author: Owen, C. J.

text:
    Morgan v. Lewis.

      Corporations — Stockholders—Liability of — In what cases judgment not necessary— Transfer of stock — Evidence—Admissibility.
    1. In an action by creditors to enforce tbe statutory liability of stockholders for .debts contracted by a corporation, where it is alleged that the company is insolvent; that it has entirely ceased to do business ; and that it has made an assignment for the benefit of creditors, having neither money, credit nor materials with which to transact business, it is not necessary further to allege that the plaintiff had recovered a judgment against the corporation upon which an execution had been returned unsatisfied.
    2. Upon the trial of the action, one of the defendants, an alleged stockholder, offered to prove that he originally became a stockholder by receiving from the corporation its stock in» exchange for his interest in a furnace of which he was principal owner; that thereafter, the furnace not proving as successful and profitable as had been expected, some of the stockholders were dissatisfied with the purchase, and contentions arose among them; that defendant was blamed by many of them for having induced the company to make the purchase and was requested to take the furnace back and transfer to the company the stock he had received for it; that to settle such eouteutiou and dissatisfaction he complied with this request, transferred his stock to the company and accepted therefor a deed for the furnace. Held: The evidence was admissible.
    (Decided June 26, 1888.)
    Reserved from the District Court of Stark County.
    The action below was commenced by Lewis, one of the defendants in error, against the Alliance Rolling Mill Company and other defendants alleged to be stockholders in, or creditors of, the company, for the purpose of enforcing the statutory liability of the stockholders to contribute to the payment of the debts of the corporation, which was alleged to be insolvent, and to have assigned its property and ceased to do business.
    The case was referred; there was a trial before the referee, and Morgan, the plaintiff in error, was held as a stockholder. He excepted, and had a bill of exceptions signed by the referee. On hearing, the court of common pleas affirmed the referee’s report, Morgan excepting. He then presented a jaetition in error in the district court where the case was reserved for decision in this court.
    In Morgan’s answer he says:
    “That many years ago, to-wit: About the year 1870, he owned about two-hundred shares of stock in said company and no more. That soon thereafter, to-wit: On or about January 1st, 1871, he sold and disposed of all his stock in said company and ceased to be a stockholder therein. * * * He denies that the indebtedness described in the petition, or any portion thereof, was contracted while he was a stockholder in said company, and he denies that any indebtedness held by the defendants who claim to be creditors of said company, or by any other person making claims in this action to be a creditor or creditors of said company, was contracted during the time that he was a stockholder in said company, or until many years after he had ceased to be such stockholder. He alleges the fact to be that all debts existing against said company, during the whole time that he was a stockholder therein, have long since been fully paid.” * * * * Issue was joined with these averments.

      Upon the trial before the referee, Morgan offered to prove that prior to the time the Alliance Rolling Mill Company acquired title to the furnace property, the property was principally owned by the defendant, Morgan, and that for his interest in the furnace property the Alliance Rolling Mill Company issued to the defendant, Morgan, stock in the Rolling Mill Company,which stock was the same stock which was afterwards transferred by the defendant, Morgan, to the Alliance Rolling Mill Company in consideration of the re-transfer to him of the furnace property. And further offered to prove, that after the Alliance Rolling Mill Company acquired title to the furnace property, the furnace not proving as successful and profitable as had been expected, some of the stockholders were dissatisfied with the purchase from Morgan, and contentions arose among them, and the defendant, Morgan, was blamed by many of them for having gotten the company into the purchase and was requested to take the property off their hands and pay for it in stock of the company ; and that Morgan, for the sake of settling such contentions and dissatisfaction, did purchase the furnace and pay for it in stock which had been issued to him as shown by the record. And thereupon the referee sustained the objection to the evidence so offered, and defendant, Morgan, excepted.
    It was testified to before the referee, and not contradicted, that Morgan tránsferred his stock to the company and the latter deeded to him the furnace property, of which he took immediate possession, and which he continued to hold and use as his own.
    No action has been taken looking to the subjection of this furnace property to the payment of the claims of any creditors, but all parties have treated it as if it were the property of Morgan since it was so deeded to him.
    In his report the referee finds that between February 5, 1867, and January 2, 1871, Morgan became the legal owner and holder of $116.583 worth (at par value) of stock in the company. That on the 17th of January, 1872, “ by a resolution of the said board of directors, the president of said corporation, by deed duly executed, deeded the furnace property mentioned in said proposition to said David Morgan, and on the same day said David Morgan signed powers of attorney in blank, transferring said stock, and delivered up the certificates of the same to the secretary of the corporation, who wrote the word “ cancelled ” on the face of each certificate, and inserted said certificates in the stock certificate book of the corporation, as surrendered stock.
    “ That at the time of said delivery of said certificates of stock to said corporation said David Morgan was the legal owner of said stock represented thereby.
    “ That said stock so delivered and intended to be surrendered to said corporation, was never afterwards represented, and the same was completely merged in said corporation, and the capital stock of said corporation was treated by the directors as reduced by the amount of $116,583.
    “ Said transaction was with the directors of said corporation alone, and without any submission of the same to, or vote on the same by, the general stockholders of said corporation, and without any knowledge or assent of the general stockholders, and that no certificate of decrease was filed with the Secretary of State as required by statute, nor was any notice of the action of the directors ever given.
    “ That at the time of said attempted surrender said corporation was reported to be solvent.
    “ That said David Morgan bought said property from, and intended to transfer said stock to, said corporation in good faith and without fraudulent intent.
    CONCLUSIONS OF LAW.
    “ The transfer of this stock to the corporation had the effect of reducing the capital stock of the corporation; the directors of the corporation did not have the power to thus reduce the capital stock, and such transfer is void and of no effect, and left the title to said $116,583 of stock precisely where it had been, and' the same as if no effort had been made to transfer the same.
    “Unless the power to buy its own stock is expressly conferred in its charter, a corporation can not deal in its own stock, and such transactions are void.

      “ The fund arising from the individual liability of stockholders is a trust fund set apart under our constitution and statutes for the benefit of creditors, and the directors by no arrangement or dealing whatever can affect or impair this fund.
    “ I find David Morgan liable on account of said stock, to contribute to the payment of the claims of the creditors of said corporation, to the amount of $116,583.”
    The referee finds in another connection, that the capital stock of the company was increased from time to time, until in December, 1870, when it was increased to $450,000.
    The fact that Morgan took immediate possession of the furnace property upon its conveyance to him, is not found by the referee, and does not seem to have entered into the consideration of the case by him, or by the court of common pleas.
    It also appeared in the case that the claims of creditors all accrued after the transfer by Morgan of his stock to the company, and of the furnace property, by the latter, to him.

      Stevenson BurTce and William B. Sanders, for plaintiff in error.

      W. A. Walden and J. F. Hoffman, for defendant in error.
   Owen, C. J.

I. The theory upon which the referee and the court of common pleas must have proceeded, was that the entire transaction by which Morgan acquired the furnace, and the company acquired his stock, was void; that it was beyond the power of the company to engage in the transaction, and that consequently the company acquired no title to the stock, and Morgan acquired none to the furnace property. If this conclusion is sound, the inevitable consequence is, that the company still owns the furnace, and it is assets in the hands of the assignee for the payment of the company’s debts. It is an absurdity to assume that Morgan is still the owner of both the furnace and the stock. If he is still liable to creditors as a holder of this stock, the company*, by the same reasoning, is owner of the furnace. It is conceded that the proceeding to subject the liability of stockholders to the satisfaction of the claims of creditors, has throughout ignored this property. It does not appear but that this property alone would satisfy creditors, nor to what extent it would exonerate stockholders from the liability which it is now sought to subject to the satisfaction of creditors’ claims. If we were in accord with the referee and court of common pleas, upon the main proposition of the case, still it would be our duty to send the case back for proceedings to subject this property of the company to the satisfaction, pro tanto, of its debts.

II. We are of opinion, however, that the referee erred in excluding the evidence which Morgan offered, to throw light upon the transaction by which he assumed to acquire the furnace, and transfer his stock to the company.

The contention of Morgan, in this respect, is not answered by the proposition that the only purpose of offering the rejected proof was to show that the transaction was in good faith, and that this already sufficiently appeared. We have no disposition to call in question the general and well recognized principle that a corporation cannot buy its own stock. It is conceded that this principle proceeds upon a want of power, rather than upon any express prohibition in its charter. With this general principle conceded, however, the right of a corporation to take its own stock in satisfaction of a debt due to it, has long been recognized in this state.

This has been recognized as an exception supposed to rest upon the necessity of avoiding loss. Coppin v. Greenlees, 38 Ohio St. 279. It is, nevertheless, a relaxation of the general rule. It is, of course, because of the necessity of avoiding loss, and not because it is for the satisfaction of a debt, that the exception is recognized. If the same or a like necessity of avoiding loss should arise in any of the transactions of the company, it could not, with any show of reason, be contended that the application of this principle of necessity should be limited by any iron rule to the case of taking stock for an otherwise hopeless debt.

The evidence which Morgan offered, and the referee rejected, tended to establish, in substance, that Morgan had traded to the company this furnace property for stock. That the furnace promised to prove a failure, or, at best, a disappointing and unsatisfactory venture. Contentions arose over the transaction, between Morgan and some of the stockholders. Many of them blamed him for having induced the company to make the purchase. Thereupon they — “many stockholders”— simply proposed a rescission of the contract of purchase; that Morgan take back the furnace and restore to the company the stock he had received for it. The company was out of debt. Nobody could possibly be hurt by a rescission of this contract which had caused so much discontent and' contention, and which promised to be a losing venture for the company and Morgan’s fellow stockholders. This proof would have established something beyond the mere good faith of the transaction. It would have tended to establish the fact that Morgan yielded to the importunities of many stockholders to rescind a bargain and set at rest an unfortunate controversy which was rapidly breeding discord among the stockholders.

