevent any unnecessary leakage.”

The canal compauy must locate the canal at a distance west of the east bank of the river “ of sufficient width for a convenient tail race.”

These provisions clearly show that the canal company took only the right to use the property west from a line west of the east bank of the river, and to use the water of the river so far only as needed for the canal. And when the canal company was dissolved, this right must be regarded as abandoned and it reverted to the land company and to its grantees. Corwin v. Cowan, 12 Ohio St. 629; Longstreet v. Harkrader, 17 Ohio St. 28, 29.

This left nothing that the trustees of the canal company could sell and convey, unless perhaps something that they could remove from this property. And the defendant has no rights in this property by virtue of any conveyance or sale by such trustees.

This position is fully sustained in case of McCombs v. Stewart, 40 Ohio St. 647, where, as to a similar conveyance of these same trustees, it is held: “A canal company, incorporated under the act of January 10, 1827 (25 Ohio L. 8), erected across a river a dam . . . causing the water to flow back upon the lands of a proprietor above the dam on the stream. The company owned in fee-simple, by purchase, the land on which the south half of the dam was built, but none of the land on which the north half was built; and conveyed, in fee-simple, to certain mill owners, the land it thus owned, and granted to them and their heirs the privilege of using the surplus water of the dam not required for canal purposes. Held, the right of the company acquired by appropriation, to flow the lands of such proprietor by maintaining a dam. of such height, did not, by virtue of the company’s conveyance and grant to the mill owners, survive and vest in them after the dissolution of the corporation.”

In the ease of Pittsburg and Lake Erie R. R. Co. v. Bruce, 102 Pa. St. 23, as to another such conveyance by the trustees it is held, “ that the company acquired under the terms of the charter a right of way only over the lauds appropriated by them, and that they did not acquire said lands in fee; ” that “ said canal company having become insolvent, and all its property and franchises being sold to a railroad company by order of court: Held, that said last named company could not construct its tracks on the right of way acquired by the canal company without compensation to the owner of the land.” This company had only the right to use the property and the waters of the river for the canal, and after ouster and dissolution neither the company nor the canal remained or existed.

If we disregard the form and averments of the pleadings, whether or not the defendant acquired any rights in this property through the verbal permission of Marvin Kent, is determined by what rights Kent had at that time, long after his deed to plaintiffs.

II. What x-ights havesthe plaintiffs in this disputed prop, erty?

We will not stop to discuss what rights their possession gives them, though this is valuable, especially in connection with their contract and deed. On the trial it was agreed by the parties that “ the Eranklin Land Company owned both sides of the river from the dam above this propei’ty, down to a point below this property upon the river to the south end of this disputed property and including it. And the rights of the land company and their title, as it is conceded, were conveyed . . . from the Eranklin Land Company by sheriff to Zenas Kent, from Zen as Kent to PI. A. and Marvin Kent, from PI. A. Kent by quitclaim to Marvin Kent. And then come the contract and deed from Marvin Kent to Day, Williams & Co. This is the subject of the agreement.” By this written contract Marvin Kent sold to Bay, Williams & Co. “that lot of land and the buildings and improvements thereon known as the Eranklin Glass Works,” and he bounded the property by running the line the other way from what it is run in the deed. The contract is dated July 18, 1864, and the deed is dated March 8, 1868, and was made to carry out the contract. As to this property the deed contains a covenant of general warranty, and described the property, “ with the buildings and improvements thereon, known as the Eranklin Glass Works, situate in said town of Kent, and is known as being a part of township lot number twenty-five (25), in said township of Eranklin, and bounded and described as follows, to wit: Beginning at a point in the west line of Canal street in said town of Kent where a continuation west of the south side of Mill street crosses said Canal street; thence south 18° 15'west seven chains and thirty-one and one-third links to a post in the west line of Canal street; thence north 72° 30' west four chains and twenty-one links to the Pennsylvania and Ohio canal (the east bank of which is hereby understood to be what was formerly the east bank of the Cuyahoga river): thence northerly along the east bank of the Pennsylvania and Ohio canal to a point where the continuation west of said south line of Mill street intersects the east line of said Pennsylvania and Ohio canal; thence north 89° 45' east one chain and fifty-eight links to the place of beginning, containing-acres of land, be the same more or less.”

By the terms of the deed, Rent conveyed to the plaintiffs all the rights he had in this property along the the east bank of the river and up “ to the Pennsylvania and Ohio canal,” and then adds in parenthesis, “ the east bank of which is hereby understood to be what was formerly the east bank of the Cuyahoga river,” and he made no reservation of any part of the bed'of the river or of any water privileges. When the canal was gone there was nothing left but the river.

As early as Gavit v. Chambers, 3 Ohio, 496, this court held: “ In Ohio, owners of lands situate on the banks of navigable streams running through the state, are also owners of the beds of the rivers to the middle of the stream, as at common law.” And the same is true of all streams away from tide-water.

In Benner v. Platter, 6 Ohio 504, this court held: “A call in a survey, for a stream not navigable, is a call for the main branch of such stream, and the boundary is the middle of the stream.”

In Lamb v. Rickets, 11 Ohio St. 311, the court held: “ Where the owner of land is bounded by a stream, he owns to the center of the stream, subject to the easement of navigation.” Here it was subject to the rights of the canal company.

In Walker v. Board of Public Works, 16 Ohio, 540, the court repeats the holding: “ He who owns the land on both banks of a navigable river, owns the entire river, subject only to the easement of navigation; and he who owns the land upon one bank only, owns to the middle of the main channel, subject to the same easement.” And also: “ The legislature can not, by declaring a river navigable which is not so in fact, deprive the riparian proprietors of their rights to the use of the water for hydraulic and other purposes, without rendering them compensation.”

In June v. Purcell, 36 Ohio St. 396, this court went further and held: “ The principle decided in Gavit v. Chambers, 3 Ohio St. 496, that the owners of lands situate on the banks of navigable streams running through the state are also owners of the beds of the rivers to the middle of the stream, as at common law, has become a rule of property, and, irrespective of the question of its original correctness, ought not to be disturbed.” And, in the opinion, White, J., adds: To disturb the rule now would be a dangerous tampering with riparian rights.” Such is the law of England and of most of the states.

If the grantor does not intend to convey the bed of the river and the water in the water-course bounding the land conveyed, he must insert in the instrument of conveyance proper words for the purpose of reservation or exclusion; “but in the absence of such words, the bed, and consequently the stream itself, passes by the conveyance.” Aug. Wat., §§ 9 and 17, and cases there cited. Here there was no such reservation or exclusion.

The plaintiffs had all the rights ever held by Marvin Kent in this property, and the defendant took nothing by Kent’s permission.

The court erred in permitting Kent to testify as to any permission he gave the defendant in the property, and it also erred in the construction of plaintiffs’ deed, and of defendant’s conveyance.

Judgment reversed; injunction granted and made perpetual, and cause remanded.


author: Spear, J.

text:
    Bullock v. Horn.

