text:
    Thompson v. Massie.
    1. A creditor, who has not proved his claim, may, pending proceedings in bankruptcy, commence a suit on a provable claim against the bankrupt, notwithstanding Sec. 5106 (U. S. Rev. Stats.) prohibits the prosecution of such suit to final judgment until the question of his discharge shall have been determined.
    2. A material alteration of a promissory note by one of the joint payees and holders avoids it as to sureties not assenting thereto.
    Error. Reserved in the District Court of Ross County.
    The original action was upon three promissory notes; each of them by the same makers, in the same amount, and to the same payees, differing only in time of maturity. One of them reads as follows :
    $2,904. Chillicothe, O., June 1st, 1875.
    On or before the 1st day of May, 1876, we, or either of us, promise to pay to the order of Thomas Massie, Gertrude Massie, J. L. and Mary M. Cochran, twenty-nine hundred and four dollars. Yalue received.
    C. B. Thompson.
    A. W. Thompson.
    J. C. Thompson.
    The payees, the defendants in error, were plaintiffs and the makers were defendants. C. B. Thompson was the principal and the other makers his sureties. C. B. Thompson was summoned in Ross county, the others in Pickaway county, where they respectively resided. The defendants, severally, pleaded to the jurisdiction of the court, setting up that C. B. Thompson had been duly adjudged a bankrupt before the commencement of this action and that the proceedings were still pending. The sureties further set up in their pleas the facts as to the service of summons above stated, and claimed that C. B. Thompson was not á substantial party and the service on them was ineffective.
    A demurrer was sustained to these answers.
    Thereupon the sureties answered, substantially averring that after the delivery of the notes they were, severally, by the procurement of the plaintiffs, altered without their assent, by the addition of these words to the end of each note: “ with 8 per cent, interest after maturity.” The reply was a general denial.
    Subsequently C. B. Thompson filed a supplemental answer setting forth that.he had duly obtained his discharge in the bankruptcy proceedings.
    On the trial it was proved, and it is admitted, that the defendant C. B. Thompson by the procurement of Thomas Massie, one of the plaintiffs, altered each of the notes after delivery by adding the interest clause above quoted; and that it was done without the knowledge of the other payees and makers.
    At the May Term, 1880, the case was submitted to the court and passed to judgment with special findings. The judgment exempts C. B. Thompson from further proceedings and adjudges Thomas Massie barred of recovery against the sureties and gives a recovery in favor of the other plaintiffs against the sureties for an alleged proportionate share of the amount due on the notes as between them and their co-payee, Thomas Massie.
    A motion for a new trial for errors in admitting and rejecting testimony and in the findings of fact and law was overruled and exceptions duly taken.
    ■ A petition in error filed in the district court is here on a reservation. The errors assigned are the same as stated in the motion for new trial, and also the overruling the motion.

      The entry of the special findings and judgment is as follows:
    And afterward, to wit: At the May term, A. D. 1880, to wit: Friday, July 16th, 1880.
    This day came the said plaintiffs and made known to the court that since the commencement of this action, the said Gertrude Massie had intermarried with one William Fullerton, and it appearing that the interest of the said Gertrude in the promissory note set out in the several causes of action named in the petition was her separate property, it is ordered that this action proceed in her name as Gertrude Fullerton, jointly with her co-plaintiff, and thereupon this cause came on to be heard before the court, upon the issues joined between the parties, neither party requiring a jury, and the evidence and the arguments of counsel thereon being heard, the court doth find—
    1st. That the facts set forth in the last answer of C. B. Thompson, settling up his discharge in bankruptcy under the laws of the United States are true, and that such discharge is a bar to any further proceedings or judgment against the said C. B. Thompson on the several causes of action set forth in said petition.
    2d. That the said three notes set forth in the said plaintiffs’ several causes of action, together with one other note given contemporaneously with the note named in said first cause of action for the sum of $2,904, executed by the defendants to the plaintiffs, and payable on February 1st, 1876, were given in pursuance of the stipulations of an agreement of lease executed, acknowledged and recorded as required by law, dated September 22d, 1873, by which the plaintiffs leased to the said C. B. Thompson, 704 acres of land in Ross county, Ohio, owned by the said Thomas Massie and Gertrude Massie in fee, but subject to a life estate in favor of the said Mary M. Cochran in a portion thereof, for the term of five years, commencing on January 1st, 1874, at an annual rental of eight dollars and twenty-five cents per acre, to become due in equal installments on the first day of February, and first day of May, 1875, and on the same days of each succeeding year, until and including the year 1879; the said installments to be further evidenced and secured by negotiable notes with endorsers approved by the president or cashier of either of the National banks of Chillicothey Ohio, to be executed and delivered to the plaintiffs as lessors for each year’s rent, on or before the first day of June, of the year immediately preceding the maturity of the payment of said rent for each year, and on which said agreement of lease the said A; W. Thompson wrote thereunder, a stipulation in the words and figures following, to wit: In consideration of the foregoing lease, I guarantee that the said C. B. Thompson will faithfully keep and perform all the obligations and undertakings imposed upon him by the foregoing deed of lease. Witness my hand and seal this 22d day of September, 1873, which stipulation was duly signed and sealed by the said A. W. Thompson.
    That the said note named in said first cause of action, together with the said other note given contemporaneously therewith as aforesaid, wrere executed and delivered to evidence and secure the payment of the said rent for the year 1875, and the said notes named in said second and third causes of action, to evidence and secure the said rent due for the year 1876.
    That the said plaintiffs held said notes as their joint property, the interest of the said Mary M. Cochran in the said annual rental, amounting to the sum of eleven hundred dollars in each year, and the remainder amounting in each year to $4,708, belonging one half to said Thomas Massie, and one half to the said Gertrude Massie, “now Gertrude Fullerton.”
    That the said other note given contemporaneous^ with the note named in said first cause of action for $2,904, and payable February 1st, 1876, was, after the maturity thereof; discharged by said C. B. Thompson, and that thereafter, the interest of the said Mary M. Cochran in said three notes named in said petition was the sum of $550, in each of the same, and the remainder belonged equally to said Thomas and Gertrude, one half to each and so continued, except as diminished by payments on said notes as hereinafter found.
    3d. That the memorandum or writing upon said several notes referred to in said petition, and in the amended answer of A. W. and J. C. Thompson, was placed and written upon said notes by the said C. B. Thompson, with the knowledge and assent, and by the procurement of the said Thomas Massie, and is as to him a material alteration of the terms of said note.
    4th. That the said memorandum or writing was so made, without the knowledge or assent of the said A. W. and J. C. Thompson, who are hereby found to be merely sureties for said C. B. Thompson on said notes, and without any affirmance of the same by them, and that as against the said Thomas Massie and to the extent of any interest which he had in the said notes, the said sureties were discharged from liability thereon by reason of said alteration.
    5th. That the said notes were in the possession of the said Thomas Massie merely for safe keeping, and to receive payment thereof when due, and that he had no power or authority from his said co-plaintiffs, the said Gertrude Massie, now Gertrude Fullerton, aiid the said John L. Cochran and Mary M. Cochran, then or at any time to procure or assent to any alterations of the terms of said notes or otherwise, and that the said attempted alteration was made and procured wholly without their knowledge, and has not been at any time affirmed or assented to by them or either of them, and that said notes are as against the said A. W. Thompson and J. C. Thompson, and to the extent of the interest of the said Gertrude Fullerton and John L. Cochran and Mary M. Cochran, in full force according to their original tenor and effect.
    6th. The court further finds upon the admission of the .parties now here in open court made, that in addition to the payment made and credited upon said note set forth in said first cause of action, as stated in said petition, there have been paid on said notes, since the commencement of this action, by the assignee in bankruptcy of said C. B. Thompson, and at the times following, the following sums of money, which are entitled to be credited on said three several notes as follows, to wit: On said note, in said first cause of action, mentioned, $164.44 on January 31st, 1878, $164.48 on September 9, 1878, and $256.95 on October 31st, 1879.
    On said note in said second cause of action named, $236.26 on January 31st, 1878, $236.26 on September 9th, 1878, and $369.16 on October 13th, 1879.
    On said note in said third cause of action named, $232.78 on January 31st, 1878, $232.78 on September 9th, 1878, and $363.71 on October 13th, 1879. And that after crediting all of said payments upon the said notes respectively, there remains due thereon from the said A. W. Thompson and J. C. Thompson (irrespective of the discharge of the interest therein of the said Thomas Massie, as heretofore found), on the 28th day of May, 1880, the sum of seven thousand and thirty-four dollars and sixty-four cents, of which there would have been due to the said Thomas Massie (irrespective of said discharge), the sum of twenty-eight hundred and fifty-o.ne dollars and sixteen cents, and to the said John L. Cochran and Mary M. Cochran, in right of the said Mary, the sum of $1,332.32, which said sums are now due to the said Gertrude Fullerton and John L. Cochran and Mary, his wife, in right of the said Mary (amounting in the aggregate to the sum of $4,183.48), with interest from said May 28th, 1880. Wherefore it is considered :
    1st. That the said plaintiffs be and they are hereby barred by reason of the discharge in bankruptcy of the said'C. B. Thompson from any further proceeding or recovery against him, on either of the causes of action set forth in said petition.
    2d. That the said Thomas Massie be and is hereby barred from any further proceeding and recovery as against the said A. W. Thompson and J. C.' Thompson, or either of them, upon the causes of action: set forth in said petition, to the extent of the interest of the said Thomas in the same, as hereinbefore found and determined.
    3d. That the said Gertrude Massie, now Gertrude Fullerton, and the said John L. Cochran and Mary M. Cochran, his wife, in right of the said Mary, recover of the said A. W. Thompson and J. C. Thompson, the said sum of forty-one hundred and eighty-three dollars and forty-eight cents (^4,183.48), so found, to be due therein as aforesaid, and in the proportions so found with interest from said May 28th, 1880, and also their costs in this behalf expended, taxed to-dollars and — cents.
    A motion for new trial was overruled and exception taken. The cause was by the district court reserved to this court for its determination.