The finding of the referee, that this transaction itself worked a reduction of the capital stock of the company, is not tenable. There was nothing in the way of the company re-issuing this stock or its equivalent to others who may have desired it. There was nothing in the fact that these certificates were marked <c cancelled ” on the face, by the secretary of the company, and by him treated as surrendered stock, to authorize the finding that the capital stock of the company was reduced. This was no part of the' transaction with Morgan, and there was nothing in the fact of the re-exchange of the stock for the furnace which called upon the officers of the company to treat the stock as cancelled, or the capital pro tanto reduced. Green’s Brice’s Ultra Ñires, 2d ed., 191, 192. This conclusion is not, in principle, qualified by the fact that the stock was not in fact thereafter represented. Then, we should not lose sight of the fact that there was an executed transaction. The exchange— or the re-exchange, rather — had been made, possession of the furnace taken by Morgan, and retained by him for years before the transaction was questioned by any one. To this day it has remained free from direct attack. Certainly, the pos-

session by Morgan of this property which had theretofore been in the possession of the comjxany, was a circumstance proper to be considered with other facts in the case. It at least helps us to distinguish it from the case of Coppin v. Greenlees, 38 Ohio St. 275, relied upon by defendants in error. In that case it was held that: “ An executory agreement between a manufacturing corporation of this state and one of the stockholders, for the purchase of the stock of such corporation, by the former from the latter, cannot be enforced, either by action for specific performance or for damages.” That this presents a very different case from one of an executed contract is emphasized by the following language of Mcllvaixxe, J., by whom the opinion was prepared: “ If it were averred that the plaintiff had purchased this stock from the defendant, or from others, under an agreement with the company that it buy the same from him when he quit its employment,- or if the contract of purchase by the defendant had been executed, very different questions would arise.” In State v. Building Association, 35 Ohio St. 263, the general px’inciple that a corporation may xxot tx'affic iix its own stock is recognized. Yet in the same connection it is said: “Me do xxot

deny that a corporation has power to receive shares of its stock as security for a debt or other similar purposes.” 26 Ga. 28; 84 Ill. 145; 17 N. Y. 507; 114 Mass. 37; 18 Vt. 131. It is apparent from the foregoing that no inflexible rule has been recognized by this court, that a corporation may not in any case, nor for any purpose, receive its owxx stock. On the contrary, the way is left open for the application of exceptions to the general rule in proper cases. It is one of the established facts in the case that all the debts which are sought to be satisfied by this proceeding were contracted subsequently to the transaction which is assailed. The transfer of the furnace property from the possession of the company to that of Mox’gan was a fact to which persons giving credit to the coxxxpany could not safely close their eyes. The inquiry which it would naturally excite would have led to the information that the tx’ade by which the company secured the furnace, and Mox’gan the stock, had simply been rescinded and the px’operty — stock and furnace — re-exchanged. It being the law of onr state that there are exceptions to the general rule, that corporations may not deal in their own stock; all persons dealing with this company must be held to have done so in the light of this state of the law. All persons are as much presumed to know of exceptions to a principle as of the principle itself. The slightest inquiry would have revealed the fact, that, as between himself' and the company, Morgan did not sustain the relation of stockholder, at the time these debts were contracted.

In the light of this-state of adjudication in this court, we do not hesitate to say that the peculiar state of circumstances, which Morgan offered to prove before the referee, ought to have been received in evidence and considered in the light of' other facts which did appear, in order that the referee and courts could have had anmpportunity to say whether they did not bring the case within some of the well founded exceptions to the wise and well established general rule.

III. The facts alleged in the petition, concerning the insolvency, etc., of the company, were sufficient to dispense with an averment of the recovery of a judgment against it as a prerequisite to the proceeding to subject the liability of the stockholders to the satisfaction of the corporate debts.

Judgment reversed and cause remanded.

Spear, J., dissents from the second proposition of the syllabus, and the judgment of reversal.


source: Caselaw Access Project

author: Uickman, J.

license: Public Domain

text:
    Handy v. Sibley.

      Accommodation note and mortgage held as collateral security — Amount recoverable thereon — Sale and purchase by pledgee — Bights of pledgee upon a foreclosure and sale of mortgaged premises.-

    1. The holder of an accommodation note, indorsed to him as collateral security, can recover against the accommodation maker no more than the amount intended to be thereby secured.
    2. When such note is secured by a mortgage executed by the maker of the note, the pledgee, upon a foreclosure and sale of the.mortgaged premises, after receiving payment of the debt due him from the pledgor, will be held as a trustee of tbe surplus, for the benefit of the mortgagor and his assigns.
    S. A pledgee can not, by a sale and purchase by himself of such accommodation note and mortgage, under a special power of sale and purchase from the pledgor, recover upon a foreclosure of the equity of redemption, a sum in excess of the debt for which the note and mortgage were pledged as collateral security.
    4. The children of H. made to him their promissory note for $25,000, secured by mortgage on real estate worth $100,000, for his accommodation, and to enable him to pledge the same as collateral and for no other consideration. H. pledged the note and mortgage as collateral security for the payment of a claim of S. against him for $15,000, and gave to S. a written power to sell the pledge at public or private sale, and to purchase the same. The children, with no knowledge or notice 'of the power of sale given to S., joined with their father in a written assignment to W. of ten thousand dollars in the note and mortgage, being the surplus over and above the claim of S. and the amount of H.’s indebtedness to W. In consideration of the assignment, W. extended the payment of his claim against H. for one year. 8. agreed in writing on the face of the assignment, to hold the note and mortgage, ahd deliver the same to W., upon receiving the amount of his claim of $15,000. Upon non-payment of his claim, S. sold the pledged note and mortgage at public sale, and became the purchaser thereof, for the sum of $15,000. There was no evidence, that W. at or before the time of the assignment, had any notice of the power of sale; nor had the children any notice or knowledge of the sale until long after it occurred. S., after purchasing the note and mortgage, in a proceeding to foreclose the equity of redemption, claimed $25,000, the amount of the mortgage note, with interest thereon.

      Held: That he was entitled to recover $15,000, with interest, and no more.
    (Decided May 22, 1888.)
    Error to tbe Circuit Court of Hamilton County.
    The original action was commenced in the court of common pleas of Hamilton county, by the defendant in error, James W. Sibley, against Helen A. Handy, Mariette B. Handy, Charles E. Handy, Jennie A. Handy (now Jennie A. Rhodes), Anna W. Handy and Eugene F. Williams, plaintiffs in error, and Truman B. Handy, to foreclose a mortgage, as hereinafter set forth.
    On March 27, 1883, Helen A. Handy, Mariette B. Handy, Charles E. Handy, Jennie A. Handy and Anna W. Handy, children of Truman B. Handy, executed and delivered to their father, their promissory note, a copy of which is as follows:

      “ $25,000.00. Cincinnati, March 27, 1883.
    Ninety days after date we promise to pay to the order of Truman B. Handy, twenty-five thousand (25,000) dollars, payable at the Citizens’ National Bank, at Cincinnati, with interest at six per cent, per annum; value received.
    Helen A. Handy,
    Mariette B. Handy,
    Chas. E. Handy,
    Jennie A. Handy,
    Anna W. Handy.”
    “ Indorsed: Truman B. Handy.”
    This note was secured by a mortgage deed executed and acknowledged March 27, 1883, by the above named makers oí the note, conveying to Truman B. Handy, certain described real estate owned by the mortgagors, and situated in the village of Clifton, in Hamilton county. The note and mortgage were executed to Truman B. Handy by his children, for his accommodation, and simply as surety for him, and to enable him to pledge the same as collateral, or, by having the same discounted, to obtain money for his convenience and accommodation, and for no other consideration. At the time of executing the mortgage, the real estate therein described was unincumbered, and worth one hundred thousand dollars.
    On April 2, 1883, Truman B. Handy executed and delivered to James "W. Sibley, his promissory note and agreement, a copy of which is as follows: .
    “ $15,000.00. Cincinnati, O., April 2, 1883.

