author: White, J.

text:
    The Union Central Life Insurance Company v. James P. Curtis.
    1. The condition in a mortgage given to secure a promissory note, payable on demand, provided that if the note should be paid “ within sixty days after such demand,” the mortgage should be void: Held, that demand of payment of the note was necessary to work a breach of the condition ; and that, until sixty days had elapsed after demand, no right of action accrued on the mortgage.
    2. A mortgage was given to an insurance company carrying on business under the act of April 16, 1867 (S. & S. 218). The condition of tbe mortgage provided for demand of payment of tbe note secured by the mortgage, by the auditor of state, for the company. It was not a condition to the taking effect or validity of the mortgage, that it should be deposited with the auditor, nor that, if it should bo so deposited, it might not be surrendered to the company or its assigns, as provided for in the statute: Held, that, construing the mortgage in connection with the statute, the demand might be made by any party to whom the mortgage belonged, and who was entitled to collect the money it was given to secure; and that the provision requiring- the demand to he made by the auditor was intended to he operative only in case the mortgage should be deposited with him, and remain under his control, in accordance with the provisions of the statute.
    3. Where a stockholder executed to ífie company his note and mortgage in payment of his stock subscription, the stock, under the statute, must be regarded as paid in, and the note and mortgage as given for money loaned or invested by the company. The liability of the stockholder on the note and mortgage is no. less than that of any other borrower; nor do his rights as a stockholder stand on any better footing than those who paid for their stock, but borrowed nothing from the company. '
    Error to tbe District Court of Butler county.
    The original action was brought by tbe Union Central Life Insurance Company against James P. Curtis, to foreclose two real estate mortgages executed by said Curtis to tbe Home Mutual Life Insurance Company, of Cincinnati. One of tbe mortgages was dated November 16,1867; the other, December 24, 1867, and each was given to secure a promissory note of eight hundred dollars, executed by said Curtis to said Home Mutual Company.

      The condition of defeasance in the first mortgage is as follows:
    “Provided, nevertheless, that if the note for the sum of eight hundred dollars, bearing date of November 14, 1887, signed by James P. Curtis and Geo. L. Masters, and payable to the said Home Mutual Life Insurance Company, on demand, shall be paid, with interest, within (60) sixty' days after such demand is made by the auditor of the State of Ohio, for the said Home Mutual Life Insurance Company, then these presents shall be void.”
    The condition contained in the second mortgage is similar, differing only in the description of the note it was given to secure.
    These notes and mortgages were assigned and transferred by the Home Mutual Company to the plaintiff, the Union Central, in pursuance of a written agreement entered into between the two companies, bearing date October 13, 1871, by which the Home Mutual transferred all its assets to the Union Central, and the latter, in consideration, assumed the risks and debts of the former. The agreement is fully set out in the case of Ehrman v. The Union Central Life Insurance Co., heretofore reported, ante p. 324. The petition averred demand of payment, by the auditor, according to the conditions in the mortgages, and that the sixty days therein provided for had elapsed.
    The defendant answered, settiug up five defenses, the third of which was withdrawn before the trial.
    He also, on behalf of himself and other stockholders of the Home Mutual Company, who might consent thereto, interposed matters by way of cross-petition, upon which he asked to have the agreement between the two companies set aside and declared void, and to have an account taken of the assets and liabilities of the Home Mutual Company, and, after applying the assets to the discharge of such liabilities, to have the surplus, if any, distributed among the stockholders.
    The cross-petition was also withdrawn before the trial.

      The remaining defenses were, in substance, as follows:
    1. That the notes and mortgages were deposited with auditor of state, as security for policy holders; that the withdrawal was in violation of law — were not withdrawn for any purpose for which same were deposited with the auditor; that the plaintiff is not owner of the notes; that the auditor never made any call or demand for payment.
    2. That defendant is now, and was on 13th October, 1871, a stockholder in the Home Mutual Life Insurance Company ; that, under a pretense of reinsurance of its risks, the Home Mutual agreed to transfer all its property and assets to the Union Central, which latter agreed to pay all the debts and liabilities of the Home Mutual (except those specified in agreement); and that plaintiff’s only title to the notes and mortgages is by virtue of said agreement. That said agreement was not, in fact, a contract for reinsurance, but was a shift to obtain all the property of the Home Mutual by undue means — to take up the policies issued by the Home Mutual, and issue its own instead, and thereby absorb its property and business. All which it has done, and which is a fraud upon him as a stockholder. That the contract by which plaintiff acquired title to the notes and mortgages was fraudulent, ultra vires, against public policy, and invalid.
    3. That plaintiff is only authorized to do a life insurance business, has no power to purchase notes and mortgages from the Home Mutual, by reason whereof the purchase was unauthorized and void.
    4. That the notes were given for balance due on capital stock in the Home Mutual held by defendant; that the sole purpose between the Home Mutual and Union Central companies, in transferring said notes and mortgages, was to put an end to the corporate existence of the Home Mutual, to destroy forever its business, and make its stock valueless. That the only consideration for the transfer was that plaintiff should assume and pay the debts of the Home Mutual, and become possessed of all its business, policies of insurance, and other assets. Defendant avers that thereby his said stock did become wholly valueless, and its business transferred to plaintiff', and the Home Mutual ceased to do business, and its existence as a corporation practically ceased, all which was without defendant’s consent.
    The allegations of the answer were denied by the reply, except the averment that the plaintiff was a stockholder.
    On the trial, the court found the issues in favor of the defendant, and dismissed the petition.
    A motion for a new trial was made, on the ground that the finding was against the evidence and against the law. The motion was overruled, and a bill of exceptions duly taken, setting out all.the’evidence. The present petition in error is prosecuted to reverse this judgment.
    The following indorsements were on the first mortgage:
    “ Cincinnati, 0., November 29, 1872.
    “ The within mortgage is assigned to the superintendent of Ohio Insurance Department, in trust for the Home Mutual Life Insurance Company, in accordance with an act passed April 27, 1872. . John Cochnower,

      President Home Mutual Life Ins. Co.”

      “ Columbus, January 8, 1874.
    “ The within mortgage is hereby reassigned to the Home Mutual Life Insurance Company.
    ¥m. E. Church, Superintendent.”

    The following indorsement was on both mortgages:
    “ I hereby declare the payment of this note necessary to discharge the liabilities of the Home Mutual Life Insurance Company, and call for payment thereof. Such payment to be made to John M. Phillips, president Home Mutual Life Insurance Company, or his order.
    “ May 16,1872. Jas. Williams,

      Auditor of State of Ohio.”

    There was no evidence that demand of payment of either of the notes had been made, either by the auditor, superintendent of insurance, or by the Home Mutual Company, or the plaintiff, before the bringing of the suit.
    It appears from the testimony that at the date of the agreement between the companies of the 18th of October, 1871, the Home Mutual Company was insolvent, and that its liabilities exceeded the value of its assets about fifty thousand dollars ; that a large amount of death claims existed'against it, which were due, and which it was unable to pay, and that its credit was bad.
    It also appears that all the policies of the Home Mutual Company have been taken up by the Union Central Company, or exchanged for its own policies, and that the securities deposited with the auditor of state and the superintendent of insurance were not withdrawn until the liabilities of the Home Mutual Company were discharged; that the Union Central Company has fully performed the said agreement on its part, and has paid off the liabilities of every kind of the Home Mutual Company, including nearly six millions of insurance, which was outstanding at the date of the agreement.
    It likewise appears that the Home Mutual Life Insurance Company was dissolved by decree of the Court of Common Pleas of Hamilton county, in January, 1877, and a receiver appointed for said company.
    The notes secured by the mortgages sued on were given for unpaid balances on the stock subscription of the defendant to the Home Mutual Company, and he never sold or disposed of his stock.

      Matthews, Ramsey, $ Matthews and Israel Williams, forthe plaintiff’ in error.

      Thomas Millihin and C. D. Robertson, for defendants in error.
    [Counsel in this case submitted briefs, making the points here decided and also substantially the argument reported in the Ehrman case, ante, p. 324. — Rep.]
   White, J.

Several questions are presented in this ease which did not arise in the ease of Ehrman v. The Union Central Life Ins. Co., ante, p. 324.

As to the questions arising on the first defense.

It appears from the evidence that the first mortgage was assigned to the superintendent of insurance under the act of April 27, 1872, and that it was reassigned by him to the Home Mutual Company on January 3, 1874. It does not appear that the second mortgage was ever deposited or assigned, either to the auditor of state, under the act of April 16, 1867 (S. & S. 218), or to the superintendent of insurance, under the act of April 27, 1872 (69 Ohio L. 150).