      P. C. Smith for plaintiff in error:
    I. As to the question of jurisdiction we say:
    No judgment could be taken against C. B. Thompson, and no action could be commenced against him after filing his petition in bankruptcy. Bump on Bankruptcy, 147-383. See 21 Original Bankrupt Acts, sec. 5106, Rev. Statutes U. S.
    Actions must be brought in the county where the defendant or one of the defendants reside, or may be summoned. Rev. Stats., § 5031. And the defendant must have a real and substantial adverse interest. Allen v. Miller, 11 Ohio St., 374. As no action could be maintained against C. B. Thompson, who resided in and was served in Ross County, the Court had no jurisdiction over the other defendants who resided in Pickaway County.
    As to the effect of a material alteration of a note as to sureties see Newell v. Mayberry, 3 Leigh, 250; Mills v. Starr, 2 Bailey, 359; Martindale v. Follett, 1 N. H., 95; Hatch v. Hatch, 9 Mass., 307; Warring v. Smith, 2 Barb., ch. 119; Bonser v. Cox, 4 Beav., 379; Draper v. Wood, 112 Mass., 315, S. C., 17, Am. Rep., 92; Edwards on Bills, 681; 2 Parsons Contr., 223; Brownell v. Winnie, 29 N. Y., 407; Meyer v. Huneke, 55 Id., 412; Booth v. Powers, 56 N. Y., 22; Penny
      v. Corwithe, 18 Johns., 499; Comrs. v. Hannion, 1 Nott & McCord, 554; Miller v. Stewart, 4 Wash., C. C. Rep., 26; Barrington v. Bank of Washington, 14 Serg. and R., 424; Heffelfinger v. Shutz, 16 Serg. and R., 44; Harch v. Kepler, 28 Ohio St., 200; Brown v. Jones, 3 Porlor (Ala.), 429; Ivory v. Campbell, 33 Mo., 398; 6 Wait’s Act. and Def., 490; McGrath v. Clark, 56 N. Y., 34; 13 Ohio St., 364; Fulmer v. Seitz, 68 Pa. St., 37; Patterson v. McNeely, 16 Ohio St., 348; Bowman v. Mitchell, 79 Ind., 84.
    The alteration was mafae at the solicitation of Thomas Massie, who had an interest in the notes. Fullerton v. Sturges, 4 Ohio St., 530; Berry v. R'y. Co., 26 Ohio St., 673; Nunney v. Colton, 1 Hawks., 222; Wright v. Wright, 2 Halsted, 175; Morris v. Vanderen, 1 Dal., 67; Jackson v. Malin, 15 John., 293; Cutts v. U. S., 1 Gall., 27; Piggott's Case, 11 Coke, 27; Hunt v. Adams, 6 Mass., 519; 3 Addison on Contracts, §§ 1280, 1281; Williams v. Van Tuyl, 2 Ohio St., 336 ; Warring v. Smith, 2 Barb. Ch., 119; 1 Story Eq. Jur., § 325; 2 Daniels on Neg. Inst., § 1387; Bank v. Hall, 1 Halst., 215; Smith v. Weld, 2 Pa. St., 54; Dolbier v. Norton, 17 Maine, 397; 2 Wall., 219; 9 Wheat., 680.
    III. Nor is the rule avoided as to Gertrude Massie, J. L. Cochran and Mary M. Cochran, who claim that they did not know of the alteration, authorize or.ratify it.
    The action is based on the altered notes, on notes that the defendants, A. W. Thompson and J. C. Thompson, never made or signed, on obligations that they never saw or authorized.
    The alteration in said notes, which destroys their validity, was made by the holder of the notes — one who held the notes by the consent of all the parties interested therein. The alteration was made at the solicitation of the party, who was intrusted by all the payees named in said notes with authority to take and hold, and collect them. With this large authority intrusted to Thomas Massie, he, while the notes were in his possession, solicited the principal in said notes to alter the same, by increasing the rate of interest, and they were altered accordingly, a new contract was made, one that the defendants, A. W. Thompson and J. C. Thompson, never entered into.
    Such alteration, made under such circumstances, releases the sureties, who had no knowledge of and did not consent thereto. Wood v. Steele, 6 Wall., 80; Master v. Miller, 4 Term Rep., 320; 1 Smith’s L. Cas., 1141; 36 L. J., 6 P., 141; Bangs v. Strong, 10 Paige, 11; 7 Hill, 250; 4 Comst., 315; Clark v. Patton, 4 J. J. Marshall (Ky.), 31.