      “ Ninety days after date I promise to pay James W. Sibley, or order, fifteen thousand dollars, for value received; having deposited or pledged as collateral security for the payment of this note, a note for twenty-five thousand dollars, secured by mortgage given me by Helen A. Handy, Mariette B. Handy, Chas. E. Handy, Jennie A. Handy and Anna Handy. And I hereby give to the holder thereof full power and authority to sell or collect at my expense all or any part or portion thereof, at any place, either in the city of Cincinnati or «elsewhere, at public or private sale, at his option, on the nonperformance of the above promise, and at any time thereafter, and without advertising the same or otherwise giving to me any notice. In case of public sale the holder may purchase without being liable to account for more than the net proceeds of such sale.
    “Truman B. Handy.”
    “ Indorsed: James W. Sibley..”
    Truman B. Handy indorsed the note for $25,000, and duly assigned the mortgage securing the same, to James W. Sibley, and deposited them with him, for the purpose and with the power and authority set forth in the above note and agreement of April 2, 1883.
    On June 9, 1883, Truman B. Handy and his children executed and delivered to .Eugene F. Williams an assignment, of which James W. Sibley had notice, and to which he assented in certain terms; a copy of which assignment and assent is as follows:
    “ Know all men that whereas Helen A., Mariette B., Charles E., Jennie A. and Anna W. Handy, did, on the 27th day of March, 1883, executp and deliver to Truman B. Handy their certain promissory note for twenty-five thousand dollars ($25,000.00), and on the same day executed a mortgage to secure the same, payable ninety (90) days after the date thereof, with six (6) per cent, interest, upon certain real estate situate in Clifton, Hamilton county, Ohio, and being the same premises described in a mortgage executed by said Helen A. Handy and others to said Truman B. Handy, recorded in mortgage book 461, page 170, Plamilton county, Ohio, mortgage records;
    “ And whereas said note and the mortgage securing the same were, for a valuable consideration, assigned and transferred by said Truman B. Handy to one J. W. Sibley, to secure the sum of $15,000.00 and interest;
    “ And whereas the said Truman B. Handy is indebted to one Eugene F. Williams in something over ton thousand dollars ($10,000.00), and being desirous of securing the same ;
    “ Now, therefore, we do hereby agree and consent that the said Eugene F. Williams shall receive an assignment and transfer of ten thousand dollars of, in and to said note and mortgage of $25,000.00, together with the interest thereon, the same being the surplus over and above the $15,000.00 due said Sibley, and the interest due him under said note and mortgage, and that said surplus of $10,000.00 and the interest accruing thereon, secured by said note and mortgage, shall be applied towards the payment of said indebtedness by said Truman B. Handy to said Williams, the said Williams, however, agreeing to extend the payment of his claim secured by this assignment, for one year from the date hereof, and also agreeing to apply to the diminution of said indebtedness all dividends that he may receive from the late firm of Handy, Richardson & Company, of Chicago, interest to be allowed to the said Williams at the rate of six per cent, per annum, until the payment of the indebtedness hereby secured. Said Truman B. Handy hereby so assigns said note and mortgage, and joins in this agreement.”
    Truman B. Handy,
    Helen A. Handy, Mariette B. Handy,
    Charles E. Handy,
    Jennie A. Handy,
    Anna W. Handy,
    Eugene E. Williams,
    by Jordan, Jordan & Williams, His Attorneys.

      “■ I do hereby acknowledge the service upon me of notice of the above and foregoing assignment made by Truman B. Elandy and others to Eugene F. Williams, dated June 9th, '1883, and agree hereby to hold said note and mortgage and deliver the same to said Williams or his attorneys, Jordan, Jordan & Williams, or his legal representatives, upon the payment to me of fifteen thousand dollars and interest thereon at six per cent, from March 27, 1883, whether said $15,000 and interest be paid by said Truman B. Handy or any other person.

      “ I sign the above with the agreement and understanding that nothing therein contained shall prevent me from enforcing my security at any time, or shall hold me responsible, in case other persons assert and maintain legal rights against said note or the proceeds thereof, or any part thereof.
    “ James W Sibley.”
    The note for $15,000, being past due and unpaid, James W. Sibley caused the note and mortgage for $25,000, pledged as collateral security for the payment thereof, to be offered at public auction sale, on July 21, 1883, at the Chamber of Commerce hall in Cincinnati, Ohio, and Sibley being the highest and best bidder, purchased the note and mortgage of $25,000, for the sum of $15,000. The sale was made without the consent of the children of Truman B. Handy, none of whom had any notice or knowledge of the existence or terms of the power of attorney, under which Sibley sold the pledged collaterals, until long after the salenor did they have any notice of the time or place of such sale; nor did they learn of such sale, until long after it was made. Notice of the sale of the pledge at the Chamber of Commerce, was given to the attorneys of Eugene F. Williams, but not to him personally; and before the sale, the attorneys of Williams informed Sibley by letter, that they had not notified their client of the notice served upon them of the intended sale, and that therefore, he had no knowledge of Sibley’s purpose to offer the pledge for sale.
    The condition of the mortgage deed having been broken, by reason of the non-payment at maturity of the note for $25,000, james W. Sibley filed his petition in the court of common pleas to foreclose the equity of redemption; and prayed that the premises described in the mortgage be sold, and that of the proceeds of such sale, there be paid to him the amount due on the mortgage note, to-wit: twenty-five thousand dollars, with interest from March 27, 1883. Eugene F. Williams, who was made defendant in the foreclosure proceedings, claims in his answer, that Sibley is entitled to receive out of the proceeds of the sale of the premises, as against him, the sum of $15,000, with interest, and no more. On appeal, the circuit court, upon an agreed statement of facts, which hereinbefore have been substantially set forth, adjudged and decreed the equities of the case to be with Sibley; that the note for $25,000, set forth in the petition, and the mortgage securing the same, belonged to Sibley; that he was entitled to a decree against the defendants for the full amount thereof, with interest; and that on failure to pay Sibley $27,802, and costs of suit, the mortgaged pi’emises should be sold, and the last named sum be paid from the proceeds of such sale. *
    To reverse the judgment of the circuit court, this petition in error is now prosecuted.

      Jordan & Jordans, for plaintiffs in error.

      Ramsey, Maxwell & Ramsey, for defendants in error.
   Uickman, J.

Independent of the power of sale vested in James "W. Sibley, by the instrument of writing dated April 2, 1883, he would not have been authorized to sell at public or private sale the note and mortgage of twenty-five thousand dollars, which Truman B. Handy had pledged as collateral security for the payment of his note of fifteen thousand dollars. There is a distinction between a pledge of ordinary chattels, and a pledge of commercial paper. A pledge of the latter as. collateral security for the payment of a debt, does not, in the absence of a special power for that purpose, authorize the pledgee to sell the securities so pledged, upon default of payment, either at public or private sale. He is bound to hold and collect the same as they become due, and apply the net proceeds to the payment of the debt so secured. The reason assigned for this exception to the general rule in relation to the sale of property pledged is, that such securities, not being* usually marketable at their fair value, would generally be sold at a sacrifice, and injustice would thus be done the debtor; and it cannot be presumed it was the intention of the parties thus, to deal with the securities. Wheeler v. Newbould, 16 N. Y. 392; Fletcher v. Dickinson, 7 Allen 23; Nelson v. Wellington, 5 Bosw. 178; Brown v. Ward, 3 Duer. (N. Y.) 660; Morris Canal & Banking Co. v. Lewis, 12 N. J. Eq. 323; Joliet Iron & Steel Co. v. Scioto Fire Brick Co., 82 Ill. 548; Zimpleman v. Veeder, 98 Ill. 613. Ordinarily, where there is a deposit of personal property as security, there is an implied power of sale upon default, upon giving reasonable notice to the debtor to redeem. But the pledgee of negotiable paper, who desires a more summary and speedy means of obtaining money from his security, than by collecting the same when it falls due, or by a bill in chancery and a judicial sale under a regular decree of fore■closure, will obtain a special power of sale from the pledgor. In enforcing his rights, however, by a salé of the pledge, he will be held to the strictest good faith in the execution of the power for the protection of the rights of the pledgor, and will be charged with a trust for the benefit of the debtor, and the benefit of those to whom the debtor may have assigned his interest.

It seems to be beyond controversy, that the note for $25,000, secured by mortgage, and given by the children of Truman B. Handy to their father, was good for that amount, although purchased by Sibley at the sale for $15,000 only — that being the amount of the note for which the note of $25,000 had been pledged as collateral security. Upon foreclosure of the mortgage, and sale of the premises, it appears that a sum would be realized more than sufficient to pay the note of $25,000 — sufficient to pay the principal and interest of the note of $15,000, and leave a surplus. The question arises, whether Sibley, because of his sale and purchase of the pledge, shall be permitted to retain this surplus embraced within the note of $25,000 as his own property, or be held to account for it as trustee to Eugene F. Williams.

The mortgage note of $25,000 was executed to Truman B. Handy by his children, solely for his accommodation, to enable him to pledge the same as collateral, or, by discount to obtain money for his convenience, and for no other consideration. They executed the note and mortgage simply as surety for their father. They had no knowledge of the power of sale given by him to Sibley until long after the sale of the pledge; nor did they have any notice of the time or place of such sale, or learn of the sale until long after it was made. We do not think that under the circumstances, Sibley can subject their property to the payment of $25,000, when he loaned to their father only $15,000; or that he cap retain the balance, $10,-000, without any consideration therefor. Handy deposited or pledged the note and mortgage as collateral security for the payment of $15,000, and no more. If, at the maturity and non-payment of his claim, Sibley, without resorting to a sale of the pledge, had sought to enforce payment by foreclosure of the mortgage, he would have been entitled out of the proceeds of the sale of the premises, only to the amount of his debt. He could not, by resorting to a sale of the pledge, enlarge his equities, or successfully invoke the aid of a court of equity, in an effort to exact from his debtor more than he owed him.

The principle is elementary, and as old as the Roman law, that if the creditor exercises his power of sale over the pledge, he must give the surplus, after paying himself, to the debtor. D. 13, 7,42; Hunter’s R. L. 439. And as between debtor and creditor, whatever may be the effect of a sale as to annulling all the debtor’s residuary interest in a pledge of ordinary chattels, when a question arises as to the rights of third parties, who are makers of accommodation paper pledged as collateral security, such parties should not be required to pay the credit-tor more than the amount of his debt. It has been decided by the supreme court of Massachusetts, in Fisher v. Fisher, 98 Mass. 303, that if a promissory note, which is without consideration as between the original parties thereto, is delivered without consideration to another person who pledges it before its maturity, as collateral security for a debt of his own of less amount than the face of the note, the pledgees, if they take it without notice, are to be deemed holders for value, and may maintain an action thereon for the amount due them upon the debt which it was pledged to secure. In the opinion of the court it was said : The evidence established that the plaintiffs received the note from the holder before its maturity, without any knowledge of the circumstances under which the defendants had delivered it to the payee, or the purpose for which the latter delivered it to the holder, and that it was held by the plaintiffs as collateral security for a valid debt due from the holder to them. Under the decisions of the court, these facts proved that the plaintiffs were bona fide holders for value, and without notice, and were therefore entitled to recover to the extent of their debt for which the note was pledged as collateral security.”