Under the act last named (chap. 2, § 9), the superintendent was authorized to permit the company to withdraw any part of the securities deposited, on depositing other securities of equal value ; and by section 22 of the act of March 12, 1872 (69 Ohio L. 39), he was authorized to deliver up to the company, or its assigns, any portion of such securities, on being satisfied that an equal portion of the debts and liabilities of the company had been satisfied, provided the amount of the securities retained was not less than twice the amount of the remaining liabilities.

Like authority was vested in the auditor of state by the act of April 16, 1867.

There is uo evidence that the superintendent of insurance was not warranted in reassigning the mortgage to the Home Mutual Company; and in the absence of such evidence, it will be presumed that the reassignment was properly made, irrespective of the affirmative evidence showing that the indebtedness and liabilities of the company have been discharged.

As to whether a demand of payment was necessary, and, if so, by whom such demand should be made.

The action was brought on the mortgages alone, and to subject the mortgaged premises to sale. It seems clear to us that demand of payment of the notes was necessary to work a breach of the condition in the mortgages. The condition in the mortgage required sixty days to elapse, after demand, before the mortgagor would become in default, and until default no right of action would accrue on the mortgage. Demand is necessary, in order to determine when the sixty days are to commence.

In determining by whom the demand may be made, reference should be had to the statute, under which the company was operating, and under which the mortgages were executed to the company. It was not made a condition to the taking effect or validity of the mortgages that they should be deposited with the auditor of state; nor that, if they should be so deposited, they might not be surrendered to the company “ or its assigns,” as provided for in the statute. Construing the mortgages, therefore, in connection wnth the statute, we think the demand may be made by any party to whom they belong and who is entitled to collect the money they were given to secure; and that the provision requiring the demand to be made by the auditor was intended to be operative only in case they should be deposited with him, and remain under his control, in accordance with the provisions of the statute.

The proposition relied on in this case, that the plaintiff' acquired no title to the notes and mortgages, by reason of the ultra vires character of the agreement entered into by the companies on the 13th of October, 1871, was determined in the negative in the case of Ehrman, already referred to. It was also held in that case that the mere fact that the party giving the note was a stockholder in the Home Mutual Company, would not affect the right of the Union Central Company to recover on the note, in the ab7 senee of any showing that the transfer of the note was to his injury or prejudice as such stockholder.

The only remaining question, not determined by that ease, arises on th.e fifth defense.

It appears from the evidence given under the issue raised on this defense, that the notes secured by the mortgages now in question, were given for unpaid balances on the stock subscription of the defendant, -to the Home Mutual Company.

The evidence also shows that the purpose of the companies in entering into the agreement of the 13th of Oetober, 1871, was not, as averred in this 'defense, to destroy tbe business of tlae Home Mutual Company, and to make its stock valueless; nor did the stock become of no value by reason of the transfer's made in pursuance of the agreement. The Home Mutual Company was insolvent, and unable successfully to further prosecute its business. The purpose of the company in entering into the agreement appears to have been to pay its debts and to save its stockholders from further liability; and the performance of the agreement by the parties appears to have had that effect. Instead of the stockholders being injured by the transaction, the evidence shows them to have been largely benefited.

The only remaining question, therefore, on this branch of the case, which distinguishes it from the case of Ehrman, is, whether the fact that the notes and mortgages were given for the consideration above stated, places the defendant in a better situation as respects his liability thereon, than he would have been in, had they been given for money borrowed of the company.

Counsel for the defendant contend that this suit is to be regarded as a suit against a stockholder on his stock subscription ; and not as a suit against a debtor of the company for money borrowed.

The statute under which the company was operating provides as follows: “No company shall be organized under this act with a less capital than one hundred thousand dollars. The whole capital of such company shall, before proceeding to business, be paid in and invested in treasury notes, or in stocks of the United States, . . . or in mortgages or unincumbered real estate within the State of Ohio, worth double the amount loaned thereon.” . . .

Under this statute, as between the parties to the transaction, the stock -must be regarded as paid in, and the notes and mortgages as given for money loaned or invested by the company. Such was doubtless the understanding of the parties at the time of the transaction. It is the same, in effect, as if the stock subscription bad been paid to the company, and the money had then been loaned to the defendant on the mortgage security. The liability of the defendant on the mortgages is no less than that of any other borrower; nor do his rights as a stockholder, stand on any better footing than those who paid for their, stock, but borrowed nothing from the company.

It is to be implied from the journal entry that the court found all of the issues in favor of the defendant. In thus finding the court erred. All of the issues should have been found for the plaintiff, except the one relating to the demand of payment. That issue was properly found for the defendant. The findings, therefore, upon all the other issues are set aside; and the judgment is so modified as to show that the action is dismissed on the ground that it was prematurely brought.


source: Caselaw Access Project

author: McIlvaine, J.

license: Public Domain

text:
    The Union Central Life Insurance Company v. Elijah P. Jones.
    1. “Where the condition of defeasance in a mortgage is that the note secured thereby be paid within sixty days after demand, and a demand is made by a person claiming to act as agent for the owner, but whose agency is denied, the mere possession of the note by the party making demand, is not proof of his agency.
    2. “Where a subscription to the stock of a corporation is paid by the note of the subscriber, money subsequently paid by the stockholder to the corporation for the purpose of repairing its capital stock, un der an agreement that as between the corporation and its creditors the payment is a donation, but as between the stockholders a debt, and upon the further agreement that such payment is to be regarded as a satisfaction pro tanto of the individual liability of the stockholder to creditors, can not, after the corporation has become insolvent, be set off against the' stock note.
    8. “Where such insolvent corporation assigned all its assets and property in consideration that the assignee would pay all its debts and save the stockholders from individual liability, and the assignee brings divers actions to collect the assets assigned, in one of which the receiver of the corporation is made a party and files a cross-petition making other debtors on assigned claims parties, and prays that in tbe event the assignee, by reason of the invalidity of the assignment, is not entitled to recover, then that judgment be rendered in his favor against the debtors of the assigning corporation: Held, that the pendency of such cross-petition is no defense to the prosecution of other actions by the assignee to collect the assigned assets.
    Error to the District Court of Hancock county.
    The original action was brought to foreclose a mortgage executed to secure the payment of a promissory note given by the defendant, the mortgagor, to the Home Mutual Life Insurance Company, in payment of stock subscription.
    The plaintiff below sued as assignee of the note and mortgage. The mortgage deed was upon this express condition :
    “ Provided, nevertheless, that if the note for the sum of eight hundred dollars, bearing date August 8, 1867, signed by E. P. Jones and R. B. Hurd, and payable to the said Home Mutual Life Insurance Company on demand, shall be paid, with interest, within sixty days after such demand is made by the auditor of the State of Ohio, for the said Home Mutual Life Insurance Company, then these presents shall be void.”
    To this action divers defenses were set up, viz.:
    1. It was denied that the plaintiff had any interest in or title to the note or mortgage, by reason of the fact that the transfer from the Home Mutual Life Insurance Company to the Union Central Life Insurance Company was ultra vires as to both companies, and, therefore, absolutely null and void.
    2. It was also denied, that a demand for the payment of the note had, at any time before the commencement of the action, been made by the auditor of state or any other person authorized to make such demand.
    The following defenses were also set up, to wit, that previous to the assignment of the note and mortgage to the plaintiff by the Home Mutual Company, the defendant had paid, to the Home Mutual, four hundred dollars. This payment was induced by the action of the Home Mutual Company, viz.:
    [Extract from Minutes of Home Mutual Life Ins. Co., of June 13, 1871.}
    “ Whereas, By reason of continued heavy losses which the company has sustained, the recent act of the Michigan legislature, requiring a deposit of $50,000 United States or state bonds, in order to enable the company to continue to-do business in that state; the raising of the valuation on-policies in this state from four and a half per cent, to four per cent., and thereby impairing or reducing the capital of the company nearly $50,000, it has become necessary that some-action shall now be had, or some new method adopted, in order to enable the company to continue in business, and' entitle it to the confidence and respect of the community therefore,
    “Resolved, That the board of directors now present to-the stockholders of the company the alternative either to pay in an amount in cash equal to fifty per cent, of the-amount of the reduced certificates of stock held by them respectively, or to pay fifty per cent, on their respective-certificates of reduced stock to some person who will assume and take their place in the company, and return to-them their notes and mortgages now on deposit, at Columbus, with the state auditor, upon the receipt of the fifty percent. of their said certificates of reduced stock, and thereby release them from all further liability.