      McClintic & Smith, for defendant in error.
    I. There was nothing to prohibit the bringing of the action in the county of Ross, where C. B. Thompson, one of the defendants resided, and where a summons could be served upon him. His interest, as a mulcer of the notes, was necessarily adverse to that of the plaintiffs. His interest was not collateral or nominal merely, but direct and substantial. The right of the plaintiffs to sue him, and, ultimately, to obtain a judgment against him was not taken away by the commencement of proceedings in bankruptcy. There could not even be a stay of proceedings, under section 5106, except on his own application. His final discharge was, at best, a mere contingency, which might never come to pass. The bankrupt had a long gauntlet to run of grounds for opposing his discharge, and of duties to be performed under the provisions of the bankrupt act, before the discharge could be assured.
    There is no pretense that this action was brought in Ross county, under any merely colorable device to defeat the policy of the law in respect to jurisdiction.
    The material question in the case was, and is, whether, where there are several payees named in a note, who are joint creditors and not partners, and which has not been assigned or endorsed by them in blank, or otherwise, one of them, having the notes in his possession merely for collection, with no general or special authority from his co-owners to bind them in any way, except by a receipt of the money due, can, by agreement with the principal of the notes, so change the contract as to. release the sureties, it being established that his co-creditors did not know of or assent to such change, and never in any manner ratified or affirmed it.
    It will be noted, that the suit is not brought on the notes in their alleged altered form, notwithstanding the repeated assertions of opposing counsel to the contrary, but in their original form, without the addition of the words which are alleged by the plaintiffs in error to have changed their legal tenor and effect. The petition sets out copies of the notes in three separate causes of action, in their original form, in which form they were confessedly the valid obligations of the defendants below, and then, by way of explanation, alleges that, long after the execution and delivery of the notes, one of the defendants made a memorandum at the bottom or foot of said notes, in the words, “ with eight per cent, interest after maturity.” It avers that this memorandum was not intended to alter or change the notes, or to affect their validity. It then alleges that this memorandum was so made “without the knowledge, consent, or authority of three of the plaintiffs, or either of them, and that none of these three had ever in any manner approved or affirmed the same.
    The case was not, therefore, one where the notes were materially changed, without the knowledge of the sureties, before delivery to the payee, and therefore never took effect as to such sureties, as was the case in many of the cases cited by counsel on the other side, of which Jones v. Bangs, 40 Ohio St., Warrington v. Early, 2 Ellis & Blackburn, 763, are examples.
    It is material to inquire what was the extent of the agency conferred upon Thomas Massie, and whether his alleged fraudulent act was within the scope of such agency; for if he were not authorized, either expressly or by implication, to do the alleged act, as the agent of Gertrude Massie and Judge and Mrs. Cochran, then the notes were not, as to them, altered, in the legal sense of that word. The reason of the rule that, where written instruments are altered, in the legal sense of that term, they are thereby made void, is stated in Fullerton v. Sturgis, 4 Ohio St., 429, thus: “ In such case a remedy is denied, and the instrument is destroyed, as a punishment for the fraud of a party claiming a benefit under it.” And on page 536, in the same case, Ranney, J., says: “ Fraud in the interested party lies at the foundation of the rule.” This reason does not apply to innocent parties. The public policy which aims to discourage the commission of a fraud, by subjecting the offender to the risk of losing all benefit under the instrument, ought not, and does not, go so far as to inflict such a penalty upon those who are not offenders. Neither is there any reason for inflicting such a penalty on innocent parties in order to preserve the identity of the instrument, and to prevent the substitution of another contract to which a party had not given his assent. Justice Story, in United States v. Spalding, 2 Mason, 478.

      Harrison, Olds & Marsh, in reply for plaintiff in erroi.
   Martin, J.

The first question for determination is raised by the demurrer to the plea to the jurisdiction. Did the court err in overruling the demurrer ?

Sec. 5031 Rev. Stat. provides that actions must be brought in the county where the defendant or one of the defendants resides or may be summoned. C. B. Thompson, the principal maker of the notes, resided and was summoned in Ross county, where the action was brought. The other defen' dants resided and were summoned in Pickaway county. The question is, was C. B. Thompson a defendant within the meaning of the above section. We readily accede to the claim that the statute contemplates a party having a substantial interest adverse to the plaintiff. And that jurisdiction cannot be conferred by a device such as naming a nominal defendant against whom no judgment could be rendered. It is insisted he was such nominal party. The plea shows that prior to the commencement of this action, proceedings m bankruptcy had been duly instituted against him, and were still pending, and that the notes sued on were provable claims, but had not been proved.

It is claimed that Sec. 5106 (Rev. Stat. U. S.) forbids the commen.cem.ent of an action against the bankrupt by a creditor of a provable claim.

The material part of that section is this:

Sec. 5106. “ No creditor whose debt is provable, shall be allowed to prosecute to final judgment any suit at law or in equity therefor, against the bankrupt, until the question of the debtor’s discharge shall have been determined; any such suit or proceedings shall, upon the application of the bankrupt, be stayed to await the determination of the court in bankruptcy on the question of the discharge.”

The inhibition of this section is against the prosecution of a suit to final judgment whilst the question of his discharge remains undetermined. If that question is finally adjudged against him, the suit may be prosecuted to judgment on its merits. It certainly was not the object of the statute to deprive creditors of the advantages, frequently important, resulting from the commencement of an action during the pendency of the proceedings in bankruptcy. The policy of this section may require restraint to the extent of preventing a useless and purely vexatious suit. In an action on the several obligations of the bankrupt, it may be requisite that the record show some special reason for the institution of the suit, or permission of the court in bankruptcy to commence it, which would imply a satisfactory reason.

Here, the claim sued on is joint, to which a joint judgment is proper, unless at the time of the judgment some of the defendants are discharged. This fact is, in our opinion, a justification for bringing the suit. And a stay of further proceedings ensures to the bankrupt all the advantages contemplated by that section.

At the commencement of the action it could not be said that judgment could not be obtained against C. B. Thompson. As principal maker and defendant he was a substantial party in interest; and it follows that the sureties were properly before the court.