In Duncan, Sherman & Co. v. Gilbert, 5 Dutch. (N. J. L. R.), 527, it is stated as the rule, that the holders of accommodation paper, assigned as collateral security, cannot recover of the accommodation maker any more than the consideration actually advanced.

In Atlas Bank v. Doyle, 9 R. I. 76, it was held that in case of accommodation paper pledged, the pledgee can ' recover of the maker only the amount of the debt due him from the pledgor.

And in Maitland v. The Citizens Bank, 40 Md. 540, the doctrine was laid down, that, in an action against the maker of a promissory note made for the accommodation of the indorser, brought by the indorsee to whom it was passed as collateral security for the payment of notes discounted by the indorsee for the benefit of the indorser, the measure of the plaintiff's right of recovery is the amount due on the debts embraced by the security; and that it is incumbent on the plaintiff to show what debts were intended to be secured by the note, and the amounts remaining due in respect thereof. “Indeed,” says Alvey, J., “ all that the plaintiff is entitled to recover is the amount due on the debts intended to be secured,it being conceded that the note was taken as collateral security merely. In such case, while the plaintiff is entitled to be treated as a holder for value, it is only so to the extent necessary to protect the debts intended to be secured.”

The note executed by the children of Handy, and pledged as collateral security, being only accommodation paper, a.nd being held in pledge by Sibley, with no other lien upon it, they might, after the payment of the note of $15,000, have demanded the surrender or cancellation of the collateral. But, by the assignment of June 9, 1883, it was agreed by and between Truman B. Handy, his children, and Eugene F. Williams, that there should be assigned and transferred to Williams ten thousand dollars of and in the note and mortgage of $25,000 — the surplus over and above the $15,000 due Sibley— which surplus should be applied towards the payment of Williams’ claim against Handy; Williams, however, agreeing to extend the payment of his claim for one year from the date of the assignment. The record does not disclose that Williams had any knowledge of the power which Handy had vested in Sibley, to sell at public or private sale the collateral note and mortgage, and to become the purchaser thereof. The terms of the assignment of June 9th, and of Sibley’s written agreement attached thereto, would not bring such knowledge home to Williams any more than to the children of Handy, and it is among the agreed facts that none of the children, until long after the sale of July 21st, 1883, had notice or knowledge of the existence of such power of sale. So far as Williams knew, Sibley was a pledgee of negotiable paper secured by mortgage, with no special authority to sell the same as he would a pledge cf ordinary chattels, but only empowered to pursue the usual course of foreclosure proceedings. The surplus $10,000 was set apart to him, with the concurrence of all parties to the assignment, in view of a bona fide indebtedness to him by Handy, and for the valuable consideration that he would extend the payment of his claim against Handy.

There is nothing in the record inconsistent with the presumption that the assignment to Williams of June 9th, 1883, and the agreement by Sibley in relation thereto, were one and the same transaction. Williams having given a valuable consideration, Sibley was bound by his agreement to hold the note and mortgage, and deliver the same to Williams, upon receiving payment of $15,000 and interest. The proviso of Sibley, that nothing contained in the writing signed by him should prevent him from enforcing his security at any time, would not be notice to Williams of a special power of sale, but might convey the meaning that the one year’s extension of payment to Handy should not interfere with Sibley’s right to enforce his security at any time by a regular foreclosure of the mortgage.

As between Williams and Handy, and the children of Handy, the equities of the children in the surplus of the note and mortgage, after paying Sibley’s claim of $15,000, would, under tbe assignment of June 9th', follow and inure to the benefit of Williams. Nor do we conceive that the rights of Williams should be concluded in equity, by the sale of the pledge under a power of which he was not cognizant at the time he agreed with Handy to extend the time for the payment of his claim against him, and which extension he might not have granted, if Sibley had definitely notified him, as he might have done, of' his power to sell and purchase the pledged collaterals. The existence of the power of sale was a fact, which, under the circumstances, Sibley, as a trustee, should have disclosed to Williams, and his failure to communicate the fact to him, was contrary to the principles of equity. In our opinion, the defendant in error, James W. Sibley, has no right to ask anything more than the full payment of his claim, -with interest; and Eugene F. Williams is entitled to receive the surplus of the mortgage of twenty-five thousand dollars, over and above the sum of fifteen thousand dollars and interest, owing by Truman B. Handy to the defendant in error.'

Judgment reversed, and judgment for Eugene F. Williams.


author: Minshall, J.

text:
    Foster, Adm’x v. Wise, Adm’r.

      Executor — Conversión by, of assets of estate — Subsequent execution of new bond by— When sureties on new bond liable for assets so converted — Section 6020, Revised Statutes, construed.

    1. Tlie sureties on an administration bond, given by an executor who-has been removed, are liable thereon to the administrator appointed in his place for the indebtedness of such executor to the estate for assets received by him and converted to his own use; and a recovery may be had therefor by the successor in a suit on the administration bond. Slagel v. Entrekin, 44 Ohio St. 637, approved and followed.
    2. An executor gave a new bond as required by the probate court, on the motion of his sureties on the prior bond to be relieved under section 6204 of the Revised Statutes. Subsequently the executor was removed by the court, and an administrator with the will annexed was appointed in his place. Prior to giving the new bond, which was in the form required by section 5996 of the Revised Statutes, the executor had collected and converted to his own use all the assets of the estate. Held: That the sureties on the new bond are liable for the indebtedness of the executor to the estate for all the assets so collected and converted to his own use.
    (Decided May 1, 1888.)
    Error to the Circuit Court of Stark County.
    The original suit was upon the bond of an executor who had been removed, and was prosecuted by his successor in the trust as administrator de bonis non with the will annexed. The bond in suit was the third one that had been given by the executor, and, upon motion of the administratrix of one of the defendants, the sureties upon the first and second bonds were made parties by order of the court. Issues of fact having been made up, the case was, by agreement of parties, tided to the court, which, upon a special finding of facts, rendered judgment in favor of the plaintiff against the obligors of the bond in suit for the sum of $4,630.20.
    The finding of facts is as follows :

      “ The parties to said issues tried, waived the intervention of a jury, and submitted the cause to be tried by the court. And the court having heard counsel in argument, and being fully advised in the premises, finds that Angeline A. Brobst died in the year 1870, and left the last will and testament, of which Henry Pomerene was the .executor ; that he accepted the trust; that the will was, on the 23d day of November, 1870, duly probated by the Probate Court of Stark County, Ohio; that on the 23d day of November, 1870, said Henry Pomerene gave bond as siich executor, which was duly approved by the probate court, with James Taylor and Charles Herzer, his sureties. That on the 15th day of March, 1873, the said Henry Pomerene was required by the said court to give an additional bond as such executor, and on the 22d day of March, 1873, he did give such additional ■ bond, which was duly approved' by thq probate court aforesaid, with James Corrigan, John Pollock and J. H. Burgert, his sureties. That said original bond and said additional bond were conditioned according to law. That on the 15th day of February, 1878, said Henry Pomerene was duly ordered by said probate court to give a new bond as such executor, which he did on the 20th day of February, 1878, and which was conditioned according to law, and a copy is attached to the petition in this case, with the defendants, D. P. Foster and H. H. Hatch, as his sureties thereon, which said bond was then approved by the said probate court, and is the bond in suit. That prior to the giving of said last-mentioned bond, Henry Pomerene had received assets belonging to said estate, and had converted the same into money, and had paid out sums of money as such executor. That on the 4th day of November, 1875, said Henry Pomerene filed in said court his account as such executor, showing a balance in his hands, of the sum of $3,736.71, and which was the true sum in his hands, which account was duly approved by said court, and said Pomerene then ordered to invest the said balance at interest.

      “ That said Pomerene received no further sums of money, or any other property belonging to said estate, after the filing of said account. That he never paid out any sums on account of his said trust, save that he paid interest on the balance to Sophia Shriver, who was, under the will, entitled to receive the same as follows: Interest was paid up to November 4th, 1880, and the sum of $50.00 on interest, on November 4th, 1881. That Henry Pomerene acted only as executor of the will until he was removed, and that no trustee was appointed or required in law. That between the time of his appointment and the giving of the last bond hereintofore referred to, upon which the defendants, Foster and Hatch, are sureties, said Pomerene wasted all of the estate of said Angeline A. Brobst, and converted it to his own use, so that at the time the defendants, Foster and Hatch, signed said bond, as sureties, for said executor, there was, in point of fact, no money or property belonging to said estate, on hand unwasted. That said Pomerene was by said court, removed as such executor on the 13th day of March, A. T>. 1882, and the said Isaac Shriver, was, by the court, on said 13th day of March, A. D. 1882, duly appointed administrator de bonis non, with the will annexed, and prior to the commencement of this action he qualified as such, and on the 7th day of April, A. D. 1882, he, as such administrator, demanded payment of said Henry Pomerene, of the sum of $3,736.71, and interest thereon from Nov. 4th, 1880, less $50.00, paid Nov. 4th, 1881, as money and estate of said Angeline A. Brobst, that had come into his hands as executor, but said Pomerene neglected and refused to pay to him the said sum or any part thereof. That the defendants entered into the undertaking attached to the petition, and marked “ Exhibit A,” (which is in the usual form.)
    “That said Isaac Shriver was, by said probate court, removed as such administrator on the 2d day of June, 1884, and on June 25, 1884, Henry A. Wise was duly appointed and" qualified as administrator de bonis non, with the will annexed, of said Angeline A. Brobst, deceased, and that he' is now acting as such, and the action has been duly revived in his name as administrator.”
    The will of the testator, Angeline A. Brobst (a copy of which is inserted in the finding), after making certain small bequests to others, gave “all the remainder” of her property “to be put on interest for the benefit” of her niece, Sophia Shriver, during the time she should remain the wife of Isaac Shriver, and during her life, should she so long remain his wife, and then “the principal and interest not paid over” to go to the heirs of the body of her niece, and if she should die without such heirs, then to Christian B. Stump and his heirs. She then appointed the defendant, Henry Pomerene, to be the executor of her will.
    There is then a finding of the amount due, $4,630.20, on which judgment was rendered. A motion for a new trial was made, and overruled, and exceptions reserved.
    The judgment having been affirmed by the circuit court, this proceeding is prosecuted to reverse both judgments.
   Minshall, J.