      “Hesoloed, That, in the opinion of the board of directors,, should the stockholders fail to comply with either of the foregoing alternatives, the only course then left to pursue,, will be to reinsure its policies upon the most favorable terms, and wind up its affairs and business, which will, in the opinion of the board, not only take the full amount off the notes and mortgages on deposit with the state auditor, but will require, from the stockholders, the payment of an additional amount.”
    [July 13, 1871.]
    “Resolved, That all the money furnished the company by the stockholders, under and in pursuance 'of the action of the hoard of directors of June 13, 1871, is to be treated as .•a donation as to all policy holders and creditors, and k to ■be treated as a loan as between the stockholders. Unanimously adopted.”
    [August 1, 1871.]
    “ On motion, it was unanimously resolved that the payment of E. P. Jones of fifty per cent, upon his forty shares of reduced stock in this company, amounting to four hundred dollars, made to the company under the provision of the resolution of this board, under date of June 13, 1871, if not returned, on demand, to said E. P. Jones, is hereby declared (so far as said directors, in their official capacity .as a board of directors of said company, have power so to do) be in satisfaction to the amount of said sum of four hundred dollars, of the individual liability of said E. P. Jones for the debt of said company under the laws of the State of Ohio, providing for the individual liability of stockholders iu incorporated companies created under the laws ■of the State of Ohio.”
    The amount paid under these circumstances, was claimed ■•as a counterclaim against the sum secured by the mortgage.
    Also, that in September, 1868, the defendant, who was the principal debtor in said note, before the transfer of the note and mortgage to plaintiff loaned the Home Mutual ■Company one hundred dollars, which was to have been repaid or credited upon the note.
    Also, that in January, 1868, the Home Mutual Company declared a dividend to its stockholders, to be credited upon the stock notes, whereby the defendant became and was ■entitled to a credit of twenty-one dollars and thirty-seven ■cents upon said note of that date.
    By a supplemental answer, the following was set up by way of defense, namely, that after the commencement of the original action, one John Cochnower, a receiver of all the property of the Home Mutual Life Insurance Company, duly appointed as such, was made a party to an action by the plaintiff against James Turner, pending in the Superior Court of Montgomery county, wherein said receiver filed an answer and cross-petition, making the defendant, Elijah E. Jones, a party who was duly served with summons, in which cross'-petitiou of said receiver, the circumstances of the transfer of the defendant’s note and mort- . gage by the Home Mutual Company to the Union Central Company, as part of the entire assets and property of the II ome Mutual, were set forth. And it was also averred, in said cross-petition, that doubts had arisen as to the validity of such transfer ; whereupon, said receiver prayed that, in ■case the Union Central Life Insurance Company should be held not to be entitled to the assets and property so transferred by the Home Mutual Life Insurance Company, that judgment might be rendered in his favor against the debtors of the Home Mutual, to the end that he, as such receiver, might administer his trust, etc., and that said action in said Superior Court of Montgomery county was still pending.
    Judgment having been rendered in the court below in favor of the defendant, this proceeding is prosecuted by the plaintiff to reverse the judgment below.

      Matthews, Ramsey & Matthews, and J. A. Bope, for plaintiff in error.
    J. F. Burket, for defendant in error.
    (Counsel in this case submitted briefs discussing the points here decided and making, also, substantially the same argument as is reported in the Fhrman case, ante 324. — Rep.)
   McIlvaine, J.

The principles upon which the right of the plaintiff, as assignee of the Home Mutual Life Insurance Company, to enforce the foreclosure sought, must be resolved in its favor, are fully stated in Ehrman v. Union Central Life Insurance Co., ante p. 324.

That a condition in a mortgage, like the one before us, is not broken, except by a failure to pay w'ithiu sixty days after demand of payment is duly made upon the mortgagor, although such demand may be made by any person entitled to collect.the money clue on the note and mortgage, has been decided and reported in Union Central Life Insurance Co. v. J. P. Curtis, ante p. 343.

In the case before us, the testimony showed that, more than sixty days before the action was commenced, one Harris, who had possession of the note, and claimed to be the agent of the plaintiff, made demand of payment from the makers ; but, inasmuch as his authority as such agent was denied, and there was no testimony offered tending to show his agency as a matter of fact, a majority of the court (myself doubting) are of opinion that the mere possession of the note-by Harris, and his claim of agency, did not prove his authority to make the demand for the plaintiff.

The counterclaim, or set-off, of four hundred dollars paid by the defendant to the Home Mutual Company, under the resolutions of June 13, July 13, and August 1, 1871, can not be maintained. The Home Mutual Company being insolvent — that is to say, the value of all its property assigned to plaintiff being insufficient to pay its creditors— there were no assets to be divided between the stockholders ; and, as to its creditors who are represented by the plaintiff, the payment of the four hundred dollars did. not create an indebtedness against the assigning corporation, under the resolutions of June 13 and July 13, 1871.

The defendant can take nothing under the resolution of August 1, for the plain reason that no individual liability is sought to be enforced against him. In fact, he was relieved from such liability by the contract under which the note and mortgage were transferred to the plaintiff, it having been shown by the proof that all the liabilities of the Home Company have been discharged by the Union Central Company. As to the alleged off-sets of one hundred dollars paid in September, 1868, and the dividend of January, in the same year, no question of law arises. If the facts be as stated in the answer, no reason appears why these sums should not be allowed to the defendant.

As to the pendency of the cross-petition of the receiver of the Home Mutual Company, in the Superior Court of Montgomery county, it is enough to say that the receiver makes no claim inconsistent with the plaintiff’s right to recover.

The judgment of the district court will be so modified as to show that the petition is dismissed upon the sole ground that no action will lie to foreclose the mortgage, until sixty days after demand of payment of the debt has been duly made.

Judgment accordingly.


author: Boynton, J.

text:
    The Union Central Life Insurance Company v. Nicholas Curtis.
    In the condition of a mortgage given to secure the payment of a promissory note, payable on demand, it was provided that, if the mortgagor should pay said note, or cause the same to be paid, the mortgage deed should be void: Held, that demand of payment of the note before suit was not a necessary condition to a right of action on the mortgage.
    Error to the District Court of Butler county.
    The original action was brought by the plaintiff in error against the defendant in error, to foreclose a mortgage given by the defendant, on certaiu real estate therein described, to the Home Mutual Life Insurance Company, to ■secure the payment of a promissory note in the following words and figures:
    "$400. Cincinnati, November 19, 1867.
    “ On demand, I promise to pay to the order of the Home Mutual Life Insurance Company, of Cincinnati, four hundred dollars, at their office, with interest at six per cent, per annum, until paid (said interest to be paid annually), value received. - N. Curtis.”
    This note was indorsed by the Home Mutual Company to the plaintiff. The condition of defeasance contained in the mortgage was as follows :
    “ Provided, nevertheless, that if the said Nicholas Curtis shall pay, or cause to be paid, his certain promissory note, of which the following is a copy—
    “‘55400. Cincinnati, November 19, 1867.
    “On demand, I promise to pay to the order of the Home Mutual Life Insurance Company, of Cincinnati, four hundred dollars, at their office, with' interest at six per cent, per annum, until paid (said interest to be paid annually), value received. (Signed,) N. Curtis.’
    then these presents shall be void.”
    It appeared that no demand of payment of the note was-made before the action was brought on the mortgage, without which it is contended that the action was prematurely commenced. Aside from this, the case involved the same' questions that were considered and decided in The Union Central Life Insurance Co. v. Curtis, ante p. 343, and Ehrman v. Central Company, ante p. 324. The issues were-found in favor of the defendant in error, and judgment rendered accordingly. It is here sought to reverse such-judgment.

      Matthews, Ramsey $ Matthews and Israel Williams, for plaintiff in error.

      Thomas Millihin and C. D. Robertson, for defendant in erroi
    [Counsel in this case submitted briefs, making substantially the same argument as is reported in the Ehrman case-ante p. 324. — Rep.]
   Boynton, J.

The questions arising upon the issues found' by the district court, in favor of the defendant in error, other than the one involving the right to institute the action to foreclose the mortgage before making demand for payment of the note, were considered in The Union Central Life Ins. Co. v. Curtis, and in Ehrman v. The Central Co., ante, p. 324, 343, and decided adversely to the defendant. The grounds of the judgments there given will not be-restated here. The judgment of the district court must he reversed on the principles declared in those cases, unless the same can be sustained on the ground that the action was prematurely brought. The note to secure which the mortgage was given was payable on demand. The action was on the mortgage, and no demand for payment preceded its commencement. The question, therefore, is, was demand of payment of the note before suit a necessary condition to a right of action upon the mortgage. That an action would lie on the note-without a previous demand is settled in Hill v. Henry, 17 Ohio, 9, and Darling v. Wooster, 9 Ohio St. 517. Such also-is the rule in England. Norton v. Ellam, 2 M. & W. 460. Cases are to be found in which it is held that demand is necessary, but that the action itself is a sufficient demand. That there is something wrong in the reasoning by which such a proposition is supported becomes apparent the moment the-same is stated. No action can be brought upon any claim before due, and if demand of payment is prerequisite to the maturity of the claim, it must of necessity precede the commencement of the action. But' the question is not an open one in this state. The moment the note is delivered to the payee it is due, and in our opinion a right of action,, in equity, to foreclose a mortgage given to secure the payment of a note, so payable, arises at the same time, and upon the same conditions, as the right of action upon the' note, unless the parties have stipulated otherwise. Such a stipulation was contained in the mortgage sought to be foreclosed in the case first above cited. But in the defendant’s mortgage here there was no such stipulation. The conveyance was to be defeated if the note was paid or caused to be paid by the mortgagor. It is true that no-time for its payment was stated in the mortgage, but as the-note was payable at once, we think it fairly to be implied that the parties to the mortgage intended payment of the note at its maturity as a condition on which the conveyance was to be void. A right of action arose on the mortgage to foreclose the equity of redemption the moment the estate conveyed became absolute for non-performance of the condition, which, if performed, would have defeated the mortgagee’s title; and perceiving no reason to require a demand of payment to precede an action upon the mortgage, that does not with equal force apply to an action on the note, we hold that the same was unnecessary.