The next question involves the merits of the case. Did the alteration avoid the notes as to the sureties ?

In Wallace v. Jewell, 21 Ohio St., 163, White, J., says: “It is a general rule of the law that the unauthorized material alteration of a written instrument by the holder, or with his consent, vitiates it as to non-consenting parties. The policy of the rule is to preserve the integrity of legal instruments by taking away the temptation of tampering with them.” In other well considered cases, the reason, or one of the reasons given for the rule is, that the identity of the instrument is destroyed, and as altered, it is not the obligation signed by the non-consenting party. Patterson v. McNeely, 16 Ohio St., 348; Berry v. Railway Co., 26 Id., 573 ; Harsh v. Klepper, 28 Id., 200.

In the case under consideration the alteration was by adding to the notes after delivery a stipulation for an increased rate of interest, and was confessedly material. It was made by the principal maker, and Thomas Massie, one of the joint payees, who was the custodian of the notes. But it was done without the knowledge or consent either of the sureties or the other payees. The latter claim that as to them and to the extent of their alleged equitable interest in, or proportion of the amount of the notes, the instruments are unimpaired by the alteration, and maybe enforced against the sureties. And it seems to be conceded that as to Thomas Massie and any separable interest he may have the sureties are discharged.

If this alteration had been made by a stranger, the law in this country would reject it, and enforce the notes according to their original terms. Such an alteration is regarded as a mere spoliation and parol evidence is admissible to ascertain the true terms of the contract. And thus the identity of the instrument is preserved and full effect given to it.

But the alteration in this case was not made by a stranger, but by parties to the instrument — one of whom had a beneficial interest in it.

In Williams v. Van Tuyl, 2 Ohio St., 337, the general rule is enunciated that a material alteration made by a party beneficially interested in the instrument avoids it. This rule is also announced in many adjudicated cases, and is commonly quoted and adopted in the text-books without qualification. We do not say it is of universal application. If each of these notes had specified the aliquot shares of the payees respectively, the question might possibly be somewhat varied.

In this case, however, the instrument is a promissory note in common form. The promise is to the payees jointly. They had each the right to its custody, to receive its amount and to release the debt. And whether the alteration under consideration is to be regarded as a mere spoliation, depends on the question as to whether it may consistently with legal principles be rejected and the identity of the original obligation preserved. If this cannot be done the case falls within the rule of material alteration, supported by the policy and reasons already indicated. As between the maker and payee, who made the alteration, it was an effective act. And the sureties it is clear were not bound by it. It cannot be rescinded and the parties to it restored to their original rights against the sureties. Brandt on Suretyship, 331. We cannot therefore regard it as a mere spoliation. On the contrary it is a material change in the terms of the contract made without the assent of the sureties. And being effective and beyond recall, the sureties may well say the notes thus altered they did not sign. It will be borne in mind that the judgment was in favor of the sureties against Thomas Massie, thus recognizing the effectiveness of the alteration. It was against the sureties and in favor of the other payees for an alleged equitable portion of the debt. It seems to us that to affirm this judgment would be equivalent to declaring good in law a petition against the sureties by a part only of the payees, founded solely on the hardship inflicted on them by the act of their co-payee, and in which the sureties had no participation. Indeed the claim is made in argument that in equity the proportionate shares of the debt should ■ be adjudged against the sureties. This claim is inconsistent with a surviving legal obligation in the notes. As against sureties there is no consideration to fall back upon in lieu of the original formal undertaking. And they pi ay stand strictly on its terms.

In State v. Medary, 17 Ohio, 565, it is said by Judge Read, “ There is no construction, no equity against sureties. If the bond cannot have effect according to its exact words, the law does not' authorize the court to give it effect in some other way.”

This view renders unnecessary any comment on the other errors assigned.

Judgment reversed.


source: Caselaw Access Project

author: Dickman, J.