No question is made upon the record as to the amount due the estate from the principal, Henry Pomerene, for assets received by him and converted to his own use. The contention is, (1) that the amount found due by the probate court, being for assets that had been received and converted to his own use by the executor, and so not in specie, can not be recovered upon the bond by the successor in the trust; and (2), that the sureties upon the bond in suit are only liable for assets converted by the principal after its execution, and that they are not liable for assets received and converted by him prior to its execution.

1. The first contention is based upon what was the rule of the common law. By that rule an administrator or executor, who had resigned, or been removed, was liable to no action at the suit of the administrator de bonis non, except for the recovery of such assets as remained in specie unadministered; and the several creditors, legatees and distributees, to whom he was liable, were driven to their several suits, if their claims remained unpaid. This resulted in great inconvenience. ■ As observed by Thurman, J., in Tracy v. Card’s Adm’r, 2 Ohio St. 442: “ There might be as many suits as there were individuals of these various classes; the expenses of litigation were oftentimes greater than the amount to be recovered; and the difficulties in doing justice between the parties and properly settling the estate, were manifold and grievous.” The learned judge then shows that this rule was abrogated at a very early day in this state, by the enactment of a statute which transfers the entire estate to the administrator de bonis non, and authorizes him to maintain a suit for its recovery.

The provisions on the subject as codified are found in section 6020 of the Revised Statutes. By this section the right is conferred on an administrator appointed in the place of one who has been removed, not only to maintain a suit against his predecessor and the sureties on his bond for “ all the personal effects and assets of the estate unadministered;” but, also, for “all damages arising from the maladministration or omission” of su&h predecessor. So that, whether or not we regard the liability of an executor or administrator to the estate for assets that he has received and converted to his own use, as itself an asset of the estate (Brown v. State, 23 Kan. 235), there can be no question, but that such conversion is, maladministration for which he and his sureties are liable in damages upon his bond at the suit of his successor in the trust.

The question should, however, lie regarded as settled by the •decision in Slagle v. Entrekin, 44 Ohio St. 637, where it was held that under section 6020 of the Revised Statutes, an administrator appointed to fill the place of an executor or administrator who has resigned or been removed, is entitled to receive from the latter his indebtedness to the estate on account of assets received and converted to his own use, and may maintain an action upon the administration bond of the former executor or administrator and his sureties to recover the same. The authorities are there collected.

In legal propriety there is no such office as an administrator de bonis non under our statute regulating the settlement of the estates of deceased persons. An administrator appointed to fill the place of a personal representative, who has resigned or been removed, is the successor in the trust of his predecessor, and is clothed with all the rights of the estate he is appointed' to administer, and is therefore entitled to recover the indebtedness of his predecessor to the estate for assets received and converted to his own use, as well as for such as remain in specie.

2. The sureties upon the second bond having been relieved by the court upon the motion of one of them, the principal, Pomerene, was required to give a new bond, which he did by executing the one in suit with the defendant H. H. Hatch and the intestate of the defendant Harriet L. Foster as sureties thereon; and the court having found that prior to this time, the executor had collected all the assets and converted them to his own use, it is now claimed, that the sureties on the bond in suit are not liable therefor. In other words, their claim is, that they are only liable for such assets as were converted by the executor after the execution of the bond on which they are sureties, and that the sureties on the prior bonds are alone liable for such as were converted before. This we think is not tenable. The case relied on, Eichelberger v. Gross, 42 Ohio St. 549, is not in point. There the suit was on the first bond that had been given by a guardian, and the sureties on it were held liable for an embezzlement of the funds by the guardian before the second bond was given. All that is there said as to the liability^ of the sureties upon the second bond was outside of the case and mere obiter. The obligation of the bond is the thing to be considered. It, among other things, stipu-r lates that the executor “shall administer, according to law and to the will of the testatrix, all her goods, chattels, etc., which shall at any time come to the possession of the said executor.” The discharge of this obligation required that the executor should administer the estate as required by the law and the will, or deliver it to his successor to be so administered, should he resign or be removed. The fact that prior to executing the bond he had converted the assets to his own use, in no way affected the obligation to account for all that had been received by him belonging to the estate; and it was to secure this obligation that the bond was required and given. There has been, it seems, no direct decision upon the'question by this court, but what has been said is supported by the general current of the decisions in the other states. Scofield v. Churchill, 72 N. Y. 565; Pinkstaff v. The People, 59 Ill. 148; Choat v. Arrington, 116 Mass. 552; Brown v. The State, 23 Kan. 235; Bobo v. Vaiden, 20 S. C. 271; Morris v. Morris, 9 Heisk. (Tenn.) 814.

In Pinkstaff v. The People, supra, it is. said, “whether he,” the administrator, “had, in fact, used the trust funds or not, when this (the second) bond was given, they were, in the eye of the law, then in his hands to be administered, and the bond was given as security that they should be so administered.” Arid in Brown v. The State, supra, it is said, that the liability of an administrator to an estate for amounts he has received and converted to his own use, is “assets in his hands belonging to the estate,” which it is his duty to make available to the estate, as required by law. Some of the authorities are to the effect that where a surety on an administrator’s bond petitions for relief, and a new bond is required and given, the second bond becomes the primary security, not only as to the surety who petitioned, but also as to the other sureties on the first bond. Bobo v. Vaiden, and Morris v. Morris, supra.

Whether the sureties upon the bond in suit have the right to compel contribution from the sureties upon both, or either, of the other bonds, need not now be determined. It is sufficient to determine, as we now do, that they are liable to the present administrator upon the bond given by them, for the entire indebtedness of the executor to the estate for whose faithful administration of its assets they bound themselves as sureties. There is no privity of contract between them and the sureties upon the prior bonds, and any remedy they-may have against them must be sought in a proper suit for that purpose. Choate v. Arrington, supra. This is an action for money only, and they have no right to insist that a proper judgment against themselves should be delayed' until they may be able to recover from another a part of what has been adjudged against themselves.

It is also argued that at the time the bond in suit was given, Pomerene held the assets as trustee under the will by which he was authorized to invest them for the benefit of Mrs. Shriver. It is a sufficient answer to this to say, that he never qualified as such trustee, and no such investment was made. He cannot, therefore, be regarded as having acted in any other capacity than as executor. Prior v. Talbot, 10 Cush. 1. Moreover, the sureties on the bond in suit are estopped from asserting that he had ceased to be an executor and was only a trustee. In all cases where the condition of a deed has reference to any particular thing, the obligor shall be estopped to say there is no such thing. Douglass v. Scott, 5 Ohio, 195.

Judgment affirmed.


text:
    Gunsaullus, Adm’r v. Pettit, Adm’r.

      Jury — Right of tried by — Appeal—Practice.
    The right to trial by jury does not depend upon the principles upon which relief is asked, but upon the nature and character of the relief sought. If the relief sought is a judgment for money only, the fact that before the adoption of our reformed system of procedure,- the proper remedy would have been by a suit in equity, does not affect the right of either party to a trial by jury upon any issue of fact made by the pleadings.
    (Decided May 22, 1888.)

      Ekrob. to the Circuit Court of Huron County.

      F. D. Gunsaullus and G. T. Stewart, for plaintiff in error.

      T. H. Wiggins, for defendant in error.
   Minshall, J.

The suit below was brought by the administrator of a deceased wife against the administrator of her deceased husband, and sought to charge his estate with a claim for money had and received by him in trust for her. They intermarried in 1836, she being at the time the widow of Merritt Pettit■ deceased, in whose lands she had a dower estate. It is claimed that her last husband, the decedent of the plaintiff in error, received the rent arising from the dower estate of his wife in the lands of her former husband, amounting to $2,950, and, also, the money paid by a railway company for the right of way through her dower estate, and that in 1868 he received her share in the estate of her father amounting to $650.59; t;hat all these sums were received by the husband in the right of the wife, without intention to make the same his own; that he so held the money in trust for her, and had promised to invest it for her use, but died before doing so. All the material facts were controverted by the answer. The case was tried to the court, a jury being waived; the court found for the defendant and dismissed the petition. Thereupon the plaintiff below appealed to the district court; and, the cause having been transferred to the circuit court, a motion was made therein to dismiss the appeal on the ground that neither party was entitled to a jury on the issues of fact joined between them. The motion was overruled, and, a trial-being had, the! circuit court rendered a judgment in favor of the appellant. In refusing to dismiss the appeal we think the court erred.