      Mechanics’ liens — Revised Statutes, sections 3193, 3195, 3201, 3202 — Construction— Claim against contractor — Set-off.
    1. The statutes of this state upon the subject of mechanics’liens, being remedial in their nature, are to be liberally construed in order to carry out the purpose of the legislature in their enactment.
    2. Where a mechanic, who, under the employment of a contractor, and with the knowledge of the owner, has performed labor upon the construction of a building, and the account not being paid, takes all necessary steps, as provided by sections 3193, 3195, 3201, and 3202 of the Revised Statutes, to fix the liability of the owner and to obtain alien upon the premises, and brings his action against the owner to recover the amount due and have the same declared a lien, such account being less than the balance unpaid on the contract, such owner can not be allowed to set off a claim against the contractor, not growing out of the contract, acquired by him after the labor was performed, although such claim was acquired before notice that the mechanic’s demand had not been paid.
    Error to the District Court of Lorain county.
    The action is brought to reverse a judgment of the district court of Lorain county reversing the judgment and decree of the'court of common pleas of that county. In the last named court the plaintiff in error, a carpenter, brought his action to recover upon an account for labor performed upon the dwelling of the defendant in error, and to have the same declared a lien upon the premises under the laws relating to mechanics’ liens. From the findings of the court of common pleas the following facts appear: In May, 1883, the defendant entered into a contract with one Asa Bullock to erect a dwelling-house on premises owned by defendant. Bullock was to be ■ paid one-third when the building was inclosed, one-third when the plastering was finished, and the balance when the building was completed. Between the 12th day of June and the 25th day of August, 1883, the plaintiff performed work upon the building at the instance of the contractor (Asa Bullock), which is the basis of the account. On the last named date the house was completed and accepted. On that day, the amount due plaintiff being wholly unpaid, he demanded payment of the contractor, which was refused. On the 11th day of September, following, the plaintiff filed with the defendant an itemized account of the amount and value of his labor, with all credits, pursuant to the statute. At that time there remained unpaid on the contract a sum in excess of the amount due the plaintiff. The account of plaintiff was acknowledged bjr the contractors to be correct, and the defendant was notified of that fact. Shortly after, the plaintiff filed with the county recorder a proper affidavit and took all the steps necessary to complete his lien upon the premises. On the 3d day of September, 1883, the defendant purchased in good faith for full consideration, of a lumber company, a valid account against the contractor for an amount in excess of the plaintiff’s claim. The defendant was at the time a stockholder in the lumber company. At the time of the purchase the defendant knew the plaintiff’ had performed labor for the contractor upon the house, but did not know whether he had been paid or not, and the first knowledge he had of plaintiff’s claim was on the 11th day of September. It does not appear that the account of the lumber company was for material furnished for the building upon the premises in question, nor that it, in any way, had relation to the same. This claim defendant plead, in the court of common, pleas, as a set-off.

      E. G-. and W. JFI. Johnson, for plaintiff in error.

      Metcalf § Webber, for defendant in error.
   Spear, J.

It is not claimed in this case that the defendant’s assiguor, the lumber company, had, by virtue of its claim against the contractor, any lien upon the premises; nor is it denied that the plaintiff' had complied with the law entitling him to recover against the defendant, and to a lien. The only question is as to the right of set-off in favor of the defendant and against the plaintiff. The proposition may be stated thus: Can the owner of premises, having knowledge that a mechanic has performed work upon a building thereon, under employment of the principal contractor, set off against a claim for work, so done, a claim against such contractor, not arising out of the contract under which the building is constructed, or in any way having relation thereto, and acquired by such owner after the labor was performed by the mechanic, but before the owner had notice that the mechanic had not been paid ?

The question is to be determined by a consideration of the several sections of our statute relating to mechanics’ liens. Without quoting at length from these sections, their effect, so far as they apply to the question here, may be stated. Sections 3184-3192, Revised Statutes, provide for the taking of a lien upon the premises by the contractor. Section 3193, and following, give the right to a lien to any sub-contractor, laborer, or mechanic, who, under employment of the head contractor, performs labor or furnishes material for the improvement, and who has not been paid. He may file with the owner a sworn and itemized account of the amount and value of the labor or material, with all credits and set-offs, and upon receiving such notice the owner shall detain in his hands all subsequent payments from the principal contractor upon the contract in an amount, sufficient to satisfy the claim. Within five days after receiving such account the owner is required to notify the contractor, and if within five days thereafter he does not notify the owner of his intention to dispute or commence an action to adjust the account, he is deemed to assent to its correctness, and thereupon such subsequent payment shall be applied by such owner to the account. If the contractor neglect to pay within five days after such assent to the correctness of the account, the owner shall pay, when due, the whole, or, in case other claims have been filed, a pro rata amount, as the case may be, out of subsequent payments owing to the contractor, and on his failure for ten days, the sub-contractor, workman, or material-man may recover against the owner in an action for money had and received, when' due, the whole, or a pro rata amount, as the case may be, not exceeding in any case the balance due to the principal contractor.

In addition to this remedy, the workman or material-man, by complying with subsequent provisions, may have a lien upon the premises which shall date back from the date of performing the first item of labor, or of the first material furnished, which shall have the same operation, effect, and duration, and be subject to the same obligations with respect to the owner, as the lien of the head-contractor in similar cases. Such lien shall take precedence over and lien already taken or to be taken by the contractor, and an 'assignment or transfer by such contractor of his contract with the owner, as well as proceedings in attachment, or otherwise, against such contractor, to subject or incumber his interest in such contract, shall save and be subject to the claim of every laborer, mechanic, or material-man who has furnished labor or material toward the erection or repair of the structure.

The 'statute is highly remedial in its character, and should receive such liberal construction as will carry out the purpose of the legislature in its enactment. The labbr of the workman and the material of the material-man having contributed to the erection of the structure; having, indeed, created, in part the very property on which the lien is sought to be attached, che purpose of the law is to give to such parties the right, where the contractor refuses to pay, to be paid for their labor and material out of the fund which has been earned under the contract, and out of the structure, and the land upon which it stands, such claim, as to amount, not to be in excess of the claim of the contractor as measured alone by the contract and his performance of it.

In giving a construction to this statute, by fair inference it may be assumed that the rights of the workman and material-man, as against the owner, are based upon the latter’s contract with the contractor, and while they are subordinate to the contract, and are to be worked out through it, those parties have the right to rest in security upon it and the means provided by law to secure its application to their demands. In the absence of fraud they are presumed to have notice of the terms of the original contract. Hence, if the original contract showed that pay-' ment had been made in advance to the contractor, or if it contemplated the allowance, by the contractor, of set-off theu held or to be acquired by the owner as payment, such provisions would bind the workmen and material-men, as they would be held to have accepted employment of the contractor with an implied assent to such terms. But, where the contract was silent as to advance payments, and as to claims of the owner against the contractor, the Avorkmen and material-men could not be held to have accepted employment with a vie\v to such contingencies.