license: Public Domain

text:
    Iron Railroad Company v. Fink.
    1. If an installment of stock in a railroad company remain unpaid by tbe original subscriber, an assignee of the stock, who is willing to comply with the corporate regulations respecting the issue of stock certificates and the ti'ansfer of stock, may, upon making a proper tender of the unpaid installment, with the interest thereon, maintain an action in equity, against the corporation, to compel it to issue to him a stock certificate.
    2. As against such an action, the statute of limitations will begin to run from the time of such tender.
    Error to the District Court of Lawrence County.
    On the 7th day of March, 1849, the General Assembly of Ohio passed an act incorporating the plaintiff in error, the Iron Railroad Company, with authority to construct a railroad from a point on the Ohio river in Upper Township, in said County of Lawrence, to the south line of. Jackson County, in said state, with an authorized capital stock not exceeding $500,000, with all the powers, and subject to all the restrictions and reservations of the “Act regulating railroad companies,” passed February 11,1848. (46 Ohio L., 40.) By virtue of said act of March 7, 1849, the parties named therein as incorporators, organized, in that year, said railroad company, and caused books to be opened for receiving subscriptions to the capital stock. Henry Blake, on the 23d of April, 1849, subscribed to the capital stock of said company eightjr shares of fifty dollars each, amounting in all to $4,000. Blake died July 28th, 1851, leaving a will, by the provisions of which, after payment of debts and legacies, the entire residue of his property and effects was devised to his son, James Henry Blake. The executors named in the will failed to- qualify, and the administrator with the will annexed, who was thereupon appointed, having subsequently resigned, James 0. Willard was, in April, 1852, appointed administrator de bonis non, with the will annexed. Willard acted as administrator until his death, in May, 1855. In June, 1855, C. G. Hawley was appointed administrator of the estate, with the will annexed, and from that time until March, 1864, when he filed his final account with the probate court, acted as administrator, receiving and disbursing a large amount of money, including over $5,000 paid to said James Henry Blake, as residuary legatee under his father’s will. Between April 23, 1849, and July 1, 1851, inclusive, said company made sixteen calls for installments on said stock subscribed by said Henry Blake, said calls amounting in all to $4,000, of which said Henry Blake paid six, amounting to $1,240, and also made a cash payment in addition to said paid calls, amounting to $264.32. On July 1,1853, Willard, as administrator, made a cash payment upon said stock of the further sum of $1,247.84, making in all, -as paid on the subscription, the sum of $2,752.16. No other payments were made upon said stock, and no legal steps or proceedings were ever taken by said company to enforce the payment of the residue of said subscription by action, or to dispose of said stock by sale, as the means of reaching such payment, during the life' of Henry Blake, or while said Willard and Hawley were administrators of the estate, or at any other time. On the 5th of May, 1870, the said James Henry Blake, as owner and residuary legatee, sold and transferred, for value received, to the said Jacob Fink, the defendant in error, the said eighty shares of stock. There was never any transfer of said shares on the books of said company, either to Henry Blake, or to said residuary legatee. Prior to purchasing this stock, said Fink saw the president of the company, who informed him that if he, Fink, got the stock from said James Henry Blake, he ought to have certificates for what would be paid up. At a meeting of the directors of the company, in the Ironton House, in the spring of 1872, Fink was in attendance and presented the assignment of stock made to him by James Henry Blake. When the meeting was over he was notified in behalf of the directors that the matter of certificates for his stock had been referred to the company’s attorney. The secretary of the company, Samuel R. Richards, testified at the trial* below, that there was a record of the company showing that that matter of Fink’s stock was referred to the attorney of the 'road. After said directors’ meeting the company’s attorney, in the presence of the president of the company, informed Fink that the matter of said certificates would be fixed up at any time, when he brought to the company the amount due on his stock. Fink, accordingly, on the 25th of February, 1873, made good and lawful tender to the proper officers of the company, of the amount of the installments of stock remaining unpaid, with the interest thereon, and demanded his stock certificates, which the company refused to issue.
    Up to the year 1864 the stock of said company was of little value when paid up in full. Hawley, the administrator, in the year-1855, when requested to pay the unpaid installments, declined to appropriate the funds of the estate to that object. James H. Blake became of age July 8th, 1855, but no demand was ever made upon him by said company to pay the unpaid installments. After the year 1864 said stock increased somewhat in value, and cash and stock dividends thereon were declared and paid by the company.
    ' On the 31st day of December, 1873, the original action was commenced in the court of common pleas of Lawrence county, by the said Jacob Fink against the said Iron Railroad Company. At the February term, 1876, the cause was submitted to the court, and the findings and judgment of the court were for said company. Thereupon Jacob Fink appealed the action to the district court, and there filed an amended petition, with a prayer for relief, as follows:
    “ Plaintiff asks that an account shall be taken as to the state and condition of the business and affairs of said company, and especially that the increase and gains of said company since its organization, shall be ascertained and determined. Also, that there maybe a finding as to the disposition of said increase and gains, and in what shape the same is now standing — whether in the shape of investments in the extension and improvement of the property of said company, or in dividends declared and paid over to'stockholders, or applied in any way for their benefit. That the per centum-of increase and gains, made by said company upon each dollar paid to said company by stockholders, upon the shares of stock- subscribed for- by each man, be ascertained and determined. That the amount required to pay the balance remaining unpaid upon said eighty shares of stock subscribed for by the said Blake, together with the interest on the same, accruing thereon since said balance was due and payable, be ascertained and stated; how much, if any part of said increase and gains of said company is applicable- or should be applied to the payment of said balance, remaining unpaid upon said shares of stock, and when such application is made, how much, if anything, shall remain unpaid upon said eighty shares. That upon the ascertainment of said amount so remaining due and payable upon said eighty shares of stock, a reasonable time be fixed for the payment of the same by the plaintiff, and upon the payment of the same bjr him within the time so fixed, that the defendant may be ordered and adjudged to enter upon the books- of said company, among the stockholders, the plaintiff as the owner of said eighty shares of stock subscribed for as aforesaid by the said Blake. That the proper certificates for said shares of stock be issued to the plaintiff, and thereupon and after that he be recognized and treated as a stockholder in said company, and the owner of said eighty shares of stock therein.” Several defenses were set up in the answer to the amended petition, to each of which a demurrer was filed and sustained, except to a plea of the statute of limitations of fifteen years, and to the second defense containing a statement of facts, which, it was averred, showed that Fink was not entitled to the relief prayed for. To said plea and second defense there was a reply, and at the April term, 1881, the district court found the issues joined, in favor of said Fink, and that the matters stated in the amended petition were true, and that the matters stated in the answer thereto were not true, and that said Fink was entitled to an account as prayed for in said amended petition, and to relief as follows, to wit:
    “That upon payment of the residue of the amount unpaid upon said eighty shares of stock in said Company, subscribed for by the said Henry Blake, and assigned to plaintiff with interest on said amounts from the time the said unpaid assessments were called in; he is entitled to be admitted, recognized and treated in said Company as the owner of said 80 shares of stock, and as such owner, is entitled to all of stock and cash dividends that have heretofore been declared thereon, or to which the owner of 80 shares of stock is entitled, or that may hereafter be declared thereon, and to all the profits and increase arising upon said shares, and is entitled also to all the rights and privileges of an original stockholder, owning 80-shares of stock in said Company; and upon payment of said amount he is entitled also to a certificate for said shares, and it is the duty of said Company to issue the same to him. Inasmuch, however, as the court is unadvised as to the amount remaining due upon 80 shares of stock, and as to the cash dividends to which the plaintiff is entitled upon said shares, and that should be ap ■ plied to the payment of said amount so remaining unpaid, and is unadvised also as to the said stock dividends and the number of shares that the plaintiff is entitled to as the owner of said 80 shares, on motion of plaintiff, it is ordered that this cause be and the same is referred to Elias Nigh, Esq., who for that purpose is appointed a special master commissioner to take testimony and report in respect to the following particulars, to-wit:
    1. The amount remaining unpaid upon said 80 shares of stock and the interest, thereon fro in the time the same became due and payable.
    2. The amount of cash dividends to which said 80 shares is entitled, and when payable.
    3. The amount of stock dividends upon said 80 shares so originally subscribed.
    4. The amount of cash dividends, if any, upon said shares of stock dividends to which the plaintiff, as owner of said shares, is entitled.
    5. The amount of profits, if any, arising in any other way upon said 80 shares to which the plaintiff, as owner of said shares, is entitled.”
    A petition in error was filed in this court, to reverse the said findings, orders and judgment, of the district court. At the April term 1882 of the district court, the said master commissioner submitted his report, which, among other findings, embraced the following:

      First. The amount remaining unpaid on said 80 shares of stock with interest from the time the same became due and payable not deducting profits arising thprefrom, amounts to.............................. $3,791.94

      Second. The amount of cash dividends to which said 80 shares of stock is entitled with interest to April 20, 1882......'.............. $1,138.25

      Third. Amount of stock dividends to which said 80 shares is entitled is 182 shares, amounting to $9,100.00.
    . Fourth. The Amount of cash divi dends upon said 182 shares of stock dividends to which said plaintiff is

      Brought forward,.............. $1,138.25 $3,791.94 entitled with the interest to April 20, 1882, is...................... $1,972.31