Judgment reversed and cause remanded for a new trial.


text:
    The Union Central Life Insurance Company v. Sutphin.
    "Where, in an action involving several issues of fact, the finding is in favor of the defendant on all the issues, when it should have been in his favor on one only, it is error for the court, on motion therefor, to refuse to set aside the finding on the issues so erroneously determined, where the effect of the judgment rendered on said issues is different from what it would have been if only rendered on the issue rightly determined, and where said judgment may prove prejudicial to the plaintiff.
    Error to the District Court of Butler county.
    The original action was brought by the plaintiff in error against the defendant to foreclose a mortgage executed by the defendant to the Home Mutual Life Insurance Company, to secure the payment of his promissory note for four hundred dollars, payable on demand to the Home Mutual Company, and given for a balance due for shares of the company’s capital stock. The note was indorsed by George L. Masters. The plaintiff sued as assignee of the mortgage debt. The condition of defeasance contained in the mortgage was as follows:
    “ Provided, nevertheless, that if the note for the sum of four hundred dollars, bearing date of November 21, 1867, signed by Carlton W. Sutphin and George L. Masters, and payable to the said Home Mutual Life Insurance Company, on demand, shall be paid, with interest, within sixty (60) days after such doihand is made by the auditor of the State of Ohio, for the said Home Mutual Life Insurance Company, then these presents shall be void."
    The petition alleged demand of payment of the note by the state auditor more than sixty days before suit. As a sixth defense to the action, the defendant set out an agreement with the agent of the plaintiff, that, in consideration of the assignment by the defendant to the plaintiff of twenty-five shares of the capital stock of the Home Mutual Company, the defendant’s liability on said note and mortgage should cease, and the same be surrendered to him. He further alleged on his part performance of said agreement.'
    This agreement the plaintiff by his reply denied.
    There were three other defenses interposed, and the cause, on appeal*, was submitted to the district court, which gave judgment, as follows: “ By consent of parties, the cause is submitted to the court to be tried upon the issues made by the pleadings, and the court having heard the evidence adduced and arguments of counsel, and being advised in the premises, does find upon said issues in favor of the defendant, and that plaintiff is not entitled to any of the relief prayed for in its petition. It is therefore ordered and adjudged by the court, that the petition of the plaintiff be, and the same is hereby dismissed.”
    A motion for a new trial on the ground, among others, that the decision of the court was not sustained by the evidence, was overruled, and bill of exceptions setting out all the testimouy taken, and made a p>art of the x’ecord. No evidence was given at the trial that any demand of payment of said note was made by the auditor of state, or by the plaintiff, before the action was brought. The testimony on the issue joined on the sixth defense above stated was in substance, as follows :
    The defendant, Sutphin, testified: “I was a stockholder in the Home Mutual Coxnpany. I had five hundred dollars stock. Dr. Peck, vice-president of the Union Central Company, came to me after the transfer to the Union Central, and asked me to surrender my said stock. He represented that I would get back my notes and a part of the money I had already paid, and be released froxn all obligations. I then transferred my stock to the Union Central, and delivered it to him upon this understanding.”
    Dr. Peck, on being called by the plaintiff,.testified as . follows:
    “I reside in Hamilton. I was vice-president and also 'agent of the Union Central Company in 1871-4. I went to Middletown soon after October, 1871, to procure the surrender of the stock of the Home Mutual. The object in ■getting the stock was to control the Home Mutual Company. We procured enough to control it. I did hot represent to Sutphin that he would' not have to pay his notes. I told him that he would be released from the liabilities of the Home Mutual Company, which were heavy, and which he was liable for as stockholder to an amount equal to the amount of his stock. I explained the nature of the agreement between the two companies fully. I had a copy of it with me.”
    N. "W. Harris, vice-president of the Home Mutual, testified that the company, at the date of the transfer of its-assets to the plaintiff, was insolvent.
    It appeared from the books of the Home Mutual Company, that, on June 13, 1871, the following preamble and resolutions were adopted:
    “ Whereas, By continued heavy losses which the company lias sustained; the recent act of the Michigan legislature, requiring a deposit of $50,000 in United States or state bonds, in order to enable the company to continue to do-business in that state; the raising of the valuation on policies in this state from four and a half to four per cent., and 1 hereby impairing or reducing the capital of the company nearly $50,000, it has become necessary that some action shall be now had, or some new method adopted in order to enable the company to continue in business and entitle-it to the confidence and respect of the community; therefore,

      “Resolved, That the board of directors now present to the-stockholders of the company the alternative either to pay in an amount in cash equal to fifty per cent, of the amount of the reduced certificates of stock held by them respectively, or to pay fifty per cent, on their respective certificates of reduced stock to some person who will assume and take their place in the company, and return to them their notes and mortgages, now on deposit at Columbus with the state auditor, upon the receipt of the fifty per cent, of their said certificates of reduced stock, and thereby release them from all further liability.
    “Resolved, That in the opinion of the board of directors,, should the stockholders fail to comply with either of the foregoing alternatives, the only course then left to pursue will be to re-insure its policies on the most favorable terms, and wind up its affairs and business, which will, in the opinion of the board, not only take the full amount of the-notes and mortgages on deposit with the state auditor, but will require from the stockholders the payment of an additional amount.”
    Not securing under these resolutions a sum sufficient to relieve its necessities, the Home Mutual Company, on the 13th day of October, 1871, assigned and transferred all its assets and property to the plaintiff, under and by virtue of the contract, a copy of which is set out in JShrman’s case, ante 324.
    The note and mortgage in controversy were and remained with others, on deposit with the superintendent of insurance, until January 3, 1874, when the same were reassigned to the Home Mutual Company by that officer. This is substantially all the evidence bearing on the alleged agreement to surrender to the defendant his note and mortgage.

      Matthews, Ramsey & Matthews, for plaintiff in error.

      Thomas Millikin, and C. D. Robertson, for defendant in error.
    [Counsel in this case submitted briefs making substantially the same argument as is reported in the Ehrman case, ante 324. — Rep.]
   Boynton, J.

It appears from the transcript of the journal entry, that the court, upon the trial, found the issues, five in numbef, in favor of the defendant. The issues joined, with the exception of the one arising upon the sixth defense stated in the answer, and the reply thereto, were of the same character, and gave rise to the same questions of law as those in Ehrman’s case, ante 324, and the case of the present plaintiff v. Curtis, ante 343.

It follows, from what was there held, that the motion to set aside the findings should have been granted, and the judgment placed solely on the finding that the action was prematurely brought, unless it can be supported by the finding under the issue joined on the sixth defense. Eor if the judgment is permitted to stand on the findings, as made, and should it be pleaded in bar to a subsequent action on the mortgage, great injury might result to the plaintiff, by giving to the defendant the benefit of a judgment or finding which ought not to have been in his favor.

In respect to the question arising on the sixth defense, we are satisfied that the alleged agreement of the plaintiff, through its agent, Dr. Peck, to surrender the note and mortgage to the defendant in consideration that he assign his stock in the Home Mutual Company to the plaintiff, was not established by the proof. The weight of the evidence, we think, was clearly the other way. All the evidence given by the defendant in support of the agreement alleged to have been made was, that Dr. Peck represented to him, in case he would transfer his stock in the Home Mutual Company to the plaintiff he would get back his note and a part of the money he had already paid, and be released from all obligations ; and that upon that understanding he transferred his stock to the plaintiff. This alleged representation Dr. Peck, in his testimony, denied, but admitted that he told the defendant that he would be released from the liabilities of the Home Mutual Company, which were stated to be large, and which, to an amount equal to his stock, the defendant was liable for as a stockholder. He further testified that he fully explained to the defendant the nature of the agreement between the two companies. That this explanation was given, and that the defendant was well informed of the natufe of the transaction between the two companies is not disputed. That he was aware of the insolvency of the Home Mutual Company, and of his consequent limited liability as a stockholder for its debts admits of no doubt. The sum then due on the note was nearly equal to the face value of the stock, while the stock itself was entirely worthless. Again, it is not unreasonable to suppose that the plaintiff, in assuming, as by the contract of October 13, 1871, it did, the liabilities of the Home Mutual Company, it intended to employ the assets received as a fund from which, to the extent they would go, to pay off and discharge the liabilities thus assumed.