The purpose of laAvs of this character is, .as stated by Phillips, in his work on Mechanic’s Liens, “ to take from the owner money actually owing by him upon his contract and apply it in payment for the labor and material which the Avorkmen and material-men have contributed tOAvard the performance of the same contract.” And, where it is provided, as in our statute, that an assignment or transfer by the contractor of his contract with the owner shall save and be subject to the claims of the workmen and material-men who have furnished labor or material toAvard the construction of the improvement, such provisions operate as an equitable transfer to the workmen and material-men of the money due to the contractor by the owner, subject only to such obligations as spring out of.the contract itself. This construction is believed to be founded in reason and to be supported by the holdings of courts in other states upon the subject. The amount owing to the contractor under the contract being thus found to be transferred to the AAorkmen and material-men, it would seem to follow that any process, proceeding, or device Avhich has for its object the Avresting from the Avorkmen and material-men of their equitable hold upon the amount due under the contract, being the result of and produced by their labor and material, would be directly against the spirit of the law, if not against the very letter itself. All proceedings by attachment, or otheiwise, to subject or incumber the contractor’s interest in the contract, are to save and be subject to the claims of the workmen and material-men, and it is difficult to perceive why the allowance of a set-off against the contractor acquired by the OAvner, after the labor is performed or the material is furnished, would not work the same substantial result that Avould be reached by attachment, nor Avhy it would not divert the security afforded by the contract from those whom the statute contemplate, shall have the benefit of it, and thus accomplish, indirectly, in favor of the owner, that which the statute provides shall not be done by any one, directly. Had the defendant’s assignor sought to reach the interest of the contractor in this contract, as against the claim of the plaintiff, by proceedings in attachment, or by any proceeding known to the law, the very letter of this statute would have proved an effectual bar. How can it (the company) evade the law by selling the claim to another? Ordinarily the purchaser of an overdue claim stands in no better position than his assignor. The rule admits of many exceptions, especially as to matter of remedy, but to regard the present case as affording a ground of exception would, to our mind, work a clear violation of the spirit of the statute.

It is contended that the defendant’s claim against the contractor was a cross demand in such sort that a statutory set-off existed in his favor. As against the contractor, in a suit upon the contract, the set-off’ might be effective, but the equities of the mechanic under this statute introduce another element into the case. The doctrine of set-off is of equitable origin, is a graft from equity upon the law, and, though incorporated into our statute, is to be administered in accordance with the principles of equity, and is not to be extended beyond the words of the statute in cases where, under the rules of equity, it should not be held to apply. Our statute, which provides that where cross demands have existed between persous under such circumstances, as that if one had brought an action against the other, the set-off could have been set up, neither can bo deprived of the benefit thereof by assignment, but the two demands shall be deemed compensated, applies to a case where, an action being brought by one upon a claim obtained from another, the party sued seeks to set off’a cross demand against that other. In such ease he can not be deprived of his remedy because of the fact that the action is brought by the assignee rather than the assignor. And a sufficient reason is that, aside from the consideration of avoiding circuity of action and multiplicity of suits, it would be inequitable to allow one to deprive another of his right of set-off by an assignment of the claim to a third person in. favor of whom no equity of any kind exists. His claim is based wholly upon the consideration moving in favor of the assignor; the assignee stands in his shoes, and hence he can not have any advantage which the assignor might not have had in a suit brought by himself. But we have not that case here. The workman or material-man stands in the contractor’s shoes only as regards the contract itself and payments upon it, and not as regards matters or claims extrinsic of the contract. The consideration which supports his claim is his labor or material upon the structure wherein the owner himself has an interest and of which he gets the benefit. There is, therefore, a consideration moving directly in favor of the workman or material-man, and it would be grossly inequitable for the doctrine of set-off to be interposed to prevent him from receiving the benefits of the statute, and thus to enable the owner to take one man’s property to pay another man’s debt.

It is further contended that the set-off of the' defendant should be treated as a payment upon the contract; that it is the balance due from the owner to the contractor which the workman or material-man may stop the payment of, the language of the statute being “ not exceeding in any case the balance due to the principal contractor,” and that this balance due can not be ascertained until the cross demand is deducted from the contract price. This claim is not tenable. Taking the whole statute together it is reasonable to construe this phrase as applying only to the moneys due by the owner to the contractor under the contract. This follows because the rights of the workman and material-man as against the owner are controlled by the contract and are in strict subordination to its terms, and to construe the language quoted as implying balance due on general account would be to engraft upon the contract other and inconsistent terms, the effect of which would be to incumber the contractor’s interest in the contract; it would be to supplant the ^implication that the consideration was to be paid in money by a provision that it could be paid or satisfied in some other way. We have already said upon the general subject of set-off and cross demands all that seems necessary. Keeping in mind that it is the subsequent payments which the statute gives the workman and material-man a right to have kept back, upon what principle can the set-off be treated as payment ? A payment is said to be a mode of extinguishing obligations. Not only that, but where the contract calls for money, ordinarily it is money which must be paid unless the creditor agrees to accept something else as its equivalent. This act calls for the exercise of the will, of consent, and without consent it can not be regarded as extinguishing the obligation. Without reference to the peculiar wording of section 3204 of the statute,- wherein payment is treated of, the conclusion that this set-off could not perform the office of a payment seems irresistible. But a reference to that section may not be unprofitable. It provides that if by collusion or fraud the owner pay in advance of the payments due under the contract, and diminish the amount of the funds, he shall be liable in the same manner as if no such payment had been made ; but any such payment made in good faith to complete the work according to the original contract shall not be held as fraudulent or collusive. It -would seem not unreasonable to claim from the language of this section that, as to advance payments, the owner may not make them simply to accommodate the contractor, or even to accommodate himself, but that the advance payment allowed and described as not fraudulent or collusive, being oue made in good faith in order to complete the contract, a payment made in advance for any other purpose would not avail the owner as against the workman or material-map, but as to them would be held to be fraudulent and collusive. A construction of this section is not necessary to a determination of the case at bar, but it is suggested that the significant language therein throws much light upon the purpose and object of the whole statute, and re-enforces the conclusions we have drawn from the other sections.

Again it is contended that the term set-off as used in section 3202 refers to set-off as against the contractor in the hands of the owner ; as though there is some magic in the word “ set-off,” in the connection in which it is used, which shows that the claim of the workman and material-man is subject to every set-off. "We do not so construe it. To expect those parties, before filing a claim, to inquire into and ascertain whether a set-off exists in favor of the owner against the contractor, and incorporate that into their claim, is manifestly unreasonable.

Nor is the claim of hardship as regards the owner apparent. It was no more unreasonable to require him, before purchasing a claim against the contractor, to learn whether the workman, whom he knew had performed labor on his house, had been paid, than to ask that workman to anticipate the possibility of the purchase of a claim against the contractor, and give earlier notice. He may have had good reason to rely upon the contractor ki the¡full belief that if the money should be paid by the owner that same money would forthwith pass to him. At all events he had the right to rely upon the contract and the law.

"We do not deem it necessary to undertake a review of the many decisions of the courts of the several states cited by counsel. They have all been examined, as well as many others, and it is believed that, while there is not uniformity in the holdings, owing, in a measure at least, to variance in the terms of the statutes, the general drift will be found in the direction of the conclusions we have reached in construing the statutes of our own state. Nor is it necessary to review the two cases in Ohio referred to. Copeland v. Manton, 22 Ohio St. 398, an instructive case, was based upon dissimilar facts, and the question here presented was not before the court. Besides, very marked changes haveheen made in the statute since the facts of that case arose. The same may be said as to Dun v. Rankin, 27 Ohio St. 132, where tbe opinion was delivered by the learned judge wbo pronounced the opinion in the earlier case.