The constitutional limitation as to trial by jury is on the power to abridge, and not on the power to extend, the right of trial by that method. The right may be extended, but not abridged. So that the question is not merely, whether at common law, either-party had, upon the issues joined, a right to trial by jury, but whether under the provisions of our code of civil procedure such right is awarded him. The code provides, § 5130 R. S., that issues of fact arising in actions for the recovery of money only, shall be tried by a jury, unless waived by the parties; and such actions are not appealable. § 5226 R. S. Hence the right of a party to trial by j ury, in a given case, does not depend upon the character of the principles upon which he may base-his right to relief, but upon the nature and character of the relief sought. If the relief sought is a money judgment only, and all that is required to afford him a remedy, it is immaterial whether his right of action is based upon what were formerly regarded as equitable, or upon what were regarded as legal, principles. In either case the remedy must be sought in the civil action of the code; and, in it, trial by jury is given upon all issues of fact where the relief sought is a money judgment, only. See Alsdorf v. Reed, 45 Ohio St. 653, and cases there cited.

The claim of the plaintiff below, when reduced to its substance, is, that the husband of his intestate received moneys belonging to her, that he promised to hold and invest for her use. For not doing so, he asks to recover a judgment fbr money against the administrator of the husband for the amount, so received; 'and such judgment and none other was rendered by the circuit court. The fact that the court ordered that it. should be a lien upon all the lands of which the husband died seized, added nothing to the relief granted; for such would have been its effect had no such order been made, had the court-had jurisdiction to hear and determine the case on appeal.

The fact that prior to the code the only remedy would have^ been a suit in equity, does not affect the right of either party to demand a jury trial upon the issues of fact joined in the action. Hence the case of Huber v. Huber’s Adm’r, 10 Ohio, 371, has no application to the question presented here. The case then was not appealable, and the circuit court erred in not. sustaining the. motion to dismiss the same.

Judgment reversed and appeal dismissed.


author: Williams, J.

text:
    Monnett v. Monnett, Adm’r.

      Written instruments — Interpretation of — When oral testimony admissible to aid, in — Pleadings—Practice.
    M. executed and delivered to T. J. M. a written instrument, the terms of which are, “the Woolen Mill Company, of Bucyrus, Ohio, having sold to M. one-half of the Woolen Mill property for the sum of seven thousand five hundred dollars, two thousand five hundred dollars to be paid April 1,1877, the other five thousand dollars with the following provisions: after M. receives dividends to the amount of ten per cent, on the money he puts into the mills, T. J. M. is to receive dividends as interest on the five thousand dollars above named pro rata with the firm for the term of five years, and if the mills do not pay dividends up to ten per cent, on the money put in by M. at the expiration of five years, he may continue the same conditions until they do.” Held:

    1. That, within the rules of evidence, which forbid oral testimony to contradict or vary the terms of written agreements, but permit such testimony to prove the circumstances under which they were made, to enable the courts to put themselves in the place of the parties, with all the information possessed by them, the better to understand the terms employed in the contract, and arrive at the intention of the parties, it is competent to show that the Woolen Mill Company, of Bucy- » rus, Ohio, was the name of a co-partnership which consisted of T. J. M. and another person, who, at the date of the instrument, were the owners of the Woolen Mill property referred to; that the half thereof stated in the instrument as having been sold to M., was the plaintiff’s undivided interest in the property, and that the other co-partner’s undivided interest, was, about that time, sold to another person for the like price; also, that after M. executed the instrument, and delivered the same to T. J. M., he paid to him the twenty-five hundred dollars therein stipulated to be paid April 1, 1877, and that thereupon T. J. M. and his co-partner united in a deed of conveyance to M. and the -other purchaser, the consideration therein expressed being fifteen thousand dollars.

      % That the purchase price of T. J. M.’s undivided interest in the property, is seven thousand five hundred dollars, to be paid him by M., the purchaser ; twenty-five hundred dollars thereof to be paid April 1, 1877, but the other five thousand dollars not until the expiration of five years, during which time, T. J. M. is to receive as interest thereon, a share of the dividends remaining after M. shall receive dividends earned by the mill equal to ten per cent, on the amount invested by him in the mill; if the dividends do not equal that amount, the provision for the payment of interest to T. J. M. fails, which enables M. to retain the five thousand dollars of the purchase-money for five years without interest, and to continue, after the expiration of that period, to retain it on the same conditions as to interest, until the mill shall pay dividends equal to ten per cent, on his investment. But the principal of five thousand dollars is payable in any event at tbe end of live years from the date of the instrument, unless M. should then elect to continue the conditions in regard to interest; and a sale by him before that time, of his interest in the property, is a conclusive election not to do so, whereupon the principal becomes payable absolutely.
    3. That in an action brought on the instrument by T. J. M., against M.’s administrators, to recover the. five thousand dollars, where the reformation of the instrument is not sought by the defendants, and their pleadings do not entitle them to such relief, parol evidence is inadmissible to prove that the twenty-five hundred dollars stipulated to be paid April 1, 1877, was the full purchase price of the property, or that the plaintiff was to be paid no part of the five thousand dollars, unless the net earnings of the mill should exceed ten per cent, on the amount of money invested in the mill by M.
    4. In the trial of such action, the interpretation of the instrument belongs to the court, and it is error to submit its construction to the jury.
    (Decided May 22, 1888)
    Error to the Circuit Court of Crawford County.
    The plaintiff in error, who was plaintiff below, on the 20th day of May, 1882, commenced his action in the Court of Common Pleas of Crawford County, against the administrators of the estate of Abraham Monnett, deceased, upon the following written instrument:
    “ Bucyrus, Ohio, February 22, 1877.
    “The Woolen Mill Company of Bucyrus, Ohio, having sold to A. Monnett, of Marion County, Ohio, one-half of Woolen Mill Property, for the sum of seven thousand five hundred dollars ($7,500.00), two thousand five hundred dollars ($2,500.00) to be paid April 1st, 1877, the other five thousand dollars ($5,000.00) with the following provisions:
    “After the above A. Monnett receives dividends to the amount of ten per cent, on the money he puts into mill and manufactures, T. J. Monnett is to receive dividends, as interest on the five thousand dollars ($5,000.00) above named, pro rata with the firm, for the term of five years, and if the mills do not pay dividends up to ten per cent, on the money put in by A. Monnett above-named, at the expiration of the five years, he ■may continue the same conditions until they do.
    “A. Monnett.”

      Endorsed — “ Received on the within article two thousand five hundred dollars. April 1st, 1877.”

      The case made by the petition with the amendments is, that the Woolen Mill Company mentioned in the writing, was at its date the name of a co.-partnership, consisting of the plaintiff and James G. Frazier, who were the owners of the Woolen Mill property. The plaintiff sold his undivided interest in the property, to Abraham Monnett, for the sum of seven thous- and five hundred dollars, and Abraham Monnett executed and delivered to him the written instrument sued on. . About the same time, Frazier’s undivided interest in the property was sold to Quincy A. Rouse and William Rouse; and afterwards on the 2nd day of April, 1877, the plaintiff and Frazier, by their joint deed, conveyed the whole of the property to the purchasers, the consideration therein named being fifteen thousand dollars. The Rouses paid seven thousand five hundred dollars, their half of the purchase-price, and Abraham Monnett, in pursuance of his written obligation, paid the plaintiff the two thousand five hundred dollars, which by its terms, became due April 1st, 1877, and which is credited thereon. In April, 1878, Abi-aham Monnett sold and conveyed his undivided half of the property, to Horace Rouse, whereby, it is claimed, ho put it out of his power to further comply with the stipulations of his written agreement, and, after the expiration of five years from its date,- the plaintiff brought his action against Abraham Monnett’s administrators (he in the meantime having died), to recover the five thousand dollars alleged to be due, together with interest from April 1st, 1877. Before the commencement of the action, a claim therefor, duly authenticated, was presented to the administrators for allowance, which was by them rejected.
    Four answers were filed by the defendants, but the real defense, and the only one made at the trial, was that contained in the second paragraph of the amended answer, which avers that the written instrument sued on “is ambiguous and uncertain, and does not clearly set out the true agreement made by said parties; that the true agreement made by said parties and intended to be expressed by said written memorandum, was as follows: Plaintiff sold to said Abraham Monnett his interest in the Woolen Mill property, for the sum of twenty-five hundred dollars, to be paid, and which was, in fact, paid by said Abraham Monnett on April 1st, 1877, which sum was in full of the purchase-price thereof; but plaintiff retained a conditional interest in the earnings of said Woolen Mill as follows: It was agreed that said Abraham Monnett was first to receive dividends out of the net earnings and profits of said Woolen Mills, equal to ten per cent, on the amount of money by him put into said ■ mill and manufactures; after which plaintiff was to receive as his interest in the net earnings and profits thereof, a pro rata dividend thereof with the firm for five years (to the amount of five thousand dollars), provided said Woolen Mills earbed that amount in excess bf the ten per cent, first to be paid to said Abraham Monnett, but if said W oolen Mill did not earn an excess over said ten per cent, to be paid to said Abraham Monnett, then plaintiff was to receive nothing, nor have no other or further interest therein.”
    The plaintiff replied, controverting the allegations of the answer, and without objection by either party the case was tried to a jury. A verdict was returned for the defendant, and a motion for a. new trial having been overruled, a bill of exceptions was taken, purporting to set out all of the evidence and charge of the court, from which it appears, that the evidence offered by the defendant on the trial in support of his defense, consisted of conversations the witnesses claimed to have had with the plaintiff, concerning the terms of the sale to Abraham Monnett, and some testimony relating to the financial condition and business habits of Abraham and the plaintiff. This evidence was permitted to be given over the plaintiff’s objection, and he duly excepted.
    The court in its charge, after stating the issues made by the pleadings, said to the jury :

      “ The court finds that the said written memorandum attached to the plaintiff’s petition, marked ‘ Exhibit A,’ is ambiguous and uncertain in its terms and conditions, and submits the construction thereof to the jury. In giving construction to the same the intention of the parties will govern. The contract is what Abraham Monnett and • Thomas J. Monnett agreed and intended it to be.”
    To this the plaintiff excepted.
    The court further charged the jury, “ that the plaintiff must make out his case by a fair preponderance of the evidence,” and also that “ the defendants must make out their case by a fair preponderance of the evidence;” and “ if the contract is as claimed by the plaintiff the verdict must be for the plaintiff,” and “ if the contract is as claimed by the defendants the verdict must be for the defendants.”
    Judgment was entered on the verdict and the plaintiff prosecuted error to the circuit court, where the j udgment was affirmed, and thereupon filed his petition in error in this court.