      Fifth. There are no other profits arising on said 80 shares of stock except fractions in equalizations and stock dividends, which did not equal one share of stock, amounting with the interest to April 20,1882, to the sum of.......................... $71.47 $3,182.03
    Due Defendants, April 20, 1882.. $ 609.91
    The court, proceeding to compute the interest, found that instead of the amount remaining due and unpaid being $609.91, as found by said master, the true amount, with interest computed to April 20, 1882, was $1,264.50; and with that correction, said master’s report was approved and confirmed.
    And thereupon the court, from said report of the master, and from said finding of the court in correcting said report, and from the evidence taken before said master, found, that said Fink, upon the payment of said sum of $1,264.50, after applying all payments made on said eighty shares of stock, and all cash dividends declared thereon, was entitled to have and hold, as of the date of April 20, 1881, said eighty shares of stock, and in addition thereto, one hundred and eightv-two shares for the stock dividends, declared upon said eighty shares.
    And thereupon the said Iron Railroad Company moved the court to set aside said finding, and grant a new hearing of the case, which motion was heard and overruled, to which ruling the company excepted. It was thereupon ordered and adjudged, that upon the payment within thirty days, to said company by said Fink, of said sum of $1,264.50, with interest thereon from April 20, 1882, the said Fink be declared and adjudged to be the owner of two hundred and sixty-two shares of stock in said company, as of the date of April 20, 1881, with all the rights and privileges of the owner of said number of shares; and that said company be required to recognize and treat the said Fink,'in all respects, as the owner of said shares of stock therein, and upon demand made, after payment of said sum of $1,264.50, so remaining unpaid upon said shares, to issue and deliver to him proper certificates for said two hundred and sixty-two shares of stock in said company.
    To reverse the findings, orders and judgment of the district court at said April- term, 1882, a second petition in error was filed in this court by said company, and docketed as a separate and distinct action.

      Neal & Cherrington and W. A. Hutchins, for plaintiff in error.

      O. F. Moore and R. Leete, for defendant in error.
   Dickman, J.

It appears from the record, that at the organization of the Iron Railroad Company in the year ■1849, Plenry Blake subscribed for eighty shares of its capital stock, of the par value, of fifty dollars each. Between the 23d of April, 1849, and the 1st of July, 1851, inclusive, sixteen installments of stock, in the aggregate equal to the full amount of his subscription, were called for by the company. At the time of his death, on the 28th of July, 1851, Blake had paid six of these installments as called for —the last being that of March 1st, 1850. He had also made a cash payment in addition to paid' calls, and his administrator made a further cash payment in July, 1853, leaving an unpaid balance on his original stoek subscription. Up to the year 1864, the stock of the company,- when paid up in full,' had but little market value, and in the year 1855 the administrator of Blake declined to pay the unpaid calls.

It is contended in behalf of the company, that the cause of' action of the plaintiff below, accrued at the date of ■this declination by the administrator, and that more than ■fifteen years having thereafter elapsed, prior to the commencement of this action, it is consequently barred by the statute of limitations. The company’s right of action to recover installments of Henry Blake’s subscription, did not accrue until calls were made for the same, and such right of action being upon a promise in writing, the limitation was fifteen years. Gibson v. C. & N. R. Turnpike & Bridge Co., 18 Ohio St., 396; Warner v. Callender, 20 id., 190. The company, within the period of statutory limitation, did not see fit to avail itself of its right, given by statute, to collect by action the unpaid installments on Blake’s subscription, or to sell the stock at public auction, for the payment of such installment. The owner of the eighty shares had thus good reason to conclude, that the company did not intend to enforce payment of the delinquent calls, or to foreclose him by sale of the right to comply with the corporate regulations, pay up the balance due on the stock, and clothe himself with all the rights of a stockholder. Accordingly, on the 25th of February, 1873, the defendant in error, Jacob Fink, as assignee and owner of the eighty shares, tendered to the proper officers of the company, the amount of the installments remaining unpaid, with the interest thereon, and demanded the issue to him of stock certificates, which the company refused. Upon such demand and refusal, a cause of action accrued to Fink, and suit was thereafter begun, on the 31st day of December, 1873. In Railroad Co. v. Robbins, Admr. etc., 35 Ohio St., 483, it was held, that until the transfer of the stock to the holder of the original certificate was refused, the statute of limitations did not begin to run. The rule adopted in that case, applies, we think, with increased force to the case at bar, and we must hold, that the statute did not begin to run against the defendant in error, until he had made his demand on the company for the certificates, and met with a refusal.

It is urged by the plaintiff in error that the contract of subscription was abandoned by Hawley, the administrator, when he declined to pay the unpaid calls, and that such abandonment was acquiesced in by the company. The record, in our judgment, discloses a state of facts which shows that the company, after the assignment 'of the stock on May 5th, 1870, by James H. Blake, the residuary legatee, to Jacob Fink, recognized the contract as still in existence. Where one has once been entitled to repudiate a contract, because it has not been performed in a reasonable time, if he do any act which amounts to an admission of the existence of the contract, he cannot afterwards elect to treat it as void. Brindley v. Tibbets, 7 Greenleaf, 70; Lindsey v. Gordon, 1 Shepley, 60; Barry v. Palmer, 19 Maine, 303. Before purchasing the stock Fink had an interview with the president of the company, and was .informed by him that, if he-obtained the stock in question from James H. Blake, he ought to have certificates for what would be paid up by him. Having 'thereupon purchased the stock, he attended a meeting of the directors of the company in the spring of 1872, presented to them the assignment of stock executed to him by James H. Blake, and made claim to stock certificates for the same. When the meeting was over he was notified, in behalf of the directors, that the matter of the certificates had been referred to the company’s attorney, and a record of the company, as testified by its secretary, shows such to have been the fact. The company’s attorney afterwards, in the presence of its president, told Fink that the matter of his stock certificates would be “ fixed up ” at any time, when he brought to the company the requisite amount of money. Thus encouraged by the chief officer of the company to purchase the stock, and afterwards assured that by paying up all arrears he could obtain the usual stock certificates, he complied with the condition imposed, and on the 25th of February, 1873, tendered to the proper officers of the company the unpaid installments, with the accrued interest. With these facts before us we cannot treat the contract of subscription as abandoned, and no longer in existence for the enforcement of its provisions.