Judgment of district court reversed and that of common fleas'affirmed.


author: Owen, O. J.

text:
    Meriden Silver Plate Company v. Flory.

      Revised Statutes, section 5833 — Notice by surety to holder of note to sue principal — Reasonableness of delay — Solvency of principal — Non-residence of holder.

    1. The requirements of section 5833 of the Revised Statutes, providing for notice by a surety to his creditor to commence action forthwith against the principal debtor, are satisfied by substantial compliance; and a notice which is positive in its request to sue, and does not mislead the creditor as to the instrument to be sued upon, is sufficient.
    2. A corporation of the state of Connecticut, holding a matured joint note executed in this state by C. M. Rider, principal, and Flory & Havens, sureties, residents of this state, made demand of payment by mail upon the sureties, who at once returned the following: . . . “Yours of the 12th came to hand. If you hold any note signed by C. M. Rider and ourselves, C. M. Rider is the principal, and we are only sureties, and we notify you to commence an action on the note forthwith, and proceed to collect it. Rider is able to pay his own notes. Yours, Flory & Havens.” Held, the notice was sufficient.
    3. This notice was received on October 17, 1878. The action was commenced January 25, 1879. The delay was unexplained, except by the fact that the plaintiff was a resident of the state of Connecticut. Held, there was no error in finding as a conclusion of law that the action was not commenced within a reasonable time after notice.
    4. The duty of the creditor to proceed within a reasonable time after such notice, is imperative. It is the right of the surety to require that action be brought against the principal and diligently proceeded with; and this right is not qualified or affected by the fact of solvency or insolvency of such principal.
    5. Where the principal and surety are residents within the same jurisdiction, the duty of the creditor to commence an action, as required, is not affected by the fact that he is a resident of another state.
    6. To entitle the surety upon a note to the benefit of section 5833, supra, it is not necessary that the fact of suretyship should appear upon the face of the note.
    Error to the District Court of Licking county.
    June 1, 1878, C. M. Rider, principal, and Plory & Havens, sureties, all residing and being in Licking county, Ohio,' drew their joint note of that date for $326.58 to the order of Meriden Silver Plate Company, a corporation of the state of Connecticut, and doing business therein, due four months after date, and delivered it to the payee. October 14, 1878, the note being unpaid, Plory & Havens received, at Newark, Ohio, a letter of the following tenor:
    “ West Meriden, Conn., Oct. 12, 1878.

      “Messrs. Flory ‡ Havens, Newark, Ohio.

    “ Gentlemen : — No doubt you are aware that the joint note made in our favor by C. M. Rider and yourselves, due 1-4 inst., was protested for non-payment. Please see that we have N. Y. funds by return mail in settlement of the protested note: $326.58; plus, $1.50; total, $328.08, and much oblige, yours, truly,
    “ The Meriden Silver Plate Co.
    “Robert H. Curtis, Treasurer.”
    Plory & Havens at once wrote and mailed a response of the following tenor:
    “ Newark, Ohio, Oct. 14,1878.

      “The Meriden Silver Plate Company, West Meriden, Conn.

    “ Yours of the 12th came to hand. If you hold any note signed by C. M. Rider and ourselves, C. M. Rider is the principal and we are only his sureties, and we notify you to commence an action on the note'forthwith, and proceed to collect it. Rider is able to pay his own notes. Yours, respectfully, Plory & Havens.”
    The plaintiff commenced suit on this note in the Licking common pleas court, against all the makers, on January' 23, 1879.

      The pleadings are voluminous and the issues below were numerous. There is no bill of exceptions in the record. The trial court, on request of the plaintiff, stated its findings of fact and conclusions of law.
    So far as they involve the questions considered in the opinion they are: “ The court finds as matters of fact . . . that the treasurer of the plaintiff's corporation, Robert II. Curtis, wrote a letter as set out and stated in the plaintiff’s reply to the third defense in the defendant’s answer, and that in reply to the letter .of said Curtis, as such treasurer, the defendants, Elory & Havens, wrote and mailed at Newark, Ohio, the answer dated October 14, 1878, a copy of which is also set out and correctly stated in plaintiff’s reply to the third defense, and which is the notice the defendants, Elory & Havens, claim to have served upon said plaintiffs in said third defense. The court finds that on the issue made concerning the giving of the notice claimed by the defendants that the notice, a copy of which is set out in the reply, as aforesaid, was duly deposited in the post-office at Newark, Ohio, on October 14,1878, duly directed to the plaintiff at West Meriden, in the state of Connecticut.
    “That by due course of mail said notice would reach the plaintiff in thirty-six hours after such deposit in the Newark post-office. That this suit was commenced January 23,1879, and from said evidence the court finds as a matter of fact that the said plaintiff received said notice on or before October 17,1878. That no other notice was sent or given them than as above stated. The court also finds as a matter of fact that since December 25, 1878, the said Rider has beeu, and is insolvent, and has no property subject to levy and sale on execution.
    “And the court finds as matters of law arising upon said facts that said notice was sufficient in law, and under the statute, and that the said plaintiff did not within a reasonable time after said notice was deposited in the post-office at Newark, Ohio, as aforesaid, and received by the plaintiff, as aforesaid, commence action on said note, and have thereby forfeited the right which it would, otherwise have to demand and receive of said Elory & Havens, as such sureties, the amount due thereon.”
    - The letters referred to in these findings are those heretofore set forth in this statement.
    Upon the facts so found, and those admitted by the pleadings, judgment was rendered for the defendants, Elory & Havens.
    This judgment was affirmed on error in the district court. The present proceeding is prosecuted to.reverse the judgment below.

      Charles Follett &¡ Son, for plaintiff m error,
    contended-that the letter sent by the defendants to the plaintiff was not a sufficient notice in law to work a forfeiture of their right to enforce payment of the note against the defendants, and that it did not relieve them from payment, inasmuch as no particular note was referred to and no declaration that unless suit was brought they would no longer remain liable, and cited Baker v. Kellogg, 29 Ohio St. 663; Kaufman v. Wilson, 29 Ind. 504; Iliff v. Weymouth, 40 Ohio St. 101.
    The delay in bringing suit was not unreasonable. The plaintiff was a Connecticut corporation, doing busiuess in. that state. That fact must be considered in imputing negligence. Davis v. Hatcher, 10 Am. Law Reg. (N. S.) 519.
    There was nothing in the note to indicate the suretyship of the defendants. Hence they could not avail themselves of the statute. Braudt Suretyship, sec. 503; Payne v. Webster, 19 Ill. 103.
    J. A. Flory, for defendants in error.
    The notice was sufficient. Section 5833, Revised Statutes; Clark v. Osborn, 41 Ohio St. 28; Franklin v. Franklin, 71 Ind. 573; Routen v. Lacy, 17 Mo. 399; Brandt Suretyship, sec. 504; Iliff v. Weymouth, 40 Ohio St. 101.
    The finding of the court below that the delay was unreasonable is conclusive. Ralston v. Kohl, 30 Ohio St. 92.
    The delay was unreasonable. Nash v. Harrington, 16 Am. Dec. 672; Aymar v. Beers, 17 Am. Dec. 538; Swan’s Treatise, 718, 719; Spalding’s Treatise, 475; 3 Kent Com. (12 ed.), 88; Clark v. Osborn, supra.