      8. R. Harris, Jacob Scroggs and F. 8. Monnett, for plaintiff in error.

      Finley, Eaton & Bennett, W. Z. Davis and J. G. Tobias, for defendants in error.
   Williams, J.

The written instrument on which the plaintiff brought his action, is either capable of construction, or it is void for uncertainty; for, if the terms employed by the parties, though intended for a contract, be so incomplete or ambiguous that, after applying to them all the helps which the rules of interpretation afford and permit, they are still so uncertain, that what the parties mutually assented to, cannot be ascertained, the consequence is the same as when there is no assent; there is no contract. But,'if possible with such helps, they should be given such construction as will uphold the contract, and give effect to the intention of the parties, rather than one which renders them void for uncertainty; and to avoid the latter alternative, the words will be taken most strongly against the person employing them, especially where he is the only party subscribing the contract. The words of obligation in a contract, are interpreted most strongly against the obligor, for it is presumed that he used those most favorable to his interests; and all doubtful terms or ambiguous words are to be construed against him. He who speaks, should speak plainly, or the other party may explain to his own advantage.” State v. Worthington, 7 Ohio, pt. 1, p. 171.

Though the rules of evidence exclude oral testimony to contradict or vary the terms of written agreements, they permit proof of the circumstances under which they were made, the surroundings of the parties, their relations to each other, and to the subject-matter of the contract, to enable the courts called upon to interpret them, to put themselves in the place of the parties, with all the information possessed by them, the better to understand the terms employed in the contract, arrive at the intention of .the parties, and give effect to the agreement.

Consistently with these rules, it was without objection, shown on the trial, that the “Woolen Mill Company of Bucyrus ” was the name of a co-partnership, which consisted of the plaintiff and another, who, at the date of instrument sued on, were the owners of the Woolen Mill property therein mentioned; and that the half of the property therein stated as having been sold to Abraham Monnett, was the plaintiff’s undivided interest in it. The answer admits this, for it avers that “ the plaintiff sold to said Abraham Monnett his interest in the said Woolen Mill property.” It was also shown, and not controverted, that Abraham Monnett executed the written obligation, delivered the same to the plaintiff, and paid to him the twenty-five hundred dollars stipulated to be paid April 1st, 1877, and that a deed of conveyance was soon thereafter executed to Abraham Mon-nett, vesting in him the undivided half of the property, which he afterward sold and conveyed to another person.

Aided by these extrinsic facts, no serious difficulty is- encountered in the construction of the instrument. It recites, that the sale was for the sum of seven thousand five hundred dollars, and provides that twenty-five hundred dollars thereof is to be paid April 1st, 1877. It is true, it does not state that Abraham Monnett is to pay it, nor contain any direct promise to pay to the plaintiff. But since Abraham Mon-nett purchased the.property of the plaintiff, and executed and delivered to him the written instrument, stating the purchase by him, and the terms and amounts of the payments tberefor, it would be idle to say, that the twenty-five hundred dollars was not to be paid by Abraham Monnett to the plaintiff. About this there -is no controversy, and accordingly Abraham Monnett, contemporaneously with the execution of the deed to him, paid to the plaintiff this twenty-five hundred dollars. The obligation to pay the balance of the purchase price of the property is equally clear. Whatever of uncertainty there is, relates to the time and mode of payment. The language of the instrument, two thousand five hundred dollars to be paid April 1st, 1877, the other five thousand dollars with the following provisions,” plainly imports that the five thousand dollars is to be paid, as well as the twenty-five hundred dollars, and by the same pei’son, and to the same person, except as otherwise controlled by the provisions which follow. There is nothing in those provisions which discharges the obligation to pay the five thousand dollars, or extinguishes the right of the plaintiff to receive it. They are not only consistent with, but confirm and accentuate, both the obligation of Abraham Monnett to pay, and the right of the plaintiff to receive payment. They provide, that after Abraham Monnett receives dividends to the amount often per ■cent, on the money by him invested in the mill, the plaintiff is to receive a share of the remaining dividends, as interest ■on the five thousand dollars, for the term of five' years. 'The right of the plaintiff to the interest in the event provided for, would seem to establish his title to the principal :also; and, as A braham Monnett is the party binding himself to that obligation, the duty became his, to pay the plaintiff the interest, as it accrued according to its terms. If the mills should not pay a dividend of ten per cent, on the money invested by Abraham Monnett, the provision for the payment of interest to the plaintiff fails; the result of which is, that Abraham Monnett is enabled to retain the five thousand dollars of purchase money for the property, for the five years without interest, and he might, at the expiration of that period, continue to retain it, on the same conditions as to interest, until the mill should pay dividends equal to ten per cent, on his investment. Under these stipulations, the principal of five thousand dollars, became due in any event at the expiration of five years from the date of the obligation, unless Abraham Monnett should then elect to continue the conditions in regard to the interest therein set forth,which he did not do. On the contrary, he sold and conveyed away his undivided half of the property, ceased to have any interest in, or control over it, and thus put it out of his power to perform the stipulations for the payment of interest, which were beneficial to the plaintiff, and which no doubt constituted the consideration, at least in part, for the credit given on that part of the purchase price of the property. This was a conclusive election, on the part of Abraham Monnett, not to prolong the time for the payment of the five thousand dollars on the conditions specified, and the money became payable absolutely.

This, we think, is the proper interpretation of the obligation, aided by such extrinsic facts, either admitted by the pleadings, or not controverted on the trial, as, consistently with the rules of evidence, may be properly considered in giving construction to it; and the trial court err§d in submitting its construction to the jury. The extrinsic circumstances material to its construction, were undispui ed and definitely ascertained; and if they were not, it was still the duty of the court to give construction to the instrument, for the construction of all written instruments belongs to the court alone; and it is the duty of the jury to take the construction from the court, either absolutely, if there be no words to be construed, as words of art, or phrases used in commerce, and no surrounding circumstances to be ascertained; or conditionally, when those words or circumstances are necessarily referred to them.” Neilson v. Hofford, 8 M. & M. 806, 823.

2. It follows, also, that the court erred in admitting the evidence, given by the defendants, to contradict the terms of the instrument, and engraft upon it others it did not contain, unless such evidence was competent, under the pleadings, with the view to its reformation.

W e know that the rules, which forbid the introduction of parol evidence to control written contracts, do not exclude proof of the consideration, or of promises or agreements wholly collateral to the writing, like agreements between sureties or joint promisors; nor apply, where express reference is made in the written instrument, to a parol contract, or where the written instrument does not purport to be a complete expression of the contract, or evidently appears to express only some part of it, and that which is sought to be proven, does not contradict its terms, but is consistent with them. But the evidence admitted in this case, does not fall within either of these classes. Its purpose and tendency were, to prove that the instrument did not contain the true agreement between the parties, and to establish a contract materially different from that expressed by it. Such evidence can not be admitted, except when the reformation of the instrument is sought in equity. Holzworth v. Koch, 26 Ohio St. 33; Neil v. The Board of Trustees, 31 Ohio St. 15 ; Denton v. Whitney, 31 Ohio St. 89. And the party asking its reformation, must by proper allegations in his pleading, show his right to such relief. White v. Denman, 1 Ohio St. 110. The defendants below neither sought the remedy, nor do their pleadings entitle them to that relief

There being no dispute about the facts which entitle the plaintiff to judgment, there is no reason why the case should not now be finally disposed of.

Judgments of the circuit court, and court of common pleas reversed, and j udgment for the plaintiff.


text:
    Andrews v. Lembeck.

      Summons — When person privileged from senice of.

    A person attending the hearing of an application for an injunction in a ease in which he is interested as a party, in a county other than that of his residence, is privileged from the service of summons while going to, attending, and returning from, the place of such hearing.
    (Decided October 16, 1888.)
    Error to the Circuit Court of Cuyahoga County.
    Julius Lembeck commenced an action against E. E. Andrews in the Court of Common Pleas of Medina County, applied for a temporary injunction therein, and being unable to secure a hearing therof before either of the judges of that subdivision, served on Andrews a notice of an intended application to the Hon. Henry McKinney, one of the judges within such district, at his place of residence in Cuyahoga county, for such temporary injunction, which application was made accordingly. Andrews, with his counsel, attended such hearing (which was upon the affidavits previously filed), and did so upon the advice of his counsel that his presence might be necessary during such hearing. After such hearing was had, and before sufficient time had elapsed for him to depart for his home by the first train leaving therefor, he was served with a summons issued from the Court of Common Pleas of Cuyahoga County, in an action commenced against him by Lembeek, who used no fraud, and had no intention of bringing him into the latter county for the .purpose of securing the service upon him.
    The court of common pleas, upon his motion, quashed the summons and dismissed the action, holding that he ought not to be held to answer in Cuyahoga county.
    The circuit court reversed this order, and the present proceeding is prosecuted to reverse this judgment of reversal.