If the company had deemed it expedient that the account of Henry Blake upon its books, in reference to his stock subscription, should be closed, a feasible mode of procedure was provided by law. Before and since the date of the subscription the provisions of section 3253 of the Revised' Statutes have been in force. By that section, if an installment of stock remain unpaid for sixty days after the time it is required to be paid, whether such stock isÉheld by an assignee, transferee, or the original subscriber, the same may be collected by action, or the directors may sell the stock so unpaid at public auction for the installment J:hen due thereon —the prescribed notice being first given; and if any residue of money remain after paying the amount due on the stock, the same shall, on demand, be paid to the owner; and if the whole of the installment be not paid by the sale, the remainder shall be recoverable by an action against the subscriber, assignee, or transferee. Although Hawley, the administrator, had ample assets in his hands, and upon final settlement of the estate transferred ’over five thousand dollars to the residuary legatee, the company took no steps to collect by action the unpaid subscription, or by sale at auction to change the ownership of the stock, and put it in the name of another person than the original subscriber. In the face of these statutory provisions it was not within the power of the company to declare the stock of Henry Blake forfeited, charge back to the estate the amount paid on the subscription by him and his administrator, appropriate and convert that amount to the company’s own use, and thus terminate and destroy his interest, and that of those claiming under him, in the stock subscribed. The statute operates in a spirit of justice both toward the delinquent subscriber and the company, whose success or failure in the object of its creation depends in a large measure upon the prompt payment of stock subscriptions, securing to the one the residuo remaining after paying from the proceeds of sale the amount due on the stock, and giving to the company a right of action against the subscriber for the remainder of the installment, if the proceeds of sale are insufficient to pay the whole. If the subscriber is unable to pay the calls made by the company, the design of the statute is to secure to him an honest disposition of his shares by sale at public auction to the highest bidder. If not thus disposed of, or sold by the subscriber himself, they continue his property. They do not fall back into the general property of the corporation, and become merged therein, so that the corporation is at liberty to issue and sell new shares in their stead. If the corporation elects to waive its rights, and neglects its duty, it cannot complain if the subscriber asks to pay up his subscription in full, receive the certificates of his stock, and to be invested with the privileges of a stockholder. We say “duty,” because, as said by Lord Cranworth in Spackman v. Evans, L. R., 3; H. L., 186, “The shares are, in substance, made a security to the company for the money from time to time becoming due from the shareholder. The duty of the directors, when a call is made, is to compel every shareholder to pay to the company the amount due from him in respect to that call; and they are guilty of a breach of their duty to the company if they do not take all reasonable means for enforcing that payment.” The stock in the name of Henry Blake may have been much depreciated in value when the administrator declined to use money of the estate, in his hands, to pay the overdue calls-; yet, it then became regular and legitimate for the company to sell the stock at public auction for what it would bring, and after applying the proceeds of sale, to hold the estate for the balance unpaid on the installments, and thereby place the stock beyond the reach of the administrator, residuary legatee, or his assignee. But the company failed to adopt the statutory method of foreclosing the interest of the original subscriber. The title to the stock for which he subscribed remained unchanged and unimpaired by any action on the part of the company, with no bar to the right of the subscriber, or those claiming under him, to convert the shares into full paid up stock, and call for certificates.

But, the question arises, had Fink the right to demand the issue to him of certificates for the stock he had purchased from the residuary legatee, and what was his remedy, when the company refused to comply with the demand? Though holding no certificates as indicative of legal ownership, he was doubtless the equitable owner of the shares subscribed by Henry Blake. As such owner, seeking not only a transfer to himself of the specific property — the eighty shares — but other equitable relief in reference thereto, it came within the province of a court of equity to extend to him its aid. It is said however, that courts of equity do not entertain jurisdiction for a specific performance on the sale of stock, where a compensation in damages would furnish a complete and adequate remedy. But courts of equity will not refuse to entertain jurisdiction, when, in connection with the relief of decreeing a transfer of specific property, a further and essential relief is asked, which those courts, by their procedure, are. best adapted to furnish. Fink, as equitable owner, is seeking not only an issue to him of stock certificates, and to be recognized and treated as a stockholder, but he prays for relief by way of account— running through many years — of cash and stock dividends declared, of profits arising in any other manner upon his stock, of the increase and gains of the company since its organization, of the disposition of such increase and gains, and the shape in which they now stand — relief especially equitable in its character, and which he could not adequately obtain through an action at law for the recovery of damages. As far as his remedial rights are concerned, we do not think he should be treated as a delinquent subscriber to stock, and be debarred the privileges of a stockholder, for, although neither Henry Blake, nor his administrator, nor James H. Blake ever fully paid the original subscription, Fink, in that regard, is chargeable with no default, his tender of the full amount due on the subscription having been refused by the company.

The practice of courts in the exercise of chancery powers, to decree the transfer of stock by corporations, is settled by well adjudged cases. In Hill v. Rockingham Bank, 44 N. H., 567, it was held that a bill in equity will lie to compel the delivery of certificates of stock to one who has already an equitable title to such stock, although a suit at law might also be maintained therefor. In Cushman v. Thayer M. Co., 76 N. Y., 365, which was an action to compel the corporation to transfer upon its books certain shares of stock, and to issue a new certificate, the court say: “ The jurisdiction which courts of equity exercise over individuals, extends equally to acts done or omitted to be done by private or municipal corporations. And the power to compel a transfer of specific property is- a salutary one, and should be exercised where such relief alone will work a complete and ample remedy.” The same principle has been recognized in other cases, in which courts in the exercise of a sound discretion, have decreed a transfer of stock by corporations, in connection with other equitable relief.

Apart from the aforegoing considerations, it will, we think, be suggested by the record that the apparent effort of the plaintiff in error to retain, without accounting, the several sums of money paid to the company by Henry Blake and his administrator, does not forcibly commend itself to the equity and good conscience of the court, when asked to refuse all equitable relief, and remand the defendant in error to his action at law for damages.

In our opinion there should be an affirmance of the' judgment of the district court.

Judgment accordingly.


author: Granger, C. J.

text:
    Harrison v. Neely.
    Under the fifth exception in Section 5242 Revised Statutes of Ohio, in an action upon a promissory note when the survivor of two joint payees and the administrator of the other are plaintiffs, an adverse party may testify to admissions made or acts done by either payee in presence of the survivor.
    Error to the District Court of Hamilton County.
    The- payees sued the makers in Hamilton Common Pleas, upon a promissory note reading thus:

      “ 1288.33. Cincinnati, Ohio, April 1st, 1879.
    “ One year after date we promise to pay to the order of John M. Neely and James Hulick two hundred and eighty-eight and^N dollars, with eight per cent, interest from date, payable at First National Bank of Batavia, Ohio. Value received.
    Wm. H. Harrison,
    Sarah A. Harrison.”
    The makers filed separate answers. W. H. Harrison averred, first, that the note was “ given wholly without consideration ; and second, that it was given because the payees threatened him with a groundless criminal prosecution.” Sarah alleged that the note was given without consideration; and that she was surety only. A reply to W. H. Harrison’s answer denied its averments. Hulick died, and on motion of Neely the administrator was made a party plaintiff. After this, Sarah filed an amended answer, making the following defense:
    “That at the time of the alleged making of the note in the petition set forth, she signed the same upon the sole and only consideration that the plaintiffs then claimed and represented that her son, the said William H. Harrison, defendant, had rendered himself liable to a criminal prosecution on the charge of obtaining money under false pretences, and that unless she signed said note they would prosecute her son, criminally, for obtaining the amount of said note from them by false pretences; that thereupon this defendant, upon the sole consideration of the forbearance to so prosecute and of the compounding of said claimed felony upon the part of her said son, and upon no other consideration whatever executed said note; that said consideration is illegal and void.”
    This was denied by a reply. At the trial the defendant, W. H. Harrison, was placed upon the stand, and by his attorney asked the question, “ State whether or not, prior to the signing of the note in controversy, the plaintiffs, Messrs. Neely and Hulick, called to see you at your house, in reference to the money claimed by them to be due them. by you ? ” to which the plaintiffs, by their attorney, objected, as well as to the party defendant testifying to anything that occurred in connection with James Hulick, deceased; the defendants then stated that, to maintain their defense to the action, they offered and ;were prepared to prove by said witness that Messrs. Neely and Plulick, the original plaintiffs in this action, came to Cincinnati, to the residence of W. H. Harrison on two occasions, first by themselves and secondly with their attorneys, and then and there represented to the said W. H. Harrison, one of the defendants in this action, that he had been guilty of obtaining money under false pretences and had rendered himself liable to a criminal prosecution, and that unless he gave them a note for the amount, with good and sufficient security, they would institute criminal proceedings against him. That the said Harrison then advised the said Neely and Hulick that he could get nobody to endorse his paper but his mother; and that thereupon, and at their instance, he went to his mother and represented to her that Messrs. Neely and Hulick were about to prosecute him criminally, and would- so prosecute him, and claimed that they could successfully prosecute him unless he secured her endorsement; and that thereupon she, the said Sarah Harrison, party defendant, by reason of said threats, and to save her son from the disgrace of a public criminal prosecution, and for this and no other consideration, was induced and did sign the said note upon which this action is .based. The plaintiffs objected to the admission of said testimony by the said witness, a party defendant, which objection was sustained by the court, to which the defendants excepted. The verdict was for the plaintiffs. .A motion by defendants for a new trial was overruled, and judgment rendered on the verdict. A bill of exceptions was duly made part of the record. The District Court affirmed the judgment.