    The sureties were released by the delay. Pain v. Packard, 13 John. 174; s. c., 7 Am. Dec. 369; King v. Baldwin, 17 John. 384; s. c., 8 Am. Dec. 415; Colgrove v. Tallman, 67 N. Y. 99; Bruce v. Edwards, 1 Stew. 11; s. c. 18 Am. Dec. 33; Ide v. Churchill, 14 Ohio St. 386; Hempstead v. Watkins, 6 Ark. 317.
   Owen, O. J.

Three alleged errors are assigned as grounds of reversal of the judgments below.

1. That the facts found by the court did not warrant the conclusion that the letter of Elory & Havens to the plaintiff, dated October 14, 1878, notifying it to commence an action on the note, etc., was received by-the plaintiff October 17, 1878, or at all.

2. That the court erred in finding that such letter was sufficient notice under the statute authorizing notice by surety to the holder of a note to commence action, etc.

3. That, even if the notice was sufficient, the court erred in finding that the plaintiff did not, within a reasonable time, commence action on the note.

I. Assuming that the finding is based solely upon the facts stated by the court, it is evident that it proceeded upon the presumption that the alleged notice reached the plaintiff by due course of mail. We have in the record, however’, a further admitted fact.

The company alleges, in its l’eply to an answer of Flory & Havens, filed in the case, that this letter “ was mailed at Newark, Ohio, on or after the date thereof, October 14, 1878, and in due course of the mail taken from the post-office at West Meriden, in the state of Connecticut, by some one for said plaintiff corporation, but who plaintiff can not state, or when it came to the notice of the officers or directors of said corporation.”

If this letter was taken from the post-office by some one “for the corporation,” this was equivalent to its receipt by the corporation. It was not necessary that such person should have been either an officer or director. If he was a stranger, or had no authority to receive it, there was no warrant for the statement that it was taken from the post-office for the corporation.

There was no error in this finding of the court.

II. Was the notice insufficient in law in that it was conditional ?

Section 5833, Revised Statutes, provides that a surety in such a case may “ require his creditor, by notice in writing, to commence an action on such instrument forthwith, against the principal debtor,” etc. It was held in Baker v. Kellogg, 29 Ohio St. 663, cited and relied on by plaintiff, that the notice under this provision “ must contain an unconditional requirement to commence an action forthwith; and a notice that the surety ‘wishes’ the creditor ‘to proceed against the principal debtor ’ and collect ‘ the.claim or have it arranged in some way,’ and that the surety does ‘ not wish to remain bail any longer,’ is not sufficient.”

The notification in the case at bar -was qualified with no condition. True, the sureties said : “If you hold any note signed by O. M. Rider and ourselves, C. M. Rider is the principal and we are only his sureties,” etc. There was but one note in question. There could have been no doubt at all concerning the note to be put in suit. The plaintiff was then urging its payment by the defendants. But the notice then continues: “And we notify you to commence an action on the note forthwith, and proceed to collect it.” Here was no condition, and there was substantial compliance with the statute. This is sufficient. Clark v. Osborn, 41 Ohio St. 28. The requirement of the notice was unmistakable. There was no error in finding it to be legally sufficient. Technical accuracy is not required. It is sufficient if the notice is positive and the creditor is not misled. Brandt Suretyship, sec. 504; Routen v. Lacy, 17 Mo. 399.

III. Section hSM, supra, further provides that unless the creditor receiving the notice “ commence such action within a reasonable time thereafter, and proceed with due diligence, in the ordinary course of law, t‘o recover judgment against the principal debtor for the money . . . and to make, by execution, the amount thereof, the creditor . . . so failing to comply with the requisition of such surety, shall thereby forfeit the right which he would otherwise have to demand and receive of such surety the amount due thereon.” The notice was received on the 17th of October, 1878. Suit was not commenced until January 23, 1879. The court found, as a conclusion of law, that the plaintiff did not commence action upon the note within a reasonable time after notice. Did the court err in this? We may take judicial notice of the fact that the January term of the court in which the action was brought commenced January 6, 1879. How far this fact entered into the consideration of the trial court, or whether that court considered the length of the next prior term, does not appear. We consider the question in the light of the facts found and stated by the court.

The plaintiff was a Connecticut corporation. It held the note of these parties residing in Ohio. This note being unpaid at maturity, the plaintiff caused it to be protested for non-payment. It then demanded payment of these defendants in error. They at once notified it that they were sureties for the first named maker who was able to pay his own notes, and required that it commence an action on the note forthwith and proceed to collect it. After a lapse of two months and eight days from the notice the principal became insolvent. After the lapse of three months and six days from the notice, action was commenced.

We are asked to say that the court ought to have found, and erred in not finding, that this fully answered the ■'equirement of a statute providing for notice to commence suit forthwith, that such suit be commenced within a reasonable time thereafter, aud with clue diligence proceeded with, etc.

We can not say this. We attach no importance, however, to the question of solvency or insolvency of the principal. The statute is not qualified by such considerations. It is imperative. It leaves no discretion with the creditor. It is the surety’s right to require that action be brought and diligently proceeded with, that a test may be made of the principal’s ability to pay.

The terms “reasonable time” and “due diligence ” are to be construed with, -and in the light of, the term “forthwith” to be used in the notice to commence the action. Reid v. Cox, 5 Blackford, 312; Overturf v. Martin, 2 Ind. 507; Miller v. Childress, 2 Humph. 320; Brandt on Suretyship, sec. 511; Garratt v. Eliff, 4 Humph. 323.

The case of Davis v. Hatcher, 10 Am. Law Reg. (N. S.) 519, described by the United States-'circnit court for southern district of Georgia, is cited as authority for the proposition that “the omission of the creditor to sue a principal residing in another state could not, under any circumstances, as between him and the surety, make him chargeable with gross negligence.” In that case the surety resided in Georgia, while the principal resided in Alabamá. It was simply held that the plaintiff need not go to the latter state to bring action against the principal. In the case at bar the sureties and the principal were all within the same j n risdiction. The plaintiff was compelled to come within that jurisdiction to sue either of them. There is nothing in the principle of the case last cited, nor in the fact that the plaintiff resided in another state, that excused it from obeying the requirement of the statute and of the notice. No hardship was imposed upon the plaintiff which was not contemplated by the statute. The third assignment of error is not well taken. The position, contended for by plaintiff in error, that the statute does not apply to the note in suit for the reason that there was nothing on the face of it to indicate the fact of surety-ship, is untenable. In Baker v. Kellogg, 29 Ohio St. 663, cited supra, where the same defense was interposed by the surety as in the ease at bar, there was nothing on the face of the note to indicate suretyship. It was held that parol evidence was admissible to prove that fact. The surety was discharged. There is no error in tne judgments below.