      Boynton, Rede & Horr, for plaintiff in error.
    A person attending an application for an injunction in a case in which he is interested as a party, in a jurisdiction outside of that of his residence, is absolutely privileged from the service of summons while going to, remaining at, and returning from, the hearing of such application. Blight v. Fisher, Peters’ C. C. 41, is the only case which we have been able to find holding to the contrary; but this case was expressly overruled by the same court in Lyell v. Goodwin, 4 McLean, 29.
    The following cases support our proposition : Miles v. McCullough, 1 Binney, 77; Bolton v. Martin, 1 Dallas, 396 ; Hayes v. Shields, 2 Yeates, 222; Wetherill v. Seitzinger, 1 Miles, 237; Greer v. Youngs, 17 Ill. App. 106; Halsey v. Stewart, 1 Southard, 366; Huddison v. Prizer, 9 Phila. 65; Holmes v. Nelson, 1 Phila. 217; Mathews v. Tufts, 87 N. Y. 568; In re Healy, 53 Vermont, 694; Juneau Bank v. McSpedan,
      5 Bissell, 64; Anderson v. Rountree, 1 Pinney (Wis.) 115; Lamkin v. Starkey, 1 Hun. 479; Dungan v. Miller, 37 N. J. Law, 182; Seaver v. Robinson, 3 Duer, 622; Merril v. George, 23 Howard Pr. 331; Cole v. Hawkins, Andrews, 275; Parker v. Hotchkiss, 1 Wall. Jr. 269 ; Person v. Grier, 66 N. Y. 124. 1 Black. Com. 65; Story on Const., sec. 859; Rev. Stats. Ohio, sec. 5457; Sedgwick on Statutory and Const. Law, p. 318.

      Henderson, Kline & Tolies, for defendant in eiTor.
    1. Our claim is, that a proper construction of sections 5021, 5022, 5023, 5024, 5025, 5026, 5027, 5028, 5029 and 5030 of the Revised Statutes, leaves no rooip for the assertion of the claim of plaintiff's counsel.
    2. ' Even in the absence of the statutes, no such immunity is recognized. Sections 5457 to 5459, Rev. Stats., prescribe particularly the persons privileged from arrest. The weight of authority is against the claim of plaintiff in error. Blight v. Fisher, Peters C. C. 41; Sadler and Love v. Ray, 5 Rich. (S. C.) 523; Hunter v. Cleveland, 1 Brev. (S. C.) 167; Hopkins v. Coburn, 1 Wend. 292; Bours v. Tuckerman, 7 Johns. 538; Page v. Randall, 6 Cal. 32; Legrand v. Bedinger, 4 T. B. Monr. (Ky.) 539.
   Owen, C. J.

The sole question for our determination is whether a person attending the hearing of an application for an injunction in a case in which he is interested as a party, in a jurisdiction outside of that of his residence, is privileged from the service o.f summons while going to, remaining at, and returning from, the hearing of such application.

The question is one which profoundly concerns the free and unhampered administration of justice in the courts. That suitors should feel free and safe at all times to attend, within any jurisdiction outside of their own, upon judicial proceedings in which they are concerned, and which require their presence, without incurring the liability of being picked, up and held to answer some other adverse judicial proceeding against them, is so far a rule of public policy, that it has received almost universal recognition wherever the common law is known and administered. Lyell v. Goodwin, 4 McLean, 29; Miles v. McCullough, 1 Binney, 77 ; Bolton v. Martin, 1 Dallas, 396 ; Hayes v. Shields, 2 Yeates, 222; Wetherill v. Seitzinger, 1 Miles, 237; Greer v. Youngs, 17 Ill. App. 106 ; Halsey v. Stewart, 1 Southard, 366 ; Huddison v. Prizer, 9 Phila. 65; Holmes v. Nelson, 1 Phila. 217; Matthews v. Tufts, 87 N. Y. 568 ; In re Healey, 53 Vt. 694; Juneau Bank v. McSpedan, 5 Bissell, 64; Anderson v. Rountree, 1 Pinney (Wis.) 115; Lamkin v. Starkey, 7 Hun. 479; Dungan v. Miller, 37 N. J. Law, 182; Seaver v. Robinson, 3 Duer. 622; Merril v. George, 23 Howard Pr. 331; Cole v. Hawkins, Andrews, 275 ; Parker v. Hotchkiss, 1 Wall. Jr. 269; Person v. Grier, 66 N. 124.

The contention that the application of this principle should be or is confined to cases where the suitor is served with process while attending upon judicial proceedings without his state, is not supported by sufficient force of reason to justify the distinction. The cases may differ in degree but not in the principle involved.

It is maintained, however, that in this state the subject is regulated, and the question determined, by statute; that sections 5022 to 5030, inclusive, fix the rights of parties litigant as to the jurisdiction within which defendants may be served and required to answer. It is conceded that none of these provisions affect or apply to the case at bar. Section 5031, it is asserted, applies to all other actions of every kind. It provides : “ Every other action must be brought in the county in which a defendant resides, or may be summoned, except actions against an executor, administrator, guardian, or trustee,” etc.

It is maintained further, that if other evidence were required, that the entire matter of immunity from service of a summons was intended to be covered by statute, it is furnished by those provisions which regulate immunity from* civil arrest.

Section 5457 designates particularly all the persons who shall either absolutely, or at certain times, be privileged from arrest, and it includes all suitors * * * while going to, attending, or returning from court.” Section 5458 fixes the time and places which shall be free from the disturbance liable to follow from an arrest.

Section 5459 provides:

“Nothing in this subdivision contained shall be construed to extend to cases of treason, felony or breach of the peace, or to privilege any person herein specified from being served at any time with a summons or notice to appear; and all arrests, not contrary to the provisions herein contained, made in any place, or on any river or watercourse within or bounding upon the state, shall be deemed lawful.”

Counsel for defendant in error say, concerning the foregoing provision:

“ This language, taken in connection with the other sections already alluded to, would seem to admit of no doubt that the legislature fully considered the entire subject and attempted to regulate it; and in so doing recognized that, while the arrest of a suitor during the progress of his suit and for a reasonable time in going to and returning from it, might subject him to serious interruption, the service of summons in a civil action could have no such effect.”

We shall see that this view has not been adopted by the judiciary of our state. In Compton v. Wilder, 40 Ohio St. 130, Wilder, a citizen of Pennsylvania, was extradited from that state upon a requisition issued by the governor of Ohio, upon application of Compton, in a, criminal prosecution instituted by him in Hamilton county. After W ilder had entered into a recognizance to appear before the court of common pleas at its then next term, and before conviction and before he had an opportunity to return to his home, he was served with both a summons and an order of arrest issued in a civil action brought by Compton against him in Hamilton county. On motion, not only the order of arrest but the summons was set aside. If the position of counsel is well chosen, the summons was improperly set aside. The court hold, however, and we think correctly, that both the order and summons were rightfully set aside.

If the contention of counsel is sound, the statutes above cited have provided for those cases where parties are decoyed by trick and subterfuge from their own into a strange jurisdiction to be then called upon to answer to the suit of some adventurer, for surely the latter of these provisions is broad enough to cover such cases.

We are unanimously of the opinion, however, that the general assembly neither intended nor attempted to comprehend within the purview of these enactments cases where service of summons is procured and made in fraud of the law, or cases like the one at bar [admitted to be free of active fraud), where the tendency is to impede or embarrass the free and complete administration of justice in the courts.

The authorities already cited hold that privilege from the service of summons has existed from time immemorial, and has been upheld by both the federal and state courts. The rule of law announced'by them with such unanimity ought not to be considered to have been abrogated by any implication from the language used in section 5459. As the court say in Anderson v. Rountree, 1 Pin. (Wis.) 115, supra: “It is a principle of common law that privileges are not to be taken away by the general, comprehensive words of a statute; wre cannot do by construction what is not clearly authorized by the legislature.”

Sedgwick in his work on Statutory and Constitutional Law, page 318, says: “ An ancient and settled system ought not to be overturned except by clear, unambiguous, and peremptory language.”

In Matthews v. Tufts, 87 N. Y., supra, the court said: “ This immunity does not depend upon statutory provisions.”

The court in Lamkin v. Starkey, 7 Hun, 479, supra, said: “ The court has power independently of the statute to protect its officers, suitors and witnesses from molestation by means of process from the court; this special protection is- afforded for the sake of public justice.”

Our conclusion is that the language, “served at any time with a summons or notice to appear,” in section 5459 cited, supra, and “may he summoned,” etc., in section 5031, supra, is to be held to contemplate such a service of summons as, according to the course of proceedings at the common law (where capias corresponded in its uses to our summons) is free from the objection that it is either in active fraud of the law or tends to impede or embarrass the administration of public justice, by deterring suitors from freely attending upon all proceedings-which concern them or require their presence. This language' contemplates such process and such service as by well-known principles constitute good service.”

The service upon Andrews was in clear violation of this salutary rule, and was properly quashed by the court of common pleas. In reversing this judgment the circuit court erred, and for this error the

Judgment of the cireuit court is reversed.