      Glidden & Crawford and Percy Werner, for plaintiffs in error.

      William Disney and James C. McMath, for defendants in error.
   Granger, C. J.

Section 5242 provides that “A party shall not testify when the adverse party * * * is an executor or administrator, or claims or defends as heir, grantee, assignee, devisee or legatee of a deceased person.” Following this prohibition are eight (8) paragraphs excepting certain cases from its application. Each of these exceptions authorizes the admission of testimony which would otherwise be excluded by the words above quoted. Each of these, except the fifth, is so framed as to plainly show that such is its object.

The fifth exception reads thus:

“ 5. In ah action, or proceeding, by or against a partner, or joint contractor, the adverse party shall not testify to transactions with, or admissions by, a partner or joint contractor since deceased, unless the same were made in the presence of the surviving partner or joint contractor; and this rule shall be applied without regard to the character in which the parties sue, or are sued.” Notwithstanding its form, this paragraph is one intended, as already said, to authorize the admission, in the cases named by it, of testimony that would otherwise be excluded by the first clause of the section. When the administrator of the deceased partner, or joint contractor is a co-plaintiff, said first clause excludes the testimony of the adverse party. •So also if the surviving partner, or joint contractor, claims, or defends, as heir, grantee, assignee, devisee or legatee of his deceased partner, or joint contractor. And as the last requirement of the section reads “ and when a case is plainly within the reason and spirit of the last three sections though not within the strict letter, their principles shall be applied,” it would seem that the prohibitory clause ought to be construed as applying in favor of any party who claims, or defends, under rights derived from a decedent, whether the transfer of interest be effected by the contract or act of the parties, or by operation of law. A surviving partner may sue or be sued, on firm contracts without joining the administrator or executor of his deceased partner. In such case he is the representative of the interest of his dead partner, as well as his own. The spirit of the prohibition applies fully in his favor. But exception “5” intervenes, and allows the adverse party to testify to admissions by, or transactions with, the decedent, if made in the presence of the surviving partner. Although, in terms, admitted against the interest of the surviving partner, such testimony is in effect, admitted against • the decedent; because the judgment will conclude the matter, and the survivor can only be called upon to account to the estate of the decedent for its share of the recovery if any, had. We think exception 5 should be read as if its form were similar to that of each of the other exceptions in this section; that is as a permission to admit, in the cases named, testimony otherwise excluded by the opening prohibition. Obeying at the same time the instruction of the concluding lines of the section, the following seems to.be, upon the whole the true meaning:
“ 5. In actions relating to joint contracts, or partnership transactions, the adverse party may testify to words said, or acts done, in presence of the surviving partner, or joint contractor.” We see no reason for holding that such testimony is inadmissible where the administrator of the decedent is a party. The estate is then no more interested and ■will be no more seriously affected, by the admission of the testimony, than in the case of suit by, or against, the surviving partner as such.

If the witness be allowed to state admissions made, or acts done, by the decedent, in presence of the surviving partner, there is no reason for excluding his testimony as to acts done, or admissions made, by the surviving partner himself. The spirit of exception 5 certainly includes the acts, or admissions, of both parties done, or made, in presence of the survivor.

Mrs. Harrison's answer averred that the only consideration for her signature to the note was the threat to prosecute her •son. The bill of exceptions tells us that the son would have testified to facts tending to prove the truth of this averment. The trial court ought to have admitted the evidence for the consideration of the jury. The judgments below must therefore be

Reversed.


author: By the Court.

text:
    Hughes v. Village of Clyde.
    Error to the District Court of Sandusky County.

      J. H. Rhodes, for plaintiff in error.

      John M. Lemmon, for defendant in error.
   By the Court.

Pursuant to Section 562, Municipal Code, as amended March 20, 1873 (70 Ohio Laws, 83), the village advertised for bids for building a town hall according to plans and specifications. On July 15, 1873, the council ordered that the bid of Hughes “be accepted and the job awarded to him.” Both parties supposed that a contract remained to be executed, and each caused one to be drawn up. Notice, specifications, bid and acceptance were silent as to times and terms of payment, and as to superintendence. The specifications called for timber and lumber “ of good, sound quality,” and for “ thoroughly seasoned” flooring. Hughes’ draft allowed him to use “ kiln dried lumber,” named one Johnson as superintendent, and provided for payments at such times and in such installments as suited him. The council’s draft required that “ all lumber should be well seasoned; ” named other superintendents, and made other stipulations as to times and installments for the payments; it also denied payments for any extras. Each refused to execute the other’s draft of contract, and on August 5, 1873, the council indefinitely postponed the building of the town hall. Hughes never offered to execute any contract limited to the terms expressed and implied by the notice, plans and specifications, bid and acceptance. He sued for damages for alleged breach of contract, but the verdict and judgment were for the village.

Meld: 1. Said Section 562 (70 Ohio Laws, 83), contemplated that after a bid had been accepted, a contract between the bidder and the village would be “ entered into.”

2. The acceptance of a bid legally made under said section only gave to the bidder a right to a contract embracing the stipulations expressed or implied in the records, or files relating to the improvement, including amongst them the notice, the plans and specifications, the bid and the resolution of acceptance. See Commissioners v. Rhoades, 26 Ohio St., 411.

3. As Hughes never offered to execute such a contract, and the village did not waive its execution, he had no right of action.

Judgment affirmed.