Judgment affirmed.


author: By the Court.

text:
    Halderman v. Larrick.

      Revised Statutes, section 6710 — Practice.
    This court has had no power since the amendment of section 6710 of the Revised Statutes, April 18, 1883 (80 Ohio L., 169), to reverse a judgment of the district court reversing a judgment of the common pleas and remanding the cause for a new trial on the merits.
    Motion for leave to file petition in error to the District Court of Ross county.
    The district court of Ross county, at its September term, 1884, in a proceeding in error then pending, wherein Robert Larrick was plaintiff and Lauretta C. Halderman et al. were defendants in error, reversed the judgment of the court of common pleas, and remanded the cause for a new trial on the merits; and application is now made for leave to file a petition in error in this court to reverse the judgment of the district court.

      S. D. McDougaZ, for the motion.

      L. T. Neal, contra.

   By the Court.

April 18, 1883, the legislature amended section 6710, Revised Statutes, so as to provide, among other things, that “no judgment or final order of the district court . . . reversing a judgment or final order and remanding the cause or matter for a new trial on the merits or judgment or order rendered in the cause or proceeding previous to such reversal, shall be reversed in.the supreme court” (80 Ohio L. 169). .

This section was, at the organization of the circuit courts, repealed and supplied by an amendment, February 7, 1885, and the latter was again repealed and supplied by an amendment May 4, 1885 (82 Ohio.L. 36, 230).

In neither of the amendments of 1885 was any jurisdiction conferred on this court to review a judgment of the district court; and the jurisdiction it formerly possessed over the judgments of the district courts was taken away by the repeal of February 7,1885, except so far as the same is saved by the operation of section 79, Revised Statutes, which is as follows : “ Whenever a statute is repealed or amended, such repeal or amendment shall in no manner affect pending actions, prosecutions, or proceedings, civil or criminal, and when the repeal or amendment relates to the remedy, it shall not affect pending actions, prosecutions, or proceedings, unless so expressed; nor shall any repeal or amendment affect causes of such action, prosecution, .or proceeding, existing at the time of such amendment or repeal, unless otherwise expressly provided in the amending or repealing act.” O’Donnell v. Dowing, 43 Ohio St. 62.

As this was not a pending proceeding on February 7, 1885, the only question is whether there was at that time an existing right to prosecute a proceeding in error in this court to reverse the judgment that is here sought tobe reviewed.

The judgment complained of reversed the judgment of thé court of common pleas; it was a judgment upon the merits; and the district court, in its judgment of reversal, remanded the cause for a new trial. Hence, when the act of February 7,1885, was adopted,' repealing the section as amended April 18, 1883, this court had, under the section repealed, no jurisdiction to reverse the judgment of the district court in a case like this, and it certainly acquired none by the repeal.

Holding as we do that this court has no power to reverse a judgment.of the district court reversing a judgmeut of the common pleas and remanding the cause for a new trial upon the merits, where such judgment of reversal was rendered since the amendment of section 6710, Revised Statutes, made April 18,1883, the motion is overruled without considering the errors assigned;


text:
    Anderson et al. v. Gilchrist et al.

      Revised Statutes, section 4162 — Meaning of term, “ any former deceased husband."

    Error to the District Court of Warren county.

      A. G. McBurney, Thomas Millikin and James F. Campbell, for plaintiffs in error.

      T. F. Thompson, J. F. Smith and Fltzroth $ Thompson, for defendants in error.
   By the Court.

The term “ any former deceased husband,” in section 4162, Revised Statutes, refers to any husband who has. deceased leaving a widow to whom any real estate or personal property has passed by virtue of the provisions of said section, and is not confined in its application to cases where the widow has had two or more husbands who are deceased.

Judgment of .the district court affirmed in part'and reversed in part, and cause remanded to circuit court for further proceedings.


author: Minshalu, J.

text:
    Robinson v. Kanawha Valley Bank.

      Bill of exchange — Acceptance by agent — Admissibility of parol evidence.

    The drawee of a bill of exchange, drawn by the Kanawha & Ohio Coal Co.,” was described in the bill as “John A. Robinson, Agt.,” and it was accepted by him as “John A. Robinson, Agent K. & O. C. Co.” Held, that the acceptance so made was the personal obligation of John A. Robinson, and that in a suit upon the acceptance by an indorsee against him, parol evidence was not admissible, in the absence of fraud, accident, or mistake, to show that the defendant so accepted the bill intending to bind the drawer as his principal, and that this fact was known to the plaintiff at the time it became tlie owner and holder of it.
    Error to the Superior Court of Cincinnati.
    The plaintiff below, the Kanawha Valley Bank, brought suit in the Superior Court of Cincinnati to recover against John A. Robinson as acceptor of the following bill of exchange :
    “ $265.87. Kanawha & Ohio Coal Co.,
    “ Coalburo, "W. Va., May 14,1874.
    “ Seventy-five days after date pay to the order of J. D. Moore two hundred and sixty-five and 87-100 dollars.
    “Kanawha & Ohio Coal Co.,
    By "W. IT. Edwards, Pres’t.

    “ To Jno. A. Robinson, Agent, Cincinnati, Ohio.”

    "Written across the face of the bill was the following acceptance :
    “Accepted, payable at Lafayette Bank, Cincinnati, Ohio-
    “ Jno. A. Robinson,

      “Agent K. O. G. Co.”

    The defendant answered: “ That the bill of exchange sued on .was drawn by the said Kanawha and Ohio Coal Company, a corporation, by its president, upon the defendant as the agent of said company, with the intent that it should be accepted by the defendant as agent so as to bind the said company aud not the defendant individually; that as the agent of the said company, and for the said company, and not for himself, he accepted the said bill, and he was fully authorized by said company to accept said bill for said company; that the said bill was drawn for said company and- received by the said payee for and on account of said company, and said payee then knew that the defendant was the agent of said company and accepted it for said company; that the plaintiff, when it received the said bill, well knew it was drawn upon the defendant as the agent of said Kanawha and Ohio Coal Company, and accepted by him as said agent for the said company, and not for himself, and drawn and accepted on account of the business of said company.
    “ The defendant therefore denies that he accepted the said bill, or is liable thereon as an acceptor, and prays judgment.”
    A jury was impaneled to try the issues made by a reply denying the averments of the answer. On the trial the court permitted the defendant to show that the initials “K. & O. C. Co.” meant the “Kanawha and Ohio Coal Company,” but rejected all the other testimony offered to support the averments of the answer; and the bill, with the acceptance, having been offered in evidence, directed a verdict for the plaintiff.
    The verdict was rendered, and a motion for a new trial, on the ground that the court erred in rejecting the evidence offered by the defendant, and in directing a verdict for the plaintiff, having been made and overruled, to which the defendant excepted, judgment was rendered for the plaintiff.
    These rulings of the court are assigned for error here, and the judgment is asked to be reversed.