The note and mortgage, from aught appearing, were permitted to remain for several years in the possession of either the superintendent of insurance or the plaintiff, without being called for or demanded, a fact entirely inconsistent with the claim that the surrender was agreed upon, as claimed by the defendant. . These facts and the inferences arising therefrom, in connection with the denial of the fact, by Ur. Peck, that such agreement was made, we think, were clearly sufficient to overcome the testimony of the defendant, and to entitle the plaintiff upon that issue-to a finding in its favor.

Judgment modified.


text:
    The Union Central Life Insurance Company v. Bonnell.
    Where, by the original condition in a mortgage, the debt secured by it was-payable sixty days after demand, a new agreement, extending the time-of payment to a day certain, when binding, has the effect, in equity, of modifying the original condition of the mortgage, to the same extent as if the terms of the new agreement were incorporated into the condition.
    Error to the District Court of Butler county.
    The original petition in this case was filed in the court of common pleas on the 12th of September, 1874.
    The pleadings and evidence in the case are the same as. in the case of the plaintiff in error against James P. Curtis {ante, p. 343), with one exception.
    The exception consists of an extension of time granted in this case for the payment of the note secured by the mortgage.
    The following is a copy of the note, with its indorsements :
    •“ 800.00. Cincinnati, November 19,1867.
    “ On demand, I promise to pay to the order of the Home Mutual Life Insurance Company, of Cincinnati, eight hundred dollars, at their office, with interest at six per cent, per .annum, until paid (said interest to be paid annually), value received. Daniel V. Bonnell.
    “ (Indorser,) Geo. L. Masters.
    “ Interest paid to January 1,1871. — J. W. Iredell, Jr., Sec.” “ Home Mutual Life Ins. Co. — John Cochnower, Pres’t.”
    The condition of defeasance in the mortgage is as follows :
    “ Provided, nevertheless, that if the note for the sum of •eight hundred dollars, hearing date of November 19, 1867, •signed by Dauiel V. Bonnell and Geo. L. Masters, and payable to the said Home Mutual Life Insurance Company, on demand, shall be paid, with interest, within sixty (60) days after such demand is made by the auditor of the State of ‘Ohio, for the said Home Mutual Life Insurance Company, then these presents shall be void.”
    The agreement for the extension of time is shown by the following proposition of the plaintiff in error, and the acceptance thereof by the defendant:
    “ Oeeice oe the Union Central Liee Insurance Company, “ South-east Corner Fourth and Vine street,
    “ Cincinnati, December 21,1871.
    “D. V. Bonnell, Esq. — Dear Sir: This company holds your demand note for $800, payable to the Home Mutual Life Insurance Company; said note is secured by mortgage. On the 14th of October, 1871, when said note was transferred to this company, in part payment for reinsuring the •outstanding risks of the Home Mutual Life Insurance Company, this company agreed to grant an extension of three years for the payment of all demand notes given by stockholders, secured by mortgage, on condition of an agreement, on their paid, to pay six per cent, interest per annum on same from 14th October, 1871. Please state whether you desire the extension, and will agree to pay the six per cent, interest from that date.
    “ Respectfully, J. M. Phillips, President.”
    “ Cincinnati, March 4,1872.
    . “ I hereby agree to accept the conditions expressed above, and pay six per cent, interest on the demand note given by me to the Home Mutual Life Insurance Company, and pay the interest annually. D. Y. Bonnell.”
    The issues were found for the defendant, and the petition was dismissed. The petition in error is prosecuted to reverse this judgment and set aside the findings.
    Matthews, Ramsey § Matthews, for plaintiff in error.

      Thomas Millikin and C. D. Robertson, for defendant in error.
    [Counsel in this case submitted briefs making substantially the same argument as is reported in the Ehrman case, ante, 824. — Rep.]
   White, J.

There was a variance between the averments in the petition and the evidence, in respect to the time at which the mortgage debt became due. No reference was made, in the petition, to the agreement for the extension of time. The petition counted on the original condition of the mortgage; but as the agreement for extension was in evidence, and as no objection was made on the ground of variance, the variance is to be regarded, under the code, ns immaterial. Hoffman v. Gordon., 15 Ohio St. 212.

The effect of the agreement of extension was to work a novation of the mortgage debt, as respects the time of payment. By the original condition of the mortgage, the debt was payable sixty days after demand. By the new agreement tbe principal became payable in three years from October 13, 1871, and the interest annually. The effect of the agreement, in equity, was to modify the original condition of the mortgage, to the same extent as if the terms of the agreement had been incorporated into the condition. As thus modified, the condition of the mortgage was for the payment of the interest annually, and the principal in three years from October 13, 1871.

At the commencement of the suit, two installments of interest were due; hence the suit was not prematurely brought, as was held to be the case in the action against Curtis. (Ante, p. 343.)

The other defenses were adjudged invalid in the case of Curtis; and the grounds of that judgment apply equally to this case, and need not be here repeated.

The judgment is reversed, the findings set aside, and the cause remanded for further proceedings.


author: Gilmore, C. J.

text:
    The State ex rel. Flowers v. The Board of Education of the City of Columbus.
    The city of Columbus is a school district of the first class. On the 15th of July, 1879, the committee on text-books made a report to the board of education, condemning the Cornell series of geographies, which had been adopted by the board as text-books on that subject more than three years previous to that time, and recommended for gradual introduction in their stead, a part of the Eclectic series of geographies. The report was laid over for action, and on the 12th of August, at a regular meeting of the board, the report was taken up, and a proposition was then received from H. "W. Derby & Co., containing terms as to tbe prices upon which they would furnish Harpers’ geographies for the use of the schools. Thereupon the report was amended by substituting tbe name of Harpers’ geographies for that of the Eclectic series, and the report as amended was adopted by the board, and thereupon the board adjourned, no motion to reconsider having been made. On the 26th of August, the board, by a vote of six to five, assumed to reconsider its action of the 12th of August, and six of the eleven members of the board now claim that this action left the Cornell series as the text-book in the schools, and refuse to permit the child of the relator, the latter being a resident tax-payer of the school destrict, to use Harpers' geographies in the schools: Held, 1. That the action of the board on the 12th of August, 1879, was, within the meaning of section 52 of the school law (70 Ohio L. 209), an adoption as of that date of Harpers’ geographies as the text-books to be used in the schools on that subject. 2. That there could be no change in such text-books within three years after that date, without the consent of three-fourths of the members of the board, given at a regular meeting thereof. 3. By the action of the board on the 12th of August, Cornell’s geographies are to be gradually excluded, and Harpers’ geographies to be gradually introduced into the schools, so that no pupil will be required to purchase a new book who already has the old. 4. That Harpers’ geographies were adopted in connection with the proposition of H. W. Derby & Co., dated August 12, 1879, the terms of which, as to prices, are to be considered as conditions upon which they were adopted. 5. That the action of a mere majority of the board on the 26th of August, 1879, did not rescind or otherwise affect the action of the board on the 12th of August, 1879, and the determination of the last-named date is still in full force. 6. It was the duty of the board to carry into effect its determination of August 12, 1879, and this duty may be enforced by proceedings in mandamus on the application, of the relator.
    Proceedings in mandamus.
    The facts necessary to an understanding of this case are as follows : The city of Columbus, for school purposes, is a city district of the first class.
    The board of education consists of eleven members.
    There is a superintendent of the public schools of the city, who is appointed by and acts under the instructions of the board of education.
    The schools of the city are graded into eight designated grades, and high school. In three of the designated grades geography is taught by the aid of text-books on that subject.
    Eor many years prior to August, 1879, the Cornell series, consisting of a Primary, Intermediate, and Physical Geography, had been the text-book on this subject in use in the public schools of the city.
    At a regular meeting of the board, held July 15, 1879,. the committee on text-books made a report to the board,. which, so far as it relates to text-books on geography, is as follows:
    “ The undersigned members of the committee on textbooks, beg leave respectfully to recommend the following addition to and changes in the text-books now in use in our public schools, with their reasons for the same : (Omitting the first and second, which relate to other subjects.)
    “ 3. Eor several years there have been serious complaints made by our very best teachers of the subject of geography of the text-book in use. It is alleged that the methods are old, the maps and illustrations behind the time, and the general make-up of the book unattractive, and therefore uninteresting, and at the same time the cost is fully equal to the newest and best books recently published.
    “By an examination of the books in use, the committee find that the complaints of the teachers are well founded. Other series of text-books on this subject have been in the hands of other members of the board of education, and have, no doubt, been examined with care and attention as well as by the members of the committee. In the selection to be made, the committee had to take into consideration the age and capacity of the children to be supplied, and the time it was proper to devote to this subject. The textbook to be selected must be for children between ten and twelve years of age, and the quantity and quality must be adapted to their comprehension, and within a given time. The committee, keeping these points in view, and also the best methods of presenting the subject, the accuracy of the maps and illustrations, the adaptation of the stylo of composition to children, the cost of the books, and the general appearance of the same, recommend as the most suitable for adoption the Intermediate, or No. 2, and the Primary geographies of the Eclectic series, published at Cincinnati, Ohio, by Van Antwerp, Bragg & Co.
    “ The committee is conservative, and is slow to recommend a change, although demanded by the good of the schools, and would not, if it imposed an additional expense ■upon the patrons of the schools. It is recommended that no pupil be required to purchase a new book who already has the old. That the introduction be gradually made upon the following prices: Primary, 45 cents, and Intermediate, or No. 2, 90 cents. Exchange for books now in use, 30 cents for Primary, in addition to old book, and 60 cents for No. 2, in addition to old book. The people will be at no additional expense whatever, but, in all respects, the gainers in the change.
    “ The committee have carefully considered the whole subject, in view of the best interests of the schools.”
    The report was received, and that part of the report referring to new geographies was laid over for two weeks. No further consideration of the subject was had, until the regular meeting of the board, on the 12th of August, 1879, when, on motion, the report was taken up.
    Mr. Loving, a member, thereupon presented the following communication from H. W. Derby & Co., of Columbus :
    “ Columbus, Ohio, August 12, 1879.
    “ To the Board of Education:

    “Gentlemen: — We will furnish Harpers’ Introductory Geography and Harpers’ School Geography, forming a complete series, for use in the public schools of Columbus, at the following prices :
    Exchange. Introduction.
    Harpers’ Introductory...................$0 30 $0 45
    Harpers’ School........................... 60 94
    “After introduction, we will furnish our geographies to the book dealers of this city, at such prices as will enable them to retail the Introductory at $0.65, and the School Geography at $1.30, realizing thereby a fair and reasonable profit.
    “We guarantee that the present superior excellence of our books shall be maintained during their use in your schools; and that there shall be no advance in prices' during the period of their adoption. School patrons shall also have the benefit of any reduction in prices that may hereafter be made. H. W. Derby & Co.” ■

      "Whereupon, Mr. Andrews, one of the members of the board, moved that the name of Harpers’ geographies be-substituted in the report of the committee for that of the Eclectic series of geographies, and the question being upon the substitution of Harpers’geographies in the report for the Eclectic series, the vote resulted as follows :

      Teas. — Messrs. Andrews, Beck, Hardy, Loving, Neil, Siebert, and Olnhausen. A

      Nays. — Messrs. Eugeroff, Huff, Palmer, and Walcutt.
    And thereupon, Mr. Loving, a member of the board, moved that the report of said committee on text-books, as amended, be adopted, and the vote thereon resulted as follows :

      Teas. — Messrs. Andrews, Beck, Hardy, Huff, Loving, Neil, and Olnhausen.

      ■ Nays. — Messrs. Palmer and Walcutt.
    • . No motion to reconsider this action of the board was made at that meeting.
    Subsequently, at a regular meeting of the board, held on the 26th of August, 1879, Mr. Neil, a member, offered this resolution: “Resolved, That so much of the action of the board of education, at its last meeting, on the report of the committee on text-books, as relates to the adoption of Harpers’ geographies, be reconsidered.” The vote on the resolution resulted as follows :

      Yeas. — Messrs. Engerhoff, Huff, Neil, Palmer, Walcutt, and Olnhausen — 6.

      Nays. — Messrs. Andrews, Beck, Hardy, Loving, and Siebert — 5.
    This meeting was not a continuation or adjourned session of the meeting held on the 12th of August, 1879. The proceedings above referred to all took place during the summer vacation of the schools, which re-opened for the fall term on the 1st of September, 1879.
    The relator is, and for many years has been, a resident citizen and tax-payer of the city of Columbus and of the city school district, and has been and is now sending one of Ms children, of school age, to one of the public schools of the city.
    Shortly after the adoption of Harpers’ geographies by the board, on the 12th of August, the relator purchased and paid for Harpers’ geographies, and wishes his child to use the same as text-books on that subject, in the school she is attending; and other patrons of the schools have purchased Harpers’ geographies for their children, and desire that they may be permitted to use them as text-books on that subject, which the superintendent refuses to permit them to do.
    An alternative writ has been issued, commanding the board of education and superintendent to allow the relator’s child and all other pupils in the schools to use Harpers’ geographies as text-books so long as they shall attend those grades in which geography is required to be taught.; or that they show cause why they do not do so. The board of education has returned the writ accompanied by its answer. Mr. Stevenson, the superintendent, has made a separate answer and return,-in which he says that he holds his appointment from, and acts under the instructions of, the board, and is willing to obey the orders of this court.
    A reply to the answer of the board has been filed.
    Harrison, Olds & Marsh ; L. J. Critchfield, C. N. Olds, and Rankin & Heitman, for plaintiff.

      R. A. Harrison, for the 'relator, maintained, at the oral argument, the following propositions :
    I. Harpers’ geographies were “adopted” by the board as the text-book on geography in the schools under their control. By reference to lexicographers, it will be found that the word “ adopted,” as used in the fifty-second section of the school law signifies “ selected for use.” — Webster. That is, a present selection either for immediate or future use.
    A text-book, then, is “ adopted ” in the sense meant by the statute, when it is selected by the board for use in the schools. The actual introduction and use of the book in the schools is not necessary in order to constitute an adoption or selection of it by the board. If the legislature had so intended, the language of the statute would have been: “ No text-book shall be changed after its adoption and actual introduction into the schools.” The introduction and use of the book is the effect which is to follow the adoption of it by the board. It is no part of the act of adoption or selection of the board.
    When a board of education “ determines” that a particular text-book shall be used in the schools under its control, such text-book is “ adopted.”
    The period of three years must necessarily begin on the da}^ of the “ adoption ” of a given text-book, as shown by the record of the proceedings of the board. The three years do not begin on the day upon which it is actually introduced by use into this or that or the other school building. Such introduction into the different school buildings may be on different days. No record is kept of such matters.
    2. If we take a wider view, we shall arrive at the same conclusion. Had the language of the statute not been unambiguous, the mischiefs which the statute was enacted to remedy would show that the construction for which we contend is the true one.
    The objects of this limitation upon the power of boards of education to change text-books are obvious :
    One was to prevent the evils resulting to both patrons and pupils from frequent changes of text-books.
    Another was to remove, as far as practicable, inducements to publishers of text-books and their agents to make use of improper means and instrumentalities to bring about such changes.
    A third object of this limitation upon the power of the board was to enforce a thorough examination, upon the part of the board, of the relative merits of rival text-books before adopting either.
    , II. It has been suggested that, although Harpers’ geographies were adopted as text-books, Cornell’s geographies were not thereby superseded. There are several answers to this suggestion.
    ■1. The action of the board conclusively shows that they discarded Cornell when they adopted Harper. They adopted Harper in the place of Cornell, because the latter is now unfit for use, while the former is a good text-book. The report of the text-book committee and the action of the board prove this.
    2. When a text-book for a given study is adopted by the board without qualification or limitation, it becomes the sole text-book for such study. Otherwise, there would be the anomaly of two different text-books on the same subject in the same schools, and under the pretense of adopting several text-hooks on the same subject in the same schools, the statute restricting the power to change the text-books might be practically nullified. Perhaps a textbook may be adopted for use in the schools in one building, and a different text-book in the schools of different buildings. Even if this be so, which, we think, to say the least, is doubtful, it is plain that this can only be done when the adoption of each of such text-books is expressly limited and confined to some only of the schools. When the adoption is universal (as it is in this case) the use must necessarily be universal for the reasons above stated.
    III. The action of the board, by which Harper’s geographies were adopted, became operative at the conclusion of the meeting at which the action was taken.
    1Y. 1. The statutory limitation upon the power to change text-books in the public schools can not be evaded under color merely of a motion to reconsider at' a meeting held subsequently to that at which a text-book may be adopted. If the board can, by a bare majority, change a text-book, under the form of a motion to reconsider, at the first regular meeting after the adoption of such text-book, then it can effect such a change at the second or any subsequent meeting. The operation of the statute would be, by this shift and device, effectually defeated.
    2. The petition shows that one of the “ rules of business,” for the government of the board, provides that no “ textbook shall be changed within three years after its adoption, without the consent of three-fourths of the members of the board, given at a regular meeting. By the adoption of this rule for their government, the board cut off' the right, if such a right would have otherwise existed, of reconsidering the vote by which a given text-book was adopted, unless three-fourths of the members vote for such reconsideration.
    3. Even if this question were not to be decided by the statute, nor by the by-law of the board, but by the rules of parliamentary law, the board had no power to change these text-books under the disguise of a motion to “ reconsider.” Roberts’ Rules of Order, §§ 42, 60.
    4. The pretended change was null and void. See The People v. State Board of Education, 49 Cal. 684.
    V. Mandamus is the only legal and specific remedy.
    1. Education, in this state, is a matter of public governmental concern, and has been such from its organization. The school district was created as a public territorial corporation, and the duty of providing for the education of the children within its limits, is imposed on it by public statute law. And the board were elected, and their duties prescribed, and their powers conferred and defined, by force and dii’ection of the same law.
    2. The relator has a direct, personal, legal interest in the enforcement of the right created by the statute. This interest and right are as clear as the right of the parent of a child to compel the admission to the public schools of his child, when entitled to the benefits of such schools. The State, ex rel. Garnes, v. McCamon, 21 Ohio St. 198; Roe v. Deming, 21 Ohio St. 666; The People v. The Board of Education of Detroit, 18 Mich. 400.
    3. Mandamus will issue to compel the performauee, by a public corporation, of a public duty not due to the government as such, on the petition of a private person, without the intervention of the government law officer. Union Pacific