      Lincoln § Stephens, for plaintiff in error:
    I. The draft, upon its face, shows that it was not intended to bind Robinson personally;' but, on the contrary, that it was the company which was-intended to be bound. The name of the company appears in bold letters upon the face of the draft, and also as the'dra.wer. It appears from an inspection of the the paper that it was the intention, both of the drawer and Robinson, to give the acceptance of the company. The Kanawfia bank knew of the agency-of Robinson, and that he was in the habit of accepting for the company in the same form. ■ ’
    The court always lays hold of any indication on the face of the paper, however informally expressed, to enable it to carry out the intentions of the parties. Carpenter v. Farnsworth, 106 Mass. 661.
    The following are some of the cases ih which the persons who wrote the signatures were held not personally liable: Ballou v. Talbot, 16 Mass. 461; Tucker Man. Co. v. Fairbanks, 98 Mass. 104; Tripp v. Swanzey Paper Co., 13 Pick. 291; Fuller v. Hooper, 3 Gray, 334; Bank of British Am. v. Hooper, 5 Gray, 567; s. c., 66 Am. Dec. 390; Slawson v. Loring, 5 Allen, 340; Chipman v. Foster, 119 Mass. 189; Cutler v. Ashland, 121 Mass. 558; Goodenough v. Thayer, 132 Mass. 152; Hitchcock v. Buchanan, 105 U. S. 416; Post v. Pearson, 2 Sup. Ct. Rep. 799; Hovey v. Magill, 2 Conn. 680; Shelton v. Darling, 2 Conn. 435; Despatch Line of Packets v. Bellamy M’f’g. Co., 12 N. H. 205; s. c., 37 Am. Dec. 203; Lacy v. Dubuque Lumber Co., 43 Iowa, 510; Laflin & Rand Powder Co. v. Sinsheimer, 48 Md. 415; Am. Lead. Cas. 633; McClellan v. Reynolds, 49 Mo. 312; Means v. Swormstedt, 32 Ind. 87; Baker v. Chambles, 4 Greene (Ia.), 428; Hardy v. Pilcher, 57 Miss. 18; Babcock v. Beman, 11 N. Y. 200; Kean v. Davis, 1 Zab. 683; s. c., 47 Am. Dec. 182; Milligan v. Lisle, 24 La. Ann. 144; Webb v. Burke, 5 B. Mon. 51; Roberts v. Button, 14 Vt. 195; Brockway v. Allen, 17 Wend. 40; Conro v. Port Henry Iron Co., 12 Barb. 27; Lazarus v. Shearer, 2 Ala. 718: Drake v. Flewellen, 33 Ala. 106; Bruce v. Lord, 1 Hilt. (N. Y.) 248; Early v. Wilkinson, 9 Gratt. 68; Haile
      v. Peirce, 32 Md. 327; Hood, v. Hallenbeck, 7 Hun, 362; Amison v. Ewing, 2 Cold. 366; Owings v. Grubbs, 6 J. J. Marsh. 32; Johnson v. Smith, 21 Conn. 627; Andrews v. Estes, 11 Me. 287; s. c., 26 Am. Dec. 521; Stearns v. Allen, 25 Hun, 558; Barlow v. Cong. Soc., 8 Allen, 460; Simpson v. Garlund, 72 Me. 40; Wallis v. Johnson School Township, 75 Ind. 368; Scanlan v. Keith, 102 Ill. 634. See also Whart. Ag., secs. 291, 292, 293; Ang. & Am. Corp., sec. 295; Story Prom. Notes, sec. 69; Par. N. & B. 97.
    H. Parol proof was admissible to show the meaning of the initials, the circumstances under which the contract was made, and the true nature of the transaction. The Laflin & Rand Powder Co. v. Sinsheimer, 48 Md. 411; Hardy v. Pilcher, 57 Miss. 18; Lacy v. Dubuque Lumber Co., 43 Iowa, 510; Mechanics' Bank v. Bank of Columbia, 5 Wheat. 326; Kean v. Davis, 1 Zab. 683; s. c., 47 Am. Dec. 182; 1 Am. Lead. Cas. 632, 633; Ang. & Am. Corp., sec. 293; 1 Dan. Neg. Inst., sec. 418; Hood v. Hallenbeck, 7 Hun, 362; Brockway v. Allen, 17 Wend. 40; Conro v. Port Henry Iron Co., 12 Barb. 27; Hale v. Pierce, 32 Md. 327; Haight v. Sahler, 30 Barb. 218; Brown v. Douglas, 38 Barb. 312; Early v. Wilkinson, 9 Gratt. 68; Scanlan v. Keith, 102 Ill. 634; Bean v. Pioneer Min. Co., 66 Cal. 451; Bank of Newbury v. Baldwin, 1 Cliff. 519; Metcalf v. Williams, 104 U. S. 97.

      W. H. Mackoy, for defendant in error.
    I. The words “ agent K. & O. C. Co.” are simply a description of the person. Titus v. Kyle, 10 Ohio St. 444; Anderton v. Shoup, 17 Ohio St. 125; Bank v. Cook, 38 Ohio St. 442; Tucker Man. Co. v. Fairbanks, 98 Mass. 101; Thomas v. Bishop, 2 Strange, 955; Hills v. Bannister, 8 Cow. 31; Barker v. Mec. Fire Ins. Co., 3 Wend. 94; s. c., 20 Am. Dec. 664; Moss v. Livingston, 4 N. Y. 208; Taft v. Brewster, 9 John. 334; s. c., 6 Am. Dec. 280; Savage v. Rix, 9 N. H. 263; Stone v. Wood, 7 Cow. 453; s. c., 17 Am. Dec. 529; Fiske v. Eldridge, 12 Gray, 474; Slawson v. Loring, 5 Allen, 340; De Witt v. Walton, 9 N. Y. 571; Trask v. Roberts, 1 B. Mon. 201; Whitney v. Sudduth, 4 Met. (Ky.) 297; Parks v. President, etc., 4 J. J. Marsh. 456; Caphart v. Dodd, 3 Bush, 585; Burbank v. Posey, 7 Bush, 372; Fogg v. Virgin, 19 Me. 352; s. c., 36 Am. Dec. 757; Pack v. White, 78 Ky. 243.
    II. An agent having authority to contract in the name of his principal, and intending so to contract, .who uses words importing a personal engagement — although he describe himself as agent — binds himself, and not his prin-cipal. Combes’ case, 9 Coke, 76, 77; Titus v. Kyle, 10 Ohio St. 444; Potts v. Rider, 3 Ohio, 71; Tucker Man. Co. v. Fairbanks, 98 Mass. 101; Stone v. Wood, 7 Cow. 453; s. c., 17 Am. Dec. 529; Nicholls v. Diamond, 9 Exch. 154; Savage v. Rix, 9 N. H. 263; Leadbitter v. Farrow, 5 M. & S. 345; Taber v. Cannon, 8 Met. (Mass.) 456; Hopkins v. Mehaffy, 11 Serg. & Rawle, 126; Furnivall v. Coombes, 5 M. & G. 736; Appleton v. Binks, 5 East, 148.
    III. The intention of the party signing must be gathered from-the instrument, and parol evidence is not admissible. Titus v. Kyle, 10 Ohio St. 444; Anderton v. Shoup, 17 Ohio St. 125; Wilson v. Bailey, 1 Handy, 177; Trask v. Roberts, 1 B. Mon. 201; Bank v. Cook, 38 Ohio St. 442; Higgins v. Senior, 8 M. & W. 834; Whitney v. Sudduth, 4 Met. (Ky.) 297; Stackpole v. Arnold, 11 Mass. 27; s. c., 6 Am. Dec. 150; 1 Dan. Neg. Inst., sec. 300.
    IV. The court cau not supply “ as,” “ for,” or any other operative word after “ agent.” It has been held in this state that “ when the clause of a deed containing the covenant of seizin is blank as to the names of those who are seized, it does not amount to a covenant of seizin by the grantors.” Day v. Brown, 2 Ohio, 345.
   Minshalu, J.