      R. R. Co. v. Hall, 91 U. S. 355; Pumphrey v. Mayor, etc., of Baltimore, 47 Md. 145.
    4. The board exercised their judgment or discretion in determining whether Hai’pers’ geographies shall be used as text-books in the schools under their control. Such determinatiou was in effect a judgment. It thereupon became their duty to carry such judgment into effect. When they determined that Harpers’ geographies should bo so used as text-books, they exhausted their discretion over the subject, unless their judgment should be reversed by a majority of three-fourths of the members of the board. Their duty to carry the judgment into effect then became purely ministerial; and mandamus is the proper process to compel the performance of such ministerial duty.
    5. The prohibition in section 52 of the school law is positive and imperative. It was enacted, principally, for the protection of the patrons and pupils of the public schools against the evils of the exercise of an unlimited and arbitrary discretion to change text-books by a bare majority of a board of education. Each patron and each pupil has, therefore, an immediate individual interest in the observance and enforcement of the prohibition. This interest, from its nature, creates a legal right in each patron and pupil. The statute makes the consent of three-fourths of the members of the board a condition precedent to the exercise of the power to change a text-book at any time within three years after its adoption. It is, therefore, a limitation of power. No principle is better settled than that acts done by a corporation, either public or private, in contravention of those restrictions on its powers which are in the nature of conditions precedent, or limitations shown by the express provisions of the statute under which it derives and exercises its powers, are in themselves unlawful. The power of the board as to changing text-books does not depend upon something to be done or determined by them, hut upon a condition required by statute. They can not dispense with nor evade the statutory condition. If they could, the provision enacted for the protection of the patrons and pnpils of the public schools would be rendered nugatory; and the power sought to be restrained, would be practically unlimited.
    6. The court is not asked to prevent the board from exercising their lawful discretion. They have no discretion to violate a provision of the very law under which they are organized, and which, in this particular, defines and limits their authority. We are not dealing with a question of discretion — not even with a wanton or capricious exercise of discretion. We have to deal with a naked question of power. The declaration of the sovereign will of the legislature excluded the exercise of any discretion in relation to the subject-matter of such declaration, by the inferior authority — the board. Hence, the action of the board, of which the relator complains, is unlawful, in breach of their trust, and in excess of their powers.

      Lorenzo English and James E. Wright, for defendants :
    1. What constitutes an adoption of a text-book in the public common schools of the State, within the meaning of section 52 of the act for the reorganization and maintenance of common schools, passed May 1, 1873 (70 Ohio L. 195)?
    This question involves a construction of section 52 of the school act. The power of the board of education to change the course of study or text-books, under this statute, is full and complete. The limitation upon the power is that, after the adoption of any text-book, no change shall thereafter be made in such text-book for the period of three years, without the consent of three-fourths of such school board, given at a regular meeting; but this section nowhere provides when or how long such board of education shall be occupied in determining both or either of these questions, or what acts within the purview of the statute shall be regarded as amounting to an adoption of a text-book, and in view of the peculiar character and. constitution of these local bodies, we think we can safely assume that the provisions of the statute will receive a most beneficial construetion, consistent with the rules of interpretation, in favor of the fullest opportunity tobe given to them to determine these questions, as they shall deem that the public interests require.
    The claim of the plaintiff seems to be that the determining by the board of a text-book is its adoption ; in other words, that, under this section, the determination and adoption are one aud the same thing. In our judgment, however, they import two very different things; the one, very clearly, is the act of the board; the other is not; and in this conclusion we are strengthened by the fact that there is no limitation imposed .upon the power of such boards of education to change the course of study in these public schools, by a majority vote, just as often as they please to do so; the limitation is confined solely to the power to change text-books. When we consider the phraseology, it is very evident that the legislature did not use the word adoption in any technical sense, nor in its primary sense, nor strictly in its secondary sense, as defined by lexicographers. In its primary sense, it pertains to persons and their relations to one another; in its secondary sense, it means to take, select, or assume as one’s own; as judicially construed, it has been held to embrace all the steps which may be necessary to accomplish a given purpose, as, for instance, to adopt a route for the transportation of the mail, means to take the steps necessary to cause the mails to be transported over that route. Rhodes v. United States, Dev. 47. And, on the construction of words,’ see Broom’s Legal Maxims, 586 (7th ed.); Maxwell, 17, 50, 54; R. v. Hall, 1 B. & C. 136; The Lion, L. R. P. C. 531; 2 A. & E. 531; Bird v. Bird, L. R., 1 P. & D. 231; Corrance v. Corrance, Id. 498; 6 A. & E. 339; Hardcastle on Stat. Con. 76.
    We therefore think that, while the determination of the text-books to be used is the act of the board, the adoption of them into practical use is the work of the pupils and the patrons of the schools, in accordance with such determination.

      In this view, there could have been no adoption of the Harper geography in the vacation of the school, and, as an abstract proposition, neither the plaintiff nor any other citizen could rightfully complain that the board of education, on the 26th of August, receded from its determination expressed in favor of this geography on the 12th of August.
    But, if it shall be found that the determination that a particular book shall be used as a text-book in the schools, and its adoption, are both acts of the board of education, the result is not different, for the thing to be done which limits the power of the board to make a change is not accomplished until it is completed by the adoption; and, during the time it is being done, the board may retrace its steps; and in neither view was the act complete on the 26th of August, when the board, by its order, revoked its order touching the same subject-matter made on the 12th of August.
    The action of the board on the 26th of August stands as the act of the board, and not as the act of the members of the board, or of a part of them. At this meeting, the members were all present, and, under the statute, a majority of the members is a quorum for the transaction of business ; and, if we are correct in the views which we have expressed, this action was final and conclusive of the subject.
    II. We insist that the board, by its action at the meeting held August 12, 1879, did not exclude the Cornell series of geographies from the public schools of Columbus. And, if that action amounted to an adoption of the Harper series, it did not have the effect of adopting the series as an entirety, but only in so far as it might be found feasible to use the series, having due regard to the classification itnd grades of such schools.
    III. Under what circumstances, if any, may a board of education reconsider its action with respect to the adoption of text-books upon subjects to be taught in such schools ?