It is apparent that the question presented is precisely the same as would have arisen on a demurrer to the answer, and we shall so treat it. Evidence as to the meaning of the initials, without the other circumstances, could in no way vary the rights and liabilities of the parties. If the facts stated in the answer constitute a defense, the defendant should have been permitted to prove the same, as he offered to do by the evidence ruled out. If not, then there was no error in rejecting it, and the judgment should be affirmed.

There is nothing in the answer to the effect that, at the time Robinson accepted the bill, he did not have funds of the drawer in his hands applicable to the payment of the bill at its maturity, or that he did not expect to have, and ■that this fact was known to the plaintiff’ when it became the owner of it. It is entirely consistent with the hypothesis that he was acting as the agent of the drawer at Cincirinati, a coal company doing business at Coalburgh, W. Va.; and that in the transaction of its business at Cincinnati, he then had, or expected to have, funds of the company in his hands applicable to the payment of the bill and on which it had been drawn. The relation of principal and agent may exist between drawer and drawee, without changing the rights of the payee against the drawee upon his acceptance of the bill. When the principal, located at one place, draws upon his agent located at another, the natural presumption is, from the, usual course of business, that it is against funds of the principal that are, or will be, in the hands of the agent, and which the principal requests the agent to apply to the payment of the bill at its maturity. “A bill of exchange is presumed to be drawn on funds, with the understanding between drawer and drawee that it is an appropriation of the funds of the former in the hands of the latter, and acceptance is an admission that it was so drawn, and of such a relation between the parties.” 1 Par. N. & B. (2 ed.) 323.

The usual relation between the drawee and the drawer is that of debtor and creditor; and such relation in fact exists between an agent and his principal, where the latter has funds in the hands of his agent. The bill here, as drawn and accepted, is consistent with and supposes such relation; and, as we have observed, there is nothing in the answer to the effect that such relation did not exist, nor was there any evidence offered to the contrary. Robinson was not bound to accept; or he might have done so on condition that he had funds of the principal at the maturity of the bill, and thus have qualified his obligation. But as it is, his acceptance imports the possession of funds, and obliges him to pay the bill. 1 Par. N. & B. (2 ed.) 301, and note (w).

The fact that he is designated in the bill and described in his acceptance as agent, does not vary the case. This description of himself may, and no doubt did, serve a useful purpose in the settlement of his accounts with the company.

The law as to notes and bills, executed by persons acting as agents of other persons, is not uniform, but, as a rule, where one acting as agent uses words that import a personal agreement on his part, and signs his own name, it is held to be his individual obligation, although he describe himself as agent; the added words being regarded simply as a description of his person. The rule is in conformity to precision in the use of language, and secures that certainty in negotiable paper so necessary to commercial transactions. Thomas v. Bishop, 2 Strange, 955; Barker v. Mec. Fire Ins. Co., 3 Wend. 94; Dan. Neg. Inst., § 300.

The question has been presented and so ruled in a number of the reported decisions of this court.

Thus, in Titus v. Kyle, 10 Ohio St. 444, where the makers had described themselves in the body of the note as directors of a certain turnpike road, and the note read, “ One year after date, we, or either of us, as directors, etc., promise to pay,” to which each signed his individual name, it was held that each was individually liable, and that in the absence of an averment of fraud or mistake, the makers could not be permitted to show an intention on their part not to bind themselves individually.

In Collins v. Buckeye Fire Ins. Co., 17 Ohio St. 215, the note read, “ I promise to pay, etc.,” ,and was signed “ Edward K. Collins, Agent.” The defense was that the payee had notice of the agency of the maker, and that he. was not lia— ble individually upon the note. But the court held that parol evidence was inadmissible for that purpose, and that Collins was personally liable upon the note. These cases show that, in this state, where one acting as agent signs his individual name to a note, that, by its language, imports a personal liability on his part, ho is bound accordingly, although in signing the note he describes himself as agent.

We fail to see how it can make any difference in this respect whether the party signing describes himself as agent simply, or adds the name of his principal; in either case the principle upon which his liability is established and parol testimony excluded must be the same; the instrument upon its face is his own, and not the promise of his principal. To this rule usage has established an apparent exception, in the instances where a bill is drawn or accepted by the cashier of a bank. But it is rather apparent than real, since the custom by which a cashier represents his bank in such matters, by simply signing his own name, is so general, that the practice has reduced the custom to the certainty of a law, as it is every-whore understood that, in such cases, whether he describes himself as cashier or not, he is an altet ego of the bank. ■ His signature is a recognized mode in which a bank may become a party to commercial paper; and the obligation so created is that of the bank and not of the cashier.

There is a marked distinction between this case and those in which the question just discussed usually arises. Ordinarily the principal is some third person, not otherwise related to the bill, but here it is claimed that he is the drawer, and if the acceptance be treated as his, and not that of Robinson, the paper loses its character of a bill of exchange and becomes a promissory note only, and the payee, instead of having a fund appropriated to the payment of his demand or secured by the obligation of an acceptor, is reduced to the personal obligation of the drawer only. This aspect of the case, as unfavorable to the defense, has been commented on, and does not require to be further enlarged.

The cases, however, to which we have adverted, show that a promissory note signed by an agent, in the manner this acceptance was made, becomes the individual liability of the agent, and would be decisive of this case, though the principal were a third party, unless an acceptance differs in principle from the making of a note, as does an indorsement. It seems that an indorsement may be explained by parol, as pointed out by Welch, J., in Collins v. Buckeye Fire Ins. Co., 17 Ohio St. 224. The indorsement being a mere transfer of title, the obligation arising outside of it may be changed without affecting the indorsement itself. But the obligation of an acceptor is an express one; it is to pay the bill at its maturity according to the order contained in it. The language of the books is that the acceptor of a bill is as the maker of a note, and that when the drawer accepts he comes at once under an absolute obligation to pay the bill according to its tenor. 1 Par. N. & B., sec. 2, chap. 4. No distinction between a promissory note and an acceptance exists in this regard, and so it has been held, that the legal effect of an acceptance, as an absolute contract to pay, can not be varied by parol. Heaverin v. Donnell, 7 Smedes & M. 244; s. c., 45 Am. Dec. 302; Adams v. Wordley, 1 M. & W. 374; Hoare v. Graham, 3 Camp. 57; 1 Par. N. & B. 301; Cummings v. Kent, 44 Ohio St. 92.

Judgment affirmed.

Folleto?, J., dissents.