      Section 14 of the school act provides that “ the board of education shall hold regular meetings once every two weeks, and such special meetings as they may deem necessary.”
    These meetings of August 12th and-26th were held by virtue of the provisions of this sections, and there is nothing in the record to show that any special meeting intervened. .
    "While boards of education may partake of the character of deliberate bodies, they are in no wise controlled by parliamentary rules and usages, but may conduct the proceedings before them in any way or manner which will accomplish the purposes intended by the statute relating to the public schools of the state, and we think no greater strictness will be required of them, in the transaction of the business before them, than that which is required of a New England town meeting, which possesses even larger and more extended powers than a board of education; and yet, with respect to these town meetings, it is well settled that they are not restrained by the rules and usages of parliamentary law. Hill v. Goodwin, 56 N. H. 441; Hunneman v. Grafton, 10 Met. 457; 6 Met. 497; 13 Allen, 163; 8 Cush. 66; 117 Mass. 391.
    But the relator claims that the statute and a by-law of the board provide that “ no text-book shall be changed withiu three years after its adoption, without the consent of three-fourths of the members of the board, given at a regular meeting; ” and that, after such adoption, it is not the subject of reconsideration for the period of such statutory limitation. In other words, however unadvisedly the board may have acted — however grave may be their mistake in this regard — that, having once adopted such book, they can not retrace their steps. If this rule were applied to the proceedings of the legislative departments of the government, the consequences would be frightful, indeed ; and it will not be applied here by the court, unless there is a controlling necessity for doing so.
    Conceding, therefore, for the sake of the argument, that the adoption of a text-book is the act of the board, and not of the pupils and patrons of the public schools, our position is, that up to the point when the board has given its final assent to such adoption, and before any expense has been incurred by these pupils and patrons in the purchase of such text-books, acting in good faith, and according to the rules and usages governing such public schools, it is competent for the board to reconsider its action with respect to such adoption, and that under the circumstances existing in the case at bar, it was rightfully exercised ; for it is conceded that from the commencement to the close of the discussion of the geography question, in so far as it .pertains to the question of the adoption of the Harper series, every step was taken by the board during the summer vacation of the schools. No rights, therefore, could have become vested in the pupils and patrons of these schools, without an utter disregard of ordinary caution and prudence.
    IV. As to whether a writ of mandamus should be issued, see 1 Ohio St. 30, 78; 20 Ohio St. 425 ; 22 Ohio St. 546 ; 2 Dutcher, 135 ; 33 Mich. 164; 33 Ill. 17; 23 La. 388; 31 Ohio St. 213.

      Alexander W. Krumm, city solicitor, also for defendants,
    filed a brief, discussing the same points as his associate counsel.

      DeWitt C. Jones, also of counsel for defendant,
    made an oral argument.
   Gilmore, C. J.

Recognizing, as we do, the importance of any question affecting the welfare of the common schools of our state, we have fully and carefully considered the questions that are raised by the writ, answers, and reply; and to us it is quite clear that the case can be satisfactorily decided upon the questions of law that are presented, without reference to the issues of fact that are made in the case.

If it is apparent that the relator is legally capable of prosecuting this proceeding, and that he has a clear legal right to the remedy he is seeking, we can not stop to inquire whether he is moving of his own volition, or at the request of some third party. Neither will we inquire whether the geographies in controversy are or are not adapted to the grades or classes in which they are required to be taught; nor can we pass upon the merits of the several series of geographies that are mentioned in the pleadings. Under the law the board of education is clothed with discretionary power to regulate and decide these matters ; and with the exercise of such discretion this court can not interfere; and hence it would be out of place to hear oral testimony on these subjects, or either of them.

The questions of law presented for decision are as follows :

1. Has the relator a legal right to prosecute this .proceeding ?

2. Hid the action of the board, on the, 12th of August, 1879, amount to an adoption of Harpers’ geographies, as of that date ?

3. If so, what effect did such adoption have upon Cornell’s geographies, which had long previously been adopted and used in the schools ?

4. Was the action of the board, on the 12th of August, 1879, affected by its subsequent action, on the 26th of August, 1879 ?

First. In answer to this question but little need be said. The relator was a resident tax-payer of the city of Columbus, and of the city school district, and was also the father of a child who was of school age; who was attending school in the city, and for whose use, in school, he had purchased and paid for Harper’s geographies, shortly after the action of the board, on August, 12th. He had, therefore. a pecuniary, and also a parental interest in having the public schools of the district controlled and conducted in the manner prescribed by the statute; and these interests are sufficient to enable him to maintain this proceeding to compel the board to perform its legal duty toward him and his child, on his making it appear that it has failed and refused to do so. Weir v. Day, ante, p. 143. The duty-sought to he enforced is not a public duty due from the board to the state as such, but a duty due from the board to the relator personally, and such a duty may be enforced in the name of the state on his relation, without the intervention of the attorney-general. Union Pacific R. R. Co. v. Hall, 91 U. S. 355; Pumphrey v. Mayor of Baltimore, 47 Md. 145.

Second. The legal effect of the action of the board, on the 12th of August, must be ascertained by a construction of section 52 of the statute (70 Ohio L. 209), under which its action was had. The first clause of the section, which alone bears upon this question, reads as follows: “Each board of education shall determine the studies to be pursued, and the text-books to be used, in the schools under their control; and no text-book shall be changed within three years after its adoption, without the consent of three-fourths of the members of the board of education given at a regular meeting,” etc.

The fair meaning of this statute must be ascertained by a reference to its words, the subject-matter to which they relate, and the object intended to be obtained by its passage.

The clause quoted is divisible into two sentences, each complete in itself.

The first confers power on the board to act upon two subjects — the studies to be pursued, and the text-books to be used in the schools. The second is a conditional restriction on the power of the board over the latter subject, when it is within the condition; and, when the restriction is inapplicable, the power of the board over both subjects is equal and complete. In this case, the restriction was inapplicable to the action of the board on the 12th of August, for the reason that more than twice three years had then elapsed since the board had adopted the Cornell geographies as the text-book to be used in the schools. Consequently, at the date last named, the board could legally exercise, without restriction, all the powers conferred by the first sentence in the clause above quoted. Under this, the-board is to determine the text-books to be used. "What is. the meaning of the word determine, as here used; or, what, operation and effect ought to be given to it ?

When taken in connection with the purpose of the law— which is the education, in free public schools, of the children of the state — and the subject-matter to which it relates — which is the text-books to be used in such schools— it is manifest that the word “determine” must mean, something more than investigating ar>d arriving at a conclusion by mental processes, although these are embraced.. Official action is contemplated and required, to give a practical effect to the word, and the injunction to do this is mandatory upon the board; and, in order that those who-must obey may know the will of the board, it is necessary that it should be declared in such a way that it may be-known. The usual mode by which the board of education makes known its will on any subject over which it has. control, is either by a motion, or by a resolution passed by the board at an official meeting and entered upon the-record of its proceedings, where it may be seen by any party interested. All this was done in the case before us. On the 15th of July, 1879, the_ committee on text-books-made a report to the board on the subject, among others, of the text-books on geography then in use, and those which they recommended for use in the future, in which they give their reasons for excluding the Cornell series then . in use, and substituting in their stead the intermediate, or' No. 2, and the primary geographies, of the Eclectic series.. If the report as made, had been adopted, its operation, would have been to exclude the condemned series then in-use, and to introduce those recommended into the schools-to be thereafter used.

By official action that part of the report, referring to new geographies, was laid over for two weeks. On the-12th of August, 1879, at a regular meeting of the board,. the report was taken up; when a proposition from II. W. Derby & Co. was presented, stating the terms upon which they would furnish Harper’s geographies for use in the .schools. On motion of a member, the name of Harper’s geographies was substituted, in the report of the committee for that of the Eclectic series, by a vote of seven to four. And thereupon the report of the committee, as amended, was adopted by the board by a vote of seven to two.

"Whatever the legal effect of this action may be, it at least clearly shows that the board thereby intended to exercise the powers conferred upon it by law, in reference to the text-books to be used in the schools on the subject of .geography. It appears to us that the legal effect of this action of the board, by whatever name it may be called, was the adoption of Harpers’ geographies as the text-books •on that subject, to be thereafter used in the schools under •its control, until they are lawfully changed. When the action of the board was consummated, on the 12th of August, its power over the subject was exhausted for the period of three years from that date, unless the text-book so adopted should be changed within that time by the consent of three-fourths of the members of the board, given at a regular meeting thereof.

The “three years” begins to run from the date of the •official adoption of a text-book, and not from the time such •book is introduced and brought into actual use in the •schools.

From what has been said, it necessarily follows that the action of the board on the 26th of August, 1879, in which a bare majority of the members of the board voted to reconsider the action of the board on the 12th of August, was a nullity; and hence the action of the board of the date last named is still in full force and effect; and the effect of this action is to exclude Cornell’s geographies, and •substitute in their stead Harpers’ geographies, which are, as before stated, to be hereafter used in the schools until they are lawfully changed.

Following a recommendation of the committee in its report, wbicb we think reasonable and. proper, we are of opinion that no pupil shall be required to purchase a Harpers’ geography for use in said schools, who, on the 12th of August, 1879, already had a book of the Cornell series ■of geographies for such use ; but if any pupil, who had such old book at that date, shall purchase or otherwise obtain any other book for use in the schools, in the place of his or her old book of the Cornell series, it shall be a Harpers’ geography.

Further; Inasmuch as Harpers’ geographies were adopted .as text-books, in connection with the proposition of H. W. Derby & Co., the terms of said proposition are to be considered as conditions upon which the text-books were .adopted.

Peremptory vyrit allowed.